10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

 OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-55188

REALTY FINANCE TRUST, INC.

(Exact name of registrant as specified in its charter) 

Maryland	46-1406086
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
9 West 57th Street, #4920 New York, New York	10019
(Address of Principal Executive Office)	(Zip Code)

(212) 588-6770

(Registrant’s Telephone Number, Including Area Code)

405 Park Avenue, 14th Floor

New York, New York 10022

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).Yes x No o

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

(Do not check if a smaller reporting company)

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

The number of shares of the registrant's common stock, $0.01 par value, outstanding as of October 31, 2016 was 31,683,529.

TABLE OF CONTENTS

	Page
PART I
Item 1. Consolidated Financial Statements and Notes (unaudited)	1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	42
Item 4. Controls and Procedures	42
PART II
Item 1. Legal Proceedings	44
Item 1A. Risk Factors	44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3. Defaults Upon Senior Securities	44
Item 4. Mine Safety Disclosures	44
Item 5. Other Information	44
Item 6. Exhibits	45
Signatures	46

i

PART I

Item 1. Consolidated Financial Statements.

REALTY FINANCE TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

	September 30, 2016			December 31, 2015
ASSETS	(Unaudited)
Cash and cash equivalents	$	60,873		$	14,807
Restricted cash	5,000			5,366
Commercial mortgage loans, held for investment, net of allowance of $1,609 and $888 (1)	1,119,293			1,124,201
Real estate securities, available for sale, at fair value	57,639			130,754
Receivable for loan repayment	528			1,307
Accrued interest receivable (2)	5,316			5,360
Prepaid expenses and other assets	763			689
Total assets	$	1,249,412		$	1,282,484
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations	$	287,505		$	287,229
Repurchase agreements - commercial mortgage loans	241,868			206,239
Repurchase agreements - real estate securities	72,698			117,211
Interest payable (3)	1,705			792
Distributions payable	5,335			5,552
Accounts payable and accrued expenses	2,225			6,805
Due to affiliates	2,798			4,327
Total liabilities	614,134			628,155
Commitment and Contingencies (See Note 8)
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of September 30, 2016 and December 31, 2015	—			—
Convertible stock ("promote shares"); $0.01 par value, 1,000 shares authorized, issued and outstanding as of September 30, 2016 and December 31, 2015	—			1
Common stock, $0.01 par value, 949,999,000 shares authorized, 31,605,701 and 31,385,280 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	316			314
Additional paid-in capital	697,684			691,590
Accumulated other comprehensive loss	(2,219		)	(2,254		)
Accumulated deficit	(60,503		)	(35,322		)
Total stockholders' equity	635,278			654,329
Total liabilities and stockholders' equity	$	1,249,412		$	1,282,484

⁽¹⁾  Includes $426,278 and $425,733 of loans net of allowance of $703 and $422 pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of September 30, 2016 and December 31, 2015, respectively.

⁽²⁾  Includes $1,026 and $1,048 of interest receivable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

⁽³⁾  Includes $513 and $513 of interest payable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1

REALTY FINANCE TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Interest Income:
Interest income	$	20,250		$	16,252		$	60,763		$	38,341
Less: Interest expense	7,317			3,469			17,478			7,925
Net interest income	12,933			12,783			43,285			30,416
Operating Expenses:
Asset management and subordinated performance fee	1,066			2,405			7,091			3,741
Acquisition fees	255			1,777			635			5,958
Administrative services expenses	2,480			—			3,835			—
Professional fees	2,154			659			4,226			3,136
Other expenses	686			439			2,092			919
Total Operating Expenses	6,641			5,280			17,879			13,754
Loan loss recovery/(provision)	113			(78		)	(721		)	(302		)
Realized loss on sale of real estate securities	(1,032		)	—			(1,032		)	—
Net income	$	5,373		$	7,425		$	23,653		$	16,360
Basic net income per share	$	0.17		$	0.28		$	0.75		$	0.74
Diluted net income per share	$	0.17		$	0.28		$	0.75		$	0.74
Basic weighted average shares outstanding	31,516,876			26,684,913			31,622,796			22,035,227
Diluted weighted average shares outstanding	31,523,911			26,690,964			31,629,070			22,040,110

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2

REALTY FINANCE TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016		2015			2016		2015
Net income	$	5,373	$	7,425		$	23,653	$	16,360
Unrealized (loss)/gain on available-for-sale securities	2,608		(1,008		)	35		(1,010		)
Comprehensive income attributable to Realty Finance Trust, Inc.	$	7,981	$	6,417		$	23,688	$	15,350

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

REALTY FINANCE TRUST, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except for share data)

(Unaudited)

	Convertible Stock					Common Stock
	Number of Shares		Amount			Number of Shares		Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, December 31, 2015	1,000		$	1		31,385,280		$	314		$	691,590		$	(2,254	)	$	(35,322	)	$	654,329
Common stock repurchases	—		—			(540,125	)	(5		)	(13,026		)	—			—			(13,031		)
Common stock issued through distribution reinvestment plan	—		—			755,798		7			19,092			—			—			19,099
Share-based compensation	—		—			4,748		—			27			—			—			27
Net income	—		—			—		—			—			—			23,653			23,653
Distributions declared	—		—			—		—			—			—			(48,834		)	(48,834		)
Conversion of convertible stocks	(1,000	)	(1		)	—		—			1			—			—			—
Other comprehensive loss	—		—			—		—			—			35			—			35
Balance, September 30, 2016	—		$	—		31,605,701		$	316		$	697,684		$	(2,219	)	$	(60,503	)	$	635,278

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

REALTY FINANCE TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net income	$	23,653		$	16,360
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization and (discount accretion), net	(1,761		)	(877		)
Accretion of deferred commitment fees	(1,169		)	(603		)
Amortization of deferred financing costs	2,989			1,872
Share-based compensation	27			24
Realized loss on sale of real estate securities	1,032			—
Loan loss provision	721			302
Changes in assets and liabilities:
Accrued interest receivable	1,213			(2,041		)
Prepaid expenses and other assets	49			(416		)
Accounts payable and accrued expenses	1,415			519
Due to affiliates	(1,529		)	1,353
Interest payable	913			304
Net cash provided by operating activities	$	27,553		$	16,797
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans	$	(42,236	)	$	(526,919	)
Purchase of real estate securities	—			(53,304		)
Proceeds from sale of real estate securities	69,957			—
Principal repayments received on commercial mortgage loans	48,906			45,542
Principal repayments received on real estate securities	2,218			1,573
Net cash provided by (used in) investing activities	$	78,845		$	(533,108	)
Cash flows from financing activities:
Proceeds from issuances of common stock	$	—		$	316,614
Common stock repurchases	(19,026		)	(2,899		)
Payments of offering costs and fees related to common stock issuances	—			(36,981		)
Borrowings on repurchase agreements - commercial mortgage loans	104,626			244,178
Repayments of repurchase agreements - commercial mortgage loans	(68,997		)	(18,257		)
Borrowings on repurchase agreements - real estate securities	1,019,598			50,274
Repayments of repurchase agreements - real estate securities	(1,064,111		)	(3,946		)
Increase in restricted cash related to financing activities	366			(1,339		)
Payments of deferred financing costs	(2,836		)	—
Distributions paid	(29,952		)	(18,215		)
Net cash (used in) provided by financing activities	$	(60,332	)	$	529,429
Net change in cash and cash equivalents	$	46,066		$	13,118
Cash and cash equivalents, beginning of period	14,807			386
Cash and cash equivalents, end of period	$	60,873		$	13,504
Supplemental disclosures of cash flow information:
Interest paid	$	13,576		$	5,749
Supplemental disclosures of non-cash flow information:
Common stock issued through distribution reinvestment plan	19,099			13,643
Receivable for common stock issued	—			3,065

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

Note 1 - Organization and Business Operations

Realty Finance Trust, Inc. (the "Company") was incorporated in Maryland on November 15, 2012 and conducts its operations to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2013. Substantially all of the Company's business is conducted through Realty Finance Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the units of limited partner interests in the OP.

Benefit Street Partners L.L.C. serves as the Company's advisor (the "Advisor") pursuant to an advisory agreement executed on September 29, 2016 (the “Advisory Agreement”). The Advisor, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), is a credit-focused alternative asset management firm with over $14 billion in assets under management. The Advisor manages assets across a broad range of complementary credit strategies, including high yield, levered loans, private/opportunistic debt, liquid credit, structured credit and commercial real estate debt. The Advisor has over 115 professionals, including a 34-person team dedicated to the Advisor's real estate platform. The Advisor is in partnership with Providence Equity Partners L.L.C., a global private equity firm with a combined $47 billion in assets under management. Prior to September 29, 2016, Realty Finance Advisor, LLC ("Former Advisor") was the Company's advisor. The Former Advisor is controlled by AR Global Investments, LLC ("AR Global"). The Advisor is an affiliate of Providence Equity Partners L.L.C.

