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, 2019

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: 001-14788

Blackstone Mortgage Trust, Inc.

(Exact name of Registrant as specified in its charter)

Maryland	94-6181186
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

345 Park Avenue, 42nd Floor

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 655-0220

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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, par value $0.01 per share	BXMT	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  ☒

The number of the registrant’s outstanding shares of class A common stock, par value $0.01 per share, outstanding as of July 16, 2019 was 134,288,584.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS		2
	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018		2
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018		3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018		4
	Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2019 and 2018		5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018		7
	Notes to Consolidated Financial Statements		9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		42
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		61
ITEM 4.	CONTROLS AND PROCEDURES		64
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		65
ITEM 1A.	RISK FACTORS		65
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		65
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		65
ITEM 4.	MINE SAFETY DISCLOSURES		65
ITEM 5.	OTHER INFORMATION		65
ITEM 6.	EXHIBITS		66
SIGNATURES		68

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

	June 30,			December 31,
	2019			2018
Assets
Cash and cash equivalents	$	80,584		$	105,662
Loans receivable, net		14,280,919			14,191,200
Other assets		203,501			170,513
Total Assets	$	14,565,004		$	14,467,375
Liabilities and Equity
Secured debt agreements, net	$	8,257,370		$	8,974,756
Loan participations sold, net		—			94,418
Securitized debt obligations, net		1,287,364			1,285,471
Secured term loan, net		491,598			—
Convertible notes, net		611,472			609,911
Other liabilities		140,775			128,212
Total Liabilities		10,788,579			11,092,768
Commitments and contingencies		—			—
Equity
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 134,288,258 and 123,435,738 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively		1,343			1,234
Additional paid-in capital		4,354,571			3,966,540
Accumulated other comprehensive loss		(29,420	)		(34,222	)
Accumulated deficit		(579,131	)		(569,428	)
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		3,747,363			3,364,124
Non-controlling interests		29,062			10,483
Total Equity		3,776,425			3,374,607
Total Liabilities and Equity	$	14,565,004		$	14,467,375

Note: The consolidated balance sheets as of June 30, 2019 and December 31, 2018 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc. As of both June 30, 2019 and December 31, 2018, assets of the consolidated VIEs totaled $1.5 billion and liabilities of the consolidated VIEs totaled $1.3 billion. Refer to Note 16 for additional discussion of the VIEs.

See accompanying notes to consolidated financial statements.

2

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Income from loans and other investments
Interest and related income	$	223,369		$	191,479		$	448,128		$	346,904
Less: Interest and related expenses		116,891			87,733			235,579			157,722
Income from loans and other investments, net		106,478			103,746			212,549			189,182
Other expenses
Management and incentive fees		20,984			22,388			40,774			37,880
General and administrative expenses		9,897			8,747			19,210			17,454
Total other expenses		30,881			31,135			59,984			55,334
Income before income taxes		75,597			72,611			152,565			133,848
Income tax provision		46			104			147			224
Net income		75,551			72,507			152,418			133,624
Net income attributable to non-controlling interests		(377	)		(195	)		(680	)		(353	)
Net income attributable to Blackstone Mortgage Trust,  Inc.	$	75,174		$	72,312		$	151,738		$	133,271
Net income per share of common stock basic and diluted	$	0.59		$	0.66		$	1.21		$	1.23
Weighted-average shares of common stock outstanding, basic and diluted		126,475,244			109,069,078			125,410,064			108,735,193

See accompanying notes to consolidated financial statements.

3

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income	$	75,551		$	72,507		$	152,418		$	133,624
Other comprehensive income
Unrealized loss on foreign currency translation		(9,578	)		(35,088	)		(4,164	)		(24,350	)
Realized and unrealized gain on derivative financial instruments		10,914			24,855			8,966			21,920
Other comprehensive income (loss)		1,336			(10,233	)		4,802			(2,430	)
Comprehensive income		76,887			62,274			157,220			131,194
Comprehensive income attributable to non-controlling interests		(377	)		(195	)		(680	)		(353	)
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$	76,510		$	62,079		$	156,540		$	130,841

See accompanying notes to consolidated financial statements.

4

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)

	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Stockholders’ Equity			Non-controlling Interests			Total Equity
Balance at December 31, 2018	$	1,234	$	3,966,540	$	(34,222	)	$	(569,428	)	$	3,364,124		$	10,483		$	3,374,607
Shares of class A common stock issued, net		23		65,358		—			—			65,381			—			65,381
Restricted class A common stock earned		—		7,639		—			—			7,639			—			7,639
Dividends reinvested		—		143		—			(132	)		11			—			11
Deferred directors’ compensation		—		125		—			—			125			—			125
Other comprehensive income		—		—		3,466			—			3,466			—			3,466
Net income		—		—		—			76,565			76,565			302			76,867
Dividends declared on common stock, $0.62 per share		—		—		—			(77,913	)		(77,913	)		—			(77,913	)
Contributions from non-controlling interests		—		—		—			—			—			1,470			1,470
Distributions to non-controlling interests		—		—		—			—			—			(64	)		(64	)
Balance at March 31, 2019	$	1,257	$	4,039,805	$	(30,756	)	$	(570,908	)	$	3,439,398		$	12,191		$	3,451,589
Shares of class A common stock issued, net		86		306,866		—			—			306,952			—			306,952
Restricted class A common stock earned		—		7,629		—			—			7,629			—			7,629
Dividends reinvested		—		146		—			(138	)		8			—			8
Deferred directors’ compensation		—		125		—			—			125			—			125
Other comprehensive income		—		—		1,336			—			1,336			—			1,336
Net income		—		—		—			75,174			75,174			377			75,551
Dividends declared on common stock, $0.62 per share		—		—		—			(83,259	)		(83,259	)		—			(83,259	)
Contributions from non-controlling interests		—		—		—			—			—			17,158			17,158
Distributions to non-controlling interests		—		—		—			—			—			(664	)		(664	)
Balance at June 30, 2019	$	1,343	$	4,354,571	$	(29,420	)	$	(579,131	)	$	3,747,363		$	29,062		$	3,776,425

See accompanying notes to consolidated financial statements.

5

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)

	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Stockholders’ Equity			Non-controlling Interests			Total Equity
Balance at December 31, 2017	$	1,079	$	3,506,861		$	(29,706	)	$	(567,168	)	$	2,911,066		$	6,340		$	2,917,406
Shares of class A common stock issued, net		3		—			—			—			3			—			3
Restricted class A common stock earned		—		6,848			—			—			6,848			—			6,848
Issuance of convertible notes		—		1,462			—			—			1,462			—			1,462
Dividends reinvested		—		122			—			(108	)		14			—			14
Deferred directors’ compensation		—		125			—			—			125			—			125
Other comprehensive income		—		—			7,803			—			7,803			—			7,803
Net income		—		—			—			60,958			60,958			158			61,116
Dividends declared on common stock, $0.62 per share		—		—			—			(67,066	)		(67,066	)		—			(67,066	)
Contributions from non-controlling interests		—		—			—			—			—			375			375
Distributions to non-controlling interests		—		—			—			—			—			(1,575	)		(1,575	)
Balance at March 31, 2018	$	1,082	$	3,515,418		$	(21,903	)	$	(573,384	)	$	2,921,213		$	5,298		$	2,926,511
Shares of class A common stock issued, net		32		102,463			—			—			102,495			—			102,495
Restricted class A common stock earned		—		6,653			—			—			6,653			—			6,653
Conversion of convertible notes		—		(20	)		—			—			(20	)		—			(20	)
Dividends reinvested		—		128			—			(115	)		13			—			13
Deferred directors’ compensation		—		125			—			—			125			—			125
Other comprehensive income		—		—			(10,233	)		—			(10,233	)		—			(10,233	)
Net income		—		—			—			72,313			72,313			195			72,508
Dividends declared on common stock, $0.62 per share		—		—			—			(69,079	)		(69,079	)		—			(69,079	)
Contributions from non-controlling interests		—		—			—			—			—			2,100			2,100
Distributions to non-controlling interests		—		—			—			—			—			(2,411	)		(2,411	)
Balance at June 30, 2018	$	1,114	$	3,624,767		$	(32,136	)	$	(570,265	)	$	3,023,480		$	5,182		$	3,028,662

See accompanying notes to consolidated financial statements.

6

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities
Net income	$	152,418		$	133,624
Adjustments to reconcile net income to net cash provided by operating activities
Non-cash compensation expense		15,522			13,754
Amortization of deferred fees on loans and debt securities		(28,511	)		(24,161	)
Amortization of deferred financing costs and premiums/discount on debt obligations		15,232			13,631
Changes in assets and liabilities, net
Other assets		(1,285	)		(16,582	)
Other liabilities		3,808			14,745
Net cash provided by operating activities		157,184			135,011
Cash flows from investing activities
Origination and fundings of loans receivable		(1,922,219	)		(4,200,035	)
Principal collections and sales proceeds from loans receivable and debt securities		1,807,121			1,966,125
Origination and exit fees received on loans receivable		17,721			62,200
Receipts under derivative financial instruments		9,893			20,784
Payments under derivative financial instruments		(2,941	)		(7,452	)
Collateral deposited under derivative agreements		(9,090	)		(17,750	)
Return of collateral deposited under derivative agreements		9,090			21,870
Net cash used in investing activities		(90,425	)		(2,154,258	)

continued...

See accompanying notes to consolidated financial statements.

7

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2019			2018
Cash flows from financing activities
Borrowings under secured debt agreements	$	1,464,038		$	4,602,835
Repayments under secured debt agreements		(2,172,557	)		(2,824,358	)
Proceeds from sale of loan participations		21,346			72,384
Repayment of loan participations		(115,874	)		—
Net proceeds from issuance of secured term loans		498,750			—
Payment of deferred financing costs		(23,323	)		(15,815	)
Contributions from non-controlling interests		18,628			2,475
Distributions to non-controlling interests		(728	)		(3,986	)
Net proceeds from issuance of convertible notes		—			214,775
Repayment of convertible notes		—			(192	)
Net proceeds from issuance of class A common stock		372,329			102,496
Dividends paid on class A common stock		(154,443	)		(133,968	)
Net cash (used in) provided by financing activities		(91,834	)		2,016,646
Net decrease in cash and cash equivalents		(25,075	)		(2,601	)
Cash and cash equivalents at beginning of period		105,662			102,518
Effects of currency translation on cash and cash equivalents		(3	)		7,140
Cash and cash equivalents at end of period	$	80,584		$	107,057
Supplemental disclosure of cash flows information
Payments of interest	$	(219,573	)	$	(138,451	)
Payments of income taxes	$	(99	)	$	(263	)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	$	(83,259	)	$	(69,094	)
Loan principal payments held by servicer, net	$	32,975		$	1,330

See accompanying notes to consolidated financial statements.

8

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from our loan portfolio. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 42nd Floor, New York, New York 10154. We were incorporated in Maryland in 1998, when we reorganized from a California common law business trust into a Maryland corporation.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. We believe we have made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing our consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission, or the SEC.

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made in the presentation of the prior period secured debt agreements in Note 5 to conform to the current period presentation.

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

In the third quarter of 2018, we contributed a loan to a single asset securitization vehicle, or the 2018 Single Asset Securitization, which is a VIE, and invested in the related subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. Refer to Note 16 for additional discussion of our VIEs.

9

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

In April 2017, we entered into a joint venture, or our Multifamily Joint Venture, with Walker & Dunlop Inc. to originate, hold, and finance multifamily bridge loans. Pursuant to the terms of the agreements governing the joint venture, Walker & Dunlop contributed 15% of the venture’s equity capital and we contributed 85%. We consolidate the Multifamily Joint Venture as we have a controlling financial interest. The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are owned by Walker & Dunlop. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on Walker & Dunlop’s pro rata ownership of our Multifamily Joint Venture.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

Revenue Recognition

Interest income from our loans receivable portfolio and debt securities is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan or debt security as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents.

During the second quarter of 2018, the letter of credit related to our restricted cash balance was cancelled and the cash was transferred out of our segregated bank account. As of both June 30, 2019 and December 31, 2018, we had no restricted cash on our consolidated balance sheets.

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $360.1 million and $320.0 million as of June 30, 2019 and December 31, 2018, respectively. This cash is maintained in segregated bank accounts, and these amounts are not included in the assets and liabilities presented in our consolidated balance sheets. Cash in these Servicing Accounts will be transferred by the respective third-party servicer to the borrower or us under the terms of the applicable loan agreement upon occurrence of certain future events. We do not generate any revenue or incur any expenses as a result of these Servicing Accounts.

Loans Receivable and Provision for Loan Losses

We originate and purchase commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager. Actual losses, if any, could ultimately differ from these estimates. 

10

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the risk factors of each loan, and assigns it a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 -	Very Low Risk
2 -	Low Risk
3 -	Medium Risk
4 -	High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.
5 -	Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

Debt Securities Held-to-Maturity

We classify our debt securities as held-to-maturity, as we have the intent and ability to hold these securities until maturity. We include our debt securities in other assets on our consolidated balance sheets at amortized cost.

If, based on current information and events, there is an adverse change in cash flows expected to be collected from the cash flows previously projected for one of our debt securities, an other-than-temporary impairment is deemed to have occurred. A change in expected cash flows is considered adverse if the present value of the revised cash flows (taking into consideration both the timing and amount of cash flows expected to be collected), discounted using the debt security’s current yield, is less than the present value of the previously estimated remaining cash flows. If an other-than-temporary impairment is considered to have occurred, the debt security is written down to fair value. The total other-than-temporary impairment is bifurcated into (i) the amount related to expected credit losses, and (ii) the amount related to fair value adjustments in excess of expected credit losses. The other-than-temporary impairment related to expected credit losses is calculated by comparing the amortized cost basis of the security to the present value of cash flows expected to be collected, discounted at the security’s current yield, and is recognized in earnings in the consolidated statement of operations. The remaining other-than-temporary impairment that is not related to expected credit losses is recognized in other comprehensive income (loss). A portion of other-than-temporary impairments recognized through earnings is accreted back to the amortized cost basis of the security through interest income, while amounts recognized through other comprehensive income (loss) are amortized over the life of the security with no impact on earnings.

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in net income prospectively. Changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of accumulated other comprehensive income (loss) on our consolidated financial statements. Deferred gains and losses are reclassified out of accumulated other comprehensive income (loss) and into net income in the same period or periods during which

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the hedged transaction affects earnings, and are presented in the same line item as the earnings effect of the hedged item. For cash flow hedges, this is typically when the periodic swap settlements are made, while for net investment hedges, this occurs when the hedged item is sold or substantially liquidated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its fair value are included in net income concurrently.

Secured Debt Agreements

Where applicable, we record investments financed with repurchase agreements as separate assets and the related borrowings under any repurchase agreements are recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the repurchase agreements are reported separately on our consolidated statements of operations.

Senior Loan Participations

In certain instances, we finance our loans through the non-recourse syndication of a senior loan interest to a third-party. Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining subordinate loan and not the non-consolidated senior interest we sold.

Secured Term Loan

We record our secured term loans as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the secured term loan as additional non-cash interest expense. 

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our convertible notes as of the respective issuance dates based on our nonconvertible debt borrowing rate. The equity component of each series of our convertible notes is reflected within additional paid-in capital on our consolidated balance sheet, and the resulting issue discount is amortized over the period during which such convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to such convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

ASC 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type

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of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

• Level 1: Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

• Level 2: Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.

• Level 3: Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third-parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee composed of members of senior management of our Manager, including our Chief Executive Officer, Chief Financial Officer, and other senior officers.

Certain of our other assets are reported at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets that are recorded at fair value are discussed further in Note 15. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager.

We are also required by GAAP to disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

• Loans receivable, net: The fair values of these loans were estimated by our Manager based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and indications of market value from other market participants.

• Debt securities held-to-maturity: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

• Secured debt agreements, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

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(Unaudited)

• Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

• Securitized debt obligations, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Secured term loan, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Convertible notes, net: Each series of the convertible notes is actively traded and their fair values were obtained using quoted market prices.

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. If we were to fail to meet these requirements, we may be subject to federal, state, and local income tax on current and past income, and penalties. Refer to Note 13 for additional information.

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain individuals employed by an affiliate of our Manager that vest over the life of the awards, as well as deferred stock units issued to certain members of our board of directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 14 for additional information.

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units. Refer to Note 11 for additional discussion of earnings per share.

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income (loss).

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Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

Recent Accounting Pronouncements

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,” or ASU 2019-04. ASU 2019-04 amends existing guidance originally issued by (i) ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13, (ii) ASU 2017-12 “Derivatives and Hedging Topic 815: Targeted Improvements to Accounting for Hedging Activities,” or ASU 2017-12, and (iii) ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” or ASU 2016-01. The amendments in ASU 2019-04 that relate to ASU 2016-13 clarify specific issues related to the implementation of the current expected credit loss model, which are effective for fiscal years beginning after December 15, 2019 and are to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. The amendments in ASU 2019-04 that relate to ASU 2017-12 primarily update guidance related to fair value hedges and do not have an impact on our consolidated financial statements. The amendments in ASU 2019-04 that relate to ASU 2016-01 primarily update guidance related to equity securities and do not have an impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses in our consolidated financial statements.

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(Unaudited)

3. LOANS RECEIVABLE, NET

The following table details overall statistics for our loans receivable portfolio ($ in thousands):

	June 30, 2019			December 31, 2018
Number of loans		123			125
Principal balance	$	14,372,950		$	14,293,970
Net book value	$	14,280,919		$	14,191,200
Unfunded loan commitments(1)	$	3,217,266		$	3,405,945
Weighted-average cash coupon(2)		5.42	%		5.67	%
Weighted-average all-in yield(2)		5.77	%		6.00	%
Weighted-average maximum maturity (years)(3)		3.7			3.9
___________________

(1)	Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.
(2)	As of June 30, 2019, 99% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 1% earned a fixed rate of interest. As of December 31, 2018, 98% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 2% earned a fixed rate of interest. Cash coupon and all-in yield assume applicable floating benchmark rates as of June 30, 2019 and December 31, 2018, respectively, for weighted-average calculation. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
(3)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of June 30, 2019, 63% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 37% were open to repayment by the borrower without penalty. As of December 31, 2018, 75% of our loans were subject to yield maintenance or other prepayment restrictions and 25% were open to repayment by the borrower without penalty.

Activity relating to our loans receivable portfolio was as follows ($ in thousands):

	Principal Balance			Deferred Fees / Other Items(1)			Net Book Value
December 31, 2018	$	14,293,970		$	(102,770	)	$	14,191,200
Loan fundings		1,922,219			—			1,922,219
Loan repayments		(1,833,414	)		—			(1,833,414	)
Unrealized (loss) gain on foreign currency translation		(9,825	)		204			(9,621	)
Deferred fees and other items		—			(17,721	)		(17,721	)
Amortization of fees and other items		—			28,256			28,256
June 30, 2019	$	14,372,950		$	(92,031	)	$	14,280,919
____________

(1)   Other items primarily consist of purchase discounts or premiums, exit fees, and deferred origination expenses.

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The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

June 30, 2019
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
Office	54	$	7,205,141	$	7,258,497		48%
Hotel	17		2,380,920		2,460,389		17
Multifamily	38		2,243,177		2,272,201		15
Industrial	5		685,128		688,981		5
Retail	3		381,509		386,617		3
Self-Storage	2		281,990		282,978		2
Condominium	1		228,817		230,258		2
Other	3		874,237		1,199,331		8
	123	$	14,280,919	$	14,779,252		100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
United States
Northeast	27	$	3,999,237	$	4,025,533		28%
West	26		2,953,508		2,995,900		20
Southeast	21		2,409,038		2,420,751		16
Midwest	10		1,109,007		1,115,860		8
Southwest	14		546,008		548,794		4
Northwest	4		175,039		175,770		1
Subtotal	102		11,191,837		11,282,608		77
International
United Kingdom	11		1,270,547		1,616,321		11
Spain	1		1,057,616		1,063,416		7
Australia	3		343,650		345,741		2
Germany	1		196,985		250,975		2
Canada	4		150,302		149,942		1
Belgium	1		69,982		70,249		—
Subtotal	21		3,089,082		3,496,644		23
Total	123	$	14,280,919	$	14,779,252		100%
____________

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million of such non-consolidated senior interests as of June 30, 2019.
(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

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December 31, 2018
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
Office	55	$	7,104,842	$	7,164,466		49%
Hotel	18		2,591,565		2,673,763		18
Multifamily	34		2,193,699		2,206,740		15
Industrial	5		680,808		685,776		5
Retail	4		451,099		452,900		3
Condominium	4		304,545		368,104		2
Self-Storage	2		278,473		280,043		2
Other	3		586,169		909,052		6
	125	$	14,191,200	$	14,740,844		100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
United States
Northeast	32	$	4,322,114	$	4,359,938		31%
West	29		3,137,072		3,222,706		22
Southeast	19		2,258,033		2,271,664		15
Midwest	9		1,161,637		1,170,619		8
Southwest	13		478,665		481,745		3
Northwest	4		238,844		239,872		2
Subtotal	106		11,596,365		11,746,544		81
International
Spain	1		1,124,174		1,131,334		8
United Kingdom	7		754,299		1,094,663		7
Canada	5		316,268		313,229		2
Australia	3		310,372		312,893		2
Belgium	1		70,621		71,007		—
Germany	1		11,585		63,637		—
Netherlands	1		7,516		7,537		—
Subtotal	19		2,594,835		2,994,300		19
Total	125	$	14,191,200	$	14,740,844		100%
____________

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $446.9 million of such non-consolidated senior interests as of December 31, 2018.
(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

Loan Risk Ratings

As further described in Note 2, our Manager evaluates our loan portfolio on a quarterly basis. In conjunction with our quarterly loan portfolio review, our Manager assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2.

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(Unaudited)

The following table allocates the principal balance and net book value of our loans receivable based on our internal risk ratings ($ in thousands):

June 30, 2019							December 31, 2018
Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Number of Loans	Net Book Value		Total Loan Exposure(1)(2)
	1	4	$	275,427	$	275,806	2	$	181,366	$	182,740
	2	38		4,208,307		4,235,448	38		3,860,432		3,950,025
	3	78		9,630,494		10,100,685	85		10,149,402		10,608,079
	4	3		166,691		167,313	—		—		—
	5	—		—		—	—		—		—
		123	$	14,280,919	$	14,779,252	125	$	14,191,200	$	14,740,844

____________

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million and $446.9 million of such non-consolidated senior interests as of June 30, 2019 and December 31, 2018, respectively.

(2)

Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

The weighted-average risk rating of our total loan exposure was 2.7 as of both June 30, 2019 and December 31, 2018. We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of June 30, 2019 or December 31, 2018.

Multifamily Joint Venture

As discussed in Note 2, we entered into a Multifamily Joint Venture in April 2017. As of June 30, 2019 and December 31, 2018, our Multifamily Joint Venture held $505.0 million and $334.6 million of loans, respectively, which are included in the loan disclosures above. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

4. OTHER ASSETS AND LIABILITIES

The following table details the components of our other assets ($ in thousands):

	June 30, 2019		December 31, 2018
Debt securities held-to-maturity(1)	$	94,595	$	96,167
Accrued interest receivable		51,065		56,679
Loan portfolio payments held by servicer(2)		43,236		6,133
Derivative assets		14,000		9,916
Prepaid expenses		278		647
Prepaid taxes		3		6
Other		324		965
Total	$	203,501	$	170,513
____________

(1)	Represents the subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization, with a yield to full maturity of L+10.0% and a maximum maturity date of June 9, 2025, assuming all extension options are exercised by the borrower. Refer to Note 16 for additional discussion.
(2)	Represents loan principal and interest payments held by our third-party loan servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle.

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(Unaudited)

The following table details the components of our other liabilities ($ in thousands):

	June 30, 2019		December 31, 2018
Accrued dividends payable	$	83,259	$	76,530
Accrued interest payable		25,933		25,588
Accrued management and incentive fees payable		20,984		18,586
Accounts payable and other liabilities		5,631		4,583
Derivative liabilities		4,968		2,925
Total	$	140,775	$	128,212

5. SECURED DEBT AGREEMENTS, NET

Our secured debt agreements include secured credit facilities, asset-specific financings, and a revolving credit agreement. The following table details our secured debt agreements ($ in thousands):

	Secured Debt Agreements
	Borrowings Outstanding
	June 30, 2019			December 31, 2018
Secured credit facilities	$	8,065,675		$	8,870,897
Asset-specific financings		217,938			81,739
Revolving credit agreement		—			43,845
Total secured debt agreements	$	8,283,613		$	8,996,481
Deferred financing costs(1)		(26,243	)		(21,725	)
Net book value of secured debt	$	8,257,370		$	8,974,756
___________

(1)   Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

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(Unaudited)

Secured Credit Facilities

During the six months ended June 30, 2019, we increased the maximum facility size of two of our existing credit facilities, providing an aggregate additional $310.0 million of credit capacity. The following tables detail our secured credit facilities ($ in thousands):

	June 30, 2019
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,861,121	$	1,861,121	$	—	$	2,353,629
Wells Fargo		1,742,942		1,251,130		491,812		2,285,101
Citibank		1,006,592		922,804		83,788		1,278,710
Barclays		933,424		902,146		31,278		1,166,780
JP Morgan		959,907		861,744		98,163		1,221,674
Bank of America		768,871		768,871		—		962,378
Morgan Stanley		434,199		378,990		55,209		576,614
Société Générale		321,182		321,182		—		419,034
Goldman Sachs		292,753		247,753		45,000		401,422
MetLife		233,616		233,616		—		296,356
Goldman Sachs - Multi. JV(3)		219,316		219,316		—		293,877
Bank of America - Multi. JV(3)		97,002		97,002		—		123,856
	$	8,870,925	$	8,065,675	$	805,250	$	11,379,431
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our secured credit facilities was $8.8 billion for the six months ended June 30, 2019. As of June 30, 2019, we had aggregate borrowings of $8.1 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.71% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.89% per annum, and a weighted-average advance rate of 79.5%. As of June 30, 2019, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.2 years.

21

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

	December 31, 2018
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,839,698	$	1,839,698	$	—	$	2,325,047
Wells Fargo		1,908,509		1,822,154		86,355		2,514,513
JP Morgan		1,010,628		1,010,628		—		1,266,259
Barclays		890,620		890,620		—		1,113,275
Citibank		852,470		663,917		188,553		1,076,085
Bank of America		873,446		873,446		—		1,090,117
MetLife		675,329		675,329		—		852,733
Morgan Stanley		341,241		276,721		64,520		457,496
Société Générale		321,182		321,182		—		404,048
Goldman Sachs		230,140		230,140		—		295,368
Goldman Sachs - Multi. JV(3)		170,060		170,060		—		212,983
Bank of America - Multi. JV(3)		97,002		97,002		—		121,636
	$	9,210,325	$	8,870,897	$	339,428	$	11,729,560
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our secured credit facilities was $7.1 billion for the six months ended December 31, 2018. As of December 31, 2018, we had aggregate borrowings of $8.9 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.72% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.90% per annum, and a weighted-average advance rate of 79.5%. As of December 31, 2018, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.5 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

22

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following tables outline the key terms of our credit facilities as of June 30, 2019:

Lender	Currency		Guarantee(1)	Margin Call(2)		Term/Maturity
Goldman Sachs - Multi. JV(3)		$	25%		Collateral marks only		July 12, 2020(6)
JP Morgan		$ / £	50%		Collateral marks only		January 7, 2021(7)
Bank of America - Multi. JV(3)		$	43%		Collateral marks only		July 19, 2021(8)
Deutsche Bank		$ / €	59%(4)		Collateral marks only		August 9, 2021(4)
Morgan Stanley		$ / £ / €	25%		Collateral marks only		March 1, 2022
Barclays		$ / £ / €	25%		Collateral marks only		June 18, 2024(9)
MetLife		$	50%		Collateral marks only		April 22, 2023(10)
Bank of America		$	50%		Collateral marks only		May 21, 2023(11)
Goldman Sachs		$	25%		Collateral marks only		October 22, 2023(12)
Citibank		$ / £ / € / A$ / C$	25%		Collateral marks only		Term matched(13)
Société Générale		$ / £ / €	25%		Collateral marks only		Term matched(13)
Wells Fargo		$ / C$	25%(5)		Collateral marks only		Term matched(13)
____________

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.
(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.
(4)	Includes two one-year extension options which may be exercised at our sole discretion. Specific borrowings outstanding of $850.7 million are 100% guaranteed and the related maturity dates are term-matched to the respective collateral assets. The remainder of the credit facility borrowings are 25% guaranteed.
(5)	In addition to the 25% guarantee across all borrowings, there is an incremental guarantee of $171.5 million related to $314.0 million of specific borrowings outstanding.
(6)	Includes a one-year extension option which may be exercised at our sole discretion.
(7)	Maturity dates for $520.6 million of specific borrowings outstanding are term-matched to the respective collateral assets.
(8)	Includes two one-year extension options which may be exercised at our sole discretion.
(9)	Includes four one-year extension options which may be exercised at our sole discretion.
(10)	Includes three one-year extension options which may be exercised at our sole discretion.
(11)	Includes two one-year extension options which may be exercised at our sole discretion.
(12)	Includes three one-year extension options which may be exercised at our sole discretion.
(13)	These secured credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.

Currency	Potential Borrowings(1)		Outstanding Borrowings		Floating Rate  Index(2)	Spread(3)	Advance Rate(4)
$		$  6,948,419		$  6,199,362	USD LIBOR	1.69 %		79.6 %
€		€     797,442		€     748,028	EURIBOR	1.50 %		80.0 %
£		£     564,386		£     564,386	GBP LIBOR	2.05 %		77.9 %
A$		A$     255,270		A$   255,270	BBSY	1.90 %		78.0 %
C$		C$     156,919		C$   156,925	CDOR	1.83 %		80.7 %
		$  8,870,925		$  8,065,675		1.71 %		79.5 %
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Floating rate indices are generally matched to the payment timing under the terms of each secured credit facility and its respective collateral assets.
(3)	Represents weighted-average spread over the applicable floating rate index, based on borrowings outstanding.
(4)	Represents weighted-average advance rate based on the approved outstanding principal balance of the collateral assets pledged.

23

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Asset-Specific Financings

The following tables detail our asset-specific financings ($ in thousands):

June 30, 2019

Asset-Specific Financings

Count

Principal Balance

Book Value

Wtd. Avg. Yield/Cost(1)

Guarantee(2)

Wtd. Avg. Term(3)

Collateral assets

4

$

281,620

$

268,864

L+4.94

%

n/a

Mar. 2023

Financing provided

4

217,938

209,912

L+3.53

%

84,547

Mar. 2023

December 31, 2018

Asset-Specific Financings

Count

Principal Balance

Book Value

Wtd. Avg. Yield/Cost(1)

Guarantee(2)

Wtd. Avg. Term(3)

Collateral assets

1

$

106,739

$

104,807

L+6.08

%

n/a

Aug. 2022

Financing provided

1

81,739

80,938

L+4.07

%

n/a

Aug. 2022

____________

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings is term-matched to the corresponding collateral loans.

The weighted-average outstanding balance of our asset-specific financings was $106.3 million for the six months ended June 30, 2019 and $50.4 million for the six months ended December 31, 2018.

Revolving Credit Agreement

We have a $250.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to nine months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The maturity date of the facility is April 4, 2020.

During the six months ended June 30, 2019, the weighted-average outstanding borrowings under the revolving credit agreement was $28.8 million and we recorded interest expense of $1.6 million, including $522,000 of amortization of deferred fees and expenses. As of June 30, 2019, we had no outstanding borrowings under the agreement.

During the six months ended December 31, 2018, the weighted-average outstanding borrowings under the revolving credit agreement was $31.7 million and we recorded interest expense of $1.7 million, including $551,000 of amortization of deferred fees and expenses. As of December 31, 2018, we had $43.8 million of borrowings outstanding under the agreement.

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $2.8 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to June 30, 2019; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 83.33% of our total assets. As of June 30, 2019 and December 31, 2018, we were in compliance with these covenants. Refer to Note 8 for information regarding financial covenants contained in the agreements governing our senior secured term loan facility.

24

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

6. LOAN PARTICIPATIONS SOLD, NET

The financing of a loan by the non-recourse sale of a senior interest in the loan through a participation agreement generally does not qualify as a sale under GAAP. Therefore, in the instance of such sales, we present the whole loan as an asset and the loan participation sold as a liability on our consolidated balance sheet until the loan is repaid. The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation. The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

We did not have any loan participations sold as of June 30, 2019. During the three and six months ended June 30, 2019, we recorded $1.6 million and $3.2 million, respectively, of interest expense related to our loan participations sold. During the three and six months ended June 30, 2018, we recorded $2.0 million and $3.5 million, respectively, of interest expense related to our loan participations sold. The following table details our loan participations sold as of December 31, 2018 ($ in thousands):

December 31, 2018

Principal

Loan Participations Sold

Count

Balance

Book Value

Yield/Cost(1)

Guarantee(2)

Term

Total loan

1

$

123,745

$

122,669

L+5.92

%

n/a

Feb. 2022

Senior participation(3)

1

94,528

94,418

L+4.07

%

n/a

Feb. 2022

____________

(1)	Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	As of December 31, 2018, our loan participations sold were non-recourse to us.
(3)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $110,000 as of December 31, 2018.

7. SECURITIZED DEBT OBLIGATIONS, NET

We have financed a pool of our loans through a collateralized loan obligation, or the CLO, and have also financed one of our loans through a single asset securitization vehicle, or the 2017 Single Asset Securitization. The CLO and the 2017 Single Asset Securitization have issued securitized debt obligations that are non-recourse to us. Both the CLO and the 2017 Single Asset Securitization are consolidated in our financial statements. Refer to Note 16 for further discussion of our CLO and 2017 Single Asset Securitization.

25

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following tables detail our securitized debt obligations ($ in thousands):

	June 30, 2019
Securitized Debt Obligations	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets		23	$	1,000,000	$	1,000,000		L+3.67	%		June 2022
Financing provided		1		817,500		812,857		L+1.70	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)		1		695,956		693,272		L+3.60	%		June 2023
Financing provided		1		474,620		474,507		L+1.65	%		June 2033
Total
Collateral assets		24	$	1,695,956	$	1,693,272		L+3.64	%
Financing provided(4)		2	$	1,292,120	$	1,287,364		L+1.68	%
	December 31, 2018
Securitized Debt Obligations	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets		26	$	1,000,000	$	1,000,000		6.25	%		Apr. 2022
Financing provided		1		817,500		811,023		L+1.74	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)		1		682,297		678,770		L+3.60	%		June 2023
Financing provided		1		474,620		474,448		L+1.65	%		June 2033
Total
Collateral assets		27	$	1,682,297	$	1,678,770		6.19	%
Financing provided(4)		2	$	1,292,120	$	1,285,471		L+1.71	%

____________

(1)	As of June 30, 2019, all of our loans financed by securitized debt obligations earned a floating rate of interest. As of December 31, 2018, 98% of our loans financed by securitized debt obligations earned a floating rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.
(2)	Loan term represents weighted-average final maturity, assuming all extension options are exercised by the borrower. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.
(3)	The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.
(4)	During the three and six months ended June 30, 2019, we recorded $12.5 million and $25.0 million, respectively, of interest expense related to our securitized debt obligations. During the three and six months ended June 30, 2018, we recorded $12.0 million and $23.1 million, respectively, of interest expense related to our securitized debt obligations.

26

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

8. SECURED TERM LOAN, NET

In April 2019 we entered into a senior secured term loan facility, or the Secured Term Loan. As of June 30, 2019, the following Secured Term Loan was outstanding ($ in thousands):

Term Loan Issuance	Face Value		Coupon Rate			All-in Cost(1)			Maturity
Term Loan B	$	500,000		L+2.50	%		L+2.80	%	April 23, 2026
____________

(1)   Includes issue discount and transaction expenses that are amortized through interest expense over the life of the Secured Term Loan.

The Secured Term Loan is partially amortizing, with an amount equal to 1.0% per annum of the original principal balance due in quarterly installments beginning on September 30, 2019. The issue discount and transaction expenses on the Secured Term Loan were $1.3 million and $7.4 million, respectively, which will be amortized into interest expense over the life of the Secured Term Loan. The guarantee under our Secured Term Loan contains the financial covenant that our indebtedness shall not exceed 83.33% of our total assets. As of June 30, 2019, we were in compliance with this covenant. Refer to Note 2 for additional discussion of our accounting policies for the Secured Term Loan.

9. CONVERTIBLE NOTES, NET

As of June 30, 2019, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

Convertible Notes Issuance	Face Value		Coupon Rate			All-in Cost(1)			Conversion Rate(2)		Maturity
May 2017	$	402,500		4.38	%		4.85	%		28.0324		May 5, 2022
March 2018	$	220,000		4.75	%		5.33	%		27.6052		March 15, 2023
____________

(1)

Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

(2)

Represents the shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $35.67 and $36.23 per share of class A common stock, respectively, for the May 2017 and March 2018 convertible notes. The cumulative dividend threshold as defined in the respective May 2017 and March 2018 convertible notes supplemental indentures have not been exceeded as of June 30, 2019.

The Convertible Notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on January 31, 2022 and December 14, 2022 for the May 2017 and March 2018 convertible notes, respectively, at the applicable conversion rate in effect on the conversion date. Thereafter, the Convertible Notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. We may not redeem the Convertible Notes prior to maturity. The last reported sale price of our class A common stock of $35.58 on June 28, 2019, the last trading day in the quarter ended June 30, 2019, was less than the per share conversion price of the May 2017 and March 2018 convertible notes. We have the intent and ability to settle each series of the Convertible Notes in cash and, as a result, the Convertible Notes did not have any impact on our diluted earnings per share.

Upon our issuance of the May 2017 convertible notes, we recorded a $979,000 discount based on the implied value of the conversion option and an assumed effective interest rate of 4.57%, as well as $8.4 million of issue discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the May 2017 convertible notes issuance is 4.91% per annum.

Upon our issuance of the March 2018 convertible notes, we recorded a $1.5 million discount based on the implied value of the conversion option and an assumed effective interest rate of 5.25%, as well as $5.2 million of issue discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the March 2018 convertible notes issuance is 5.49% per annum.

27

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the net book value of our Convertible Notes on our consolidated balance sheets ($ in thousands):

	June 30, 2019			December 31, 2018
Face value	$	622,500		$	622,500
Unamortized discount		(10,288	)		(11,740	)
Deferred financing costs		(740	)		(849	)
Net book value	$	611,472		$	609,911

The following table details our interest expense related to the Convertible Notes ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cash coupon	$	7,015	$	9,274	$	14,030	$	16,056
Discount and issuance cost amortization		788		1,206		1,560		2,395
Total interest expense	$	7,803	$	10,480	$	15,590	$	18,451

As of both June 30, 2019 and December 31, 2018, accrued interest payable for the Convertible Notes was $6.0 million. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

10. DERIVATIVE FINANCIAL INSTRUMENTS

The sole objective of our use of derivative financial instruments is to minimize the risks and/or costs associated with our investments and/or financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815 – “Derivatives and Hedging.” Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks. Refer to Note 2 for additional discussion of the accounting for designated and non-designated hedges.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates may also have other financial relationships.

Net Investment Hedges of Foreign Currency Risk

Certain of our international investments expose us to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional currency, the U.S. dollar. We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar.

28

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

 The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amount in thousands):

June 30, 2019				December 31, 2018
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Sell GBP Forward	4	£	360,600	Sell GBP Forward	3	£	192,300
Sell EUR Forward	2	€	339,200	Sell AUD Forward	2	A$	187,600
Sell AUD Forward	4	A$	123,900	Sell EUR Forward	1	€	185,000
Sell CAD Forward	2	C$	39,100	Sell CAD Forward	1	C$	70,600

Cash Flow Hedges of Interest Rate Risk

Certain of our transactions expose us to interest rate risks, which include a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate caps and swaps, and may also include interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk.

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

June 30, 2019
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike		Index		Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	2	C$	17,273		1.0%		CDOR	1.2
Interest Rate Caps	3	$	66,502		2.4%		USD LIBOR	0.2
Interest Rate Caps	1	C$	21,709		3.0%		CDOR	0.5
December 31, 2018
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike		Index		Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	3	C$	90,472		1.0%		CDOR	0.5
Interest Rate Caps	9	$	204,248		2.4%		USD LIBOR	0.5
Interest Rate Caps	2	C$	39,998		2.5%		CDOR	0.6

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt. During the twelve months following June 30, 2019, we estimate that an additional $82,000 will be reclassified from accumulated other comprehensive income (loss) as an increase to interest income.  

Non-designated Hedges

During the three and six months ended June 30, 2019, we recorded losses of $516,000 and gains of $144,000, respectively, related to non-designated hedges that were reported as a component of interest expense in our consolidated financial statements. During the three and six months ended June 30, 2018, we recorded losses of $69,000 and gains of $146,000, respectively, related to such non-designated hedges.

29

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following tables summarize our non-designated hedges (notional amount in thousands):

June 30, 2019
Non-designated Hedges	Number of Instruments	Notional Amount
Buy AUD / Sell USD Forward	1	A$	99,000
Buy USD / Sell AUD Forward	1	A$	99,000
Buy CAD / Sell USD Forward	3	C$	19,400
Buy USD / Sell CAD Forward	3	C$	19,400
Buy GBP / Sell EUR Forward	1	€	12,857
December 31, 2018
Non-designated Hedges	Number of Instruments	Notional Amount
Buy AUD / Sell USD Forward	1	A$	55,000
Buy USD / Sell AUD Forward	1	A$	55,000
Buy GBP / Sell USD Forward	1	£	23,200
Buy USD / Sell GBP Forward	1	£	23,200
Buy GBP / Sell EUR Forward	1	€	12,857

Valuation of Derivative Instruments

The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

	Fair Value of Derivatives in an Asset Position(1) as of				Fair Value of Derivatives in a Liability Position(2) as of
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	12,002	$	8,210	$	3,945	$	1,307
Interest rate derivatives		145		590		—		—
Total	$	12,147	$	8,800	$	3,945	$	1,307
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	1,853	$	1,116	$	1,023	$	1,618
Interest rate derivatives		—		—		—		—
Total	$	1,853	$	1,116	$	1,023	$	1,618
Total Derivatives	$	14,000	$	9,916	$	4,968	$	2,925
____________

(1) Included in other assets in our consolidated balance sheets.

(2) Included in other liabilities in our consolidated balance sheets.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

	Amount of Gain (Loss) Recognized in OCI on Derivatives						Location of Gain (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Derivatives in Hedging Relationships	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019							Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Net Investment Hedges
Foreign exchange contracts(1)	$	10,941		$	9,295			Interest Expense		$	—		$	—
Cash Flow Hedges
Interest rate derivatives		(33	)		(166	)		Interest Expense	(2)		(6	)		163
Total	$	10,908		$	9,129					$	(6	)	$	163
____________

(1)	During the three and six months ended June 30, 2019, we received net cash settlements of $5.0 million and $7.0 million, respectively, on our foreign currency forward contracts. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.
(2)	During the three months ended June 30, 2019, we recorded total interest and related expenses of $116.9 million, which included $6,000 related to our cash flow hedges. During the six months ended June 30, 2019, we recorded total interest and related expenses of $235.6 million, which included a $163,000 expense reduction related to income generated by our cash flow hedges.

Credit-Risk Related Contingent Features

We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of June 30, 2019, we were in a net asset position with one of our derivative counterparties and in a net liability position with our other derivative counterparty and did not have any collateral posted under these derivative contracts. As of December 31, 2018, we were in a net asset position with each such derivative counterparty and did not have any collateral posted under these derivative contracts.    

11. EQUITY

Stock and Stock Equivalents

Authorized Capital

As of June 30, 2019, we had the authority to issue up to 300,000,000 shares of stock, consisting of 200,000,000 shares of class A common stock and 100,000,000 shares of preferred stock. Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval. In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock. We did not have any shares of preferred stock issued and outstanding as of June 30, 2019.

Class A Common Stock and Deferred Stock Units

Holders of shares of our class A common stock are entitled to vote on all matters submitted to a vote of stockholders and are entitled to receive such dividends as may be authorized by our board of directors and declared by us, in all cases subject to the rights of the holders of shares of outstanding preferred stock, if any.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details our issuance of class A common stock during the six months ended June 30, 2019:

	Class A Common Stock Offerings				2019 Total / Wtd. Avg.
	June 2019		At-the-Market 2019(1)
Shares issued		8,625,000		1,909,628		10,534,628
Gross share issue price(2)	$	36.00	$	34.63	$	35.75
Net share issue price(3)	$	35.62	$	34.28	$	35.38
Net proceeds(4)	$	306,952	$	65,389	$	372,341
____________

(1)	Issuance represents shares issued under our at-the-market program.
(2)	Represents the weighted-average gross price per share paid by underwriters or sales agents, as applicable.
(3)	Represents the weighted-average net proceeds per share after underwriting or sales discounts and commissions.
(4)	Net proceeds represents proceeds received from the underwriters less applicable transaction costs.

We also issue restricted class A common stock under our stock-based incentive plans. Refer to Note 14 for additional discussion of these long-term incentive plans. In addition to our class A common stock, we also issue deferred stock units to certain members of our board of directors in lieu of cash compensation for services rendered. These deferred stock units are non-voting, but carry the right to receive dividends in the form of additional deferred stock units in an amount equivalent to the cash dividends paid to holders of shares of class A common stock.

The following table details the movement in our outstanding shares of class A common stock, including restricted class A common stock and deferred stock units:

	Six Months Ended June 30,
Common Stock Outstanding(1)	2019		2018
Beginning balance		123,664,577		108,081,077
Issuance of class A common stock(2)		10,535,181		3,252,325
Issuance of restricted class A common stock, net		317,339		305,703
Issuance of deferred stock units		15,697		15,919
Ending balance		134,532,794		111,655,024
____________

(1)	Includes deferred stock units held by members of our board of directors of 244,536 and 213,136 as of June 30, 2019 and 2018, respectively.
(2)	Includes 553 and 876 shares issued under our dividend reinvestment program during the six months ended June 30, 2019 and 2018, respectively.

Dividend Reinvestment and Direct Stock Purchase Plan

On March 25, 2014, we adopted a dividend reinvestment and direct stock purchase plan, under which we registered and reserved for issuance, in the aggregate, 10,000,000 shares of class A common stock. Under the dividend reinvestment component of this plan, our class A common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of class A common stock. The direct stock purchase component allows stockholders and new investors, subject to our approval, to purchase shares of class A common stock directly from us. During the three and six months ended June 30, 2019, we issued 272 shares and 553 shares, respectively, of class A common stock under the dividend reinvestment component of the plan compared to 421 shares and 876 shares, respectively, for the same periods in 2018. As of June 30, 2019, a total of 9,994,685 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

At the Market Stock Offering Program

On November 14, 2018, we entered into six equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our class A common stock. Sales of class A common stock made pursuant to our ATM Agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended. Actual sales will depend on a variety of factors including market conditions, the trading price of our class A common stock, our capital needs, and our determination of the appropriate sources of funding to meet such

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

needs. During the six months ended June 30, 2019, we issued and sold 1,909,628 shares of class A common stock under ATM Agreements, generating net proceeds totaling $65.4 million. During the six months ended June 30, 2018, we issued and sold 3,251,449 shares of class A common stock under ATM Agreements, with net proceeds totaling $102.5 million. As of June 30, 2019, shares of our class A common stock with an aggregate sales price of $363.8 million remained available for issuance under our ATM Agreements.

Dividends

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Our dividend policy remains subject to revision at the discretion of our board of directors. All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

On June 14, 2019, we declared a dividend of $0.62 per share, or $83.3 million, that was paid on July 15, 2019, to stockholders of record as of June 28, 2019.

The following table details our dividend activity ($ in thousands, except per share data):

	Three Months Ended  June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Dividends declared per share of common stock	$	0.62	$	0.62	$	1.24	$	1.24
Total dividends declared	$	83,259	$	69,094	$	161,172	$	136,174

Earnings Per Share

We calculate our basic and diluted earnings per share using the two-class method for all periods presented as the unvested shares of our restricted class A common stock qualify as participating securities, as defined by GAAP. These restricted shares have the same rights as our other shares of class A common stock, including participating in any dividends, and therefore have been included in our basic and diluted net income per share calculation. Our Convertible Notes are excluded from dilutive earnings per share as we have the intent and ability to settle these instruments in cash.

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding ($ in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income(1)	$	75,174	$	72,312	$	151,738	$	133,271
Weighted-average shares outstanding, basic and diluted		126,475,244		109,069,078		125,410,064		108,735,193
Per share amount, basic and diluted	$	0.59	$	0.66	$	1.21	$	1.23
__________

(1)   Represents net income attributable to Blackstone Mortgage Trust, Inc.

Other Balance Sheet Items

Accumulated Other Comprehensive Loss

As of June 30, 2019, total accumulated other comprehensive loss was $29.4 million, primarily representing (i) $108.8 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $79.4 million of net realized and unrealized gains related to changes in the fair value of derivative instruments. As of December 31, 2018, total accumulated other comprehensive loss was $34.2 million, primarily representing (i) $104.6 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $70.4 million of net realized and unrealized gains related to changes in the fair value of derivative instruments.

33

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Non-Controlling Interests

The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are not owned by us. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of our Multifamily Joint Venture. As of June 30, 2019, our Multifamily Joint Venture’s total equity was $193.7 million, of which $164.6 million was owned by us, and $29.1 million was allocated to non-controlling interests. As of December 31, 2018, our Multifamily Joint Venture’s total equity was $69.9 million, of which $59.4 million was owned by us, and $10.5 million was allocated to non-controlling interests.

12. OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our outstanding equity balance, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.

During the three and six months ended June 30, 2019, we incurred $13.3 million and $26.4 million, respectively, of management fees payable to our Manager, compared to $11.1 million and $22.2 million during the same periods in 2018. In addition, during the three and six months ended June 30, 2019, we incurred $7.7 million and $14.4 million, respectively, of incentive fees payable to our Manager, compared to $11.3 million and $15.7 million during the same periods in 2018.

As of June 30, 2019 and December 31, 2018 we had accrued management and incentive fees payable to our Manager of $21.0 million and $18.6 million, respectively.

34

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Professional services(1)	$	1,249	$	1,139	$	2,439	$	2,361
Operating and other costs(1)		894		830		1,249		1,339
Subtotal		2,143		1,969		3,688		3,700
Non-cash compensation expenses
Restricted class A common stock earned		7,629		6,653		15,272		13,504
Director stock-based compensation		125		125		250		250
Subtotal		7,754		6,778		15,522		13,754
Total general and administrative expenses	$	9,897	$	8,747	$	19,210	$	17,454
____________

(1) During the three and six months ended June 30, 2019, we recognized an aggregate $164,000 and $333,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and six months ended June 30, 2018, we recognized an aggregate $124,000 and $225,000, respectively, of expenses related to our Multifamily Joint Venture.

13. INCOME TAXES

We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of June 30, 2019 and December 31, 2018, we were in compliance with all REIT requirements.

Securitization transactions could result in the creation of taxable mortgage pools for federal income tax purposes. As a REIT, so long as we own 100% of the equity interests in a taxable mortgage pool, we generally would not be adversely affected by the characterization of the securitization as a taxable mortgage pool. Certain categories of stockholders, however, such as foreign stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, or UBTI, could be subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage pool. We currently own no UBTI producing assets and we do not intend to purchase or generate assets that produce UBTI distributions in the future.

During the three and six months ended June 30, 2019, we recorded a current income tax provision of $46,000 and $147,000, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes. During the three and six months ended June 30, 2018, we recorded a current income tax provision of $104,000 and $224,000, respectively. We did not have any deferred tax assets or liabilities as of June 30, 2019 or December 31, 2018.  

Effective January 1, 2018, under legislation from the Tax Cuts and Jobs Act of 2017, the maximum U.S. federal corporate income tax rate was reduced from 35% to 21%. Accordingly, to the extent that the activities of our taxable REIT subsidiaries generate taxable income in future periods, they may be subject to lower U.S. federal income tax rates.

35

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)  

We have net operating losses, or NOLs, generated by our predecessor business that may be carried forward and utilized in current or future periods. As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our NOLs is generally limited to $2.0 million per annum by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust. As of December 31, 2018, we had estimated NOLs of $159.0 million that will expire in 2029, unless they are utilized by us prior to expiration.

As of June 30, 2019, tax years 2015 through 2018 remain subject to examination by taxing authorities.

14. STOCK-BASED INCENTIVE PLANS

We are externally managed by our Manager and do not currently have any employees. However, as of June 30, 2019, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through our issuance of stock-based instruments.

We had stock-based incentive awards outstanding under nine benefit plans as of June 30, 2019. Seven of such benefit plans have expired and no new awards may be issued under them. Under our two current benefit plans, a maximum of 5,000,000 shares of our class A common stock may be issued to our Manager, our directors and officers, and certain employees of affiliates of our Manager. As of June 30, 2019, there were 3,973,619 shares available under our current benefit plans.

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2018		1,614,907		$	32.94
Granted		334,904			31.54
Vested		(420,780	)		32.15
Forfeited		(17,565	)		31.55
Balance as of June 30, 2019		1,511,466		$	32.87

These shares generally vest in installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of our current benefit plans. The 1,511,466 shares of restricted class A common stock outstanding as of June 30, 2019 will vest as follows: 527,627 shares will vest in 2019; 649,043 shares will vest in 2020; and 334,796 shares will vest in 2021. As of June 30, 2019, total unrecognized compensation cost relating to unvested share-based compensation arrangements was $44.9 million based on the grant date fair value of shares granted subsequent to July 1, 2018. The compensation cost of our share based compensation arrangements for awards granted before July 1, 2018 is based on $31.43, the closing price of our class A common stock on the last trading day prior to July 1, 2018. This cost is expected to be recognized over a weighted-average period of 1.1 years from June 30, 2019.

36

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

15. FAIR VALUES

Assets and Liabilities Measured at Fair Value

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	June 30, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Derivatives	$	—	$	14,000	$	—	$	14,000	$	—	$	9,916	$	—	$	9,916
Liabilities
Derivatives	$	—	$	4,968	$	—	$	4,968	$	—	$	2,925	$	—	$	2,925

Refer to Note 2 for further discussion regarding fair value measurement.

Fair Value of Financial Instruments

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value.

37

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the book value, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):

	June 30, 2019						December 31, 2018
	Book Value		Face Amount		Fair Value		Book Value		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	80,584	$	80,584	$	80,584	$	105,662	$	105,662	$	105,662
Loans receivable, net		14,280,919		14,372,950		14,375,273		14,191,200		14,293,970		14,294,836
Debt securities held-to-maturity(1)		94,595		97,174		96,239		96,167		99,000		96,600
Financial liabilities
Secured debt agreements, net		8,257,370		8,283,613		8,283,613		8,974,756		8,996,481		8,996,481
Loan participations sold, net		—		—		—		94,418		94,528		94,528
Securitized debt obligations, net		1,287,364		1,292,120		1,291,784		1,285,471		1,292,120		1,283,086
Secured term loan, net		491,598		500,000		501,095		—		—		—
Convertible notes, net		611,472		622,500		649,275		609,911		622,500		605,348
____________

(1) Included in other assets on our consolidated balance sheets.

Estimates of fair value for cash and cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 inputs. Estimates of fair value for debt securities held-to-maturity, securitized debt obligations, and the secured term loan are measured using observable, quoted market prices, in inactive markets, or Level 2 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.

16. VARIABLE INTEREST ENTITIES

Consolidated Variable Interest Entities

We have financed a portion of our loans through the CLO and the 2017 Single Asset Securitization, both of which are VIEs. We are the primary beneficiary of, and therefore consolidate, the CLO and the 2017 Single Asset Securitization on our balance sheet as we (i) control the relevant interests of the CLO and the 2017 Single Asset Securitization that give us power to direct the activities that most significantly affect the CLO and the 2017 Single Asset Securitization, and (ii) have the right to receive benefits and obligation to absorb losses of the CLO and the 2017 Single Asset Securitization through the subordinate interests we own.

38

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

The following table details the assets and liabilities of our consolidated CLO and 2017 Single Asset Securitization VIEs ($ in thousands):

	June 30, 2019		December 31, 2018
Assets:
Loans receivable, net	$	1,467,626	$	1,500,000
Other assets		37,043		5,440
Total assets	$	1,504,669	$	1,505,440
Liabilities:
Securitized debt obligations, net	$	1,287,364	$	1,285,471
Other liabilities		1,997		2,155
Total liabilities	$	1,289,361	$	1,287,626

Assets held by these VIEs are restricted and can be used only to settle obligations of the VIEs, including the subordinate interests owned by us. The liabilities of these VIEs are non-recourse to us and can only be satisfied from the assets of the VIEs. The consolidation of these VIEs results in an increase in our gross assets, liabilities, interest income and interest expense, however it does not affect our stockholders’ equity or net income.

Non-Consolidated Variable Interest Entities

In the third quarter of 2018, we contributed a $517.5 million loan to the $1.0 billion 2018 Single Asset Securitization, which is a VIE, and invested in the related $99.0 million subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. Our maximum exposure to loss from the 2018 Single Asset Securitization is limited to our book value of $94.6 million as of June 30, 2019. Refer to Note 17 for further details of this transaction.

We are not obligated to provide, have not provided, and do not intend to provide financial support to these consolidated and non-consolidated VIEs.

17. TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2019, and will be automatically renewed for a one-year term upon such date and each anniversary thereafter unless earlier terminated.

As of June 30, 2019 and December 31, 2018, our consolidated balance sheets included $21.0 million and $18.6 million of accrued management and incentive fees payable to our Manager, respectively. During the three and six months ended June 30, 2019, we paid management and incentive fees of $19.8 million and $38.4 million, respectively, to our Manager, compared to $15.5 million and $29.8 million during the same periods of 2018. In addition, during the three and six months ended June 30, 2019, we reimbursed our Manager for expenses incurred on our behalf of $242,000 and $430,000, respectively, compared to $215,000 and $405,000 during the same periods of 2018.

As of June 30, 2019, our Manager held 723,542 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $22.9 million, and vest in installments over three years from the date of issuance. During the three and six months ended June 30, 2019, we recorded non-cash expenses related to shares held by our Manager of $3.9 million and $7.7 million, respectively, compared to $3.2 million and $6.4 million during the same periods of 2018. Refer to Note 14 for further details on our restricted class A common stock.

An affiliate of our Manager is the special servicer of the CLO. This affiliate did not earn any special servicing fees related to the CLO during the six months ended June 30, 2019 or 2018.

39

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

During the three and six months ended June 30, 2019, we incurred $90,000 and $176,000, respectively, of expenses for various administrative, compliance, and capital market data services to third-party service providers that are affiliates of our Manager, compared to $153,000 and $293,000 during the same periods of 2018.

In the second quarter of 2019, certain Blackstone-advised investment vehicles acquired an aggregate $55.0 million participation, or 11% of the total Secured Term Loan as a part of a broad syndication lead-arranged by JP Morgan. Blackstone Advisory Partners L.P., an affiliate of our Manager, was engaged as a book-runner for the transaction and received a fee of $500,000 in such capacity. Both of these transactions were on terms equivalent to those of unaffiliated parties.

In the second quarter of 2019, we originated €191.8 million of a total €391.3 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third-party without our involvement and our 49% interest in the senior loan was made on such market terms.

In the first quarter of 2019, we originated £240.1 million of a total £490.0 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third-party without our involvement and our 49% interest in the senior loan was made on such market terms.

During the six months ended June 30, 2018, we originated two loans whereby each respective borrower engaged an affiliate of our Manager to act as title insurance agent in connection with each transaction. We did not incur any expenses or receive any revenues as a result of these transactions. We did not have any similar transactions during the six months ended June 30, 2019.

In the second quarter of 2018, we acquired from an unaffiliated third-party a 50% interest in a $1.0 billion senior loan to a borrower that is partially owned by a Blackstone-advised investment vehicle. In the third quarter of 2018, we contributed this loan to the 2018 Single Asset Securitization and invested in the related subordinate risk retention position. We will forgo all non-economic rights under the loan, including voting rights, so long as Blackstone-advised investment vehicles own the borrower above a certain threshold. Refer to Note 16 for further details on this transaction.

In the first quarter of 2018, we originated €1.0 billion of a total €7.3 billion senior term facility, or the Senior Term Facility, for the acquisition of a portfolio of Spanish real estate assets and a Spanish real estate management and loan servicing company by a joint venture between Banco Santander S.A. and certain Blackstone-advised investment vehicles. These investment vehicles own 51% of the joint venture, and we will forgo all non-economic rights under the Senior Term Facility, including voting rights, so long as Blackstone-advised investment vehicles control the joint venture. The Senior Term Facility was negotiated by the joint venture with third-party investment banks without our involvement, and our 14% interest in the Senior Term Facility was made on such market terms.

In the first quarter of 2018, we originated a $330.0 million senior loan, the proceeds of which were used by the borrower to repay an existing loan owned by a Blackstone-advised investment vehicle.

18. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of June 30, 2019, we had unfunded commitments of $3.2 billion related to 91 loans receivable, which amounts will generally be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.

40

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(Unaudited)

Principal Debt Repayments

Our contractual principal debt repayments as of June 30, 2019 were as follows ($ in thousands):

			Payment Timing
	Total		Less Than		1 to 3		3 to 5		More Than
	Obligation		1 Year		Years		Years		5 Years
Principal repayments under secured debt agreements(1)	$	8,283,613	$	109,374	$	3,266,552	$	4,520,799	$	386,888
Principal repayments of secured term loans(2)		500,000		3,750		10,000		10,000		476,250
Principal repayments of convertible notes(3)		622,500		—		402,500		220,000		—
Total(4)	$	9,406,113	$	113,124	$	3,679,052	$	4,750,799	$	863,138

____________

(1)	The allocation of repayments under our secured debt agreements is based on the earlier of (i) the maturity date of each facility, or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.
(2)	The Secured Term Loan is partially amortizing, with an amount equal to 1.0% per annum of the original principal balance due in quarterly installments. Refer to Note 8 for further details on our secured term loan.
(3)	Reflects the outstanding principal balance of Convertible notes, excluding any potential conversion premium. Refer to Note 9 for further details on our Convertible notes.
(4)	Does not include $406.3 million of non-consolidated senior interests and $1.3 billion of securitized debt obligations, as the satisfaction of these liabilities will not require cash outlays from us.

Board of Directors’ Compensation

As of June 30, 2019, of the eight members of our board of directors, our five independent directors are entitled to annual compensation of $175,000 each, $75,000 of which will be paid in the form of cash and $100,000 in the form of deferred stock units. The other three board members, including our chairman and our chief executive officer, are not compensated by us for their service as directors. In addition, (i) the chair of our audit committee receives additional annual cash compensation of $20,000, (ii) the other members of our audit committee receive additional annual cash compensation of $10,000, and (iii) the chairs of each of our compensation and corporate governance committees receive additional annual cash compensation of $10,000.

Litigation

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2019, we were not involved in any material legal proceedings.

41

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us,” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In addition to historical data, this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to, among other things, our business, operations and financial performance. You can identify these forward-looking statements by the use of words such as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “seeks,” “anticipates,” “should,” “could,” “may,” “designed to,” “foreseeable future,” “believe,” “scheduled,” and similar expressions. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Our actual results or outcomes may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December 31, 2018 and elsewhere in this quarterly report on Form 10-Q.

Introduction

Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from our loan portfolio. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” We are headquartered in New York City.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

I. Key Financial Measures and Indicators

As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Core Earnings, and book value per share. For the three months ended June 30, 2019 we recorded earnings per share of $0.59, declared a dividend of $0.62 per share, and reported $0.68 per share of Core Earnings. In addition, our book value per share as of June 30, 2019 was $27.85. As further described below, Core Earnings is a measure that is not prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. We use Core Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan activity and operations.

Earnings Per Share and Dividends Declared

The following table sets forth the calculation of basic and diluted net income per share and dividends declared per share ($ in thousands, except per share data):

	Three Months Ended
	June 30, 2019		March 31, 2019
Net income(1)	$	75,174	$	76,565
Weighted-average shares outstanding, basic and diluted		126,475,244		124,333,048
Net income per share, basic and diluted	$	0.59	$	0.62
Dividends declared per share	$	0.62	$	0.62
____________

(1) Represents net income attributable to Blackstone Mortgage Trust, Inc.

42

Core Earnings

Core Earnings is a non-GAAP measure, which we define as GAAP net income (loss), including realized gains and losses not otherwise included in GAAP net income (loss), and excluding (i) net income (loss) attributable to our CT Legacy Portfolio, (ii) non-cash equity compensation expense, (iii) depreciation and amortization, (iv) unrealized gains (losses), and (v) certain non-cash items. Core Earnings may also be adjusted from time to time to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as determined by our Manager, subject to approval by a majority of our independent directors.

We believe that Core Earnings provides meaningful information to consider in addition to our net income and cash flow from operating activities determined in accordance with GAAP. This adjusted measure helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. Although, according to the management agreement between our Manager and us, or our Management Agreement, we calculate the incentive and base management fees due to our Manager using Core Earnings before our incentive fee expense, we report Core Earnings after incentive fee expense, as we believe this is a more meaningful presentation of the economic performance of our class A common stock.

Core Earnings does not represent net income or cash generated from operating activities and should not be considered as an alternative to GAAP net income, or an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. In addition, our methodology for calculating Core Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Core Earnings may not be comparable to the Core Earnings reported by other companies.

The following table provides a reconciliation of Core Earnings to GAAP net income ($ in thousands, except per share data):

	Three Months Ended
	June 30, 2019		March 31, 2019
Net income(1)	$	75,174	$	76,565
Non-cash compensation expense		7,754		7,768
Hedging and foreign currency income, net(2)		3,237		3,271
Other items		58		95
Core Earnings	$	86,223	$	87,699
Weighted-average shares outstanding, basic and diluted		126,475,244		124,333,048
Core Earnings per share, basic and diluted	$	0.68	$	0.71

____________

(1)

Represents net income attributable to Blackstone Mortgage Trust.

(2)

Primarily represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and USD LIBOR. These forward contracts effectively convert the rate exposure to USD LIBOR, resulting in additional interest income earned in U.S. dollar terms. These amounts are not included in GAAP net income, but rather as a component of Other Comprehensive Income in our consolidated financial statements.

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Book Value Per Share

The following table calculates our book value per share ($ in thousands, except per share data):

	June 30, 2019		March 31, 2019
Stockholders’ equity	$	3,747,363	$	3,439,398
Shares
Class A common stock		134,288,258		125,666,550
Deferred stock units		244,536		236,803
Total outstanding		134,532,794		125,903,353
Book value per share	$	27.85	$	27.32

II. Loan Portfolio

During the quarter ended June 30, 2019, we originated or acquired $1.3 billion of loans. Loan fundings during the quarter totaled $1.1 billion, including $15.3 million of non-consolidated senior interests. Loan repayments during the quarter totaled $1.4 billion, including $48.3 million of non-consolidated senior interests. We generated interest income of $223.4 million and incurred interest expense of $116.9 million during the quarter, which resulted in $106.5 million of net interest income during the three months ended June 30, 2019.

Portfolio Overview

The following table details our loan origination activity ($ in thousands):

	Three Months Ended			Six Months Ended
	June 30, 2019			June 30, 2019
Loan originations(1)	$	1,256,527		$	1,955,259
Loan fundings(2)	$	1,138,222		$	1,944,463
Loan repayments(3)		(1,386,255	)		(1,894,478	)
Total net (repayments) fundings	$	(248,033	)	$	49,985

____________

(1)	Includes new loan originations and additional commitments made under existing loans.
(2)	Loan fundings during the three and six months ended June 30, 2019 include $15.3 million and $22.2 million, respectively, of additional fundings under related non-consolidated senior interests.
(3)	Loan repayments during the three and six months ended June 30, 2019 include $48.3 million and $61.1 million, respectively, of additional repayments of loan exposure under related non-consolidated senior interests.

44

The following table details overall statistics for our investment portfolio as of June 30, 2019 ($ in thousands):

				Total Investment Exposure
	Balance Sheet Portfolio(1)			Loan Exposure(1)(2)			Other Investments(3)			Total Investment Portfolio
Number of investments		123			123			1			124
Principal balance	$	14,372,950		$	14,779,252		$	1,015,906		$	15,795,158
Net book value	$	14,280,919		$	14,280,919		$	94,595		$	14,375,514
Unfunded loan commitments(4)	$	3,217,266		$	3,262,605		$	—		$	3,262,605
Weighted-average cash coupon(5)		L + 3.37	%		L + 3.42	%		L + 2.75	%		L + 3.38	%
Weighted-average all-in yield(5)		L + 3.73	%		L + 3.76	%		L + 2.99	%		L + 3.71	%
Weighted-average maximum maturity (years)(6)		3.7			3.7			6.0			3.9
Loan to value (LTV)(7)		63.9	%		64.0	%		42.6	%		62.7	%
____________

(1)	Excludes investment exposure to the $97.2 million subordinate risk retention interest we own in the $1.0 billion 2018 Single Asset Securitization. Refer to Notes 4 and 16 to our consolidated financial statements for further discussion of the 2018 Single Asset Securitization.
(2)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million of such non-consolidated senior interests that are not included in our balance sheet portfolio.
(3)	Includes investment exposure to the $1.0 billion 2018 Single Asset Securitization. We do not consolidate the 2018 Single Asset Securitization on our consolidated financial statements, and instead reflect our $97.2 million subordinate risk retention investment as a component of other assets on our consolidated balance sheet. Refer to Notes 4 and 16 to our consolidated financial statements for further discussion of the 2018 Single Asset Securitization.
(4)	Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.
(5)	As of June 30, 2019, 97% of our loans by total loan exposure earned a floating rate of interest, primarily indexed to USD LIBOR, and 3% earned a fixed rate of interest. The weighted-average cash coupon and all-in yield are expressed in terms excluding the relevant floating benchmark rates as of June 30, 2019. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
(6)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date. As of June 30, 2019, 67% of our loans and other investments were subject to yield maintenance or other prepayment restrictions and 33% were open to repayment by the borrower without penalty.
(7)	Based on LTV as of the dates loans and other investments were originated or acquired by us.

The charts below detail the geographic distribution and types of properties securing our investment portfolio, as of June 30, 2019:

   

Refer to section VI of this Item 2 for details of our loan portfolio, on a loan-by-loan basis.

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Asset Management

We actively manage the investments in our loan portfolio and exercise the rights afforded to us as a lender, including collateral level budget approvals, lease approvals, loan covenant enforcement, escrow/reserve management, collateral release approvals, and other rights that we may negotiate.

As discussed in Note 2 to our consolidated financial statements, our Manager performs a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5,” from less risk to greater risk. The following table allocates the principal balance and total loan exposure balances based on our internal risk ratings ($ in thousands):

	June 30, 2019
Risk Rating	Number   of Loans		Net Book Value		Total Loan Exposure(1)(2)
1		4	$	275,427	$	275,806
2		38		4,208,307		4,235,448
3		78		9,630,494		10,100,685
4		3		166,691		167,313
5		—		—		—
		123	$	14,280,919	$	14,779,252

____________

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million of such non-consolidated senior interests as of June 30, 2019.

(2)

Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. Refer to Notes 4 and 16 to our consolidated financial statements for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

The weighted-average risk rating of our total loan exposure was 2.7 as of both June 30, 2019 and December 31, 2018.

Multifamily Joint Venture

As of June 30, 2019, our Multifamily Joint Venture held $505.0 million of loans, which are included in the loan disclosures above. Refer to Note 2 to our consolidated financial statements for additional discussion of our Multifamily Joint Venture.

46

Portfolio Financing

Our portfolio financing arrangements include secured credit facilities, asset-specific financings, a revolving credit agreement, loan participations sold, non-consolidated senior interests, and securitized debt obligations.

The following table details our portfolio financing ($ in thousands):

	Portfolio Financing
	Outstanding Principal Balance
	June 30, 2019		December 31, 2018
Secured credit facilities	$	8,065,675	$	8,870,897
Asset-specific financings		217,938		81,739
Revolving credit agreement		—		43,845
Loan participations sold		—		94,528
Non-consolidated senior interests(1)		406,302		446,874
Securitized debt obligations		1,292,120		1,292,120
Total portfolio financing	$	9,982,035	$	10,830,003

____________ 

(1)   These non-consolidated senior interests provide structural leverage for our net investments which are reflected in the form of mezzanine loans or other subordinate interests on our balance sheet and in our results of operations.

Secured Credit Facilities

The following table details our secured credit facilities ($ in thousands):

	June 30, 2019
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,861,121	$	1,861,121	$	—	$	2,353,629
Wells Fargo		1,742,942		1,251,130		491,812		2,285,101
Citibank		1,006,592		922,804		83,788		1,278,710
Barclays		933,424		902,146		31,278		1,166,780
JP Morgan		959,907		861,744		98,163		1,221,674
Bank of America		768,871		768,871		—		962,378
Morgan Stanley		434,199		378,990		55,209		576,614
Société Générale		321,182		321,182		—		419,034
Goldman Sachs		292,753		247,753		45,000		401,422
MetLife		233,616		233,616		—		296,356
Goldman Sachs - Multi. JV(3)		219,316		219,316		—		293,877
Bank of America - Multi. JV(3)		97,002		97,002		—		123,856
	$	8,870,925	$	8,065,675	$	805,250	$	11,379,431

____________ 

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 to our consolidated financial statements for additional discussion of our Multifamily Joint Venture.

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Asset-Specific Financings

The following tables detail our asset-specific financings ($ in thousands):

June 30, 2019

Principal

Book

Wtd. Avg.

Wtd. Avg.

Asset-Specific Financings

Count

Balance

Value

Yield/Cost(1)

Guarantee(2)

Term(3)

Collateral assets

4

$

281,620

$

268,864

L+4.94

%

n/a

Mar. 2023

Financing provided

4

217,938

209,912

L+3.53

%

84,547

Mar. 2023

___________
(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.

Revolving Credit Agreement

We have a $250.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to nine months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The maturity date of the facility is April 4, 2020. As of June 30, 2019, we had no outstanding borrowings under the agreement.    

Non-Consolidated Senior Interests

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. These non-consolidated senior interests provide structural leverage for our net investments which are reflected in the form of mezzanine loans or other subordinate interests on our balance sheet and in our results of operations. The following table details the subordinate interests retained on our balance sheet and the related non-consolidated senior interests as of June 30, 2019 ($ in thousands):

June 30, 2019

Principal

Book

Wtd. Avg.

Wtd. Avg.

Non-Consolidated Senior Interests

Count

Balance

Value

Yield/Cost(1)

Guarantee

Term

Total loan

2

$

501,446

n/a

6.03

%

n/a

Oct. 2022

Senior participation

2

406,302

n/a

4.49

%

n/a

Oct. 2022

___________
(1)	Our floating rate loans and related liabilities were indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, all-in yield/cost includes the amortization of deferred fees / financing costs.

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Securitized Debt Obligations

The following table details our securitized debt obligations ($ in thousands):

	June 30, 2019
		Principal		Book		Wtd. Avg.
Securitized Debt Obligations	Count	Balance		Value		Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets	23	$	1,000,000	$	1,000,000		L+3.67	%		June 2022
Financing provided	1		817,500		812,857		L+1.70	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)	1		695,956		693,272		L+3.60	%		June 2023
Financing provided	1		474,620		474,507		L+1.65	%		June 2033
Total
Collateral assets	24	$	1,695,956	$	1,693,272		L+3.64	%
Financing provided(4)	2	$	1,292,120	$	1,287,364		L+1.68	%

_____________
(1)	In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.
(2)	Loan term represents weighted-average final maturity, assuming all extension options are exercised by the borrower. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.
(3)	The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.
(4)	During the three and six months ended June 30, 2019, we recorded $12.5 million and $25.0 million, respectively, of interest expense related to our securitized debt obligations.

Refer to Notes 7 and 16 to our consolidated financial statements for additional details of our securitized debt obligations.

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Corporate Financing

Secured Term Loan

As of June 30, 2019, the following Secured Term Loan was outstanding ($ in thousands):

Term Loan Issuance	Face Value		Coupon Rate			All-in Cost(1)			Maturity
Term Loan B	$	500,000		L+2.50	%		L+2.80	%		April 23, 2026

____________
(1)	Includes issue discount and transaction expenses that are amortized through interest expense over the life of the Secured Term Loan.

Refer to Notes 2 and 8 to our consolidated financial statements for additional discussion of our Secured Term Loan.

Convertible Notes

As of June 30, 2019, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

Convertible Notes Issuance	Face Value		Coupon Rate			All-in Cost(1)			Maturity
May 2017	$	402,500		4.38	%		4.85	%		May 5, 2022
March 2018	$	220,000		4.75	%		5.33	%		March 15, 2023

____________
(1)	Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

Refer to Notes 2 and 9 to our consolidated financial statements for additional discussion of our Convertible Notes.

Floating Rate Portfolio

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of June 30, 2019, 97% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. As of June 30, 2019, the remaining 3% of our loans by total loan exposure earned a fixed rate of interest, but are financed with liabilities that pay interest at floating rates, which resulted in a negative correlation to rising interest rates to the extent of our financing. In certain instances where we have financed fixed rate assets with floating rate liabilities, we have purchased interest rate swaps or caps to limit our exposure to increases in interest rates on such liabilities.

Our liabilities are generally currency and index-matched to each collateral asset, resulting in a net exposure to movements in benchmark rates that varies by currency silo based on the relative proportion of floating rate assets and liabilities. The following table details our loan portfolio’s net exposure to interest rates by currency as of June 30, 2019 ($/€/£/A$/C$ in thousands):

	USD			EUR			GBP			AUD			CAD
Floating rate loans(1)	$	11,282,609		€	1,161,786		£	953,511		A$	492,509		C$	149,054
Floating rate debt(1)(2)(3)		(8,153,001	)		(748,028	)		(564,386	)		(368,276	)		(139,652	)
Net floating rate exposure(4)	$	3,129,608		€	413,758		£	389,125		A$	124,233		C$	9,402

____________
(1)	Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each case in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate.
(2)	Includes borrowings under secured debt agreements, non-consolidated senior interests, securitized debt obligations, and secured term loans.
(3)	Balance includes two interest rate swaps totaling C$17.3 million ($13.2 million as of June 30, 2019) that are used to hedge a portion of our fixed rate debt.
(4)	In addition, we have interest rate caps of $66.5 million and C$21.7 million ($16.6 million as of June 30, 2019) to limit our exposure to increases in interest rates.

