10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

¨ 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 1-14788

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, NY	10154
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 655-0220

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on which registered
Class A common stock, par value $0.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ¨    No  x

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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨ (not required)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the outstanding class A common stock held by non-affiliates of the registrant was approximately $637,303,991 as of June 28, 2013 (the last business day of the registrant’s most recently completed second fiscal quarter) based on the closing sale price on the New York Stock Exchange on that date.

As of February 11, 2014, there were 39,276,651 outstanding shares of class A common stock. The class A common stock is listed on the New York Stock Exchange (trading symbol “BXMT”).

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this annual report on Form 10-K incorporates information by reference from the registrant’s definitive proxy statement with respect to its 2014 annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the registrant’s fiscal year.

Table of Content

		Page
PART I.
ITEM 1.	BUSINESS		1
ITEM 1A.	RISK FACTORS		8
ITEM 1B.	UNRESOLVED STAFF COMMENTS		49
ITEM 2.	PROPERTIES		49
ITEM 3.	LEGAL PROCEEDINGS		49
ITEM 4.	MINE SAFETY DISCLOSURES		49
PART II.
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		50
ITEM 6.	SELECTED FINANCIAL DATA		52
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		54
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		76
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		77
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		77
ITEM 9A.	CONTROLS AND PROCEDURES		77
ITEM 9B.	OTHER INFORMATION		78
PART III.
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		79
ITEM 11.	EXECUTIVE COMPENSATION		79
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		79
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		79
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES		79
PART IV.
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES		80
SIGNATURES			86
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES			F-1

PART I.

ITEM 1. BUSINESS

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

Our Company

Blackstone Mortgage Trust is a real estate finance company that primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. Our business plan is to create the premier global commercial real estate lending platform and to originate, acquire and manage commercial real estate loans and securities and other commercial real estate-related debt instruments. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., 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 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 our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

Our business is organized into two operating segments: the Loan Origination segment and the CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to legacy investments that precede the re-launch of our business in May 2013.

On April 26, 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected on May 6, 2013 concurrently with a one-for-ten reverse stock split of our class A common stock. Except where the context indicates otherwise, all class A common stock numbers herein have been adjusted to give retroactive effect to the reverse stock split.

Our principal executive offices are located at 345 Park Avenue, 42nd Floor, New York, New York 10154, and our telephone number is (212) 655-0220. We were incorporated in Maryland in 1998, when we reorganized from a California common law business trust into a Maryland corporation.

Our Manager

We are externally managed and advised by our Manager, which is responsible for administering our business activities and day-to-day operations and providing us our executive management team, investment team and appropriate support personnel.

Our Manager is a part of Blackstone’s alternative asset management business, which includes the management of real estate funds, private equity funds, hedge fund solutions, credit-oriented funds and closed-end funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Through its different businesses, Blackstone had total assets under management of approximately $265.8 billion as of December 31, 2013.

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In connection with the performance of its duties, our Manager benefits from the resources, relationships and expertise of Blackstone’s global real estate group, which is the largest private equity real estate manager in the world with $79.4 billion of investor capital under management as of December 31, 2013. Blackstone’s real estate group was co-founded in 1991 by John G. Schreiber, who currently serves as a member of our board of directors and is the chairman of our Manager’s investment committee. Jonathan D. Gray, who serves as global head of Blackstone’s real estate group, is a member of the board of directors of Blackstone and is a member of our Manager’s investment committee. In addition to the 193 professionals who are part of the global Blackstone real estate platform as of December 31, 2013, our Manager benefits from Blackstone’s global relationships with property owners, managers, lenders, brokers and advisors and the real-time knowledge derived from its broadly diversified real estate holdings.

Within Blackstone’s real estate group, our Manager forms part of Blackstone Real Estate Debt Strategies, or BREDS, which was launched by Blackstone in 2008 to pursue opportunities relating to debt and preferred equity investments globally, with a focus on the United States and Europe. Michael B. Nash, the chief investment officer and co-founder of BREDS, serves as the executive chairman of our board of directors and is a member of our Manager’s investment committee. As of December 31, 2013, 46 dedicated BREDS professionals managed approximately $9.0 billion of assets (including Blackstone Mortgage Trust and assets previously under Blackstone Mortgage Trust’s management).

Our chief executive officer, chief financial officer, and other executive officers are senior BREDS professionals. None of our Manager, our executive officers, or other personnel supplied to us by our Manager is obligated to dedicate any specific amount of time to our business. Our Manager is subject to the supervision and oversight of our board of directors and has only such functions and authority as our board of directors delegates to it. Pursuant to a management agreement between our Manager and us, or Management Agreement, our Manager is entitled to receive a base management fee, an incentive fee, and expense reimbursements. See Item 13 “Certain Relationships and Related Transactions, and Director Independence” in this Annual Report on Form 10-K for more detail on the terms of the Management Agreement.

Sale of Investment Management Platform

On December 19, 2012, we completed the disposition of our investment management and special servicing business to Blackstone for a purchase price of $21.4 million. The sale included our equity interests in CT Investment Management Co., LLC, or CTIMCO, our related private investment fund co-investments, and 100% of the outstanding class A preferred stock of CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, a subsidiary that held certain legacy assets. We refer to the entire transaction as our Investment Management Business Sale. Pursuant to the terms of the Investment Management Business Sale, we are now managed by our Manager pursuant to terms and conditions of our Management Agreement. In addition, Blackstone received the right to designate two members of our board of directors. On December 19, 2012, we also closed our sale to Blackstone of 500,000 shares of our class A common stock for a purchase price of $10.0 million.

Our Investment Strategy

Our investment strategy is to originate loans and invest in debt and related instruments supported by institutional quality commercial real estate in attractive locations. Through our Manager, we draw on Blackstone’s extensive real estate debt investment platform and its established sourcing, underwriting and structuring capabilities in order to execute our investment strategy. In addition, we benefit from our access to Blackstone’s extensive network and substantial real estate and other investment holdings, which provide our Manager access to market data on a scale not available to many competitors. While the majority of our capital likely will continue to be invested in the United States, we expect to benefit from Blackstone’s global real estate debt platform, which includes a team of nine investment professionals based in London that focuses on commercial real estate debt investment opportunities throughout Europe.

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We benefit from Blackstone’s real estate debt investment expertise in order to directly originate, co-originate and acquire debt instruments in conjunction with acquisitions, refinancings and recapitalizations of commercial real estate around the world. In the case of loans we acquire, we focus on performing loans that are supported by well-capitalized properties and portfolios. We believe that the scale and flexibility of our capital, as well as our Manager’s and its affiliates’ relationships, enables us to target strong sponsors and invest in debt collateralized by large, high-quality assets and portfolios.

As market conditions evolve over time, we expect to adjust our investment strategy to adapt to such changes as appropriate. We believe there are significant opportunities among our target assets that currently present attractive risk-return profiles. However, to capitalize on the investment opportunities that may be present at various other points of an economic cycle, we may expand or change our investment strategy and target assets. We believe that the diversification of the portfolio of assets that we acquire, our ability to aggressively manage our target assets, and the flexibility of our strategy will position us to generate attractive long-term returns for our stockholders in a variety of market conditions.

Our Target Assets

The assets in which we intend to invest will include the following types of commercial real estate loans and other debt-oriented investments, focusing primarily on the office, lodging, retail, industrial, residential and healthcare real estate sectors in the United States and Europe, including, but not limited to:

Senior Mortgage Loans

Our business is focused on originating senior mortgage loans that are backed by commercial real estate assets. These loans are secured by real estate and evidenced by a first priority mortgage. These loans may vary in duration, may bear interest at a fixed or floating rate, may amortize, and typically require a balloon payment of principal at maturity. These investments may encompass a whole loan or may also include pari passu participations within such a mortgage loan.

Subordinate Loans

Although originating senior mortgage loans is our primary area of focus, we also originate subordinate loans, including subordinate mortgage interests and mezzanine loans.

Subordinate Mortgage Interests

These are interests, often referred to as “B Notes,” in a junior portion of the mortgage loan. Subordinate mortgage interests have the same borrower and benefit from the same underlying secured obligation and collateral as the holder of a mortgage loan. These subordinate interests may include pari passu participations within such interest and may also be evidenced by their own promissory notes or may be evidenced by a junior participation in a mortgage loan. In either case, the interests are subordinated to the “A Note” or senior participation interest by virtue of a contractual arrangement, which typically governs payment priority and each party’s rights and remedies with respect to the mortgage loan. As a general matter, following a default under the mortgage loan, all amounts are paid sequentially first to the A Note or senior participation interest and then to the B Note or subordinate participation interest. The holder of the senior participation interest typically has the exclusive authority to administer the loan, granting the holder of the subordinate mortgage interest discretion over specified major decisions; however, in the event that the loan becomes non-performing, the holder of the subordinate mortgage interest typically has effective control over the remedies relating to the enforcement of the mortgage loan, including ultimate control of the foreclosure process. In some cases, there may be multiple senior and/or junior interests in a single mortgage loan.

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Mezzanine Loans

These are loans (including pari passu participations in such loans) made to the owners of a mortgage borrower and secured by a pledge of equity interests in the mortgage borrower. These loans are subordinate to a first mortgage loan but senior to the owners’ equity. These loans may be tranched into senior and junior mezzanine loans, with the junior mezzanine lenders secured by a pledge of the equity interests in the more senior mezzanine borrower. Following a default on a mezzanine loan, and subject to negotiated terms with the mortgage lender or other mezzanine lenders, the mezzanine lender generally has the right to foreclose on its equity interest and become the owner of the property, directly or indirectly, subject to the lien of the first mortgage and any debt senior to it including any outstanding senior mezzanine debt. In addition, the mezzanine lender typically has additional rights vis-à-vis the more senior lenders, including the right to cure defaults under the mortgage loan and any senior mezzanine loan and purchase the mortgage loan and any senior mezzanine loan, in each case under certain circumstances following a default on the mortgage loan.

Other Loans and Investments

In addition to originating or purchasing senior mortgage loans and subordinate loans, we may invest in other commercial real estate loans, preferred equity, and other debt-oriented investments such as real estate securities or note financings.

Preferred Equity

These are investments subordinate to any junior mezzanine loan, but senior to the owners’ common equity. Preferred equity investments pay a dividend, rather than interest payments and often have the right for such dividends to accumulate if there is insufficient cash flow to pay the dividend currently. These interests are not secured by the underlying real estate, but upon the occurrence of a default, the preferred equity provider typically has the right to effectuate a change of control with respect to the ownership of the property.

Real Estate Securities

These are interests in real estate which may take the form of commercial mortgage-backed securities, or CMBS, or collateralized loan obligations, or CLOs. In each case, these interests are collateralized by pools of real estate debt instruments, often first mortgage loans. The underlying loans are aggregated into a pool and sold as securities to different investors. Under the pooling and servicing agreements that govern these pools, the loans are administered by a trustee and servicers, which act on behalf of all investors and distribute the underlying cash flows to the different classes of securities in accordance with their seniority and terms.

Note Financing

These are loans secured by other mortgage loans, subordinate mortgage interests, and mezzanine loans. Following a default under a note financing, the lender providing the note financing would succeed to the rights of lender on the underlying loan interests.

The allocation of our capital among our target assets will depend on prevailing market conditions at the time we invest and may change over time in response to different prevailing market conditions, including with respect to interest rates and general economic and credit market conditions. In addition, in the future we may invest in assets other than our target assets, in each case, subject to maintaining our qualification as a REIT for U.S. federal income tax purposes and our exclusion from regulation under the Investment Company Act. Such other assets may include, among other things, other commercial real estate-related debt investments, such as loans to REITs and real estate operating companies, or REOCs, and corporate bonds of REITs and REOCs; construction/rehabilitation loans; loans to providers of real estate net lease financing; other real estate-related financial assets and investments, including preferred stock and convertible debt securities of REITs and REOCs; credit default swaps and other derivative securities; CDOs; and non-real estate-related debt investments.

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Our Portfolio

For information regarding our Loan Origination segment’s portfolio as of December 31, 2013, see Item 7 –“Management’s Discussion and Analysis of Financial Condition and Results of Operations – II. Loan Origination Portfolio” and – “V. Loan Portfolio Details” in this Annual Report on Form 10-K.

Investment Guidelines

Our board of directors has approved the following investment guidelines:

• no investment shall be made that would cause us to fail to qualify as a REIT under the Internal Revenue Code;

• no investment shall be made that would cause us or any of our subsidiaries to be regulated as an investment company under the Investment Company Act;

• our Manager shall seek to invest our capital in a broad range of investments in or relating to public and/or private debt, non-controlling equity, loans and/or other interests relating to real estate assets (including pools thereof), real estate companies, and/or real estate-related holdings;

• prior to the deployment of capital into investments, our Manager may cause our capital to be invested in any short-term investments in money market funds, bank accounts, overnight repurchase agreements with primary federal reserve bank dealers collateralized by direct U.S. government obligations and other instruments or investments reasonable determined by our Manager to be of high quality;

• not more than 25% of our Equity, as defined in the Management Agreement with our Manager, will be invested in any individual investment without the approval of a majority of the investment risk management committee of our board of directors; and

• any investment in excess of $150.0 million requires the approval of a majority of the investment risk management committee of our board of directors.

These investment guidelines may be amended, restated, modified, supplemented or waived pursuant to the approval of a majority of our board of directors, which must include a majority of the independent directors, without the approval of our stockholders.

Financing Strategy and Financial Risk Management

In addition to raising capital through public offerings of our equity securities, our financing strategy includes secured and unsecured repurchase and other credit facilities, securitizations, resecuritizations, and public and private, secured and unsecured debt issuances by us or our subsidiaries. In addition to our current repurchase facilities, asset-specific financings, and convertible notes, we may access additional repurchase facilities, asset-specific financings, debt issuances or more traditional borrowings such as credit facilities.

The amount of leverage we may employ for particular assets will depend upon our Manager’s assessment of the credit, liquidity, price volatility and other risks of those assets and the financing counterparties, and availability of particular types of financing at the then-current time and the financial covenants governing our then outstanding indebtedness. Our decision to use leverage to finance our assets will be at the discretion of our Manager and will not be subject to the approval of our stockholders. We currently expect that our leverage will not exceed, on a debt to equity basis, a ratio of 4-to-1. We will endeavor to match the terms and indices of our assets and liabilities, including in certain instances through the use of derivatives. We will also seek to minimize the risks associated with recourse borrowing.

Subject to maintaining our qualification as a REIT, we may, from time to time, engage in hedging transactions that seek to mitigate the effects of fluctuations in interest rates or currencies and their effects on our cash flows. These hedging transactions could take a variety of forms, including interest rate or currency swaps or cap agreements, options, futures contracts, forward rate or currency agreements or similar financial instruments.

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Competition

We are engaged in a competitive business. In our lending and investment activities, we compete for opportunities with a variety of institutional lenders and investors, including other REITs, specialty finance companies, public and private funds (including other funds managed by Blackstone and its affiliates), commercial and investment banks, commercial finance and insurance companies and other financial institutions. Several other REITs have raised, or are expected to raise, significant amounts of capital, and may have investment objectives that overlap with ours, which may create additional competition for lending and investment opportunities. Some competitors may have a lower cost of funds and access to funding sources that are not available to us, such as the U.S. Government. Many of our competitors are not subject to the operating constraints associated with REIT rule compliance or maintenance of an exclusion from regulation under the Investment Company Act. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of loans and investments and offer more attractive pricing or other terms than us. Furthermore, competition for originations of and investments in our target assets may lead to decreasing yields, which may further limit our ability to generate desired returns.

In the face of this competition, we have access to our Manager’s and Blackstone’s professionals and their industry expertise, which we believe provide us with a competitive advantage and help us assess risks and determine appropriate pricing for certain potential investments. We believe these relationships will enable us to compete more effectively for attractive investment opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. For additional information concerning these competitive risks, see Item 1A – “Risk Factors – Risks Related to Our Lending and Investment Activities – We operate in a competitive market for lending and investment opportunities which has recently intensified, and competition may limit our ability to originate or acquire desirable loans and investments in our target assets and could also affect the yields of these assets and have a material adverse effect on our business, financial condition, and results of operation.”

Employees

We do not have any employees. We are externally managed by our Manager pursuant to the Management Agreement between our Manager and us. Our executive officers serve as officers of our Manager, and are employed by an affiliate of our Manager.

Government Regulation

Our operations in the United States are subject, in certain instances, to supervision and regulation by state and federal governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (i) regulate credit granting activities; (ii) establish maximum interest rates, finance charges and other charges; (iii) require disclosures to customers; (iv) govern secured transactions; and (v) set collection, foreclosure, repossession and claims-handling procedures and other trade practices. We are also required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans. We intend to conduct our business so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act. Furthermore, our international activities are also subject to local regulations.

In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In the wake of the recent global financial crisis, legislators in the United States and in other countries have said that greater regulation of financial services firms is needed, particularly in areas such as risk management, leverage and disclosure. While we expect that new regulations in these areas will be adopted in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition or results of operations or prospects.

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Taxation of the Company

We made an election to be taxed as a REIT, effective January 1, 2003, under the Internal Revenue Code of 1986, as amended, or 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 excise taxes and state and local taxes on our income and assets. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and will not be able to qualify as a REIT for the subsequent four full taxable years.

Furthermore, we have formed several taxable REIT subsidiaries, or TRS. Any TRS we own will pay federal, state and local income tax on its net taxable income. See Item 1A – “Risk Factors – Risks Related to our REIT Status and Certain Other Tax Items” for additional tax status information.

Website Access to Reports

We maintain a website at www.bxmt.com. We are providing the address to our website solely for the information of investors. The information on our website is not a part of, nor is it incorporated by reference into this report. Through our website, we make available, free of charge, our annual proxy statement, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish them to, the SEC. The SEC maintains a website that contains these reports at www.sec.gov.

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ITEM 1A. RISK FACTORS

FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act, which involve certain known and unknown risks and uncertainties. Forward-looking statements predict or describe our future operations, business plans, business and investment strategies and portfolio management and the performance of our investments. These forward-looking statements are generally identified by their use of such terms and phrases as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “seeks,” “anticipates,” “should,” “could,” “may,” “designed to,” “foreseeable future,” “believe,” and “scheduled” and similar expressions. Our actual results or outcomes may differ materially from those anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We assume no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Our actual results may differ significantly from any results expressed or implied by these forward-looking statements. Some, but not all, of the factors that might cause such a difference include, but are not limited to:

• the general political, economic and competitive conditions in the United States and foreign jurisdictions where we invest;

• the level and volatility of prevailing interest rates and credit spreads;

• adverse changes in the real estate and real estate capital markets;

• difficulty in obtaining financing or raising capital;

• the deterioration of performance and thereby credit quality of property securing our investments, borrowers and, in general, the risks associated with the ownership and operation of real estate that may cause cash flow deterioration to us and potentially principal losses on our investments;

• a compression of the yield on our investments and the cost of our liabilities, as well as the level of leverage available to us;

• adverse developments in the availability of desirable loan and investment opportunities whether they are due to competition, regulation or otherwise;

• events, contemplated or otherwise, such as acts of God including hurricanes, earthquakes, and other natural disasters, acts of war and/or terrorism and others that may cause unanticipated and uninsured performance declines and/or losses to us or the owners and operators of the real estate securing our investments;

• the cost of operating our business, including, but not limited to, the cost of operating a real estate investment platform and the cost of operating as a publicly traded company;

• authoritative generally accepted accounting principles, or GAAP, or policy changes from such standard-setting bodies as the Financial Accounting Standards Board, or FASB, the Securities and Exchange Commission, or SEC, the Internal Revenue Service, or IRS, the New York Stock Exchange, or NYSE, and other authorities that we are subject to, as well as their counterparts in any foreign jurisdictions where we might do business; and

• other factors, including those items discussed in risk factors set forth below.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you not to place undue reliance on these forward-looking statements. All written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by these cautionary statements. Moreover, unless we

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are required by law to update these statements, we will not necessarily update or revise any forward-looking statements included or incorporated by reference in this Annual Report after the date hereof, either to conform them to actual results or to changes in our expectations.

Risks Related to Our Lending and Investment Activities

Our loans and investments expose us to risks associated with debt-oriented real estate investments generally.

We seek to invest primarily in debt in or relating to real estate-related businesses, assets or interests. Any deterioration of real estate fundamentals generally, and in the United States and Europe in particular, could negatively impact our performance by making it more difficult for entities in which we have an investment, or “borrower entities,” to satisfy their debt payment obligations, increasing the default risk applicable to borrower entities, and/or making it relatively more difficult for us to generate attractive risk-adjusted returns. Changes in general economic conditions will affect the creditworthiness of borrower entities and may include economic and/or market fluctuations, changes in environmental, zoning and other laws, casualty or condemnation losses, regulatory limitations on rents, decreases in property values, changes in the appeal of properties to tenants, changes in supply and demand, fluctuations in real estate fundamentals (including average occupancy and room rates for hotel properties), energy supply shortages, various uninsured or uninsurable risks, natural disasters, changes in government regulations (such as rent control), changes in real property tax rates and operating expenses, changes in interest rates, changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable, increased mortgage defaults, increases in borrowing rates, negative developments in the economy that depress travel activity, demand and/or real estate values generally and other factors that are beyond our control. The value of securities of companies that service the real estate business sector may also be affected by such risks.

We cannot predict the degree to which economic conditions generally, and the conditions for real estate debt investing in particular, will improve or decline. Declines in the performance of the U.S. and global economies or in the real estate debt markets could have a material adverse effect on our business, financial condition and results from operations. In addition, while improved real estate fundamentals have resulted in increased investment opportunities for us, market conditions relating to real estate debt investments have evolved since the global financial crisis, which has resulted in a modification to certain loan structures and/or market terms. Any such changes in loan structures and/or market terms may make it relatively more difficult for us to monitor and evaluate our loans and investments.

Commercial real estate-related investments that are secured, directly or indirectly, by real property are subject to delinquency, foreclosure and loss, which could result in losses to us.

Commercial real estate debt instruments (e.g., mortgages, mezzanine loans and preferred equity) that are secured by commercial property are subject to risks of delinquency and foreclosure and risks of loss that are greater than similar risks associated with loans made on the security of single-family residential property. The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of the property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired. Net operating income of an income-producing property can be affected by, among other things:

• tenant mix and tenant bankruptcies;

• success of tenant businesses;

• property management decisions, including with respect to capital improvements, particularly in older building structures;

• property location and condition;

• competition from other properties offering the same or similar services;

• changes in laws that increase operating expenses or limit rents that may be charged;

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• any need to address environmental contamination at the property;

• changes in national, regional or local economic conditions and/or specific industry segments;

• declines in regional or local real estate values;

• declines in regional or local rental or occupancy rates;

• changes in interest rates and in the state of the debt and equity capital markets, including diminished availability or lack of debt financing for commercial real estate;

• changes in real estate tax rates and other operating expenses;

• changes in governmental rules, regulations and fiscal policies, including environmental legislation;

• acts of God, terrorism, social unrest and civil disturbances, which may decrease the availability of or increase the cost of insurance or result in uninsured losses; and

• adverse changes in zoning laws.

In addition, we are exposed to the risk of judicial proceedings with our borrowers and entities we invest in, including bankruptcy or other litigation, as a strategy to avoid foreclosure or enforcement of other rights by us as a lender or investor. In the event that any of the properties or entities underlying or collateralizing our loans or investments experiences any of the foregoing events or occurrences, the value of, and return on, such investments, and could adversely affect our results of operations and financial condition.

Interest rate fluctuations could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments.

Our primary interest rate exposures relate to the yield on our loans and other investments and the financing cost of our debt, as well as our interest rate swaps that we may utilize for hedging purposes. Changes in interest rates may affect our net income from loans and other investments, which is the difference between the interest and related income we earn on our interest-earning investments and the interest and related expense we incur in financing these investments. Interest rate fluctuations resulting in our interest and related expense exceeding interest and related income would result in operating losses for us. Changes in the level of interest rates also may affect our ability to make loans or investments, the value of our loans and investments and our ability to realize gains from the disposition of assets. Increases in interest rates may also negatively affect demand for loans and could result in higher borrower default rates.

Our operating results depend, in part, on differences between the income earned on our investments, net of credit losses, and our financing costs. The yields we earn on our assets and our borrowing costs tend to move in the same direction in response to changes in interest rates. However, one can rise or fall faster than the other, causing our net interest margin to expand or contract. Although we seek to match the terms of our liabilities to the expected lives of loans that we acquire or originate, circumstances may arise in which our liabilities are shorter in duration than our assets, resulting in their adjusting faster in response to changes in interest rates. For any period during which our investments are not match-funded, the income earned on such investments may respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may immediately and significantly decrease our results of operations and cash flows and the market value of our investments. In addition, unless we enter into hedging or similar transactions with respect to the portion of our assets that we fund using our balance sheet, returns we achieve on such assets will generally increase as interest rates for those assets rise and decrease as interest rates for those assets decline.

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Prepayment rates may adversely affect the yield on our loans and other investments and the value of our portfolio of assets.

In periods of declining interest rates, prepayment rates on loans generally increase. If general interest rates decline at the same time, the proceeds of such prepayments received during such periods are likely to be reinvested by us in assets yielding less than the yields on the assets that were prepaid. In addition, the value of our assets may be affected by prepayment rates on loans. If we originate or acquire mortgage-related securities or a pool of mortgage securities, we anticipate that the underlying mortgages will prepay at a projected rate generating an expected yield. If we purchase assets at a premium to par value, when borrowers prepay their loans faster than expected, the corresponding prepayments on the mortgage-related securities may reduce the expected yield on such securities because we will have to amortize the related premium on an accelerated basis. Conversely, if we purchase assets at a discount to par value, when borrowers prepay their loans slower than expected, the decrease in corresponding prepayments on the mortgage-related securities may reduce the expected yield on such securities because we will not be able to accrete the related discount as quickly as originally anticipated. In addition, as a result of the risk of prepayment, the market value of the prepaid assets may benefit less than other fixed income securities from declining interest rates.

Prepayment rates on loans may be affected by a number of factors including, but not limited to, the then-current level of interest rates, the availability of mortgage credit, the relative economic vitality of the area in which the related properties are located, the servicing of the loans, possible changes in tax laws, other opportunities for investment, and other economic, social, geographic, demographic and legal factors and other factors beyond our control. Consequently, such prepayment rates cannot be predicted with certainty and no strategy can completely insulate us from prepayment or other such risks.

The lack of liquidity in certain of our target assets may adversely affect our business.

The illiquidity of certain of our target assets may make it difficult for us to sell such investments if the need or desire arises. Certain target assets such as mortgages, B Notes, mezzanine and other loans (including participations) and preferred equity, in particular, are relatively illiquid investments due to their short life, their potential unsuitability for securitization and the greater difficulty of recovery in the event of a borrower’s default. In addition, certain of our investments may become less liquid after our investment as a result of periods of delinquencies or defaults or turbulent market conditions, which may make it more difficult for us to dispose of such assets at advantageous times or in a timely manner. Moreover, many of the loans and securities we invest in will not be registered under the relevant securities laws, resulting in prohibitions against their transfer, sale, pledge or their disposition except in transactions that are exempt from registration requirements or are otherwise in accordance with such laws. As a result, we expect many of our investments will be illiquid, and if we are required to liquidate all or a portion of our portfolio quickly, for example as a result of margin calls, we may realize significantly less than the value at which we have previously recorded our investments. Further, we may face other restrictions on our ability to liquidate an investment to the extent that we or our Manager (and/or its affiliates) has or could be attributed as having material, non-public information regarding such business entity. As a result, our ability to vary our portfolio in response to changes in economic and other conditions may be relatively limited, which could adversely affect our results of operations and financial condition.

Any distressed loans or investments we make, or loans and investments that later become distressed, may subject us to losses and other risks relating to bankruptcy proceedings.

While our loans and investments focus primarily on “performing” real estate related interests, our loans and investments may also include making distressed investments from time to time (e.g., investments in defaulted, out-of-favor or distressed bank loans and debt securities) or may involve investments that become “non-performing” following our acquisition thereof. Certain of our investments may include properties that typically are highly leveraged, with significant burdens on cash flow and, therefore, involve a high degree of financial risk. During an economic downturn or recession, loans or securities of financially or operationally troubled borrowers

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or issuers are more likely to go into default than loans or securities of other borrowers or issuers. Loans or securities of financially or operationally troubled issuers are less liquid and more volatile than loans or securities of borrowers or issuers not experiencing such difficulties. The market prices of such securities are subject to erratic and abrupt market movements and the spread between bid and asked prices may be greater than normally expected. Investment in the loans or securities of financially or operationally troubled borrowers or issuers involves a high degree of credit and market risk.

In certain limited cases (e.g., in connection with a workout, restructuring and/or foreclosing proceedings involving one or more of our investments), the success of our investment strategy with respect thereto will depend, in part, on our ability to effectuate loan modifications and/or restructure and improve the operations of our borrower entities. The activity of identifying and implementing successful restructuring programs and operating improvements entails a high degree of uncertainty. There can be no assurance that we will be able to identify and implement successful restructuring programs and improvements with respect to any distressed loans or investments we may have from time to time.

These financial difficulties may never be overcome and may cause borrower entities to become subject to bankruptcy or other similar administrative proceedings. There is a possibility that we may incur substantial or total losses on our investments and in certain circumstances, become subject to certain additional potential liabilities that may exceed the value of our original investment therein. For example, under certain circumstances, a lender that has inappropriately exercised control over the management and policies of a debtor may have its claims subordinated or disallowed or may be found liable for damages suffered by parties as a result of such actions. In any reorganization or liquidation proceeding relating to our investments, we may lose our entire investment, may be required to accept cash or securities with a value less than our original investment and/or may be required to accept different terms, including payment over an extended period of time. In addition, under certain circumstances, payments to us may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance, preferential payment, or similar transaction under applicable bankruptcy and insolvency laws. Furthermore, bankruptcy laws and similar laws applicable to administrative proceedings may delay our ability to realize on collateral for loan positions held by us, may adversely affect the economic terms and priority of such loans through doctrines such as equitable subordination or may result in a restructuring of the debt through principles such as the “cramdown” provisions of the bankruptcy laws.

We may not have control over certain of our loans and investments.

Our ability to manage our portfolio of loans and investments may be limited by the form in which they are made. In certain situations, we may:

• acquire investments subject to rights of senior classes and servicers under intercreditor or servicing agreements;

• acquire only a minority and/or a non-controlling participation in an underlying investment;

• co-invest with others through partnerships, joint ventures or other entities, thereby acquiring non-controlling interests; or

• rely on independent third party management or servicing with respect to the management of an asset.

Therefore, we may not be able to exercise control over all aspects of our loans or investments. Such financial assets may involve risks not present in investments where senior creditors, junior creditors, servicers or third parties controlling investors are not involved. Our rights to control the process following a borrower default may be subject to the rights of senior or junior creditors or servicers whose interests may not be aligned with ours. A partner or co-venturer may have financial difficulties resulting in a negative impact on such asset, may have economic or business interests or goals that are inconsistent with ours, or may be in a position to take action contrary to our investment objectives. In addition, we may, in certain circumstances, be liable for the actions of our partners or co-venturers.

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B Notes, mezzanine loans and other investments that are subordinated or otherwise junior in an issuer’s capital structure and that involve privately negotiated structures will expose us to greater risk of loss.

We may from time to time originate or acquire B Notes, mezzanine loans and other investments that are subordinated or otherwise junior in an issuer’s capital structure (such as preferred equity) and that involve privately negotiated structures. To the extent we invest in subordinated debt or mezzanine tranches of an entity’s capital structure, such investments and our remedies with respect thereto, including the ability to foreclose on any collateral securing such investments, will be subject to the rights of holders of more senior tranches in the issuer’s capital structure and, to the extent applicable, contractual intercreditor and/or participation agreement provisions. Significant losses related to such loans or investments could adversely affect our results of operations and financial condition.

As the terms of such loans and investments are subject to contractual relationships among lenders, co-lending agents and others, they can vary significantly in their structural characteristics and other risks. For example, the rights of holders of B Notes to control the process following a borrower default may vary from transaction to transaction. Further, B Notes typically are secured by a single property and accordingly reflect the risks associated with significant concentration.

Like B Notes, mezzanine loans are by their nature structurally subordinated to more senior property-level financings. If a borrower defaults on our mezzanine loan or on debt senior to our loan, or if the borrower is in bankruptcy, our mezzanine loan will be satisfied only after the property-level debt and other senior debt is paid in full. As a result, a partial loss in the value of the underlying collateral can result in a total loss of the value of the mezzanine loan. In addition, even if we are able to foreclose on the underlying collateral following a default on a mezzanine loan, we would be substituted for the defaulting borrower and, to the extent income generated on the underlying property is insufficient to meet outstanding debt obligations on the property, may need to commit substantial additional capital and/or deliver a replacement guarantee by a credit worthy entity, which could include us, to stabilize the property and prevent additional defaults to lenders with existing liens on the property.

Loans on properties in transition will involve a greater risk of loss than conventional mortgage loans.

We may invest in transitional loans to borrowers who are typically seeking short-term capital to be used in an acquisition or rehabilitation of a property. The typical borrower under a transitional loan has usually identified an undervalued asset that has been under-managed and/or is located in a recovering market. If the market in which the asset is located fails to improve according to the borrower’s projections, or if the borrower fails to improve the quality of the asset’s management and/or the value of the asset, the borrower may not receive a sufficient return on the asset to satisfy the transitional loan, and we bear the risk that we may not recover some or all of our investment.

In addition, borrowers usually use the proceeds of a conventional mortgage to repay a transitional loan. Transitional loans therefore are subject to risks of a borrower’s inability to obtain permanent financing to repay the transitional loan. In the event of any default under transitional loans that may be held by us, we bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount and unpaid interest of the transitional loan. To the extent we suffer such losses with respect to these transitional loans, it could adversely affect our results of operations and financial condition.

Risks of cost overruns and noncompletion of renovations of properties in transition may result in significant losses.

The renovation, refurbishment or expansion of a property by a borrower involves risks of cost overruns and noncompletion. Estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property may prove inaccurate. Other risks may include rehabilitation costs exceeding original estimates, possibly making a project uneconomical, environmental risks, delays in legal

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and other approvals (e.g., for condominiums) and rehabilitation and subsequent leasing of the property not being completed on schedule. If such renovation is not completed in a timely manner, or if it costs more than expected, the borrower may experience a prolonged impairment of net operating income and may not be able to make payments on our investment on a timely basis or at all, which could result in significant losses.

There are increased risks involved with construction lending activities.

We may invest in loans which fund the construction of commercial properties. Construction lending generally is considered to involve a higher degree of risk than other types of lending due to a variety of factors, including the difficulties in estimating construction costs and anticipating construction delays and, generally, the dependency on timely, successful completion and the lease-up and commencement of operations post-completion.

If a borrower fails to complete the construction of a project or experiences cost overruns, there could be adverse consequences associated with the loan, including a loss of the value of the property securing the loan, a borrower claim against us for failure to perform under the loan documents if we choose to stop funding, increased costs to the borrower that the borrower is unable to pay, a bankruptcy filing by the borrower, and abandonment by the borrower of the collateral for the loan.

Loans or investments involving international real estate-related assets are subject to special risks that we may not manage effectively, which would have a material adverse effect on our results of operations and our ability to make distributions to our stockholders.

We may invest a material portion of our capital in assets outside the United States if our Manager deems such investments appropriate in its discretion. To the extent that we invest in non-domestic real estate-related assets, we may be subject to certain risks associated with international investments generally, including, among others:

• currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another;

• less developed or efficient financial markets than in the United States, which may lead to potential price volatility and relative illiquidity;

• the burdens of complying with international regulatory requirements and prohibitions that differ between jurisdictions;

• changes in laws or clarifications to existing laws that could impact our tax treaty positions, which could adversely impact the returns on our investments;

• a less developed legal or regulatory environment, differences in the legal and regulatory environment or enhanced legal and regulatory compliance;

• political hostility to investments by foreign investors;

• higher rates of inflation;

• higher transaction costs;

• difficulty enforcing contractual obligations;

• fewer investor protections;

• certain economic and political risks, including potential exchange control regulations and restrictions on our non-U.S. investments and repatriation of profits on investments or of capital invested, the risks of political, economic or social instability, the possibility of expropriation or confiscatory taxation and adverse economic and political developments; and

• potentially adverse tax consequences.

If any of the foregoing risks were to materialize, they could adversely affect our results of operations and financial condition.

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The ongoing Eurozone financial crisis may have an adverse effect on investments in Europe and could result in the exit of one or more member states from the Eurozone or a breakup of the Eurozone entirely, which creates uncertainty and could affect our investments directly.

A portion of our investments consists of assets secured by European collateral. The ongoing situation relating to the sovereign debt of several countries, including Greece, Ireland, Italy, Spain and Portugal, together with the risk of contagion to other more financially stable countries, has also raised a number of uncertainties regarding the stability and overall standing of the European Monetary Union. Any further deterioration in the global or Eurozone economy could have a significant adverse effect on our activities and the value of any European collateral.

In addition, we hold assets that are denominated in British pounds sterling and may hold assets in the future denominated in Euros. Further deterioration in the Eurozone economy could have a material adverse effect on the value of our investment in such assets and amplify the currency risks faced by us.

If any country were to leave the Eurozone, or if the Eurozone were to break up entirely, the treatment of debt obligations previously denominated in Euros is uncertain. A number of issues would be raised, such as whether obligations that are expressed to be payable in Euros would be re-denominated into a new currency. The answer to this and other questions is uncertain and would depend on the way in which the break-up occurred and also on the nature of the transaction; the law governing it; which courts have jurisdiction in relation to it; the place of payment; and the place of incorporation of the payor. If we held any investments in Euros at the time of any Eurozone exits or break-up, this uncertainty and potential re-denomination could have a material adverse effect on the value of our investments and the income from them.

Transactions denominated in foreign currencies subject us to foreign currency risks.

We hold assets denominated in British pounds sterling, and may acquire assets denominated in Euros or other foreign currencies, which exposes us to foreign currency risk. As a result, a change in foreign currency exchange rates may have an adverse impact on the valuation of our assets, as well as our income and distributions. Any such changes in foreign currency exchange rates may impact the measurement of such assets or income for the purposes of our REIT tests and may affect the amounts available for payment of dividends on our class A common stock.

Our success depends on the availability of attractive investments and our Manager’s ability to identify, structure, consummate, leverage, manage and realize returns on our investments.

Our operating results are dependent upon the availability of, as well as our Manager’s ability to identify, structure, consummate, leverage, manage and realize returns on our investments. In general, the availability of favorable investment opportunities and, consequently, our returns, will be affected by the level and volatility of interest rates, conditions in the financial markets, general economic conditions, the demand for investment opportunities in our target assets and the supply of capital for such investment opportunities. We cannot make any assurances that our Manager will be successful in identifying and consummating investments that satisfy our rate of return objectives or that such investments, once made, will perform as anticipated.

Real estate valuation is inherently subjective and uncertain.

The valuation of real estate and therefore the valuation of any underlying security relating to loans made by us is inherently subjective due to, among other factors, the individual nature of each property, its location, the expected future rental revenues from that particular property and the valuation methodology adopted. In addition, where we invest in construction loans, initial valuations will assume completion of the project. As a result, the valuations of the real estate assets against which we will make loans are subject to a large degree of uncertainty and are made on the basis of assumptions and methodologies that may not prove to be accurate, particularly in periods of volatility, low transaction flow or restricted debt availability in the commercial or residential real estate markets.

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We operate in a competitive market for lending and investment opportunities which has recently intensified, and competition may limit our ability to originate or acquire desirable loans and investments in our target assets and could also affect the yields of these assets and have a material adverse effect on our business, financial condition, and results of operation.

We operate in a competitive market for lending and investment opportunities, which recently has intensified. Our profitability depends, in large part, on our ability to originate or acquire our target assets on attractive terms. In originating or acquiring our target assets, we compete with a variety of institutional lenders and investors, including other REITs, specialty finance companies, public and private funds (including other funds managed by affiliates of Blackstone), commercial and investment banks, commercial finance and insurance companies and other financial institutions. Several other REITs have raised, or are expected to raise, significant amounts of capital, and may have investment objectives that overlap with ours, which may create additional competition for lending and investment opportunities. Some competitors may have a lower cost of funds and access to funding sources that are not available to us, such as the U.S. Government. Many of our competitors are not subject to the operating constraints associated with REIT rule compliance or maintenance of an exclusion from regulation under the Investment Company Act. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments, offer more attractive pricing or other terms and establish more relationships than us. Furthermore, competition for originations of and investments in our target assets may lead to the yields of such assets decreasing, which may further limit our ability to generate satisfactory returns. Also, as a result of this competition, desirable loans and investments in our target assets may be limited in the future and we may not be able to take advantage of attractive lending and investment opportunities from time to time, thereby limiting our ability to identify and originate loans or make investments that are consistent with our investment objectives. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.

Our loans and investments may be concentrated in terms of geography, asset types and sponsors.

We are not required to observe specific diversification criteria, except as may be set forth in the investment guidelines adopted by our board of directors. Therefore, our investments in our target assets may at times be concentrated in certain property types that are subject to higher risk of default or foreclosure, or secured by properties concentrated in a limited number of geographic locations.

To the extent that our portfolio is concentrated in any one region or type of asset, downturns relating generally to such region or type of asset may result in defaults on a number of our investments within a short time period, it could adversely affect our results of operations and financial condition.

The due diligence process that our Manager undertakes in regard to investment opportunities may not reveal all facts that may be relevant in connection with an investment and if our Manager incorrectly evaluates the risks of our investments, we may experience losses.

Before making investments for us, our Manager will conduct due diligence that it deems reasonable and appropriate based on the facts and circumstances relevant to each potential investment. When conducting due diligence, our Manager may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants and investment banks may be involved in the due diligence process in varying degrees depending on the type of potential investment. Relying on the resources available to it, our Manager will evaluate our potential investments based on criteria it deems appropriate for the relevant investment. Our Manager’s loss estimates may not prove accurate, as actual results may vary from estimates. If our Manager underestimates the asset-level losses relative to the price we pay for a particular investment, we may experience losses with respect to such investment.

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Insurance on loans and real estate securities collateral may not cover all losses.

There are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism or acts of war, which may be uninsurable or not economically insurable. Inflation, changes in building codes and ordinances, environmental considerations and other factors, including terrorism or acts of war, also might result in insurance proceeds insufficient to repair or replace a property if it is damaged or destroyed. Under these circumstances, the insurance proceeds received with respect to a property relating one of our investments might not be adequate to restore our economic position with respect to our investment. Any uninsured loss could result in the corresponding nonperformance of or loss on our investment related to such property.

The impact of any future terrorist attacks and the availability of affordable terrorism insurance expose us to certain risks.

Terrorist attacks, the anticipation of any such attacks, and the consequences of any military or other response by the United States and its allies may have an adverse impact on the U.S. financial markets and the economy in general. We cannot predict the severity of the effect that any such future events would have on the U.S. financial markets, the economy or our business. Any future terrorist attacks could adversely affect the credit quality of some of our loans and investments. Some of our loans and investments will be more susceptible to such adverse effects than others, particularly those secured by properties in major cities or properties that are prominent landmarks or public attractions. We may suffer losses as a result of the adverse impact of any future terrorist attacks and these losses may adversely impact our results of operations.

In addition, the enactment of the Terrorism Risk Insurance Act of 2002, or TRIA, and the subsequent enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2007, which extended TRIA through the end of 2014, requires insurers to make terrorism insurance available under their property and casualty insurance policies and provides federal compensation to insurers for insured losses. However, this legislation does not regulate the pricing of such insurance and there is no assurance that this legislation will be extended beyond 2014. The absence of affordable insurance coverage may adversely affect the general real estate lending market, lending volume and the market’s overall liquidity and may reduce the number of suitable investment opportunities available to us and the pace at which we are able to make investments. If the properties that we invest in are unable to obtain affordable insurance coverage, the value of those investments could decline and in the event of an uninsured loss, we could lose all or a portion of our investment.

We may need to foreclose on certain of the loans we originate or acquire, which could result in losses that harm our results of operations and financial condition.

We may find it necessary or desirable to foreclose on certain of the loans we originate or acquire, and the foreclosure process may be lengthy and expensive. Whether or not we have participated in the negotiation of the terms of any such loans, we cannot assure you as to the adequacy of the protection of the terms of the applicable loan, including the validity or enforceability of the loan and the maintenance of the anticipated priority and perfection of the applicable security interests. Furthermore, claims may be asserted by lenders or borrowers that might interfere with enforcement of our rights. Borrowers may resist foreclosure actions by asserting numerous claims, counterclaims and defenses against us, including, without limitation, lender liability claims and defenses, even when the assertions may have no basis in fact, in an effort to prolong the foreclosure action and seek to force the lender into a modification of the loan or a favorable buy-out of the borrower’s position in the loan. In some states, foreclosure actions can take several years or more to litigate. At any time prior to or during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure actions and further delaying the foreclosure process and potentially results in a reduction or discharge of a borrower’s debt. Foreclosure may create a negative public perception of the related property, resulting in a diminution of its value. Even if we are successful in foreclosing on a loan, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our cost basis in the loan, resulting in a loss to us. Furthermore, any costs or delays involved in the foreclosure of the loan or a liquidation of the underlying property will further reduce the net proceeds and, thus, increase any such loss.

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Liability relating to environmental matters may impact the value of properties that we may acquire upon foreclosure of the properties underlying our investments.

To the extent we foreclose on properties with respect to which we have extended loans, we may be subject to environmental liabilities arising from such foreclosed properties. Under various U.S. federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances.

If we foreclose on any properties underlying our investments, the presence of hazardous substances on a property may adversely affect our ability to sell the property and we may incur substantial remediation costs, thus harming our financial condition. The discovery of material environmental liabilities attached to such properties could adversely affect our results of operations and financial condition.

We may be subject to lender liability claims, and if we are held liable under such claims, we could be subject to losses.

In recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or stockholders. We cannot assure prospective investors that such claims will not arise or that we will not be subject to significant liability if a claim of this type did arise.

Any investments we make in CMBS, CLOs, CDOs and other similar structured finance investments would pose additional risks, including the risks of the securitization process and the risk that any special servicer may take actions that could adversely affect our interests.

We may from time to time invest in CMBS, CLOs, CDOs and other similar securities, which are subordinated classes of securities in a structure of securities secured by a pool of mortgages or loans. Accordingly, such securities are the first or among the first to bear the loss upon a restructuring or liquidation of the underlying collateral and the last to receive payment of interest and principal. Thus, there is generally only a nominal amount of equity or other debt securities junior to such positions, if any, issued in such structures. The estimated fair values of such subordinated interests tend to be much more sensitive to adverse economic downturns and underlying borrower developments than more senior securities. A projection of an economic downturn, for example, could cause a decline in the price of lower credit quality CMBS, CLOs or CDOs because the ability of borrowers to make principal and interest payments on the mortgages or loans underlying such securities may be impaired, as has occurred throughout the recent economic recession and weak recovery.

Subordinate interests such as CLOs, CDOs and similar structured finance investments generally are not actively traded and are relatively illiquid investments and volatility in CLO and CDO trading markets may cause the value of these investments to decline. In addition, if the underlying mortgage portfolio has been overvalued by the originator, or if the values subsequently decline and, as a result, less collateral value is available to satisfy interest and principal payments and any other fees in connection with the trust or other conduit arrangement for such securities, we may incur significant losses.

With respect to the CMBS, CLOs and CDOs in which we may invest, control over the related underlying loans will be exercised through a special servicer or collateral manager designated by a “directing certificateholder” or a “controlling class representative,” or otherwise pursuant to the related securitization documents. We may acquire classes of CMBS, CLOs or CDOs, for which we may not have the right to appoint the directing certificateholder or otherwise direct the special servicing or collateral management. With respect to the management and servicing of those loans, the related special servicer or collateral manager may take actions that could adversely affect our interests.

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Any credit ratings assigned to our investments will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded.

Some of our investments may be rated by rating agencies such as Moody’s Investors Service, Fitch Ratings, Standard & Poor’s, DBRS, Inc., Realpoint LLC or Kroll Bond Rating Agency. Any credit ratings on our investments are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. If rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our investments in the future, the value and liquidity of our investments could significantly decline, which would adversely affect the value of our investment portfolio and could result in losses upon disposition or the failure of borrowers to satisfy their debt service obligations to us.

Investments in non-conforming and non-investment grade rated loans or securities involve increased risk of loss.

Many of our investments may not conform to conventional loan standards applied by traditional lenders and either will not be rated (as is typically the case for private loans) or will be rated as non-investment grade by the rating agencies. Private loans often are not rated by credit rating agencies. Non-investment grade ratings typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the underlying properties’ cash flow or other factors. As a result, these investments should be expected to have a higher risk of default and loss than investment-grade rated assets. Any loss we incur may be significant and may adversely affect our results of operations and financial condition. There are no limits on the percentage of unrated or non-investment grade rated assets we may hold in our investment portfolio.

Some of our investments and investment opportunities may be in synthetic form.

Synthetic investments are contracts between parties whereby payments are exchanged based upon the performance of another security or asset, or “reference asset.” In addition to the risks associated with the performance of the reference asset, these synthetic interests carry the risk of the counterparty not performing its contractual obligations. Market standards, GAAP accounting methodology, regulatory oversight and compliance requirements, tax and other regulations related to these investments are evolving, and we cannot be certain that their evolution will not adversely impact the value or sustainability of these investments. Furthermore, our ability to invest in synthetic investments, other than through taxable REIT subsidiaries, may be severely limited by the REIT qualification requirements because synthetic investment contracts generally are not qualifying assets and do not produce qualifying income for purposes of the REIT asset and income tests.

We may invest in derivative instruments, which would subject us to increased risk of loss.

Subject to maintaining our qualification as a REIT, we may invest in derivative instruments. Derivative instruments, especially when purchased in large amounts, may not be liquid in all circumstances, so that in volatile markets we may not be able to close out a position without incurring a loss. The prices of derivative instruments, including swaps, futures, forwards and options, are highly volatile and such instruments may subject us to significant losses. The value of such derivatives also depends upon the price of the underlying instrument or commodity. Such derivatives and other customized instruments also are subject to the risk of non-performance by the relevant counterparty. In addition, actual or implied daily limits on price fluctuations and speculative position limits on the exchanges or over-the-counter markets in which we may conduct our transactions in derivative instruments may prevent prompt liquidation of positions, subjecting us to the potential of greater losses. Derivative instruments that may be purchased or sold by us may include instruments not traded on an exchange. The risk of nonperformance by the obligor on such an instrument may be greater and the ease with which we can dispose of or enter into closing transactions with respect to such an instrument may be less than in the case of an exchange-traded instrument. In addition, significant disparities may exist between “bid” and

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“asked” prices for derivative instruments that are traded over-the-counter and not on an exchange. Such over-the-counter derivatives are also typically not subject to the same type of investor protections or governmental regulation as exchange traded instruments.

In addition, we may invest in derivative instruments that are neither presently contemplated nor currently available, but which may be developed in the future, to the extent such opportunities are both consistent with our investment objectives and legally permissible. Any such investments may expose us to unique and presently indeterminate risks, the impact of which may not be capable of determination until such instruments are developed and/or we determine to make such an investment.

We may experience a decline in the fair value of our assets.

A decline in the fair value of our assets may require us to recognize an “other-than-temporary” impairment against such assets under GAAP if we were to determine that, with respect to any assets in unrealized loss positions, we do not have the ability and intent to hold such assets to maturity or for a period of time sufficient to allow for recovery to the original acquisition cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write down the amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be other-than-temporarily impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted amortized cost of such assets at the time of sale. If we experience a decline in the fair value of our assets, it could adversely affect our results of operations and financial condition.

Some of our portfolio investments may be recorded at fair value and, as a result, there will be uncertainty as to the value of these investments.

Some of our portfolio investments may be in the form of positions or securities that are not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable. We will value these investments quarterly at fair value, which may include unobservable inputs. Because such valuations are subjective, the fair value of certain of our assets may fluctuate over short periods of time and our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. The value of our class A common stock could be adversely affected if our determinations regarding the fair value of these investments were materially higher than the values that we ultimately realize upon their disposal.

Additionally, our results of operations for a given period could be adversely affected if our determinations regarding the fair value of these investments were materially higher than the values that we ultimately realize upon their disposal.

Risks Related to Our Financing and Hedging

We may incur a significant amount of debt, which may subject us to increased risk of loss and could adversely affect our results of operations and financial condition.

We currently have outstanding indebtedness and, subject to market conditions and availability, we may incur a significant amount of additional debt through bank credit facilities (including term loans and revolving facilities), repurchase agreements, warehouse facilities and structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset specific funding arrangements. We may also issue additional debt or equity securities to fund our growth. The percentage of leverage we employ will vary depending on our available capital, our ability to obtain and access financing arrangements with lenders, the type of asset we are funding, whether the financing is recourse or non-recourse, debt restrictions contained in those financing arrangements and the lenders’ and rating agencies’ estimate of the stability of our investment

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portfolio’s cash flow. We may significantly increase the amount of leverage we utilize at any time without approval of our board of directors. In addition, we may leverage individual assets at substantially higher levels. Incurring substantial debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk that:

• our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt, which is likely to result in (a) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision), which we then may be unable to repay from internal funds or to refinance on favorable terms, or at all, (b) our inability to borrow undrawn amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements, which would result in a decrease in our liquidity, and/or (c) the loss of some or all of our collateral assets to foreclosure or sale;

• our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase in an amount sufficient to offset the higher financing costs;

• we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; and

• we may not be able to refinance any debt that matures prior to the maturity (or realization) of an underlying investment it was used to finance on favorable terms or at all.

There can be no assurance that a leveraging strategy will be successful and may subject us to increased risk of loss and could adversely affect our results of operations and financial condition.

Our master repurchase agreements impose, and additional lending facilities may impose, restrictive covenants, which would restrict our flexibility to determine our operating policies and investment strategy.

We borrow funds under master repurchase agreements with various counterparties. The documents that govern these master repurchase agreements and the related guarantees contain, and additional lending facilities may contain, customary affirmative and negative covenants, including financial covenants applicable to us that may restrict our flexibility to determine our operating policies and investment strategy. In particular, our master repurchase agreements require us to maintain a certain amount of cash or set aside assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would otherwise choose, which could reduce our return on assets. If we are unable to meet these collateral obligations, our financial condition and prospects could deteriorate rapidly. In addition, lenders may require that our Manager or one or more of our Manager’s executives continue to serve in such capacity. If we fail to meet or satisfy any of these covenants, we would be in default under these agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce their interests against existing collateral. We may also be subject to cross-default and acceleration rights in our other debt facilities. Further, this could also make it difficult for us to satisfy the requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.

Our master repurchase agreements require, and bank credit facilities, repurchase agreements or other financing that we may use in the future to finance our assets may require, us to provide additional collateral or pay down debt.

Our master repurchase agreements with various counterparties, any bank credit facilities (including term loans and revolving facilities), and additional repurchase agreements or other financing we may enter into in the future, would involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We may not have the

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funds available to repay our debt at that time, which would likely result in defaults unless we are able to raise the funds from alternative sources including by selling assets at a time when we might not otherwise choose to do so, which we may not be able to achieve on favorable terms or at all. Posting additional margin would reduce our cash available to make other, higher yielding investments (thereby decreasing our return on equity). If we cannot meet these requirements, the lender or counterparty could accelerate our indebtedness, increase the interest rate on advanced funds and terminate our ability to borrow funds from it, which could materially and adversely affect our financial condition and ability to implement our investment strategy. In the case of repurchase transactions, if the value of the underlying security has declined as of the end of that term, or if we default on our obligations under the repurchase agreement, we will likely incur a loss on our repurchase transactions. In addition, if a lender or counterparty files for bankruptcy or becomes insolvent, our loans may become subject to bankruptcy or insolvency proceedings, thus depriving us, at least temporarily, of the benefit of these assets. Such an event could restrict our access to financing and increase our cost of capital.

Our use of leverage may create a mismatch with the duration and index of the investments that we are financing.

We intend to structure our leverage such that we minimize the difference between the term of our investments and the leverage we use to finance such investments. In the event that our leverage is for a shorter term than the financed investment, we may not be able to extend or find appropriate replacement leverage and that would have an adverse impact on our liquidity and our returns. In the event that our leverage is for a longer term than the financed investment, we may not be able to repay such leverage or replace the financed investment with an optimal substitute or at all, which will negatively impact our desired leveraged returns.

We attempt to structure our leverage such that we minimize the difference between the index of our investments and the index of our leverage – financing floating rate investments with floating rate leverage and fixed rate investments with fixed rate leverage. If such a product is not available to us from our lenders on reasonable terms, we may use hedging instruments to effectively create such a match. For example, in the case of fixed rate investments, we may finance such an investment with floating rate leverage, but effectively convert all or a portion of the attendant leverage to fixed rate using hedging strategies.

Our attempts to mitigate such risk are subject to factors outside of our control, such as the availability to us of favorable financing and hedging options, which is subject to a variety of factors, of which duration and term matching are only two. The risks of a duration mismatch are magnified by the potential for the extension of loans in order to maximize the likelihood and magnitude of their recovery value in the event the loans experience credit or performance challenges. Employment of this asset management practice would effectively extend the duration of our investments, while our liabilities have set maturity dates.

Interest rate fluctuations could increase our financing costs, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments.

To the extent that our financing costs will be determined by reference to floating rates, such as LIBOR or a Treasury index, the amount of such costs will depend on the level and movement of interest rates. In a period of rising interest rates, our interest expense on floating rate debt would increase, while any additional interest income we earn on our floating rate investments may be subject to caps and may not compensate for such increase in interest expense. At the same time, the interest income we earn on our fixed rate investments would not change, the duration and weighted average life of our fixed rate investments would increase and the market value of our fixed rate investments would decrease. Similarly, in a period of declining interest rates, our interest income on floating rate investments would decrease, while any decrease in the interest we are charged on our floating rate debt may be subject to floors and may not compensate for such decrease in interest income and interest we are charged on our fixed rate debt would not change. Any such scenario could adversely affect our results of operations and financial condition.

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Our loans and investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.

Our investments include loans with both floating interest rates and fixed interest rates. Floating rate investments earn interest at rates that adjust from time to time (typically monthly) based upon an index (typically one-month LIBOR). These floating rate loans are insulated from changes in value specifically due to changes in interest rates; however, the coupons they earn fluctuate based upon interest rates (again, typically one-month LIBOR) and, in a declining and/or low interest rate environment, these loans will earn lower rates of interest and this will impact our operating performance. Fixed interest rate investments, however, do not have adjusting interest rates and the relative value of the fixed cash flows from these investments will decrease as prevailing interest rates rise or increase as prevailing interest rates fall, causing potentially significant changes in value. We may employ various hedging strategies to limit the effects of changes in interest rates (and in some cases credit spreads), including engaging in interest rate swaps, caps, floors and other interest rate derivative products. We believe that no strategy can completely insulate us from the risks associated with interest rate changes and there is a risk that they may provide no protection at all and potentially compound the impact of changes in interest rates. Hedging transactions involve certain additional risks such as counterparty risk, leverage risk, the legal enforceability of hedging contracts, the early repayment of hedged transactions and the risk that unanticipated and significant changes in interest rates may cause a significant loss of basis in the contract and a change in current period expense. We cannot make assurances that we will be able to enter into hedging transactions or that such hedging transactions will adequately protect us against the foregoing risks.

Accounting for derivatives under GAAP is extremely complicated. Any failure by us to account for our derivatives properly in accordance with GAAP on our consolidated financial statements could adversely affect our earnings. In particular, cash flow hedges which are not perfectly correlated (and appropriately designated and/or documented as such) with variable rate financing will impact our reported income as gains and losses on the ineffective portion of such hedges.

We depend on repurchase agreements and may depend on bank credit facilities, warehouse facilities and structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset specific funding arrangements and other sources of financing to execute our business plan, and our inability to access funding could have a material adverse effect on our results of operations, financial condition and business.

Our ability to fund our investments may be impacted by our ability to secure bank credit facilities (including term loans and revolving facilities), warehouse facilities and structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset specific funding arrangements and additional repurchase agreements on acceptable terms. We may also rely on short-term financing that would be especially exposed to changes in availability. Our access to sources of financing will depend upon a number of factors, over which we have little or no control, including:

• general economic or market conditions;

• the market’s view of the quality of our assets;

• the market’s perception of our growth potential;

• our current and potential future earnings and cash distributions; and

• the market price of the shares of our class A common stock.

We will need to periodically access the capital markets to raise cash to fund new investments. Unfavorable economic or capital market conditions, such as the severe dislocation in the capital and credit markets that existed during the recent economic recession, may increase our funding costs, limit our access to the capital markets or could result in a decision by our potential lenders not to extend credit. An inability to successfully

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access the capital markets could limit our ability to grow our business and fully execute our business strategy and could decrease our earnings and liquidity. In addition, any dislocation or weakness in the capital and credit markets, such as the dislocation that existed during the recent economic recession, could adversely affect our lenders and could cause one or more of our lenders to be unwilling or unable to provide us with financing or to increase the costs of that financing. In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price. No assurance can be given that we will be able to obtain any additional financing on favorable terms or at all.

Any warehouse facilities that we may obtain in the future may limit our ability to originate or acquire assets, and we may incur losses if the collateral is liquidated.

We may utilize, if available, warehouse facilities pursuant to which we would accumulate loans in anticipation of a securitization or other financing, which assets would be pledged as collateral for such facilities until the securitization or other transaction is consummated. In order to borrow funds to originate or acquire assets under any future warehouse facilities, we expect that our lenders thereunder would have the right to review the potential assets for which we are seeking financing. We may be unable to obtain the consent of a lender to originate or acquire assets that we believe would be beneficial to us and we may be unable to obtain alternate financing for such assets. In addition, no assurance can be given that a securitization or other financing would be consummated with respect to the assets being warehoused. If the securitization or other financing is not consummated, the lender could demand repayment of the facility, and in the event that we were unable to timely repay, could liquidate the warehoused collateral and we would then have to pay any amount by which the original purchase price of the collateral assets exceeds its sale price, subject to negotiated caps, if any, on our exposure. In addition, regardless of whether the securitization or other financing is consummated, if any of the warehoused collateral is sold before the completion, we would have to bear any resulting loss on the sale.

We may use securitizations to finance our loans and investments, which may expose us to risks that could result in losses.

We may, to the extent consistent with the REIT requirements, seek to securitize certain of our portfolio investments to generate cash for funding new investments. This would involve creating a special-purpose vehicle, contributing a pool of our assets to the entity, and selling interests in the entity on a non-recourse basis to purchasers (whom we would expect to be willing to accept a lower interest rate to invest in investment-grade loan pools). We would expect to retain all or a portion of the equity in the securitized pool of portfolio investments. We may use short-term facilities to finance the acquisition of securities until a sufficient quantity of securities had been accumulated, at which time we would refinance these facilities through a securitization, such as a CMBS, or issuance of CLOs, or the private placement of loan participations or other long-term financing. If we were to employ this strategy, we would be subject to the risk that we would not be able to acquire, during the period that our short-term facilities are available, a sufficient amount of eligible securities to maximize the efficiency of a CMBS, CLO or private placement issuance. We also would be subject to the risk that we would not be able to obtain short-term credit facilities or would not be able to renew any short-term credit facilities after they expire should we find it necessary to extend our short-term credit facilities to allow more time to seek and acquire the necessary eligible securities for a long-term financing. The inability to consummate securitizations of our portfolio to finance our investments on a long-term basis could require us to seek other forms of potentially less attractive financing or to liquidate assets at an inopportune time or price, which could adversely affect our performance and our ability to grow our business. Additionally, the securitization of our portfolio might magnify our exposure to losses because any equity interest we retain in the issuing entity would be subordinate to the notes issued to investors and we would, therefore, absorb all of the losses sustained with respect to a securitized pool of assets before the owners of the notes experience any losses. The inability to securitize our portfolio may hurt our performance and our ability to grow our business. At the same time, the securitization of our portfolio investments might expose us to losses, as the residual portfolio investments in which we do not sell interests will tend to be riskier and more likely to generate losses.

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We may be subject to losses arising from current and future guarantees of debt and contingent obligations of our subsidiaries or joint venture or co-investment partners.

We currently guarantee certain obligations of our subsidiaries under the various master repurchase agreements that provide for significant aggregate borrowings and we may in the future guarantee the performance of additional subsidiaries’ obligations, including, but not limited to, additional repurchase agreements, derivative agreements and unsecured indebtedness. In the future we may also agree to guarantee indebtedness incurred by a joint venture or co-investment partner. Such a guarantee may be on a joint and several basis with such joint venture or co-investment partner, in which case we may be liable in the event such partner defaults on its guarantee obligation. The non-performance of such obligations may cause losses to us in excess of the capital we initially may have invested or committed under such obligations and there is no assurance that we will have sufficient capital to cover any such losses.

We are subject to counterparty risk associated with our debt obligations.

Our counterparties for critical financial relationships may include both domestic and international financial institutions. Many of them have been severely impacted by the recent credit market turmoil and have been experiencing financial pressures. In the past, certain of our counterparties have filed for bankruptcy, leading to financial losses for us.

Hedging may adversely affect our earnings, which could reduce our cash available for distribution to our stockholders.

Subject to maintaining our qualification as a REIT, we may pursue various hedging strategies to seek to reduce our exposure to adverse changes in interest rates and fluctuations in currencies. Our hedging activity will vary in scope based on the level and volatility of interest rates, the type of assets held and other changing market conditions. Interest rate and currency hedging may fail to protect or could adversely affect us because, among other things:

• interest, currency and/or credit hedging can be expensive and may result in us receiving less interest income;

• available interest or currency rate hedges may not correspond directly with the interest rate or currency risk for which protection is sought;

• due to a credit loss, prepayment or asset sale, the duration of the hedge may not match the duration of the related asset or liability;

• the amount of income that a REIT may earn from hedging transactions (other than hedging transactions that satisfy certain requirements of the Internal Revenue Code or that are done through a taxable REIT subsidiary, or TRS) to offset interest rate losses is limited by U.S. federal income tax provisions governing REITs;

• the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;

• the hedging counterparty owing money in the hedging transaction may default on its obligation to pay;

• we may fail to recalculate, readjust and execute hedges in an efficient manner; and

• legal, tax and regulatory changes could occur and may adversely affect our ability to pursue our hedging strategies and/or increase the costs of implementing such strategies.

Any hedging activity in which we engage may materially and adversely affect our results of operations and cash flows. Therefore, while we may enter into such transactions seeking to reduce risks, unanticipated changes in interest rates, credit spreads or currencies may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions or liabilities being hedged

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may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio positions or liabilities being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss.

In addition, some hedging instruments involve risk because they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. Consequently, we cannot assure you that a liquid secondary market will exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in significant losses. In addition, there are no requirements with respect to record keeping, financial responsibility or segregation of customer funds and positions, and the business failure of a hedging counterparty with whom we enter into a hedging transaction will most likely result in its default, which may result in the loss of unrealized profits and force us to cover our commitments, if any, at the then current market price.

We are subject to counterparty risk associated with our hedging activities.

We are subject to credit risk with respect to the counterparties to derivative contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of over-the-counter instruments). If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, we may experience significant delays in obtaining any recovery under the derivative contract in a dissolution, assignment for the benefit of creditors, liquidation, winding-up, bankruptcy, or other analogous proceeding. In addition, in the event of the insolvency of a counterparty to a derivative transaction, the derivative transaction would typically be terminated at its fair market value. If we are owed this fair market value in the termination of the derivative transaction and its claim is unsecured, we will be treated as a general creditor of such counterparty, and will not have any claim with respect to the underlying security. We may obtain only a limited recovery or may obtain no recovery in such circumstances. Counterparty risk with respect to certain exchange-traded and over-the-counter derivatives may be further complicated by recently enacted U.S. financial reform legislation.

We may enter into hedging transactions that could expose us to contingent liabilities in the future.

Subject to maintaining our qualification as a REIT, part of our investment strategy may involve entering into hedging transactions that could require us to fund cash payments in certain circumstances (such as the early termination of the hedging instrument caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the hedging instrument). The amount due would be equal to the unrealized loss of the open swap positions with the respective counterparty and could also include other fees and charges. These economic losses will be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely affect our results of operations and financial condition.

We may fail to qualify for, or choose not to elect, hedge accounting treatment.

We intend to record derivative and hedging transactions in accordance with FASB ASC 815, Derivatives and Hedging. Under these standards, we may fail to qualify for, or choose not to elect, hedge accounting treatment for a number of reasons, including if we use instruments that do not meet the FASB ASC 815 definition of a derivative (such as short sales), we fail to satisfy FASB ASC 815 hedge documentation and hedge effectiveness assessment requirements or our instruments are not highly effective. If we fail to qualify for, or choose not to elect, hedge accounting treatment, our operating results may suffer because losses on the derivatives that we enter into may not be offset by a change in the fair value of the related hedged transaction or item.

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If we enter into certain hedging transactions or otherwise invest in certain derivative instruments, failure to obtain and maintain an exemption from being regulated as a commodity pool operator could subject us to additional regulation and compliance requirements which could materially adversely affect our business and financial condition.

Rules under the Dodd-Frank Act Wall Street Reform and Consumer Protection Act of 2010, or Dodd-Frank Act, establish a comprehensive new regulatory framework for derivative contracts commonly referred to as “swaps.” Under this regulatory framework, mortgage real estate investment trusts, or mREITs, that trade in commodity interest positions (including swaps) are considered “commodity pools” and the operators of such mREITs would be considered “commodity pool operators,” or CPOs. Absent relief, a CPO must register with the U.S. Commodity Futures Trading Commission, or CFTC, and become a member of the National Futures Association, or NFA, which requires compliance with NFA’s rules and renders such CPO subject to regulation by the CFTC, including with respect to disclosure, reporting, recordkeeping and business conduct. We may from time to time, directly or indirectly, invest in instruments that meet the definition of “swap” under the new rules which may subject us to oversight by the CFTC. Our board of directors has appointed our Manager to act as our CPO in the event we are deemed a commodity pool.

In the event that we invest in commodity interests, absent relief, our Manager would be required to register as a CPO. Our Manager may therefore seek and rely on no-action relief from registration with the CFTC or claim an exemption from registration as a CPO with the CFTC, including pursuant to CFTC Rule 4.13(a)(3). CFTC Rule 4.13(a)(3) requires that, among other things, the pool’s trading in commodity interest positions (including both hedging and speculative positions, and positions in security futures) is limited so that either (i) no more than 5% of the liquidation value of the pool’s portfolio is used as initial margin, premiums and required minimum security deposits to establish such positions, or (ii) the aggregate net notional value of the pool’s trading in such positions does not exceed 100% of the pool’s liquidation value. Therefore, unlike a registered CPO, we will not be required to provide prospective investors with a CFTC compliant disclosure document, nor will we be required to provide investors with periodic account statements or certified annual reports that satisfy the requirements of CFTC rules applicable to registered CPOs, in connection with any offerings of shares.

As an alternative to the exemption from registration, our Manager may register as a CPO with the CFTC and avail itself of certain disclosure, reporting and record-keeping relief under CFTC Rule 4.7.

The CFTC has substantial enforcement power with respect to violations of the laws over which it has jurisdiction, including their anti-fraud and anti-manipulation provisions. Among other things, the CFTC may suspend or revoke the registration of a person who fails to comply, prohibit such a person from trading or doing business with registered entities, impose civil money penalties, require restitution and seek fines or imprisonment for criminal violations. Additionally, a private right of action exists against those who violate the laws over which the CFTC has jurisdiction or who willfully aid, abet, counsel, induce or procure a violation of those laws. In the event we fail to receive interpretive relief from the CFTC on this matter, are unable to claim an exemption from registration and fail to comply with the regulatory requirements of these new rules, we may be unable to use certain types of hedging instruments or we may be subject to significant fines, penalties and other civil or governmental actions or proceedings, any of which could adversely affect our results of operations and financial condition.

Risks Related to Our Relationship with Our Manager and its Affiliates

We depend on our Manager and its personnel for our success. We may not find a suitable replacement for our Manager if the Management Agreement is terminated, or if key personnel leave the employment of our Manager or Blackstone or otherwise become unavailable to us.

We are externally managed and advised by our Manager, an affiliate of Blackstone. We have no employees and all of our officers are employees of Blackstone or its affiliates. We are completely reliant on our Manager, which has significant discretion as to the implementation of our investment and operating policies and strategies.

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Our success will depend to a significant extent upon the efforts, experience, diligence, skill and network of business contacts of the executive officers and key personnel of our Manager and its affiliates. Our Manager is managed by senior professionals of Blackstone. These individuals will evaluate, negotiate, execute and monitor our investments and advise us regarding maintenance of our REIT status and exemption from regulation under the Investment Company Act; therefore, our success will depend on their continued service with our Manager and its affiliates. The departure of one or more of the executive officers or key personnel from our Manager and its affiliates could have a material adverse effect on our performance.

In addition, we can offer no assurance that our Manager will remain our investment manager or that we will continue to have access to our Manager’s officers and key personnel. The initial term of the Management Agreement only extends until December 19, 2015. Thereafter, the Management Agreement will be renewable for one-year terms; provided, however, that our Manager may terminate the Management Agreement annually upon 180 days’ prior notice. If the Management Agreement is terminated and no suitable replacement is found to manage us, we may not be able to execute our business plan. Furthermore, we may incur certain costs in connection with a termination of the Management Agreement.

The personnel of our Manager, as our external manager, are not required to dedicate a specific portion of their time to the management of our business.

Neither our Manager nor any other Blackstone affiliate is obligated to dedicate any specific personnel exclusively to us, nor are they or their personnel obligated to dedicate any specific portion of their time to the management of our business. As a result, we cannot provide any assurances regarding the amount of time our Manager or its affiliates will dedicate to the management of our business and our Manager may have conflicts in allocating its time, resources and services among our business and any other investment vehicles and accounts our Manager (or its personnel) may manage. Each of our officers is also an employee of our Manager or another Blackstone affiliate, who has now or may be expected to have significant responsibilities for other investment vehicles currently managed by Blackstone and its affiliates. Consequently, we may not receive the level of support and assistance that we otherwise might receive if we were internally managed. Our Manager and its affiliates are not restricted from entering into other investment advisory relationships or from engaging in other business activities.

Our Manager manages our portfolio pursuant to very broad investment guidelines and is not required to seek the approval of our board of directors for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier loans and investments and which could adversely affect our results of operations and financial condition.

Our Manager is authorized to follow very broad investment guidelines that provide it with broad discretion in investment, financing, asset allocation and hedging decisions. Our board of directors will periodically review our investment guidelines and our investment portfolio but will not, and will not be required to, review and approve in advance all of our proposed investments or the Manager’s financing, asset allocation or hedging decisions. In addition, in conducting periodic reviews, our directors may rely primarily on information provided to them by our Manager or its affiliates. Subject to maintaining our REIT qualification and our exclusion from regulation under the Investment Company Act, our Manager has significant latitude within the broad investment guidelines in determining the types of investments it makes for us, and how such investments are financing or hedged, which could result in investment returns that are substantially below expectations or that result in losses, which could adversely affect our results of operations and financial condition.

Our Manager’s fee structure may not create proper incentives or may induce our Manager and its affiliates to make certain investments, including speculative investments, which increase the risk of our investment portfolio.

We will pay our Manager base management fees regardless of the performance of our portfolio. Our Manager’s entitlement to base management fees, which is not based upon performance metrics or goals, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. Because the base management fees are also based in part on our outstanding equity, our Manager may

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also be incentivized to advance strategies that increase our equity, and there may be circumstances where increasing our equity will not optimize the returns for our stockholders. Consequently, we may be required to pay our Manager base management fees in a particular period despite experiencing a net loss or a decline in the value of our portfolio during that period.

In addition, our Manager has the ability to earn incentive fees each quarter based on our excess earnings, which may create an incentive for our Manager to invest in assets with higher yield potential, which are generally riskier or more speculative, or sell an asset prematurely for a gain, in an effort to increase our short-term net income and thereby increase the incentive fees to which it is entitled. If our interests and those of our Manager are not aligned, the execution of our business plan and our results of operations could be adversely affected, which could adversely affect our results of operations and financial condition.

We may compete with existing and future private and public investment vehicles established and/or managed by Blackstone or its affiliates, which may present various conflicts of interest that restrict our ability to pursue certain investment opportunities or take other actions that are beneficial to our business and result in decisions that are not in the best interests of our stockholders.

We are subject to conflicts of interest arising out of our relationship with Blackstone, including our Manager and its affiliates. Blackstone has appointed two nominees to serve on our board of directors (one of whom serves as executive chairman of our board of directors), and Stephen D. Plavin, our chief executive officer and a member of our board, Paul D. Quinlan, our chief financial officer and our other executive officers are also executives of Blackstone and/or one or more of its affiliates, and we are managed by our Manager, a Blackstone affiliate. There is no guarantee that the policies and procedures adopted by us, the terms and conditions of the Management Agreement or the policies and procedures adopted by our Manager, Blackstone and their affiliates, will enable us to identify, adequately address or mitigate these conflicts of interest.

Some examples of conflicts of interest that may arise by virtue of our relationship with our Manager and Blackstone include:

• Broad and Wide-Ranging Activities. Our Manager, Blackstone and their affiliates engage in a broad spectrum of activities, including a broad range of activities relating to investments in the real estate industry and have invested or committed billions of dollars in capital through various investment funds, managed accounts and other vehicles affiliated with Blackstone. In the ordinary course of their business activities, our Manager, Blackstone and their affiliates may engage in activities where the interests of certain divisions of Blackstone and its affiliates, including our Manager, or the interests of their clients may conflict with the interests of our stockholders. Certain of these divisions and entities affiliated with our Manager have or may have an investment strategy similar to our investment strategy and therefore may compete with us. In particular, Blackstone Real Estate Debt Strategies, or BREDS, part of Blackstone’s real estate investment business, seeks to invest in a broad range of real estate-related debt investments via several different investment funds, managed accounts and other vehicles.

• Blackstone’s Policies and Procedures. Specified policies and procedures implemented by Blackstone and its affiliates, including our Manager, to mitigate potential conflicts of interest and address certain regulatory requirements and contractual restrictions may reduce the advantages across Blackstone’s and its affiliates’ various businesses that Blackstone expects to draw on for purposes of pursuing attractive investment opportunities. Because Blackstone has many different asset management, advisory and other businesses, it is subject to a number of actual and potential conflicts of interest, greater regulatory oversight and more legal and contractual restrictions than that to which it would otherwise be subject if it had just one line of business. In addressing these conflicts and regulatory, legal and contractual requirements across its various businesses, Blackstone has implemented certain policies and procedures (e.g., information walls) that may reduce the benefits that Blackstone expects to utilize for purposes of identifying and managing its investments. For example, Blackstone may come into possession of material non-public information with respect to companies in which our Manager may be considering making an investment in companies that are Blackstone’s and its affiliates’

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advisory clients. As a consequence, that information, which could be of benefit to our Manager, might become restricted to those other businesses and otherwise be unavailable to our Manager, and could also restrict our Manager’s activities. Additionally, the terms of confidentiality or other agreements with or related to companies in which any investment vehicle of Blackstone has or has considered making an investment or which is otherwise an advisory client of Blackstone and its affiliates may restrict or otherwise limit the ability of Blackstone or its affiliates, including our Manager, to engage in businesses or activities competitive with such companies.

• Allocation of Investment Opportunities. Certain inherent conflicts of interest arise from the fact that Blackstone and its affiliates, including our Manager, will provide investment management and other services both to us and to any other person or entity, whether or not the investment objectives or policies of any such other person or entity are similar to ours, including, without limitation, the sponsoring, closing and/or managing of any investment funds, vehicles, accounts, products and/or other similar arrangements sponsored, advised, and/or managed by Blackstone or its affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, co-investment vehicles and other entities formed in connection with Blackstone or its affiliates side-by-side or additional general partner investments with respect thereto), which we refer to as the Blackstone Funds. The respective investment guidelines and programs of our business and the Blackstone Funds may or may not overlap, in whole or in part, and if there is any such overlap investment opportunities will be allocated between us and the Blackstone Funds in a manner that may result in fewer investment opportunities being allocated to us than would have otherwise been the case in the absence of such Blackstone Funds. In particular, while the primary investment strategies of Blackstone Mortgage Trust and Blackstone’s latest flagship successor real estate debt fund, Blackstone Real Estate Debt Strategies II, L.P., or BREDS II, are materially different in that Blackstone Mortgage Trust will generally seek to invest primarily in senior mortgage loans and other similar interests and BREDS II will generally seek to invest primarily in junior mortgage debt (e.g., B Notes) and mezzanine debt, a significant portion of the capital of BREDS II may nonetheless be invested in investments that would also be appropriate for Blackstone Mortgage Trust. Our Manager, Blackstone or their affiliates may also give advice to the Blackstone Funds that may differ from advice given to us even though their investment objectives may be the same or similar to ours.

While our Manager will seek to manage potential conflicts of interest in a fair and equitable manner in accordance with the investment allocation policy and procedures of our Manager and/or its affiliates with respect to the allocation of investment opportunities among us and one or more Blackstone Funds (as the same may be amended, updated or revised from time to time without prior notice from our Manager or our consent), which we refer to as the Allocation Policy, and as required pursuant to the Management Agreement, the portfolio strategies employed by our Manager, Blackstone or their affiliates in managing the Blackstone Funds could conflict with the strategies employed by our Manager in managing our business and may adversely affect the marketability, exit strategy, prices and availability of the securities and instruments in which we invest. Conversely, participation in specific investment opportunities may be appropriate, at times, for both us and the Blackstone Funds. Our Manager has an investment allocation policy in place which provides that investment opportunities falling within the shared investment objectives of our business and the Blackstone Funds will generally be allocated on a basis that our Manager and applicable Blackstone affiliates determine to be fair and reasonable in accordance with the Allocation Policy, subject to legal, tax, regulatory, accounting and other considerations and taking into account a variety of factors. Our Manager is entitled to amend the Allocation Policy at any time without prior notice or our consent.

• Investments in Different Levels or Classes of an Issuer’s Securities. From time to time, we and the Blackstone Funds may make investments at different levels of an issuer’s or borrower’s capital structure (e.g., an investment by a Blackstone Fund in an equity or mezzanine interest with respect to the same portfolio entity in which we own a debt interest or vice versa) or otherwise in different classes of the same issuer’s securities. We may make investments that are senior or junior to, or have rights

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and interests different from or adverse to, the investments made by the Blackstone Funds. Such investments may conflict with the interests of such Blackstone Funds in related investments, and the potential for any such conflicts of interests may be heightened in the event of a default or restructuring of any such investments. Our Management Agreement requires our Manager to keep our board of directors reasonably informed on a periodic basis in connection with the foregoing, including with respect to transactions that involve investments at different levels of an issuer’s or borrower’s capital structure, as to which our Manager has agreed to provide our board of directors with quarterly updates. We currently hold mortgage and mezzanine loans and other investments in which Blackstone affiliates have interests in the collateral securing or backing such investments. While Blackstone will seek to resolve any such conflicts in a fair and equitable manner in accordance with the Allocation Policy and its prevailing policies and procedures with respect to conflicts resolution among the Blackstone Funds generally, such transactions are not required to be presented to our board of directors for approval, and there can be no assurance that any conflicts will be resolved in our favor.

• Pursuit of Differing Strategies. At times, the investment professionals employed by our Manager or its affiliates and other investment vehicles affiliated with our Manager and/or Blackstone may determine that an investment opportunity may be appropriate for only some of the accounts, clients, entities, funds and/or investment companies for which he or she exercises investment responsibility, or may decide that certain of the accounts, clients, entities, funds and/or investment companies should take differing positions with respect to a particular security. In these cases, the investment professionals may place separate transactions for one or more accounts, clients, entities, funds and/or investment companies which may affect the market price of the security or the execution of the transaction, or both, to the detriment or benefit of one or more other accounts, clients, entities, funds and/or investment companies. For example, an investment professional may determine that it would be in the interest of another account to sell a security that we hold long, potentially resulting in a decrease in the market value of the security held by us.

• Variation in Financial and Other Benefits. A conflict of interest arises where the financial or other benefits available to our Manager or its affiliates differ among the accounts, clients, entities, funds and/or investment companies that it manages. If the amount or structure of the base management fee, incentive fee and/or our Manager’s compensation differs among accounts, clients, entities, funds and/or investment companies (such as where certain funds or accounts pay higher base management fees, incentive fees, performance-based management fees or other fees), our Manager might be motivated to help certain accounts, clients, entities, funds and/or investment companies over others. Similarly, the desire to maintain assets under management or to enhance our Manager’s performance record or to derive other rewards, financial or otherwise, could influence our Manager in affording preferential treatment to those accounts, clients, entities, funds and/or investment companies that could most significantly benefit our Manager. Our Manager may, for example, have an incentive to allocate favorable or limited opportunity investments or structure the timing of investments to favor such accounts, clients, entities, funds and/or investment companies. Additionally, our Manager might be motivated to favor accounts, clients, entities, funds and/or investment companies in which it has an ownership interest or in which Blackstone and/or its affiliates have ownership interests. Conversely, if an investment professional at our Manager or its affiliates does not personally hold an investment in the fund but holds investments in other Blackstone affiliated vehicles, such investment professional’s conflicts of interest with respect to us may be more acute.

• Investment Banking, Underwriting Advisory and Other Relationships. As part of its regular business, Blackstone provides a broad range of investment banking, underwriting, advisory, and other services. In the regular course of its investment banking and advisory businesses, Blackstone represents potential purchasers, sellers and other involved parties, including corporations, financial buyers, management, stockholders and institutions, with respect to transactions that could give rise to investments that are suitable for us. Blackstone will be under no obligation to decline any such engagements in order to make an investment opportunity available to us. In connection with its investment banking, advisory

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and other businesses, Blackstone may come into possession of information that limits its ability to engage in potential transactions. Our activities may be constrained as a result of the inability of Blackstone personnel to use such information. For example, employees of Blackstone not serving as employees of our Manager or its affiliates may be prohibited by law or contract from sharing information with members of our Manager’s investment team. Additionally, there may be circumstances in which one or more of certain individuals associated with Blackstone will be precluded from providing services to our Manager because of certain confidential information available to those individuals or to other parts of Blackstone. In certain sell-side assignments, the seller may permit Blackstone to act as a participant in such transaction, which would raise conflicts of interest inherent in such a situation. In addition, in connection with selling investments by way of a public offering, a Blackstone broker-dealer may act as the managing underwriter or a member of the underwriting syndicate on a firm commitment basis and purchase securities on that basis. Blackstone may retain any commissions, remuneration, or other profits and receive compensation from such underwriting activities, which have the potential to create conflicts of interest. Blackstone may also participate in underwriting syndicates from time to time with respect to us or portfolio companies of Blackstone Funds, or may otherwise be involved in the private placement of debt or equity securities issued by us or such portfolio companies, or otherwise in arranging financings with respect thereto. Subject to applicable law, Blackstone may receive underwriting fees, placement commissions, or other compensation with respect to such activities, which are not required to be shared with us or our stockholders. Where Blackstone serves as underwriter with respect to a portfolio company’s securities, we or the applicable Blackstone fund holding such securities may be subject to a “lock-up” period following the offering under applicable regulations during which time our ability to sell any securities that we continue to hold is restricted. This may prejudice our ability to dispose of such securities at an opportune time.

Blackstone has long-term relationships with a significant number of corporations and their senior management. In determining whether to invest in a particular transaction on our behalf, our Manager may consider those relationships (subject to its obligations under the Management Agreement), which may result in certain transactions that our Manager will not undertake on our behalf in view of such relationships.

Blackstone and its affiliates may represent creditors or debtors in proceedings under Chapter 11 of the Bankruptcy Code or prior to such filings. From time to time Blackstone and its affiliates may serve as advisor to creditor or equity committees. This involvement, for which Blackstone and its affiliates may be compensated, may limit or preclude the flexibility that we may otherwise have to participate in restructurings.

• Service Providers. Our service providers (including lenders, brokers, attorneys, and investment banking firms) may be sources of investment opportunities, counterparties therein or advisors with respect thereto. This may influence our Manager in deciding whether to select such a service provider. In addition, in instances where multiple Blackstone businesses may be exploring a potential individual investment, certain of these service providers may choose to be engaged by other Blackstone affiliates rather than us.

• Material, Non-Public Information. We, directly or through Blackstone, our Manager or certain of their respective affiliates may come into possession of material non-public information with respect to an issuer in which we have invested or may invest. Should this occur, our Manager may be restricted from buying or selling securities, derivatives or loans of the issuer on our behalf until such time as the information becomes public or is no longer deemed material. Disclosure of such information to the personnel responsible for management of our business may be on a need-to-know basis only, and we may not be free to act upon any such information. Therefore, we and/or our Manager may not have access to material non-public information in the possession of Blackstone which might be relevant to an investment decision to be made by our Manager on our behalf, and our Manager may initiate a transaction or purchase or sell an investment which, if such information had been known to it, may not have been undertaken. Due to these restrictions, our Manager may not be able to initiate a transaction

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on our behalf that it otherwise might have initiated and may not be able to purchase or sell an investment that it otherwise might have purchased or sold, which could negatively affect our operations.

• Possible Future Activities. Our Manager and its affiliates may expand the range of services that they provide over time. Except as and to the extent expressly provided in the Management Agreement, our Manager and its affiliates will not be restricted in the scope of its business or in the performance of any such services (whether now offered or undertaken in the future) even if such activities could give rise to conflicts of interest, and whether or not such conflicts are described herein. Our Manager, Blackstone and their affiliates continue to develop relationships with a significant number of companies, financial sponsors and their senior managers, including relationships with clients who may hold or may have held investments similar to those intended to be made by us. These clients may themselves represent appropriate investment opportunities for us or may compete with us for investment opportunities.

• Transactions with Blackstone Funds. From time to time, we may enter into purchase and sale transactions with Blackstone Funds. Such transactions will be conducted in accordance with, and subject to, the terms and conditions of the Management Agreement (including the requirement that sales to or acquisitions of investments from Blackstone, any Blackstone Fund or any of their affiliates be approved in advance by a majority of our independent directors) and our code of business conduct and ethics and applicable laws and regulations.

• Loan Refinancings. We may from time to time seek to participate in investments relating to the refinancing of loans held by the Blackstone Funds (including the BREDS funds). While it is expected that our participation in connection with such refinancing transactions will be at arms’ length and on market/contract terms, such transactions may give rise to potential or actual conflicts of interest.

• Other Affiliate Transactions. Our Manager may on our behalf acquire debt issued by a borrower in which a separate equity or another debt investment has been made by Blackstone or its other affiliates, including the BREDS funds. In connection with investments in which we participate alongside other Blackstone Funds (including the BREDS funds), we may from time to time share certain rights with such other Blackstone Funds relating to such investments for legal, tax, regulatory or other similar reasons, including, in certain instances, certain control-related rights with respect to jointly-held investments. When making any such investments, there may be conflicting interests. There can be no assurance that the return on our investment will be equivalent to or better than the returns obtained by Blackstone or its other affiliates.

Further conflicts could arise once we and Blackstone or its affiliates have made their respective investments. For example, if a company goes into bankruptcy or reorganization, becomes insolvent or otherwise experiences financial distress or is unable to meet its payment obligations or comply with covenants relating to securities held by us or by the Blackstone or its affiliates, Blackstone or its affiliates may have an interest that conflicts with our interests or Blackstone or its affiliates may have information regarding the company that we do not have access to. If additional financing is necessary as a result of financial or other difficulties, it may not be in our best interests to provide such additional financing. If Blackstone or its affiliates were to lose their respective investments as a result of such difficulties, the ability of our Manager to recommend actions in our best interests might be impaired.

Termination of the Management Agreement would be costly.

Termination of the Management Agreement without cause will be difficult and costly. Our independent directors will review our Manager’s performance annually and, following the initial three-year term, the Management Agreement may be terminated each year upon the affirmative vote of at least two-thirds of our independent directors, based upon a determination that (i) our Manager’s performance is unsatisfactory and materially detrimental to us or (ii) the base management fee and incentive fee payable to our Manager are not fair (provided

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that in this instance, our Manager will be afforded the opportunity to renegotiate the management fee and incentive fees prior to termination). We are required to provide our Manager with 180 days prior notice of any such termination. Additionally, upon such a termination, or if we materially breach the Management Agreement and our Manager terminates the Management Agreement, the Management Agreement provides that we will pay our Manager a termination fee equal to three times the sum of the average annual base management fee and the average annual incentive fee earned during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. These provisions increase the cost to us of terminating the Management Agreement and adversely affect our ability to terminate our Manager without cause.

Our Manager maintains a contractual as opposed to a fiduciary relationship with us. Our Manager’s liability is limited under the Management Agreement and we have agreed to indemnify our Manager against certain liabilities.

Pursuant to the Management Agreement, our Manager does not assume any responsibility other than to render the services called for thereunder and is not responsible for any action of our board of directors in following or declining to follow its advice or recommendations. Our Manager maintains a contractual as opposed to a fiduciary relationship with us. Under the terms of the Management Agreement, our Manager and its affiliates and their respective directors, officers, employees and stockholders are not liable to us, our directors, our stockholders or any subsidiary of ours, or their directors, officers, employees or stockholders for any acts or omissions performed in accordance with and pursuant to the Management Agreement, except by reason of acts or omissions constituting bad faith, willful misconduct, gross negligence, or reckless disregard of their duties under the Management Agreement. We have agreed to indemnify our Manager and its affiliates and their respective directors, officers, employees and stockholders with respect to all expenses, losses, damages, liabilities, demands, charges and claims arising from acts or omissions of our Manager not constituting bad faith, willful misconduct, gross negligence, or reckless disregard of duties, performed or not performed in good faith in accordance with and pursuant to the Management Agreement. As a result, we could experience poor performance or losses for which our Manager would not be liable.

We do not own the Blackstone name, but we may use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of Blackstone. Use of the name by other parties or the termination of our trademark license agreement may harm our business.

We have entered into a trademark license agreement, or Trademark License Agreement, with an affiliate of Blackstone pursuant to which it has granted us a fully paid-up, royalty-free, non-exclusive, non-transferable license to use the name “Blackstone Mortgage Trust, Inc.” and the ticker symbol “BXMT”. Under this agreement, we have a right to use this name for so long as our Manager (or another affiliate of Blackstone TM L.L.C., or Licensor) serves as our Manager (or another managing entity) and the Manager remains an affiliate of the Licensor under the Trademark License Agreement. The Trademark License Agreement may also be earlier terminated by either party as a result of certain breaches or for convenience upon 90 days’ prior written notice; provided that upon notification of such termination by us, the Licensor may elect to effect termination of the Trademark License Agreement immediately at any time after 30 days from the date of such notification. The Licensor and its affiliates, such as Blackstone, will retain the right to continue using the “Blackstone” name. We will further be unable to preclude the Licensor from licensing or transferring the ownership of the “Blackstone” name to third parties, some of whom may compete with us. Consequently, we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the Licensor, Blackstone or others. Furthermore, in the event that the Trademark License Agreement is terminated, we will be required to, among other things, change our name and NYSE ticker symbol. Any of these events could disrupt our recognition in the market place, damage any goodwill we may have generated and otherwise harm our business.

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Risks Related to Our Company

Our investment strategy or guidelines, asset allocation and financing strategy may be changed without stockholder consent.

Our Manager is authorized to follow broad investment guidelines that have been approved by our board of directors. Those investment guidelines, as well as our financing strategy or hedging policies with respect to investments, originations, acquisitions, growth, operations, indebtedness, capitalization and distributions, may be changed at any time without the consent of our stockholders. This could result in an investment portfolio with a different risk profile. A change in our investment strategy may increase our exposure to interest rate risk, default risk and real estate market fluctuations. Furthermore, a change in our asset allocation could result in our making investments in asset categories different from those described in this report. These changes could adversely affect our results of operations and financial condition.

We must manage our portfolio so that we do not become an investment company that is subject to regulation under the Investment Company Act.

We conduct our operations so that we avail ourselves of the statutory exclusion provided in Section 3(c)(5)(C) for companies engaged primarily in investment in mortgages and other liens on or interests in real estate. In order to qualify for this exclusion, we must maintain, on the basis of positions taken by the SEC’s Division of Investment Management, or the Division, in interpretive and no-action letters, a minimum of 55% of the value of our total assets in mortgage loans and other related assets that are considered “mortgages and other liens on and interests in real estate,” which we refer to as Qualifying Interests, and a minimum of 80% in Qualifying Interests and real estate-related assets. In the absence of SEC or Division guidance that supports the treatment of other investments as Qualifying Interests, we will treat those other investments appropriately as real estate-related assets or miscellaneous assets depending on the circumstances.

The SEC staff has commenced an advance notice rulemaking initiative, indicating that it is reconsidering its interpretive policy under Section 3(c)(5)(C) and whether to advance rulemaking to define the basis for the exclusion. We cannot predict the outcome of this reconsideration or potential rulemaking initiative and its impact on our ability to rely on the exclusion. To the extent that the SEC or its staff provides more specific guidance regarding any of the matters bearing upon the requirements of Section 3(c)(5)(C) of the Investment Company Act, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC or its staff could further inhibit our ability to pursue the strategies we have chosen.

Because registration as an investment company would significantly affect our ability to engage in certain transactions or be structured in the manner we currently are, we intend to conduct our business so that we will continue to satisfy the requirements to avoid regulation as an investment company. If we do not meet these requirements, we could be forced to alter our investment portfolios by selling or otherwise disposing of a substantial portion of the assets that do not satisfy the applicable requirements or by acquiring a significant position in assets that are Qualifying Interests. In the past, when required due to the mix of assets in our balance sheet portfolio, and in connection with our reliance on the Section 3(c)(5)(C) exclusion, we have purchased agency residential mortgage-backed securities that represent the entire beneficial interests in the underlying pools of whole residential mortgage loans, which are treated as Qualifying Interests based on Division positions. Such investments may not represent an optimum use of capital when compared to the available investments we and our subsidiaries target pursuant to our investment strategy. These investments present additional risks to us, and these risks are compounded by our inexperience with such investments. We continue to analyze our investments and may acquire other pools of whole loan residential mortgage-backed securities when and if required for compliance purposes. Altering our portfolio in this manner may have an adverse effect on our investments if we are forced to dispose of or acquire assets in an unfavorable market, and may adversely affect our stock price.

If it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the SEC, that we would be unable to enforce contracts with third parties, that third parties could seek to obtain rescission of transactions undertaken

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during the period it was established that we were an unregistered investment company, and that we would be subject to limitations on corporate leverage that would have an adverse impact on our investment returns. In order to comply with provisions that allow us to avoid the consequences of registration under the Investment Company Act, we may need to forego otherwise attractive opportunities and limit the manner in which we conduct our operations. Thus, compliance with the requirements of the Investment Company Act may hinder our ability to operate solely on the basis of maximizing profits.

Rapid changes in the values of our other real estate-related investments may make it more difficult for us to maintain our qualification as a REIT or exclusion from regulation under the Investment Company Act.

If the market value or income potential of real estate-related investments declines as a result of increased interest rates, prepayment rates or other factors, we may need to increase our real estate investments and income and/or liquidate our non-qualifying assets in order to maintain our REIT qualification or exclusion from the Investment Company Act regulation. If the decline in real estate asset values and/or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-qualifying assets that we may own. We may have to make investment decisions that we otherwise would not make absent the REIT and Investment Company Act considerations.

Changes in laws or regulations governing our operations, changes in the interpretation thereof or newly enacted laws or regulations and any failure by us to comply with these laws or regulations, could require changes to certain of our business practices, negatively impact our operations, cash flow or financial condition, impose additional costs on us or otherwise adversely affect our business.

The laws and regulations governing our operations, as well as their interpretation, may change from time to time, and new laws and regulations may be enacted. Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations and any failure by us to comply with these laws or regulations, could require changes to certain of our business practices, negatively impact our operations, cash flow or financial condition, impose additional costs on us or otherwise adversely affect our business. Furthermore, if regulatory capital requirements – whether under the Dodd-Frank Act, Basel III, or other regulatory action – are imposed on private lenders that provide us with funds, or were to be imposed on us, they or we may be required to limit, or increase the cost of, financing they provide to us or that we provide to others. Among other things, this could potentially increase our financing costs, reduce our ability to originate or acquire loans and reduce our liquidity or require us to sell assets at an inopportune time or price.

In addition, the Iran Threat Reduction and Syria Human Rights Act of 2012, or ITRA, expands the scope of U.S. sanctions against Iran and Section 219 of the ITRA amended the Exchange Act to require companies subject to SEC reporting obligations under Section 13 of the Exchange Act to disclose in their periodic reports specified dealings or transactions involving Iran or other individuals and entities targeted by certain sanctions promulgated by the Office of Foreign Assets Control of the U.S. Department of the Treasury, or Treasury, engaged in by the reporting company or any of its affiliates during the period covered by the relevant periodic report. In some cases, ITRA requires companies to disclose these types of transactions even if they were permissible under U.S. law. Hilton Worldwide, Inc., Travelport Limited and SunGard Data Systems Inc., which may be considered affiliates of Blackstone, and therefore our affiliates, have publicly filed and/or provided to Blackstone the disclosures reproduced on Exhibit 99.1 of this report, which disclosures are hereby incorporated by reference herein. We have not independently verified or participated in the preparation of these disclosures. We are required to separately file with the SEC a notice that such activities have been disclosed in our reports, and the SEC is required to post those notices of disclosure on its website and send the report to the U.S. President and certain U.S. Congressional committees. The U.S. President thereafter is required to initiate an investigation and, within 180 days of initiating such an investigation, to determine whether sanctions should be imposed. Disclosure of such activity, even if such activity is not subject to sanctions under applicable law, and any sanctions actually imposed on us or our affiliates as a result of these activities, could harm our reputation and have a negative impact on our business.

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Actions of the U.S. government, including the U.S. Congress, Federal Reserve Board, Treasury and other governmental and regulatory bodies, to stabilize or reform the financial markets, or market response to those actions, may not achieve the intended effect and may adversely affect our business.

In July 2010, President Obama signed into law the Dodd-Frank Act, which imposes significant investment restrictions and capital requirements on banking entities and other organizations that are significant to U.S. financial stability. For instance, the so-called “Volcker Rule” provisions of the Dodd-Frank Act impose significant restrictions on the proprietary trading activities of banking entities and on their ability to sponsor or invest in private equity and hedge funds. It also subjects nonbank financial companies that have been designated as “systemically important” by the Financial Stability Oversight Council to increased capital requirements and quantitative limits for engaging in such activities, as well as consolidated supervision by the Federal Reserve Board. The Dodd-Frank Act also seeks to reform the asset-backed securitization market (including the mortgage-backed securities market) by requiring the retention of a portion of the credit risk inherent in the pool of securitized assets and by imposing additional registration and disclosure requirements. While the full impact of the Dodd-Frank Act cannot be fully assessed, the Dodd-Frank Act’s extensive requirements may have a significant effect on the financial markets and may affect the availability or terms of financing from our lender counterparties and the availability or terms of mortgage-backed securities, which may, in turn, have an adverse effect on our business.

In addition, the Federal Reserve Board, Treasury and other governmental and regulatory bodies have taken or are taking other actions to address the global financial crisis. We cannot predict whether or when such actions may occur or what effect, if any, such actions could have on our business, results of operations and financial condition.

We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our class A common stock and our ability to pay dividends.

Our business is highly dependent on communications and information systems of Blackstone as well as third party providers of systems, software and information. Any failure or interruption of Blackstone’s or such third party’s systems or software could cause delays or other problems in our trading or other activities, or provide us with incorrect information upon which we rely to our detriment, each of which could adversely affect our results of operations and financial condition.

Developments with our CDO financings have negatively impacted our cash flow.

The terms of CDOs generally provide that the principal amount of investments must exceed the principal balance of the related bonds by a certain amount and that interest income must exceed interest expense by a certain ratio. Certain of our CT CDOs provide that, if defaults, losses, or rating agency downgrades cause a decline in collateral value or cash flow levels, the cash flow otherwise payable to our retained subordinated classes may be redirected to repay classes of CDOs senior to ours until the tests are returned to compliance. We have breached these tests and cash flow has been redirected for our consolidated CDO. Once breached there is no certainty about when or if the cash flow redirection will remedy the tests’ failure or that cash flow will be restored to our subordinated classes. We currently do not receive cash payments from our consolidated CDO, which has caused a material deterioration in our cash flow available for operations, debt service and debt repayments.

We may be required to repurchase loans that we have sold or to indemnify holders of our CDOs.

If any of the loans we originate or acquire, and sell or securitize, through our CT CDOs do not comply with representations and warranties that we make about certain characteristics of the loans, the borrowers and the underlying properties, we may be required to repurchase those loans or replace them with substitute loans. In addition, in the case of loans that we have sold instead of retained, we may be required to indemnify persons for losses or expenses incurred as a result of a breach of a representation or warranty. Repurchased loans typically require a significant allocation of working capital to carry on our books, and our ability to borrow against such assets is limited. Any significant repurchases or indemnification payments could adversely affect our financial condition and operating results.

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We may not have sufficient cash flow to satisfy our tax liability arising from the use of CDO financing and similar financing alternatives.

Due to the redirection provisions of our CDOs, which reallocate principal and interest otherwise distributable to us to repay senior note holders, assets financed through our CDOs may generate current taxable income without a corresponding cash distribution to us. In order to raise the cash necessary to meet our tax and/or distribution requirements, we may be required to borrow funds, sell a portion of our assets at disadvantageous prices or find other alternatives. In any case, there can be no assurances that we will be able to generate sufficient cash from these endeavors to meet our tax and/or distribution requirements.

Under the agreements that govern the Blackstone Transactions, we have retained responsibility for certain liabilities of our historical investment management and special servicing business, which could be substantial.

Under the purchase and sale agreement, dated September 27, 2012, or Purchase Agreement, by and between us and Huskies Acquisition, LLC, or Huskies Acquisition, an affiliate of Blackstone, relating to our December 19, 2012 disposition of our investment management and special servicing business, including CTIMCO, and related private investment fund co-investments, we are required to indemnify Huskies Acquisition and its affiliates for all pre-closing liabilities relating to our prior ownership, management and operation of our historical investment management and special servicing business. The Purchase Agreement does not limit the duration of our obligations to Huskies Acquisition or its affiliates with respect to these indemnities. In the event that the amount of these liabilities were to exceed our expectations, we could be responsible to Huskies Acquisition and its affiliates for substantial indemnification obligations, which could adversely affect our results of operations and financial condition. In addition, claims for indemnification could result in conflicts with our Manager.

Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions. Changes in accounting interpretations or assumptions could impact our ability to timely prepare consolidated financial statements.

Accounting rules for transfers of financial assets, securitization transactions, consolidation of variable interest entities and other aspects of our operations are highly complex and involve significant judgment and assumptions. These complexities could lead to a delay in preparation of financial information and the delivery of this information to our stockholders. Changes in accounting interpretations or assumptions could impact our consolidated financial statements and our ability to timely prepare our consolidated financial statements. Our inability to timely prepare our consolidated financial statements in the future would likely adversely affect our stock price significantly.

Risks Related to our REIT Status and Certain Other Tax Items

If we do not maintain our qualification as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability. Our taxable REIT subsidiaries are subject to income tax.

We expect to continue to operate so as to qualify as a REIT under the Internal Revenue Code. However, qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only a limited number of judicial or administrative interpretations exist. Notwithstanding the availability of cure provisions in the Internal Revenue Code, various compliance requirements could be failed and could jeopardize our REIT status. Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. If we fail to qualify as a REIT in any tax year, then:

• we would be taxed as a regular domestic corporation, which under current laws, among other things, means being unable to deduct distributions to stockholders in computing taxable income and being subject to federal income tax on our taxable income at regular corporate income tax rates;

• any resulting tax liability could be substantial and could have a material adverse effect on our book value;

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• unless we were entitled to relief under applicable statutory provisions, we would be required to pay taxes, and thus, our cash available for distribution to stockholders would be reduced for each of the years during which we did not qualify as a REIT and for which we had taxable income; and

• we generally would not be eligible to requalify as a REIT for the subsequent four full taxable years.

