10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2020

Or

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

For the transition period from      to      

Commission file number:

001-36299

Ladder Capital Corp

(Exact name of registrant as specified in its charter)

Delaware			80-0925494
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)
345 Park Avenue,	New York,	NY	10154
(Address of principal executive offices)			(Zip Code)

(212) 715-3170

(Registrant’s telephone number, including area code)

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

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A common stock, $0.001 par value	LADR	New York Stock Exchange

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

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

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): 

Yes ☐  No ☒

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

Class	Outstanding at July 15, 2020
Class A common stock, $0.001 par value	115,015,738
Class B common stock, $0.001 par value	5,379,708

LADDER CAPITAL CORP

FORM 10-Q

June 30, 2020

Index			Page
PART I - FINANCIAL INFORMATION			5
Item 1.	Financial Statements (Unaudited)		5
		Consolidated Balance Sheets	6
		Consolidated Statements of Income	7
		Consolidated Statements of Comprehensive Income	9
		Consolidated Statements of Changes in Equity	10
		Consolidated Statements of Cash Flows	14
		Notes to Consolidated Financial Statements	17
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		71
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		104
Item 4.	Controls and Procedures		107
PART II - OTHER INFORMATION			107
Item 1.	Legal Proceedings		107
Item 1A.	Risk Factors		108
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		109
Item 3.	Defaults Upon Senior Securities		109
Item 4.	Mine Safety Disclosures		109
Item 5.	Other Information		109
Item 6.	Exhibits		110
SIGNATURES			111

1

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report, 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. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ from those expressed in our forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements are subject to change and inherent risks and uncertainties. You should consider our forward-looking statements in light of a number of factors that may cause actual results to vary from our forward-looking statements including, but not limited to:

•risks discussed under the heading “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2019 (“Annual Report”), as well as our consolidated financial statements, related notes, and the other financial information appearing elsewhere in this Quarterly Report and our other filings with the United States Securities and Exchange Commission (“SEC”);

•the ongoing impact of the COVID-19 pandemic and of responsive measures implemented by various governmental authorities, businesses and other third parties;

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

•changes to our business and investment strategy;

•our ability to obtain and maintain financing arrangements;

•the financing and advance rates for our assets;

•our actual and expected leverage and liquidity;

•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 mortgages and the loans underlying our mortgage-backed and other asset-backed securities;

•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 potential downgrade in the credit ratings assigned to Ladder or our investments;

•our compliance with, and the impact of and changes in, governmental regulations, tax laws and rates, accounting guidance and similar matters;

•our ability to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes and our ability and the ability of our subsidiaries to operate in compliance with REIT requirements;

•our ability and the ability of our subsidiaries to maintain our and their exemptions from registration under the Investment Company Act of 1940, as amended (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;

•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 impact of any tax legislation or IRS guidance;

2

•the degree and nature of our competition; and

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

You should not rely upon forward-looking statements as predictions of future events. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The forward-looking statements contained in this Quarterly Report are made as of the date hereof, and the Company assumes no obligation to update or supplement any forward-looking statements.

3

REFERENCES TO LADDER CAPITAL CORP

Ladder Capital Corp is a holding company, and its primary assets are a controlling equity interest in Ladder Capital Finance Holdings LLLP (“LCFH” or the “Operating Partnership”) and in each series thereof, directly or indirectly. Unless the context suggests otherwise, references in this report to “Ladder,” “Ladder Capital,” the “Company,” “we,” “us” and “our” refer (1) prior to the February 2014 initial public offering (“IPO”) of the Class A common stock of Ladder Capital Corp and related transactions, to LCFH (“Predecessor”) and its consolidated subsidiaries and (2) after our IPO and related transactions, to Ladder Capital Corp and its consolidated subsidiaries.

4

Part I - Financial Information

Item 1. Financial Statements (Unaudited)

The consolidated financial statements of Ladder Capital Corp and the notes related to the foregoing consolidated financial statements are included in this Item.

Index to Consolidated Financial Statements (Unaudited)

Consolidated Balance Sheets		6
Consolidated Statements of Income		7
Consolidated Statements of Comprehensive Income		9
Consolidated Statements of Changes in Equity		10
Consolidated Statements of Cash Flows		14
Notes to Consolidated Financial Statements		17
	Note 1. Organization and Operations	17
	Note 2. Significant Accounting Policies	18
	Note 3. Mortgage Loan Receivables	21
	Note 4. Real Estate Securities	27
	Note 5. Real Estate and Related Lease Intangibles, Net	30
	Note 6. Investment in Unconsolidated Joint Ventures	35
	Note 7. Debt Obligations, Net	38
	Note 8. Derivative Instruments	44
	Note 9. Offsetting Assets and Liabilities	46
	Note 10. Consolidated Variable Interest Entities	48
	Note 11. Equity Structure and Accounts	49
	Note 12. Noncontrolling Interests	51
	Note 13. Earnings Per Share	52
	Note 14. Stock Based and Other Compensation Plans	54
	Note 15. Fair Value of Financial Instruments	57
	Note 16. Income Taxes	63
	Note 17. Related Party Transactions	64
	Note 18. Commitments and Contingencies	65
	Note 19. Segment Reporting	66
	Note 20. Subsequent Events	70

5

Ladder Capital Corp

Consolidated Balance Sheets

(Dollars in Thousands)

	June 30, 2020(1)		December 31, 2019(1)
	(Unaudited)
Assets
Cash and cash equivalents	$	826,059	$	58,171
Restricted cash	47,945		297,575
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	2,955,084		3,257,036
Allowance for loan losses	(49,102)		(20,500)
Mortgage loan receivables held for sale	85,977		122,325
Real estate securities	1,506,713		1,721,305
Real estate and related lease intangibles, net	1,042,210		1,048,081
Investments in and advances to unconsolidated joint ventures	48,919		48,433
FHLB stock	61,619		61,619
Derivative instruments	380		693
Accrued interest receivable	18,783		21,066
Other assets	64,963		53,348
Total assets	$	6,609,550	$	6,669,152
Liabilities and Equity
Liabilities
Debt obligations, net	$	4,953,514	$	4,859,873
Dividends payable	23,583		38,696
Accrued expenses	55,616		72,397
Other liabilities	68,457		59,209
Total liabilities	5,101,170		5,030,175
Commitments and contingencies (Note 18)	—		—
Equity
Class A common stock, par value $0.001 per share, 600,000,000 shares authorized; 117,473,057 and 110,693,832 shares issued and 115,015,738 and 107,509,563 shares outstanding	116		108
Class B common stock, par value $0.001 per share, 100,000,000 shares authorized; 5,379,708 and 12,158,933 shares issued and outstanding	5		12
Additional paid-in capital	1,649,170		1,532,384
Treasury stock, 2,457,319 and 3,184,269 shares, at cost	(53,619)		(42,699)
Retained earnings (dividends in excess of earnings)	(120,082)		(35,746)
Accumulated other comprehensive income (loss)	(45,080)		4,218
Total shareholders’ equity	1,430,510		1,458,277
Noncontrolling interest in operating partnership	70,968		172,054
Noncontrolling interest in consolidated joint ventures	6,902		8,646
Total equity	1,508,380		1,638,977
Total liabilities and equity	$	6,609,550	$	6,669,152

(1)Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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

6

Ladder Capital Corp

Consolidated Statements of Income

(Dollars in Thousands, Except Per Share and Dividend Data)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net interest income
Interest income	$	62,096	$	85,322	$	134,686	$	171,789
Interest expense	68,425		52,369		119,827		103,618
Net interest income	(6,329)		32,953		14,859		68,171
Provision for/(release of) loan loss reserves	(729)		300		25,852		600
Net interest income (expense) after provision for loan losses	(5,600)		32,653		(10,993)		67,571
Other income (loss)
Operating lease income	23,773		27,780		50,101		56,701
Sale of loans, net	(744)		20,264		261		27,342
Realized gain (loss) on securities	(14,798)		4,464		(11,787)		7,329
Unrealized gain (loss) on equity securities	401		(990)		(132)		1,088
Unrealized gain (loss) on Agency interest-only securities	98		11		174		22
Realized gain (loss) on sale of real estate, net	(1)		(1,124)		10,528		(1,119)
Impairment of real estate	—		—		—		(1,350)
Fee and other income	3,505		7,196		5,024		11,882
Net result from derivative transactions	(813)		(15,457)		(16,248)		(26,491)
Earnings (loss) from investment in unconsolidated joint ventures	471		1,564		912		2,522
Gain (loss) on extinguishment/defeasance of debt	19,017		—		21,077		(1,070)
Total other income (loss)	30,909		43,708		59,910		76,856
Costs and expenses
Salaries and employee benefits	7,001		14,907		24,023		38,481
Operating expenses	6,224		6,012		12,018		11,413
Real estate operating expenses	6,034		6,032		13,981		11,506
Fee expense	1,977		1,183		3,415		2,895
Depreciation and amortization	9,816		9,935		19,825		20,162
Total costs and expenses	31,052		38,069		73,262		84,457
Income (loss) before taxes	(5,743)		38,292		(24,345)		59,970
Income tax expense (benefit)	(550)		2,219		(5,091)		(634)
Net income (loss)	(5,193)		36,073		(19,254)		60,604
Net (income) loss attributable to noncontrolling interest in consolidated joint ventures	250		307		(1,269)		754
Net (income) loss attributable to noncontrolling interest in operating partnership	754		(4,136)		605		(6,939)
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
The accompanying notes are an integral part of these consolidated financial statements.

7

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Earnings per share:
Basic	$	(0.04)	$	0.31	$	(0.19)	$	0.52
Diluted	$	(0.04)	$	0.30	$	(0.19)	$	0.51
Weighted average shares outstanding:
Basic	106,809,987		105,511,385		106,569,892		104,888,925
Diluted	106,809,987		105,892,420		106,569,892		105,742,589
Dividends per share of Class A common stock	$	0.200	$	0.340	$	0.540	$	0.680

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

8

Ladder Capital Corp

Consolidated Statements of Comprehensive Income

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net income (loss)	$	(5,193)	$	36,073	$	(19,254)	$	60,604
Other comprehensive income (loss)
Unrealized gain (loss) on securities, net of tax:
Unrealized gain (loss) on real estate securities, available for sale	11,532		10,053		(64,721)		26,024
Reclassification adjustment for (gain) loss included in net income (loss)	14,591		(4,464)		12,837		(7,242)
Total other comprehensive income (loss)	26,123		5,589		(51,884)		18,782
Comprehensive income (loss)	20,930		41,662		(71,138)		79,386
Comprehensive (income) loss attributable to noncontrolling interest in consolidated joint ventures	250		307		(1,269)		754
Comprehensive income (loss) of combined Class A common shareholders and Operating Partnership unitholders	21,180		41,969		(72,407)		80,140
Comprehensive (income) loss attributable to noncontrolling interest in operating partnership	(1,757)		(4,718)		5,959		(8,983)
Comprehensive income (loss) attributable to Class A common shareholders	$	19,423	$	37,251	$	(66,448)	$	71,157

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

9

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Class B Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests				Total Equity
	Shares	Par		Shares	Par										Operating Partnership		Consolidated Joint Ventures
Balance, March 31, 2020	108,337	$	109	12,160	$	12	$	1,546,143	$	(52,983)	$	(94,171)	$	(65,920)	$	160,466	$	7,171	$	1,500,827
Contributions	—	—		—	—		—		—		—		—		—		349		349
Distributions	—	—		—	—		—		—		—		—		(2,198)		(368)		(2,566)
Amortization of equity based compensation	—	—		—	—		2,712		—		—		—		—		—		2,712
Issuance of purchase right	—	—		—	—		8,425		—		—		—		—		—		8,425
Purchase of treasury stock	(64)	—		—	—		—		(482)		—		—		—		—		(482)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(19)	—		—	—		—		(154)		—		—		—		—		(154)
Forfeitures	(18)	—		—	—		—		—		—		—		—		—		—
Dividends declared	—	—		—	—		—		—		(21,722)		—		—		—		(21,722)
Exchange of noncontrolling interest for common stock	6,779	7		(6,779)	(7)		92,540		—		—		(4,915)		(87,564)		—		61
Net income (loss)	—	—		—	—		—		—		(4,189)		—		(754)		(250)		(5,193)
Other comprehensive income (loss)	—	—		—	—		—		—		—		23,612		2,511		—		26,123
Rebalancing of ownership percentage between Company and Operating Partnership	—	—		—	—		(650)		—		—		2,143		(1,493)		—		—
Balance, June 30, 2020	115,015	$	116	5,381	$	5	$	1,649,170	$	(53,619)	$	(120,082)	$	(45,080)	$	70,968	$	6,902	$	1,508,380

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

10

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Class B Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests				Total Equity
	Shares	Par		Shares	Par										Operating Partnership		Consolidated Joint Ventures
Balance, March 31, 2019	106,562	$	107	13,198	$	13	$	1,508,452	$	(40,799)	$	(26,549)	$	7,080	$	186,310	$	9,629	$	1,644,243
Contributions	—	—		—	—		—		—		—		—		—		114		114
Distributions	—	—		—	—		—		—		—		—		(4,284)		(206)		(4,490)
Amortization of equity based compensation	—	—		—	—		3,469		—		—		—		—		—		3,469
Purchase of treasury stock	(40)	—		—	—		—		(637)		—		—		—		—		(637)
Re-issuance of treasury stock	5	—		—	—		—		—		—		—		—		—		—
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(6)	—		—	—		—		(99)		—		—		—		—		(99)
Forfeitures	(9)	—		—	—		—		—		—		—		—		—		—
Dividends declared	—	—		—	—		—		—		(36,542)		—		—		—		(36,542)
Exchange of noncontrolling interest for common stock	1,039	1		(1,039)	(1)		14,956		—		—		70		(14,672)		—		354
Net income (loss)	—	—		—	—		—		—		32,244		—		4,136		(307)		36,073
Other comprehensive income (loss)	—	—		—	—		—		—		—		5,007		582		—		5,589
Rebalancing of ownership percentage between Company and Operating Partnership	—	—		—	—		(408)		—		—		14		394		—		—
Balance, June 30, 2019	107,551	$	108	12,159	$	12	$	1,526,469	$	(41,535)	$	(30,847)	$	12,171	$	172,466	$	9,230	$	1,648,074

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

11

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Class B Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests				Total Equity
	Shares	Par		Shares	Par										Operating Partnership		Consolidated Joint Ventures
Balance, December 31, 2019	107,509	$	108	12,160	$	12	$	1,532,384	$	(42,699)	$	(35,746)	$	4,218	$	172,054	$	8,646	$	1,638,977
Contributions	—	—		—	—		—		—		—		—		—		651		651
Distributions	—	—		—	—		—		—		—		—		(6,332)		(3,664)		(9,996)
Amortization of equity based compensation	—	—		—	—		16,738		—		—		—		—		—		16,738
Issuance of purchase right	—	—		—	—		8,425		—		—		—		—		—		8,425
Purchase of treasury stock	(210)	—		—	—		—		(1,688)		—		—		—		—		(1,688)
Re-issuance of treasury stock	1,466	1		—	—		(1)		—		—		—		—		—		—
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(505)	—		—	—		—		(9,232)		—		—		—		—		(9,232)
Forfeitures	(24)	—		—	—		—		—		—		—		—		—		—
Dividends declared	—	—		—	—		—		—		(58,621)		—		—		—		(58,621)
Exchange of noncontrolling interest for common stock	6,779	7		(6,779)	(7)		92,540		—		—		(4,915)		(87,564)		—		61
CECL Adoption	—	—		—	—		—		—		(5,797)		—		—		—		(5,797)
Net income (loss)	—	—		—	—		—		—		(19,918)		—		(605)		1,269		(19,254)
Other comprehensive income (loss)	—	—		—	—		—		—		—		(46,530)		(5,354)		—		(51,884)
Rebalancing of ownership percentage between Company and Operating Partnership	—	—		—	—		(916)		—		—		2,147		(1,231)		—		—
Balance, June 30, 2020	115,015	$	116	5,381	$	5	$	1,649,170	$	(53,619)	$	(120,082)	$	(45,080)	$	70,968	$	6,902	$	1,508,380

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

12

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Class B Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests				Total Equity
	Shares	Par		Shares	Par										Operating Partnership		Consolidated Joint Ventures
Balance, December 31, 2018	103,941	$	105	13,118	$	13	$	1,471,157	$	(32,815)	$	11,342	$	(4,649)	$	188,427	$	10,055	$	1,643,635
Contributions	—	—		—	—		—		—		—		—		—		191		191
Distributions	—	—		—	—		—		—		—		—		(8,537)		(262)		(8,799)
Amortization of equity based compensation	—	—		—	—		14,761		—		—		—		—		—		14,761
Grants of restricted stock	1,478	1		—	—		(1)		—		—		—		—		—		—
Purchase of treasury stock	(40)	—		—	—		—		(637)		—		—		—		—		(637)
Re-issuance of treasury stock	68	—		—	—		—		—		—		—		—		—		—
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(461)	—		—	—		—		(8,083)		—		—		—		—		(8,083)
Forfeitures	(9)	—		—	—		—		—		—		—		—		—		—
Dividends declared	—	—		—	—		—		—		(72,785)		—		—		—		(72,785)
Stock dividends	1,435	1		180	—		23,822		—		(23,823)		—		—		—		—
Exchange of noncontrolling interest for common stock	1,139	1		(1,139)	(1)		16,449		—		—		65		(16,109)		—		405
Net income (loss)	—	—		—	—		—		—		54,419		—		6,939		(754)		60,604
Other comprehensive income (loss)	—	—		—	—		—		—		—		16,738		2,044		—		18,782
Rebalancing of ownership percentage between Company and Operating Partnership	—	—		—	—		281		—		—		17		(298)		—		—
Balance, June 30, 2019	107,551	$	108	12,159	$	12	$	1,526,469	$	(41,535)	$	(30,847)	$	12,171	$	172,466	$	9,230	$	1,648,074

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

13

Ladder Capital Corp

Consolidated Statements of Cash Flows

(Dollars in Thousands)

 (Unaudited)

	Six Months Ended June 30,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	(19,254)	$	60,604
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
(Gain) loss on extinguishment/defeasance of debt	(21,077)		1,070
Depreciation and amortization	19,825		20,162
Unrealized (gain) loss on derivative instruments	187		(1,511)
Unrealized (gain) loss on equity securities	132		(1,088)
Unrealized (gain) loss on Agency interest-only securities	(174)		(22)
Unrealized (gain) loss on investment in mutual fund	(95)		(254)
Provision for loan losses	25,852		600
Impairment of real estate	—		1,350
Amortization of equity based compensation	16,738		14,761
Amortization of deferred financing costs included in interest expense	7,705		5,721
Amortization of premium on mortgage loan financing	(587)		(774)
Amortization of above- and below-market lease intangibles	(1,187)		(397)
Amortization of premium/(accretion) of discount and other fees on loans	(8,917)		(10,294)
Amortization of premium/(accretion) of discount and other fees on securities	443		(87)
Realized (gain) loss on sale of mortgage loan receivables held for sale	(6,926)		(27,342)
Realized (gain) loss on sale of mortgage loan receivables held for investment	6,665		—
Realized (gain) loss on disposition of loan	51		—
Realized (gain) loss on securities	12,512		(7,329)
Realized (gain) loss on sale of real estate, net	(10,528)		1,119
Realized gain on sale of derivative instruments	(211)		108
Origination of mortgage loan receivables held for sale	(212,845)		(333,342)
Repayment of mortgage loan receivables held for sale	292		370
Proceeds from sales of mortgage loan receivables held for sale	255,827		430,649
(Income) loss from investments in unconsolidated joint ventures in excess of distributions received	(912)		(2,522)
Distributions from operations of investment in unconsolidated joint ventures	—		3,067
Deferred tax asset (liability)	9,914		6,336
Changes in operating assets and liabilities:
Accrued interest receivable	2,284		2,705
Other assets	(15,361)		(6,310)
Accrued expenses and other liabilities	(16,900)		(24,805)
Net cash provided by (used in) operating activities	43,453		132,545

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	Six Months Ended June 30,
	2020		2019
Cash flows from investing activities:
Origination of mortgage loan receivables held for investment	(334,347)		(484,496)
Repayment of mortgage loan receivables held for investment	437,525		781,916
Proceeds from sale of mortgage loan receivables held for investment, at amortized cost	165,364		—
Purchases of real estate securities	(438,546)		(827,999)
Repayment of real estate securities	63,032		110,443
Basis recovery of Agency interest-only securities	3,853		6,413
Proceeds from sales of real estate securities	532,460		384,356
Purchases of real estate	(6,239)		(5,071)
Capital improvements of real estate	(1,980)		(1,707)
Proceeds from sale of real estate	11,426		8,521
Capital contributions and advances to investment in unconsolidated joint ventures	—		(56,424)
Capital distribution from investment in unconsolidated joint ventures	426		38,625
Capitalization of interest on investment in unconsolidated joint ventures	—		(142)
Purchase of FHLB stock	—		(3,704)
Purchase of derivative instruments	(111)		(159)
Sale of derivative instruments	446		50
Net cash provided by (used in) investing activities	433,309		(49,378)
Cash flows from financing activities:
Deferred financing costs paid	(17,370)		(4,453)
Proceeds from borrowings under debt obligations	8,046,797		6,377,515
Repayment of borrowings under debt obligations	(7,902,356)		(6,213,678)
Cash dividends paid to Class A common shareholders	(73,735)		(108,240)
Capital distributed to noncontrolling interests in operating partnership	(6,332)		(8,537)
Capital contributed by noncontrolling interests in consolidated joint ventures	651		191
Capital distributed to noncontrolling interests in consolidated joint ventures	(3,664)		(262)
Payment of liability assumed in exchange for shares for the minimum withholding taxes on vesting restricted stock	(9,232)		(8,083)
Purchase of treasury stock	(1,688)		(637)
Issuance of purchase right	8,425		—
Net cash provided by (used in) financing activities	41,496		33,816
Net increase (decrease) in cash, cash equivalents and restricted cash	518,258		116,983
Cash, cash equivalents and restricted cash at beginning of period	355,746		98,450
Cash, cash equivalents and restricted cash at end of period	$	874,004	$	215,433

15

	Six Months Ended June 30,
	2020		2019
Supplemental information:
Cash paid for interest, net of amounts capitalized	$	98,220	$	98,832
Cash paid (received) for income taxes	(38)		3,591
Non-cash investing and financing activities:
Repayment in transit of mortgage loans receivable held for investment (other assets)	9,078		—
Repayment of mortgage loans receivable held for sale	—		127
Settlement of mortgage loan receivable held for investment by real estate, net	(25,177)		(17,851)
Transfer from mortgage loans receivable held for sale to mortgage loans receivable held for investment, net, at amortized cost	—		15,504
Real estate acquired in settlement of mortgage loan receivable held for investment, net	25,435		17,851
Net settlement of sale of real estate, subject to debt - real estate	(19,098)		(7,144)
Net settlement of sale of real estate, subject to debt - debt obligations	19,098		7,144
Exchange of noncontrolling interest for common stock	87,571		16,109
Change in deferred tax asset related to exchanges of noncontrolling interest for common stock	61		—
Increase in amount payable pursuant to tax receivable agreement	—		(11)
Rebalancing of ownership percentage between Company and Operating Partnership	(1,231)		(298)
Dividends declared, not paid	23,583		1,860
Stock dividends	—		23,823

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows ($ in thousands):

	June 30, 2020		June 30, 2019		December 31, 2019
Cash and cash equivalents	$	826,059	$	126,529	$	58,171
Restricted cash	47,945		88,904		297,575
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	874,004	$	215,433	$	355,746

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

16

Ladder Capital Corp

Notes to Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION AND OPERATIONS

Ladder Capital Corp is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. Ladder originates and invests in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. Ladder’s investment activities include: (i) direct origination of commercial real estate first mortgage loans; (ii) investments in investment grade securities secured by first mortgage loans on commercial real estate; and (iii) investments in net leased and other commercial real estate equity. Ladder Capital Corp, as the general partner of Ladder Capital Finance Holdings LLLP (“LCFH,” “Predecessor” or the “Operating Partnership”), operates the Ladder Capital business through LCFH and its subsidiaries. As of June 30, 2020, Ladder Capital Corp has a 95.5% economic interest in LCFH and controls the management of LCFH as a result of its ability to appoint its board members. Accordingly, Ladder Capital Corp consolidates the financial results of LCFH and its subsidiaries and records a noncontrolling interest for the economic interest in LCFH held by certain existing owners of LCFH, who were limited partners of LCFH prior to Ladder Capital Corp’s initial public offering (“IPO”) and continue to hold an economic interest in LCFH and voting shares of Ladder Capital Corp Class B common stock (the “Continuing LCFH Limited Partners”). LCFH is a Variable Interest Entity (“VIE”) and, as such, substantially all of the consolidated balance sheet is a consolidated VIE. In addition, Ladder Capital Corp, through certain subsidiaries which are treated as taxable REIT subsidiaries (each a “TRS”), is indirectly subject to U.S. federal, state and local income taxes. Other than the noncontrolling interest in the Operating Partnership and such indirect U.S. federal, state and local income taxes, there are no material differences between Ladder Capital Corp’s consolidated financial statements and LCFH’s consolidated financial statements.

Ladder Capital Corp was formed as a Delaware corporation on May 21, 2013. The Company conducted its IPO which closed on February 11, 2014. The Company used the net proceeds from the IPO to purchase newly issued limited partnership units (“LP Units”) from LCFH. In connection with the IPO, Ladder Capital Corp also became a holding corporation and the general partner of, and obtained a controlling interest in, LCFH. Ladder Capital Corp’s only business is to act as the general partner of LCFH, and, as such, Ladder Capital Corp indirectly operates and controls all of the business and affairs of LCFH and its subsidiaries. The IPO transactions described herein are referred to as the “IPO Transactions.”

Pursuant to LCFH’s Third Amended and Restated LLLP Agreement, dated as of December 31, 2014 and as amended, and subject to the applicable minimum retained ownership requirements and certain other restrictions, including notice requirements, Continuing LCFH Limited Partners (or certain transferees thereof) may, subject to certain conditions, receive one share of the Company’s Class A common stock in exchange for (i) one share of the Company’s Class B common stock, (ii) one Series REIT LP Unit and (iii) either one Series TRS LP Unit or one TRS Share, subject to equitable adjustments for stock splits, stock dividends and reclassifications. However, such exchange for shares of Ladder Capital Corp Class A common stock will not affect the exchanging owners’ voting power since the votes represented by the canceled shares of Ladder Capital Corp Class B common stock will be replaced with the votes represented by the shares of Class A common stock for which such Series Units, including TRS Shares as applicable, will be exchanged.

As a result of the Company’s ownership interest in LCFH and LCFH’s election under Section 754 of the Code, the Company expects to benefit from depreciation and other tax deductions reflecting LCFH’s tax basis for its assets. Those deductions will be allocated to the Company and will be taken into account in reporting the Company’s taxable income.

COVID-19 Impact on the Organization

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. As of the date of this filing, the majority of our employees continue to work remotely. We continue to actively manage the liquidity and operations of the Company in light of the market disruption caused by, and the overall financial impact of, the COVID-19 pandemic across most industries in the United States. Due to the uncertainty related to the severity and duration of the pandemic, its ultimate impact on our revenues, profitability and financial position is difficult to assess at this time. Refer to the Notes to the Consolidated Financial Statements for further disclosure on the current and potential impact of the COVID-19 global pandemic on our business.

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2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company conducted a more extensive going concern analysis as a result of market conditions at June 30, 2020.

As the COVID-19 crisis evolved, management implemented a plan to increase liquidity resources and pay down debt. The Company maintained an unrestricted cash position of $826.1 million as of June 30, 2020 to mitigate uncertainty in liquidity needs in light of market conditions and, during the three months ended June 30, 2020, the Company paid down over $1.0 billion of mark-to-market debt. As of March 31, 2020, partly as a result of maintaining higher levels of cash, the Company was not in compliance with its 3.5x covenant ratio with certain of its lenders; however, the Company cured such non-compliance through pay downs of debt with various counterparties during the cure period. The Company was in compliance with all financial covenants as of June 30, 2020 (refer to Note 7, Debt Obligations, Net). Management has evaluated current market conditions and expects that the Company’s current cash resources, operating cash flows and ability to obtain financing will be sufficient to sustain operations for a period greater than one year from the issuance date of this Quarterly Report. The Company incurred $2.1 million of professional fees, included in operating expenses, and $0.2 million of severance costs, included in salaries and employee benefits, due to measures implemented to date in direct response to the COVID-19 pandemic.

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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 the audited consolidated financial statements for the year ended December 31, 2019, which are included in the 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 consolidated financial statements include the Company’s accounts and those of its subsidiaries which are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

Provision for Loan Losses

The provision for loan losses reflects the Company’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The provision for loan losses includes a portfolio-based, current expected credit loss (“CECL”) component and an asset-specific component. In compliance with the new CECL reporting requirements, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. As part of that effort, the Company has engaged a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with user’s loan-level data, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level.

18

The asset-specific reserve component relates to reserves for losses on individually impaired loans. The Company evaluates each loan 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 loan’s effective rate or the fair value of the collateral, less the estimated costs to sell, if recovery of the Company’s investment is expected solely from the collateral. The Company generally will use the direct capitalization rate valuation methodology or the sales comparison approach to estimate the fair value of the collateral for such loans and in certain cases will obtain external appraisals. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. 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/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash 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 submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data and ultimately presented to management for approval.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans. Generally, when granting concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset concessions granted should conditions impacting the loan improve. The Company’s determination of credit losses is impacted by TDRs whereby loans that have gone through TDRs are considered impaired, assessed for specific reserves, and are not included in the Company’s assessment of the CECL reserve. Loans previously restructured under TDRs that subsequently default are reassessed to incorporate the Company’s current assumptions on expected cash flows and additional provision expense is recorded to the extent necessary.

The Company designates non-accrual loans at such time as (i) loan payments become 90-days past due or (ii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-accrual and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. Any interest received for loans on non-accrual status will be applied as a reduction to the unpaid principal balance. A loan will be written off when it is no longer realizable and legally discharged.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”) and in April 2019, the FASB issued ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), collectively, the “CECL Standard.” These updates change how entities measure potential credit losses for most financial assets and certain other instruments that are not measured at fair value. The CECL Standard replaced the “incurred loss” approach under previous guidance with an “expected loss” model for instruments measured at amortized cost. The net carrying value of an asset under the CECL Standard is intended to represent the amount expected to be collected on such asset and requires entities to deduct allowances for potential losses on held-to-maturity debt securities. The Company will continue to record asset-specific reserves consistent with our existing accounting policy. In addition, the Company will now record a general reserve in accordance with the CECL Standard on the remainder of the loan portfolio (“CECL Reserve”). At adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock).

19

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of ASU 2018-13 had no material impact on the Company’s consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, (“ASU 2018-17”). ASU 2018-17 requires reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety for determining whether a decision-making fee is a variable interest. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. Entities are required to apply the amendments in ASU 2018-17 retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The adoption of ASU 2018-17 had no material impact on the Company’s consolidated financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company’s next annual reporting period; early adoption is permitted. The Company previously adopted ASU 2016-01. The adoption of ASU 2019-04 had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The adoption of ASU 2020-03 had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective upon issuance of ASU 2020-04 for contract modifications and hedging relationships on a prospective basis. While the Company is currently assessing the impact of ASU 2020-04, the Company does not expect the adoption to have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 815), (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves the consistent application of, and simplifies, GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its consolidated financial statements.

Any new accounting standards not disclosed above that have been issued or proposed by FASB and that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

20

3. MORTGAGE LOAN RECEIVABLES

June 30, 2020 ($ in thousands)

	Outstanding Face Amount		Carrying Value		Weighted Average Yield (1)		Remaining Maturity (years)
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries:
First mortgage loans	$	2,848,829	$	2,832,610	6.65	%	1.15
Mezzanine loans	122,793		122,474		10.84	%	2.91
Total mortgage loans held by consolidated subsidiaries	2,971,622		2,955,084		6.82	%	1.22
Allowance for loan losses	N/A		(49,102)
Total mortgage loan receivables held for investment, net, at amortized cost	2,971,622		2,905,982
Mortgage loan receivables held for sale:
First mortgage loans	86,456		85,977		3.94	%	9.70
Total	$	3,058,078	$	2,991,959	6.85	%	1.48

(1)June 30, 2020 LIBOR rates are used to calculate weighted average yield for floating rate loans.

As of June 30, 2020, $2.4 billion, or 80.8%, of the outstanding face amount of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates, linked to LIBOR. Of this $2.4 billion, 100% of these variable interest rate mortgage loan receivables were subject to interest rate floors. As of June 30, 2020, $86.5 million, or 100%, of the outstanding face amount of our mortgage loan receivables held for sale were at fixed interest rates.

December 31, 2019 ($ in thousands)

	Outstanding Face Amount		Carrying Value		Weighted Average Yield (1)		Remaining Maturity (years)
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries:
First mortgage loans	$	3,147,275	$	3,127,173	6.77	%	1.35
Mezzanine loans	130,322		129,863		10.97	%	3.26
Total mortgage loans held by consolidated subsidiaries	3,277,597		3,257,036		6.94	%	1.43
Allowance for loan losses	N/A		(20,500)
Total mortgage loan receivables held for investment, net, at amortized cost	3,277,597		3,236,536
Mortgage loan receivables held for sale:
First mortgage loans	122,748		122,325		4.20	%	9.99
Total	$	3,400,345	$	3,358,861	6.88	%	1.75

(1)December 31, 2019 LIBOR rates are used to calculate weighted average yield for floating rate loans.

21

As of December 31, 2019, $2.5 billion, or 77.2%, of the outstanding principal of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates, linked to LIBOR or a replacement index generally determined in our discretion. Of this $2.5 billion, 100% of these variable rate mortgage loan receivables were subject to interest rate floors. As of December 31, 2019, $122.7 million, or 100%, of the carrying value of our mortgage loan receivables held for sale were at fixed interest rates.

For the six months ended June 30, 2020 and 2019, the activity in our loan portfolio was as follows ($ in thousands):

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries		Provision expense for current expected credit loss		Mortgage loan  receivables held for sale
Balance, December 31, 2019	$	3,257,036	$	(20,500)	$	122,325
Origination of mortgage loan receivables	334,347		—		212,845
Repayment of mortgage loan receivables	(446,080)		—		(292)
Proceeds (losses) from sales of mortgage loan receivables	(165,364)		—		(255,827)
Non-cash disposition of loans via foreclosure(1)	(27,107)		—		—
Sale of loans, net	(6,665)		—		6,926
Accretion/amortization of discount, premium and other fees	8,917		—		—
Release of asset-specific loan loss provision via foreclosure(1)	—		2,000
Provision expense for current expected credit loss (implementation impact)(2)	—		(4,964)
Provision expense for current expected credit loss, net (impact to earnings)(2)	—		(17,638)
Additional asset-specific reserve	—		(8,000)		—
Balance, June 30, 2020	$	2,955,084	$	(49,102)	$	85,977

(1)Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

(2)During the six months ended June 30, 2020, the initial impact of the implementation of the CECL accounting standard as of January 1, 2020 is recorded against retained earnings. Subsequent remeasurement thereafter, including the period to date change for the six months ended June 30, 2020, is accounted for as provision expense for current expected credit loss in the consolidated statements of income.

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries		Mortgage loans transferred but not considered sold		Provision for loan losses		Mortgage loan receivables held for sale
Balance, December 31, 2018	$	3,318,390	$	—	$	(17,900)	$	182,439
Origination of mortgage loan receivables	484,496		—		—		333,342
Repayment of mortgage loan receivables	(693,323)		—		—		(497)
Proceeds from sales of mortgage loan receivables	—		(15,504)		—		(415,145)
Sale of loans, net	—		—		—		27,342
Transfer between held for investment and held for sale(1)	—		15,504		—		(15,504)
Accretion/amortization of discount, premium and other fees	10,294		—		—		—
Provision for/(release of) loan loss reserves	—		—		(600)		—
Balance, June 30, 2019	$	3,119,857	$	—	$	(18,500)	$	111,977

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(1)We sell certain loans into securitizations; however, for a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860 under which the Company must surrender control over the transferred assets which must qualify as recognized financial assets at the time of transfer. The assets must be isolated from the Company, even in bankruptcy or other receivership, the purchaser must have the right to pledge or sell the assets transferred and the Company may not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability. During the three months ended March 31, 2019, the Company reclassified from mortgage loan receivables held for sale to mortgage loans transferred but not considered sold, at amortized cost, one loan with an outstanding face amount of $15.4 million, a book value of $15.5 million (fair value at the date of reclassification) and a remaining maturity of 9.8 years, which was sold to the WFCM 2019-C49 securitization trust. Subsequent to March 31, 2019, the controlling loan interest was sold to the UBS 2019-C16 securitization trust, and as a result, the loan previously sold during the three months ended March 31, 2019 was accounted for as a sale during the six months ended June 30, 2019.

During the three and six months ended June 30, 2020, the transfers of financial assets via sales of loans were treated as sales under ASC Topic 860 — Transfers and Servicing. During the three and six months ended June 30, 2019, the transfers of financial assets via sales of loans were treated as sales under ASC Topic 860 — Transfers and Servicing, except for the one loan discussed above.

As of June 30, 2020 and December 31, 2019, there was $0.4 million of unamortized discounts included in our mortgage loan receivables held for investment, net, at amortized cost, on our consolidated balance sheets. 

Allowance for Loan Losses and Non-Accrual Status ($ in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020		2019
Allowance for loan losses at beginning of period	$	49,457		$	18,200		$	20,500	$	17,900
Provision expense for current expected credit loss (implementation impact)	—			—			4,964		—
Provision expense for current expected credit loss, net (impact to earnings)	(355)			300			17,638		600
Additional asset-specific reserve	—			—			8,000		—
Foreclosure of loans subject to asset-specific reserve	—			—			(2,000)		—
Allowance for loan losses at end of period	$	49,102		$	18,500		$	49,102	$	18,500
	June 30, 2020			December 31, 2019
Principal balance of loans on non-accrual status	$	185,896	(1)	$	98,725	(2)

(1)Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a combined carrying value of $26.9 million, two loans with a combined carrying value of $45.9 million, one loan with a carrying value of $61.5 million, one loan with a carrying value of $4.1 million, one loan with a carrying value of $8.0 million and one loan with a carrying value of $39.5 million, as further discussed below.

(2)Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a combined carrying value of $26.9 million, one loan with a carrying value of $10.4 million and one loan with a carrying value of $61.5 million, as further discussed below.

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Current Expected Credit Loss (“CECL”)

In compliance with the new CECL reporting requirements, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. Based on the Company’s process, at adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock). As of June 30, 2020, the Company released CECL reserves of $(0.7) million for a total CECL reserve of $29.4 million. This excludes five loans that previously had an aggregate of $20.7 million of asset-specific reserves and a carrying value of $76.9 million as of June 30, 2020. The change of $(0.7) million in the current quarter is reflected as a decrease on reserve provision expense of $(0.3) million, and a decrease in reserve on unfunded commitments of $(0.4) million. These decreases are primarily due to the decrease in the size of our loan portfolio, partially offset by an update of the macro economic assumptions used in the Company’s CECL evaluation in the current quarter.

The Company has concluded that none of its loans, other than the four loans discussed below, are individually impaired as of June 30, 2020.

Loan Portfolio by Geographic Region, Property Type and Vintage ($ in thousands)

	Amortized Cost
Geographic Region
Northeast	$	785,000
Southwest	588,046
Midwest	585,505
South	512,314
West	407,286
Subtotal loans	2,878,151
Individually impaired loans(1)	76,933
Total loans	$	2,955,084

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Management’s method for monitoring credit is the performance of a loan. A loan is impaired or not impaired based on the expectation that all amounts contractually due under a loan will be collected when due. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing Ladder’s loan portfolio by collateral type. The following table summarizes the assessed amortized cost of the loan portfolio by property type ($ in thousands).

	Vintage
Property Type	2020		2019		2018		2017		2016 and Earlier		Total
Multifamily	$	65,228	$	323,178	$	147,460	$	31,872	$	11,772	$	579,510
Office	51,658		216,946		388,721		160,288		52,086		869,699
Hospitality	—		83,018		143,681		67,446		123,630		417,775
Mixed Use	52,515		101,436		5,092		47,849		—		206,892
Retail	—		141,842		25,029		—		65,823		232,694
Other	57,528		130,025		82,353		—		—		269,906
Industrial	51,964		114,987		—		—		6,476		173,427
Manufactured Housing	4,545		56,918		11,702		—		3,970		77,135
Self-Storage	—		35,936		15,177		—		—		51,113
Subtotal loans	283,438		1,204,286		819,215		307,455		263,757		2,878,151
Individually Impaired loans (1)	—		—		4,143				72,790		76,933
Total loans	$	283,438	$	1,204,286	$	823,358	$	307,455	$	336,547	$	2,955,084

(1)Included in individually impaired loans are two loans, which were originated in 2016 simultaneously as part of a single transaction with a combined amortized cost of $26.9 million, collateralized by a mixed use property located in the Northeast region, one loan, which was originated in 2016 and subsequently restructured into two loans in 2018, with a combined amortized cost of $45.9 million, collateralized by a mixed use property located in the Northeast region, and one loan, originated in 2018, with a amortized cost of $4.1 million, collateralized by a hotel located in the Midwest region. The above individually impaired loans’ amortized cost basis excludes asset-specific provisions totaling $20.7 million.

Individually Impaired Loans

As of June 30, 2020, two of the Company’s loans, collateralized by a mixed use property, which were originated simultaneously as part of a single transaction and had a carrying value of $26.9 million, were in default. These loans are directly and indirectly secured by the same property. The Company placed these loans on non-accrual status in July 2017. In assessing these collateral-dependent loans for impairment, the most significant consideration is the fair value of the underlying real estate collateral, which includes an in-place long-dated retail lease. The value of such property is most significantly affected by the contractual lease terms and the appropriate market capitalization rates, which are driven by the property’s market strength, the general interest rate environment and the retail tenant’s creditworthiness. In view of these considerations, the Company uses a direct capitalization rate valuation methodology to calculate the fair value of the underlying real estate collateral. During the three months ended March 31, 2018, management believed these loans to be impaired, reflecting a decline in collateral value attributable to: (i) on-going bankruptcy proceedings; (ii) rising interest rates; and (iii) the retail tenant’s creditworthiness. As a result, on March 31, 2018, the Company recorded an asset-specific provision for loss on one of these loans, with a carrying value of $5.9 million, of $2.7 million to reduce the carrying value of these loans to the fair value of the property less the cost to foreclose and sell the property utilizing direct capitalization rates of 4.70% to 5.00%. As of June 30, 2020, the Company believed no additional loss provision was necessary based on the application of direct capitalization rates of 4.60% to 4.90%.

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During the year ended December 31, 2018, management identified a loan, secured by a mixed-use office and hospitality property, with a carrying value of $45.0 million as impaired, reflecting a decline in collateral value attributable to: (i) recent and near term tenant vacancies at the property; (ii) new information available during the three months ended September 30, 2018 regarding the addition of supply that will increase the local submarket vacancy rate; and (iii) declining market conditions. A reserve of $10.0 million was recorded for this impaired loan in the three months ended September 30, 2018 to reduce the carrying value of the loan to the estimated fair value of the collateral, less the estimated costs to sell. The Company has placed this loan on non-accrual status as of September 30, 2018. During the quarter ended December 31, 2018, this loan experienced a maturity default and its terms were modified in a Troubled Debt Restructuring (“TDR”) on October 17, 2018. The terms of the TDR provided for, among other things, the restructuring of the Company’s existing $45.0 million first mortgage loan into a $35.0 million A-Note and a $10.0 million B-Note and a 19.0% equity interest which is not subject to dilution and that can be increased to 25% under certain conditions. Under certain conditions, the B-Note may be forgiven or reduced. The reserve of $10.0 million was applied to the B-Note and the B-Note was placed on non-accrual status on October 17, 2018. During the quarter ended March 31, 2020, management identified that the A-Note was impaired, reflecting a decline in collateral value due to: (i) new information available during the three months ended March 31, 2020 regarding two recent non-distressed sales of office buildings in the Wilmington, DE central business district; (ii) a change in market conditions driven by COVID-19 as capital flow to the tertiary markets shifted given increased opportunities in primary markets; and (iii) the closure of the corporate housing component of the property. As a result, on March 31, 2020, the Company recorded an asset-specific provision for loss on the A-Note of $7.5 million to reduce the carrying value of this loan to the fair value of the property less the cost to foreclose and sell the property utilizing direct capitalization rates of 7.50% to 8.75%. The Company placed the A-Note on non-accrual status as of March 31, 2020. As of June 30, 2020, the combined carrying value of the A-Note and the B-Note was $45.9 million.

As of June 30, 2020, one of the Company’s loans, collateralized by a hotel property, with a carrying value of $4.1 million, was in default. The Company placed this loan on non-accrual status in March 2020. The Company filed for foreclosure in December 2019 and did not believe there was an impairment at that time. In assessing this collateral-dependent loan for impairment, the most significant consideration is the fair value of the underlying real estate collateral. During the quarter ended March 31, 2020, management identified that the loan was impaired, reflecting a decline in collateral value due to indications of value from market participants with knowledge of the asset and the temporary closure of the nearby university and local businesses due to COVID-19. As a result, on March 31, 2020, the Company recorded an asset-specific provision for loss of $0.5 million to reduce the carrying value of this loan to the fair value of the property less the cost to foreclose and sell the property. As of June 30, 2020, the Company believed no additional loss provision was necessary based on the current value of the underlying collateral.

As of June 30, 2020, there were no unfunded commitments associated with modified loans considered TDRs.

These non-recurring fair values are considered Level 3 measurements in the fair value hierarchy.

Loans on Non-Accrual Status

During the three months ended December 31, 2019, one of the Company’s loans, which had a carrying value of $61.5 million, was placed on non-accrual status. The Company performed a review of the loan collateral. The review consisted of conversations with market participants familiar with the property location as well as reviewing market data and comparables. Based on this review, the Company determined that no asset-specific impairment was required for this loan. The Company will continue to monitor for impairment.

During the three months ended June 30, 2020, one of the Company’s loans, which had a carrying value of $8.0 million, was placed on non-accrual status. The Company performed a review of the loan collateral. The review consisted of conversations with market participants familiar with the property location as well as reviewing market data and comparables. Based on this review, the Company determined that no asset-specific impairment was required for this loan. The Company will continue to monitor for impairment.

During the three months ended June 30, 2020, one of the Company’s loans, which had a carrying value of $39.5 million, was placed on non-accrual status. The Company performed a review of the loan collateral. The review consisted of conversations with market participants familiar with the property location as well as reviewing market data and comparables. Based on this review, the Company determined that no asset-specific impairment was required for this loan. The Company will continue to monitor for impairment.

There are no other loans on non-accrual status other than those discussed in Individually Impaired Loans above as of June 30, 2020.

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4. REAL ESTATE SECURITIES

Since the onset of the COVID-19 pandemic, there has been a decrease in liquidity and trading activity for the real estate securities we own. The Company invests in primarily AAA-rated real estate securities, typically front pay securities, with

relatively short duration and significant subordination. The hyperamortization features included in many of the securities positions we own help mitigate potential credit losses even in the current market conditions. During the three months ended June 30, 2020, liquidity and trading activity began to return to the market and the value of our securities portfolio as of June 30, 2020 had an unrealized mark-to-market gain of $11.8 million. During the six months ended June 30, 2020, the market and the value of our securities portfolio were down. As of June 30, 2020 there was an unrealized mark-to-market loss of $63.6 million related to the six months ended June 30, 2020.

CMBS, CMBS interest-only securities, Agency securities, Government National Mortgage Association (“GNMA”) construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income. GNMA and Federal Home Loan Mortgage Corp (“FHLMC”) securities (collectively, “Agency interest-only securities”) are recorded at fair value with changes in fair value recorded in current period earnings. Equity securities are reported at fair value with changes in fair value recorded in current period earnings. The following is a summary of the Company’s securities at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

					Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis/Purchase Price		Gains		Losses		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS(2)	$	1,496,090	$	1,495,892	$	212	$	(48,766)	$	1,447,338	(3)	49	AAA	1.51	%	1.57	%	2.27
CMBS interest-only(2)(4)	1,535,739		25,026		488		(4)		25,510		(5)	15	AAA	0.45	%	2.83	%	2.34
GNMA interest-only(4)(6)	93,464		1,335		204		(161)		1,378			14	AA+	0.45	%	4.21	%	3.18
Agency securities(2)	610		619		17		—		636			2	AA+	2.61	%	1.68	%	1.56
GNMA permanent securities(2)	30,853		31,006		864		—		31,870			6	AA+	3.89	%	3.50	%	2.41
Total debt securities	$	3,156,756	$	1,553,878	$	1,785	$	(48,931)	$	1,506,732		86		0.98	%	1.63	%	2.27
Provision for current expected credit losses	N/A		—		—		(19)		(19)
Total real estate securities	$	3,156,756	$	1,553,878	$	1,785	$	(48,950)	$	1,506,713		86

(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 rating agencies, the highest 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.

(2)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(3)Includes $11.1 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (the “Dodd-Frank Act”) and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(4)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(5)Includes $0.7 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(6)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s Agency interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company has elected to account for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on Agency interest-only securities in the consolidated statements of income in accordance with ASC 815.

(7)The Company has elected to account for equity securities at fair value with changes in fair value recorded in current period earnings.

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December 31, 2019

					Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS(2)	$	1,640,597	$	1,640,905	$	4,337	$	(920)	$	1,644,322	(3)	125	AAA	3.06	%	3.08	%	2.41
CMBS interest-only(2)(4)	1,559,160		28,553		630		(37)		29,146		(5)	15	AAA	0.60	%	3.04	%	2.53
GNMA interest-only(4)(6)	109,783		1,982		123		(254)		1,851			11	AA+	0.49	%	4.59	%	2.77
Agency securities(2)	629		640		1		(4)		637			2	AA+	2.65	%	1.73	%	1.83
GNMA permanent securities(2)	31,461		31,681		688		—		32,369			6	AA+	3.91	%	3.17	%	1.93
Total debt securities	$	3,341,630	$	1,703,761	$	5,779	$	(1,215)	$	1,708,325		159		1.84	%	3.06	%	2.39
Equity securities(7)	N/A		12,848		292		(160)		12,980			2	N/A	N/A		N/A		N/A
Total real estate securities	$	3,341,630	$	1,716,609	$	6,071	$	(1,375)	$	1,721,305		161

(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 rating agencies, the highest 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.

(2)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(3)Includes $11.6 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(4)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(5)Includes $0.8 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(6)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s Agency interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company accounts for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on Agency interest-only securities in the consolidated statements of income in accordance with ASC 815.

(7)The Company has elected to account for equity securities at fair value with changes in fair value recorded in current period earnings.

The following is a breakdown of the carrying value of the Company’s debt securities by remaining maturity based upon expected cash flows at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	185,672	$	1,212,532	$	49,134	$	—	$	1,447,338
CMBS interest-only	920		24,590		—		—		25,510
GNMA interest-only	70		1,028		276		4		1,378
Agency securities	—		636		—		—		636
GNMA permanent securities	231		31,639		—		—		31,870
Total debt securities	$	186,893	$	1,270,425	$	49,410	$	4	$	1,506,732

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December 31, 2019

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	177,193	$	1,389,392	$	77,737	$	—	$	1,644,322
CMBS interest-only	1,439		27,707		—		—		29,146
GNMA interest-only	91		1,504		256		—		1,851
Agency securities	—		637		—		—		637
GNMA permanent securities	416		31,953		—		—		32,369
Total debt securities	$	179,139	$	1,451,193	$	77,993	$	—	$	1,708,325

During the three and six months ended June 30, 2020, the Company realized a gain (loss) on the sale of equity securities of $(0.2) million and $1.1 million, respectively, which is included in realized gain (loss) on securities on the Company’s consolidated statements of income. During the three and six months ended June 30, 2019, the Company realized a gain (loss) on the sale of equity securities of zero and $0.1 million, respectively, which is included in realized gain (loss) on securities on the Company’s consolidated statements of income.

During the three and six months ended June 30, 2020, the Company realized losses on securities recorded as other than temporary impairments of $0.1 million and $0.3 million, respectively, which are included in realized gain (loss) on securities on the Company’s consolidated statements of income. During the three and six months ended June 30, 2019 the Company realized no losses on securities recorded as other than temporary impairments.

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5. REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

The recent market volatility due to the COVID-19 pandemic has brought illiquidity in most asset classes, including real estate. The Company expects the net leased commercial real estate properties, which comprise the majority of our portfolio, to be minimally impacted as the majority of the net leased properties in our real estate portfolio are necessity-based businesses and have remained open and stable during the COVID-19 pandemic. We continue to actively monitor the diversified commercial real estate properties for both the immediate and long term impact of the pandemic on the buildings, the tenants, the business plans and the ability to execute those business plans.

The following tables present additional detail related to our real estate portfolio, net, including foreclosed properties ($ in thousands):

	June 30, 2020		December 31, 2019
Land	$	228,111	$	209,955
Building	871,585		883,005
In-place leases and other intangibles	159,049		161,203
Less: Accumulated depreciation and amortization	(216,535)		(206,082)
Real estate and related lease intangibles, net	$	1,042,210	$	1,048,081
Below market lease intangibles, net (other liabilities)	$	(38,125)	$	(39,067)

At June 30, 2020 and December 31, 2019, the Company held foreclosed properties included in real estate and related lease intangibles, net with a carrying value of $112.7 million and $89.5 million, respectively.

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Depreciation expense(1)	$	8,110	$	7,697	$	16,383	$	15,382
Amortization expense	1,681		2,213		3,392		4,730
Total real estate depreciation and amortization expense	$	9,791	$	9,910	$	19,775	$	20,112

(1)Depreciation expense on the consolidated statements of income also includes $25 thousand and $50 thousand of depreciation on corporate fixed assets for the three and six months ended June 30, 2020, respectively. Depreciation expense on the consolidated statements of income also includes $25 thousand and $50 thousand for the three and six months ended June 30, 2019, respectively.

The Company’s intangible assets are comprised of in-place leases, above market leases and other intangibles. The following tables present additional detail related to our intangible assets ($ in thousands):

	June 30, 2020		December 31, 2019
Gross intangible assets(1)	$	159,049	$	161,203
Accumulated amortization	63,089		62,773
Net intangible assets	$	95,960	$	98,430

(1)Includes $4.4 million and $4.5 million of unamortized above market lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively.

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The following table presents increases/reductions in operating lease income recorded by the Company ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Reduction in operating lease income for amortization of above market lease intangibles acquired	$	(92)	$	(208)	$	(183)	$	(633)
Increase in operating lease income for amortization of below market lease intangibles acquired	619		461		1,371		1,030

The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of June 30, 2020 ($ in thousands):

Period Ending December 31,	Adjustment to Operating Lease Income		Amortization Expense
2020 (last 6 months)	$	625	$	2,956
2021	1,070		5,504
2022	1,070		5,504
2023	1,070		5,504
2024	1,070		5,504
Thereafter	28,867		66,590
Total	$	33,772	$	91,562

Lease Prepayment by Lessor, Retirement of Related Mortgage Loan Financing and Impairment of Real Estate

On January 10, 2019, the Company received $10.0 million prepayment of a lease on a single-tenant two-story office building in Wayne, NJ. As of March 31, 2019, this property had a book value of $5.6 million, which is net of accumulated depreciation and amortization of $2.7 million. The Company recognized the $10.0 million of operating lease income on a straight-line basis over the revised lease term. On February 6, 2019, the Company paid off $6.6 million of mortgage loan financing related to the property, recognizing a loss on extinguishment of debt of $1.1 million. During the three months ended March 31, 2019, the Company recorded a $1.4 million impairment of real estate to reduce the carrying value of the real estate to the estimated fair value of the real estate. On May 1, 2019, the Company completed the sale of the property recognizing $3.9 million of operating lease income, $3.5 million realized loss on sale of real estate, net and $0.4 million of depreciation and amortization expense, resulting in a net loss of $20 thousand. See Note 15, Fair Value of Financial Instruments for further detail.

There were $0.7 million and $0.9 million of rent receivables included in other assets on the consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively.

There was unencumbered real estate of $82.4 million and $59.2 million as of June 30, 2020 and December 31, 2019, respectively.

During the three and six months ended June 30, 2020, the Company recorded $0.6 million and $2.5 million, respectively, of real estate operating income, which is included in operating lease income in the consolidated statements of income. During the three and six months ended 2019, the Company recorded $0.8 million and $1.0 million, respectively, of real estate operating income, which is included in operating lease income in the consolidated statements of income.

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The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at June 30, 2020 ($ in thousands):

Period Ending December 31,	Amount
2020 (last 6 months)	$	43,163
2021	73,091
2022	66,145
2023	65,377
2024	64,412
Thereafter	507,659
Total	$	819,847

Acquisitions

During the six months ended June 30, 2020, the Company acquired the following properties ($ in thousands):

Acquisition Date	Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
Purchases of real estate
Aggregate purchases of net leased real estate			$	6,239	100.0%
Real estate acquired via foreclosure
March 2020	Diversified	Los Angeles, CA	21,535		100.0%
June 2020	Diversified	Winston Salem, NC	3,900		100.0%
Total real estate acquired via foreclosure			25,435
Total real estate acquisitions			$	31,674

(1)Properties were consolidated as of acquisition date.

The Company allocates purchase consideration based on relative fair values, and real estate acquisition costs are capitalized as a component of the cost of the assets acquired for asset acquisitions. During the six months ended June 30, 2020, all acquisitions were determined to be asset acquisitions.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2020, as follows ($ in thousands):

	Purchase Price Allocation
Land	$	23,524
Building	7,244
Intangibles	1,201
Below Market Lease Intangibles	(295)
Total purchase price	$	31,674

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The weighted average amortization period for intangible assets acquired during the six months ended June 30, 2020 was 39.8 years. The Company recorded $0.1 million and $0.2 million in revenues from its 2020 acquisitions for the three and six months ended June 30, 2020, respectively, which is included in its consolidated statements of income. The Company recorded $0.1 million and $47.6 thousand in earnings (losses) from its 2020 acquisitions for the three and six months ended June 30, 2020, respectively, which is included in its consolidated statements of income.

During the six months ended June 30, 2019, the Company acquired the following properties ($ in thousands):

Acquisition Date	Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
Purchases of real estate
Aggregate purchases of net leased real estate			$	5,071	100.0%
Real estate acquired via foreclosure
February 2019	Diversified	Omaha, NE	18,200		100.0%
Total real estate acquired via foreclosure			18,200
Total real estate acquisitions			$	23,271

(1)Properties were consolidated as of acquisition date.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2019, as follows ($ in thousands):

	Purchase Price Allocation
Land	$	3,789
Building	18,885
Intangibles	854
Below Market Lease Intangibles	(257)
Total purchase price	$	23,271

The weighted average amortization period for intangible assets acquired during the six months ended June 30, 2019 was 37.0 years. The Company recorded $62.5 thousand and $78.9 thousand in revenues from its 2019 acquisitions for the three and six months ended June 30, 2019, respectively, which is included in its consolidated statements of income. The Company recorded $(1.2) million and $(1.5) million in earnings (losses) from its 2019 acquisitions for the three and six months ended June 30, 2019, respectively, which is included in its consolidated statements of income.

Acquisitions via Foreclosure

In June 2020, the Company acquired a hotel in Winston Salem, NC via foreclosure. This property previously served as collateral for a mortgage loan receivable held for investment with a net basis of $3.8 million. The Company obtained a third-party appraisal of the property. The $3.9 million fair value was determined using the ground lease approach and the income approach to value. The appraiser utilized a terminal capitalization rate of 9.50% and a discount rate of 13.50%. There was no gain or loss resulting from the foreclosure of the loan.

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In March 2020, the Company acquired a development property in Los Angeles, CA, via foreclosure. This property previously served as collateral for a mortgage loan receivable held for investment with a basis of $21.6 million, net of an asset-specific loan loss provision of $2.0 million. The Company obtained a third-party appraisal of the property. Substantially all of the fair value was attributed to land. The $21.5 million fair value was determined using the sales comparison approach to value. Using this approach, the appraiser developed an opinion of the fee simple value of the underlying land by comparing the property to similar, recently sold properties in the surrounding or competing area. The Company recorded a $0.1 million loss resulting from the foreclosure of the loan.

In February 2019, the Company acquired a hotel in Omaha, NE, via foreclosure. This property previously served as collateral for a mortgage loan receivable held for investment with a net basis of $17.9 million. The Company obtained a third-party appraisal of the property. The $18.2 million fair value was determined using the income approach to value. The appraiser utilized a terminal capitalization rate of 8.75% and a discount rate of 10.25%. There was no gain or loss resulting from the foreclosure of the loan.

These non-recurring fair values are considered Level 3 measurements in the fair value hierarchy.

Sales

The Company sold the following properties during the six months ended June 30, 2020 ($ in thousands):

Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining
Various	Condominium	Miami, FL	$	931	$	924	$	7	—	3	3
March 2020	Diversified	Richmond, VA	22,526		14,829		7,697		7	—	—
March 2020	Diversified	Richmond, VA	6,933		4,109		2,824		1	—	—
Totals			$	30,390	$	19,862	$	10,528

Realized gain on the sale of real estate, net on the consolidated statements of income also includes $0.1 million of realized loss on the disposal of fixed assets for the six months ended June 30, 2020

The Company sold the following properties during the six months ended June 30, 2019 ($ in thousands):

Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining
N/A	Condominium	Las Vegas, NV	$	—	$	—	$	—	—	—	1
Various	Condominium	Miami, FL	3,917		3,550		367		—	13	9
April 2019	Diversified	Wayne, NJ	1,729		4,799		(3,070)		1	—	—
May 2019	Diversified	Grand Rapids, MI	10,019		8,254		1,765		1	—	—
Totals			$	15,665	$	16,603	$	(938)

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6. INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

The following is a summary of the Company’s investments in and advances to unconsolidated joint ventures, which we account for using the equity method, as of June 30, 2020 and December 31, 2019 ($ in thousands):

Entity	June 30, 2020		December 31, 2019
Grace Lake JV, LLC	$	3,496	$	3,047
24 Second Avenue Holdings LLC	45,423		45,386
Investment in unconsolidated joint ventures	$	48,919	$	48,433

The following is a summary of the Company’s allocated earnings (losses) based on its ownership interests from investment in unconsolidated joint ventures for the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Entity	2020		2019		2020		2019
Grace Lake JV, LLC	$	263	$	618	$	449	$	1,032
24 Second Avenue Holdings LLC	208		946		463		1,490
Earnings (loss) from investment in unconsolidated joint ventures	$	471	$	1,564	$	912	$	2,522

Grace Lake JV, LLC

In connection with the origination of a loan in April 2012, the Company received a 25% equity interest with the right to convert upon a capital event. On March 22, 2013, the loan was refinanced, and the Company converted its interest into a 19% limited liability company membership interest in Grace Lake JV, LLC (“Grace Lake LLC”), which holds an investment in an office building complex. After taking into account the preferred return of 8.25% and the return of all equity remaining in the property to the Company’s operating partner, the Company is entitled to 25% of the distribution of all excess cash flows and all disposition proceeds upon any sale. The Company is not legally required to provide any future funding to Grace Lake LLC. The Company accounts for its interest in Grace Lake LLC using the equity method of accounting, as it has a 19% investment, compared to the 81% investment of its operating partner and does not control the entity.

The Company’s investment in Grace Lake LLC is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was deemed to be a VIE primarily based on the fact there are disproportionate voting and economic rights within the joint venture. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has a passive investment and no control of this entity and therefore does not have controlling financial interests in this VIE. The Company’s maximum exposure to loss is limited to its investment in the VIE. The Company has not provided financial support to this VIE that it was not previously contractually required to provide.

During the six months ended June 30, 2020, the Company received no distributions from its investment in Grace Lake LLC. During the six months ended June 30, 2019, the Company had received $3.1 million of distributions from its investment in Grace Lake LLC.

The Company holds its investment in Grace Lake LLC in a TRS.

24 Second Avenue Holdings LLC

On August 7, 2015, the Company entered into a joint venture, 24 Second Avenue Holdings LLC (“24 Second Avenue”), with an operating partner (the “Operating Partner”) to invest in a ground-up residential/retail condominium development and construction project located at 24 Second Avenue, New York, NY. The Company accounted for its interest in 24 Second Avenue using the equity method of accounting as its joint venture partner was the managing member of 24 Second Avenue and had substantive management rights.

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During the three months ended March 31, 2019, the Company converted its existing $35.0 million common equity interest into a $35.0 million priority preferred equity position. The Company also provided $50.4 million in first mortgage financing in order to refinance the existing $48.1 million first mortgage construction loan which was made by another lending institution. In addition to the new $50.4 million first mortgage loan, the Company also funded a $6.5 million mezzanine loan for use in completing the project. The Operating Partner must fully fund any and all additional capital for necessary expenses.

Due to the Company’s non-controlling equity interest in 24 Second Avenue, the Company accounts for the new loans as additional investments in the joint venture.

During the three and six months ended June 30, 2020, the Company recorded $0.2 million and $0.5 million, respectively, in income (expenses), each of which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the consolidated statements of income. During the three and six months ended June 30, 2019, the Company recorded $0.9 million and $1.5 million, respectively, in income (expenses), each of which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the consolidated statements of income. During 2019, the Company capitalized interest related to the cost of its investment in 24 Second Avenue, as 24 Second Avenue had activities in progress necessary to construct and ultimately sell condominium units. During the six months ended June 30, 2019, the Company capitalized $0.1 million of interest expense, using a weighted average interest rate. The capitalized interest expense was recorded in investment in unconsolidated joint ventures in the consolidated balance sheets. As a result of the transactions described above, subsequent to the three months ended March 31, 2019, the Company no longer capitalizes interest related to this investment, and income generated from the new loans is accounted for as earnings from investment in unconsolidated joint ventures.

As of June 30, 2020, 24 Second Avenue had $11.3 million of loans payable to a third-party lender. 24 Second Avenue consists of 30 residential condominium units and one commercial condominium unit. 24 Second Avenue started closing on the existing sales contracts during the quarter ended March 31, 2019, upon receipt of New York City Building Department approvals and a temporary certificate of occupancy for a portion of the project. As of June 30, 2020, 24 Second Avenue sold 19 residential condominium units for $49.6 million in total gross sale proceeds. As of June 30, 2020, the Company had no additional remaining capital commitment to 24 Second Avenue.

The Company’s investment in 24 Second Avenue is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was deemed to be a VIE primarily based on (i) the fact that the total equity investment at risk (inclusive of the additional financing the Company provided through the first mortgage and mezzanine loans) is sufficient to permit the entities to finance activities without additional subordinated financial support provided by any parties, including equity holders; and (ii) the voting and economic rights are not disproportionate within the joint venture. The Company determined that it was not the primary beneficiary of this VIE because it does not have a controlling financial interest.

The Company holds its investment in 24 Second Avenue in a TRS.