The Company is in business to originate, acquire and manage a diversified portfolio of commercial real estate debt secured by properties located both within and outside of the United States. The Company also invests in commercial real estate securities. Commercial real estate debt may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Real estate securities may include commercial mortgage-backed securities ("CMBS"), senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs").

The Company has no employees. The Company has retained the Advisor to manage the Company's affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of the Company's assets and the operations of the Company.

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements and related footnotes are unaudited and have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2015, which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2016. There have been no significant changes to the Company's significant accounting policies during the three and nine months endedSeptember 30, 2016, as described below.

Principles of Consolidation

The Company consolidates all entities that the Company controls through either majority ownership or voting rights. In addition, the Company consolidates all variable interest entities ("VIE") of which the Company is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

6

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a VIE for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP.

The accompanying consolidated financial statements include the accounts of a collateralized loan obligation ("CLO") issued and securitized by a wholly owned subsidiary of the Company. The Company has determined the CLO is a VIE of which the Company's subsidiary is the primary beneficiary. The Company has disclosed the assets and liabilities of the CLO on the face of the consolidated balance sheet in accordance with ASC 810 - Consolidation.

Allowance for Loan Losses

The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is increased through the loan loss provision on the Company's consolidated statement of operations and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as cash in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes a general, formula-based component and an asset-specific component.

General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company currently estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced any losses, and takes into account current collateral and economic conditions affecting the probability and severity of losses when establishing the allowance for loan losses. The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans.

The Company designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-performing and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged.

7

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

Per Share Data

The Company calculates basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares issuable in connection with the restricted stock plan and if convertible shares were exercised, except when doing so would be anti-dilutive.

Reportable Segments

The Company conducts its business through the following segments:

• The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

• The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

See Note 12 - Segment Reporting for further information regarding the Company's segments.

Recently Issued Accounting Pronouncements

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are VIEs or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership and affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption was permitted, including adoption in an interim period. The Company elected to adopt this guidance effective January 1, 2016. The Company has evaluated the impact of the adoption of the new guidance on its consolidated financial statements and has determined the Company’s OP is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the Company's partnership interest is considered a majority voting interest in a business and the assets of the OP can be used for purposes other than settling its obligation, such as paying distributions. As such, the new guidance did not have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued an update that changes the accounting for certain aspects of share-based compensation. Among other things, the revised guidance allows companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the provisions of this guidance beginning January 1, 2016, electing to account for forfeitures when they occur, and determined that there is no impact to the Company’s consolidated financial position, results of operations and cash flows.

In March 2016, the FASB issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

In June 2016, the FASB issued guidance that changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance.

In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

8

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

Note 3 - Commercial Mortgage Loans

The following table is a summary of the Company's commercial mortgage loan carrying values by class (in thousands):

	September 30, 2016		December 31, 2015
Senior loans	$	905,876	$	894,075
Mezzanine loans	205,026		221,014
Subordinated loans	10,000		10,000
Total gross carrying value of loans	1,120,902		1,125,089
Less: Allowance for loan losses	1,609		888
Total commercial mortgage loans, net	$	1,119,293	$	1,124,201

The following table presents the activity in the Company's allowance for loan losses (in thousands):

	Nine Months Ended September 30, 2016		Nine Months Ended September 30, 2015
Beginning of period	$	888	$	570
Provision for loan losses	721		302
Charge-offs	—		—
Recoveries	—		—
Ending allowance for loan losses	$	1,609	$	872

As of September 30, 2016 and December 31, 2015, the Company's commercial mortgage loan portfolio comprised 73 and 77 loans, respectively.

	September 30, 2016				December 31, 2015
Loan Type	Par Value		Percentage		Par Value		Percentage
Office	$	320,195	28.4	%	$	307,876	27.2	%
Multifamily	323,031		28.6	%	305,129		26.9	%
Hospitality	173,526		15.4	%	171,752		15.1	%
Retail	151,584		13.4	%	158,784		14.0	%
Mixed Use	107,531		9.5	%	138,798		12.2	%
Industrial	52,688		4.7	%	52,107		4.6	%
	$	1,128,555	100.0	%	$	1,134,446	100.0	%

Credit Characteristics

As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

Investment Rating	Summary Description
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

9

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

All commercial mortgage loans are assigned an initial risk rating of 2.0. As of September 30, 2016 and December 31, 2015, the weighted average risk rating of loans was 2.1 and 2.0, respectively. As of September 30, 2016 and December 31, 2015, the Company did not have any loans that were past due on their payments, in non-accrual status or impaired.

For the nine months endedSeptember 30, 2016 and September 30, 2015, the activity in the Company's loan portfolio was as follows (in thousands):

	Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Balance at Beginning of Year	$	1,124,201		$	456,884
Acquisitions and originations	42,236			526,919
Dispositions	—			—
Principal repayments	(48,127		)	(45,542		)
Discount accretion and premium amortization*	1,704			873
Provision for loan losses	(721		)	(302		)
Balance at End of Period	$	1,119,293		$	938,832

________________________

* Includes amortization of capitalized acquisition fees and expenses.

Note 4 - Real Estate Securities

The following is a summary of the Company's real estate securities, CMBS (in thousands):

		Weighted Average
	Number of Investments	Interest Rate		Maturity	Par Value		Fair Value
September 30, 2016	7	5.27	%	September 2019	$	60,000	$	57,639
December 31, 2015	16	4.71	%	February 2019	133,183		130,754

The Company classified its CMBS as available-for-sale as of September 30, 2016 and December 31, 2015. These investments are reported at fair value in the consolidated balance sheet with changes in fair value recorded in accumulated other comprehensive income or loss. The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of September 30, 2016 and December 31, 2015 (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2016	$	59,858	$	—	$	(2,219	)	$	57,639
December 31, 2015	133,008		—		(2,254		)	130,754

As of September 30, 2016, the Company held 7 CMBS positions for an aggregate carrying value of $59.9 million, with an unrealized loss of $2.2 million, of which 6 positions had a total unrealized loss of $0.7 million for a period greater than 12 months. The Company does not believe any of the positions are other than temporarily impaired based on current market spreads. The Company does not intend to dispose the CMBS positions nor does the Company believe it is more likely than not that the Company will be required to dispose these positions before recovery of their amortized cost basis.

The Company has recognized loss of approximately $1.0 million for the three and nine months endedSeptember 30, 2016, recorded within the realized loss on sale of real estate securities in the consolidated statement of operations. The Company did not have any realized losses during the three and nine months endedSeptember 30, 2015.

Note 5 - Debt

Repurchase Agreements - Commercial Mortgage Loans

As of September 30, 2016, the Company was party to repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility") and Barclays Bank PLC (the "Barclays Repo Facility"). The JPM Repo Facility provides up to $150.0 million in advances. The Barclays Repo Facility provides up to $150.0 million in advances. Both, the JPM Repo Facility and Barclays Repo Facility are subject to various adjustments. The initial maturity date of the JPM Repo Facility was

10

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

June 18, 2016, with a one year extension at the Company’s option. The Company exercised the extension option with the JPM Repo Facility lender, extending the maturity date to June 17, 2017. The Company entered into an amendment of the Barclays Repo Facility, dated as of September 2, 2016 (the “Barclays Amendment”), upon the payment of an amendment fee, pursuant to which the maturity date of the Barclays Repo Facility was extended to October 6, 2016. Subsequent to September 30, 2016, the JPM Repo Facility was amended to, among other things, increase the maximum advance capacity to $300 million. The proceeds from the increase in the size of the JPM Repo Facility were used to pay off the outstanding balance on the Barclays Repo Facility and the Barclays Repo Facility was terminated. Refer to Note 13-Subsequent Events. As of September 30, 2016, the Company was in compliance with all debt covenants.

As of September 30, 2016 and December 31, 2015, the Company had $130.0 million and $84.3 million outstanding under the JPM Repo Facility. Advances under the JPM Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.25% to 4.5%, depending on the attributes of the purchased assets. As of September 30, 2016 and December 31, 2015, the weighted average interest rate on advances was 2.8% and 3.1%, respectively. The Company incurred $3.4 million and $4.2 million in interest expense on the JPM Repo Facility for the nine months ended September 30, 2016 and 2015, respectively, excluding amortization of deferred financing cost.

As of September 30, 2016 and December 31, 2015, the Company had $111.9 million and $121.9 million outstanding under the Barclays Repo Facility. As of September 30, 2016 and December 31, 2015, the weighted average interest rate on advances was 3.1% and 2.4%, respectively. The Company incurred $4.7 million and $3.1 million of interest expense on the Barclays Repo Facility for the nine months ended September 30, 2016 and 2015, respectively, excluding amortization of deferred financing cost. The Barclays Repo Facility was terminated on October 5, 2016.