REITs, in certain circumstances, may incur tax liabilities that would reduce our cash available for distribution to our stockholders.

Even if we qualify and maintain our status as a REIT, we may become subject to U.S. federal income taxes and related state and local taxes. For example, net income from the sale of properties that are “dealer” properties sold by a REIT (a “prohibited transaction” under the Internal Revenue Code) will be subject to a 100% tax. We may not make sufficient distributions to avoid excise taxes applicable to REITs. Similarly, if we were to fail an income test (and did not lose our REIT status because such failure was due to reasonable cause and not willful neglect) we would be subject to tax on the income that does not meet the income test requirements. We also may decide to retain net capital gain we earn from the sale or other disposition of our investments and pay income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We also may be subject to state and local taxes on our income or property, including franchise, payroll, mortgage recording and transfer taxes, either directly or at the level of the other companies through which we indirectly own our assets, such as our TRSs, which are subject to full U.S. federal, state, local and foreign corporate-level income taxes. Any taxes we pay directly or indirectly will reduce our cash available for distribution to our stockholders.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities and limit our expansion opportunities.

In order to qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, our sources of income, the nature of our investments in commercial real estate and related assets, the amounts we distribute to our stockholders and the ownership of our stock. We may also be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Complying with REIT requirements may force us to liquidate or restructure otherwise attractive investments.

In order to qualify as a REIT, we must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investments in securities cannot include more than 10% of the outstanding voting securities of any one issuer or 10% of the total value of the outstanding securities of any one issuer unless we and such issuer jointly elect for such issuer to be treated as a “taxable REIT subsidiary” under the Internal Revenue Code. The total value of all of our investments in taxable REIT subsidiaries cannot exceed 25% of the value of our total assets. In addition, no more than 5% of the value of our assets can consist of the securities of any one issuer other than a taxable REIT subsidiary. If we fail to comply with these requirements, we must dispose of a portion of our assets within 30 days after the end of the calendar quarter in order to avoid losing our REIT status and suffering adverse tax consequences.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Internal Revenue Code substantially limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets does not constitute “gross income” for purposes of the 75% or 95% gross income tests that we must satisfy in order to maintain our qualification as a

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REIT. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both of these gross income tests. As a result of these rules, we intend to limit our use of advantageous hedging techniques or implement those hedges through a domestic TRS. This could increase the cost of our hedging activities because our TRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our TRS will generally not provide any tax benefit, except for being carried forward against future taxable income in the TRS.

Complying with REIT requirements may force us to borrow to make distributions to stockholders.

From time to time, our taxable income may be greater than our cash flow available for distribution to stockholders. If we do not have other funds available in these situations, we may be unable to distribute substantially all of our taxable income as required by the REIT provisions of the Internal Revenue Code. Thus, we could be required to borrow funds, sell a portion of our assets at disadvantageous prices or find another alternative. These options could increase our costs or reduce our equity.

Our charter does not permit any individual (including certain entities treated as individuals for this purpose) to own more than 9.9% of our class A common stock or of our capital stock, and attempts to acquire our class A common stock or any of our capital stock in excess of this 9.9% limit would not be effective without a prior exemption from those prohibitions by our board of directors.

For us to qualify as a REIT under the Internal Revenue Code, not more than 50% of the value of our outstanding stock may be owned directly or indirectly, by five or fewer individuals (including certain entities treated as individuals for this purpose) during the last half of a taxable year. For the purpose of preserving our qualification as a REIT for federal income tax purposes, among other purposes, our charter prohibits beneficial or constructive ownership by any individual (including certain entities treated as individuals for this purpose) of more than a certain percentage, currently 9.9%, by value or number of shares, whichever is more restrictive, of the outstanding shares of our class A common stock or our capital stock, which we refer to as the “ownership limit.” The constructive ownership rules under the Internal Revenue Code and our charter are complex and may cause shares of the outstanding class A common stock owned by a group of related individuals or entities to be deemed to be constructively owned by one individual. As a result, the acquisition of less than 9.9% of our outstanding class A common stock or our capital stock by an individual or entity could cause an individual to own constructively in excess of 9.9% of our outstanding class A common stock or our capital stock, respectively, and thus violate the ownership limit. There can be no assurance that our board of directors, as permitted in the charter, will increase, or will not decrease, this ownership limit in the future. Any attempt to own or transfer shares of our class A common stock in excess of the ownership limit without the consent of our board of directors either will result in the shares being transferred by operation of the charter to a charitable trust, and the person who attempted to acquire such excess shares will not have any rights in such excess shares, or in the transfer being void.

The ownership limit may have the effect of precluding a change in control of us by a third party, even if such change in control would be in the best interests of our stockholders or would result in receipt of a premium to the price of our class A common stock (and even if such change in control would not reasonably jeopardize our REIT status). The exemptions to the ownership limit granted to date may limit our board of directors’ power to increase the ownership limit or grant further exemptions in the future.

We may choose to make distributions in our own stock, in which case you may be required to pay income taxes without receiving any cash dividends.

In connection with our qualification as a REIT, we are required to annually distribute to our stockholders at least 90% of our REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order to satisfy this requirement, we may make distributions that are payable in cash and/or shares of our class A common stock (which could account for up to 90% of the aggregate amount of such distributions) at the election of each

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stockholder. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, U.S. stockholders may be required to pay income taxes with respect to such distributions in excess of the cash portion of the distribution received. Accordingly, U.S. stockholders receiving a distribution of our shares may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a U.S. stockholder sells the stock that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount it must include in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distribution, including in respect of all or a portion of such distribution that is payable in stock, by withholding or disposing of part of the shares included in such distribution and using the proceeds of such disposition to satisfy the withholding tax imposed. In addition, if a significant number of our stockholders determine to sell shares of our class A common stock in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our class A common stock.

Various tax aspects of such a taxable cash/stock distribution are uncertain and have not yet been addressed by the Internal Revenue Service, or IRS. No assurance can be given that the IRS will not impose requirements in the future with respect to taxable cash/stock distributions, including on a retroactive basis, or assert that the requirements for such taxable cash/stock distributions have not been met.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum tax rate applicable to qualified dividend income payable to certain non-corporate U.S. stockholders has been reduced by legislation to 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates. Although this legislation does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our class A common stock.

We will be dependent on external sources of capital to finance our growth.

As with other REITs, but unlike corporations generally, our ability to finance our growth must largely be funded by external sources of capital because we generally will have to distribute to our stockholders 90% of our taxable income in order to qualify as a REIT, including taxable income where we do not receive corresponding cash. Our access to external capital will depend upon a number of factors, including general market conditions, the market’s perception of our growth potential, our current and potential future earnings, cash distributions and the market price of our class A common stock.

We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the price of our class A common stock.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our class A common stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect the taxation of a stockholder. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. You are urged to consult with your tax advisor with respect to the impact of recent legislation on your investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. Although REITs generally receive certain tax advantages compared to entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal

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income tax purposes as a corporation. As a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the vote of our stockholders. Our board of directors has duties to us and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our company.

Our investments in certain debt instruments may cause us to recognize “phantom income” for U.S. federal income tax purposes even though no cash payments have been received on the debt instruments, and certain modifications of such debt by us could cause the modified debt to not qualify as a good REIT asset, thereby jeopardizing our REIT qualification.

Our taxable income may substantially exceed our net income as determined based on GAAP, or differences in timing between the recognition of taxable income and the actual receipt of cash may occur. For example, we may acquire assets, including debt securities requiring us to accrue original issue discount, or OID, or recognize market discount income, that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets referred to as “phantom income.” In addition, if a borrower with respect to a particular debt instrument encounters financial difficulty rendering it unable to pay stated interest as due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income with the effect that we will recognize income but will not have a corresponding amount of cash available for distribution to our stockholders.

As a result of the foregoing, we may generate less cash flow than taxable income in a particular year and find it difficult or impossible to meet the REIT distribution requirements in certain circumstances. In such circumstances, we may be required to (a) sell assets in adverse market conditions, (b) borrow on unfavorable terms, (c) distribute amounts that would otherwise be used for future acquisitions or used to repay debt, or (d) make a taxable distribution of our shares of class A common stock as part of a distribution in which stockholders may elect to receive shares of class A common stock or (subject to a limit measured as a percentage of the total distribution) cash, in order to comply with the REIT distribution requirements.

Moreover, we may acquire distressed debt investments that require subsequent modification by agreement with the borrower. If the amendments to the outstanding debt are “significant modifications” under the applicable Treasury Regulations, the modified debt may be considered to have been reissued to us in a debt-for-debt taxable exchange with the borrower. In certain circumstances, this deemed reissuance may prevent the modified debt from qualifying as a good REIT asset if the underlying security has declined in value and would cause us to recognize income to the extent the principal amount of the modified debt exceeds our adjusted tax basis in the unmodified debt.

The “taxable mortgage pool” rules may increase the taxes that we or our stockholders may incur, and may limit the manner in which we effect future securitizations.

Securitizations 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, could be subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage pool. In addition, to the extent that our stock is owned by tax-exempt “disqualified organizations,” such as certain government-related entities and charitable remainder trusts that are not subject to tax on unrelated business income, we may incur a corporate level tax on a portion of our income from the taxable mortgage pool. In that case, we may reduce the amount of our distributions to any disqualified organization whose stock ownership gave rise to the tax. Moreover, we would be precluded from selling equity interests in these securitizations to outside investors, or selling any debt securities issued in connection with these securitizations that might be considered to be equity interests for tax purposes. These limitations may prevent us from using certain techniques to maximize our returns from securitization transactions.

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The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.

We may originate or acquire mezzanine loans, for which the IRS has provided a safe harbor but not rules of substantive law. Pursuant to the safe harbor, if a mezzanine loan meets certain requirements, it will be treated by the IRS as a real estate asset for purposes of the REIT asset tests, and interest derived from the mezzanine loan will be treated as qualifying mortgage interest for purposes of the REIT 75% income test. We may originate or acquire mezzanine loans that do not meet all of the requirements of this safe harbor. In the event we own a mezzanine loan that does not meet the safe harbor, the IRS could challenge such loan’s treatment as a real estate asset for purposes of the REIT asset and income tests and, if such a challenge were sustained, we could fail to qualify as a REIT.

The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT.

We have entered into financing arrangements that are structured as sale and repurchase agreements pursuant to which we would nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these assets at a later date in exchange for a purchase price. Economically, these agreements are financings which are secured by the assets sold pursuant thereto. We believe that we would be treated for REIT asset and income test purposes as the owner of the assets that are the subject of any such sale and repurchase agreement notwithstanding that such agreements may transfer record ownership of the assets to the counterparty during the term of the agreement. It is possible, however, that the IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT.

Liquidation of assets may jeopardize our REIT qualification.

To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to repay obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory.

Our ownership of and relationship with any TRS will be restricted, and a failure to comply with the restrictions would jeopardize our REIT status and may result in the application of a 100% excise tax.

A REIT may own up to 100% of the stock of one or more TRSs. A TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 25% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. The value of our interests in and thus the amount of assets held in a TRS may also be restricted by our need to qualify for an exclusion from regulation as an investment company under the Investment Company Act. A TRS will pay federal, state and local income tax at regular corporate rates on any income that it earns. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.

Any TRS we own, as a domestic TRS, will pay federal, state and local income tax on its taxable income, and its after-tax net income is available for distribution to us but is not required to be distributed to us. The aggregate value of the TRS stock and securities owned by us should be less than 25% of the value of our total assets (including the TRS stock and securities). Although we plan to monitor our investments in TRSs, there can be no assurance that we will be able to comply with the 25% limitation discussed above or to avoid application of the 100% excise tax discussed above.

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Risks Related to Our Class A Common Stock

The market price of our class A common stock may fluctuate significantly.

The capital and credit markets have recently experienced a period of extreme volatility and disruption. The market price and liquidity of the market for shares of our class A common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. Some of the factors that could negatively affect the market price of our class A common stock include:

• our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects;

• actual or perceived conflicts of interest with our Manager or other affiliates of Blackstone and individuals, including our executives;

• equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur;

• loss of a major funding source;

• actual or anticipated accounting problems;

• publication of research reports about us or the real estate industry;

• changes in market valuations of similar companies;

• adverse market reaction to any increased indebtedness we incur in the future;

• additions to or departures of our Manager’s or Blackstone’s key personnel;

• speculation in the press or investment community;

• increases in market interest rates, which may lead investors to demand a higher distribution yield for our class A common stock, and would result in increased interest expenses on our debt;

• failure to maintain our REIT qualification or exclusion from Investment Company Act regulation;

• price and volume fluctuations in the overall stock market from time to time;

• general market and economic conditions, and trends including inflationary concerns, and the current state of the credit and capital markets;

• significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, including Blackstone Mortgage Trust, which is not necessarily related to the operating performance of these companies;

• changes in law, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs;

• changes in the value of our portfolio;

• any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

• operating performance of companies comparable to us;

• short-selling pressure with respect to shares of our class A common stock or REITs generally; and

• uncertainty surrounding the strength of the U.S. economic recovery particularly in light of the recent debt ceiling and budget deficit concerns.

As noted above, market factors unrelated to our performance could also negatively impact the market price of our class A common stock. One of the factors that investors may consider in deciding whether to buy or sell our class A common stock is our distribution rate as a percentage of our stock price relative to market interest rates. If

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market interest rates increase, prospective investors may demand a higher distribution rate or seek alternative investments paying higher dividends or interest. As a result, interest rate fluctuations and conditions in the capital markets may affect the market value of our class A common stock.

Because a limited number of stockholders, including affiliates of our Manager and members of our management team, own a substantial number of our shares, in addition to Blackstone’s board designation rights, they have the power to make decisions or take actions that may be detrimental to your interests.

Our directors and executive officers, along with vehicles for the benefit of their families, collectively own and control 257,786 shares of our class A common stock, representing approximately 0.7% of our outstanding shares of class A common stock as of February 11, 2014. Blackstone and certain of its affiliates, with whom three of our directors are associated, owns 2,800,215 shares of our class A common stock, which represented approximately 7.1% of our outstanding class A common stock as of February 11, 2014. By virtue of their voting power, in addition to Blackstone’s board designation rights, these stockholders have the power to significantly influence our business and affairs and are able to influence the outcome of matters required to be submitted to stockholders for approval, including the election of our directors, amendments to our charter, mergers or sales of assets. The influence exerted by these stockholders over our business and affairs might not be consistent with the interests of some or all of our stockholders. In addition, the concentration of ownership in our officers or directors or stockholders associated with them may have the effect of delaying or preventing a change in control of our company, including transactions which would be in the best interests of our stockholders and would result in receipt of a premium to the price of our class A common stock (and even if such change in control would not reasonably jeopardize our REIT status), and might negatively affect the market price of our class A common stock.

Some provisions of our charter and bylaws and Maryland law may deter takeover attempts, which may limit the opportunity of our stockholders to sell their shares at a favorable price.

Some of the provisions of Maryland law and our charter and bylaws discussed below could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our stockholders by providing them with the opportunity to sell their shares at a premium to the then current market price.

Issuance of Stock Without Stockholder Approval. Our charter authorizes our board of directors, without stockholder approval, to authorize the issuance of up to 100,000,000 shares of preferred stock and up to 100,000,000 shares of class A common stock. Our charter also authorizes our board of directors, without stockholder approval, to classify or reclassify any unissued shares of our class A common stock and preferred stock into other classes or series of stock and to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that are authorized by the charter to be issued. Preferred stock may be issued in one or more classes or series, the terms of which may be determined by our board of directors without further action by stockholders. Prior to issuance of any such class or series, our board of directors will set the terms of any such class or series, including the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption. The issuance of any preferred stock could materially adversely affect the rights of holders of our class A common stock and, therefore, could reduce the value of the class A common stock. In addition, specific rights granted to future holders of our preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The power of our board of directors to cause us to issue preferred stock could, in certain circumstances, make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change in control, thereby preserving the current stockholders’ control.

Advance Notice Bylaw. Our bylaws contain advance notice procedures for the introduction by a stockholder of new business and the nomination of directors by a stockholder. These provisions could, in certain circumstances, discourage proxy contests and make it more difficult for you and other stockholders to elect stockholder-nominated directors and to propose and, consequently, approve stockholder proposals opposed by management.

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Maryland Takeover Statutes. We are subject to the Maryland Business Combination Act, which could delay or prevent an unsolicited takeover of us. The statute substantially restricts the power of third parties who acquire, or seek to acquire, control of us to complete mergers and other business combinations without the approval of our board of directors even if such transaction would be beneficial to stockholders. “Business combinations” between such a third party acquirer or its affiliate and us are prohibited for five years after the most recent date on which the acquirer becomes an “interested stockholder.” An “interested stockholder” is defined as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock or an affiliate or associate of ours who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding stock. If our board of directors approved in advance the transaction that would otherwise give rise to the acquirer attaining such status, the acquirer would not become an interested stockholder and, as a result, it could enter into a business combination with us. Our board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by it. Even after the lapse of the five-year prohibition period, any business combination with an interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least:

• 80% of the votes entitled to be cast by stockholders; and

• two-thirds of the votes entitled to be cast by stockholders other than the interested stockholder and affiliates and associates thereof.

The super-majority vote requirements do not apply if the transaction complies with a minimum price and form of consideration requirements prescribed by the statute.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors prior to the time that an interested stockholder becomes an interested stockholder. Our board of directors has exempted any business combination involving a limited liability company indirectly controlled by a trust for the benefit of Samuel Zell, our former chairman of the board, and his family and approved in advance the issuance of shares to W.R. Berkley. In addition, our board of directors has exempted any business combination involving Huskies Acquisition, an affiliate of Blackstone, or its present affiliates or Blackstone and its present and future affiliates; provided, however, that Huskies Acquisition or any of its present affiliates and Blackstone and any of its present or future affiliates may not enter into any “business combination” with us without the prior approval of at least a majority of the members of our board of directors who are not affiliates or associates of Huskies Acquisition or Blackstone. As a result, these parties may enter into business combinations with us without compliance with the five-year prohibition or the super-majority vote requirements and the other provisions of the statute.

We are also subject to the Maryland Control Share Acquisition Act. With certain exceptions, the Maryland General Corporation Law provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquiring person or by our officers or by our directors who are our employees.

Control shares are voting shares of stock which, if aggregated with all other shares of stock owned or entitled to be voted (except solely by virtue of a revocable proxy) by the acquirer, would entitle the acquirer to exercise voting power in electing directors within one of the specified ranges of voting power. Control shares do not include shares the acquirer is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares subject to certain exceptions. A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions, including an undertaking to pay expenses, may compel our board to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the control shares in question. If no request for a meeting is made, we may present the question at any stockholders meeting.

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If voting rights are not approved at a stockholders meeting or if the acquiring person does not deliver the statement required by Maryland law, then, subject to certain conditions and limitations, we may redeem for fair value (determined without regard to the absence of voting rights) any or all of the control shares, except those for which voting rights have previously been approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer may then vote a majority of the shares entitled to vote, then all other stockholders may exercise appraisal rights. The fair value of the shares for purposes of these appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition. The control share acquisition statute does not apply to shares acquired in a merger, consolidation or share exchange if we are a party to the transaction, nor does it apply to acquisitions approved or exempted by our charter or bylaws. Our bylaws contain a provision exempting the following persons from this statute: (i) a limited liability company indirectly controlled by a trust for the benefit of Samuel Zell and his family; (ii) W.R. Berkley Corporation and any of its controlled affiliates; and (iii) Huskies Acquisition, or any person or entity that was an affiliate of Huskies Acquisition as of September 27, 2012 or by Blackstone or any of its affiliates.

We are also eligible to elect to be subject to the Maryland Unsolicited Takeovers Act, which permits our board of directors, without stockholder approval, to, among other things and notwithstanding any provision in our charter or bylaws, elect on our behalf to classify the terms of directors and to increase the stockholder vote required to remove a director. Such an election would significantly restrict the ability of third parties to wage a proxy fight for control of our board of directors as a means of advancing a takeover offer. If an acquirer were discouraged from offering to acquire us, or prevented from successfully completing a hostile acquisition, you could lose the opportunity to sell your shares at a favorable price.

Our charter contains provisions that are designed to reduce or eliminate duties of Blackstone and our directors with respect to corporate opportunities and competitive activities.

Our charter contains provisions designed to reduce or eliminate duties of Blackstone and its affiliates (as such term is defined in the charter), and of our directors or any person our directors control to refrain from competing with us or to present to us business opportunities that otherwise may exist in the absence of such charter provisions. Under our charter, Blackstone and its affiliates and our directors or any person our directors control will not be obligated to present to us opportunities unless those opportunities are expressly offered to such person in his or her capacity as a director or officer of Blackstone Mortgage Trust and those persons will be able to engage in competing activities without any restriction imposed as a result of Blackstone’s or its affiliates’ status as a stockholder or Blackstone’s affiliates’ status as officers or directors of Blackstone Mortgage Trust.

We have not established a minimum distribution payment level and we cannot assure you of our ability to pay distributions in the future.

We are generally required to distribute to our stockholders at least 90% of our REIT taxable income each year for us to qualify as a REIT under the Internal Revenue Code, which requirement we currently intend to satisfy through quarterly distributions of all or substantially all of our REIT taxable income in such year, subject to certain adjustments. Although we intend to make regular quarterly distributions to holders of our class A common stock and we generally intend to pay quarterly distributions in an amount at least equal to our REIT taxable income, we have not established a minimum distribution payment level and our ability to pay distributions may be adversely affected by a number of factors, including the risk factors described in this report. All distributions will be made at the discretion of our board of directors and will depend on our earnings, our financial condition, debt covenants, maintenance of our REIT qualification, applicable law and other factors as our board of directors may deem relevant from time to time. We believe that a change in any one of the following factors could adversely affect our results of operations and impair our ability to pay distributions to our stockholders:

• our ability to make profitable investments;

• margin calls or other expenses that reduce our cash flow;

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• defaults in our asset portfolio or decreases in the value of our portfolio; and

• the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.

As a result, no assurance can be given that the level of any distributions we make to our stockholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect the market price of our class A common stock. We may use our net operating losses, to the extent available, carried forward to offset future REIT taxable income, and therefore reduce our dividend requirements. In addition, some of our distributions may include a return of capital, which would reduce the amount of capital available to operate our business.

In addition, distributions that we make to our stockholders will generally be taxable to our stockholders as ordinary income. However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our class A common stock.

Investing in our class A common stock may involve a high degree of risk.

The investments that we make in accordance with our investment objectives may result in a high amount of risk when compared to alternative investment options and volatility or loss of principal. Our investments may be highly speculative and aggressive, and therefore an investment in our class A common stock may not be suitable for someone with lower risk tolerance.

Future issuances of equity or debt securities, which may include securities that would rank senior to our class A common stock, may adversely affect the market price of the shares of our class A common stock.

The issuance of additional shares of our class A common stock, including in connection with the conversion of our outstanding 5.25% Convertible Senior Notes due 2018, or other future issuances of our class A common stock or shares of preferred stock or securities convertible or exchangeable into equity securities, may dilute the ownership interest of our existing holders of class A common stock. If we decide to issue debt or equity securities which would rank senior to our class A common stock, it is likely that they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue may have rights, preferences and privileges more favorable than those of our class A common stock and may result in dilution to owners of our class A common stock. We and, indirectly, our stockholders will bear the cost of issuing and servicing such securities. Because our decision to issue additional equity or debt securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future issuances. Also, we cannot predict the effect, if any, of future sales of our class A common stock, or the availability of shares for future sales, on the market price of our class A common stock. Sales of substantial amounts of class A common stock or the perception that such sales could occur may adversely affect the prevailing market price for the shares of our class A common stock. Thus holders of our class A common stock will bear the risk of our future issuances reducing the market price of our class A common stock and diluting the value of their stock holdings in us.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive and administrative offices are located in leased space at 345 Park Avenue, 42^nd Floor, New York, New York 10154. We do not own any real property. We consider these facilities to be suitable and adequate for the management and operations of our business.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

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PART II.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our class A common stock is listed for trading on the NYSE under the symbol “BXMT.” The table below sets forth, for the calendar quarters indicated, the reported high and low sale prices for our class A common stock as reported on the NYSE composite transaction tape, and the per share cash dividends declared on our class A common stock. All amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013.

	High		Low		Dividend
2013
Fourth quarter	$	28.20	$	24.31	$	0.45
Third quarter		26.55		23.89		0.27
Second quarter		29.28		20.60		0.00
First quarter		29.50		18.10		0.00
2012
Fourth quarter	$	39.60	$	16.90	$	20.00
Third quarter		38.50		24.90		0.00
Second quarter		40.00		23.70		0.00
First quarter		41.80		22.00		0.00

The last reported sale price of our class A common stock on February 11, 2014 as reported on the NYSE composite transaction tape was $28.27. As of February 12, 2014, there were 150 holders of record of our class A common stock. By including persons holding shares in broker accounts under street names, however, we estimate our stockholder base to be approximately 11,700 holders.

During the year ended December 31, 2013, we declared aggregate quarterly dividends of $0.72 per share, all of which represented ordinary income. During 2012, we declared a special dividend of $49.8 million, or $20.00 per share, of which $11.23 represented ordinary income and $8.77 represented return of capital. No dividends were declared during the year ended December 31, 2011. We generally intend to distribute each year substantially all of our taxable income (which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles, or GAAP) to our stockholders so as to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended.

In addition, 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, among other things, our actual results of operations and liquidity. These results and our ability to pay distributions will be affected by various factors, including our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant. In accordance with Internal Revenue Service guidance, we are required to report the amount of excess inclusion income earned by us. In 2013, we calculated excess inclusion income to be de minimis.

Issuer Purchases of Equity Securities

We did not repurchase any of our class A common stock during the three months ended December 31, 2013.

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Equity Compensation Plan Information

The following table summarizes information, as of December 31, 2013, relating to our equity compensation plans pursuant to which shares of our class A common stock or other equity securities may be granted from time to time.

Plan category	(a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights		(b) Weighted average exercise price of outstanding options, warrants, and rights		(c) Number of securities remaining available for future issuance under equity compensation plans  (excluding securities reflected in column (a))
Equity compensation plans approved by security holders(1)		—	$	—		2,160,106
Equity compensation plans not approved by security holders(2)		—		—		—
Total		—	$	—		2,160,106

(1) The number of securities remaining for future issuances consists of an aggregate 2,160,106 shares issuable under our 2013 stock incentive plan and our 2013 manager incentive plan which were approved by our stockholders. Awards under the plan may include restricted stock, unrestricted stock, stock options, stock units, stock appreciation rights, performance shares, performance units, deferred share units or other equity-based awards, as the board of directors may determine.

(2) All of our equity compensation plans have been approved by security holders.

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ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated historical financial data should be read in conjunction with the information set forth under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes thereto that appear on pages F-2 to F-48 of this report.

	Years ended December 31,
	2013			2012			2011			2010			2009
	(in thousands, except for per share data)
Revenues
Interest and related income	$	53,164		$	34,939		$	117,161		$	158,792		$	121,930
Total revenues		53,164			34,939			117,161			158,792			121,930
Expenses
Interest expense		18,017			38,138			96,974			123,963			79,753
Management fees		5,937			—			—			—			—
General and administrative expenses		11,505			10,369			8,982			6,035			6,608
Impairments		—			160			49,121			72,366			111,871
(Recovery of) provision for loan losses		—			(36,147	)		(19,326	)		146,478			482,352
Valuation allowance on loans held-for-sale		(1,259	)		—			1,456			2,119			10,363
Total expenses		34,200			12,520			137,207			350,961			690,947
Gain on investments at fair value		7,417			—			—			—			—
Gain on extinguishment of debt		38			—			271,031			3,134			—
Fair value adjustment on investment in CT Legacy Asset		—			51,904			—			—			—
Gain on deconsolidation of subsidiaries		—			200,283			—			—			—
Gain on sale of investments		—			6,000			—			—			—
Income (loss) from equity investments in unconsolidated subsidiaries		—			1,781			3,649			3,608			(3,736	)
Income (loss) before income taxes		26,419			282,387			254,634			(185,427	)		(572,753	)
Income tax provision (benefit)		995			174			1,425			14			(408	)
Net income (loss) allocable to common stock from continuing operations		25,424			282,213			253,209			(185,441	)		(572,345	)
Net (loss) income from discontinued operations, net of tax		—			(2,138	)		(890	)		97			(4,093	)
Loss on sale of discontinued operations		—			(271	)		—			—			—
Net income (loss) allocable to common stock		25,424			279,804			252,319			(185,344	)		(576,438	)
Net (income) loss attributable to non-controlling interests		(10,392	)		(98,780	)		5,823			—			—
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.	$	15,032		$	181,024		$	258,142		$	(185,344	)	$	(576,438	)
Net income (loss) from continuing operations per share of common stock
Basic	$	0.81		$	78.19		$	114.31		$	(82.89	)	$	(255.75	)
Diluted	$	0.81		$	74.16		$	108.17		$	(82.89	)	$	(255.75	)
Net (loss) income from discontinued operations per share of common stock
Basic	$	—		$	(1.03	)	$	(0.39	)	$	0.04		$	(1.83	)
Diluted	$	—		$	(1.03	)	$	(0.39	)	$	0.04		$	(1.83	)
Net income (loss) per share of common stock
Basic	$	0.81		$	77.16		$	113.92		$	(82.85	)	$	(257.58	)
Diluted	$	0.81		$	73.13		$	107.78		$	(82.85	)	$	(257.58	)
Weighted-average shares of common stock outstanding
Basic		18,520			2,346			2,266			2,237			2,238
Diluted		18,520			2,475			2,395			2,237			2,238
Dividends declared per share of common stock	$	0.72		$	20.00		$	—		$	—		$	—

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	As of December 31,
	2013		2012		2011			2010			2009
	(in thousands)
Balance Sheet Data
Total assets	$	2,212,780	$	322,343	$	1,366,316		$	4,120,690		$	1,936,635
Total liabilities		1,456,030		168,890		1,495,255			4,531,877			2,105,802
Non-controlling interests		38,841		80,009		(18,515	)		—			—
Total equity (deficit)		756,750		73,444		(110,424	)		(411,187	)		(169,167	)

(1) The consolidated historical financial data above may not be comparable due to the significant impact on our consolidated financial statements of (i) the Investment Management Business Sale in December 2012 and (ii) our corporate debt restructuring in March 2011. Refer to Note 3 to our consolidated financial statements for additional details of these transactions.

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ITEM 7. 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 consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part, 1. Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

Introduction

Blackstone Mortgage Trust is a real estate finance company that primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., or Blackstone, and are a real estate investment trust, or REIT, traded on the 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 our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to our legacy investments which preceded the re-launch of our originations business. These include our activities specifically related to our CT Legacy Partners, LLC, or CT Legacy Partners, subsidiary, CT CDO I, and our carried interest in CT Opportunity Partners I, LP, or CTOPI.

2013 Developments

In December 2012, we consummated a strategic transaction that included, among other things, the disposition of our investment management and special servicing businesses, and our related fund co-investments to Blackstone. In conjunction with the sale, we entered into an agreement to be managed by our Manager, an affiliate of Blackstone. We refer to the entire transaction as our Investment Management Business Sale.

In May 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected concurrently with a one-for-ten reverse stock split of our class A common stock. At this time, we re-launched our originations business by issuing 25,875,000 shares of class A common stock for a public offering price of $25.50 per share, generating net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses.

Following the re-launch of our business in May 2013 through December 31, 2013, we originated $2.5 billion of new loans, obtained $1.9 billion of secured credit facilities, and issued $172.5 million of convertible notes.

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Because our re-launched business since May 2013 is not comparable to our activities earlier in 2013, or in prior years, the following discussion and analysis of our key financial measures and indicators is focused on our activities during the second half of 2013, rather than the entire year.

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 December 31, 2013 we recorded earnings per share of $0.24, declared a dividend of $0.45 per share, and reported $0.41 per share of Core Earnings, and our book value per share as of December 31, 2013 was $24.25. 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 are not necessarily indicative of our current investment portfolio and operations.

Earnings Per Share

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
	December 31, 2013		September 30, 2013
Net income	$	7,079	$	8,320
Weighted-average shares outstanding, basic and diluted		29,364,448		28,894,515
Net income per share, basic and diluted	$	0.24	$	0.29

The $0.05 per share decline in net income during the fourth quarter was primarily due to the recognition of $4.0 million of aggregate interest and compensation expenses in our CT Legacy Portfolio segment. Earnings per share in our Loan Origination segment increased by $0.10 to $0.37 per share for the three months ended December 31, 2013, as compared to the three months ended September 30, 2013 primarily driven by our strong origination volume in the second half of 2013. The following table calculates our net income per share of class A common stock allocated between our two reportable segments ($ in thousands, except per share data):

	Three Months Ended December 31, 2013
	Loan Origination		CT Legacy Portfolio			Total
Net income (loss)	$	10,749	$	(3,670	)	$	7,079
Weighted-average shares outstanding,basic and diluted		29,364,448		29,364,448			29,364,448
Net income (loss) per share,basic and diluted	$	0.37	$	(0.13	)	$	0.24

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The following table compares our operating results for the three months ended December 31, 2013 and September 30, 2013 ($ in thousands, except per share data):

	Q4 2013			Q3 2013			$ Change			% Change
Income from loans and other investments
Interest and related income	$	26,837		$	18,853		$	7,984			42.3	%
Less: Interest and related expenses		11,525			4,407			7,118			161.5	%
Income from loans and other investments, net		15,312			14,446			866			6.0	%
Other operating expenses		7,929			4,048			3,881			95.9	%
Other income (loss)		3,012			(136	)		3,148			N/M
Income before income taxes		10,395			10,262			133			1.3	%
Income tax provision (benefit)		667			(264	)		931			N/M
Net income		9,728			10,526			(798	)		-7.6	%
Net income attributable to non-controlling interests		(2,649	)		(2,206	)		(443	)		20.1	%
Net income attributable to Blackstone Mortgage Trust, Inc.	$	7,079		$	8,320		$	(355	)		-4.3	%
Dividends per share	$	0.45		$	0.27		$	0.18			66.7	%

Income from loans and other investments, net

Income from loans and other investments increased $866,000, or 6.0%, on a net basis during the fourth quarter of 2013 compared to the third quarter of 2013. The increase was primarily due to (i) earning a full quarter of interest on the loans originated during the third quarter of 2013, and (ii) additional interest earned on the $908.7 million of loans originated and funded during the fourth quarter of 2013. This was offset by additional interest expense resulting from (i) $466.3 million of additional net borrowings under repurchase agreements, (ii) the issuance of $172.5 million of convertible notes, (iii) a $90.0 million senior loan participation sold, and (iv) a one-time charge of $2.0 million associated with the full repayment of our secured notes. The repayment of our secured notes was triggered by our receipt of common equity distributions of $46.6 million from CT Legacy Partners, which is further discussed below.

Other operating expenses

Other operating expenses are comprised of management fees paid to our Manager and general and administrative expenses. Other operating expenses increased by $3.9 million during the fourth quarter of 2013 compared to the third quarter of 2013 primarily due to (i) a $2.0 million expense related to the accelerated vesting of certain awards under the CT Legacy Partners incentive plan related to the common equity distributions from CT Legacy Partners referred to above, (ii) $1.1 million of non-cash restricted stock amortization related to shares awarded during the fourth quarter of 2013 under our stock compensation plans, and (iii) $800,000 of other general operating expenses.

Other income (loss)

During the fourth quarter of 2013, we recognized $3.0 million of net gains on investments carried at fair value in the CT Legacy Portfolio. During the third quarter of 2013, we recognized $136,000 of net unrealized losses on investments carried at fair value in the CT Legacy Portfolio.

Dividends per share

On December 16, 2013, we declared a dividend of $13.0 million, or $0.45 per share, which was paid on January 15, 2014 to class A common stockholders of record as of December 31, 2013. On September 10, 2013,

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we declared a dividend of $7.8 million, or $0.27 per share, which was paid on October 15, 2013 to class A common stockholders of record as of September 30, 2013.

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 below.

Core Earnings

Core Earnings is a non-GAAP measure, which we defined as GAAP net income (loss), including realized losses not otherwise included in GAAP net income (loss), and excluding (i) net income (loss) attributable to our CT Legacy Portfolio segment, (ii) non-cash equity compensation expense, (iii) incentive management fees, (iv) depreciation and amortization, and (v) unrealized gains (losses) or similar 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. Our Manager has determined, and a majority of our independent directors has approved, the exclusion from Core Earnings of the amortization of the deemed issue discount on our convertible notes resulting from the conversion option value accounting under GAAP.

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 are not necessarily indicative of our current investment portfolio and operations. We also use Core Earnings to calculate the incentive and base management fees due to our Manager under our Management Agreement and, as such, we believe that the disclosure of Core Earnings is useful to our investors.

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 cash flow from GAAP operating activities, 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
	December 31, 2013			September 30, 2013
Net income	$	7,079		$	8,320
CT Legacy Portfolio segment net loss (income)		3,670			(437	)
Amortization of discount on convertible notes		130			—
Unrealized gain on foreign currency remeasurement		(23	)		—
Non-cash compensation expense		1,158			94
Core earnings	$	12,014		$	7,977
Weighted-average shares outstanding, basic and diluted		29,364,448			28,894,515
Core earnings per share, basic and diluted	$	0.41		$	0.28

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Book Value per Share

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

	December 31, 2013		September 30, 2013
Equity	$	717,909	$	713,327
Shares
Class A common stock		28,801,651		28,801,651
Restricted class A common stock		700,000		—
Stock units		101,233		96,514
		29,602,884		28,898,165
Book value per share	$	24.25	$	24.68

On a consolidated basis, our book value per share decreased by $0.43 during the fourth quarter, primarily as a result of (i) the excess of dividends declared over GAAP net income, and (ii) the issuance of 700,000 shares of restricted class A common stock. However, the book value per share attributable to our Loan Origination segment increased by a net $0.97 per share during the quarter. This increase was driven by our receipt of a net $28.0 million of equity distributions from CT Legacy Partners and an $8.8 million tax advance cash distribution from CTOPI, which effectively shifted book value from our CT Legacy Portfolio segment to our Loan Origination segment, and which capital is therefore available to finance additional loan originations. The following table calculates our book value per share allocated between our two reportable segments ($ in thousands, except per share data):

	December 31, 2013
	Loan Origination		CT Legacy Portfolio		Total
Equity	$	693,604	$	24,305	$	717,909
Shares
Class A common stock		28,801,651		28,801,651		28,801,651
Restricted class A common stock		700,000		700,000		700,000
Stock units		101,233		101,233		101,233
		29,602,884		29,602,884		29,602,884
Book value per share	$	23.43	$	0.82	$	24.25

II. Loan Origination Portfolio

During the year ended December 31, 2013, our Loan Origination segment funded $2.3 billion under $2.5 billion of new loan commitments and generated interest income of $41.6 million. Our loan portfolio was financed with $1.1 billion of borrowings under our repurchase facilities, $172.5 million of convertible notes, and a $90.0 million senior loan participation, which resulted in interest expense of $13.1 million during the year. In the aggregate, our Loan Origination segment generated net interest income of $28.6 million during the year.

Portfolio Overview

The following table details our loan originations activity during the year ended December 31, 2013 ($ in thousands):

	Loans		Loan		Loan
	Originated		Commitments		Fundings
Senior mortgage loans(1)		28	$	2,283,241	$	2,120,564
Subordinate loans		1		173,837		173,837
Total		29	$	2,457,078	$	2,294,401

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $77.0 million, and pari passu participations in mortgages.

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The following table details our loan repayment activity during the year ended December 31, 2013 ($ in thousands):

	Loan		Loan
	Satisfactions		Repayments(1)		Total
Senior mortgage loans	$	58,000	$	217,537	$	275,537

(1) Includes partial loan repayments and loan sales.

As of December 31, 2013, the majority of loans in the Loan Origination segment were senior mortgage loans or, in certain cases, loans structured as mezzanine loans that have risk exposure substantially similar to senior mortgage loans. The following table details overall statistics for our loans receivable portfolio within the Loan Origination segment ($ in thousands):

	December 31, 2013
Number of loans		28
Principal balance	$	2,018,863
Net book value(1)	$	2,000,223
Weighted-average cash coupon(2)		L+4.64	%
Weighted-average all-in yield(2)		L+5.28	%
Weighted-average maximum maturity (years)(3)		4.2

(1) The difference between principal balance and net book value is primarily due to deferred origination fees.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013; however, certain of our loans receivable earn a minimum LIBOR floor ranging from 0.20% to 1.00%. All-in yield includes amortization of deferred origination fees and other items.

(3) Maximum maturity date assumes all extension options are exercised.

The charts below detail the geographic distribution and types of properties securing these loans, as of December 31, 2013 ($ in millions):

Refer to section V of this Item 7 for details of our loan portfolio, on a loan-by-loan basis.

Asset Management and Performance

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

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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” (lowest risk) to “8” (highest risk). Loans that pose a higher risk of non-performance and/or loss are placed on our watch list. Watch list loans are those with an internal risk rating of “4” or higher.

As of December 31, 2013, all of the investments in the Loan Origination segment are performing as expected and the weighted-average risk rating of our loan portfolio is 2.8.

Repurchase Facilities and Loan Participations

During 2013, we entered into four revolving repurchase facilities and four asset-specific repurchase agreements, providing $1.9 billion of credit. As of December 31, 2013, we had aggregate borrowings of $1.1 billion outstanding under our repurchase facilities, with a weighted-average cash coupon of LIBOR plus 2.12% per annum and a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.39% per annum. As of December 31, 2013, these facilities had a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.4 years. During 2013, we also sold a $90.0 million senior loan participation in a subordinate loan we acquired with a cash coupon of LIBOR plus 5.12% and a weighted-average yield of LIBOR plus 5.26%.

The following table details the repurchase borrowings outstanding as of December 31, 2013 ($ in thousands):

			Collateral Assets				Repurchase Borrowings(3)
Lender	Maximum Facility Size(1)		Principal Balance(2)		Net Book Value(2)		Potential		Current		Available
Revolving Repurchase Facilities
Bank of America	$	500,000	$	355,981	$	352,995	$	280,500	$	271,320	$	9,180
Citibank		500,000		613,339		609,236		460,765		334,692		126,073
JP Morgan(4)		614,525		442,035		439,706		340,912		257,610		83,302
Subtotal		1,614,525		1,411,355		1,401,937		1,082,177		863,622		218,555
Asset-Specific Financings
Wells Fargo(5)		288,354		334,857		333,418		245,731		245,731		—
Total	$	1,902,879	$	1,746,212	$	1,735,355	$	1,327,908	$	1,109,353	$	218,555

(1) Maximum facility size represents the total amount of borrowings provided for in each repurchase agreement, however these borrowings are only available to us once sufficient collateral assets have been pledged under each facility.

(2) The difference between principal balance and net book value of collateral assets is due to deferred origination fees.

(3) Potential borrowings represent 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 revolving credit facility.

(4) The JP Morgan maximum facility size is composed of a $250.0 million facility, a £153.0 million ($252.5 million) facility, and $112.0 million related solely to a specific asset with a repurchase date of June 27, 2014.

(5) Represents an aggregate of four asset-specific repurchase agreements with Wells Fargo.

Refer to Notes 10 and 11 to our consolidated financial statements for additional terms and details of our repurchase facilities and participations sold, including certain financial covenants.

Floating Rate Portfolio

Our Loan Origination portfolio as of December 31, 2013 was comprised of floating rate loans financed by floating rate secured debt, which results in a return on equity that is correlated to LIBOR. Generally, our business

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model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. For instance, all other things being equal, as of December 31, 2013, a 100 basis point increase in LIBOR would have increased our net income by $8.2 million per annum. The following table details our Loan Origination segment’s sensitivity to interest rates ($ in thousands):

	December 31, 2013
Floating rate loans(1)	$	2,018,863
Floating rate debt(1)(2)		(1,199,353	)
Net floating rate exposure	$	819,510
Net income impact from 100 bps increase in LIBOR(3)	$	8,195

(1) Our floating rate loans and debt are indexed to LIBOR as of December 31, 2013.

(2) Includes borrowings under repurchase facilities and loan participations sold.

(3) Excludes the impact of LIBOR floors on certain of our loans receivable.

Convertible Notes

In November 2013, we issued $172.5 million of 5.25% convertible senior notes due on December 1, 2018, or the Convertible Notes. The Convertible Notes issuance costs, including underwriter discounts, are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cash cost of the Convertible Notes is 5.87%.

Refer to Notes 2 and 10 to our consolidated financial statements for additional discussion of our Convertible Notes.

III. CT Legacy Portfolio

Our CT Legacy Portfolio consists of: (i) our interests in CT Legacy Partners; (ii) our carried interest in CTOPI, a private investment fund that was previously under our management and is now managed by an affiliate of our Manager; and (iii) our subordinated interests in CT CDO I.

During the year ended December 31, 2013, we received common equity distributions of $46.6 million from CT Legacy Partners and an $8.8 million tax advance cash distribution from CTOPI. The receipt of distributions from CT Legacy Partners triggered our payments of $11.1 million to fully satisfy the related secured notes and $7.6 million under the CT Legacy Partners management incentive awards plan, which in turn resulted in the recognition of aggregate interest and compensation expenses of $4.0 million.

The $36.8 million of net cash flow during the quarter to us from our CT Legacy segment is unrestricted and available for deployment by us in the loan origination segment of our business. The one-time expenses recognized as a result of these distributions contributed to a net loss of $3.7 million for our CT Legacy Portfolio segment during the quarter.

CT Legacy Partners

Portfolio Overview

Our investment in CT Legacy Partners represents our 52% equity interest in a vehicle we formed to own and finance certain assets that we retained in connection with a comprehensive debt restructuring in 2011. As of December 31, 2013, the CT Legacy Partners portfolio included loans with an aggregate principal balance of $145.3 million and an aggregate fair value of $40.7 million. Refer to section V of this Item 7 for details of the CT Legacy Partners’ loan portfolio, on a loan-by-loan basis.

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The following table details the components of our gross investment in CT Legacy Partners included in our consolidated balance sheet, as well as our net investment in CT Legacy Partners after the future payments under the secured notes and management incentive awards plan as of December 31, 2013 ($ in thousands):

	December 31, 2013
Restricted cash	$	10,096
Loans receivable, at fair value		40,665
Accrued interest receivable, prepaid expenses, and other assets		16,118
Accounts payable, accrued expenses and other liabilities		(378	)
Non-controlling interests		(38,841	)
	$	27,660
Management incentive awards plan, fully vested(1)		(3,848	)
Net investment in CT Legacy Partners	$	23,812

(1) Assumes full payment of the management incentive awards plan, as described below, based on the hypothetical GAAP liquidation value of CT Legacy Partners as of December 31, 2013. We periodically accrue a payable for the management incentive awards plan based on the vesting schedule for the awards and continued employment with an affiliate of our Manager of the award recipients. As of December 31, 2013, our balance sheet includes $2.8 million in accounts payable and accrued expenses for the management incentive awards plan. Refer to Note 14 to our consolidated financial statements for further details.

Secured Notes

In October 2013, we received a $36.2 million distribution from CT Legacy Partners in respect of our common equity interests, the majority of which served as collateral under our secured notes. Accordingly, we repaid these notes in full, and recognized a $2.0 million prepayment penalty as a component of interest expense. We therefore had no secured notes outstanding as of December 31, 2013.

CT Legacy Partners Background

On March 31, 2011, we restructured, amended, or extinguished all of our outstanding recourse debt obligations, which we refer to as our March 2011 Restructuring. Our March 2011 Restructuring involved: (i) the contribution of certain of our legacy assets to a newly formed subsidiary, CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, (the predecessor of CT Legacy Partners); (ii) the assumption of our legacy repurchase obligations by CT Legacy REIT; and (iii) the extinguishment of the remainder of our recourse obligations, our senior credit facility and junior subordinated notes. CT Legacy Partners is beneficially owned 52% by us and 48% by our former lenders. In addition, CT Legacy Partners has issued class B common shares, a subordinate class of equity which entitles its holders to receive approximately 25% of the dividends that would otherwise be payable to us on our equity interest in CT Legacy Partners, after aggregate cash distributions of $50.0 million have been paid to all other classes of common equity. Further, CT Legacy Partners has issued class A preferred shares which entitle its holder to cumulative preferred distributions in an amount generally equal to the greater of (i) 2.5% of certain of CT Legacy Partners’ assets, and (ii) $1.0 million per annum. Refer to Note 8 to our consolidated financial statements for additional details on CT Legacy Partners.

To maintain its tax efficiency, on March 20, 2013, a majority of the stockholders CT Legacy REIT voted in favor of a plan of merger, dated March 22, 2013, or the Merger, whereby CT Legacy REIT merged with and into CT Legacy Partners, effective as of March 22, 2013. Refer to Note 3 to our consolidated financial statements for further details on the Merger.

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Carried Interest in CTOPI

CTOPI is a private equity real estate fund that we sponsored and formed in 2007. The fund invested $491.5 million in 39 transactions between 2007 and the end of its investment period in 2012. To date, $405.8 million of these investments have been realized and $85.8 million remain outstanding (carried at 1.6x cost) as of December 31, 2013. In conjunction with the Investment Management Business Sale, we transferred our management of CTOPI and sold our 4.6% co-investment to Blackstone. However, we retained our carried interest in CTOPI following the sale.

Our carried interest in CTOPI entitles us to earn incentive compensation in an amount equal to 17.7% of the fund’s profits, after a 9% preferred return and 100% return of capital to the CTOPI partners. We own a net 55% of the carried interest of CTOPI’s general partner; the remaining 45% is payable under previously issued incentive awards.

As of December 31, 2013, we had been allocated $18.0 million of incentive compensation from CTOPI based on a hypothetical liquidation of the fund at its net asset value, and after payment of the related incentive awards. The CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. We refer to these distributions as CTOPI Tax Advances. As of December 31, 2013, we have received $10.2 million of aggregate Tax Advances from CTOPI, resulting in an asset value of our investment in CTOPI of $7.8 million. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these CTOPI Tax Advances to the fund.

We have elected to defer the recognition of income on our carried interest in CTOPI until cash is collected or appropriate contingencies have been eliminated. As a result, our net investment in the CTOPI carried interest has a book value of negative $10.2 million, the amount of cumulative CTOPI Tax Advances received as of December 31, 2013.

Refer to Note 9 of our consolidated financial statements for additional discussion of the CTOPI incentive management fee awards to our former employees.

CT CDO I

Portfolio Overview

As of December 31, 2013, our consolidated balance sheet included an aggregate $49.8 million of assets and $40.2 million of liabilities related to CT CDO I, a highly-levered securitization vehicle that we formed in 2004.

Specifically, we own the subordinate debt and equity positions of CT CDO I. As a result of consolidation, our subordinate debt and equity ownership interests in CT CDO I is not included on our balance sheet, which instead reflects both the assets held and debt issued by CT CDO I to third-parties. Similarly, our operating results and cash flows include the gross amounts related to the assets and liabilities of CT CDO I, as opposed to our net economic interests in this entity.

Our economic interest in the loans receivable assets held by CT CDO I, which is consolidated on our balance sheet, is restricted by the structural provisions of CT CDO I, and our recovery of these assets will be limited by its distribution provisions. The liabilities of CT CDO I, which are also consolidated on our balance sheet, are non-recourse to us, and can only be satisfied by proceeds from its collateral asset pool. We are not obligated to provide, nor have we provided, any financial support to CT CDO I. Refer to section V of this Item 7 for details of the CT CDO I loan portfolio, on a loan-by-loan basis.

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IV. Our Results of Operations and Liquidity

Results of Operations

The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the years ended December 31, 2013, 2012, and 2011 ($ in thousands, except per share data):

	Year Ended December 31,									2013 vs. 2012						2012 vs. 2011
	2013			2012			2011			$			%			$			%
Income from loans and other investments
Interest and related income	$	53,164		$	34,939		$	117,161		$	18,225			52.2	%	$	(82,222	)		-70.2	%
Less: Interest and related expenses		18,017			38,138			96,974			(20,121	)		-52.8	%		(58,836	)		-60.7	%
Income (loss) from loans and other investments, net		35,147			(3,199	)		20,187			38,346			N/M			(23,386	)		N/M
Other expenses
Management fees		5,937			—			—			5,937			100.0	%		—			—	%
General and administrative expenses		11,505			10,369			8,982			1,136			11.0	%		1,387			15.4	%
Total other expenses		17,442			10,369			8,982			7,073			68.2	%		1,387			15.4	%
Impairments, provisions, and valuation adjustments		8,676			87,891			(31,251	)		(79,215	)		-90.1	%		119,142			N/M
Gain on deconsolidation of subsidiary		—			200,283			—			(200,283	)		-100.0	%		200,283			100.0	%
Gain on sale of investments		—			6,000			—			(6,000	)		-100.0	%		6,000			100.0	%
Gain on extinguishment of debt		38			—			271,031			38			100.0	%		(271,031	)		-100.0	%
Income from equity investments in unconsolidated subsidiaries		—			1,781			3,649			(1,781	)		-100.0	%		(1,868	)		-51.2	%
Income before provision for taxes		26,419			282,387			254,634			(255,968	)		-90.6	%		27,753			10.9	%
Income tax provision		995			174			1,425			821			N/M			(1,251	)		-87.8	%
Income from continuing operations	$	25,424		$	282,213		$	253,209		$	(256,789	)		-91.0	%	$	29,004			11.5	%
Loss from discontinued operations, net of tax		—			(2,138	)		(890	)		2,138			-100.0	%		(1,248	)		140.2	%
Loss on sale of discontinued operations		—			(271	)		—			271			-100.0	%		(271	)		100.0	%
Net income	$	25,424		$	279,804		$	252,319		$	(254,380	)		-90.9	%	$	27,485			10.9	%
Net (income) loss attributable to non-controlling interests		(10,392	)		(98,780	)		5,823			88,388			-89.5	%		(104,603	)		N/M
Net income attributable to Blackstone Mortgage Trust, Inc.	$	15,032		$	181,024		$	258,142		$	(165,992	)		-91.7	%	$	(77,118	)		-29.9	%
Net income from continuing operations per share – diluted diluted	$	0.81		$	74.16		$	108.17
Net income per share – diluted	$	0.81		$	73.13		$	107.78
Dividends per share	$	0.72		$	2.00		$	—

Income from loans and other investments, net

Income from loans and other investments, net increased by $38.3 million during 2013 compared to 2012. This increase is comprised of $28.6 million related to our Loan Origination segment and $9.7 million related to our CT Legacy Portfolio segment. The increase in our Loan Origination segment is a result of the re-launch of our originations business in May 2013. The increase in the CT Legacy Portfolio segment relates to the deconsolidation of CT CDOs II and IV in December 2013 as well as a $10.2 million one-time expense in 2012 relating to the acceleration of discount associated with the $83.0 million CT Legacy Partners mezzanine loan.

Income from loans and other investments, net decreased by $23.4 million during 2012 compared to 2011. This decrease was driven by (i) the deconsolidation of CT Legacy Assets in July 2012, (ii) the $10.2 million discount acceleration described above, and (iii) asset repayments during 2012 and 2011.

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Other expenses

Other expenses includes management fees paid to our Manager and general and administrative expenses. All general and administrative expenses incurred during and 2012 and 2011 related to our former investment management business have been reclassified to loss from discontinued operations.

Other expenses increased by $7.1 million during 2013 compared to 2012 primarily due to (i) an increase of $6.0 million of management fees to our Manager, (ii) $2.5 million of non-cash compensation expenses driven by the accelerated vesting of certain awards under the CT Legacy Partners incentive plan, (iii) $1.7 million of additional professional fees and other operating costs, and (iv) $787,000 of additional expenses of our consolidated securitized vehicles. These were partially offset by $3.8 million of transaction costs related to the Investment Management Business Sale during 2012.

Other expenses increased by $1.4 million during 2012 compared to 2011. The increase was primarily due to expenses incurred during 2012 related to our Investment Management Business Sale.

Impairments, provisions, and valuation adjustments

During 2013, we recognized (i) $7.4 million of net gains on investments held by CT Legacy Partners and (ii) a $1.3 million positive valuation adjustment on CT CDO I’s loan classified as held-for-sale.

During 2012, we recognized (i) a $51.9 million positive fair value adjustment on our net investment in CT Legacy Asset, (ii) a $36.1 million net recovery of provision for loan losses, and (iii) a $160,000 impairment, representing an additional credit loss on one of the securities in CT CDO I.

During 2011, we recognized (i) a net $48.1 million impairment on nine securities that had an adverse change in cash flow expectations, (ii) a net $19.3 million recovery of provision for loan losses, (iii) a $1.5 million valuation allowance related to one loan that was classified as held-for-sale, and (iv) a $1.0 million impairment of real estate held-for-sale.

Other significant items

As a result of the Investment Management Business Sale in December 2012, our 2013 operating results do not include any income or expense items related to our former investment management business, and the income and expense items related to our investment management business in 2012 and 2011 have been reclassified to loss from discontinued operations. We also sold our class A preferred shares in CT Legacy Asset for $6.0 million to an affiliate of Blackstone. These shares had a carrying value of zero on our consolidated balance sheet, and so the entire amount was recognized as a gain on sale of investment.

During 2012, we recognized a gain of $146.4 million on the deconsolidation of CT Legacy Asset and $53.9 million on the deconsolidation of CT CDOs II and IV. These gains were primarily the result of a reversal of charges to GAAP equity resulting from losses previously recorded in excess of our economic interests in these vehicles.

During 2011, we recorded a $271.0 million gain on the extinguishment of debt due to (i) the extinguishment of the senior credit facility and junior subordinated notes of $174.8 million as part of our March 2011 Restructuring, (ii) the termination of loan participations sold of $75.0 million, and (iii) realized losses in consolidated securitization vehicles of $21.2 million.

The income from equity investments during 2012 of $1.8 million was comprised of income from our co-investments in CTOPI and CT High Grade II. CTOPI’s income was largely the result of the recognition of income on investments purchased at a discount, income from operations, and fair value adjustments on its

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investment portfolio. CT High Grade II’s income was primarily the result of positive fair value adjustments on its investment portfolio. In December 2012, these co-investments were sold as a component of our Investment Management Business Sale.

Income from equity investments during 2011 of $3.6 million was largely the result of investment income and fair value adjustments on the CTOPI portfolio, and the recognition of income on investments purchased at a discount. We did not have a co-investment in CT High Grade II in 2011.

During 2013, we recorded an income tax provision primarily related to income generated by investments held by our taxable REIT subsidiaries. During 2012, we recorded an income tax provision primarily related to alternative minimum taxes incurred as a result of our use of net operating losses, or NOLs, to offset 2012 taxable income. During 2011, we recorded an income tax provision primarily related to income generated by a taxable REIT subsidiary of CT Legacy REIT. All income taxes related to our former investment management business have been reclassified to loss from discontinued operations.

Dividends per share

During 2013, we declared quarterly dividends of $21.1 million, or $0.72 per share. During 2012, we declared a special dividend of $48.6 million, or $20.00 per share. We did not declare any dividends during 2011.

Liquidity and Capital Resources

Capitalization

On May 29, 2013, we issued 25,875,000 shares of class A common stock in a public offering at a price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses. On January 14, 2014, we issued 9,775,000 shares of class A common stock in a public offering at a price to the underwriters of $26.25 per share. We generated net proceeds from the issuance of $256.1 million after underwriting discounts and other offering expenses.

On November 25, 2013, we issued $172.5 million of Convertible Notes. We generated net proceeds from the issuance of $167.6 million after underwriter discounts and other offering expenses. The Convertible Notes issuance costs, including underwriter discounts, are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cost of the Convertible Notes is 5.87%.

During 2013, we entered into four revolving repurchase facilities and four asset-specific repurchase agreements, providing $1.9 billion of credit. As of December 31, 2013, we had aggregate borrowings of $1.1 billion outstanding under repurchase facilities, with a weighted-average cash coupon of LIBOR plus 2.12% per annum and a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.39% per annum. As of December 31, 2013, these facilities had a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.4 years.

As of December 31, 2013, our consolidated balance sheet also included the non-recourse securitized debt obligations of CT CDO I. See above discussion of CT CDO I for further information.

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents and available borrowings under our repurchase facilities, which are set forth in the following table ($ in thousands):

	As of December 31,
	2013		2012
Cash and cash equivalents	$	52,342	$	15,423
Available borrowings under repurchase facilities		218,555		—
	$	270,897	$	15,423

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See Note 10 to our consolidated financial statements for additional terms and details of our repurchase facilities.

During the year ended December 31, 2013, we received net cash distributions from our equity interests in CT Legacy Partners of $28.0 million and an $8.8 million tax cash advance from our carried interest in CTOPI. Other than to the extent we receive such cash distributions, we generally do not have access to liquidity from our CT Legacy Portfolio, including our equity interests in CT Legacy Partners, our carried interest in CTOPI, and our residual ownership interest in CT CDO I. We expect to realize further cash recoveries from each of these portfolios over the next several years.

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 2013, we filed a shelf registration statement with the SEC that is effective for a term of three years and will expire in July 2016. 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.

Liquidity Needs

In addition to our ongoing loan origination activity, our primary liquidity needs include interest and principal payments under our $1.3 billion of outstanding debt obligations, our $164.3 million of unfunded loan commitments, dividend distributions to our stockholders, and operating expenses.

We have no obligations to provide financial support to CT Legacy Partners, CTOPI, or CT CDO I, and all debt obligations of such entities, some of which are consolidated onto our financial statements, are non-recourse to us.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of December 31, 2013 were as follows ($ in thousands):

	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
Loan commitments(1)	$	164,283	$	25,308	$	111,925	$	27,050	$	—
Repurchase obligations(2)		1,109,353		57,703		890,440		161,210		—
Securitized debt obligations(3)		40,181		—		—		—		40,181
Convertible notes		217,027		9,056		18,113		189,858		—
Participations sold(4)		96,134		4,825		91,309		—		—
Total	$	1,626,977	$	96,893	$	1,111,786	$	378,118	$	40,181

(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 our repurchase obligations is based on the initial maturity date of each individual borrowing under our repurchase facilities. Excludes the related future interest payment obligations, which are not fixed and determinable due to the revolving nature of these facilities.

(3) Excludes the related future interest payment obligation, the timing and amount of which are subject to the timing and amount of collateral asset repayments, and cannot be predicted.

(4) Obligations are indexed to LIBOR. Future interest payment obligations are determined using the LIBOR rate in effect as of December 31, 2013.

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We are also required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses pursuant to 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 14 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 shareholders 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 and cash equivalents ($ in thousands):

	For the years ended December 31,
	2013			2012			2011
Cash flows from operating activities	$	28,692		$	6,768		$	28,884
Cash flows from investing activities		(1,782,491	)		189,601			2,093,405
Cash flows from financing activities		1,790,718			(215,764	)		(2,111,920	)
Net increase (decrease) in cash and cash equivalents	$	36,919		$	(19,395	)	$	10,369

We experienced a net increase in cash of $36.9 million for the year ended December 31, 2013, compared to a net decrease of $19.4 million for the year ended December 31, 2012. The increase was primarily due to the receipt of cash interest on loans in our Loan Origination segment which was partially offset by cash paid for interest and other operating expenses.

During 2013, we (i) borrowed $1.1 billion under our repurchase facilities, (ii) generated $633.8 million of net proceeds from the sale of our class A common stock, and (iii) generated $167.6 million of net proceeds from the issuance of convertible notes. We used the proceeds from our debt and equity financing activities to originate a net $1.8 billion of new loans during the year ended December 31, 2013. Refer to Notes 13 and 10 to our consolidated financial statements for additional discussion of our sale of shares of class A common stock and our debt obligations, respectively. Refer to Note 5 to our consolidated financial statements for further discussion of our loan origination activity.

We experienced a net decrease in cash of $19.4 million for the year ended December 31, 2012, compared to a net decrease of $10.4 million for the year ended December 31, 2011. The decrease was primarily due to the financing and investing activities associated with securitization vehicles that were consolidated in 2011, but were subsequently deconsolidated in 2012.

Our consolidated statements of cash flows also include the cash inflows and outflows of the consolidated entities described in Note 3 to our consolidated financial statements. While this does not impact our net cash flow, it does increase certain gross cash flow disclosures. As discussed above, other than to the extent we receive cash distributions from the entities in our CT Legacy Portfolio, we generally do not have access to their liquidity.

Income Taxes

We elected to be taxed as a REIT, effective January 1, 2003, 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

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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 December 31, 2013 and December 31, 2012, we were in compliance with all REIT requirements.

During the year ended December 31, 2013, we recorded a current income tax provision of $995,000 primarily related to our taxable REIT subsidiaries. As a result of our sale of CTIMCO we no longer have any deferred tax assets or liabilities as of December 31, 2012.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our net operating losses, or NOLs, and net capital losses, or NCLs, 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, 2013, we had NOLs of $158.4 million and NCLs of $48.0 million available to be carried forward and utilized in current or future periods. If we are unable to utilize our NOLs, they will expire in 2029. If we are unable to utilize our NCLs, $16.0 million will expire in 2014, $31.4 million will expire in 2015, and $602,000 will expire in 2017.

As of December 31, 2013, tax years 2010 through 2013 remain subject to examination by taxing authorities.

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. During 2013, our Manager reviewed and evaluated its critical accounting policies and believes them to be appropriate. Our significant accounting policies are described in Note 2 to our consolidated financial statements. The following is a summary of those of our significant accounting policies that we believe are the most affected by our Manager’s judgments, estimates and assumptions:

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. These 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 of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

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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 impact 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.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and therefore a further disaggregated presentation would not be more meaningful.

Our subsidiary, CT Legacy Partners, accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and other investments of CT Legacy Partners at fair value on our consolidated balance sheet.

As more fully described in Note 3 to our consolidated financial statements, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Revenue Recognition

Interest income from our loans receivable is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan 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.

Loans Receivable and Provision for Loan Losses

We purchase and originate 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 according 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 is measured by comparing the estimated fair value of the underlying collateral 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 performance of each loan, and assigns a risk rating based on several factors including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated “1” through “8”, from less risk to greater risk, which ratings are defined as follows:

1 - Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in- place debt yield, and stable projected cash flow.

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2 - Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.

3 - Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.

4 - Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.

5 - Low Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 15% probability of default or principal loss.

6 - Medium Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 33% probability of default or principal loss.

7 - High Probability of Default/Loss: A loan with one or more identified weakness that we expect to have a 67% or higher probability of default or principal loss.

8 - In Default: A loan which is in contractual default and/or which has a very high likelihood of principal loss.

Loans Held-for-Sale and Related Allowance

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis or fair value less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statement of operations as a valuation allowance on loans held-for-sale.

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or Codification, 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 fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet as of December 31, 2013, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Codification, 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.

The “Fair Value Measurement and Disclosures” Topic of the Codification also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market

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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 which does not meet the criteria of Levels 1 and 2.

Each type of asset recorded at fair value using Level 3 inputs are determined by an internal committee comprised of members of senior management of our Manager, including our chief executive officer, chief financial officer, and other senior officers.

Certain of our assets and liabilities are measured 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 and liabilities that are measured at fair value are discussed further in Note 18 to our consolidated financial statements. Generally, loans held-for-sale and certain of our loans receivable and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability which was recorded at fair value:

Loans receivable, at fair value – Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value – Our other assets balance include certain commercial mortgage-backed securities, collateral debt obligations, and equity investments and are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans – Loans identified as impaired are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of 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.

Investment in CT Legacy Asset – We arrived at the fair value of our investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets.

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We are also required by GAAP to disclose fair value information about financial instruments, which are otherwise not reported in the statement of financial position at fair value, to the extent it is practicable to estimate a fair value for those instruments. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents – The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash – The carrying amount of restricted cash approximates fair value.

Loans receivable, net – Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors including capitalization 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.

Secured notes – These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations – These facilities are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Convertible notes, net – These notes are recorded at their amortized cost, and not at fair value. These convertible notes are publicly traded and their fair values are obtained using quoted market prices.

Securitized debt obligations – These obligations are recorded at the face value of outstanding obligations to third-parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third party dealers.

Participations sold – These obligations are recorded at their face value and not at fair value. The fair value was estimated based on the value of the related loan receivable asset.

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. Many of these requirements, however, are highly technical and complex. 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 16 to our consolidated financial statements for additional information.

Recent Accounting Pronouncements

Refer to Note 2 to our consolidated financial statements for a discussion of the impact of recent accounting pronouncements on our business. There have been no accounting pronouncements issued but not yet adopted by us that we believe will have a significant impact on our consolidated financial statements.

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V. Loan Portfolio Details

The following table provides details of the Loan Origination segment’s portfolio, on a loan-by-loan basis, as of December 31, 2013 ($ in millions):

	Loan Type(1)	Principal Balance		Book Balance		Cash Coupon(2)			All-in Yield(2)			Maximum Maturity(3)		Geographic Location	Property Type	Origination LTV			Risk Rating as of December 31,
																			2013		2012
1	Senior mortgage loan	$	194.0	$	193.2		L + 3.80	%		L + 3.97	%(4)		6/15/2018	CA	Office		51	%		2		N/A
2	Senior mortgage loan		181.0		179.3		L + 4.50	%		L + 4.86	%		11/9/2018	NY	Multifamily		68	%		3		N/A
3	Sub. mortgage part.		173.8		166.2		L + 5.66	%		L + 9.25	%		4/9/2015	WA	Office		67	%		3		N/A
4	Senior mortgage loan		140.0		138.6		L + 4.75	%		L + 5.27	%(4)		1/9/2019	NY	Office		70	%		3		N/A
5	Senior mortgage loan		140.0		139.7		L + 3.70	%		L + 3.83	%		9/30/2020	NY	Diversified		67	%		3		N/A
6	Senior mortgage loan		89.8		89.2		L + 4.38	%		L + 4.63	%		11/9/2018	CA	Hotel		71	%		2		N/A
7	Senior mortgage loan		87.0		86.5		L + 4.25	%		L + 4.64	%		8/10/2018	Diversified	Diversified		61	%		3		N/A
8	Senior mortgage loan		81.0		80.7		L + 3.85	%		L + 4.03	%		7/9/2018	GA	Multifamily		75	%		3		N/A
9	Senior mortgage loan		70.3		70.1		L + 3.95	%		L + 3.89	%(4)		6/9/2018	CA	Office		71	%		2		N/A
10	Senior mortgage loan		68.0		67.8		L + 4.00	%		L + 4.23	%		6/10/2016	NY	Office		68	%		3		N/A
11	Senior mortgage loan		67.7		67.0		L + 5.00	%		L + 5.44	%		9/14/2018	Diversified	Other		66	%		3		N/A
12	Senior mortgage loan		64.0		64.5		L + 8.00	%		L + 9.46	%(4)		2/9/2015	NY	Other		69	%		3		N/A
13	Senior mortgage loan		63.2		62.7		L + 5.00	%		L + 5.30	%		11/6/2016	NY	Multifamily		59	%		3		N/A
14	Senior mortgage loan		57.1		56.5		L + 3.85	%		L + 4.24	%		10/10/2018	Diversified	Multifamily		76	%		3		N/A
15	Senior mortgage loan		48.4		48.5		L + 5.00	%		L + 5.68	%(4)		12/9/2016	IL	Hotel		53	%		3		N/A
16	Senior mortgage loan		46.3		45.9		L + 4.25	%		L + 4.64	%		7/10/2018	CO	Hotel		69	%		3		N/A
17	Senior mortgage loan		46.0		45.6		L + 4.25	%		L + 4.78	%		10/9/2018	CA	Hotel		51	%		3		N/A
18	Senior mortgage loan		45.9		45.2		L + 5.00	%		L + 6.07	%		8/9/2018	VA	Office		72	%		3		N/A
19	Senior mortgage loan		43.5		43.1		L + 4.50	%		L + 5.11	%		7/16/2017	NY	Other		69	%		3		N/A
20	Senior mortgage loan		42.6		42.1		L + 3.85	%		L + 4.20	%		9/10/2018	Diversified	Multifamily		77	%		3		N/A
21	Senior mortgage loan		42.0		41.5		L + 4.50	%		L + 4.94	%		1/9/2019	AZ	Office		67	%		3		N/A
22	Senior mortgage loan		37.3		37.2		L + 4.63	%		L + 5.49	%		11/27/2018	U.K.	Office		68	%		3		N/A
23	Senior mortgage loan		37.5		37.2		L + 3.85	%		L + 4.04	%		8/9/2018	IL	Office		68	%		2		N/A
24	Mezzanine loan(5)		33.5		33.7		L + 12.56	%		L + 12.35	%		12/13/2017	NY	Multifamily		77	%		3		N/A
25	Senior mortgage loan		32.9		33.0		L + 3.95	%		L + 4.20	%(4)		8/9/2017	CO	Hotel		64	%		2		N/A
26	Senior mortgage loan		31.0		30.5		L + 4.10	%		L + 4.64	%		1/9/2019	CA	Office		43	%		3		N/A
27	Senior mortgage loan		28.0		27.7		L + 4.35	%		L + 4.71	%		12/9/2018	CA	Hotel		55	%		3		N/A
28	Senior mortgage loan		27.1		27.1		L + 3.87	%		L + 3.87	%		7/9/2017	NY	Hotel		32	%		1		N/A
		$	2,018.9	$	2,000.2		L + 4.64	%		L + 5.28	%		4.2 years				65	%		2.8		N/A

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013.

(3) Maximum maturity date assumes all extension options are exercised.

(4) Minimum LIBOR floor ranging from 0.20% to 1.00%.

(5) We originated the loan directly senior to this subordinate loan, but sold the senior loan to finance our overall investment.

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The following table provides details of our CT Legacy Portfolio segment loan portfolios, on a loan-by-loan basis as of December 31, 2013 ($ in millions):

Loan Type	Principal Balance(1)		Book Balance(2)		Cash Coupon(3)			All-in Yield(3)			Maximum Maturity(4)		Geographic Location	Property Type	Risk Rating as of December 31,
															2013		2012
CT Legacy Partners
1    Mezzanine loan	$	19.6	$	19.8		8.00	%		8.00	%		9/1/2014	Northeast	Office		1		2
2    Senior mortgage loan		15.0		15.0		L + 4.00	%(5)		L + 4.00	%(5)		12/9/2014	West	Hotel		4		4
3    Mezzanine loan		8.0		2.0		L + 4.75	%		L + 4.75	%		1/8/2014	Northeast	Office		7		3
4    Mezzanine loan		4.4		3.9		8.77	%		8.77	%		2/1/2016	Northeast	Office		4		4
		47.0		40.7		6.24	%		6.24	%		0.9 years				3.3		3.0
CT CDO I
1    Sub. mortgage participation		27.0		27.0		L + 3.53	%		L + 3.53	%		1/8/2014	Northeast	Office		7		3
2    Sub. mortgage participation		20.0		20.0		L + 6.06	%		L + 6.06	%		4/9/2014	Diversified	Office		2		2
		47.0		47.0		L + 4.61	%		L + 4.61	%		0.1 years				4.9		2.6
	$	94.0	$	94.0		5.42	%		5.36	%		0.5 years				4.1		2.8

(1) Table excludes three CT Legacy Partner loans with an aggregate principal balance of $98.3 million and one CT CDO I loan with a principal balance of $10.5 million which were 100% impaired as of as of December 31, 2013.

(2) Represents the fair value of each CT Legacy Partner loan as of December 31, 2013.

(3) All floating rate loans are indexed to LIBOR as of December 31, 2013. LIBOR was 0.17% as of December 31, 2013.

(4) Maximum maturity date assumes all extension options are exercised.

(5) Minimum LIBOR floor of 2.00%.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our business is exposed to the risks related to interest rate fluctuations. We generally originate floating rate assets and finance those assets with index-matched floating rate liabilities. As a result, we significantly reduce our exposure to changes in portfolio value related to changes in interest rates.

Our investments in fixed rate assets are generally exposed to changes in value due to interest rate fluctuations, and our investments in floating rate assets are generally exposed to cash flow variability from fluctuations in rates.

Loan Origination Portfolio segment

Our Loan Origination investments are exposed to the risks related to interest rate fluctuations discussed above. The table below details our interest rate exposure to this portfolio ($ in thousands):

	December 31, 2013
Floating rate assets(1)	$	2,018,863
Floating rate debt(1)(2)		(1,199,353	)
Net floating rate exposure	$	819,510
Net income impact from 100 bps increase in LIBOR(3)	$	8,195

(1) All values are in terms of face or notional amounts.

(2) Includes borrowings under repurchase facilities and loan participations sold.

(3) Excludes the impact of LIBOR floors on certain of our loans receivable investments.

CT Legacy Portfolio segment

Our investments in CT Legacy Partners and CT CDO I are exposed to the risks related to interest rate fluctuations discussed above. A 100 basis point increase in LIBOR would result in an increase in net income of $170,000 in CT Legacy Partners and $68,000 in CT CDO I, respectively.

Although our carried interest investment in CTOPI generally relates to a portfolio of interest earning assets, our economic interest in this portfolio relates primarily to the realization of investments purchased at a discount by CTOPI. Accordingly, our investment in this portfolio is not exposed to a significant degree of interest rate risk. Refer to Note 9 to our consolidated financial statements for additional discussion of CTOPI.

Risk of Non-Performance

In addition to the risks related to fluctuations in asset values and cash flows 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.

Credit Risks

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

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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 repurchase obligations 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 risk 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, obtain financing from, and enter into hedging agreements with 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 and hedging agreements with high credit quality institutions.

The nature of our loans and investments also expose 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 actively monitoring 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 plan to 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 would substantially reduce our exposure to changes in portfolio value related to changes in foreign currency rates.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by this item and the reports of the independent accountants thereon required by Item 14(a)(2) appear on pages F-2 to F-48. See accompanying Index to the Consolidated Financial Statements on page F-1. The supplementary financial data required by Item 302 of Regulation S-K appears in Note 22 to the consolidated financial statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. 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 Exchange Act as of the end of the period covered by this annual report on Form 10-K was made under the supervision and with the participation of our management, including our Chief

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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 timely recorded, processed, summarized and reported 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

During the quarter ended December 31, 2013, we completed the implementation of a new general ledger and consolidation system. The new system was implemented to increase the overall efficiency of our financial reporting process and not in response to any deficiency or weakness in our internal control over financial reporting. There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a–15(f) and 15d–15(f) under the Exchange Act) that occurred during our most recent quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management of Blackstone Mortgage Trust, Inc. and subsidiaries, or Blackstone Mortgage Trust, is responsible for establishing and maintaining adequate internal control over financial reporting. Blackstone Mortgage Trust’s internal control over financial reporting is a process designed under the supervision of its principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America, or generally accepted accounting principles.

Blackstone Mortgage Trust’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Blackstone Mortgage Trust’s assets that could have a material effect on its financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an assessment of the effectiveness of Blackstone Mortgage Trust’s internal control over financial reporting as of December 31, 2013, based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992. Based on this assessment, management has determined that Blackstone Mortgage Trust’s internal control over financial reporting as of December 31, 2013, was effective.

Deloitte & Touche LLP, an independent registered public accounting firm, has audited Blackstone Mortgage Trust’s financial statements included in this annual report on Form 10-K and issued its report on the effectiveness of Blackstone Mortgage Trust’s internal control over financial reporting as of December 31, 2013, which is included herein.

ITEM 9B. OTHER INFORMATION

None.

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PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated herein by reference to the Company’s definitive proxy statement to be filed not later than April 30, 2014 with the SEC pursuant to Regulation 14A under the Exchange Act.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by reference to the Company’s definitive proxy statement to be filed not later than April 30, 2014 with the SEC pursuant to Regulation 14A under the Exchange Act.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated herein by reference to the Company’s definitive proxy statement to be filed not later than April 30, 2014 with the SEC pursuant to Regulation 14A under the Exchange Act.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed not later than April 30, 2014 with the SEC pursuant to Regulation 14A under the Exchange Act.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is incorporated herein by reference to our definitive proxy statement to be filed not later than April 30, 2014 with the SEC pursuant to Regulation 14A under the Exchange Act.

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PART IV.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) (1)	Financial Statements
	See the accompanying Index to Financial Statement Schedule on page F-1.
(a) (2)	Consolidated Financial Statement Schedules
	See the accompanying Index to Financial Statement Schedule on page F-1.
(a) (3)	Exhibits

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EXHIBIT INDEX

Exhibit Number	Exhibit Description
2.1	Purchase and Sale Agreement, dated September 27, 2012, by and between Capital Trust, Inc. and Huskies Acquisition LLC (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on October 3, 2012 and incorporated herein by reference)
3.1.a	Articles of Amendment and Restatement (filed as Exhibit 3.1.a to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on April 2, 2003 and incorporated herein by reference)
3.1.b	Certificate of Notice (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on February 27, 2007 and incorporated herein by reference)
3.1.c	Articles Supplementary for Series A Junior Participating Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on March 3, 2011 and incorporated herein by reference)
3.1.d	Articles of Amendment (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on December 21, 2012 and incorporated herein by reference)
3.1.e	Articles of Amendment (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 7, 2013 and incorporated herein by reference)
3.1.f	Articles Supplementary (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 29, 2013 and incorporated herein by reference)
3.2	Third Amended and Restated Bylaws of Capital Trust, Inc. (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on December 21, 2012 and incorporated herein by reference)
4.4	Indenture, dated as of November 25, 2013, between Blackstone Mortgage Trust, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on November 25, 2013 and incorporated herein by reference).
4.5	First Supplemental Indenture, dated as of November 25, 2013, between Blackstone Mortgage Trust, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on November 25, 2013 and incorporated herein by reference)
4.6	Form of 5.25% Convertible Senior Note due 2018 (included as Exhibit A in Exhibit 4.5)
10.1	Amended and Restated Management Agreement, dated as of March 26, 2013, by and between Capital Trust, Inc. and BREDS/CT Advisors L.L.C. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on March 26, 2013 and incorporated herein by reference)
10.2	Amendment No. 1 to Amended and Restated Management Agreement, dated as of July 30, 2013, by and between Blackstone Mortgage Trust, Inc. and BXMT Advisors L.L.C. (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.3	Trademark License Agreement, dated May 6, 2013, by and between Blackstone Mortgage Trust, Inc. (f/k/a Capital Trust, Inc.) and Blackstone TM L.L.C. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 7, 2013 and incorporated herein by reference)

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Exhibit Number		Exhibit Description
10.4		Assignment Agreement, dated as of December 19, 2012, by and among Huskies Acquisition LLC, Blackstone Holdings III L.P. and Capital Trust, Inc. (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on December 21, 2012 and incorporated herein by reference)
10.5	+	Capital Trust, Inc. Amended and Restated 1997 Non-Employee Director Stock Plan (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on January 29, 1999 and incorporated herein by reference)
10.6	+	Capital Trust, Inc. 2007 Long-Term Incentive Plan (the “2007 Plan”) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on June 12, 2007 and incorporated herein by reference)
10.7	+	2007 Amendment to the 2007 Plan (filed as Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K (File No. 1-14788) filed on March 5, 2008 and incorporated herein by reference)
10.8	+	Capital Trust, Inc. 2011 Long-Term Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on June 28, 2011 and incorporated herein by reference)
10.9	+	Form of Annual Bonus Award Agreement (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on August 1, 2012 and incorporated herein by reference)
10.10	+	Form of Restricted Share Award Agreement relating to the Capital Trust, Inc. 2011 Long-Term Incentive Plan (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on August 1, 2012 and incorporated herein by reference)
10.11	+	Form of Special Transaction Bonus Award Agreement (filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on August 1, 2012 and incorporated herein by reference)
10.12	+	Blackstone Mortgage Trust, Inc. 2013 Stock Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on July 1, 2013 and incorporated herein by reference)
10.13	+	Form of Restricted Stock Award of Blackstone Mortgage Trust, Inc. 2013 Stock Incentive Plan (filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 29, 2013 and incorporated herein by reference)
10.14	+	Blackstone Mortgage Trust, Inc. 2013 Manager Incentive Plan (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on July 1, 2013 and incorporated herein by reference)
10.15	+	Form of Restricted Stock Award of Blackstone Mortgage Trust, Inc. 2013 Manager Incentive Plan (filed as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 29, 2013 and incorporated herein by reference)
10.16	+	Summary of Non-Employee Director Compensation (filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 29, 2013 and incorporated herein by reference)
10.17		Form of Indemnification Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on December 21, 2012 and incorporated herein by reference)
10.18		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)

82

Exhibit Number	Exhibit Description
10.19	Securities Purchase Agreement, dated as of May 11, 2004, by and among Capital Trust, Inc., W. R. Berkley Corporation and certain stockholders of Capital Trust, Inc. (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 10, 2010 and incorporated herein by reference)
10.20	Registration Rights Agreement dated as of May 11, 2004, by and between Capital Trust, Inc. and W. R. Berkley Corporation (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 11, 2004 and incorporated herein by reference)
10.21	Limited Liability Company Agreement of 42-16 Partners, LLC, dated as of May 13, 2013, by and between Blackstone Mortgage Trust, Inc. and Blackstone Holdings Finance Co. L.L.C. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 17, 2013 and incorporated herein by reference)
10.22	Letter Agreement, dated as of May 13, 2013, by and between Blackstone Mortgage Trust, Inc. and Blackstone Holdings Finance Co. L.L.C. (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on May 17, 2013 and incorporated herein by reference)
10.23	Master Repurchase Agreement, dated as of May 21, 2013, by and between Bank of America, N.A. and Parlex 1 Finance, LLC (filed as Exhibit 10.25 of the Registrant’s Registration Statement on Form S-11 (No. 333-187541) filed on May 22, 2013 and incorporated herein by reference)
10.24	Amendment No. 1 to Master Repurchase Agreement, dated as of September 23, 2013, by and between Bank of America, N.A. and Parlex 1 Finance, LLC (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 29, 2013 and incorporated herein by reference)
10.25	Guarantee Agreement, dated as of May 21, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Bank of America, N.A. (filed as Exhibit 10.26 of the Registrant’s Registration Statement on Form S-11 (No. 333-187541) filed on May 22, 2013 and incorporated herein by reference)
10.26	Amendment No. 1 to Guarantee Agreement, dated as of September 23, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Bank of America, N.A. (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 29, 2013 and incorporated herein by reference)
10.27	Joinder Agreement, dated as of September 23, 2013, by Parlex 1 Finance, LLC, Parlex 3 Finance LLC and Bank of America, N.A. (filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on October 29, 2013 and incorporated herein by reference)
10.28	Master Repurchase and Securities Contract, dated as of June 7, 2013, by and between Wells Fargo Bank, National Association and SVP 2013 Finance, LLC (filed as Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.29	Limited Guarantee Agreement, dated as of June 7, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Wells Fargo Bank, National Association (filed as Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.30	Master Repurchase Agreement, dated as of June 12, 2013, by and between Citibank, N.A. and Parlex 2 Finance, LLC (filed as Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.31	First Amendment to Master Repurchase Agreement, dated as of July 26, 2013, by and between Citibank, N.A., Parlex 2 Finance, LLC, and Blackstone Mortgage Trust, Inc. (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)

83

Exhibit Number		Exhibit Description
10.32		Limited Guaranty, dated as of June 12, 2013, made by Blackstone Mortgage Trust, Inc. in favor of Citibank, N.A. (filed as Exhibit 10.11 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.33		Master Repurchase Agreement, dated as of June 28, 2013, by and between JPMorgan Chase Bank, National Association and Parlex 4 Finance, LLC (filed as Exhibit 10.12 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.34	•	Amendment No. 1 to Master Repurchase Agreement, dated as of December 20, 2013, by and between JPMorgan Chase Bank, National Association and Parlex 4 Finance, LLC
10.35		Guarantee Agreement, dated as of June 28, 2013, made by Blackstone Mortgage Trust, Inc. in favor of JPMorgan Chase Bank, National Association (filed as Exhibit 10.13 to the Registrant’s Quarterly Report on Form 10-Q (File No. 1-14788) filed on July 30, 2013 and incorporated herein by reference)
10.36	•	Master Repurchase Agreement, dated as of December 20, 2013, among JPMorgan Chase Bank, National Association and Parlex 4 UK Finance, LLC and Parlex 4 Finance, LLC
10.37	•	Guarantee Agreement, dated as of December 20, 2013, made by Blackstone Mortgage Trust, Inc. in favor of JPMorgan Chase Bank, National Association
10.38		Agreement of Lease dated as of May 3, 2000, between 410 Park Avenue Associates, L.P., owner, and Capital Trust, Inc., tenant (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K (File No. 1-14788) filed on April 2, 2001 and incorporated herein by reference)
10.39		Additional Space, Lease Extension and First Lease Modification Agreement, dated as of May 23, 2007, by and between 410 Park Avenue Associates, L.P. and Capital Trust, Inc. (filed as Exhibit 10.74 to the Registrant’s Annual Report on Form 10-K (File No. 1-14788) filed on March 5, 2008 and incorporated herein by reference)
10.40		Assignment and Assumption of Lease, dated as of December 19, 2012, by and between Capital Trust, Inc. and Blackstone Holdings I L.P. (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on December 21, 2012 and incorporated herein by reference)
10.41		Consent to Assignment of Lease, and Fifth Lease Modification Agreement, dated December 19, 2012, between 410 Park Avenue Associates, L.P., Blackstone Holdings I L.P. and Capital Trust, Inc. (filed as Exhibit 10.6 to the Registrant’s Current Report on Form 8-K (File No. 1-14788) filed on December 21, 2012 and incorporated herein by reference)
11.1		Statements regarding Computation of Earnings per Share (Data required by Statement of Financial Accounting Standard No. 128, Earnings per Share, is provided in Note 13 to the consolidated financial statements contained in this report)
21.1	•	Subsidiaries of Blackstone Mortgage Trust, Inc.
23.1	•	Consent of Deloitte & Touche LLP
23.2	•	Consent of Ernst & Young LLP
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

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Exhibit Number		Exhibit Description
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 (furnished herewith)
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 (furnished herewith)
99.1	•	Section 13(r) Disclosure
101.INS	++	XBRL Instance 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

+ Represents a management contract or compensatory plan or arrangement.

• Filed herewith.

++ Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of December 31, 2013, 2012, and 2011; (ii) the Consolidated Statements of Operations for the years ended December 31, 2013, 2012, and 2011; (iii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012, and 2011; (iv) the Consolidated Statements of Changes in (Deficit) Equity for the years ended December 31, 2013, 2012, and 2011; (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012, and 2011; and (vi) Notes to Consolidated Financial Statements.

Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, is deemed not “filed” for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

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.

85

SIGNATURES

Pursuant to the requirements of Section 13 or Section 15(d) 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.

February 18, 2014	/s/ Stephen D. Plavin
Date	Stephen D. Plavin Chief Executive Officer (Principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

February 18, 2014 Date	/s/ Michael B. Nash Michael B. Nash Executive Chairman of the Board of Directors
February 18, 2014 Date	/s/ Stephen D. Plavin Stephen D. Plavin Chief Executive Officer and Director (Principal executive officer)
February 18, 2014 Date	/s/ Paul D. Quinlan Paul D. Quinlan Chief Financial Officer (Principal financial officer)
February 18, 2014 Date	/s/ Anthony F. Marone, Jr. Anthony F. Marone, Jr. Principal Accounting Officer
February 18, 2014 Date	/s/ Thomas E. Dobrowski Thomas E. Dobrowski, Director
February 18, 2014 Date	/s/ Martin L. Edelman Martin L. Edelman, Director
February 18, 2014 Date	/s/ Henry N. Nassau Henry N. Nassau, Director
February 18, 2014 Date	/s/ Joshua A. Polan Joshua A. Polan, Director
February 18, 2014 Date	/s/ Lynne B. Sagalyn Lynne B. Sagalyn, Director
February 18, 2014 Date	/s/ John G. Schreiber John G. Schreiber, Director

86

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

Reports of Independent Registered Public Accounting Firms	F-2
Consolidated Balance Sheets as of December 31, 2013 and 2012	F-5
Consolidated Statements of Operations for the Years Ended December 31, 2013, 2012, and 2011	F-7
Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012, and 2011	F-8
Consolidated Statements of Changes in (Deficit) Equity for the years ended December  31, 2013, 2012, and 2011	F-9
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012, and 2011	F-10
Notes to Consolidated Financial Statements	F-12
Schedule IV – Mortgage Loans on Real Estate	S-1

Schedules other than those listed are omitted as they are not applicable or the required or equivalent information has been included in the consolidated financial statements or notes thereto.

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Blackstone Mortgage Trust, Inc.

New York, New York

We have audited the accompanying consolidated balance sheet of Blackstone Mortgage Trust, Inc. and subsidiaries (the “Company”) as of December 31, 2013, and the related consolidated statements of operations, comprehensive income, changes in (deficit) equity, and cash flows for the year then ended. Our audit also included the 2013 information in the financial statement schedule listed in the Index at Item 15(a). The consolidated financial statements of the Company for the years ended December 31, 2012 and 2011, before the effects of the adjustments to retrospectively apply the one-for-ten reverse stock split discussed in Note 13 to the consolidated financial statements, and the 2012 and 2011 information in the financial statement schedule were audited by other auditors whose report, dated March 26, 2013, expressed an unqualified opinion on those statements. We also have audited the Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and financial statement schedule and an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Blackstone Mortgage Trust, Inc. and subsidiaries as of December 31, 2013, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such 2013 information in the financial statement schedule, when considered in relation to the basic 2013 consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited the adjustments to the 2013 consolidated financial statements to retrospectively apply the one-for-ten reverse stock, as discussed in Note 13 to the consolidated financial statements. Our procedures included (1) comparing the amounts shown in the earnings per share disclosures for 2012 and 2011 to the Company’s underlying accounting analysis, (2) comparing the previously reported shares outstanding and income statement amounts per the Company’s accounting analysis to the previously issued consolidated financial statements, and (3) recalculating the amounts to give effect to the reverse stock split and testing the mathematical accuracy of the underlying analysis. In our opinion, such adjustments are appropriate and have been properly

F-2

applied. However, we were not engaged to audit, review, or apply any procedures to the 2012 and 2011 consolidated financial statements of the Company other than with respect to such adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2012 and 2011 consolidated financial statements taken as a whole.

/s/ Deloitte & Touche LLP

New York, New York

February 18, 2014

F-3

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Capital Trust, Inc.

We have audited the accompanying consolidated balance sheet of Capital Trust, Inc. and Subsidiaries (the “Company”) as of December 31, 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in equity (deficit), and cash flows for each of the two years in the period ended December 31, 2012. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2012, and the consolidated results of their operations and their cash flows for each of the two years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

New York, New York

March 26, 2013

F-4

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets

(in thousands, except per share data)

	December 31, 2013			December 31, 2012
Assets
Cash and cash equivalents	$	52,342		$	15,423
Restricted cash		10,096			14,246
Loans receivable, net		2,047,223			141,500
Loans receivable, at fair value		40,665			—
Investment in CT Legacy Asset, at fair value		—			132,000
Equity investments in unconsolidated subsidiaries		22,480			13,306
Accrued interest receivable, prepaid expenses, and other assets		39,974			5,868
Total assets	$	2,212,780		$	322,343
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	$	56,972		$	21,209
Secured notes		—			8,497
Repurchase obligations		1,109,353			—
Convertible notes, net		159,524			—
Securitized debt obligations		40,181			139,184
Participations sold		90,000			—
Total liabilities		1,456,030			168,890
Equity
Class A common stock, $0.01 par value, 100,000 shares authorized, 28,802 and 2,927 shares issued and outstanding as of December 31, 2013 and 2012, respectively		288			293
Restricted class A common stock, $0.01 par value, 700 and zero shares issued and outstanding as of December 31, 2013 and 2012, respectively		7			—
Additional paid-in capital		1,252,986			609,002
Accumulated other comprehensive income		798			—
Accumulated deficit		(536,170	)		(535,851	)
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		717,909			73,444
Non-controlling interests		38,841			80,009
Total equity		756,750			153,453
Total liabilities and equity	$	2,212,780		$	322,343

continued…

See accompanying notes to consolidated financial statements.

F-5

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets

(in thousands)

The following presents the portion of the consolidated balances presented above attributable to consolidated variable interest entities, or VIEs. The following assets may only be used to settle obligations of these consolidated VIEs and these liabilities are only the obligations of consolidated VIEs and their creditors do not have recourse to the general credit of Blackstone Mortgage Trust, Inc.

	December 31, 2013		December 31, 2012
Assets
Loans receivable, net	$	47,000	$	141,500
Accrued interest receivable, prepaid expenses, and other assets		2,836		4,021
Total assets	$	49,836	$	145,521
Liabilities
Accounts payable, accrued expenses, and other liabilities	$	32	$	88
Securitized debt obligations		40,181		139,184
Total liabilities	$	40,213	$	139,272

See accompanying notes to consolidated financial statements.

F-6

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

	Year Ended December 31,
	2013			2012			2011
Income from loans and other investments
Interest and related income	$	53,164		$	34,939		$	117,161
Less: Interest and related expenses		18,017			38,138			96,974
Income (loss) from loans and other investments, net		35,147			(3,199	)		20,187
Other expenses
Management fees		5,937			—			—
General and administrative expenses		11,505			10,369			8,982
Total other expenses		17,442			10,369			8,982
Total other-than-temporary impairments of securities		—			—			(49,309	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		—			(160	)		1,243
Impairment of real estate held-for-sale		—			—			(1,055	)
Net impairments recognized in earnings		—			(160	)		(49,121	)
Recovery of provision for loan losses		—			36,147			19,326
Valuation allowance on loans held-for-sale		1,259			—			(1,456	)
Gain on investments at fair value		7,417			—			—
Fair value adjustment on investment in CT Legacy Asset		—			51,904			—
Gain on deconsolidation of subsidiary		—			200,283			—
Gain on sale of investments		—			6,000			—
Gain on extinguishment of debt		38			—			271,031
Income from equity investments in unconsolidated subsidiaries		—			1,781			3,649
Income before income taxes		26,419			282,387			254,634
Income tax provision		995			174			1,425
Income from continuing operations		25,424			282,213			253,209
Loss from discontinued operations, net of tax		—			(2,138	)		(890	)
Loss on sale of discontinued operations		—			(271	)		—
Net income		25,424			279,804			252,319
Net (income) loss attributable to non-controlling interests		(10,392	)		(98,780	)		5,823
Net income attributable to Blackstone Mortgage Trust, Inc.	$	15,032		$	181,024		$	258,142
Income from continuing operations per share of common stock
Basic	$	0.81		$	78.19		$	114.31
Diluted	$	0.81		$	74.16		$	108.17
Loss from discontinued operations per share of common stock
Basic	$	—		$	(1.03	)	$	(0.39	)
Diluted	$	—		$	(1.03	)	$	(0.39	)
Net income per share of common stock
Basic	$	0.81		$	77.16		$	113.92
Diluted	$	0.81		$	73.13		$	107.78
Weighted-average shares of common stock outstanding
Basic		18,520,052			2,345,943			2,266,043
Diluted		18,520,052			2,475,294			2,395,043

See accompanying notes to consolidated financial statements.

F-7

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

	Year Ended December 31,
	2013			2012			2011
Net income	$	25,424		$	279,804		$	252,319
Other comprehensive income
Unrealized gain on foreign currency remeasurement		798			—			—
Unrealized gain on derivative financial instruments		—			8,367			5,453
Gain on interest rate swaps no longer designated as cash flow hedges		—			2,481			5,038
Amortization of unrealized gains and losses on securities		—			(775	)		(908	)
Amortization of deferred gains and losses on settlement of swaps		—			(56	)		(109	)
Other-than-temporary impairments of securities related to fair value adjustments in excess of expected credit losses, net of amortization		—			688			(326	)
Other comprehensive income		798			10,705			9,148
Comprehensive income		26,222			290,509			261,467
Comprehensive (income) loss attributable to non-controlling interests		(10,392	)		(98,790	)		6,015
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$	15,830		$	191,719		$	267,482

See accompanying notes to consolidated financial statements.

F-8

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in (Deficit) Equity

(in thousands)

	Class A Common Stock			Restricted Class A Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Blackstone Mortgage Trust, Inc. (Deficit) Equity			Non-controlling Interests			Total
Balance at December 31, 2010	$	219		$	—		$	559,411		$	(50,462	)	$	(920,355	)	$	(411,187	)	$	—		$	(411,187	)
Restricted class A common stock earned		1			2			418			—			—			421			—			421
Allocation to non-controlling interests		—			—			37,156			—			—			37,156			(12,623	)		24,533
Purchase of non-controlling interests		—			—			(142	)		—			—			(142	)		—			(142	)
Deferred directors’ compensation		—			—			206			—			—			206			—			206
Other comprehensive income		—			—			—			9,340			—			9,340			(192	)		9,148
Consolidation of additional securitization vehicles		—			—			—			538			(4,898	)		(4,360	)		—			(4,360	)
Net income		—			—			—			—			258,142			258,142			(5,823	)		252,319
Contributions from non-controlling interests		—			—			—			—			—			—			125			125
Distributions to non-controlling interests		—			—			—			—			—			—			(2	)		(2	)
Balance at December 31, 2011	$	220		$	2		$	597,049		$	(40,584	)	$	(667,111	)	$	(110,424	)	$	(18,515	)	$	(128,939	)
Issuance of class A common stock		50			—			9,950			—			—			10,000			—			10,000
Restricted class A common stock earned		6			(2	)		993			—			—			997			—			997
Shares issued upon exercise of warrants		17			—			(17	)		—			—			—			—			—
Deferred directors’ compensation		—			—			1,027			—			—			1,027			—			1,027
Other comprehensive income		—			—			—			10,695			—			10,695			10			10,705
Deconsolidation of subsidiaries		—			—			—			29,889			—			29,889			—			29,889
Net income		—			—			—			—			181,024			181,024			98,780			279,804
Dividends declared on common stock		—			—			—			—			(49,764	)		(49,764	)		—			(49,764	)
Distributions to non-controlling interests		—			—			—			—			—			—			(266	)		(266	)
Balance at December 31, 2012	$	293		$	—		$	609,002		$	—		$	(535,851	)	$	73,444		$	80,009		$	153,453
Issuance of class A common stock		258			—			633,549			—			—			633,807			—			633,807
Adjustment to par value for reverse stock split and charter amendment		(263	)		—			263			—			—			—			—			—
Restricted class A common stock earned		—			7			1,057			—			—			1,064			—			1,064
Issuance of convertible notes		—			—			8,826			—			—			8,826			—			8,826
Deferred directors’ compensation		—			—			289			—			—			289			—			289
Other comprehensive income		—			—			—			798			—			798			—			798
Consolidation of subsidiaries		—			—			—			—			5,727			5,727			6,235			11,962
Net income		—			—			—			—			15,032			15,032			10,392			25,424
Dividends declared on common stock		—			—			—			—			(21,078	)		(21,078	)		—			(21,078	)
Contributions from non-controlling interests		—			—			—			—			—			—			15,000			15,000
Distributions to non-controlling interests		—			—			—			—			—			—			(72,795	)		(72,795	)
Balance at December 31, 2013	$	288		$	7		$	1,252,986		$	798		$	(536,170	)	$	717,909		$	38,841		$	756,750

See accompanying notes to consolidated financial statements.

F-9

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
	2013			2012			2011
Cash flows from operating activities
Net income	$	25,424		$	279,804		$	252,319
Adjustments to reconcile net income to net cash provided by operating activities
Net impairments recognized in earnings		—			160			49,121
Recovery of provision for loan losses		—			(36,147	)		(19,326	)
Valuation allowance on loans held-for-sale		(1,259	)		—			1,456
Gain on investments at fair value		(7,417	)		—			—
Fair value adjustment on investment in CT Legacy Asset		—			(51,904	)		—
Gain on deconsolidation of subsidiary		—			(200,283	)		—
Gain on sale of investments		—			(6,000	)		—
Gain on extinguishment of debt		(38	)		—			(271,031	)
Income from equity investments in unconsolidated subsidiaries		—			(1,781	)		(3,649	)
Distributions of income from unconsolidated subsidiaries		8,795			1,933			1,898
Distributions from CT Legacy Asset		—			9,581			—
Loss on sale of discontinued operations		—			271			—
Non-cash compensation expense		6,242			3,808			3,765
Amortization of premiums/discounts on loans and securities and deferred interest on loans		(6,290	)		(566	)		(1,872	)
Amortization of deferred gains and losses on settlement of swaps		—			(56	)		(109	)
Amortization of deferred financing costs and premiums/discount on debt obligations		4,935			12,133			11,984
Loss on interest rate swaps not designated as cash flow hedges		4			2,772			6,336
Changes in assets and liabilities, net
Accrued interest receivable, prepaid expenses, and other assets		139			(3,019	)		662
Deferred income taxes		—			1,268			(611	)
Accounts payable, accrued expenses, and other liabilities		(1,843	)		(5,206	)		(2,059	)
Net cash provided by operating activities		28,692			6,768			28,884

continued…

See accompanying notes to consolidated financial statements.

F-10

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
	2013			2012			2011
Cash flows from investing activities
Proceeds from Investment Management Business Sale		—			21,424			—
Principal collections and proceeds from securities		416			56,544			94,407
Origination and fundings of loans receivable		(2,327,913	)		—			—
Origination and exit fees received on loans receivable		25,402			—			—
Principal collections and proceeds from the sale of loans receivable		508,302			115,918			2,007,354
Distributions from equity investments		7,151			—			4,345
Contributions to unconsolidated subsidiaries		—			(4,030	)		(3,413	)
Distributions from unconsolidated subsidiaries		—			1,006			3,697
Decrease (increase) in restricted cash		4,151			(1,261	)		(12,985	)
Net cash (used in) provided by investing activities		(1,782,491	)		189,601			2,093,405
Cash flows from financing activities
Repayment and purchase of secured notes		(11,059	)		—			(405	)
Borrowings under repurchase obligations		1,667,623			123,977			—
Repayments under repurchase obligations		(578,484	)		(58,464	)		(314,215	)
Proceeds from issuance of convertible notes		168,415			—			—
Repayment of securitized debt obligations		(98,965	)		(178,945	)		(1,821,498	)
Proceeds from sale of loan participations		90,000			—			—
Borrowings under legacy credit facilities		—			—			83,000
Repayments of legacy credit facilities		—			(63,000	)		(47,572	)
Payment of deferred financing costs		(8,867	)		—			(11,126	)
Settlement of interest rate swaps		(6,123	)		—			—
Contributions from non-controlling interests		15,000			—			125
Purchase of and distributions to non-controlling interests		(72,853	)		(16	)		(144	)
Proceeds from issuance of common stock		633,807			10,000			—
Dividends paid on class A common stock		(7,776	)		(48,960	)		—
Vesting of restricted class A common stock		—			(356	)		(85	)
Net cash provided by (used in) financing activities		1,790,718			(215,764	)		(2,111,920	)
Net increase (decrease) in cash and cash equivalents		36,919			(19,395	)		10,369
Cash and cash equivalents at beginning of period		15,423			34,818			24,449
Cash and cash equivalents at end of period	$	52,342		$	15,423		$	34,818
Supplemental disclosure of cash flows information
Payments of interest	$	(12,702	)	$	(26,363	)	$	(81,697	)
Receipts (payments) of income taxes	$	8		$	(2,747	)	$	(4,799	)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	$	13,302		$	804		$	—
(Consolidation) deconsolidation of subsidiaries	$	(38,913	)	$	371,621		$	572,246

See accompanying notes to consolidated financial statements.

F-11

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements

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 primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., 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 our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries. Our business is organized into two operating segments: the Loan Origination segment and the CT Legacy Portfolio segment.

On April 26, 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected on May 6, 2013, concurrently with a one-for-ten reverse stock split of our class A common stock. Except where the context indicates otherwise, all class A common stock numbers herein have been adjusted to give retroactive effect to the reverse stock split.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and 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 of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

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.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and, therefore, a further disaggregated presentation would not be more meaningful.

Our subsidiary, CT Legacy Partners, LLC, or CT Legacy Partners, accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its

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Notes to Consolidated Financial Statements (continued)

investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and other investments of CT Legacy Partners at fair value on our consolidated balance sheets.

As more fully described in Note 3, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Certain reclassifications have been made in the presentation of the prior-period consolidated financial statements to conform to the current presentation.