Combined Summary Financial Information for Unconsolidated Joint Ventures

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of June 30, 2020 and December 31, 2019 ($ in thousands):

	June 30, 2020		December 31, 2019
Total assets	$	113,414	$	118,727
Total liabilities	77,277		78,762
Partners’/members’ capital	$	36,137	$	39,965

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The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total revenues	$	4,294	$	6,330	$	8,770	$	11,030
Total expenses	3,450		3,571		7,424		7,434
Net income (loss)	$	844	$	2,759	$	1,346	$	3,596

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7. DEBT OBLIGATIONS, NET

The details of the Company’s debt obligations at June 30, 2020 and December 31, 2019 are as follows ($ in thousands):

June 30, 2020

Debt Obligations	Committed Financing		Debt Obligations Outstanding			Committed but Unfunded		Interest Rate at June 30, 2020(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility(2)	$	500,000	$	114,679		$	385,321	1.93%	—	2.18%	12/19/2022	(3)	(4)	$	179,332	$	179,332
Committed Loan Repurchase Facility	250,000		—			250,000		—%	—	—%	2/26/2021	(5)	(6)	—		—
Committed Loan Repurchase Facility	300,000		144,565			155,435		1.94%	—	2.94%	12/19/2020	(7)	(8)	251,788		251,788
Committed Loan Repurchase Facility	300,000		65,702			234,298		1.94%	—	2.19%	11/6/2022	(9)	(4)	100,597		100,704
Committed Loan Repurchase Facility	100,000		38,228			61,772		2.31%	—	2.43%	12/31/2022	(10)	(4)	64,721		64,807
Committed Loan Repurchase Facility	100,000		17,901			82,099		2.68%	—	2.68%	3/24/2021	(11)	(12)	30,600		30,600
Total Committed Loan Repurchase Facilities	1,550,000		381,075			1,168,925								627,038		627,231
Committed Securities Repurchase Facility(2)	785,321		451,342			333,979		0.89%	—	2.44%	12/23/2021	N/A	(13)	576,924		576,924
Uncommitted Securities Repurchase Facility	N/A (13)		462,612			N/A (14)		1.42%	—	4.81%	7/2020 - 9/2020	N/A	(13)	596,230		596,230		(15)
Total Repurchase Facilities	1,950,000		1,295,029			1,502,904								1,800,192		1,800,385
Revolving Credit Facility	266,430		266,430			—		3%	—	3%	2/11/2021	(16)	N/A (17)	N/A (17)		N/A (17)
Mortgage Loan Financing	805,431		805,431			—		3.75%	—	6.75%	2020 - 2030(18)	N/A	(19)	959,766		1,172,268		(20)
Secured Financing Facility	206,350		188,687		(21)	—		10.75%	—	10.75%	5/6/2023	N/A	(22)	335,237		335,675
CLO Debt	304,413		299,605		(23)	—		5.50%	—	5.50%	5/16/2024	N/A	(24)	469,505		469,587
Borrowings from the FHLB	1,500,000		360,790			1,139,210		0.44%	—	2.95%	2020 - 2024	N/A	(24)	526,151		528,650		(25)
Senior Unsecured Notes	1,752,817		1,737,542		(26)	—		4.25%	—	5.88%	2021 - 2027	N/A	N/A (27)	N/A (27)		N/A (27)
Total Debt Obligations, Net	$	6,785,441	$	4,953,514		$	2,642,114							$	4,090,851	$	4,306,565

(1)June 2020 LIBOR rates are used to calculate interest rates for floating rate debt.

(2)The combined committed amounts for the loan repurchase facility and the securities repurchase facility total $900.0 million, with maximum capacity on the loan repurchase facility of $500.0 million, and maximum capacity on the securities repurchase facility of $900.0 million less outstanding commitments on the loan repurchase facility.

(3)Two additional 12-month periods at Company’s option. No new advances are permitted after the initial maturity date.

(4)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(5)Three additional 12-month periods at Company’s option.

(6)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(7)Three additional 364-day periods.

(8)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(9)One additional 12-month extension period and two additional 6-month extension periods at Company’s option.

(10)Two additional 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(11)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(12)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(13)Commercial real estate securities. It does not include the real estate collateralizing such securities.

(14)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(15)Includes $2.2 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(16)Four additional 12-month periods at Company’s option.

(17)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(18)Anticipated repayment dates.

(19)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(20)Using undepreciated carrying value of commercial real estate to approximate fair value.

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(21)Presented net of unamortized debt issuance costs of $9.7 million and an unamortized discount of $8.0 million related to the Purchase Right (described in detail under Secured Financing Facility below) at June 30, 2020.

(22)First mortgage commercial real estate loans. Substitution of collateral and conversion of loan collateral to mortgage collateral are permitted with Lender’s approval.

(23)Presented net of unamortized debt issuance costs of $4.8 million at June 30, 2020.

(24)First mortgage commercial real estate loans and investment grade commercial real estate securities. It does not include the real estate collateralizing such loans and securities.

(25)Includes $9.4 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(26)Presented net of unamortized debt issuance costs of $15.3 million at June 30, 2020.

(27)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

December 31, 2019

Debt Obligations	Committed Financing		Debt Obligations Outstanding			Committed but Unfunded		Interest Rate at December 31, 2019(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility	$	600,000	$	183,828		$	416,172	3.24%	—	3.74%	12/19/2022	(2)	(3)	$	287,974	$	288,210
Committed Loan Repurchase Facility	350,000		70,697			279,303		3.71%	—	3.81%	5/24/2020	(4)	(5)	101,590		103,868
Committed Loan Repurchase Facility	300,000		248,182			51,818		3.49%	—	3.74%	12/19/2020	(6)	(7)	382,778		382,778
Committed Loan Repurchase Facility	300,000		98,678			201,322		3.50%	—	3.75%	11/6/2022	(8)	(3)	175,000		175,270
Committed Loan Repurchase Facility	100,000		9,952			90,048		3.96%	—	3.99%	1/3/2023	(9)	(3)	75,628		75,813
Committed Loan Repurchase Facility	100,000		90,927			9,073		3.74%	—	3.80%	12/24/2020	(10)	(11)	126,311		126,311
Total Committed Loan Repurchase Facilities	1,750,000		702,264			1,047,736								1,149,281		1,152,250
Committed Securities Repurchase Facility	400,000		42,751			357,249		2.50%	—	2.56%	12/23/2021	N/A	(12)	52,691		52,691
Uncommitted Securities Repurchase Facility	N/A (12)		1,070,919			N/A (13)		2.17%	—	3.54%	1/2020 - 3/2020	N/A	(12)	1,188,440		1,188,440		(14)
Total Repurchase Facilities	2,150,000		1,815,934			1,404,985								2,390,412		2,393,381
Revolving Credit Facility	266,430		—			266,430		NA			2/11/2020	(15)	N/A (16)	N/A (16)		N/A (16)
Mortgage Loan Financing	812,606		812,606			—		3.75%	—	6.75%	2020 - 2029(17)	N/A	(18)	988,857		1,192,106		(19)
Borrowings from the FHLB	1,945,795		1,073,500			872,295		1.47%	—	2.95%	2020 - 2024	N/A	(20)	1,107,188		1,113,811		(21)
Senior Unsecured Notes	1,166,201		1,157,833		(22)	—		5.25%	—	5.88%	2021 - 2025	N/A	N/A (23)	N/A (23)		N/A (23)
Total Debt Obligations	$	6,341,032	$	4,859,873		$	2,543,710							$	4,486,457	$	4,699,298

(1)December 31, 2019 LIBOR rates are used to calculate interest rates for floating rate debt.

(2)Two additional 12-month periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)One additional 12-month period at Company’s option.

(5)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(6)Three additional 364-day periods.

(7)First mortgage and mezzanine commercial real estate loans and senior pari passu interests therein. It does not include the real estate collateralizing such loans.

(8)One additional 12-month extension period and two additional 6-month extension periods at Company’s option.

(9)Two additional 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(10)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(11)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(12)Commercial real estate securities. It does not include the real estate collateralizing such securities.

(13)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(14)Includes $2.2 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(15)Four additional 12-month periods at Company’s option.

(16)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(17)Anticipated repayment dates.

39

(18)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(19)Using undepreciated carrying value of commercial real estate to approximate fair value.

(20)First mortgage commercial real estate loans and pari passu interests therein. It does not include the real estate collateralizing such loans.

(21)First mortgage commercial real estate loans and investment grade commercial real estate securities. It does not include the real estate collateralizing such loans and securities.

(22)Includes $9.9 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(23)Presented net of unamortized debt issuance costs of $8.4 million at December 31, 2019.

(24)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

Combined Maturity of Debt Obligations

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands):

Period ending December 31,	Borrowings by Maturity(1)
2020 (last 6 months)	$	1,494,949
2021	527,569
2022	642,014
2023	351,436
2024	612,695
Thereafter	1,358,119
Subtotal	4,986,782
Debt issuance costs included in senior unsecured notes	(15,275)
Debt issuance costs included in secured financing facility	(9,705)
Discount on secured financing facility related to purchase right	(7,958)
Debt issuance costs included in CLO debt	(4,808)
Debt issuance costs included in mortgage loan financing	(524)
Premiums included in mortgage loan financing(2)	5,002
Total	$	4,953,514

(1)Contractual payments under current maturities, some of which are subject to extensions. The maturities listed above for 2020 (last 6 months) relate to debt obligations that are subject to existing Company controlled extension options for one or more additional one year periods or could be refinanced by other existing facilities as of June 30, 2020.

(2)Deferred gains on intercompany loans, secured by our own real estate, sold into securitizations. These premiums are amortized as a reduction to interest expense.

The Company’s debt facilities are subject to covenants which require the Company to maintain a minimum level of total equity. Largely as a result of this restriction, approximately $849.0 million of the total equity is restricted from payment as a dividend by the Company at June 30, 2020.

Committed Loan and Securities Repurchase Facilities

On February 14, 2020, the Company amended one of its committed loan repurchase facilities with a major U.S. bank to reduce the maximum capacity of the facility from $600.0 million to $500.0 million.

On February 26, 2020, the Company amended one of its committed loan repurchase facilities with a major U.S. bank, extending the term of the facility. The current maturity date is now February 26, 2021, and the Company has three one-year extension options for a final maturity date of February 26, 2024. The Company also reduced the maximum size of the facility from $350.0 million to $250.0 million.

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On March 23, 2020, the Company amended one of its committed loan and securities repurchase facilities with a major U.S. bank to allow for an increase in the capacity on the securities repurchase facility, to the extent the Company has excess capacity on the loan repurchase facility. Prior to the amendment, the committed amounts on the facility were $500.0 million and $400.0 million on the loan and securities repurchase facilities, respectively. After the amendment, the committed amounts continue to total $900.0 million, with maximum capacity on the loan repurchase facility of $500.0 million, and maximum capacity on the securities repurchase facility of $900.0 million less outstanding commitments on the loan repurchase facility.

Effective June 16, 2020, the Company amended the pricing side letter related to one of its committed loan repurchase facility with a major U.S. bank to extend the current maturity date to March 24, 2021. The Company also temporarily increased the leverage covenant to 4.0x through and including December 31, 2020.

Secured Financing Facility  

On April 30, 2020, the Company entered into a strategic financing arrangement (the “Agreement”) with an American multinational corporation (the “Lender”), under which the Lender will provide the Company with approximately $206.4 million in senior secured financing (the “Secured Financing Facility”) to fund transitional and land loans. The Secured Financing Facility will be secured on a first lien basis on a portfolio of certain of the Company’s loans and will mature on May 6, 2023, and borrowings thereunder will bear interest at LIBOR (or a minimum of 0.75% if greater) plus 10.0%, with a minimum interest premium of approximately $39.2 million minus the aggregate sum of all interest payments made under the Secured Financing Facility prior to the date of payment of the minimum interest premium, which is payable upon the earlier of maturity or repayment in full of the loan. The Senior Financing Facility is non-recourse, subject to limited exceptions, and does not contain mark-to-market provisions. Additionally, the Senior Financing Facility provides the Company optionality to modify or restructure loans or forbear in exercising remedies, which maximizes the Company’s financial flexibility.

As part of the strategic financing, the Lender also has the ability to make an equity investment in the Company of up to 4.0 million Class A common shares at $8.00, which amount and price may be proportionally adjusted in the event of equity distributions, stock splits, reclassifications and other similar events (the “Purchase Right”). The Purchase Right will expire on December 31, 2020. The Company expects that any such investment would additionally benefit its liquidity position.

The Purchase Right was classified as equity. The $200.9 million of net proceeds from the original issuance were allocated $192.5 million to the originally issued debt obligation and $8.4 million to the Purchase Right using the relative fair value method. The commitment to issue shares will not be subsequently remeasured. The $8.4 million allocated to the Purchase Right is being treated as a discount to the debt and amortized over the life of the Purchase Right to interest expense.

Pursuant to the Purchase Right, the Lender has agreed to a customary standstill until December 31, 2020 or the date on which the Lender has exercised the Purchase Right in full, if earlier. In addition, the Lender has agreed not to sell, transfer, assign, pledge, hypothecate, mortgage, dispose of or in any way encumber the shares acquired as a result of exercising the Purchase Right for a period of time following the exercise date. In connection with the issuance of the Purchase Right, the Company and the Lender entered into a registration rights agreement, pursuant to which the Company has agreed to provide customary demand and piggyback registration rights to the Lender.

As of June 30, 2020, the Company had $188.7 million of borrowings outstanding under the secured financing facility included in debt obligations on its consolidated balance sheets, net of unamortized debt issuance costs of $9.7 million and an $8.0 million unamortized discount related to the Purchase Right.

Collateralized Loan Obligation (“CLO”) Debt

On April 27, 2020, a consolidated subsidiary of the Company completed a private CLO transaction with a major U.S. bank which generated $310.2 million of gross proceeds to Ladder, financing $481.3 million of loans (“Contributed Loans”) at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained a 35.5% subordinate and controlling interest in the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed Loans, including broad discretion in managing these loans in light of the COVID-19 pandemic, and has the ability to appoint the special servicer under the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed Loans and has the ability to appoint the special servicer under the CLO. The CLO is a VIE and the Company was the primary beneficiary and, therefore, consolidated the VIE - See Note 10, Consolidated Variable Interest Entities. Proceeds from the transaction were used to pay off other secured debt including bank and FHLB financing that was subject to mark-to-market provisions.

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As of June 30, 2020, the Company had $299.6 million of matched term, non-mark-to-market and non-recourse basis CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $4.8 million were included in CLO debt as of June 30, 2020.

Senior Unsecured Notes

As of June 30, 2020, the Company had $1.7 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $258.5 million in aggregate principal amount of 5.875% senior notes due 2021 (the “2021 Notes”), $485.6 million in aggregate principal amount of 5.25% senior notes due 2022 (the “2022 Notes”), $350.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”) and $658.0 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes,” collectively with the 2021 Notes, the 2022 Notes and the 2025 Notes, the “Notes”). As a result of the Company’s financing and liquidity measures implemented to date as a direct response to the COVID-19 pandemic, Ladder repurchased an aggregate principal of the Notes of $139.1 million, recognizing a gain on extinguishment of debt of $19.0 million, offset by accelerated deferred financing cost amortization of $1.5 million during the three months ended June 30, 2020.

2027 Notes

On January 30, 2020, LCFH and Ladder Capital Finance Corporation (“LCFC”), a wholly-owned subsidiary of LCFH, issued $750.0 million in aggregate principal amount of 4.25% senior notes due February 1, 2027. The 2027 Notes require interest payments semi-annually in cash in arrears on August 1 and February 1 of each year, beginning on August 1, 2020. The 2027 Notes will mature on February 1, 2027. The 2027 Notes are unsecured and are subject to an unencumbered assets to unsecured debt covenant. The Company may redeem the 2027 Notes, in whole, at any time, or from time to time, prior to their stated maturity. At any time on or after February 1, 2023, the Company may redeem the 2027 Notes in whole or in part, upon not less than 15 nor more than 60 days’ notice, at a redemption price defined in the indenture governing the 2027 Notes, plus accrued and unpaid interest, if any, to the redemption date. Net proceeds of the offering were used to repay secured indebtedness. During the six months ended June 30, 2020, the Company retired $92.0 million of principal of the 2027 Notes for a repurchase price of $78.4 million, recognizing a $12.3 million net gain on extinguishment of debt after recognizing $(1.3) million of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $658.0 million in aggregate principal amount of the 2027 Notes is due February 1, 2027.

2025 Notes

On September 25, 2017, LCFH and LCFC issued $400.0 million in aggregate principal amount of 5.25% senior notes due October 1, 2025. During the six months ended June 30, 2020, the Company retired $49.2 million of principal of the 2025 Notes for a repurchase price of $42.6 million, recognizing a $6.2 million net gain on extinguishment of debt after recognizing $(0.5) million of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $350.8 million in aggregate principal amount of the 2025 Notes is due October 1, 2025.

2022 Notes

On March 16, 2017, LCFH issued $500.0 million in aggregate principal amount of 5.250% senior notes due March 15, 2022. During the six months ended June 30, 2020, the Company retired $14.4 million of principal of the 2022 Notes for a repurchase price of $13.8 million, recognizing a $0.6 million net gain on extinguishment of debt after recognizing $(0.1) million of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $485.6 million in aggregate principal amount of the 2022 Notes is due March 15, 2022.

2021 Notes

On August 1, 2014, LCFH and LCFC issued $300.0 million in aggregate principal amount of 5.875% senior notes due August 1, 2021. During the six months ended June 30, 2020, the Company retired $7.7 million of principal of the 2021 Notes for a repurchase price of $7.5 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(20.0) thousand of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $258.5 million in aggregate principal amount of the 2021 Notes is due August 1, 2021.

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Financing Strategy in Current Market Conditions

In March 2020, as the COVID-19 health crisis rapidly transformed into a financial crisis, management took swift action to increase liquidity resources and actively manage its financing arrangements with its bank partners. In an abundance of caution, the Company first drew down on its $266.4 million unsecured revolving credit facility, which continues to be fully-drawn, and the proceeds continue to be held as unrestricted cash on the Company’s balance sheet as of July 30, 2020.   

Securities Repurchase Facilities: The Company invests in AAA-rated CRE CLO securities, typically front pay securities, with relatively short duration and significant subordination. These securities have historically been financed with short-term maturity repurchase agreements with various bank counterparties. The Company has been able to continue to access securities repurchase funding and the pricing of such borrowings has improved during the three months ended June 30, 2020 as liquidity returned to the market and pricing for the securities that serve as collateral improved. Furthermore, during the three months ended June 30, 2020, the Company paid down $275.8 million of securities repurchase financing, primarily through sales of securities. As of July 27, 2020, the Company had $834.4 million outstanding of securities repurchase financing with maturities ranging from 3 days to 17 months.

Federal Home Loan Bank (“FHLB”) Financing:  As discussed in the Company’s Annual Report, in 2016, the FHFA adopted a final rule that limited our captive insurance subsidiary’s membership in the FHLB, requiring us to significantly reduce the amounts of FHLB borrowings outstanding by February of 2021.

During the three months ended June 30, 2020, the Company paid down FHLB borrowings of $646.8 million, with $360.8 million outstanding as of July 27, 2020. The remaining maturities are staggered out through 2024. Funding for future advance paydowns would be obtained from the natural amortization of securities over time, loan pay offs and/or sales of loan and securities collateral. The Company incurred $6.5 million in prepayment penalties related to this paydown of FHLB borrowings.

Loan Repurchase Financing:  The Company has maintained a consistent dialogue with its loan financing counterparties since the COVID-19 crisis unfolded in late March 2020. In addition to using proceeds from the Company’s 2027 Notes offering in January to reduce secured debt, during the three months ended June 30, 2020, the Company paid down over $155.9 million on such loan repurchase financing through loan collateral pay offs and loans securitized through a CLO financing transaction (see above).

As of July 27, 2020, the Company had $374.9 million of loan repurchase debt outstanding with five separate bank counterparties. The Company continues to maintain an active dialogue with its bank counterparties as it expects loan collateral on each of their lines to experience some measure of forbearance.

Secured Financing Facility:  On April 30, 2020, the Company entered into a strategic financing arrangement (the “Agreement”) with an American multinational corporation (the “Lender”), under which the Lender will provide the Company with approximately $206.4 million in senior secured financing (the “Secured Financing Facility”) to fund transitional and land loans (see above).

Completion of Private CLO: On April 27, 2020, the Company completed a private CLO financing transaction with a major U.S. bank which generated $310.2 million of gross proceeds, financing $481.3 million of loans at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis (see above).

As a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic, as of July 27, 2020, Ladder had over $750.0 million of unrestricted cash on hand. Based on the financing actions described above, the Company has significantly decreased its exposure to mark-to-market financing.

Financial Covenants

We were in compliance with all covenants described in the Company’s Annual Report, as of June 30, 2020.

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8. DERIVATIVE INSTRUMENTS

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)
Caps
1 Month LIBOR	$	69,571	$	—	$	—	0.86
Futures
5-year Swap	24,400		103		—		0.25
10-year Swap	61,000		258		—		0.25
5-year U.S. Treasury Note	4,500		19		—		0.25
Total futures	89,900		380		—
Total derivatives	$	159,471	$	380	$	—

(1)Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

December 31, 2019

			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)
Caps
1Month LIBOR	$	69,571	$	—	$	—	0.36
Futures
5-year Swap	46,000		158		—		0.25
10-year Swap	149,800		516		—		0.25
5-year U.S. Treasury Note	1,100		4		—		0.25
Total futures	196,900		678		—
Credit Derivatives
S&P 500 Put Options	143,300		15		—		0.05
Total credit derivatives	143,300		15		—
Total derivatives	$	409,771	$	693	$	—

(1)Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

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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 and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Contract Type
Futures	$	(570)	$	(326)	$	(896)	$	(298)	$	(16,272)	$	(16,570)
Credit Derivatives	—		83		83		111		211		322
Total	$	(570)	$	(243)	$	(813)	$	(187)	$	(16,061)	$	(16,248)

	Three Months Ended June 30, 2019						Six Months Ended June 30, 2019
	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Contract Type
Futures	$	(1,046)	$	(14,361)	$	(15,407)	$	1,511	$	(27,894)	$	(26,383)
Credit Derivatives	66		(116)		(50)		—		(108)		(108)
Total	$	(980)	$	(14,477)	$	(15,457)	$	1,511	$	(28,002)	$	(26,491)

The Company’s counterparties held $1.7 million and $3.5 million of cash margin as collateral for derivatives as of June 30, 2020 and December 31, 2019, respectively, which is included in restricted cash in the consolidated balance sheets.

Futures

Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for our interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended their rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

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9. OFFSETTING ASSETS AND LIABILITIES

The following tables present both gross information and net information about derivatives and other instruments eligible for offset in the statement of financial position as of June 30, 2020 and December 31, 2019. The Company’s accounting policy is to record derivative asset and liability positions on a gross basis; therefore, the following tables present the gross derivative asset and liability positions recorded on the balance sheets, while also disclosing the eligible amounts of financial instruments and cash collateral to the extent those amounts could offset the gross amount of derivative asset and liability positions. The actual amounts of collateral posted by or received from counterparties may be in excess of the amounts disclosed in the following tables as the following only disclose amounts eligible to be offset to the extent of the recorded gross derivative positions.

As of June 30, 2020

Offsetting of Financial Assets and Derivative Assets

($ in thousands)

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	380	$	—	$	380	$	—	$	—	$	380
Total	$	380	$	—	$	380	$	—	$	—	$	380

(1)Included in restricted cash on consolidated balance sheets.

As of June 30, 2020

Offsetting of Financial Liabilities and Derivative Liabilities

($ in thousands)

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	1,295,029	$	—	$	1,295,029	$	1,295,029	$	—	$	—
Total	$	1,295,029	$	—	$	1,295,029	$	1,295,029	$	—	$	—

(1)Included in restricted cash on consolidated balance sheets.

As of December 31, 2019

Offsetting of Financial Assets and Derivative Assets

($ in thousands)

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	693	$	—	$	693	$	—	$	—	$	693
Total	$	693	$	—	$	693	$	—	$	—	$	693

(1)Included in restricted cash on consolidated balance sheets.

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As of December 31, 2019

Offsetting of Financial Liabilities and Derivative Liabilities

($ in thousands)

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)
Repurchase agreements	$	1,815,934	$	—	$	1,815,934	$	1,815,934	$	—	$	—
Total	$	1,815,934	$	—	$	1,815,934	$	1,815,934	$	—	$	—

(1)Included in restricted cash on consolidated balance sheets.

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. Assets, liabilities, and collateral subject to master netting agreements as of June 30, 2020 and December 31, 2019 are disclosed in the tables above. The Company does not present its derivative and repurchase agreements net on the consolidated financial statements as it has elected gross presentation.

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10. CONSOLIDATED VARIABLE INTEREST ENTITIES

FASB ASC Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Operating Partnership is a VIE and as such, substantially all of the consolidated balance sheet is a consolidated VIE. In addition, the Operating Partnership consolidates one collateralized loan obligation (“CLO”) VIE with the following balance sheet ($ in thousands):

	June 30, 2020
	Notes 3 & 7
Restricted cash	$	8,649,072
Mortgage loan receivables held for investment, net, at amortized cost	469,505,178
Accrued interest receivable	1,769,859
Total assets	$	479,924,109
Senior and unsecured debt obligations	$	299,604,861
Accrued expenses	697,612
Total liabilities	300,302,473
Net equity in VIEs (eliminated in consolidation)	179,621,636
Total equity	179,621,636
Total liabilities and equity	$	479,924,109

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11. EQUITY STRUCTURE AND ACCOUNTS

Exchange for Class A Common Stock

Pursuant to the Third Amended and Restated LLLP Agreement of LCFH, the Continuing LCFH Limited Partners may from time to time, subject to certain conditions, receive one share of the Company’s Class A common stock in exchange for (i) one share of the Company’s Class B common stock, (ii) one Series REIT LP Unit and (iii) either one Series TRS LP Unit or one TRS I LLC Share, subject to equitable adjustments for stock splits, stock dividends and reclassifications.

During the six months ended June 30, 2020, 6,779,225 Series REIT LP Units and 6,779,225 Series TRS LP Units were collectively exchanged for 6,779,225 shares of Class A common stock and 6,779,225 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges. As of June 30, 2020, the Company held a 95.5% interest in LCFH.

During the six months ended June 30, 2019, 1,139,411 Series REIT LP Units and 1,139,411 Series TRS LP Units were collectively exchanged for 1,139,411 shares of Class A common stock; and 1,139,411 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges. As of June 30, 2019, the Company held a 89.8% interest in LCFH.

Stock Repurchases

On October 30, 2014, the board of directors authorized the Company to repurchase up to $50.0 million of the Company’s Class A common stock from time to time without further approval. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. As of June 30, 2020, the Company has a remaining amount available for repurchase of $39.5 million, which represents 4.2% in the aggregate of its outstanding Class A common stock, based on the closing price of $8.10 per share on such date.

The following table is a summary of the Company’s repurchase activity of its Class A common stock during the six months ended June 30, 2020 and 2019 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2019		$	41,132
Additional authorizations		—
Repurchases paid	210,151	(1,682)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2020		$	39,450

(1)Amount excludes commissions paid associated with share repurchases.

	Shares	Amount(1)
Authorizations remaining as of December 31, 2018		$	41,769
Additional authorizations		—
Repurchases paid	40,065	(637)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2019		$	41,132

(1)Amount excludes commissions paid associated with share repurchases.

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Dividends

The following table presents dividends declared (on a per share basis) of Class A common stock for the six months ended June 30, 2020 and 2019:

Declaration Date	Dividend per Share
February 27, 2020	$	0.340
May 28, 2020	0.200
	$	0.540
February 27, 2019	$	0.340
May 30, 2019	0.340
Total	$	0.680

Changes in Accumulated Other Comprehensive Income

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the six months ended June 30, 2020 and 2019 ($ in thousands):

	Accumulated Other Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests		Total Accumulated Other Comprehensive Income (Loss)
December 31, 2019	$	4,218	$	477	$	4,695
Other comprehensive income (loss)	(46,530)		(5,354)		(51,884)
Exchange of noncontrolling interest for common stock	(4,915)		4,915		—
Rebalancing of ownership percentage between Company and Operating Partnership	2,147		(2,147)		—
June 30, 2020	$	(45,080)	$	(2,109)	$	(47,189)

	Accumulated Other Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests		Total Accumulated Other Comprehensive Income (Loss)
December 31, 2018	$	(4,649)	$	(588)	$	(5,237)
Other comprehensive income (loss)	16,738		2,044		18,782
Exchange of noncontrolling interest for common stock	65		(65)		—
Rebalancing of ownership percentage between Company and Operating Partnership	17		(17)		—
June 30, 2019	$	12,171	$	1,374	$	13,545

50

12. NONCONTROLLING INTERESTS

There are two main types of noncontrolling interest reflected in the Company’s consolidated financial statements (i) noncontrolling interest in the operating partnership and (ii) noncontrolling interest in consolidated joint ventures.

Noncontrolling Interest in the Operating Partnership

As more fully described in Note 1, certain of the predecessor equity owners continue to own interests in the Operating Partnership as modified by the IPO Transactions. These interests were subsequently further modified by the REIT Structuring Transactions (also described in Note 1). These interests, along with the Class B shares held by these investors, are exchangeable for Class A shares of the Company. The roll-forward of the Operating Partnership’s LP Units follow the Class B common stock of the Company as disclosed in the consolidated statements of changes in equity.

Pursuant to ASC 810, Consolidation, on the accounting and reporting for noncontrolling interests and changes in ownership interests of a subsidiary, changes in a parent’s ownership interest (and transactions with noncontrolling interest unitholders in the subsidiary), while the parent retains its controlling interest in its subsidiary, should be accounted for as equity transactions. The carrying amount of the noncontrolling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. Accordingly, as a result of Continuing LCFH Limited Partners exchanges which caused changes in ownership percentages between the Company’s Class A shareholders and the noncontrolling interests in the Operating Partnership that occurred during the six months ended June 30, 2020, the Company has decreased noncontrolling interests in the Operating Partnership and accumulated other comprehensive income and increased additional paid-in capital in the Company’s shareholders’ equity by $1.2 million as of June 30, 2020.

Distributions to Noncontrolling Interest in the Operating Partnership

Notwithstanding the foregoing, subject to any restrictions in applicable debt financing agreements and available liquidity as determined by the board of directors of each of Series REIT of LCFH and Series TRS of LCFH, each Series must use commercially reasonable efforts to make quarterly distributions to each of its partners (including the Company) at least equal to such partner’s “Quarterly Estimated Tax Amount,” which shall be computed (as more fully described in LCFH’s Third Amended and Restated LLLP Agreement) for each partner as the product of (x) the U.S. federal taxable income (or alternative minimum taxable income, if higher) allocated by such Series to such partner in respect of the Series REIT LP Units and Series TRS LP Units held by such partner and (y) the highest marginal blended U.S. federal, state and local income tax rate (or alternative minimum taxable rate, as applicable) applicable to an individual residing in New York, NY, taking into account, for U.S. federal income tax purposes, the deductibility of state and local taxes; provided that Series TRS of LCFH may take into account, in determining the amount of tax distributions to holders of Series TRS LP Units, the amount of any distributions each such holder received from Series REIT of LCFH in excess of tax distributions. In addition, to the extent the Company requires an additional distribution from the Series of LCFH in excess of its quarterly tax distribution in order to pay its quarterly cash dividend, the Series of LCFH will be required to make a corresponding distribution of cash to each of their partners (other than the Company) on a pro-rata basis.

Allocation of Income and Loss

Income and losses and comprehensive income are allocated among the partners in a manner to reflect as closely as possible the amount each partner would be distributed under the Third Amended and Restated LLLP Agreement of LCFH upon liquidation of the Operating Partnership’s assets.

Noncontrolling Interest in Consolidated Joint Ventures

As of June 30, 2020, the Company consolidates five ventures in which there are other noncontrolling investors, which own between 10% - 29.4% of such ventures. These ventures hold investments in a 40-building student housing portfolio in Isla Vista, CA with a book value of $82.1 million, 11 office buildings in Richmond, VA with a book value of $72.4 million, a single-tenant office building in Ewing, NJ with a book value of $26.3 million, an industrial building in Lithia Springs, GA with an aggregate book value of $23.3 million and an apartment complex in Miami, FL with a book value of $37.3 million. The Company makes distributions and allocates income from these ventures to the noncontrolling interests in accordance with the terms of the respective governing agreements.

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13. EARNINGS PER SHARE

The Company’s net income (loss) and weighted average shares outstanding for the three and six months ended June 30, 2020 and 2019 consist of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands except share amounts)	2020		2019		2020		2019
Basic Net income (loss) available for Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Diluted Net income (loss) available for Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Weighted average shares outstanding
Basic	106,809,987		105,511,385		106,569,892		104,888,925
Diluted	106,809,987		105,892,420		106,569,892		105,742,589

The calculation of basic and diluted net income (loss) per share amounts for the three and six months ended June 30, 2020 and 2019 consist of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands except share amounts)	2020		2019		2020(1)		2019(1)
Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Denominator:
Weighted average number of shares of Class A common stock outstanding	106,809,987		105,511,385		106,569,892		104,888,925
Basic net income (loss) per share of Class A common stock	$	(0.04)	$	0.31	$	(0.19)	$	0.52
Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Add (deduct) - dilutive effect of:
Amounts attributable to operating partnership’s share of Ladder Capital Corp net income (loss)(2)	—		—		—		—
Additional corporate tax (expense) benefit(2)	—		—		—		—
Diluted net income (loss) attributable to Class A common shareholders	(4,189)		32,244		(19,918)		54,419
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	106,809,987		105,511,385		106,569,892		104,888,925
Add - dilutive effect of:
Shares issuable relating to converted Class B common shareholders(3)	—		—		—		—
Incremental shares of unvested Class A restricted stock(3)	—		381,035		—		853,664
Incremental shares of unvested stock options	—		—		—		—
Diluted weighted average number of shares of Class A common stock outstanding	106,809,987		105,892,420		106,569,892		105,742,589
Diluted net income (loss) per share of Class A common stock	$	(0.04)	$	0.30	$	(0.19)	$	0.51

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(1)For three and six months ended June 30, 2020 and 2019, shares issuable relating to converted Class B common shareholders are excluded from the calculation of diluted EPS as the inclusion of such potential common shares in the calculation would be anti-dilutive.

(2)The Company is using the as-if converted method for the Class B common shareholders while adjusting for additional corporate income tax expense (benefit) for the described net income (loss) add-back.

(3)The Company is using the treasury stock method.

The shares of Class B common stock do not share in the earnings of Ladder Capital Corp and are, therefore, not participating securities. Accordingly, basic and diluted net income (loss) per share of Class B common stock has not been presented, although the assumed conversion of Class B common stock has been included in the presented diluted net income (loss) per share of Class A common stock. 

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14. STOCK BASED AND OTHER COMPENSATION PLANS

The following table summarizes the impact on the consolidated statement of operations of the various stock based compensation plans described in Note 14, Stock Based and Other Compensation Plans included within the Company’s Annual Report ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Stock Based Compensation Expense	$	2,712	$	3,469	$	16,738	$	14,761
Phantom Equity Investment Plan	561		(98)		(1,577)		704
Stock Options Exercised	—		—		270		—
Bonus Expense	—		7,717		(30)		14,501
Total	$	3,273	$	11,088	$	15,401	$	29,966

Summary of Stock and Shares/Options Nonvested/Outstanding

A summary of the grants is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares/Options	Weighted Average Fair Value Per Share
Grants - Class A Common Stock	—	$	—	4,568	$	16.42	1,466,337	$	18.72	1,545,569	$	17.56
Grants - Class A Common Stock dividends	—	—		—	—		—	—		11,113	16.61
Stock Options	—	—		—	—		—	—		12,073	—

The table below presents the number of unvested shares and outstanding stock options at June 30, 2020 and changes during 2020 of the Class A Common stock and Stock Options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

	Restricted Stock	Stock Options
Nonvested/Outstanding at December 31, 2019	1,436,683	994,208
Granted	1,466,337	—
Exercised		(83,845)
Vested	(1,209,771)
Forfeited	(24,089)	—
Expired		—
Nonvested/Outstanding at June 30, 2020	1,669,160	910,363
Exercisable at June 30, 2020		910,363

At June 30, 2020 there was $21.0 million of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 26.8 months, with a weighted-average remaining vesting period of 32 months.

2014 Omnibus Incentive Plan

In connection with the IPO Transactions, the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) was adopted by the board of directors on February 11, 2014, and provides certain members of management, employees and directors of the Company or its affiliates with additional incentives including grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards.

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Annual Incentive Awards Granted in 2020 with Respect to 2019 Performance

For 2019 performance, certain employees received stock-based incentive equity. Fair value for all restricted and unrestricted stock grants was calculated using the closing stock price on the grant date. Compensation expense for unrestricted stock grants will be expensed immediately. The Company has elected to recognize the compensation expense related to the time-based vesting of the annual restricted stock awards for the entire award on a straight-line basis over the requisite service period for the entire award. Restricted stock subject to performance criteria is eligible to vest in three equal installments upon the compensation committee’s confirmation that the Company achieves a return on equity, based on core earnings divided by the Company’s average book value of equity, equal to or greater than 8% for such year (the “Performance Target”) for the years ended December 31, 2020, 2021 and 2022, respectively. If the Company misses the Performance Target during either the first or second calendar year but meets the Performance Target for a subsequent year during the three year performance period and the Company’s return on equity for such subsequent year and any years for which it missed its Performance Target equals or exceeds the compounded return on equity of 8%, based on core earnings divided by the Company’s average book value of equity, the performance-vesting restricted stock which failed to vest because the Company previously missed its Performance Target will vest subject to continued employment on the applicable vesting date (the “Catch-Up Provision”). Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved. In view of the adverse impacts of COVID-19 on the Company’s operations and investments and the resulting intensified corporate focus on defensive actions, including maintaining high levels of unrestricted cash liquidity and refinancing debt with more expensive non-mark-to-market funding sources, the Company is no longer classifying the 2020 Performance Target as probable as of June 30, 2020 and has reversed $1.0 million of previous compensation expense relating to grants of restricted stock with a December 2020 performance hurdle as their last vesting date (not available to take advantage of the Catch-Up Provision). However, recognizing that Ladder’s employees took these actions that, while in the best interests of the Company and its shareholders, would not produce earnings consistent with the Performance Target in their deferred compensation arrangements, on May 27, 2020, the compensation committee of the board of directors used its discretion to waive the Performance Target for shares eligible to vest based on the Company’s performance in 2020 and 2021, subject to continued employment on the applicable vesting dates. The Company recorded $0.1 million of incremental compensation cost during the three and six months ended June 30, 2020 as a result of this modification. There are currently 48 Ladder employees and one consultant eligible for such waiver.

On February 18, 2020, in connection with 2019 compensation, annual stock and restricted stock awards were granted to management grantees, other than Ms. Porcella, with an aggregate fair value of $12.5 million which represents 667,201 shares of restricted Class A common stock. The grant to Ms. Porcella is subject to the same time-based and performance-based vesting described below for non-management grantees and her shares are included in that total. The grant to Mr. Harris, and 50% of the grants to Mr. Fox, Ms. McCormack and Mr. Perelman, were unrestricted. The other 50% of incentive equity granted to Mr. Fox, Ms. McCormack and Mr. Perelman is restricted stock subject to performance criteria as described above.

On February 18, 2020, in connection with 2019 compensation, stock awards were granted to Ms. Porcella and non-management employees (“Non-Management Grantees”) with an aggregate value of $14.5 million which represents 775,100 shares of mostly restricted Class A common stock. Fifty percent of most stock awards is subject to time-based vesting criteria, and the remaining 50% of these stock awards is subject to attainment of the Performance Target for the applicable years. The time-vesting restricted stock will vest in three installments on February 18 of each of 2021, 2022 and 2023 subject to continued employment on the applicable vesting dates. The performance-vesting restricted stock will vest in three equal installments upon the compensation committee’s confirmation that the Company achieves the Performance Target for the years ended December 31, 2020, 2021 and 2022, respectively. The Catch-Up Provision applies to the performance vesting portion of this award. The compensation expense related to the performance-based restricted stock granted on February 18, 2020 shall be recognized 1/3 for the period February 18, 2020 through February 18, 2021, 1/3 for the period February 19, 2021 through February 18, 2022 and 1/3 for the period February 19, 2022 through February 18, 2023.

In the event Ms. Porcella or a Non-Management Grantee is terminated by the Company without cause within six months of certain changes in control, all unvested time shares shall vest on the termination date and all unvested performance shares shall remain outstanding and be eligible to vest (and be forfeited) in accordance with the performance conditions.

55

Upon a change in control (as defined in the respective award agreements), restricted stock awards to Mr. Fox, Ms. McCormack and Mr. Perelman will become fully vested if (1) such management grantee continues to be employed through the closing of the change in control or (2) after the signing of definitive documentation related to the change in control, but prior to its closing, such management grantee’s employment is terminated without cause or due to death or disability or the management grantee resigns for Good Reason, as described in the Company’s definitive proxy statement filed with the SEC on April 28, 2020. The compensation committee retains the right, in its sole discretion, to provide for the accelerated vesting (in whole or in part) of the restricted stock and option awards granted.

2020 Restricted Stock Awards

On February 18, 2020, certain members of the board of directors each received Annual Restricted Stock Awards with a grant date fair value of $0.4 million, representing 24,036 shares of restricted Class A common stock, which will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense related to the time-based vesting criteria of the award shall be recognized on a straight-line basis over the one year vesting period. On March 26, 2020, 5,803 shares of restricted Class A common stock were forfeited when a member resigned from the board of directors.

Bonus Payments

On February 6, 2020, the board of directors of Ladder Capital Corp approved the 2019 bonus payments to employees, including officers, totaling $55.2 million, which included $27.0 million of equity based compensation. The bonuses were accrued for as of December 31, 2019 and paid to employees in full on February 14, 2020. On February 7, 2019, the board of directors of Ladder Capital Corp approved the 2018 bonus payments to employees, including officers, totaling $61.4 million, which included $26.6 million of equity based compensation. The bonuses were accrued for as of December 31, 2018 and paid to employees in full on February 15, 2019. During the three and six months ended June 30, 2020, the Company recorded no compensation expense related to bonuses due to the significant market disruption caused by the COVID-19 pandemic and the substantial economic uncertainty present in the commercial real estate market and overall economy. During the three and six months ended June 30, 2019, the Company recorded compensation expense of $7.7 million and $14.5 million, respectively, related to bonuses.

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15. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is based upon internal models, using 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.

Fair Value Summary Table

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2020 and December 31, 2019 are as follows ($ in thousands):

June 30, 2020

									Weighted Average
	Outstanding Face Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	1,496,090		$	1,495,892	$	1,447,338	Internal model, third-party inputs	1.57	%	2.27
CMBS interest-only(1)	1,535,739		(2)	25,026		25,510		Internal model, third-party inputs	2.83	%	2.34
GNMA interest-only(3)	93,464		(2)	1,335		1,379		Internal model, third-party inputs	4.21	%	3.18
Agency securities(1)	610			619		636		Internal model, third-party inputs	1.68	%	1.56
GNMA permanent securities(1)	30,853			31,006		31,870		Internal model, third-party inputs	3.50	%	2.41
Provision for current expected credit reserves	N/A			(19)		(19)		(5)	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	2,971,622			2,955,084		2,928,796		Discounted Cash Flow(4)	6.82	%	1.22
Provision for current expected credit reserves	N/A			(49,102)		(49,102)		(5)	N/A		N/A
Mortgage loan receivables held for sale	86,456			85,977		87,960		Internal model, third-party inputs(6)	3.94	%	9.70
FHLB stock(7)	61,619			61,619		61,619		(7)	4.00	%	N/A
Nonhedge derivatives(1)(8)	89,900			N/A		380		Counterparty quotations	N/A		0.25
Liabilities:
Repurchase agreements - short-term	1,217,013			1,217,013		1,217,013		Discounted Cash Flow(9)	2.64	%	0.22
Repurchase agreements - long-term	78,016			78,016		78,016		Discounted Cash Flow(10)	1.56	%	1.27
Revolving credit facility	266,430			266,430		266,430		Discounted Cash Flow(9)	3.00	%	0.05
Mortgage loan financing	800,952			805,431		828,693		Discounted Cash Flow(10)	4.97	%	4.88
Secured financing facility	188,687			188,687		188,687		Discounted Cash Flow(9)	10.75	%	2.85
CLO debt	299,605			299,605		299,605		Discounted Cash Flow(9)	5.50	%	3.88
Borrowings from the FHLB	360,790			360,790		362,559		Discounted Cash Flow	1.39	%	2.67
Senior unsecured notes	1,752,817			1,737,542		1,025,236		Internal model, third-party inputs	4.97	%	4.16
Nonhedge derivatives(1)(8)	69,571			N/A		—		Counterparty quotations	N/A		0.86

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(5)Fair value is estimated to equal par value.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)Fair value for repurchase agreement liabilities - short term borrowings under the secured financing facility and borrowings under the revolving credit facility 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. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

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(10)For repurchase agreements - long term, mortgage loan financing, and CLO debt the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

December 31, 2019  

									Weighted Average
	Outstanding Face Amount			Amortized Cost Basis		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	1,640,597		$	1,640,905	$	1,644,322	Internal model, third-party inputs	3.08	%	2.41
CMBS interest-only(1)	1,559,160		(2)	28,553		29,146		Internal model, third-party inputs	3.04	%	2.53
GNMA interest-only(3)	109,783		(2)	1,982		1,851		Internal model, third-party inputs	4.59	%	2.77
Agency securities(1)	629			640		637		Internal model, third-party inputs	1.73	%	1.83
GNMA permanent securities(1)	31,461			31,681		32,369		Internal model, third-party inputs	3.17	%	1.93
Equity securities(3)	N/A			12,848		12,980		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	3,277,596			3,257,036		3,273,219		Discounted Cash Flow(4)	6.94	%	1.43
Provision for loan losses	N/A			(20,500)		(20,500)		(5)	N/A		N/A
Mortgage loan receivables held for sale	122,748			122,325		124,989		Internal model, third-party inputs(6)	4.20	%	9.99
FHLB stock(7)	61,619			61,619		61,619		(7)	4.75	%	N/A
Nonhedge derivatives(1)(8)	340,200			N/A		693		Counterparty quotations	N/A		0.25
Liabilities:
Repurchase agreements - short-term	1,781,253			1,781,253		1,781,253		Discounted Cash Flow(9)	2.50	%	0.19
Repurchase agreements - long-term	34,681			34,681		34,681		Discounted Cash Flow(10)	2.81	%	1.41
Mortgage loan financing	807,854			812,606		838,766		Discounted Cash Flow(10)	4.91	%	5.65
Borrowings from the FHLB	1,073,500			1,073,500		1,080,354		Discounted Cash Flow	2.33	%	2.08
Senior unsecured notes	1,166,201			1,157,833		1,208,860		Internal model, third-party inputs	5.39	%	3.28
Nonhedge derivatives(1)(8)	69,571			N/A		—		Counterparty quotations	N/A		0.36

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow.

(5)Fair value is estimated to equal par value.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)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. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term and mortgage loan financing, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

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The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	1,484,514		$	—	$	—	$	1,436,227	$	1,436,227
CMBS interest-only(1)	1,525,120		(2)	—		—		24,772		24,772
GNMA interest-only(3)	93,464		(2)	—		—		1,379		1,379
Agency securities(1)	610			—		—		636		636
GNMA permanent securities(1)	30,853			—		—		31,870		31,870
Nonhedge derivatives(4)	89,900			—		380		—		380
				$	—	$	380	$	1,494,884	$	1,495,264
Liabilities:
Nonhedge derivatives(4)	69,571			$	—	$	—	$	—	$	—
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	2,971,622		$	—	$	—	$	2,928,796	$	2,928,796
Provision for current expected credit losses	N/A			—		—		(49,102)		(49,102)
Mortgage loan receivable held for sale	86,456			—		—		87,960		87,960
CMBS(5)	11,576			—		—		11,111		11,111
CMBS interest-only(5)	10,619		(2)	—		—		738		738
Provision for current expected credit losses	N/A							(19)		(19)
FHLB stock	61,619			—		—		61,619		61,619
				$	—	$	—	$	3,041,103	$	3,041,103
Liabilities:
Repurchase agreements - short-term	1,217,013			$	—	$	—	$	1,217,013	$	1,217,013
Repurchase agreements - long-term	78,016			—		—		78,016		78,016
Revolving credit facility	266,430			—		—		266,430		266,430
Mortgage loan financing	800,952			—		—		828,693		828,693
Secured financing facility	188,687			—		—		188,687		188,687
CLO debt	299,605			—		—		299,605		299,605
Borrowings from the FHLB	360,790			—		—		362,559		362,559
Senior unsecured notes	1,752,817			—		—		1,025,236		1,025,236
				$	—	$	—	$	4,266,239	$	4,266,239

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, which are classified as held-to-maturity and reported at amortized cost.

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December 31, 2019

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	1,628,476		$	—	$	—	$	1,632,714	$	1,632,714
CMBS interest-only(1)	1,548,061		(2)	—		—		28,342		28,342
GNMA interest-only(3)	109,783		(2)	—		—		1,851		1,851
Agency securities(1)	629			—		—		637		637
GNMA permanent securities(1)	31,461			—		—		32,369		32,369
Equity securities	N/A			12,980		—		—		12,980
Nonhedge derivatives(4)	340,200			—		693		—		693
				$	12,980	$	693	$	1,695,913	$	1,709,586
Liabilities:
Nonhedge derivatives(4)	$	69,571		$	—	$	—	$	—	$	—
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	3,277,597		$	—	$	—	$	3,273,219	$	3,273,219
Provision for loan losses	N/A			—		—		(20,500)		(20,500)
Mortgage loan receivables held for sale	122,748			—		—		124,989		124,989
CMBS(5)	12,121			—		—		11,608		11,608
CMBS interest-only(5)	11,099		(2)	—		—		804		804
FHLB stock	61,619			—		—		61,619		61,619
				$	—	$	—	$	3,451,739	$	3,451,739
Liabilities:
Repurchase agreements - short-term	1,781,253			$	—	$	—	$	1,781,253	$	1,781,253
Repurchase agreements - long-term	34,681			—		—		34,681		34,681
Mortgage loan financing	807,854			—		—		838,766		838,766
Borrowings from the FHLB	1,073,500			—		—		1,080,354		1,080,354
Senior unsecured notes	1,166,201			—		—		1,208,860		1,208,860
				$	—	$	—	$	4,943,914	$	4,943,914

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, which are classified as held-to-maturity and reported at amortized cost.

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The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the six months ended June 30, 2020 and December 31, 2019 ($ in thousands):

	Six Months Ended June 30,
Level 3	2020		2019
Balance at January 1,	$	1,695,913	$	1,385,957
Transfer from level 2	—		—
Purchases	437,536		847,318
Sales	(517,535)		(379,961)
Paydowns/maturities	(52,271)		(110,400)
Amortization of premium/discount	(4,278)		(6,267)
Unrealized gain/(loss)	(51,709)		18,804
Realized gain/(loss) on sale(1)	(12,773)		7,242
Balance at June 30,	$	1,494,883	$	1,762,693

(1)Includes realized losses on securities recorded as other than temporary impairments.

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

June 30, 2020

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	1,436,227		Discounted cash flow	Yield (4)	1.42	%	3.54	%	10	%
					Duration (years)(5)	0.00		2.72		6.26
CMBS interest-only(1)	24,772		(2)	Discounted cash flow	Yield (4)	—	%	2.33	%	10	%
					Duration (years)(5)	0.10		2.34		3.28
					Prepayment speed (CPY)(5)	100.00		100.00		100.00
GNMA interest-only(3)	1,379		(2)	Discounted cash flow	Yield (4)	—	%	3.26	%	10	%
					Duration (years)(5)	0.00		2.45		6.57
					Prepayment speed (CPJ)(5)	5.00		15.42		35.00
Agency securities(1)	636			Discounted cash flow	Yield (4)	—	%	0.32	%	1.72	%
					Duration (years)(5)	0.00		2.02		2.48
GNMA permanent securities(1)	31,870			Discounted cash flow	Yield (4)	1.42	%	2.44	%	6.44	%
					Duration (years)(5)	1.15		9.89		14.81
Total	$	1,494,884

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

(5)Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question.

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December 31, 2019

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	1,632,714		Discounted cash flow	Yield (3)	—	%	3.11	%	19.92	%
					Duration (years)(4)	0.00		1.63		6.87
CMBS interest-only(1)	28,342		(2)	Discounted cash flow	Yield (3)	1.57	%	3.93	%	7.62	%
					Duration (years)(4)	0.26		2.47		3.51
					Prepayment speed (CPY)(4)	100.00		97.24		100.00
GNMA interest-only(3)	1,851		(2)	Discounted cash flow	Yield (4)	(4.82)	%	15.13	%	44.5	%
					Duration (years)(5)	0.85		2.90		13.69
					Prepayment speed (CPJ)(5)	5.00		12.36		35.00
Agency securities(1)	637			Discounted cash flow	Yield (4)	—	%	1.7	%	2.16	%
					Duration (years)(5)	0.00		2.30		2.92
GNMA permanent securities(1)	32,369			Discounted cash flow	Yield (4)	56.56	%	166.79	%	410	%
					Duration (years)(5)	2.60		3.61		6.49
Total	$	1,695,913

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

(5)Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-down of assets value due to impairment. Refer to Note 3, Mortgage Loan Receivables and Note 5, Real Estate and Related Lease Intangibles, Net for disclosure of level 3 inputs.

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16. INCOME TAXES

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2015 (the REIT Election”). As such, the Company’s income is generally not subject to U.S. federal, state and local corporate income taxes other than as described below.

Certain of the Company’s subsidiaries have elected to be treated as TRSs. TRSs permit the Company to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, the Company will continue to maintain its qualification as a REIT. The Company’s TRSs are not consolidated for U.S. federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in TRSs. Current income tax expense (benefit) was $1.6 million and $(15.0) million for the three and six months ended June 30, 2020, respectively. Current income tax expense (benefit) was $(1.3) million and $(7.4) million for the three and six months ended June 30, 2019, respectively.

As of June 30, 2020 and December 31, 2019, the Company’s net deferred tax assets (liabilities) were $(12.0) million and $(2.1) million, respectively, and are included in other assets (other liabilities) in the Company’s consolidated balance sheets. Deferred income tax expense (benefit) included within the provision for income taxes was $(2.1) million and $9.9 million for the three and six months ended June 30, 2020, respectively. Deferred income tax expense (benefit) included within the provision for income taxes was $3.5 million and $6.7 million for the three and six months ended June 30, 2019, respectively. The Company’s net deferred tax liability is comprised of deferred tax assets and deferred tax liabilities. The Company believes it is more likely than not that the deferred tax assets (aside from the exception noted below) will be realized in the future. Realization of the deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of June 30, 2020, the Company has a deferred tax asset of $9.9 million relating to capital losses which it may only use to offset capital gains. These tax attributes will begin to expire if unused in 2021. As the realization of these assets are not more likely than not before their expiration, the Company provided a full valuation allowance against this deferred tax asset. Additionally, as of June 30, 2020, the Company had a deferred tax asset of $1.1 million related to Code Section 163(j) interest expense limitation. As the Company is uncertain if this asset will be realized in the future, the Company provided a full valuation allowance against this deferred tax asset.

The Company has historically calculated its tax provision during quarterly reporting periods by applying an annual effective tax rate (“AETR”) for the full year to the income for the reporting period; however, for the three and six months ended June 30, 2020, the Company used a discrete effective tax rate method to calculate taxes for the three and six months ended June 30, 2020. Based on the current projections of income, the Company is unable to determine a reliable AETR. As such, a discrete-period approach was used for the three and six months ended June 30, 2020.

The Company’s tax returns are subject to audit by taxing authorities. Generally, as of June 30, 2020, the tax years 2016-2019 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. The IRS recently completed its audit of the 2014 tax year and did not recommend any changes to the Company’s tax return. The Company is currently under New York City audit for tax years 2012-2014. Several of the Company’s subsidiary entities are under New York State audit for tax years 2015-2018. The Company does not expect these audits to result in any material changes to the Company’s financial position. The Company does not expect tax expense to have an impact on either short, or long-term liquidity or capital needs.

The Company acquired certain corporate entities at the time of its IPO. The related acquisition agreements provided an indemnification to the Company by each transferor of any amounts due for any potential tax liabilities owed by these entities for tax years prior to their acquisition. In connection with a New York State audit settlement, the Company collected $2.5 million of indemnities under the acquisition agreements during 2019.

Under U.S. GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

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Tax Receivable Agreement

Upon consummation of the IPO, the Company entered into a Tax Receivable Agreement with the Continuing LCFH Limited Partners. Under the Tax Receivable Agreement the Company generally is required to pay to those Continuing LCFH Limited Partners that exchange their interests in LCFH and Class B shares of the Company for Class A shares of the Company, 85% of the applicable cash savings, if any, in U.S. federal, state and local income tax that the Company realizes (or is deemed to realize in certain circumstances) as a result of (i) the increase in tax basis in its proportionate share of LCFH’s assets that is attributable to the Company as a result of the exchanges and (ii) payments under the Tax Receivable Agreement, including any tax benefits related to imputed interest deemed to be paid by the Company as a result of such agreement. The Company may make future payments under the Tax Receivable Agreement if the tax benefits are realized.  The Company would then benefit from the remaining 15% of cash savings in income tax that we realize. For purposes of the Tax Receivable Agreement, cash savings in income tax will be computed by comparing our actual income tax liability to the amount of such taxes that we 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 exchanges and had we not entered into the Tax Receivable Agreement. As of June 30, 2020 and December 31, 2019, pursuant to the Tax Receivable Agreement, the Company recorded a liability of $1.6 million, included in other liabilities in the consolidated balance sheets for Continuing LCFH Limited Partners.

17. RELATED PARTY TRANSACTIONS

Ladder Select Bond Fund

On October 18, 2016, Ladder Capital Asset Management LLC (“LCAM”), a subsidiary of the Company and a registered investment adviser, launched the Ladder Select Bond Fund (the “Fund”), a mutual fund. In addition, on October 18, 2016, the Company made a $10.0 million investment in the Fund, which was included in other assets in the consolidated balance sheets. On June 22, 2020, the Fund was liquidated and LCAM deregistered with the Securities and Exchange Commission (“SEC”). The Company recognized a realized loss of $0.7 million upon liquidation of the Fund which is included in fee and other income on the consolidated statements of income.

Commercial Real Estate Loans

From time to time, the Company may provide commercial real estate loans to entities affiliated with certain of our directors, officers or large shareholders who are, as part of their ordinary course of business, commercial real estate investors. These loans are made in the ordinary course of the Company’s business on the same terms and conditions as would be offered to any other borrower of similar type and standing on a similar property.

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18. COMMITMENTS AND CONTINGENCIES

Leases

The Company adopted ASC Topic 842 on January 1, 2019. The primary impact of applying ASC Topic 842 was the initial recognition of a $3.5 million lease liability and a $3.3 million right of use asset (including previously accrued straight line rent) on the Company’s consolidated financial statements, for leases classified as operating leases under ASC Topic 840, primarily for the Company’s corporate headquarters and other identified leases. As of June 30, 2020, the Company had a $1.9 million lease liability and a $1.9 million right-of-use asset on its consolidated balance sheets. Tenant reimbursements, which consist of real estate taxes and other municipal charges paid by us which were reimbursable by our tenants pursuant to the terms of triple-net lease agreements, were $1.1 million and $2.3 million for the three and six months ended June 30, 2020, respectively, and are included in operating lease income on the Company’s consolidated statements of income. Tenant reimbursements were $1.7 million and $3.3 million for the three and six months ended June 30, 2019, respectively, and are included in operating lease income on the Company’s consolidated statements of income.

Investments in Unconsolidated Joint Ventures

We have made investments in various unconsolidated joint ventures. See Note 6, Investment in and Advances to Unconsolidated Joint Ventures for further details of our unconsolidated investments. Our maximum exposure to loss from these investments is limited to the carrying value of our investments.

Unfunded Loan Commitments

As of June 30, 2020, the Company’s off-balance sheet arrangements consisted of $249.2 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing over the next three years at rates to be determined at the time of funding, 62% of which additional funds relate to the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income. As of December 31, 2019, the Company’s off-balance sheet arrangements consisted of $286.5 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing. Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. The COVID-19 pandemic has impacted the progress of work generally and, depending on specific property locations, the progress of capital expenditures, construction, and leasing, which have been delayed and/or slower paced than originally anticipated. The progress of those particular projects located in States or local municipalities with continuing restrictions on such activities is anticipated to remain slower to complete than otherwise expected, and the pace of future funding relating to these capital needs has been, and may continue to be, commensurately slower. These commitments are not reflected on the consolidated balance sheets. 

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19. SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the 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 is composed of all of the Company’s activities related to commercial real estate securities, which include investments in CMBS, U.S. Agency Securities, corporate bonds and equity securities. The real estate segment includes net leased properties, office buildings, a student housing portfolio, industrial buildings, a shopping center and condominium units. Corporate/other includes the Company’s investments in joint ventures, other asset management activities and operating expenses.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Three months ended June 30, 2020
Interest income	$	53,641	$	8,177	$	2	$	276	$	62,096
Interest expense	(11,732)		(7,795)		(9,758)		(39,140)		(68,425)
Net interest income (expense)	41,909		382		(9,756)		(38,864)		(6,329)
(Provision) benefit for loan losses	726		3		—		—		729
Net interest income (expense) after provision for loan losses	42,635		385		(9,756)		(38,864)		(5,600)
Operating lease income	—		—		23,773		—		23,773
Sale of loans, net	(744)		—		—		—		(744)
Realized gain (loss) on securities	—		(14,798)		—		—		(14,798)
Unrealized gain (loss) on equity securities	—		401		—		—		401
Unrealized gain (loss) on Agency interest-only securities	—		98		—		—		98
Realized gain on sale of real estate, net	—		—		(1)		—		(1)
Fee and other income	2,429		2		—		1,074		3,505
Net result from derivative transactions	(588)		(225)		—		—		(813)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		471		—		471
Gain (loss) on extinguishment of debt	—		—		—		19,017		19,017
Total other income (loss)	1,097		(14,522)		24,243		20,091		30,909
Salaries and employee benefits	—		—		—		(7,001)		(7,001)
Operating expenses(3)	—		—		—		(6,224)		(6,224)
Real estate operating expenses	—		—		(6,034)		—		(6,034)
Fee expense	(1,474)		(61)		(442)		—		(1,977)
Depreciation and amortization	—		—		(9,791)		(25)		(9,816)
Total costs and expenses	(1,474)		(61)		(16,267)		(13,250)		(31,052)
Income tax (expense) benefit	—		—		—		550		550
Segment profit (loss)	$	42,258	$	(14,198)	$	(1,780)	$	(31,473)	$	(5,193)
Total assets as of June 30, 2020	$	2,991,959	$	1,506,713	$	1,091,129	$	1,019,749	$	6,609,550

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	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Three months ended June 30, 2019
Interest income	$	69,794	$	15,210	$	7	$	311	$	85,322
Interest expense	(14,224)		(4,130)		(9,091)		(24,924)		(52,369)
Net interest income (expense)	55,570		11,080		(9,084)		(24,613)		32,953
(Provision) benefit for loan losses	(300)		—		—		—		(300)
Net interest income (expense) after provision for loan losses	55,270		11,080		(9,084)		(24,613)		32,653
Operating lease income	—		—		27,780		—		27,780
Sale of loans, net	20,264		—		—		—		20,264
Realized gain (loss) on securities	—		4,464		—		—		4,464
Unrealized gain (loss) on equity securities	—		(990)		—		—		(990)
Unrealized gain (loss) on Agency interest-only securities	—		11		—		—		11
Realized gain on sale of real estate, net	—		—		(1,124)		—		(1,124)
Fee and other income	5,947		333		—		916		7,196
Net result from derivative transactions	(8,518)		(6,939)		—		—		(15,457)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		1,564		—		1,564
Total other income (loss)	17,693		(3,121)		28,220		916		43,708
Salaries and employee benefits	—		—		—		(14,907)		(14,907)
Operating expenses(3)	—		—		—		(6,012)		(6,012)
Real estate operating expenses	—		—		(6,032)		—		(6,032)
Fee expense	(1,058)		(87)		(38)		—		(1,183)
Depreciation and amortization	—		—		(9,910)		(25)		(9,935)
Total costs and expenses	(1,058)		(87)		(15,980)		(20,944)		(38,069)
Income tax (expense) benefit	—		—		—		(2,219)		(2,219)
Segment profit (loss)	$	71,905	$	7,872	$	3,156	$	(46,860)	$	36,073
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

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	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Six months ended June 30, 2020
Interest income	$	112,546	$	21,040	$	10	$	1,090	$	134,686
Interest expense	(16,602)		(14,554)		(19,993)		(68,678)		(119,827)
Net interest income (expense)	95,944		6,486		(19,983)		(67,588)		14,859
(Provision) benefit for loan losses	(25,855)		3		—		—		(25,852)
Net interest income (expense) after provision for loan losses	70,089		6,489		(19,983)		(67,588)		(10,993)
Operating lease income	—		—		50,101		—		50,101
Sale of loans, net	261		—		—		—		261
Realized gain (loss) on securities	—		(11,787)		—		—		(11,787)
Unrealized gain (loss) on equity securities	—		(132)		—		—		(132)
Unrealized gain (loss) on Agency interest-only securities	—		174		—		—		174
Realized gain on sale of real estate, net	—		—		10,528		—		10,528
Fee and other income	3,854		403		25		742		5,024
Net result from derivative transactions	(11,939)		(4,309)		—		—		(16,248)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		912		—		912
Gain (loss) on extinguishment of debt	—		—		—		21,077		21,077
Total other income (loss)	(7,824)		(15,651)		61,566		21,819		59,910
Salaries and employee benefits	—		—		—		(24,023)		(24,023)
Operating expenses(3)	—		—		—		(12,018)		(12,018)
Real estate operating expenses	—		—		(13,981)				(13,981)
Fee expense	(2,664)		(133)		(618)		—		(3,415)
Depreciation and amortization	—		—		(19,775)		(50)		(19,825)
Total costs and expenses	(2,664)		(133)		(34,374)		(36,091)		(73,262)
Income tax (expense) benefit	—		—		—		5,091		5,091
Segment profit (loss)	$	59,601	$	(9,295)	$	7,209	$	(76,769)	$	(19,254)
Total assets as of June 30, 2020	$	2,991,959	$	1,506,713	$	1,091,129	$	1,019,749	$	6,609,550

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	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Six months ended June 30, 2019
Interest income	$	142,947	$	28,329	$	15	$	498	$	171,789
Interest expense	(28,981)		(6,618)		(17,973)		(50,046)		(103,618)
Net interest income (expense)	113,966		21,711		(17,958)		(49,548)		68,171
(Provision) benefit for loan losses	(600)		—		—		—		(600)
Net interest income (expense) after provision for loan losses	113,366		21,711		(17,958)		(49,548)		67,571
Operating lease income	—		—		56,701		—		56,701
Sale of loans, net	27,342		—		—		—		27,342
Realized gain (loss) on securities	—		7,329		—		—		7,329
Unrealized gain (loss) on equity securities	—		1,088		—		—		1,088
Unrealized gain (loss) on Agency interest-only securities	—		22		—		—		22
Realized gain on sale of real estate, net	—		—		(1,119)		—		(1,119)
Impairment of real estate	—		—		(1,350)		—		(1,350)
Fee and other income	9,257		737		7		1,881		11,882
Net result from derivative transactions	(13,716)		(12,775)		—		—		(26,491)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		2,522		—		2,522
Gain (loss) on extinguishment of debt	—		—		(1,070)		—		(1,070)
Total other income (loss)	22,883		(3,599)		55,691		1,881		76,856
Salaries and employee benefits	—		—		—		(38,481)		(38,481)
Operating expenses(3)	—		—		—		(11,413)		(11,413)
Real estate operating expenses	—		—		(11,506)		—		(11,506)
Fee expense	(2,252)		(187)		(456)		—		(2,895)
Depreciation and amortization	—		—		(20,112)		(50)		(20,162)
Total costs and expenses	(2,252)		(187)		(32,074)		(49,944)		(84,457)
Income tax (expense) benefit	—		—		—		634		634
Segment profit (loss)	$	133,997	$	17,925	$	5,659	$	(96,977)	$	60,604
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

(1)Includes the Company’s investment in unconsolidated joint ventures that held real estate of $48.9 million and $48.4 million as of June 30, 2020 and December 31, 2019, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in unconsolidated joint ventures and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $61.6 million and $61.6 million as of June 30, 2020 and December 31, 2019, respectively, the Company’s deferred tax asset (liability) of $(12.0) million and $(2.1) million as of June 30, 2020 and December 31, 2019, respectively, and the Company’s senior unsecured notes of $1.7 billion and $1.2 billion as of June 30, 2020 and December 31, 2019, respectively.

(3)Includes $4.0 million and $7.1 million of professional fees for the three and six months ended June 30, 2020, respectively. Includes $3.6 million and $6.1 million of professional fees for the three and six months ended June 30, 2019, respectively.

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20. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the issuance date of the financial statements and determined that no additional disclosure is necessary.

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

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes of Ladder Capital Corp included within this report and the Annual Report. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” within this Quarterly Report and “Risk Factors” within the Annual Report for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results may differ materially from those contained in any forward-looking statements as a result of various factors, including but not limited to, those in “Risk Factors” set forth within the Annual Report.

References to “Ladder,” the “Company,” and “we,” “our” and “us” refer to Ladder Capital Corp, a Delaware corporation incorporated in 2013, and its consolidated subsidiaries. 

