10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________ 

FORM 10-Q

__________________________________ 

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2021

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                     to                    

Commission File Number: 001-34452

__________________________________ 

Apollo Commercial Real Estate Finance, Inc.

(Exact name of registrant as specified in its charter)

__________________________________ 

Maryland	27-0467113
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Apollo Commercial Real Estate Finance, Inc.

c/o Apollo Global Management, Inc.

9 West 57th Street, 43rd Floor,

New York, New York 10019

(Address of principal executive offices) (Zip Code)

(212) 515–3200

(Registrant’s telephone number, including area code)

__________________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	ARI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of July 23, 2021, there were 139,894,060 shares, par value $0.01, of the registrant’s common stock issued and outstanding.

Table of Contents

	Page
Part I - Financial Information
Item 1. Financial Statements	4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	54
Part II - Other Information
Item 1. Legal Proceedings	54
Item 1A. Risk Factors	54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3. Defaults Upon Senior Securities	54
Item 4. Mine Safety Disclosures	54
Item 5. Other Information	54
Item 6. Exhibits	54

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands—except share data)

	June 30, 2021		December 31, 2020
Assets:
Cash and cash equivalents	$	204,581	$	325,498
Commercial mortgage loans, net(1)(2)	6,653,197		5,451,084
Subordinate loans and other lending assets, net(2)	866,908		1,045,893
Real estate owned, net (net of $452 accumulated depreciation in 2021)	153,848		—
Real estate owned, held for sale, net	—		42,905
Other assets	75,830		74,640
Total Assets	$	7,954,364	$	6,940,020
Liabilities and Stockholders' Equity
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $9,753 and $12,993 in 2021 and 2020, respectively)	$	3,679,906	$	3,436,672
Senior secured term loans, net (net of deferred financing costs of $10,098 and $7,130 in 2021 and 2020, respectively)	774,569		483,465
Senior secured notes, net (net of deferred financing costs of $6,306 and $0 in 2021 and 2020, respectively)	493,694		—
Convertible senior notes, net	567,785		565,654
Accounts payable, accrued expenses and other liabilities(3)	84,186		74,887
Participations sold	27,662		34,974
Debt related to real estate owned, held for sale	—		33,000
Derivative liabilities, net	22,514		31,241
Payable to related party	9,440		9,598
Total Liabilities	5,659,756		4,669,491
Commitments and Contingencies (see Note 17)
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, Series B, 6,770,393 shares issued and outstanding ($169,260 liquidation preference)	68		68
Common stock, $0.01 par value, 450,000,000 shares authorized, 139,884,060 and 139,295,867 shares issued and outstanding in 2021 and 2020, respectively	1,399		1,393
Additional paid-in-capital	2,712,212		2,707,792
Accumulated deficit	(419,071)		(438,724)
Total Stockholders’ Equity	2,294,608		2,270,529
Total Liabilities and Stockholders’ Equity	$	7,954,364	$	6,940,020

———————

(1) Includes $5,489,059 and $5,418,999 pledged as collateral under secured debt arrangements in 2021 and 2020, respectively

(2) Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

(3) Includes $2,444 and $3,365 of General CECL Allowance related to unfunded commitments on commercial mortgage loans, subordinate loans and other lending assets, net in 2021 and 2020, respectively.

See notes to unaudited condensed consolidated financial statements.

4

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations (Unaudited)

(in thousands—except share and per share data)

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Net interest income:
Interest income from commercial mortgage loans	$	82,447	$	75,641	$	157,803	$	157,496
Interest income from subordinate loans and other lending assets	31,775		32,616		63,234		66,634
Interest expense	(39,737)		(37,498)		(75,401)		(78,703)
Net interest income	$	74,485	$	70,759	$	145,636	$	145,427
Revenue from real estate owned operations	1,374		—		1,374		—
Total net revenue	$	75,859	$	70,759	$	147,010	$	145,427
Operating expenses:
General and administrative expenses (includes equity-based compensation of $4,357 and $8,744 in 2021 and $4,252 and $8,515 in 2020, respectively)	$	(6,734)	$	(6,425)	$	(13,674)	$	(12,956)
Management fees to related party	(9,440)		(9,957)		(18,804)		(20,225)
Operating expenses related to real estate owned	(1,994)		$	—	(1,994)		$	—
Depreciation and amortization on real estate owned	(452)		—		(452)		—
Total operating expenses	$	(18,620)	$	(16,382)	$	(34,924)	$	(33,181)
Other income	$	17	$	591	$	109	$	1,351
Realized loss on investments	(20,000)		(16,405)		(20,000)		(16,405)
Reversal of (provision for) loan losses, net(1)	29,586		25,169		30,824		(158,296)
Realized losses and impairments on real estate owned	—		—		(550)		—
Foreign currency translation gain (loss)	4,054		2,559		(3,395)		(35,390)
Gain (loss) on foreign currency forward contracts (includes unrealized gains (losses) of $(2,021) and $8,481 in 2021 and $(9,004) and $53,432 in 2020, respectively)	(3,094)		(2,995)		6,706		67,496
Gain (loss) on interest rate hedging instruments	(111)		(3,095)		246		(38,643)
Net income (loss)	$	67,691	$	60,201	$	126,026	$	(67,641)
Preferred dividends	(3,385)		(3,385)		(6,770)		(6,770)
Net income (loss) available to common stockholders	$	64,306	$	56,816	$	119,256	$	(74,411)
Net income (loss) per share of common stock:
Basic	$	0.45	$	0.37	$	0.84	$	(0.50)
Diluted	$	0.42	$	0.36	$	0.79	$	(0.50)
Basic weighted-average shares of common stock outstanding	139,884,060		151,523,513		139,845,178		152,735,852
Diluted weighted-average shares of common stock outstanding	170,832,186		182,083,702		170,812,544		152,735,852
Dividend declared per share of common stock	$	0.35	$	0.35	$	0.70	$	0.75

———————

(1) Comprised of $30,000, $30,000, $9,500 and $(140,500) Specific CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively, and $(414), $824, $15,669, and $(17,796) of General CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively.

See notes to unaudited condensed consolidated financial statements.

5

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

(in thousands—except share and per share data)

	Preferred Stock			Common Stock			Additional Paid-In-Capital		Accumulated Deficit		Total
	Shares	Par		Shares	Par
Balance at January 1, 2021	6,770,393	$	68	139,295,867	$	1,393	$	2,707,792	$	(438,724)	$	2,270,529
Capital increase related to Equity Incentive Plan	—	—		553,008	5		103		—		108
Offering costs	—	—		—	—		(40)		—		(40)
Net income	—	—		—	—		—		58,335		58,335
Dividends declared on preferred stock - $0.50 per share	—	—		—	—		—		(3,385)		(3,385)
Dividends declared on common stock - $0.35 per share	—	—		—	—		—		(49,794)		(49,794)
Balance at March 31, 2021	6,770,393	$	68	139,848,875	$	1,398	$	2,707,855	$	(433,568)	$	2,275,753
Capital increase related to Equity Incentive Plan	—	—		35,185	1		4,357		—		4,358
Net income	—	—		—	—		—		67,691		67,691
Dividends declared on preferred stock - $0.50 per share	—	—		—	—		—		(3,385)		(3,385)
Dividends declared on common stock - $0.35 per share	—	—		—	—		—		(49,809)		(49,809)
Balance at June 30, 2021	6,770,393	$	68	139,884,060	$	1,399	$	2,712,212	$	(419,071)	$	2,294,608

	Preferred Stock			Common Stock			Additional Paid-In-Capital		Accumulated Deficit		Total
	Shares	Par		Shares	Par
Balance at January 1, 2020	6,770,393	$	68	153,537,296	$	1,535	$	2,825,317	$	(196,945)	$	2,629,975
Adoption of ASU 2016-13	—	—		—	—		—		(30,867)		(30,867)
Capital increase (decrease) related to Equity Incentive Plan	—	—		503,251	5		(2,236)		—		(2,231)
Repurchase of common stock	—	—		(300,000)	(3)		(2,438)		—		(2,441)
Net loss	—	—		—	—		—		(127,842)		(127,842)
Dividends declared on preferred stock - $0.50 per share	—	—		—	—		—		(3,385)		(3,385)
Dividends declared on common stock - $0.40 per share	—	—		—	—		—		(62,298)		(62,298)
Balance at March 31, 2020	6,770,393	$	68	153,740,547	$	1,537	$	2,820,643	$	(421,337)	$	2,400,911
Capital increase related to Equity Incentive Plan	—	—		82,235	1		4,251		—		4,252
Repurchase of common stock	—	—		(5,495,976)	(55)		(43,783)		—		(43,838)
Net income	—	—		—	—		—		60,201		60,201
Dividends declared on preferred stock - $0.50 per share	—	—		—	—		—		(3,385)		(3,385)
Dividends declared on common stock - $0.35 per share	—	—		—	—		—		(52,635)		(52,635)
Balance at June 30, 2020	6,770,393	$	68	148,326,806	$	1,483	$	2,781,111	$	(417,156)	$	2,365,506

See notes to unaudited condensed consolidated financial statements.

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Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited)

(in thousands)

	For the six months ended June 30,
	2021		2020
Cash flows provided by operating activities:
Net income (loss)	$	126,026	$	(67,641)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of discount/premium and PIK	(42,991)		(36,449)
Amortization of deferred financing costs	6,344		6,577
Equity-based compensation	8,744		8,515
Provision for (reversal of) loan losses, net	(30,824)		158,296
Foreign currency loss	2,743		48,404
Unrealized gain on derivative instruments	(8,727)		(68,640)
Depreciation and amortization	452		—
Realized losses and impairments on investments and real estate owned	20,550		16,405
Changes in operating assets and liabilities:
Proceeds received from PIK	34,986		—
Other assets	875		(9,615)
Accounts payable, accrued expenses and other liabilities	2,923		(1,921)
Payable to related party	(158)		(472)
Net cash provided by operating activities	120,943		53,459
Cash flows used in investing activities:
New funding of commercial mortgage loans	(1,322,016)		(447,440)
Add-on funding of commercial mortgage loans	(138,489)		(197,261)
Add-on funding of subordinate loans and other lending assets	(107,716)		(25,766)
Proceeds received from the repayment and sale of commercial mortgage loans	295,914		397,994
Proceeds received from the repayment of subordinate loans and other lending assets	195,551		1,885
Origination and exit fees received on commercial mortgage loans, and subordinate loans and other lending assets, net	17,061		6,110
Proceeds received from the sale of real estate owned, held for sale	42,356		—
Cash received from hotel title assumption	4,148		—
Increase in collateral held related to derivative contracts, net	260		55,550
Net cash used in investing activities	(1,012,931)		(208,928)
Cash flows from financing activities:
Payment of offering costs	(40)		—
Repurchase of common stock	—		(46,279)
Proceeds from secured debt arrangements	987,010		1,373,643
Repayments of secured debt arrangements	(744,570)		(980,280)
Repayments of senior secured term loan principal	(3,250)		(2,500)
Proceeds from issuance of senior secured term loan	297,000		—
Proceeds from issuance of senior secured notes	500,000		—
Repayment of debt related to real estate owned	(143,073)		—
Payment of deferred financing costs	(11,217)		(7,522)
Other financing activities	(4,278)		(6,494)
Dividends on common stock	(99,741)		(133,446)
Dividends on preferred stock	(6,770)		(6,770)
Net cash provided by financing activities	771,071		190,352
Net increase (decrease) in cash and cash equivalents	(120,917)		34,883
Cash and cash equivalents, beginning of period	325,498		452,282
Cash and cash equivalents, end of period	$	204,581	$	487,165
Supplemental disclosure of cash flow information:
Interest paid	$	63,071	$	71,974
Supplemental disclosure of non-cash financing activities:
Dividend declared, not yet paid	$	52,635	$	56,256
Change in participation sold	$	20,358	$	—
Repayments of PIK on participation sold	$	(27,670)	$	—
Loan proceeds held by servicer	$	4,853	$	—
Deferred financing costs, not yet paid	$	3,757	$	2,596
Transfer of proceeds borrowed under secured credit facilities to Barclays Private Securitization	$	—	$	782,006
Assumption of real estate	$	154,300	$	—
Assumption of debt related to real estate owned	$	(110,073)	$	—
Assumption of other assets related to real estate owned	$	1,555	$	—
Assumption of accounts payable and other liabilities related to real estate owned	$	(4,641)	$	—
Transfer of subordinate loans to real estate owned	$	(45,289)	$	—

See notes to unaudited condensed consolidated financial statements.

7

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Organization

Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo").

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss allowances. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 ("Annual Report"), as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other future period.

We currently operate in one reporting segment.

Risks and Uncertainties

During the first quarter of 2020, there was a global outbreak of a novel coronavirus ("COVID-19"), which was declared by the World Health Organization as a pandemic. In response to COVID-19, the United States and numerous other countries have declared national emergencies, which has led to large scale quarantines as well as restrictions to business deemed non-essential. These responses to COVID-19 have disrupted economic activities and could have a continued significant adverse effect on economic and market conditions. As we are still in the midst of the COVID-19 pandemic we are not in a position to estimate the ultimate impact this will have on our business and the economy as a whole. We believe the estimates used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of June 30, 2021. The uncertainty surrounding COVID-19 may materially impact the accuracy of the estimates and assumptions used in the financial statements and related footnotes and, as a result, actual results may vary significantly from estimates.

Real Estate Owned (and related debt)

In order to maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or the execution of a deed in lieu of foreclosure. Foreclosed properties are generally recognized at fair value and the assets and liabilities are presented separately when legal title or physical possession is assumed. If the fair value of the real estate is lower than the carrying value of the loan, the difference, along with any previously recorded Specific CECL Allowances, are recorded as a realized loss on investments in the consolidated statement of operations.

Acquisition of real estate is accounted for using the acquisition method under Accounting Standards Codification ("ASC")

8

Topic 805, "Business Combinations." We recognize and measure identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree, if applicable, based on their relative fair values. If applicable, we recognize and measure intangible assets and expense acquisition-related costs in the periods in which the costs are incurred and the services are received.

We evaluate real estate owned, held for sale for subsequent decrease in fair value, which is recorded as an impairment. Real estate owned is classified as held for sale in the period in which the six criteria under ASC Topic 360, "Property, Plant, and Equipment" are met: (1) we commit to a plan and have the authority to sell the asset; (2) the asset is available for sale in its current condition; (3) we have initiated an active marketing plan to locate a buyer for the asset; (4) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months; (5) the asset is being actively marketed for sale at a price that is reflective of its current fair value; and (6) we do not anticipate changes to our plan to sell the asset. Once a real estate asset is classified as held for sale, depreciation expense is no longer recorded.

Real estate assets that are acquired for investment are assumed at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges, if any. Upon acquisition, we allocate the value of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment, and intangible assets, if applicable. Real estate assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and up to 8 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred.

Real estate assets are evaluated for impairment on a quarterly basis. We consider the following factors when performing our impairment analysis: (1) Management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) our ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, we make certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon our estimate of a capitalization rate and discount rate.

Revenue Recognition

Interest income on our lending assets is accrued based on the actual coupon rate adjusted for accretion of any purchase discounts, the amortization of any purchase premiums and the accretion of any deferred fees, in accordance with GAAP. Loans that are significantly past due may be placed on non-accrual if we determine it is probable that we will not collect all payments which are contractually due. When a loan is placed on non-accrual, interest is only recorded as interest income when it's received. Under certain circumstances, we may apply cost recovery under which interest collected on a loan is a reduction to its amortized cost. The cost recovery method will no longer apply if collection of all principal and interest is reasonably assured. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due.

Operating revenue from real estate owned that is a hotel property represents revenue associated with the operations of the hotel property. Revenue from the operation of the hotel property is recognized when guestrooms are occupied or services have been rendered. Revenues are recorded net of any discounts and sales and other taxes collected from customers. Revenues consist of room sales, food and beverage sales and other hotel revenues.

Gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with ASC 610-20, "Gains and Losses from the Derecognition of Nonfinancial Assets". We primarily use specific identification method to allocate costs.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06 "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity" ("ASU 2020-06"). The intention of ASU 2020-06 is to address the complexities in accounting for certain financial instruments with a debt and equity component. Under ASU 2020-06, the number of accounting models for convertible notes will be reduced and entities that issue convertible debt will be required to use the if-converted method for the computation of diluted "Earnings per share" under ASC 260. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 and may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. We are currently assessing the impact this guidance will have on our

9

condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to debt instruments, derivatives, and other contracts that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This guidance is optional and may be elected through December 31, 2022 using a prospective application on all eligible contract modifications. We have loan agreements, debt agreements, and an interest rate cap that incorporate LIBOR as a referenced interest rate. It is difficult to predict what effect, if any, the phase-out of LIBOR and the use of alternative benchmarks may have on our business or on the overall financial markets. We have not adopted any of the optional expedients or exceptions through June 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions.

Note 3 – Fair Value Disclosure

GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair value. Market-based or observable inputs are the preferred source of values, followed by valuation models using management's assumptions in the absence of market-based or observable inputs. The three levels of the hierarchy as noted in ASC 820, "Fair Value Measurements and Disclosures" are described below:

Level I — Quoted prices in active markets for identical assets or liabilities.

Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

While we anticipate that our valuation methods will be appropriate and consistent with valuation methods used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

The estimated fair values of our derivative instruments are determined using a discounted cash flow analysis on the expected cash flows of each instrument. Our derivative instruments are classified as Level II in the fair value hierarchy.

The fair values of foreign exchange forwards are determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying countries.

The fair value of our interest rate cap is determined by using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the interest rate cap. The variable interest rates used in the calculation of projected receipts on the interest rate cap are based on a third party expert's expectation of future interest rates derived from observable market interest rate curves and volatilities.

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with recurring fair value measurements were categorized as of June 30, 2021 and December 31, 2020 ($ in thousands): 

	Fair Value as of June 30, 2021								Fair Value as of December 31, 2020
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Recurring fair value measurements:
Foreign currency forward, net	$	—	$	(22,894)	$	—	$	(22,894)	$	—	$	(31,375)	$	—	$	(31,375)
Interest rate cap asset	—		380		—		380		—		134		—		134
Total financial instruments	$	—	$	(22,514)	$	—	$	(22,514)	$	—	$	(31,241)	$	—	$	(31,241)

Non-recurring Fair Value Measurements

We are required to record real estate owned, a nonfinancial asset, at fair value on a non-recurring basis in accordance with GAAP. If the real estate is classified as held for sale, the fair value of our real estate owned and the related debt is determined by using the market approach, less costs to sell. The market approach utilizes the fair value of similar assets and liabilities in the

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marketplace as well as an internal analysis as to selling price of specific assets and liabilities, which we deem to be significant unobservable inputs. As such the fair value of real estate owned, held for sale and the related debt falls within Level III of the fair value hierarchy.

During the first quarter of 2021, there was an increase in our expected costs to sell our real estate owned, held for sale and we performed a non-recurring fair value measurement. During the second quarter of 2021, the property was sold and no additional gain or loss was recorded.

On May 24, 2021, we acquired legal title to a full-service luxury hotel through a deed-in-lieu of foreclosure, which is classified as real estate owned on our condensed consolidated balance sheet. We assumed the hotel’s assets and liabilities, including a $110.0 million mortgage loan. We performed a non-recurring fair value measurement on the assets and liabilities assumed as of the date we acquired legal title to the real estate. On June 29, 2021, we repaid the $110.0 million mortgage loan against the property.

Refer to "Note 5 - Real Estate Owned and Related Debt" for further discussion.

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with non-recurring fair value measurements were categorized as of June 30, 2021 and December 31, 2020 ($ in thousands): 

	Fair Value as of June 30, 2021								Fair Value as of December 31, 2020
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Non-Recurring fair value measurements:
Real estate owned	$	—	$	—	$	154,300	$	154,300	$	—	$	—	$	—	$	—
Real estate owned, held for sale	—		—		—		—		—		—		42,905		42,905
Debt related to real estate owned, held for sale	—		—		—		—		—		—		(33,000)		(33,000)
Net real estate owned and related debt	$	—	$	—	$	154,300	$	154,300	$	—	$	—	$	9,905	$	9,905

Note 4 – Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net

Our loan portfolio was comprised of the following at June 30, 2021 and December 31, 2020 ($ in thousands):

Loan Type	June 30, 2021		December 31, 2020
Commercial mortgage loans, net (1)	$	6,653,197	$	5,451,084
Subordinate loans and other lending assets, net	866,908		1,045,893
Carrying value, net	$	7,520,105	$	6,496,977

  ———————

(1)Includes $146.5 million and $136.1 million in 2021 and 2020, respectively, of contiguous financing structured as subordinate loans.

Our loan portfolio consisted of 97% and 95% floating rate loans, based on amortized cost, as of June 30, 2021 and December 31, 2020, respectively.

Activity relating to our loan portfolio, for the six months ended June 30, 2021, was as follows ($ in thousands):

	Principal Balance		Deferred Fees/Other Items (1)		Specific CECL Allowance		Carrying Value, Net(2)
December 31, 2020	$	6,728,424	$	(18,345)	$	(175,000)	$	6,535,079
New loan fundings	1,322,016		—		—		1,322,016
Add-on loan fundings (3)	264,486		—		—		264,486
Loan repayments and sales	(552,651)		—		—		(552,651)
Gain (loss) on foreign currency translation	(5,027)		166		—		(4,861)
Specific CECL Allowance	—		—		30,000		30,000
Realized loss on investment	(20,000)		—		—		(20,000)

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Transfer to real estate owned	(45,448)		159		—		(45,289)
Deferred fees	—		(17,061)		—		(17,061)
PIK interest and amortization of fees	34,502		12,083		—		46,585
June 30, 2021	$	7,726,302	$	(22,998)	$	(145,000)	$	7,558,304
General CECL Allowance (4)							(38,199)
Carrying value, net							$	7,520,105

———————

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

(2)December 31, 2020 carrying value excludes General CECL Allowance.

(3)Represents fundings for loans closed prior to 2021.

(4)$2.4 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	June 30, 2021			December 31, 2020
Number of loans	68			67
Principal balance	$	7,726,302		$	6,728,424
Carrying value, net	$	7,520,105		$	6,496,977
Unfunded loan commitments (1)	$	1,258,306		$	1,399,989
Weighted-average cash coupon (2)	5.4		%	5.7		%
Weighted-average remaining fully-extended term (3)	2.8 years			2.8 years
Weighted-average expected term (4)	2.1 years			2.1 years

———————

(1)Unfunded loan commitments are funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2)For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on non-accrual or cost recovery the interest rate used in calculating weighted-average cash coupon is 0%.

(3)Assumes all extension options are exercised.

(4)Expected term represents our estimated timing of repayments as of June 30, 2021 and December 31, 2020, respectively. Excludes risk-rated 5 loans.

Property Type

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	June 30, 2021				December 31, 2020
Property Type	Carrying Value		% of Portfolio(1)		Carrying Value		% of Portfolio(1)
Office	$	1,969,597	26.1	%	$	1,911,145	29.2	%
Hotel	1,520,275		20.1		1,576,369		24.1
Residential-for-sale	835,187		11.0		982,838		15.0
Urban Retail	820,466		10.9		655,456		10.0
Industrial	672,537		8.9		228,918		3.5
Mixed Use	238,702		3.2		217,160		3.3
Healthcare	367,120		4.9		369,676		5.7
Urban Predevelopment	52,520		0.7		298,909		4.6
Other	1,081,900		14.2		294,608		4.6
Total	$	7,558,304	100.0	%	$	6,535,079	100.0	%
General CECL Allowance (2)	(38,199)				(38,102)
Carrying value, net	$	7,520,105			$	6,496,977

———————

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

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(2)$2.4 million and $3.4 million of the General CECL Allowance for 2021 and 2020, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Geography

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	June 30, 2021				December 31, 2020
Geographic Location	Carrying Value		% of Portfolio(1)		Carrying Value		% of Portfolio(1)
New York City	$	2,355,270	31.2	%	$	2,370,337	36.3	%
United Kingdom	1,637,480		21.7		1,263,264		19.3
Midwest	737,492		9.8		552,537		8.5
Southeast	655,490		8.7		581,301		8.9
West	552,475		7.3		749,985		11.5
Northeast	138,952		1.8		103,567		1.6
Other	1,481,145		19.5		914,088		13.9
Total	$	7,558,304	100.0	%	$	6,535,079	100.0	%
General CECL Allowance (2)	(38,199)				(38,102)
Carrying value, net	$	7,520,105			$	6,496,977

———————

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)$2.4 million and $3.4 million of the General CECL Allowance for 2021 and 2020, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Risk Rating

We assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, loan to value ("LTV") ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. This review is performed quarterly. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, which ratings are defined as follows:

    1.    Very low risk

    2.    Low risk

    3. Moderate/average risk

    4. High risk/potential for loss: a loan that has a risk of realizing a principal loss

    5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or an impairment has been recorded

The following tables allocate the carrying value of our loan portfolio based on our internal risk ratings and date of origination at the dates indicated ($ in thousands):

June 30, 2021
						Year Originated
Risk Rating	Number of Loans	Total		% of Portfolio		2021		2020		2019		2018		2017		Prior
1	—	$	—	—	%	$	—	$	—	$	—	$	—	$	—	$	—
2	1	32,000		0.4	%	—		—		—		—		—		32,000
3	63	7,048,000		93.2	%	1,309,620		486,189		2,680,262		1,202,436		672,655		696,838
4	1	81,060		1.1	%	—		—		—		—		81,060		—
5	3	397,244		5.3	%	—		—		—		—		172,652		224,592

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Total	68	$	7,558,304	100.0	%	$	1,309,620	$	486,189	$	2,680,262	$	1,202,436	$	926,367	$	953,430
General CECL Allowance		(38,199)
Total carrying value, net		$	7,520,105
Weighted Average Risk Rating				3.1

December 31, 2020
						Year Originated
Risk Rating	Number of Loans	Total		% of Portfolio		2020		2019		2018		2017		2016		Prior
1	—	$	—	—	%	$	—	$	—	$	—	$	—	$	—	$	—
2	1	32,000		0.5	%	—		—		—		—		—		32,000
3	62	6,129,541		93.8	%	469,586		2,661,017		1,398,479		868,514		88,710		643,235
4	—	—		—	%	—		—		—		—		—		—
5	4	373,538		5.7	%	—		—		—		131,050		115,419		127,069
Total	67	$	6,535,079	100.0	%	$	469,586	$	2,661,017	$	1,398,479	$	999,564	$	204,129	$	802,304
General CECL Allowance		(38,102)
Total carrying value, net		$	6,496,977
Weighted Average Risk Rating				3.1

Current Expected Credit Losses ("CECL")

In accordance with ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which we refer to as the "CECL Standard," we record allowances for held-to-maturity debt securities that are deducted from the carrying amount of the assets to preset the net carrying value of the amounts expected to be collected on the assets. We record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing financial difficulty. For the remainder of the portfolio, we record a general allowance ("General CECL Allowance", and together with the Specific CECL Allowance, "CECL Allowances") in accordance with the CECL Standard on a collective basis by assets with similar risk characteristics. We have elected to use the weighted average remaining maturity ("WARM") method in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method.

Specific CECL Allowance

For loans where we have deemed the borrower/sponsor to be experiencing financial difficulty, we have elected to apply a practical expedient in accordance with the CECL Standard in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the underlying collateral and the carrying value of the loan (prior to the Specific CECL Allowance). When the repayment or satisfaction of a loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated cost to sell the collateral. The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. The key unobservable inputs used to determine the fair value of the underlying collateral may vary depending on the information available to us and market conditions as of the valuation date.

We regularly evaluate the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the liquidation value of the underlying collateral. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such impairment analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates,

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operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants.

The following table summarizes the loans with Specific CECL Allowances that have been recorded on our portfolio as of June 30, 2021 ($ in thousands):

Type	Property type	Location	Amortized cost prior to Specific CECL Allowance	Specific CECL Allowance(1)	Amortized cost	Interest recognition status/ as of date
Mortgage
	Multifamily Development(2)(3)	Brooklyn, NY	$182,652	$10,000	$172,652	Cost Recovery/ 3/1/2020
	Urban Predevelopment(2)(4)	Miami, FL	187,135	68,000	119,135	Cost Recovery/ 3/1/2020
	Retail Center(5)(6)	Cincinnati, OH	172,457	67,000	105,457	Cost Recovery/ 10/1/2019
Mortgage total:			$542,244	$145,000	$397,244

———————

(1)During the three and six months ended June 30, 2021 we reversed $30.0 million of previously recorded Specific CECL Allowances. This is comprised of a $20.0 million reversal as discussed below and the realization of $10.0 million that was a previously recorded Specific CECL Allowance.

(2)The fair value of this collateral was determined by assuming rent per square foot ranging from $50 to $215 and a capitalization rate ranging from 5.5% to 5.0%.

(3)During the three months ended June 30, 2021, $20.0 million of previously recorded Specific CECL Allowance was reversed primarily related to a more favorable market outlook as compared to when the Specific CECL Allowance was first recorded with respect to the loan.

(4)In October 2020, we entered into a joint venture which owns the underlying properties that secure our $180.5 million first mortgage loan. The entity in which we own an interest, and which owns the underlying properties was deemed to be a variable interest entity ("VIE") and we determined that we are not the primary beneficiary of that VIE. The related profit and loss from the joint venture was immaterial for the three and six months ended June 30, 2021.

(5)The fair value of retail collateral was determined by applying a capitalization rate of 8.3%.

(6)The entity, in which we own an interest and which owns the underlying property, was deemed to be a VIE and we determined that we are not the primary beneficiary of that VIE. As of June 30, 2021 we had recorded $67.0 million of Specific CECL Allowance. During the three and six months ended June 30, 2021, $0.4 million and $0.8 million, respectively, of interest paid was applied towards reducing the carrying value of the loan.

General CECL Allowance

In determining the General CECL Allowance using the WARM method, an annual historical loss rate, adjusted for macroeconomic estimates, is applied to the amortized cost of an asset, or pool of assets, over each subsequent period for the assets' remaining expected life. We considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment for a reasonable and supportable forecast period. The CECL Standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions as the result of COVID-19.

We derived an annual historical loss rate based on a commercial mortgage backed securities ("CMBS") database with historical losses from 1998 through the second quarter of 2021 provided by a third party, Trepp LLC. We applied various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate was further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period which we have determined to be one year. In assessing the macroeconomic environment, we consider macroeconomic factors, including unemployment rate, commercial real estate prices, and market liquidity. We compared the historical data for each metric to historical commercial real estate losses in order to determine the correlation of the data. We used projections, obtained from third-party service providers, of each factor to approximate the impact the macroeconomic outlook may have on our loss rate.

The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan(s). The subordinate loans, by virtue of being the first loss position, are required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities.

Although our secured debt obligations and senior secured term loan financing have a minimum tangible net worth maintenance covenant, the General CECL Allowance has no impact on these covenants as we are permitted to add back the General CECL Allowance for the computation of tangible net worth as defined in the respective agreements.

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The following schedule sets out our General CECL Allowance as of June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021		December 31, 2020
Commercial mortgage loans, net	$	20,191	$	17,012
Subordinate loans and other lending assets, net	18,008		21,090
Unfunded commitments(1)	2,444		3,365
Total General CECL Allowance	$	40,643	$	41,467

 ———————

(1)The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities

We have made an accounting policy election to exclude $39.4 million accrued interest receivable, included in Other Assets on our condensed consolidated balance sheet, from the amortized cost basis of the related commercial mortgage loans and subordinate loans and other lending assets in determining the General CECL Allowance as any uncollectible accrued interest receivable is written off in a timely manner. We discontinue accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. Under certain circumstances, we may apply the cost recovery method under which interest collected on a loan reduces the loan's amortized cost. The amortized cost basis for loans on cost recovery was $397.2 million and $373.5 million as of June 30, 2021 and December 31, 2020, respectively. For the three and six months ended June 30, 2021 and 2020, we received $0.4 million and $0.8 million and $0.6 million and $1.2 million, respectively, in interest that reduced amortized cost under the cost recovery method.

In November 2020, the borrower under a £309.2 million commercial mortgage loan ($422.7 million assuming conversion into U.S. Dollars ("USD")), of which we own £247.5 million ($338.4 million assuming conversion into USD), secured by an urban retail property located in London, United Kingdom, entered into administration triggering an event of default. In accordance with the loan agreement, we are entitled to collect default interest in addition to the contractual interest we had been earning. We evaluated the loan for collectability and determined that, as of June 30, 2021, no Specific CECL Allowance was warranted and have continued to accrue all interest owed to us, including default interest. As of June 30, 2021, the loan had an amortized cost basis of £256.1 million ($354.2 million assuming conversion into USD).

Accrued interest is past due 90 or more days for loans with an amortized cost basis of $751.5 million as of June 30, 2021. As of December 31, 2020, the amortized cost basis for loans with interest between 30 and 59 days past due was $19.0 million and the amortized cost basis for loans with 90 or more days past due was $711.9 million.

The following schedule illustrates the quarterly changes in CECL Allowances for the six months ended June 30, 2021 and 2020, respectively ($ in thousands):

		Specific CECL Allowance		General CECL Allowance						Total CECL Allowance		CECL Allowance as % of Amortized Cost
				Funded		Unfunded		Total				General		Total
December 31, 2020		$	175,000	$	38,102	$	3,365	$	41,467	$	216,467	0.67	%	3.23	%
Changes:
	Q1 Allowance (Reversals)	—		(1,667)		429		(1,238)		(1,238)
March 31, 2021		$	175,000	$	36,435	$	3,794	$	40,229	$	215,229	0.62	%	3.06	%
Changes:
	Q2 Allowance (Reversals)	(20,000)		1,764		(1,350)		414		(19,586)
	Write-offs	(10,000)		—		—		—		(10,000)
June 30, 2021		$	145,000	$	38,199	$	2,444	$	40,643	$	185,643	0.57	%	2.41	%

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		Specific CECL Allowance(1)		General CECL Allowance						Total CECL Allowance		CECL Allowance as % of Amortized Cost
				Funded		Unfunded		Total				General		Total
December 31, 2019		$	56,981	$	—	$	—	$	—	$	56,981	—	%	—	%
Changes:
	January 1, 2020 - Adoption of CECL Standard	—		27,779		3,088		30,867		30,867
	Q1 Allowances	150,000		30,494		2,971		33,465		183,465
March 31, 2020		$	206,981	$	58,273	$	6,059	$	64,332	$	271,313	1.08	%	4.05	%
Changes:
	Q2 Allowances (Reversals)	5,500		(13,729)		(1,940)		(15,669)		(10,169)
	Write-offs	(15,000)		—		—		—		(15,000)
June 30, 2020		$	197,481	$	44,544	$	4,119	$	48,663	$	246,144	0.81	%	3.71	%

———————

(1)As of December 31, 2019, amount represents specific loan loss provisions recorded on assets before the adoption of the CECL Standard. After the adoption of the CECL Standard on January 1, 2020, amounts represent Specific CECL Allowances.

The General CECL Allowance increased by $0.4 million during the three months ended June 30, 2021. The increase is primarily related to new loan originations, which were partially offset by the seasoning of our loan portfolio and improved macroeconomic outlook.

We recognized payment-in-kind ("PIK") interest of $13.7 million and $30.6 million for the three and six months ended June 30, 2021, respectively, and $12.4 million and $24.8 million for the three and six months ended June 30, 2020, respectively.

We recognized $0.7 million in pre-payment penalties and accelerated fees for the three and six months ended June 30, 2021. We recognized $0 and $0.2 million in pre-payment penalties and accelerated fees for the three and six months ended June 30, 2020.

Our portfolio includes two other lending assets, which are subordinate risk retention interests in securitization vehicles. The underlying mortgages related to our subordinate risk retention interests are secured by a portfolio of properties located throughout the United States. Our maximum exposure to loss from the subordinate risk retention interests is limited to the book value of such interests of $68.3 million as of June 30, 2021. These interests have a weighted average maturity of 5.3 years. We are not obligated to provide, and do not intend to provide financial support to these subordinate risk retention interests. Both interests are accounted for as held-to-maturity and recorded at carrying value on our condensed consolidated balance sheet.

Loan Sales

In the first quarter of 2020, we sold £62.2 million ($81.3 million assuming conversion into USD) in a mezzanine loan and £50.0 million ($65.3 million assuming conversion into USD) unfunded commitment of a senior mortgage secured by a mixed-use property in London, United Kingdom to a fund managed by an affiliate of the Manager, that was originated by us in December 2019. We recorded no gain or loss related to this sale.

In the second quarter of 2020, we sold interests in three construction loans, with aggregate commitments of $376.9 million (of which approximately $127.0 million was funded at the time of sale). The sales were made to entities managed by affiliates of the Manager. We recorded a loss of approximately $1.4 million in connection with these sales.

These transactions were evaluated under ASC 860, "Transfers and Servicing," and we determined that they qualify as sales and accounted for them as such.

Note 5 – Real Estate Owned and Related Debt

Real Estate Held for Sale

In 2017, we originated a subordinate loan junior to a $33.0 million third-party mortgage, secured by a hotel in Anaheim, CA. In December 2020, due to non-performance, we assumed legal title through the execution of a deed-in-lieu of foreclosure. We intended to sell the hotel and, as such, as of the date of the title assumption, we recorded the hotel property on our condensed consolidated balance sheet at its fair market value less costs to sell.

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As of March 31, 2021 there was an increase in our expected costs to sell the property, and therefore, we recorded a $0.6 million loss during the three months ended March 31, 2021, as realized losses and impairments on real estate owned in our condensed consolidated statement of operations. During the second quarter of 2021 the property was sold at our cost basis and no additional gain or loss was recorded. The $33.0 million first mortgage was repaid upon the sale of the property.

Real Estate Owned

In 2017, we originated a $20.0 million junior mezzanine loan which was subordinate to: (i) a $110.0 million mortgage loan, and (ii) a $24.5 million senior mezzanine loan, secured by a full-service luxury hotel in Washington, D.C. During the first quarter of 2020, we recorded a $10.0 million Specific CECL Allowance and placed our junior mezzanine loan on non-accrual status.

On May 24, 2021, we purchased the $24.5 million senior mezzanine loan at par and acquired legal title to the hotel through a deed-in-lieu of foreclosure. We assumed the hotel’s assets and liabilities (including the $110.0 million mortgage loan) and recorded an additional $10.0 million charge reflecting the difference between the fair value of the hotel’s net assets and the carrying amount of the loan. This $10.0 million loss on title assumption plus the previously recorded Specific CECL Allowance of $10.0 million represents the $20.0 million recorded as a realized loss on investments in our condensed consolidated statement of operations.

On May 24, 2021, in accordance with ASC 805, "Business Combinations," we allocated the fair value of the hotel’s assets and liabilities. On June 29, 2021, we repaid the $110.0 million mortgage loan against the property. Below are the hotel's assets and liabilities as of May 24 and June 30, 2021, which are designated as real estate owned on our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		May 24, 2021
Assets:
Cash	$	3,245	$	4,148
Buildings	86,871		86,871
Land	58,742		58,742
Furniture, fixtures, and equipment	8,687		8,687
Accumulated depreciation	(452)		—
Other Assets	1,579		1,555
Total Assets	$	158,672	$	160,003
Liabilities:
Debt related to real estate owned(1)	$	—	$	110,073
Accounts payable, accrued expenses and other liabilities	5,138		4,641
Total Liabilities	$	5,138	$	114,714
Net Real Estate Assets	$	153,534	$	45,289

———————

(1)$110 million first mortgage loan was repaid on June 29, 2021.

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Upon consolidation we assumed other hotel's assets and liabilities such as cash, operating receivables, accrued operating expenses, and unearned revenue, which have been recorded on our condensed consolidated balance sheet within cash, other assets, and accounts payable, accrued expenses and other liabilities.

For the three and six months ended June 30, 2021, we recorded the operating revenue, expenses and fixed asset depreciation and amortization in its condensed consolidated income statement as shown below ($ in thousands):

	Three and six months ended
	June 30, 2021
Operations related to real estate owned:
Revenue from operations	$	1,374
Operating expenses	(1,994)
Depreciation and amortization	(452)
Net loss from real estate owned	$	(1,072)

Note 6 – Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	June 30, 2021		December 31, 2020
Interest receivable	$	39,411	$	40,559
Collateral deposited under derivative agreements	29,680		28,320
Loan proceeds held by servicer	5,053		5,649
Other(1)	1,686		112
Total	$	75,830	$	74,640

———————

(1)Includes $1.6 million of other assets on the balance sheet of the real estate owned at June 30, 2021. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

Note 7 – Secured Debt Arrangements, Net

At June 30, 2021 and December 31, 2020, our borrowings included the following secured debt arrangements, maturities and weighted-average interest rates ($ in thousands):

	June 30, 2021					December 31, 2020
	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)		Maturity (2)	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)		Maturity (2)
JPMorgan (USD)	$	1,113,966	$	1,069,071	June 2024	$	1,113,156	$	984,125	June 2024
JPMorgan (GBP)	114,886		114,886		June 2024	113,548		113,548		June 2024
JPMorgan (EUR)	71,148		71,148		June 2024	73,296		73,296		June 2024
DB (USD)	700,000		413,325		March 2023	1,000,000		520,457		March 2023
Goldman (USD)	500,000		133,955		November 2023(3)	500,000		332,352		November 2023(3)
CS Facility - USD	189,219		189,219		July 2024(4)(5)	374,251		369,182		December 2023(4)(5)
HSBC Facility - EUR	169,930		169,930		July 2022	163,785		163,785		July 2021
Barclays (USD)	200,000		32,693		March 2024	200,000		35,192		March 2024
Total Secured Credit Facilities	3,059,149		2,194,227			3,538,036		2,591,937
Barclays Private Securitization	1,495,432		1,495,432		September 2023(5)	857,728		857,728		September 2023(5)
Total Secured Debt Arrangements	4,554,581		3,689,659			4,395,764		3,449,665
Less: deferred financing costs	N/A		(9,753)			N/A		(12,993)
Total Secured Debt Arrangements, net(6)(7)(8)	$	4,554,581	$	3,679,906		$	4,395,764	$	3,436,672

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———————

(1)As of June 30, 2021, British Pound Sterling ("GBP"), Euros ("EUR"), and Swedish Krona ("SEK") borrowings were converted to USD at a rate of 1.38, 1.19, and 0.12, respectively. As of December 31, 2020, GBP and EUR borrowings were converted to USD at a rate of 1.37 and 1.22, respectively.