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III. Our Results of Operations

Operating Results

The following table sets forth information regarding our consolidated results of operations ($ in thousands, except per share data):

	Three Months Ended June 30,						2019 vs			Six Months Ended June 30,						2019 vs
	2019			2018			2018			2019			2018			2018
Income from loans and other investments
Interest and related income	$	223,369		$	191,479		$	31,890		$	448,128		$	346,904		$	101,224
Less: Interest and related expenses		116,891			87,733			29,158			235,579			157,722			77,857
Income from loans and other investments, net		106,478			103,746			2,732			212,549			189,182			23,367
Other expenses
Management and incentive fees		20,984			22,388			(1,404	)		40,774			37,880			2,894
General and administrative expenses		9,897			8,747			1,150			19,210			17,454			1,756
Total other expenses		30,881			31,135			(254	)		59,984			55,334			4,650
Income before income taxes		75,597			72,611			2,986			152,565			133,848			18,717
Income tax provision		46			104			(58	)		147			224			(77	)
Net income		75,551			72,507			3,044			152,418			133,624			18,794
Net income attributable to non-controlling interests		(377	)		(195	)		(182	)		(680	)		(353	)		(327	)
Net income attributable to Blackstone Mortgage Trust, Inc.	$	75,174		$	72,312		$	2,862		$	151,738		$	133,271		$	18,467
Net income per share - basic and diluted	$	0.59		$	0.66		$	(0.07	)	$	1.21		$	1.23		$	(0.02	)
Dividends declared per share	$	0.62		$	0.62		$	—		$	1.24		$	1.24		$	—

Income from loans and other investments, net

Income from loans and other investments, net increased $2.7 million and $23.4 million during the three and six months ended June 30, 2019, respectively, as compared to the corresponding periods in 2018. The increases in both periods were primarily due to (i) an increase in the weighted-average principal balance of our loan portfolio by $2.3 billion and $3.4 billion during the three and six months ended June 30, 2019, respectively, as compared to the corresponding periods in 2018, and (ii) an increase in LIBOR. This was offset by the increase in the weighted-average principal balance of our outstanding financing arrangements, which increased by $1.9 billion and $2.9 billion during the three and six months ended June 30, 2019, respectively, as compared to the corresponding periods in 2018.

Other expenses

Other expenses are composed of management and incentive fees payable to our Manager and our general and administrative expenses. Other expenses decreased by $254,000 during the three months ended June 30, 2019 compared to the corresponding period in 2018 due to a decrease of $3.6 million of incentive fees payable to our Manager. This was partially offset by (i) an increase of $2.2 million of management fees payable to our Manager, primarily as a result of net proceeds received from the sale of shares of our class A common stock during 2018 and 2019, (ii) $1.0 million of additional non-cash restricted stock amortization related to shares awarded under our long-term incentive plans, and (iii) an increase of $173,000 of general operating expenses.

Other expenses increased by $4.7 million during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 due to (i) an increase of $4.2 million of management fees payable to our Manager, primarily as a result of net proceeds received from the sale of shares of our class A common stock during 2018 and 2019, and (ii) $1.8 million of additional non-cash restricted stock amortization related to shares awarded under our long-term incentive plans. This was partially offset by (i) a decrease of $1.3 million of incentive fees payable to our Manager, and (ii) a decrease of $13,000 of general operating expenses.

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Net income attributable to non-controlling interests

During the three and six months ended June 30, 2019, we recognized $377,000 and $680,000, respectively, of net income attributable to non-controlling interests related to our Multifamily Joint Venture.

Dividends per share

During the three months ended June 30, 2019, we declared a dividend of $0.62 per share, or $83.3 million, which was paid on July 15, 2019 to common stockholders of record as of June 28, 2019. During the three months ended June 30, 2018, we declared a dividend of $0.62 per share, or $69.1 million.

During the six months ended June 30, 2019, we declared aggregate dividends of $1.24 per share, or $161.2 million. During the six months ended June 30, 2018, we declared aggregate dividends of $1.24 per share, or $136.2 million.

IV. Liquidity and Capital Resources

Capitalization

We have capitalized our business to date through, among other things, the issuance and sale of shares of our class A common stock, borrowings under secured debt agreements, and the issuance of secured term loans and issuance and sale of convertible notes. As of June 30, 2019, we had 134,288,258 shares of our class A common stock outstanding representing $3.8 billion of stockholders’ equity, $8.3 billion of outstanding borrowings under secured debt agreements, $500.0 million of outstanding Secured Term Loans, and $622.5 million of Convertible Notes outstanding.

As of June 30, 2019, our secured debt agreements consisted of secured credit facilities with an outstanding balance of $8.1 billion and $217.9 million of asset-specific financings. We also finance our business through non-consolidated senior interests. As of June 30, 2019, we had $406.3 million of non-consolidated senior interests outstanding. In addition, as of June 30, 2019, our consolidated balance sheet included $1.3 billion of securitized debt obligations related to our CLO and our 2017 Single Asset Securitization.

See Notes 5, 7, 8, and 9 to our consolidated financial statements for additional details regarding our secured debt agreements, securitized debt obligations, Secured Term Loan, and Convertible Notes, respectively.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents our debt-to-equity ratio and total leverage ratio:

	June 30, 2019		December 31, 2018
Debt-to-equity ratio(1)		2.5x		2.8x
Total leverage ratio(2)		3.2x		3.7x
____________

(1)	Represents (i) total outstanding secured debt agreements, secured term loans, and convertible notes, less cash, to (ii) total equity, in each case at period end.
(2)	Represents (i) total outstanding secured debt agreements, secured term loans, convertible notes, non-consolidated senior interests, and securitized debt obligations, less cash, to (ii) total equity, in each case at period end.

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents, available borrowings under our secured debt agreements, and net receivables from servicers related to loan repayments which are set forth in the following table ($ in thousands):

	June 30, 2019		December 31, 2018
Cash and cash equivalents	$	80,584	$	105,662
Available borrowings under secured debt agreements		848,132		359,618
Loan principal payments held by servicer, net(1)		32,975		4,855
	$	961,691	$	470,135
___________

(1)   Represents loan principal payments held by our third-party servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle, net of the related secured debt balance.

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In addition to our current sources of liquidity, we have access to liquidity through public offerings of debt and equity securities. To facilitate such offerings, in July 2016, we filed a shelf registration statement with the Securities and Exchange Commission, or the SEC, that is effective for a term of three years and expires at the end of July 2019. The amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit on the amount of securities we may issue. The securities covered by this registration statement include: (i) class A common stock; (ii) preferred stock; (iii) debt securities; (iv) depositary shares representing preferred stock; (v) warrants; (vi) subscription rights; (vii) purchase contracts; and (viii) units consisting of one or more of such securities or any combination of these securities. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

We may also access liquidity through a dividend reinvestment plan and direct stock purchase plan, under which 9,994,685 shares of class A common stock were available for issuance as of June 30, 2019, and our at-the-market stock offering program, pursuant to which we may sell, from time to time, up to $363.8 million of additional shares of our class A common stock as of June 30, 2019. Refer to Note 11 to our consolidated financial statements for additional details.

Our existing loan portfolio also provides us with liquidity as loans are repaid or sold, in whole or in part, and the proceeds from such repayments become available for us to reinvest.

Liquidity Needs

In addition to our ongoing loan origination activity, our primary liquidity needs include interest and principal payments under our $8.3 billion of outstanding borrowings under secured debt agreements, our Secured Term Loan, our Convertible Notes, our unfunded loan commitments, dividend distributions to our stockholders, and operating expenses.

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Contractual Obligations and Commitments

Our contractual obligations and commitments as of June 30, 2019 were as follows ($ in thousands):

			Payment Timing
	Total		Less Than		1 to 3		3 to 5		More Than
	Obligation		1 Year		Years		Years		5 Years
Unfunded loan commitments(1)	$	3,217,266	$	339,879	$	2,283,777	$	563,163	$	30,447
Principal repayments under secured debt agreements(2)		8,283,613		109,374		3,266,552		4,520,799		386,888
Principal repayments of secured term loans(3)		500,000		3,750		10,000		10,000		476,250
Principal repayments of convertible notes(4)		622,500		—		402,500		220,000		—
Interest payments(2)(5)		1,251,672		380,896		593,970		230,215		46,591
Total(6)	$	13,875,051	$	833,899	$	6,556,799	$	5,544,177	$	940,176

____________

(1)	The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.
(2)	The allocation of repayments under our secured debt agreements for both principal and interest payments is based on the earlier of (i) the maturity date of each facility, or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.
(3)	The Secured Term Loan is partially amortizing, with an amount equal to 1.0% per annum of the original principal balance due in quarterly installments. Refer to Note 8 to our consolidated financial statements for further details on our secured term loan.
(4)	Reflects the outstanding principal balance of convertible notes, excluding any potential conversion premium. Refer to Note 9 to our consolidated financial statements for further details on our convertible notes.
(5)	Represents interest payments on our secured debt agreements, convertible notes, and Secured Term Loan. Future interest payment obligations are estimated assuming the amounts outstanding and the interest rates in effect as of June 30, 2019 will remain constant into the future. This is only an estimate as actual amounts borrowed and interest rates will vary over time.
(6)	Total does not include $406.3 million of non-consolidated senior interests and $1.3 billion of securitized debt obligations, as the satisfaction of these liabilities will not require cash outlays from us.

We are also required to settle our foreign currency forward contracts and interest rate swaps with our derivative counterparties upon maturity which, depending on foreign exchange and interest rate movements, may result in cash received from or due to the respective counterparty. The table above does not include these amounts as they are not fixed and determinable. Refer to Note 10 to our consolidated financial statements for details regarding our derivative contracts.

We are required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses pursuant to our Management Agreement. The table above does not include the amounts payable to our Manager under our Management Agreement as they are not fixed and determinable. Refer to Note 12 to our consolidated financial statements for additional terms and details of the fees payable under our Management Agreement.

As a REIT, we generally must distribute substantially all of our net taxable income to stockholders in the form of dividends to comply with the REIT provisions of the Internal Revenue Code. Our taxable income does not necessarily equal our net income as calculated in accordance with GAAP, or our Core Earnings as described above.

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,
	2019			2018
Cash flows provided by operating activities	$	157,184		$	135,011
Cash flows used in investing activities		(90,425	)		(2,154,258	)
Cash flows (used in) provided by financing activities		(91,834	)		2,016,646
Net decrease in cash and cash equivalents	$	(25,075	)	$	(2,601	)

We experienced a net decrease in cash and cash equivalents of $25.1 million for the six months ended June 30, 2019, compared to a net decrease of $2.6 million for the six months ended June 30, 2018. During the six months ended June 30, 2019, we (i) received $1.8 billion of proceeds from loan principal collections, (ii) received

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$498.8 million of net proceeds from the issuance of a secured term loan, and (iii) received $372.3 million in net proceeds from the issuance of shares of class A common stock. We used the proceeds from these activities to (i) fund $1.9 billion of new loans and (ii) repay a net $708.5 million under our secured debt agreements during the six months ended June 30, 2019.

Refer to Note 3 to our consolidated financial statements for further discussion of our loan activity. Refer to Notes 5, 8, and 11 to our consolidated financial statements for additional discussion of our secured debt agreements, secured term loan, and equity.

V. Other Items

Income Taxes

We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of June 30, 2019 and December 31, 2018, we were in compliance with all REIT requirements.

Refer to Note 13 to our consolidated financial statements for additional discussion of our income taxes.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our Manager to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. There have been no material changes to our Critical Accounting Policies described in our annual report on Form 10-K filed with the SEC on February 12, 2019.

Refer to Note 2 to our consolidated financial statements for the description of our significant accounting policies.

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VI. Loan Portfolio Details

The following table provides details of our loan portfolio, on a loan-by-loan basis, as of June 30, 2019 ($ in millions):

	Loan Type(1)	Origination Date(2)	Total Loan(3)(4)		Principal Balance(3)(4)		Net Book Value		Cash Coupon(5)		All-in Yield(5)		Maximum Maturity(6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV(2)		Risk Rating
1	Senior loan	3/22/2018	$	1,063.4		$     1,063.4	$	1,057.6		L + 3.15%		L + 3.40%	3/15/2023	Diversified - Spain	Mixed-Use	n/a		71%	3
2	Senior loan	5/11/2017		752.6		696.0		693.3		L + 3.40%		L + 3.60%	6/10/2023	Washington DC	Office	$340 / sqft		62%	3
3	Senior loan(3)	8/6/2015		469.1		469.1		85.4		5.75%		5.77%	10/29/2022	Diversified - EUR	Other	n/a		71%	3
4	Senior loan	5/1/2015		355.0		342.4		341.9		L + 2.85%		L + 3.02%	5/1/2023	New York	Office	$434 / sqft		68%	2
5	Senior loan	1/7/2015		350.0		331.0		330.5		L + 2.50%		L + 2.76%	1/9/2021	New York	Office	$283 / sqft		53%	2
6	Senior loan	2/13/2018		330.0		327.6		327.4		L + 3.42%		L + 3.52%	3/9/2023	New York	Multi	$793,303 / unit		62%	3
7	Senior loan	10/23/2018		352.4		322.7		320.7		L + 3.40%		L + 3.72%	10/23/2021	New York	Mixed-Use	$293 / sqft		65%	3
8	Senior loan	3/31/2017		339.3		314.4		312.1		L + 3.50%		L + 3.87%	8/9/2023	Maui	Hotel	$414,267 / key		61%	3
9	Senior loan	1/11/2019		304.8		304.8		300.7		L + 4.35%		L + 4.70%	1/11/2026	Diversified - UK	Other	$147 / sqft		66%	3
10	Senior loan	11/30/2018		291.3		275.6		273.2		L + 2.83%		L + 3.20%	12/9/2023	New York	Hotel	$225,514 / key		73%	3
11	Senior loan	11/30/2018		253.9		247.4		245.3		L + 2.80%		L + 3.17%	12/9/2023	San Francisco	Hotel	$363,291 / key		73%	3
12	Senior loan	12/11/2018		310.0		241.2		238.5		L + 2.55%		L + 2.96%	12/9/2023	Chicago	Office	$203 / sqft		78%	3
13	Senior loan	8/3/2016		275.9		239.5		240.0		L + 4.66%		L + 5.32%	8/9/2021	New York	Office	$330 / sqft		57%	3
14	Senior loan	12/22/2017		225.0		225.0		223.9		L + 2.80%		L + 3.16%	1/9/2023	Chicago	Multi	$326,087 / unit		65%	3
15	Senior loan	5/9/2018		219.0		219.0		217.9		L + 2.60%		L + 2.87%	5/9/2023	New York	Industrial	$62 / sqft		70%	2
16	Senior loan	7/31/2018		284.5		213.5		211.2		L + 3.10%		L + 3.55%	8/9/2022	San Francisco	Office	$542 / sqft		50%	2
17	Senior loan	6/23/2015		212.1		212.1		211.9		L + 3.65%		L + 3.78%	5/8/2022	Washington DC	Office	$238 / sqft		72%	2
18	Senior loan	4/15/2016		225.0		208.7		207.8		L + 3.25%		L + 3.84%	5/9/2023	New York	Office	$194 / sqft		40%	3
19	Senior loan	4/12/2018		259.3		194.1		193.5		L + 2.93%		L + 3.32%	11/20/2022	New York	Office	$36 / sqft		58%	1
20	Senior loan	6/4/2018		189.4		189.3		188.8		L + 3.50%		L + 3.86%	6/9/2024	New York	Hotel	$313,015 / key		52%	3
21	Senior loan	6/27/2019		218.1		187.6		185.5		L + 2.80%		L + 3.32%	8/15/2026	Berlin - DEU	Office	$197 / sqft		62%	3
22	Senior loan	12/22/2016		204.5		185.8		185.6		L + 3.50%		L + 4.07%	1/9/2022	New York	Office	$261 / sqft		64%	3
23	Senior loan	4/9/2018		1,486.5		185.0		172.8		L + 8.50%		L + 10.64%	6/9/2025	New York	Office	$525 / sqft		48%	2
24	Senior loan	5/16/2017		189.2		181.4		180.7		L + 3.90%		L + 4.35%	5/16/2021	Chicago	Office	$136 / sqft		59%	3
25	Senior loan	10/23/2018		278.4		181.2		179.6		L + 2.65%		L + 2.88%	11/9/2024	Atlanta	Office	$170 / sqft		64%	2
26	Senior loan	3/8/2016		181.2		181.2		180.4		L + 2.75%		L + 2.97%	9/9/2023	Orange County	Office	$228 / sqft		52%	2
27	Senior loan	9/14/2018		177.0		177.0		175.8		L + 3.50%		L + 3.85%	9/14/2023	Canberra - AU	Mixed-Use	$460 / sqft		68%	3
28	Senior loan	4/3/2018		178.6		176.6		175.7		L + 2.75%		L + 3.08%	4/9/2024	Dallas	Mixed-Use	$500 / sqft		64%	3
29	Senior loan	11/23/2018		188.8		174.2		172.4		L + 2.62%		L + 2.87%	2/15/2024	Diversified - UK	Office	$518 / sqft		50%	3
30	Senior loan	8/31/2017		183.0		174.2		173.5		L + 3.00%		L + 3.40%	9/9/2022	Orange County	Office	$206 / sqft		64%	3

continued…

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	Loan Type(1)	Origination Date(2)	Total Loan(3)(4)		Principal Balance(3)(4)		Net Book Value		Cash Coupon(5)		All-in Yield(5)		Maximum Maturity(6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV(2)		Risk Rating
31	Senior loan	9/4/2018		172.7		151.6		150.3		L + 3.00%		L + 3.39%	9/9/2023	Las Vegas	Hotel	$183,533 / key		70%	3
32	Senior loan	8/23/2017		165.0		144.3		143.6		L + 3.25%		L + 3.64%	10/9/2022	Los Angeles	Office	$293 / sqft		74%	2
33	Senior loan	12/21/2017		182.5		136.4		135.3		L + 3.25%		L + 3.68%	1/9/2023	Atlanta	Office	$102 / sqft		51%	2
34	Senior loan	10/5/2016		134.3		134.3		134.4		L + 4.35%		L + 4.80%	10/9/2021	Diversified - US	Hotel	$68,081 / key		61%	2
35	Senior loan	6/24/2015		135.0		134.3		134.0		L + 3.50%		L + 3.72%	4/9/2023	Honolulu	Hotel	$225,285 / key		67%	2
36	Senior loan	6/29/2017		140.2		134.2		133.6		L + 2.85%		L + 3.30%	7/9/2022	Los Angeles	Multi	$318,072 / unit		68%	2
37	Senior loan	11/14/2017		133.0		133.0		132.4		L + 2.75%		L + 3.00%	6/9/2023	Los Angeles	Hotel	$532,000 / key		56%	2
38	Senior loan	7/20/2017		193.2		129.8		128.0		L + 5.10%		L + 6.13%	8/9/2022	San Francisco	Office	$321 / sqft		58%	3
39	Senior loan	5/11/2017		135.9		128.0		127.4		L + 3.40%		L + 3.91%	6/10/2023	Washington DC	Office	$294 / sqft		38%	2
40	Senior loan	11/2/2017		140.0		124.9		124.2		L + 3.20%		L + 3.62%	11/9/2022	Boston	Industrial	$164 / sqft		69%	2
41	Senior loan	12/14/2018		135.6		117.3		116.5		L + 2.90%		L + 3.27%	1/9/2024	Diversified - US	Industrial	$47 / sqft		57%	3
42	Senior loan	6/28/2019		125.0		117.2		116.6		L + 2.75%		L + 2.91%	2/1/2024	Los Angeles	Office	$185 / sqft		48%	3
43	Senior loan	7/28/2016		119.0		116.4		116.4		L + 3.60%		L + 3.92%	8/9/2021	Atlanta	Office	$184 / sqft		70%	2
44	Senior loan	4/30/2018		162.7		115.3		113.9		L + 3.25%		L + 3.51%	4/30/2023	London - UK	Office	$519 / sqft		60%	3
45	Senior loan	6/28/2019		185.3		114.7		112.8		L + 3.70%		L + 4.33%	6/27/2024	London - UK	Office	$374 / sqft		72%	3
46	Senior loan	2/20/2014		110.0		110.0		109.8		L + 3.95%		L + 4.16%	3/9/2021	New York	Office	$161 / sqft		74%	2
47	Senior loan	9/20/2018		129.6		108.4		108.1		L + 4.00%		L + 4.06%	8/16/2023	Diversified - AU	Other	$175 / sqft		53%	3
48	Senior loan	10/17/2016		108.0		108.0		107.8		L + 3.95%		L + 3.98%	10/21/2021	Diversified - UK	Self-Storage	$148 / sqft		73%	3
49	Senior loan	3/21/2018		113.2		106.2		105.5		L + 3.10%		L + 3.36%	3/21/2024	Jacksonville	Office	$106 / sqft		72%	2
50	Senior loan	3/13/2018		123.0		103.4		102.6		L + 3.50%		L + 3.83%	4/9/2025	Honolulu	Hotel	$160,368 / key		50%	3
51	Senior loan	3/10/2016		106.7		103.0		102.5		L + 2.60%		L + 2.94%	12/9/2022	Chicago	Multi	$556,723 / unit		63%	3
52	Senior loan	10/16/2018		113.7		102.1		101.3		L + 3.25%		L + 3.57%	11/9/2023	San Francisco	Hotel	$222,332 / key		72%	3
53	Senior loan	12/20/2018		105.0		101.6		101.1		L + 2.95%		L + 3.24%	1/1/2022	Seattle	Multi	$255,161 / unit		65%	3
54	Senior loan	12/21/2018		123.1		100.4		99.3		L + 2.60%		L + 3.00%	1/9/2024	Chicago	Office	$196 / key		72%	2
55	Senior loan	5/16/2014		100.0		99.5		99.3		L + 3.85%		L + 4.11%	4/9/2022	Miami	Office	$214 / sqft		67%	3
56	Senior loan	11/30/2018		105.1		98.8		98.2		L + 2.70%		L + 3.04%	12/9/2023	Diversified - US	Hotel	$75,534 / key		57%	2
57	Senior loan	12/9/2014		104.5		92.5		92.4		L + 3.65%		L + 3.80%	12/9/2021	Diversified - US	Office	$80 / sqft		65%	2
58	Senior loan	6/1/2018		128.2		90.8		89.7		L + 3.40%		L + 3.75%	5/28/2023	London - UK	Office	$616 / sqft		70%	3
59	Senior loan	6/19/2019		95.0		90.0		89.6		L + 2.60%		L + 2.89%	7/9/2024	Phoenix	Multi	$279,503 / unit		72%	3
60	Senior loan	12/10/2018		112.7		88.9		87.8		L + 2.95%		L + 3.34%	12/3/2024	London - UK	Office	$425 / sqft		72%	3

continued…

57

	Loan Type(1)	Origination Date(2)	Total Loan(3)(4)		Principal Balance(3)(4)		Net Book Value		Cash Coupon(5)		All-in Yield(5)		Maximum Maturity(6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV(2)		Risk Rating
61	Senior loan	3/28/2019		98.4		88.5		88.2		L + 3.25%		L + 3.40%	1/9/2024	New York	Hotel	$114,327 / key		63%	3
62	Senior loan	2/18/2015		87.7		87.7		87.6		L + 3.75%		L + 4.09%	3/9/2020	Diversified - CA	Office	$181 / sqft		71%	3
63	Senior loan	4/12/2018		103.1		86.5		85.9		L + 2.75%		L + 3.14%	5/9/2023	San Francisco	Office	$226 / sqft		72%	2
64	Senior loan	2/9/2017		86.5		86.5		86.0		L + 4.50%		L + 4.85%	5/29/2023	London - UK	Office	$845 / sqft		69%	3
65	Senior loan	11/30/2018		151.1		85.8		84.7		L + 2.55%		L + 2.82%	12/9/2024	Washington DC	Office	$268 / sqft		60%	3
66	Senior loan	6/18/2019		90.0		85.0		84.1		L + 3.15%		L + 3.52%	7/9/2024	Napa Valley	Hotel	$890,052 / key		74%	3
67	Senior loan	5/22/2014		84.2		84.2		84.0		L + 3.75%		L + 3.95%	6/15/2021	Orange County	Office	$146 / sqft		74%	2
68	Senior loan	6/29/2016		83.4		78.1		78.1		L + 2.80%		L + 3.28%	7/9/2021	Miami	Office	$301 / sqft		64%	2
69	Senior loan	3/31/2017		97.2		77.3		77.1		L + 4.30%		L + 4.69%	4/9/2022	New York	Office	$379 / sqft		64%	3
70	Senior loan	2/20/2019		128.9		74.5		73.2		L + 3.25%		L + 3.89%	2/19/2024	London - UK	Office	$366 / sqft		61%	3
71	Senior loan	6/4/2015		73.0		73.0		73.8		L + 4.25%		L + 4.13%	12/15/2021	Diversified - CAN	Hotel	$55,926 / key		54%	2
72	Senior loan	8/18/2017		70.2		70.2		70.0		L + 4.10%		L + 4.46%	8/18/2022	Brussels - BE	Office	$112 / sqft		59%	3
73	Senior loan	7/26/2018		84.1		70.1		69.9		L + 2.75%		L + 2.85%	7/1/2024	Columbus	Multi	$65,962 / unit		69%	3
74	Senior loan	6/27/2019		84.0		70.0		69.4		L + 2.50%		L + 2.77%	7/9/2024	West Palm Beach	Office	$481 / sqft		70%	3
75	Senior loan	10/17/2018		80.4		66.5		66.0		L + 2.60%		L + 3.16%	11/9/2023	San Francisco	Office	$415 / sqft		68%	3
76	Senior loan	4/5/2018		85.3		65.9		65.4		L + 3.10%		L + 3.51%	4/9/2023	Diversified - US	Industrial	$24 / sqft		54%	3
77	Senior loan	5/8/2017		80.0		65.2		64.6		L + 3.75%		L + 4.72%	5/8/2022	Washington DC	Office	$372 / sqft		73%	2
78	Senior loan	5/9/2017		73.7		64.7		64.5		L + 3.85%		L + 4.30%	5/9/2022	New York	Multi	$389,948 / unit		67%	3
79	Senior loan	4/25/2019		210.0		63.9		62.9		L + 3.50%		L + 3.72%	9/1/2025	Los Angeles	Office	$93 / sqft		67%	3
80	Senior loan	6/29/2017		64.2		62.6		62.3		L + 3.40%		L + 3.71%	7/9/2023	New York	Multi	$182,457 / unit		69%	4
81	Senior loan	10/5/2018		60.4		60.4		59.8		L + 5.50%		L + 5.65%	10/5/2021	Sydney - AU	Office	$641 / sqft		78%	3
82	Senior loan	7/13/2017		86.3		60.0		59.6		L + 3.75%		L + 4.18%	8/9/2022	Honolulu	Hotel	$192,926 / key		66%	3
83	Senior loan	11/30/2016		65.2		56.7		56.6		L + 3.10%		L + 3.39%	12/9/2021	Chicago	Retail	$1,167 / sqft		54%	3
84	Senior loan	10/6/2017		55.9		55.8		55.6		L + 2.95%		L + 3.21%	10/9/2022	Nashville	Multi	$99,598 / unit		74%	2
85	Senior loan	6/26/2019		67.6		53.0		52.3		L + 3.35%		L + 3.66%	6/20/2024	London - UK	Office	$599 / sqft		61%	3
86	Senior loan	3/11/2014		52.8		52.8		52.7		L + 4.50%		L + 4.76%	4/9/2021	New York	Multi	$593,109 / unit		65%	4
87	Senior loan	11/23/2016		55.4		51.9		51.7		L + 3.50%		L + 3.80%	12/9/2022	New York	Multi	$216,432 / unit		65%	4
88	Senior loan	11/1/2017		52.1		51.8		51.6		L + 2.95%		L + 3.21%	11/9/2022	Denver	Multi	$154,127 / unit		74%	2
89	Senior loan	12/27/2016		57.2		49.5		49.4		L + 4.65%		L + 5.08%	1/9/2022	New York	Multi	$1,260,476 / unit		64%	3
90	Senior loan	6/12/2019		55.0		48.3		48.2		L + 3.25%		L + 3.78%	7/1/2022	Grand Rapids	Multi	$92,529 / unit		69%	3

continued…

58

	Loan Type(1)	Origination Date(2)	Total Loan(3)(4)		Principal Balance(3)(4)		Net Book Value		Cash Coupon(5)			All-in Yield(5)			Maximum Maturity(6)	Location	Property Type	Loan Per SQFT / Unit / Key	LTV(2)		Risk Rating
91	Senior loan	11/19/2015		48.7		46.0		46.0		L + 4.00%			L + 4.50%		10/9/2019	New York	Office	$1,180 / sqft		57%	2
92	Senior loan	9/25/2018		49.3		45.0		44.7		L + 3.50%			L + 3.79%		9/1/2023	Chicago	Multi	$61,202 / unit		70%	3
93	Senior loan	5/20/2015		45.0		44.0		43.9		L + 3.00%			L + 3.08%		11/1/2022	Los Angeles	Office	$205 / sqft		59%	1
94	Senior loan	5/24/2018		81.3		43.6		43.0		L + 4.10%			L + 4.59%		6/9/2023	Boston	Office	$84 / sqft		55%	3
95	Senior loan	11/16/2018		211.9		43.5		41.4		L + 4.10%			L + 4.73%		12/9/2023	Fort Lauderdale	Mixed-Use	$115 / sqft		59%	3
96	Senior loan	8/29/2017		51.2		43.5		43.3		L + 3.10%			L + 3.52%		10/9/2022	Southern California	Industrial	$91 / sqft		65%	3
97	Senior loan	6/26/2015		42.1		40.7		40.7		L + 3.75%			L + 4.14%		7/9/2020	San Diego	Office	$186 / sqft		73%	3
98	Senior loan	2/20/2019		51.2		39.3		38.8		L + 3.50%			L + 3.91%		3/9/2024	Calgary - CAN	Office	$108 / sqft		52%	3
99	Senior loan	11/30/2018		40.0		36.9		36.7		L + 2.95%			L + 3.38%		12/1/2023	Las Vegas	Multi	$76,872 / unit		70%	3
100	Senior loan(3)	9/22/2017		91.0		32.4		9.1		L + 5.56%			L + 6.25%		10/9/2022	San Francisco	Multi	$446,078 / unit		46%	3
101	Senior loan	6/26/2019		30.0		30.0		29.9		L + 3.25%			L + 3.65%		10/1/2020	Lake Charles	Multi	$111,940 / unit		73%	3
102	Senior loan	10/31/2018		63.3		29.8		29.4		L + 5.00%			L + 5.58%		11/9/2023	New York	Multi	$77,341 / unit		57%	3
103	Senior loan	5/31/2019		29.3		29.3		29.3		L + 3.75%			L + 3.75%		3/1/2021	Denver	Multi	$195,333 / unit		59%	2
104	Senior loan	10/31/2018		59.3		29.1		28.8		L + 5.00%			L + 5.96%		11/9/2023	New York	Condo	$122 / sqft		64%	3
105	Senior loan	1/30/2018		28.0		28.0		27.9		L + 2.90%			L + 3.26%		2/9/2023	Houston	Multi	$135,266 / unit		66%	3
106	Senior loan	8/30/2018		28.7		27.1		26.9		L + 3.00%			L + 3.42%		9/1/2022	Boise	Multi	$106,553 / unit		73%	3
107	Senior loan	12/15/2017		22.5		22.5		22.4		L + 3.25%			L + 4.31%		12/9/2020	Diversified - US	Hotel	$8,465 / key		50%	2
108	Senior loan	9/1/2016		21.3		21.3		21.5		L + 4.20%			L + 4.81%		9/1/2022	Atlanta	Multi	$93,025 / unit		72%	1
109	Senior loan	6/4/2015		21.2		21.2		21.2		4.82%	(7)		5.23%	(7)	12/23/2021	Montreal - CAN	Office	$58 / sqft		45%	2
110	Senior loan	4/26/2019		20.0		20.0		19.8		L + 2.93%			L + 3.38%		5/1/2024	Nashville	Multi	$198,020 / unit		73%	3
111	Senior loan	12/21/2018		22.9		20.0		19.9		L + 3.25%			L + 3.48%		1/1/2024	Daytona Beach	Multi	$74,627 / unit		77%	3
112	Senior loan	6/15/2018		22.0		19.3		19.3		L + 3.35%			L + 3.43%		7/1/2022	Phoenix	Multi	$67,333 / unit		78%	3
113	Senior loan	11/2/2017		17.9		17.1		17.1		L + 3.90%			L + 4.01%		11/1/2020	Phoenix	Multi	$65,768 / unit		59%	2
114	Senior loan	3/9/2018		17.8		17.0		17.0		L + 3.75%			L + 3.77%		4/1/2023	Los Angeles	Multi	$131,095 / unit		75%	2
115	Senior loan	6/4/2015		16.4		16.4		16.5		5.15%			5.27%		9/4/2020	Diversified - CAN	Self-Storage	$3,578 / unit		61%	1
116	Senior loan	6/21/2019		14.8		14.5		14.4		L + 3.30%			L + 3.41%		7/1/2022	Portland	Multi	$130,180 / unit		66%	3
117	Senior loan	10/20/2017		17.2		14.0		13.9		L + 4.25%			L + 4.35%		11/1/2021	Houston	Multi	$110,714 / unit		56%	3
118	Senior loan	4/30/2019		15.5		13.5		13.4		L + 3.00%			L + 3.32%		5/1/2024	Houston	Multi	$43,608 / unit		78%	3
119	Senior loan	2/28/2019		15.3		12.6		12.5		L + 3.00%			L + 3.33%		3/1/2024	San Antonio	Multi	$54,704 / unit		75%	3
120	Senior loan	6/29/2018		11.6		11.6		11.6		L + 2.95%			L + 3.32%		7/1/2020	Washington DC	Multi	$61,053 / unit		60%	2

continued…

59

Loan Type(1)

Origination Date(2)

Total Loan(3)(4)

Principal Balance(3)(4)

Net Book Value

Cash Coupon(5)

All-in Yield(5)

Maximum Maturity(6)

Location

Property Type

Loan Per SQFT / Unit / Key

LTV(2)

Risk Rating

121

Senior loan

5/30/2018

10.1

10.1

10.1

L + 3.90%

L + 3.97%

6/1/2021

Phoenix

Multi

$112,222 / unit

74%

3

122

Senior loan

10/31/2018

10.0

10.0

10.0

L + 3.35%

L + 3.58%

11/1/2020

Boise

Multi

$156,250 / unit

74%

2

123

Senior loan

7/21/2017

7.3

7.3

7.3

L + 5.25%

L + 6.02%

9/1/2019

Phoenix

Multi

$56,154 / unit

78%

2

$

18,041.9

$14,779.3

$

14,280.9

L + 3.42%

L + 3.76%

3.7 yrs

64%

2.7

____________
(1)	Senior loans include senior mortgages and similar credit quality loans, including related contiguous subordinate loans and pari passu participations in senior mortgage loans.
(2)	Date loan was originated or acquired by us, and the LTV as of such date. Dates are not updated for subsequent loan modifications or upsizes.
(3)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. As of June 30, 2019, two loans in our portfolio have been financed with an aggregate $406.3 million of non-consolidated senior interest, which are included in the table above.
(4)	Portfolio excludes our $97.2 million subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization. Refer to Notes 4 and 16 to our consolidated financial statements for details of the 2018 Single Asset Securitization.
(5)	As of June 30, 2019, our floating rate loans were indexed to various benchmark rates, with 79% of floating rate loans by loan exposure indexed to USD LIBOR. The weighted-average cash coupon and all-in yield are expressed in terms excluding the relevant floating rate benchmark rates as of June 30, 2019. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
(6)	Maximum maturity assumes all extension options are exercised, however our loans may be repaid prior to such date.
(7)	Loan consists of one or more floating and fixed rate tranches. Coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Loan Portfolio Net Interest Income

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of June 30, 2019, 97% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans. As of June 30, 2019, the remaining 3% of our loans by total loan exposure earned a fixed rate of interest, but are financed with liabilities that pay interest at floating rates, which resulted in a negative correlation to rising interest rates to the extent of our financing. In certain instances where we have financed fixed rate assets with floating rate liabilities, we have purchased interest rate swaps or caps to limit our exposure to increases in interest rates on such liabilities.

61 

The following table projects the impact on our interest income and expense, net of incentive fees, for the twelve-month period following June 30, 2019, assuming an immediate increase or decrease of both 25 and 50 basis points in the applicable interest rate benchmark by currency ($ in thousands):

	Assets (Liabilities)   Sensitive to Changes in   Interest Rates(1)(2)				Interest Rate Sensitivity as of June 30, 2019
					Increase in Rates						Decrease in Rates
Currency					25 Basis       Points			50 Basis       Points			25 Basis       Points			50 Basis       Points
USD	$	11,282,609		Income	$	22,480		$	45,000		$	(21,181	)	$	(41,079	)
		(8,153,001	)	Expense		(16,156	)		(32,283	)		16,223			32,483
	$	3,129,608		Net interest	$	6,324		$	12,717		$	(4,958	)	$	(8,596	)
GBP	$	1,210,577		Income	$	1,869		$	4,291		$	(1,716	)	$	(3,257	)
		(716,545	)	Expense		(1,433	)		(2,866	)		1,433			2,866
	$	494,032		Net interest	$	436		$	1,425		$	(283	)	$	(391	)
EUR	$	1,321,299		Income	$	—		$	1,273		$	—		$	—
		(850,732	)	Expense		—			(762	)		—			—
	$	470,567		Net interest	$	—		$	511		$	—		$	—
AUD	$	345,741		Income	$	573		$	1,264		$	(223	)	$	(227	)
		(258,530	)	Expense		(517	)		(1,034	)		517			1,034
	$	87,211		Net interest	$	56		$	230		$	294		$	807
CAD(3)	$	113,825		Income	$	169		$	397		$	(149	)	$	(298	)
		(106,646	)	Expense		(213	)		(427	)		213			427
	$	7,179		Net interest	$	(44	)	$	(30	)	$	64		$	129
				Total net interest	$	6,772		$	14,853		$	(4,883	)	$	(8,051	)
____________

(1)	Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each case in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. Increases (decreases) in interest income and expense are presented net of incentive fees. Refer to Note 12 to our consolidated financial statements for additional details of our incentive fee calculation.
(2)	Includes borrowings under secured debt agreements, non-consolidated senior interests, securitized debt obligations, and secured term loans.
(3)	Liabilities balance includes two interest rate swaps totaling C$17.3 million ($13.2 million as of June 30, 2019) that are used to hedge a portion of our fixed rate debt.

Loan Portfolio Value

As of June 30, 2019, 3% of our loans by total loan exposure earned a fixed rate of interest and as such, the values of such loans are sensitive to changes in interest rates. We generally hold all of our loans to maturity and so do not expect to realize gains or losses on our fixed rate loan portfolio as a result of movements in market interest rates.

Risk of Non-Performance

In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the additional debt service payments due from our borrowers may strain the operating cash flows of the collateral real estate assets and, potentially, contribute to non-performance or, in severe cases, default. This risk is partially mitigated by various facts we consider during our underwriting process, which in certain cases include a requirement for our borrower to purchase an interest rate cap contract.

Credit Risks

Our loans and investments are also subject to credit risk. The performance and value of our loans and investments depend upon the sponsors’ ability to operate the properties that serve as our collateral so that they produce cash

62

flows adequate to pay interest and principal due to us. To monitor this risk, our Manager’s asset management team reviews our investment portfolios and in certain instances is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.

In addition, we are exposed to the risks generally associated with the commercial real estate market, including variances in occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond our control. We seek to manage these risks through our underwriting and asset management processes.

Capital Market Risks

We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our class A common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under credit facilities or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing, and terms of capital we raise.

Counterparty Risk

The nature of our business requires us to hold our cash and cash equivalents and obtain financing from various financial institutions. This exposes us to the risk that these financial institutions may not fulfill their obligations to us under these various contractual arrangements. We mitigate this exposure by depositing our cash and cash equivalents and entering into financing agreements with high credit-quality institutions.

The nature of our loans and investments also exposes us to the risk that our counterparties do not make required interest and principal payments on scheduled due dates. We seek to manage this risk through a comprehensive credit analysis prior to making an investment and active monitoring of the asset portfolios that serve as our collateral.

Currency Risk

Our loans and investments that are denominated in a foreign currency are also subject to risks related to fluctuations in currency rates. We mitigate this exposure by matching the currency of our foreign currency assets to the currency of the borrowings that finance those assets. As a result, we substantially reduce our exposure to changes in portfolio value related to changes in foreign currency rates. In certain circumstances, we may also enter into foreign currency derivative contracts to further mitigate this exposure.

The following table outlines our assets and liabilities that are denominated in a foreign currency (£/€/A$/C$ in thousands):

	June 30, 2019
Foreign currency assets(1)	£	1,328,501		€	1,162,363		A$	498,907		C$	201,396
Foreign currency liabilities(1)		(871,348	)		(744,680	)		(369,601	)		(157,274	)
Foreign currency contracts - notional		(360,600	)		(339,200	)		(123,900	)		(39,100	)
Net exposure to exchange rate fluctuations	£	96,553		€	78,483		A$	5,406		C$	5,022
____________

(1)   Balances include non-consolidated senior interests of £302.0 million.

We estimate that a 10% appreciation of the United States dollar relative to the British Pound Sterling and the Euro would result in a decline in our net assets in U.S. dollar terms of $58.0 million and $47.5 million, respectively, as of June 30, 2019. Substantially all of our net asset exposure to the Canadian and Australian dollar has been hedged with foreign currency forward contracts.

63

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this quarterly report on Form 10-Q was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act 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.

Changes in Internal Controls over Financial Reporting

There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

64

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2019, we were not involved in any material legal proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

65

ITEM 6. EXHIBITS

3.1	Fifth Amended and Restated Bylaws of Blackstone Mortgage Trust, Inc. (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on April 23, 2019 and incorporated herein by reference).
3.2	Fifth Amended and Restated Bylaws of Blackstone Mortgage Trust, Inc. (marked) (filed as Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on April 23, 2019 and incorporated herein by reference).
10.1	First Amendment, dated as of June  7, 2019, to Fourth Amended and Restated Master Repurchase Agreement, dated as of February  15, 2019, among Parlex 2 Finance, LLC, Parlex 2A Finco, LLC, Parlex 2 UK Finco, LLC, Parlex 2 Eur Finco, LLC, Parlex 2 AU Finco, LLC, Parlex 2 CAD Finco, LLC and Citibank, N.A.
10.2	Amended and Restated Master Repurchase Agreement, dated as of June  19, 2019, by and among Parlex 3A Finco, LLC, Parlex 3A UK Finco, LLC, Parlex 3A Eur Finco, LLC and Barclays Bank plc.
10.3	Amended and Restated Guaranty, dated as of June  19, 2019, made by Blackstone Mortgage Trust, Inc. for the benefit of Barclays Bank plc.
10.4	Amended and Restated Registration Rights Agreement, dated May 6, 2013, by and among Blackstone Mortgage Trust, Inc., Blackstone Holdings III L.P. and BREDS/CT Advisors L.L.C. (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on May 6, 2013 and incorporated herein by reference).
31.1	Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 +	Certification of Chief Executive Officer, 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 Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document – the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
____________

+ This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

66

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

67

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.

	BLACKSTONE MORTGAGE TRUST, INC.
July 23, 2019	/s/ Stephen D. Plavin
Date	Stephen D. Plavin
	Chief Executive Officer
	(Principal Executive Officer)
July 23, 2019	/s/ Anthony F. Marone, Jr.
Date	Anthony F. Marone, Jr.
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

68

EX-10

Exhibit 10.1

FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

THIS FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Amendment”), dated as of June 7, 2019 (the “Effective Date”), is made by and among PARLEX 2 FINANCE, LLC, a Delaware limited liability company (“Parlex 2”), PARLEX 2A FINCO, LLC, a Delaware limited liability company (“Parlex 2A”), PARLEX 2 UK FINCO, LLC, a Delaware limited liability company (“Parlex 2 UK”), PARLEX 2 EUR FINCO, LLC, a Delaware limited liability company (“ Parlex 2 EUR”), PARLEX 2 AU FINCO, LLC, a Delaware limited liability company (“Parlex 2 AU”), PARLEX 2 CAD FINCO, LLC, a Delaware limited liability company (“Parlex 2 CAD”, and together with Parlex 2, Parlex 2A, Parlex 2 UK, Parlex 2 EUR, Parlex 2 AU and any other Person when such Person joins as a Seller hereunder from time to time, individually and/or collectively as the context may require, “Seller”), BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation (“Guarantor”) (for the purpose of acknowledging and agreeing to the provision set forth in Section 3 hereof), and CITIBANK, N.A., a national banking association (“Buyer”).

W I T N E S S E T H:

WHEREAS, Seller and Buyer have entered into that certain Fourth Amended and Restated Master Repurchase Agreement, dated as of February 15, 2019 (as the same may be further amended, supplemented, extended, restated, replaced or otherwise modified from time to time, the “Repurchase Agreement”);

WHEREAS, all capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Repurchase Agreement;

WHEREAS, Seller and Buyer desire to modify certain terms and provisions of the Repurchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of ten dollars ($10) and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Seller and Buyer covenant and agree as follows as of the Effective Date and Guarantor acknowledges and agrees as to the provision set forth in Section 3 as of the Effective Date:

1. Modification of Repurchase Agreement. The following definitions in Section 2 of the Repurchase Agreement are hereby deleted in their entirety and the following corresponding definitions are substituted therefor:

“Facility Amount” shall mean, subject to Section 30(j) of this Agreement, One Billion Two Hundred Fifty Million Dollars ($1,250,000,000); provided that whenever under this Agreement Seller and Buyer are required or otherwise need to calculate whether the Facility Amount has been or would be exceeded, then all applicable amounts for Foreign Purchased Loans necessary for such calculation shall be converted to U.S. Dollars based on the Purchase Date Spot Rate (U.S. Dollars) for such Foreign Purchased Loan for all purposes of such calculation.

“Facility Availability Period” shall mean the period commencing on June 12, 2013 and ending on June 7, 2022 (or if such day is not a Business Day, the next succeeding Business Day). Notwithstanding anything herein to the contrary, at any time during the Facility Availability Period, Seller may request an extension of the Facility Availability Period which extension shall be in Buyer’s sole discretion and subject to terms and conditions determined by Buyer in its sole discretion.

2. Seller’s Representations. Seller has taken all necessary action to authorize the execution, delivery and performance of this Amendment. This Amendment has been duly executed and delivered by or on behalf of Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles. No Event of Default has occurred and is continuing, and no Event of Default will occur as a result of the execution, delivery and performance by Seller of this Amendment. Any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Seller of this Amendment has been obtained and is in full force and effect (other than consents, approvals, authorizations, orders, registrations or qualifications that if not obtained, are not reasonably likely to have a Material Adverse Effect).

3. Reaffirmation of Guaranty. Guarantor has executed this Amendment for the purpose of acknowledging and agreeing that, notwithstanding the execution and delivery of this Amendment and the amendment of the Repurchase Agreement hereunder, all of Guarantor’s obligations under the Guaranty remain in full force and effect and the same are hereby irrevocably and unconditionally ratified and confirmed by Guarantor in all respects.

4. Full Force and Effect. Except as expressly modified hereby, all of the terms, covenants and conditions of the Repurchase Agreement and the other Transaction Documents remain unmodified and in full force and effect and are hereby ratified and confirmed by Seller. Any inconsistency between this Amendment and the Repurchase Agreement (as it existed before this Amendment) shall be resolved in favor of this Amendment, whether or not this Amendment specifically modifies the particular provision(s) in the Repurchase Agreement inconsistent with this Amendment. All references to the “Agreement” in the Repurchase Agreement or to the “Repurchase Agreement” in any of the other Transaction Documents shall mean and refer to the Repurchase Agreement as modified and amended hereby.

5. No Waiver. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Buyer under the Repurchase Agreement, any of the other Transaction Documents or any other document, instrument or agreement executed and/or delivered in connection therewith.

2

6. Headings. Each of the captions contained in this Amendment are for the convenience of reference only and shall not define or limit the provisions hereof.

7. Counterparts. This Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures.

8. Governing Law. This Amendment shall be governed in accordance with the terms and provisions of Section 20 of the Repurchase Agreement.

[No Further Text on this Page; Signature Pages Follow]

3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized representatives as of the day and year first above written and effective as of the Effective Date.

BUYER:
CITIBANK, N.A.
By:	/s/ Richard B. Schlenger
Name:	Richard B. Schlenger
Title:	Authorized Signatory

[SIGNATURES CONTINUE ON NEXT PAGE]

[Signature Page to First Amendment to Fourth Amended and Restated Master Repurchase Agreement]

SELLER:

PARLEX 2 FINANCE, LLC,

a Delaware limited liability company

By: /s/ Douglas N. Armer

Name: Douglas N. Armer

Title: Managing Director, Head of Capital Markets and Treasurer

PARLEX 2A FINCO, LLC,

a Delaware limited liability company

By: /s/ Douglas N. Armer

Name: Douglas N. Armer

Title: Managing Director, Head of Capital Markets and Treasurer

PARLEX 2 UK FINCO, LLC, a Delaware limited liability company
By:	/s/ Douglas N. Armer
Name: Douglas N. Armer
Title: Managing Director, Head of Capital Markets and Treasurer

PARLEX 2 EUR FINCO, LLC,

a Delaware limited liability company

By: /s/ Douglas N. Armer

Name: Douglas N. Armer

Title: Managing Director, Head of Capital Markets and Treasurer

[SIGNATURES CONTINUE ON NEXT PAGE]

[Signature Page to First Amendment to Fourth Amended and Restated Master Repurchase Agreement]

PARLEX 2 AU FINCO, LLC,

a Delaware limited liability company

By: /s/ Douglas N. Armer

Name: Douglas N. Armer

Title: Managing Director, Head of Capital Markets and Treasurer

PARLEX 2 CAD FINCO, LLC,

a Delaware limited liability company

By: /s/ Douglas N. Armer

Name: Douglas N. Armer

Title: Executive Vice President, Capital Markets, and Treasurer

GUARANTOR:
BLACKSTONE MORTGAGE TRUST, INC.,
By:	/s/ Douglas N. Armer
Name: Douglas N. Armer
Title: Executive Vice President, Capital Markets, and Treasurer

[Signature Page to First Amendment to Fourth Amended and Restated Master Repurchase Agreement]

EX-10

Exhibit 10.2

EXECUTION VERSION

AMENDED AND RESTATED

MASTER REPURCHASE AGREEMENT

Dated as of June 19, 2019

by and among

BARCLAYS BANK PLC,

as Purchaser,

PARLEX 3A FINCO, LLC,

as US Seller,

PARLEX 3A UK FINCO, LLC,

as UK Seller

and

PARLEX 3A EUR FINCO, LLC,

as EUR Seller

TABLE OF CONTENTS

	Page
ARTICLE 1 APPLICABILITY		1
ARTICLE 2 DEFINITIONS		2
ARTICLE 3 INITIATION; CONFIRMATION; TERMINATION; EXTENSION		30
ARTICLE 4 MARGIN MAINTENANCE		41
ARTICLE 5 PAYMENTS; COLLECTION ACCOUNTS		42
ARTICLE 6 REQUIREMENTS OF LAW; ALTERNATIVE RATE		44
ARTICLE 7 SECURITY INTEREST		47
ARTICLE 8 TRANSFER AND CUSTODY		49
ARTICLE 9 SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS		50
ARTICLE 10 REPRESENTATIONS AND WARRANTIES		50
ARTICLE 11 NEGATIVE COVENANTS OF SELLERS		56
ARTICLE 12 AFFIRMATIVE COVENANTS OF SELLERS		58
ARTICLE 13 SINGLE PURPOSE ENTITY COVENANTS		62
ARTICLE 14 EVENTS OF DEFAULT; REMEDIES		64
ARTICLE 15 SET-OFF		70
ARTICLE 16 SINGLE AGREEMENT		71
ARTICLE 17 RECORDING OF COMMUNICATIONS		71
ARTICLE 18 NOTICES AND OTHER COMMUNICATIONS		71
ARTICLE 19 ENTIRE AGREEMENT; SEVERABILITY		72
ARTICLE 20 NON-ASSIGNABILITY		72
ARTICLE 21 GOVERNING LAW		74
ARTICLE 22 WAIVERS AND AMENDMENTS		74
ARTICLE 23 INTENT		74
ARTICLE 24 DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS		76
ARTICLE 25 CONSENT TO JURISDICTION; WAIVERS		76
ARTICLE 26 NO RELIANCE		77
ARTICLE 27 INDEMNITY AND EXPENSES		78
ARTICLE 28 DUE DILIGENCE		79
ARTICLE 29 SERVICING		80

i

TABLE OF CONTENTS

(continued)

	Page
ARTICLE 30 ACKNOWLEDGMENT AND CONSENT TO BAIL-IN		82
ARTICLE 31 MISCELLANEOUS		84
ARTICLE 32 TAXES		85
ARTICLE 33 JOINT AND SEVERAL LIABILITY		88

ii

ANNEX AND EXHIBITS

ANNEX I	Wire Instructions
EXHIBIT I	Names and Addresses for Communications between Parties
EXHIBIT II	Form of Confirmation Statement
EXHIBIT III	Authorized Representatives of Sellers
EXHIBIT IV-A	Form of Power of Attorney (for U.S. Purchased Assets)
EXHIBIT IV-B	Form of Power of Attorney (for Foreign Purchased Assets (GBP))
EXHIBIT V-A	Representations and Warranties Regarding Individual Purchased Assets (for U.S. Purchased Assets)
EXHIBIT V-B	Representations and Warranties Regarding Individual Purchased Assets (for Foreign Purchased Assets (GBP))
EXHIBIT VI	Asset Information
EXHIBIT VII	Advance Procedures
EXHIBIT VIII	Form of Margin Call Notice
EXHIBIT IX	Form of Release Letter
EXHIBIT X	Form of Covenant Compliance Certificate
EXHIBIT XI	Form of Redirection Letter
EXHIBIT XII	Form of Bailee Letter
EXHIBIT XIII	Form of U.S. Tax Compliance Certificates

iii

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of June 19, 2019 (as further amended, restated, supplemented or otherwise modified and in effect from time to time, this “Agreement”), by and among BARCLAYS BANK PLC, a public limited company organized under the laws of England and Wales (including any successor thereto, “Purchaser”), PARLEX 3A FINCO, LLC, a limited liability company organized under the laws of the State of Delaware (“US Seller”), PARLEX 3A UK FINCO, LLC, a limited liability company organized under the laws of the State of Delaware (“UK Seller”), and PARLEX 3A EUR FINCO, LLC, a limited liability company organized under the laws of the State of Delaware (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”).

RECITALS

WHEREAS, Purchaser and Sellers are parties to that certain Master Repurchase Agreement dated as of March 30, 2018 (the “Existing Agreement”); and

WHEREAS, the parties now desire to amend and restate the Existing Agreement in its entirety on the terms and conditions set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree to amend and restate the Existing Agreement in its entirety as follows:

ARTICLE 1

APPLICABILITY

Subject to the terms of the Transaction Documents, from time to time during the Availability Period (as defined herein) the parties hereto may enter into transactions in which a Seller will sell to Purchaser, all of such Seller’s right, title and interest in and to certain Eligible Assets (as defined herein) and the other related Purchased Items (as defined herein) (collectively, the “Assets”) against the transfer of funds (in the Applicable Currency of the related Eligible Asset) by Purchaser to such Seller, with a simultaneous agreement by Purchaser to re-sell back to such Seller, and by such Seller to repurchase, such Assets at a date certain or on demand, against the transfer of funds (in the Applicable Currency of the related Eligible Asset) by such Seller to Purchaser. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing by the applicable Seller and Purchaser, shall be governed by this Agreement, including any supplemental terms or conditions contained in any exhibits identified herein as applicable hereunder. Each individual transfer of an Eligible Asset shall constitute a distinct Transaction. Notwithstanding any provision or agreement herein, this Agreement is not a commitment by Purchaser to engage in Transactions, but sets forth the requirements under which Purchaser would consider entering into Transactions from time to time. At no time shall Purchaser be obligated to purchase or effect the transfer of any Eligible Asset from any Seller to Purchaser.

All Transactions (as defined in the Existing Agreement) outstanding under the Existing Agreement as of the Closing Date shall be deemed to be Transactions (as defined in this Agreement) outstanding under this Agreement and all Confirmations (as defined in the Existing Agreement) under the Existing Agreement as of the Closing Date shall be deemed to be Confirmations under this Agreement (and, accordingly, in each case, subject to the terms and conditions hereof) and all references in any Transaction Document (including, without limitation, any and all Confirmations and assignment documentation executed pursuant to the Existing Agreement) to “the Agreement” or any similar formulation intended to refer to the Existing Agreement shall be deemed to be references to this Agreement.

ARTICLE 2

DEFINITIONS

The following capitalized terms shall have the respective meanings set forth below.

“Accelerated Repurchase Date” shall have the meaning specified in Article 14(b).

“Accepted Servicing Practices” shall mean with respect to any Purchased Asset, those mortgage loan, mezzanine loan or participation interest servicing practices of prudent mortgage lending institutions that service mortgage loans, mezzanine loans and/or participation interests of the same type as such Purchased Asset in the jurisdiction where the related underlying real estate directly or indirectly securing or supporting such Purchased Asset is located.

“Account Bank” shall mean PNC Bank, National Association, or any successor appointed by Purchaser and reasonably acceptable to Sellers.

“Account Control Agreement” shall mean individually or collectively, as the context may require, (i) that certain Account Control Agreement, dated on or about the Closing Date, among Purchaser, US Seller and Account Bank relating to the US Collection Account, (ii) that certain Account Control Agreement, dated on or about the Closing Date, among Purchaser, UK Seller and Account Bank relating to the UK Collection Account, (iii) that certain Account Control Agreement, dated on or about the Closing Date, among Purchaser, EUR Seller and Account Bank relating to the EUR Collection Account and (iv) any account control or similar agreement entered into with respect to any other Foreign Purchased Asset Collection Account, in each case, as such agreements may be amended, modified and/or restated from time to time, and/or any replacement agreement.

“Act of Insolvency” shall mean, with respect to any Person, (a) the filing of a petition, commencing, or authorizing the commencement by such Person as debtor or with the authorization of such Person of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law relating to the protection of creditors, or (b) suffering any such petition or proceeding described in clause (a) to be commenced by another Person which (i) is consented to, solicited by, colluded with or not timely contested or (ii) results in the entry of an order or decree for relief that, in the case of an action not commenced by or with the consent of such Person, is not dismissed or stayed within sixty (60) days; (c) the seeking or consenting to the appointment of a receiver, trustee, custodian

2

or similar official for such Person or all or substantially all of the property of such Person; (d) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (e) the making by such Person of a general assignment for the benefit of creditors; (f) the admission in a legal proceeding by such Person of its inability to, or intention not to, pay its debts or discharge its obligations as they become due or mature; or (g) that any Governmental Authority or agency or any person, agency or entity acting or purporting to act under Governmental Authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or substantially all of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person (or, with respect to clauses (a) through (g) above, any equivalent in each relevant jurisdiction).

“Affiliate” shall mean, when used with respect to any specified Person, (a) any other Person directly or indirectly controlling, controlled by, or under common control with, such Person or (b) any “affiliate” of such Person, as such term is defined in the Bankruptcy Code. Control shall mean, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such a Person, whether through the ownership of voting power, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative thereto.

“Agreement” shall have the meaning specified in the introductory paragraph hereof.

“Alternative Rate” shall have the meaning specified in Article 6(b).

“Alternative Rate Transaction” shall mean, with respect to any Pricing Rate Period, any Transaction with respect to which the Pricing Rate is determined for such Pricing Rate Period with reference to the Alternative Rate.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction in which any Seller Party is located or doing business applicable to such Seller Party and any of their respective Affiliates from time to time concerning or relating to bribery, corruption or money laundering including, without limitation, the United Kingdom Bribery Act of 2010 and the United States Foreign Corrupt Practices Act of 1977, as amended.

“Anti-Money Laundering Laws” shall mean all anti-money laundering laws and regulations of any jurisdiction in which any Seller Party is located or doing business applicable to such Seller Party and any of their respective Affiliates.

“Applicable Currency” shall mean U.S. Dollars, Pounds Sterling, Euros or such other currency permitted by Purchaser, in its sole and absolute discretion, as applicable.

“Applicable Index” shall mean, (a) with respect to a LIBOR Transaction, LIBOR, (b) with respect to a EURIBOR Transaction, EURIBOR and (c) with respect to an Alternative Rate Transaction, the Alternative Rate. The initial Applicable Index as of the Purchase Date for any Purchased Asset shall be specified in the related Confirmation.

3

“Approved Future Advance” shall mean, with respect to any Future Advance Purchased Asset, any Future Advance thereunder that was pre-approved by Purchaser in connection with the purchase of such Purchased Asset and as indicated in the related Confirmation.

“Asset Combination” shall mean any Mezzanine Asset together with the related Mezzanine Related Asset.

“Asset Information” shall mean, with respect to each Purchased Asset, the information set forth in Exhibit VI attached hereto to the extent applicable to such Purchased Asset.

“Assets” shall have the meaning specified in Article 1.

“Availability Period” shall mean the period (i) beginning on the Closing Date and (ii) ending June 18, 2020 (which is one (1) year after the Closing Date), as such date may be extended pursuant to Article 3(f).

“Availability Period Extension” shall have the meaning specified in Article 3(f).

“Availability Period Extension Conditions” shall have the meaning specified in Article 3(f).

“Bailee” shall mean (i) Ropes & Gray LLP, (ii) a firm of solicitors regulated by the Solicitors Regulation Authority (with respect to any Foreign Purchased Asset secured by Mortgaged Property located in England) reasonably acceptable to Purchaser or (iii) any other attorney-at-law or law firm reasonably acceptable to Purchaser, or notary (if required in the relevant jurisdiction) that has, in the case of each of (i), (ii) and (iii) herein, delivered at Seller’s request a Bailee Letter, as applicable.

“Bailee Letter” shall mean a letter from a Seller and acknowledged by Bailee and Purchaser substantially in the form attached hereto as Exhibit XII, pursuant to which the Bailee (i) agrees to issue a Bailee Trust Receipt upon taking possession of the Purchased Asset Documents identified in such Bailee Letter, (ii) confirms that it is holding the Purchased Asset Documents as bailee (in the case of U.S. Purchased Assets) or agent (in the case of Foreign Purchased Assets), as applicable, for the benefit of Purchaser under the terms of such Bailee Letter, (iii) agrees that it shall deliver such Purchased Asset Documents to the Custodian, or as otherwise directed by Purchaser in writing, by not later than the third (3rd) Business Day following the Purchase Date for the related Purchased Asset and (iv) agrees to indemnify Purchaser and Sellers for any failure of Bailee to deliver the Purchased Asset Documents in accordance with the Bailee Letter.

“Bailee Trust Receipt” shall mean a trust receipt issued by Bailee to Purchaser in accordance with and substantially in the form contained in Exhibit XII confirming the Bailee’s possession of the Purchased Asset Documents listed thereon.

“Bankruptcy Code” shall mean The United States Bankruptcy Code of 1978, as amended from time to time.

4

“Borrower” shall mean (a) with respect to a U.S. Purchased Asset, (i) the obligor on a Promissory Note and (ii) (x) in the case of a Mortgage Loan related to the applicable Purchased Asset, the grantor of the related Mortgage or (y) in the case of a Mezzanine Loan related to the applicable Purchased Asset, the grantor of the pledge under the related pledge agreement and (b) with respect to a Foreign Purchased Asset, each obligor under the related Mortgage Loan.

“Breakage Costs” shall have the meaning specified in the Fee Letter.

“Business Day” shall mean a day other than (a) a Saturday or Sunday, or (b) a day in which the New York Stock Exchange, the Federal Reserve Bank of New York or banks in the States of New York, Kansas, Pennsylvania or Minnesota or, as it relates to a specific Foreign Purchased Asset, the relevant non-U.S. jurisdiction in which the Mortgaged Property securing the related Foreign Purchased Asset is located or the laws of which otherwise govern the Purchased Asset Documents relating to the subject Foreign Purchased Asset (or as otherwise designated in the Purchased Asset Documents relating to the subject Foreign Purchased Asset and stated in the related Confirmation) are authorized or obligated by law or executive order to be closed.

“Capital Stock” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, and any and all warrants or options to purchase any of the foregoing.

“Capitalized Lease Obligations” shall mean, with respect to any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligation shall be the capitalized amount thereof, determined in accordance with GAAP.

“Cash Flow Trigger Date” shall have the meaning specified in Section 5(j).

“Change of Control” shall mean the occurrence of any of the following events (a) any consummation of a merger, amalgamation, or consolidation of Guarantor with or into another entity or any other reorganization occurs and more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s stock or other ownership interest in such entity outstanding immediately after such merger, amalgamation, consolidation or such other reorganization is not owned directly or indirectly by Persons who were stockholders or holders of such other ownership interests in Guarantor immediately prior to such merger, amalgamation, consolidation or other reorganization; (b) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a percentage of the total voting power of all classes of Capital Stock of Guarantor entitled to vote generally in the election of directors of twenty percent (20%) or more other than wholly-owned Affiliates of Guarantor and related funds of The Blackstone Group L.P., or to the extent such interests are obtained through a

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public market offering or secondary market trading; (c) Guarantor shall cease to directly or indirectly own and control, of record and beneficially, 100% of the Capital Stock of any Seller; or (d) any transfer of all or substantially all of Guarantor’s assets (other than any securitization transaction or any repurchase or other similar transactions in the ordinary course of Guarantor’s business).

“Closing Date” shall mean June 19, 2019.

“Collateral” shall have the meaning specified in Article 7(a).

“Collection Accounts” shall have the meaning specified in Article 5(c).

“Confirmation” shall have the meaning specified in Article 3(c).

“Covenant Compliance Certificate” shall mean a properly completed and executed Covenant Compliance Certificate substantially in the form of Exhibit X hereto.

“Current Availability Period” shall have the meaning specified in Article 3(f).

“Current Termination Date” shall have the meaning specified in Article 3(g).

“Custodial Agreement” shall mean the Amended and Restated Custodial Agreement, dated on or about the Closing Date, by and among Custodian, Sellers and Purchaser, as the same may be amended, modified and/or restated from time to time, and/or any replacement agreement.

“Custodial Delivery” shall mean compliance by any Seller with the delivery obligations set forth in Section 2.02 of the Custodial Agreement.

“Custodian” shall mean U.S. Bank, National Association, or any successor custodian appointed by Purchaser and reasonably acceptable to Sellers.

“Default” shall mean any event which, with the giving of notice, the passage of time, or both, would constitute an Event of Default.

“Defaulted Asset” shall mean any Purchased Asset (including, with respect to any Participation Interest, the related Mortgage Loans or Mezzanine Loan) (a) that is ninety (90) days or more delinquent in the payment of scheduled principal or interest, fees or other amounts payable under the terms of the related Purchased Asset Documents, (b) for which there is a breach of the representations and warranties with respect to such Purchased Asset set forth in Exhibit V made by any Seller that has not been cured (other than MTM Representations and as disclosed in any Requested Exceptions Report approved by Purchaser in accordance with the terms hereof), (c) as to which an Act of Insolvency shall have occurred and be continuing with respect to the related Borrower or guarantor (with respect to an involuntary filing, if the same has not been dismissed for sixty (60) days), (d) as to which a material non-monetary event of default shall have occurred and be continuing for ninety (90) days under the terms of the related Purchased Asset Documents or (e) as to which a Future Advance Failure shall have occurred and be continuing for at least ninety (90) days.

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“Default Threshold” shall have the meaning specified in the Fee Letter.

“Delaware LLC Act” shall mean Chapter 18 of the Delaware Limited Liability Company Act, 6 Del. C. §§18-101 et seq., as amended.

“Direct Competitor” shall have the meaning specified in the Fee Letter.

“Dividing LLC” shall mean a Delaware limited liability company that is effecting a Division pursuant to and in accordance with Section 18-217 of the Delaware LLC Act.

“Division” shall mean the division of a Dividing LLC into two (2) or more domestic limited liability companies pursuant to and in accordance with Section 18-217 of the Delaware LLC Act.

“Due Diligence Package” shall have the meaning specified in Exhibit VII to this Agreement.

“Early Repurchase Date” shall have the meaning specified in Article 3(e).

“Eligibility Criteria” shall mean: (a) with respect to any Mortgage Loan or Mezzanine Loan, such Mortgage Loan or Mezzanine Loan (i) is performing as of its Purchase Date, (ii) is fully disbursed (except for customary holdbacks, reserves, escrows and Future Advances for interest, repairs, capital improvements, tenant improvements, leasing commissions and such other items as may be set forth in the related loan documents); (iii) accrues interest at a floating rate based on, (A) with respect to a U.S. Purchased Asset, LIBOR determined in accordance with paragraph (a) of the definition thereof, (B) with respect to a Foreign Purchased Asset (GBP), LIBOR determined in accordance with paragraph (b) of the definition thereof or, (C) with respect to a Foreign Purchased Asset (EUR), EURIBOR determined in accordance with the definition thereof (or, in each case, if applicable, an alternative floating rate index), (iv) has an interest rate cap in place that is acceptable to Purchaser in its sole and absolute discretion as of the related Purchase Date; (v) has a term to maturity of no greater than five (5) years, inclusive of extension options, (vi) if previously subject to another warehouse, repurchase or similar facility, was not subject to a margin call or mandatory early repurchase thereunder, (vii) has an underlying borrower/obligor that is a bankruptcy-remote special purpose entity, (viii) in the case of a Mortgage Loan, is secured by a first Lien mortgage or deed of trust on one or more properties that are of an Eligible Property Type and otherwise satisfies the criteria set forth in the definition of Eligible Property Type, and in the case of a Mezzanine Loan, is secured by a first Lien pledge of the equity in the Borrower under the related Mortgage Loan (or, with respect to a junior Mezzanine Loan, the direct parent of the borrower under such Mezzanine Loan immediately senior to such junior Mezzanine Loan in order of payment of priority); (ix) has, as of its Purchase Date, a senior financing as-is loan-to-value ratio (taking into account the Mortgage Loan and any related Mezzanine Loan that is, or is proposed to be, a Purchased Asset, together with any pari-passu loans but excluding any subordinate loans secured directly or indirectly by the same collateral (the “Senior Financing”)) of up to 80.0% as determined by Purchaser in its sole and absolute discretion on a case-by-case basis on or prior to the related Purchase Date, (x) has, as of its Purchase Date, a total financing as-is loan-to-value ratio (taking into account such Mortgage Loan together with any related pari-passu or subordinate (including

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mezzanine) loans secured directly or indirectly by the same collateral (the “Total Financing”) of up to 85.0% as determined by Purchaser in its sole and absolute discretion on a case-by-case basis on or prior to the related Purchase Date, (xi) in the case of a Mezzanine Loan, is denominated in the same Applicable Currency as the related Mortgage Loan and (xii) as of its Purchase Date, satisfies the requirements set forth in the Pricing Matrix; or (b) with respect to any Mezzanine Loan, Senior Note or Senior Participation Interest, the related Mortgage Loan and/or Mezzanine Loan satisfies the criteria set forth in clause (a) above.

“Eligibility Requirements” shall mean, with respect to any Person, that such Person (i) has total assets (in name or under management) in excess of $650,000,000 and (except with respect to a pension advisory firm, asset manager or similar fiduciary) capital/statutory surplus or shareholder’s equity of $250,000,000 and (ii) is regularly engaged in the business of making or owning (including indirectly through REMIC bonds and/or securitizations) commercial real estate loans or interests therein (including, without limitation, A-notes, B-notes, participations and mezzanine loans with respect to commercial real estate) or owning and operating commercial properties.

“Eligible Asset” shall mean any Mortgage Loan, Mezzanine Loan, Senior Note or Senior Participation Interest (a) that is approved by Purchaser in its sole and absolute discretion (such determination of acceptability only being applicable prior to the Purchase Date for the related Purchased Asset, but shall not be a factor at any time from and after such Purchase Date); (b) that satisfies the Eligibility Criteria; and (c) with respect to which, on the related Purchase Date, the representations and warranties with respect to such Purchased Asset set forth in this Agreement (including the Exhibits hereto) are true and correct in all material respects, except to the extent disclosed in a Requested Exceptions Report approved by Purchaser in writing in accordance with the terms hereof; provided, that any Mezzanine Asset shall be transferred to Purchaser together with the related Mezzanine Related Asset and, after becoming a Purchased Asset, repurchased together with the related Mezzanine Related Asset pursuant to this Agreement.

Unless otherwise specified, with respect to any Asset Combination, any reference to Eligible Asset shall include the applicable Mezzanine Related Asset and the Mezzanine Asset that is, or is proposed to be, subject to the same Transaction.

Notwithstanding anything to the contrary contained in this Agreement, the following shall not be Eligible Assets for purposes of this Agreement: (i) loans that, as of the Purchase Date, are non-performing, defaulted or delinquent; (ii) Purchased Assets that are Defaulted Assets as of the Purchase Date therefor; (iii) construction loans; (iv) mortgage-backed securities; (v) loans secured by raw, vacant or unimproved land; and (vi) participation interests in any assets described in the preceding clauses (i) through (v).

“Eligible Property Types” shall mean multi-family, office, retail, hospitality, industrial, self-storage and manufactured housing properties, or properties made up of any combination of the foregoing, in each case that: (i) have a minimum value of $25 million (or, with respect to any Foreign Purchased Asset, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Asset as of the date of determination) as determined by Purchaser in its sole and absolute discretion on a case-by-case basis; (ii) are not undergoing, and not be scheduled to undergo, any ground-up construction; and (iii) are free of material structural and/or environmental defects.

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The Eligible Property Type criteria set forth herein may be revised by Purchaser in its sole and absolute discretion with respect to any new Eligible Assets proposed to be purchased by the Purchaser pursuant to this Agreement prior to the Purchase Date of such Eligible Asset.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and, as of the relevant date, any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

“ERISA Affiliate” shall mean any corporation or trade or business that is a member of any group of organizations (a) described in Section 414(b) or (c) of the Internal Revenue Code of which any Seller is a member and (b) solely for purposes of potential liability under Section 302 of ERISA and Section 412 of the Internal Revenue Code, described in Section 414(m) or (o) of the Internal Revenue Code of which any Seller is a member.

“EURIBOR” shall mean, with respect to each Pricing Rate Period related to any Foreign Purchased Asset (EUR), the rate determined by Purchaser to be (i) the per annum rate for three (3) month deposits in Euros, which appears on Thomson Reuters Screen EURIBOR01 (or any replacement Thomson Reuters page which displays that rate) as the Euro interbank offered rate administered by the European Money Markets Institute (or any successor thereto) as of 11:00 a.m., Brussels time, on the Pricing Rate Determination Date (rounded upwards, if necessary, to the nearest 1/1000 of 1%); (ii) if such rate does not appear on said Thomson Reuters Screen EURIBOR01, the arithmetic mean (rounded as aforesaid) of the offered quotations of rates obtained by Purchaser from the Reference Banks for three (3) month deposits in Euros to prime banks in the London Interbank market as of approximately 11:00 a.m., Brussels time, on the Pricing Rate Determination Date and in an amount that is representative for a single transaction in the relevant market at the relevant time; or (iii) if fewer than two (2) Reference Banks provide Purchaser with such quotations, the rate per annum which Purchaser determines to be the arithmetic mean (rounded as aforesaid) of the offered quotations of rates which major banks in New York, New York selected by Purchaser are quoting at approximately 11:00 a.m., New York City time, on the Pricing Rate Determination Date for loans in Euros to leading European banks for a period equal to the applicable Pricing Rate Period in amounts of not less than $1,000,000.00, provided, that such selected banks shall be the same banks as selected for all of Purchaser’s other commercial real estate mortgage repurchase facilities where EURIBOR is to be applied, to the extent such banks are available.

EURIBOR may or may not be the lowest rate based upon the market for Euro deposits in the Euro interbank market at which Purchaser prices loans on the date which EURIBOR is determined by Purchaser as set forth above. Purchaser’s determination of EURIBOR shall be binding and conclusive on each Seller absent manifest error. Notwithstanding the foregoing, in no event shall EURIBOR be less than zero.

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“EURIBOR Transaction” shall mean, with respect to any Pricing Rate Period, any Transaction with respect to which the Pricing Rate is determined for such Pricing Rate Period with reference to EURIBOR, as specified in the related Confirmation (unless such Transaction is converted to an Alternate Rate Transaction in accordance with this Agreement).

“Euros” and “€ ” shall mean the lawful currency of the member states of the European Union that have adopted and retain the single currency in accordance with the Treaty establishing the European Community, as amended from time to time; provided that if any member state or states ceases to have such single currency as its lawful currency (such member state(s) being the “Exiting State(s)”), Euro and € shall, for the avoidance of doubt, mean for all purposes of this Agreement the single currency adopted and retained as the lawful currency of the remaining member states and shall not include any successor currency introduced by the Exiting State(s).

“Event of Default” shall have the meaning specified in Article 14(a).

“Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended.

“Excluded Taxes” shall mean any of the following taxes imposed on or with respect to Purchaser or required to be withheld or deducted from a payment to Purchaser: (a) taxes imposed on or measured by net income or similar taxes imposed in lieu of net income (however denominated), franchise taxes, and branch profits taxes, in each case, (i) imposed as a result of Purchaser being organized under the laws of, or having its principal office or the office from which it books a Transaction located in, the jurisdiction imposing such tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding taxes imposed on amounts payable to or for the account of Purchaser pursuant to a law in effect as of the date on which such Person (i) acquires such interest in a Transaction or (ii) changes its principal office or the office from which it books a Transaction, except to the extent that, pursuant to Article 32, that such taxes were payable to such party’s assignor immediately before such Person became a party hereto or to such Person immediately before it changed its lending office, (c) taxes attributable to Purchaser’s failure to comply with Article 23(g) or Article 32 of this Agreement and (d) any U.S. federal withholding taxes imposed under FATCA.

“Exit Fee” shall have the meaning specified in the Fee Letter.

“FATCA” shall mean Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together in each case with any current or future regulations, guidance or official interpretations thereof, any agreements entered into pursuant thereto, including any intergovernmental agreements and any rules or guidance implementing such intergovernmental agreements.

“FCA Regulations” shall have the meaning specified in Article 23(a).

“Federal Funds Rate” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by Purchaser from three (3) federal funds brokers of recognized standing selected by it; provided, that such selected brokers shall be the same brokers as selected for all of Purchaser’s other commercial real estate mortgage repurchase facilities where the Federal Funds Rate is to be applied, to the extent such brokers are available.

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“Fee Letter” shall mean the letter agreement, dated as of the Closing Date, from Purchaser and accepted and agreed by Sellers, as the same may be amended, modified and/or restated from time to time, and/or any replacement agreement.

“Filings” shall have the meaning specified in Article 7(b).

“Foreign Assignment Agreement” shall mean, with respect to a Foreign Purchased Asset, a security agreement or a security deed between the applicable Seller and Purchaser pursuant to which such Seller assigns and charges to Purchaser all of its right, title and interest under and in relation to each related Purchased Asset Document relating to such Foreign Purchased Asset (including its rights against any Security Agent) and any professional report delivered with respect to a Foreign Purchased Asset that is addressed to or capable of being relied on by such Seller (in such form as Purchaser may reasonably require).

“Foreign Purchased Asset” shall mean any Purchased Asset secured directly or indirectly by Mortgaged Property located outside of the United States of America or any territory thereof. Any Foreign Purchased Asset that is repurchased by a Seller in accordance with this Agreement shall cease to be a Purchased Asset.

“Foreign Purchased Asset (EUR)” shall mean a Foreign Purchased Asset denominated in Euros.

“Foreign Purchased Asset (GBP)” shall mean a Foreign Purchased Asset denominated in Pounds Sterling.