The JPM Repo Facility and the Barclays Repo Facility generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. Should the value of the Company’s collateral decrease, whether as a result of deteriorating credit quality, an increase in credit market spreads or otherwise, resulting margin calls may cause an adverse change in the Company’s liquidity position.

Repurchase Agreements - Real Estate Securities

The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. Below is a summary of the Company's MRAs as of September 30, 2016 and December 31, 2015 (in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (*)		Interest Rate		Days to Maturity
As of September 30, 2016
J.P. Morgan Securities LLC	$	65,295	$	65	$	102,663	2.38	%	14
Citigroup Global Markets, Inc.	3,878		1		4,807		1.88	%	26
Wells Fargo Securities, LLC	3,525		3		4,813		1.86	%	12
Total/Weighted Average	$	72,698	$	69	$	112,283	2.33	%	15
As of December 31, 2015
J.P. Morgan Securities LLC	$	86,898	$	108	$	130,618	2.03	%	8
Citigroup Global Markets, Inc.	26,619		71		35,528		2.00	%	45
Wells Fargo Securities, LLC	3,694		3		4,925		1.67	%	13
Total/Weighted Average	$	117,211	$	182	$	171,071	2.01	%	17

* Includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

Collateralized Loan Obligation

On October 19, 2015, RFT 2015-FL1 Issuer, Ltd. (the “Issuer”) and RFT 2015-FL1 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, entered into an indenture with the OP, as advancing agent, U.S. Bank

11

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

National Association as note administrator and U.S. Bank National Association as trustee, which governs the issuance of approximately $350.2 million principal balance secured floating rate notes (the “Notes”). In addition, concurrently with the issuance of the Notes, the Issuer also issued 78,188,494 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares”), which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities.

The Notes are collateralized by interests in a pool of 28 mortgage assets having a total principal balance of $428.4 million (the “Mortgage Assets”) originated by a subsidiary of the Company. The sale of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October 19, 2015, between the Company and the Issuer. In connection with the securitization, the Issuer and Co-Issuer offered and sold the following classes of Notes to third parties: Class A, Class B, Class C. A wholly owned subsidiary of the Company retained approximately $56.0 million of the total $76.0 million of Class C and all of the preferred equity in the Issuer. The retained Class C and its related interest income and the preferred equity are eliminated in the Company's consolidated financial statements. The Company, as the holder of preferred equity in the Issuer, will absorb the first losses of the CLO, which may have a negative impact to the Company's result of operations. The issuance of the CLO also results in an increase in interest expense within the consolidated statement of operations. The following table represents the terms of the CLO issued.

Facility ($000s)	Par Value Issued		Par Value Outstanding (*)		Interest Rate	Maturity Date
As of September 30, 2016
Tranche A	$	231,345	$	231,345	1M LIBOR + 175	8/1/2030
Tranche B	42,841		42,841		1M LIBOR + 388	8/1/2030
Tranche C	76,044		20,000		1M LIBOR + 525	8/1/2030
	$	350,230	$	294,186
As of December 31, 2015
Tranche A	$	231,345	$	231,345	1M LIBOR + 175	8/1/2030
Tranche B	42,841		42,841		1M LIBOR + 388	8/1/2030
Tranche C	76,044		20,000		1M LIBOR + 525	8/1/2030
	$	350,230	$	294,186

________________________

* Excludes $56,044 and $56,044 of Tranche C of RFT issued CLO held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

The below table reflects the total assets and liabilities of the Company's only CLO. The CLO is considered a VIE and is consolidated into the Company's consolidated financial statements as of September 30, 2016 and December 31, 2015 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLO because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

12

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

Assets ($000s)	September 30, 2016		December 31, 2015
Cash	$	5	$	5
Commercial mortgage loans, held for investment, net of allowance of $703 and $422 (1)	426,278		425,733
Accrued interest receivable	1,026		1,048
Total Assets	$	427,309	$	426,786
Liabilities
Notes payable (2)(3)	$	343,295	$	342,998
Interest payable	513		513
Total Liabilities	$	343,808	$	343,511

________________________

⁽¹⁾ The balance is presented net of allowance for loan loss of $703 and $422 as of September 30, 2016 and December 31, 2015, respectively. The commercial mortgage loans balance as of December 31, 2015 of $426,155 as disclosed in Note 5 to the consolidated financial statements included in the 2015 Form 10-K was not net of allowance for loan loss of $422.

⁽²⁾ Includes $55,790 and $55,769 of Tranche C of RFT issued CLO held by the Company, which eliminates within the Collateral loan obligations line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

⁽³⁾ The balance is presented net of deferred financing cost and discount of $6,935 and $7,232 as of September 30, 2016 and December 31, 2015, respectively. The notes payable balance as of December 31, 2015 of $348,269 as disclosed in Note 5 to the consolidated financial statements included in the 2015 Form 10-K was not net of deferred financing cost of $5,271.

Note 6 - Net Income Per Share

The following table is a summary of the basic and diluted net income per share computation for the three and nine months endedSeptember 30, 2016 and 2015, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Net income (in thousands)	$	5,373	$	7,425	$	23,653	$	16,360
Basic weighted average shares outstanding	31,516,876		26,684,913		31,622,796		22,035,227
Unvested restricted shares	7,035		6,051		6,274		4,883
Diluted weighted average shares outstanding	31,523,911		26,690,964		31,629,070		22,040,110
Basic net income per share	$	0.17	$	0.28	$	0.75	$	0.74
Diluted net income per share	$	0.17	$	0.28	$	0.75	$	0.74

Note 7 - Common Stock

As of September 30, 2016 and December 31, 2015, the Company had 31,605,701 and 31,385,280 shares of common stock outstanding, respectively, including shares issued pursuant to the DRIP and unvested restricted shares. As of September 30, 2016 and December 31, 2015, the Company had received total proceeds of $755.5 million and $755.5 million, respectively, excluding shares issued pursuant to the DRIP and share-based compensation.

On December 30, 2014, the Company filed with the Maryland State Department of Assessments and Taxation articles supplementary to its charter that reclassified 1,000 authorized but unissued shares of the Company’s common stock as shares of convertible stock and set the terms of such convertible shares. The Company then issued 1,000 convertible shares to the Former Advisor for $1.00 per share. The convertible shares automatically convert to shares of common stock upon the first occurrence of certain triggering events (the "Triggering Event"), including the termination of the advisory agreement between the Former Advisor and the Company under certain circumstances. In general, but with certain exceptions as outlined in the articles supplementary, each convertible share will convert into a number of common shares equal to 1/1000 of the quotient of (a) the conversion product (the product of 0.15 times the amount, if any, by which (i) the sum of the enterprise value as of the date of the Triggering Event plus total distributions paid to the Company’s stockholders through the date of the Triggering Event

13

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

exceeds (ii) the sum of the Company's stockholders’ invested capital plus a 6.0% return as of the date of the Triggering Event) divided by (b) the quotient of the enterprise value divided by the number of shares of the Company’s common stock outstanding (on an as-converted basis) on the date of the Triggering Event. The conversion product will be reduced by the amounts payable pursuant to the annual subordinated performance fee as realized appreciation in the Company’s assets during the time that the Former Advisor or one of its affiliates acts as the Company’s advisor. Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a Triggering Event had occurred and, based on the Company’s determination of the enterprise value of the Company on the date of the Triggering Event, the total distributions paid to the Company’s stockholders through the date of the Triggering Event, and the sum of the Company's stockholders’ invested capital as of the date of the Triggering Event, that the convertible shares converted into a number of common shares equal to zero. As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion.

Distributions

In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate federal income taxes.

In May 2013, the Company's board of directors authorized, and the Company declared, a distribution payable on a monthly basis to stockholders of record on each day at a rate equal to $0.00565068493 per day, which is equivalent to $2.0625 per annum, per share of common stock. In March 2016, the Company's board of directors ratified the existing distribution amount a change to the daily distribution amount equivalent to $2.0625 per annum and for calendar year 2016, affirmed a change to the daily distribution amount to $0.0056352459 per day per share of common stock, effective January 1, 2016, to accurately reflect that 2016 is a leap year. The Company's distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured. The Company distributed $49.1 million during the nine months endedSeptember 30, 2016, comprised of $30.0 million in cash and $19.1 million in shares of common stock issued under the DRIP. The Company distributed $31.8 million during the nine months ended September 30, 2015, comprised of $18.2 million in cash and $13.6 million in shares of common stock issued under the DRIP. On November 10, 2016 the Company’s board of directors changed the DRIP offer price to $20.05, which is equal to the estimated per-share NAV as of September 30, 2016 approved by the board of directors. The price change will apply to the reinvestment of distributions commencing with October 2016 distributions.

