Investments in Real Estate-Related Securities and Loans

3 Months Ended

Mar. 31, 2019

Investments in Real Estate-Related Securities and Loans

5. Investments in Real Estate-Related Securities and Loans

The following tables detail the Company’s investments in real estate-related securities and loans ($ in thousands):

					March 31, 2019
Number of Positions		Credit Rating⁽¹⁾		Collateral⁽²⁾	Weighted Average Coupon⁽³⁾	Weighted Average Maturity Date⁽⁴⁾	Face Amount/ Notional⁽⁵⁾		Cost Basis		Fair Value
CMBS - Floating:
	40	BB	Hospitality, Industrial, Multifamily, Office, Retail		L+2.81%	8/7/2024	$	978,540	$	976,867	$	977,019
	24	BBB		Hospitality, Industrial, Multifamily, Office	L+2.23%	6/26/2024		556,025		555,630		554,861
	22	B		Hospitality, Multifamily, Office	L+3.55%	8/17/2024		496,019		494,747		494,646
	3	A		Hospitality, Industrial, Retail	L+1.82%	1/3/2023		78,320		78,337		78,231
	8	Other		Multifamily	L+2.44%	8/12/2025		41,574		41,326		41,369
CMBS - Fixed:
	5	BBB		Multifamily	4.2%	7/16/2027		28,213		26,256		27,668
	1	BB		Hospitality	4.4%	9/22/2022		24,613		24,049		24,850
	1	B		Multifamily	5.2%	8/26/2022		6,704		6,687		6,767
	3	Other		Multifamily	4.3%	10/17/2027		16,998		15,762		16,354
CMBS - Interest Only:
	2	AAA		Multifamily	0.1%	4/19/2026		1,801,735		9,886		9,887
	1	BBB		Multifamily	0.1%	1/5/2028		225,802		1,417		1,418
	1	A		Multifamily	0.1%	5/2/2025		194,399		1,004		1,004
CMBS - Zero Coupon:
	2	Other		Multifamily	N/A	12/1/2026		166,793		82,572		87,600
Corporate Bonds:
	2	BB		Hospitality, Diversified	6.5%	7/7/2026		57,329		57,300		59,715
Term Loans:
	2	B		Hospitality	L+3.90%	10/2/2024		3,809		3,715		3,702
	1	BB		Hospitality	L+2.25%	8/29/2025		1,046		1,044		1,040
	118								$	2,376,599	$	2,386,131

					December 31, 2018
Number of Positions		Credit Rating⁽¹⁾		Collateral⁽²⁾	Weighted Average Coupon⁽³⁾	Weighted Average Maturity Date⁽⁴⁾	Face Amount/ Notional⁽⁵⁾		Cost Basis		Fair Value
CMBS:
	38	BB	Hospitality, Industrial, Multifamily, Office, Retail		L+2.83%	9/4/2024	$	941,240	$	939,742	$	930,411
	26	BBB		Hospitality, Industrial, Multifamily, Office	L+2.15%	11/18/2024		578,771		576,601		571,171
	21	B		Hospitality, Multifamily, Office	L+3.56%	9/19/2024		496,383		495,095		490,019
	3	A		Hospitality, Industrial, Retail	L+1.81%	3/10/2023		89,165		89,184		88,358
	7	Other		Multifamily	L+1.99%	6/13/2026		35,442		34,876		34,951
CMBS - Interest Only:
	2	AAA		Multifamily	0.1%	3/12/2027		1,802,581		9,959		9,957
	1	BBB		Multifamily	0.1%	5/25/2028		225,802		1,414		1,415
	1	A		Multifamily	0.1%	7/25/2025		194,399		1,001		1,001
CMBS - Zero Coupon:
	2	Other		Multifamily	N/A	3/2/2027		166,793		80,892		81,875
Corporate Bond:
	1	BB		Hospitality	6.5%	9/15/2026		52,652		52,652		50,755
	102								$	2,281,416	$	2,259,913

⁽¹⁾

AAA represents credit ratings of AAA and AAA-, A represents credit ratings of A+, A, and A-, BBB represents credit ratings of BBB+, BBB, and BBB-, BB represents credit ratings of BB+, BB, and BB-, and B represents credit ratings of B+, B, and B-. Other consists of investments that, as of March 31, 2019 and December 31, 2018, were either not ratable or have not been submitted to rating agencies.

⁽²⁾	Multifamily real estate-related securities and loans are collateralized by various forms of rental housing including single-family homes and apartments.

⁽³⁾	The term “L” refers to the one-month U.S. dollar-denominated London Interbank Offer Rate (“LIBOR”). As of March 31, 2019 and December 31, 2018, one-month LIBOR was equal to 2.5%.

⁽⁴⁾	Weighted average maturity date is based on the fully extended maturity date of the instrument or, in the case of CMBS, the underlying collateral.

⁽⁵⁾	Represents notional amount for interest only positions.

The Company’s investments in real estate-related securities and loans included CMBS collateralized by properties owned by Blackstone-advised investment vehicles and CMBS collateralized by loans originated or acquired by Blackstone-advised investment vehicles. The following table details the Company’s affiliate CMBS positions ($ in thousands):

	Fair Value				Interest Income
	March 31,		December 31,		Three Months Ended March 31,
	2019		2018		2019		2018
CMBS collateralized by properties	$	901,274	$	919,392	$	12,426	$	7,024
CMBS collateralized by a loan		165,818		163,404		2,097		686
Total	$	1,067,092	$	1,082,796	$	14,523	$	7,710

For additional information regarding the Company’s investments in affiliated CMBS, see Note 5 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The terms and conditions of such affiliated CMBS held as of March 31, 2019 are consistent with the terms described in such Note.

The Company’s investments in real estate-related securities and loans also included $66.5 million of CMBS collateralized by pools of commercial real estate debt, a portion of which included certain of the Company’s mortgage notes. The Company recognized $1.3 million of interest income related to such CMBS during the three months ended March 31, 2019.

During the three months ended March 31, 2019 and 2018, the Company recorded an unrealized gain of $31.0 million and $1.8 million, respectively, as a component of Income from Real Estate-Related Securities and Loans on the Company’s Condensed Consolidated Statements of Operations.

The Company did not sell any real estate-related securities or loans during the three months ended March 31, 2019 and 2018.