“Foreign Purchased Asset Collection Account” shall have the meaning specified in Article 5(c).

“Funding Fee” shall have the meaning specified in the Fee Letter.

“Future Advance” shall have the meaning specified in the definition of Future Advance Purchased Asset.

“Future Advance Failure” shall mean, with respect to any Purchased Asset, any Seller’s or Servicer’s receipt of notice or any Seller’s Knowledge of any litigation or other proceeding commenced by the related Borrower alleging a failure to fund any Future Advance as and when required thereunder, which litigation is continuing for ninety (90) days or more.

“Future Advance Purchased Asset” shall mean any Purchased Asset with respect to which less than the full principal amount of such Purchased Asset (or the related Mortgage Loan or Mezzanine Loan) is funded at origination and the applicable Seller as the holder (or licensee) of such Purchased Asset is obligated, subject to the satisfaction of certain conditions precedent under the related Purchased Asset Documents, to make additional advances (each, a “Future Advance”) in the future to the related Borrower.

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“GAAP” shall mean United States generally accepted accounting principles consistently applied as in effect from time to time.

“Governmental Authority” shall mean any national or federal government, any state, regional, local or other political subdivision thereof with jurisdiction over the applicable Person and any Person with jurisdiction exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantor” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation.

“Guaranty” shall mean the Guaranty, dated as of the Closing Date, from Guarantor in favor of Purchaser, as the same may be amended, modified and/or restated from time to time, and/or any replacement agreement.

“Hedging Transaction” shall mean, with respect to any or all of the Purchased Assets, any short sale of U.S. Treasury Securities or mortgage-related securities, futures contract (including Eurodollar futures) or options contract or any swap, cap or collar agreement or similar arrangements providing for protection against fluctuations in interest rates, credit spreads or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by any Seller in respect of such Purchased Asset(s) with Purchaser or an Affiliate of Purchaser or one or more other counterparties acceptable to Purchaser in its sole and absolute discretion.

“Income” shall mean, with respect to any Purchased Asset at any time, all monies collected from or in respect of such Purchased Asset, including without limitation, payments of interest, principal, repayment, rental or other income, insurance and liquidation proceeds, payments in respect of any associated hedging transaction, and all net proceeds from sale or other disposition of such Purchased Asset to a Person other than Purchaser. For the avoidance of doubt, Income shall not include origination fees and expense deposits paid by the Borrowers in connection with the origination and closing of the Purchased Asset, any reimbursement for out-of-pocket costs and expenses or any amounts deposited into an escrow reserve pursuant to and in accordance with the related Purchased Asset Documents.

“Indebtedness” shall mean, with respect to any Person, without duplication (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) obligations of such Person under repurchase agreements or like arrangements;

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(f) Indebtedness of others guaranteed by such Person to the extent of such guarantee; (g) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; and (h) Capitalized Lease Obligations of such Person. Notwithstanding the foregoing, non-Recourse Indebtedness owing pursuant to a securitization transaction such as a REMIC securitization, a collateralized loan obligation transaction or other similar securitization shall not be considered Indebtedness for any Person.

“Indemnified Amounts” and “Indemnified Parties” shall each have the respective meanings specified in Article 27(a).

“Indemnified Taxes” means (a) taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Sellers under any Transaction Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Independent Manager” shall mean a natural Person who (a) is not at the time of initial appointment and has never been, and will not while serving as Independent Manager be: (i) a stockholder, director, officer, employee, partner, member (other than a “special member” or “springing member”) or manager (with the exception of serving as the Independent Manager of a Seller) of any Seller Party or any Affiliate or equity owner of any Seller Party; (ii) a creditor, supplier or service provider who derives any of its purchases or revenues (other than any revenue derived from serving as the Independent Manager of such party or as a nationally recognized company that routinely provides professional independent managers or directors and that also provides lien search and other similar services to a Seller or any of its equity owners or Affiliates in the ordinary course of business) from its activities with any Seller Party, or any Affiliate or equity owner of any Seller Party; (iii) a Person controlling or under common control with any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person of any Seller Party or any Affiliate or equity owner of any Seller Party; or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, manager, equity owner, creditor, supplier or service provider of any Seller Party or any Affiliate or equity owner of any Seller Party and (b) has (i) prior experience as an independent director or independent manager for a corporation, a trust or limited liability company whose charter documents required the unanimous consent of all independent directors or independent managers thereof before such corporation, trust or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company or LordSPV, a TMF Group company or, if none of these companies is then providing professional independent directors or managers, another nationally recognized company reasonably acceptable to Purchaser, that is not an Affiliate of a Seller and that provides, inter alia, professional independent directors or independent managers in the ordinary course of their respective business to issuers of securitization or structured finance instruments, agreements or securities or lenders originating commercial real estate loans for inclusion in securitization or structured finance instruments, agreements or securities (a “Professional Independent Manager”) and is an employee of such a company or companies at all times during his or her service as an Independent Manager. A natural Person who satisfies the foregoing definition except for being (or having been) the independent director or independent

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manager of a “special purpose entity” Affiliated with any Seller Party (provided such Affiliate does not or did not own a direct or indirect equity interest in any Seller) shall not be disqualified from serving as an Independent Manager, provided that such natural Person satisfies all other criteria set forth above and that the fees such individual earns from serving as independent director or independent manager of Affiliates of any Seller or in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year. A natural Person who satisfies the foregoing definition other than clause (a)(ii) shall not be disqualified from serving as an Independent Manager if such individual is a Professional Independent Manager and such individual complies with the requirements of the previous sentence.

“Insolvency Regulation” shall have the meaning specified in Article 10(b)(xxxii).

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“Knowledge” shall mean, as of any date of determination, the then-current actual (as distinguished from imputed or constructive) knowledge of (i) Stephen Plavin, Thomas C. Ruffing, Douglas Armer or any replacement of any of the foregoing, (ii) any asset manager at The Blackstone Group L.P. or any Affiliate thereof responsible for the applicable Purchased Asset or (iii) any other employee with a title equivalent or more senior to that of “principal” within The Blackstone Group L.P. or any Affiliate thereof responsible for the origination, acquisition and/or management of the applicable Purchased Asset.

“LIBOR” shall mean:

(a) with respect to each Pricing Rate Period related to any U.S. Purchased Asset, the rate determined by Purchaser to be (i) the per annum rate for one (1) month deposits in U.S. Dollars, which appears on the Reuters Screen LIBOR01 Page (or any replacement Thomson Reuters page which displays that rate) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the Pricing Rate Determination Date (rounded upwards, if necessary, to the nearest 1/1000 of 1%); (ii) if such rate does not appear on said Reuters Screen LIBOR01 Page, the arithmetic mean (rounded as aforesaid) of the offered quotations of rates obtained by Purchaser from the Reference Banks for one (1) month deposits in U.S. Dollars to prime banks in the London Interbank market as of approximately 11:00 a.m., London time, on the Pricing Rate Determination Date and in an amount that is representative for a single transaction in the relevant market at the relevant time; or (iii) if fewer than two (2) Reference Banks provide Purchaser with such quotations, the rate per annum which Purchaser determines to be the arithmetic mean (rounded as aforesaid) of the offered quotations of rates which major banks in New York, New York selected by Purchaser are quoting at approximately 11:00 a.m., New York City time, on the Pricing Rate Determination Date for loans in U.S. Dollars to leading European banks for a period equal to the applicable Pricing Rate Period in amounts of not less than $1,000,000.00; provided, that such selected banks shall be the same banks as selected for all of Purchaser’s other commercial real estate repurchase facilities where LIBOR is to be applied, to the extent such banks are available.

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(b) with respect to each Pricing Rate Period related to any Foreign Purchased Asset (GBP), the rate determined by Purchaser to be (i) the per annum rate for three (3) month deposits in Pounds Sterling, which appears on Thomson Reuters Screen LIBOR01 (or any replacement Thomson Reuters page which displays that rate) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the Pricing Rate Determination Date (rounded upwards, if necessary, to the nearest 1/1000 of 1%); (ii) if such rate does not appear on said Thomson Reuters Screen LIBOR01, the arithmetic mean (rounded as aforesaid) of the offered quotations of rates obtained by Purchaser from the Reference Banks for three (3) month deposits in Pounds Sterling to prime banks in the London Interbank market as of approximately 11:00 a.m., Brussels time, on the Pricing Rate Determination Date and in an amount that is representative for a single transaction in the relevant market at the relevant time; or (iii) if fewer than two (2) Reference Banks provide Purchaser with such quotations, the rate per annum which Purchaser determines to be the arithmetic mean (rounded as aforesaid) of the offered quotations of rates which major banks in New York, New York selected by Purchaser are quoting at approximately 11:00 a.m., New York City time, on the Pricing Rate Determination Date for loans in Pounds Sterling to leading European banks for a period equal to the applicable Pricing Rate Period in amounts of not less than $1,000,000.00, provided, that such selected banks shall be the same banks as selected for all of Purchaser’s other commercial real estate mortgage repurchase facilities where LIBOR is to be applied, to the extent such banks are available.

Purchaser’s determination of LIBOR shall be binding and conclusive on Sellers absent manifest error. LIBOR may or may not be the lowest rate based upon the market for U.S. Dollars or Pounds Sterling, as applicable, deposits in the London Interbank Eurodollar Market at which Purchaser prices loans on the date which LIBOR is determined by Purchaser as set forth above. Notwithstanding the foregoing, in no event shall LIBOR be less than zero.

“LIBOR Transaction” shall mean, with respect to any Pricing Rate Period, any Transaction with respect to which the Pricing Rate is determined for such Pricing Rate Period with reference to LIBOR.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capitalized Lease Obligation having substantially the same economic effect as any of the foregoing), and the filing of any financing statement under the UCC or comparable law of any jurisdiction in respect of any of the foregoing.

“Litigation Threshold” shall have the meaning specified in the Fee Letter.

“London Business Day” shall mean any day other than (a) a Saturday, (b) a Sunday or (c) any other day on which commercial banks in London, United Kingdom are not open for business.

“Margin Call” shall have the meaning specified in Article 4(a).

“Margin Deficit” shall exist, with respect to any Purchased Asset, if (a) the Maximum Purchase Price for such Purchased Asset is less than (b) the outstanding Purchase Price for such Purchased Asset.

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“Margin Deficit Event” shall exist, with respect to any Purchased Asset, if the Margin Deficit for such Purchased Asset is at least $250,000 (or, with respect to any Foreign Purchased Asset, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Asset as of the date of determination).

“Margin Excess” shall mean, with respect to a Purchased Asset at any time of determination, the amount by which the Maximum Purchase Price for such Purchased Asset exceeds the outstanding Purchase Price for such Purchased Asset.

“Market Value” shall have the meaning specified in the Fee Letter.

“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, condition (financial or otherwise), assets or operations of the Seller Parties taken as a whole; (b) the ability of any Seller Party to perform its obligations under any of the Transaction Documents; (c) the validity or enforceability of any of the Transaction Documents; or (d) the rights and remedies of Purchaser under any of the Transaction Documents.

“Material Modification” shall mean any amendment, waiver or other modification to the terms of any Purchased Asset Documents, or any other action taken pursuant to or with respect to a Purchased Asset, which, in each case, would have the effect of:

(i) reducing the principal amount of the Purchased Asset in question other than (1) with respect to a dollar-for-dollar principal payment or (2) reductions of principal to the extent of deferred, accrued or capitalized interest added to principal which additional amount subsequently reduced was not taken into account by Purchaser in determining the related Maximum Purchase Price;

(ii) increasing the principal amount of a Purchased Asset other than (a) increases which are derived from accrual or capitalization of deferred interest which is added to principal or protective advances or (b) increases resulting from future fundings made pursuant to the Purchased Asset Documents;

(iii) modifying the amount or timing of any regularly scheduled payments of principal and non-contingent interest of the Purchased Asset in question, provided, however, that the related Seller may, without the consent of Purchaser change the scheduled payment date of a Purchased Asset within any given calendar month;

(iv) changing the frequency of scheduled payments of principal and interest in respect of a Purchased Asset;

(v) subordinating the Lien priority of the Purchased Asset in question or the payment priority of the Purchased Asset in question other than subordinations required under the then existing terms and conditions of the Purchased Asset in question (provided, however, the foregoing shall not preclude the execution and delivery of subordination, nondisturbance and attornment agreements with tenants, subordination to tenant leases, easements, plats of subdivision and condominium declarations, conditions, covenants and restrictions and similar instruments which in the commercially reasonable judgment of the related Seller do not materially adversely affect the rights and interest of the holder of the Purchased Asset in question);

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(vi) releasing any material collateral for the Purchased Asset in question other than releases required under the related Purchased Asset Documents;

(vii) waiving, amending or modifiying any cash management or reserve account requirements of the Purchased Asset other than changes required under the related Purchased Asset Documents;

(viii) waiving any due-on-sale or due-on-encumbrance provisions of the Purchased Asset in question other than waivers required to be given under the related Purchased Asset Documents; or

(ix) waiving, amending or modifying the underlying insurance requirements of the Purchased Asset.

“Maximum Facility Purchase Price” shall have the meaning specified in the Fee Letter.

“Maximum Purchase Price” shall mean, with respect to any Purchased Asset on any date, an amount expressed in U.S. Dollars (or, with respect to any Foreign Purchased Asset, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Asset as of the date of determination) equal to the product obtained by multiplying the applicable Purchase Price Percentage set forth in the related Confirmation (as the same may be updated in accordance with Article 3(h)), by the lesser of (x) the unpaid principal balance of such Purchased Asset and (y) the Market Value of such Purchased Asset.

“Mezzanine Asset” shall mean, any Eligible Asset or Purchased Asset that is a Mezzanine Loan, a Senior Note representing a portion of a Mezzanine Loan or a Participation Interest representing an interest in a Mezzanine Loan.

“Mezzanine Loan” shall mean a whole mezzanine loan that is secured by a pledge of all of the equity interests in entities that own, directly or indirectly, the Mortgaged Property(ies) that serve as collateral for a related Mortgage Loan.

“Mezzanine Related Asset” shall mean, with respect to any Mezzanine Asset, the related Mortgage Loan, Senior Note related to such Mortgage Loan or Participation Interest representing an interest in such Mortgage Loan, as applicable.

“Monthly Reporting Package” shall mean a monthly reporting package that includes (a) any and all other required reports, rent rolls, financial statements, certificates and material notices (including, without limitation, any notice of the occurrence of a default or an event of default under the Purchased Asset Documents) the related Seller receives pursuant to the Purchased Asset Documents relating to any Purchased Asset, (b) a remittance report containing servicing information, including, without limitation, the amount of each periodic payment due, the amount of each periodic payment received, the date of receipt, the date due, and whether, to the related Seller’s Knowledge, there has been any developments or events with respect to such

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Purchased Asset that have occurred since delivery of the last Monthly Reporting Package that are reasonably likely to have a Material Adverse Effect, on a loan by loan basis and in the aggregate, with respect to the Purchased Assets serviced by Servicer (such remittance report, a “Servicing Tape”), or to the extent Servicer does not provide any such Servicing Tape, a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape, and (c) a listing of all Purchased Assets reflecting (i) loan status, collection performance and any delinquency and loss experience with respect to any Purchased Asset, and (ii) such other information as mutually agreed by the related Seller and Purchaser.

“Mortgage” shall mean: (x) with respect to a U.S. Purchased Asset, a mortgage, deed of trust, deed to secure debt or other instrument, creating a valid and enforceable first Lien on or a first priority ownership interest in an estate in (i) fee simple in real property and the improvements thereon or (ii) a ground lease, in each case securing a Promissory Note or similar evidence of indebtedness, and (y) with respect to a Foreign Purchased Asset, the related debenture or equivalent security deed or other instrument creating a first priority Lien (or, in relation to a Foreign Purchased Asset located in England, a first ranking legal mortgage) or a first priority security interest in a property and the improvements thereon, securing a Promissory Note or similar evidence of indebtedness.

“Mortgage Loan” shall mean a whole mortgage loan secured by a first Lien on one or more commercial or multi-family properties.

“Mortgaged Property” shall mean, in the case of (a) a Mortgage Loan, the mortgaged property securing such Mortgage Loan (b) a Mezzanine Loan, the mortgaged property directly or indirectly securing such Mezzanine Loan and (c) a Participation Interest, the mortgaged property securing such Participation Interest, or the mortgaged property directly or indirectly securing the Mortgage Loan and/or Mezzanine Loan, as applicable, in which such Participation Interest represents a participation, as applicable.

“MTM Representation” shall mean:

(i) with respect to each Mortgage Loan that (x) is a Purchased Asset or (y) is related to a Purchased Asset that is a Mezzanine Loan, Senior Note or Participation Interest, (A) the representations and warranties set forth in the following paragraphs of Exhibit V-A, Section (B): Paragraph 11 (Condition of Property), Paragraph 12 (Taxes and Assessments), Paragraph 14 (Actions Concerning Mortgage Loan), Paragraph 15 (Escrow Deposits), Paragraph 18 (Access; Utilities; Separate Tax Lots), Paragraph 19 (No Encroachments), Paragraph 25 (Local Law Compliance), Paragraph 26 (Licenses and Permits), Paragraph 35(f) (Ground Leases), Paragraph 36 (Servicing), Paragraph 37 (Origination and Underwriting), Paragraph 39 (No Material Default; Payment Record) and Paragraph 42 (Environmental Conditions); and (B) solely with respect to each Purchased Asset where (and to the extent that) the Mortgaged Property is located in England or Wales, those representations and warranties described in sub-clause (A) above and the representations and warranties set forth in Paragraph 8 (Loan Event of Default) and Paragraph 10 (Market Value of Mortgaged Property) of Exhibit V-B.

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(ii) with respect to each Mezzanine Loan that (x) is a Purchased Asset or (y) is related to a Purchased Asset that is a Senior Note or Participation Interest, the representations and warranties set forth in the following paragraphs of Exhibit V-A, Section (C): Paragraph 1 (Whole Loans) (solely with respect to the last sentence thereof as it relates to the representations and warranties set forth in clause (i) above), Paragraph 7 (Actions Concerning Mezzanine Loan), Paragraph 8 (Escrow Deposits), Paragraph 16 (Servicing), Paragraph 17 (Origination and Underwriting) and Paragraph 18 (No Material Default; Payment Record);

(iii) with respect to each Senior Note that is a Purchased Asset, the representation and warranty set forth in Exhibit V-A, Section (D) solely as it relates to the representations and warranties set forth in clause (i) and (ii) above, as applicable; and

(iv) with respect to each Participation Interest that is a Purchased Asset, the representations and warranties set forth in the following paragraphs of Exhibit V-A, Section (E): Paragraph 1 (Mortgage Loan/Mezzanine Loan) (solely as it relates to the representations and warranties set forth in clause (i) and (ii) above, as applicable), Paragraph 7 (No Defaults or Waivers under Participation Documents) and Paragraph 9 (No Known Liabilities).

“Multiemployer Plan” shall mean a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been, or were required to have been, made by any Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.

“Other Connection Taxes” shall mean taxes imposed as a result of a present or former connection between Purchaser and the jurisdiction imposing such taxes (other than a connection arising solely as a result of Purchaser having executed, delivered, become a party to, performed its obligations under, received payments under, or received or perfected a security interest under any Transaction Document).

“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar taxes (including, without limitation, United Kingdom stamp duty and stamp duty reserve tax) that arise from any payment made under, the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document, except any such taxes that are Other Connection Taxes imposed with respect to an assignment, transfer or sale of participation or other interest in or with respect to the Transaction Document.

“Participant Register” shall have the meaning specified in Article 20(d).

“Participating Member State” shall mean any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

“Participation Certificate” shall mean the original participation certificate, if any, that was executed and delivered in connection with a Participation Interest.

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“Participation Interest” shall mean a participation interest in a Mortgage Loan or Mezzanine Loan.

“Paying Seller” shall have the meaning specified in Article 33(c).

“Person” shall mean an individual, corporation, limited liability company, business trust, partnership, joint tenant or tenant-in-common, trust, joint stock company, joint venture, unincorporated organization, or any other entity of whatever nature, or a Governmental Authority.

“Plan” shall mean an employee benefit or other plan established or maintained by any Seller or any ERISA Affiliate during the five year period ended prior to the date of this Agreement or to which such Seller or any ERISA Affiliate makes, is obligated to make or has, within the five year period ended prior to the date of this Agreement, been required to make contributions and that is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Internal Revenue Code, other than a Multiemployer Plan.

“Post-Availability Period” shall mean, if an extension of the Termination Date is effected pursuant to Article 3(g), the period (i) beginning immediately upon the expiration of the Availability Period and the beginning of such extension period and (ii) ending on the Termination Date, as the same may be extended pursuant to Article 3(g).

“Post-Availability Period Extension Conditions” shall have the meaning specified in Article 3(g).

“Pounds Sterling” and “£” shall mean the lawful currency for the time being of the United Kingdom.

“PRA Contractual Stay Rules” shall have the meaning specified in Article 30(b).

“Pre-Purchase Due Diligence” shall have the meaning specified in Article 3(c).

“Pre-Purchase Legal/Due Diligence Review Fee” shall have the meaning specified in the Fee Letter.

“Pricing Matrix” shall have the meaning specified in the Fee Letter.

“Pricing Rate” shall mean, for any Pricing Rate Period and any Transaction, an annual rate equal to the sum of (a)(i) with respect to a LIBOR Transaction, LIBOR in relation to U.S. Dollars calculated in accordance with paragraph (a) of that definition, or in relation to GBP calculated in accordance with paragraph (b) of that definition, or in relation to Euros, determined in accordance with EURIBOR for such Pricing Rate Period, (ii) with respect to an Alternative Rate Transaction, the Alternative Rate for such Pricing Rate Period and (iii) with respect to a Prime Rate Transaction, the Prime Rate for such Pricing Rate Period plus (b) the relevant Spread for such Transaction plus (c) the relevant Spread Adjustment for such Transaction, in each case, subject to adjustment and/or conversion as provided in Articles 6(a)(i) and 6(b); provided, however that in no event shall the Pricing Rate be less than the relevant Spread.

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“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate Period with respect to (i) any Transaction, other than a LIBOR Transaction or EURIBOR Transaction, the second (2^nd) Business Day, and (ii) any LIBOR Transaction or EURIBOR Transaction, the second (2^nd) London Business Day, in each case, preceding the first day of such Pricing Rate Period.

“Pricing Rate Period” shall mean, with respect to any Transaction, Remittance Date or Repurchase Date (a) in the case of the first Pricing Rate Period, the period commencing on and including the Purchase Date for such Transaction and ending on and excluding the following Remittance Date, and (b) in the case of any subsequent Pricing Rate Period, the period commencing on and including the immediately preceding Remittance Date and ending on and excluding the following Remittance Date; provided, however, that in no event shall any Pricing Rate Period for a Purchased Asset end subsequent to the Repurchase Date for such Purchased Asset (or such later date on which the Purchased Asset is actually repurchased).

“Prime Rate” shall mean the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates) on the related Pricing Rate Determination Date (and, upon conversion of a Transaction from a LIBOR Transaction or an Alternative Rate Transaction to a Prime Rate Transaction pursuant to Article 6(a) of this Agreement on the date of the conversion of a Transaction from a LIBOR Transaction or an Alternative Rate Transaction to a Prime Rate Transaction). The Prime Rate shall be determined by Purchaser or its agent which determination shall be conclusive absent manifest error. Notwithstanding the foregoing, in no event shall the Prime Rate be less than zero.

“Prime Rate Transaction” shall mean, with respect to any Pricing Rate Period, any Transaction with respect to which the Pricing Rate for such Pricing Rate Period is determined with reference to the Prime Rate.

“Principal Payment” shall mean, with respect to any Purchased Asset, any scheduled or unscheduled payment or prepayment of principal (including, without limitation, insurance casualty or condemnation proceeds to the extent that such proceeds are not required to be reserved, escrowed or readvanced to the Borrower pursuant to the applicable Purchased Asset Documents and are applied to the payment of principal in respect thereof, and any other amounts applied in reduction of the principal balance thereof).

“Prohibited Person” shall mean any Person (i) whose name appears on the list of Specially Designated Nationals and Blocked Persons by the Office of Foreign Asset Control (OFAC); (ii) that is a foreign shell bank; and (iii) that resident in or whose subscription funds are transferred from or through an account in a jurisdiction that has been designated as a non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering (FATF), of which the U.S. is a member and with which designation the U.S. representative to the group or organization continues to concur; or (iv) that is, or is owned or controlled by any Person that is, the target of any Sanctions or is located, organized or resident in a country or territory that is, or whose government is, the target of Sanctions.

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“Promissory Note” shall mean (x) with respect to a U.S. Purchased Asset, a note or other evidence of indebtedness of a Borrower under a Mortgage Loan or a Mezzanine Loan in connection with such U.S. Purchased Asset, and (y) with respect to a Foreign Purchased Asset, any evidence of indebtedness of a Borrower (including, without limitation, the applicable facility, bond or loan agreement) in connection with such Foreign Purchased Asset.

“Property Report” shall mean, with respect to a Foreign Purchased Asset, any certificate or report title in relation to the related Mortgaged Property that is delivered as a condition precedent to the making of the related Foreign Purchased Asset under the loan agreement for such Foreign Purchased Asset. Any such Property Report shall (a) with respect to any Wet Purchased Asset, be addressed to Purchaser and capable of being relied upon by Purchaser or any beneficial owner of the related Foreign Purchased Asset from time to time and (b) with respect to any Purchased Asset other than a Wet Purchased Asset, at Purchaser’s request, be addressed to Purchaser or otherwise capable of being relied upon by Purchaser or any beneficial owner of the related Foreign Purchased Asset from time to time.

“Purchase Date” shall mean, with respect to any Purchased Asset, the date on which Purchaser purchases such Purchased Asset from the related Seller hereunder.

“Purchase Date Spot Rate” shall mean, with respect to any Foreign Purchased Asset, the Spot Rate as of the related Purchase Date for purchasing the Applicable Currency of such Purchased Asset using U.S. Dollars (which shall be set forth in the applicable Confirmation).

“Purchase Price” shall mean, with respect to any Purchased Asset, the price (paid in the same Applicable Currency as the related Purchased Asset) at which such Purchased Asset is transferred by the related Seller to Purchaser on the applicable Purchase Date, increased by any amounts advanced by Purchaser to such Seller hereunder with respect to such Purchased Asset after its Purchase Date, decreased by any amounts applied by Purchaser to reduce the Purchase Price for the Purchased Asset (including, without limitation, any cash payment and/or application of Margin Excess by such Seller in connection with the cure of any Margin Deficit pursuant to Article 4). The Purchase Price as of the Purchase Date for any Purchased Asset shall be set forth in the Confirmation for the related Transaction (expressed in the same Applicable Currency as the related Purchased Asset) and shall not exceed the Maximum Purchase Price with respect to such Purchased Asset.

For purposes of calculating the aggregate outstanding Purchase Price for all Purchased Assets in relation to the determination of whether the Maximum Facility Purchase Price, the Maximum Fixed Rate Asset Purchase Price or the Maximum Floating Rate Asset Purchase Price has been exceeded as of any date of determination, the outstanding Purchase Price of each Foreign Purchased Asset in the Applicable Currency as of such date of determination shall be converted to U.S. Dollars at the respective Purchase Date Spot Rate.

“Purchase Price Differential” shall mean, with respect to any Purchased Asset as of any date of determination, the amount equal to the product of (a) the applicable Pricing Rate for such Purchased Asset and (b) the daily outstanding Purchase Price of such Purchased Asset, calculated on the basis of a either (i) a 360-day year with respect to U.S. Purchased Assets or in relation to any Foreign Purchased Asset which is subject to a EURIBOR Transaction or (ii) a 365

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day year with respect to any Foreign Purchased Asset which is subject to a LIBOR Transaction and the actual number of days during the period commencing on (and including) the Purchase Date for such Purchased Asset and ending on the date of determination (reduced by any amount of such Purchase Price Differential previously paid by the related Seller to Purchaser with respect to such Purchased Asset). Purchase Price Differential shall be payable in the Applicable Currency of the Purchase Price of the applicable Purchased Asset.

“Purchase Price Percentage” shall have the meaning specified in the Fee Letter.

“Purchased Asset” shall mean (a) with respect to any Transaction, the Eligible Asset sold by a Seller to Purchaser in such Transaction and (b) with respect to the Transactions in general, all Eligible Assets sold by such Seller to Purchaser (other than Purchased Assets that have been repurchased by such Seller). Any Purchased Asset that is repurchased by the related Seller in accordance with this Agreement shall cease to be a Purchased Asset. Unless otherwise specified, any reference to Purchased Asset shall include the Mortgage Loan and any related Mezzanine Loan that is subject to the same Transaction. Unless otherwise specified, with respect to any Asset Combination, any reference to Purchased Asset shall include the applicable Mezzanine Related Asset and the Mezzanine Asset that is, or is proposed to be, subject to the same Transaction.

“Purchased Asset Documents” shall mean, with respect to a Purchased Asset, the documents comprising the Purchased Asset File for such Purchased Asset.

“Purchased Asset File” shall mean, with respect to each Purchased Asset, the documents specified as the “Purchased Asset File” in the Custodial Agreement, together with any additional documents and information required to be delivered to Purchaser or its designee (including the Custodian) pursuant to this Agreement and/or the Custodial Agreement.

“Purchased Asset Schedule” shall mean, with respect to any Purchased Asset, a schedule attached to each Trust Receipt and Custodial Delivery Certificate substantially in the form attached as Exhibit A to Annex 1 to the Custodial Agreement.

“Purchased Items” shall mean all of a Seller’s right, title and interest in, to and under each of the following items of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located:

(i) the Purchased Assets;

(ii) the Purchased Asset Documents, the Servicing Rights, the Servicing Agreement, the Servicing Records, mortgage guaranties, mortgage insurance, insurance policies, insurance claims, collection and escrow accounts, and letters of credit, in each case, relating to the Purchased Assets;

(iii) any Hedging Transactions entered into with respect to any Purchased Asset to the extent such Hedging Transactions are permitted to be transferred without consent of the applicable counterparty;

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(iv) all related forward trades and takeout commitments placed on the Purchased Assets to the extent such takeout commitments are permitted to be transferred without consent of the applicable counterparty;

(v) all “general intangibles”, “accounts”, “chattel paper”, “investment property”, “instruments”, “securities accounts” and “deposit accounts”, each as defined in the UCC, relating to or constituting any and all of the foregoing; and

(vi) all replacements, substitutions or distributions on or proceeds, payments, Income and profits of, and records (but excluding any financial models or other proprietary information) and files relating to any and all of any of the foregoing.

“Purchaser” shall have the meaning specified in the introductory paragraph hereof.

“Qualified Transferee” shall mean (i) Purchaser and any entity Controlled by, Controlling or under common Control with Purchaser or (ii) any one or more of the following:

(A) a real estate investment trust, bank, savings and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan; provided that any such Person satisfies the Eligibility Requirements;

(B) an investment company, money management firm or “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended; provided that any such Person satisfies the Eligibility Requirements;

(C) an institution substantially similar to any of the entities described in clauses (ii)(A), (ii)(B) or (ii)(E) of this definition that satisfies the Eligibility Requirements;

(D) any entity Controlled by, Controlling or under common Control with, any of the entities described in clauses (ii)(A), (ii)(B), (ii)(C) or (ii)(E) of this definition;

(E) an investment fund, limited liability company, limited partnership or general partnership where an entity that is otherwise a Qualified Transferee under clauses (ii)(A), (ii)(B), (ii)(C) or (ii)(D) of this definition, acts as the general partner, managing member or fund manager and at least fifty percent (50%) of the equity interests in such investment fund, limited liability company, limited partnership, general partnership or entity are owned, directly or indirectly, by one or more of the following: a Qualified Transferee, an institutional “accredited investor” within the meaning of Regulation D promulgated under the Securities Act of 1933, as amended, and/or a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act of 1933, as amended, provided such institutional “accredited investors” or “qualified institutional buyers” that are used to satisfy the fifty percent (50%) test set forth above in this clause (ii)(E) satisfy the financial tests in clause (i) of the definition of Eligibility Requirements; or

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(F) any entity that is otherwise a Qualified Transferee under clauses (ii)(A), (ii)(B), (ii)(C), (ii)(D) or (ii)(E) of this definition that is acting in an agency capacity for a syndicate of lenders, provided more than fifty percent (50%) of the committed loan amounts or outstanding loan balance are owned by lenders in the syndicate that are Qualified Transferees.

For purposes of this definition of “Qualified Transferee” only, “Control” shall mean, when used with respect to any specific Person, the ownership, directly or indirectly, in the aggregate of more than twenty percent (20%) of the beneficial ownership interest of such Person and the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise, and “Controlled by,” “Controlling” and “under common Control with” shall have the respective correlative meaning thereto.

“Record Holder” shall mean, the holder of any Promissory Note or Participation Interest, to the extent that such holder is the lender of record (including, without limitation, the mortgagee or pledgee, as applicable, of record) with respect to the related Mortgage Loan and/or Mezzanine Loan pursuant to the related co-lender agreement, participation agreement or intercreditor agreement.

“Recourse Indebtedness” shall mean, with respect to any Person, on any date of determination, the amount of Indebtedness for which such Person has recourse liability (such as through a guarantee agreement), exclusive of any such Indebtedness for which such recourse liability is limited to obligations relating to or under agreements containing customary nonrecourse carve-outs.

“Redirection Letter” shall have the meaning specified in Article 29(e).

“Reference Banks” shall mean banks designated by Purchaser, in its sole and absolute discretion, each of which shall (i) be a leading bank engaged in transactions in Eurodollar deposits in the international Eurocurrency market and (ii) have an established place of business in London.

“Register” shall have the meaning specified in Article 20(c).

“REIT” shall mean an entity that has elected to be a “real estate investment trust” for federal income tax purposes pursuant to Sections 856, et seq. of the Internal Revenue Code.

“Release Letter” shall mean a letter substantially in the form of Exhibit IX hereto (or such other form as may be acceptable to Purchaser).

“Remittance Date” shall mean (i) for any U.S. Purchased Assets the seventeenth (17^th) calendar day of each month, or the immediately succeeding Business Day, if such calendar day shall not be a Business Day, (ii) for any Foreign Purchased Asset, January 25, April 25, July 25 and October 25, or the immediately succeeding Business Day, if such calendar day shall not be a Business Day or (iii) such other day as is mutually agreed to by the related Seller and Purchaser.

“Repurchase Date” shall mean, with respect to any Purchased Asset, the earliest to occur of (a) the date set forth in the applicable Confirmation, or if such day is not a Business Day, the immediately following Business Day, as the same may be extended by Purchaser in its sole discretion or otherwise in accordance with this Agreement; (b) an Early Repurchase Date with

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respect to such Purchased Asset; (c) the maturity date of such Purchased Asset (as the same may be extended pursuant to the Purchase Asset Documents); (d) the Accelerated Repurchase Date or (e) the Termination Date. Notwithstanding anything to the contrary herein, any Mezzanine Loan that is a Purchased Asset shall be repurchased simultaneously with the repurchase of the related Mortgage Loan.

“Repurchase Obligations” shall have the meaning specified in Article 7(a).

“Repurchase Price” shall mean, with respect to any Purchased Asset as of any Repurchase Date or any date on which the Repurchase Price is required to be determined hereunder, the price at which such Purchased Asset is to be transferred from Purchaser to the applicable Seller upon termination of the related Transaction; such price will be determined in each case as the sum of (i) the outstanding Purchase Price of such Purchased Asset as of such date; (ii) the accrued and unpaid Purchase Price Differential with respect to such Purchased Asset as of such date (other than, with respect to calculations in connection with the determination of a Margin Deficit, accrued and unpaid Purchase Price Differential for the current Pricing Rate Period); (iii) all accrued and unpaid out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of outside counsel and any applicable Breakage Costs and Exit Fees) of Purchaser relating to such Purchased Assets required to be paid by any Seller Party under the Transaction Documents; and (iv) any other amounts due and owing by the applicable Seller to Purchaser pursuant to the terms of the Transaction Documents as of such date.

“Requested Exceptions Report” shall have the meaning specified in Exhibit VII hereto.

“Requirement of Law” shall mean any applicable law, treaty, rule, regulation, code, directive, policy, order or requirement or determination of an arbitrator or a court or other Governmental Authority whether now or hereafter enacted or in effect in any relevant jurisdiction.

“Responsible Officer” shall mean any executive officer of a Seller.

“Sanctions” shall mean, collectively, any sanctions administered or enforced by the U.S. Treasury Department Office of Foreign Asset Control (OFAC), the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council, the European Union, the United Kingdom or any other relevant sanctions authority of any jurisdiction in which any Seller Party is located or does business.

“SEC” shall have the meaning specified in Article 24(a).

“Security Agent” shall mean, with respect to a Foreign Purchased Asset that is in syndicated form, a security agent or a security trustee appointed by the lenders under such Foreign Purchased Asset to hold the benefit of any security agreements relating to such Foreign Purchased Asset on their behalf or under a parallel debt obligation.

“Seller” shall have the meaning assigned thereto in the introductory paragraph hereof.

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“Seller Party” shall mean, collectively or individually, as the context may require, the applicable Seller and Guarantor.

“Seller Financing Statement” shall have the meaning specified in Article 3(b).

“Senior Note” shall mean a Promissory Note evidencing a senior or pari passu senior position in a Mortgage Loan or a Mezzanine Loan; provided that any pari passu Senior Note is the controlling note. A Senior Note shall not be junior to any other Promissory Note secured directly or indirectly by the same Mortgaged Property (it being understood, for the avoidance of doubt, that a Senior Note in a Mezzanine Loan shall not be deemed junior to a Senior Note in the related Mortgage Loan to the extent that such Senior Notes collectively are not junior to any other Promissory Note or Participation Interest secured directly or indirectly by the same Mortgaged Property).

“Senior Participation Interest” shall mean a senior or pari passu senior Participation Interest in a Mortgage Loan (which Participation Interest shall be paid in the same Applicable Currency as the related Mortgage Loan) or a Mezzanine Loan and the related Mortgage Loan evidenced by a Participation Certificate; provided that any pari passu Senior Participation Interest is the controlling participation interest (but the holder thereof does not need to be the Record Holder so long as an agent thereof is the Record Holder or the holder of the related companion participation interest which is the Record Holder is a securitization issuer). A Senior Participation Interest shall not be junior to any other participation interest or Promissory Note secured directly or indirectly by the same Mortgaged Property (it being understood, for the avoidance of doubt, that a Senior Participation Interest in a Mezzanine Loan shall not be deemed junior to a Senior Participation Interest in the related Mortgage Loan to the extent that such Senior Participation Interests collectively are not junior to any other Promissory Note or Participation Interest secured directly or indirectly by the same Mortgaged Property).

“Servicer” shall mean Midland Loan Services, a division of PNC Bank, National Association or any other servicer approved by Purchaser in its reasonable discretion.

“Servicing Agreement” shall mean (i) that certain Amended and Restated Servicing Agreement, dated on or about the Closing Date, by and among Servicer, US Seller and Purchaser, (ii) that certain Servicing Agreement, dated on or about the Closing Date, by and among Servicer, UK Seller and Purchaser, (iii) that certain Servicing Agreement, dated on or about the Closing Date, by and among Servicer, EUR Seller and Purchaser and (iv) any other servicing agreement, in form and substance acceptable to Purchaser in its sole and absolute discretion, entered into by any Seller, any Servicer and Purchaser, in each case, as the same may be amended, modified and/or restated from time to time, and/or any replacement servicing agreement reasonably acceptable to Purchaser.

“Servicing Records” shall have the meaning specified in Article 29(f).

“Servicing Rights” shall mean rights of any Seller Party, to administer, service or subservice, the Purchased Assets or to possess related Servicing Records.

“Servicing Tape” shall have the meaning specified in the definition of “Monthly Reporting Package.”

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“Spot Rate” shall mean, with respect to any Foreign Purchased Asset on any date of determination, the rate quoted as the spot rate for the purchase of the Applicable Currency of such Purchased Asset using U.S. Dollars at or about 11:00 a.m., London time, on the date that is two (2) Business Days prior to the date as of which the foreign exchange computation is made as obtained from the applicable screen on Bloomberg.

“Spread” shall have the meaning specified in the Fee Letter.

“SIPA” shall have the meaning specified in Article 24(a).

“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests in each case having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of any Seller.

“Termination Date” shall mean the later of (i) the date of the expiration of the Availability Period or (ii) or such later date as may be in effect pursuant to Article 3(g).

“Title Insurer” shall mean a nationally recognized title insurance company qualified to do business in the jurisdiction where the applicable Mortgaged Property is located.

“Title Policy” shall mean an American Land Title Association (ALTA) lender’s title insurance policy or a comparable form of lender’s title insurance policy (or escrow instructions binding on the Title Insurer and irrevocably obligating the Title Insurer to issue such title insurance policy, a title policy commitment or pro-forma “marked up” at the origination of the related Purchased Asset and countersigned by the Title Insurer or its authorized agent) as adopted in the applicable jurisdiction and, if applicable, a mezzanine endorsement thereto.

“Transaction” shall mean a Transaction, as specified in Article 1.

“Transaction Documents” shall mean, collectively, this Agreement, any applicable Exhibits and Annexes to this Agreement, the Fee Letter, the Guaranty, the Custodial Agreement, the Servicing Agreement, each Account Control Agreement, each Foreign Assignment Agreement, all Confirmations and assignment documentation executed pursuant to this Agreement in connection with specific Transactions, and all other documents executed in connection with this Agreement or any Transaction.

“Transfer Certificate” shall mean, with respect to a Foreign Purchased Asset, any form of transfer or substitution certificate or assignment agreement that is scheduled to the related loan agreement or other equivalent agreement for such Foreign Purchased Asset and that is used to effect the legal transfer or assignment of such Foreign Purchased Asset.

“Trust Receipt” shall have the meaning specified in the Custodial Agreement.

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“UCC” shall have the meaning specified in Article 7(b).

“UCC Filing Jurisdiction” shall mean the State of Delaware.

“Underwriting Issues” shall mean, with respect to any Purchased Asset as to which a Seller intends to request a Transaction, (i) all material information Known by such Seller after making reasonable inquiries and exercising reasonable care and diligence used by a prudent commercial real estate lender in determining whether to originate or acquire the Purchased Asset in question that would be considered a materially “negative” factor (either separately or in the aggregate with other information) or (ii) a material defect in loan documentation or closing deliveries (such as any absence of any material Purchased Asset Document(s)) Known by such Seller that a prudent commercial real estate lender in determining whether to originate or acquire the Purchased Asset in question.

“U.S. Dollars” and “$” shall mean freely transferable lawful money of the United States of America.

“U.S. Tax Compliance Certificate” shall have the meaning specified in Article 32(a) hereof.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code.

“U.S. Purchased Asset” shall mean any Purchased Asset secured directly or indirectly by Mortgaged Property located in the United States of America or any territory thereof and which is sold by the applicable Seller to Purchaser.

“Wet Purchased Asset” shall mean an Eligible Asset which a Seller is selling to Purchaser simultaneously with the origination thereof and for which the Purchased Asset File has not been delivered to Custodian.

The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender. All references to articles, schedules and exhibits are to articles, schedules and exhibits in or to this Agreement unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “include” or “including” shall mean without limitation by reason of enumeration. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. References to “good faith” in this Agreement shall mean “honesty in fact in the conduct or transaction concerned.”

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ARTICLE 3

INITIATION; CONFIRMATION; TERMINATION; EXTENSION

(a) Entry into Transactions. During the Availability Period, upon the satisfaction of all conditions set forth in Article 3(b) for the initial Transaction after the date hereof (and, with respect to Article 3(b)(iv), the initial Transaction entered into by Purchaser with any Seller with respect to a Foreign Purchased Asset and any Applicable Currency) and Article 3(c) for each Transaction (including the initial Transaction), the related Eligible Asset shall be transferred to Purchaser against the transfer of the Purchase Price therefor on the Purchase Date specified in the related Confirmation by wire transfer of immediately available funds as set forth in such Confirmation or other written instructions from the applicable Seller to Purchaser, subject to Article 3(c)(ii)(A) below. Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction covered thereby. In the event of any conflict between the terms of such Confirmation and the terms of this Agreement, such Confirmation shall prevail.

(b) Conditions Precedent to Initial Transaction. Purchaser’s agreement to enter into the initial Transaction after the date hereof (and, with respect to Article 3(b)(iv), the initial Transaction entered into by Purchaser with any Seller with respect to a Foreign Purchased Asset and any Applicable Currency) is subject to the satisfaction (or waiver by Purchaser in writing), immediately prior to or concurrently with the making of such Transaction, of the following conditions precedent to the satisfaction of Purchaser in its sole and absolute discretion:

(i) Delivery of Documents. The following documents, shall have been delivered to Purchaser:

(A) this Agreement, duly completed and executed by each of the parties hereto;

(B) the Fee Letter, duly completed and executed by each of the parties thereto;

(C) the Custodial Agreement, duly completed and executed by each of the parties thereto;

(D) the Account Control Agreements, each duly completed and executed by each of the parties thereto;

(E) the Guaranty, duly completed and executed by each of the parties thereto;

(F) the Servicing Agreement, duly completed and executed by each of the parties thereto;

(G) [reserved];

(H) [reserved];

(I) [reserved];

(J) any and all consents and waivers applicable to each Seller or to the Purchased Assets generally;

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(K) a power of attorney from US Seller substantially in the form of Exhibit IV-A hereto, a power of attorney from UK Seller substantially in the form of Exhibit IV-B hereto, a power of attorney from EUR Seller substantially in the form of Exhibit IV-C hereto, in each case, duly completed and executed, provided that Purchaser shall not utilize any such power of attorney unless a monetary Default, material non-monetary Default or an Event of Default has occurred and is continuing;

(L) a UCC financing statement for filing in the UCC Filing Jurisdiction of each Seller, naming the applicable Seller as “Debtor” and Purchaser as “Secured Party” and describing as “Collateral” “All assets of Seller, whether now owned or existing or hereafter acquired or arising and wheresoever located, and all proceeds and all products thereof” (the “Seller Financing Statement”);

(M) opinions of outside counsel to the Seller Parties in form and substance reasonably acceptable to Purchaser (including, but not limited to, those relating to corporate matters, enforceability, perfection under the UCC and, with respect to any Foreign Purchased Asset and consistent with market customs, the equivalent Requirements of Law under the relevant Non-U.S. jurisdiction (if applicable), applicability of the Investment Company Act of 1940, security interests and Bankruptcy Code safe harbors (including with respect to inclusion of Mezzanine Loans as Purchased Assets)); and

(N) for each Seller Party, a good standing certificate dated within thirty (30) calendar days prior to the Closing Date, certified true, correct and complete copies of organizational documents and certified true, correct and complete copies of resolutions (or similar authority documents) with respect to the execution, delivery and performance of the Transaction Documents and each other document to be delivered by such party from time to time in connection herewith.

(ii) Reimbursement of Costs and Expenses. Sellers shall have paid, or reimbursed Purchaser for, all actual out-of-pocket costs and expenses, including but not limited to diligence expenses and the reasonable legal fees of outside counsel, incurred by Purchaser in connection with the development, preparation and execution of the Transaction Documents and any other documents prepared in connection herewith or therewith.

(iii) Know Your Customer and Sanctions Diligence. Purchaser shall have completed its “Know Your Customer” and Sanctions diligence with respect to each Seller Party and the results of such diligence are acceptable to Purchaser in its sole and absolute discretion.

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(iv) Foreign Purchased Assets. For any Seller, with respect to the initial Transaction entered into by Purchaser with such Seller with respect to a Foreign Purchased Asset and any Applicable Currency, the following shall have been delivered to Purchaser:

(A) all such documents and documentation as Purchaser shall reasonably require for such Seller to grant and perfect in favor of Purchaser in the relevant non-U.S. jurisdiction a first priority security interest in such Foreign Purchased Asset and any future Foreign Purchased Assets denominated in the same Applicable Currency;

(B) a power of attorney from such Seller in form and substance satisfactory to Purchaser, which power of attorney shall be duly completed and executed in accordance with customary practices in the applicable non-U.S. jurisdiction in which the related Mortgaged Property securing such Foreign Purchased Asset is located, provided that Purchaser shall not utilize such power of attorney unless an Event of Default has occurred and is continuing;

(C) an opinion of outside counsel to such Seller in form and substance reasonably acceptable to Purchaser with respect to the perfection of Purchaser’s security interest in the relevant Non-U.S. jurisdiction and consistent with market customs and such other matters as Purchaser may reasonably request;

(D) evidence of the establishment by such Seller of the related Foreign Purchased Asset Collection Account in the Applicable Currency;

(E) an Account Control Agreement, duly completed and executed by each of the parties thereto, with respect to such Foreign Purchased Asset Collection Account; and

(F) all such other and further documents and documentation as Purchaser in its discretion shall reasonably require (including, without limitation, a Foreign Assignment Agreement and such other closing documentation necessary to transfer such Foreign Purchased Asset to Purchaser).

(c) Conditions Precedent to All Transactions. Purchaser’s agreement to enter into each Transaction (including the initial Transaction) is subject to the satisfaction (or waiver by Purchaser in writing) of the following further conditions precedent to the satisfaction of Purchaser:

(i) Foreign Assignment Agreement. With respect to each Foreign Purchased Asset subject to such Transaction, the applicable Seller shall have delivered to Purchaser a Foreign Assignment Agreement in such form as Purchaser may require in order to give effect to Article 7(a) in the relevant jurisdiction(s) applicable to the Foreign Purchased Asset.

(ii) Maximum Facility Purchase Price. The sum of (A) the aggregate unpaid Purchase Price in U.S. Dollars (with respect to any Foreign Purchased Asset, based on the Purchase Date Spot Rate with respect to the Applicable Currency) for all prior outstanding Transactions and (B) the requested Purchase Price in U.S. Dollars (with respect to any Foreign Purchased Asset, based on the Purchase Date Spot Rate with respect to the Applicable Currency) for the pending Transaction shall not exceed an amount equal to the Maximum Facility Purchase Price.

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(iii) Confirmation. The applicable Seller shall have:

(A) no less than ten (10) Business Days (it being acknowledged that Purchaser may agree to a shorter period on a case-by-case basis) prior to the requested Purchase Date, given written notice to Purchaser of the proposed Transaction;

(B) within a time prior to the proposed Purchase Date acceptable to Purchaser given notice to Purchaser of the proposed Transaction by delivering to Purchaser a completed draft confirmation substantially in the form of Exhibit II hereto (a “Confirmation”). The Confirmation shall be signed on or prior to the Purchase Date by a Responsible Officer of the applicable Seller; provided, however, that if, in any such Confirmation or other written instruction of such Seller directing Purchaser to transfer Purchase Price, such Seller requests that funds be sent to an account or recipient other than pursuant to the wire instructions of such Seller set forth on Annex I hereto, such Confirmation or other written instruction must be signed by two (2) Responsible Officers of such Seller; provided, further, that Purchaser shall not have any duty to confirm that any such Confirmation has been signed by the requisite number of Responsible Officers of such Seller and shall not be liable to such Seller if it inadvertently acts on a Confirmation that has not been signed by the requisite number of Responsible Officers of such Seller or at all;

(C) with respect to each Eligible Asset subject to the pending Transaction, delivered to Purchaser the documents required pursuant to Exhibit VII hereto in accordance with the time frames set forth therein; and

(D) concurrently with the purchase of any Purchased Asset, paid to Purchaser the Pre-Purchase Legal/Due Diligence Review Fee with respect to each such Purchased Asset.

(iv) Delivery to Custodian. The applicable Seller shall have delivered to Custodian, with respect to each Eligible Asset other than a Wet Purchased Asset or any other Purchased Asset for which such Seller has delivered a Bailee Letter in accordance with the terms of the Custodial Agreement, the related Purchased Asset File, in accordance with the procedures and time frames set forth in the Custodial Agreement.

(v) Bailee Trust Receipt. With respect to any Wet Purchased Asset or any other Purchased Asset for which the applicable Seller has delivered a Bailee Letter in accordance with the terms of the Custodial Agreement, the related Bailee shall have issued to Purchaser a Bailee Trust Receipt.

(vi) Due Diligence Review. Purchaser shall have completed its due diligence investigation of the Eligible Assets subject to the pending Transaction and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Eligible Assets and, in accordance with Article 28, each Seller Party, as Purchaser in its sole and absolute discretion deems appropriate to review and such review

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shall be satisfactory to Purchaser in its sole and absolute discretion (the “Pre-Purchase Due Diligence”) and has determined, in its sole and absolute discretion, to purchase any or all of the Eligible Assets proposed to be sold to Purchaser by any Seller. Purchaser shall inform the applicable Seller of its determination with respect to any such proposed Transaction solely in accordance with Exhibit VII hereto.

(vii) Countersigned Confirmation. Purchaser shall have delivered to the applicable Seller a countersigned copy of the related Confirmation described in clause (ii)(A) above.

(viii) No Default. No Default or Event of Default shall have occurred and be continuing;

(ix) No Material Adverse Effect. No event shall have occurred and be continuing which has had a Material Adverse Effect.

(x) Waiver of Exceptions. Purchaser shall have waived in writing all exceptions in the related Requested Exceptions Report, as evidenced by Purchaser’s execution of the Confirmation to which such Requested Exceptions Report is attached.

(xi) Representations and Warranties. The representations and warranties made by Sellers in Article 10 (other than with respect to MTM Representations relating to Purchased Assets not subject to the proposed Transaction and as disclosed in a Requested Exceptions Report approved by Purchaser in accordance with the terms hereof) shall be true, correct and complete on and as of the Purchase Date for the pending Transaction with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(xii) Servicing Agreement; Acknowledgement of Servicer. To the extent such Eligible Asset will be serviced pursuant to a new Servicing Agreement, such new Servicing Agreement, duly completed and executed by each of the parties thereto, shall have been delivered to Purchaser. Purchaser shall have received from Servicer a written acknowledgement that each Eligible Asset to be sold to Purchaser will be serviced in accordance with the applicable Servicing Agreement as of the related Purchase Date.

(xiii) No Margin Deficit Event. No Margin Deficit Event shall exist, either immediately prior to or after giving effect to the requested Transaction.

(xiv) Receipt of Trust Receipt. With respect to any Eligible Asset other than a Wet Purchased Asset or any other Purchased Asset for which the related Seller has delivered a Bailee Letter in accordance with the terms of the Custodial Agreement, Purchaser shall have received from Custodian on each Purchase Date a Trust Receipt accompanied by an Asset Schedule and Exception Report with respect to such Eligible Asset to be sold to Purchaser, dated the Purchase Date, duly completed and with exceptions acceptable to Purchaser in its sole discretion in respect of such Eligible Assets to be purchased hereunder on such Purchase Date.

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(xv) Seller Release Letter. Purchaser shall have received from the applicable Seller a Release Letter covering each Eligible Asset to be sold to Purchaser.

(xvi) Redirection Notice. Purchaser shall have received from the applicable Seller a copy of each related Redirection Letter(s) that such Seller shall send to the related Borrower(s) or servicers within one (1) Business Day following the closing of such Transaction in accordance with Article 29(e).

(xvii) No Change in Law. Purchaser shall not have determined in good faith that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Purchaser to enter into Transactions.

(xviii) Security Interest. The applicable Seller shall have taken such other action as Purchaser shall have reasonably requested in order to transfer the Eligible Assets being transferred to Purchaser pursuant to this Agreement and to perfect all security interests granted under this Agreement or any other Transaction Document in favor of Purchaser as secured party under the UCC, or with respect to any Foreign Purchased Asset, the equivalent Requirement of Law under the relevant non-U.S. jurisdiction (to the extent applicable), with respect to such Eligible Assets.

(xix) Availability Period. The related Purchase Date occurs during the Availability Period.

(xx) Know Your Customer and Sanctions Diligence. The applicable Seller shall have completed its “Know Your Customer” and Sanctions diligence with respect to the related Borrower, guarantor and related parties) and the results of such diligence are acceptable to Purchaser in its sole and absolute discretion. Purchaser shall have completed its “Know Your Customer” and Sanctions diligence with respect to the applicable Seller, Guarantor and related parties and the results of such diligence are acceptable to Purchaser in its sole and absolute discretion.

(xxi) True Sale. If such Purchased Asset is obtained by the applicable Seller from any Affiliate of such Seller, then such Seller shall deliver to Purchaser a true sale opinion from outside counsel in form and substance reasonably acceptable to Purchaser with respect to the transfer of such Purchased Asset to such Seller from such Affiliate.

(xxii) Further Assurances. Purchaser shall have received all such other and further documents, documentation and legal opinions (including, without limitation, opinions regarding the perfection of Purchaser’s security interests) consistent with market customs as Purchaser shall have reasonably required.

(xxiii) Payment of Funding Fee. Purchaser shall have received payment from the related Seller of the applicable Funding Fee then due in respect of such Purchased Asset.

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(d) Early Repurchase. The applicable Seller shall be entitled to terminate a Transaction on demand and repurchase the Purchased Asset subject to such Transaction on any Business Day prior to the Repurchase Date (an “Early Repurchase Date”); provided, however, that:

(i) no later than three (3) Business Days prior to such Early Repurchase Date, such Seller notifies Purchaser in writing of its intent to terminate such Transaction and repurchase such Purchased Asset, setting forth the Early Repurchase Date and identifying with particularity the Purchased Asset to be repurchased on such Early Repurchase Date;

(ii) no Default or Event of Default shall have occurred and be continuing both as of the date notice is delivered pursuant to Article 3(d)(i) above and as of the applicable Early Repurchase Date, unless, in the case of a Default for which an Event of Default has not yet occurred, such Default is cured by such repurchase;

(iii) on such Early Repurchase Date, such Seller pays (in the Applicable Currency of such Purchased Asset) to Purchaser an amount equal to the Repurchase Price (including, but not limited to, any applicable Breakage Costs and Exit Fees) for the applicable Purchased Asset and any other amounts payable under this Agreement against transfer to such Seller or its designated agent of such Purchased Asset; and

(iv) any Margin Deficit Event then existing is cured contemporaneously with such early repurchase (including, without limitation, by repurchasing the applicable Purchase Asset pursuant to this Article 3(d)).

(e) Repurchase on the Repurchase Date. On the Repurchase Date (including any Early Repurchase Date, so long as the conditions set forth in Article 3(d) are satisfied) for any Transaction, termination of the Transaction will be effected by transfer to the applicable Seller (or such Seller’s designee) of the Purchased Assets being repurchased along with any Income in respect thereof received by Purchaser (and not previously credited or transferred to, or applied to the obligations of, such Seller pursuant to Article 5) against the simultaneous transfer of the Repurchase Price (in the Applicable Currency of the related Purchased Asset) for such Purchased Asset to an account of Purchaser; provided that, Purchaser shall have no obligation to permit such Seller to repurchase individual Purchased Assets if an Event of Default shall have occurred and be continuing unless, so long as Purchaser has not enforced remedies hereunder, such Purchased Asset is repaid in full (with respect to any Mezzanine Loan, such repayment shall include the Mezzanine Loan and the related Mortgage Loan) by the Borrower thereunder and Purchaser receives for application in accordance with Article 5(f) an amount equal to the greater of (i) the Repurchase Price (in the Applicable Currency of the related Purchased Asset) of such Purchased Asset and (ii) one hundred percent (100%) of such Principal Payment. Promptly following such Repurchase Date for a Purchased Asset and satisfaction of the conditions in the preceding sentence, and so long as no Event of Default shall have occurred and be continuing (except as set forth in the immediately preceding sentence), Purchaser’s right, title and interest in such Purchased Asset and the related Collateral shall automatically terminate in accordance with Article 7(b). Subject to the foregoing, upon the payment in full of any Purchased Asset by the Borrower thereunder, the Repurchase Date of such Purchased Asset shall be deemed to have occurred on the date on which the Repurchase Price (in the Applicable Currency of the related Purchased Asset) therefor and any additional amounts required hereunder, are received by Purchaser for application in accordance with Article 5.

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(f) Availability Period Extensions. (i) Provided that all of the extension conditions listed in clause (ii) below (collectively, the “Availability Period Extension Conditions”) shall have been satisfied, Purchaser may agree to extend the then-current Availability Period (each, a “Current Availability Period”) for a period, in each case, not to exceed one (1) year from the expiration date of the Current Availability Period (each, an “Availability Period Extension”); provided that, if Purchaser does not approve such extension in writing within fifteen (15) days after the date of such written request by a Seller, such extension shall be deemed disapproved. Purchaser may approve or disapprove any request for an Availability Period Extension in its sole and absolute discretion.

(ii) For purposes of this Article 3(f), the Availability Period Extension Conditions shall be deemed to have been satisfied if:

(A) the applicable Seller shall have delivered to Purchaser written notice of its request to extend the Current Availability Period at least thirty (30) days, but not more than one hundred twenty (120) days, prior to the expiration of the Current Availability Period and Purchaser shall have approved such extension in writing;

(B) no Material Adverse Effect, Margin Deficit Event, Default or Event of Default shall have occurred and be continuing as of the expiration of the Current Availability Period; and

(C) excluding any MTM Representations and as disclosed in a Requested Exceptions Report approved by Purchaser in accordance with the terms hereof, all representations and warranties made by any Seller Party in the Transaction Documents, shall be true, correct, complete and accurate as of the date of delivery of the notice specified in clause (A) above to Purchaser.

(g) Post-Availability Period Extensions. (i) In the event that Purchaser does not agree to extend the Current Availability Period after a Seller’s request in accordance with Article 3(f), provided that all of the extension conditions listed in clause (ii) below (collectively, the “Post-Availability Period Extension Conditions”) shall have been satisfied, the then-current Termination Date (each, a “Current Termination Date”) shall be extended by one (1) year from the Current Termination Date. Notwithstanding anything to the contrary herein, in no event shall the Termination Date be extended more than four (4) times pursuant to this Article 3(g).

(ii) For purposes of this Article 3(g), the Post-Availability Period Extension Conditions shall be deemed to have been satisfied if:

(A) the applicable Seller shall have delivered to Purchaser written notice of its request to extend the Current Termination Date at least fifteen (15) days prior to the Current Termination Date;

(B) no Margin Deficit Event or Event of Default shall have occurred and be continuing as of the Current Termination Date; and

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(C) excluding any MTM Representations and as disclosed in a Requested Exceptions Report approved by Purchaser in accordance with the terms hereof, all representations and warranties made by any Seller Party in the Transaction Documents, shall be true, correct, complete and accurate as of the date of delivery of the notice specified in clause (A) above to Purchaser.

(h) Future Advances. (i) In connection with the making of a Future Advance under a Future Advance Purchased Asset, a Seller may request an increase of the Purchase Price of such Future Advance Purchased Asset (in the Applicable Currency of such Future Advance Purchased Asset). Purchaser may approve or disapprove an increase in the Purchase Price with respect to any Future Advance that is not an Approved Future Advance in Purchaser’s sole and absolute discretion and subject to the payment of a Funding Fee on the amount of such increase of the Purchase Price.

(ii) With respect to any Approved Future Advance and any other Future Advance with respect to which Purchaser shall have approved a Purchase Price increase in accordance with clause (i) above, Purchaser’s funding of such increase shall be subject to the satisfaction of the following conditions:

(A) at least ten (10) Business Days prior to the requested Purchase Price increase date, the applicable Seller shall have requested such increase in writing and delivered to Purchaser, which may be in the form of a draft amended and restated Confirmation for the applicable Transaction described in subclause (D) below

(1) copies of all documentation submitted by Borrower in connection with the applicable Future Advance, and

(2) evidence that all conditions precedent to such Future Advance under the related Purchased Asset Documents have been satisfied or will be satisfied as of the date of the related funding (or, if any conditions will not be satisfied, have been specifically identified to Purchaser in writing in the related Confirmation and waived by Purchaser in writing);

(B) the amount of the requested Purchase Price increase is at least $250,000 (or, with respect to any Foreign Purchased Asset, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Asset as of the date of determination);

(C) Purchaser shall have determined to its reasonable satisfaction that (1) there is no monetary or material non-monetary default then existing under such Purchased Asset, (2) all conditions precedent to such Future Advance under the related Purchased Asset Documents have been satisfied (or waived by the related Seller with the written approval of Purchaser) and (3) any additional conditions imposed by Purchaser with respect to such Future Advance, as specified in the related Confirmation on the Purchase Date with respect to Approved Future Advances or on the date of approval thereof with respect to any Future Advance approved by Purchaser after the Purchase Date in accordance with the terms hereof, have been duly satisfied;

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(D) delivery by the applicable Seller to Purchaser of an amended and restated Confirmation for the applicable Transaction which reflects the increase in the Purchase Price signed by a Responsible Officer of such Seller (subject to the provisos to Article 3(c)(ii)(A) hereof; provided, however, that Purchaser shall not have any duty to confirm that any such Confirmation has been signed by the requisite number of Responsible Officers of such Seller and shall not be liable to such Seller if it inadvertently acts on a Confirmation that has not been signed by the requisite number of Responsible Officers of such Seller or at all);

(E) immediately after giving effect to the requested Purchase Price increase, the outstanding Purchase Price of such Purchased Asset shall not exceed the updated Maximum Purchase Price of such Purchased Asset set forth on the related amended and restated Confirmation;

(F) immediately after giving effect to the requested Purchase Price increase, the outstanding Purchase Price in U.S. Dollars (with respect to any Foreign Purchased Asset, based on the Purchase Date Spot Rate with respect to the Applicable Currency) of all Purchased Assets shall not exceed the Maximum Facility Purchase Price;

(G) no Default or Event of Default shall have occurred and be continuing as of the related Purchase Price increase date;

(H) no Margin Deficit Event shall exist immediately prior to or after giving effect to the requested Purchase Price increase;

(I) excluding any MTM Representations and as disclosed in a Requested Exceptions Report approved by Purchaser in accordance with the terms hereof, all representations and warranties made by any Seller Party in the Transaction Documents shall be true, correct and complete on and as of the related Purchase Price increase date with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(J) on or prior to the related Purchase Price increase date, Purchaser shall have received a written certification by the related Seller stating that all conditions precedent to the funding of such Future Advance under the related Purchased Asset Documents have been satisfied (which may be made via a representation in the amended and restated Confirmation for the applicable Transaction described in subclause (D) above);

(K) the applicable Seller shall have delivered to Purchaser such other information and documentation (including, without limitation, either an updated title policy or an appropriate date-down endorsement) as Purchaser may reasonably request; and

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(L) Purchaser shall have received payment from the applicable Seller of any applicable Funding Fee then due in respect of such Purchase Price increase.

(iii) Upon the satisfaction (or waiver by Purchaser in writing) of all conditions set forth in Article 3(h)(ii), Purchaser shall transfer the amount of the Purchase Price increase (in the Applicable Currency of such Future Advance Purchased Asset) evidenced by such amended and restated Confirmation to an account of the related Seller or, if such increase is being funded on the same day as the Future Advance is being made to the related Borrower, directly to the Borrower, the Servicer or any title company, settlement agent or other Person, as directed by such Seller in such amended and restated Confirmation or otherwise in writing agreed to by Purchaser and the applicable Seller.

(i) Voluntary Purchase Price Reduction; Margin Excess. (i) any Seller may from time to time, upon one (1) Business Day’s prior written notice to Purchaser, transfer cash (in the Applicable Currency for the applicable Purchased Asset(s)) to Purchaser to be applied in reduction of the outstanding Purchase Price with respect to one or more Purchased Assets as such Seller may direct. The related Seller shall pay any applicable Breakage Costs in connection with any such reduction of the outstanding Purchase Price.

(ii) From time to time prior to the Cash Flow Trigger Date, to the extent that any Margin Excess exists with respect to one or more Purchased Assets, the related Seller may from time to time request that Purchaser transfer cash (in the Applicable Currency of the related Purchased Asset) to such Seller (resulting in a corresponding increase in the outstanding Purchase Price of the applicable Purchased Asset(s)) in an amount not to exceed such Margin Excess, which amount shall be transferred by Purchaser to such Seller within one (1) Business Day following such Seller’s written request, subject to the satisfaction of the following conditions:

(A) the amount of the requested Purchase Price increase is at least $250,000 (or, with respect to any Foreign Purchased Asset, the then-current equivalent of such amount based on the Spot Rate with respect to the Applicable Currency of such Foreign Purchased Asset as of the date of determination);

(B) if requested by Purchaser, delivery by the applicable Seller to Purchaser of an amended and restated Confirmation for the applicable Transaction which reflects the increase in the Purchase Price signed by a Responsible Officer of such Seller (subject to the provisos to Article 3(c)(ii)(A) hereof; provided, however, that Purchaser shall not have any duty to confirm that any such Confirmation has been signed by the requisite number of Responsible Officers of such Seller and shall not be liable to such Seller if it inadvertently acts on a Confirmation that has not been signed by the requisite number of Responsible Officers of such Seller or at all);

(C) immediately after giving effect to the requested Purchase Price increase, the outstanding Purchase Price of such Purchased Asset shall not exceed the Maximum Purchase Price of such Purchased Asset;

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(D) immediately after giving effect to the requested Purchase Price increase, the outstanding Purchase Price in U.S. Dollars (with respect to any Foreign Purchased Asset, based on the Purchase Date Spot Rate with respect to the Applicable Currency) of all Purchased Assets shall not exceed the Maximum Facility Purchase Price;

(E) no Default or Event of Default shall have occurred and be continuing as of the related Purchase Price increase date;

(F) no Margin Deficit Event shall exist immediately prior to or after giving effect to the requested Purchase Price increase.

ARTICLE 4

MARGIN MAINTENANCE

(a) Purchaser may, at its option in its sole and absolute discretion, re-determine the Market Value for any Purchased Asset in accordance with definition of Market Value. If there exists a Margin Deficit Event with respect to any Purchased Asset, Purchaser may, by notice to Sellers substantially in the form of Exhibit VIII hereto (a “Margin Call”), require Sellers to (i) make a cash payment (in the Applicable Currency of the related Purchased Asset) and/or apply Margin Excess from other Purchased Assets (in the Applicable Currency of the related Purchased Asset), in each case in reduction of the outstanding Purchase Price of such Purchased Asset so that after giving effect to such payment or applications, no Margin Deficit shall exist or be deemed to exist with respect to such Purchased Asset or (ii) repurchase such Purchased Asset, in either case within the time period set forth in clause (b) below.

(b) If a Margin Call is given by Purchaser under Article 4(a) on any Business Day at or prior to 12:00 noon (New York City time or, with respect to a Foreign Purchased Asset, London time), the applicable Seller shall cure the related Margin Deficit as provided in Article 4(a) by no later than 5:00 p.m. (New York City time or, with respect to a Foreign Purchased Asset, London time) on the next succeeding Business Day. For the avoidance of doubt, if a Margin Call is given by Purchaser under Article 4(a) on any Business Day after 12:00 noon (New York City time or, with respect to a Foreign Purchased Asset, London time), such Margin Call shall be considered given prior to such time on the immediately following Business Day.

(c) The failure or delay by Purchaser, on any one or more occasions, to exercise its rights under this Article 4 shall not change or alter the terms and conditions or limit or waive the right of Purchaser to do so at a later date or in any way create additional rights for any Seller.

(d) For the avoidance of doubt, with respect to this Article 4, any such payments and/or reductions shall be made by the applicable Seller in the Applicable Currency of the related Purchased Asset with respect to which such Margin Deficit exists.

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ARTICLE 5

PAYMENTS; COLLECTION ACCOUNTS

(a) Unless otherwise provided herein or mutually agreed in writing, all transfers of funds to be made by a Seller hereunder shall be made in the Applicable Currency with respect to each related Purchased Asset, in immediately available funds, without deduction, set-off or counterclaim.

(b) All payments required to be made directly to Purchaser shall be made in accordance with the wiring instructions set forth below (or such other wire instructions provided by Purchaser to the applicable Seller in writing), not later than 2:00 p.m. (New York City time)(or such other time set forth herein with respect to such payment), on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the next succeeding Business Day).

(i) In connection with any such payments to be made in U.S. Dollars:

Bank Name: ABA Number: Account Number: Account Name: Reference: Attention: Barclays Bank Plc, New York 026-002-574 050-012-266 BBPLC CRE Warehouse Settlements Account BXMT Repo Warehouse Whole Loan Operations

(ii) In connection with any such payments to be made in Euros:

Agent Bank: Account Name: BIC: Account Number: Barclays Bank PLC Barclays Bank PLC BARCGB22 203253 44295577

(iii) In connection with any such payments to be made in Pounds Sterling:

Agent Bank: Account Name: BIC: Account Number: Barclays Bank PLC Barclays Bank PLC BARCGB22 200000 50654140

(iv) In connection with any such payments to be made in a currency other than U.S. Dollars, Euros or Pounds Sterling, in accordance with such wiring instructions provided by Purchaser to Seller in writing.

(c) Concurrently with the execution and delivery of this Agreement, Sellers shall establish, or in the case of the US Collection Account US Seller has established as of April 4, 2018, (i) a segregated interest bearing deposit account denominated in U.S. Dollars (the “US Collection Account”) in the name of US Seller for the benefit of Purchaser at Account Bank, (ii) a segregated interest bearing deposit account denominated in Pounds Sterling (the “UK

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Collection Account”) in the name of UK Seller for the benefit of Purchaser at Account Bank and (iii) a segregated interest bearing deposit account denominated in Euros (the “EUR Collection Account” and, together with the US Collection Account and the UK Collection Account, the “Collection Accounts”) in the name of EUR Seller for the benefit of Purchaser at Account Bank. Each Collection Account shall be subject to the Account Control Agreement in favor of Purchaser.

(d) Each Seller shall cause Servicer to promptly remit, and in any event no later than two (2) Business Days after receipt thereof, all Income in respect of each Purchased Assets directly into the applicable Collection Account maintained by such Seller. In furtherance of the foregoing, Sellers shall cause each Servicer to execute and deliver a Redirection Letter in accordance with Article 29(e). If any Seller Party or any Affiliate thereof shall receive any Income with respect to a Purchased Asset other than by remittance from the Collection Account in accordance with the following sentence, such party shall (and the applicable Seller shall cause such party to) promptly (and in any case within one (1) Business Day after receipt thereof) remit such amounts directly into the applicable Collection Account. Amounts in the Collection Accounts shall be remitted by Account Bank in accordance with the provisions of Articles 5(e) and 5(f).

(e) Upon the written request of a Seller to Servicer, so long as no Event of Default shall have occurred and be continuing, Account Bank shall remit all amounts in each Collection Account on each Business Day to, or at the direction of, the related Seller. Notwithstanding the foregoing, with respect to each Purchased Asset, the related Seller shall be required to pay (and shall not permit Account Bank or Servicer to remit to such Seller or any other Person (other than Purchaser), and shall cause Servicer to promptly (but in no event sooner than one (1) Business Day after receipt of such Principal Payment by Servicer) remit) to Purchaser for application in reduction of the outstanding Purchase Price of such Purchased Asset an amount equal to the product of (x) any Principal Payment on account of such Purchased Asset multiplied by (y) the Purchase Price Percentage for such Purchased Asset as of the date of the receipt of such Principal Payment by Servicer.

(f) Upon receipt of notice from Purchaser that an Event of Default shall have occurred and be continuing, and so long as Purchaser has not withdrawn such notice, Account Bank shall cease remitting funds to, or at the direction of, any Seller pursuant to Article 5(e) and shall instead remit, on each Business Day beginning on the Business Day after receipt of such notice from Purchaser, all amounts on deposit in the respective Collection Accounts as of the prior Business Day to Purchaser for application to the Repurchase Obligations (regardless of the applicable Seller) in such order of priority as Purchaser shall determine in its sole and absolute discretion; provided, that if Purchaser has not exercised the remedies described in Article 14(b)(ii)(D)(2) with respect to any or all Purchased Assets, then the excess, if any, of such amounts over the amount of the Repurchase Obligations then outstanding under the Transaction Documents shall be remitted to Sellers. For the avoidance of doubt, Purchaser shall be entitled to convert monies in the Collection Accounts from one Applicable Currency to another Applicable Currency (or direct any Account Bank to do so) in connection with such application pursuant to this Article 5(f) to the extent that any such Repurchase Obligation is in an Applicable Currency other than the Applicable Currency of the monies in the Collection Accounts.

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(g) On each Remittance Date, each Seller shall pay to Purchaser in the Applicable Currency for each Transaction all accrued and unpaid Purchase Price Differential as of such Remittance Date.

(h) [Reserved].

(i) Any amounts paid toward the Repurchase Price for any Purchased Asset shall be applied by Purchaser to any items constituting the Repurchase Price thereof in such order of priority as Purchaser shall determine in its sole and absolute discretion.

(j) Beginning on the first day of the third (3rd) year of the Post-Availability Period (the “Cash Flow Trigger Date”), on each Remittance Date, all Income from the Purchased Assets during the then-current Pricing Rate Period remaining after payment of (i) all fees and other amounts then due and payable to (x) Custodian pursuant to the Custodial Agreement, (y) Account Bank pursuant to the applicable Account Control Agreement (if such amount is not deducted by Account Bank prior to the remittance of such Income from the applicable Collection Account) and (z) Servicer pursuant to the Servicing Agreement (if such amount is not deducted by Servicer prior to the remittance of such Income from the applicable Collection Account), and (ii) the accrued and unpaid Purchase Price Differential and other amounts that are due and owing to Purchaser, shall be remitted by the applicable Seller to Purchaser to be applied (i) first, to any other amounts due to Purchaser under the Transaction Documents in the particular Applicable Currency, (ii) second, to the outstanding Purchase Price for all remaining Purchased Assets in the particular Applicable Currency on a pro rata basis based on outstanding Purchase Price of such Purchased Assets, (iii) third, after conversion at the then prevailing Spot Rate to any other Applicable Currency in which amounts are due to Purchaser, to any other amounts due to Purchaser under the Transaction Documents in such other Applicable Currency, and (iv) fourth, after conversion at the then prevailing Spot Rate to any Applicable Currency with respect to any other remaining Purchased Assets, to the outstanding Purchase Price for all remaining Purchased Assets with respect to such Applicable Currency on a pro rata basis based on the outstanding Purchase Price of such Purchased Assets, subject, in each case, to such Seller’s right, upon request to Purchaser, to retain such excess Income in an amount, if any, required by applicable law to be distributed in order for Guarantor to maintain its status as a REIT, provided that Guarantor will be required to exhaust all other sources of cash flow and income, whether in the form of equity or debt, then available for distribution prior to retaining such excess Income. Guarantor shall deliver to Purchaser a certificate containing all information and calculations reasonably necessary to support any request of a Seller to retain such Income in accordance with the foregoing sentence.