Share Repurchase Program

The Company's Board unanimously approved an amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016. The SRP enables stockholders to sell their shares to the Company. Subject to certain conditions, stockholders that purchased shares of the Company's common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period.

The repurchase price per share for requests other than for death or disability will be equal to the most-recent estimated net asset value per share of the Company's common stock calculated by the Company's Advisor and approved by the Company's board of directors in accordance with the Company's valuation guidelines, or estimated per-share NAV, multiplied by a percentage equal to (i) 92.5%, if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95%, if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5%, if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100%, if the person seeking repurchase has held his or her shares for a period greater than four years. In the case of requests for death or disability, the repurchase price per share will be equal to the estimated per-share NAV at the time of repurchase.

Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same

14

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

fiscal semester through the issuance of common stock pursuant to any DRIP in effect from time to time, provided that the Board has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. Any repurchase requests received during such fiscal semester will be paid at a price based on the Company's estimated per share NAV applicable on the last day of such fiscal semester, as described above. Due to these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. However, a stockholder may withdraw its request at any time or ask that the Company honors the request when funds are available. Pending repurchase requests will be honored on a pro rata basis. The Company will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made.

Calculations of the Company's estimated per-share NAV will occur periodically, at the discretion of the Board, provided that such calculations will be made at least annually. Following its calculation, the Company's estimated per-share NAV will be disclosed in a periodic report. The most recent calculation of the Company's estimated per-share NAV approved by the Board occurred on November 10, 2016 based on the Company's net asset value as of September 30, 2016 and was equal to $20.05.

When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares.

The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2016:

	Number of Requests	Number of Shares Repurchased(1)	Average Price per Share
Cumulative as of December 31, 2015	301	381,474	$	23.72
January 1 - March 31, 2016	—	—	—
April 1 - June 30, 2016	668	536,240	24.08
July 1 - September 30, 2016	4	3,542	25.27
Cumulative as of September 30, 2016	973	921,256	$	23.94

________________________

¹ As permitted under the SRP, in July 2016, our board of directors authorized, with respect to redemption requests received during the semi-annual period from January 1, 2016 to June 30, 2016, the repurchase of shares validly submitted for repurchase in an amount limited to the proceeds reinvested through our DRIP.  As a result, redemption requests in the amount of 208,470 shares were not fulfilled.

Note 8 - Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of September 30, 2016 and December 31, 2015, the Company had the below unfunded commitments to the Company's borrowers.

Funding Expiration	September 30, 2016		December 31, 2015
2016	$	238	$	890
2017	7,957		16,072
2018	74,745		104,428
2019	10,039		16,939
2023	6,500		—
Total	$	99,479	$	138,329

15

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. Except as noted below, the Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.  On June 6, 2016, an action was filed against the Company and two of its directors in the United States District Court for the Southern District of New York and styled Rurode v. Realty Finance Trust, Inc., et. al., No. 1:16-cv-04553.  The plaintiff’s individual and derivative complaint alleged that the Company made material misstatements in the proxy statement for its 2016 annual stockholder’s meeting related to an alleged planned merger transaction between the Company and an affiliate of its former advisor.  The plaintiff alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and sought to enjoin the Company’s 2016 annual meeting.  On June 28, 2016, the parties filed, and the court subsequently entered,  a stipulation and order of dismissal of the action, but provided that the court would retain jurisdiction to consider any application by plaintiff for an award of attorneys’ fees.  On October 20, 2016, the plaintiff submitted a request for $0.75 million in fees and expenses. The Company intends to oppose that request. The Company did not record any accrual in the September 30, 2016 financial statements related fee and expense request as the Company does not believe it is probable there will be a judgment against the Company that would have a material effect on the Company’s financial statements.

Note 9 - Related Party Transactions and Arrangements

The Company entered into the Advisory Agreement with the Advisor on September 29, 2016.

The Advisor receives an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities; provided, however, that if and when the aggregate purchase price for all investments acquired after the date of the Advisory Agreement reaches $600,000,000, the Company’s obligation to pay acquisition fees to the Advisor shall terminate. The Company reimburses the Advisor for insourced expenses incurred by the Advisor on behalf of the Company related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments. In no event will the total of all acquisition fees and acquisition expenses exceed 4.5% of the principal amount funded with respect to the Company's total portfolio including subsequent fundings to investments in the Company's portfolio.

The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholder’s equity as calculated pursuant to the Advisory Agreement. The Company will pay the Advisor, an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Advisor exceed 10.0% of the aggregate total return for such year. The Company will reimburse the Advisor for expenses incurred related to administrative services such as accounting, legal and other services in accordance with the advisory agreement. Except as noted below, the Company did not make any payments to the Advisor for the three and nine months endedSeptember 30, 2016.

Until September 29, 2016, the Former Advisor served as the Company’s advisor and the Company paid the Former Advisor certain fees and expense reimbursements pursuant to its advisory agreement with the Former Advisor.

The Company also engaged in transactions with affiliates of the Former Advisor and AR Global. Until January 2016, the Company had been engaged in a public offering of its common shares, which was registered with the SEC (the “Offering”). Realty Capital Securities, LLC (the "Former Dealer Manager") served as the dealer manager of the Offering through December 31, 2015.  American National Stock Transfer, LLC, a subsidiary of the parent company of the Former Dealer Manager ("ANST"), provided the Company with transfer agency services through February 2016. RCS Capital Corporation, the parent company of the Company's Former Dealer Manager and certain of its affiliates that provided the Company with services, filed for Chapter 11 bankruptcy protection in January 2016, prior to which they were under common control with AR Global. In May 2016, RCAP and its affiliated debtors emerged from bankruptcy under the new name, Aretec Group, Inc.

Share Ownership

As of September 30, 2016 and December 31, 2015, entities wholly-owned by AR Global owned 52,771 and 8,888 shares of the Company’s outstanding common stock, respectively.

Fees Paid to Affiliates of AR Global in Connection with the Offering

Prior to the termination of the Offering, the Former Dealer Manager received fees and compensation in connection with the sale of the Company’s common stock in the Offering. The Former Dealer Manager received a selling commission of up to 7%

16

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

of the per share purchase price of the Company's offering proceeds before reallowance of commissions earned by soliciting dealers. In addition, the Former Dealer Manager received up to 3% of the gross proceeds from the sale of shares, before reallowance to soliciting dealers, as a dealer manager fee. The Former Dealer Manager was permitted to reallow its dealer manager fee to such soliciting dealers.

The predecessor to AR Global was a party to a services agreement with RCS Advisory Services, LLC, ("RCS Advisory") a subsidiary of the parent company of the Former Dealer Manager, pursuant to which RCS Advisory and its affiliates provided the Company and certain other companies sponsored by AR Global with services (including, without limitation, transaction management, compliance, due diligence, event coordination and marketing services, among others) on a time and expenses incurred basis or at a flat rate based on services performed. The predecessor to AR Global instructed RCS Advisory to stop providing such services in November 2015 and no services have since been provided to the Company by RCS Advisory.

The Company was also party to a transfer agency agreement with ANST, pursuant to which ANST provided the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services), and supervisory services overseeing the transfer agency services performed by a third-party transfer agent. AR Global received written notice from ANST on February 10, 2016 that it would wind down operations by the end of the month and would withdraw as the transfer agent effective February 29, 2016. Subsequently, effective February 26, 2016, the Company entered into a definitive agreement with DST Systems, Inc., a third-party and its previous provider of sub-transfer agency services, to provide the Company directly with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services).

The table below shows the compensation and reimbursement to the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager incurred for services relating to the Offering during the three and nine months ended months ended September 30, 2016 and 2015, respectively, and the associated payable as of September 30, 2016 and December 31, 2015, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2016		2015		2016		2015		September 30, 2016		December 31, 2015
Total commissions and fees incurred from the Former Dealer Manager	$	—	$	9,932	$	—	$	30,700	$	—	$	—
Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager	$	—	$	1,957	$	—	$	5,805	$	480	$	480

The payables as of September 30, 2016 and December 31, 2015 in the table above are included in "Due to affiliates" on the Company's consolidated balance sheets. The fees incurred are recorded within additional paid in capital line in the consolidated balance sheets.

The Company is responsible for organizational and offering costs from the Offering, excluding commissions and Former Dealer Manager fees, up to a maximum of 2.0% of gross proceeds from its Offering of common stock, measured at the end of the Offering. Organizational and offering costs in excess of the 2.0% cap as of the end of the Offering are the Advisor's responsibility. As of September 30, 2016 and December 31, 2015, organizational and offering costs exceeded 2.0% of cap of gross proceeds received from the Offering by $0.8 million and $0.8 million, respectively which has been recorded in Additional Paid-In Capital of the Company's consolidated financial statements as the Former Advisor has not reimbursed the Company for these costs. Subsequent to September 30, 2016, these amounts were reimbursed to the Company.

