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Loans Receivable
 3 Months Ended
Mar. 31, 2014
Receivables [Abstract]  
Loans Receivable

4. LOANS RECEIVABLE

As of March 31, 2014, our consolidated balance sheet included $2.7 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 14 for further discussion of our operating segments.

 

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

 

     Principal
Balance		     Deferred Fees and
Other Items(1)		     Net Book
Value		  

December 31, 2013

    $ 2,076,411      $ (29,188 )    $ 2,047,223   

Loan fundings

      740,236        —          740,236   

Loan repayments and sales

      (72,850 )      —          (72,850 ) 

Deferred origination fees and expenses

      —          (7,121 )      (7,121 ) 

Amortization of deferred fees and expenses

      —          3,470        3,470   

Unrealized loss on foreign currency translation

      —          (799 )      (799 ) 
  

 

 

    

 

 

    

 

 

  

March 31, 2014

    $ 2,743,797      $ (33,638 )    $ 2,710,159   
  

 

 

    

 

 

    

 

 

  

 

(1) Includes a loan loss reserve of $10.5 million as of both March 31, 2014 and December 31, 2013, related to one loan owned by CT CDO I with a principal balance of $10.5 million.

As of March 31, 2014, we had unfunded commitments of $316.4 million related to 23 loans receivable, which amounts would primarily be funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments will expire over the next five years.

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

 

     March 31, 2014     December 31, 2013  

Number of loans

      41        31   

Principal balance

    $ 2,743,797      $ 2,076,411   

Net book value

    $ 2,710,159      $ 2,047,223   

Weighted-average cash coupon(1)(2)

      L+4.60 %      L+4.64 % 

Weighted-average all-in yield(1)(2)

      L+5.16 %      L+5.26 % 

Weighted-average maximum maturity (years)(2)(3)

      4.0        4.1   

 

(1) As of March 31, 2014, 95% of our loans are indexed to one-month LIBOR and 5% are indexed to three-month LIBOR. In addition, 26% of our loans have LIBOR floors, with an average floor of 0.35%, as of March 31, 2014.
(2) Amounts exclude non-performing loans owned by CT CDO I.
(3) Maximum maturity assumes all extension options are exercised, however our loans may be repaid prior to such date.

 

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):

 

     March 31, 2014     December 31, 2013  

Asset Type

    Net Book
Value		      Percentage     Net Book
Value		      Percentage  

Senior mortgage loans(1)

    $ 2,461,832         91 %    $ 1,800,329         88 % 

Subordinate loans(2)

      248,327         9        246,894         12   
  

 

 

     

 

 

    

 

 

     

 

 

  
   $ 2,710,159         100 %    $ 2,047,223         100 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Property Type

   

 

Net Book
Value

      Percentage     Net Book
Value		      Percentage  

Office

    $ 1,127,370         42 %    $ 864,666         42 % 

Multifamily

      691,758         25        617,464         30   

Hotel

      615,872         23        390,492         19   

Other

      275,159         10        174,601         9   
  

 

 

     

 

 

    

 

 

     

 

 

  
   $ 2,710,159         100 %    $ 2,047,223         100 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Geographic Location

   

 

Net Book
Value

      Percentage     Net Book
Value		      Percentage  

Northeast

    $ 1,162,339         43 %    $ 828,571         40 % 

West

      512,908         19        469,262         23   

Southwest

      302,384         11        216,429         11   

Southeast

      273,457         10        243,798         12   

Northwest

      239,202         9        166,207         8   

Midwest

      100,753         4        85,708         4   

United Kingdom

      119,116         4        37,248         2   
  

 

 

     

 

 

    

 

 

     

 

 

  
   $ 2,710,159         100 %    $ 2,047,223         100 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

 

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $53.7 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):

 

     March 31, 2014      December 31, 2013  

Risk Rating

    Number
of Loans		      Principal
Balance		      Net
Book Value		      Number
of Loans		      Principal
Balance		      Net
Book Value		  

1 - 3

      39       $ 2,706,249       $ 2,683,159         29       $ 2,038,863       $ 2,020,223   

4 - 5

      —           —           —           —           —           —     

6 - 8

      2         37,548         27,000         2         37,548         27,000   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     41       $ 2,743,797       $ 2,710,159         31       $ 2,076,411       $ 2,047,223   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

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)  
     March 31, 2014      December 31, 2013  

Risk Rating

    Number
of Loans		      Principal
Balance		      Net
Book Value		      Number
of Loans		      Principal
Balance		      Net
Book Value		  

1 - 3

      36       $ 2,478,840       $ 2,461,832         26       $ 1,811,513       $ 1,800,329   

4 - 5

      —           —           —           —           —           —     

6 - 8

      —           —           —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     36       $ 2,478,840       $ 2,461,832         26       $ 1,811,513       $ 1,800,329   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Includes senior mortgage loans, related contiguous subordinate loans with a net book value of $53.7 million, and pari passu participations in mortgages.

 

     Subordinate Loans(1)  
     March 31, 2014      December 31, 2013  

Risk Rating

    Number
of Loans		      Principal
Balance		      Net
Book Value		      Number
of Loans		      Principal
Balance		      Net
Book Value		  

1 - 3

      3       $ 227,409       $ 221,327         3       $ 227,350       $ 219,894   

4 - 5

      —           —           —           —           —           —     

6 - 8

      2         37,548         27,000         2         37,548         27,000   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
     5       $    264,957       $    248,327         5       $    264,898       $    246,894   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(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 both March 31, 2014 and December 31, 2013, CT CDO I, which is a component of 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 recorded a 100% loan loss reserve on this loan. As of both March 31, 2014 and December 31, 2013, CT CDO I had one loan with a net book value of $27.0 million in maturity default, but which had no reserve recorded due to our expectation of future repayment.

Nonaccrual loans

We do not have any nonaccrual loans in our Loan Origination segment. CT CDO I, which is a component of our CT Legacy Portfolio segment, had two subordinate interests in mortgage loans on nonaccrual status with an aggregate principal balance of $37.5 million and a net book value of $27.0 million as of March 31, 2014. As of December 31, 2013, CT CDO I 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. 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 March 31, 2014 or December 31, 2013.