ARTICLE 6

REQUIREMENTS OF LAW; ALTERNATIVE RATE

(a) Requirements of Law. (i) Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for Purchaser (A) to enter into Transactions as contemplated by the Transaction Documents, then any commitment of Purchaser hereunder to enter into any Transaction shall forthwith be canceled, (B) to maintain or continue any Transaction and

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Purchaser does not have any means of complying with Requirements of Law other than to terminate such Transaction after exercising commercially reasonable efforts to comply with such Requirements of Law without having to terminate such Transaction (including, if applicable, by converting the Transaction to a Prime Rate Transaction pursuant to the immediately following clause (C) or to an Alternative Rate Transaction pursuant to Article 6(b)), then a Repurchase Date for such Transaction shall occur on the later to occur of (x) the date that is ten (10) Business Days after delivery of written notice thereof from Purchaser to Sellers and (y) the next Remittance Date, or on such earlier date as may be required by law, or (C) to accrue Purchase Price Differential based on the Applicable Index, then each Transaction then outstanding shall be converted automatically to a Prime Rate Transaction on the next Pricing Rate Determination Date or within such earlier period as may be required by law. If any such conversion of a Transaction occurs on a day that is not the last day of the then current Pricing Rate Period with respect to such Transaction, the related Seller shall pay to Purchaser any applicable Breakage Costs. In exercising its rights under this Article 6(a)(i), Purchaser shall exercise its rights and remedies in a manner which is consistent with other similar agreements with other similarly situated counterparties covered by the same group within Purchaser. In addition, Purchaser will provide Sellers with notice promptly after any such determination under this Article 6(a)(i) is made.

(ii) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by any Governmental Authority or compliance by Purchaser with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority having jurisdiction over Purchaser made subsequent to the date hereof:

(A) shall subject Purchaser to any tax with respect to the Transaction Documents, any Purchased Asset or any Transaction (other than (x) Indemnified Taxes and (y) Excluded Taxes);

(B) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of Purchaser that is not otherwise included in the determination of the Applicable Index hereunder; or

(C) shall impose on Purchaser any other condition (excluding, for the avoidance of doubt, any tax);

and the result of any of the foregoing is to increase the cost to Purchaser, by an amount that Purchaser deems, in the exercise of its reasonable business judgment, to be material, of entering into, continuing or maintaining Transactions or to reduce in any material respect any amount receivable under the Transaction Documents in respect thereof; then, in any such case, the related Seller shall promptly after receipt of written notice thereof from Purchaser pay Purchaser any additional amounts necessary to compensate Purchaser for such increased cost or reduced amount receivable in the Applicable Currency of such increased cost or reduced amount. In exercising its rights under this Article 6(a)(ii), Purchaser shall exercise its rights and remedies in a manner which is consistent with

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other similar agreements with other similarly situated counterparties covered by the same group within Purchaser. In addition, Purchaser will provide Sellers with notice as soon as practical of any demand for any additional amounts payable by Sellers under this Article 6(a)(ii). Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Purchaser to Sellers and shall be conclusive evidence of such additional amounts absent manifest error. This covenant shall survive the termination of this Agreement and the repurchase by Sellers of any or all of the Purchased Assets.

(iii) If Purchaser shall have reasonably determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Purchaser or any corporation controlling Purchaser with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof has, or will have, the effect of reducing the rate of return on Purchaser’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Purchaser or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Purchaser’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by Purchaser in the exercise of its reasonable business judgment, to be material, then from time to time, after submission by Purchaser to Sellers of a written request therefor, Sellers shall pay to Purchaser such additional amount or amounts as will compensate Purchaser for such reduction. In exercising its rights under this Article 6(a)(iii), Purchaser shall exercise its rights and remedies in a manner which is consistent with other similar agreements with other similarly situated counterparties covered by the same group within Purchaser. In addition, Purchaser will provide Sellers with notice as soon as practical of any demand for any additional amounts payable by Sellers under this Article 6(a)(iii). Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Purchaser to Sellers and shall be conclusive evidence of such additional amounts absent manifest error. With respect to any amount payable by Purchaser under this Article 6(a)(iii), this covenant shall survive for a period of twelve (12) months from the date of the incurrence of such increased costs or reduced amount receivable and Sellers shall have no further obligation hereunder with respect to such increased costs or reduced amount.

(b) Alternative Rate. If on or prior to the Pricing Rate Determination Date for any Pricing Rate Period with respect to any Transaction, Purchaser shall have determined in the exercise of its sole and absolute business judgment (which determination shall be conclusive and binding upon Sellers absent manifest error) that (i) by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Applicable Index for such Pricing Rate Period, (ii) the Applicable Index is likely to, or has, become unavailable or become an inappropriate index for the calculation of floating rates on loans, (iii) the Applicable Index determined or to be determined for such Pricing Rate Period will not adequately and fairly reflect the cost to Purchaser (as determined and certified by Purchaser) of making or maintaining Transactions during such Pricing Rate Period or (iv) the Applicable Index is no longer the industry standard floating rate index, Purchaser shall give notice thereof to Sellers as soon as practicable thereafter. Such notice, if given, shall set forth the affected

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Transactions, the floating rate index selected by Purchaser that Purchaser intends to use as an alternative to the Applicable Index for Sellers and similarly situated counterparties (the “Alternative Rate”). If such notice is given, each affected Transaction shall be converted automatically to an Alternative Rate Transaction with its Pricing Rate determined with reference to the Alternative Rate set forth in such notice.

ARTICLE 7

SECURITY INTEREST

(a) Purchaser and Sellers intend that the Transactions hereunder be sales to Purchaser of the Purchased Assets and not loans from Purchaser to the applicable Seller secured by the Purchased Assets (other than for U.S. federal, state and local income and franchise tax purposes more fully described in Article 23(g)). However, in order to preserve Purchaser’s rights under the Transaction Documents, in the event that, other than for such tax purposes, a court or other forum re-characterizes the Transactions hereunder as other than sales, and as security for the performance by each Seller of all of such Seller’s obligations to Purchaser under the Transaction Documents and the Transactions entered into hereunder, or in the event that a transfer of a Purchased Asset is otherwise ineffective to effect an outright transfer of such Purchased Asset to Purchaser, each Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Collateral, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, to Purchaser to secure the payment of the Repurchase Price on all Transactions to which it is a party and all other amounts owing by it to Purchaser hereunder, including, without limitation, amounts owing pursuant to Article 27, and under the other Transaction Documents (collectively, the “Repurchase Obligations”). Each Seller agrees to mark its books and records to evidence the interests granted to Purchaser hereunder. For purposes of this Agreement, “Collateral” shall mean:

(i) the Collection Accounts and all monies from time to time on deposit in the Collection Accounts and any and all replacements, substitutions, distributions on, income relating to or proceeds of any and all of the foregoing; and

(ii) the Purchased Items.

(b) Purchaser’s security interest in the Collateral shall terminate only upon satisfaction of the Repurchase Obligations (other than obligations under the Transaction Documents (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of this Agreement or such other Transaction Document, as the case may be), provided that, so long as no Event of Default shall have occurred and be continuing (other than in connection with a repayment of a Purchased Asset by the Borrower thereunder and subject to the conditions set forth in Article 3(e)), Purchaser’s security interest with respect to any Purchased Asset shall terminate automatically effective upon the repurchase thereof in accordance with the terms of this Agreement and receipt by Purchaser of the Repurchase Price therefor. Upon such satisfaction and, in the case of the clause (i) below, upon request by the applicable Seller, Purchaser shall, at such Seller’s sole expense, (i) deliver to such Seller such UCC termination statements (and, with respect to Foreign Purchased Assets, the equivalent under the applicable Requirements of Law in the relevant non-U.S. jurisdiction, if

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applicable) and other release documents as may be commercially reasonable and (ii) return (or authorize the return by Custodian in accordance with the Custodial Agreement, as applicable) the Purchased Assets to the applicable Seller and reconvey the Purchased Items to such Seller and release its security interest in the Collateral, such release to be effective automatically without further action by any party. For purposes of the grant of the security interest pursuant to this Article 7, this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “UCC”). Purchaser shall have all of the rights and may exercise all of the remedies of a secured creditor under the UCC and the other laws of the State of New York. In furtherance of the foregoing, (i) Purchaser, at the applicable Seller’s sole cost and expense, as applicable, shall cause to be filed in such locations as may be reasonably necessary to perfect and maintain perfection and priority of the security interest granted hereby, UCC financing statements and continuation statements (and, with respect to Foreign Purchased Assets, the equivalent under the applicable Requirements of Law in the relevant non-U.S. jurisdiction, if applicable) (collectively, the “Filings”), and shall forward copies of such Filings to such Seller upon the filing thereof, and (ii) such Seller shall from time to time take such further actions as may be reasonably requested by Purchaser to maintain and continue the perfection and priority of the security interest granted hereby and by any Foreign Assignment Agreement (including marking its records and files to evidence the interests granted to Purchaser hereunder). Notwithstanding the foregoing, the Repurchase Obligations shall be full recourse to such Seller.

(c) Each Seller acknowledges that it has no rights to service the Purchased Assets but only has rights granted to it pursuant to Article 29. Without limiting the generality of the foregoing and the grant of a security interest pursuant to Article 7(a), and in the event that any Seller is deemed by a court, other forum or otherwise to retain any residual Servicing Rights (notwithstanding that such Servicing Rights are Purchased Items hereunder), and for the avoidance of doubt, each Seller hereby acknowledges and agrees that the Servicing Rights constitute Collateral hereunder for all purposes. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Agreement and Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(x) of the Bankruptcy Code.

(d) Each Seller agrees, to the extent permitted by any Requirement of Law, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where any Purchased Asset or Mortgaged Property may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the Purchased Assets, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and each Seller, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws and any and all right to have any of the properties or assets constituting the Purchased Assets marshaled upon any such sale, and agrees that Purchaser or any court having jurisdiction to foreclose the security interests granted in this Agreement may sell the Purchased Assets as an entirety or in such parcels as Purchaser or such court may determine.

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ARTICLE 8

TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, upon satisfaction (or waiver by Purchaser in writing) of the conditions precedent in Article 3(b) and (c), each related Eligible Asset shall become a Purchased Asset hereunder and ownership of the related Purchased Assets and other Purchased Items shall be transferred to Purchaser or its designee (including the Custodian or, with respect to any Wet Purchased Asset or any other Purchased Asset for which the applicable Seller has delivered a Bailee Letter, the Bailee) against the simultaneous transfer of the Purchase Price for such Purchased Asset in immediately available funds (in the Applicable Currency of the relevant Purchased Asset) to an account of such Seller (or an account directed by such Seller) specified in the Confirmation relating to such Transaction.

(b) The applicable Seller shall deposit the Purchased Asset Files representing the Purchased Assets, or direct that the Purchased Asset Files be deposited directly (including, with respect to any Wet Purchased Asset or any other Purchased Asset for which such Seller has delivered a Bailee Letter in accordance with the terms of the Custodial Agreement, by the Bailee), with the Custodian in accordance with the Custodial Agreement. The Purchased Asset Files shall be maintained in accordance with the Custodial Agreement. If a Purchased Asset File is not delivered to Purchaser or its designee (including the Custodian), such Purchased Asset File shall be held in trust by the applicable Seller or its designee for the benefit of Purchaser as the owner thereof. The applicable Seller or its designee shall maintain a copy of the Purchased Asset File and the originals of the Purchased Asset File not delivered to Purchaser or its designee (including the Custodian). The possession of the Purchased Asset File by the applicable Seller or its designee is at the will of Purchaser for the sole purpose of servicing the related Purchased Asset, and such retention and possession by such Seller or its designee is in a custodial capacity only. The books and records (including, without limitation, any computer records or tapes) of the applicable Seller or its designee shall be marked appropriately to reflect clearly the sale, subject to the terms and conditions of this Agreement, of the related Purchased Asset to Purchaser. Each Seller or its designee (including the Custodian or, in the case of any Wet Purchased Asset or any other Purchased Asset for which the related Seller has delivered a Bailee Letter in accordance with the terms of the Custodial Agreement, the Bailee) shall release its custody of the Purchased Asset File only in accordance with a written request acknowledged in writing by Purchaser and otherwise in accordance with the Custodial Agreement (or, in the case of the Bailee with respect to any Wet Purchased Asset or any other Purchased Asset for which the related Seller has delivered a Bailee Letter in accordance with the terms of the Custodial Agreement, in accordance with the related Bailee Letter).

(c) From time to time, each Seller shall forward to the Custodian, with copy to Purchaser, additional original documents or additional documents evidencing any assumption, modification, consolidation or extension of a Purchased Asset approved in accordance with the terms of this Agreement, and upon receipt of any such other documents (which shall be clearly marked as to which Purchased Asset File such documents relate), Custodian will be required to hold such other documents in the related Purchased Asset File in accordance with the Custodial Agreement.

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ARTICLE 9

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

(a) Title to each Purchased Assets shall pass to Purchaser on the related Purchase Date, and Purchaser shall have free and unrestricted use of each Purchased Asset, subject, however, to the terms of this Agreement. Nothing in this Agreement or any other Transaction Document shall preclude Purchaser from engaging, at Purchaser’s sole cost and expense, in repurchase transactions with the Purchased Assets or otherwise selling, transferring, pledging, repledging, hypothecating or rehypothecating the Purchased Assets, all on terms that Purchaser may determine in its sole and absolute discretion, in conformity with the terms and conditions of the Purchased Asset Documents; provided that if no Event of Default has occurred and is continuing (i) Purchaser may only engage in repurchase transactions or sell, transfer, pledge, repledge, hypothecate or rehypothecate the Purchased Assets to a Qualified Transferee that is not a Direct Competitor or a Borrower or an Affiliate of a Borrower, and (ii) no such transaction shall relieve Purchaser of its obligations to transfer the same Purchased Assets to the applicable Seller pursuant to Article 3 or of Purchaser’s obligation to apply amounts to the Repurchase Obligation in accordance with Article 5 or otherwise affect the rights, obligations and remedies of any party to this Agreement.

(b) Nothing contained in this Agreement or any other Transaction Document shall obligate Purchaser to segregate any Purchased Asset delivered to Purchaser by any Seller. Except to the extent expressly set forth in this Agreement or any other Transaction Document, no Purchased Asset shall remain in the custody of any Seller or any Affiliate of any Seller.

ARTICLE 10

REPRESENTATIONS AND WARRANTIES

Each of the Sellers represents and warrants to Purchaser as of the date hereof and as of each Purchase Date and covenants that at all times while this Agreement or any Transaction is in effect as follows:

(a) Organization. Each Seller (i) is duly organized, validly existing and in good standing under the laws and regulations of the jurisdiction of its formation, (ii) has the power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted and (iii) has the power to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents.

(b) Authority. Each Seller is duly authorized to execute and deliver the Transaction Documents to which it is a party, to enter into the Transactions contemplated hereunder and to perform its obligations under the Transaction Documents, and has taken all necessary action to authorize such execution, delivery and performance, and (ii) each person signing any Transaction Document on its behalf is duly authorized to do so on its behalf.

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(c) Due Execution and Delivery; Consideration. The Transaction Documents to which it is a party have been or will be duly executed and delivered by each Seller, for good and valuable consideration.

(d) Enforceability. The Transaction Documents constitute the legal, valid and binding obligations of each Seller, enforceable against each Seller in accordance with their respective terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles.

(e) Approvals and Consents. No consent, approval or other action of, or filing by, any Seller with any Governmental Authority or any other Person is required to authorize, or is otherwise required in connection with, the execution, delivery and performance of any of the Transaction Documents (other than consents, approvals and filings that have been obtained or made, as applicable, and any such consents, approvals and filings that have been obtained are in full force and effect, and the filing of the Seller Financing Statement).

(f) Licenses and Permits. Each Seller is duly licensed, qualified and in good standing in every jurisdiction where such licensing, qualification or standing is material to such Seller’s business, and has all material licenses, permits and other consents that are necessary, for the transaction of such Seller’s business or the acquisition, origination (if applicable), ownership or sale of any Purchased Asset or other Purchased Item.

(g) [Reserved].

(h) Non-Contravention. Neither the execution and delivery of the Transaction Documents, nor consummation by any Seller of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by any Seller with the terms, conditions and provisions of the Transaction Documents (or any of them) will conflict with or result in a breach of any of the terms, conditions or provisions of (i) the organizational documents of any Seller, (ii) any agreement by which any Seller is bound or to which any assets of such Seller are subject or constitute a default thereunder, or result thereunder in the creation or imposition of any Lien upon any of the assets of such Seller, other than pursuant to the Transaction Documents, (iii) any judgment or order, writ, injunction, decree or demand of any court applicable to any Seller, or (iv) any applicable Requirement of Law.

(i) Litigation/Proceedings. Except as otherwise disclosed in writing to Purchaser, there is no action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of any Seller, threatened in writing against any Seller Party, or any of their respective assets that (i) questions or challenges the validity or enforceability of any of the Transaction Documents or any action to be taken in connection with the transactions contemplated thereby, (ii) makes a claim in an aggregate amount greater than the Litigation Threshold or (iii) which, individually or in the aggregate, if adversely determined is reasonably likely to have a Material Adverse Effect.

(j) No Outstanding Judgments. Except as disclosed in writing to Purchaser, there are no judgments against any Seller Party unsatisfied of record or docketed in any court located in the United States of America or in any other relevant jurisdiction.

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(k) No Bankruptcies. No Act of Insolvency has ever occurred with respect to any Seller Party.

(l) Compliance with Law. Each Seller is in compliance in all material respects with all Requirements of Law. Except as disclosed in writing to Purchaser, no Seller Party is in default in any material respect with respect to any judgment, order, writ, injunction, decree, rule or regulation of any arbitrator or Governmental Authority applicable to and imposed upon such Seller Party.

(m) Acting as Principal. Each Seller is engaging in the Transactions as principal.

(n) No Broker. No Seller has dealt with any broker, investment banker, agent, or other Person (other than Purchaser or an Affiliate of Purchaser) who may be entitled to any commission or compensation in connection with the sale of any Purchased Asset pursuant to any of the Transaction Documents.

(o) No Default. As of the date of this Agreement and as of each Purchase Date, no Default has occurred and is continuing which has not been disclosed to Purchaser in writing. At all times while this Agreement and any Transaction thereunder is in effect, no Event of Default or, to any Seller’s Knowledge, Default has occurred and is continuing which has not been disclosed to Purchaser in writing.

(p) [Reserved].

(q) [Reserved].

(r) No Adverse Selection. No Purchased Asset under this Agreement has been selected by any Seller so as to affect adversely the interests of Purchaser.

(s) Full and Accurate Disclosure. All information, reports, statements, exhibits, schedules and certificates (i) furnished in writing by or on behalf of any Seller Party in connection with the negotiation, preparation or delivery of the Transaction Documents, or after the date hereof pursuant to the terms of any Transaction Document or (ii) included in any Transaction Document, when taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made, or (in the case of projections, financial prospects, forecasts or other forward-looking information) is based on estimates believed by any Seller to be commercially reasonable on the date as of which such information is stated or certified.

(t) Financial Information. All financial data concerning the Seller Parties, the Purchased Asset and the other Purchased Items that has been delivered by or on behalf of any Seller Party to Purchaser is true, correct and complete in all material respects. All financial data concerning the Seller Parties has been prepared fairly in accordance with GAAP (to the extent applicable). Since the delivery of such data, except as otherwise disclosed in writing to Purchaser, there has been no change in the financial position of the Seller Parties, or, to any Seller’s Knowledge, the Purchased Assets and the other Purchased Items or in the results of operations of any Seller Party, which change is reasonably likely to result in a Material Adverse Effect.

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(u) Authorized Representatives. The duly authorized representatives of each Seller are listed on, and true signatures of such authorized representatives are set forth on, Exhibit III hereto, or such other most recent list of authorized representatives substantially in the form of Exhibit III hereto as each Seller may from time to time deliver to Purchaser.

(v) Chief Executive Office; Jurisdiction of Organization; Location of Books and Records. Each Seller’s chief executive office is located at the address for notices specified for such Seller on Exhibit I, unless such Seller has provided a new chief executive office address to Purchaser in writing. Each Seller’s jurisdiction of organization is the State of Delaware. The location where each Seller keeps its books and records, including all computer tapes and records relating to the Collateral, is its chief executive office.

(w) Representations and Warranties Regarding the Purchased Assets. Each of the representations and warranties made in respect of the Purchased Assets pursuant to (i) in the case of a U.S. Purchased Asset, Exhibit V-A, (ii) in the case of a Foreign Purchased Asset (GBP), Exhibit V-B or (iii) in the case of any other Foreign Asset, a schedule to the related Confirmation, are true, complete and correct in all material respects (in each case other than any MTM Representation and as disclosed in a Requested Exceptions Report approved by Purchaser in accordance with the terms hereof).

(x) Good Title to Purchased Asset. Immediately prior to the purchase of any Purchased Asset and other Purchased Items by Purchaser from any Seller, (i) such Purchased Asset and other Purchased Items are free and clear of any Lien or impediment to transfer (including any “adverse claim” as defined in Article 8-102(a)(1) of the UCC) (other than any such Lien or impediment to transfer that is released simultaneously with such purchase), (ii) such Purchased Asset and other Purchased Items are not subject to any right of set-off or any prior sale, transfer or assignment, in whole or in part, to a Person other than Purchaser and (iii) the applicable Seller is the record and beneficial owner of, and had good and marketable title to, and the right to sell and transfer, such Purchased Asset and other Purchased Items to Purchaser. Upon the purchase of any Purchased Asset and other Purchased Items by Purchaser from any Seller, Purchaser shall be the sole owner of such Purchased Asset and other Purchased Items free from any adverse claim, subject to the rights of such Seller pursuant to the terms of this Agreement.

(y) No Encumbrances. There are (i) no outstanding rights, options, warrants or agreements on the part of any Seller for a purchase, sale or issuance, in connection with any Purchased Asset or other Purchased Item, (ii) no agreements on the part of any Seller to issue, sell or distribute any Purchased Asset or other Purchased Item and (iii) no obligations on the part of any Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or interest therein, in each case, except as contemplated by the Transaction Documents.

(z) Security Interest Matters.

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(i) The provisions of the Transaction Documents are effective to either (x) constitute a sale of Purchased Items to Purchaser (other than for United States federal, state and local income or franchise tax purposes more fully described in Article 23(g)) or (y) create in favor of Purchaser a legal, valid and enforceable first priority “security interest” (as defined in Section 1-201(b)(35) of the UCC) in each applicable jurisdiction in all rights, title and interest of the applicable Seller in, to and under the Collateral.

(ii) Upon possession by the Custodian or by a Bailee pursuant to a Bailee Letter of each Promissory Note or Participation Certificate, endorsed in blank by a duly authorized officer of the applicable Seller, Purchaser shall have a legal, valid, enforceable and fully perfected first priority security interest in all right, title and interest of such Seller in such Promissory Note or Participation Certificate, as applicable.

(iii) Upon the filing of the Seller Financing Statements in the UCC Filing Jurisdiction, Purchaser shall have a legal, valid, enforceable and fully perfected first priority security interest in that portion of the Collateral in which a security interest can be perfected under the UCC by the filing of financing statements.

(iv) Upon execution and delivery of any Account Control Agreement, Purchaser shall either be the owner of, or have a legal, valid, enforceable and fully perfected first priority security interest in, such Collection Account and all funds at any time credited thereto. In relation to any Collection Account situated in any jurisdiction outside the United States (if any), such Collection Account shall be subject to a first ranking fixed charge.

(aa) Solvency; No Fraudulent Transfer. Each Seller, as of the Closing Date and each Purchase Date, has adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Each Seller, as of the Closing Date and each Purchase Date, is generally able to pay, and intends to pay, its debts as they come due. Neither the Transaction Documents nor any Transaction are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Sellers’ creditors. As of each Purchase Date, no Seller is insolvent within the meaning of 11 U.S.C. Section 101(32) or any successor provision thereto and the transfer and sale of related Purchased Assets on such Purchase Date pursuant hereto and the obligation to repurchase such Purchased Assets (i) will not cause the liabilities of any Seller to exceed the assets of such Seller, (ii) will not result in any Seller having unreasonably small capital and (iii) will not result in debts that would be beyond any Seller’s ability to pay as the same mature. Each Seller received reasonably equivalent value in exchange for the transfer and sale of each Purchased Asset and other Purchased Item subject hereto. Each Seller has only entered into agreements on terms that would be considered arm’s length and otherwise on terms consistent with other similar agreements with other similarly situated entities.

(bb) [Reserved].

(cc) Investment Company Act. No Seller is required to register as an “investment company,” and is not a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended.

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(dd) Taxes. Each Seller has filed or caused to be filed all required U.S. federal and other material tax returns that to the Knowledge of such Seller would be delinquent if they had not been filed on or before the date hereof and has paid all material taxes shown to be due and payable on or before the date hereof on such returns or on any assessments made against it or any of its property and all other material taxes, fees or other charges imposed on it and any of its assets by any Governmental Authority except for any such taxes as (i) are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are being maintained in accordance with GAAP or (ii) are de minimis in amount; no tax liens have been filed against any of Sellers’ assets and, to Sellers’ Knowledge, no claims are being asserted with respect to any such taxes, fees or other charges.

(ee) ERISA. Neither any Seller nor any ERISA Affiliate of any Seller sponsors, maintains or contributes to any Plans or any Multiemployer Plans. Sellers are not, and are not using, any assets of a “benefit plan investor” as defined in Department of Labor regulation 29 C.F.R Section 2510.3-101, as modified by Section 3(42) of ERISA (a “Benefit Plan Investor”) in connection with any Transaction.

(ff) Use of Proceeds; Margin Regulations. All proceeds of each Transaction shall be used by the related Seller for purposes permitted under such Seller’s governing documents, provided that no part of the proceeds of any Transaction will be used by any Seller to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. Neither the entering into of any Transaction nor the use of any proceeds thereof will violate, or be inconsistent with, any provision of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

(gg) No Real Property. Neither any Seller nor any Subsidiary of any Seller has at any time since its formation held title to any real property.

(hh) Ownership. Each Seller is and shall remain at all times a wholly-owned direct or indirect subsidiary of Guarantor.

(ii) Insider. No Seller is an “executive officer,” “director,” or “person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than ten percent (10%) of any class of voting securities” (as those terms are defined in 12 U.S.C. § 375(b) or in regulations promulgated pursuant thereto) of Purchaser, of a bank holding company of which Purchaser is a Subsidiary, or of any Subsidiary, of a bank holding company of which Purchaser is a Subsidiary, of any bank at which Purchaser maintains a correspondent account or of any lender which maintains a correspondent account with Purchaser.

(jj) Sanctions; No Prohibited Persons. Each Seller Party and, to Sellers’ Knowledge, each of their respective controlled Affiliates is in compliance with Sanctions. No Seller Party or, to Sellers’ knowledge, any controlled Affiliate, officer, director, partner, member or employee, of any Seller Party or of such Affiliate, is an entity or person that is, or is owned, controlled by or acting on behalf of any Person that is, a Prohibited Person. Each Seller agrees that, from time to time upon the prior written request of Purchaser, it shall execute and deliver such further documents, provide such additional information and reports and perform such other acts as Purchaser may reasonably request in order to ensure compliance with the provisions hereof (including, without limitation, compliance with Sanctions); provided, however, that nothing in this Article 10(jj) shall be construed as requiring Purchaser to conduct any inquiry or decreasing any Seller’s responsibility for its statements, representations, warranties or covenants hereunder.

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(kk) Anti-Corruption and Anti-Money Laundering Laws. Each Seller Party and, to Sellers’ Knowledge, each of their respective controlled Affiliates has complied with, and is in compliance with, all applicable Anti-Corruption Laws and Anti-Money Laundering Laws. No part of the proceeds of any Transaction will be used, directly or, to Sellers’ Knowledge, indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of any Anti-Corruption Laws.

(ll) Centre of Main Interests. Each Seller warrants, represents and covenants that it has not (A) taken any action that would cause its “centre of main interests” (as such term is used in Section 3(1) of the European Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings (the “Insolvency Regulation”)) to be located in the United Kingdom or Europe or

(B) registered as a company in any jurisdiction other than Delaware.

ARTICLE 11

NEGATIVE COVENANTS OF SELLERS

On and as of the date hereof and at all times while this Agreement or any Transaction hereunder is in effect, no Seller shall without the prior written consent of Purchaser, which may be granted or denied at Purchaser’s sole and absolute discretion:

(i) subject to Sellers’ right to repurchase any Purchased Asset, take any action that would directly or indirectly impair or adversely affect Purchaser’s title to any Purchased Asset or other Purchased Item;

(ii) transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in any Purchased Asset or other Purchased Item to any Person other than Purchaser, or engage in repurchase transactions or similar transactions with respect to any Purchased Asset or other Purchased Item with any Person other than Purchaser;

(iii) create, incur, assume or permit to exist any Lien, in or on any of its property, assets, revenue, the Purchased Assets, the other Collateral, whether now owned or hereafter acquired, other than the Liens and security interest granted by such Seller pursuant to the Transaction Documents;

(iv) [Reserved];

(v) enter into any transaction of merger or consolidation or Division or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution), or sell all or substantially all of its assets (except in connection with the sale or securitization of the Purchased Assets in the ordinary course of such Seller’s business after the repurchase thereof in accordance with this Agreement);

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(vi) permit a Change of Control;

(vii) permit (through the giving of consent, waiver, failure to object or otherwise) any Mortgaged Property or Borrower to create, incur, assume or suffer to exist any Liens or Indebtedness, including without limitation, senior or pari passu mortgage debt, junior mortgage debt or mezzanine debt (in each case, unless expressly permitted by the applicable Purchased Asset Documents);

(viii) consent or assent to any Material Modification other than in accordance with Article 29 and the Servicing Agreement;

(ix) permit such Seller’s certificate of formation or organizational documents to be amended in any material respect without the prior written consent of Purchaser (provided that, for this purpose any amendment of the provisions of such Seller’s limited liability company agreement entitled “Purpose,” “Independent Manager,” “Dissolution,” “Liquidation,” “Assignments,” “Resignation,” “Admission of Additional Members,” “SPE Provisions” and “Amendment” and any change of such Seller’s certificate of formation or jurisdiction of organization shall be deemed material);

(x) after the occurrence and during the continuance of a monetary Default or an Event of Default, make any distribution, payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any Capital Stock of such Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of such Seller;

(xi) acquire or maintain any right or interest in any Purchased Asset or any Mortgaged Property that is senior to, or pari passu with, the rights and interests of Purchaser therein under this Agreement and the other Transaction Documents unless such right or interest is a Purchased Asset hereunder;

(xii) use any part of the proceeds of any Transaction hereunder for any purpose which violates, or would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System;

(xiii) directly, or through a Subsidiary, acquire or hold title to any real property; and

(xiv) take any action that will cause its “centre of main interests” (as such term is used in the Insolvency Regulation) to be located in the United Kingdom or Europe or register as a company in any jurisdiction other than Delaware.

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ARTICLE 12

AFFIRMATIVE COVENANTS OF SELLERS

On and as of the date hereof and each Purchase Date and until this Agreement is no longer in force with respect to any Transaction, each Seller covenants that:

(a) Seller Notices.

(i) Material Adverse Effect. Each Seller shall promptly after obtaining Knowledge thereof, notify Purchaser of any material adverse change in its business operations and/or financial condition, which change is reasonably likely, in the commercially reasonable judgment of such Seller, to have a Material Adverse Effect; provided, however, that nothing in this Article 12 shall relieve any Seller of its obligations under this Agreement.

(ii) Default or Event of Default. Each Seller shall, promptly (but in no event later than the second (2^nd) succeeding Business Day) after obtaining Knowledge of such event, notify Purchaser of the occurrence of such Default or Event of Default.

(iii) Purchased Asset Matters. Each Seller shall promptly (but in no event later than the second (2^nd) succeeding Business Day after obtaining Knowledge thereof) notify Purchaser of (A) any default or event of default under any Purchased Asset; (B) any facts or circumstances that in the commercially reasonable judgment of such Seller are reasonably likely to cause, or have caused, the Market Value of any Purchased Asset to decline; (C) any Purchased Asset that has become a Defaulted Asset; (D) a breach of any MTM Representations; or (E) any Future Advance Failure (without regard to the time period set forth in the definition thereof).

(iv) Other Defaults, Litigation and Judgments. Each Seller shall promptly (and in any event not later than two (2) Business Days after obtaining Knowledge (or, in the case of clause (B) below, after such Seller’s receipt of service of process thereof) notify Purchaser of (A) any default or event of default (or similar event) on the part of any Seller Party under any Indebtedness or other material contractual obligation to the extent the obligations in connection with such default under the applicable agreement (1) are at least equal to the Default Threshold, or (2) which, individually or in the aggregate, if adversely determined, would reasonably be likely to have a Material Adverse Effect; and (B) the commencement or threat in writing of, settlement of, or judgment in, any litigation, action, suit, arbitration, investigation or other legal or arbitrable proceeding involving any Seller Party that (1) makes a claim or claims in aggregate amount greater than the applicable Litigation Threshold, or (2) which, individually or in the aggregate, if adversely determined, would reasonably be likely to have a Material Adverse Effect.

(v) Corporate Change. Each Seller shall advise Purchaser in writing of the opening of any new chief executive office, or the closing of any such office, of such Seller and of any change in such Seller’s name or the places where the books and records pertaining to the Purchased Asset are held not less than thirty (30) days before any financing statement will lapse, lose perfection or become materially misleading.

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(vi) Sanctions; Anti-Corruption and Anti-Money Laundering Laws. Each Seller shall promptly (and in any event within two (2) Business Days after knowledge thereof) notify Purchaser of any violation of the representation and warranty contained in Article 10(jj) (Sanctions; No Prohibited Persons) and Article 10(kk) Anti-Corruption and Anti-Money Laundering Laws).

(b) Reporting and Other Information. Each Seller shall provide, or to cause to be provided, to Purchaser the following financial and reporting information:

(i) Purchased Asset Information. (A) Promptly after receipt by any Seller, but no less frequently than once per calendar month, copies of property level information made available to such Seller and all other required reports, rent rolls, financial statements, certificates and notices (including, without limitation, any notice of the occurrence of a default or an event of default under the Purchased Asset Documents) it receives pursuant to the Purchased Asset Documents relating to any Purchased Asset and (B) any other information with respect to the Purchased Assets that may be reasonably requested by Purchaser from time to time.

(ii) Monthly Purchased Asset Reports. No later than the fifteenth (15th) day of each month, a Monthly Reporting Package with respect to the immediately preceding calendar month.

(iii) Quarterly Reports. Within forty-five (45) days after the end of each of the first three (3) quarterly fiscal periods of each fiscal year of Guarantor, the unaudited, consolidated balance sheet of Guarantor as at the end of such period and the related unaudited, consolidated statements of income, net assets and cash flows for Guarantor for such period and the portion of the fiscal year through the end of such period (and in each case with comparisons to applicable information in the financial statements from the same quarter of the previous year), accompanied by an officer’s certificate of Guarantor that includes a statement of Guarantor that said consolidated financial statements fairly and accurately present the consolidated financial condition and results of operations of Guarantor in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to customary year-end audit adjustments).

(iv) Annual Reports. Within ninety (90) days after the end of each fiscal year of Guarantor, the consolidated balance sheet of Guarantor as at the end of such fiscal year and the related consolidated statements of income, net assets and cash flows for Guarantor for such fiscal year, accompanied by an opinion thereon of an independent certified public accounting firm of recognized national standing, which opinion shall not be qualified as to scope of audit or going concern and shall state that said consolidated financial statements fairly and accurately present the consolidated financial condition and results of operations of Guarantor in accordance with GAAP, consistently applied, as at the end of, and for, such fiscal year or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the Exchange Act.

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(v) Covenant Compliance Certificate. Along with each delivery pursuant to clauses (ii), (iii) and (iv) above, a completed and executed Covenant Compliance Certificate.

(vi) Other Documentation. Within five (5) Business Days after Purchaser’s request thereof, such other documents, reports and information as Purchaser may reasonably request (A) with respect to the financial affairs of the Seller Parties, (B) to demonstrate compliance with representations, warranties and covenants in the Transaction Documents, and (C) to the extent available to each Seller pursuant to the Purchased Asset Documents, related to such Purchased Asset, with respect to any Purchased Asset or the operation of any Mortgaged Property.

(c) Defense of Purchaser’s Security Interest. Each Seller shall defend the right, title and interest of Purchaser in and to the Purchased Assets and other Collateral against, and take such other action as is necessary to remove, the Liens, security interests, claims and demands of all Persons (other than security interests granted to Purchaser hereunder).

(d) Additional Rights. If any Seller shall at any time become entitled to receive or shall receive any rights, whether in addition to, in substitution of, as a conversion of, or in exchange for a Purchased Asset, or otherwise in respect thereof, such Seller shall accept the same as Purchaser’s agent, hold the same in trust for Purchaser and deliver the same forthwith to Purchaser (or the Custodian, as appropriate) in the exact form received, duly endorsed by such Seller to Purchaser, if required, together with all related reasonably necessary transfer documents duly executed in blank to be held by Purchaser hereunder as additional collateral security for the Transactions. If any sums of money or property so paid or distributed in respect of the Purchased Assets other than any Income which any Seller is entitled to direct to parties other than Purchaser pursuant to Article 5 shall be received by such Seller, such Seller shall, until such money or property is paid or delivered to Purchaser, hold such money or property in trust for Purchaser, segregated from other funds of such Seller, as additional collateral security for the Transactions.

(e) Further Assurances. At any time from time to time upon the reasonable request of Purchaser, at the sole expense of such Seller, each Seller shall promptly and duly execute and deliver such further instruments and documents and take such further actions as Purchaser may deem reasonably necessary to (i) obtain or preserve the security interest granted hereunder, (ii) ensure that such security interest remains fully perfected at all times and remains at all times first in priority as against all other creditors of such Seller (whether or not existing as of the Closing Date or in the future) and (iii) obtain or preserve the rights and powers herein granted (including, among other things, filing such UCC financing statements or their equivalent under the Requirements of Law in the relevant non-U.S. jurisdiction, if applicable, as Purchaser may reasonably request and serving notices of the security created under each Foreign Assignment Agreement in such form and on such parties as Purchaser may specify). If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or certificated security, such note, instrument or certificated security shall be promptly delivered to Purchaser, duly endorsed in blank, to be itself held as Collateral pursuant to the Transaction Documents.

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(f) Preservation of Existence; Licenses. Each Seller shall at all times maintain and preserve its legal existence and all of its material rights, privileges, licenses, permits and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses held by each Seller and of each Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets), to protect the validity and enforceability of the Transaction Documents and each Purchased Asset and for its performance under the Transaction Documents.

(g) Compliance with Transaction Documents. Each Seller shall observe, perform and satisfy all the terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents.

(h) Compliance with Other Obligations. Each Seller shall at all times comply in all material respects (i) with its organizational documents, (ii) with any agreements by which it is bound or to which its assets are subject and (iii) with any Requirement of Law.

(i) Books and Record. Each Seller shall, and shall cause each other Seller Party to, at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions fairly in accordance with GAAP, and set aside on its books from its earnings for each fiscal year all such proper reserves in accordance with GAAP.

(j) Taxes and Other Charges. Each Seller shall pay and discharge all material taxes, assessments, levies, liens and other charges imposed on it, on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such taxes, assessments, levies, liens and other charges which are being contested in good faith and by proper proceedings and against which adequate reserves have been provided in accordance with GAAP.

(k) Operations. Each Seller shall continue to engage in business of the same general type as now conducted by it or otherwise as approved by Purchaser. Each Seller shall maintain records with respect to the Collateral and Purchased Items and the conduct and operation of its business with no less a degree of prudence than if the Collateral and Purchased Items were held by such Seller for its own account and shall furnish Purchaser, upon reasonable request by Purchaser or its designated representative, with reasonable information reasonably obtainable by such Seller with respect to the Collateral and Purchased Items and the conduct and operation of its business.

(l) Responsibility for Fees and Expenses of Third-Parties. Each Seller shall be solely responsible for the fees and expenses of Custodian, Account Bank and Servicer except as expressly set forth in the applicable Transaction Document.

(m) Future Advances. To the extent any Future Advance is validly required to be made with respect to any Purchased Asset, unless such Seller is contesting in good faith that such Future Advance is required to be made under the related Purchased Asset Documents, the related Seller shall fund such Future Advance in accordance with the related Purchased Asset Documents, regardless of whether Purchaser agrees to fund an increase in the Purchase Price or the conditions for increasing the Purchase Price under this Agreement have been satisfied with regard to such Future Advance.

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ARTICLE 13

SINGLE PURPOSE ENTITY COVENANTS

On and as of the date hereof and at all times while this Agreement or any Transaction hereunder is in effect, each Seller covenants that:

(i) such Seller shall own no assets, and shall not engage in any business, other than the assets and transactions specifically contemplated by the Transaction Documents (including, without limitation, Eligible Assets for which such Seller has delivered to Purchaser written notice of its intent to sell such Eligible Asset as a Purchased Asset pursuant to this Agreement);

(ii) such Seller shall not make any loans or advances to any Affiliate or third party (other than Eligible Assets or advances under the Purchased Assets to Borrowers) and shall not acquire obligations or securities of its Affiliates (other than in connection with the origination or acquisition of Purchased Assets), in each case except as permitted by the Transaction Documents;

(iii) such Seller shall pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets as the same shall become due;

(iv) such Seller shall comply with the provisions of its organizational documents in all material respects;

(v) such Seller shall do all things necessary to observe its organizational formalities and to preserve its existence;

(vi) such Seller shall maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates (except that such financial statements may be consolidated to the extent consolidation is permitted or required under GAAP or as a matter of Requirements of Law; provided, that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Seller from such Affiliate and to indicate that such Seller’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (ii) such assets shall also be listed on such Seller’s own separate balance sheet) and file its own tax returns, if any (except to the extent consolidation is required or permitted under Requirements of Law);

(vii) such Seller shall be, and at all times shall hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any Known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other;

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(viii) such Seller shall maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall remain solvent; provided, that the foregoing shall not require any member, partner or shareholder of such Seller to make any additional capital contributions to such Seller;

(ix) such Seller shall not commingle its funds or other assets with those of any Affiliate or any other Person and shall maintain its properties and assets in such a manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others;

(x) [Reserved];

(xi) such Seller shall not hold itself out to be responsible for the debts or obligations of any other Person;

(xii) such Seller shall not, without the prior written consent of its Independent Manager, take any action constituting an Act of Insolvency;

(xiii) such Seller shall, at all times, have at least one (1) Independent Manager;

(xiv) such Seller’s organizational documents shall provide (i) that Purchaser be given at least two (2) Business Days prior notice of the removal and/or replacement of any Independent Manager, together with the name and contact information of the replacement Independent Manager and evidence of the replacement’s satisfaction of the definition of Independent Manager and (ii) that any Independent Manager of such Seller shall not have any fiduciary duty to anyone including the holders of the equity interest in such Seller and any Affiliates of such Seller except such Seller and the creditors of such Seller with respect to taking of, or otherwise voting on, any Act of Insolvency; provided, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing;

(xv) such Seller shall not enter into any transaction with an Affiliate of such Seller except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s length transaction;

(xvi) such Seller shall maintain a sufficient number of employees (or obtain services to be performed by its Affiliates and/or their respective employees) in light of contemplated business operations, provided that such Seller shall not be required to maintain any employees;

(xvii) such Seller shall use separate stationary, invoices and checks bearing its own name, and allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an Affiliate;

(xviii) such Seller shall not pledge its assets to secure the obligations of any other Person other than to Purchaser pursuant to the Transaction Documents;

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(xix) such Seller shall not form, acquire or hold any Subsidiary or own any equity interest in any other entity; and

(xx) such Seller shall not create, incur, assume or suffer to exist any Indebtedness or Lien in or on any of its property, assets, revenue, the Purchased Assets, the other Collateral, whether now owned or hereafter acquired, other than (A) obligations under the Transaction Documents, (B) obligations under the documents evidencing the Purchased Assets, and (C) unsecured trade payables, in an aggregate amount not to exceed $250,000 at any one time outstanding, incurred in the ordinary course of acquiring, owning, financing and disposing of the Purchased Assets; provided, however, that any such trade payables incurred by such Seller shall be paid within ninety (90) days of the date incurred unless the same are being contested in good faith and adequate reserves in respect of which are maintained (it being understood that the amount of any trade debt denominated in an Applicable Currency other than U.S. Dollars shall be calculated under this clause (xx) based on the then-current equivalent of such amount based on the Spot Rate with respect to such Applicable Currency as of the date of determination).

ARTICLE 14

EVENTS OF DEFAULT; REMEDIES

(a) Events of Default. Each of the following events shall constitute an “Event of Default” under this Agreement:

(i) Failure to Repurchase or Repay. Any Seller shall fail to repurchase any Purchased Asset upon the applicable Repurchase Date or shall fail to pay the applicable Repurchase Price when and as required pursuant to the Transaction Documents.

(ii) Failure to Pay Purchase Price Differential. Purchaser shall fail to receive on any Remittance Date the accrued and unpaid Purchase Price Differential; provided, however, no more than two (2) times during any twelve (12) month period Sellers may cure such failure within one (1) Business Day if such failure arose solely by reason of an error or omission of an administrative or operational nature and funds were available to Sellers to enable it to make such payment when due.

(iii) Failure to Cure Margin Deficit. Any Seller shall fail to cure any Margin Deficit within the period specified in Article 4.

(iv) Failure to Remit Principal Payment. Any Seller fails to remit (or cause to be remitted) to Purchaser any Principal Payment received with respect to a Purchased Asset for application to the payment of the Repurchase Price for such Purchased Asset in accordance with Article 5(e).

(v) Other Payment Default. Any Seller shall fail to make any payment not otherwise enumerated that is owing to Purchaser that has become due, whether by acceleration or otherwise under the terms of this Agreement, within five (5) Business Days after notice to such Seller from Purchaser or such Seller’s Knowledge thereof.

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(vi) Negative Acts. Any Seller shall fail to perform, comply with or observe any term, covenant or agreement applicable to such Seller contained in Article 11 (Negative Covenants of Sellers) or Article 13 (Single Purpose Entity Covenants); provided, however, that if such failure is susceptible to cure, such Seller fails to cure the same within five (5) Business Days after notice of such breach from Purchaser or such Seller’s Knowledge thereof (provided that, any such breach resulting from the willful misconduct or bad faith of any Seller Party or any Affiliate thereof shall not be susceptible to cure).

(vii) Act of Insolvency. An Act of Insolvency occurs with respect to any Seller Party.

(viii) Admission of Inability to Perform. Any Person described in the definition of Knowledge shall admit to Purchaser in writing or in formal written communications to any other Person its inability to, or its intention not to, perform any of its respective obligations under any Transaction Document.

(ix) Transaction Documents. Any Transaction Document or a replacement therefor acceptable to Purchaser shall for whatever reason be terminated (other than by Purchaser without cause) or cease to be in full force and effect, or shall not be enforceable in accordance with its terms, or any Person (other than Purchaser) shall contest the validity or enforceability of any Transaction Document or the validity, perfection or priority of any Lien granted thereunder, or any Person (other than Purchaser) shall seek to disaffirm, terminate or reduce its obligations under any Transaction Document.

(x) Cross-Default. Any Seller Party shall be in default under (x) any Indebtedness of such Seller Party which default (A) involves the failure to pay a matured obligation or (B) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness; or (y) any other contract to which such Seller Party is a party which default (A) involves the failure to pay a matured obligation or (B) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract, in each case of clauses (x) and (y), to the extent the obligations in connection with such default individually or in the aggregate with other defaults are at least equal to the applicable Default Threshold; provided, however, that any such default or failure to perform shall not constitute a Default or an Event of Default if the applicable Seller Party cures such default or failure to perform, as the case may be, within the grace period, if any, provided under the applicable agreement.

(xi) ERISA. (A) Any Seller or an ERISA Affiliate shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code) involving any Plan that is not exempt from such Sections of ERISA and the Internal Revenue Code, (B) any material “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Seller or any ERISA Affiliate, (C) a Reportable Event (as referenced in Section 4043(b)(3) of ERISA) shall occur with respect to, or proceedings shall commence to have

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a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of Purchaser, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (D) any Plan shall terminate for purposes of Title IV of ERISA, or (E) any Seller or any ERISA Affiliate shall, or in the reasonable opinion of Purchaser is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan; and in each case in clauses (A) through (E) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect.

(xii) Recharacterization. Either (A) the Transaction Documents shall for any reason not cause, or shall cease to cause, Purchaser to be the owner free of any adverse claim of any of the Purchased Assets and other Purchased Items or (B) if a Transaction is recharacterized as a secured financing, and the Transaction Documents with respect to any Transaction shall for any reason cease to create and maintain a valid first priority security interest in favor of Purchaser in any of the Collateral and the related Seller fails to repurchase the applicable Purchased Asset, in each case, within three (3) Business Days of notice thereof to such Seller from Purchaser or such Seller’s Knowledge thereof;

(xiii) Governmental or Regulatory Action. Any governmental, regulatory, or self-regulatory authority shall have taken any action to remove, limit, restrict, suspend or terminate the rights, privileges, or operations of any Seller Party, which suspension has a Material Adverse Effect pursuant to clauses (b), (c) or (d) of the definition thereof.

(xiv) [Reserved].

(xv) Change of Control. A Change of Control shall have occurred without the prior written consent of Purchaser.

(xvi) Representation or Warranty Breach. If any representation, warranty or certification (other than (A) the MTM Representations which shall be considered solely for the purpose of determining the Market Value and eligibility of the Purchased Assets, unless the related Seller shall have made any such representations and warranties with Knowledge that they were materially false or misleading at the time made or (B) as disclosed in a Requested Exceptions Report approved by Purchaser in accordance with the terms hereof) made to Purchaser by, or on behalf of, any Seller Party shall have been incorrect or untrue in any respect (or, with respect to any representation or warranty made by any Seller (x) in Articles 10(s), 10(t), 10(w) or 10(y) with respect to any Purchased Asset or (y) pursuant to Exhibit V, in any material respect) when made or repeated or deemed to have been made or repeated; provided, that, if such breach is susceptible to cure, the related Seller fails to cure the same within ten (10) Business Days after notice of such breach to such Seller from Purchaser or such Seller’s Knowledge thereof (provided that, any such breach resulting from the willful misconduct or bad faith of any Seller Party or any Affiliate thereof shall not be susceptible to cure).

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(xvii) Judgment. Any final non-appealable judgment by any competent court in the United States of America or other relevant jurisdiction for the payment of money is rendered against any Seller Party in an amount at least equal to the applicable Litigation Threshold, and such judgment remains undischarged or unpaid for a period of sixty (60) days, during which period execution of such judgment is not effectively stayed by bonding over or other means reasonably acceptable to Purchaser.

(xviii) Guarantor Breach. The breach by Guarantor of the covenants made by it in Article V(i) (Limitation on Distributions) or Article V(k) (Financial Covenants) of the Guaranty.

(xix) [Reserved].

(xx) Other Covenant Default. If any Seller Party shall breach or fail to perform any of the terms, covenants, obligations or conditions under any Transaction Document, other than as specifically otherwise referred to in this definition of “Event of Default”, provided, that, if such breach or failure to perform is susceptible to cure, then such Person shall have five (5) Business Days after the earlier of notice to such Person from Purchaser, or such Person’s Knowledge, of such breach or failure to perform, to remedy such breach or failure to perform (provided that, any breach or failure to perform resulting from the willful misconduct or bad faith of any applicable Person or any Affiliate thereof shall not be susceptible to cure), provided, however, that if such breach or failure to perform is susceptible to cure but cannot reasonably be cured within such period and such Person shall have commenced cure within such period and is thereafter diligently and expeditiously proceeds to cure the same, such period shall be extended for such time as is reasonably necessary for such Person, in the exercise of due diligence, to cure such breach or failure to perform, but in no event shall such cure period exceed thirty (30) days after the earlier of notice to such Person from Purchaser, or such Person’s Knowledge, of such breach or failure to perform.

(b) Remedies. If an Event of Default shall occur and be continuing with respect to any Seller, the following rights and remedies shall be available to Purchaser:

(i) At the option of Purchaser, exercised by written notice to any Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Act of Insolvency with respect to any Seller Party), the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (such date, the “Accelerated Repurchase Date”).

(ii) If Purchaser exercises or is deemed to have exercised the option referred to in Article 14(b)(i):

(A) each Seller’s obligations hereunder to repurchase all Purchased Assets shall become immediately due and payable on and as of the Accelerated Repurchase Date;

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(B) to the extent permitted by applicable law, the Repurchase Price with respect to each Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the Accelerated Repurchase Date to but excluding the date of payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such Transaction multiplied by (y) the Purchase Price for such Transaction (decreased by (I) any amounts actually remitted to Purchaser by the Account Bank or any Seller from time to time pursuant to Article 5 and applied to such Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant to Article 14(b)(iii));

(C) the Custodian shall, upon the request of Purchaser, deliver to Purchaser all instruments, certificates and other documents then held by the Custodian relating to the Purchased Assets; and

(D) Purchaser may (1) immediately sell, at a public or private sale in a commercially reasonable manner and at such price or prices as Purchaser may deem satisfactory any or all of the Purchased Assets, and/or (2) in its sole and absolute discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Sellers credit for such Purchased Assets in an amount equal to the market value of such Purchased Assets (as determined by Purchaser in its sole good faith discretion) against the aggregate unpaid Repurchase Price for such Purchased Assets and any other amounts owing by each Seller under the Transaction Documents. The proceeds of any disposition of Purchased Assets effected pursuant to this Article 14(b)(iii) shall be applied to the Repurchase Obligations in such order of priority as Purchaser shall determine in its sole and absolute discretion.

(iii) The parties acknowledge and agree that (A) the Purchased Assets subject to any Transaction hereunder are not instruments traded in a recognized market, (B) in the absence of a generally recognized source for prices or bid or offer quotations for any Purchased Asset, the Purchaser may establish the source therefor in its sole and absolute discretion and (C) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Purchased Assets). The parties recognize that it may not be possible to purchase or sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Purchased Assets may not be liquid. In view of the nature of the Purchased Assets, the parties agree that liquidation of a Transaction or the Purchased Assets does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, Purchaser may elect, in its sole and absolute discretion, the time and manner of liquidating any Purchased Assets, and nothing contained herein shall (A) obligate Purchaser to liquidate any Purchased Assets on the occurrence and during the continuance of an Event of Default or to liquidate all of the Purchased Assets in the same manner or on the same Business Day or (B) constitute a waiver of any right or remedy of Purchaser.

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(iv) Sellers shall be liable to Purchaser and its Affiliates and shall indemnify Purchaser and its Affiliates for the amount (including, without limitation, in connection with the enforcement of the Transaction Documents) of all actual losses, out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of outside counsel) incurred by Purchaser in connection with or as a consequence of an Event of Default.

(v) Purchaser shall have, in addition to its rights and remedies under the Transaction Documents, all of the rights and remedies provided by applicable federal, state, foreign (where relevant), and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, the rights and remedies of a secured party under the UCC (or, with respect to any Foreign Purchased Asset, the equivalent Requirements of Law in the relevant non-U.S. jurisdiction), to the extent that the UCC or such other Requirement of Law is applicable, and the right to offset any mutual debt and claim and the right to appropriate the Purchased Assets in accordance with Section 14(b)(ii)(D)), in equity, and under any other agreement between Purchaser and any Seller. Without limiting the generality of the foregoing, Purchaser shall be entitled to set off the proceeds of the liquidation of the Purchased Assets against all of Sellers’ obligations to Purchaser under this Agreement, without prejudice to Purchaser’s right to recover any deficiency. The parties hereto agree that the method of valuation of Purchased Assets provided for in this Section 14(b) shall constitute a commercially reasonable method of valuation for the purposes of the FCA Regulations;

(vi) Purchaser may exercise any or all of the remedies available to Purchaser immediately upon the occurrence of an Event of Default and at any time during the continuance thereof. All rights and remedies arising under the Transaction Documents, as amended from time to time, are cumulative and not exclusive of any other rights or remedies that Purchaser may have.

(vii) Purchaser may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller hereby expressly waives any defenses such Seller might otherwise have to require Purchaser to enforce its rights by judicial process. Each Seller also waives, to the extent permitted by law, any defense such Seller might otherwise have arising from the use of nonjudicial process, disposition of any or all of the Purchased Assets, or from any other election of remedies. Each Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

(viii) With respect to any Foreign Purchased Asset, Purchaser may take any steps necessary to vest all or any of such Foreign Purchased Asset in the name of Purchaser (or its designee) including completing and submitting any Transfer Certificate to the relevant facility agent and making payment of any transfer fees. Each Seller hereby agrees that any such transfer fees paid by Purchaser will constitute “Indemnified Amounts” for the purposes of Article 27 of this Agreement.

(c) Power of Attorney. Each Seller hereby appoints Purchaser as attorney-in-fact of such Seller during the continuance of an Event of Default for the purpose of taking any action and executing or endorsing any instruments that Purchaser may deem necessary or advisable to accomplish the purposes of this Agreement, including the exercise of any remedies hereunder, which appointment as attorney-in-fact is irrevocable and coupled with an interest. Sellers hereby agree to deliver to Purchaser upon request such powers of attorney as to evidence such appointment as Purchaser may reasonably request.

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ARTICLE 15

SET-OFF

(a) In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, each Seller hereby grants to Purchaser and its Affiliates, after the occurrence and during the continuance of an Event of Default, a right to set-off, appropriate and apply, without prior written notice to any Seller, any sum or obligation (whether or not arising under the Transaction Documents, whether matured or unmatured, whether or not contingent, irrespective of the currency, place of payment or booking office of the sum or obligation and irrespective of whether Purchaser or its Affiliates shall have made any demand hereunder) owed by any Seller to Purchaser or any Affiliate of Purchaser against (i) any sum or obligation (whether or not arising under the Transaction Documents, whether matured or unmatured, whether or not contingent and irrespective of the currency, place of payment or booking office of the sum or obligation) owed by Purchaser or its Affiliates to each Seller and (ii) any and all deposits (general or specified), monies, credits, securities, collateral or other property of any Seller and the proceeds therefrom, now or hereafter held or received for the account of such Seller (whether for safekeeping, custody, pledge, transmission, collection, or otherwise) by Purchaser or its Affiliates or any entity under the control of Purchaser or its Affiliates and its respective successors and assigns (including, without limitation, branches and agencies of Purchaser, wherever located). Purchaser shall give written notice to the applicable Seller of any set-off affected under this Article 15 to the extent it is not prohibited from doing so by applicable law.

(b) If a sum or obligation is unascertained, Purchaser may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Article 15 shall be effective to create a charge or other security interest. This Article 15 shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other rights to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

(c) ANY AND ALL RIGHTS TO REQUIRE PURCHASER OR ITS AFFILIATES TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS THAT SECURE THE AMOUNTS OWING TO PURCHASER OR ITS AFFILIATES BY ANY SELLER UNDER THE TRANSACTION DOCUMENTS, PRIOR TO EXERCISING THEIR RIGHT OF SET-OFF WITH RESPECT TO SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF SUCH SELLER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY EACH SELLER.

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ARTICLE 16

SINGLE AGREEMENT

Purchaser and each Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Purchaser and each Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

ARTICLE 17

RECORDING OF COMMUNICATIONS

EACH OF PURCHASER AND EACH SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE RECORDINGS OF COMMUNICATIONS BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF THE APPLICABLE PARTY. EACH OF PURCHASER AND EACH SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.

ARTICLE 18

NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if sent by (a) hand delivery, with proof of delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service or Royal Mail, with proof of delivery, or (d) by electronic mail, provided that, other than with respect to day-to-day notices delivered under this Agreement and other than with respect to any notices delivered under Article 12(a), such electronic mail notice must also be delivered by one of the means set forth in (a), (b), or (c) above unless the sender of such

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communication receives a verbal or electronic confirmation acknowledging receipt thereof (for the avoidance of doubt, any automatically generated email or any similar automatic response shall not constitute confirmation), to the address specified in Exhibit I hereto or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Article 18; provided, however, at least one of the individuals identified in clause (i) of the definition of “Knowledge” shall be an “attention” party for notices to any Seller. A notice shall be deemed to have been given: (x) in the case of hand delivery, at the time of delivery, if on a Business Day, and otherwise on the next occurring Business Day, (y) in the case of registered or certified mail or expedited prepaid delivery, when delivered, if on a Business Day, and otherwise on the next occurring Business Day, or upon the first attempted delivery on a Business Day or (z) in the case of electronic mail, upon receipt of a verbal or electronic confirmation acknowledging receipt thereof (for the avoidance of doubt, any automatically generated email or any similar automatic response shall not constitute confirmation). A party receiving a notice that does not comply with the technical requirements for notice under this Article 18 may elect to waive any deficiencies and treat the notice as having been properly given. Notwithstanding the foregoing, in the event that any Seller directs Purchaser to transfer funds pursuant to a Transaction or otherwise in accordance with Article 3 to an account or recipient other than such Seller’s wiring instructions specified on Annex I, such direction shall be in writing (including in a Confirmation) and signed by two (2) Responsible Officers of such Seller; provided, however, that Purchaser shall not have any duty to confirm that any such request has been signed by the requisite number of Responsible Officers of such Seller and shall not be liable to such Seller if it acts on a request that has not been signed by the requisite number of Responsible Officers of such Seller or at all.

ARTICLE 19

ENTIRE AGREEMENT; SEVERABILITY

This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

ARTICLE 20

NON-ASSIGNABILITY

(a) No Seller Party may assign any of its rights or obligations under this Agreement or the other Transaction Documents without the prior written consent of Purchaser (which may be granted or withheld in Purchaser’s sole and absolute discretion) and any attempt by any Seller Party to assign any of its rights or obligations under this Agreement or any other Transaction Document without the prior written consent of Purchaser shall be null and void.

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(b) Purchaser may, without consent of any Seller, at any time and from time to time, assign or participate some or all of its rights and obligations under the Transaction Documents and/or under any Transaction (subject to Article 9(a)) to any Person that is a Qualified Transferee; provided, however, that, so long as no Event of Default shall have occurred and be continuing, without the prior written consent of any Seller (i) no assignment or participation shall be made to a Direct Competitor or to a Borrower or an Affiliate of any Borrower under any Purchased Asset and (ii) other than in the case of a merger or other fundamental corporate transaction (such as a sale of the applicable business unit) (A) Barclays Capital PLC or an Affiliate thereof shall retain a minimum twenty-five percent (25%) direct interest in the Transactions under this Agreement, (B) Sellers shall only be required to interface with Barclays Capital PLC or an Affiliate thereof with respect to this Agreement and the Transactions hereunder and (C) Barclays Capital PLC or an Affiliate thereof shall retain all authority to enforce remedies and provide consents, waivers or approvals (including, without limitation, approving any Eligible Asset as a Purchased Asset or any extension of the Availability Period) under this Agreement and to determine the Market Value for any Purchased Asset under this Agreement. In connection with any permitted assignment or participation, Purchaser may bifurcate or allocate (i.e. senior/subordinate) amounts due to Purchaser. Each Seller agrees to reasonably cooperate with Purchaser, at Purchaser’s sole cost and expense, in connection with any such assignment, transfer or sale of participating interest and to enter into such restatements of, and amendments, supplements and other modifications to, the Transaction Documents to which it is a party in order to give effect to such assignment, transfer or sale of participating interest.

(c) Purchaser, acting solely for this purpose as an agent of Sellers, shall maintain at one of its offices in the United States a copy of each such sale, transfer and assignment and assumption delivered to it and a register for the recordation of the names and addresses of Purchaser and each permitted purchaser, transferee and assignee, as applicable, and the amounts (and stated interest) owing to, each purchaser, transferee and assignee pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the parties hereunder shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Purchaser hereunder for all purposes of this Agreement. The Register shall be available for inspection by any Seller at any reasonable time and from time to time upon reasonable prior notice. No sale, transfer or assignment pursuant to this Article 20 shall be effective until reflected in the Register.

(d) If Purchaser sells a participation interest pursuant to Article 20(b), it shall, acting solely for this purpose as an agent of the applicable Seller, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest herein or obligations under the Transaction Documents (the “Participant Register”); provided that Purchaser shall have no obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any Transaction Document) to any Person except to the related Seller or to the extent that such disclosure is necessary to establish that such interest is in registered form under Section 5f.103-1(c) of the United States Treasury regulations. The entries in the Participant Register shall be conclusive absent manifest error, and Purchaser and the related Seller shall treat each Person whose name is recorded in the register as the owner of such participation interest for all purposes of this Agreement notwithstanding any notice to the contrary. No participation pursuant to this Article 20 shall be effective until reflected in the foregoing register.

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(e) Subject to the foregoing, the Transaction Documents and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective permitted successors and assigns. Nothing in the Transaction Documents, express or implied, shall give to any Person, other than the parties to the Transaction Documents and their respective permitted successors, any benefit or any legal or equitable right, power, remedy or claim under the Transaction Documents.

ARTICLE 21

GOVERNING LAW

THIS AGREEMENT (AND ANY CLAIM OR CONTROVERSY HEREUNDER) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

ARTICLE 22

WAIVERS AND AMENDMENTS

No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto.

ARTICLE 23

INTENT

(a) The parties intend and recognize that the arrangements under this Agreement are to constitute a “title transfer financial collateral arrangement” or a “security financial collateral arrangement” for the purposes of the Financial Collateral Arrangements (No 2) Regulations 2003 (the “FCA Regulations”). The parties intend and acknowledge that (i) each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of Title 11 of the United States Code, as amended (except insofar as the type of Assets subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable), (ii) each Purchased Asset constitutes either a “mortgage loan” or “an interest in a mortgage” as such terms are used in Title 11 of the United States Code and (iii) all payments hereunder are deemed “margin payments” or settlement payments” as defined in Title II of the Bankruptcy Code.

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(b) The parties intend and acknowledge that either party’s right to cause the termination, liquidation or acceleration of, or to set-off or net termination values, payment amounts or other transfer obligations arising under, or in connection with, this Agreement or any Transaction hereunder or to exercise any other remedies pursuant to Article 14 is in each case a contractual right to cause or exercise such right as described in Sections 555, 559 and 561 of Title 11 of the United States Code, as amended.

(c) The parties intend and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in the FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

(d) The parties intend and acknowledge that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

(e) The parties intend and acknowledge that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of Title 11 of the United States Code, as amended, and as used in Section 561 of Title 11 of the United States Code, as amended, and a “securities contract” with the meaning of Section 555 and Section 559 under the Bankruptcy Code.

(f) The parties intend and acknowledge that any provisions hereof or in any other document, agreement or instrument that is related in any way to this Agreement shall be deemed “related to” this Agreement within the meaning of Section 741 of the Bankruptcy Code.

(g) Notwithstanding anything to the contrary in this Agreement, it is the intention of the parties that, for U.S. Federal, state and local income and franchise tax purposes and for accounting purposes, each Transaction constitute a financing to the applicable Seller, and that the applicable Seller be (except to the extent that Purchaser shall have exercised its remedies following an Event of Default) the owner of the Purchased Assets for such purposes. Unless prohibited by applicable law, Sellers and Purchaser agree to treat the Transactions as described in the preceding sentence for all U.S. federal, state, and local income and franchise tax purposes (including, without limitation, on any and all filings with any U.S. Federal, state, or local taxing authority) and agree not to take any action inconsistent with such treatment.

(h) Each party hereto hereby further agrees that it shall not challenge the characterization of (i) this Agreement as a “repurchase agreement” (except to the extent the related Transaction has a duration that renders such term inapplicable), “securities contract” and/or “master netting agreement”, (ii) each party as a “repo participant” within the meaning of the Bankruptcy Code except insofar as, in the case of a “repurchase agreement”, the term of the Transactions, would render such definition inapplicable, or (iii) Purchaser as a “financial institution” or “financial participant” within the meaning of the Bankruptcy Code.

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ARTICLE 24

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a) in the case of any Transaction in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Exchange Act, the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to such Transaction;

(b) in the case of any Transaction in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to such Transaction; and

(c) in the case of any Transactions in which one of the parties is a financial institution, funds held by the financial institution in connection with such Transaction are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

ARTICLE 25

CONSENT TO JURISDICTION; WAIVERS

(a) Each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under this Agreement or relating in any way to this Agreement or any Transaction under this Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile. The parties hereby agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) To the extent that either party has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, such party hereby irrevocably waives and agrees not to plead or claim such immunity in respect of any action brought to enforce its obligations under this Agreement or relating in any way to this Agreement or any Transaction under this Agreement.

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(c) The parties consent to the service of any summons and complaint and any other process by the mailing of copies of such process to them at their respective address specified herein. Nothing in this Article 25 shall affect the right of either party to serve legal process in any other manner permitted by law or affect the right of either party to bring any enforcement action or proceeding against the other party or its property located in other jurisdictions in the courts of such other jurisdictions to the extent required by the laws of such other jurisdictions.

(d) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

ARTICLE 26

NO RELIANCE

Each Seller and Purchaser hereby acknowledges, represents and warrants to the other that, in connection with the negotiation of, the entering into, and the performance under, the Transaction Documents and each Transaction thereunder:

(a) it is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the other party to the Transaction Documents, other than the representations expressly set forth in the Transaction Documents;

(b) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and it has made its own investment, hedging and trading decisions (including decisions regarding the suitability of any Transaction) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the other party;

(c) it is a sophisticated and informed Person that has a full understanding of all the terms, conditions and risks (economic and otherwise) of the Transaction Documents and each Transaction thereunder and is capable of assuming and willing to assume (financially and otherwise) those risks;

(d) it is entering into the Transaction Documents and each Transaction thereunder for the purposes of managing its borrowings or investments or hedging its assets or liabilities and not for purposes of speculation;

(e) no joint venture exists between Purchaser and any Seller Party pursuant to any Transaction Document; and

(f) it is not acting as a fiduciary or financial, investment or commodity trading advisor for the other party and has not given the other party (directly or indirectly through any other Person) any assurance, guarantee or representation whatsoever as to the merits (either legal, regulatory, tax, business, investment, financial accounting or otherwise) of the Transaction Documents or any Transaction thereunder.

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ARTICLE 27

INDEMNITY AND EXPENSES

(a) Sellers hereby agree to indemnify Purchaser, Purchaser’s Affiliates and each of its and their officers, directors, employees and agents (“Indemnified Parties”) for, and hold harmless from, any and all actual out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including, without limitation, the reasonable out-of-pocket fees and expenses of outside counsel), Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under Article 5) or disbursements (all of the foregoing, collectively “Indemnified Amounts”) that may at any time (including, without limitation, such time as this Agreement shall no longer be in effect and the Transactions shall have been repaid in full) be imposed on or asserted against any Indemnified Party in any way whatsoever arising out of or in connection with, or relating to, or as a result of, this Agreement, the other Transaction Documents, any Transactions, any Event of Default or any action taken or omitted to be taken by any Indemnified Party under or in connection with any of the foregoing, and any enforcement of any of the provisions of the Transaction Documents; provided that no Seller shall be liable for Indemnified Amounts resulting from the gross negligence or willful misconduct of any Indemnified Party. Without limiting the generality of the foregoing, each Seller agrees to hold Purchaser harmless from and indemnify Purchaser against all Indemnified Amounts with respect to all Purchased Assets relating to or arising out of any violation or alleged violation of any environmental law, rule or regulation or any consumer credit laws, including without limitation ERISA, the Truth in Lending Act and/or the Real Estate Settlement Procedures Act in each case, which does not result from the gross negligence or willful misconduct of any Indemnified Party. In any suit, proceeding or action brought by Purchaser in connection with any Purchased Asset for any sum owing thereunder, or to enforce any provisions of any Purchased Asset, each Seller agrees to hold Purchaser harmless from and indemnify Purchaser from and against all Indemnified Amounts suffered by Purchaser by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by any Seller Party or any Affiliate thereof party to the Transaction Documents of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from any Seller Party or any Affiliate thereof party to the Transaction Documents. The obligation of each Seller hereunder is a recourse obligation of such Seller. This Article 27(a) shall (other than in respect of Indemnified Taxes) not apply with respect to taxes other than any taxes that represent losses, claims, damages, etc. arising from any non-tax claim.

(b) Sellers agree to pay or reimburse upon written demand all of Purchaser’s actual out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of outside counsel) incurred in connection with (i) the preparation, negotiation, execution and consummation of, and any amendment, supplement or modification to, any Transaction Document or any Transaction thereunder, whether or not such Transaction Document (or amendment thereto) or such Transaction is ultimately consummated (provided that the related Seller shall not be required to reimburse Purchaser for any such costs and expenses related to

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Pre-Purchase Due Diligence in a respect of any Transaction or proposed Transaction which is not ultimately consummated, in each case other than the applicable Pre-Purchase Legal/Due Diligence Review Fee), (ii) the consummation and administration of any Transaction, (iii) any preservation of the Purchaser’s rights under the Transaction Documents, (iv) any performance by Purchaser of any obligations of any Seller in respect of any Purchased Asset, (v) if any Event of Default has occurred and is continuing any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Collateral, (vi) the custody, care or preservation of the Collateral (including insurance, filing and recording costs) and defending or asserting rights and claims of Purchaser in respect thereof, by litigation or otherwise, (vii) the maintenance of the Collection Accounts and registering the Collateral in the name of Purchaser or its nominee, (viii) any default by any Seller in repurchasing the Purchased Asset after such Seller has given a notice in accordance with Article 3(e) of an Early Repurchase Date, (ix) any failure by any Seller to sell any Eligible Asset to Purchaser on the Purchase Date thereof, (x) any actions taken and which are reasonably necessary to perfect or continue any lien created under any Transaction Document, (xi) Purchaser owning any Purchased Asset or other Purchased Item and/or (xii) in accordance with Section 28(e), any due diligence performed by Purchaser pursuant to Article 28. All such expenses shall be recourse obligations of Sellers to Purchaser under this Agreement. A certificate as to such costs and expenses, setting forth the calculations thereof shall be conclusive and binding upon Sellers absent manifest error.

(c) This Article 27 shall survive termination of this Agreement and the repurchase of all Purchased Assets.

ARTICLE 28

DUE DILIGENCE

(a) Each Seller acknowledges that Purchaser has the right to perform continuing due diligence reviews with respect to the Purchased Assets (including obtaining updated or new appraisals not to exceed one appraisal per year for any Mortgaged Property so long as the related loan is not a Defaulted Asset), the Borrowers (including any other obligors), the Seller Parties and Servicer for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise. Each Seller agrees that upon reasonable prior notice (unless an Event of Default has occurred and is continuing, in which case no prior notice shall be required), such Seller shall provide (or shall cause any other Seller Party or Servicer, as applicable, to provide) reasonable access to Purchaser and any of its agents, representatives or permitted assigns to the offices of such Seller, such other Seller Party or Servicer, as the case may be, during normal business hours and permit them to examine, inspect, and make copies and extracts of the Purchased Asset Files, Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession or under the control of such party.

(b) Each Seller agrees that it shall, promptly upon reasonable request of Purchaser, deliver (or shall cause to be delivered) to Purchaser and any of its agents, representatives or permitted assigns copies of any documents permitted to be reviewed by Purchaser in accordance with Article 28(a).

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(c) Each Seller agrees to make available (or to cause any other Seller Party or Servicer, as applicable, to make available) to Purchaser and any of its agents, representatives or permitted assigns (i) in person at the time of any inspection pursuant to Article 28(a) or (ii) upon reasonable prior written notice (unless an Event of Default has occurred and is continuing, in which case no prior notice shall be required and there shall be no limitation on frequency), by phone, as applicable, a knowledgeable financial or accounting officer or asset manager, as applicable, of such Seller, such other Seller Party or Servicer, as the case may be, for the purpose of answering questions about any of the foregoing Persons, or any other matters relating to the Transaction Documents or any Transaction that Purchaser wishes to discuss with such Person.

(d) Without limiting the generality of the foregoing, each Seller acknowledges that Purchaser may enter into Transactions with any Seller based solely upon the information provided by such Seller to Purchaser and the representations, warranties and covenants contained herein, and that Purchaser, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets. Purchaser may underwrite such Purchased Assets itself or engage a third-party underwriter to perform such underwriting. Each Seller agrees to reasonably cooperate with Purchaser and any third party underwriter designated by Purchaser in writing in connection with such underwriting, including, but not limited to, providing Purchaser and such third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of such Seller reasonably requested by Purchaser in writing.

(e) Each Seller agrees to reimburse Purchaser within ten (10) Business Days after receipt of an invoice therefor for any and all reasonable out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of outside counsel) incurred by Purchaser in connection with its continuing due diligence activities pursuant to this Article 28.

ARTICLE 29

SERVICING

(a) The parties hereto agree and acknowledge that the Purchased Assets are sold to Purchaser on a “servicing released” basis and Purchaser is owner of all Servicing Rights so long as the Purchased Assets are subject to this Agreement. Notwithstanding the foregoing, while no Event of Default exists, each Seller shall be granted a revocable license (which license shall automatically be revoked (i) every thirty (30) days unless Purchaser provides written notice to such Seller that such license is extended for another thirty (30) days (provided, however, that if Purchaser fails to deliver any such notice of renewal, then upon notice from such Seller of such failure, Purchaser shall provide notice to such Seller and Servicer of Purchaser’s election to extend such thirty (30) day period or not extend such thirty (30) day period and, if such notice of election to extend is provided by Purchaser after the expiration of the immediately preceding thirty (30) day period, such extension shall apply retroactively for the period beginning on the last day of such preceding thirty (30) day period through and including the date such notice of election to extend is provided by Purchaser), it being acknowledged that Purchaser intends to include such written notice in a Purchase Price Differential statement with respect to the Pricing Rate Period (provided, however, that Purchaser shall have no obligation to provide such written notice in the aforesaid manner)) or (ii) upon the occurrence of an Event of Default) to cause

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Servicer to service the Purchased Assets sold by such Seller, and such Seller shall, at such Seller’s sole cost and expense, cause the Servicer to service the Purchased Assets in accordance with the Servicing Agreement and this Article 29 and for the benefit of Purchaser; provided, however, that while an Event of Default exists, the related Seller’s license to cause Servicer to service the Purchased Assets shall be revoked. Notwithstanding the foregoing, no Seller shall take any action or effect any Material Modification without first having given prior notice thereof to Purchaser in each such instance and receiving the prior written consent of Purchaser.

(b) The obligation of Servicer (or of the applicable Seller to cause Servicer) to service any of the Purchased Assets shall cease, at Purchaser’s option, upon the earliest of (i) Purchaser’s termination of Servicer in accordance with Article 29(c), (ii) Purchaser not extending the related Seller’s revocable license in accordance with Article 29(a) or (iii) the transfer of servicing to any other Servicer and the assumption of such servicing by such other Servicer in accordance with the terms of this Agreement. Each Seller agrees to reasonably cooperate with Purchaser in connection with any termination of Servicer. Upon any termination of Servicer, if no Event of Default shall have occurred and be continuing, Sellers shall at their sole cost and expense transfer the servicing of the effected Purchased Assets to another Servicer approved by Purchaser in its reasonable discretion.

(c) Purchaser may, in its sole and absolute discretion, terminate Servicer or any sub-servicer with respect to any Purchased Asset (i) upon the occurrence of a default by the Servicer under the Servicing Agreement or (ii) during the continuance of an Event of Default, either for cause or without cause, in each case, without payment of any penalty or termination fee.

(d) Sellers shall not, and shall not permit Servicer to, employ any other sub-servicers to service the Purchased Assets without the prior written approval of Purchaser. If the Purchased Assets are serviced by a sub-servicer, the related Seller shall irrevocably assign all rights, title and interest (if any) in the servicing agreements with such sub-servicer to Purchaser; provided that Servicer may delegate certain non-cashiering administrative functions to third parties without Purchaser’s consent provided that Servicer at all times remains liable for such functions.