Ladder Capital Corp is the sole general partner of Ladder Capital Finance Holdings LLLP (“LCFH”) and, as a result of the serialization of LCFH on December 31, 2014, became the sole general partner of Series REIT of LCFH. LC TRS I LLC, a wholly-owned subsidiary of Series REIT of LCFH, is the general partner of Series TRS of LCFH. Ladder Capital Corp has a controlling interest in Series REIT of LCFH, and through such controlling interest, also has a controlling interest in Series TRS of LCFH. Ladder Capital Corp’s only business is to act as the sole general partner of LCFH and Series REIT of LCFH, and, as a result of the foregoing, Ladder Capital Corp directly and indirectly operates and controls all of the business and affairs of LCFH, and each Series thereof, and consolidates the financial results of LCFH, and each Series thereof, into Ladder Capital Corp’s consolidated financial statements.

Overview

We are an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. We originate and invest in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. Our investment activities include: (i) direct origination of commercial real estate first mortgage loans; (ii) investments in investment grade securities secured by first mortgage loans on commercial real estate; and (iii) investments in net leased and other commercial real estate equity. We believe that our in-house origination platform, ability to flexibly allocate capital among complementary product lines, credit-centric underwriting approach, access to diversified financing sources, and experienced management team position us well to deliver attractive returns on equity to our shareholders through economic and credit cycles.

Our businesses, including balance sheet lending, conduit lending, securities investments, and real estate investments, provide for a stable base of net interest and rental income. We have originated $25.8 billion of commercial real estate loans from our inception through June 30, 2020. During this timeframe, we also acquired $12.7 billion of predominantly investment grade-rated securities secured by first mortgage loans on commercial real estate and $1.8 billion of selected net leased and other real estate assets.

As part of our commercial mortgage lending operations, we originate conduit loans, which are first mortgage loans on stabilized, income producing commercial real estate properties that we intend to make available for sale in commercial mortgage-backed securities (“CMBS”) securitizations. From our inception in October 2008 through June 30, 2020, we originated $16.6 billion of conduit loans, $16.5 billion of which were sold into 68 CMBS securitizations, making us, by volume, the second largest non-bank contributor of loans to CMBS securitizations in the United States in such period. Our sales of loans into securitizations are generally accounted for as true sales, not financings, and we generally retain no ongoing interest in loans which we securitize unless we are required to do so as issuer pursuant to the risk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (the “Dodd-Frank Act”). The securitization of conduit loans enables us to reinvest our equity capital into new loan originations or allocate it to other investments.

As of June 30, 2020, we had $6.6 billion in total assets and $1.5 billion of total equity. Our assets included $3.0 billion of loans, $1.5 billion of securities, and $1.0 billion of real estate.

We maintain a diversified and flexible financing strategy supporting our investment strategy and overall business operations, including unsecured debt and significant committed term financing from leading financial institutions. Refer to “Our Financing Strategies” and “Liquidity and Capital Resources” for further information.

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Ladder was founded in October 2008 and we completed our IPO in February 2014. We are led by a disciplined and highly aligned management team. As of June 30, 2020, our management team and directors held interests in our Company comprising 10.7% of our total equity. On average, our management team members have 27 years of experience in the industry. Our management team includes Brian Harris, Chief Executive Officer; Pamela McCormack, President; Marc Fox, Chief Financial Officer; Robert Perelman, Head of Asset Management; and Kelly Porcella, Chief Administrative Officer & General Counsel. Kevin Moclair, Chief Accounting Officer, is an additional officer of Ladder. As of June 30, 2020, we employed 63 full-time industry professionals.

COVID-19 Impact on the Organization

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. As of the date of this filing, the majority of our employees continue to work remotely in compliance with state guidelines. We continue to actively manage the liquidity and operations of the Company in light of the market disruption and overall financial impact caused by the COVID-19 pandemic across most industries in the United States. In view of the uncertainty related to the severity and duration of the pandemic, its ultimate impact on our revenues, profitability and financial position is difficult to assess at this time. The Company has disclosed the current and potential impact of the COVID-19 global pandemic on our business throughout this Quarterly Report.

Recent Developments

None

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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 complementary business segments are 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 ($ in thousands):

	June 30, 2020				December 31, 2019
Loans
Balance sheet loans:
Balance sheet first mortgage loans	$	2,832,610	42.8	%	$	3,127,173	46.9	%
Other commercial real estate-related loans	122,474		1.9	%	129,863		1.9	%
Provision for current expected credit losses	(49,102)		(0.7)	%	(20,500)		(0.3)	%
Total balance sheet loans	2,905,982		44.0	%	3,236,536		48.5	%
Conduit first mortgage loans	85,977		1.3	%	122,325		1.8	%
Total loans	2,991,959		45.3	%	3,358,861		50.3	%
Securities
CMBS investments	1,472,848		22.3	%	1,673,468		25.3	%
U.S. Agency Securities investments	33,884		0.5	%	34,857		0.5	%
Equity securities	—		—	%	12,980		0.2	%
Provision for current expected credit losses	(19)		—	%	—		—	%
Total securities	1,506,713		22.8	%	1,721,305		26.0	%
Real Estate
Real estate and related lease intangibles, net	1,042,210		15.8	%	1,048,081		15.7	%
Total real estate	1,042,210		15.8	%	1,048,081		15.7	%
Other Investments
Investments in and advances to unconsolidated joint ventures	48,919		0.7	%	48,433		0.7	%
FHLB stock	61,619		0.9	%	61,619		0.9	%
Total other investments	110,538		1.6	%	110,052		1.6	%
Total investments	5,651,420		85.5	%	6,238,299		93.6	%
Cash, cash equivalents and restricted cash	874,004		13.2	%	355,746		5.3	%
Other assets	84,126		1.3	%	75,107		1.1	%
Total assets	$	6,609,550	100.0	%	$	6,669,152	100.0	%

While the unique nature of COVID-19 limits our normal visibility into expected underlying property operating results, we are in regular communication with our borrowers and are closely monitoring property performance. We expect our investments in loans and real estate in the hotels and retail sectors to be the most directly impacted by COVID-19. Loans on hotel and retail properties comprised approximately13.6% and 8.8%, respectively, of our loan portfolio at June 30, 2020. Hotel and retail properties comprised approximately 5.9% and 47.2%, respectively, of our real estate portfolio at June 30, 2020. The majority of the net leased properties in our real estate portfolio, which comprise the majority of the 47.2%, are necessity-based businesses and have remained open and stable during the COVID-19 pandemic.

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Loans

Balance Sheet First Mortgage Loans.  We originate and invest in balance sheet first mortgage loans secured by commercial real estate properties that are typically undergoing transition, including lease-up, sell-out, and renovation or repositioning. These mortgage loans are structured to fit the needs and business plans of the property owners, and generally have LIBOR based floating rates and terms (including extension options) ranging from one to five years. 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. Balance sheet first mortgage loans in excess of $50.0 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 although we also maintain the flexibility to contribute such loans into a collateralized loan obligation (“CLO”) or similar structure, sell participation interests or “b-notes” in our mortgage loans or sell such mortgage loans as whole loans. Our balance sheet first mortgage loans 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). As of June 30, 2020, we held a portfolio of 133 balance sheet first mortgage loans with an aggregate book value of $2.8 billion. 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 70.8% at June 30, 2020.

We continue to actively manage and monitor the credit and liquidity risk associated with the balance sheet first mortgage loan portfolio. Due to the nationwide restrictions placed on most businesses in response to the COVID-19 pandemic, significant cash flow disruptions are expected across the economy which will likely impact our borrowers and their ability to stay current with their debt obligations in the near term. We expect to use a variety of legal and structural options to manage that risk effectively, including through possible forbearance and default provisions, as is generally being considered throughout the credit lending industries.

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 that are generally held for investment. As of June 30, 2020, we held a portfolio of 24 other commercial real estate-related loans with an aggregate book value of $122.5 million. 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 67.2% at June 30, 2020.

Conduit First Mortgage Loans.  We also originate conduit loans, which are first mortgage loans that are secured by cash-flowing commercial real estate and are available for sale to securitizations. These first mortgage loans are typically structured with fixed interest rates and generally have five- to ten-year terms. Conduit first mortgage loans are originated, underwritten, approved and funded using the same comprehensive legal and underwriting approach, process and personnel used to originate our balance sheet first mortgage loans. 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 to CMBS trusts, we generally seek to maintain the flexibility to keep them on our balance sheet, sell participation interests or “b-notes” in such loans or sell the loans as whole loans. As of June 30, 2020, we held seven first mortgage loans that were available for contribution into a securitization with an aggregate book value of $86.0 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 61.5% at June 30, 2020. The Company holds these conduit loans in its taxable REIT subsidiary (“TRS”).

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The following charts set forth our total outstanding balance sheet first mortgage loans, other commercial real estate-related loans, mortgage loans transferred but not considered sold and conduit first mortgage loans as of June 30, 2020 and a breakdown of our loan portfolio by loan size and geographic location and asset type of the underlying real estate.

 

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Securities

CMBS Investments.  We invest in CMBS secured by first mortgage loans on commercial real estate and own predominantly 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. AAA-rated CMBS or U.S. Agency securities investments in excess of $76.0 million and all other investment grade CMBS or U.S. Agency securities investments in excess of $51.0 million, each in any single class of any single issuance, require the approval of our board of directors’ Risk and Underwriting Committee. The Risk and Underwriting Committee also must approve any investments in non-rated or sub-investment grade CMBS or U.S. Agency Securities in any single class of any single issuance in excess of the lesser of (x) $21,000,000 and (y) 10% of the total net asset value of the respective Ladder investment company.

As of June 30, 2020, the estimated fair value of our portfolio of CMBS investments totaled $1.5 billion in 126 CUSIPs ($11.7 million average investment per CUSIP). As of June 30, 2020, included in the $1.5 billion of CMBS securities are $11.8 million of CMBS securities designated as risk retention securities under the Dodd-Frank Act which are subject to transfer restrictions over the term of the securitization trust. As of that date, 99.8% of our CMBS investments were rated investment grade by Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc. or Fitch Ratings Inc., consisting of 81% AAA/Aaa-rated securities and 18.8% of other investment grade-rated securities, including 14.1% rated AA/Aa, 2.7% rated A/A and 2.0% rated BBB/Baa. In the future, we may invest in CMBS securities or other securities that are unrated. As of June 30, 2020, our CMBS investments had a weighted average duration of 2.3 years. The commercial real estate collateral underlying our CMBS investment portfolio is located throughout the United States. As of June 30, 2020, by property count and market value, respectively, 52.3% and 72.8% of the collateral underlying our CMBS investment portfolio was distributed throughout the top 25 metropolitan statistical areas (“MSAs”) in the United States, with 7.6% and 34.9%, by property count and market value, respectively, of the collateral located in the New York-Newark-Edison MSA, and the concentrations in each of the remaining top 24 MSAs ranging from 0.2% to 4.9% by property count and 0.2% to 9.7% by market value.

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 (“GNMA”), or by a government-sponsored enterprise (“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. Investments in U.S. Agency Securities are subject to the same Risk and Underwriting Committee approval requirements as CMBS investments, as described above. As of June 30, 2020, the estimated fair value of our portfolio of U.S. Agency Securities was $33.9 million in 22 CUSIPs ($1.5 million average investment per CUSIP), with a weighted average duration of 2.4 years. The commercial real estate collateral underlying our U.S. Agency Securities portfolio is located throughout the United States. As of June 30, 2020, by market value, 76% and 20.4% of the collateral underlying our U.S. Agency Securities, excluding the collateral underlying our Agency interest-only securities, was located in New York and California, respectively, with no other state having a concentration greater than 10.0%. By property count, California represented 75.9% and New York represented 3.4% of such collateral. While the specific geographic concentration of our Agency interest-only securities portfolio as of June 30, 2020 is not obtainable, risk relating to any such possible concentration is mitigated by the interest payments of these securities being guaranteed by a U.S. government agency or a GSE.

Corporate Bonds.  In addition to CMBS and U.S. Agency Securities, we invest in other debt securities, including, but not limited to, debt securities issued by REITs and real estate companies. Approval of our board of directors’ Risk and Underwriting Committee is required for the aggregate investments in such debt securities made and owned by all Ladder investment companies to exceed $80.0 million. As of June 30, 2020, we had no investments in debt securities.

Equity Securities.  We invest in real estate related equity investments. Approval of our board of directors’ Risk and Underwriting Committee is required for the aggregate real estate related equity investments made and owned by all Ladder investment companies to exceed $20.0 million. As of June 30, 2020, we had no investments in debt securities.

Since the onset of the COVID-19 pandemic, there has been a decrease in liquidity and trading activity for the real estate securities we own. The Company invests in primarily AAA-rated real estate securities, typically front pay securities, with relatively short duration and significant subordination. The hyperamortization features included in many of the securities positions we own help mitigate potential credit losses even in the current market conditions. During the three months ended June 30, 2020, liquidity and trading activity began to return to the market and the value of our securities portfolio as of June 30, 2020 had an unrealized mark-to-market gain of $11.8 million.

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Real Estate

Net Leased Commercial Real Estate Properties. As of June 30, 2020, we owned 164 single tenant net leased properties with an aggregate book value of $664.6 million. These properties are fully leased on a net basis where the tenant is generally responsible for payment of real estate taxes, property, building and general liability insurance and property and building maintenance expenses. As of June 30, 2020, our net leased properties comprised a total of 5.4 million square feet, 100% leased with an average age since construction of 15.5 years and a weighted average remaining lease term of 11.9 years. Commercial real estate investments in excess of $20.0 million require the approval of our board of directors’ Risk and Underwriting Committee. The majority of the net leased properties in our real estate portfolio are necessity-based businesses and have remained open and stable during the COVID-19 pandemic. During the three months ended June 30, 2020, we collected 100% of rent on these properties.

Diversified Commercial Real Estate Properties. In addition, as of June 30, 2020, we owned 64 diversified commercial real estate properties with an aggregate book value of $376.7 million. Through separate joint ventures, we own a 40 property student housing portfolio in Isla Vista, CA with a book value of $82.1 million and an occupancy rate of 100.0%, a portfolio of 11 office buildings in Richmond, VA with a book value of $72.4 million with a 82.6% occupancy rate, an apartment complex in Miami, FL with a book value of $37.3 million and an occupancy rate of 91.3%, an unleased industrial building in Lithia Springs, GA with an aggregate book value of $23.3 million, a portfolio of two student housing properties in Fort Worth and Arlington, TX with an aggregate book value of $23.3 million and a 70.2% occupancy rate, one hotel in San Diego, CA with a book value of $40.9 million and a 40.9% occupancy rate, and a 13-story office building in Oakland County, MI with a book value of $9.6 million and an 68.9% occupancy rate. We also own a single-tenant office building in Ewing, NJ with a book value of $26.3 million, a development property in Los Angeles, CA with a book value of $21.5 million, a hotel in Omaha, NE with a book value of $17.1 million, a single-tenant office building in Crum Lynne, PA with a book value of $9.7 million, a shopping center in Carmel, NY with a book value of $5.9 million and a 44.4% occupancy rate, a hotel in Winston Salem, NC with a book value of $3.9 million and a 36.4% occupancy rate and an office building in Peoria, IL with a book value of $3.4 million and a 45.6% occupancy rate. During the three months ended June 30, 2020, we collected approximately 95% of rent on these properties.

Residential Real Estate. We sold three condominium units at Terrazas River Park Village in Miami, FL, during the six months ended June 30, 2020, generating aggregate gains on sale of $7 thousand. As of June 30, 2020, we own three residential condominium units at Terrazas River Park Village in Miami, FL with a book value of $0.9 million, and we intend to sell these remaining units in less than 18 months. The Company holds these residential condominium units in a TRS.

The recent market volatility due to the COVID-19 pandemic has brought illiquidity in most asset classes, including real estate. The Company expects the net leased commercial real estate properties, which comprise the majority of our portfolio, to remain minimally impacted as the majority of the net leased properties in our real estate portfolio are necessity-based businesses and have remained open and stable during the COVID-19 pandemic. We continue to actively monitor our diversified commercial real estate properties as well to determine the immediate and long term impacts on the buildings, tenants, business plans and the ability to execute those business plans.

Other Investments

Unconsolidated Joint Venture.  In connection with the origination of a loan in April 2012, we received a 25% equity interest with the right to convert upon a capital event. On March 22, 2013, we refinanced the loan, and we converted our equity interest into a 19% limited liability company membership interest in Grace Lake JV, LLC (“Grace Lake LLC”). As of June 30, 2020, Grace Lake LLC owned an office building campus with a carrying value of $51.2 million, which is net of accumulated depreciation of $34.1 million, that is financed by $62.9 million of long-term debt. Debt of Grace Lake LLC is non-recourse to the limited liability company members, except for customary non-recourse carve-outs for certain actions and environmental liability. As of June 30, 2020, the book value of our investment in Grace Lake LLC was $3.5 million.

Unconsolidated Joint Venture.  On August 7, 2015, the Company entered into a joint venture, 24 Second Avenue Holdings LLC (“24 Second Avenue”), with an Operating Partner (the “Operating Partner”) to invest in a ground-up residential/retail condominium development and construction project located at 24 Second Avenue, New York, NY.

During the three months ended March 31, 2019, the Company converted its existing $35.0 million common equity interest into a $35.0 million priority preferred equity position. The Company also provided $50.4 million in first mortgage financing in order to refinance the existing $48.1 million first mortgage construction loan which was made by another lending institution. In addition to the new $50.4 million first mortgage loan, the Company also funded a $6.5 million mezzanine loan for use in completing the project. The Operating Partner must fully fund any and all additional capital for necessary expenses.

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Due to the Company’s non-controlling equity interest in 24 Second Avenue, the Company accounts for the new loans as additional investments in the joint venture.

24 Second Avenue consists of 30 residential condominium units and one commercial condominium unit. 24 Second Avenue started closing on the existing sales contracts during the quarter ended March 31, 2019, upon receipt of New York City Building Department approvals and a temporary certificate of occupancy for a portion of the project. As of June 30, 2020, 24 Second Avenue had sold 19 residential condominium units for $49.6 million in sales proceeds. As of June 30, 2020, the Company had no remaining additional capital commitment to 24 Second Avenue. As of June 30, 2020, the book value of the Company’s investment in 24 Second Avenue was $45.4 million.

FHLB Stock. Tuebor Captive Insurance Company LLC (“Tuebor”) is a member of the Federal Home Loan Bank (“FHLB”). Each member of the FHLB must purchase and hold FHLB stock as a condition of initial and continuing membership, in proportion to their borrowings from the FHLB and levels of certain assets. Members may need to purchase additional stock to comply with these capital requirements from time to time. FHLB stock is redeemable by Tuebor upon five years’ prior written notice, subject to certain restrictions and limitations. Under certain conditions, the FHLB may also, at its sole discretion, repurchase FHLB stock from its members. As of June 30, 2020, the book value of our investment in FHLB Stock was $61.6 million.

Our 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. In addition to cash flow from operations, we fund our operations and investment strategy through a diverse array of funding sources, including:

•Unsecured corporate bonds

•Secured loan and securities repurchase facilities

•Loan sales and securitizations

•Secured financing facility

•CLO transactions

•Non-recourse mortgage debt

•FHLB financing

•Revolving credit facility

•Unencumbered assets available for financing

•Equity

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. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 7 Debt Obligations, Net in our consolidated financial statements included elsewhere in this Quarterly Report for more information about our financing arrangements.

Unsecured Corporate Bonds

As of June 30, 2020, we had $1.7 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $258.5 million in aggregate principal amount of 5.875% senior notes due 2021 (the “2021 Notes”), $485.6 million in aggregate principal amount of 5.25% senior notes due 2022 (the “2022 Notes”), $350.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”) and $658.0 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes,” collectively with the 2021 Notes, the 2022 Notes and the 2025 Notes, the “Notes”). During the six months ended June 30, 2020, we repurchased an aggregate principal of the Notes of $163.4 million, recognizing an aggregate gain on extinguishment of debt of $19.3 million. Refer to Note 7 to the Consolidated Financial Statements for further detail.

Due in large part to devoting such a large portion of the Company’s capital structure to equity and unsecured corporate bond debt, Ladder maintains a $2.7 billion pool of unencumbered assets, comprised primarily of first mortgage loans as of June 30, 2020.

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Committed Loan Financing Facilities

We are parties to multiple committed loan repurchase agreement facilities, totaling $1.6 billion of credit capacity. As of June 30, 2020, the Company had $381.1 million of borrowings outstanding, with an additional $1.2 billion of committed financing available. Assets pledged as collateral under these facilities are generally limited to first mortgage whole mortgage loans, mezzanine loans and certain interests in such first mortgage and mezzanine loans. Our repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum debt/equity ratios.

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, the lenders 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 lender establishes a 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.

Securities Repurchase Facilities

We are a party to a committed term master repurchase agreement with a major U.S. banking institution for CMBS, totaling $400.0 million of credit capacity, or more depending on our utilization of a loan repurchase facility with the same lender. 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. As of June 30, 2020, the Company had $451.3 million borrowings outstanding, with an additional $334.0 million of committed financing available.

Additionally, we are party to multiple uncommitted master repurchase agreements with several counterparties to finance our investments in CMBS and U.S. Agency Securities. The securities that served as collateral for these borrowings are typically AAA-rated CMBS with relatively short duration and significant subordination. The lenders have sole discretion to determine the market value of the collateral on a daily basis, and, if the estimated market value of the collateral declines, the lenders have the right to require additional cash collateral, and if the estimated market value of the collateral subsequently increases, we have the right to call back excess cash collateral.

Revolving Credit Facility

The Company’s revolving credit facility (the “Revolving Credit Facility”) provides for an aggregate maximum borrowing amount of $266.4 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. On November 25, 2019, the Company amended the Revolving Credit Facility to add two additional one-year extension options, extending the final maturity date, including all extension options, to February 2025. The amendment also provided for a reduction in the interest rate to one-month LIBOR plus 3.00% on Eurodollar advances upon the upgrade of the Company’s credit ratings, which occurred in January 2020.

The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

LCFH is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions under the Revolving Credit Facility. In addition, under the Revolving Credit Facility, LCFH is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities.

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FHLB Financing

We have maintained membership in the FHLB since 2012 through our subsidiary, Tuebor Captive Insurance Company LLC (“Tuebor”). As of June 30, 2020, Tuebor had $360.8 million of borrowings outstanding from the FHLB (with an additional $1.1 billion of committed term financing available), with terms of overnight to 4.3 years, interest rates of 0.44% to 2.95%, and advance rates of 45.0% to 100% on eligible collateral, including cash collateral. As of June 30, 2020, collateral for the borrowings was comprised of $315.4 million of CMBS and U.S. Agency Securities. $0.1 million of cash and $210.7 million of first mortgage commercial real estate loans. The weighted-average borrowings outstanding were $828.0 million for the six months ended June 30, 2020. FHLB advances amounted to 7.3% of the Company’s outstanding debt obligations as of June 30, 2020.

Mortgage Loan Financing

We generally finance our real estate using long-term non-recourse mortgage financing. During the six months ended June 30, 2020, we executed five term debt agreements to finance real estate. All of our mortgage loan financings have fixed rates ranging from 3.75% to 6.75%, mature between 2020 - 2030 and total $805.4 million at June 30, 2020. These long-term non-recourse mortgages include net unamortized premiums of $5.0 million at June 30, 2020, representing proceeds received upon financing greater than the contractual amounts due under the agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. We recorded $0.6 million of premium amortization, which decreased interest expense, for the six months ended June 30, 2020. The loans are collateralized by real estate and related lease intangibles, net, of $959.8 million as of June 30, 2020.

Secured Financing Facility  

On April 30, 2020, the Company entered into a strategic financing arrangement (the “Agreement”) with an American multinational corporation (the “Lender”), under which the Lender will provide the Company with approximately $206.4 million in senior secured financing (the “Secured Financing Facility”) to fund transitional and land loans. The Secured Financing Facility will be secured on a first lien basis on a portfolio of certain of the Company’s loans and will mature on May 6, 2023, and borrowings thereunder will bear interest at LIBOR (or a minimum of 0.75% if greater) plus 10.0%, with a minimum interest premium of approximately $39.2 million minus the aggregate sum of all interest payments made under the Secured Financing Facility prior to the date of payment of the minimum interest premium, which is payable upon the earlier of maturity or repayment in full of the loan. The Senior Financing Facility is non-recourse, subject to limited exceptions, and does not contain mark-to-market provisions. Additionally, the Senior Financing Facility provides the Company optionality to modify or restructure loans or forbear in exercising remedies, which maximizes the Company’s financial flexibility.

As part of the strategic financing, the Lender also has the ability to make an equity investment in the Company of up to 4.0 million Class A common shares at $8.00, which amount and price may be proportionally adjusted in the event of equity distributions, stock splits, reclassifications and other similar events (the “Purchase Right”). The Purchase Right will expire on December 31, 2020. The Company expects that any such investment would additionally benefit its liquidity position.

Pursuant to the Purchase Right, the Lender has agreed to a customary standstill until December 31, 2020 or the date on which the Lender has exercised the Purchase Right in full, if earlier. In addition, the Lender has agreed not to sell, transfer, assign, pledge, hypothecate, mortgage, dispose of or in any way encumber the shares acquired as a result of exercising the Purchase Right for a period of time following the exercise date. In connection with the issuance of the Purchase Right, the Company and the Lender entered into a registration rights agreement, pursuant to which the Company has agreed to provide customary demand and piggyback registration rights to the Lender.

As of June 30, 2020, the Company had $188.7 million of borrowings outstanding under the secured financing facility included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $9.7 million were included in secured financing facility as of June 30, 2020.

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Collateralized Loan Obligation (“CLO”) Debt

On April 27, 2020, a consolidated subsidiary of the Company completed a private CLO transaction with a major U.S. bank which generated $310.2 million of gross proceeds to Ladder, financing $481.3 million of loans (“Contributed Loans”) at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company will retained a 35.5% subordinate and controlling interest in the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed Loans, including broad discretion in managing these loans in light of the COVID-19 pandemic, and has the ability to appoint the special servicer under the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed Loans and has the ability to appoint the special servicer under the CLO. The CLO is a VIE and the Company was the primary beneficiary and, therefore, consolidated the VIE - See Note 10, Consolidated Variable Interest Entities. Proceeds from the transaction were used to pay off other secured debt including bank and FHLB financing that was subject to mark-to-market provisions.

As of June 30, 2020, the Company had $299.6 million of matched term, non-mark-to-market and non-recourse basis CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $4.8 million were included in CLO debt as of June 30, 2020.

Hedging Strategies

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 the interest rate risk on the financing of assets that have a duration longer than five 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 we seek to match fund our assets according to the liquidity characteristics and expected holding periods of our assets.

Financing Strategy in Current Market Conditions

In March 2020, as the COVID-19 health crisis rapidly transformed into a financial crisis, management took swift action to increase liquidity resources and actively manage its financing arrangements with its bank partners. In an abundance of caution, the Company first drew down on its $266.4 million unsecured revolving credit facility, which continues to be fully-drawn, and the proceeds continue to be held as unrestricted cash on the Company’s balance sheet as of July 30, 2020.   

Securities Repurchase Facilities: The Company invests in AAA-rated CRE CLO securities, typically front pay securities, with relatively short duration and significant subordination. These securities have historically been financed with short-term maturity, repurchase agreements with various bank counterparties. The Company has been able to continue to access securities repurchase funding and the pricing of such borrowings has improved during the three months ended June 30, 2020 as liquidity returned to the market and pricing for the securities that serve as collateral improved. Furthermore, during the three months ended June 30, 2020, the Company paid down $275.8 million of securities repurchase financing, primarily through sales of securities. As of July 27, 2020, the Company has $834.4 million outstanding of securities repurchase financing with maturities ranging from 3 days to 17 months.

Federal Home Loan Bank (“FHLB”) Financing:  As discussed in the Company’s Annual Report, in 2016, the FHFA adopted a final rule that limited our captive insurance subsidiary’s membership in the FHLB, requiring us to significantly reduce the amounts of FHLB borrowings outstanding by February of 2021.

During the three months ended June 30, 2020, the Company paid down FHLB borrowings of $646.8 million, with $360.8 million outstanding as of July 27, 2020. The remaining maturities are staggered out through 2024. Funding for future advance paydowns would be obtained from the natural amortization of securities over time, loan pay offs and/or sales of loan and securities collateral. The Company incurred $6.5 million in prepayment penalties related to this paydown of FHLB borrowings.

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Loan Repurchase Financing:  The Company has maintained a consistent dialogue with its loan financing counterparties since the COVID-19 crisis began to unfold in late March 2020. In addition to using proceeds from the Company’s 2027 Notes offering in January to reduce secured debt, during the three months ended June 30, 2020, the Company paid down over $155.9 million on such loan repurchase financing through loan collateral pay offs and loans securitized through a CLO financing transaction (see above).

As of July 27, 2020, the Company had $374.9 million of loan repurchase debt outstanding with five separate bank counterparties. The Company continues to maintain an active dialogue with its bank counterparties as it expects loan collateral on each of their lines to experience some measure of forbearance.

Secured Financing Facility:  On April 30, 2020, the Company entered into a strategic financing arrangement (the “Agreement”) with an American multinational corporation (the “Lender”), under which the Lender will provide the Company with approximately $206.4 million in senior secured financing (the “Secured Financing Facility”) to fund transitional and land loans (see above).

Completion of Private CLO: On April 27, 2020, the Company completed a private CLO financing transaction with a major U.S. bank which generated $310.2 million of gross proceeds, financing $481.3 million of loans at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis (see above).

As a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic, as of July 27, 2020, Ladder had over $750.0 million of unrestricted cash on hand and based on the financing actions described above, the Company has significantly decreased its exposure to mark-to-market financing.

Financial Covenants

We generally seek to maintain a debt-to-equity ratio of approximately 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 conduit 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 market opportunities as they have arisen.

We and our subsidiaries may incur substantial additional debt in the future. However, we are subject to certain restrictions on our ability to incur additional debt in the indentures governing the Notes (the “Indentures”) and our other debt agreements. Under the Indentures, we may not incur certain types of indebtedness unless our consolidated non-funding debt to equity ratio (as defined in the Indentures) is less than or equal to 1.75 to 1.00 or if the unencumbered assets of the Company and its subsidiaries is less than 120% of their unsecured indebtedness, although our subsidiaries are permitted to incur indebtedness where recourse is limited to the assets and/or the general credit of such subsidiary.

Our borrowings under certain financing agreements and our committed repurchase facilities are subject to maximum consolidated leverage ratio limits (either a fixed ratio ranging from 3.50 to 1.00 to 4.00 to 1.00, or a maximum ratio based on our asset composition at the time of determination), minimum net worth requirements (ranging from $300.0 million to $849.0 million), maximum reductions in net worth over stated time periods, minimum liquidity levels (typically $30.0 million of cash or a higher standard that often allows for the inclusion of different percentages of liquid securities in the determination of compliance with the requirement), and a fixed charge coverage ratio of 1.25x, and, in the instance of one lender, an interest coverage ratio of 1.50x, in each case, if certain liquidity thresholds are not satisfied. These restrictions, which would permit us to incur substantial additional debt, are subject to significant qualifications and exceptions.

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 or the assets 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.

We were in compliance with all covenants as described in the Company’s Annual Report, as of June 30, 2020.

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Net of the $826.1 million of unrestricted cash held as of June 30, 2020, our adjusted leverage ratio would be significantly below 3.0x. In late March 2020, as the COVID-19 crisis evolved, management began executing on a plan to mitigate uncertainty in financial markets by increasing liquidity and obtaining additional non-recourse and non-mark-to-market financing. Partly as a result of maintaining conservative cash levels as of March 31, 2020, the Company was not in compliance with its 3.5x maximum leverage covenant with certain of its lenders but had the benefit of a contractually provided 30-day cure period during which the Company cured such non-compliance by paying down debt (as defined in the relevant borrowing agreements). Refer to Financing Strategy in Current Market Conditions for further disclosures surrounding deleveraging actions completed during the second quarter 2020.

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Results of Operations

A discussion regarding our results of operations for the three months ended June 30, 2020 compared to the three months ended June 30, 2019 is presented below.

Three months ended June 30, 2020 compared to the three months ended June 30, 2019

The following table sets forth information regarding our consolidated results of operations ($ in thousands):

	Three Months Ended June 30,				2020 vs
	2020		2019		2019
Net interest income
Interest income	$	62,096	$	85,322	$	(23,226)
Interest expense	68,425		52,369		16,056
Net interest income	(6,329)		32,953		(39,282)
Provision for/(release of) loan loss reserves	(729)		300		(1,029)
Net interest income (expense) after provision for loan losses	(5,600)		32,653		(38,253)
Other income (loss)
Operating lease income	23,773		27,780		(4,007)
Sale of loans, net	(744)		20,264		(21,008)
Realized gain (loss) on securities	(14,798)		4,464		(19,262)
Unrealized gain (loss) on equity securities	401		(990)		1,391
Unrealized gain (loss) on Agency interest-only securities	98		11		87
Realized gain (loss) on sale of real estate, net	(1)		(1,124)		1,123
Fee and other income	3,505		7,196		(3,691)
Net result from derivative transactions	(813)		(15,457)		14,644
Earnings (loss) from investment in unconsolidated joint ventures	471		1,564		(1,093)
Gain (loss) on extinguishment/defeasance of debt	19,017		—		19,017
Total other income (loss)	30,909		43,708		(12,799)
Costs and expenses
Salaries and employee benefits	7,001		14,907		(7,906)
Operating expenses	6,224		6,012		212
Real estate operating expenses	6,034		6,032		2
Fee expense	1,977		1,183		794
Depreciation and amortization	9,816		9,935		(119)
Total costs and expenses	31,052		38,069		(7,017)
Income (loss) before taxes	(5,743)		38,292		(44,035)
Income tax expense (benefit)	(550)		2,219		(2,769)
Net income (loss)	$	(5,193)	$	36,073	$	(41,266)

Investment Overview

Investment activity in the three months ended June 30, 2020 focused on loan, security and real estate activities. We originated and funded $20.5 million in principal value of commercial mortgage loans, which was offset by $231.8 million of sales and $327.8 million of principal repayments in the three months ended June 30, 2020. We sold $424.7 million of securities and had $9.1 million of amortization in the portfolio, which partially contributed to a net decrease in our securities portfolio of $423.9 million during the three months ended June 30, 2020. We also invested $3.9 million in real estate, which includes $3.9 million of real estate acquired via foreclosure, and received proceeds from the sale of real estate of $0.3 million.

Investment activity in the three months ended June 30, 2019 focused on loan, security and real estate activities. We originated and funded $418.2 million in principal value of commercial mortgage loans, which was offset by $271.2 million of sales and $448.1 million of principal repayments in the three months ended June 30, 2019. We acquired $419.3 million of new securities, which was partially offset by $169.7 million of sales and $86.3 million of amortization in the portfolio, which partially contributed to a net increase in our securities portfolio of $169.3 million during the three months ended June 30, 2019. We also invested $2.7 million in real estate and received proceeds from the sale of real estate of $14.0 million.

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Operating Overview

Net income (loss) totaled $(5.2) million for the three months ended June 30, 2020, compared to $36.1 million for the three months ended June 30, 2019. The most significant drivers of the $41.3 million decrease are as follows:

•a decrease in net interest income after provision for loan losses of $38.3 million, primarily as a result of the $23.2 million decrease in interest income and the $16.1 million increase in interest expense;

•a decrease in total other income (loss) of $12.8 million, primarily as a result of a decrease of $21.0 million in sale of loans, net, a $19.3 million decrease in realized gain (loss) on securities and a decrease of $3.7 million in fee and other income, partially offset by an increase of $19.0 million in gain (loss) on extinguishment of debt and an increase of $14.6 million in net results from derivative transactions;

•a decrease in total costs and expenses of $7.0 million compared to the prior year, primarily as a result of a $7.9 million decrease in salaries and employee benefits; and

•an increase in income tax expense (benefit) of ($2.8 million) compared to the prior year, primarily attributable to a decrease in forecasted GAAP income in our TRSs.

Income (Loss) Before Taxes

Income (loss) before taxes totaled $(5.7) million for the three months ended June 30, 2020, compared to $38.3 million for the three months ended June 30, 2019. The significant components of the $44.0 million decrease in income (loss) before taxes are described in the first four bullet points under operating overview above.

Core Earnings

Core earnings, a non-GAAP financial measure, totaled $12.8 million for the three months ended June 30, 2020, compared to $51.0 million for the three months ended June 30, 2019. The significant components of the $38.2 million decrease in core earnings are the $32.8 million decrease in net interest income which includes a $23.2 million decrease in interest income and a $9.5 million increase in interest expense. Also contributing to the decrease is a $16.3 million decrease in total other income, which includes a decrease of $9.8 million in sale of loans, net, a $4.0 million decrease in operating lease income, a decrease of $3.9 million in gain (loss) on securities and a decrease of $3.7 million in fee and other income, partially offset by an increase of $3.8 million in net results from derivative transactions and a decrease of $8.0 million in salaries and employee benefits.

Our results of operations were significantly impacted by the actions we took to generate liquidity and pay down mark-to-market debt in direct response to the unfavorable market conditions that occurred near the onset of the COVID-19 pandemic. The actions taken by management had multiple impacts on core earnings for the three months ended June 30, 2020. Management believes the actions taken were prompted by the unusual market conditions and therefore outside of Ladder’s core operations. Management believes adjusting for certain transactional charges/gains related to the impact of COVID-19 on its performance measures provides a more useful guide to assess the ongoing core operations of the Company.

The impact from COVID-19 included adjustments related to the unusual market conditions and actions taken by management including: (a) $6.7 million of losses from sales of performing first mortgage loans included in sale of loans, net, (b) $15.4 million of losses from sales of CMBS, (c) $3.7 million of loss from conduit loan sales, (d) $6.5 million of prepayment penalties related to pay downs of mark-to-market debt included in interest expense, (e) $2.1 million of professional fee expenses included in operating expenses and (f) $0.2 million of severance costs included in salaries and employee benefits. The $34.5 million total of the preceding amounts was partially offset by (g) $19.0 million of gains from the repurchase of and extinguishment of unsecured corporate bond debt at a discount from par, net of (h) $1.5 million of accelerated premium amortization included in interest expense.

See “—Reconciliation of Non-GAAP Financial Measures” for our definition of core earnings and a reconciliation to income (loss) before taxes.

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Net Interest Income

The $23.2 million decrease in interest income was primarily attributable to lower prevailing LIBOR rates during 2020 and a decrease in our securities and loan portfolios. For the three months ended June 30, 2020, securities investments averaged $1.1 billion and loan investments averaged $3.2 billion. For the three months ended June 30, 2019, securities investments averaged $1.8 billion and loan investments averaged $3.4 billion. There was a $144.9 million decrease in loan investments, and a $688.9 million decrease in securities investments.

The $16.1 million increase in interest expense was primarily attributable to an increase in interest expense on corporate bonds issued in 2020, prepayment penalties on repayment of mark-to-market borrowings and hyper amortization of deferred issuance costs as a result of the retirement of corporate bonds in the three months ended June 30, 2020. The increase is also driven by a full quarter of interest expense on the fully drawn revolver and the addition of the CLO and secured financing facility, partially offset by a decrease in interest expense on FHLB debt.

The $38.3 million decrease in net interest income after provision for loan losses was primarily attributable to the decrease in net interest income discussed above and the increase in interest expense discussed above and the $1.0 million decrease in provision for loan losses discussed below.

As of June 30, 2020, the weighted average yield on our mortgage loan receivables was 6.7%, compared to 7.9% as of June 30, 2019 as the weighted average yield on new loans originated was lower than the weighted average yield on loans that were securitized or paid off. As of June 30, 2020, the weighted average interest rate on borrowings against our mortgage loan receivables was 4.8%, compared to 3.9% as of June 30, 2019. The increase in the rate on borrowings against our mortgage loan receivables from June 30, 2019 to June 30, 2020 was primarily due to higher borrowing rates on new sources of financing obtained during the three months ended June 30, 2020. As of June 30, 2020, we had outstanding borrowings secured by our mortgage loan receivables equal to 32.9% of the carrying value of our mortgage loan receivables, compared to 43.6% as of June 30, 2019.

As of June 30, 2020, the weighted average yield on our real estate securities was 1.6%, compared to 3.3% as of June 30, 2019 as the weighted average yield on securities purchased was lower than the weighted average yield on securities that were sold or paid off, primarily due to lower prevailing market rates during the three months ended June 30, 2020. As of June 30, 2020, the weighted average interest rate on borrowings against our real estate securities was 2.6%, compared to 3.0% as of June 30, 2019. The decrease in the rate on borrowings against our real estate securities from June 30, 2019 to June 30, 2020 was primarily due to lower prevailing market borrowing rates as of June 30, 2020 compared to June 30, 2019. As of June 30, 2020, we had outstanding borrowings secured by our real estate securities equal to 76.9% of the carrying value of our real estate securities, compared to 73.8% as of June 30, 2019.

Our real estate is comprised of non-interest bearing assets; however, interest incurred on mortgage financing collateralized by such real estate is included in interest expense. As of June 30, 2020, the weighted average interest rate on mortgage borrowings against our real estate was 5.0%, compared to 5.1% as of June 30, 2019. As of June 30, 2020, we had outstanding borrowings secured by our real estate equal to 77.3% of the carrying value of our real estate, compared to 74.6% as of June 30, 2019.

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Provision for Loan Losses

In compliance with the new CECL reporting requirements, adopted on January 1, 2020, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. Based on the Company’s process, at adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock). As of June 30, 2020, the Company released CECL reserves of $(0.7) million for a total CECL reserve of $29.4 million. This excludes five loans that previously had an aggregate of $20.7 million of asset-specific reserves and a carrying value of $76.9 million as of June 30, 2020. The change of $(0.7) million in the quarter is reflected as a decrease of reserve to provision expense of $(0.3) million, and a decrease in reserve on unfunded commitments of $(0.4) million. These decreases are primarily due to the decrease in the size of our loan portfolio, offset by an update of the macro economic assumptions used in the Company’s CECL evaluation in the current quarter. For additional information, refer to “Allowance for Loan Losses and Non-Accrual Status” in Note 3, Mortgage Loan Receivables to the consolidated financial statements.

We determined that a provision expense for loan losses of $0.3 million was required for the three months ended June 30, 2019. The provision consisted of a portfolio-based, general reserve of $0.3 million for the expected losses over the remaining portfolio of mortgage loan receivables held for investment, and no asset-specific reserve.

Operating Lease Income

The decrease of $4.0 million in operating lease income was primarily attributable to income related to a one time lease termination payment received in 2019. This decrease was partially offset by income on properties acquired in 2020 and a full period of operations on properties acquired in 2019. Tenant recoveries are included in operating lease income.

Sales of Loans, Net

Income (loss) from sales of loans, net, includes all loan sales, whether by securitization, whole loan sales or other means. Income from sales of loans, net also includes realized losses on loans related to lower of cost or market adjustments. During the three months ended June 30, 2020, we sold/transferred two mortgage loan receivables held for sale with an aggregate outstanding principal balance of $68.1 million. We also sold five mortgage loan receivables held for investment, net, at amortized cost, with an aggregate outstanding principal balance of $172.0 million during the three months ended June 30, 2020. In the three months ended June 30, 2019, we sold /transferred 22 loans with an aggregate outstanding principal balance of $237.8 million. During the three months ended June 30, 2020, we released $7.6 million of realized losses on loans related to lower of cost or market adjustments. During the three months ended June 30, 2019 we recorded no realized losses on loans related to lower of cost or market adjustments. Income from sales of loans, net is subject to market conditions impacting timing, size and pricing and as such may vary significantly quarter to quarter. The $21.0 million decrease was predominantly a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic.

Realized Gain (Loss) on Securities

We sold $424.7 million of securities for the three months ended June 30, 2020. We sold $169.7 million of securities for the three months ended June 30, 2019. The decrease of $19.3 million in realized gain (loss) on securities is a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic.

Unrealized Gain (Loss) on Equity Securities

Unrealized gain (loss) on equity securities represented a gain of $0.4 million for the three months ended June 30, 2020, compared to $1.0 million for the three months ended June 30, 2019. The Company has elected the fair market value option for accounting for these equity securities and changes in fair value are recorded in current period earnings.

Unrealized Gain (Loss) on Agency Interest-Only Securities

The positive change of $0.1 million in unrealized gain (loss) on Agency interest-only securities was due to change in fair value of the securities.

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Realized Gain (Loss) on Sale of Real Estate, Net

The increase of $1.1 million in realized gain (loss) on sale of real estate, net was primarily a result of the commercial real estate and residential condominium sales discussed below.

During the three months ended June 30, 2020 and 2019, we sold no single-tenant net leased properties.

During the three months ended June 30, 2020, we sold no diversified commercial real estate properties. During the three months ended June 30, 2019, we sold two diversified commercial real estate properties resulting in a net gain (loss) on sale of $(1.3) million.

During the three months ended June 30, 2020, we sold one residential condominium units from Terrazas River Park Village in Miami, FL, resulting in a net gain on sale of $55. During the three months ended June 30, 2019, we sold seven residential condominium units from Terrazas River Park Village in Miami, FL, resulting in a net gain on sale of $0.2 million.

Impairment of Real Estate

There was no impairment of real estate for the three months ended June 30, 2020 and June 30, 2019.

Fee and Other Income

We generate fee and other income from origination fees, exit fees and other fees on the loans we originate and in which we invest, unrealized gains (losses) on our investment in mutual fund and dividend income on our investment in FHLB stock and equity securities. The $3.7 million decrease in fee and other income year-over-year was primarily due to a decrease in exit fees and a realized loss on our investment in the Ladder Select Bond Fund (the “Fund”), a mutual fund.

Net Result from Derivative Transactions

Net result from derivative transactions represented a loss of $0.8 million for the three months ended June 30, 2020, which was comprised of an unrealized loss of $0.6 million and a realized loss of $0.2 million, compared to a loss of $15.5 million for the three months ended June 30, 2019, which was comprised of an unrealized loss of $1.0 million and a realized loss of $14.5 million, resulting in a positive change of $14.6 million. The hedge positions were related to fixed rate conduit loans and securities investments. The derivative positions that generated these results were a combination of interest rate futures that we employed in an effort to hedge the interest rate risk on the financing of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The loss in 2020 was primarily related to movement in interest rates during the three months ended June 30, 2020. The total net result from derivative transactions is composed of hedging interest expense, realized gains/losses related to hedge terminations and unrealized gains/losses related to changes in the fair value of asset hedges.

Earnings (Loss) from Investment in Unconsolidated Joint Ventures

Earnings (loss) from our investment in Grace Lake JV totaled $0.3 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively. Earnings (loss) from our investment in 24 Second Avenue totaled $0.2 million and $0.9 million for the three months ended June 30, 2020 and 2019, respectively. See Note 6, Investment in and Advances to Unconsolidated Joint Ventures for further detail.

Gain (Loss) on Extinguishment/Defeasance of Debt

There was a $19.0 million gain (loss) on extinguishment/defeasance of debt totaled for the three months ended June 30, 2020. During the three months ended June 30, 2020, the Company retired $72.8 million of principal of the 2027 Notes for a repurchase price of $61.2 million, recognizing a $10.6 million net gain on extinguishment of debt after recognizing $(1.0) million of unamortized debt issuance costs associated with the retired debt, the Company retired $45.2 million of principal of the 2025 Notes for a repurchase price of $38.5 million, recognizing a $6.2 million net gain on extinguishment of debt after recognizing $(0.4) million of unamortized debt issuance costs associated with the retired debt, the Company retired $14.4 million of principal of the 2022 Notes for a repurchase price of $13.8 million, recognizing a $0.6 million net gain on extinguishment of debt after recognizing $(0.1) million of unamortized debt issuance costs associated with the retired debt and the Company retired $6.7 million of principal of the 2021 Notes for a repurchase price of $6.5 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(16.9) thousand of unamortized debt issuance costs associated with the retired debt. There was no gain (loss) on extinguishment/defeasance of debt for the three months ended June 30, 2019.

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Salaries and Employee Benefits

Salaries and employee benefits totaled $7.0 million for the three months ended June 30, 2020, compared to $14.9 million for the three months ended June 30, 2019. Salaries and employee benefits are comprised primarily of salaries, bonuses, equity based compensation and other employee benefits. The decrease of $7.9 million in compensation expense was primarily attributable to the fact that the Company recorded no compensation expense related to bonuses due to the significant market disruption caused by the COVID-19 pandemic and the substantial economic uncertainty present in the commercial real estate market and overall economy during the three months ended June 30, 2020.

Operating Expenses

Operating expenses are primarily comprised of professional fees, lease expense and technology expenses. The increase of $0.2 million was primarily related to an increase in professional fees, partially offset by a decrease in other operating expenses during the three months ended June 30, 2020.

Real Estate Operating Expenses

The increase of $2.0 thousand in real estate operating expenses primarily relates to the acquisition of real estate in 2019, partially offset by the sale of real estate in 2020 and a decrease in operating expenses for condominium properties.

Fee Expense

Fee expense is comprised primarily of custodian fees, financing costs and servicing fees related to loans. The increase of $0.8 million in fee expense was primarily attributable to an increase in legal fees paid for loan and real estate assets in the three months ended June 30, 2020.

Depreciation and Amortization

The $0.1 million decrease in depreciation and amortization was primarily attributable to the timing the real estate sales during each quarter.

Income Tax (Benefit) Expense

Most of our consolidated income tax provision related to the business units held in our TRSs. The increase in income tax expense (benefit) of ($2.8 million) is primarily attributable to a reduction in net interest income in our TRSs as well as the decrease in income from sale of loans.

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Results of Operations

A discussion regarding our results of operations for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 is presented below.

Six months ended June 30, 2020 compared to the six months ended June 30, 2019

The following table sets forth information regarding our consolidated results of operations ($ in thousands):

	Six Months Ended June 30,				2020 vs
	2020		2019		2019
Net interest income
Interest income	$	134,686	$	171,789	$	(37,103)
Interest expense	119,827		103,618		16,209
Net interest income	14,859		68,171		(53,312)
Provision for/(release of) loan loss reserves	25,852		600		25,252
Net interest income (expense) after provision for loan losses	(10,993)		67,571		(78,564)
Other income (loss)
Operating lease income	50,101		56,701		(6,600)
Sale of loans, net	261		27,342		(27,081)
Realized gain (loss) on securities	(11,787)		7,329		(19,116)
Unrealized gain (loss) on equity securities	(132)		1,088		(1,220)
Unrealized gain (loss) on Agency interest-only securities	174		22		152
Realized gain (loss) on sale of real estate, net	10,528		(1,119)		11,647
Impairment of real estate	—		(1,350)		1,350
Fee and other income	5,024		11,882		(6,858)
Net result from derivative transactions	(16,248)		(26,491)		10,243
Earnings (loss) from investment in unconsolidated joint ventures	912		2,522		(1,610)
Gain (loss) on extinguishment/defeasance of debt	21,077		(1,070)		22,147
Total other income (loss)	59,910		76,856		(16,946)
Costs and expenses
Salaries and employee benefits	24,023		38,481		(14,458)
Operating expenses	12,018		11,413		605
Real estate operating expenses	13,981		11,506		2,475
Fee expense	3,415		2,895		520
Depreciation and amortization	19,825		20,162		(337)
Total costs and expenses	73,262		84,457		(11,195)
Income (loss) before taxes	(24,345)		59,970		(84,315)
Income tax expense (benefit)	(5,091)		(634)		(4,457)
Net income (loss)	$	(19,254)	$	60,604	$	(79,858)

Investment Overview

Investment activity in the six months ended June 30, 2020 focused on loan, security and real estate activities. We originated and funded $547.2 million in principal value of commercial mortgage loans, which was offset by $421.2 million of sales and $446.4 million of principal repayments in the six months ended June 30, 2020. We acquired $438.3 million of new securities, which was offset by $532.2 million of sales and $52.8 million of amortization in the portfolio, which partially contributed to a net decrease in our securities portfolio of $214.6 million during the six months ended June 30, 2020. We also invested $31.7 million in real estate, which includes $25.4 million of real estate acquired via foreclosure, and received proceeds from the sale of real estate of $30.4 million.

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Investment activity in the six months ended June 30, 2019 focused on loan, security and real estate activities. We originated and funded $817.8 million in principal value of commercial mortgage loans, which was offset by $430.6 million of sales and $693.8 million of principal repayments in the six months ended June 30, 2019. We acquired $852.2 million of new securities, which was partially offset by $384.4 million of sales and $110.4 million of amortization in the portfolio, which partially contributed to a net increase in our securities portfolio of $378.3 million during the six months ended June 30, 2019. We also invested $23.3 million in real estate and received proceeds from the sale of real estate of $15.7 million.

Operating Overview

Net income (loss) totaled $(19.3) million for the six months ended June 30, 2020, compared to $60.6 million for the six months ended June 30, 2019. Net income (loss) for the six months ended June 30, 2020 were significantly impacted by management’s actions to generate liquidity and pay down mark-to-market financing in direct response to the COVID-19 pandemic. The most significant drivers of the $79.9 million decrease are as follows:

•a decrease in net interest income after provision for loan losses of $53.3 million, primarily as a result of the $25.3 million increase in provision for loan losses related to the adoption of CECL. Also contributing was a $37.1 million decrease in interest income and a $16.2 million increase in interest expense;

•a decrease in total other income (loss) of $16.9 million, primarily as a result of a decrease of $27.1 million in sales of loans, a decrease of $19.1 million in realized gains (losses) on securities, a decrease of $6.9 million on fee and other income, a decrease of $6.6 million on operating lease income, partially offset by a $11.6 million increase in profits on sales of real estate and a $10.3 million increase in net results from derivative transactions;

•a decrease in total costs and expenses of $11.2 million compared to the prior year, primarily attributable to a $14.5 million decrease in salaries and employee benefit, partially offset by a $2.5 million increase in real estate operating expenses; and

•A ($4.5 million) increase in income tax expense (benefit) compared to the prior year, primarily attributable to a decrease in forecasted GAAP income in our TRSs.

Income (Loss) Before Taxes

Income (loss) before taxes totaled $(24.3) million for the six months ended June 30, 2020, compared to $60.0 million for the six months ended June 30, 2019. The significant components of the $84.3 million decrease in income (loss) before taxes are described in the first three bullet points under operating overview above.

Core Earnings

Core earnings, a non-GAAP financial measure, totaled $43.6 million for the six months ended June 30, 2020, compared to $97.9 million for the six months ended June 30, 2019. Core earnings for the six months ended June 30, 2020 were significantly impacted by management’s actions to generate liquidity and pay down mark-to-market financing in direct response to the COVID-19 pandemic. The significant components of the $54.3 million decrease in core earnings are a decrease in net interest income after provision for loan losses, a decrease in total other income (loss) of $12.9 million, primarily as a result of a decrease of $16.1 million in sale of loans, net, a decrease of $6.9 million in fee and other income, a decrease of $6.6 million in operating lease income and a decrease of $3.7 million in gain (loss) on securities and an increase of $3.1 million in gain (loss) on extinguishment of debt, partially offset by an increase of $9.6 million in sale of real estate, net, an increase of $7.9 million in net results from derivative transactions and a decrease of $14.6 million in salaries and employee benefits.

Our results of operations were significantly impacted by the actions we took to generate liquidity and pay down mark-to-market debt in direct response to the unfavorable market conditions that occurred near the onset of the COVID-19 pandemic. The actions taken by management had multiple impacts on core earnings for the three months ended June 30, 2020. Management believes the actions taken were prompted by the unusual market conditions and therefore outside of Ladder’s core operations. Management believes adjusting for certain transactional charges/gains related to the impact of COVID-19 on its performance measures provides a more useful guide to assess the ongoing core operations of the Company.

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The impact from COVID-19 included adjustments related to the unusual market conditions and actions taken by management including: (a) $6.7 million of losses from sales of performing first mortgage loans included in sale of loans, net, (b) $15.4 million of losses from sales of CMBS, (c) $3.7 million of loss from conduit loan sales, (d) $6.5 million of prepayment penalties related to pay downs of mark-to-market debt included in interest expense, (e) $2.1 million of professional fee expenses included in operating expenses and (f) $0.2 million of severance costs included in salaries and employee benefits. The $34.5 million total of the preceding amounts was partially offset by (g) $19.0 million of gains from the repurchase of and extinguishment of unsecured corporate bond debt at a discount from par, net of (h) $1.5 million of accelerated premium amortization included in interest expense.

See “—Reconciliation of Non-GAAP Financial Measures” for our definition of core earnings and a reconciliation to income (loss) before taxes.

Net Interest Income

The $37.1 million decrease in interest income was primarily attributable to lower prevailing LIBOR rates during 2020 and a decrease in our securities and loan portfolios. For the six months ended June 30, 2020, securities investments averaged $1.4 billion and loan investments averaged $3.3 billion. For the six months ended June 30, 2019, securities investments averaged $1.6 billion and loan investments averaged $3.5 billion. There was a $180.6 million decrease in average loan investments, and a $237.5 million decrease in average securities investments.

The $16.2 million increase in interest expense was primarily attributable to an increase in interest expense on corporate bonds issued in 2020, prepayment penalties on repayment of mark-to-market borrowings and hyper amortization of deferred issuance costs as a result of the retirement of corporate bonds in the six months ended June 30, 2020. The increase was also driven by a full quarter of interest expense on the fully drawn revolver and the addition of the CLO and secured financing facility, partially offset by a decrease in interest expense on FHLB debt.

The $78.6 million decrease in net interest income after provision for loan losses was primarily attributable to the decrease in net interest income and the increase in interest expense discussed above.

As of June 30, 2020, the weighted average yield on our mortgage loan receivables was 6.7%, compared to 7.9% as of June 30, 2019 as the weighted average yield on new loans originated was lower than the weighted average yield on loans that were securitized or paid off. As of June 30, 2020, the weighted average interest rate on borrowings against our mortgage loan receivables was 4.8%, compared to 3.9% as of June 30, 2019. The increase in the rate on borrowings against our mortgage loan receivables from June 30, 2019 to June 30, 2020 was primarily due to higher borrowing rates on new sources of financing obtained during the three months ended June 30, 2020. As of June 30, 2020, we had outstanding borrowings secured by our mortgage loan receivables equal to 32.9% of the carrying value of our mortgage loan receivables, compared to 43.6% as of June 30, 2019.

As of June 30, 2020, the weighted average yield on our real estate securities was 1.6%, compared to 3.3% as of June 30, 2019 as the weighted average yield on securities purchased was lower than the weighted average yield on securities that were sold or paid off, primarily due to lower prevailing market rates during the three months ended June 30, 2020. As of June 30, 2020, the weighted average interest rate on borrowings against our real estate securities was 2.6%, compared to 3.0% as of June 30, 2019. The decrease in the rate on borrowings against our real estate securities from June 30, 2019 to June 30, 2020 was primarily due to lower prevailing market borrowing rates as of June 30, 2020 compared to June 30, 2019. As of June 30, 2020, we had outstanding borrowings secured by our real estate securities equal to 76.9% of the carrying value of our real estate securities, compared to 73.8% as of June 30, 2019.

Our real estate is comprised of non-interest bearing assets; however, interest incurred on mortgage financing collateralized by such real estate is included in interest expense. As of June 30, 2020, the weighted average interest rate on mortgage borrowings against our real estate was 5.0%, compared to 5.1% as of June 30, 2019. As of June 30, 2020, we had outstanding borrowings secured by our real estate equal to 77.3% of the carrying value of our real estate, compared to 74.6% as of June 30, 2019.

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Provision for Loan Losses

In compliance with the new CECL reporting requirements, adopted on January 1, 2020, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. Based on the Company’s process, at adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock). As of June 30, 2020, the Company recorded additional CECL reserves of $(0.7) million for a total CECL reserve of $29.4 million. This excludes five loans that previously had an aggregate of $20.7 million of asset-specific reserves and a carrying value of $76.9 million as of June 30, 2020. The change of $17.9 million in the six months ended June 30, 2020 is reflected as an increase of reserve to provision expense of $17.6 million, and an increase in reserve on unfunded commitments of $0.2 million. These increases are primarily due to the update of the macro economic assumptions used in the Company’s CECL evaluation to reflect a recessionary macro economic scenario instead of the more stable “Baseline” scenario from the Federal Reserve that was utilized in the January 1, 2020 CECL reserve analysis. In addition to the CECL reserve, the Company determined that an asset-specific reserve of $8.0 million was required relating to two of the Company’s loans for the six months ended June 30, 2020. For additional information, refer to “Allowance for Loan Losses and Non-Accrual Status” in Note 3, Mortgage Loan Receivables to the consolidated financial statements.

We determined that a provision expense for loan losses of $0.6 million was required for the six months ended June 30, 2019. The provision consisted of a portfolio-based, general reserve of $0.6 million for the expected losses over the remaining portfolio of mortgage loan receivables held for investment, and no asset-specific reserve.

Operating Lease Income

The decrease of $6.6 million in operating lease income was primarily attributable to sales of real estate in 2019, partially offset by income on properties acquired in 2020 and a full period of operations on properties acquired in 2019. Tenant recoveries are included in operating lease income.

Sale of Loans, Net

Income (loss) from sale of loans, net, includes all loan sales, whether by securitization, whole loan sales or other means. Income (loss) from sale of loans, net also includes realized losses on loans related to lower of cost or market adjustments. During the six months ended June 30, 2020, we sold/transferred 22 loans with an aggregate outstanding principal balance of $253.5 million. During the six months ended June 30, 2020, we recorded $2.0 thousand realized losses on loans related to lower of cost or market adjustments. We also sold five mortgage loan receivables held for investment, net, at amortized cost, with an aggregate outstanding principal balance of $172.0 million during the six months ended June 30, 2020. During the six months ended June 30, 2019, we sold/transferred 36 loans with an aggregate outstanding principal balance of $407.5 million. During the six months ended June 30, 2019, we recorded no realized losses on loans related to lower of cost or market adjustments. Income from sales of loans, net is subject to market conditions impacting timing, size and pricing and as such may vary significantly quarter to quarter. The $27.1 million decrease was predominantly a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic.

Realized Gain (Loss) on Securities

For the six months ended June 30, 2020, we sold $532.2 million of securities, comprised of $513.5 million of CMBS, no U.S. Agency Securities, $4.0 million of corporate bonds and $14.7 million of equity securities. For the six months ended June 30, 2019, we sold $384.4 million of securities, comprised of $357.3 million of CMBS, no U.S. Agency Securities, $22.7 million of corporate bonds and $4.4 million of equity securities. The decrease of $19.1 million is a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic. Other than temporary impairments on securities of $(0.3) million are included in realized gain (loss) on securities for the six months ended June 30, 2020, compared to zero for the six months ended June 30, 2019, an increase of $(0.3) million.

Unrealized Gain (Loss) on Equity Securities

Unrealized gain (loss) on equity securities represented $(0.1) million for the six months ended June 30, 2020, compared to $1.1 million for the six months ended June 30, 2019. The Company has elected the fair market value option for accounting for these equity securities and changes in fair value are recorded in current period earnings.

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Unrealized Gain (Loss) on Agency Interest-Only Securities

The positive change of $0.2 million in unrealized gain (loss) on Agency interest-only securities was due to the mark-to-market adjustments on our securities portfolio.

Realized Gain (Loss) on Sale of Real Estate, Net

The increase of $11.6 million in realized gain (loss) on sale of real estate, net was a result of the commercial real estate and residential condominium sales discussed below.

During the six months ended June 30, 2020 and 2019, we sold no single-tenant net leased properties.

During the six months ended June 30, 2020, we sold eight diversified commercial real estate properties, resulting in a net gain (loss) on sale of $10.5 million. During the six months ended June 30, 2019, we sold two diversified commercial real estate properties resulting in a net gain (loss) on sale of $(1.3) million.

During the six months ended June 30, 2020, we sold three residential condominium units from Terrazas River Park Village in Miami, FL, resulting in a net gain on sale of $7.1 thousand. During the six months ended June 30, 2019, income from sales of residential condominiums totaled $0.4 million. We sold no residential condominium units from Veer Towers in Las Vegas, NV, but sold 13 residential condominium units from Terrazas River Park Village in Miami, FL, resulting in a net gain on sale of $0.4 million.

Impairment of Real Estate

There was no impairment of real estate for the six months ended June 30, 2020. Impairment of real estate of $1.4 million was recorded for the six months ended June 30, 2019, attributable to the receipt of a lease termination payment on a single-tenant two-story office building in Wayne, NJ. See Note 5, Real Estate and Related Lease Intangibles, Net for further detail.

Fee and Other Income

We generated fee income from origination fees, exit fees and other fees on the loans we originate and in which we invest, unrealized gains (losses) on our investment in a mutual fund and dividend income on our investment in FHLB stock and equity securities. The $6.9 million decrease in fee and other income year-over-year was primarily due to a decrease in exit fees and a realized loss on our investment in the Ladder Select Bond Fund (the “Fund”), a mutual fund.

Net Result from Derivative Transactions

Net result from derivative transactions represented a loss of $16.2 million for the six months ended June 30, 2020, which was comprised of an unrealized loss of $0.2 million and a realized loss of $16.0 million, compared to a loss of $26.5 million, for the six months ended June 30, 2019, which was comprised of an unrealized gain of $1.5 million and a realized loss of $28.0 million, resulting in a positive change of $10.3 million. The hedge positions were related to fixed rate conduit loans and securities investments. The derivative positions that generated these results were a combination of interest rate futures that we employed in an effort to hedge the interest rate risk on the financing of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The loss in 2020 was primarily related to movement in interest rates during the six months ended June 30, 2020. The total net result from derivative transactions is comprised of hedging interest expense, realized gains/losses related to hedge terminations and unrealized gains/losses related to changes in the fair value of asset hedges.

Earnings (Loss) from Investment in Unconsolidated Joint Ventures

Earnings from our investment in Grace Lake LLC totaled $0.4 million and $1.0 million for the six months ended June 30, 2020 and 2019, respectively. Earnings (loss) from our investment in 24 Second Avenue totaled $0.5 million and $1.5 million for the six months ended June 30, 2020 and 2019, respectively. The gain in the six months ended June 30, 2019 is due to a recapitalization of our investment in 24 Second Avenue. See Note 6, Investment in and Advances to Unconsolidated Joint Ventures for further detail. The gain in the six months ended June 30, 2020 is attributable to equity and earnings on our investments.

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Gain (Loss) on Extinguishment/Defeasance of Debt

Gain (loss) on extinguishment/defeasance of debt totaled $21.1 million for the six months ended June 30, 2020. During the six months ended June 30, 2020, the Company retired $92.0 million of principal of the 2027 Notes for a repurchase price of $78.4 million, recognizing a $12.3 million net gain on extinguishment of debt after recognizing $(1.3) million of unamortized debt issuance costs associated with the retired debt, the Company retired $49.2 million of principal of the 2025 Notes for a repurchase price of $42.6 million, recognizing a $6.2 million net gain on extinguishment of debt after recognizing $(0.5) million of unamortized debt issuance costs associated with the retired debt, the Company retired $14.4 million of principal of the 2022 Notes for a repurchase price of $13.8 million, recognizing a $0.6 million net gain on extinguishment of debt after recognizing $(0.1) million of unamortized debt issuance costs associated with the retired debt and, the Company retired $7.7 million of principal of the 2021 Notes for a repurchase price of $7.5 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(20.0) thousand of unamortized debt issuance costs associated with the retired debt..

Gain (loss) on extinguishment/defeasance of debt totaled $(1.1) million for the six months ended June 30, 2019. During the six months ended June 30, 2019, the Company paid off $6.6 million of mortgage loan financing, recognizing a loss on extinguishment of debt of $(1.1) million.

Salaries and Employee Benefits

Salaries and employee benefits are comprised primarily of salaries, bonuses, equity based compensation and other employee benefits. The decrease of $14.5 million in compensation expense was primarily attributable to the fact that the Company recorded no compensation expense related to bonuses due to the significant market disruption caused by the COVID-19 pandemic and the substantial economic uncertainty present in the commercial real estate market and overall economy during the six months ended June 30, 2020.

Operating Expenses

Operating expenses are primarily composed of professional fees, lease expense and technology expenses. The increase of $0.6 million was primarily related to an increase in professional fees, partially offset by a decrease in other operating expenses.

Real Estate Operating Expenses

The increase of $2.5 million in real estate operating expense primarily relates to the sale of real estate in 2019 and 2020.

Fee Expense

Fee expense is comprised primarily of custodian fees, financing costs and servicing fees related to loans. The increase of $0.5 million in fee expense was primarily attributable to an increase in legal fees on mortgage loan receivables and real estate.