Fees Paid to Former Advisor in Connection with the Operations of the Company

The Former Advisor received an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities. The Company reimbursed the Former Advisor for expenses incurred by the Former Advisor on behalf of the Company related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal

17

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments. During the three and nine months endedSeptember 30, 2016, acquisition fees of $0.3 million and $0.6 million and for three and nine months endedSeptember 30, 2015, acquisition fees of $1.8 million and $6.0 million, respectively, have been recognized in Acquisition fees within the consolidated statement of operations. In addition, for the three and nine months endedSeptember 30, 2015 the Company capitalized $0.5 million and $2.2 million, of acquisition expenses in Commercial mortgage loans line within the Company's consolidated balance sheets, which will be amortized over the life of each investment using the effective interest method. The Company did not capitalize any acquisitions expenses for the three and nine months ended September 30, 2016.

The Company paid the Former Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 0.75% of the cost of the Company's assets. The asset management fee was based on the lower of the cost of the Company's assets and the fair value of the Company's assets (fair value will consist of the market value of each portfolio investment as determined by the Former Advisor in accordance with the Company's valuation guidelines). During the three and nine months endedSeptember 30, 2016 , the Company incurred $2.3 million and $7.1 million, respectively, in asset management fees. The total asset management fees were incurred to both the Former Advisor and the Advisor, the Former Advisor receiving $2.3 million and $7.1 million, while the amount payable to the Advisor is $26.4 thousand for the three and nine months ended, respectively. During the three and nine months ended2015, the Company incurred $1.9 million and $2.4 million in asset management fees, respectively, all of which were attributable to the Former Advisor. These asset management fees are recorded in Asset management and subordinated performance fee within the consolidated statement of operations. Prior to June 17, 2015, the amount of the asset management fee was reduced to the extent that funds from operations as defined by the National Association of Real Estate Investment Trusts ("FFO"), as adjusted, during the six month period ending on the last day of the calendar quarter immediately preceding the date such asset management fee was payable, was less than distributions declared during the same period. For purposes of this determination, FFO, as adjusted, is FFO adjusted to (i) include acquisition fees and acquisition expenses; (ii) include non-cash restricted stock grant amortization, if any; and (iii) impairments and loan loss reserves on investments, if any (including commercial mortgage loans and other debt investments). FFO, as adjusted, is not the same as FFO.

The Company paid the Former Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Former Advisor was be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Former Advisor exceed 10.0% of the aggregate total return for such year. The Company did not incur an annual subordinated performance fee during the three and nine months endedSeptember 30, 2016. In the June 30, 2016 Form 10-Q filed with the SEC on August 11, 2016 the Company recorded an annual subordinated performance fee of $1.3 million for the six months ended June 30, 2016. This amount has been reversed as the Company determined that as of the date the advisory agreement with the Former Advisor was terminated, the conditions necessary for payment of the annual subordinated performance fee for 2016 had not been satisfied. During the three and nine months endedSeptember 30, 2015, the Company incurred an annual subordinated performance fee of $0.6 million and $1.4 million, respectively. These subordinated performance fees are recorded in Asset management and subordinated performance fee within the statement of operations.

Effective June 1, 2013, the Company entered into an agreement with the Former Dealer Manager to provide strategic advisory services and investment banking services required in the ordinary course of the Company's business, such as performing financial analysis, evaluating publicly traded comparable companies and assisting in developing a portfolio composition strategy, a capitalization structure to optimize future liquidity options and structuring operations. The Company prepaid the cost of a one-time $0.9 million fee associated with this agreement and amortized the cost over the estimated life of the Offering into Other expenses on the Company's consolidated statements of operations. For period ending December 31, 2015, the Company had approximately $6,000 of unamortized cost. There was no remaining unamortized cost as of September 30, 2016 and these services are no longer being provided.

18

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

The table below depicts related party fees and reimbursements in connection with the operations of the Company for the three and nine months endedSeptember 30, 2016 and 2015 and the associated payable as of September 30, 2016 and December 31, 2015 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,				Payable as of
	2016			2015		2016		2015		September 30, 2016		December 31, 2015
Acquisition fees and expenses (1)	$	255		$	572	$	635	$	8,441	$	28	$	55
Administrative services expenses	2,480		—	—		3,835		—		1,500		—
Advisory and investment banking fee	—			14		6		42		—		—
Asset management and subordinated performance fee	1,066			2,405		7,091		3,741		758		3,792
Other related party expenses	6			—		56		—		32		—
Total related party fees and reimbursements	$	3,807		$	2,991	$	11,623	$	12,224	$	2,318	$	3,847

________________________

¹ Includes amortization of capitalized acquisition fees and expenses.

The payables as of September 30, 2016 and December 31, 2015 in the table above are included in "Due to affiliates" on the Company's consolidated balance sheets.

In order to improve operating cash flows and the ability to pay distributions from operating cash flows, the Former Advisor could elect to waive certain fees. The Former Advisor permanently waived a portion of the acquisition fees and expenses earned on the acquisition of the Company's CMBS in the amount of $0.1 million and $0.5 million for the three and nine months endedSeptember 30, 2015, respectively. The Company did not purchase any CMBS positions during the three and nine months ended September 30, 2016 as such did not incur any acquisition fees and expenses for CMBS purchases.

Subject to the limitations outlined below, the Company reimbursed the Former Advisor's cost of providing administrative services and personnel costs in connection with other services during the operational stage, in addition to paying an asset management fee; however, the Company did not reimburse the Former Advisor for personnel costs in connection with services for which the Former Advisor received acquisition fees or disposition fees. For the three and nine months endedSeptember 30, 2016, the Company incurred $2.5 million and $3.8 million of administrative costs in connection with the operations of the Company, which is included in "Administrative services expenses" in the consolidated statements of operations. The Company did not incur such expenses for the three and nine months endedSeptember 30, 2015.

The Former Advisor was required to pay any expenses in which the Company's operating expenses as defined by North American Securities Administrators Association at the end of the four preceding fiscal quarters exceeds the greater of (i) 2.0% of average invested assets or (ii) 25.0% of net income for such expense year. For the preceding four fiscal quarters, the Company did not exceed the greater of the two aforementioned criteria as of September 30, 2016.

Fees Paid to the Former Advisor in Connection with the Listing of the Company's Common Stock or Termination of the Advisory Agreement

On December 30, 2014, the Company issued 1,000 convertible shares to the Former Advisor for $1.00 per share. The convertible shares issued to the Advisor would convert to shares of the Company’s common stock upon the first to occur of any of the Triggering Events described in Note 7. Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a Triggering Event had occurred and, based on the Company’s determination of the enterprise value of the Company on the date of the Triggering Event, the total distributions paid to the Company’s stockholders through the date of the Triggering Event, and the sum of the Company's stockholders’ invested capital as of the date of the Triggering Event, that the convertible shares converted into a number of common shares equal to zero. As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion.

During the three and nine months endedSeptember 30, 2016 and 2015, no fees were paid in connection with the liquidation of assets, listing of the Company's common stock or termination of the advisory agreement.

19

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

The Company has also established a restricted share plan for the benefit of employees, directors, employees of the Advisor and its affiliates.

Note 10 - Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

• Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

• Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

• Level III - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.

CMBS are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all CMBS. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of September 30, 2016 and December 31, 2015, the Company received broker quotes on each CMBS investment used in determining the fair value and have been classified as Level II due to the observable nature of many of the market inputs.

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2016 and December 31, 2015 (in thousands):

	Total		Level I		Level II		Level III
September 30, 2016
Real estate securities	$	57,639	$	—	$	57,639	$	—
December 31, 2015
Real estate securities	130,754		—		130,754		—

A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period. There were no transfers between levels within fair value hierarchy during the three and nine months endedSeptember 30, 2016 and 2015. There are no financial instruments carried at fair value on a non-recurring basis as of September 30, 2016 and December 31, 2015.

20

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximates their fair value. The fair value of borrowings under repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature, and are measured using Level II inputs.

The fair values of the Company's commercial mortgage loans and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2016 and December 31, 2015 (in thousands):

		Level	Carrying Amount		Fair Value
September 30, 2016
Commercial mortgage loans (1)	Asset	III	$	1,120,902	$	1,117,636
Collateralized loan obligation	Liability	II	287,505		289,680
December 31, 2015
Commercial mortgage loans(1)	Asset	III	1,125,089		1,138,841
Collateralized loan obligation	Liability	II	287,229		289,733

________________________

¹ The carrying value is gross of $1.6 million and $0.9 million of allowance for loan losses as of September 30, 2016 and December 31, 2015, respectively.

The fair value of the commercial mortgage loans is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company received broker quotes for each tranche of CLO to determine the fair value of the debt.