(2)Maturity date assumes extensions at our option are exercised with consent of financing providers, where applicable.

(3)Assumes facility enters the amortization period described below.

(4)Assumes financings are extended in line with the underlying loans.

(5)Represents weighted average maturity across various financings with the counterparty. See below for additional details.

(6)Weighted-average borrowing costs as of June 30, 2021 and December 31, 2020 were USD L+2.00% / GBP L+2.03% / EUR L+1.43% / SEK L+1.50% and USD L+2.16% / GBP L+1.83% / EUR L+1.46%, respectively.

(7)Weighted average advance rates based on cost as of June 30, 2021 and December 31, 2020 were 67.2% (64.8% (USD) / 68.8% (GBP) / 67.6% (EUR) / 80.8% (SEK)) and 63.7% (62.5% (USD) / 68.7% (GBP) / 60.8% (EUR)).

(8)As of June 30, 2021 and December 31, 2020, approximately 54% and 55% of the outstanding balance under these secured borrowings were recourse to us.

Each of our existing secured debt arrangements include "credit based and other mark-to-market" features. "Credit mark-to-market" provisions in repurchase facilities are designed to keep the lenders' credit exposure generally constant as a percentage of the underlying collateral value of the assets pledged as security to them. If the credit of the underlying collateral value decreases, the amount of leverage available to us will be reduced as our assets are marked-to-market, which would reduce our liquidity. Generally, the lender under the applicable secured debt arrangement calls for and/or sets the valuation and any revaluation of the collateral assets in its sole, good faith discretion. If it is determined (subject to certain conditions) that the market value of the underlying collateral has decreased by more than a defined minimum amount, the lender may require us to provide additional collateral or may make margin calls, which may require us to repay all or a portion of the funds advanced. We closely monitor our liquidity and intend to maintain sufficient liquidity on our condensed consolidated balance sheet in order to meet any margin calls in the event of any significant decreases in asset values. As of June 30, 2021 and December 31, 2020, the weighted average haircut under our secured debt arrangements was approximately 32.8% and 36.3%, respectively. In addition, our existing secured debt arrangements are not entirely term-matched financings and may mature before our commercial real estate debt investments that represent underlying collateral to those financings. We are in frequent dialogue with the lenders under our secured debt arrangements regarding our management of their collateral assets and as we negotiate renewals and extensions of these liabilities, we may experience lower advance rates and higher pricing under the renewed or extended agreements.

JPMorgan Facility

In November 2019, through three indirect wholly-owned subsidiaries, we entered into a Sixth Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, National Association (the "JPMorgan Facility"). The JPMorgan Facility allows for $1.3 billion of maximum borrowings (with amounts borrowed in GBP and EUR converted to USD for purposes of calculating availability based on the greater of the spot rate as of the initial financing under the corresponding mortgage loan and the then-current spot rate) and matures in June 2022 and has two one-year extensions available at our option, which are subject to certain conditions. The JPMorgan Facility enables us to elect to receive advances in USD, GBP, or EUR. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $1.3 billion (including £83.1 million and €60.0 million assuming conversion into USD) of borrowings outstanding under the JPMorgan Facility secured by certain of our commercial mortgage loans.

DB Facility

In March 2020, through an indirect wholly-owned subsidiary, we entered into a Third Amended and Restated Master Repurchase Agreement with Deutsche Bank AG, Cayman Islands Branch, London Branch (the "DB Facility"). During the first quarter 2021, we amended the DB Facility to reduce the commitment from $1.0 billion to $700.0 million ($413.3 million drawn at June 30, 2021) for the sale and repurchase of eligible first mortgage loans secured by commercial or multifamily properties, located in the United States, United Kingdom and the European Union, and enables us to elect to receive advances in USD, GBP, or EUR. The DB Facility matures in March 2022, and has a one-year extension available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $413.3 million of borrowings outstanding under the DB Facility secured by certain of our commercial mortgage loans.

Goldman Facility

In November 2017, through an indirect wholly-owned subsidiary, we entered into a master repurchase and securities contract agreement with Goldman Sachs Bank USA (the "Goldman Facility"), which provides advances up to $500.0 million and matures in November 2021. In addition, the Goldman Facility contains a two-year amortization period subsequent to the November 2021 maturity, which allows for the refinancing or pay down of assets under the facility. Margin calls may occur any

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time at specified margin deficit thresholds.

As of June 30, 2021, we had $134.0 million of borrowings outstanding under the Goldman Facility secured by certain of our commercial mortgage loans.

CS Facility - USD

In July 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd (the "CS Facility — USD"), which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The "CS Facility — USD" has an "evergreen" feature such that the facility continues unless terminated at any time by Credit Suisse with six months' notice. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $189.2 million of borrowings outstanding under the CS Facility — USD secured by certain of our commercial mortgage loans.

HSBC Facility - EUR

In July 2019, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement with HSBC Bank plc, which provides for a single asset financing (the "HSBC Facility — EUR"). The HSBC Facility — EUR was extended during the first quarter 2021 and matures in July 2022. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $169.9 million (€143.3 million assuming conversion into USD) of borrowings outstanding under the HSBC Facility - EUR secured by one commercial mortgage loan.

Barclays Facility - USD

In March 2020, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement pursuant to a Master Repurchase Agreement with Barclays Bank plc (the "Barclays Facility – USD"). The Barclays Facility — USD allows for $200.0 million of maximum borrowings and initially matures in March 2023 with extensions available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $32.7 million of borrowings outstanding under the Barclays Facility - USD secured by one commercial mortgage loan.

Barclays Private Securitization

In June 2020, through a newly formed entity, we entered into a private securitization with Barclays Bank plc, of which Barclays Bank plc retained $782.0 million of senior notes (the "Barclays Private Securitization"). The Barclays Private Securitization finances the loans that were previously financed under a Global Master Repurchase Agreement with Barclays Bank plc (the "Barclays Facility - GBP/EUR"). In June 2020, we pledged an additional commercial mortgage loan with an outstanding principal balance of £26.0 million and pledged additional collateral of a financed loan of €5.3 million as of June 30, 2020. During the first quarter 2021, we pledged two additional commercial mortgage loans with outstanding principal balances of $227.4 million (£165.0 million assuming conversion into USD) and $187.4 million (kr1.6 billion assuming conversion into USD). During the three months ended June 30, 2021, we pledged an additional commercial mortgage loan with an outstanding principal balance of $281.7 million (€237.6 million assuming conversion into USD), and pledged additional collateral of a financed loan of $114.7 million (kr1.0 billion assuming conversion into USD).

The Barclays Private Securitization eliminates daily margining provisions and grants us significant discretion to modify certain terms of the underlying collateral including waiving certain loan-level covenant breaches and deferring or waiving of debt service payments for up to 18 months. The securitization includes LTV based covenants with significant headroom to previous levels included in the Barclays Facility - GBP/EUR. These deleveraging requirements are based on significant declines in the value of the collateral as determined by an annual third-party (engaged by us) appraisal process tied to the provisions of the underlying loan agreements. We believe this provides us with both cushion and predictability to avoid sudden unexpected outcomes and material repayment requirements. In addition to the pledge of the additional collateral noted above, we paid down the previous financing by €16.5 million (totaling $18.5 million in USD) and agreed to increase the financing spreads by 0.25%.

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of June 30, 2021 ($ in thousands):

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	Borrowings outstanding	Fully-Extended Maturity(1)
Total/Weighted-Average GBP	$881,976	August 2024
Total/Weighted-Average EUR	370,492	June 2022(2)
Total/Weighted-Average SEK	242,964	May 2022
Total/Weighted-Average Securitization	$1,495,432	September 2023

———————

(1)Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(2)The EUR portion of the Barclays Private Securitization has an "evergreen" feature such that the facility continues for one year and can be terminated by either party on certain dates with, depending on the date of notice, a minimum of nine to twelve months' notice.

The table below provides the assets and liabilities of the Barclays Private Securitization VIE included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Assets:
Cash	$	1,955	$	2,020
Commercial mortgage loans, net(1)	2,110,376		1,290,393
Other Assets	17,119		15,831
Total Assets	$	2,129,450	$	1,308,244
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $2.2 million and $0.7 million in 2021 and 2020, respectively)	$	1,493,222	$	857,043
Accounts payable, accrued expenses and other liabilities(2)	2,228		1,307
Total Liabilities	$	1,495,450	$	858,350

———————

(1)Net of the General CECL Allowance of $10.2 million and $4.4 million as of June 30, 2021 and December 31, 2020, respectively.

(2)Represents General CECL Allowance related to unfunded commitments on commercial mortgage loans, net of $0.4 million and $0.3 million as of June 30, 2021 and December 31, 2020, respectively.

The table below provides the net income of the Barclays Private Securitization VIE included in our condensed consolidated statement of operations ($ in thousands):

	Three months ended		Six months ended
	June 30, 2021		June 30, 2021
Net Interest Income:
Interest income from commercial mortgage loans	$	20,943	$	37,036
Interest expense	(6,396)		(10,986)
Net interest income	$	14,547	$	26,050
General and administrative expense	—		(1)
Provision for loan losses and impairments	(2,040)		(5,668)
Foreign currency gain	2,802		1,890
Net Income	$	15,309	$	22,271

As of June 30, 2021, we had $1.5 billion (£637.7 million, €312.4 million, and kr2.1 billion assuming conversion into USD) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

At June 30, 2021, our borrowings had the following remaining maturities ($ in thousands):

22

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	121,115	$	1,133,991	$	—	$	—	$	1,255,106
DB Facility	—		413,325		—		—		413,325
Goldman Facility	133,955		—		—		—		133,955
CS Facility - USD	—		40,500		148,719		—		189,219
HSBC Facility - EUR	—		169,930		—		—		169,930
Barclays Facility - USD	—		32,693		—		—		32,693
Barclays Private Securitization	613,455		550,784		331,192		—		1,495,431
Total	$	868,525	$	2,341,223	$	479,911	$	—	$	3,689,659

The table above reflects the fully extended maturity date of the facility and assumes facilities with an "evergreen" feature continue to extend through the fully-extended maturity of the underlying asset and assumes underlying loans are extended with consent of financing providers.

The table below summarizes the outstanding balances at June 30, 2021, as well as the maximum and average month-end balances for the six months ended June 30, 2021 for our borrowings under secured debt arrangements ($ in thousands).

	As of June 30, 2021				For the six months ended June 30, 2021
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,255,105	$	2,018,979	$	1,359,053	$	1,191,150
DB Facility	413,325		610,654		520,217		463,607
Goldman Facility	133,955		202,812		331,154		293,899
CS Facility - USD	189,219		271,691		369,182		266,233
HSBC Facility - EUR	169,930		214,185		174,717		165,863
Barclays Facility - USD	32,693		50,121		35,193		34,359
Barclays Private Securitization	1,495,432		2,120,617		1,495,432		1,190,667
Total	$	3,689,659	$	5,489,059

The table below summarizes the outstanding balances at December 31, 2020, as well as the maximum and average month-end balances for the year ended December 31, 2020 for our borrowings under secured debt arrangements ($ in thousands).

	As of December 31, 2020				For the year ended December 31, 2020
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,170,969	$	2,009,249	$	1,192,288	$	1,119,997
DB Facility	520,457		814,715		526,743		506,831
Goldman Facility	332,352		510,371		362,139		343,621
CS Facility - USD	369,182		524,139		378,781		348,464
CS Facility - GBP	—		—		90,111		43,094
HSBC Facility - USD	—		—		50,625		44,000
HSBC Facility - GBP	—		—		34,500		20,563
HSBC Facility - EUR	163,785		215,509		163,788		154,725
Barclays Facility - USD	35,192		49,993		35,193		29,327
Barclays Facility - GBP	—		—		666,810		260,692
Barclays Facility - EUR	—		—		180,595		70,521
Barclays Private Securitization	857,728		1,295,023		857,728		823,915
Total	$	3,449,665	$	5,418,999

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We were in compliance with the covenants under each of our secured debt arrangements at June 30, 2021 and December 31, 2020.

Note 8 – Senior Secured Term Loans, Net

In May 2019, we entered into a $500.0 million senior secured term loan (the "2026 Term Loan"), which matures in May 2026 and contains restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The 2026 Term Loan bears interest at LIBOR plus 2.75% and was issued at a price of 99.5%.

In March 2021, we entered into an additional $300.0 million in senior secured term loan with substantially the same terms as the 2026 Term Loan (the "2028 Term Loan" and, together with the 2026 Term Loan, the "Term Loans"), which matures in March 2028 and contains restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The 2028 Term Loan bears interest at LIBOR (with a floor of 0.50%) plus 3.50% and was issued at a price of 99.0%.

During the three and six months ended June 30, 2021 and 2020, we repaid $1.3 million and $2.5 million of principal related to the 2026 Term Loan, respectively. During the three and six months ended June 30, 2021, we repaid $0.8 million of principal related to the 2028 Term Loan.

The following table summarizes the terms of our Term Loans as of June 30, 2021 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	490,000	$	(1,726)	$	(6,280)	$	481,994	2.75	%	5/15/2026
2028 Term Loan	299,250		(2,857)		(3,818)		292,575		3.50	%	3/11/2028
Total	$	789,250	$	(4,583)	$	(10,098)	$	774,569

The following table summarizes the terms of our Term Loans as of December 31, 2020 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	492,500	$	(1,905)	$	(7,130)	$	483,465	2.75	%	5/15/2026

Covenants

The Term Loans include the following financial covenants: (i) our ratio of total recourse debt to tangible net worth cannot be greater than 3:1; and (ii) our ratio of total unencumbered assets to total pari-passu indebtedness must be at least 1.25:1.

We were in compliance with the covenants under the Term Loans at June 30, 2021 and December 31, 2020.

Interest Rate Swap

In connection with the 2026 Term Loan, we previously entered into an interest rate swap to fix LIBOR at 2.12% effectively fixing our all-in coupon on the senior secured term loan at 4.87%. During the year ended December 31, 2020 we terminated the interest rate swap and recognized a realized loss of $53.9 million.

Interest Rate Cap

During the second quarter of 2020, we entered into a three-year interest rate cap to cap LIBOR at 0.75%. This effectively limits the maximum all-in coupon on our 2026 Term Loan to 3.50%. In connection with the interest rate cap, we incurred up-front fees of $1.1 million for the year ended December 31, 2020, which we recorded as a deferred financing cost on our condensed consolidated balance sheet and interest expense will be recognized over the duration of the interest rate cap in our condensed consolidated statement of operations.

Note 9 – Senior Secured Notes, Net

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In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after offering expenses. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities. As of June 30, 2021, the 2029 Notes had a carrying value of $493.7 million net of deferred financing costs of $6.3 million.

Covenants

The 2029 Notes include certain covenants including a requirement that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1. As of June 30, 2021, we were in compliance with all covenants.

Note 10 – Convertible Senior Notes, Net

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022 (the "2022 Notes"), for which we received $337.5 million, after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2022 Notes had a carrying value of $341.7 million and an unamortized discount of $3.3 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023 (the "2023 Notes" and, together with the 2022 Notes, the "Convertible Notes"), for which we received $223.7 million after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2023 Notes had a carrying value of $226.1 million and an unamortized discount of $3.9 million.

The following table summarizes the terms of the Convertible Notes as of June 30, 2021 ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.15
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.29
Total	$	575,000

The following table summarizes the terms of the Convertible Notes as of December 31, 2020 ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.65
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.79
Total	$	575,000

———————

(1)Effective rate includes the effect of the adjustment for the conversion option (See footnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2)We have the option to settle any conversions in cash, shares of common stock or a combination thereof. The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Convertible Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

We may not redeem the Convertible Notes prior to maturity except in limited circumstances. The closing price of our common stock on June 30, 2021 of $15.95 was less than the per share conversion price of the Convertible Notes.

In accordance with ASC 470, "Debt," the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. GAAP requires that the initial proceeds from the sale of the Convertible Notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by us at such time. We measured the fair value of the debt components of the Convertible Notes as of their issuance date based on effective interest rates. As a result, we attributed

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approximately $15.4 million of the proceeds to the equity component of the Convertible Notes ($11.0 million to the 2022 Notes and $4.4 million to the 2023 Notes), which represents the excess proceeds received over the fair value of the liability component of the Convertible Notes at the date of issuance. The equity component of the Convertible Notes has been reflected within additional paid-in capital in our condensed consolidated balance sheet as of June 30, 2021. The resulting debt discount is being amortized over the period during which the Convertible Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the Convertible Notes will increase in subsequent reporting periods through the maturity date as the Convertible Notes accrete to their par value over the same period.

The aggregate contractual interest expense was approximately $7.2 million and $14.4 million for the three and six months ended June 30, 2021 and June 30, 2020. With respect to the amortization of the discount on the liability component of the Convertible Notes as well as the amortization of deferred financing costs, we reported additional non-cash interest expense of approximately $1.6 million and $3.1 million for the three and six months ended June 30, 2021, as compared to $1.5 million and $3.0 million for the three and six months ended June 30, 2020, respectively.

Note 11 – Derivatives

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than USD.

We have entered into a series of forward contracts to sell an amount of foreign currency (GBP, EUR and SEK) for an agreed upon amount of USD at various dates through May 2026. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments.

The following table summarizes our non-designated foreign exchange ("Fx") forwards and our interest rate cap as of June 30, 2021:

	June 30, 2021
Type of Derivatives	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx contracts - GBP	100	561,586	GBP	July 2021 - February 2026	1.69
Fx contracts - EUR	74	286,660	EUR	August 2021 - November 2025	2.22
Fx contracts - SEK	23	801,518	SEK	August 2021 - May 2026	4.06
Interest rate cap	1	500,000	USD	June 2023	1.96

The following table summarizes our non-designated Fx forwards and our interest rate cap as of December 31, 2020:

	December 31, 2020
Type of Derivatives	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx contracts - GBP	93	428,493	GBP	January 2021 - December 2024	2.04
Fx contracts - EUR	69	239,466	EUR	February 2021 - August 2024	2.61
Fx contracts - SEK	N/A	0	N/A	N/A	N/A
Interest rate cap	1	500,000	USD	June 2023	2.49

We have not designated any of our derivative instruments as hedges as defined in ASC 815, "Derivatives and Hedging" and, therefore, changes in the fair value of our derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our derivatives for the three and six months ended June 30, 2021, and 2020 ($ in thousands):

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		Amount of gain (loss) recognized in income
		Three months ended June 30,				Six months ended June 30,
	Location of Gain (Loss) Recognized in Income	2021		2020		2021		2020
Forward currency contracts	Unrealized gain (loss) on derivative instruments	$	(2,021)	$	(9,004)	$	8,481	$	53,432
Forward currency contracts	Realized gain (loss) on derivative instruments	(1,073)		6,009		(1,775)		14,064
Total		$	(3,094)	$	(2,995)	$	6,706	$	67,496

In connection with our senior secured term loan, in May 2019, we entered into an interest rate swap to fix LIBOR at 2.12% or an all-in interest rate of 4.87%. We used our interest rate swap to manage exposure to variable cash flows on our borrowings under our senior secured term loan. Our interest rate swap allowed us to receive a variable rate cash flow based on LIBOR and pay a fixed rate cash flow, mitigating the impact of this exposure. However during the second quarter of 2020, we terminated our interest rate swap due to a significant decrease in LIBOR and recognized a realized loss on the accompanying condensed consolidated statement of operations.

In June 2020, we entered into an interest rate cap for approximately $1.1 million. We use our interest rate cap to manage exposure to variable cash flows on our borrowings under our senior secured term loan by effectively limiting LIBOR from exceeding 0.75%. This effectively limits the maximum all-in coupon on our senior secured term loan to 3.50%. Unrealized gains or losses related to the interest rate swap and cap were recorded net under gain (loss) on interest rate hedging instruments in our condensed consolidated statement of operations.

		Amount of gain (loss) recognized in income
		Three months ended June 30,				Six months ended June 30,
	Location of Gain (Loss) Recognized in Income	2021		2020		2021		2020
Interest rate cap(1)	Unrealized (loss) gain on interest rate cap	$	(111)	$	738	$	246	$	738
Interest rate swap(2)	Unrealized gain on interest rate swap	—		50,018		—		14,470
Interest rate swap(2)	Realized loss on interest rate swap	—		(53,851)		—		(53,851)
Total		$	(111)	$	(3,095)	$	246	$	(38,643)

———————

(1)With a notional amount of $500 million at June 30, 2021 and 2020.

(2)With a notional amount of $0 at June 30, 2021 and 2020.

The following tables summarize the gross asset and liability amounts related to our derivatives at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021						December 31, 2020
	Gross Amount of Recognized Liability		Gross Amounts Offset in our Condensed Consolidated Balance Sheet		Net Amounts of Liability Presented in our Condensed Consolidated Balance Sheet		Gross Amount of Recognized Liabilities		Gross Amounts Offset in our Condensed Consolidated Balance Sheet		Net Amounts of Liabilities Presented in our Condensed Consolidated Balance Sheet
Forward currency contracts	$	28,472	$	(5,578)	$	22,894	$	32,172	$	(797)	$	31,375
Interest rate cap	—		(380)		(380)		—		(134)		(134)
Total derivative liabilities	$	28,472	$	(5,958)	$	22,514	$	32,172	$	(931)	$	31,241

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Note 12 – Participations Sold

Participations sold represents the subordinate interests in loans we originated and subsequently partially sold. We account for participations sold as secured borrowings on our condensed consolidated balance sheet with both assets and non-recourse liabilities because the participations do not qualify as a sale under ASC 860, "Transfers and Servicing." The income earned on the participations sold is recorded as interest income and an identical amount is recorded as interest expense on our condensed consolidated statements of operations.

In October 2020, we sold a $25.0 million interest, at par, in a mezzanine loan collateralized by a ground-up condominium development in New York City that we originated in December 2017. The participation interest sold accrued payment-in-kind interest, was accounted for as a secured borrowing on our condensed consolidated balance sheet, and was subordinate to our remaining mezzanine loan. The mezzanine loan was repaid at par in June 2021, and therefore, we de-recognized the related participating interest of $27.7 million, which included $2.7 million in payment-in-kind interest.

In December 2020, we sold a £6.7 million ($8.9 million assuming conversion into USD) interest, at par, in a first mortgage loan collateralized by an office building located in London, United Kingdom that was originated by us in December 2017. In connection with this sale, we transferred our remaining unfunded commitment of £19.1 million ($25.3 million assuming conversion into USD). The participation interest sold is subordinate to our remaining £70.7 million ($97.7 million assuming conversion into USD) first mortgage loan and is accounted for as a secured borrowing on our condensed consolidated balance sheet.

The table below details participations sold included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Participation sold on Commercial mortgage loans	$	27,662	$	9,217
Participation sold on Subordinate loans and other lending assets (1)	—		25,757
Total Participations sold	$	27,662	$	34,974

———————

(1)Includes $0 and $0.8 million of PIK interest in 2021 and 2020, respectively.

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Note 13 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	June 30, 2021		December 31, 2020
Accrued dividends payable	$	52,635	$	52,768
Accrued interest payable	14,695		13,979
Accounts payable and other liabilities(1)	12,792		4,775
General CECL Allowance on unfunded commitments(2)	2,444		3,365
Collateral deposited under derivative agreements	1,620		—
Total	$	84,186	$	74,887

  ———————

(1)Includes $5.1 million of accounts payable and other liabilities on the balance sheet of the real estate owned at June 30, 2021. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

(2)Refer to "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" for additional disclosure related to the General CECL Allowance on unfunded commitments for the six months ended June 30, 2021 and 2020, respectively.

Note 14 – Related Party Transactions

Management Agreement

In connection with our initial public offering in September 2009, we entered into a management agreement (the "Management Agreement") with the Manager, which describes the services to be provided by the Manager and its compensation for those services. The Manager is responsible for managing our day-to-day operations, subject to the direction and oversight of our board of directors.

Pursuant to the terms of the Management Agreement, the Manager is paid a base management fee equal to 1.5% per annum of our stockholders’ equity (as defined in the Management Agreement), calculated and payable (in cash) quarterly in arrears.

The current term of the Management Agreement will expire on September 29, 2021, and is automatically renewed for successive one-year terms on each anniversary thereafter. The Management Agreement may be terminated upon expiration of the one-year extension term only upon the affirmative vote of at least two-thirds of our independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to ARI or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of our independent directors. The Manager must be provided with written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Following a meeting by our independent directors in February 2021, which included a discussion of the Manager’s performance and the level of the management fees thereunder, we determined not to seek termination of the Management Agreement.

We incurred approximately $9.4 million and $18.8 million in base management fees under the Management Agreement for the three and six months ended June 30, 2021, respectively, as compared to $10.0 million and $20.2 million for the three and six months ended June 30, 2020, respectively.

In addition to the base management fee, we are also responsible for reimbursing the Manager for certain expenses paid by the Manager on our behalf or for certain services provided by the Manager to us. For the three and six months ended June 30, 2021 we paid expenses totaling $0.7 million and $1.3 million, respectively, related to reimbursements for certain expenses paid by the Manager on our behalf under the Management Agreement as compared to $0.5 million and $1.1 million for the three and six months ended June 30, 2020, respectively. Expenses incurred by the Manager and reimbursed by us are reflected in the respective condensed consolidated statement of operations expense category or our condensed consolidated balance sheet based on the nature of the item.

Included in payable to related party on our condensed consolidated balance sheet at June 30, 2021 and December 31, 2020

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are approximately $9.4 million and $9.6 million, respectively, for base management fees incurred but not yet paid under the Management Agreement.

Loans receivable

In June 2015, we originated a $20.0 million mezzanine loan secured by pledges of equity interests in the property recorded as real estate owned on our condensed consolidated balance sheet at June 30, 2021. The mezzanine loan was subordinate to (i) a $110.0 million mortgage loan, originated by a third party, and (ii) a $24.5 million senior mezzanine loan, originated by an affiliate of the Manager. On May 24, 2021, we purchased the $24.5 million senior mezzanine loan at par from the affiliate and acquired legal title to the hotel through a deed-in-lieu of foreclosure. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

In January 2020, we sold £62.2 million ($81.3 million assuming conversion into USD) in a mezzanine loan and £50.0 million ($65.3 million assuming conversion into USD) unfunded commitment of a senior mortgage secured by a mixed-use property in London, United Kingdom to a fund managed by an affiliate of the Manager, that was originated by us in December 2019. This transaction was evaluated under ASC 860, "Transfers and Servicing," and we determined that it qualifies as a sale and accounted for as such (see "Note 4 -Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net").

Term Loan

In March 2021, Apollo Global Funding, LLC, an affiliate of the Manager, served as one of the eight arrangers for the issuance of our 2028 Term Loan and received $0.2 million of arrangement fees. In addition, funds managed by an affiliate of the Manager invested in $30.0 million of the 2028 Term Loan.

Senior Secured Notes

In June 2021, Apollo Global Securities, LLC, an affiliate of the Manager, served as one of the eight initial purchasers in the issuance of our 2029 Notes and received $0.4 million of initial purchasers' discounts and commissions.

Note 15 – Share-Based Payments

On September 23, 2009, our board of directors approved the Apollo Commercial Real Estate Finance, Inc. 2009 Equity Incentive Plan ("2009 LTIP") and on April 16, 2019, our board of directors approved the Amended and Restated Apollo Commercial Real Estate Finance, Inc. 2019 Equity Incentive Plan ("2019 LTIP," and together with the 2009 LTIP, the "LTIPs"), which amended and restated the 2009 LTIP. Following the approval of the 2019 LTIP by our stockholders at our 2019 annual meeting of stockholders on June 12, 2019, no additional awards have been or will be granted under the 2009 LTIP and all outstanding awards granted under the 2009 LTIP remain in effect in accordance with the terms in the 2009 LTIP.

The 2019 LTIP provides for grants of restricted common stock, restricted stock units ("RSUs") and other equity-based awards up to an aggregate of 7,000,000 shares of our common stock. The LTIPs are administered by the compensation committee of our board of directors (the "Compensation Committee") and all grants under the LTIPs must be approved by the Compensation Committee.

We recognized stock-based compensation expense of $4.4 million and $8.7 million during the three and six months ended June 30, 2021, respectively, related to restricted stock and RSU vesting, as compared to $4.3 million and $8.5 million for the three and six months ended June 30, 2020, respectively.

The following table summarizes the grants, vesting and forfeitures of restricted common stock and RSUs during the six months ended June 30, 2021:

	Type	Restricted Stock	RSUs	Grant Date Fair Value ($ in millions)
Outstanding at December 31, 2020		82,235	2,455,853
	Granted	35,185	14,685	$	0.2
	Vested	(82,235)	—	N/A
	Forfeiture	—	(44,205)	N/A
Outstanding at June 30, 2021		35,185	2,426,333

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Below is a summary of restricted stock and RSU vesting dates as of June 30, 2021: 

Vesting Year	Restricted Stock	RSU	Total Awards
2021	—	1,136,525	1,136,525
2022	35,185	825,630	860,815
2023	—	459,282	459,282
2024	—	4,896	4,896
Total	35,185	2,426,333	2,461,518

At June 30, 2021, we had unrecognized compensation expense of approximately $0.4 million and $25.7 million related to the vesting of restricted stock awards and RSUs, respectively, noted in the table above.

RSU Deliveries

During the six months ended June 30, 2021 and 2020, we delivered 553,008 and 503,251 shares of common stock for 953,397 and 868,157 vested RSUs, respectively. We allow RSU participants to settle their tax liabilities with a reduction of their share delivery from the originally granted and vested RSUs. The amount, when agreed to by the participant, results in a cash payment to the Manager related to this tax liability and a corresponding adjustment to additional paid in capital on our condensed consolidated statement of changes in stockholders' equity. The adjustment was $4.4 million and $6.5 million for the six months ended June 30, 2021 and 2020, respectively. The adjustment is a reduction of capital related to our equity incentive plan and is presented net of increases of capital related to our equity incentive plan in our condensed consolidated statement of changes in stockholders' equity.

Note 16 – Stockholders’ Equity

Our authorized capital stock consists of 450,000,000 shares of common stock, $0.01 par value per share and 50,000,000 shares of preferred stock, $0.01 par value per share. As of June 30, 2021, 139,884,060 shares of common stock were issued and outstanding, and 6,770,393 shares of 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock ("Series B Preferred Stock") were issued and outstanding.

Dividends. The following table details our dividend activity:

	Three months ended		Six months ended
Dividends declared per share of:	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Common Stock	$0.35	$0.35	$0.70	$0.75
Series B Preferred Stock	0.50	0.50	1.00	1.00

Common Stock Repurchases. As of June 30, 2021 there was $172.2 million remaining authorized under our stock repurchase program. The following table details our common stock repurchase activity during the three and six months ended June 30, 2021 and 2020:

	Three months ended		Six months ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Shares Repurchased	—	5,495,976	—	5,795,976
Weighted Average Price	—	$7.96	—	$7.96

Note 17 – Commitments and Contingencies

Legal Proceedings. From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. On June 28, 2018, AmBase Corporation, 111 West 57th Street Manager Funding LLC and 111 West 57th Investment LLC commenced an action captioned AmBase Corporation et al v. ACREFI Mortgage Lending, LLC et al (No 653251/2018) in New York Supreme Court (the "Apollo Action"). The complaint names as defendants (i) a wholly owned subsidiary of the Company ("Subsidiary"), (ii) the Company, and (iii) certain funds managed by Apollo, who are co-lenders on a mezzanine loan against the development of a residential condominium building in Manhattan, New York. The plaintiffs

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alleged that the defendants tortiously interfered with the contractual equity put right in the plaintiffs’ joint venture agreement with the developers of the project, and that the defendants aided and abetted breaches of fiduciary duty by the developers of the project. The plaintiffs alleged the loss of a $70.0 million investment as part of total damages of $700.0 million, which included punitive damages. The defendants' motion to dismiss was granted on October 23, 2019 and the Court entered judgment dismissing the complaint in its entirety on November 8, 2019. Plaintiffs filed a timely notice of appeal on December 6, 2019 and the parties fully briefed the appeal.

In April 2021, Plaintiffs filed a motion for leave to amend the complaint in a separate action, 111 West 57th Investment LLC v. 111W57 Mezz Investor LLC (No. 655031/2017) in New York Supreme Court (the "April 2021 Action"). The April 2021 Action concerns the same condominium development project as the Apollo Action, and Plaintiffs now seek to name Apollo Global Management, Inc., the Company, and certain funds managed by Apollo as defendants. Plaintiffs then requested to withdraw the pending appeal in the Apollo Action and Apollo has consented, although the Court has not yet marked the appeal off the calendar. We believe the claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

Loan Commitments. As described in "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" at June 30, 2021, we had $1.3 billion of unfunded commitments related to our commercial mortgage and subordinate loans. The timings and amounts of fundings are uncertain as these commitments relate to loans for construction costs, capital expenditures, leasing costs, interest and carry costs, among others. As such, the timings and amounts of future fundings depend on the progress and performance of the underlying assets of our loans. Certain of our lenders are contractually obligated to fund their ratable portion of these loan commitments over time, while other lenders have some degree of discretion over future loan funding obligations. The total unfunded commitment is expected to be funded over the remaining 3.7 years weighted average tenor of these loans.

COVID-19. The COVID-19 global pandemic has brought forth uncertainty and disruption to the global economy. The magnitude and duration of the COVID-19 pandemic and its impact on our borrowers and their tenants, cash flows and future results of operations could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic, the success of actions taken to contain or treat the pandemic, and reactions by consumers, companies, governmental entities and capital markets. The prolonged duration and impact of the COVID-19 pandemic could materially disrupt our business operations and impact our financial performance.

As of June 30, 2021, we have not recorded any contingencies on our condensed consolidated balance sheet related to COVID-19. To the extent COVID-19 continues to cause dislocations in the global economy, our financial condition, results of operations, and cash flows may continue to be adversely impacted. Refer to “Note 2 - Summary of Significant Accounting Policies” for further discussion regarding COVID-19.

Note 18 – Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair value of our financial instruments not carried at fair value on our condensed consolidated balance sheet at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and cash equivalents	$	204,581	$	204,581	$	325,498	$	325,498
Commercial mortgage loans, net	6,653,197		6,508,986		5,451,084		5,361,948
Subordinate loans and other lending assets, net(1)	866,908		774,257		1,045,893		1,027,582
Secured debt arrangements, net	(3,679,906)		(3,679,906)		(3,436,672)		(3,436,672)
Senior secured term loans, net	(774,569)		(784,112)		(483,465)		(475,263)
Senior secured notes, net	(493,694)		(496,145)		—		—
2022 Notes	(341,720)		(359,904)		(340,361)		(327,381)
2023 Notes	(226,065)		(234,747)		(225,293)		(214,875)
Participations sold	(27,662)		(27,695)		(34,974)		(34,919)
Debt related to real estate owned, held for sale	—		—		(33,000)		(33,000)

———————

(1)Includes subordinate risk retention interests in securitization vehicles with an estimated fair value that approximates their carrying value.

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To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, are used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts. Estimates of fair value for cash and cash equivalents, convertible senior notes, net, secured debt arrangements net and senior secured term loan, net are measured using observable Level I inputs as defined in "Note 3 - Fair Value Disclosure." Estimates of fair value for all other financial instruments in the table above are measured using significant estimates, or unobservable Level III inputs as defined in "Note 3 - Fair Value Disclosure."

Note 19 – Net Income (Loss) per Share

ASC 260, "Earnings per share" requires the use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.

The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential shares of common stock.

The table below presents the computation of basic and diluted net income per share of common stock for the three and six months ended June 30, 2021 and 2020 ($ in thousands except per share data): 

	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020
Basic Earnings
Net income (loss)	$	67,691	$	60,201	$	126,026	$	(67,641)
Less: Preferred dividends	(3,385)		(3,385)		(6,770)		(6,770)
Net income (loss) available to common stockholders	$	64,306	$	56,816	$	119,256	$	(74,411)
Less: Dividends on participating securities	(849)		(719)		(1,697)		(1,521)
Basic Earnings	$	63,457	$	56,097	$	117,559	$	(75,932)
Diluted Earnings
Basic Earnings	$	63,457	$	56,097	$	117,559	$	(75,932)
Add: Dividends on participating securities	849		719		1,697		—
Add: Interest expense on Convertible Notes	8,261		8,678		16,506		—
Diluted Earnings	$	72,567	$	65,494	$	135,762	$	(75,932)
Number of Shares:
Basic weighted-average shares of common stock outstanding	139,884,060		151,523,513		139,845,178		152,735,852
Diluted weighted-average shares of common stock outstanding	170,832,186		182,083,702		170,812,544		152,735,852
Earnings Per Share Attributable to Common Stockholders
Basic	$	0.45	$	0.37	$	0.84	$	(0.50)
Diluted	$	0.42	$	0.36	$	0.79	$	(0.50)

The dilutive effect to earnings per share is determined using the "if-converted" method whereby interest expense on the outstanding Convertible Notes is added back to the diluted earnings per share numerator and all of the potentially dilutive shares are included in the diluted earnings per share denominator. For the three and six months ended June 30, 2021,

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28,533,271 weighted-average potentially issuable shares with respect to the Convertible Notes were included in the dilutive earnings per share denominator. For the six months ended June 30, 2020, all of the potentially issuable shares with respect to the Convertible Notes were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive while for the three months ended June 30, 2020 the same number of potentially issuable shares were included in the calculation of diluted net income per share because the effect was dilutive. Refer to "Note 10 - Convertible Senior Notes, Net" for further discussion.

For the three and six months ended June 30, 2021, 2,414,855 and 2,434,095 weighted-average unvested RSUs, respectively, were included in the dilutive earnings per share denominator. For the six months ended June 30, 2020, 2,017,080 weighted-average unvested RSUs were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive, while for the three months ended June 30, 2020, 2,026,918 weighted-average unvested RSUs were included in the calculation of diluted net income per share because the effect was dilutive.

Note 20 – Subsequent Events

Subsequent to the quarter ended June 30, 2021, the following events took place:

Investment activity: We committed capital of $441 million ($141 million of which was funded at closing) of a first mortgage loan. In addition, we funded approximately $32 million for previously closed loans.

Loan Repayments: We received approximately $297.3 million from loan repayments, including full repayments on two first mortgage loans.

Preferred Equity Exchange: On July 15, 2021, we exchanged all 6,770,393 shares outstanding of our Series B Preferred Stock for 6,770,393 shares of 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, with a liquidation preference of $25.00 per share, pursuant to an exchange agreement with the two existing shareholders.

Loan Update: We own three mezzanine loans which had an aggregate carrying value at June 30, 2021 of $423 million (inclusive of $297 million of principal and $124 million of PIK interest) and are secured by the same residential-for-sale property currently under construction in Manhattan, NY. These loans include (i) a $230 million senior mezzanine loan (“Senior Mezzanine Loan”), (ii) a $112 million junior mezzanine loan (Junior Mezzanine A Loan), and (iii) an $81 million junior mezzanine loan (“Junior Mezzanine B Loan”), Junior Mezzanine A Loan and Junior Mezzanine B Loan, collectively referred to as “Junior Mezzanine Loan”.

Subsequent to June 30, 2021, a vehicle managed by an affiliate of the Manager (the "Seller") transferred its Junior Mezzanine B Loan position to the Company and in connection with this transfer, one of the property’s subordinate capital providers paid the Seller a price representing the Seller’s original principal balance on the Junior Mezzanine B Loan position with the Seller agreeing to forego its accrued interest on the Junior Mezzanine B Loan.

In conjunction with this transaction, the Company and the subordinate capital provider have agreed to a waterfall sharing arrangement pursuant to which rather than the Company receiving interest it otherwise would have been entitled to after July 1, 2021 on the Junior Mezzanine Loan, proceeds received from the sale or refinance of the underlying collateral, after repayment to priority lenders under the waterfall, will be shared between the Company and the subordinate capital provider at an agreed upon allocation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING INFORMATION

We make forward-looking statements herein and will make forward-looking statements in future filings with the SEC, press releases or other written or oral communications within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, it intends to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the macro- and micro-economic impact of the COVID-19 pandemic; the severity and duration of the COVID-19 pandemic; actions taken by governmental authorities to contain the COVID-19 pandemic or treat its impact; the efficacy of the vaccines or other remedies and the speed of their distribution and administration; the impact of the COVID-19 pandemic on our financial condition, results of operations, liquidity and capital resources; market trends in our industry, interest rates, real estate values, the debt securities markets or the general economy; the demand for commercial real estate loans; our business and investment strategy; our operating results; actions and initiatives of the U.S. government and governments outside of the United States, changes to government policies and the execution and impact of these actions, initiatives and policies; the state of the economy generally or in specific geographic regions; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements, including secured debt arrangements and securitizations; the timing and amount of expected future fundings of unfunded commitments; the availability of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; expected leverage; general volatility of the securities markets in which we participate; changes in the value of our assets; the scope of our target assets; interest rate mismatches between our target assets and any borrowings used to fund such assets; changes in interest rates and the market value of our target assets; changes in prepayment rates on our target assets; effects of hedging instruments on our target assets; rates of default or decreased recovery rates on our target assets; the degree to which hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting, legal or regulatory issues or guidance and similar matters; our continued maintenance of our qualification as a REIT for U.S. federal income tax purposes; our continued exclusion from registration under the Investment Company Act of 1940, as amended (the "1940 Act"); the availability of opportunities to acquire commercial mortgage-related, real estate-related and other securities; the availability of qualified personnel; estimates relating to our ability to make distributions to our stockholders in the future; our present and potential future competition; and unexpected costs or unexpected liabilities, including those related to litigation.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. See "Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q and our Annual Report. These and other risks, uncertainties and factors, including those described in the annual, quarterly and current reports that we file with the SEC, could cause our actual results to differ materially from those included in any forward-looking statements we make. All forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a Maryland corporation and have elected to be taxed as a REIT for U.S. federal income tax purposes. We primarily originate, acquire, invest in and manage performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a high-growth, global alternative asset manager with assets under management of approximately $461.1 billion as of March 31, 2021.

