| Loans Receivable |
3. LOANS RECEIVABLE
During the second quarter of 2015, we completed the
acquisition of a $4.9 billion portfolio of commercial mortgage
loans secured by properties located in North America and Europe
from General Electric Capital Corporation, or GE, and certain of
its affiliates and joint venture partnerships. The purchase price
for this GE portfolio was $4.7 billion and we assumed $202.1
million of unfunded commitments.
The following table details overall statistics for
our loans receivable portfolio as of June 30, 2015 ($ in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Floating Rate Loans |
|
|
Fixed Rate Loans |
|
|
Total |
|
|
Number of loans
|
|
|
101 |
|
|
|
37 |
|
|
|
138 |
|
|
Principal balance
|
|
$ |
8,009,046 |
|
|
$ |
2,160,563 |
|
|
$ |
10,169,609 |
|
|
Net book value
|
|
$ |
7,969,227 |
|
|
$ |
2,162,096 |
|
|
$ |
10,131,323 |
|
|
Unfunded loan commitments(1)
|
|
$ |
786,419 |
|
|
$ |
4,735 |
|
|
$ |
791,154 |
|
|
Weighted-average cash coupon(2)
|
|
|
L+4.21 |
% |
|
|
5.33 |
% |
|
|
4.72 |
% |
|
Weighted-average all-in yield(2)
|
|
|
L+4.59 |
% |
|
|
5.54 |
% |
|
|
5.06 |
% |
|
Weighted-average maximum maturity (years)(3)
|
|
|
3.5 |
|
|
|
2.9 |
|
|
|
3.4 |
|
| (1) |
Unfunded commitments will primarily be funded to finance
property improvements or lease-related expenditures by the
borrowers. These future commitments will expire over the next four
years.
|
| (2) |
As of June 30, 2015, our floating rate loans were
indexed to various benchmark rates, with 80% of floating rate loans
indexed to USD LIBOR. In addition, $1.2 billion of our floating
rate loans earned interest based on floors that are above the
applicable index, with an average floor of 0.59%, as of
June 30, 2015. In addition to cash coupon, all-in yield
includes the amortization of deferred origination fees, loan
origination costs, and accrual of both extension and exit fees.
Coupon and all-in yield for the total portfolio assume applicable
floating benchmark rates for weighted-average calculation.
|
| (3) |
Maximum maturity assumes all extension options are
exercised by the borrower, however our loans may be repaid prior to
such date. As of June 30, 2015, 69% of our loans were subject
to yield maintenance or other prepayment restrictions and 31% were
open to repayment by the borrower without penalty.
|
The following table details overall statistics for
our loans receivable portfolio as of December 31, 2014 ($ in
thousands):
|
|
|
|
|
| |
|
December 31, 2014 |
|
|
Number of loans
|
|
|
60 |
|
|
Principal balance
|
|
$ |
4,462,897 |
|
|
Net book value
|
|
$ |
4,428,500 |
|
|
Unfunded loan commitments(1)
|
|
$ |
513,229 |
|
|
Weighted-average cash coupon(2)
|
|
|
L+4.36 |
% |
|
Weighted-average all-in yield(2)
|
|
|
L+4.81 |
% |
|
Weighted-average maximum maturity (years)(3)
|
|
|
3.9 |
|
| (1) |
Unfunded commitments will primarily be funded to finance
property improvements or lease-related expenditures by the
borrowers. These future commitments will expire over the next four
years.
|
| (2) |
As of December 31, 2014, all of our loans were floating
rate loans and were indexed to various benchmark rates, with 79% of
floating rate loans indexed to USD LIBOR. In addition, 14% of our
floating rate loans earned interest based on floors that are above
the applicable index, with an average floor of 0.31%, as of
December 31, 2014. In addition to cash coupon, all-in yield
includes the amortization of deferred origination fees, loan
origination costs, and accrual of both extension and exit fees.
|
| (3) |
Maximum maturity assumes all extension options are
exercised by the borrower, however our loans may be repaid prior to
such date. As of December 31, 2014, 85% of our loans were
subject to yield maintenance or other prepayment restrictions and
15% were open to repayment by the borrower without penalty.
|
Activity relating to our loans receivable was as
follows ($ in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Principal
Balance |
|
|
Deferred Fees /
Other Items(1) |
|
|
Net Book
Value |
|
|
December 31, 2014
|
|
$ |
4,462,897 |
|
|
$ |
(34,397 |
) |
|
$ |
4,428,500 |
|
|
Loan purchases and fundings
|
|
|
6,430,243 |
|
|
|
— |
|
|
|
6,430,243 |
|
|
Loan repayments and sales
|
|
|
(723,922 |
) |
|
|
— |
|
|
|
(723,922 |
) |
|
Unrealized gain (loss) on foreign currency translation
|
|
|
391 |
|
|
|
286 |
|
|
|
677 |
|
|
Deferred fees and other items(1)
|
|
|
— |
|
|
|
(16,373 |
) |
|
|
(16,373 |
) |
|
Amortization of fees and other items(1)
|
|
|
— |
|
|
|
12,198 |
|
|
|
12,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2015
|
|
$ |
10,169,609 |
|
|
$ |
(38,286 |
) |
|
$ |
10,131,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Other items primarily consist of purchase discounts or
premiums, exit fees, and deferred origination expenses.
