3. LOANS RECEIVABLE, NET

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


	December 31, 2016			December 31, 2015
Number of loans		107			125
Principal balance	$	8,727,218		$	9,108,361
Net book value	$	8,692,978		$	9,077,007
Unfunded loan commitments⁽¹⁾	$	882,472		$	700,658
Weighted-average cash coupon⁽²⁾		5.01	%		4.84	%
Weighted-average all-in yield⁽²⁾		5.36	%		5.18	%
Weighted-average maximum maturity (years)⁽³⁾		3.2			3.1

(1)

Unfunded commitments will primarily be funded to finance property improvements or lease-related expenditures by the borrowers. These future commitments will be funded over the term of each loan, subject in certain cases to an expiration date.

(2)

As of December 31, 2016, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans by principal balance indexed to USD LIBOR. In addition, $216.3 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.27%, as of December 31, 2016. As of December 31, 2015, our floating rate loans were indexed to various benchmark rates, with 84% of floating rate loans indexed to USD LIBOR. In addition, $147.9 million of our floating rate loans earned interest based on floors that are above the applicable index, with an average floor of 1.80%, as of December 31, 2015. In addition to cash coupon, all-in yield includes the amortization of deferred origination fees, loan origination costs, purchase discounts, and accrual of both extension and exit fees. Cash coupon and all-in yield 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 December 31, 2016, 64% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 36% were open to repayment by the borrower without penalty. As of December 31, 2015, 64% of our loans were subject to yield maintenance or other prepayment restrictions and 36% were open to repayment by the borrower without penalty.

Activity relating to our loans receivable portfolio 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 originations, acquisitions, and fundings		7,203,145			—			7,203,145
Loan repayments		(2,407,920	)		—			(2,407,920	)
Unrealized (loss) gain on foreign currency translation		(149,761	)		492			(149,269	)
Deferred fees and other items⁽¹⁾		—			(33,501	)		(33,501	)
Amortization of fees and other items⁽¹⁾		—			36,052			36,052

December 31, 2015	$	9,108,361		$	(31,354	)	$	9,077,007

Loan fundings		3,151,882			—			3,151,882
Loan repayments		(3,374,622	)		—			(3,374,622	)
Unrealized (loss) gain on foreign currency translation		(158,403	)		1,466			(156,937	)
Deferred fees and other items⁽¹⁾		—			(44,697	)		(44,697	)
Amortization of fees and other items⁽¹⁾		—			40,345			40,345

December 31, 2016	$	8,727,218		$	(34,240	)	$	8,692,978

(1)	Other items primarily consist of purchase discounts or premiums, exit fees, and deferred origination expenses.

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):


December 31, 2016
Property Type	Number of Loans	Net Book Value		Total Loan Exposure⁽¹⁾		Percentage of Portfolio
Office	55	$	4,800,609	$	4,889,456		50	%
Hotel	18		1,889,732		1,957,334		20
Retail	9		769,813		1,173,592		12
Multifamily	8		521,097		523,529		5
Manufactured housing	9		296,290		296,252		3
Condominium	2		66,070		258,360		3
Other	6		349,367		658,211		7

	107	$	8,692,978	$	9,756,734		100	%


Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure⁽¹⁾		Percentage of Portfolio
United States
Northeast	26	$	2,548,257	$	2,562,149		26	%
Southeast	21		1,492,530		1,899,748		19
West	22		1,628,811		1,828,667		19
Midwest	7		695,713		698,093		7
Southwest	8		380,639		379,766		4
Northwest	3		227,747		293,564		3

Subtotal	87		6,973,697		7,661,987		78
International
United Kingdom	9		977,136		1,305,816		13
Canada	8		487,835		483,923		5
Germany	1		204,241		254,644		3
Netherlands	2		50,069		50,364		1

Subtotal	20		1,719,281		2,094,747		22

Total	107	$	8,692,978	$	9,756,734		100	%

(1)

In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $1.0 billion of such non-consolidated senior interests as of December 31, 2016.


December 31, 2015
Property Type	Number of Loans	Net Book Value		Total Loan Exposure⁽¹⁾		Percentage of Portfolio
Office	55	$	4,039,521	$	4,085,007		41	%
Hotel	20		1,903,544		1,986,113		20
Manufactured housing	18		1,361,572		1,359,132		13
Retail	9		684,944		1,031,405		10
Multifamily	11		580,112		582,545		6
Condominium	3		127,434		353,144		3
Other	9		379,880		750,780		7

	125	$	9,077,007	$	10,148,126		100	%


Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure⁽¹⁾		Percentage of Portfolio
United States
Northeast	25	$	2,260,392	$	2,272,163		22	%
Southeast	27		1,836,766		2,185,609		21
West	22		1,125,238		1,356,301		13
Southwest	15		1,035,839		1,034,732		10
Midwest	5		616,964		617,774		6
Northwest	5		390,307		415,207		4

Subtotal	99		7,265,506		7,881,786		76
International
United Kingdom	10		888,998		1,283,644		13
Canada	11		561,023		558,724		6
Germany	2		235,294		296,424		3
Spain	1		66,661		67,416		1
Netherlands	2		59,525		60,132		1

Subtotal	26		1,811,501		2,266,340		24

Total	125	$	9,077,007	$	10,148,126		100	%

(1)

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):


December 31, 2016							December 31, 2015
Risk Rating	Number of Loans		Net Book Value		Total Loan Exposure⁽¹⁾		Risk Rating		Number of Loans		Net Book Value		Total Loan Exposure⁽¹⁾
1		8	$	361,100	$	361,574		1		12	$	919,991	$	925,443
2		52		4,011,992		4,083,678		2		77		5,929,447		6,316,890
3		46		4,299,026		5,290,668		3		35		2,114,531		2,792,510
4		1		20,860		20,814		4		1		113,038		113,283
5		—		—		—		5		—		—		—

		107	$	8,692,978	$	9,756,734				125	$	9,077,007	$	10,148,126

(1)

The weighted-average risk rating of our total loan exposure was 2.5 and 2.2 as of December 31, 2016 and December 31, 2015, respectively. The increase in weighted-average risk rating was primarily driven by repayments of loans with lower risk ratings, and not rating downgrades in the existing portfolio.

We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of December 31, 2016 or 2015.

One of the loans in our portfolio, with a principal balance of $11.0 million as of December 31, 2016, previously experienced a maturity default during the third quarter of 2015 as a result of not meeting certain loan covenants. This loan, which had a principal balance of $113.3 million at the time of default was subsequently modified to include, among other changes, an extension of its maturity date to February 28, 2017. The loan’s risk rating was upgraded from “4” as of December 31, 2015 to a “2” as of December 31, 2016 as a result of collateral asset sales and resulting loan repayments during the year ended 2016, and positive leasing activity at the remaining collateral assets. As of December 31, 2016 and 2015, the borrower was current with all terms of the loan and we expect to collect all contractual amounts due thereunder. The risk rating of one of the loans in our portfolio with a net book value of $20.9 million was downgraded to a “4” as of December 31, 2016, however the borrower is current with all terms of the loan and we expect to collect all contractual amounts due thereunder.