The Manager is led by an experienced team of senior real estate professionals who have significant expertise in underwriting and structuring commercial real estate financing transactions. We benefit from Apollo’s global infrastructure and operating platform, through which we are able to source, evaluate and manage potential investments in our target assets.

Current Market Conditions

During the first quarter of 2020, there was a global outbreak of COVID-19, which was declared by the World Health

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Organization as a pandemic. In response to COVID-19, the United States and numerous other countries declared national emergencies, which has led to large scale quarantines as well as restrictions to business deemed non-essential. These responses to COVID-19 have disrupted economic activities and could have a significant continued adverse effect on economic and market conditions, and could result in a recession. As we are still in the midst of the COVID-19 pandemic we are not in a position to estimate the ultimate impact this will have on our business and the economy as a whole. The effects of COVID-19 have adversely impacted the value of our assets, business, financial condition, results of operations and cash flows, and our ability to operate successfully. Some of the factors that impacted us to date and may continue to affect us are outlined in "Item 1A. Risk Factors" of our Annual Report on Form 10-K. Please see "Liquidity and Capital Resources" below for additional discussion surrounding the ongoing impact we expect COVID-19 will have on our liquidity and capital resources.

Critical Accounting Policies

A summary of our critical accounting policies is set forth in our Annual Report under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Use of Estimates." See below for new critical accounting policies adopted since our Annual Report.

Real Estate Owned (and related debt)

Acquisition of real estate is accounted for using the acquisition method under Accounting Standards Codification ("ASC") Topic 805, "Business Combinations." We recognize and measure identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree, if applicable, based on their relative fair values. If applicable, we recognize and measure intangible assets and expense acquisition-related costs in the periods in which the costs are incurred and the services are received.

Real estate assets are evaluated for impairment on a quarterly basis. We consider the following factors when performing our impairment analysis: (1) Management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) our ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, we make certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon our estimate of a capitalization rate and discount rate.

Results of Operations

All non-USD denominated assets and liabilities are translated to USD at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the prevailing exchange rate on the dates that they were recorded.

Loan Portfolio Overview

The following table sets forth certain information regarding our commercial real estate debt portfolio as of June 30, 2021 ($ in thousands):

Description	Amortized Cost		Weighted-Average Coupon (1)		Weighted Average All-in Yield (1)(2)		Secured Debt Arrangements (3)		Cost of Funds		Equity at cost(4)
Commercial mortgage loans, net	$	6,653,197	4.5	%	5.0	%	$	3,689,659	2.0	%	$	2,963,538
Subordinate loans and other lending assets, net	866,908		11.9	%	8.8	%	—		—		866,908
Total/Weighted-Average	$	7,520,105	5.4	%	5.5	%	$	3,689,659	2.0	%	$	3,830,446

———————    

(1)    Weighted-Average Coupon and Weighted-Average All-in Yield are based on the applicable benchmark rates as of June 30, 2021 on the floating rate loans.

(2)     Weighted-Average All-in Yield includes the amortization of deferred origination fees, loan origination costs and accrual of both extension and exit fees. Weighted-Average All-in Yield excludes the benefit of forward points on currency hedges relating to loans denominated in currencies other than USD.

(3)    Gross of deferred financing costs of $9.8 million.

(4)    Represents loan portfolio at amortized cost less secured debt outstanding.

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The following table provides details of our commercial mortgage loan portfolio and subordinate loan and other lending assets portfolio, on a loan-by-loan basis, as of June 30, 2021 ($ in millions):

Commercial Mortgage Loan Portfolio
#	Property Type	Risk Rating	Origination Date	Amortized Cost	Unfunded Commitment	Construction Loan	3rd Party Subordinate Debt	Fully-extended Maturity	Location
1	Office	3	02/2020	$232	$—			02/2025	London, UK
2	Office	3	06/2019	214	22			11/2026	Berlin, Germany
3	Office	3	01/2020	204	84		Y	02/2025	Long Island City, NY
4	Office	3	10/2018	198	2			01/2022	Manhattan, NY
5	Office	3	09/2019	193	—			09/2023	London, UK
6	Office	3	10/2018	150	36	Y		10/2023	Manhattan, NY
7	Office	3	11/2017	141	—			01/2023	Chicago, IL
8	Office(1)	3	12/2017	126	—		Y	07/2022	London, UK
9	Office	3	04/2019	126	33	Y		09/2025	Culver City, CA
10	Office	3	03/2018	86	—		Y	04/2023	Chicago, IL
11	Office	3	12/2019	38	2			12/2022	Edinburgh, Scotland
12	Hotel	3	10/2019	270	44		Y	08/2024	Various, Spain
13	Hotel	3	04/2018	152	—			04/2023	Honolulu, HI
14	Hotel	3	09/2015	145	—			06/2024	Manhattan, NY
15	Hotel	3	08/2019	141	—			08/2024	Puglia, Italy
16	Hotel	3	05/2018	115	—			06/2024	Miami, FL
17	Hotel	3	03/2017	105	—			03/2022	Atlanta, GA
18	Hotel	3	11/2018	100	—			12/2023	Vail, CO
19	Hotel	3	12/2017	82	—			12/2023	Manhattan, NY
20	Hotel	3	08/2019	67	—		Y	09/2022	Manhattan, NY
21	Hotel	3	09/2019	61	—			10/2024	Miami, FL
22	Hotel	3	12/2019	60	—			01/2025	Tucson, AZ
23	Hotel	3	05/2021	59	2			06/2026	Fort Lauderdale, FL
24	Hotel	3	05/2019	52	—			06/2024	Chicago, IL
25	Hotel	3	12/2015	43	—			08/2024	St. Thomas, USVI
26	Hotel	3	02/2018	24	3			11/2024	Pittsburgh, PA
27	Urban Retail	3	12/2019	354	—			12/2023	London, UK
28	Urban Retail	3	08/2019	318	—		Y	09/2024	Manhattan, NY
29	Urban Retail(2)	5	01/2016	119	—			09/2021	Miami, FL
30	Retail center(2)	5	11/2014	105	—			09/2021	Cincinnati, OH
31	Industrial	3	03/2021	301	—			05/2026	Various, Sweden
32	Industrial	3	01/2019	197	7			02/2024	Brooklyn, NY
33	Industrial	3	06/2021	88	—			08/2022	Various, UK
34	Residential-for-sale: inventory	3	12/2019	94	3		Y	01/2023	Boston, MA
35	Residential-for-sale: construction	3	12/2018	90	13	Y		01/2024	Hallandale Beach, FL
36	Residential-for-sale: construction	3	12/2018	81	98	Y	Y	12/2023	Manhattan, NY
37	Residential-for-sale: construction	3	10/2015	66	—	Y	Y	08/2021	Manhattan, NY
38	Residential-for-sale: inventory	3	01/2018	59	4		Y	01/2023	Manhattan, NY
39	Residential-for-sale: inventory	3	05/2018	16	—		Y	12/2021	Manhattan, NY
40	Residential-for-sale: inventory	3	06/2018	7	—		Y	12/2021	Manhattan, NY
41	Multifamily	3	05/2021	82	—			05/2026	Cleveland, OH
42	Multifamily	3	04/2014	62	—			07/2023	Various
43	Multifamily	3	11/2014	54	—			11/2021	Various
44	Multifamily	3	02/2020	50	1			03/2024	Cleveland, OH
45	Portfolio(3)	3	06/2021	278	28			06/2026	Various, Germany
46	Parking Garages	3	05/2021	275	5			05/2026	Various, US
47	Healthcare	3	10/2019	228	31			10/2024	Various, UK
48	Caravan Parks	3	02/2021	226	—			02/2028	Various, UK
49	Multifamily Development(2)	5	03/2017	173	—			12/2021	Brooklyn, NY

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50	Mixed Use	3	12/2019	80	1			12/2024	London, UK
51	Urban Predevelopment	3	12/2016	53	—			06/2022	Los Angeles, CA
52	Mixed Use	3	12/2019	33	824	Y	Y	06/2025	London, UK
	General CECL Allowance			(20)
	Subtotal / Weighted-Average Commercial Mortgage Loans	3.1		$6,653	$1,243			2.9 Years

Subordinate Loan and Other Lending Assets Portfolio
#	Property Type	Risk Rating	Origination Date	Amortized Cost	Unfunded Commitment	Construction Loan	3rd Party Subordinate Debt	Fully-extended Maturity	Location
1	Residential-for-sale: construction(4)	3	06/2015	$230	$—	Y	Y	12/2021	Manhattan, NY
2	Residential-for-sale: construction(4)	3	05/2020	112	—	Y	Y	12/2021	Manhattan, NY
3	Residential-for-sale: construction(4)	4	11/2017	81	—	Y	Y	12/2021	Manhattan, NY
4	Healthcare(5)	3	01/2019	71	—			01/2024	Various, US
5	Healthcare(6)	3	07/2019	51	—		Y	06/2024	Various, US
6	Healthcare(5)(6)	3	02/2019	17	—		Y	01/2034	Various, US
7	Mixed Use	3	01/2017	42	—			02/2027	Cleveland, OH
8	Mixed Use	3	02/2019	40	—	Y		12/2022	London, UK
9	Mixed Use	3	12/2018	37	15	Y		12/2023	Brooklyn, NY
10	Mixed Use	3	07/2012	7	—			08/2022	Chapel Hill, NC
11	Office	3	01/2019	100	—			12/2025	Manhattan, NY
12	Office	3	07/2013	14	—			07/2022	Manhattan, NY
13	Office	3	08/2017	7	—			09/2024	Troy, MI
14	Industrial	2	05/2013	32	—			05/2023	Various, US
15	Hotel	3	06/2015	24	—			07/2025	Phoenix, AZ
16	Hotel	3	06/2018	20	—			06/2023	Las Vegas, NV
	General CECL Allowance			(18)
	Subtotal / Weighted-Average Subordinate Loans and Other Lending Assets	3.1		$867	$15			2.0 Years
	Total / Weighted-Average Loan Portfolio	3.1		$7,520	$1,258			2.8 Years

———————

(1)Includes $27.7 million of a subordinate participation sold accounted for as secured borrowing.

(2)Amortized cost for these loans is net of the recorded Specific CECL Allowance.

(3)Includes portfolio of office, industrial, retail, and other property types

(4)Loans are secured by the same property.

(5)Loan and Single Asset, Single Borrower CMBS are secured by the same properties.

(6)Single Asset, Single Borrower CMBS.

On June 30, 2021, the risk rating on a $81 million subordinate loan secured by a residential-for-sale construction loan in New York, NY (subordinate loan #3 in the table above) was changed from a "3" to a "4" due to ongoing construction delays at the project. Subsequent to quarter end, subordinate loans #2 and #3 were modified. Refer to "Note 20 - Subsequent Events" for further detail.

Our average asset and debt balances for the six months ended June 30, 2021 were ($ in thousands):

	Average month-end balances for the six months ended June 30, 2021
Description	Assets		Related debt
Commercial mortgage loans, net	$	6,145,172	$	3,605,778
Subordinate loans and other lending assets, net	1,035,668		—

Portfolio Management

Due to the impact of COVID-19, some of our borrowers have experienced consequences which are preventing the execution of their business plans and in some cases, causing temporary closures. As a result, we have worked with borrowers to

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execute loan modifications which are typically coupled with additional equity contributions from borrowers. Loan modifications to date have included repurposing of reserves, temporary deferrals of interest or principal, and partial deferral of coupon interest as payment-in-kind interest.     

Investment Activity

During the six months ended June 30, 2021, we committed $1.4 billion of capital to loans ($1.3 billion was funded at closing). In addition, during the six months ended June 30, 2021, we received $573.6 million in repayments and funded $240.0 million for loans closed prior to 2021.

Net Income (Loss) Available to Common Stockholders

For the three months ended June 30, 2021 and 2020, our net income available to common stockholders was $64.3 million, or $0.42 per diluted share of common stock, and $56.8 million, or $0.36 per diluted share of common stock, respectively. For the six months ended June 30, 2021 and 2020, our net income (loss) available to common stockholders was $119.3 million, or $0.79 per diluted share of common stock, and $(74.4) million, or $(0.50) per diluted share of common stock, respectively.

Operating Results

In connection with our adoption of the amendment to Item 303 of Regulation S-K commencing January 1, 2021 we changed our basis of comparison to compare the current period to the previous period rather than the same period in the previous year. The reason for this change is because we believe comparing the most recent period allows us to provide a more meaningful discussion to changes in operating results given our business and target assets.

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics compared to both the same period in the previous year and the most recently reported period ($ in thousands):

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	Three Months Ended				Q2'21 vs. Q1'21		Six months ended				2021 vs. 2020
	June 30, 2021		March 31, 2021				June 30, 2021		June 30, 2020
Net interest income:
Interest income from commercial mortgage loans	$	82,447	$	75,356	$	7,091	$	157,803	$	157,496	$	307
Interest income from subordinate loans and other lending assets	31,775		31,459		316		63,234		66,634		(3,400)
Interest expense	(39,737)		(35,664)		(4,073)		(75,401)		(78,703)		3,302
Net interest income	74,485		71,151		3,334		145,636		145,427		209
Operations related to real estate owned:
Revenue from real estate owned operations	1,374		—		1,374		1,374		—		1,374
Operating expenses related to real estate owned	(1,994)		—		(1,994)		(1,994)		—		(1,994)
Depreciation and amortization on real estate owned	(452)		—		(452)		(452)		—		(452)
Net loss related to real estate owned	(1,072)		—		(1,072)		(1,072)		—		(1,072)
Operating expenses:
General and administrative expenses	(6,734)		(6,940)		206		(13,674)		(12,956)		(718)
Management fees to related party	(9,440)		(9,364)		(76)		(18,804)		(20,225)		1,421
Total operating expenses	(16,174)		(16,304)		130		(32,478)		(33,181)		703
Other income	17		92		(75)		109		1,351		(1,242)
Realized loss on investments	(20,000)		—		(20,000)		(20,000)		(16,405)		(3,595)
Realized losses and impairments on real estate owned	—		(550)		550		(550)		—		(550)
Reversal of (provision for) loan losses - Specific CECL Allowance, net	30,000		—		30,000		30,000		(140,500)		170,500
Reversal of (provision for) loan losses - General CECL Allowance, net	(414)		1,238		(1,652)		824		(17,796)		18,620
Gain (loss) on foreign currency forward contracts	(3,094)		9,800		(12,894)		6,706		67,496		(60,790)
Foreign currency translation (gain) loss	4,054		(7,449)		11,503		(3,395)		(35,390)		31,995
Gain (loss) on interest rate hedging instruments	(111)		357		(468)		246		(38,643)		38,889
Net income (loss)	$67,691		$58,335		$9,356		$126,026		$(67,641)		$193,667

Net Interest Income

Net interest income increased by $3.3 million during the three months ended June 30, 2021 compared to the three months ended March 31, 2021. This increase was primarily due to interest income on $790.2 million in originations and $221.2 million of add on fundings during the three months ended June 30, 2021 and was partially offset by $302.2 million of full repayments and $39.4 million of partial repayments during the three months ended June 30, 2021 and a $4.1 million increase in interest expense as a result of an increase in our average debt balance during the three months ended June 30, 2021.

We recognized PIK interest of $13.7 million, and $16.8 million for the three months ended June 30, 2021 and March 31, 2021, respectively.

We recognized $0.7 million pre-payment penalties and accelerated fees for the three months ended June 30, 2021 and

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none for the three months ended March 31, 2021.

Net interest income increased $0.2 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. There was no material change in net interest income between these comparable periods.

Operations Related to Real Estate Owned

In 2017, we originated a $20.0 million junior mezzanine loan which was subordinate to: (i) a $110.0 million mortgage loan, and (ii) a $24.5 million senior mezzanine loan, secured by a full-service luxury hotel in Washington, D.C. On May 24, 2021, we acquired legal title to the hotel through a deed-in-lieu of foreclosure and the criteria for held-for-sale classification in ASC Topic 360, "Property, Plant, and Equipment" were not met. The assets and liabilities related to the hotel were assumed at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges. Result of operations from the hotel are comprised of operating revenue, expenses and real estate asset depreciation.

Refer to "Note 5 - Real Estate Owned" for more information related to our impairment and realized losses on real estate owned.

Operating Expenses

General and administrative expenses

General and administrative expenses decreased by $0.2 million for the three months ended June 30, 2021 compared to the three months ended March 31, 2021. There was no material change in general and administrative expenses between these comparable periods.

General and administrative expenses increased by $0.7 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase was primarily driven by a $0.5 million increase in general and administrative expenses and a $0.2 million increase in non-cash restricted stock and RSU amortization related to shares of stock awarded under the LTIPs.

Management fees to related party

Management fee expense increased by $0.1 million during the three months ended June 30, 2021 as compared to the three months ended March 31, 2021.

Management fee expense decreased by $1.4 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The decrease is primarily attributable to a decrease in our stockholders’ equity (as defined in the Management Agreement) as a result of our common stock repurchase of 14,532,632 shares between April 2020 and December 2020.

Realized loss on investments and Reversal of (provision for) loan losses - Specific CECL Allowance, net

During the six months ended June 30, 2020, we recorded new Specific CECL Allowance on five loans and increased the Specific CECL Allowance on two loans that previously had loan loss provisions, primarily due to the impact from COVID-19. Refer to "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" for additional information related to our Specific CECL Allowance.

In 2017, we originated a $20.0 million junior mezzanine loan which was subordinate to: (i) a $110.0 million mortgage loan, and (ii) a $24.5 million senior mezzanine loan, secured by a full-service luxury hotel in Washington, D.C. During the first quarter of 2020, we recorded a $10.0 million Specific CECL Allowance and placed our junior mezzanine loan on non-accrual status.

On May 24, 2021, we purchased the $24.5 million senior mezzanine loan at par and acquired legal title to the hotel through a deed-in-lieu of foreclosure. We assumed the hotel’s assets and liabilities (including the $110.0 million mortgage loan) and recorded an additional $10.0 million charge reflecting the difference between the fair value of the hotel’s net assets and the carrying amount of the loan. This $10.0 million loss on title assumption plus the previously recorded Specific CECL Allowance of $10.0 million represents the $20.0 million recorded as a realized loss on investments in our condensed consolidated statement of operations.

Refer to "Note 5 - Real Estate Owned" for more information related to our impairment and realized losses on real estate owned.

The table below illustrates the total amounts recorded in the statement of operations during the three months ended June

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30, 2021 for realized losses on investments and the related reversals of previously recorded Specific CECL Allowances ($ in thousands):

	Property type	Location	Realized Loss on Investments	Reversal of (provision for) loan losses, net	Net increase in the Statement of Operations
	Multifamily Development	Brooklyn, NY	$—	$20,000	$20,000
	Hotel	Washington, D.C.	(20,000)	10,000	(10,000)
Sub-Total:			$(20,000)	$30,000	$10,000
	Increase in General CECL Allowance		$—	$(414)	$(414)
Total:			$(20,000)	$29,586	$9,586

Realized losses and impairment on real estate owned

During the first quarter of 2021, our real estate owned, held for sale asset was reviewed for possible impairment due to a change in expected time to sell the asset. A $0.6 million impairment loss was recorded during the three months ended March 31, 2021, which was fully realized when the property was sold during the second quarter of 2021. Refer to "Note 5 - Real Estate Owned" for more information related to our impairment and realized losses on real estate owned.

Reversal of (provision for) loan losses - General CECL Allowance, net

During the three months ended June 30, 2021, our General CECL Allowance increased by $0.4 million. The increase is primarily related to new loan originations, which were partially offset by the seasoning of our loan portfolio and improved macroeconomic outlook.

Our General CECL Allowance decreased $18.6 million for six months ended June 30, 2021 compared to the six months ended June 30, 2020. This decrease was largely due to improvement of economic conditions, specifically as it relates to the understanding and outlook of COVID-19, as well as the seasoning of our loan portfolio.

Refer to "Note 2 - Summary of Significant Accounting Policies" and "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" for additional information related to our General CECL Allowance.

Foreign currency gain (loss) and gain (loss) on derivative instruments

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than USD. When foreign currency gain and (loss) on derivative instruments are evaluated on a combined basis, the net impact for the three months ended June 30, 2021 and March 31, 2021 was $1.0 million and $2.4 million, respectively. The net impact for six months ended June 30, 2021 and June 30, 2020 was $3.3 million and $32.1 million, respectively. During the six months ended June 30, 2020 there was a significant fall in USD foreign exchange rates, caused by COVID-19, which increased our unrealized gain from hedges on our future expected interest cash flows. As hedges on our future expected interest cash flows have no offset in foreign currency gain (loss) it caused the large balance noted above.

Gain (loss) on interest rate hedges

In the second quarter of 2020, we entered into a three-year interest rate cap to cap LIBOR at 0.75%. This effectively limits the maximum all-in coupon on our 2026 Term Loan to 3.50%. During the three months ended June 30, 2021 and March 31, 2021, the interest rate cap had an unrealized gain (loss) of $(0.1) million and $0.4 million, respectively.

We previously used an interest rate swap to manage exposure to variable cash flows on portions of our borrowings under our 2026 Term Loan. The interest rate swap agreement allowed us to receive a variable rate cash flow based on LIBOR and

pay a fixed rate cash flow. During the six months ended June 30, 2020 we recognized a realized loss on the interest rate swap of $53.9 million. During the second quarter of 2020, we terminated this interest rate swap.

Dividends

The following table details our dividend activity:

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	Three months ended		Six months ended
Dividends declared per share of:	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Common Stock	$0.35	$0.35	$0.70	$0.75
Series B Preferred Stock	0.50	0.50	1.00	1.00

Subsequent Events

Refer to "Note 20 - Subsequent Events" to the accompanying condensed consolidated financial statements for disclosure regarding significant transactions that occurred subsequent to June 30, 2021.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders and other general business needs. As of June 30, 2021, we had $1.9 billion, at face value, of corporate debt and $3.7 billion of asset specific financings. We have no corporate debt maturities until August 2022. As of June 30, 2021, we had $205 million of cash on hand and $21.9 million of approved and undrawn capacity from our secured debt arrangements. In addition, we have a significant amount of unencumbered loan assets. In light of COVID-19 and its severe impact on the economy we have taken steps to increase our cash balances in order to maintain an adequate level of liquidity to meet future outflows. As the duration and severity of the COVID-19 pandemic, as well as the efficacy of the vaccines or other remedies and the speed of their distribution and administration, remain unknown, so does the impact it will have on our borrowers, lenders, and the economy as a whole. We will continue to closely monitor developments related to COVID-19 as it relates to our liquidity position and financial obligations. At this time we believe we have the ability to generate and obtain adequate amounts of cash to meet financial obligations. See "Contractual Obligations and Commitments" below for further detail.

Debt-to-Equity Ratio

The following table presents our debt-to-equity ratio:

	June 30, 2021	December 31, 2020
Debt to Equity Ratio (1)	2.3	1.8

———————

(1)Represents total debt less cash and loan proceeds held by servicer (recorded with Other Assets, see "Note 6 - Other Assets" for more information) to total stockholders' equity.

Our primary sources of liquidity are as follows:

Cash Generated from Operations

Cash from operations is generally comprised of interest income from our investments, net of any associated financing expense, principal repayments from our investments, net of associated financing repayments, proceeds from the sale of investments, and changes in working capital balances. See "Results of Operations – Loan Portfolio Overview" above for a summary of interest rates related to our investment portfolio as of June 30, 2021.

Borrowings Under Various Financing Arrangements

JPMorgan Facility

In November 2019, through three indirect wholly-owned subsidiaries, we entered into a Sixth Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, National Association. The JPMorgan Facility allows for $1.3 billion of maximum borrowings (with amounts borrowed in GBP and EUR converted to USD for purposes of calculating availability based on the greater of the spot rate as of the initial financing under the corresponding mortgage loan and the then-current spot rate) and matures in June 2022 and has two one-year extensions available at our option, which are subject to certain conditions. The JPMorgan Facility enables us to elect to receive advances in USD, GBP, or EUR. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $1.3 billion (including £83.1 million and €60.0 million assuming conversion into USD) of borrowings outstanding under the JPMorgan Facility secured by certain of our commercial mortgage loans.

DB Facility

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In March 2020, through an indirect wholly-owned subsidiary, we entered into a Third Amended and Restated Master Repurchase Agreement with Deutsche Bank AG, Cayman Islands Branch, London Branch (the "DB Facility"). During the first quarter of 2021, we amended the DB Facility to reduce the commitment from $1.0 billion to $700.0 million ($413.3 million drawn at June 30, 2021) for the sale and repurchase of eligible first mortgage loans secured by commercial or multifamily properties, located in the United States, United Kingdom and the European Union, and enables us to elect to receive advances in USD, GBP, or EUR. The DB Facility matures in March 2022, and has a one-year extension available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $413.3 million of borrowings outstanding under the DB Facility secured by certain of our commercial mortgage loans.

Goldman Facility

In November 2017, through an indirect wholly-owned subsidiary, we entered into a master repurchase and securities contract agreement with Goldman Sachs Bank USA, which provides advances up to $500.0 million and matures in November 2021. In addition, the Goldman Facility contains a two-year amortization period subsequent to the November 2021 maturity, which allows for the refinancing or pay down of assets under the facility. Margin calls may occur any time at specified margin deficit thresholds.

As of June 30, 2021, we had $134.0 million of borrowings outstanding under the Goldman Facility secured by certain of our commercial mortgage loans.

CS Facility - USD

In July 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd, which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The CS Facility — USD has an "evergreen" feature such that the facility continues unless terminated at any time by Credit Suisse with six months' notice. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $189.2 million of borrowings outstanding under the CS Facility — USD secured by certain of our commercial mortgage loans.

HSBC Facility - EUR

In July 2019, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement with HSBC Bank plc, which provides for a single asset financing. The HSBC Facility — EUR was extended during the six months ended June 30, 2021 and matures in July 2022. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $169.9 million (€143.3 million assuming conversion into USD) of borrowings outstanding under the HSBC Facility — EUR secured by one commercial mortgage loan.

Barclays Facility - USD

In March 2020, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement pursuant to a Master Repurchase Agreement with Barclays Bank plc. The Barclays Facility — USD allows for $200.0 million of maximum borrowings and initially matures in March 2023 with extensions available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $32.7 million of borrowings outstanding under the Barclays Facility — USD secured by one commercial mortgage loan.

Barclays Private Securitization

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In June 2020, through a newly formed entity, we entered into a private securitization with Barclays Bank plc, of which Barclays Bank plc retained $782.0 million of senior notes. The Barclays Private Securitization finances the loans that were previously financed under the Barclays Facility - GBP/EUR. In June 2020, we pledged an additional commercial mortgage loan with an outstanding principal balance of £26.0 million and pledged additional collateral of a financed loan of €5.3 million as of June 30, 2020. During the quarter ended March 31, 2021, we pledged two additional commercial mortgage loans with outstanding principal balances of $227.4 million (£165.0 million assuming conversion into USD) and $187.4 million (kr1.6 billion assuming conversion into USD) as of March 31, 2021. During the quarter ended June 30, 2021, we pledged an additional commercial mortgage loan with an outstanding principal balance of $281.7 million (€237.6 million assuming conversion into USD), and pledged additional collateral of a financed loan of $114.7 million (kr1.0 billion assuming conversion into USD).

The Barclays Private Securitization eliminates daily margining provisions and grants us significant discretion to modify certain terms of the underlying collateral including waiving certain loan-level covenant breaches and deferring or waiving of debt service payments for up to 18 months. The securitization includes LTV based covenants with significant headroom to previous levels included in the Barclays Facility - GBP/EUR. These deleveraging requirements are based on significant declines in the value of the collateral as determined by an annual third-party (engaged by us) appraisal process tied to the provisions of the underlying loan agreements. We believe this provides us with both cushion and predictability to avoid sudden unexpected outcomes and material repayment requirements. In addition to the pledge of the additional collateral noted above, we paid down the previous financing by €16.5 million (totaling $18.5 million in USD) and agreed to increase the financing spreads by 0.25%.

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of June 30, 2021 ($ in thousands):

	Borrowings outstanding	Fully-Extended Maturity(1)
Total/Weighted-Average GBP	$881,976	August 2024
Total/Weighted-Average SEK	242,964	May 2022
Total/Weighted-Average EUR	370,492	June 2022(2)
Total/Weighted-Average Securitization	$1,495,432	September 2023

———————

(1)Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(2)The EUR portion of the Barclays Private Securitization has an "evergreen" feature such that the facility continues for one year and can be terminated by either party on certain dates with, depending on the date of notice, a minimum of nine to twelve months' notice.

As of June 30, 2021, we had $1.5 billion (£637.7 million, €312.4 million, and kr2.1 billion assuming conversion into USD) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

Debt Covenants

The guarantees related to our secured debt arrangements contain the following financial covenants: (i) tangible net worth must be greater than $1.25 billion plus 75% of the net cash proceeds of any equity issuance after March 31, 2017 (ii) our ratio of total indebtedness to tangible net worth cannot be greater than 3.75:1; and (iii) our liquidity cannot be less than an amount equal to the greater of 5% of total recourse indebtedness or $30.0 million. Under these covenants, our General CECL Allowance is added back to our tangible net worth calculation.

We were in compliance with the covenants under each of our secured debt arrangements at June 30, 2021 and December 31, 2020.

Senior Secured Term Loan

In May 2019, we entered into the $500.0 million 2026 Term Loan. During the six months ended June 30, 2021, we repaid $3.3 million of principal related to the 2026 Term Loan. The 2026 Term Loan bears interest at LIBOR plus 2.75%, was issued at a price of 99.5%, and matures in May 2026.

In March 2021, we entered into the $300.0 million 2028 Term Loan. The 2028 Term Loan bears interest at LIBOR (with a floor of 0.50%) plus 3.50%, was issued at a price of 99.0%, and matures in March 2028.

The outstanding Term Loans principal balance as of June 30, 2021 and December 31, 2020 was $789.3 million and $492.5 million, respectively. The Term Loans contain restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The Term Loans include the following financial covenants: (i) our ratio of total recourse debt to

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tangible net worth cannot be greater than 3:1; and (ii) our ratio of total unencumbered assets to total pari-passu indebtedness must be at least 1.25:1.

Senior Secured Notes

In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after offering expenses. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities.

As of June 30, 2021, the 2029 Notes had a carrying value of $493.7 million net of deferred financing costs of $6.3 million. The 2029 notes requires that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1.

Convertible Senior Notes

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022, for which we received $337.5 million, after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2022 Notes had a carrying value of $341.7 million and an unamortized discount of $3.3 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023, for which we received $223.7 million after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2023 Notes had a carrying value of $226.1 million and an unamortized discount of $3.9 million.

Other Potential Sources of Financing

Our primary sources of cash currently consist of cash available, which was $204.6 million as of June 30, 2021, principal and interest payments we receive on our portfolio of assets, and available borrowings under our secured debt arrangements. We expect our other sources of cash to consist of cash generated from operations and prepayments of principal received on our portfolio of assets. Such prepayments are difficult to estimate in advance. Depending on market conditions, we may utilize additional borrowings as a source of cash, which may also include additional secured debt arrangements as well as other borrowings or conduct additional public and private debt and equity offerings. As of June 30, 2021 we also held $2.0 billion of unencumbered assets, consisting of $1.1 billion of senior mortgages and $0.9 billion of mezzanine loans.

We maintain policies relating to our borrowings and use of leverage. See "Leverage Policies" below. In the future, we may seek to raise further equity or debt capital or engage in other forms of borrowings in order to fund future investments or to refinance expiring indebtedness.

We generally intend to hold our target assets as long-term investments, although we may sell certain of our investments in order to manage our interest rate risk and liquidity needs, meet other operating objectives and adapt to market conditions.

To maintain our qualification as a REIT under the Internal Revenue Code, we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. These distribution requirements limit our ability to retain earnings and replenish or increase capital for operations.

Leverage Policies

We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements and senior secured term loan, we access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our Company.

At June 30, 2021, our debt-to-equity ratio was 2.3 and our portfolio was comprised of $6.7 billion of commercial mortgage loans and $0.9 billion of subordinate loans and other lending assets. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.

Investment Guidelines

Our current investment guidelines, approved by our board of directors, are comprised of the following:

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•no investment will be made that would cause us to fail to qualify as a REIT for U.S. federal income tax purposes;

•no investment will be made that would cause us to register as an investment company under the 1940 Act;

•investments will be predominantly in our target assets;

•no more than 20% of our cash equity (on a consolidated basis) will be invested in any single investment at the time of the investment; and

•until appropriate investments can be identified, the Manager may invest the proceeds of any offering in interest bearing, short-term investments, including money market accounts and/or funds, that are consistent with our intention to qualify as a REIT.

The board of directors must approve any change in or waiver to these investment guidelines.

Contractual Obligations and Commitments

Our contractual obligations including expected interest payments as of June 30, 2021 are summarized as follows ($ in thousands):

	Less than 1 year (1)		1 to 2 years(1)		2 to 3 years (1)		3 to 5 years (1)		More than 5 years (1)		Total
Secured debt arrangements(1)(2)	$	938,650	$	819,993	$	1,605,270	$	491,843	$	—	$	3,855,756
Senior Secured Notes	23,125		23,125		23,125		46,250		1,065,868		1,181,493
Senior secured term loan(2)	34,158		33,892		33,697		529,725		303,650		935,122
Convertible senior notes	28,750		359,881		234,121		—		—		622,752
Unfunded loan commitments (3)	598,269		459,990		160,291		1,627		—		1,220,178
Total	$	1,622,952	$	1,696,881	$	2,056,504	$	1,069,445	$	1,369,518	$	7,815,301

———————

(1)     Assumes underlying assets are financed through the fully extended maturity date of the secured debt arrangement.

(2)     Based on the applicable benchmark rates as of June 30, 2021 on the floating rate debt for interest payments due.

(3)     Based on fully extended maturity and our expected funding schedule, which is based upon the Manager’s estimates based upon the best information available to the Manager at the time. There is no assurance that the payments will occur in accordance with these estimates or at all, which could affect our operating results. Refer to "Note 17 – Commitments and Contingencies" for further detail regarding unfunded loan commitments.

Loan Commitments. As of June 30, 2021, we had $1.2 billion of unfunded loan commitments, comprised of $1.2 billion related to our commercial mortgage loan portfolio, and $14.6 million related to our subordinate loan portfolio.

Management Agreement. On September 23, 2009, we entered into the Management Agreement with the Manager pursuant to which the Manager is entitled to receive a management fee and the reimbursement of certain expenses. The table above does not include amounts due under the Management Agreement as those obligations do not have fixed and determinable payments. Pursuant to the Management Agreement, the Manager is entitled to a base management fee calculated and payable quarterly in arrears in an amount equal to 1.5% of our stockholders’ equity (as defined in the Management Agreement), per annum. The Manager will use the proceeds from its management fee in part to pay compensation to its officers and personnel. We do not reimburse the Manager or its affiliates for the salaries and other compensation of their personnel, except for the allocable share of the compensation of (1) our Chief Financial Officer based on the percentage of time spent on our affairs and (2) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of the Manager or its affiliates who spend all or a portion of their time managing our affairs based on the percentage of time devoted by such personnel to our affairs. We are also required to reimburse the Manager for operating expenses related to us incurred by the Manager, including expenses relating to legal, accounting, due diligence and other services. Expense reimbursements to the Manager are made in cash on a monthly basis following the end of each month. Our reimbursement obligation is not subject to any dollar limitation.

The current term of the Management Agreement will expire on September 29, 2021. Absent certain action by the independent directors of our board of directors, as described below, the Management Agreement will automatically renew on each anniversary for a one-year term. The Management Agreement may be terminated upon expiration of the one-year term only upon the affirmative vote of at least two-thirds of our independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to us or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of our independent directors. The Manager must be provided with

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written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Amounts payable under the Management Agreement are not fixed and determinable. Following a meeting by our independent directors in February 2021, which included a discussion of the Manager’s performance and the level of the management fees thereunder, we determined not to terminate the Management Agreement.

Forward Currency Contracts. We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than USD. We have entered into a series of forward contracts to sell an amount of foreign currency (GBP, SEK and EUR) for an agreed upon amount of USD at various dates through May 2026. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments. Refer to "Note 11- Derivatives" to the accompanying condensed consolidated financial statements for details regarding our forward currency contracts.

Interest Rate Cap. In June 2020, we entered into an interest rate cap for approximately $1.1 million. We use our interest rate cap to manage exposure to variable cash flows on our borrowings under our senior secured term loan by effectively limiting LIBOR from exceeding 0.75%. Refer to "Note 11- Derivatives" to the accompanying condensed consolidated financial statements for details regarding our interest rate cap.

Off-balance Sheet Arrangements

As of June 30, 2021, we have interests in two unconsolidated joint ventures, each of which owns underlying properties that secure one of our first mortgage loans, respectively. The unconsolidated joint ventures were deemed to be VIEs, of which we are not the primary beneficiary. Accordingly, the VIEs are not consolidated in our condensed consolidated financial statements as of June 30, 2021. Our maximum exposure to loss from these commercial mortgage loans is limited to their carrying value, which as of June 30, 2021 was $224.6 million.

Dividends

We intend to continue to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. We generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Any distributions we make are at the discretion of our board of directors and depend upon, among other things, our actual results of operations. These results and our ability to pay distributions are affected by various factors, including the net interest and other income from our portfolio, our operating expenses and any other expenditures. If our cash available for distribution is less than our net taxable income, we could be required to sell assets or borrow funds to make cash distributions or we may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.

As of June 30, 2021, we had 6,770,393 shares of Series B Preferred Stock outstanding, which entitles holders to receive dividends that are payable quarterly in arrears. The Series B Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: (i) from, and including, the original date of issuance of the Series B Preferred Stock to, but excluding, September 20, 2020, at an initial rate of 8.00% per annum of the $25.00 per share liquidation preference; and (ii) from, and including, September 20, 2020, at the rate per annum equal to the greater of (a) 8.00% and (b) a floating rate equal to the 3-month LIBOR rate as calculated on each applicable date of determination plus 6.46% of the $25.00 liquidation preference. Except under certain limited circumstances, the Series B Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. We may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid distribution through the date of the redemption.

Non-GAAP Financial Measures

Distributable Earnings

Beginning in the fourth quarter of 2020 to more appropriately reflect the principal purpose of the measure, "Operating Earnings" was relabeled "Distributable Earnings", a non-GAAP financial measure. The definition continues to be net income (loss) available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses)

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related to interest income, and (b) forward point gains/(losses) realized on our foreign currency hedges, (v) the non-cash amortization expense related to the reclassification of a portion of the Convertible Notes to stockholders’ equity in accordance with GAAP, and (vi) provision for loan losses. Distributable Earnings may also be adjusted to exclude certain other non-cash items, as determined by the Manager and approved by a majority of our independent directors. For the three and six months ended June 30, 2021, our Distributable Earnings were $38.8 million, or $0.27 per share, and $94.4 million, or $0.66 per share, respectively as compared to $(11.3) million, or $(0.07) per share, and $51.4 million, or $0.33 per share, respectively, for the same period in the prior year.

The weighted-average diluted shares outstanding used for Distributable Earnings per weighted-average diluted share has been adjusted from weighted-average diluted shares under GAAP to exclude shares issued from a potential conversion of the Convertible Notes. Consistent with the treatment of other unrealized adjustments to Distributable Earnings, these potentially issuable shares are excluded until a conversion occurs, which we believe is a useful presentation for investors. We believe that excluding shares issued in connection with a potential conversion of the Convertible Notes from our computation of Distributable Earnings per weighted average diluted share is useful to investors for various reasons, including the following: (i) conversion of Convertible Notes to shares requires both the holder of a note to elect to convert the Convertible Note and for us to elect to settle the conversion in the form of shares (ii) future conversion decisions by note holders will be based on our stock price in the future, which is presently not determinable; (iii) the exclusion of shares issued in connection with a potential conversion of the Convertible Notes from the computation of Distributable Earnings per weighted-average diluted share is consistent with how we treat other unrealized items in our computation of Distributable Earnings per weighted-average diluted share; and (iv) we believe that when evaluating our operating performance, investors and potential investors consider our Distributable Earnings relative to our actual distributions, which are based on shares outstanding and not shares that might be issued in the future.

For the three and six months ended June 30, 2021, 28,533,271 weighted-average potentially issuable shares with respect to the Convertible Notes were included in the dilutive earnings per share denominator. For the six months ended June 30, 2020, all of the potentially issuable shares with respect to the Convertible Notes were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive while for the three months ended June 30, 2020 the same number of potentially issuable shares were included in the calculation of diluted net income per share because the effect was dilutive. Refer to "Note 19 -Net Income (Loss) per Share" for further discussion.

The table below summarizes the reconciliation from weighted-average diluted shares under GAAP to the weighted-average diluted shares used for Distributable Earnings ($ in thousands, except Price):

	Three months ended June 30,		Six months ended June 30,
	2021	2020	2021	2020
Weighted-Averages	Shares	Shares	Shares	Shares
Diluted shares - GAAP	170,832,186	182,083,702	170,812,544	152,735,852
Potential shares issued under conversion of the Convertible Notes	(28,533,271)	(28,533,271)	(28,533,271)	—
Unvested RSUs	—	—	—	2,017,080
Diluted shares - Distributable Earnings	142,298,915	153,550,431	142,279,273	154,752,932

As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons stockholders invest in a REIT, we generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Distributable Earnings is a key factor considered by the board of directors in setting the dividend and as such we believe Distributable Earnings is useful to investors.

As discussed in “Note 11 - Derivatives” we terminated our interest rate swap, which we used to manage exposure to variable cash flows on our borrowings under our senior secured term loan, in the second quarter of 2020 and recorded a realized loss in our condensed consolidated statement of operations. We have not had an interest rate swap on our condensed consolidated balance sheet since this termination. In addition, as discussed in “Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net,” we recorded a net realized loss on the sale of seven of our commercial real estate loans, two restructurings, one payoff of a previously impaired loan, and one foreclosure.