Note 11 - Offsetting Assets and Liabilities

The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of September 30, 2016 and December 31, 2015, (in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Repurchase Agreements	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet		Financial Instruments as Collateral Pledged (*)		Cash Collateral Pledged		Net Amount
September 30, 2016
Commercial mortgage loans	$	241,868	$	—	$	241,868	$	399,544	$	5,000	$	—
Real estate securities	72,698		—		72,698		112,283		—		—
December 31, 2015
Commercial mortgage loans	206,239		—		206,239		355,802		5,000		—
Real estate securities	117,211		—		117,211		171,071		366		—

* Includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

Note 12 - Segment Reporting

The Company conducts its business through the following segments:

• The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

• The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

21

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

The following table represents the Company's operations by segment for the three months endedSeptember 30, 2016 and 2015 (in thousands):

Three Months Ended September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Interest income	$	20,250	$	18,682	$	1,568
Interest expense	7,317		6,642		675
Net income	5,373		5,265		108
Three Months Ended September 30, 2015
Interest income	16,252		15,285		967
Interest expense	3,469		3,175		294
Net income	7,425		7,105		320

The following table represents the Company's operations by segment for the nine months endedSeptember 30, 2016 and 2015 (in thousands):

Nine Months Ended September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Interest income	$	60,763	$	55,973	$	4,790
Interest expense	17,478		15,443		2,035
Net income	23,653		22,775		878
Nine Months Ended September 30, 2015
Interest income	38,341		36,303		2,038
Interest expense	7,925		7,323		602
Net income	16,360		15,853		507

The following table represents the Company's total assets by segment as of September 30, 2016 and December 31, 2015 (in thousands):

As of September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Total Assets	$	1,249,412	$	1,191,562	$	57,850
As of December 31, 2015
Total Assets	1,282,484		1,150,858		131,626

For the purposes of the table above, any expenses not associated with a specific segment have been allocated to the business segments using a percentage derived by using the sum of commercial mortgage loans, net and real estate securities, at fair value as the denominator and commercial mortgage loans, net and real estate securities, at fair value as the numerators.

Note 13 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Repurchase Agreements

The Company entered into the JPM Amendment as of October 5, 2016, pursuant to which the limit on the JPM Repo Facility was increased from $150 million to $300 million with the payment of an extension fee. The proceeds were used to payoff the BarclaysRepo facility in its entirety. For additional information refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources.”

Indemnification Agreement

On October 27, 2016, the Company entered into an indemnification agreement (the “Indemnification Agreement”) with each of Buford Ortale, Jamie Handwerker, Richard Byrne, Jerome Baglien and Micah Goodman (each an “Indemnitee”) in

22

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

connection with their respective appointment as a director and/or officer of the Company. The Indemnification Agreement provides that the Company will indemnify the Indemnitee, to the fullest extent permitted by Maryland law and the Company's charter and subject to the limitations set forth in the Indemnification Agreement, from and against all judgments, penalties, fines and amounts paid in settlement and expenses reasonably incurred by the Indemnitee that may result or arise in connection with the Indemnitee serving in his capacity as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at our request. The Indemnification Agreement further provides that, subject to the limitations set forth in the Indemnification Agreement, the Company will, without requiring a preliminary determination of the Indemnitee’s ultimate entitlement of indemnification under the Indemnification Agreement, advance all reasonable expenses to the Indemnitee incurred by or on behalf of the Indemnitee in connection with any proceeding the Indemnitee is or is threatened to be made a party to.

The Indemnification Agreement provides that the Indemnitee is entitled to indemnification unless it is established that (a) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that his conduct was unlawful. The Indemnification Agreement further limits the Indemnitee’s entitlement to indemnification in cases where (a) the proceeding was won by or in the right of the Company and the Indemnitee was adjudged to be liable to the Company, (b) the Indemnitee was adjudged to be liable on the basis that personal benefit was improperly received in any proceeding charging improper personal benefit to the Indemnitee or (c) the proceeding was brought by the Indemnitee, except in certain circumstances.

The Indemnification Agreement also provides that, except for a proceeding brought by the Indemnitee, the Company has the right to defend the Indemnitee in any proceeding which may give rise to indemnification under the Indemnification Agreement. The Indemnification Agreement grants the Indemnitee the right to separate counsel in certain proceedings involving separate defenses, counterclaims or other conflicts of interest and in proceedings in which the Company fail to assume the defense of the Indemnitee in a timely manner. The Indemnification Agreement further provides that the Company will use its reasonable best efforts to acquire directors and officers liability insurance covering the Indemnitee or any claim made against the Indemnitee by reason of his service to the Company.

The description of the Indemnification Agreement in this Quarterly Report on Form 10-Q is a summary and is qualified in its entirety by the terms of the form of Indemnification Agreement attached as Exhibit 10.4 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

Distributions Paid

On October 3, 2016, the Company paid a distribution of $5.3 million to stockholders of record during the month of September 2016. The Company paid $3.3 million of the distribution in cash, while $2.0 million was used to purchase 77,828 shares through the DRIP.

Determination of Net Asset Value per Share

On November 10, 2016, the Company’s board of directors unanimously determined an estimated NAV per share of the Company’s common stock of $20.05 as of September 30, 2016. The estimated NAV per share is based upon the estimated value of the Company’s assets less the Company’s liabilities as of September 30, 2016. Duff & Phelps, LLC, an independent third-party real estate advisory firm, performed appraisals of the Company’s investment portfolio. The Advisor calculated the estimated NAV per share based on the Duff & Phelps, LLC valuations and recommended to the board of directors the estimated NAV per share calculated by the Advisor. The valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013.

On November 10, 2016, the Company’s board of directors unanimously determined: (i) to change the purchase price for shares issued pursuant to the DRIP to equal the estimated NAV per share; and (ii) to change the repurchase price of shares under the SRP to equal, or be at a discount from, the estimated NAV per share. Accordingly, the Company (i) will offer shares pursuant to the DRIP at a purchase price of $20.05, beginning with October 2016 distributions which are reinvested in November 2016; and (ii) will repurchase shares pursuant to the SRP at a repurchase price of $20.05, subject to discounts in certain circumstances and subject to the terms and conditions of the SRP.

23

REALTY FINANCE TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

Convertible Shares

Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a Triggering Event had occurred and, based on the Company’s determination of the enterprise value of the Company on the date of the Triggering Event, the total distributions paid to the Company’s stockholders through the date of the Triggering Event, and the sum of the Company's stockholders’ invested capital as of the date of the Triggering Event, that the convertible shares converted into a number of common shares equal to zero. As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion.

24

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

The following discussion should be read in conjunction with the accompanying consolidated financial statements of Realty Finance Trust, Inc. The notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the U.S. Securities and Exchange Commission (the "SEC") on March 11, 2016.

As used herein, the terms "we," "our" and "us" refer to Realty Finance Trust, Inc., a Maryland corporation, and, as required by context, to Realty Finance Operating Partnership, L.P., a Delaware limited partnership, which we refer to as the "OP," and to its subsidiaries. We are externally managed by Benefit Street Partners, L.L.C. (our "Advisor").

The forward-looking statements contained in this Quarterly Report on Form 10-Q may include, but are not limited to, statements as to:

• our business and investment strategy;

• our ability to make investments in a timely manner or on acceptable terms;

• current credit market conditions and our ability to obtain long-term financing for our investments in a timely manner and on terms that are consistent with what we project when we invest;

• the effect of general market, real estate market, economic and political conditions, including the recent economic slowdown and dislocation in the global credit markets;

• our ability to make scheduled payments on our debt obligations;

• our ability to generate sufficient cash flows to make distributions to our stockholders;

• our ability to generate sufficient debt and equity capital to fund additional investments;

• our ability to refinance our existing financing arrangements;

• the degree and nature of our competition;

• the availability of qualified personnel;

• our ability to maintain our qualification as a real estate investment trust ("REIT"); and

• other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015.

In addition, words such as "anticipate," "believe," "expect" and "intend" indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason.

Our investors should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Overview

We were incorporated in Maryland on November 15, 2012 and conduct our operations to qualify as a REIT for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2013. On May 14, 2013, we commenced business operations after raising in excess of $2.0 million of equity, the amount require for us to release equity proceeds from escrow. We are in business to originate, acquire and manage a diversified portfolio of commercial real estate debt secured by properties located both within and outside of the United States. We also invest in commercial real estate securities. Commercial real estate debt investments may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Commercial real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and CDOs.

We have no employees. On September 29, 2016 we terminated our advisory agreement with our former advisor and entered into the Advisory Agreement with our Advisor. The appointment of the Advisor and the execution of the Advisory Agreement were recommended by a special committee (the “Special Committee”) of our board of directors consisting exclusively of our independent directors. The Special Committee, with the assistance of its independent financial advisor and independent legal counsel, conducted a competitive process to select a new advisor before selecting the Advisor. Our Advisor manages our affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of our assets and our operations.

