XML 40 R25.htm IDEA: XBRL DOCUMENT v3.22.2
Loans Held for Investment and the Allowance for Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2022
Loans and Leases Receivable Disclosure [Abstract]  
Schedule of Overall Statistics for Loan Held for Investment Portfolio
The following table details overall statistics for the Company’s loans held for investment portfolio (dollars in thousands):
June 30, 2022December 31, 2021
Balance sheet portfolio
Total loan exposure(1)
Balance sheet portfolio
Total loan exposure(1)
Number of loans73746970
Floating rate loans100.0 %100.0 %100.0 %100.0 %
Total loan commitment$5,186,472$5,318,472$5,411,944$5,543,944
Unpaid principal balance(2)
$4,710,161$4,842,161$4,919,343$5,051,343
Unfunded loan commitments(3)
$470,869$470,869$487,773$487,773
Amortized cost$4,701,410$4,701,410$4,909,202$4,909,202
Weighted average credit spread3.4 %3.5 %3.4 %3.4 %
Weighted average all-in yield(4)
5.6 %5.6 %4.8 %4.8 %
Weighted average term to extended maturity (in years)(5)
2.72.82.82.8
_______________________
(1)In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on the Company’s balance sheet. When the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, the Company retains on its balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio the Company originated, acquired and financed. As of June 30, 2022 and December 31, 2021, the Company had outstanding one non-consolidated senior interest of $132.0 million.
(2)Unpaid principal balance includes PIK interest of $2.4 million and $3.0 million as of June 30, 2022 and December 31, 2021, respectively.
(3)Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by the Company’s borrowers, to finance operating deficits during renovation and lease-up, and in limited instances to finance construction.
(4)As of June 30, 2022, all of the Company’s loans were floating rate. Loans originated by the Company before December 31, 2021 are indexed to LIBOR, while loans originated after January 1, 2022 are indexed to Term SOFR. As of June 30, 2022, based on the total loan commitments of the Company’s loan portfolio, 11.8% (or $0.6 billion) of the Company’s loans were subject to Term SOFR and 88.2% (or $4.6 billion) were subject to LIBOR as the benchmark interest rate. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount if any, loan origination costs and accrual of both extension and exit fees. All-in yield for the total portfolio assumes the applicable floating benchmark interest rate as of June 30, 2022 for weighted average calculations.
(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that the Company’s loans may be repaid prior to such date. As of June 30, 2022, based on the unpaid principal balance of the Company’s total loan exposure, 43.3% of the Company’s loans were subject to yield maintenance or other prepayment restrictions and 56.7% were open to repayment by the borrower without penalty.
Schedule of Loans Held for Investment Portfolio by Loan Seniority
The following tables present an overview of the Company’s loans held for investment portfolio by loan seniority (dollars in thousands):
June 30, 2022
Loans held for investment, netOutstanding principalUnamortized premium (discount) and
loan origination fees, net 		Amortized cost
Senior loans$4,675,161 $(8,751)$4,666,410 
Subordinated and mezzanine loans35,000 — 35,000 
Total$4,710,161 $(8,751)$4,701,410 
Allowance for credit losses(84,156)
Loans held for investment, net$4,617,254 
December 31, 2021
Loans held for investment, netOutstanding principalUnamortized premium (discount) and
loan origination fees, net 		Amortized cost
Senior loans$4,884,343 $(10,101)$4,874,242 
Subordinated and mezzanine loans35,000 (40)34,960 
Total$4,919,343 $(10,141)$4,909,202 
Allowance for credit losses(41,999)
Loans held for investment, net$4,867,203 
Summary of Loans Held for Investment Portfolio Activity
For the six months ended June 30, 2022, the Company’s loans held for investment portfolio activity was as follows (dollars in thousands):
Carrying value
Balance as of January 1, 2022$4,867,203 
Additions during the period:
Loans originated535,053 
Additional fundings58,558 
Amortization of origination fees3,627 
Deductions during the period:
Collection of principal(804,417)
Collection of accrued PIK interest(613)
(Increase) of allowance for credit losses(42,157)
Balance as of June 30, 2022
$4,617,254 
Summary of Amortized Cost by Origination Year Grouped by Risk Rating for Loans Held for Investment Portfolio
The following tables present the Company's loans held for investment portfolio on an amortized cost basis by origination year, grouped by risk rating (dollars in thousands):
June 30, 2022
Amortized cost by origination year
20222021202020192018PriorTotal
Senior loans by internal risk ratings:
1$— $— $— $— $— $— $— 
2— 33,680 — 61,998 — 253,950 349,628 
3539,935 1,576,195 98,408 778,708 264,678 12,032 3,269,956 
4— — 78,269 497,742 251,307 140,776 968,094 
5— — — — 78,732 — 78,732 
Total senior loans$539,935 $1,609,875 $176,677 $1,338,448 $594,717 $406,758 $4,666,410 
Subordinated and mezzanine loans by internal risk ratings:
1$— $— $— $— $— $— $— 
2— — — — — — — 
3— — — 35,000 — — 35,000 
4— — — — — — — 
5— — — — — — — 
Total subordinated and mezzanine loans— — — 35,000 — — 35,000 
Total$539,935 $1,609,875 $176,677 $1,373,448 $594,717 $406,758 $4,701,410 
December 31, 2021
Amortized cost by origination year
2021 2020 2019 2018 2017 Prior Total
Senior loans by internal risk ratings:
1$— $— $— $— $— $— $— 
233,621 — 82,461 242,614 168,355 — 527,051 
31,600,659 95,858 1,400,670 407,509 169,934 17,163 3,691,793 
4— 78,013 154,093 183,750 216,542 — 632,398 
5— — — 23,000 — — 23,000 
Total senior loans$1,634,280 $173,871 $1,637,224 $856,873 $554,831 $17,163 $4,874,242 
Subordinated and mezzanine loans by internal risk ratings:
1$— $— $— $— $— $— $— 
2— — — — — — — 
3— — 34,960 — — — 34,960 
4— — — — — — — 
5— — — — — — — 
Total subordinated and mezzanine loans— — 34,960 — — — 34,960 
Total$1,634,280 $173,871 $1,672,184 $856,873 $554,831 $17,163 $4,909,202 
Summary of Amortized Cost and Results of Internal Risk Rating Review Performed for Loans Held for Investment Portfolio
The table below summarizes the Company’s loans held for investment portfolio on an amortized cost basis, by the results of its internal risk rating review process performed (dollars in thousands):
Risk ratingJune 30, 2022December 31, 2021
1$— $— 
2349,628 527,051 
33,304,956 3,726,753 
4968,094 632,398 
578,732 23,000 
Total$4,701,410 $4,909,202 
Allowance for credit losses(84,156)(41,999)
Carrying value$4,617,254 $4,867,203 
Weighted average risk rating(1)
3.2 3.0 
________________________________
(1)Weighted average risk rating calculated based on the amortized cost balance at period end.