We also believe it is useful to our investors to present Distributable Earnings prior to realized losses and impairments on real estate owned, investments and interest rate swap to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise

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our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to realized losses and impairments on real estate owned, investments and interest rate swap, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.

A significant limitation associated with Distributable Earnings as a measure of our financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, our presentation of Distributable Earnings may not be comparable to similarly-titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for our GAAP net income as a measure of our financial performance or any measure of our liquidity under GAAP. Distributable Earnings are reduced for realized losses on loans which include losses that management believes are near certain to be realized.

The table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings and Distributable Earnings prior to realized losses and impairments on real estate owned, investments and interest rate swap ($ in thousands):

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Net income (loss) available to common stockholders	$	64,306	$	56,816	$	119,256	$	(74,411)
Adjustments:
Equity-based compensation expense	4,357		4,252		8,744		8,515
Unrealized loss on interest rate swap	—		(50,018)		—		(14,470)
(Gain) Loss on foreign currency forwards	3,094		2,995		(6,706)		(67,496)
Foreign currency (gain) loss, net	(4,054)		(2,559)		3,395		35,390
Unrealized (gain) loss on interest rate cap	111		(738)		(246)		(738)
Realized gains (losses) relating to interest income on foreign currency hedges, net	(719)		1,088		(1,339)		1,344
Realized gains relating to forward points on foreign currency hedges, net	6		1,318		12		3,489
Amortization of the convertible senior notes related to equity reclassification	812		765		1,612		1,519
Depreciation and amortization on real estate owned	452		—		452		—
Provision for (reversal of) loan losses and impairments	(29,586)		(25,169)		(30,824)		158,296
Realized losses and impairments on real estate owned and investments	20,000		16,405		20,550		16,405
Realized loss on interest rate swap	—		53,851		—		53,851
Total adjustments:	(5,527)		2,190		(4,350)		196,105
Distributable Earnings prior to realized losses and impairments on real estate owned, investments, and interest rate swap	$	58,779	$	59,006	$	114,906	$	121,694
Realized losses and impairments on real estate owned and investments	$	(20,000)	$	(16,405)	$	(20,550)	$	(16,405)
Realized loss on interest rate swap	—		(53,851)		—		(53,851)
Distributable Earnings	$	38,779	$	(11,250)	$	94,356	$	51,438
Diluted Distributable Earnings per share prior to realized losses and impairments on real estate owned, investments, and interest rate swap	$	0.41	$	0.38	$	0.81	$	0.79
Diluted Distributable Earnings per share of common stock	$	0.27	$	(0.07)	$	0.66	$	0.33
Weighted-average diluted shares - Distributable Earnings	142,298,915		153,550,431		142,279,273		154,752,932

Book Value Per Share

The table below calculates our book value per share ($ in thousands, except per share data):

50

	June 30, 2021		December 31, 2020
Stockholders' Equity	$	2,294,608	$	2,270,529
Series B Preferred Stock (Liquidation Preference)	(169,260)		(169,260)
Common Stockholders' Equity	$	2,125,348	$	2,101,269
Common Stock	139,884,060		139,295,867
Book value per share	$	15.19	$	15.08

The table below shows the changes in our book value per share:

	Book value per share
Book value per share at December 31, 2020	$	15.08
General CECL Allowance	0.30
Book value per share at December 31, 2020 prior to General CECL Allowance	$	15.38
Earnings in excess of dividends	0.10
Net reversal of Specific CECL Allowance	0.07
Net unrealized gain on currency hedges	0.01
Vesting and delivery of RSUs	(0.08)
Book value per share at June 30, 2021 prior to General CECL Allowance and depreciation and amortization	$	15.48
General CECL Allowance and depreciation and amortization	(0.29)
Book value per share at June 30, 2021	$	15.19

We believe that presenting book value per share with sub-totals prior to the CECL Allowances and depreciation and amortization is useful for investors for various reasons, including, among other things, analyzing our compliance with financial covenants related to tangible net worth and debt-to-equity under our secured debt arrangements and senior secured term loan, which permit us to add the General CECL Allowance to our GAAP stockholders' equity. Given that our lenders consider book value per share prior to the General CECL Allowance as an important metric related to our debt covenants, we believe disclosing book value per share prior to the General CECL Allowance is important to investors such that they have the same visibility. We further believe that presenting book value before depreciation and amortization is useful to investors since it is a non-cash expense included in net income and is not representative of our core business and ongoing operations.

51

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We seek to manage our risks related to the credit quality of our assets, interest rates, liquidity, prepayment speeds and market value, while, at the same time, seeking to provide an opportunity to stockholders to realize attractive risk-adjusted returns through ownership of our capital stock. While risks are inherent in any business enterprise, we seek to quantify and justify risks in light of available returns and to maintain capital levels consistent with the risks we undertake.

Credit Risk

One of our strategic focuses is acquiring assets that we believe to be of high credit quality. We believe this strategy will generally keep our credit losses and financing costs low. However, we are subject to varying degrees of credit risk in connection with our other target assets. We seek to mitigate this risk by seeking to acquire high quality assets, at appropriate prices given anticipated and unanticipated losses, and by deploying a value-driven approach to underwriting and diligence, consistent with the Manager’s historical investment strategy, with a focus on current cash flows and potential risks to cash flow. The Manager seeks to enhance its due diligence and underwriting efforts by accessing the Manager’s knowledge base and industry contacts. Nevertheless, unanticipated credit losses could occur, which could adversely impact our operating results.

Interest Rate Risk

Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. We are subject to interest rate risk in connection with our target assets and our related financing obligations.

To the extent consistent with maintaining our REIT qualification, we seek to manage risk exposure to protect our portfolio of financial assets against the effects of major interest rate changes. We generally seek to manage this risk by:

•attempting to structure our financing agreements to have a range of different maturities, terms, amortizations and interest rate adjustment periods;

•using hedging instruments and interest rate swaps, when we deem appropriate; and

•to the extent available and appropriate, using securitization financing to better match the maturity of our financing with the duration of our assets.

The following table estimates the hypothetical impact on our net interest income for the twelve-month period following June 30, 2021, assuming an immediate increase or decrease of 50 basis points in the applicable interest rate benchmark by currency ($ in thousands, except per share data):

			50 basis point increase				50 basis point decrease
Currency	Net floating rate assets subject to interest rate sensitivity		Decrease to net interest income (1)(2)		Decrease to net interest income (per share) (1)(2)		Increase to net interest income (1)(2)		Increase to net interest income (per share) (1)(2)
USD	$	1,453,705	$	(7,492)	$	(0.05)	$	1,708	$	0.01
GBP	629,107		284		—		58		—
SEK	60,741		270		—		—		—
EUR	297,752		1,473		0.01		—		—
Total:	$	2,441,305	$	(5,465)	$	(0.04)	$	1,766	$	0.01

———————

(1)Any such hypothetical impact on interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising or falling interest rate environment. Further, in the event of a change in interest rates of that magnitude, we may take actions to further mitigate our exposure to such a change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in our financial structure.

(2)Certain of our floating rate loans are subject to a LIBOR floor.

Prepayment Risk

Prepayment risk is the risk that principal will be repaid at a different rate than anticipated, causing the return on an asset to be less than expected. In certain cases, we adapt to prepayment risk by stating prepayment penalties in loan agreements.

Market Risk

Commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but

52

not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes; pandemics; natural disasters and other acts of god. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans or loans, as the case may be, which could also cause us to suffer losses. Market volatility has been particularly heightened due to the COVID-19 global pandemic. COVID-19 has disrupted economic activities and could have a continued significant adverse effect on economic and market conditions including limited lending from financial institutions, depressed asset values, and limited market liquidity.

Inflation

Virtually all of our assets and liabilities are interest rate sensitive in nature. As a result, interest rates and other factors influence our performance far more so than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. Our financial statements are prepared in accordance with GAAP and distributions are determined by our board of directors consistent with our obligation to distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains and determined without regard to the dividends paid deduction, on an annual basis in order to maintain our REIT qualification. In each case, our activities and balance sheet are measured with reference to historical cost and/or fair market value without considering inflation.

Currency Risk

Some of our loans and secured debt arrangements are denominated in a foreign currency and subject to risks related to fluctuations in currency rates. We seek to mitigate this exposure through foreign currency forward contracts, which match the net principal and interest of our foreign currency loans and secured debt arrangements.

53

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to ARI that would potentially be subject to disclosure under the Exchange Act, and the rules and regulations promulgated thereunder.

During the period ended June 30, 2021, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within ARI to disclose material information otherwise required to be set forth in our periodic reports.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. See "Note 17-Commitments and Contingencies" for further detail regarding legal proceedings.

Item 1A. Risk Factors

For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed in "Item 1A. Risk Factors" in our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

3.1	Articles of Amendment and Restatement of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533).
3.2	By-laws of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 3.3 of the Registrant’s Form S-4 (Registration No. 333-210632).
3.3	Articles Supplementary designating Apollo Commercial Real Estate Finance, Inc.'s 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock, liquidation preference $25.00 per share, par value $0.01 per share, incorporated by reference to Exhibit 3.1 of the Registrant's Form 8-K filed on July 20, 2021 (File No.: 001-34452)
4.1	Specimen Stock Certificate of Apollo Commercial Real Estate Finance, Inc., incorporated by reference to Exhibit 4.1 of the Registrant’s Form S-11, as amended (Registration No. 333-160533).

54

4.3	Indenture, dated as of March 17, 2014, between the Registrant and Wells Fargo Bank, National Association, as Trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on March 21, 2014 (File No.: 001-34452).
4.4	Second Supplemental Indenture, dated as of August 21, 2017, between the Registrant and Wells Fargo Bank, National Association, as Trustee (including the form of 4.75% Convertible Senior Note due 2022), incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-K filed on August 21, 2017 (File No.: 001-34452).
4.5	Third Supplemental Indenture, dated as of October 5, 2018 between the Registrant and Wells Fargo Bank, National Association, as Trustee (including the form of 5.375% Convertible Senior Note due 2023), incorporated by reference to Exhibit 4.2 of the Registrant's Form 8-K filed on October 5, 2018 (File No.: 001-34452).
4.6	Indenture dated as of June 29, 2021, by and among Apollo Commercial Real Estate Finance, Inc., as issuer, ACREFI Operating, LLC, ARM Operating, LLC and ACREFI Mortgage Lending, LLC, as guarantors, Wells Fargo Bank, National Association, as trustee and notes collateral agent (including the form of Apollo Commercial Real Estate Finance, Inc.’s 4.625% Senior Secured Notes due 2029), incorporated by reference to Exhibit 4.1 of the Registrant's Form 8-K filed on July 6, 2021 (File No.: 001-34452).
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002.
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* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Apollo Commercial Real Estate Finance, Inc.
July 26, 2021	By:	/s/ Stuart A. Rothstein
		Stuart A. Rothstein
		President and Chief Executive Officer
		(Principal Executive Officer)

55

July 26, 2021	By:	/s/ Jai Agarwal
		Jai Agarwal Chief Financial Officer, Treasurer, Secretary (Principal Financial Officer and Principal Accounting Officer)

56

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Stuart A. Rothstein, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 26, 2021	By:	/s/ Stuart A. Rothstein
	Name:	Stuart A. Rothstein
	Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Jai Agarwal, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 26, 2021	By:	/s/ Jai Agarwal
	Name:	Jai Agarwal
	Title:	Chief Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the President and Chief Executive Officer of Apollo Commercial Real Estate Finance, Inc. (the "Company"), hereby certifies on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the period ended June 30, 2021 (the "Form 10-Q"), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 26, 2021	By:	/s/ Stuart A. Rothstein
	Name:	Stuart A. Rothstein
	Title:	President and Chief Executive Officer

The undersigned, the Chief Financial Officer, Treasurer and Secretary of Apollo Commercial Real Estate Finance, Inc. (the "Company"), hereby certifies on the date hereof, pursuant to 18 U.S.C. 1350(a), as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the period ended June 30, 2021 (the "Form 10-Q"), filed concurrently herewith by the Company, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 26, 2021	By:	/s/ Jai Agarwal
	Name:	Jai Agarwal
	Title:	Chief Financial Officer, Treasurer and Secretary

Pursuant to the Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2021	Jul. 23, 2021
Cover [Abstract]
Document Type	10-Q
Document Annual Report	true
Document Period End Date	Jun. 30, 2021
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-34452
Entity Registrant Name	Apollo Commercial Real Estate Finance, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	27-0467113
Entity Address, Address Line One	9 West 57th Street
Entity Address, Address Line Two	43rd Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10019
City Area Code	212
Local Phone Number	515–3200
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	ARI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Small Business Entity	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		139,894,060
Amendment flag	false
Document fiscal year focus	2021
Document fiscal period focus	Q2
Entity central index key	0001467760

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands		Jun. 30, 2021	Dec. 31, 2020
Assets:
Cash and cash equivalents		$ 204,581	$ 325,498
Total carrying value, net		7,520,105	6,496,977
Real estate owned, net (net of $452 accumulated depreciation in 2021)		153,848	0
Real estate owned, held for sale, net		0	42,905
Other assets		75,830	74,640
Total Assets		7,954,364	6,940,020
Liabilities:
Convertible senior notes, net		567,785	565,654
Accounts payable, accrued expenses and other liabilities	[1]	84,186	74,887
Participations sold		27,662	34,974
Derivative liabilities, net		22,514	31,241
Payable to related party		9,440	9,598
Total Liabilities		5,659,756	4,669,491
Commitments and Contingencies (see Note 17)
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, Series B, 6,770,393 shares issued and outstanding ($169,260 liquidation preference)		68	68
Common stock, $0.01 par value, 450,000,000 shares authorized, 139,884,060 and 139,295,867 shares issued and outstanding in 2021 and 2020, respectively		1,399	1,393
Additional paid-in-capital		2,712,212	2,707,792
Accumulated deficit		(419,071)	(438,724)
Total Stockholders’ Equity		2,294,608	2,270,529
Total Liabilities and Stockholders’ Equity		7,954,364	6,940,020
Secured Debt
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $9,753 and $12,993 in 2021 and 2020, respectively)		3,679,906	3,436,672
Senior secured term loans, net (net of deferred financing costs of $10,098 and $7,130 in 2021 and 2020, respectively)		774,569	483,465
Senior Notes
Liabilities:
Senior secured term loans, net (net of deferred financing costs of $10,098 and $7,130 in 2021 and 2020, respectively)		493,694	0
Mortgages
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $9,753 and $12,993 in 2021 and 2020, respectively)		0	33,000
Commercial Mortgage Portfolio Segment
Assets:
Total carrying value, net	[2],[3]	6,653,197	5,451,084
Liabilities:
Participations sold		27,662	9,217
Subordinate Mortgage Portfolio Segment
Assets:
Total carrying value, net	[3]	866,908	1,045,893
Liabilities:
Participations sold		$ 0	$ 25,757

[1] Includes $2,444 and $3,365 of General CECL Allowance related to unfunded commitments on commercial mortgage loans, subordinate loans and other lending assets, net in 2021 and 2020, respectively.

[2] Includes $5,489,059 and $5,418,999 pledged as collateral under secured debt arrangements in 2021 and 2020, respectively

[3] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Real estate owned, accumulated depreciation	$ 452
Deferred financing costs	$ 10,098
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	6,770,393	6,770,393
Preferred stock, shares outstanding	6,770,393	6,770,393
Preferred stock, liquidation preference	$ 169,260	$ 169,260
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	139,884,060	139,295,867
Common stock, shares outstanding	139,884,060	139,295,867
CECL allowance	$ 183,199	$ 213,102
Financing receivable, allowance for credit loss	145,000	175,000
Loan specific reserves	38,199	38,102
General CECL Allowance on unfunded commitments	2,444	3,365
Commercial Mortgage Portfolio Segment
Loans pledged as collateral	5,489,059	5,418,999
Secured Debt
Deferred financing costs	9,753	12,993
Deferred financing costs	10,098	7,130
Senior Notes
Deferred financing costs	$ 6,306	$ 0

XML

Condensed Consolidated Statement of Operations (Unaudited) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Net interest income:
Interest income from commercial mortgage loans		$ 82,447	$ 75,641	$ 157,803	$ 157,496
Interest income from subordinate loans and other lending assets		31,775	32,616	63,234	66,634
Interest expense		(39,737)	(37,498)	(75,401)	(78,703)
Net interest income		74,485	70,759	145,636	145,427
Revenue from real estate owned operations		1,374	0	1,374	0
Total net revenue		75,859	70,759	147,010	145,427
Operating expenses:
General and administrative expenses (includes equity-based compensation of $4,357 and $8,744 in 2021 and $4,252 and $8,515 in 2020, respectively)		(6,734)	(6,425)	(13,674)	(12,956)
Management fees to related party		(9,440)	(9,957)	(18,804)	(20,225)
Operating expenses related to real estate owned		(1,994)	0	(1,994)	0
Depreciation and amortization on real estate owned		(452)	0	(452)	0
Total operating expenses		(18,620)	(16,382)	(34,924)	(33,181)
Other income		17	591	109	1,351
Realized loss on investments		(20,000)	(16,405)	(20,000)	(16,405)
Reversal of (provision for) loan losses, net	[1]	29,586	25,169	30,824	(158,296)
Realized losses and impairments on real estate owned		0	0	(550)	0
Foreign currency translation gain (loss)		4,054	2,559	(3,395)	(35,390)
Gain (loss) on sale of derivatives		(111)	(3,095)	246	(38,643)
Net income (loss)		67,691	60,201	126,026	(67,641)
Preferred dividends		(3,385)	(3,385)	(6,770)	(6,770)
Net income (loss) available to common stockholders		$ 64,306	$ 56,816	$ 119,256	$ (74,411)
Net income (loss) per share of common stock:
Basic (in dollars per share)		$ 0.45	$ 0.37	$ 0.84	$ (0.50)
Diluted (in dollars per share)		$ 0.42	$ 0.36	$ 0.79	$ (0.50)
Basic weighted-average shares of common stock outstanding		139,884,060	151,523,513	139,845,178	152,735,852
Diluted weighted-average shares of common stock outstanding		170,832,186	182,083,702	170,812,544	152,735,852
Dividends declared on common stock (in dollars per share)		$ 0.35	$ 0.35	$ 0.70	$ 0.75
Foreign currency forward, net
Operating expenses:
Gain (loss) on sale of derivatives		$ (3,094)	$ (2,995)	$ 6,706	$ 67,496
Interest rate cap and swaps
Operating expenses:
Gain (loss) on sale of derivatives		$ (111)	$ (3,095)	$ 246	$ (38,643)

[1] Comprised of $30,000, $30,000, $9,500 and $(140,500) Specific CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively, and $(414), $824, $15,669, and $(17,796) of General CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively.

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Condensed Consolidated Statement of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
General and administrative expenses, equity-based compensation	$ 4,357	$ 4,252	$ 8,744	$ 8,515
Unrealized gain (loss) on derivatives			8,727	68,640
Specific CECL (allowance) reversal	30,000	9,500	30,000	(140,500)
General CECL (allowance) reversal	(414)	15,669	824	(17,796)
Foreign currency forward, net
Unrealized gain (loss) on derivatives	$ (2,021)	$ (9,004)	$ 8,481	$ 53,432

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Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-In-Capital	Accumulated Deficit	Adjustment due to Adoption of ASU	Adjustment due to Adoption of ASU Accumulated Deficit
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2019		6,770,393	153,537,296
Stockholders' equity, beginning balance at Dec. 31, 2019	$ 2,629,975	$ 68	$ 1,535	$ 2,825,317	$ (196,945)	$ (30,867)	$ (30,867)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting standards update	us-gaap:AccountingStandardsUpdate201613Member
Capital increase (decrease) related to Equity Incentive Plan (in shares)			503,251
Capital increase related to Equity Incentive Plan	$ (2,231)		$ 5	(2,236)
Repurchase of common stock (in shares)			(300,000)
Repurchase of common stock	(2,441)		$ (3)	(2,438)
Net income (loss)	(127,842)				(127,842)
Dividends declared on preferred stock -	(3,385)				(3,385)
Dividends declared on common stock -	(62,298)				(62,298)
Stockholders' equity, ending balance (in shares) at Mar. 31, 2020		6,770,393	153,740,547
Stockholders' equity, ending balance at Mar. 31, 2020	2,400,911	$ 68	$ 1,537	2,820,643	(421,337)
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2019		6,770,393	153,537,296
Stockholders' equity, beginning balance at Dec. 31, 2019	2,629,975	$ 68	$ 1,535	2,825,317	(196,945)	$ (30,867)	$ (30,867)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(67,641)
Stockholders' equity, ending balance (in shares) at Jun. 30, 2020		6,770,393	148,326,806
Stockholders' equity, ending balance at Jun. 30, 2020	2,365,506	$ 68	$ 1,483	2,781,111	(417,156)
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2020		6,770,393	153,740,547
Stockholders' equity, beginning balance at Mar. 31, 2020	2,400,911	$ 68	$ 1,537	2,820,643	(421,337)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital increase (decrease) related to Equity Incentive Plan (in shares)			82,235
Capital increase related to Equity Incentive Plan	4,252		$ 1	4,251
Repurchase of common stock (in shares)			(5,495,976)
Repurchase of common stock	(43,838)		$ (55)	(43,783)
Net income (loss)	60,201				60,201
Dividends declared on preferred stock -	(3,385)				(3,385)
Dividends declared on common stock -	(52,635)				(52,635)
Stockholders' equity, ending balance (in shares) at Jun. 30, 2020		6,770,393	148,326,806
Stockholders' equity, ending balance at Jun. 30, 2020	2,365,506	$ 68	$ 1,483	2,781,111	(417,156)
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2020		6,770,393	139,295,867
Stockholders' equity, beginning balance at Dec. 31, 2020	2,270,529	$ 68	$ 1,393	2,707,792	(438,724)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital increase (decrease) related to Equity Incentive Plan (in shares)			553,008
Capital increase related to Equity Incentive Plan	108		$ 5	103
Offering costs	(40)			(40)
Net income (loss)	58,335				58,335
Dividends declared on preferred stock -	(3,385)				(3,385)
Dividends declared on common stock -	(49,794)				(49,794)
Stockholders' equity, ending balance (in shares) at Mar. 31, 2021		6,770,393	139,848,875
Stockholders' equity, ending balance at Mar. 31, 2021	2,275,753	$ 68	$ 1,398	2,707,855	(433,568)
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2020		6,770,393	139,295,867
Stockholders' equity, beginning balance at Dec. 31, 2020	2,270,529	$ 68	$ 1,393	2,707,792	(438,724)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	126,026
Stockholders' equity, ending balance (in shares) at Jun. 30, 2021		6,770,393	139,884,060
Stockholders' equity, ending balance at Jun. 30, 2021	2,294,608	$ 68	$ 1,399	2,712,212	(419,071)
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2021		6,770,393	139,848,875
Stockholders' equity, beginning balance at Mar. 31, 2021	2,275,753	$ 68	$ 1,398	2,707,855	(433,568)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital increase (decrease) related to Equity Incentive Plan (in shares)			35,185
Capital increase related to Equity Incentive Plan	4,358		$ 1	4,357
Net income (loss)	67,691				67,691
Dividends declared on preferred stock -	(3,385)				(3,385)
Dividends declared on common stock -	(49,809)				(49,809)
Stockholders' equity, ending balance (in shares) at Jun. 30, 2021		6,770,393	139,884,060
Stockholders' equity, ending balance at Jun. 30, 2021	$ 2,294,608	$ 68	$ 1,399	$ 2,712,212	$ (419,071)

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Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Stockholders' Equity [Abstract]
Dividends declared on preferred stock (in dollars per share)	$ 0.50	$ 0.50	$ 0.50	$ 0.50
Dividends declared on common stock (in dollars per share)	$ 0.35	$ 0.35	$ 0.35	$ 0.40	$ 0.70	$ 0.75

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Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2021	Jun. 30, 2020
Cash flows provided by operating activities:
Net income (loss)		$ 126,026	$ (67,641)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of discount/premium and PIK		(42,991)	(36,449)
Amortization of deferred financing costs		6,344	6,577
Equity-based compensation		8,744	8,515
Provision for (reversal of) loan losses, net	[1]	(30,824)	158,296
Foreign currency loss		2,743	48,404
Unrealized gain on derivative instruments		(8,727)	(68,640)
Depreciation and amortization		452	0
Realized losses and impairments on investments and real estate owned		20,550	16,405
Changes in operating assets and liabilities:
Proceeds received from PIK		34,986	0
Other assets		875	(9,615)
Accounts payable, accrued expenses and other liabilities		2,923	(1,921)
Payable to related party		(158)	(472)
Net cash provided by operating activities		120,943	53,459
Cash flows used in investing activities:
New funding of commercial mortgage loans		(1,322,016)	(447,440)
Add-on funding of commercial mortgage loans		(138,489)	(197,261)
Add-on funding of subordinate loans and other lending assets		(107,716)	(25,766)
Proceeds received from the repayment and sale of commercial mortgage loans		295,914	397,994
Proceeds received from the repayment of subordinate loans and other lending assets		195,551	1,885
Origination and exit fees received on commercial mortgage loans, and subordinate loans and other lending assets, net		17,061	6,110
Proceeds received from the sale of real estate owned, held for sale		42,356	0
Cash received from hotel title assumption		4,148	0
Increase in collateral held related to derivative contracts, net		260	55,550
Net cash used in investing activities		(1,012,931)	(208,928)
Cash flows from financing activities:
Payment of offering costs		(40)	0
Repurchase of common stock		0	(46,279)
Proceeds from secured debt arrangements		987,010	1,373,643
Repayments of secured debt arrangements		(744,570)	(980,280)
Repayments of senior secured term loan principal		(3,250)	(2,500)
Proceeds from issuance of senior secured term loan		297,000	0
Proceeds from issuance of senior secured notes		500,000	0
Repayment of debt related to real estate owned		(143,073)	0
Payment of deferred financing costs		(11,217)	(7,522)
Other financing activities		(4,278)	(6,494)
Dividends on common stock		(99,741)	(133,446)
Dividends on preferred stock		(6,770)	(6,770)
Net cash provided by financing activities		771,071	190,352
Net increase (decrease) in cash and cash equivalents		(120,917)	34,883
Cash and cash equivalents, beginning of period		325,498	452,282
Cash and cash equivalents, end of period		204,581	487,165
Supplemental disclosure of cash flow information:
Interest paid		63,071	71,974
Supplemental disclosure of non-cash financing activities:
Dividend declared, not yet paid		52,635	56,256
Change in participation sold		20,358	0
Repayments of PIK on participation sold		(27,670)	0
Loan proceeds held by servicer		4,853	0
Deferred financing costs, not yet paid		3,757	2,596
Transfer of proceeds borrowed under secured credit facilities to Barclays Private Securitization		0	782,006
Assumption of real estate		154,300	0
Assumption of debt related to real estate owned		(110,073)	0
Assumption of other assets related to real estate owned		1,555	0
Assumption of accounts payable and other liabilities related to real estate owned		(4,641)	0
Transfer of subordinate loans to real estate owned		$ (45,289)	$ 0

[1] Comprised of $30,000, $30,000, $9,500 and $(140,500) Specific CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively, and $(414), $824, $15,669, and $(17,796) of General CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively.

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Organization

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo").

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss allowances. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 ("Annual Report"), as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other future period.

We currently operate in one reporting segment.

Risks and Uncertainties

During the first quarter of 2020, there was a global outbreak of a novel coronavirus ("COVID-19"), which was declared by the World Health Organization as a pandemic. In response to COVID-19, the United States and numerous other countries have declared national emergencies, which has led to large scale quarantines as well as restrictions to business deemed non-essential. These responses to COVID-19 have disrupted economic activities and could have a continued significant adverse effect on economic and market conditions. As we are still in the midst of the COVID-19 pandemic we are not in a position to estimate the ultimate impact this will have on our business and the economy as a whole. We believe the estimates used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of June 30, 2021. The uncertainty surrounding COVID-19 may materially impact the accuracy of the estimates and assumptions used in the financial statements and related footnotes and, as a result, actual results may vary significantly from estimates.

Real Estate Owned (and related debt)

In order to maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or the execution of a deed in lieu of foreclosure. Foreclosed properties are generally recognized at fair value and the assets and liabilities are presented separately when legal title or physical possession is assumed. If the fair value of the real estate is lower than the carrying value of the loan, the difference, along with any previously recorded Specific CECL Allowances, are recorded as a realized loss on investments in the consolidated statement of operations.

Acquisition of real estate is accounted for using the acquisition method under Accounting Standards Codification ("ASC")

Topic 805, "Business Combinations." We recognize and measure identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree, if applicable, based on their relative fair values. If applicable, we recognize and measure intangible assets and expense acquisition-related costs in the periods in which the costs are incurred and the services are received.

We evaluate real estate owned, held for sale for subsequent decrease in fair value, which is recorded as an impairment. Real estate owned is classified as held for sale in the period in which the six criteria under ASC Topic 360, "Property, Plant, and Equipment" are met: (1) we commit to a plan and have the authority to sell the asset; (2) the asset is available for sale in its current condition; (3) we have initiated an active marketing plan to locate a buyer for the asset; (4) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months; (5) the asset is being actively marketed for sale at a price that is reflective of its current fair value; and (6) we do not anticipate changes to our plan to sell the asset. Once a real estate asset is classified as held for sale, depreciation expense is no longer recorded.

Real estate assets that are acquired for investment are assumed at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges, if any. Upon acquisition, we allocate the value of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment, and intangible assets, if applicable. Real estate assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and up to 8 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred.

Real estate assets are evaluated for impairment on a quarterly basis. We consider the following factors when performing our impairment analysis: (1) Management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) our ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, we make certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon our estimate of a capitalization rate and discount rate.

Revenue Recognition

Interest income on our lending assets is accrued based on the actual coupon rate adjusted for accretion of any purchase discounts, the amortization of any purchase premiums and the accretion of any deferred fees, in accordance with GAAP. Loans that are significantly past due may be placed on non-accrual if we determine it is probable that we will not collect all payments which are contractually due. When a loan is placed on non-accrual, interest is only recorded as interest income when it's received. Under certain circumstances, we may apply cost recovery under which interest collected on a loan is a reduction to its amortized cost. The cost recovery method will no longer apply if collection of all principal and interest is reasonably assured. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due.

Operating revenue from real estate owned that is a hotel property represents revenue associated with the operations of the hotel property. Revenue from the operation of the hotel property is recognized when guestrooms are occupied or services have been rendered. Revenues are recorded net of any discounts and sales and other taxes collected from customers. Revenues consist of room sales, food and beverage sales and other hotel revenues.

Gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with ASC 610-20, "Gains and Losses from the Derecognition of Nonfinancial Assets". We primarily use specific identification method to allocate costs.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06 "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity" ("ASU 2020-06"). The intention of ASU 2020-06 is to address the complexities in accounting for certain financial instruments with a debt and equity component. Under ASU 2020-06, the number of accounting models for convertible notes will be reduced and entities that issue convertible debt will be required to use the if-converted method for the computation of diluted "Earnings per share" under ASC 260. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 and may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. We are currently assessing the impact this guidance will have on our

condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to debt instruments, derivatives, and other contracts that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This guidance is optional and may be elected through December 31, 2022 using a prospective application on all eligible contract modifications. We have loan agreements, debt agreements, and an interest rate cap that incorporate LIBOR as a referenced interest rate. It is difficult to predict what effect, if any, the phase-out of LIBOR and the use of alternative benchmarks may have on our business or on the overall financial markets. We have not adopted any of the optional expedients or exceptions through June 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions.

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Fair Value Disclosure

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Disclosure

Fair Value Disclosure

GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair value. Market-based or observable inputs are the preferred source of values, followed by valuation models using management's assumptions in the absence of market-based or observable inputs. The three levels of the hierarchy as noted in ASC 820, "Fair Value Measurements and Disclosures" are described below:

Level I — Quoted prices in active markets for identical assets or liabilities.

Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

While we anticipate that our valuation methods will be appropriate and consistent with valuation methods used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

The estimated fair values of our derivative instruments are determined using a discounted cash flow analysis on the expected cash flows of each instrument. Our derivative instruments are classified as Level II in the fair value hierarchy.

The fair values of foreign exchange forwards are determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying countries.

The fair value of our interest rate cap is determined by using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the interest rate cap. The variable interest rates used in the calculation of projected receipts on the interest rate cap are based on a third party expert's expectation of future interest rates derived from observable market interest rate curves and volatilities.

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with recurring fair value measurements were categorized as of June 30, 2021 and December 31, 2020 ($ in thousands): 

	Fair Value as of June 30, 2021								Fair Value as of December 31, 2020
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Recurring fair value measurements:
Foreign currency forward, net	$	—	$	(22,894)	$	—	$	(22,894)	$	—	$	(31,375)	$	—	$	(31,375)
Interest rate cap asset	—		380		—		380		—		134		—		134
Total financial instruments	$	—	$	(22,514)	$	—	$	(22,514)	$	—	$	(31,241)	$	—	$	(31,241)

Non-recurring Fair Value Measurements

We are required to record real estate owned, a nonfinancial asset, at fair value on a non-recurring basis in accordance with GAAP. If the real estate is classified as held for sale, the fair value of our real estate owned and the related debt is determined by using the market approach, less costs to sell. The market approach utilizes the fair value of similar assets and liabilities in the

marketplace as well as an internal analysis as to selling price of specific assets and liabilities, which we deem to be significant unobservable inputs. As such the fair value of real estate owned, held for sale and the related debt falls within Level III of the fair value hierarchy.

During the first quarter of 2021, there was an increase in our expected costs to sell our real estate owned, held for sale and we performed a non-recurring fair value measurement. During the second quarter of 2021, the property was sold and no additional gain or loss was recorded.

On May 24, 2021, we acquired legal title to a full-service luxury hotel through a deed-in-lieu of foreclosure, which is classified as real estate owned on our condensed consolidated balance sheet. We assumed the hotel’s assets and liabilities, including a $110.0 million mortgage loan. We performed a non-recurring fair value measurement on the assets and liabilities assumed as of the date we acquired legal title to the real estate. On June 29, 2021, we repaid the $110.0 million mortgage loan against the property.

Refer to "Note 5 - Real Estate Owned and Related Debt" for further discussion.

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with non-recurring fair value measurements were categorized as of June 30, 2021 and December 31, 2020 ($ in thousands): 

	Fair Value as of June 30, 2021								Fair Value as of December 31, 2020
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Non-Recurring fair value measurements:
Real estate owned	$	—	$	—	$	154,300	$	154,300	$	—	$	—	$	—	$	—
Real estate owned, held for sale	—		—		—		—		—		—		42,905		42,905
Debt related to real estate owned, held for sale	—		—		—		—		—		—		(33,000)		(33,000)
Net real estate owned and related debt	$	—	$	—	$	154,300	$	154,300	$	—	$	—	$	9,905	$	9,905

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net

Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net

Our loan portfolio was comprised of the following at June 30, 2021 and December 31, 2020 ($ in thousands):

Loan Type	June 30, 2021		December 31, 2020
Commercial mortgage loans, net (1)	$	6,653,197	$	5,451,084
Subordinate loans and other lending assets, net	866,908		1,045,893
Carrying value, net	$	7,520,105	$	6,496,977

  ———————

(1)Includes $146.5 million and $136.1 million in 2021 and 2020, respectively, of contiguous financing structured as subordinate loans.

Our loan portfolio consisted of 97% and 95% floating rate loans, based on amortized cost, as of June 30, 2021 and December 31, 2020, respectively.

Activity relating to our loan portfolio, for the six months ended June 30, 2021, was as follows ($ in thousands):

	Principal Balance		Deferred Fees/Other Items (1)		Specific CECL Allowance		Carrying Value, Net(2)
December 31, 2020	$	6,728,424	$	(18,345)	$	(175,000)	$	6,535,079
New loan fundings	1,322,016		—		—		1,322,016
Add-on loan fundings (3)	264,486		—		—		264,486
Loan repayments and sales	(552,651)		—		—		(552,651)
Gain (loss) on foreign currency translation	(5,027)		166		—		(4,861)
Specific CECL Allowance	—		—		30,000		30,000
Realized loss on investment	(20,000)		—		—		(20,000)

Transfer to real estate owned	(45,448)		159		—		(45,289)
Deferred fees	—		(17,061)		—		(17,061)
PIK interest and amortization of fees	34,502		12,083		—		46,585
June 30, 2021	$	7,726,302	$	(22,998)	$	(145,000)	$	7,558,304
General CECL Allowance (4)							(38,199)
Carrying value, net							$	7,520,105

———————

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

(2)December 31, 2020 carrying value excludes General CECL Allowance.

(3)Represents fundings for loans closed prior to 2021.

(4)$2.4 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	June 30, 2021			December 31, 2020
Number of loans	68			67
Principal balance	$	7,726,302		$	6,728,424
Carrying value, net	$	7,520,105		$	6,496,977
Unfunded loan commitments (1)	$	1,258,306		$	1,399,989
Weighted-average cash coupon (2)	5.4		%	5.7		%
Weighted-average remaining fully-extended term (3)	2.8 years			2.8 years
Weighted-average expected term (4)	2.1 years			2.1 years

———————

(1)Unfunded loan commitments are funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2)For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on non-accrual or cost recovery the interest rate used in calculating weighted-average cash coupon is 0%.

(3)Assumes all extension options are exercised.

(4)Expected term represents our estimated timing of repayments as of June 30, 2021 and December 31, 2020, respectively. Excludes risk-rated 5 loans.

Property Type

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	June 30, 2021				December 31, 2020
Property Type	Carrying Value		% of Portfolio(1)		Carrying Value		% of Portfolio(1)
Office	$	1,969,597	26.1	%	$	1,911,145	29.2	%
Hotel	1,520,275		20.1		1,576,369		24.1
Residential-for-sale	835,187		11.0		982,838		15.0
Urban Retail	820,466		10.9		655,456		10.0
Industrial	672,537		8.9		228,918		3.5
Mixed Use	238,702		3.2		217,160		3.3
Healthcare	367,120		4.9		369,676		5.7
Urban Predevelopment	52,520		0.7		298,909		4.6
Other	1,081,900		14.2		294,608		4.6
Total	$	7,558,304	100.0	%	$	6,535,079	100.0	%
General CECL Allowance (2)	(38,199)				(38,102)
Carrying value, net	$	7,520,105			$	6,496,977

———————

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)$2.4 million and $3.4 million of the General CECL Allowance for 2021 and 2020, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Geography

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	June 30, 2021				December 31, 2020
Geographic Location	Carrying Value		% of Portfolio(1)		Carrying Value		% of Portfolio(1)
New York City	$	2,355,270	31.2	%	$	2,370,337	36.3	%
United Kingdom	1,637,480		21.7		1,263,264		19.3
Midwest	737,492		9.8		552,537		8.5
Southeast	655,490		8.7		581,301		8.9
West	552,475		7.3		749,985		11.5
Northeast	138,952		1.8		103,567		1.6
Other	1,481,145		19.5		914,088		13.9
Total	$	7,558,304	100.0	%	$	6,535,079	100.0	%
General CECL Allowance (2)	(38,199)				(38,102)
Carrying value, net	$	7,520,105			$	6,496,977

———————

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)$2.4 million and $3.4 million of the General CECL Allowance for 2021 and 2020, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Risk Rating

We assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, loan to value ("LTV") ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. This review is performed quarterly. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, which ratings are defined as follows:

    1.    Very low risk

    2.    Low risk

    3. Moderate/average risk

    4. High risk/potential for loss: a loan that has a risk of realizing a principal loss

    5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or an impairment has been recorded

The following tables allocate the carrying value of our loan portfolio based on our internal risk ratings and date of origination at the dates indicated ($ in thousands):

June 30, 2021
						Year Originated
Risk Rating	Number of Loans	Total		% of Portfolio		2021		2020		2019		2018		2017		Prior
1	—	$	—	—	%	$	—	$	—	$	—	$	—	$	—	$	—
2	1	32,000		0.4	%	—		—		—		—		—		32,000
3	63	7,048,000		93.2	%	1,309,620		486,189		2,680,262		1,202,436		672,655		696,838
4	1	81,060		1.1	%	—		—		—		—		81,060		—
5	3	397,244		5.3	%	—		—		—		—		172,652		224,592

Total	68	$	7,558,304	100.0	%	$	1,309,620	$	486,189	$	2,680,262	$	1,202,436	$	926,367	$	953,430
General CECL Allowance		(38,199)
Total carrying value, net		$	7,520,105
Weighted Average Risk Rating				3.1

December 31, 2020
						Year Originated
Risk Rating	Number of Loans	Total		% of Portfolio		2020		2019		2018		2017		2016		Prior
1	—	$	—	—	%	$	—	$	—	$	—	$	—	$	—	$	—
2	1	32,000		0.5	%	—		—		—		—		—		32,000
3	62	6,129,541		93.8	%	469,586		2,661,017		1,398,479		868,514		88,710		643,235
4	—	—		—	%	—		—		—		—		—		—
5	4	373,538		5.7	%	—		—		—		131,050		115,419		127,069
Total	67	$	6,535,079	100.0	%	$	469,586	$	2,661,017	$	1,398,479	$	999,564	$	204,129	$	802,304
General CECL Allowance		(38,102)
Total carrying value, net		$	6,496,977
Weighted Average Risk Rating				3.1

Current Expected Credit Losses ("CECL")

In accordance with ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which we refer to as the "CECL Standard," we record allowances for held-to-maturity debt securities that are deducted from the carrying amount of the assets to preset the net carrying value of the amounts expected to be collected on the assets. We record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing financial difficulty. For the remainder of the portfolio, we record a general allowance ("General CECL Allowance", and together with the Specific CECL Allowance, "CECL Allowances") in accordance with the CECL Standard on a collective basis by assets with similar risk characteristics. We have elected to use the weighted average remaining maturity ("WARM") method in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method.