(e) Each Seller shall cause Servicer and any sub-servicer to service the Purchased Assets pursuant to the Servicing Agreement and any other applicable servicing agreement, as the case may be, in each case in accordance with Accepted Servicing Practices. With respect to each Purchased Asset, the applicable Seller shall, within one (1) Business Day following the related Purchase Date, deliver to each Borrower, issuer of a Participation Interest and servicer (including the Servicer pursuant to the Servicing Agreement) of a Purchased Asset an irrevocable redirection letter in the form attached as Exhibit XI hereto (a “Redirection Letter”) acknowledging Purchaser’s security interest in the Purchased Assets and instructing the Borrower, issuer or servicer, as applicable, to remit all Income received with respect to the Purchased Asset to the applicable Collection Account in accordance with Article 5(e) or as otherwise directed by Purchaser in accordance with the Redirection Letter. If a Borrower, issuer, servicer or other obligor forwards any Income with respect to a Purchased Asset to any Seller or to any of its Affiliates rather than directly to the applicable Collection Account, such Seller shall deliver an additional Redirection Letter to such Person, with a simultaneous copy to the Servicer and the Purchaser, and make other commercially reasonable efforts to cause such Person to forward such amounts directly to the applicable Collection Account.

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(f) Each Seller agrees that, upon Purchaser’s purchase of each Purchased Asset, Purchaser is the owner of all servicing records related to the Purchased Assets, including but not limited to the Servicing Agreement, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of Purchased Assets (the “Servicing Records”) so long as the Purchased Assets are subject to this Agreement. Each Seller covenants to (or use commercially reasonable efforts to cause Servicer to) safeguard such Servicing Records and to deliver them promptly to Purchaser or its designee (including the Custodian) at Purchaser’s request.

(g) The payment of servicing fees shall be solely the responsibility of Sellers and shall be subordinate to payment of amounts outstanding and due to Purchaser under the Transaction Documents (except as expressly set forth in the Transaction Documents).

ARTICLE 30

ACKNOWLEDGMENT AND CONSENT TO BAIL-IN

(a) Contractual Recognition of Bail-in.

(i) Each party acknowledges and accepts that liabilities arising under this Agreement (other than Excluded Liabilities) may be subject to the exercise of the UK Bail-in Power by the relevant resolution authority and acknowledges and accepts to be bound by any Bail-in Action and the effects thereof (including any variation, modification and/or amendment to the terms of this Agreement as may be necessary to give effect to any such Bail-in Action), which if the Bail-in Termination Amount is payable by Purchaser to any Seller may include, without limitation:

(A) a reduction, in full or in part, of the Bail-in Termination Amount; and/or

(B) a conversion of all, or a portion of, the Bail-in Termination Amount into shares or other instruments of ownership, in which case such Seller acknowledges and accepts that any such shares or other instruments of ownership may be issued to or conferred upon it as a result of the Bail-in Action.

(ii) Each party acknowledges and accepts that this provision is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understanding between the parties relating to the subject matter of this Agreement and that no further notice shall be required between the parties pursuant to the Agreement in to order to give effect to the matters described herein.

(iii) The acknowledgements and acceptances contained in clauses (i) and (ii) above will not apply if:

(A) the relevant resolution authority determines that the liabilities arising under this Agreement may be subject to the exercise of the UK Bail-in Power pursuant to the law of the third country governing such liabilities or a binding agreement concluded with such third country and in either case the UK Regulations have been amended to reflect such determination; and/or

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(B) the UK Regulations have been repealed or amended in such a way as to remove the requirement for the acknowledgements and acceptances contained in clauses (i) and (ii).

(iv) For purposes of this Article 30:

“Bail-in Action” means the exercise of the UK Bail-in Power by the relevant resolution authority in respect of all transactions (or all transactions relating to one or more netting sets, as applicable) under this Agreement.

“Bail-in Termination Amount” means the early termination amount or early termination amounts (howsoever described), together with any accrued but unpaid interest thereon, in respect of all transactions (or all transactions relating to one or more netting sets, as applicable) under this Agreement (before, for the avoidance of doubt, any such amount is written down or converted by the relevant resolution authority).

“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.

“Excluded Liabilities” means liabilities excluded from the scope of the contractual recognition of bail-in requirement pursuant to the UK Regulations.

“UK Bail-in Power” means any write-down or conversion power existing from time to time (including, without limitation, any power to amend or alter the maturity of eligible liabilities of an institution under resolution or amend the amount of interest payable under such eligible liabilities or the date on which interest becomes payable, including by suspending payment for a temporary period) under, and exercised in compliance with, any laws, regulations, rules or requirements (together, the “UK Regulations”) in effect in the United Kingdom relating to the transposition of the BRRD as amended from time to time, including but not limited to, the Banking Act 2009 as amended from time to time, and the instruments, rules and standards created thereunder, pursuant to which the obligations of a regulated entity (or other affiliate of a regulated entity) can be reduced (including to zero), cancelled or converted into shares, other securities, or other obligations of such regulated entity or any other person.

A reference to a “regulated entity” is to any BRRD undertaking as such term is defined under the PRA Rulebook promulgated by the United Kingdom Prudential Regulation Authority or to any person falling within IFPRU 11.6, of the FCA Handbook promulgated by the United Kingdom Financial Conduct Authority (“FCA”), both as amended from time to time, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.

(b) Contractual Recognition of UK Stay in Resolution. Where a resolution measure is taken in relation to any BRRD undertaking or any member of the same group as that BRRD undertaking and that BRRD undertaking or any member of the same group as that BRRD undertaking is a party to this Agreement (any such party to this Agreement being an “Affected Party”), each other party to this Agreement agrees that it shall only be entitled to exercise any termination rights under or rights to enforce a security interest in connection with this Agreement against the Affected Party to the extent that it would be entitled to do so under the Special Resolution Regime if this Agreement were governed by the laws of any part of the United Kingdom.

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For the purpose of this clause, “resolution measure” means a ‘crisis prevention measure’, ‘crisis management measure’ or ‘recognised third-country resolution action’, each with the meaning given in the “PRA Rulebook: CRR Firms and Non-Authorised Persons: Stay in Resolution Instrument 2015”, as may be amended from time to time (the “PRA Contractual Stay Rules”), provided, however, that ‘crisis prevention measure’ shall be interpreted in the manner outlined in Rule 2.3 of the PRA Contractual Stay Rules; “BRRD undertaking”, “group”, “Special Resolution Regime” and “termination right” have the respective meanings given in the PRA Contractual Stay Rules.

(c) Notice Regarding Client Money Rules. Purchaser, as a CRD credit institution (as such term is defined in the rules of the FCA), holds all money received and held by it hereunder as banker and not as trustee. Accordingly, money that is received and held by Purchaser from a Seller Party will not be held in accordance with the provisions of the FCA’s Client Asset Sourcebook relating to client money (the “Client Money Rules”) and will not be subject to the statutory trust provided for under the Client Money Rules. In particular, Purchaser shall not segregate money received by it from a Seller Party from Purchaser money and Purchaser shall not be liable to account to a Seller Party for any profits made by Purchaser use as banker of such cash and upon failure of Purchaser, the client money distribution rules within the Client Asset Sourcebook (the “Client Money Distribution Rules”) will not apply to these sums and so a Seller Party will not be entitled to share in any distribution under the Client Money Distribution Rules.

ARTICLE 31

MISCELLANEOUS

(a) All rights, remedies and powers of Purchaser hereunder and in connection herewith are irrevocable and cumulative, and not alternative or exclusive, and shall be in addition to all other rights, remedies and powers of Purchaser whether under law, equity or agreement. In addition to the rights and remedies granted to it in this Agreement, to the extent this Agreement is determined to create a security interest, Purchaser shall have all rights and remedies of a secured party under the UCC or, with respect to Foreign Purchased Assets, the equivalent Requirements of Law in the relevant non-U.S. jurisdiction, as applicable.

(b) The Transaction Documents may be executed in counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Signature pages to any Transaction Document or certification delivered pursuant thereto delivered in electronic form (such as PDF) shall be considered binding with the same force and effect as original signatures.

(c) The headings in the Transaction Documents are for convenience of reference only and shall not affect the interpretation or construction of the Transaction Documents.

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(d) Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or be invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(e) This Agreement, the Fee Letter and each Confirmation contain a final and complete integration of all prior expressions by the parties with respect to the subject matter hereof and thereof and shall constitute the entire agreement among the parties with respect to such subject matter, superseding all prior oral or written understandings.

(f) The parties understand that this Agreement is a legally binding agreement that may affect such party’s rights. Each party represents to the other that it has received legal advice from counsel of its choice regarding the meaning and legal significance of this Agreement and that it is satisfied with its legal counsel and the advice received from it.

(g) Should any provision of this Agreement require judicial interpretation, it is agreed that a court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any Person by reason of the rule of construction that a document is to be construed more strictly against the Person who itself or through its agent prepared the same, it being agreed that all parties have participated in the preparation of this Agreement.

(h) Unless otherwise specifically enumerated, wherever pursuant to this Agreement Purchaser exercises any right given to it to consent or not consent, or to approve or disapprove, or any arrangement or term is to be satisfactory to, Purchaser in its sole and absolute discretion, Purchaser shall decide to consent or not consent, or to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory, in its sole and absolute discretion and such decision by Purchaser shall be final and conclusive.

ARTICLE 32

TAXES

(a) Status of Purchaser.

(i) If Purchaser is entitled to an exemption from or reduction of withholding tax with respect to payments made under the Transaction Documents, Purchaser shall deliver to Sellers, prior to becoming a party to this Agreement, and at the time or times reasonably requested by any Seller, such properly completed and executed documentation reasonably requested by such Seller as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Purchaser, if reasonably requested by any Seller, shall deliver such other documentation prescribed by applicable law or reasonably requested by such Seller as will enable such Seller to determine whether or not Purchaser is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in this Article 32(a)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Purchaser’s reasonable judgment such completion, execution or submission would subject such Purchaser to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Purchaser.

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(ii) Without limiting the generality of the foregoing,

(A) if Purchaser is a U.S. Person, it shall deliver to Sellers on or prior to the date on which Purchaser becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of any Seller), executed copies or originals of IRS Form W-9 (or any successor form) certifying that Purchaser is exempt from U.S. federal backup withholding tax;

(B) if the Purchaser is not a U.S. Person, it shall, to the extent it is legally entitled to do so, deliver to Sellers (in such number of copies as shall be requested by any Seller) on or prior to the date on which Purchaser becomes a party under this Agreement, whichever of the following is applicable:

(1) in the case of a Purchaser that is claiming the benefits of an income tax treaty to which the United States is a party, (x) with respect to payments characterized as interest for U.S. tax purposes under any Transaction Document, executed copies or originals of IRS Form W-8BEN or W-8BEN-E (or any successor forms thereof, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies or originals of IRS Form W-8ECI (or any successor form thereof);

(3) in the case of a Purchaser claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate to the effect that such Purchaser is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of any Seller as described in Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” related to any Seller described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies or originals of IRS Form W-8BEN or W-8BEN-E (or any successor form thereof); or

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(4) to the extent a Purchaser is not the beneficial owner, executed copies or originals of IRS Form W-8IMY (or any successor form thereof), accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W- 8BEN-E (or any successor forms thereof, as applicable), a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Purchaser is a partnership and one or more direct or indirect partners of such Purchaser are claiming the portfolio interest exemption, such Purchaser may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;

(C) if Purchaser is not a U.S. Person, it shall, to the extent it is legally entitled to do so, deliver to Sellers (in such number of copies as shall be requested by any Seller) on or prior to the date on which Purchaser becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of any Seller), executed copies or originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Sellers to determine the withholding or deduction required to be made; and

(D) if a payment made to Purchaser under any Transaction Document would be subject to U.S. federal withholding tax imposed by FATCA if Purchaser were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), Purchaser shall deliver to Sellers at the time or times prescribed by law and at such time or times reasonably requested by any Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by such Seller as may be necessary for such Seller to comply with its obligations under FATCA and to determine that Purchaser has complied with Purchaser’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Purchaser agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification and provide such successor form to Sellers, or promptly notify Sellers in writing of its legal inability to do so.

(b) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any taxes as to which it has been indemnified pursuant to this Agreement (including by the payment of additional amounts pursuant to this Agreement), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Agreement with respect to the taxes giving rise to such refund), net of all out of pocket costs and expenses (including taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Agreement (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such

87

indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Agreement, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Agreement the payment of which would place the indemnified party in a less favorable net after tax position than the indemnified party would have been in if the tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the indemnifying party or any other Person.

(c) Taxes and Foreign Purchased Assets.

(i) Purchaser, on the one hand, and each of the Sellers (as relevant), on the other hand, each confirm that it will take all steps (including without limitation the completion of procedural formalities) reasonably required by the other such that payments by the obligors in respect of the Foreign Purchased Assets can be made without deduction or withholding for or on account of tax so far as legally permissible.

(ii) Purchaser agrees that, so long as no Event of Default has occurred and is continuing, it will promptly notify the applicable Seller if Purchaser assigns or otherwise transfers any interest in any Foreign Purchased Asset where an individual holding the title of Managing Director or higher within the group at Purchaser that covers this Agreement has actual knowledge that to do so would or is likely to result in any increased deduction or withholding for or on account of tax from amounts payable by the obligors in respect of such Foreign Purchased Asset.

(d) Survival. Each party’s obligations under this Article 32 shall survive any assignment of rights by Purchaser, the termination of the Transactions and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

ARTICLE 33

JOINT AND SEVERAL LIABILITY

(a) Each Seller hereby acknowledges and agrees that (i) each Seller shall be jointly and severally liable to Purchaser to the maximum extent permitted by Requirements of Law for all Repurchase Obligations, (ii) the liability of each Seller with respect to the Repurchase Obligations (A) shall be absolute and unconditional to the extent set forth in this Agreement and the other Transaction Documents and shall remain in full force and effect, and be reinstated, until all Repurchase Obligations shall have been paid, performed and/or satisfied, as applicable, in full, and (B) until such payment, performance and/or satisfaction, as applicable, has occurred, shall not be discharged, affected, modified or impaired on the occurrence from time to time of any event, including any of the following, whether or not with notice to or the consent of any Seller, (1) the waiver, compromise, settlement, release, termination or amendment (including any extension or postponement of the time for payment, performance, satisfaction, renewal or refinancing) of any of the Repurchase Obligations (other than a waiver, compromise, settlement,

88

release or termination in full of the Repurchase Obligations), (2) the failure to give notice to any Seller of the occurrence of any nonpayment or other default, (3) the failure to make any demand for payment of any amounts owing to Purchaser by any other Seller, (4) the release, substitution or exchange by Purchaser of any Purchased Asset (whether with or without consideration) or the acceptance by Purchaser of any additional collateral or the availability or claimed availability of any other collateral or source of repayment or any non-perfection or other impairment of collateral, (5) the release of any Person primarily or secondarily liable for all or any part of the Repurchase Obligations, whether by Purchaser or in connection with any Act of Insolvency affecting any Seller or any other Person who, or any of whose property, shall at the time in question be obligated in respect of the Repurchase Obligations or any part thereof, or (6) to the extent permitted by Requirements of Law, any other event, occurrence, action or circumstance that would, in the absence of this Article 33, result in the release or discharge of any or all Sellers from the performance or observance of any Repurchase Obligation, (iii) Purchaser shall not be required first to initiate any suit or to exhaust its remedies against any Seller or any other Person to become liable, or against any of the Purchased Assets, in order to enforce the Transaction Documents and each Seller expressly agrees that, notwithstanding the occurrence of any of the foregoing, each Seller shall be and remain directly and primarily liable for all sums due under any of the Transaction Documents, (iv) when making any demand hereunder against any Seller, Purchaser may, but shall be under no obligation to, make a similar demand on any other Seller, and any failure by Purchaser to make any such demand or to collect any payments from any other Seller, or any release of any such other Seller shall not relieve any Seller in a respect of which a demand or collection is not made or Sellers not so released of their obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Purchaser against Sellers, and (v) on disposition by Purchaser of any Purchased Asset, each Seller shall be and shall remain jointly and severally liable for any deficiency to the extent set forth in this Agreement and the other Transaction Documents.

(b) In furtherance of the foregoing, each Seller waives (i) any and all notices of the creation, renewal, extension or accrual of any amounts at any time owing to Purchaser by any other Seller under the Transaction Documents, (ii) any and all notices of or proof of reliance by Purchaser upon any Seller or acceptance of the obligations of any Seller under this Article 33, and all such amounts, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the obligations of Sellers under this Article 33, (iii) diligence, presentment, protest, demand for payment and notice of nonpayment or other default to or upon any Seller with respect to any amounts at any time owing to Purchaser by any Seller under the Transaction Documents, other than such notices as are expressly required to be given under this Agreement or any of the other Transaction Documents.

(c) To the extent any Seller (a “Paying Seller”) shall have paid more than its proportionate share of any payment made hereunder, such Paying Seller hereby waives (i) any right to subrogation or set-off that it may acquire on account of such payment against any other Seller or any collateral security or guarantee and (ii) the right to seek contribution or reimbursement from any other Seller in respect such payment, in each case, until all Repurchase Obligations are paid in full. If any amount shall be paid to any Paying Seller on account of such subrogation rights at any time when any Repurchase Obligations are outstanding, amount shall be held by Paying Seller in trust for Purchaser, segregated from other funds of Paying Seller, and shall, forthwith upon receipt by Paying Seller, be turned over to Purchaser in the exact form received by Paying Seller (duly indorsed by the Paying Seller to Purchaser, if required), to be applied against amounts owing to Purchaser by Sellers under the Transaction Documents, whether matured or unmatured, in such order as Purchaser may determine.

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(d) With respect to any matter under the Transaction Documents for which (i) any consent or approval of Seller is required, (ii) any notice to, or from, Seller is required or (iii) any other undertaking is made by Seller, unless otherwise specified with respect to such consent, approval, notice or undertaking , such action by (or notice to) any Seller shall be sufficient for all such purpose.

[REMAINDER OF PAGE LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Agreement as a deed as of the day first written above.

BARCLAYS BANK PLC, as Purchaser
By:	/s/ Francis X. Gilhool
	Name: Francis X. Gilhool
	Title: Managing Director

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

[Barclays-BXMT – A&R Master Repurchase Agreement]

PARLEX 3A FINCO, LLC, as US Seller
By:	/s/ Douglas N. Armer
	Name: Douglas N. Armer
	Title: Executed Vice President, Capital Markets and Treasurer
PARLEX 3A UK FINCO, LLC, as UK Seller
By:	/s/ Douglas N. Armer
	Name: Douglas N. Armer
	Title: Executive Vice President, Capital Markets and Treasurer
PARLEX 3A EUR FINCO, LLC, as EUR Seller
By:	/s/ Douglas N. Armer
	Name: Douglas N. Armer
	Title: Executive Vice President, Capital Markets and Treasurer

[Signature Page to A&R Master Repurchase Agreement]

ANNEX I

WIRE INSTRUCTIONS

Payments to US Seller:

Bank:	Bank of America
ABA#:	026009593
Account#:	483024227101
Account Name:	Blackstone Mortgage Trust, Inc.
Contact:	Thomas Brandlein, (646) 482-3175
Payments to UK Seller:
Bank:	Bank of America
Account#:	22096011
Bank Sort Code #:	165050
IBAN#:	GB69 BOFA 1650 5022 0960 11
Bank SWIFT ID #:	BOFAGB22
Account Name:	Ambassador GBP Holdings, LLC for the benefit of Parlex 3A UK Finco, LLC
Contact:	Thomas Brandlein, (646) 482-3175
Payments to EUR Seller:
Bank:	Bank of America
IBAN#:	GB77 BOFA 1650 5022 0780 19
Bank SWIFT ID #:	BOFAGB22
Account Name:	Ambassador EUR Holdings, LLC for the benefit of Parlex 3A EUR Finco, LLC
Contact:	Thomas Brandlein, (646) 482-3175

Annex. I-1

EXHIBIT I

NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES

Purchaser:	Barclays Bank PLC
	745 7th Avenue
	New York, New York 10019
	Attention: Francis X. Gilhool, Jr.
	Telephone: (212) 526-6970
	Email: francis.gilhool@barclayscapital.com
with copies to:	Dechert LLP
	Cira Centre
	2929 Arch Street
	Philadelphia, PA 19104
	Attention: David W. Forti
	Telephone: (215) 994 2647
	Email: david.forti@dechert.com
Sellers:	Parlex 3A Finco, LLC
	Parlex 3A UK Finco, LLC
	Parlex 3A EUR Finco, LLC
	c/o Blackstone Mortgage Trust, Inc.
	345 Park Avenue, 42nd Floor
	New York, New York 10154
	Attention: Douglas Armer
	Telephone: (212) 583-5000
	Email: BXMTBarclaysFacility@blackstone.com
with copies to:	Ropes & Gray LLP
	1211 Avenue of the Americas
	New York, NY 10036-8704
	Attn: Daniel L. Stanco
	Tel: (212) 841-5758
	Email: Daniel.Stanco@ropesgray.com
Guarantor:	Blackstone Mortgage Trust, Inc.
	c/o Blackstone Mortgage Trust, Inc.
	345 Park Avenue, 42nd Floor
	New York, New York 10154
	Attention: Douglas Armer
	Telephone: (212) 583-5000
	Email: BXMTBarclaysFacility@blackstone.com

Exhibit I-1

with copies to:	Ropes & Gray LLP
	1211 Avenue of the Americas
	New York, NY 10036-8704
	Attn: Daniel L. Stanco
	Tel: (212) 841-5758
	Email: Daniel.Stanco@ropesgray.com

Ex. I-2

EXHIBIT II

FORM OF CONFIRMATION STATEMENT

[Date]

To: Barclays Bank PLC

Ladies and Gentlemen:

Reference is made hereby to the Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as further amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Agreement”) by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”). This Confirmation is being delivered by [US][UK][EUR] Seller to evidence its agreement to enter into a Transaction pursuant to which (i) Purchaser will purchase from Seller the Eligible Asset identified on the attached Schedule 1 and (ii) Seller will repurchase the Eligible Asset identified on the attached Schedule 1. Purchaser’s delivery of an executed counterpart of this Confirmation to Seller evidences Purchaser’s agreement, subject to and in accordance with the Agreement, to enter into such Transaction with Seller. Capitalized terms used herein without definition have the meanings given in the Agreement.

Purchase Date:	__________, 20__
Purchased Asset(s):	___________________, as further identified on Schedule 1
Asset Type:	[Mortgage Loan][Mortgage Loan and Mezzanine Loan]1[Senior Note][Senior Participation Interest]
Outstanding Principal Amount of Purchased
Asset as of Purchase Date:	As set forth on attached Schedule 1
Available Future Advances under Purchased
Asset as of Purchase Date:	As set forth on attached Schedule 1
Approved Future Advances:	[$][€][£]__________
Additional Approved Future
Advance Conditions:	[Specify any additional conditions required by Purchaser]
Repurchase Date:	__________, 20__
Repurchase Price:	As provided in the Agreement

¹ Unless otherwise specified, with respect to any Asset Combination, any reference to Eligible Asset or Purchased Asset shall include the applicable Mezzanine Related Asset and the Mezzanine Asset that is, or is proposed to be, subject to the same Transaction.

Ex. II-1

Market Value:	[$][€][£]__________
Applicable Index:	[LIBOR][EURIBOR][___________]
Spread of Purchased Asset2:	__________% over [LIBOR][EURIBOR][___________]
Applicable Currency:	[$][€][£]
Purchase Date Spot Rate:	[NAP][__________%]3
Purchase Price Percentage:	__________%
Maximum Purchase Price:	[$][€][£]__________
Purchase Price:	[$][€][£]__________ (see attached Schedule 2)
Pricing Rate:	As defined in the Agreement
Governing Agreements:	As identified on attached Schedule 1
Representations and Warranties:	[Exhibit V-A to the Agreement][Exhibit V-B to the Agreement][Attached as Schedule 2]4
Requested Wire Amount:	[$][€][£]__________
Type of Funding:	[Wet][Dry] Funding
Wiring Instructions	As identified on attached Schedule 3
Name and address for communications:	Purchaser:
	Barclays Bank PLC
	745 7th Avenue
	New York, New York 10019
	Attention: Francis X. Gilhool, Jr.
	Telephone: (212) 526-6970
	Email: francis.gilhool@barclayscapital.com

² For the avoidance of doubt, this represents the spread of the Purchased Asset as specified in the related Purchased Asset Documents.

³ To be included for Foreign Purchased Asset.

⁴ In the case of (x) a U.S. Purchased Asset, Exhibit V-A, (y) a Foreign Purchased Asset (GBP), Exhibit V-B or (z) any other Foreign Purchased Asset, attach Schedule 2.

Ex. II-2

with copies to:	Dechert LLP
	Cira Centre
	2929 Arch Street
	Philadelphia, PA 19104
	Attention: David W. Forti
	Telephone: (215) 994 2647
	Email: david.forti@dechert.com
	Seller:
	[Parlex 3A Finco, LLC]
	[Parlex 3A UK Finco, LLC]
	[Parlex 3A EUR Finco, LLC]
	c/o Blackstone Mortgage Trust, Inc.
	345 Park Avenue, 42nd Floor
	New York, New York 10154
	Attention: Douglas Armer
	Telephone: (212) 583-5000
	Email: BXMTBarclaysFacility@blackstone.com
with copies to:	Ropes & Gray LLP
	1211 Avenue of the Americas
	New York, NY 10036-8704
	Attn: Daniel L. Stanco
	Tel: (212) 841-5758
	Email: Daniel.Stanco@ropesgray.com

To evidence your agreement to enter into the Transaction in accordance with the terms set forth in this Confirmation, please return a countersigned copy of this Confirmation to Seller.

[PARLEX 3A FINCO, LLC][ PARLEX 3A UK FINCO, LLC][PARLEX 3A EUR FINCO, LLC]
By:
	Name:
	Title:

Ex. II-3

	[By:
		Name:
		Title:]5
AGREED AND ACKNOWLEDGED:
BARCLAYS BANK PLC

By:
	Name:
	Title:

⁵ If wire instructions are to an account other than Seller’s account as set forth on Annex I to the Agreement, the Confirmation must be signed by two (2) Responsible Officers of Seller.

Ex. II-4

Schedule 1 to Confirmation

Purchased Asset Schedule

Purchased Asset(s): [            ]

Outstanding Principal Amount of Purchased

Asset as of Purchase Date: [            ]

Available Future Advances under Purchased

Asset as of Purchase Date: [            ]

Ex. II-5

Schedule 2 to Confirmation

Transaction Activity Log

Ex. II-6

Schedule 3 to Confirmation

Wiring Instructions

Bank Name: _____________________

ABA #: _____________________

Account Number: _____________________

Reference: _____________________

Ex. II-7

EXHIBIT III

AUTHORIZED REPRESENTATIVES OF SELLERS

PARLEX 3A FINCO, LLC

Name	Specimen Signature
Douglas N. Armer	/s/ Douglas N. Armer

PARLEX 3A UK FINCO, LLC

Name	Specimen Signature
Douglas N. Armer	/s/ Douglas N. Armer

PARLEX 3A EUR FINCO, LLC

Name	Specimen Signature
Douglas N. Armer	/s/ Douglas N. Armer

[Signature Page to A&R Master Repurchase Agreement (Exhibit III)]

EXHIBIT IV-A

FORM OF POWER OF ATTORNEY (U.S. PURCHASED ASSETS)

Know All Men by These Presents, that Parlex 3A Finco, LLC, a Delaware limited liability company (“Seller”), does hereby appoint Barclays Bank PLC (“Purchaser”), its attorney-in-fact to act in Seller’s name, place and stead in any way that Seller could do with respect to (i) the completion of the endorsements of the Purchased Assets, including without limitation the Promissory Notes, Assignments of Mortgages and Participation Certificates, and any transfer documents related thereto, (ii) the recordation of the Assignments of Mortgages, (iii) the preparation and filing, in form and substance satisfactory to Purchaser, of such financing statements, continuation statements, and other uniform commercial code forms, as Purchaser may from time to time, reasonably consider necessary to create, perfect, and preserve Purchaser’s security interest in the Purchased Assets and (iv) the enforcement of Seller’s rights under the Purchased Assets purchased by Purchaser pursuant to the Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Repurchase Agreement”), by and among Purchaser, Seller, Parlex 3A UK Finco, LLC and Parlex 3A EUR Finco, LLC and to take such other steps as may be necessary or desirable to enforce Purchaser’s rights against such Purchased Assets, the related Purchased Asset Files and the Servicing Records to the extent that Seller is permitted by law to act through an agent. Capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Repurchase Agreement.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OR SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER ON ITS OWN BEHALF AND ON BEHALF OF SELLER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

THIS POWER OF ATTORNEY SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

Ex. IV-A-1

IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be executed as a deed this 30 day of March, 2018.

PARLEX 3A FINCO, LLC

By:	/s/ Douglas N. Armer
Name:	Douglas N. Armer
Title:	Managing Director, Head of Capital Markets and Treasurer

ACKNOWLEDGMENT

STATE OF New York     )

COUNTY OF New York )

On March 29, 2018, before me, Migdalia Thomas a Notary Public, personally appeared Douglas N. Armer, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that heexecuted the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of NY that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Migdalia Thomas

(Seal)

MIGDALIA THOMAS

Notary Public, State of New York

No. 01TH6291822

Qualified in Queens County

Commission Expires: 10/21/2021

Barclays-BXMT – Limited Power of Attorney from Seller

EXHIBIT IV-B

FORM OF POWER OF ATTORNEY (FOREIGN PURCHASED ASSETS (GBP))

THIS POWER OF ATTORNEY is made and given on [_____] [__], 20[__], by Parlex 3A UK Finco, LLC, a Delaware limited liability company whose registered office is at [_________] (“Seller”) in favor of Barclays Bank PLC, whose registered office is at [745 7th Avenue, New York, New York 10019] (the “Attorney” or “Purchaser”), for the purposes and on the terms hereinafter set forth.

(A) By an Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Repurchase Agreement”), Seller agreed to sell, and the Attorney agreed to purchase, the Purchased Assets on terms requiring Seller to repurchase the same on the terms set out therein

(B) In connection with the agreement of the Attorney to purchase the Purchased Assets, Seller has agreed to enter into these presents for the purposes hereinafter appearing.

NOW THIS DEED WITNESSETH and SELLER HEREBY APPOINTS the Attorney to be its true and lawful attorney in the name of Seller or otherwise, for and on behalf of Seller to do any of the following acts, deeds and things or any of them:

(a) amend, substitute pages (where applicable), complete, date and deliver to the facility agent for execution any Transfer Certificate executed by Seller,

(b) take any action (including exercising voting and/or consent rights) with respect to any participation interest,

(c) complete the preparation and filing, in form and substance satisfactory to Purchaser, of such financing statements, continuation statements, and other UCC or other forms, as Purchaser may from time to time, reasonably consider necessary to create, perfect, and preserve Purchaser’s security interest in the Purchased Assets, Repurchase Agreement,

(d) enforce Seller’s rights under the Purchased Assets purchased by Purchaser pursuant to the Repurchase Agreement,

(e) to take such other steps as may be necessary or desirable to fully and effectively transfer Seller’s rights, title and interests in the Purchased Assets to Purchaser or to enforce Purchaser’s rights against, under or with respect to such Purchased Assets and the related Asset Files and the Servicing Records or to enforce Seller’s rights under the Purchased Assets purchased by Purchaser pursuant to the Repurchase Agreement.

The Attorney shall have the power in writing under seal by an officer of the Attorney from time to time to appoint a substitute (each, a “Substitute Attorney”) who shall have the power to act on behalf of Seller (whether concurrently with or independently of the Attorney) as if that Substitute Attorney shall have been originally appointed as the Attorney by this Deed and/or to revoke any such appointment at any time without assigning any reason therefor provided the Attorney shall continue to be liable for the negligence, willful misconduct or bad faith of any such Substitute Attorney appointed by it.

Ex. IV-B-1

SELLER DECLARES THAT:

This Power of Attorney shall be irrevocable and is given as security for the interests of the Attorney under the Repurchase Agreement and will survive and not be affected by the subsequent bankruptcy or insolvency or dissolution of Seller.

Seller hereby agrees at all times hereafter to ratify and confirm whatever the Attorney or any Substitute Attorney lawfully does or purports to do in the exercise of any power conferred by this Power of Attorney.

Words and expressions defined in the Repurchase Agreement shall have the same meanings in this Power of Attorney except so far as the context otherwise requires.

This Power of Attorney is governed by and shall be construed in accordance with English law.

[SIGNATURE PAGE FOLLOWS]

Ex. IV-B-2

IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be executed as a deed this     day of                  , 20         .

PARLEX 3A UK FINCO, LLC

By:	/s/ Douglas N. Armer
	Name: Douglas N. Armer Title: Executive Vice President, Capital          Markets and Treasurer

[Signature Page to Power of Attorney (UK)]

EXHIBIT V-A

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

(FOR U.S. PURCHASED ASSETS)

Capitalized terms used but not defined in this Exhibit V shall have the respective meanings given them in the Master Repurchase Agreement to which this Exhibit V is attached (the “Master Repurchase Agreement”).

Seller acknowledges and agrees that the representations and warranties contained in this Exhibit V may be amended from time to time by Purchaser in its reasonable discretion to conform such representations and warranties to Purchaser’s then current standard representations and warranties for commercial mortgage-backed securitization transactions; provided, that such amended representations and warranties shall only apply to Purchased Assets that are originated after the date Seller receives written notice of the amended representations and warranties.

CERTAIN DEFINED TERMS

“Anticipated Repayment Date” shall mean, with respect to any Mortgage Loan or Mezzanine Loan that is identified on the related Purchased Asset Schedule as an ARD Loan, the date upon which such Mortgage Loan or Mezzanine Loan, as applicable, commences accruing interest at an increased interest rate.

“ARD Loan” shall mean a Mortgage Loan or a Mezzanine Loan the terms of which provide that if, after an Anticipated Repayment Date, the related Borrower has not prepaid such Mortgage Loan or Mezzanine Loan, as applicable, in full, any principal outstanding on the Anticipated Repayment Date will accrue interest at an increased interest rate.

“Assignment of Leases” shall mean any assignment of leases, rents and profits or similar document or instrument executed by a Borrower in connection with the origination of a Mortgage Loan.

“Companion Interest” shall mean, with respect to any Purchased Asset that is a Participation Interest or a Senior Note, any subordinate or pari passu Promissory Note or Participation Interest secured directly or indirectly by the same Mortgaged Property.

“Equity Interests” shall mean, with respect to any Mezzanine Loan, 100% of the direct or indirect equity interests, as applicable, in the entity or entities that own the Mortgaged Property or Mortgaged Properties that indirectly secure such Mezzanine Loan.

“Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.

Ex. V-A-1

“Interest Rate” shall mean, with respect to each Mortgage Loan or Mezzanine Loan, the related annualized rate at which interest is scheduled (in the absence of a default) to accrue on such Mortgage Loan or Mezzanine Loan, as applicable, from time to time in accordance with the related Promissory Note and applicable law.

“REMIC Provisions” shall mean the provisions of the Code relating to real estate mortgage investment conduits, within the meaning of Section 860D(a) of the Code.

“Treasury Regulations” shall mean applicable final regulations of the U.S. Department of the Treasury.

REPRESENTATIONS AND WARRANTIES

A. All Purchased Assets. With respect to each Purchased Asset:

1. Complete Servicing File. All documents comprising the Servicing Records are in the possession of the Servicer.

2. Ownership of Purchased Assets. Immediately prior to the sale, transfer and assignment to Purchaser, no Purchased Asset was subject to any assignment (other than assignments to Seller), participation (excluding, for the avoidance of doubt, any Companion Interest) or pledge, and Seller had good title to, and was the sole owner of, each Purchased Asset free and clear of any and all liens, charges, pledges, encumbrances, participations (excluding, for the avoidance of doubt, any Companion Interest), any other ownership interests on, in or to such Purchased Asset other than any interim servicing agreement or similar agreement and the rights of the holder of a Companion Interest under the related co-lender or participation agreement. Seller has full right and authority to sell, assign and transfer each Purchased Asset, and upon the insertion of Purchaser’s name where applicable and countersignature by Purchaser where applicable, the assignment to Purchaser constitutes a legal, valid and binding assignment of such Purchased Asset free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Purchased Asset other than (a) the rights of the holder of a Companion Interest under the related co-lender or participation agreement and/or (b) if the Purchased Asset is subject to a Mezzanine Loan, the holder of such Mezzanine Loan pursuant to the related intercreditor agreement.

3. Purchased Asset File. The Purchased Asset File contains a true, correct and complete copy (or, if required by the Custodial Agreement, original) of each document evidencing or securing the Purchased Asset, or affecting the rights of any holder thereof. With respect to any document contained in the Purchased Asset File that is required to be recorded or filed in accordance with the requirements set forth in the Custodial Agreement, such document is in form suitable for recording or filing, as applicable, in the appropriate jurisdiction and has been or will be recorded or filed as required by the Custodial Agreement. With respect to each assignment, assumption, modification, consolidation or extension contained in the Purchased Asset File, if the document or agreement being assigned, assumed, modified, consolidated or extended is required to be recorded or filed, such assignment, assumption, modification, consolidation or extension is in form suitable for recording or filing, as applicable, in the appropriate jurisdiction.

Ex. V-A-2

4. Purchased Asset Schedule. The information pertaining to each Purchased Asset which is set forth in the related Purchased Asset Schedule is true and correct in all material respects as of the Purchase Date and contains all information required by the Transaction Documents to be contained therein.

B. Mortgage Loans. With respect to each Mortgage Loan that constitutes a Purchased Asset:

1. Whole Loans. Such Mortgage Loan is a whole Mortgage Loan and not a Participation Interest or other partial interest in a Mortgage Loan.

2. Loan Document Status. Each related Promissory Note, Mortgage, Assignment of Leases (if a separate instrument) and other agreement executed by or on behalf of the related Borrower in connection with such Purchased Asset is the legal, valid and binding obligation of such Borrower (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except as such enforcement may be limited by (i) anti-deficiency laws, bankruptcy, insolvency, receivership, redemption, liquidation, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and except that certain provisions in such Purchased Asset Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may be further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clauses (i) and (ii) above) such limitations or unenforceability will not render such Purchased Asset Documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Insolvency Qualifications”).

Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Borrower with respect to any of the related Promissory Notes, Mortgages or other operative Purchased Asset Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the Promissory Note, Mortgage or other operative Purchased Asset Documents.

3. Mortgage Provisions. The Purchased Asset Documents for such Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, nonjudicial foreclosure, in each case subject to the limitations set forth in the Insolvency Qualifications.

4. Hospitality Provisions. The Purchased Asset Documents for such Mortgage Loan that is secured by a hospitality property operated pursuant to a franchise agreement or license agreement include an executed copy of such franchise or license agreement as well as a comfort letter or similar agreement signed by the Borrower and franchisor or licensor

Ex. V-A-3

of such property enforceable by Purchaser or any subsequent holder of such Mortgage Loan (including a securitization trustee) against such franchisor, either directly or as an assignee of the originator. The Mortgage or related security agreement for each Mortgage Loan secured by a hospitality property creates a security interest in the revenues of such property for which a UCC financing statement has been filed in the appropriate filing office (or, with respect to Wet Purchased Assets, has been submitted for filing in such office).

5. Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Purchased Asset File or to the extent otherwise permitted in accordance with the Master Repurchase Agreement (a) the material terms of each Mortgage, Promissory Note, Mortgage Loan guaranty and related operative Purchased Asset Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect which materially interferes with the security intended to be provided by such Mortgage; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) the Borrower has not been released from its material obligations under the related Purchased Asset Documents.

6. Lien; Valid Assignment. Subject to the Insolvency Qualifications, each assignment of Mortgage and assignment of Assignment of Leases from Seller will constitute a legal, valid and binding assignment from Seller. Each related Mortgage and Assignment of Leases is freely assignable without the consent of the related Borrower. Each related Mortgage is (or, with respect to Wet Purchased Assets, upon the recording thereof in the appropriate recording office will be) a legal, valid and enforceable first lien on the related Borrower’s fee (or if identified on the related Purchased Asset Schedule, leasehold) interest in the Mortgaged Property in the principal amount of such Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) or any other title exceptions identified to Purchaser in a Requested Exceptions Report (“Title Exceptions”)), except as the enforcement thereof may be limited by the Insolvency Qualifications. Such Mortgaged Property (subject to Permitted Encumbrances or any Title Exceptions) as of the origination date of the related Mortgage Loan and, to Seller’s Knowledge, as of the related Purchase Date, is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy, and, to Seller’s Knowledge and subject to the rights of tenants (subject to and excepting Permitted Encumbrances and any other Title Exceptions), and no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements is required in order to effect such perfection.

7. Permitted Liens; Title Insurance. Each Mortgaged Property securing such Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or,

Ex. V-A-4

if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow or closing instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Mortgage Loan (or with respect to a Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; and (f) if the related Mortgage Loan is cross-collateralized with any other Mortgage Loan, the lien of the Mortgage for another Mortgage Loan contained in the same cross-collateralized group, provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the Borrower’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clause (f) of the preceding sentence none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made thereunder and no claims have been paid thereunder. Neither Seller, nor to Seller’s Knowledge, any other holder of the Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.

8. Junior Liens. It being understood that B notes secured (and any other Purchased Asset that are cross-collateralized and cross-defaulted with a Purchased Asset) by the same Mortgage as a Mortgage Loan are not subordinate mortgages or junior liens, there are no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than as permitted under the related Purchased Asset Documents, Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics’ and materialmen’s liens (which are the subject of the representation in paragraph (7) above), and equipment and other personal property financing and related Mezzanine Loan(s) which are also Purchased Assets under the Master Repurchase Agreement). Except for related Mezzanine Loan(s) which are also Purchased Assets under the Master Repurchase Agreement or as set forth on the related Purchased Asset Schedule, Seller has no Knowledge of any mezzanine debt secured directly by interests in the related Borrower.

9. Assignment of Leases and Rents. There exists as part of the related Purchased Asset File an Assignment of Leases (either as a separate instrument or incorporated into the related Mortgage). Subject to Permitted Encumbrances and Title Exceptions, each related Assignment of Leases creates (or, with respect to Wet Purchased Assets, upon the recording thereof in the appropriate recording office, will create) a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Borrower to exercise

Ex. V-A-5

certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Insolvency Qualifications. The related Mortgage or related Assignment of Leases, subject to applicable law, provides that, upon an event of default under the Mortgage Loan, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.

10. UCC Filings. If the related Mortgaged Property is operated as a hospitality property, the related originator has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Mortgage Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by the related Borrower and located on such Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Purchased Asset Documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Insolvency Qualifications, each related Mortgage (or equivalent document) upon recordation, creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.

11. Condition of Property. Seller or the originator of the Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within six (6) months of origination of the Mortgage Loan and within six (6) months of the Purchase Date.

An engineering report or property condition assessment was prepared in connection with the origination of such Mortgage Loan no more than twelve (12) months prior to the Purchase Date. Seller has no Knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable loans, of any material damage to the Mortgaged Property that Seller believes would have a material adverse effect on the value of the Mortgaged Property (a) other than those disclosed in the engineering report or property condition assessment delivered to Purchaser in accordance with Exhibit VII and (b) except to the extent that such material damage (i) has been repaired in all material respects, (ii) is addressed by the escrow of funds established in an aggregate amount consistent with the standards utilized by Seller with respect to similar loans it holds for its own account have been established, which escrowed amount will in all events be in an aggregate amount not less than the estimated cost of the necessary repairs, or (iii) is fully covered by insurance (subject to any deductible).

12. Taxes and Assessments. All taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, which could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Purchase Date have

Ex. V-A-6

become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

13. Condemnation. As of the date of origination of such Mortgage Loan and to Seller’s Knowledge as of the Purchase Date, there is no proceeding pending and, to Seller’s Knowledge as of the date of origination of such Mortgage Loan and as of the Purchase Date, there is no proceeding threatened for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.

14. Actions Concerning Mortgage Loan. As of the date of origination of such Mortgage Loan and to Seller’s Knowledge as of the Purchase Date, there was no pending, filed or threatened action, suit or proceeding, arbitration or governmental investigation involving any Borrower, guarantor, or Borrower’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Borrower’s title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Borrower’s ability to perform under the related Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Purchased Asset Documents or (f) the current principal use of the Mortgaged Property.

15. Escrow Deposits. All escrow deposits and payments required to be escrowed with lender pursuant to such Mortgage Loan are in the possession, or under the control, of Seller or Servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits or the right thereto) that are required to be escrowed with the lender under the related Purchased Asset Documents are being conveyed by Seller to Purchaser.

16. No Holdbacks. The principal amount of the Mortgage Loan stated on the related Purchased Asset Schedule has been fully disbursed as of the Purchase Date and there is no requirement for future advances thereunder (except for Future Advances identified on the related Purchased Asset Schedule or in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Borrower or other considerations determined by Seller to merit such holdback).

17. Insurance. Each related Mortgaged Property is, and is required pursuant to the related Purchased Asset Documents to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Purchased Asset Documents and having a claims-paying or

Ex. V-A-7

financial strength rating of at least “A-:VIII” from A.M. Best Company, “A3” from Moody’s Investors Service, Inc. or “A-” from Standard & Poor’s Ratings Service (collectively, the “Insurance Rating Requirements”), in an amount (subject to a customary deductible) not less than the lesser of (x) the original principal balance of the Mortgage Loan and (y) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the related Borrower included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.

Each related Mortgaged Property is also covered (as of the Purchased Date), and required to be covered pursuant to the related Purchased Asset Documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than twelve (12) months (or with respect to each Mortgage Loan on a single asset with a maximum principal balance of $50 million or more, eighteen (18) months).

If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related Borrower is required to maintain insurance in the maximum amount available under the National Flood Insurance Program.

If the Mortgaged Property is located within twenty-five (25) miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related Borrower is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms.

The Mortgaged Property is covered (as of the Purchased Date), and required to be covered pursuant to the related Purchased Asset Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by prudent institutional commercial mortgage lenders, and in any event not less than $1 million per occurrence and $2 million in the aggregate.

An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property for the sole purpose of assessing either the scenario expected limit (“SEL”) or the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, as applicable was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer meeting the Insurance Rating Requirements in an amount not less than 100% of the SEL or PML, as applicable.

Ex. V-A-8

The Purchased Asset Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Mortgage Loan, the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Mortgage Loan together with any accrued interest thereon.

All premiums on all insurance policies referred to in this section required to be paid as of the related Purchase Date have been paid, and such insurance policies name the lender under the Mortgage Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of Purchaser. Each related Mortgage Loan obligates the related Borrower to maintain all such insurance and, at such Borrower’s failure to do so, authorizes the lender to maintain such insurance at the Borrower’s cost and expense and to charge such Borrower for premiums. All such insurance policies (other than commercial liability policies) require at least ten (10) days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least thirty (30) days prior notice to the lender of termination or cancellation (or such lesser period, not less than ten (10) days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.

18. Access; Utilities; Separate Tax Lots. To Seller’s Knowledge based solely on surveys obtained in connection with origination and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of such Mortgage Loan, each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Mortgage Loan requires the Borrower to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created.

19. No Encroachments. To Seller’s Knowledge based solely on surveys obtained in connection with origination and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of such Mortgage Loan, (a) all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Mortgage Loan are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy, (b) no improvements on adjoining parcels

Ex. V-A-9

encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under, or after taking into account any applicable provisions of the Title Policy, and (c) no improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy.

20. No Contingent Interest or Equity Participation. No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (in each case except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by Seller.

21. REMIC. With respect to any Mortgage Loan identified in the relevant Purchased Asset Documents as being REMIC eligible, such Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (a) the issue price of the Mortgage Loan to the related Borrower at origination did not exceed the non-contingent principal amount of the Mortgage Loan and (b) either: (i) such Mortgage Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (A) at the date the Mortgage Loan was originated at least equal to 80% of the adjusted issue price of the Mortgage Loan on such date or (B) at the Purchase Date at least equal to 80% of the adjusted issue price of the Mortgage Loan on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (1) the amount of any lien on the real property interest that is senior to the Mortgage Loan and (2) a proportionate amount of any lien that is in parity with the Mortgage Loan; or (ii) substantially all of the proceeds of such Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Mortgage Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the Mortgage Loan is identified in the related Purchased Asset Documents as being REMIC eligible, if such Mortgage Loan was “significantly modified” prior to the Purchase Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such Mortgage Loan or (y) satisfies the provisions of either sub-clause (b)(i)(A) above (substituting the date of the last such modification for the date the Mortgage Loan was originated) or sub-clause (b)(i)(B), including the proviso thereto. If such Mortgage Loan is identified in the Purchased Asset Documents as being REMIC eligible, any prepayment premium and yield maintenance charges applicable to the Mortgage Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-(b)(2). All terms used in this paragraph shall have the same meanings as set forth in the related Treasury Regulations.

22. Compliance with Usury Laws. The Interest Rate (exclusive of any default interest, late charges, yield maintenance charges, exit fees, or prepayment premiums) of such Mortgage Loan complied as of the date of origination of such Mortgage Loan with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

Ex. V-A-10

23. Authorized to do Business. To the extent required under applicable law, as of the Purchase Date or as of the date that such entity held the Promissory Note, each holder of the Promissory Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Mortgage Loan by any holder thereof.

24. Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination of the related Mortgage Loan and, to Seller’s Knowledge, as of the Purchase Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee.

25. Local Law Compliance. To Seller’s Knowledge, based solely upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by Seller for similar commercial and multifamily mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Mortgaged Property securing such Mortgage Loan as of the date of origination of such Mortgage Loan and as of the Purchase Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively, “Zoning Regulations”) other than those which (i) constitute a legal non-conforming use or structure, as to which the related Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the value, use or operation of the related Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) law and ordinance insurance coverage has been obtained in respect thereof in amounts customarily required by Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations, or (iv) would not have a material adverse effect on the value, operation or net operating income of the Mortgaged Property. The terms of the Purchased Asset Documents require the Borrower to comply in all material respects with all applicable governmental regulations, zoning and building laws.

26. Licenses and Permits. Each Borrower covenants in the Purchased Asset Documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the Mortgaged Property in full force and effect, and to Seller’s Knowledge based upon any of a letter from any governmental authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by Seller for similar related commercial and multifamily mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Mortgage Loan requires the related Borrower to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.

Ex. V-A-11

27. Recourse Obligations. The Purchased Asset Documents for such Mortgage Loan provide that such Mortgage Loan (a) becomes full recourse to the Borrower and guarantor (which is a natural person or persons, or an entity distinct from the Borrower (but may be affiliated with the Borrower) that has assets other than equity in the related Mortgaged Property that are not de minimis) in any of the following events: (i) if any voluntary petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by the Borrower; (ii) if Borrower or guarantor shall have colluded with (or, alternatively, solicited or caused to be solicited) other creditors to cause an involuntary bankruptcy filing with respect to the Borrower or (iii) upon any voluntary transfer of either the Mortgaged Property or equity interests in Borrower made in violation of the Purchased Asset Documents; and (b) contains provisions providing for recourse against the Borrower and guarantor (which is a natural person or persons, or an entity distinct from the Borrower (but may be affiliated with the Borrower) that has assets other than equity in the related Mortgaged Property that are not de minimis), for losses and damages sustained by reason of Borrower’s (i) misappropriation of rents after the occurrence of an event of default under the Mortgage Loan; (ii) misappropriation of security deposits (or, alternatively, the failure of any security deposits to be delivered to lender upon foreclosure or action in lieu thereof (except to the extent applied in accordance with leases prior to an event of default under such Mortgage Loan)), insurance proceeds, or condemnation awards; (iii) fraud or intentional material misrepresentation; (iv) breaches of the environmental covenants in the related Purchased Asset Documents; or (v) commission of intentional material physical waste at the Mortgaged Property.

28. Mortgage Releases. The terms of the related Mortgage or related Purchased Asset Documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Mortgage Loan, (b) upon payment in full of such Mortgage Loan, (c) [reserved], (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation. With respect to any Mortgage Loan identified in the related Purchased Asset Documents as REMIC eligible, with respect to any partial release under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b)(2) and (ii) would not cause the subject Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; or (y) the mortgagee or servicer can, in accordance with the related Purchased Asset Documents, condition such release of collateral on the related Borrower’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), for any Mortgage Loan originated after December 6, 2010, if the fair market value of the real property constituting such Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Mortgage Loan outstanding after the release, the Borrower is required to make a payment of principal in an amount not less than the amount required by the REMIC Provisions.

Ex. V-A-12

With respect to any Mortgage Loan identified in the related Purchased Asset Documents as REMIC eligible, in the event of a taking of any portion of a Mortgaged Property by a state or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Borrower can be required to pay down the principal balance of the related Mortgage Loan in an amount not less than the amount required by the REMIC Provisions and, to such extent, may not be required to be applied to the restoration of the Mortgaged Property or released to the Borrower if, immediately after the release of such portion of the Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Mortgage Loan.

With respect to any Mortgage Loan identified in the related Purchased Asset Documents as REMIC eligible, no such Mortgage Loan that is secured by more than one Mortgaged Property or that is cross-collateralized with another Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties other than in compliance with the REMIC Provisions.

29. Financial Reporting and Rent Rolls. The Purchased Asset Documents for such Mortgage Loan require the Borrower to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) and rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Mortgage Loan with more than one Borrower are in the form of an annual combined balance sheet of the Borrower entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis.

30. Acts of Terrorism Exclusion. With respect to each Mortgage Loan with a maximum principal balance over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007, and the Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Mortgage Loan, the related special all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Mortgage Loan, and, to Seller’s Knowledge, do not, as of the Purchase Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to such Mortgage Loan, the related Purchased Asset Documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms; provided, however, that if TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the Borrower under such Mortgage Loan is required to carry terrorism insurance, but in such event the Borrower

Ex. V-A-13

shall not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable at such time in respect of the property and business interruption/rental loss insurance required under the related Purchased Asset Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance), and if the cost of terrorism insurance exceeds such amount, the Borrower is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount.

31. Due-on-Sale or Encumbrance. Subject to specific exceptions set forth below, such Mortgage Loan contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Mortgage Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Purchased Asset Documents (which provide for transfers without the consent of the lender which are customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Purchased Asset Documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related Borrower, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Purchased Asset Documents, (iii) transfers of less than, or other than, a controlling interest in the related Borrower, (iv) transfers to another holder of direct or indirect equity in the Borrower, a specific Person designated in the related Purchased Asset Documents or a Person satisfying specific criteria identified in the related Purchased Asset Documents, (v) transfers of stock or similar equity units in publicly traded companies, (vi) a substitution or release of collateral within the parameters of paragraph 28 herein or (vii) any mezzanine debt that existed at the origination of the related Mortgage Loan, or future permitted mezzanine debt or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Companion Interest in such Mortgage Loan or subordinate debt that existed at origination and is permitted under the related Purchased Asset Documents, (ii) purchase money security interests, (iii) any Mortgage Loan that is cross-collateralized and cross-defaulted with another Mortgage Loan or (iv) Permitted Encumbrances; provided however, that the Mortgage Loan may provide a mechanism for the assumption of the Mortgage Loan by a third party upon the Borrower’s satisfaction of certain conditions precedent and the payment of a required transfer fee. The Mortgage or other Purchased Asset Documents provide that to the extent any rating agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the Borrower is responsible for such payment along with all other reasonable fees and expenses incurred by the mortgagee relative to such transfer or encumbrance.

32. Single-Purpose Entity. Each Mortgage Loan requires the Borrower to be a Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding. Both the Purchased Asset Documents and the organizational documents of the Borrower with respect to each Mortgage Loan with a maximum principal balance in excess of $5 million as of the Purchase Date provide that the Borrower is a Single-Purpose Entity, and each Mortgage Loan with a maximum principal balance of $20 million or more as of the Purchase Date has a

Ex. V-A-14

counsel’s opinion regarding non-consolidation of the Borrower. For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Mortgage Loan has a maximum principal balance equal to $5 million or less as of the Purchase Date, its organizational documents or the related Purchased Asset Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the Mortgage Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or Mortgaged Properties, and whose organizational documents further provide, or which entity represented in the related Purchased Asset Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Purchased Asset Documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Borrower for a Mortgage Loan that is cross-collateralized and cross-defaulted with the related Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.

33. Defeasance. The Mortgage Loan does not permit defeasance.

34. Interest Rates. Each Mortgage Loan bears interest at a floating rate of interest that is based on LIBOR plus a margin (which interest rate may be subject to a minimum or “floor” rate), except in situations where default interest may be imposed. For this purpose, “LIBOR” shall mean (a) the offered rate for deposits in U.S. dollars for a period equal to thirty (30) days, which appears on appears on Reuters Screen LIBOR01 Page (or its equivalent) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the applicable determination date or (b) if such rate does not appear on Reuters Screen LIBOR01 Page (or its equivalent) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the applicable determination date, then the arithmetic mean (rounded as aforesaid) of certain offered quotations of rates to prime banks in the London interbank market as of approximately 11:00 a.m., London time, in an amount that is representative for a single transaction in the relevant market at the relevant time. If LIBOR shall cease to be available pursuant to clauses (a) and (b) above or to the extent it becomes unlawful for the lender to make or maintain LIBOR loans, (x) in the event there exists an alternative rate to replace LIBOR, the index rate of interest for such Mortgage Loan shall be a published index that the lender determines is then-currently used in making determinations of the interest rate for variable rate commercial loans, or (y) in the event there does not exist an alternative rate to replace LIBOR, the rate of interest published in The Wall Street Journal from time to time as the “Prime Rate.”

35. Ground Leases. With respect to any Mortgage Loan where the Mortgage Loan is secured by a ground leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of the originator, its successors and assigns, Seller represents and warrants that:

(a) The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage;

Ex. V-A-15

(b) The lessor under such Ground Lease has agreed in a writing included in the related Purchased Asset File (or in such Ground Lease) that the Ground Lease may not be amended, modified, or canceled or terminated by agreement of lessor and lessee without the prior written consent of the lender (except termination or cancellation if (i) notice of a default under the Ground Lease is provided to lender and (ii) such default is curable by lender as provided in the Ground Lease but remains uncured beyond the applicable cure period), and no such consent has been granted by Seller since the origination of the Mortgage Loan, except as reflected in any written instruments included in the related Purchased Asset File;

(c) The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either the Borrower or the mortgagee) that extends not less than twenty (20) years beyond the stated maturity of the related Mortgage Loan, or ten (10) years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);

(d) The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject to a subordination, non disturbance and attornment agreement to which the mortgagee on the lessor’s fee interest in the Mortgaged Property is subject;

(e) The Ground Lease does not, in Seller’s reasonable judgment, place commercially unreasonable restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the Mortgage Loan and its assigns without the consent of the lessor thereunder (or if such consent is necessary it has been obtained), and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor;

(f) Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To Seller’s Knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a default under the terms of such Ground Lease and to Seller’s Knowledge, such Ground Lease is in full force and effect as of the Purchase Date;

(g) The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against lender unless such notice is given to the lender;

Ex. V-A-16

(h) A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease;

(i) The Ground Lease does not impose any restrictions on subletting that would be viewed, in Seller’s reasonable judgment, as commercially unreasonable by Seller in connection with loans originated for securitization;

(j) Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in subpart (k)) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Purchased Asset Documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest;

(k) In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and

(l) Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.

36. Servicing. The servicing and collection practices used by Seller (or, to Seller’s Knowledge, the related originator or any interim servicer, if Seller or an Affiliate was not the originator) with respect to the Mortgage Loan have at all times been, in all respects, legal and have met Accepted Servicing Practices.

37. Origination and Underwriting. The origination practices of Seller (or, to Seller’s Knowledge, the related originator if Seller or an Affiliate was not the originator) with respect to such Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such Mortgage Loan and the origination thereof (to Seller’s Knowledge, if Seller or an Affiliate was not the originator) complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Exhibit V-A.

Ex. V-A-17

38. [Reserved].

39. No Material Default; Payment Record. No Mortgage Loan has been more than thirty (30) days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of its Purchase Date, no Mortgage Loan is more than thirty (30) days delinquent (beyond any applicable grace or cure period) in making required payments. To Seller’s Knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either (a) or (b), materially and adversely affects the value of the Mortgage Loan or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by Seller in this Exhibit V. No person other than the holder of such Mortgage Loan may declare any event of default under the Mortgage Loan or accelerate any indebtedness under the Purchased Asset Documents.

40. Bankruptcy. As of the date of origination (to Seller’s Knowledge, if Seller or an Affiliate was not the originator) of such Mortgage Loan and, to Seller’s Knowledge, as of the Purchase Date, neither the Mortgaged Property (other than tenants of such Mortgaged Property), nor any portion thereof, is the subject of, and no Borrower, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.

41. Organization of Borrower. With respect to such Mortgage Loan, in reliance on certified copies of the organizational documents of the related Borrower delivered by such Borrower in connection with the origination of such Mortgage Loan, the Borrower is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Mortgage Loan that is cross-collateralized or cross defaulted with another Purchased Asset, to Seller’s Knowledge, no Mortgage Loan has a Borrower that is an affiliate of a Borrower under another Purchased Asset.

42. Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such Mortgage Loan within twelve (12) months prior to its origination date (or an update of a previous ESA was prepared during such period), and such ESA (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) at the related Mortgaged Property or the need for further investigation, or (ii) if the existence of an Environmental Condition or need for further

Ex. V-A-18

investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable Environmental Laws or the Environmental Condition has been escrowed by the related Borrower and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Borrower that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the related Purchase Date, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the environmental issue affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) an environmental policy or a lender’s pollution legal liability insurance policy meeting the requirements set forth below that covers liability for the identified circumstance or condition was obtained from an insurer rated no less than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not related to the Borrower was identified as the responsible party for such condition or circumstance and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Borrower having financial resources reasonably estimated to be adequate to address the situation is required to take action. To Seller’s Knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property.

43. [Reserved].

44. Appraisal. The Purchased Asset File contains an appraisal of the related Mortgaged Property with an appraisal date within six (6) months of the Mortgage Loan origination date, and within six (6) months of the Purchase Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute (“MAI”) and, to Seller’s Knowledge, had no interest, direct or indirect, in the Mortgaged Property or the Borrower or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation.

45. Cross-Collateralization. No Mortgage Loan is cross-collateralized or cross-defaulted with any other Mortgage Loan, except as set forth on the related Purchased Asset Schedule.

46. Advance of Funds by Seller. After origination of such Mortgage Loan, no advance of funds has been made by Seller to the related Borrower other than in accordance with the related Purchased Asset Documents, and, to Seller’s Knowledge, no funds have been received from any person other than the related Borrower or an affiliate for, or on account of, payments due on such Mortgage Loan (other than as contemplated by the Purchased Asset Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or the related Purchased Asset Documents). Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Borrower under such Mortgage Loan, other than contributions made on or prior to the Purchase Date.

Ex. V-A-19

47. Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mortgage Loan.

48. Affiliates. The related Borrower is not an Affiliate of Seller.

C. Mezzanine Loans. With respect to each Mezzanine Loan that constitutes a Purchased Asset:

1. Whole Loans. Such Mezzanine Loan is a whole Mezzanine Loan secured by Equity Collateral consisting of one hundred percent (100%) of the direct or indirect equity interests in the entity or entities that own directly or indirectly the related Mortgaged Property or Mortgaged Properties. No Mezzanine Loan is a Participation Interest or other partial interest in a Mezzanine Loan. The related Mortgage Loan complies with all of the representations and warranties set forth in Section (B) above and is also a Purchased Asset subject to a Transaction under the Master Repurchase Agreement.

2. Mezzanine Loan Document Status. Each related Promissory Note and other agreement executed by or on behalf of the related Borrower in connection with such Mezzanine Loan is the legal, valid and binding obligation of such Borrower (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except as such enforcement may be limited by the Insolvency Qualifications.

Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Borrower with respect to any of the related Promissory Notes or other Purchased Asset Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of such Mezzanine Loan, that would deny the pledgee the principal benefits intended to be provided by the Promissory Note or other Purchased Asset Documents.

3. Pledge Provisions. The Purchased Asset Documents for each Mezzanine Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the related Equity Interests of the principal benefits of the security intended to be provided thereby, including realization by UCC foreclosure subject to the limitations set forth in the Insolvency Qualifications.

4. Mezzanine Loan Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Purchased Asset File or to the extent otherwise permitted in accordance with the Master Repurchase Agreement, (a) the material terms of the related pledge agreement, Promissory Note, guaranty, and the other Purchased Asset

Ex. V-A-20

Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect which materially interferes with the security intended to be provided by such Mezzanine Loan; (b) no related Equity Interests or any portion thereof has been released from the lien of the related pledge or other security agreement in any manner which materially interferes with the security intended to be provided by such agreement; and (c) the related Borrower has not been released from its material obligations under the related Purchased Asset Documents.

5. Lien; Valid Assignment. Subject to the Insolvency Qualifications, each assignment of Mezzanine Loan and agreements executed in connection therewith from Seller will constitute a legal, valid and binding assignment from Seller. Each Mezzanine Loan is freely assignable without the consent of the related Borrower. Each pledge of collateral for the Mezzanine Loan creates (or, with respect to Wet Purchased Assets, upon the filing of a UCC financing statement in the applicable filing office, will create) a legal, valid and enforceable first priority security interest in such collateral, except as the enforcement thereof may be limited by the Insolvency Qualifications. Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements is required in order to effect such perfection.

6. UCC 9 Policies. Seller’s security interest in the Equity Interests is covered by a “UCC 9” insurance policy relating to the Mezzanine Loan (or, if such policy is yet to be issued, by a pro forma title policy or “marked up” commitment preliminary title policy with escrow or closing instructions, in each case binding on the issuer), and (i) such policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, (ii) all premiums thereunder have been paid, (iii) no claims have been made by or on behalf of Seller thereunder, and (iv) no claims have been paid thereunder. The originator of such Mezzanine Loan obtained a mezzanine endorsement to the “owner’s” title policy and an assignment of title proceeds in connection therewith.

7. Actions Concerning Mezzanine Loan. As of the date of origination of such Mezzanine Loan and to Seller’s Knowledge as of the Purchase Date, there was no pending, filed or threatened action, suit or proceeding, arbitration or governmental investigation involving any related Borrower or guarantor, or the related Equity Interests, or Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Borrower’s title to such Equity Interests, (b) the related mortgage Borrower’s title to the related Mortgaged Property, (c) the validity or enforceability of the related Purchased Asset Documents, (d) such Borrower’s ability to perform under such Mezzanine Loan (or the related mortgage Borrower’s ability to perform under the related Mortgage Loan, as applicable), (e) such guarantor’s ability to perform under the related guaranty or (f) the principal benefit of the security intended to be provided by the Purchased Asset Documents.

8. Escrow Deposits. All escrow deposits and payments required to be escrowed with lender pursuant to such Mezzanine Loan are in the possession, or under the control, of Seller or Servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with the lender under the related Purchased Asset Documents are being conveyed by Seller to Purchaser.

Ex. V-A-21

9. No Holdbacks. The principal amount of such Mezzanine Loan stated on the related Purchased Asset Schedule has been fully disbursed as of the Purchase Date and there is no requirement for future advances thereunder (except for Future Advances identified on the related Purchased Asset Schedule or in those cases where the full amount of the Mezzanine Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to matters with respect to the related Mortgaged Property, the Borrower or other considerations determined by Seller to merit such holdback).

10. No Contingent Interest or Equity Participation. No Mezzanine Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (in each case except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by Seller.

11. Compliance with Usury Laws. The Interest Rate (exclusive of any default interest, late charges, yield maintenance charges, exit fees, or prepayment premiums) of such Mezzanine Loan complied as of the date of origination of such Mezzanine Loan with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

12. Recourse Obligations. The Purchased Asset Documents for such Mezzanine Loan provide that such Mezzanine Loan (a) becomes full recourse to the Borrower and guarantor (which is a natural person or persons, or an entity distinct from the related Borrower (but may be affiliated with such Borrower) that has assets other than the equity in the related Mortgaged Property that are not de minimis) in any of the following events: (i) if any voluntary petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by the related Borrower; (ii) if Borrower or guarantor shall have colluded with (or, alternatively, solicited or caused to be solicited) other creditors to cause an involuntary bankruptcy filing with respect to the Borrower; or (iii) upon any voluntary transfer of the related Mortgaged Property, Equity Interests, or equity interests in the related Borrower made in violation of the related Purchased Asset Documents; and (b) contains provisions providing for recourse against the Borrower and guarantor (which is a natural person or persons, or an entity distinct from the related Borrower (but may be affiliated with such Borrower) that has assets other than the equity in the related Mortgaged Property that are not de minimis), for losses and damages sustained by reason of the Borrower’s (i) misappropriation of rents after the occurrence of an event of default under the Mezzanine Loan; (ii) misappropriation of security deposits (or, alternatively, the failure of any security deposits to be delivered to lender upon foreclosure or action in lieu thereof (except to the extent applied in accordance with leases prior to an event of default under such Mezzanine Loan)), insurance proceeds, or condemnation awards; (iii) fraud or intentional material misrepresentation; (iv) breaches of the environmental covenants in the related Purchased Asset Documents; or (v) commission of intentional material physical waste at the related Mortgaged Property.

Ex. V-A-22

13. Single-Purpose Entity. Each Mezzanine Loan requires the related Borrower to be a Single-Purpose Entity for at least as long as such Mezzanine Loan is outstanding. Both the Purchased Asset Documents and the organizational documents of the Borrower with respect to each Mezzanine Loan with a maximum principal balance in excess of $5 million as of the Purchase Date provide that such Borrower is a Single-Purpose Entity, and each Mezzanine Loan with a maximum principal balance of $20 million or more as of the Purchase Date has a counsel’s opinion regarding non-consolidation of such Borrower.

14. Defeasance. The Mezzanine Loan does not permit defeasance.

15. Interest Rates. Each Mezzanine Loan bears interest at a floating rate of interest that is based on LIBOR plus a margin (which interest rate may be subject to a minimum or “floor” rate), except in situations where default interest may be imposed. For this purpose, “LIBOR” shall mean (a) the offered rate for deposits in U.S. dollars for a period equal to thirty (30) days, which appears on appears on Reuters Screen LIBOR01 Page (or its equivalent) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the applicable determination date or (b) if such rate does not appear on Reuters Screen LIBOR01 Page (or its equivalent) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the applicable determination date, then the arithmetic mean (rounded as aforesaid) of certain offered quotations of rates to prime banks in the London interbank market as of approximately 11:00 a.m., London time, in an amount that is representative for a single transaction in the relevant market at the relevant time. If LIBOR shall cease to be available pursuant to clauses (a) and (b) above or to the extent it becomes unlawful for the lender to make or maintain LIBOR loans, (x) in the event there exists an alternative rate to replace LIBOR, the index rate of interest for such Mezzanine Loan shall be a published index that the lender determines is then-currently used in making determinations of the interest rate for variable rate commercial loans, or (y) in the event there does not exist an alternative rate to replace LIBOR, the rate of interest published in The Wall Street Journal from time to time as the “Prime Rate.”

16. Servicing. The servicing and collection practices used by the Seller (or, to Seller’s Knowledge, the related originator or any interim servicer, if Seller or an Affiliate was not the originator) with respect to the Mezzanine Loan have at all times been, in all respects, legal and have met Accepted Servicing Practices.

17. Origination and Underwriting. The origination practices of Seller (or, to Seller’s Knowledge, the related originator if Seller or an Affiliate was not the originator) with respect to such Mezzanine Loan have been, in all material respects, legal and as of the date of its origination, such Mezzanine Loan and the origination thereof (to Seller’s Knowledge, if Seller or an Affiliate was not the originator) complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mezzanine Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Exhibit V.

18. No Material Default; Payment Record. No Mezzanine Loan has been more than thirty (30) days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of its Purchase Date, no Mezzanine Loan is more than thirty (30) days delinquent (beyond any applicable grace or cure period) in making

Ex. V-A-23

required payments. To Seller’s Knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the Mezzanine Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either (a) or (b), materially and adversely affects the value of the Mezzanine Loan, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by Seller in this Exhibit V. No person other than the holder of such Mezzanine Loan may declare any event of default under the Mezzanine Loan or accelerate any indebtedness under the Purchased Asset Documents.

19. Bankruptcy. As of the date of origination (to Seller’s Knowledge, if Seller or an Affiliate was not the originator) of each Mezzanine Loan and, to Seller’s Knowledge, as of the Purchase Date, no related Borrower or guarantor is a debtor in any state or federal bankruptcy, insolvency or similar proceeding.

20. Organization of Borrower. With respect to such Mezzanine Loan, in reliance on certified copies of the organizational documents of the related Borrower delivered by such Borrower in connection with the origination of such Mezzanine Loan, such Borrower is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Mezzanine Loan that is cross-collateralized or cross-defaulted with another Purchased Asset, to Seller’s Knowledge, no Mezzanine Loan has a Borrower that is an affiliate of another Borrower under another Purchased Asset.

21. Cross-Collateralization. No Mezzanine Loan is cross-collateralized or cross-defaulted with any other loan, except any another Purchased Asset and only to the extent set forth on the related Purchased Asset Schedule.

22. Advance of Funds by Seller. After origination of such Mezzanine Loan, no advance of funds has been made by Seller to the related Borrower other than in accordance with the related Purchased Asset Documents, and, to Seller’s Knowledge, no funds have been received from any person other than the related Borrower or an affiliate of the related Borrower for, or on account of, payments due on such Mezzanine Loan (other than as contemplated by the related Purchased Asset Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or the related Purchased Asset Documents). Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Borrower under a Mezzanine Loan, other than contributions made on or prior to the Purchase Date.

23. Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of such Mezzanine Loan.

24. Affiliates. The related Borrower is not an Affiliate of Seller.

Ex. V-A-24

25. Not a Security. With respect to each Mezzanine Loan, such Mezzanine Loan has not been deemed, and is not, a “security” within the meaning of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

D. Senior Notes. With respect to each Purchased Asset that is a Promissory Note, such note is a Senior Note (with no existing more-senior Promissory Note or Participation Interest) related to a Mortgage Loan or a Mezzanine Loan that complies with all of the representations set forth in Section (B) or (C) above, as applicable. If such Promissory Note is pari passu with any other Promissory Note, the holder of such Promissory Note is the lead and controlling holder as between such pari passu Promissory Note pursuant to a co-lender agreement that is legal, valid and enforceable as between its parties, subject to the limitations set forth in the Insolvency Qualifications.

E. Participation Interests. With respect to each Purchased Asset that is a Participation Interest:

1. Mortgage Loan/Mezzanine Loan. The related Mortgage Loan complies with all of the representations set forth in Section (B) above and, if applicable, the related Mezzanine Loan complies with all of the representations set forth in Section (C) above.

2. Participation Certificate. Such Participation Interest is evidenced by a physical Participation Certificate.

3. Record Holder; Status of Participation Agreement. Such Participation Interest is a senior or pari passu participation interest (in each case, with no existing more-senior participation interest) in either (x) a whole Mortgage Loan, (y) a whole Mezzanine Loan or (z) both a whole Mortgage Loan and a whole Mezzanine Loan. Seller or an agent on behalf of Seller and the holder of the related Companion Interest(s) is the Record Holder of the related Mortgage Loan and, if applicable, the Record Holder under the related Mezzanine Loan pursuant to (x) a participation agreement that is legal, valid and enforceable as between its parties and (y) if applicable, a custodial agreement that is legal, valid and enforceable as between its parties, in each case subject to the limitations set forth in the Insolvency Qualifications. If such Participation Interest is (i) a pari passu participation interest or (ii) a senior participation interest with respect to which no related junior participation interest accounts for more than ten (10) percent of the maximum principal balance of the related Mortgage Loan and, if applicable, the related Mezzanine Loan, the related participation agreement provides that the holder of such Participation Interest has full power, authority and discretion to service (or cause to be serviced) the related Mortgage Loan and, if applicable, the related Mezzanine Loan, modify and amend the terms thereof, pursue remedies and enforcement actions, including foreclosure or other legal action, without consent or approval of any holder of a Companion Interest (each, a “Companion Interest Holder”). If such Participation Interest is a senior participation interest with respect to which the related junior participation interest accounts for more than ten (10) percent of the maximum principal balance of the related Mortgage Loan and, if applicable, the related Mezzanine Loan, the control rights granted to the holder of such junior participation pursuant to the related participation agreement are customary for holders of junior participations in commercial mortgage loans.

Ex. V-A-25

4. Costs and Expenses. If the Participation Interest is pari passu with any Companion Interest, the holder of such Companion Interest is required to pay its pro rata share of any expenses, costs and fees associated with servicing and enforcing rights and remedies under the related Mortgage Loan and, if applicable, the related Mezzanine Loan upon request therefor by the holder of such Participation Interest (or the Record Holder or a servicer). If the Participation Interest is senior to any Companion Interests, the holder of such Companion Interest is required to bear any expenses, costs and fees associated with servicing and enforcing rights and remedies under the related Mortgage Loan and, if applicable, the related Mezzanine Loan prior to the holder of such Participation Interest.

5. Companion Interest Holders. The related participation agreement is effective to convey the related Companion Interests to the related Companion Interest Holders and is not intended to be or effective as a loan or other financing secured by the related Mortgaged Property or, if applicable, the related Equity Interests. Neither the holder of the Participation Interest nor the Record Holder owes any fiduciary duty or obligation to any Companion Interest Holder pursuant to the applicable participation agreement.

6. Purchased Asset File. The Purchased Asset File with respect to such Participation Interest includes all material documents evidencing such Participation Interest and since origination and except by written instruments set forth in the related Purchased Asset File or to the extent otherwise permitted in accordance with the Master Repurchase Agreement, the terms of such documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any material respect except as set forth in the documents contained in the Purchased Asset File. Each assignment of the related Participation Certificate contained in the Purchased Asset File is in the form required by the related participation agreement or is otherwise sufficient to assign such Participation Certificate.

7. No Defaults or Waivers under Participation Documents. All amounts due and owing to any Companion Interest Holder pursuant to the related participation agreement or related documents have been duly and timely paid. (a) There is (i) no default, breach or violation existing under any participation agreement or related document, and (ii) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, or violation under any participation agreement or related document, and (b) no default, breach or violation under any participation agreement or related document has been waived, that, in the case of either (a) or(b), materially and adversely affects the value of the Participation Interest; provided, however, that this representation and warranty does not cover any default, breach or violation that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by Seller in this Exhibit V. No person other than the holder of such Participation Interest or the related Companion Interests (or, in each case, a pledgee of any such Participation Interests) may declare any default, breach or violation under the applicable participation agreement or related documents.

8. Bankruptcy. As of the Purchase Date (to Seller’s Knowledge, if neither Seller nor an Affiliate thereof was the issuer of such Participation Interest), no issuer of such Participation Interest is a debtor in any outstanding in state or federal bankruptcy or insolvency proceeding. As of the Purchase Date (to Seller’s Knowledge, if neither Seller nor an Affiliate thereof is the Companion Interest Holder), no related Companion Interest Holder is a debtor in any outstanding in state or federal bankruptcy or insolvency proceeding.

Ex. V-A-26

9. No Known Liabilities. Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of such Participation Interest is or may become obligated.