|
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):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 30, 2015 |
|
|
December 31, 2014 |
|
|
Asset Type
|
|
Net Book
Value |
|
|
Percentage |
|
|
Net Book
Value |
|
|
Percentage |
|
|
Senior loans(1)
|
|
$ |
9,977,017 |
|
|
|
98 |
% |
|
$ |
4,340,586 |
|
|
|
98 |
% |
|
Subordinate loans(2)
|
|
|
154,306 |
|
|
|
2 |
|
|
|
87,914 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,131,323 |
|
|
|
100 |
% |
|
$ |
4,428,500 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Type
|
|
Net Book
Value |
|
|
Percentage |
|
|
Net Book
Value |
|
|
Percentage |
|
|
Office
|
|
$ |
4,088,256 |
|
|
|
40 |
% |
|
$ |
1,878,605 |
|
|
|
42 |
% |
|
Hotel
|
|
|
2,231,682 |
|
|
|
22 |
|
|
|
1,267,486 |
|
|
|
29 |
|
|
Manufactured housing
|
|
|
1,415,800 |
|
|
|
14 |
|
|
|
— |
|
|
|
— |
|
|
Retail
|
|
|
773,034 |
|
|
|
8 |
|
|
|
270,812 |
|
|
|
6 |
|
|
Multifamily
|
|
|
472,867 |
|
|
|
5 |
|
|
|
426,094 |
|
|
|
10 |
|
|
Condominium
|
|
|
352,152 |
|
|
|
3 |
|
|
|
315,686 |
|
|
|
7 |
|
|
Other
|
|
|
797,532 |
|
|
|
8 |
|
|
|
269,817 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,131,323 |
|
|
|
100 |
% |
|
$ |
4,428,500 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Location
|
|
Net Book
Value |
|
|
Percentage |
|
|
Net Book
Value |
|
|
Percentage |
|
|
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northeast
|
|
$ |
2,275,132 |
|
|
|
22 |
% |
|
$ |
1,383,258 |
|
|
|
31 |
% |
|
Southeast
|
|
|
1,952,500 |
|
|
|
19 |
|
|
|
657,484 |
|
|
|
15 |
|
|
West
|
|
|
1,293,416 |
|
|
|
13 |
|
|
|
628,275 |
|
|
|
14 |
|
|
Southwest
|
|
|
1,266,544 |
|
|
|
13 |
|
|
|
405,741 |
|
|
|
9 |
|
|
Midwest
|
|
|
607,835 |
|
|
|
6 |
|
|
|
335,406 |
|
|
|
8 |
|
|
Northwest
|
|
|
398,951 |
|
|
|
4 |
|
|
|
138,796 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
7,794,378 |
|
|
|
77 |
|
|
|
3,548,960 |
|
|
|
80 |
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
|
1,159,450 |
|
|
|
11 |
|
|
|
622,692 |
|
|
|
14 |
|
|
Canada
|
|
|
806,010 |
|
|
|
8 |
|
|
|
137,024 |
|
|
|
3 |
|
|
Germany
|
|
|
230,565 |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
Spain
|
|
|
79,875 |
|
|
|
1 |
|
|
|
86,289 |
|
|
|
2 |
|
|
Netherlands
|
|
|
61,045 |
|
|
|
1 |
|
|
|
33,535 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
2,336,945 |
|
|
|
23 |
|
|
|
879,540 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
10,131,323 |
|
|
|
100 |
% |
|
$ |
4,428,500 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Includes senior mortgages and similar credit quality
loans, including related contiguous subordinate loans, and pari
passu participations in senior mortgage loans.
|
| (2) |
Includes mezzanine loans and subordinate interests in
mortgages.
|
Loan Risk Ratings
As further described in Note 2, our Manager
evaluates our loan portfolio on a quarterly basis. In conjunction
with our quarterly loan portfolio review, our Manager assesses the
risk factors of each loan, and assigns a risk rating based on
several factors. Factors considered in the assessment include, but
are not limited to, risk of loss, current LTV, debt yield,
collateral performance, structure, exit plan, and sponsorship.
Loans are rated “1” (less risk) through “5”
(greater risk), which ratings are defined in Note 2.
The following table allocates the principal balance
and net book value of our loans receivable based on our internal
risk ratings ($ in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 30, 2015 |
|
|
December 31, 2014 |
|
|
Risk Rating
|
|
Number
of Loans |
|
|
Principal
Balance |
|
|
Net
Book Value |
|
|
Number
of Loans |
|
|
Principal
Balance |
|
|
Net
Book Value |
|
|
1
|
|
|
9 |
|
|
$ |
970,624 |
|
|
$ |
963,451 |
|
|
|
5 |
|
|
$ |
209,961 |
|
|
$ |
209,112 |
|
|
2
|
|
|
87 |
|
|
|
6,626,108 |
|
|
|
6,601,541 |
|
|
|
44 |
|
|
|
3,339,972 |
|
|
|
3,313,906 |
|
|
3
|
|
|
42 |
|
|
|
2,572,877 |
|
|
|
2,566,331 |
|
|
|
11 |
|
|
|
912,964 |
|
|
|
905,482 |
|
|
4 - 5
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138 |
|
|
$ |
10,169,609 |
|
|
$ |
10,131,323 |
|
|
|
60 |
|
|
$ |
4,462,897 |
|
|
$ |
4,428,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We do not have any loan impairments, nonaccrual loans, or loans in
maturity default as of June 30, 2015 or December 31,
2014.
|