Depreciation and Amortization

The $0.3 million decrease in depreciation and amortization is primarily attributable to the timing of the real estate sales during each quarter.

Income Tax (Benefit) Expense

Most of our consolidated income tax provision relates to the business units held in our TRSs. The increase of ($4.5 million) in income tax (benefit) expense is primarily a result of a reduction in net interest income in our TRSs as well as the release of an uncertain tax position, partially offset by a limitation on losses from derivative activity and interest expense deductions.

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Liquidity and Capital Resources

The management of our liquidity and capital diversity and allocation strategies is critical to the success and growth of our business. We manage our sources of liquidity 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 asset composition and capital structure; and our targeted liquidity profile and risks relating to our funding needs.

To ensure that Ladder Capital can effectively address the funding needs of the Company on a timely basis, we maintain a diverse array of liquidity sources including (1) cash and cash equivalents; (2) cash generated from operations; (3) proceeds from the issuance of the unsecured bonds; (4) borrowings under repurchase agreements; (5) principal repayments on investments including mortgage loans and securities; (6) borrowings under our revolving credit facility; (7) proceeds from securitizations and sales of loans; (8) proceeds from the sale of securities; (9) proceeds from the sale of real estate; (10) proceeds from the issuance of CLO debt and other non-mark-to-market loan financing; (11) a significant and financeable unencumbered asset base; and (12) proceeds from the issuance of equity capital. We use these funding sources to meet our obligations on a timely basis.

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 comply with the REIT distribution requirements and the terms of LCFH’s LLLP Agreement. 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. We have historically used the aforementioned funding sources to meet the operating and investment needs as they have arisen and have been able to do so by applying a rigorous approach to long and short-term cash and debt forecasting.

In addition, as a REIT, we are also required to make sufficient dividend payments to our shareholders (and equivalent distributions to the Continuing LCFH Limited Partners) in amounts at least sufficient to maintain out REIT status. Under IRS guidance, we may elect to pay a portion of our dividends in stock, subject to a cash/stock election by our shareholders, to optimize our level of capital retention. Accordingly, our cash requirement to pay dividends to maintain REIT status could be substantially reduced at the discretion of the board.

Our principal debt financing sources include: (1) long-term senior unsecured notes in the form of corporate bonds, (2) borrowings on both a short- and long-term committed basis, made by Tuebor from the FHLB, (3) long term non-recourse mortgage financing, (4) committed secured funding provided by banks and other lenders, and (5) uncommitted secured funding sources, including asset repurchase agreements with a number of banks.

In the future, we may also use other sources of financing to fund the acquisition of our 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.

Refer to our “Financing Strategy in the Current Market Conditions” and “Financial Covenants” for further disclosure surrounding management’s actions under the current market conditions related to the COVID-19 pandemic. Refer to “Our Financing Strategies” for further disclosure of our diverse financing sources and, for a summary of our financial obligations, refer to the Contractual Obligations table below. All of our existing financial obligations due within the following year can be extended for one or more additional years at our discretion, refinanced or repaid at maturity or are incurred in the normal course of business (i.e., interest payments/loan funding obligations).

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Cash, Cash Equivalents and Restricted Cash

We held cash, cash equivalents and restricted cash of $874.0 million at June 30, 2020, of which $826.1 million was unrestricted cash and cash equivalents and $47.9 million was restricted cash. We held cash, cash equivalents and restricted cash of $355.7 million at December 31, 2019, of which $58.2 million was unrestricted cash and cash equivalents and $297.6 million was restricted cash. As the COVID-19 crisis evolved, management implemented a plan to mitigate uncertainty in financial markets by increasing liquidity and obtaining additional non-recourse and non-mark-to-market financing. 

Cash Flows

The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash ($ in thousands):

	Six Months Ended June 30,
	2020		2019
Net cash provided by (used in) operating activities	$	43,453	$	132,545
Net cash provided by (used in) investing activities	433,309		(49,378)
Net cash provided by (used in) financing activities	41,496		33,816
Net increase (decrease) in cash, cash equivalents and restricted cash	$	518,258	$	116,983

We experienced a net increase in cash, cash equivalents and restricted cash of $518.3 million for the six months ended June 30, 2020, compared to a net increase in cash, cash equivalents and restricted cash of $117.0 million for the six months ended June 30, 2019. During the six months ended June 30, 2020, we received (i) $437.8 million of proceeds from repayment of mortgage loans receivable, (ii) $421.2 million of proceeds from the sales of loans, (iii) $532.5 million of proceeds from the sales of real estate securities, (iv) $63.0 million of repayment of real estate securities and (v) $144.4 million net borrowings under debt obligations.

Unencumbered Assets

As of June 30, 2020, we held unencumbered cash of $826.1 million, unencumbered loans of $1.4 billion, unencumbered securities of $18.2 million, unencumbered real estate of $82.4 million and $372.5 million of other assets not secured by any portion of secured indebtedness.

Stock Repurchases

On October 30, 2014, the board of directors authorized the Company to make up to $50.0 million in repurchases of the Company’s Class A common stock from time to time without further approval. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. As of June 30, 2020, the Company has a remaining amount available for repurchase of $39.5 million, which represents 4.2% in the aggregate of its outstanding Class A common stock, based on the closing price of $8.10 per share on such date. Refer to Item 1—“Financial Statements—Note 11, Equity Structure and Accounts” for disclosure of the Company’s repurchase activity.

Dividends

To maintain our qualification as a REIT under the Code, we must annually distribute at least 90% of our taxable income. Consistent with the guidance provided in Revenue Procedure 2017-45, we have paid several of our past dividends in a combination of cash and stock and may pay future distributions in such a manner; however, the REIT distribution requirements limit our ability to retain earnings and thereby replenish or increase capital for operations. We believe that our significant capital resources and access to financing will provide us with financial flexibility at levels sufficient to meet current and anticipated capital requirements, including funding new investment opportunities, paying distributions to our shareholders and servicing our debt obligations. Refer to Item 1—“Financial Statements—Note 11, Equity Structure and Accounts” for disclosure of dividends declared.

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Consistent with IRS guidance we may, subject to a cash/stock election by our shareholders, pay a portion of our dividends in stock, to provide for meaningful capital retention; however, the REIT distribution requirements limit our ability to retain earnings and thereby replenish or increase capital for operations. The timing and amount of future distributions is based on a number of factors, including, among other things, our future operations and earnings, capital requirements and surplus, general financial condition and contractual restrictions. All dividend declarations are subject to the approval of our board of directors. Generally, we expect the distributions to be taxable as ordinary dividends to our shareholders, whether paid in cash or a combination of cash and common stock, and not as a tax-free return of capital. Refer to Item 1—“Financial Statements—Note 11, Equity Structure and Accounts” for tax treatment of dividends. We believe that our significant capital resources and access to financing will provide the financial flexibility at levels sufficient to meet current and anticipated capital requirements, including funding new investment opportunities, paying distributions to our shareholders and servicing our debt obligations.

Our captive insurance company subsidiary, Tuebor, is subject to state regulations which require that dividends may only be made with regulatory approval. Largely as a result of this restriction, $2.0 billion of Tuebor’s member’s capital was restricted from transfer via dividend to Tuebor’s parent without prior approval of state insurance regulators at June 30, 2020. To facilitate intercompany cash funding of operations and investments, Tuebor and its parent maintain regulator-approved intercompany borrowing/lending agreements.

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 Financial Industry Regulatory Authority (“FINRA”) and SEC regulations, which require that dividends may only be made with regulatory approval. Largely as a result of this restriction, $1.1 million of LCS’s member’s capital was restricted from transfer to LCS’s parent without prior approval of regulators at June 30, 2020. LCS deregistered with the SEC effective May 28, 2020. On May 29, 2020, LCS filed a broker-dealer withdrawal form with FINRA, which became effective on July 28, 2020.

Other Potential Sources of Financing

In the future, we may also use other sources of financing to fund the acquisition of our 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 June 30, 2020 were as follows ($ in thousands):

	Contractual Obligations
	Less than 1 Year			1-3 Years		3-5 Years		More than 5 Years		Total
Secured financings	$	1,392,879	(1)	$	715,476	$	579,603	$	279,578	$	2,967,536
Unsecured revolving credit facility	266,430		(1)	—		—		—		266,430
Senior unsecured notes	—			744,060		—		1,008,757		1,752,817
Interest payable(2)	134,961			155,370		92,759		65,138		448,228
Other funding obligations(3)	249,240			—		—		—		249,240
Payments pursuant to tax receivable agreement	104			208		208		1,039		1,559
Operating lease obligations	590			1,279		—		—		1,869
Total	$	2,044,204		$	1,616,393	$	672,570	$	1,354,512	$	5,687,679

(1)          As more fully disclosed in Note 7, Debt Obligations, Net, these obligations are subject to existing Company controlled extension options for one or more additional one-year periods or could be refinanced by other existing facilities.

(2)          Composed of interest on secured financings and on senior unsecured notes. For borrowings with variable interest rates, we used the rates in effect as of June 30, 2020 to determine the future interest payment obligations. Represents amounts payable through contractual maturity, including short-term securities repurchase agreements.

(3)          Comprised of our off-balance sheet unfunded commitment to provide additional first mortgage loan financing as of June 30, 2020.

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The table above does not include amounts due under our derivative agreements as those contracts do not have fixed and determinable payments. Our contractual obligations will be refinanced and/or repaid from earnings as well as amortization and sales of our liquid collateral.

Off-Balance Sheet Arrangements

We have made investments in various unconsolidated joint ventures. See Note 6, Investment in and Advances to Unconsolidated Joint Ventures for further details of our unconsolidated investments. Our maximum exposure to loss from these investments is limited to the carrying value of our investments.

Unfunded Loan Commitments

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our borrowers. These commitments are not reflected on the consolidated balance sheets. As of June 30, 2020, our off-balance sheet arrangements consisted of $249.2 million of unfunded commitments of mortgage loan receivables held for investment, 62% of which additional funds relate to the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income. As of December 31, 2019, our off-balance sheet arrangements consisted of $286.5 million of unfunded commitments of mortgage loan receivables held for investment to provide additional first mortgage loan financing. Such commitments are subject to our borrowers’ satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. The COVID-19 pandemic has impacted the progress of work generally and, depending on specific property locations, the progress of capital expenditures, construction, and leasing, which have been delayed and/or slower paced than originally anticipated. The progress of those particular projects located in States or local municipalities with continuing restrictions on such activities is anticipated to remain slower to complete than otherwise expected, and the pace of future funding relating to these capital needs has been, and may continue to be, commensurately slower.

Critical Accounting Policies

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” within the Annual Report for a full discussion of our critical accounting policies. Other than disclosed in Note 2, Significant Accounting Policies, our critical accounting policies have not materially changed since December 31, 2019.

Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Pending Adoption

Our recently adopted accounting pronouncements and recent accounting pronouncements pending adoption are described in Item 1—“Financial Statements—Note 2, Significant Accounting Policies.”

Reconciliation of Non-GAAP Financial Measures

Core Earnings

We present core earnings, which is a non-GAAP financial measure, as a supplemental measure of our performance. We believe core earnings assists investors in comparing our performance across reporting periods on a more relevant and consistent basis by excluding certain non-cash expenses and unrecognized results as well as eliminating timing differences related to securitization gains and changes in the values of assets and derivatives. In addition, we use core earnings: (i) to evaluate our earnings from operations and (ii) because management believes that it may be a useful performance measure for us. Core earnings is also used as a factor in determining the annual incentive compensation of our senior managers and other employees.

We consider the Class A common shareholders of the Company and Continuing LCFH Limited Partners to have fundamentally equivalent interests in our pre-tax earnings. Accordingly, for purposes of computing core earnings we start with pre-tax earnings and adjust for other noncontrolling interest in consolidated joint ventures but we do not adjust for amounts attributable to noncontrolling interest held by Continuing LCFH Limited Partners.

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We define core earnings as income before taxes adjusted for: (i) real estate depreciation and amortization; (ii) 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; (iii) unrealized gains/(losses) related to our investments in fair value securities and passive interest in unconsolidated joint ventures; (iv) economic gains on loan sales not recognized under GAAP accounting for which risk has substantially transferred during the period and the exclusion of resultant GAAP recognition of the related economics during the subsequent periods; (v) adjustment for CECL reserves; (vi) non-cash stock-based compensation; and (vii) certain transactional items.

For core earnings, we include adjustments for economic gains on loan sales not recognized under GAAP accounting for which risk has substantially transferred during the period and exclusion of resultant GAAP recognition of the related economics during the subsequent periods. This adjustment is reflected in core earnings when there is a true risk transfer on the mortgage loan transfer and settlement. Historically, this has represented the impact of economic gains/(discounts) on intercompany loans secured by our own real estate which we had not previously recognized because such gains were eliminated in consolidation. Conversely, if the economic risk was not substantially transferred, no adjustments to net income would be made relating to those transactions for core earnings purposes. Management believes recognizing these amounts for core earnings purposes in the period of transfer of economic risk is a reasonable supplemental measure of our performance.

As discussed in Note 2 to the consolidated financial statements included elsewhere in this Quarterly Report, 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 consider the gain or loss on our hedging positions related to assets that we still own as of the reporting date to be “open hedging positions.” While recognized for GAAP purposes, we exclude the results on the hedges from core earnings until the related asset is sold and the hedge position is considered “closed,” whereupon they would then be included in core earnings in that period. These are reflected as “Adjustments for unrecognized derivative results” for purposes of computing core earnings for the period. We believe that excluding these specifically identified gains and losses associated with the open hedging positions adjusts for timing differences between when we recognize changes in the fair values of our assets and changes in the fair value of the derivatives used to hedge such assets.

As more fully discussed in Note 2 to the consolidated financial statements included elsewhere in this Quarterly Report, our investments in Agency interest-only securities and equity securities are recorded at fair value with changes in fair value recorded in current period earnings. We believe that excluding these specifically identified gains and losses associated with the fair value securities adjusts for timing differences between when we recognize changes in the fair values of our assets.

Our results of operations were significantly impacted by the actions we took to generate liquidity and pay down mark-to-market debt in direct response to the unfavorable market conditions that occurred near the onset of the COVID-19 pandemic. The actions taken by management had multiple impacts on core earnings for the three months ended June 30, 2020. Management believes the actions taken were prompted by the unusual market conditions and therefore outside of Ladder’s core operations. Management believes adjusting for certain transactional charges/gains related to the impact of COVID-19 on its performance measures provides a more useful guide to assess the ongoing core operations of the Company.

Set forth below is a reconciliation of income (loss) before taxes to core earnings ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Income (loss) before taxes	$	(5,743)	$	38,292	$	(24,345)	$	59,970
Net (income) loss attributable to noncontrolling interest in consolidated joint ventures (GAAP)(1)	246		299		(1,276)		738
Our share of real estate depreciation, amortization and gain adjustments(2)(3)	8,875		6,590		10,248		12,257
Adjustments for unrecognized derivative results(4)	(8,630)		2,187		8,959		11,302
Unrealized (gain) loss on fair value securities	(1,649)		861		(137)		(1,227)
Adjustment for economic gain on loan sales not recognized under GAAP for which risk has been substantially transferred, net of reversal/amortization	189		(645)		(45)		(648)
Adjustment for CECL reserves	(729)		—		17,852		—
Non-cash stock-based compensation	3,272		3,371		15,431		15,465
Transactional adjustments (response to COVID-19)(5)	16,939		—		16,939		—
Core earnings	$	12,770	$	50,955	$	43,626	$	97,857

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(1) Includes $4 thousand and $7 thousand of net income which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three and six months ended June 30, 2020, respectively. Includes $8 thousand and $16 thousand of net income which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the consolidated statements of income for the three and six months ended June 30, 2019, respectively.

(2)	The following is a reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments presented in the computation of core earnings in the preceding table ($ in thousands):
		Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019
	Total GAAP depreciation and amortization	$	9,816	$	9,935	$	19,825	$	20,162
	Less: Depreciation and amortization related to non-rental property fixed assets	(25)		(25)		(50)		(49)
	Less: Non-controlling interest in consolidated joint ventures’ share of accumulated depreciation and amortization and unrecognized passive interest in unconsolidated joint ventures	(349)		(1,070)		(941)		(1,976)
	Our share of real estate depreciation and amortization	9,442		8,840		18,834		18,137
	Realized gain from accumulated depreciation and amortization on real estate sold (see below)	(40)		(1,935)		(9,679)		(5,421)
	Less: Non-controlling interest in consolidated joint ventures’ share of accumulated depreciation and amortization on real estate sold	—		42		2,147		42
	Our share of accumulated depreciation and amortization on real estate sold	(40)		(1,893)		(7,532)		(5,379)
	Less: Operating lease income on above/below market lease intangible amortization	(527)		(357)		(1,054)		(501)
	Our share of real estate depreciation, amortization and gain adjustments	$	8,875	$	6,590	$	10,248	$	12,257
	GAAP gains/losses on sales of real estate include the effects of previously recognized real estate depreciation and amortization. For purposes of core earnings, our share of real estate depreciation and amortization is eliminated and, accordingly, the resultant gain/losses also must be adjusted. Following is a reconciliation of the related consolidated GAAP amounts to the amounts reflected in core earnings ($ in thousands):
		Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019
	GAAP realized gain (loss) on sale of real estate, net	$	(1)	$	(1,124)	$	10,528	$	(1,119)
	Adjusted gain/loss on sale of real estate for purposes of core earnings	41		$	3,017	(2,996)		6,498
	Our share of accumulated depreciation and amortization on real estate sold	$	40	$	1,893	$	7,532	$	5,379
(3)	As more fully discussed in Note 5, Real Estate and Related Intangibles, Net, Note 7, Debt Obligations, Net and Note 15, Fair Value of Financial Instruments to the Company’s Consolidated Financial Statements for the three months ended March 31, 2019, the Company recognized $5.7 million of operating lease income from prepayment of a lease, a $1.1 million loss on extinguishment of debt and a $1.4 million impairment of real estate related to a single-tenant two-story office building in Wayne, NJ. This property was sold on May 1, 2019. For core earnings, the Company recognizes the net impact of these events in the period the sale was realized. Accordingly, the $3.3 million net impact of the income and losses discussed above were excluded from core earnings for the three months ended March 31, 2019 and have been included in core earnings for the three and six months ended June 30, 2019.

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(4)	The following is a reconciliation of GAAP net results from derivative transactions to our unrecognized derivative result presented in the computation of core earnings in the preceding table ($ in thousands):
		Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019
	Net results from derivative transactions	$	(813)	$	(15,457)	$	(16,248)	$	(26,491)
	Hedging interest expense	(843)		1,640		(311)		1,491
	Hedging realized result	10,286		11,630		7,600		13,698
	Adjustments for unrecognized derivative results	$	8,630	$	(2,187)	$	(8,959)	$	(11,302)
(5)	The impact from COVID-19 included adjustments related to the unusual market conditions and actions taken by management including: (a) $6.7 million of losses from sales of performing first mortgage loans included in sale of loans, net, (b) $15.4 million of losses from sales of CMBS, (c) $3.7 million of loss from conduit loan sales, (d) $6.5 million of prepayment penalties related to pay downs of mark-to-market debt included in interest expense, (e) $2.1 million of professional fee expenses included in operating expenses and (f) $0.2 million of severance costs included in salaries and employee benefits. The $34.5 million total of the preceding amounts was partially offset by (g) $19.0 million of gains from the repurchase of and extinguishment of unsecured corporate bond debt at a discount from par, net of (h) $1.5 million of accelerated premium amortization included in interest expense.

(b)Set forth below is a reconciliation of the COVID-19 losses from sales of highly rated, relatively short duration CMBS ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Loss on sale of securities - COVID-19 related	$	(14,670)	$	—	$	(14,670)	$	—
Hedge (loss) related to sale of securities, included in net results from derivative transactions	(698)		—		(698)		—
Losses from sales of CMBS	$	(15,368)	$	—	$	(15,368)	$	—

(c)Set forth below is a reconciliation of the COVID-19 loss from conduit loan sales ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Income from sales of loans, net - COVID-19 related	$	(1,680)	$	—	$	(1,680)	$	—
Hedge (loss) related to sales of loans, included in net results from derivative transactions	(1,994)		—		(1,994)		—
Losses from conduit loan sales	$	(3,674)	$	—	$	(3,674)	$	—

Core earnings has limitations as an analytical tool. Some of these limitations are:

•Core earnings does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations and is not necessarily indicative of cash necessary to fund cash needs; and

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

Because of these limitations, core earnings should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders or any other performance measures calculated in accordance with GAAP, or as an alternative to cash flows from operations as a measure of our liquidity.

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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 core earnings should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Adjusted Leverage

We present adjusted leverage, which is a non-GAAP financial measure, as a supplemental measure of our performance. We define adjusted leverage as the ratio of (i) debt obligations, net of deferred financing costs, adjusted for non-recourse indebtedness related to securitizations that is consolidated on our GAAP balance sheet and liability for transfers not considered sales to (ii) GAAP total equity. We believe adjusted leverage assists investors in comparing our leverage across reporting periods on a consistent basis by excluding non-recourse debt related to securitized loans. In addition, adjusted leverage is used to determine compliance with financial covenants. (Refer to “Financing Strategy in Current Market Conditions” and “Financial Covenants” for further discussion about our compliance with covenants.)

Set forth below is an unaudited computation of adjusted leverage ($ in thousands):

	June 30, 2020		December 31, 2019
Debt obligations, net	$	4,953,514	$	4,859,873
Less: CLO debt	(299,605)		—
Adjusted debt obligations	4,653,909		4,859,873
Total equity	1,508,380		1,638,977
Adjusted leverage	3.1		3.0

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

For a discussion of current market conditions resulting from the COVID-19 pandemic, refer to Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and to Part II, Item 1A. “Risk Factors”.

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 net interest income includes interest from both fixed and floating-rate debt. The percentage of the Company’s assets and liabilities bearing interest at fixed and floating rates may change over time, and asset composition may differ materially from debt composition. 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 five 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.

The following table summarizes the change in net income for a 12-month period commencing June 30, 2020 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 June 30, 2020, both adjusted for the effects of our interest rate hedging activities ($ in thousands):

	Projected change in net income(1)		Projected change in portfolio value
Change in interest rate:
Decrease by 1.00%	$	(7,340)	$	10,608
Increase by 1.00%	9,533		(10,483)

(1) Subject to limits for floors on our floating rate investments and indebtedness.

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 change in estimated fair value of Agency interest-only securities is recorded in current period earnings. 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.

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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 be 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. The Company’s captive insurance company subsidiary, Tuebor, is subject to state regulations which require that dividends may only be made with regulatory approval. The Company’s broker-dealer subsidiary, LCS, is also required to be compliant with FINRA and SEC regulations which require that dividends may only be made with regulatory approval. LCS deregistered with the SEC effective May 28, 2020. On May 29, 2020, LCS filed a broker-dealer withdrawal form with FINRA, which became effective on July 28, 2020.

Credit Risk

The COVID-19 pandemic has significantly impacted the commercial real estate markets, causing reduced occupancy, requests from tenants for rent deferral or abatement, and delays in property renovations currently planned or underway. These negative conditions may persist into the future and impair borrowers’ ability to pay principal and interest due under our loan agreements. We maintain robust asset management relationships with our borrowers and have utilized these relationships to address the potential impacts of the COVID-19 pandemic on our loans secured by properties experiencing cash flow pressure, most significantly hospitality assets. Some of our borrowers have indicated that due to the impact of the COVID-19 pandemic, they will be unable to timely execute their business plans, have had to temporarily close their businesses, or have experienced other negative business consequences and have requested temporary interest deferral or forbearance, or other modifications of their loans. Accordingly, we have discussed with our borrowers potential near-term defensive loan modifications, which could include repurposing of reserves, temporary deferrals of interest, or performance test or covenant waivers on loans collateralized by assets directly impacted by the COVID-19 pandemic, and which would typically be coupled with an additional equity commitment and/or guaranty from sponsors.

Based on the limited loan modifications completed to date, we are encouraged by the tone of these conversations and our borrowers’ initial response to the COVID-19 pandemic’s impacts on their properties. We believe our loan sponsors are generally committed to supporting assets collateralizing our loans through additional equity investments. Our portfolio’s low weighted-average LTV of 70.4% as of June 30, 2020 reflects significant equity value that our sponsors are motivated to protect through periods of cyclical disruption. While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain investments.

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 or interest rate 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.

105

Risks Related to Real Estate

Real estate and real estate-related assets, including loans and commercial real estate-related securities, 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; environmental conditions; competition from comparable property types or properties; changes in tenant mix or performance and retroactive changes to building or similar codes and rent regulations. 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 and securities repurchase agreements and credit facilities with certain lenders to finance its real estate investment transactions. These 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 advances or loans. In addition, the Company’s Notes are subject to covenants, including maintenance of unencumbered assets, 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’s failure to comply with these covenants could result in an event of default, which could result in the Company being required to repay these borrowings before their due date.

We were in compliance with all covenants as described in the Company’s Annual Report, as of June 30, 2020.

Net of the $826.1 million of unrestricted cash held as of June 30, 2020, our adjusted leverage ratio would be significantly below 3.0x. In late March 2020, as the COVID-19 crisis evolved, management began executing on a plan to mitigate uncertainty in financial markets by increasing liquidity and obtaining additional non-recourse and non-mark-to-market financing. Partly as a result of maintaining conservative cash levels as of March 31, 2020, the Company was not in compliance with its 3.5x maximum leverage covenant with certain of its lenders but had the benefit of a contractually provided 30-day cure period during which the Company cured such non-compliance by paying down debt (as defined in the relevant borrowing agreements). Refer to Financing Strategy in Current Market Conditions for further disclosures surrounding deleveraging actions completed during the second quarter of 2020.  

Diversification Risk

The assets of the Company are concentrated in the commercial 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 commercial 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 change 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, LCS, which was initially licensed and capitalized to do business in July 2010. LCS is required to be compliant with FINRA and SEC requirements on an ongoing basis and is subject to multiple operating and reporting requirements to which all broker-dealer entities are subject. LCS deregistered with the SEC effective May 28, 2020. On May 29, 2020, LCS filed a broker-dealer withdrawal form with FINRA, which became effective on July 28, 2020. Ladder Capital Asset Management LLC (“LCAM”) is a registered investor. LCAM is required to be compliant with SEC requirements on an ongoing and is subject to multiple operating and reporting requirements to which all registered investment advisors are subject. On June 22, 2020, LCAM deregistered with the SEC. Additionally, 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.

106

Capital Market Risks

The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. U.S. financial markets, in particular, are experiencing limited liquidity, and forced selling by certain market participants to meet current obligations has put further downward pressure on asset prices. In reaction to these volatile and unpredictable market conditions, banks and other lenders have generally restricted lending activity and requested margin posting or repayments where applicable for secured loans collateralized by assets with depressed valuations. Ladder has satisfied all margin calls on a timely basis.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as required by Rules 13a-15 and 15d-15 under the Exchange Act as of June 30, 2020. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective, as of June 30, 2020, to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1. 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 advisers and captive insurance company, are subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters. LCS deregistered with the SEC effective May 28, 2020. On May 29, 2020, LCS filed a broker-dealer withdrawal form with FINRA, which became effective on July 28, 2020. On June 22, 2020, LCAM deregistered with the SEC. We are not presently a party to any material 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.

107

Item 1A. Risk Factors

There have been no material changes during the six months ended June 30, 2020 to the risk factors in Item 1A. in our Annual Report, except as set forth below:

The outbreak of the novel coronavirus (COVID-19) has had, and will continue to have for the foreseeable future, an adverse effect on our business, financial condition and results of operations, and we are unable to predict the full extent or nature of these impacts at this time.

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China. The World Health Organization has declared the COVID-19 outbreak a pandemic and public health emergency of international concern. Public health officials have recommended and mandated precautions to mitigate the spread of COVID-19, including the closing of non-essential businesses, prohibitions on congregating in heavily populated areas and shelter-in-place orders or similar measures. As the COVID-19 pandemic develops, governments, businesses and other third parties will likely continue to implement restrictions or policies that adversely impact consumer spending, global capital markets, the global economy and stock prices.

The continued spread of COVID-19 globally has had, and is likely to continue to have for the foreseeable future, a material adverse effect on the global and U.S. economies as a whole, as well as on the states and cities where we own properties or have properties as collateral. A prolonged economic downturn could adversely and materially affect our business, results of operations and financial condition.

The COVID-19 outbreak is negatively impacting almost every industry, whether directly or indirectly. Businesses have been, continue to be or may periodically be, required by the local, state or federal authorities to cease or reduce operations, thereby preventing them from generating revenue. The extent of the effects will depend, in part, upon the breadth and duration of these economic shutdowns. The effects on commercial real estate have varied by sector and market. Some properties securing our loans to borrowers or owned by us, including hotels and certain retail properties, have experienced, or are likely to experience, material disruptions to their businesses from the end consumer and underlying property tenants. These disruptions could lead to or continue to cause a material decline in operating cash flows from these assets, and could impact our borrowers’ ability to pay debt service or property expenses or repay our loans to them at maturity or affect our ability to service our own borrowings secured by these loans or properties. Further, long-term structural changes may affect the value of certain businesses and properties. For example, restaurants have been required to reduce capacity and other businesses have moved to, and may continue, remote work arrangements, which may reduce the demand for certain types of office space. Without the requirement to be close to the office, many cities have experienced a flight to local suburbs that has led to reduced multifamily rental occupancy.

In addition, it is possible that there could be a return of volatility to the credit markets, which may impact our ability to access capital on favorable terms, or at all. Our ability to execute on one or more of our business models, such as the origination of loans for securitization, may be adversely affected by the underlying economic and credit market disruptions. In addition, the effects of the outbreak on credit markets, tenants and borrowers negatively affected, and may in the future negatively affect, the prices of securities that we hold, which resulted in, and may in the future result in, margin calls under our repurchase agreements. To the extent we are not able to satisfy such margin calls, it would result in a default under such repurchase agreements and could result in a default under our other debt instruments, including our senior secured credit agreement or the indentures governing our notes.

The COVID-19 crisis has created uncertainty regarding the valuation of commercial properties. Continuing uncertainty or a significant drop in prices may affect the ability of our borrowers to refinance loans we have extended to them and/or may impact the value of real estate we own. In addition, if loans we have extended become impaired, we may be required to establish reserves against losses, which can impact our earnings and/or our liquidity.

The ultimate extent of the COVID-19 outbreak and its impact on our business, global markets and overall economic activity are unknown and impossible to predict with certainty at this time.

108

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

During the three months ended June 30, 2020, 6,779,225 Series REIT LP Units and 6,779,225 Series TRS LP Units were collectively exchanged for 6,779,225 shares of Class A common stock and 6,779,225 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges, which were effected in reliance on Section 4(a)(2) of the Securities Act.

Stock Repurchases

On October 30, 2014, the board of directors authorized the Company to repurchase up to $50.0 million of the Company’s Class A common stock from time to time without further approval. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

The following table is a summary of the Company’s repurchase activity of its Class A common stock during the three months ended June 30, 2020 ($ in thousands, except per share data and average price paid per share):

ISSUER PURCHASE OF EQUITY SECURITIES
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2020 - April 30, 2020	—	$	—	—	$	39,931
May 1, 2020 - May 31, 2020	—	—		—	39,931
June 1, 2020 - June 30, 2020	63,998	7.52		63,998	39,450
Total	63,998	$	7.52	63,998	$	39,450

(1)In August 2015, we publicly disclosed that our board of directors had authorized the Company to repurchase up to $50.0 million of the Company’s Class A common stock from time to time.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

109

Item 6. Exhibits

EXHIBIT INDEX
EXHIBIT NO.	DESCRIPTION
4.1	Purchase Right, dated as of April 30, 2020, by and among Ladder Capital Corp and Beaverhead Capital, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on May 4, 2020)
4.2	Registration Rights Agreement, dated as of April 30, 2020, by and among Ladder Capital Corp and Beaverhead Capital, LLC (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on May 4, 2020)
31.1	Certification of Brian Harris pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Marc Fox pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Brian Harris pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Marc Fox pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019; (ii) the Consolidated Statements of Income for the three and six months ended June 30, 2020 and 2019; (iii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019; (iv) the Consolidated Statement of Changes in Equity for the three and six months ended June 30, 2020 and 2019; (v) the Consolidated Statements of Cash Flows for the three and six months ended June 30, 2020 and 2019; and (vi) the Notes to the Consolidated Financial Statements.

*                                        The certifications attached hereto as Exhibits 32.1 and 32.2 are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

110

SIGNATURES

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

	LADDER CAPITAL CORP
	(Registrant)
Date: July 30, 2020	By:	/s/ BRIAN HARRIS
		Brian Harris
		Chief Executive Officer
Date: July 30, 2020	By:	/s/ MARC FOX
		Marc Fox
		Chief Financial Officer

111

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, Brian Harris, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Ladder Capital Corp;

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

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

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

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

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

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

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

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

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

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

Date: July 30, 2020	/s/ Brian Harris
	Brian Harris
	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, Marc Fox, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Ladder Capital Corp;

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

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

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

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

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

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

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

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

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

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

Date: July 30, 2020	/s/ Marc Fox
	Marc Fox
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION FURNISHED PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the six months ended June 30, 2020 (the “Report”) by Ladder Capital Corp (the “Company”), I, Brian Harris, as Chief Executive Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 30, 2020	/s/ Brian Harris
	Brian Harris
	Chief Executive Officer (Principal Executive Officer)

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

EX-32.2

Exhibit 32.2

CERTIFICATION FURNISHED PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the six months ended June 30, 2020 (the “Report”) by Ladder Capital Corp (the “Company”), I, Marc Fox, as Chief Financial Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 30, 2020	/s/ Marc Fox
	Marc Fox
	Chief Financial Officer (Principal Financial Officer)

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

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Jul. 15, 2020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-36299
Entity Registrant Name	Ladder Capital Corp
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	80-0925494
Entity Address, Address Line One	345 Park Avenue,
Entity Address, City or Town	New York,
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10154
City Area Code	212
Local Phone Number	715-3170
Title of 12(b) Security	Class A common stock, $0.001 par value
Trading Symbol	LADR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Smaller Reporting Company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001577670
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Common Class A
Entity Common Stock, Shares Outstanding		115,015,738
Common Class B
Entity Common Stock, Shares Outstanding		5,379,708

XML

Consolidated Balance Sheets - USD ($) $ in Thousands		Jun. 30, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	[1]	$ 826,059	$ 58,171
Restricted cash	[1]	47,945	297,575
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	[1]	2,955,084	3,257,036
Allowance for loan losses		(49,102)	(20,500)
Mortgage loan receivables held for sale	[1]	85,977	122,325
Real estate securities	[1]	1,506,713	1,721,305
Real estate and related lease intangibles, net	[1]	1,042,210	1,048,081
Investments in and advances to unconsolidated joint ventures	[1]	48,919	48,433
FHLB stock	[1]	61,619	61,619
Derivative instruments	[1]	380	693
Accrued interest receivable	[1]	18,783	21,066
Other assets	[1]	64,963	53,348
Total assets	[1]	6,609,550	6,669,152
Liabilities
Debt obligations, net	[1]	4,953,514	4,859,873
Dividends payable	[1]	23,583	38,696
Accrued expenses	[1]	55,616	72,397
Other liabilities	[1]	68,457	59,209
Total liabilities	[1]	5,101,170	5,030,175
Commitments and contingencies (Note 18)	[1]	0	0
Equity
Additional paid-in capital	[1]	1,649,170	1,532,384
Treasury stock, 2,457,319 and 3,184,269 shares, at cost	[1]	(53,619)	(42,699)
Retained earnings (dividends in excess of earnings)	[1]	(120,082)	(35,746)
Accumulated other comprehensive income (loss)	[1]	(45,080)	4,218
Total shareholders’ equity	[1]	1,430,510	1,458,277
Noncontrolling interest in operating partnership	[1]	70,968	172,054
Noncontrolling interest in consolidated joint ventures	[1]	6,902	8,646
Total equity	[1]	1,508,380	1,638,977
Total liabilities and equity	[1]	6,609,550	6,669,152
Common Class A
Equity
Common stock	[1]	116	108
Common Class B
Equity
Common stock	[1]	$ 5	$ 12

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Treasury stock (in shares)	2,457,319	3,184,269
Common Class A
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	600,000,000	600,000,000
Common stock, issued (in shares)	117,473,057	115,015,738
Common stock, outstanding (in shares)	110,693,832	107,509,563
Common Class B
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	5,379,708	12,158,933
Common stock, outstanding (in shares)	5,379,708	12,158,933

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Consolidated Statements of Income - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net interest income
Interest income	$ 62,096,000	$ 85,322,000	$ 134,686,000	$ 171,789,000
Interest expense	68,425,000	52,369,000	119,827,000	103,618,000
Net interest income (expense)	(6,329,000)	32,953,000	14,859,000	68,171,000
Provision for/(release of) loan loss reserves	(729,000)	300,000	25,852,000	600,000
Net interest income (expense) after provision for loan losses	(5,600,000)	32,653,000	(10,993,000)	67,571,000
Other income (loss)
Operating lease income	23,773,000	27,780,000	50,101,000	56,701,000
Sale of loans, net	(744,000)	20,264,000	261,000	27,342,000
Realized gain (loss) on securities	(14,798,000)	4,464,000	(11,787,000)	7,329,000
Unrealized gain (loss) on equity securities	401,000	(990,000)	(132,000)	1,088,000
Unrealized gain (loss) on Agency interest-only securities	98,000	11,000	174,000	22,000
Realized gain (loss) on sale of real estate, net	(1,000)	(1,124,000)	10,528,000	(1,119,000)
Impairment of real estate	0	0	0	(1,350,000)
Fee and other income	3,505,000	7,196,000	5,024,000	11,882,000
Net result from derivative transactions	(813,000)	(15,457,000)	(16,248,000)	(26,491,000)
Earnings (loss) from investment in unconsolidated joint ventures	471,000	1,564,000	912,000	2,522,000
Gain (loss) on extinguishment/defeasance of debt	19,017,000	0	21,077,000	(1,070,000)
Total other income (loss)	30,909,000	43,708,000	59,910,000	76,856,000
Costs and expenses
Salaries and employee benefits	7,001,000	14,907,000	24,023,000	38,481,000
Operating expenses	6,224,000	6,012,000	12,018,000	11,413,000
Real estate operating expenses	6,034,000	6,032,000	13,981,000	11,506,000
Fee expense	1,977,000	1,183,000	3,415,000	2,895,000
Depreciation and amortization	9,816,000	9,935,000	19,825,000	20,162,000
Total costs and expenses	31,052,000	38,069,000	73,262,000	84,457,000
Income (loss) before taxes	(5,743,000)	38,292,000	(24,345,000)	59,970,000
Income tax expense (benefit)	(550,000)	2,219,000	(5,091,000)	(634,000)
Net income (loss)	(5,193,000)	36,073,000	(19,254,000)	60,604,000
Net (income) loss attributable to noncontrolling interest in consolidated joint ventures	250,000	307,000	(1,269,000)	754,000
Net (income) loss attributable to noncontrolling interest in operating partnership	$ 754,000	$ (4,136,000)	$ 605,000	$ (6,939,000)
Earnings per share:
Basic (in dollars per share)	$ (0.04)	$ 0.31	$ (0.19)	$ 0.52
Diluted (in dollars per share)	$ (0.04)	$ 0.30	$ (0.19)	$ 0.51
Weighted average shares outstanding:
Basic (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Diluted (in shares)	106,809,987	105,892,420	106,569,892	105,742,589
Common Class A
Costs and expenses
Net income (loss) attributable to Class A common shareholders	$ (4,189,000)	$ 32,244,000	$ (19,918,000)	$ 54,419,000
Earnings per share:
Basic (in dollars per share)	$ (0.04)	$ 0.31	$ (0.19)	$ 0.52
Diluted (in dollars per share)	$ (0.04)	$ 0.30	$ (0.19)	$ 0.51
Weighted average shares outstanding:
Basic (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Diluted (in shares)	106,809,987	105,892,420	106,569,892	105,742,589
Dividends per share of Class A common stock (in dollars per share)	$ 0.200	$ 0.340	$ 0.540	$ 0.680

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net income (loss)	$ (5,193)	$ 36,073	$ (19,254)	$ 60,604
Unrealized gain (loss) on securities, net of tax:
Unrealized gain (loss) on real estate securities, available for sale	11,532	10,053	(64,721)	26,024
Reclassification adjustment for (gain) loss included in net income (loss)	14,591	(4,464)	12,837	(7,242)
Total other comprehensive income (loss)	26,123	5,589	(51,884)	18,782
Comprehensive income (loss)	20,930	41,662	(71,138)	79,386
Comprehensive (income) loss attributable to noncontrolling interest in consolidated joint ventures	250	307	(1,269)	754
Comprehensive income (loss) of combined Class A common shareholders and Operating Partnership unitholders	21,180	41,969	(72,407)	80,140
Comprehensive (income) loss attributable to noncontrolling interest in operating partnership	(1,757)	(4,718)	5,959	(8,983)
Common Class A
Unrealized gain (loss) on securities, net of tax:
Comprehensive income (loss) attributable to Class A common shareholders	$ 19,423	$ 37,251	$ (66,448)	$ 71,157

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Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total		Cumulative Effect, Period of Adoption, Adjustment	Common Class A	Common Class B	Common Stock Common Class A	Common Stock Common Class B	Additional Paid-in Capital	Treasury Stock	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	AOCI Attributable to Parent	Noncontrolling Interest in Operating Partnership	Noncontrolling Interest in Consolidated Joint Ventures
Beginning Balance (in shares) at Dec. 31, 2018						103,941,000	13,118,000
Beginning Balance at Dec. 31, 2018	$ 1,643,635					$ 105	$ 13	$ 1,471,157	$ (32,815)	$ 11,342		$ (4,649)	$ 188,427	$ 10,055
Increase Decrease in Stockholders' Equity
Contributions	191													191
Distributions	(8,799)												(8,537)	(262)
Amortization of equity based compensation	14,761							14,761
Purchase of treasury stock (in shares)						(40,000)
Purchase of treasury stock	(637)								(637)
Re-issuance of treasury stock (in shares)						68,000
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units (in shares)						(461,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(8,083)								(8,083)
Forfeitures (in shares)						(9,000)
Dividends declared	(72,785)									(72,785)
Grants of restricted stock (in shares)						1,478,000
Grants of restricted stock						$ 1		(1)
Net income (loss)	60,604									54,419			6,939	(754)
Other comprehensive income (loss)	18,782											16,738	2,044
Rebalancing of ownership percentage between Company and Operating Partnership								281				17	(298)
Exchange of noncontrolling interest for common stock (in shares)				1,139,411	(1,139,411)	1,139,000	(1,139,000)
Exchange of noncontrolling interest for common stock	405					$ 1	$ (1)	16,449				65	(16,109)
Stock dividends (in shares)						1,435,000	180,000
Stock dividends						$ 1		23,822		(23,823)
Ending Balance (in shares) at Jun. 30, 2019						107,551,000	12,159,000
Ending Balance at Jun. 30, 2019	1,648,074					$ 108	$ 12	1,526,469	(41,535)	(30,847)		12,171	172,466	9,230
Beginning Balance (in shares) at Mar. 31, 2019						106,562,000	13,198,000
Beginning Balance at Mar. 31, 2019	1,644,243					$ 107	$ 13	1,508,452	(40,799)	(26,549)		7,080	186,310	9,629
Increase Decrease in Stockholders' Equity
Contributions	114													114
Distributions	(4,490)												(4,284)	(206)
Amortization of equity based compensation	3,469							3,469
Purchase of treasury stock (in shares)						(40,000)
Purchase of treasury stock	(637)								(637)
Re-issuance of treasury stock (in shares)						5,000
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units (in shares)						(6,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(99)								(99)
Forfeitures (in shares)						(9,000)
Dividends declared	(36,542)									(36,542)
Net income (loss)	36,073									32,244			4,136	(307)
Other comprehensive income (loss)	5,589											5,007	582
Rebalancing of ownership percentage between Company and Operating Partnership								(408)				14	394
Exchange of noncontrolling interest for common stock (in shares)						1,039,000	(1,039,000)
Exchange of noncontrolling interest for common stock	354					$ 1	$ (1)	14,956				70	(14,672)
Ending Balance (in shares) at Jun. 30, 2019						107,551,000	12,159,000
Ending Balance at Jun. 30, 2019	1,648,074					$ 108	$ 12	1,526,469	(41,535)	(30,847)		12,171	172,466	9,230
Beginning Balance (in shares) at Dec. 31, 2019						107,509,000	12,160,000
Beginning Balance at Dec. 31, 2019	1,638,977	[1]	$ (5,797)			$ 108	$ 12	1,532,384	(42,699)	(35,746)	$ (5,797)	4,218	172,054	8,646
Increase Decrease in Stockholders' Equity
Contributions	651													651
Distributions	(9,996)												(6,332)	(3,664)
Issuance of purchase right	8,425							8,425
Amortization of equity based compensation	16,738							16,738
Purchase of treasury stock (in shares)						(210,000)
Purchase of treasury stock	(1,688)								(1,688)
Re-issuance of treasury stock (in shares)						1,466,000
Re-issuance of treasury stock						$ 1		(1)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units (in shares)						(505,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(9,232)					$ 0			(9,232)
Forfeitures (in shares)						(24,000)
Dividends declared	(58,621)									(58,621)
Net income (loss)	(19,254)									(19,918)			(605)	1,269
Other comprehensive income (loss)	(51,884)											(46,530)	(5,354)
Rebalancing of ownership percentage between Company and Operating Partnership								(916)				2,147	(1,231)
Exchange of noncontrolling interest for common stock (in shares)						6,779,000	(6,779,000)
Exchange of noncontrolling interest for common stock	61					$ 7	$ (7)	92,540				(4,915)	(87,564)
Ending Balance (in shares) at Jun. 30, 2020						115,015,000	5,381,000
Ending Balance at Jun. 30, 2020	1,508,380	[1]				$ 116	$ 5	1,649,170	(53,619)	(120,082)		(45,080)	70,968	6,902
Beginning Balance (in shares) at Mar. 31, 2020						108,337,000	12,160,000
Beginning Balance at Mar. 31, 2020	1,500,827					$ 109	$ 12	1,546,143	(52,983)	(94,171)		(65,920)	160,466	7,171
Increase Decrease in Stockholders' Equity
Contributions	349													349
Distributions	(2,566)												(2,198)	(368)
Issuance of purchase right	8,425							8,425
Amortization of equity based compensation	2,712							2,712
Purchase of treasury stock (in shares)						(64,000)
Purchase of treasury stock	(482)								(482)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units (in shares)						(19,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(154)								(154)
Forfeitures (in shares)						(18,000)
Dividends declared	(21,722)									(21,722)
Net income (loss)	(5,193)									(4,189)			(754)	(250)
Other comprehensive income (loss)	26,123											23,612	2,511
Rebalancing of ownership percentage between Company and Operating Partnership	0							(650)				2,143	(1,493)
Exchange of noncontrolling interest for common stock (in shares)						6,779,000	(6,779,000)
Exchange of noncontrolling interest for common stock						$ 7	$ (7)	92,540				(4,915)	(87,564)
Ending Balance (in shares) at Jun. 30, 2020						115,015,000	5,381,000
Ending Balance at Jun. 30, 2020	$ 1,508,380	[1]				$ 116	$ 5	$ 1,649,170	$ (53,619)	$ (120,082)		$ (45,080)	$ 70,968	$ 6,902

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (19,254,000)	$ 60,604,000
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
(Gain) loss on extinguishment/defeasance of debt	(21,077,000)	1,070,000
Depreciation and amortization	19,825,000	20,162,000
Unrealized (gain) loss on derivative instruments	187,000	(1,511,000)
Unrealized (gain) loss on equity securities	132,000	(1,088,000)
Unrealized (gain) loss on Agency interest-only securities	(174,000)	(22,000)
Provision for loan losses	25,852,000	600,000
Impairment of real estate	0	1,350,000
Amortization of equity based compensation	16,738,000	14,761,000
Amortization of deferred financing costs included in interest expense	7,705,000	5,721,000
Amortization of premium on mortgage loan financing	(587,000)	(774,000)
Amortization of above- and below-market lease intangibles	(1,187,000)	(397,000)
Amortization of premium/(accretion) of discount and other fees on loans	(8,917,000)	(10,294,000)
Amortization of premium/(accretion) of discount and other fees on securities	443,000	(87,000)
Realized (gain) loss on sale of mortgage loan receivables held for sale	(6,926,000)	(27,342,000)
Realized (gain) loss on sale of mortgage loan receivables held for investment	6,665,000	0
Realized (gain) loss on disposition of loan	51,000	0
Realized (gain) loss on securities	12,512,000	(7,329,000)
Realized (gain) loss on sale of real estate, net	(10,528,000)	1,119,000
Realized gain on sale of derivative instruments	(211,000)	108,000
Origination of mortgage loan receivables held for sale	(212,845,000)	(333,342,000)
Repayment of mortgage loan receivables held for sale	292,000	370,000
Proceeds from sales of mortgage loan receivables held for sale	255,827,000	430,649,000
(Income) loss from investments in unconsolidated joint ventures in excess of distributions received	(912,000)	(2,522,000)
Distributions from operations of investment in unconsolidated joint ventures	0	3,067,000
Deferred tax asset (liability)	9,914,000	6,336,000
Changes in operating assets and liabilities:
Accrued interest receivable	2,284,000	2,705,000
Other assets	(15,361,000)	(6,310,000)
Accrued expenses and other liabilities	(16,900,000)	(24,805,000)
Net cash provided by (used in) operating activities	43,453,000	132,545,000
Cash flows from investing activities:
Origination of mortgage loan receivables held for investment	(334,347,000)	(484,496,000)
Repayment of mortgage loan receivables held for investment	437,525,000	781,916,000
Purchases of real estate securities	(438,546,000)	(827,999,000)
Repayment of real estate securities	63,032,000	110,443,000
Basis recovery of Agency interest-only securities	3,853,000	6,413,000
Proceeds from sales of real estate securities	532,460,000	384,356,000
Purchases of real estate	(6,239,000)	(5,071,000)
Capital improvements of real estate	(1,980,000)	(1,707,000)
Proceeds from sale of real estate	11,426,000	8,521,000
Capital contributions and advances to investment in unconsolidated joint ventures	0	(56,424,000)
Capital distribution from investment in unconsolidated joint ventures	426,000	38,625,000
Capitalization of interest on investment in unconsolidated joint ventures	0	(142,000)
Purchase of FHLB stock	0	(3,704,000)
Purchase of derivative instruments	(111,000)	(159,000)
Sale of derivative instruments	446,000	50,000
Net cash provided by (used in) investing activities	433,309,000	(49,378,000)
Cash flows from financing activities:
Deferred financing costs paid	(17,370,000)	(4,453,000)
Proceeds from borrowings under debt obligations	8,046,797,000	6,377,515,000
Repayment of borrowings under debt obligations	(7,902,356,000)	(6,213,678,000)
Cash dividends paid to Class A common shareholders	(73,735,000)	(108,240,000)
Payment of liability assumed in exchange for shares for the minimum withholding taxes on vesting restricted stock	(9,232,000)	(8,083,000)
Purchase of treasury stock	(1,688,000)	(637,000)
Issuance of purchase right	8,425,000	0
Net cash provided by (used in) financing activities	41,496,000	33,816,000
Net increase (decrease) in cash, cash equivalents and restricted cash	518,258,000	116,983,000
Cash, cash equivalents and restricted cash at beginning of period	355,746,000	98,450,000
Cash, cash equivalents and restricted cash at end of period	874,004,000	215,433,000
Supplemental information:
Cash paid for interest, net of amounts capitalized	98,220,000	98,832,000
Cash paid (received) for income taxes	(38,000)	3,591,000
Non-cash investing and financing activities:
Repayment in transit of mortgage loans receivable held for investment (other assets)	9,078,000	0
Repayment of mortgage loans receivable held for sale	0	127,000
Settlement of mortgage loan receivable held for investment by real estate, net	(25,177,000)	(17,851,000)
Transfer from mortgage loans receivable held for sale to mortgage loans receivable held for investment, net, at amortized cost	0	15,504,000
Real estate acquired in settlement of mortgage loan receivable held for investment, net	25,435,000	17,851,000
Net settlement of sale of real estate, subject to debt - real estate	(19,098,000)	(7,144,000)
Net settlement of sale of real estate, subject to debt - debt obligations	19,098,000	7,144,000
Exchange of noncontrolling interest for common stock	87,571,000	16,109,000
Change in deferred tax asset related to exchanges of noncontrolling interest for common stock	61,000	0
Increase in amount payable pursuant to tax receivable agreement	0	(11,000)
Rebalancing of ownership percentage between Company and Operating Partnership	(1,231,000)	(298,000)
Dividends declared, not paid	23,583,000	1,860,000
Stock dividends	0	23,823,000
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	874,004,000	215,433,000
Proceeds From Sale Of Mortgage Loans Held-For-Investment	165,364,000	0
Consolidated Joint Venture
Cash flows from financing activities:
Capital contributed by noncontrolling interests in consolidated joint ventures	651,000	191,000
Capital distributed to noncontrolling interests	(3,664,000)	(262,000)
Operating Partnership
Cash flows from financing activities:
Capital distributed to noncontrolling interests	(6,332,000)	(8,537,000)
Equity Securities
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Unrealized (gain) loss on equity securities	132,000	(1,088,000)
Mutual Fund
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Unrealized (gain) loss on equity securities	$ (95,000)	$ (254,000)

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ORGANIZATION AND OPERATIONS

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND OPERATIONS

1. ORGANIZATION AND OPERATIONS

Ladder Capital Corp is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. Ladder originates and invests in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. Ladder’s investment activities include: (i) direct origination of commercial real estate first mortgage loans; (ii) investments in investment grade securities secured by first mortgage loans on commercial real estate; and (iii) investments in net leased and other commercial real estate equity. Ladder Capital Corp, as the general partner of Ladder Capital Finance Holdings LLLP (“LCFH,” “Predecessor” or the “Operating Partnership”), operates the Ladder Capital business through LCFH and its subsidiaries. As of June 30, 2020, Ladder Capital Corp has a 95.5% economic interest in LCFH and controls the management of LCFH as a result of its ability to appoint its board members. Accordingly, Ladder Capital Corp consolidates the financial results of LCFH and its subsidiaries and records a noncontrolling interest for the economic interest in LCFH held by certain existing owners of LCFH, who were limited partners of LCFH prior to Ladder Capital Corp’s initial public offering (“IPO”) and continue to hold an economic interest in LCFH and voting shares of Ladder Capital Corp Class B common stock (the “Continuing LCFH Limited Partners”). LCFH is a Variable Interest Entity (“VIE”) and, as such, substantially all of the consolidated balance sheet is a consolidated VIE. In addition, Ladder Capital Corp, through certain subsidiaries which are treated as taxable REIT subsidiaries (each a “TRS”), is indirectly subject to U.S. federal, state and local income taxes. Other than the noncontrolling interest in the Operating Partnership and such indirect U.S. federal, state and local income taxes, there are no material differences between Ladder Capital Corp’s consolidated financial statements and LCFH’s consolidated financial statements.

Ladder Capital Corp was formed as a Delaware corporation on May 21, 2013. The Company conducted its IPO which closed on February 11, 2014. The Company used the net proceeds from the IPO to purchase newly issued limited partnership units (“LP Units”) from LCFH. In connection with the IPO, Ladder Capital Corp also became a holding corporation and the general partner of, and obtained a controlling interest in, LCFH. Ladder Capital Corp’s only business is to act as the general partner of LCFH, and, as such, Ladder Capital Corp indirectly operates and controls all of the business and affairs of LCFH and its subsidiaries. The IPO transactions described herein are referred to as the “IPO Transactions.”

Pursuant to LCFH’s Third Amended and Restated LLLP Agreement, dated as of December 31, 2014 and as amended, and subject to the applicable minimum retained ownership requirements and certain other restrictions, including notice requirements, Continuing LCFH Limited Partners (or certain transferees thereof) may, subject to certain conditions, receive one share of the Company’s Class A common stock in exchange for (i) one share of the Company’s Class B common stock, (ii) one Series REIT LP Unit and (iii) either one Series TRS LP Unit or one TRS Share, subject to equitable adjustments for stock splits, stock dividends and reclassifications. However, such exchange for shares of Ladder Capital Corp Class A common stock will not affect the exchanging owners’ voting power since the votes represented by the canceled shares of Ladder Capital Corp Class B common stock will be replaced with the votes represented by the shares of Class A common stock for which such Series Units, including TRS Shares as applicable, will be exchanged.

As a result of the Company’s ownership interest in LCFH and LCFH’s election under Section 754 of the Code, the Company expects to benefit from depreciation and other tax deductions reflecting LCFH’s tax basis for its assets. Those deductions will be allocated to the Company and will be taken into account in reporting the Company’s taxable income.

COVID-19 Impact on the Organization

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. As of the date of this filing, the majority of our employees continue to work remotely. We continue to actively manage the liquidity and operations of the Company in light of the market disruption caused by, and the overall financial impact of, the COVID-19 pandemic across most industries in the United States. Due to the uncertainty related to the severity and duration of the pandemic, its ultimate impact on our revenues, profitability and financial position is difficult to assess at this time. Refer to the Notes to the Consolidated Financial Statements for further disclosure on the current and potential impact of the COVID-19 global pandemic on our business.

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company conducted a more extensive going concern analysis as a result of market conditions at June 30, 2020.

As the COVID-19 crisis evolved, management implemented a plan to increase liquidity resources and pay down debt. The Company maintained an unrestricted cash position of $826.1 million as of June 30, 2020 to mitigate uncertainty in liquidity needs in light of market conditions and, during the three months ended June 30, 2020, the Company paid down over $1.0 billion of mark-to-market debt. As of March 31, 2020, partly as a result of maintaining higher levels of cash, the Company was not in compliance with its 3.5x covenant ratio with certain of its lenders; however, the Company cured such non-compliance through pay downs of debt with various counterparties during the cure period. The Company was in compliance with all financial covenants as of June 30, 2020 (refer to Note 7, Debt Obligations, Net). Management has evaluated current market conditions and expects that the Company’s current cash resources, operating cash flows and ability to obtain financing will be sufficient to sustain operations for a period greater than one year from the issuance date of this Quarterly Report. The Company incurred $2.1 million of professional fees, included in operating expenses, and $0.2 million of severance costs, included in salaries and employee benefits, due to measures implemented to date in direct response to the COVID-19 pandemic.

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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 the audited consolidated financial statements for the year ended December 31, 2019, which are included in the 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 consolidated financial statements include the Company’s accounts and those of its subsidiaries which are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

Provision for Loan Losses

The provision for loan losses reflects the Company’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The provision for loan losses includes a portfolio-based, current expected credit loss (“CECL”) component and an asset-specific component. In compliance with the new CECL reporting requirements, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. As part of that effort, the Company has engaged a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with user’s loan-level data, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level.

The asset-specific reserve component relates to reserves for losses on individually impaired loans. The Company evaluates each loan 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 loan’s effective rate or the fair value of the collateral, less the estimated costs to sell, if recovery of the Company’s investment is expected solely from the collateral. The Company generally will use the direct capitalization rate valuation methodology or the sales comparison approach to estimate the fair value of the collateral for such loans and in certain cases will obtain external appraisals. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. 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/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash 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 submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data and ultimately presented to management for approval.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans. Generally, when granting concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset concessions granted should conditions impacting the loan improve. The Company’s determination of credit losses is impacted by TDRs whereby loans that have gone through TDRs are considered impaired, assessed for specific reserves, and are not included in the Company’s assessment of the CECL reserve. Loans previously restructured under TDRs that subsequently default are reassessed to incorporate the Company’s current assumptions on expected cash flows and additional provision expense is recorded to the extent necessary.

The Company designates non-accrual loans at such time as (i) loan payments become 90-days past due or (ii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-accrual and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. Any interest received for loans on non-accrual status will be applied as a reduction to the unpaid principal balance. A loan will be written off when it is no longer realizable and legally discharged.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”) and in April 2019, the FASB issued ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), collectively, the “CECL Standard.” These updates change how entities measure potential credit losses for most financial assets and certain other instruments that are not measured at fair value. The CECL Standard replaced the “incurred loss” approach under previous guidance with an “expected loss” model for instruments measured at amortized cost. The net carrying value of an asset under the CECL Standard is intended to represent the amount expected to be collected on such asset and requires entities to deduct allowances for potential losses on held-to-maturity debt securities. The Company will continue to record asset-specific reserves consistent with our existing accounting policy. In addition, the Company will now record a general reserve in accordance with the CECL Standard on the remainder of the loan portfolio (“CECL Reserve”). At adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock).

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of ASU 2018-13 had no material impact on the Company’s consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, (“ASU 2018-17”). ASU 2018-17 requires reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety for determining whether a decision-making fee is a variable interest. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. Entities are required to apply the amendments in ASU 2018-17 retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The adoption of ASU 2018-17 had no material impact on the Company’s consolidated financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company’s next annual reporting period; early adoption is permitted. The Company previously adopted ASU 2016-01. The adoption of ASU 2019-04 had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The adoption of ASU 2020-03 had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective upon issuance of ASU 2020-04 for contract modifications and hedging relationships on a prospective basis. While the Company is currently assessing the impact of ASU 2020-04, the Company does not expect the adoption to have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 815), (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves the consistent application of, and simplifies, GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its consolidated financial statements.

Any new accounting standards not disclosed above that have been issued or proposed by FASB and that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

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MORTGAGE LOAN RECEIVABLES

6 Months Ended

Jun. 30, 2020

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

MORTGAGE LOAN RECEIVABLES

3. MORTGAGE LOAN RECEIVABLES

June 30, 2020 ($ in thousands)

	Outstanding Face Amount		Carrying Value		Weighted Average Yield (1)		Remaining Maturity (years)
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries:
First mortgage loans	$	2,848,829	$	2,832,610	6.65	%	1.15
Mezzanine loans	122,793		122,474		10.84	%	2.91
Total mortgage loans held by consolidated subsidiaries	2,971,622		2,955,084		6.82	%	1.22
Allowance for loan losses	N/A		(49,102)
Total mortgage loan receivables held for investment, net, at amortized cost	2,971,622		2,905,982
Mortgage loan receivables held for sale:
First mortgage loans	86,456		85,977		3.94	%	9.70
Total	$	3,058,078	$	2,991,959	6.85	%	1.48

(1)June 30, 2020 LIBOR rates are used to calculate weighted average yield for floating rate loans.

As of June 30, 2020, $2.4 billion, or 80.8%, of the outstanding face amount of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates, linked to LIBOR. Of this $2.4 billion, 100% of these variable interest rate mortgage loan receivables were subject to interest rate floors. As of June 30, 2020, $86.5 million, or 100%, of the outstanding face amount of our mortgage loan receivables held for sale were at fixed interest rates.

December 31, 2019 ($ in thousands)

	Outstanding Face Amount		Carrying Value		Weighted Average Yield (1)		Remaining Maturity (years)
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries:
First mortgage loans	$	3,147,275	$	3,127,173	6.77	%	1.35
Mezzanine loans	130,322		129,863		10.97	%	3.26
Total mortgage loans held by consolidated subsidiaries	3,277,597		3,257,036		6.94	%	1.43
Allowance for loan losses	N/A		(20,500)
Total mortgage loan receivables held for investment, net, at amortized cost	3,277,597		3,236,536
Mortgage loan receivables held for sale:
First mortgage loans	122,748		122,325		4.20	%	9.99
Total	$	3,400,345	$	3,358,861	6.88	%	1.75

(1)December 31, 2019 LIBOR rates are used to calculate weighted average yield for floating rate loans.

As of December 31, 2019, $2.5 billion, or 77.2%, of the outstanding principal of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates, linked to LIBOR or a replacement index generally determined in our discretion. Of this $2.5 billion, 100% of these variable rate mortgage loan receivables were subject to interest rate floors. As of December 31, 2019, $122.7 million, or 100%, of the carrying value of our mortgage loan receivables held for sale were at fixed interest rates.

For the six months ended June 30, 2020 and 2019, the activity in our loan portfolio was as follows ($ in thousands):

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries		Provision expense for current expected credit loss		Mortgage loan  receivables held for sale
Balance, December 31, 2019	$	3,257,036	$	(20,500)	$	122,325
Origination of mortgage loan receivables	334,347		—		212,845
Repayment of mortgage loan receivables	(446,080)		—		(292)
Proceeds (losses) from sales of mortgage loan receivables	(165,364)		—		(255,827)
Non-cash disposition of loans via foreclosure(1)	(27,107)		—		—
Sale of loans, net	(6,665)		—		6,926
Accretion/amortization of discount, premium and other fees	8,917		—		—
Release of asset-specific loan loss provision via foreclosure(1)	—		2,000
Provision expense for current expected credit loss (implementation impact)(2)	—		(4,964)
Provision expense for current expected credit loss, net (impact to earnings)(2)	—		(17,638)
Additional asset-specific reserve	—		(8,000)		—
Balance, June 30, 2020	$	2,955,084	$	(49,102)	$	85,977

(1)Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

(2)During the six months ended June 30, 2020, the initial impact of the implementation of the CECL accounting standard as of January 1, 2020 is recorded against retained earnings. Subsequent remeasurement thereafter, including the period to date change for the six months ended June 30, 2020, is accounted for as provision expense for current expected credit loss in the consolidated statements of income.

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries		Mortgage loans transferred but not considered sold		Provision for loan losses		Mortgage loan receivables held for sale
Balance, December 31, 2018	$	3,318,390	$	—	$	(17,900)	$	182,439
Origination of mortgage loan receivables	484,496		—		—		333,342
Repayment of mortgage loan receivables	(693,323)		—		—		(497)
Proceeds from sales of mortgage loan receivables	—		(15,504)		—		(415,145)
Sale of loans, net	—		—		—		27,342
Transfer between held for investment and held for sale(1)	—		15,504		—		(15,504)
Accretion/amortization of discount, premium and other fees	10,294		—		—		—
Provision for/(release of) loan loss reserves	—		—		(600)		—
Balance, June 30, 2019	$	3,119,857	$	—	$	(18,500)	$	111,977

(1)We sell certain loans into securitizations; however, for a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860 under which the Company must surrender control over the transferred assets which must qualify as recognized financial assets at the time of transfer. The assets must be isolated from the Company, even in bankruptcy or other receivership, the purchaser must have the right to pledge or sell the assets transferred and the Company may not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability. During the three months ended March 31, 2019, the Company reclassified from mortgage loan receivables held for sale to mortgage loans transferred but not considered sold, at amortized cost, one loan with an outstanding face amount of $15.4 million, a book value of $15.5 million (fair value at the date of reclassification) and a remaining maturity of 9.8 years, which was sold to the WFCM 2019-C49 securitization trust. Subsequent to March 31, 2019, the controlling loan interest was sold to the UBS 2019-C16 securitization trust, and as a result, the loan previously sold during the three months ended March 31, 2019 was accounted for as a sale during the six months ended June 30, 2019.

During the three and six months ended June 30, 2020, the transfers of financial assets via sales of loans were treated as sales under ASC Topic 860 — Transfers and Servicing. During the three and six months ended June 30, 2019, the transfers of financial assets via sales of loans were treated as sales under ASC Topic 860 — Transfers and Servicing, except for the one loan discussed above.

As of June 30, 2020 and December 31, 2019, there was $0.4 million of unamortized discounts included in our mortgage loan receivables held for investment, net, at amortized cost, on our consolidated balance sheets. 

Allowance for Loan Losses and Non-Accrual Status ($ in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020		2019
Allowance for loan losses at beginning of period	$	49,457		$	18,200		$	20,500	$	17,900
Provision expense for current expected credit loss (implementation impact)	—			—			4,964		—
Provision expense for current expected credit loss, net (impact to earnings)	(355)			300			17,638		600
Additional asset-specific reserve	—			—			8,000		—
Foreclosure of loans subject to asset-specific reserve	—			—			(2,000)		—
Allowance for loan losses at end of period	$	49,102		$	18,500		$	49,102	$	18,500
	June 30, 2020			December 31, 2019
Principal balance of loans on non-accrual status	$	185,896	(1)	$	98,725	(2)

(1)Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a combined carrying value of $26.9 million, two loans with a combined carrying value of $45.9 million, one loan with a carrying value of $61.5 million, one loan with a carrying value of $4.1 million, one loan with a carrying value of $8.0 million and one loan with a carrying value of $39.5 million, as further discussed below.