Summary of Activity in Allowance for Credit Losses for Loans Held for Investment Portfolio by Class of Financing Receivable
The following tables present activity in the allowance for credit losses for loans by finance receivable class (dollars in thousands):
For the Three Months Ended June 30, 2022
Senior loansSubordinated and
mezzanine loans		Total
Allowance for credit losses for loans held for investment:
Beginning balance at April 1, 2022
$45,940 $367 $46,307 
Allowance for (reversal of) credit losses, net37,545 304 37,849 
Subtotal83,485 671 84,156 
Allowance for credit losses on unfunded loan commitments:
Beginning balance at April 1, 2022
4,786 — 4,786 
Allowance for (reversal of) credit losses, net4,441 — 4,441 
Subtotal9,227 — 9,227 
Total allowance for credit losses$92,712 $671 $93,383 
For the Three Months Ended June 30, 2021
Senior loansSubordinated and
mezzanine loans		Total
Allowance for credit losses for loans held for investment:
Beginning balance at April 1, 2021
$55,155 $1,486 $56,641 
Allowance for (reversal of) credit losses, net(3,724)(976)(4,700)
Subtotal51,431 510 51,941 
Allowance for credit losses on unfunded loan commitments:
Beginning balance at April 1, 2021
2,084 65 2,149 
Allowance for (reversal of) credit losses, net1,276 (54)1,222 
Subtotal3,360 11 3,371 
Total allowance for credit losses$54,791 $521 $55,312 
For the Six Months Ended June 30, 2022
Senior loansSubordinated and
mezzanine loans 		Total
Allowance for credit losses for loans held for investment:
Beginning balance at January 1, 2022$41,193 $806 $41,999 
Allowance for (reversal of) credit losses, net42,292 (135)42,157 
Subtotal83,485 671 84,156 
Allowance for credit losses on unfunded loan commitments:
Beginning balance at January 1, 20224,210 — 4,210 
Allowance for (reversal of) credit losses, net5,017 — 5,017 
Subtotal9,227 — 9,227 
Total allowance for credit losses$92,712 $671 $93,383 
For the Six Months Ended June 30, 2021
Senior loans Subordinated and
mezzanine loans 		Total
Allowance for credit losses for loans held for investment:
Beginning balance at January 1, 2021$58,210 $1,730 $59,940 
Allowance for (reversal of) credit losses, net(6,779)(1,220)(7,999)
Subtotal51,431 510 51,941 
Allowance for credit losses on unfunded loan commitments:
Beginning balance at January 1, 20212,756 132 2,888 
Allowance for (reversal of) credit losses, net604 (121)483 
Subtotal3,360 11 3,371 
Total allowance for credit losses$54,791 $521 $55,312 
Schedule of Paid-in-Kind Interest
The following table presents the accrued PIK interest activity for the six months ended June 30, 2022 for the Company’s loans held for investment portfolio (dollars in thousands):
June 30, 2022
Balance as of January 1, 2022
$3,028 
Accrued PIK interest— 
Repayments of accrued PIK interest(313)
Balance as of March 31, 2022
$2,715 
Accrued PIK interest— 
Repayments of accrued PIK interest(300)
Write-off of accrued PIK interest— 
Balance as of June 30, 2022
$2,415 
Summary of Aging Analysis for Loans Held for Investment Portfolio by Class of Loans
The following table presents an aging analysis for the Company’s loans held for investment portfolio, by class of loans on amortized cost basis (dollars in thousands):
Days Outstanding as of June 30, 2022
CurrentDays: 30-59Days: 60-89 Days: 90 or moreTotal loans past dueTotal loans
Loans receivable:
Senior loans$4,643,410 $— $— $23,000 $23,000 $4,666,410 
Subordinated and mezzanine loans35,000 — — — — 35,000 
Total$4,678,410 $— $— $23,000 $23,000 $4,701,410 
 
Days Outstanding as of December 31, 2021
Current Days: 30-59Days: 60-89Days: 90 or moreTotal loans past dueTotal loans
Loans receivable:
Senior loans$4,851,242 $— $— $23,000 $23,000 $4,874,242 
Subordinated and mezzanine loans34,960 — — — — 34,960 
Total$4,886,202 $— $— $23,000 $23,000 $4,909,202