Use of Estimates

The preparation of 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 at 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 is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts, and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan 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.

Cash and Cash Equivalents

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

Restricted Cash

We classify the cash balances held by CT Legacy Partners as restricted because, while these cash balances are available for use by CT Legacy Partners for its operations, they cannot be used by us until our allocable share is distributed from CT Legacy Partners and cannot be commingled with any of our other unrestricted cash balances.

Loans Receivable and Provision for Loan Losses

We purchase and originate 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 according 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 to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates,

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Notes to Consolidated Financial Statements (continued)

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 performance of each loan, and assigns a risk rating based on several factors, including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated “1” through “8,” from less risk to greater risk, which ratings are defined as follows:

1  – Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in- place debt yield, and stable projected cash flow.

2  – Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.

3  – Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.

4  – Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.

5  – Low Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 15% probability of default or principal loss.

6  – Medium Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 33% probability of default or principal loss.

7  – High Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 67% or higher probability of default or principal loss.

8  – In Default: A loan which is in contractual default and/or that has a very high likelihood of principal loss.

Loans Held-for-Sale and Related Allowance

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis or fair value, less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statements of operations as a valuation allowance on loans held-for-sale.

Participations Sold

Participations sold represent interests in certain loans that we originated and subsequently sold. In certain instances, we present these participations sold as both assets and non-recourse liabilities because these arrangements do not qualify as sales under GAAP. Generally, participations sold are recorded as assets and liabilities in equal amounts on our consolidated balance sheets, and an equivalent amount of interest income and interest expense is recorded on our consolidated statements of operations.

Equity Investments in Unconsolidated Subsidiaries

Our carried interest in CT Opportunity Partners I, LP, or CTOPI, is accounted for using the equity method. CTOPI’s assets and liabilities are not consolidated into our financial statements due to our determination that

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Notes to Consolidated Financial Statements (continued)

(i) it is not a VIE and (ii) the investors have sufficient rights to preclude consolidation by us. As such, we report our allocable percentage of the net assets of CTOPI on our consolidated balance sheets. We have deferred the recognition of income from CTOPI until cash is collected or appropriate contingencies have been eliminated and, therefore, do not recognize any income from equity investments in unconsolidated subsidiaries.

Deferred Financing Costs

The deferred financing costs that are included in accrued interest receivable, prepaid expenses, and other assets 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.

Repurchase Obligations

We record investments financed with repurchase obligations 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 obligations are reported separately on our consolidated statements of operations.

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or Codification, 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 fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet as of December 31, 2013, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Codification 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.

The “Fair Value Measurement and Disclosures” Topic of the Codification 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.

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Notes to Consolidated Financial Statements (continued)

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 value of each asset recorded 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 assets and liabilities are measured 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 and liabilities that are measured at fair value are discussed further in Note 18. Generally, loans held-for-sale and certain of our loans receivable and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability that was recorded at fair value:

Loans receivable, at fair value – Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value – Our other assets balance includes certain commercial mortgage-backed securities, collateral debt obligations, and equity investments and are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans – Loans identified as impaired are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of 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.

Investment in CT Legacy Asset – We arrived at the fair value of our investment in CT Legacy Asset, LLC, or CT Legacy Asset, by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets.

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Notes to Consolidated Financial Statements (continued)

We are also required by GAAP to disclose fair value information about financial instruments, which is otherwise not reported in the statement of financial position at fair value, to the extent it is practicable to estimate a fair value for those instruments. In cases where quoted market prices are not available, fair values are estimated using discounted cash flow or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents – The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash – The carrying amount of restricted cash approximates fair value.

Loans receivable, net – Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors, including capitalization 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.

Secured notes – These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations – These facilities are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Convertible notes, net – These notes are recorded at their amortized cost and not at fair value. These convertible notes are publicly traded and their fair values are obtained using quoted market prices.

Securitized debt obligations – These obligations are recorded at the face value of outstanding obligations to third parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third-party dealers.

Participations sold – These obligations are recorded at their face value and not at fair value. The fair value was estimated based on the value of the related loan receivable asset.

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 16 for additional information.

Accounting for Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain of its employees that vest over the life of the awards. 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.

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Notes to Consolidated Financial Statements (continued)

Earnings per Share of Common Stock

Basic earnings per share, or Basic EPS, is computed based on the net earnings allocable to common stock and stock units, divided by the weighted-average number of shares of common stock and stock units outstanding during the period. Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to common stock and stock units, divided by the weighted-average number of shares of common stock, stock units and potentially dilutive common stock issued upon conversion of our convertible notes.

We have separately determined Basic EPS and Diluted EPS for income from continuing operations, loss from discontinued operations, and for net income attributable to common stockholders. Refer to Note 13 for additional discussion of earnings per share.

Segment Reporting

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Recent Accounting Pronouncements

In April 2011, the FASB issued Accounting Standards Update, or ASU, 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring,” or ASU 2011-02. ASU 2011-02 primarily clarifies when creditors should classify loan modifications as troubled debt restructurings and provides examples and factors to be considered. Loan modifications that are considered troubled debt restructurings could result in additional disclosure requirements and could affect the related provision for loan losses. ASU 2011-02 was effective for the first interim or annual period beginning after June 15, 2011, with retrospective application to the beginning of the year. The adoption of ASU 2011-02 did not have a material impact on our consolidated financial statements, however, will impact how we account for loan modifications, and may result in an increase in the loan modifications we classify as troubled debt restructurings and, therefore, our provision for loan losses.

In April 2011, the FASB issued ASU 2011-03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 primarily removes certain criteria from the consideration of effective control over assets subject to repurchase agreements. The removal of these criteria will generally result in asset transfers pursuant to repurchase agreements being accounted for as secured borrowings, with both the transferred assets and repurchase liability recorded on the transferor’s balance sheet. ASU 2011-03 was effective for the first interim or annual period beginning after December 15, 2011, and is to be applied prospectively to transactions that occur subsequent to the effective date. The adoption of ASU 2011-03 did not have a material impact on our consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 860): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 amends existing guidance on fair value measurements related to (i) instruments held in a portfolio, (ii) instruments classified within stockholders’ equity, (iii) application of the “highest and best use” concept to nonfinancial assets, (iv) application of blockage factors and other premiums and discounts in the valuation

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Notes to Consolidated Financial Statements (continued)

process, and (v) other matters. In addition, ASU 2011-04 expanded the required disclosures around fair value measurements including (i) reporting the level in the fair value hierarchy used to value assets and liabilities, which are not measured at fair value, but where fair value is disclosed and (ii) qualitative disclosures about the sensitivity of Level 3 fair value measurements to changes in unobservable inputs used. ASU 2011-04 was effective for the first interim or annual period beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on our consolidated financial statements; however, it did expand our disclosures related to fair value measurements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 does not change the items that must be reported in other comprehensive income; however, it eliminates the option to present other comprehensive income on the statement of stockholders’ equity and instead requires either (i) a continuous statement of comprehensive income, which would replace the current statement of operations or (ii) an additional statement of other comprehensive income, which would immediately follow the statement of operations, and would report the components of other comprehensive income. ASU 2011-05 was effective for the first interim or annual period beginning after December 15, 2011, and should be applied retrospectively to all periods reported after the effective date. Our early adoption, as permitted, of ASU 2011-05 as of December 31, 2011 did not have a material impact on our consolidated financial statements, other than the change in presentation of comprehensive income as a separate financial statement.

In January 2013, the FASB issued ASU 2013-01, “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities,” or ASU 2013-01. ASU 2013-01 was developed to clarify which instruments and transactions are subject to the offsetting disclosure requirements set forth by ASU 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” ASU 2013-01 was effective for the first interim or annual period beginning on or after January 1, 2013, and was applied retrospectively for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” or ASU 2013-02. ASU 2013-02 implements the previously deferred requirement to disclose reclassification adjustments into and out of accumulated other comprehensive income in either a note or on the face of the financial statements. ASU 2013-02 was effective for the first interim or annual period beginning after December 15, 2012, and was applied prospectively. As we have not reclassified any balances into or out of accumulated other comprehensive income, the adoption of ASU 2013-02 did not have a material impact on our consolidated financial statements.

In June 2013, the FASB issued ASU 2013-08, “Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” or ASU 2013-08. ASU 2013-08 amends the criteria for qualification as an investment company under Topic 946 of the FASB Accounting Standards Codification, or Topic 946, and requires additional disclosure by investment companies. ASU 2013-08 is effective for the first interim or annual period beginning after December 15, 2013, and is to be applied prospectively. We currently consolidate CT Legacy Partners, which accounts for its operations as an investment company under Topic 946. We do not expect the adoption of ASU 2013-08 to impact CT Legacy Partners’ status as an investment company. Further, because ASU 2013-08 specifically excludes REITs from its scope, it will not otherwise impact our consolidated financial statements.

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Notes to Consolidated Financial Statements (continued)

3. CORPORATE TRANSACTIONS

Blackstone Loan Warehouse Joint Venture

On May 13, 2013, we entered into a joint venture, 42-16 Partners, LLC, or 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was controlled by us and owned 16.7% by us and 83.3% by an affiliate of our Manager, and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate of our Manager using proceeds from the sale of our class A common stock and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary.

CT Legacy Partners Merger

To maintain its tax efficiency, on March 22, 2013, CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, was merged with and into CT Legacy Partners, LLC, or CT Legacy Partners, whereby CT Legacy Partners was the surviving entity. We refer to this transaction as the Merger. As a result of the Merger, all outstanding shares of class A-1 common stock, class A-2 common stock, class B common stock, and class A preferred stock of CT Legacy REIT were converted into limited liability company shares, or LLC Shares, in CT Legacy Partners. These LLC Shares have economic and voting rights equivalent to the corresponding shares of stock of CT Legacy REIT. In addition, all outstanding shares of class B preferred stock of CT Legacy REIT were redeemed on March 21, 2013 for an aggregate of $147,000 in cash, which amount was composed of the shares’ par value, liquidation preference, and accrued dividends thereon.

As a result of the Merger, we have consolidated CT Legacy Partners as of March 22, 2013, and, therefore, the remaining legacy assets and liabilities from our comprehensive debt restructuring on March 31, 2011, which we refer to as our March 2011 Restructuring. As a result of the consolidation, we recorded an increase of $12.0 million in total equity. Refer to Note 8 and Note 13 for further discussion of CT Legacy Partners.

Investment Management Business Sale

On December 19, 2012, pursuant to a purchase and sale agreement, dated as of September 27, 2012, or Purchase Agreement, by and between us and an affiliate of Blackstone, we completed the disposition of our investment management and special servicing business for a purchase price of $21.4 million. The sale included our equity interests in CT Investment Management Co., LLC, or CTIMCO, our related private investment fund co-investments, and 100% of the outstanding class A preferred stock of CT Legacy REIT. We refer to the entire transaction as our Investment Management Business Sale. Pursuant to the terms of the Purchase Agreement, on December 19, 2012, we entered into a management agreement with our Manager, or Management Agreement, which was amended and restated as of March 26, 2013, and further amended on July 30, 2013, pursuant to which we are now managed by our Manager pursuant to the terms and conditions of the Management Agreement. In addition, Blackstone received the right to designate two members of our board of directors, and exercised that right by designating an employee of Blackstone and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012. As a result of the Investment Management Business Sale, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations. Refer to Note 15 for a further discussion of discontinued operations.

On December 19, 2012, we also closed our sale to Blackstone of 500,000 shares of our class A common stock for a purchase price of $10.0 million.

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Notes to Consolidated Financial Statements (continued)

In connection with the consummation of the Investment Management Business Sale and the closing of our sale of 500,000 shares of class A common stock to Blackstone, we paid a $20.00 per share special cash dividend on December 20, 2012, to holders of record of our class A common stock at the close of business on November 12, 2012.

CT CDO Deconsolidation

On December 19, 2012, as a result of the Investment Management Business Sale, we are no longer the collateral manager for certain collateralized debt obligations, or CT CDOs, nor are we the special servicer on their collateral assets. Due to the externalization of these management functions, and our lack of material economic interest in the residual equity we own in CT CDOs II and IV, we ceased to be the primary beneficiary of these entities and, therefore, discontinued the consolidation of CT CDOs II and IV, which we refer to as the CT CDO Deconsolidation. We recognized a gain of $53.9 million on the deconsolidation of CT CDOs II and IV, which was due primarily to the reversal of charges to stockholders’ equity resulting from losses previously recorded in excess of our economic interests in these non-recourse securitization vehicles. Subsequently, in May 2013, we disposed of our residual equity interest in CT CDOs II and IV, which had no impact to our consolidated financial statements.

4. CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED CASH

As discussed in Note 2, we deposit our cash and cash equivalents, including restricted cash, with high credit-quality institutions to minimize credit risk exposure. The following table provides details of our cash and cash equivalents, including restricted cash balances ($ in thousands):

Asset Category	Depository		Credit Rating(1)		December 31, 2013		December 31, 2012
Cash and cash equivalents		Bank of America		A-1	$	52,342	$	15,423
Restricted cash		Bank of America		A-1		10,096		14,246
					$	62,438	$	29,669

(1) Represents the short-term credit rating for the Bank of America, N.A. legal entity as issued by Standard & Poor’s as of December 31, 2013.

5. LOANS RECEIVABLE

As of December 31, 2013, our consolidated balance sheet included $2.0 billion of loans receivable related to our Loan Origination segment and $47.0 million of loans receivable owned by CT CDO I, a consolidated securitization vehicle included in our CT Legacy Portfolio segment. Refer to Note 21 for further discussion of our operating segments.

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Notes to Consolidated Financial Statements (continued)

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

	Gross Book Value			Provision for Loan Losses			Net Book Value
December 31, 2012	$	164,180		$	(22,680	)	$	141,500
Loan originations		2,325,433			—			2,325,433
Additional fundings		2,480			—			2,480
Loan satisfactions		(260,400	)		—			(260,400	)
Partial loan repayments and sales		(141,150	)		—			(141,150	)
Deferred origination fees and expenses		(25,402	)		—			(25,402	)
Amortization of deferred fees and expenses		5,965			—			5,965
Unrealized gain on foreign currency translation		797			—			797
Reclassification to loans held-for-sale		(6,601	)		4,601			(2,000	)
December 31, 2013	$	2,065,302		$	(18,079	)	$	2,047,223

As of December 31, 2013, we had unfunded commitments of $164.3 million related to 15 loans receivable, which amounts will only be funded to finance lease-related or capital expenditures by our borrowers. These future commitments will expire over the next five years.

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

	December 31, 2013			December 31, 2012
Number of loans		31			7
Principal balance	$	2,076,411		$	164,180
Net book value(1)	$	2,047,223		$	141,500
Weighted-average cash coupon(2)		L+4.64	%		L+4.73	%
Weighted-average all-in yield(2)		L+5.26	%		L+4.74	%
Weighted-average maximum maturity (years)(3)		4.1			0.7

(1) The primary differences between the principal balance and net book value are deferred origination fees on loans in our Loan Origination segment, and provisions for loan losses in our CT Legacy Portfolio segment.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013 and 2012; however, certain of our loans receivable earn a minimum LIBOR floor ranging from 0.20% to 1.00%. Amounts exclude all non-performing loans.

(3) Maximum maturity date assumes all extension options are exercised.

The tables below detail the types of loans in our loan portfolio, as well as the property type and geographic distribution of the properties securing these loans ($ in thousands):

	December 31, 2013					December 31, 2012
Asset Type	Net Book Value		Percentage			Net Book Value		Percentage
Senior mortgage loans(1)	$	1,800,329		88	%	$	62,500		44	%
Subordinate loans(2)		246,894		12			79,000		56
	$	2,047,223		100	%	$	141,500		100	%

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	864,666		42	%	$	111,500		79	%
Multifamily		617,464		30			—		—
Hotel		390,492		19			30,000		21
Other		174,601		9			—		—
	$	2,047,223		100	%	$	141,500		100	%
Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
Northeast	$	828,571		40	%	$	27,000		19	%
West		469,262		23			92,500		65
Southeast		243,798		12			12,404		9
Southwest		216,429		11			9,596		7
Northwest		166,207		8			—		—
Midwest		85,708		4			—		—
United Kingdom		37,248		2			—		—
	$	2,047,223		100	%	$	141,500		100	%

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

(2) Includes subordinate interests in mortgages and mezzanine loans.

Loan risk ratings

Quarterly, our Manager evaluates our loan portfolio as described in Note 2. In conjunction with our quarterly loan portfolio review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors, including risk of loss, current LTV, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” (less risk) through “8” (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):

	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		29	$	2,038,863	$	2,020,223		2	$	47,000	$	47,000
4 – 5		—		—		—		2		92,500		92,500
6 – 8		2		37,548	$	27,000		3		24,680		2,000
		31	$	2,076,411	$	2,047,223		7	$	164,180	$	141,500

In making this risk assessment, one of the primary factors we consider is how senior or junior each loan is relative to other debt obligations of the borrower.

F-23

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

The following tables further allocate our loans receivable by loan type and our internal risk ratings ($ in thousands):

	Senior Mortgage Loans(1)
	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		26	$	1,811,514	$	1,800,329		—	$	—	$	—
4 – 5		—		—		—		1		62,500		62,500
		26	$	1,811,514	$	1,800,329		1	$	62,500	$	62,500

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

	Subordinate Loans(1)
	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		3	$	227,350	$	219,894		2	$	47,000	$	47,000
4 – 5		—		—		—		1		30,000		30,000
6 – 8		2		37,548		27,000		3		24,680		2,000
		5	$	264,898	$	246,894		6	$	101,680	$	79,000

(1) Includes subordinate interests in mortgages and mezzanine loans.

Loan impairments

We do not have any loan impairments in our Loan Origination segment. As of December 31, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one impaired subordinate interest in a mortgage loan with a gross book value of $10.5 million that is delinquent on its contractual payments. We have taken a 100% loan loss reserve on this loan.

As of December 31, 2012, consolidated securitization vehicles in our CT Legacy Portfolio segment had one impaired subordinate interest in a mortgage loan with a gross book value of $7.5 million that was current in its interest payments and two impaired subordinate interest in a mortgage loans with a combined gross book value of $17.1 million that were delinquent on their contractual payments. We had an aggregate 92% loan loss reserve on these loans resulting in a net book value of $2.0 million.

Generally, we have recorded loan loss reserves for loans that are in maturity default or otherwise have past-due principal payments. As of December 31, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one loan with a net book value of $27.0 million, which was in maturity default but had no reserve recorded. We expect to collect all principal and interest due under this loan. We do not have any loans in maturity default or with past-due principal payments in our Loan Origination segment.

There was no income recorded on impaired loans during the year ended December 31, 2013. We recorded $290,000 of income on impaired subordinate interests in mortgage loans owned by CT CDO I that had an average net book value of $2.8 million during the year ended December 31, 2012. Substantially all income recorded on impaired loans during the prior period was received in cash.

F-24

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Nonaccrual loans

We do not have any nonaccrual loans in our Loan Origination segment. CT CDO I, which is in our CT Legacy Portfolio segment, had one subordinate interest in a mortgage loan on nonaccrual status with a principal balance of $10.5 million and a net book value of zero as of December 31, 2013. Consolidated securitization vehicles in our CT Legacy Portfolio segment had three subordinate interests in mortgages on nonaccrual status with an aggregate principal balance of $24.7 million and an aggregate net book value of $2.0 million as of December 31, 2012. In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans that are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. Accordingly, we did not have any material interest receivable accrued on nonperforming loans as of December 31, 2013 or 2012.

6. LOANS HELD-FOR-SALE

Activity relating to our loans held-for-sale was ($ in thousands):

	Gross Book Value			Valuation Allowance			Net Book Value
December 31, 2012	$	—		$	—		$	—
Reclassification from loans receivable		6,601			(4,601	)		2,000
Valuation allowance on loans held-for-sale		—			1,259			1,259
Loans sold		(6,601	)		3,342			(3,259	)
December 31, 2013	$	—		$	—		$	—

During the first quarter of 2013, we reclassified a $6.6 million subordinate mortgage loan and its related $4.6 million provision for loan losses to loans held-for-sale. We subsequently sold this loan and recorded a $1.3 million valuation adjustment to reflect the position at its fair value based on the proceeds received from the sale. We did not have any loans classified as held-for-sale as of December 31, 2013 and 2012.

7. LOANS RECEIVABLE, AT FAIR VALUE

We record CT Legacy Partners’ loans receivable investments at fair value, which are determined using internal financial model-based estimations. The CT Legacy Partners loans receivable portfolio included seven loans with an aggregate principal balance of $145.3 million, which were reported at their aggregate fair value of $40.7 million as of December 31, 2013. As of December 31, 2012, there were no loans receivable at fair value because we accounted for the CT Legacy Partners’ portfolio on a non-consolidated basis. Refer to Note 3 and Note 8 for additional discussion of CT Legacy Partners. Refer to Note 18 for additional disclosure regarding fair value and Note 21 for an allocation of our loans receivable between our operating segments.

Activity relating to our loans receivable, at fair value was ($ in thousands):

December 31, 2012	$	—
Consolidation of CT Legacy Partners		150,332
Capitalized interest		984
Loan satisfactions		(110,347	)
Partial loan repayments		(307	)
Gain on investments at fair value		6,816
Reclassification to other assets		(6,813	)
December 31, 2013	$	40,665

F-25

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

The following table details overall statistics for CT Legacy Partners’ loans receivable, which were held at fair value as of December 31, 2013 ($ in thousands):

	Loans Receivable, at Fair Value
	Floating Rate			Fixed Rate			Total
Number of loans		4			3			7
Net book value	$	16,990		$	23,675		$	40,665
Weighted-average cash coupon(1)		L+4.26	%		8.14	%		6.24	%
Weighted-average all-in yield(1)		L+4.26	%		8.14	%		6.24	%
Weighted-average maximum maturity (years)(2)		0.9			0.8			0.9

(1) All floating rate loans were indexed to LIBOR as of December 31, 2013, however, one of our loans receivable earns interest based on a minimum LIBOR floor of 2.00%. Rates exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

The tables below detail the types of loans in CT Legacy Partners’ loan portfolio, as well as the property type and geographic distribution of the properties securing these loans ($ in thousands):

	December 31, 2013
Asset Type	Fair Value		Percentage
Senior mortgages	$	14,990		37	%
Subordinate loans(1)		25,675		63
	$	40,665		100	%
Property Type	Fair Value		Percentage
Office	$	25,675		63	%
Hotel		14,990		37
	$	40,665		100	%
Geographic Location	Fair Value		Percentage
Northeast	$	25,675		63	%
West		14,990		37
	$	40,665		100	%

(1) Comprised entirely of mezzanine loans as of December 31, 2013.

Nonaccrual loans

In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans that are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. We do not have any material interest receivable accrued on nonperforming loans as of December 31, 2013. As of December 31, 2013, we had three loans on nonaccrual status with an aggregate principal balance of $98.3 million, each of which had a fair value of zero.

F-26

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

8. INVESTMENT IN CT LEGACY ASSET, AT FAIR VALUE

As a result of the merger effective on March 22, 2013, we began consolidating CT Legacy Partners and its subsidiary, CT Legacy Asset. Previously, we accounted for CT Legacy Asset on a non-consolidated basis, and as of December 31, 2012, our consolidated balance sheet included a net investment in CT Legacy Asset of $132.0 million. We had elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset due to our determination that the fair value of the investment in CT Legacy Asset, as a net liquidating portfolio of assets, was more meaningful and indicative of our interests in CT Legacy Asset than equity method accounting. Following its consolidation, the loans receivable and repurchase obligations of CT Legacy Partners, as well as its other assets and liabilities, are included in our consolidated balance sheet. Refer to Note 3 for additional discussion of the consolidation of CT Legacy Partners and Note 5 and Note 10 for further discussion of CT Legacy Partners’ loans receivable and repurchase obligation, respectively.

CT Legacy Partners

CT Legacy Partners holds a portion of our legacy portfolio, which we had previously transferred to CT Legacy REIT (the predecessor of CT Legacy Partners) in connection with our March 2011 Restructuring. CT Legacy Partners is beneficially owned 52% by us and 48% by our former lenders. In addition, CT Legacy Partners has issued class B common shares, a subordinate class of equity that entitles its holders to receive approximately 25% of the dividends that would otherwise be payable to us on our equity interest in CT Legacy Partners, after aggregate cash distributions of $50.0 million have been paid to all other classes of common equity. Further, CT Legacy Partners has issued class A preferred shares that entitle their holder to cumulative preferred distributions in an amount generally equal to the greater of (i) 2.5% of certain of CT Legacy Partners’ assets, and (ii) $1.0 million per annum.

Our equity interest in CT Legacy Partners is composed of 4,393,750 class A-1 common shares, 775,000 class

A-2 common shares, and 118,651 class B common shares. The outstanding common shares of CT Legacy Partners are composed of 4.4 million class A-1 common shares, 5.6 million class A-2 common shares, and 1.5 million class B common shares. The equity interests of other members of CT Legacy Partners are reflected as non-controlling interests on our consolidated balance sheets.

9. EQUITY INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

As of December 31, 2013, our equity investment in unconsolidated subsidiaries consisted solely of our carried interest in CTOPI, a fund sponsored and managed by CTIMCO. Historically, this balance has also included our co-investments in investment management vehicles that were sponsored and managed by CTIMCO. As described in Note 3, we sold two such co-investments to an affiliate of Blackstone in December 2012 in conjunction with our Investment Management Business Sale; however, we retained 100% of our carried interest in CTOPI.

Activity relating to our equity investments in unconsolidated subsidiaries was ($ in thousands):

	CTOPI Carried Interest
Total as of December 31, 2012	$	13,306
Distributions(1)		(8,795	)
Incentive income allocation(2)		17,969
Total as of December 31, 2013	$	22,480

(1) Represents an $8.8 million tax advance cash distribution received to satisfy our income tax obligation related to the allocation of taxable

F-27

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

income in respect of our carried interest in CTOPI. Our total allocation of carried interest from CTOPI is net of $10.2 million of aggregate tax advance cash distributions.

(2) We have deferred the recognition of incentive income allocated to us from CTOPI in respect of our carried interest in CTOPI, and recorded an offsetting liability as a component of accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

Our carried interest in CTOPI entitles us to earn incentive compensation in an amount equal to 17.7% of the fund’s profits, after a 9% preferred return and 100% return of capital to the CTOPI partners. As of December 31, 2013, we had been allocated $32.6 million of incentive compensation from CTOPI based on a hypothetical liquidation of the fund at its net asset value.

Accordingly, we have recognized this allocation as an equity investment in CTOPI on our consolidated balance sheets; however, we have deferred the recognition of income until cash is collected or appropriate contingencies have been eliminated.

The CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. We refer to these distributions as CTOPI Tax Advances. We received CTOPI Tax Advances of $8.8 million during 2013 and $1.4 million during 2012, both of which reduced our equity investment in CTOPI. As a result, our net investment in the CTOPI carried interest has a book value of negative $10.2 million, the amount of cumulative CTOPI Tax Advances received as of December 31, 2013. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these CTOPI Tax Advances to the fund. As of December 31, 2013, our maximum exposure to loss from CTOPI was $10.2 million, the aggregate amount of CTOPI Tax Advances we have received from CTOPI.

CTOPI Incentive Management Fee Grants

In January 2011, we created a management compensation pool for employees equal to 45% of the CTOPI incentive management fee received by us. As of December 31, 2013, we had granted 96% of the pool, and the remainder was unallocated. If any awards remain unallocated at the time incentive management fees are received by us, any amounts otherwise payable to the unallocated awards will be distributed pro rata to the plan participants then employed by an affiliate of our Manager.

Approximately 65% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) one-third on the date of grant; (ii) one-third on September 13, 2012; and (iii) the remainder upon our receipt of incentive management fees from CTOPI. Of the remaining 35% of these grants, 31% are fully vested as a result of an acceleration event, and 4% vest solely upon our receipt of incentive management fees from CTOPI or the disposition of certain investments owned by CTOPI.

10. DEBT OBLIGATIONS

Secured Notes

In October 2013, we received a $36.2 million distribution from CT Legacy Partners in respect of our common equity interests, the majority of which served as collateral under our secured notes. Accordingly, we repaid these notes in full, and recognized a $2.0 million prepayment penalty as a component of interest expense. We therefore had no secured notes outstanding as of December 31, 2013.

F-28

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Repurchase Facilities

During 2013, we entered into four revolving repurchase facilities and four asset-specific repurchase agreements, providing an aggregate $1.9 billion of credit. As of December 31, 2013, we had aggregate borrowings of $1.1 billion outstanding under repurchase facilities, with a weighted-average cash coupon of LIBOR plus 2.12% per annum and a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.39% per annum. As of December 31, 2013, these facilities had a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.4 years.

The following table details the repurchase obligations outstanding as of December 31, 2013 ($ in thousands):

			Collateral Assets				Repurchase Borrowings(3)
Lender	Maximum Facility Size(1)		Principal Balance(2)		Net Book Value(2)		Potential		Current		Available
Revolving Repurchase Facilities
Bank of America	$	500,000	$	355,981	$	352,995	$	280,500	$	271,320	$	9,180
Citibank		500,000		613,339		609,236		460,765		334,692		126,073
JP Morgan(4)		614,525		442,035		439,706		340,912		257,610		83,302
Subtotal		1,614,525		1,411,355		1,401,937		1,082,177		863,622		218,555
Asset-Specific Repurchase Agreements
Wells Fargo(5)		288,354		334,857		333,418		245,731		245,731		—
Total	$	1,902,879	$	1,746,212	$	1,735,355	$	1,327,908	$	1,109,353	$	218,555

(1) Maximum facility size represents the total amount of borrowings provided for in each repurchase agreement, however these borrowings are only available to us once sufficient collateral assets have been pledged under each facility.

(2) The difference between principal balance and net book value of collateral assets is due to deferred origination fees.

(3) Potential borrowings represent 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 revolving credit facility.

(4) The JP Morgan maximum facility size is composed of a $250.0 million facility, a £153.0 million ($252.5 million) facility, and $112.0 million related solely to a specific asset with a repurchase date of June 27, 2014.

(5) Represents an aggregate of four asset-specific repurchase agreements with Wells Fargo.

On December 30, 2013, we entered into a $34.9 million, asset-specific, repurchase agreement with Wells Fargo with an initial maturity date of March 30, 2014, which may be extended for a period of three months. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.00%. This repurchase agreement is an interim financing of one loan, which is expected to be the initial collateral for a future revolving facility with Wells Fargo. We guarantee 100% of the obligations under this repurchase agreement.

On December 20, 2013, we entered into a $252.5 million, or £153.0 million, master repurchase agreement with JP Morgan. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 3.25% depending on the attributes of the collateral loans. Individual advances can be made at any time prior to the maturity date of December 20, 2016. Obligations under this repurchase agreement are not recourse to us, except that we guarantee up to 25% of the advances related to senior mortgage collateral and 100% of the advances related to mezzanine and junior mortgage collateral.

F-29

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

On July 30, 2013, we entered into a $59.8 million, asset-specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.25%. The initial maturity date of the facility is August 8, 2015, which may be extended pursuant to three one-year extension options, each of which may be exercised by us. We do not guarantee the obligations under this repurchase agreement other than in the case of customary “bad-boy” events.

On July 8, 2013, we entered into a $32.0 million, asset-specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 3.50%. The initial maturity date of the facility is February 9, 2014, which may be extended pursuant to a one-year extension option, which may be exercised by us. We do not guarantee the obligations under this repurchase agreement other than in the case of customary “bad-boy” events.

On June 28, 2013, we entered into a $250.0 million master repurchase agreement with JP Morgan. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 3.25% depending on the attributes of the collateral loans. The repurchase agreement specifies a one-year availability period, during which new advances can be made and which availability period is renewable at the discretion of JP Morgan. Maturity dates for individual advances are tied to their respective collateral loan maturity dates subject to annual renewal at our discretion. In the event that the availability period is not renewed, it is followed by a two-year ‘stabilization’ period and then a ‘term out’ period, during which all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. Obligations under this repurchase agreement are not recourse to us, except that we guarantee up to 25% of the advances related to senior mortgage collateral and 100% of the advances related to mezzanine and junior mortgage collateral. On September 30, 2013, we entered into an agreement with JP Morgan to advance $112.0 million under the facility related to a specific asset and to increase the maximum facility size by the amount of that advance, which matures in June 2014.

On June 12, 2013, we entered into a $250.0 million master repurchase agreement with Citibank. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 2.25% depending on the attributes of the collateral loans. The initial facility expiration date is June 12, 2016, which may be extended annually by us. If upon the initial facility expiration date, Citibank does not extend the facility availability period, in its sole discretion, then no new advances may be drawn and all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. In either case, individual advances mature upon the maturity date of the respective collateral maturity dates. We guarantee up to 25% of the advances under this facility. Otherwise, obligations under this repurchase agreement are not recourse to us. On July 26, 2013, we amended our master repurchase agreement with Citibank to provide for a second $250.0 million tranche of potential advances. The second tranche is subject to a one-year ‘availability period,’ during which new financing transactions can be initiated. All other terms, including maturity dates, for the second tranche advances are the same as the original $250.0 million tranche.

On June 7, 2013, we entered into a $250.0 million, asset-specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.50%. The initial maturity date of the facility is June 7, 2016, which may be extended pursuant to (i) two one-year extension options, each of which may be exercised by us, and (ii) an additional one-year extension option, contingent upon notice regarding the failure of the collateral mortgage loan to be repaid at its final maturity. We do not guarantee the obligations under this repurchase agreement other than in the case of customary “bad-boy” events.

On May 21, 2013, we entered into a $250.0 million master repurchase agreement with Bank of America. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a

F-30

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

margin of between 1.75% and 3.25% depending on the attributes of the collateral loans. The initial maturity date of the facility is May 21, 2016, subject to two one-year extension options, each of which may be exercised by us. Obligations under this repurchase agreement are not recourse to us, except that we guarantee up to 50% of the advances related to senior collateral and 100% of the advances related to mezzanine and junior mortgage collateral. On September 23, 2013, we amended our master repurchase agreement with Bank of America to provide for an additional $250.0 million of potential advances. All of the terms of the additional potential advances, including maturity dates, are the same as the original $250.0 million.

Each of the guarantees related to our master repurchase agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges shall be not less than 1.40 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $525.0 million plus 75% of the net cash proceeds of future equity issuances; (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 80% of our total assets. As of December 31, 2013, we were in compliance with these covenants.

The weighted-average outstanding repurchase obligation balance for the year ended December 31, 2013, was $356.4 million.

Repurchase Obligations – CT Legacy Partners

As of March 31, 2013, CT Legacy Partners was party to a repurchase facility with JP Morgan with an outstanding balance of $20.2 million. On June 5, 2013, CT Legacy Partners repaid the outstanding balance and terminated the repurchase facility. CT Legacy Partners has no outstanding debt obligations as of December 31, 2013.

Convertible notes, net

In November 2013, we issued $172.5 million of 5.25% convertible senior notes due on December 1, 2018, or Convertible Notes. The Convertible Notes’ issuance costs are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cost of the Convertible Notes is 5.87% per annum.

The Convertible Notes are convertible, at the holders’ option, into shares of our class A common stock at any time prior to the close of business on the business day immediately preceding September 1, 2018, subject to certain limitations, 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. The conversion rate is initially set to equal 34.8943 shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $28.66 per share of class A common stock, subject to adjustment upon the occurrence of certain events. We may not redeem the Convertible Notes prior to maturity.

We recorded a $9.1 million discount upon issuance of the Convertible Notes based on the implied value of the conversion option and an effective interest rate of 6.50%. Including the amortization of this discount and the issuance costs, our total cost of the Convertible Notes is 7.16% per annum. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

F-31

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Securitized Debt Obligations

The balances of each of our consolidated securitization vehicles’ outstanding securitized debt obligations, their respective coupons and all-in effective costs, including the amortization of fees and expenses, were as follows ($ in thousands):

	December 31, 2013				December 31, 2012		December 31, 2013
Non-Recourse Securitized Debt Obligations	Principal Balance		Book Value		Book Value		Coupon(1)			All-In Cost(1)			Maturity Date(2)
CT CDO I	$	40,181	$	40,181	$	91,131		L+2.23	%		L+2.23	%		July 2039
GSMS 2006-FL8A		—		—		48,053		—			—			N/A
	$	40,181	$	40,181	$	139,184		L+2.23	%		L+2.23	%		July 2039

(1) Represents a weighted-average for the facility. All non-recourse securitization obligations are floating rate obligations indexed to LIBOR as of December 31, 2013.

(2) Maturity date represents the contractual maturity of the securitization vehicle. Repayment of securitized debt is a function of collateral cash flows, which are disbursed in accordance with the contractual provisions of the vehicle, and is generally expected to occur prior to the maturity date above.

As of December 31, 2013, loans receivable with an aggregate book value of $47.0 million served as collateral for the non-recourse debt and equity securities issued by our consolidated securitizations vehicles. As of December 31, 2012, loans receivable with an aggregate book value of $141.5 million served as collateral for the securities issued by these same vehicles.

Our consolidated securitization vehicle, CT CDO I, is subject to interest coverage and overcollateralization tests which, when breached, provide for hyperamortization of the senior notes by a redirection of cash flow that would otherwise have been paid to the subordinate classes, some of which are owned by us. Furthermore, CT CDO I provides for the reclassification of interest proceeds from impaired collateral as principal proceeds, which also serve to hyperamortize the senior notes sold. As a result of collateral asset impairments and the related breaches of these interest coverage and overcollateralization tests, we currently do not receive any cash payments from CT CDO I.

11.    PARTICIPATIONS SOLD

Participations sold represent interests in certain loans that we originated and subsequently sold. In certain instances, we present these participations sold as both assets and non-recourse liabilities because these arrangements do not qualify as sales under GAAP. As of December 31, 2013, we had one such participation sold with a book balance of $90.0 million at a cash coupon of LIBOR plus 5.12% and a weighted-average yield of LIBOR plus 5.26%. The income earned on this loan is recorded as interest income and an identical amount is recorded as interest expense on our consolidated statements of operations.

12. DERIVATIVE FINANCIAL INSTRUMENTS

As of and during the year ended December 31, 2013, we were not party to any derivative financial instruments. However, our consolidated subsidiary, CT Legacy Partners, was party to five interest rate swaps which it terminated in June 2013. A gain of $136,000 resulting from the termination is included as a component of interest expense on our consolidated statements of operations for the year ended December 31, 2013. CT Legacy Partners is no longer party to any derivative financial instruments as of December 31, 2013.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

13. EQUITY

Balance Sheet Activity

Total equity increased $603.3 million during the year ended December 31, 2013 to $756.8 million. This increase was primarily driven by the issuance of additional shares of our class A common stock in our May 2013 equity offering. See below for further discussion on the share issuance.

Accumulated Other Comprehensive Loss

As of and during the year ended December 31, 2013, total accumulated other comprehensive income was $798,000 representing the currency translation adjustment on assets denominated in a foreign currency. The following table details the primary components of accumulated other comprehensive loss as of, and for the years ended, December 31, 2012 and 2011($ in thousands):

Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2010	$	(37,914	)	$	165		$	(16,800	)	$	4,087		$	(50,462	)
Consolidation of additional securitization vehicles(1)		—			—			538			—			538
Unrealized gain on derivative financial instruments		5,453			—			—			—			5,453
Ineffective portion of cash flow hedges(2)		5,038			—			—			—			5,038
Amortization of net unrealized gains on securities		—			—			—			(908	)		(908	)
Amortization of net deferred gains on settlement of swaps		—			(109	)		—			—			(109	)
Other-than-temporary impairments of securities(3)		—			—			(326	)		—			(326	)
Allocation to non-controlling interest		—			—			10			182			192
Total as of December 31, 2011		(27,423	)		56			(16,578	)		3,361			(40,584	)
Unrealized gain on derivative financial instruments		8,367			—			—			—			8,367
Ineffective portion of cash flow hedges(4)		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(775	)		(775	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities(3)		—			—			678			—			678
Deconsolidation of subsidiaries(5)		16,575			—			15,900			(2,586	)		29,889
Total as of December 31, 2012	$	—		$	—		$	—		$	—		$	—

(1) We began consolidating an additional securitization vehicle in the third quarter of 2011, which was previously accounted for as part of our legacy securities portfolio. This security had previously been other-than-temporarily impaired, a portion of which was recorded in accumulated other comprehensive income, and was therefore eliminated in consolidation.

(2) As a result of significant floating rate debt obligation repayments, a portion of our legacy portfolio interest rate swaps was deemed ineffective in the second quarter of 2011 and these were no longer designated as

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

hedging instruments. As a result, a portion of accumulated other comprehensive income was reclassified into earnings each period to reflect the non-hedge designation.

(3) Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments.

(4) As a result of the deconsolidation of CT Legacy Asset in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Asset was reclassified to interest expense.

(5) As further described in Note 1, we deconsolidated various subsidiaries during 2012. As a result, the balances of accumulated other comprehensive income related to these subsidiaries are no longer included in our consolidated financial statements.

Non-controlling Interests

The non-controlling interests included on our consolidated balance sheets represent the equity interests in CT Legacy Partners that are not owned by us, as described in Note 8. CT Legacy Partners’ outstanding common stock includes class A-1 common shares, class A-2 common shares, and subordinate class B common shares. A portion of CT Legacy Partners’ consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of CT Legacy Partners.

The following table details the components of non-controlling interests in CT Legacy Partners ($ in thousands):

	December 31, 2013
Restricted cash	$	10,096
Loans receivable, at fair value		40,665
Accrued interest receivable, prepaid expenses, and other assets		16,118
Accounts payable, accrued expenses, and other liabilities		(378	)
CT Legacy Partners equity	$	66,501
Equity interests owned by Blackstone Mortgage Trust, Inc.		(27,660	)
Non-controlling interests in CT Legacy Partners	$	38,841

In October and November of 2013, CT Legacy Partners made aggregate distributions totaling $100.0 million to its class A-1, class A-2, and class B common stockholders, including $46.6 million to us and $53.4 million to the non-controlling stockholders.

Share and Share Equivalents

Authorized Capital

We have the authority to issue up to 200,000,000 shares of stock, consisting of 100,000,000 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.

Reverse Stock Split

On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. As a result of the reverse stock split, the number of outstanding shares of our class A common stock was reduced to 2,926,651. In addition, there was a reclassification of $263,000 from the par value of our class A common stock to additional paid-in capital to reflect the impact of the reverse stock split.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

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, subject to the voting rights of any outstanding shares of preferred stock. Holders of record of shares of our class A common stock on the record date fixed by our board of directors are entitled to receive such dividends as may be authorized by our board of directors and declared by us, subject to the rights of the holders of any shares of outstanding preferred stock. On May 29, 2013, we issued 25,875,000 shares of class A common stock at a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses.

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.

A total of 29,602,884 shares of class A common stock, restricted class A common stock, and stock units were issued and outstanding as of December 31, 2013.

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

	Year Ended December 31,
Common Stock Outstanding(1)(2)(3)	2013		2012		2011
Beginning balance		3,016,407		2,277,344		2,243,490
Issuance of class A common stock		25,875,000		669,047		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		700,000		36,493		26,161
Issuance of deferred stock units		11,477		33,523		7,693
Ending balance		29,602,884		3,016,407		2,277,344

(1) Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2) Deferred stock units held by members of our board of directors totalled 101,233, 89,754, and 56,234 as of December 31, 2013, 2012, and 2011, respectively.

(3) Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Preferred Stock

We have not issued any shares of preferred stock since we repurchased all of our previously issued and outstanding preferred stock in 2001.

Dividends

We generally intend to distribute each year substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

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.

During 2013, we declared dividends of $21.1 million, or $0.72 per share, to class A common stockholders. During 2012, we declared a special dividend of $49.8 million, or $20.00 per share. No dividends were declared during 2011.

Earnings Per Share

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 for the indicated periods ($ in thousands, except per share data):

	Year Ended December 31,
	2013		2012		2011
Net income	$	15,032	$	181,024	$	258,142
Weighted-average shares outstanding(1)		18,520,052		2,345,943		2,266,043
Warrants and options outstanding for the purchase of class A common stock(2)		—		129,351		129,000
Weighted-average shares outstanding, diluted		18,520,052		2,475,294		2,395,043
Per share amount, basic	$	0.81	$	77.16	$	113.92
Per share amount, diluted	$	0.81	$	73.13	$	107.78

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split we effected as of May 6, 2013. See above for further discussion.

(2) As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

Refer to Note 21 for the allocation of our results of operations for each of our operating segments.

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

	Year Ended December 31,
	2013			2012			2011
Income from continuing operations	$	25,424		$	282,213		$	253,209
Net income attributable to non-controlling interests		(10,392	)		(98,780	)		5,823
Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.		15,032			183,433			259,032
Weighted-average shares outstanding(1)		18,520,052			2,345,943			2,266,043
Warrants and options outstanding for the purchase of class A common stock(2)		—			129,351			129,000
Weighted-average shares outstanding, diluted		18,520,052			2,475,294			2,395,043
Per share amount, basic	$	0.81		$	78.19		$	114.31
Per share amount, diluted	$	0.81		$	74.16		$	108.17

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

(2) As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

14. OTHER EXPENSES

Our other expenses consist of the management fees we incur as a result of the Management Agreement with our Manager and general and administrative expenses.

Management Fees

In conjunction with the Investment Management Business Sale, we entered into a new management agreement with our Manager, which was amended and restated as of March 26, 2013, and further amended on July 30, 2013, pursuant to which our Manager earns a base management fee in an amount equal to the greater of (i) $250,000 per annum and (ii) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the Management Agreement with our Manager. 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 the Management Agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) 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 (or the period since the date of the first offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio. Our Manager has determined, and a majority of our independent directors has approved, the exclusion from Core Earnings of the amortization of the deemed issue discount on our convertible notes resulting from the conversion option value accounting under GAAP.

During the year ended December 31, 2013, we incurred $5.9 million of management fees payable to our Manager. We did not incur any incentive fees payable to our Manager during the year ended December 31, 2013.

General and Administrative Expenses

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

	Year Ended December 31,
	2013		2012		2011
Professional services	$	2,441	$	895	$	2,210
Operating and other costs		1,971		1,732		2,283
Transaction costs – investment management sale(1)		—		3,870		—
		4,412		6,497		4,493
Non-cash compensation expenses
Management incentive awards plan – CT Legacy Partners(2)		4,915		2,232		3,054
Director stock-based compensation		263		223		206
Employee stock-based compensation		1,064		1,353		505
		6,242		3,808		3,765
Expenses of consolidated securitization vehicles		851		64		724
	$	11,505	$	10,369	$	8,982

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

(1) See Note 1 for discussion of the Investment Management Business Sale.

(2) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See below for discussion of the CT Legacy Partners management incentive awards plan.

As a result of our Investment Management Business Sale, the operating expenses related to our investment management business have been reclassified to income (loss) from discontinued operations on our consolidated statements of operations. Refer to Note 3 for further discussion of the Investment Management Business Sale.

CT Legacy Partners Management Incentive Awards Plan

In conjunction with our March 2011 Restructuring, we created an employee pool for up to 6.75% of the distributions paid to the common equity holders of CT Legacy Partners (subject to certain caps and priority distributions). As of December 31, 2013, incentive awards for 92% of the pool have been granted, and the remainder was unallocated. If any awards remain unallocated at the time distributions are paid, any amounts otherwise payable to the unallocated awards will be distributed pro rata to the plan participants then employed by an affiliate of our Manager.

Approximately 54% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) 25% vests on the date of grant; (ii) 25% vests in March 2013; (iii) 25% vests in March 2014; and (iv) the remainder vests upon our receipt of distributions from CT Legacy Partners. Of the remaining 46% of these grants, 28% are fully vested as a result of an acceleration event, and 18% vest only upon our receipt of distributions from CT Legacy Partners.

We accrue a liability for the amounts due under these grants based on the value of CT Legacy Partners and the periodic vesting of the awards granted. During 2013, we made payments of $7.6 million under the CT Legacy Partners incentive plan, which resulted in the recognition of compensation expenses of $2.0 million related to previously unvested awards. Accrued payables for these awards were $2.8 million and $5.3 million as of December 31, 2013 and 2012, respectively.

15. DISCONTINUED OPERATIONS

As more fully described in Note 3, we sold our investment management business, CTIMCO, to an affiliate of Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to loss from discontinued operations on our consolidated statements of operations.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

The following table provides additional information on the components of discontinued operations ($ in thousands):

	Year Ended December 31,
	2013		2012			2011
Servicing fees	$	—	$	9,686		$	8,497
Management fees from affiliates		—		6,312			6,618
Total revenues				15,998			15,115
General and administrative expenses		—		12,938			14,884
Income from discontinued operations before income taxes		—		3,060			231
Income tax provision		—		(5,198	)		(1,121	)
Loss from discontinued operations	$	—	$	(2,138	)	$	(890	)
Loss on sale of discontinued operations		—		(271	)		—
Loss from discontinued operations per share of common stock:
Basic	$	—	$	(1.03	)	$	(0.39	)
Diluted	$	—	$	(1.03	)	$	(0.39	)

16. INCOME TAXES

We elected to be taxed as a REIT, effective January 1, 2003, 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 December 31, 2013 and 2012, we were in compliance with all REIT requirements.

During the year ended December 31, 2013, we recorded a current income tax provision of $995,000 primarily related to our taxable REIT subsidiaries. During the year ended December 31, 2012, we recorded a current income tax provision of $174,000. As a result of our sale of CTIMCO, we no longer have any deferred tax assets or liabilities as of December 31, 2012.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our net operating losses, or NOLs, and net capital losses, or NCLs, 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

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Blackstone Mortgage Trust. As of December 31, 2013, we had NOLs of $158.4 million and NCLs of $48.0 million available to be carried forward and utilized in current or future periods. If we are unable to utilize our NOLs, they will expire in 2029. If we are unable to utilize our NCLs, $16.0 million will expire in 2014, $31.4 million will expire in 2015, and $602,000 will expire in 2017.

As of December 31, 2013, tax years 2010 through 2013 remain subject to examination by taxing authorities.

17. STOCK-BASED INCENTIVE PLANS

We do not have any employees following the consummation of the Investment Management Business Sale on December 19, 2012, as described in Note 3. However, as of December 31, 2013, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors are compensated, in part, through the issuance of stock-based instruments. In addition, certain of our former employees continue to participate in the CTOPI incentive management fee grants and the CT Legacy Partners management incentive awards plan.

We had stock-based incentive awards outstanding under five benefit plans as of December 31, 2013: (i) our amended and restated 1997 non-employee director stock plan, or 1997 Plan; (ii) our 2007 long-term incentive plan, or 2007 Plan; (iii) our 2011 long-term incentive plan, or 2011 Plan; (iv) our 2013 stock incentive plan, or 2013 Plan; and (v) our 2013 manager incentive plan, or 2013 Manager Plan. We refer to our 1997 Plan, our 2007 Plan, and our 2011 Plan as our Expired Plans and we refer to our 2013 Plan and 2013 Manager Plan as our Current Plans.

Our Expired Plans have expired and no new awards may be issued under them. Under our Current Plans, a maximum of 2,160,106 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 December 31, 2013, there were 1,450,224 shares available under the Current Plans.

As of December 31, 2013, we had 700,000 shares of restricted class A common stock outstanding, which were issued under our Current Plans. These shares generally vest in quarterly installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of the Current Plans.

18. FAIR VALUES

Assets Recorded at Fair Value

The following table summarizes our assets that are recorded at fair value as of December 31, 2013 ($ in thousands):

	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis
Loans receivable, at fair value	$	40,665	$	—	$	—	$	40,665
Other assets, at fair value(1)	$	15,740	$	—	$	1,944	$	13,796
Measured on a non-recurring basis
Impaired loans receivable(2)	$	—	$	—	$	—	$	—

(1) Other assets include securities, equity investments, and other receivables carried at fair value.

(2) All impaired loans receivable have a 100% loan loss reserve and are held by CT CDO I as of December 31, 2013.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

The following table summarizes our assets that are recorded at fair value as of December 31, 2012 ($ in thousands):

	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis
Investment in CT Legacy Asset	$	132,000	$	—	$	—	$	132,000
Measured on a non-recurring basis
Impaired loans receivable(1)	$	2,000	$	—	$	—	$	2,000

(1) Impaired loans receivable have a 92% loan loss reserve and are held by consolidated securitization vehicles as of December 31, 2012.

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Loans held-for-sale, net			Loans receivable, at fair value			Other assets at fair value(1)			Investment in CT Legacy Asset
December 31, 2012	$	—		$	—		$	—		$	132,000
Consolidation of CT Legacy Partners		—			150,332			14,448			(132,000	)
Transfer from loans receivable, net		2,000			—			—			—
Transfer from loans receivable, at fair value		—			(6,813	)		6,813			—
Deferred interest		—			984			—			—
Proceeds from investments		(3,259	)		(110,654	)		(7,981	)		—
Adjustments to fair value included in earnings
Valuation allowance on loans held-for-sale		1,259			—			—			—
Gain on investments at fair value		—			6,816			516			—
December 31, 2013	$	—		$	40,665		$	13,796		$	—

(1) Other assets include securities, equity investments, and other receivables carried at fair value.

The following describes the key assumptions used in arriving at the fair value of each type of asset that was recorded at fair value as of December 31, 2013 and 2012. There were no liabilities recorded at fair value as of December 31, 2013 or 2012. Refer to Note 2 for further discussion regarding fair value measurement.

Loans held-for-sale – Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Loans receivable, at fair value – The following table lists the range of key assumptions for each type of loans receivable as of December 31, 2013 ($ in millions):

	Assumption Ranges for Significant Unobservable Inputs (Level  3)(1)							Book Value Sensitivity to a 100 bp Discount Rate Increase
Collateral Type	Discount Rate		Recovery Percentage(2)			Book Value
Hotel		7%		100	%	$	15.0		(1.4	%)
Office		6% – 15%		100	%		25.7		(0.3	%)
						$	40.7

(1) Excludes loans for which there is no expectation of future cash flows.

(2) Represents the proportion of the principal expected to be collected relative to the loan balances as of December 31, 2013.

Other assets, at fair value – Our other assets balance include certain CMBS, CDO, equity investments, and other receivables and are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans receivable – CT CDO I has one impaired loan receivable, which is a subordinate loan with a principal balance of $10.5 million. This hotel loan is in maturity default as of December 31, 2013, with no expectation of recovery or repayment.

Investment in CT Legacy Asset – We elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset as of December 31, 2012. We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. The key assumptions for significant unobservable inputs were (i) a discount rate of 15% and (ii) loss severities applied to the underlying assets.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

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 carrying amount, face amount, and approximate fair value of the financial instruments described in Note 2 ($ in thousands):

	December 31, 2013						December 31, 2012
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	52,342	$	52,342	$	52,342	$	15,423	$	15,423	$	15,423
Restricted cash		10,096		10,096		10,096		14,246		14,246		14,246
Loans receivable, net		2,047,223		2,076,411		2,058,699		141,500		164,180		133,682
Financial liabilities
Secured notes		—		—		—		8,497		8,497		7,374
Repurchase obligations		1,109,353		1,109,353		1,109,353		—		—		—
Convertible notes, net		159,524		172,500		181,772		—		—		—
Securitized debt obligations		40,181		40,181		25,696		139,184		139,184		89,880
Participations sold		90,000		90,000		90,304		—		—		—

Estimates of fair value for cash, cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 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.

19. TRANSACTIONS WITH RELATED PARTIES

Transactions Related to Our Manager and its Affiliates

As further described in Note 3, in December 2012 we concluded multiple, related transactions with Blackstone and its affiliates, including (i) the Investment Management Business Sale; (ii) the sale of 500,000 shares of our class A common stock for $20.00 per share; and (iii) the execution of a new external management agreement with our Manager. In addition, Blackstone received the right to designate two members of our board of directors and exercised that right by designating an employee and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012. Certain of our former employees are now employed by an affiliate of our Manager.

On March 26, 2013, we amended the Management Agreement with our Manager to, among other things, amend our investment guidelines to permit the investment risk management committee of our board of directors, which consists of only independent directors, to approve any proposed investment by our Manager.

On July 30, 2013, we and our Manager entered into Amendment No. 1 to our amended and restated Management Agreement with our Manager. The amendments consisted of: (i) revisions to clarify that internal audit expenses (including through one or more third parties and/or affiliates of our Manager) are to be paid by us and not our Manager, and (ii) updates to reflect our recent name change and the merger of our CT Legacy REIT Mezz Borrower, Inc. subsidiary with and into CT Legacy Partners, LLC.

As of December 31, 2013, our consolidated balance sheet included $2.5 million of accrued management fees payable to our Manager. During the year ended December 31, 2013, we paid $3.4 million of management fees to

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

our Manager. In addition, as of December 31, 2013, our consolidated balance sheet includes $193,000 of preferred distributions payable by CT Legacy Partners to an affiliate of our Manager. During the year ended December 31, 2013, CT Legacy Partners made aggregate preferred distributions of $3.9 million to such affiliate.

On October 3, 2013, we issued 339,431 shares of restricted class A common stock with a fair value of $8.5 million as of the grant date to our Manager under the 2013 Manager Plan. The shares of restricted class A common stock vest ratably in quarterly installments over three years from the date of issuance. We recorded a non-cash expense related to these shares of $767,000 during the year ended December 31, 2013. Refer to Note 17 for further discussion of our restricted class A common stock.

During the year ended December 31, 2013, CT CDO I, which is consolidated by us, paid $847,000 of special servicing fees to CTIMCO, which is an affiliate of our Manager.

There may be conflicts between us and our Manager with respect to certain of the investments in the CT Legacy Partners and CTOPI portfolios where an affiliate of our Manager holds a related investment that is senior, junior, or pari passu to the investments held by these portfolios.

The Management Agreement with our Manager excludes from the management fee calculation our interests in CT Legacy Partners, CTOPI, and CT CDO I, which may result in further conflicts between the economic interests of us and our Manager. Refer to Note 14 for further discussion of the Management Agreement with our Manager.

On May 13, 2013, we entered into a joint venture, 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was owned 16.7% by us and 83.3% by an affiliate of our Manager and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate of our Manager using proceeds from the sale of our class A common stock, and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary. We recorded a $193,000 charge to non-controlling interest as a result of the purchase of these equity interests at their fair value, rather than GAAP book value.

An affiliate of our Manager purchased 1,960,784 shares of our class A common stock as part of our stock offering on May 22, 2013. These shares were purchased for $25.50 each, the same price offered to non-affiliated purchasers. This affiliate owned class A common stock representing 7.1% of outstanding class A common stock and stock units as of February 11, 2014. In addition, an affiliate of our Manager was compensated $1.0 million for its role as co-manager of our offering of class A common stock on May 22, 2013 and $188,000 for its role as co-manager of our offering of convertible notes on November 19, 2013.

On October 2, 2013 we originated a $71.0 million loan, the proceeds of which were used by the borrower to repay an existing loan owned by an affiliate of our Manager.

On October 23, 2013, we purchased a $176.9 million loan from a third party. In conjunction with our acquisition of this loan, we consented to its restructuring, which restructuring resulted in an affiliate of our Manager earning a $2.3 million modification fee.

Other Related-Party Transactions

In conjunction with the Investment Management Business Sale, we entered into a letter agreement with W.R. Berkley Corporation, or WRBC, pursuant to which we agreed not to undertake any offering of our class A common stock, or other equity securities, in an aggregate amount greater than $30.0 million without prior

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

approval of a majority of the independent members of our board of directors. This one-time approval was obtained in conjunction with our May 2013 offering of class A common stock, and we are no longer required to obtain such approval for future offerings. WRBC beneficially owned class A common stock representing 1.0% of our outstanding class A common stock and stock units as of February 11, 2014, and a member of our board of directors is an employee of WRBC.

20. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of December 31, 2013, we had unfunded commitments of $164.3 million related to fifteen loans receivable, which amounts will only be funded to finance lease-related or capital expenditures by our borrowers. These future commitments will expire over the next five years.

CTOPI Tax Advances

As further discussed in Note 9, the CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these advances to the partnership. As of December 31, 2013, our maximum exposure to loss from CTOPI was $10.2 million, the aggregate amount of such distributions we have received from CTOPI.

Income Tax Audit of CTIMCO

The Internal Revenue Service, or the IRS, is currently undergoing an examination of the federal income tax returns for the year ended December 31, 2010 of our former subsidiary, CTIMCO. The examination is on-going, and no adjustments have been communicated to us by the IRS. When we sold CTIMCO in December 2012, we provided certain indemnifications related to its operations, and any amounts determined by the IRS to be owed by CTIMCO would ultimately be paid by us.

Litigation

In the normal course of business, we are subject to various legal proceedings and claims, the resolution of which, in our Manager’s opinion, will not have a material adverse effect on our consolidated financial position or results of operations. As of December 31, 2013, there are no reserves recorded for pending litigation.

CT CDO Representations and Warranties

When we formed (and reinvested) our four CT CDOs, we made certain representations and warranties with respect to Blackstone Mortgage Trust, Inc. and the loans and securities that we contributed as collateral to these CT CDOs. In the event that these representations or warranties are proved to have been untrue at the time that the respective collateral was contributed, we may be required to repurchase certain of those loans and securities. These representations and warranties generally relate to specific corporate and asset related subjects, including, among other things, proper corporate authorization; compliance with laws and regulations; ownership of the assets; title to, lack of liens encumbering, and adequate insurance covering the underlying collateral properties; and the lack of existing loan defaults. In certain cases, we may be able to reduce the impact of any such purchase obligation through recoveries from the exercise of remedies against the institution from which we acquired the asset and received substantially the same representations and warranties.

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

Since inception, we have not been required to repurchase any assets nor have we received any notice of assertion of a potential breach of any representation or warranty. Any payment required to repurchase a loan or security could materially impact our liquidity. As of December 31, 2013, we have not recorded any liabilities associated with the potential repurchase of these assets.

Board of Director’s Compensation

As of December 31, 2013, of the eight members of our board of directors, five are entitled to an annual compensation of $125,000 each. The other three board members, including our chairman and our chief executive officer, serve as directors for no compensation. As of December 31, 2013, the annual compensation for our directors was paid 50% in cash and 50% in the form of deferred stock units. In addition, the member of our board of directors that serves as the chairperson of the audit committee of our board of directors receives an annual cash compensation of $12,000. Compensation to the board of directors is payable in four equal quarterly payments.

21. SEGMENT REPORTING

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Our Loan Origination business commenced during 2013. Accordingly, no comparable segment data exists for 2012, 2011, or any other prior period, and we have therefore not retrospectively restated our previously reported information.

The following table presents our consolidated statement of operations for each segment for the year ended December 31, 2013 ($ in thousands):

	Loan Origination			CT Legacy Portfolio			Total
Income from loans and other investments
Interest and related income	$	41,621		$	11,543		$	53,164
Less: Interest and related expenses		13,053			4,964			18,017
Income from loans and other investments, net		28,568			6,579			35,147
Other expenses
Management fees		5,937			—			5,937
General and administrative expenses		5,149			6,356			11,505
Total other expenses		11,086			6,356			17,442
Valuation allowance on loans held-for-sale		—			1,259			1,259
Unrealized gain on investments at fair value		—			7,417			7,417
Gain on extinguishment of debt		—			38			38
Income before income taxes		17,482			8,937			26,419
Income tax provision		31			964			995
Net income		17,451			7,973			25,424
Net income attributable to non-controlling interests		(193	)		(10,199	)		(10,392	)
Net income (loss) attributable to
Blackstone Mortgage Trust, Inc.	$	17,258		$	(2,226	)	$	15,032

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

There were no transactions between our operating segments during the year ended December 31, 2013. Less than 1% of revenues for the year ended December 31, 2013, were generated from non-domestic sources.

The following table presents our consolidated balance sheet for each segment as of December 31, 2013 ($ in thousands):

	Loan Origination		CT Legacy Portfolio		Total
Assets
Cash and cash equivalents	$	52,342	$	—	$	52,342
Restricted cash		—		10,096		10,096
Loans receivable, net		2,000,223		47,000		2,047,223
Loans receivable, at fair value		—		40,665		40,665
Equity investments in unconsolidated subsidiaries		—		22,480		22,480
Accrued interest receivable, prepaid expenses, and other assets		21,020		18,954		39,974
Total assets	$	2,073,585	$	139,195	$	2,212,780
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	$	21,104	$	35,868	$	56,972
Repurchase obligations		1,109,353		—		1,109,353
Convertible notes, net		159,524		—		159,524
Securitized debt obligations		—		40,181		40,181
Participations sold		90,000		—		90,000
Total liabilities		1,379,981		76,049		1,456,030
Equity
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		693,604		24,305		717,909
Non-controlling interests		—		38,841		38,841
Total equity		693,604		63,146		756,750
Total liabilities and equity	$	2,073,585	$	139,195	$	2,212,780

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Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued)

22. SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2013, 2012, and 2011 ($ in thousands except per share data):

	March 31			June 30			September 30		December 31
2013
Revenues(1)	$	1,456		$	6,017		$	18,853	$	26,837
Net (loss) income	$	(1,597	)	$	6,768		$	10,526	$	9,728
Net (loss) income attributable to
Blackstone Mortgage Trust, Inc.	$	(3,115	)	$	2,748		$	8,320	$	7,079
Net (loss) income per share of class A common stock:
Basic	$	(1.03	)	$	0.22		$	0.29	$	0.24
Diluted	$	(1.03	)	$	0.22		$	0.29	$	0.24
2012
Revenues(1)	$	14,716		$	6,763		$	6,944	$	6,517
Net income	$	140,622		$	3,351		$	12,900	$	122,931
Net income attributable to
Blackstone Mortgage Trust, Inc.	$	66,553		$	2,283		$	6,999	$	105,189
Net income per share of class A common stock:
Basic	$	29.14		$	1.00		$	3.02	$	42.21
Diluted	$	27.39		$	0.93		$	2.84	$	40.65
2011
Revenues(1)	$	36,991		$	32,553		$	25,642	$	21,975
Net income (loss)	$	253,917		$	6,224		$	8,256	$	(16,078	)
Net income (loss) attributable to
Blackstone Mortgage Trust, Inc.	$	254,585		$	(1,845	)	$	13,722	$	(8,320	)
Net income (loss) per share of class A common stock:
Basic	$	113.47		$	(0.81	)	$	6.04	$	(3.66	)
Diluted	$	110.36		$	(0.81	)	$	5.69	$	(3.66	)

(1) Excludes revenues from discontinued operations.

Basic and diluted earnings per share are computed independently based on the weighted-average shares of common stock and stock units outstanding for each period. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the total for the year. Earnings per share amounts have been adjusted to give retroactive effect to the reverse stock split, which we effected on May 6, 2013. See Note 13 for a further discussion of earnings per share.

23. SUBSEQUENT EVENTS

On January 14, 2014, we issued 9,775,000 shares of class A common stock at a public offering price of $26.75 per share. We generated net proceeds from the issuance of $256.1 million after underwriting discounts and other offering expenses.

Subsequent to year-end, we originated an additional three loans with total commitments of $286.4 million, of which an aggregate $208.8 million was funded at closing.

On January 29, 2014, we extended the term of our $32.0 million, asset-specific, repurchase agreement with Wells Fargo from February 9, 2014 to April 9, 2014. We have an option to further extend the term of this agreement for an additional ten month period.

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Blackstone Mortgage Trust, Inc.

Schedule IV – Mortgage Loans on Real Estate

As of December 31, 2013

(in thousands)

Type of Loan/Borrower	Description / Location		Interest Payment Rates(2)			Maximum Maturity Date(3)			Periodic Payment Terms(4)		Prior Liens(5)		Face Amount of Loans		Carrying Amount of Loans(6)
Senior Mortgage Loans(1)
Borrower A		Office / West		L + 3.80	%		6/15/2018			I/O	$	—	$	193,980	$	193,194
Borrower B		Multifamily / Northeast		L + 4.50	%		11/9/2018			I/O		—		181,000		179,266
Borrower C		Diversified / Northeast		L + 3.70	%		9/30/2020			I/O		—		140,000		139,695
Borrower D		Office / Northeast		L + 4.75	%		1/9/2019			I/O		—		140,000		138,627
Borrower E		Hotel / West		L + 4.38	%		11/9/2018			I/O		—		89,750		89,161
Borrower F		Diversified / Diversified		L + 4.25	%		8/10/2018			I/O		—		87,038		86,489
Borrower G		Multifamily / Southeast		L + 3.85	%		7/9/2018			I/O		—		81,000		80,664
Borrower H		Office / West		L + 3.95	%		6/9/2018			I/O		—		70,284		70,131
Borrower I		Office / Northeast		L + 4.00	%		6/10/2016			I/O		—		68,000		67,787
Borrower J		Other / Diversified		L + 5.00	%		9/14/2018			I/O		—		67,714		66,956
Borrower K		Other / Northeast		L + 8.00	%		2/9/2015			I/O		—		64,000		64,530
All other mortgage loans individually less than 3%		Various / Diversified		L + 3.85% – L + 5.00	%		11/6/2016 – 1/9/2019					—		628,747		623,829
Total senior mortgage loans												—		1,811,513		1,800,329
Subordinate Loans(7)
Borrower AA		Office / Northwest		L + 5.66	%		4/9/2015			I/O		289,318		173,837		166,207
Borrower BB		Multifamily / Northeast		L + 12.56	%		12/13/2017			I/O		108,917		33,513		33,687
All other floating-rate loans individually less than 3%		Various / Diversified		L + 3.53 % – L + 6.06	%(8)		1/8/2014 – 12/9/2014	(8)				N/A		178,820		63,990
All other fixed-rate loans individually less than 3%		Various / Diversified		8.00% – 8.77	%		6/1/2014 – 2/1/2016					N/A		23,995		23,675
Total subordinate loans												398,235		410,164		287,559
Total loans											$	398,235	$	2,221,678	$	2,087,888

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013; however, certain of our loans receivable earn a minimum LIBOR floor ranging from 0.20% to 1.00%.

(3) Maximum maturity date assumes all extension options are exercised.

(4) I/O = interest only.

(5) Represents only third party liens.

(6) The tax basis of the loans included above is approximately $2.1 billion as of December 31, 2013.

(7) Includes subordinate interests in mortgages and mezzanine loans.

(8) Ranges exclude fully impaired loans with an aggregate principal balance of $108.8 million, which includes a subordinate loan with a principal balance of $10.5 million that is greater than 90 days delinquent. All other loans are current on contractual principal and interest payments. Refer to Notes 5 and 7 to our consolidated financial statements for additional details on our impaired loans.

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Blackstone Mortgage Trust, Inc.

Notes to Schedule IV

As of December 31, 2013

(in thousands)

1. Reconciliation of Mortgage Loans on Real Estate:

The following table reconciles mortgage loans on real estate for the years ended:

	2013			2012			2011
Balance at January 1,(1)	$	141,500		$	869,269		$	3,503,447
Additions during period:
Consolidation (deconsolidation) of subsidiary		150,332			(645,163	)		(573,483	)
Loan originations		2,325,433			—			—
Additional fundings(2)		3,465			26			478
Amortization of deferred fees and discount, net		5,965			180			1,773
Unrealized gain on foreign currency translation		796			—			—
Unrealized gain on investments at fair value		6,816			—			—
Valuation allowance on loans held-for-sale		1,259			—			(1,456	)
Recovery of provision for loan losses		—			36,147			21,973
Deductions during period:
Collections of principal		(494,301	)		(118,959	)		(2,069,799	)
Loans sold		(21,162	)		—			(5,750	)
Deferred origination fees and expenses		(25,402	)		—			—
Transfers to other assets		(6,813	)		—			(7,914	)
Balance at December 31,	$	2,087,888		$	141,500		$	869,269

(1) All amounts include loans receivable, net, loans receivable, at fair value, and loans held-for-sale.

(2) Includes deferred interest, which is a non-cash addition to the balance of mortgage loans, of $325,000, $26,000, and $478,000 for the years ended December 31, 2013, 2012, and 2011, respectively.

S-2

EX-10.34

Exhibit 10.34

AMENDMENT NO. 1 TO MASTER REPURCHASE AGREEMENT

AMENDMENT NO. 1 TO MASTER REPURCHASE AGREEMENT, dated as of December 20, 2013 (this “Amendment”), between PARLEX 4 FINANCE, LLC (“Seller”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association (“Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).

RECITALS

WHEREAS, Seller and Buyer are parties to that certain Master Repurchase Agreement, dated as of June 28, 2013 (as may be further amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Existing Repurchase Agreement”); and

WHEREAS, Seller and Buyer have agreed, subject to the terms and conditions hereof, that the Existing Repurchase Agreement shall be amended as set forth in this Amendment.

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:

SECTION 1. Amendment to Master Repurchase Agreement.

(a) Article 2 of the Existing Repurchase Agreement is hereby amended by adding the following new defined terms in their appropriate alphabetical order:

“Other Facility Buyer” shall mean the “Buyer”, as defined in the Other Repurchase Agreement.

“Other Facility” shall mean the Other Repurchase Agreement and any documents related thereto.

“Other Facility Purchased Items” shall mean “Purchased Items” as defined in the Other Repurchase Agreement.

“Other Repurchase Agreement” shall mean that certain Master Repurchase Agreement, dated as of December 20, 2013 (as amended, restated, supplemented or otherwise modified and in effect from time to time), by and among Parlex 4 Finance, LLC and Parlex 4 UK Finco, LLC, as sellers, and Other Facility Buyer, as buyer.

“Other Facility Repurchase Obligations” shall mean “Repurchase Obligations” as defined in the Other Repurchase Agreement.

(b) Article 2 of the Existing Repurchase Agreement is hereby amended by replacing the definitions of “Default”, “Filings” and “UCC” in their entirety with the following new defined terms:

“Default” shall mean (a) any event which, with the giving of notice, the passage of time, or both, would constitute an Event of Default, and (b) any “Default” as defined in the Other Repurchase Agreement.

“Filings” shall have the meaning specified in Article 6(h) of this Agreement.

“UCC” shall have the meaning specified in Article 6(h) of this Agreement.

(a) Article 5(c) of the Existing Repurchase Agreement is hereby amended by deleting the word “and” at the end of clause (iii), replacing the existing clause (iv) with the following new clause (iv) below, and inserting the following new clause (v) below:

(iv) fourth, to make a payment to Other Facility Buyer or its Affiliates on account of any other amounts then due and payable under the Other Facility pursuant to Article 5(c)(i), (ii) and (iii) of the Other Repurchase Agreement until such other amounts then due and payable pursuant to Article 5(c)(i), (ii) and (iii) of the Other Repurchase Agreement have been reduced to zero, each such payment to be deposited into one of the Depository Accounts (as defined in the Other Repurchase Agreement) and allocated in accordance with the Other Repurchase Agreement; and

(v) fifth, to Seller, any remainder.

(b) Article 5(d) of the Existing Repurchase Agreement is hereby amended by deleting the word “and” at the end of clause (ii), replacing the existing clause (iii) with the following new clause (iii) below, and inserting the following new clause (iv) below:

(iii) third, to make a payment to Other Facility Buyer or its Affiliates on account of any other amounts then due and payable under the Other Facility pursuant to Article 5(d)(i) and (ii) of the Other Repurchase Agreement until such other amounts then due and payable pursuant to Article 5(d)(i) and (ii) of the Other Repurchase Agreement have been reduced to zero, each such payment to be deposited into one of the Depository Accounts (as defined in the Other Repurchase Agreement) and allocated in accordance with the Other Repurchase Agreement; and

(iv) fourth, to Seller, any remainder.

(c) Article 5(e) of the Existing Repurchase Agreement is hereby amended by deleting the word “and” at the end of clause (v), replacing the existing clause (vi) with the following new clause (vi) below, and inserting the following new clause (vii) below:

(vi) sixth, to make a payment to Other Facility Buyer or its Affiliates on account of the repurchase price of all purchased assets related to the Other Repurchase Agreement and any other amounts due and owing under the Other Facility until the repurchase price for such purchased assets and such other amounts due and owing have

-2-

been reduced to zero, each such payment to be deposited into one of the Depository Accounts (as defined in the Other Repurchase Agreement) and allocated in Other Facility Buyer’s sole discretion; and

(vii) seventh, to Seller, any remainder.

(d) Article 6 of the Existing Repurchase Agreement is hereby amended by replacing the first two sentences of Article 6(a) in their entirety with the following:

Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s obligations to Buyer 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 Buyer, Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items (as defined below) to Buyer (and the Other Facility Buyer, as applicable) to secure the payment of (i) the Repurchase Price on all Transactions to which it is a party and all other amounts owing by Seller or Seller’s Affiliates to Buyer and any of Buyer’s present or future Affiliates hereunder, including, without limitation, amounts owing pursuant to Article 25, under the other Transaction Documents, including any obligations of Seller under any Hedging Transaction entered into with any Affiliated Hedge Counterparty (including, without limitation, all amounts anticipated to be paid to Buyer by an Affiliated Hedge Counterparty as provided for in the definition of Repurchase Price or otherwise) and the Other Facility Repurchase Obligations, and to secure the obligation of Seller or its designee to service the Purchased Assets in conformity with Article 27 and any other obligation of Seller to Buyer, and (ii) the Other Facility Repurchase Obligations (collectively, the “Repurchase Obligations”).

(e) Article 6 of the Existing Repurchase Agreement is hereby amended by deleting the existing Articles 6(b) through 6(d), and replacing them in their entirety with the following and renumbering Article 6(e) as Article 6(i):

(b) Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Other Facility Purchased Items to Buyer to secure the payment of the Repurchase Obligations. Seller shall mark its computer records and tapes to evidence the interests granted to Buyer hereunder.

(c) Buyer and Other Facility Buyer each hereby acknowledges and agrees that Buyer’s security interest in the Other Facility Purchased Items as security for the Repurchase Obligations shall at all times be junior and subordinate in all respects to Other Facility Buyer’s security interest in the Other Facility Purchased Items as security for the Other Facility Repurchase Obligations. The preceding subordination of Buyer’s security interest in the Other Facility Purchased Items affects only the relative priority of Buyer’s security interest in the Other Facility Purchased Items, and shall not subordinate the Repurchase Obligations in right of payment to the Other Facility Repurchase Obligations.

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(d) Other Facility Buyer hereby acknowledges and agrees that Other Facility Buyer’s security interest in the Purchased Items as security for the Other Facility Repurchase Obligations shall at all times be junior and subordinate in all respects to Buyer’s security interest in the Purchased Items as security for the Repurchase Obligations. The preceding subordination of Other Facility Buyer’s security interest in the Purchased Items affects only the relative priority of Other Facility Buyer’s security interest in the Purchased Items, and shall not subordinate the Other Facility Repurchase Obligations in right of payment to the Repurchase Obligations.

(e) Buyer agrees to act as agent for and on behalf of the Affiliated Hedge Counterparties (including without limitation for purposes of Sections 9-313(c), 8-106(d)(3), 9-104(a) and 9-106(a) of the UCC) with respect to the security interest granted hereby to secure the obligations owing to the Affiliated Hedge Counterparties under any Hedging Transactions, including, without limitation, with respect to the Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to the Custodial Agreement.

(f) Buyer agrees to act as agent for and on behalf of Other Facility Buyer (including without limitation for purposes of Sections 9-313(c), 8-106(d)(3), 9-104(a) and 9-106(a) of the UCC) with respect to the security interest granted hereby to secure the obligations owing to Other Facility Buyer under the Other Facility, including, without limitation, with respect to the Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to the Custodial Agreement.

(g) Other Facility Buyer agrees to act as agent for and on behalf of Buyer (including without limitation for purposes of Sections 9-313(c), 8-106(d)(3), 9-104(a) and 9-106(a) of the UCC) with respect to the security interest granted hereby to secure the obligations owing to Buyer under the Other Transaction Documents, including, without limitation, with respect to the “Purchased Assets” and the “Purchased Asset Files”, each as defined in the Other Repurchase Agreement.

(h) Buyer’s security interest in the Purchased Items and the Other Facility Purchased Items shall terminate only upon termination of Seller’s obligations under this Agreement and the other Transaction Documents, the Other Facility, all Hedging Transactions and the documents delivered in connection herewith and therewith. Upon such termination, Buyer shall promptly deliver to Seller such UCC termination statements and other release documents as may be commercially reasonable and return the Purchased Assets to Seller and reconvey the Purchased Items to Seller and release its security interest in the Purchased Items and the Other Facility Purchased Items. For purposes of the grant of the security interest pursuant to this Article 6, this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “UCC”). Buyer 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, (a) Buyer, at Seller’s sole cost and expense, as

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applicable, shall cause to be filed in such locations as may be necessary to perfect and maintain perfection and priority of the security interest granted hereby, UCC financing statements and continuation statements (collectively, the “Filings”), and shall forward copies of such Filings to Seller upon the filing thereof, and (b) Seller shall from time to time take such further actions as may be reasonably requested by Buyer to maintain and continue the perfection and priority of the security interest granted hereby (including marking its records and files to evidence the interests granted to Buyer hereunder). For the avoidance of doubt, notwithstanding clause (vi) of the definition of Repurchase Date and the proviso thereto, Buyer’s security interest in any particular Purchased Asset shall not terminate until Seller has fully paid the related Repurchase Price.

(f) Article 9(b) of the Existing Repurchase Agreement is hereby amended by replacing the first sentence of such Article 9(b) in its entirety with the following:

In addition to the representations and warranties in subsection (a) above, Seller represents and warrants to Buyer and Other Facility Buyer as of the date of this Agreement and will be deemed to represent and warrant to Buyer and Other Facility Buyer as of the Purchase Date for the purchase of any Purchased Assets by Buyer from Seller and any Transaction thereunder and covenants that at all times while this Agreement and any Transaction thereunder is in effect, unless otherwise stated herein:

(g) Article 9(b) of the Existing Repurchase Agreement is hereby amended by replacing clause (xxv) in its entirety with the following:

(xxv) Ownership of Property. Seller does not own, and has not ever owned, any assets other than (A) the Purchased Assets, (B) such incidental personal property related thereto and (C) the Other Facility Purchased Items related to U.S. Purchased Assets (as defined in the Other Facility Repurchase Agreement).

(h) Article 11(w) of the Existing Repurchase Agreement is hereby amended by replacing clause (xxiv) in its entirety with the following:

(xxiv) except in connection with the Purchased Assets, buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities); provided that Seller is permitted to buy and hold evidence of indebtedness pursuant to the Other Facility.

(i) Article 12(a) of the Existing Repurchase Agreement is hereby amended by moving the word “and” from the end of clause (xviii) to the end of clause (xix) and inserting the following as new clause (xx):

(xx) an Event of Default (as such term is defined in the Other Repurchase Agreement) occurs under the Other Facility.

SECTION 2. Conditions Precedent. This Amendment shall become effective on the date (the “Amendment Effective Date”) on which (1) all the representations and warranties made by Sellers in this Amendment are true and correct and (2) Buyer shall have received this Amendment, executed and delivered by a duly authorized officer of each of Sellers and Buyer.

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SECTION 3. Representations and Warranties. On and as of the date first above written, Seller hereby represents and warrants to Buyer that (a) it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, (b) after giving effect to this Amendment, no Default or Event of Default under the Repurchase Agreement has occurred and is continuing, and (c) after giving effect to this Amendment, the representations and warranties contained in Article 9 of the Repurchase Agreement are true and correct in all material respects as though made on such date (except for any such representation or warranty that by its terms refers to a specific date other than the date first above written, in which case it shall be true and correct in all material respects as of such other date).

SECTION 4. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its respective terms; provided, however, that upon the Amendment Effective Date, all references in the Repurchase Agreement to the “Transaction Documents” shall be deemed to include, in any event, this Amendment. Each reference to Repurchase Agreement in any of the Transaction Documents shall be deemed to be a reference to the Repurchase Agreement as amended hereby.

SECTION 5. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of a manually executed original counterpart thereof.

SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States
By:	Thomas N. Cassino
	Name:Thomas N. Cassino Title:   Vice President
SELLER:
PARLEX 4 FINANCE, LLC, a Delaware limited liability company
By:	Douglas Armer
	Name: Douglas Armer
	Title:   Head of Capital Markets and Treasurer
OTHER FACILITY BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, in its capacity as Other Facility Buyer, and solely for purposes of acknowledging and agreeing to the terms of this Amendment:
By:	Thomas N. Cassino
	Name:Thomas N. Cassino Title:   Vice President

Signature Page to Amendment No. 1 to Master Repurchase Agreement

EX-10.36

Exhibit 10.36

MASTER REPURCHASE AGREEMENT

Dated as of December 20, 2013

among

PARLEX 4 UK FINCO, LLC

and

PARLEX 4 FINANCE, LLC,

as Sellers

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as Buyer

TABLE OF CONTENTS

Page

ARTICLE 1. APPLICABILITY	1
ARTICLE 2. DEFINITIONS	1
ARTICLE 3. INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION OF MATURITY DATE; EXTENSION OF REPURCHASE DATE	29
ARTICLE 4. MARGIN MAINTENANCE	49
ARTICLE 5. INCOME PAYMENTS AND PRINCIPAL PROCEEDS	50
ARTICLE 6. SECURITY INTEREST	53
ARTICLE 7. PAYMENT, TRANSFER AND CUSTODY	56
ARTICLE 8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS	60
ARTICLE 9. REPRESENTATIONS AND WARRANTIES	60
ARTICLE 10. NEGATIVE COVENANTS OF SELLER	69
ARTICLE 11. AFFIRMATIVE COVENANTS OF SELLER	70
ARTICLE 12. EVENTS OF DEFAULT; REMEDIES	78
ARTICLE 13. SINGLE AGREEMENT	84
ARTICLE 14. RECORDING OF COMMUNICATIONS	85
ARTICLE 15. NOTICES AND OTHER COMMUNICATIONS	85
ARTICLE 16. ENTIRE AGREEMENT; SEVERABILITY	86
ARTICLE 17. NON-ASSIGNABILITY	86
ARTICLE 18. GOVERNING LAW	88

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ARTICLE 19. NO WAIVERS, ETC.	88
ARTICLE 20. USE OF EMPLOYEE PLAN ASSETS	88
ARTICLE 21. INTENT	89
ARTICLE 22. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	90
ARTICLE 23. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	91
ARTICLE 24. NO RELIANCE	91
ARTICLE 25. INDEMNITY	92
ARTICLE 26. DUE DILIGENCE	93
ARTICLE 27. SERVICING	94
ARTICLE 28. MISCELLANEOUS	95
ARTICLE 29. JOINT AND SEVERAL OBLIGATIONS; LIMITED RECOURSE	98

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ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Prohibited Transferees
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Sellers
EXHIBIT III-A	Monthly Reporting Package
EXHIBIT III-B	Quarterly Reporting Package
EXHIBIT III-C	Annual Reporting Package
EXHIBIT IV	Form of Custodial Delivery Certificate
EXHIBIT V-A	Form of Power of Attorney for U.S. Purchased Assets
EXHIBIT V-B	Form of Power of Attorney for Foreign Purchased Assets
EXHIBIT VI	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VII	Asset Information
EXHIBIT VIII	Purchase Procedures
EXHIBIT IX	Form of Bailee Letter
EXHIBIT X	Form of Margin Deficit Notice
EXHIBIT XI	Form of Tax Compliance Certificates
EXHIBIT XII	UCC Filing Jurisdictions
EXHIBIT XIII	Form of Servicer Notice
EXHIBIT XIV	Form of Release Letter
EXHIBIT XV	Covenant Compliance Certificate
EXHIBIT XVI	Form of Re-Direction Letter
EXHIBIT XVII	Form of Servicing Agreement for Foreign Purchased Assets

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MASTER REPURCHASE AGREEMENT

MASTER REPURCHASE AGREEMENT, dated as of December 20, 2013, by and among JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association organized under the laws of the United States (“Buyer”), and PARLEX 4 UK FINCO, LLC (“Foreign Asset Seller”) and PARLEX 4 FINANCE, LLC (“U.S. Seller”) (each a Delaware limited liability company and a “Seller” with respect to the Eligible Assets that it sells to Buyer and together, the “Sellers”).

ARTICLE 1.

APPLICABILITY

From time to time the parties hereto may enter into transactions in which Sellers and Buyer agree to the transfer from either Seller to Buyer of all of its rights, title and interest to certain Eligible Assets (as defined herein) or other assets and, in each case, the other related Purchased Items (as defined herein) (collectively, the “Assets”) against the transfer of funds by Buyer to such Seller, with a simultaneous agreement by Buyer to transfer back to such Seller such Assets at a date certain or on demand, against the transfer of funds by such Seller to Buyer. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, 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, at no time shall Buyer be obligated to purchase or effect the transfer of any Eligible Asset from either Seller to Buyer.

ARTICLE 2.

DEFINITIONS

“Accelerated Repurchase Date” shall have the meaning specified in Article 12(b)(i) of this Agreement.

“Acceptable Attorney” shall mean Ropes & Gray, LLP with respect to U.S. Purchased Assets or another attorney-at-law or law firm that has delivered at U.S. Seller’s request a Bailee Letter, with the exception of an attorney or law firm that is not reasonably satisfactory to Buyer.

“Acceptable Undertaking” shall mean a solicitor’s undertaking from Ropes & Gray LLP (London office) or a firm of solicitors regulated by the Solicitors Regulation Authority and approved for this purpose by the Buyer and in form and substance reasonably satisfactory to the Buyer.

“Accepted Servicing Practices” shall mean with respect to any Purchased Asset, those servicing practices in conformity with accepted and prudent servicing practices in the industry and jurisdiction for loans of the same type and relating to the same geographical area and in a manner at least equal in quality to the service the applicable servicer provides for assets that are similar to such Purchased Asset.

“Account Security Agreement” shall mean an agreement creating security over a bank account maintained by a Foreign Obligor.

“Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, administration, dissolution or similar law relating to the protection of creditors (“Insolvency Law”), or suffering any such petition or proceeding to be commenced by another that is consented to, not timely contested, or that results in entry by a Governmental Authority having jurisdiction of an order for relief that, in the case of an action not instigated by or on behalf of or with the consent of such Seller, is not dismissed or stayed within ninety (90) days; (ii) the seeking or consenting to the appointment of a receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (iv) the making of a general assignment for the benefit of creditors; (v) the admission by such Person of its inability to pay its debts or discharge its obligations as they become due or mature; (vi) 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 any substantial part 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; (vii) the consent by such Person to the entry of an order for relief in an insolvency case under any Insolvency Law; or (viii) the taking of action by any such Person in furtherance of any of the foregoing.

“Additional Purchase Amount” shall have the meaning specified in Article 3(x)(i) of this Agreement.

“Additional Purchase Available Amount” shall mean the positive difference, if any, between (x) the Maximum Advance Purchase Price as of the proposed date for an Additional Purchase Transaction minus (y) the outstanding Purchase Price of such Purchased Asset as of such proposed date.

“Additional Purchase Transaction” shall have the meaning specified in Article 3(x)(i) of this Agreement.

“Additional Purchase Transaction Conditions Precedent” shall have the meaning specified in Article 3(x)(ii).

“Advance Rate” shall mean, with respect to each Transaction and any Pricing Rate Period, the initial Advance Rate for such Transaction as shown in the related Confirmation, as may be adjusted for an Additional Purchase Transaction or Future Funding Transaction as set forth herein, unless otherwise agreed to by Buyer and the related Seller, which in any case shall not exceed the Maximum Advance Rate.

“Affiliate” shall mean, when used with respect to any specified Person, (i) any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such Person or (ii) any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

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“Affiliated Hedge Counterparty” shall mean JPMorgan Chase Bank, National Association, or any Affiliate thereof, in its capacity as a party to any Hedging Transaction with either Seller.

“Agreement” shall mean this Master Repurchase Agreement, dated as of December 20, 2013 by and among JPMorgan Chase Bank, National Association, PARLEX 4 UK FINCO, LLC and PARLEX 4 FINANCE, LLC, as such agreement may be modified or supplemented from time to time.

“Alternative Rate” shall have the meaning specified in Article 3(g) of this Agreement.

“Alternative 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 Alternative Rate.

“Annual Reporting Package” shall mean the reporting package described on Exhibit III-C.

“Anti-Money Laundering Laws” shall have the meaning specified in Article 9(b)(xxix) of this Agreement.

“Applicable Currency” means U.S. dollars or Pounds Sterling, as applicable.

“Applicable Law” means all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“Applicable Spread” shall mean, with respect to a Transaction involving a Purchased Asset:

(i) so long as no Event of Default shall have occurred and be continuing, the incremental per annum rate (expressed as a number of “basis points”, each basis point being equivalent to 1/100 of 1%) specified in Schedule I attached to the Fee Letter as being the “Applicable Spread” for Purchased Assets in such Asset Type Grouping for the applicable LTV shown in Schedule I of the Fee Letter, as applicable, or such other rate as may be agreed upon between the applicable Seller and Buyer, and, in either case, as set forth in the related Confirmation; and

(ii) after the occurrence and during the continuance of an Event of Default, the applicable incremental per annum rate described in clause (i) of this definition, plus 400 basis points (4.0%);

provided, that the Applicable Spread may be increased in connection with an Additional Purchase Transaction or Future Funding Transaction.

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“Applicable Standard of Discretion” shall mean (a) if the ratio of (x) the Maximum Purchase Price of such Purchased Asset to (y) the value of the related Underlying Mortgaged Property, determined in Buyer’s commercially reasonable discretion, is less than or equal to the LTV as of the Purchase Date, Buyer’s commercially reasonable discretion, and (b) if the ratio of (x) the Maximum Purchase Price of such Purchased Asset to (y) the value of the related Underlying Mortgaged Property, determined in Buyer’s commercially reasonable discretion, is greater than the LTV as of the Purchase Date, Buyer’s sole discretion. For purposes of Buyer’s determination of the value of the relevant Underlying Mortgaged Property, (i) the value may be determined using any commercially reasonable method, including without limitation by reference to a recent appraisal prepared in accordance with the Appraisal Regime, broker price opinions and/or discounted cash flow analysis or any other commercially reasonable method (for the avoidance of doubt, while not exclusive, any of the foregoing shall be deemed for all purposes to be commercially reasonable) and (ii) for the avoidance of doubt, Buyer may reduce value for any actual or potential risks posed by any Liens on the related Underlying Mortgaged Property(ies).

“Appraisal Regime” shall mean (a) with respect to U.S. Purchased Assets, FIRREA, and (b) with respect to Foreign Purchased Assets, RICS.

“Asia House Loan” shall mean the Senior Mortgage Loan commonly referred to as “Asia House and 24 King William Street”, represented by that certain Facilities Agreement, dated November 27, 2013.

“Asset Due Diligence” shall have the meaning set forth in Article 3(b)(v) hereof.

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

“Asset Type Grouping” shall have the meaning set forth in the Fee Letter.

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

“Assignee” shall have the meaning set forth in Article 17(a) hereof.

“Bailee Letter” shall mean (A) with respect to any U.S. Purchased Asset, a letter from an Acceptable Attorney or from a Title Company, in the form attached to this Agreement as Exhibit IX, wherein such Acceptable Attorney or Title Company in possession of a Purchased Asset File (i) acknowledges receipt of such Purchased Asset File, (ii) confirms that such Acceptable Attorney, Title Company, or other Person acceptable to Buyer is holding the same as bailee of Buyer under such letter and (iii) agrees that such Acceptable Attorney or Title Company shall deliver such Purchased Asset File to the Custodian by not later than the third (3^rd) Business Day following the Purchase Date (or, if applicable, the date of the Future Funding Transaction) for the related Purchased Asset, and (B) with respect to any Foreign Purchased Asset, an Acceptable Undertaking.

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

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“Breakage Costs” shall have the meaning assigned thereto in Article 3(l).

“Business Day” shall mean any day on which banks are open for general business in London and Jersey other than (i) a Saturday or Sunday, (ii) a day on which the New York Stock Exchange or the Federal Reserve Bank of New York is authorized or obligated by law or executive order to be closed and (iii) a day on which banks in the State of New York, Pennsylvania, Kansas or Minnesota are authorized or obligated by law or executive order to be closed or, with respect to “London Business Days” for the determination of LIBOR, any day on which banks in London, England are authorized or obligated by law or executive order to be closed.

“Buyer” shall mean JPMorgan Chase Bank, National Association, or any permitted successor or assign.

“Buyer Compliance Policy” shall mean any corporate policy of Buyer or of any corporate entity controlling Buyer related to the compliance by Buyer or such corporate entity or any of Buyer’s or by any such corporate entity’s Affiliates with any Requirement of Law and/or any request or directive by any Governmental Authority (whether or not having the force of law) and/or any proposed law, rule or regulation, including without limitation any policy of Buyer or any such corporation to comply with rules in proposed form or otherwise not yet in effect or to adhere to standards or other requirements in excess of those that would be required by any Requirement of Law.

“Buyer Funding Costs” shall mean the actual funding costs of Buyer or of any corporate entity controlling Buyer associated with any one or more of the Transactions (including any related Additional Purchase Transaction or Future Funding Transaction) or otherwise with Buyer’s obligations under the Transaction Documents.

“Buyer’s Margin Amount” shall mean with respect to any Transaction and any Purchased Asset on any date of determination, the Advance Rate applied to such Purchased Asset at the time that such Transaction was entered into as agreed to by the applicable Seller and Buyer and set forth in the applicable Confirmation (as increased as a result of any Additional Purchase Transaction or Future Funding Transaction), multiplied by the Market Value of such Purchased Asset as of such date of determination; provided, that to the extent the Advance Rate is not set forth in the related Confirmation, the Advance Rate shall be deemed to be the applicable Advance Rate set forth on Schedule I to the Fee Letter.

“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, any and all partner or other equivalent interests in any partnership or limited partnership, and any and all warrants or options to purchase any of the foregoing.

“Cash Equivalents” shall mean, as of any date of determination, marketable securities issued or directly and unconditionally guaranteed as to interest and principal by the United States Government.

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“Cause” shall have the meaning specified in Article 11(v) of this Agreement.

“Change in Law” shall have the meaning specified in Article 3(h).

“Change of Control” shall mean the occurrence of any of the following:

(i) the consummation of a merger or consolidation of Guarantor with or into another entity or any other reorganization, if 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, 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, consolidation or other reorganization;

(ii) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (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 Affiliates of Guarantor and related funds of The Blackstone Group L.P. or to the extent such interests are obtained through public market offering or secondary market trading;

(iii) Guarantor shall cease to own, of record and beneficially, directly or indirectly, one hundred percent (100%) of the outstanding Capital Stock of any Parent and to Control any Parent or any Parent shall cease to own, of record and beneficially, directly or indirectly, one hundred percent (100%) of the outstanding Capital Stock of the applicable Seller and to Control the applicable Seller; or

(iv) a 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 December 20, 2013.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Collection Period” shall mean (i) with respect to the first Remittance Date, the period beginning on and including the Closing Date and continuing to, and including the calendar day immediately preceding such Remittance Date, and (ii) with respect to each subsequent Remittance Date, the period beginning on and including the Remittance Date in the month preceding the month in which such Remittance Date occurs and continuing to and including the calendar day immediately preceding the following Remittance Date.

“Concentration Limit” shall mean the limit on the maximum portion of the aggregate Maximum Purchase Price for all Purchased Assets on each Business Day that may relate to Purchased Assets that are Junior Mortgage Loans or Mezzanine Loans, which limit shall be thirty-five percent (35%) of such then current aggregate Maximum Purchase Price for all Purchased Assets.

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“Confirmation” shall have the meaning specified in Article 3(b)(iv) of this Agreement.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “Control,” “Controlling” and “Controlled” shall have meanings correlative thereto.

“Covenant Compliance Certificate” shall mean a properly completed and executed Covenant Compliance Certificate in form and substance identical to the certificate attached hereto as Exhibit XV.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the date hereof, by and among the Custodian, Sellers and Buyer.

“Custodial Delivery Certificate” shall mean the form executed by the applicable Seller in order to deliver the Purchased Asset Schedule and the Purchased Asset File to Buyer or its designee (including the Custodian) pursuant to Article 7(b) of this Agreement, a form of which is attached hereto as Exhibit IV.

“Custodian” shall mean U.S. Bank National Association, or any successor Custodian appointed by Buyer with the prior written consent of Sellers, not to be unreasonably withheld, conditioned or delayed.

“Debenture” shall mean an English law-governed security agreement pursuant to which a Mortgagor that (a) owns an Underlying Mortgaged Property located in England and Wales and/or (b) is incorporated or established in England and Wales, creates security over such Mortgagor’s entire assets and undertaking (including any such Underlying Mortgaged Property) with respect to a Foreign Purchased Asset.

“Default” shall mean (a) any event which, with the giving of notice, the passage of time, or both, would constitute an Event of Default, and (b) any “Default” as defined in the Other Repurchase Agreement.

“Defaulted Mortgage Asset” shall mean any asset (a) that is thirty (30) days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents or other Asset documentation or, with respect to a Senior Mortgage Loan or Junior Mortgage Loan that is a participation interest, the Underlying Mortgage Loan is thirty (30) days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents, (b) for which there is a breach of the applicable representations and warranties set forth on Exhibit VI hereto, (c) as to which an Act of Insolvency shall have occurred (and, in the case of an involuntary Act of Insolvency, be

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continuing) with respect to the Mortgagor, (d) as to which a non-monetary event of default shall have occurred under any document included in the Purchased Asset File for such Purchased Asset or (e) with respect to which there has been an extension, amendment, waiver, termination, rescission, cancellation, release or other modification to the terms of, or any collateral, guaranty or indemnity for, or the exercise of any material right or remedy of a holder (including all lending, corporate and voting rights, remedies, consents, approvals and waivers) of any related loan or participation document that has an adverse effect on the interest in such asset, as determined by Buyer in its sole discretion and with respect to which Buyer has not consented to in writing.

“Depository” shall mean PNC Bank, National Association, or any successor Depository appointed by Buyer with the prior written consent of Sellers, not to be unreasonably withheld, conditioned or delayed.

“Depository Accounts” shall mean the segregated interest bearing accounts, in the name of Buyer, established at Depository pursuant to this Agreement, and which is subject to the applicable Depository Agreement.

“Depository Agreement” shall mean (i) with respect to the U.S. Purchased Assets, that certain Depository Agreement, dated as of the date hereof, among Buyer, U.S. Seller and Depository, or any successor agreement thereto approved by Buyer in its discretion and (ii) with respect to the Foreign Purchased Assets, that certain Depository Agreement, dated as of the date hereof, among Buyer, Foreign Asset Seller and Depository, or any successor agreement thereto approved by Buyer in its discretion.

“Due Diligence Legal Expenses” shall mean all of the reasonable and necessary out of pocket third-party legal fees, costs and expenses actually incurred by Buyer in connection with the Asset Due Diligence associated with Buyer’s decision as to whether or not to enter into a particular Transaction (including an Additional Purchase Transaction or Future Funding Transaction).

“Due Diligence Package” shall have the meaning specified in Exhibit VIII to this Agreement, and any other similar information with respect to a Foreign Purchased Asset.

“Early Repurchase” shall mean a repurchase of a Purchased Asset as described in Article 3(f) of this Agreement.

“Early Repurchase Date” shall have the meaning specified in Article 3(f) of this Agreement.

“Eligible Assets” shall mean any of the following types of assets or loans (1) that are acceptable to Buyer 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 after the Purchase Date for such Purchased Asset and the initial Transaction), (2) on each day, with respect to which the representations and warranties 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 Buyer, and (3) that are secured directly or indirectly by properties that are multi-family, mixed use, industrial, office

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building or hospitality or such other types of properties that Buyer may agree to in its sole discretion, and are properties located in either (a) the United States of America, its territories or possessions (or elsewhere, in the sole discretion of Buyer) or (b) England:

(i) with respect to U.S. Purchased Assets:

(a) Senior Mortgage Loans;

(b) Junior Mortgage Loans;

(c) Mezzanine Loans; and

(d) any other asset or loan types or classifications that are acceptable to Buyer, subject to its consent on all necessary and appropriate modifications to this Agreement and each of the Transaction Documents, as determined by Buyer in its sole and absolute discretion; and

(ii) with respect to Foreign Purchased Assets:

(a) Senior Mortgage Loans; and

(b) any other asset or loan types or classifications that are acceptable to Buyer, subject to its consent on all necessary and appropriate modifications to this Agreement and each of the Transaction Documents, as determined by Buyer in its sole and absolute discretion.

Notwithstanding anything to the contrary contained in this Agreement, the following shall not be Eligible Assets for purposes of this Agreement, unless otherwise specifically agreed to by Buyer in writing: (1) non-performing loans; (2) loans that are Defaulted Mortgage Assets; (3) any asset, where payment of the Purchase Price with respect thereto would cause the aggregate of all Repurchase Prices to exceed the Maximum Facility Amount; (4) construction loans; (5) Mezzanine Loans or Junior Mortgage Loans backed by hotels with a last dollar loan-to-value ratio in excess of seventy percent (70%); (6) other than as approved by Buyer in its discretion, Assets where the Underlying Mortgaged Property is owned or leased in whole or in part by any Seller, Guarantor or any of their respective Affiliates; (7) Assets that, upon becoming a Purchased Asset would violate the Concentration Limit; or (8) assets secured directly or indirectly by loans described in the preceding clauses (1) through (7).

“Environmental Law” shall mean any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health, safety or hazardous materials, pollution, the conditions of the workplace, or the generation, handling, storage, use, release or spillage of any substance that, alone or in combination with any other, is capable of causing harm to the environment, including, without limitation, any waste, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking

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Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“Environmental Site Assessment” shall have the meaning specified in Exhibit VI.

“Equity Security Agreement” shall mean each agreement creating security over the shares, partnership interests or other equity participation of a Foreign Obligor.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Article 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 Person that is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as a single employer described in Section 414 of the Code.

“Event of Default” shall have the meaning specified in Article 12 of this Agreement.

“Exchange Act” shall have the meaning specified in the definition of “Change of Control”.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to Buyer or any Assignee, or required to be withheld or deducted from a payment to or for the account of Buyer or Assignee, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, Taxes imposed on or measured by net worth (however denominated) and branch profits Taxes, in each case, (i) imposed as a result of Buyer or Assignee being organized under the laws of, or having its principal office or the office from which it books the Transactions 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 such Buyer or Assignee with respect to an interest under this Agreement pursuant to a law in effect on the date on which (i) such Buyer or Assignee acquires such interest hereunder (other than pursuant to an assignment request by Sellers under Article 3(v)) or (ii) Buyer or Assignee changes the office from which it books the Transactions, except in each case to the extent that, pursuant to Article 3(n) or Article 3(q), amounts with respect to such Taxes were payable either to Buyer’s or Assignee’s assignor immediately before such Buyer or Assignee acquired an interest hereunder or to such Buyer or Assignee immediately before it changed the office from which it books the Transactions, (c) Taxes attributable to such Buyer’s or Assignee’s failure to comply with its obligations under Article 3(r) and Article 21(f), and (d) any U.S. federal withholding Taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the 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), any current or future regulations or official interpretations thereof, and any agreements entered into with a Governmental Authority pursuant thereto (including pursuant to Section 1471(b)(1) of the Code).

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“FATF” shall have the meaning specified in the definition of “Prohibited Investor”.

“FCA Regulations” shall have the meaning specified in Article 21(a) of this Agreement.

“FDIA” shall have the meaning specified in Article 21(c) of this Agreement.

“FDICIA” shall have the meaning specified in Article 21(e) of this Agreement.

“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, 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 Buyer from three federal funds brokers of recognized standing selected by it.

“Fee Letter” shall mean that certain letter agreement, dated as of the date hereof, between Buyer and Sellers, as the same may be amended, supplemented or otherwise modified from time to time.

“Filings” shall have the meaning specified in Article 6(i) of this Agreement.

“Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP or, with respect to a Foreign Purchased Asset, IFRS, to be capitalized on a balance sheet of the lessee.

“Fitch” shall mean Fitch Ratings, Inc.