25

The Advisor, an SEC-registered investment adviser, is a credit-focused alternative asset management firm with over $14 billion in assets under management. The Advisor manages assets across a broad range of complementary credit strategies, including high yield, levered loans, private/opportunistic debt, liquid credit, structured credit and commercial real estate debt. The Advisor has over 115 professionals, including a 34-person team dedicated to the Advisor's real estate platform. The Advisor is affiliated with Providence Equity Partners L.L.C.

On November 10, 2016, our board of directors unanimously determined an estimated NAV per share of our common stock of $20.05 as of September 30, 2016. The estimated NAV per share is based upon the estimated value of our assets less our liabilities as of September 30, 2016. With the unanimous approval of the board of directors, we engaged Duff & Phelps, LLC, an independent third-party real estate advisory firm, who performed appraisals of our real estate assets. Our Advisor calculated the estimated NAV per share, and our board of directors, unanimously, approved the estimated NAV per share calculated by our Advisor. The valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013. Commencing with the reinvestment of our October 2016 monthly dividends in November 2016, the per share price for our dividend reinvestment program ("DRIP") offering will be equal to our new estimated per share NAV.

Significant Accounting Policies and Use of Estimates

A summary of our significant accounting policies is set forth in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in this Quarterly Report on Form 10-Q. A full disclosure of our significant accounting polices is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

Portfolio

As of September 30, 2016 and December 31, 2015, our portfolio consisted of 73 and 77 loans (the "Loans") and 7 and 16 investments in CMBS, respectively. The Loans had a total carrying value, net of allowance for loan losses, of $1,119.3 million and $1,124.2 million, and our CMBS investments had a fair value of $57.6 million and $130.8 million as of September 30, 2016 and December 31, 2015, respectively. For our loans, we currently estimate loss rates based on historical realized losses experienced in the industry and take into account current collateral and economic conditions affecting the probability or severity of losses when establishing the allowance for loan losses. We recorded a general allowance for loan losses as of September 30, 2016 and December 31, 2015 in the amount of $1.6 million and $0.9 million, respectively. There were no impaired or specifically reserved loans in the portfolio as of September 30, 2016 and December 31, 2015.

As of September 30, 2016 and December 31, 2015, our Loans had a weighted average coupon of 6.1% and 6.1%, and a weighted average life of 2.08 and 2.7 years, respectively. Our CMBS investments had a weighted average coupon of 5.3% and 4.7% and a remaining life of 2.98 and 3.2 years as of September 30, 2016 and December 31, 2015, respectively. The following charts summarize our portfolio as a percentage of par value, including CMBS, by the collateral type, geographical region and coupon rate type as of September 30, 2016 and December 31, 2015:

26

27

28

An investments region classification is defined according to the map below based on the location of investments' secured property.

The following charts show the par value by maturity year for the investments in our portfolio as of September 30, 2016 and December 31, 2015.

29

The following table shows selected data from our commercial mortgage loans portfolio as of September 30, 2016 (in thousands):

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior 1	Retail	$7,460	1M LIBOR + 4.75%	5.5%	78.0%
Senior 2	Office	8,676	1M LIBOR + 4.65%	5.5%	70.8%
Senior 3	Office	38,750	1M LIBOR + 5.25%	6.0%	75.0%
Senior 4	Office	13,363	1M LIBOR + 4.75%	5.4%	74.4%
Senior 5	Retail	14,600	1M LIBOR + 4.25%	5.0%	65.0%
Senior 6	Office	19,250	1M LIBOR + 4.55%	5.2%	70.0%
Senior 7	Multifamily	17,760	1M LIBOR + 4.75%	5.5%	75.0%
Senior 8	Multifamily	14,424	1M LIBOR + 4.50%	5.3%	76.0%
Senior 9	Office	12,000	1M LIBOR + 4.75%	5.4%	54.1%
Senior 10	Multifamily	22,933	1M LIBOR + 4.25%	4.9%	69.6%
Senior 11	Multifamily	9,011	1M LIBOR + 4.75%	5.6%	76.0%
Senior 12	Retail	9,850	1M LIBOR + 5.25%	6.0%	80.0%
Senior 13	Industrial	19,033	1M LIBOR + 4.25%	5.0%	68.0%
Senior 14	Hospitality	10,350	1M LIBOR + 5.50%	6.3%	69.9%
Senior 15	Office	33,572	1M LIBOR + 4.65%	5.5%	80.0%
Senior 16	Retail	4,725	1M LIBOR + 5.50%	6.4%	72.0%
Senior 17	Retail	22,552	1M LIBOR + 4.75%	5.6%	55.0%
Senior 18	Multifamily	42,347	1M LIBOR + 4.00%	4.7%	77.0%
Senior 19	Retail	7,500	1M LIBOR + 5.00%	5.9%	59.0%
Senior 20	Office	13,361	1M LIBOR + 5.00%	5.8%	75.0%
Senior 21	Hospitality	11,482	1M LIBOR + 5.75%	6.5%	60.0%
Senior 22	Hospitality	14,380	1M LIBOR + 5.30%	6.0%	73.5%
Senior 23	Mixed Use	20,145	1M LIBOR + 5.50%	6.2%	55.3%
Senior 24	Multifamily	18,617	1M LIBOR + 4.20%	4.9%	76.4%
Senior 25	Mixed Use	10,901	1M LIBOR + 5.10%	5.9%	75.0%
Senior 26	Multifamily	41,983	1M LIBOR + 4.25%	5.0%	77.0%
Senior 27	Retail	9,450	1M LIBOR + 4.90%	5.6%	69.2%
Senior 28	Industrial	33,655	1M LIBOR + 4.00%	4.6%	65.0%

30

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior 29	Mixed Use	45,235	1M LIBOR + 5.50%	6.3%	72.6%
Senior 30	Multifamily	8,850	1M LIBOR + 4.70%	5.5%	68.8%
Senior 31	Office	26,525	1M LIBOR + 4.60%	5.3%	65.0%
Senior 32	Mixed Use	8,016	1M LIBOR + 4.75%	5.5%	78.3%
Senior 33	Hospitality	16,800	1M LIBOR + 4.90%	5.6%	74.0%
Senior 34	Office	35,000	1M LIBOR + 5.00%	5.6%	79.0%
Senior 35	Office	6,290	1M LIBOR + 4.90%	5.5%	80.0%
Senior 36	Retail	11,800	1M LIBOR + 4.75%	5.5%	79.4%
Senior 37	Retail	13,500	1M LIBOR + 5.00%	5.8%	78.0%
Senior 38	Retail	11,684	1M LIBOR + 4.50%	5.2%	74.8%
Senior 39	Multifamily	18,075	1M LIBOR + 4.50%	5.2%	75.0%
Senior 40	Mixed Use	31,250	1M LIBOR + 4.50%	5.2%	75.0%
Senior 41	Multifamily	25,232	1M LIBOR + 4.25%	5.0%	79.7%
Senior 42	Office	9,802	1M LIBOR + 5.50%	6.4%	75.0%
Senior 43	Multifamily	29,101	1M LIBOR + 3.85%	4.3%	76.8%
Senior 44	Multifamily	10,920	1M LIBOR + 3.95%	4.4%	77.5%
Senior 45	Multifamily	12,412	1M LIBOR + 3.95%	4.4%	78.2%
Senior 46	Multifamily	5,894	1M LIBOR + 4.05%	4.5%	80.0%
Senior 47	Office	28,489	1M LIBOR + 4.25%	4.9%	73.3%
Senior 48	Multifamily	14,168	1M LIBOR + 5.00%	5.7%	76.7%
Senior 49	Retail	26,500	1M LIBOR + 4.75%	5.3%	67.4%
Senior 50	Multifamily	10,807	1M LIBOR + 4.75%	5.4%	75.0%
Mezzanine 1	Office	5,000	11.00%	10.8%	63.6%
Mezzanine 2	Hospitality	3,000	11.00%	10.8%	81.8%
Mezzanine 3	Hospitality	11,000	1M LIBOR + 7.05%	7.6%	70.0%
Mezzanine 4	Office	19,026	1M LIBOR + 7.25%	7.8%	76.0%
Mezzanine 5	Office	7,000	12.00%	11.9%	78.3%
Mezzanine 6	Hospitality	12,000	1M LIBOR + 9.00%	9.5%	74.2%
Mezzanine 7	Retail	1,963	13.00%	12.9%	85.0%
Mezzanine 8	Office	5,092	3M LIBOR + 10.00%	10.8%	79.5%
Mezzanine 9	Hospitality	44,357	1M LIBOR + 10.00%	10.5%	75.0%
Mezzanine 10	Multifamily	5,000	9.00%	8.7%	73.9%
Mezzanine 11	Multifamily	3,480	9.50%	9.4%	84.5%
Mezzanine 12	Office	10,000	1M LIBOR + 8.00%	8.5%	80.0%
Mezzanine 13	Multifamily	4,000	12.00%	11.8%	74.5%
Mezzanine 14	Office	10,000	10.00%	10.9%	79.0%
Mezzanine 15	Office	10,000	1M LIBOR + 10.75%	15.6%	80.0%
Mezzanine 16	Hospitality	7,140	10.00%	11.5%	73.9%
Mezzanine 17	Hospitality	3,900	10.00%	11.5%	73.9%
Mezzanine 18	Hospitality	12,510	10.00%	11.5%	73.9%
Mezzanine 19	Hospitality	$8,050	10.00%	11.5%	73.9%
Mezzanine 20	Office	$9,000	10.50%	10.4%	85.0%
Mezzanine 21	Hospitality	$6,206	5.46%	13.1%	76.7%
Mezzanine 22	Hospitality	$12,350	1M LIBOR + 10.00%	10.5%	74.0%
Subordinate 1	Retail	$10,000	11.00%	11.0%	50.1%
		$1,128,555		6.4%	73.12%

