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Loans Held for Investment and the Allowance for Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2023
Receivables [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, 2023December 31, 2022
Balance sheet portfolio
Total loan exposure(1)
Balance sheet portfolio
Total loan exposure(1)
Number of loans63637070
Floating rate loans100.0 %100.0 %100.0 %100.0 %
Total loan commitment$4,869,045$4,869,045$5,429,146$5,429,146
Unpaid principal balance(2)
$4,567,250$4,567,250$5,004,798$5,004,798
Unfunded loan commitments(3)
$300,502$300,502$426,061$426,061
Amortized cost$4,547,594$4,547,594$4,978,674$4,978,674
Weighted average credit spread3.6 %3.6 %3.4 %3.4 %
Weighted average all-in yield(4)
8.9 %8.9 %8.1 %8.1 %
Weighted average term to extended maturity (in years)(5)
2.52.52.82.8
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(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. The Company had no non-consolidated senior interests as of June 30, 2023 and December 31, 2022.
(2)Unpaid principal balance includes PIK interest of $1.2 million and $1.7 million as of June 30, 2023 and December 31, 2022, 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 and to finance operating deficits during renovation and lease-up.
(4)As of June 30, 2023, 59 of the Company's 63 loans, or $4.4 billion of $4.9 billion based on the total loan commitments of the Company’s loan portfolio were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount if any, 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, 2023 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, 2023, based on the unpaid principal balance of the Company’s total loan exposure, 19.8% of the Company’s loans were subject to yield maintenance or other prepayment restrictions and 80.2% 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, 2023
Loans held for investment, netOutstanding principalUnamortized premium (discount) and
loan origination fees, net 		Amortized cost
Senior loans(1)
$4,567,250 $(19,656)$4,547,594 
Total$4,567,250 $(19,656)$4,547,594 
Allowance for credit losses(250,244)
Loans held for investment, net$4,297,350 
December 31, 2022
Loans held for investment, netOutstanding principalUnamortized premium (discount) and
loan origination fees, net 		Amortized cost
Senior loans(1)
$5,004,798 $(26,124)$4,978,674 
Total$5,004,798 $(26,124)$4,978,674 
Allowance for credit losses(197,272)
Loans held for investment, net$4,781,402 
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(1)Senior loans may include contiguous mezzanine loans and pari passu participations in senior mortgage loans.
Summary of Loans Held for Investment Portfolio Activity
The following table presents the Company’s loans held for investment portfolio activity (dollars in thousands):
Carrying value
Balance as of January 1, 2023$4,781,402 
Additions during the period:
Loans originated and acquired109,922 
Additional fundings84,544 
Amortization of origination fees and discounts7,705 
Deductions during the period:
Collection of principal(503,244)
Collection of accrued PIK interest(542)
Collection of interest applied to reduce principal under the cost-recovery method(3,167)
Loan sale(71,269)
Loan extinguishment upon conversion to REO(55,029)
Increase of allowance for credit losses(52,972)
Balance as of June 30, 2023$4,297,350 
Summary of Amortized Cost and Results of Internal Risk Rating Review Performed for Loans Held for Investment Portfolio
The following tables present the Company's loans held for investment portfolio on an amortized cost basis by origination year, grouped by risk rating (dollars in thousands):
June 30, 2023
Amortized cost by origination year
20232022202120202019PriorTotal
Senior loans by internal risk ratings:
1$— $— $— $— $— $— $— 
2— — 227,987 — 211,726 — 439,713 
3110,329 926,847 1,415,235 100,022 461,953 86,027 3,100,413 
4— 77,059 79,377 119,172 101,872 137,730 515,210 
5— — — — 332,655 159,603 492,258 
Total senior loans$110,329 $1,003,906 $1,722,599 $219,194 $1,108,206 $383,360 $4,547,594 
Senior loans:
Current-period write-offs$— $— $— $— $— $— $— 
Total current-period write-offs$— $— $— $— $— $— $— 
Total$110,329 $1,003,906 $1,722,599 $219,194 $1,108,206 $383,360 $4,547,594 
December 31, 2022
Amortized cost by origination year
2022 2021 2020 2019 2018 Prior Total
Senior loans by internal risk ratings:
1$— $— $— $— $— $— $— 