(2)Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a combined carrying value of $26.9 million, one loan with a carrying value of $10.4 million and one loan with a carrying value of $61.5 million, as further discussed below.

Current Expected Credit Loss (“CECL”)

In compliance with the new CECL reporting requirements, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. Based on the Company’s process, at adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock). As of June 30, 2020, the Company released CECL reserves of $(0.7) million for a total CECL reserve of $29.4 million. This excludes five loans that previously had an aggregate of $20.7 million of asset-specific reserves and a carrying value of $76.9 million as of June 30, 2020. The change of $(0.7) million in the current quarter is reflected as a decrease on reserve provision expense of $(0.3) million, and a decrease in reserve on unfunded commitments of $(0.4) million. These decreases are primarily due to the decrease in the size of our loan portfolio, partially offset by an update of the macro economic assumptions used in the Company’s CECL evaluation in the current quarter.

The Company has concluded that none of its loans, other than the four loans discussed below, are individually impaired as of June 30, 2020.

Loan Portfolio by Geographic Region, Property Type and Vintage ($ in thousands)

	Amortized Cost
Geographic Region
Northeast	$	785,000
Southwest	588,046
Midwest	585,505
South	512,314
West	407,286
Subtotal loans	2,878,151
Individually impaired loans(1)	76,933
Total loans	$	2,955,084

Management’s method for monitoring credit is the performance of a loan. A loan is impaired or not impaired based on the expectation that all amounts contractually due under a loan will be collected when due. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing Ladder’s loan portfolio by collateral type. The following table summarizes the assessed amortized cost of the loan portfolio by property type ($ in thousands).

	Vintage
Property Type	2020		2019		2018		2017		2016 and Earlier		Total
Multifamily	$	65,228	$	323,178	$	147,460	$	31,872	$	11,772	$	579,510
Office	51,658		216,946		388,721		160,288		52,086		869,699
Hospitality	—		83,018		143,681		67,446		123,630		417,775
Mixed Use	52,515		101,436		5,092		47,849		—		206,892
Retail	—		141,842		25,029		—		65,823		232,694
Other	57,528		130,025		82,353		—		—		269,906
Industrial	51,964		114,987		—		—		6,476		173,427
Manufactured Housing	4,545		56,918		11,702		—		3,970		77,135
Self-Storage	—		35,936		15,177		—		—		51,113
Subtotal loans	283,438		1,204,286		819,215		307,455		263,757		2,878,151
Individually Impaired loans (1)	—		—		4,143				72,790		76,933
Total loans	$	283,438	$	1,204,286	$	823,358	$	307,455	$	336,547	$	2,955,084

(1)Included in individually impaired loans are two loans, which were originated in 2016 simultaneously as part of a single transaction with a combined amortized cost of $26.9 million, collateralized by a mixed use property located in the Northeast region, one loan, which was originated in 2016 and subsequently restructured into two loans in 2018, with a combined amortized cost of $45.9 million, collateralized by a mixed use property located in the Northeast region, and one loan, originated in 2018, with a amortized cost of $4.1 million, collateralized by a hotel located in the Midwest region. The above individually impaired loans’ amortized cost basis excludes asset-specific provisions totaling $20.7 million.

Individually Impaired Loans

As of June 30, 2020, two of the Company’s loans, collateralized by a mixed use property, which were originated simultaneously as part of a single transaction and had a carrying value of $26.9 million, were in default. These loans are directly and indirectly secured by the same property. The Company placed these loans on non-accrual status in July 2017. In assessing these collateral-dependent loans for impairment, the most significant consideration is the fair value of the underlying real estate collateral, which includes an in-place long-dated retail lease. The value of such property is most significantly affected by the contractual lease terms and the appropriate market capitalization rates, which are driven by the property’s market strength, the general interest rate environment and the retail tenant’s creditworthiness. In view of these considerations, the Company uses a direct capitalization rate valuation methodology to calculate the fair value of the underlying real estate collateral. During the three months ended March 31, 2018, management believed these loans to be impaired, reflecting a decline in collateral value attributable to: (i) on-going bankruptcy proceedings; (ii) rising interest rates; and (iii) the retail tenant’s creditworthiness. As a result, on March 31, 2018, the Company recorded an asset-specific provision for loss on one of these loans, with a carrying value of $5.9 million, of $2.7 million to reduce the carrying value of these loans to the fair value of the property less the cost to foreclose and sell the property utilizing direct capitalization rates of 4.70% to 5.00%. As of June 30, 2020, the Company believed no additional loss provision was necessary based on the application of direct capitalization rates of 4.60% to 4.90%.

During the year ended December 31, 2018, management identified a loan, secured by a mixed-use office and hospitality property, with a carrying value of $45.0 million as impaired, reflecting a decline in collateral value attributable to: (i) recent and near term tenant vacancies at the property; (ii) new information available during the three months ended September 30, 2018 regarding the addition of supply that will increase the local submarket vacancy rate; and (iii) declining market conditions. A reserve of $10.0 million was recorded for this impaired loan in the three months ended September 30, 2018 to reduce the carrying value of the loan to the estimated fair value of the collateral, less the estimated costs to sell. The Company has placed this loan on non-accrual status as of September 30, 2018. During the quarter ended December 31, 2018, this loan experienced a maturity default and its terms were modified in a Troubled Debt Restructuring (“TDR”) on October 17, 2018. The terms of the TDR provided for, among other things, the restructuring of the Company’s existing $45.0 million first mortgage loan into a $35.0 million A-Note and a $10.0 million B-Note and a 19.0% equity interest which is not subject to dilution and that can be increased to 25% under certain conditions. Under certain conditions, the B-Note may be forgiven or reduced. The reserve of $10.0 million was applied to the B-Note and the B-Note was placed on non-accrual status on October 17, 2018. During the quarter ended March 31, 2020, management identified that the A-Note was impaired, reflecting a decline in collateral value due to: (i) new information available during the three months ended March 31, 2020 regarding two recent non-distressed sales of office buildings in the Wilmington, DE central business district; (ii) a change in market conditions driven by COVID-19 as capital flow to the tertiary markets shifted given increased opportunities in primary markets; and (iii) the closure of the corporate housing component of the property. As a result, on March 31, 2020, the Company recorded an asset-specific provision for loss on the A-Note of $7.5 million to reduce the carrying value of this loan to the fair value of the property less the cost to foreclose and sell the property utilizing direct capitalization rates of 7.50% to 8.75%. The Company placed the A-Note on non-accrual status as of March 31, 2020. As of June 30, 2020, the combined carrying value of the A-Note and the B-Note was $45.9 million.

As of June 30, 2020, one of the Company’s loans, collateralized by a hotel property, with a carrying value of $4.1 million, was in default. The Company placed this loan on non-accrual status in March 2020. The Company filed for foreclosure in December 2019 and did not believe there was an impairment at that time. In assessing this collateral-dependent loan for impairment, the most significant consideration is the fair value of the underlying real estate collateral. During the quarter ended March 31, 2020, management identified that the loan was impaired, reflecting a decline in collateral value due to indications of value from market participants with knowledge of the asset and the temporary closure of the nearby university and local businesses due to COVID-19. As a result, on March 31, 2020, the Company recorded an asset-specific provision for loss of $0.5 million to reduce the carrying value of this loan to the fair value of the property less the cost to foreclose and sell the property. As of June 30, 2020, the Company believed no additional loss provision was necessary based on the current value of the underlying collateral.

As of June 30, 2020, there were no unfunded commitments associated with modified loans considered TDRs.

These non-recurring fair values are considered Level 3 measurements in the fair value hierarchy.

Loans on Non-Accrual Status

During the three months ended December 31, 2019, one of the Company’s loans, which had a carrying value of $61.5 million, was placed on non-accrual status. The Company performed a review of the loan collateral. The review consisted of conversations with market participants familiar with the property location as well as reviewing market data and comparables. Based on this review, the Company determined that no asset-specific impairment was required for this loan. The Company will continue to monitor for impairment.

During the three months ended June 30, 2020, one of the Company’s loans, which had a carrying value of $8.0 million, was placed on non-accrual status. The Company performed a review of the loan collateral. The review consisted of conversations with market participants familiar with the property location as well as reviewing market data and comparables. Based on this review, the Company determined that no asset-specific impairment was required for this loan. The Company will continue to monitor for impairment.

During the three months ended June 30, 2020, one of the Company’s loans, which had a carrying value of $39.5 million, was placed on non-accrual status. The Company performed a review of the loan collateral. The review consisted of conversations with market participants familiar with the property location as well as reviewing market data and comparables. Based on this review, the Company determined that no asset-specific impairment was required for this loan. The Company will continue to monitor for impairment.

There are no other loans on non-accrual status other than those discussed in Individually Impaired Loans above as of June 30, 2020.

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REAL ESTATE SECURITIES

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

REAL ESTATE SECURITIES

4. REAL ESTATE SECURITIES

Since the onset of the COVID-19 pandemic, there has been a decrease in liquidity and trading activity for the real estate securities we own. The Company invests in primarily AAA-rated real estate securities, typically front pay securities, with

relatively short duration and significant subordination. The hyperamortization features included in many of the securities positions we own help mitigate potential credit losses even in the current market conditions. During the three months ended June 30, 2020, liquidity and trading activity began to return to the market and the value of our securities portfolio as of June 30, 2020 had an unrealized mark-to-market gain of $11.8 million. During the six months ended June 30, 2020, the market and the value of our securities portfolio were down. As of June 30, 2020 there was an unrealized mark-to-market loss of $63.6 million related to the six months ended June 30, 2020.

CMBS, CMBS interest-only securities, Agency securities, Government National Mortgage Association (“GNMA”) construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income. GNMA and Federal Home Loan Mortgage Corp (“FHLMC”) securities (collectively, “Agency interest-only securities”) are recorded at fair value with changes in fair value recorded in current period earnings. Equity securities are reported at fair value with changes in fair value recorded in current period earnings. The following is a summary of the Company’s securities at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

					Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis/Purchase Price		Gains		Losses		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS(2)	$	1,496,090	$	1,495,892	$	212	$	(48,766)	$	1,447,338	(3)	49	AAA	1.51	%	1.57	%	2.27
CMBS interest-only(2)(4)	1,535,739		25,026		488		(4)		25,510		(5)	15	AAA	0.45	%	2.83	%	2.34
GNMA interest-only(4)(6)	93,464		1,335		204		(161)		1,378			14	AA+	0.45	%	4.21	%	3.18
Agency securities(2)	610		619		17		—		636			2	AA+	2.61	%	1.68	%	1.56
GNMA permanent securities(2)	30,853		31,006		864		—		31,870			6	AA+	3.89	%	3.50	%	2.41
Total debt securities	$	3,156,756	$	1,553,878	$	1,785	$	(48,931)	$	1,506,732		86		0.98	%	1.63	%	2.27
Provision for current expected credit losses	N/A		—		—		(19)		(19)
Total real estate securities	$	3,156,756	$	1,553,878	$	1,785	$	(48,950)	$	1,506,713		86

(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 rating agencies, the highest 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.

(2)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(3)Includes $11.1 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (the “Dodd-Frank Act”) and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(4)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(5)Includes $0.7 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(6)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s Agency interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company has elected to account for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on Agency interest-only securities in the consolidated statements of income in accordance with ASC 815.

(7)The Company has elected to account for equity securities at fair value with changes in fair value recorded in current period earnings.

December 31, 2019

					Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS(2)	$	1,640,597	$	1,640,905	$	4,337	$	(920)	$	1,644,322	(3)	125	AAA	3.06	%	3.08	%	2.41
CMBS interest-only(2)(4)	1,559,160		28,553		630		(37)		29,146		(5)	15	AAA	0.60	%	3.04	%	2.53
GNMA interest-only(4)(6)	109,783		1,982		123		(254)		1,851			11	AA+	0.49	%	4.59	%	2.77
Agency securities(2)	629		640		1		(4)		637			2	AA+	2.65	%	1.73	%	1.83
GNMA permanent securities(2)	31,461		31,681		688		—		32,369			6	AA+	3.91	%	3.17	%	1.93
Total debt securities	$	3,341,630	$	1,703,761	$	5,779	$	(1,215)	$	1,708,325		159		1.84	%	3.06	%	2.39
Equity securities(7)	N/A		12,848		292		(160)		12,980			2	N/A	N/A		N/A		N/A
Total real estate securities	$	3,341,630	$	1,716,609	$	6,071	$	(1,375)	$	1,721,305		161

(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 rating agencies, the highest 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.

(2)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(3)Includes $11.6 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(4)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(5)Includes $0.8 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(6)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s Agency interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company accounts for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on Agency interest-only securities in the consolidated statements of income in accordance with ASC 815.

(7)The Company has elected to account for equity securities at fair value with changes in fair value recorded in current period earnings.

The following is a breakdown of the carrying value of the Company’s debt securities by remaining maturity based upon expected cash flows at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	185,672	$	1,212,532	$	49,134	$	—	$	1,447,338
CMBS interest-only	920		24,590		—		—		25,510
GNMA interest-only	70		1,028		276		4		1,378
Agency securities	—		636		—		—		636
GNMA permanent securities	231		31,639		—		—		31,870
Total debt securities	$	186,893	$	1,270,425	$	49,410	$	4	$	1,506,732

December 31, 2019

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	177,193	$	1,389,392	$	77,737	$	—	$	1,644,322
CMBS interest-only	1,439		27,707		—		—		29,146
GNMA interest-only	91		1,504		256		—		1,851
Agency securities	—		637		—		—		637
GNMA permanent securities	416		31,953		—		—		32,369
Total debt securities	$	179,139	$	1,451,193	$	77,993	$	—	$	1,708,325

During the three and six months ended June 30, 2020, the Company realized a gain (loss) on the sale of equity securities of $(0.2) million and $1.1 million, respectively, which is included in realized gain (loss) on securities on the Company’s consolidated statements of income. During the three and six months ended June 30, 2019, the Company realized a gain (loss) on the sale of equity securities of zero and $0.1 million, respectively, which is included in realized gain (loss) on securities on the Company’s consolidated statements of income.

During the three and six months ended June 30, 2020, the Company realized losses on securities recorded as other than temporary impairments of $0.1 million and $0.3 million, respectively, which are included in realized gain (loss) on securities on the Company’s consolidated statements of income. During the three and six months ended June 30, 2019 the Company realized no losses on securities recorded as other than temporary impairments.

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

6 Months Ended

Jun. 30, 2020

Real Estate [Abstract]

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

5. REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

The recent market volatility due to the COVID-19 pandemic has brought illiquidity in most asset classes, including real estate. The Company expects the net leased commercial real estate properties, which comprise the majority of our portfolio, to be minimally impacted as the majority of the net leased properties in our real estate portfolio are necessity-based businesses and have remained open and stable during the COVID-19 pandemic. We continue to actively monitor the diversified commercial real estate properties for both the immediate and long term impact of the pandemic on the buildings, the tenants, the business plans and the ability to execute those business plans.

The following tables present additional detail related to our real estate portfolio, net, including foreclosed properties ($ in thousands):

	June 30, 2020		December 31, 2019
Land	$	228,111	$	209,955
Building	871,585		883,005
In-place leases and other intangibles	159,049		161,203
Less: Accumulated depreciation and amortization	(216,535)		(206,082)
Real estate and related lease intangibles, net	$	1,042,210	$	1,048,081
Below market lease intangibles, net (other liabilities)	$	(38,125)	$	(39,067)

At June 30, 2020 and December 31, 2019, the Company held foreclosed properties included in real estate and related lease intangibles, net with a carrying value of $112.7 million and $89.5 million, respectively.

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Depreciation expense(1)	$	8,110	$	7,697	$	16,383	$	15,382
Amortization expense	1,681		2,213		3,392		4,730
Total real estate depreciation and amortization expense	$	9,791	$	9,910	$	19,775	$	20,112

(1)Depreciation expense on the consolidated statements of income also includes $25 thousand and $50 thousand of depreciation on corporate fixed assets for the three and six months ended June 30, 2020, respectively. Depreciation expense on the consolidated statements of income also includes $25 thousand and $50 thousand for the three and six months ended June 30, 2019, respectively.

The Company’s intangible assets are comprised of in-place leases, above market leases and other intangibles. The following tables present additional detail related to our intangible assets ($ in thousands):

	June 30, 2020		December 31, 2019
Gross intangible assets(1)	$	159,049	$	161,203
Accumulated amortization	63,089		62,773
Net intangible assets	$	95,960	$	98,430

(1)Includes $4.4 million and $4.5 million of unamortized above market lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively.

The following table presents increases/reductions in operating lease income recorded by the Company ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Reduction in operating lease income for amortization of above market lease intangibles acquired	$	(92)	$	(208)	$	(183)	$	(633)
Increase in operating lease income for amortization of below market lease intangibles acquired	619		461		1,371		1,030

The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of June 30, 2020 ($ in thousands):

Period Ending December 31,	Adjustment to Operating Lease Income		Amortization Expense
2020 (last 6 months)	$	625	$	2,956
2021	1,070		5,504
2022	1,070		5,504
2023	1,070		5,504
2024	1,070		5,504
Thereafter	28,867		66,590
Total	$	33,772	$	91,562

Lease Prepayment by Lessor, Retirement of Related Mortgage Loan Financing and Impairment of Real Estate

On January 10, 2019, the Company received $10.0 million prepayment of a lease on a single-tenant two-story office building in Wayne, NJ. As of March 31, 2019, this property had a book value of $5.6 million, which is net of accumulated depreciation and amortization of $2.7 million. The Company recognized the $10.0 million of operating lease income on a straight-line basis over the revised lease term. On February 6, 2019, the Company paid off $6.6 million of mortgage loan financing related to the property, recognizing a loss on extinguishment of debt of $1.1 million. During the three months ended March 31, 2019, the Company recorded a $1.4 million impairment of real estate to reduce the carrying value of the real estate to the estimated fair value of the real estate. On May 1, 2019, the Company completed the sale of the property recognizing $3.9 million of operating lease income, $3.5 million realized loss on sale of real estate, net and $0.4 million of depreciation and amortization expense, resulting in a net loss of $20 thousand. See Note 15, Fair Value of Financial Instruments for further detail.

There were $0.7 million and $0.9 million of rent receivables included in other assets on the consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively.

There was unencumbered real estate of $82.4 million and $59.2 million as of June 30, 2020 and December 31, 2019, respectively.

During the three and six months ended June 30, 2020, the Company recorded $0.6 million and $2.5 million, respectively, of real estate operating income, which is included in operating lease income in the consolidated statements of income. During the three and six months ended 2019, the Company recorded $0.8 million and $1.0 million, respectively, of real estate operating income, which is included in operating lease income in the consolidated statements of income.

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at June 30, 2020 ($ in thousands):

Period Ending December 31,	Amount
2020 (last 6 months)	$	43,163
2021	73,091
2022	66,145
2023	65,377
2024	64,412
Thereafter	507,659
Total	$	819,847

Acquisitions

During the six months ended June 30, 2020, the Company acquired the following properties ($ in thousands):

Acquisition Date	Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
Purchases of real estate
Aggregate purchases of net leased real estate			$	6,239	100.0%
Real estate acquired via foreclosure
March 2020	Diversified	Los Angeles, CA	21,535		100.0%
June 2020	Diversified	Winston Salem, NC	3,900		100.0%
Total real estate acquired via foreclosure			25,435
Total real estate acquisitions			$	31,674

(1)Properties were consolidated as of acquisition date.

The Company allocates purchase consideration based on relative fair values, and real estate acquisition costs are capitalized as a component of the cost of the assets acquired for asset acquisitions. During the six months ended June 30, 2020, all acquisitions were determined to be asset acquisitions.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2020, as follows ($ in thousands):

	Purchase Price Allocation
Land	$	23,524
Building	7,244
Intangibles	1,201
Below Market Lease Intangibles	(295)
Total purchase price	$	31,674

The weighted average amortization period for intangible assets acquired during the six months ended June 30, 2020 was 39.8 years. The Company recorded $0.1 million and $0.2 million in revenues from its 2020 acquisitions for the three and six months ended June 30, 2020, respectively, which is included in its consolidated statements of income. The Company recorded $0.1 million and $47.6 thousand in earnings (losses) from its 2020 acquisitions for the three and six months ended June 30, 2020, respectively, which is included in its consolidated statements of income.

During the six months ended June 30, 2019, the Company acquired the following properties ($ in thousands):

Acquisition Date	Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
Purchases of real estate
Aggregate purchases of net leased real estate			$	5,071	100.0%
Real estate acquired via foreclosure
February 2019	Diversified	Omaha, NE	18,200		100.0%
Total real estate acquired via foreclosure			18,200
Total real estate acquisitions			$	23,271

(1)Properties were consolidated as of acquisition date.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2019, as follows ($ in thousands):

	Purchase Price Allocation
Land	$	3,789
Building	18,885
Intangibles	854
Below Market Lease Intangibles	(257)
Total purchase price	$	23,271

The weighted average amortization period for intangible assets acquired during the six months ended June 30, 2019 was 37.0 years. The Company recorded $62.5 thousand and $78.9 thousand in revenues from its 2019 acquisitions for the three and six months ended June 30, 2019, respectively, which is included in its consolidated statements of income. The Company recorded $(1.2) million and $(1.5) million in earnings (losses) from its 2019 acquisitions for the three and six months ended June 30, 2019, respectively, which is included in its consolidated statements of income.

Acquisitions via Foreclosure

In June 2020, the Company acquired a hotel in Winston Salem, NC via foreclosure. This property previously served as collateral for a mortgage loan receivable held for investment with a net basis of $3.8 million. The Company obtained a third-party appraisal of the property. The $3.9 million fair value was determined using the ground lease approach and the income approach to value. The appraiser utilized a terminal capitalization rate of 9.50% and a discount rate of 13.50%. There was no gain or loss resulting from the foreclosure of the loan.

In March 2020, the Company acquired a development property in Los Angeles, CA, via foreclosure. This property previously served as collateral for a mortgage loan receivable held for investment with a basis of $21.6 million, net of an asset-specific loan loss provision of $2.0 million. The Company obtained a third-party appraisal of the property. Substantially all of the fair value was attributed to land. The $21.5 million fair value was determined using the sales comparison approach to value. Using this approach, the appraiser developed an opinion of the fee simple value of the underlying land by comparing the property to similar, recently sold properties in the surrounding or competing area. The Company recorded a $0.1 million loss resulting from the foreclosure of the loan.

In February 2019, the Company acquired a hotel in Omaha, NE, via foreclosure. This property previously served as collateral for a mortgage loan receivable held for investment with a net basis of $17.9 million. The Company obtained a third-party appraisal of the property. The $18.2 million fair value was determined using the income approach to value. The appraiser utilized a terminal capitalization rate of 8.75% and a discount rate of 10.25%. There was no gain or loss resulting from the foreclosure of the loan.

These non-recurring fair values are considered Level 3 measurements in the fair value hierarchy.

Sales

The Company sold the following properties during the six months ended June 30, 2020 ($ in thousands):

Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining
Various	Condominium	Miami, FL	$	931	$	924	$	7	—	3	3
March 2020	Diversified	Richmond, VA	22,526		14,829		7,697		7	—	—
March 2020	Diversified	Richmond, VA	6,933		4,109		2,824		1	—	—
Totals			$	30,390	$	19,862	$	10,528

Realized gain on the sale of real estate, net on the consolidated statements of income also includes $0.1 million of realized loss on the disposal of fixed assets for the six months ended June 30, 2020

The Company sold the following properties during the six months ended June 30, 2019 ($ in thousands):

Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining
N/A	Condominium	Las Vegas, NV	$	—	$	—	$	—	—	—	1
Various	Condominium	Miami, FL	3,917		3,550		367		—	13	9
April 2019	Diversified	Wayne, NJ	1,729		4,799		(3,070)		1	—	—
May 2019	Diversified	Grand Rapids, MI	10,019		8,254		1,765		1	—	—
Totals			$	15,665	$	16,603	$	(938)

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INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

6. INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

The following is a summary of the Company’s investments in and advances to unconsolidated joint ventures, which we account for using the equity method, as of June 30, 2020 and December 31, 2019 ($ in thousands):

Entity	June 30, 2020		December 31, 2019
Grace Lake JV, LLC	$	3,496	$	3,047
24 Second Avenue Holdings LLC	45,423		45,386
Investment in unconsolidated joint ventures	$	48,919	$	48,433

The following is a summary of the Company’s allocated earnings (losses) based on its ownership interests from investment in unconsolidated joint ventures for the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Entity	2020		2019		2020		2019
Grace Lake JV, LLC	$	263	$	618	$	449	$	1,032
24 Second Avenue Holdings LLC	208		946		463		1,490
Earnings (loss) from investment in unconsolidated joint ventures	$	471	$	1,564	$	912	$	2,522

Grace Lake JV, LLC

In connection with the origination of a loan in April 2012, the Company received a 25% equity interest with the right to convert upon a capital event. On March 22, 2013, the loan was refinanced, and the Company converted its interest into a 19% limited liability company membership interest in Grace Lake JV, LLC (“Grace Lake LLC”), which holds an investment in an office building complex. After taking into account the preferred return of 8.25% and the return of all equity remaining in the property to the Company’s operating partner, the Company is entitled to 25% of the distribution of all excess cash flows and all disposition proceeds upon any sale. The Company is not legally required to provide any future funding to Grace Lake LLC. The Company accounts for its interest in Grace Lake LLC using the equity method of accounting, as it has a 19% investment, compared to the 81% investment of its operating partner and does not control the entity.

The Company’s investment in Grace Lake LLC is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was deemed to be a VIE primarily based on the fact there are disproportionate voting and economic rights within the joint venture. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has a passive investment and no control of this entity and therefore does not have controlling financial interests in this VIE. The Company’s maximum exposure to loss is limited to its investment in the VIE. The Company has not provided financial support to this VIE that it was not previously contractually required to provide.

During the six months ended June 30, 2020, the Company received no distributions from its investment in Grace Lake LLC. During the six months ended June 30, 2019, the Company had received $3.1 million of distributions from its investment in Grace Lake LLC.

The Company holds its investment in Grace Lake LLC in a TRS.

24 Second Avenue Holdings LLC

On August 7, 2015, the Company entered into a joint venture, 24 Second Avenue Holdings LLC (“24 Second Avenue”), with an operating partner (the “Operating Partner”) to invest in a ground-up residential/retail condominium development and construction project located at 24 Second Avenue, New York, NY. The Company accounted for its interest in 24 Second Avenue using the equity method of accounting as its joint venture partner was the managing member of 24 Second Avenue and had substantive management rights.

During the three months ended March 31, 2019, the Company converted its existing $35.0 million common equity interest into a $35.0 million priority preferred equity position. The Company also provided $50.4 million in first mortgage financing in order to refinance the existing $48.1 million first mortgage construction loan which was made by another lending institution. In addition to the new $50.4 million first mortgage loan, the Company also funded a $6.5 million mezzanine loan for use in completing the project. The Operating Partner must fully fund any and all additional capital for necessary expenses.

Due to the Company’s non-controlling equity interest in 24 Second Avenue, the Company accounts for the new loans as additional investments in the joint venture.

During the three and six months ended June 30, 2020, the Company recorded $0.2 million and $0.5 million, respectively, in income (expenses), each of which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the consolidated statements of income. During the three and six months ended June 30, 2019, the Company recorded $0.9 million and $1.5 million, respectively, in income (expenses), each of which is recorded in earnings (loss) from investment in unconsolidated joint ventures in the consolidated statements of income. During 2019, the Company capitalized interest related to the cost of its investment in 24 Second Avenue, as 24 Second Avenue had activities in progress necessary to construct and ultimately sell condominium units. During the six months ended June 30, 2019, the Company capitalized $0.1 million of interest expense, using a weighted average interest rate. The capitalized interest expense was recorded in investment in unconsolidated joint ventures in the consolidated balance sheets. As a result of the transactions described above, subsequent to the three months ended March 31, 2019, the Company no longer capitalizes interest related to this investment, and income generated from the new loans is accounted for as earnings from investment in unconsolidated joint ventures.

As of June 30, 2020, 24 Second Avenue had $11.3 million of loans payable to a third-party lender. 24 Second Avenue consists of 30 residential condominium units and one commercial condominium unit. 24 Second Avenue started closing on the existing sales contracts during the quarter ended March 31, 2019, upon receipt of New York City Building Department approvals and a temporary certificate of occupancy for a portion of the project. As of June 30, 2020, 24 Second Avenue sold 19 residential condominium units for $49.6 million in total gross sale proceeds. As of June 30, 2020, the Company had no additional remaining capital commitment to 24 Second Avenue.

The Company’s investment in 24 Second Avenue is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was deemed to be a VIE primarily based on (i) the fact that the total equity investment at risk (inclusive of the additional financing the Company provided through the first mortgage and mezzanine loans) is sufficient to permit the entities to finance activities without additional subordinated financial support provided by any parties, including equity holders; and (ii) the voting and economic rights are not disproportionate within the joint venture. The Company determined that it was not the primary beneficiary of this VIE because it does not have a controlling financial interest.

The Company holds its investment in 24 Second Avenue in a TRS.

Combined Summary Financial Information for Unconsolidated Joint Ventures

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of June 30, 2020 and December 31, 2019 ($ in thousands):

	June 30, 2020		December 31, 2019
Total assets	$	113,414	$	118,727
Total liabilities	77,277		78,762
Partners’/members’ capital	$	36,137	$	39,965

The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total revenues	$	4,294	$	6,330	$	8,770	$	11,030
Total expenses	3,450		3,571		7,424		7,434
Net income (loss)	$	844	$	2,759	$	1,346	$	3,596

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DEBT OBLIGATIONS, NET

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

DEBT OBLIGATIONS, NET

7. DEBT OBLIGATIONS, NET

The details of the Company’s debt obligations at June 30, 2020 and December 31, 2019 are as follows ($ in thousands):

June 30, 2020

Debt Obligations	Committed Financing		Debt Obligations Outstanding			Committed but Unfunded		Interest Rate at June 30, 2020(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility(2)	$	500,000	$	114,679		$	385,321	1.93%	—	2.18%	12/19/2022	(3)	(4)	$	179,332	$	179,332
Committed Loan Repurchase Facility	250,000		—			250,000		—%	—	—%	2/26/2021	(5)	(6)	—		—
Committed Loan Repurchase Facility	300,000		144,565			155,435		1.94%	—	2.94%	12/19/2020	(7)	(8)	251,788		251,788
Committed Loan Repurchase Facility	300,000		65,702			234,298		1.94%	—	2.19%	11/6/2022	(9)	(4)	100,597		100,704
Committed Loan Repurchase Facility	100,000		38,228			61,772		2.31%	—	2.43%	12/31/2022	(10)	(4)	64,721		64,807
Committed Loan Repurchase Facility	100,000		17,901			82,099		2.68%	—	2.68%	3/24/2021	(11)	(12)	30,600		30,600
Total Committed Loan Repurchase Facilities	1,550,000		381,075			1,168,925								627,038		627,231
Committed Securities Repurchase Facility(2)	785,321		451,342			333,979		0.89%	—	2.44%	12/23/2021	N/A	(13)	576,924		576,924
Uncommitted Securities Repurchase Facility	N/A (13)		462,612			N/A (14)		1.42%	—	4.81%	7/2020 - 9/2020	N/A	(13)	596,230		596,230		(15)
Total Repurchase Facilities	1,950,000		1,295,029			1,502,904								1,800,192		1,800,385
Revolving Credit Facility	266,430		266,430			—		3%	—	3%	2/11/2021	(16)	N/A (17)	N/A (17)		N/A (17)
Mortgage Loan Financing	805,431		805,431			—		3.75%	—	6.75%	2020 - 2030(18)	N/A	(19)	959,766		1,172,268		(20)
Secured Financing Facility	206,350		188,687		(21)	—		10.75%	—	10.75%	5/6/2023	N/A	(22)	335,237		335,675
CLO Debt	304,413		299,605		(23)	—		5.50%	—	5.50%	5/16/2024	N/A	(24)	469,505		469,587
Borrowings from the FHLB	1,500,000		360,790			1,139,210		0.44%	—	2.95%	2020 - 2024	N/A	(24)	526,151		528,650		(25)
Senior Unsecured Notes	1,752,817		1,737,542		(26)	—		4.25%	—	5.88%	2021 - 2027	N/A	N/A (27)	N/A (27)		N/A (27)
Total Debt Obligations, Net	$	6,785,441	$	4,953,514		$	2,642,114							$	4,090,851	$	4,306,565

(1)June 2020 LIBOR rates are used to calculate interest rates for floating rate debt.

(2)The combined committed amounts for the loan repurchase facility and the securities repurchase facility total $900.0 million, with maximum capacity on the loan repurchase facility of $500.0 million, and maximum capacity on the securities repurchase facility of $900.0 million less outstanding commitments on the loan repurchase facility.

(3)Two additional 12-month periods at Company’s option. No new advances are permitted after the initial maturity date.

(4)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(5)Three additional 12-month periods at Company’s option.

(6)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(7)Three additional 364-day periods.

(8)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(9)One additional 12-month extension period and two additional 6-month extension periods at Company’s option.

(10)Two additional 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(11)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(12)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(13)Commercial real estate securities. It does not include the real estate collateralizing such securities.

(14)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(15)Includes $2.2 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(16)Four additional 12-month periods at Company’s option.

(17)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(18)Anticipated repayment dates.

(19)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(20)Using undepreciated carrying value of commercial real estate to approximate fair value.

(21)Presented net of unamortized debt issuance costs of $9.7 million and an unamortized discount of $8.0 million related to the Purchase Right (described in detail under Secured Financing Facility below) at June 30, 2020.

(22)First mortgage commercial real estate loans. Substitution of collateral and conversion of loan collateral to mortgage collateral are permitted with Lender’s approval.

(23)Presented net of unamortized debt issuance costs of $4.8 million at June 30, 2020.

(24)First mortgage commercial real estate loans and investment grade commercial real estate securities. It does not include the real estate collateralizing such loans and securities.

(25)Includes $9.4 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(26)Presented net of unamortized debt issuance costs of $15.3 million at June 30, 2020.

(27)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

December 31, 2019

Debt Obligations	Committed Financing		Debt Obligations Outstanding			Committed but Unfunded		Interest Rate at December 31, 2019(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility	$	600,000	$	183,828		$	416,172	3.24%	—	3.74%	12/19/2022	(2)	(3)	$	287,974	$	288,210
Committed Loan Repurchase Facility	350,000		70,697			279,303		3.71%	—	3.81%	5/24/2020	(4)	(5)	101,590		103,868
Committed Loan Repurchase Facility	300,000		248,182			51,818		3.49%	—	3.74%	12/19/2020	(6)	(7)	382,778		382,778
Committed Loan Repurchase Facility	300,000		98,678			201,322		3.50%	—	3.75%	11/6/2022	(8)	(3)	175,000		175,270
Committed Loan Repurchase Facility	100,000		9,952			90,048		3.96%	—	3.99%	1/3/2023	(9)	(3)	75,628		75,813
Committed Loan Repurchase Facility	100,000		90,927			9,073		3.74%	—	3.80%	12/24/2020	(10)	(11)	126,311		126,311
Total Committed Loan Repurchase Facilities	1,750,000		702,264			1,047,736								1,149,281		1,152,250
Committed Securities Repurchase Facility	400,000		42,751			357,249		2.50%	—	2.56%	12/23/2021	N/A	(12)	52,691		52,691
Uncommitted Securities Repurchase Facility	N/A (12)		1,070,919			N/A (13)		2.17%	—	3.54%	1/2020 - 3/2020	N/A	(12)	1,188,440		1,188,440		(14)
Total Repurchase Facilities	2,150,000		1,815,934			1,404,985								2,390,412		2,393,381
Revolving Credit Facility	266,430		—			266,430		NA			2/11/2020	(15)	N/A (16)	N/A (16)		N/A (16)
Mortgage Loan Financing	812,606		812,606			—		3.75%	—	6.75%	2020 - 2029(17)	N/A	(18)	988,857		1,192,106		(19)
Borrowings from the FHLB	1,945,795		1,073,500			872,295		1.47%	—	2.95%	2020 - 2024	N/A	(20)	1,107,188		1,113,811		(21)
Senior Unsecured Notes	1,166,201		1,157,833		(22)	—		5.25%	—	5.88%	2021 - 2025	N/A	N/A (23)	N/A (23)		N/A (23)
Total Debt Obligations	$	6,341,032	$	4,859,873		$	2,543,710							$	4,486,457	$	4,699,298

(1)December 31, 2019 LIBOR rates are used to calculate interest rates for floating rate debt.

(2)Two additional 12-month periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)One additional 12-month period at Company’s option.

(5)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(6)Three additional 364-day periods.

(7)First mortgage and mezzanine commercial real estate loans and senior pari passu interests therein. It does not include the real estate collateralizing such loans.

(8)One additional 12-month extension period and two additional 6-month extension periods at Company’s option.

(9)Two additional 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(10)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(11)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(12)Commercial real estate securities. It does not include the real estate collateralizing such securities.

(13)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(14)Includes $2.2 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(15)Four additional 12-month periods at Company’s option.

(16)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(17)Anticipated repayment dates.

(18)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(19)Using undepreciated carrying value of commercial real estate to approximate fair value.

(20)First mortgage commercial real estate loans and pari passu interests therein. It does not include the real estate collateralizing such loans.

(21)First mortgage commercial real estate loans and investment grade commercial real estate securities. It does not include the real estate collateralizing such loans and securities.

(22)Includes $9.9 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(23)Presented net of unamortized debt issuance costs of $8.4 million at December 31, 2019.

(24)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

Combined Maturity of Debt Obligations

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands):

Period ending December 31,	Borrowings by Maturity(1)
2020 (last 6 months)	$	1,494,949
2021	527,569
2022	642,014
2023	351,436
2024	612,695
Thereafter	1,358,119
Subtotal	4,986,782
Debt issuance costs included in senior unsecured notes	(15,275)
Debt issuance costs included in secured financing facility	(9,705)
Discount on secured financing facility related to purchase right	(7,958)
Debt issuance costs included in CLO debt	(4,808)
Debt issuance costs included in mortgage loan financing	(524)
Premiums included in mortgage loan financing(2)	5,002
Total	$	4,953,514

(1)Contractual payments under current maturities, some of which are subject to extensions. The maturities listed above for 2020 (last 6 months) relate to debt obligations that are subject to existing Company controlled extension options for one or more additional one year periods or could be refinanced by other existing facilities as of June 30, 2020.

(2)Deferred gains on intercompany loans, secured by our own real estate, sold into securitizations. These premiums are amortized as a reduction to interest expense.

The Company’s debt facilities are subject to covenants which require the Company to maintain a minimum level of total equity. Largely as a result of this restriction, approximately $849.0 million of the total equity is restricted from payment as a dividend by the Company at June 30, 2020.

Committed Loan and Securities Repurchase Facilities

On February 14, 2020, the Company amended one of its committed loan repurchase facilities with a major U.S. bank to reduce the maximum capacity of the facility from $600.0 million to $500.0 million.

On February 26, 2020, the Company amended one of its committed loan repurchase facilities with a major U.S. bank, extending the term of the facility. The current maturity date is now February 26, 2021, and the Company has three one-year extension options for a final maturity date of February 26, 2024. The Company also reduced the maximum size of the facility from $350.0 million to $250.0 million.

On March 23, 2020, the Company amended one of its committed loan and securities repurchase facilities with a major U.S. bank to allow for an increase in the capacity on the securities repurchase facility, to the extent the Company has excess capacity on the loan repurchase facility. Prior to the amendment, the committed amounts on the facility were $500.0 million and $400.0 million on the loan and securities repurchase facilities, respectively. After the amendment, the committed amounts continue to total $900.0 million, with maximum capacity on the loan repurchase facility of $500.0 million, and maximum capacity on the securities repurchase facility of $900.0 million less outstanding commitments on the loan repurchase facility.

Effective June 16, 2020, the Company amended the pricing side letter related to one of its committed loan repurchase facility with a major U.S. bank to extend the current maturity date to March 24, 2021. The Company also temporarily increased the leverage covenant to 4.0x through and including December 31, 2020.

Secured Financing Facility  

On April 30, 2020, the Company entered into a strategic financing arrangement (the “Agreement”) with an American multinational corporation (the “Lender”), under which the Lender will provide the Company with approximately $206.4 million in senior secured financing (the “Secured Financing Facility”) to fund transitional and land loans. The Secured Financing Facility will be secured on a first lien basis on a portfolio of certain of the Company’s loans and will mature on May 6, 2023, and borrowings thereunder will bear interest at LIBOR (or a minimum of 0.75% if greater) plus 10.0%, with a minimum interest premium of approximately $39.2 million minus the aggregate sum of all interest payments made under the Secured Financing Facility prior to the date of payment of the minimum interest premium, which is payable upon the earlier of maturity or repayment in full of the loan. The Senior Financing Facility is non-recourse, subject to limited exceptions, and does not contain mark-to-market provisions. Additionally, the Senior Financing Facility provides the Company optionality to modify or restructure loans or forbear in exercising remedies, which maximizes the Company’s financial flexibility.

As part of the strategic financing, the Lender also has the ability to make an equity investment in the Company of up to 4.0 million Class A common shares at $8.00, which amount and price may be proportionally adjusted in the event of equity distributions, stock splits, reclassifications and other similar events (the “Purchase Right”). The Purchase Right will expire on December 31, 2020. The Company expects that any such investment would additionally benefit its liquidity position.

The Purchase Right was classified as equity. The $200.9 million of net proceeds from the original issuance were allocated $192.5 million to the originally issued debt obligation and $8.4 million to the Purchase Right using the relative fair value method. The commitment to issue shares will not be subsequently remeasured. The $8.4 million allocated to the Purchase Right is being treated as a discount to the debt and amortized over the life of the Purchase Right to interest expense.

Pursuant to the Purchase Right, the Lender has agreed to a customary standstill until December 31, 2020 or the date on which the Lender has exercised the Purchase Right in full, if earlier. In addition, the Lender has agreed not to sell, transfer, assign, pledge, hypothecate, mortgage, dispose of or in any way encumber the shares acquired as a result of exercising the Purchase Right for a period of time following the exercise date. In connection with the issuance of the Purchase Right, the Company and the Lender entered into a registration rights agreement, pursuant to which the Company has agreed to provide customary demand and piggyback registration rights to the Lender.

As of June 30, 2020, the Company had $188.7 million of borrowings outstanding under the secured financing facility included in debt obligations on its consolidated balance sheets, net of unamortized debt issuance costs of $9.7 million and an $8.0 million unamortized discount related to the Purchase Right.

Collateralized Loan Obligation (“CLO”) Debt

On April 27, 2020, a consolidated subsidiary of the Company completed a private CLO transaction with a major U.S. bank which generated $310.2 million of gross proceeds to Ladder, financing $481.3 million of loans (“Contributed Loans”) at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained a 35.5% subordinate and controlling interest in the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed Loans, including broad discretion in managing these loans in light of the COVID-19 pandemic, and has the ability to appoint the special servicer under the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed Loans and has the ability to appoint the special servicer under the CLO. The CLO is a VIE and the Company was the primary beneficiary and, therefore, consolidated the VIE - See Note 10, Consolidated Variable Interest Entities. Proceeds from the transaction were used to pay off other secured debt including bank and FHLB financing that was subject to mark-to-market provisions.

As of June 30, 2020, the Company had $299.6 million of matched term, non-mark-to-market and non-recourse basis CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $4.8 million were included in CLO debt as of June 30, 2020.

Senior Unsecured Notes

As of June 30, 2020, the Company had $1.7 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $258.5 million in aggregate principal amount of 5.875% senior notes due 2021 (the “2021 Notes”), $485.6 million in aggregate principal amount of 5.25% senior notes due 2022 (the “2022 Notes”), $350.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”) and $658.0 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes,” collectively with the 2021 Notes, the 2022 Notes and the 2025 Notes, the “Notes”). As a result of the Company’s financing and liquidity measures implemented to date as a direct response to the COVID-19 pandemic, Ladder repurchased an aggregate principal of the Notes of $139.1 million, recognizing a gain on extinguishment of debt of $19.0 million, offset by accelerated deferred financing cost amortization of $1.5 million during the three months ended June 30, 2020.

2027 Notes

On January 30, 2020, LCFH and Ladder Capital Finance Corporation (“LCFC”), a wholly-owned subsidiary of LCFH, issued $750.0 million in aggregate principal amount of 4.25% senior notes due February 1, 2027. The 2027 Notes require interest payments semi-annually in cash in arrears on August 1 and February 1 of each year, beginning on August 1, 2020. The 2027 Notes will mature on February 1, 2027. The 2027 Notes are unsecured and are subject to an unencumbered assets to unsecured debt covenant. The Company may redeem the 2027 Notes, in whole, at any time, or from time to time, prior to their stated maturity. At any time on or after February 1, 2023, the Company may redeem the 2027 Notes in whole or in part, upon not less than 15 nor more than 60 days’ notice, at a redemption price defined in the indenture governing the 2027 Notes, plus accrued and unpaid interest, if any, to the redemption date. Net proceeds of the offering were used to repay secured indebtedness. During the six months ended June 30, 2020, the Company retired $92.0 million of principal of the 2027 Notes for a repurchase price of $78.4 million, recognizing a $12.3 million net gain on extinguishment of debt after recognizing $(1.3) million of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $658.0 million in aggregate principal amount of the 2027 Notes is due February 1, 2027.

2025 Notes

On September 25, 2017, LCFH and LCFC issued $400.0 million in aggregate principal amount of 5.25% senior notes due October 1, 2025. During the six months ended June 30, 2020, the Company retired $49.2 million of principal of the 2025 Notes for a repurchase price of $42.6 million, recognizing a $6.2 million net gain on extinguishment of debt after recognizing $(0.5) million of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $350.8 million in aggregate principal amount of the 2025 Notes is due October 1, 2025.

2022 Notes

On March 16, 2017, LCFH issued $500.0 million in aggregate principal amount of 5.250% senior notes due March 15, 2022. During the six months ended June 30, 2020, the Company retired $14.4 million of principal of the 2022 Notes for a repurchase price of $13.8 million, recognizing a $0.6 million net gain on extinguishment of debt after recognizing $(0.1) million of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $485.6 million in aggregate principal amount of the 2022 Notes is due March 15, 2022.

2021 Notes

On August 1, 2014, LCFH and LCFC issued $300.0 million in aggregate principal amount of 5.875% senior notes due August 1, 2021. During the six months ended June 30, 2020, the Company retired $7.7 million of principal of the 2021 Notes for a repurchase price of $7.5 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(20.0) thousand of unamortized debt issuance costs associated with the retired debt. As of June 30, 2020, the remaining $258.5 million in aggregate principal amount of the 2021 Notes is due August 1, 2021.

Financing Strategy in Current Market Conditions

In March 2020, as the COVID-19 health crisis rapidly transformed into a financial crisis, management took swift action to increase liquidity resources and actively manage its financing arrangements with its bank partners. In an abundance of caution, the Company first drew down on its $266.4 million unsecured revolving credit facility, which continues to be fully-drawn, and the proceeds continue to be held as unrestricted cash on the Company’s balance sheet as of July 30, 2020.   

Securities Repurchase Facilities: The Company invests in AAA-rated CRE CLO securities, typically front pay securities, with relatively short duration and significant subordination. These securities have historically been financed with short-term maturity repurchase agreements with various bank counterparties. The Company has been able to continue to access securities repurchase funding and the pricing of such borrowings has improved during the three months ended June 30, 2020 as liquidity returned to the market and pricing for the securities that serve as collateral improved. Furthermore, during the three months ended June 30, 2020, the Company paid down $275.8 million of securities repurchase financing, primarily through sales of securities. As of July 27, 2020, the Company had $834.4 million outstanding of securities repurchase financing with maturities ranging from 3 days to 17 months.

Federal Home Loan Bank (“FHLB”) Financing:  As discussed in the Company’s Annual Report, in 2016, the FHFA adopted a final rule that limited our captive insurance subsidiary’s membership in the FHLB, requiring us to significantly reduce the amounts of FHLB borrowings outstanding by February of 2021.

During the three months ended June 30, 2020, the Company paid down FHLB borrowings of $646.8 million, with $360.8 million outstanding as of July 27, 2020. The remaining maturities are staggered out through 2024. Funding for future advance paydowns would be obtained from the natural amortization of securities over time, loan pay offs and/or sales of loan and securities collateral. The Company incurred $6.5 million in prepayment penalties related to this paydown of FHLB borrowings.

Loan Repurchase Financing:  The Company has maintained a consistent dialogue with its loan financing counterparties since the COVID-19 crisis unfolded in late March 2020. In addition to using proceeds from the Company’s 2027 Notes offering in January to reduce secured debt, during the three months ended June 30, 2020, the Company paid down over $155.9 million on such loan repurchase financing through loan collateral pay offs and loans securitized through a CLO financing transaction (see above).

As of July 27, 2020, the Company had $374.9 million of loan repurchase debt outstanding with five separate bank counterparties. The Company continues to maintain an active dialogue with its bank counterparties as it expects loan collateral on each of their lines to experience some measure of forbearance.

Secured Financing Facility:  On April 30, 2020, the Company entered into a strategic financing arrangement (the “Agreement”) with an American multinational corporation (the “Lender”), under which the Lender will provide the Company with approximately $206.4 million in senior secured financing (the “Secured Financing Facility”) to fund transitional and land loans (see above).

Completion of Private CLO: On April 27, 2020, the Company completed a private CLO financing transaction with a major U.S. bank which generated $310.2 million of gross proceeds, financing $481.3 million of loans at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis (see above).

As a result of our financing and liquidity measures implemented to date in direct response to the COVID-19 pandemic, as of July 27, 2020, Ladder had over $750.0 million of unrestricted cash on hand. Based on the financing actions described above, the Company has significantly decreased its exposure to mark-to-market financing.

Financial Covenants

We were in compliance with all covenants described in the Company’s Annual Report, as of June 30, 2020.

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DERIVATIVE INSTRUMENTS

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

8. DERIVATIVE INSTRUMENTS

The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)
Caps
1 Month LIBOR	$	69,571	$	—	$	—	0.86
Futures
5-year Swap	24,400		103		—		0.25
10-year Swap	61,000		258		—		0.25
5-year U.S. Treasury Note	4,500		19		—		0.25
Total futures	89,900		380		—
Total derivatives	$	159,471	$	380	$	—

(1)Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

December 31, 2019

			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)
Caps
1Month LIBOR	$	69,571	$	—	$	—	0.36
Futures
5-year Swap	46,000		158		—		0.25
10-year Swap	149,800		516		—		0.25
5-year U.S. Treasury Note	1,100		4		—		0.25
Total futures	196,900		678		—
Credit Derivatives
S&P 500 Put Options	143,300		15		—		0.05
Total credit derivatives	143,300		15		—
Total derivatives	$	409,771	$	693	$	—

(1)Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

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 and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Contract Type
Futures	$	(570)	$	(326)	$	(896)	$	(298)	$	(16,272)	$	(16,570)
Credit Derivatives	—		83		83		111		211		322
Total	$	(570)	$	(243)	$	(813)	$	(187)	$	(16,061)	$	(16,248)

	Three Months Ended June 30, 2019						Six Months Ended June 30, 2019
	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Contract Type
Futures	$	(1,046)	$	(14,361)	$	(15,407)	$	1,511	$	(27,894)	$	(26,383)
Credit Derivatives	66		(116)		(50)		—		(108)		(108)
Total	$	(980)	$	(14,477)	$	(15,457)	$	1,511	$	(28,002)	$	(26,491)

The Company’s counterparties held $1.7 million and $3.5 million of cash margin as collateral for derivatives as of June 30, 2020 and December 31, 2019, respectively, which is included in restricted cash in the consolidated balance sheets.

Futures

Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an ISDA agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for our interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Effective January 3, 2017, CME amended their rulebooks to legally characterize daily variation margin payments for centrally cleared interest rate futures as settlement rather than collateral. As a result of this rule change, variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures.

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OFFSETTING ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2020

Offsetting [Abstract]

OFFSETTING ASSETS AND LIABILITIES

9. OFFSETTING ASSETS AND LIABILITIES

The following tables present both gross information and net information about derivatives and other instruments eligible for offset in the statement of financial position as of June 30, 2020 and December 31, 2019. The Company’s accounting policy is to record derivative asset and liability positions on a gross basis; therefore, the following tables present the gross derivative asset and liability positions recorded on the balance sheets, while also disclosing the eligible amounts of financial instruments and cash collateral to the extent those amounts could offset the gross amount of derivative asset and liability positions. The actual amounts of collateral posted by or received from counterparties may be in excess of the amounts disclosed in the following tables as the following only disclose amounts eligible to be offset to the extent of the recorded gross derivative positions.

As of June 30, 2020

Offsetting of Financial Assets and Derivative Assets

($ in thousands)

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	380	$	—	$	380	$	—	$	—	$	380
Total	$	380	$	—	$	380	$	—	$	—	$	380

(1)Included in restricted cash on consolidated balance sheets.

As of June 30, 2020

Offsetting of Financial Liabilities and Derivative Liabilities

($ in thousands)

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	1,295,029	$	—	$	1,295,029	$	1,295,029	$	—	$	—
Total	$	1,295,029	$	—	$	1,295,029	$	1,295,029	$	—	$	—

(1)Included in restricted cash on consolidated balance sheets.

As of December 31, 2019

Offsetting of Financial Assets and Derivative Assets

($ in thousands)

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	693	$	—	$	693	$	—	$	—	$	693
Total	$	693	$	—	$	693	$	—	$	—	$	693

(1)Included in restricted cash on consolidated balance sheets.

As of December 31, 2019

Offsetting of Financial Liabilities and Derivative Liabilities

($ in thousands)

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)
Repurchase agreements	$	1,815,934	$	—	$	1,815,934	$	1,815,934	$	—	$	—
Total	$	1,815,934	$	—	$	1,815,934	$	1,815,934	$	—	$	—

(1)Included in restricted cash on consolidated balance sheets.

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. Assets, liabilities, and collateral subject to master netting agreements as of June 30, 2020 and December 31, 2019 are disclosed in the tables above. The Company does not present its derivative and repurchase agreements net on the consolidated financial statements as it has elected gross presentation.

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CONSOLIDATED VARIABLE INTEREST ENTITIES

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONSOLIDATED VARIABLE INTEREST ENTITIES

10. CONSOLIDATED VARIABLE INTEREST ENTITIES

FASB ASC Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Operating Partnership is a VIE and as such, substantially all of the consolidated balance sheet is a consolidated VIE. In addition, the Operating Partnership consolidates one collateralized loan obligation (“CLO”) VIE with the following balance sheet ($ in thousands):

	June 30, 2020
	Notes 3 & 7
Restricted cash	$	8,649,072
Mortgage loan receivables held for investment, net, at amortized cost	469,505,178
Accrued interest receivable	1,769,859
Total assets	$	479,924,109
Senior and unsecured debt obligations	$	299,604,861
Accrued expenses	697,612
Total liabilities	300,302,473
Net equity in VIEs (eliminated in consolidation)	179,621,636
Total equity	179,621,636
Total liabilities and equity	$	479,924,109

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EQUITY STRUCTURE AND ACCOUNTS

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

EQUITY STRUCTURE AND ACCOUNTS

11. EQUITY STRUCTURE AND ACCOUNTS

Exchange for Class A Common Stock

Pursuant to the Third Amended and Restated LLLP Agreement of LCFH, the Continuing LCFH Limited Partners may from time to time, subject to certain conditions, receive one share of the Company’s Class A common stock in exchange for (i) one share of the Company’s Class B common stock, (ii) one Series REIT LP Unit and (iii) either one Series TRS LP Unit or one TRS I LLC Share, subject to equitable adjustments for stock splits, stock dividends and reclassifications.

During the six months ended June 30, 2020, 6,779,225 Series REIT LP Units and 6,779,225 Series TRS LP Units were collectively exchanged for 6,779,225 shares of Class A common stock and 6,779,225 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges. As of June 30, 2020, the Company held a 95.5% interest in LCFH.

During the six months ended June 30, 2019, 1,139,411 Series REIT LP Units and 1,139,411 Series TRS LP Units were collectively exchanged for 1,139,411 shares of Class A common stock; and 1,139,411 shares of Class B common stock were canceled. We received no other consideration in connection with these exchanges. As of June 30, 2019, the Company held a 89.8% interest in LCFH.

Stock Repurchases

On October 30, 2014, the board of directors authorized the Company to repurchase up to $50.0 million of the Company’s Class A common stock from time to time without further approval. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. As of June 30, 2020, the Company has a remaining amount available for repurchase of $39.5 million, which represents 4.2% in the aggregate of its outstanding Class A common stock, based on the closing price of $8.10 per share on such date.

The following table is a summary of the Company’s repurchase activity of its Class A common stock during the six months ended June 30, 2020 and 2019 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2019		$	41,132
Additional authorizations		—
Repurchases paid	210,151	(1,682)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2020		$	39,450

(1)Amount excludes commissions paid associated with share repurchases.

	Shares	Amount(1)
Authorizations remaining as of December 31, 2018		$	41,769
Additional authorizations		—
Repurchases paid	40,065	(637)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2019		$	41,132

(1)Amount excludes commissions paid associated with share repurchases.

Dividends

The following table presents dividends declared (on a per share basis) of Class A common stock for the six months ended June 30, 2020 and 2019:

Declaration Date	Dividend per Share
February 27, 2020	$	0.340
May 28, 2020	0.200
	$	0.540
February 27, 2019	$	0.340
May 30, 2019	0.340
Total	$	0.680

Changes in Accumulated Other Comprehensive Income

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the six months ended June 30, 2020 and 2019 ($ in thousands):

	Accumulated Other Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests		Total Accumulated Other Comprehensive Income (Loss)
December 31, 2019	$	4,218	$	477	$	4,695
Other comprehensive income (loss)	(46,530)		(5,354)		(51,884)
Exchange of noncontrolling interest for common stock	(4,915)		4,915		—
Rebalancing of ownership percentage between Company and Operating Partnership	2,147		(2,147)		—
June 30, 2020	$	(45,080)	$	(2,109)	$	(47,189)

	Accumulated Other Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests		Total Accumulated Other Comprehensive Income (Loss)
December 31, 2018	$	(4,649)	$	(588)	$	(5,237)
Other comprehensive income (loss)	16,738		2,044		18,782
Exchange of noncontrolling interest for common stock	65		(65)		—
Rebalancing of ownership percentage between Company and Operating Partnership	17		(17)		—
June 30, 2019	$	12,171	$	1,374	$	13,545

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NONCONTROLLING INTERESTS

6 Months Ended

Jun. 30, 2020

Noncontrolling Interest [Abstract]

NONCONTROLLING INTERESTS

12. NONCONTROLLING INTERESTS

There are two main types of noncontrolling interest reflected in the Company’s consolidated financial statements (i) noncontrolling interest in the operating partnership and (ii) noncontrolling interest in consolidated joint ventures.

Noncontrolling Interest in the Operating Partnership

As more fully described in Note 1, certain of the predecessor equity owners continue to own interests in the Operating Partnership as modified by the IPO Transactions. These interests were subsequently further modified by the REIT Structuring Transactions (also described in Note 1). These interests, along with the Class B shares held by these investors, are exchangeable for Class A shares of the Company. The roll-forward of the Operating Partnership’s LP Units follow the Class B common stock of the Company as disclosed in the consolidated statements of changes in equity.

Pursuant to ASC 810, Consolidation, on the accounting and reporting for noncontrolling interests and changes in ownership interests of a subsidiary, changes in a parent’s ownership interest (and transactions with noncontrolling interest unitholders in the subsidiary), while the parent retains its controlling interest in its subsidiary, should be accounted for as equity transactions. The carrying amount of the noncontrolling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. Accordingly, as a result of Continuing LCFH Limited Partners exchanges which caused changes in ownership percentages between the Company’s Class A shareholders and the noncontrolling interests in the Operating Partnership that occurred during the six months ended June 30, 2020, the Company has decreased noncontrolling interests in the Operating Partnership and accumulated other comprehensive income and increased additional paid-in capital in the Company’s shareholders’ equity by $1.2 million as of June 30, 2020.

Distributions to Noncontrolling Interest in the Operating Partnership

Notwithstanding the foregoing, subject to any restrictions in applicable debt financing agreements and available liquidity as determined by the board of directors of each of Series REIT of LCFH and Series TRS of LCFH, each Series must use commercially reasonable efforts to make quarterly distributions to each of its partners (including the Company) at least equal to such partner’s “Quarterly Estimated Tax Amount,” which shall be computed (as more fully described in LCFH’s Third Amended and Restated LLLP Agreement) for each partner as the product of (x) the U.S. federal taxable income (or alternative minimum taxable income, if higher) allocated by such Series to such partner in respect of the Series REIT LP Units and Series TRS LP Units held by such partner and (y) the highest marginal blended U.S. federal, state and local income tax rate (or alternative minimum taxable rate, as applicable) applicable to an individual residing in New York, NY, taking into account, for U.S. federal income tax purposes, the deductibility of state and local taxes; provided that Series TRS of LCFH may take into account, in determining the amount of tax distributions to holders of Series TRS LP Units, the amount of any distributions each such holder received from Series REIT of LCFH in excess of tax distributions. In addition, to the extent the Company requires an additional distribution from the Series of LCFH in excess of its quarterly tax distribution in order to pay its quarterly cash dividend, the Series of LCFH will be required to make a corresponding distribution of cash to each of their partners (other than the Company) on a pro-rata basis.

Allocation of Income and Loss

Income and losses and comprehensive income are allocated among the partners in a manner to reflect as closely as possible the amount each partner would be distributed under the Third Amended and Restated LLLP Agreement of LCFH upon liquidation of the Operating Partnership’s assets.

Noncontrolling Interest in Consolidated Joint Ventures

As of June 30, 2020, the Company consolidates five ventures in which there are other noncontrolling investors, which own between 10% - 29.4% of such ventures. These ventures hold investments in a 40-building student housing portfolio in Isla Vista, CA with a book value of $82.1 million, 11 office buildings in Richmond, VA with a book value of $72.4 million, a single-tenant office building in Ewing, NJ with a book value of $26.3 million, an industrial building in Lithia Springs, GA with an aggregate book value of $23.3 million and an apartment complex in Miami, FL with a book value of $37.3 million. The Company makes distributions and allocates income from these ventures to the noncontrolling interests in accordance with the terms of the respective governing agreements.

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

13. EARNINGS PER SHARE

The Company’s net income (loss) and weighted average shares outstanding for the three and six months ended June 30, 2020 and 2019 consist of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands except share amounts)	2020		2019		2020		2019
Basic Net income (loss) available for Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Diluted Net income (loss) available for Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Weighted average shares outstanding
Basic	106,809,987		105,511,385		106,569,892		104,888,925
Diluted	106,809,987		105,892,420		106,569,892		105,742,589

The calculation of basic and diluted net income (loss) per share amounts for the three and six months ended June 30, 2020 and 2019 consist of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands except share amounts)	2020		2019		2020(1)		2019(1)
Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Denominator:
Weighted average number of shares of Class A common stock outstanding	106,809,987		105,511,385		106,569,892		104,888,925
Basic net income (loss) per share of Class A common stock	$	(0.04)	$	0.31	$	(0.19)	$	0.52
Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Add (deduct) - dilutive effect of:
Amounts attributable to operating partnership’s share of Ladder Capital Corp net income (loss)(2)	—		—		—		—
Additional corporate tax (expense) benefit(2)	—		—		—		—
Diluted net income (loss) attributable to Class A common shareholders	(4,189)		32,244		(19,918)		54,419
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	106,809,987		105,511,385		106,569,892		104,888,925
Add - dilutive effect of:
Shares issuable relating to converted Class B common shareholders(3)	—		—		—		—
Incremental shares of unvested Class A restricted stock(3)	—		381,035		—		853,664
Incremental shares of unvested stock options	—		—		—		—
Diluted weighted average number of shares of Class A common stock outstanding	106,809,987		105,892,420		106,569,892		105,742,589
Diluted net income (loss) per share of Class A common stock	$	(0.04)	$	0.30	$	(0.19)	$	0.51

(1)For three and six months ended June 30, 2020 and 2019, shares issuable relating to converted Class B common shareholders are excluded from the calculation of diluted EPS as the inclusion of such potential common shares in the calculation would be anti-dilutive.

(2)The Company is using the as-if converted method for the Class B common shareholders while adjusting for additional corporate income tax expense (benefit) for the described net income (loss) add-back.

(3)The Company is using the treasury stock method.

The shares of Class B common stock do not share in the earnings of Ladder Capital Corp and are, therefore, not participating securities. Accordingly, basic and diluted net income (loss) per share of Class B common stock has not been presented, although the assumed conversion of Class B common stock has been included in the presented diluted net income (loss) per share of Class A common stock.

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STOCK BASED AND OTHER COMPENSATION PLANS

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

STOCK BASED AND OTHER COMPENSATION PLANS

14. STOCK BASED AND OTHER COMPENSATION PLANS

The following table summarizes the impact on the consolidated statement of operations of the various stock based compensation plans described in Note 14, Stock Based and Other Compensation Plans included within the Company’s Annual Report ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Stock Based Compensation Expense	$	2,712	$	3,469	$	16,738	$	14,761
Phantom Equity Investment Plan	561		(98)		(1,577)		704
Stock Options Exercised	—		—		270		—
Bonus Expense	—		7,717		(30)		14,501
Total	$	3,273	$	11,088	$	15,401	$	29,966

Summary of Stock and Shares/Options Nonvested/Outstanding

A summary of the grants is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares/Options	Weighted Average Fair Value Per Share
Grants - Class A Common Stock	—	$	—	4,568	$	16.42	1,466,337	$	18.72	1,545,569	$	17.56
Grants - Class A Common Stock dividends	—	—		—	—		—	—		11,113	16.61
Stock Options	—	—		—	—		—	—		12,073	—

The table below presents the number of unvested shares and outstanding stock options at June 30, 2020 and changes during 2020 of the Class A Common stock and Stock Options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

	Restricted Stock	Stock Options
Nonvested/Outstanding at December 31, 2019	1,436,683	994,208
Granted	1,466,337	—
Exercised		(83,845)
Vested	(1,209,771)
Forfeited	(24,089)	—
Expired		—
Nonvested/Outstanding at June 30, 2020	1,669,160	910,363
Exercisable at June 30, 2020		910,363

At June 30, 2020 there was $21.0 million of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 26.8 months, with a weighted-average remaining vesting period of 32 months.

2014 Omnibus Incentive Plan

In connection with the IPO Transactions, the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) was adopted by the board of directors on February 11, 2014, and provides certain members of management, employees and directors of the Company or its affiliates with additional incentives including grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards.

Annual Incentive Awards Granted in 2020 with Respect to 2019 Performance

For 2019 performance, certain employees received stock-based incentive equity. Fair value for all restricted and unrestricted stock grants was calculated using the closing stock price on the grant date. Compensation expense for unrestricted stock grants will be expensed immediately. The Company has elected to recognize the compensation expense related to the time-based vesting of the annual restricted stock awards for the entire award on a straight-line basis over the requisite service period for the entire award. Restricted stock subject to performance criteria is eligible to vest in three equal installments upon the compensation committee’s confirmation that the Company achieves a return on equity, based on core earnings divided by the Company’s average book value of equity, equal to or greater than 8% for such year (the “Performance Target”) for the years ended December 31, 2020, 2021 and 2022, respectively. If the Company misses the Performance Target during either the first or second calendar year but meets the Performance Target for a subsequent year during the three year performance period and the Company’s return on equity for such subsequent year and any years for which it missed its Performance Target equals or exceeds the compounded return on equity of 8%, based on core earnings divided by the Company’s average book value of equity, the performance-vesting restricted stock which failed to vest because the Company previously missed its Performance Target will vest subject to continued employment on the applicable vesting date (the “Catch-Up Provision”). Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved. In view of the adverse impacts of COVID-19 on the Company’s operations and investments and the resulting intensified corporate focus on defensive actions, including maintaining high levels of unrestricted cash liquidity and refinancing debt with more expensive non-mark-to-market funding sources, the Company is no longer classifying the 2020 Performance Target as probable as of June 30, 2020 and has reversed $1.0 million of previous compensation expense relating to grants of restricted stock with a December 2020 performance hurdle as their last vesting date (not available to take advantage of the Catch-Up Provision). However, recognizing that Ladder’s employees took these actions that, while in the best interests of the Company and its shareholders, would not produce earnings consistent with the Performance Target in their deferred compensation arrangements, on May 27, 2020, the compensation committee of the board of directors used its discretion to waive the Performance Target for shares eligible to vest based on the Company’s performance in 2020 and 2021, subject to continued employment on the applicable vesting dates. The Company recorded $0.1 million of incremental compensation cost during the three and six months ended June 30, 2020 as a result of this modification. There are currently 48 Ladder employees and one consultant eligible for such waiver.