10. Transfer. If Seller is the Record Holder, the Record Holder role, rights and responsibilities are assignable by Seller without consent or approval other than those that have been obtained and Seller will timely deliver to Custodian all necessary assignments, notices, and documents in order to convey record title of the related Mortgage Loan and, if applicable, the related Mezzanine Loan, and other rights and interests to Purchaser in its capacity as successor Record Holder;

11. No Repurchase. The terms of the related participation agreement do not require or obligate the holder of the Participation Interest or the Record Holder or their respective successors or assigns to repurchase any Companion Interest under any circumstances.

12. No Misrepresentations. Neither Seller nor any Affiliate thereof that is the issuer of such Participation Interest, in selling any Companion Interest to a Companion Interest Holder, committed any fraud or made any misrepresentation or omission of information Known to Seller or any Affiliate thereof necessary for a prudent commercial real estate lender to make an informed decision to purchase such Companion Interest.

13. UCC. Such Participation Interest (i) is not dealt in or traded on a securities exchange or in a securities market, (ii) does not by its terms expressly provide that it is a Security governed by Article 8 of the UCC, (iii) is not Investment Property, (iv) is not held in a Securities Account and (v) does not constitute a Security or a Financial Asset. The related Participation Certificate is an Instrument. For purposes of this paragraph (13), capitalized terms undefined in the Master Repurchase Agreement have the meaning given to such term in the UCC.

Ex. V-A-27

EXHIBIT V-B

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

(FOR FOREIGN PURCHASED ASSETS (GBP))

(attached)

Ex. V-B-1

EXHIBIT V-B

REPRESENTATIONS AND WARRANTIES

REGARDING INIDIVIDUAL PURCHASED ASSETS IN ENGLAND AND WALES

The following Representations and Warranties are made in respect of Purchased Assets where (and to the extent that) the Mortgaged Properties/y are/is located in England or Wales.

Capitalized terms used but not defined in this Exhibit V-B shall have the respective meanings given them in the Master Repurchase Agreement to which this Exhibit V-B is attached (the “Master Repurchase Agreement”).

Seller acknowledges and agrees that the representations and warranties contained in this Exhibit V-B may be amended from time to time by Purchaser in its reasonable discretion to conform such representations and warranties to Purchaser’s then current standard representations and warranties for commercial mortgage-backed securitization transactions; provided, that such amended representations and warranties shall only apply to Purchased Assets that are originated or first acquired by Seller or any of its Affiliates after the date Seller receives written notice of the amended representations and warranties.

REPRESENTATIONS AND WARRANTIES

With respect to each applicable Purchased Asset:

1. Such Purchased Asset complies with all of the representations and warranties set for in Exhibit V-A of the Master Repurchase Agreement, to the extent applicable for a Purchased Asset secured by Mortgaged Property located in England or Wales.

2. The relevant Seller’s share of the related Purchased Asset carries a right to repayment of principal under the related loan agreement (the related loan agreement as amended from time to time, the “Relevant Loan”) in an amount not less than the principal balance of the Seller’s share of the Relevant Loan disclosed in the Confirmation.

3. Subject to registration at the Land Registry in England and Wales (an application for which shall be submitted within the applicable priority period), and subject to any Title Exception which references this Warranty and which is expressed to be a derogation from this Warranty (if any), each Mortgage constitutes a first ranking charge by way of legal mortgage over the relevant Mortgaged Property and secures in priority to all other mortgages and charges all monies owing under the related Mortgage Loan or, to the extent that the Mortgage has not yet been registered, there is nothing preventing the related Mortgage becoming registered as a first ranking charge by way of legal mortgage.

4. The Purchased Asset carries a right to repayment of principal under the related Purchased Asset Documents in an amount not less than the principal balance of such Purchased Asset as disclosed in the Confirmation and the Purchased Asset is not subject to any right of set-off or counterclaim in favor of a Borrower.

5. Interest is charged on the relevant Seller’s share of the related Purchased Asset at such a rate or rates as may be determined in accordance with the provisions of the Relevant Loan.

6. On the basis of, and subject to the reservations and qualifications set out in, the legal opinions referred to in the Relevant Loan, the related Purchased Asset constitutes a valid and binding obligation of, and is enforceable against, the Borrowers, subject to the general principles of law limiting such valid and binding obligation and its enforceability.

7. Each relevant Seller or an Affiliate of the relevant Seller has, since the date of origination of the related Purchased Asset, kept or procured the keeping of full and commercially proper accounts, books and records showing clearly all transactions, payments, receipts, proceedings and notices relating to its relevant Seller share of the related Purchased Asset made or received by it or by an Affiliate of the relevant Seller and which are complete and accurate in all material respects and the said records are available to it on an unrestricted basis, or, to the relevant Seller’s Knowledge, such records have been kept by or on behalf of a predecessor-in-title to the relevant Seller, and, to the Seller’s Knowledge such records of a predecessor-in-title to the relevant Seller or an Affiliate of the relevant Seller are complete and accurate in all material respects.

8. So far as the relevant Seller is aware, no event of default (howsoever described) under the related Purchased Asset (each, a “Loan Event of Default”) or any event or circumstance which would (with the expiry of a grace period, the giving of notice, the making of any determination under the relevant documents or any combination of any of the foregoing) be a Loan Event of Default has occurred that has not been cured or waived.

9. The relevant Seller has not received any notice, and is not aware, that any Hedging Transaction is invalid, void, or is subject to a claim impairment the effect of which would reduce, impair or otherwise materially and adversely affect the Relevant Loan or the Relevant Security (as that term is defined below) for that Relevant Loan.

10. To the relevant Seller’s Knowledge there are no circumstances giving rise to a material reduction in the market value of the relevant Mortgaged Properties since the funding date of the relevant Purchased Asset (other than market forces generally).

11. Each relevant Seller is (subject only to delivery of any necessary notice which have been delivered or, to the extent not yet delivered, which shall be delivered within 5 Business Days of the date that this Warranty is made) the sole legal and beneficial owner of the relevant Purchased Asset and is the sole beneficial owner of its interest in the security granted by a Borrower in respect of the related Mortgage Loan (the “Relevant Security”) in each case free and clear of all encumbrances, claims and equities other than those contemplated by the Transaction Documents. The relevant Seller’s interest in the related Purchased Asset is transferred with full title guarantee.

12. Each relevant Seller is entitled, under the terms of the Relevant Loan and subject to the provisions for transfer as set out therein, to enter into the Relevant Loan, to execute and deliver a Transfer Certificate and to grant security to the Purchaser in accordance with the terms of the Relevant Loan, and to transfer the relevant Purchased Asset (and its interest in the Relevant Security relating to the same) to the Purchaser absolutely.

13. Prior to the advancing and purchase of the relevant Purchased Asset:

(a) the relevant Seller or a predecessor-in-title of the relevant Seller commissioned an adequate due diligence procedure which initially or after further investigation disclosed nothing which would have caused a reasonably prudent mortgage lender to decline to proceed with the advance on its agreed terms; and

Ex. V-B-3

(b) the relevant Seller or, to the Seller’s Knowledge, a predecessor-in-title of the relevant Seller have not become aware of any matter or thing since the date of origination or acquisition materially affecting the title of the Borrowers to any part of the Relevant Security which would have caused a reasonably prudent mortgage lender to decline to proceed with the advance on its agreed terms.

14. To the Sellers’ Knowledge no report on title given by a lawyer in connection with its or a predecessor-in-title’s origination of the relevant Purchased Asset was negligently or fraudulently prepared.

15. The Mortgaged Properties securing the relevant Purchased Asset were valued by an independent valuer prior to the advance of the relevant Purchased Asset (the related valuation, the “Initial Valuation”).

16. To the Sellers’ Knowledge, the Initial Valuation was not fraudulently undertaken by the relevant valuer and such Initial Valuation did not fail to disclose any fact or circumstance which, if disclosed, would have caused the relevant Sellers or a predecessor-in-title of the Relevant Seller to decline to proceed with the origination of the relevant Purchased Asset.

17. To the Sellers’ Knowledge, the origination and advance of the relevant Purchased Asset and any relevant Relevant Security and the circumstances of the Borrowers satisfied in all material respects the applicable parts of the relevant Seller’s underwriting and lending criteria, or of the underwriting and lending criteria of a predecessor-in-title to the relevant Seller.

18. Each relevant Seller and each predecessor-in-title to the relevant Seller has performed in all material aspects all of its obligations under or in connection with the relevant Purchased Asset and to the relevant Seller’s Knowledge the Borrowers have not taken or threatened to take any action against such relevant Seller or against any agent, security trustee or other administrative party under the Relevant Loan (together with the relevant Seller, the “Finance Parties”) for any material failure on the part of the Finance Parties under or in respect of the relevant Purchased Asset to perform any such obligations.

19. The relevant Seller has not received written notice of any default or forfeiture of any occupational lease granted in respect of any Mortgaged Property or of the insolvency of any tenant of any Mortgaged Property which would, in any case impair or otherwise materially and adversely affect the Related Security.

20. Prior to making the initial advance under the relevant Purchased Asset, (i) no written recommendation was received by the relevant Seller or a predecessor-in-title of the relevant Seller from any valuer in connection with its work on the Initial Valuation to carry out any further or additional environmental audit, survey or report of any Mortgaged Property which was not pursued (except for de minimis recommendations which, if not pursued, would be inconsistent with the performance of adequate due diligence), and (ii) if any such environmental audit, survey or report was performed prior to such origination or acquisition, the results of any such environmental audit, survey or report which was procured by the relevant Seller or a predecessor-in-title of the relevant Seller were made available to the valuer in respect of the Initial Valuation.

Ex. V-B-4

21. The sale of the relevant Purchased Asset pursuant to a Transaction will occur in the ordinary course of the business of the relevant Seller.

22. The relevant Borrowers had as at the date of origination of the relevant Purchased Asset, and have, subject to matters disclosed in the due diligence reports and the Property Reports which were disclosed to the valuer in connection with the Initial Valuation, good and marketable title to the Mortgaged Properties.

23. The relevant Sellers have not received and (to the relevant Seller’s Knowledge) no Finance Party has received written notice that any insurance policy in respect of a Mortgaged Property is about to lapse.

24. The relevant Seller has not received notice and the relevant Seller has no Knowledge of the bankruptcy, liquidation, receivership, administration or a winding up or administrative order or dissolution made against any Borrower or owner of a Mortgaged Property.

25. As of the Purchase Date, to the relevant Seller’s Knowledge, no amount of principal or interest due from the Borrowers has at any time been more than 5 Business Days overdue in respect of the related Purchased Asset.

26. No Mortgage Loan nor the related Mortgage consist of or includes any “stock” or “marketable securities” within the meaning of section 125 of the Finance Act 2003, “chargeable securities” for the purposes of section 99 of the Finance Act 1986, a “chargeable interest” for the purposes of section 48 of the Finance Act 2003 or a “chargeable interest” for the purposes of section 4 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017) (in each case, as such legislation may be amended, extended or re-enacted from time to time).

27. No agreement for any Mortgage Loan is in whole or in part a regulated agreement or consumer credit agreement (as defined in Section 8 of the Consumer Credit Act 1974 (as amended, extended or re-enacted from time to time).

Ex. V-B-5

EXHIBIT VI

ASSET INFORMATION

Asset ID #:	Hyper-Amortization Flag:
Applicable Currency:	Hyper-Amortization Term:
Asset Type: [Mortgage Loan][Mortgage Loan	Hyper-Amortization Rate Increase:
and Mezzanine Loan][Senior Note][Senior	Balloon Amount:
Participation]	Balloon LTV:
Borrower Name:	Prepayment Penalty Flag:
Borrower Address:	Prepayment Penalty Text:
Borrower City:	Lockout Period:
Borrower State:	Lien Position:
Borrower Zip Code:	Fee/Leasehold:
Recourse?	Ground Lease Expiration Date:
Guaranteed?	CTL (Yes/No):
Related Borrower Name(s):	CTL Rating (Moody’s):
Original Principal Balance:	CTL Rating (Duff):
Maximum Principal Balance:	CTL Rating (S&P):
Note Date:	CTL Rating (Fitch):
Loan Date:	Lease Guarantor:
Loan Type (e.g. fixed/arm):	CTL Lease Type (NNN, NN, Bondable):
Current Principal Balance:	Property Name:
Current Interest Rate (per annum):	Property Address:
Paid to date:	Property City:
Annual P&I:	Property Zip Code:
Next Payment due date:	Property Type (General):
Index (complete whether fixed or arm):	Property Type (Specific):
Gross Spread/Margin (complete whether fixed or arm):	Cross-collateralized (Yes/No):*
	Property Size:
Life Cap:	Year built:
Life Floor:	Year renovated:
Periodic Cap:	Actual Average Occupancy:
Periodic Floor:	Occupancy Rent Roll Date:
Rounding Factor:	Underwritten Average Occupancy:
Lookback (in days):	Largest Tenant:
Interest Calculation Method (e.g., Actual/360):	Largest Tenant SF:
Interest rate adjustment frequency:	Largest Tenant Lease Expiration:
P&I payment frequency:	2nd Largest Tenant:
First P&I payment due:	2nd Largest Tenant SF:
First interest rate adjustment date:	2nd Largest Tenant Lease Expiration:
First payment adjustment date:	3rd Largest Tenant:
Next interest rate adjustment date:	3rd Largest Tenant SF:
Next payment adjustment date:	3rd Largest Tenant Lease Expiration:
Conversion Date:
Converted Interest Rate Index:	*  If yes, give property information on each property covered and in aggregate as appropriate. Asset ID’s should be denoted with a suffix letter to signify loans/collateral.
Converted Interest Rate Spread:
Maturity date:
ARD Loan?
Loan term:
Amortization term:

Ex. VI-1

Underwritten Average Rental Rate/ADR:

Underwritten Vacancy/Credit Loss:

Underwritten Other Income:

Underwritten Total Revenues:

Underwritten Replacement Reserves:

Underwritten Management Fees:

Underwritten Franchise Fees:

Underwritten Total Expenses:

Underwritten Leasing Commissions:

Underwritten Tenant Improvement Costs:

Underwritten NOI:

Underwritten NCF:

Underwritten Debt Service Constant:

Underwritten DSCR at NOI:

Underwritten DSCR at NCF:

Underwritten NOI Period End Date:

Hotel Franchise:

Hotel Franchise Expiration Date:

Appraiser Name:

Appraised Value:

Appraisal Date:

Appraisal Cap Rate:

Appraisal Discount Rate:

Underwritten LTV:

Environmental Report Preparer:

Environmental Report Date:

Environmental Report Issues:

Covered by Environmental Insurance (Yes/No):

Architectural and Engineering Report Preparer:

Architectural and Engineering Report Date:

Deferred Maintenance Amount:

Ongoing Replacement Reserve Requirement per A&E Report:

Immediate Repairs Escrow % (e.g. [___]%):

Replacement Reserve Annual Deposit:

Replacement Reserve Balance:

Tenant Improvement/Leasing Commission Annual Deposits:

Tenant Improvement/Leasing Commission Balance:

Taxes paid through date:

Monthly Tax Escrow:

Tax Escrow Balance:

Insurance paid through date:

Monthly Insurance Escrow:

Insurance Escrow Balance:

Reserve/Escrow Balance as of Date:

Probable Maximum Loss %:

Covered by Earthquake Insurance (Yes/No):

Number of times 30 days late in last 12 months:

Number of times 60 days late in last 12 months:

Number of times 90 days late in last 12 months:

Servicing Fee:

Secondary Financing in Place (Yes/No)

Secondary Financing Amount

Secondary Financing Description

Future Supplemental Financing (Yes/No)

Future Supplemental Financing Description Notes:

Ex. VI-2

EXHIBIT VII

ADVANCE PROCEDURES

Timing set forth in this Exhibit reflects typical timing Purchaser needs to review the Due Diligence Package. Purchaser will reasonably cooperate with Seller to accommodate shorter timing, as needed, on a case by case basis.

Submission of Due Diligence Package. No less than ten (10) Business Days prior to the each Purchase Date, Seller shall deliver to Purchaser for Purchaser’s review and approval a due diligence package with respect to each Eligible Asset proposed to be purchased on such proposed Purchase Date, which shall contain the following items to the extent such items are applicable to such Eligible Asset and are in Seller’s possession or available to it (the “Due Diligence Package”):

(1) Purchased Asset Documents. With respect to each Eligible Asset:

(a) if such Eligible Asset is not a Wet Purchased Asset, each of the Purchased Asset Documents, blacklined against the approved form Purchased Asset Documents; provided, however, if such Eligible Asset has not been originated and closed at the time of such delivery, Seller shall deliver copies of all draft Purchased Asset Documents, blacklined against the approved form Purchased Asset Documents (with executed copies of all Purchased Asset Documents to be delivered no less than three (3) Business Days prior to the proposed Purchase Date);

(b) if such Eligible Asset is a Wet Purchased Asset, (i) copies of all draft Purchased Asset Documents, along with blacklines against the approved form Purchased Asset Documents, (ii) no later than 11:00 a.m. on the Business Day before the requested Purchase Date, execution versions in final form of (A) the Promissory Note endorsed by the Seller in blank, without recourse (either on the face thereof or pursuant to a separate allonge) and, with respect to Foreign Purchased Assets, copies of all Transfer Certificates (or equivalent documentation in any relevant jurisdiction) duly completed and executed by the relevant parties, (B) the Mortgage and/or pledge agreement, (C) evidence satisfactory to Purchaser that all documents necessary to perfect Seller’s (and, by means of assignment to Purchaser on the Purchase Date, Purchaser’s) security interest in the collateral (or, in the case of a Foreign Purchased Asset, evidence satisfactory to the Purchaser of all filings, recordings, notifications and/or regulations required under applicable Requirements of Law in the relevant non-U.S. jurisdiction to perfect a valid first priority legal mortgage or charge in the collateral) and (D) such other components of the Purchased Asset File as Purchaser may reasonably require on a case by case basis with respect to the particular Purchased Asset, in each case, along with blacklines of such executed Purchased Asset Documents against the previously delivered drafts and (iii) not later than the third (3rd) Business Day following the related Purchase Date, executed copies of all Purchased Asset Documents along with blacklines of such executed Purchased Asset Documents against the previously delivered drafts.

Ex. VII-1

(c) if such Eligible Asset is a Wet Purchased Asset, a fully executed and delivered Bailee Letter and Bailee Trust Receipt;

(d) certificates or other evidence of insurance demonstrating insurance coverage in respect of the underlying real estate directly or indirectly securing or supporting such Eligible Asset of types, in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in the Purchased Asset Documents; provided, however, with respect to any Wet Purchased Asset, if such certificates or other evidence of insurance are not available at least ten (10) Business Day prior to the related Purchase Date, Seller shall deliver such certificates or other evidence of insurance to Purchaser as soon as they are available thereafter, and in any case, by no later than 10:00 a.m. on the Business Day before the requested Purchase Date. Such certificates or other evidence shall indicate that Seller, will be named as an additional insured as its interest may appear and shall contain a loss payee endorsement in favor of such additional insured with respect to the policies required to be maintained under the Purchased Asset Documents;

(e) all surveys of the underlying real estate directly or indirectly securing or supporting such Eligible Asset;

(f) as reasonably requested by Purchaser, reasonably satisfactory reports of UCC, tax lien, judgment and litigation searches and title updates conducted by search firms and/or title companies reasonably acceptable to Purchaser with respect to the Eligible Asset, underlying real estate directly or indirectly securing or supporting such Eligible Asset and Borrower, such searches to be conducted in such location reasonably satisfactory to Purchaser;

(g) an unconditional commitment to issue a Title Policy in favor of Seller and Seller’s successors and/or assigns with respect to Seller’s interest in the related real property and insuring the assignment of the Eligible Asset to Purchaser, with an amount of insurance that shall be not less than the maximum principal amount of the Eligible Asset, or an endorsement or confirmatory letter from the title insurance company that issued the existing title insurance policy, in favor of Seller and Seller’s successors and/or assigns, that amends the existing title insurance policy by stating that the amount of the insurance is not less than the maximum principal amount of the Eligible Asset (taking into account the proposed advance); and

(h) certificates of occupancy and letters certifying that the property is in compliance with all applicable zoning laws, each issued by the appropriate Governmental Authority.

Ex. VII-2

(2) Transaction-Specific Due Diligence Materials. Each of the following:

(a) a summary memorandum outlining the proposed Transaction, including transaction benefits and all material underwriting risks and all Underwriting Issues,

(b) the Asset Information and, if available, maps and photos of the underlying real estate directly or indirectly securing or supporting such Eligible Asset;

(c) a current rent roll and roll over schedule;

(d) a cash flow pro-forma, plus historical information;

(e) a description of the underlying real estate directly or indirectly securing or supporting such Eligible Asset and any other collateral securing such Eligible Asset, the related collateral securing such Eligible Asset, if any;

(f) indicative debt service coverage ratios;

(g) indicative loan-to-value ratios;

(h) a term sheet outlining the transaction generally;

(i) a description of the Borrower and sponsor, including experience with other projects (real estate owned), their ownership structure (including, without limitation, the board of directors, if applicable) and financial statements, if available;

(j) a description of Seller’s relationship, if any, to the Borrower and sponsor; and

(k) copies of documents evidencing such Eligible Asset, or current drafts thereof, including, without limitation, underlying debt and security documents, guaranties, the underlying borrower’s and guarantor’s organizational documents, warrant agreements, and loan and collateral pledge agreements, as applicable, provided that, if same are not available to Seller at the time of Seller’s submission of the Due Diligence Package to Purchaser, Seller shall deliver such items to Purchaser promptly upon Seller’s receipt of such items.

(3) Environmental and Engineering. A “Phase 1” (and, if recommended by such “Phase 1”, “Phase 2”) environmental report, an asbestos survey, if applicable, and an engineering report, each in form reasonably satisfactory to Purchaser, by an engineer or environmental consultant reasonably approved by Purchaser.

(4) Credit Memorandum. A credit memorandum, asset summary or other similar document that details cash flow underwriting, historical operating numbers, underwriting footnotes, rent roll and lease rollover schedule.

Ex. VII-3

(5) Appraisal. An appraisal by a member of the Appraisal Institute performed in accordance with The Federal Institutions Reform, Recovery and Enforcement Act of 1989, as amended. The related appraisal shall (A) be dated less than twelve (12) months prior to the origination of the Eligible Asset and (B) not be ordered by the related borrower or an Affiliate of the related borrower.

(6) Opinions of Counsel. Copies of all opinions of counsel addressed to Seller and its successors and assigns from counsel to the underlying obligor on the underlying loan transaction (including, without limitation, as to enforceability of the loan documents, due formation, authority, choice of law, bankruptcy and perfection of security interests) delivered in connection with the origination thereof; provided that Seller may deliver drafts of such opinions if the relevant Eligible Asset is a Wet Purchased Asset, and shall deliver final, executed copies of such opinions (with blacklines to the previously distributed drafts) on the Purchase Date of such Eligible Asset; provided, further, that with respect to Eligible Assets which provide that the Borrower must be a Single-Purpose Entity (as defined in Exhibit V), a counsel’s opinion regarding non-consolidation of the Borrower shall not be required if such Eligible Asset has a maximum principal balance of less than $20 million as of the proposed Purchase Date.

(7) Additional Real Estate Matters. To the extent obtained by Seller from the Borrower or the underlying obligor at the origination of the Eligible Asset, such other real estate related certificates and documentation as may have been requested by Purchaser, such as abstracts of all leases in effect at the real property relating to such Eligible Asset.

(8) Exceptions Report. A list of all exceptions to the representations and warranties set forth in Exhibit VI to this Agreement relating to the Purchased Asset and any other Eligibility Criteria for such Purchased Asset (the “Requested Exceptions Report”).

(9) Know Your Customer Information. All documentation and other information received, and the results of all searched and investigations performed, as part of “Know Your Customer” and Sanctions diligence with respect to the related Borrower, guarantor and related parties.

(10) Other Documents. Any other documents as Purchaser or its counsel shall reasonably deem necessary.

(11) Approval of Eligible Asset. Conditioned upon the timely and satisfactory completion of Seller’s requirements in clause (a) above, Purchaser shall endeavor to, no less than two (2) Business Days prior to the proposed Purchase Date (i) notify Seller in writing (which may take the form of electronic mail format) that Purchaser has not approved the proposed Eligible Asset as a Purchased Asset or (ii) notify Seller in writing (which may take the form of electronic mail format) that Purchaser has approved the proposed Eligible Asset as a Purchased Asset. Purchaser’s failure to respond to Seller on or prior to two (2) Business Days prior to the proposed Purchase Date, shall be deemed to be a denial of Seller’s request that Purchaser approve the proposed Eligible Asset, unless Purchaser and Seller has agreed otherwise in writing.

Ex. VII-4

(12) Assignment Documents. No less than two (2) Business Days prior to the proposed Purchase Date, Seller shall have delivered to Purchaser, in form and substance reasonably satisfactory to Purchaser and its counsel, execution versions of all applicable assignment documents in blank with respect to the proposed Eligible Asset that shall be subject to no liens except as expressly permitted by Purchaser. Each of the assignment documents shall contain such representations and warranties in writing concerning the proposed Eligible Asset and such other terms as in each case shall be reasonably satisfactory to Purchaser.

Ex. VII-5

EXHIBIT VIII

FORM OF MARGIN CALL

[DATE]

Via Electronic Transmission

[Parlex 3A Finco, LLC]

[Parlex 3A UK Finco, LLC]

[Parlex 3A EUR Finco, LLC]

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue, 42nd Floor

New York, New York 10154

Attention: Douglas Armer

Email: BXMTBarclaysFacility@blackstone.com

Re: Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as further amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”) by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”)

Ladies and Gentlemen:

Pursuant to Article 4(a) of the Master Repurchase Agreement, Purchaser hereby notifies Sellers that a Margin Deficit Event has occurred as set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement.

Purchased Asset:
(a)	Maximum Purchase Price of Purchased Asset:	[$][€][£]
(b)	Outstanding Purchase Price of Purchased Asset:	[$][€][£]
(c)	Margin Deficit ((a) minus (b)):	[$][€][£]

A Margin Deficit Event exists with respect to the Purchased Asset identified above when the amount in (c) above is at least $250,000.

MARGIN DEFICIT:	[$][€][£]
Accrued interest from                  to                 :	[$][€][£]
TOTAL AMOUNT DUE:	[$][€][£]

WHEN A MARGIN DEFICIT EVENT EXISTS, SELLERS ARE REQUIRED TO CURE THE MARGIN DEFICIT SPECIFIED ABOVE IN ACCORDANCE WITH THE MASTER REPURCHASE AGREEMENT AND WITHIN THE TIME PERIOD SPECIFIED IN ARTICLE 4(b) THEREOF.

Ex. VIII-1

BARCLAYS BANK PLC
By:
	Name:
	Title:

Ex. VIII-2

EXHIBIT IX

FORM OF RELEASE LETTER

[DATE]

Barclays Bank PLC

745 7th Avenue

New York, New York 10019

Attention: Francis X. Gilhool, Jr.

Re: Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as further amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”) by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”)

Ladies and Gentlemen:

With respect to the Purchased Assets described in the attached Schedule A (the “Purchased Assets”) (a) we hereby certify to you that the Purchased Assets are not subject to a lien of any third party, and (b) we hereby release to you all rights, interests or claims of any kind other than any rights, interests or claims under the Master Repurchase Agreement with respect to such Purchased Assets, such release to be effective automatically without further action by any party upon payment by Purchaser of the amount of the Purchase Price contemplated under the Master Repurchase Agreement (calculated in accordance with the terms thereof) in accordance with the wiring instructions set forth in the Master Repurchase Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement.

Very truly yours,
[PARLEX 3A FINCO, LLC][ PARLEX 3A UK FINCO, LLC][ PARLEX 3A EUR FINCO, LLC]
By:
	Name:
	Title:

Ex. IX-1

Schedule A

[List of Purchased Asset Documents]

Ex. IX-2

EXHIBIT X

FORM OF COVENANT COMPLIANCE CERTIFICATE

[DATE]

Barclays Bank PLC

745 7th Avenue

New York, New York 10019

Attention: Francis X. Gilhool, Jr.

Re: Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as further amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”) by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”)

Ladies and Gentlemen:

This Covenant Compliance Certificate is furnished pursuant to that Master Repurchase Agreement and the Amended and Restated Guaranty dated as of June 19, 2019 (the “Guaranty”) made by Blackstone Mortgage Trust, Inc. (“Guarantor”) in favor of Purchaser. Capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

(i) I am a duly elected, qualified and authorized [Chief Financial Officer] of Guarantor.

(ii) All of the financial statements, calculations and other information set forth in this Covenant Compliance Certificate, including, without limitation, in any exhibit or other attachment hereto, are true, complete and correct in all material respects as of the date hereof.

(iii) I have reviewed the terms of the Master Repurchase Agreement, the Guaranty and the other Transaction Documents and I have made, or have caused to be made under my supervision, a detailed review of the transactions and financial condition of the Seller Parties during the accounting period covered by the financial statements attached (or most recently delivered to Purchaser if none are attached).

(iv) I am not aware of any facts or circumstances that, in the commercially reasonable judgement of Seller, have caused, or are reasonably likely to cause the Market Value of any Purchased Asset to decline at any time within the reasonably foreseeable future.

Ex. X-1

(v) As of the date hereof, and since the date of the certificate most recently delivered pursuant to Article 12(b)(v) of the Master Repurchase Agreement, each Seller Party has observed or performed in all material respects all of its covenants and other agreements, and satisfied in all material respects every condition, contained in the Master Repurchase Agreement, the Guaranty and the other Transaction Documents to be observed, performed or satisfied by it.

(vi) [IF FINANCIAL STATEMENTS ARE NOT ATTACHED: The examinations described in paragraph (iii) above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or an Event of Default as of the date of this Covenant Compliance Certificate (including immediately after giving effect to any pending Transactions requested to be entered into), except as set forth below.] [IF FINANCIAL STATEMENTS ARE ATTACHED: The examinations described in paragraph (iii) above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or an Event of Default during or at the end of the accounting period covered by the attached financial statements, or as of the date of this Covenant Compliance Certificate (including immediately after giving effect to any pending Transactions requested to be entered into), except as set forth below.]

(vii) As of the date hereof, each of the representations and warranties made by each Seller Party in any Transaction Document is true, correct and complete in all material respects with the same force and effect as if made on and as of the date hereof, other than as set forth in any Requested Exceptions Report approved by Purchaser in accordance with the Master Repurchase Agreement.

(viii) Each Seller Party hereby represents and warrants on behalf of itself that (i) it is in compliance in all material respects with all of the terms and conditions of the Transaction Documents to which it is a party and (ii) it has no claim or offset against Purchaser under such Transaction Documents.

(ix) To the best of my knowledge, each Seller Party has, during the period since the delivery of the immediately preceding Covenant Compliance Certificate, observed or performed all of its covenants and other agreements in all material respects, and satisfied in all material respects every condition, contained the Master Repurchase Agreement, the Guaranty and the other Transaction Documents to be observed, performed or satisfied by it, and I have no knowledge of the occurrence during such period, or present existence, of any condition or event which constitutes a Default or an Event of Default (in each case, including immediately after giving effect to any pending Transactions requested to be entered into), except as set forth below.

(x) [IF FINANCIAL SUMMARY PROPERTY PERFORMANCE REPORTS ARE ATTACHED: Attached hereto are the summary property performance reports required to be delivered pursuant to Article 12(b) of the Master Repurchase Agreement, which reports, to the best of my knowledge after due inquiry, fairly

Ex. XI-2

and accurately present in all material respects the related Purchased Assets as of the date or with respect to the period therein specified, determined in accordance with the requirements set forth in Article 12(b) of the Master Repurchase Agreement.]

(xi) [IF FINANCIAL STATEMENTS ARE ATTACHED: Attached hereto are the calculations demonstrating compliance with the financial covenants set forth in Article V(k) of the Guaranty.]

Described below are the exceptions, if any, to any of the foregoing, listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the applicable Seller Party has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications, together with the financial statements, updates, reports, materials, calculations and other information set forth in any exhibit or other attachment hereto, or otherwise covered by this Covenant Compliance Certificate, are made and delivered as of the date first above written.

BLACKSTONE MORTGAGE TRUST, INC.

By:
	Name:
	Title:

Ex. XI-3

EXHIBIT XI

FORM OF REDIRECTION LETTER

[PARLEX 3A FINCO, LLC]

[PARLEX 3A UK FINCO, LLC]

[PARLEX 3A EUR FINCO, LLC]

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue

New York, New York 10154

REDIRECTION LETTER

AS OF [        ], 201[    ]

[Servicer][Borrower]

Ladies and Gentlemen:

Please refer to: (a) that certain [Loan Agreement], dated [_________], 201[ ], by and between [____________] (the “Borrower”), as borrower, and [Parlex 3A Finco, LLC][Parlex 3A UK Finco, LLC][Parlex 3A EUR Finco, LLC], a Delaware limited liability company (the “Lender”), as lender; and (b) all documents securing or relating to that certain $[__________] loan made by the Lender (or its predecessor in interest) to the Borrower on [___________], 20[    ] (the “Loan”).

You are advised as follows, effective as of the date of this letter.

Assignment of the Loan. The Lender has entered into an Amended and Restated Master Repurchase Agreement, dated as of June 19, 2019 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), with Barclays Bank PLC (“Barclays”), and has assigned its rights and interests in the Loan (and all of its rights and remedies in respect of the Loan) to Barclays subject to the terms of the Repurchase Agreement. This assignment shall remain in effect unless and until Barclays has notified you otherwise in writing.

Direction of Funds. In connection with the Lender’s obligations under the Repurchase Agreement, the Lender hereby directs you to disburse, by wire transfer, any and all payments to be made under or in respect of the Loan as and when due and payable to the Lender to the following account at PNC Bank, National Association for the benefit of Barclays:

PNC Bank, National Association

ABA #[___________]

Deposit Acct No.: [___________]

Deposit Account Name: Midland Loan Services, a Division of PNC Bank, National Association, on behalf of [Parlex 3A Finco, LLC][Parlex 3A UK Finco, LLC][Parlex 3A EUR Finco, LLC], for the benefit of Barclays Bank PLC – Deposit Account

Ex. XI-4

This direction shall remain in effect unless and until Barclays has notified you otherwise in writing.

Modifications, Waivers, Etc. No modification, waiver, deferral, or release (in whole or in part) of any party’s obligations in respect of this letter shall be effective without the prior written consent of Barclays.

Please acknowledge your acceptance of the terms and directions contained in this correspondence by executing a counterpart of this correspondence and returning it to the undersigned.

[SIGNATURE PAGE FOLLOWS]

Ex. XI-5

Very truly yours,

[PARLEX 3A FINCO, LLC][ PARLEX 3A

UK FINCO, LLC][ PARLEX 3A EUR FINCO, LLC]

By:
	Name:
	Title:

Agreed and accepted this [____]

        day of [____________], 201[__]

[____________________]

By:
	Name:
	Title:

Ex. XI-6

EXHIBIT XII

FORM OF BAILEE LETTER

[PARLEX 3A FINCO, LLC]

[PARLEX 3A UK FINCO, LLC]

[PARLEX 3A EUR FINCO, LLC]

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue, 42nd Floor

New York, New York 10154

_______________ __, 20__

Barclays Bank PLC

745 7th Avenue

New York, New York 10019

Attention: Francis X. Gilhool, Jr.

Email: francis.gilhool@barclayscapital.com

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036-8704

Attn: Daniel L. Stanco, Esq.

Email: Daniel.Stanco@ropesgray.com

Re: Bailee Agreement (the “Bailee Agreement”) in connection with the sale of [Name of Purchased Asset(s)] by [Parlex 3A Finco, LLC][Parlex 3A UK Finco, LLC][Parlex 3A EUR Finco, LLC] (“Seller”) to Barclays Bank PLC (“Purchaser”)

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Master Repurchase Agreement dated as of June 19, 2019, by and between Seller and Purchaser (as the same may be amended, modified or supplemented from time to time, the “Repurchase Agreement”). In consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller, Purchaser and Ropes & Gray LLP (“Bailee”) hereby agree as follows:

1. Seller shall deliver to Bailee and Bailee shall hold, in connection with the Purchased Asset[s] delivered to Bailee hereunder (for Bailee’s delivery to the Custodian), the custodial delivery certificate (the “Custodial Delivery Certificate”) attached hereto as Attachment 1, in connection with the Purchased Asset[s] identified thereon.

2. On or prior to the date indicated on the Custodial Delivery Certificate delivered by Seller (the “Funding Date”), Seller shall have delivered to Bailee, as bailee for hire, the documents set forth on Exhibit B to the Custodial Delivery Certificate (collectively, the “Purchased Asset File[s]”) for the Eligible Asset[s] (the “Purchased Asset[s]”) listed in Exhibit A to the Custodial Delivery Certificate.

Ex. XII-1

3. Bailee shall issue and deliver to Purchaser and the Custodian (as defined in Section 5 below) on or prior to the Funding Date by electronic mail in the name of Purchaser, an initial trust receipt and certification in the form of Attachment 2 attached hereto (the “Trust Receipt”), which Trust Receipt shall state that Bailee has received the documents comprising the Purchased Asset File[s] as set forth in the Custodial Delivery Certificate.

4. On the applicable Funding Date, in the event that Purchaser fails to purchase any Eligible Asset from Seller that is identified in the related Custodial Delivery Certificate (as confirmed by Purchaser in writing (which may include electronic mail)), Bailee shall release the Purchased Asset File[s] to Seller in accordance with Seller’s instructions.

5. Following the Funding Date and the funding of the Purchase Price for the applicable Purchased Asset[s], Bailee shall forward the Purchased Asset File[s] to U.S. Bank, National Association (the “Custodian”), at 1133 Rankin Street, Suite 100, St. Paul, Minnesota 55116, Attention: Commercial Review Team, by insured overnight courier for receipt by the Custodian no later than 1:00 p.m. on the third (3^rd) Business Day following the applicable Funding Date (the “Delivery Date”).

6. From and after the applicable Funding Date until the time of receipt of Purchaser’s written confirmation as described in Section 4 hereof or the applicable Delivery Date, as applicable, Bailee (a) shall maintain continuous custody and control of the related Purchased Asset File[s] as bailee for Purchaser (excluding any period when the same [is/are] under the delivery process described in Section 5 hereof) and (b) shall hold the related Purchased Asset File[s] as sole and exclusive bailee for Purchaser unless and until otherwise instructed in writing by Purchaser.

7. In the event that Bailee fails to deliver to Purchaser a Promissory Note or other material portion of a Purchased Asset File[s] that was in its possession to the Custodian within five (5) Business Days following the applicable Funding Date and the funding of the Purchase Price for the applicable Purchased Asset[s], the same shall constitute a “Bailee Delivery Failure” under this Bailee Agreement.

8. Seller agrees to indemnify and hold Bailee and its partners, directors, officers and employees harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including reasonable attorneys’ fees and costs, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of this Bailee Agreement or any action taken or not taken by it or them hereunder unless such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (other than special, indirect, punitive or consequential damages, which shall in no event be paid by Bailee) were imposed on, incurred by or asserted against Bailee because of the breach by Bailee of its obligations hereunder, which breach was caused by gross negligence or willful misconduct on the part of Bailee or any of its partners, directors, officers, agents or employees. The foregoing indemnification shall survive any resignation or removal of Bailee or the termination or assignment of this Bailee Agreement.

Ex. XII-2

9. Bailee agrees to indemnify and hold Purchaser and its owners, officers, directors, employees, affiliates and designees, harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (other than special, indirect, punitive or consequential damages, which shall in no event be paid by the Bailee), including reasonable attorneys’ fees and costs of outside counsel, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of a Bailee Delivery Failure that was caused by the gross negligence or willful misconduct on the part of Bailee or any of its partners, directors, officers or employees. The foregoing indemnification shall survive any termination or assignment of this Bailee Agreement.

10. Seller hereby represents, warrants and covenants that Bailee is not an affiliate of or otherwise controlled by Seller. Notwithstanding the foregoing, the parties hereby acknowledge that Bailee hereunder may act as counsel to Seller in connection with a proposed Transaction and may represent Seller in connection with any dispute related to this Bailee Agreement or the Transaction Documents.

11. This Bailee Agreement may not be modified, amended or altered, except by written instrument, executed by all of the parties hereto.

12. This Bailee Agreement may not be assigned by Seller or Bailee without the prior written consent of Purchaser.

13. For the purpose of facilitating the execution of this Bailee Agreement as herein provided and for other purposes, this Bailee Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute and be one and the same instrument. Electronically transmitted signature pages shall be binding to the same extent.

14. This Bailee Agreement shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

15. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Repurchase Agreement.

[SIGNATURES COMMENCE ON NEXT PAGE]

Ex. XII-3

Very truly yours,
[PARLEX 3A FINCO, LLC][ PARLEX 3A UK FINCO, LLC][ PARLEX 3A EUR FINCO, LLC]
By:
	Name:
	Title:

ACCEPTED AND AGREED:
ROPES & GRAY LLP, as Bailee
By:
	Name:
	Title:

ACCEPTED AND AGREED:
BARCLAYS BANK PLC, as Purchaser
By:
	Name:
	Title:

Ex. XII-4

ATTACHMENT 1 TO BAILEE AGREEMENT

CUSTODIAL DELIVERY CERTIFICATE

[See attached]

ATTACHMENT 2 TO BAILEE AGREEMENT

FORM OF BAILEE TRUST RECEIPT

____________, 201__

Barclays Bank PLC

745 7th Avenue

New York, New York 10019

Attention: Francis X. Gilhool, Jr.

Email: francis.gilhool@barclayscapital.com

Re: Bailee Agreement, dated __________, 201___ (the “Bailee Agreement”) among [Parlex 3A Finco, LLC][Parlex 3A UK Finco, LLC][Parlex 3A EUR Finco, LLC] (“Seller”), Barclays Bank PLC (“Purchaser”) and Ropes & Gray LLP (“Bailee”)

Ladies and Gentlemen:

In accordance with the provisions of Section 3 of the above-referenced Bailee Agreement, the undersigned, as Bailee, hereby certifies that as to the Purchased Asset[s] described in Exhibit A to the Custodial Delivery Certificate, it has reviewed the Purchased Asset File[s] and has determined that all documents listed in Exhibit B to the Custodial Delivery Certificate are in its possession.

Bailee hereby confirms that it is holding the Purchase Loan File[s] as agent and bailee for the exclusive use and benefit of Purchaser pursuant to the terms of the Bailee Agreement.

All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the above-referenced Bailee Agreement.

ROPES & GRAY LLP,     as Bailee
By:
	Name:
	Title:

EXHIBIT XIII-A

FORM OF U.S. TAX COMPLIANCE CERTIFICATES

(For Foreign Purchasers That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Amended and Restated Master Repurchase Agreement dated as of June 19, 2019 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”).

Pursuant to the provisions of Section 32 of the Repurchase Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the obligations in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a ten percent shareholder of any Seller that is a U.S. Person or Guarantor within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (iv) it is not a controlled foreign corporation related to the Sellers or Guarantor as described in Section 881(c)(3)(C) of the Internal Revenue Code.

The undersigned has furnished Sellers with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Sellers, and (2) the undersigned shall have at all times furnished Sellers with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Repurchase Agreement and used herein shall have the meanings given to them in the Repurchase Agreement.

Date: ___________ ___, 20[__]

[NAME OF PURCHASER]

By:
	Name:
	Title:

EXHIBIT XIII-B

FORM OF U.S. TAX COMPLIANCE CERTIFICATES

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Amended and Restated Master Repurchase Agreement dated as of June 19, 2019 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”).

Pursuant to the provisions of Section 32 of the Repurchase Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a ten percent shareholder of any Seller that is a U.S. Person or Guarantor within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, and (iv) it is not a controlled foreign corporation related to the Sellers or Guarantor as described in Section 881(c)(3)(C) of the Internal Revenue Code.

The undersigned has furnished its participating Purchaser with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Purchaser in writing, and (2) the undersigned shall have at all times furnished such Purchaser with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Repurchase Agreement and used herein shall have the meanings given to them in the Repurchase Agreement.

Date: ___________ ___, 20[__]

[NAME OF PARTICIPANT]

By:
	Name:
	Title:

EXHIBIT XIII-C

FORM OF U.S. TAX COMPLIANCE CERTIFICATES

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Amended and Restated Master Repurchase Agreement dated as of June 19, 2019 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”).

Pursuant to the provisions of Section 32 of the Repurchase Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Seller that is a U.S. Person or Guarantor within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Sellers or Guarantor as described in Section 881(c)(3)(C) of the Internal Revenue Code.

The undersigned has furnished its participating Purchaser with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Purchaser and (2) the undersigned shall have at all times furnished such Purchaser with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Repurchase Agreement and used herein shall have the meanings given to them in the Repurchase Agreement.

Date: ___________ ___, 20[__]

[NAME OF PARTICIPANT]

By:
	Name:
	Title:

EXHIBIT XIII-D

FORM OF U.S. TAX COMPLIANCE CERTIFICATES

(For Foreign Purchasers That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Amended and Restated Master Repurchase Agreement dated as of June 19, 2019 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), by and among Barclays Bank PLC (“Purchaser”), Parlex 3A Finco, LLC (“US Seller”), Parlex 3A UK Finco, LLC (“UK Seller”) and Parlex 3A EUR Finco, LLC (“EUR Seller” and together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”).

Pursuant to the provisions of Section 32 of the Repurchase Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the obligations in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such obligations, (iii) with respect to the extension of credit pursuant to this Repurchase Agreement or any other Transaction Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Seller that is a U.S. Person or Guarantor within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Sellers or Guarantor as described in Section 881(c)(3)(C) of the Internal Revenue Code.

The undersigned has furnished Sellers with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Sellers, and (2) the undersigned shall have at all times furnished Sellers with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Repurchase Agreement and used herein shall have the meanings given to them in the Repurchase Agreement.

Date: ___________ ___, 20[__]

[NAME OF PURCHASER]

By:
	Name:
	Title:

EX-10

Exhibit 10.3

EXECUTION VERSION

AMENDED AND RESTATED GUARANTY

AMENDED AND RESTATED GUARANTY, dated as of June 19, 2019 (this “Guaranty”), made by BLACKSTONE MORTGAGE TRUST, INC., a Maryland corporation, together with its successors and its permitted assigns (“Guarantor”), for the benefit of BARCLAYS BANK PLC, a public limited company organized under the laws of England and Wales (“Purchaser”).

W I T N E S E T H:

WHEREAS, Purchaser and PARLEX 3A FINCO, LLC, a limited liability company organized under the laws of the State of Delaware (“US Seller”), PARLEX 3A UK FINCO, LLC, a limited liability company organized under the laws of the State of Delaware (“UK Seller”), and PARLEX 3A EUR FINCO, LLC, a limited liability company organized under the laws of the State of Delaware (“EUR Seller” and, together with US Seller and UK Seller, each a “Seller” and collectively, “Sellers”), are parties to that certain Amended and Restated Master Repurchase Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”), which amends, restates and replaces that certain Master Repurchase Agreement dated as of March 30, 2018, between US Seller and Purchaser (the “Existing Repurchase Agreement”);

WHEREAS, Guarantor indirectly owns one hundred percent (100%) of the Capital Stock of each Seller;

WHEREAS, Guarantor will benefit, directly and indirectly, from the execution, delivery and performance by Sellers of the Transaction Documents, and the transactions contemplated by the Transaction Documents;

WHEREAS, it is a condition precedent to the initial funding under the Master Repurchase Agreement that Guarantor execute and deliver this Guaranty for the benefit of Purchaser, which amends, restates and replaces that certain Guaranty dated as of March 30, 2018, from Guarantor in favor of Purchaser (the “Existing Guaranty”) that was delivered in connection with the Existing Repurchase Agreement, and Purchaser is unwilling to enter into the Master Repurchase Agreement or the other Transaction Documents or the transactions contemplated thereby without the benefit of this Guaranty; and

NOW, THEREFORE, for good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, and to induce Purchaser to enter into the Master Repurchase Agreement and the other Transaction Documents, Guarantor hereby agrees as follows:

ARTICLE I.

DEFINITIONS; INTERPRETATION

(a) Each of the definitions set forth on Exhibit A hereto are, solely for the purposes of Article V(k) hereof, hereby incorporated herein by reference. Unless otherwise defined herein, terms defined in the Master Repurchase Agreement and used herein shall have the meanings given to them in the Master Repurchase Agreement.

(b) The following term shall have the meaning set forth below:

“Guaranteed Obligations” shall mean (i) all obligations and liabilities of each Seller to Purchaser, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, or whether for payment or for performance (including, without limitation, Purchase Price Differential accruing after the Repurchase Date for any Transaction and Purchase Price Differential accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Seller, whether or not a claim for post filing or post-petition interest is allowed in such proceeding), which arise under, or out of or in connection with the Master Repurchase Agreement and any other Transaction Documents, whether on account of the Repurchase Price for the Purchased Assets, Purchase Price Differential, reimbursement obligations, fees, indemnities, costs, and expenses (including, without limitation, all fees and disbursements of outside counsel to the Purchaser), in each case that are required to be paid by the applicable Seller pursuant to the terms of such documents, all “claims” (as defined in Section 101 of the Bankruptcy Code) of Purchaser against any Seller, or otherwise and (ii) all actual out-of-pocket court costs, enforcement costs and legal and other expenses (including reasonable attorneys’ fees and expenses of outside counsel) that are incurred by Purchaser in the enforcement of any provision of the Transaction Documents, including, but not limited to, this Guaranty.

(c) The terms defined in this Guaranty have the meanings assigned to them in this Guaranty and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender. All references to articles, schedules and exhibits are to articles, schedules and exhibits in or to this Guaranty unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guaranty shall refer to this Guaranty as a whole and not to any particular provision of this Guaranty. The term “include” or “including” shall mean without limitation by reason of enumeration. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles.

ARTICLE II.

NATURE AND SCOPE OF GUARANTY

(a) Guaranty of Obligations. Subject to the terms hereof, Guarantor hereby irrevocably and unconditionally guarantees and promises to Purchaser and its successors, endorsees, transferees and assigns as a primary obligor the prompt and complete payment and performance by each Seller of the Guaranteed Obligations as and when the same shall be due and payable (whether at the stated maturity, by acceleration or otherwise); provided however that Guarantor’s total aggregate liability under this Article II(a) shall (i) not exceed an amount equal to the product of (x) twenty-five percent (25%) multiplied by (y) the aggregate Repurchase Price for all Purchased Assets on any day that any amounts under this Guaranty are due and payable and (ii) never exceed twenty-five percent (25%) of the Maximum Facility Purchase Price (the “Liability Cap”).

2

(b) Liability Cap Carve out. The Liability Cap shall not apply in the event that any of the following events or circumstances shall occur and payments made in connection with any of the following events or circumstances shall not accrue toward the Liability Cap:

(i) (A) the filing by any Seller and/or Guarantor of any voluntary petition under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or (B) the commencing, or authorizing the commencement, by any Seller and/or Guarantor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors;

(ii) the solicitation by any Seller and/or Guarantor or any Seller and/or Guarantor otherwise colluding with petitioning creditors for any involuntary petition, case or proceeding against any Seller and/or Guarantor under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors;

(iii) Any Seller and/or Guarantor seeking or consenting to the appointment of a receiver, trustee, custodian or similar official for any Seller and/or Guarantor or any substantial part of the property of any Seller and/or Guarantor (unless consented to by Purchaser);

(iv) the making by any Seller and/or Guarantor of a general assignment for the benefit of creditors of any Seller and/or Guarantor (other than in favor of Purchaser or if consented to by Purchaser) in connection with any case or proceeding described in the foregoing clauses (i) or (ii); or

(v) with respect to and solely to the extent of any and all out-of-pocket losses, damages, costs and expenses (including reasonable fees and disbursements of outside counsel) actually incurred by Purchaser in connection with:

(1) any fraud, willful misconduct, illegal act or intentional material misstatement on the part of any Seller, Guarantor or any Affiliate of any Seller or Guarantor in connection with the execution and delivery of the Master Repurchase Agreement or other Transaction Document, or any certificate, report, notice, financial statement, representation, warranty or other instrument or document furnished to Purchaser by any Seller, Guarantor or any Affiliate thereof in connection with the Master Repurchase Agreement or any other Transaction Document on the Closing Date or during the term of the Master Repurchase Agreement;

(2) any misappropriation , conversion or intentional misapplication by any Seller, Guarantor or any Affiliate of the foregoing of any Net Cash Flow required to be deposited in the Collection Account pursuant to Article 5 of the Master Repurchase Agreement;

3

(3) any failure by any Seller to comply with Article 13 of the Repurchase Agreement, which failure results in a substantive consolidation of any Seller with any other entity in an insolvency proceeding;

(4) any failure by any Seller to fund a Future Advance, which failure is determined in a final non-appealable judgment by a court of competent jurisdiction in the United States of America to have been committed by such Seller in bad faith;

(5) if any Seller, Guarantor or any Affiliate of the foregoing interferes with, frustrates or prevents Purchaser’s exercise of remedies provided under the Transaction Documents; provided that any assertion, claim or defense reasonably made in good faith by such Seller or Guarantor as to the existence and continuation of such Default or Event of Default shall not, and shall not be deemed to, result in liability under this sub-clause (5);

(6) any claim by any Affiliate of any Seller that Purchaser is not the record and beneficial owner of, and does not have good and marketable title to, each Purchased Asset in accordance with the Transaction Documents; or

(7) any loss, damage, cost and expense in connection with violation of any environmental law, the correction of any environmental condition, or the removal of any hazardous, toxic or harmful substances, materials, wastes, pollutants or contaminants defined as such in or regulated under any environmental law, in each case in any way affecting any Seller’s properties or any of the Purchased Assets; provided, that Guarantor shall have no liability under this Article II(b)(v)(4) with respect to conditions on any Mortgaged Property first arising after the date upon which Purchaser enforces its remedies with respect to the related Purchased Asset pursuant to Article 14(b)(ii)(D) or 14(b)(iii) of the Master Repurchase Agreement following an Event of Default.

(c) Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Obligations arising or created after any attempted revocation by Guarantor. This Guaranty may be enforced by Purchaser and any successor, endorsee, transferee or assignee of Purchaser permitted under the Master Repurchase Agreement and shall not be discharged by such permitted assignment or negotiation of all or part thereof.

(d) Satisfaction of Guaranteed Obligations. Guarantor shall satisfy its obligations hereunder without demand, presentment, protest, notice of protest, notice of non-payment, notice of intention to accelerate the maturity, notice of acceleration of the maturity or any other notice whatsoever. Subject to Articles II(a) and II(b), the obligations of Guarantor hereunder shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of any Seller, or any other party, against Purchaser or against the payment of the Guaranteed Obligations, other than the payment of the Guaranteed Obligations, whether such offset, claim or defense arises in connection with such Guaranteed Obligations or otherwise.

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(e) No Duty to Pursue Others. It shall not be necessary for Purchaser (and Guarantor hereby waives any rights which Guarantor may have to require Purchaser), in order to enforce the obligations of Guarantor hereunder, first to (i) institute suit or exhaust its remedies against any Seller or others liable on the Guaranteed Obligations or any other person, (ii) enforce or exhaust Purchaser’s rights against any collateral which shall ever have been given to secure the Guaranteed Obligations, (iii) join any Seller or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty or (iv) resort to any other means of obtaining payment of the Guaranteed Obligations. Purchaser shall not be entitled to actually receive payment of the same amounts from both a Seller and Guarantor. Purchaser shall not be required to mitigate damages or take any other action to collect or enforce the Guaranteed Obligations.

(f) Waivers. Guarantor agrees to the provisions of the Transaction Documents, and hereby waives notice of (i) any loans or advances made by Purchaser to any Seller or the purchase of any Purchased Asset by Purchaser from any Seller, (ii) acceptance of this Guaranty, (iii) any amendment or extension of the Master Repurchase Agreement or of any other Transaction Documents, (iv) the execution and delivery by any Seller and Purchaser of any other agreement or of any Seller’s execution and delivery of any other documents arising under the Transaction Documents or in connection with the Guaranteed Obligations, (v) the occurrence of any breach by any Seller or an Event of Default under the Transaction Documents, (vi) Purchaser’s transfer or disposition of the Transaction Documents, or any part thereof, (vii) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (viii) protest, proof of non-payment or default by any Seller, (ix) any other action at any time taken or omitted by Purchaser and (x) except as otherwise provided herein or required by the terms hereof, all other demands and notices of every kind in connection with this Guaranty, the Transaction Documents and any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations; provided, however, that the foregoing shall not constitute a waiver by Guarantor of any notice that Purchaser is expressly required to provide to Sellers or Guarantor or any other party pursuant to the Transaction Documents.

(g) Payment of Expenses. In the event that Guarantor should breach or fail to timely perform any provisions of this Guaranty, Guarantor shall, within ten (10) Business Days after demand by Purchaser, pay Purchaser all actual out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of outside counsel) actually incurred by Purchaser in the enforcement hereof or the preservation of Purchaser’s rights hereunder. The covenant contained in this Article II(g) shall survive the payment and performance of the Guaranteed Obligations.

(h) Effect of Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, Purchaser must rescind or restore any payment, or any part thereof, received by Purchaser in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to Guarantor by Purchaser shall be without effect, and this Guaranty shall remain in full force and effect. It is the intention of each Seller and Guarantor that Guarantor’s obligations hereunder shall not be discharged except by such Seller’s or Guarantor’s payment and performance of the Guaranteed Obligations which is not so rescinded or Guarantor’s performance of such obligations and then only to the extent of such performance.

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(i) Deferral of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, Guarantor hereby unconditionally and irrevocably defers any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantor to the rights of Purchaser), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from any Seller or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by Guarantor under or in connection with this Guaranty until payment in full of the Guaranteed Obligations (other than those Repurchase Obligations (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of the Transaction Documents) and termination of the Transaction Documents. Guarantor hereby subordinates all of its subrogation rights against each Seller arising from payments made under this Guaranty to the full payment of the Guaranteed Obligations due Purchaser for a period of ninety-one (91) days following the final payment of the last of all of the Guaranteed Obligations and termination of the Master Repurchase Agreement. If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations (other than those Repurchase Obligations (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of the Transaction Documents) shall not have been paid in full, such amount shall be held by Guarantor in trust for Purchaser, segregated from other funds of Guarantor, and shall, forthwith upon receipt by Guarantor, be turned over to Purchaser in the exact form received by Guarantor (duly indorsed by Guarantor to Purchaser, if required), to be applied against the Guaranteed Obligations, whether matured or unmatured, in such order as Purchaser may determine.

(j) Seller. The term “Seller” or “Sellers” as used herein shall include any new or successor corporation, limited liability company, association, partnership (general or limited), joint venture, trust or other individual or organization formed as a result of any merger, reorganization, sale, transfer, devise, gift or bequest of any Seller or any interest in any Seller.

ARTICLE III.

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS

Guarantor hereby consents and agrees to each of the following, and agrees that Guarantor’s obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following, except to the extent required by the terms hereof, and waives any common law, equitable, statutory or other rights (including without limitation, except to the extent required by the terms hereof, rights to notice) which Guarantor might otherwise have as a result of or in connection with any of the following:

(a) Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Master Repurchase Agreement, the other Transaction Documents (other than this Guaranty), or any other document, instrument, contract or understanding between Sellers and Purchaser, or any other parties, pertaining to the Guaranteed Obligations.

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(b) Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by Purchaser to Sellers.

(c) Condition of Seller or Guarantor. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of any Seller, Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations or any dissolution of any Seller or Guarantor, or any sale, lease or transfer of any or all of the assets of any Seller or Guarantor, or any changes in the shareholders, partners or members of any Seller or Guarantor; or any reorganization of any Seller or Guarantor.

(d) Invalidity of Guaranteed Obligations. The invalidity, illegality or unenforceability against any Seller of all or any part of the Master Repurchase Agreement or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including without limitation the fact that (i) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (ii) the officers or representatives executing the Master Repurchase Agreement or the other Transaction Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (iii) the applicable Seller has valid defenses (other than payment of the Guaranteed Obligations), claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from such Seller, (iv) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable or (v) the Master Repurchase Agreement, or any of the other Transaction Documents have been forged by any Person other than Purchaser or any of its Affiliates or otherwise are irregular or not genuine or authentic, it being agreed that Guarantor shall remain liable hereon regardless of whether such Seller or any other person is found not liable on the Guaranteed Obligations or any part thereof for any reason (other than by reason of a defense of payment or performance of the Guaranteed Obligations).

(e) Release of Obligors. Any full or partial release of the liability of any Seller on the Guaranteed Obligations, or any part thereof, or of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by Guarantor that Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement, as between Purchaser and Guarantor, that other parties will be liable to pay or perform the Guaranteed Obligations, or that Purchaser will look to other parties to pay or perform the obligations of the applicable Seller under the Master Repurchase Agreement or the other Transaction Documents.

(f) Other Collateral. The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations.

(g) Release of Collateral. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) by any party other than Purchaser or any of its Affiliates of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations.

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(h) Care and Diligence. Except to the extent the same shall result from the gross negligence, willful misconduct, bad faith or illegal acts of Purchaser or its Affiliates, the failure of Purchaser or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not limited to any neglect, delay, omission, failure or refusal of Purchaser (i) to take or prosecute any action for the collection of any of the Guaranteed Obligations or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations.

(i) Unenforceability. The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by Guarantor that Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectability or value of any of the collateral for the Guaranteed Obligations.

(j) Offset. The liabilities and obligations of Guarantor to Purchaser hereunder shall not be reduced, discharged or released because of or by reason of any existing or future right of offset, claim or defense (other than payment of the Guaranteed Obligations) of any Seller against Purchaser, or any other party, or against payment of the Guaranteed Obligations, whether such right of offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations).

(k) Merger. The reorganization, merger or consolidation of any Seller into or with any other corporation or entity.

(l) Preference. Any payment by any Seller to Purchaser is held to constitute a preference under bankruptcy laws, or for any reason Purchaser is required to refund such payment or pay such amount to any Seller or someone else.

(m) Other Actions Taken or Omitted. Except to the extent the same shall result from the gross negligence, willful misconduct, bad faith or illegal acts of Purchaser or its Affiliates, any other action taken or omitted to be taken with respect to the Transaction Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed Obligations.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

To induce Purchaser to enter into the Transaction Documents, Guarantor represents and warrants to Purchaser as of the Closing Date and as of each Purchase Date as follows:

(a) Benefit. Guarantor has received, or will receive, direct or indirect benefit from the execution, delivery and performance by Sellers of the Transaction Documents, and the transactions contemplated therein.

(b) Familiarity and Reliance. Guarantor is familiar with, and has independently reviewed books and records regarding, the financial condition of each Seller and is familiar with the value of any and all collateral intended to be pledged as security for the payment of the Guaranteed Obligations; however, as between Purchaser and Guarantor, Guarantor is not relying on such financial condition or the collateral as an inducement to enter into this Guaranty.

(c) No Representation by Purchaser. Neither Purchaser nor any other party on Purchaser’s behalf has made any representation, warranty or statement to Guarantor in order to induce Guarantor to execute this Guaranty.

(d) Organization. Guarantor (i) is duly organized, validly existing and in good standing under the laws and regulations of the jurisdiction of its formation, (ii) has the corporate power to own and hold the assets it purports to own and hold, and to carry on its business as now being conducted and proposed to be conducted and (iii) has the corporate power to execute, deliver, and perform its obligations under this Guarantee.

(e) Authority. Guarantor is duly authorized to execute and deliver this Guaranty and to perform its obligations under this Guaranty, and has taken all necessary action to authorize such execution, delivery and performance, and each person signing this Guaranty on its behalf is duly authorized to do so on its behalf.

(f) Due Execution and Delivery; Consideration. This Guaranty has been duly executed and delivered by Guarantor, for good and valuable consideration.

(g) Enforceability. This Guaranty is a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles.

(h) Approvals and Consents. No consent, approval or other action of, or filing by, Guarantor with any Governmental Authority or any other Person is required to authorize, or is otherwise required in connection with, the execution, delivery and performance of this Guaranty (other than consents, approvals and filings required by Guarantor as a result of being a publicly traded company or that have been obtained or made, as applicable, and any such consents, approvals and filings that have been obtained are in full force and effect).

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(i) Licenses and Permits. Guarantor is duly licensed, qualified and in good standing in every jurisdiction where such licensing, qualification or standing is material to Guarantor’s business, and has all material licenses, permits and other consents that are necessary, for (i) the transaction of Guarantor’s business and ownership of Guarantor’s properties and (ii) the performance of its obligations under this Guaranty.

(j) Non-Contravention. Neither the execution and delivery of this Guaranty, nor consummation by Guarantor of the transactions contemplated by this Guaranty, nor compliance by Guarantor with the terms, conditions and provisions of this Guaranty will conflict with or result in a breach of any of the terms, conditions or provisions of (i) the organizational documents of Guarantor, (ii) any agreement by which Guarantor is bound or to which any assets of Guarantor are subject or constitute a default thereunder, or result thereunder in the creation or imposition of any Lien upon any of the assets of Guarantor, other than pursuant to the Transaction Documents, (iii) any judgment or order, writ, injunction, decree or demand of any court applicable to Guarantor, or (iv) any applicable Requirement of Law.

(k) Litigation/Proceedings. Except as otherwise disclosed in writing to Purchaser, there is no action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of Guarantor, threatened in writing against Guarantor, or any of its assets that (i) questions or challenges the validity or enforceability of any of the Transaction Documents or any action to be taken in connection with the transactions contemplated hereby or thereby, (ii) makes a claim in an aggregate amount greater than the Litigation Threshold or (iii) which, individually or in the aggregate, if adversely determined is reasonably likely to have a Material Adverse Effect.

(l) Solvency. Guarantor, as of the Closing Date and each Purchase Date, has adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Guarantor, as of the Closing Date and each Purchase Date, is generally able to pay, and intends to pay, its debts as they come due. As of the date hereof, and after giving effect to this Guaranty and the contingent obligation evidenced hereby, Guarantor is, and will be, solvent, and has, and will have, assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities fairly estimated) and debts, and has, and will have, property and assets sufficient to satisfy and repay its obligations and liabilities, as and when the same become due.

All representations and warranties made by Guarantor herein shall survive until payment in full of the Guaranteed Obligations (other than those Repurchase Obligations (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of the Transaction Documents).

ARTICLE V.

COVENANTS OF GUARANTOR

Guarantor covenants and agrees with Purchaser that, until payment in full of all Guaranteed Obligations (other than those Repurchase Obligations (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of the Transaction Documents):

(a) Corporate Change. Guarantor shall not change its jurisdiction of organization unless it shall have provided Purchaser at least thirty (30) Business Days’ prior written notice of such change.

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(b) Reporting. Guarantor shall deliver (or cause to be delivered) to Purchaser all financial information and certificates with respect to Guarantor that are required to be delivered pursuant to Article 12(b) of the Master Repurchase Agreement.

(c) Preservation of Existence; Licenses. Guarantor shall at all times maintain and preserve its legal existence and all of its material rights, privileges, licenses, permits and franchises necessary for the operation of its business and for its performance under this Guaranty, except where failure to comply could not be reasonably likely to have a Material Adverse Effect.

(d) Compliance with Obligations. Guarantor shall at all times comply in all material respects (i) with its organizational documents, (ii) in all material respects with any agreements by which it is bound or to which its assets are subject and (iii) any Requirement of Law.

(e) Books of Record and Accounts. Guarantor shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions fairly in accordance with GAAP, consistently applied, and set aside on its books from its earnings for each Fiscal Year all such proper reserves in accordance with GAAP, consistently applied.

(f) Taxes and Other Charges. Guarantor shall pay and discharge all material taxes, assessments, levies, liens and other charges imposed on it, on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such taxes, assessments, levies, liens and other charges which are being contested in good faith and by proper proceedings and against which adequate reserves are being maintained in accordance with GAAP.

(g) Due Diligence. Guarantor shall permit Purchaser to conduct continuing due diligence in accordance with Article 28 of the Master Repurchase Agreement.

(h) No Change of Control. Guarantor shall not, without the prior consent of Purchaser, permit a Change of Control to occur.

(i) Limitation on Distributions. After the occurrence and during the continuation of any monetary Default or Event of Default or the breach of any of the financial covenants set forth in Article V(k) below, Guarantor shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity or partnership interest of Guarantor (each, a “Distribution”), whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Guarantor unless, before and immediately after giving effect to such Distribution Guarantor shall be in compliance with the covenants set forth in Article V(k).

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(j) [Reserved].

(k) Financial Covenants. Guarantor shall not at any time until the Guaranteed Obligations (other than those Repurchase Obligations (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of the Transaction Documents) have been paid in full permit (as determined quarterly on a consolidated basis in accordance with GAAP, consistently applied):

(i) Maximum Indebtedness. The ratio (expressed as a percentage) of (a) Indebtedness of the Guarantor and its Subsidiaries as of the last day of any Fiscal Quarter to (b) Total Assets of Guarantor and its Subsidiaries as of the last day of such Fiscal Quarter, to exceed eighty three and a third percent (83.3333%).

(ii) Minimum Fixed Charge Coverage Ratio. The ratio of (a) Guarantor’s EBITDA for any period of four (4) consecutive quarters most recently ended to (b) Guarantor’s Fixed Charges during such period, to be less than 1.40:1.00, as determined as soon as practicable after the end of each Fiscal Quarter, but in no event later than forty-five (45) days after the last day of the applicable Fiscal Quarter.

(iii) Minimum Tangible Net Worth. Guarantor’s Tangible Net Worth to fall below the sum of $1,862,021,112, plus (b) seventy-five percent (75%) of the net cash proceeds of any equity issuance by the Guarantor that occurs after the Closing Date.

(iv) Minimum Cash Liquidity. Guarantor’s Cash Liquidity to be less than the greater of (a) $10,000,000 and (b) five percent (5%) of the Guarantor’s Recourse Indebtedness.

ARTICLE VI.

MISCELLANEOUS

(a) Waiver. No failure to exercise, and no delay in exercising, on the part of Purchaser, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights of Purchaser hereunder shall be in addition to all other rights provided by law. No modification or waiver of any provision of this Guaranty, nor consent to departure therefrom, shall be effective unless in writing signed by Purchaser and Guarantor and no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand (except to the extent such a notice or demand is required by the terms hereof).

(b) Set-Off. Purchaser and its Affiliates are hereby authorized at any time and from time to time upon the occurrence and during the continuance of an Event of Default, without prior written notice to Guarantor, to set-off, appropriate and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Purchaser or any such

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Affiliate to or for the credit or the account of Guarantor against any and all of the obligations of Guarantor now or hereafter existing under this Guaranty or any other Transaction Document to Purchaser or any of its Affiliates, irrespective of whether or not Purchaser or any such Affiliate shall have made any demand under this Guaranty or any other Transaction Document and although such obligations of Guarantor may be contingent or unmatured or are owed to a branch or office of Purchaser or such Affiliate different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness. The rights of Purchaser and its Affiliates under this Article VI(b) are in addition to other rights and remedies (including other rights of setoff) that they may have. Purchaser shall give written notice to Guarantor of any set-off affected under this Article VI(b) to the extent it is not prohibited from doing so by applicable law.

(c) Notices. Unless otherwise provided in this Guaranty, all notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if sent by (i) hand delivery, with proof of delivery, (ii) certified or registered United States mail, postage prepaid, (iii) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of delivery, or (iv) by electronic mail, provided that, other than with respect to day-to-day notices delivered under this Guaranty and other than with respect to any notices delivered under Article V(a), such electronic mail notice must also be delivered by one of the means set forth in (i), (ii), or (ii) above unless the sender of such communication receives a verbal or electronic confirmation acknowledging receipt thereof (for the avoidance of doubt, any automatically generated email or any similar automatic response shall not constitute confirmation), to the address specified below or at such other address and person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Article V(c); provided, however, at least one of the individuals identified in clause (i) of the definition of “Knowledge” in the Master Repurchase Agreement shall be an “attention” party for notices to Guarantor. A notice shall be deemed to have been given: (x) in the case of hand delivery, at the time of delivery, if on a Business Day, and otherwise on the next occurring Business Day, (y) in the case of registered or certified mail or expedited prepaid delivery, when delivered, if on a Business Day, and otherwise on the next occurring Business Day, or upon the first attempted delivery on a Business Day or (z) in the case of electronic mail, upon receipt of a verbal or electronic confirmation acknowledging receipt thereof (for the avoidance of doubt, any automatically generated email or any similar automatic response shall not constitute confirmation). A party receiving a notice that does not comply with the technical requirements for notice under this Article V(c) may elect to waive any deficiencies and treat the notice as having been properly given.

Guarantor:	Blackstone Mortgage Trust, Inc. c/o Blackstone Mortgage Trust, Inc. 345 Park Avenue, 42nd Floor New York, New York 10154 Attention: Douglas Armer Telephone: (212) 583-5000 Email: BXMTBarclaysFacility@blackstone.com
with copies to:	Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 Attn: Daniel L. Stanco Tel: (212) 841-5758 Email: Daniel.Stanco@ropesgray.com

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(d) GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

(e) SUBMISSION TO JURISDICTION; WAIVERS.

(i) Guarantor and, by its acceptance of this Guaranty, Purchaser, each irrevocably and unconditionally (A) submits to the exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under this Guaranty or relating in any way to this Guaranty, the Master Repurchase Agreement or any Transaction under the Master Repurchase Agreement and (B) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.

(ii) To the extent that Guarantor has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, Guarantor hereby irrevocably waives and agrees not to plead or claim such immunity in respect of any action brought to enforce its obligations under this Guaranty or relating in any way to this Guaranty, the Master Repurchase Agreement or any Transaction under the Master Repurchase Agreement.

(iii) Guarantor and, by its acceptance of this Guaranty, Purchaser, each hereby irrevocably consents to the service of any summons and complaint and any other process by the mailing of copies of such process to it at its address specified herein. Guarantor and, by its acceptance of this Guaranty, Purchaser, each hereby agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Article VI(e) shall affect the right of Purchaser to serve legal process in any other manner permitted by law, and nothing in this Article VI(e) shall affect the right of Guarantor to serve legal process in any other manner permitted by law.

(iv) GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

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(f) Invalid Provisions. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Guaranty, such provision shall be fully severable and this Guaranty shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Guaranty.

(g) Amendments. This Guaranty may be amended only by an instrument in writing executed by Guarantor and Purchaser.

(h) Parties Bound; Assignment. This Guaranty shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives; provided, however, that Guarantor may not, without the prior written consent of Purchaser, assign any of its rights, powers, duties or obligations hereunder. Purchaser may assign or transfer its rights under this Guaranty in accordance with the transfer of assignment provisions of the Master Repurchase Agreement.

(i) Headings. Section headings are for convenience of reference only and shall in no way affect the interpretation or construction of this Guaranty.

(j) Recitals. The recital and introductory paragraphs hereof are a part hereof, form a basis for this Guaranty and shall be considered prima facie evidence of the facts and documents referred to therein.

(k) Rights and Remedies. If Guarantor becomes liable for any indebtedness owing by any Seller to Purchaser, by endorsement or otherwise, other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby and the rights of Purchaser hereunder shall be cumulative of any and all other rights that Purchaser may ever have against Guarantor. The exercise by Purchaser of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.

(l) Entirety. This Guaranty embodies the final, entire agreement of Guarantor and Purchaser with respect to Guarantor’s guaranty of the Guaranteed Obligations and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof. This Guaranty is intended by Guarantor and Purchaser as a final and complete expression of the terms of the guaranty, and no course of dealing between Guarantor and Purchaser, no course of performance, no trade practices, and no evidence of prior, contemporaneous or subsequent oral agreements or discussions or other extrinsic evidence of any nature shall be used to contradict, vary, supplement or modify any term of this Guaranty. There are no oral agreements between Guarantor and Purchaser relating to the subject matter hereof.

15

(m) Intent. Guarantor acknowledges and intends (i) that this Guaranty constitute a “securities contract” as that term is defined in Section 741(7)(A)(xi) of the Bankruptcy Code to the extent of damages as measured in accordance with Section 562 of the Bankruptcy Code and (ii) that this Guaranty constitutes a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code to the extent of damages as measured in accordance with Section 562 of the Bankruptcy Code.

(n) Status of Existing Guaranty. This Guaranty amends, restates and replaces in its entirety the Existing Guaranty. Guarantor acknowledges and agrees that the Existing Guaranty shall be void and of no force or effect from and after the date hereof and agrees that all Guaranteed Obligations of Guarantor outstanding under the Existing Guaranty as of the date hereof shall be deemed to be Guaranteed Obligations outstanding under this Guaranty (and, accordingly, subject to the terms and conditions hereof).

[SIGNATURE ON NEXT PAGE]

16

IN WITNESS WHEREOF, the undersigned executed this Guaranty as of the day first written above.

BLACKSTONE MORTGAGE TRUST, INC., as Guarantor
By:	/s/ Douglas N. Armer
	Name: Douglas N. Armer Title: Executive Vice President, Capital           Markets and Treasurer

[Signature Page to A/R Guaranty]

EXHIBIT A

FINANCIAL COVENANT DEFINITIONS

“Available Borrowing Capacity” shall mean, with respect to any Person, on any date of determination, the total unrestricted borrowing capacity which may be drawn (taking into account required reserves and discounts) upon by such Person or its Subsidiaries, at such Person’s or its Subsidiaries’ sole discretion, under committed credit facilities or repurchase agreements which provide financing to such Person or its Subsidiaries.

“Cash Equivalents” shall mean, as of any date of determination, marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States.

“Cash Liquidity” shall mean, with respect to any Person, on any date of determination, the sum of (i) unrestricted cash, plus (ii) Available Borrowing Capacity, plus (iii) Cash Equivalents.

“Consolidated Net Income” shall mean, with respect to any Person, for any period, the amount of consolidated net income (or loss) of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“EBITDA” shall mean, with respect to any Person, for any period, such Person’s Consolidated Net Income, excluding the effects of such Person’s and its Subsidiaries’ Interest Expense with respect to Indebtedness, taxes, depreciation, amortization, asset write-ups or impairment charges, provisions for loan losses, and changes in mark-to-market value(s) (both gains and losses) of financial instruments and noncash compensation expenses, all determined on a consolidated basis in accordance with GAAP.

“Fiscal Quarter” shall mean a fiscal quarter of any Fiscal Year.

“Fiscal Year” shall mean the fiscal year of Guarantor ending on December 31 of each calendar year.

“Fixed Charges” shall mean, with respect to any Person, for any period, the amount of interest paid in cash with respect to Indebtedness as shown on such Person’s consolidated statement of cash flow in accordance with GAAP as offset by the amount of receipts pursuant to net receive interest rate swap agreements of such Person and its consolidated Subsidiaries during the applicable period.

“Guarantor” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation, together with its successors and permitted assigns.

“Interest Expense” shall mean, for any Person and any period, determined without duplication on a consolidated basis in accordance with GAAP, the amount of total interest expense incurred by such Person, including capitalized or accruing interest (but excluding interest funded under a construction loan).

A-1

“REMIC” shall mean, a real estate, mortgage investment conduit, within the meaning of Section 860D(a) of the Internal Revenue Code of 1986, as amended.