Specific CECL Allowance

For loans where we have deemed the borrower/sponsor to be experiencing financial difficulty, we have elected to apply a practical expedient in accordance with the CECL Standard in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the underlying collateral and the carrying value of the loan (prior to the Specific CECL Allowance). When the repayment or satisfaction of a loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated cost to sell the collateral. The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. The key unobservable inputs used to determine the fair value of the underlying collateral may vary depending on the information available to us and market conditions as of the valuation date.

We regularly evaluate the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan by loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the liquidation value of the underlying collateral. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such impairment analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates,

operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants.

The following table summarizes the loans with Specific CECL Allowances that have been recorded on our portfolio as of June 30, 2021 ($ in thousands):

Type	Property type	Location	Amortized cost prior to Specific CECL Allowance	Specific CECL Allowance(1)	Amortized cost	Interest recognition status/ as of date
Mortgage
	Multifamily Development(2)(3)	Brooklyn, NY	$182,652	$10,000	$172,652	Cost Recovery/ 3/1/2020
	Urban Predevelopment(2)(4)	Miami, FL	187,135	68,000	119,135	Cost Recovery/ 3/1/2020
	Retail Center(5)(6)	Cincinnati, OH	172,457	67,000	105,457	Cost Recovery/ 10/1/2019
Mortgage total:			$542,244	$145,000	$397,244

———————

(1)During the three and six months ended June 30, 2021 we reversed $30.0 million of previously recorded Specific CECL Allowances. This is comprised of a $20.0 million reversal as discussed below and the realization of $10.0 million that was a previously recorded Specific CECL Allowance.

(2)The fair value of this collateral was determined by assuming rent per square foot ranging from $50 to $215 and a capitalization rate ranging from 5.5% to 5.0%.

(3)During the three months ended June 30, 2021, $20.0 million of previously recorded Specific CECL Allowance was reversed primarily related to a more favorable market outlook as compared to when the Specific CECL Allowance was first recorded with respect to the loan.

(4)In October 2020, we entered into a joint venture which owns the underlying properties that secure our $180.5 million first mortgage loan. The entity in which we own an interest, and which owns the underlying properties was deemed to be a variable interest entity ("VIE") and we determined that we are not the primary beneficiary of that VIE. The related profit and loss from the joint venture was immaterial for the three and six months ended June 30, 2021.

(5)The fair value of retail collateral was determined by applying a capitalization rate of 8.3%.

(6)The entity, in which we own an interest and which owns the underlying property, was deemed to be a VIE and we determined that we are not the primary beneficiary of that VIE. As of June 30, 2021 we had recorded $67.0 million of Specific CECL Allowance. During the three and six months ended June 30, 2021, $0.4 million and $0.8 million, respectively, of interest paid was applied towards reducing the carrying value of the loan.

General CECL Allowance

In determining the General CECL Allowance using the WARM method, an annual historical loss rate, adjusted for macroeconomic estimates, is applied to the amortized cost of an asset, or pool of assets, over each subsequent period for the assets' remaining expected life. We considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment for a reasonable and supportable forecast period. The CECL Standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions as the result of COVID-19.

We derived an annual historical loss rate based on a commercial mortgage backed securities ("CMBS") database with historical losses from 1998 through the second quarter of 2021 provided by a third party, Trepp LLC. We applied various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate was further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period which we have determined to be one year. In assessing the macroeconomic environment, we consider macroeconomic factors, including unemployment rate, commercial real estate prices, and market liquidity. We compared the historical data for each metric to historical commercial real estate losses in order to determine the correlation of the data. We used projections, obtained from third-party service providers, of each factor to approximate the impact the macroeconomic outlook may have on our loss rate.

The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan(s). The subordinate loans, by virtue of being the first loss position, are required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities.

Although our secured debt obligations and senior secured term loan financing have a minimum tangible net worth maintenance covenant, the General CECL Allowance has no impact on these covenants as we are permitted to add back the General CECL Allowance for the computation of tangible net worth as defined in the respective agreements.

The following schedule sets out our General CECL Allowance as of June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021		December 31, 2020
Commercial mortgage loans, net	$	20,191	$	17,012
Subordinate loans and other lending assets, net	18,008		21,090
Unfunded commitments(1)	2,444		3,365
Total General CECL Allowance	$	40,643	$	41,467

 ———————

(1)The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities

We have made an accounting policy election to exclude $39.4 million accrued interest receivable, included in Other Assets on our condensed consolidated balance sheet, from the amortized cost basis of the related commercial mortgage loans and subordinate loans and other lending assets in determining the General CECL Allowance as any uncollectible accrued interest receivable is written off in a timely manner. We discontinue accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. Under certain circumstances, we may apply the cost recovery method under which interest collected on a loan reduces the loan's amortized cost. The amortized cost basis for loans on cost recovery was $397.2 million and $373.5 million as of June 30, 2021 and December 31, 2020, respectively. For the three and six months ended June 30, 2021 and 2020, we received $0.4 million and $0.8 million and $0.6 million and $1.2 million, respectively, in interest that reduced amortized cost under the cost recovery method.

In November 2020, the borrower under a £309.2 million commercial mortgage loan ($422.7 million assuming conversion into U.S. Dollars ("USD")), of which we own £247.5 million ($338.4 million assuming conversion into USD), secured by an urban retail property located in London, United Kingdom, entered into administration triggering an event of default. In accordance with the loan agreement, we are entitled to collect default interest in addition to the contractual interest we had been earning. We evaluated the loan for collectability and determined that, as of June 30, 2021, no Specific CECL Allowance was warranted and have continued to accrue all interest owed to us, including default interest. As of June 30, 2021, the loan had an amortized cost basis of £256.1 million ($354.2 million assuming conversion into USD).

Accrued interest is past due 90 or more days for loans with an amortized cost basis of $751.5 million as of June 30, 2021. As of December 31, 2020, the amortized cost basis for loans with interest between 30 and 59 days past due was $19.0 million and the amortized cost basis for loans with 90 or more days past due was $711.9 million.

The following schedule illustrates the quarterly changes in CECL Allowances for the six months ended June 30, 2021 and 2020, respectively ($ in thousands):

		Specific CECL Allowance		General CECL Allowance						Total CECL Allowance		CECL Allowance as % of Amortized Cost
				Funded		Unfunded		Total				General		Total
December 31, 2020		$	175,000	$	38,102	$	3,365	$	41,467	$	216,467	0.67	%	3.23	%
Changes:
	Q1 Allowance (Reversals)	—		(1,667)		429		(1,238)		(1,238)
March 31, 2021		$	175,000	$	36,435	$	3,794	$	40,229	$	215,229	0.62	%	3.06	%
Changes:
	Q2 Allowance (Reversals)	(20,000)		1,764		(1,350)		414		(19,586)
	Write-offs	(10,000)		—		—		—		(10,000)
June 30, 2021		$	145,000	$	38,199	$	2,444	$	40,643	$	185,643	0.57	%	2.41	%

		Specific CECL Allowance(1)		General CECL Allowance						Total CECL Allowance		CECL Allowance as % of Amortized Cost
				Funded		Unfunded		Total				General		Total
December 31, 2019		$	56,981	$	—	$	—	$	—	$	56,981	—	%	—	%
Changes:
	January 1, 2020 - Adoption of CECL Standard	—		27,779		3,088		30,867		30,867
	Q1 Allowances	150,000		30,494		2,971		33,465		183,465
March 31, 2020		$	206,981	$	58,273	$	6,059	$	64,332	$	271,313	1.08	%	4.05	%
Changes:
	Q2 Allowances (Reversals)	5,500		(13,729)		(1,940)		(15,669)		(10,169)
	Write-offs	(15,000)		—		—		—		(15,000)
June 30, 2020		$	197,481	$	44,544	$	4,119	$	48,663	$	246,144	0.81	%	3.71	%

———————

(1)As of December 31, 2019, amount represents specific loan loss provisions recorded on assets before the adoption of the CECL Standard. After the adoption of the CECL Standard on January 1, 2020, amounts represent Specific CECL Allowances.

The General CECL Allowance increased by $0.4 million during the three months ended June 30, 2021. The increase is primarily related to new loan originations, which were partially offset by the seasoning of our loan portfolio and improved macroeconomic outlook.

We recognized payment-in-kind ("PIK") interest of $13.7 million and $30.6 million for the three and six months ended June 30, 2021, respectively, and $12.4 million and $24.8 million for the three and six months ended June 30, 2020, respectively.

We recognized $0.7 million in pre-payment penalties and accelerated fees for the three and six months ended June 30, 2021. We recognized $0 and $0.2 million in pre-payment penalties and accelerated fees for the three and six months ended June 30, 2020.

Our portfolio includes two other lending assets, which are subordinate risk retention interests in securitization vehicles. The underlying mortgages related to our subordinate risk retention interests are secured by a portfolio of properties located throughout the United States. Our maximum exposure to loss from the subordinate risk retention interests is limited to the book value of such interests of $68.3 million as of June 30, 2021. These interests have a weighted average maturity of 5.3 years. We are not obligated to provide, and do not intend to provide financial support to these subordinate risk retention interests. Both interests are accounted for as held-to-maturity and recorded at carrying value on our condensed consolidated balance sheet.

Loan Sales

In the first quarter of 2020, we sold £62.2 million ($81.3 million assuming conversion into USD) in a mezzanine loan and £50.0 million ($65.3 million assuming conversion into USD) unfunded commitment of a senior mortgage secured by a mixed-use property in London, United Kingdom to a fund managed by an affiliate of the Manager, that was originated by us in December 2019. We recorded no gain or loss related to this sale.

In the second quarter of 2020, we sold interests in three construction loans, with aggregate commitments of $376.9 million (of which approximately $127.0 million was funded at the time of sale). The sales were made to entities managed by affiliates of the Manager. We recorded a loss of approximately $1.4 million in connection with these sales.

These transactions were evaluated under ASC 860, "Transfers and Servicing," and we determined that they qualify as sales and accounted for them as such.

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Real Estate Owned and Related Debt

6 Months Ended

Jun. 30, 2021

Real Estate [Abstract]

Real Estate Owned and Related Debt

Real Estate Owned and Related Debt

Real Estate Held for Sale

In 2017, we originated a subordinate loan junior to a $33.0 million third-party mortgage, secured by a hotel in Anaheim, CA. In December 2020, due to non-performance, we assumed legal title through the execution of a deed-in-lieu of foreclosure. We intended to sell the hotel and, as such, as of the date of the title assumption, we recorded the hotel property on our condensed consolidated balance sheet at its fair market value less costs to sell.

As of March 31, 2021 there was an increase in our expected costs to sell the property, and therefore, we recorded a $0.6 million loss during the three months ended March 31, 2021, as realized losses and impairments on real estate owned in our condensed consolidated statement of operations. During the second quarter of 2021 the property was sold at our cost basis and no additional gain or loss was recorded. The $33.0 million first mortgage was repaid upon the sale of the property.

Real Estate Owned

In 2017, we originated a $20.0 million junior mezzanine loan which was subordinate to: (i) a $110.0 million mortgage loan, and (ii) a $24.5 million senior mezzanine loan, secured by a full-service luxury hotel in Washington, D.C. During the first quarter of 2020, we recorded a $10.0 million Specific CECL Allowance and placed our junior mezzanine loan on non-accrual status.

On May 24, 2021, we purchased the $24.5 million senior mezzanine loan at par and acquired legal title to the hotel through a deed-in-lieu of foreclosure. We assumed the hotel’s assets and liabilities (including the $110.0 million mortgage loan) and recorded an additional $10.0 million charge reflecting the difference between the fair value of the hotel’s net assets and the carrying amount of the loan. This $10.0 million loss on title assumption plus the previously recorded Specific CECL Allowance of $10.0 million represents the $20.0 million recorded as a realized loss on investments in our condensed consolidated statement of operations.

On May 24, 2021, in accordance with ASC 805, "Business Combinations," we allocated the fair value of the hotel’s assets and liabilities. On June 29, 2021, we repaid the $110.0 million mortgage loan against the property. Below are the hotel's assets and liabilities as of May 24 and June 30, 2021, which are designated as real estate owned on our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		May 24, 2021
Assets:
Cash	$	3,245	$	4,148
Buildings	86,871		86,871
Land	58,742		58,742
Furniture, fixtures, and equipment	8,687		8,687
Accumulated depreciation	(452)		—
Other Assets	1,579		1,555
Total Assets	$	158,672	$	160,003
Liabilities:
Debt related to real estate owned(1)	$	—	$	110,073
Accounts payable, accrued expenses and other liabilities	5,138		4,641
Total Liabilities	$	5,138	$	114,714
Net Real Estate Assets	$	153,534	$	45,289

———————

(1)$110 million first mortgage loan was repaid on June 29, 2021.

Upon consolidation we assumed other hotel's assets and liabilities such as cash, operating receivables, accrued operating expenses, and unearned revenue, which have been recorded on our condensed consolidated balance sheet within cash, other assets, and accounts payable, accrued expenses and other liabilities.

For the three and six months ended June 30, 2021, we recorded the operating revenue, expenses and fixed asset depreciation and amortization in its condensed consolidated income statement as shown below ($ in thousands):

	Three and six months ended
	June 30, 2021
Operations related to real estate owned:
Revenue from operations	$	1,374
Operating expenses	(1,994)
Depreciation and amortization	(452)
Net loss from real estate owned	$	(1,072)

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Other Assets

6 Months Ended

Jun. 30, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	June 30, 2021		December 31, 2020
Interest receivable	$	39,411	$	40,559
Collateral deposited under derivative agreements	29,680		28,320
Loan proceeds held by servicer	5,053		5,649
Other(1)	1,686		112
Total	$	75,830	$	74,640

———————

(1)Includes $1.6 million of other assets on the balance sheet of the real estate owned at June 30, 2021. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

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Secured Debt Arrangements, Net

6 Months Ended

Jun. 30, 2021

Debt Instrument [Line Items]

Secured Debt Arrangement, Net and Senior Secured Term Loans and Notes, Net

Senior Secured Notes, Net

In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after offering expenses. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities. As of June 30, 2021, the 2029 Notes had a carrying value of $493.7 million net of deferred financing costs of $6.3 million.

Covenants

The 2029 Notes include certain covenants including a requirement that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1. As of June 30, 2021, we were in compliance with all covenants.

Participations Sold

Participations sold represents the subordinate interests in loans we originated and subsequently partially sold. We account for participations sold as secured borrowings on our condensed consolidated balance sheet with both assets and non-recourse liabilities because the participations do not qualify as a sale under ASC 860, "Transfers and Servicing." The income earned on the participations sold is recorded as interest income and an identical amount is recorded as interest expense on our condensed consolidated statements of operations.

In October 2020, we sold a $25.0 million interest, at par, in a mezzanine loan collateralized by a ground-up condominium development in New York City that we originated in December 2017. The participation interest sold accrued payment-in-kind interest, was accounted for as a secured borrowing on our condensed consolidated balance sheet, and was subordinate to our remaining mezzanine loan. The mezzanine loan was repaid at par in June 2021, and therefore, we de-recognized the related participating interest of $27.7 million, which included $2.7 million in payment-in-kind interest.

In December 2020, we sold a £6.7 million ($8.9 million assuming conversion into USD) interest, at par, in a first mortgage loan collateralized by an office building located in London, United Kingdom that was originated by us in December 2017. In connection with this sale, we transferred our remaining unfunded commitment of £19.1 million ($25.3 million assuming conversion into USD). The participation interest sold is subordinate to our remaining £70.7 million ($97.7 million assuming conversion into USD) first mortgage loan and is accounted for as a secured borrowing on our condensed consolidated balance sheet.

The table below details participations sold included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Participation sold on Commercial mortgage loans	$	27,662	$	9,217
Participation sold on Subordinate loans and other lending assets (1)	—		25,757
Total Participations sold	$	27,662	$	34,974

———————

(1)Includes $0 and $0.8 million of PIK interest in 2021 and 2020, respectively.

Senior Notes

Debt Instrument [Line Items]

Secured Debt Arrangement, Net and Senior Secured Term Loans and Notes, Net

Secured Debt Arrangements, Net

At June 30, 2021 and December 31, 2020, our borrowings included the following secured debt arrangements, maturities and weighted-average interest rates ($ in thousands):

	June 30, 2021					December 31, 2020
	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)		Maturity (2)	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)		Maturity (2)
JPMorgan (USD)	$	1,113,966	$	1,069,071	June 2024	$	1,113,156	$	984,125	June 2024
JPMorgan (GBP)	114,886		114,886		June 2024	113,548		113,548		June 2024
JPMorgan (EUR)	71,148		71,148		June 2024	73,296		73,296		June 2024
DB (USD)	700,000		413,325		March 2023	1,000,000		520,457		March 2023
Goldman (USD)	500,000		133,955		November 2023(3)	500,000		332,352		November 2023(3)
CS Facility - USD	189,219		189,219		July 2024(4)(5)	374,251		369,182		December 2023(4)(5)
HSBC Facility - EUR	169,930		169,930		July 2022	163,785		163,785		July 2021
Barclays (USD)	200,000		32,693		March 2024	200,000		35,192		March 2024
Total Secured Credit Facilities	3,059,149		2,194,227			3,538,036		2,591,937
Barclays Private Securitization	1,495,432		1,495,432		September 2023(5)	857,728		857,728		September 2023(5)
Total Secured Debt Arrangements	4,554,581		3,689,659			4,395,764		3,449,665
Less: deferred financing costs	N/A		(9,753)			N/A		(12,993)
Total Secured Debt Arrangements, net(6)(7)(8)	$	4,554,581	$	3,679,906		$	4,395,764	$	3,436,672

———————

(1)As of June 30, 2021, British Pound Sterling ("GBP"), Euros ("EUR"), and Swedish Krona ("SEK") borrowings were converted to USD at a rate of 1.38, 1.19, and 0.12, respectively. As of December 31, 2020, GBP and EUR borrowings were converted to USD at a rate of 1.37 and 1.22, respectively.

(2)Maturity date assumes extensions at our option are exercised with consent of financing providers, where applicable.

(3)Assumes facility enters the amortization period described below.

(4)Assumes financings are extended in line with the underlying loans.

(5)Represents weighted average maturity across various financings with the counterparty. See below for additional details.

(6)Weighted-average borrowing costs as of June 30, 2021 and December 31, 2020 were USD L+2.00% / GBP L+2.03% / EUR L+1.43% / SEK L+1.50% and USD L+2.16% / GBP L+1.83% / EUR L+1.46%, respectively.

(7)Weighted average advance rates based on cost as of June 30, 2021 and December 31, 2020 were 67.2% (64.8% (USD) / 68.8% (GBP) / 67.6% (EUR) / 80.8% (SEK)) and 63.7% (62.5% (USD) / 68.7% (GBP) / 60.8% (EUR)).

(8)As of June 30, 2021 and December 31, 2020, approximately 54% and 55% of the outstanding balance under these secured borrowings were recourse to us.

Each of our existing secured debt arrangements include "credit based and other mark-to-market" features. "Credit mark-to-market" provisions in repurchase facilities are designed to keep the lenders' credit exposure generally constant as a percentage of the underlying collateral value of the assets pledged as security to them. If the credit of the underlying collateral value decreases, the amount of leverage available to us will be reduced as our assets are marked-to-market, which would reduce our liquidity. Generally, the lender under the applicable secured debt arrangement calls for and/or sets the valuation and any revaluation of the collateral assets in its sole, good faith discretion. If it is determined (subject to certain conditions) that the market value of the underlying collateral has decreased by more than a defined minimum amount, the lender may require us to provide additional collateral or may make margin calls, which may require us to repay all or a portion of the funds advanced. We closely monitor our liquidity and intend to maintain sufficient liquidity on our condensed consolidated balance sheet in order to meet any margin calls in the event of any significant decreases in asset values. As of June 30, 2021 and December 31, 2020, the weighted average haircut under our secured debt arrangements was approximately 32.8% and 36.3%, respectively. In addition, our existing secured debt arrangements are not entirely term-matched financings and may mature before our commercial real estate debt investments that represent underlying collateral to those financings. We are in frequent dialogue with the lenders under our secured debt arrangements regarding our management of their collateral assets and as we negotiate renewals and extensions of these liabilities, we may experience lower advance rates and higher pricing under the renewed or extended agreements.

JPMorgan Facility

In November 2019, through three indirect wholly-owned subsidiaries, we entered into a Sixth Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, National Association (the "JPMorgan Facility"). The JPMorgan Facility allows for $1.3 billion of maximum borrowings (with amounts borrowed in GBP and EUR converted to USD for purposes of calculating availability based on the greater of the spot rate as of the initial financing under the corresponding mortgage loan and the then-current spot rate) and matures in June 2022 and has two one-year extensions available at our option, which are subject to certain conditions. The JPMorgan Facility enables us to elect to receive advances in USD, GBP, or EUR. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $1.3 billion (including £83.1 million and €60.0 million assuming conversion into USD) of borrowings outstanding under the JPMorgan Facility secured by certain of our commercial mortgage loans.

DB Facility

In March 2020, through an indirect wholly-owned subsidiary, we entered into a Third Amended and Restated Master Repurchase Agreement with Deutsche Bank AG, Cayman Islands Branch, London Branch (the "DB Facility"). During the first quarter 2021, we amended the DB Facility to reduce the commitment from $1.0 billion to $700.0 million ($413.3 million drawn at June 30, 2021) for the sale and repurchase of eligible first mortgage loans secured by commercial or multifamily properties, located in the United States, United Kingdom and the European Union, and enables us to elect to receive advances in USD, GBP, or EUR. The DB Facility matures in March 2022, and has a one-year extension available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $413.3 million of borrowings outstanding under the DB Facility secured by certain of our commercial mortgage loans.

Goldman Facility

In November 2017, through an indirect wholly-owned subsidiary, we entered into a master repurchase and securities contract agreement with Goldman Sachs Bank USA (the "Goldman Facility"), which provides advances up to $500.0 million and matures in November 2021. In addition, the Goldman Facility contains a two-year amortization period subsequent to the November 2021 maturity, which allows for the refinancing or pay down of assets under the facility. Margin calls may occur any

time at specified margin deficit thresholds.

As of June 30, 2021, we had $134.0 million of borrowings outstanding under the Goldman Facility secured by certain of our commercial mortgage loans.

CS Facility - USD

In July 2018, through an indirect wholly-owned subsidiary, we entered into a Master Repurchase Agreement with Credit Suisse AG, acting through its Cayman Islands Branch and Alpine Securitization Ltd (the "CS Facility — USD"), which provides for advances for the sale and repurchase of eligible commercial mortgage loans secured by real estate. The "CS Facility — USD" has an "evergreen" feature such that the facility continues unless terminated at any time by Credit Suisse with six months' notice. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $189.2 million of borrowings outstanding under the CS Facility — USD secured by certain of our commercial mortgage loans.

HSBC Facility - EUR

In July 2019, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement with HSBC Bank plc, which provides for a single asset financing (the "HSBC Facility — EUR"). The HSBC Facility — EUR was extended during the first quarter 2021 and matures in July 2022. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $169.9 million (€143.3 million assuming conversion into USD) of borrowings outstanding under the HSBC Facility - EUR secured by one commercial mortgage loan.

Barclays Facility - USD

In March 2020, through an indirect wholly-owned subsidiary, we entered into a secured debt arrangement pursuant to a Master Repurchase Agreement with Barclays Bank plc (the "Barclays Facility – USD"). The Barclays Facility — USD allows for $200.0 million of maximum borrowings and initially matures in March 2023 with extensions available at our option, subject to certain conditions. Margin calls may occur any time at specified aggregate margin deficit thresholds.

As of June 30, 2021, we had $32.7 million of borrowings outstanding under the Barclays Facility - USD secured by one commercial mortgage loan.

Barclays Private Securitization

In June 2020, through a newly formed entity, we entered into a private securitization with Barclays Bank plc, of which Barclays Bank plc retained $782.0 million of senior notes (the "Barclays Private Securitization"). The Barclays Private Securitization finances the loans that were previously financed under a Global Master Repurchase Agreement with Barclays Bank plc (the "Barclays Facility - GBP/EUR"). In June 2020, we pledged an additional commercial mortgage loan with an outstanding principal balance of £26.0 million and pledged additional collateral of a financed loan of €5.3 million as of June 30, 2020. During the first quarter 2021, we pledged two additional commercial mortgage loans with outstanding principal balances of $227.4 million (£165.0 million assuming conversion into USD) and $187.4 million (kr1.6 billion assuming conversion into USD). During the three months ended June 30, 2021, we pledged an additional commercial mortgage loan with an outstanding principal balance of $281.7 million (€237.6 million assuming conversion into USD), and pledged additional collateral of a financed loan of $114.7 million (kr1.0 billion assuming conversion into USD).

The Barclays Private Securitization eliminates daily margining provisions and grants us significant discretion to modify certain terms of the underlying collateral including waiving certain loan-level covenant breaches and deferring or waiving of debt service payments for up to 18 months. The securitization includes LTV based covenants with significant headroom to previous levels included in the Barclays Facility - GBP/EUR. These deleveraging requirements are based on significant declines in the value of the collateral as determined by an annual third-party (engaged by us) appraisal process tied to the provisions of the underlying loan agreements. We believe this provides us with both cushion and predictability to avoid sudden unexpected outcomes and material repayment requirements. In addition to the pledge of the additional collateral noted above, we paid down the previous financing by €16.5 million (totaling $18.5 million in USD) and agreed to increase the financing spreads by 0.25%.

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of June 30, 2021 ($ in thousands):

	Borrowings outstanding	Fully-Extended Maturity(1)
Total/Weighted-Average GBP	$881,976	August 2024
Total/Weighted-Average EUR	370,492	June 2022(2)
Total/Weighted-Average SEK	242,964	May 2022
Total/Weighted-Average Securitization	$1,495,432	September 2023

———————

(1)Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(2)The EUR portion of the Barclays Private Securitization has an "evergreen" feature such that the facility continues for one year and can be terminated by either party on certain dates with, depending on the date of notice, a minimum of nine to twelve months' notice.

The table below provides the assets and liabilities of the Barclays Private Securitization VIE included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Assets:
Cash	$	1,955	$	2,020
Commercial mortgage loans, net(1)	2,110,376		1,290,393
Other Assets	17,119		15,831
Total Assets	$	2,129,450	$	1,308,244
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $2.2 million and $0.7 million in 2021 and 2020, respectively)	$	1,493,222	$	857,043
Accounts payable, accrued expenses and other liabilities(2)	2,228		1,307
Total Liabilities	$	1,495,450	$	858,350

———————

(1)Net of the General CECL Allowance of $10.2 million and $4.4 million as of June 30, 2021 and December 31, 2020, respectively.

(2)Represents General CECL Allowance related to unfunded commitments on commercial mortgage loans, net of $0.4 million and $0.3 million as of June 30, 2021 and December 31, 2020, respectively.

The table below provides the net income of the Barclays Private Securitization VIE included in our condensed consolidated statement of operations ($ in thousands):

	Three months ended		Six months ended
	June 30, 2021		June 30, 2021
Net Interest Income:
Interest income from commercial mortgage loans	$	20,943	$	37,036
Interest expense	(6,396)		(10,986)
Net interest income	$	14,547	$	26,050
General and administrative expense	—		(1)
Provision for loan losses and impairments	(2,040)		(5,668)
Foreign currency gain	2,802		1,890
Net Income	$	15,309	$	22,271

As of June 30, 2021, we had $1.5 billion (£637.7 million, €312.4 million, and kr2.1 billion assuming conversion into USD) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

At June 30, 2021, our borrowings had the following remaining maturities ($ in thousands):

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	121,115	$	1,133,991	$	—	$	—	$	1,255,106
DB Facility	—		413,325		—		—		413,325
Goldman Facility	133,955		—		—		—		133,955
CS Facility - USD	—		40,500		148,719		—		189,219
HSBC Facility - EUR	—		169,930		—		—		169,930
Barclays Facility - USD	—		32,693		—		—		32,693
Barclays Private Securitization	613,455		550,784		331,192		—		1,495,431
Total	$	868,525	$	2,341,223	$	479,911	$	—	$	3,689,659

The table above reflects the fully extended maturity date of the facility and assumes facilities with an "evergreen" feature continue to extend through the fully-extended maturity of the underlying asset and assumes underlying loans are extended with consent of financing providers.

The table below summarizes the outstanding balances at June 30, 2021, as well as the maximum and average month-end balances for the six months ended June 30, 2021 for our borrowings under secured debt arrangements ($ in thousands).

	As of June 30, 2021				For the six months ended June 30, 2021
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,255,105	$	2,018,979	$	1,359,053	$	1,191,150
DB Facility	413,325		610,654		520,217		463,607
Goldman Facility	133,955		202,812		331,154		293,899
CS Facility - USD	189,219		271,691		369,182		266,233
HSBC Facility - EUR	169,930		214,185		174,717		165,863
Barclays Facility - USD	32,693		50,121		35,193		34,359
Barclays Private Securitization	1,495,432		2,120,617		1,495,432		1,190,667
Total	$	3,689,659	$	5,489,059

The table below summarizes the outstanding balances at December 31, 2020, as well as the maximum and average month-end balances for the year ended December 31, 2020 for our borrowings under secured debt arrangements ($ in thousands).

	As of December 31, 2020				For the year ended December 31, 2020
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,170,969	$	2,009,249	$	1,192,288	$	1,119,997
DB Facility	520,457		814,715		526,743		506,831
Goldman Facility	332,352		510,371		362,139		343,621
CS Facility - USD	369,182		524,139		378,781		348,464
CS Facility - GBP	—		—		90,111		43,094
HSBC Facility - USD	—		—		50,625		44,000
HSBC Facility - GBP	—		—		34,500		20,563
HSBC Facility - EUR	163,785		215,509		163,788		154,725
Barclays Facility - USD	35,192		49,993		35,193		29,327
Barclays Facility - GBP	—		—		666,810		260,692
Barclays Facility - EUR	—		—		180,595		70,521
Barclays Private Securitization	857,728		1,295,023		857,728		823,915
Total	$	3,449,665	$	5,418,999

We were in compliance with the covenants under each of our secured debt arrangements at June 30, 2021 and December 31, 2020.

XML

Senior Secured Term Loan, Net

6 Months Ended

Jun. 30, 2021

Debt Instrument [Line Items]

Secured Debt Arrangement, Net and Senior Secured Term Loans and Notes, Net

Senior Secured Notes, Net

In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after offering expenses. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities. As of June 30, 2021, the 2029 Notes had a carrying value of $493.7 million net of deferred financing costs of $6.3 million.

Covenants

The 2029 Notes include certain covenants including a requirement that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1. As of June 30, 2021, we were in compliance with all covenants.

Participations Sold

Participations sold represents the subordinate interests in loans we originated and subsequently partially sold. We account for participations sold as secured borrowings on our condensed consolidated balance sheet with both assets and non-recourse liabilities because the participations do not qualify as a sale under ASC 860, "Transfers and Servicing." The income earned on the participations sold is recorded as interest income and an identical amount is recorded as interest expense on our condensed consolidated statements of operations.

In October 2020, we sold a $25.0 million interest, at par, in a mezzanine loan collateralized by a ground-up condominium development in New York City that we originated in December 2017. The participation interest sold accrued payment-in-kind interest, was accounted for as a secured borrowing on our condensed consolidated balance sheet, and was subordinate to our remaining mezzanine loan. The mezzanine loan was repaid at par in June 2021, and therefore, we de-recognized the related participating interest of $27.7 million, which included $2.7 million in payment-in-kind interest.

In December 2020, we sold a £6.7 million ($8.9 million assuming conversion into USD) interest, at par, in a first mortgage loan collateralized by an office building located in London, United Kingdom that was originated by us in December 2017. In connection with this sale, we transferred our remaining unfunded commitment of £19.1 million ($25.3 million assuming conversion into USD). The participation interest sold is subordinate to our remaining £70.7 million ($97.7 million assuming conversion into USD) first mortgage loan and is accounted for as a secured borrowing on our condensed consolidated balance sheet.

The table below details participations sold included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Participation sold on Commercial mortgage loans	$	27,662	$	9,217
Participation sold on Subordinate loans and other lending assets (1)	—		25,757
Total Participations sold	$	27,662	$	34,974

———————

(1)Includes $0 and $0.8 million of PIK interest in 2021 and 2020, respectively.

Senior Debt

Debt Instrument [Line Items]

Secured Debt Arrangement, Net and Senior Secured Term Loans and Notes, Net

Senior Secured Term Loans, Net

In May 2019, we entered into a $500.0 million senior secured term loan (the "2026 Term Loan"), which matures in May 2026 and contains restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The 2026 Term Loan bears interest at LIBOR plus 2.75% and was issued at a price of 99.5%.

In March 2021, we entered into an additional $300.0 million in senior secured term loan with substantially the same terms as the 2026 Term Loan (the "2028 Term Loan" and, together with the 2026 Term Loan, the "Term Loans"), which matures in March 2028 and contains restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The 2028 Term Loan bears interest at LIBOR (with a floor of 0.50%) plus 3.50% and was issued at a price of 99.0%.

During the three and six months ended June 30, 2021 and 2020, we repaid $1.3 million and $2.5 million of principal related to the 2026 Term Loan, respectively. During the three and six months ended June 30, 2021, we repaid $0.8 million of principal related to the 2028 Term Loan.

The following table summarizes the terms of our Term Loans as of June 30, 2021 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	490,000	$	(1,726)	$	(6,280)	$	481,994	2.75	%	5/15/2026
2028 Term Loan	299,250		(2,857)		(3,818)		292,575		3.50	%	3/11/2028
Total	$	789,250	$	(4,583)	$	(10,098)	$	774,569

The following table summarizes the terms of our Term Loans as of December 31, 2020 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	492,500	$	(1,905)	$	(7,130)	$	483,465	2.75	%	5/15/2026

Covenants

The Term Loans include the following financial covenants: (i) our ratio of total recourse debt to tangible net worth cannot be greater than 3:1; and (ii) our ratio of total unencumbered assets to total pari-passu indebtedness must be at least 1.25:1.

We were in compliance with the covenants under the Term Loans at June 30, 2021 and December 31, 2020.

Interest Rate Swap

In connection with the 2026 Term Loan, we previously entered into an interest rate swap to fix LIBOR at 2.12% effectively fixing our all-in coupon on the senior secured term loan at 4.87%. During the year ended December 31, 2020 we terminated the interest rate swap and recognized a realized loss of $53.9 million.

Interest Rate Cap

During the second quarter of 2020, we entered into a three-year interest rate cap to cap LIBOR at 0.75%. This effectively limits the maximum all-in coupon on our 2026 Term Loan to 3.50%. In connection with the interest rate cap, we incurred up-front fees of $1.1 million for the year ended December 31, 2020, which we recorded as a deferred financing cost on our condensed consolidated balance sheet and interest expense will be recognized over the duration of the interest rate cap in our condensed consolidated statement of operations

XML

Senior Secured Notes, Net

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Secured Debt Arrangement, Net and Senior Secured Term Loans and Notes, Net

Senior Secured Notes, Net

In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after offering expenses. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities. As of June 30, 2021, the 2029 Notes had a carrying value of $493.7 million net of deferred financing costs of $6.3 million.

Covenants

The 2029 Notes include certain covenants including a requirement that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1. As of June 30, 2021, we were in compliance with all covenants.

Participations Sold

Participations sold represents the subordinate interests in loans we originated and subsequently partially sold. We account for participations sold as secured borrowings on our condensed consolidated balance sheet with both assets and non-recourse liabilities because the participations do not qualify as a sale under ASC 860, "Transfers and Servicing." The income earned on the participations sold is recorded as interest income and an identical amount is recorded as interest expense on our condensed consolidated statements of operations.

In October 2020, we sold a $25.0 million interest, at par, in a mezzanine loan collateralized by a ground-up condominium development in New York City that we originated in December 2017. The participation interest sold accrued payment-in-kind interest, was accounted for as a secured borrowing on our condensed consolidated balance sheet, and was subordinate to our remaining mezzanine loan. The mezzanine loan was repaid at par in June 2021, and therefore, we de-recognized the related participating interest of $27.7 million, which included $2.7 million in payment-in-kind interest.

In December 2020, we sold a £6.7 million ($8.9 million assuming conversion into USD) interest, at par, in a first mortgage loan collateralized by an office building located in London, United Kingdom that was originated by us in December 2017. In connection with this sale, we transferred our remaining unfunded commitment of £19.1 million ($25.3 million assuming conversion into USD). The participation interest sold is subordinate to our remaining £70.7 million ($97.7 million assuming conversion into USD) first mortgage loan and is accounted for as a secured borrowing on our condensed consolidated balance sheet.

The table below details participations sold included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Participation sold on Commercial mortgage loans	$	27,662	$	9,217
Participation sold on Subordinate loans and other lending assets (1)	—		25,757
Total Participations sold	$	27,662	$	34,974

———————

(1)Includes $0 and $0.8 million of PIK interest in 2021 and 2020, respectively.

XML

Convertible Senior Notes, Net

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Convertible Senior Notes, Net

Convertible Senior Notes, Net

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022 (the "2022 Notes"), for which we received $337.5 million, after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2022 Notes had a carrying value of $341.7 million and an unamortized discount of $3.3 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023 (the "2023 Notes" and, together with the 2022 Notes, the "Convertible Notes"), for which we received $223.7 million after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2023 Notes had a carrying value of $226.1 million and an unamortized discount of $3.9 million.

The following table summarizes the terms of the Convertible Notes as of June 30, 2021 ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.15
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.29
Total	$	575,000

The following table summarizes the terms of the Convertible Notes as of December 31, 2020 ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.65
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.79
Total	$	575,000

———————

(1)Effective rate includes the effect of the adjustment for the conversion option (See footnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2)We have the option to settle any conversions in cash, shares of common stock or a combination thereof. The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Convertible Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

We may not redeem the Convertible Notes prior to maturity except in limited circumstances. The closing price of our common stock on June 30, 2021 of $15.95 was less than the per share conversion price of the Convertible Notes.

In accordance with ASC 470, "Debt," the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. GAAP requires that the initial proceeds from the sale of the Convertible Notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by us at such time. We measured the fair value of the debt components of the Convertible Notes as of their issuance date based on effective interest rates. As a result, we attributed

approximately $15.4 million of the proceeds to the equity component of the Convertible Notes ($11.0 million to the 2022 Notes and $4.4 million to the 2023 Notes), which represents the excess proceeds received over the fair value of the liability component of the Convertible Notes at the date of issuance. The equity component of the Convertible Notes has been reflected within additional paid-in capital in our condensed consolidated balance sheet as of June 30, 2021. The resulting debt discount is being amortized over the period during which the Convertible Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the Convertible Notes will increase in subsequent reporting periods through the maturity date as the Convertible Notes accrete to their par value over the same period.The aggregate contractual interest expense was approximately $7.2 million and $14.4 million for the three and six months ended June 30, 2021 and June 30, 2020. With respect to the amortization of the discount on the liability component of the Convertible Notes as well as the amortization of deferred financing costs, we reported additional non-cash interest expense of approximately $1.6 million and $3.1 million for the three and six months ended June 30, 2021, as compared to $1.5 million and $3.0 million for the three and six months ended June 30, 2020, respectively.

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Derivatives

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than USD.

We have entered into a series of forward contracts to sell an amount of foreign currency (GBP, EUR and SEK) for an agreed upon amount of USD at various dates through May 2026. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments.

The following table summarizes our non-designated foreign exchange ("Fx") forwards and our interest rate cap as of June 30, 2021:

	June 30, 2021
Type of Derivatives	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx contracts - GBP	100	561,586	GBP	July 2021 - February 2026	1.69
Fx contracts - EUR	74	286,660	EUR	August 2021 - November 2025	2.22
Fx contracts - SEK	23	801,518	SEK	August 2021 - May 2026	4.06
Interest rate cap	1	500,000	USD	June 2023	1.96

The following table summarizes our non-designated Fx forwards and our interest rate cap as of December 31, 2020:

	December 31, 2020
Type of Derivatives	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx contracts - GBP	93	428,493	GBP	January 2021 - December 2024	2.04
Fx contracts - EUR	69	239,466	EUR	February 2021 - August 2024	2.61
Fx contracts - SEK	N/A	0	N/A	N/A	N/A
Interest rate cap	1	500,000	USD	June 2023	2.49

We have not designated any of our derivative instruments as hedges as defined in ASC 815, "Derivatives and Hedging" and, therefore, changes in the fair value of our derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our derivatives for the three and six months ended June 30, 2021, and 2020 ($ in thousands):

		Amount of gain (loss) recognized in income
		Three months ended June 30,				Six months ended June 30,
	Location of Gain (Loss) Recognized in Income	2021		2020		2021		2020
Forward currency contracts	Unrealized gain (loss) on derivative instruments	$	(2,021)	$	(9,004)	$	8,481	$	53,432
Forward currency contracts	Realized gain (loss) on derivative instruments	(1,073)		6,009		(1,775)		14,064
Total		$	(3,094)	$	(2,995)	$	6,706	$	67,496

In connection with our senior secured term loan, in May 2019, we entered into an interest rate swap to fix LIBOR at 2.12% or an all-in interest rate of 4.87%. We used our interest rate swap to manage exposure to variable cash flows on our borrowings under our senior secured term loan. Our interest rate swap allowed us to receive a variable rate cash flow based on LIBOR and pay a fixed rate cash flow, mitigating the impact of this exposure. However during the second quarter of 2020, we terminated our interest rate swap due to a significant decrease in LIBOR and recognized a realized loss on the accompanying condensed consolidated statement of operations.

In June 2020, we entered into an interest rate cap for approximately $1.1 million. We use our interest rate cap to manage exposure to variable cash flows on our borrowings under our senior secured term loan by effectively limiting LIBOR from exceeding 0.75%. This effectively limits the maximum all-in coupon on our senior secured term loan to 3.50%. Unrealized gains or losses related to the interest rate swap and cap were recorded net under gain (loss) on interest rate hedging instruments in our condensed consolidated statement of operations.