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

“Force Majeure Event” shall mean (a) with respect to Transactions relating to U.S. Purchased Assets, any of the following: (i) there has occurred and is continuing an outbreak of significant hostilities or escalation thereof or other calamity or crisis with respect to the United States or its territories, the effect of which is that, in the reasonable judgment of Buyer, it is impossible or commercially inadvisable to continue to enter into transactions in the repurchase (or “repo”) market or financing market with respect to assets similar to Eligible Assets, (ii) a banking moratorium has been declared and is continuing under federal law, New York law, or by federal or New York Governmental Authorities other applicable authorities, or (iii) Buyer is and continues to be prohibited, as a result of any Requirement of Law, from entering into transactions similar to those contemplated under the Transaction Documents with respect to U.S. Purchased Assets; and (b) with respect to Transactions relating to Foreign Purchased Assets, any of the following: (i) there has occurred and is continuing an outbreak of significant hostilities or escalation thereof or other calamity or crisis the effect of which is that, in the reasonable judgment of Buyer, it is impossible or commercially inadvisable to continue to enter into transactions in the repurchase (or “repo”) market or financing market with respect to assets

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similar to Eligible Assets, (ii) a banking moratorium has been declared and is continuing under federal law, New York law, the law of England and Wales or the United Kingdom, or by England and Wales or the United Kingdom, federal or New York Governmental Authorities other applicable authorities, or (iii) Buyer is and continues to be prohibited, as a result of any Requirement of Law, from entering into transactions similar to those contemplated under the Transaction Documents.

“Foreign Asset Seller” shall have the meaning specified in the Recitals of this Agreement.

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

“Foreign Buyer” shall mean an Assignee that is not a U.S. Person.

“Foreign Finance Documents” shall mean, with respect to a Foreign Purchased Asset, the related loan agreement under which the related Foreign Mortgage Loan is made, any guarantee entered into in relation to such Foreign Purchased Asset that is not contained in such loan agreement, each related Foreign Mortgage Loan Security Agreement, any subordination agreement entered into in relation to any related Subordinated Debt, and any other material documents relating to such Foreign Purchased Asset.

“Foreign Mortgage” shall mean a Debenture.

“Foreign Mortgage Loan” shall mean a Senior Mortgage Loan or a Junior Mortgage Loan relating to an Underlying Mortgaged Property located in England and Wales.

“Foreign Mortgage Loan Security Agreements” shall mean, with respect to a Foreign Purchased Asset: (a) each Equity Security Agreement relating to such Foreign Purchased Asset; (b) a Debenture relating to such Foreign Purchased Asset; (c) each Subordinated Creditor’s Security Agreement relating to such Foreign Purchased Asset; (d) each Account Security Agreement relating to such Foreign Purchased Asset; and (e) any other document creating security in favor of the lenders under the related Foreign Mortgage Loan that is delivered by or on behalf of any Foreign Obligor under such Foreign Mortgage Loan.

“Foreign Obligor” shall mean an entity identified as a borrower and/or a guarantor in the related loan agreement under which a Foreign Mortgage Loan is made or that otherwise creates any security over any asset as security for the obligations of any entity under such Foreign Mortgage Loan.

“Foreign Purchased Asset” shall mean a Purchased Asset with respect to which the Underlying Mortgaged Property is located in England and Wales.

“Fraudulent Transfer Laws” shall have the meaning specified in Article 29(b).

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“Future Funding Amount” shall have the meaning specified in Article 3(y)(i).

“Future Funding Confirmation” shall have the meaning specified in Article 3(y)(i).

“Future Funding Date” shall mean, with respect to any Purchased Asset, the date on which Buyer advances any portion of the Future Funding Amount related to such Purchased Asset.

“Future Funding Transaction” shall mean an additional Transaction requested with respect to any Purchased Asset to provide for the advance of additional funds in connection with any future funding that the applicable Seller is obligated to make to the related Mortgagor under a Purchased Asset.

“Future Funding Transaction Conditions Precedent” shall have the meaning specified in Article 3(y)(iii).

“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 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).

“Guarantee Agreement” shall mean the Guarantee Agreement, dated as of the date hereof, from Guarantor, as guarantor in favor of Buyer, in form and substance acceptable to Buyer.

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

“Hedge-Required Asset” shall mean any Eligible Asset that is a fixed rate Eligible Asset.

“Hedging Transactions” 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 interest rate swap, cap or collar agreement or similar arrangements providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, entered into by any Affiliated Hedge Counterparty or Qualified Hedge Counterparty with any Seller, either generally or under specific contingencies that is required by Buyer, or otherwise pursuant to this Agreement, to hedge the financing of a Hedge-Required Asset, or that such Seller has elected to pledge or transfer to Buyer pursuant to this Agreement.

“IFRS” shall mean international accounting standards within the meaning of the IAS Regulation 1606/2002.

“Income” shall mean, with respect to any Purchased Asset at any time, (x) any collections or receipts of principal, interest, dividends, receipts or other distributions or collections or any

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other amounts related to such Purchased Asset, (y) all net sale proceeds received by a Seller or any Affiliate of a Seller in connection with a sale or liquidation of such Purchased Asset and (z) all payments actually received by Buyer on account of Hedging Transactions.

“Indebtedness” shall mean, for any Person, (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, sale/buy-back agreements or like arrangements; (f) Indebtedness of others guaranteed by such Person; (g) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (h) Indebtedness of general partnerships of which such Person is a general partner or is secondarily or contingently liable (other than by endorsement of instruments in the course of collection), whether by reason of any agreement to acquire such indebtedness to supply or advance sums or otherwise; (i) all net liabilities or obligations under any interest rate, interest rate swap, interest rate cap, interest rate floor, interest rate collar, or other hedging instrument or agreement; and (j) all obligations of such Person under Financing Leases. Notwithstanding the foregoing, bona fide securitizations that fall into this category solely as a result of the application of FAS 166 and/or FAS 167 shall not be considered Indebtedness of any Person.

“Indemnified Amounts” shall have the meaning specified in Article 25 of this Agreement.

“Indemnified Parties” shall have the meaning specified in Article 25 of this Agreement.

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

“Independent Director” shall mean an individual with at least three (3) years of employment experience serving as an independent director at the time of appointment who is provided by, and is in good standing with, CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors or managers or is not acceptable to the Rating Agencies, another nationally recognized company reasonably approved by Buyer, in each case that is not an Affiliate of either Seller and that provides professional independent directors or managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a

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member of the board of directors or board of managers of the applicable Seller and is not, and has never been, and will not while serving as independent director or manager be:

(a) a member (other than an independent, non-economic “springing” member), partner, equityholder, manager, director, officer or employee of either Seller or any Seller’s equityholders or Affiliates (other than as an independent director or manager of an Affiliate of a Seller that is not in the direct chain of ownership of Sellers and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such independent director or manager is employed by a company that routinely provides professional independent directors or managers in the ordinary course of business);

(b) a customer, creditor, supplier or service provider (including provider of professional services) to any Seller or a Seller’s equityholders or Affiliates (other than a nationally recognized company that routinely provides professional independent directors or managers and other corporate services to any Seller or any Seller’s equityholders or Affiliates in the ordinary course of business);

(c) a family member of any such member, partner, equityholder, manager, director, officer, employee, customer, creditor, supplier or service provider; or

(d) a Person that Controls or is under common Control with (whether directly, indirectly or otherwise) any of (a), (b) or (c) above.

A natural person who otherwise satisfies the foregoing definition other than subparagraph (a) by reason of being the independent director or manager of a single purpose bankruptcy remote entity in the direct chain of ownership of a Seller shall not be disqualified from serving as an independent director or manager of a Seller, provided that the fees that such individual earns from serving as independent directors or managers of such Affiliates in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

“Insolvency Law” shall have the meaning specified in the definition of “Act of Insolvency”.

“Insolvency Regulation” shall have the meaning specified in Article 10(l) of this Agreement.

“Interim Servicer” shall mean Midland Loan Services, Inc., or any other servicer approved by Buyer in its commercially reasonable discretion.

“Interim Servicing Agreement” shall mean (i) with respect to all U.S. Purchased Assets, the Interim Servicing Agreement, dated as of the date hereof, by and among the Interim Servicer, U.S. Seller and Buyer and (ii) with respect to all Foreign Purchased Assets, the Interim Servicing Agreement, dated as of the date hereof, by and among Interim Servicer, Foreign Asset Seller and Buyer.

“IRS” shall mean the United States Internal Revenue Service.

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“Junior Mortgage Loan” shall mean a performing mortgage loan evidenced by one or more junior promissory notes or a participation interest evidenced by a certificate of participation in a stabilized or transitional commercial, multifamily fixed or floating rate mortgage loan evidenced by a promissory note, in each case secured by first liens on multi-family or commercial properties.

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

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate determined by Buyer to be (i) the per annum rate for deposits in U.S. dollars (with respect to U.S. Purchased Assets) or Pound Sterling (with respect to Foreign Purchased Assets) for a period equal to the applicable Pricing Rate Period, which appears on the Reuters Screen LIBOR01 Page (or any successor thereto) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the day that is two (2) London Business Days prior to that respective Pricing Rate Determination Date (rounded upwards, if necessary, up 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 Buyer from the Reference Banks for deposits in U.S. dollars (with respect to U.S. Purchased Assets) or Pound Sterling (with respect to Foreign Purchased Assets) for a period equal to the applicable Pricing Rate Period to prime banks in the London Interbank market as of approximately 11:00 a.m., London time, on the day that is two (2) London Business Days prior to that 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 Buyer with such quotations, the rate per annum which Buyer 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 Buyer 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 U.S. $1,000,000.00. Buyer’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. dollar or Pound Sterling deposits, as applicable, in the London Interbank Eurodollar Market at which Buyer prices loans on the date which LIBOR is determined by Buyer as set forth above.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or 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 Financing Lease 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.

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“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, England are not open for business.

“LTV” shall mean, with respect to any Purchased Asset, the ratio of the aggregate outstanding debt (which shall include such Purchased Asset and all debt senior to or pari passu with such Purchased Asset whether advanced on such date or permitted to be advanced in the future) secured, directly or indirectly, by the related Underlying Mortgaged Property(ies), to the aggregate value of such Underlying Mortgaged Property(ies) as determined by Buyer in its commercially reasonable discretion. For purposes of Buyer’s determination, (i) the value of the Underlying Mortgaged Property may be determined using any commercially reasonable method, including without limitation by reference to a recent appraisal, broker price opinions, quotes from a recognized dealer in the commercial real estate market and/or discounted cash flow analysis or other method commonly utilized by Buyer or any other commercially reasonable method and the foregoing shall be deemed for such purposes to be commercially reasonable and (ii) for the avoidance of doubt, Buyer may reduce the value of the Underlying Mortgaged Property for any actual or potential risks posed by any Liens on the related Underlying Mortgaged Property(ies).

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

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

“Margin Notice Deadline” shall mean 1:00 p.m. New York time.

“Mark-to-Market Representations” shall mean the representations and warranties set forth (1) as items (t), (aa), (dd), (oo) and (rr) on Part 1 of Exhibit VI, (2) as item (j) on Part 2 of Exhibit VI, (3) as item (k) on Part 3 of Exhibit VI, and (4) as items (p), (bb), (gg), (ii), (mm) and (qq) on Part 4 of Exhibit VI.

“Market Disruption Event” shall mean either (a) any event or events shall have occurred (with respect to (i) Transactions relating to U.S. Purchased Assets, in the United States or England and Wales or (ii) with respect to Transactions relating to Foreign Purchased Assets, in England and Wales) in the determination of Buyer resulting in the effective absence of a “repo market” or related “lending market” for purchasing (subject to repurchase) or financing debt obligations secured by commercial mortgage loans, mezzanine loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Eligible Assets through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events, or (b) any event or events shall have occurred (with respect to (i) Transactions relating to U.S. Purchased Assets, in the United States or England and Wales or (ii) with respect to Transactions relating to Foreign Purchased Assets, in England and Wales) resulting in the effective absence of a “securities market” for securities backed by Eligible Assets, including, but not limited to the “CMBS/CLO market”, or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by Eligible Assets at prices which would have been reasonable prior to such event or events, in each case as determined by Buyer.

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“Market Value” shall mean, with respect to any Purchased Asset, the market value for such Purchased Asset, as determined by Buyer at the Applicable Standard of Discretion on each Business Day in accordance with this definition. For purposes of Article 4 and 5(e), as applicable, changes in the Market Value of a Purchased Asset that is a Senior Mortgage Loan or a Junior Mortgage Loan shall be determined solely in relation to material positive or negative changes (relative to Buyer’s initial underwriting or the most recent determination of Market Value) in terms of (i) the performance or condition of the Underlying Mortgaged Property(ies) securing the Purchased Asset or other collateral securing or related to the Purchased Asset, (ii) the performance or condition of the Purchased Asset’s borrower (including obligors, guarantors, participants and sponsors) and the borrower on any Underlying Mortgaged Property or other collateral securing such Purchased Asset or the Underlying Mortgage Loan, as applicable, (iii) the performance or condition of the commercial real estate market relevant to the Underlying Mortgaged Property(ies), (iv) any actual or potential risks posed by any Liens on the related Underlying Mortgaged Property(ies), and (v) with respect to Foreign Purchased Assets only, the change in any law, regulation or regulatory policy, tax treaty or regime, licensing requirement or any similar event having an effect on the applicable Foreign Purchased Asset, taken in the aggregate. In addition, the Market Value for any Purchased Asset shall be deemed to be zero on the third (3^rd) Business Day following the occurrence of any of the following with respect to such Purchased Asset: (a) a breach of a representation or warranty contained in Exhibit VI hereto other than a Mark-to-Market Representation or (b) the Repurchase Date with respect to such Purchased Asset occurs without repurchase of such Purchased Asset.

“Material Action” shall mean, as to any Person, to file any insolvency, or reorganization case or proceeding, to institute proceedings to have such Person be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against such Person, to file a petition seeking, or consent to, reorganization or relief with respect to such Person under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for such Person or a substantial part of its property, to make any assignment for the benefit of creditors of such Person, to admit in writing such Person’s inability to pay its debts generally as they become due (unless such admission is true), or to take action in furtherance of any of the foregoing.

“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, operations or financial condition of any Seller or Guarantor taken as a whole, (b) the ability of any Seller or Guarantor to perform its obligations under any of the Transaction Documents, (c) the validity or enforceability of any of the Transaction Documents, (d) the rights and remedies of Buyer under any of the Transaction Documents, (e) the timely payment of any amounts payable under this Agreement or any other Transaction Document.

“Materials of Environmental Concern” shall mean any toxic mold, any petroleum (including, without limitation, crude oil or any fraction thereof) or petroleum products (including, without limitation, gasoline) or any hazardous or toxic substances, materials or wastes, defined as such in or regulated under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls, and urea-formaldehyde insulation.

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“Maturity Date” shall mean December 20, 2016 or the immediately succeeding Business Day, if such day shall not be a Business Day.

“Maximum Advance Purchase Price” shall mean, with respect to a Purchased Asset with respect to which an Additional Purchase Transaction is requested in accordance with the terms of this Agreement, an amount equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset (or the par amount of such Purchased Asset, if lower than Market Value) as re-determined by Buyer as of the proposed date of such requested Additional Purchase Transaction by (ii) the Maximum Advance Rate permitted for such Purchased Asset as set forth in this Agreement.

“Maximum Advance Rate” shall mean, with respect to each Eligible Asset, the “Advance Rate” specified for the applicable Asset Type Grouping in Schedule I attached to the Fee Letter for the loan-to-value ratios shown in Schedule I, or if not shown in Schedule I attached to the Fee Letter or if otherwise agreed to by Sellers and Buyer, in the related Confirmation; provided, however, that (a) the Buyer is not obligated to purchase any Eligible Asset and (b) with respect to any Eligible Asset to be purchased hereunder, the Advance Rates shown in Schedule I attached to the Fee Letter are only indicative of the maximum advance rate available to Sellers, and Buyer is not obligated to purchase any Eligible Asset at such Maximum Advance Rates.

“Maximum Facility Amount” shall mean £153,036,239.

“Maximum Purchase Price” shall mean, with respect to any Purchased Asset, an amount (expressed in the Applicable Currency) equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset (or the par amount of such Purchased Asset, if lower than Market Value) as of the Purchase Date by (ii) the Maximum Advance Rate permitted for such Purchased Asset as set forth in this Agreement.

“Mezzanine Loan” shall mean a performing loan evidenced by a note and primarily secured by pledges of all the equity interests in entities that own, directly or indirectly, multifamily or commercial properties that serve as collateral for Senior Mortgage Loans.

“Mezzanine Note” shall mean the original promissory note that was executed and delivered in connection with a particular Mezzanine Loan.

“Minimum Transfer Amount” shall mean, with respect to each Seller, £153,037.

“Monthly Reporting Package” shall mean the reporting package described on Exhibit III-A.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage” shall mean (i) with respect to a U.S. Purchased Asset, a mortgage, deed of trust, deed to secure debt, charge or other instrument, creating a valid and enforceable first Lien on or a first priority ownership interest in an estate in fee simple or term of years in real property and the improvements thereon, securing a Mortgage Note or similar evidence of indebtedness or (ii) with respect to a Foreign Purchased Asset, a Foreign Mortgage.

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“Mortgage Note” shall mean, (i) with respect to a U.S. Purchased Asset, a note or other evidence of indebtedness of a Mortgagor secured by a Mortgage, including any Senior Mortgage Loan or Junior Mortgage Loan that is a U.S. Purchased Asset, and (ii) with respect to a Foreign Purchased Asset, any evidence of indebtedness of a Mortgagor.

“Mortgagor” shall mean, (i) with respect to a U.S. Purchased Asset, the obligor on a Mortgage Note and the grantor of the related Mortgage, or the obligor on a Mezzanine Note or Participation Certificate, and (ii) with respect to a Foreign Purchased Asset, the Foreign Obligor that is expressed in the loan agreement for the relevant Foreign Mortgage Loan to be the legal or beneficial owner of the relevant Underlying Mortgaged Property.

“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 either Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.

“New Asset” shall mean an Eligible Asset that either Seller proposes to be included as a Purchased Item.

“OFAC” shall have the meaning specified in the definition of “Prohibited Investor”.

“Originated Asset” shall mean any Eligible Asset originated by either Seller.

“Other Connection Taxes” shall mean Taxes imposed as a result of a present connection between such Buyer or Assignee and the jurisdiction imposing such Tax (other than connections arising from such Buyer or Assignee having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other Transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Transaction or any Transaction Document).

“Other Facility” shall mean the Other Repurchase Agreement and any documents related thereto.

“Other Facility Buyer” shall mean the “Buyer”, as defined in the Other Repurchase Agreement.

“Other Facility Purchased Items” shall mean “Purchased Items” as defined in the Other Repurchase Agreement.

“Other Facility Repurchase Obligations” shall mean “Repurchase Obligations” as defined in the Other Repurchase Agreement.

“Other Repurchase Agreement” shall mean that certain Master Repurchase Agreement, dated as of June 28, 2013 (as amended, restated, supplemented or otherwise modified and in effect from time to time), by and among Parlex 4 Finance, LLC, as seller, and Other Facility Buyer, as buyer.

“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

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stamp duty reserve tax) that arise from any payment made under, from 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 for (i) any such Taxes imposed with respect to an assignment, transfer or sale of participation or other interest in or with respect to the Transaction Documents (other than an assignment made pursuant to Article 3(v) hereof), and (ii) for the avoidance of doubt, any Excluded Taxes.

“Parent” shall mean (i) with respect to U.S. Seller, 42-16 Partners, LLC and (ii) with respect to Foreign Asset Seller, 345-40 Partners LLC, each a wholly owned Subsidiary of Guarantor.

“Participants” shall have the meaning set forth in Article 17(a) of this Agreement.

“Participation Certificate” shall mean the original participation certificate that was executed and delivered in connection with a Senior Mortgage Loan or Junior Mortgage Loan that is a participation interest.

“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 either 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 Code, other than a Multiemployer Plan.

“Plan Party” shall have the meaning set forth in Article 20(a) of this Agreement.

“Pledge Agreement” shall mean that certain Amended and Restated Pledge Agreement, dated as of the date hereof, by each Parent in favor of Buyer, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time, pledging all of each Seller’s Capital Stock to Buyer.

“Pound Sterling” shall mean the lawful currency for the time being of the United Kingdom.

“Pre-Existing Asset” shall mean any Eligible Asset that is not an Originated Asset.

“Price Differential” shall mean, with respect to any Purchased Asset as of any date, the aggregate amount obtained by daily application of the applicable Pricing Rate for such Purchased Asset to the outstanding Purchase Price of such Purchased Asset on a 360-day-per-year basis for the actual number of days during each Pricing Rate Period commencing on (and including) the Purchase Date for such Purchased Asset and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by the applicable Seller to Buyer with respect to such Purchased Asset).

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“Pricing Rate” shall mean, for any Pricing Rate Period, an annual rate equal to the sum of (i) LIBOR and (ii) the relevant Applicable Spread, in each case, for the applicable Pricing Rate Period for the related Purchased Asset. The Pricing Rate shall be subject to adjustment and/or conversion as provided in the Transaction Documents or the related Confirmation.

“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate Period with respect to any Transaction, the second (2^nd) London Business Day 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 with respect to any Transaction, 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 such 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.

“Principal Proceeds” shall mean, with respect to any Purchased Asset, any scheduled or unscheduled payment or prepayment of principal (including net sale proceeds) received by the Depository or allocated as principal in respect of any such Purchased Asset.

“Prohibited Investor” shall mean (1) a person or entity whose name appears on the list of Specially Designated Nationals and Blocked Persons by the United States Treasury Department’s Office of Foreign Asset Control (“OFAC”) or any sanctions or “black” list maintained by the Financial Conduct Authority, the Foreign & Commonwealth Office, HM Treasury or the United Nations or any list maintained in accordance with the Common Foreign and Security Policy of the EU, (2) any foreign shell bank, and (3) any person or entity 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. (See http://www.fatf-gati.org for FATF’s list of Non-Cooperative Countries and Territories.)

“Prohibited Person” shall have the meaning set forth in Article 9(b)(xxvii).

“Prohibited Transferee” shall mean any of the Persons listed on Schedule I attached to this Agreement.

“Property Report” shall mean, with respect to a Foreign Purchased Asset, any certificate or report title in relation to the Underlying Mortgaged Property that is delivered as a condition precedent to the making of the related Foreign Mortgage Loan under the loan agreement for such Foreign Mortgage Loan.

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“Purchase Date” shall mean, with respect to any Purchased Asset, the date on which Buyer purchases such Purchased Asset from the applicable Seller in connection with a Transaction.

“Purchase Price” shall mean, with respect to any Purchased Asset, the price at which such Purchased Asset is transferred by the applicable Seller to Buyer on the applicable Purchase Date, adjusted after the Purchase Date as set forth below, not to exceed the Maximum Purchase Price. The Purchase Price as of the Purchase Date for any Purchased Asset shall be an amount (expressed in the Applicable Currency) equal to the product obtained by multiplying (i) the Market Value of such Purchased Asset as of the Purchase Date (or the par amount of such Purchased Asset, if lower than Market Value) by (ii) the Advance Rate for such Purchased Asset, as set forth on the related Confirmation. The Purchase Price of any Purchased Asset shall be (x) increased by an Additional Purchase Amount or Future Funding Amount made by Buyer to the applicable Seller or by any other amounts disbursed by Buyer to such Seller or to the related borrower on behalf of such Seller with respect to such Purchased Asset to the related borrower on behalf of such Seller with respect to such Purchased Asset and (y) decreased by (A) the portion of any Principal Proceeds on such Purchased Asset that are applied pursuant to Article 5 hereof to reduce such Purchase Price and (B) any other amounts paid to Buyer by the applicable Seller specifically to reduce such Purchase Price and that are applied pursuant to Article 5 hereof to reduce such Purchase Price.

Solely for purposes of calculations related to the Maximum Facility Amount, any Transaction denominated in U.S. Dollars shall be converted to the Pound Sterling equivalent by utilizing the Spot Rate quoted by Buyer on the related Purchase Date (which shall be set forth in the applicable Confirmation).

“Purchased Asset” shall mean (i) with respect to any Transaction, the Eligible Asset sold by the related Seller to Buyer in such Transaction and (ii) with respect to the Transactions in general, all Eligible Assets sold by the Sellers to Buyer (other than Purchased Assets that have been repurchased by a Seller).

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

“Purchased Asset Fee” shall have the meaning set forth in the Fee Letter.

“Purchased Asset File” shall mean the documents specified as the “Purchased Asset File” in Article 7(b), together with any additional documents and information required to be delivered to Buyer or its designee (including the Custodian) pursuant to this Agreement; provided that to the extent that Buyer waives, including pursuant to Article 7(b), receipt of any document in connection with the purchase of an Eligible Asset (but not if Buyer merely agrees to accept delivery of such document after the Purchase Date), such document shall not be a required component of the Purchased Asset File until such time as Buyer determines in good faith that such document is necessary or customary for the servicing of the applicable Purchased Asset.

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“Purchased Asset Schedule” shall mean a schedule of Purchased Assets attached to each Trust Receipt and Custodial Delivery Certificate containing information substantially similar to the Asset Information.

“Purchased Items” shall have the meaning specified in Article 6(a) of this Agreement.

“Qualified Hedge Counterparty” shall mean, with respect to any Hedging Transaction, any entity, other than an Affiliated Hedge Counterparty, that (a) qualifies as an “eligible contract participant” as such term is defined in the Commodity Exchange Act (as amended by the Commodity Futures Modernization Act of 2000), (b) the long-term debt of which is rated no less than “A+” by S&P, and “A1” by Moody’s and (c) is reasonably acceptable to Buyer; provided, that with respect to clause (c), if Buyer has approved an entity as a counterparty, it may not thereafter deem such counterparty unacceptable with respect to any previously outstanding Transaction unless clause (a) or clause (b) no longer applies with respect to such counterparty.

“Quarterly Reporting Package” shall mean the reporting package described on Exhibit III-B.

“Rating Agency” shall mean any of Fitch, Moody’s, S&P, DBRS, Inc. and Kroll Bond Rating Agency Inc.

“Re-direction Letter” shall have the meaning specified in Article 5(b).

“Reference Banks” shall mean banks 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. Initially, the Reference Banks shall be JPMorgan Chase Bank, National Association, Barclays Bank, Plc and Deutsche Bank AG. If any such Reference Bank should be unwilling or unable to act as such or if Buyer shall terminate the appointment of any such Reference Bank or if any of the Reference Banks should be removed from the Reuters Monitor Money Rates Service or in any other way fail to meet the qualifications of a Reference Bank, Buyer, in its sole discretion exercised in good faith, may designate alternative banks meeting the criteria specified in clauses (i) and (ii) above.

“Register” shall have the meaning assigned in Article 17(c).

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

“REMIC” shall mean a real estate mortgage investment conduit, within the meaning of Section 860D(a) of the Code.

“Remittance Date” shall mean (i) with respect to Purchased Assets other than Foreign 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 and (ii) with respect to Purchased Assets that are Foreign Purchased Assets, January 23, April 23, July 23 and October 23, or the immediately succeeding Business Day, if such calendar day shall not be a Business Day, or, in each case, such other day as is mutually agreed to by Sellers and Buyer.

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“Repurchase Date” shall mean, with respect to a Purchased Asset, the earliest to occur of (i) any Early Repurchase Date for such Transaction; (ii) the date set forth in the applicable Confirmation; (iii) the Accelerated Repurchase Date; (iv) the Maturity Date; and (v) the date that is two (2) Business Days prior to the maturity date of such Purchased Asset (subject to extension, if applicable, in accordance with the related Purchased Asset Documents); provided that, solely with respect to clause (v), the settlement with respect to such Repurchase Date and Purchased Asset may occur two (2) Business Days later.

“Repurchase Obligations” shall have the meaning assigned thereto in Article 6(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 Buyer to the applicable Seller; such price will be determined in each case as the sum of the (i) outstanding Purchase Price of such Purchased Asset (inclusive of any other additional funds advanced by Buyer in connection with such Purchased Asset including Additional Purchase Amounts and/or Future Funding Amounts); (ii) the accreted and unpaid Price Differential with respect to such Purchased Asset as of the date of such determination (other than, with respect to calculations in connection with the determination of a Margin Deficit, accreted and unpaid Price Differential for the current Pricing Rate Period); (iii) any other amounts due and owing by any Seller to Buyer and its Affiliates pursuant to the terms of this Agreement as of such date; (iv) if such Repurchase Date is not a Remittance Date, except as otherwise expressly set forth in this Agreement, any Breakage Costs payable in connection with such repurchase other than with respect to the determination of a Margin Deficit; (v) any amounts that would be payable to (a positive amount) a Qualified Hedge Counterparty under any related Hedging Transaction, if such Hedging Transaction were terminated on the date of determination, if such determination is in connection with any calculation of Margin Deficit; and (vi) any amounts that would be payable to (a positive amount) an Affiliated Hedge Counterparty under any related Hedging Transaction, if such Hedging Transaction were terminated on the date of determination, if such determination is in connection with any calculation of Margin Deficit (and not in connection with an actual repurchase of a Purchased Asset). In addition to the foregoing, the Repurchase Price shall be decreased by (A) the portion of any Principal Proceeds on such Purchased Asset that is applied pursuant to Article 5 hereof to reduce such Repurchase Price for such Purchased Asset and (B) any other amounts paid to Buyer by or on behalf of the applicable Seller to reduce such Repurchase Price for such Purchased Asset.

“Requested Exceptions Report” shall have the meaning assigned thereto in Article 3(b)(v)(E).

“Required Filing” means registration of particulars of the Mortgage at the Companies Registration Office under the Companies Act 2006 and payment of associated fees; and registration of the Mortgage at the Land Registry or Land Charges Registry in England and Wales and payment of associated fees.

“Requirement of Law” shall mean any 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.

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“Reserve Requirement” shall mean, with respect to any Pricing Rate Period, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect during such Pricing Rate Period (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board of Governors) maintained by Buyer.

“Responsible Officer” shall mean the officers of Seller as designated in its operating agreement.

“RICS” shall mean the then-current Statements of Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors.

“S&P” shall mean Standard and Poor’s Ratings Services.

“SEC” shall have the meaning specified in Article 22(a) of this Agreement.

“Secondary Market Transaction” shall have the meaning set forth in Article 28(a).

“Security Agent” shall mean, with respect to a Foreign Mortgage Loan that is in syndicated form, a security agent or a security trustee appointed by the lenders under such Foreign Mortgage Loan to hold the benefit of the Foreign Mortgage Loan Security Agreements on their behalf.

“Seller” shall mean each entity identified as a “Seller” in the Recitals hereto and such other sellers as may be approved by Buyer in its sole discretion from time to time.

“Senior Mortgage Loan” shall mean, in respect of a U.S. Purchased Asset, a performing senior commercial or multifamily fixed or floating rate senior mortgage loan evidenced by one or more promissory notes or senior participation interests in such a mortgage loan evidenced by a certificate of participation, in each case secured by first liens on multifamily or commercial properties, and, in respect of a Foreign Purchased Asset, a performing senior commercial or multifamily fixed or floating rate senior mortgage loan or senior participation interests in such a mortgage loan evidenced by a certificate of participation, in each case secured by first liens on multifamily or commercial properties.

“Senior Tranche” shall have the meaning set forth in Section 28(a).

“Servicer Notice” shall mean the agreement between Buyer, Seller and the primary servicer, substantially in the form of Exhibit XIII hereto, as amended, supplemented or otherwise modified from time to time.

“Servicing Agreement” shall have the meaning specified in Article 27(b).

“Servicing Records” shall have the meaning specified in Article 27(b).

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

“Servicing Tape” shall have the meaning specified in Exhibit III-A hereto.

“SIPA” shall have the meaning specified in Article 22(a) of this Agreement.

“Spot Rate” shall mean, as of any date of determination, the Pound Sterling/U.S. dollar spot rate determined by Buyer at or about 11:00 a.m. New York Time such date of determination as obtained from the applicable screen on Bloomberg.

“Subordinate Eligible Assets” shall mean Eligible Assets described in items (ii) and (iii) of the definition of Eligible Assets.

“Subordinate Financing” shall have the meaning set forth in Article 28(a).

“Subordinated Creditor’s Security Agreement” shall mean an agreement creating security over Subordinated Debt as security for a Foreign Mortgage Loan.

“Subordinated Debt” shall mean any shareholder or other affiliated debt that is advanced to a Foreign Obligor in connection with (and in accordance with the terms of) a Foreign Mortgage Loan.

“Subsidiary” shall mean, as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests 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 a Seller.

“Survey” shall mean a certified ALTA/ACSM (or applicable state standards for the state in which the collateral is located) survey of the underlying real estate directly or indirectly securing or supporting such Purchased Asset prepared by a registered independent surveyor or engineer and in form and content satisfactory to Buyer and the company issuing the Title Policy for such Property; or, in relation to Purchased Assets relating to Underlying Mortgaged Property located in England and Wales, a valuation of such Underlying Mortgaged Property by a valuer prepared on the basis of the market value as that term is defined in the then current Statements of Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors in form and content satisfactory to Buyer.

“Taxes” shall mean all forms of present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, surcharges, costs, charges, additions to tax or penalties applicable thereto.

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“Title Company” shall mean a nationally-recognized title insurance company reasonably acceptable to Buyer.

“Title Policy” shall have the meaning specified in Exhibit VI.

“Transaction” shall mean a Transaction, as specified in Article 1 of this Agreement and shall include any related Additional Purchase Transaction and any related Future Funding Transaction.

“Transaction Documents” shall mean, collectively, this Agreement, any applicable Schedules, Exhibits and Annexes to this Agreement, the Guarantee Agreement, the Custodial Agreement, the Fee Letter, each Servicing Agreement, each Depository Agreement, the Pledge Agreement, all Hedging Transactions and all Confirmations and assignment documentation executed pursuant to this Agreement in connection with specific Transactions.

“Transfer” shall mean, with respect to any Person, any sale or other whole or partial conveyance of all or any portion of such Person’s assets, or any direct or indirect interest therein to a third party (other than in connection with the transfer of a Purchased Asset by the applicable Seller to Buyer in accordance herewith).

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

“Transferee” shall have the meaning set forth in Article 17(a) hereof.

“Trust Receipt” shall mean a trust receipt issued by Custodian to Buyer confirming the Custodian’s possession of certain Purchased Asset Files that are the property of and held by Custodian for the benefit of Buyer (or any other holder of such trust receipt) or a bailment arrangement with an Acceptable Attorney or such other counsel or other third party acceptable to Buyer in its sole discretion.

“UCC” shall have the meaning specified in Article 6(i) of this Agreement.

“Underlying Mortgage Loan” shall mean, with respect to any Senior Mortgage Loan or Junior Mortgage Loan that is a participation interest or any Mezzanine Loan, a mortgage loan made in respect of the related Underlying Mortgaged Property.

“Underlying Mortgaged Property” shall mean, in the case of:

(i) a Senior Mortgage Loan, the mortgaged property securing such Senior Mortgage Loan, or the mortgaged property securing the mortgage loan in which such Senior Mortgage Loan represents a senior participation interest, as applicable;

(ii) a Junior Mortgage Loan, the mortgaged property securing such Junior Mortgage Loan, or the mortgaged property securing the mortgage loan in which such Junior Mortgage Loan represents a junior participation interest, as applicable, and

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(iii) a Mezzanine Loan, the mortgaged property that is owned by the Person the equity of which is pledged as collateral security for such Mezzanine Loan.

“Underwriting Issues” shall mean, with respect to any Purchased Asset as to which a Seller intends to request a Transaction, Additional Purchase Transaction or Future Funding Transaction, all material information Known by any Seller that, based on the making of reasonable inquiries and the exercise of reasonable care and diligence under the circumstances, would be considered a materially “negative” factor (either separately or in the aggregate with other information), or a material defect in loan documentation or closing deliveries (such as any absence of any material Purchased Asset Document(s)), to a reputable nationally recognized institutional mortgage buyer in determining whether to originate or acquire the Purchased Asset in question.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Purchased Assets” means a Purchased Asset with respect to which the Underlying Mortgaged Property is located in any state of the United States of America.

“U.S. Seller” shall have the meaning specified in the Recitals of this Agreement.

“U.S. Tax Compliance Certificate” shall have the meaning assigned to such term in Article 3(r)(ii)(B)(3).

“VAT” shall mean (a) any tax, interest or penalties imposed in compliance with the European Council directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112) (including, in relation to the United Kingdom, value added tax imposed by the Value Added Tax Act 1994 and supplemental legislation and regulations as amended from time to time); and (b) any other tax, interest or penalties of a similar or equivalent nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or elsewhere.

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. 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”.

ARTICLE 3.

INITIATION; CONFIRMATION; TERMINATION;

FEES; EXTENSION OF MATURITY DATE; EXTENSION OF REPURCHASE DATE

Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of all of the following items, each of which shall be satisfactory in form and substance to Buyer and its counsel:

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(a) The following documents, delivered to Buyer:

(i) this Agreement, duly completed and executed by each of the parties hereto (including all exhibits hereto);

(ii) the Guarantee Agreement, duly completed and executed by each of the parties thereto;

(iii) the Custodial Agreement, duly executed and delivered by each of the parties thereto;

(iv) the Depository Agreements, duly completed and executed by each of the parties thereto;

(v) prior to the consummation of any Purchased Asset Transaction, the Interim Servicing Agreements, duly completed and executed by each of the parties thereto;

(vi) the Pledge Agreement, duly completed and executed by each of the parties thereto;

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

(viii) UCC financing statements for filing in each of the UCC filing jurisdictions described on Exhibit XII hereto, each naming Sellers as “Debtors” and Buyer as “Secured Party” and adequately describing as “Collateral” all of the items set forth in the definition of Purchased Items in this Agreement, together with any other documents necessary or requested by Buyer to perfect the security interests granted by Sellers in favor of Buyer with respect to all relevant jurisdictions, including without limitation England and Wales, under this Agreement or any other Transaction Document such that the lien created in favor of Buyer is senior to the claim of any other creditor of any Seller or Affiliate of any Seller;

(ix) any documents relating to any Hedging Transactions;

(x) opinions of outside counsel to Sellers reasonably acceptable to Buyer (including, but not limited to, those relating to bankruptcy safe harbor, enforceability, corporate matters, applicability of the Investment Company Act of 1940 to Sellers or any Affiliate of either Seller, and security interests under the laws of the applicable states of the United States) and from outside counsel to Buyer with respect to similar matters relating to England and Wales;

(xi) good standing certificates and certified copies of the charters and by-laws (or equivalent documents) of each Seller, Parent and Guarantor and of all corporate or

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other authority for each Seller, Parent and Guarantor with respect to the execution, delivery and performance of the Transaction Documents and each other document to be delivered by each Seller, Parent and Guarantor from time to time in connection herewith (and Buyer may conclusively rely on such certificate until it receives notice in writing from the applicable Seller to the contrary);

(xii) with respect to any Eligible Asset to be purchased hereunder on the related Purchase Date that is not serviced by a Seller, the applicable Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a Servicer Notice, fully executed by each Seller and Servicer;

(xiii) Buyer shall have received payment from Sellers of an amount equal to the amount of actual costs and expenses, including, without limitation, the reasonable fees and expenses of outside counsel to Buyer, incurred by Buyer in connection with the development, preparation and execution of this Agreement, the other Transaction Documents and any other documents prepared in connection herewith or therewith;

(xiv) prior to the consummation of any Purchased Asset Transaction, an opinion of outside counsel to Sellers relating to the enforceability of the Interim Servicing Agreements in a form consistent with the opinion delivered by Seller’s counsel in accordance with the Other Repurchase Agreement;

(xv) prior to the consummation of any Purchased Asset Transaction, an amendment to the Other Repurchase Agreement in form and substance reasonably acceptable to Buyer relating to the cross-collateralization and cross-default of the Other Repurchase Agreement to this Agreement; and

(xvi) all such other and further documents, documentation and legal opinions as Buyer in its commercially reasonable discretion shall reasonably require.

(b) Buyer’s agreement to enter into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect to the consummation thereof and the intended use of the proceeds of the sale:

(i) the sum of (A) the unpaid Repurchase Price for all prior outstanding Transactions and (B) the requested Maximum Purchase Price for the pending Transaction, in each case, shall not exceed the Maximum Facility Amount.

(ii) no Market Disruption Event or Force Majeure Event has occurred and is continuing, no Margin Deficit exists, and no Default or Event of Default has occurred and is continuing under this Agreement or any other Transaction Document.

(iii) the applicable Seller shall have paid to Buyer (x) the Purchased Asset Fee then due and payable with respect to such Transaction pursuant to the Fee Letter and (y) Buyer’s out-of-pocket costs and expenses pursuant to Article 28(e) of this Agreement (which amounts referred to in the preceding sub-clauses (x) and (y) may be paid through a holdback to the Purchase Price) and any other amounts then due and owing to Buyer under this Agreement.

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(iv) the applicable Seller shall give Buyer, prior to 10:00 a.m. New York time and at least two (2) Business Days prior to the proposed Purchase Date, written notice of each Transaction (including the initial Transaction), together with a signed, written confirmation in the form of Exhibit I attached hereto prior to each Transaction (a “Confirmation”). Each Confirmation shall describe the terms of the Transaction, the Purchased Assets, shall identify Buyer and the applicable Seller and shall be executed by both Buyer and the applicable Seller (provided, that, in instances where funds are being wired to an account other than account number 483024227101 at Bank of America, account name “Blackstone Mortgage Trust, Inc.”, ABA # 026009593, the Confirmation shall be signed by two (2) Responsible Officers of the applicable Seller); provided, however, that Buyer shall not be liable to the applicable Seller if it inadvertently acts on a Confirmation that has not been signed by a Responsible Officer of the applicable Seller, and shall set forth (among other things):

(A) the Purchase Date for the Purchased Assets included in the Transaction;

(B) the Purchase Price and Maximum Purchase Price for the Purchased Assets included in the Transaction;

(C) the Repurchase Date for the Purchased Assets included in the Transaction;

(D) the requested Advance Rate and Maximum Advance Rate for the Purchased Assets included in the Transaction;

(E) the amount of any Additional Purchase Amount or Future Funding Amount requested;

(F) the Market Value and LTV of the Purchased Asset and the Underlying Mortgaged Property as of the Purchase Date;

(G) the Applicable Spread;

(H) the currency denomination for the Purchased Asset;

(I) with regard to any U.S. Purchased Asset, the Spot Rate determined by Buyer on the Purchase Date; and

(J) any additional terms or conditions not inconsistent with this Agreement and mutually agreed upon by Buyer and the applicable Seller.

No Confirmation may be amended unless in a writing executed by Buyer and the applicable Seller. Neither (i) changes in the Repurchase Price related to a Purchased Asset due to the application of Principal Proceeds nor (ii) periodic adjustments to LIBOR

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related to a Purchased Asset shall require an amendment to the related Confirmation; provided, however, that the funding of any Additional Purchase Amount or Future Funding Amount shall require an amended and restated Confirmation.

(v) Buyer shall have the right to review the Eligible Assets a Seller proposes to sell to Buyer in any Transaction and to conduct its own due diligence investigation of such Eligible Assets as Buyer determines (each, “Asset Due Diligence”). Buyer shall be entitled to make a determination, in the exercise of its sole discretion, that, in the case of a Transaction, it shall or shall not purchase any or all of the assets proposed to be sold to Buyer by the applicable Seller. On the Purchase Date for the Transaction, which shall be not less than two (2) Business Days following the final approval of an Eligible Asset by Buyer in accordance with Exhibit VIII hereto, the Eligible Assets shall be transferred to Buyer or the Custodian on Buyer’s behalf against the transfer of the Purchase Price to an account of the applicable Seller. Buyer shall inform such Seller of its determination with respect to any such proposed Transaction solely in accordance with Exhibit VIII attached hereto. Upon the approval by Buyer of a particular proposed Transaction, Buyer shall deliver to the related Seller a signed copy of the related Confirmation (which shall not be binding upon such Seller until it is signed and delivered by such Seller and shall not be binding upon Buyer until it is signed and delivered by Buyer) described in clause (iv) above, on or before the scheduled date of the underlying proposed Transaction. Prior to the approval of each proposed Transaction by Buyer, as applicable:

(A) Buyer shall have (i) determined, in its sole and absolute discretion, that the asset proposed to be sold to Buyer by the applicable Seller in such Transaction is an Eligible Asset and (ii) determined conformity to the terms of the Transaction Documents, Buyer’s internal credit and underwriting criteria, and (iii) obtained internal credit approval, to be granted or denied in Buyer’s sole and absolute discretion, for the inclusion of such Eligible Asset as a Purchased Asset in a Transaction, without regard for any prior credit decisions by Buyer or any Affiliate of Buyer, and with the understanding that Buyer shall have the absolute right to change any or all of its internal underwriting criteria at any time, without notice of any kind to such Seller;

(B) Buyer shall have fully completed all external legal due diligence;

(C) Buyer shall have determined the Pricing Rate applicable to the Transaction (including the Applicable Spread) in accordance with Schedule I attached to the Fee Letter (as adjusted by Buyer on a case by case basis in its sole discretion) hereto or as otherwise agreed by Buyer and the applicable Seller;

(D) no Market Disruption Event or Force Majeure Event has occurred and is continuing, no Margin Deficit exists, and no Default or Event of Default has occurred and is continuing under this Agreement or any other Transaction Document;

(E) the applicable Seller shall have delivered to Buyer a list of all exceptions to the representations and warranties relating to the Purchased Asset and any other eligibility criteria for such Purchased Asset of which such Seller has Knowledge (the “Requested Exceptions Report”);

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(F) Buyer shall have waived in writing all exceptions in the Requested Exceptions Report;

(G) both immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the applicable Seller in each of Exhibit VI and Article 9, as applicable, shall be true, correct and complete on and as of such Purchase Date in all respects 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);

(H) subject to Buyer’s right to perform one or more due diligence reviews pursuant to Article 26, Buyer shall have completed its due diligence review of the Purchased Asset File, and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as Buyer in its sole discretion deems appropriate to review and such review shall be satisfactory to Buyer in its sole discretion and Buyer has consented in writing (including by signing the related Confirmation) to the Eligible Asset becoming a Purchased Asset;

(I) with respect to any Eligible Asset to be purchased hereunder on the related Purchase Date that is not serviced by the applicable Seller or an Affiliate thereof, such Seller shall have provided to Buyer a copy of the related Servicing Agreement, certified as a true, correct and complete copy of the original, together with a Servicer Notice, fully executed by Seller and the servicer named in the related Servicing Agreement;

(J) the applicable Seller, regardless of whether this Agreement is executed, shall have paid to Buyer all legal fees and expenses of outside counsel actually incurred by Buyer in connection with the entering into of any Transaction, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of any Transaction hereunder, which amounts, at Buyer’s option, may be withheld from the sale proceeds of any Transaction hereunder;

(K) Buyer shall have determined in accordance with this Agreement that no Margin Deficit shall exist, either immediately prior to or after giving effect to the requested Transaction;

(L) on each Purchase Date Buyer shall have received, in the case of a “Table Funded” Transaction, a Bailee Letter and, from Custodian, an Asset Schedule and Exception Report (as defined in the Custodial Agreement) and a Trust Receipt and with respect to each Purchased Asset, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day;

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(M) Buyer shall have received from the applicable Seller a Release Letter covering each Eligible Asset to be sold to Buyer;

(N) Buyer shall have reasonably determined that no introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions;

(O) the Repurchase Date for such Transaction is not later than the Maturity Date;

(P) the applicable Seller shall have taken such other action as Buyer shall have reasonably requested in order to transfer the Purchased Assets pursuant to this Agreement and to perfect all security interests granted under this Agreement or any other Transaction Document in favor of Buyer with respect to the Purchased Assets;

(Q) with respect to any Eligible Asset to be purchased hereunder, if such Eligible Asset was acquired by the applicable Seller, such Seller shall have disclosed to Buyer the acquisition cost of such Eligible Asset (including therein reasonable supporting documentation required by Buyer, if any);

(R) Buyer shall have received all such other and further documents, documentation and legal opinions (including, without limitation, opinions regarding the perfection of Buyer’s security interests) as Buyer in its reasonable discretion shall reasonably require;

(S) Buyer shall have received a copy of any documents relating to any Hedging Transaction, and the applicable Seller shall have pledged and assigned to Buyer, pursuant to Article 6 hereunder, all of such Seller’s rights under each Hedging Transaction included within a Purchased Asset, if any;

(T) no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by the applicable Seller, however defined therein, shall have occurred and be continuing under any Hedging Transaction required to be assigned hereunder; and

(U) the counterparty to the applicable Seller in any Hedging Transaction shall be an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and, in the case of a Qualified Hedge Counterparty, in the event that such counterparty no longer qualifies as a Qualified Hedge Counterparty, then, at the election of Buyer, such Seller shall ensure that such counterparty posts additional collateral in an amount satisfactory to Buyer under all its Hedging Transactions with such Seller, or such Seller shall immediately terminate the Hedging Transactions with such counterparty and enter into new Hedging Transactions with a Qualified Hedge Counterparty.

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(c) Upon the satisfaction of all conditions set forth in Articles 3(a) and (b), the applicable Seller shall sell, transfer, convey and assign to Buyer on a servicing-released basis all of such Seller’s right, title and interest in and to each Purchased Asset, together with all related Servicing Rights against the transfer of the Purchase Price to an account of such Seller (which Purchase Price shall be funded in the currency denominated on the applicable Confirmation). With respect to any Transaction, the Pricing Rate shall be determined initially on the Pricing Rate Determination Date applicable to the first Pricing Rate Period for such Transaction, and shall be reset on the Pricing Rate Determination Date for each of the next succeeding Pricing Rate Periods for such Transaction. Buyer or its agent shall determine in accordance with the terms of this Agreement the Pricing Rate on each Pricing Rate Determination Date for the related Pricing Rate Period in Buyer’s sole and absolute discretion, and notify such Seller in writing two (2) Business Days prior to the next Pricing Rate Period of such Pricing Rate for such period. Notwithstanding any other provision herein or in any other Transaction Document, Buyer shall not be obligated to enter into any Transaction or purchase any Asset and may terminate a Transaction at any time for any or no reason until such time as Buyer has executed and delivered a Confirmation and funded the Purchase Price with respect to any Transaction.

(d) Each Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby. In the event of any conflict between the terms of such Confirmation and the terms of this Agreement, other than with respect to the Advance Rate or the applicable Price Differential set forth in the related Confirmation, the Confirmation shall prevail.

(e) On the Repurchase Date (including any Early Repurchase Date) for any Transaction, termination of the Transaction will be effected by (A) payment by the applicable Seller to Buyer of an amount equal to the sum of (1) the Repurchase Price for the applicable Purchased Asset and (2) any other amounts then due and payable under this Agreement (including, without limitation, Article 3(g)), any other Transaction Documents, and any related Hedging Transactions with respect to such Purchased Asset and (B) transfer to such Seller of the Purchased Asset being repurchased and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, such Seller pursuant to Article 5 of this Agreement). In the event that a Purchased Asset is repurchased as of the date set forth in clause (vi) of the definition of Repurchase Date, the settlement of the payment of the Repurchase Price and other amounts due in connection with the repurchase of such Purchased Asset pursuant to this Article 3(e) shall occur no later than two (2) Business Days after such Repurchase Date. For the avoidance of doubt, until such settlement occurs and such amounts are paid, all rights of Buyer with respect to the applicable Purchased Asset, including all liens and security interests granted in favor of Buyer in connection therewith, shall continue in full force and effect.

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

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(i) such Seller notifies Buyer 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, no later than three (3) Business Days prior to such Early Repurchase Date (unless such Early Repurchase is in connection with curing a Margin Deficit or breach of any representation or warranty set forth in Exhibit VI, or in connection with any of the events described in Article 3(h) having occurred, in which case such notice shall not be required);

(ii) on such Early Repurchase Date, such Seller pays to Buyer an amount equal to the sum of (A) the Repurchase Price for the applicable Purchased Asset and (B) any other amounts due and payable under this Agreement (including, without limitation, Article 3(g)) and under any related Hedging Transactions with respect to such Purchased Asset against transfer to such Seller or its agent of such Purchased Assets;

(iii) on such Early Repurchase Date, in addition to the amounts set forth in subclause (ii) above, such Seller pays to Buyer, on account of all other Purchased Assets then subject to Transactions, an amount sufficient to reduce the Purchase Price for each such Purchased Asset to an amount equal to the Buyer’s Margin Amount for each such Purchased Asset; and

(iv) such Early Repurchase does not cause such Seller to violate the covenant set forth in Article 10(k) hereof.

(g) If prior to the first day of any Pricing Rate Period with respect to any Transaction, (i) Buyer shall have determined in the exercise of its reasonable business judgment (which determination shall be conclusive and binding upon the applicable Seller) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR for such Pricing Rate Period, or (ii) LIBOR determined or to be determined for such Pricing Rate Period will not adequately and fairly reflect the cost to Buyer (as determined and certified by Buyer) of making or maintaining Transactions during such Pricing Rate Period, Buyer shall give written notice (which may be by email) thereof to Sellers as soon as practicable thereafter. If such notice is given, the Pricing Rate with respect to such Transaction for such Pricing Rate Period, and for any subsequent Pricing Rate Periods until such notice has been withdrawn by Buyer, shall be a per annum rate equal to the Federal Funds Rate plus the Applicable Spread (the “Alternative Rate”).

(h) Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation of any such Requirement of Law or the application thereof shall make it unlawful (a “Change in Law”) for Buyer to enter into or maintain Transactions as contemplated by the Transaction Documents, (a) the commitment of Buyer hereunder to enter into new Transactions, Future Funding Transactions or Additional Purchase Transactions and to continue Transactions as such shall forthwith be canceled, and (b) if a Change in Law makes it unlawful to maintain Transactions with a Pricing Rate based on LIBOR, the Transactions then outstanding shall be converted automatically to Alternative Rate Transactions on the last day of the then current Pricing Rate Period 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

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the last day of the then current Pricing Rate Period with respect to such Transaction, the applicable Seller shall pay to Buyer such amounts, if any, as may be required pursuant to Article 3(i) of this Agreement.

(i) Upon written demand by Buyer, each Seller shall, jointly and severally, indemnify Buyer and hold Buyer harmless from any actual out-of-pocket loss, cost or expense (including, without limitation, reasonable attorneys’ fees and disbursements of outside counsel) that Buyer may sustain or incur as a consequence of (i) default by any Seller in repurchasing any Purchased Asset after any Seller has given written notice in accordance with Article 3(f) of an Early Repurchase, (ii) any payment of the Repurchase Price on any day other than a Remittance Date, including Breakage Costs, (iii) a default by any Seller in selling Eligible Assets after such Seller has notified Buyer of a proposed Transaction and Buyer has agreed in writing to purchase such Eligible Assets in accordance with the provisions of this Agreement, (iv) Buyer’s enforcement of the terms of any of the Transaction Documents, (v) any actions taken to perfect or continue any Lien created under any Transaction Documents, and/or (vi) Buyer entering into any Transaction or any of the Transaction Documents or owning any Purchased Item. A certificate as to such costs, losses, damages and expenses, setting forth the calculations therefor shall be submitted promptly in writing by Buyer to Sellers and shall be prima facie evidence of the information set forth therein.

(j) If the adoption of or any change in any Requirement of Law or Buyer Compliance Policy or in the interpretation of any such Requirement of Law or Buyer Compliance Policy, the application thereof or the compliance therewith, or the compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority having jurisdiction over Buyer, in each case whether by a Governmental Authority, by Buyer or by a corporation controlling Buyer:

(i) shall subject Buyer to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligation, or its deposits, reserves, other liabilities or capital attributable thereto;

(ii) 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 Buyer that is not otherwise included in the determination of LIBOR hereunder; or

(iii) shall impose on Buyer any other condition;

and the result of any of the foregoing is to increase the cost to Buyer, by an amount that Buyer deems to be material, of entering into, continuing or maintaining Transactions, Additional Purchase Transactions or Future Funding Transactions or to reduce any amount receivable under the Transaction Documents in respect thereof; then, in any such case, Sellers shall promptly pay Buyer, upon its demand, any additional amounts necessary to compensate Buyer for such increased cost or reduced amount receivable. Such notification as to the calculation of any additional amounts payable pursuant to this Article 3(j) shall be submitted by Buyer to Sellers

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and shall be prima facie evidence of such additional amounts. This covenant shall survive the termination of this Agreement and the repurchase by Sellers of any or all of the Purchased Assets.

(k) If Buyer shall have determined that the adoption of or any change in any Requirement of Law or Buyer Compliance Policy made subsequent to the date hereof regarding capital adequacy or otherwise affecting the Buyer Funding Costs, or in the interpretation of any such Requirement of Law or Buyer Compliance Policy, the application thereof or the compliance therewith, in each case whether by a Governmental Authority, by Buyer or by any corporation controlling Buyer (including, without limitation, any request or directive regarding capital adequacy or otherwise affecting the Buyer Funding Costs (whether or not having the force of law) from any Governmental Authority or any Buyer Compliance Policy related to such request or directive), does or shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of any one or more of the Transactions, Additional Purchase Transactions or Future Funding Transactions or otherwise as a consequence of its obligations under the Transaction Documents to a level below that which Buyer or such corporation could have achieved, but for such adoption, change, interpretation, application or compliance, by an amount that Buyer deems, in the exercise of its reasonable business judgment, to be material, then, from time to time, after submission by Buyer to Sellers of a written request therefor, Sellers shall pay to Buyer such additional amount or amounts as will reimburse Buyer for the actual damages, losses, costs and expenses incurred by Buyer in connection with each such reduction; provided that Buyer has then-currently made the same determination with respect to a similarly situated repurchase customer in a situation where Buyer has similar contractual rights. Such notification as to the calculation of any additional amounts payable pursuant to this subsection shall be submitted by Buyer to Seller and shall be prima facie evidence of such additional amounts. This covenant shall survive the termination of this Agreement and the repurchase by Sellers of any or all of the Purchased Assets.

(l) If either Seller repurchases Purchased Assets on a day other than the last day of a Pricing Rate Period, such Seller shall indemnify Buyer and hold Buyer harmless from any actual out-of-pocket losses, costs and/or expenses which Buyer sustains as a direct consequence thereof (“Breakage Costs”), in each case for the remainder of the applicable Pricing Rate Period. Buyer shall deliver to such Seller a written statement setting forth the amount and basis of determination of any Breakage Costs in reasonable detail, it being agreed that such statement and the method of its calculation shall be conclusive and binding upon such Seller absent manifest error. This Article 3(l) shall survive termination of this Agreement and the repurchase of all Purchased Assets subject to Transactions hereunder.

(m) [Reserved]

(n) Any and all payments by or on account of any obligation of either Seller under this Agreement or any other Transaction Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the

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sum payable by the applicable Seller to the applicable Buyer or Assignee shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Article 3(n) or Article 3(o)) the applicable Buyer or Assignee receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(o) Each Seller shall timely pay (i) any Other Taxes imposed on such Seller to the relevant Governmental Authority in accordance with Applicable Law, and (ii) any Other Taxes imposed on the Buyer or Assignee upon written notice from such Person setting forth in reasonable detail the calculation of such Other Taxes.

(p) As soon as practicable after any payment of Taxes by a Seller to a Governmental Authority pursuant to Article 3(o) or Article 3(q), such Seller shall deliver to Buyer or Assignee, as applicable, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Buyer or Assignee, as applicable.

(q) Each Seller shall indemnify Buyer and each Assignee, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under Article 3(o) or this Article 3(q)) payable or paid by Buyer or such Assignee or required to be withheld or deducted from a payment to such Buyer or Assignee and any reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that no payment shall be required under this Article 3(q) for any claim for Indemnified Taxes that were paid by Buyer or such Assignee two hundred and seventy (270) or more days prior to the date of such claim. A certificate setting forth in reasonable detail the calculation of the amount of such payment or liability delivered to such Seller by Buyer or such Assignee shall be conclusive absent manifest error.

(r)(i) Any Buyer and any Assignee that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to Sellers, at the time or times reasonably requested by Sellers, such properly completed and executed documentation reasonably requested by Sellers as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, Buyer or Assignee, if reasonably requested by Sellers, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Sellers as will enable Sellers to determine whether or not Buyer or Assignee 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 clauses (ii)(A), (ii)(B), (ii)(D) and (iii) below) shall not be required if in Buyer’s or Assignee’s reasonable judgment such completion, execution or submission would subject Buyer or such Assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Buyer or such Assignee.

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(ii) Without limiting the generality of the foregoing,

(A) Buyer and any Assignee that is a U.S. Person shall deliver to Sellers on or prior to the date on which Buyer or such Assignee acquires an interest under any Transaction Document (and from time to time thereafter upon the reasonable request of Sellers), executed originals of IRS Form W-9 certifying that Buyer and such Assignee is exempt from U.S. federal backup withholding tax;

(B) any Foreign Buyer shall, to the extent it is legally entitled to do so, deliver to Sellers (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Buyer acquires an interest under this Agreement (and from time to time thereafter upon the reasonable request of Sellers), whichever of the following is applicable:

(1) in the case of a Foreign Buyer claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under this Agreement, executed originals of IRS Form W-8BEN 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 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 originals of IRS Form W-8ECI;

(3) in the case of a Foreign Buyer claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit XI-1 to the effect that such Foreign Buyer is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Seller within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Buyer is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit XI-2 or Exhibit XI-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Buyer is a partnership and one or more direct or indirect partners of such Foreign Buyer are claiming the portfolio interest exemption, such Foreign Buyer may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit XI-4 on behalf of each such direct and indirect partner;

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(C) any Foreign Buyer shall, to the extent it is legally entitled to do so, deliver to the applicable Seller (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Buyer acquires an interest under this Agreement (and from time to time thereafter upon the reasonable request of Seller), executed 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 such Seller to determine the withholding or deduction required to be made; and

(D) if a payment made to Buyer or Assignee under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if Buyer or Assignee were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Buyer or such Assignee shall deliver to the applicable Seller at the time or times prescribed by law and at such time or times reasonably requested by such Seller such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the 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 Buyer or such Assignee has complied with Buyer’s or such Assignee’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.

(iii) Buyer and each Assignee agrees that if any form or certification described in items (A), (B), (C) or (D) above it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the applicable Seller in writing of its legal inability to do so.

(s) 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 Article 3(o) or, Article 3(q) (including by the payment of additional amounts pursuant to Article 3(i)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under Article 3(i), Article 3(o) and/or Article 3(q) with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket 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 Article 3(s) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Article 3(s), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Article 3(s) 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 indemnification payments or additional amounts giving rise to such refund 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.

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(t)(i) Notwithstanding anything to the contrary in any Transaction Document, all amounts payable by any Seller to Buyer and/or any Assignee under a Transaction Document, that (in whole or in part) constitute consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT that is chargeable on such supply or supplies. Subject to Article 3(t)(ii), if VAT is or becomes chargeable on any supply made by Buyer and/or any Assignee to a Seller under a Transaction Document, with respect to a Foreign Purchased Asset only, such Seller shall pay Buyer and/or Assignee (in addition to, and at the same time as, paying the consideration for such supply) an amount equal to the amount of the VAT and Buyer and/or relevant Assignee shall promptly provide an appropriate VAT invoice to such Seller.

(ii) Where a Transaction Document, with respect to a Foreign Purchased Asset only, requires a Seller to reimburse Buyer and/or any Assignee for any costs or expenses, such Seller shall, at the same time, reimburse and indemnify Buyer and/or any relevant Assignee for the full amount of all VAT incurred by Buyer and/or such Assignee in respect of those costs or expenses. The amount payable pursuant to this subclause shall be the amount that Buyer and/or any relevant Assignee reasonably determines is the amount that it is not entitled to claim as a VAT credit or VAT repayment from the relevant tax authority in respect of the VAT.

(u) Each party’s obligations under clauses (n) through (s) of this Article 3 shall survive any assignment of rights by, or the replacement of, Buyer or Assignee, the termination of the Agreement and the repayment, satisfaction or discharge of all obligations under this Agreement.

(v) If any Buyer or Assignee requests compensation under Article 3 or, if a Seller is required to pay any Indemnified Taxes or additional amounts to any Buyer or any Assignee or any Governmental Authority for the account of any Buyer or Assignee pursuant to Article 3(i), Article 3(o) or Article 3(q), or if any Buyer or Assignee defaults in its obligations under this Agreement, then Sellers may, at their sole expense and effort, upon notice to such Buyer or Assignee, require such Buyer or Assignee to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Article 17), all its interests, rights (other than its existing rights to payments pursuant to Articles 3(g) or 3(i)) and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Buyer, if a Buyer accepts such assignment); provided that (i) such Buyer shall have received payment of an amount equal to the Repurchase Price for all Transactions, Price Differential accreted with respect thereto, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding Repurchase Price principal and accreted Price Differential and fees) or Sellers (in the case of all other amounts) and (ii) in the case of any such assignment resulting from a claim for compensation under Article 3(i) or payments required to be made pursuant to Article 3(g), such assignment will result in a reduction in such compensation or payments. A Buyer or Assignee shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Buyer or Assignee or otherwise, the circumstances entitling Sellers to require such assignment and delegation cease to apply.

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(w) If at any time prior to the Maturity Date, a non-use fee or other similar charge is assessed against Buyer internally, Sellers shall, monthly on demand from Buyer, provided that Buyer has then-currently made the same determination with respect to a similarly situated repurchase customer in a situation where Buyer has similar contractual rights, reimburse Buyer for the exact amount of each such fee, as and when originally assessed, with each such assessment and payment to be in addition to the monthly Price Differential payments otherwise due in accordance with the applicable provisions of this Agreement.

(x)(i) If there exists Additional Purchase Available Amount with respect to a Purchased Asset, the related Seller may submit to Buyer a request that Buyer increase the Purchase Price for such Purchased Asset in an amount requested by such Seller, which amount shall be no less than £153,037 or, with respect to U.S. Purchased Assets, the then-current equivalent of such amount based on the Spot Rate in the Applicable Currency and shall not exceed the Additional Purchase Available Amount as of the proposed date for such increase to the Purchase Price for such Purchased Asset (each such transaction, an “Additional Purchase Transaction” and the amount so funded with respect to each Additional Purchase Transaction, the “Additional Purchase Amount”). Notwithstanding the foregoing, such Seller may not request, and Buyer shall not be obligated to pay, any Additional Purchase Amount unless no uncured Margin Deficit, Force Majeure Event, Default or Event of Default has occurred and is continuing or would result from the funding of such Additional Purchase Transaction. Upon delivery of a request by a Seller for an Additional Purchase Transaction, and Buyer’s satisfaction that all terms and conditions set forth in this Article 3(x) have been complied with (including, without limitation, those in the immediately preceding sentence), Buyer shall, within one (1) Business Day following such Seller’s request therefore, provided that for Foreign Purchased Assets only if Buyer receives such Seller’s request prior to 10:00 a.m. New York time, pay the Additional Purchase Amount for each such Additional Purchase Transaction. In connection with any such Additional Purchase Transaction, Buyer and such Seller shall execute and deliver to each other an updated Confirmation setting forth the new outstanding Purchase Price with respect to such Transaction. Notwithstanding the above or any other provision in this Agreement, to the extent that the Purchase Price of any Purchased Asset is reduced by the related Seller pursuant to Article 3(z) of this Agreement to an amount that is less than fifty percent (50%) of the Maximum Purchase Price of such Purchased Asset, the Additional Purchase Available Amount with respect to such Purchased Asset shall thereafter (unless Buyer, in its sole discretion, determines not to apply the following reduction) be reduced by the amount equal to the difference between (i) fifty percent (50%) of the Maximum Purchase Price of such Purchased Asset and (ii) the Purchase Price of such Purchased Asset following the application of such reduction to the Purchase Price pursuant to Article 3(z) which causes the Purchase Price to be less than fifty percent (50%) of the Maximum Purchase Price.

(ii) Buyer’s agreement to enter into any Additional Purchase Transaction with respect to any Purchased Asset is further subject to the satisfaction, in Buyer’s reasonable discretion, of the following conditions precedent (the “Additional Purchase Transaction Conditions Precedent”):

(A) Buyer shall have determined the Pricing Rate applicable to the related Transaction (including the Applicable Spread) in accordance with Schedule I attached to the Fee Letter or as otherwise agreed by Buyer and the applicable Seller;

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(B) no uncured Margin Deficit, Force Majeure Event, Default or Event of Default has occurred and is continuing or would result from the funding of such Additional Purchase Transaction;

(C) both immediately prior to the requested Additional Purchase Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the applicable Seller in each of Exhibit VI and Article 9, as applicable, shall be true, correct and complete on and as of the date of such Additional Purchase Transaction in all respects 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) except to the extent disclosed in a Requested Exceptions Report previously accepted by Buyer; and

(D) the sum of (A) the unpaid Repurchase Price for all outstanding Transactions and (B) the requested Additional Purchase Amount, shall not exceed the Maximum Facility Amount as of such date.

(iii) In connection with any such Additional Purchase Transaction, Buyer and the applicable Seller shall execute and deliver to each other an updated Confirmation setting forth the new outstanding Purchase Price with respect to such Transaction.

(iv) No decision on the part of Buyer to enter into an Additional Purchase Transaction or the advance of any Additional Purchase Amount shall be deemed to be a waiver of any covenant, representation or warranty or other obligation of such Seller contained herein.

(y)(i) A Seller may request a Future Funding Transaction by giving Buyer written notice thereof together with a written Confirmation signed by an officer of such Seller (a “Future Funding Confirmation”) prior to 10:00 a.m. New York time at least two (2) Business Days prior to the proposed Future Funding Date. Buyer shall be entitled to make a determination, in the exercise of its sole and absolute discretion, that, in the case of a Future Funding Transaction, it shall or shall not enter into the Future Funding Transaction, and notwithstanding any other provision herein, Buyer shall have no obligation to enter into any Future Funding Transaction. If Buyer determines it will enter into a Future Funding Transaction and that the Future Funding Transaction Conditions Precedent have been satisfied with respect to the applicable Future Funding Transaction in its sole and absolute discretion, Buyer shall deliver to the related Seller a countersigned copy of the related Future Funding Confirmation on or before the Future Funding Date for the proposed Future Funding Transaction. On the Future Funding Date for the applicable Future Funding Transaction, funds in the amount stated in the Future Funding Confirmation (the “Future Funding Amount”) shall be transferred by Buyer to the Purchased Asset’s underlying obligor. Each Future Funding Confirmation, together with this Agreement, shall be conclusive evidence of the terms of the Future Funding Transaction covered thereby. If terms in a Future Funding Confirmation are inconsistent with terms in this Agreement with respect to a particular Future Funding Transaction, the Future Funding Confirmation shall prevail.

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(ii) While Buyer and each Seller hereby acknowledge and agree that it is not intended that Buyer re-underwrite each Purchased Asset in connection with a Future Funding Transaction request, any Seller requesting a Future Funding Transaction shall provide Buyer with all confirmatory or updated documentation that is reasonably requested by Buyer in connection with Buyer’s evaluation of the Future Funding Transaction for the related Purchased Asset as Buyer reasonably determines to be necessary and appropriate and Buyer shall conduct such additional diligence based on such information as Buyer determines to be necessary or appropriate and such Seller shall provide Buyer such additional information with respect to such due diligence as Buyer may reasonably request.

(iii) Buyer’s agreement to enter into any Future Funding Transaction with respect to any Purchased Asset is subject to the satisfaction, in Buyer’s reasonable discretion, of the following conditions precedent (the “Future Funding Transaction Conditions Precedent”):

(A) if, in connection with the entry into the initial Transaction relating to the Purchased Asset that is the subject of a Future Funding Transaction, Buyer and the applicable Seller agreed upon additional conditions precedent which are required to be satisfied with respect to such Purchased Asset and that are specified in the related Future Funding Confirmation, then such additional conditions precedent have been satisfied;

(B) Buyer shall have (i) determined, in its sole and absolute discretion, that the related Purchased Asset is an Eligible Asset and (ii) determined conformity to the terms of the Transaction Documents, Buyer’s internal credit and underwriting criteria, and (iii) obtained internal credit approval, to be granted or denied in Buyer’s sole and absolute discretion, for the Future Funding Transaction, without regard for any prior credit decisions by Buyer or any Affiliate of Buyer, and with the understanding that Buyer shall have the absolute right to change any or all of its internal underwriting criteria at any time, without notice of any kind to the applicable Seller;

(C) Buyer shall have fully completed all external due diligence as discussed in clause (ii) above;

(D) Buyer shall have determined the Pricing Rate applicable to the related Transaction (including the Applicable Spread) in accordance with Schedule I attached to the Fee Letter (as adjusted by Buyer on a case by case basis in its sole discretion) hereto or as otherwise agreed by Buyer and the applicable Seller;

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(E) no Material Adverse Effect or Force Majeure Event shall have occurred, no Margin Deficit shall exist, and no Default or Event of Default under this Agreement shall have occurred and be continuing;

(F) both immediately prior to the requested Future Funding Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the applicable Seller in each of Exhibit VI and Article 9, as applicable, shall be true, correct and complete on and as of the date of such Future Funding Transaction in all respects 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);

(G) the LTV of the related Purchased Asset taking into account the requested advance of the Future Funding Amount is no greater than the LTV of the related Purchased Asset as of the Purchase Date;

(H) following such increase in the outstanding Purchase Price attributable to the Future Funding Amount, no Margin Deficit shall exist;

(I) the Future Funding Amount shall be equal to or greater than $250,000;

(J) the sum of (A) the unpaid Repurchase Price for all outstanding Transactions and (B) the requested Future Funding Amount shall not exceed the Maximum Facility Amount as of such date;

(K) the applicable Seller shall have delivered to Buyer a certification that all conditions precedent to the future funding obligation under the Purchased Asset documentation have been satisfied in all material respects and provided Buyer with any evidence or documentation thereto Buyer may request;

(L) the applicable Seller shall have paid to Buyer all legal fees and expenses of outside counsel actually incurred by Buyer in connection with the entering into of the Future Funding Transaction, including, without limitation, costs associated with due diligence, recording or other administrative expenses necessary or incidental to the execution of the Future Funding Transaction, which amounts, at Buyer’s option, may be withheld from the sale proceeds of the Future Funding Transaction;

(M) on the date of the Future Funding Transaction Buyer shall have received, in the case of a “Table Funded” Transaction, a Bailee Letter and, from Custodian, an Asset Schedule and Exception Report (as defined in the Custodial Agreement) and a Trust Receipt and with respect to each Purchased Asset, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day;

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(N) Buyer shall have received from the applicable Seller a Release Letter covering the related Purchased Asset;

(O) Buyer shall have reasonably determined that no introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Future Funding Transactions;

(P) the Repurchase Date for the related Transaction is not later than the Maturity Date;

(Q) the applicable Seller shall have taken such other action as Buyer shall have reasonably requested in order to transfer the Purchased Assets pursuant to this Agreement and to perfect all security interests granted under this Agreement or any other Transaction Document in favor of Buyer with respect to the Purchased Assets;

(R) Buyer shall have received all such other and further documents, documentation and legal opinions (including, without limitation, opinions regarding the perfection of Buyer’s security interests) as Buyer in its reasonable discretion shall reasonably require;

(S) Buyer shall have received a copy of any documents relating to any Hedging Transaction, and the applicable Seller shall have pledged and assigned to Buyer, pursuant to Article 6 hereunder, all of such Seller’s rights under each Hedging Transaction included within a Purchased Asset, if any;

(T) no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by either Seller, however defined therein, shall have occurred and be continuing under any Hedging Transaction required to be assigned hereunder;

(U) the counterparty to the applicable Seller in any Hedging Transaction shall be an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and, in the case of a Qualified Hedge Counterparty, in the event that such counterparty no longer qualifies as a Qualified Hedge Counterparty, then, at the election of Buyer, such Seller shall ensure that such counterparty posts additional collateral in an amount satisfactory to Buyer under all its Hedging Transactions with such Seller, or such Seller shall immediately terminate the Hedging Transactions with such counterparty and enter into new Hedging Transactions with a Qualified Hedge Counterparty; and

(V) the applicable Seller shall pay to Buyer on the Future Funding Date the Purchased Asset Fee attributable to the Future Funding Amount.

(iv) If Buyer determines, in accordance with Article 3(y)(i) that the Future Funding Transaction Conditions Precedent have not been satisfied (or otherwise waived

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by Buyer in its sole discretion), and that Buyer shall not advance the Future Funding Advance requested by the applicable Seller, then, on any Business Day thereafter, such Seller may elect, in its sole discretion, to repurchase the related Purchased Asset.

(v) No decision on the part of Buyer to enter into a Future Funding Transaction or the advance of any Future Funding Amount shall be deemed to be a waiver of any covenant, representation or warranty or other obligation of any Seller contained herein.

(z) On any Business Day prior to the Repurchase Date, the applicable Seller shall have the right, from time to time, to transfer cash to Buyer for the purpose of reducing the outstanding Purchase Price of, but not terminating, a Transaction and without the release of any Purchased Items; provided, that (i) any such reduction in outstanding Purchase Price occurring on a date other than a Remittance Date shall be required to be accompanied by payment of (A) all unpaid accrued Price Differential as of the applicable Business Day on the amount of such reduction and (B) any other amounts due and payable by such Seller under this Agreement and under any related Hedging Transactions with respect to such Purchased Asset, (ii) such transfer of cash to Buyer shall be in an amount no less than £612,145 or, with respect to U.S. Purchased Assets, the then-current equivalent of such amount based on the Spot Rate in the Applicable Currency, (iii) the applicable Seller shall provide Buyer with three (3) Business Days prior notice with respect to a reduction in outstanding Purchase Price in an amount greater than £3,060,725 or, with respect to U.S. Purchased Assets, the then-current equivalent of such amount based on the Spot Rate in the Applicable Currency, occurring on any date that is not a Remittance Date; and (iv) with respect to Foreign Purchased Assets only, such Seller shall deliver a revised, executed Confirmation no later than 10:00 a.m. New York time at least two (2) Business Days prior to the proposed Purchase Price reduction. In connection with any such reduction of outstanding Purchase Price pursuant to this Article 3(z), Buyer and such Seller shall execute and deliver to each other an updated Confirmation setting forth the new outstanding Purchase Price with respect to such Transaction.

ARTICLE 4.

MARGIN MAINTENANCE

(a) If at any time (x) Buyer’s Margin Amount for all U.S. Purchased Assets is less than the aggregate Purchase Price outstanding for all U.S. Purchased Assets and/or (y) Buyer’s Margin Amount for all Foreign Purchased Assets is less than the aggregate Purchase Price outstanding for all Foreign Purchased Assets (in each case, a “Margin Deficit”), then Buyer may by written notice (which may be in electronic form) delivered to Sellers in the form of Exhibit X (a “Margin Deficit Notice”) require Sellers to, at Sellers’ option, to the extent such Margin Deficit equals or exceeds the Minimum Transfer Amount, (i) repurchase some or all of the related Purchased Assets at their respective Repurchase Prices, (ii) make a payment in reduction of the Repurchase Price of some or all of such Purchased Assets in immediately available funds, (iii) deliver collateral in the form of cash or Cash Equivalents, or (iv) choose any combination of the foregoing, such that, after giving effect to such transfers, repurchases and payments, Buyer’s Margin Amount for all the related Purchased Assets shall be equal to or greater than the aggregate Repurchase Price for all the related Purchased Assets. In connection with the delivery of cash or Cash Equivalents in accordance with clause (iii) above, Sellers shall deliver to Buyer

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any additional documents (including, without limitation, to the extent not covered by any previously delivered legal opinions, one or more opinions of counsel reasonably satisfactory to Buyer) and take any actions reasonably necessary in Buyer’s discretion for Buyer to have a first priority, perfected security interest in such cash or Cash Equivalents, as applicable. With respect to clauses (i) and (ii) above, such payments and/or repurchases shall be made by the related Seller in the Applicable Currency of the related Purchased Asset.

(b) If a Margin Deficit Notice is given by Buyer under Article 4(a) of this Agreement on any Business Day at or prior to the Margin Notice Deadline, Sellers shall cure the related Margin Deficit as provided in Article 4(a) prior to 5:00 p.m. New York time no later than one (1) Business Day following the day such Margin Deficit Notice is given by Buyer. If any Margin Deficit Notice is given by Buyer on any Business Day at any time after the Margin Notice Deadline, Sellers shall cure the related Margin Deficit as provided in Article 4(a) by no later than prior to 5:00 p.m. New York time no later than two (2) Business Days following the day such Margin Deficit Notice is given by Buyer.

(c) The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Sellers and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Sellers.

ARTICLE 5.

INCOME PAYMENTS AND PRINCIPAL PROCEEDS

(a) Each Depository Account shall be established at the Depository and shall be subject to the applicable Depository Agreement concurrently with the execution and delivery of this Agreement by Sellers and Buyer. Pursuant to each Depository Agreement, Buyer shall have sole dominion and control (including “control” within the meaning of the UCC (as defined in Section 6(i) below)) over the related Depository Account. Each Depository Account shall at all times be subject to the related Depository Agreement. All Income or other amounts in respect of the Purchased Assets, as well as any interest received from the reinvestment of such Income or other amounts, shall be deposited directly by the applicable Mortgagor into the applicable Depository Account in accordance with the Re-direction Letter. Depository shall then apply such Income in accordance with the applicable provisions of Articles 5(c) through 5(e) of this Agreement.

(b) Contemporaneously with the sale to Buyer of any Purchased Asset, Sellers shall deliver to each Mortgagor, issuer of a participation interest, servicer and paying agent or similar Person (however described) with respect to each Purchased Asset or borrower under a Purchased Asset an irrevocable direction letter substantially in the form of Exhibit XVI (the “Re-direction Letter”), instructing, as applicable, the Mortgagor, issuer of a participation interest, servicer, trustee or similar Person (however described) with respect to such Purchased Asset or borrower (as applicable) to pay all amounts payable under the related Purchased Asset into the applicable Depository Account. If a Mortgagor, issuer of a participation interest, servicer, paying agent or similar Person (however described) with respect to the Purchased Asset or borrower forwards any Income or other amounts with respect to a Purchased Asset to either Seller or any Affiliate

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of a Seller rather than directly into the applicable Depository Account, such Seller shall, or shall cause such Affiliate to, (i) deliver an additional Re-direction Letter to the applicable Mortgagor, issuer of a participation interest, servicer or paying agent with respect to the Purchased Asset or borrower and make other reasonable best efforts to cause such Mortgagor, issuer of a participation interest, servicer or paying agent with respect to the Purchased Asset or borrower to forward such amounts directly to the applicable Depository Account and (ii) deposit in the applicable Depository Account any such amounts within one (1) Business Day of such Seller’s (or its Affiliate’s) receipt thereof.

(c) So long as no Event of Default with respect to any Purchased Asset shall have occurred and be continuing, all Income or other amounts received by the Depository in respect of any Purchased Asset (other than Principal Proceeds) during each Collection Period shall be applied by the Depository on the related Remittance Date in the following order of priority:

(i) first, (i) to the Custodian for payment of the document custodian fees payable to Custodian pursuant to the Custodian Agreement, then (ii) to the Depository for payment of fees payable to the Depository in connection with each Depository Account and then (iii) to the Interim Servicer for payment of the loan servicing fees payable monthly to the Interim Servicer pursuant plus the reasonable out-of-pocket costs and expenses, in each case, as required under the applicable Interim Servicing Agreement as in effect from time to time;

(ii) second, pro rata, (A) to Buyer, an amount equal to the Price Differential that has accreted and is outstanding as of such Remittance Date and (B) to any Affiliated Hedge Counterparty, any amount then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to a Purchased Asset;

(iii) third, to Buyer, an amount equal to any other amounts then due and payable to Buyer or its Affiliates under any Transaction Document (including any outstanding Margin Deficits);

(iv) fourth, to make a payment to Other Facility Buyer or its Affiliates on account of any other amounts then due and payable under the Other Facility pursuant to Article 5(c)(i), (ii) and (iii) of the Other Repurchase Agreement until such other amounts then due and payable pursuant to Article 5(c)(i), (ii) and (iii) of the Other Repurchase Agreement have been reduced to zero, each such payment to be deposited into the Depository Account (as defined in the Other Repurchase Agreement) and allocated in accordance with the Other Repurchase Agreement; and

(v) fifth, to the applicable Seller, the remainder, if any.

Notwithstanding the foregoing, so long as any Default has occurred and is continuing, but has not become an Event of Default, all amounts remaining in each Depository Account on each Remittance Date after application to clauses (i) through (iii) above shall remain in such Depository Account until such Default has either (x) been cured to Buyer’s satisfaction, in which case such remaining amounts shall be distributed to the applicable Seller pursuant to clause (iv) above, or (y) has matured into an Event of Default, in which case such remaining amounts shall be distributed pursuant to Article 5(e) below.

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(d) So long as no Event of Default with respect to any Purchased Asset shall have occurred and be continuing, any Principal Proceeds shall be applied by the Depository on the Business Day following the Business Day on which such funds are deposited in the applicable Depository Account in the following order of priority:

(i) first, pro rata, (A) to Buyer, until the Purchase Price for such Purchased Asset has been reduced to the Buyer’s Margin Amount for such Purchased Asset as of the date of such payment (as determined by Buyer after giving effect to such Principal Proceeds and application of net sales proceeds, if applicable) and (B) solely with respect to any Hedging Transaction with an Affiliated Hedge Counterparty related to such Purchased Asset, to such Affiliated Hedge Counterparty an amount equal to any accrued and unpaid breakage costs or termination payments under such Hedging Transaction related to such Purchased Asset;

(ii) second, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document (including any outstanding Margin Deficits);

(iii) third, to make a payment to Other Facility Buyer or its Affiliates on account of any other amounts then due and payable under the Other Facility pursuant to Article 5(d)(i) and (ii) of the Other Repurchase Agreement until such other amounts then due and payable pursuant to Article 5(d)(i) and (ii) of the Other Repurchase Agreement have been reduced to zero, each such payment to be deposited into the Depository Account (as defined in the Other Repurchase Agreement) in accordance with the Other Repurchase Agreement;

(iv) fourth, to the applicable Seller, the remainder of such Principal Proceeds.

Notwithstanding the foregoing, so long as any Default has occurred and is continuing, but has not become an Event of Default, all amounts remaining in each Depository Account on each Remittance Date after application to clauses (i) through (ii) above shall remain in such Depository Account until such Default has either (x) been cured to Buyer’s satisfaction, in which case such remaining amounts shall be distributed to the applicable Seller pursuant to clause (iii) above, or (y) has matured into an Event of Default, in which case such remaining amounts shall be distributed pursuant to Article 5(e) below.

(e) If an Event of Default shall have occurred and be continuing, all Income (including, without limitation, any Principal Proceeds or any other amounts received, without regard to their source) or any other amounts received by the Depository in respect of a Purchased Asset shall be applied by the Depository on the Business Day next following the Business Day on which such funds are deposited in the applicable Depository Account in the following order of priority:

(i) first, (i) to the Custodian for payment of the document custodian fees payable to Custodian pursuant to the Custodian Agreement, then (ii) to the Depository for

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payment of fees payable to the Depository in connection with each Depository Account and then (iii) to the Interim Servicer for payment of the loan servicing fees payable monthly to the Interim Servicer pursuant plus the reasonable out-of-pocket costs and expenses, in each case, as required under the applicable Interim Servicing Agreement as in effect from time to time;

(ii) second, pro rata, (A) to Buyer, an amount equal to the Price Differential that has accreted and is outstanding in respect of all of the Purchased Assets as of such Business Day and (B) to any Affiliated Hedge Counterparty, any amounts then due and payable to an Affiliated Hedge Counterparty under any Hedging Transaction related to such Purchased Asset;

(iii) third, to Buyer, on account of the Repurchase Price of such Purchased Asset until the Repurchase Price for such Purchased Asset has been reduced to zero;

(iv) fourth, to Buyer, on account of the Repurchase Price of all Purchased Assets until the Repurchase Price for all such Purchased Assets has been reduced to zero;

(v) fifth, to Buyer, an amount equal to any other amounts due and owing to Buyer or its Affiliates under any Transaction Document;

(vi) sixth, to make a payment to Other Facility Buyer or its Affiliates on account of the repurchase price of all purchased assets related to the Other Repurchase Agreement and any other amounts due and owing under the Other Facility until the repurchase price for such purchased assets and such other amounts due and owing have been reduced to zero, each such payment to be deposited into the Depository Account (as defined in the Other Repurchase Agreement) and allocated in Other Facility Buyer’s sole discretion; and

(vii) seventh, to the applicable Seller, any remainder.

ARTICLE 6.

SECURITY INTEREST

(a) Buyer and each Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Sellers secured by the Purchased Assets. However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by each Seller of all of such Seller’s obligations to Buyer 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 Buyer, each Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items (as defined below) to Buyer to secure the payment of the Repurchase Price on all Transactions to which it is a party and all other amounts owing by any Seller or its Affiliates to Buyer and any of Buyer’s present or future Affiliates hereunder, including, without limitation, amounts owing pursuant to Article 25, under the other Transaction Documents, including any obligations of such Seller under any Hedging Transaction

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entered into with any Affiliated Hedge Counterparty (including, without limitation, all amounts anticipated to be paid to Buyer by an Affiliated Hedge Counterparty as provided for in the definition of Repurchase Price or otherwise) and the Other Facility Repurchase Obligations, and to secure the obligation of such Seller or its designee to service the Purchased Assets in conformity with Article 27 and any other obligation of such Seller to Buyer (collectively, the “Repurchase Obligations”). Each Seller shall mark its computer records and tapes to evidence the interests granted to Buyer hereunder. All of each 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, is hereinafter referred to as the “Purchased Items”:

(i) the Purchased Assets and all “securities accounts” (as defined in Article 8-501(a) of the UCC) to which any or all of the Purchased Assets are credited;

(ii) any and all interests of each Seller in, to and under the applicable Depository Account and all monies from time to time on deposit in each Depository Account;

(iii) any cash or Cash Equivalents delivered to Buyer in accordance with Article 4(a);

(iv) the Purchased Asset Documents, Servicing Agreements, Servicing Records, Servicing Rights, all servicing fees relating to the Purchased Assets, insurance policies relating to the Purchased Assets, and collection and escrow accounts and letters of credit relating to the Purchased Assets;

(v) Each Seller’s right under each Hedging Transaction, if any, relating to the Purchased Assets to secure the Repurchase Obligations;

(vi) 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;

(vii) any other items, amounts, rights or properties transferred or pledged by a Seller to Buyer under any of the Transaction Documents; and

(viii) 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.

(b) U.S. Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Other Facility Purchased Items to Buyer to secure the payment of the Repurchase Obligations. U.S. Seller shall mark its computer records and tapes to evidence the interests granted to Buyer hereunder.

(c) Foreign Asset Seller also hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and under the Purchased Items to Other Facility Buyer to secure the payment of the Other Facility Repurchase Obligations. Foreign Asset Seller shall mark its computer records and tapes to evidence the interests granted to Other Facility Buyer hereunder.

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(d) Buyer and Other Facility Buyer each hereby acknowledges and agrees that (i) Buyer’s security interest in the Other Facility Purchased Items as security for the Repurchase Obligations shall at all times be junior and subordinate in all respects to Other Facility Buyer’s security interest in the Other Facility Purchased Items as security for the Other Facility Repurchase Obligations and (ii) U.S. Seller is expressly permitted by Other Facility Buyer and Buyer to enter into this Agreement and the Transaction Documents, and the representations, warranties and covenants of U.S. Seller under the Other Repurchase Agreement shall be deemed modified to permit this Agreement and the transactions contemplated hereby, mutatis mutandis (including, without limitation, Section 9(b)(xiii), Section 9(b)(xxv), Section 10(d) of the Other Repurchase Agreement). The preceding subordination of Buyer’s security interest in the Other Facility Purchased Items affects only the relative priority of Buyer’s security interest in the Other Facility Purchased Items, and shall not subordinate the Repurchase Obligations in right of payment to the Other Facility Repurchase Obligations.

(e) Other Facility Buyer hereby acknowledges and agrees that Other Facility Buyer’s security interest in the Purchased Items as security for the Other Facility Repurchase Obligations shall at all times be junior and subordinate in all respects to Buyer’s security interest in the Purchased Items as security for the Repurchase Obligations. The preceding subordination of Other Facility Buyer’s security interest in the Purchased Items affects only the relative priority of Other Facility Buyer’s security interest in the Purchased Items, and shall not subordinate the Other Facility Repurchase Obligations in right of payment to the Repurchase Obligations.

(f) Buyer agrees to act as agent for and on behalf of the Affiliated Hedge Counterparties (including without limitation for purposes of Sections 9-313(c), 8-106(d)(3), 9-104(a) and 9-106(a) of the UCC) with respect to the security interest granted hereby to secure the obligations owing to the Affiliated Hedge Counterparties under any Hedging Transactions, including, without limitation, with respect to the Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to the Custodial Agreement.

(g) Buyer agrees to act as agent for and on behalf of Other Facility Buyer (including without limitation for purposes of Sections 9-313(c), 8-106(d)(3), 9-104(a) and 9-106(a) of the UCC) with respect to the security interest granted hereby to secure the obligations owing to Other Facility Buyer under the Other Facility, including, without limitation, with respect to the Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to the Custodial Agreement.

(h) Other Facility Buyer agrees to act as agent for and on behalf of Buyer (including without limitation for purposes of Sections 9-313(c), 8-106(d)(3), 9-104(a) and 9-106(a) of the UCC) with respect to the security interest granted hereby to secure the obligations owing to Buyer under the Transaction Documents, including, without limitation, with respect to the “Purchased Assets” and the “Purchased Asset Files”, each as defined in the Other Repurchase Agreement.

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(i) Buyer’s security interest in the Purchased Items and the Other Facility Purchased Items shall terminate only upon termination of each Seller’s obligations under this Agreement and the other Transaction Documents, the Other Facility, all Hedging Transactions and the documents delivered in connection herewith and therewith. Upon such termination, Buyer shall promptly deliver to Sellers such UCC termination statements and other release documents as may be commercially reasonable and return the Purchased Assets to the applicable Seller and reconvey the Purchased Items to the applicable Seller and release its security interest in the Purchased Items and the Other Facility Purchased Items. For purposes of the grant of the security interest pursuant to this Article 6, this Agreement shall be deemed to constitute a security agreement under the New York Uniform Commercial Code (the “UCC”). Buyer 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, (a) Buyer, at Sellers’ sole cost and expense, as applicable, shall cause to be filed in such locations as may be necessary to perfect and maintain perfection and priority of the security interest granted hereby, UCC financing statements and continuation statements (collectively, the “Filings”), and shall forward copies of such Filings to the applicable Seller upon the filing thereof, and (b) Sellers shall from time to time take such further actions as may be reasonably requested by Buyer to maintain and continue the perfection and priority of the security interest granted hereby (including marking its records and files to evidence the interests granted to Buyer hereunder). For the avoidance of doubt, notwithstanding clause (vi) of the definition of Repurchase Date and the proviso thereto, Buyer’s security interest in any particular Purchased Asset shall not terminate until each Seller has fully paid the related Repurchase Price.

(j) Each Seller acknowledges that neither it nor Guarantor has any right to service the Purchased Assets but only has rights as a party to the Interim Servicing Agreement or any other servicing agreement with respect to the Purchased Assets. Without limiting the generality of the foregoing and in the event that a Seller or Guarantor is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, each Seller and Guarantor grants, assigns and pledges to Buyer a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. 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)(A)(xi) of the Bankruptcy Code.

ARTICLE 7.

PAYMENT, TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, ownership of the Purchased Asset shall be transferred to Buyer or its designee (including the Custodian) against the simultaneous transfer of the Purchase Price in immediately available funds to an account of the applicable Seller specified in the Confirmation relating to such Transaction and otherwise in accordance with this Agreement.

(b)(i) With respect to each Transaction, the applicable Seller shall deliver or cause to be delivered to Buyer or its designee the Custodial Delivery Certificate in the form attached hereto as Exhibit IV, provided, that notwithstanding the foregoing, upon request of the applicable Seller, Buyer in its sole but good faith discretion may elect to permit such Seller to make such

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delivery by not later than the third (3^rd) Business Day after the related Purchase Date, so long as such Seller causes an Acceptable Attorney, Title Company or other Person acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or prior to such Purchase Date. Subject to Article 7(c), in connection with each sale, transfer, conveyance and assignment of a Purchased Asset, on or prior to each Purchase Date with respect to such Purchased Asset, the applicable Seller shall deliver or cause to be delivered and released to the Custodian a copy or original of each document as specified in the Purchased Asset File (as defined in the Custodial Agreement, and collectively, the “Purchased Asset File”), pertaining to each of the Purchased Assets identified in the Custodial Delivery Certificate delivered therewith, together with any other documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion.

(ii) With respect to each Additional Purchase Transaction and Future Funding Transaction, the applicable Seller shall deliver or cause to be delivered to Buyer or its designee an updated Custodial Delivery Certificate that includes any additional documents delivered and/or executed in connection with any such Additional Purchase Transaction or Future Funding Transaction, as applicable, provided, that notwithstanding the foregoing, upon request of the applicable Seller, Buyer in its sole but good faith discretion may elect to permit such Seller to make such delivery by not later than the third (3^rd) Business Day after the related date of the Additional Purchase Transaction or Future Funding Transaction, as applicable, so long as such Seller causes an Acceptable Attorney, Title Company or other Person acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or prior to such date. Subject to Article 7(c), on or prior to that date of an Additional Purchase Transaction or Future Funding Transaction, as applicable, such Seller shall deliver or cause to be delivered and released to the Custodian a copy or original of each additional document delivered and/or executed in connection with each such Additional Purchase Transaction or Future Funding Transaction, as applicable, as specified in the Asset File (as defined in the Custodial Agreement), pertaining to each of the Purchased Assets identified in the Custodial Delivery Certificate delivered therewith, together with any other documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion.

(c) From time to time, each Seller shall forward to the Custodian 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 (including without limitation in connection with an Additional Purchase Transaction or Future Funding Transaction), and upon receipt of any such other documents, the Custodian shall hold such other documents as Buyer shall request from time to time. With respect to any documents that have been delivered or are being delivered to recording offices for recording and have not been returned to such Seller in time to permit their delivery hereunder at the time required, in lieu of delivering such original documents, such Seller shall deliver to Buyer a true copy thereof with an officer’s certificate certifying that such copy is a true, correct and complete copy of the original, which has been transmitted for recordation. Such Seller shall deliver such original documents to the Custodian promptly when they are received. With respect to all of the Purchased Assets delivered by such Seller to Buyer or its designee (including the Custodian), such Seller shall execute an omnibus power of attorney substantially in the form of Exhibit V-A or Exhibit V-B, as applicable, attached hereto irrevocably appointing Buyer its attorney-in-fact

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with full power to take the actions described therein, on the terms and conditions set forth therein; provided that Buyer agrees not to and shall not exercise its rights under such power of attorney unless a monetary Default, material non-monetary Default or an Event of Default has occurred and is continuing. Notwithstanding the immediately preceding proviso, in the event that a material non-monetary Default has occurred and is continuing, Buyer agrees it shall use commercially reasonable efforts to notify such Seller of any action described above and such Seller shall promptly take such action. Buyer agrees not to exercise the rights described above under such power of attorney for two (2) Business Days subsequent to such material non-monetary Default unless (x) Buyer reasonably believes that Buyer needs to take action sooner in order to protect its interest in the Purchased Items or (y) a monetary Default or an Event of Default has occurred and is continuing. If the applicable Seller fails to complete such action within such two (2) Business Day period, then Buyer shall, upon notice to such Seller, be entitled to exercise its rights under such power of attorney, provided that a failure to provide any notice or refrain from taking any action under this Article 7(c) shall not limit or waive Buyer’s rights to exercise such rights or invalidate such action or in any way create any liability whatsoever on the part of Buyer for exercising such rights. Buyer shall deposit the Purchased Asset Files representing the Purchased Assets, or direct that the Purchased Asset Files be deposited directly, with the Custodian. The Purchased Asset Files shall be maintained in accordance with the Custodial Agreement. If a Purchased Asset File is not delivered to Buyer or its designee (including the Custodian), such Purchased Asset File shall be held in trust by such Seller or its designee for the benefit of Buyer as the owner thereof. Seller or its designee shall maintain a copy of the Purchased Asset File and the originals of the Purchased Asset File not delivered to Buyer or its designee. The possession of the Purchased Asset File by a Seller or its designee is at the will of Buyer 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 such Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to Buyer. Such Seller or its designee (including the Custodian) shall release its custody of the Purchased Asset File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Assets, is in connection with a repurchase of any Purchased Asset by such Seller or as otherwise required by law.

(d) Subject to clause (e) below, Buyer hereby grants to the applicable Seller a revocable option to direct Buyer with respect to the exercise of all voting and corporate rights with respect to the related Purchased Assets sold by such Seller and to vote, take corporate actions and exercise any rights in connection with such Purchased Assets, so long as no monetary Default, material non-monetary Default, or Event of Default has occurred and is continuing. Such revocable option is not evidence of any ownership or other interest or right of either Seller in any Purchased Asset. Upon the occurrence and during the continuation of (i) a monetary Default, (ii) a material non-monetary Default, (iii) an Event of Default or (iv) with respect to the exercise of any voting or corporate rights with respect to the Purchased Assets that could be reasonably determined to materially impair the Market Value, and in each case subject to the provisions of the Purchased Asset Documents, the revocable option discussed above shall be deemed to automatically terminate and Buyer shall be entitled to exercise all voting and corporate rights with respect to the Purchased Assets without regard to any Seller’s instructions (including, but not limited to, if an Act of Insolvency shall occur with respect to any Seller, to the extent any Seller controls or is entitled to control selection of any servicer, Buyer may

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transfer any or all of such servicing to an entity satisfactory to Buyer); provided further, that with respect to clause (iv) above, Buyer shall use commercially reasonable efforts to consult in good faith with the applicable Seller regarding the exercise of any such voting or corporate rights, provided that a failure by Buyer to consult with such Seller under this Article 7(d) shall not limit or waive Buyer’s rights to exercise such voting and corporate rights or invalidate such vote or exercise of rights or in any way create any liability whatsoever on the part of Buyer for exercising such rights.

(e) Notwithstanding the rights granted to any Seller pursuant to clause (d) above, the Sellers shall not, and shall not permit the Interim Servicer, the primary servicer or any other servicer of any Purchased Asset to consent to any amendments, modifications, waivers, releases, sales, transfers, dispositions or other resolutions relating to the Purchased Assets (including, with respect to a Purchased Asset that is a participation interest, relating to the Underlying Mortgage Loan) (except to the extent contemplated or required by the related Purchased Asset Documents) including, without limitation, the following actions set forth in clauses (i) through (v) below, without the prior written consent of Buyer:

(i) any forbearance, extension or other modification or waiver with respect to any Purchased Asset;

(ii) the release, discharge or reduction of any: (A) lien on any Underlying Mortgaged Property or collateral for the related Purchased Asset or Purchased Item or (B) lien or claim on any letters of credit and other non-cash collateral that is required to be maintained pursuant to the Purchased Asset Documents or underlying mortgage loan documents, if any;

(iii) the extension of credit (including increasing the terms of any existing credit) to any Person with respect to any Purchased Asset or Underlying Mortgage Loan or Underlying Mortgaged Property;

(iv) any sale or other disposition of any Purchased Asset, Underlying Mortgage Loan, Underlying Mortgaged Property or any other material property or collateral related thereto; and

(v) the incurrence of any lien or other encumbrance other than as expressly created hereunder or under any other Transaction Document.

(f) Notwithstanding the provisions of Article 7(b) above requiring the execution of the Custodial Delivery Certificate and corresponding delivery of the Purchased Asset File to the Custodian on or prior to the related Purchase Date, with respect to each Transaction involving a Purchased Asset that is identified in the related Confirmation as a “Table Funded” Transaction, the applicable Seller shall, in lieu of effectuating the delivery of all or a portion of the Purchased Asset File on or prior to the related Purchase Date: (i) deliver to the Custodian by facsimile or email on or before the related Purchase Date for the Transaction copies of: (A) with respect to U.S. Purchased Assets, the promissory note(s), original stock certificate or Participation Certificate in favor of such Seller or, with respect to Foreign Purchased Assets, the original loan agreement and any other evidence of indebtedness, in any case, evidencing the making of the

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Purchased Asset, with such Seller’s endorsement of such instrument to Buyer (in the case of a U.S. Purchased Asset) or a Transfer Certificate (in the case of a Foreign Purchased Asset), (B) the mortgage, security agreement or similar item creating the security interest in the related collateral and the applicable assignment document evidencing the transfer to Buyer, (C) such other components of the Purchased Asset File as Buyer may require on a case by case basis with respect to the particular Transaction, and (D) evidence satisfactory to Buyer that all documents necessary to perfect such Seller’s (and, by means of assignment to Buyer on the Purchase Date, Buyer’s) interest in the Purchased Items for the Purchased Asset, (ii) deliver to Buyer and Custodian a Bailee Letter from an Acceptable Attorney, Title Company or other Person acceptable to Buyer on or prior to such Purchase Date, sufficient to establish Buyer’s ownership and perfected security interest in such Purchased Asset and (iii) not later than the third (3^rd) Business Day following the Purchase Date, deliver to Buyer the Custodial Delivery Certificate and to the Custodian the entire Purchased Asset File.

ARTICLE 8.

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

(a) Title to all Purchased Items shall pass to Buyer on the applicable Purchase Date, and Buyer shall have free and unrestricted use of all Purchased Items, subject, however, to the terms of this Agreement. Nothing in this Agreement or any other Transaction Document shall preclude Buyer from engaging in repurchase transactions with the Purchased Items or otherwise selling, transferring, pledging, repledging, hypothecating, or rehypothecating the Purchased Items on terms and conditions that shall be in Buyer’s discretion, but no such transaction shall relieve Buyer of its obligations to transfer the related Purchased Assets to the applicable Seller pursuant to Article 3 of this Agreement, or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, the applicable Seller pursuant to Article 5 hereof, or of Buyer’s obligations pursuant to Article 17.

(b) Nothing contained in this Agreement or any other Transaction Document shall obligate Buyer to segregate any Purchased Assets delivered to Buyer by either Seller. Notwithstanding anything to the contrary in this Agreement or any other Transaction Document, no Purchased Asset shall remain in the custody of either Seller or an Affiliate of either Seller.

ARTICLE 9.

REPRESENTATIONS AND WARRANTIES

(a) Each Seller and Buyer represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect, (v) the execution, delivery and performance of this Agreement and the

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Transactions hereunder will not violate any law, ordinance or rule applicable to it or its organizational documents or any agreement by which it is bound or by which any of its assets are affected and (vi) it has not dealt with any broker, investment banker, agent, or other Person (other than Buyer or an Affiliate of Buyer in the case of each Seller) who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to any of the Transaction Documents. On the Purchase Date for any Transaction for the purchase of any Purchased Assets by Buyer from a Seller and any Transaction hereunder and covenants that at all times while this Agreement and any Transaction thereunder is in effect, Buyer and such Seller shall each be deemed to repeat all the foregoing representations made by it.

(b) In addition to the representations and warranties in subsection (a) above, each Seller represents and warrants to Buyer and Other Facility Buyer as of the date of this Agreement and will be deemed to represent and warrant to Buyer and Other Facility Buyer as of the Purchase Date for the purchase of any Purchased Assets by Buyer from such Seller and any Transaction thereunder and covenants that at all times while this Agreement and any Transaction thereunder is in effect, unless otherwise stated herein:

(i) Organization. Seller is duly organized, validly existing and in good standing under the laws and regulations of the jurisdiction of Seller’s incorporation or organization, as the case may be, and is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of Seller’s business, except where failure to so qualify could not be reasonably likely to have a Material Adverse Effect. Seller 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 has the power to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents.

(ii) Due Execution; Enforceability. The Transaction Documents have been or will be duly executed and delivered by Seller, for good and valuable consideration. The Transaction Documents constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles.

(iii) Non-Contravention. Neither the execution and delivery of the Transaction Documents, nor consummation by Seller of the transactions contemplated by the Transaction Documents (or any of them), nor compliance by 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 (A) the organizational documents of Seller, (B) any contractual obligation to which Seller is now a party or the rights under which have been assigned to Seller or the obligations under which have been assumed by Seller or to which the assets of 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 Seller, other than pursuant to the Transaction Documents, (C) any judgment or order, writ, injunction, decree or demand of any court applicable to Seller, or (D) any applicable Requirement of Law applicable to these Transactions, in the case of clauses (B) or (C) above, to the extent that such conflict or breach would have a Material Adverse Effect upon Seller’s ability to perform its obligations hereunder.

