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. During the three months ended September 30, 2015, we originated and acquired $351.4 million of loans and funded $85.4 million under existing loans.

The following table details overall statistics for our loans receivable portfolio as of September 30, 2015 ($ in thousands):


	Floating Rate			Fixed Rate			Total
Number of loans		96			36			132
Principal balance	$	7,339,875		$	2,073,090		$	9,412,965
Net book value	$	7,303,478		$	2,074,113		$	9,377,591
Unfunded loan commitments⁽¹⁾	$	733,540		$	4,720		$	738,260
Weighted-average cash coupon⁽²⁾		L+4.18	%		5.65	%		4.77	%
Weighted-average all-in yield⁽²⁾		L+4.55	%		5.79	%		5.09	%
Weighted-average maximum maturity (years)⁽³⁾		3.4			2.9			3.3

(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 September 30, 2015, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans indexed to USD LIBOR. In addition, $1.1 billion of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 0.64%, as of September 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 rate 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 September 30, 2015, 65% of our loans were subject to yield maintenance or other prepayment restrictions and 35% 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.

There were no fixed rate loans in our loans receivable portfolio as of December 31, 2014.

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


	Principal			Deferred Fees /			Net Book
	Balance			Other Items⁽¹⁾			Value
December 31, 2014	$	4,462,897		$	(34,397	)	$	4,428,500
Loan originations, acquisitions, and fundings		6,807,347			—			6,807,347
Loan repayments		(1,758,821	)		—			(1,758,821	)
Unrealized (loss) gain on foreign currency translation		(98,458	)		333			(98,125	)
Deferred fees and other items⁽¹⁾		—			(26,799	)		(26,799	)
Amortization of fees and other items⁽¹⁾		—			25,489			25,489

September 30, 2015	$	9,412,965		$	(35,374	)	$	9,377,591

(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):


	September 30, 2015					December 31, 2014
	Net Book					Net Book
Asset Type	Value		Percentage			Value		Percentage
Senior loans⁽¹⁾	$	9,118,863		97	%	$	4,340,586		98	%
Subordinate loans⁽²⁾		258,728		3			87,914		2

	$	9,377,591		100	%	$	4,428,500		100	%


Property Type	Net Book Value		Percentage			Net Book Value		Percentage
Office	$	3,894,843		41	%	$	1,878,605		42	%
Hotel		1,943,233		21			1,267,486		29
Manufactured housing		1,407,890		15			—		—
Retail		762,293		8			270,812		6
Multifamily		581,689		6			426,094		10
Condominium		163,323		2			315,686		7
Other		624,320		7			269,817		6

	$	9,377,591		100	%	$	4,428,500		100	%


Geographic Location	Net Book Value		Percentage			Net Book Value		Percentage
United States
Northeast	$	2,220,088		23	%	$	1,383,258		31	%
Southeast		1,920,611		20			657,484		15
Southwest		1,211,043		13			405,741		9
West		1,105,932		12			628,275		14
Midwest		615,121		7			335,406		8
Northwest		384,855		4			138,796		3

Subtotal		7,457,650		79			3,548,960		80
International
United Kingdom		970,099		10			622,692		14
Canada		577,181		6			137,024		3
Germany		243,082		3			—		—
Spain		68,398		1			86,289		2
Netherlands		61,181		1			33,535		1

Subtotal		1,919,941		21			879,540		20

Total	$	9,377,591		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):


	September 30, 2015						December 31, 2014
Risk Rating	Number of Loans		Principal Balance		Net Book Value		Number of Loans		Principal Balance		Net Book Value
1		14	$	1,080,812	$	1,074,105		5	$	209,961	$	209,112
2		82		6,218,253		6,196,357		44		3,339,972		3,313,906
3		35		1,993,998		1,987,472		11		912,964		905,482
4		1		119,902		119,657		—		—		—
5		—		—		—		—		—		—

		132	$	9,412,965	$	9,377,591		60	$	4,462,897	$	4,428,500

We did not have any loan impairments or nonaccrual loans as of September 30, 2015 or December 31, 2014. We had one loan with a net book value of $119.7 million which had a maturity default that was less than 90 days past due as of September 30, 2015. As of September 30, 2015, we expect to collect all amounts due under this loan. We did not have any loans in maturity default as of December 31, 2014.