		Amount of gain (loss) recognized in income
		Three months ended June 30,				Six months ended June 30,
	Location of Gain (Loss) Recognized in Income	2021		2020		2021		2020
Interest rate cap(1)	Unrealized (loss) gain on interest rate cap	$	(111)	$	738	$	246	$	738
Interest rate swap(2)	Unrealized gain on interest rate swap	—		50,018		—		14,470
Interest rate swap(2)	Realized loss on interest rate swap	—		(53,851)		—		(53,851)
Total		$	(111)	$	(3,095)	$	246	$	(38,643)

———————

(1)With a notional amount of $500 million at June 30, 2021 and 2020.

(2)With a notional amount of $0 at June 30, 2021 and 2020.

The following tables summarize the gross asset and liability amounts related to our derivatives at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021						December 31, 2020
	Gross Amount of Recognized Liability		Gross Amounts Offset in our Condensed Consolidated Balance Sheet		Net Amounts of Liability Presented in our Condensed Consolidated Balance Sheet		Gross Amount of Recognized Liabilities		Gross Amounts Offset in our Condensed Consolidated Balance Sheet		Net Amounts of Liabilities Presented in our Condensed Consolidated Balance Sheet
Forward currency contracts	$	28,472	$	(5,578)	$	22,894	$	32,172	$	(797)	$	31,375
Interest rate cap	—		(380)		(380)		—		(134)		(134)
Total derivative liabilities	$	28,472	$	(5,958)	$	22,514	$	32,172	$	(931)	$	31,241

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Participations Sold

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Participations Sold

Senior Secured Notes, Net

In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after offering expenses. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities. As of June 30, 2021, the 2029 Notes had a carrying value of $493.7 million net of deferred financing costs of $6.3 million.

Covenants

The 2029 Notes include certain covenants including a requirement that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1. As of June 30, 2021, we were in compliance with all covenants.

Participations Sold

Participations sold represents the subordinate interests in loans we originated and subsequently partially sold. We account for participations sold as secured borrowings on our condensed consolidated balance sheet with both assets and non-recourse liabilities because the participations do not qualify as a sale under ASC 860, "Transfers and Servicing." The income earned on the participations sold is recorded as interest income and an identical amount is recorded as interest expense on our condensed consolidated statements of operations.

In October 2020, we sold a $25.0 million interest, at par, in a mezzanine loan collateralized by a ground-up condominium development in New York City that we originated in December 2017. The participation interest sold accrued payment-in-kind interest, was accounted for as a secured borrowing on our condensed consolidated balance sheet, and was subordinate to our remaining mezzanine loan. The mezzanine loan was repaid at par in June 2021, and therefore, we de-recognized the related participating interest of $27.7 million, which included $2.7 million in payment-in-kind interest.

In December 2020, we sold a £6.7 million ($8.9 million assuming conversion into USD) interest, at par, in a first mortgage loan collateralized by an office building located in London, United Kingdom that was originated by us in December 2017. In connection with this sale, we transferred our remaining unfunded commitment of £19.1 million ($25.3 million assuming conversion into USD). The participation interest sold is subordinate to our remaining £70.7 million ($97.7 million assuming conversion into USD) first mortgage loan and is accounted for as a secured borrowing on our condensed consolidated balance sheet.

The table below details participations sold included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Participation sold on Commercial mortgage loans	$	27,662	$	9,217
Participation sold on Subordinate loans and other lending assets (1)	—		25,757
Total Participations sold	$	27,662	$	34,974

———————

(1)Includes $0 and $0.8 million of PIK interest in 2021 and 2020, respectively.

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Accounts Payable, Accrued Expenses and Other Liabilities

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts Payable, Accrued Expenses and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	June 30, 2021		December 31, 2020
Accrued dividends payable	$	52,635	$	52,768
Accrued interest payable	14,695		13,979
Accounts payable and other liabilities(1)	12,792		4,775
General CECL Allowance on unfunded commitments(2)	2,444		3,365
Collateral deposited under derivative agreements	1,620		—
Total	$	84,186	$	74,887

  ———————

(1)Includes $5.1 million of accounts payable and other liabilities on the balance sheet of the real estate owned at June 30, 2021. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

(2)Refer to "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" for additional disclosure related to the General CECL Allowance on unfunded commitments for the six months ended June 30, 2021 and 2020, respectively.

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Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Management Agreement

In connection with our initial public offering in September 2009, we entered into a management agreement (the "Management Agreement") with the Manager, which describes the services to be provided by the Manager and its compensation for those services. The Manager is responsible for managing our day-to-day operations, subject to the direction and oversight of our board of directors.

Pursuant to the terms of the Management Agreement, the Manager is paid a base management fee equal to 1.5% per annum of our stockholders’ equity (as defined in the Management Agreement), calculated and payable (in cash) quarterly in arrears.

The current term of the Management Agreement will expire on September 29, 2021, and is automatically renewed for successive one-year terms on each anniversary thereafter. The Management Agreement may be terminated upon expiration of the one-year extension term only upon the affirmative vote of at least two-thirds of our independent directors, based upon (1) unsatisfactory performance by the Manager that is materially detrimental to ARI or (2) a determination that the management fee payable to the Manager is not fair, subject to the Manager’s right to prevent such a termination based on unfair fees by accepting a mutually acceptable reduction of management fees agreed to by at least two-thirds of our independent directors. The Manager must be provided with written notice of any such termination at least 180 days prior to the expiration of the then existing term and will be paid a termination fee equal to three times the sum of the average annual base management fee during the 24-month period immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter prior to the date of termination. Following a meeting by our independent directors in February 2021, which included a discussion of the Manager’s performance and the level of the management fees thereunder, we determined not to seek termination of the Management Agreement.

We incurred approximately $9.4 million and $18.8 million in base management fees under the Management Agreement for the three and six months ended June 30, 2021, respectively, as compared to $10.0 million and $20.2 million for the three and six months ended June 30, 2020, respectively.

In addition to the base management fee, we are also responsible for reimbursing the Manager for certain expenses paid by the Manager on our behalf or for certain services provided by the Manager to us. For the three and six months ended June 30, 2021 we paid expenses totaling $0.7 million and $1.3 million, respectively, related to reimbursements for certain expenses paid by the Manager on our behalf under the Management Agreement as compared to $0.5 million and $1.1 million for the three and six months ended June 30, 2020, respectively. Expenses incurred by the Manager and reimbursed by us are reflected in the respective condensed consolidated statement of operations expense category or our condensed consolidated balance sheet based on the nature of the item.

Included in payable to related party on our condensed consolidated balance sheet at June 30, 2021 and December 31, 2020

are approximately $9.4 million and $9.6 million, respectively, for base management fees incurred but not yet paid under the Management Agreement.

Loans receivable

In June 2015, we originated a $20.0 million mezzanine loan secured by pledges of equity interests in the property recorded as real estate owned on our condensed consolidated balance sheet at June 30, 2021. The mezzanine loan was subordinate to (i) a $110.0 million mortgage loan, originated by a third party, and (ii) a $24.5 million senior mezzanine loan, originated by an affiliate of the Manager. On May 24, 2021, we purchased the $24.5 million senior mezzanine loan at par from the affiliate and acquired legal title to the hotel through a deed-in-lieu of foreclosure. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

In January 2020, we sold £62.2 million ($81.3 million assuming conversion into USD) in a mezzanine loan and £50.0 million ($65.3 million assuming conversion into USD) unfunded commitment of a senior mortgage secured by a mixed-use property in London, United Kingdom to a fund managed by an affiliate of the Manager, that was originated by us in December 2019. This transaction was evaluated under ASC 860, "Transfers and Servicing," and we determined that it qualifies as a sale and accounted for as such (see "Note 4 -Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net").

Term Loan

In March 2021, Apollo Global Funding, LLC, an affiliate of the Manager, served as one of the eight arrangers for the issuance of our 2028 Term Loan and received $0.2 million of arrangement fees. In addition, funds managed by an affiliate of the Manager invested in $30.0 million of the 2028 Term Loan.

Senior Secured Notes

In June 2021, Apollo Global Securities, LLC, an affiliate of the Manager, served as one of the eight initial purchasers in the issuance of our 2029 Notes and received $0.4 million of initial purchasers' discounts and commissions.

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Share-Based Payments

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Payments

Share-Based Payments

On September 23, 2009, our board of directors approved the Apollo Commercial Real Estate Finance, Inc. 2009 Equity Incentive Plan ("2009 LTIP") and on April 16, 2019, our board of directors approved the Amended and Restated Apollo Commercial Real Estate Finance, Inc. 2019 Equity Incentive Plan ("2019 LTIP," and together with the 2009 LTIP, the "LTIPs"), which amended and restated the 2009 LTIP. Following the approval of the 2019 LTIP by our stockholders at our 2019 annual meeting of stockholders on June 12, 2019, no additional awards have been or will be granted under the 2009 LTIP and all outstanding awards granted under the 2009 LTIP remain in effect in accordance with the terms in the 2009 LTIP.

The 2019 LTIP provides for grants of restricted common stock, restricted stock units ("RSUs") and other equity-based awards up to an aggregate of 7,000,000 shares of our common stock. The LTIPs are administered by the compensation committee of our board of directors (the "Compensation Committee") and all grants under the LTIPs must be approved by the Compensation Committee.

We recognized stock-based compensation expense of $4.4 million and $8.7 million during the three and six months ended June 30, 2021, respectively, related to restricted stock and RSU vesting, as compared to $4.3 million and $8.5 million for the three and six months ended June 30, 2020, respectively.

The following table summarizes the grants, vesting and forfeitures of restricted common stock and RSUs during the six months ended June 30, 2021:

	Type	Restricted Stock	RSUs	Grant Date Fair Value ($ in millions)
Outstanding at December 31, 2020		82,235	2,455,853
	Granted	35,185	14,685	$	0.2
	Vested	(82,235)	—	N/A
	Forfeiture	—	(44,205)	N/A
Outstanding at June 30, 2021		35,185	2,426,333

Below is a summary of restricted stock and RSU vesting dates as of June 30, 2021: 

Vesting Year	Restricted Stock	RSU	Total Awards
2021	—	1,136,525	1,136,525
2022	35,185	825,630	860,815
2023	—	459,282	459,282
2024	—	4,896	4,896
Total	35,185	2,426,333	2,461,518

At June 30, 2021, we had unrecognized compensation expense of approximately $0.4 million and $25.7 million related to the vesting of restricted stock awards and RSUs, respectively, noted in the table above.

RSU Deliveries

During the six months ended June 30, 2021 and 2020, we delivered 553,008 and 503,251 shares of common stock for 953,397 and 868,157 vested RSUs, respectively. We allow RSU participants to settle their tax liabilities with a reduction of their share delivery from the originally granted and vested RSUs. The amount, when agreed to by the participant, results in a cash payment to the Manager related to this tax liability and a corresponding adjustment to additional paid in capital on our condensed consolidated statement of changes in stockholders' equity. The adjustment was $4.4 million and $6.5 million for the six months ended June 30, 2021 and 2020, respectively. The adjustment is a reduction of capital related to our equity incentive plan and is presented net of increases of capital related to our equity incentive plan in our condensed consolidated statement of changes in stockholders' equity.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Our authorized capital stock consists of 450,000,000 shares of common stock, $0.01 par value per share and 50,000,000 shares of preferred stock, $0.01 par value per share. As of June 30, 2021, 139,884,060 shares of common stock were issued and outstanding, and 6,770,393 shares of 8.00% Fixed-to-Floating Series B Cumulative Redeemable Perpetual Preferred Stock ("Series B Preferred Stock") were issued and outstanding.

Dividends. The following table details our dividend activity:

	Three months ended		Six months ended
Dividends declared per share of:	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Common Stock	$0.35	$0.35	$0.70	$0.75
Series B Preferred Stock	0.50	0.50	1.00	1.00

Common Stock Repurchases. As of June 30, 2021 there was $172.2 million remaining authorized under our stock repurchase program. The following table details our common stock repurchase activity during the three and six months ended June 30, 2021 and 2020:

	Three months ended		Six months ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Shares Repurchased	—	5,495,976	—	5,795,976
Weighted Average Price	—	$7.96	—	$7.96

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesLegal Proceedings. From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. On June 28, 2018, AmBase Corporation, 111 West 57th Street Manager Funding LLC and 111 West 57th Investment LLC commenced an action captioned AmBase Corporation et al v. ACREFI Mortgage Lending, LLC et al (No 653251/2018) in New York Supreme Court (the "Apollo Action"). The complaint names as defendants (i) a wholly owned subsidiary of the Company ("Subsidiary"), (ii) the Company, and (iii) certain funds managed by Apollo, who are co-lenders on a mezzanine loan against the development of a residential condominium building in Manhattan, New York. The plaintiffs

alleged that the defendants tortiously interfered with the contractual equity put right in the plaintiffs’ joint venture agreement with the developers of the project, and that the defendants aided and abetted breaches of fiduciary duty by the developers of the project. The plaintiffs alleged the loss of a $70.0 million investment as part of total damages of $700.0 million, which included punitive damages. The defendants' motion to dismiss was granted on October 23, 2019 and the Court entered judgment dismissing the complaint in its entirety on November 8, 2019. Plaintiffs filed a timely notice of appeal on December 6, 2019 and the parties fully briefed the appeal.

In April 2021, Plaintiffs filed a motion for leave to amend the complaint in a separate action, 111 West 57th Investment LLC v. 111W57 Mezz Investor LLC (No. 655031/2017) in New York Supreme Court (the "April 2021 Action"). The April 2021 Action concerns the same condominium development project as the Apollo Action, and Plaintiffs now seek to name Apollo Global Management, Inc., the Company, and certain funds managed by Apollo as defendants. Plaintiffs then requested to withdraw the pending appeal in the Apollo Action and Apollo has consented, although the Court has not yet marked the appeal off the calendar. We believe the claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

Loan Commitments. As described in "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" at June 30, 2021, we had $1.3 billion of unfunded commitments related to our commercial mortgage and subordinate loans. The timings and amounts of fundings are uncertain as these commitments relate to loans for construction costs, capital expenditures, leasing costs, interest and carry costs, among others. As such, the timings and amounts of future fundings depend on the progress and performance of the underlying assets of our loans. Certain of our lenders are contractually obligated to fund their ratable portion of these loan commitments over time, while other lenders have some degree of discretion over future loan funding obligations. The total unfunded commitment is expected to be funded over the remaining 3.7 years weighted average tenor of these loans.

COVID-19. The COVID-19 global pandemic has brought forth uncertainty and disruption to the global economy. The magnitude and duration of the COVID-19 pandemic and its impact on our borrowers and their tenants, cash flows and future results of operations could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic, the success of actions taken to contain or treat the pandemic, and reactions by consumers, companies, governmental entities and capital markets. The prolonged duration and impact of the COVID-19 pandemic could materially disrupt our business operations and impact our financial performance.

As of June 30, 2021, we have not recorded any contingencies on our condensed consolidated balance sheet related to COVID-19. To the extent COVID-19 continues to cause dislocations in the global economy, our financial condition, results of operations, and cash flows may continue to be adversely impacted. Refer to “Note 2 - Summary of Significant Accounting Policies” for further discussion regarding COVID-19.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The following table presents the carrying value and estimated fair value of our financial instruments not carried at fair value on our condensed consolidated balance sheet at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and cash equivalents	$	204,581	$	204,581	$	325,498	$	325,498
Commercial mortgage loans, net	6,653,197		6,508,986		5,451,084		5,361,948
Subordinate loans and other lending assets, net(1)	866,908		774,257		1,045,893		1,027,582
Secured debt arrangements, net	(3,679,906)		(3,679,906)		(3,436,672)		(3,436,672)
Senior secured term loans, net	(774,569)		(784,112)		(483,465)		(475,263)
Senior secured notes, net	(493,694)		(496,145)		—		—
2022 Notes	(341,720)		(359,904)		(340,361)		(327,381)
2023 Notes	(226,065)		(234,747)		(225,293)		(214,875)
Participations sold	(27,662)		(27,695)		(34,974)		(34,919)
Debt related to real estate owned, held for sale	—		—		(33,000)		(33,000)

———————

(1)Includes subordinate risk retention interests in securitization vehicles with an estimated fair value that approximates their carrying value.

To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, are used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts. Estimates of fair value for cash and cash equivalents, convertible senior notes, net, secured debt arrangements net and senior secured term loan, net are measured using observable Level I inputs as defined in "Note 3 - Fair Value Disclosure." Estimates of fair value for all other financial instruments in the table above are measured using significant estimates, or unobservable Level III inputs as defined in "Note 3 - Fair Value Disclosure."

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Net Income (Loss) per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Net Income (Loss) per Share

Net Income (Loss) per Share

ASC 260, "Earnings per share" requires the use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.

The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding shares of common stock and all potential shares of common stock assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential shares of common stock.

The table below presents the computation of basic and diluted net income per share of common stock for the three and six months ended June 30, 2021 and 2020 ($ in thousands except per share data): 

	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020
Basic Earnings
Net income (loss)	$	67,691	$	60,201	$	126,026	$	(67,641)
Less: Preferred dividends	(3,385)		(3,385)		(6,770)		(6,770)
Net income (loss) available to common stockholders	$	64,306	$	56,816	$	119,256	$	(74,411)
Less: Dividends on participating securities	(849)		(719)		(1,697)		(1,521)
Basic Earnings	$	63,457	$	56,097	$	117,559	$	(75,932)
Diluted Earnings
Basic Earnings	$	63,457	$	56,097	$	117,559	$	(75,932)
Add: Dividends on participating securities	849		719		1,697		—
Add: Interest expense on Convertible Notes	8,261		8,678		16,506		—
Diluted Earnings	$	72,567	$	65,494	$	135,762	$	(75,932)
Number of Shares:
Basic weighted-average shares of common stock outstanding	139,884,060		151,523,513		139,845,178		152,735,852
Diluted weighted-average shares of common stock outstanding	170,832,186		182,083,702		170,812,544		152,735,852
Earnings Per Share Attributable to Common Stockholders
Basic	$	0.45	$	0.37	$	0.84	$	(0.50)
Diluted	$	0.42	$	0.36	$	0.79	$	(0.50)

The dilutive effect to earnings per share is determined using the "if-converted" method whereby interest expense on the outstanding Convertible Notes is added back to the diluted earnings per share numerator and all of the potentially dilutive shares are included in the diluted earnings per share denominator. For the three and six months ended June 30, 2021,

28,533,271 weighted-average potentially issuable shares with respect to the Convertible Notes were included in the dilutive earnings per share denominator. For the six months ended June 30, 2020, all of the potentially issuable shares with respect to the Convertible Notes were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive while for the three months ended June 30, 2020 the same number of potentially issuable shares were included in the calculation of diluted net income per share because the effect was dilutive. Refer to "Note 10 - Convertible Senior Notes, Net" for further discussion.

For the three and six months ended June 30, 2021, 2,414,855 and 2,434,095 weighted-average unvested RSUs, respectively, were included in the dilutive earnings per share denominator. For the six months ended June 30, 2020, 2,017,080 weighted-average unvested RSUs were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive, while for the three months ended June 30, 2020, 2,026,918 weighted-average unvested RSUs were included in the calculation of diluted net income per share because the effect was dilutive.

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Subsequent to the quarter ended June 30, 2021, the following events took place:

Investment activity: We committed capital of $441 million ($141 million of which was funded at closing) of a first mortgage loan. In addition, we funded approximately $32 million for previously closed loans.

Loan Repayments: We received approximately $297.3 million from loan repayments, including full repayments on two first mortgage loans.

Preferred Equity Exchange: On July 15, 2021, we exchanged all 6,770,393 shares outstanding of our Series B Preferred Stock for 6,770,393 shares of 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, with a liquidation preference of $25.00 per share, pursuant to an exchange agreement with the two existing shareholders.

Loan Update: We own three mezzanine loans which had an aggregate carrying value at June 30, 2021 of $423 million (inclusive of $297 million of principal and $124 million of PIK interest) and are secured by the same residential-for-sale property currently under construction in Manhattan, NY. These loans include (i) a $230 million senior mezzanine loan (“Senior Mezzanine Loan”), (ii) a $112 million junior mezzanine loan (Junior Mezzanine A Loan), and (iii) an $81 million junior mezzanine loan (“Junior Mezzanine B Loan”), Junior Mezzanine A Loan and Junior Mezzanine B Loan, collectively referred to as “Junior Mezzanine Loan”.

Subsequent to June 30, 2021, a vehicle managed by an affiliate of the Manager (the "Seller") transferred its Junior Mezzanine B Loan position to the Company and in connection with this transfer, one of the property’s subordinate capital providers paid the Seller a price representing the Seller’s original principal balance on the Junior Mezzanine B Loan position with the Seller agreeing to forego its accrued interest on the Junior Mezzanine B Loan.

In conjunction with this transaction, the Company and the subordinate capital provider have agreed to a waterfall sharing arrangement pursuant to which rather than the Company receiving interest it otherwise would have been entitled to after July 1, 2021 on the Junior Mezzanine Loan, proceeds received from the sale or refinance of the underlying collateral, after repayment to priority lenders under the waterfall, will be shared between the Company and the subordinate capital provider at an agreed upon allocation.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss allowances. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 ("Annual Report"), as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other future period.

Real Estate Owned (and related debt)

Real Estate Owned (and related debt)

In order to maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or the execution of a deed in lieu of foreclosure. Foreclosed properties are generally recognized at fair value and the assets and liabilities are presented separately when legal title or physical possession is assumed. If the fair value of the real estate is lower than the carrying value of the loan, the difference, along with any previously recorded Specific CECL Allowances, are recorded as a realized loss on investments in the consolidated statement of operations.

Acquisition of real estate is accounted for using the acquisition method under Accounting Standards Codification ("ASC")

Topic 805, "Business Combinations." We recognize and measure identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree, if applicable, based on their relative fair values. If applicable, we recognize and measure intangible assets and expense acquisition-related costs in the periods in which the costs are incurred and the services are received.

We evaluate real estate owned, held for sale for subsequent decrease in fair value, which is recorded as an impairment. Real estate owned is classified as held for sale in the period in which the six criteria under ASC Topic 360, "Property, Plant, and Equipment" are met: (1) we commit to a plan and have the authority to sell the asset; (2) the asset is available for sale in its current condition; (3) we have initiated an active marketing plan to locate a buyer for the asset; (4) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months; (5) the asset is being actively marketed for sale at a price that is reflective of its current fair value; and (6) we do not anticipate changes to our plan to sell the asset. Once a real estate asset is classified as held for sale, depreciation expense is no longer recorded.

Real estate assets that are acquired for investment are assumed at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges, if any. Upon acquisition, we allocate the value of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment, and intangible assets, if applicable. Real estate assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and up to 8 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred.

Real estate assets are evaluated for impairment on a quarterly basis. We consider the following factors when performing our impairment analysis: (1) Management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) our ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, we make certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon our estimate of a capitalization rate and discount rate.

Revenue Recognition

Interest income on our lending assets is accrued based on the actual coupon rate adjusted for accretion of any purchase discounts, the amortization of any purchase premiums and the accretion of any deferred fees, in accordance with GAAP. Loans that are significantly past due may be placed on non-accrual if we determine it is probable that we will not collect all payments which are contractually due. When a loan is placed on non-accrual, interest is only recorded as interest income when it's received. Under certain circumstances, we may apply cost recovery under which interest collected on a loan is a reduction to its amortized cost. The cost recovery method will no longer apply if collection of all principal and interest is reasonably assured. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due.

Operating revenue from real estate owned that is a hotel property represents revenue associated with the operations of the hotel property. Revenue from the operation of the hotel property is recognized when guestrooms are occupied or services have been rendered. Revenues are recorded net of any discounts and sales and other taxes collected from customers. Revenues consist of room sales, food and beverage sales and other hotel revenues.

Gains or losses on the sale of real estate assets, including residential property, are recognized in accordance with ASC 610-20, "Gains and Losses from the Derecognition of Nonfinancial Assets". We primarily use specific identification method to allocate costs.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06 "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity" ("ASU 2020-06"). The intention of ASU 2020-06 is to address the complexities in accounting for certain financial instruments with a debt and equity component. Under ASU 2020-06, the number of accounting models for convertible notes will be reduced and entities that issue convertible debt will be required to use the if-converted method for the computation of diluted "Earnings per share" under ASC 260. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 and may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. We are currently assessing the impact this guidance will have on our

condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to debt instruments, derivatives, and other contracts that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This guidance is optional and may be elected through December 31, 2022 using a prospective application on all eligible contract modifications. We have loan agreements, debt agreements, and an interest rate cap that incorporate LIBOR as a referenced interest rate. It is difficult to predict what effect, if any, the phase-out of LIBOR and the use of alternative benchmarks may have on our business or on the overall financial markets. We have not adopted any of the optional expedients or exceptions through June 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions.

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Fair Value Disclosure (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Levels in Fair Value Hierarchy of Financial Instruments

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with recurring fair value measurements were categorized as of June 30, 2021 and December 31, 2020 ($ in thousands): 

	Fair Value as of June 30, 2021								Fair Value as of December 31, 2020
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Recurring fair value measurements:
Foreign currency forward, net	$	—	$	(22,894)	$	—	$	(22,894)	$	—	$	(31,375)	$	—	$	(31,375)
Interest rate cap asset	—		380		—		380		—		134		—		134
Total financial instruments	$	—	$	(22,514)	$	—	$	(22,514)	$	—	$	(31,241)	$	—	$	(31,241)

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with non-recurring fair value measurements were categorized as of June 30, 2021 and December 31, 2020 ($ in thousands): 

	Fair Value as of June 30, 2021								Fair Value as of December 31, 2020
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Non-Recurring fair value measurements:
Real estate owned	$	—	$	—	$	154,300	$	154,300	$	—	$	—	$	—	$	—
Real estate owned, held for sale	—		—		—		—		—		—		42,905		42,905
Debt related to real estate owned, held for sale	—		—		—		—		—		—		(33,000)		(33,000)
Net real estate owned and related debt	$	—	$	—	$	154,300	$	154,300	$	—	$	—	$	9,905	$	9,905

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net (Tables)

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Schedule of Loan Portfolio

Our loan portfolio was comprised of the following at June 30, 2021 and December 31, 2020 ($ in thousands):

Loan Type	June 30, 2021		December 31, 2020
Commercial mortgage loans, net (1)	$	6,653,197	$	5,451,084
Subordinate loans and other lending assets, net	866,908		1,045,893
Carrying value, net	$	7,520,105	$	6,496,977

  ———————

(1)Includes $146.5 million and $136.1 million in 2021 and 2020, respectively, of contiguous financing structured as subordinate loans.

Schedule of Activity Related to Loan Investment Portfolio

Activity relating to our loan portfolio, for the six months ended June 30, 2021, was as follows ($ in thousands):

	Principal Balance		Deferred Fees/Other Items (1)		Specific CECL Allowance		Carrying Value, Net(2)
December 31, 2020	$	6,728,424	$	(18,345)	$	(175,000)	$	6,535,079
New loan fundings	1,322,016		—		—		1,322,016
Add-on loan fundings (3)	264,486		—		—		264,486
Loan repayments and sales	(552,651)		—		—		(552,651)
Gain (loss) on foreign currency translation	(5,027)		166		—		(4,861)
Specific CECL Allowance	—		—		30,000		30,000
Realized loss on investment	(20,000)		—		—		(20,000)

Transfer to real estate owned	(45,448)		159		—		(45,289)
Deferred fees	—		(17,061)		—		(17,061)
PIK interest and amortization of fees	34,502		12,083		—		46,585
June 30, 2021	$	7,726,302	$	(22,998)	$	(145,000)	$	7,558,304
General CECL Allowance (4)							(38,199)
Carrying value, net							$	7,520,105

———————

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

(2)December 31, 2020 carrying value excludes General CECL Allowance.

(3)Represents fundings for loans closed prior to 2021.

(4)$2.4 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Schedule of Overall Statistics for the Loan Portfolio

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	June 30, 2021			December 31, 2020
Number of loans	68			67
Principal balance	$	7,726,302		$	6,728,424
Carrying value, net	$	7,520,105		$	6,496,977
Unfunded loan commitments (1)	$	1,258,306		$	1,399,989
Weighted-average cash coupon (2)	5.4		%	5.7		%
Weighted-average remaining fully-extended term (3)	2.8 years			2.8 years
Weighted-average expected term (4)	2.1 years			2.1 years

———————

(1)Unfunded loan commitments are funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(2)For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on non-accrual or cost recovery the interest rate used in calculating weighted-average cash coupon is 0%.

(3)Assumes all extension options are exercised.

(4)Expected term represents our estimated timing of repayments as of June 30, 2021 and December 31, 2020, respectively. Excludes risk-rated 5 loans.

Schedule of Mortgage Loans on Real Estate

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	June 30, 2021				December 31, 2020
Property Type	Carrying Value		% of Portfolio(1)		Carrying Value		% of Portfolio(1)
Office	$	1,969,597	26.1	%	$	1,911,145	29.2	%
Hotel	1,520,275		20.1		1,576,369		24.1
Residential-for-sale	835,187		11.0		982,838		15.0
Urban Retail	820,466		10.9		655,456		10.0
Industrial	672,537		8.9		228,918		3.5
Mixed Use	238,702		3.2		217,160		3.3
Healthcare	367,120		4.9		369,676		5.7
Urban Predevelopment	52,520		0.7		298,909		4.6
Other	1,081,900		14.2		294,608		4.6
Total	$	7,558,304	100.0	%	$	6,535,079	100.0	%
General CECL Allowance (2)	(38,199)				(38,102)
Carrying value, net	$	7,520,105			$	6,496,977

———————

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)$2.4 million and $3.4 million of the General CECL Allowance for 2021 and 2020, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Geography

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	June 30, 2021				December 31, 2020
Geographic Location	Carrying Value		% of Portfolio(1)		Carrying Value		% of Portfolio(1)
New York City	$	2,355,270	31.2	%	$	2,370,337	36.3	%
United Kingdom	1,637,480		21.7		1,263,264		19.3
Midwest	737,492		9.8		552,537		8.5
Southeast	655,490		8.7		581,301		8.9
West	552,475		7.3		749,985		11.5
Northeast	138,952		1.8		103,567		1.6
Other	1,481,145		19.5		914,088		13.9
Total	$	7,558,304	100.0	%	$	6,535,079	100.0	%
General CECL Allowance (2)	(38,199)				(38,102)
Carrying value, net	$	7,520,105			$	6,496,977

———————

(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)$2.4 million and $3.4 million of the General CECL Allowance for 2021 and 2020, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

Schedule of Carrying Value of Loan Portfolio Based on Internal Risk Ratings

The following tables allocate the carrying value of our loan portfolio based on our internal risk ratings and date of origination at the dates indicated ($ in thousands):

June 30, 2021
						Year Originated
Risk Rating	Number of Loans	Total		% of Portfolio		2021		2020		2019		2018		2017		Prior
1	—	$	—	—	%	$	—	$	—	$	—	$	—	$	—	$	—
2	1	32,000		0.4	%	—		—		—		—		—		32,000
3	63	7,048,000		93.2	%	1,309,620		486,189		2,680,262		1,202,436		672,655		696,838
4	1	81,060		1.1	%	—		—		—		—		81,060		—
5	3	397,244		5.3	%	—		—		—		—		172,652		224,592

Total	68	$	7,558,304	100.0	%	$	1,309,620	$	486,189	$	2,680,262	$	1,202,436	$	926,367	$	953,430
General CECL Allowance		(38,199)
Total carrying value, net		$	7,520,105
Weighted Average Risk Rating				3.1

December 31, 2020
						Year Originated
Risk Rating	Number of Loans	Total		% of Portfolio		2020		2019		2018		2017		2016		Prior
1	—	$	—	—	%	$	—	$	—	$	—	$	—	$	—	$	—
2	1	32,000		0.5	%	—		—		—		—		—		32,000
3	62	6,129,541		93.8	%	469,586		2,661,017		1,398,479		868,514		88,710		643,235
4	—	—		—	%	—		—		—		—		—		—
5	4	373,538		5.7	%	—		—		—		131,050		115,419		127,069
Total	67	$	6,535,079	100.0	%	$	469,586	$	2,661,017	$	1,398,479	$	999,564	$	204,129	$	802,304
General CECL Allowance		(38,102)
Total carrying value, net		$	6,496,977
Weighted Average Risk Rating				3.1

Financing Receivable Cost Recovery

The following table summarizes the loans with Specific CECL Allowances that have been recorded on our portfolio as of June 30, 2021 ($ in thousands):

Type	Property type	Location	Amortized cost prior to Specific CECL Allowance	Specific CECL Allowance(1)	Amortized cost	Interest recognition status/ as of date
Mortgage
	Multifamily Development(2)(3)	Brooklyn, NY	$182,652	$10,000	$172,652	Cost Recovery/ 3/1/2020
	Urban Predevelopment(2)(4)	Miami, FL	187,135	68,000	119,135	Cost Recovery/ 3/1/2020
	Retail Center(5)(6)	Cincinnati, OH	172,457	67,000	105,457	Cost Recovery/ 10/1/2019
Mortgage total:			$542,244	$145,000	$397,244

———————

(1)During the three and six months ended June 30, 2021 we reversed $30.0 million of previously recorded Specific CECL Allowances. This is comprised of a $20.0 million reversal as discussed below and the realization of $10.0 million that was a previously recorded Specific CECL Allowance.

(2)The fair value of this collateral was determined by assuming rent per square foot ranging from $50 to $215 and a capitalization rate ranging from 5.5% to 5.0%.

(3)During the three months ended June 30, 2021, $20.0 million of previously recorded Specific CECL Allowance was reversed primarily related to a more favorable market outlook as compared to when the Specific CECL Allowance was first recorded with respect to the loan.

(4)In October 2020, we entered into a joint venture which owns the underlying properties that secure our $180.5 million first mortgage loan. The entity in which we own an interest, and which owns the underlying properties was deemed to be a variable interest entity ("VIE") and we determined that we are not the primary beneficiary of that VIE. The related profit and loss from the joint venture was immaterial for the three and six months ended June 30, 2021.

(5)The fair value of retail collateral was determined by applying a capitalization rate of 8.3%.

(6)The entity, in which we own an interest and which owns the underlying property, was deemed to be a VIE and we determined that we are not the primary beneficiary of that VIE. As of June 30, 2021 we had recorded $67.0 million of Specific CECL Allowance. During the three and six months ended June 30, 2021, $0.4 million and $0.8 million, respectively, of interest paid was applied towards reducing the carrying value of the loan.

Schedule of CECL Reserves

The following schedule sets out our General CECL Allowance as of June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021		December 31, 2020
Commercial mortgage loans, net	$	20,191	$	17,012
Subordinate loans and other lending assets, net	18,008		21,090
Unfunded commitments(1)	2,444		3,365
Total General CECL Allowance	$	40,643	$	41,467

 ———————

(1)The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities

The following schedule illustrates the quarterly changes in CECL Allowances for the six months ended June 30, 2021 and 2020, respectively ($ in thousands):

		Specific CECL Allowance		General CECL Allowance						Total CECL Allowance		CECL Allowance as % of Amortized Cost
				Funded		Unfunded		Total				General		Total
December 31, 2020		$	175,000	$	38,102	$	3,365	$	41,467	$	216,467	0.67	%	3.23	%
Changes:
	Q1 Allowance (Reversals)	—		(1,667)		429		(1,238)		(1,238)
March 31, 2021		$	175,000	$	36,435	$	3,794	$	40,229	$	215,229	0.62	%	3.06	%
Changes:
	Q2 Allowance (Reversals)	(20,000)		1,764		(1,350)		414		(19,586)
	Write-offs	(10,000)		—		—		—		(10,000)
June 30, 2021		$	145,000	$	38,199	$	2,444	$	40,643	$	185,643	0.57	%	2.41	%

		Specific CECL Allowance(1)		General CECL Allowance						Total CECL Allowance		CECL Allowance as % of Amortized Cost
				Funded		Unfunded		Total				General		Total
December 31, 2019		$	56,981	$	—	$	—	$	—	$	56,981	—	%	—	%
Changes:
	January 1, 2020 - Adoption of CECL Standard	—		27,779		3,088		30,867		30,867
	Q1 Allowances	150,000		30,494		2,971		33,465		183,465
March 31, 2020		$	206,981	$	58,273	$	6,059	$	64,332	$	271,313	1.08	%	4.05	%
Changes:
	Q2 Allowances (Reversals)	5,500		(13,729)		(1,940)		(15,669)		(10,169)
	Write-offs	(15,000)		—		—		—		(15,000)
June 30, 2020		$	197,481	$	44,544	$	4,119	$	48,663	$	246,144	0.81	%	3.71	%

———————

(1)As of December 31, 2019, amount represents specific loan loss provisions recorded on assets before the adoption of the CECL Standard. After the adoption of the CECL Standard on January 1, 2020, amounts represent Specific CECL Allowances.

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Real Estate Owned and Related Debt (Tables)

6 Months Ended

Jun. 30, 2021

Real Estate [Abstract]

Schedule of Business Acquisitions

On May 24, 2021, in accordance with ASC 805, "Business Combinations," we allocated the fair value of the hotel’s assets and liabilities. On June 29, 2021, we repaid the $110.0 million mortgage loan against the property. Below are the hotel's assets and liabilities as of May 24 and June 30, 2021, which are designated as real estate owned on our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		May 24, 2021
Assets:
Cash	$	3,245	$	4,148
Buildings	86,871		86,871
Land	58,742		58,742
Furniture, fixtures, and equipment	8,687		8,687
Accumulated depreciation	(452)		—
Other Assets	1,579		1,555
Total Assets	$	158,672	$	160,003
Liabilities:
Debt related to real estate owned(1)	$	—	$	110,073
Accounts payable, accrued expenses and other liabilities	5,138		4,641
Total Liabilities	$	5,138	$	114,714
Net Real Estate Assets	$	153,534	$	45,289

———————

(1)$110 million first mortgage loan was repaid on June 29, 2021.

Real Estate Investment Financial Statements, Disclosure

For the three and six months ended June 30, 2021, we recorded the operating revenue, expenses and fixed asset depreciation and amortization in its condensed consolidated income statement as shown below ($ in thousands):

	Three and six months ended
	June 30, 2021
Operations related to real estate owned:
Revenue from operations	$	1,374
Operating expenses	(1,994)
Depreciation and amortization	(452)
Net loss from real estate owned	$	(1,072)

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Components of Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	June 30, 2021		December 31, 2020
Interest receivable	$	39,411	$	40,559
Collateral deposited under derivative agreements	29,680		28,320
Loan proceeds held by servicer	5,053		5,649
Other(1)	1,686		112
Total	$	75,830	$	74,640

———————

(1)Includes $1.6 million of other assets on the balance sheet of the real estate owned at June 30, 2021. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

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Secured Debt Arrangements, Net (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Weighted Average Maturities and Interest Rates of Borrowings

At June 30, 2021 and December 31, 2020, our borrowings included the following secured debt arrangements, maturities and weighted-average interest rates ($ in thousands):

	June 30, 2021					December 31, 2020
	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)		Maturity (2)	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)		Maturity (2)
JPMorgan (USD)	$	1,113,966	$	1,069,071	June 2024	$	1,113,156	$	984,125	June 2024
JPMorgan (GBP)	114,886		114,886		June 2024	113,548		113,548		June 2024
JPMorgan (EUR)	71,148		71,148		June 2024	73,296		73,296		June 2024
DB (USD)	700,000		413,325		March 2023	1,000,000		520,457		March 2023
Goldman (USD)	500,000		133,955		November 2023(3)	500,000		332,352		November 2023(3)
CS Facility - USD	189,219		189,219		July 2024(4)(5)	374,251		369,182		December 2023(4)(5)
HSBC Facility - EUR	169,930		169,930		July 2022	163,785		163,785		July 2021
Barclays (USD)	200,000		32,693		March 2024	200,000		35,192		March 2024
Total Secured Credit Facilities	3,059,149		2,194,227			3,538,036		2,591,937
Barclays Private Securitization	1,495,432		1,495,432		September 2023(5)	857,728		857,728		September 2023(5)
Total Secured Debt Arrangements	4,554,581		3,689,659			4,395,764		3,449,665
Less: deferred financing costs	N/A		(9,753)			N/A		(12,993)
Total Secured Debt Arrangements, net(6)(7)(8)	$	4,554,581	$	3,679,906		$	4,395,764	$	3,436,672

———————

(1)As of June 30, 2021, British Pound Sterling ("GBP"), Euros ("EUR"), and Swedish Krona ("SEK") borrowings were converted to USD at a rate of 1.38, 1.19, and 0.12, respectively. As of December 31, 2020, GBP and EUR borrowings were converted to USD at a rate of 1.37 and 1.22, respectively.

(2)Maturity date assumes extensions at our option are exercised with consent of financing providers, where applicable.

(3)Assumes facility enters the amortization period described below.

(4)Assumes financings are extended in line with the underlying loans.

(5)Represents weighted average maturity across various financings with the counterparty. See below for additional details.

(6)Weighted-average borrowing costs as of June 30, 2021 and December 31, 2020 were USD L+2.00% / GBP L+2.03% / EUR L+1.43% / SEK L+1.50% and USD L+2.16% / GBP L+1.83% / EUR L+1.46%, respectively.

(7)Weighted average advance rates based on cost as of June 30, 2021 and December 31, 2020 were 67.2% (64.8% (USD) / 68.8% (GBP) / 67.6% (EUR) / 80.8% (SEK)) and 63.7% (62.5% (USD) / 68.7% (GBP) / 60.8% (EUR)).

(8)As of June 30, 2021 and December 31, 2020, approximately 54% and 55% of the outstanding balance under these secured borrowings were recourse to us.

Schedule of Assets Under the Private Barclays Securitization

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of June 30, 2021 ($ in thousands):

	Borrowings outstanding	Fully-Extended Maturity(1)
Total/Weighted-Average GBP	$881,976	August 2024
Total/Weighted-Average EUR	370,492	June 2022(2)
Total/Weighted-Average SEK	242,964	May 2022
Total/Weighted-Average Securitization	$1,495,432	September 2023

———————

(1)Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(2)The EUR portion of the Barclays Private Securitization has an "evergreen" feature such that the facility continues for one year and can be terminated by either party on certain dates with, depending on the date of notice, a minimum of nine to twelve months' notice.