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(iv) Litigation; Requirements of Law. Except as otherwise disclosed in writing to Buyer prior to the Closing Date, as of the date hereof and as of the Purchase Date for any Transaction hereunder, there is no action, suit, proceeding, investigation, or arbitration pending or, to the Knowledge of Seller, threatened against Seller, the Guarantor or any of their respective assets, nor is there any action, suit, proceeding, investigation, or arbitration pending or threatened against Seller or the Guarantor that is reasonably likely to result in any Material Adverse Effect. Seller is in compliance in all material respects with all Requirements of Law. Neither Seller nor the Guarantor 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.

(v) Good Title to Purchased Assets and Other Collateral. Immediately prior to the purchase of any Purchased Assets by Buyer from Seller, such Purchased Assets are free and clear of any lien, encumbrance or impediment to transfer (including any “adverse claim” as defined in Article 8-102(a)(1) of the UCC), and Seller is the record and beneficial owner of and has good and marketable title to and the right to sell and transfer such Purchased Assets to Buyer and, upon transfer of such Purchased Assets to Buyer, Buyer shall be the owner of such Purchased Assets free of any adverse claim subject to the rights of Seller and obligations of Buyer under this Agreement or any other Transaction Document in each case except for (1) Liens to be released simultaneously with the sale to Buyer hereunder and (2) Liens granted by Seller in favor of the counterparty to any Hedging Transaction, solely to the extent such liens are expressly subordinate to the rights and interests of Buyer hereunder. If, notwithstanding the above, a court or forum recharacterizes the Transaction as a loan, the provisions of this Agreement (together (in relation to any Foreign Purchased Asset) with the relevant Foreign Assignment Agreement) are effective to create in favor of Buyer a valid security interest in all rights, title and interest of Seller in, to and under the Purchased Items and Buyer shall have a valid, perfected first priority security interest in the Purchased Items free of any adverse claim subject to the rights of Seller and obligations of Buyer under this Agreement or any other Transaction Document (and without limitation on the foregoing, Buyer, as entitlement holder, shall have a “security entitlement” to the Purchased Assets).

(vi) No Adverse Effect; No Default or Event of Default. As of the related Purchase Date and the date of each Future Funding Transaction and Additional Purchase Transaction, Seller has no Knowledge of any facts or circumstances that are reasonably likely to have a material adverse effect on any Purchased Asset or Underlying Mortgaged Property. No Default or Event of Default has occurred or exists under or with respect to the Transaction Documents.

(vii) Authorized Representatives. The duly authorized representatives of Seller are listed on, and true signatures of such authorized representatives are set forth on, Exhibit II attached to this Agreement.

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(viii) Representations and Warranties Regarding Purchased Assets; Delivery of Purchased Asset File.

(A) As of the date hereof, Seller has not assigned, pledged, or otherwise conveyed or encumbered any Purchased Items to any other Person, and immediately prior to the sale of, or grant of a security interest in, the Purchased Items to, or in favor of, Buyer.

(B) The provisions of this Agreement and the related Confirmation are effective to either constitute a sale of Purchased Items to Buyer or to create in favor of Buyer a legal, valid and enforceable security interest in all right, title and interest of Seller in, to and under the Purchased Items.

(C) With respect to the U.S. Purchased Assets, upon receipt by the Custodian of each Mortgage Note, Mezzanine Note or Participation Certificate, endorsed in blank by a duly authorized officer of Seller, either a purchase shall have been completed by Buyer of such Mortgage Note, Mezzanine Note or Participation Certificate, as applicable, or Buyer shall have a valid and fully perfected first priority security interest in all right, title and interest of Seller in the Purchased Items described therein; and with respect to the Foreign Purchased Assets, upon receipt by the Custodian of Buyer of a Transfer Certificate or Participation Certificate, endorsed in blank by a duly authorized officer of the applicable Seller and each Foreign Assignment Agreement executed by a duly authorized officer of such Seller either a purchase shall have been completed by Buyer of the relevant Foreign Purchased Asset or the Participation Certificate, as applicable, or Buyer shall have a valid and fully perfected first priority security interest in all right, title and interest of such Seller in the Purchased Items described therein.

(D) Each of the representations and warranties made in respect of the Purchased Assets pursuant to Exhibit VI are true, complete and correct, except to the extent disclosed in a Requested Exceptions Report previously accepted by Buyer.

(E) Upon the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party”, Seller as “Debtor” and describing the Purchased Items in the jurisdiction and filing office listed on Exhibit XII attached hereto, the security interests granted hereunder in that portion of the Purchased Items which can be perfected by filing under the UCC will constitute fully perfected security interests under the UCC in all right, title and interest of Seller in, to and under such Purchased Items.

(F) Upon execution and delivery of each Depository Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, the related Depository Account and all amounts at any time on deposit therein.

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(G) Upon execution and delivery of each Depository Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, the “investment property” and all “deposit accounts” (each as defined in the UCC) comprising Purchased Items or any after-acquired property related to such Purchased Items. Except to the extent disclosed in a Requested Exceptions Report, Seller or its designee is in possession of a complete, true and accurate Purchased Asset File with respect to each Purchased Asset, except for such documents the originals of which have been delivered to the Custodian.

(ix) Adequate Capitalization; No Fraudulent Transfer. Seller has, as of such Purchase Date, adequate capital for the normal obligations foreseeable in a business of its size and character and in light of its contemplated business operations. Seller is generally able to pay, and as of the date hereof is paying, its debts as they come due. Seller has not become, or is not presently, financially insolvent nor will Seller be made insolvent by virtue of Seller’s execution of or performance under any of the Transaction Documents within the meaning of the bankruptcy laws or the insolvency laws of any jurisdiction. Seller has not entered into any Transaction Document or any Transaction pursuant thereto in contemplation of insolvency or with intent to hinder, delay or defraud any creditor.

(x) No Conflicts or Consents. Neither the execution and delivery of this Agreement and the other Transaction Documents by Seller, nor the consummation of any of the transactions by it herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof, will contravene or conflict with or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of Seller pursuant to the terms of any indenture, mortgage, deed of trust, or other agreement or instrument to which Seller is a party or by which Seller may be bound, or to which Seller may be subject, other than liens created pursuant to the Transaction Documents. No consent, approval, authorization, or order of any third party is required in connection with the execution and delivery by Seller of the Transaction Documents to which it is a party or to consummate the transactions contemplated hereby or thereby which has not already been obtained (other than consents, approvals and filings that have been obtained or made, as applicable, or that, if not obtained or made, are not reasonably likely to have a Material Adverse Effect).

(xi) Governmental Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording or registration by Seller with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (A) the execution, delivery and performance of any Transaction Document to which Seller is or will be a party, (B) the legality, validity, binding effect or enforceability of any such Transaction Document against Seller or (C) the consummation of the transactions contemplated by this Agreement (other than consents, approvals and filings that have been obtained or made, as applicable, and the filing of certain financing statements in respect of certain security interests).

(xii) Organizational Documents. Seller has delivered to Buyer certified copies of its organization documents, together with all amendments thereto, if any.

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(xiii) No Encumbrances. Except as contemplated by the Transaction Documents, there are (A) no outstanding rights, options, warrants or agreements on the part of Seller for a purchase, sale or issuance, in connection with the Purchased Assets, (B) no agreements on the part of Seller to issue, sell or distribute the Purchased Asset, and (C) no obligations on the part of Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any securities or interest therein, except as contemplated by the Transaction Documents.

(xiv) Federal Regulations. Seller is not (A) required to register as an “investment company,” or a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended, or (B) a “holding company,” or a “subsidiary company of a holding company,” or an “affiliate” of either a “holding company” or a “subsidiary company of a holding company,” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.

(xv) Taxes. Seller has timely filed or caused to be filed all required federal and other material tax returns that, to the Knowledge of Seller, would be delinquent if they had not been filed on or before the date hereof and has paid all Taxes imposed on it and any of its assets by any Governmental Authority except for any such Taxes (A) as are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been provided in accordance with GAAP or (B) to the extent that the failure to pay them could not reasonably be expected to result in a Material Adverse Effect. No Tax liens have been filed against any of Seller’s assets and, to Seller’s Knowledge, no claims are being asserted in writing with respect to any such Taxes (except for liens and with respect to Taxes not yet due and payable or liens or claims with respect to Taxes that are being contested in good faith and for which adequate reserves have been established in accordance with GAAP).

(xvi) Judgments/Bankruptcy. Except as disclosed in writing to Buyer, there are no judgments against Seller unsatisfied of record or docketed in any court located in the United States of America. No Act of Insolvency has ever occurred with respect to Seller.

(xvii) Solvency. Neither the Transaction Documents nor any Transaction, Additional Purchase Transaction or Future Funding Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller’s creditors. The transfer of the Purchased Assets subject hereto and the obligation to repurchase such Purchased Assets is not undertaken with the intent to hinder, delay or defraud any of Seller’s creditors. As of the Purchase Date, Seller is not insolvent within the meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and the transfer and sale of the Purchased Assets pursuant hereto and the obligation to repurchase such Purchased Asset (A) will not cause the liabilities of Seller to exceed the assets of Seller, (B) will not result in Seller having unreasonably small capital, and (C) will not result in debts that would be beyond Seller’s ability to pay as the same mature. Seller received reasonably equivalent value in exchange for the transfer and sale of the Purchased Assets and the Purchased Items subject hereto. No petition in bankruptcy has been filed against Seller in the last ten (10) years, and Seller has not in the last ten (10) years made an assignment for the benefit of creditors or taken advantage of any debtors

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relief laws. 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.

(xviii) Use of Proceeds; Margin Regulations. All proceeds of each Transaction shall be used by Seller for purposes permitted under Seller’s governing documents, provided that no part of the proceeds of any Transaction will be used by 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.

(xix) Full and Accurate Disclosure. No material information contained in the Transaction Documents, or any written statement furnished by or on behalf of Seller pursuant to the terms of the Transaction Documents, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made when such statements and omissions are considered in the totality of the circumstances in question.

(xx) Financial Information. All financial data concerning Seller and the Purchased Assets that has been delivered by or on behalf of Seller to Buyer is true, complete and correct in all material respects. All financial data concerning Seller has been prepared fairly in accordance with GAAP. All financial data concerning the Purchased Assets provided and prepared by Seller has been prepared in accordance with standard industry practices. Since the delivery of such data, except as otherwise disclosed in writing to Buyer, there has been no change in the financial position of Seller or the Purchased Assets, or in the results of operations of Seller, which change is reasonably likely to have a Material Adverse Effect on Seller.

(xxi) Hedging Transactions. To the Knowledge of Seller, as of the Purchase Date for any Purchased Asset that is subject to a Hedging Transaction, each such Hedging Transaction is in full force and effect in accordance with its terms, each counterparty thereto is an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and no “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event, however denominated, has occurred and is continuing with respect thereto.

(xxii) Servicing Agreements. Seller has delivered to Buyer all Servicing Agreements pertaining to the Purchased Assets and to the Knowledge of Seller, as of the date of this Agreement and as of the Purchase Date for the purchase of any Purchased Assets subject to a Servicing Agreement, each such Servicing Agreement is in full force and effect in accordance with its terms and no default or event of default exists thereunder.

(xxiii) No Reliance. Seller has made its own independent decisions to enter into the Transaction Documents and each Transaction and as to whether such Transaction is

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appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

(xxiv) PATRIOT Act.

A. Seller is in compliance, in all material respects, with the (1) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto, and (2) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of any Transaction will, to Seller’s Knowledge, be used, directly or 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 the United States Foreign Corrupt Practices Act of 1977, as amended.

B. Seller agrees that, from time to time upon the prior written request of Buyer, it shall (1) execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to insure compliance with the provisions hereof (including, without limitation, compliance with the USA Patriot Act of 2001 and to fully effectuate the purposes of this Agreement and (2) provide such opinions of counsel concerning matters relating to this Agreement as Buyer may reasonably request; provided, however, that nothing in this Article 9(b)(xxiv) shall be construed as requiring Buyer to conduct any inquiry or decreasing Seller’s responsibility for its statements, representations, warranties or covenants hereunder. In order to enable Buyer and its Affiliates to comply with any anti-money laundering program and related responsibilities including, but not limited to, any obligations under the USA Patriot Act of 2001 and regulations thereunder, Seller on behalf of itself and its Affiliates makes the following representations and covenants to Buyer and its Affiliates that neither Seller, nor, to Seller’s Knowledge, any of its Affiliates, is a Prohibited Investor, and, to Seller’s Knowledge, Seller is not acting on behalf of or for the benefit of any Prohibited Investor. Seller agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation and covenant.

(xxv) Ownership of Property. Seller does not own, and has not ever owned, any assets other than (A) the Purchased Assets, (B) such incidental personal property related thereto; (C) the Asia House Loan, and (D) with respect to U.S. Seller, the Other Facility Purchased Items.

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(xxvi) Insider. Seller is not 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 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 Buyer, of a bank holding company of which Buyer is a Subsidiary, or of any Subsidiary, of a bank holding company of which Buyer is a Subsidiary, of any bank at which Buyer maintains a correspondent account or of any lender which maintains a correspondent account with Buyer

(xxvii) Office of Foreign Assets Control. Seller warrants, represents and covenants that neither Seller nor any of its Affiliates are or will be an entity or person (A) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”); (B) whose name appears on OFAC’s most current list of “Specifically Designed National and Blocked Persons” or other sanctions-related list of designated Persons maintained by the U.S. Department of State, the European Union or Her Majesty’s Treasury of the United Kingdom; (C) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO 13224; or (D) who is otherwise affiliated with, owns or controls any entity or person listed above (any and all parties or persons described in (A) through (D) above are herein referred to as a “Prohibited Person”). Seller covenants and agrees that none of Seller nor any of its Affiliates will knowingly (1) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person or (2) engage in or conspire to engage in any transaction that evades or avoids or that the purpose of evading or avoiding any of the prohibitions of EO 13224. Seller further covenants and agrees to deliver to Buyer any such certification or other evidence as may be requested by Buyer in its sole and absolute discretion, confirming that none of Seller or any of the its Affiliates is a Prohibited Person and none of Seller, or any of its Affiliates has engaged in any business transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person.

(xxviii) Notice Address; Name; Jurisdiction of Organization. On the date of this Agreement, Sellers’ addresses for notices are as specified on Annex I. U.S. Seller’s legal name is, and has at all times been, Parlex 4 Finance, LLC. Foreign Asset Seller’s legal name is, and has at all times been, Parlex 4 UK Finco, LLC. Each Seller’s sole jurisdiction of organization is, and at all times has been, Delaware. The location where each Seller keeps its books and records, including all computer tapes and records relating to the Purchased Items, is its related notice address. Each Seller may change its address for notices and for the location of its books and records by giving Buyer written notice of such change.

(xxix) Anti-Money Laundering Laws. Seller and its Affiliates either (1) is entirely exempt from or (2) has otherwise fully complied with all applicable anti-money laundering laws, sanctions programs and regulations of the United States, the United Kingdom, the U.S. Department of State, the European Union or Her Majesty’s Treasury of the United Kingdom (collectively, the “Anti-Money Laundering Laws”), by (A) establishing an adequate anti-money laundering compliance program as required by the

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Anti-Money Laundering Laws, (B) conducting the requisite due diligence in connection with the origination of each Purchased Asset for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the related obligor (if applicable) and the origin of the assets used by such obligor to purchase the property in question, and (C) maintaining sufficient information to identify the related obligor (if applicable) for purposes of the Anti-Money Laundering Laws.

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

(xxxi) Centre of Main Interests. 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 defined in the Insolvency Regulation to be located in the United Kingdom or (B) registered as a company in any jurisdiction other than Delaware.

ARTICLE 10.

NEGATIVE COVENANTS OF SELLER

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, neither Seller shall, without the prior written consent of Buyer:

(a) subject to such Seller’s right to repurchase any Purchased Asset sold by such Seller, take any action that would directly or indirectly impair or adversely affect Buyer’s title to the Purchased Assets;

(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Purchased Items (or any of it) to any Person other than Buyer, or engage in repurchase transactions or similar transactions with respect to the Purchased Items (or any of it) with any Person other than Buyer, unless and until such Purchased Asset relating to such Purchased Items is repurchased by Seller in accordance with this Agreement;

(c) modify in any material respect or terminate any Servicing Agreements to which it is a party, without the consent of Buyer in its discretion, not to be unreasonably withheld, conditioned, or delayed;

(d) create, incur or permit to exist any Lien in or on any of its property, assets, revenue, the Purchased Assets, unless and until such Purchased Asset relating to such Purchased Items is repurchased by Seller in accordance with this Agreement, the Purchased Items, whether now owned or hereafter acquired, other than the Liens granted by Seller pursuant to Article 6 of this Agreement and the Lien granted by Parent under the Pledge Agreement;

(e) except as otherwise expressly permitted herein, enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution), sell all or substantially all of its assets without the consent of Buyer in its sole and absolute discretion;

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(f) consent or assent to any amendment or supplement to, or termination of, any note, loan agreement, mortgage or guarantee relating to the Purchased Assets or other agreement or instrument relating to the Purchased Assets other than in accordance with Article 7(e) or Article 27;

(g) permit the organizational documents or organizational structure of Seller to be amended without the prior written consent of Buyer not to be unreasonably withheld, conditioned, or delayed, other than special purpose entity provisions, for which such consent shall be at Buyer’s sole and absolute discretion;

(h) acquire or maintain any right or interest in any Purchased Asset or Underlying Mortgaged Property that is senior to or pari passu with the rights and interests of Buyer therein under this Agreement and the other Transaction Documents unless such right or interest becomes a Purchased Asset hereunder;

(i) 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;

(j) enter into any Hedging Transaction with respect to any Purchased Asset with any entity that is not an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty;

(k) permit, at any time after thirty (30) days subsequent to the Purchase Date of the first Purchased Asset subject to a Transaction, the number of Purchased Assets that are Senior Mortgage Loans to be less than three (3); provided, however, that in the event of an Early Repurchase of all Purchased Assets subject to Transactions, this Article 10(k) shall not apply until such time as Buyer and Seller enter into a new Transaction subsequent to such Early Repurchase of all Purchased Assets; and

(l) take any action that will cause its “centre of main interests” (as such term is defined in European Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings (the “Insolvency Regulation”) to be located in the United Kingdom or register as a company in any jurisdiction other than Delaware.

ARTICLE 11.

AFFIRMATIVE COVENANTS OF SELLER

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:

(a) Each Seller shall promptly notify Buyer of any material adverse change in its business operations and/or financial condition; provided, however, that nothing in this Article 11 shall relieve such Seller of its obligations under this Agreement.

(b) Each Seller shall provide Buyer with copies of such documents as Buyer may reasonably request evidencing the truthfulness of the representations set forth in Article 9.

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(c) Each Seller shall (1) defend the right, title and interest of Buyer in and to the Purchased Items against, and take such other action as is necessary to remove, the Liens, security interests, claims and demands of all Persons (other than Liens created in favor of Buyer pursuant to the Transaction Documents) and (2) at Buyer’s reasonable request, take all action necessary to ensure that Buyer will have a first priority security interest in the Purchased Assets subject to any of the Transactions in the event such Transactions are recharacterized as secured financings.

(d) Each Seller shall notify Buyer and the Depository of the occurrence of any Default or Event of Default with respect to such Seller of which Seller has Knowledge as soon as possible but in no event later than the second (2^nd) Business Day after obtaining actual knowledge of such event.

(e) Each Seller shall cause the special servicer rating of the special servicer with respect to all mortgage loans underlying Purchased Assets to be no lower than “average” by S&P to the extent such Seller controls or is entitled to control the selection of the special servicer. In the event the special servicer rating with respect to any Person acting as special servicer for any mortgage loans underlying Purchased Assets shall be below “average” by S&P, or if an Act of Insolvency occurs with respect to either Seller or Guarantor, Buyer shall be entitled to transfer special servicing with respect to all Purchased Assets to an entity satisfactory to Buyer, to the extent such Seller controls or is entitled to control the selection of the special servicer.

(f) Each Seller shall promptly (and in any event not later than two (2) Business Days following receipt) deliver to Buyer (i) any notice of the occurrence of an event of default under or report received by such Seller pursuant to the Purchased Asset Documents; (ii) any notice of transfer of servicing under the Purchased Asset Documents and (iii) any other information with respect to the Purchased Assets that may be reasonably requested by Buyer from time to time and within Seller’s possession or control or are obtainable by Seller.

(g) Each Seller will permit Buyer, its Affiliates or its designated representative, upon reasonable prior written notice from Buyer, at reasonable times not to exceed twice per calendar year unless an Event of Default has occurred and is continuing, at Buyer’s sole cost and expense, to inspect such Seller’s records with respect to the Purchased Items that are not privileged and the conduct and operation of its business related thereto subject to the terms of any confidentiality agreement between Buyer and Seller and applicable law, and if no such confidentiality agreement then exists between Buyer and Seller, Buyer and Seller shall act in accordance with customary market standards regarding confidentiality and applicable law. Buyer shall act in a commercially reasonable manner in requesting and conducting any inspection relating to the conduct and operation of such Seller’s business.

(h) If either 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 Buyer’s agent, hold the same in trust for Buyer and deliver the same forthwith to Buyer (or the Custodian, as appropriate) in the exact form received, duly endorsed by Seller to Buyer, if required, together with all related necessary transfer documents, to be held by Buyer hereunder as additional collateral security for the Transactions. If any sums of money or property are paid or distributed in respect of the Purchased Assets and received by either Seller, such Seller shall,

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until such money or property is paid or delivered to Buyer, hold such money or property in trust for Buyer, segregated from other funds of such Seller, as additional collateral security for the Transactions.

(i) At any time from time to time upon the reasonable request of Buyer, at the sole expense of the applicable Seller, each Seller will (i) promptly and duly execute and deliver such further instruments and documents and take such further actions as Buyer may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the perfected, first-priority security interest required 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, any Purchase 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 similar requirements under the laws of England and Wales and/or other jurisdictions as Buyer may reasonably request). If any amount payable under or in connection with any of the Purchased Items shall be or become evidenced by any promissory note, other instrument or certificated security, such note, instrument or certificated security shall be immediately delivered to Buyer, duly endorsed in a manner satisfactory to Buyer, to be itself held as a Purchased Item pursuant to this Agreement, and the documents delivered in connection herewith.

(j) Each Seller shall provide, or to cause to be provided, to Buyer the following financial and reporting information:

(i) Within fifteen (15) calendar days after each month-end, a monthly reporting package substantially in the form of Exhibit III-A attached hereto (the “Monthly Reporting Package”);

(ii) Within forty-five (45) calendar days after the last day of each of the first three fiscal quarters in any fiscal year, a quarterly reporting package substantially in the form of Exhibit III-B attached hereto (the “Quarterly Reporting Package”);

(iii) Within ninety (90) calendar days after the last day of its fiscal year, an annual reporting package substantially in the form of Exhibit III-C attached hereto (the “Annual Reporting Package”); and

(iv)(A) Upon Buyer’s request, a listing of any material changes in Hedging Transactions with Qualified Hedge Counterparties, the names of the Qualified Hedge Counterparties and the material terms of such Hedging Transactions, delivered within ten (10) days after Buyer’s request; and

(B) copies of each Seller’s and Guarantor’s Federal Income Tax returns, if any, delivered within thirty (30) days after the earlier of (1) filing or (2) the last filing extension period.

(k) Sellers shall make a representative available to Buyer every month for attendance at a telephone conference, the date of which to be mutually agreed upon by Buyer and Sellers, regarding the status of each Purchased Asset, Sellers’ compliance with the requirements of Articles 10 and 11, and any other matters relating to the Transaction Documents or Transactions that Buyer wishes to discuss with Sellers.

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(l) Each Seller shall and shall cause Guarantor to at all times (i) comply with all material contractual obligations, (ii) comply in all respects with all laws, ordinances, rules, regulations and orders (including, without limitation, environmental laws) of any Governmental Authority or any other federal, state, municipal or other public authority having jurisdiction over the Sellers and Guarantor or any of its assets and the Sellers and Guarantor shall do or cause to be done all things necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business and (iii) maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses held by such Seller and of such Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets).

(m) Each Seller shall and shall cause Guarantor 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.

(n) 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. Each Seller will continue to be a U.S. Person that is a partnership for U.S. federal income tax purposes, or a disregarded entity of a U.S. Person for U.S. federal income tax purposes. Each Seller shall pay and discharge all Taxes on its assets and on the Purchased Items that, in each case, in any manner would create any Lien upon the Purchased Items, except for Liens created pursuant to the Transaction Documents and other than any Liens with respect to Taxes, such taxes that are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP or Taxes that are not yet due and payable.

(o) Each Seller shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office of such Seller or Guarantor and of any change in such Seller’s or Guarantor’s name or respective jurisdictions of organization or the places where the books and records pertaining to the Purchased Assets are held not less than thirty (30) Business Days’ prior to taking any such action.

(p) Each Seller will maintain records with respect to the Purchased Items and the conduct and operation of its business with no less a degree of prudence than if the Purchased Items were held by such Seller for its own account and will furnish Buyer, upon reasonable request by Buyer or its designated representative, with reasonable information reasonably obtainable by such Seller with respect to the Purchased Items and the conduct and operation of its business.

(q) Each Seller shall provide Buyer and its Affiliates with reasonable access plus any such additional reports as Buyer may reasonably request. Upon two (2) Business Days’ prior

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notice (unless a Default or an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal business hours, such Seller shall allow Buyer to (i) review any operating statements, occupancy status and other property level information with respect to the underlying real estate directly or indirectly securing or supporting the Purchased Asset that either is in such Seller’s possession or is available to such Seller, (ii) examine, copy (at Buyer’s expense) and make extracts from its books and records, to inspect any of its properties, and (iii) discuss such Seller’s business and affairs with its officers.

(r) Each Seller shall enter into Hedging Transactions with respect to each of the Hedge-Required Assets to the extent necessary to hedge interest rate risk associated with the Purchase Price on such Hedge-Required Assets, in a manner reasonably acceptable to Buyer.

(s) Each Seller shall take all such steps as Buyer deems necessary to perfect the security interest granted pursuant to Article 6 in the Hedging Transactions, shall take such action as shall be necessary or advisable to preserve and protect such Seller’s interest under all such Hedging Transactions (including, without limitation, requiring the posting of any required additional collateral thereunder), and hereby authorizes Buyer to take any such action that such Seller fails to take after demand therefor by Buyer. Each Seller shall provide the Custodian with copies of all documentation relating to Hedging Transactions with Qualified Hedge Counterparties promptly after entering into same. All Hedging Transactions, if any, entered into by such Seller with Buyer or any of its Affiliates in respect of any Purchased Asset shall be terminated contemporaneously with the repurchase of such Purchased Asset on the Repurchase Date therefor.

(t) Each Seller shall:

(i) continue to engage in business of the same general type as now conducted by it or otherwise as reasonably approved by Buyer prior to the date hereof and maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (including, without limitation, preservation of all lending licenses held by such Seller and of such Seller’s status as a “qualified transferee” (however denominated) under all documents which govern the Purchased Assets) to the extent that failure to do so would have a Material Adverse Effect;

(ii) comply with all contractual obligations and with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation, all environmental laws) if failure to comply with such requirements would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect;

(iii) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied;

(iv) pay and discharge all Taxes imposed on it or 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 the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and

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(v) not cause or permit any Change of Control without the prior written consent of Buyer.

(u) Each Seller shall cause each servicer of the Purchased Asset to provide to Buyer and to the Custodian via electronic transmission, promptly upon request by Buyer a Servicing Tape for the month (or any portion thereof) prior to the date of Buyer’s request; provided that to the extent any servicer does not provide any such Servicing Tape, such Seller shall prepare and provide to Buyer and the Custodian via electronic transmission a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape; provided, further, that regardless of whether such Seller at any time delivers any such remittance report, such Seller shall at all times use commercially reasonable efforts to cause each servicer to provide each Servicing Tape in accordance with this Article 11(u).

(v) Each Seller’s organizational documents shall at all times include the following provisions: (a) at all times there shall be, and such Seller shall cause there to be, at least one (1) Independent Director; (b) such Seller shall not, without the unanimous written consent of its board of directors including the Independent Director, take any Material Action or any action that might cause such entity to become insolvent; (c) no Independent Director may be removed or replaced unless such Seller provides Buyer with not less than five (5) Business Days’ prior written notice of (i) any proposed removal of an Independent Director, together with a statement as to the reasons for such removal, and (ii) the identity of the proposed replacement Independent Director, together with a certification that such replacement satisfies the requirements set forth in the organizational documents for an Independent Director; and provided further, that any removal or replacement shall not be effective until the replacement Independent Director has accepted his or her appointment; (d) to the fullest extent permitted by applicable law, including Section 18-1101(c) of the Bankruptcy Code and notwithstanding any duty otherwise existing at law or in equity, the Independent Director shall consider only the interests of such Seller, including its creditors in acting or otherwise voting with respect to a Material Action; (e) except for duties to such Seller as set forth in subsection (d) above (including duties to its equity owners and its creditors solely to the extent of their respective economic interests in such Seller but excluding (i) all other interests of the equity owners, (ii) the interests of other Affiliates of Seller, and (iii) the interests of any group of Affiliates of which such Seller is a part), the Independent Director shall not have any fiduciary duties to any Person bound by its organizational documents; (f) the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing under applicable law; and (g) to the fullest extent permitted by applicable law, including Section 18-1101(e) of the Bankruptcy Code, an Independent Director shall not be liable to Seller or any other Person for breach of contract or breach of duties (including fiduciary duties), unless the Independent Director acted in bad faith or engaged in willful misconduct. No consent by Buyer shall be required for the removal of any Independent Director for Cause. “Cause” means, with respect to an Independent Director, (i) acts or omissions by such Independent Director that constitute willful disregard of such Independent Director’s duties as set forth in such Seller’s organizational documents, (ii) that such Independent Director has engaged in or has been charged with, or has been convicted of, fraud or other acts constituting a crime under any law applicable to such Independent Director, (iii) that such Independent

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Director is unable to perform his or her duties as Independent Director due to death, disability or incapacity, or (iv) that such Independent Director no longer meets the definition of Independent Director.

(w) Each Seller has not and will not, except in connection with the obligations contemplated under the Transaction Documents:

(i) engage in any business or activity other than the entering into and performing its obligations under the Transaction Documents, and activities incidental thereto;

(ii) acquire or own any assets other than (A) the Purchased Assets, (B) the Asia House Loan, so long as the Asia House Loan is either (1) being assessed by Buyer as a potential Purchased Asset or (2) is a Purchased Asset, and (C) such incidental personal property related thereto;

(iii) merge into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;

(iv) fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable laws of the jurisdiction of its organization or formation, or (B) amend, modify, terminate or fail to comply with the material provisions of its organizational documents, in each case without the prior written consent of Buyer;

(v) own any subsidiary, or make any investment in, any Person;

(vi) commingle its assets with the assets of any other Person (excluding any consolidation of its financials with those of an Affiliate in accordance with GAAP), or permit any Affiliate or constituent party independent access to its bank accounts;

(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the debt incurred pursuant to this Agreement and the other Transaction Documents and unsecured trade debt in an unpaid amount less than $100,000;

(viii) fail to maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person; except that such Seller’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that (A) appropriate notation shall be made on such consolidated financial statements to indicate the separate identity of such Seller from such Affiliate and 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 (B) such Seller’s assets, liabilities and net worth shall also be listed on such Seller’s own separate balance sheet;

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(ix) except for capital contributions or capital distributions permitted under the terms and conditions of such Seller’s organizational documents and properly reflected on its books and records, enter into any transaction, contract or agreement with any general partner, member, shareholder, principal, guarantor of the obligations of such Seller, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;

(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(xi) assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;

(xii) except in connection with the origination of the Purchased Assets, make any loans or advances to any Person, or own any stock or securities of, any Person;

(xiii)(A) fail to file its own tax returns separate from those of any other Person, except to the extent such Seller is not required to file tax returns under Applicable Law, (B) fail to pay any taxes required to be paid under Applicable Law, or any obligation to reimburse its equityholders or their Affiliates for any taxes that such equityholders or their Affiliates may incur as a result of any profits or losses of such Seller;

(xiv) fail to (A) hold itself out to the public as a legal entity separate and distinct from any other Person, (B) conduct its business solely in its own name or (C) correct any misunderstanding of which such Seller has Knowledge regarding its separate identity;

(xv) fail to 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, provided that the foregoing shall not require any member, partner or shareholder of such Seller to make any additional capital contributions to Seller;

(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of all directors or managers of such Seller, including, without limitation, the Independent Director, take any Material Action or any action that might cause such entity to become insolvent;

(xvii) fail to allocate shared expenses (including, without limitation, shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses and to use separate stationery, invoices and checks bearing its own name;

(xviii) fail to remain solvent or pay its own liabilities only from its own funds; provided that the foregoing shall not require any member, partner or shareholder of such Seller to make any additional capital contributions to such Seller;

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(xix) acquire obligations or securities of its partners, members, shareholders or other Affiliates, as applicable;

(xx) have any employees, but shall be permitted to utilize employees of its Affiliates pursuant to arms-length terms;

(xxi) fail to maintain and use separate stationery, invoices and checks bearing its own name;

(xxii) have any of its obligations guaranteed by an Affiliate except for the Guarantee Agreement;

(xxiii) identify itself as a department or division of any other Person; or

(xxiv) except in connection with the Purchased Assets, buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities); provided that U.S. Seller is permitted to buy and hold evidence of indebtedness pursuant to the Other Facility.

(x) With respect to each Eligible Asset to be purchased hereunder, the applicable Seller shall notify Buyer in writing of the creation of any right or interest in such Eligible Asset or related Underlying Mortgaged Property that is senior to or pari passu with the rights and interests that are to be transferred to Buyer under this Agreement and the other Transaction Documents, and whether any such interest will be held or obtained by Seller or an Affiliate of Seller.

(y) Each Seller shall be solely responsible for the fees and expenses of the Custodian, Depository and each servicer (including, without limitation, the Interim Servicer) of any or all of the Purchased Assets.

(z) Each Seller shall obtain estoppels and agreements reasonably acceptable to Buyer for each Asset that is subject to a ground lease.

(aa) Each Seller shall notify Buyer in writing of any event or occurrence that could be reasonably determined to cause Guarantor to breach any of the covenants contained in paragraph 9 of the Guarantee Agreement.

(bb) With respect to each Purchased Asset subject to a Transaction, each Seller shall pay Buyer the applicable Purchased Asset Fee for such Purchased Asset as forth herein and in the Fee Letter.

ARTICLE 12.

EVENTS OF DEFAULT; REMEDIES

(a) Each of the following events shall constitute an “Event of Default” under this Agreement:

(i) either Seller or Guarantor shall fail to repurchase (A) Purchased Assets upon the applicable Repurchase Date or (B) a Purchased Asset that is no longer an Eligible Asset in accordance with Article 12(c);

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(ii) Buyer shall fail to receive on any Remittance Date the accreted value of the Price Differential (less any amount of such Price Differential previously paid by

either Seller to Buyer) (including, without limitation, in the event the Income paid or distributed on or in respect of the Purchased Assets is insufficient to make such payment and either Seller does not make such payment or cause such payment to be made) (except that such failure shall not be an Event of Default by either Seller if sufficient Income, including Principal Proceeds which would otherwise be remitted to the applicable Seller pursuant to Article 5 of this Agreement, is on deposit in the Depository Accounts and the Depository fails to remit such funds to Buyer);

(iii) either Seller or Guarantor shall fail to cure any Margin Deficit, to the extent such Margin Deficit equals or exceeds the Minimum Transfer Amount, in accordance with Article 4 of this Agreement;

(iv) either Seller or Guarantor shall fail to make any payment not otherwise addressed under this Article 12(a) owing to Buyer that has become due, whether by acceleration or otherwise under the terms of this Agreement, the Pledge Agreement, the Guarantee Agreement or any other Transaction Document, which failure is not remedied within five (5) Business Days of notice thereof;

(v) either Seller shall default in the observance or performance of its obligation in Article 7(c) or any agreement contained in Articles 10 or 11 of this Agreement and such default shall not be cured within five (5) Business Days after notice by Buyer to the applicable Seller thereof;

(vi) an Act of Insolvency occurs with respect to either Seller or Guarantor;

(vii) a Change of Control occurs with respect to either Seller or Guarantor without the prior written consent of Buyer;

(viii) any employee with a title equivalent or more senior to that of “Senior Vice President” of either Seller or Guarantor shall admit in writing to any Person in an external communication (whether electronic or otherwise) its inability to, or its intention not to, perform any of its material obligations hereunder;

(ix) the Custodial Agreement, a Depository Agreement, the Pledge Agreement, the Guarantee Agreement or any other Transaction Document or a replacement therefor acceptable to Buyer shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by either Seller;

(x) either Seller or Guarantor shall be in default under (A) any Indebtedness of Seller or Guarantor, as applicable, which default (1) involves the failure to pay a matured obligation in excess of $250,000, with respect to such Seller or $15,000,000, with respect to Guarantor or (2) permits the acceleration of the maturity of obligations by

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any other party to or beneficiary with respect to such Indebtedness, if the aggregate amount of the Indebtedness in respect of which such default or defaults shall have occurred is at least $250,000, with respect to such Seller or $15,000,000, with respect to Guarantor; or (B) any other material contract to which such Seller or Guarantor is a party, which default (1) involves the failure to pay a matured obligation if the aggregate amount of such obligation is greater than $250,000 with respect to such Seller or $15,000,000 with respect to Guarantor, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract if the aggregate amount of such obligations is greater than $250,000, with respect to such Seller or $15,000,000, with respect to Guarantor;

(xi) either Seller or Guarantor shall be in default under any Indebtedness of such Seller or Guarantor, as applicable, to Buyer or any of its present or future Affiliates, 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;

(xii)(A) either Seller or an ERISA Affiliate shall engage in any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that is not exempt from such Sections of ERISA and the 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 Pension Benefit Guaranty Corporation or a Plan shall arise on the assets of 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 a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event (as so defined) or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of Buyer, 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, (E) either Seller or any ERISA Affiliate shall, or in the reasonable opinion of Buyer is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or (F) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (A) through (F) 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;

(xiii) either (A) the Transaction Documents shall for any reason not cause, or shall cease to cause, Buyer to be the owner free of any adverse claim of any of the Purchased Assets, and such condition is not cured by a Seller within three (3) Business Days after notice thereof from Buyer to such Seller, 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 Buyer in any of the Purchased Assets;

(xiv) an “Event of Default,” “Termination Event,” “Potential Event of Default” or other default or breach, however defined therein, occurs under any Hedging

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Transaction on the part of a Seller, or the counterparty to a Seller on any such Hedging Transaction with a Qualified Hedge Counterparty ceases to be a Qualified Hedge Counterparty, that is otherwise not cured within any applicable cure period thereunder or, if no cure period exists thereunder, which is not cured by such Seller within three (3) Business Days after notice thereof from an Affiliated Hedge Counterparty or Qualified Hedge Counterparty to such Seller;

(xv) any governmental, regulatory, or self-regulatory authority shall have taken any action to suspend or terminate the rights, privileges, or operations of either Seller, which suspension has a Material Adverse Effect in the determination of Buyer;

(xvi) any other representation (other than the representations and warranties of either Seller set forth in Exhibit VI and Article 9(b)(viii)(D), which shall not be considered an Event of Default if incorrect or untrue in any material respect) made by either Seller to Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated and such incorrect or untrue representation exists and continues unremedied for ten (10) calendar days after the earlier of receipt of written notice thereof from Buyer or such Seller’s Knowledge of such incorrect or untrue representation;

(xvii) a final non-appealable judgment by any competent court in the United States of America for the payment of money (A) rendered against either Seller in an amount greater than $250,000 or (B) rendered against Guarantor in an amount greater than $15,000,000, and remained 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 Buyer;

(xviii) if either Seller shall breach or fail to perform any of the terms, covenants, obligations or conditions of this Agreement, other than as specifically otherwise referred to in this definition of “Event of Default”, and such breach or failure to perform is not remedied within the earlier of five (5) Business Days after (a) delivery of notice thereof to such Seller by Buyer, or (b) Knowledge on the part of Seller of such breach or failure to perform; provided, that, if Buyer determines, in its sole discretion, that any such breach is capable of being cured and such Seller is diligently and continuously pursuing such a cure in good faith but is not able to do so on a timely basis, such Seller shall have an additional period of time, not to exceed thirty (30) additional days, within which to complete such cure; provided further, that such additional 30-day period shall not apply to any breach of or other failure to comply with the terms of Article 10(k) of this Agreement;

(xix) the Guarantee Agreement or a replacement therefor acceptable to Buyer shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by Guarantor or either Seller;

(xx) the breach by Guarantor of any material term or condition set forth in the Guarantee Agreement or of any representation, warranty, certification or covenant made or deemed made in the Guarantee Agreement by Guarantor or if any certificate furnished by Guarantor to Buyer pursuant to the provisions hereof or thereof or any information

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with respect to the Purchased Assets furnished in writing on behalf of Guarantor shall prove to have been false or misleading in any respect as of the time made or furnished; provided, however, that any such default, failure to perform or breach shall not constitute an Event of Default if Guarantor cures such default or failure to perform, as the case may be, within the grace notice and/or cure period, if any, provided under the applicable agreement; and

(xxi) an Event of Default (as such term is defined in the Other Repurchase Agreement) occurs under the Other Facility.

(b) After the occurrence and during the continuance of an Event of Default, each Seller hereby appoints Buyer as attorney-in-fact of such Seller for the purpose of carrying out the provisions of this Agreement and taking any action and executing or endorsing any instruments that Buyer may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. If an Event of Default shall occur and be continuing with respect to either Seller, the following rights and remedies shall be available to Buyer:

(i) At the option of Buyer, exercised by written notice to such 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 such Seller or Guarantor), the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (the date on which such option is exercised or deemed to have been exercised being referred to hereinafter as the “Accelerated Repurchase Date”).

(ii) If Buyer exercises or is deemed to have exercised the option referred to in Article 12(b)(i) of this Agreement:

(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; and

(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 Repurchase Price for such Transaction (decreased by (I) any amounts actually remitted to Buyer by the Depository or either Seller from time to time pursuant to Article 5 of this Agreement and applied to such Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant to Article 12(b)(iii) of this Agreement); and

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(C) the Custodian shall, upon the request of Buyer, deliver to Buyer all instruments, certificates and other documents then held by the Custodian relating to the Purchased Assets.

(iii) Upon the occurrence and during the continuance of an Event of Default with respect to either Seller, Buyer may (A) immediately sell on a servicing released basis, at a public or private sale in a commercially reasonable manner and at such price or prices as Buyer may deem satisfactory any or all of the Purchased Assets, and/or (B) in its sole 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 against the aggregate unpaid Repurchase Price for such Purchased Assets and any other amounts owing by Sellers under the Transaction Documents. The proceeds of any disposition of Purchased Assets effected pursuant to this Article 12(b)(iii) shall be applied, (v) first, to the costs and expenses incurred by Buyer in connection with such Seller’s default; (w) second, to actual out-of-pocket damages incurred by Buyer in connection with such Seller’s default (including, but not limited to, costs of cover and/or Hedging Transactions, if any), (x) third, to the Repurchase Price; (y) fourth, to any Breakage Costs; and (z) fifth, to return any excess to Sellers.

(iv) 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, Buyer may elect, in its sole discretion, the time and manner of liquidating any Purchased Assets, and nothing contained herein shall (A) obligate Buyer 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 Buyer.

(v) Each Seller shall be liable to Buyer and its Affiliates and shall indemnify Buyer and its Affiliates for (A) the amount (including in connection with the enforcement of this Agreement) of all out of pocket losses, and costs and expenses, including reasonable legal fees and expenses of outside counsel, actually incurred by Buyer in connection with or as a consequence of an Event of Default with respect to such Seller and (B) all documented, actual costs incurred by Buyer in connection with the termination of Hedging Transactions in the event that such Seller, from and after an Event of Default, takes any action to impede or otherwise affect Buyer’s remedies under this Agreement.

(vi) Buyer 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 as in effect from time-to-time in the State of New York, to

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the extent that the UCC is applicable, and the right to offset any mutual debt and claim and the right to appropriate the Purchased Assets in accordance with Article 12(b)(vi)), in equity, and under any other agreement between Buyer and either Seller. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Purchased Assets against all of either Seller’s obligations to Buyer under this Agreement, without prejudice to Buyer’s right to recover any deficiency. The parties hereto agree that the method of valuation of Purchased Assets provided for in Article 12(b)(vi) shall constitute a commercially reasonable method of valuation for the purposes of the FCA Regulations.

(vii) Subject to the applicable notice and cure periods set forth herein, Buyer may exercise any or all of the remedies available to Buyer immediately upon the occurrence of an Event of Default with respect to either Seller 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 Buyer may have.

(viii) Buyer 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 Buyer 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.

(c) If at any time Buyer determines that (i) any Purchased Asset is not an Eligible Asset (other than as a result of a breach of a Mark-to-Market Representation, which shall in no event, in and of itself, cause an Early Repurchase but may be used in connection with the determination of Market Value in accordance with this Agreement) or (ii) has been released from the possession of the Custodian for a period in excess of ten (10) calendar days, the related Transaction shall terminate and an Early Repurchase Date shall be deemed to occur with respect to such Purchased Asset. No later than three (3) Business Days after receiving written notice from Buyer or any Seller becoming otherwise aware that such Purchased Asset is not an Eligible Asset, such Seller shall repurchase the affected Purchased Asset and such Seller shall pay the applicable Repurchase Price for such Purchased Asset to Buyer by depositing such amount in immediately available funds at the direction of Buyer.

ARTICLE 13.

SINGLE AGREEMENT

Buyer and each Seller acknowledge that, and have entered hereinto and will enter into each Transaction (including an Additional Purchase Transaction or Future Funding 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 Buyer 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

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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 14.

RECORDING OF COMMUNICATIONS

EACH OF BUYER AND EACH SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE 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 BUYER AND EACH SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH TAPE 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 15.

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 hand delivered or 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, United States Postal Service or Royal Mail, with proof of delivery or (d) by email, provided that such emailed notice must also be delivered by one of the means set forth above, to the address specified in Annex 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 15. A notice shall be deemed to have been given: (w) in the case of hand delivery, at the time of delivery, (x) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (y) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (z) in the case of email, upon receipt of confirmation, provided that such emailed notice was also delivered as required in this Article 15. A party receiving a notice that does not comply with the technical requirements for notice under this Article 15 may elect to waive any deficiencies and treat the notice as having been properly given.

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ARTICLE 16.

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 17.

NON-ASSIGNABILITY

(a) Subject to Article 17(b) below, neither Seller may assign any of its respective rights or obligations under this Agreement without the prior written consent of Buyer (not to be unreasonably withheld or delayed) and any attempt by either Seller to assign any of its rights or obligations under this Agreement without the prior written consent of Buyer shall be null and void. Buyer may, without consent of either Seller, sell to one or more banks, financial institutions or other entities (“Participants”) (other than with respect to an assignment to a Prohibited Transferee, which shall be subject to the prior written consent of the applicable Seller) participating interests in any Transaction, its interest in the Purchased Assets, or any other interest of Buyer under this Agreement. Buyer may, at any time and from time to time, upon prior written notice to the applicable Seller, assign to any Person (other than Prohibited Transferees, so long as no Event of Default has occurred and is continuing, in which case such limitation shall not apply) (an “Assignee” and together with Participants, each a “Transferee” and collectively, the “Transferees”) all or any part of its rights its interest in the Purchased Assets, or any other interest of Buyer under this Agreement; provided, however, that in all such circumstances (for the avoidance of doubt, including participations) other than a sale, assignment, transfer or participation by Buyer of one hundred percent (100%) of its rights and obligations under the Transaction Documents (which sale, assignment, transfer or participation, if Buyer does not retain control and authority over its rights and obligations under the Transaction Documents, shall be subject to the prior written consent of the applicable Seller, not to be unreasonably withheld, conditioned or delayed), (i) Buyer shall retain control and authority over its rights and obligations under the Transaction Documents and any Transaction, subject to major decision approval rights, (ii) the applicable Seller shall not be obligated or required to deal directly or indirectly with any Person other than Buyer, and (iii) such Seller shall not be charged for, incur or be required to reimburse Buyer or any other Person for any costs or expense relating to any such sale, assignment, transfer or participation. Each Seller and Guarantor agrees to reasonably cooperate with Buyer, at Buyer’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, this Agreement in order to give effect to such assignment, transfer or sale. Each Seller agrees that each properly registered Participant shall be entitled to the benefits of Article 3(h), Article 3(i), and Articles 3(n) through (s) (subject to the requirements and limitations therein, including, without limitation and for the avoidance of doubt, the requirements under Article 3(o) or Article 3(p) (it being understood that the documentation required under Article 3(p) shall be delivered to the participating Buyer or Assignee, as applicable)) to the same extent as if it were an Assignee and had acquired its

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interest by assignment pursuant to this Article 17(a); provided that such Participant (A) agrees to be subject to the provisions of Article 3 as if it were an Assignee under this Article 17(a), and (B) shall not be entitled to receive any greater payment under Article 3(o) or Article 3(q), with respect to any participation, than its participating Buyer or Assignee, as applicable, would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from the adoption of or any change in any Requirement of Law or in the interpretation or application thereof by a Governmental Authority, in any case which occurs after the Participant acquired the applicable participation. Each Buyer or Assignee that sells a participation agrees to use reasonable efforts to cooperate with Sellers to effectuate the provisions of Article 3 with respect to the applicable Participant.

(b) Title to all Purchased Assets and Purchased Items shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets. Nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets and Purchased Items or otherwise selling, pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets and Purchased Items, all on terms that Buyer may determine in its sole discretion other than with respect to repurchase transactions or sales, pledges, repledges, transfers, hypothecations, or rehypothecations to Prohibited Transferees, which shall be subject to the prior written consent of the applicable Seller; provided, however, that Buyer shall transfer the applicable Purchased Assets to the related Seller on the applicable Repurchase Date free and clear of any pledge, lien, security interest, encumbrance, charge or other adverse claim on any of the Purchased Assets. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets or Purchased Items transferred to Buyer by the applicable Seller.

(c) Buyer, acting for this purpose as an agent of the applicable Seller, shall maintain at one of its offices a register for the recordation of the names and addresses of Buyer, and the percentage of the rights and obligations under this Agreement owing to, Buyer and each Transferee pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and each Seller, Buyer, and each Transferee shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Buyer or Transferee, as applicable, hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by either Seller at any reasonable time and from time to time upon reasonable prior notice; provided that Buyer shall have no obligation to disclose all or any portion of the Register regarding Participants (including the identity of any Participant or any information relating to a Participant’s beneficial interest in this Agreement) to any Person except to the extent that such disclosure is necessary to establish that such beneficial interest in this Agreement or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Register shall be conclusive absent manifest error, and Buyer shall treat each Person whose name is recorded in the Register as the owner of its respective interest for all purposes of this Agreement notwithstanding any notice to the contrary. No sale, assignment, transfer or participation pursuant to this Article 17 shall be effective until reflected in the Register.

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ARTICLE 18.

GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

ARTICLE 19.

NO WAIVERS, ETC.

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. Without limitation on any of the foregoing, the failure to give a notice pursuant to Articles 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.

ARTICLE 20.

USE OF EMPLOYEE PLAN ASSETS

(a) If assets of an employee benefit plan subject to any provision of ERISA are intended to be used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed.

(b) Subject to the last sentence of subparagraph (a) of this Article 20, any such Transaction shall proceed only if the applicable Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.

(c) By entering into a Transaction or a related Additional Purchase Transaction or Future Funding Transaction, pursuant to this Article 20, the applicable Seller shall be deemed (i) to represent to Buyer that since the date of such Seller’s latest such financial statements, there has been no material adverse change in such Seller’s financial condition that such Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is such Seller in any outstanding Transaction involving a Plan Party.

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ARTICLE 21.

INTENT

(a) The parties intend and recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code (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 the Bankruptcy Code (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). The Parties intend (a) for each Transaction to qualify for the safe harbor treatment provided by the Bankruptcy Code and for Buyer to be entitled to all of the rights, benefits and protections afforded to Persons under the Bankruptcy Code with respect to a “repurchase agreement” as defined in Section 101(47) of the Bankruptcy Code and a “securities contract” as defined in Section 741(7) of the Bankruptcy Code and that payments under this Agreement are deemed “margin payments” or “settlement payments,” as defined in Section 741 of the Bankruptcy Code, (b) for the grant of a security interest set forth in Article 6 to also be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code and a “repurchase agreement” as that term is defined in Section 101(47)(A)(v) of the Bankruptcy Code, and (c) that each party (for so long as each is either a “financial institution,” “financial participant,” “repo participant,” “master netting participant” or other entity listed in Section 546, 555, 559, 561, 362(b)(6) or 362(b)(7) of the Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections afforded under the Bankruptcy Code with respect to a “repurchase agreement” and a “securities contract,” and a “master netting agreement,” including (x) the rights, set forth in Article 12 and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased Assets and terminate this Agreement, and (y) the right to offset or net out as set forth in Article 12 and in Sections 362(b)(6), 362 (b)(7), 362(b)(27), 362(o) and 546 of the Bankruptcy Code. 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”).

(b) It is understood that either party’s right to accelerate or terminate this Agreement or to liquidate Assets delivered to it in connection with the Transactions hereunder or to exercise any other remedies pursuant to Article 12 hereof is a contractual right to accelerate, terminate or liquidate this Agreement or the Transactions as described in Sections 555 and 559 of the Bankruptcy Code. It is further understood and agreed that either party’s right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement or the Transactions hereunder is a contractual right to cause the termination, liquidation or acceleration of, or to offset net termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement as described in Section 561 of the Bankruptcy Code.

(c) The parties agree 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).

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(d) Each party hereto hereby further agrees that it shall not challenge the characterization of (i) this Agreement or any Transaction as a “repurchase agreement,” “securities contract” and/or “master netting agreement,” or (ii) each party as a “repo participant” within the meaning of the Bankruptcy Code except insofar as the type of Asset subject to the Transactions or, in the case of a “repurchase agreement,” the term of the Transactions, would render such definition inapplicable.

(e) It is understood 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).

(f) It is understood that this Agreement constitutes a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, and as used in Section 561 of the Bankruptcy Code.

(g) Notwithstanding anything herein to the contrary, 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, and that the applicable Seller be (except to the extent that Buyer shall have exercised its remedies following an Event of Default) the owner of the Purchased Assets for such purposes. Unless prohibited by applicable law, each Seller and Buyer shall treat the Transactions as described in the preceding sentence (including 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.

ARTICLE 22.

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934, 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 any Transaction hereunder;

(b) in the case of Transactions 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 Exchange Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder;

(c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder 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; and

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(d) In the case of Transactions in which one of the parties is an “insured depository institution”, as that term is defined in Section 1813(c)(2) of Title 12 of the United States Code, funds held by the financial institution pursuant to a Transaction are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund or the Bank Insurance Fund, as applicable.

ARTICLE 23.

CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

(a) Each party irrevocably and unconditionally (i) submits to the non-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.

(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.

(c) The parties hereby irrevocably waive, to the fullest extent each may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding and irrevocably 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. 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. Nothing in this Article 23 shall affect the right of Buyer to serve legal process in any other manner permitted by law or affect the right of Buyer to bring any action or proceeding against either Seller or its property in the courts of other jurisdictions.

(d) EACH OF THE PARTIES 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 24.

NO RELIANCE

Each Seller and Buyer 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;

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(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 underlying assets or liabilities and not for purposes of speculation; and

(e) 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.

ARTICLE 25.

INDEMNITY

Each Seller hereby agrees to indemnify Buyer, Buyer’s Affiliates and each of its officers, directors, employees and agents (“Indemnified Parties”) from and against any and all actual out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including attorneys’ fees and disbursements) 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, this Agreement or any Transactions hereunder or any action taken or omitted to be taken by any Indemnified Party under or in connection with any of the foregoing; provided, that neither Seller shall be liable for losses resulting from the gross negligence, bad faith or willful misconduct of Buyer or any other Indemnified Party. Without limiting the generality of the foregoing, each Seller agrees to hold Buyer harmless from and indemnify Buyer 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; provided, that neither Seller shall be liable for losses resulting from the gross negligence, bad faith or willful misconduct of Buyer or any other Indemnified Party. In any suit, proceeding or action

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brought by Buyer in connection with any Purchased Asset for any sum owing thereunder, or to enforce any provisions of any Purchased Asset, each Seller will save, indemnify and hold Buyer harmless from and against all out-of-pocket expense (including reasonable attorneys’ fees of outside counsel), loss or damage suffered 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 either Seller 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 either Seller. Each Seller also agrees to reimburse Buyer as and when billed by Buyer for all Buyer’s reasonable out-of-pocket costs and expenses incurred in connection with Buyer’s due diligence reviews with respect to the Purchased Assets (including, without limitation, those incurred pursuant to Article 26 and Article 3 (including, without limitation, all Due Diligence Legal Expenses, even if the underlying prospective Transaction for which they were incurred does not take place for any reason) and the enforcement or the preservation of Buyer’s rights under this Agreement, any Transaction Documents or Transaction contemplated hereby, including without limitation the reasonable fees and disbursements of its outside counsel. Each Seller hereby acknowledges that the obligation of such Seller hereunder is a recourse obligation of Seller. This Article 25 shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

ARTICLE 26.

DUE DILIGENCE

Each Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and such Seller agrees that upon reasonable prior notice to such Seller, Buyer or its authorized representatives will be permitted during normal business hours 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 Seller, any servicer or subservicer and/or the Custodian. Each Seller agrees to reimburse Buyer for any and all reasonable out-of-pocket costs and expenses incurred by Buyer with respect to the Purchased Assets during the term of this Agreement, which shall be paid by such Seller to Buyer within five (5) days after receipt of an invoice therefor. Each Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Purchased Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, each Seller acknowledges that Buyer may enter into Transactions with such Seller based solely upon the information provided by such Seller to Buyer and the representations, warranties and covenants contained herein, and that Buyer, 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. Buyer may underwrite such Purchased Assets itself or engage a third party underwriter to perform such underwriting. Each Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any 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. Each Seller further agrees that Seller shall reimburse Buyer for any and all attorneys’ fees, costs and expenses incurred by Buyer in connection with continuing due diligence on Eligible Assets and Purchased Assets.

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ARTICLE 27.

SERVICING

(a) Each servicer of any Purchased Asset (including the Interim Servicer) shall service the Purchased Assets for the benefit of Buyer and Buyer’s successors and assigns. Each Seller shall cause each such servicer (including the Interim Servicer) to service the Purchased Assets at such Seller’s sole cost and for the benefit of Buyer in accordance with Accepted Servicing Practices; provided that, without prior written consent of Buyer in its sole discretion as required by Article 7(d), no servicer (including the Interim Servicer and the primary servicer) of any of the Purchased Assets shall take any action with respect to any Purchased Asset described in Article 7(d).

(b) Each Seller agrees that Buyer is the owner of all servicing records, including but not limited to any and all servicing agreements and pooling and servicing agreements (including, without limitation each Interim Servicing Agreement or any other servicing agreement relating to the servicing of any or all of the Purchased Assets) (collectively, the “Servicing Agreements”), 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 safeguard such Servicing Records and to deliver them promptly to Buyer or its designee (including the Custodian) at Buyer’s request. Sellers shall cause each Foreign Purchased Asset to be serviced by a servicer acceptable to Buyer and in accordance with a Servicing Agreement in the form set forth in Exhibit XVII hereto.

(c) Upon the occurrence and during the continuance of an Event of Default, Buyer may, in its sole discretion, (i) sell its right to the Purchased Assets on a servicing released basis and/or (ii) terminate Seller (as the servicer), the Interim Servicer or any other servicer or sub-servicer of the Purchased Assets with or without cause, in each case without payment of any termination fee.

(d) Neither Seller shall employ sub-servicers or any other servicers other than the Interim Servicer pursuant to the applicable Interim Servicing Agreement to service the Purchased Assets without the prior written approval of Buyer, in Buyer’s sole discretion. If the Purchased Assets are serviced by a sub-servicer or any other servicer, the applicable Seller shall, irrevocably assign all rights, title and interest (if any) in the servicing agreements in the related Purchased Assets to Buyer. Each Seller shall cause all servicers (other than the Interim Servicer) and sub-servicers engaged by such Seller to execute the Servicer Notice with Buyer acknowledging Buyer’s security interest and agreeing that each servicer and/or sub-servicer shall immediately transfer all Income and other amounts with respect to the Purchased Assets in accordance with the applicable Servicing Agreement and so long as any Purchased Asset is owned by Buyer hereunder, following notice from Buyer to such Seller and each such servicer of an Event of Default under this Agreement, each such servicer (including the Interim Servicer) or sub-servicer shall take no action with regard to such Purchased Asset other than as specifically

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directed by Buyer. Each Seller shall cause each Servicing Agreement (including each Interim Servicing Agreement) to be consistent with the terms of this Agreement and each Servicer (including the Interim Servicer) to comply with such terms.

(e) The payment of servicing fees shall be subordinate to payment of amounts outstanding under any Transaction and this Agreement.

(f) For the avoidance of doubt, each Seller retains no economic rights to the servicing, other than such Seller’s rights under the applicable Interim Servicing Agreement. As such, each Seller expressly acknowledges that the Purchased Assets are sold to Buyer on a “servicing released” basis with such servicing retained by the Servicer.

(g) Each Seller shall cause each servicer of a Purchased Asset to provide to Buyer, the Interim Servicer, and to the Custodian via electronic transmission, promptly upon request by Buyer a Servicing Tape for the month (or any portion thereof) prior to the date of Buyer’s request; provided, that to the extent any servicer does not provide any such Servicing Tape, such Seller shall prepare and provide to Buyer, the Interim Servicer and Custodian via electronic transmission a remittance report containing the servicing information that would otherwise be set forth in the Servicing Tape; and provided, further, that regardless of whether such Seller at any time delivers any such remittance report, such Seller shall at all times use commercially reasonable efforts to cause each servicer to provide each Servicing Tape in accordance herewith.

ARTICLE 28.

MISCELLANEOUS

(a) Each Seller hereby acknowledges and agrees that Buyer may either securitize or participate, syndicate or otherwise sell interests in the Transactions, any Transaction and/or any portion thereof (any such transaction, a “Secondary Market Transaction”). To the extent Buyer desires to implement any Secondary Market Transaction, each Seller agrees to reasonably cooperate with Buyer, at Buyer’s sole cost and expense (including, without limitation, Buyer’s attorneys’ fees and costs and such Seller’s reasonable attorneys’ fees and costs), to plan, structure, negotiate, implement and execute such Secondary Market Transaction; provided that such Secondary Market Transaction has no material adverse tax consequence on such Seller or their direct or indirect owners. Each Seller hereby further acknowledges and agrees that (i) Buyer reserves the right to convert any Transaction or Transactions (or any portion thereof) at any time (including in connection with a Secondary Market Transaction) to components, pari passu financing or subordinate financing, including one or more tranches of preferred equity, subordinate debt, multiple notes, or participation interests, each subordinate to such loan (“Subordinate Financing”, and the senior portion of any such Subordinate Financing, the “Senior Tranche”), and (ii) any such Subordinate Financing shall have individual coupon rates that, when blended with the Senior Tranche in the aggregate, shall initially equal the Price Differential. Each Seller acknowledges and agrees that the terms of any such Subordinate Financing will provide that a default under the Senior Tranche shall be a default under the respective Subordinate Financing. Each Seller consents to disclosure by Buyer or any of its Affiliates of the Purchased Assets, collateral therefor and such Seller’s and its Affiliates’ and/or principals’ operating and financial statements in connection with the servicing of any Purchased Assets and any Secondary Market Transaction.

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(b) All rights, remedies and powers of Buyer 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 Buyer 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, Buyer shall have all rights and remedies of a secured party under the UCC.

(c) 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.

(d) The headings in the Transaction Documents are for convenience of reference only and shall not affect the interpretation or construction of the Transaction Documents.

(e) Without limiting the rights and remedies of Buyer under the Transaction Documents, each Seller shall pay Buyer’s reasonable actual out-of-pocket costs and expenses, including reasonable fees and expenses of accountants, attorneys and advisors, incurred in connection with the preparation, negotiation, execution and consummation of, and any amendment, supplement or modification to, the Transaction Documents and the Transactions thereunder, whether or not such Transaction Document (or amendment thereto) or Transaction is ultimately consummated. Each Seller agrees to pay Buyer on demand all costs and expenses (including reasonable expenses for legal services of every kind) of any subsequent enforcement of any of the provisions hereof, or of the performance by Buyer of any obligations of such Seller in respect of the Purchased Assets, or any actual or attempted sale, or any exchange, enforcement, collection, compromise or settlement in respect of any of the Purchased Items and for the custody, care or preservation of the Purchased Items (including insurance costs) and defending or asserting rights and claims of Buyer in respect thereof, by litigation or otherwise. In addition, each Seller agrees to pay Buyer on demand all reasonable costs and expenses (including reasonable expenses for legal services) incurred in connection with the maintenance of each Depository Account and registering the Purchased Items in the name of Buyer or its nominee. All such expenses shall be recourse obligations of the applicable Seller to Buyer under this Agreement. This Article 28(e) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

(f) In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of such rights, each Seller hereby grants to Buyer and its Affiliates a right of offset, to secure repayment of all amounts owing to Buyer or its Affiliates by such Seller under the Transaction Documents, upon any and all monies, securities, collateral or other property of such Seller and the proceeds therefrom, now or hereafter held or received by Buyer or its Affiliates or any entity under the Control of Buyer or its Affiliates and its respective successors and assigns (including, without limitation, branches and agencies of Buyer, wherever located), for the account of such Seller, whether for safekeeping, custody, pledge, transmission, collection, or otherwise, and also upon any and all deposits (general or specified) and credits of such Seller at any time existing. Buyer 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 notice to such Seller, to offset, appropriate, apply and enforce such right of offset against any and all items hereinabove referred to against any amounts owing to Buyer or its Affiliates by

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such Seller thereof under the Transaction Documents or any other agreement, irrespective of whether Buyer or its Affiliates shall have made any demand hereunder and although such amounts, or any of them, shall be contingent or unmatured and regardless of any other collateral securing such amounts. Each Seller shall be deemed directly indebted to Buyer and its Affiliates in the full amount of all amounts owing to Buyer and its Affiliates by such Seller under the Transaction Documents or any other agreement, and Buyer and its Affiliates shall be entitled to exercise the rights of offset provided for above. ANY AND ALL RIGHTS TO REQUIRE BUYER OR ITS AFFILIATES TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS THAT SECURE THE AMOUNTS OWING TO BUYER OR ITS AFFILIATES BY SUCH SELLER UNDER THE TRANSACTION DOCUMENTS, PRIOR TO EXERCISING THEIR RIGHT OF OFFSET WITH RESPECT TO SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF SUCH SELLER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SUCH SELLER.

(g) 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.

(h) This Agreement contains 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.

(i) 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.

(j) 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.

(k) Wherever pursuant to this Agreement, Buyer 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, Buyer in its sole discretion, Buyer 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 Buyer shall be final and conclusive.

(l) Each Affiliated Hedge Counterparty is an intended third party beneficiary of this Agreement and the parties hereto agree that this Agreement shall not be amended or otherwise modified without the written consent of each Affiliated Hedge Counterparty, such consent not to be unreasonably withheld.

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ARTICLE 29.

JOINT AND SEVERAL OBLIGATIONS

(a) Each Seller hereby acknowledges and agrees that (i) each Seller shall be jointly and severally liable to Buyer to the maximum extent permitted by Requirements of Law for all Repurchase Obligations, (ii) until all Repurchase Obligations shall have been paid in full and the expiration of any applicable preference or similar period pursuant to any Insolvency Law, or at law or in equity, has expired, the liability of each Seller (A) shall be absolute and unconditional and shall remain in full force and effect (and, if suspended or terminated, shall be reinstated) and, for the avoidance of doubt, such liability shall be absolute and unconditional and shall remain in full force and effect even if Buyer shall not make a claim before the expiration of such period asserting an interest in all or any part of any payment(s) received by Buyer, and (B) shall not be discharged, affected, modified or impaired on the occurrence from time to time of any event, including, but limited to, any of the following events, whether or not with notice to, or the consent of, each or any Seller: (1) the waiver, forbearance, compromise, settlement, release, termination, modification or amendment (including, but not limited to, any extension or postponement of the time for payment or performance or renewal or refinancing) of any of the Repurchase Obligations, (2) the failure to give notice to each or any Seller of the occurrence of a Default or an Event of Default, (3) the release, substitution or exchange by Buyer of any Purchased Asset (with or without consideration) or the acceptance by Buyer of any additional collateral or the availability or claimed availability of any other collateral or source of repayment or any nonperfection, subordination of priority (whether at law or equity) or any other impairment of any collateral, (4) the full or partial release of, or waiver or forbearance from enforcing any rights against, any Person primarily or secondarily liable for payment or performance of all or any part of the Repurchase Obligations, whether or not by Buyer, and whether or not in connection with any Insolvency Proceeding affecting any Seller or any other Person, has (x) any obligations in respect of the Repurchase Obligations or any part thereof, or (y) granted any security interest in any of its collateral as security for any of the Repurchase Obligations, or (5) to the extent permitted by Requirements of Law, any other event, occurrence, action or circumstance that would, in the absence of this Article 29, result in the release or discharge, in whole or in part, of any or all of Sellers from the payment, performance or observance of any Repurchase Obligation, (iii) Buyer shall not be required first to initiate any suit or to attempt to enforce or exhaust its remedies against any Seller or any other Person, in order to enforce the Transaction Documents or seek payment and/or performance of any or all of the Repurchase Obligations against any Seller and each Seller expressly agrees that, notwithstanding the occurrence of any of the foregoing, each Seller is and shall remain directly and primarily liable for all sums due under any of the Transaction Documents, including, but not limited to, all of the Repurchase Obligations, (iv) when making any demand hereunder against any Seller, Buyer may, but shall be under no obligation to, make a similar demand on any other Seller, and (x) any failure by Buyer to make any such demand, enforce or attempt to enforce any of Buyer’s rights, or collect or attempt to collect any payments from any other Seller, or (y) any release by Buyer of any other Seller shall not, in either case, relieve any Seller of its obligations or liabilities hereunder or under any other Transaction Document, and shall not impair or affect

98

the rights and remedies, express or implied, or as a matter of law or equity, of Buyer against any Seller or all of the Sellers, and (v) on disposition by Buyer of any collateral securing any of the Repurchase Obligations, each Seller shall be and shall remain jointly and severally liable for any deficiency up to and including, with respect to each Seller, the value of the Purchased Assets purchased from such Seller. It is expressly agreed that Foreign Asset Seller is liable to Buyer for all obligations of U.S. Seller under the Other Repurchase Agreement, including, without limitation, the Other Facility Repurchase Obligations.

(b) Notwithstanding anything in this Agreement or any other Transaction Document to the contrary, the obligations of each Seller with respect to joint and several liability hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Seller’s obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the Bankruptcy Code or any provisions of applicable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such Seller, contingent or otherwise, that are relevant under the Fraudulent Transfer laws.

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IN WITNESS WHEREOF, the parties have executed this Agreement as a deed as of the day first written above.

BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association
By:	/s/ Thomas N. Cassino
Name:	Thomas N. Cassino
Title:	Vice President

In its capacity as Other Facility Buyer, and solely for

purposes of acknowledging and agreeing to

Articles 6(d), 6(e), and 6(h) hereof:

OTHER FACILITY BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association
By:	/s/ Thomas N. Cassino
Name:	Thomas N. Cassino
Title:	Vice President

SELLERS:
PARLEX 4 UK FINCO, LLC, a Delaware limited liability company
By:	Douglas Armer
Name:	Douglas Armer
Title:	Head of Capital Markets and Treasurer

PARLEX 4 FINANCE, LLC, a Delaware limited liability company
By:	Douglas Armer
Name:	Douglas Armer
Title:	Head of Capital Markets and Treasurer

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ANNEXES, EXHIBITS AND SCHEDULES

ANNEX I	Names and Addresses for Communications between Parties
SCHEDULE I	Prohibited Transferees
EXHIBIT I	Form of Confirmation
EXHIBIT II	Authorized Representatives of Sellers
EXHIBIT III-A	Monthly Reporting Package
EXHIBIT III-B	Quarterly Reporting Package
EXHIBIT III-C	Annual Reporting Package
EXHIBIT IV	Form of Custodial Delivery Certificate
EXHIBIT V-A	Form of Power of Attorney for U.S. Purchased Assets
EXHIBIT V-B	Form of Power of Attorney for Foreign Purchased Assets
EXHIBIT VI	Representations and Warranties Regarding Individual Purchased Assets
EXHIBIT VII	Asset Information
EXHIBIT VIII	Purchase Procedures
EXHIBIT IX	Form of Bailee Letter
EXHIBIT X	Form of Margin Deficit Notice
EXHIBIT XI	Form of Tax Compliance Certificates
EXHIBIT XII	UCC Filing Jurisdictions
EXHIBIT XIII	Form of Servicer Notice
EXHIBIT XIV	Form of Release Letter
EXHIBIT XV	Covenant Compliance Certificate
EXHIBIT XVI	Form of Re-Direction Letter
EXHIBIT XVII	Form of Servicing Agreement for Foreign Purchased Assets

ANNEX I

Names and Addresses for Communications Between Parties

Buyer:

JPMorgan Chase Bank, National Association

4 New York Plaza, 20th Floor

New York, New York 10004

Attention: Ms. Nancy S Alto

Telephone: (212) 623-1989

Fax: (917) 546-2564

With copies to:

JPMorgan Chase Bank, National Association

270 Park Avenue, 10th Floor

New York, New York 10017-2014

Attention: Chuck Y. Lee

Telephone: (212) 834-5467

Fax: (212) 834-6593

and

Cadwalader Wickersham & Taft LLP

227 West Trade Street

Charlotte, North Carolina 28202

Attention: Stuart N. Goldstein, Esq.

Telephone: (704) 348-5258

Fax: (704) 348-5200

Sellers:

Parlex 4 Finance, LLC and Parlex 4 UK Finco, LLC

c/o Blackstone Mortgage Trust, Inc.

345 Park AvenueNew York, NY 10154

Attention: Douglas Armer

Telephone: (212) 583-5000E

mail: BXMTJPMRepo@blackstone.com

With a copy to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036-8704

Attention: David C. Djaha, Esq.

Telephone: (212) 841-0489

SCHEDULE I

Prohibited Transferees

All Affiliates, successors and assigns of the entities listed on this Schedule I and such other Persons indicated by Sellers from time to time and approved by Buyer, such approval not to be unreasonably withheld, shall be Prohibited Transferees, as defined and used in the Agreement.

Angelo, Gordon & Co., L.P.	LoanCore Capital, LLC
Annaly Capital Management, Inc.	Lone Star U.S. Acquisitions, LLC
Apollo Commercial Real Estate Finance, Inc.	Macquarie Group Limited
Arbor Realty Trust Inc.	Mesa West Capital, LLC
Ares Commercial Real Estate Corporation	NCH Capital Inc.
Brookfield Investment Management Inc.	Newcastle Investment Corp.
Cantor Fitzgerald & Co.	NorthStar Realty Finance Corp.
CapitalSource Inc.	OZ Management LP
Children’s Investment Fund LP	Pacific Investment Management Company LLC
Colony Financial, Inc.	RAIT Financial Trust
CreXus Investment Corp.	Redwood Trust Inc.
Fortress Credit Corp.	Rialto Capital Management, LLC
Guggenheim Partners, LLC	SL Green Realty Corp.
H/2 Credit Manager LP	Square Mile Capital Management, LLC
iStar Financial Inc.	Starwood Capital Group
Invesco Ltd.	Starwood Property Trust, Inc.
KKR & Co. L.P.	TPG Capital Management, L.P.
Ladder Capital Securities LLC	Winthrop Capital Management, LLC

EXHIBIT I

CONFIRMATION STATEMENT

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

Ladies and Gentlemen:

[        ] is pleased to deliver our written CONFIRMATION of our agreement to enter into the Transaction pursuant to which JPMorgan Chase Bank, National Association shall purchase from us the Purchased Assets identified on the attached Schedule 1 to this Confirmation pursuant to the Master Repurchase Agreement, dated as of December 20, 2013 (the “Agreement”), between JPMorgan Chase Bank, National Association (the “Buyer”) and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC (the “Sellers”) on the following terms. Capitalized terms used herein without definition have the meanings given in the Agreement.

Purchase Date:	, 201
Name of Purchased Asset(s):	[            ]
Aggregate Principal Amount of Purchased Assets:	[            ]
Repurchase Date:
Purchase Price:	[            ]
Market Value:	[            ]
LTV:	[            ]
Pricing Rate:	one month LIBOR plus [    ]%
Maximum Pricing Rate:	one month LIBOR plus [    ]%
Advance Rate:	[    ]%
Maximum Advance Rate: Denomination of Purchased Asset:	[    ]% [US$ or Pound Sterling]
Spot Rate:	[            ]
Requested Additional Purchase Amount:	[            ]
Requested Future Funding Amount:	[            ]
Governing Agreements:	[            ]
Requested Wire Amount:	$[        ]
Requested Fund Date:	[        ] [    ], 201[    ]

Wiring Instructions:

[        ]1

Name and address for communications:

Buyer: JPMorgan Chase Bank, National Association 4 New York Plaza, 20th Floor New York, New York 10004 Attention: Ms. Nancy S. Alto Telephone: (212) 623-1989 Fax: (917) 546-2564 With copies to: JPMorgan Chase Bank, National Association 270 Park Avenue, 10th Floor New York, New York 10017-2014 Attention: Chuck Y. Lee Telephone: (212) 834-5467 Fax: (212) 834-6593 and Cadwalader Wickersham & Taft LLP 227 West Trade Street Charlotte, North Carolina 28202 Attention: Stuart N. Goldstein, Esq. Telephone: (704) 348-5258 Fax: (704) 348-5200 Sellers: Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC c/o Blackstone Mortgage Trust, Inc. 345 Park Avenue New York, NY 10154 Attention: Douglas Armer Telephone: (212) 583-5000 Email: BXMTJPMRepo@blackstone.com With a copy to: Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036-8704 Attention: David C. Djaha, Esq. Telephone: (212) 841-0489

¹  If wire instructions are to an account other than as specified in Section 3(b)(v) of the Agreement, the Confirmation shall require the signature of two Responsible Officers of Seller.

[        ]
By:
	Name:
	Title:

AGREED AND ACKNOWLEDGED:

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

By:
	Name:
	Title:

Schedule 1 to Confirmation Statement

Purchased Assets:

Aggregate Principal Amount:

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLERS

EXHIBIT III-A

MONTHLY REPORTING PACKAGE

The Monthly Reporting Package shall include, inter alia, the following:

• Any and all financial statements, rent rolls or other material information received from the borrowers related to each Purchased Asset. To the extent that Seller fails, after diligent efforts, to obtain on a monthly basis such financial statements, rent rolls and other material information from the borrowers, Seller shall provide such information to Buyer on a quarterly basis.

• 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 there has been any material adverse change to the real property, on a loan by loan basis and in the aggregate, with respect to the Purchased Assets serviced by any servicer (such remittance report, a “Servicing Tape”), or to the extent any 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.

• A listing of all Purchased Assets reflecting the payment status of each Purchased Asset and any material changes in the financial or other condition of each Purchased Asset.

• A listing of any existing Defaults.

• Trustee remittance reports.

• All other information as Buyer, from time to time, may reasonably request with respect to Seller or any Purchased Asset, obligor or Underlying Mortgaged Property.

• A certificate substantially in the form attached hereto as Exhibit XV to this Agreement (the “Covenant Compliance Certificate”), from a Responsible Officer of Seller.

EXHIBIT III-B

QUARTERLY REPORTING PACKAGE

The Quarterly Reporting Package shall include, inter alia, the following:

• Consolidated unaudited financial statements of Guarantor presented fairly in accordance with GAAP or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the Exchange Act, or similar state securities laws, presented in accordance with applicable statutory and/or regulatory requirements and delivered to Buyer within the same time frame as are required to be filed in accordance with such applicable statutory or regulatory requirements, in either case accompanied by a Covenant Compliance Certificate, including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter, and certified as being true and correct by a Covenant Compliance Certificate.

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EXHIBIT III-C

ANNUAL REPORTING PACKAGE

The Annual Reporting Package shall include, inter alia, the following:

• Guarantor’s consolidated audited financial statements, prepared by a nationally recognized independent certified public accounting firm and presented fairly in accordance with GAAP or, if such financial statements being delivered have been filed with the SEC pursuant to the requirements of the Exchange Act, or similar state securities laws, presented in accordance with applicable statutory and/or regulatory requirements and delivered to Buyer within the same time frame as are required to be filed in accordance with such applicable statutory and/or regulatory requirements, in either case accompanied by a Covenant Compliance Certificate, including a statement of operations and a statement of changes in cash flows for such quarter and statement of net assets as of the end of such quarter accompanied by an unqualified report of the nationally recognized independent certified public accounting firm that prepared them.

-3-

EXHIBIT IV

FORM OF CUSTODIAL DELIVERY CERTIFICATE

On this [    ] day of [        ], 201[    ], [        ], a Delaware limited liability company, as a Seller (“Seller”) under that certain Master Repurchase Agreement, dated as of December 20, 2013 (as amended, modified or supplemented from time to time, the “Repurchase Agreement”) between JPMorgan Chase Bank, National Association (“Buyer”) and Seller, does hereby deliver to the documents comprising the Purchased Asset File and listed on Exhibit B hereto with respect to the Purchased Asset identified in Exhibit A hereto to (a) [        ] (the “Bailee”), for Bailee to hold for the benefit of Buyer for delivery to the Custodian (as defined below) and pursuant to that certain Bailee Agreement, dated as of the date hereof between Seller, Buyer, and Bailee, and (b) U.S. Bank National Association (“Custodian”), as custodian under that certain Custodial Agreement, dated as of December 20, 2013 (as amended, modified or supplemented from time to time, the “Custodial Agreement”), among Buyer, Custodian and Seller. Seller hereby instructs the Bailee to comply with the Bailee Letter and the Custodian to comply with the Custodial Agreement, in each case, holding the Purchased Asset File for the benefit of Buyer.

With respect to the Purchased Asset Files delivered hereby, for the purposes of issuing the Trust Receipt, the Custodian shall review the Purchased Asset Files to ascertain delivery of the documents listed in Section 3 of the Custodial Agreement.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Custodial Agreement.

IN WITNESS WHEREOF, Seller has caused its name to be signed hereto by its officer thereunto duly authorized as of the day and year first above written.

[                            ]
By:
	Name:
	Title:

Exhibit A

PURCHASED ASSET SCHEDULE

For each Purchased Asset set forth below, Seller shall provide, as applicable, the following information:

A. Loan Number:

B. Obligor Name:

C. Property Name and Address:

D. Original Balance:

E. Maturity Date:

Exhibit B

PURCHASED ASSET FILE

	DOCUMENT NAME	REQ’D2	DEL’D3	STATUS4	COMMENTS5
1.
2.
3.
4.
5.

²  Seller to indicate whether the document is required to be delivered.

³  Seller to indicate whether the document is being delivered (applies to this delivery only – do not mark if documents were previously delivered).

⁴  Seller to indicate whether the document is an original, certified copy or copy. For recordable documents, indicate if document is recorded, sent for recordation, not sent for recordation.

⁵  Seller may indicate any relevant comments.

EXHIBIT V-A

FORM OF POWER OF ATTORNEY FOR U.S. PURCHASED ASSETS

Know All Men by These Presents, that Parlex 4 Finance, LLC, a Delaware limited liability company (“Seller”), does hereby appoint JPMorgan Chase Bank, National Association (“Buyer”), its attorney-in-fact to act in Seller’s name, place and stead in any way that Seller could do with respect to (i) complete the endorsements of the Purchased Assets, including without limitation the Mortgage Notes, Assignments of Mortgages, Mezzanine Notes, Participation Certificates and assignments of participation interests and any transfer documents related thereto, (ii) record the Assignments of Mortgages, (iii) prepare and file and record each Assignment of Mortgage or other assignment, (iii) take any action (including exercising voting and/or consent rights) with respect to any participation interest, (iv) complete the preparation and filing, in form and substance satisfactory to Buyer, of such financing statements, continuation statements, and other UCC forms, as Buyer may from time to time, reasonably consider necessary to create, perfect, and preserve Buyer’s security interest in the Purchased Assets, (v) enforce Seller’s rights under the Purchased Assets purchased by Buyer pursuant to this Agreement, and (vi) to take such other steps as may be necessary or desirable to enforce Buyer’s rights against, under or with respect to such Purchased Assets and the related Purchased Asset Files and the Servicing Records and (iv) the enforcement of Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the Master Repurchase Agreement dated as of December 20, 2013 (the “Repurchase Agreement”), between Buyer and Sellers, and to take such other steps as may be necessary or desirable to enforce Buyer’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; provided that Buyer agrees not to exercise its rights under this instrument unless a monetary Default, material non-monetary Default or an Event of Default has occurred and is continuing.

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 AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a deed this 20^th day of December, 2013.

[                            ]
By:
	Name:
	Title:

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EXHIBIT V-B

FORM OF POWER OF ATTORNEY FOR FOREIGN PURCHASED ASSETS

THIS POWER OF ATTORNEY is made and given on December 20, 2013, by Parlex 4 UK Finco, LLC, a limited liability company incorporated under the laws of Delaware whose registered office is at [        ] (the “Seller”) in favour of JPMorgan Chase Bank, National Association, whose registered office is at [        ] (the “Attorney”), for the purposes and on the terms hereinafter set forth.

(A) By a Master Repurchase Agreement dated December 20, 2013 (the “Agreement”), the Seller agreed to sell, and the Attorney agreed to purchase, the Purchased Assets on terms requiring the 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, the Seller has agreed to enter into these presents for the purposes hereinafter appearing.

NOW THIS DEED WITNESSETH and THE SELLER HEREBY APPOINTS the Attorney to be its true and lawful attorney in the name of the Seller or otherwise, for and on behalf of the Seller to do any of the following acts, deeds and things or any of them:

(a) date and deliver to the facility agent for execution any Transfer Certificate executed by the 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 Buyer, of such financing statements, continuation statements, and other UCC forms, as Buyer may from time to time, reasonably consider necessary to create, perfect, and preserve Buyer’s security interest in the Purchased Assets,

(d) enforce Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the Agreement,

(e) to take such other steps as may be necessary or desirable to enforce Buyer’s rights against, under or with respect to such Purchased Assets and the related Purchased Asset Files and the Servicing Records or to enforce the Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the Agreement,

provided that Attorney agrees not to exercise its rights under this instrument unless a monetary Default, material non-monetary Default or an Event of Default has occurred and is continuing.

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 the 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, wilful misconduct or bad faith of any such Substitute Attorney appointed by it.

THE SELLER DECLARES THAT:

This Power of Attorney shall be irrevocable and is given as security for the interests of the Attorney under the Agreement and will survive and not be affected by the subsequent bankruptcy or insolvency or dissolution of Seller.

Words and expressions defined in the 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.

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a deed this     day of December, 2013.

[                            ]
By:
	Name:
	Title:

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EXHIBIT VI

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

THAT IS A SENIOR MORTGAGE LOAN

(OTHER THAN A PARTICIPATION INTEREST)

(a) As applicable, each Purchased Asset is either a whole loan and not a participation interest in a whole loan or an A-note interest or a senior ranking interest in a whole loan. The sale of the Purchased Assets to Buyer or its designee does not require Seller to obtain any governmental or regulatory approval or consent that has not been obtained. It being understood that B-notes secured by the same Mortgage as a Senior Mortgage Loan are not subordinate mortgages or junior liens, there are no subordinate mortgages or junior liens encumbering the related Underlying Mortgaged Property. Seller has no knowledge of any mezzanine debt related to the Underlying Mortgaged Property and secured directly by the ownership interests in the Mortgagor.

(b) No Purchased Asset is 30 days or more delinquent in payment of principal and interest (without giving effect to any applicable grace period) and no Purchased Asset has been 30 days or more (without giving effect to any applicable grace period in the related Mortgage Note or, with respect to Foreign Purchased Assets, the obligations set forth in the Foreign Finance Documents) past due.

(c) Except with respect to the ARD Loans, which provide that the rate at which interest accrues thereon increases after the Anticipated Repayment Date, the Purchased Assets (exclusive of any default interest, late charges or prepayment premiums) are fixed rate mortgage loans or floating rate mortgage loans with terms to maturity, at origination or as of the most recent modification, as set forth in the Purchased Asset Schedule.

(d) The information pertaining to each Purchased Asset set forth on the Purchased Asset Schedule is true and correct in all material respects as of the Purchase Date.

(e) At the time of the assignment of the Purchased Assets to Buyer, Seller had good and marketable title to and was the sole owner and holder of, each Purchased Asset, free and clear of any pledge, lien, encumbrance or security interest and such assignment validly and effectively transfers and conveys all legal and beneficial ownership of the Purchased Assets to Buyer free and clear of any pledge, lien, charge, encumbrance, participation or security interest, any other ownership interests and other interests on, in or to such Senior Mortgage Loan other than any servicing rights appointment, subservicing or similar agreement. Seller has full right and authority to sell, assign and transfer each Senior Mortgage Loan, and the assignment to Buyer constitutes a legal, valid and binding assignment of such Senior Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Senior Mortgage Loan subject to the rights and obligations of Seller pursuant to the Agreement.

(f) To the extent required under applicable law, Seller is authorized to transact and do business in the jurisdiction in which each Underlying Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Senior Mortgage Loan.

(g)(i) In respect of each U.S. Purchased Asset, (A) the related Mortgagor 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 and (B) the Mortgagor is not a debtor in any bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or similar proceeding and (ii) in respect of a Foreign Purchased Asset, (A) the related Mortgagor is an entity organized under the laws of England and Wales, Jersey, Guernsey, Luxembourg or another jurisdiction in which single purpose entities formed for the purposes of investment in mortgaged properties located in England and Wales are commonly organized.

(h) Each Purchased Asset is secured by (or in the case of a participation interest, the Underlying Mortgage Loan is secured by) a Mortgage that establishes and creates a valid and subsisting first priority lien on the Underlying Mortgaged Property, free and clear of any liens, claims, encumbrances, participation interests, pledges, charges or security interests subject only to Permitted Encumbrances. Such Mortgage, together with any separate security agreement, UCC financing statement, Required Filing or similar agreement, if any, establishes and creates a first priority security interest in favor of Seller, or the designated security trustee on behalf of Seller, in all personal property owned by the Mortgagor that is used in, and is reasonably necessary to, the operation of the Underlying Mortgaged Property and, to the extent a security interest may be created therein and perfected by the filing of a UCC financing statement under the Uniform Commercial Code as in effect in the relevant jurisdiction or a Required Filing, the proceeds arising from the Underlying Mortgaged Property and other collateral securing such Purchased Asset, subject only to Permitted Encumbrances. Each UCC financing statement, if any, filed with respect to personal property constituting a part of the Underlying Mortgaged Property and each UCC financing statement assignment, if any, filed with respect to such financing statement or each Required Filing was in suitable form for filing in the filing office in which such financing statement or Required Filing was filed. There exists with respect to such Underlying Mortgaged Property an assignment of leases and rents provision, either as part of the related Mortgage or as a separate document or instrument, which establishes and creates a first priority security interest in and to leases and rents arising in respect of the Underlying Mortgaged Property subject only to Permitted Encumbrances. No person other than the related Mortgagor and the mortgagee owns any interest in any payments due under the related leases. The related Mortgage or such assignment or other vesting of leases and rents provision provides for the appointment of a receiver for rents or allows the holder of the related Mortgage to enter into possession of the Underlying Mortgaged Property to collect rent or provides for rents to be paid directly to the holder of the related Mortgage in the event of a default beyond applicable notice and grace periods, if any, under the related Purchased Asset Documents. As of the origination date, there are no mechanics’ or other similar liens or claims that have been filed for work, labor or materials affecting the Underlying Mortgaged Property that are or may be prior or equal to the lien of the Mortgage, except those that are insured against pursuant to the applicable Title Policy (as defined below) with respect to a U.S. Purchased Asset or, with respect to a Foreign Purchased Asset, that have been disclosed by or on behalf of the applicable Seller to Buyer in writing prior to the Purchase Date. As of the Purchase Date, there are no mechanics’ or other similar liens or claims that have been filed for work, labor or materials affecting the Underlying Mortgaged Property that are or may be prior or equal in priority to the lien of the Mortgage,

except those that are insured against pursuant to the applicable Title Policy (as defined below) with respect to a U.S. Purchased Asset or, with respect to a Foreign Purchased Asset, that have been disclosed by or on behalf of the applicable Seller to Buyer in writing prior to the Purchase Date. No (a) Underlying Mortgaged Property secures any mortgage loan not represented on the Purchased Asset Schedule, (b) Purchased Asset is cross-defaulted with any other mortgage loan, other than a mortgage loan listed on the Purchased Asset Schedule, or (c) Purchased Asset is secured by property that is not an Underlying Mortgaged Property.

(i) The Purchased Asset Documents for each Senior Mortgage Loan that is secured by a hospitality property operated pursuant to a franchise agreement includes an executed comfort letter or similar agreement signed by the Mortgagor and franchisor of such property enforceable 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 or Required Filing has been filed in the appropriate filing office.

(j) The related Mortgagor under each Purchased Asset has good and indefeasible fee simple or, with respect to those Purchased Assets described in clause (ee) hereof, leasehold title to the Underlying Mortgaged Property comprising real estate or with respect to those Purchased Assets relating to Underlying Mortgaged Property located in England and Wales, which Underlying Mortgaged Property is (A) not registered, is good and marketable title to the fee simple absolute in possession or a term of years absolute in the relevant Underlying Mortgaged Property; or (B) registered, is registered, or is in the course of registration, with title absolute in the case of freehold property or absolute or good leasehold title in the case of leasehold property, in each case, subject to any Permitted Encumbrances.

(k) In respect of any U.S. Purchased Asset, Seller has received 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 (as defined below) and irrevocably obligating the Title Insurer to issue such title insurance policy, a title policy commitment or pro-forma “marked up” at the closing of the related Purchased Asset and countersigned by the Title Insurer or its authorized agent) as adopted in the applicable jurisdiction (the “Title Policy”), which was issued by a nationally recognized title insurance company (the “Title Insurer”) qualified to do business in the jurisdiction where the Underlying Mortgaged Property is located, covering the portion of each Underlying Mortgaged Property comprised of real estate and insuring that the related Mortgage is a valid first lien in the original principal amount of the related Purchased Asset on the Mortgagor’s fee simple interest (or, if applicable, leasehold interest) in such Underlying Mortgaged Property comprised of real estate subject only to Permitted Encumbrances. Such Title Policy was issued in connection with the origination of the related Purchased Asset. No claims have been made under such Title Policy. Such Title Policy is in full force and effect and all premiums thereon have been paid and will provide that the insured includes the owner of the Purchased Asset and its successors and/or assigns. No holder of the related Mortgage has done, by act or omission, anything that would, and Seller has no Knowledge of any other circumstance that would, impair the coverage under such Title Policy. Each Title Policy contains no exclusion for, or affirmatively insures (except for any Underlying Mortgaged Property located in a jurisdiction where such affirmative insurance is not available in which case such exclusion may exist), (i) that the Underlying

Mortgaged Property shown on the survey is the same as the property legally described in the Mortgage, and (i) to the extent that the Underlying Mortgaged Property consists of two or more adjoining parcels, such parcels are contiguous.

(l)(i) In respect of any U.S. Purchased Asset, the related Assignment of Mortgage and the related assignment of the assignment of leases executed in connection with each Mortgage, if any, have been recorded in the applicable jurisdiction (or, if not recorded, have been submitted for recording or are in recordable form) and constitute the legal, valid and binding assignment of such Mortgage and the related assignment of leases and rents from Seller to Buyer. The endorsement of the related Mortgage Note by Seller constitutes the legal, valid, binding and enforceable (except as such enforcement may be limited by anti-deficiency laws or bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)) assignment of such Mortgage Note, and together with such Assignment of Mortgage and the related assignment of assignment of leases and rents, legally and validly conveys all right, title and interest in such Purchased Asset and (except in the case of an A-note or a participation interest) the Purchased Asset Documents to Buyer, and (ii) in respect of any Foreign Purchased Asset, the related Foreign Assignment Agreements executed in connection with such Foreign Purchased Asset, if any, have (where required) been recorded in the applicable jurisdiction (or, if not recorded, have been submitted for recording or are in recordable form) and constitute the legal, valid and binding assignment of the relevant debt claim and the associated rights under the Foreign Mortgage Loan Security Agreements from the applicable Seller to Buyer and such agreements legally and validly convey all right, title and interest in such Foreign Purchased Asset and (except in the case of an A-note or a participation interest) the Purchased Asset Documents to Buyer.

(m) The Purchased Asset Documents for each U.S. Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan) provide that such Purchased Asset (or Underlying Mortgage Loan) is non-recourse except that the related Mortgagor and guarantor that has assets other than equity in the Underlying Mortgaged Property that are not de minimis and at least one individual or entity shall be fully liable for actual losses, liabilities, costs and damages arising from at least the following acts of the related Mortgagor and/or its principals: (i) if any petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by, consented to, or acquiesced in by, the Mortgagor; (ii) Mortgagor or guarantor shall have colluded with other creditors to cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii) transfers of either the Underlying Mortgaged Property or equity interests in Mortgagor made in violation of the Purchased Asset Documents; and (b) contains provisions providing for recourse against the Mortgagor and guarantor (which is a natural person or persons, or an entity distinct from the Mortgagor (but may be affiliated with the Mortgagor) that has assets other than equity in the Underlying Mortgaged Property that are not de minimis), for losses and damages sustained in the case of (i) (A) misapplication, misappropriation or conversion of rents, insurance proceeds or condemnation awards, or (B) any security deposits not 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 the Purchased Asset Documents); (ii) the Mortgagor’s fraud or intentional misrepresentation; (iii) willful misconduct by the Mortgagor or guarantor; (iv) breaches of the

environmental covenants in the Purchased Asset Documents; or (v) commission of material physical waste at the Underlying Mortgaged Property, which may, with respect to this clause (v), in certain instances, be limited to acts or omissions of the related Mortgagor, guarantor, property manager or their affiliates, employees or agents.

(n) The Purchased Asset Documents for each Purchased Asset contain enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the practical realization against the Underlying Mortgaged Property of the principal benefits of the security intended to be provided thereby (or, in the case of a Foreign Purchased Asset, either directly by Buyer or indirectly via a Security Agent), including realization by judicial or, if applicable, non-judicial foreclosure, and there is no exemption available to the related Mortgagor that would interfere with such right of foreclosure except (i) any statutory right of redemption or (ii) any limitation arising under anti-deficiency laws or by bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(o) Each of the related Mortgage Notes (with respect to U.S. Purchased Assets) or the obligations set forth in the Foreign Finance Documents (with respect to Foreign Purchased Assets) and Mortgages are the legal, valid and binding obligations of the related Mortgagor named on the Purchased Asset Schedule and each of the other related Purchased Asset Documents is the legal, valid and binding obligation of the parties thereto (subject to any non-recourse provisions therein), enforceable in accordance with its terms, except as such enforcement may be limited by anti-deficiency laws or bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law), and except that certain provisions of such Purchased Asset Documents are or may be unenforceable in whole or in part under applicable state or federal laws, but the inclusion of such provisions does not render any of the Purchased Asset Documents invalid as a whole, and such Purchased Asset Documents taken as a whole are enforceable to the extent necessary and customary for the practical realization of the principal rights and benefits afforded thereby.

(p) The terms of the Purchased Assets or the related Purchased Asset Documents, (including, in the case of a participation, the documents evidencing the Underlying Mortgage Loan) have not been altered, impaired, modified or waived in any material respect, except prior to the Purchase Date by written instrument duly submitted for recordation, to the extent required, and as specifically set forth by a document in the related Purchased Asset File.

(q) With respect to each Mortgage that is a deed of trust, 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, and no fees or expenses are or will become payable to the trustee under the deed of trust, except as disclosed to Buyer in a Requested Exceptions Report or in connection with a trustee’s sale after default by the Mortgagor other than de minimis fees paid in connection with the full or partial release of the Underlying Mortgaged Property or related security for such Purchased Asset following payment

of such Purchased Asset in full. The material terms of such Mortgage and related Purchased Asset Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect.

(r) No Purchased Asset has been satisfied, canceled, subordinated, released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

(s) Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, including, without limitation, any valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Senior Mortgage Loan, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto. None of the Purchased Asset Documents provides for a release of a portion of the Underlying Mortgaged Property from the lien of the Mortgage except upon payment or defeasance in full of all obligations under the Mortgage, provided that, notwithstanding the foregoing, certain of the Purchased Assets may allow partial release (a) upon payment or defeasance of an allocated loan amount which may be formula based, but in no event less than 125% of the allocated loan amount, or (b) in the event the portion of the Underlying Mortgaged Property being released was not given any material value in connection with the underwriting or appraisal of the related Purchased Asset.

(t) As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or, by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach under the related Purchased Asset Documents. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. With respect to a U.S. Purchased Asset, Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

(u) The principal amount of the Purchased Asset stated on the Purchased Asset Schedule has been fully disbursed as of the Purchase Date (except for certain amounts that were fully disbursed by the mortgagee, but escrowed pursuant to the terms of the related Purchased Asset Documents) and there are no future advances required to be made by the mortgagee under

any of the related Purchased Asset Documents. Any requirements under the related Purchased Asset Documents regarding the completion of any on-site or off-site improvements and to disbursements of any escrow funds therefor have been or are being complied with or such escrow funds are still being held. The value of the Underlying Mortgaged Property relative to the value reflected in the most recent appraisal thereof is not materially impaired by any improvements that have not been completed. Seller has not, nor, have any of its agents or predecessors in interest with respect to the Purchased Assets, in respect of such Purchased Asset, directly or indirectly, advanced funds or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor other than (a) interest accruing on such Purchased Asset from the date of such disbursement of such Purchased Asset to the date which preceded by thirty (30) days the first payment date under the related Mortgage Note or applicable Foreign Finance Document and (b) application and commitment fees, escrow funds, points and reimbursements for fees and expenses, incurred in connection with the origination and funding of the Purchased Asset.

(v) No Purchased Asset has capitalized interest included in its principal balance, or provides for any shared appreciation rights or other equity participation therein and no contingent or additional interest contingent on cash flow or, except for ARD Loans, negative amortization accrues or is due thereon.

(w) Each U.S. Purchased Asset identified in the Purchased Asset Schedule as an ARD Loan substantially fully amortizes over its stated term, which term is at least 60 months after the related Anticipated Repayment Date. Each ARD Loan has an Anticipated Repayment Date not less than seven years following the origination of such Purchased Asset. If the related Mortgagor elects not to prepay its ARD Loan in full on or prior to the Anticipated Repayment Date pursuant to the existing terms of the U.S. Purchased Asset or a unilateral option (as defined in Treasury Regulations under Article 1001 of the Code) in the U.S. Purchased Asset exercisable during the term of the mortgage loan, (i) the U.S. Purchased Asset’s interest rate will step up to an interest rate per annum as specified in the related Purchased Asset Documents; provided, however, that payment of such Excess Interest shall be deferred until the principal of such ARD Loan has been paid in full; (ii) all or a substantial portion of the Excess Cash Flow collected after the Anticipated Repayment Date shall be applied towards the prepayment of such ARD Loan and once the principal balance of an ARD Loan has been reduced to zero all Excess Cash Flow will be applied to the payment of accrued Excess Interest; and (iii) if the property manager for the Underlying Mortgaged Property can be removed by or at the direction of the mortgagee on the basis of a debt service coverage test, the subject debt service coverage ratio shall be calculated without taking account of any increase in the related Mortgage Interest Rate on such Purchased Asset’s Anticipated Repayment Date. No ARD Loan provides that the property manager for the Underlying Mortgaged Property can be removed by or at the direction of the mortgagee solely because of the passage of the related Anticipated Repayment Date.

(x) Each U.S. Purchased Asset identified in the Purchased Asset Schedule as an ARD Loan with a hard lockbox requires that tenants at the Underlying Mortgaged Property shall (and each U.S. Purchased Asset identified in the Purchased Asset Schedule as an ARD Loan with a springing lockbox requires that tenants at the Underlying Mortgaged Property shall, upon the occurrence of a specified trigger event, including, but not limited to, the occurrence of the related Anticipated Repayment Date) make rent payments into a lockbox controlled by the holder of the

U.S. Purchased Asset and to which the holder of the U.S. Purchased Asset has a first perfected security interest; provided however, with respect to each ARD Loan that is secured by a multi-family property with a hard lockbox, or with respect to each ARD Loan that is secured by a multi-family property with a springing lockbox, upon the occurrence of a specified trigger event, including, but not limited to, the occurrence of the related Anticipated Repayment Date, tenants either pay rents to a lockbox controlled by the holder of the mortgage loan or deposit rents with the property manager who will then deposit the rents into a lockbox controlled by the holder of the U.S. Purchased Asset.

(y) The servicing and collection practices used by Seller in respect of each Senior Mortgage Loan and the terms of the Purchased Asset Documents evidencing such Purchased Asset comply in all material respects with all applicable laws including local, state and federal laws, and regulations and Seller has complied with all material requirements pertaining to the origination, funding and servicing of the Purchased Assets, including but not limited to, usury and any and all other material requirements of any laws including federal, state or local law to the extent non-compliance would have a Material Adverse Effect on the Purchased Asset and was in all material respects legal, proper and prudent, in accordance with Seller’s customary commercial mortgage servicing practices.

(z) The Underlying Mortgaged Property is, in all material respects, in compliance with, and is used and occupied in accordance with, all restrictive covenants of record applicable to such Underlying Mortgaged Property and applicable zoning laws and all material inspections, licenses, permits and certificates of occupancy required by law, ordinance or regulation to be made or issued with regard to the Underlying Mortgaged Property governing the occupancy, use, and operation of such Underlying Mortgaged Property have been obtained and are in full force and effect, except to the extent (a) any material non-compliance with applicable zoning laws is insured by an ALTA lender’s title insurance policy (or binding commitment therefor), or the equivalent as adopted in the applicable jurisdiction, or a law and ordinance insurance policy that provides coverage for additional costs to rebuild and/or repair the property to current zoning regulations or, with respect to a Foreign Purchased Asset, has been fully described in the related Property Report, (b) the inability to restore the Underlying Mortgaged Property to the full extent of the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of such Underlying Mortgaged Property, or title insurance coverage has been obtained for such nonconformity, the failure to obtain or maintain such inspections, licenses, permits or certificates of occupancy does not materially impair or materially and adversely affect the use and/or operation of the Underlying Mortgaged Property as it was used and operated as of the date of origination of the Purchased Asset or the rights of a holder of the related Purchased Asset, or (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 Underlying Mortgaged Property or are insured by applicable provisions of the Title Policy.

(aa) All (a) taxes, water charges, sewer rents, assessments or other similar outstanding governmental charges and governmental assessments that became due and owing prior to the Purchase Date in respect of the Underlying Mortgaged Property (excluding any related personal property), and that if left unpaid, would be, or might become, a lien on such Underlying Mortgaged Property having priority over the related Mortgage and (b) insurance premiums or

ground rents that became due and owing prior to the Purchase Date in respect of the Underlying Mortgaged Property (excluding any related personal property), have been paid, or if any such items are disputed, an escrow of funds in an amount sufficient (together with escrow payments required to be made prior to delinquency) to cover such taxes and assessments and any late charges due in connection therewith has been established. As of the date of origination, the Underlying Mortgaged Property consisted of one or more separate and complete tax parcels. For purposes of this representation and warranty, the items identified herein shall not be considered due and owing until the date on which interest or penalties would be first payable thereon.