“Tangible Net Worth” shall mean, with respect to any Person, on any date of determination, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person pursuant to GAAP, minus (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and/or expenses, all on or as of such date.

“Total Assets” shall mean, with respect to any Person, on any date of determination, an amount equal to the aggregate book value of all assets owned by such Person and the proportionate share of such Person of all assets owned by Affiliates of such Person as consolidated in accordance with GAAP, less (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and expenses, all on or as of such date, and (d) the amount of nonrecourse Indebtedness owing pursuant to securitization transactions such as a REMIC securitization, a collateralized loan obligation transactions or other similar securitizations.

A-2

EX-31

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen D. Plavin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Blackstone Mortgage Trust, Inc.;

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 23, 2019
	/s/ Stephen D. Plavin
	Stephen D. Plavin
	Chief Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Anthony F. Marone, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Blackstone Mortgage Trust, Inc.;

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 23, 2019
	/s/ Anthony F. Marone, Jr.
	Anthony F. Marone, Jr.
	Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION 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 Quarterly Report of Blackstone Mortgage Trust, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen D. Plavin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 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.

/s/ Stephen D. Plavin

Stephen D. Plavin

Chief Executive Officer

July 23, 2019

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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

EX-32

Exhibit 32.2

CERTIFICATION 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 Quarterly Report of Blackstone Mortgage Trust, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony F. Marone, Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 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.

/s/ Anthony F. Marone, Jr.

Anthony F. Marone, Jr.

Chief Financial Officer

July 23, 2019

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 16, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001061630
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2019
Trading Symbol	BXMT
Entity Registrant Name	BLACKSTONE MORTGAGE TRUST, INC.
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		134,288,584
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity File Number	001-14788
Entity Tax Identification Number	94-6181186
Entity Incorporation, State or Country Code	MD
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Address, Address Line One	345 Park Avenue, 42nd Floor
Entity Address, City or Town	New York
Entity Address, Postal Zip Code	10154
City Area Code	212
Local Phone Number	655-0220
Title of 12(b) Security	Class A common stock
Security Exchange Name	NYSE
Entity Address, State or Province	NY

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Cash and cash equivalents	$ 80,584	$ 105,662
Loans receivable, net	14,280,919	14,191,200
Other assets	203,501	170,513
Total Assets	14,565,004	14,467,375
Liabilities and Equity
Secured debt agreements, net	8,257,370	8,974,756
Loan participations sold, net		94,418
Securitized debt obligations, net	1,287,364	1,285,471
Secured term loan, net	491,598
Convertible notes, net	611,472	609,911
Other liabilities	140,775	128,212
Total Liabilities	10,788,579	11,092,768
Commitments and contingencies
Equity
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 134,288,258 and 123,435,738 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	1,343	1,234
Additional paid-in capital	4,354,571	3,966,540
Accumulated other comprehensive loss	(29,420)	(34,222)
Accumulated deficit	(579,131)	(569,428)
Total Blackstone Mortgage Trust, Inc. stockholders' equity	3,747,363	3,364,124
Non-controlling interests	29,062	10,483
Total Equity	3,776,425	3,374,607
Total Liabilities and Equity	$ 14,565,004	$ 14,467,375

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Billions	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value in dollars per share	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	134,288,258	123,435,738
Common stock, shares outstanding	134,288,258	123,435,738
Variable interest entity, consolidated, carrying amount, assets	$ 1.5	$ 1.5
Variable interest entity, consolidated, carrying amount, liabilities	$ 1.3	$ 1.3

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income from loans and other investments
Interest and related income	$ 223,369	$ 191,479	$ 448,128	$ 346,904
Less: Interest and related expenses	116,891	87,733	235,579	157,722
Income from loans and other investments, net	106,478	103,746	212,549	189,182
Other expenses
Management and incentive fees	20,984	22,388	40,774	37,880
General and administrative expenses	9,897	8,747	19,210	17,454
Total other expenses	30,881	31,135	59,984	55,334
Income before income taxes	75,597	72,611	152,565	133,848
Income tax provision	46	104	147	224
Net income	75,551	72,507	152,418	133,624
Net income attributable to non-controlling interests	(377)	(195)	(680)	(353)
Net income attributable to Blackstone Mortgage Trust, Inc.	$ 75,174	$ 72,312	$ 151,738	$ 133,271
Net income per share of common stock basic and diluted	$ 0.59	$ 0.66	$ 1.21	$ 1.23
Weighted-average shares of common stock outstanding, basic and diluted	126,475,244	109,069,078	125,410,064	108,735,193

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Net income	$ 75,551	$ 72,507	$ 152,418	$ 133,624
Other comprehensive income
Unrealized loss on foreign currency translation	(9,578)	(35,088)	(4,164)	(24,350)
Realized and unrealized gain on derivative financial instruments	10,914	24,855	8,966	21,920
Other comprehensive income (loss)	1,336	(10,233)	4,802	(2,430)
Comprehensive income	76,887	62,274	157,220	131,194
Comprehensive income attributable to non-controlling interests	(377)	(195)	(680)	(353)
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$ 76,510	$ 62,079	$ 156,540	$ 130,841

XML

Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Class A Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Accumulated Deficit [Member]	Stockholders' Equity [Member]	Non-Controlling Interests [Member]
Balance at Dec. 31, 2017	$ 2,917,406	$ 1,079	$ 3,506,861	$ (29,706)	$ (567,168)	$ 2,911,066	$ 6,340
Shares of class A common stock issued, net	3	3				3
Restricted class A common stock earned	6,848		6,848			6,848
Issuance of convertible notes	1,462		1,462			1,462
Dividends reinvested	14		122		(108)	14
Deferred directors' compensation	125		125			125
Other comprehensive income	7,803			7,803		7,803
Net income	61,116				60,958	60,958	158
Dividends declared on common stock, $0.62 per share	(67,066)				(67,066)	(67,066)
Contributions from non-controlling interests	375						375
Distributions to non-controlling interests	(1,575)						(1,575)
Balance at Mar. 31, 2018	2,926,511	1,082	3,515,418	(21,903)	(573,384)	2,921,213	5,298
Balance at Dec. 31, 2017	2,917,406	1,079	3,506,861	(29,706)	(567,168)	2,911,066	6,340
Other comprehensive income	(2,430)
Net income	133,624
Balance at Jun. 30, 2018	3,028,662	1,114	3,624,767	(32,136)	(570,265)	3,023,480	5,182
Balance at Mar. 31, 2018	2,926,511	1,082	3,515,418	(21,903)	(573,384)	2,921,213	5,298
Shares of class A common stock issued, net	102,495	32	102,463			102,495
Restricted class A common stock earned	6,653		6,653			6,653
Conversion of convertible notes	(20)		(20)			(20)
Dividends reinvested	13		128		(115)	13
Deferred directors' compensation	125		125			125
Other comprehensive income	(10,233)			(10,233)		(10,233)
Net income	72,507				72,313	72,313	195
Dividends declared on common stock, $0.62 per share	(69,079)				(69,079)	(69,079)
Contributions from non-controlling interests	2,100						2,100
Distributions to non-controlling interests	(2,411)						(2,411)
Balance at Jun. 30, 2018	3,028,662	1,114	3,624,767	(32,136)	(570,265)	3,023,480	5,182
Balance at Dec. 31, 2018	3,374,607	1,234	3,966,540	(34,222)	(569,428)	3,364,124	10,483
Shares of class A common stock issued, net	65,381	23	65,358			65,381
Restricted class A common stock earned	7,639		7,639			7,639
Dividends reinvested	11		143		(132)	11
Deferred directors' compensation	125		125			125
Other comprehensive income	3,466			3,466		3,466
Net income	76,867				76,565	76,565	302
Dividends declared on common stock, $0.62 per share	(77,913)				(77,913)	(77,913)
Contributions from non-controlling interests	1,470						1,470
Distributions to non-controlling interests	(64)						(64)
Balance at Mar. 31, 2019	3,451,589	1,257	4,039,805	(30,756)	(570,908)	3,439,398	12,191
Balance at Dec. 31, 2018	3,374,607	1,234	3,966,540	(34,222)	(569,428)	3,364,124	10,483
Other comprehensive income	4,802
Net income	152,418
Balance at Jun. 30, 2019	3,776,425	1,343	4,354,571	(29,420)	(579,131)	3,747,363	29,062
Balance at Mar. 31, 2019	3,451,589	1,257	4,039,805	(30,756)	(570,908)	3,439,398	12,191
Shares of class A common stock issued, net	306,952	86	306,866			306,952
Restricted class A common stock earned	7,629		7,629			7,629
Dividends reinvested	8		146		(138)	8
Deferred directors' compensation	125		125			125
Other comprehensive income	1,336			1,336		1,336
Net income	75,551				75,174	75,174	377
Dividends declared on common stock, $0.62 per share	(83,259)				(83,259)	(83,259)
Contributions from non-controlling interests	17,158						17,158
Distributions to non-controlling interests	(664)						(664)
Balance at Jun. 30, 2019	$ 3,776,425	$ 1,343	$ 4,354,571	$ (29,420)	$ (579,131)	$ 3,747,363	$ 29,062

XML

Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Stockholders' Equity [Abstract]
Dividends declared on common stock, per share	$ 0.62	$ 0.62	$ 0.62	$ 0.62	$ 1.24	$ 1.24

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities
Net income	$ 152,418	$ 133,624
Adjustments to reconcile net income to net cash provided by operating activities
Non-cash compensation expense	15,522	13,754
Amortization of deferred fees on loans and debt securities	(28,511)	(24,161)
Amortization of deferred financing costs and premiums/discount on debt obligations	15,232	13,631
Changes in assets and liabilities, net
Other assets	(1,285)	(16,582)
Other liabilities	3,808	14,745
Net cash provided by operating activities	157,184	135,011
Cash flows from investing activities
Origination and fundings of loans receivable	(1,922,219)	(4,200,035)
Principal collections and sales proceeds from loans receivable and debt securities	1,807,121	1,966,125
Origination and exit fees received on loans receivable	17,721	62,200
Receipts under derivative financial instruments	9,893	20,784
Payments under derivative financial instruments	(2,941)	(7,452)
Collateral deposited under derivative agreements	(9,090)	(17,750)
Return of collateral deposited under derivative agreements	9,090	21,870
Net cash used in investing activities	(90,425)	(2,154,258)
Cash flows from financing activities
Borrowings under secured debt agreements	1,464,038	4,602,835
Repayments under secured debt agreements	(2,172,557)	(2,824,358)
Proceeds from sale of loan participations	21,346	72,384
Repayment of loan participations	(115,874)
Net proceeds from issuance of secured term loans	498,750
Payment of deferred financing costs	(23,323)	(15,815)
Contributions from non-controlling interests	18,628	2,475
Distributions to non-controlling interests	(728)	(3,986)
Net proceeds from issuance of convertible notes		214,775
Repayment of convertible notes		(192)
Net proceeds from issuance of class A common stock	372,329	102,496
Dividends paid on class A common stock	(154,443)	(133,968)
Net cash (used in) provided by financing activities	(91,834)	2,016,646
Net decrease in cash and cash equivalents	(25,075)	(2,601)
Cash and cash equivalents at beginning of period	105,662	102,518
Effects of currency translation on cash and cash equivalents	(3)	7,140
Cash and cash equivalents at end of period	80,584	107,057
Supplemental disclosure of cash flows information
Payments of interest	(219,573)	(138,451)
Payments of income taxes	(99)	(263)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	(83,259)	(69,094)
Loan principal payments held by servicer, net	$ 32,975	$ 1,330

XML

Organization

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. ORGANIZATION

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from our loan portfolio. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 42nd Floor, New York, New York 10154. We were incorporated in Maryland in 1998, when we reorganized from a California common law business trust into a Maryland corporation.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. We believe we have made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing our consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission, or the SEC.

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made in the presentation of the prior period secured debt agreements in Note 5 to conform to the current period presentation.

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

In the third quarter of 2018, we contributed a loan to a single asset securitization vehicle, or the 2018 Single Asset Securitization, which is a VIE, and invested in the related subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. Refer to Note 16 for additional discussion of our VIEs.

In April 2017, we entered into a joint venture, or our Multifamily Joint Venture, with Walker & Dunlop Inc. to originate, hold, and finance multifamily bridge loans. Pursuant to the terms of the agreements governing the joint venture, Walker & Dunlop contributed 15% of the venture’s equity capital and we contributed 85%. We consolidate the Multifamily Joint Venture as we have a controlling financial interest. The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are owned by Walker & Dunlop. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on Walker & Dunlop’s pro rata ownership of our Multifamily Joint Venture.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

Revenue Recognition

Interest income from our loans receivable portfolio and debt securities is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan or debt security as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents.

During the second quarter of 2018, the letter of credit related to our restricted cash balance was cancelled and the cash was transferred out of our segregated bank account. As of both June 30, 2019 and December 31, 2018, we had no restricted cash on our consolidated balance sheets.

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $360.1 million and $320.0 million as of June 30, 2019 and December 31, 2018, respectively. This cash is maintained in segregated bank accounts, and these amounts are not included in the assets and liabilities presented in our consolidated balance sheets. Cash in these Servicing Accounts will be transferred by the respective third-party servicer to the borrower or us under the terms of the applicable loan agreement upon occurrence of certain future events. We do not generate any revenue or incur any expenses as a result of these Servicing Accounts.

Loans Receivable and Provision for Loan Losses

We originate and purchase commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager. Actual losses, if any, could ultimately differ from these estimates. 

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the risk factors of each loan, and assigns it a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 -	Very Low Risk
2 -	Low Risk
3 -	Medium Risk
4 -	High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.
5 -	Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

Debt Securities Held-to-Maturity

We classify our debt securities as held-to-maturity, as we have the intent and ability to hold these securities until maturity. We include our debt securities in other assets on our consolidated balance sheets at amortized cost.

If, based on current information and events, there is an adverse change in cash flows expected to be collected from the cash flows previously projected for one of our debt securities, an other-than-temporary impairment is deemed to have occurred. A change in expected cash flows is considered adverse if the present value of the revised cash flows (taking into consideration both the timing and amount of cash flows expected to be collected), discounted using the debt security’s current yield, is less than the present value of the previously estimated remaining cash flows. If an other-than-temporary impairment is considered to have occurred, the debt security is written down to fair value. The total other-than-temporary impairment is bifurcated into (i) the amount related to expected credit losses, and (ii) the amount related to fair value adjustments in excess of expected credit losses. The other-than-temporary impairment related to expected credit losses is calculated by comparing the amortized cost basis of the security to the present value of cash flows expected to be collected, discounted at the security’s current yield, and is recognized in earnings in the consolidated statement of operations. The remaining other-than-temporary impairment that is not related to expected credit losses is recognized in other comprehensive income (loss). A portion of other-than-temporary impairments recognized through earnings is accreted back to the amortized cost basis of the security through interest income, while amounts recognized through other comprehensive income (loss) are amortized over the life of the security with no impact on earnings.

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in net income prospectively. Changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of accumulated other comprehensive income (loss) on our consolidated financial statements. Deferred gains and losses are reclassified out of accumulated other comprehensive income (loss) and into net income in the same period or periods during which

the hedged transaction affects earnings, and are presented in the same line item as the earnings effect of the hedged item. For cash flow hedges, this is typically when the periodic swap settlements are made, while for net investment hedges, this occurs when the hedged item is sold or substantially liquidated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its fair value are included in net income concurrently.

Secured Debt Agreements

Where applicable, we record investments financed with repurchase agreements as separate assets and the related borrowings under any repurchase agreements are recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the repurchase agreements are reported separately on our consolidated statements of operations.

Senior Loan Participations

In certain instances, we finance our loans through the non-recourse syndication of a senior loan interest to a third-party. Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining subordinate loan and not the non-consolidated senior interest we sold.

Secured Term Loan

We record our secured term loans as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the secured term loan as additional non-cash interest expense. 

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our convertible notes as of the respective issuance dates based on our nonconvertible debt borrowing rate. The equity component of each series of our convertible notes is reflected within additional paid-in capital on our consolidated balance sheet, and the resulting issue discount is amortized over the period during which such convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to such convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

ASC 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type

of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

• Level 1: Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

• Level 2: Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.

• Level 3: Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third-parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee composed of members of senior management of our Manager, including our Chief Executive Officer, Chief Financial Officer, and other senior officers.

Certain of our other assets are reported at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets that are recorded at fair value are discussed further in Note 15. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager.

We are also required by GAAP to disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

• Loans receivable, net: The fair values of these loans were estimated by our Manager based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and indications of market value from other market participants.

• Debt securities held-to-maturity: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

• Secured debt agreements, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

• Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

• Securitized debt obligations, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Secured term loan, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Convertible notes, net: Each series of the convertible notes is actively traded and their fair values were obtained using quoted market prices.

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. If we were to fail to meet these requirements, we may be subject to federal, state, and local income tax on current and past income, and penalties. Refer to Note 13 for additional information.

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain individuals employed by an affiliate of our Manager that vest over the life of the awards, as well as deferred stock units issued to certain members of our board of directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 14 for additional information.

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units. Refer to Note 11 for additional discussion of earnings per share.

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income (loss).

Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

Recent Accounting Pronouncements

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,” or ASU 2019-04. ASU 2019-04 amends existing guidance originally issued by (i) ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13, (ii) ASU 2017-12 “Derivatives and Hedging Topic 815: Targeted Improvements to Accounting for Hedging Activities,” or ASU 2017-12, and (iii) ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” or ASU 2016-01. The amendments in ASU 2019-04 that relate to ASU 2016-13 clarify specific issues related to the implementation of the current expected credit loss model, which are effective for fiscal years beginning after December 15, 2019 and are to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. The amendments in ASU 2019-04 that relate to ASU 2017-12 primarily update guidance related to fair value hedges and do not have an impact on our consolidated financial statements. The amendments in ASU 2019-04 that relate to ASU 2016-01 primarily update guidance related to equity securities and do not have an impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses in our consolidated financial statements.

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Loans Receivable, Net

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Loans Receivable, Net

3. LOANS RECEIVABLE, NET

The following table details overall statistics for our loans receivable portfolio ($ in thousands):

	June 30, 2019			December 31, 2018
Number of loans		123			125
Principal balance	$	14,372,950		$	14,293,970
Net book value	$	14,280,919		$	14,191,200
Unfunded loan commitments(1)	$	3,217,266		$	3,405,945
Weighted-average cash coupon(2)		5.42	%		5.67	%
Weighted-average all-in yield(2)		5.77	%		6.00	%
Weighted-average maximum maturity (years)(3)		3.7			3.9
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(1)	Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.
(2)	As of June 30, 2019, 99% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 1% earned a fixed rate of interest. As of December 31, 2018, 98% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 2% earned a fixed rate of interest. Cash coupon and all-in yield assume applicable floating benchmark rates as of June 30, 2019 and December 31, 2018, respectively, for weighted-average calculation. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
(3)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of June 30, 2019, 63% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 37% were open to repayment by the borrower without penalty. As of December 31, 2018, 75% of our loans were subject to yield maintenance or other prepayment restrictions and 25% were open to repayment by the borrower without penalty.

Activity relating to our loans receivable portfolio was as follows ($ in thousands):

	Principal Balance			Deferred Fees / Other Items(1)			Net Book Value
December 31, 2018	$	14,293,970		$	(102,770	)	$	14,191,200
Loan fundings		1,922,219			—			1,922,219
Loan repayments		(1,833,414	)		—			(1,833,414	)
Unrealized (loss) gain on foreign currency translation		(9,825	)		204			(9,621	)
Deferred fees and other items		—			(17,721	)		(17,721	)
Amortization of fees and other items		—			28,256			28,256
June 30, 2019	$	14,372,950		$	(92,031	)	$	14,280,919
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(1)   Other items primarily consist of purchase discounts or premiums, exit fees, and deferred origination expenses.

16

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

June 30, 2019
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
Office	54	$	7,205,141	$	7,258,497		48%
Hotel	17		2,380,920		2,460,389		17
Multifamily	38		2,243,177		2,272,201		15
Industrial	5		685,128		688,981		5
Retail	3		381,509		386,617		3
Self-Storage	2		281,990		282,978		2
Condominium	1		228,817		230,258		2
Other	3		874,237		1,199,331		8
	123	$	14,280,919	$	14,779,252		100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
United States
Northeast	27	$	3,999,237	$	4,025,533		28%
West	26		2,953,508		2,995,900		20
Southeast	21		2,409,038		2,420,751		16
Midwest	10		1,109,007		1,115,860		8
Southwest	14		546,008		548,794		4
Northwest	4		175,039		175,770		1
Subtotal	102		11,191,837		11,282,608		77
International
United Kingdom	11		1,270,547		1,616,321		11
Spain	1		1,057,616		1,063,416		7
Australia	3		343,650		345,741		2
Germany	1		196,985		250,975		2
Canada	4		150,302		149,942		1
Belgium	1		69,982		70,249		—
Subtotal	21		3,089,082		3,496,644		23
Total	123	$	14,280,919	$	14,779,252		100%
____________

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million of such non-consolidated senior interests as of June 30, 2019.
(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

December 31, 2018
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
Office	55	$	7,104,842	$	7,164,466		49%
Hotel	18		2,591,565		2,673,763		18
Multifamily	34		2,193,699		2,206,740		15
Industrial	5		680,808		685,776		5
Retail	4		451,099		452,900		3
Condominium	4		304,545		368,104		2
Self-Storage	2		278,473		280,043		2
Other	3		586,169		909,052		6
	125	$	14,191,200	$	14,740,844		100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
United States
Northeast	32	$	4,322,114	$	4,359,938		31%
West	29		3,137,072		3,222,706		22
Southeast	19		2,258,033		2,271,664		15
Midwest	9		1,161,637		1,170,619		8
Southwest	13		478,665		481,745		3
Northwest	4		238,844		239,872		2
Subtotal	106		11,596,365		11,746,544		81
International
Spain	1		1,124,174		1,131,334		8
United Kingdom	7		754,299		1,094,663		7
Canada	5		316,268		313,229		2
Australia	3		310,372		312,893		2
Belgium	1		70,621		71,007		—
Germany	1		11,585		63,637		—
Netherlands	1		7,516		7,537		—
Subtotal	19		2,594,835		2,994,300		19
Total	125	$	14,191,200	$	14,740,844		100%
____________

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $446.9 million of such non-consolidated senior interests as of December 31, 2018.
(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

Loan Risk Ratings

As further described in Note 2, our Manager evaluates our loan portfolio on a quarterly basis. In conjunction with our quarterly loan portfolio review, our Manager assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2.

The following table allocates the principal balance and net book value of our loans receivable based on our internal risk ratings ($ in thousands):

June 30, 2019							December 31, 2018
Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Number of Loans	Net Book Value		Total Loan Exposure(1)(2)
	1	4	$	275,427	$	275,806	2	$	181,366	$	182,740
	2	38		4,208,307		4,235,448	38		3,860,432		3,950,025
	3	78		9,630,494		10,100,685	85		10,149,402		10,608,079
	4	3		166,691		167,313	—		—		—
	5	—		—		—	—		—		—
		123	$	14,280,919	$	14,779,252	125	$	14,191,200	$	14,740,844

____________

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million and $446.9 million of such non-consolidated senior interests as of June 30, 2019 and December 31, 2018, respectively.

(2)

Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

The weighted-average risk rating of our total loan exposure was 2.7 as of both June 30, 2019 and December 31, 2018. We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of June 30, 2019 or December 31, 2018.

Multifamily Joint Venture

As discussed in Note 2, we entered into a Multifamily Joint Venture in April 2017. As of June 30, 2019 and December 31, 2018, our Multifamily Joint Venture held $505.0 million and $334.6 million of loans, respectively, which are included in the loan disclosures above. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

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Other Assets and Liabilities

6 Months Ended

Jun. 30, 2019

Text Block [Abstract]

Other Assets and Liabilities

4. OTHER ASSETS AND LIABILITIES

The following table details the components of our other assets ($ in thousands):

	June 30, 2019		December 31, 2018
Debt securities held-to-maturity(1)	$	94,595	$	96,167
Accrued interest receivable		51,065		56,679
Loan portfolio payments held by servicer(2)		43,236		6,133
Derivative assets		14,000		9,916
Prepaid expenses		278		647
Prepaid taxes		3		6
Other		324		965
Total	$	203,501	$	170,513
____________

(1)	Represents the subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization, with a yield to full maturity of L+10.0% and a maximum maturity date of June 9, 2025, assuming all extension options are exercised by the borrower. Refer to Note 16 for additional discussion.
(2)	Represents loan principal and interest payments held by our third-party loan servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle.

The following table details the components of our other liabilities ($ in thousands):

	June 30, 2019		December 31, 2018
Accrued dividends payable	$	83,259	$	76,530
Accrued interest payable		25,933		25,588
Accrued management and incentive fees payable		20,984		18,586
Accounts payable and other liabilities		5,631		4,583
Derivative liabilities		4,968		2,925
Total	$	140,775	$	128,212

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Secured Debt Agreements, Net

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Secured Debt Agreements, Net

5. SECURED DEBT AGREEMENTS, NET

Our secured debt agreements include secured credit facilities, asset-specific financings, and a revolving credit agreement. The following table details our secured debt agreements ($ in thousands):

	Secured Debt Agreements
	Borrowings Outstanding
	June 30, 2019			December 31, 2018
Secured credit facilities	$	8,065,675		$	8,870,897
Asset-specific financings		217,938			81,739
Revolving credit agreement		—			43,845
Total secured debt agreements	$	8,283,613		$	8,996,481
Deferred financing costs(1)		(26,243	)		(21,725	)
Net book value of secured debt	$	8,257,370		$	8,974,756
___________

(1)   Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

Secured Credit Facilities

During the six months ended June 30, 2019, we increased the maximum facility size of two of our existing credit facilities, providing an aggregate additional $310.0 million of credit capacity. The following tables detail our secured credit facilities ($ in thousands):

	June 30, 2019
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,861,121	$	1,861,121	$	—	$	2,353,629
Wells Fargo		1,742,942		1,251,130		491,812		2,285,101
Citibank		1,006,592		922,804		83,788		1,278,710
Barclays		933,424		902,146		31,278		1,166,780
JP Morgan		959,907		861,744		98,163		1,221,674
Bank of America		768,871		768,871		—		962,378
Morgan Stanley		434,199		378,990		55,209		576,614
Société Générale		321,182		321,182		—		419,034
Goldman Sachs		292,753		247,753		45,000		401,422
MetLife		233,616		233,616		—		296,356
Goldman Sachs - Multi. JV(3)		219,316		219,316		—		293,877
Bank of America - Multi. JV(3)		97,002		97,002		—		123,856
	$	8,870,925	$	8,065,675	$	805,250	$	11,379,431
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our secured credit facilities was $8.8 billion for the six months ended June 30, 2019. As of June 30, 2019, we had aggregate borrowings of $8.1 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.71% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.89% per annum, and a weighted-average advance rate of 79.5%. As of June 30, 2019, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.2 years.

	December 31, 2018
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,839,698	$	1,839,698	$	—	$	2,325,047
Wells Fargo		1,908,509		1,822,154		86,355		2,514,513
JP Morgan		1,010,628		1,010,628		—		1,266,259
Barclays		890,620		890,620		—		1,113,275
Citibank		852,470		663,917		188,553		1,076,085
Bank of America		873,446		873,446		—		1,090,117
MetLife		675,329		675,329		—		852,733
Morgan Stanley		341,241		276,721		64,520		457,496
Société Générale		321,182		321,182		—		404,048
Goldman Sachs		230,140		230,140		—		295,368
Goldman Sachs - Multi. JV(3)		170,060		170,060		—		212,983
Bank of America - Multi. JV(3)		97,002		97,002		—		121,636
	$	9,210,325	$	8,870,897	$	339,428	$	11,729,560
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our secured credit facilities was $7.1 billion for the six months ended December 31, 2018. As of December 31, 2018, we had aggregate borrowings of $8.9 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.72% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.90% per annum, and a weighted-average advance rate of 79.5%. As of December 31, 2018, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.5 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

The following tables outline the key terms of our credit facilities as of June 30, 2019:

Lender	Currency		Guarantee(1)	Margin Call(2)		Term/Maturity
Goldman Sachs - Multi. JV(3)		$	25%		Collateral marks only		July 12, 2020(6)
JP Morgan		$ / £	50%		Collateral marks only		January 7, 2021(7)
Bank of America - Multi. JV(3)		$	43%		Collateral marks only		July 19, 2021(8)
Deutsche Bank		$ / €	59%(4)		Collateral marks only		August 9, 2021(4)
Morgan Stanley		$ / £ / €	25%		Collateral marks only		March 1, 2022
Barclays		$ / £ / €	25%		Collateral marks only		June 18, 2024(9)
MetLife		$	50%		Collateral marks only		April 22, 2023(10)
Bank of America		$	50%		Collateral marks only		May 21, 2023(11)
Goldman Sachs		$	25%		Collateral marks only		October 22, 2023(12)
Citibank		$ / £ / € / A$ / C$	25%		Collateral marks only		Term matched(13)
Société Générale		$ / £ / €	25%		Collateral marks only		Term matched(13)
Wells Fargo		$ / C$	25%(5)		Collateral marks only		Term matched(13)
____________

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.
(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.
(4)	Includes two one-year extension options which may be exercised at our sole discretion. Specific borrowings outstanding of $850.7 million are 100% guaranteed and the related maturity dates are term-matched to the respective collateral assets. The remainder of the credit facility borrowings are 25% guaranteed.
(5)	In addition to the 25% guarantee across all borrowings, there is an incremental guarantee of $171.5 million related to $314.0 million of specific borrowings outstanding.
(6)	Includes a one-year extension option which may be exercised at our sole discretion.
(7)	Maturity dates for $520.6 million of specific borrowings outstanding are term-matched to the respective collateral assets.
(8)	Includes two one-year extension options which may be exercised at our sole discretion.
(9)	Includes four one-year extension options which may be exercised at our sole discretion.
(10)	Includes three one-year extension options which may be exercised at our sole discretion.
(11)	Includes two one-year extension options which may be exercised at our sole discretion.
(12)	Includes three one-year extension options which may be exercised at our sole discretion.
(13)	These secured credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.

Currency	Potential Borrowings(1)		Outstanding Borrowings		Floating Rate  Index(2)	Spread(3)	Advance Rate(4)
$		$  6,948,419		$  6,199,362	USD LIBOR	1.69 %		79.6 %
€		€     797,442		€     748,028	EURIBOR	1.50 %		80.0 %
£		£     564,386		£     564,386	GBP LIBOR	2.05 %		77.9 %
A$		A$     255,270		A$   255,270	BBSY	1.90 %		78.0 %
C$		C$     156,919		C$   156,925	CDOR	1.83 %		80.7 %
		$  8,870,925		$  8,065,675		1.71 %		79.5 %
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Floating rate indices are generally matched to the payment timing under the terms of each secured credit facility and its respective collateral assets.
(3)	Represents weighted-average spread over the applicable floating rate index, based on borrowings outstanding.
(4)	Represents weighted-average advance rate based on the approved outstanding principal balance of the collateral assets pledged.

Asset-Specific Financings

The following tables detail our asset-specific financings ($ in thousands):

June 30, 2019

Asset-Specific Financings

Count

Principal Balance

Book Value

Wtd. Avg. Yield/Cost(1)

Guarantee(2)

Wtd. Avg. Term(3)

Collateral assets

4

$

281,620

$

268,864

L+4.94

%

n/a

Mar. 2023

Financing provided

4

217,938

209,912

L+3.53

%

84,547

Mar. 2023

December 31, 2018

Asset-Specific Financings

Count

Principal Balance

Book Value

Wtd. Avg. Yield/Cost(1)

Guarantee(2)

Wtd. Avg. Term(3)

Collateral assets

1

$

106,739

$

104,807

L+6.08

%

n/a

Aug. 2022

Financing provided

1

81,739

80,938

L+4.07

%

n/a

Aug. 2022

____________

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings is term-matched to the corresponding collateral loans.

The weighted-average outstanding balance of our asset-specific financings was $106.3 million for the six months ended June 30, 2019 and $50.4 million for the six months ended December 31, 2018.

Revolving Credit Agreement

We have a $250.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to nine months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The maturity date of the facility is April 4, 2020.

During the six months ended June 30, 2019, the weighted-average outstanding borrowings under the revolving credit agreement was $28.8 million and we recorded interest expense of $1.6 million, including $522,000 of amortization of deferred fees and expenses. As of June 30, 2019, we had no outstanding borrowings under the agreement.

During the six months ended December 31, 2018, the weighted-average outstanding borrowings under the revolving credit agreement was $31.7 million and we recorded interest expense of $1.7 million, including $551,000 of amortization of deferred fees and expenses. As of December 31, 2018, we had $43.8 million of borrowings outstanding under the agreement.

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $2.8 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to June 30, 2019; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 83.33% of our total assets. As of June 30, 2019 and December 31, 2018, we were in compliance with these covenants. Refer to Note 8 for information regarding financial covenants contained in the agreements governing our senior secured term loan facility.

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Loan Participations Sold, Net

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Loan Participations Sold, Net

6. LOAN PARTICIPATIONS SOLD, NET

The financing of a loan by the non-recourse sale of a senior interest in the loan through a participation agreement generally does not qualify as a sale under GAAP. Therefore, in the instance of such sales, we present the whole loan as an asset and the loan participation sold as a liability on our consolidated balance sheet until the loan is repaid. The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation. The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

We did not have any loan participations sold as of June 30, 2019. During the three and six months ended June 30, 2019, we recorded $1.6 million and $3.2 million, respectively, of interest expense related to our loan participations sold. During the three and six months ended June 30, 2018, we recorded $2.0 million and $3.5 million, respectively, of interest expense related to our loan participations sold. The following table details our loan participations sold as of December 31, 2018 ($ in thousands):

December 31, 2018

Principal

Loan Participations Sold

Count

Balance

Book Value

Yield/Cost(1)

Guarantee(2)

Term

Total loan

1

$

123,745

$

122,669

L+5.92

%

n/a

Feb. 2022

Senior participation(3)

1

94,528

94,418

L+4.07

%

n/a

Feb. 2022

____________

(1)	Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	As of December 31, 2018, our loan participations sold were non-recourse to us.
(3)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $110,000 as of December 31, 2018.

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Securitized Debt Obligations, Net

6 Months Ended

Jun. 30, 2019

Text Block [Abstract]

Securitized Debt Obligations, Net

7. SECURITIZED DEBT OBLIGATIONS, NET

We have financed a pool of our loans through a collateralized loan obligation, or the CLO, and have also financed one of our loans through a single asset securitization vehicle, or the 2017 Single Asset Securitization. The CLO and the 2017 Single Asset Securitization have issued securitized debt obligations that are non-recourse to us. Both the CLO and the 2017 Single Asset Securitization are consolidated in our financial statements. Refer to Note 16 for further discussion of our CLO and 2017 Single Asset Securitization.

The following tables detail our securitized debt obligations ($ in thousands):

	June 30, 2019
Securitized Debt Obligations	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets		23	$	1,000,000	$	1,000,000		L+3.67	%		June 2022
Financing provided		1		817,500		812,857		L+1.70	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)		1		695,956		693,272		L+3.60	%		June 2023
Financing provided		1		474,620		474,507		L+1.65	%		June 2033
Total
Collateral assets		24	$	1,695,956	$	1,693,272		L+3.64	%
Financing provided(4)		2	$	1,292,120	$	1,287,364		L+1.68	%
	December 31, 2018
Securitized Debt Obligations	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets		26	$	1,000,000	$	1,000,000		6.25	%		Apr. 2022
Financing provided		1		817,500		811,023		L+1.74	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)		1		682,297		678,770		L+3.60	%		June 2023
Financing provided		1		474,620		474,448		L+1.65	%		June 2033
Total
Collateral assets		27	$	1,682,297	$	1,678,770		6.19	%
Financing provided(4)		2	$	1,292,120	$	1,285,471		L+1.71	%

____________

(1)	As of June 30, 2019, all of our loans financed by securitized debt obligations earned a floating rate of interest. As of December 31, 2018, 98% of our loans financed by securitized debt obligations earned a floating rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.
(2)	Loan term represents weighted-average final maturity, assuming all extension options are exercised by the borrower. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.
(3)	The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.
(4)	During the three and six months ended June 30, 2019, we recorded $12.5 million and $25.0 million, respectively, of interest expense related to our securitized debt obligations. During the three and six months ended June 30, 2018, we recorded $12.0 million and $23.1 million, respectively, of interest expense related to our securitized debt obligations.

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Secured Term Loan, Net

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Secured Term Loan, Net

8. SECURED TERM LOAN, NET

In April 2019 we entered into a senior secured term loan facility, or the Secured Term Loan. As of June 30, 2019, the following Secured Term Loan was outstanding ($ in thousands):

Term Loan Issuance	Face Value		Coupon Rate			All-in Cost(1)			Maturity
Term Loan B	$	500,000		L+2.50	%		L+2.80	%	April 23, 2026
____________

(1)   Includes issue discount and transaction expenses that are amortized through interest expense over the life of the Secured Term Loan.

The Secured Term Loan is partially amortizing, with an amount equal to 1.0% per annum of the original principal balance due in quarterly installments beginning on September 30, 2019. The issue discount and transaction expenses on the Secured Term Loan were $1.3 million and $7.4 million, respectively, which will be amortized into interest expense over the life of the Secured Term Loan. The guarantee under our Secured Term Loan contains the financial covenant that our indebtedness shall not exceed 83.33% of our total assets. As of June 30, 2019, we were in compliance with this covenant. Refer to Note 2 for additional discussion of our accounting policies for the Secured Term Loan.

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Convertible Notes, Net

6 Months Ended

Jun. 30, 2019

Text Block [Abstract]

Convertible Notes, Net

9. CONVERTIBLE NOTES, NET

As of June 30, 2019, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

Convertible Notes Issuance	Face Value		Coupon Rate			All-in Cost(1)			Conversion Rate(2)		Maturity
May 2017	$	402,500		4.38	%		4.85	%		28.0324		May 5, 2022
March 2018	$	220,000		4.75	%		5.33	%		27.6052		March 15, 2023
____________

(1)

Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

(2)

Represents the shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $35.67 and $36.23 per share of class A common stock, respectively, for the May 2017 and March 2018 convertible notes. The cumulative dividend threshold as defined in the respective May 2017 and March 2018 convertible notes supplemental indentures have not been exceeded as of June 30, 2019.

The Convertible Notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on January 31, 2022 and December 14, 2022 for the May 2017 and March 2018 convertible notes, respectively, at the applicable conversion rate in effect on the conversion date. Thereafter, the Convertible Notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. We may not redeem the Convertible Notes prior to maturity. The last reported sale price of our class A common stock of $35.58 on June 28, 2019, the last trading day in the quarter ended June 30, 2019, was less than the per share conversion price of the May 2017 and March 2018 convertible notes. We have the intent and ability to settle each series of the Convertible Notes in cash and, as a result, the Convertible Notes did not have any impact on our diluted earnings per share.

Upon our issuance of the May 2017 convertible notes, we recorded a $979,000 discount based on the implied value of the conversion option and an assumed effective interest rate of 4.57%, as well as $8.4 million of issue discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the May 2017 convertible notes issuance is 4.91% per annum.

Upon our issuance of the March 2018 convertible notes, we recorded a $1.5 million discount based on the implied value of the conversion option and an assumed effective interest rate of 5.25%, as well as $5.2 million of issue discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the March 2018 convertible notes issuance is 5.49% per annum.

The following table details the net book value of our Convertible Notes on our consolidated balance sheets ($ in thousands):

	June 30, 2019			December 31, 2018
Face value	$	622,500		$	622,500
Unamortized discount		(10,288	)		(11,740	)
Deferred financing costs		(740	)		(849	)
Net book value	$	611,472		$	609,911

The following table details our interest expense related to the Convertible Notes ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cash coupon	$	7,015	$	9,274	$	14,030	$	16,056
Discount and issuance cost amortization		788		1,206		1,560		2,395
Total interest expense	$	7,803	$	10,480	$	15,590	$	18,451

As of both June 30, 2019 and December 31, 2018, accrued interest payable for the Convertible Notes was $6.0 million. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

10. DERIVATIVE FINANCIAL INSTRUMENTS

The sole objective of our use of derivative financial instruments is to minimize the risks and/or costs associated with our investments and/or financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815 – “Derivatives and Hedging.” Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks. Refer to Note 2 for additional discussion of the accounting for designated and non-designated hedges.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates may also have other financial relationships.

Net Investment Hedges of Foreign Currency Risk

Certain of our international investments expose us to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional currency, the U.S. dollar. We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar.

June 30, 2019				December 31, 2018
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Sell GBP Forward	4	£	360,600	Sell GBP Forward	3	£	192,300
Sell EUR Forward	2	€	339,200	Sell AUD Forward	2	A$	187,600
Sell AUD Forward	4	A$	123,900	Sell EUR Forward	1	€	185,000
Sell CAD Forward	2	C$	39,100	Sell CAD Forward	1	C$	70,600

Cash Flow Hedges of Interest Rate Risk

Certain of our transactions expose us to interest rate risks, which include a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate caps and swaps, and may also include interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk.

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

June 30, 2019
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike		Index		Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	2	C$	17,273		1.0%		CDOR	1.2
Interest Rate Caps	3	$	66,502		2.4%		USD LIBOR	0.2
Interest Rate Caps	1	C$	21,709		3.0%		CDOR	0.5
December 31, 2018
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike		Index		Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	3	C$	90,472		1.0%		CDOR	0.5
Interest Rate Caps	9	$	204,248		2.4%		USD LIBOR	0.5
Interest Rate Caps	2	C$	39,998		2.5%		CDOR	0.6

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt. During the twelve months following June 30, 2019, we estimate that an additional $82,000 will be reclassified from accumulated other comprehensive income (loss) as an increase to interest income.  

Non-designated Hedges

During the three and six months ended June 30, 2019, we recorded losses of $516,000 and gains of $144,000, respectively, related to non-designated hedges that were reported as a component of interest expense in our consolidated financial statements. During the three and six months ended June 30, 2018, we recorded losses of $69,000 and gains of $146,000, respectively, related to such non-designated hedges.

The following tables summarize our non-designated hedges (notional amount in thousands):

June 30, 2019
Non-designated Hedges	Number of Instruments	Notional Amount
Buy AUD / Sell USD Forward	1	A$	99,000
Buy USD / Sell AUD Forward	1	A$	99,000
Buy CAD / Sell USD Forward	3	C$	19,400
Buy USD / Sell CAD Forward	3	C$	19,400
Buy GBP / Sell EUR Forward	1	€	12,857
December 31, 2018
Non-designated Hedges	Number of Instruments	Notional Amount
Buy AUD / Sell USD Forward	1	A$	55,000
Buy USD / Sell AUD Forward	1	A$	55,000
Buy GBP / Sell USD Forward	1	£	23,200
Buy USD / Sell GBP Forward	1	£	23,200
Buy GBP / Sell EUR Forward	1	€	12,857

Valuation of Derivative Instruments

The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

	Fair Value of Derivatives in an Asset Position(1) as of				Fair Value of Derivatives in a Liability Position(2) as of
	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	12,002	$	8,210	$	3,945	$	1,307
Interest rate derivatives		145		590		—		—
Total	$	12,147	$	8,800	$	3,945	$	1,307
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	1,853	$	1,116	$	1,023	$	1,618
Interest rate derivatives		—		—		—		—
Total	$	1,853	$	1,116	$	1,023	$	1,618
Total Derivatives	$	14,000	$	9,916	$	4,968	$	2,925
____________

(1) Included in other assets in our consolidated balance sheets.

(2) Included in other liabilities in our consolidated balance sheets.

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

	Amount of Gain (Loss) Recognized in OCI on Derivatives						Location of Gain (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Derivatives in Hedging Relationships	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019							Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Net Investment Hedges
Foreign exchange contracts(1)	$	10,941		$	9,295			Interest Expense		$	—		$	—
Cash Flow Hedges
Interest rate derivatives		(33	)		(166	)		Interest Expense	(2)		(6	)		163
Total	$	10,908		$	9,129					$	(6	)	$	163
____________

(1)	During the three and six months ended June 30, 2019, we received net cash settlements of $5.0 million and $7.0 million, respectively, on our foreign currency forward contracts. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.
(2)	During the three months ended June 30, 2019, we recorded total interest and related expenses of $116.9 million, which included $6,000 related to our cash flow hedges. During the six months ended June 30, 2019, we recorded total interest and related expenses of $235.6 million, which included a $163,000 expense reduction related to income generated by our cash flow hedges.

Credit-Risk Related Contingent Features

We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of June 30, 2019, we were in a net asset position with one of our derivative counterparties and in a net liability position with our other derivative counterparty and did not have any collateral posted under these derivative contracts. As of December 31, 2018, we were in a net asset position with each such derivative counterparty and did not have any collateral posted under these derivative contracts.    

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Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Equity

11. EQUITY

Stock and Stock Equivalents

Authorized Capital

As of June 30, 2019, we had the authority to issue up to 300,000,000 shares of stock, consisting of 200,000,000 shares of class A common stock and 100,000,000 shares of preferred stock. Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval. In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock. We did not have any shares of preferred stock issued and outstanding as of June 30, 2019.

Class A Common Stock and Deferred Stock Units

Holders of shares of our class A common stock are entitled to vote on all matters submitted to a vote of stockholders and are entitled to receive such dividends as may be authorized by our board of directors and declared by us, in all cases subject to the rights of the holders of shares of outstanding preferred stock, if any.

The following table details our issuance of class A common stock during the six months ended June 30, 2019:

	Class A Common Stock Offerings				2019 Total / Wtd. Avg.
	June 2019		At-the-Market 2019(1)
Shares issued		8,625,000		1,909,628		10,534,628
Gross share issue price(2)	$	36.00	$	34.63	$	35.75
Net share issue price(3)	$	35.62	$	34.28	$	35.38
Net proceeds(4)	$	306,952	$	65,389	$	372,341
____________

(1)	Issuance represents shares issued under our at-the-market program.
(2)	Represents the weighted-average gross price per share paid by underwriters or sales agents, as applicable.
(3)	Represents the weighted-average net proceeds per share after underwriting or sales discounts and commissions.
(4)	Net proceeds represents proceeds received from the underwriters less applicable transaction costs.

We also issue restricted class A common stock under our stock-based incentive plans. Refer to Note 14 for additional discussion of these long-term incentive plans. In addition to our class A common stock, we also issue deferred stock units to certain members of our board of directors in lieu of cash compensation for services rendered. These deferred stock units are non-voting, but carry the right to receive dividends in the form of additional deferred stock units in an amount equivalent to the cash dividends paid to holders of shares of class A common stock.

The following table details the movement in our outstanding shares of class A common stock, including restricted class A common stock and deferred stock units:

	Six Months Ended June 30,
Common Stock Outstanding(1)	2019		2018
Beginning balance		123,664,577		108,081,077
Issuance of class A common stock(2)		10,535,181		3,252,325
Issuance of restricted class A common stock, net		317,339		305,703
Issuance of deferred stock units		15,697		15,919
Ending balance		134,532,794		111,655,024
____________

(1)	Includes deferred stock units held by members of our board of directors of 244,536 and 213,136 as of June 30, 2019 and 2018, respectively.
(2)	Includes 553 and 876 shares issued under our dividend reinvestment program during the six months ended June 30, 2019 and 2018, respectively.

Dividend Reinvestment and Direct Stock Purchase Plan

On March 25, 2014, we adopted a dividend reinvestment and direct stock purchase plan, under which we registered and reserved for issuance, in the aggregate, 10,000,000 shares of class A common stock. Under the dividend reinvestment component of this plan, our class A common stockholders can designate all or a portion of their cash dividends to be reinvested in additional shares of class A common stock. The direct stock purchase component allows stockholders and new investors, subject to our approval, to purchase shares of class A common stock directly from us. During the three and six months ended June 30, 2019, we issued 272 shares and 553 shares, respectively, of class A common stock under the dividend reinvestment component of the plan compared to 421 shares and 876 shares, respectively, for the same periods in 2018. As of June 30, 2019, a total of 9,994,685 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

At the Market Stock Offering Program

On November 14, 2018, we entered into six equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our class A common stock. Sales of class A common stock made pursuant to our ATM Agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended. Actual sales will depend on a variety of factors including market conditions, the trading price of our class A common stock, our capital needs, and our determination of the appropriate sources of funding to meet such

needs. During the six months ended June 30, 2019, we issued and sold 1,909,628 shares of class A common stock under ATM Agreements, generating net proceeds totaling $65.4 million. During the six months ended June 30, 2018, we issued and sold 3,251,449 shares of class A common stock under ATM Agreements, with net proceeds totaling $102.5 million. As of June 30, 2019, shares of our class A common stock with an aggregate sales price of $363.8 million remained available for issuance under our ATM Agreements.

Dividends

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Our dividend policy remains subject to revision at the discretion of our board of directors. All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

On June 14, 2019, we declared a dividend of $0.62 per share, or $83.3 million, that was paid on July 15, 2019, to stockholders of record as of June 28, 2019.

The following table details our dividend activity ($ in thousands, except per share data):

	Three Months Ended  June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Dividends declared per share of common stock	$	0.62	$	0.62	$	1.24	$	1.24
Total dividends declared	$	83,259	$	69,094	$	161,172	$	136,174

Earnings Per Share

We calculate our basic and diluted earnings per share using the two-class method for all periods presented as the unvested shares of our restricted class A common stock qualify as participating securities, as defined by GAAP. These restricted shares have the same rights as our other shares of class A common stock, including participating in any dividends, and therefore have been included in our basic and diluted net income per share calculation. Our Convertible Notes are excluded from dilutive earnings per share as we have the intent and ability to settle these instruments in cash.

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding ($ in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income(1)	$	75,174	$	72,312	$	151,738	$	133,271
Weighted-average shares outstanding, basic and diluted		126,475,244		109,069,078		125,410,064		108,735,193
Per share amount, basic and diluted	$	0.59	$	0.66	$	1.21	$	1.23
__________

(1)   Represents net income attributable to Blackstone Mortgage Trust, Inc.

Other Balance Sheet Items

Accumulated Other Comprehensive Loss

As of June 30, 2019, total accumulated other comprehensive loss was $29.4 million, primarily representing (i) $108.8 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $79.4 million of net realized and unrealized gains related to changes in the fair value of derivative instruments. As of December 31, 2018, total accumulated other comprehensive loss was $34.2 million, primarily representing (i) $104.6 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies and (ii) an offsetting $70.4 million of net realized and unrealized gains related to changes in the fair value of derivative instruments.

Non-Controlling Interests

The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are not owned by us. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of our Multifamily Joint Venture. As of June 30, 2019, our Multifamily Joint Venture’s total equity was $193.7 million, of which $164.6 million was owned by us, and $29.1 million was allocated to non-controlling interests. As of December 31, 2018, our Multifamily Joint Venture’s total equity was $69.9 million, of which $59.4 million was owned by us, and $10.5 million was allocated to non-controlling interests.

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Other Expenses

6 Months Ended

Jun. 30, 2019

Other Income and Expenses [Abstract]

Other Expenses

12. OTHER EXPENSES

Our other expenses consist of the management and incentive fees we pay to our Manager and our general and administrative expenses.

Management and Incentive Fees

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager earns a base management fee in an amount equal to 1.50% per annum multiplied by our outstanding equity balance, as defined in the Management Agreement. In addition, our Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.

During the three and six months ended June 30, 2019, we incurred $13.3 million and $26.4 million, respectively, of management fees payable to our Manager, compared to $11.1 million and $22.2 million during the same periods in 2018. In addition, during the three and six months ended June 30, 2019, we incurred $7.7 million and $14.4 million, respectively, of incentive fees payable to our Manager, compared to $11.3 million and $15.7 million during the same periods in 2018.

As of June 30, 2019 and December 31, 2018 we had accrued management and incentive fees payable to our Manager of $21.0 million and $18.6 million, respectively.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Professional services(1)	$	1,249	$	1,139	$	2,439	$	2,361
Operating and other costs(1)		894		830		1,249		1,339
Subtotal		2,143		1,969		3,688		3,700
Non-cash compensation expenses
Restricted class A common stock earned		7,629		6,653		15,272		13,504
Director stock-based compensation		125		125		250		250
Subtotal		7,754		6,778		15,522		13,754
Total general and administrative expenses	$	9,897	$	8,747	$	19,210	$	17,454
____________

(1) During the three and six months ended June 30, 2019, we recognized an aggregate $164,000 and $333,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and six months ended June 30, 2018, we recognized an aggregate $124,000 and $225,000, respectively, of expenses related to our Multifamily Joint Venture.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

13. INCOME TAXES

We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of June 30, 2019 and December 31, 2018, we were in compliance with all REIT requirements.

Securitization transactions could result in the creation of taxable mortgage pools for federal income tax purposes. As a REIT, so long as we own 100% of the equity interests in a taxable mortgage pool, we generally would not be adversely affected by the characterization of the securitization as a taxable mortgage pool. Certain categories of stockholders, however, such as foreign stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, or UBTI, could be subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage pool. We currently own no UBTI producing assets and we do not intend to purchase or generate assets that produce UBTI distributions in the future.

During the three and six months ended June 30, 2019, we recorded a current income tax provision of $46,000 and $147,000, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes. During the three and six months ended June 30, 2018, we recorded a current income tax provision of $104,000 and $224,000, respectively. We did not have any deferred tax assets or liabilities as of June 30, 2019 or December 31, 2018.  

Effective January 1, 2018, under legislation from the Tax Cuts and Jobs Act of 2017, the maximum U.S. federal corporate income tax rate was reduced from 35% to 21%. Accordingly, to the extent that the activities of our taxable REIT subsidiaries generate taxable income in future periods, they may be subject to lower U.S. federal income tax rates.

We have net operating losses, or NOLs, generated by our predecessor business that may be carried forward and utilized in current or future periods. As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our NOLs is generally limited to $2.0 million per annum by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust. As of December 31, 2018, we had estimated NOLs of $159.0 million that will expire in 2029, unless they are utilized by us prior to expiration.

As of June 30, 2019, tax years 2015 through 2018 remain subject to examination by taxing authorities.

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Stock-Based Incentive Plans

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Incentive Plans

14. STOCK-BASED INCENTIVE PLANS

We are externally managed by our Manager and do not currently have any employees. However, as of June 30, 2019, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through our issuance of stock-based instruments.

We had stock-based incentive awards outstanding under nine benefit plans as of June 30, 2019. Seven of such benefit plans have expired and no new awards may be issued under them. Under our two current benefit plans, a maximum of 5,000,000 shares of our class A common stock may be issued to our Manager, our directors and officers, and certain employees of affiliates of our Manager. As of June 30, 2019, there were 3,973,619 shares available under our current benefit plans.

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2018		1,614,907		$	32.94
Granted		334,904			31.54
Vested		(420,780	)		32.15
Forfeited		(17,565	)		31.55
Balance as of June 30, 2019		1,511,466		$	32.87

These shares generally vest in installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of our current benefit plans. The 1,511,466 shares of restricted class A common stock outstanding as of June 30, 2019 will vest as follows: 527,627 shares will vest in 2019; 649,043 shares will vest in 2020; and 334,796 shares will vest in 2021. As of June 30, 2019, total unrecognized compensation cost relating to unvested share-based compensation arrangements was $44.9 million based on the grant date fair value of shares granted subsequent to July 1, 2018. The compensation cost of our share based compensation arrangements for awards granted before July 1, 2018 is based on $31.43, the closing price of our class A common stock on the last trading day prior to July 1, 2018. This cost is expected to be recognized over a weighted-average period of 1.1 years from June 30, 2019.

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Fair Values

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Values

15. FAIR VALUES

Assets and Liabilities Measured at Fair Value

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	June 30, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Derivatives	$	—	$	14,000	$	—	$	14,000	$	—	$	9,916	$	—	$	9,916
Liabilities
Derivatives	$	—	$	4,968	$	—	$	4,968	$	—	$	2,925	$	—	$	2,925

Refer to Note 2 for further discussion regarding fair value measurement.

Fair Value of Financial Instruments

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value.

The following table details the book value, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):

	June 30, 2019						December 31, 2018
	Book Value		Face Amount		Fair Value		Book Value		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	80,584	$	80,584	$	80,584	$	105,662	$	105,662	$	105,662
Loans receivable, net		14,280,919		14,372,950		14,375,273		14,191,200		14,293,970		14,294,836
Debt securities held-to-maturity(1)		94,595		97,174		96,239		96,167		99,000		96,600
Financial liabilities
Secured debt agreements, net		8,257,370		8,283,613		8,283,613		8,974,756		8,996,481		8,996,481
Loan participations sold, net		—		—		—		94,418		94,528		94,528
Securitized debt obligations, net		1,287,364		1,292,120		1,291,784		1,285,471		1,292,120		1,283,086
Secured term loan, net		491,598		500,000		501,095		—		—		—
Convertible notes, net		611,472		622,500		649,275		609,911		622,500		605,348
____________

(1) Included in other assets on our consolidated balance sheets.

Estimates of fair value for cash and cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 inputs. Estimates of fair value for debt securities held-to-maturity, securitized debt obligations, and the secured term loan are measured using observable, quoted market prices, in inactive markets, or Level 2 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.

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Variable Interest Entities

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

16. VARIABLE INTEREST ENTITIES

Consolidated Variable Interest Entities

We have financed a portion of our loans through the CLO and the 2017 Single Asset Securitization, both of which are VIEs. We are the primary beneficiary of, and therefore consolidate, the CLO and the 2017 Single Asset Securitization on our balance sheet as we (i) control the relevant interests of the CLO and the 2017 Single Asset Securitization that give us power to direct the activities that most significantly affect the CLO and the 2017 Single Asset Securitization, and (ii) have the right to receive benefits and obligation to absorb losses of the CLO and the 2017 Single Asset Securitization through the subordinate interests we own.

The following table details the assets and liabilities of our consolidated CLO and 2017 Single Asset Securitization VIEs ($ in thousands):

	June 30, 2019		December 31, 2018
Assets:
Loans receivable, net	$	1,467,626	$	1,500,000
Other assets		37,043		5,440
Total assets	$	1,504,669	$	1,505,440
Liabilities:
Securitized debt obligations, net	$	1,287,364	$	1,285,471
Other liabilities		1,997		2,155
Total liabilities	$	1,289,361	$	1,287,626

Assets held by these VIEs are restricted and can be used only to settle obligations of the VIEs, including the subordinate interests owned by us. The liabilities of these VIEs are non-recourse to us and can only be satisfied from the assets of the VIEs. The consolidation of these VIEs results in an increase in our gross assets, liabilities, interest income and interest expense, however it does not affect our stockholders’ equity or net income.

Non-Consolidated Variable Interest Entities

In the third quarter of 2018, we contributed a $517.5 million loan to the $1.0 billion 2018 Single Asset Securitization, which is a VIE, and invested in the related $99.0 million subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. Our maximum exposure to loss from the 2018 Single Asset Securitization is limited to our book value of $94.6 million as of June 30, 2019. Refer to Note 17 for further details of this transaction.

We are not obligated to provide, have not provided, and do not intend to provide financial support to these consolidated and non-consolidated VIEs.

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Transactions With Related Parties

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Transactions With Related Parties

17. TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2019, and will be automatically renewed for a one-year term upon such date and each anniversary thereafter unless earlier terminated.

As of June 30, 2019 and December 31, 2018, our consolidated balance sheets included $21.0 million and $18.6 million of accrued management and incentive fees payable to our Manager, respectively. During the three and six months ended June 30, 2019, we paid management and incentive fees of $19.8 million and $38.4 million, respectively, to our Manager, compared to $15.5 million and $29.8 million during the same periods of 2018. In addition, during the three and six months ended June 30, 2019, we reimbursed our Manager for expenses incurred on our behalf of $242,000 and $430,000, respectively, compared to $215,000 and $405,000 during the same periods of 2018.

As of June 30, 2019, our Manager held 723,542 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $22.9 million, and vest in installments over three years from the date of issuance. During the three and six months ended June 30, 2019, we recorded non-cash expenses related to shares held by our Manager of $3.9 million and $7.7 million, respectively, compared to $3.2 million and $6.4 million during the same periods of 2018. Refer to Note 14 for further details on our restricted class A common stock.

An affiliate of our Manager is the special servicer of the CLO. This affiliate did not earn any special servicing fees related to the CLO during the six months ended June 30, 2019 or 2018.

During the three and six months ended June 30, 2019, we incurred $90,000 and $176,000, respectively, of expenses for various administrative, compliance, and capital market data services to third-party service providers that are affiliates of our Manager, compared to $153,000 and $293,000 during the same periods of 2018.

In the second quarter of 2019, certain Blackstone-advised investment vehicles acquired an aggregate $55.0 million participation, or 11% of the total Secured Term Loan as a part of a broad syndication lead-arranged by JP Morgan. Blackstone Advisory Partners L.P., an affiliate of our Manager, was engaged as a book-runner for the transaction and received a fee of $500,000 in such capacity. Both of these transactions were on terms equivalent to those of unaffiliated parties.

In the second quarter of 2019, we originated €191.8 million of a total €391.3 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third-party without our involvement and our 49% interest in the senior loan was made on such market terms.

In the first quarter of 2019, we originated £240.1 million of a total £490.0 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle. We will forgo all non-economic rights under the loan, including voting rights, so long as the Blackstone-advised investment vehicle controls the borrower. The senior loan terms were negotiated by a third-party without our involvement and our 49% interest in the senior loan was made on such market terms.

During the six months ended June 30, 2018, we originated two loans whereby each respective borrower engaged an affiliate of our Manager to act as title insurance agent in connection with each transaction. We did not incur any expenses or receive any revenues as a result of these transactions. We did not have any similar transactions during the six months ended June 30, 2019.

In the second quarter of 2018, we acquired from an unaffiliated third-party a 50% interest in a $1.0 billion senior loan to a borrower that is partially owned by a Blackstone-advised investment vehicle. In the third quarter of 2018, we contributed this loan to the 2018 Single Asset Securitization and invested in the related subordinate risk retention position. We will forgo all non-economic rights under the loan, including voting rights, so long as Blackstone-advised investment vehicles own the borrower above a certain threshold. Refer to Note 16 for further details on this transaction.

In the first quarter of 2018, we originated €1.0 billion of a total €7.3 billion senior term facility, or the Senior Term Facility, for the acquisition of a portfolio of Spanish real estate assets and a Spanish real estate management and loan servicing company by a joint venture between Banco Santander S.A. and certain Blackstone-advised investment vehicles. These investment vehicles own 51% of the joint venture, and we will forgo all non-economic rights under the Senior Term Facility, including voting rights, so long as Blackstone-advised investment vehicles control the joint venture. The Senior Term Facility was negotiated by the joint venture with third-party investment banks without our involvement, and our 14% interest in the Senior Term Facility was made on such market terms.

In the first quarter of 2018, we originated a $330.0 million senior loan, the proceeds of which were used by the borrower to repay an existing loan owned by a Blackstone-advised investment vehicle.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

18. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of June 30, 2019, we had unfunded commitments of $3.2 billion related to 91 loans receivable, which amounts will generally be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.

Principal Debt Repayments

Our contractual principal debt repayments as of June 30, 2019 were as follows ($ in thousands):

			Payment Timing
	Total		Less Than		1 to 3		3 to 5		More Than
	Obligation		1 Year		Years		Years		5 Years
Principal repayments under secured debt agreements(1)	$	8,283,613	$	109,374	$	3,266,552	$	4,520,799	$	386,888
Principal repayments of secured term loans(2)		500,000		3,750		10,000		10,000		476,250
Principal repayments of convertible notes(3)		622,500		—		402,500		220,000		—
Total(4)	$	9,406,113	$	113,124	$	3,679,052	$	4,750,799	$	863,138

____________

(1)	The allocation of repayments under our secured debt agreements is based on the earlier of (i) the maturity date of each facility, or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.
(2)	The Secured Term Loan is partially amortizing, with an amount equal to 1.0% per annum of the original principal balance due in quarterly installments. Refer to Note 8 for further details on our secured term loan.
(3)	Reflects the outstanding principal balance of Convertible notes, excluding any potential conversion premium. Refer to Note 9 for further details on our Convertible notes.
(4)	Does not include $406.3 million of non-consolidated senior interests and $1.3 billion of securitized debt obligations, as the satisfaction of these liabilities will not require cash outlays from us.

Board of Directors’ Compensation

As of June 30, 2019, of the eight members of our board of directors, our five independent directors are entitled to annual compensation of $175,000 each, $75,000 of which will be paid in the form of cash and $100,000 in the form of deferred stock units. The other three board members, including our chairman and our chief executive officer, are not compensated by us for their service as directors. In addition, (i) the chair of our audit committee receives additional annual cash compensation of $20,000, (ii) the other members of our audit committee receive additional annual cash compensation of $10,000, and (iii) the chairs of each of our compensation and corporate governance committees receive additional annual cash compensation of $10,000.

Litigation

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2019, we were not involved in any material legal proceedings.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made in the presentation of the prior period secured debt agreements in Note 5 to conform to the current period presentation.

Principles of Consolidation

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

In the third quarter of 2018, we contributed a loan to a single asset securitization vehicle, or the 2018 Single Asset Securitization, which is a VIE, and invested in the related subordinate risk retention position. We are not the primary beneficiary of the VIE because we do not have the power to direct the activities that most significantly affect the VIE’s economic performance and, therefore, do not consolidate the 2018 Single Asset Securitization on our balance sheet. We have classified the subordinate risk retention position as a held-to-maturity debt security that is included in other assets on our consolidated balance sheets. Refer to Note 16 for additional discussion of our VIEs.

In April 2017, we entered into a joint venture, or our Multifamily Joint Venture, with Walker & Dunlop Inc. to originate, hold, and finance multifamily bridge loans. Pursuant to the terms of the agreements governing the joint venture, Walker & Dunlop contributed 15% of the venture’s equity capital and we contributed 85%. We consolidate the Multifamily Joint Venture as we have a controlling financial interest. The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are owned by Walker & Dunlop. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on Walker & Dunlop’s pro rata ownership of our Multifamily Joint Venture.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

Revenue Recognition

Revenue Recognition

Interest income from our loans receivable portfolio and debt securities is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan or debt security as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful. Income is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash, Cash Equivalents, and Restricted Cash

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents.

During the second quarter of 2018, the letter of credit related to our restricted cash balance was cancelled and the cash was transferred out of our segregated bank account. As of both June 30, 2019 and December 31, 2018, we had no restricted cash on our consolidated balance sheets.

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $360.1 million and $320.0 million as of June 30, 2019 and December 31, 2018, respectively. This cash is maintained in segregated bank accounts, and these amounts are not included in the assets and liabilities presented in our consolidated balance sheets. Cash in these Servicing Accounts will be transferred by the respective third-party servicer to the borrower or us under the terms of the applicable loan agreement upon occurrence of certain future events. We do not generate any revenue or incur any expenses as a result of these Servicing Accounts.

Loans Receivable and Provision for Loan Losses

Loans Receivable and Provision for Loan Losses

We originate and purchase commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager. Actual losses, if any, could ultimately differ from these estimates. 

Our Manager performs a quarterly review of our portfolio of loans. In conjunction with this review, our Manager assesses the risk factors of each loan, and assigns it a risk rating based on a variety of factors, including, without limitation, loan-to-value ratio, or LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

1 -	Very Low Risk
2 -	Low Risk
3 -	Medium Risk
4 -	High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss.
5 -	Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

Debt Securities Held-to-Maturity

Debt Securities Held-to-Maturity

We classify our debt securities as held-to-maturity, as we have the intent and ability to hold these securities until maturity. We include our debt securities in other assets on our consolidated balance sheets at amortized cost.

If, based on current information and events, there is an adverse change in cash flows expected to be collected from the cash flows previously projected for one of our debt securities, an other-than-temporary impairment is deemed to have occurred. A change in expected cash flows is considered adverse if the present value of the revised cash flows (taking into consideration both the timing and amount of cash flows expected to be collected), discounted using the debt security’s current yield, is less than the present value of the previously estimated remaining cash flows. If an other-than-temporary impairment is considered to have occurred, the debt security is written down to fair value. The total other-than-temporary impairment is bifurcated into (i) the amount related to expected credit losses, and (ii) the amount related to fair value adjustments in excess of expected credit losses. The other-than-temporary impairment related to expected credit losses is calculated by comparing the amortized cost basis of the security to the present value of cash flows expected to be collected, discounted at the security’s current yield, and is recognized in earnings in the consolidated statement of operations. The remaining other-than-temporary impairment that is not related to expected credit losses is recognized in other comprehensive income (loss). A portion of other-than-temporary impairments recognized through earnings is accreted back to the amortized cost basis of the security through interest income, while amounts recognized through other comprehensive income (loss) are amortized over the life of the security with no impact on earnings.

Derivative Financial Instruments

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in net income prospectively. Changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of accumulated other comprehensive income (loss) on our consolidated financial statements. Deferred gains and losses are reclassified out of accumulated other comprehensive income (loss) and into net income in the same period or periods during which

the hedged transaction affects earnings, and are presented in the same line item as the earnings effect of the hedged item. For cash flow hedges, this is typically when the periodic swap settlements are made, while for net investment hedges, this occurs when the hedged item is sold or substantially liquidated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its fair value are included in net income concurrently.

Secured Debt Agreements

Secured Debt Agreements

Where applicable, we record investments financed with repurchase agreements as separate assets and the related borrowings under any repurchase agreements are recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the repurchase agreements are reported separately on our consolidated statements of operations.

Senior Loan Participations

Senior Loan Participations

In certain instances, we finance our loans through the non-recourse syndication of a senior loan interest to a third-party. Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining subordinate loan and not the non-consolidated senior interest we sold.

Secured Term Loan

Secured Term Loan

We record our secured term loans as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the secured term loan as additional non-cash interest expense. 

Convertible Notes

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our convertible notes as of the respective issuance dates based on our nonconvertible debt borrowing rate. The equity component of each series of our convertible notes is reflected within additional paid-in capital on our consolidated balance sheet, and the resulting issue discount is amortized over the period during which such convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to such convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Deferred Financing Costs

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

ASC 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type

of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

• Level 1: Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

• Level 2: Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.

• Level 3: Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third-parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee composed of members of senior management of our Manager, including our Chief Executive Officer, Chief Financial Officer, and other senior officers.

Certain of our other assets are reported at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets that are recorded at fair value are discussed further in Note 15. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our Manager’s estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by our Manager.

We are also required by GAAP to disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

• Loans receivable, net: The fair values of these loans were estimated by our Manager based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and indications of market value from other market participants.

• Debt securities held-to-maturity: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

• Secured debt agreements, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

• Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

• Securitized debt obligations, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Secured term loan, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

• Convertible notes, net: Each series of the convertible notes is actively traded and their fair values were obtained using quoted market prices.

Income Taxes

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. If we were to fail to meet these requirements, we may be subject to federal, state, and local income tax on current and past income, and penalties. Refer to Note 13 for additional information.

Stock-Based Compensation

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain individuals employed by an affiliate of our Manager that vest over the life of the awards, as well as deferred stock units issued to certain members of our board of directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 14 for additional information.

Earnings per Share

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units. Refer to Note 11 for additional discussion of earnings per share.

Foreign Currency

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income (loss).

Underwriting Commissions and Offering Costs

Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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,” or ASU 2019-04. ASU 2019-04 amends existing guidance originally issued by (i) ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13, (ii) ASU 2017-12 “Derivatives and Hedging Topic 815: Targeted Improvements to Accounting for Hedging Activities,” or ASU 2017-12, and (iii) ASU 2016-01 “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” or ASU 2016-01. The amendments in ASU 2019-04 that relate to ASU 2016-13 clarify specific issues related to the implementation of the current expected credit loss model, which are effective for fiscal years beginning after December 15, 2019 and are to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. The amendments in ASU 2019-04 that relate to ASU 2017-12 primarily update guidance related to fair value hedges and do not have an impact on our consolidated financial statements. The amendments in ASU 2019-04 that relate to ASU 2016-01 primarily update guidance related to equity securities and do not have an impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of January 1, 2020. While we are currently evaluating the impact ASU 2016-13 will have on our consolidated financial statements, we expect that the adoption will result in an increased amount of provisions for potential loan losses as well as the recognition of such provisions earlier in the lending cycle. We currently do not have any provision for loan losses in our consolidated financial statements.

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Loans Receivable, Net (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Overall Statistics for Loans Receivable Portfolio

The following table details overall statistics for our loans receivable portfolio ($ in thousands):

	June 30, 2019			December 31, 2018
Number of loans		123			125
Principal balance	$	14,372,950		$	14,293,970
Net book value	$	14,280,919		$	14,191,200
Unfunded loan commitments(1)	$	3,217,266		$	3,405,945
Weighted-average cash coupon(2)		5.42	%		5.67	%
Weighted-average all-in yield(2)		5.77	%		6.00	%
Weighted-average maximum maturity (years)(3)		3.7			3.9
___________________

(1)	Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.
(2)	As of June 30, 2019, 99% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 1% earned a fixed rate of interest. As of December 31, 2018, 98% of our loans by principal balance earned a floating rate of interest, primarily indexed to USD LIBOR, and 2% earned a fixed rate of interest. Cash coupon and all-in yield assume applicable floating benchmark rates as of June 30, 2019 and December 31, 2018, respectively, for weighted-average calculation. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
(3)	Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of June 30, 2019, 63% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 37% were open to repayment by the borrower without penalty. As of December 31, 2018, 75% of our loans were subject to yield maintenance or other prepayment restrictions and 25% were open to repayment by the borrower without penalty.

Activity Relating to Loans Receivable Portfolio

Activity relating to our loans receivable portfolio was as follows ($ in thousands):

	Principal Balance			Deferred Fees / Other Items(1)			Net Book Value
December 31, 2018	$	14,293,970		$	(102,770	)	$	14,191,200
Loan fundings		1,922,219			—			1,922,219
Loan repayments		(1,833,414	)		—			(1,833,414	)
Unrealized (loss) gain on foreign currency translation		(9,825	)		204			(9,621	)
Deferred fees and other items		—			(17,721	)		(17,721	)
Amortization of fees and other items		—			28,256			28,256
June 30, 2019	$	14,372,950		$	(92,031	)	$	14,280,919
____________

Property Type and Geographic Distribution of Properties Securing Loans in Portfolio

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

June 30, 2019
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
Office	54	$	7,205,141	$	7,258,497		48%
Hotel	17		2,380,920		2,460,389		17
Multifamily	38		2,243,177		2,272,201		15
Industrial	5		685,128		688,981		5
Retail	3		381,509		386,617		3
Self-Storage	2		281,990		282,978		2
Condominium	1		228,817		230,258		2
Other	3		874,237		1,199,331		8
	123	$	14,280,919	$	14,779,252		100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
United States
Northeast	27	$	3,999,237	$	4,025,533		28%
West	26		2,953,508		2,995,900		20
Southeast	21		2,409,038		2,420,751		16
Midwest	10		1,109,007		1,115,860		8
Southwest	14		546,008		548,794		4
Northwest	4		175,039		175,770		1
Subtotal	102		11,191,837		11,282,608		77
International
United Kingdom	11		1,270,547		1,616,321		11
Spain	1		1,057,616		1,063,416		7
Australia	3		343,650		345,741		2
Germany	1		196,985		250,975		2
Canada	4		150,302		149,942		1
Belgium	1		69,982		70,249		—
Subtotal	21		3,089,082		3,496,644		23
Total	123	$	14,280,919	$	14,779,252		100%
____________

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million of such non-consolidated senior interests as of June 30, 2019.
(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

December 31, 2018
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
Office	55	$	7,104,842	$	7,164,466		49%
Hotel	18		2,591,565		2,673,763		18
Multifamily	34		2,193,699		2,206,740		15
Industrial	5		680,808		685,776		5
Retail	4		451,099		452,900		3
Condominium	4		304,545		368,104		2
Self-Storage	2		278,473		280,043		2
Other	3		586,169		909,052		6
	125	$	14,191,200	$	14,740,844		100%
Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Percentage of Portfolio
United States
Northeast	32	$	4,322,114	$	4,359,938		31%
West	29		3,137,072		3,222,706		22
Southeast	19		2,258,033		2,271,664		15
Midwest	9		1,161,637		1,170,619		8
Southwest	13		478,665		481,745		3
Northwest	4		238,844		239,872		2
Subtotal	106		11,596,365		11,746,544		81
International
Spain	1		1,124,174		1,131,334		8
United Kingdom	7		754,299		1,094,663		7
Canada	5		316,268		313,229		2
Australia	3		310,372		312,893		2
Belgium	1		70,621		71,007		—
Germany	1		11,585		63,637		—
Netherlands	1		7,516		7,537		—
Subtotal	19		2,594,835		2,994,300		19
Total	125	$	14,191,200	$	14,740,844		100%
____________

(1)	In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $446.9 million of such non-consolidated senior interests as of December 31, 2018.
(2)	Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings

The following table allocates the principal balance and net book value of our loans receivable based on our internal risk ratings ($ in thousands):

June 30, 2019							December 31, 2018
Risk Rating		Number of Loans	Net Book Value		Total Loan Exposure(1)(2)		Number of Loans	Net Book Value		Total Loan Exposure(1)(2)
	1	4	$	275,427	$	275,806	2	$	181,366	$	182,740
	2	38		4,208,307		4,235,448	38		3,860,432		3,950,025
	3	78		9,630,494		10,100,685	85		10,149,402		10,608,079
	4	3		166,691		167,313	—		—		—
	5	—		—		—	—		—		—
		123	$	14,280,919	$	14,779,252	125	$	14,191,200	$	14,740,844

____________

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $406.3 million and $446.9 million of such non-consolidated senior interests as of June 30, 2019 and December 31, 2018, respectively.

(2)

Excludes investment exposure to the $1.0 billion 2018 Single Asset Securitization. See Note 4 for details of the subordinated risk retention interest we own in the 2018 Single Asset Securitization.

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Other Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Text Block [Abstract]

Summary of Components of Other Assets

The following table details the components of our other assets ($ in thousands):

	June 30, 2019		December 31, 2018
Debt securities held-to-maturity(1)	$	94,595	$	96,167
Accrued interest receivable		51,065		56,679
Loan portfolio payments held by servicer(2)		43,236		6,133
Derivative assets		14,000		9,916
Prepaid expenses		278		647
Prepaid taxes		3		6
Other		324		965
Total	$	203,501	$	170,513
____________

(1)	Represents the subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization, with a yield to full maturity of L+10.0% and a maximum maturity date of June 9, 2025, assuming all extension options are exercised by the borrower. Refer to Note 16 for additional discussion.
(2)	Represents loan principal and interest payments held by our third-party loan servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle.