On February 18, 2020, in connection with 2019 compensation, annual stock and restricted stock awards were granted to management grantees, other than Ms. Porcella, with an aggregate fair value of $12.5 million which represents 667,201 shares of restricted Class A common stock. The grant to Ms. Porcella is subject to the same time-based and performance-based vesting described below for non-management grantees and her shares are included in that total. The grant to Mr. Harris, and 50% of the grants to Mr. Fox, Ms. McCormack and Mr. Perelman, were unrestricted. The other 50% of incentive equity granted to Mr. Fox, Ms. McCormack and Mr. Perelman is restricted stock subject to performance criteria as described above.

On February 18, 2020, in connection with 2019 compensation, stock awards were granted to Ms. Porcella and non-management employees (“Non-Management Grantees”) with an aggregate value of $14.5 million which represents 775,100 shares of mostly restricted Class A common stock. Fifty percent of most stock awards is subject to time-based vesting criteria, and the remaining 50% of these stock awards is subject to attainment of the Performance Target for the applicable years. The time-vesting restricted stock will vest in three installments on February 18 of each of 2021, 2022 and 2023 subject to continued employment on the applicable vesting dates. The performance-vesting restricted stock will vest in three equal installments upon the compensation committee’s confirmation that the Company achieves the Performance Target for the years ended December 31, 2020, 2021 and 2022, respectively. The Catch-Up Provision applies to the performance vesting portion of this award. The compensation expense related to the performance-based restricted stock granted on February 18, 2020 shall be recognized 1/3 for the period February 18, 2020 through February 18, 2021, 1/3 for the period February 19, 2021 through February 18, 2022 and 1/3 for the period February 19, 2022 through February 18, 2023.

In the event Ms. Porcella or a Non-Management Grantee is terminated by the Company without cause within six months of certain changes in control, all unvested time shares shall vest on the termination date and all unvested performance shares shall remain outstanding and be eligible to vest (and be forfeited) in accordance with the performance conditions.

Upon a change in control (as defined in the respective award agreements), restricted stock awards to Mr. Fox, Ms. McCormack and Mr. Perelman will become fully vested if (1) such management grantee continues to be employed through the closing of the change in control or (2) after the signing of definitive documentation related to the change in control, but prior to its closing, such management grantee’s employment is terminated without cause or due to death or disability or the management grantee resigns for Good Reason, as described in the Company’s definitive proxy statement filed with the SEC on April 28, 2020. The compensation committee retains the right, in its sole discretion, to provide for the accelerated vesting (in whole or in part) of the restricted stock and option awards granted.

2020 Restricted Stock Awards

On February 18, 2020, certain members of the board of directors each received Annual Restricted Stock Awards with a grant date fair value of $0.4 million, representing 24,036 shares of restricted Class A common stock, which will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense related to the time-based vesting criteria of the award shall be recognized on a straight-line basis over the one year vesting period. On March 26, 2020, 5,803 shares of restricted Class A common stock were forfeited when a member resigned from the board of directors.

Bonus Payments

On February 6, 2020, the board of directors of Ladder Capital Corp approved the 2019 bonus payments to employees, including officers, totaling $55.2 million, which included $27.0 million of equity based compensation. The bonuses were accrued for as of December 31, 2019 and paid to employees in full on February 14, 2020. On February 7, 2019, the board of directors of Ladder Capital Corp approved the 2018 bonus payments to employees, including officers, totaling $61.4 million, which included $26.6 million of equity based compensation. The bonuses were accrued for as of December 31, 2018 and paid to employees in full on February 15, 2019. During the three and six months ended June 30, 2020, the Company recorded no compensation expense related to bonuses due to the significant market disruption caused by the COVID-19 pandemic and the substantial economic uncertainty present in the commercial real estate market and overall economy. During the three and six months ended June 30, 2019, the Company recorded compensation expense of $7.7 million and $14.5 million, respectively, related to bonuses.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is based upon internal models, using 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.

Fair Value Summary Table

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2020 and December 31, 2019 are as follows ($ in thousands):

June 30, 2020

									Weighted Average
	Outstanding Face Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	1,496,090		$	1,495,892	$	1,447,338	Internal model, third-party inputs	1.57	%	2.27
CMBS interest-only(1)	1,535,739		(2)	25,026		25,510		Internal model, third-party inputs	2.83	%	2.34
GNMA interest-only(3)	93,464		(2)	1,335		1,379		Internal model, third-party inputs	4.21	%	3.18
Agency securities(1)	610			619		636		Internal model, third-party inputs	1.68	%	1.56
GNMA permanent securities(1)	30,853			31,006		31,870		Internal model, third-party inputs	3.50	%	2.41
Provision for current expected credit reserves	N/A			(19)		(19)		(5)	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	2,971,622			2,955,084		2,928,796		Discounted Cash Flow(4)	6.82	%	1.22
Provision for current expected credit reserves	N/A			(49,102)		(49,102)		(5)	N/A		N/A
Mortgage loan receivables held for sale	86,456			85,977		87,960		Internal model, third-party inputs(6)	3.94	%	9.70
FHLB stock(7)	61,619			61,619		61,619		(7)	4.00	%	N/A
Nonhedge derivatives(1)(8)	89,900			N/A		380		Counterparty quotations	N/A		0.25
Liabilities:
Repurchase agreements - short-term	1,217,013			1,217,013		1,217,013		Discounted Cash Flow(9)	2.64	%	0.22
Repurchase agreements - long-term	78,016			78,016		78,016		Discounted Cash Flow(10)	1.56	%	1.27
Revolving credit facility	266,430			266,430		266,430		Discounted Cash Flow(9)	3.00	%	0.05
Mortgage loan financing	800,952			805,431		828,693		Discounted Cash Flow(10)	4.97	%	4.88
Secured financing facility	188,687			188,687		188,687		Discounted Cash Flow(9)	10.75	%	2.85
CLO debt	299,605			299,605		299,605		Discounted Cash Flow(9)	5.50	%	3.88
Borrowings from the FHLB	360,790			360,790		362,559		Discounted Cash Flow	1.39	%	2.67
Senior unsecured notes	1,752,817			1,737,542		1,025,236		Internal model, third-party inputs	4.97	%	4.16
Nonhedge derivatives(1)(8)	69,571			N/A		—		Counterparty quotations	N/A		0.86

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(5)Fair value is estimated to equal par value.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)Fair value for repurchase agreement liabilities - short term borrowings under the secured financing facility and borrowings under the revolving credit facility 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. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term, mortgage loan financing, and CLO debt the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

December 31, 2019  

									Weighted Average
	Outstanding Face Amount			Amortized Cost Basis		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	1,640,597		$	1,640,905	$	1,644,322	Internal model, third-party inputs	3.08	%	2.41
CMBS interest-only(1)	1,559,160		(2)	28,553		29,146		Internal model, third-party inputs	3.04	%	2.53
GNMA interest-only(3)	109,783		(2)	1,982		1,851		Internal model, third-party inputs	4.59	%	2.77
Agency securities(1)	629			640		637		Internal model, third-party inputs	1.73	%	1.83
GNMA permanent securities(1)	31,461			31,681		32,369		Internal model, third-party inputs	3.17	%	1.93
Equity securities(3)	N/A			12,848		12,980		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	3,277,596			3,257,036		3,273,219		Discounted Cash Flow(4)	6.94	%	1.43
Provision for loan losses	N/A			(20,500)		(20,500)		(5)	N/A		N/A
Mortgage loan receivables held for sale	122,748			122,325		124,989		Internal model, third-party inputs(6)	4.20	%	9.99
FHLB stock(7)	61,619			61,619		61,619		(7)	4.75	%	N/A
Nonhedge derivatives(1)(8)	340,200			N/A		693		Counterparty quotations	N/A		0.25
Liabilities:
Repurchase agreements - short-term	1,781,253			1,781,253		1,781,253		Discounted Cash Flow(9)	2.50	%	0.19
Repurchase agreements - long-term	34,681			34,681		34,681		Discounted Cash Flow(10)	2.81	%	1.41
Mortgage loan financing	807,854			812,606		838,766		Discounted Cash Flow(10)	4.91	%	5.65
Borrowings from the FHLB	1,073,500			1,073,500		1,080,354		Discounted Cash Flow	2.33	%	2.08
Senior unsecured notes	1,166,201			1,157,833		1,208,860		Internal model, third-party inputs	5.39	%	3.28
Nonhedge derivatives(1)(8)	69,571			N/A		—		Counterparty quotations	N/A		0.36

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow.

(5)Fair value is estimated to equal par value.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)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. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term and mortgage loan financing, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	1,484,514		$	—	$	—	$	1,436,227	$	1,436,227
CMBS interest-only(1)	1,525,120		(2)	—		—		24,772		24,772
GNMA interest-only(3)	93,464		(2)	—		—		1,379		1,379
Agency securities(1)	610			—		—		636		636
GNMA permanent securities(1)	30,853			—		—		31,870		31,870
Nonhedge derivatives(4)	89,900			—		380		—		380
				$	—	$	380	$	1,494,884	$	1,495,264
Liabilities:
Nonhedge derivatives(4)	69,571			$	—	$	—	$	—	$	—
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	2,971,622		$	—	$	—	$	2,928,796	$	2,928,796
Provision for current expected credit losses	N/A			—		—		(49,102)		(49,102)
Mortgage loan receivable held for sale	86,456			—		—		87,960		87,960
CMBS(5)	11,576			—		—		11,111		11,111
CMBS interest-only(5)	10,619		(2)	—		—		738		738
Provision for current expected credit losses	N/A							(19)		(19)
FHLB stock	61,619			—		—		61,619		61,619
				$	—	$	—	$	3,041,103	$	3,041,103
Liabilities:
Repurchase agreements - short-term	1,217,013			$	—	$	—	$	1,217,013	$	1,217,013
Repurchase agreements - long-term	78,016			—		—		78,016		78,016
Revolving credit facility	266,430			—		—		266,430		266,430
Mortgage loan financing	800,952			—		—		828,693		828,693
Secured financing facility	188,687			—		—		188,687		188,687
CLO debt	299,605			—		—		299,605		299,605
Borrowings from the FHLB	360,790			—		—		362,559		362,559
Senior unsecured notes	1,752,817			—		—		1,025,236		1,025,236
				$	—	$	—	$	4,266,239	$	4,266,239

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, which are classified as held-to-maturity and reported at amortized cost.

December 31, 2019

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	1,628,476		$	—	$	—	$	1,632,714	$	1,632,714
CMBS interest-only(1)	1,548,061		(2)	—		—		28,342		28,342
GNMA interest-only(3)	109,783		(2)	—		—		1,851		1,851
Agency securities(1)	629			—		—		637		637
GNMA permanent securities(1)	31,461			—		—		32,369		32,369
Equity securities	N/A			12,980		—		—		12,980
Nonhedge derivatives(4)	340,200			—		693		—		693
				$	12,980	$	693	$	1,695,913	$	1,709,586
Liabilities:
Nonhedge derivatives(4)	$	69,571		$	—	$	—	$	—	$	—
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	3,277,597		$	—	$	—	$	3,273,219	$	3,273,219
Provision for loan losses	N/A			—		—		(20,500)		(20,500)
Mortgage loan receivables held for sale	122,748			—		—		124,989		124,989
CMBS(5)	12,121			—		—		11,608		11,608
CMBS interest-only(5)	11,099		(2)	—		—		804		804
FHLB stock	61,619			—		—		61,619		61,619
				$	—	$	—	$	3,451,739	$	3,451,739
Liabilities:
Repurchase agreements - short-term	1,781,253			$	—	$	—	$	1,781,253	$	1,781,253
Repurchase agreements - long-term	34,681			—		—		34,681		34,681
Mortgage loan financing	807,854			—		—		838,766		838,766
Borrowings from the FHLB	1,073,500			—		—		1,080,354		1,080,354
Senior unsecured notes	1,166,201			—		—		1,208,860		1,208,860
				$	—	$	—	$	4,943,914	$	4,943,914

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, which are classified as held-to-maturity and reported at amortized cost.

The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the six months ended June 30, 2020 and December 31, 2019 ($ in thousands):

	Six Months Ended June 30,
Level 3	2020		2019
Balance at January 1,	$	1,695,913	$	1,385,957
Transfer from level 2	—		—
Purchases	437,536		847,318
Sales	(517,535)		(379,961)
Paydowns/maturities	(52,271)		(110,400)
Amortization of premium/discount	(4,278)		(6,267)
Unrealized gain/(loss)	(51,709)		18,804
Realized gain/(loss) on sale(1)	(12,773)		7,242
Balance at June 30,	$	1,494,883	$	1,762,693

(1)Includes realized losses on securities recorded as other than temporary impairments.

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

June 30, 2020

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	1,436,227		Discounted cash flow	Yield (4)	1.42	%	3.54	%	10	%
					Duration (years)(5)	0.00		2.72		6.26
CMBS interest-only(1)	24,772		(2)	Discounted cash flow	Yield (4)	—	%	2.33	%	10	%
					Duration (years)(5)	0.10		2.34		3.28
					Prepayment speed (CPY)(5)	100.00		100.00		100.00
GNMA interest-only(3)	1,379		(2)	Discounted cash flow	Yield (4)	—	%	3.26	%	10	%
					Duration (years)(5)	0.00		2.45		6.57
					Prepayment speed (CPJ)(5)	5.00		15.42		35.00
Agency securities(1)	636			Discounted cash flow	Yield (4)	—	%	0.32	%	1.72	%
					Duration (years)(5)	0.00		2.02		2.48
GNMA permanent securities(1)	31,870			Discounted cash flow	Yield (4)	1.42	%	2.44	%	6.44	%
					Duration (years)(5)	1.15		9.89		14.81
Total	$	1,494,884

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

(5)Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question.

December 31, 2019

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	1,632,714		Discounted cash flow	Yield (3)	—	%	3.11	%	19.92	%
					Duration (years)(4)	0.00		1.63		6.87
CMBS interest-only(1)	28,342		(2)	Discounted cash flow	Yield (3)	1.57	%	3.93	%	7.62	%
					Duration (years)(4)	0.26		2.47		3.51
					Prepayment speed (CPY)(4)	100.00		97.24		100.00
GNMA interest-only(3)	1,851		(2)	Discounted cash flow	Yield (4)	(4.82)	%	15.13	%	44.5	%
					Duration (years)(5)	0.85		2.90		13.69
					Prepayment speed (CPJ)(5)	5.00		12.36		35.00
Agency securities(1)	637			Discounted cash flow	Yield (4)	—	%	1.7	%	2.16	%
					Duration (years)(5)	0.00		2.30		2.92
GNMA permanent securities(1)	32,369			Discounted cash flow	Yield (4)	56.56	%	166.79	%	410	%
					Duration (years)(5)	2.60		3.61		6.49
Total	$	1,695,913

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

(5)Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-down of assets value due to impairment. Refer to Note 3, Mortgage Loan Receivables and Note 5, Real Estate and Related Lease Intangibles, Net for disclosure of level 3 inputs.

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INCOME TAXES

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

16. INCOME TAXES

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2015 (the REIT Election”). As such, the Company’s income is generally not subject to U.S. federal, state and local corporate income taxes other than as described below.

Certain of the Company’s subsidiaries have elected to be treated as TRSs. TRSs permit the Company to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, the Company will continue to maintain its qualification as a REIT. The Company’s TRSs are not consolidated for U.S. federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in TRSs. Current income tax expense (benefit) was $1.6 million and $(15.0) million for the three and six months ended June 30, 2020, respectively. Current income tax expense (benefit) was $(1.3) million and $(7.4) million for the three and six months ended June 30, 2019, respectively.

As of June 30, 2020 and December 31, 2019, the Company’s net deferred tax assets (liabilities) were $(12.0) million and $(2.1) million, respectively, and are included in other assets (other liabilities) in the Company’s consolidated balance sheets. Deferred income tax expense (benefit) included within the provision for income taxes was $(2.1) million and $9.9 million for the three and six months ended June 30, 2020, respectively. Deferred income tax expense (benefit) included within the provision for income taxes was $3.5 million and $6.7 million for the three and six months ended June 30, 2019, respectively. The Company’s net deferred tax liability is comprised of deferred tax assets and deferred tax liabilities. The Company believes it is more likely than not that the deferred tax assets (aside from the exception noted below) will be realized in the future. Realization of the deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of June 30, 2020, the Company has a deferred tax asset of $9.9 million relating to capital losses which it may only use to offset capital gains. These tax attributes will begin to expire if unused in 2021. As the realization of these assets are not more likely than not before their expiration, the Company provided a full valuation allowance against this deferred tax asset. Additionally, as of June 30, 2020, the Company had a deferred tax asset of $1.1 million related to Code Section 163(j) interest expense limitation. As the Company is uncertain if this asset will be realized in the future, the Company provided a full valuation allowance against this deferred tax asset.

The Company has historically calculated its tax provision during quarterly reporting periods by applying an annual effective tax rate (“AETR”) for the full year to the income for the reporting period; however, for the three and six months ended June 30, 2020, the Company used a discrete effective tax rate method to calculate taxes for the three and six months ended June 30, 2020. Based on the current projections of income, the Company is unable to determine a reliable AETR. As such, a discrete-period approach was used for the three and six months ended June 30, 2020.

The Company’s tax returns are subject to audit by taxing authorities. Generally, as of June 30, 2020, the tax years 2016-2019 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. The IRS recently completed its audit of the 2014 tax year and did not recommend any changes to the Company’s tax return. The Company is currently under New York City audit for tax years 2012-2014. Several of the Company’s subsidiary entities are under New York State audit for tax years 2015-2018. The Company does not expect these audits to result in any material changes to the Company’s financial position. The Company does not expect tax expense to have an impact on either short, or long-term liquidity or capital needs.

The Company acquired certain corporate entities at the time of its IPO. The related acquisition agreements provided an indemnification to the Company by each transferor of any amounts due for any potential tax liabilities owed by these entities for tax years prior to their acquisition. In connection with a New York State audit settlement, the Company collected $2.5 million of indemnities under the acquisition agreements during 2019.

Under U.S. GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

Tax Receivable Agreement

Upon consummation of the IPO, the Company entered into a Tax Receivable Agreement with the Continuing LCFH Limited Partners. Under the Tax Receivable Agreement the Company generally is required to pay to those Continuing LCFH Limited Partners that exchange their interests in LCFH and Class B shares of the Company for Class A shares of the Company, 85% of the applicable cash savings, if any, in U.S. federal, state and local income tax that the Company realizes (or is deemed to realize in certain circumstances) as a result of (i) the increase in tax basis in its proportionate share of LCFH’s assets that is attributable to the Company as a result of the exchanges and (ii) payments under the Tax Receivable Agreement, including any tax benefits related to imputed interest deemed to be paid by the Company as a result of such agreement. The Company may make future payments under the Tax Receivable Agreement if the tax benefits are realized.  The Company would then benefit from the remaining 15% of cash savings in income tax that we realize. For purposes of the Tax Receivable Agreement, cash savings in income tax will be computed by comparing our actual income tax liability to the amount of such taxes that we 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 exchanges and had we not entered into the Tax Receivable Agreement. As of June 30, 2020 and December 31, 2019, pursuant to the Tax Receivable Agreement, the Company recorded a liability of $1.6 million, included in other liabilities in the consolidated balance sheets for Continuing LCFH Limited Partners.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

17. RELATED PARTY TRANSACTIONS

Ladder Select Bond Fund

On October 18, 2016, Ladder Capital Asset Management LLC (“LCAM”), a subsidiary of the Company and a registered investment adviser, launched the Ladder Select Bond Fund (the “Fund”), a mutual fund. In addition, on October 18, 2016, the Company made a $10.0 million investment in the Fund, which was included in other assets in the consolidated balance sheets. On June 22, 2020, the Fund was liquidated and LCAM deregistered with the Securities and Exchange Commission (“SEC”). The Company recognized a realized loss of $0.7 million upon liquidation of the Fund which is included in fee and other income on the consolidated statements of income.

Commercial Real Estate Loans

From time to time, the Company may provide commercial real estate loans to entities affiliated with certain of our directors, officers or large shareholders who are, as part of their ordinary course of business, commercial real estate investors. These loans are made in the ordinary course of the Company’s business on the same terms and conditions as would be offered to any other borrower of similar type and standing on a similar property.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

18. COMMITMENTS AND CONTINGENCIES

Leases

The Company adopted ASC Topic 842 on January 1, 2019. The primary impact of applying ASC Topic 842 was the initial recognition of a $3.5 million lease liability and a $3.3 million right of use asset (including previously accrued straight line rent) on the Company’s consolidated financial statements, for leases classified as operating leases under ASC Topic 840, primarily for the Company’s corporate headquarters and other identified leases. As of June 30, 2020, the Company had a $1.9 million lease liability and a $1.9 million right-of-use asset on its consolidated balance sheets. Tenant reimbursements, which consist of real estate taxes and other municipal charges paid by us which were reimbursable by our tenants pursuant to the terms of triple-net lease agreements, were $1.1 million and $2.3 million for the three and six months ended June 30, 2020, respectively, and are included in operating lease income on the Company’s consolidated statements of income. Tenant reimbursements were $1.7 million and $3.3 million for the three and six months ended June 30, 2019, respectively, and are included in operating lease income on the Company’s consolidated statements of income.

Investments in Unconsolidated Joint Ventures

We have made investments in various unconsolidated joint ventures. See Note 6, Investment in and Advances to Unconsolidated Joint Ventures for further details of our unconsolidated investments. Our maximum exposure to loss from these investments is limited to the carrying value of our investments.

Unfunded Loan Commitments

As of June 30, 2020, the Company’s off-balance sheet arrangements consisted of $249.2 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing over the next three years at rates to be determined at the time of funding, 62% of which additional funds relate to the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income. As of December 31, 2019, the Company’s off-balance sheet arrangements consisted of $286.5 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing. Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. The COVID-19 pandemic has impacted the progress of work generally and, depending on specific property locations, the progress of capital expenditures, construction, and leasing, which have been delayed and/or slower paced than originally anticipated. The progress of those particular projects located in States or local municipalities with continuing restrictions on such activities is anticipated to remain slower to complete than otherwise expected, and the pace of future funding relating to these capital needs has been, and may continue to be, commensurately slower. These commitments are not reflected on the consolidated balance sheets.

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

SEGMENT REPORTING

19. SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the 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 is composed of all of the Company’s activities related to commercial real estate securities, which include investments in CMBS, U.S. Agency Securities, corporate bonds and equity securities. The real estate segment includes net leased properties, office buildings, a student housing portfolio, industrial buildings, a shopping center and condominium units. Corporate/other includes the Company’s investments in joint ventures, other asset management activities and operating expenses.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Three months ended June 30, 2020
Interest income	$	53,641	$	8,177	$	2	$	276	$	62,096
Interest expense	(11,732)		(7,795)		(9,758)		(39,140)		(68,425)
Net interest income (expense)	41,909		382		(9,756)		(38,864)		(6,329)
(Provision) benefit for loan losses	726		3		—		—		729
Net interest income (expense) after provision for loan losses	42,635		385		(9,756)		(38,864)		(5,600)
Operating lease income	—		—		23,773		—		23,773
Sale of loans, net	(744)		—		—		—		(744)
Realized gain (loss) on securities	—		(14,798)		—		—		(14,798)
Unrealized gain (loss) on equity securities	—		401		—		—		401
Unrealized gain (loss) on Agency interest-only securities	—		98		—		—		98
Realized gain on sale of real estate, net	—		—		(1)		—		(1)
Fee and other income	2,429		2		—		1,074		3,505
Net result from derivative transactions	(588)		(225)		—		—		(813)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		471		—		471
Gain (loss) on extinguishment of debt	—		—		—		19,017		19,017
Total other income (loss)	1,097		(14,522)		24,243		20,091		30,909
Salaries and employee benefits	—		—		—		(7,001)		(7,001)
Operating expenses(3)	—		—		—		(6,224)		(6,224)
Real estate operating expenses	—		—		(6,034)		—		(6,034)
Fee expense	(1,474)		(61)		(442)		—		(1,977)
Depreciation and amortization	—		—		(9,791)		(25)		(9,816)
Total costs and expenses	(1,474)		(61)		(16,267)		(13,250)		(31,052)
Income tax (expense) benefit	—		—		—		550		550
Segment profit (loss)	$	42,258	$	(14,198)	$	(1,780)	$	(31,473)	$	(5,193)
Total assets as of June 30, 2020	$	2,991,959	$	1,506,713	$	1,091,129	$	1,019,749	$	6,609,550

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Three months ended June 30, 2019
Interest income	$	69,794	$	15,210	$	7	$	311	$	85,322
Interest expense	(14,224)		(4,130)		(9,091)		(24,924)		(52,369)
Net interest income (expense)	55,570		11,080		(9,084)		(24,613)		32,953
(Provision) benefit for loan losses	(300)		—		—		—		(300)
Net interest income (expense) after provision for loan losses	55,270		11,080		(9,084)		(24,613)		32,653
Operating lease income	—		—		27,780		—		27,780
Sale of loans, net	20,264		—		—		—		20,264
Realized gain (loss) on securities	—		4,464		—		—		4,464
Unrealized gain (loss) on equity securities	—		(990)		—		—		(990)
Unrealized gain (loss) on Agency interest-only securities	—		11		—		—		11
Realized gain on sale of real estate, net	—		—		(1,124)		—		(1,124)
Fee and other income	5,947		333		—		916		7,196
Net result from derivative transactions	(8,518)		(6,939)		—		—		(15,457)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		1,564		—		1,564
Total other income (loss)	17,693		(3,121)		28,220		916		43,708
Salaries and employee benefits	—		—		—		(14,907)		(14,907)
Operating expenses(3)	—		—		—		(6,012)		(6,012)
Real estate operating expenses	—		—		(6,032)		—		(6,032)
Fee expense	(1,058)		(87)		(38)		—		(1,183)
Depreciation and amortization	—		—		(9,910)		(25)		(9,935)
Total costs and expenses	(1,058)		(87)		(15,980)		(20,944)		(38,069)
Income tax (expense) benefit	—		—		—		(2,219)		(2,219)
Segment profit (loss)	$	71,905	$	7,872	$	3,156	$	(46,860)	$	36,073
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Six months ended June 30, 2020
Interest income	$	112,546	$	21,040	$	10	$	1,090	$	134,686
Interest expense	(16,602)		(14,554)		(19,993)		(68,678)		(119,827)
Net interest income (expense)	95,944		6,486		(19,983)		(67,588)		14,859
(Provision) benefit for loan losses	(25,855)		3		—		—		(25,852)
Net interest income (expense) after provision for loan losses	70,089		6,489		(19,983)		(67,588)		(10,993)
Operating lease income	—		—		50,101		—		50,101
Sale of loans, net	261		—		—		—		261
Realized gain (loss) on securities	—		(11,787)		—		—		(11,787)
Unrealized gain (loss) on equity securities	—		(132)		—		—		(132)
Unrealized gain (loss) on Agency interest-only securities	—		174		—		—		174
Realized gain on sale of real estate, net	—		—		10,528		—		10,528
Fee and other income	3,854		403		25		742		5,024
Net result from derivative transactions	(11,939)		(4,309)		—		—		(16,248)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		912		—		912
Gain (loss) on extinguishment of debt	—		—		—		21,077		21,077
Total other income (loss)	(7,824)		(15,651)		61,566		21,819		59,910
Salaries and employee benefits	—		—		—		(24,023)		(24,023)
Operating expenses(3)	—		—		—		(12,018)		(12,018)
Real estate operating expenses	—		—		(13,981)				(13,981)
Fee expense	(2,664)		(133)		(618)		—		(3,415)
Depreciation and amortization	—		—		(19,775)		(50)		(19,825)
Total costs and expenses	(2,664)		(133)		(34,374)		(36,091)		(73,262)
Income tax (expense) benefit	—		—		—		5,091		5,091
Segment profit (loss)	$	59,601	$	(9,295)	$	7,209	$	(76,769)	$	(19,254)
Total assets as of June 30, 2020	$	2,991,959	$	1,506,713	$	1,091,129	$	1,019,749	$	6,609,550

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Six months ended June 30, 2019
Interest income	$	142,947	$	28,329	$	15	$	498	$	171,789
Interest expense	(28,981)		(6,618)		(17,973)		(50,046)		(103,618)
Net interest income (expense)	113,966		21,711		(17,958)		(49,548)		68,171
(Provision) benefit for loan losses	(600)		—		—		—		(600)
Net interest income (expense) after provision for loan losses	113,366		21,711		(17,958)		(49,548)		67,571
Operating lease income	—		—		56,701		—		56,701
Sale of loans, net	27,342		—		—		—		27,342
Realized gain (loss) on securities	—		7,329		—		—		7,329
Unrealized gain (loss) on equity securities	—		1,088		—		—		1,088
Unrealized gain (loss) on Agency interest-only securities	—		22		—		—		22
Realized gain on sale of real estate, net	—		—		(1,119)		—		(1,119)
Impairment of real estate	—		—		(1,350)		—		(1,350)
Fee and other income	9,257		737		7		1,881		11,882
Net result from derivative transactions	(13,716)		(12,775)		—		—		(26,491)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		2,522		—		2,522
Gain (loss) on extinguishment of debt	—		—		(1,070)		—		(1,070)
Total other income (loss)	22,883		(3,599)		55,691		1,881		76,856
Salaries and employee benefits	—		—		—		(38,481)		(38,481)
Operating expenses(3)	—		—		—		(11,413)		(11,413)
Real estate operating expenses	—		—		(11,506)		—		(11,506)
Fee expense	(2,252)		(187)		(456)		—		(2,895)
Depreciation and amortization	—		—		(20,112)		(50)		(20,162)
Total costs and expenses	(2,252)		(187)		(32,074)		(49,944)		(84,457)
Income tax (expense) benefit	—		—		—		634		634
Segment profit (loss)	$	133,997	$	17,925	$	5,659	$	(96,977)	$	60,604
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

(1)Includes the Company’s investment in unconsolidated joint ventures that held real estate of $48.9 million and $48.4 million as of June 30, 2020 and December 31, 2019, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in unconsolidated joint ventures and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $61.6 million and $61.6 million as of June 30, 2020 and December 31, 2019, respectively, the Company’s deferred tax asset (liability) of $(12.0) million and $(2.1) million as of June 30, 2020 and December 31, 2019, respectively, and the Company’s senior unsecured notes of $1.7 billion and $1.2 billion as of June 30, 2020 and December 31, 2019, respectively.

(3)Includes $4.0 million and $7.1 million of professional fees for the three and six months ended June 30, 2020, respectively. Includes $3.6 million and $6.1 million of professional fees for the three and six months ended June 30, 2019, respectively.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

20. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the issuance date of the financial statements and determined that no additional disclosure is necessary.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Accounting and Principles of Consolidation

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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 the audited consolidated financial statements for the year ended December 31, 2019, which are included in the 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 consolidated financial statements include the Company’s accounts and those of its subsidiaries which are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

Provision for Loan Losses

Provision for Loan Losses

The provision for loan losses reflects the Company’s estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The provision for loan losses includes a portfolio-based, current expected credit loss (“CECL”) component and an asset-specific component. In compliance with the new CECL reporting requirements, the Company has supplemented the existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. As part of that effort, the Company has engaged a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with user’s loan-level data, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level.

The asset-specific reserve component relates to reserves for losses on individually impaired loans. The Company evaluates each loan 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 loan’s effective rate or the fair value of the collateral, less the estimated costs to sell, if recovery of the Company’s investment is expected solely from the collateral. The Company generally will use the direct capitalization rate valuation methodology or the sales comparison approach to estimate the fair value of the collateral for such loans and in certain cases will obtain external appraisals. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. 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/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash 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 submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates, (ii) site inspections, and (iii) current credit spreads and other market data and ultimately presented to management for approval.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans. Generally, when granting concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset concessions granted should conditions impacting the loan improve. The Company’s determination of credit losses is impacted by TDRs whereby loans that have gone through TDRs are considered impaired, assessed for specific reserves, and are not included in the Company’s assessment of the CECL reserve. Loans previously restructured under TDRs that subsequently default are reassessed to incorporate the Company’s current assumptions on expected cash flows and additional provision expense is recorded to the extent necessary.

The Company designates non-accrual loans at such time as (i) loan payments become 90-days past due or (ii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-accrual and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. Any interest received for loans on non-accrual status will be applied as a reduction to the unpaid principal balance. A loan will be written off when it is no longer realizable and legally discharged.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”) and in April 2019, the FASB issued ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), collectively, the “CECL Standard.” These updates change how entities measure potential credit losses for most financial assets and certain other instruments that are not measured at fair value. The CECL Standard replaced the “incurred loss” approach under previous guidance with an “expected loss” model for instruments measured at amortized cost. The net carrying value of an asset under the CECL Standard is intended to represent the amount expected to be collected on such asset and requires entities to deduct allowances for potential losses on held-to-maturity debt securities. The Company will continue to record asset-specific reserves consistent with our existing accounting policy. In addition, the Company will now record a general reserve in accordance with the CECL Standard on the remainder of the loan portfolio (“CECL Reserve”). At adoption, on January 1, 2020, the Company recorded a CECL Reserve of $11.6 million, which equated to 0.36% of $3.2 billion carrying value of its held for investment loan portfolio. This reserve excluded three loans that previously had an aggregate of $14.7 million of asset-specific reserves and a carrying value of $39.8 million as of January 1, 2020. Upon adoption, the aggregated CECL Reserve reduced total shareholder’s equity by $5.8 million (or approximately $0.05 of book value per share of common stock).

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of ASU 2018-13 had no material impact on the Company’s consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, (“ASU 2018-17”). ASU 2018-17 requires reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety for determining whether a decision-making fee is a variable interest. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. Entities are required to apply the amendments in ASU 2018-17 retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The adoption of ASU 2018-17 had no material impact on the Company’s consolidated financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company’s next annual reporting period; early adoption is permitted. The Company previously adopted ASU 2016-01. The adoption of ASU 2019-04 had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The adoption of ASU 2020-03 had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective upon issuance of ASU 2020-04 for contract modifications and hedging relationships on a prospective basis. While the Company is currently assessing the impact of ASU 2020-04, the Company does not expect the adoption to have a material impact on its consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 815), (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves the consistent application of, and simplifies, GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its consolidated financial statements.

Any new accounting standards not disclosed above that have been issued or proposed by FASB and that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

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MORTGAGE LOAN RECEIVABLES (Tables)

6 Months Ended

Jun. 30, 2020

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

Schedule of mortgage loan receivables

	Outstanding Face Amount		Carrying Value		Weighted Average Yield (1)		Remaining Maturity (years)
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries:
First mortgage loans	$	2,848,829	$	2,832,610	6.65	%	1.15
Mezzanine loans	122,793		122,474		10.84	%	2.91
Total mortgage loans held by consolidated subsidiaries	2,971,622		2,955,084		6.82	%	1.22
Allowance for loan losses	N/A		(49,102)
Total mortgage loan receivables held for investment, net, at amortized cost	2,971,622		2,905,982
Mortgage loan receivables held for sale:
First mortgage loans	86,456		85,977		3.94	%	9.70
Total	$	3,058,078	$	2,991,959	6.85	%	1.48

(1)June 30, 2020 LIBOR rates are used to calculate weighted average yield for floating rate loans.

	Outstanding Face Amount		Carrying Value		Weighted Average Yield (1)		Remaining Maturity (years)
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries:
First mortgage loans	$	3,147,275	$	3,127,173	6.77	%	1.35
Mezzanine loans	130,322		129,863		10.97	%	3.26
Total mortgage loans held by consolidated subsidiaries	3,277,597		3,257,036		6.94	%	1.43
Allowance for loan losses	N/A		(20,500)
Total mortgage loan receivables held for investment, net, at amortized cost	3,277,597		3,236,536
Mortgage loan receivables held for sale:
First mortgage loans	122,748		122,325		4.20	%	9.99
Total	$	3,400,345	$	3,358,861	6.88	%	1.75

(1)December 31, 2019 LIBOR rates are used to calculate weighted average yield for floating rate loans.

Summary of mortgage loan receivables by loan type

For the six months ended June 30, 2020 and 2019, the activity in our loan portfolio was as follows ($ in thousands):

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries		Provision expense for current expected credit loss		Mortgage loan  receivables held for sale
Balance, December 31, 2019	$	3,257,036	$	(20,500)	$	122,325
Origination of mortgage loan receivables	334,347		—		212,845
Repayment of mortgage loan receivables	(446,080)		—		(292)
Proceeds (losses) from sales of mortgage loan receivables	(165,364)		—		(255,827)
Non-cash disposition of loans via foreclosure(1)	(27,107)		—		—
Sale of loans, net	(6,665)		—		6,926
Accretion/amortization of discount, premium and other fees	8,917		—		—
Release of asset-specific loan loss provision via foreclosure(1)	—		2,000
Provision expense for current expected credit loss (implementation impact)(2)	—		(4,964)
Provision expense for current expected credit loss, net (impact to earnings)(2)	—		(17,638)
Additional asset-specific reserve	—		(8,000)		—
Balance, June 30, 2020	$	2,955,084	$	(49,102)	$	85,977

(1)Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

(2)During the six months ended June 30, 2020, the initial impact of the implementation of the CECL accounting standard as of January 1, 2020 is recorded against retained earnings. Subsequent remeasurement thereafter, including the period to date change for the six months ended June 30, 2020, is accounted for as provision expense for current expected credit loss in the consolidated statements of income.

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans held by consolidated subsidiaries		Mortgage loans transferred but not considered sold		Provision for loan losses		Mortgage loan receivables held for sale
Balance, December 31, 2018	$	3,318,390	$	—	$	(17,900)	$	182,439
Origination of mortgage loan receivables	484,496		—		—		333,342
Repayment of mortgage loan receivables	(693,323)		—		—		(497)
Proceeds from sales of mortgage loan receivables	—		(15,504)		—		(415,145)
Sale of loans, net	—		—		—		27,342
Transfer between held for investment and held for sale(1)	—		15,504		—		(15,504)
Accretion/amortization of discount, premium and other fees	10,294		—		—		—
Provision for/(release of) loan loss reserves	—		—		(600)		—
Balance, June 30, 2019	$	3,119,857	$	—	$	(18,500)	$	111,977

(1)We sell certain loans into securitizations; however, for a transfer of financial assets to be considered a sale, the transfer must meet the sale criteria of ASC 860 under which the Company must surrender control over the transferred assets which must qualify as recognized financial assets at the time of transfer. The assets must be isolated from the Company, even in bankruptcy or other receivership, the purchaser must have the right to pledge or sell the assets transferred and the Company may not have an option or obligation to reacquire the assets. If the sale criteria are not met, the transfer is considered to be a secured borrowing, the assets remain on the Company’s consolidated balance sheets and the sale proceeds are recognized as a liability. During the three months ended March 31, 2019, the Company reclassified from mortgage loan receivables held for sale to mortgage loans transferred but not considered sold, at amortized cost, one loan with an outstanding face amount of $15.4 million, a book value of $15.5 million (fair value at the date of reclassification) and a remaining maturity of 9.8 years, which was sold to the WFCM 2019-C49 securitization trust. Subsequent to March 31, 2019, the controlling loan interest was sold to the UBS 2019-C16 securitization trust, and as a result, the loan previously sold during the three months ended March 31, 2019 was accounted for as a sale during the six months ended June 30, 2019.

Schedule of provision for loan losses

Allowance for Loan Losses and Non-Accrual Status ($ in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020		2019
Allowance for loan losses at beginning of period	$	49,457		$	18,200		$	20,500	$	17,900
Provision expense for current expected credit loss (implementation impact)	—			—			4,964		—
Provision expense for current expected credit loss, net (impact to earnings)	(355)			300			17,638		600
Additional asset-specific reserve	—			—			8,000		—
Foreclosure of loans subject to asset-specific reserve	—			—			(2,000)		—
Allowance for loan losses at end of period	$	49,102		$	18,500		$	49,102	$	18,500
	June 30, 2020			December 31, 2019
Principal balance of loans on non-accrual status	$	185,896	(1)	$	98,725	(2)

(1)Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a combined carrying value of $26.9 million, two loans with a combined carrying value of $45.9 million, one loan with a carrying value of $61.5 million, one loan with a carrying value of $4.1 million, one loan with a carrying value of $8.0 million and one loan with a carrying value of $39.5 million, as further discussed below.

(2)Represents two of the Company’s loans, which were originated simultaneously as part of a single transaction and had a combined carrying value of $26.9 million, one loan with a carrying value of $10.4 million and one loan with a carrying value of $61.5 million, as further discussed below.

Schedule of individually impaired loans

The Company has concluded that none of its loans, other than the four loans discussed below, are individually impaired as of June 30, 2020.

Loan Portfolio by Geographic Region, Property Type and Vintage ($ in thousands)

	Amortized Cost
Geographic Region
Northeast	$	785,000
Southwest	588,046
Midwest	585,505
South	512,314
West	407,286
Subtotal loans	2,878,151
Individually impaired loans(1)	76,933
Total loans	$	2,955,084

Management’s method for monitoring credit is the performance of a loan. A loan is impaired or not impaired based on the expectation that all amounts contractually due under a loan will be collected when due. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing Ladder’s loan portfolio by collateral type. The following table summarizes the assessed amortized cost of the loan portfolio by property type ($ in thousands).

	Vintage
Property Type	2020		2019		2018		2017		2016 and Earlier		Total
Multifamily	$	65,228	$	323,178	$	147,460	$	31,872	$	11,772	$	579,510
Office	51,658		216,946		388,721		160,288		52,086		869,699
Hospitality	—		83,018		143,681		67,446		123,630		417,775
Mixed Use	52,515		101,436		5,092		47,849		—		206,892
Retail	—		141,842		25,029		—		65,823		232,694
Other	57,528		130,025		82,353		—		—		269,906
Industrial	51,964		114,987		—		—		6,476		173,427
Manufactured Housing	4,545		56,918		11,702		—		3,970		77,135
Self-Storage	—		35,936		15,177		—		—		51,113
Subtotal loans	283,438		1,204,286		819,215		307,455		263,757		2,878,151
Individually Impaired loans (1)	—		—		4,143				72,790		76,933
Total loans	$	283,438	$	1,204,286	$	823,358	$	307,455	$	336,547	$	2,955,084

(1)Included in individually impaired loans are two loans, which were originated in 2016 simultaneously as part of a single transaction with a combined amortized cost of $26.9 million, collateralized by a mixed use property located in the Northeast region, one loan, which was originated in 2016 and subsequently restructured into two loans in 2018, with a combined amortized cost of $45.9 million, collateralized by a mixed use property located in the Northeast region, and one loan, originated in 2018, with a amortized cost of $4.1 million, collateralized by a hotel located in the Midwest region. The above individually impaired loans’ amortized cost basis excludes asset-specific provisions totaling $20.7 million.

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REAL ESTATE SECURITIES (Tables)

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Summary of securities which are classified as available-for-sale

The following is a summary of the Company’s securities at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

					Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis/Purchase Price		Gains		Losses		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS(2)	$	1,496,090	$	1,495,892	$	212	$	(48,766)	$	1,447,338	(3)	49	AAA	1.51	%	1.57	%	2.27
CMBS interest-only(2)(4)	1,535,739		25,026		488		(4)		25,510		(5)	15	AAA	0.45	%	2.83	%	2.34
GNMA interest-only(4)(6)	93,464		1,335		204		(161)		1,378			14	AA+	0.45	%	4.21	%	3.18
Agency securities(2)	610		619		17		—		636			2	AA+	2.61	%	1.68	%	1.56
GNMA permanent securities(2)	30,853		31,006		864		—		31,870			6	AA+	3.89	%	3.50	%	2.41
Total debt securities	$	3,156,756	$	1,553,878	$	1,785	$	(48,931)	$	1,506,732		86		0.98	%	1.63	%	2.27
Provision for current expected credit losses	N/A		—		—		(19)		(19)
Total real estate securities	$	3,156,756	$	1,553,878	$	1,785	$	(48,950)	$	1,506,713		86

(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 rating agencies, the highest 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.

(2)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(3)Includes $11.1 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (the “Dodd-Frank Act”) and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(4)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(5)Includes $0.7 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(6)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s Agency interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company has elected to account for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on Agency interest-only securities in the consolidated statements of income in accordance with ASC 815.

(7)The Company has elected to account for equity securities at fair value with changes in fair value recorded in current period earnings.

December 31, 2019

					Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount		Amortized Cost Basis		Gains		Losses		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS(2)	$	1,640,597	$	1,640,905	$	4,337	$	(920)	$	1,644,322	(3)	125	AAA	3.06	%	3.08	%	2.41
CMBS interest-only(2)(4)	1,559,160		28,553		630		(37)		29,146		(5)	15	AAA	0.60	%	3.04	%	2.53
GNMA interest-only(4)(6)	109,783		1,982		123		(254)		1,851			11	AA+	0.49	%	4.59	%	2.77
Agency securities(2)	629		640		1		(4)		637			2	AA+	2.65	%	1.73	%	1.83
GNMA permanent securities(2)	31,461		31,681		688		—		32,369			6	AA+	3.91	%	3.17	%	1.93
Total debt securities	$	3,341,630	$	1,703,761	$	5,779	$	(1,215)	$	1,708,325		159		1.84	%	3.06	%	2.39
Equity securities(7)	N/A		12,848		292		(160)		12,980			2	N/A	N/A		N/A		N/A
Total real estate securities	$	3,341,630	$	1,716,609	$	6,071	$	(1,375)	$	1,721,305		161

(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 rating agencies, the highest 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.

(2)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(3)Includes $11.6 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(4)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(5)Includes $0.8 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(6)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s Agency interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company accounts for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on Agency interest-only securities in the consolidated statements of income in accordance with ASC 815.

(7)The Company has elected to account for equity securities at fair value with changes in fair value recorded in current period earnings.

Schedule of fair value of the Company's securities by remaining maturity based upon expected cash flows

The following is a breakdown of the carrying value of the Company’s debt securities by remaining maturity based upon expected cash flows at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	185,672	$	1,212,532	$	49,134	$	—	$	1,447,338
CMBS interest-only	920		24,590		—		—		25,510
GNMA interest-only	70		1,028		276		4		1,378
Agency securities	—		636		—		—		636
GNMA permanent securities	231		31,639		—		—		31,870
Total debt securities	$	186,893	$	1,270,425	$	49,410	$	4	$	1,506,732

December 31, 2019

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	177,193	$	1,389,392	$	77,737	$	—	$	1,644,322
CMBS interest-only	1,439		27,707		—		—		29,146
GNMA interest-only	91		1,504		256		—		1,851
Agency securities	—		637		—		—		637
GNMA permanent securities	416		31,953		—		—		32,369
Total debt securities	$	179,139	$	1,451,193	$	77,993	$	—	$	1,708,325

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET (Tables)

6 Months Ended

Jun. 30, 2020

Real Estate [Abstract]

Schedule of real estate properties by category

The following tables present additional detail related to our real estate portfolio, net, including foreclosed properties ($ in thousands):

	June 30, 2020		December 31, 2019
Land	$	228,111	$	209,955
Building	871,585		883,005
In-place leases and other intangibles	159,049		161,203
Less: Accumulated depreciation and amortization	(216,535)		(206,082)
Real estate and related lease intangibles, net	$	1,042,210	$	1,048,081
Below market lease intangibles, net (other liabilities)	$	(38,125)	$	(39,067)

Schedule of depreciation and amortization expense recorded

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Depreciation expense(1)	$	8,110	$	7,697	$	16,383	$	15,382
Amortization expense	1,681		2,213		3,392		4,730
Total real estate depreciation and amortization expense	$	9,791	$	9,910	$	19,775	$	20,112

(1)Depreciation expense on the consolidated statements of income also includes $25 thousand and $50 thousand of depreciation on corporate fixed assets for the three and six months ended June 30, 2020, respectively. Depreciation expense on the consolidated statements of income also includes $25 thousand and $50 thousand for the three and six months ended June 30, 2019, respectively.

Schedule of lease intangible assets

The Company’s intangible assets are comprised of in-place leases, above market leases and other intangibles. The following tables present additional detail related to our intangible assets ($ in thousands):

	June 30, 2020		December 31, 2019
Gross intangible assets(1)	$	159,049	$	161,203
Accumulated amortization	63,089		62,773
Net intangible assets	$	95,960	$	98,430

(1)Includes $4.4 million and $4.5 million of unamortized above market lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively.

The following table presents increases/reductions in operating lease income recorded by the Company ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Reduction in operating lease income for amortization of above market lease intangibles acquired	$	(92)	$	(208)	$	(183)	$	(633)
Increase in operating lease income for amortization of below market lease intangibles acquired	619		461		1,371		1,030

Schedule of expected amortization expense related to the acquired in-place lease intangibles, for property owned

The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of June 30, 2020 ($ in thousands):

Period Ending December 31,	Adjustment to Operating Lease Income		Amortization Expense
2020 (last 6 months)	$	625	$	2,956
2021	1,070		5,504
2022	1,070		5,504
2023	1,070		5,504
2024	1,070		5,504
Thereafter	28,867		66,590
Total	$	33,772	$	91,562

Schedule of contractual future minimum rent under leases

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at June 30, 2020 ($ in thousands):

Period Ending December 31,	Amount
2020 (last 6 months)	$	43,163
2021	73,091
2022	66,145
2023	65,377
2024	64,412
Thereafter	507,659
Total	$	819,847

Schedule of real estate properties acquired

During the six months ended June 30, 2020, the Company acquired the following properties ($ in thousands):

Acquisition Date	Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
Purchases of real estate
Aggregate purchases of net leased real estate			$	6,239	100.0%
Real estate acquired via foreclosure
March 2020	Diversified	Los Angeles, CA	21,535		100.0%
June 2020	Diversified	Winston Salem, NC	3,900		100.0%
Total real estate acquired via foreclosure			25,435
Total real estate acquisitions			$	31,674

(1)Properties were consolidated as of acquisition date.

The Company allocates purchase consideration based on relative fair values, and real estate acquisition costs are capitalized as a component of the cost of the assets acquired for asset acquisitions. During the six months ended June 30, 2020, all acquisitions were determined to be asset acquisitions.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2020, as follows ($ in thousands):

	Purchase Price Allocation
Land	$	23,524
Building	7,244
Intangibles	1,201
Below Market Lease Intangibles	(295)
Total purchase price	$	31,674

The weighted average amortization period for intangible assets acquired during the six months ended June 30, 2020 was 39.8 years. The Company recorded $0.1 million and $0.2 million in revenues from its 2020 acquisitions for the three and six months ended June 30, 2020, respectively, which is included in its consolidated statements of income. The Company recorded $0.1 million and $47.6 thousand in earnings (losses) from its 2020 acquisitions for the three and six months ended June 30, 2020, respectively, which is included in its consolidated statements of income.

During the six months ended June 30, 2019, the Company acquired the following properties ($ in thousands):

Acquisition Date	Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
Purchases of real estate
Aggregate purchases of net leased real estate			$	5,071	100.0%
Real estate acquired via foreclosure
February 2019	Diversified	Omaha, NE	18,200		100.0%
Total real estate acquired via foreclosure			18,200
Total real estate acquisitions			$	23,271

(1)Properties were consolidated as of acquisition date.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2019, as follows ($ in thousands):

	Purchase Price Allocation
Land	$	3,789
Building	18,885
Intangibles	854
Below Market Lease Intangibles	(257)
Total purchase price	$	23,271

Schedule of properties sold

The Company sold the following properties during the six months ended June 30, 2020 ($ in thousands):

Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining
Various	Condominium	Miami, FL	$	931	$	924	$	7	—	3	3
March 2020	Diversified	Richmond, VA	22,526		14,829		7,697		7	—	—
March 2020	Diversified	Richmond, VA	6,933		4,109		2,824		1	—	—
Totals			$	30,390	$	19,862	$	10,528

Realized gain on the sale of real estate, net on the consolidated statements of income also includes $0.1 million of realized loss on the disposal of fixed assets for the six months ended June 30, 2020

The Company sold the following properties during the six months ended June 30, 2019 ($ in thousands):

Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining
N/A	Condominium	Las Vegas, NV	$	—	$	—	$	—	—	—	1
Various	Condominium	Miami, FL	3,917		3,550		367		—	13	9
April 2019	Diversified	Wayne, NJ	1,729		4,799		(3,070)		1	—	—
May 2019	Diversified	Grand Rapids, MI	10,019		8,254		1,765		1	—	—
Totals			$	15,665	$	16,603	$	(938)

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INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES (Tables)

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Summary of the Company's investments in unconsolidated joint ventures, which the entity accounts for using the equity method

The following is a summary of the Company’s investments in and advances to unconsolidated joint ventures, which we account for using the equity method, as of June 30, 2020 and December 31, 2019 ($ in thousands):

Entity	June 30, 2020		December 31, 2019
Grace Lake JV, LLC	$	3,496	$	3,047
24 Second Avenue Holdings LLC	45,423		45,386
Investment in unconsolidated joint ventures	$	48,919	$	48,433

Summary of the Company's allocated earnings based on its ownership interests from investment in unconsolidated joint ventures

The following is a summary of the Company’s allocated earnings (losses) based on its ownership interests from investment in unconsolidated joint ventures for the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Entity	2020		2019		2020		2019
Grace Lake JV, LLC	$	263	$	618	$	449	$	1,032
24 Second Avenue Holdings LLC	208		946		463		1,490
Earnings (loss) from investment in unconsolidated joint ventures	$	471	$	1,564	$	912	$	2,522

Summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of June 30, 2020 and December 31, 2019 ($ in thousands):

	June 30, 2020		December 31, 2019
Total assets	$	113,414	$	118,727
Total liabilities	77,277		78,762
Partners’/members’ capital	$	36,137	$	39,965

The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total revenues	$	4,294	$	6,330	$	8,770	$	11,030
Total expenses	3,450		3,571		7,424		7,434
Net income (loss)	$	844	$	2,759	$	1,346	$	3,596

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DEBT OBLIGATIONS, NET (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of debt obligations

The details of the Company’s debt obligations at June 30, 2020 and December 31, 2019 are as follows ($ in thousands):

June 30, 2020

Debt Obligations	Committed Financing		Debt Obligations Outstanding			Committed but Unfunded		Interest Rate at June 30, 2020(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility(2)	$	500,000	$	114,679		$	385,321	1.93%	—	2.18%	12/19/2022	(3)	(4)	$	179,332	$	179,332
Committed Loan Repurchase Facility	250,000		—			250,000		—%	—	—%	2/26/2021	(5)	(6)	—		—
Committed Loan Repurchase Facility	300,000		144,565			155,435		1.94%	—	2.94%	12/19/2020	(7)	(8)	251,788		251,788
Committed Loan Repurchase Facility	300,000		65,702			234,298		1.94%	—	2.19%	11/6/2022	(9)	(4)	100,597		100,704
Committed Loan Repurchase Facility	100,000		38,228			61,772		2.31%	—	2.43%	12/31/2022	(10)	(4)	64,721		64,807
Committed Loan Repurchase Facility	100,000		17,901			82,099		2.68%	—	2.68%	3/24/2021	(11)	(12)	30,600		30,600
Total Committed Loan Repurchase Facilities	1,550,000		381,075			1,168,925								627,038		627,231
Committed Securities Repurchase Facility(2)	785,321		451,342			333,979		0.89%	—	2.44%	12/23/2021	N/A	(13)	576,924		576,924
Uncommitted Securities Repurchase Facility	N/A (13)		462,612			N/A (14)		1.42%	—	4.81%	7/2020 - 9/2020	N/A	(13)	596,230		596,230		(15)
Total Repurchase Facilities	1,950,000		1,295,029			1,502,904								1,800,192		1,800,385
Revolving Credit Facility	266,430		266,430			—		3%	—	3%	2/11/2021	(16)	N/A (17)	N/A (17)		N/A (17)
Mortgage Loan Financing	805,431		805,431			—		3.75%	—	6.75%	2020 - 2030(18)	N/A	(19)	959,766		1,172,268		(20)
Secured Financing Facility	206,350		188,687		(21)	—		10.75%	—	10.75%	5/6/2023	N/A	(22)	335,237		335,675
CLO Debt	304,413		299,605		(23)	—		5.50%	—	5.50%	5/16/2024	N/A	(24)	469,505		469,587
Borrowings from the FHLB	1,500,000		360,790			1,139,210		0.44%	—	2.95%	2020 - 2024	N/A	(24)	526,151		528,650		(25)
Senior Unsecured Notes	1,752,817		1,737,542		(26)	—		4.25%	—	5.88%	2021 - 2027	N/A	N/A (27)	N/A (27)		N/A (27)
Total Debt Obligations, Net	$	6,785,441	$	4,953,514		$	2,642,114							$	4,090,851	$	4,306,565

(1)June 2020 LIBOR rates are used to calculate interest rates for floating rate debt.

(2)The combined committed amounts for the loan repurchase facility and the securities repurchase facility total $900.0 million, with maximum capacity on the loan repurchase facility of $500.0 million, and maximum capacity on the securities repurchase facility of $900.0 million less outstanding commitments on the loan repurchase facility.

(3)Two additional 12-month periods at Company’s option. No new advances are permitted after the initial maturity date.

(4)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(5)Three additional 12-month periods at Company’s option.

(6)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(7)Three additional 364-day periods.

(8)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(9)One additional 12-month extension period and two additional 6-month extension periods at Company’s option.

(10)Two additional 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(11)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(12)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(13)Commercial real estate securities. It does not include the real estate collateralizing such securities.

(14)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(15)Includes $2.2 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(16)Four additional 12-month periods at Company’s option.

(17)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(18)Anticipated repayment dates.

(19)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(20)Using undepreciated carrying value of commercial real estate to approximate fair value.

(21)Presented net of unamortized debt issuance costs of $9.7 million and an unamortized discount of $8.0 million related to the Purchase Right (described in detail under Secured Financing Facility below) at June 30, 2020.

(22)First mortgage commercial real estate loans. Substitution of collateral and conversion of loan collateral to mortgage collateral are permitted with Lender’s approval.

(23)Presented net of unamortized debt issuance costs of $4.8 million at June 30, 2020.

(24)First mortgage commercial real estate loans and investment grade commercial real estate securities. It does not include the real estate collateralizing such loans and securities.

(25)Includes $9.4 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(26)Presented net of unamortized debt issuance costs of $15.3 million at June 30, 2020.

(27)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

December 31, 2019

Debt Obligations	Committed Financing		Debt Obligations Outstanding			Committed but Unfunded		Interest Rate at December 31, 2019(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility	$	600,000	$	183,828		$	416,172	3.24%	—	3.74%	12/19/2022	(2)	(3)	$	287,974	$	288,210
Committed Loan Repurchase Facility	350,000		70,697			279,303		3.71%	—	3.81%	5/24/2020	(4)	(5)	101,590		103,868
Committed Loan Repurchase Facility	300,000		248,182			51,818		3.49%	—	3.74%	12/19/2020	(6)	(7)	382,778		382,778
Committed Loan Repurchase Facility	300,000		98,678			201,322		3.50%	—	3.75%	11/6/2022	(8)	(3)	175,000		175,270
Committed Loan Repurchase Facility	100,000		9,952			90,048		3.96%	—	3.99%	1/3/2023	(9)	(3)	75,628		75,813
Committed Loan Repurchase Facility	100,000		90,927			9,073		3.74%	—	3.80%	12/24/2020	(10)	(11)	126,311		126,311
Total Committed Loan Repurchase Facilities	1,750,000		702,264			1,047,736								1,149,281		1,152,250
Committed Securities Repurchase Facility	400,000		42,751			357,249		2.50%	—	2.56%	12/23/2021	N/A	(12)	52,691		52,691
Uncommitted Securities Repurchase Facility	N/A (12)		1,070,919			N/A (13)		2.17%	—	3.54%	1/2020 - 3/2020	N/A	(12)	1,188,440		1,188,440		(14)
Total Repurchase Facilities	2,150,000		1,815,934			1,404,985								2,390,412		2,393,381
Revolving Credit Facility	266,430		—			266,430		NA			2/11/2020	(15)	N/A (16)	N/A (16)		N/A (16)
Mortgage Loan Financing	812,606		812,606			—		3.75%	—	6.75%	2020 - 2029(17)	N/A	(18)	988,857		1,192,106		(19)
Borrowings from the FHLB	1,945,795		1,073,500			872,295		1.47%	—	2.95%	2020 - 2024	N/A	(20)	1,107,188		1,113,811		(21)
Senior Unsecured Notes	1,166,201		1,157,833		(22)	—		5.25%	—	5.88%	2021 - 2025	N/A	N/A (23)	N/A (23)		N/A (23)
Total Debt Obligations	$	6,341,032	$	4,859,873		$	2,543,710							$	4,486,457	$	4,699,298

(1)December 31, 2019 LIBOR rates are used to calculate interest rates for floating rate debt.

(2)Two additional 12-month periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)One additional 12-month period at Company’s option.

(5)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(6)Three additional 364-day periods.

(7)First mortgage and mezzanine commercial real estate loans and senior pari passu interests therein. It does not include the real estate collateralizing such loans.

(8)One additional 12-month extension period and two additional 6-month extension periods at Company’s option.

(9)Two additional 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(10)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(11)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(12)Commercial real estate securities. It does not include the real estate collateralizing such securities.

(13)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(14)Includes $2.2 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(15)Four additional 12-month periods at Company’s option.

(16)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(17)Anticipated repayment dates.

(18)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(19)Using undepreciated carrying value of commercial real estate to approximate fair value.

(20)First mortgage commercial real estate loans and pari passu interests therein. It does not include the real estate collateralizing such loans.

(21)First mortgage commercial real estate loans and investment grade commercial real estate securities. It does not include the real estate collateralizing such loans and securities.

(22)Includes $9.9 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(23)Presented net of unamortized debt issuance costs of $8.4 million at December 31, 2019.

(24)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

Schedule of contractual payments under all borrowings by maturity

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands):

Period ending December 31,	Borrowings by Maturity(1)
2020 (last 6 months)	$	1,494,949
2021	527,569
2022	642,014
2023	351,436
2024	612,695
Thereafter	1,358,119
Subtotal	4,986,782
Debt issuance costs included in senior unsecured notes	(15,275)
Debt issuance costs included in secured financing facility	(9,705)
Discount on secured financing facility related to purchase right	(7,958)
Debt issuance costs included in CLO debt	(4,808)
Debt issuance costs included in mortgage loan financing	(524)
Premiums included in mortgage loan financing(2)	5,002
Total	$	4,953,514

(1)Contractual payments under current maturities, some of which are subject to extensions. The maturities listed above for 2020 (last 6 months) relate to debt obligations that are subject to existing Company controlled extension options for one or more additional one year periods or could be refinanced by other existing facilities as of June 30, 2020.

(2)Deferred gains on intercompany loans, secured by our own real estate, sold into securitizations. These premiums are amortized as a reduction to interest expense.

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DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of breakdown of the derivatives outstanding

The following is a breakdown of the derivatives outstanding as of June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)
Caps
1 Month LIBOR	$	69,571	$	—	$	—	0.86
Futures
5-year Swap	24,400		103		—		0.25
10-year Swap	61,000		258		—		0.25
5-year U.S. Treasury Note	4,500		19		—		0.25
Total futures	89,900		380		—
Total derivatives	$	159,471	$	380	$	—

(1)Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

December 31, 2019

			Fair Value				Remaining Maturity (years)
Contract Type	Notional		Asset(1)		Liability(1)
Caps
1Month LIBOR	$	69,571	$	—	$	—	0.36
Futures
5-year Swap	46,000		158		—		0.25
10-year Swap	149,800		516		—		0.25
5-year U.S. Treasury Note	1,100		4		—		0.25
Total futures	196,900		678		—
Credit Derivatives
S&P 500 Put Options	143,300		15		—		0.05
Total credit derivatives	143,300		15		—
Total derivatives	$	409,771	$	693	$	—

(1)Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

Schedule of net realized gains/(losses) and unrealized appreciation/(depreciation) on derivatives

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 and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Contract Type
Futures	$	(570)	$	(326)	$	(896)	$	(298)	$	(16,272)	$	(16,570)
Credit Derivatives	—		83		83		111		211		322
Total	$	(570)	$	(243)	$	(813)	$	(187)	$	(16,061)	$	(16,248)

	Three Months Ended June 30, 2019						Six Months Ended June 30, 2019
	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Contract Type
Futures	$	(1,046)	$	(14,361)	$	(15,407)	$	1,511	$	(27,894)	$	(26,383)
Credit Derivatives	66		(116)		(50)		—		(108)		(108)
Total	$	(980)	$	(14,477)	$	(15,457)	$	1,511	$	(28,002)	$	(26,491)

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OFFSETTING ASSETS AND LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2020

Offsetting [Abstract]

Schedule of offsetting of financial assets

As of June 30, 2020

Offsetting of Financial Assets and Derivative Assets

($ in thousands)

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	380	$	—	$	380	$	—	$	—	$	380
Total	$	380	$	—	$	380	$	—	$	—	$	380

(1)Included in restricted cash on consolidated balance sheets.

As of December 31, 2019

Offsetting of Financial Assets and Derivative Assets

($ in thousands)

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	693	$	—	$	693	$	—	$	—	$	693
Total	$	693	$	—	$	693	$	—	$	—	$	693

(1)Included in restricted cash on consolidated balance sheets.

Schedule of offsetting of financial liabilities

As of June 30, 2020

Offsetting of Financial Liabilities and Derivative Liabilities

($ in thousands)

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	1,295,029	$	—	$	1,295,029	$	1,295,029	$	—	$	—
Total	$	1,295,029	$	—	$	1,295,029	$	1,295,029	$	—	$	—

(1)Included in restricted cash on consolidated balance sheets.

As of December 31, 2019

Offsetting of Financial Liabilities and Derivative Liabilities

($ in thousands)

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)
Repurchase agreements	$	1,815,934	$	—	$	1,815,934	$	1,815,934	$	—	$	—
Total	$	1,815,934	$	—	$	1,815,934	$	1,815,934	$	—	$	—

(1)Included in restricted cash on consolidated balance sheets.

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CONSOLIDATED VARIABLE INTEREST ENTITIES (Tables)

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

In addition, the Operating Partnership consolidates one collateralized loan obligation (“CLO”) VIE with the following balance sheet ($ in thousands):

	June 30, 2020
	Notes 3 & 7
Restricted cash	$	8,649,072
Mortgage loan receivables held for investment, net, at amortized cost	469,505,178
Accrued interest receivable	1,769,859
Total assets	$	479,924,109
Senior and unsecured debt obligations	$	299,604,861
Accrued expenses	697,612
Total liabilities	300,302,473
Net equity in VIEs (eliminated in consolidation)	179,621,636
Total equity	179,621,636
Total liabilities and equity	$	479,924,109

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EQUITY STRUCTURE AND ACCOUNTS (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Common stock repurchase activity

The following table is a summary of the Company’s repurchase activity of its Class A common stock during the six months ended June 30, 2020 and 2019 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2019		$	41,132
Additional authorizations		—
Repurchases paid	210,151	(1,682)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2020		$	39,450

(1)Amount excludes commissions paid associated with share repurchases.

	Shares	Amount(1)
Authorizations remaining as of December 31, 2018		$	41,769
Additional authorizations		—
Repurchases paid	40,065	(637)
Repurchases unsettled		—
Authorizations remaining as of June 30, 2019		$	41,132

(1)Amount excludes commissions paid associated with share repurchases.