The following table summarizes the terms of our Term Loans as of June 30, 2021 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	490,000	$	(1,726)	$	(6,280)	$	481,994	2.75	%	5/15/2026
2028 Term Loan	299,250		(2,857)		(3,818)		292,575		3.50	%	3/11/2028
Total	$	789,250	$	(4,583)	$	(10,098)	$	774,569

The following table summarizes the terms of our Term Loans as of December 31, 2020 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	492,500	$	(1,905)	$	(7,130)	$	483,465	2.75	%	5/15/2026

Schedule of Assets and Liabilities

The table below provides the assets and liabilities of the Barclays Private Securitization VIE included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Assets:
Cash	$	1,955	$	2,020
Commercial mortgage loans, net(1)	2,110,376		1,290,393
Other Assets	17,119		15,831
Total Assets	$	2,129,450	$	1,308,244
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $2.2 million and $0.7 million in 2021 and 2020, respectively)	$	1,493,222	$	857,043
Accounts payable, accrued expenses and other liabilities(2)	2,228		1,307
Total Liabilities	$	1,495,450	$	858,350

———————

(1)Net of the General CECL Allowance of $10.2 million and $4.4 million as of June 30, 2021 and December 31, 2020, respectively.

(2)Represents General CECL Allowance related to unfunded commitments on commercial mortgage loans, net of $0.4 million and $0.3 million as of June 30, 2021 and December 31, 2020, respectively.

Interest Income and Interest Expense Disclosure

The table below provides the net income of the Barclays Private Securitization VIE included in our condensed consolidated statement of operations ($ in thousands):

	Three months ended		Six months ended
	June 30, 2021		June 30, 2021
Net Interest Income:
Interest income from commercial mortgage loans	$	20,943	$	37,036
Interest expense	(6,396)		(10,986)
Net interest income	$	14,547	$	26,050
General and administrative expense	—		(1)
Provision for loan losses and impairments	(2,040)		(5,668)
Foreign currency gain	2,802		1,890
Net Income	$	15,309	$	22,271

Schedule of Remaining Maturities of Borrowings

At June 30, 2021, our borrowings had the following remaining maturities ($ in thousands):

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	121,115	$	1,133,991	$	—	$	—	$	1,255,106
DB Facility	—		413,325		—		—		413,325
Goldman Facility	133,955		—		—		—		133,955
CS Facility - USD	—		40,500		148,719		—		189,219
HSBC Facility - EUR	—		169,930		—		—		169,930
Barclays Facility - USD	—		32,693		—		—		32,693
Barclays Private Securitization	613,455		550,784		331,192		—		1,495,431
Total	$	868,525	$	2,341,223	$	479,911	$	—	$	3,689,659

Schedule of Outstanding, Maximum and Average Balances of Debt

The table below summarizes the outstanding balances at June 30, 2021, as well as the maximum and average month-end balances for the six months ended June 30, 2021 for our borrowings under secured debt arrangements ($ in thousands).

	As of June 30, 2021				For the six months ended June 30, 2021
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,255,105	$	2,018,979	$	1,359,053	$	1,191,150
DB Facility	413,325		610,654		520,217		463,607
Goldman Facility	133,955		202,812		331,154		293,899
CS Facility - USD	189,219		271,691		369,182		266,233
HSBC Facility - EUR	169,930		214,185		174,717		165,863
Barclays Facility - USD	32,693		50,121		35,193		34,359
Barclays Private Securitization	1,495,432		2,120,617		1,495,432		1,190,667
Total	$	3,689,659	$	5,489,059

The table below summarizes the outstanding balances at December 31, 2020, as well as the maximum and average month-end balances for the year ended December 31, 2020 for our borrowings under secured debt arrangements ($ in thousands).

	As of December 31, 2020				For the year ended December 31, 2020
	Balance		Amortized Cost of Collateral		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,170,969	$	2,009,249	$	1,192,288	$	1,119,997
DB Facility	520,457		814,715		526,743		506,831
Goldman Facility	332,352		510,371		362,139		343,621
CS Facility - USD	369,182		524,139		378,781		348,464
CS Facility - GBP	—		—		90,111		43,094
HSBC Facility - USD	—		—		50,625		44,000
HSBC Facility - GBP	—		—		34,500		20,563
HSBC Facility - EUR	163,785		215,509		163,788		154,725
Barclays Facility - USD	35,192		49,993		35,193		29,327
Barclays Facility - GBP	—		—		666,810		260,692
Barclays Facility - EUR	—		—		180,595		70,521
Barclays Private Securitization	857,728		1,295,023		857,728		823,915
Total	$	3,449,665	$	5,418,999

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Senior Secured Term Loan, Net (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of June 30, 2021 ($ in thousands):

	Borrowings outstanding	Fully-Extended Maturity(1)
Total/Weighted-Average GBP	$881,976	August 2024
Total/Weighted-Average EUR	370,492	June 2022(2)
Total/Weighted-Average SEK	242,964	May 2022
Total/Weighted-Average Securitization	$1,495,432	September 2023

———————

(1)Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(2)The EUR portion of the Barclays Private Securitization has an "evergreen" feature such that the facility continues for one year and can be terminated by either party on certain dates with, depending on the date of notice, a minimum of nine to twelve months' notice.

The following table summarizes the terms of our Term Loans as of June 30, 2021 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	490,000	$	(1,726)	$	(6,280)	$	481,994	2.75	%	5/15/2026
2028 Term Loan	299,250		(2,857)		(3,818)		292,575		3.50	%	3/11/2028
Total	$	789,250	$	(4,583)	$	(10,098)	$	774,569

The following table summarizes the terms of our Term Loans as of December 31, 2020 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount		Deferred Financing Costs		Carrying Value		Spread		Maturity Date
2026 Term Loan	$	492,500	$	(1,905)	$	(7,130)	$	483,465	2.75	%	5/15/2026

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Convertible Senior Notes, Net (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Convertible Senior Notes

The following table summarizes the terms of the Convertible Notes as of June 30, 2021 ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.15
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.29
Total	$	575,000

The following table summarizes the terms of the Convertible Notes as of December 31, 2020 ($ in thousands):

	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.65
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.79
Total	$	575,000

———————

(1)Effective rate includes the effect of the adjustment for the conversion option (See footnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2)We have the option to settle any conversions in cash, shares of common stock or a combination thereof. The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Convertible Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Non-Designated Foreign Exchange Forwards

The following table summarizes our non-designated foreign exchange ("Fx") forwards and our interest rate cap as of June 30, 2021:

	June 30, 2021
Type of Derivatives	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx contracts - GBP	100	561,586	GBP	July 2021 - February 2026	1.69
Fx contracts - EUR	74	286,660	EUR	August 2021 - November 2025	2.22
Fx contracts - SEK	23	801,518	SEK	August 2021 - May 2026	4.06
Interest rate cap	1	500,000	USD	June 2023	1.96

The following table summarizes our non-designated Fx forwards and our interest rate cap as of December 31, 2020:

	December 31, 2020
Type of Derivatives	Number of Contracts	Aggregate Notional Amount (in thousands)	Notional Currency	Maturity	Weighted-Average Years to Maturity
Fx contracts - GBP	93	428,493	GBP	January 2021 - December 2024	2.04
Fx contracts - EUR	69	239,466	EUR	February 2021 - August 2024	2.61
Fx contracts - SEK	N/A	0	N/A	N/A	N/A
Interest rate cap	1	500,000	USD	June 2023	2.49

Schedule of Amounts Recognized on Consolidated Statements of Operations Related to Company's Derivatives

The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our derivatives for the three and six months ended June 30, 2021, and 2020 ($ in thousands):

		Amount of gain (loss) recognized in income
		Three months ended June 30,				Six months ended June 30,
	Location of Gain (Loss) Recognized in Income	2021		2020		2021		2020
Forward currency contracts	Unrealized gain (loss) on derivative instruments	$	(2,021)	$	(9,004)	$	8,481	$	53,432
Forward currency contracts	Realized gain (loss) on derivative instruments	(1,073)		6,009		(1,775)		14,064
Total		$	(3,094)	$	(2,995)	$	6,706	$	67,496

		Amount of gain (loss) recognized in income
		Three months ended June 30,				Six months ended June 30,
	Location of Gain (Loss) Recognized in Income	2021		2020		2021		2020
Interest rate cap(1)	Unrealized (loss) gain on interest rate cap	$	(111)	$	738	$	246	$	738
Interest rate swap(2)	Unrealized gain on interest rate swap	—		50,018		—		14,470
Interest rate swap(2)	Realized loss on interest rate swap	—		(53,851)		—		(53,851)
Total		$	(111)	$	(3,095)	$	246	$	(38,643)

———————

(1)With a notional amount of $500 million at June 30, 2021 and 2020.

(2)With a notional amount of $0 at June 30, 2021 and 2020.

Schedule of Gross Asset and Liability Amounts Related to Derivatives

The following tables summarize the gross asset and liability amounts related to our derivatives at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021						December 31, 2020
	Gross Amount of Recognized Liability		Gross Amounts Offset in our Condensed Consolidated Balance Sheet		Net Amounts of Liability Presented in our Condensed Consolidated Balance Sheet		Gross Amount of Recognized Liabilities		Gross Amounts Offset in our Condensed Consolidated Balance Sheet		Net Amounts of Liabilities Presented in our Condensed Consolidated Balance Sheet
Forward currency contracts	$	28,472	$	(5,578)	$	22,894	$	32,172	$	(797)	$	31,375
Interest rate cap	—		(380)		(380)		—		(134)		(134)
Total derivative liabilities	$	28,472	$	(5,958)	$	22,514	$	32,172	$	(931)	$	31,241

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Participations Sold (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Participating Mortgage Loans

The table below details participations sold included in our condensed consolidated balance sheet ($ in thousands):

	June 30, 2021		December 31, 2020
Participation sold on Commercial mortgage loans	$	27,662	$	9,217
Participation sold on Subordinate loans and other lending assets (1)	—		25,757
Total Participations sold	$	27,662	$	34,974

———————

(1)Includes $0 and $0.8 million of PIK interest in 2021 and 2020, respectively.

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Accounts Payable, Accrued Expenses and Other Liabilities (Tables)

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Schedule of Accounts Payable, Accrued Expense and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	June 30, 2021		December 31, 2020
Accrued dividends payable	$	52,635	$	52,768
Accrued interest payable	14,695		13,979
Accounts payable and other liabilities(1)	12,792		4,775
General CECL Allowance on unfunded commitments(2)	2,444		3,365
Collateral deposited under derivative agreements	1,620		—
Total	$	84,186	$	74,887

  ———————

(1)Includes $5.1 million of accounts payable and other liabilities on the balance sheet of the real estate owned at June 30, 2021. Refer to "Note 5 – Real Estate Owned and Related Debt" for additional information.

(2)Refer to "Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net" for additional disclosure related to the General CECL Allowance on unfunded commitments for the six months ended June 30, 2021 and 2020, respectively.

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Share-Based Payments (Tables)

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Summary of Grants, Exchanges and Forfeitures of Restricted Stock and RSUs

The following table summarizes the grants, vesting and forfeitures of restricted common stock and RSUs during the six months ended June 30, 2021:

	Type	Restricted Stock	RSUs	Grant Date Fair Value ($ in millions)
Outstanding at December 31, 2020		82,235	2,455,853
	Granted	35,185	14,685	$	0.2
	Vested	(82,235)	—	N/A
	Forfeiture	—	(44,205)	N/A
Outstanding at June 30, 2021		35,185	2,426,333

Below is a summary of restricted stock and RSU vesting dates as of June 30, 2021: 

Vesting Year	Restricted Stock	RSU	Total Awards
2021	—	1,136,525	1,136,525
2022	35,185	825,630	860,815
2023	—	459,282	459,282
2024	—	4,896	4,896
Total	35,185	2,426,333	2,461,518

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Schedule of Dividends Activity

The following table details our dividend activity:

	Three months ended		Six months ended
Dividends declared per share of:	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Common Stock	$0.35	$0.35	$0.70	$0.75
Series B Preferred Stock	0.50	0.50	1.00	1.00

Common Stock Repurchases

As of June 30, 2021 there was $172.2 million remaining authorized under our stock repurchase program. The following table details our common stock repurchase activity during the three and six months ended June 30, 2021 and 2020:

	Three months ended		Six months ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
Shares Repurchased	—	5,495,976	—	5,795,976
Weighted Average Price	—	$7.96	—	$7.96

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Carrying Value and Estimated Fair Value of Company's Financial Instruments

The following table presents the carrying value and estimated fair value of our financial instruments not carried at fair value on our condensed consolidated balance sheet at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash and cash equivalents	$	204,581	$	204,581	$	325,498	$	325,498
Commercial mortgage loans, net	6,653,197		6,508,986		5,451,084		5,361,948
Subordinate loans and other lending assets, net(1)	866,908		774,257		1,045,893		1,027,582
Secured debt arrangements, net	(3,679,906)		(3,679,906)		(3,436,672)		(3,436,672)
Senior secured term loans, net	(774,569)		(784,112)		(483,465)		(475,263)
Senior secured notes, net	(493,694)		(496,145)		—		—
2022 Notes	(341,720)		(359,904)		(340,361)		(327,381)
2023 Notes	(226,065)		(234,747)		(225,293)		(214,875)
Participations sold	(27,662)		(27,695)		(34,974)		(34,919)
Debt related to real estate owned, held for sale	—		—		(33,000)		(33,000)

———————

(1)Includes subordinate risk retention interests in securitization vehicles with an estimated fair value that approximates their carrying value.

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Net Income (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Basic and Diluted Net Income per Share of Common Stock Using Two-Class Method

The table below presents the computation of basic and diluted net income per share of common stock for the three and six months ended June 30, 2021 and 2020 ($ in thousands except per share data): 

	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020
Basic Earnings
Net income (loss)	$	67,691	$	60,201	$	126,026	$	(67,641)
Less: Preferred dividends	(3,385)		(3,385)		(6,770)		(6,770)
Net income (loss) available to common stockholders	$	64,306	$	56,816	$	119,256	$	(74,411)
Less: Dividends on participating securities	(849)		(719)		(1,697)		(1,521)
Basic Earnings	$	63,457	$	56,097	$	117,559	$	(75,932)
Diluted Earnings
Basic Earnings	$	63,457	$	56,097	$	117,559	$	(75,932)
Add: Dividends on participating securities	849		719		1,697		—
Add: Interest expense on Convertible Notes	8,261		8,678		16,506		—
Diluted Earnings	$	72,567	$	65,494	$	135,762	$	(75,932)
Number of Shares:
Basic weighted-average shares of common stock outstanding	139,884,060		151,523,513		139,845,178		152,735,852
Diluted weighted-average shares of common stock outstanding	170,832,186		182,083,702		170,812,544		152,735,852
Earnings Per Share Attributable to Common Stockholders
Basic	$	0.45	$	0.37	$	0.84	$	(0.50)
Diluted	$	0.42	$	0.36	$	0.79	$	(0.50)

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Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2021 segment
Real Estate Properties [Line Items]
Number of business segments	1
Buildings
Real Estate Properties [Line Items]
Property, plant and equipment, estimated useful lives	40 years
Furniture, fixtures, and equipment
Real Estate Properties [Line Items]
Property, plant and equipment, estimated useful lives	8 years

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Fair Value Disclosure - Summarizes Levels in Fair Value Hierarchy of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities, net	$ (22,514)	$ (31,241)
Real estate owned	1,600
Real estate owned, held for sale	0	42,905
Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities, net	22,514	31,241
Estimate of Fair Value | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned	154,300	0
Real estate owned, held for sale	0	42,905
Debt related to real estate owned, held for sale	0	(33,000)
Net real estate owned and related debt	154,300	9,905
Level I | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities, net	0	0
Level I | Estimate of Fair Value | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned	0	0
Real estate owned, held for sale	0	0
Debt related to real estate owned, held for sale	0	0
Net real estate owned and related debt	0	0
Level II | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities, net	22,514	31,241
Level II | Estimate of Fair Value | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned	0	0
Real estate owned, held for sale	0	0
Debt related to real estate owned, held for sale	0	0
Net real estate owned and related debt	0	0
Level III | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities, net	0	0
Level III | Estimate of Fair Value | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned	154,300	0
Real estate owned, held for sale	0	42,905
Debt related to real estate owned, held for sale	0	(33,000)
Net real estate owned and related debt	154,300	9,905
Foreign currency forward, net | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	(22,894)	(31,375)
Foreign currency forward, net | Level I | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Foreign currency forward, net | Level II | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	(22,894)	(31,375)
Foreign currency forward, net | Level III | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Interest rate cap | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	380	134
Interest rate cap | Level I | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Interest rate cap | Level II | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	380	134
Interest rate cap | Level III | Estimate of Fair Value | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 0	$ 0

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Fair Value Disclosure (Details) - USD ($) $ in Millions	Jun. 29, 2021	May 24, 2021	Dec. 31, 2017
Hotel - Washington D.C. | Subordinate Mortgage Portfolio Segment
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Debt related to real estate owned, held for investment	$ 110.0	$ 110.0	$ 110.0

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Loan Portfolio (Details) - USD ($) $ in Thousands		Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial mortgage loans, net		$ 7,520,105	$ 6,496,977	$ 6,496,977
Commercial Mortgage and Subordinated Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial mortgage loans, net		146,500	136,100
Commercial Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial mortgage loans, net	[1],[2]	6,653,197	5,451,084
Subordinate Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial mortgage loans, net	[2]	$ 866,908	$ 1,045,893

[1] Includes $5,489,059 and $5,418,999 pledged as collateral under secured debt arrangements in 2021 and 2020, respectively

[2] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Additional Information (Details) £ in Millions		1 Months Ended		3 Months Ended					6 Months Ended		12 Months Ended
		Jan. 31, 2020 USD ($)	Jan. 31, 2020 GBP (£)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 GBP (£)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Jun. 30, 2021 GBP (£)	Nov. 30, 2020 USD ($)	Nov. 30, 2020 GBP (£)
Financing Receivable, Allowance for Credit Loss [Line Items]
Mortgage loans on real estate, commercial and consumer, percentage of portfolio									100.00%	100.00%	100.00%
Interest receivable				$ 39,411,000					$ 39,411,000		$ 40,559,000
Amortized cost of loans in cost recovery				397,200,000		$ 373,500,000			397,200,000	$ 373,500,000
Interest received for loans in cost recovery				400,000		600,000			800,000	1,200,000
Total carrying value, net				7,520,105,000		6,496,977,000			7,520,105,000	6,496,977,000	6,496,977,000
Principal balance				7,558,304,000		6,535,079,000			7,558,304,000	6,535,079,000	6,535,079,000
Increase in general CECL allowance				400,000
Payment in kind interest				13,700,000		12,400,000			30,600,000	24,800,000
Proceeds from pre-payment penalties or accelerated fees				700,000		0			700,000	200,000
Past Due 90
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized cost of loans in cost recovery				751,500,000					$ 751,500,000		711,900,000
Past Due 30-59
Financing Receivable, Allowance for Credit Loss [Line Items]
Principal balance											$ 19,000,000.0
Urban Retail
Financing Receivable, Allowance for Credit Loss [Line Items]
Mortgage loans on real estate, commercial and consumer, percentage of portfolio									10.90%		10.00%
Total carrying value, net													$ 422,700,000	£ 309.2
Principal balance				820,466,000					$ 820,466,000		$ 655,456,000
Sale of Mezzanine Loan
Financing Receivable, Allowance for Credit Loss [Line Items]
Proceeds from sale of loan		$ 81,300,000	£ 62.2				$ 81,300,000	£ 62.2
Realized loss on investment							0
Sale Of Mezzanine Loan Two
Financing Receivable, Allowance for Credit Loss [Line Items]
Realized loss on investment							0
Sale of Unfunded Commitment of Senior Mortgage
Financing Receivable, Allowance for Credit Loss [Line Items]
Proceeds from sale of loan		$ 65,300,000	£ 50.0				$ 65,300,000	£ 50.0
Sale of Construction Loan Interests
Financing Receivable, Allowance for Credit Loss [Line Items]
Commitments sold						376,900,000
Funded amount of interests sold						127,000,000.0
Gain (loss) on loan interests sold						$ 1,400,000
Commercial Mortgage and Subordinated Portfolio Segment
Financing Receivable, Allowance for Credit Loss [Line Items]
Total carrying value, net				146,500,000					146,500,000		136,100,000
Principal balance				7,558,304,000					7,558,304,000		6,535,079,000
Realized loss on investment									(20,000,000)
Commercial Mortgage and Subordinated Portfolio Segment | Urban Retail
Financing Receivable, Allowance for Credit Loss [Line Items]
Total carrying value, net				354,200,000					354,200,000			£ 256.1	$ 338,400,000	£ 247.5
Subordinate Mortgage Portfolio Segment
Financing Receivable, Allowance for Credit Loss [Line Items]
Total carrying value, net	[1]			866,908,000					866,908,000		$ 1,045,893,000
Payment in kind interest					$ 800,000					$ 0
Maximum exposure to loss				$ 68,300,000					$ 68,300,000
Maximum exposure to loss, term									5 years 3 months 18 days
Floating Rate Loan
Financing Receivable, Allowance for Credit Loss [Line Items]
Mortgage loans on real estate, commercial and consumer, percentage of portfolio									97.00%		95.00%

[1] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Activity Relating to Loan Investment Portfolio (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
	May 24, 2021	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred Fees/Other Items
Transfer to real estate owned					$ 159
Specific CECL Allowance
Specific provision for loan loss, beginning					(175,000)
Specific provision for loan loss, ending		$ (145,000)			(145,000)
Carrying Value, Net(2)
Carrying value, beginning balance					6,535,079
Specific CECL Allowance	$ 10,000	(30,000)	$ (9,500)		(30,000)	$ 140,500
Transfer to real estate owned					(45,289)
Carrying value, ending balance		7,558,304	6,535,079		7,558,304	6,535,079
General CECL allowance		(38,199)	(38,102)		(38,199)	(38,102)		$ (38,102)
Carrying value, net		7,520,105	6,496,977		7,520,105	6,496,977		6,496,977
General CECL Allowance on unfunded commitments		2,444	4,119	$ 6,059	2,444	4,119	$ 3,794	3,365	$ 0
Commercial Mortgage and Subordinated Portfolio Segment
Principal Balance
Principal balance, beginning					6,728,424
New loan fundings					1,322,016
Add-on loan fundings					264,486
Loan repayments and sales					(552,651)
Gain (loss) on foreign currency translation					(5,027)
Realized loss on investment					(20,000)
Transfer to real estate owned					(45,448)
PIK interest and amortization of fees					34,502
Principal balance, ending		7,726,302			7,726,302
Deferred Fees/Other Items
Deferred fees/other items, beginning					(18,345)
Gain (loss) on foreign currency translation					166
Deferred fees					(17,061)
PIK interest and amortization of fees					12,083
Deferred fees/other items, ending		(22,998)			(22,998)
Specific CECL Allowance
Specific provision for loan loss, beginning		(175,000)	(206,981)	(56,981)	(175,000)	(56,981)
Specific provision for loan loss, ending		(145,000)	$ (197,481)	$ (206,981)	(145,000)	$ (197,481)
Carrying Value, Net(2)
Carrying value, beginning balance					6,535,079
New loan fundings					1,322,016
Add-on loan fundings					264,486
Loan repayments and sales					(552,651)
Gain (loss) on foreign currency translation					(4,861)
Specific CECL Allowance					30,000
Realized loss on investment					(20,000)
Deferred fees					(17,061)
PIK interest and amortization of fees					46,585
Carrying value, ending balance		7,558,304			7,558,304
Carrying value, net		$ 146,500			$ 146,500			$ 136,100

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Statistics for Loan Portfolio (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($) loan	Jun. 30, 2020 USD ($) loan	Dec. 31, 2020 USD ($) loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	68	67	67
Principal balance	$ 7,558,304	$ 6,535,079	$ 6,535,079
Commercial mortgage loans, net	7,520,105	$ 6,496,977	6,496,977
Unfunded loan commitments	$ 1,258,306		$ 1,399,989
Weighted-average cash coupon	5.40%		5.70%
Weighted-average remaining fully-extended term	2 years 9 months 18 days		2 years 9 months 18 days
Weighted-average expected term	2 years 1 month 6 days		2 years 1 month 6 days
Interest rate used in calculating weighted-average cash coupon for non-accrual or cost recovery loans	0.00%		0.00%
Principal balance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Principal balance	$ 7,726,302		$ 6,728,424

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Schedule of Mortgage Loans by Property Type and Geographic Distribution (Details) $ in Thousands, £ in Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Nov. 30, 2020 USD ($)	Nov. 30, 2020 GBP (£)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 7,558,304	$ 6,535,079	$ 6,535,079
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	100.00%	100.00%	100.00%
General CECL allowance	$ (38,199)	$ (38,102)	$ (38,102)
Carrying value, net	7,520,105	6,496,977	6,496,977
General CECL Allowance on unfunded commitments	2,444	$ 4,119	3,365	$ 3,794			$ 6,059	$ 0
New York City
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 2,355,270		$ 2,370,337
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	31.20%		36.30%
United Kingdom
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 1,637,480		$ 1,263,264
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	21.70%		19.30%
Midwest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 737,492		$ 552,537
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	9.80%		8.50%
Southeast
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 655,490		$ 581,301
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	8.70%		8.90%
West
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 552,475		$ 749,985
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	7.30%		11.50%
Northeast
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 138,952		$ 103,567
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	1.80%		1.60%
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 1,481,145		$ 914,088
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	19.50%		13.90%
Office
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 1,969,597		$ 1,911,145
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	26.10%		29.20%
Hotel
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 1,520,275		$ 1,576,369
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	20.10%		24.10%
Residential-for-sale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 835,187		$ 982,838
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	11.00%		15.00%
Urban Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 820,466		$ 655,456
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	10.90%		10.00%
Carrying value, net					$ 422,700	£ 309.2
Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 672,537		$ 228,918
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	8.90%		3.50%
Mixed Use
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 238,702		$ 217,160
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	3.20%		3.30%
Healthcare
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 367,120		$ 369,676
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	4.90%		5.70%
Urban Predevelopment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 52,520		$ 298,909
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	0.70%		4.60%
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 1,081,900		$ 294,608
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	14.20%		4.60%

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Allocation of Carrying Value of Loan Portfolio Based on Internal Risk Ratings (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($) loan	Jun. 30, 2020 USD ($) loan	Dec. 31, 2020 USD ($) loan
Financing Receivable, Credit Quality Indicator [Line Items]
Number of Loans | loan	68	67	67
Total	$ 7,558,304	$ 6,535,079	$ 6,535,079
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	100.00%	100.00%	100.00%
Year 1	$ 1,309,620	$ 469,586
Year 2	486,189	2,661,017
Year 3	2,680,262	1,398,479
Year 4	1,202,436	999,564
Year 5	926,367	204,129
Prior	953,430	802,304
General CECL Allowance	(38,199)	(38,102)	$ (38,102)
Total carrying value, net	$ 7,520,105	$ 6,496,977	$ 6,496,977
Weighted Average Risk Rating	3.1	3.1
1
Financing Receivable, Credit Quality Indicator [Line Items]
Number of Loans | loan	0	0
Total	$ 0	$ 0
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	0.00%	0.00%
Year 1	$ 0	$ 0
Year 2	0	0
Year 3	0	0
Year 4	0	0
Year 5	0	0
Prior	$ 0	$ 0
2
Financing Receivable, Credit Quality Indicator [Line Items]
Number of Loans | loan	1	1
Total	$ 32,000	$ 32,000
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	0.40%	0.50%
Year 1	$ 0	$ 0
Year 2	0	0
Year 3	0	0
Year 4	0	0
Year 5	0	0
Prior	$ 32,000	$ 32,000
3
Financing Receivable, Credit Quality Indicator [Line Items]
Number of Loans | loan	63	62
Total	$ 7,048,000	$ 6,129,541
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	93.20%	93.80%
Year 1	$ 1,309,620	$ 469,586
Year 2	486,189	2,661,017
Year 3	2,680,262	1,398,479
Year 4	1,202,436	868,514
Year 5	672,655	88,710
Prior	$ 696,838	$ 643,235
4
Financing Receivable, Credit Quality Indicator [Line Items]
Number of Loans | loan	1	0
Total	$ 81,060	$ 0
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	1.10%	0.00%
Year 1	$ 0	$ 0
Year 2	0	0
Year 3	0	0
Year 4	0	0
Year 5	81,060	0
Prior	$ 0	$ 0
5
Financing Receivable, Credit Quality Indicator [Line Items]
Number of Loans | loan	3	4
Total	$ 397,244	$ 373,538
Mortgage loans on real estate, commercial and consumer, percentage of portfolio	5.30%	5.70%
Year 1	$ 0	$ 0
Year 2	0	0
Year 3	0	0
Year 4	0	131,050
Year 5	172,652	115,419
Prior	$ 224,592	$ 127,069

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Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Cost Recovery Loans (Details)		3 Months Ended		6 Months Ended
	May 24, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Specific CECL allowance		$ 145,000,000		$ 145,000,000			$ 175,000,000
Amortized cost		397,200,000	$ 373,500,000	397,200,000	$ 373,500,000
Specific CECL Allowance	$ (10,000,000.0)	30,000,000	9,500,000	30,000,000	(140,500,000)
Specific CECL allowance (reversal), net of previously recorded amount		20,000,000.0
Total carrying value, net		7,520,105,000	6,496,977,000	7,520,105,000	6,496,977,000		6,496,977,000
Payment in kind interest		13,700,000	12,400,000	30,600,000	24,800,000
Commercial Mortgage and Subordinated Portfolio Segment
Financing Receivable, Credit Quality Indicator [Line Items]
Specific CECL allowance		145,000,000	197,481,000	145,000,000	$ 197,481,000	$ 175,000,000	175,000,000	$ 206,981,000	$ 56,981,000
Specific CECL Allowance				(30,000,000)
Write-offs, specific CECL allowance, funded		(10,000,000)	$ (15,000,000)
Total carrying value, net		$ 146,500,000		146,500,000			$ 136,100,000
Minimum
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, rent, price per square foot				50
Maximum
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, rent, price per square foot				$ 215
Maximum | Urban Predevelopment | Capitalization Rate
Financing Receivable, Credit Quality Indicator [Line Items]
Loan collateral, measurement input		0.055		0.055
Retail Center - Cincinnati, OH
Financing Receivable, Credit Quality Indicator [Line Items]
Specific CECL Allowance				$ (67,000,000.0)
Payment in kind interest		$ 400,000		$ 800,000
Retail Center - Cincinnati, OH | Capitalization Rate
Financing Receivable, Credit Quality Indicator [Line Items]
Loan collateral, measurement input		0.083		0.083
Mortgage, Amortized cost
Financing Receivable, Credit Quality Indicator [Line Items]
Amortized cost prior to Specific CECL Allowance		$ 542,244,000		$ 542,244,000
Specific CECL allowance		145,000,000		145,000,000
Amortized cost		397,244,000		397,244,000
Mortgage, Amortized cost | Urban Predevelopment - Brooklyn, NY
Financing Receivable, Credit Quality Indicator [Line Items]
Amortized cost prior to Specific CECL Allowance		182,652,000		182,652,000
Specific CECL allowance		10,000,000		10,000,000
Amortized cost		172,652,000		172,652,000
Mortgage, Amortized cost | Urban Predevelopment - Miami, FL
Financing Receivable, Credit Quality Indicator [Line Items]
Amortized cost prior to Specific CECL Allowance		187,135,000		187,135,000
Specific CECL allowance		68,000,000		68,000,000
Amortized cost		119,135,000		119,135,000
Total carrying value, net		180,500,000		180,500,000
Mortgage, Amortized cost | Retail Center - Cincinnati, OH
Financing Receivable, Credit Quality Indicator [Line Items]
Amortized cost prior to Specific CECL Allowance		172,457,000		172,457,000
Specific CECL allowance		67,000,000		67,000,000
Amortized cost		$ 105,457,000		$ 105,457,000

XML

Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - Current Expected Credit Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance reserve	$ 38,199		$ 38,102	$ 38,102
Unfunded commitments	2,444	$ 3,794	3,365	4,119	$ 6,059	$ 0
Total General CECL Allowance	40,643	$ 40,229	41,467	$ 48,663	$ 64,332	$ 0
Commercial Mortgage Portfolio Segment
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance reserve	20,191		17,012
Subordinate Mortgage Portfolio Segment
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance reserve	$ 18,008		$ 21,090

XML

Commercial Mortgage, Subordinate Loans and Other Lending Assets, Net - CECL Allowance as Percentage of Amortized Cost and Total Commitment (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Allowance and Provision for Loan Credit Loss [Abstract]
Beginning balance, specific CECL allowance, funded			$ 175,000			$ 175,000
Quarter allowances (reversals), specific CECL allowance, funded	[1]	$ (29,586)		$ (25,169)		(30,824)	$ 158,296
Ending balance, specific CECL allowance, funded		145,000				145,000
Financing Receivable, Funded, Allowance for Credit Loss [Roll Forward]
Beginning balance, General CECL allowance, funded		36,435	38,102	58,273	$ 0	38,102	0
Quarter allowances (reversals), General CECL allowance, funded		1,764	(1,667)	(13,729)	30,494
Financing Receivable, Funded, Allowance for Write-Offs		0		0
Ending balance, General CECL allowance, funded		38,199	36,435	44,544	58,273	38,199	44,544
Financing Receivable, Unfunded, Allowance for Credit Loss [Roll Forward]
Beginning balance, General CECL allowance, unfunded		3,794	3,365	6,059	0	3,365	0
Quarter allowances (reversals), General CECL allowance, unfunded		(1,350)	429	(1,940)	2,971
Write-offs, General CECL allowance, unfunded		0		0
Ending balance, General CECL allowance, unfunded		2,444	3,794	4,119	6,059	2,444	4,119
Financing Receivable, General Allowance, Allowance for Credit Loss [Roll Forward]
General CECL Allowance		40,229	41,467	64,332	0	41,467	0
Total quarter allowances (reversals), General CECL allowance		414	(1,238)	(15,669)	33,465
Allowance for loan and lease losses, real estate and off-balance sheet, write-offs		0		0
General CECL Allowance		40,643	40,229	48,663	64,332	40,643	48,663
Financing Receivable, Total Allowance for Credit Loss [Roll Forward]
Total CECL Allowance		215,229	216,467	271,313	56,981	216,467	56,981
Total CECL Allowance, Quarter allowances (reversals)		(19,586)	(1,238)	(10,169)	183,465
Total CECL allowance, Write-offs		(10,000)		(15,000)
Total CECL Allowance		$ 185,643	$ 215,229	$ 246,144	$ 271,313	$ 185,643	$ 246,144
General CECL allowance, % of amortized cost		0.57%	0.62%	0.81%	1.08%	0.57%	0.81%	0.67%	0.00%
Total CECL allowance, % of amortized cost		2.41%	3.06%	3.71%	4.05%	2.41%	3.71%	3.23%	0.00%
Adjustment due to Adoption of ASU
Financing Receivable, Funded, Allowance for Credit Loss [Roll Forward]
Beginning balance, General CECL allowance, funded					$ 27,779		$ 27,779
Financing Receivable, Unfunded, Allowance for Credit Loss [Roll Forward]
Beginning balance, General CECL allowance, unfunded					3,088		3,088
Financing Receivable, General Allowance, Allowance for Credit Loss [Roll Forward]
General CECL Allowance					30,867		30,867
Financing Receivable, Total Allowance for Credit Loss [Roll Forward]
Total CECL Allowance					30,867		30,867
Commercial Mortgage and Subordinated Portfolio Segment
Allowance and Provision for Loan Credit Loss [Abstract]
Beginning balance, specific CECL allowance, funded		$ 175,000	$ 175,000	$ 206,981	56,981	$ 175,000	56,981
Quarter allowances (reversals), specific CECL allowance, funded		(20,000)		5,500	150,000
Write-offs, specific CECL allowance, funded		(10,000)		(15,000)
Ending balance, specific CECL allowance, funded		$ 145,000	$ 175,000	$ 197,481	206,981	$ 145,000	197,481
Commercial Mortgage and Subordinated Portfolio Segment | Adjustment due to Adoption of ASU
Allowance and Provision for Loan Credit Loss [Abstract]
Beginning balance, specific CECL allowance, funded					$ 0		$ 0

[1] Comprised of $30,000, $30,000, $9,500 and $(140,500) Specific CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively, and $(414), $824, $15,669, and $(17,796) of General CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively.

