(3) Loans Held for Investment

The Company currently originates and acquires first mortgage and mezzanine loans secured by commercial properties. These loans can potentially subject the Company to concentrations of credit risk as measured by various attributes, including the property type collateralizing the loan, loan size, loans to a single sponsor and loans in a single geographic area, among others. The Company’s loans held for investment are accounted for at amortized cost.

During the three months ended March 31, 2018, the Company originated seven loans with a total commitment of approximately $579.2 million, an initial unpaid principal balance of $516.7 million, and unfunded commitments at closing of $62.5 million. To fund these loan originations, the Company used cash on hand and its secured revolving repurchase facilities and senior secured credit facility. Total commitments related to the syndication of non-consolidated senior interests as of March 31, 2018 was $81.5 million.

The following tables present an overview of the loan investment portfolio as of March 31, 2018 and December 31, 2017 (dollars in thousands):

	March 31, 2018
Loans Receivable	Outstanding Principal		Unamortized Premium (Discount), Loan Origination Fees, net			Carrying Amount
Senior loans	$	3,561,696	$	(22,257	)	$	3,539,439
Subordinated and mezzanine loans		57,946		(175	)		57,771
Subtotal before allowance		3,619,642		(22,432	)		3,597,210
Allowance for loan losses		—		—			—
Total	$	3,619,642	$	(22,432	)	$	3,597,210

	December 31, 2017
Loans Receivable	Outstanding Principal		Unamortized Premium (Discount), Loan Origination Fees, net			Carrying Amount
Senior loans	$	3,122,670	$	(22,143	)	$	3,100,527
Subordinated and mezzanine loans		75,446		(301	)		75,145
Subtotal before allowance		3,198,116		(22,444	)		3,175,672
Allowance for loan losses		—		—			—
Total	$	3,198,116	$	(22,444	)	$	3,175,672

For the three months ended March 31, 2018, loan portfolio activity was as follows (dollars in thousands):


	Carrying Value
Balance at December 31, 2017	$	3,175,672
Additions during the period:
Loans originated		512,522
Additional fundings		60,972
Amortization of discount and origination fees		4,227
Deductions during the period:
Collection of principal		(156,183	)
Balance at March 31, 2018	$	3,597,210

At March 31, 2018 and December 31, 2017, there was $1.1 million and $2.0 million of unamortized discount included in loans held for investment at amortized cost on the consolidated balance sheets.

The table below summarizes the carrying values and results of the Company’s internal risk rating review performed as of March 31, 2018 and December 31, 2017 (dollars in thousands):

	Carrying Value
Rating	March 31, 2018		December 31, 2017
1	$	49,000	$	—
2		1,217,948		1,318,816
3		2,156,579		1,680,913
4		173,683		175,943
5		—		—
Totals	$	3,597,210	$	3,175,672
Weighted Average Risk Rating⁽¹⁾		2.7		2.6

(1)	Weighted Average Risk Rating calculated based on unpaid principal balance at period end.

The weighted average risk rating at March 31, 2018 and December 31, 2017 was 2.7 and 2.6, respectively. During the three months ended March 31, 2018, one loan was moved from the Company’s Category 2 risk rating into its Category 1 risk rating as a result of improved operating performance of the underlying loan collateral. Additionally, the Company moved one loan that was classified in its Category 2 risk rating into its Category 3 risk rating, resulting from a delay in achieving certain construction milestones.

At March 31, 2018 and December 31, 2017, there were no loans on non-accrual status or that were impaired; thus, the Company did not record a reserve for loan loss. See Note 16 for details about the Company’s mortgage loan originations subsequent to March 31, 2018.