Schedule of dividends declared and paid

The following table presents dividends declared (on a per share basis) of Class A common stock for the six months ended June 30, 2020 and 2019:

Declaration Date	Dividend per Share
February 27, 2020	$	0.340
May 28, 2020	0.200
	$	0.540
February 27, 2019	$	0.340
May 30, 2019	0.340
Total	$	0.680

Schedule of accumulated other comprehensive Income

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the six months ended June 30, 2020 and 2019 ($ in thousands):

	Accumulated Other Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests		Total Accumulated Other Comprehensive Income (Loss)
December 31, 2019	$	4,218	$	477	$	4,695
Other comprehensive income (loss)	(46,530)		(5,354)		(51,884)
Exchange of noncontrolling interest for common stock	(4,915)		4,915		—
Rebalancing of ownership percentage between Company and Operating Partnership	2,147		(2,147)		—
June 30, 2020	$	(45,080)	$	(2,109)	$	(47,189)

	Accumulated Other Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests		Total Accumulated Other Comprehensive Income (Loss)
December 31, 2018	$	(4,649)	$	(588)	$	(5,237)
Other comprehensive income (loss)	16,738		2,044		18,782
Exchange of noncontrolling interest for common stock	65		(65)		—
Rebalancing of ownership percentage between Company and Operating Partnership	17		(17)		—
June 30, 2019	$	12,171	$	1,374	$	13,545

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of the Company's net income and weighted average shares outstanding

The Company’s net income (loss) and weighted average shares outstanding for the three and six months ended June 30, 2020 and 2019 consist of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands except share amounts)	2020		2019		2020		2019
Basic Net income (loss) available for Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Diluted Net income (loss) available for Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Weighted average shares outstanding
Basic	106,809,987		105,511,385		106,569,892		104,888,925
Diluted	106,809,987		105,892,420		106,569,892		105,742,589

Schedule of calculation of basic and diluted net income per share amounts

The calculation of basic and diluted net income (loss) per share amounts for the three and six months ended June 30, 2020 and 2019 consist of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands except share amounts)	2020		2019		2020(1)		2019(1)
Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Denominator:
Weighted average number of shares of Class A common stock outstanding	106,809,987		105,511,385		106,569,892		104,888,925
Basic net income (loss) per share of Class A common stock	$	(0.04)	$	0.31	$	(0.19)	$	0.52
Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	(4,189)	$	32,244	$	(19,918)	$	54,419
Add (deduct) - dilutive effect of:
Amounts attributable to operating partnership’s share of Ladder Capital Corp net income (loss)(2)	—		—		—		—
Additional corporate tax (expense) benefit(2)	—		—		—		—
Diluted net income (loss) attributable to Class A common shareholders	(4,189)		32,244		(19,918)		54,419
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	106,809,987		105,511,385		106,569,892		104,888,925
Add - dilutive effect of:
Shares issuable relating to converted Class B common shareholders(3)	—		—		—		—
Incremental shares of unvested Class A restricted stock(3)	—		381,035		—		853,664
Incremental shares of unvested stock options	—		—		—		—
Diluted weighted average number of shares of Class A common stock outstanding	106,809,987		105,892,420		106,569,892		105,742,589
Diluted net income (loss) per share of Class A common stock	$	(0.04)	$	0.30	$	(0.19)	$	0.51

(1)For three and six months ended June 30, 2020 and 2019, shares issuable relating to converted Class B common shareholders are excluded from the calculation of diluted EPS as the inclusion of such potential common shares in the calculation would be anti-dilutive.

(2)The Company is using the as-if converted method for the Class B common shareholders while adjusting for additional corporate income tax expense (benefit) for the described net income (loss) add-back.

(3)The Company is using the treasury stock method.

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STOCK BASED AND OTHER COMPENSATION PLANS (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock based compensation plans summary

The following table summarizes the impact on the consolidated statement of operations of the various stock based compensation plans described in Note 14, Stock Based and Other Compensation Plans included within the Company’s Annual Report ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Stock Based Compensation Expense	$	2,712	$	3,469	$	16,738	$	14,761
Phantom Equity Investment Plan	561		(98)		(1,577)		704
Stock Options Exercised	—		—		270		—
Bonus Expense	—		7,717		(30)		14,501
Total	$	3,273	$	11,088	$	15,401	$	29,966

Summary of the grants

A summary of the grants is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares/Options	Weighted Average Fair Value Per Share
Grants - Class A Common Stock	—	$	—	4,568	$	16.42	1,466,337	$	18.72	1,545,569	$	17.56
Grants - Class A Common Stock dividends	—	—		—	—		—	—		11,113	16.61
Stock Options	—	—		—	—		—	—		12,073	—

Schedule of nonvested shares activity

The table below presents the number of unvested shares and outstanding stock options at June 30, 2020 and changes during 2020 of the Class A Common stock and Stock Options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

	Restricted Stock	Stock Options
Nonvested/Outstanding at December 31, 2019	1,436,683	994,208
Granted	1,466,337	—
Exercised		(83,845)
Vested	(1,209,771)
Forfeited	(24,089)	—
Expired		—
Nonvested/Outstanding at June 30, 2020	1,669,160	910,363
Exercisable at June 30, 2020		910,363

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Summary of fair value

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2020 and December 31, 2019 are as follows ($ in thousands):

June 30, 2020

									Weighted Average
	Outstanding Face Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	1,496,090		$	1,495,892	$	1,447,338	Internal model, third-party inputs	1.57	%	2.27
CMBS interest-only(1)	1,535,739		(2)	25,026		25,510		Internal model, third-party inputs	2.83	%	2.34
GNMA interest-only(3)	93,464		(2)	1,335		1,379		Internal model, third-party inputs	4.21	%	3.18
Agency securities(1)	610			619		636		Internal model, third-party inputs	1.68	%	1.56
GNMA permanent securities(1)	30,853			31,006		31,870		Internal model, third-party inputs	3.50	%	2.41
Provision for current expected credit reserves	N/A			(19)		(19)		(5)	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	2,971,622			2,955,084		2,928,796		Discounted Cash Flow(4)	6.82	%	1.22
Provision for current expected credit reserves	N/A			(49,102)		(49,102)		(5)	N/A		N/A
Mortgage loan receivables held for sale	86,456			85,977		87,960		Internal model, third-party inputs(6)	3.94	%	9.70
FHLB stock(7)	61,619			61,619		61,619		(7)	4.00	%	N/A
Nonhedge derivatives(1)(8)	89,900			N/A		380		Counterparty quotations	N/A		0.25
Liabilities:
Repurchase agreements - short-term	1,217,013			1,217,013		1,217,013		Discounted Cash Flow(9)	2.64	%	0.22
Repurchase agreements - long-term	78,016			78,016		78,016		Discounted Cash Flow(10)	1.56	%	1.27
Revolving credit facility	266,430			266,430		266,430		Discounted Cash Flow(9)	3.00	%	0.05
Mortgage loan financing	800,952			805,431		828,693		Discounted Cash Flow(10)	4.97	%	4.88
Secured financing facility	188,687			188,687		188,687		Discounted Cash Flow(9)	10.75	%	2.85
CLO debt	299,605			299,605		299,605		Discounted Cash Flow(9)	5.50	%	3.88
Borrowings from the FHLB	360,790			360,790		362,559		Discounted Cash Flow	1.39	%	2.67
Senior unsecured notes	1,752,817			1,737,542		1,025,236		Internal model, third-party inputs	4.97	%	4.16
Nonhedge derivatives(1)(8)	69,571			N/A		—		Counterparty quotations	N/A		0.86

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(5)Fair value is estimated to equal par value.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)Fair value for repurchase agreement liabilities - short term borrowings under the secured financing facility and borrowings under the revolving credit facility 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. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term, mortgage loan financing, and CLO debt the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

December 31, 2019  

									Weighted Average
	Outstanding Face Amount			Amortized Cost Basis		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	1,640,597		$	1,640,905	$	1,644,322	Internal model, third-party inputs	3.08	%	2.41
CMBS interest-only(1)	1,559,160		(2)	28,553		29,146		Internal model, third-party inputs	3.04	%	2.53
GNMA interest-only(3)	109,783		(2)	1,982		1,851		Internal model, third-party inputs	4.59	%	2.77
Agency securities(1)	629			640		637		Internal model, third-party inputs	1.73	%	1.83
GNMA permanent securities(1)	31,461			31,681		32,369		Internal model, third-party inputs	3.17	%	1.93
Equity securities(3)	N/A			12,848		12,980		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost	3,277,596			3,257,036		3,273,219		Discounted Cash Flow(4)	6.94	%	1.43
Provision for loan losses	N/A			(20,500)		(20,500)		(5)	N/A		N/A
Mortgage loan receivables held for sale	122,748			122,325		124,989		Internal model, third-party inputs(6)	4.20	%	9.99
FHLB stock(7)	61,619			61,619		61,619		(7)	4.75	%	N/A
Nonhedge derivatives(1)(8)	340,200			N/A		693		Counterparty quotations	N/A		0.25
Liabilities:
Repurchase agreements - short-term	1,781,253			1,781,253		1,781,253		Discounted Cash Flow(9)	2.50	%	0.19
Repurchase agreements - long-term	34,681			34,681		34,681		Discounted Cash Flow(10)	2.81	%	1.41
Mortgage loan financing	807,854			812,606		838,766		Discounted Cash Flow(10)	4.91	%	5.65
Borrowings from the FHLB	1,073,500			1,073,500		1,080,354		Discounted Cash Flow	2.33	%	2.08
Senior unsecured notes	1,166,201			1,157,833		1,208,860		Internal model, third-party inputs	5.39	%	3.28
Nonhedge derivatives(1)(8)	69,571			N/A		—		Counterparty quotations	N/A		0.36

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow.

(5)Fair value is estimated to equal par value.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)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. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term and mortgage loan financing, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

Summary of financial assets and liabilities, both reported at fair value on a recurring basis or amortized cost/par

The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at June 30, 2020 and December 31, 2019 ($ in thousands):

June 30, 2020

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	1,484,514		$	—	$	—	$	1,436,227	$	1,436,227
CMBS interest-only(1)	1,525,120		(2)	—		—		24,772		24,772
GNMA interest-only(3)	93,464		(2)	—		—		1,379		1,379
Agency securities(1)	610			—		—		636		636
GNMA permanent securities(1)	30,853			—		—		31,870		31,870
Nonhedge derivatives(4)	89,900			—		380		—		380
				$	—	$	380	$	1,494,884	$	1,495,264
Liabilities:
Nonhedge derivatives(4)	69,571			$	—	$	—	$	—	$	—
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	2,971,622		$	—	$	—	$	2,928,796	$	2,928,796
Provision for current expected credit losses	N/A			—		—		(49,102)		(49,102)
Mortgage loan receivable held for sale	86,456			—		—		87,960		87,960
CMBS(5)	11,576			—		—		11,111		11,111
CMBS interest-only(5)	10,619		(2)	—		—		738		738
Provision for current expected credit losses	N/A							(19)		(19)
FHLB stock	61,619			—		—		61,619		61,619
				$	—	$	—	$	3,041,103	$	3,041,103
Liabilities:
Repurchase agreements - short-term	1,217,013			$	—	$	—	$	1,217,013	$	1,217,013
Repurchase agreements - long-term	78,016			—		—		78,016		78,016
Revolving credit facility	266,430			—		—		266,430		266,430
Mortgage loan financing	800,952			—		—		828,693		828,693
Secured financing facility	188,687			—		—		188,687		188,687
CLO debt	299,605			—		—		299,605		299,605
Borrowings from the FHLB	360,790			—		—		362,559		362,559
Senior unsecured notes	1,752,817			—		—		1,025,236		1,025,236
				$	—	$	—	$	4,266,239	$	4,266,239

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, which are classified as held-to-maturity and reported at amortized cost.

December 31, 2019

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	1,628,476		$	—	$	—	$	1,632,714	$	1,632,714
CMBS interest-only(1)	1,548,061		(2)	—		—		28,342		28,342
GNMA interest-only(3)	109,783		(2)	—		—		1,851		1,851
Agency securities(1)	629			—		—		637		637
GNMA permanent securities(1)	31,461			—		—		32,369		32,369
Equity securities	N/A			12,980		—		—		12,980
Nonhedge derivatives(4)	340,200			—		693		—		693
				$	12,980	$	693	$	1,695,913	$	1,709,586
Liabilities:
Nonhedge derivatives(4)	$	69,571		$	—	$	—	$	—	$	—
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Outstanding Face Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loans held by consolidated subsidiaries	$	3,277,597		$	—	$	—	$	3,273,219	$	3,273,219
Provision for loan losses	N/A			—		—		(20,500)		(20,500)
Mortgage loan receivables held for sale	122,748			—		—		124,989		124,989
CMBS(5)	12,121			—		—		11,608		11,608
CMBS interest-only(5)	11,099		(2)	—		—		804		804
FHLB stock	61,619			—		—		61,619		61,619
				$	—	$	—	$	3,451,739	$	3,451,739
Liabilities:
Repurchase agreements - short-term	1,781,253			$	—	$	—	$	1,781,253	$	1,781,253
Repurchase agreements - long-term	34,681			—		—		34,681		34,681
Mortgage loan financing	807,854			—		—		838,766		838,766
Borrowings from the FHLB	1,073,500			—		—		1,080,354		1,080,354
Senior unsecured notes	1,166,201			—		—		1,208,860		1,208,860
				$	—	$	—	$	4,943,914	$	4,943,914

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, which are classified as held-to-maturity and reported at amortized cost.

Schedule of changes in Level 3 of financial instruments

The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the six months ended June 30, 2020 and December 31, 2019 ($ in thousands):

	Six Months Ended June 30,
Level 3	2020		2019
Balance at January 1,	$	1,695,913	$	1,385,957
Transfer from level 2	—		—
Purchases	437,536		847,318
Sales	(517,535)		(379,961)
Paydowns/maturities	(52,271)		(110,400)
Amortization of premium/discount	(4,278)		(6,267)
Unrealized gain/(loss)	(51,709)		18,804
Realized gain/(loss) on sale(1)	(12,773)		7,242
Balance at June 30,	$	1,494,883	$	1,762,693

(1)Includes realized losses on securities recorded as other than temporary impairments.

Schedule of quantitative information

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

June 30, 2020

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	1,436,227		Discounted cash flow	Yield (4)	1.42	%	3.54	%	10	%
					Duration (years)(5)	0.00		2.72		6.26
CMBS interest-only(1)	24,772		(2)	Discounted cash flow	Yield (4)	—	%	2.33	%	10	%
					Duration (years)(5)	0.10		2.34		3.28
					Prepayment speed (CPY)(5)	100.00		100.00		100.00
GNMA interest-only(3)	1,379		(2)	Discounted cash flow	Yield (4)	—	%	3.26	%	10	%
					Duration (years)(5)	0.00		2.45		6.57
					Prepayment speed (CPJ)(5)	5.00		15.42		35.00
Agency securities(1)	636			Discounted cash flow	Yield (4)	—	%	0.32	%	1.72	%
					Duration (years)(5)	0.00		2.02		2.48
GNMA permanent securities(1)	31,870			Discounted cash flow	Yield (4)	1.42	%	2.44	%	6.44	%
					Duration (years)(5)	1.15		9.89		14.81
Total	$	1,494,884

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

(5)Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question.

December 31, 2019

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	1,632,714		Discounted cash flow	Yield (3)	—	%	3.11	%	19.92	%
					Duration (years)(4)	0.00		1.63		6.87
CMBS interest-only(1)	28,342		(2)	Discounted cash flow	Yield (3)	1.57	%	3.93	%	7.62	%
					Duration (years)(4)	0.26		2.47		3.51
					Prepayment speed (CPY)(4)	100.00		97.24		100.00
GNMA interest-only(3)	1,851		(2)	Discounted cash flow	Yield (4)	(4.82)	%	15.13	%	44.5	%
					Duration (years)(5)	0.85		2.90		13.69
					Prepayment speed (CPJ)(5)	5.00		12.36		35.00
Agency securities(1)	637			Discounted cash flow	Yield (4)	—	%	1.7	%	2.16	%
					Duration (years)(5)	0.00		2.30		2.92
GNMA permanent securities(1)	32,369			Discounted cash flow	Yield (4)	56.56	%	166.79	%	410	%
					Duration (years)(5)	2.60		3.61		6.49
Total	$	1,695,913

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA construction securities, GNMA permanent securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)Agency interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

(5)Significant increase (decrease) in the unobservable input in isolation would result in either a significantly lower or higher (lower or higher) fair value measurement depending on the structural features of the security in question.

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Company's performance evaluation by segment

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Three months ended June 30, 2020
Interest income	$	53,641	$	8,177	$	2	$	276	$	62,096
Interest expense	(11,732)		(7,795)		(9,758)		(39,140)		(68,425)
Net interest income (expense)	41,909		382		(9,756)		(38,864)		(6,329)
(Provision) benefit for loan losses	726		3		—		—		729
Net interest income (expense) after provision for loan losses	42,635		385		(9,756)		(38,864)		(5,600)
Operating lease income	—		—		23,773		—		23,773
Sale of loans, net	(744)		—		—		—		(744)
Realized gain (loss) on securities	—		(14,798)		—		—		(14,798)
Unrealized gain (loss) on equity securities	—		401		—		—		401
Unrealized gain (loss) on Agency interest-only securities	—		98		—		—		98
Realized gain on sale of real estate, net	—		—		(1)		—		(1)
Fee and other income	2,429		2		—		1,074		3,505
Net result from derivative transactions	(588)		(225)		—		—		(813)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		471		—		471
Gain (loss) on extinguishment of debt	—		—		—		19,017		19,017
Total other income (loss)	1,097		(14,522)		24,243		20,091		30,909
Salaries and employee benefits	—		—		—		(7,001)		(7,001)
Operating expenses(3)	—		—		—		(6,224)		(6,224)
Real estate operating expenses	—		—		(6,034)		—		(6,034)
Fee expense	(1,474)		(61)		(442)		—		(1,977)
Depreciation and amortization	—		—		(9,791)		(25)		(9,816)
Total costs and expenses	(1,474)		(61)		(16,267)		(13,250)		(31,052)
Income tax (expense) benefit	—		—		—		550		550
Segment profit (loss)	$	42,258	$	(14,198)	$	(1,780)	$	(31,473)	$	(5,193)
Total assets as of June 30, 2020	$	2,991,959	$	1,506,713	$	1,091,129	$	1,019,749	$	6,609,550

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Three months ended June 30, 2019
Interest income	$	69,794	$	15,210	$	7	$	311	$	85,322
Interest expense	(14,224)		(4,130)		(9,091)		(24,924)		(52,369)
Net interest income (expense)	55,570		11,080		(9,084)		(24,613)		32,953
(Provision) benefit for loan losses	(300)		—		—		—		(300)
Net interest income (expense) after provision for loan losses	55,270		11,080		(9,084)		(24,613)		32,653
Operating lease income	—		—		27,780		—		27,780
Sale of loans, net	20,264		—		—		—		20,264
Realized gain (loss) on securities	—		4,464		—		—		4,464
Unrealized gain (loss) on equity securities	—		(990)		—		—		(990)
Unrealized gain (loss) on Agency interest-only securities	—		11		—		—		11
Realized gain on sale of real estate, net	—		—		(1,124)		—		(1,124)
Fee and other income	5,947		333		—		916		7,196
Net result from derivative transactions	(8,518)		(6,939)		—		—		(15,457)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		1,564		—		1,564
Total other income (loss)	17,693		(3,121)		28,220		916		43,708
Salaries and employee benefits	—		—		—		(14,907)		(14,907)
Operating expenses(3)	—		—		—		(6,012)		(6,012)
Real estate operating expenses	—		—		(6,032)		—		(6,032)
Fee expense	(1,058)		(87)		(38)		—		(1,183)
Depreciation and amortization	—		—		(9,910)		(25)		(9,935)
Total costs and expenses	(1,058)		(87)		(15,980)		(20,944)		(38,069)
Income tax (expense) benefit	—		—		—		(2,219)		(2,219)
Segment profit (loss)	$	71,905	$	7,872	$	3,156	$	(46,860)	$	36,073
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Six months ended June 30, 2020
Interest income	$	112,546	$	21,040	$	10	$	1,090	$	134,686
Interest expense	(16,602)		(14,554)		(19,993)		(68,678)		(119,827)
Net interest income (expense)	95,944		6,486		(19,983)		(67,588)		14,859
(Provision) benefit for loan losses	(25,855)		3		—		—		(25,852)
Net interest income (expense) after provision for loan losses	70,089		6,489		(19,983)		(67,588)		(10,993)
Operating lease income	—		—		50,101		—		50,101
Sale of loans, net	261		—		—		—		261
Realized gain (loss) on securities	—		(11,787)		—		—		(11,787)
Unrealized gain (loss) on equity securities	—		(132)		—		—		(132)
Unrealized gain (loss) on Agency interest-only securities	—		174		—		—		174
Realized gain on sale of real estate, net	—		—		10,528		—		10,528
Fee and other income	3,854		403		25		742		5,024
Net result from derivative transactions	(11,939)		(4,309)		—		—		(16,248)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		912		—		912
Gain (loss) on extinguishment of debt	—		—		—		21,077		21,077
Total other income (loss)	(7,824)		(15,651)		61,566		21,819		59,910
Salaries and employee benefits	—		—		—		(24,023)		(24,023)
Operating expenses(3)	—		—		—		(12,018)		(12,018)
Real estate operating expenses	—		—		(13,981)				(13,981)
Fee expense	(2,664)		(133)		(618)		—		(3,415)
Depreciation and amortization	—		—		(19,775)		(50)		(19,825)
Total costs and expenses	(2,664)		(133)		(34,374)		(36,091)		(73,262)
Income tax (expense) benefit	—		—		—		5,091		5,091
Segment profit (loss)	$	59,601	$	(9,295)	$	7,209	$	(76,769)	$	(19,254)
Total assets as of June 30, 2020	$	2,991,959	$	1,506,713	$	1,091,129	$	1,019,749	$	6,609,550

	Loans		Securities		Real Estate(1)		Corporate/Other(2)		Company Total
Six months ended June 30, 2019
Interest income	$	142,947	$	28,329	$	15	$	498	$	171,789
Interest expense	(28,981)		(6,618)		(17,973)		(50,046)		(103,618)
Net interest income (expense)	113,966		21,711		(17,958)		(49,548)		68,171
(Provision) benefit for loan losses	(600)		—		—		—		(600)
Net interest income (expense) after provision for loan losses	113,366		21,711		(17,958)		(49,548)		67,571
Operating lease income	—		—		56,701		—		56,701
Sale of loans, net	27,342		—		—		—		27,342
Realized gain (loss) on securities	—		7,329		—		—		7,329
Unrealized gain (loss) on equity securities	—		1,088		—		—		1,088
Unrealized gain (loss) on Agency interest-only securities	—		22		—		—		22
Realized gain on sale of real estate, net	—		—		(1,119)		—		(1,119)
Impairment of real estate	—		—		(1,350)		—		(1,350)
Fee and other income	9,257		737		7		1,881		11,882
Net result from derivative transactions	(13,716)		(12,775)		—		—		(26,491)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		2,522		—		2,522
Gain (loss) on extinguishment of debt	—		—		(1,070)		—		(1,070)
Total other income (loss)	22,883		(3,599)		55,691		1,881		76,856
Salaries and employee benefits	—		—		—		(38,481)		(38,481)
Operating expenses(3)	—		—		—		(11,413)		(11,413)
Real estate operating expenses	—		—		(11,506)		—		(11,506)
Fee expense	(2,252)		(187)		(456)		—		(2,895)
Depreciation and amortization	—		—		(20,112)		(50)		(20,162)
Total costs and expenses	(2,252)		(187)		(32,074)		(49,944)		(84,457)
Income tax (expense) benefit	—		—		—		634		634
Segment profit (loss)	$	133,997	$	17,925	$	5,659	$	(96,977)	$	60,604
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

(1)Includes the Company’s investment in unconsolidated joint ventures that held real estate of $48.9 million and $48.4 million as of June 30, 2020 and December 31, 2019, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in unconsolidated joint ventures and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $61.6 million and $61.6 million as of June 30, 2020 and December 31, 2019, respectively, the Company’s deferred tax asset (liability) of $(12.0) million and $(2.1) million as of June 30, 2020 and December 31, 2019, respectively, and the Company’s senior unsecured notes of $1.7 billion and $1.2 billion as of June 30, 2020 and December 31, 2019, respectively.

(3)Includes $4.0 million and $7.1 million of professional fees for the three and six months ended June 30, 2020, respectively. Includes $3.6 million and $6.1 million of professional fees for the three and six months ended June 30, 2019, respectively.

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ORGANIZATION AND OPERATIONS (Details)	Jun. 30, 2020
LCFH
ORGANIZATION AND OPERATIONS
Ownership interest in LCFH	95.50%

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SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands		3 Months Ended			6 Months Ended			12 Months Ended
	Jan. 01, 2020 USD ($) loans $ / shares	Jun. 30, 2020 USD ($)		Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)		Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash and cash equivalents		$ 826,059	[1]	$ 126,529	$ 826,059	[1]	$ 126,529	$ 58,171	[1]
Payment on mark-to-market debt		1,000,000
Professional fees		4,000		3,600	7,100		6,100
Accounting Standards Update [Extensible List]								us-gaap:AccountingStandardsUpdate201613Member
General CECL Reserve	$ 11,600	49,102			49,102			$ 20,500
Percentage of total loan portfolio	0.36%
Carrying value of held for investment loan portfolio	$ 3,200,000
Loans that previously had asset-specific reserves | loans	3
Provision expense for current expected credit loss (implementation impact)	$ 5,800	$ (355)		$ 300	17,638		$ 600
Book value of common stock (in usd per share) | $ / shares	$ 0.05
COVID-19 Crisis
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Professional fees					2,100
Severance costs					$ 200
Asset Specific Reserve, Company Loan
Error Corrections and Prior Period Adjustments Restatement [Line Items]
General CECL Reserve	$ 14,700
Carrying value of financing receivable	$ 39,800

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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MORTGAGE LOAN RECEIVABLES - Schedule of Mortgage Loans (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jan. 01, 2020	Jun. 30, 2019	Dec. 31, 2018
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount	$ 3,058,078	$ 3,400,345
Allowance for loan losses	(49,102)	(20,500)	$ (11,600)
Carrying Value	$ 2,991,959	$ 3,358,861
Weighted average yield	6.85%	6.88%
Remaining Maturity	1 year 5 months 23 days	1 year 9 months
First mortgage loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount	$ 2,848,829	$ 3,147,275
Carrying Value gross, consumer and commercial real estate	$ 2,832,610	$ 3,127,173
Weighted average yield	6.65%	6.77%
Remaining Maturity	1 year 1 month 24 days	1 year 4 months 6 days
Mezzanine loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount	$ 122,793	$ 130,322
Carrying Value gross, consumer and commercial real estate	$ 122,474	$ 129,863
Weighted average yield	10.84%	10.97%
Remaining Maturity	2 years 10 months 28 days	3 years 3 months 3 days
Total mortgage loans held by consolidated subsidiaries
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount	$ 2,971,622	$ 3,277,597
Carrying Value gross, consumer and commercial real estate	$ 2,955,084	$ 3,257,036
Weighted average yield	6.82%	6.94%
Remaining Maturity	1 year 2 months 19 days	1 year 5 months 4 days
Total mortgage loan receivables held for investment, net, at amortized cost
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount	$ 2,971,622	$ 3,277,597
Allowance for loan losses	(49,102)	(20,500)		$ (18,500)	$ (17,900)
Carrying Value	2,905,982	3,236,536
Mortgage loan receivables held for sale, First Mortgage Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount	86,456	122,748
Carrying Value	$ 85,977	$ 122,325
Weighted average yield	3.94%	4.20%
Remaining Maturity	9 years 8 months 12 days	9 years 11 months 26 days

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MORTGAGE LOAN RECEIVABLES - Additional Information (Details)				3 Months Ended					6 Months Ended		12 Months Ended
	Jan. 01, 2020 USD ($) loans $ / shares	Oct. 17, 2018 USD ($)	Mar. 31, 2018 USD ($)	Jun. 30, 2020 USD ($) loan	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($) loan	Jun. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2020 USD ($) loan	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) security	Dec. 31, 2016 USD ($) security
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Unamortized discounts included in mortgage loan receivables held for investment, at amortized cost				$ 400,000		$ 400,000			$ 400,000		$ 400,000
General CECL Reserve	$ 11,600,000			49,102,000		20,500,000			49,102,000		20,500,000
Percentage of total loan portfolio	0.36%
Carrying value of held for investment loan portfolio	$ 3,200,000,000
Loans that previously had asset-specific reserves | loans	3
Provision expense for current expected credit loss (implementation impact)	$ 5,800,000			(355,000)			$ 300,000		17,638,000	$ 600,000
Book value of common stock (in usd per share) | $ / shares	$ 0.05
Individually impaired loans				76,933,000					76,933,000
Loans nonaccrual status, amount				185,896,000		98,725,000			185,896,000		98,725,000
Provision for/(release of) loan loss reserves				(729,000)			300,000		$ 25,852,000	600,000
Minimum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Direct capitalization rate			4.70%						4.60%
Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Direct capitalization rate			5.00%						4.90%
Asset Specific Reserve, Company Loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
General CECL Reserve	$ 14,700,000
Carrying value of financing receivable	39,800,000
Accounting Standards Update 2016-13
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
General CECL Reserve				29,400,000					$ 29,400,000
Carrying value of held for investment loan portfolio	$ 3,200,000,000
Loans that previously had asset-specific reserves | loan									4
Additional CECL reserve recorded				(700,000)					$ (700,000)
Increase of reserve to provision expenses									(300,000)
Increase in reserve of unfunded commitments				(400,000)					(400,000)
Accounting Standards Update 2016-13 | Asset Specific Reserve, Company Loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
General CECL Reserve				20,700,000					20,700,000
Aggregate amount of loan specific reserves					$ 7,500,000
Total mortgage loan receivables held for investment, net, at amortized cost
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans receivable with variable rates of interest				$ 2,400,000,000		$ 2,500,000,000			$ 2,400,000,000		$ 2,500,000,000
Loans receivable with variable rates of interest				80.80%		77.20%			80.80%		77.20%
Loans receivable with variable rates of interest, subject to interest rate floors				100.00%		100.00%			100.00%		100.00%
General CECL Reserve				$ 49,102,000		$ 20,500,000	$ 18,500,000		$ 49,102,000	18,500,000	$ 20,500,000	$ 17,900,000
Provision expense for current expected credit loss (implementation impact)									4,964,000
Loans in default, carrying value		$ 45,000,000.0		61,500,000					61,500,000
Provision for/(release of) loan loss reserves									$ (2,000,000)
Total mortgage loan receivables held for investment, net, at amortized cost | Two Company Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number or loans in default									2			2	2
Loans in default, carrying value				$ 26,900,000		$ 26,900,000			$ 26,900,000		$ 26,900,000	$ 45,900,000	$ 26,900,000
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number or loans in default			1	1		1			1		1	1	1
Loans in default, carrying value			$ 5,900,000									$ 4,100,000
Loan reserve amount					$ 500,000
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan | Minimum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Percentage of equity kicker not subject to investment		19.00%
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan | Maximum
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Percentage of equity kicker not subject to investment		25.00%
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan | Series A
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans in default, carrying value		$ 35,000,000.0
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan | Series B
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans in default, carrying value		$ 10,000,000.0				$ 10,400,000					$ 10,400,000
Total mortgage loan receivables held for investment, net, at amortized cost | Asset Specific Reserve, Company Loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans in default, carrying value				$ 45,900,000		61,500,000			$ 45,900,000		61,500,000
Loan reserve amount			$ 2,700,000					$ 10,000,000.0
Terminal capitalization rate					7.50%
Discount rate					8.75%
Total mortgage loan receivables held for investment, net, at amortized cost | Two Of Company Loans 2
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans in default, carrying value				$ 4,100,000					4,100,000
Total mortgage loan receivables held for investment, net, at amortized cost | One Of Company Loan 1
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number or loans in default | loan				1
Total mortgage loan receivables held for investment, net, at amortized cost | Asset Specific Reserve, Company Loan 1
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans in default, carrying value				$ 8,000,000.0		39,500,000			8,000,000.0		39,500,000
Mortgage loan  receivables held for sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans receivable with fixed rates of interest				$ 86,500,000		$ 122,700,000			$ 86,500,000		$ 122,700,000
Percentage of loans receivable with fixed rates of interest				100.00%		100.00%			100.00%		100.00%
Provision for/(release of) loan loss reserves										$ 0
Loan on non-accrual status
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans nonaccrual status, amount				$ 0					$ 0

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MORTGAGE LOAN RECEIVABLES - Activity in Loan Portfolio (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
	Jan. 01, 2020	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Allowance for loan losses, beginning balance	$ (20,500)				$ (20,500)
Sale of loans, net		$ (744)	$ 20,264		261	$ 27,342
Provision for current expected credit losses		729	(300)		(25,852)	(600)
Provision expense for current expected credit loss	5,800	(355)	300		17,638	600
Additional asset-specific reserve		(8,000)
Mortgage loans transferred but not considered sold, at amortized cost, outstanding face amount				$ 15,400
Mortgage loans transferred but not considered sold, at amortized cost, book value				$ 15,500
Mortgage loans transferred but not considered sold, at amortized cost, remaining maturity				9 years 9 months 18 days
Total mortgage loans held by consolidated subsidiaries
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Mortgage loans receivable, beginning balance	3,257,036			$ 3,318,390	3,257,036	3,318,390
Origination of mortgage loan receivables					334,347	484,496
Repayment of mortgage loan receivables					(446,080)	(693,323)
Proceeds from sales of mortgage loan receivables					(165,364)	0
Non-cash disposition of loans via foreclosure					(27,107)
Sale of loans, net					(6,665)	0
Transfer between held for investment and held for sale						0
Accretion/amortization of discount, premium and other fees					8,917	10,294
Provision for current expected credit losses						0
Mortgage loans receivable, ending balance		2,955,084	3,119,857		2,955,084	3,119,857
Total mortgage loan receivables held for investment, net, at amortized cost
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Allowance for loan losses, beginning balance	(20,500)			(17,900)	(20,500)	(17,900)
Provision for current expected credit losses					2,000
Provision expense for current expected credit loss					4,964
Provision expense for current expected credit loss, net (impact to earnings)					(17,638)	(600)
Mortgage loan  receivables held for sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Mortgage loans receivable, beginning balance	$ 122,325			$ 182,439	122,325	182,439
Origination of mortgage loan receivables					212,845	333,342
Repayment of mortgage loan receivables					(292)	(497)
Proceeds from sales of mortgage loan receivables					(255,827)	(415,145)
Non-cash disposition of loans via foreclosure					0
Sale of loans, net					6,926	27,342
Transfer between held for investment and held for sale						(15,504)
Accretion/amortization of discount, premium and other fees						0
Provision for current expected credit losses						0
Mortgage loans receivable, ending balance		$ 85,977	111,977		$ 85,977	111,977
Mortgage loans transferred but not considered sold
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Proceeds from sales of mortgage loan receivables						(15,504)
Transfer between held for investment and held for sale						15,504
Mortgage loans receivable, ending balance			$ 0			$ 0

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MORTGAGE LOAN RECEIVABLES - Provision for Loan Losses (Details)			3 Months Ended			6 Months Ended		12 Months Ended
	Jan. 01, 2020 USD ($)	Mar. 31, 2018 USD ($)	Jun. 30, 2020 USD ($) loan	Dec. 31, 2019 USD ($) loan	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) loan	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) security	Dec. 31, 2016 USD ($) security	Oct. 17, 2018 USD ($)
Allowance for Loan and Lease Losses [Roll Forward]
Provision for loan losses at beginning of period	$ 20,500,000		$ 49,457,000		$ 18,200,000	$ 20,500,000	$ 17,900,000	$ 17,900,000
Provision expense for current expected credit loss (implementation impact)	$ 5,800,000		(355,000)		300,000	17,638,000	600,000
Provision for/(release of) loan loss reserves			(729,000)		300,000	25,852,000	600,000
Additional asset-specific reserve			0		0	8,000,000	0
Foreclosure of loans subject to asset-specific reserve			0		0	(2,000,000)	0
Provision for loan losses at end of period			49,102,000	$ 20,500,000	18,500,000	49,102,000	18,500,000	20,500,000	$ 17,900,000
Principal balance of loans on non-accrual status			185,896,000	98,725,000		185,896,000		98,725,000
Cumulative Effect, Period Of Adoption, Adjusted Balance
Allowance for Loan and Lease Losses [Roll Forward]
Provision expense for current expected credit loss (implementation impact)			0		$ 0	4,964,000	$ 0
Total mortgage loan receivables held for investment, net, at amortized cost
Allowance for Loan and Lease Losses [Roll Forward]
Provision expense for current expected credit loss (implementation impact)						4,964,000
Provision for/(release of) loan loss reserves						(2,000,000)
Loans in default, carrying value			61,500,000			$ 61,500,000					$ 45,000,000.0
Total mortgage loan receivables held for investment, net, at amortized cost | Two Company Loans
Allowance for Loan and Lease Losses [Roll Forward]
Number or loans in default						2			2	2
Loans in default, carrying value			26,900,000	$ 26,900,000		$ 26,900,000		$ 26,900,000	$ 45,900,000	$ 26,900,000
Total mortgage loan receivables held for investment, net, at amortized cost | Two Of Company Loans 2
Allowance for Loan and Lease Losses [Roll Forward]
Loans in default, carrying value			4,100,000			$ 4,100,000
Total mortgage loan receivables held for investment, net, at amortized cost | Two Of Company Loans 1
Allowance for Loan and Lease Losses [Roll Forward]
Number or loans in default | loan						2
Loans in default, carrying value			$ 45,900,000			$ 45,900,000
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan
Allowance for Loan and Lease Losses [Roll Forward]
Number or loans in default		1	1	1		1		1	1	1
Loans in default, carrying value		$ 5,900,000							$ 4,100,000
Total mortgage loan receivables held for investment, net, at amortized cost | One Company Loan | Series B
Allowance for Loan and Lease Losses [Roll Forward]
Loans in default, carrying value				$ 10,400,000				$ 10,400,000			$ 10,000,000.0
Total mortgage loan receivables held for investment, net, at amortized cost | Asset Specific Reserve, Company Loan
Allowance for Loan and Lease Losses [Roll Forward]
Loans in default, carrying value			$ 45,900,000	$ 61,500,000		$ 45,900,000		$ 61,500,000

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MORTGAGE LOAN RECEIVABLES - Individually Impaired Loans (Details) $ in Thousands		3 Months Ended		6 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($)	Jun. 30, 2020 USD ($) loan	Dec. 31, 2019 USD ($) loan	Jun. 30, 2020 USD ($) loan	Dec. 31, 2019 USD ($) loan	Dec. 31, 2018 USD ($) security	Dec. 31, 2016 USD ($) security	Oct. 17, 2018 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Subtotal loans, 2020		$ 283,438		$ 283,438
Subtotal loans, 2019		1,204,286		1,204,286
Subtotal loans, 2018		819,215		819,215
Subtotal loans, 2017		307,455		307,455
Subtotal loans, 2016 and Earlier		263,757		263,757
Subtotal loans		2,878,151		2,878,151
Individually impaired loans, 2020		0		0
Individually impaired loans, 2019		0		0
Individually impaired loans, 2018		4,143		4,143
Individually impaired loans, 2017
Individually impaired loans, 2016 and Earlier		72,790		72,790
Individually impaired loans		76,933		76,933
Total loans, 2020		283,438		283,438
Total loans, 2019		1,204,286		1,204,286
Total loans, 2018		823,358		823,358
Total loans, 2017		307,455		307,455
Total loans, 2016 and Earlier		336,547		336,547
Total loans		2,955,084		2,955,084
Total mortgage loan receivables held for investment, net, at amortized cost
Financing Receivable, Credit Quality Indicator [Line Items]
Loans in default, carrying value		$ 61,500		$ 61,500				$ 45,000
One Company Loan | Total mortgage loan receivables held for investment, net, at amortized cost
Financing Receivable, Credit Quality Indicator [Line Items]
Number or loans in default	1	1	1	1	1	1	1
Loans in default, carrying value	$ 5,900					$ 4,100
Two Company Loans | Total mortgage loan receivables held for investment, net, at amortized cost
Financing Receivable, Credit Quality Indicator [Line Items]
Number or loans in default				2		2	2
Loans in default, carrying value		$ 26,900	$ 26,900	$ 26,900	$ 26,900	$ 45,900	$ 26,900
Northeast
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		785,000		785,000
Southwest
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		588,046		588,046
Midwest
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		585,505		585,505
South
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		512,314		512,314
West
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		407,286		407,286
Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
2020		65,228		65,228
2019		323,178		323,178
2018		147,460		147,460
2017		31,872		31,872
2016 and Earlier		11,772		11,772
Total loans		579,510		579,510
Office
Financing Receivable, Credit Quality Indicator [Line Items]
2020		51,658		51,658
2019		216,946		216,946
2018		388,721		388,721
2017		160,288		160,288
2016 and Earlier		52,086		52,086
Total loans		869,699		869,699
Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
2020		0		0
2019		83,018		83,018
2018		143,681		143,681
2017		67,446		67,446
2016 and Earlier		123,630		123,630
Total loans		417,775		417,775
Mixed Use
Financing Receivable, Credit Quality Indicator [Line Items]
2020		52,515		52,515
2019		101,436		101,436
2018		5,092		5,092
2017		47,849		47,849
2016 and Earlier		0		0
Total loans		206,892		206,892
Retail
Financing Receivable, Credit Quality Indicator [Line Items]
2020		0		0
2019		141,842		141,842
2018		25,029		25,029
2017		0		0
2016 and Earlier		65,823		65,823
Total loans		232,694		232,694
Other
Financing Receivable, Credit Quality Indicator [Line Items]
2020		57,528		57,528
2019		130,025		130,025
2018		82,353		82,353
2017		0		0
2016 and Earlier		0		0
Total loans		269,906		269,906
Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2020		51,964		51,964
2019		114,987		114,987
2018		0		0
2017		0		0
2016 and Earlier		6,476		6,476
Total loans		173,427		173,427
Manufactured Housing
Financing Receivable, Credit Quality Indicator [Line Items]
2020		4,545		4,545
2019		56,918		56,918
2018		11,702		11,702
2017		0		0
2016 and Earlier		3,970		3,970
Total loans		77,135		77,135
Self-Storage
Financing Receivable, Credit Quality Indicator [Line Items]
2020		0		0
2019		35,936		35,936
2018		15,177		15,177
2017		0		0
2016 and Earlier		0		0
Total loans		$ 51,113		$ 51,113

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REAL ESTATE SECURITIES - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Unrealized mark-to-market gain			$ 11,800,000
Realized gain (loss) on equity securities	$ (200,000)	$ 0	1,100,000	$ 100,000
Other than temporary impairment losses included in consolidated statements of income	$ (100,000)	$ 0	$ (300,000)	$ 0

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REAL ESTATE SECURITIES - Summary of Securities (Details) $ in Thousands		3 Months Ended		6 Months Ended		12 Months Ended
		Jun. 30, 2020 USD ($) security	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) security	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		$ 3,156,756		$ 3,156,756		$ 3,341,630
Amortized Cost Basis/Purchase Price		1,553,878		1,553,878		1,703,761
Gross Unrealized Gains		1,785		1,785		5,779
Gross Unrealized Losses		(48,931)		(48,931)		(1,215)
Carrying Value		$ 1,506,732		$ 1,506,732		$ 1,708,325
Number of Securities | security		86		86		159
Weighted Average Coupon		0.98%		0.98%		1.84%
Weighted Average Yield		1.63%		1.63%		3.06%
Remaining Duration				2 years 3 months 7 days		2 years 4 months 20 days
Number of equity securities | security						2
Provision for current expected credit losses		$ 729	$ (300)	$ (25,852)	$ (600)
Amortized Cost Basis/Purchase Price		1,553,878		1,553,878		$ 1,716,609
Gross Unrealized Gains		1,785		1,785		6,071
Total real estate securities, Gross Unrealized Losses		(48,950)		(48,950)		(1,375)
Carrying Value	[1]	$ 1,506,713		$ 1,506,713		$ 1,721,305
Total number of Securities | security		86		86		161
CMBS
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		$ 1,496,090		$ 1,496,090		$ 1,640,597
Amortized Cost Basis/Purchase Price		1,495,892		1,495,892		1,640,905
Gross Unrealized Gains		212		212		4,337
Gross Unrealized Losses		(48,766)		(48,766)		(920)
Carrying Value		$ 1,447,338		$ 1,447,338		$ 1,644,322
Number of Securities | security		49		49		125
Weighted Average Coupon		1.51%		1.51%		3.06%
Weighted Average Yield		1.57%		1.57%		3.08%
Remaining Duration				2 years 3 months 7 days		2 years 4 months 28 days
Risk retention requirement, amount		$ 11,100		$ 11,100		$ 11,600
CMBS interest-only
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		1,535,739		1,535,739		1,559,160
Amortized Cost Basis/Purchase Price		25,026		25,026		28,553
Gross Unrealized Gains		488		488		630
Gross Unrealized Losses		(4)		(4)		(37)
Carrying Value		$ 25,510		$ 25,510		$ 29,146
Number of Securities | security		15		15		15
Weighted Average Coupon		0.45%		0.45%		0.60%
Weighted Average Yield		2.83%		2.83%		3.04%
Remaining Duration				2 years 4 months 2 days		2 years 6 months 10 days
Risk retention requirement, amount		$ 700		$ 700		$ 800
GNMA interest-only
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		93,464		93,464		109,783
Amortized Cost Basis/Purchase Price		1,335		1,335		1,982
Gross Unrealized Gains		204		204		123
Gross Unrealized Losses		(161)		(161)		(254)
Carrying Value		$ 1,378		$ 1,378		$ 1,851
Number of Securities | security		14		14		11
Weighted Average Coupon		0.45%		0.45%		0.49%
Weighted Average Yield		4.21%		4.21%		4.59%
Remaining Duration				3 years 2 months 4 days		2 years 9 months 7 days
Agency securities
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		$ 610		$ 610		$ 629
Amortized Cost Basis/Purchase Price		619		619		640
Gross Unrealized Gains		17		17		1
Gross Unrealized Losses		0		0		(4)
Carrying Value		$ 636		$ 636		$ 637
Number of Securities | security		2		2		2
Weighted Average Coupon		2.61%		2.61%		2.65%
Weighted Average Yield		1.68%		1.68%		1.73%
Remaining Duration				1 year 6 months 21 days		1 year 9 months 29 days
GNMA permanent securities
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		$ 30,853		$ 30,853		$ 31,461
Amortized Cost Basis/Purchase Price		31,006		31,006		31,681
Gross Unrealized Gains		864		864		688
Gross Unrealized Losses		0		0		0
Carrying Value		$ 31,870		$ 31,870		$ 32,369
Number of Securities | security		6		6		6
Weighted Average Coupon		3.89%		3.89%		3.91%
Weighted Average Yield		3.50%		3.50%		3.17%
Remaining Duration				2 years 4 months 28 days		1 year 11 months 4 days
Equity securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost Basis/Purchase Price						$ 12,848
Gross Unrealized Gains						292
Total debt securities, Gross Unrealized Losses						(160)
Carrying Value						$ 12,980
Provision for current expected credit losses				$ (19)
Provision for current expected credit losses				$ 19

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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REAL ESTATE SECURITIES - Securities by Remaining Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Within 1 year	$ 186,893	$ 179,139
1-5 years	1,270,425	1,451,193
5-10 years	49,410	77,993
After 10 years	4	0
Total	1,506,732	1,708,325
CMBS
Debt Securities, Available-for-sale [Line Items]
Within 1 year	185,672	177,193
1-5 years	1,212,532	1,389,392
5-10 years	49,134	77,737
After 10 years	0	0
Total	1,447,338	1,644,322
CMBS interest-only
Debt Securities, Available-for-sale [Line Items]
Within 1 year	920	1,439
1-5 years	24,590	27,707
5-10 years	0	0
After 10 years	0	0
Total	25,510	29,146
GNMA interest-only
Debt Securities, Available-for-sale [Line Items]
Within 1 year	70	91
1-5 years	1,028	1,504
5-10 years	276	256
After 10 years	4	0
Total	1,378	1,851
Agency securities
Debt Securities, Available-for-sale [Line Items]
Within 1 year	0	0
1-5 years	636	637
5-10 years	0	0
After 10 years	0	0
Total	636	637
GNMA permanent securities
Debt Securities, Available-for-sale [Line Items]
Within 1 year	231	416
1-5 years	31,639	31,953
5-10 years	0	0
After 10 years	0	0
Total	$ 31,870	$ 32,369

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Real Estate Portfolio (Details) - USD ($) $ in Thousands		Jun. 30, 2020	Dec. 31, 2019
Real estate and related lease intangibles, net
Less: Accumulated depreciation and amortization		$ (216,535)	$ (206,082)
Real estate and related lease intangibles, net	[1]	1,042,210	1,048,081
Below market lease intangibles, net (other liabilities)		(38,125)	(39,067)
In-place leases and other intangibles
Real estate and related lease intangibles, net
Real estate		159,049	161,203
Land
Real estate and related lease intangibles, net
Real estate		228,111	209,955
Building
Real estate and related lease intangibles, net
Real estate		$ 871,585	$ 883,005

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Additional Information (Details) - USD ($)				1 Months Ended		3 Months Ended			6 Months Ended
	May 01, 2019	Feb. 06, 2019	Jan. 10, 2019	Jun. 30, 2020	Feb. 28, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Business Acquisition [Line Items]
Foreclosed properties held in real estate				$ 112,700,000		$ 112,700,000			$ 112,700,000		$ 89,500,000
Proceeds from lease prepayments			$ 10,000,000.0
Mortgage loan and financing related to property sales		$ 6,600,000
Gain (loss) on extinguishment/defeasance of debt		$ (1,100,000)				19,017,000	$ 0		21,077,000	$ (1,070,000)
Impairment of real estate						0	0	$ 1,400,000	0	1,350,000
Operating lease income	$ 3,900,000					23,773,000	27,780,000		50,101,000	56,701,000
Loss on sale of real estate	3,500,000
Depreciation and amortization	400,000					9,816,000	9,935,000		19,825,000	20,162,000
Loss on sale of real estate	$ 20,000
Unbilled rent receivables				700,000		700,000			700,000		900,000
Unencumbered real estates				82,400,000		82,400,000			82,400,000		$ 59,200,000
Real estate operating income						600,000	800,000		$ 2,500,000	$ 1,000,000.0
Weighted average amortization period for intangible assets acquired									39 years 9 months 18 days	37 years
Revenues from acquisitions						100,000	62,500		$ 200,000	$ 78,900
Net earnings (loss)						100,000	(1,200,000)		47,600	(1,500,000)
Provision for/(release of) loan loss reserves						(729,000)	300,000		25,852,000	600,000
Real estate acquired through foreclosure, fair value				25,435,000		25,435,000	18,200,000		25,435,000	18,200,000
Gain resulting from foreclosure of loan									(51,000)	0
Realized loss on sale of real estate, net				0		(1,000)	$ (1,124,000)		10,528,000	$ (1,119,000)
2020 Disposal Properties
Business Acquisition [Line Items]
Realized loss on sale of real estate, net									10,528,000
Los Angeles, California | Real Estate Acquired in Satisfaction of Debt
Business Acquisition [Line Items]
Gain resulting from foreclosure of loan									(100,000)
Omaha, NE | Real Estate Acquired in Satisfaction of Debt
Business Acquisition [Line Items]
Gain resulting from foreclosure of loan					$ 0
Diversified
Business Acquisition [Line Items]
Real estate acquired through foreclosure, net basis				3,800,000		3,800,000			3,800,000
Diversified | Los Angeles, California
Business Acquisition [Line Items]
Real estate acquired through foreclosure, net basis				21,600,000		21,600,000			21,600,000
Provision for/(release of) loan loss reserves									2,000,000.0
Real estate acquired through foreclosure, fair value				21,535,000		21,535,000			21,535,000
Diversified | Omaha, NE
Business Acquisition [Line Items]
Real estate acquired through foreclosure, net basis					17,900,000
Real estate acquired through foreclosure, fair value					$ 18,200,000
Terminal capitalization rate					8.75%
Discount rate					10.25%
Diversified | Winston Salem, North Carolina
Business Acquisition [Line Items]
Real estate acquired through foreclosure, fair value				$ 3,900,000		$ 3,900,000			$ 3,900,000
Terminal capitalization rate				9.50%
Discount rate				13.50%
Assets Leased to Others
Business Acquisition [Line Items]
Property book value								5,600,000
Accumulated depreciation and amortization								$ 2,700,000

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Depreciation and Amortization Expense on Real Estate (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Real Estate [Abstract]
Depreciation expense	$ 8,110	$ 7,697	$ 16,383	$ 15,382
Amortization expense	1,681	2,213	3,392	4,730
Total real estate depreciation and amortization expense	9,791	9,910	19,775	20,112
Depreciation on corporate fixed assets	$ 25	$ 25	$ 50	$ 50

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Unamortized Favorable Lease Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Business Acquisition [Line Items]
Gross intangible assets	$ 159,049		$ 159,049		$ 161,203
Accumulated amortization	63,089		63,089		62,773
Net intangible assets	95,960		95,960		98,430
Unamortized favorable lease intangibles	4,400		4,400		$ 4,500
Increase in operating lease income for amortization of below market lease intangibles acquired	619	$ 461	1,371	$ 1,030
Above Market Leases
Business Acquisition [Line Items]
Reduction in operating lease income for amortization of above market lease intangibles acquired	$ (92)	$ (208)	$ (183)	$ (633)

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Expected Future Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Net intangible assets	$ 95,960	$ 98,430
Adjustment to Operating Lease Income
Finite-Lived Intangible Assets [Line Items]
2020 (last 6 months)	625
2021	1,070
2022	1,070
2023	1,070
2024	1,070
Thereafter	28,867
Net intangible assets	33,772
Amortization Expense
Finite-Lived Intangible Assets [Line Items]
2020 (last 6 months)	2,956
2021	5,504
2022	5,504
2023	5,504
2024	5,504
Thereafter	66,590
Net intangible assets	$ 91,562

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Future Minimum Rental Payments Receivable (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Real Estate [Abstract]
2020 (last 6 months)	$ 43,163
2021	73,091
2022	66,145
2023	65,377
2024	64,412
Thereafter	507,659
Total	$ 819,847

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Real Estate Properties Acquired (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Feb. 28, 2019
Business Acquisition [Line Items]
Purchase Price	$ 31,674	$ 23,271
Real estate acquired through foreclosure	25,435	18,200
Lease Real Estate
Business Acquisition [Line Items]
Purchase Price	$ 6,239	$ 5,071
Ownership Interest	100.00%	100.00%
Los Angeles, California | Diversified
Business Acquisition [Line Items]
Real estate acquired through foreclosure	$ 21,535
Ownership Interest	100.00%
Winston Salem, North Carolina | Diversified
Business Acquisition [Line Items]
Real estate acquired through foreclosure	$ 3,900
Ownership Interest	100.00%
Omaha, NE | Diversified
Business Acquisition [Line Items]
Real estate acquired through foreclosure			$ 18,200
Ownership Interest		100.00%

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Real Estate [Abstract]
Land	$ 23,524	$ 3,789
Building	7,244	18,885
Intangibles	1,201	854
Below Market Lease Intangibles	(295)	(257)
Purchase Price	$ 31,674	$ 23,271

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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Real Estate Properties Sold (Details)		1 Months Ended	3 Months Ended		6 Months Ended
		Jun. 30, 2020 USD ($) property	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($) property	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($) property	Dec. 31, 2019 USD ($)
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					$ 11,426,000	$ 8,521,000
Net Book Value	[1]	$ 1,042,210,000	$ 1,042,210,000		1,042,210,000		$ 1,048,081,000
Realized gain (loss) on sale of real estate, net		0	(1,000)	$ (1,124,000)	10,528,000	(1,119,000)
2020 Disposal Properties
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					30,390,000
Net Book Value		19,862,000	19,862,000		19,862,000
Realized gain (loss) on sale of real estate, net					10,528,000
Realized loss included in disposal of fixed assets					(100,000)
2020 Disposal Properties | Condominium | Miami, FL
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					931,000
Net Book Value		$ 924,000	$ 924,000		924,000
Realized gain (loss) on sale of real estate, net					$ 7,000
Properties | property		0	0		0
Units Sold | property					3
Units Remaining | property					3
2020 Disposal Properties | Diversified | Richmond, VA
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					$ 22,526,000
Net Book Value		$ 14,829,000	$ 14,829,000		14,829,000
Realized gain (loss) on sale of real estate, net					$ 7,697,000
Properties | property		7	7		7
Units Sold | property					0
Units Remaining | property					0
2020 Disposal Properties | Diversified | Richmond, VA
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					$ 6,933,000
Net Book Value		$ 4,109,000	$ 4,109,000		4,109,000
Realized gain (loss) on sale of real estate, net					$ 2,824,000
Properties | property		1	1		1
Units Sold | property					0
Units Remaining | property					0
2019 Disposal Properties
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds						15,665,000
Net Book Value				16,603,000		16,603,000
Realized gain (loss) on sale of real estate, net						(938,000)
2019 Disposal Properties | Condominium | Las Vegas, NV
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds						0
Net Book Value				$ 0		0
Realized gain (loss) on sale of real estate, net						$ 0
Properties | property				0		0
Units Sold | property						0
Units Remaining | property						1
2019 Disposal Properties | Condominium | Miami, FL
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds						$ 3,917,000
Net Book Value				$ 3,550,000		3,550,000
Realized gain (loss) on sale of real estate, net						$ 367,000
Properties | property				0		0
Units Sold | property						13
Units Remaining | property						9
2019 Disposal Properties | Diversified | Wayne, NJ
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds						$ 1,729,000
Net Book Value				$ 4,799,000		4,799,000
Realized gain (loss) on sale of real estate, net						$ (3,070,000)
Properties | property				1		1
Units Sold | property						0
Units Remaining | property						0
2019 Disposal Properties | Diversified | Grand Rapids, Michigan
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds						$ 10,019,000
Net Book Value				$ 8,254,000		8,254,000
Realized gain (loss) on sale of real estate, net						$ 1,765,000
Properties | property				1		1
Units Sold | property						0
Units Remaining | property						0

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES - Investments in Unconsolidated Joint Ventures (Details) - USD ($) $ in Thousands		Jun. 30, 2020	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated joint ventures	[1]	$ 48,919	$ 48,433
Grace Lake JV, LLC
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated joint ventures		3,496	3,047
24 Second Avenue Holdings LLC
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated joint ventures		$ 45,423	$ 45,386

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES - Summary of Allocated Earnings (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Schedule of Equity Method Investments [Line Items]
Earnings (loss) from investment in unconsolidated joint ventures	$ 471	$ 1,564	$ 912	$ 2,522
Grace Lake JV, LLC
Schedule of Equity Method Investments [Line Items]
Earnings (loss) from investment in unconsolidated joint ventures	$ 263	618	449	1,032
24 Second Avenue Holdings LLC
Schedule of Equity Method Investments [Line Items]
Earnings (loss) from investment in unconsolidated joint ventures		$ 946	$ 463	$ 1,490

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INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES - Additional Information (Details)	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2012	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) property	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 22, 2013
Schedule of Equity Method Investments [Line Items]
Distributions from operations of investment in unconsolidated joint ventures				$ 0	$ 3,067,000
Grace Lake JV, LLC
Schedule of Equity Method Investments [Line Items]
Percentage of equity kicker received with right to convert upon capital event	25.00%
Preferred return used to determine distribution of excess cash flow				8.25%
Percentage of distribution of all excess cash flows and all disposition proceeds upon any sale entitled after consideration of preferred return and return of equity remaining in the property to operating partner				25.00%
Distributions from operations of investment in unconsolidated joint ventures				$ 0	3,100,000
Grace Lake JV, LLC | Ladder Capital Financial Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of investment of operating partner				81.00%
Grace Lake JV, LLC | LP Units
Schedule of Equity Method Investments [Line Items]
Ownership interest							19.00%
Grace Lake JV, LLC | Limited liability company
Schedule of Equity Method Investments [Line Items]
Ownership interest		19.00%		19.00%
24 Second Avenue Holdings LLC
Schedule of Equity Method Investments [Line Items]
Income (expenses) from investment		$ 208,000	$ 900,000	$ 500,000	1,500,000
Interest costs capitalized					$ 100,000
24 Second Avenue Holdings LLC | Apartment Building
Schedule of Equity Method Investments [Line Items]
Number of real estate properties | property		30		30
24 Second Avenue Holdings LLC | Apartment Building | Real Estate Property Sold
Schedule of Equity Method Investments [Line Items]
Number of real estate properties, under contract | property		19		19
Real estate properties, under contract		$ 49,600,000		$ 49,600,000
24 Second Avenue Holdings LLC | Other
Schedule of Equity Method Investments [Line Items]
Number of real estate properties | property		1		1
24 Second Avenue Holdings LLC | Mezzanine Loan
Schedule of Equity Method Investments [Line Items]
Committed amount on credit agreement						$ 6,500,000
24 Second Avenue Holdings LLC | Co-venturer
Schedule of Equity Method Investments [Line Items]
Loans payable outstanding from unconsolidated joint venture		$ 11,300,000		$ 11,300,000
24 Second Avenue Holdings LLC | Co-venturer | Construction Loan
Schedule of Equity Method Investments [Line Items]
Common equity interest						35,000,000.0
Preferred equity position						35,000,000.0
Loan refinance						50,400,000
Committed amount on credit agreement						$ 48,100,000
Remaining capital commitment to operating partner		$ 0		$ 0

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INVESTMENT IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES - Results from Operations of the Unconsolidated Joint Ventures (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Jun. 30, 2020		Jun. 30, 2019	Jun. 30, 2020		Jun. 30, 2019	Mar. 31, 2020	Dec. 31, 2019		Mar. 31, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Total assets	[1]	$ 6,609,550			$ 6,609,550				$ 6,669,152
Total liabilities	[1]	5,101,170			5,101,170				5,030,175
Partners’/members’ capital		1,508,380	[1]	$ 1,648,074	1,508,380	[1]	$ 1,648,074	$ 1,500,827	1,638,977	[1]	$ 1,644,243	$ 1,643,635
Total expenses		31,052		38,069	73,262		84,457
Net income (loss)		(5,193)		36,073	(19,254)		60,604
Equity Method Investment, Nonconsolidated Investee or Group of Investees | 24 Second Avenue Holdings LLC
Schedule of Equity Method Investments [Line Items]
Total assets		113,414			113,414				118,727
Total liabilities		77,277			77,277				78,762
Partners’/members’ capital		36,137			36,137				$ 39,965
Total revenues		4,294		6,330	8,770		11,030
Total expenses		3,450		3,571	7,424		7,434
Net income (loss)		$ 844		$ 2,759	$ 1,346		$ 3,596

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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DEBT OBLIGATIONS, NET - Schedule of Company's Debt Obligations (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($) Extension	Dec. 31, 2019 USD ($) Extension	Feb. 26, 2020 USD ($) Extension	Feb. 14, 2020 USD ($)
Assets Sold under Agreements to Repurchase [Line Items]
Debt Obligations Outstanding	$ 1,295,029,000	$ 1,815,934,000
Debt obligations		4,953,514,000
Carrying Amount of Collateral	0	0
Committed Loan Repurchase Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	1,550,000,000	1,750,000,000
Debt Obligations Outstanding	381,075,000	702,264,000
Committed but Unfunded	1,168,925,000	1,047,736,000
Carrying Amount of Collateral	627,038,000	1,149,281,000
Fair Value of Collateral	627,231,000	1,152,250,000
Committed Loan Repurchase Facility | Maturing on 19 December 2022
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	500,000,000	600,000,000.0		$ 500,000,000.0
Debt Obligations Outstanding	114,679,000	183,828,000
Committed but Unfunded	385,321,000	416,172,000
Carrying Amount of Collateral	179,332,000	287,974,000
Fair Value of Collateral	$ 179,332,000	$ 288,210,000
Number of extension maturity periods | Extension	2	2
Length of extension options	12 months	12 months
Committed Loan Repurchase Facility | Maturing On February 26 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 250,000,000
Debt Obligations Outstanding	0
Committed but Unfunded	250,000,000
Carrying Amount of Collateral	0
Fair Value of Collateral	$ 0
Number of extension maturity periods | Extension	3
Length of extension options	12 months
Committed Loan Repurchase Facility | Maturing on 19 December 2020
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 300,000,000	$ 300,000,000
Debt Obligations Outstanding	144,565,000	248,182,000
Committed but Unfunded	155,435,000	51,818,000
Carrying Amount of Collateral	251,788,000	382,778,000
Fair Value of Collateral	$ 251,788,000	$ 382,778,000
Number of extension maturity periods | Extension	3	3
Length of extension options	364 days	364 days
Committed Loan Repurchase Facility | Maturing on 6 November 2022
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 300,000,000	$ 300,000,000
Debt Obligations Outstanding	65,702,000	98,678,000
Committed but Unfunded	234,298,000	201,322,000
Carrying Amount of Collateral	100,597,000	175,000,000
Fair Value of Collateral	$ 100,704,000	$ 175,270,000
Number of extension maturity periods | Extension	1	1
Length of extension options	12 months	12 months
Number of additional extension maturity periods | Extension	2	2
Length of additional extension maturity periods	6 months	6 months
Committed Loan Repurchase Facility | Maturing On 31 December 2022
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 100,000,000
Debt Obligations Outstanding	38,228,000
Committed but Unfunded	61,772,000
Carrying Amount of Collateral	64,721,000
Fair Value of Collateral	$ 64,807,000
Number of extension maturity periods | Extension	2
Length of extension options	12 months
Committed Loan Repurchase Facility | Maturing On 24 March 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 100,000,000
Debt Obligations Outstanding	17,901,000
Committed but Unfunded	82,099,000
Carrying Amount of Collateral	30,600,000
Fair Value of Collateral	$ 30,600,000
Length of extension options	364 days
Committed Loan Repurchase Facility | Maturing on 23 December 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing		$ 500,000,000.0
Committed Loan Repurchase Facility | Maturing On 24 May 2020
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing		350,000,000
Debt Obligations Outstanding		70,697,000
Committed but Unfunded		279,303,000
Carrying Amount of Collateral		101,590,000
Fair Value of Collateral		$ 103,868,000
Number of extension maturity periods | Extension		1
Length of extension options		12 months
Committed Loan Repurchase Facility | Maturing on 3 January 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing		$ 100,000,000
Debt Obligations Outstanding		9,952,000
Committed but Unfunded		90,048,000
Carrying Amount of Collateral		75,628,000
Fair Value of Collateral		$ 75,813,000
Number of extension maturity periods | Extension		2
Length of extension options		12 months
Committed Loan Repurchase Facility | Maturing on 24 December 2020
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing		$ 100,000,000
Debt Obligations Outstanding		90,927,000
Committed but Unfunded		9,073,000
Carrying Amount of Collateral		126,311,000
Fair Value of Collateral		$ 126,311,000
Length of extension options		364 days
Committed Securities Repurchase Facility | Maturing on 23 December 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 785,321,000	$ 400,000,000.0
Debt Obligations Outstanding	451,342,000	42,751,000
Committed but Unfunded	333,979,000	357,249,000
Carrying Amount of Collateral	576,924,000	52,691,000
Fair Value of Collateral	576,924,000	52,691,000
Uncommitted Securities Repurchase Facility | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Debt Obligations Outstanding	462,612,000	1,070,919,000
Carrying Amount of Collateral	596,230,000	1,188,440,000
Fair Value of Collateral	596,230,000	1,188,440,000
Restricted securities held-to-maturity	2,200,000	2,200,000
Total Repurchase Facilities
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	1,950,000,000	2,150,000,000
Debt Obligations Outstanding	1,295,029,000	1,815,934,000
Committed but Unfunded	1,502,904,000	1,404,985,000
Carrying Amount of Collateral	1,800,192,000	2,390,412,000
Fair Value of Collateral	1,800,385,000	2,393,381,000
Revolving Credit Facility | Maturing February 11 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	266,430,000
Debt Obligations Outstanding	266,430,000
Committed but Unfunded	$ 0
Number of extension maturity periods | Extension	4
Length of extension options	12 months
Revolving Credit Facility | Maturing 11 February 2020
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing		266,430,000
Debt Obligations Outstanding		0
Committed but Unfunded		$ 266,430,000
Number of extension maturity periods | Extension		4
Length of extension options		12 months
Mortgage Loan Financing | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	$ 805,431,000	$ 812,606,000
Debt Obligations Outstanding	805,431,000	812,606,000
Committed but Unfunded	0	0
Carrying Amount of Collateral	959,766,000	988,857,000
Fair Value of Collateral	1,172,268,000	1,192,106,000
Secured Financing Facility
Assets Sold under Agreements to Repurchase [Line Items]
Unamortized debt issuance costs		(9,705,000)
Secured Financing Facility | Maturing On 6 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	206,350,000
Debt Obligations Outstanding	188,687,000
Committed but Unfunded	0
Carrying Amount of Collateral	335,237,000
Fair Value of Collateral	335,675,000
Unamortized debt issuance costs	(9,700,000)
Unamortized debt discount	8,000,000.0
CLO Debt
Assets Sold under Agreements to Repurchase [Line Items]
Unamortized debt issuance costs		(4,808,000)
CLO Debt | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Unamortized debt issuance costs	(4,800,000)
CLO Debt | Maturing On 16 May 2024
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	304,413,000
Debt Obligations Outstanding	299,605,000
Carrying Amount of Collateral	469,505,000
Fair Value of Collateral	469,587,000
Unamortized debt issuance costs	(4,800,000)
Borrowings from the FHLB | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing	1,500,000,000	1,945,795,000
Debt Obligations Outstanding	360,790,000	1,073,500,000
Committed but Unfunded	1,139,210,000	872,295,000
Carrying Amount of Collateral	526,151,000	1,107,188,000
Fair Value of Collateral	528,650,000	1,113,811,000
Restricted securities held-to-maturity	9,400,000
Senior Unsecured Notes
Assets Sold under Agreements to Repurchase [Line Items]
Unamortized debt issuance costs		(15,275,000)
Senior Unsecured Notes | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Debt issued	1,752,817,000	1,166,201,000
Senior Unsecured Notes	1,737,542,000	1,157,833,000
Committed but Unfunded	0	0
Restricted securities held-to-maturity		9,900,000
Unamortized debt issuance costs	(15,300,000)	(8,400,000)
Total Debt Obligations
Assets Sold under Agreements to Repurchase [Line Items]
Debt issued	6,785,441,000	6,341,032,000
Debt obligations	4,953,514,000	4,859,873,000
Committed but Unfunded	2,642,114,000	2,543,710,000
Carrying Amount of Collateral	4,090,851,000	4,486,457,000
Fair Value of Collateral	4,306,565,000	$ 4,699,298,000
Purchase Right | Maturing On 6 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Unamortized debt issuance costs	$ (7,958,000)
Minimum | Committed Loan Repurchase Facility | Maturing on 19 December 2022
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	1.93%	3.24%
Minimum | Committed Loan Repurchase Facility | Maturing On February 26 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing			$ 250,000,000.0
Interest rate	0.00%
Number of extension maturity periods | Extension			3
Minimum | Committed Loan Repurchase Facility | Maturing on 19 December 2020
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	1.94%	3.49%
Minimum | Committed Loan Repurchase Facility | Maturing on 6 November 2022
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	1.94%	3.50%
Minimum | Committed Loan Repurchase Facility | Maturing On 31 December 2022
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.19%
Minimum | Committed Loan Repurchase Facility | Maturing On 24 March 2021
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.68%
Minimum | Committed Loan Repurchase Facility | Maturing On 24 May 2020
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		3.71%
Minimum | Committed Loan Repurchase Facility | Maturing on 3 January 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		3.96%
Minimum | Committed Loan Repurchase Facility | Maturing on 24 December 2020
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		3.74%
Minimum | Committed Securities Repurchase Facility | Maturing on 23 December 2021
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.89%	2.50%
Minimum | Uncommitted Securities Repurchase Facility | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	1.42%	2.17%
Minimum | Revolving Credit Facility | Maturing February 11 2021
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	3.00%
Minimum | Mortgage Loan Financing | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	3.75%	3.75%
Minimum | Secured Financing Facility | Maturing On 6 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	10.75%
Minimum | CLO Debt | Maturing On 16 May 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	5.50%
Minimum | Borrowings from the FHLB | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	44.00%	1.47%
Minimum | Senior Unsecured Notes | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	4.25%	5.25%
Maximum | Committed Loan Repurchase Facility | Maturing on 19 December 2022
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.18%	3.74%
Maximum | Committed Loan Repurchase Facility | Maturing On February 26 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing			$ 350,000,000.0
Interest rate	0.00%
Maximum | Committed Loan Repurchase Facility | Maturing on 19 December 2020
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.94%	3.74%
Maximum | Committed Loan Repurchase Facility | Maturing on 6 November 2022
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.43%	3.99%
Maximum | Committed Loan Repurchase Facility | Maturing On 31 December 2022
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.31%
Maximum | Committed Loan Repurchase Facility | Maturing On 24 March 2021
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.68%
Maximum | Committed Loan Repurchase Facility | Maturing on 23 December 2021
Assets Sold under Agreements to Repurchase [Line Items]
Committed Financing			$ 500,000,000.0
Maximum | Committed Loan Repurchase Facility | Maturing On 24 May 2020
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		3.81%
Maximum | Committed Loan Repurchase Facility | Maturing on 3 January 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		3.75%
Maximum | Committed Loan Repurchase Facility | Maturing on 24 December 2020
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		3.80%
Maximum | Committed Securities Repurchase Facility | Maturing on 23 December 2021
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	2.44%	2.56%
Maximum | Uncommitted Securities Repurchase Facility | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	4.81%	3.54%
Maximum | Revolving Credit Facility | Maturing February 11 2021
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	3.00%
Maximum | Mortgage Loan Financing | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	6.75%	6.75%
Maximum | Secured Financing Facility | Maturing On 6 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	10.75%
Maximum | CLO Debt | Maturing On 16 May 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	550.00%
Maximum | Borrowings from the FHLB | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	295.00%	2.95%
Maximum | Senior Unsecured Notes | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	5.88%	5.88%