(bb) None of the improvements that were included for the purpose of determining the appraised value of the Underlying Mortgaged Property at the time of the origination of such Purchased Asset lies outside the boundaries and building restriction lines of such Underlying Mortgaged Property, except to the extent that they are legally nonconforming as contemplated by the representation in clause (48) below, and no improvements on adjoining properties encroach upon such Underlying Mortgaged Property, with the exception in each case of (a) immaterial encroachments that do not materially adversely affect the security intended to be provided by the related Mortgage or the use, enjoyment, value or marketability of such Underlying Mortgaged Property or (b) encroachments affirmatively covered by the related Title Policy. With respect to each Purchased Asset, the property legally described in the survey, if any, obtained for the Underlying Mortgaged Property for purposes of the origination thereof is the same as the property legally described in the Mortgage. Seller has no knowledge of any material issues with the physical condition of the Underlying Mortgaged Property that Seller believes would have a material adverse effect on the use, operation or value of the Underlying Mortgaged Property other than those disclosed in the engineering or condition survey report and those addressed in sub-clauses (a) and (b) of the preceding sentence.

(cc) As of the date of the applicable engineering or condition survey report (which was performed within 12 months prior to the Purchase Date) related to the Underlying Mortgaged Property and, as of the Purchase Date, the Underlying Mortgaged Property is either (i) in good repair, free and clear of any damage that would materially adversely affect the value of such Underlying Mortgaged Property as security for such Purchased Asset or the use and operation of the Underlying Mortgaged Property as it was being used or operated as of the origination date or (ii) escrows in an amount consistent with the standard utilized by Seller with respect to similar loans it holds for its own account have been established, which escrows will in all events be not less than 100% of the estimated cost of the required repairs. The Underlying Mortgaged Property has not been damaged by fire, wind or other casualty or physical condition (including, without limitation, any soil erosion or subsidence or geological condition), which damage has not either been fully repaired or fully insured, or for which escrows in an amount consistent with the standard utilized by Seller with respect to loans it holds for its own account have not been established.

(dd) There are no proceedings pending or threatened, for the partial or total condemnation of the Underlying Mortgaged Property.

(ee) The Purchased Assets that are identified as being secured in whole or in part by a leasehold estate (a “Ground Lease”) (except with respect to any Purchased Asset also secured by the related fee interest in the Underlying Mortgaged Property), satisfy the following conditions:

I. such Ground Lease or a memorandum thereof has been or will be duly recorded or registered or submitted for recordation or registration in a form that is acceptable for recording or registration in the applicable jurisdiction; such Ground Lease, or other agreement received by the originator of the Purchased Asset from the ground lessor, provides that the interest of the lessee thereunder may be encumbered by the related Mortgage and does not restrict the use of the Underlying Mortgaged Property by such lessee, its successors or assigns, in a manner that would adversely affect the security provided by the Mortgage; as of the date of origination of the Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan), there was no material change of record in the terms of such Ground Lease with the exception of written instruments that are part of the related Purchased Asset File and there has been no material change in the terms of such Ground Lease since the recordation or registration of the related Purchased Asset, with the exception of written instruments that are part of the related Purchased Asset File;

II. such Ground Lease is not subject to any liens or encumbrances superior to, or of equal priority with, the related Mortgage, other than the related fee interest and Permitted Encumbrances and such Ground Lease is, and shall remain, prior to any mortgage or other lien upon the related fee interest unless a nondisturbance agreement is obtained from the holder of any mortgage on the fee interest that is assignable to or for the benefit of the related lessee and the related mortgagee;

III. such Ground Lease provides that upon foreclosure of the related Mortgage or assignment of the Mortgagor’s interest in such Ground Lease in lieu thereof, the mortgagee under such Mortgage is entitled to become the owner of such interest upon notice to, but without the consent of, the lessor thereunder and, in the event that such mortgagee becomes the owner of such interest, such interest is further assignable by such mortgagee and its successors and assigns upon notice to such lessor, but without a need to obtain the consent of such lessor;

IV. such Ground Lease is in full force and effect and no default of tenant or ground lessor was in existence at origination, or is currently in existence under such Ground Lease, nor at origination was, or is there any condition that, but for the passage of time or the giving of notice, would result in a default under the terms of such Ground Lease; either such Ground Lease or a separate agreement contains the ground lessor’s covenant that it shall not amend, modify, cancel or terminate such Ground Lease without the prior written consent of the mortgagee under such Mortgage and any amendment, modification, cancellation or termination of the Ground Lease without the prior written consent of the related mortgagee, or its successors or assigns is not binding on such mortgagee, or its successor or assigns;

V. such Ground Lease or other agreement requires that the lessor thereunder will supply an estoppel and give written notice of any material default by the lessee to the mortgagee under the related Mortgage, provided that such mortgagee has provided the lessor with notice of its lien in accordance with the provisions of such Ground Lease; and such Ground Lease or other agreement provides that no such notice of default and no termination of the Ground Lease in connection with such notice of default shall be effective against such mortgagee unless such notice of default has been given to such mortgagee and any related Ground Lease contains the ground lessor’s covenant that it will give to the related mortgagee, or its successors or assigns, any notices it sends to the Mortgagor;

VI. either (i) the related ground lessor has subordinated its interest in the Underlying Mortgaged Property to the interest of the holder of the Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan) or (ii) such Ground Lease or other agreement provides that (A) the mortgagee under the related Mortgage is permitted a reasonable opportunity to cure any default under such Ground Lease that is curable, including reasonable time to gain possession of the interest of the lessee under the Ground Lease, after the receipt of notice of any such default before the lessor thereunder may terminate such Ground Lease; (B) in the case of any such default that is not curable by such mortgagee, or in the event of the bankruptcy or insolvency of the lessee under such Ground Lease, such mortgagee has the right, following termination of the existing Ground Lease or rejection thereof by a bankruptcy trustee or similar party, to enter into a new ground lease with the lessor on substantially the same terms as the existing Ground Lease; and (C) all rights of the Mortgagor under such Ground Lease may be exercised by or on behalf of such mortgagee under the related Mortgage upon foreclosure or assignment in lieu of foreclosure or in the case of any Underlying Mortgaged Property located in England and Wales, the mortgagee has a right to claim relief from forfeiture of the lease if the lessor takes steps to forfeit the Ground Lease;

VII. such Ground Lease has an original term (or an original term plus one or more optional renewal terms that under all circumstances may be exercised, and will be enforceable, by the mortgagee or its assignee) that extends not less than 20 years beyond the stated maturity date of the related Purchased Asset (or in the case of a participation interest, of the Underlying Mortgage Loan);

VIII. under the terms of such Ground Lease 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 in respect of a total or substantially total loss or taking or the portion of the condemnation award allocable to the ground lessee’s interest (other than in respect of a total or substantially total loss or taking as addressed in subpart (IX))) will be applied either to the repair or restoration of all or part of the Underlying Mortgaged Property, with the mortgagee under such Mortgage or a financially responsible institution acting as trustee appointed by it, or consented to by it, or by the lessor having the right to hold and disburse such proceeds as the repair or restoration progresses (except in such cases where a provision entitling another party to hold and disburse such proceeds would not be viewed as commercially unreasonable by a prudent institutional lender), or to the payment in whole or in part of the outstanding principal balance of such Purchased Asset together with any accrued and unpaid interest thereon;

IX. in the case of a total or substantial 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 Underlying Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Senior Mortgage Loan, together with any accrued interest;

X. Seller has not received any written notice of default under or notice of termination of, or in the case of an Underlying Mortgaged Property located in England and Wales, a forfeiture notice in respect of such ground lease. To Seller’s Knowledge, there is no 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 that, in the case of an Underlying Mortgaged Property located in England and Wales, may reasonably be expected to lead to forfeiture of the ground lease and such ground lease is in full force and effect; and

XI. such Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by Seller; such Ground Lease contains a covenant (or applicable laws provide) that the lessor thereunder is not permitted, in the absence of an uncured default, to disturb the possession, interest or quiet enjoyment of, or in the case of an Underlying Mortgaged Property located in England and Wales, quiet enjoyment of, any lessee in the relevant portion of such Underlying Mortgaged Property subject to such Ground Lease for any reason, or in any manner, which would materially adversely affect the security provided by the related Mortgage.

(ff) An Environmental Site Assessment (an “ESA”) meeting ASTM requirements (or the United Kingdom equivalent) conducted by a reputable environmental consultant relating to each Underlying Mortgaged Property and prepared no earlier than 12 months prior to the Purchase Date was obtained and reviewed by Seller in connection with the origination of such Purchased Asset and a copy is included in the Purchased Asset File.

(gg) There are no adverse circumstances or conditions with respect to or affecting the Underlying Mortgaged Property that would constitute or result in a material violation of any applicable federal, state or local environmental laws, rules and regulations (collectively, “Environmental Laws”) and such ESA (i) did not reveal any known circumstance or condition that rendered the Underlying Mortgaged Property at the date of the ESA in material noncompliance with applicable Environmental Laws or the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, or the United Kingdom equivalent, hereinafter “Environmental Condition”) or the need for further investigation, or (ii) if any material noncompliance with Environmental Laws or the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, other than with respect to an Underlying Mortgaged Property (A) for which environmental insurance is maintained, or (B) that would require (x) any expenditure less than or equal to 5% of the outstanding principal balance of the mortgage loan to achieve or maintain compliance in all material respects with any Environmental Laws or (y) any expenditure greater than 5% of the outstanding principal balance of such Purchased Asset to achieve or maintain compliance in all material respects with any Environmental Laws for which, in connection with this clause (y), adequate sums, but in no event less than 125% of the estimated cost as set forth in the Environmental Site Assessment, were reserved in connection with the origination of the Purchased Asset and for which the related Mortgagor has covenanted to perform, or (iii) as to which the related Mortgagor or one of its affiliates is currently taking or required to take such actions, if any, with respect to such conditions or circumstances as have been recommended by the Environmental Site Assessment or required by the applicable Governmental Authority, or (iv) as to which another responsible party not related to the Mortgagor with assets reasonably estimated by Seller at the time of origination to be sufficient to effect all necessary or required remediation identified in a notice or other action from the applicable Governmental Authority is currently taking or required to take such actions, if any, with respect to such regulatory authority’s order or directive, or (v) as to which the conditions or circumstances identified in the Environmental Site Assessment were investigated further and based upon such additional investigation, an environmental consultant recommended no further investigation or remediation, or (vi) as to which a party with financial resources reasonably estimated to be adequate to cure

the condition or circumstance that would give rise to such material violation provided a guarantee or indemnity to the related Mortgagor or to the mortgagee to cover the costs of any required investigation, testing, monitoring or remediation, or (vii) as to which the related Mortgagor or other responsible party obtained a “No Further Action” letter or other evidence reasonably acceptable to a prudent commercial mortgage lender that applicable federal, state, or local Governmental Authorities had no current intention of taking any action, and are not requiring any action, in respect of such condition or circumstance, or (viii) that would not require substantial cleanup, remedial action or other extraordinary response under any Environmental Laws reasonably estimated to cost in excess of 5% of the outstanding principal balance of such Purchased Asset;

(hh) Such Senior Mortgage Loan is the subject of an environmental insurance policy, issued by the issuer set forth on Schedule I (the “Policy Issuer”) and effective as of the date thereof (the “Environmental Insurance Policy”), (ii) the Environmental Insurance Policy is in full force and effect, there is no deductible and the trustee is a named insured under such policy, (iii)(a) a property condition or engineering report was prepared, if the Underlying Mortgaged Property was constructed prior to 1985, with respect to asbestos-containing materials (“ACM”) and, if the Underlying Mortgaged Property is a multifamily property, with respect to radon gas (“RG”) and lead-based paint (“LBP”), and (b) if such report disclosed the existence of a material and adverse LBP, ACM or RG environmental condition or circumstance affecting the Underlying Mortgaged Property, the related Mortgagor (A) was required to remediate the identified condition prior to closing the Senior Mortgage Loan or provide additional security or establish with the mortgagee a reserve in an amount deemed to be sufficient by the Mortgage Loan Seller, for the remediation of the problem, and/or (B) agreed in the Purchased Asset Documents to establish an operations and maintenance plan after the closing of the Senior Mortgage Loan that should reasonably be expected to mitigate the environmental risk related to the identified LBP, ACM or RG condition, (iv) on the effective date of the Environmental Insurance Policy, the Mortgage Loan Seller as originator had no knowledge of any material and adverse environmental condition or circumstance affecting the Underlying Mortgaged Property (other than the existence of LBP, ACM or RG) that was not disclosed to the Policy Issuer in one or more of the following: (a) the application for insurance, (b) a Mortgagor questionnaire that was provided to the Policy Issuer, or (c) an engineering or other report provided to the Policy Issuer, and (v) the premium of any Environmental Insurance Policy has been paid through the maturity of the policy’s term and the term of such policy extends at least five years beyond the maturity of the Senior Mortgage Loan.

(ii) Except for any hazardous materials being handled in accordance with applicable Environmental Laws, (A) there exists either (i) environmental insurance with respect to such Underlying Mortgaged Property or (ii) an amount in an escrow account pledged as security for such Purchased Asset under the relevant Purchased Asset Documents equal to no less than 125% of the amount estimated in such Environmental Site Assessment as sufficient to pay the cost of such remediation or other action in accordance with such Environmental Site Assessment or (B) one of the statements set forth in clause (A)(ii) above is true, (i) such Underlying Mortgaged Property is not being used for the treatment or disposal of hazardous materials; (ii) no hazardous materials are being used or stored or generated for off-site disposal or otherwise present at such Underlying Mortgaged Property other than hazardous materials of such types and in such quantities as are customarily used or stored or generated for off-site disposal or otherwise present

in or at properties of the relevant property type; and (iii) such Underlying Mortgaged Property is not subject to any environmental hazard (including, without limitation, any situation involving hazardous materials) that under the Environmental Laws would have to be eliminated before the sale of, or that could otherwise reasonably be expected to adversely affect in more than a de minimis manner the value or marketability of, such Underlying Mortgaged Property.

(jj) The related Mortgage or other Purchased Asset Documents contain covenants on the part of the related Mortgagor requiring its compliance with any present or future federal, state and local Environmental Laws and regulations in connection with the Underlying Mortgaged Property. The related Mortgagor (or an affiliate thereof) has agreed to indemnify, defend and hold Seller, and its successors and assigns (or in the case of a participation interest, the lender of record), harmless from and against any and all losses, liabilities, damages, penalties, fines, expenses and claims of whatever kind or nature (including attorneys’ fees and costs) imposed upon or incurred by or asserted against any such party resulting from a breach of the environmental representations, warranties or covenants given by the related Mortgagor in connection with such Purchased Asset.

(kk) For each of the Purchased Assets that is covered by environmental insurance, each environmental insurance policy is in an amount equal to 125% of the outstanding principal balance of the related Purchased Asset and has a term ending no sooner than the date that is five years after the maturity date (or, in the case of an ARD Loan, the final maturity date) of the related Purchased Asset. All environmental assessments or updates that were in the possession of Seller and that relate to an Underlying Mortgaged Property as being insured by an environmental insurance policy have been delivered to or disclosed to the environmental insurance carrier issuing such policy prior to the issuance of such policy.

(ll) As of the date of origination of the related Purchased Asset, and, as of the Purchase Date, the Underlying Mortgaged Property is covered by insurance policies providing the coverage described below and the Purchased Asset Documents permit the mortgagee to require the coverage described below. All premiums with respect to the insurance policies insuring each Underlying Mortgaged Property have been paid in a timely manner or escrowed to the extent required by the Purchased Asset Documents, and Seller has not received any notice of cancellation or termination. The relevant Purchased Asset File contains the insurance policy required for such Purchased Asset or a certificate of insurance for such insurance policy. Each Mortgage requires that the Underlying Mortgaged Property and all improvements thereon be covered by insurance policies providing (a) coverage in the amount of the lesser of full replacement cost of such Underlying Mortgaged Property and the outstanding principal balance of the related Purchased Asset (subject to customary deductibles) for fire and extended perils included within the classification “All Risk of Physical Loss” in an amount sufficient to prevent the Mortgagor from being deemed a co-insurer and to provide coverage on a full replacement cost basis of such Underlying Mortgaged Property (in some cases exclusive of foundations and footings) with an agreed amount endorsement to avoid application of any coinsurance provision; such policies contain a standard mortgagee clause naming mortgagee and its successor in interest as additional insureds or loss payee, as applicable; (b) business interruption or rental loss insurance in an amount at least equal to (i) 12 months of operations or (ii) in some cases all rents and other amounts customarily insured under this type of insurance of the Underlying Mortgaged Property; (c) flood insurance (if any portion of the improvements on the Underlying Mortgaged

Property is located in an area identified by the Federal Emergency Management Agency (“FEMA”) or other applicable body with respect to a Foreign Purchased Asset, with respect to certain Purchased Assets and the Secretary of Housing and Urban Development (or its equivalent, with respect to a Foreign Purchased Asset) with respect to other mortgage loans, as having special flood hazards) in an amount not less than amounts prescribed by FEMA; (d) workers’ compensation, if required by law; (e) comprehensive general liability insurance in an amount equal to not less than $1,000,000 (or its equivalent in the Applicable Currency); all such insurance policies contain clauses providing they are not terminable and may not be terminated without thirty (30) days prior written notice to the mortgagee (except where applicable law requires a shorter period or except for nonpayment of premiums, in which case not less than ten (10) days prior written notice to the mortgagee is required). In addition, each Mortgage permits the related mortgagee to make premium payments to prevent the cancellation thereof and shall entitle such mortgagee to reimbursement therefor. Any insurance proceeds in respect of a casualty, loss or taking will be applied either to the repair or restoration of all or part of the Underlying Mortgaged Property or the payment of the outstanding principal balance of the related Purchased Asset together with any accrued interest thereon. The Underlying Mortgaged Property is insured by an insurance policy, issued by an insurer meeting the requirements of such Purchased Asset (or in the case of a participation interest, of the Underlying Mortgage Loan) and having a claims-paying or financial strength rating of at least A:X from A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or Moody’s. With respect to each U.S. Purchased Asset, 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 the probable maximum loss (“PML”) for the Underlying Mortgaged Property in the event of an earthquake. In such instance, the PML was based on a return period of not less than 100 years, an exposure period of 50 years and a 10% probability of exceedence. If the resulting report concluded that the PML would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Underlying Mortgaged Property was obtained by an insurer rated at least A:X by A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or Moody’s. The insurer issuing each of the foregoing insurance policies is qualified to write insurance in the jurisdiction where the Underlying Mortgaged Property is located.

(mm) All amounts required to be deposited by each Mortgagor at origination under the related Purchased Asset Documents have been deposited at origination and there are no deficiencies with regard thereto.

(nn) Whether or not a Purchased Asset was originated by Seller, with respect to each Purchased Asset originated by Seller and each Purchased Asset originated by any Person other than Seller, as of the date of origination of the related Purchased Asset, and, with respect to each Purchased Asset originated by Seller and any subsequent holder of the Purchased Asset, as of the Purchase Date, there are no actions, suits, arbitrations or governmental investigations or proceedings by or before any court or other Governmental Authority or agency now pending against or affecting the Mortgagor or guarantor under any Purchased Asset or any of the Mortgaged Properties that, if determined against such Mortgagor or such Underlying Mortgaged Property, would materially and adversely affect the value of such Underlying Mortgaged Property, the security intended to be provided with respect to the related Purchased Asset, the ability of such Mortgagor and/or the current use or operation of such Underlying Mortgaged

Property to generate net cash flow to pay principal, interest and other amounts due under the related Purchased Asset, title to the Underlying Mortgaged Property, the validity or enforceability of the Mortgage, such guarantor’s ability to perform under the related guaranty, ; and there are no such actions, suits or proceedings threatened against such Mortgagor.

(oo) Each Purchased Asset complied at origination, in all material respects, with all of the terms, conditions and requirements of Seller’s underwriting standards applicable to such Purchased Asset and since origination, the Purchased Asset has been serviced in all material respects in a legal manner in conformance with Seller’s servicing standards.

(pp) The originator of the Purchased Asset or Seller has inspected or caused to be inspected each Underlying Mortgaged Property within the 12 months prior to the Purchase Date.

(qq) The Purchased Asset Documents require the Mortgagor to provide the holder of the Purchased Asset with quarterly and annual operating statements, financial statements and quarterly (other than for single-tenant properties) 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 (i) with respect to each Senior Mortgage Loan with more than one Mortgagor are in the form of an annual combined balance sheet of the Mortgagor 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 and (ii) for each Senior Mortgage Loan with an original principal balance greater than $50,000,000 (or its equivalent in the Applicable Currency) shall be audited by an independent certified public accountant upon the request of the owner or holder of the Mortgage.

(rr) All escrow deposits and payments required by the terms of each Purchased Asset are in the possession, or under the control of Seller (or in the case of a participation interest, the servicer of the related mortgage loan), and all amounts required to be deposited by the applicable Mortgagor under the related Purchased Asset Documents have been deposited, and there are no deficiencies with regard thereto (subject to any applicable notice and cure period). All of Seller’s interest in such escrows and deposits will be conveyed by Seller to Buyer hereunder.

(ss) Each Mortgagor with respect to a Purchased Asset is an entity whose organizational documents or related Purchased Asset Documents provide that it is, and at least so long as the Purchased Asset is outstanding will continue to be, a Single Purpose Entity. Both the Purchased Asset Documents and the organizational documents of the Mortgagor with respect to each Senior Mortgage Loan with a principal balance as of the Purchase Date in excess of $5,000,000 (or its equivalent in the Applicable Currency) provide that the Mortgagor is a Single Purpose Entity, and each Senior Mortgage Loan that is a U.S. Purchased Asset with a principal balance as of the Purchase Date of $20,000,000 or more has a counsel’s opinion regarding non-consolidation of the Mortgagor. For this purpose, “Single Purpose Entity” shall mean a Person, other than an individual, whose organizational documents provide that it shall engage solely in the business of owning and operating the Underlying Mortgaged Property and that does not engage in any business unrelated to such property and the financing thereof, does not have any assets other than those related to its interest in the Underlying Mortgaged Property or the financing thereof or any indebtedness other than as permitted by the related Mortgage or other

Purchased Asset Documents, and the organizational documents of which require that it have its own separate books and records and its own accounts, in each case that are separate and apart from the books and records and accounts of any other Person, except as permitted by the related Mortgage or other Purchased Asset Documents, and that it holds itself out as a legal entity, separate and apart from any other person or entity.

(tt) Each of the U.S. Purchased Assets contain a “due on sale” clause, which provides for the acceleration of the payment of the unpaid principal balance of the Purchased Asset (or in the case of a participation interest, of the related mortgage loan) if, without the prior written consent of the holder of the Purchased Asset (or in the case of an A-note or a participation interest, of the holder of title to the Underlying Mortgage Loan), the property subject to the Mortgage, or any controlling interest therein, is directly or indirectly transferred or sold (except that it may provide for transfers by devise, descent or operation of law upon the death of a member, manager, general partner or shareholder of a Mortgagor and that it may provide for assignments subject to the Purchased Asset holder’s approval of transferee, transfers to affiliates, transfers to family members for estate planning purposes, transfers among existing members, partners or shareholders in Mortgagors or transfers of passive interests so long as the key principals or general partner retains control). The Purchased Asset Documents for each U.S. Purchased Asset contain a “due on encumbrance” clause, which provides for the acceleration of the payment of the unpaid principal balance of the Purchased Asset if the property subject to the Mortgage or any controlling interest in the Mortgagor is further pledged or encumbered, unless the prior written consent of the holder of the Purchased Asset is obtained (except that it may provide for assignments subject to the Purchased Asset holder’s approval of transferee, transfers to affiliates or transfers of passive interests so long as the key principals or general partner retains control). The Mortgage requires the Mortgagor to pay, to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, such fees, along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance all reasonable fees and expenses associated with securing the consent or approval of the holder of the Mortgage for a waiver of a “due on sale” or “due on encumbrance” clause or a defeasance provision. As of the Purchase Date, Seller holds no preferred equity interest in any Mortgagor and Seller holds no mezzanine debt related to such Underlying Mortgaged Property.

(uu) Each U.S. Purchased Asset containing provisions for defeasance of mortgage collateral requires either (a) the prior written consent of, and compliance with the conditions set by, the holder of the Purchased Asset to any defeasance, or (b)(i) the replacement collateral consist of U.S. “government securities,” within the meaning of Treasury Regulations Article 1.860 G-2(a)(8)(i), in an amount sufficient to make all scheduled payments under the Mortgage Note when due (up to the maturity date for the related Purchased Asset, the Anticipated Repayment Date for ARD Loans or the date on which the Mortgagor may prepay the related Purchased Asset without payment of any prepayment penalty); (ii) the loan may be assumed by a Single Purpose Entity approved by the holder of the Purchased Asset; (iii) counsel provide an opinion that the trustee has a perfected security interest in such collateral prior to any other claim or interest; and (iv) such other documents and certifications as the mortgagee may reasonably require, which may include, without limitation, (A) a certification that the purpose of the defeasance is to facilitate the disposition of the mortgaged real property or any other customary commercial transaction and not to be part of an arrangement to collateralize a REMIC

offering with obligations that are not real estate mortgages and (B) a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note when due. Each Purchased Asset containing provisions for defeasance provides that, in addition to any cost associated with defeasance, the related Mortgagor shall pay, as of the date the mortgage collateral is defeased, all scheduled and accrued interest and principal due as well as an amount sufficient to defease in full the Purchased Asset. In addition, if the related Purchased Asset permits defeasance, then the Purchased Asset Documents provide that the related Mortgagor shall (x) pay all reasonable fees associated with the defeasance of the Purchased Asset and all other reasonable expenses associated with the defeasance, or (y) provide all opinions required under the related Purchased Asset Documents, including a REMIC opinion, and any applicable rating agency letters confirming that no downgrade or qualification shall occur as a result of the defeasance. If the Senior Mortgage Loan permits partial releases of real property in connection with partial defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to 115% of the allocated loan amount for the real property to be released and the defeasance collateral is not permitted to be subject to prepayment, call, or early redemption. If the Mortgagor would continue to own assets in addition to the defeasance collateral, the portion of the Senior Mortgage Loan secured by defeasance collateral is required to be assumed by a Single Purpose Entity and the Mortgagor is required to deliver an opinion of counsel that Buyer has a perfected security interest in such collateral prior to any other claim or interest.

(vv) In the event that a Purchased Asset is secured by more than one Underlying Mortgaged Property, then, in connection with a release of less than all of such Mortgaged Properties, an Underlying Mortgaged Property may not be released as collateral for the related Purchased Asset unless, in connection with such release, an amount equal to not less than 125% of the Allocated Loan Amount for such Underlying Mortgaged Property is prepaid or, in the case of a defeasance, an amount equal to 125% of the Allocated Loan Amount is defeased through the deposit of replacement collateral (as contemplated in clause (34) hereof) sufficient to make all scheduled payments with respect to such defeased amount, or such release is otherwise in accordance with the terms of the Purchased Asset Documents. With respect to any partial release, either: (x) such release of collateral (i) would not constitute a “significant modification” of the Senior Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b)(2) and (ii) would not cause the subject Senior 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 Mortgagor’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 Senior Mortgage Loan originated after December 6, 2010, if the fair market value of the real property constituting such Underlying Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Senior Mortgage Loan outstanding after the release, the Mortgagor is required to make a payment of principal in an amount not less than the amount required by the REMIC provisions of the Code.

In the case of any Senior Mortgage Loan originated after December 6, 2010, in the event of a taking of any portion of an Underlying Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Mortgagor

can be required to pay down the principal balance of the Senior Mortgage Loan in an amount not less than the amount required by the REMIC provisions of the Code and, to such extent, the award for any such taking may not be required to be applied to the restoration of the Underlying Mortgaged Property or released to the Mortgagor, if, immediately after the release of such portion of the Underlying 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 Underlying Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Senior Mortgage Loan.

In the case of any Senior Mortgage Loan originated after December 6, 2010, no such Senior Mortgage Loan that is secured by more than one Underlying Mortgaged Property or that is cross-collateralized with another Senior Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the loan-to-value ratio and other requirements of the REMIC provisions of the Code.

(ww) Each Underlying Mortgaged Property is owned in fee by the related Mortgagor, with the exception of (i) Mortgaged Properties that are secured in whole or in a part by a Ground Lease and (ii) out-parcels, and is used and occupied for commercial or multifamily residential purposes in accordance with applicable law. In respect of each Underlying Mortgaged Property located in England and Wales, which is (A) not registered, the Mortgagor has good and marketable title to the fee simple absolute in possession or a term of years absolute; or (B) registered, the Mortgagor has title absolute in the case of freehold property or absolute or good leasehold title in the case of leasehold property.

(xx) Any material non-conformity with applicable zoning laws constitutes a legal non-conforming use or structure that, in the event of casualty or destruction, may be restored or repaired to the full extent of the use or structure at the time of such casualty, or for which law and ordinance insurance coverage has been obtained in amounts consistent with the standards utilized by Seller.

(yy) Neither Seller nor any affiliate thereof has any obligation to make any capital contributions to the related Mortgagor under the Purchased Asset. The Purchased Asset was not originated for the sole purpose of financing the construction of incomplete improvements on the Underlying Mortgaged Property.

(zz) The following statements are true with respect to the Underlying Mortgaged Property: (a) the Underlying Mortgaged Property is located on or adjacent to a dedicated road or has access to an irrevocable easement permitting ingress and egress and (b) the Underlying Mortgaged Property is served by public or private utilities, water and sewer (or septic facilities) and otherwise appropriate for the use in which the Underlying Mortgaged Property is currently being utilized.

(aaa) None of the Purchased Asset Documents contain any provision that expressly excuses the related borrower from obtaining and maintaining insurance coverage for acts of terrorism and, in circumstances where terrorism insurance is not expressly required, the mortgagee is not prohibited from requesting that the related borrower maintain such insurance, in

each case, to the extent such insurance coverage is generally available for like properties in such jurisdictions at commercially reasonable rates. Each Underlying Mortgaged Property is insured by an “all-risk” casualty insurance policy and such policy did not, as of the date of origination of the Senior Mortgage Loan, and, to Seller’s Knowledge, do not contain an express exclusion for (or, alternatively, is covered by a separate policy that insures against property damage resulting from) acts of terrorism.

(bbb) An appraisal of the Underlying Mortgaged Property was conducted in connection with the origination of such Purchased Asset (or in the case of a participation interest, the date of origination of the Underlying Mortgage Loan), and such appraisal satisfied the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (or its United Kingdom equivalent), in either case as in effect on the date such Purchased Asset (or in the case of a participation interest, the Underlying Mortgage Loan) was originated. The appraisal date is within 6 months of the Senior Mortgage Loan origination date, and within 12 months of the Purchase Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute (“MAI”) or, in the case of an Underlying Mortgaged Property located in England and Wales, a Charter Surveyor and, to Seller’s Knowledge, had no interest, direct or indirect, in the Underlying Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Senior 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 or, in the case of an Underlying Mortgaged Property located in England and Wales, the Valuations Standards (Red Book) published by the Royal Institute of Chartered Surveyors.

(ccc) With respect to a U.S. Purchased Asset, Senior 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 Senior Mortgage Loan to the related Mortgagor at origination did not exceed the non-contingent principal amount of the Senior Mortgage Loan and (B) either: (a) such Senior 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 (i) at the date the Senior Mortgage Loan was originated at least equal to 80% of the adjusted issue price of the Senior Mortgage Loan on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the Senior Mortgage Loan on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Senior Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the Senior Mortgage Loan; or (b) substantially all of the proceeds of such Senior Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Senior 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 Senior Mortgage Loan was “significantly modified” prior to the Closing 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 Senior Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Senior Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the

proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Senior 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.

(ddd) Seller has obtained a rent roll other than with respect to hospitality properties certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Senior Mortgage Loan. Seller has obtained operating histories with respect to each Underlying Mortgaged Property certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Senior Mortgage Loan. The operating histories collectively report on operations for a period equal to (a) at least a continuous three-year period or (b) in the event the Underlying Mortgaged Property was owned, operated or constructed by the Mortgagor or an affiliate for less than three years then for such shorter period of time, it being understood that for Mortgaged Properties acquired with the proceeds of a Senior Mortgage Loan, operating histories may not have been available.

(eee) Seller has obtained an organizational chart or other description of each Mortgagor which identifies all beneficial controlling owners of the Mortgagor (i.e., managing members, general partners or similar controlling person for such Mortgagor) (the “Controlling Owner”) and all owners that hold a 20% or greater direct ownership share (i.e., the “Major Sponsors”). Seller (1) required questionnaires to be completed by each Controlling Owner and guarantor or performed other processes designed to elicit information from each Controlling Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior history for at least 10 years regarding any bankruptcies or other insolvencies, any felony convictions, and (2) performed or caused to be performed searches of the public records or services such as Lexis/Nexis, or a similar service designed to elicit information about each Controlling Owner, Major Sponsor and guarantor regarding such Controlling Owner’s, Major Sponsor’s or guarantor’s prior history for at least 10 years regarding any bankruptcies or other insolvencies, any felony convictions, and provided, however, that records searches were limited to the last 10 years. ((1) and (2) collectively, the “Sponsor Diligence”). Based solely on the Sponsor Diligence, to the Knowledge of Seller, no Major Sponsor or guarantor (i) was in a state of federal bankruptcy or insolvency proceeding, (ii) had a prior record of having been in a state of federal bankruptcy or insolvency, or (iii) had been convicted of a felony.

(fff) With respect to each Senior Mortgage Loan that is a U.S. Purchased Asset that is predominantly secured by a retail, office or industrial property leased to a single tenant, the Mortgage Loan Seller reviewed such estoppel obtained from such tenant no earlier than 90 days prior to the origination date of the related Senior Mortgage Loan, and to the Mortgage Loan Seller’s knowledge based solely on the related estoppel certificate, the related lease is in full force and effect or if not in full force and effect the related space was underwritten as vacant, subject to customary reservations of tenant’s rights, such as, without limitation, with respect to common area maintenance and pass-through audits and verification of landlord’s compliance with co-tenancy provisions. With respect to each Mortgage Loan predominantly secured by a retail, office or industrial property, the Mortgage Loan Seller has received lease estoppels executed within 90 days of the origination date of the related Senior Mortgage Loan that

collectively account for at least 65% of the in-place base rent for the Underlying Mortgaged Property or set of cross-collateralized properties that secure a Senior Mortgage Loan that is represented on the certified rent roll. To the Mortgage Loan Seller’s knowledge, each lease represented on the certified rent roll is in full force and effect, subject to customary reservations of tenant’s rights, such as with respect to common area maintenance and pass-through audits and verification of landlord’s compliance with co-tenancy provisions.

(ggg) Such Senior Mortgage Loan is not cross-collateralized or cross-defaulted with any other Asset that is not subject to a Transaction.

(hhh) No advance of funds has been made by Seller to the related Mortgagor, and no funds have been received from any person other than the related Mortgagor or an affiliate, directly, or, to the Knowledge of Seller, indirectly for, or on account of, payments due on the Senior Mortgage Loan. Neither Seller nor any Affiliate thereof has any obligation to make any capital contribution to any Mortgagor under the Senior Mortgage Loan, other than contributions made on or prior to the Purchase Date.

(iii) Seller has complied with its internal procedures with respect to all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 in connection with the origination of the Senior Mortgage Loan.

Defined Terms

As used in this Exhibit:

The term “Allocated Loan Amount” shall mean, for each Underlying Mortgaged Property, the portion of principal of the related Purchased Asset allocated to such Mortgaged Property for certain purposes (including determining the release prices of properties, if permitted) under such Purchased Asset as set forth in the related loan documents. There can be no assurance, and it is unlikely, that the Allocated Loan Amounts represent the current values of individual Mortgaged Properties, the price at which an individual Underlying Mortgaged Property could be sold in the future to a willing buyer or the replacement cost of the Mortgaged Properties.

The term “Anticipated Repayment Date” shall mean, with respect to any Purchased Asset that is indicated on the Purchased Asset Schedule as having a Revised Rate, the date upon which such Purchased Asset commences accruing interest at such Revised Rate.

The term “Assignment of Leases” shall have the meaning specified in paragraph 10 of this Exhibit VI.

The term “Assignment of Mortgage” shall mean, with respect to any Mortgage, an assignment of the mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related property is located to reflect the assignment and pledge of the Mortgage, subject to the terms, covenants and provisions of this Agreement.

The term “ARD Loan” shall mean any Purchased Asset that provides that if the unamortized principal balance thereof is not repaid on its Anticipated Repayment Date, such Purchased Asset will accrue Excess Interest at the rate specified in the related Mortgage Note and the Mortgagor is required to apply excess monthly cash flow generated by the Underlying Mortgaged Property to the repayment of the outstanding principal balance on such Purchased Asset.

The term “Due Date” shall mean the day of the month set forth in the related Mortgage Note on which each monthly payment of interest and/or principal thereon is scheduled to be first due.

The term “Environmental Site Assessment” shall mean a Phase I environmental report meeting the requirements of the American Society for Testing and Materials, and, if in accordance with customary industry standards a reasonable lender would require it, a Phase II environmental report, each prepared by a licensed third party professional experienced in environmental matters.

The term “Excess Cash Flow” shall mean the cash flow from the Underlying Mortgaged Property securing an ARD Loan after payments of interest (at the Mortgage Interest Rate) and principal (based on the amortization schedule), and (a) required payments for the tax and insurance fund and ground lease escrows fund, (b) required payments for the monthly debt service escrows, if any, (c) payments to any other required escrow funds and (d) payment of operating expenses pursuant to the terms of an annual budget approved by the servicer and discretionary (lender approved) capital expenditures.

The term “Excess Interest” shall mean any accrued and deferred interest on an ARD Loan in accordance with the following terms. Commencing on the respective Anticipated Repayment Date each ARD Loan (pursuant to its existing terms or a unilateral option, as defined in Treasury Regulations under Article 1001 of the Code, in the Purchased Assets exercisable during the term of the Purchased Asset) generally will bear interest at a fixed rate (the “Revised Rate”) per annum equal to the Mortgage Interest Rate plus a percentage specified in the related Purchased Asset Documents. Until the principal balance of each such Purchased Asset has been reduced to zero (pursuant to its existing terms or a unilateral option, as defined in Treasury Regulations under Article 1001 of the Code, in the Purchased Assets exercisable during the term of the mortgage loan), such Purchased Asset will only be required to pay interest at the Mortgage Interest Rate and the interest accrued at the excess of the related Revised Rate over the related Mortgage Interest Rate will be deferred (such accrued and deferred interest and interest thereon, if any, is “Excess Interest”).

The term “Mortgage Interest Rate” shall mean the fixed rate, or the formula applicable to determine the floating rate, of interest per annum that each Purchased Asset bears as of the Purchase Date.

The term “Permitted Encumbrances” shall mean:

I. the lien of current real property taxes, water charges, sewer rents and assessments not yet delinquent or accruing interest or penalties;

II. covenants, conditions and restrictions, rights of way, easements and other matters of public record acceptable to mortgage lending institutions generally and referred to in the related mortgagee’s title insurance policy or, in the case of an Underlying Mortgaged Property located in England and Wales, any title report or certificate of title;

III. other matters to which like properties are commonly subject and which are acceptable to mortgage lending institutions generally, and

IV. the rights of tenants, as tenants only, whether under ground leases or space leases at the Underlying Mortgaged Property

that together do not materially and adversely affect the related Mortgagor’s ability to timely make payments on the related Purchased Asset, which do not materially interfere with the benefits of the security intended to be provided by the related Mortgage or the use, for the use currently being made, the operation as currently being operated, enjoyment, value or marketability of such Underlying Mortgaged Property, provided, however, that, for the avoidance of doubt, Permitted Encumbrances shall exclude all pari passu, second, junior and subordinated mortgages but shall not exclude mortgages that secure Purchased Assets that are cross-collateralized with other Purchased Assets.

The term “Revised Rate” shall mean, with respect to those Purchased Assets on the Purchased Asset Schedule indicated as having a revised rate, the increased interest rate after the Anticipated Repayment Date (in the absence of a default) for each applicable Purchased Asset, as calculated and as set forth in the related Purchased Asset.

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

THAT IS A JUNIOR MORTGAGE LOAN

(OTHER THAN A PARTICIPATION INTEREST)

(a) The information set forth in the Purchased Asset Schedule is complete, true and correct in all material respects.

(b) There exists no material default, breach, violation or event of acceleration (and no event that, with the passage of time or the giving of notice, or both, would constitute any of the foregoing) under the documents evidencing or securing the Purchased Asset, in any such case to the extent the same materially and adversely affects the value of the Purchased Asset and the related underlying real property.

(c) Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto.

(d) The Purchased Asset Documents have been duly and properly executed by the originator of the Purchased Asset, and each is the legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Purchased Asset is not usurious under any Applicable Law to which the Purchased Asset is subject.

(e) The terms of the related Purchased Asset Documents have not been impaired, waived, altered or modified in any material respect (other than by a written instrument that is included in the related Purchased Asset File).

(f) The assignment of the Purchased Asset constitutes the legal, valid and binding assignment of such Purchased Asset from Seller to or for the benefit of Buyer enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(g) All representations and warranties in the Purchased Asset Documents and in the underlying documents for the performing commercial mortgage loan secured by a first lien on a multifamily or commercial property to which such Purchased Asset relates are true and correct in all material respects.

(h) The servicing and collection practices used by Seller for the Purchased Asset have complied with applicable law in all material respects and are consistent with those employed by prudent servicers of comparable Purchased Assets.

(i) Seller is not a debtor in any state or federal bankruptcy or insolvency proceeding.

(j) As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or, by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach; provided, however, that the representations and warranties set forth in this sentence do not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of any subject matter otherwise covered by any other representation or warranty made by Seller in this Exhibit VI. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. With respect to a U.S. Purchased Asset, Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

(k) No Purchased Asset has been satisfied, canceled, subordinated (except to the senior mortgage loan from which the Purchased Asset is derived), released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

(l) There are no circumstances or conditions with respect to the Purchased Asset, the Underlying Mortgaged Property, the related Mortgage, the related Mortgagor, the Purchased Asset File or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Purchased Asset as an unacceptable investment, cause the Purchased Asset to become delinquent or adversely affect the value or marketability of the Purchased Asset.

(m) The Purchased Asset was underwritten strictly in accordance with each Seller’s underwriting standards and conforms to the standards that would be required by Buyer and the Rating Agencies for Buyer to effect one or more sales or assignments of the Purchased Asset or participation interests therein or securitizations of highly-rated single or multi-class securities secured by or evidencing ownership interests in the Purchased Asset and the related Mortgage.

(n) Seller has complied with its internal procedures with respect to all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 in connection with the origination of the Senior Mortgage Loan.

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET

THAT IS A PARTICIPATION INTEREST

IN A SENIOR MORTGAGE LOAN

OR JUNIOR MORTGAGE LOAN

(a) The representations and warranties set forth in this Exhibit VI regarding the Senior Mortgage Loan or Junior Mortgage Loan from which the Purchased Asset is derived shall be deemed incorporated herein in respect of such senior mortgage loan, provided, however, that, in the event that such senior mortgage loan was not originated by Seller or an Affiliate of Seller, Seller shall be deemed to be making the representations set forth in this Exhibit VI with respect to such senior mortgage loan to Seller’s Knowledge.

(b) The information set forth in the Purchased Asset Schedule is complete, true and correct in all material respects.

(c) There exists no material default, breach, violation or event of acceleration (and no event that, with the passage of time or the giving of notice, or both, would constitute any of the foregoing) under the documents evidencing or securing the Purchased Asset, in any such case to the extent the same materially and adversely affects the value of the Purchased Asset and the related underlying real property.

(d) Except with respect to the enforceability of any provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, neither the Purchased Asset nor any of the related Purchased Asset Documents is subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of any such Purchased Asset Documents, or the exercise (in compliance with procedures permitted under applicable law) of any right thereunder, render any Purchased Asset Documents subject to any right of rescission, set-off, abatement, diminution, valid counterclaim or defense, including the defense of usury (subject to anti-deficiency or one form of action laws and to bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law)), and no such right of rescission, set-off, abatement, diminution, valid counterclaim or defense has been asserted with respect thereto.

(e) The Purchased Asset Documents have been duly and properly executed by the originator of the Purchased Asset, and each is the legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Purchased Asset is not usurious under any Applicable Law to which the Purchased Asset is subject.

(f) The terms of the related Purchased Asset Documents have not been impaired, waived, altered or modified in any material respect (other than by a written instrument that is included in the related Purchased Asset File).

(g) The assignment of the Purchased Asset constitutes the legal, valid and binding assignment of such Purchased Asset from Seller to or for the benefit of Buyer enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(h) All representations and warranties in the Purchased Asset Documents and in the underlying documents for the performing commercial mortgage loan secured by a first lien on a multifamily or commercial property to which such Purchased Asset relates are true and correct in all material respects.

(i) The servicing and collection practices used by Seller for the Purchased Asset have complied with applicable law in all material respects and are consistent with those employed by prudent servicers of comparable Purchased Assets.

(j) Seller is not a debtor in any state or federal bankruptcy or insolvency proceeding.

(k) As of the Purchase Date, there is no payment default, giving effect to any applicable notice and/or grace period, and there is no other material default under any of the related Purchased Asset Documents, giving effect to any applicable notice and/or grace period; no such material default or breach has been waived by Seller or on its behalf or by Seller’s predecessors in interest with respect to the Purchased Assets; and no event has occurred that, with the passing of time or giving of notice would constitute a material default or breach; provided, however, that the representations and warranties set forth in this sentence do not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of any subject matter otherwise covered by any other representation or warranty made by Seller in this Exhibit VI. No Purchased Asset has been accelerated and no foreclosure or power of sale proceeding has been initiated in respect of the related Mortgage. With respect to a U.S. Purchased Asset, Seller has not waived any material claims against the related Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

(l) No Purchased Asset has been satisfied, canceled, subordinated (except to the senior mortgage loan from which the Purchased Asset is derived), released or rescinded, in whole or in part, and the related Mortgagor has not been released, in whole or in part, from its obligations under any related Purchased Asset Document.

REPRESENTATIONS AND WARRANTIES

REGARDING PURCHASED ASSETS CONSISTING

OF MEZZANINE LOANS

(a) The Mezzanine Loan is a performing mezzanine loan secured by a pledge of all of the Capital Stock of a Mortgagor that owns income producing commercial real estate.

(b) As of the Purchase Date, such Mezzanine Loan complies in all material respects with, or is exempt from, all requirements of federal, state or local law relating to such Mezzanine Loan.

(c) Immediately prior to the sale, transfer and assignment to Buyer thereof, Seller had good and marketable title to, and was the sole owner and holder of, such Mezzanine Loan, and Seller is transferring such Mezzanine Loan free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such Mezzanine Loan. Upon consummation of the purchase contemplated to occur in respect of such Mezzanine Loan on the Purchase Date therefor, Seller will have validly and effectively conveyed to Buyer all legal and beneficial interest in and to such Mezzanine Loan free and clear of any pledge, lien, encumbrance or security interest.

(d) No fraudulent acts were committed by Seller in connection with its acquisition or origination of such Mezzanine Loan nor were any fraudulent acts committed by any Person in connection with the origination of such Mezzanine Loan.

(e) All information contained in the related Due Diligence Package (or as otherwise provided to Buyer) in respect of such Mezzanine Loan is accurate and complete in all material respects.

(f) Except as included in the Due Diligence Package, Seller is not a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of such Mezzanine Loan and Seller has not consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.

(g) Such Mezzanine Loan is presently outstanding, the proceeds thereof have been fully and properly disbursed and, except for amounts held in escrow by Seller, there is no requirement for any future advances thereunder.

(h) Seller has full right, power and authority to sell and assign such Mezzanine Loan and such Mezzanine Loan or any related Mezzanine Note has not been cancelled, satisfied or rescinded in whole or part nor has any instrument been executed that would effect a cancellation, satisfaction or rescission thereof.

(i) Other than consents and approvals obtained as of the related Purchase Date or those already granted in the documentation governing such Mezzanine Loan (the “Mezzanine

Loan Documents”), no consent or approval by any Person is required in connection with Seller’s sale and/or Buyer’s acquisition of such Mezzanine Loan, for Buyer’s exercise of any rights or remedies in respect of such Mezzanine Loan or for Buyer’s sale, pledge or other disposition of such Mezzanine Loan. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies.

(j) The Mezzanine Collateral is secured by a pledge of equity ownership interests in the related borrower under the Underlying Mortgage Loan or a direct or indirect owner of the related borrower and the security interest created thereby has been fully perfected in favor of Seller as lender under the Mezzanine Loan.

(k) The Underlying Property Owner has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with requisite power and authority to own its assets and to transact the business in which it is now engaged, the sole purpose of the Underlying Property Owner under its organizational documents is to own, finance, sell or otherwise manage the Properties and to engage in any and all activities related or incidental thereto, and the Mortgaged Properties constitute the sole assets of the Underlying Property Owner.

(l) The Underlying Property Owner has good and marketable title to the Underlying Mortgaged Property, no claims under the title policies insuring the Underlying Property Owner’s title to the Properties have been made, and the Underlying Property Owner has not received any written notice regarding any material violation of any easement, restrictive covenant or similar instrument affecting the Underlying Mortgaged Property.

(m) The representations and warranties made by the borrower (the “Mezzanine Borrower”) in the Mezzanine Loan Documents were true and correct in all material respects as of the date such representations and warranties were stated to be true therein, and there has been no adverse change with respect to the Mezzanine Loan, the Mezzanine Borrower, the Underlying Mortgaged Property or the Underlying Property Owner that would render any such representation or warranty not true or correct in any material respect as of the Purchase Date.

(n) The Mezzanine Loan Documents provide for the acceleration of the payment of the unpaid principal balance of the Mezzanine Loan if (i) the related borrower voluntarily transfers or encumbers all or any portion of any related Mezzanine Collateral, or (ii) any direct or indirect interest in the related borrower is voluntarily transferred or assigned, other than, in each case, as permitted under the terms and conditions of the related loan documents.

(o) Pursuant to the terms of the Mezzanine Loan Documents: (a) no material terms of any related Mortgage may be waived, canceled, subordinated or modified in any material respect and no material portion of such Mortgage or the Underlying Mortgaged Property may be released without the consent of the holder of the Mezzanine Loan; (b) no material action may be taken by the Underlying Property Owner with respect to the Underlying Mortgaged Property without the consent of the holder of the Mezzanine Loan; (c) the holder of the Mezzanine Loan is entitled to approve the budget of the Underlying Property Owner as it relates to the Underlying Mortgaged Property; and (d) the holder of the Mezzanine Loan’s consent is required prior to the Underlying Property Owner incurring any additional indebtedness.

(p) There is no (i) monetary default, breach or violation with respect to such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the owner of the Underlying Mortgaged Property (the “Underlying Property Owner”), (ii) material non-monetary default, breach or violation with respect to such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the Underlying Property Owner or (iii) event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration.

(q) No default or event of default has occurred under any agreement pertaining to any lien or other interest that ranks pari passu with or senior to the interests of the holder of such Mezzanine Loan or with respect to any Underlying Mortgage Loan or other indebtedness in respect of the related Underlying Mortgaged Property and there is no provision in any agreement related to any such lien, interest or loan which would provide for any increase in the principal amount of any such lien, other interest or loan.

(r) With respect to a U.S. Purchased Asset, Seller’s security interest in the Mezzanine Loan is covered by a UCC-9 insurance policy (the “UCC-9 Policy”) in the maximum principal amount of the Mezzanine Loan insuring that the related pledge is a valid first priority lien on the collateral pledged in respect of such Mezzanine Loan (the “Mezzanine Collateral”), subject only to the exceptions stated therein (or a pro forma title policy or marked up title insurance commitment on which the required premium has been paid exists which evidences that such UCC-9 Policy will be issued), such UCC-9 Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, no material claims have been made thereunder and no claims have been paid thereunder, Seller has not done, by act or omission, anything that would materially impair the coverage under the UCC-9 Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be issued, the coverage to be provided thereby) will inure to the benefit of Buyer without the consent of or notice to the insurer.

(s) The Mezzanine Loan, and each party involved in the origination of the Mezzanine Loan, complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

(t) With respect to a U.S. Purchased Asset, Seller has delivered to Buyer or its designee the original promissory note made in respect of such Mezzanine Loan, together with an original assignment thereof executed by Seller in blank. With respect to a Foreign Purchased Asset, Seller has delivered to the Buyer the original Foreign Finance Documents, the applicable Foreign Assignment Agreements, and a Transfer Certificate.

(u) Seller has not received any written notice that the Mezzanine Loan may be subject to reduction or disallowance for any reason, including without limitation, any setoff, right of recoupment, defense, counterclaim or impairment of any kind.

(v) Seller has no obligation to make loans to, make guarantees on behalf of, or otherwise extend credit to, or make any of the foregoing for the benefit of, the Mezzanine Borrower or any other person under or in connection with the Mezzanine Loan.

(w) The servicing and collection practices used by the servicer of the Mezzanine Loan, and the origination practices of the related originator, have been in all respects legal, proper and prudent and have met customary industry standards by prudent institutional commercial mezzanine lenders and mezzanine loan servicers except to the extent that, in connection with its origination, such standards were modified as reflected in the documentation delivered to Buyer.

(x) If applicable, the ground lessor consented to and acknowledged that (i) the Mezzanine Loan is permitted / approved, (ii) any foreclosure of the Mezzanine Loan and related change in ownership of the ground lessee will not require the consent of the ground lessor or constitute a default under the ground lease, (iii) copies of default notices would be sent to Mezzanine Lender and (iv) it would accept cure from Mezzanine Lender on behalf of the ground lessee.

(y) To the extent Buyer was granted a security interest with respect to the Mezzanine Loan, such interest (i) was given for due consideration, (ii) has attached, (iii) is perfected, (iv) is a first priority Lien, and (v) has been appropriately assigned to Buyer by the Underlying Property Owner.

(z) No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority is required for any transfer or assignment by the holder of such Mezzanine Loan.

(aa) 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 Mezzanine Loan is or may become obligated.

(bb) Seller has not advanced funds, or knowingly received any advance of funds from a party other than the borrower relating to such Mezzanine Loan, directly or indirectly, for the payment of any amount required by such Mezzanine Loan.

(cc) All real estate taxes and governmental assessments, or installments thereof, which would be a lien on any related Underlying Mortgaged Property and that prior to the Purchase Date for the related Purchased Asset have become delinquent in respect of such Underlying Mortgaged Property have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established. For purposes of this representation and warranty, real estate taxes and governmental assessments 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.

(dd) As of the Purchase Date for the related Purchased Asset, each related Underlying Mortgaged Property was free and clear of any material damage (other than deferred maintenance for which escrows were established at origination) that would affect materially and adversely the

value of such Underlying Mortgaged Property as security for the related Underlying Mortgage Loan and there was no proceeding pending or, based solely upon the delivery of written notice thereof from the appropriate condemning authority, threatened for the total or partial condemnation of such Underlying Mortgaged Property.

(ee) As of the Purchase Date of the Mezzanine Loan, all insurance coverage required under the Mezzanine Loan Documents and/or any mortgage loan related to the Underlying Mortgaged Property, which insurance covered such risks as were customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Underlying Mortgaged Property in the jurisdiction in which such Underlying Mortgaged Property is located, and with respect to a fire and extended perils insurance policy, is in an amount (subject to a customary deductible) at least equal to the lesser of (i) the replacement cost of improvements located on such Underlying Mortgaged Property, or (ii) the outstanding principal balance of the Underlying Mortgage Loan, and in any event, the amount necessary to prevent operation of any co-insurance provisions; and, except if such Underlying Mortgaged Property is operated as a mobile home park, is also covered by business interruption or rental loss insurance, in an amount at least equal to 12 months of operations of the related Underlying Mortgaged Property, all of which was in full force and effect with respect to each related Underlying Mortgaged Property; and, as of the Purchase Date for the related Purchased Asset, all insurance coverage required under the Mezzanine Loan Documents and/or any Underlying Mortgage Loan related to the Underlying Mortgaged Property, which insurance covers such risks and is in such amounts as are customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Underlying Mortgaged Property in the jurisdiction in which such Underlying Mortgaged Property is located, is in full force and effect with respect to each related Underlying Mortgaged Property; all premiums due and payable through the Purchase Date for the related Purchased Asset have been paid; and no notice of termination or cancellation with respect to any such insurance policy has been received by Seller; and except for certain amounts not greater than amounts which would be considered prudent by an institutional commercial and/or multifamily mortgage lender with respect to a similar mortgage loan and which are set forth in the Mezzanine Loan Documents and/or any Underlying Mortgage Loan related to the Underlying Mortgaged Property, any insurance proceeds in respect of a casualty loss, will be applied either (i) to the repair or restoration of all or part of the related Underlying Mortgaged Property or (ii) the reduction of the outstanding principal balance of the Underlying Mortgage Loan, subject in either case to requirements with respect to leases at the related Underlying Mortgaged Property and to other exceptions customarily provided for by prudent institutional lenders for similar loans. The Underlying Mortgaged Property is also covered by comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the related Underlying Mortgaged Property, in an amount customarily required by prudent institutional lenders. With respect to a U.S. Purchased Asset, an architectural or engineering consultant has performed an analysis of the Underlying Mortgaged Properties located in seismic zone 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing the probable maximum loss (“PML”) for the Underlying Mortgaged Property in the event of an earthquake. In such instance, the PML was based on a 475 year lookback with a 10% probability of exceedance in a 50 year period. If the resulting report concluded that the PML would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Underlying Mortgaged Property was

obtained by an insurer rated at least A-:V by A.M. Best Company or “BBB-” (or the equivalent) from S&P and Fitch or “Baa3” (or the equivalent) from Moody’s. If the Underlying Mortgaged Property is located in Florida or within 25 miles of the coast of Texas, Louisiana, Mississippi, Alabama, Georgia, North Carolina or South Carolina such Underlying Mortgaged Property is insured by windstorm insurance in an amount at least equal to the lesser of (i) the outstanding principal balance of such Underlying Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the replacement cost, of the improvements located on the related Underlying Mortgaged Property.

(ff) The insurance policies contain a standard Mortgagee clause naming the Mortgagee, its successors and assigns as loss payee, in the case of a property insurance policy, and additional insured in the case of a liability insurance policy and provide that they are not terminable without 30 days prior written notice to the Mortgagee (or, with respect to non-payment, 10 days prior written notice to the Mortgagee) or such lesser period as prescribed by applicable law. Each Mortgage requires that the Mortgagor maintain insurance as described above or permits the Mortgagee to require insurance as described above, and permits the Mortgagee to purchase such insurance at the Mortgagor’s expense if Mortgagor fails to do so.

(gg) There is no material and adverse environmental condition or circumstance affecting the Underlying Mortgaged Property; there is no material violation of any applicable Environmental Law with respect to the Underlying Mortgaged Property; neither Seller nor the Underlying Property Owner has taken any actions which would cause the Underlying Mortgaged Property not to be in compliance with all applicable Environmental Laws; the underlying mortgage loan documents require the borrower to comply with all Environmental Laws; and each Mortgagor has agreed to indemnify the Mortgagee for any losses resulting from any material, adverse environmental condition or failure of the Mortgagor to abide by such Environmental Laws or has provided environmental insurance.

(hh) No borrower under the Mezzanine Loan nor any Mortgagor under any Underlying Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.

(ii) Each related Underlying Mortgaged Property was inspected by or on behalf of the related originator or an affiliate during the 12 month period prior to the related origination date.

(jj) There are no material violations of any applicable zoning ordinances, building codes and land laws applicable to the Underlying Mortgaged Property or the use and occupancy thereof which (i) are not insured by an ALTA lender’s title insurance policy (or a binding commitment therefor), or its equivalent as adopted in the applicable jurisdiction, or a law and ordinance insurance policy or, with respect to a Foreign Purchased Asset, that have not been fully disclosed in the related Property Report or (ii) would have a material adverse effect on the value, operation or net operating income of the Underlying Mortgaged Property. The Purchased Asset Documents and the underlying mortgage loan documents require the Underlying Mortgaged Property to comply with all applicable laws and ordinances.

(kk) None of the material improvements which were included for the purposes of determining the appraised value of any related Underlying Mortgaged Property at the time of the origination of the Mezzanine Loan or any related Underlying Mortgage Loan lies outside of the

boundaries and building restriction lines of such property (except Underlying Mortgaged Properties which are legal non-conforming uses), to an extent which would have a material adverse effect on the value of the Underlying Mortgaged Property or the related Mortgagor’s use and operation of such Underlying Mortgaged Property (unless affirmatively covered by title insurance) and no improvements on adjoining properties encroached upon such Underlying Mortgaged Property to any material and adverse extent (unless affirmatively covered by title insurance).

(ll) As of the Purchase Date for the related Purchased Asset, there was no pending action, suit or proceeding, or governmental investigation of which Seller, the Mezzanine Borrower or the Underlying Property Owner has received notice, against the Mortgagor or the related Underlying Mortgaged Property the adverse outcome of which could reasonably be expected to materially and adversely affect the Mezzanine Loan or the Underlying Mortgage Loan.

(mm) The improvements located on the Underlying Mortgaged Property are either not located in a federally designated special flood hazard area or, if so located, the Mortgagor is required to maintain or the Mortgagee maintains, flood insurance with respect to such improvements and such policy is in full force and effect in an amount no less than the lesser of (i) the original principal balance of the Underlying Mortgage Loan, (ii) the value of such improvements on the related Underlying Mortgaged Property located in such flood hazard area or (iii) the maximum allowed under the related federal flood insurance program.

(nn) Except for Mortgagors under Underlying Mortgage Loans the Underlying Mortgaged Property with respect to which includes a Ground Lease, the related Mortgagor (or its affiliate) has title in the fee simple interest in each related Underlying Mortgaged Property.

(oo) The related Underlying Mortgaged Property is not encumbered, and none of the Purchased Asset Documents or any underlying mortgage loan documents permits the related Underlying Mortgaged Property to be encumbered subsequent to the Purchase Date of the related Purchased Asset without the prior written consent of the holder thereof, by any lien securing the payment of money junior to or of equal priority with, or superior to, the lien of the related Mortgage (other than title exceptions, taxes, assessments and contested mechanics and materialmen’s liens that become payable after such Purchase Date).

(pp) With respect to U.S. Purchased Assets, each related Underlying Mortgaged Property constitutes one or more complete separate tax lots (or the related Mortgagor has covenanted to obtain separate tax lots and a Person has indemnified the Mortgagee for any loss suffered in connection therewith or an escrow of funds in an amount sufficient to pay taxes resulting from a breach thereof has been established) or is subject to an endorsement under the related title insurance policy.

(qq) An appraisal of the related Underlying Mortgaged Property was conducted in connection with the origination of the Underlying Mortgage Loan; and such appraisal satisfied either (A) the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation or, in the case of an Underlying Mortgaged Property located in England and Wales, the Valuations Standards (Red

Book) published by the Royal Institute of Chartered Surveyors, or (B) the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in either case as in effect on the date such Underlying Mortgage Loan was originated.

(rr) The related Underlying Mortgaged Property is served by public utilities, water and sewer (or septic facilities) and otherwise appropriate for the use in which the Underlying Mortgaged Property is currently being utilized.

(ss) With respect to each related Underlying Mortgaged Property consisting of a Ground Lease, Seller represents and warrants the following with respect to the related Ground Lease:

I. Such Ground Lease or a memorandum thereof has been or will be duly recorded or registered no later than 30 days after the Purchase Date of the related Purchased Asset and such Ground Lease permits the interest of the lessee thereunder to be encumbered by the related Mortgage or, if consent of the lessor thereunder is required, it has been obtained prior to the Purchase Date.

II. Upon the foreclosure of the Underlying Mortgage Loan (or acceptance of a deed in lieu thereof), the Mortgagor’s interest in such Ground Lease is assignable to the Mortgagee under the leasehold estate and its assigns without the consent of the lessor thereunder (or, if any such consent is required, it has been obtained prior to the Purchase Date).

III. Such Ground Lease may not be amended, modified, canceled or terminated without the prior written consent of the Mortgagee and any such action without such consent is not binding on the Mortgagee, its successors or assigns, except termination or cancellation if (i) an event of default occurs under the Ground Lease, (ii) notice thereof is provided to the Mortgagee and (iii) such default is curable by the Mortgagee as provided in the Ground Lease but remains uncured beyond the applicable cure period.

IV. Such Ground Lease is in full force and effect, there is no material default under such Ground Lease, and there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default under such Ground Lease.

V. The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give notice of any default by the lessee to the Mortgagee. The Ground Lease or ancillary agreement further provides that no notice given is effective against the Mortgagee unless a copy has been given to the Mortgagee in a manner described in the Ground Lease or ancillary agreement.

VI. The Ground Lease (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, subject, however, to only the Title Exceptions or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the Mortgagee on the lessor’s fee interest in the Underlying Mortgaged Property is subject.

VII. A Mortgagee is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease) to cure any curable default under such Ground Lease before the lessor thereunder may terminate such Ground Lease.

VIII. Such Ground Lease has an original term (together with any extension options, whether or not currently exercised, set forth therein all of which can be exercised by the Mortgagee if the Mortgagee acquires the lessee’s rights under the Ground Lease) that extends not less than 20 years beyond the stated maturity date.

IX. Under the terms of such Ground Lease, any estoppel or consent letter received by the Mortgagee from the lessor, and the related Mortgage, taken together, any related insurance proceeds or condemnation award (other than in respect of a total or substantially total loss or taking) will be applied either to the repair or restoration of all or part of the related Underlying Mortgaged Property, with the Mortgagee or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment or defeasance of the outstanding principal balance of the Underlying Mortgage Loan, together with any accrued interest (except in cases where a different allocation would not be viewed as commercially unreasonable by any commercial mortgage lender, taking into account the relative duration of the Ground Lease and the related Mortgage and the ratio of the market value of the related Underlying Mortgaged Property to the outstanding principal balance of such Underlying Mortgage Loan).

X. The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by a prudent commercial lender.

XI. The ground lessor under such Ground Lease is required to enter into a new lease upon termination of the Ground Lease for any reason, including the rejection of the Ground Lease in bankruptcy.

(tt) The assignment of the Purchased Asset constitutes the legal, valid and binding assignment of such Purchased Asset from Seller to or for the benefit of Buyer enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(uu) Seller has complied with its internal procedures with respect to all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 in connection with the origination of the Senior Mortgage Loan.

EXHIBIT VII

U.S. PURCHASED ASSET

ASSET INFORMATION

Loan ID #:

Borrower Name:

Borrower Address:

Borrower City:

Borrower State:

Borrower Zip Code:

Recourse?

Guaranteed?

Related Borrower Name(s):

Original Principal Balance:

Note Date:

Loan Date:

Loan Type (e.g. fixed/arm):

Current Principal Balance:

Current Interest Rate (per annum):

Paid to date:

Annual P&I:

Next Payment due date:

Index (complete whether fixed or arm):

Gross Spread/Margin (complete whether fixed or arm):

Life Cap:

Life Floor:

Periodic Cap:

Periodic Floor:

Rounding Factor:

Lookback (in days):

Interest Calculation Method (e.g., Actual/360):

Interest rate adjustment frequency:

P&I payment frequency:

First P&I payment due:

First interest rate adjustment date:

First payment adjustment date:

Next interest rate adjustment date:

Next payment adjustment date:

Conversion Date:

Converted Interest Rate Index:

Converted Interest Rate Spread:

Maturity date:

Loan term:

Amortization term:

Hyper-Amortization Flag:

Hyper-Amortization Term:

Hyper-Amortization Rate Increase:

Balloon Amount:

Balloon LTV:

Prepayment Penalty Flag:

Prepayment Penalty Text:

Lockout Period:

Lien Position:

Fee/Leasehold:

Ground Lease Expiration Date:

CTL (Yes/No):

CTL Rating (Moody’s):

CTL Rating (Duff):

CTL Rating (S&P):

CTL Rating (Fitch):

Lease Guarantor:

CTL Lease Type (NNN, NN, Bondable):

Property Name:

Property Address:

Property City:

Property Zip Code:

Property Type (General):

Property Type (Specific):

Cross-collateralized (Yes/No)††:

Property Size:

Year built:

Year renovated:

Actual Average Occupancy:

Occupancy Rent Roll Date:

Underwritten Average Occupancy:

Largest Tenant:

Largest Tenant SF:

Largest Tenant Lease Expiration:

2nd Largest Tenant:

2nd Largest Tenant SF:

2nd Largest Tenant Lease Expiration:

3rd Largest Tenant:

3rd Largest Tenant SF:

3rd Largest Tenant Lease Expiration:

Underwritten Average Rental Rate/ADR:

Underwritten Vacancy/Credit Loss:

Underwritten Other Income:

†† If yes, give property information on each property covered and in aggregate as appropriate. Loan ID’s should be denoted with a suffix letter to signify loans/collateral.

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:

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:

Notes:

FOREIGN PURCHASED ASSET

ASSET INFORMATION

Loan ID #:

Borrower Name:

Borrower Address:

Borrower City:

Borrower State:

Borrower Zip Code:

Recourse?

Guaranteed?

Related Borrower Name(s):

Original Principal Balance:

Note Date:

Loan Date:

Loan Type (e.g. fixed/arm):

Current Principal Balance:

Current Interest Rate (per annum):

Current Drawn Balance:

Drawdown History (amounts and dates):

Undrawn Amount:

Paid to date:

Annual P&I:

Next Payment due date:

Index (complete whether fixed or arm):

Gross Spread/Margin (complete whether fixed or arm):

Life Cap:

Life Floor:

Periodic Cap:

Periodic Floor:

Rounding Factor:

Lookback (in days):

Interest Calculation Method (e.g., Actual/360):

Interest rate adjustment frequency:

P&I payment frequency:

First P&I payment due:

First interest rate adjustment date:

First payment adjustment date:

Next interest rate adjustment date:

Next payment adjustment date:

Conversion Date:

Converted Interest Rate Index:

Converted Interest Rate Spread:

Maturity date:

Loan term:

Amortization term:

Hyper-Amortization Flag:

Hyper-Amortization Term:

Hyper-Amortization Rate Increase:

Balloon Amount:

Balloon LTV:

Prepayment Penalty Flag:

Prepayment Penalty Text:

Lockout Period:

Lien Position:

Fee/Leasehold:

Ground Lease Expiration Date:

CTL (Yes/No):

CTL Rating (Moody’s):

CTL Rating (Duff):

CTL Rating (S&P):

CTL Rating (Fitch):

Lease Guarantor:

CTL Lease Type (NNN, NN, Bondable):

Property Name:

Property Address:

Property City:

Property Zip Code:

Property Type (General):

Property Type (Specific):

Cross-collateralized (Yes/No)‡‡:

Property Size:

Year built:

Year renovated:

Actual Average Occupancy:

Occupancy Rent Roll Date:

Underwritten Average Occupancy:

Largest Tenant:

Largest Tenant SF:

Largest Tenant Lease Expiration:

2nd Largest Tenant:

2nd Largest Tenant SF:

2nd Largest Tenant Lease Expiration:

3rd Largest Tenant:

3rd Largest Tenant SF:

3rd Largest Tenant Lease Expiration:

Underwritten Average Rental Rate/ADR:

Underwritten Vacancy/Credit Loss:

Underwritten Other Income:

‡‡ If yes, give property information on each property covered and in aggregate as appropriate. Loan ID’s should be denoted with a suffix letter to signify loans/collateral.

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:

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:

Notes:

EXHIBIT VIII

PURCHASE PROCEDURES

(a) Submission of Due Diligence Package. No less than fifteen (15) Business Days prior to the proposed Purchase Date or date of an Additional Purchase Transaction or Future Funding Transaction, as applicable, Seller shall deliver to Buyer a due diligence package for Buyer’s review and approval, which shall contain the following items (the “Due Diligence Package”):

1. Delivery of Purchased Asset Documents. With respect to a New Asset that is a Pre-Existing Asset, each of the Purchased Asset Documents and, with respect to a Purchased Asset that is the subject of a proposed Additional Purchase Transaction or Future Funding Transaction, any Purchased Asset Document that has been modified or amended in any manner since the related Purchase Date.

2. Transaction-Specific Due Diligence Materials. With respect to any New Asset or Purchased Asset that is the subject of a proposed Additional Purchase Transaction or Future Funding Transaction, a summary memorandum outlining the proposed transaction or advance, as applicable, including potential benefits and all material underwriting risks, all Underwriting Issues and all other characteristics of the proposed transaction or advance, as applicable, that a reasonable buyer would consider material, together with the following due diligence information relating to the New Asset or, with respect to a Purchased Asset that is the subject of a proposed Additional Purchase Transaction or Future Funding Transaction, any updates to the following due diligence information reflecting changes from the related Purchase Date:

(a) the Asset Information and, if available, maps and photos;

(b) a current rent roll and roll over schedule, if applicable;

(c) a cash flow pro-forma, plus historical information, if available;

(d) copies of appraisal, environmental, engineering and any other third-party reports; provided, that, if same are not available to Seller at the time of Seller’s submission of the Due Diligence Package to Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(e) a description of the underlying real estate directly or indirectly securing or supporting such Purchased Asset and the ownership structure of the borrower and the sponsor (including, without limitation, the board of directors, if applicable) and, to the extent that real property does not secure 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 Mortgagor, including experience with other projects (real estate owned), its ownership structure and financial statements;

(j) a description of Seller’s relationship with the Mortgagor, if any;

(k) copies of documents evidencing such New 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 Buyer, Seller shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

(l) in the case of Subordinate Eligible Assets, all information described in this section 2(A) that would otherwise be provided for the Underlying Mortgage Loan if it were an Eligible Asset, and in addition, all documentation evidencing such Subordinate Eligible Asset; and

(m) any exceptions to the representations and warranties set forth in Exhibit VI to this Agreement.

3. Environmental and Engineering. A “Phase 1” (and, if requested by Buyer, “Phase 2”) environmental report, an asbestos survey, if applicable, and an engineering report, each in form reasonably satisfactory to Buyer, by an engineer or environmental consultant reasonably approved by Buyer.

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.

5. Appraisal. Either an appraisal approved by Buyer or a draft appraisal, each by an MAI appraiser (or RICS appraiser with respect to a Foreign Purchased Asset), if applicable. If Buyer receives only a draft appraisal prior to entering into a Transaction, Seller shall deliver an appraisal approved by Buyer by an MAI appraiser on or before ten (10) calendar days after the Purchase Date. The related appraisal shall (i) be dated less than twelve (12) months prior to the proposed financing date and (ii) not be ordered by the related borrower or an Affiliate of the related borrower.

6. Opinions of Counsel. An opinion to Seller and its successors and assigns from counsel to the underlying obligor on the underlying loan transaction, as applicable, as to enforceability of the loan documents governing such transaction and such other matters as Buyer shall require (including, without limitation, opinions as to due formation, authority, choice of law and perfection of security interests).

7. Additional Real Estate Matters. To the extent obtained by Seller from the Mortgagor or the underlying obligor relating to any Eligible Asset at the origination of the Eligible Asset, such other real estate related certificates and documentation as may have been requested by Buyer, such as abstracts of all leases in effect at the real property relating to such Eligible Asset.

8. Other Documents. Any other documents as Buyer or its counsel shall reasonably deem necessary.

(b) Submission of Legal Documents. With respect to a New Asset that is an Originated Asset, no less than seven (7) calendar days prior to the proposed Purchase Date, Seller shall deliver, or cause to be delivered, to counsel for Buyer the following items, where applicable:

1. Copies of all draft Purchased Asset Documents in substantially final form, blacklined against the approved form Purchased Asset Documents.

2. Certificates or other evidence of insurance demonstrating insurance coverage in respect of the underlying real estate directly or indirectly securing or supporting such Purchased Asset of types, in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in the Purchased Asset Documents. Such certificates or other evidence shall indicate that Seller (or, as to Subordinate Eligible Assets, the lead lender on the whole loan in which Seller is a participant or holder of a note or has an equity interest in the Mortgagor, as applicable), 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.

3. All surveys of the underlying real estate directly or indirectly securing or supporting such Purchased Asset that are in Seller’s possession.

4. As reasonably requested by Buyer, satisfactory reports of UCC (with respect to U.S. Purchased Assets), tax lien, judgment and litigation searches and title updates as customary for the applicable jurisdiction conducted by search firms and/or title companies reasonably acceptable to Buyer with respect to the Eligible Asset, underlying real estate directly or indirectly securing or supporting such Eligible Asset, Seller and Mortgagor, such searches to be conducted in each location Buyer shall reasonably designate.

5. With respect to a U.S. Purchased Asset, an unconditional commitment to issue a Title Policy in favor of Buyer and Buyer’s successors and/or assigns with respect to Buyer’s interest in the related real property and insuring the assignment of the Eligible Asset to Buyer, with an amount of insurance that shall be not less than the maximum principal amount of the Eligible Asset (taking into account the proposed advance), or an endorsement or confirmatory letter from the title insurance company that issued the existing title insurance policy, in favor of

Buyer and Buyer’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).

6. Certificates of occupancy and letters certifying that the property is in compliance with all applicable planning and/or zoning laws, each issued by the appropriate Governmental Authority.

(c) Approval of Eligible Asset, Additional Purchase Transaction or Future Funding Transaction. Conditioned upon the timely and satisfactory completion of Seller’s requirements in clauses (a) and (b) above, Buyer shall, no less than five (5) calendar days prior to the proposed Purchase Date, date of Additional Purchase Transaction or date of Future Funding Transaction, as applicable, (i) in the case of the proposed purchase of an Eligible Asset, (A) notify Seller in writing (which may take the form of electronic mail format) that Buyer has not approved the proposed Eligible Asset as a Purchased Asset or (B) notify Seller in writing (which may take the form of electronic mail format) that Buyer has approved the proposed Eligible Asset as a Purchased Asset or (ii) in the case of a proposed Additional Purchase Transaction or Future Funding Transaction, (A) notify Seller in writing (which may take the form of electronic mail format) that Buyer has not approved the proposed Additional Purchase Transaction or Future Funding Transaction or (B) notify Seller in writing (which may take the form of electronic mail format) that Buyer has approved the proposed Additional Purchase Transaction or Future Funding Transaction. Buyer’s failure to respond to Seller on or prior to five (5) calendar days prior to the proposed Purchase Date, shall be deemed to be a denial of Seller’s request that Buyer approve the proposed Eligible Asset or proposed Additional Purchase Transaction or Future Funding Transaction, as applicable, unless Buyer and Seller has agreed otherwise in writing.

(d) Assignment Documents. No less than two (2) business days prior to the proposed Purchase Date, Seller shall have executed and delivered to Buyer, in form and substance reasonably satisfactory to Buyer and its counsel, all applicable assignment documents assigning to Buyer the proposed Eligible Asset (and in any Hedging Transactions held by Seller with respect thereto) that shall be subject to no liens except as expressly permitted by Buyer. Each of the assignment documents shall contain such representations and warranties in writing concerning the proposed Eligible Asset and such other terms as shall be satisfactory to Buyer in its sole discretion.

EXHIBIT IX

FORM OF BAILEE LETTER

        , 201  

Re: Bailee Agreement (the “Bailee Agreement”) in connection with the pledge by [        ] ( “Seller”) to JPMorgan Chase Bank, National Association (“Buyer”)

Ladies and Gentlemen:

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, Buyer and [        ] (the “Bailee”) hereby agree as follows:

(a) Seller shall deliver to the Bailee in connection with any Purchased Assets delivered to the Bailee hereunder the Custodial Delivery Certificate to which shall be attached a Purchased Asset Schedule identifying which Purchased Assets are being delivered to the Bailee hereunder.

(b) On or prior to the date indicated on the Custodial Delivery Certificate delivered by Seller (the “Funding Date”), Seller shall have delivered to the Bailee, as bailee for hire, the original documents set forth on Exhibit B attached thereto (collectively, the “Purchased Asset File”) for each of the Purchased Assets (each a “Purchased Asset” and collectively, the “Purchased Assets”) listed in Exhibit A attached thereto.

(c) The Bailee shall issue and deliver to Buyer and U.S. Bank National Association (the “Custodian”) on or prior to the Funding Date by facsimile (a) in the name of Buyer, an initial trust receipt and certification in the form of Attachment 2 attached hereto (the “Bailee’s Trust Receipt and Certification”) which Bailee’s Trust Receipt and Certification shall state that the Bailee has received the documents comprising the Purchased Asset File as set forth in the Custodial Delivery Certificate.

(d) On the applicable Funding Date, in the event that Buyer fails to purchase from Seller the Purchased Assets identified in the related Custodial Delivery Certificate, Buyer shall deliver by facsimile to the Bailee at         ] to the attention of [        ], an authorization (the “Facsimile Authorization”) to release the Purchased Asset Files with respect to the Purchased Assets identified therein to Seller. Upon receipt of such Facsimile Authorization, the Bailee shall release the Purchased Asset Files to Seller in accordance with Seller’s instructions.

(e) Following the Funding Date, the Bailee shall forward the Purchased Asset Files to the Custodian at [        ], 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”).

(f) From and after the applicable Funding Date until the time of receipt of the Facsimile Authorization or the applicable Delivery Date, as applicable, the Bailee (a) shall maintain continuous custody (and will forward in accordance with clause (e) above) and control of the related Purchased Asset Files as bailee for Buyer and (b) is holding the related Purchased Assets as sole and exclusive bailee for Buyer unless and until otherwise instructed in writing by Buyer.

(g) Seller agrees to indemnify and hold the Bailee and its partners, directors, officers, agents 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, 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 the Bailee) were imposed on, incurred by or asserted against the Bailee because of the breach by the Bailee of its obligations hereunder, which breach was caused by gross negligence or willful misconduct on the part of the Bailee or any of its partners, directors, officers, agents or employees. The foregoing indemnification shall survive any resignation or removal of the Bailee or the termination or assignment of this Bailee Agreement.

(h) In the event that the Bailee fails to produce a Mortgage Note, assignment of collateral or any other document related to a Purchased Asset that is (or was required to be) then in its possession within ten (10) business days after required or requested by Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify Seller or Buyer in accordance with the paragraph (g) above.

(i) Seller agrees to indemnify and hold Buyer and its respective 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, including reasonable attorneys fees, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of a Custodial Delivery Failure or the Bailee’s negligence, lack of good faith or willful misconduct. The foregoing indemnification shall survive any termination or assignment of this Bailee Agreement.

(j) Seller hereby represents, warrants and covenants that the Bailee is not an affiliate of or otherwise controlled by Seller. Notwithstanding the foregoing, the parties hereby acknowledge that the Bailee hereunder may act as

counsel to Seller in connection with a proposed transaction and [        ], if acting as Bailee, has represented Seller in connection with negotiation, execution and delivery of the Repurchase Agreement.

(k) [Arrangements to be discussed with respect to a pledge of Purchased Assets as collateral for an obligation of Buyer held by the Bailee, such arrangements to be agreed to by Bailee in its sole discretion without obligation.]

(l) The agreement set forth in this Bailee Agreement may not be modified, amended or altered, except by written instrument, executed by all of the parties hereto.

(m) This Bailee Agreement may not be assigned by Seller or the Bailee without the prior written consent of Buyer.

(n) 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.

(o) 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.

(p) Capitalized terms used herein and defined herein shall have the meanings ascribed to them in the Repurchase Agreement.

Very truly yours,

[                             ]

By:

Name:

Title:

ACCEPTED AND AGREED:

[BAILEE]

By:

Name:

ACCEPTED AND AGREED:

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

Buyer

By:

Name:

Title:

Schedule A

[List of Purchased Asset Documents]

Attachment 1

IDENTIFICATION CERTIFICATE

On this [    ] day of [        ], 201[    ], [        ] (the “Seller”), under that certain Bailee Agreement of even date herewith (the “Bailee Agreement”), among Seller, [        ] (the “Bailee”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Buyer, does hereby instruct the Bailee to hold, in its capacity as Bailee, the Purchased Asset Files with respect to the Purchased Assets listed on Exhibit A hereto, which Purchased Assets shall be subject to the terms of the Bailee Agreement as of the date hereof.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Bailee Agreement.

IN WITNESS WHEREOF, Seller has caused this Identification Certificate to be executed and delivered by its duly authorized officer as of the day and year first above written.

[                            ]

By:

Name:

Title:

Exhibit A to Attachment 1

PURCHASED ASSET SCHEDULE

Attachment 2

FORM OF BAILEE’S TRUST RECEIPT AND CERTIFICATION

            , 201    

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

270 Park Avenue, 7th Floor

New York, New York 10017-2014

Attention: Ms. Nancy S. Alto

Telephone:(212) 834-9271

Telecopy:(212) 834-6565

Re: Bailee Agreement, dated as of [        ] [        ], 201[    ] (the “Bailee Agreement”) among [        ] (the “Seller”), JPMorgan Chase Bank, National Association (the “Buyer”) and [        ] (the “Bailee”)

Ladies and Gentlemen:

In accordance with the provisions of Paragraph 3 of the above-referenced Bailee Agreement, the undersigned, as the Bailee, hereby certifies that as to each Purchased Asset described in the Purchased Asset Schedule (Exhibit A to Attachment 1), a copy of which is attached hereto, it has reviewed the Purchased Asset File and has determined that (i) all documents listed in Schedule A attached to the Bailee Agreement are in its possession and (ii) such documents have been reviewed by it and appear regular on their face and relate to such Purchased Asset, and (iii) based on its examination, the foregoing documents on their face satisfy the requirements set forth in Paragraph 2 of the Bailee Agreement.

The Bailee hereby confirms that it is holding each such Purchased Asset File as agent and bailee for the exclusive use and benefit of Buyer pursuant to the terms of the Bailee Agreement.

All initially capitalized terms used herein shall have the meanings ascribed to them in the above-referenced Bailee Agreement.

[        ], BAILEE

By:

Name:

Title:

EXHIBIT X

FORM OF MARGIN DEFICIT NOTICE

[DATE]/[TIME]

VIA ELECTRONIC TRANSMISSION

[                             ]

[        ]

[        ]

Attn: [        ]

Re: Master Repurchase Agreement, dated as of December 20, 2013 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement) by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC (“Sellers”)

Pursuant to Article 4(a) of the Master Repurchase Agreement, Buyer hereby notifies Sellers of the existence of a Margin Deficit as of the date hereof as follows:

[Repurchase Price for specific Purchased Asset:	$
Asset Value of such Purchased Asset:	$
MARGIN DEFICIT:	$            ]
[Aggregate Repurchase Price of all Purchased Assets:	$
Maximum Amount:	$
MARGIN DEFICIT:	$            ]

SELLERS ARE REQUIRED TO CURE THE MARGIN DEFICIT SPECIFIED ABOVE IN ACCORDANCE WITH THE MASTER REPURCHASE AGREEMENT AND WITHIN THE TIME PERIOD SPECIFIED ARTICLE 4(a) THEREOF.

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

By:

Name

Title:

EXHIBIT XI

EXHIBIT XI-1

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Assignees That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(r) of the Master Repurchase Agreement, dated as of December 20, 2013 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC, each a Delaware limited liability company, as Sellers. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record and beneficial owner of the ownership interest in the Transaction(s) 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 Code, (iii) it is not a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Seller(s) with a correct, complete, and accurate executed IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the applicable Seller(s), and (2) the undersigned shall have at all times furnished the applicable Seller(s) 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.

[NAME OF ASSIGNEE]

By:

Name:

Title:

Date:                     

EXHIBIT XI-2

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(r) of the Master Repurchase Agreement, dated as of December 20, 2013 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC, each a Delaware limited liability company, as Sellers. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record and beneficial owner of the ownership interest in the Transaction(s) 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 Code, (iii) it is not a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Buyer or Assignee with a correct, complete, and accurate executed IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Buyer or Assignee in writing, and (2) the undersigned shall have at all times furnished such Buyer or Assignee 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.

[NAME OF PARTICIPANT]

By:

Name:

Title:

Date:                         

EXHIBIT XI-3

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(r) of the Master Repurchase Agreement, dated as of December 20, 2013 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC, each a Delaware limited liability company, as Sellers. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such interest, (iii) with respect to such interest, 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 Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Buyer or Assignee with a correct, complete, and accurate executed 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 (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN 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 Buyer or Assignee and (2) the undersigned shall have at all times furnished such Buyer or Assignee 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.

[NAME OF PARTICIPANT]

By:

Name:

Title:

Date:                         

EXHIBIT XI-4

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Assignees That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Article 3(r) of the Master Repurchase Agreement, dated as of December 20, 2013 (the “Master Repurchase Agreement”), by and between JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States, as Buyer, and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC, each a Delaware limited liability company, as Sellers. Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned to such terms in the Master Repurchase Agreement.

The undersigned hereby certifies that (i) it is the sole record owner of the ownership interest in the Transaction(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such interest, (iii) with respect to such interest, 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 Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the applicable Seller(s) as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the applicable Seller(s) with a correct, complete, and accurate executed 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 (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN 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 the applicable Seller(s), and (2) the undersigned shall have at all times furnished the applicable Seller(s) 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.

[NAME OF ASSIGNEE]
By:
	Name:
	Title:

Date:                     

EXHIBIT XII

UCC FILING JURISDICTIONS

Delaware

EXHIBIT XIII

FORM OF SERVICER NOTICE

[DATE]

[SERVICER]

[ADDRESS]

Attention:                     

Re: Master Repurchase Agreement, dated as of December 20, 2013 by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC (“Sellers”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”); (capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement).

Ladies and Gentlemen:

[SERVICER] (the “Servicer”) is servicing certain mortgage assets sold by Seller to Buyer pursuant to the Master Repurchase Agreement (the “Purchased Assets”) pursuant to a servicing agreement dated as of December [    ], 2013 between Servicer and Seller (the “Servicing Agreement”). Servicer is hereby notified that, pursuant to the Master Repurchase Agreement, Seller has sold the Purchased Assets to Buyer on a servicing-released basis, and has granted a security interest to Buyer in the Purchased Assets.

In accordance with Seller’s requirements under the Master Repurchase Agreement, Seller hereby notifies and instructs Servicer, and Servicer hereby agrees that Servicer shall (a) segregate all amounts collected on account of the Purchased Assets, (b) hold the Purchased Assets in trust for Buyer, (c) in accordance with the terms of the Servicing Agreement, remit all such income to the Depository Account at [PNC Bank, National Association], ABA # 043000096, Account # [        ]. Upon receipt of a notice of Event of Default under the Master Repurchase Agreement from Buyer, Servicer shall only follow the instructions of Buyer with respect to the Purchased Assets, and shall deliver to Buyer any information with respect to the Purchased Assets reasonably requested by Buyer.

Notwithstanding any contrary information or direction that may be delivered to Servicer by Sellers, Servicer may conclusively rely on any information, direction or notice of an Event of Default delivered by Buyer, and Sellers shall indemnify and hold Servicer harmless for any and all claims asserted against Servicer for any actions taken in good faith by Servicer in connection with the delivery of such information or notice of Event of Default, absent a Seller’s willful misconduct, gross negligence or fraud.

Servicer hereby agrees that, notwithstanding any provision to the contrary in the Servicing Agreement or in any other agreement which exists between Servicer and Seller in respect of any Purchased Asset, (i) Servicer is servicing the Purchased Assets for the joint benefit of Seller and Buyer, (ii) Buyer is expressly intended to be a third-party beneficiary under the Servicing Agreement, (iii) Buyer has all rights with respect to the Purchased Asset and the servicing thereof, and (iv) Buyer may terminate the Servicing Agreement and any other such agreement immediately upon the delivery of written notice thereof to Servicer and/or in any event transfer servicing to Buyer’s designee, at no cost or expense to Buyer, it being agreed that Seller will pay any and all fees required to terminate the Servicing Agreement and any other such agreement and to effectuate the transfer of servicing to the designee of Buyer in accordance with this Servicer Notice.

[Servicer hereby further acknowledges and agrees that (i) the Servicing Agreement, together with Seller’s rights thereunder, has been assigned to Buyer pursuant to the Master Repurchase Agreement, and Servicer consents to such assignment, (ii) Buyer shall have no obligations, nor liability to Servicer, under the Servicing Agreement (including, without limitation, any indemnification of Servicer provided for in the Servicing Agreement), (iii) Buyer shall have the right to consent to any proposed actions to be taken with respect to the Purchased Assets, and (iv) Servicer shall not modify, amend or terminate the Servicing Agreement without the prior written consent of Buyer.]

No provision of this letter or any Servicing Agreement may be amended, countermanded or otherwise modified without the prior written consent of Buyer. Buyer is an intended third party beneficiary of this letter.

Please acknowledge receipt and your agreement to the terms of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following address: JPMorgan Chase Bank, National Association, 4 New York Plaza, 20^th Floor, New York, New York 10004, Attention: Ms. Nancy S Alto, Fax: (917) 546-2564.

Very truly yours,

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

By:

Name:

Title:

ACKNOWLEDGED AND AGREED TO:
	[                            ]
By:
Name:
Title:

[SERVICER]

By:

Name:

Title:

EXHIBIT XIV

FORM OF RELEASE LETTER

[Date]

JPMorgan Chase Bank, National Association

4 New York Plaza, 20th Floor

New York, New York 10004

Attention: Ms. Nancy S. Alto

Re: Master Repurchase Agreement, dated as of December 20, 2013 by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC (“Sellers”) (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”); (capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Master Repurchase Agreement).

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 all right, interest or claim of any kind other than any rights 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 Buyer 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.

Very truly yours,

[                    ]

By:

Name:

Title:

Schedule A

[List of Purchased Asset Documents]

EXHIBIT XV

FORM OF COVENANT COMPLIANCE CERTIFICATE

[            ] [    ], 201[    ]

JPMorgan Chase Bank, National Association

270 Park Avenue, 7^th Floor

New York, New York 10017-2014

Attention: Chuck Y. Lee

This Covenant Compliance Certificate is furnished pursuant to that certain Master Repurchase Agreement, dated as of December 20, 2013 (as amended, restated, supplemented, or otherwise modified and in effect from time to time, the “Master Repurchase Agreement”) by and between JPMorgan Chase Bank, National Association (“Buyer”) and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC (“Sellers”). Unless otherwise defined herein, capitalized terms used in this Covenant Compliance Certificate have the respective meanings ascribed thereto in the Master Repurchase Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am a duly elected Responsible Officer of Sellers.

2. 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 as of the date hereof.

3. I have reviewed the terms of the Master Repurchase Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and financial condition of Sellers during the accounting period covered by the financial statements attached (or most recently delivered to Buyer if none are attached).

4. I am not aware of any facts, or pending developments that have caused, or may in the future cause the Market Value of any Purchased Asset to decline at any time within the reasonably foreseeable future.

5. As of the date hereof, and since the date of the certificate most recently delivered pursuant to Article 11(j) of the Master Repurchase Agreement, Sellers have observed or performed all of their respective covenants and other agreements in all material respects, and satisfied in all material respects, every condition, contained in the Master Repurchase Agreement and the related documents to be observed, performed or satisfied by them.

6. The examinations described in Paragraph 3 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Default or 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 after giving effect to any pending Transactions requested to be entered into), except as set forth below.

7. As of the date hereof, each of the representations and warranties made by Sellers in the Master Repurchase Agreement are true, correct and complete in all material respects with the same force and effect as if made on and as of the date hereof, except as to the extent of any exceptions approved by Buyer in writing.

8. No condition or event that constitutes a “Termination Event”, “Event of Default”, “Potential Event of Default” or any similar event by Seller, however denominated, has occurred or is continuing under any Hedging Transaction.

9. Attached as Exhibit 2 hereto is a description of all interests of Affiliates of Sellers in any Underlying Mortgaged Property (including without limitation, any lien, encumbrance or other debt or equity position or other interest in the Underlying Mortgaged Property that is senior or junior to, or pari passu with, a Purchased Asset in right of payment or priority).

10. Attached as Exhibit 3 hereto are the financial statements required to be delivered pursuant to Article 11 of the Master Repurchase Agreement (or, if none are required to be delivered as of the date of this Covenant Compliance Certificate, the financial statements most recently delivered pursuant to Article 11 of the Master Repurchase Agreement), which financial statements, to the best of my knowledge after due inquiry, fairly and accurately present in all material respects, the financial condition and operations of Sellers as of the date or with respect to the period therein specified, determined in accordance with the requirements set forth in Article 11.

11. Attached as Exhibit 4 hereto are the calculations demonstrating compliance with the financial covenants set forth in Article 11 of the Master Repurchase Agreement.

To the extent that financial statements are being delivered in connection with this Covenant Compliance Certificate, each Seller hereby makes the following representations and warranties: (i) it is in compliance with all of the terms and conditions of the Master Repurchase Agreement and (ii) it has no claim or offset against Buyer under the Transaction Documents.

To the best of my knowledge, each Seller has, during the period since the delivery of the immediately preceding Covenant Compliance Certificate, observed or performed all of its respective covenants and other agreements in all material respects, and satisfied in all material respects every condition, contained in the Master Repurchase Agreement and the related 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 an Event of Default or Default (including after giving effect to any pending Transactions requested to be entered into), except as set forth below.

Described below are the exceptions, if any, to paragraph 10, listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Guarantor or a Seller 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 this [            ] day of [    ], 201[    ].

Name:

Title:

EXHIBIT XVI

FORM OF RE-DIRECTION LETTER

[SELLER LETTERHEAD]

RE-DIRECTION LETTER

AS OF [    ]

Ladies and Gentlemen:

Please refer to: (a) that certain [Loan Agreement], dated [            ] [        ], 201[        ], by and between [            ] (the “Mortgagor”), as borrower, and [            ] (the “Lender”), as lender; and (b) all documents securing or relating to that certain $[            ] loan made by Lender to Mortgagor on [            ] [        ], 201[        ] (the “Loan”).

You are advised as follows, effective as of the date of this letter.

Assignment of the Loan. Lender has entered into a Master Repurchase Agreement, dated as of December 20, 2013 (as the same may be amended and/or restated from time to time, the “Repurchase Agreement”), with JPMorgan Chase Bank, National Association (“JPMorgan”), 270 Park Avenue, 10th Floor, New York, New York 10017, and has assigned its rights and interests in the Loan (and all of its rights and remedies in respect of the Loan) to JPMorgan, subject to the terms of the Repurchase Agreement. This assignment shall remain in effect unless and until JPMorgan has notified the Mortgagor otherwise in writing.

Direction of Funds. In connection with Lender’s obligations under the Repurchase Agreement, Lender hereby directs Mortgagor to disburse, by wire transfer, any and all payments to be made under or in respect of the Loan to the following account, for the benefit of JPMorgan:

ABA # 121000248

Account # [            ]

Attn: [Insert information regarding Depository Account]

Acct Name: “Midland Loan Services, a Division of PNC Bank, National Association on

behalf of [                            ] for the benefit of JPMorgan Chase Bank, National

Association, as Repurchase Agreement Buyer”

This direction shall remain in effect unless and until JPMorgan has notified Mortgagor 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 the Loan, or of any collateral for any obligations in respect of the Loan, shall be effective without the prior written consent of JPMorgan. Notwithstanding the foregoing, neither Seller nor Servicer shall take any action or effect any modification or amendment to any Purchased Asset without first having given prior notice thereof to Buyer in each such instance and receiving the express prior written consent of Buyer, if such notice and consent is required by the Repurchase Agreement.

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.

Very truly yours,
[                                 ],
a Delaware limited liability company
By:
Name:
Title:
Date:	[            ] [    ], 201[    ]

Agreed and accepted this [    ]

day of [            ], 201[    ]

By:

Name:

Title:

EXHIBIT XVII

FORM OF SERVICING AGREEMENT FOR FOREIGN PURCHASED ASSETS

EX-10.37

Exhibit 10.37

GUARANTEE AGREEMENT

GUARANTEE AGREEMENT, dated as of December 20, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, this “Guarantee”), made by Blackstone Mortgage Trust, Inc., a Maryland corporation (“Guarantor”) in favor of JPMorgan Chase Bank, National Association (“Buyer”).

RECITALS

Pursuant to that certain Master Repurchase Agreement, dated as of December 20, 2013 (as amended, supplemented or otherwise modified from time to time, the “Repurchase Agreement”), between Buyer and Parlex 4 UK Finco, LLC and Parlex 4 Finance, LLC (each a “Seller” and, collectively, “Sellers”), each Seller has agreed to sell, from time to time, to Buyer certain Eligible Assets (as defined in the Repurchase Agreement, upon purchase by Buyer, each a “Purchased Asset” and, collectively, the “Purchased Assets”), upon the terms and subject to the conditions as set forth therein. Pursuant to the terms of that certain Custodial Agreement dated December 20, 2013 (the “Custodial Agreement”) by and among Buyer, Sellers and U.S. Bank National Association (the “Custodian”), Custodian is required to take possession of the Purchased Assets, along with certain other documents specified in the Custodial Agreement, as Custodian of Buyer and any future purchaser, on several delivery dates, in accordance with the terms and conditions of the Custodial Agreement. Pursuant to the terms of that certain Amended and Restated Pledge and Security Agreement dated as of December 20, 2013 (the “Pledge and Security Agreement”) made by 42-16 Partners, LLC (“U.S. Parent”) and 345-40 Partners LLC (“UK Parent”) in favor of Buyer, each of U.S. Parent and UK Parent (each, a “Parent” and together, the “Parents”) has pledged to Buyer all of the Capital Stock of the Seller of which it is the parent entity. The Repurchase Agreement, the Custodial Agreement, the Depository Agreements, the Servicing Agreements, the Pledge and Security Agreement, the Fee Letter, this Guarantee and any other agreements executed in connection with the Repurchase Agreement shall be referred to herein as the “Governing Agreements”.

It is a condition precedent to the purchase by Buyer of the Purchased Assets pursuant to the Repurchase Agreement that Guarantor shall have executed and delivered this Guarantee with respect to the due and punctual payment and performance when due, whether at stated maturity, by acceleration of the Repurchase Date or otherwise, of all of the following: (a) all payment obligations owing by each Seller to Buyer under or in connection with the Repurchase Agreement or any other Governing Agreements; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all fees and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by Buyer in the enforcement of any of the foregoing or any obligation of Guarantor hereunder; and (d) any other obligations of each Seller and each Parent with respect to Buyer under each of the Governing Agreements (collectively, the “Obligations”).

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer to enter into the Governing Agreements and to enter into the transaction contemplated thereunder, Guarantor hereby agrees with Buyer, as follows:

1. Defined Terms. Unless otherwise defined herein, terms that are defined in the Repurchase Agreement and used herein are so used as so defined.

“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.

“Capital Lease Obligation” shall mean, for 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 Equivalents” means any of the following, to the extent owned by Guarantor or any of its Subsidiaries free and clear of all Liens and having a maturity of not greater than 90 days from the date of issuance thereof: (a) readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the government of the United States, (b) certificates of deposit of or time deposits with Buyer or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any state thereof and has combined capital and surplus of at least $1,000,000,000 or (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any state of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P.

“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.

“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.

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

“Indebtedness” shall mean, for any Person: (i) 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); (ii) 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; (iii) 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; (iv) 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; contingent or future funding obligations under any Purchased Loan or any obligations senior to, or pari passu with, any Purchased Loan; (v) Capital Lease Obligations of such Person; (vi) obligations of such Person under repurchase agreements or like arrangements; (vii) Indebtedness of others Guaranteed by such Person to the extent of such guarantee; and (viii) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person. Notwithstanding the foregoing, nonrecourse 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.

“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 (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.

“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.

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2. Guarantee. (a) Guarantor hereby unconditionally and irrevocably guarantees to Buyer the prompt and complete payment and performance of the Obligations by Sellers and Parents when due (whether at the stated maturity, by acceleration or otherwise), subject to applicable notice and cure periods set forth in the Governing Agreements.

(b) Notwithstanding anything in Section 2(a) to the contrary, but subject in all cases to Sections 2(c), (d) and (e) below, the maximum liability of the Guarantor hereunder and under the Repurchase Documents shall in no event collectively exceed the sum of (i) twenty-five percent (25%) of the then-currently unpaid aggregate Repurchase Price of all Purchased Assets that are Senior Mortgage Loans and (ii) one hundred percent (100%) of the then-currently unpaid aggregate Repurchase Price of all Purchased Assets that are Junior Mortgage Loans or Mezzanine Loans.

(c) Notwithstanding the foregoing, the limitation on recourse liability as set forth in Section 2(b) above SHALL BECOME NULL AND VOID and shall be of no force and effect and the Obligations shall be fully recourse to Guarantor upon the occurrence of any of the following:

(i) a voluntary bankruptcy or insolvency proceeding (including, for the avoidance of doubt, any moratorium or administration proceeding in England and Wales or similar event) is commenced by a Seller, a Parent or Guarantor under the U.S. Bankruptcy Code or any similar federal or state law or any law of any other jurisdiction; or

(ii) an involuntary bankruptcy or insolvency proceeding (including, for the avoidance of doubt, any moratorium or administration proceeding in England and Wales or similar event) is commenced against a Seller, a Parent or Guarantor in connection with which such Seller, such Parent or Guarantor or any Affiliate of any of the foregoing (alone or in any combination) has or have colluded in any way with the creditors commencing or filing such proceeding.

(d) In addition to the foregoing and notwithstanding the limitation on recourse liability set forth in subsection (b) above, Guarantor shall be liable for any actual, out-of-pocket losses, costs, claims, expenses or other liabilities incurred by Buyer arising out of or attributable to the following items:

(i) any material breach of the separateness covenants set forth in Article 11 of the Repurchase Agreement;

(ii) any material breach of any representations and warranties by Guarantor contained in any Repurchase Document or herein and any material breach by a Seller, Guarantor or any of their respective Affiliates, of any representations and warranties relating to Environmental Laws, or any indemnity for costs incurred in connection with the violation of any Environmental Law, the correction of any environmental condition, or the removal of any Materials of Environmental Concern, in each case in any way

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affecting such Seller’s or Guarantor’s properties or any of the Purchased Assets; provided that the guarantee set forth in this clause (d)(ii) shall terminate upon foreclosure and transfer or assumption of the Purchased Asset following an Event of Default under the Repurchase Agreement pursuant to a public or private sale or strict foreclosure, or other similar enforcement proceeding; or

(iii) fraud or intentional misrepresentation by a Seller, a Parent, Guarantor, or any other Affiliate of a Seller, a Parent or Guarantor in connection with the execution and the delivery of this Guarantee, the Repurchase Agreement, or any other Governing Document, or any certificate, report, financial statement or other instrument or document furnished to Buyer at the time of the closing of the Repurchase Agreement or during the term of the Repurchase Agreement.

(e) Guarantor further agrees to pay any and all actual expenses (including, without limitation, all reasonable fees and disbursements of counsel) that may be paid or incurred by Buyer in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, Guarantor under this Guarantee. This Guarantee shall remain in full force and effect until the later of (i) the date upon which the Obligations are paid in full and (ii) the termination of the Repurchase Agreement, notwithstanding that from time to time prior thereto, a particular Seller may be free from any Obligations.

(f) No payment or payments made by a Seller or any other Person or received or collected by Buyer from a Seller or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder, which shall, notwithstanding any such payment or payments, remain liable for the amount of the Obligations (subject to the limitations set forth in Section 2(b)) under this Agreement until the Obligations are paid in full.

(g) Guarantor agrees that whenever, at any time, or from time to time, Guarantor shall make any payment to Buyer on account of any liability hereunder, Guarantor will notify Buyer in writing that such payment is made under this Guarantee for such purpose.

3. Subrogation. Upon making any payment hereunder, Guarantor shall be subrogated to the rights of Buyer against each Seller and in any collateral for any Obligations with respect to such payment; provided, that Guarantor shall not seek to enforce any right or receive any payment by way of subrogation until all amounts then due and payable by a Seller to Buyer or any of its Affiliates under the Governing Agreements have been paid in full; provided, further, that such subrogation rights shall be subordinate in all respects to all amounts owing to Buyer under the Governing Agreements.