Summary of Components of Other Liabilities

The following table details the components of our other liabilities ($ in thousands):

	June 30, 2019		December 31, 2018
Accrued dividends payable	$	83,259	$	76,530
Accrued interest payable		25,933		25,588
Accrued management and incentive fees payable		20,984		18,586
Accounts payable and other liabilities		5,631		4,583
Derivative liabilities		4,968		2,925
Total	$	140,775	$	128,212

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Secured Debt Agreements, Net (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of Secured Debt Agreements

The following table details our secured debt agreements ($ in thousands):

	Secured Debt Agreements
	Borrowings Outstanding
	June 30, 2019			December 31, 2018
Secured credit facilities	$	8,065,675		$	8,870,897
Asset-specific financings		217,938			81,739
Revolving credit agreement		—			43,845
Total secured debt agreements	$	8,283,613		$	8,996,481
Deferred financing costs(1)		(26,243	)		(21,725	)
Net book value of secured debt	$	8,257,370		$	8,974,756
___________

(1)   Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

Credit Facilities

The following tables detail our secured credit facilities ($ in thousands):

	June 30, 2019
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,861,121	$	1,861,121	$	—	$	2,353,629
Wells Fargo		1,742,942		1,251,130		491,812		2,285,101
Citibank		1,006,592		922,804		83,788		1,278,710
Barclays		933,424		902,146		31,278		1,166,780
JP Morgan		959,907		861,744		98,163		1,221,674
Bank of America		768,871		768,871		—		962,378
Morgan Stanley		434,199		378,990		55,209		576,614
Société Générale		321,182		321,182		—		419,034
Goldman Sachs		292,753		247,753		45,000		401,422
MetLife		233,616		233,616		—		296,356
Goldman Sachs - Multi. JV(3)		219,316		219,316		—		293,877
Bank of America - Multi. JV(3)		97,002		97,002		—		123,856
	$	8,870,925	$	8,065,675	$	805,250	$	11,379,431
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

	December 31, 2018
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,839,698	$	1,839,698	$	—	$	2,325,047
Wells Fargo		1,908,509		1,822,154		86,355		2,514,513
JP Morgan		1,010,628		1,010,628		—		1,266,259
Barclays		890,620		890,620		—		1,113,275
Citibank		852,470		663,917		188,553		1,076,085
Bank of America		873,446		873,446		—		1,090,117
MetLife		675,329		675,329		—		852,733
Morgan Stanley		341,241		276,721		64,520		457,496
Société Générale		321,182		321,182		—		404,048
Goldman Sachs		230,140		230,140		—		295,368
Goldman Sachs - Multi. JV(3)		170,060		170,060		—		212,983
Bank of America - Multi. JV(3)		97,002		97,002		—		121,636
	$	9,210,325	$	8,870,897	$	339,428	$	11,729,560
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

Summary of Key Terms of Credit Facilities

The following tables outline the key terms of our credit facilities as of June 30, 2019:

Lender	Currency		Guarantee(1)	Margin Call(2)		Term/Maturity
Goldman Sachs - Multi. JV(3)		$	25%		Collateral marks only		July 12, 2020(6)
JP Morgan		$ / £	50%		Collateral marks only		January 7, 2021(7)
Bank of America - Multi. JV(3)		$	43%		Collateral marks only		July 19, 2021(8)
Deutsche Bank		$ / €	59%(4)		Collateral marks only		August 9, 2021(4)
Morgan Stanley		$ / £ / €	25%		Collateral marks only		March 1, 2022
Barclays		$ / £ / €	25%		Collateral marks only		June 18, 2024(9)
MetLife		$	50%		Collateral marks only		April 22, 2023(10)
Bank of America		$	50%		Collateral marks only		May 21, 2023(11)
Goldman Sachs		$	25%		Collateral marks only		October 22, 2023(12)
Citibank		$ / £ / € / A$ / C$	25%		Collateral marks only		Term matched(13)
Société Générale		$ / £ / €	25%		Collateral marks only		Term matched(13)
Wells Fargo		$ / C$	25%(5)		Collateral marks only		Term matched(13)
____________

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.
(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.
(4)	Includes two one-year extension options which may be exercised at our sole discretion. Specific borrowings outstanding of $850.7 million are 100% guaranteed and the related maturity dates are term-matched to the respective collateral assets. The remainder of the credit facility borrowings are 25% guaranteed.
(5)	In addition to the 25% guarantee across all borrowings, there is an incremental guarantee of $171.5 million related to $314.0 million of specific borrowings outstanding.
(6)	Includes a one-year extension option which may be exercised at our sole discretion.
(7)	Maturity dates for $520.6 million of specific borrowings outstanding are term-matched to the respective collateral assets.
(8)	Includes two one-year extension options which may be exercised at our sole discretion.
(9)	Includes four one-year extension options which may be exercised at our sole discretion.
(10)	Includes three one-year extension options which may be exercised at our sole discretion.
(11)	Includes two one-year extension options which may be exercised at our sole discretion.
(12)	Includes three one-year extension options which may be exercised at our sole discretion.
(13)	These secured credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.

Currency	Potential Borrowings(1)		Outstanding Borrowings		Floating Rate  Index(2)	Spread(3)	Advance Rate(4)
$		$  6,948,419		$  6,199,362	USD LIBOR	1.69 %		79.6 %
€		€     797,442		€     748,028	EURIBOR	1.50 %		80.0 %
£		£     564,386		£     564,386	GBP LIBOR	2.05 %		77.9 %
A$		A$     255,270		A$   255,270	BBSY	1.90 %		78.0 %
C$		C$     156,919		C$   156,925	CDOR	1.83 %		80.7 %
		$  8,870,925		$  8,065,675		1.71 %		79.5 %
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Floating rate indices are generally matched to the payment timing under the terms of each secured credit facility and its respective collateral assets.
(3)	Represents weighted-average spread over the applicable floating rate index, based on borrowings outstanding.
(4)	Represents weighted-average advance rate based on the approved outstanding principal balance of the collateral assets pledged.

Summary of Asset-Specific Financings

The following tables detail our asset-specific financings ($ in thousands):

June 30, 2019

Asset-Specific Financings

Count

Principal Balance

Book Value

Wtd. Avg. Yield/Cost(1)

Guarantee(2)

Wtd. Avg. Term(3)

Collateral assets

4

$

281,620

$

268,864

L+4.94

%

n/a

Mar. 2023

Financing provided

4

217,938

209,912

L+3.53

%

84,547

Mar. 2023

December 31, 2018

Asset-Specific Financings

Count

Principal Balance

Book Value

Wtd. Avg. Yield/Cost(1)

Guarantee(2)

Wtd. Avg. Term(3)

Collateral assets

1

$

106,739

$

104,807

L+6.08

%

n/a

Aug. 2022

Financing provided

1

81,739

80,938

L+4.07

%

n/a

Aug. 2022

____________

(1)	These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.
(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.
(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings is term-matched to the corresponding collateral loans.

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Loan Participations Sold, Net (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Summary of Statistics for Loan Participations Sold

The following table details our loan participations sold as of December 31, 2018 ($ in thousands):

December 31, 2018

Principal

Loan Participations Sold

Count

Balance

Book Value

Yield/Cost(1)

Guarantee(2)

Term

Total loan

1

$

123,745

$

122,669

L+5.92

%

n/a

Feb. 2022

Senior participation(3)

1

94,528

94,418

L+4.07

%

n/a

Feb. 2022

____________

(1)	Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)	As of December 31, 2018, our loan participations sold were non-recourse to us.
(3)	The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $110,000 as of December 31, 2018.

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Securitized Debt Obligations, Net (Tables)

6 Months Ended

Jun. 30, 2019

Text Block [Abstract]

Schedule of Information on Securitized Debt Obligations

	June 30, 2019
Securitized Debt Obligations	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets		23	$	1,000,000	$	1,000,000		L+3.67	%		June 2022
Financing provided		1		817,500		812,857		L+1.70	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)		1		695,956		693,272		L+3.60	%		June 2023
Financing provided		1		474,620		474,507		L+1.65	%		June 2033
Total
Collateral assets		24	$	1,695,956	$	1,693,272		L+3.64	%
Financing provided(4)		2	$	1,292,120	$	1,287,364		L+1.68	%
	December 31, 2018
Securitized Debt Obligations	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)			Term(2)
Collateralized Loan Obligation
Collateral assets		26	$	1,000,000	$	1,000,000		6.25	%		Apr. 2022
Financing provided		1		817,500		811,023		L+1.74	%		June 2035
2017 Single Asset Securitization
Collateral assets(3)		1		682,297		678,770		L+3.60	%		June 2023
Financing provided		1		474,620		474,448		L+1.65	%		June 2033
Total
Collateral assets		27	$	1,682,297	$	1,678,770		6.19	%
Financing provided(4)		2	$	1,292,120	$	1,285,471		L+1.71	%

____________

(1)	As of June 30, 2019, all of our loans financed by securitized debt obligations earned a floating rate of interest. As of December 31, 2018, 98% of our loans financed by securitized debt obligations earned a floating rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.
(2)	Loan term represents weighted-average final maturity, assuming all extension options are exercised by the borrower. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.
(3)	The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.
(4)	During the three and six months ended June 30, 2019, we recorded $12.5 million and $25.0 million, respectively, of interest expense related to our securitized debt obligations. During the three and six months ended June 30, 2018, we recorded $12.0 million and $23.1 million, respectively, of interest expense related to our securitized debt obligations.

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Secured Term Loan, Net (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Line Items]

Schedule of Debt [Table Text Block]

The following tables detail our secured credit facilities ($ in thousands):

	June 30, 2019
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,861,121	$	1,861,121	$	—	$	2,353,629
Wells Fargo		1,742,942		1,251,130		491,812		2,285,101
Citibank		1,006,592		922,804		83,788		1,278,710
Barclays		933,424		902,146		31,278		1,166,780
JP Morgan		959,907		861,744		98,163		1,221,674
Bank of America		768,871		768,871		—		962,378
Morgan Stanley		434,199		378,990		55,209		576,614
Société Générale		321,182		321,182		—		419,034
Goldman Sachs		292,753		247,753		45,000		401,422
MetLife		233,616		233,616		—		296,356
Goldman Sachs - Multi. JV(3)		219,316		219,316		—		293,877
Bank of America - Multi. JV(3)		97,002		97,002		—		123,856
	$	8,870,925	$	8,065,675	$	805,250	$	11,379,431
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

	December 31, 2018
	Credit Facility Borrowings						Collateral
Lender	Potential(1)		Outstanding		Available(1)		Assets(2)
Deutsche Bank	$	1,839,698	$	1,839,698	$	—	$	2,325,047
Wells Fargo		1,908,509		1,822,154		86,355		2,514,513
JP Morgan		1,010,628		1,010,628		—		1,266,259
Barclays		890,620		890,620		—		1,113,275
Citibank		852,470		663,917		188,553		1,076,085
Bank of America		873,446		873,446		—		1,090,117
MetLife		675,329		675,329		—		852,733
Morgan Stanley		341,241		276,721		64,520		457,496
Société Générale		321,182		321,182		—		404,048
Goldman Sachs		230,140		230,140		—		295,368
Goldman Sachs - Multi. JV(3)		170,060		170,060		—		212,983
Bank of America - Multi. JV(3)		97,002		97,002		—		121,636
	$	9,210,325	$	8,870,897	$	339,428	$	11,729,560
____________

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.
(2)	Represents the principal balance of the collateral assets.
(3)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

Secured Debt [Member]

Debt Disclosure [Line Items]

Schedule of Debt [Table Text Block]

In April 2019 we entered into a senior secured term loan facility, or the Secured Term Loan. As of June 30, 2019, the following Secured Term Loan was outstanding ($ in thousands):

Term Loan Issuance	Face Value		Coupon Rate			All-in Cost(1)			Maturity
Term Loan B	$	500,000		L+2.50	%		L+2.80	%	April 23, 2026
____________

(1)   Includes issue discount and transaction expenses that are amortized through interest expense over the life of the Secured Term Loan.

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Convertible Notes, Net (Tables)

6 Months Ended

Jun. 30, 2019

Text Block [Abstract]

Summary of Outstanding Convertible Senior Notes

As of June 30, 2019, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

Convertible Notes Issuance	Face Value		Coupon Rate			All-in Cost(1)			Conversion Rate(2)		Maturity
May 2017	$	402,500		4.38	%		4.85	%		28.0324		May 5, 2022
March 2018	$	220,000		4.75	%		5.33	%		27.6052		March 15, 2023
____________

(1)

Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

(2)

Represents the shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $35.67 and $36.23 per share of class A common stock, respectively, for the May 2017 and March 2018 convertible notes. The cumulative dividend threshold as defined in the respective May 2017 and March 2018 convertible notes supplemental indentures have not been exceeded as of June 30, 2019.

Summary of Details of Net Book Value of Convertible Note

The following table details the net book value of our Convertible Notes on our consolidated balance sheets ($ in thousands):

	June 30, 2019			December 31, 2018
Face value	$	622,500		$	622,500
Unamortized discount		(10,288	)		(11,740	)
Deferred financing costs		(740	)		(849	)
Net book value	$	611,472		$	609,911

Summary of Details about Interest Expense

The following table details our interest expense related to the Convertible Notes ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cash coupon	$	7,015	$	9,274	$	14,030	$	16,056
Discount and issuance cost amortization		788		1,206		1,560		2,395
Total interest expense	$	7,803	$	10,480	$	15,590	$	18,451

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Outstanding Foreign Exchange Derivatives Designated as Net Investment Hedges of Foreign Currency Risk

June 30, 2019				December 31, 2018
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Sell GBP Forward	4	£	360,600	Sell GBP Forward	3	£	192,300
Sell EUR Forward	2	€	339,200	Sell AUD Forward	2	A$	187,600
Sell AUD Forward	4	A$	123,900	Sell EUR Forward	1	€	185,000
Sell CAD Forward	2	C$	39,100	Sell CAD Forward	1	C$	70,600

Summary of Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

June 30, 2019
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike		Index		Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	2	C$	17,273		1.0%		CDOR	1.2
Interest Rate Caps	3	$	66,502		2.4%		USD LIBOR	0.2
Interest Rate Caps	1	C$	21,709		3.0%		CDOR	0.5
December 31, 2018
Interest Rate Derivatives	Number of Instruments	Notional Amount		Strike		Index		Wtd.-Avg. Maturity (Years)
Interest Rate Swaps	3	C$	90,472		1.0%		CDOR	0.5
Interest Rate Caps	9	$	204,248		2.4%		USD LIBOR	0.5
Interest Rate Caps	2	C$	39,998		2.5%		CDOR	0.6

Summary of Effect of Derivative Financial Instruments on Consolidated Statements of Operations

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

	Amount of Gain (Loss) Recognized in OCI on Derivatives						Location of Gain (Loss) Reclassified from Accumulated OCI into Income			Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Derivatives in Hedging Relationships	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019							Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Net Investment Hedges
Foreign exchange contracts(1)	$	10,941		$	9,295			Interest Expense		$	—		$	—
Cash Flow Hedges
Interest rate derivatives		(33	)		(166	)		Interest Expense	(2)		(6	)		163
Total	$	10,908		$	9,129					$	(6	)	$	163
____________

(1)	During the three and six months ended June 30, 2019, we received net cash settlements of $5.0 million and $7.0 million, respectively, on our foreign currency forward contracts. Those amounts are included as a component of accumulated other comprehensive loss on our consolidated balance sheets.
(2)	During the three months ended June 30, 2019, we recorded total interest and related expenses of $116.9 million, which included $6,000 related to our cash flow hedges. During the six months ended June 30, 2019, we recorded total interest and related expenses of $235.6 million, which included a $163,000 expense reduction related to income generated by our cash flow hedges.

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Equity (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Summary of Class A Common Stock Issuances

The following table details our issuance of class A common stock during the six months ended June 30, 2019:

	Class A Common Stock Offerings				2019 Total / Wtd. Avg.
	June 2019		At-the-Market 2019(1)
Shares issued		8,625,000		1,909,628		10,534,628
Gross share issue price(2)	$	36.00	$	34.63	$	35.75
Net share issue price(3)	$	35.62	$	34.28	$	35.38
Net proceeds(4)	$	306,952	$	65,389	$	372,341
____________

(1)	Issuance represents shares issued under our at-the-market program.
(2)	Represents the weighted-average gross price per share paid by underwriters or sales agents, as applicable.
(3)	Represents the weighted-average net proceeds per share after underwriting or sales discounts and commissions.
(4)	Net proceeds represents proceeds received from the underwriters less applicable transaction costs.

Schedule of Movement in Outstanding Shares of Class A Common Stock, Restricted Class A Common Stock and Deferred Stock Units

The following table details the movement in our outstanding shares of class A common stock, including restricted class A common stock and deferred stock units:

	Six Months Ended June 30,
Common Stock Outstanding(1)	2019		2018
Beginning balance		123,664,577		108,081,077
Issuance of class A common stock(2)		10,535,181		3,252,325
Issuance of restricted class A common stock, net		317,339		305,703
Issuance of deferred stock units		15,697		15,919
Ending balance		134,532,794		111,655,024
____________

(1)	Includes deferred stock units held by members of our board of directors of 244,536 and 213,136 as of June 30, 2019 and 2018, respectively.
(2)	Includes 553 and 876 shares issued under our dividend reinvestment program during the six months ended June 30, 2019 and 2018, respectively.

Schedule of Dividend Activity

The following table details our dividend activity ($ in thousands, except per share data):

	Three Months Ended  June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Dividends declared per share of common stock	$	0.62	$	0.62	$	1.24	$	1.24
Total dividends declared	$	83,259	$	69,094	$	161,172	$	136,174

Schedule of Basic and Diluted Earnings Per Share, or EPS, Based on Weighted-Average of Both Restricted and Unrestricted Class A Common Stock Outstanding

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding ($ in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income(1)	$	75,174	$	72,312	$	151,738	$	133,271
Weighted-average shares outstanding, basic and diluted		126,475,244		109,069,078		125,410,064		108,735,193
Per share amount, basic and diluted	$	0.59	$	0.66	$	1.21	$	1.23
__________

(1)   Represents net income attributable to Blackstone Mortgage Trust, Inc.

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Other Expenses (Tables)

6 Months Ended

Jun. 30, 2019

Other Income and Expenses [Abstract]

Schedule of General and Administrative Expenses

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Professional services(1)	$	1,249	$	1,139	$	2,439	$	2,361
Operating and other costs(1)		894		830		1,249		1,339
Subtotal		2,143		1,969		3,688		3,700
Non-cash compensation expenses
Restricted class A common stock earned		7,629		6,653		15,272		13,504
Director stock-based compensation		125		125		250		250
Subtotal		7,754		6,778		15,522		13,754
Total general and administrative expenses	$	9,897	$	8,747	$	19,210	$	17,454
____________

(1) During the three and six months ended June 30, 2019, we recognized an aggregate $164,000 and $333,000, respectively, of expenses related to our Multifamily Joint Venture. During the three and six months ended June 30, 2018, we recognized an aggregate $124,000 and $225,000, respectively, of expenses related to our Multifamily Joint Venture.

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Stock-Based Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Movement in Outstanding Shares of Restricted Class A Common Stock and Weighted-Average Grant Date Fair Value Per Share

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

	Restricted Class A Common Stock			Weighted-Average Grant Date Fair Value Per Share
Balance as of December 31, 2018		1,614,907		$	32.94
Granted		334,904			31.54
Vested		(420,780	)		32.15
Forfeited		(17,565	)		31.55
Balance as of June 30, 2019		1,511,466		$	32.87

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Fair Values (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	June 30, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Derivatives	$	—	$	14,000	$	—	$	14,000	$	—	$	9,916	$	—	$	9,916
Liabilities
Derivatives	$	—	$	4,968	$	—	$	4,968	$	—	$	2,925	$	—	$	2,925

Schedule of Details of Carrying Amount, Face Amount, and Fair Value of Financial Instruments

The following table details the book value, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):

	June 30, 2019						December 31, 2018
	Book Value		Face Amount		Fair Value		Book Value		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	80,584	$	80,584	$	80,584	$	105,662	$	105,662	$	105,662
Loans receivable, net		14,280,919		14,372,950		14,375,273		14,191,200		14,293,970		14,294,836
Debt securities held-to-maturity(1)		94,595		97,174		96,239		96,167		99,000		96,600
Financial liabilities
Secured debt agreements, net		8,257,370		8,283,613		8,283,613		8,974,756		8,996,481		8,996,481
Loan participations sold, net		—		—		—		94,418		94,528		94,528
Securitized debt obligations, net		1,287,364		1,292,120		1,291,784		1,285,471		1,292,120		1,283,086
Secured term loan, net		491,598		500,000		501,095		—		—		—
Convertible notes, net		611,472		622,500		649,275		609,911		622,500		605,348
____________

(1) Included in other assets on our consolidated balance sheets.

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Assets and Liabilities of Consolidated CLO and Single Asset Securitization VIE

	June 30, 2019		December 31, 2018
Assets:
Loans receivable, net	$	1,467,626	$	1,500,000
Other assets		37,043		5,440
Total assets	$	1,504,669	$	1,505,440
Liabilities:
Securitized debt obligations, net	$	1,287,364	$	1,285,471
Other liabilities		1,997		2,155
Total liabilities	$	1,289,361	$	1,287,626

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Principal Contractual Obligations

Our contractual principal debt repayments as of June 30, 2019 were as follows ($ in thousands):

			Payment Timing
	Total		Less Than		1 to 3		3 to 5		More Than
	Obligation		1 Year		Years		Years		5 Years
Principal repayments under secured debt agreements(1)	$	8,283,613	$	109,374	$	3,266,552	$	4,520,799	$	386,888
Principal repayments of secured term loans(2)		500,000		3,750		10,000		10,000		476,250
Principal repayments of convertible notes(3)		622,500		—		402,500		220,000		—
Total(4)	$	9,406,113	$	113,124	$	3,679,052	$	4,750,799	$	863,138

____________

(1)	The allocation of repayments under our secured debt agreements is based on the earlier of (i) the maturity date of each facility, or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.
(2)	The Secured Term Loan is partially amortizing, with an amount equal to 1.0% per annum of the original principal balance due in quarterly installments. Refer to Note 8 for further details on our secured term loan.
(3)	Reflects the outstanding principal balance of Convertible notes, excluding any potential conversion premium. Refer to Note 9 for further details on our Convertible notes.
(4)	Does not include $406.3 million of non-consolidated senior interests and $1.3 billion of securitized debt obligations, as the satisfaction of these liabilities will not require cash outlays from us.

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Apr. 30, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Joint venture capital contribution percentage			85.00%
Income accrual, description	Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in the opinion of our Manager, recovery of income and principal becomes doubtful.
Cash and cash equivalents, description	Cash and cash equivalents represent cash held in banks and liquid investments with original maturities of three months or less.
Expected loss	$ 0
Provision for loan losses	0
Borrower Escrows	360,100,000	$ 320,000,000.0
Restricted cash	$ 0	$ 0
Walker and Dunlop [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Joint venture capital contribution percentage			15.00%

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Loans Receivable, Net - Overall Statistics for Loans Receivable Portfolio (Detail) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	123	125
Net book value	$ 14,280,919	$ 14,191,200
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	123	125
Principal balance	$ 14,372,950	$ 14,293,970
Unfunded loan commitments	$ 3,217,266	$ 3,405,945
Weighted-average maximum maturity (years)	3 months 21 days	3 years 10 months 24 days
Loans Receivable [Member] | LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Weighted-average cash coupon, rate	5.42%	5.67%
Weighted-average all-in yield, rate	5.77%	6.00%
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 14,280,919	$ 14,191,200

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Loans Receivable, Net - Overall Statistics for Loans Receivable Portfolio (Parenthetical) (Detail)	Jun. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans subject to yield maintenance, or other prepayment restrictions	63.00%	75.00%
Percentage of loans open to repayment by borrower without penalty	37.00%	25.00%
USD LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of loans receivable by type	99.00%	98.00%
Percentage of loans, fixed rate	1.00%	2.00%

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Loans Receivable, Net - Activity Relating to Loans Receivable Portfolio (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			$ 14,191,200
Unrealized (loss) gain on foreign currency translation	$ (9,578)	$ (35,088)	(4,164)	$ (24,350)
Amortization of fees and other items			28,511	$ 24,161
Ending Balance	14,280,919		14,280,919
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			14,191,200
Loan fundings			1,922,219
Loan repayments			(1,833,414)
Unrealized (loss) gain on foreign currency translation			(9,621)
Deferred fees and other items			(17,721)
Amortization of fees and other items			28,256
Ending Balance	14,280,919		14,280,919
Deferred Fees/Other Items [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			(102,770)
Unrealized (loss) gain on foreign currency translation			204
Deferred fees and other items			(17,721)
Amortization of fees and other items			28,256
Ending Balance	(92,031)		(92,031)
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			14,293,970
Loan fundings			1,922,219
Loan repayments			(1,833,414)
Unrealized (loss) gain on foreign currency translation			(9,825)
Ending Balance	$ 14,372,950		$ 14,372,950

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Loans Receivable, Net - Property Type and Geographic Distribution of Properties Securing Loans in Portfolio (Detail) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	123	125
Net book value	$ 14,280,919	$ 14,191,200
Total Loan Exposure	$ 14,779,252	$ 14,740,844
Percentage of Portfolio	100.00%	100.00%
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	54	55
Net book value	$ 7,205,141	$ 7,104,842
Total Loan Exposure	$ 7,258,497	$ 7,164,466
Percentage of Portfolio	48.00%	49.00%
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	17	18
Net book value	$ 2,380,920	$ 2,591,565
Total Loan Exposure	$ 2,460,389	$ 2,673,763
Percentage of Portfolio	17.00%	18.00%
Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	38	34
Net book value	$ 2,243,177	$ 2,193,699
Total Loan Exposure	$ 2,272,201	$ 2,206,740
Percentage of Portfolio	15.00%	15.00%
Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	5	5
Net book value	$ 685,128	$ 680,808
Total Loan Exposure	$ 688,981	$ 685,776
Percentage of Portfolio	5.00%	5.00%
Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	3	4
Net book value	$ 381,509	$ 451,099
Total Loan Exposure	$ 386,617	$ 452,900
Percentage of Portfolio	3.00%	3.00%
Condominium [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	4
Net book value	$ 228,817	$ 304,545
Total Loan Exposure	$ 230,258	$ 368,104
Percentage of Portfolio	2.00%	2.00%
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	3	3
Net book value	$ 874,237	$ 586,169
Total Loan Exposure	$ 1,199,331	$ 909,052
Percentage of Portfolio	8.00%	6.00%
Self-Storage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	2	2
Net book value	$ 281,990	$ 278,473
Total Loan Exposure	$ 282,978	$ 280,043
Percentage of Portfolio	2.00%	2.00%
United States Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	27	32
Net book value	$ 3,999,237	$ 4,322,114
Total Loan Exposure	$ 4,025,533	$ 4,359,938
Percentage of Portfolio	28.00%	31.00%
United States West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	26	29
Net book value	$ 2,953,508	$ 3,137,072
Total Loan Exposure	$ 2,995,900	$ 3,222,706
Percentage of Portfolio	20.00%	22.00%
United States Southeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	21	19
Net book value	$ 2,409,038	$ 2,258,033
Total Loan Exposure	$ 2,420,751	$ 2,271,664
Percentage of Portfolio	16.00%	15.00%
United States Midwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	10	9
Net book value	$ 1,109,007	$ 1,161,637
Total Loan Exposure	$ 1,115,860	$ 1,170,619
Percentage of Portfolio	8.00%	8.00%
United States Southwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	14	13
Net book value	$ 546,008	$ 478,665
Total Loan Exposure	$ 548,794	$ 481,745
Percentage of Portfolio	4.00%	3.00%
United States Northwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	4	4
Net book value	$ 175,039	$ 238,844
Total Loan Exposure	$ 175,770	$ 239,872
Percentage of Portfolio	1.00%	2.00%
United States [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	102	106
Net book value	$ 11,191,837	$ 11,596,365
Total Loan Exposure	$ 11,282,608	$ 11,746,544
Percentage of Portfolio	77.00%	81.00%
United Kingdom [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	11	7
Net book value	$ 1,270,547	$ 754,299
Total Loan Exposure	$ 1,616,321	$ 1,094,663
Percentage of Portfolio	11.00%	7.00%
Spain [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	1
Net book value	$ 1,057,616	$ 1,124,174
Total Loan Exposure	$ 1,063,416	$ 1,131,334
Percentage of Portfolio	7.00%	8.00%
Canada [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	4	5
Net book value	$ 150,302	$ 316,268
Total Loan Exposure	$ 149,942	$ 313,229
Percentage of Portfolio	1.00%	2.00%
Australia [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	3	3
Net book value	$ 343,650	$ 310,372
Total Loan Exposure	$ 345,741	$ 312,893
Percentage of Portfolio	2.00%	2.00%
Belgium [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	1
Net book value	$ 69,982	$ 70,621
Total Loan Exposure	$ 70,249	$ 71,007
Germany [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	1	1
Net book value	$ 196,985	$ 11,585
Total Loan Exposure	$ 250,975	$ 63,637
Percentage of Portfolio	2.00%
Netherlands [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan		1
Net book value		$ 7,516
Total Loan Exposure		7,537
International [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	21
Net book value	$ 3,089,082	2,594,835
Total Loan Exposure	$ 3,496,644	$ 2,994,300
Percentage of Portfolio	23.00%	19.00%

XML

Loans Receivable, Net - Property Type and Geographic Distribution of Properties Securing Loans in Portfolio (Parenthetical) (Detail) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loan exposure including senior interests	$ 406.3	$ 446.9
2018 Single Asset Securitization [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Single asset securitization principal amount	$ 1,000.0	$ 1,000.0	$ 1,000.0

XML

Loans Receivable, Net - Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings (Detail) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	123		125
Net book value	$ 14,280,919	$ 14,191,200	$ 14,191,200
Total Loan Exposure	$ 14,779,252	14,740,844	$ 14,740,844
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	123		125
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 14,280,919	14,191,200	$ 14,191,200
Risk Rating 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 275,806	$ 182,740	182,740
Risk Rating 1 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	4	2
Risk Rating 1 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 275,427	$ 181,366	181,366
Risk Rating 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 4,235,448	$ 3,950,025	3,950,025
Risk Rating 2 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	38	38
Risk Rating 2 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 4,208,307	$ 3,860,432	3,860,432
Risk Rating 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 10,100,685	$ 10,608,079	10,608,079
Risk Rating 3 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	78	85
Risk Rating 3 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 9,630,494	$ 10,149,402	$ 10,149,402
Risk Rating 4 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loan Exposure	$ 167,313
Risk Rating 4 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | SecurityLoan	3
Risk Rating 4 [Member] | Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 166,691

XML

Loans Receivable, Net - Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings (Parenthetical) (Detail) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loan exposure including senior interests	$ 406.3	$ 446.9
2018 Single Asset Securitization [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Single asset securitization principal amount	$ 1,000.0	$ 1,000.0	$ 1,000.0

XML

Loans Receivable, Net - Additional Information (Detail)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Weighted-average risk rating on loan exposure	2.7	2.7
Impaired loans	$ 0	$ 0
Loans held	14,779,252,000	14,740,844,000
Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held	2,272,201,000	2,206,740,000
Joint Venture [Member] | Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans held	$ 505,000,000.0	$ 334,600,000

XML

Other Assets and Liabilities - Summary of Components of Other Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Debt securities held-to-maturity	$ 94,595	$ 96,167
Accrued interest receivable	51,065	56,679
Loan portfolio payments held by servicer	43,236	6,133
Derivative assets	14,000	9,916
Prepaid expenses	278	647
Prepaid taxes	3	6
Other	324	965
Total	$ 203,501	$ 170,513

XML

Other Assets and Liabilities - Summary of Components of Other Assets (Parenthetical) (Detail) - USD ($) $ in Billions	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Schedule Of Other Assets [Line Items]
Percentage of yield in subordinate risk retention interest	10.00%
2018 Single Asset Securitization [Member]
Schedule Of Other Assets [Line Items]
Single asset securitization principal amount	$ 1.0	$ 1.0	$ 1.0
Single asset securitization maximum maturity date	Jun. 09, 2025

XML

Other Assets and Liabilities - Summary of Components of Other Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Other Liabilities [Abstract]
Accrued dividends payable	$ 83,259	$ 76,530
Accrued interest payable	25,933	25,588
Accrued management and incentive fees payable	20,984	18,586
Accounts payable and other liabilities	5,631	4,583
Derivative liabilities	4,968	2,925
Total	$ 140,775	$ 128,212

XML

Secured Debt Agreements, Net - Additional Information (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) Facility	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	$ 491,598,000		$ 491,598,000
Interest expense	116,891,000	$ 87,733,000	235,579,000	$ 157,722,000
Covenants, minimum tangible net worth	$ 2,800,000,000		$ 2,800,000,000
Covenants, percentage of tangible assets on cash proceeds from equity issuances			75.00%
Covenants, percentage of recourse indebtedness	5.00%		5.00%
Maximum [Member]
Debt Instrument [Line Items]
Covenants, indebtedness to total assets, in percent	83.33%		83.33%
Minimum [Member]
Debt Instrument [Line Items]
Covenants, EBITDA to fixed charges, in percent			1.40%
Covenants, minimum cash liquidity amount	$ 10,000,000.0		$ 10,000,000.0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Weighted-average outstanding balance			28,800,000		$ 31,700,000
Secured debt agreements borrowings outstanding	0		0		43,800,000
Interest expense			1,600,000		1,700,000
Amortization of deferred fees and expenses			522,000		551,000
Revolving Credit Facility [Member] | Barclays [Member]
Debt Instrument [Line Items]
Maximum Facility Size	250,000,000.0		250,000,000.0
Credit Facilities [Member]
Debt Instrument [Line Items]
Weighted-average outstanding balance			8,800,000,000		7,100,000,000
Aggregate borrowings	8,065,675,000		$ 8,065,675,000		$ 8,870,897,000
Basis spread on debt obligation, in percent			1.71%
Weighted-average advance rate			79.50%		79.50%
Weighted-average initial maturity			3 years 2 months 12 days		3 years 6 months
Credit Facilities [Member] | Joint Venture [Member]
Debt Instrument [Line Items]
Number of new credit facility | Facility			2
Additional credit capacity			$ 310,000,000.0
Credit Facilities [Member] | Barclays [Member]
Debt Instrument [Line Items]
Aggregate borrowings	$ 902,146,000		902,146,000		$ 890,620,000
Asset-Specific Financings [Member]
Debt Instrument [Line Items]
Weighted-average outstanding balance			$ 106,300,000		$ 50,400,000
LIBOR [Member] | Credit Facilities [Member] | Weighted-Average Cash Coupon [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent					1.72%
LIBOR [Member] | Credit Facilities [Member] | Weighted-Average All-in Cost of Credit [Member]
Debt Instrument [Line Items]
Basis spread on debt obligation, in percent			1.89%		1.90%

XML

Secured Debt Agreements, Net - Schedule of Secured Debt Agreements (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	$ 8,283,613	$ 8,996,481
Deferred financing costs	(26,243)	(21,725)
Secured debt agreements borrowings outstanding	8,283,613	8,996,481
Net book value of secured debt	8,257,370	8,974,756
Secured Debt [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	8,065,675	8,870,897
Asset-Specific Financings [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding	$ 217,938	81,739
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Secured debt agreements borrowings outstanding		$ 43,845

XML

Secured Debt Agreements, Net - Credit Facilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	$ 8,870,925	$ 9,210,325
Repurchase Borrowings Outstanding	8,065,675	8,870,897
Available	805,250	339,428
Collateral Assets	11,379,431	11,729,560
Deutsche Bank [Member]
Line of Credit Facility [Line Items]
Repurchase Borrowings Outstanding	850,700
Deutsche Bank [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	1,861,121	1,839,698
Repurchase Borrowings Outstanding	1,861,121	1,839,698
Collateral Assets	2,353,629	2,325,047
Wells Fargo [Member]
Line of Credit Facility [Line Items]
Repurchase Borrowings Outstanding	171,500	314,000
Wells Fargo [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	1,742,942	1,908,509
Repurchase Borrowings Outstanding	1,251,130	1,822,154
Available	491,812	86,355
Collateral Assets	2,285,101	2,514,513
JP Morgan [Member]
Line of Credit Facility [Line Items]
Repurchase Borrowings Outstanding		520,600
JP Morgan [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	959,907	1,010,628
Repurchase Borrowings Outstanding	861,744	1,010,628
Available	98,163
Collateral Assets	1,221,674	1,266,259
Citibank [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	1,006,592	852,470
Repurchase Borrowings Outstanding	922,804	663,917
Available	83,788	188,553
Collateral Assets	1,278,710	1,076,085
Barclays [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	933,424	890,620
Repurchase Borrowings Outstanding	902,146	890,620
Available	31,278
Collateral Assets	1,166,780	1,113,275
Bank of America [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	768,871	873,446
Repurchase Borrowings Outstanding	768,871	873,446
Collateral Assets	962,378	1,090,117
Morgan Stanley [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	434,199	341,241
Repurchase Borrowings Outstanding	378,990	276,721
Available	55,209	64,520
Collateral Assets	576,614	457,496
Societe Generale [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	321,182	321,182
Repurchase Borrowings Outstanding	321,182	321,182
Collateral Assets	419,034	404,048
Goldman Sachs [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	292,753	230,140
Repurchase Borrowings Outstanding	247,753	230,140
Available	45,000
Collateral Assets	401,422	295,368
MetLife [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	233,616	675,329
Repurchase Borrowings Outstanding	233,616	675,329
Collateral Assets	296,356	852,733
Goldman Sachs - Multi. JV [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	219,316	170,060
Repurchase Borrowings Outstanding	219,316	170,060
Collateral Assets	293,877	212,983
Bank of America - Multi. JV [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential	97,002	97,002
Repurchase Borrowings Outstanding	97,002	97,002
Collateral Assets	$ 123,856	$ 121,636

XML

Secured Debt Agreements, Net - Credit Facilities (Parenthetical) (Detail) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Debt Instrument Revolving Repurchase Facilities Guarantee Rate	100.00%
Wells Fargo [Member]
Line of Credit Facility [Line Items]
Long-term Line of Credit	$ 171.5	$ 314.0
Debt Instrument Revolving Repurchase Facilities Guarantee Rate		25.00%
JP Morgan [Member]
Line of Credit Facility [Line Items]
Long-term Line of Credit		$ 520.6
Deutsche Bank [Member]
Line of Credit Facility [Line Items]
Long-term Line of Credit	$ 850.7
Debt Instrument Revolving Repurchase Facilities Guarantee Rate	25.00%

XML

Secured Debt Agreements, Net - Summary of Key Terms of Credit Facilities (Detail) € in Thousands, £ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2019 AUD ($)	Jun. 30, 2019 CAD ($)	Jun. 30, 2019 EUR (€)	Jun. 30, 2019 GBP (£)
Line of Credit Facility [Line Items]
Guarantee	100.00%
JP Morgan [Member]
Line of Credit Facility [Line Items]
Outstanding Borrowings		$ 520,600
Deutsche Bank [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Outstanding Borrowings	$ 850,700
Wells Fargo [Member]
Line of Credit Facility [Line Items]
Guarantee		25.00%
Outstanding Borrowings	171,500	$ 314,000
Credit Facilities [Member]
Line of Credit Facility [Line Items]
Potential Borrowings	8,870,925	9,210,325
Outstanding Borrowings	$ 8,065,675	$ 8,870,897
Spread	1.71%
Advance Rate	79.50%	79.50%
Credit Facilities [Member] | USD LIBOR
Line of Credit Facility [Line Items]
Potential Borrowings	$ 6,948,419
Outstanding Borrowings	$ 6,199,362
Spread	1.69%
Advance Rate	79.60%
Credit Facilities [Member] | EUR LIBOR
Line of Credit Facility [Line Items]
Potential Borrowings | €					€ 797,442
Outstanding Borrowings | €					€ 748,028
Spread	1.50%
Advance Rate	80.00%
Credit Facilities [Member] | GBP LIBOR
Line of Credit Facility [Line Items]
Potential Borrowings | £						£ 564,386
Outstanding Borrowings | £						£ 564,386
Spread	2.05%
Advance Rate	77.90%
Credit Facilities [Member] | BBSY
Line of Credit Facility [Line Items]
Potential Borrowings			$ 255,270
Outstanding Borrowings			$ 255,270
Spread	1.90%
Advance Rate	78.00%
Credit Facilities [Member] | CDOR
Line of Credit Facility [Line Items]
Potential Borrowings				$ 156,919
Outstanding Borrowings				$ 156,925
Spread	1.83%
Advance Rate	80.70%
Credit Facilities [Member] | Bank of America - Multi. JV [Member]
Line of Credit Facility [Line Items]
Guarantee	43.00%
Margin Call	Collateral marks only
Term/Maturity	Jul. 19, 2021
Potential Borrowings	$ 97,002	$ 97,002
Outstanding Borrowings	$ 97,002	97,002
Credit Facilities [Member] | Morgan Stanley [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Mar. 01, 2022
Potential Borrowings	$ 434,199	341,241
Outstanding Borrowings	$ 378,990	276,721
Credit Facilities [Member] | Goldman Sachs - Multi. JV [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Jul. 12, 2020
Potential Borrowings	$ 219,316	170,060
Outstanding Borrowings	$ 219,316	170,060
Credit Facilities [Member] | JP Morgan [Member]
Line of Credit Facility [Line Items]
Guarantee	50.00%
Margin Call	Collateral marks only
Term/Maturity	Jan. 07, 2021
Potential Borrowings	$ 959,907	1,010,628
Outstanding Borrowings	$ 861,744	1,010,628
Credit Facilities [Member] | Deutsche Bank [Member]
Line of Credit Facility [Line Items]
Guarantee	59.00%
Margin Call	Collateral marks only
Term/Maturity	Aug. 09, 2021
Potential Borrowings	$ 1,861,121	1,839,698
Outstanding Borrowings	$ 1,861,121	1,839,698
Credit Facilities [Member] | Barclays [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Jun. 18, 2024
Potential Borrowings	$ 933,424	890,620
Outstanding Borrowings	$ 902,146	890,620
Credit Facilities [Member] | MetLife [Member]
Line of Credit Facility [Line Items]
Guarantee	50.00%
Margin Call	Collateral marks only
Term/Maturity	Apr. 22, 2023
Potential Borrowings	$ 233,616	675,329
Outstanding Borrowings	$ 233,616	675,329
Credit Facilities [Member] | Bank of America [Member]
Line of Credit Facility [Line Items]
Guarantee	50.00%
Margin Call	Collateral marks only
Term/Maturity	May 21, 2023
Potential Borrowings	$ 768,871	873,446
Outstanding Borrowings	$ 768,871	873,446
Credit Facilities [Member] | Citibank [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Potential Borrowings	$ 1,006,592	852,470
Outstanding Borrowings	$ 922,804	663,917
Credit Facilities [Member] | Societe Generale [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Potential Borrowings	$ 321,182	321,182
Outstanding Borrowings	$ 321,182	321,182
Credit Facilities [Member] | Wells Fargo [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Term matched
Potential Borrowings	$ 1,742,942	1,908,509
Outstanding Borrowings	$ 1,251,130	1,822,154
Credit Facilities [Member] | Goldman Sachs [Member]
Line of Credit Facility [Line Items]
Guarantee	25.00%
Margin Call	Collateral marks only
Term/Maturity	Oct. 22, 2023
Potential Borrowings	$ 292,753	230,140
Outstanding Borrowings	$ 247,753	$ 230,140

XML

Secured Debt Agreements, Net - Summary of Key Terms of Credit Facilities (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2019
Barclays [Member] | Credit Facilities [Member]
Line of Credit Facility [Line Items]
Maturity period	Includes four one-year extension options which may be exercised at our sole discretion.

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Secured Debt Agreements, Net - Summary of Asset-Specific Financings (Detail) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($) SecurityLoan	Dec. 31, 2018 USD ($) SecurityLoan
Participating Mortgage Loans [Line Items]
Financing provided	2023-03	2022-08
Financing provided, Principal Balance	$ 8,283,613	$ 8,996,481
Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Count | SecurityLoan	4	1
LIBOR [Member] | Collateral Assets [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	4.94%	6.08%
Asset-Specific Financings [Member]
Participating Mortgage Loans [Line Items]
Financing provided	2023-03	2022-08
Guarantee	$ 84,547
Collateral assets, Book Value	268,864	$ 104,807
Financing provided, Book Value	209,912	80,938
Collateral assets, Principal Balance	281,620	106,739
Financing provided, Principal Balance	$ 217,938	$ 81,739
Count | SecurityLoan	4	1
Asset-Specific Financings [Member] | LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost Rate	3.53%	4.07%

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Loan Participations Sold, Net - Summary of Statistics for Loan Participations Sold (Detail)	12 Months Ended
	Dec. 31, 2018 USD ($) SecurityLoan	Jun. 30, 2019 USD ($)
Participating Mortgage Loans [Line Items]
Count | SecurityLoan	1
Principal Balance	$ 123,745,000
Guarantee	0
Book Value, Total Loan	$ 14,191,200,000	$ 14,280,919,000
Weighted Average Term	2022-02
Book Value	$ 94,418,000
Senior Participation [Member]
Participating Mortgage Loans [Line Items]
Count | SecurityLoan	1
Principal Balance	$ 94,528,000
Guarantee	$ 0
Weighted Average Term	2022-02
Book Value	$ 94,418,000
Loan Participations Sold [Member]
Participating Mortgage Loans [Line Items]
Book Value, Total Loan	$ 122,669,000
LIBOR [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost	5.92%
LIBOR [Member] | Senior Participation [Member]
Participating Mortgage Loans [Line Items]
Weighted Average Yield/Cost	4.07%

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Loan Participations Sold, Net - Summary of Statistics for Loan Participations Sold (Parenthetical) (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Participating Mortgage Loans [Line Items]
Deferred financing costs	$ 26,243	$ 21,725
Loan Participations Sold [Member]
Participating Mortgage Loans [Line Items]
Deferred financing costs		$ 110,000

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Loan Participations Sold, Net - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Participating Mortgages [Member]
Participating Mortgage Loans [Line Items]
Interest expense	$ 1.6	$ 2.0	$ 3.2	$ 3.5

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Securitized Debt Obligations, Net - Schedule of Information on Securitized Debt Obligations (Detail) $ in Thousands		6 Months Ended	12 Months Ended
		Jun. 30, 2019 USD ($) Loans	Dec. 31, 2018 USD ($) Loans
Financing Provided [Member]
Debt Instrument [Line Items]
Count | Loans	[1]	2	2
Principal Balance	[1]	$ 1,292,120	$ 1,292,120
Book Value	[1]	$ 1,287,364	$ 1,285,471
Financing Provided [Member] | Collateralized Loan Obligations [Member]
Debt Instrument [Line Items]
Count | Loans		1	1
Principal Balance		$ 817,500	$ 817,500
Book Value		$ 812,857	$ 811,023
Term	[2]	2035-06	2035-06
Financing Provided [Member] | Single Asset Securitization [Member]
Debt Instrument [Line Items]
Count | Loans		1	1
Principal Balance		$ 474,620	$ 474,620
Book Value		$ 474,507	$ 474,448
Term	[2]	2033-06	2033-06
Collateral Assets [Member]
Debt Instrument [Line Items]
Count | Loans		24	27
Principal Balance		$ 1,695,956	$ 1,682,297
Book Value		$ 1,693,272	$ 1,678,770
Wtd. Avg. Yield/Cost	[3]		6.19%
Collateral Assets [Member] | Collateralized Loan Obligations [Member]
Debt Instrument [Line Items]
Count | Loans		23	26
Principal Balance		$ 1,000,000	$ 1,000,000
Book Value		$ 1,000,000	$ 1,000,000
Wtd. Avg. Yield/Cost	[3]		6.25%
Term	[2]	2022-06	2022-04
Collateral Assets [Member] | Single Asset Securitization [Member]
Debt Instrument [Line Items]
Count | Loans	[4]	1	1
Principal Balance	[4]	$ 695,956	$ 682,297
Book Value	[4]	$ 693,272	$ 678,770
Term	[2],[4]	2023-06	2023-06
LIBOR [Member] | Financing Provided [Member]
Debt Instrument [Line Items]
Wtd. Avg. Yield/Cost	[1],[3]	1.68%	1.71%
LIBOR [Member] | Financing Provided [Member] | Collateralized Loan Obligations [Member]
Debt Instrument [Line Items]
Wtd. Avg. Yield/Cost	[3]	1.70%	1.74%
LIBOR [Member] | Financing Provided [Member] | Single Asset Securitization [Member]
Debt Instrument [Line Items]
Wtd. Avg. Yield/Cost	[3]	1.65%	1.65%
LIBOR [Member] | Collateral Assets [Member]
Debt Instrument [Line Items]
Wtd. Avg. Yield/Cost	[3]	3.64%
LIBOR [Member] | Collateral Assets [Member] | Collateralized Loan Obligations [Member]
Debt Instrument [Line Items]
Wtd. Avg. Yield/Cost	[3]	3.67%
LIBOR [Member] | Collateral Assets [Member] | Single Asset Securitization [Member]
Debt Instrument [Line Items]
Wtd. Avg. Yield/Cost	[3],[4]	3.60%	3.60%

[1] During the three and six months ended June 30, 2019, we recorded $8.4 million and $20.9 million, respectively, of interest expense related to our securitized debt obligations. During the three and six months ended June 30, 2018, we recorded $12.0 million and $23.1 million, respectively, of interest expense related to our securitized debt obligations.

[2] Loan term represents weighted-average final maturity, assuming all extension options are exercised by the borrower. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.

[3] As of June 30, 2019, all of our loans financed by securitized debt obligations earned a floating rate of interest. As of December 31, 2018, 98% of our loans financed by securitized debt obligations earned a floating rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees. All-in yield for the total portfolio assume applicable floating benchmark rates for weighted-average calculation.

[4] The collateral assets for the 2017 Single Asset Securitization include the total loan amount, of which we securitized $500.0 million.

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Securitized Debt Obligations, Net - Schedule of Information on Securitized Debt Obligations (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Instrument [Line Items]
Percentage of loans financed by securitized debt obligations earned floating rate of interest			98.00%
Interest expense on securitized debt obligations	$ 12.5	$ 12.0	$ 25.0	$ 23.1
Collateral Assets [Member] | Single Asset Securitization [Member]
Debt Instrument [Line Items]
Total loan amount, securitized	$ 500.0		$ 500.0

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Secured Term Loan, Net (Detail) - Term Loan B $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Face Value	$ 500,000
Coupon Rate	L+2.50
All-in Cost	L+2.80
Maturity	Apr. 23, 2026

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Secured Term Loan, Net - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Secured term loan percentage of partially amortizing	1.00%
Secured Term Loan [Member]
Secured term loan percentage of partially amortizing	1.00%
Discount upon issuance of Secured term loan	$ 1.3
Secured term loan transaction expenses	$ 7.4
Secured term loan covenant description	The guarantee under our Secured Term Loan contains the financial covenant that our indebtedness shall not exceed 83.33% of our total assets.

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Convertible Notes, Net - Summary of Outstanding Convertible Senior Notes (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
4.38% Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Convertible Note Issuance	2017-05
Face Value	$ 402,500
Coupon Rate	4.38%
All-in Cost	4.85%
Conversion Rate	28.0324
Maturity	May 05, 2022
4.75% Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Convertible Note Issuance	2018-03
Face Value	$ 220,000
Coupon Rate	4.75%
All-in Cost	5.33%
Conversion Rate	27.6052
Maturity	Mar. 15, 2023

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Convertible Notes, Net - Summary of Outstanding Convertible Senior Notes (Parenthetical) (Detail)	6 Months Ended
	Jun. 30, 2019 USD ($) $ / shares
5.25% Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, conversion price	$ 35.58
5.25% Convertible Senior Notes [Member] | Class A Common Stock [Member]
Debt Instrument [Line Items]
Convertible Notes, debt conversion, principal amount | $	$ 1,000
Debt instrument, conversion price	$ 0
4.38% Convertible Senior Notes [Member] | Class A Common Stock [Member]
Debt Instrument [Line Items]
Convertible Notes, debt conversion, principal amount | $	$ 1,000
Debt instrument, conversion price	$ 0
4.75% Convertible Senior Notes Issued In March 2018 [Member] | Class A Common Stock [Member]
Debt Instrument [Line Items]
Debt instrument, conversion price	35.67
Debt instrument, conversion price	0
4.38% Convertible Senior Notes Issued in May 2017 [Member] | Class A Common Stock [Member]
Debt Instrument [Line Items]
Debt instrument, conversion price	36.23
Debt instrument, conversion price	$ 0

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Convertible Notes, Net - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Mar. 31, 2018	May 31, 2017
Debt Instrument [Line Items]
Accrued interest payable	$ 25,933,000	$ 25,588,000
5.25% Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Description of Convertible Notes conversion	The Convertible Notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on January 31, 2022 and December 14, 2022 for the May 2017 and March 2018 convertible notes, respectively, at the applicable conversion rate in effect on the conversion date.
Debt instrument, conversion price	$ 35.58
Discount upon issuance of Convertible Notes			$ 1,500,000
Debt issuance costs			$ 5,200,000
Convertible Notes, assumed effective interest rate			5.25%
Convertible Senior Notes, Interest rate including amortization of discount upon issuance			5.49%
Accrued interest payable	$ 6,000,000.0	$ 6,000,000.0
4.38% Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Discount upon issuance of Convertible Notes				$ 979,000
Debt issuance costs				$ 8,400,000
Convertible Notes, assumed effective interest rate				4.57%
Convertible Senior Notes, Interest rate including amortization of discount upon issuance				4.91%

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Convertible Notes, Net - Summary of Details of Net Book Value of Convertible Note (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Deferred financing costs	$ (26,243)	$ (21,725)
Net book value	611,472	609,911
Convertible Senior Note [Member]
Debt Instrument [Line Items]
Face Value	622,500	622,500
Unamortized discount	(10,288)	(11,740)
Deferred financing costs	(740)	(849)
Net book value	$ 611,472	$ 609,911

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Convertible Notes, Net - Summary of Details about Interest Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Instrument [Line Items]
Discount and issuance cost amortization			$ 15,232	$ 13,631
Convertible Senior Note [Member]
Debt Instrument [Line Items]
Cash coupon	$ 7,015	$ 9,274	14,030	16,056
Discount and issuance cost amortization	788	1,206	1,560	2,395
Total interest expense	$ 7,803	$ 10,480	$ 15,590	$ 18,451

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Derivative Financial Instruments - Summary of Outstanding Foreign Exchange Derivatives Designated as Net Investment Hedges of Foreign Currency Risk (Detail) - Sell [Member] - Designated as Hedging Instrument [Member] - Foreign Exchange Forward [Member] - Net Investment Hedges [Member] € in Thousands, £ in Thousands, $ in Thousands, $ in Thousands	Jun. 30, 2019 AUD ($) DerivativeInstrument	Jun. 30, 2019 CAD ($) DerivativeInstrument	Jun. 30, 2019 EUR (€) DerivativeInstrument	Jun. 30, 2019 GBP (£) DerivativeInstrument	Dec. 31, 2018 AUD ($) DerivativeInstrument	Dec. 31, 2018 CAD ($) DerivativeInstrument	Dec. 31, 2018 EUR (€) DerivativeInstrument	Dec. 31, 2018 GBP (£) DerivativeInstrument
CAD [Member]
Derivative [Line Items]
Number of Instruments	2	2	2	2	1	1	1	1
Notional Amount | $		$ 39,100				$ 70,600
GBP [Member]
Derivative [Line Items]
Number of Instruments	4	4	4	4	3	3	3	3
Notional Amount | £				£ 360,600				£ 192,300
EUR [Member]
Derivative [Line Items]
Number of Instruments	2	2	2	2	1	1	1	1
Notional Amount | €			€ 339,200				€ 185,000
AUD [Member]
Derivative [Line Items]
Number of Instruments	4	4	4	4	2	2	2	2
Notional Amount | $	$ 123,900				$ 187,600

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Derivative Financial Instruments - Summary of Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk (Detail) - Cash Flow Hedges [Member] - Designated as Hedging Instrument [Member] $ in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($) DerivativeInstrument	Dec. 31, 2018 USD ($) DerivativeInstrument	Jun. 30, 2019 CAD ($) DerivativeInstrument	Dec. 31, 2018 CAD ($) DerivativeInstrument
Interest Rate Caps [Member] | USD [Member] | USD LIBOR [Member]
Derivative [Line Items]
Number of Instruments | DerivativeInstrument	3	9	3	9
Notional Amount | $	$ 66,502	$ 204,248
Strike	2.40%	2.40%	2.40%	2.40%
Wtd. Avg. Maturity (Years)	2 months 12 days	6 months
Interest Rate Caps [Member] | CAD [Member] | CDOR [Member]
Derivative [Line Items]
Number of Instruments | DerivativeInstrument	1	2	1	2
Notional Amount | $			$ 21,709	$ 39,998
Strike	3.00%	2.50%	3.00%	2.50%
Wtd. Avg. Maturity (Years)	6 months	7 months 6 days
Interest Rate Swaps [Member] | CAD [Member] | CDOR [Member]
Derivative [Line Items]
Number of Instruments | DerivativeInstrument	2	3	2	3
Notional Amount | $			$ 17,273	$ 90,472
Strike	1.00%	1.00%	1.00%	1.00%
Wtd. Avg. Maturity (Years)	1 year 2 months 12 days	6 months

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Derivative Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019
Not Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivatives recorded gains (losses) during the period	$ 516,000	$ 69,000	$ 144,000	$ 146,000
Interest Rate Swaps/Derivatives [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Reclassification from accumulated other comprehensive income (loss) as increase to interest income					$ 82,000
Reclassification from accumulated other comprehensive income, time period			12 months

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Derivative Financial Instruments - Summary of Non-designated Hedges (Detail) € in Thousands, £ in Thousands, $ in Thousands, $ in Thousands	Jun. 30, 2019 AUD ($) DerivativeInstrument	Jun. 30, 2019 CAD ($) DerivativeInstrument	Jun. 30, 2019 EUR (€) DerivativeInstrument	Dec. 31, 2018 AUD ($) DerivativeInstrument	Dec. 31, 2018 EUR (€) DerivativeInstrument	Dec. 31, 2018 GBP (£) DerivativeInstrument
AUD [Member] | Buy AUD / Sell USD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional Amount | $				$ 55,000
AUD [Member] | Buy USD / Sell AUD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional Amount | $				$ 55,000
EUR [Member] | Buy GBP / Sell EUR Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional Amount | €			€ 12,857
Not Designated as Hedging Instrument [Member] | AUD [Member] | Buy AUD / Sell USD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	1	1	1	1	1	1
Notional Amount | $	$ 99,000
Not Designated as Hedging Instrument [Member] | AUD [Member] | Buy USD / Sell AUD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	1	1	1	1	1	1
Notional Amount | $	$ 99,000
Not Designated as Hedging Instrument [Member] | GBP [Member] | Buy GBP / Sell USD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments				1	1	1
Notional Amount | £						£ 23,200
Not Designated as Hedging Instrument [Member] | GBP [Member] | Buy USD / Sell GBP Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments				1	1	1
Notional Amount | £						£ 23,200
Not Designated as Hedging Instrument [Member] | EUR [Member] | Buy GBP / Sell EUR Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	1	1	1	1	1	1
Notional Amount | €					€ 12,857
Not Designated as Hedging Instrument [Member] | CAD [Member] | Buy USD / Sell CAD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	3	3	3
Notional Amount | $		$ 19,400
Not Designated as Hedging Instrument [Member] | CAD [Member] | Buy CAD / Sell USD Forward [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of Instruments	3	3	3
Notional Amount | $		$ 19,400

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Derivative Financial Instruments - Summary of Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	$ 14,000	$ 9,916
Fair Value of Derivatives in a Liability Position	4,968	2,925
Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	12,147	8,800
Fair Value of Derivatives in a Liability Position	3,945	1,307
Designated as Hedging Instrument [Member] | Foreign Currency Contracts [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	12,002	8,210
Fair Value of Derivatives in a Liability Position	3,945	1,307
Designated as Hedging Instrument [Member] | Interest Rate Swaps/Derivatives [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	145	590
Not Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	1,853	1,116
Fair Value of Derivatives in a Liability Position	1,023	1,618
Not Designated as Hedging Instrument [Member] | Foreign Currency Contracts [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value of Derivatives in an Asset Position	1,853	1,116
Fair Value of Derivatives in a Liability Position	$ 1,023	$ 1,618

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Derivative Financial Instruments - Summary of Effect of Derivative Financial Instruments on Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of (Loss) Gain Recognized in OCI on Derivatives	$ 10,908	$ 9,129
Amount of Gain Reclassified from Accumulated OCI into Income	(6)	163
Net Investment [Member] | Foreign Currency Contracts [Member] | Interest Expense [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of (Loss) Gain Recognized in OCI on Derivatives	10,941	9,295
Cash Flow Hedges [Member] | Interest Rate Swaps/Derivatives [Member] | Interest Expense [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of (Loss) Gain Recognized in OCI on Derivatives	(33)	(166)
Amount of Gain Reclassified from Accumulated OCI into Income	$ (6)	$ 163

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Derivative Financial Instruments - Summary of Effect of Derivative Financial Instruments on Consolidated Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Interest and related expenses	$ 116,891	$ 87,733	$ 235,579	$ 157,722
Amount of Loss Reclassified from Accumulated OCI into Income	(6)		163
Interest Rate Swaps/Derivatives [Member] | Cash Flow Hedges [Member] | Interest Expense [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Amount of Loss Reclassified from Accumulated OCI into Income	(6)		163
Foreign Currency Contracts [Member] | Net Investment Hedges [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net cash settlements on our foreign currency forward contracts	$ 5,000		$ 7,000

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Equity - Additional Information (Detail) - USD ($)				1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 15, 2019	Jun. 14, 2019	Nov. 14, 2018	May 31, 2013	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Mar. 25, 2014
Class of Stock [Line Items]
Total stock, shares authorized					300,000,000		300,000,000
Common stock, shares authorized					200,000,000		200,000,000		200,000,000
Preferred stock, shares authorized					100,000,000		100,000,000
Preferred stock issued					0		0
Preferred stock outstanding					0		0
Plan adoption date							Mar. 25, 2014
Number of shares sold during period				25,875,000			10,535,181	3,252,325
Dividends paid	$ 83,300,000
Dividends paid per common stock		$ 0.62
Date of dividend paid							Jul. 15, 2019
Date of dividend declared							Jun. 14, 2019
Record date of dividend paid							Jun. 28, 2019
Accumulated other comprehensive loss					$ (29,420,000)		$ (29,420,000)		$ (34,222,000)
Net realized and unrealized gains related to changes in fair value of derivative instruments					79,400,000		79,400,000		70,400,000
Cumulative unrealized currency translation adjustment on assets and liabilities denominated in foreign currencies					108,800,000		108,800,000		104,600,000
Net proceeds from issuance of class A common stock							372,329,000	$ 102,496,000
Multifamily [Member] | Joint Venture [Member]
Class of Stock [Line Items]
Total equity					193,700,000		193,700,000		69,900,000
Equity interests owned by Blackstone Mortgage Trust, Inc.					164,600,000		164,600,000		59,400,000
Non-controlling interests					$ 29,100,000		$ 29,100,000		$ 10,500,000
Dividend Reinvestment and Direct Stock Purchase Plan [Member]
Class of Stock [Line Items]
Reserved for issuance of class A common stock					9,994,685		9,994,685			10,000,000
Class A Common Stock [Member]
Class of Stock [Line Items]
Common stock, shares issued under dividend reinvestment program							553	876
Number of shares sold during period							8,625,000
Net proceeds from issuance of class A common stock							$ 306,952
Class A Common Stock [Member] | Dividend Reinvestment and Direct Stock Purchase Plan [Member]
Class of Stock [Line Items]
Common stock, shares issued under dividend reinvestment program					272	421	553	876
Class A Common Stock [Member] | ATM Agreements [Member]
Class of Stock [Line Items]
Aggregate sales price			$ 500,000,000.0
Number of shares sold during period							1,909,628	3,251,449
Aggregate sales price remaining available					$ 363,800,000		$ 363,800,000
Net proceeds from issuance of class A common stock							$ 65,400,000	$ 102,500,000

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Equity - Summary of Class A Common Stock Issuances (Detail) - USD ($)	1 Months Ended	6 Months Ended
	May 31, 2013	Jun. 30, 2019	Jun. 30, 2018
Class of Stock [Line Items]
Shares issued	25,875,000	10,535,181	3,252,325
Net proceeds		$ 372,329,000	$ 102,496,000
Shares issued, Wtd. Avg.		10,534,628
Gross share issue price, Wtd. Avg.		$ 35.75
Net share issue price, Wtd. Avg.		$ 35.38
Net proceeds,Wtd. Avg.		$ 372,341
Class A Common Stock [Member]
Class of Stock [Line Items]
Shares issued		8,625,000
Gross share issue price		$ 36.00
Net share issue price		$ 35.62
Net proceeds		$ 306,952
Class A Common Stock [Member] | At The Market [Member]
Class of Stock [Line Items]
Shares issued		1,909,628
Gross share issue price		$ 34.63
Net share issue price		$ 34.28
Net proceeds		$ 65,389

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Equity - Schedule of Movement in Outstanding Shares of Class A Common Stock, Restricted Class A Common Stock and Deferred Stock Units (Detail) - shares	1 Months Ended	6 Months Ended
	May 31, 2013	Jun. 30, 2019	Jun. 30, 2018
Equity [Abstract]
Beginning balance		123,664,577	108,081,077
Issuance of class A common stock	25,875,000	10,535,181	3,252,325
Issuance of restricted class A common stock, net		317,339	305,703
Issuance of deferred stock units		15,697	15,919
Ending balance		134,532,794	111,655,024

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Equity - Schedule of Movement in Outstanding Shares of Class A Common Stock, Restricted Class A Common Stock and Deferred Stock Units (Parenthetical) (Detail) - Class A Common Stock [Member] - shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Class of Stock [Line Items]
Deferred stock units held by directors	244,536	213,136
Common stock, shares issued under dividend reinvestment program	553	876

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Equity - Schedule of Dividend Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Equity [Abstract]
Dividends declared per share of common stock	$ 0.62	$ 0.62	$ 0.62	$ 0.62	$ 1.24	$ 1.24
Total dividends declared	$ 83,259		$ 69,094		$ 161,172	$ 136,174

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Equity - Schedule of Basic and Diluted Earnings Per Share, or EPS, Based on Weighted-Average of Both Restricted and Unrestricted Class A Common Stock Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Net income	$ 75,174	$ 72,312	$ 151,738	$ 133,271
Weighted-average shares outstanding, basic and diluted	126,475,244	109,069,078	125,410,064	108,735,193
Per share amount, basic and diluted	$ 0.59	$ 0.66	$ 1.21	$ 1.23

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Other Expenses - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Management fee - percent of outstanding equity balance			1.50%
Incentive fee computation-percent of the product per agreement			20.00%
Incentive fee computation-percent of outstanding Equity per annum			7.00%
Management fees description			Manager is entitled to an incentive fee in an amount equal to the product of (i) 20% and (ii) the excess of (a) our Core Earnings (as defined in our Management Agreement) for the previous 12-month period over (b) an amount equal to 7.00% per annum multiplied by our outstanding Equity, provided that our Core Earnings over the prior three-year period is greater than zero. Core Earnings, as defined in our Management Agreement, is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items (ii) the net income (loss) related to our legacy portfolio and (iii) incentive management fees.
Management fees	$ 20,984	$ 22,388	$ 40,774	$ 37,880
Manager [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Management fees	13,300	11,100	26,400	22,200
Total incentive compensation payments	7,700	$ 11,300	14,400	$ 15,700
Accrued management and incentive fees payable	$ 21,000		$ 21,000		$ 18,600

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Other Expenses - Schedule of General and Administrative Expenses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Professional services	$ 1,249	$ 1,139	$ 2,439	$ 2,361
Operating and other costs	894	830	1,249	1,339
Subtotal	2,143	1,969	3,688	3,700
Non-cash compensation expenses
Restricted class A common stock earned	7,629	6,653	15,272	13,504
Director stock-based compensation	125	125	250	250
Subtotal	7,754	6,778	15,522	13,754
Total general and administrative expenses	$ 9,897	$ 8,747	$ 19,210	$ 17,454

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Other Expenses - Schedule of General and Administrative Expenses (Parenthetical) (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Multifamily [Member] | Joint Venture [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Expenses related Multifamily Joint Venture.	$ 164,000	$ 124,000	$ 333,000	$ 225,000

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 31, 2013	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2018
Tax Credit Carryforward [Line Items]
Annual distribution of net taxable income for U.S. federal income tax not to apply to our earnings that we distribute (percent)				90.00%
Net taxable income subject to distribution (percent)				100.00%
Excise tax rate				4.00%
Income tax provision		$ 46	$ 104	$ 147	$ 224
U.S. federal corporate income tax rate				21.00%		35.00%
Common stock, shares issued	25,875,000			10,535,181	3,252,325
Net operating losses carried forward							$ 159,000
NOLs expiration date				Dec. 31, 2029
Open tax year	2015 2017 2018
Internal Revenue Service [Member]
Tax Credit Carryforward [Line Items]
Net operating losses limit per annum		$ 2,000		$ 2,000
Net operating losses limitations				the availability of our NOLs is generally limited to $2.0 million per annum

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Stock-Based Incentive Plans - Additional Information (Detail) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($) Plans shares	Dec. 31, 2018 shares	Jun. 29, 2018 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of benefit plans | Plans	9
Restricted shares, vesting period	3 years
Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares, vesting period	3 years
Number of shares of restricted class A common stock outstanding	1,511,466	1,614,907
Unrecognized compensation cost relating to nonvested share-based compensation | $	$ 44.9
Nonvested share-based compensation, closing price | $ / shares			$ 31.43
Unrecognized compensation cost expected to be recognized over weighted average period	1 year 1 month 6 days
Expired Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available under plan	0
Vest in 2019 [Member] | Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of restricted class A common stock outstanding	527,627
Vest in 2020 [Member] | Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of restricted class A common stock outstanding	649,043
Vest in 2021 [Member] | Restricted Class A Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of restricted class A common stock outstanding	334,796
Class A Common Stock [Member] | Stock Incentive Current Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available under plan	3,973,619
Maximum number of shares available under plan	5,000,000

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Stock-Based Incentive Plans - Movement in Outstanding Shares of Restricted Class A Common Stock and Weighted-Average Grant Date Fair Value Per Share (Detail) - Restricted Class A Common Stock [Member]	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Class A Common Stock, Beginning Balance | shares	1,614,907
Restricted Class A Common Stock, Granted | shares	334,904
Restricted Class A Common Stock, Vested | shares	(420,780)
Restricted Class A Common Stock, Forfeited | shares	(17,565)
Restricted Class A Common Stock, Ending Balance | shares	1,511,466
Weighted-Average Grant Date Fair Value Per Share, Beginning Balance | $ / shares	$ 32.94
Weighted-Average Grant Date Fair Value Per Share, Granted | $ / shares	31.54
Weighted-Average Grant Date Fair Value Per Share, Vested | $ / shares	32.15
Weighted-Average Grant Date Fair Value Per Share, Forfeited | $ / shares	31.55
Weighted-Average Grant Date Fair Value Per Share, Ending Balance | $ / shares	$ 32.87

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Fair Values - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets
Derivatives	$ 14,000	$ 9,916
Liabilities
Derivatives	4,968	2,925
Recurring [Member]
Assets
Derivatives	14,000	9,916
Liabilities
Derivatives	4,968	2,925
Level 2 [Member] | Recurring [Member]
Assets
Derivatives	14,000	9,916
Liabilities
Derivatives	$ 4,968	$ 2,925

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Fair Values - Schedule of Details of Book Value, Face Amount, and Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financial assets
Cash and cash equivalents	$ 80,584	$ 105,662
Loans receivable, net	14,372,950	14,293,970
Debt securities held-to-maturity	97,174	99,000
Financial liabilities
Secured debt agreements, net, face amount	8,283,613	8,996,481
Loan participations sold, net		94,418
Loan participations sold, net, face amount		123,745
Securitized debt obligations, net	1,287,364	1,285,471
Securitized debt obligations, net,face amount	1,292,120	1,292,120
Secured term loan, net	500,000
Book Value [Member]
Financial assets
Cash and cash equivalents	80,584	105,662
Loans receivable, net	14,280,919	14,191,200
Debt securities held-to-maturity	94,595	96,167
Financial liabilities
Secured debt agreements, net	8,257,370	8,974,756
Loan participations sold, net		94,418
Securitized debt obligations, net	1,287,364	1,285,471
Secured term loan, net	491,598
Convertible notes, net	611,472	609,911
Fair Value [Member]
Financial assets
Cash and cash equivalents	80,584	105,662
Loans receivable, net	14,375,273	14,294,836
Debt securities held-to-maturity	96,239	96,600
Financial liabilities
Secured debt agreements, net	8,283,613	8,996,481
Loan participations sold, net		94,528
Securitized debt obligations, net	1,291,784	1,283,086
Secured term loan, net	501,095
Convertible notes, net	649,275	605,348
Convertible Senior Note [Member]
Financial liabilities
Convertible notes, net, face amount	$ 622,500	622,500
Senior Participation [Member]
Financial liabilities
Loan participations sold, net		94,418
Loan participations sold, net, face amount		$ 94,528

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Variable Interest Entities - Summary of Assets and Liabilities of Consolidated CLO and Single Asset Securitization VIE (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Assets:
Assets	$ 1,500,000	$ 1,500,000
VIE [Member]
Assets:
Assets	1,504,669	1,505,440
Liabilities:
Liabilities	1,289,361	1,287,626
VIE [Member] | Loans Receivable [Member]
Assets:
Assets	1,467,626	1,500,000
VIE [Member] | Other Assets [Member]
Assets:
Assets	37,043	5,440
VIE [Member] | Securitized Debt Obligations, Net [Member]
Liabilities:
Liabilities	1,287,364	1,285,471
VIE [Member] | Other Liabilities [Member]
Liabilities:
Liabilities	$ 1,997	$ 2,155

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Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Subordinate risk retention interest notional amount	$ 99.0
Loans Receivable [Member]
Variable Interest Entity [Line Items]
Loan contributed to securitization	517.5
2018 Single Asset Securitization [Member]
Variable Interest Entity [Line Items]
Single asset securitization principal amount	$ 1,000.0	$ 1,000.0	$ 1,000.0
Maximum exposure to loss		$ 94.6

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Transactions with Related Parties - Additional Information (Detail) € in Millions, £ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($) shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 EUR (€) shares	Mar. 31, 2019 GBP (£)	Dec. 31, 2018 USD ($) shares	Mar. 31, 2018 USD ($)	Mar. 31, 2018 EUR (€)
Related Party Transaction [Line Items]
Common stock value	$ 1,343,000		$ 1,343,000				$ 1,234,000
Restricted shares, vesting period			3 years
Non-cash expenses			$ 15,522,000	$ 13,754,000
Secured Term Loan [Member]
Related Party Transaction [Line Items]
Debt Securities	$ 55,000,000.0		$ 55,000,000.0
percentage of total secured term loans	11.00%		11.00%		11.00%
Restricted Class A Common Stock [Member]
Related Party Transaction [Line Items]
Shares held | shares	1,511,466		1,511,466		1,511,466		1,614,907
Restricted shares, vesting period			3 years
Senior Term Facility [Member]
Related Party Transaction [Line Items]
Loan face amount					€ 391.3	£ 490.0			€ 7,300.0
Senior term facility					€ 191.8	£ 240.1			€ 1,000.0
Minority participation in senior term facility	49.00%		49.00%		49.00%	49.00%		14.00%	14.00%
Manager [Member]
Related Party Transaction [Line Items]
Management Agreement expiration date			Dec. 19, 2019
Management Agreement renewal term, description			the current term of which expires on December 19, 2019, and will be automatically renewed for a one-year term upon such date and each anniversary thereafter unless earlier terminated.
Management Agreement renewal term, period			1 year
Accrued management and incentive fees payable	$ 21,000,000.0		$ 21,000,000.0				$ 18,600,000
Management fees paid to Manager	19,800,000	$ 15,500,000	38,400,000	29,800,000
Expenses reimbursed to Manager	242,000	215,000	430,000	405,000
Total incentive compensation payments	$ 7,700,000	11,300,000	$ 14,400,000	15,700,000
Manager [Member] | Senior Loan [Member]
Related Party Transaction [Line Items]
Loan face amount								$ 330,000,000.0
Manager [Member] | Unaffiliated Third Party [Member] | Senior Loan [Member]
Related Party Transaction [Line Items]
Loan face amount		$ 1,000,000,000.0		$ 1,000,000,000.0
Manager [Member] | Unaffiliated Third Party [Member] | Partially Owned Properties [Member] | Senior Loan [Member]
Related Party Transaction [Line Items]
Ownership interest in joint venture		50.00%		50.00%
Manager [Member] | Class A Common Stock [Member] | Restricted Class A Common Stock [Member]
Related Party Transaction [Line Items]
Shares held | shares	723,542		723,542		723,542
Common stock value	$ 22,900,000		$ 22,900,000
Non-cash expenses	3,900,000	$ 3,200,000	7,700,000	$ 6,400,000
Affiliates of Manager [Member] | Third-Party Service Provider [Member]
Related Party Transaction [Line Items]
Administrative services expenses incurred	90,000	$ 153,000	$ 176,000	$ 293,000
BXMT Advisors Limited Liability Company and Affiliates [Member] | Secured Term Loan [Member] | Manager [Member]
Related Party Transaction [Line Items]
Total incentive compensation payments	$ 500,000
Blackstone-Advised Investment Vehicles, or the Funds [Member] | Senior Term Facility [Member]
Related Party Transaction [Line Items]
Ownership interest in joint venture								51.00%	51.00%

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Commitments and Contingencies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2019 USD ($) Loans Directors	Dec. 31, 2018 USD ($)
Commitments And Contingencies [Line Items]
Number of loans receivable | Loans	91
Number of independent directors entitled to annual compensation | Directors	5
Loans Receivable [Member]
Commitments And Contingencies [Line Items]
Unfunded loan commitments	$ 3,217,266,000	$ 3,405,945,000
Five Independent Board of Directors [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	175,000
Annual cash compensation paid in the form of deferred stock units	100,000
Annual cash compensation paid in cash	75,000
Chairperson of Audit Committee [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	20,000
Audit Committee Members [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	10,000
Compensation and Corporate Governance Committees [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	$ 10,000

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Commitments and Contingencies - Schedule of Principal Debt Repayments (Detail) $ in Thousands	Jun. 30, 2019 USD ($)
Debt Instrument [Line Items]
Total Obligation	$ 9,406,113
Less Than 1 Year	113,124
1 to 3 Years	3,679,052
3 to 5 Years	4,750,799
More Than 5 Years	863,138
Secured Debt agreements[Member]
Debt Instrument [Line Items]
Total Obligation	8,283,613
Less Than 1 Year	109,374
1 to 3 Years	3,266,552
3 to 5 Years	4,520,799
More Than 5 Years	386,888
Secured Term Loans [Member]
Debt Instrument [Line Items]
Total Obligation	500,000
Less Than 1 Year	3,750
1 to 3 Years	10,000
3 to 5 Years	10,000
More Than 5 Years	476,250
Convertible Notes [Member]
Debt Instrument [Line Items]
Total Obligation	622,500
1 to 3 Years	402,500
3 to 5 Years	$ 220,000

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Commitments and Contingencies - Schedule of Principal Debt Repayments (Parenthetical) (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Non-consolidated senior interests excluded from contractual obligations	$ 406.3
Securitized debt obligations excluded from contractual obligations	$ 1,300.0
Debt Instrument Amortization Percentage	1.00%