XML

Real Estate Owned and Related Debt (Details) - USD ($) $ in Thousands				3 Months Ended			6 Months Ended
		Jun. 29, 2021	May 24, 2021	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]
Real estate held-for-sale, impairment									$ 600
Total carrying value, net				$ 7,520,105	$ 6,496,977		$ 7,520,105	$ 6,496,977		$ 6,496,977
Specific CECL (allowance) reversal			$ 10,000	(30,000)	(9,500)		(30,000)	140,500
Realized loss on investments			20,000	20,000	$ 16,405		20,000	$ 16,405
Mezzanine Loans
Debt Securities, Available-for-sale [Line Items]
Total carrying value, net				423,000			423,000
Subordinate Mortgage Portfolio Segment
Debt Securities, Available-for-sale [Line Items]
Total carrying value, net	[1]			866,908			866,908			$ 1,045,893
Subordinate Mortgage Portfolio Segment | Mezzanine Loans
Debt Securities, Available-for-sale [Line Items]
Specific CECL (allowance) reversal						$ 10,000
Hotel - Anaheim, CA | Subordinate Mortgage Portfolio Segment
Debt Securities, Available-for-sale [Line Items]
Debt related To real estate owned, held for sale				$ 33,000			$ 33,000
Hotel - Washington D.C. | Junior Mezzanine Loans
Debt Securities, Available-for-sale [Line Items]
Total carrying value, net											$ 20,000
Hotel - Washington D.C. | Senior Mezzanine Loans
Debt Securities, Available-for-sale [Line Items]
Total carrying value, net											24,500
Payments to acquire mortgage notes receivable			24,500
Hotel - Washington D.C. | Subordinate Mortgage Portfolio Segment
Debt Securities, Available-for-sale [Line Items]
Debt related to real estate owned, held for investment		$ 110,000	$ 110,000								$ 110,000
Payments for mortgage loans		$ 110,000

[1] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

XML

Real Estate Owned and Related Debt - Schedule of Real Estate Owned Fixed Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 29, 2021	May 24, 2021	Dec. 31, 2017
Assets acquired:
Depreciation and amortization on real estate owned	$ (452)
Hotel - Washington D.C.
Assets acquired:
Cash	3,245		$ 4,148
Buildings	86,871		86,871
Land	58,742		58,742
Furniture, fixtures, and equipment	8,687		8,687
Depreciation and amortization on real estate owned	(452)		0
Other Assets	1,579		1,555
Total Assets	158,672		160,003
Liabilities assumed:
Debt related to real estate owned	0		110,073
Accounts payable, accrued expenses and other liabilities	5,138		4,641
Total Liabilities	5,138		114,714
Net Real Estate Assets	$ 153,534		45,289
Hotel - Washington D.C. | Subordinate Mortgage Portfolio Segment
Liabilities assumed:
Debt related to real estate owned, held for investment		$ 110,000	$ 110,000	$ 110,000

XML

Real Estate Owned and Related Debt - Income Statement Impact (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Real Estate [Abstract]
Revenue from operations	$ 1,374	$ 0	$ 1,374	$ 0
Operating expenses	(1,994)		(1,994)
Depreciation and amortization	(452)	$ 0	(452)	$ 0
Net loss from real estate owned	$ (1,072)		$ (1,072)

XML

Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Interest receivable	$ 39,411	$ 40,559
Collateral deposited under derivative agreements	29,680	28,320
Loan proceeds held by servicer	5,053	5,649
Other	1,686	112
Total	75,830	$ 74,640
Real estate owned	$ 1,600

XML

Secured Debt Arrangements, Net - Weighted Average Maturities and Interest Rates of Borrowings (Details) kr in Thousands, € in Millions, £ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 SEK (kr)	Jun. 30, 2021 GBP (£)	Jun. 30, 2021 EUR (€)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Nov. 30, 2017 USD ($)
Debt Instrument [Line Items]
Less: deferred financing costs	$ (10,098,000)
Percentage of secured debt that is recourse debt	54.00%		54.00%	54.00%	54.00%		55.00%
Line of Credit
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 4,554,581,000						$ 4,395,764,000
Borrowings outstanding	3,679,906,000						3,436,672,000
Less: deferred financing costs	$ (9,753,000)						(12,993,000)
Line of Credit | Weighted Average
Debt Instrument [Line Items]
Weighted average advance rate	67.20%	63.70%
Line of Credit | London Interbank Offered Rate (LIBOR) | Weighted Average
Debt Instrument [Line Items]
Weighted average rate	2.00%	2.16%
Line of Credit | GBP London Interbank Offered Rate (LIBOR) | Weighted Average
Debt Instrument [Line Items]
Weighted average rate	2.03%	1.83%
Line of Credit | EUR London Interbank Offered Rate (LIBOR) | Weighted Average
Debt Instrument [Line Items]
Weighted average rate	1.43%	1.46%
Line of Credit | SEK London Interbank Offered Rate (LIBOR) | Weighted Average
Debt Instrument [Line Items]
Weighted average rate	1.50%
Line of Credit | JP Morgan Chase, DB Repurchase Facility, Goldman Sachs, Credit Suisse and HSBC Facilities
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 3,059,149,000						3,538,036,000
Borrowings outstanding	2,194,227,000						2,591,937,000
Line of Credit | Deutsche Bank Repurchase Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	700,000,000.0					$ 1,000,000,000.0
Borrowings outstanding	413,300,000
Line of Credit | Goldman Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings								$ 500,000,000.0
Borrowings outstanding	134,000,000.0
Line of Credit | Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding			kr 2,100,000	£ 637.7	€ 312.4
Line of Credit | JP Morgan Chase, DB Repurchase Facility, Goldman Sachs, Credit Suisse, Barclays Facility, HSBC Facilities And Barclays Securitization
Debt Instrument [Line Items]
Maximum Amount of Borrowings	4,554,581,000						4,395,764,000
Borrowings outstanding	$ 3,689,659,000						3,449,665,000
USD | Line of Credit | Weighted Average
Debt Instrument [Line Items]
Weighted average advance rate	64.80%	62.50%
USD | Line of Credit | JP Morgan Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 1,113,966,000						1,113,156,000
Borrowings outstanding	1,069,071,000						984,125,000
USD | Line of Credit | Deutsche Bank Repurchase Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	700,000,000						1,000,000,000
Borrowings outstanding	413,325,000						520,457,000
USD | Line of Credit | Goldman Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	500,000,000						500,000,000
Borrowings outstanding	133,955,000						332,352,000
USD | Line of Credit | Credit Suisse Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	189,219,000						374,251,000
Borrowings outstanding	189,219,000						369,182,000
USD | Line of Credit | Barclays Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	200,000,000						200,000,000
Borrowings outstanding	$ 32,693,000						$ 35,192,000
Fx contracts - GBP | Line of Credit
Debt Instrument [Line Items]
Currency conversion rate	1.38		1.38	1.38	1.38		1.37
Fx contracts - GBP | Line of Credit | Weighted Average
Debt Instrument [Line Items]
Weighted average advance rate	67.60%	68.70%
Fx contracts - GBP | Line of Credit | JP Morgan Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 114,886,000						$ 113,548,000
Borrowings outstanding	$ 114,886,000						$ 113,548,000
Fx contracts - EUR | Line of Credit
Debt Instrument [Line Items]
Currency conversion rate	1.19		1.19	1.19	1.19		1.22
Fx contracts - EUR | Line of Credit | Weighted Average
Debt Instrument [Line Items]
Weighted average advance rate	68.80%	60.80%
Fx contracts - EUR | Line of Credit | JP Morgan Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 71,148,000						$ 73,296,000
Borrowings outstanding	71,148,000						73,296,000
Fx contracts - EUR | Line of Credit | HSBC Facility
Debt Instrument [Line Items]
Maximum Amount of Borrowings	169,930,000						163,785,000
Borrowings outstanding	$ 169,930,000						163,785,000
Kronor | Line of Credit
Debt Instrument [Line Items]
Currency conversion rate	0.12		0.12	0.12	0.12
Kronor | Line of Credit | Weighted Average
Debt Instrument [Line Items]
Weighted average advance rate	80.80%
VIE | Line of Credit | Barclays Securitization
Debt Instrument [Line Items]
Maximum Amount of Borrowings	$ 1,495,432,000						857,728,000
Borrowings outstanding	1,495,432,000	$ 782,000,000.0					$ 857,728,000
VIE | Line of Credit | Barclays Securitization | Weighted Average
Debt Instrument [Line Items]
Borrowings outstanding	1,495,432,000
VIE | Fx contracts - GBP | Line of Credit | Barclays Securitization | Weighted Average
Debt Instrument [Line Items]
Borrowings outstanding	881,976,000
VIE | Fx contracts - EUR | Line of Credit | Barclays Securitization | Weighted Average
Debt Instrument [Line Items]
Borrowings outstanding	$ 370,492,000
VIE | Kronor | Line of Credit | Barclays Securitization | Weighted Average
Debt Instrument [Line Items]
Borrowings outstanding | kr			kr 242,964

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Secured Debt Arrangements, Net - Additional Information (Details) € in Millions, £ in Millions, kr in Millions	1 Months Ended		6 Months Ended
	Nov. 30, 2019 USD ($) subsidiary extension	Jul. 31, 2018	Jun. 30, 2021 USD ($)	Jun. 30, 2021 EUR (€)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 GBP (£)	Jun. 30, 2021 EUR (€)	Jun. 30, 2021 SEK (kr)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 GBP (£)	Mar. 31, 2021 SEK (kr)	Dec. 31, 2020 USD ($)	Jun. 30, 2020 GBP (£)	Jun. 30, 2020 EUR (€)	Nov. 30, 2017 USD ($)
Debt Instrument [Line Items]
Weighted average haircut under repurchase agreements			32.80%			32.80%	32.80%	32.80%				36.30%
Repayments of secured debt arrangements			$ 744,570,000		$ 980,280,000
Line of Credit
Debt Instrument [Line Items]
Maximum borrowing under facility			4,554,581,000									$ 4,395,764,000
Balance			3,689,659,000									3,449,665,000
Borrowings outstanding			3,679,906,000									3,436,672,000
Line of Credit | JP Morgan Facility
Debt Instrument [Line Items]
Balance			1,255,105,000									1,170,969,000
Line of Credit | JP Morgan Facility | USD
Debt Instrument [Line Items]
Maximum borrowing under facility			1,113,966,000									1,113,156,000
Borrowings outstanding			1,069,071,000									984,125,000
Line of Credit | JP Morgan Facility | Fx contracts - GBP
Debt Instrument [Line Items]
Maximum borrowing under facility			114,886,000									113,548,000
Borrowings outstanding			114,886,000									113,548,000
Line of Credit | JP Morgan Facility | Fx contracts - EUR
Debt Instrument [Line Items]
Maximum borrowing under facility			71,148,000									73,296,000
Borrowings outstanding			71,148,000									73,296,000
Line of Credit | DB Repurchase Facility
Debt Instrument [Line Items]
Maximum borrowing under facility			$ 700,000,000.0						$ 1,000,000,000.0
Extension option			1 year	1 year
Balance			$ 413,325,000									520,457,000
Borrowings outstanding			413,300,000
Line of Credit | DB Repurchase Facility | USD
Debt Instrument [Line Items]
Maximum borrowing under facility			700,000,000									1,000,000,000
Borrowings outstanding			413,325,000									520,457,000
Line of Credit | Goldman Sachs Repurchase Facility
Debt Instrument [Line Items]
Maximum borrowing under facility															$ 500,000,000.0
Balance			133,955,000									332,352,000
Borrowings outstanding			134,000,000.0
Line of Credit | Goldman Sachs Repurchase Facility | USD
Debt Instrument [Line Items]
Maximum borrowing under facility			500,000,000									500,000,000
Borrowings outstanding			133,955,000									332,352,000
Line of Credit | Credit Suisse Facility | USD
Debt Instrument [Line Items]
Maximum borrowing under facility			189,219,000									374,251,000
Balance			189,219,000									369,182,000
Borrowings outstanding			189,219,000									369,182,000
Term after either party notifies the other party of intention to terminate		6 months
Line of Credit | Credit Suisse Facility | Fx contracts - GBP
Debt Instrument [Line Items]
Balance												0
Line of Credit | HSBC Facility | USD
Debt Instrument [Line Items]
Balance												0
Line of Credit | HSBC Facility | Fx contracts - GBP
Debt Instrument [Line Items]
Balance												0
Line of Credit | HSBC Facility | Fx contracts - EUR
Debt Instrument [Line Items]
Maximum borrowing under facility			169,930,000									163,785,000
Balance			169,930,000									163,785,000
Borrowings outstanding			169,930,000									163,785,000
Line of credit, amount outstanding			169,900,000				€ 143.3
Line of Credit | Barclays Facility
Debt Instrument [Line Items]
Repayments of secured debt arrangements | €				€ 16.5
Line of Credit | Barclays Facility | USD
Debt Instrument [Line Items]
Maximum borrowing under facility			200,000,000									200,000,000
Balance			32,693,000									35,192,000
Borrowings outstanding			32,693,000									35,192,000
Line of Credit | Barclays Facility | Fx contracts - GBP
Debt Instrument [Line Items]
Balance												0
Line of Credit | Barclays Facility | Fx contracts - EUR
Debt Instrument [Line Items]
Balance												0
Line of Credit | Barclays Securitization
Debt Instrument [Line Items]
Balance			1,495,432,000									857,728,000
Borrowings outstanding						£ 637.7	312.4	kr 2,100.0
Line of Credit | Barclays Securitization | VIE
Debt Instrument [Line Items]
Maximum borrowing under facility			1,495,432,000									857,728,000
Balance													£ 26.0	€ 5.3
Borrowings outstanding			$ 1,495,432,000		$ 782,000,000.0							$ 857,728,000
Deferring or waiving debt service payments, term			18 months	18 months
Repayments of secured debt arrangements			$ 18,500,000
Increase in financing spread			0.25%	0.25%
Amended and Restated JPMorgan Facility | Line of Credit | JP Morgan Facility
Debt Instrument [Line Items]
Number of subsidiaries | subsidiary	3
Maximum borrowing under facility	$ 1,300,000,000
Number of extensions available | extension	2
Extension option			1 year	1 year
Balance			$ 1,300,000,000			83.1	€ 60.0
Commercial Loan One | Line of Credit | Barclays Securitization | VIE
Debt Instrument [Line Items]
Balance			281,700,000			£ 237.6			227,400,000	£ 165.0
Commercial Loan Two | Line of Credit | Barclays Securitization | VIE
Debt Instrument [Line Items]
Balance			$ 114,700,000					kr 1,000.0	$ 187,400,000		kr 1,600.0

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Secured Debt Arrangements, Net - Assets Under Barclays Private Securitization (Details) - Line of Credit kr in Thousands, $ in Thousands, € in Millions, £ in Millions	Jun. 30, 2021 USD ($)	Jun. 30, 2021 SEK (kr)	Jun. 30, 2021 GBP (£)	Jun. 30, 2021 EUR (€)	Dec. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Borrowings outstanding	$ 3,679,906				$ 3,436,672
Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding		kr 2,100,000	£ 637.7	€ 312.4
VIE | Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding	1,495,432				$ 857,728	$ 782,000
Weighted Average | VIE | Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding	1,495,432
Weighted Average | VIE | Fx contracts - GBP | Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding	881,976
Weighted Average | VIE | Fx contracts - EUR | Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding	$ 370,492
Weighted Average | VIE | Kronor | Barclays Securitization
Debt Instrument [Line Items]
Borrowings outstanding | kr		kr 242,964

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Secured Debt Arrangements, Net - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands		Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Assets:
Commercial mortgage loans, net		$ 7,520,105		$ 6,496,977	$ 6,496,977
Other assets		75,830		74,640
Total Assets		7,954,364		6,940,020
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $2.2 million and $0.7 million in 2021 and 2020, respectively)		774,569
Total Liabilities		5,659,756		4,669,491
Allowance reserve		38,199		38,102	38,102
Off-balance sheet, credit loss, liability		2,444	$ 3,794	3,365	$ 4,119	$ 6,059	$ 0
Commercial Mortgage Portfolio Segment
Assets:
Commercial mortgage loans, net	[1],[2]	6,653,197		5,451,084
Liabilities:
Allowance reserve		20,191		17,012
VIE
Assets:
Cash		1,955		2,020
Commercial mortgage loans, net		2,110,376		1,290,393
Other assets		17,119		15,831
Total Assets		2,129,450		1,308,244
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $2.2 million and $0.7 million in 2021 and 2020, respectively)		1,493,222		857,043
Accounts payable, accrued expenses and other liabilities		2,228		1,307
Total Liabilities		1,495,450		858,350
Deferred financing costs		2,200		700
VIE | Commercial Mortgage Portfolio Segment
Liabilities:
Allowance reserve		10,200		4,400
Off-balance sheet, credit loss, liability		$ 400		$ 300

[1] Includes $5,489,059 and $5,418,999 pledged as collateral under secured debt arrangements in 2021 and 2020, respectively

[2] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

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Secured Debt Arrangements, Net - Schedule of Net Income (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Interest income from commercial mortgage loans		$ 82,447		$ 75,641		$ 157,803	$ 157,496
Interest expense		(39,737)		(37,498)		(75,401)	(78,703)
Net interest income		74,485		70,759		145,636	145,427
General and administrative expenses		(6,734)		(6,425)		(13,674)	(12,956)
Provision for loan losses and impairments	[1]	29,586		25,169		30,824	(158,296)
Foreign currency translation gain (loss)		4,054		2,559		(3,395)	(35,390)
Net income (loss)		67,691	$ 58,335	$ 60,201	$ (127,842)	126,026	$ (67,641)
VIE
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Interest income from commercial mortgage loans		20,943				37,036
Interest expense		(6,396)				(10,986)
Net interest income		14,547				26,050
General and administrative expenses		0				(1)
Provision for loan losses and impairments		(2,040)				(5,668)
Foreign currency translation gain (loss)		2,802				1,890
Net income (loss)		$ 15,309				$ 22,271

[1] Comprised of $30,000, $30,000, $9,500 and $(140,500) Specific CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively, and $(414), $824, $15,669, and $(17,796) of General CECL Reversals (Allowance) for the three and six months ended June 30, 2021 and 2020, respectively.

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Secured Debt Arrangements, Net - Remaining Maturities of Borrowings (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Line of Credit Facility [Line Items]
Total	$ 774,569
Line of Credit
Line of Credit Facility [Line Items]
Less than 1 year	868,525
1 to 3 years	2,341,223
3 to 5 years	479,911
More than 5 years	0
Total	3,689,659
Line of Credit | JPMorgan
Line of Credit Facility [Line Items]
Less than 1 year	121,115
1 to 3 years	1,133,991
3 to 5 years	0
More than 5 years	0
Total	1,255,106
Line of Credit | DB
Line of Credit Facility [Line Items]
Less than 1 year	0
1 to 3 years	413,325
3 to 5 years	0
More than 5 years	0
Total	413,325
Line of Credit | Goldman
Line of Credit Facility [Line Items]
Less than 1 year	133,955
1 to 3 years	0
3 to 5 years	0
More than 5 years	0
Total	133,955
Line of Credit | CS Facility | USD
Line of Credit Facility [Line Items]
Less than 1 year	0
1 to 3 years	40,500
3 to 5 years	148,719
More than 5 years	0
Total	189,219
Line of Credit | HSBC Facility | Fx contracts - EUR
Line of Credit Facility [Line Items]
Less than 1 year	0
1 to 3 years	169,930
3 to 5 years	0
More than 5 years	0
Total	169,930
Line of Credit | Barclays Facility | USD
Line of Credit Facility [Line Items]
Less than 1 year	0
1 to 3 years	32,693
3 to 5 years	0
More than 5 years	0
Total	32,693
Line of Credit | Barclays Securitization
Line of Credit Facility [Line Items]
Less than 1 year	613,455
1 to 3 years	550,784
3 to 5 years	331,192
More than 5 years	0
Total	$ 1,495,431

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Secured Debt Arrangements, Net - Summary of Outstanding Balances, Maximum and Average Balances of Borrowings (Details) - Line of Credit - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Line of Credit Facility [Line Items]
Balance	$ 3,689,659	$ 3,449,665
Amortized Cost of Collateral	5,489,059	5,418,999
JPMorgan
Line of Credit Facility [Line Items]
Balance	1,255,105	1,170,969
Amortized Cost of Collateral	2,018,979	2,009,249
Maximum Month-End Balance	1,359,053	1,192,288
Average Month-End Balance	1,191,150	1,119,997
DB
Line of Credit Facility [Line Items]
Balance	413,325	520,457
Amortized Cost of Collateral	610,654	814,715
Maximum Month-End Balance	520,217	526,743
Average Month-End Balance	463,607	506,831
Goldman
Line of Credit Facility [Line Items]
Balance	133,955	332,352
Amortized Cost of Collateral	202,812	510,371
Maximum Month-End Balance	331,154	362,139
Average Month-End Balance	293,899	343,621
CS Facility | USD
Line of Credit Facility [Line Items]
Balance	189,219	369,182
Amortized Cost of Collateral	271,691	524,139
Maximum Month-End Balance	369,182	378,781
Average Month-End Balance	266,233	348,464
CS Facility | Fx contracts - GBP
Line of Credit Facility [Line Items]
Balance		0
Amortized Cost of Collateral		0
Maximum Month-End Balance		90,111
Average Month-End Balance		43,094
HSBC Facility | USD
Line of Credit Facility [Line Items]
Balance		0
Amortized Cost of Collateral		0
Maximum Month-End Balance		50,625
Average Month-End Balance		44,000
HSBC Facility | Fx contracts - GBP
Line of Credit Facility [Line Items]
Balance		0
Amortized Cost of Collateral		0
Maximum Month-End Balance		34,500
Average Month-End Balance		20,563
HSBC Facility | Fx contracts - EUR
Line of Credit Facility [Line Items]
Balance	169,930	163,785
Amortized Cost of Collateral	214,185	215,509
Maximum Month-End Balance	174,717	163,788
Average Month-End Balance	165,863	154,725
Barclays Facility | USD
Line of Credit Facility [Line Items]
Balance	32,693	35,192
Amortized Cost of Collateral	50,121	49,993
Maximum Month-End Balance	35,193	35,193
Average Month-End Balance	34,359	29,327
Barclays Facility | Fx contracts - GBP
Line of Credit Facility [Line Items]
Balance		0
Amortized Cost of Collateral		0
Maximum Month-End Balance		666,810
Average Month-End Balance		260,692
Barclays Facility | Fx contracts - EUR
Line of Credit Facility [Line Items]
Balance		0
Amortized Cost of Collateral		0
Maximum Month-End Balance		180,595
Average Month-End Balance		70,521
Barclays Securitization
Line of Credit Facility [Line Items]
Balance	1,495,432	857,728
Amortized Cost of Collateral	2,120,617	1,295,023
Maximum Month-End Balance	1,495,432	857,728
Average Month-End Balance	$ 1,190,667	$ 823,915

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Senior Secured Term Loan, Net (Details) - USD ($)	1 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	May 31, 2019	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Repayments of senior secured term loan principal					$ 3,250,000	$ 2,500,000
Realized loss on interest rate swap		$ 111,000		$ 3,095,000	(246,000)	38,643,000
Deferred financing costs		10,098,000			$ 10,098,000
2026 Term Loan
Debt Instrument [Line Items]
Basis spread on variable rate					2.75%		2.75%
Repayments of senior secured term loan principal		1,300,000		$ 2,500,000	$ 1,300,000	$ 2,500,000
Deferred financing costs		6,280,000			$ 6,280,000		$ 7,130,000
2028 Term Loan
Debt Instrument [Line Items]
Basis spread on variable rate					3.50%
Repayments of senior secured term loan principal		800,000			$ 800,000
Deferred financing costs		3,818,000			3,818,000
Interest Rate Swap
Debt Instrument [Line Items]
Realized loss on interest rate swap							53,900,000
Interest Rate Cap
Debt Instrument [Line Items]
Debt interest rate cap				3 years
London Interbank Offered Rate (LIBOR) | Interest Rate Swap
Debt Instrument [Line Items]
Fixed interest rate	2.12%
London Interbank Offered Rate (LIBOR) | Interest Rate Cap
Debt Instrument [Line Items]
Fixed interest rate				0.75%		0.75%
Secured Debt
Debt Instrument [Line Items]
Debt instrument, face amount	$ 500,000,000.0		$ 300,000,000.0
Debt instrument, issuance price as a percentage	99.50%		99.00%
Debt instrument, covenant, non-recourse debt to tangible net worth ratio, maximum	3
Debt instrument, covenant, unencumbered assets to pari-passu indebtedness ratio, maximum	1.25
Effective interest rate	4.87%			3.50%		3.50%
Deferred financing costs		$ 10,098,000			$ 10,098,000		7,130,000
Secured Debt | Interest Rate Cap
Debt Instrument [Line Items]
Deferred financing costs							$ 1,100,000
Secured Debt | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate	2.75%
Secured Debt | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
Secured Debt | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate			3.50%

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Senior Secured Term Loan, Net - Term Loans (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Principal Amount	$ 789,250
Unamortized discount	(4,583)
Less: deferred financing costs	(10,098)
Carrying Value	774,569
2026 Term Loan
Debt Instrument [Line Items]
Principal Amount	490,000	$ 492,500
Unamortized discount	(1,726)	(1,905)
Less: deferred financing costs	(6,280)	(7,130)
Carrying Value	$ 481,994	$ 483,465
Weighted average rate	2.75%	2.75%
2028 Term Loan
Debt Instrument [Line Items]
Principal Amount	$ 299,250
Unamortized discount	(2,857)
Less: deferred financing costs	(3,818)
Carrying Value	$ 292,575
Weighted average rate	3.50%

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Senior Secured Notes, Net (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Derivative [Line Items]
Proceeds from issuance of senior secured notes		$ 500,000,000	$ 0
Debt issuance costs, net	$ 10,098,000	10,098,000
Senior Notes
Derivative [Line Items]
Senior notes	493,694,000	493,694,000		$ 0
Debt issuance costs, net	6,306,000	6,306,000		$ 0
2029 Notes | Senior Notes
Derivative [Line Items]
Debt instrument, face amount	$ 500,000,000.0	$ 500,000,000.0
Coupon Rate	4.625%	4.625%
Proceeds from issuance of senior secured notes	$ 495,000,000.0
Senior notes	493,700,000	$ 493,700,000
Debt issuance costs, net	$ 6,300,000	$ 6,300,000

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Convertible Senior Notes, Net (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($) offering	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Proceeds from issuance of senior secured notes			$ 500,000,000	$ 0
Unamortized discount	$ 4,583,000		$ 4,583,000
Common Stock
Debt Instrument [Line Items]
Share price (in dollars per share) | $ / shares	$ 15.95		$ 15.95
Convertible Debt
Debt Instrument [Line Items]
Debt instrument, face amount	$ 575,000,000		$ 575,000,000				$ 575,000,000
Interest expense	7,200,000		14,400,000
Non-cash interest expense	1,600,000	$ 1,500,000	3,100,000	$ 3,000,000.0
Convertible Debt | 2019 and 2022 Notes | Additional Paid-In-Capital
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock			15,400,000
Convertible Debt | 2022 Notes
Debt Instrument [Line Items]
Number of debt offerings issued | offering						2
Debt instrument, face amount						$ 345,000,000.0	$ 345,000,000
Stated interest rate						4.75%	4.75%
Proceeds from issuance of senior secured notes						$ 337,500,000
Convertible senior notes, net	341,700,000		341,700,000
Unamortized discount	3,300,000		3,300,000
Convertible Debt | 2022 Notes | Additional Paid-In-Capital
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock			11,000,000.0
Convertible Debt | 2023 Notes
Debt Instrument [Line Items]
Debt instrument, face amount					$ 230,000,000.0		$ 230,000,000
Stated interest rate					5.375%		5.38%
Proceeds from issuance of senior secured notes					$ 223,700,000
Convertible senior notes, net	226,100,000		226,100,000
Unamortized discount	$ 3,900,000		3,900,000
Convertible Debt | 2023 Notes | Additional Paid-In-Capital
Debt Instrument [Line Items]
Conversions of convertible senior notes for common stock			$ 4,400,000

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Convertible Senior Notes, Net - Summary of Note Terms (Details) - Convertible Debt	6 Months Ended	12 Months Ended
	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Principal Amount	$ 575,000,000	$ 575,000,000
Conversion rate basis, principal amount	$ 1,000
2022 Notes
Debt Instrument [Line Items]
Principal Amount		$ 345,000,000		$ 345,000,000.0
Coupon Rate		4.75%		4.75%
Effective Rate		5.60%
Conversion Rate	0.0502260	0.0502260
Remaining Period of Amortization	1 year 1 month 24 days	1 year 7 months 24 days
2023 Notes
Debt Instrument [Line Items]
Principal Amount		$ 230,000,000	$ 230,000,000.0
Coupon Rate		5.38%	5.375%
Effective Rate		6.16%
Conversion Rate	0.0487187	0.0487187
Remaining Period of Amortization	2 years 3 months 14 days	2 years 9 months 14 days

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Derivatives - Summary of Non-Designated Foreign Exchange Forwards (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021 USD ($) contract	Dec. 31, 2020 USD ($) contract	Jun. 30, 2020 USD ($)
Interest rate cap
Derivative [Line Items]
Aggregate Notional Amount (in thousands)			$ 1,100
Not Designated as Hedging Instrument | Interest rate cap
Derivative [Line Items]
Number of Contracts | contract	1	1
Aggregate Notional Amount (in thousands)	$ 500,000	$ 500,000	$ 500,000
Weighted-Average Years to Maturity	1 year 11 months 15 days	2 years 5 months 26 days
Fx contracts - GBP | Not Designated as Hedging Instrument | Foreign currency forward, net
Derivative [Line Items]
Number of Contracts | contract	100	93
Aggregate Notional Amount (in thousands)	$ 561,586	$ 428,493
Weighted-Average Years to Maturity	1 year 8 months 8 days	2 years 14 days
Fx contracts - EUR | Not Designated as Hedging Instrument | Foreign currency forward, net
Derivative [Line Items]
Number of Contracts | contract	74	69
Aggregate Notional Amount (in thousands)	$ 286,660	$ 239,466
Weighted-Average Years to Maturity	2 years 2 months 19 days	2 years 7 months 9 days
Kronor | Not Designated as Hedging Instrument | Foreign currency forward, net
Derivative [Line Items]
Number of Contracts | contract	23
Aggregate Notional Amount (in thousands)	$ 801,518	$ 0
Weighted-Average Years to Maturity	4 years 21 days

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Derivatives - Summary of Amounts Recognized on Consolidated Statements of Operations Related to Company's Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss) on derivative instruments - unrealized interest rate swap			$ 8,727	$ 68,640
Gain (loss) on sale of derivatives	$ (111)	$ (3,095)	246	(38,643)
Foreign currency forward, net
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss) on derivative instruments - unrealized interest rate swap	(2,021)	(9,004)	8,481	53,432
Gain (loss) on sale of derivatives	(3,094)	(2,995)	6,706	67,496
Foreign currency forward, net | Gain (Loss) on Derivative Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Realized (gain) loss on derivative instruments - interest rate swap realized	(1,073)	6,009	(1,775)	14,064
Interest rate cap and swaps
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on sale of derivatives	(111)	(3,095)	246	(38,643)
Interest Rate Cap
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount		1,100		1,100
Interest Rate Cap | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	500,000	500,000	500,000	500,000	$ 500,000
Interest Rate Cap | Gain (Loss) on Derivative Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss) on derivative instruments - unrealized interest rate swap	(111)	738	246	738
Interest Rate Swap, Instrument One | Gain (Loss) on Derivative Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gain (loss) on derivative instruments - unrealized interest rate swap	0	50,018	0	14,470
Interest Rate Swap, Instrument Two | Gain (Loss) on Derivative Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Realized (gain) loss on derivative instruments - interest rate swap realized	0	(53,851)
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on sale of derivatives					$ (53,900)
Interest Rate Swap | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Derivative notional amount	$ 0	$ 0	$ 0	$ 0

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Derivatives - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2020	May 31, 2019
Secured Debt
Derivative [Line Items]
Effective interest rate	3.50%	4.87%
Interest rate cap
Derivative [Line Items]
Derivative notional amount	$ 1.1
London Interbank Offered Rate (LIBOR) | Interest Rate Swap
Derivative [Line Items]
Fixed interest rate		2.12%
London Interbank Offered Rate (LIBOR) | Interest rate cap
Derivative [Line Items]
Fixed interest rate	0.75%
Cap interest rate	0.75%

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Derivatives - Summarizes Gross Asset and Liability Amounts Related to Derivatives (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Gross Amount of Recognized Liability	$ 28,472	$ 32,172
Gross Amounts Offset in our Condensed Consolidated Balance Sheet	(5,958)	(931)
Net Amounts of Liability Presented in our Condensed Consolidated Balance Sheet	22,514	31,241
Foreign currency forward, net
Derivative [Line Items]
Gross Amount of Recognized Liability	28,472	32,172
Gross Amounts Offset in our Condensed Consolidated Balance Sheet	(5,578)	(797)
Net Amounts of Liability Presented in our Condensed Consolidated Balance Sheet	22,894	31,375
Interest rate cap
Derivative [Line Items]
Gross Amount of Recognized Liability	0	0
Gross Amounts Offset in our Condensed Consolidated Balance Sheet	(380)	(134)
Net Amounts of Liability Presented in our Condensed Consolidated Balance Sheet	$ (380)	$ (134)

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Participations Sold (Details) $ in Thousands, £ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 GBP (£)	Oct. 31, 2020 USD ($)
Participating Mortgage Loans [Line Items]
Payment in kind interest		$ 13,700	$ 12,400	$ 30,600	$ 24,800
Total carrying value, net	$ 7,520,105	$ 7,520,105	$ 6,496,977	$ 7,520,105	$ 6,496,977	$ 6,496,977
Mezzanine Loans
Participating Mortgage Loans [Line Items]
Payment in kind interest	2,700
Debt Instrument, Decrease In Participating Interest	$ 27,700
Mezzanine Loans | Secured Debt
Participating Mortgage Loans [Line Items]
Total carrying value, net						97,700	£ 70.7
Mezzanine Loans | Ground-up Condominium Development - New York
Participating Mortgage Loans [Line Items]
Debt instrument, face amount								$ 25,000
Mezzanine Loans | Office Building - London
Participating Mortgage Loans [Line Items]
Debt instrument, face amount						8,900	6.7
Remaining unfunded commitment						$ 25,300	£ 19.1

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Participations Sold - Schedule of participations sold (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Participating Mortgage Loans [Line Items]
Participations sold	$ 27,662			$ 27,662		$ 34,974
Payment in kind interest	13,700		$ 12,400	30,600	$ 24,800
Commercial Mortgage Portfolio Segment
Participating Mortgage Loans [Line Items]
Participations sold	27,662			27,662		9,217
Subordinate Mortgage Portfolio Segment
Participating Mortgage Loans [Line Items]
Participations sold	$ 0			$ 0		$ 25,757
Payment in kind interest		$ 800			$ 0

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Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands		Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued dividends payable		$ 52,635		$ 52,768
Accrued interest payable		14,695		13,979
Accounts payable and other liabilities(1)		12,792		4,775
General CECL Allowance on unfunded commitments		2,444	$ 3,794	3,365	$ 4,119	$ 6,059	$ 0
Collateral deposited under derivative agreements		1,620		0
Total	[1]	84,186		$ 74,887
Accounts payable, accrued liabilities and other liabilities of real estate owned		$ 5,100

[1] Includes $2,444 and $3,365 of General CECL Allowance related to unfunded commitments on commercial mortgage loans, subordinate loans and other lending assets, net in 2021 and 2020, respectively.

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Related Party Transactions (Details) $ in Thousands, £ in Millions		1 Months Ended				3 Months Ended				6 Months Ended
		Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Jan. 31, 2020 USD ($)	Jan. 31, 2020 GBP (£)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 GBP (£)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 29, 2021 USD ($)	May 24, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2017 USD ($)
Related Party Transaction [Line Items]
Related party expenses						$ 9,440	$ 9,957			$ 18,804	$ 20,225
Base management fees incurred but not yet paid		$ 9,440				9,440				9,440				$ 9,598
Total carrying value, net		7,520,105				7,520,105	6,496,977			7,520,105	6,496,977			6,496,977
Subordinate Mortgage Portfolio Segment
Related Party Transaction [Line Items]
Total carrying value, net	[1]	866,908				866,908				$ 866,908				1,045,893
Hotel - Washington D.C. | Subordinate Mortgage Portfolio Segment
Related Party Transaction [Line Items]
Debt related to real estate owned, held for investment												$ 110,000	$ 110,000		$ 110,000
Hotel - Washington D.C. | Junior Mezzanine Loans
Related Party Transaction [Line Items]
Total carrying value, net															20,000
Hotel - Washington D.C. | Senior Mezzanine Loans
Related Party Transaction [Line Items]
Total carrying value, net															$ 24,500
Sale of Mezzanine Loan
Related Party Transaction [Line Items]
Proceeds from sale of loan				$ 81,300	£ 62.2			$ 81,300	£ 62.2
Sale of Unfunded Commitment of Senior Mortgage
Related Party Transaction [Line Items]
Proceeds from sale of loan				$ 65,300	£ 50.0			$ 65,300	£ 50.0
Arrangement fees
Related Party Transaction [Line Items]
Related party expenses		400	$ 200
Limited Liability Company
Related Party Transaction [Line Items]
Rate of management fees										1.50%
Extension period										1 year
Period of termination										180 days
Termination fee calculation period										24 months
Limited Liability Company | Management fees
Related Party Transaction [Line Items]
Base management fees incurred but not yet paid		$ 9,400				9,400				$ 9,400				$ 9,600
Affiliated Entity
Related Party Transaction [Line Items]
Debt instrument, face amount			$ 30,000
Affiliated Entity | Management fees
Related Party Transaction [Line Items]
Related party expenses						9,400	10,000			18,800	20,200
Affiliated Entity | Reimbursements
Related Party Transaction [Line Items]
Related party expenses						$ 700	$ 500			$ 1,300	$ 1,100

[1] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.

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Share-Based Payments - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Apr. 16, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized stock-based compensation expense	$ 4,357	$ 4,252	$ 8,744	$ 8,515
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense	400		400
RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense	$ 25,700		$ 25,700
LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized					7,000,000
Common stock, shares delivered (in shares)			553,008	503,251
LTIP | RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units vested (in shares)			953,397	868,157
Adjustments to additional paid in capital, income tax deficiency from share-based compensation			$ 4,400	$ 6,500

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Share-Based Payments - Summary of Grants, Exchanges and Forfeitures of Restricted Stock and RSUs (Details) - LTIP $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Grant date fair value | $	$ 0.2
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares)	82,235
Granted (in shares)	35,185
Vested (in shares)	(82,235)
Forfeitures (in shares)	0
Outstanding, ending balance (in shares)	35,185
RSU
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, beginning balance (in shares)	2,455,853
Granted (in shares)	14,685
Vested (in shares)	0
Forfeitures (in shares)	(44,205)
Outstanding, ending balance (in shares)	2,426,333

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Share-Based Payments - Summary of Restricted Stock and RSU Vesting Dates (Details) - LTIP	Jun. 30, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	2,461,518
2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	1,136,525
2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	860,815
2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	459,282
2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	4,896
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	35,185
Restricted Stock | 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	0
Restricted Stock | 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	35,185
Restricted Stock | 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	0
Restricted Stock | 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	0
RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	2,426,333
RSU | 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	1,136,525
RSU | 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	825,630
RSU | 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	459,282
RSU | 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting (in shares)	4,896

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Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Class of Stock [Line Items]
Common stock, shares authorized	450,000,000	450,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	139,884,060	139,295,867
Common stock, shares, outstanding (in shares)	139,884,060	139,295,867
Preferred stock, shares issued	6,770,393	6,770,393
Preferred stock, shares outstanding	6,770,393	6,770,393
Remaining authorized repurchase amount	$ 172.2
Series B Preferred Stock
Class of Stock [Line Items]
Preferred stock, fixed-to-floating percentage	8.00%

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Stockholders' Equity - Dividends Declared (Details) - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Class of Stock [Line Items]
Dividends declared on common stock (in dollars per share)	$ 0.35	$ 0.35	$ 0.35	$ 0.40	$ 0.70	$ 0.75
Dividends declared (in dollars per share)	0.50	$ 0.50	0.50	$ 0.50
Common Stock
Class of Stock [Line Items]
Dividends declared on common stock (in dollars per share)	0.35		0.35		0.70	0.75
Series B Preferred Stock
Class of Stock [Line Items]
Dividends declared (in dollars per share)	$ 0.50		$ 0.50		$ 1.00	$ 1.00

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Stockholders' Equity - Common Stock Repurchases (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Equity [Abstract]
Shares Repurchased	0	5,495,976	0	5,795,976
Share repurchase, average price per share (in dollars per share)	$ 0	$ 7.96	$ 0	$ 7.96

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Schedule of Equity Method Investments [Line Items]
Total damages including punitive	$ 70,000
Damages sought by plaintiff	700,000
Unfunded loan commitments	1,258,306	$ 1,399,989
Commercial Mortgage and Subordinated Portfolio Segment
Schedule of Equity Method Investments [Line Items]
Unfunded loan commitments	$ 1,300,000
Term of unfunded loan commitment	3 years 8 months 12 days

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Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value of Company's Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Participations sold	$ (27,662)	$ (34,974)
Commercial Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Participations sold	(27,662)	(9,217)
Subordinate Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Participations sold	0	(25,757)
Carrying Value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cash and cash equivalents	204,581	325,498
Carrying Value | Level III
Accounts, Notes, Loans and Financing Receivable [Line Items]
Secured debt arrangements, net	(3,679,906)	(3,436,672)
Participations sold	(27,662)	(34,974)
Debt related To real estate owned, held for sale	0	(33,000)
Carrying Value | Level III | Secured Debt
Accounts, Notes, Loans and Financing Receivable [Line Items]
Senior secured term loans, net	(774,569)	(483,465)
Carrying Value | Level III | Senior Notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Senior secured term loans, net	(493,694)	0
Carrying Value | Level III | 2022 Notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(341,720)	(340,361)
Carrying Value | Level III | 2023 Notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(226,065)	(225,293)
Carrying Value | Level III | Commercial Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	6,653,197	5,451,084
Carrying Value | Level III | Subordinate Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	866,908	1,045,893
Estimate of Fair Value Measurement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cash and cash equivalents	204,581	325,498
Estimate of Fair Value Measurement | Level III
Accounts, Notes, Loans and Financing Receivable [Line Items]
Secured debt arrangements, net	(3,679,906)	(3,436,672)
Participations sold	(27,695)	(34,919)
Debt related To real estate owned, held for sale	0	(33,000)
Estimate of Fair Value Measurement | Level III | Secured Debt
Accounts, Notes, Loans and Financing Receivable [Line Items]
Senior secured term loans, net	(784,112)	(475,263)
Estimate of Fair Value Measurement | Level III | Senior Notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Senior secured term loans, net	(496,145)	0
Estimate of Fair Value Measurement | Level III | 2022 Notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(359,904)	(327,381)
Estimate of Fair Value Measurement | Level III | 2023 Notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes	(234,747)	(214,875)
Estimate of Fair Value Measurement | Level III | Commercial Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	6,508,986	5,361,948
Estimate of Fair Value Measurement | Level III | Subordinate Mortgage Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 774,257	$ 1,027,582

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Net Income (Loss) per Share - Basic and Diluted Net Income per Share of Common Stock Using Two-Class Method (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Basic Earnings
Net income (loss)	$ 67,691	$ 58,335	$ 60,201	$ (127,842)	$ 126,026	$ (67,641)
Less: Preferred dividends	(3,385)		(3,385)		(6,770)	(6,770)
Net income (loss) available to common stockholders	64,306		56,816		119,256	(74,411)
Less: Dividends on participating securities	(849)		(719)		(1,697)	(1,521)
Basic Earnings	63,457		56,097		117,559	(75,932)
Diluted Earnings
Net income (loss) available to common stockholders	63,457		56,097		117,559	(75,932)
Add: Dividends on participating securities	849		719		1,697
Add: Interest expense on Convertible Notes	8,261		8,678		16,506
Diluted Earnings	$ 72,567		$ 65,494		$ 135,762	$ (75,932)
Number of Shares:
Basic weighted-average shares of common stock outstanding	139,884,060		151,523,513		139,845,178	152,735,852
Diluted weighted-average shares of common stock outstanding	170,832,186		182,083,702		170,812,544	152,735,852
Earnings Per Share Attributable to Common Stockholders
Basic (in dollars per share)	$ 0.45		$ 0.37		$ 0.84	$ (0.50)
Diluted (in dollars per share)	$ 0.42		$ 0.36		$ 0.79	$ (0.50)

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Net Income (Loss) per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities - Convertible Notes (in shares)			28,533,271
RSU
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities - Convertible Notes (in shares)	2,414,855	2,017,080	2,434,095	2,026,918

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		6 Months Ended
		Jul. 26, 2021	Jul. 15, 2021	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Subsequent Event [Line Items]
Total carrying value, net				$ 7,520,105	$ 6,496,977	$ 7,520,105	$ 6,496,977	$ 6,496,977
Preferred stock, shares outstanding				6,770,393		6,770,393		6,770,393
Preferred stock, par value (in dollars per share)				$ 0.01		$ 0.01		$ 0.01
Payment in kind interest				$ 13,700	$ 12,400	$ 30,600	$ 24,800
Commercial Mortgage Portfolio Segment
Subsequent Event [Line Items]
Total carrying value, net	[1],[2]			6,653,197		6,653,197		$ 5,451,084
Mezzanine Loans
Subsequent Event [Line Items]
Total carrying value, net				423,000		423,000
Debt instrument, face amount				$ 297,000		297,000
Payment in kind interest						$ 124,000
Subsequent Event
Subsequent Event [Line Items]
Proceeds from loan repayments		$ 297,300
Preferred stock dividend percentage			7.25%
Subsequent Event | Commercial Mortgage Portfolio Segment | First Mortgage
Subsequent Event [Line Items]
Investment in mortgage loans on real estate, face amount of mortgages		441,000
Mortgage loans on real estate, funded amount of mortgages		141,000
Funded amount of mortgages		32,000
Subsequent Event | Senior Mezzanine Loans
Subsequent Event [Line Items]
Total carrying value, net		230,000
Subsequent Event | Junior Mezzanine A Loan
Subsequent Event [Line Items]
Total carrying value, net		112,000
Subsequent Event | Junior Mezzanine B Loan
Subsequent Event [Line Items]
Total carrying value, net		$ 81,000
Subsequent Event | Series B Preferred Stock
Subsequent Event [Line Items]
Preferred stock, shares outstanding			6,770,393
Subsequent Event | Cumulative Preferred Stock
Subsequent Event [Line Items]
Convertible preferred stock, shares issued upon conversion			6,770,393
Preferred stock, par value (in dollars per share)			$ 0.01
Preferred stock, liquidation preference per share (in dollars per share)			$ 25.00

[1] Includes $5,489,059 and $5,418,999 pledged as collateral under secured debt arrangements in 2021 and 2020, respectively

[2] Net of $183,199 and $213,102 CECL Allowances in 2021 and 2020, respectively, comprised of $145,000 and $175,000 Specific CECL Allowance and $38,199 and $38,102 General CECL Allowance, respectively.