4. Amendments, etc. with Respect to the Obligations. Until the Obligations shall have been paid and/or performed in full, Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor, and without notice to or further assent by Guarantor, any demand for payment of any of the Obligations made by

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Buyer may be rescinded by Buyer and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Buyer, and any Governing Agreement and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part (other than a termination in whole of the Repurchase Agreement, which shall automatically terminate this Guarantee other than with respect to obligations under the Governing Agreements that, by their terms, survive termination of such Governing Agreements), as Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by Buyer for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Buyer shall have no obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against Guarantor, Buyer may, but shall be under no obligation to, make a similar demand on a Seller or any other Person, and any failure by Buyer to make any such demand or to collect any payments from a Seller or any such other Person or any release of a Seller or such other Person shall not relieve Guarantor of its Obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of Buyer against Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

5. Guarantee Absolute and Unconditional. (a) Guarantor hereby agrees that its obligations under this Guarantee constitute a guarantee of payment when due and not of collection. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Buyer upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee; and all dealings between Sellers, Parents and Guarantor, on the one hand, and Buyer, on the other hand, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Guarantor waives promptness, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon a Seller or this Guarantee with respect to the Obligations. This Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity, regularity or enforceability of any Governing Agreement, any of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by a Seller against Buyer, (iii) any requirement that Buyer exhaust any right to take any action against a Seller, a Parent or any other Person prior to or contemporaneously with proceeding to exercise any right against Guarantor under this Guarantee or (iv) any other circumstance whatsoever (with or without notice to or knowledge of a Seller, a Parent and Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of a Seller for the Obligations or of Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against Guarantor, Buyer may, but shall be under no obligation, to pursue such rights and remedies that Buyer may have against a Seller, a Parent or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue

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such other rights or remedies or to collect any payments from such Seller, such Parent or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of such Seller, such Parent or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Buyer against Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon Guarantor and its successors and assigns thereof, and shall inure to the benefit of Buyer, and its permitted successors, endorsees, transferees and assigns, until all the Obligations (subject to the limitations in Section 2(b)) shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Governing Agreements, a Seller or a Parent may be free from any Obligations.

(b) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to Buyer as follows:

(i) Guarantor hereby waives any defense arising by reason of, and any and all right to assert against Buyer any claim or defense based upon, an election of remedies by Buyer that in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against a Seller or any other guarantor for reimbursement or contribution, and/or any other rights of Guarantor to proceed against a Seller, any other guarantor or any other person or security.

(ii) Guarantor is presently informed of the financial condition of each Seller and each Parent and of all other circumstances that diligent inquiry would reveal and that bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed about the financial condition of each Seller and each Parent and of all other circumstances that bear upon the risk of nonpayment and that it will continue to rely upon sources other than Buyer for such information and will not rely upon Buyer for any such information. Guarantor hereby waives the right, if any, to require Buyer to disclose to Guarantor any information that Buyer may now or hereafter acquire concerning such condition or circumstances.

(iii) Guarantor has independently reviewed the Governing Agreements and related agreements and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Guarantee to Buyer, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any liens or security interests of any kind or nature granted by either Seller, either Parent or Guarantor to Buyer, now or at any time and from time to time in the future.

6. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of a Seller or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for such Seller or any substantial part of the property of such Seller, or otherwise, all as though such payments had not been made.

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7. Payments. Guarantor hereby agrees that the Obligations will be paid to Buyer without set-off or counterclaim in U.S. Dollars at the address specified in writing by Buyer.

8. Representations and Warranties. Guarantor represents and warrants that:

(a) It is duly organized, validly existing and in good standing under the laws and regulations of its jurisdiction of incorporation or organization, as the case may be, and is duly licensed, qualified, and in good standing in every state where such licensing or qualification is necessary for the transaction of its business, except where failure to so qualify could not be reasonably likely to have a Material Adverse Effect. It 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 has the power to execute, deliver, and perform its obligations under this Guarantee and the other Governing Agreements.

(b) This Guarantee has been duly executed and delivered by it, for good and valuable consideration. This Guarantee constitutes the legal, valid and binding obligations of it, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or moratorium and other limitations on creditors’ rights generally and equitable principles.

(c) Neither the execution and delivery of this Guarantee nor compliance by it with the terms, conditions and provisions of this Guarantee will conflict with or result in a breach of any of the terms, conditions or provisions of (A) its organizational documents, (B) any contractual obligation to which it is now a party or constitute a default thereunder, or result thereunder in the creation or imposition of any lien upon any of its assets, (C) any judgment or order, writ, injunction, decree or demand of any court applicable to it, or (D) any applicable Requirement of Law, in the case of clauses (B) or (C) above, to the extent that such conflict or breach would have a Material Adverse Effect upon its ability to perform its obligations hereunder.

(d) There is no action, suit, proceeding, investigation, or arbitration pending or, to Guarantor’s Knowledge, threatened in writing against it, any of its Affiliates or any of their respective assets that may result in a Material Adverse Effect. It is in compliance in all material respects with all Requirements of Law. Neither it nor any of its Affiliates 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.

(e) Guarantor’s execution and delivery of this Guarantee and its compliance with the terms and provisions hereof will not contravene or conflict with or result in the creation or imposition of any lien upon any of the property or assets of it pursuant to the terms of any indenture, mortgage, deed of trust, or other material agreement or instrument to which it is a party or by which it may be bound, or to which it may be subject. No consent, approval, authorization, or order of any third party is required in connection with the execution and delivery by it of this Guarantee or to consummate the transactions contemplated hereby that has not already been obtained.

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(f) No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for filings, recordings or registrations already made or to be made in connection with Guarantor entering into this Guarantee), or exemption by, any Governmental Authority is required to authorize, or is required in connection with, (A) the execution, delivery and performance of this Guarantee, (B) the legality, validity, binding effect or enforceability of this Guarantee against it or (C) the consummation of the transactions contemplated by this Guarantee.

(g) Except as disclosed in writing to Buyer prior to the Closing Date, (i) Guarantor has timely filed (taking into account all applicable extensions) all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes, assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, that have become due and payable except to the extent such amounts are being contested in good faith by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, (ii) there is no material claim relating to any such material taxes now pending that was made in writing by any Governmental Authority and that is not being contested in good faith as provided above, and (iv) Guarantor has not entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes. (other than ordinary course extensions of time within which to file tax returns).

(h) Except as disclosed in writing to Buyer prior to the Closing Date, there are no final non-appealable judgments against Guarantor unsatisfied of record in any court located in the United States of America in excess of $15,000,000 and no Act of Insolvency has ever occurred with respect to it.

Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by it on and as of the Closing Date and on each Purchase Date under the Repurchase Agreement.

9. Financial Covenants. Guarantor shall maintain the following covenants at all times following the Closing Date until the Repurchase Obligations have been paid in full:

(a) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Guarantor’s EBITDA during the previous four (4) fiscal quarters to (ii) Guarantor’s Fixed Charges during the same such previous four (4) fiscal quarters shall not be less than 1.40 to 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 the applicable fiscal quarter.

(b) Minimum Tangible Net Worth. Guarantor’s Tangible Net Worth shall not fall below the sum of (i) five hundred twenty five million dollars ($525,000,000) plus (ii) seventy-five percent (75%) of the net cash proceeds of any equity issuance by Guarantor that occurs after the Closing Date.

(c) Minimum Cash Liquidity. Guarantor’s Cash Liquidity shall not fall below the greater of (i) ten million dollars ($10,000,000) or (ii) five percent (5%) of Guarantor’s Recourse Indebtedness.

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(d) Maximum Indebtedness. The ratio, expressed as a percentage, the numerator of which shall equal Guarantor’s and its Subsidiaries’ Indebtedness and the denominator of which shall equal Guarantor’s and its Subsidiaries Total Assets, shall not exceed eighty percent (80%).

Guarantor’s compliance with the covenants set forth in this paragraph 9 must be evidenced by the financial statements and by a Covenant Compliance Certificate (which may be delivered by Guarantor) in respect of the financial quarter most recently ended, in the form of Exhibit XVI to the Repurchase Agreement furnished together therewith, as provided by Sellers to Buyer pursuant to Article 11(j) of the Repurchase Agreement, and compliance with all such covenants are subject to continuing verification by Buyer.

10. Further Covenants of Guarantor.

(a) Taxes. Guarantor has timely filed (taking into account all applicable extensions) all required federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes, assessments, fees, and other governmental charges payable by it, or with respect to any of its properties or assets, that have become due and payable except to the extent such amounts are being contested in good faith by appropriate proceedings diligently conducted and for which appropriate reserves have been established in accordance with GAAP. There is no material claim relating to any such material taxes now pending that was made in writing by any Governmental Authority and that is not being contested in good faith as provided above. Guarantor has not entered into any agreement or waiver or been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes (other than ordinary course extensions of time within which to file tax returns).

(b) Patriot Act.

(i) Guarantor is in compliance, in all material respects, with the (A) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other applicable enabling legislation or executive order relating thereto, and (B) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). To Guarantor’s Knowledge, no part of the proceeds of any Transaction will be used, directly or 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 the United States Foreign Corrupt Practices Act of 1977, as amended.

(ii) Guarantor agrees that, from time to time upon the prior written request of Buyer, it shall execute and deliver such further documents, provide such additional information and reports and perform such other acts as Buyer may reasonably request in order to insure compliance with the provisions hereof (including, without limitation, compliance with the USA Patriot Act of 2001 and to fully effectuate the purposes of this Agreement; provided, however, that nothing in this Section 10(a) shall be construed as requiring Buyer to conduct any inquiry or

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decreasing Guarantor’s responsibility for its statements, representations, warranties or covenants hereunder. In order to enable Buyer and its Affiliates to comply with any anti-money laundering program and related responsibilities including, but not limited to, any obligations under the USA Patriot Act of 2001 and regulations thereunder, Guarantor on behalf of itself and its Affiliates represents to Buyer and its Affiliates that neither Guarantor, nor, to Guarantor’s Knowledge, any of its Affiliates, is a Prohibited Investor, and Guarantor is not acting on behalf of or for the benefit of any Prohibited Investor. Guarantor agrees to promptly notify Buyer or a person appointed by Buyer to administer their anti-money laundering program, if applicable, of any change in information affecting this representation and covenant.

(c) Office of Foreign Assets Control. Guarantor warrants, represents and covenants that neither Guarantor nor any of its Affiliates are or will be an entity or person (A) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”); (B) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designed National and Blocked Persons,” (C) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO 13224; or (D) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in (A) through (D) above are herein referred to as a “Prohibited Person”). Guarantor covenants and agrees that neither it nor any of its Affiliates will knowingly (1) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person or (2) engage in or conspire to engage in any transaction that evades or avoids or that the purpose of evading or avoiding any of the prohibitions of EO 13224. Guarantor further covenants and agrees to deliver to Buyer any such certification or other evidence as may be requested by Buyer in its sole and absolute discretion, confirming that neither it nor any of its Affiliates is a Prohibited Person and neither Guarantor nor any of its Affiliates has knowingly engaged in any business transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person.

(d) Financial Reporting. Guarantor shall provide, or to cause to be provided, to Buyer the following financial and reporting information:

(i) Within forty-five (45) calendar days after the last day of each of the first three fiscal quarters in any fiscal year, a quarterly reporting package substantially in the form of Exhibit III attached to the Repurchase Agreement;

(ii) Within ninety (90) calendar days after the last day of its fiscal year, an annual reporting package substantially in the form of Exhibit IV attached to the Repurchase Agreement; and

(iii) Upon Buyer’s written request, copies of Guarantor’s consolidated Federal Income Tax returns, if any, delivered within thirty (30) days after the earlier of (A) filing or (B) the last filing extension period.

(e) Compliance with Obligations and Laws. Guarantor shall at all times (i) comply with all material contractual obligations, (ii) comply in all respects with all laws, ordinances, rules, regulations and orders (including, without limitation, environmental laws) of

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any Governmental Authority or any other federal, state, municipal or other public authority having jurisdiction over Guarantor or any of its assets and maintain and preserve its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business.

(f) Books and Records. 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, and set aside on its books from its earnings for each fiscal year all such proper reserves in accordance with GAAP.

(g) Change of Name; Place of Business. Guarantor shall advise Buyer in writing of the opening of any new chief executive office or the closing of any such office of Guarantor and of any change in Guarantor’s name or the places where the books and records are held not less than fifteen (15) Business Days prior to taking any such action.

11. Right of Set-off. Guarantor hereby irrevocably authorizes Buyer and its Affiliates, upon the occurrence of and during the continuance of an Event of Default, at any time and from time to time without notice to Guarantor, any such notice being expressly waived by Guarantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Buyer to or for the credit or the account of Guarantor, or any part thereof in such amounts as Buyer may elect, against and on account of the obligations and liabilities of Guarantor to Buyer hereunder and claims of every nature and description of Buyer against Guarantor, in any currency, arising under any Governing Agreement, as Buyer may elect, whether or not Buyer has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Buyer shall notify Guarantor promptly of any such set-off and the application made by Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of Buyer under this paragraph are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the Buyer may have.

12. Severability. Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

13. Paragraph Headings. The paragraph headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

14. No Waiver; Cumulative Remedies. Buyer shall not by any act (except by a written instrument pursuant to paragraph 15 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default, event of default or in any breach of any of the terms and conditions hereof. No failure to

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exercise, nor any delay in exercising, on the part of Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that Buyer would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

15. Waivers and Amendments; Successors and Assigns; Governing Law. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Buyer, except that any provision of this Guarantee may be waived by Buyer in a letter or agreement specifically waiving such terms and executed solely by Buyer. This Guarantee shall be binding upon the heirs, personal representatives, successors and assigns of Guarantor and shall inure to the benefit of Buyer, and their respective successors and assigns. THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THE INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW) APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED IN SUCH STATE. THIS CHOICE OF LAW IS MADE PURSUANT TO NEW YORK GENERAL OBLIGATION LAW SECTION 5-1401. THE PARTIES CONSENT TO THE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING IN CONNECTION WITH THIS AGREEMENT AND WAIVE ANY OBJECTION AS TO VENUE IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK. THIS CHOICE OF VENUE IS MADE PURSUANT TO NEW YORK GENERAL OBLIGATION LAW SECTION 5-1402.

16. Notices. Notices by Buyer to Guarantor shall be given in writing, addressed to Guarantor at the address or transmission number set forth under its signature below and shall be effective for all purposes if hand delivered or 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, with proof of delivery or (d) by email, provided that such emailed notice must also be delivered by one of the means set forth above, to the address the address or transmission number set forth under its signature below or at such other address and person as shall be designated from time to time by Guarantor, as the case may be, in a written notice to Buyer. A notice shall be deemed to have been given: (w) in the case of hand delivery, at the time of delivery, (x) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day, (y) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day, or (z) in the case of email, upon receipt of confirmation, provided that such emailed notice was also delivered as required in this Section 16. If Guarantor receives a notice that does not comply with the technical requirements for notice under this Section 16 it may elect to waive any deficiencies and treat the notice as having been properly given.

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17. SUBMISSION TO JURISDICTION; WAIVERS. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(A) SUBMITS IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER LOAN DOCUMENTS TO WHICH GUARANTOR IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO GUARANTOR AT ITS ADDRESS SET FORTH UNDER GUARANTOR’S SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED IN WRITING BY GUARANTOR; AND

(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

18. Integration. This Guarantee represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations by Buyer relative to the subject matter hereof not reflected herein.

19. Execution. This Guarantee 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. Delivery by telecopier or other electronic transmission (including a .pdf e-mail transmission) of an executed counterpart of a signature page to this Guarantee shall be effective as delivery of an original executed counterpart of this Guarantee.

20. Acknowledgments. Guarantor hereby acknowledges that:

(a) It has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the related documents;

(b) Buyer has no fiduciary relationship to it, and the relationship between Buyer and Guarantor are solely that of surety and creditor; and

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(c) No joint venture exists between or among any of Buyer, on the one hand, and either Seller, either Parent and/or Guarantor on the other hand.

21. WAIVERS OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

BLACKSTONE MORTGAGE TRUST, INC., a Maryland Corporation
By:	Douglas Armer
Name:	Douglas Armer
Title:	Head of Capital Markets and Treasurer

Address:

345 Park Avenue

New York, NY 10154

Attention: Douglas Armer

Telephone: (212) 583-5000

Email: BXMTJPMRepo@blackstone.com

with a copy to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036-8704

Attention: David C. Djaha, Esq.

Telephone: (212) 841-0489

Email: David.Djaha@ropesgray.com

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EX-21.1

Exhibit 21.1

Entity	Jurisdiction of                 Incorporation	D/B/A             Jurisdiction
42-16 Partners, LLC	Delaware
345-40 Partners, LLC	Delaware
616 First Avenue 2013 Finance, LLC	Delaware
Bellevue C2 Holding, LLC	Delaware
Capital Trust RE CDO 2004-1 Corp.	Delaware
Capital Trust RE CDO 2004-1 Ltd.	Cayman Islands
Capital Trust RE CDO Depositor	Delaware
CNL Hotel JV, LLC	Delaware
CT CDO III Corp.	Delaware
CT CDO III Ltd.	Cayman Islands
CT Legacy Asset, LLC	Delaware
CT Legacy Cayman, Ltd.	Cayman Islands
CT Legacy Holdings, LLC	Delaware
CT Legacy JPM SPV, LLC	Delaware
CT Legacy Manager, LLC	Delaware
CT Legacy REIT Holdings, LLC	Delaware
CT Legacy Series 1 Note Issuer, LLC	Delaware
CT Legacy Series 2 Note Issuer, LLC	Delaware
CT Legacy LXR Holdings, LLC	Delaware
CT OPI GP, LLC	Delaware
CT Public Preferred Trust I	Maryland
CT Public Preferred Trust II	Maryland
CT Public Preferred Trust III	Maryland
CT RE CDO 2004-1 Sub, LLC	Delaware
CT XLC Holding, LLC	Delaware
CTOPI Carried Interest Holdings, LLC	Delaware
CTOPI Carried Interest CT Sub 1, LLC	Delaware
CTOPI Carried Interest CT Sub 2, LLC	Delaware
CTOPI Carried Interest CT Sub 3, LLC	Delaware
CTOPI Carried Interest CT Sub 4, LLC	Delaware
Husky Finco, LLC	Delaware
Parlex 1 Finance, LLC	Delaware
Parlex 2 Finance, LLC	Delaware
Parlex 2A Finco, LLC	Delaware
Parlex 3 Finance, LLC	Delaware
Parlex 4 Finance, LLC	Delaware
Parlex 4 UK Finco, LLC	Delaware
Parlex 5 Finco, LLC	Delaware
Parlex 6 UK Finco, LLC	Delaware
SVP 2013 Finance, LLC	Delaware
Tysons Corner Finance 2013, LLC	Delaware
Victor Holdings I, LLC	Delaware

S-1

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-190191) and in the related Prospectuses and on Forms S-8 (Nos. 333-39743, 333-144929, 333-179668 and 333-189806) pertaining to: (i) the Amended and Restated 1997 Long Term Incentive Stock Plan and Amended and Restated 1997 Non-Employee Director Stock Plan; (ii) 2007 Long-Term Incentive Plan; (iii) the 2011 Long-Term Incentive Plan; and (iv) the 2013 Stock Incentive Plan of our report dated February 18, 2014, relating to the 2013 consolidated financial statements and the 2013 information in the financial statement schedule, and the retrospective adjustments to the 2012 and 2011 consolidated financial statements of Blackstone Mortgage Trust, Inc. and subsidiaries (the “Company”) and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Blackstone Mortgage Trust, Inc. for the year ended December 31, 2013.

/s/ Deloitte & Touche LLP

New York, NY

February 18, 2014

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-190191) of Blackstone Mortgage Trust, Inc. (formerly known as Capital Trust, Inc.) and Subsidiaries and in the related Prospectuses and on Forms S-8 (File Nos. 333-39743, 333-144929, 333-179668 and 333-189806) pertaining to: (i) the Amended and Restated 1997 Long Term Incentive Stock Plan and the Amended and Restated 1997 Non-Employee Director Stock Plan; (ii) the 2007 Long-Term Incentive Plan; (iii) the 2011 Long-Term Incentive Plan; and (iv) the 2013 Stock Incentive Plan of our report dated March 26, 2013, with respect to the consolidated financial statements and schedule of Capital Trust, Inc. and Subsidiaries, included in the Annual Report on Form 10-K of Blackstone Mortgage Trust, Inc. for the year ended December 31, 2013.

/s/ Ernst & Young LLP

New York, New York

February 18, 2014

EX-31.1

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 annual report on Form 10-K 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: February 18, 2014

/s/ Stephen D. Plavin

Stephen D. Plavin

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul D. Quinlan, certify that:

1. I have reviewed this annual report on Form 10-K 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: February 18, 2014

/s/ Paul D. Quinlan

Paul D. Quinlan

Chief Financial Officer

EX-32.1

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 Annual Report of Blackstone Mortgage Trust, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 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

February 18, 2014

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-32.2

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 Annual Report of Blackstone Mortgage Trust, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul D. Quinlan, 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/ Paul D. Quinlan

Paul D. Quinlan

Chief Financial Officer

February 18, 2014

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-99.1

Exhibit 99.1

SECTION 13(r) DISCLOSURE

The disclosures reproduced below were initially included in periodic reports filed with the Securities and Exchange Commission (the “SEC”) by The Blackstone Group L.P. (“Blackstone”), with respect to the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013, in accordance with Section 13(r) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of the date Blackstone Mortgage Trust, Inc. (“BXMT”) filed its Form 10-K for the fiscal year ended December 31, 2013 with the SEC, Blackstone had not yet filed its Form 10-K for such period. Therefore the disclosures reproduced below do not include information for the fiscal quarter ended December 31, 2013. Hilton Worldwide, Inc., SunGard Capital Corp., SunGard Capital Corp. II, SunGard Data Systems Inc. and Travelport Limited may be considered affiliates of Blackstone, and therefore affiliates of BXMT. BXMT did not independently verify or participate in the preparation of any of these disclosures.

Blackstone included the following disclosure in its Form 10-Q for the fiscal quarter ended March 31, 2013:

Hilton Worldwide Inc., which may be considered our affiliate, provided the disclosure reproduced below in connection with activities during the first fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“During the reporting period, the Iranian Ministry of Youth and Sports purchased a number of room nights at the Hilton Ankara, Turkey, which is leased by a foreign affiliate of Hilton. Revenue received by Hilton for these hotel stays was approximately $4,360 and net profit was approximately $1,700. During calendar year 2012, the Embassy of Iran purchased a number of room nights at the hotel and organized a concert event in the hotel ballroom. Revenue received by Hilton for the services provided to the Embassy of Iran in 2012 was approximately $11,070 and net profit was approximately $4,300. Hilton believes that the hotel stays were exempt from the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560, pursuant to the International Emergency Economic Powers Act (“IEEPA”). The Hilton Ankara intends to continue engaging in future similar transactions to the extent they remain permissible under IEEPA.

Also during the reporting period, certain individual employees at two Hilton-branded hotels in the United Arab Emirates received routine wage payments as direct deposits to their personal accounts at Bank Melli, an entity identified on the Specially Designated Nationals and Blocked Persons List (“SDN List”) maintained by the Office of Foreign Assets Control in the U.S. Department of the Treasury. In addition, certain individual employees at these hotels received routine wage payments as direct deposits to their personal accounts at Bank Melli during calendar year 2012. Both of these hotels are owned by a third party, staffed by employees of the third-party owner and operated pursuant to a management agreement between the owner and a Hilton affiliate. In each case, these payments originated from the third-party owner’s account to the personal accounts of the employees at their chosen bank. No revenues or net profits are associated with these transactions. Both hotels have advised Hilton that they will discontinue making direct deposits to accounts at Bank Melli.

During the reporting period, several individuals stayed at the DoubleTree Kuala Lumpur, Malaysia, pursuant to a rate agreement between the hotel and Mahan Air, an entity identified on the SDN List. This hotel is staffed by employees of the third-party owner and operated pursuant to a management agreement between the owner and a Hilton affiliate. Under the agreement, which was entered into in the name of the owner, the hotel reserved a number of rooms for Mahan Air crew members at the DoubleTree Kuala Lumpur several times each week. Revenue received by Hilton attributable to Mahan Air crew hotel stays during the reporting period was approximately $1,550. The DoubleTree Kuala Lumpur also reserved a number of rooms for Mahan Air crew members during calendar year 2012. Revenue received by Hilton attributable to Mahan Air crew hotel stays in 2012 was approximately $3,820. Hilton considers its net profit on management fees to be approximately the same as its revenue. The DoubleTree Kuala Lumpur has terminated the agreement and does not intend to engage in any future transactions with Mahan Air.”

SunGard Capital Corp., SunGard Capital Corp. II and SunGard Data Systems Inc. (collectively referred to herein as “SunGard”), which may be considered our affiliates, provided the disclosure reproduced below in connection with activities during the first fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“As previously reported on our Annual Report on Form 10-K for the year ended December 31, 2012, pursuant to Section 13(r)(1)(D)(i) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during 2012 a U.K. subsidiary of ours provided certain limited disaster recovery services and hosted co-location of some hardware at our premises in London for Bank Saderat PLC, a bank incorporated and based in the U.K. Bank Saderat PLC is identified on the U.S. Treasury Department’s List of Specially Designated Nationals and Blocked Persons pursuant to Executive Order No. 13224. Our subsidiary terminated this contract in the first quarter of 2013, and we do not otherwise intend to enter into any Iran-related activity. The gross revenue and net profits attributable to these activities in the first quarter of 2013 were less then £5,000 each.”

Additionally, after Blackstone filed its Form 10-K for fiscal year 2012, SunGard included the disclosure reproduced below in its Form 10-K for fiscal year 2012. We have not independently verified or participated in the preparation of this disclosure.

“Pursuant to Section 13(r)(1)(D)(i) of the Exchange Act, we note that during 2012 a U.K. subsidiary of ours provided certain limited disaster recovery services and hosted co-location of some hardware at our premises in London for Bank Saderat PLC, a bank incorporated and based in the UK. Bank Saderat PLC is identified on the U.S. Treasury Department’s List of Specially Designated Nationals and Blocked Persons pursuant to Executive Order No. 13224. The intent of the services was to facilitate the ability of the UK-based employees of Bank Saderat PLC to continue local operations in the event of a disaster or other unplanned event in the UK, including use of shared work space and recovery of the Bank’s local UK data. The gross revenue and net profits attributable to these activities in 2012 was £16,300 and approximately £5,700, respectively. During 2012, no disaster or unplanned event occurred causing Bank Saderat PLC to make use of our recovery facilities in London, but Bank Saderat PLC did perform annual testing on-site. Our subsidiary has terminated this contract in the first quarter of 2013, and we do not otherwise intend to enter into any Iran-related activity.”

Travelport Limited, which may be considered our affiliate, provided the disclosure reproduced below in connection with activities during the first fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“As part of our global business in the travel industry, we provide certain passenger travel-related GDS and airline IT services to Iran Air. We also provide certain airline IT services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant to a statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the arrangement of travel for individuals.”

Travelport has not provided us with gross revenues and net profits attributable to the activities described above.

Blackstone included the following disclosure in its Form 10-Q for the fiscal quarter ended June 30, 2013:

Hilton Worldwide Inc., which may be considered our affiliate, provided the disclosure reproduced below in connection with activities during the second fiscal quarter of 2013. We have not independently verified or participated in the preparation of this disclosure.

“As previously disclosed, during the reporting period, certain individual employees at two Hilton-branded hotels in the United Arab Emirates received routine wage payments as direct deposits to their personal accounts at Bank Melli, an entity identified on the Specially Designated Nationals and Blocked Persons List (“SDN List”) maintained by the Office of Foreign Assets Control in the U.S. Department of the Treasury. Both of these hotels are owned by a third party, staffed by employees of the third-party owner and operated pursuant to a management agreement between the owner and a Hilton affiliate. In each case, these payments originated from the third-party owner’s account to the personal accounts of the employees at their chosen bank. During the reporting period, both hotels discontinued making direct deposits to accounts at Bank Melli. No revenues or net profits are associated with these transactions.

Also as previously disclosed, during the reporting period, several individuals stayed at the DoubleTree Kuala Lumpur, Malaysia, pursuant to a rate agreement between the hotel and Mahan Air, an entity identified on the SDN List. The rate agreement was terminated as of May 2, 2013. This hotel is staffed by employees of the third-party owner and operated pursuant to a management agreement between the owner and a Hilton affiliate. Under the rate agreement, which was entered into in the name of the owner, the hotel reserved a number of rooms for Mahan Air crew members at the DoubleTree Kuala Lumpur several times each week. Revenue and net profit received by Hilton attributable to Mahan Air crew hotel stays during the reporting period was approximately $430.”

Travelport Limited, which may be considered our affiliate, included the disclosure reproduced below in its Form 10-Q for the fiscal quarter ended June 30, 2013. We have not independently verified or participated in the preparation of this disclosure.

“As part of our global business in the travel industry, we provide certain passenger travel related GDS and airline IT Solutions services to Iran Air. We also provide certain airline IT Solutions services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant to a statutory exemption in the International Emergency Economic Powers Act permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control (“OFAC”). Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the arrangement of travel for individuals.

Prior to and during the reporting period, we also provided airline IT Solutions services to Syrian Arab Airlines. These services were generally understood to be permissible under the same statutory travel exemption. The services were terminated following the May 2013 action by OFAC to designate this airline as a Specially Designated Global Terrorist pursuant to the Global Terrorism Sanctions Regulations.

The gross revenue and net profit attributable to these activities in the quarter ended June 30, 2013 were approximately $248,000 and $176,000, respectively.”

Blackstone included the following disclosure in its Form 10-Q for the fiscal quarter ended September 30, 2013:

Travelport Limited, which may be considered our affiliate, included the disclosure reproduced below in its Form 10-Q for the fiscal quarter ended September 30, 2013. We have not independently verified or participated in the preparation of this disclosure.

“As part of our global business in the travel industry, we provide certain passenger travel related GDS and Airline IT Solutions services to Iran Air. We also provide certain Airline IT Solutions services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant to a statutory exemption in the International Emergency Economic Powers Act permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control (“OFAC”). Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the arrangement of travel for individuals.

The gross revenue and net profit attributable to these activities in the quarter ended September 30, 2013 were approximately $164,000 and $122,000, respectively.”

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Equity (Tables)

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Schedule of Primary Components of Accumulated Other Comprehensive Loss

The following table details the primary components of accumulated other comprehensive loss as of, and for the years ended, December 31, 2012 and 2011($ in thousands):

Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2010	$	(37,914	)	$	165		$	(16,800	)	$	4,087		$	(50,462	)
Consolidation of additional securitization vehicles(1)		—			—			538			—			538
Unrealized gain on derivative financial instruments		5,453			—			—			—			5,453
Ineffective portion of cash flow hedges(2)		5,038			—			—			—			5,038
Amortization of net unrealized gains on securities		—			—			—			(908	)		(908	)
Amortization of net deferred gains on settlement of swaps		—			(109	)		—			—			(109	)
Other-than-temporary impairments of securities(3)		—			—			(326	)		—			(326	)
Allocation to non-controlling interest		—			—			10			182			192
Total as of December 31, 2011		(27,423	)		56			(16,578	)		3,361			(40,584	)
Unrealized gain on derivative financial instruments		8,367			—			—			—			8,367
Ineffective portion of cash flow hedges(4)		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(775	)		(775	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities(3)		—			—			678			—			678
Deconsolidation of subsidiaries(5)		16,575			—			15,900			(2,586	)		29,889
Total as of December 31, 2012	$	—		$	—		$	—		$	—		$	—

(1) We began consolidating an additional securitization vehicle in the third quarter of 2011, which was previously accounted for as part of our legacy securities portfolio. This security had previously been other-than-temporarily impaired, a portion of which was recorded in accumulated other comprehensive income, and was therefore eliminated in consolidation.

(2) As a result of significant floating rate debt obligation repayments, a portion of our legacy portfolio interest rate swaps was deemed ineffective in the second quarter of 2011 and these were no longer designated as hedging instruments. As a result, a portion of accumulated other comprehensive income was reclassified into earnings each period to reflect the non-hedge designation.

(3) Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments.

(4) As a result of the deconsolidation of CT Legacy Asset in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Asset was reclassified to interest expense.

(5) As further described in Note 1, we deconsolidated various subsidiaries during 2012. As a result, the balances of accumulated other comprehensive income related to these subsidiaries are no longer included in our consolidated financial statements.

Schedule of Components of Non-Controlling Interests

The following table details the components of non-controlling interests in CT Legacy Partners ($ in thousands):

	December 31, 2013
Restricted cash	$	10,096
Loans receivable, at fair value		40,665
Accrued interest receivable, prepaid expenses, and other assets		16,118
Accounts payable, accrued expenses, and other liabilities		(378	)
CT Legacy Partners equity	$	66,501
Equity interests owned by Blackstone Mortgage Trust, Inc.		(27,660	)
Non-controlling interests in CT Legacy Partners	$	38,841

Schedule of Details Movement in Our Outstanding Class A Common Stock and Restricted Class A Common Stock

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

	Year Ended December 31,
Common Stock Outstanding(1)(2)(3)	2013		2012		2011
Beginning balance		3,016,407		2,277,344		2,243,490
Issuance of class A common stock		25,875,000		669,047		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		700,000		36,493		26,161
Issuance of deferred stock units		11,477		33,523		7,693
Ending balance		29,602,884		3,016,407		2,277,344

(1) Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2) Deferred stock units held by members of our board of directors totalled 101,233, 89,754, and 56,234 as of December 31, 2013, 2012, and 2011, respectively.

(3) Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

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 for the indicated periods ($ in thousands, except per share data):

	Year Ended December 31,
	2013		2012		2011
Net income	$	15,032	$	181,024	$	258,142
Weighted-average shares outstanding(1)		18,520,052		2,345,943		2,266,043
Warrants and options outstanding for the purchase of class A common stock(2)		—		129,351		129,000
Weighted-average shares outstanding, diluted		18,520,052		2,475,294		2,395,043
Per share amount, basic	$	0.81	$	77.16	$	113.92
Per share amount, diluted	$	0.81	$	73.13	$	107.78

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split we effected as of May 6, 2013. See above for further discussion.

(2) As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

Schedule of Basic and Diluted Earnings Per Share, Continuing Operations

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

	Year Ended December 31,
	2013			2012			2011
Income from continuing operations	$	25,424		$	282,213		$	253,209
Net income attributable to non-controlling interests		(10,392	)		(98,780	)		5,823
Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.		15,032			183,433			259,032
Weighted-average shares outstanding(1)		18,520,052			2,345,943			2,266,043
Warrants and options outstanding for the purchase of class A common stock(2)		—			129,351			129,000
Weighted-average shares outstanding, diluted		18,520,052			2,475,294			2,395,043
Per share amount, basic	$	0.81		$	78.19		$	114.31
Per share amount, diluted	$	0.81		$	74.16		$	108.17

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

(2) As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

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Loans Receivable - Types of Loans in Loan Portfolio, as well as Property Type and Geographic Distribution of Properties Securing these Loans (Parenthetical) (Detail) (Senior Mortgages Loans [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2013
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contiguous subordinated loans	$ 68.6

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Cash and Cash Equivalents, Including Restricted Cash - Schedule of Cash and Cash Equivalents, Including Restricted Cash Balances (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Credit Rating [Line Items]
Cash and cash equivalents	$ 52,342	$ 15,423	$ 34,818	$ 24,449
Restricted cash	10,096	14,246
Total	62,438	29,669
Bank of America [Member] | A-1 Credit Rating [Member]
Credit Rating [Line Items]
Cash and cash equivalents	52,342	15,423
Restricted cash	$ 10,096	$ 14,246

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Debt Obligations - Repurchase Obligations Outstanding (Detail) (Repurchase Agreements [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Revolving Repurchase Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	$ 1,614,525
Principal Balance	1,411,355
Net Book Value	1,401,937
Potential	1,082,177
Current	863,622
Available	218,555
Asset-Specific Repurchase Agreements [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	1,902,879
Principal Balance	1,746,212
Net Book Value	1,735,355
Potential	1,327,908
Current	1,109,353
Available	218,555
Bank of America [Member] | Revolving Repurchase Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000
Principal Balance	355,981
Net Book Value	352,995
Potential	280,500
Current	271,320
Available	9,180
Citibank [Member] | Revolving Repurchase Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	500,000
Principal Balance	613,339
Net Book Value	609,236
Potential	460,765
Current	334,692
Available	126,073
JP Morgan [Member] | Revolving Repurchase Facilities [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	614,525
Principal Balance	442,035
Net Book Value	439,706
Potential	340,912
Current	257,610
Available	83,302
Wells Fargo [Member] | Asset-Specific Repurchase Agreements [Member]
Line of Credit Facility [Line Items]
Maximum Facility Size	288,354
Principal Balance	334,857
Net Book Value	333,418
Potential	245,731
Current	245,731
Available

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Loans Receivable - Principal Balance and Net Book Value of Loans Receivable Based on Internal Risk Ratings (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 SecurityLoan	Dec. 31, 2012 SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book value, net	$ 2,047,223	$ 141,500
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	31	7
Principal Balance	2,076,411	164,180
Book value, net	2,047,223	141,500
Risk Rating 1-3 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	29	2
Principal Balance	2,038,863	47,000
Book value, net	2,020,223	47,000
Risk Rating 4-5 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans		2
Principal Balance		92,500
Book value, net		92,500
Risk Rating 6-8 [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	2	3
Principal Balance	37,548	24,680
Book value, net	$ 27,000	$ 2,000

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Equity - Schedule of Details Movement in Our Outstanding Class A Common Stock and Restricted Class A Common Stock (Detail)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Equity [Abstract]
Beginning balance	3,016,407	2,277,344	2,243,490
Issuance of class A common stock	25,875,000	669,047
Issuance of restricted class A common stock, net	700,000	36,493	26,161
Issuance of deferred stock units	11,477	33,523	7,693
Ending balance	29,602,884	3,016,407	2,277,344

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Summary of Significant Accounting Policies - Additional Information (Detail) (Commercial Real Estate Portfolio Segment [Member])	12 Months Ended
	Dec. 31, 2013
Risk Level, Low [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Probability of default or principal loss - high	15.00%
Risk Level, Medium [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Probability of default or principal loss - high	33.00%
Risk Level, High [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Probability of default or principal loss - high	67.00%

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Cash and Cash Equivalents, Including Restricted Cash (Tables)

12 Months Ended

Dec. 31, 2013

Cash And Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents, Including Restricted Cash Balances

The following table provides details of our cash and cash equivalents, including restricted cash balances ($ in thousands):

Asset Category	Depository		Credit Rating(1)		December 31, 2013		December 31, 2012
Cash and cash equivalents		Bank of America		A-1	$	52,342	$	15,423
Restricted cash		Bank of America		A-1		10,096		14,246
					$	62,438	$	29,669

(1) Represents the short-term credit rating for the Bank of America, N.A. legal entity as issued by Standard & Poor’s as of December 31, 2013.

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Equity - Schedule of Details Movement in Our Outstanding Class A Common Stock and Restricted Class A Common Stock (Parenthetical) (Detail)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Equity [Abstract]
Deferred stock units held by directors	101,233	89,754	56,234

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Participations Sold - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Participants
Participating Mortgage Loans [Line Items]
Number of loan participations sold	1
Participation sold, balance	$ 90,000
Participation sold, cash coupon rate, description	LIBOR plus 5.12%
Participation sold, weighted average yield, description	LIBOR plus 5.26%
LIBOR [Member]
Participating Mortgage Loans [Line Items]
Participation sold, cash coupon rate	5.12%
Participation sold, weighted average yield	5.26%

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Fair Values - Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Valuation allowance on loans held-for-sale	$ (1,259)		$ 1,456
Gain on investments at fair value		(6,000)
Loans Held-for-Sale, Net [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period
Consolidation of CT Legacy Partners
Transfer from loans receivable, net	2,000
Transfer from loans receivable, at fair value
Deferred interest
Proceeds from investments	(3,259)
Valuation allowance on loans held-for-sale	1,259
Gain on investments at fair value
End of Period
Loans Receivable [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period
Consolidation of CT Legacy Partners	150,332
Transfer from loans receivable, net
Transfer from loans receivable, at fair value	(6,813)
Deferred interest	984
Proceeds from investments	(110,654)
Valuation allowance on loans held-for-sale
Gain on investments at fair value	6,816
End of Period	40,665
Other Assets, at Fair Value [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period
Consolidation of CT Legacy Partners	14,448
Transfer from loans receivable, net
Transfer from loans receivable, at fair value	6,813
Deferred interest
Proceeds from investments	(7,981)
Valuation allowance on loans held-for-sale
Gain on investments at fair value	516
End of Period	13,796
Investment in CT Legacy Asset [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning of Period	132,000
Consolidation of CT Legacy Partners	(132,000)
Transfer from loans receivable, net
Transfer from loans receivable, at fair value
Deferred interest
Proceeds from investments
Valuation allowance on loans held-for-sale
Gain on investments at fair value
End of Period

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Loans Receivable - Allocation of Loans Receivable by Loan Type and Internal Risk Ratings (Parenthetical) (Detail) (Senior Mortgages Loans [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2013
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contiguous subordinated loans	$ 68.6

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Equity - Schedule of Primary Components of Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning			$ 798
Consolidation of additional securitization vehicles		(4,360)
Amortization of net deferred gains on settlement of swaps	(56)	(109)
Deconsolidation of subsidiaries	29,889
Balance, ending			798
Mark-to-Market on Interest Rate Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning	(27,423)	(37,914)
Unrealized gain on derivative financial instruments	8,367	5,453
Ineffective portion of cash flow hedges	2,481	5,038
Deconsolidation of subsidiaries	16,575
Balance, ending		(27,423)
Deferred Gains on Settled Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning	56	165
Amortization of net deferred gains on settlement of swaps	(56)	(109)
Balance, ending		56
Other- Than-Temporary Impairments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning	(16,578)	(16,800)
Consolidation of additional securitization vehicles		538
Other-than-temporary impairments of securities	678	(326)
Allocation to non-controlling interest		10
Deconsolidation of subsidiaries	15,900
Balance, ending		(16,578)
Unrealized Gains on Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning	3,361	4,087
Amortization of net unrealized gains on securities	(775)	(908)
Allocation to non-controlling interest		182
Deconsolidation of subsidiaries	(2,586)
Balance, ending		3,361
Accumulated Other Comprehensive Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning	(40,584)	(50,462)
Consolidation of additional securitization vehicles		538
Unrealized gain on derivative financial instruments	8,367	5,453
Ineffective portion of cash flow hedges	2,481	5,038
Amortization of net unrealized gains on securities	(775)	(908)
Amortization of net deferred gains on settlement of swaps	(56)	(109)
Other-than-temporary impairments of securities	678	(326)
Allocation to non-controlling interest		192
Deconsolidation of subsidiaries	29,889
Balance, ending		$ (40,584)

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Stock-Based Incentive Plans - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2013 Plans	Dec. 31, 2012	Dec. 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of benefit plans	5
Issuance of restricted class A common stock, net	700,000	36,493	26,161
Restricted Stock [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Issuance of restricted class A common stock, net	700,000
Restricted shares, vesting period	3 years
2013 Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Maximum number of shares available under plan	1,450,224
2013 Manager Plan [Member] | Maximum [Member] | Class A Common Stock [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Maximum number of shares available under plan	2,160,106

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Equity - Schedule of Basic and Diluted Earnings Per Share, Continuing Operations (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Abstract]
Income from continuing operations	$ 25,424	$ 282,213	$ 253,209
Net income attributable to non-controlling interests	(10,392)	(98,780)	5,823
Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.	$ 15,032	$ 183,433	$ 259,032
Weighted-average shares outstanding	18,520,052	2,345,943	2,266,043
Warrants and options outstanding for the purchase of class A common stock		129,351	129,000
Weighted-average shares outstanding, diluted	18,520,052	2,475,294	2,395,043
Per share amount, basic	$ 0.81	$ 78.19	$ 114.31
Per share amount, diluted	$ 0.81	$ 74.16	$ 108.17

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Fair Values - Assets that are Recorded at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Measured on a recurring basis
Loans receivable, at fair value	$ 40,665
Investment in CT Legacy Asset		132,000
Recurring [Member] | Fair Value [Member]
Measured on a recurring basis
Loans receivable, at fair value	40,665
Other assets, at fair value	15,740
Investment in CT Legacy Asset		132,000
Recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Measured on a recurring basis
Loans receivable, at fair value
Other assets, at fair value
Investment in CT Legacy Asset
Recurring [Member] | Other Observable Inputs (Level 2) [Member]
Measured on a recurring basis
Loans receivable, at fair value
Other assets, at fair value	1,944
Investment in CT Legacy Asset
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Measured on a recurring basis
Loans receivable, at fair value	40,665
Other assets, at fair value	13,796
Investment in CT Legacy Asset		132,000
Non-recurring [Member] | Fair Value [Member]
Measured on a non-recurring basis
Impaired loans receivable		2,000
Non-recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Measured on a non-recurring basis
Impaired loans receivable
Non-recurring [Member] | Other Observable Inputs (Level 2) [Member]
Measured on a non-recurring basis
Impaired loans receivable
Non-recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Measured on a non-recurring basis
Impaired loans receivable		$ 2,000

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Equity - Schedule of Components of Non-Controlling Interests (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Restricted cash	$ 10,096	$ 14,246
Loans receivable, at fair value	40,665
Accrued interest receivable, prepaid expenses, and other assets	39,974	5,868
Accounts payable, accrued expenses and other liabilities	(56,972)	(21,209)
Non-controlling interests in CT Legacy Partners	38,841	80,009
Non-controlling Interests [Member]
Restricted cash	10,096
Loans receivable, at fair value	40,665
Accrued interest receivable, prepaid expenses, and other assets	16,118
Accounts payable, accrued expenses and other liabilities	(378)
CT Legacy Partners equity	66,501
Equity interests owned by Blackstone Mortgage Trust, Inc.	(27,660)
Non-controlling interests in CT Legacy Partners	$ 38,841

XML

Debt Obligations - Repurchase Obligations Outstanding (Parenthetical) (Detail) (Repurchase Agreements [Member]) In Thousands, unless otherwise specified				12 Months Ended
	Dec. 31, 2013 Revolving Repurchase Facilities [Member] JP Morgan [Member] USD ($)	Dec. 31, 2013 Revolving Repurchase Facilities [Member] JP Morgan [Member] EUR (€)	Dec. 31, 2013 Revolving Repurchase Facilities [Member] Maximum [Member] JP Morgan [Member] USD ($)	Dec. 31, 2013 Asset-Specific Repurchase Agreements [Member] JP Morgan [Member] USD ($)	Dec. 31, 2013 Asset-Specific Repurchase Agreements [Member] Wells Fargo [Member] Agreement
Line of Credit Facility [Line Items]
Facility size	$ 252,500	€ 153,000	$ 250,000	$ 112,000
Repurchase Date				Jun. 27, 2014
Number of asset-specific repurchase agreements					4

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Fair Values

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Values

18. FAIR VALUES

Assets Recorded at Fair Value

The following table summarizes our assets that are recorded at fair value as of December 31, 2013 ($ in thousands):

	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis
Loans receivable, at fair value	$	40,665	$	—	$	—	$	40,665
Other assets, at fair value(1)	$	15,740	$	—	$	1,944	$	13,796
Measured on a non-recurring basis
Impaired loans receivable(2)	$	—	$	—	$	—	$	—

(1) Other assets include securities, equity investments, and other receivables carried at fair value.

(2) All impaired loans receivable have a 100% loan loss reserve and are held by CT CDO I as of December 31, 2013.

The following table summarizes our assets that are recorded at fair value as of December 31, 2012 ($ in thousands):

	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis
Investment in CT Legacy Asset	$	132,000	$	—	$	—	$	132,000
Measured on a non-recurring basis
Impaired loans receivable(1)	$	2,000	$	—	$	—	$	2,000

(1) Impaired loans receivable have a 92% loan loss reserve and are held by consolidated securitization vehicles as of December 31, 2012.

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Loans held-for-sale, net			Loans receivable, at fair value			Other assets at fair value(1)			Investment in CT Legacy Asset
December 31, 2012	$	—		$	—		$	—		$	132,000
Consolidation of CT Legacy Partners		—			150,332			14,448			(132,000	)
Transfer from loans receivable, net		2,000			—			—			—
Transfer from loans receivable, at fair value		—			(6,813	)		6,813			—
Deferred interest		—			984			—			—
Proceeds from investments		(3,259	)		(110,654	)		(7,981	)		—
Adjustments to fair value included in earnings
Valuation allowance on loans held-for-sale		1,259			—			—			—
Gain on investments at fair value		—			6,816			516			—
December 31, 2013	$	—		$	40,665		$	13,796		$	—

(1) Other assets include securities, equity investments, and other receivables carried at fair value.

The following describes the key assumptions used in arriving at the fair value of each type of asset that was recorded at fair value as of December 31, 2013 and 2012. There were no liabilities recorded at fair value as of December 31, 2013 or 2012. Refer to Note 2 for further discussion regarding fair value measurement.

Loans held-for-sale – Loans held-for-sale are valued based on expected net proceeds from a sale of the asset.

Loans receivable, at fair value – The following table lists the range of key assumptions for each type of loans receivable as of December 31, 2013 ($ in millions):

	Assumption Ranges for Significant Unobservable Inputs (Level  3)(1)							Book Value Sensitivity to a 100 bp Discount Rate Increase
Collateral Type	Discount Rate		Recovery Percentage(2)			Book Value
Hotel		7%		100	%	$	15.0		(1.4	%)
Office		6% – 15%		100	%		25.7		(0.3	%)
						$	40.7

(1) Excludes loans for which there is no expectation of future cash flows.

(2) Represents the proportion of the principal expected to be collected relative to the loan balances as of December 31, 2013.

Other assets, at fair value – Our other assets balance include certain CMBS, CDO, equity investments, and other receivables and are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans receivable – CT CDO I has one impaired loan receivable, which is a subordinate loan with a principal balance of $10.5 million. This hotel loan is in maturity default as of December 31, 2013, with no expectation of recovery or repayment.

Investment in CT Legacy Asset – We elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset as of December 31, 2012. We arrived at the fair value of our Investment in CT Legacy Asset by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. The key assumptions for significant unobservable inputs were (i) a discount rate of 15% and (ii) loss severities applied to the underlying assets.

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 carrying amount, face amount, and approximate fair value of the financial instruments described in Note 2 ($ in thousands):

	December 31, 2013						December 31, 2012
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	52,342	$	52,342	$	52,342	$	15,423	$	15,423	$	15,423
Restricted cash		10,096		10,096		10,096		14,246		14,246		14,246
Loans receivable, net		2,047,223		2,076,411		2,058,699		141,500		164,180		133,682
Financial liabilities
Secured notes		—		—		—		8,497		8,497		7,374
Repurchase obligations		1,109,353		1,109,353		1,109,353		—		—		—
Convertible notes, net		159,524		172,500		181,772		—		—		—
Securitized debt obligations		40,181		40,181		25,696		139,184		139,184		89,880
Participations sold		90,000		90,000		90,304		—		—		—

Estimates of fair value for cash, cash equivalents and convertible notes are measured using observable, quoted market prices, or Level 1 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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Loans Receivable - Activity Relating to Loans Receivable (Detail) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	Oct. 02, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan originations	$ 71,000	$ 2,327,913
Deferred origination fees and expenses		(25,402)
Amortization of deferred fees and expenses		5,965	180	1,773
Unrealized gain on foreign currency translation		(798)
Gross Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance		164,180
Loan originations		2,325,433
Additional fundings		2,480
Loan satisfactions		(260,400)
Partial loan repayments and sales		(141,150)
Deferred origination fees and expenses		(25,402)
Amortization of deferred fees and expenses		5,965
Unrealized gain on foreign currency translation		797
Reclassification to loans held-for-sale		(6,601)
Balance		2,065,302
Provision for Loan Losses [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance		(22,680)
Loan originations
Additional fundings
Loan satisfactions
Partial loan repayments and sales
Deferred origination fees and expenses
Amortization of deferred fees and expenses
Unrealized gain on foreign currency translation
Reclassification to loans held-for-sale		4,601
Balance		(18,079)
Net Book Value [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance		141,500
Loan originations		2,325,433
Additional fundings		2,480
Loan satisfactions		(260,400)
Partial loan repayments and sales		(141,150)
Deferred origination fees and expenses		(25,402)
Amortization of deferred fees and expenses		5,965
Unrealized gain on foreign currency translation		797
Reclassification to loans held-for-sale		(2,000)
Balance		$ 2,047,223

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Fair Values (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Assets that are Recorded at Fair Value

The following table summarizes our assets that are recorded at fair value as of December 31, 2013 ($ in thousands):

	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis
Loans receivable, at fair value	$	40,665	$	—	$	—	$	40,665
Other assets, at fair value(1)	$	15,740	$	—	$	1,944	$	13,796
Measured on a non-recurring basis
Impaired loans receivable(2)	$	—	$	—	$	—	$	—

(1) Other assets include securities, equity investments, and other receivables carried at fair value.

(2) All impaired loans receivable have a 100% loan loss reserve and are held by CT CDO I as of December 31, 2013.

The following table summarizes our assets that are recorded at fair value as of December 31, 2012 ($ in thousands):

	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured on a recurring basis
Investment in CT Legacy Asset	$	132,000	$	—	$	—	$	132,000
Measured on a non-recurring basis
Impaired loans receivable(1)	$	2,000	$	—	$	—	$	2,000

(1) Impaired loans receivable have a 92% loan loss reserve and are held by consolidated securitization vehicles as of December 31, 2012.

Reconciliation of Beginning and Ending Balances of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs

The following table reconciles the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Loans held-for-sale, net			Loans receivable, at fair value			Other assets at fair value(1)			Investment in CT Legacy Asset
December 31, 2012	$	—		$	—		$	—		$	132,000
Consolidation of CT Legacy Partners		—			150,332			14,448			(132,000	)
Transfer from loans receivable, net		2,000			—			—			—
Transfer from loans receivable, at fair value		—			(6,813	)		6,813			—
Deferred interest		—			984			—			—
Proceeds from investments		(3,259	)		(110,654	)		(7,981	)		—
Adjustments to fair value included in earnings
Valuation allowance on loans held-for-sale		1,259			—			—			—
Gain on investments at fair value		—			6,816			516			—
December 31, 2013	$	—		$	40,665		$	13,796		$	—

(1) Other assets include securities, equity investments, and other receivables carried at fair value.

Schedule of Range of Key Assumptions for Each Type of Loans Receivable

The following table lists the range of key assumptions for each type of loans receivable as of December 31, 2013 ($ in millions):

	Assumption Ranges for Significant Unobservable Inputs (Level  3)(1)							Book Value Sensitivity to a 100 bp Discount Rate Increase
Collateral Type	Discount Rate		Recovery Percentage(2)			Book Value
Hotel		7%		100	%	$	15.0		(1.4	%)
Office		6% – 15%		100	%		25.7		(0.3	%)
						$	40.7

(1) Excludes loans for which there is no expectation of future cash flows.

(2) Represents the proportion of the principal expected to be collected relative to the loan balances as of December 31, 2013.

Schedule of Details of Carrying Amount, Face Amount, and Approximate Fair Value of Financial Instruments

The following table details the carrying amount, face amount, and approximate fair value of the financial instruments described in Note 2. All fair value estimates except for (i) cash and cash equivalents and (ii) convertible notes, are measured using significant unobservable inputs, or Level 3 inputs, as further described in Note 2. ($ in thousands):

	December 31, 2013						December 31, 2012
	Carrying Amount		Face Amount		Fair Value		Carrying Amount		Face Amount		Fair Value
Financial assets
Cash and cash equivalents	$	52,342	$	52,342	$	52,342	$	15,423	$	15,423	$	15,423
Restricted cash		10,096		10,096		10,096		14,246		14,246		14,246
Loans receivable, net		2,047,223		2,076,411		2,058,699		141,500		164,180		133,682
Financial liabilities
Secured notes		—		—		—		8,497		8,497		7,374
Repurchase obligations		1,109,353		1,109,353		1,109,353		—		—		—
Convertible notes, net		159,524		172,500		181,772		—		—		—
Securitized debt obligations		40,181		40,181		25,696		139,184		139,184		89,880
Participations sold		90,000		90,000		90,304		—		—		—

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Equity - Additional Information (Detail) (USD $)	12 Months Ended				2 Months Ended						12 Months Ended			1 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Nov. 30, 2013 CT Legacy Partners [Member]	Nov. 30, 2013 Accumulated Other Comprehensive Loss [Member]	Dec. 31, 2013 Accumulated Other Comprehensive Loss [Member]	Dec. 31, 2012 Accumulated Other Comprehensive Loss [Member]	Dec. 31, 2011 Accumulated Other Comprehensive Loss [Member]	Dec. 31, 2010 Accumulated Other Comprehensive Loss [Member]	Dec. 31, 2013 Non-controlling Interests [Member]	Dec. 31, 2012 Non-controlling Interests [Member]	Dec. 31, 2011 Non-controlling Interests [Member]	May 29, 2013 Class A Common Stock [Member]	Dec. 31, 2013 Class A Common Stock [Member]	May 06, 2013 Class A Common Stock [Member]
Increase in total equity	$ 603,300,000
Total equity	756,750,000	153,453,000	(128,939,000)	(411,187,000)			798,000		(40,584,000)	(50,462,000)	38,841,000	80,009,000	(18,515,000)
Accumulated other comprehensive income	798,000								(40,584,000)	(50,462,000)
Aggregate distributions						100,000,000
Proceeds from distributions					46,600,000						53,400,000
Total stock, shares authorized	200,000,000
Common stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares authorized	100,000,000
Common stock, shares outstanding	28,802,000	2,927,000														2,926,651
Reverse stock split ratio															0.1
Description reverse stock split															On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013.
Reclassification of common stock to additional paid-in capital															263,000
Additional shares issued														25,875,000
Additional shares, purchase price														$ 25.50
Issuance of additional shares, net proceeds after underwriter discounts and other offering expenses														633,800,000
Common stock, restricted common stock and stock units, shares issued and outstanding	29,602,884
Dividends declared, amount	$ 21,100,000	$ 49,800,000	$ 0
Dividends per common stock	$ 0.72	$ 20.00	$ 0.00

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Segment Reporting - Consolidated Balance Sheet for Each Segment (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 52,342		$ 15,423	$ 34,818	$ 24,449
Restricted cash	10,096		14,246
Loans receivable, net	2,047,223		141,500
Loans receivable, at fair value	40,665
Equity investments in unconsolidated subsidiaries	22,480		13,306
Accrued interest receivable, prepaid expenses, and other assets	39,974
Total assets	2,212,780		322,343
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	56,972
Repurchase obligations	1,109,353	20,200
Convertible notes, net	159,524
Securitized debt obligations	40,181		139,184
Participations sold	90,000
Total liabilities	1,456,030		168,890
Equity
Total Blackstone Mortgage Trust, Inc. stockholders' equity	717,909		73,444
Non-controlling interests	38,841		80,009
Total equity	756,750		153,453	(128,939)	(411,187)
Total liabilities and equity	2,212,780		322,343
Loan Origination [Member]
Assets
Cash and cash equivalents	52,342
Restricted cash
Loans receivable, net	2,000,223
Loans receivable, at fair value
Equity investments in unconsolidated subsidiaries
Accrued interest receivable, prepaid expenses, and other assets	21,020
Total assets	2,073,585
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	21,104
Repurchase obligations	1,109,353
Convertible notes, net	159,524
Securitized debt obligations
Participations sold	90,000
Total liabilities	1,379,981
Equity
Total Blackstone Mortgage Trust, Inc. stockholders' equity	693,604
Non-controlling interests
Total equity	693,604
Total liabilities and equity	2,073,585
CT Legacy Portfolio [Member]
Assets
Cash and cash equivalents
Restricted cash	10,096
Loans receivable, net	47,000
Loans receivable, at fair value	40,665
Equity investments in unconsolidated subsidiaries	22,480
Accrued interest receivable, prepaid expenses, and other assets	18,954
Total assets	139,195
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	35,868
Repurchase obligations
Convertible notes, net
Securitized debt obligations	40,181
Participations sold
Total liabilities	76,049
Equity
Total Blackstone Mortgage Trust, Inc. stockholders' equity	24,305
Non-controlling interests	38,841
Total equity	63,146
Total liabilities and equity	$ 139,195

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Equity Investments in Unconsolidated Subsidiaries (Tables)

12 Months Ended

Dec. 31, 2013

Equity Method Investments And Joint Ventures [Abstract]

Activity Relating to Our Equity Investments in Unconsolidated Subsidiaries

Activity relating to our equity investments in unconsolidated subsidiaries was ($ in thousands):

	CTOPI Carried Interest
Total as of December 31, 2012	$	13,306
Distributions(1)		(8,795	)
Incentive income allocation(2)		17,969
Total as of December 31, 2013	$	22,480

(1) Represents an $8.8 million tax advance cash distribution received to satisfy our income tax obligation related to the allocation of taxable income in respect of our carried interest in CTOPI. Our total allocation of carried interest from CTOPI is net of $10.2 million of aggregate tax advance cash distributions.

(2) We have deferred the recognition of incentive income allocated to us from CTOPI in respect of our carried interest in CTOPI, and recorded an offsetting liability as a component of accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

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Loans Receivable - Overall Statistics for Loans Receivable Portfolio (Parenthetical) (Detail)	Dec. 31, 2013
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	0.20%
Minimum [Member] | LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	0.20%
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	1.00%
Maximum [Member] | LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	1.00%

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Equity Investments in Unconsolidated Subsidiaries - Activity Relating to Our Equity Investments in Unconsolidated Subsidiaries (Detail) (USD $) In Thousands, unless otherwise specified			12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 CTOPI Carried Interest [Member]
Schedule of Equity Method Investments [Line Items]
Beginning Balance	$ 22,480	$ 13,306	$ 13,306
Distributions			(8,795)
Incentive income allocation			17,969
Ending Balance	$ 22,480	$ 13,306	$ 22,480

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Loans Receivable, at Fair Value - Activity Relating to Loans Receivable, at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Receivables [Abstract]
Loans receivable at Fair Value, Beginning Balance
Consolidation of CT Legacy Partners	150,332	(645,163)	(573,483)
Capitalized interest	984
Loan satisfactions	(110,347)
Partial loan repayments	(307)
Gain on investments at fair value	6,816
Reclassification to other assets	(6,813)		(7,914)
Loans receivable at Fair Value, Ending Balance	$ 40,665

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Corporate Transactions - Additional Information (Detail) (USD $)	0 Months Ended	12 Months Ended				0 Months Ended				0 Months Ended			0 Months Ended
	May 13, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	May 30, 2013	Dec. 19, 2012 Sale to Holdings III [Member]	Dec. 20, 2012 Sale to Holdings III [Member]	May 13, 2013 Blackstone [Member]	May 13, 2013 Affiliate of Manager [Member]	Mar. 22, 2013 CT Legacy REIT [Member]	Dec. 19, 2012 CT Legacy REIT [Member]	Mar. 21, 2013 CT Legacy REIT [Member]	Dec. 19, 2012 CT CDOs II and IV [Member]
Subsidiary or Equity Method Investee [Line Items]
Joint venture agreement date	May 13, 2013
Percentage of equity interest purchased	100.00%				100.00%			16.70%	83.30%
Joint venture agreement end date	May 30, 2013
Preferred stock redemption amount in cash												$ 147,000
Increase in total equity		603,300,000								12,000,000
Purchase agreement, purchase price			21,424,000			21,400,000
Sale of outstanding class A preferred stock											100.00%
Class A common shares acquired by Holdings III, shares						500,000
Class A common shares acquired by Holdings III						10,000,000
Special cash dividend declared, per share		$ 0.72	$ 20.00	$ 0.00			$ 20.00
Gain on deconsolidation			$ 200,283,000										$ 53,900,000

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and 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 of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

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.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and, therefore, a further disaggregated presentation would not be more meaningful.

Our subsidiary, CT Legacy Partners, LLC, or CT Legacy Partners, accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and other investments of CT Legacy Partners at fair value on our consolidated balance sheets.

As more fully described in Note 3, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Certain reclassifications have been made in the presentation of the prior-period consolidated financial statements to conform to the current presentation.

Use of Estimates

The preparation of 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 at 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 is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts, and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan 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.

Cash and Cash Equivalents

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

Restricted Cash

We classify the cash balances held by CT Legacy Partners as restricted because, while these cash balances are available for use by CT Legacy Partners for its operations, they cannot be used by us until our allocable share is distributed from CT Legacy Partners and cannot be commingled with any of our other unrestricted cash balances.

Loans Receivable and Provision for Loan Losses

We purchase and originate 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 according 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 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 performance of each loan, and assigns a risk rating based on several factors, including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated “1” through “8,” from less risk to greater risk, which ratings are defined as follows:

1  – Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in- place debt yield, and stable projected cash flow.

2  – Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.

3  – Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.

4  – Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.

5  – Low Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 15% probability of default or principal loss.

6  – Medium Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 33% probability of default or principal loss.

7  – High Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 67% or higher probability of default or principal loss.

8  – In Default: A loan which is in contractual default and/or that has a very high likelihood of principal loss.

Loans Held-for-Sale and Related Allowance

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis or fair value, less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statements of operations as a valuation allowance on loans held-for-sale.

Participations Sold

Participations sold represent interests in certain loans that we originated and subsequently sold. In certain instances, we present these participations sold as both assets and non-recourse liabilities because these arrangements do not qualify as sales under GAAP. Generally, participations sold are recorded as assets and liabilities in equal amounts on our consolidated balance sheets, and an equivalent amount of interest income and interest expense is recorded on our consolidated statements of operations.

Equity Investments in Unconsolidated Subsidiaries

Our carried interest in CT Opportunity Partners I, LP, or CTOPI, is accounted for using the equity method. CTOPI’s assets and liabilities are not consolidated into our financial statements due to our determination that (i) it is not a VIE and (ii) the investors have sufficient rights to preclude consolidation by us. As such, we report our allocable percentage of the net assets of CTOPI on our consolidated balance sheets. We have deferred the recognition of income from CTOPI until cash is collected or appropriate contingencies have been eliminated and, therefore, do not recognize any income from equity investments in unconsolidated subsidiaries.

Deferred Financing Costs

The deferred financing costs that are included in accrued interest receivable, prepaid expenses, and other assets 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.

Repurchase Obligations

We record investments financed with repurchase obligations 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 obligations are reported separately on our consolidated statements of operations.

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or Codification, 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 fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet as of December 31, 2013, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Codification 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.

The “Fair Value Measurement and Disclosures” Topic of the Codification 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 value of each asset recorded 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 assets and liabilities are measured 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 and liabilities that are measured at fair value are discussed further in Note 18. Generally, loans held-for-sale and certain of our loans receivable and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability that was recorded at fair value:

Loans receivable, at fair value – Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value – Our other assets balance includes certain commercial mortgage-backed securities, collateral debt obligations, and equity investments and are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans – Loans identified as impaired are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of 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.

Investment in CT Legacy Asset – We arrived at the fair value of our investment in CT Legacy Asset, LLC, or CT Legacy Asset, by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets.

We are also required by GAAP to disclose fair value information about financial instruments, which is otherwise not reported in the statement of financial position at fair value, to the extent it is practicable to estimate a fair value for those instruments. In cases where quoted market prices are not available, fair values are estimated using discounted cash flow or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents – The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash – The carrying amount of restricted cash approximates fair value.

Loans receivable, net – Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors, including capitalization 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.

Secured notes – These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations – These facilities are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Convertible notes, net – These notes are recorded at their amortized cost and not at fair value. These convertible notes are publicly traded and their fair values are obtained using quoted market prices.

Securitized debt obligations – These obligations are recorded at the face value of outstanding obligations to third parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third-party dealers.

Participations sold – These obligations are recorded at their face value and not at fair value. The fair value was estimated based on the value of the related loan receivable asset.

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 16 for additional information.

Accounting for Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain of its employees that vest over the life of the awards. 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.

Earnings per Share of Common Stock

Basic earnings per share, or Basic EPS, is computed based on the net earnings allocable to common stock and stock units, divided by the weighted-average number of shares of common stock and stock units outstanding during the period. Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to common stock and stock units, divided by the weighted-average number of shares of common stock, stock units and potentially dilutive common stock issued upon conversion of our convertible notes.

We have separately determined Basic EPS and Diluted EPS for income from continuing operations, loss from discontinued operations, and for net income attributable to common stockholders. Refer to Note 13 for additional discussion of earnings per share.

Segment Reporting

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Recent Accounting Pronouncements

In April 2011, the FASB issued Accounting Standards Update, or ASU, 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring,” or ASU 2011-02. ASU 2011-02 primarily clarifies when creditors should classify loan modifications as troubled debt restructurings and provides examples and factors to be considered. Loan modifications that are considered troubled debt restructurings could result in additional disclosure requirements and could affect the related provision for loan losses. ASU 2011-02 was effective for the first interim or annual period beginning after June 15, 2011, with retrospective application to the beginning of the year. The adoption of ASU 2011-02 did not have a material impact on our consolidated financial statements, however, will impact how we account for loan modifications, and may result in an increase in the loan modifications we classify as troubled debt restructurings and, therefore, our provision for loan losses.

In April 2011, the FASB issued ASU 2011-03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 primarily removes certain criteria from the consideration of effective control over assets subject to repurchase agreements. The removal of these criteria will generally result in asset transfers pursuant to repurchase agreements being accounted for as secured borrowings, with both the transferred assets and repurchase liability recorded on the transferor’s balance sheet. ASU 2011-03 was effective for the first interim or annual period beginning after December 15, 2011, and is to be applied prospectively to transactions that occur subsequent to the effective date. The adoption of ASU 2011-03 did not have a material impact on our consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 860): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 amends existing guidance on fair value measurements related to (i) instruments held in a portfolio, (ii) instruments classified within stockholders’ equity, (iii) application of the “highest and best use” concept to nonfinancial assets, (iv) application of blockage factors and other premiums and discounts in the valuation process, and (v) other matters. In addition, ASU 2011-04 expanded the required disclosures around fair value measurements including (i) reporting the level in the fair value hierarchy used to value assets and liabilities, which are not measured at fair value, but where fair value is disclosed and (ii) qualitative disclosures about the sensitivity of Level 3 fair value measurements to changes in unobservable inputs used. ASU 2011-04 was effective for the first interim or annual period beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on our consolidated financial statements; however, it did expand our disclosures related to fair value measurements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 does not change the items that must be reported in other comprehensive income; however, it eliminates the option to present other comprehensive income on the statement of stockholders’ equity and instead requires either (i) a continuous statement of comprehensive income, which would replace the current statement of operations or (ii) an additional statement of other comprehensive income, which would immediately follow the statement of operations, and would report the components of other comprehensive income. ASU 2011-05 was effective for the first interim or annual period beginning after December 15, 2011, and should be applied retrospectively to all periods reported after the effective date. Our early adoption, as permitted, of ASU 2011-05 as of December 31, 2011 did not have a material impact on our consolidated financial statements, other than the change in presentation of comprehensive income as a separate financial statement.

In January 2013, the FASB issued ASU 2013-01, “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities,” or ASU 2013-01. ASU 2013-01 was developed to clarify which instruments and transactions are subject to the offsetting disclosure requirements set forth by ASU 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” ASU 2013-01 was effective for the first interim or annual period beginning on or after January 1, 2013, and was applied retrospectively for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” or ASU 2013-02. ASU 2013-02 implements the previously deferred requirement to disclose reclassification adjustments into and out of accumulated other comprehensive income in either a note or on the face of the financial statements. ASU 2013-02 was effective for the first interim or annual period beginning after December 15, 2012, and was applied prospectively. As we have not reclassified any balances into or out of accumulated other comprehensive income, the adoption of ASU 2013-02 did not have a material impact on our consolidated financial statements.

In June 2013, the FASB issued ASU 2013-08, “Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” or ASU 2013-08. ASU 2013-08 amends the criteria for qualification as an investment company under Topic 946 of the FASB Accounting Standards Codification, or Topic 946, and requires additional disclosure by investment companies. ASU 2013-08 is effective for the first interim or annual period beginning after December 15, 2013, and is to be applied prospectively. We currently consolidate CT Legacy Partners, which accounts for its operations as an investment company under Topic 946. We do not expect the adoption of ASU 2013-08 to impact CT Legacy Partners’ status as an investment company. Further, because ASU 2013-08 specifically excludes REITs from its scope, it will not otherwise impact our consolidated financial statements.

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Loans Receivable, at Fair Value - Overall Statistics for Loans Receivable Portfolio Held at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Investment	Dec. 31, 2012 Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 2,047,223	$ 141,500
Weighted-average cash coupon	L+2.23 %
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	31	7
Net book value	2,047,223	141,500
Weighted-average cash coupon	L+4.64 %	L+4.73 %
Weighted-average all-in yield	L+5.26 %	L+4.74 %
CT Legacy Partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	7
CT Legacy Partners [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	7
Net book value	40,665
Weighted-average maximum maturity (years)	10 months 24 days
Weighted-average cash coupon	6.24%
Weighted-average all-in yield	6.24%
CT Legacy Partners [Member] | Floating Rate [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	4
Net book value	16,990
Weighted-average cash coupon	L+4.26 %
Weighted-average all-in yield	L+4.26 %
Weighted-average maximum maturity (years)	10 months 24 days
CT Legacy Partners [Member] | Fixed Rate [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	3
Net book value	$ 23,675
Weighted-average maximum maturity (years)	9 months 18 days
Weighted-average cash coupon	8.14%
Weighted-average all-in yield	8.14%

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Consolidated Statement of Operations for Each Segment

The following table presents our consolidated statement of operations for each segment for the year ended December 31, 2013 ($ in thousands):

	Loan Origination			CT Legacy Portfolio			Total
Income from loans and other investments
Interest and related income	$	41,621		$	11,543		$	53,164
Less: Interest and related expenses		13,053			4,964			18,017
Income from loans and other investments, net		28,568			6,579			35,147
Other expenses
Management fees		5,937			—			5,937
General and administrative expenses		5,149			6,356			11,505
Total other expenses		11,086			6,356			17,442
Valuation allowance on loans held-for-sale		—			1,259			1,259
Unrealized gain on investments at fair value		—			7,417			7,417
Gain on extinguishment of debt		—			38			38
Income before income taxes		17,482			8,937			26,419
Income tax provision		31			964			995
Net income		17,451			7,973			25,424
Net income attributable to non-controlling interests		(193	)		(10,199	)		(10,392	)
Net income (loss) attributable to
Blackstone Mortgage Trust, Inc.	$	17,258		$	(2,226	)	$	15,032

Consolidated Balance Sheet for Each Segment

The following table presents our consolidated balance sheet for each segment as of December 31, 2013 ($ in thousands):

	Loan Origination		CT Legacy Portfolio		Total
Assets
Cash and cash equivalents	$	52,342	$	—	$	52,342
Restricted cash		—		10,096		10,096
Loans receivable, net		2,000,223		47,000		2,047,223
Loans receivable, at fair value		—		40,665		40,665
Equity investments in unconsolidated subsidiaries		—		22,480		22,480
Accrued interest receivable, prepaid expenses, and other assets		21,020		18,954		39,974
Total assets	$	2,073,585	$	139,195	$	2,212,780
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	$	21,104	$	35,868	$	56,972
Repurchase obligations		1,109,353		—		1,109,353
Convertible notes, net		159,524		—		159,524
Securitized debt obligations		—		40,181		40,181
Participations sold		90,000		—		90,000
Total liabilities		1,379,981		76,049		1,456,030
Equity
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		693,604		24,305		717,909
Non-controlling interests		—		38,841		38,841
Total equity		693,604		63,146		756,750
Total liabilities and equity	$	2,073,585	$	139,195	$	2,212,780

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Summary of Quarterly Results of Operations

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Summary of Quarterly Results of Operations

22. SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2013, 2012, and 2011 ($ in thousands except per share data):

	March 31			June 30			September 30		December 31
2013
Revenues(1)	$	1,456		$	6,017		$	18,853	$	26,837
Net (loss) income	$	(1,597	)	$	6,768		$	10,526	$	9,728
Net (loss) income attributable to
Blackstone Mortgage Trust, Inc.	$	(3,115	)	$	2,748		$	8,320	$	7,079
Net (loss) income per share of class A common stock:
Basic	$	(1.03	)	$	0.22		$	0.29	$	0.24
Diluted	$	(1.03	)	$	0.22		$	0.29	$	0.24
2012
Revenues(1)	$	14,716		$	6,763		$	6,944	$	6,517
Net income	$	140,622		$	3,351		$	12,900	$	122,931
Net income attributable to
Blackstone Mortgage Trust, Inc.	$	66,553		$	2,283		$	6,999	$	105,189
Net income per share of class A common stock:
Basic	$	29.14		$	1.00		$	3.02	$	42.21
Diluted	$	27.39		$	0.93		$	2.84	$	40.65
2011
Revenues(1)	$	36,991		$	32,553		$	25,642	$	21,975
Net income (loss)	$	253,917		$	6,224		$	8,256	$	(16,078	)
Net income (loss) attributable to
Blackstone Mortgage Trust, Inc.	$	254,585		$	(1,845	)	$	13,722	$	(8,320	)
Net income (loss) per share of class A common stock:
Basic	$	113.47		$	(0.81	)	$	6.04	$	(3.66	)
Diluted	$	110.36		$	(0.81	)	$	5.69	$	(3.66	)

(1) Excludes revenues from discontinued operations.

Basic and diluted earnings per share are computed independently based on the weighted-average shares of common stock and stock units outstanding for each period. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the total for the year. Earnings per share amounts have been adjusted to give retroactive effect to the reverse stock split, which we effected on May 6, 2013. See Note 13 for a further discussion of earnings per share.

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Segment Reporting

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

21. SEGMENT REPORTING

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Our Loan Origination business commenced during 2013. Accordingly, no comparable segment data exists for 2012, 2011, or any other prior period, and we have therefore not retrospectively restated our previously reported information.

The following table presents our consolidated statement of operations for each segment for the year ended December 31, 2013 ($ in thousands):

	Loan Origination			CT Legacy Portfolio			Total
Income from loans and other investments
Interest and related income	$	41,621		$	11,543		$	53,164
Less: Interest and related expenses		13,053			4,964			18,017
Income from loans and other investments, net		28,568			6,579			35,147
Other expenses
Management fees		5,937			—			5,937
General and administrative expenses		5,149			6,356			11,505
Total other expenses		11,086			6,356			17,442
Valuation allowance on loans held-for-sale		—			1,259			1,259
Unrealized gain on investments at fair value		—			7,417			7,417
Gain on extinguishment of debt		—			38			38
Income before income taxes		17,482			8,937			26,419
Income tax provision		31			964			995
Net income		17,451			7,973			25,424
Net income attributable to non-controlling interests		(193	)		(10,199	)		(10,392	)
Net income (loss) attributable to
Blackstone Mortgage Trust, Inc.	$	17,258		$	(2,226	)	$	15,032

There were no transactions between our operating segments during the year ended December 31, 2013. Less than 1% of revenues for the year ended December 31, 2013, were generated from non-domestic sources.

The following table presents our consolidated balance sheet for each segment as of December 31, 2013 ($ in thousands):

	Loan Origination		CT Legacy Portfolio		Total
Assets
Cash and cash equivalents	$	52,342	$	—	$	52,342
Restricted cash		—		10,096		10,096
Loans receivable, net		2,000,223		47,000		2,047,223
Loans receivable, at fair value		—		40,665		40,665
Equity investments in unconsolidated subsidiaries		—		22,480		22,480
Accrued interest receivable, prepaid expenses, and other assets		21,020		18,954		39,974
Total assets	$	2,073,585	$	139,195	$	2,212,780
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	$	21,104	$	35,868	$	56,972
Repurchase obligations		1,109,353		—		1,109,353
Convertible notes, net		159,524		—		159,524
Securitized debt obligations		—		40,181		40,181
Participations sold		90,000		—		90,000
Total liabilities		1,379,981		76,049		1,456,030
Equity
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		693,604		24,305		717,909
Non-controlling interests		—		38,841		38,841
Total equity		693,604		63,146		756,750
Total liabilities and equity	$	2,073,585	$	139,195	$	2,212,780

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Schedule IV - Mortgage Loans on Real Estate (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Mortgage Loans on Real Estate [Line Items]
Prior Liens	$ 398,235
Face Amount of Loans	2,221,678
Carrying Amount of Loans	2,087,888
Senior Mortgage Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Prior Liens
Face Amount of Loans	1,811,513
Carrying Amount of Loans	1,800,329
Senior Mortgage Loans [Member] | Various / Diversified [Member] | All Other Mortgage Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Various / Diversified
Debt instrument variable rate basis	LIBOR
Maximum Maturity Date	Jan. 09, 2019
Prior Liens
Face Amount of Loans	628,747
Carrying Amount of Loans	623,829
Maximum Maturity Date - earliest	Nov. 06, 2016
Senior Mortgage Loans [Member] | Office [Member] | Borrower A [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Office / West
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	3.80%
Maximum Maturity Date	Jun. 15, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	193,980
Carrying Amount of Loans	193,194
Senior Mortgage Loans [Member] | Office [Member] | Borrower D [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Office / Northeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	4.75%
Maximum Maturity Date	Jan. 09, 2019
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	140,000
Carrying Amount of Loans	138,627
Senior Mortgage Loans [Member] | Office [Member] | Borrower H [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Office / West
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	3.95%
Maximum Maturity Date	Jun. 09, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	70,284
Carrying Amount of Loans	70,131
Senior Mortgage Loans [Member] | Office [Member] | Borrower I [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Office / Northeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	4.00%
Maximum Maturity Date	Jun. 10, 2016
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	68,000
Carrying Amount of Loans	67,787
Senior Mortgage Loans [Member] | Diversified [Member] | Borrower C [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Diversified / Northeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	3.70%
Maximum Maturity Date	Sep. 30, 2020
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	140,000
Carrying Amount of Loans	139,695
Senior Mortgage Loans [Member] | Diversified [Member] | Borrower F [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Diversified / Diversified
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	4.25%
Maximum Maturity Date	Aug. 10, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	87,038
Carrying Amount of Loans	86,489
Senior Mortgage Loans [Member] | Multifamily [Member] | Borrower B [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Multifamily / Northeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	4.50%
Maximum Maturity Date	Nov. 09, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	181,000
Carrying Amount of Loans	179,266
Senior Mortgage Loans [Member] | Multifamily [Member] | Borrower G [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Multifamily / Southeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	3.85%
Maximum Maturity Date	Jul. 09, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	81,000
Carrying Amount of Loans	80,664
Senior Mortgage Loans [Member] | Hotel / West [Member] | Borrower E [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Hotel / West
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	4.38%
Maximum Maturity Date	Nov. 09, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	89,750
Carrying Amount of Loans	89,161
Senior Mortgage Loans [Member] | Other [Member] | Borrower J [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Other / Diversified
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	5.00%
Maximum Maturity Date	Sep. 14, 2018
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	67,714
Carrying Amount of Loans	66,956
Senior Mortgage Loans [Member] | Other [Member] | Borrower K [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Other / Northeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	8.00%
Maximum Maturity Date	Feb. 09, 2015
Periodic Payment Terms	I/O
Prior Liens
Face Amount of Loans	64,000
Carrying Amount of Loans	64,530
Subordinate Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Prior Liens	398,235
Face Amount of Loans	410,164
Carrying Amount of Loans	287,559
Subordinate Loans [Member] | Various / Diversified [Member] | All Other Floating-Rate Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Various / Diversified
Debt instrument variable rate basis	LIBOR
Maximum Maturity Date	Dec. 09, 2014
Prior Liens
Face Amount of Loans	178,820
Carrying Amount of Loans	63,990
Maximum Maturity Date - earliest	Jan. 08, 2014
Subordinate Loans [Member] | Various / Diversified [Member] | All Other Fixed-Rate Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Various / Diversified
Maximum Maturity Date	Feb. 01, 2016
Prior Liens
Face Amount of Loans	23,995
Carrying Amount of Loans	23,675
Maximum Maturity Date - earliest	Jun. 01, 2014
Subordinate Loans [Member] | Office [Member] | Borrower AA [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Office / Northwest
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	5.66%
Maximum Maturity Date	Apr. 09, 2015
Periodic Payment Terms	I/O
Prior Liens	289,318
Face Amount of Loans	173,837
Carrying Amount of Loans	166,207
Subordinate Loans [Member] | Multifamily [Member] | Borrower BB [Member]
Mortgage Loans on Real Estate [Line Items]
Location	Multifamily / Northeast
Debt instrument variable rate basis	LIBOR
Interest Payment Rates	12.56%
Maximum Maturity Date	Dec. 13, 2017
Periodic Payment Terms	I/O
Prior Liens	108,917
Face Amount of Loans	33,513
Carrying Amount of Loans	$ 33,687
Minimum [Member] | Senior Mortgage Loans [Member] | Various / Diversified [Member] | All Other Mortgage Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Interest Payment Rates	3.85%
Minimum [Member] | Subordinate Loans [Member] | Various / Diversified [Member] | All Other Floating-Rate Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Interest Payment Rates	3.53%
Minimum [Member] | Subordinate Loans [Member] | Various / Diversified [Member] | All Other Fixed-Rate Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Interest Payment Rates	8.00%
Maximum [Member] | Senior Mortgage Loans [Member] | Various / Diversified [Member] | All Other Mortgage Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Interest Payment Rates	5.00%
Maximum [Member] | Subordinate Loans [Member] | Various / Diversified [Member] | All Other Floating-Rate Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Interest Payment Rates	6.06%
Maximum [Member] | Subordinate Loans [Member] | Various / Diversified [Member] | All Other Fixed-Rate Loans Individually Less Than 3% [Member]
Mortgage Loans on Real Estate [Line Items]
Interest Payment Rates	8.77%

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Loans Receivable - Allocation of Loans Receivable by Loan Type and Internal Risk Ratings (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 SecurityLoan	Dec. 31, 2012 SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book value, net	$ 2,047,223	$ 141,500
Subordinate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	5	6
Principal Balance	264,898	101,680
Book value, net	246,894	79,000
Subordinate Loans [Member] | Risk Rating 1-3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	3	2
Principal Balance	227,350	47,000
Book value, net	219,894	47,000
Subordinate Loans [Member] | Risk Rating 4-5 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans		1
Principal Balance		30,000
Book value, net		30,000
Subordinate Loans [Member] | Risk Rating 6-8 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	2	3
Principal Balance	37,548	24,680
Book value, net	27,000	2,000
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	26	1
Principal Balance	1,811,514	62,500
Book value, net	1,800,329	62,500
Senior Mortgages Loans [Member] | Risk Rating 1-3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans	26
Principal Balance	1,811,514
Book value, net	1,800,329
Senior Mortgages Loans [Member] | Risk Rating 4-5 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans		1
Principal Balance		62,500
Book value, net		$ 62,500

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Summary of Quarterly Results of Operations (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Summary of Quarterly Results of Operations

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2013, 2012, and 2011 ($ in thousands except per share data):

	March 31			June 30			September 30		December 31
2013
Revenues(1)	$	1,456		$	6,017		$	18,853	$	26,837
Net (loss) income	$	(1,597	)	$	6,768		$	10,526	$	9,728
Net (loss) income attributable to
Blackstone Mortgage Trust, Inc.	$	(3,115	)	$	2,748		$	8,320	$	7,079
Net (loss) income per share of class A common stock:
Basic	$	(1.03	)	$	0.22		$	0.29	$	0.24
Diluted	$	(1.03	)	$	0.22		$	0.29	$	0.24
2012
Revenues(1)	$	14,716		$	6,763		$	6,944	$	6,517
Net income	$	140,622		$	3,351		$	12,900	$	122,931
Net income attributable to
Blackstone Mortgage Trust, Inc.	$	66,553		$	2,283		$	6,999	$	105,189
Net income per share of class A common stock:
Basic	$	29.14		$	1.00		$	3.02	$	42.21
Diluted	$	27.39		$	0.93		$	2.84	$	40.65
2011
Revenues(1)	$	36,991		$	32,553		$	25,642	$	21,975
Net income (loss)	$	253,917		$	6,224		$	8,256	$	(16,078	)
Net income (loss) attributable to
Blackstone Mortgage Trust, Inc.	$	254,585		$	(1,845	)	$	13,722	$	(8,320	)
Net income (loss) per share of class A common stock:
Basic	$	113.47		$	(0.81	)	$	6.04	$	(3.66	)
Diluted	$	110.36		$	(0.81	)	$	5.69	$	(3.66	)

(1) Excludes revenues from discontinued operations.

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Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

23. SUBSEQUENT EVENTS

On January 14, 2014, we issued 9,775,000 shares of class A common stock at a public offering price of $26.75 per share. We generated net proceeds from the issuance of $256.1 million after underwriting discounts and other offering expenses.

Subsequent to year-end, we originated an additional three loans with total commitments of $286.4 million, of which an aggregate $208.8 million was funded at closing.

On January 29, 2014, we extended the term of our $32.0 million, asset-specific, repurchase agreement with Wells Fargo from February 9, 2014 to April 9, 2014. We have an option to further extend the term of this agreement for an additional ten month period.

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Schedule IV - Mortgage Loans on Real Estate

12 Months Ended

Dec. 31, 2013

Mortgage Loans On Real Estate [Abstract]

Schedule IV - Mortgage Loans on Real Estate

Blackstone Mortgage Trust, Inc.

Schedule IV – Mortgage Loans on Real Estate

As of December 31, 2013

(in thousands)

Type of Loan/Borrower	Description / Location		Interest Payment Rates(2)			Maximum Maturity Date(3)			Periodic Payment Terms(4)		Prior Liens(5)		Face Amount of Loans		Carrying Amount of Loans(6)
Senior Mortgage Loans(1)
Borrower A		Office / West		L + 3.80	%		6/15/2018			I/O	$	—	$	193,980	$	193,194
Borrower B		Multifamily / Northeast		L + 4.50	%		11/9/2018			I/O		—		181,000		179,266
Borrower C		Diversified / Northeast		L + 3.70	%		9/30/2020			I/O		—		140,000		139,695
Borrower D		Office / Northeast		L + 4.75	%		1/9/2019			I/O		—		140,000		138,627
Borrower E		Hotel / West		L + 4.38	%		11/9/2018			I/O		—		89,750		89,161
Borrower F		Diversified / Diversified		L + 4.25	%		8/10/2018			I/O		—		87,038		86,489
Borrower G		Multifamily / Southeast		L + 3.85	%		7/9/2018			I/O		—		81,000		80,664
Borrower H		Office / West		L + 3.95	%		6/9/2018			I/O		—		70,284		70,131
Borrower I		Office / Northeast		L + 4.00	%		6/10/2016			I/O		—		68,000		67,787
Borrower J		Other / Diversified		L + 5.00	%		9/14/2018			I/O		—		67,714		66,956
Borrower K		Other / Northeast		L + 8.00	%		2/9/2015			I/O		—		64,000		64,530
All other mortgage loans individually less than 3%		Various / Diversified		L + 3.85% – L + 5.00	%		11/6/2016 – 1/9/2019					—		628,747		623,829
Total senior mortgage loans												—		1,811,513		1,800,329
Subordinate Loans(7)
Borrower AA		Office / Northwest		L + 5.66	%		4/9/2015			I/O		289,318		173,837		166,207
Borrower BB		Multifamily / Northeast		L + 12.56	%		12/13/2017			I/O		108,917		33,513		33,687
All other floating-rate loans individually less than 3%		Various / Diversified		L + 3.53 % – L + 6.06	%(8)		1/8/2014 – 12/9/2014	(8)				N/A		178,820		63,990
All other fixed-rate loans individually less than 3%		Various / Diversified		8.00% – 8.77	%		6/1/2014 – 2/1/2016					N/A		23,995		23,675
Total subordinate loans												398,235		410,164		287,559
Total loans											$	398,235	$	2,221,678	$	2,087,888

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013; however, certain of our loans receivable earn a minimum LIBOR floor ranging from 0.20% to 1.00%.

(3) Maximum maturity date assumes all extension options are exercised.

(4) I/O = interest only.

(5) Represents only third party liens.

(6) The tax basis of the loans included above is approximately $2.1 billion as of December 31, 2013.

(7) Includes subordinate interests in mortgages and mezzanine loans.

(8) Ranges exclude fully impaired loans with an aggregate principal balance of $108.8 million, which includes a subordinate loan with a principal balance of $10.5 million that is greater than 90 days delinquent. All other loans are current on contractual principal and interest payments. Refer to Notes 5 and 7 to our consolidated financial statements for additional details on our impaired loans.

Blackstone Mortgage Trust, Inc.

Notes to Schedule IV

As of December 31, 2013

(in thousands)

1. Reconciliation of Mortgage Loans on Real Estate:

The following table reconciles mortgage loans on real estate for the years ended:

	2013			2012			2011
Balance at January 1,(1)	$	141,500		$	869,269		$	3,503,447
Additions during period:
Consolidation (deconsolidation) of subsidiary		150,332			(645,163	)		(573,483	)
Loan originations		2,325,433			—			—
Additional fundings(2)		3,465			26			478
Amortization of deferred fees and discount, net		5,965			180			1,773
Unrealized gain on foreign currency translation		796			—			—
Unrealized gain on investments at fair value		6,816			—			—
Valuation allowance on loans held-for-sale		1,259			—			(1,456	)
Recovery of provision for loan losses		—			36,147			21,973
Deductions during period:
Collections of principal		(494,301	)		(118,959	)		(2,069,799	)
Loans sold		(21,162	)		—			(5,750	)
Deferred origination fees and expenses		(25,402	)		—			—
Transfers to other assets		(6,813	)		—			(7,914	)
Balance at December 31,	$	2,087,888		$	141,500		$	869,269

(1) All amounts include loans receivable, net, loans receivable, at fair value, and loans held-for-sale.

(2) Includes deferred interest, which is a non-cash addition to the balance of mortgage loans, of $325,000, $26,000, and $478,000 for the years ended December 31, 2013, 2012, and 2011, respectively.

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Organization

12 Months Ended

Dec. 31, 2013

Accounting Policies [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 primarily originates and purchases senior mortgage loans collateralized by properties in the United States and Europe. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of The Blackstone Group L.P., 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 our exemption from registration under the Investment Company Act of 1940, as amended, or the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries. Our business is organized into two operating segments: the Loan Origination segment and the CT Legacy Portfolio segment.

On April 26, 2013, our board of directors approved the change of our name from Capital Trust, Inc. to Blackstone Mortgage Trust, Inc., which we effected on May 6, 2013, concurrently with a one-for-ten reverse stock split of our class A common stock. Except where the context indicates otherwise, all class A common stock numbers herein have been adjusted to give retroactive effect to the reverse stock split.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and 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 of the assets and credit of our consolidated subsidiaries are not available to satisfy the debt or other obligations of us, our affiliates, or other entities.

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.

We have separately presented, following our consolidated balance sheet, the assets of consolidated VIEs that can only be used to satisfy the obligations of those VIEs, and the liabilities of consolidated VIEs that are non-recourse to us. We have aggregated all of such assets and liabilities of consolidated VIEs in this presentation due to our determination that these entities are substantively similar and, therefore, a further disaggregated presentation would not be more meaningful.

Our subsidiary, CT Legacy Partners, LLC, or CT Legacy Partners, accounts for its operations in accordance with industry-specific GAAP accounting guidance for investment companies, pursuant to which it reports its investments at fair value. We have retained this specialized accounting in consolidation and, accordingly, report the loans and other investments of CT Legacy Partners at fair value on our consolidated balance sheets.

As more fully described in Note 3, we sold our investment management business to Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations.

Certain reclassifications have been made in the presentation of the prior-period consolidated financial statements to conform to the current presentation.

Use of Estimates

Use of Estimates

The preparation of 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 at 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 is recognized over the life of the investment using the effective interest method and is recorded on the accrual basis. Fees, premiums, discounts, and direct costs associated with these investments are deferred until the loan is advanced and are then recognized over the term of the loan 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.

Cash and Cash Equivalents

Cash and Cash Equivalents

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

Restricted Cash

Restricted Cash

We classify the cash balances held by CT Legacy Partners as restricted because, while these cash balances are available for use by CT Legacy Partners for its operations, they cannot be used by us until our allocable share is distributed from CT Legacy Partners and cannot be commingled with any of our other unrestricted cash balances.

Loans Receivable and Provision for Loan Losses

Loans Receivable and Provision for Loan Losses

We purchase and originate 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 according 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 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 performance of each loan, and assigns a risk rating based on several factors, including risk of loss, loan-to-value ratio, or LTV, collateral performance, structure, exit plan, and sponsorship.

Loans are rated “1” through “8,” from less risk to greater risk, which ratings are defined as follows:

1  – Low Risk: A loan that is expected to perform through maturity, with relatively lower LTV, higher in- place debt yield, and stable projected cash flow.

2  – Average Risk: A loan that is expected to perform through maturity, with medium LTV, average in-place debt yield, and stable projected cash flow.

3  – Acceptable Risk: A loan that is expected to perform through maturity, with relatively higher LTV, acceptable in-place debt yield, and some uncertainty (due to lease rollover or other factors) in projected cash flow.

4  – Higher Risk: A loan that is expected to perform through maturity, but has exhibited a material deterioration in cash flow and/or other credit factors. If negative trends continue, default could occur.

5  – Low Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 15% probability of default or principal loss.

6  – Medium Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 33% probability of default or principal loss.

7  – High Probability of Default/Loss: A loan with one or more identified weaknesses that we expect to have a 67% or higher probability of default or principal loss.

8  – In Default: A loan which is in contractual default and/or that has a very high likelihood of principal loss.

Loans Held-for-Sale and Related Allowance

Loans Held-for-Sale and Related Allowance

In certain cases, we may classify loans as held-for-sale based upon the specific facts and circumstances of particular loans, including known or expected transactions. Loans held-for-sale are carried at the lower of their amortized cost basis or fair value, less cost to sell. A reduction in the fair value of loans held-for-sale is recorded as a charge to our consolidated statements of operations as a valuation allowance on loans held-for-sale.

Participations Sold

Participations Sold

Participations sold represent interests in certain loans that we originated and subsequently sold. In certain instances, we present these participations sold as both assets and non-recourse liabilities because these arrangements do not qualify as sales under GAAP. Generally, participations sold are recorded as assets and liabilities in equal amounts on our consolidated balance sheets, and an equivalent amount of interest income and interest expense is recorded on our consolidated statements of operations.

Equity Investments in Unconsolidated Subsidiaries

Equity Investments in Unconsolidated Subsidiaries

Our carried interest in CT Opportunity Partners I, LP, or CTOPI, is accounted for using the equity method. CTOPI’s assets and liabilities are not consolidated into our financial statements due to our determination that (i) it is not a VIE and (ii) the investors have sufficient rights to preclude consolidation by us. As such, we report our allocable percentage of the net assets of CTOPI on our consolidated balance sheets. We have deferred the recognition of income from CTOPI until cash is collected or appropriate contingencies have been eliminated and, therefore, do not recognize any income from equity investments in unconsolidated subsidiaries.

Deferred Financing Costs

Deferred Financing Costs

The deferred financing costs that are included in accrued interest receivable, prepaid expenses, and other assets 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.

Repurchase Obligations

Repurchase Obligations

We record investments financed with repurchase obligations 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 obligations are reported separately on our consolidated statements of operations.

Convertible Notes

Convertible Notes

The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or Codification, 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 fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital on our consolidated balance sheet as of December 31, 2013, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will increase in subsequent periods through the maturity date as the notes accrete to their par value over the same period.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the Codification 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.

The “Fair Value Measurement and Disclosures” Topic of the Codification 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 value of each asset recorded 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 assets and liabilities are measured 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 and liabilities that are measured at fair value are discussed further in Note 18. Generally, loans held-for-sale and certain of our loans receivable and securities are measured at fair value on a recurring basis, while impaired loans are measured at fair value on a nonrecurring basis.

The following valuation techniques were used to estimate the fair value of each type of asset and liability that was recorded at fair value:

Loans receivable, at fair value – Loans receivable are generally valued by discounting expected cash flows using internal cash flow models and estimated market rates. Expected cash flows of each loan are based on our Manager’s assumptions regarding the collection of principal and interest from the respective borrowers.

Other assets, at fair value – Our other assets balance includes certain commercial mortgage-backed securities, collateral debt obligations, and equity investments and are generally valued by a combination of (i) obtaining assessments from third-party dealers and (ii) in cases where such assessments are unavailable or deemed not to be indicative of fair value, discounting expected cash flows using internal cash flow models and estimated market discount rates. In the case of internal models, expected cash flows of each security are based on assumptions regarding the collection of principal and interest on the underlying loans and securities.

Impaired loans – Loans identified as impaired are collateral dependent loans. Impairment on these loans is measured by comparing our Manager’s estimation of 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.

Investment in CT Legacy Asset – We arrived at the fair value of our investment in CT Legacy Asset, LLC, or CT Legacy Asset, by discounting the net cash flows expected to be distributed to its equity holders after the repayment of the repurchase facility. To determine the net cash flows of CT Legacy Asset, our Manager estimated the timing and recovery amount for each of its assets.

We are also required by GAAP to disclose fair value information about financial instruments, which is otherwise not reported in the statement of financial position at fair value, to the extent it is practicable to estimate a fair value for those instruments. In cases where quoted market prices are not available, fair values are estimated using discounted cash flow or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the estimated market discount rate and the estimated future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in an immediate settlement of the instrument. Rather, these fair values reflect the amounts that our Manager believes are realizable in an orderly transaction among willing parties. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments, excluding those described above that are carried at fair value, for which it is practicable to estimate that value:

Cash and cash equivalents – The carrying amount of cash on deposit and in money market funds approximates fair value.

Restricted cash – The carrying amount of restricted cash approximates fair value.

Loans receivable, net – Other than impaired loans, these assets are recorded at their amortized cost and not at fair value. The fair values for these instruments are estimated by our Manager taking into consideration factors, including capitalization 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.

Secured notes – These notes are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar instrument would be priced today.

Repurchase obligations – These facilities are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today.

Convertible notes, net – These notes are recorded at their amortized cost and not at fair value. These convertible notes are publicly traded and their fair values are obtained using quoted market prices.

Securitized debt obligations – These obligations are recorded at the face value of outstanding obligations to third parties and not at fair value. The fair values for these instruments have been estimated by obtaining assessments from third-party dealers.

Participations sold – These obligations are recorded at their face value and not at fair value. The fair value was estimated based on the value of the related loan receivable asset.

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 16 for additional information.

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager and certain of its employees that vest over the life of the awards. 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.

Earnings per Share of Common Stock

Earnings per Share of Common Stock

Basic earnings per share, or Basic EPS, is computed based on the net earnings allocable to common stock and stock units, divided by the weighted-average number of shares of common stock and stock units outstanding during the period. Diluted earnings per share, or Diluted EPS, is determined using the treasury stock method, and is based on the net earnings allocable to common stock and stock units, divided by the weighted-average number of shares of common stock, stock units and potentially dilutive common stock issued upon conversion of our convertible notes.

We have separately determined Basic EPS and Diluted EPS for income from continuing operations, loss from discontinued operations, and for net income attributable to common stockholders. Refer to Note 13 for additional discussion of earnings per share.

Segment Reporting

Segment Reporting

We operate our real estate finance business through a Loan Origination segment and a CT Legacy Portfolio segment. The Loan Origination segment includes our activities associated with the origination and acquisition of mortgage loans, the capitalization of our loan portfolio, and the costs associated with operating our business generally. The CT Legacy Portfolio segment includes our activities specifically related to CT Legacy Partners, CT CDO I, and our equity investment in CTOPI. Our Manager identifies, makes operating decisions, and assesses the performance of each of our business segments based on financial and operating data and metrics generated from our internal information systems.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In April 2011, the FASB issued Accounting Standards Update, or ASU, 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring,” or ASU 2011-02. ASU 2011-02 primarily clarifies when creditors should classify loan modifications as troubled debt restructurings and provides examples and factors to be considered. Loan modifications that are considered troubled debt restructurings could result in additional disclosure requirements and could affect the related provision for loan losses. ASU 2011-02 was effective for the first interim or annual period beginning after June 15, 2011, with retrospective application to the beginning of the year. The adoption of ASU 2011-02 did not have a material impact on our consolidated financial statements, however, will impact how we account for loan modifications, and may result in an increase in the loan modifications we classify as troubled debt restructurings and, therefore, our provision for loan losses.

In April 2011, the FASB issued ASU 2011-03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 primarily removes certain criteria from the consideration of effective control over assets subject to repurchase agreements. The removal of these criteria will generally result in asset transfers pursuant to repurchase agreements being accounted for as secured borrowings, with both the transferred assets and repurchase liability recorded on the transferor’s balance sheet. ASU 2011-03 was effective for the first interim or annual period beginning after December 15, 2011, and is to be applied prospectively to transactions that occur subsequent to the effective date. The adoption of ASU 2011-03 did not have a material impact on our consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 860): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 amends existing guidance on fair value measurements related to (i) instruments held in a portfolio, (ii) instruments classified within stockholders’ equity, (iii) application of the “highest and best use” concept to nonfinancial assets, (iv) application of blockage factors and other premiums and discounts in the valuation process, and (v) other matters. In addition, ASU 2011-04 expanded the required disclosures around fair value measurements including (i) reporting the level in the fair value hierarchy used to value assets and liabilities, which are not measured at fair value, but where fair value is disclosed and (ii) qualitative disclosures about the sensitivity of Level 3 fair value measurements to changes in unobservable inputs used. ASU 2011-04 was effective for the first interim or annual period beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on our consolidated financial statements; however, it did expand our disclosures related to fair value measurements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 does not change the items that must be reported in other comprehensive income; however, it eliminates the option to present other comprehensive income on the statement of stockholders’ equity and instead requires either (i) a continuous statement of comprehensive income, which would replace the current statement of operations or (ii) an additional statement of other comprehensive income, which would immediately follow the statement of operations, and would report the components of other comprehensive income. ASU 2011-05 was effective for the first interim or annual period beginning after December 15, 2011, and should be applied retrospectively to all periods reported after the effective date. Our early adoption, as permitted, of ASU 2011-05 as of December 31, 2011 did not have a material impact on our consolidated financial statements, other than the change in presentation of comprehensive income as a separate financial statement.

In January 2013, the FASB issued ASU 2013-01, “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures About Offsetting Assets and Liabilities,” or ASU 2013-01. ASU 2013-01 was developed to clarify which instruments and transactions are subject to the offsetting disclosure requirements set forth by ASU 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” ASU 2013-01 was effective for the first interim or annual period beginning on or after January 1, 2013, and was applied retrospectively for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” or ASU 2013-02. ASU 2013-02 implements the previously deferred requirement to disclose reclassification adjustments into and out of accumulated other comprehensive income in either a note or on the face of the financial statements. ASU 2013-02 was effective for the first interim or annual period beginning after December 15, 2012, and was applied prospectively. As we have not reclassified any balances into or out of accumulated other comprehensive income, the adoption of ASU 2013-02 did not have a material impact on our consolidated financial statements.

In June 2013, the FASB issued ASU 2013-08, “Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” or ASU 2013-08. ASU 2013-08 amends the criteria for qualification as an investment company under Topic 946 of the FASB Accounting Standards Codification, or Topic 946, and requires additional disclosure by investment companies. ASU 2013-08 is effective for the first interim or annual period beginning after December 15, 2013, and is to be applied prospectively. We currently consolidate CT Legacy Partners, which accounts for its operations as an investment company under Topic 946. We do not expect the adoption of ASU 2013-08 to impact CT Legacy Partners’ status as an investment company. Further, because ASU 2013-08 specifically excludes REITs from its scope, it will not otherwise impact our consolidated financial statements.

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Other Expenses - Schedule of General and Administrative Expenses (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Professional services	$ 2,441	$ 895	$ 2,210
Operating and other costs	1,971	1,732	2,283
Transaction costs - investment management sale		3,870
Subtotal	4,412	6,497	4,493
Non-cash compensation expenses
Management incentive awards plan - CT Legacy Partners	4,915	2,232	3,054
Subtotal	6,242	3,808	3,765
Expenses of consolidated securitization vehicles	851	64	724
Total	11,505	10,369	8,982
Director [Member]
Non-cash compensation expenses
Stock-based compensation	263	223	206
Employee [Member]
Non-cash compensation expenses
Stock-based compensation	$ 1,064	$ 1,353	$ 505

XML

Other Expenses (Tables)

12 Months Ended

Dec. 31, 2013

Other Income And Expenses [Abstract]

Schedule of General and Administrative Expenses

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

	Year Ended December 31,
	2013		2012		2011
Professional services	$	2,441	$	895	$	2,210
Operating and other costs		1,971		1,732		2,283
Transaction costs – investment management sale(1)		—		3,870		—
		4,412		6,497		4,493
Non-cash compensation expenses
Management incentive awards plan – CT Legacy Partners(2)		4,915		2,232		3,054
Director stock-based compensation		263		223		206
Employee stock-based compensation		1,064		1,353		505
		6,242		3,808		3,765
Expenses of consolidated securitization vehicles		851		64		724
	$	11,505	$	10,369	$	8,982

(1) See Note 1 for discussion of the Investment Management Business Sale.