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DEBT OBLIGATIONS, NET - Schedule of Maturities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Long-term Debt, Fiscal Year Maturity [Abstract]
2020 (last 6 months)		$ 1,494,949
2021		527,569
2022		642,014
2023		351,436
2024		612,695
Thereafter		1,358,119
Subtotal		4,986,782
Premiums included in mortgage loan financing		5,002
Debt obligations		4,953,514
Senior Unsecured Notes
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs		(15,275)
Secured Financing Facility
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs		(9,705)
CLO Debt
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs		(4,808)
Mortgage Loan Financing
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs		$ (524)
Length of extension options	1 year

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DEBT OBLIGATIONS, NET - Committed Loan and Securities Repurchase Facilities (Details)	Jun. 30, 2020 USD ($) Extension	Mar. 23, 2020 USD ($)	Feb. 26, 2020 USD ($) Extension	Feb. 14, 2020 USD ($)	Dec. 31, 2019 USD ($) Extension
Debt Instrument [Line Items]
Equity restricted as payment as a dividend	$ 849,000,000.0
Committed Loan Repurchase Facility
Debt Instrument [Line Items]
Committed Financing	1,550,000,000				$ 1,750,000,000
Maturing on 19 December 2022 | Committed Loan Repurchase Facility
Debt Instrument [Line Items]
Committed Financing	$ 500,000,000			$ 500,000,000.0	$ 600,000,000.0
Number of extension maturity periods | Extension	2				2
Maturing On February 26 2021 | Committed Loan Repurchase Facility
Debt Instrument [Line Items]
Committed Financing	$ 250,000,000
Number of extension maturity periods | Extension	3
Maturing On February 26 2021 | Committed Loan Repurchase Facility | Minimum
Debt Instrument [Line Items]
Committed Financing			$ 250,000,000.0
Number of extension maturity periods | Extension			3
Maturing On February 26 2021 | Committed Loan Repurchase Facility | Maximum
Debt Instrument [Line Items]
Committed Financing			$ 350,000,000.0
Maturing on 23 December 2021 | Committed Loan Repurchase Facility
Debt Instrument [Line Items]
Committed Financing					$ 500,000,000.0
Committed amount on credit agreement		$ 900,000,000.0
Maturing on 23 December 2021 | Committed Loan Repurchase Facility | Maximum
Debt Instrument [Line Items]
Committed Financing			$ 500,000,000.0
Maturing on 23 December 2021 | Committed Securities Repurchase Facility
Debt Instrument [Line Items]
Committed Financing	$ 785,321,000				$ 400,000,000.0
Committed amount on credit agreement		$ 900,000,000.0

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DEBT OBLIGATIONS, NET - Secured Financing Facility (Details) - USD ($)			6 Months Ended
		Apr. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Issuance of purchase right			$ 8,425,000	$ 0
Debt obligations, net	[1]		4,953,514,000		$ 4,859,873,000
Purchase Right | Maturing On 6 May 2023
Debt Instrument [Line Items]
Unamortized debt issuance costs			(7,958,000)
Secured Financing Facility
Debt Instrument [Line Items]
Debt obligations, net			188,700,000
Unamortized debt issuance costs					$ (9,705,000)
Secured Financing Facility | Maturing On 6 May 2023
Debt Instrument [Line Items]
Issuance Of Purchase Rights			8,000,000.0
Unamortized debt issuance costs			$ (9,700,000)
Common Class A
Debt Instrument [Line Items]
Common stock, authorized (in shares)			600,000,000		600,000,000
Common stock, par value (in dollars per share)			$ 0.001		$ 0.001
Non-Recourse Notes | Koch Real Estate Investments, LLC | Minimum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Stated interest rate on debt instrument		0.75%
Non-Recourse Notes | Koch Real Estate Investments, LLC | Maximum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Stated interest rate on debt instrument		10.00%
Non-Recourse Notes | Secured Debt | Koch Real Estate Investments, LLC
Debt Instrument [Line Items]
Committed amount on credit agreement		$ 206,400,000
Minimum interest premium		39,200,000
Non-Recourse Notes | Secured Debt | Koch Real Estate Investments, LLC | Purchase Right
Debt Instrument [Line Items]
Issuance of purchase right		200,900,000
Debt proceeds allocated to the originally issued debt obligation		192,500,000
Issuance Of Purchase Rights		$ (8,400,000)
Non-Recourse Notes | Secured Debt | Koch Real Estate Investments, LLC | Common Class A
Debt Instrument [Line Items]
Common stock, authorized (in shares)		4,000,000.0
Common stock, par value (in dollars per share)		$ 8.00

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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DEBT OBLIGATIONS, NET - Collateralized Loan Obligation Debt (Details) - USD ($) $ in Thousands		Apr. 27, 2020	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Debt obligations, net	[1]		$ 4,953,514	$ 4,859,873
Loans financed		$ 481,300
Advance rate		64.50%
Subordinate and controlling interest		35.50%
CLO Debt
Debt Instrument [Line Items]
Unamortized debt issuance costs				$ (4,808)
Various Date | CLO Debt
Debt Instrument [Line Items]
Debt obligations, net			299,600
Unamortized debt issuance costs			$ (4,800)
Non-Recourse Notes | CLO Debt
Debt Instrument [Line Items]
Debt obligations, net		$ 310,200

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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DEBT OBLIGATIONS, NET - Senior Unsecured Notes (Details) - USD ($)			3 Months Ended		6 Months Ended
	Jan. 30, 2020	Feb. 06, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Sep. 25, 2017	Mar. 16, 2017	Aug. 01, 2014
Debt Instrument [Line Items]
Gain (loss) on extinguishment/defeasance of debt		$ (1,100,000)	$ 19,017,000	$ 0	$ 21,077,000	$ (1,070,000)
Amortization expense			(1,681,000)	$ (2,213,000)	(3,392,000)	$ (4,730,000)
Senior Unsecured Notes
Debt Instrument [Line Items]
Debt retired			139,100,000		139,100,000
Gain (loss) on extinguishment/defeasance of debt					19,000,000.0
Amortization expense					(1,500,000)
Senior Notes Due 2027 | Senior Unsecured Notes
Debt Instrument [Line Items]
Loan refinance	$ 750,000,000.0		658,000,000.0		658,000,000.0
Stated interest rate on debt instrument	4.25%
Debt instrument, minimum number of days to give notice for redemption without penalty	15 days
Debt instrument, maximum number of days to give notice for redemption without penalty	60 days
Debt retired			92,000,000.0		92,000,000.0
Repurchase price			78,400,000		78,400,000
Gain (loss) on extinguishment/defeasance of debt					12,300,000
Unamortized debt issuance costs					(1,300,000)
Senior Notes Due 2025 | Senior Unsecured Notes
Debt Instrument [Line Items]
Loan refinance			350,800,000		350,800,000		$ 400,000,000.0
Stated interest rate on debt instrument							5.25%
Debt retired			49,200,000		49,200,000
Repurchase price			42,600,000		42,600,000
Gain (loss) on extinguishment/defeasance of debt					6,200,000
Unamortized debt issuance costs					(500,000)
Senior Notes Due 2022 | Senior Unsecured Notes
Debt Instrument [Line Items]
Loan refinance			485,600,000		485,600,000			$ 500,000,000.0
Stated interest rate on debt instrument								5.25%
Debt retired			14,400,000		14,400,000
Repurchase price			13,800,000		13,800,000
Gain (loss) on extinguishment/defeasance of debt					600,000
Unamortized debt issuance costs					(100,000)
Senior Notes Due 2021 | Senior Unsecured Notes
Debt Instrument [Line Items]
Senior Unsecured Notes			1,700,000,000		1,700,000,000
Loan refinance			258,500,000		258,500,000				$ 300,000,000.0
Stated interest rate on debt instrument									5.875%
Debt retired			7,700,000		7,700,000
Repurchase price			$ 7,500,000		7,500,000
Gain (loss) on extinguishment/defeasance of debt					200,000
Unamortized debt issuance costs					$ (20,000.0)

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DEBT OBLIGATIONS, NET - Financing Strategy in Current Market Conditions (Details)				3 Months Ended
		Jul. 27, 2020 USD ($) counterparty	Apr. 27, 2020 USD ($)	Jun. 30, 2020 USD ($)	Apr. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Amount paid down, FHLB Borrowings				$ 646,800,000
Debt obligations, net	[1]			4,953,514,000		$ 4,859,873,000
Loans financed			$ 481,300,000
Advance rate			64.50%
Cash, cash equivalents and restricted cash				874,004,000		$ 355,746,000	$ 215,433,000	$ 98,450,000
Subsequent Event
Debt Instrument [Line Items]
FHLB outstanding		$ 360,800,000
Prepayment penalties		6,500,000
Cash, cash equivalents and restricted cash		750,000,000.0
Senior Unsecured Notes
Debt Instrument [Line Items]
Amount paid down				155,900,000
Senior Notes Due 2027 | Senior Unsecured Notes
Debt Instrument [Line Items]
Amount paid down				275,800,000
Senior Notes Due 2027 | Senior Unsecured Notes | Subsequent Event
Debt Instrument [Line Items]
Debt repurchase amount outstanding		374,900,000
Outstanding securities repurchase financing		$ 834,400,000
Bank counterparties | counterparty		5
Senior Notes Due 2027 | Senior Unsecured Notes | Subsequent Event | Maximum
Debt Instrument [Line Items]
Repurchase financing, maturity period		17 months
Senior Notes Due 2027 | Senior Unsecured Notes | Subsequent Event | Minimum
Debt Instrument [Line Items]
Repurchase financing, maturity period		3 days
Non-Recourse Notes | CLO Debt
Debt Instrument [Line Items]
Debt obligations, net			$ 310,200,000
Non-Recourse Notes | Secured Debt | Koch Real Estate Investments, LLC
Debt Instrument [Line Items]
Non-mark to market financing facility					$ 206,400,000
Maturing February 11 2021 | Revolving Credit Facility
Debt Instrument [Line Items]
Committed financing				$ 266,430,000

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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DERIVATIVE INSTRUMENTS - Schedule of Derivatives Outstanding (Details) - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Notional		$ 159,471	$ 409,771
Fair value, asset	[1]	380	693
Fair value, liability		0	0
1 Month LIBOR
Derivative [Line Items]
Notional		69,571	69,571
Fair value, asset		0	0
Fair value, liability		$ 0	$ 0
Remaining maturity		10 months 9 days	4 months 9 days
5-year Swap
Derivative [Line Items]
Notional		$ 24,400	$ 46,000
Fair value, asset		103	158
Fair value, liability		$ 0	$ 0
Remaining maturity		3 months	3 months
10-year Swap
Derivative [Line Items]
Notional		$ 61,000	$ 149,800
Fair value, asset		258	516
Fair value, liability		$ 0	$ 0
Remaining maturity		3 months	3 months
5-year U.S. Treasury Note
Derivative [Line Items]
Notional		$ 4,500	$ 1,100
Fair value, asset		19	4
Fair value, liability		$ 0	$ 0
Remaining maturity		3 months	3 months
Futures
Derivative [Line Items]
Notional		$ 89,900	$ 196,900
Fair value, asset		380	678
Fair value, liability		$ 0	0
S&P 500 Put Options
Derivative [Line Items]
Notional			143,300
Fair value, asset			15
Fair value, liability			$ 0
Remaining maturity			18 days
Credit Derivatives
Derivative [Line Items]
Notional			$ 143,300
Fair value, asset			15
Fair value, liability			$ 0

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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DERIVATIVE INSTRUMENTS - Schedule of Realized Gains (Losses) on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative [Line Items]
Unrealized Gain/(Loss)	$ (570)	$ (980)	$ (187)	$ 1,511
Realized Gain/(Loss)	(243)	(14,477)	(16,061)	(28,002)
Net Result from Derivative Transactions	(813)	(15,457)	(16,248)	(26,491)
Futures
Derivative [Line Items]
Unrealized Gain/(Loss)	(570)	(1,046)	(298)	1,511
Realized Gain/(Loss)	(326)	(14,361)	(16,272)	(27,894)
Net Result from Derivative Transactions	(896)	(15,407)	(16,570)	(26,383)
Credit Derivatives
Derivative [Line Items]
Unrealized Gain/(Loss)	0	66	111	0
Realized Gain/(Loss)	83	(116)	211	(108)
Net Result from Derivative Transactions	$ 83	$ (50)	$ 322	$ (108)

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DERIVATIVE INSTRUMENTS - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Cash margins held as collateral for derivatives by counterparties	$ 1.7	$ 3.5

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OFFSETTING ASSETS AND LIABILITIES - Offsetting Assets (Details) - USD ($) $ in Thousands		Jun. 30, 2020	Dec. 31, 2019
Offsetting of derivative assets
Gross amounts of recognized assets		$ 380	$ 693
Gross amounts offset in the balance sheet		0	0
Net amounts of assets presented in the balance sheet	[1]	380	693
Gross amounts not offset in the balance sheet
Financial instruments		0	0
Cash collateral received/(posted)		0	0
Net amount		$ 380	$ 693

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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OFFSETTING ASSETS AND LIABILITIES - Offsetting Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Repurchase agreements
Gross amounts of recognized liabilities	$ 1,295,029	$ 1,815,934
Gross amounts offset in the balance sheet	0	0
Net amounts of liabilities presented in the balance sheet	1,295,029	1,815,934
Gross amounts not offset in the balance sheet
Financial instruments collateral	1,295,029	1,815,934
Cash collateral posted/(received)	0	0
Net amount	0	0
Total
Gross amounts of recognized liabilities	1,295,029	1,815,934
Gross amounts offset in the balance sheet	0	0
Net amounts of liabilities presented in the balance sheet	1,295,029	1,815,934
Gross amounts not offset in the balance sheet
Financial instruments collateral	1,295,029	1,815,934
Cash collateral posted/(received)	0	0
Net amount	$ 0	$ 0

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CONSOLIDATED VARIABLE INTEREST ENTITIES (Details) - USD ($)		Jun. 30, 2020		Mar. 31, 2020	Dec. 31, 2019		Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Restricted cash	[1]	$ 47,945,000			$ 297,575,000
Accrued interest receivable	[1]	18,783,000			21,066,000
Total assets	[1]	6,609,550,000			6,669,152,000
Debt obligations, net	[1]	4,953,514,000			4,859,873,000
Accrued expenses	[1]	55,616,000			72,397,000
Total liabilities	[1]	5,101,170,000			5,030,175,000
Total equity		1,508,380,000	[1]	$ 1,500,827,000	1,638,977,000	[1]	$ 1,648,074,000	$ 1,644,243,000	$ 1,643,635,000
Total liabilities and equity	[1]	6,609,550,000			$ 6,669,152,000
Variable Interest Entity, Primary Beneficiary
Restricted cash		8,649,072
Mortgage loan receivables held for investment, net, at amortized cost		469,505,178
Accrued interest receivable		1,769,859
Total assets		479,924,109
Debt obligations, net		299,604,861
Accrued expenses		697,612
Total liabilities		300,302,473
Net equity in VIEs (eliminated in consolidation)		179,621,636
Total equity		179,621,636
Total liabilities and equity		$ 479,924,109

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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EQUITY STRUCTURE AND ACCOUNTS - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Oct. 30, 2014
Class of Stock [Line Items]
Interest held in third parties	95.50%	89.80%
2014 Share Repurchase Authorization Program
Class of Stock [Line Items]
Remaining amount available for repurchase	$ 39,500,000
Percentage of aggregate common stock outstanding under Repurchase Program	4.20%
Closing price (in dollars per share)	$ 8.10
Series REIT LP Units
Class of Stock [Line Items]
Exchange of noncontrolling interest for common stock, units exchanged (in shares)	6,779,225	1,139,411
Series TRS LP Units
Class of Stock [Line Items]
Exchange of noncontrolling interest for common stock, units exchanged (in shares)	6,779,225	1,139,411
Common Class A
Class of Stock [Line Items]
Exchange of noncontrolling interest for common stock, units exchanged (in shares)	6,779,225
Exchange of noncontrolling interest for common stock (in shares)		1,139,411
Common Class A | 2014 Share Repurchase Authorization Program
Class of Stock [Line Items]
Additional authorizations					$ 50,000,000.0
Remaining amount available for repurchase	$ 39,450,000	$ 41,132,000	$ 41,132,000	$ 41,769,000
Common Class B
Class of Stock [Line Items]
Exchange of noncontrolling interest for common stock, units exchanged (in shares)	(6,779,225)
Exchange of noncontrolling interest for common stock (in shares)		(1,139,411)

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EQUITY STRUCTURE AND ACCOUNTS - Schedule of Repurchase of Treasury Stock Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Treasury Stock [Roll Forward]
Repurchases paid	$ (482)	$ (637)	$ (1,688)	$ (637)
2014 Share Repurchase Authorization Program
Treasury Stock [Roll Forward]
Remaining amount available for repurchase	39,500		$ 39,500
2014 Share Repurchase Authorization Program | Common Class A
Class of Stock [Line Items]
Purchase of treasury stock (in shares)			210,151	40,065
Treasury Stock [Roll Forward]
Remaining amount available for repurchase			$ 41,132	$ 41,769
Additional authorizations			0	0
Repurchases paid			(1,682)	(637)
Repurchases unsettled			0	0
Remaining amount available for repurchase	$ 39,450	$ 41,132	$ 39,450	$ 41,132

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EQUITY STRUCTURE AND ACCOUNTS - Dividends Declared (Details) - $ / shares					3 Months Ended		6 Months Ended
	May 28, 2020	Feb. 27, 2020	May 30, 2019	Feb. 27, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Common Class A
Class of Stock [Line Items]
Dividends per share of Class A common stock (in dollars per share)	$ 0.200	$ 0.340	$ 0.340	$ 0.340	$ 0.200	$ 0.340	$ 0.540	$ 0.680

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EQUITY STRUCTURE AND ACCOUNTS - Schedule of Dividends Declared and Paid (Details) - $ / shares					3 Months Ended		6 Months Ended
	May 28, 2020	Feb. 27, 2020	May 30, 2019	Feb. 27, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Common Class A
Class of Stock [Line Items]
Dividends per share of Class A common stock (in dollars per share)	$ 0.200	$ 0.340	$ 0.340	$ 0.340	$ 0.200	$ 0.340	$ 0.540	$ 0.680

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EQUITY STRUCTURE AND ACCOUNTS - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2020		Jun. 30, 2019	Jun. 30, 2020		Jun. 30, 2019
AOCI Attributable to Parent [Roll Forward]
Beginning Balance	$ 1,500,827		$ 1,644,243	$ 1,638,977	[1]	$ 1,643,635
Other comprehensive income (loss)	26,123		5,589	(51,884)		18,782
Exchange of noncontrolling interest for common stock				0		0
Rebalancing of ownership percentage between Company and Operating Partnership				0		0
Ending Balance	1,508,380	[1]	1,648,074	1,508,380	[1]	1,648,074
AOCI Attributable to Parent
AOCI Attributable to Parent [Roll Forward]
Beginning Balance	(65,920)		7,080	4,218		(4,649)
Other comprehensive income (loss)	23,612		5,007	(46,530)		16,738
Exchange of noncontrolling interest for common stock				(4,915)		65
Rebalancing of ownership percentage between Company and Operating Partnership				2,147		17
Ending Balance	(45,080)		12,171	(45,080)		12,171
Accumulated Other Comprehensive Income (Loss) of Noncontrolling Interests
AOCI Attributable to Parent [Roll Forward]
Beginning Balance				477		(588)
Other comprehensive income (loss)				(5,354)		2,044
Exchange of noncontrolling interest for common stock				4,915		(65)
Rebalancing of ownership percentage between Company and Operating Partnership				(2,147)		(17)
Ending Balance	(2,109)		1,374	(2,109)		1,374
Total Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent [Roll Forward]
Beginning Balance				4,695		(5,237)
Ending Balance	$ (47,189)		$ 13,545	$ (47,189)		$ 13,545

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

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NONCONTROLLING INTERESTS (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) Joint_Venture property
Consolidated Joint Venture
Noncontrolling Interest [Line Items]
Number of consolidated joint ventures | Joint_Venture	5
Consolidated Joint Venture | Isla Vista, CA | Student Housing
Noncontrolling Interest [Line Items]
Number of real estate properties | property	40
Property book value	$ 82.1
Consolidated Joint Venture | Richmond, VA | Office Building
Noncontrolling Interest [Line Items]
Number of real estate properties | property	11
Property book value	$ 72.4
Consolidated Joint Venture | Ewing, NJ | Single-Tenant Office Building
Noncontrolling Interest [Line Items]
Property book value	26.3
Consolidated Joint Venture | Lithia Springs, GA | Industrial
Noncontrolling Interest [Line Items]
Property book value	23.3
Consolidated Joint Venture | Miami, FL | Apartment Building
Noncontrolling Interest [Line Items]
Property book value	$ 37.3
Minimum | Consolidated Joint Venture | Noncontrolling Interest in Consolidated Joint Ventures
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership	10.00%
Maximum | Consolidated Joint Venture | Noncontrolling Interest in Consolidated Joint Ventures
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership	29.40%
Noncontrolling Interest in Operating Partnership
Noncontrolling Interest [Line Items]
Decrease in noncontrolling interest in Operating Partnership	$ 1.2

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EARNINGS PER SHARE - Net Income and Weighted Average Shares Outstanding (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Weighted average shares outstanding:
Basic (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Diluted (in shares)	106,809,987	105,892,420	106,569,892	105,742,589
Common Class A
Earnings Per Share
Basic Net income (loss) available for Class A common shareholders	$ (4,189)	$ 32,244	$ (19,918)	$ 54,419
Diluted Net income (loss) available for Class A common shareholders	$ (4,189)	$ 32,244	$ (19,918)	$ 54,419
Weighted average shares outstanding:
Basic (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Diluted (in shares)	106,809,987	105,892,420	106,569,892	105,742,589

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EARNINGS PER SHARE - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Denominator:
Weighted average number of shares of Class A common stock outstanding (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Basic net income (loss) per share of Class A common stock (in dollars per share)	$ (0.04)	$ 0.31	$ (0.19)	$ 0.52
Denominator:
Weighted average number of shares of Class A common stock outstanding (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Diluted weighted average number of shares of Class A common stock outstanding (in shares)	106,809,987	105,892,420	106,569,892	105,742,589
Diluted net income (loss) per share of Class A common stock (in dollars per share)	$ (0.04)	$ 0.30	$ (0.19)	$ 0.51
Common Class A
Numerator:
Net income (loss) attributable to Class A common shareholders	$ (4,189)	$ 32,244	$ (19,918)	$ 54,419
Denominator:
Weighted average number of shares of Class A common stock outstanding (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Basic net income (loss) per share of Class A common stock (in dollars per share)	$ (0.04)	$ 0.31	$ (0.19)	$ 0.52
Numerator:
Net income (loss) attributable to Class A common shareholders	$ (4,189)	$ 32,244	$ (19,918)	$ 54,419
Amounts attributable to operating partnership’s share of Ladder Capital Corp net income (loss)	0	0	0	0
Additional corporate tax (expense) benefit	0	0	0	0
Diluted net income (loss) attributable to Class A common shareholders	$ (4,189)	$ 32,244	$ (19,918)	$ 54,419
Denominator:
Weighted average number of shares of Class A common stock outstanding (in shares)	106,809,987	105,511,385	106,569,892	104,888,925
Shares issuable relating to converted Class B common shareholders (in shares)	0	0	0	0
Diluted weighted average number of shares of Class A common stock outstanding (in shares)	106,809,987	105,892,420	106,569,892	105,742,589
Diluted net income (loss) per share of Class A common stock (in dollars per share)	$ (0.04)	$ 0.30	$ (0.19)	$ 0.51
Restricted Stock | Common Class A
Denominator:
Incremental shares of stock based compensation (in shares)	0	381,035	0	853,664
Stock Options | Common Class A
Denominator:
Incremental shares of stock based compensation (in shares)	0	0	0	0

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STOCK BASED AND OTHER COMPENSATION PLANS - Stock Based Compensation Plans Summary (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized equity based compensation expense	$ 2,712	$ 3,469	$ 16,738	$ 14,761
Stock Options Exercised	270		270
Bonus Expense	0	7,717	(30)	14,501
Total	3,273	11,088	15,401	29,966
Phantom Equity Investment Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized equity based compensation expense	$ 561	$ (98)	$ (1,577)	$ 704

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STOCK BASED AND OTHER COMPENSATION PLANS - Summary of Grants (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares/Options (in shares)			1,466,337
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Options (in shares)	0	0	0	12,073
Common Class A | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares/Options (in shares)	0	4,568	1,466,337	1,545,569
Weighted Average Fair Value Per Share (in dollars per share)	$ 0	$ 16.42	$ 18.72	$ 17.56
Common Class A | Dividend Declared
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares/Options (in shares)	0	0	0	11,113
Weighted Average Fair Value Per Share (in dollars per share)	$ 0	$ 0	$ 0	$ 16.61

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STOCK BASED AND OTHER COMPENSATION PLANS - Nonvested Shares Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restricted Stock
Number of Shares Nonvested Other than Options [Roll Forward]
Nonvested/Outstanding (in shares)			1,436,683
Granted (in shares)			1,466,337
Vested (in shares)			(1,209,771)
Forfeited (in shares)			(24,089)
Nonvested/Outstanding (in shares)	1,669,160		1,669,160
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Nonvested/Outstanding (in shares)			994,208
Granted (in shares)	0	0	0	12,073
Exercised (in shares)			(83,845)
Forfeited (in shares)			0
Expired (in shares)			0
Nonvested/Outstanding (in shares)	910,363		910,363
Exercisable (in shares)	910,363		910,363

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STOCK BASED AND OTHER COMPENSATION PLANS - Additional Information (Details)						3 Months Ended		6 Months Ended
	Mar. 26, 2020 shares	Feb. 18, 2020 USD ($) installment shares	Feb. 06, 2020 USD ($)	Feb. 18, 2019 shares	Feb. 07, 2019 USD ($)	Jun. 30, 2020 USD ($) security shares	Jun. 30, 2019 USD ($) shares	Jun. 30, 2020 USD ($) security shares	Jun. 30, 2019 USD ($) shares	Jun. 19, 2017 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $						$ 21,000,000.0		$ 21,000,000.0
Period of recognition for unrecognized compensation costs								26 months 24 days
Remaining vesting period								32 months
Aggregate value of awards granted | $		$ 12,500,000
Accrued bonuses | $			$ 55,200,000		$ 61,400,000
Equity based compensation | $			$ 27,000,000.0		$ 26,600,000
Bonus expense | $						2,712,000	$ 3,469,000	$ 16,738,000	$ 14,761,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted shares granted (in shares)								1,466,337
Forfeited (in shares)								24,089
2014 Omnibus Incentive Plan | Management Grantees | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reversal of previous compensation expense | $						(1,000,000.0)		$ (1,000,000.0)
Incremental compensation cost | $						$ 100,000		$ 100,000
Number of employees eligible for performance share waiver | security						48		48
2014 Omnibus Incentive Plan | Management Grantees | Restricted Stock | Time Based Vesting on Three Year Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of installments in which awards are vested | installment		3
Bonus Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Bonus expense | $						$ 0	$ 7,700,000	$ 0	$ 14,500,000
Common Class A | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of installments in which awards are vested | installment		3
Number of restricted shares granted (in shares)						0	4,568	1,466,337	1,545,569
Common Class A | Board of Directors | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted shares granted (in shares)		24,036
Vesting period		1 year
Forfeited (in shares)	5,803
Grant date fair value | $		$ 400,000
Common Class A | Non-Management Grantee | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of installments in which awards are vested | installment		3
Aggregate value of awards granted | $		$ 14,500,000
Number of restricted shares granted (in shares)		775,100
Vesting percentage		50.00%
Common Class A | 2014 Omnibus Incentive Plan | Restricted Stock | Period 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected to vest (in shares)										1,775
Common Class A | 2014 Omnibus Incentive Plan | Restricted Stock | Period 3
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected to vest (in shares)										1,775
Common Class A | 2014 Omnibus Incentive Plan | Restricted Stock | Period 4
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected to vest (in shares)										1,775
Common Class A | 2014 Omnibus Incentive Plan | Restricted Stock | Period 5
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected to vest (in shares)										1,775
Common Class A | 2014 Omnibus Incentive Plan | Restricted Stock | Period 6
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected to vest (in shares)										1,775
Common Class A | 2014 Omnibus Incentive Plan | Restricted Stock | Period 7
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected to vest (in shares)										1,775
Common Class A | 2014 Omnibus Incentive Plan | Management Grantees | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted shares granted (in shares)				667,201

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Values of Financial Instruments (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jan. 01, 2020 USD ($)
Assets:
Fair Value	$ 3,041,103	$ 3,451,739
Allowance for loan losses	(49,102)	(20,500)	$ (11,600)
Liabilities:
Fair Value	$ 4,266,239	$ 4,943,914
Total mortgage loan receivables held for investment, net, at amortized cost
Liabilities:
Period of short interest rate reset risk	30 days	30 days
CLO debt
Liabilities:
Period of short interest rate reset risk	30 days	30 days
Recurring
Assets:
Fair Value	$ 1,495,264	$ 1,709,586
Recurring | CMBS | Internal Model Third Party Inputs Valuation Technique
Assets:
Outstanding Face Amount	1,496,090	1,640,597
Amortized Cost Basis/Purchase Price	1,495,892	1,640,905
Fair Value	$ 1,447,338	$ 1,644,322
Liabilities:
Financial instruments, measurement input	0.0157	0.0308
Weighted average remaining maturity/duration	2 years 3 months 7 days	2 years 4 months 28 days
Recurring | CMBS interest-only | Internal Model Third Party Inputs Valuation Technique
Assets:
Outstanding Face Amount	$ 1,535,739	$ 1,559,160
Amortized Cost Basis/Purchase Price	25,026	28,553
Fair Value	$ 25,510	$ 29,146
Liabilities:
Financial instruments, measurement input	0.0283	0.0304
Weighted average remaining maturity/duration	2 years 4 months 2 days	2 years 6 months 10 days
Recurring | GNMA interest-only | Internal Model Third Party Inputs Valuation Technique
Assets:
Outstanding Face Amount	$ 93,464	$ 109,783
Amortized Cost Basis/Purchase Price	1,335	1,982
Fair Value	$ 1,379	$ 1,851
Liabilities:
Financial instruments, measurement input	0.0421	0.0459
Weighted average remaining maturity/duration	3 years 2 months 4 days	2 years 9 months 7 days
Recurring | Agency securities | Internal Model Third Party Inputs Valuation Technique
Assets:
Outstanding Face Amount	$ 610	$ 629
Amortized Cost Basis/Purchase Price	619	640
Fair Value	$ 636	$ 637
Liabilities:
Financial instruments, measurement input	0.0168	0.0173
Weighted average remaining maturity/duration	1 year 6 months 21 days	1 year 9 months 29 days
Recurring | GNMA permanent securities | Internal Model Third Party Inputs Valuation Technique
Assets:
Outstanding Face Amount	$ 30,853	$ 31,461
Amortized Cost Basis/Purchase Price	31,006	31,681
Fair Value	$ 31,870	$ 32,369
Liabilities:
Financial instruments, measurement input	0.0350	0.0317
Weighted average remaining maturity/duration	2 years 4 months 28 days	1 year 11 months 4 days
Recurring | Equity securities | Internal Model Third Party Inputs Valuation Technique
Assets:
Amortized Cost Basis/Purchase Price		$ 12,848
Fair Value		12,980
Recurring | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Allowance for loan losses	$ (49,102)
Recurring | Total mortgage loan receivables held for investment, net, at amortized cost | Discounted Cash Flow
Assets:
Outstanding Face Amount	2,971,622	3,277,596
Amortized Cost Basis/Purchase Price	2,955,084	3,257,036
Fair Value	2,928,796	$ 3,273,219
Allowance for loan losses	$ (49,102)
Liabilities:
Financial instruments, measurement input	0.0682	0.0694
Weighted average remaining maturity/duration	1 year 2 months 19 days	1 year 5 months 4 days
Recurring | Provisions For Loan Losses
Assets:
Allowance for loan losses	$ (19)	$ (20,500)
Recurring | Provisions For Loan Losses | Internal Model Third Party Inputs Valuation Technique
Assets:
Allowance for loan losses	(19)
Recurring | Mortgage loan  receivables held for sale | Internal Model Third Party Inputs Valuation Technique
Assets:
Outstanding Face Amount	86,456	122,748
Amortized Cost Basis/Purchase Price	85,977	122,325
Fair Value	$ 87,960	$ 124,989
Liabilities:
Financial instruments, measurement input	0.0394	0.0420
Weighted average remaining maturity/duration	9 years 8 months 12 days	9 years 11 months 26 days
Recurring | FHLB stock | FHLB stock
Assets:
Outstanding Face Amount	$ 61,619	$ 61,619
Amortized Cost Basis/Purchase Price	61,619	61,619
Fair Value	$ 61,619	$ 61,619
Liabilities:
Financial instruments, measurement input	0.0400	0.0475
Recurring | Nonhedge derivatives | Counterparty Quotations Valuation Technique
Assets:
Nonhedge derivative assets	$ 89,900	$ 340,200
Fair Value	$ 380	$ 693
Liabilities:
Weighted average remaining maturity/duration	3 months	3 months
Recurring | Repurchase agreements - short-term | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 1,217,013	$ 1,781,253
Amortized Cost Basis/Purchase Price	1,217,013	1,781,253
Fair Value	$ 1,217,013	$ 1,781,253
Financial instruments, measurement input	0.0264	0.0250
Weighted average remaining maturity/duration	2 months 19 days	2 months 8 days
Recurring | Repurchase agreements - long-term | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 78,016	$ 34,681
Amortized Cost Basis/Purchase Price	78,016	34,681
Fair Value	$ 78,016	$ 34,681
Financial instruments, measurement input	0.0156	0.0281
Weighted average remaining maturity/duration	1 year 3 months 7 days	1 year 4 months 28 days
Recurring | Revolving Credit Facility | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 266,430
Amortized Cost Basis/Purchase Price	266,430
Fair Value	$ 266,430
Financial instruments, measurement input	0.0300
Weighted average remaining maturity/duration	18 days
Recurring | Mortgage loan financing | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 800,952	$ 807,854
Amortized Cost Basis/Purchase Price	805,431	812,606
Fair Value	$ 828,693	$ 838,766
Financial instruments, measurement input	0.0497	0.0491
Weighted average remaining maturity/duration	4 years 10 months 17 days	5 years 7 months 24 days
Recurring | Secured Financing Facility | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 188,687
Amortized Cost Basis/Purchase Price	188,687
Fair Value	$ 188,687
Financial instruments, measurement input	0.1075
Weighted average remaining maturity/duration	2 years 10 months 6 days
Recurring | CLO debt | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 299,605
Amortized Cost Basis/Purchase Price	299,605
Fair Value	$ 299,605
Financial instruments, measurement input	0.0550
Weighted average remaining maturity/duration	3 years 10 months 17 days
Recurring | Borrowings from the FHLB | Discounted Cash Flow
Liabilities:
Outstanding Face Amount	$ 360,790	$ 1,073,500
Amortized Cost Basis/Purchase Price	360,790	1,073,500
Fair Value	$ 362,559	$ 1,080,354
Financial instruments, measurement input	0.0139	0.0233
Weighted average remaining maturity/duration	2 years 8 months 1 day	2 years 29 days
Recurring | Senior unsecured notes | Broker Quotations Pricing Services Valuation Technique
Liabilities:
Outstanding Face Amount	$ 1,752,817	$ 1,166,201
Amortized Cost Basis/Purchase Price	1,737,542	1,157,833
Fair Value	$ 1,025,236	$ 1,208,860
Financial instruments, measurement input	0.0497	0.0539
Weighted average remaining maturity/duration	4 years 1 month 28 days	3 years 3 months 10 days
Recurring | Nonhedge derivatives | Counterparty Quotations Valuation Technique
Liabilities:
Nonhedge derivative liabilities	$ 69,571	$ 69,571
Fair Value	$ 0	$ 0
Weighted average remaining maturity/duration	10 months 9 days	4 months 9 days

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Summary of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Jan. 01, 2020	Dec. 31, 2019
Assets:
Fair value of assets	$ 3,041,103		$ 3,451,739
Provision for current expected credit losses	(49,102)	$ (11,600)	(20,500)
Liabilities:
Fair value of liabilities	4,266,239		4,943,914
Repurchase agreements - short-term
Liabilities:
Outstanding Face Amount	1,217,013		1,781,253
Fair value of liabilities	1,217,013		1,781,253
Repurchase agreements - long-term
Liabilities:
Outstanding Face Amount	78,016		34,681
Fair value of liabilities	78,016		34,681
Revolving Credit Facility
Liabilities:
Outstanding Face Amount	266,430
Fair value of liabilities	266,430
Mortgage loan financing
Liabilities:
Outstanding Face Amount	800,952		807,854
Fair value of liabilities	828,693		838,766
Secured Financing Facility
Liabilities:
Outstanding Face Amount	188,687
Fair value of liabilities	188,687
CLO debt
Liabilities:
Outstanding Face Amount	299,605
Fair value of liabilities	299,605
Borrowings from the FHLB
Liabilities:
Outstanding Face Amount	360,790		1,073,500
Fair value of liabilities	362,559		1,080,354
Senior unsecured notes
Liabilities:
Outstanding Face Amount	1,752,817		1,166,201
Fair value of liabilities	1,025,236		1,208,860
CMBS
Assets:
Outstanding Face Amount	11,576		12,121
Fair value of assets	11,111		11,608
CMBS interest-only
Assets:
Outstanding Face Amount	10,619		11,099
Fair value of assets	738		804
Provision for current expected credit losses	(19)
Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Outstanding Face Amount	2,971,622		3,277,597
Fair value of assets	2,928,796		3,273,219
Mortgage loan  receivables held for sale
Assets:
Outstanding Face Amount	86,456		122,748
Fair value of assets	87,960		124,989
FHLB stock
Assets:
Outstanding Face Amount	61,619		61,619
Fair value of assets	61,619		61,619
Level 1
Assets:
Fair value of assets	0		0
Provision for current expected credit losses	0		0
Liabilities:
Fair value of liabilities	0		0
Level 1 | Repurchase agreements - short-term
Liabilities:
Fair value of liabilities	0		0
Level 1 | Repurchase agreements - long-term
Liabilities:
Fair value of liabilities	0		0
Level 1 | Revolving Credit Facility
Liabilities:
Fair value of liabilities	0
Level 1 | Mortgage loan financing
Liabilities:
Fair value of liabilities	0		0
Level 1 | Secured Financing Facility
Liabilities:
Fair value of liabilities	0
Level 1 | CLO debt
Liabilities:
Fair value of liabilities	0
Level 1 | Borrowings from the FHLB
Liabilities:
Fair value of liabilities	0		0
Level 1 | Senior unsecured notes
Liabilities:
Fair value of liabilities	0		0
Level 1 | CMBS
Assets:
Fair value of assets	0		0
Level 1 | CMBS interest-only
Assets:
Fair value of assets	0		0
Level 1 | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Fair value of assets	0		0
Level 1 | Mortgage loan  receivables held for sale
Assets:
Fair value of assets	0		0
Level 1 | FHLB stock
Assets:
Fair value of assets	0		0
Level 2
Assets:
Fair value of assets	0		0
Provision for current expected credit losses	0		0
Liabilities:
Fair value of liabilities	0		0
Level 2 | Repurchase agreements - short-term
Liabilities:
Fair value of liabilities	0		0
Level 2 | Repurchase agreements - long-term
Liabilities:
Fair value of liabilities	0		0
Level 2 | Revolving Credit Facility
Liabilities:
Fair value of liabilities	0
Level 2 | Mortgage loan financing
Liabilities:
Fair value of liabilities	0		0
Level 2 | Secured Financing Facility
Liabilities:
Fair value of liabilities	0
Level 2 | CLO debt
Liabilities:
Fair value of liabilities	0
Level 2 | Borrowings from the FHLB
Liabilities:
Fair value of liabilities	0		0
Level 2 | Senior unsecured notes
Liabilities:
Fair value of liabilities	0		0
Level 2 | CMBS
Assets:
Fair value of assets	0		0
Level 2 | CMBS interest-only
Assets:
Fair value of assets	0		0
Level 2 | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Fair value of assets	0		0
Level 2 | Mortgage loan  receivables held for sale
Assets:
Fair value of assets	0		0
Level 2 | FHLB stock
Assets:
Fair value of assets	0		0
Level 3
Assets:
Fair value of assets	3,041,103		3,451,739
Provision for current expected credit losses	(49,102)		(20,500)
Liabilities:
Fair value of liabilities	4,266,239		4,943,914
Level 3 | Repurchase agreements - short-term
Liabilities:
Fair value of liabilities	1,217,013		1,781,253
Level 3 | Repurchase agreements - long-term
Liabilities:
Fair value of liabilities	78,016		34,681
Level 3 | Revolving Credit Facility
Liabilities:
Fair value of liabilities	266,430
Level 3 | Mortgage loan financing
Liabilities:
Fair value of liabilities	828,693		838,766
Level 3 | Secured Financing Facility
Liabilities:
Fair value of liabilities	188,687
Level 3 | CLO debt
Liabilities:
Fair value of liabilities	299,605
Level 3 | Borrowings from the FHLB
Liabilities:
Fair value of liabilities	362,559		1,080,354
Level 3 | Senior unsecured notes
Liabilities:
Fair value of liabilities	1,025,236		1,208,860
Level 3 | CMBS
Assets:
Fair value of assets	11,111		11,608
Level 3 | CMBS interest-only
Assets:
Fair value of assets	738		804
Provision for current expected credit losses	(19)
Level 3 | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Fair value of assets	2,928,796		3,273,219
Level 3 | Mortgage loan  receivables held for sale
Assets:
Fair value of assets	87,960		124,989
Level 3 | FHLB stock
Assets:
Fair value of assets	61,619		61,619
Recurring
Assets:
Fair value of assets	1,495,264		1,709,586
Recurring | Nonhedge derivatives
Liabilities:
Nonhedge derivative liabilities	69,571		69,571
Fair value of liabilities	0		0
Recurring | CMBS
Assets:
Outstanding Face Amount	1,484,514		1,628,476
Fair value of assets	1,436,227		1,632,714
Recurring | CMBS interest-only
Assets:
Outstanding Face Amount	1,525,120		1,548,061
Fair value of assets	24,772		28,342
Recurring | GNMA interest-only
Assets:
Outstanding Face Amount	93,464		109,783
Fair value of assets	1,379		1,851
Recurring | Agency securities
Assets:
Outstanding Face Amount	610		629
Fair value of assets	636		637
Recurring | GNMA permanent securities
Assets:
Outstanding Face Amount	30,853		31,461
Fair value of assets	31,870		32,369
Recurring | Equity securities
Assets:
Fair value of assets			12,980
Recurring | Nonhedge derivatives
Assets:
Fair value of assets	380		693
Nonhedge derivative assets	89,900		340,200
Recurring | Level 1
Assets:
Fair value of assets	0		12,980
Recurring | Level 1 | Nonhedge derivatives
Liabilities:
Fair value of liabilities	0		0
Recurring | Level 1 | CMBS
Assets:
Fair value of assets	0		0
Recurring | Level 1 | CMBS interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 1 | GNMA interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 1 | Agency securities
Assets:
Fair value of assets	0		0
Recurring | Level 1 | GNMA permanent securities
Assets:
Fair value of assets	0		0
Recurring | Level 1 | Equity securities
Assets:
Fair value of assets			12,980
Recurring | Level 1 | Nonhedge derivatives
Assets:
Fair value of assets	0		0
Recurring | Level 2
Assets:
Fair value of assets	380		693
Recurring | Level 2 | Nonhedge derivatives
Liabilities:
Fair value of liabilities	0		0
Recurring | Level 2 | CMBS
Assets:
Fair value of assets	0		0
Recurring | Level 2 | CMBS interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 2 | GNMA interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 2 | Agency securities
Assets:
Fair value of assets	0		0
Recurring | Level 2 | GNMA permanent securities
Assets:
Fair value of assets	0		0
Recurring | Level 2 | Nonhedge derivatives
Assets:
Fair value of assets	380		693
Recurring | Level 3
Assets:
Fair value of assets	1,494,884		1,695,913
Recurring | Level 3 | Nonhedge derivatives
Liabilities:
Fair value of liabilities	0		0
Recurring | Level 3 | CMBS
Assets:
Fair value of assets	1,436,227		1,632,714
Recurring | Level 3 | CMBS interest-only
Assets:
Fair value of assets	24,772		28,342
Recurring | Level 3 | GNMA interest-only
Assets:
Fair value of assets	1,379		1,851
Recurring | Level 3 | Agency securities
Assets:
Fair value of assets	636		637
Recurring | Level 3 | GNMA permanent securities
Assets:
Fair value of assets	31,870		32,369
Recurring | Level 3 | Nonhedge derivatives
Assets:
Fair value of assets	$ 0		$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Changes in Level 3 (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 1,695,913	$ 1,385,957
Transfer from level 2	0	0
Purchases	437,536	847,318
Sales	(517,535)	(379,961)
Paydowns/maturities	(52,271)	(110,400)
Amortization of premium/discount	(4,278)	(6,267)
Unrealized gain/(loss)	(51,709)	18,804
Realized gain/(loss) on sale	(12,773)	7,242
Ending balance	$ 1,494,883	$ 1,762,693

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Quantitative Information (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 1,506,732	$ 1,708,325
CMBS
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	1,447,338	1,644,322
CMBS interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	25,510	29,146
GNMA interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	1,378	1,851
Agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	636	637
GNMA permanent securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 31,870	$ 32,369
Level 3 | CMBS | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	0 years	0 years
Level 3 | CMBS | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	2 years 8 months 19 days	1 year 7 months 17 days
Level 3 | CMBS | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	6 years 3 months 3 days	6 years 10 months 13 days
Level 3 | CMBS interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	1 month 6 days	3 months 3 days
Level 3 | CMBS interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	2 years 4 months 2 days	2 years 5 months 19 days
Level 3 | CMBS interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	3 years 3 months 10 days	3 years 6 months 3 days
Level 3 | GNMA interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	0 years	10 months 6 days
Level 3 | GNMA interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	2 years 5 months 12 days	2 years 10 months 24 days
Level 3 | GNMA interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	6 years 6 months 25 days	13 years 8 months 8 days
Level 3 | Agency securities | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	0 years	0 years
Level 3 | Agency securities | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	2 years 7 days	2 years 3 months 18 days
Level 3 | Agency securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	2 years 5 months 23 days	2 years 11 months 1 day
Level 3 | GNMA permanent securities | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	1 year 1 month 24 days	2 years 7 months 6 days
Level 3 | GNMA permanent securities | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	9 years 10 months 20 days	3 years 7 months 9 days
Level 3 | GNMA permanent securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Duration	14 years 9 months 21 days	6 years 5 months 26 days
Level 3 | Yield | CMBS | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0142	0
Level 3 | Yield | CMBS | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0354	0.0311
Level 3 | Yield | CMBS | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.10	0.1992
Level 3 | Yield | CMBS interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0	0.0157
Level 3 | Yield | CMBS interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0233	0.0393
Level 3 | Yield | CMBS interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.10	0.0762
Level 3 | Yield | GNMA interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0	(0.0482)
Level 3 | Yield | GNMA interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0326	0.1513
Level 3 | Yield | GNMA interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.10	0.445
Level 3 | Yield | Agency securities | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0	0
Level 3 | Yield | Agency securities | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0032	0.017
Level 3 | Yield | Agency securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0172	0.0216
Level 3 | Yield | GNMA permanent securities | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0142	0.5656
Level 3 | Yield | GNMA permanent securities | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0244	1.6679
Level 3 | Yield | GNMA permanent securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0644	4.10
Level 3 | Prepayment speed | CMBS interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	100.00	100.00
Level 3 | Prepayment speed | CMBS interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	100.00	97.24
Level 3 | Prepayment speed | CMBS interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	100.00	100.00
Level 3 | Prepayment speed | GNMA interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	5.00	5.00
Level 3 | Prepayment speed | GNMA interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	15.42	12.36
Level 3 | Prepayment speed | GNMA interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	35.00	35.00
Level 3 | Internal Model Third Party Inputs Valuation Technique
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 1,494,884	$ 1,695,913
Recurring | Internal Model Third Party Inputs Valuation Technique | CMBS
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0157	0.0308
Duration	2 years 3 months 7 days	2 years 4 months 28 days
Recurring | Internal Model Third Party Inputs Valuation Technique | CMBS interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0283	0.0304
Duration	2 years 4 months 2 days	2 years 6 months 10 days
Recurring | Internal Model Third Party Inputs Valuation Technique | GNMA interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0421	0.0459
Duration	3 years 2 months 4 days	2 years 9 months 7 days
Recurring | Internal Model Third Party Inputs Valuation Technique | Agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0168	0.0173
Duration	1 year 6 months 21 days	1 year 9 months 29 days
Recurring | Internal Model Third Party Inputs Valuation Technique | GNMA permanent securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0350	0.0317
Duration	2 years 4 months 28 days	1 year 11 months 4 days
Recurring | Level 3 | Internal Model Third Party Inputs Valuation Technique | CMBS
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 1,436,227	$ 1,632,714
Recurring | Level 3 | Internal Model Third Party Inputs Valuation Technique | CMBS interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	24,772	28,342
Recurring | Level 3 | Internal Model Third Party Inputs Valuation Technique | GNMA interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	1,379	1,851
Recurring | Level 3 | Internal Model Third Party Inputs Valuation Technique | Agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	636	637
Recurring | Level 3 | Internal Model Third Party Inputs Valuation Technique | GNMA permanent securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 31,870	$ 32,369

XML

INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Income Tax Contingency [Line Items]
Income tax expense (benefit)	$ 1.6	$ (1.3)	$ (15.0)	$ (7.4)
Deferred income tax expense (benefit)		$ 3.5	(2.1)	$ 6.7	$ 9.9
Deferred tax asset related to capital losses	9.9		9.9
Deferred tax assets related to interest expense limitation	1.1		1.1
Fees and other income					2.5
Other assets
Income Tax Contingency [Line Items]
Deferred tax liabilities	(12.0)		(12.0)		(2.1)
Amount Payable Pursuant to Tax Receivable Agreement
Income Tax Contingency [Line Items]
Amount payable pursuant to tax receivable agreement	$ 1.6		$ 1.6		$ 1.6

XML

RELATED PARTY TRANSACTIONS (Details) - USD ($)		3 Months Ended		6 Months Ended
	Jun. 22, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Oct. 18, 2016
Related Party Transaction [Line Items]
Realized loss on investment		$ (200,000)	$ 0	$ 1,100,000	$ 100,000
Affiliated Entity
Related Party Transaction [Line Items]
Investment in mutual fund						$ 10,000,000.0
Realized loss on investment	$ (700,000)

XML

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Jan. 01, 2019
Unfunded Loan Commitments
Operating lease liability	$ 1.9		$ 1.9
Operating lease, right-of-use asset	1.9		1.9
Tenant reimbursements	1.1	$ 1.7	2.3	$ 3.3
Provision for loan losses
Unfunded Loan Commitments
Unfunded commitments of mortgage loan receivables held for investment	$ 249.2		$ 249.2		$ 286.5
Unfunded commitments of mortgage loan receivables held for investment, additional funds			62.00%
Accounting Standards Update 2016-02
Unfunded Loan Commitments
Operating lease liability						$ 3.5
Operating lease, right-of-use asset						$ 3.3

XML

SEGMENT REPORTING - Additional Information (Details)	6 Months Ended
	Jun. 30, 2020 segment
Segment Reporting [Abstract]
Number of reportable segments	3

XML

SEGMENT REPORTING - Schedule of Segments (Details) - USD ($)				1 Months Ended	3 Months Ended			6 Months Ended
		May 01, 2019	Feb. 06, 2019	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Income Statement [Abstract]
Interest income					$ 62,096,000	$ 85,322,000		$ 134,686,000	$ 171,789,000
Interest expense					(68,425,000)	(52,369,000)		(119,827,000)	(103,618,000)
Net interest income (expense)					(6,329,000)	32,953,000		14,859,000	68,171,000
(Provision) benefit for loan losses					729,000	(300,000)		(25,852,000)	(600,000)
Net interest income (expense) after provision for loan losses					(5,600,000)	32,653,000		(10,993,000)	67,571,000
Operating lease income		$ 3,900,000			23,773,000	27,780,000		50,101,000	56,701,000
Sale of loans, net					(744,000)	20,264,000		261,000	27,342,000
Realized gain (loss) on securities					(14,798,000)	4,464,000		(11,787,000)	7,329,000
Unrealized gain (loss) on equity securities					401,000	(990,000)		(132,000)	1,088,000
Unrealized gain (loss) on Agency interest-only securities					98,000	11,000		174,000	22,000
Realized gain (loss) on sale of real estate, net				$ 0	(1,000)	(1,124,000)		10,528,000	(1,119,000)
Impairment of real estate					0	0	$ (1,400,000)	0	(1,350,000)
Fee and other income					3,505,000	7,196,000		5,024,000	11,882,000
Net result from derivative transactions					(813,000)	(15,457,000)		(16,248,000)	(26,491,000)
Earnings (loss) from investment in unconsolidated joint ventures					471,000	1,564,000		912,000	2,522,000
Gain (loss) on extinguishment/defeasance of debt			$ (1,100,000)		19,017,000	0		21,077,000	(1,070,000)
Total other income (loss)					30,909,000	43,708,000		59,910,000	76,856,000
Salaries and employee benefits					(7,001,000)	(14,907,000)		(24,023,000)	(38,481,000)
Operating expenses(3)					(6,224,000)	(6,012,000)		(12,018,000)	(11,413,000)
Real estate operating expenses					(6,034,000)	(6,032,000)		(13,981,000)	(11,506,000)
Fee expense					(1,977,000)	(1,183,000)		(3,415,000)	(2,895,000)
Depreciation and amortization		$ (400,000)			(9,816,000)	(9,935,000)		(19,825,000)	(20,162,000)
Total costs and expenses					(31,052,000)	(38,069,000)		(73,262,000)	(84,457,000)
Income tax (expense) benefit					550,000	(2,219,000)		5,091,000	634,000
Net income (loss)					(5,193,000)	36,073,000		(19,254,000)	60,604,000
Total assets	[1]			6,609,550,000	6,609,550,000			6,609,550,000		$ 6,669,152,000
Investment in unconsolidated joint ventures	[1]			48,919,000	48,919,000			48,919,000		48,433,000
Investment in FHLB stock	[1]			61,619,000	61,619,000			61,619,000		61,619,000
Professional fees					4,000,000.0	3,600,000		7,100,000	6,100,000
Operating Segment
Income Statement [Abstract]
Investment in unconsolidated joint ventures				48,900,000	48,900,000			48,900,000		48,400,000
Operating Segment | Loans
Income Statement [Abstract]
Interest income					53,641,000	69,794,000		112,546,000	142,947,000
Interest expense					(11,732,000)	(14,224,000)		(16,602,000)	(28,981,000)
Net interest income (expense)					41,909,000	55,570,000		95,944,000	113,966,000
(Provision) benefit for loan losses					726,000	(300,000)		(25,855,000)	(600,000)
Net interest income (expense) after provision for loan losses					42,635,000	55,270,000		70,089,000	113,366,000
Operating lease income					0	0		0	0
Sale of loans, net					(744,000)	20,264,000		261,000	27,342,000
Realized gain (loss) on securities					0	0		0	0
Unrealized gain (loss) on equity securities					0	0		0	0
Unrealized gain (loss) on Agency interest-only securities					0	0		0	0
Realized gain (loss) on sale of real estate, net					0	0		0	0
Impairment of real estate									0
Fee and other income					2,429,000	5,947,000		3,854,000	9,257,000
Net result from derivative transactions					(588,000)	(8,518,000)		(11,939,000)	(13,716,000)
Earnings (loss) from investment in unconsolidated joint ventures					0	0		0	0
Gain (loss) on extinguishment/defeasance of debt					0			0	0
Total other income (loss)					1,097,000	17,693,000		(7,824,000)	22,883,000
Salaries and employee benefits					0	0		0	0
Operating expenses(3)					0	0		0	0
Real estate operating expenses					0	0		0	0
Fee expense					(1,474,000)	(1,058,000)		(2,664,000)	(2,252,000)
Depreciation and amortization					0	0		0	0
Total costs and expenses					(1,474,000)	(1,058,000)		(2,664,000)	(2,252,000)
Income tax (expense) benefit					0	0		0	0
Net income (loss)					42,258,000	71,905,000		59,601,000	133,997,000
Total assets				2,991,959,000	2,991,959,000			2,991,959,000		3,358,861,000
Operating Segment | Securities
Income Statement [Abstract]
Interest income					8,177,000	15,210,000		21,040,000	28,329,000
Interest expense					(7,795,000)	(4,130,000)		(14,554,000)	(6,618,000)
Net interest income (expense)					382,000	11,080,000		6,486,000	21,711,000
(Provision) benefit for loan losses					3,000	0		3,000	0
Net interest income (expense) after provision for loan losses					385,000	11,080,000		6,489,000	21,711,000
Operating lease income					0	0		0	0
Sale of loans, net					0	0		0	0
Realized gain (loss) on securities					(14,798,000)	4,464,000		(11,787,000)	7,329,000
Unrealized gain (loss) on equity securities					401,000	(990,000)		(132,000)	1,088,000
Unrealized gain (loss) on Agency interest-only securities					98,000	11,000		174,000	22,000
Realized gain (loss) on sale of real estate, net					0	0		0	0
Impairment of real estate									0
Fee and other income					2,000	333,000		403,000	737,000
Net result from derivative transactions					(225,000)	(6,939,000)		(4,309,000)	(12,775,000)
Earnings (loss) from investment in unconsolidated joint ventures					0	0		0	0
Gain (loss) on extinguishment/defeasance of debt					0			0	0
Total other income (loss)					(14,522,000)	(3,121,000)		(15,651,000)	(3,599,000)
Salaries and employee benefits					0	0		0	0
Operating expenses(3)					0	0		0	0
Real estate operating expenses					0	0		0	0
Fee expense					(61,000)	(87,000)		(133,000)	(187,000)
Depreciation and amortization					0	0		0	0
Total costs and expenses					(61,000)	(87,000)		(133,000)	(187,000)
Income tax (expense) benefit					0	0		0	0
Net income (loss)					(14,198,000)	7,872,000		(9,295,000)	17,925,000
Total assets				1,506,713,000	1,506,713,000			1,506,713,000		1,721,305,000
Operating Segment | Real Estate
Income Statement [Abstract]
Interest income					2,000	7,000		10,000	15,000
Interest expense					(9,758,000)	(9,091,000)		(19,993,000)	(17,973,000)
Net interest income (expense)					(9,756,000)	(9,084,000)		(19,983,000)	(17,958,000)
(Provision) benefit for loan losses					0	0		0	0
Net interest income (expense) after provision for loan losses					(9,756,000)	(9,084,000)		(19,983,000)	(17,958,000)
Operating lease income					23,773,000	27,780,000		50,101,000	56,701,000
Sale of loans, net					0	0		0	0
Realized gain (loss) on securities					0	0		0	0
Unrealized gain (loss) on equity securities					0	0		0	0
Unrealized gain (loss) on Agency interest-only securities					0	0		0	0
Realized gain (loss) on sale of real estate, net					(1,000)	(1,124,000)		10,528,000	(1,119,000)
Impairment of real estate									(1,350,000)
Fee and other income					0	0		25,000	7,000
Net result from derivative transactions					0	0		0	0
Earnings (loss) from investment in unconsolidated joint ventures					471,000	1,564,000		912,000	2,522,000
Gain (loss) on extinguishment/defeasance of debt					0			0	(1,070,000)
Total other income (loss)					24,243,000	28,220,000		61,566,000	55,691,000
Salaries and employee benefits					0	0		0	0
Operating expenses(3)					0	0		0	0
Real estate operating expenses					(6,034,000)	(6,032,000)		(13,981,000)	(11,506,000)
Fee expense					(442,000)	(38,000)		(618,000)	(456,000)
Depreciation and amortization					(9,791,000)	(9,910,000)		(19,775,000)	(20,112,000)
Total costs and expenses					(16,267,000)	(15,980,000)		(34,374,000)	(32,074,000)
Income tax (expense) benefit					0	0		0	0
Net income (loss)					(1,780,000)	3,156,000		7,209,000	5,659,000
Total assets				1,091,129,000	1,091,129,000			1,091,129,000		1,096,514,000
Corporate/Other
Income Statement [Abstract]
Interest income					276,000	311,000		1,090,000	498,000
Interest expense					(39,140,000)	(24,924,000)		(68,678,000)	(50,046,000)
Net interest income (expense)					(38,864,000)	(24,613,000)		(67,588,000)	(49,548,000)
(Provision) benefit for loan losses					0	0		0	0
Net interest income (expense) after provision for loan losses					(38,864,000)	(24,613,000)		(67,588,000)	(49,548,000)
Operating lease income					0	0		0	0
Sale of loans, net					0	0		0	0
Realized gain (loss) on securities					0	0		0	0
Unrealized gain (loss) on equity securities					0	0		0	0
Unrealized gain (loss) on Agency interest-only securities					0	0		0	0
Realized gain (loss) on sale of real estate, net					0	0		0	0
Impairment of real estate									0
Fee and other income					1,074,000	916,000		742,000	1,881,000
Net result from derivative transactions					0	0		0	0
Earnings (loss) from investment in unconsolidated joint ventures					0	0		0	0
Gain (loss) on extinguishment/defeasance of debt					19,017,000			21,077,000	0
Total other income (loss)					20,091,000	916,000		21,819,000	1,881,000
Salaries and employee benefits					(7,001,000)	(14,907,000)		(24,023,000)	(38,481,000)
Operating expenses(3)					(6,224,000)	(6,012,000)		(12,018,000)	(11,413,000)
Real estate operating expenses					0	0			0
Fee expense					0	0		0	0
Depreciation and amortization					(25,000)	(25,000)		(50,000)	(50,000)
Total costs and expenses					(13,250,000)	(20,944,000)		(36,091,000)	(49,944,000)
Income tax (expense) benefit					550,000	(2,219,000)		5,091,000	634,000
Net income (loss)					(31,473,000)	$ (46,860,000)		(76,769,000)	$ (96,977,000)
Total assets				1,019,749,000	1,019,749,000			1,019,749,000		492,472,000
Investment in FHLB stock				61,600,000	61,600,000			61,600,000		61,600,000
Deferred tax (liability)				(12,000,000.0)	(12,000,000.0)			(12,000,000.0)
Deferred tax asset										(2,100,000)
Corporate/Other | Senior Unsecured Notes
Income Statement [Abstract]
Senior notes				$ 1,700,000,000	$ 1,700,000,000			$ 1,700,000,000		$ 1,200,000,000

[1] Includes amounts relating to consolidated variable interest entities. See Note 1 and Note 10.

XML

Label	Element	Value
Restricted Cash and Investments	us-gaap_RestrictedCashAndInvestments	$ 297,575,000
Restricted Cash and Investments	us-gaap_RestrictedCashAndInvestments	88,904,000
Restricted Cash and Investments	us-gaap_RestrictedCashAndInvestments	$ 47,945,000