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.