(2) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See below for discussion of the CT Legacy Partners management incentive awards plan.

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Loans Receivable - Types of Loans in Loan Portfolio, as well as Property Type and Geographic Distribution of Properties Securing these Loans (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 2,047,223	$ 141,500
Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	1,800,329	62,500
Percentage of Book Value	88.00%	44.00%
Subordinate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	246,894	79,000
Percentage of Book Value	12.00%	56.00%
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	2,047,223	141,500
Loans Receivable [Member] | Asset [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	2,047,223	141,500
Percentage of Book Value	100.00%	100.00%
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	864,666	111,500
Percentage of Book Value	42.00%	79.00%
Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	617,464
Percentage of Book Value	30.00%
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	390,492	30,000
Percentage of Book Value	19.00%	21.00%
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	174,601
Percentage of Book Value	9.00%
Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	828,571	27,000
Percentage of Book Value	40.00%	19.00%
West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	469,262	92,500
Percentage of Book Value	23.00%	65.00%
Southeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	243,798	12,404
Percentage of Book Value	12.00%	9.00%
Southwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	216,429	9,596
Percentage of Book Value	11.00%	7.00%
Northwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	166,207
Percentage of Book Value	8.00%
Midwest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	85,708
Percentage of Book Value	4.00%
United Kingdom [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 37,248
Percentage of Book Value	2.00%

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Debt Obligations - Balances of Each Entity's Outstanding Securitized Debt Obligations, their Respective Coupons and All-in Effective Costs, Including Amortization of Fees and Expenses (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Non-Recourse Securitized Debt Obligations
Principal Balance	$ 40,181
Book Value, beginning year	139,184
Book Value, ending year	40,181
Coupon	L+2.23 %
All-In Cost	L+2.23 %
Maturity Date	Jul. 31, 2039
CT CDO I [Member]
Non-Recourse Securitized Debt Obligations
Principal Balance	40,181
Book Value, beginning year	91,131
Book Value, ending year	40,181
Coupon	L+2.23 %
All-In Cost	L+2.23 %
Maturity Date	Jul. 31, 2039
GSMS 2006-FL8A [Member]
Non-Recourse Securitized Debt Obligations
Principal Balance
Book Value, beginning year	48,053
Book Value, ending year
Coupon
All-In Cost

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Assets
Cash and cash equivalents	$ 52,342	$ 15,423
Restricted cash	10,096	14,246
Loans receivable, net	2,047,223	141,500
Loans receivable, at fair value	40,665
Investment in CT Legacy Asset, at fair value		132,000
Equity investments in unconsolidated subsidiaries	22,480	13,306
Accrued interest receivable, prepaid expenses, and other assets	39,974	5,868
Total assets	2,212,780	322,343
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	56,972	21,209
Secured notes		8,497
Repurchase obligations	1,109,353
Convertible notes, net	159,524
Securitized debt obligations	40,181	139,184
Participations sold	90,000
Total liabilities	1,456,030	168,890
Equity
Common Stock	288	293
Additional paid-in capital	1,252,986	609,002
Accumulated other comprehensive income	798
Accumulated deficit	(536,170)	(535,851)
Total Blackstone Mortgage Trust, Inc. stockholders' equity	717,909	73,444
Non-controlling interests	38,841	80,009
Total equity	756,750	153,453
Total liabilities and equity	2,212,780	322,343
Liabilities
Accounts payable, accrued expenses, and other liabilities	56,972	21,209
Securitized debt obligations	40,181	139,184
Total liabilities	1,456,030	168,890
Restricted Stock [Member]
Equity
Common Stock	7
Variable Interest Entity, Primary Beneficiary [Member]
Assets
Loans receivable, net	47,000	141,500
Accrued interest receivable, prepaid expenses, and other assets	2,836	4,021
Total assets	49,836	145,521
Liabilities and Equity
Accounts payable, accrued expenses, and other liabilities	32	88
Securitized debt obligations	40,181	139,184
Total liabilities	40,213	139,272
Liabilities
Accounts payable, accrued expenses, and other liabilities	32	88
Securitized debt obligations	40,181	139,184
Total liabilities	$ 40,213	$ 139,272

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Organization - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2013 Segment
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of operating segments	2
Class A Common Stock [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Reverse stock split ratio of class A common stock	0.1

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Segment Reporting - Additional Information (Detail) (Maximum [Member], Non-domestic Sources [Member], Sales [Member])	12 Months Ended
	Dec. 31, 2013
Maximum [Member] | Non-domestic Sources [Member] | Sales [Member]
Segment Reporting Information [Line Items]
Percentage of revenues generated from non-domestic sources	1.00%

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Consolidated Statements of Changes in Equity (Deficit) (USD $) In Thousands	Total	Class A Common Stock [Member]	Restricted Class A Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total Blackstone Mortgage Trust, Inc Equity [Member]	Non-controlling Interests [Member]
Balance, beginning at Dec. 31, 2010	$ (411,187)	$ 219		$ 559,411	$ (50,462)	$ (920,355)	$ (411,187)
Restricted class A common stock earned	421	1	2	418			421
Allocation to non-controlling interests	24,533			37,156			37,156	(12,623)
Purchase of non-controlling interests	(142)			(142)			(142)
Deferred directors' compensation	206			206			206
Other comprehensive income	9,148				9,340		9,340	(192)
Consolidation of additional securitization vehicles	(4,360)				538	(4,898)	(4,360)
Net income	252,319					258,142	258,142	(5,823)
Contributions from non-controlling interests	125							125
Distributions to non-controlling interests	(2)							(2)
Balance, ending at Dec. 31, 2011	(128,939)	220	2	597,049	(40,584)	(667,111)	(110,424)	(18,515)
Issuance of class A common stock	10,000	50		9,950			10,000
Restricted class A common stock earned	997	6	(2)	993			997
Shares issued upon exercise of warrants		17		(17)
Deferred directors' compensation	1,027			1,027			1,027
Other comprehensive income	10,705				10,695		10,695	10
Deconsolidation of subsidiaries	29,889				29,889		29,889
Net income	279,804					181,024	181,024	98,780
Dividends declared on common stock	(49,764)					(49,764)	(49,764)
Distributions to non-controlling interests	(266)							(266)
Balance, ending at Dec. 31, 2012	153,453	293		609,002		(535,851)	73,444	80,009
Issuance of class A common stock	633,807	258		633,549			633,807
Adjustment to par value for reverse stock split and charter amendment		(263)		263
Restricted class A common stock earned	1,064		7	1,057			1,064
Issuance of convertible notes	8,826			8,826			8,826
Deferred directors' compensation	289			289			289
Other comprehensive income	798				798		798
Consolidation of subsidiaries	11,962					5,727	5,727	6,235
Net income	25,424					15,032	15,032	10,392
Dividends declared on common stock	(21,078)					(21,078)	(21,078)
Contributions from non-controlling interests	15,000							15,000
Distributions to non-controlling interests	(72,795)							(72,795)
Balance, ending at Dec. 31, 2013	$ 756,750	$ 288	$ 7	$ 1,252,986	$ 798	$ (536,170)	$ 717,909	$ 38,841

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Commitments and Contingencies - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013 Directors Loans
Commitments And Contingencies [Line Items]
Unfunded commitments	$ 164,300,000
Commitments expiration period	5 years
Number of loans receivable	15
Number of board of directors	8
Number of directors entitled to annual compensation	5
CT Opportunity Partners I, LP [Member]
Commitments And Contingencies [Line Items]
Maximum exposure to loss for incentive compensation	10,200,000
Pending Litigation [Member]
Commitments And Contingencies [Line Items]
Reserves recorded for pending litigation	0
Five Board of Directors [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	125,000
Three Board of Directors [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	0
Four Directors [Member]
Commitments And Contingencies [Line Items]
Percentage of compensation paid in cash	50.00%
Percentage of compensation in the form of deferred stock units	50.00%
Chairperson of Audit Committee [Member]
Commitments And Contingencies [Line Items]
Annual cash compensation	$ 12,000

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Loans Held-for-Sale - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended			3 Months Ended	12 Months Ended	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2011	Dec. 31, 2012	Mar. 31, 2013 Loans Held-for-Sale, Net [Member]	Dec. 31, 2013 Loans Held-for-Sale, Net [Member]	Mar. 31, 2013 Subordinate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount reclassified on subordinate mortgage loan				$ 4,600		$ 6,600
Recovery of valuation allowance on loans held for sale	1,259	(1,456)			(1,259)
Loans held-for-sale	$ 0		$ 0

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Subsequent Events - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			1 Months Ended	0 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Subsequent Event [Member] SecurityLoan	Jan. 29, 2014 Subsequent Event [Member] Wells Fargo [Member]	Jan. 14, 2014 Subsequent Event [Member] Class A Common Stock [Member]
Subsequent Event [Line Items]
Common stock issued, shares	25,875,000	669,047			9,775,000
Common stock offering price per share					$ 26.75
Proceeds from shares issued, net of underwriting discounts and other offering expenses	$ 633,807	$ 10,000			$ 256,100
Facility size			286,400	32,000
Loan commitments funded at closing			$ 208,800
Number of loans originated			3
Maturity period				From February 9, 2014 to April 9, 2014
Extended term of agreement period				10 months

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Loans Held-for-Sale (Tables)

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Schedule of Activity Relating to Our Loans Held-for-Sale

Activity relating to our loans held-for-sale was ($ in thousands):

	Gross Book Value			Valuation Allowance			Net Book Value
December 31, 2012	$	—		$	—		$	—
Reclassification from loans receivable		6,601			(4,601	)		2,000
Valuation allowance on loans held-for-sale		—			1,259			1,259
Loans sold		(6,601	)		3,342			(3,259	)
December 31, 2013	$	—		$	—		$	—

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Investment in CT Legacy Asset, at Fair Value - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Investment [Line Items]
Net investment in CT Legacy Asset		$ 132,000,000
Beneficial ownership of CT Legacy Partners	52.00%
Percentage of class B common stock dividends payable to holders	25.00%
Aggregate cash distributions to all other classes of stock	50,000,000
Cumulative preferred stock distributions, amount	$ 1,000,000
Cumulative preferred stock distributions, percent of assets	2.50%
Common stock, shares outstanding	28,802,000	2,927,000
Class A-1 [Member]
Investment [Line Items]
Equity interest in subsidiary, number of shares	4,393,750
Common stock, shares outstanding	4,400,000
Common Class A-2 [Member]
Investment [Line Items]
Equity interest in subsidiary, number of shares	775,000
Common stock, shares outstanding	5,600,000
Common Class B [Member]
Investment [Line Items]
Equity interest in subsidiary, number of shares	118,651
Common stock, shares outstanding	1,500,000
Former Lenders Under Credit Facility [Member]
Investment [Line Items]
Beneficial ownership of CT Legacy Partners	48.00%

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Discontinued Operations

12 Months Ended

Dec. 31, 2013

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

15. DISCONTINUED OPERATIONS

As more fully described in Note 3, we sold our investment management business, CTIMCO, to an affiliate of Blackstone in December 2012. As a result, the income and expense items related to our investment management business have been reclassified to loss from discontinued operations on our consolidated statements of operations.

The following table provides additional information on the components of discontinued operations ($ in thousands):

	Year Ended December 31,
	2013		2012			2011
Servicing fees	$	—	$	9,686		$	8,497
Management fees from affiliates		—		6,312			6,618
Total revenues				15,998			15,115
General and administrative expenses		—		12,938			14,884
Income from discontinued operations before income taxes		—		3,060			231
Income tax provision		—		(5,198	)		(1,121	)
Loss from discontinued operations	$	—	$	(2,138	)	$	(890	)
Loss on sale of discontinued operations		—		(271	)		—
Loss from discontinued operations per share of common stock:
Basic	$	—	$	(1.03	)	$	(0.39	)
Diluted	$	—	$	(1.03	)	$	(0.39	)

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Loans Receivable, at Fair Value (Tables)

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Activity Relating to Loans Receivable, at Fair Value

Activity relating to our loans receivable, at fair value was ($ in thousands):

December 31, 2012	$	—
Consolidation of CT Legacy Partners		150,332
Capitalized interest		984
Loan satisfactions		(110,347	)
Partial loan repayments		(307	)
Gain on investments at fair value		6,816
Reclassification to other assets		(6,813	)
December 31, 2013	$	40,665

Overall Statistics for Loans Receivable Portfolio Held at Fair Value

The following table details overall statistics for CT Legacy Partners’ loans receivable, which were held at fair value as of December 31, 2013 ($ in thousands):

	Loans Receivable, at Fair Value
	Floating Rate			Fixed Rate			Total
Number of loans		4			3			7
Net book value	$	16,990		$	23,675		$	40,665
Weighted-average cash coupon(1)		L+4.26	%		8.14	%		6.24	%
Weighted-average all-in yield(1)		L+4.26	%		8.14	%		6.24	%
Weighted-average maximum maturity (years)(2)		0.9			0.8			0.9

(1) All floating rate loans were indexed to LIBOR as of December 31, 2013, however, one of our loans receivable earns interest based on a minimum LIBOR floor of 2.00%. Rates exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

Types of Loans in Loan Portfolio, Property Type and Geographic Distribution of Properties Securing these Loans

The tables below detail the types of loans in CT Legacy Partners’ loan portfolio, as well as the property type and geographic distribution of the properties securing these loans ($ in thousands):

	December 31, 2013
Asset Type	Fair Value		Percentage
Senior mortgages	$	14,990		37	%
Subordinate loans(1)		25,675		63
	$	40,665		100	%
Property Type	Fair Value		Percentage
Office	$	25,675		63	%
Hotel		14,990		37
	$	40,665		100	%
Geographic Location	Fair Value		Percentage
Northeast	$	25,675		63	%
West		14,990		37
	$	40,665		100	%

(1) Comprised entirely of mezzanine loans as of December 31, 2013.

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Summary of Quarterly Results of Operations - Summary of Quarterly Results of Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended												12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 26,837	$ 18,853	$ 6,017	$ 1,456	$ 6,517	$ 6,944	$ 6,763	$ 14,716	$ 21,975	$ 25,642	$ 32,553	$ 36,991
Net income (loss)	9,728	10,526	6,768	(1,597)	122,931	12,900	3,351	140,622	(16,078)	8,256	6,224	253,917	25,424	279,804	252,319
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.	$ 7,079	$ 8,320	$ 2,748	$ (3,115)	$ 105,189	$ 6,999	$ 2,283	$ 66,553	$ (8,320)	$ 13,722	$ (1,845)	$ 254,585	$ 15,032	$ 181,024	$ 258,142
Net income (loss) per share of class A common stock:
Basic	$ 0.24	$ 0.29	$ 0.22	$ (1.03)	$ 42.21	$ 3.02	$ 1.00	$ 29.14	$ (3.66)	$ 6.04	$ (0.81)	$ 113.47	$ 0.81	$ 77.16	$ 113.92
Diluted	$ 0.24	$ 0.29	$ 0.22	$ (1.03)	$ 40.65	$ 2.84	$ 0.93	$ 27.39	$ (3.66)	$ 5.69	$ (0.81)	$ 110.36	$ 0.81	$ 73.13	$ 107.78

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Stock-Based Incentive Plans

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Incentive Plans

17. STOCK-BASED INCENTIVE PLANS

We do not have any employees following the consummation of the Investment Management Business Sale on December 19, 2012, as described in Note 3. However, as of December 31, 2013, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors are compensated, in part, through the issuance of stock-based instruments. In addition, certain of our former employees continue to participate in the CTOPI incentive management fee grants and the CT Legacy Partners management incentive awards plan.

We had stock-based incentive awards outstanding under five benefit plans as of December 31, 2013: (i) our amended and restated 1997 non-employee director stock plan, or 1997 Plan; (ii) our 2007 long-term incentive plan, or 2007 Plan; (iii) our 2011 long-term incentive plan, or 2011 Plan; (iv) our 2013 stock incentive plan, or 2013 Plan; and (v) our 2013 manager incentive plan, or 2013 Manager Plan. We refer to our 1997 Plan, our 2007 Plan, and our 2011 Plan as our Expired Plans and we refer to our 2013 Plan and 2013 Manager Plan as our Current Plans.

Our Expired Plans have expired and no new awards may be issued under them. Under our Current Plans, a maximum of 2,160,106 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 December 31, 2013, there were 1,450,224 shares available under the Current Plans.

As of December 31, 2013, we had 700,000 shares of restricted class A common stock outstanding, which were issued under our Current Plans. These shares generally vest in quarterly installments over a three-year period, pursuant to the terms of the respective award agreements and the terms of the Current Plans.

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Equity Investments in Unconsolidated Subsidiaries - Activity Relating to Our Equity Investments in Unconsolidated Subsidiaries (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2011
Schedule of Equity Method Investments [Line Items]
Advance distribution of incentive compensation	$ 7,151	$ 4,345
CT Opportunity Partners I, LP [Member]
Schedule of Equity Method Investments [Line Items]
Advance distribution of incentive compensation	$ 10,200

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities
Net income	$ 25,424	$ 279,804	$ 252,319
Adjustments to reconcile net income to net cash provided by operating activities
Net impairments recognized in earnings		160	49,121
Recovery of provision for loan losses		(36,147)	(19,326)
Valuation allowance on loans held-for-sale	(1,259)		1,456
Gain on investments at fair value	(7,417)
Fair value adjustment on investment in CT Legacy Asset		(51,904)
Gain on deconsolidation of subsidiary		(200,283)
Gain on sale of investments		(6,000)
Gain on extinguishment of debt	(38)		(271,031)
Income from equity investments in unconsolidated subsidiaries		(1,781)	(3,649)
Distributions of income from unconsolidated subsidiaries	8,795	1,933	1,898
Distributions from CT Legacy Asset		9,581
Loss on sale of discontinued operations		271
Non-cash compensation expense	6,242	3,808	3,765
Amortization of premiums/discounts on loans and securities and deferred interest on loans	(6,290)	(566)	(1,872)
Amortization of deferred gains and losses on settlement of swaps		(56)	(109)
Amortization of deferred financing costs and premiums/discount on debt obligations	4,935	12,133	11,984
Loss on interest rate swaps not designated as cash flow hedges	4	2,772	6,336
Changes in assets and liabilities, net
Accrued interest receivable, prepaid expenses, and other assets	139	(3,019)	662
Deferred income taxes		1,268	(611)
Accounts payable, accrued expenses, and other liabilities	(1,843)	(5,206)	(2,059)
Net cash provided by operating activities	28,692	6,768	28,884
Cash flows from investing activities
Proceeds from Investment Management Business Sale		21,424
Principal collections and proceeds from securities	416	56,544	94,407
Origination and fundings of loans receivable	(2,327,913)
Origination and exit fees received on loans receivable	25,402
Principal collections and proceeds from the sale of loans receivable	508,302	115,918	2,007,354
Distributions from equity investments	7,151		4,345
Contributions to unconsolidated subsidiaries		(4,030)	(3,413)
Distributions from unconsolidated subsidiaries		1,006	3,697
Decrease (increase) in restricted cash	4,151	(1,261)	(12,985)
Net cash (used in) provided by investing activities	(1,782,491)	189,601	2,093,405
Cash flows from financing activities
Repayment and purchase of secured notes	(11,059)		(405)
Borrowings under repurchase obligations	1,667,623	123,977
Repayments under repurchase obligations	(578,484)	(58,464)	(314,215)
Proceeds from issuance of convertible notes	168,415
Repayment of securitized debt obligations	(98,965)	(178,945)	(1,821,498)
Proceeds from sale of loan participations	90,000
Borrowings under legacy credit facilities			83,000
Repayments of legacy credit facilities		(63,000)	(47,572)
Payment of deferred financing costs	(8,867)		(11,126)
Settlement of interest rate swaps	(6,123)
Contributions from non-controlling interests	15,000		125
Purchase of and distributions to non-controlling interests	(72,853)	(16)	(144)
Proceeds from issuance of common stock	633,807	10,000
Dividends paid on class A common stock	(7,776)	(48,960)
Vesting of restricted class A common stock		(356)	(85)
Net cash provided by (used in) financing activities	1,790,718	(215,764)	(2,111,920)
Net increase (decrease) in cash and cash equivalents	36,919	(19,395)	10,369
Cash and cash equivalents at beginning of period	15,423	34,818	24,449
Cash and cash equivalents at end of period	52,342	15,423	34,818
Supplemental disclosure of cash flows information
Payments of interest	(12,702)	(26,363)	(81,697)
Receipts (payments) of income taxes	8	(2,747)	(4,799)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	13,302	804
(Consolidation) deconsolidation of subsidiaries	$ (38,913)	$ 371,621	$ 572,246

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	28,802,000	2,927,000
Common stock, shares outstanding	28,802,000	2,927,000
Restricted Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	700,000	0
Common stock, shares outstanding	700,000	0

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Debt Obligations

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Debt Obligations

10. DEBT OBLIGATIONS

Secured Notes

In October 2013, we received a $36.2 million distribution from CT Legacy Partners in respect of our common equity interests, the majority of which served as collateral under our secured notes. Accordingly, we repaid these notes in full, and recognized a $2.0 million prepayment penalty as a component of interest expense. We therefore had no secured notes outstanding as of December 31, 2013.

Repurchase Facilities

During 2013, we entered into four revolving repurchase facilities and four asset-specific repurchase agreements, providing an aggregate $1.9 billion of credit. As of December 31, 2013, we had aggregate borrowings of $1.1 billion outstanding under repurchase facilities, with a weighted-average cash coupon of LIBOR plus 2.12% per annum and a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.39% per annum. As of December 31, 2013, these facilities had a weighted-average initial maturity, excluding extension options and term-out provisions, of 2.4 years.

The following table details the repurchase obligations outstanding as of December 31, 2013 ($ in thousands):

			Collateral Assets				Repurchase Borrowings(3)
Lender	Maximum Facility Size(1)		Principal Balance(2)		Net Book Value(2)		Potential		Current		Available
Revolving Repurchase Facilities
Bank of America	$	500,000	$	355,981	$	352,995	$	280,500	$	271,320	$	9,180
Citibank		500,000		613,339		609,236		460,765		334,692		126,073
JP Morgan(4)		614,525		442,035		439,706		340,912		257,610		83,302
Subtotal		1,614,525		1,411,355		1,401,937		1,082,177		863,622		218,555
Asset-Specific Repurchase Agreements
Wells Fargo(5)		288,354		334,857		333,418		245,731		245,731		—
Total	$	1,902,879	$	1,746,212	$	1,735,355	$	1,327,908	$	1,109,353	$	218,555

(1) Maximum facility size represents the total amount of borrowings provided for in each repurchase agreement, however these borrowings are only available to us once sufficient collateral assets have been pledged under each facility.

(2) The difference between principal balance and net book value of collateral assets is due to deferred origination fees.

(3) Potential borrowings represent 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 revolving credit facility.

(4) The JP Morgan maximum facility size is composed of a $250.0 million facility, a £153.0 million ($252.5 million) facility, and $112.0 million related solely to a specific asset with a repurchase date of June 27, 2014.

(5) Represents an aggregate of four asset-specific repurchase agreements with Wells Fargo.

On December 30, 2013, we entered into a $34.9 million, asset-specific, repurchase agreement with Wells Fargo with an initial maturity date of March 30, 2014, which may be extended for a period of three months. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.00%. This repurchase agreement is an interim financing of one loan, which is expected to be the initial collateral for a future revolving facility with Wells Fargo. We guarantee 100% of the obligations under this repurchase agreement.

On December 20, 2013, we entered into a $252.5 million, or £153.0 million, master repurchase agreement with JP Morgan. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 3.25% depending on the attributes of the collateral loans. Individual advances can be made at any time prior to the maturity date of December 20, 2016. Obligations under this repurchase agreement are not recourse to us, except that we guarantee up to 25% of the advances related to senior mortgage collateral and 100% of the advances related to mezzanine and junior mortgage collateral.

On July 30, 2013, we entered into a $59.8 million, asset-specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.25%. The initial maturity date of the facility is August 8, 2015, which may be extended pursuant to three one-year extension options, each of which may be exercised by us. We do not guarantee the obligations under this repurchase agreement other than in the case of customary “bad-boy” events.

On July 8, 2013, we entered into a $32.0 million, asset-specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 3.50%. The initial maturity date of the facility is February 9, 2014, which may be extended pursuant to a one-year extension option, which may be exercised by us. We do not guarantee the obligations under this repurchase agreement other than in the case of customary “bad-boy” events.

On June 28, 2013, we entered into a $250.0 million master repurchase agreement with JP Morgan. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 3.25% depending on the attributes of the collateral loans. The repurchase agreement specifies a one-year availability period, during which new advances can be made and which availability period is renewable at the discretion of JP Morgan. Maturity dates for individual advances are tied to their respective collateral loan maturity dates subject to annual renewal at our discretion. In the event that the availability period is not renewed, it is followed by a two-year ‘stabilization’ period and then a ‘term out’ period, during which all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. Obligations under this repurchase agreement are not recourse to us, except that we guarantee up to 25% of the advances related to senior mortgage collateral and 100% of the advances related to mezzanine and junior mortgage collateral. On September 30, 2013, we entered into an agreement with JP Morgan to advance $112.0 million under the facility related to a specific asset and to increase the maximum facility size by the amount of that advance, which matures in June 2014.

On June 12, 2013, we entered into a $250.0 million master repurchase agreement with Citibank. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 2.00% and 2.25% depending on the attributes of the collateral loans. The initial facility expiration date is June 12, 2016, which may be extended annually by us. If upon the initial facility expiration date, Citibank does not extend the facility availability period, in its sole discretion, then no new advances may be drawn and all collateral interest and principal proceeds would be required to repay existing advances, subject to certain provisions for REIT income distribution requirements. In either case, individual advances mature upon the maturity date of the respective collateral maturity dates. We guarantee up to 25% of the advances under this facility. Otherwise, obligations under this repurchase agreement are not recourse to us. On July 26, 2013, we amended our master repurchase agreement with Citibank to provide for a second $250.0 million tranche of potential advances. The second tranche is subject to a one-year ‘availability period,’ during which new financing transactions can be initiated. All other terms, including maturity dates, for the second tranche advances are the same as the original $250.0 million tranche.

On June 7, 2013, we entered into a $250.0 million, asset-specific, repurchase agreement with Wells Fargo. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of 2.50%. The initial maturity date of the facility is June 7, 2016, which may be extended pursuant to (i) two one-year extension options, each of which may be exercised by us, and (ii) an additional one-year extension option, contingent upon notice regarding the failure of the collateral mortgage loan to be repaid at its final maturity. We do not guarantee the obligations under this repurchase agreement other than in the case of customary “bad-boy” events.

On May 21, 2013, we entered into a $250.0 million master repurchase agreement with Bank of America. Advances under the repurchase agreement accrue interest at a per annum pricing rate equal to LIBOR plus a margin of between 1.75% and 3.25% depending on the attributes of the collateral loans. The initial maturity date of the facility is May 21, 2016, subject to two one-year extension options, each of which may be exercised by us. Obligations under this repurchase agreement are not recourse to us, except that we guarantee up to 50% of the advances related to senior collateral and 100% of the advances related to mezzanine and junior mortgage collateral. On September 23, 2013, we amended our master repurchase agreement with Bank of America to provide for an additional $250.0 million of potential advances. All of the terms of the additional potential advances, including maturity dates, are the same as the original $250.0 million.

Each of the guarantees related to our master repurchase agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges shall be not less than 1.40 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $525.0 million plus 75% of the net cash proceeds of future equity issuances; (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 80% of our total assets. As of December 31, 2013, we were in compliance with these covenants.

The weighted-average outstanding repurchase obligation balance for the year ended December 31, 2013, was $356.4 million.

Repurchase Obligations – CT Legacy Partners

As of March 31, 2013, CT Legacy Partners was party to a repurchase facility with JP Morgan with an outstanding balance of $20.2 million. On June 5, 2013, CT Legacy Partners repaid the outstanding balance and terminated the repurchase facility. CT Legacy Partners has no outstanding debt obligations as of December 31, 2013.

Convertible notes, net

In November 2013, we issued $172.5 million of 5.25% convertible senior notes due on December 1, 2018, or Convertible Notes. The Convertible Notes’ issuance costs are amortized through interest expense over the life of the Convertible Notes using the effective interest method. Including this amortization, our all-in cost of the Convertible Notes is 5.87% per annum.

The Convertible Notes are convertible, at the holders’ option, into shares of our class A common stock at any time prior to the close of business on the business day immediately preceding September 1, 2018, subject to certain limitations, 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. The conversion rate is initially set to equal 34.8943 shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $28.66 per share of class A common stock, subject to adjustment upon the occurrence of certain events. We may not redeem the Convertible Notes prior to maturity.

We recorded a $9.1 million discount upon issuance of the Convertible Notes based on the implied value of the conversion option and an effective interest rate of 6.50%. Including the amortization of this discount and the issuance costs, our total cost of the Convertible Notes is 7.16% per annum. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

Securitized Debt Obligations

The balances of each of our consolidated securitization vehicles’ outstanding securitized debt obligations, their respective coupons and all-in effective costs, including the amortization of fees and expenses, were as follows ($ in thousands):

	December 31, 2013				December 31, 2012		December 31, 2013
Non-Recourse Securitized Debt Obligations	Principal Balance		Book Value		Book Value		Coupon(1)			All-In Cost(1)			Maturity Date(2)
CT CDO I	$	40,181	$	40,181	$	91,131		L+2.23	%		L+2.23	%		July 2039
GSMS 2006-FL8A		—		—		48,053		—			—			N/A
	$	40,181	$	40,181	$	139,184		L+2.23	%		L+2.23	%		July 2039

(1) Represents a weighted-average for the facility. All non-recourse securitization obligations are floating rate obligations indexed to LIBOR as of December 31, 2013.

(2) Maturity date represents the contractual maturity of the securitization vehicle. Repayment of securitized debt is a function of collateral cash flows, which are disbursed in accordance with the contractual provisions of the vehicle, and is generally expected to occur prior to the maturity date above.

As of December 31, 2013, loans receivable with an aggregate book value of $47.0 million served as collateral for the non-recourse debt and equity securities issued by our consolidated securitizations vehicles. As of December 31, 2012, loans receivable with an aggregate book value of $141.5 million served as collateral for the securities issued by these same vehicles.

Our consolidated securitization vehicle, CT CDO I, is subject to interest coverage and overcollateralization tests which, when breached, provide for hyperamortization of the senior notes by a redirection of cash flow that would otherwise have been paid to the subordinate classes, some of which are owned by us. Furthermore, CT CDO I provides for the reclassification of interest proceeds from impaired collateral as principal proceeds, which also serve to hyperamortize the senior notes sold. As a result of collateral asset impairments and the related breaches of these interest coverage and overcollateralization tests, we currently do not receive any cash payments from CT CDO I.

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Schedule IV - Reconciliation of Mortgage Loans on Real Estate (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Mortgage Loans On Real Estate [Abstract]
Non-cash deferred interest on mortgage loans	$ 325,000	$ 26,000	$ 478,000

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Transactions with Related Parties - Additional Information (Detail) (USD $)	0 Months Ended		1 Months Ended	12 Months Ended					0 Months Ended	12 Months Ended	0 Months Ended		1 Months Ended	12 Months Ended					12 Months Ended
	Oct. 02, 2013	May 13, 2013	Oct. 23, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	May 30, 2013	May 31, 2013 Class A Common Stock [Member]	Oct. 03, 2013 Manager [Member]	Dec. 31, 2013 Manager [Member]	Dec. 20, 2012 Sale to Holdings III [Member]	May 13, 2013 Blackstone [Member]	Oct. 23, 2013 Affiliate of Manager [Member]	Dec. 31, 2013 Affiliate of Manager [Member]	Nov. 19, 2013 Affiliate of Manager [Member]	May 13, 2013 Affiliate of Manager [Member]	May 22, 2013 Affiliate of Manager [Member] Class A Common Stock [Member]	Feb. 11, 2014 Affiliate of Manager [Member] Subsequent Event [Member] Class A Common Stock [Member]	Dec. 31, 2013 Affiliate of our Manager [Member]	Dec. 31, 2013 Affiliate of our Manager [Member] CT CDO I [Member]	Dec. 31, 2013 W.R. Berkley Corporation [Member]	Feb. 11, 2014 W.R. Berkley Corporation [Member] Subsequent Event [Member]
Related Party Transaction [Line Items]
Class A common shares acquired by Holdings III, price per share											$ 20.00
Class A common shares acquired by Holdings III, shares				25,875,000	669,047						500,000
Accrued management fees payable														$ 2,500,000
Management fees paid to Manager														3,400,000
Preferred distributions payable to affiliate of our Manager																			193,000
Payments of preferred distributions to affiliate of our Manager																			3,900,000
Issuance of restricted class A common stock				700,000	36,493	26,161			339,431
Common stock value				288,000	293,000				8,500,000								1,000,000
Vesting period of restricted class A common stock									3 years
Non-cash expense										767,000
Special servicing fees																				847,000
Joint venture agreement date		May 13, 2013
Percentage of equity interest purchased		100.00%					100.00%					16.70%				83.30%
Joint venture agreement end date		May 30, 2013
Charge to non-controlling interest from purchase of equity interests at fair value		193,000
Common stock, shares issued				28,802,000	2,927,000			25,875,000									1,960,784
Common stock, par value				$ 0.01	$ 0.01												$ 25.50
Common stock, shares outstanding percentage																		7.10%
Convertible notes				159,524,000											188,000
Amount of loan originated	71,000,000			2,327,913,000
Purchased loan from third-party			176,900,000
Modification fee													2,300,000
Aggregate amount of offering as stated in letter agreement, threshold																					$ 30,000,000
Beneficially owned common stock and stock units (as a percent)																						1.00%

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Fair Values - Schedule of Range of Key Assumptions for Each Type of Loans Receivable (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	15.00%
Book Value	$ 40,665
Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	7.00%
Recovery Percentage	100.00%
Book Value Sensitivity to a 100 bp Discount Rate Increase	(1.40%)
Book Value	15,000
Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recovery Percentage	100.00%
Book Value Sensitivity to a 100 bp Discount Rate Increase	(0.30%)
Book Value	$ 25,700
Office [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	6.00%
Office [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Discount Rate	15.00%

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Feb. 11, 2014	Jun. 28, 2013
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Trading Symbol	BXMT
Entity Registrant Name	BLACKSTONE MORTGAGE TRUST, INC.
Entity Central Index Key	0001061630
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		39,276,651
Entity Public Float			$ 637,303,991

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Participations Sold

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Participations Sold

11.    PARTICIPATIONS SOLD

Participations sold represent interests in certain loans that we originated and subsequently sold. In certain instances, we present these participations sold as both assets and non-recourse liabilities because these arrangements do not qualify as sales under GAAP. As of December 31, 2013, we had one such participation sold with a book balance of $90.0 million at a cash coupon of LIBOR plus 5.12% and a weighted-average yield of LIBOR plus 5.26%. The income earned on this loan is recorded as interest income and an identical amount is recorded as interest expense on our consolidated statements of operations.

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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 $) In Thousands, except Share data, unless otherwise specified	3 Months Ended												12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Abstract]
Net income	$ 7,079	$ 8,320	$ 2,748	$ (3,115)	$ 105,189	$ 6,999	$ 2,283	$ 66,553	$ (8,320)	$ 13,722	$ (1,845)	$ 254,585	$ 15,032	$ 181,024	$ 258,142
Weighted-average shares outstanding													18,520,052	2,345,943	2,266,043
Warrants and options outstanding for the purchase of class A common stock														129,351	129,000
Weighted-average shares outstanding, diluted													18,520,052	2,475,294	2,395,043
Per share amount, basic	$ 0.24	$ 0.29	$ 0.22	$ (1.03)	$ 42.21	$ 3.02	$ 1.00	$ 29.14	$ (3.66)	$ 6.04	$ (0.81)	$ 113.47	$ 0.81	$ 77.16	$ 113.92
Per share amount, diluted	$ 0.24	$ 0.29	$ 0.22	$ (1.03)	$ 40.65	$ 2.84	$ 0.93	$ 27.39	$ (3.66)	$ 5.69	$ (0.81)	$ 110.36	$ 0.81	$ 73.13	$ 107.78

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Fair Values - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities recorded at fair value	$ 0	$ 0
Principal balance	10,500,000
Significant unobservable inputs, discount rate	15.00%
Hotel [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Significant unobservable inputs, discount rate	7.00%
Hotel [Member] | CT CDO I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal balance	$ 10,500,000
Number of loans - reported at fair value	1

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income from loans and other investments
Interest and related income	$ 53,164	$ 34,939	$ 117,161
Less: Interest and related expenses	18,017	38,138	96,974
Income (loss) from loans and other investments, net	35,147	(3,199)	20,187
Other expenses
Management fees	5,937
General and administrative expenses	11,505	10,369	8,982
Total other expenses	17,442	10,369	8,982
Total other-than-temporary impairments of securities			(49,309)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		(160)	1,243
Impairment of real estate held-for-sale			(1,055)
Net impairments recognized in earnings		(160)	(49,121)
Recovery of provision for loan losses		36,147	19,326
Valuation allowance on loans held-for-sale	1,259		(1,456)
Gain on investments at fair value	7,417
Fair value adjustment on investment in CT Legacy Asset		51,904
Gain on deconsolidation of subsidiary		200,283
Gain on sale of investments		6,000
Gain on extinguishment of debt	38		271,031
Income from equity investments in unconsolidated subsidiaries		1,781	3,649
Income before income taxes	26,419	282,387	254,634
Income tax provision	995	174	1,425
Income from continuing operations	25,424	282,213	253,209
Loss from discontinued operations, net of tax		(2,138)	(890)
Loss on sale of discontinued operations		(271)
Net income	25,424	279,804	252,319
Net (income) loss attributable to non-controlling interests	(10,392)	(98,780)	5,823
Net income attributable to Blackstone Mortgage Trust, Inc.	$ 15,032	$ 181,024	$ 258,142
Income from continuing operations per share of common stock
Basic	$ 0.81	$ 78.19	$ 114.31
Diluted	$ 0.81	$ 74.16	$ 108.17
Loss from discontinued operations per share of common stock
Basic		$ (1.03)	$ (0.39)
Diluted		$ (1.03)	$ (0.39)
Net income per share of common stock
Basic	$ 0.81	$ 77.16	$ 113.92
Diluted	$ 0.81	$ 73.13	$ 107.78
Weighted-average shares of common stock outstanding
Basic	18,520,052	2,345,943	2,266,043
Diluted	18,520,052	2,475,294	2,395,043

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Loans Receivable

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Loans Receivable

5. LOANS RECEIVABLE

As of December 31, 2013, our consolidated balance sheet included $2.0 billion of loans receivable related to our Loan Origination segment and $47.0 million of loans receivable owned by CT CDO I, a consolidated securitization vehicle included in our CT Legacy Portfolio segment. Refer to Note 21 for further discussion of our operating segments.

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

	Gross Book Value			Provision for Loan Losses			Net Book Value
December 31, 2012	$	164,180		$	(22,680	)	$	141,500
Loan originations		2,325,433			—			2,325,433
Additional fundings		2,480			—			2,480
Loan satisfactions		(260,400	)		—			(260,400	)
Partial loan repayments and sales		(141,150	)		—			(141,150	)
Deferred origination fees and expenses		(25,402	)		—			(25,402	)
Amortization of deferred fees and expenses		5,965			—			5,965
Unrealized gain on foreign currency translation		797			—			797
Reclassification to loans held-for-sale		(6,601	)		4,601			(2,000	)
December 31, 2013	$	2,065,302		$	(18,079	)	$	2,047,223

As of December 31, 2013, we had unfunded commitments of $164.3 million related to 15 loans receivable, which amounts will only be funded to finance lease-related or capital expenditures by our borrowers. These future commitments will expire over the next five years.

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

	December 31, 2013			December 31, 2012
Number of loans		31			7
Principal balance	$	2,076,411		$	164,180
Net book value(1)	$	2,047,223		$	141,500
Weighted-average cash coupon(2)		L+4.64	%		L+4.73	%
Weighted-average all-in yield(2)		L+5.26	%		L+4.74	%
Weighted-average maximum maturity (years)(3)		4.1			0.7

(1) The primary differences between the principal balance and net book value are deferred origination fees on loans in our Loan Origination segment, and provisions for loan losses in our CT Legacy Portfolio segment.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013 and 2012; however, certain of our loans receivable earn a minimum LIBOR floor ranging from 0.20% to 1.00%. Amounts exclude all non-performing loans.

(3) Maximum maturity date assumes all extension options are exercised.

The tables below detail the types of loans in our loan portfolio, as well as the property type and geographic distribution of the properties securing these loans ($ in thousands):

	December 31, 2013					December 31, 2012
Asset Type	Net Book Value		Percentage			Net Book Value		Percentage
Senior mortgage loans(1)	$	1,800,329		88	%	$	62,500		44	%
Subordinate loans(2)		246,894		12			79,000		56
	$	2,047,223		100	%	$	141,500		100	%
Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	864,666		42	%	$	111,500		79	%
Multifamily		617,464		30			—		—
Hotel		390,492		19			30,000		21
Other		174,601		9			—		—
	$	2,047,223		100	%	$	141,500		100	%
Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
Northeast	$	828,571		40	%	$	27,000		19	%
West		469,262		23			92,500		65
Southeast		243,798		12			12,404		9
Southwest		216,429		11			9,596		7
Northwest		166,207		8			—		—
Midwest		85,708		4			—		—
United Kingdom		37,248		2			—		—
	$	2,047,223		100	%	$	141,500		100	%

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

(2) Includes subordinate interests in mortgages and mezzanine loans.

Loan risk ratings

Quarterly, our Manager evaluates our loan portfolio as described in Note 2. In conjunction with our quarterly loan portfolio review, our Manager assesses the performance of each loan, and assigns a risk rating based on several factors, including risk of loss, current LTV, collateral performance, structure, exit plan, and sponsorship. Loans are rated “1” (less risk) through “8” (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):

	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		29	$	2,038,863	$	2,020,223		2	$	47,000	$	47,000
4 – 5		—		—		—		2		92,500		92,500
6 – 8		2		37,548	$	27,000		3		24,680		2,000
		31	$	2,076,411	$	2,047,223		7	$	164,180	$	141,500

In making this risk assessment, one of the primary factors we consider is how senior or junior each loan is relative to other debt obligations of the borrower.

The following tables further allocate our loans receivable by loan type and our internal risk ratings ($ in thousands):

	Senior Mortgage Loans(1)
	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		26	$	1,811,514	$	1,800,329		—	$	—	$	—
4 – 5		—		—		—		1		62,500		62,500
		26	$	1,811,514	$	1,800,329		1	$	62,500	$	62,500

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

	Subordinate Loans(1)
	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		3	$	227,350	$	219,894		2	$	47,000	$	47,000
4 – 5		—		—		—		1		30,000		30,000
6 – 8		2		37,548		27,000		3		24,680		2,000
		5	$	264,898	$	246,894		6	$	101,680	$	79,000

(1) Includes subordinate interests in mortgages and mezzanine loans.

Loan impairments

We do not have any loan impairments in our Loan Origination segment. As of December 31, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one impaired subordinate interest in a mortgage loan with a gross book value of $10.5 million that is delinquent on its contractual payments. We have taken a 100% loan loss reserve on this loan.

As of December 31, 2012, consolidated securitization vehicles in our CT Legacy Portfolio segment had one impaired subordinate interest in a mortgage loan with a gross book value of $7.5 million that was current in its interest payments and two impaired subordinate interest in a mortgage loans with a combined gross book value of $17.1 million that were delinquent on their contractual payments. We had an aggregate 92% loan loss reserve on these loans resulting in a net book value of $2.0 million.

Generally, we have recorded loan loss reserves for loans that are in maturity default or otherwise have past-due principal payments. As of December 31, 2013, CT CDO I, which is in our CT Legacy Portfolio segment, had one loan with a net book value of $27.0 million, which was in maturity default but had no reserve recorded. We expect to collect all principal and interest due under this loan. We do not have any loans in maturity default or with past-due principal payments in our Loan Origination segment.

There was no income recorded on impaired loans during the year ended December 31, 2013. We recorded $290,000 of income on impaired subordinate interests in mortgage loans owned by CT CDO I that had an average net book value of $2.8 million during the year ended December 31, 2012. Substantially all income recorded on impaired loans during the prior period was received in cash.

Nonaccrual loans

We do not have any nonaccrual loans in our Loan Origination segment. CT CDO I, which is in our CT Legacy Portfolio segment, had one subordinate interest in a mortgage loan on nonaccrual status with a principal balance of $10.5 million and a net book value of zero as of December 31, 2013. Consolidated securitization vehicles in our CT Legacy Portfolio segment had three subordinate interests in mortgages on nonaccrual status with an aggregate principal balance of $24.7 million and an aggregate net book value of $2.0 million as of December 31, 2012. In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans that are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. Accordingly, we did not have any material interest receivable accrued on nonperforming loans as of December 31, 2013 or 2012.

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Cash and Cash Equivalents, Including Restricted Cash

12 Months Ended

Dec. 31, 2013

Cash And Cash Equivalents [Abstract]

Cash and Cash Equivalents, Including Restricted Cash

4. CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED CASH

As discussed in Note 2, we deposit our cash and cash equivalents, including restricted cash, with high credit-quality institutions to minimize credit risk exposure. The following table provides details of our cash and cash equivalents, including restricted cash balances ($ in thousands):

Asset Category	Depository		Credit Rating(1)		December 31, 2013		December 31, 2012
Cash and cash equivalents		Bank of America		A-1	$	52,342	$	15,423
Restricted cash		Bank of America		A-1		10,096		14,246
					$	62,438	$	29,669

(1) Represents the short-term credit rating for the Bank of America, N.A. legal entity as issued by Standard & Poor’s as of December 31, 2013.

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

16. INCOME TAXES

We elected to be taxed as a REIT, effective January 1, 2003, 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 December 31, 2013 and 2012, we were in compliance with all REIT requirements.

During the year ended December 31, 2013, we recorded a current income tax provision of $995,000 primarily related to our taxable REIT subsidiaries. During the year ended December 31, 2012, we recorded a current income tax provision of $174,000. As a result of our sale of CTIMCO, we no longer have any deferred tax assets or liabilities as of December 31, 2012.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our net operating losses, or NOLs, and net capital losses, or NCLs, 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, 2013, we had NOLs of $158.4 million and NCLs of $48.0 million available to be carried forward and utilized in current or future periods. If we are unable to utilize our NOLs, they will expire in 2029. If we are unable to utilize our NCLs, $16.0 million will expire in 2014, $31.4 million will expire in 2015, and $602,000 will expire in 2017.

As of December 31, 2013, tax years 2010 through 2013 remain subject to examination by taxing authorities.

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Derivative Financial Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

12. DERIVATIVE FINANCIAL INSTRUMENTS

As of and during the year ended December 31, 2013, we were not party to any derivative financial instruments. However, our consolidated subsidiary, CT Legacy Partners, was party to five interest rate swaps which it terminated in June 2013. A gain of $136,000 resulting from the termination is included as a component of interest expense on our consolidated statements of operations for the year ended December 31, 2013. CT Legacy Partners is no longer party to any derivative financial instruments as of December 31, 2013.

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Discontinued Operations - Schedule of the Components of Discontinued Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended												12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total revenues	$ 26,837	$ 18,853	$ 6,017	$ 1,456	$ 6,517	$ 6,944	$ 6,763	$ 14,716	$ 21,975	$ 25,642	$ 32,553	$ 36,991
General and administrative expenses													11,505	10,369	8,982
Loss from discontinued operations														(2,138)	(890)
Loss on sale of discontinued operations														(271)
Loss from discontinued operations per share of common stock:
Basic														$ (1.03)	$ (0.39)
Diluted														$ (1.03)	$ (0.39)
Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Servicing fees														9,686	8,497
Management fees from affiliates														6,312	6,618
Total revenues														15,998	15,115
General and administrative expenses														12,938	14,884
Income from discontinued operations before income taxes														3,060	231
Income tax provision														(5,198)	(1,121)
Loss from discontinued operations														(2,138)	(890)
Loss on sale of discontinued operations														$ (271)
Loss from discontinued operations per share of common stock:
Basic														$ (1.03)	$ (0.39)
Diluted														$ (1.03)	$ (0.39)

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Investment in CT Legacy Asset, at Fair Value

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Investment in CT Legacy Asset, at Fair Value

8. INVESTMENT IN CT LEGACY ASSET, AT FAIR VALUE

As a result of the merger effective on March 22, 2013, we began consolidating CT Legacy Partners and its subsidiary, CT Legacy Asset. Previously, we accounted for CT Legacy Asset on a non-consolidated basis, and as of December 31, 2012, our consolidated balance sheet included a net investment in CT Legacy Asset of $132.0 million. We had elected the fair value option of accounting for CT Legacy REIT’s investment in CT Legacy Asset due to our determination that the fair value of the investment in CT Legacy Asset, as a net liquidating portfolio of assets, was more meaningful and indicative of our interests in CT Legacy Asset than equity method accounting. Following its consolidation, the loans receivable and repurchase obligations of CT Legacy Partners, as well as its other assets and liabilities, are included in our consolidated balance sheet. Refer to Note 3 for additional discussion of the consolidation of CT Legacy Partners and Note 5 and Note 10 for further discussion of CT Legacy Partners’ loans receivable and repurchase obligation, respectively.

CT Legacy Partners

CT Legacy Partners holds a portion of our legacy portfolio, which we had previously transferred to CT Legacy REIT (the predecessor of CT Legacy Partners) in connection with our March 2011 Restructuring. CT Legacy Partners is beneficially owned 52% by us and 48% by our former lenders. In addition, CT Legacy Partners has issued class B common shares, a subordinate class of equity that entitles its holders to receive approximately 25% of the dividends that would otherwise be payable to us on our equity interest in CT Legacy Partners, after aggregate cash distributions of $50.0 million have been paid to all other classes of common equity. Further, CT Legacy Partners has issued class A preferred shares that entitle their holder to cumulative preferred distributions in an amount generally equal to the greater of (i) 2.5% of certain of CT Legacy Partners’ assets, and (ii) $1.0 million per annum.

Our equity interest in CT Legacy Partners is composed of 4,393,750 class A-1 common shares, 775,000 class

A-2 common shares, and 118,651 class B common shares. The outstanding common shares of CT Legacy Partners are composed of 4.4 million class A-1 common shares, 5.6 million class A-2 common shares, and 1.5 million class B common shares. The equity interests of other members of CT Legacy Partners are reflected as non-controlling interests on our consolidated balance sheets.

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Loans Receivable, at Fair Value - Additional Information (Detail) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal balance aggregate fair value	$ 40,665,000
Nonaccrual Status [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	3
Principal balance	98,300,000
Fair value	0
CT Legacy Partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio of loans aggregate principal	145,300,000
Principal balance aggregate fair value	$ 40,665,000	$ 0
Number of loans	7

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Loans Held-for-Sale

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Loans Held-for-Sale

6. LOANS HELD-FOR-SALE

Activity relating to our loans held-for-sale was ($ in thousands):

	Gross Book Value			Valuation Allowance			Net Book Value
December 31, 2012	$	—		$	—		$	—
Reclassification from loans receivable		6,601			(4,601	)		2,000
Valuation allowance on loans held-for-sale		—			1,259			1,259
Loans sold		(6,601	)		3,342			(3,259	)
December 31, 2013	$	—		$	—		$	—

During the first quarter of 2013, we reclassified a $6.6 million subordinate mortgage loan and its related $4.6 million provision for loan losses to loans held-for-sale. We subsequently sold this loan and recorded a $1.3 million valuation adjustment to reflect the position at its fair value based on the proceeds received from the sale. We did not have any loans classified as held-for-sale as of December 31, 2013 and 2012.

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Loans Receivable, at Fair Value

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Loans Receivable, at Fair Value

7. LOANS RECEIVABLE, AT FAIR VALUE

We record CT Legacy Partners’ loans receivable investments at fair value, which are determined using internal financial model-based estimations. The CT Legacy Partners loans receivable portfolio included seven loans with an aggregate principal balance of $145.3 million, which were reported at their aggregate fair value of $40.7 million as of December 31, 2013. As of December 31, 2012, there were no loans receivable at fair value because we accounted for the CT Legacy Partners’ portfolio on a non-consolidated basis. Refer to Note 3 and Note 8 for additional discussion of CT Legacy Partners. Refer to Note 18 for additional disclosure regarding fair value and Note 21 for an allocation of our loans receivable between our operating segments.

Activity relating to our loans receivable, at fair value was ($ in thousands):

December 31, 2012	$	—
Consolidation of CT Legacy Partners		150,332
Capitalized interest		984
Loan satisfactions		(110,347	)
Partial loan repayments		(307	)
Gain on investments at fair value		6,816
Reclassification to other assets		(6,813	)
December 31, 2013	$	40,665

The following table details overall statistics for CT Legacy Partners’ loans receivable, which were held at fair value as of December 31, 2013 ($ in thousands):

	Loans Receivable, at Fair Value
	Floating Rate			Fixed Rate			Total
Number of loans		4			3			7
Net book value	$	16,990		$	23,675		$	40,665
Weighted-average cash coupon(1)		L+4.26	%		8.14	%		6.24	%
Weighted-average all-in yield(1)		L+4.26	%		8.14	%		6.24	%
Weighted-average maximum maturity (years)(2)		0.9			0.8			0.9

(1) All floating rate loans were indexed to LIBOR as of December 31, 2013, however, one of our loans receivable earns interest based on a minimum LIBOR floor of 2.00%. Rates exclude all non-performing loans.

(2) Maximum maturity date assumes all extension options are exercised.

The tables below detail the types of loans in CT Legacy Partners’ loan portfolio, as well as the property type and geographic distribution of the properties securing these loans ($ in thousands):

	December 31, 2013
Asset Type	Fair Value		Percentage
Senior mortgages	$	14,990		37	%
Subordinate loans(1)		25,675		63
	$	40,665		100	%
Property Type	Fair Value		Percentage
Office	$	25,675		63	%
Hotel		14,990		37
	$	40,665		100	%
Geographic Location	Fair Value		Percentage
Northeast	$	25,675		63	%
West		14,990		37
	$	40,665		100	%

(1) Comprised entirely of mezzanine loans as of December 31, 2013.

Nonaccrual loans

In accordance with our revenue recognition policies discussed in Note 2, we do not accrue interest on loans that are 90 days past due or, in the opinion of our Manager, are otherwise uncollectable. We do not have any material interest receivable accrued on nonperforming loans as of December 31, 2013. As of December 31, 2013, we had three loans on nonaccrual status with an aggregate principal balance of $98.3 million, each of which had a fair value of zero.

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Equity Investments in Unconsolidated Subsidiaries

12 Months Ended

Dec. 31, 2013

Equity Method Investments And Joint Ventures [Abstract]

Equity Investments in Unconsolidated Subsidiaries

9. EQUITY INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES

As of December 31, 2013, our equity investment in unconsolidated subsidiaries consisted solely of our carried interest in CTOPI, a fund sponsored and managed by CTIMCO. Historically, this balance has also included our co-investments in investment management vehicles that were sponsored and managed by CTIMCO. As described in Note 3, we sold two such co-investments to an affiliate of Blackstone in December 2012 in conjunction with our Investment Management Business Sale; however, we retained 100% of our carried interest in CTOPI.

Activity relating to our equity investments in unconsolidated subsidiaries was ($ in thousands):

	CTOPI Carried Interest
Total as of December 31, 2012	$	13,306
Distributions(1)		(8,795	)
Incentive income allocation(2)		17,969
Total as of December 31, 2013	$	22,480

(1) Represents an $8.8 million tax advance cash distribution received to satisfy our income tax obligation related to the allocation of taxable income in respect of our carried interest in CTOPI. Our total allocation of carried interest from CTOPI is net of $10.2 million of aggregate tax advance cash distributions.

(2) We have deferred the recognition of incentive income allocated to us from CTOPI in respect of our carried interest in CTOPI, and recorded an offsetting liability as a component of accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

Our carried interest in CTOPI entitles us to earn incentive compensation in an amount equal to 17.7% of the fund’s profits, after a 9% preferred return and 100% return of capital to the CTOPI partners. As of December 31, 2013, we had been allocated $32.6 million of incentive compensation from CTOPI based on a hypothetical liquidation of the fund at its net asset value.

Accordingly, we have recognized this allocation as an equity investment in CTOPI on our consolidated balance sheets; however, we have deferred the recognition of income until cash is collected or appropriate contingencies have been eliminated.

The CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. We refer to these distributions as CTOPI Tax Advances. We received CTOPI Tax Advances of $8.8 million during 2013 and $1.4 million during 2012, both of which reduced our equity investment in CTOPI. As a result, our net investment in the CTOPI carried interest has a book value of negative $10.2 million, the amount of cumulative CTOPI Tax Advances received as of December 31, 2013. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these CTOPI Tax Advances to the fund. As of December 31, 2013, our maximum exposure to loss from CTOPI was $10.2 million, the aggregate amount of CTOPI Tax Advances we have received from CTOPI.

CTOPI Incentive Management Fee Grants

In January 2011, we created a management compensation pool for employees equal to 45% of the CTOPI incentive management fee received by us. As of December 31, 2013, we had granted 96% of the pool, and the remainder was unallocated. If any awards remain unallocated at the time incentive management fees are received by us, any amounts otherwise payable to the unallocated awards will be distributed pro rata to the plan participants then employed by an affiliate of our Manager.

Approximately 65% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) one-third on the date of grant; (ii) one-third on September 13, 2012; and (iii) the remainder upon our receipt of incentive management fees from CTOPI. Of the remaining 35% of these grants, 31% are fully vested as a result of an acceleration event, and 4% vest solely upon our receipt of incentive management fees from CTOPI or the disposition of certain investments owned by CTOPI.

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Loans Receivable, at Fair Value - Types of Loans in Loan Portfolio, Property Type and Geographic Distribution of Properties Securing these Loans (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	$ 40,665
CT Legacy Partners [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	40,665	0
Percentage	100.00%
CT Legacy Partners [Member] | Office [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	25,675
Percentage	63.00%
CT Legacy Partners [Member] | Hotel [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	14,990
Percentage	37.00%
CT Legacy Partners [Member] | Senior Mortgages Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	14,990
Percentage	37.00%
CT Legacy Partners [Member] | Subordinate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	25,675
Percentage	63.00%
CT Legacy Partners [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	40,665
Percentage	100.00%
CT Legacy Partners [Member] | Northeast [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	25,675
Percentage	63.00%
CT Legacy Partners [Member] | West [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Fair Value	$ 14,990
Percentage	37.00%

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Income Taxes - Additional Information (Detail) (USD $)	12 Months Ended								12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Internal Revenue Service [Member]	Dec. 31, 2013 Total Capital Loss Carryforwards [Member]	Dec. 31, 2013 Capital Loss Carryforwards Expiring 2014 [Member]	Dec. 31, 2013 Capital Loss Carryforwards Expiring 2015 [Member]	Dec. 31, 2013 Capital Loss Carryforwards Expiring 2017 [Member]	Dec. 31, 2013 REIT [Member]	Dec. 31, 2012 REIT [Member]	May 31, 2013 Class A Common Stock [Member]
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	$ 995,000	$ 174,000	$ 1,425,000						$ 995,000	$ 174,000
Common stock, shares issued	28,802,000	2,927,000									25,875,000
Net operating loss carried forward	158,400,000
Net capital losses carried forward					48,000,000	16,000,000	31,400,000	602,000
NOLs expiration date	Expire in 2029
Net operating losses and net capital losses				$ 2,000,000

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Equity Investments in Unconsolidated Subsidiaries - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 CT Opportunity Partners I, LP [Member]	Jan. 31, 2011 CT Opportunity Partners I, LP [Member]	Dec. 31, 2013 CT Opportunity Partners I, LP [Member] Acceleration Event [Member]	Dec. 31, 2013 CT Opportunity Partners I, LP [Member] Incentive Management Fees [Member]
Schedule of Equity Method Investments [Line Items]
Carried interest			100.00%
Incentive compensation, percentage of funds profit			17.70%
Preferred return			9.00%
Return of capital to partners			100.00%
Incentive compensation			$ 32.6
Advance distribution of incentive compensation	8.8	1.4
Book value of net investment in CTOPI carried interest	(10.2)
Maximum exposure to loss from equity investment			$ 10.2
Percentage of incentive management fee pool for employees				45.00%
Percentage of granted incentive compensation to employees			96.00%
Percentage of grants vesting schedule			65.00%
Percentage of grants vesting upon receipt of dividends			35.00%		31.00%	4.00%
Description of incentive management fee grants to employees vesting schedule			(i) one-third on the date of grant; (ii) one-third on September 13, 2012; and (iii) the remainder vests upon our receipt of incentive management fees from CTOPI. Of the remaining 35% of these grants, 31% are fully vested as a result of an acceleration event, and 4% vest solely upon our receipt of incentive management fees from CTOPI or the disposition of certain investments owned by CTOPI.

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Schedule IV - Reconciliation of Mortgage Loans on Real Estate (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Mortgage Loans On Real Estate [Abstract]
Balance at January 1	$ 141,500	$ 869,269	$ 3,503,447
Additions during period:
Consolidation (deconsolidation) of subsidiary	150,332	(645,163)	(573,483)
Loan originations	2,325,433
Additional fundings	3,465	26	478
Amortization of deferred fees and discount, net	5,965	180	1,773
Unrealized gain on foreign currency translation	798
Unrealized gain on investments at fair value	7,417
Valuation allowance on loans held-for-sale	1,259		(1,456)
Recovery of provision for loan losses		36,147	21,973
Deductions during period:
Collections of principal	(494,301)	(118,959)	(2,069,799)
Loans sold	(21,162)		(5,750)
Deferred origination fees and expenses	(25,402)
Transfers to other assets	(6,813)		(7,914)
Balance at December 31	$ 2,087,888	$ 141,500	$ 869,269

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Loans Receivable, at Fair Value - Overall Statistics for Loans Receivable Portfolio Held at Fair Value (Parenthetical) (Detail) (Minimum [Member])	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	0.20%
LIBOR [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	0.20%
LIBOR [Member] | Floating Rate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
LIBOR floor rate	2.00%

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Fair Values - Schedule of Details of Carrying Amount, Face Amount, and Approximate Fair Value of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financial assets
Loans receivable, net	$ 40,665
Financial liabilities
Repurchase obligations	1,100,000
Carrying Amount [Member]
Financial assets
Cash and cash equivalents	52,342	15,423
Restricted cash	10,096	14,246
Loans receivable, net	2,047,223	141,500
Financial liabilities
Secured notes		8,497
Repurchase obligations	1,109,353
Convertible notes, net	159,524
Securitized debt obligations	40,181	139,184
Participations sold	90,000
Face Amount [Member]
Financial assets
Cash and cash equivalents	52,342	15,423
Restricted cash	10,096	14,246
Loans receivable, net	2,076,411	164,180
Financial liabilities
Secured notes		8,497
Repurchase obligations	1,109,353
Convertible notes, net	172,500
Securitized debt obligations	40,181	139,184
Participations sold	90,000
Fair Value [Member]
Financial assets
Cash and cash equivalents	52,342	15,423
Restricted cash	10,096	14,246
Loans receivable, net	2,058,699	133,682
Financial liabilities
Secured notes		7,374
Repurchase obligations	1,109,353
Convertible notes, net	181,772
Securitized debt obligations	25,696	89,880
Participations sold	$ 90,304

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Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Activity Relating to Loans Receivable

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

	Gross Book Value			Provision for Loan Losses			Net Book Value
December 31, 2012	$	164,180		$	(22,680	)	$	141,500
Loan originations		2,325,433			—			2,325,433
Additional fundings		2,480			—			2,480
Loan satisfactions		(260,400	)		—			(260,400	)
Partial loan repayments and sales		(141,150	)		—			(141,150	)
Deferred origination fees and expenses		(25,402	)		—			(25,402	)
Amortization of deferred fees and expenses		5,965			—			5,965
Unrealized gain on foreign currency translation		797			—			797
Reclassification to loans held-for-sale		(6,601	)		4,601			(2,000	)
December 31, 2013	$	2,065,302		$	(18,079	)	$	2,047,223

Overall Statistics for Loans Receivable Portfolio

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

	December 31, 2013			December 31, 2012
Number of loans		31			7
Principal balance	$	2,076,411		$	164,180
Net book value(1)	$	2,047,223		$	141,500
Weighted-average cash coupon(2)		L+4.64	%		L+4.73	%
Weighted-average all-in yield(2)		L+5.26	%		L+4.74	%
Weighted-average maximum maturity (years)(3)		4.1			0.7

(1) The primary differences between the principal balance and net book value are deferred origination fees on loans in our Loan Origination segment, and provisions for loan losses in our CT Legacy Portfolio segment.

(2) All loans are floating rate loans indexed to LIBOR as of December 31, 2013 and 2012; however, certain of our loans receivable earn a minimum LIBOR floor ranging from 0.20% to 1.00%. Amounts exclude all non-performing loans.

(3) Maximum maturity date assumes all extension options are exercised.

Types of Loans in Loan Portfolio, as well as Property Type and Geographic Distribution of Properties Securing these Loans

The tables below detail the types of loans in our loan portfolio, as well as the property type and geographic distribution of the properties securing these loans ($ in thousands):

	December 31, 2013					December 31, 2012
Asset Type	Net Book Value		Percentage			Net Book Value		Percentage
Senior mortgage loans(1)	$	1,800,329		88	%	$	62,500		44	%
Subordinate loans(2)		246,894		12			79,000		56
	$	2,047,223		100	%	$	141,500		100	%
Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	864,666		42	%	$	111,500		79	%
Multifamily		617,464		30			—		—
Hotel		390,492		19			30,000		21
Other		174,601		9			—		—
	$	2,047,223		100	%	$	141,500		100	%
Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
Northeast	$	828,571		40	%	$	27,000		19	%
West		469,262		23			92,500		65
Southeast		243,798		12			12,404		9
Southwest		216,429		11			9,596		7
Northwest		166,207		8			—		—
Midwest		85,708		4			—		—
United Kingdom		37,248		2			—		—
	$	2,047,223		100	%	$	141,500		100	%

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

(2) Includes subordinate interests in mortgages and mezzanine loans.

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):

	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		29	$	2,038,863	$	2,020,223		2	$	47,000	$	47,000
4 – 5		—		—		—		2		92,500		92,500
6 – 8		2		37,548	$	27,000		3		24,680		2,000
		31	$	2,076,411	$	2,047,223		7	$	164,180	$	141,500

In making this risk assessment, one of the primary factors we consider is how senior or junior each loan is relative to other debt obligations of the borrower.

The following tables further allocate our loans receivable by loan type and our internal risk ratings ($ in thousands):

	Senior Mortgage Loans(1)
	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		26	$	1,811,514	$	1,800,329		—	$	—	$	—
4 – 5		—		—		—		1		62,500		62,500
		26	$	1,811,514	$	1,800,329		1	$	62,500	$	62,500

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $68.6 million, and pari passu participations in mortgages.

	Subordinate Loans(1)
	December 31, 2013						December 31, 2012
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1 – 3		3	$	227,350	$	219,894		2	$	47,000	$	47,000
4 – 5		—		—		—		1		30,000		30,000
6 – 8		2		37,548		27,000		3		24,680		2,000
		5	$	264,898	$	246,894		6	$	101,680	$	79,000

(1) Includes subordinate interests in mortgages and mezzanine loans.

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Loans Receivable - Overall Statistics for Loans Receivable Portfolio (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Investment	Dec. 31, 2012 Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Net book value	$ 2,047,223	$ 141,500
Weighted-average cash coupon	L+2.23 %
Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans	31	7
Principal Balance	2,076,411	164,180
Net book value	$ 2,047,223	$ 141,500
Weighted-average cash coupon	L+4.64 %	L+4.73 %
Weighted-average all-in yield	L+5.26 %	L+4.74 %
Weighted-average maximum maturity (years)	4 years 1 month 6 days	8 months 12 days

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Other Expenses

12 Months Ended

Dec. 31, 2013

Other Income And Expenses [Abstract]

Other Expenses

14. OTHER EXPENSES

Our other expenses consist of the management fees we incur as a result of the Management Agreement with our Manager and general and administrative expenses.

Management Fees

In conjunction with the Investment Management Business Sale, we entered into a new management agreement with our Manager, which was amended and restated as of March 26, 2013, and further amended on July 30, 2013, pursuant to which our Manager earns a base management fee in an amount equal to the greater of (i) $250,000 per annum and (ii) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the Management Agreement with our Manager. 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 the Management Agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) 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 (or the period since the date of the first offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio. Our Manager has determined, and a majority of our independent directors has approved, the exclusion from Core Earnings of the amortization of the deemed issue discount on our convertible notes resulting from the conversion option value accounting under GAAP.

During the year ended December 31, 2013, we incurred $5.9 million of management fees payable to our Manager. We did not incur any incentive fees payable to our Manager during the year ended December 31, 2013.

General and Administrative Expenses

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

	Year Ended December 31,
	2013		2012		2011
Professional services	$	2,441	$	895	$	2,210
Operating and other costs		1,971		1,732		2,283
Transaction costs – investment management sale(1)		—		3,870		—
		4,412		6,497		4,493
Non-cash compensation expenses
Management incentive awards plan – CT Legacy Partners(2)		4,915		2,232		3,054
Director stock-based compensation		263		223		206
Employee stock-based compensation		1,064		1,353		505
		6,242		3,808		3,765
Expenses of consolidated securitization vehicles		851		64		724
	$	11,505	$	10,369	$	8,982

(1) See Note 1 for discussion of the Investment Management Business Sale.

(2) Represents the accrual of amounts payable under the CT Legacy Partners management incentive awards during the period. See below for discussion of the CT Legacy Partners management incentive awards plan.

As a result of our Investment Management Business Sale, the operating expenses related to our investment management business have been reclassified to income (loss) from discontinued operations on our consolidated statements of operations. Refer to Note 3 for further discussion of the Investment Management Business Sale.

CT Legacy Partners Management Incentive Awards Plan

In conjunction with our March 2011 Restructuring, we created an employee pool for up to 6.75% of the distributions paid to the common equity holders of CT Legacy Partners (subject to certain caps and priority distributions). As of December 31, 2013, incentive awards for 92% of the pool have been granted, and the remainder was unallocated. If any awards remain unallocated at the time distributions are paid, any amounts otherwise payable to the unallocated awards will be distributed pro rata to the plan participants then employed by an affiliate of our Manager.

Approximately 54% of these grants have the following vesting schedule, which is contingent on continued employment with an affiliate of our Manager: (i) 25% vests on the date of grant; (ii) 25% vests in March 2013; (iii) 25% vests in March 2014; and (iv) the remainder vests upon our receipt of distributions from CT Legacy Partners. Of the remaining 46% of these grants, 28% are fully vested as a result of an acceleration event, and 18% vest only upon our receipt of distributions from CT Legacy Partners.

We accrue a liability for the amounts due under these grants based on the value of CT Legacy Partners and the periodic vesting of the awards granted. During 2013, we made payments of $7.6 million under the CT Legacy Partners incentive plan, which resulted in the recognition of compensation expenses of $2.0 million related to previously unvested awards. Accrued payables for these awards were $2.8 million and $5.3 million as of December 31, 2013 and 2012, respectively.

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Transactions with Related Parties

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Transactions with Related Parties

19. TRANSACTIONS WITH RELATED PARTIES

Transactions Related to Our Manager and its Affiliates

As further described in Note 3, in December 2012 we concluded multiple, related transactions with Blackstone and its affiliates, including (i) the Investment Management Business Sale; (ii) the sale of 500,000 shares of our class A common stock for $20.00 per share; and (iii) the execution of a new external management agreement with our Manager. In addition, Blackstone received the right to designate two members of our board of directors and exercised that right by designating an employee and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012. Certain of our former employees are now employed by an affiliate of our Manager.

On March 26, 2013, we amended the Management Agreement with our Manager to, among other things, amend our investment guidelines to permit the investment risk management committee of our board of directors, which consists of only independent directors, to approve any proposed investment by our Manager.

On July 30, 2013, we and our Manager entered into Amendment No. 1 to our amended and restated Management Agreement with our Manager. The amendments consisted of: (i) revisions to clarify that internal audit expenses (including through one or more third parties and/or affiliates of our Manager) are to be paid by us and not our Manager, and (ii) updates to reflect our recent name change and the merger of our CT Legacy REIT Mezz Borrower, Inc. subsidiary with and into CT Legacy Partners, LLC.

As of December 31, 2013, our consolidated balance sheet included $2.5 million of accrued management fees payable to our Manager. During the year ended December 31, 2013, we paid $3.4 million of management fees to our Manager. In addition, as of December 31, 2013, our consolidated balance sheet includes $193,000 of preferred distributions payable by CT Legacy Partners to an affiliate of our Manager. During the year ended December 31, 2013, CT Legacy Partners made aggregate preferred distributions of $3.9 million to such affiliate.

On October 3, 2013, we issued 339,431 shares of restricted class A common stock with a fair value of $8.5 million as of the grant date to our Manager under the 2013 Manager Plan. The shares of restricted class A common stock vest ratably in quarterly installments over three years from the date of issuance. We recorded a non-cash expense related to these shares of $767,000 during the year ended December 31, 2013. Refer to Note 17 for further discussion of our restricted class A common stock.

During the year ended December 31, 2013, CT CDO I, which is consolidated by us, paid $847,000 of special servicing fees to CTIMCO, which is an affiliate of our Manager.

There may be conflicts between us and our Manager with respect to certain of the investments in the CT Legacy Partners and CTOPI portfolios where an affiliate of our Manager holds a related investment that is senior, junior, or pari passu to the investments held by these portfolios.

The Management Agreement with our Manager excludes from the management fee calculation our interests in CT Legacy Partners, CTOPI, and CT CDO I, which may result in further conflicts between the economic interests of us and our Manager. Refer to Note 14 for further discussion of the Management Agreement with our Manager.

On May 13, 2013, we entered into a joint venture, 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was owned 16.7% by us and 83.3% by an affiliate of our Manager and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate of our Manager using proceeds from the sale of our class A common stock, and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary. We recorded a $193,000 charge to non-controlling interest as a result of the purchase of these equity interests at their fair value, rather than GAAP book value.

An affiliate of our Manager purchased 1,960,784 shares of our class A common stock as part of our stock offering on May 22, 2013. These shares were purchased for $25.50 each, the same price offered to non-affiliated purchasers. This affiliate owned class A common stock representing 7.1% of outstanding class A common stock and stock units as of February 11, 2014. In addition, an affiliate of our Manager was compensated $1.0 million for its role as co-manager of our offering of class A common stock on May 22, 2013 and $188,000 for its role as co-manager of our offering of convertible notes on November 19, 2013.

On October 2, 2013 we originated a $71.0 million loan, the proceeds of which were used by the borrower to repay an existing loan owned by an affiliate of our Manager.

On October 23, 2013, we purchased a $176.9 million loan from a third party. In conjunction with our acquisition of this loan, we consented to its restructuring, which restructuring resulted in an affiliate of our Manager earning a $2.3 million modification fee.

Other Related-Party Transactions

In conjunction with the Investment Management Business Sale, we entered into a letter agreement with W.R. Berkley Corporation, or WRBC, pursuant to which we agreed not to undertake any offering of our class A common stock, or other equity securities, in an aggregate amount greater than $30.0 million without prior approval of a majority of the independent members of our board of directors. This one-time approval was obtained in conjunction with our May 2013 offering of class A common stock, and we are no longer required to obtain such approval for future offerings. WRBC beneficially owned class A common stock representing 1.0% of our outstanding class A common stock and stock units as of February 11, 2014, and a member of our board of directors is an employee of WRBC.

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Segment Reporting - Consolidated Statement of Operations for Each Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended												12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income from loans and other investments
Interest and related income													$ 53,164	$ 34,939	$ 117,161
Less: Interest and related expenses													18,017	38,138	96,974
Income from loans and other investments, net													35,147	(3,199)	20,187
Other expenses
Management fees													5,937
General and administrative expenses													11,505	10,369	8,982
Total other expenses													17,442	10,369	8,982
Valuation allowance on loans held-for-sale													1,259		(1,456)
Unrealized gain on investments at fair value													7,417
Gain on extinguishment of debt													38		271,031
Income before income taxes													26,419	282,387	254,634
Income tax provision													995	174	1,425
Net income	9,728	10,526	6,768	(1,597)	122,931	12,900	3,351	140,622	(16,078)	8,256	6,224	253,917	25,424	279,804	252,319
Net income attributable to non-controlling interests													(10,392)	(98,780)	5,823
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.	7,079	8,320	2,748	(3,115)	105,189	6,999	2,283	66,553	(8,320)	13,722	(1,845)	254,585	15,032	181,024	258,142
Loan Origination [Member]
Income from loans and other investments
Interest and related income													41,621
Less: Interest and related expenses													13,053
Income from loans and other investments, net													28,568
Other expenses
Management fees													5,937
General and administrative expenses													5,149
Total other expenses													11,086
Valuation allowance on loans held-for-sale
Unrealized gain on investments at fair value
Gain on extinguishment of debt
Income before income taxes													17,482
Income tax provision													31
Net income													17,451
Net income attributable to non-controlling interests													(193)
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.													17,258
CT Legacy Portfolio [Member]
Income from loans and other investments
Interest and related income													11,543
Less: Interest and related expenses													4,964
Income from loans and other investments, net													6,579
Other expenses
Management fees
General and administrative expenses													6,356
Total other expenses													6,356
Valuation allowance on loans held-for-sale													1,259
Unrealized gain on investments at fair value													7,417
Gain on extinguishment of debt													38
Income before income taxes													8,937
Income tax provision													964
Net income													7,973
Net income attributable to non-controlling interests													(10,199)
Net income (loss) attributable to Blackstone Mortgage Trust, Inc.													$ (2,226)

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Loans Receivable - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013 SecurityLoan	Dec. 31, 2012 SecurityLoan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book value, net	$ 2,047,223,000	$ 141,500,000
Unfunded commitments	164,300,000
Number of loans receivable	15
Commitments expiration period	5 years
Net book value of loans in maturity default	27,000,000
Number of loans in maturity default	1
Reserve for loan losses	0
Income on impaired loans	0
Loan Origination [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book value, net	2,000,223,000
CT Legacy Portfolio [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book value, net	47,000,000
CT CDO I [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Income on impaired loans		290,000
Average net book value		2,800,000
Subordinate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Book value, net	246,894,000	79,000,000
Loss reserves on loans	100.00%	92.00%
Number of Loans	5	6
Net book value of loans		2,000,000
Subordinate Loans [Member] | Mortgage Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans		2
Subordinate Loans [Member] | Nonaccrual Status [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Aggregate principal balance	10,500,000	24,700,000
Number of subordinate interests in mortgages on nonaccrual status	1	3
Aggregate net book value	0	2,000,000
Number of days past due for recognizing interest on loans as non accrued	90 days
Subordinate Loans [Member] | Delinquent [Member] | Interest Payments [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross book value		7,500,000
Subordinate Loans [Member] | Delinquent [Member] | Contractual Payments [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross book value	$ 10,500,000	$ 17,100,000

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2013

Discontinued Operations And Disposal Groups [Abstract]

Schedule of the Components of Discontinued Operations

The following table provides additional information on the components of discontinued operations ($ in thousands):

	Year Ended December 31,
	2013		2012			2011
Servicing fees	$	—	$	9,686		$	8,497
Management fees from affiliates		—		6,312			6,618
Total revenues				15,998			15,115
General and administrative expenses		—		12,938			14,884
Income from discontinued operations before income taxes		—		3,060			231
Income tax provision		—		(5,198	)		(1,121	)
Loss from discontinued operations	$	—	$	(2,138	)	$	(890	)
Loss on sale of discontinued operations		—		(271	)		—
Loss from discontinued operations per share of common stock:
Basic	$	—	$	(1.03	)	$	(0.39	)
Diluted	$	—	$	(1.03	)	$	(0.39	)

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Net income	$ 25,424	$ 279,804	$ 252,319
Other comprehensive income
Unrealized gain on foreign currency remeasurement	798
Unrealized gain on derivative financial instruments		8,367	5,453
Gain on interest rate swaps no longer designated as cash flow hedges		2,481	5,038
Amortization of unrealized gains and losses on securities		(775)	(908)
Amortization of deferred gains and losses on settlement of swaps		(56)	(109)
Other-than-temporary impairments of securities related to fair value adjustments in excess of expected credit losses, net of amortization		688	(326)
Other comprehensive income	798	10,705	9,148
Comprehensive income	26,222	290,509	261,467
Comprehensive (income) loss attributable to non-controlling interests	(10,392)	(98,790)	6,015
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$ 15,830	$ 191,719	$ 267,482

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Fair Values - Assets that are Recorded at Fair Value (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2013 CT CDO I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan loss reserve held by CT CDO I/securitization vehicles	92.00%	100.00%

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Corporate Transactions

12 Months Ended

Dec. 31, 2013

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Corporate Transactions

3. CORPORATE TRANSACTIONS

Blackstone Loan Warehouse Joint Venture

On May 13, 2013, we entered into a joint venture, 42-16 Partners, LLC, or 42-16 Partners, with an affiliate of our Manager to originate and warehouse loans prior to the completion of our class A common stock offering on May 29, 2013. 42-16 Partners was controlled by us and owned 16.7% by us and 83.3% by an affiliate of our Manager, and originated one senior mortgage loan on May 21, 2013. On May 30, 2013, we ended this relationship with the affiliate of our Manager and purchased 100% of the equity interests in 42-16 Partners held by the affiliate of our Manager using proceeds from the sale of our class A common stock and, as a result, 42-16 Partners became a 100% owned and consolidated subsidiary.

CT Legacy Partners Merger

To maintain its tax efficiency, on March 22, 2013, CT Legacy REIT Mezz Borrower, Inc., or CT Legacy REIT, was merged with and into CT Legacy Partners, LLC, or CT Legacy Partners, whereby CT Legacy Partners was the surviving entity. We refer to this transaction as the Merger. As a result of the Merger, all outstanding shares of class A-1 common stock, class A-2 common stock, class B common stock, and class A preferred stock of CT Legacy REIT were converted into limited liability company shares, or LLC Shares, in CT Legacy Partners. These LLC Shares have economic and voting rights equivalent to the corresponding shares of stock of CT Legacy REIT. In addition, all outstanding shares of class B preferred stock of CT Legacy REIT were redeemed on March 21, 2013 for an aggregate of $147,000 in cash, which amount was composed of the shares’ par value, liquidation preference, and accrued dividends thereon.

As a result of the Merger, we have consolidated CT Legacy Partners as of March 22, 2013, and, therefore, the remaining legacy assets and liabilities from our comprehensive debt restructuring on March 31, 2011, which we refer to as our March 2011 Restructuring. As a result of the consolidation, we recorded an increase of $12.0 million in total equity. Refer to Note 8 and Note 13 for further discussion of CT Legacy Partners.

Investment Management Business Sale

On December 19, 2012, pursuant to a purchase and sale agreement, dated as of September 27, 2012, or Purchase Agreement, by and between us and an affiliate of Blackstone, we completed the disposition of our investment management and special servicing business for a purchase price of $21.4 million. The sale included our equity interests in CT Investment Management Co., LLC, or CTIMCO, our related private investment fund co-investments, and 100% of the outstanding class A preferred stock of CT Legacy REIT. We refer to the entire transaction as our Investment Management Business Sale. Pursuant to the terms of the Purchase Agreement, on December 19, 2012, we entered into a management agreement with our Manager, or Management Agreement, which was amended and restated as of March 26, 2013, and further amended on July 30, 2013, pursuant to which we are now managed by our Manager pursuant to the terms and conditions of the Management Agreement. In addition, Blackstone received the right to designate two members of our board of directors, and exercised that right by designating an employee of Blackstone and one of its senior advisors to replace two former members of our board of directors who resigned effective December 19, 2012. As a result of the Investment Management Business Sale, the income and expense items related to our investment management business have been reclassified to income from discontinued operations on our consolidated statements of operations. Refer to Note 15 for a further discussion of discontinued operations.

On December 19, 2012, we also closed our sale to Blackstone of 500,000 shares of our class A common stock for a purchase price of $10.0 million.

In connection with the consummation of the Investment Management Business Sale and the closing of our sale of 500,000 shares of class A common stock to Blackstone, we paid a $20.00 per share special cash dividend on December 20, 2012, to holders of record of our class A common stock at the close of business on November 12, 2012.

CT CDO Deconsolidation

On December 19, 2012, as a result of the Investment Management Business Sale, we are no longer the collateral manager for certain collateralized debt obligations, or CT CDOs, nor are we the special servicer on their collateral assets. Due to the externalization of these management functions, and our lack of material economic interest in the residual equity we own in CT CDOs II and IV, we ceased to be the primary beneficiary of these entities and, therefore, discontinued the consolidation of CT CDOs II and IV, which we refer to as the CT CDO Deconsolidation. We recognized a gain of $53.9 million on the deconsolidation of CT CDOs II and IV, which was due primarily to the reversal of charges to stockholders’ equity resulting from losses previously recorded in excess of our economic interests in these non-recourse securitization vehicles. Subsequently, in May 2013, we disposed of our residual equity interest in CT CDOs II and IV, which had no impact to our consolidated financial statements.

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Loans Held-for-Sale - Schedule of Activity Relating to Our Loans Held-for-Sale (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2011
Loans Held-for-Sale, Net
Beginning Balance, book	$ 0
Valuation allowance on loans held-for-sale	(1,259)	1,456
Ending Balance, book	0
Gross Book Value [Member]
Loans Held-for-Sale, Net
Beginning Balance, gross
Reclassification from loans receivable	6,601
Valuation allowance on loans held-for-sale
Loans sold	(6,601)
Ending Balance, gross
Valuation Allowance [Member]
Loans Held-for-Sale, Net
Beginning Balance, allowance
Reclassification from loans receivable	(4,601)
Valuation allowance on loans held-for-sale	1,259
Loans sold	3,342
Ending Balance, allowance
Net Book Value [Member]
Loans Held-for-Sale, Net
Beginning Balance, book
Reclassification from loans receivable	2,000
Valuation allowance on loans held-for-sale	1,259
Loans sold	(3,259)
Ending Balance, book

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Other Expenses - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Base management fee, per annum	$ 250,000
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 earns a base management fee in an amount equal to the greater of (i) $250,000 per annum and (ii) 1.50% per annum multiplied by our outstanding Equity balance, as defined in the management agreement with our Manager. 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 the management agreement) for the previous 12-month period (or the period since January 1, 2013, whichever is shorter) 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 (or the period since the date of the first offering of our class A common stock following December 19, 2012, whichever is shorter) is greater than zero. Core Earnings is generally equal to our net income (loss) prepared in accordance with GAAP, excluding (i) certain non-cash items and (ii) the net income (loss) related to our legacy portfolio.
Management fees	5,937,000
Manager [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Management fees	5,900,000
Incentive fees payable	0
Incentive Awards Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Percentage of the dividends paid to common equity holders created employee pool	6.75%
Percentage of granted incentive compensation to employees	92.00%
Percentage of grants vesting schedule	54.00%
Description of incentive management fee grants to employees vesting schedule	(i) 25% vests on the date of grant; (ii) 25% vests in March 2013; (iii) 25% vests in March 2014; and (iv) the remainder vests upon our receipt of distributions from CT Legacy Partners. Of the remaining 46% of these grants, 28% are fully vested as a result of an acceleration event, and 18% vest only upon our receipt of distributions from CT Legacy Partners.
Percentage of grants vesting upon receipt of dividends	18.00%
Percentage of remaining grants after vesting schedule	46.00%
Percentage of fully vested grants	28.00%
Accrued payable, awards	2,800,000	5,300,000
Payments made for incentive plan	7,600,000
Compensation expenses related to previous unvested awards	$ 2,000,000

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Debt Obligations - Additional Information (Detail)	12 Months Ended				0 Months Ended	12 Months Ended	0 Months Ended				1 Months Ended				9 Months Ended			0 Months Ended		1 Months Ended	0 Months Ended			1 Months Ended	12 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended		12 Months Ended	0 Months Ended	1 Months Ended			0 Months Ended
	Dec. 31, 2013 USD ($) Facility	Dec. 31, 2011 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Nov. 30, 2013 Convertible Senior Notes [Member] USD ($)	Dec. 31, 2013 Convertible Senior Notes [Member]	Nov. 30, 2013 Convertible Senior Notes [Member] Class A Common Stock [Member] USD ($)	Dec. 30, 2013 Wells Fargo [Member] USD ($)	Jul. 08, 2013 Wells Fargo [Member] USD ($)	Jun. 07, 2013 Wells Fargo [Member] USD ($)	Jul. 30, 2013 Wells Fargo [Member] USD ($)	Jun. 28, 2013 JP Morgan [Member] USD ($)	Dec. 20, 2013 JP Morgan [Member] USD ($)	Dec. 20, 2013 JP Morgan [Member] EUR (€)	Sep. 30, 2013 JP Morgan [Member] Repurchase Agreements [Member] Asset-Specific Repurchase Agreements [Member] USD ($)	Dec. 20, 2013 JP Morgan [Member] Mezzanine and Junior Mortgage Collateral [Member]	Jun. 28, 2013 JP Morgan [Member] Mezzanine and Junior Mortgage Collateral [Member]	Jun. 12, 2013 Citibank [Member]	Jun. 12, 2013 Citibank [Member] First Tranche [Member] USD ($)	Jul. 26, 2013 Citibank [Member] Second Tranche [Member] USD ($)	May 21, 2013 Bank of America [Member] USD ($)	Sep. 23, 2013 Bank of America [Member] USD ($)	May 21, 2013 Bank of America [Member] Mezzanine and Junior Mortgage Collateral [Member]	Oct. 31, 2013 CT Legacy Partners [Member] USD ($)	Dec. 31, 2013 Minimum [Member] USD ($)	Dec. 20, 2013 Minimum [Member] JP Morgan [Member]	Jun. 28, 2013 Minimum [Member] JP Morgan [Member]	Jun. 12, 2013 Minimum [Member] Citibank [Member]	May 21, 2013 Minimum [Member] Bank of America [Member]	Dec. 31, 2013 Maximum [Member]	Dec. 20, 2013 Maximum [Member] JP Morgan [Member]	Jun. 28, 2013 Maximum [Member] JP Morgan [Member]	Dec. 20, 2013 Maximum [Member] JP Morgan [Member] Senior Collateral [Member]	Jun. 28, 2013 Maximum [Member] JP Morgan [Member] Senior Collateral [Member]	Jun. 12, 2013 Maximum [Member] Citibank [Member]	May 21, 2013 Maximum [Member] Bank of America [Member]	May 21, 2013 Maximum [Member] Bank of America [Member] Senior Collateral [Member]
Debt Instrument [Line Items]
Distributions received from CT Legacy Partners	$ 7,151,000	$ 4,345,000																						$ 36,200,000
Prepayment penalty of debt interest	38,000	271,031,000																						2,000,000
Secured notes, outstanding	0
Number of revolving repurchase facility closed	4
Closing of asset-specific repurchase facilities	4
Proceeds from line of credit	1,900,000,000
Aggregate borrowings	1,100,000,000
Description of interest rate	LIBOR plus 2.12% per annum							LIBOR plus 2.00%	LIBOR plus 3.50%	LIBOR plus 2.50%	LIBOR plus 2.25%
Weighted-average all-in cost of credit	LIBOR plus 2.39% per annum
Weighted-average initial maturity	2 years 4 months 24 days
Facility size								34,900,000	32,000,000	250,000,000	59,800,000	250,000,000	252,500,000	153,000,000	112,000,000				250,000,000	250,000,000	250,000,000
Maturity period								Asset-specific, repurchase agreement with Wells Fargo with an initial maturity date of March 30, 2014, which may be extended for a period of three months.	The initial maturity date of the facility is February 9, 2014, which may be extended pursuant to a one-year extension option, which may be exercised by us.	The initial maturity date of the facility is June 7, 2016, which may be extended pursuant to (i) two one-year extension options, each of which may be exercised by us, and (ii) an additional one-year extension option, contingent upon notice regarding the failure of the collateral mortgage loan to be repaid at its final maturity.	The initial maturity date of the facility is August 8, 2015, which may be extended pursuant to three one-year extension options, each of which may be exercised by us.	The repurchase agreement specifies a one-year availability period, during which new advances can be made and which availability period is renewable at the discretion of JP Morgan.						The initial facility expiration date is June 12, 2016, which may be extended annually by us.		The second tranche is subject to a one-year 'availability period,' during which new financing transactions can be initiated	The initial maturity date of the facility is May 21, 2016, subject to two one-year extension options
Guarantee obligations percentage of repurchase agreement								100.00%
LIBOR basis spread on debt obligation																										2.00%	2.00%	2.00%	1.75%		3.25%	3.25%			2.25%	3.25%
Master repurchase agreement, maturity date													Dec. 20, 2016	Dec. 20, 2016
Percentage of recourse debt																100.00%	100.00%						100.00%										25.00%	25.00%	25.00%		50.00%
Maturity date															June 2014
Additional potential advances																						250,000,000
Covenants, EBITDA to fixed charges																									1.00					1.40
Covenants, minimum tangible net worth	525,000,000
Covenants, percentage of tangible assets on cash proceeds from equity issuances	75.00%
Covenants, minimum cash liquidity amount																									10,000,000
Covenants, percentage of recourse indebtedness	5.00%
Covenants, indebtedness to total assets																														80.00%
Weighted average outstanding repurchase obligation	356,400,000
Repurchase obligations	1,109,353,000		20,200,000
Convertible Senior Notes, Principal amount					172,500,000
Convertible Senior Notes, Interest rate					5.25%
Maturity Date	Jul. 31, 2039					Dec. 01, 2018
Convertible Senior Notes, Interest rate including underwriter discounts					5.87%
Debt conversion, converted instrument, common stock issued							34.8943
Debt conversion, convertible notes, principal amount							1,000
Debt instrument, convertible, conversion price							$ 28.66
Description of convertible notes conversion					The Convertible Notes are convertible, at the holders' option, into shares of our class A common stock at any time prior to the close of business on the business day immediately preceding the September 1, 2018, subject to certain limitations, at the applicable conversion rate in effect on the conversion date.
Discount upon issuance of Convertible Notes					9,100,000
Convertible Notes, effective interest rate					6.50%
Convertible Senior Notes, Interest rate including amortization of discount upon issuance					7.16%
Loans receivable, CT CDOs	$ 47,000,000			$ 141,500,000

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

20. COMMITMENTS AND CONTINGENCIES

Unfunded Commitments Under Loans Receivable

As of December 31, 2013, we had unfunded commitments of $164.3 million related to fifteen loans receivable, which amounts will only be funded to finance lease-related or capital expenditures by our borrowers. These future commitments will expire over the next five years.

CTOPI Tax Advances

As further discussed in Note 9, the CTOPI partnership agreement provides for advance distributions in respect of our incentive compensation to allow us to pay any income taxes owed on phantom taxable income allocated to us from the partnership. In the event the performance of CTOPI does not ultimately result in a sufficient allocation of incentive compensation to us, we would be required to return these advances to the partnership. As of December 31, 2013, our maximum exposure to loss from CTOPI was $10.2 million, the aggregate amount of such distributions we have received from CTOPI.

Income Tax Audit of CTIMCO

The Internal Revenue Service, or the IRS, is currently undergoing an examination of the federal income tax returns for the year ended December 31, 2010 of our former subsidiary, CTIMCO. The examination is on-going, and no adjustments have been communicated to us by the IRS. When we sold CTIMCO in December 2012, we provided certain indemnifications related to its operations, and any amounts determined by the IRS to be owed by CTIMCO would ultimately be paid by us.

Litigation

In the normal course of business, we are subject to various legal proceedings and claims, the resolution of which, in our Manager’s opinion, will not have a material adverse effect on our consolidated financial position or results of operations. As of December 31, 2013, there are no reserves recorded for pending litigation.

CT CDO Representations and Warranties

When we formed (and reinvested) our four CT CDOs, we made certain representations and warranties with respect to Blackstone Mortgage Trust, Inc. and the loans and securities that we contributed as collateral to these CT CDOs. In the event that these representations or warranties are proved to have been untrue at the time that the respective collateral was contributed, we may be required to repurchase certain of those loans and securities. These representations and warranties generally relate to specific corporate and asset related subjects, including, among other things, proper corporate authorization; compliance with laws and regulations; ownership of the assets; title to, lack of liens encumbering, and adequate insurance covering the underlying collateral properties; and the lack of existing loan defaults. In certain cases, we may be able to reduce the impact of any such purchase obligation through recoveries from the exercise of remedies against the institution from which we acquired the asset and received substantially the same representations and warranties.

Since inception, we have not been required to repurchase any assets nor have we received any notice of assertion of a potential breach of any representation or warranty. Any payment required to repurchase a loan or security could materially impact our liquidity. As of December 31, 2013, we have not recorded any liabilities associated with the potential repurchase of these assets.

Board of Director’s Compensation

As of December 31, 2013, of the eight members of our board of directors, five are entitled to an annual compensation of $125,000 each. The other three board members, including our chairman and our chief executive officer, serve as directors for no compensation. As of December 31, 2013, the annual compensation for our directors was paid 50% in cash and 50% in the form of deferred stock units. In addition, the member of our board of directors that serves as the chairperson of the audit committee of our board of directors receives an annual cash compensation of $12,000. Compensation to the board of directors is payable in four equal quarterly payments.

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Derivative Financial Instruments - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013 Contract
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Gain on termination of residual interest rate swaps	$ 136,000
Number of interest rate swap agreements terminated	5

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Debt Obligations (Tables)

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Repurchase Obligations Outstanding

The following table details the repurchase obligations outstanding as of December 31, 2013 ($ in thousands):

			Collateral Assets				Repurchase Borrowings(3)
Lender	Maximum Facility Size(1)		Principal Balance(2)		Net Book Value(2)		Potential		Current		Available
Revolving Repurchase Facilities
Bank of America	$	500,000	$	355,981	$	352,995	$	280,500	$	271,320	$	9,180
Citibank		500,000		613,339		609,236		460,765		334,692		126,073
JP Morgan(4)		614,525		442,035		439,706		340,912		257,610		83,302
Subtotal		1,614,525		1,411,355		1,401,937		1,082,177		863,622		218,555
Asset-Specific Repurchase Agreements
Wells Fargo(5)		288,354		334,857		333,418		245,731		245,731		—
Total	$	1,902,879	$	1,746,212	$	1,735,355	$	1,327,908	$	1,109,353	$	218,555

(1) Maximum facility size represents the total amount of borrowings provided for in each repurchase agreement, however these borrowings are only available to us once sufficient collateral assets have been pledged under each facility.

(2) The difference between principal balance and net book value of collateral assets is due to deferred origination fees.

(3) Potential borrowings represent 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 revolving credit facility.

(4) The JP Morgan maximum facility size is composed of a $250.0 million facility, a £153.0 million ($252.5 million) facility, and $112.0 million related solely to a specific asset with a repurchase date of June 27, 2014.

(5) Represents an aggregate of four asset-specific repurchase agreements with Wells Fargo.

Balances of Each Entity's Outstanding Securitized Debt Obligations, their Respective Coupons and All-in Effective Costs, Including Amortization of Fees and Expenses

The balances of each of our consolidated securitization vehicles’ outstanding securitized debt obligations, their respective coupons and all-in effective costs, including the amortization of fees and expenses, were as follows ($ in thousands):

	December 31, 2013				December 31, 2012		December 31, 2013
Non-Recourse Securitized Debt Obligations	Principal Balance		Book Value		Book Value		Coupon(1)			All-In Cost(1)			Maturity Date(2)
CT CDO I	$	40,181	$	40,181	$	91,131		L+2.23	%		L+2.23	%		July 2039
GSMS 2006-FL8A		—		—		48,053		—			—			N/A
	$	40,181	$	40,181	$	139,184		L+2.23	%		L+2.23	%		July 2039

(1) Represents a weighted-average for the facility. All non-recourse securitization obligations are floating rate obligations indexed to LIBOR as of December 31, 2013.

(2) Maturity date represents the contractual maturity of the securitization vehicle. Repayment of securitized debt is a function of collateral cash flows, which are disbursed in accordance with the contractual provisions of the vehicle, and is generally expected to occur prior to the maturity date above.

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Equity

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Equity

13. EQUITY

Balance Sheet Activity

Total equity increased $603.3 million during the year ended December 31, 2013 to $756.8 million. This increase was primarily driven by the issuance of additional shares of our class A common stock in our May 2013 equity offering. See below for further discussion on the share issuance.

Accumulated Other Comprehensive Loss

As of and during the year ended December 31, 2013, total accumulated other comprehensive income was $798,000 representing the currency translation adjustment on assets denominated in a foreign currency. The following table details the primary components of accumulated other comprehensive loss as of, and for the years ended, December 31, 2012 and 2011($ in thousands):

Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2010	$	(37,914	)	$	165		$	(16,800	)	$	4,087		$	(50,462	)
Consolidation of additional securitization vehicles(1)		—			—			538			—			538
Unrealized gain on derivative financial instruments		5,453			—			—			—			5,453
Ineffective portion of cash flow hedges(2)		5,038			—			—			—			5,038
Amortization of net unrealized gains on securities		—			—			—			(908	)		(908	)
Amortization of net deferred gains on settlement of swaps		—			(109	)		—			—			(109	)
Other-than-temporary impairments of securities(3)		—			—			(326	)		—			(326	)
Allocation to non-controlling interest		—			—			10			182			192
Total as of December 31, 2011		(27,423	)		56			(16,578	)		3,361			(40,584	)
Unrealized gain on derivative financial instruments		8,367			—			—			—			8,367
Ineffective portion of cash flow hedges(4)		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(775	)		(775	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities(3)		—			—			678			—			678
Deconsolidation of subsidiaries(5)		16,575			—			15,900			(2,586	)		29,889
Total as of December 31, 2012	$	—		$	—		$	—		$	—		$	—

(1) We began consolidating an additional securitization vehicle in the third quarter of 2011, which was previously accounted for as part of our legacy securities portfolio. This security had previously been other-than-temporarily impaired, a portion of which was recorded in accumulated other comprehensive income, and was therefore eliminated in consolidation.

(2) As a result of significant floating rate debt obligation repayments, a portion of our legacy portfolio interest rate swaps was deemed ineffective in the second quarter of 2011 and these were no longer designated as hedging instruments. As a result, a portion of accumulated other comprehensive income was reclassified into earnings each period to reflect the non-hedge designation.

(3) Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments.

(4) As a result of the deconsolidation of CT Legacy Asset in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Asset was reclassified to interest expense.

(5) As further described in Note 1, we deconsolidated various subsidiaries during 2012. As a result, the balances of accumulated other comprehensive income related to these subsidiaries are no longer included in our consolidated financial statements.

Non-controlling Interests

The non-controlling interests included on our consolidated balance sheets represent the equity interests in CT Legacy Partners that are not owned by us, as described in Note 8. CT Legacy Partners’ outstanding common stock includes class A-1 common shares, class A-2 common shares, and subordinate class B common shares. A portion of CT Legacy Partners’ consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of CT Legacy Partners.

The following table details the components of non-controlling interests in CT Legacy Partners ($ in thousands):

	December 31, 2013
Restricted cash	$	10,096
Loans receivable, at fair value		40,665
Accrued interest receivable, prepaid expenses, and other assets		16,118
Accounts payable, accrued expenses, and other liabilities		(378	)
CT Legacy Partners equity	$	66,501
Equity interests owned by Blackstone Mortgage Trust, Inc.		(27,660	)
Non-controlling interests in CT Legacy Partners	$	38,841

In October and November of 2013, CT Legacy Partners made aggregate distributions totaling $100.0 million to its class A-1, class A-2, and class B common stockholders, including $46.6 million to us and $53.4 million to the non-controlling stockholders.

Share and Share Equivalents

Authorized Capital

We have the authority to issue up to 200,000,000 shares of stock, consisting of 100,000,000 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.

Reverse Stock Split

On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. As a result of the reverse stock split, the number of outstanding shares of our class A common stock was reduced to 2,926,651. In addition, there was a reclassification of $263,000 from the par value of our class A common stock to additional paid-in capital to reflect the impact of the reverse stock split.

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, subject to the voting rights of any outstanding shares of preferred stock. Holders of record of shares of our class A common stock on the record date fixed by our board of directors are entitled to receive such dividends as may be authorized by our board of directors and declared by us, subject to the rights of the holders of any shares of outstanding preferred stock. On May 29, 2013, we issued 25,875,000 shares of class A common stock at a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses.

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.

A total of 29,602,884 shares of class A common stock, restricted class A common stock, and stock units were issued and outstanding as of December 31, 2013.

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

	Year Ended December 31,
Common Stock Outstanding(1)(2)(3)	2013		2012		2011
Beginning balance		3,016,407		2,277,344		2,243,490
Issuance of class A common stock		25,875,000		669,047		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		700,000		36,493		26,161
Issuance of deferred stock units		11,477		33,523		7,693
Ending balance		29,602,884		3,016,407		2,277,344

(1) Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2) Deferred stock units held by members of our board of directors totalled 101,233, 89,754, and 56,234 as of December 31, 2013, 2012, and 2011, respectively.

(3) Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Preferred Stock

We have not issued any shares of preferred stock since we repurchased all of our previously issued and outstanding preferred stock in 2001.

Dividends

We generally intend to distribute each year substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders 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.

During 2013, we declared dividends of $21.1 million, or $0.72 per share, to class A common stockholders. During 2012, we declared a special dividend of $49.8 million, or $20.00 per share. No dividends were declared during 2011.

Earnings Per Share

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 for the indicated periods ($ in thousands, except per share data):

	Year Ended December 31,
	2013		2012		2011
Net income	$	15,032	$	181,024	$	258,142
Weighted-average shares outstanding(1)		18,520,052		2,345,943		2,266,043
Warrants and options outstanding for the purchase of class A common stock(2)		—		129,351		129,000
Weighted-average shares outstanding, diluted		18,520,052		2,475,294		2,395,043
Per share amount, basic	$	0.81	$	77.16	$	113.92
Per share amount, diluted	$	0.81	$	73.13	$	107.78

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split we effected as of May 6, 2013. See above for further discussion.

(2) As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

Refer to Note 21 for the allocation of our results of operations for each of our operating segments.

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

	Year Ended December 31,
	2013			2012			2011
Income from continuing operations	$	25,424		$	282,213		$	253,209
Net income attributable to non-controlling interests		(10,392	)		(98,780	)		5,823
Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.		15,032			183,433			259,032
Weighted-average shares outstanding(1)		18,520,052			2,345,943			2,266,043
Warrants and options outstanding for the purchase of class A common stock(2)		—			129,351			129,000
Weighted-average shares outstanding, diluted		18,520,052			2,475,294			2,395,043
Per share amount, basic	$	0.81		$	78.19		$	114.31
Per share amount, diluted	$	0.81		$	74.16		$	108.17

(1) Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

(2) As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

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Schedule IV - Mortgage Loans on Real Estate (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013
Mortgage Loans on Real Estate [Line Items]
Carrying Amount of Loans	$ 2,087,888,000
Fully impaired subordinate loans	108,800,000
Principal balance	10,500,000
Subordinate loans number of delinquent days	Greater than 90 days delinquent
Senior Mortgages Loans [Member]
Mortgage Loans on Real Estate [Line Items]
Contiguous subordinated loans	$ 68,600,000
Minimum [Member]
Mortgage Loans on Real Estate [Line Items]
LIBOR floor rate	0.20%
Maximum [Member]
Mortgage Loans on Real Estate [Line Items]
LIBOR floor rate	1.00%