222,732 216,960 — 272,185 — — 511,877 
3907,161 1,609,556 98,874 505,377 110,356 — 3,231,324 
476,938 79,023 119,172 320,793 342,869 51,542 990,337 
5— — 71,269 118,135 55,732 — 245,136 
Total senior loans$1,006,831 $1,905,539 $289,315 $1,216,490 $508,957 $51,542 $4,978,674 
Senior loans:
Current-period write-offs$— $— $— $— $(4,400)$— $(4,400)
Total current-period write-offs$— $— $— $— $(4,400)$— $(4,400)
Total$1,006,831 $1,905,539 $289,315 $1,216,490 $508,957 $51,542 $4,978,674 
The table below summarizes the Company’s portfolio of loans held for investment on an amortized cost basis, by the results of its internal risk rating review process performed (dollars in thousands):
Risk ratingJune 30, 2023December 31, 2022
1$— $— 
2439,713 511,878 
33,100,413 3,231,324 
4515,210 990,337 
5492,258 245,135 
Total$4,547,594 $4,978,674 
Allowance for credit losses(250,244)(197,272)
Carrying value$4,297,350 $4,781,402 
Weighted average risk rating(1)
3.2 3.2 
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(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, 2023
Senior loansSubordinated and
mezzanine loans		Total
Allowance for credit losses for loans held for investment:
Beginning balance at April 1, 2023
$201,508 $— $201,508 
Allowance for credit losses, net48,736 — 48,736 
Subtotal250,244 — 250,244 
Allowance for credit losses on unfunded loan commitments:
Beginning balance at April 1, 2023
20,862 — 20,862 
Allowance for credit losses, net7,179 — 7,179 
Subtotal28,041 — 28,041 
Total allowance for credit losses$278,285 $— $278,285 
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 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 credit losses, net4,441 — 4,441 
Subtotal9,227 — 9,227 
Total allowance for credit losses$92,712 $671 $93,383 
For the Six Months Ended June 30, 2023
Senior loansSubordinated and
mezzanine loans 		Total
Allowance for credit losses for loans held for investment:
Beginning balance at January 1, 2023$197,272 $— $197,272 
Allowance for credit losses, net52,972 — 52,972 
Subtotal250,244 — 250,244 
Allowance for credit losses on unfunded loan commitments:
Beginning balance at January 1, 202317,314 — 17,314 
Allowance for credit losses, net10,727 — 10,727 
Subtotal28,041 — 28,041 
Total allowance for credit losses$278,285 $— $278,285 
For the Six Months Ended June 30, 2022
Senior loans Subordinated 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 
The following table presents the allowance for credit losses for loans held for investment (dollars in thousands):
June 30, 2023
General reserveSpecific reserveTotal reserve
Allowance for credit losses:
Loans held for investment$93,830 $156,414 $250,244 
Unfunded loan commitments8,287 19,754 28,041 
Total allowance for credit losses$102,117 $176,168 $278,285 
Total unpaid principal balance$4,074,992 $492,258 $4,567,250 
December 31, 2022
General reserveSpecific reserveTotal reserve
Allowance for credit losses:
Loans held for investment$119,190 $78,082 $197,272 
Unfunded loan commitments10,927 6,387 17,314 
Total allowance for credit losses$130,117 $84,469 $214,586 
Total unpaid principal balance$4,759,663 $245,135 $5,004,798 
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 portfolio of loans held for investment, by class of loans on amortized cost basis (dollars in thousands):
Days Outstanding as of June 30, 2023
CurrentDays: 30-59Days: 60-89 Days: 90 or moreTotal loans past dueTotal loans
Loans receivable:
Senior loans$4,062,563 $129,198 $— $355,833 $485,031 $4,547,594 
Total$4,062,563 $129,198 $— $355,833 $485,031 $4,547,594 
 
Days Outstanding as of December 31, 2022
Current Days: 30-59Days: 60-89Days: 90 or moreTotal loans past dueTotal loans
Loans receivable:
Senior loans$4,541,692 $365,713 $— $71,269 $436,982 $4,978,674 
Total$4,541,692 $365,713 $— $71,269 $436,982 $4,978,674 
See Note 2 of the consolidated financial statements for details of the Company's revenue recognition and allowance for credit losses accounting policies.
Schedule of Paid-in-Kind Interest
The following table presents the accrued PIK interest activity for the Company’s loans held for investment portfolio (dollars in thousands):
June 30, 2023
Balance as of January 1, 2023
$1,714 
Repayments of accrued PIK interest(542)
Balance as of March 31, 2023
$1,172 
Accrued PIK interest— 
Repayments of accrued PIK interest— 
Write-off of accrued PIK interest— 
Balance as of June 30, 2023
$1,172