________________________

⁽¹⁾ Our floating rate loan agreements contain the contractual obligation for the borrower to maintain an interest rate cap to protect against rising interest rates. In a simple interest rate cap, the borrower pays a premium for a notional principal amount based on a capped interest rate (the "cap rate"). When the floating rate exceeds the cap rate, the borrower receives a payment from the cap counterparty

31

equal to the difference between the floating rate and the cap rate on the same notional principal amount for a specified period of time. When interest rates rise, the value of an interest rate cap will increase, thereby reducing the borrower's exposure to rising interest rates.

⁽²⁾ Loan to value percentage is from metrics at origination.

Results of Operations

We conduct our business through the following segments:

• The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

• The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

Comparison of the Three Months Ended September 30,2016 to the Three Months Ended September 30,2015

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt and real estate securities segments.

The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the three months endedSeptember 30, 2016 and 2015 (dollars in thousands):

	Three Months Ended September 30,
	2016							2015
	Average Carrying Value(1)			Interest Income / Expense(2)		WA Yield / Financing Cost(3)(4)		Average Carrying Value(1)			Interest Income / Expense(2)		WA Yield / Financing Cost(3)(4)
Interest-earning assets:
Real estate debt	$	1,127,464		$	18,682	6.6	%	$	866,295		$	15,285	7.1	%
Real estate securities	122,264			1,568		5.1	%	97,910			967		4.0	%
Total	$	1,249,728		$	20,250	6.5	%	$	964,205		$	16,252	6.7	%
Interest-bearing liabilities:
Repurchase Agreements - Loans	$	253,860		$	4,451	7.0	%	$	349,497		$	3,175	3.6	%
Repurchase Agreements - Securities	114,086			675		2.4	%	65,054			294		1.8	%
Collateralized loan obligations	287,443			2,191		3.0	%	—			—		—	%
Total	$	655,389		$	7,317	4.5	%	$	414,551		$	3,469	3.3	%
Net interest income/spread				$	12,933	2.0	%				$	12,783	3.4	%
Average leverage %(5)	52.4		%					43.0		%
Weighted average levered yield(6)						7.5	%						8.2	%

________________________

⁽¹⁾ Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. Amounts are calculated based on daily averages for three months ended September 30, 2016 and 2015, respectively.

⁽²⁾ Includes the effect of amortization of premium or accretion of discount and deferred fees.

⁽³⁾ Calculated as interest income or expense divided by average carrying value.

⁽⁴⁾ Annualized.

⁽⁵⁾ Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.

⁽⁶⁾ Calculated by taking the sum of (i) the net interest spread multiplied by the average leverage and (ii) the interest-earning assets.

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Interest Income

The primary driver for increased interest income during the three months endedSeptember 30, 2016 compared to the same period in 2015 was the increase in the size of our portfolio resulting from the investment of the capital raised in the Offering and increased leverage into real estate debt. As of September 30, 2016, our Loans had a total carrying value of $1,120.9 million and our CMBS investments had a fair value of $57.6 million, while as of September 30, 2015, the Loans had a total carrying value of $939.7 million and our CMBS investments had a fair value of $101.0 million. This increase was partially offset by a decrease in yield on our investments by 20 basis points quarter over quarter, primarily due to a shift in the composition of the portfolio predominately to lower yielding senior loans over the course of 2015 and 2016.

Interest Expense

Interest expense for the three months endedSeptember 30, 2016 was $3.8 million higher than for the three months endedSeptember 30, 2015, primarily due to an increase in average borrowings outstanding of approximately $240 million period over period and payment of various extension fees on the JPM Repo Facility and the BarclaysRepo Facility (together, the "Repo Facilities"). The increase in interest expense equates to a 120 basis point increase in rates on interest-bearing liabilities primarily due to the extension fees paid to our borrowers on the Repo Facilities.

Expenses from Operations

Expenses from operations for the three months endedSeptember 30, 2016 and 2015 were made up of the following (in thousands):

	Three Months Ended September 30,
	2016		2015
Asset management and subordinated performance fee	$	1,066	$	2,405
Acquisition fees	255		1,777
Professional fees	2,154		659
Administrative services expenses	2,480		—
Other expenses	686		439
Total expenses from operations	$	6,641	$	5,280

For the three months ended September 30, 2016, expenses from operations were primarily related to asset management and subordinated performance fees. During the three months ended September 30, 2016 and September 30, 2015, we incurred $1.1 million and $2.4 million of asset management and subordinated performance fees, respectively, a decrease of $1.3 million, primarily due to reversal of approximately $1.3 million of subordinated performance fees. We have reversed the subordinated performance fees, as there was no subordinated performance fee for 2016 due to applicable conditions not having been satisfied. Additionally, we have incurred approximately $2.5 million of administrative service expenses related to general and administrative expense reimbursement to the Former Advisor for three months ended September 30, 2016, we did not have these expenses for the three months ended September 30, 2015, as the Former Advisor did not seek reimbursement for such expenses for the prior year's period. In addition, our professional fees increased by approximately $1.5 million during the three months ended September 30, 2016 compared to 2015 due to engagement of various consulting and advisory fees. For the three months ended September 30, 2015, our expenses from operations were primarily related to asset management and subordinated performance fees and acquisition fees of $4.2 million.

Comparison of the Nine Months Ended September 30,2016 to the Nine Months Ended September 30,2015

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt and real estate securities segments.

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The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the nine months endedSeptember 30, 2016 and 2015 (dollars in thousands):

	Nine Months Ended September 30,
	2016							2015
	Average Carrying Value(1)			Interest Income/Expense(2)		WA Yield/Financing Cost (3)(4)		Average Carrying Value(1)			Interest Income/Expense(2)		WA Yield/Financing Cost (3)(4)
Interest-earning assets:
Real estate debt	$	1,133,211		$	55,973	6.6	%	$	687,454		$	36,303	7.0	%
Real estate securities	128,474			4,790		5.0	%	76,202			2,038		3.6	%
Total	$	1,261,685		$	60,763	6.4	%	$	763,656		$	38,341	6.7	%
Interest-bearing liabilities:
Repurchase Agreements - Loans	$	248,436		$	9,019	4.8	%	$	257,868		$	7,323	3.8	%
Repurchase Agreements - Securities	119,054			2,035		2.3	%	48,528			602		1.7	%
Collateralized loan obligations	287,351			6,424		3.0	%	—			—		—	%
Total	$	654,841		$	17,478	3.6	%	$	306,396		$	7,925	3.4	%
Net interest income/spread				$	43,285	2.8	%				$	30,416	3.3	%
Average leverage %(5)	51.9		%					40.1		%
Weighted average levered yield(6)						7.9	%						8.0	%

________________________

⁽¹⁾ Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. Amounts are calculated based on daily averages for nine months ended September 30, 2016 and 2015.

⁽²⁾ Includes the effect of amortization of premium or accretion of discount and deferred fees.

⁽³⁾ Calculated as interest income or expense divided by average carrying value.

⁽⁴⁾ Annualized.

⁽⁵⁾ Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.

⁽⁶⁾ Calculated by taking the sum of (i) the net interest spread multiplied by the average leverage and (ii) the interest-earning assets.

Interest Income

The primary driver for increased interest income during the nine months endedSeptember 30, 2016 compared to the same period in 2015 was the increase in the size of our portfolio resulting from the investment of the capital raised in the Offering into real estate debt. As of September 30, 2016, our Loans had a total carrying value of $1,120.9 million and our CMBS investments had a fair value of $57.6 million, while as of September 30, 2015, the Loans had a total carrying value of $939.7 million and our CMBS investments had a fair value of $101.0 million. This increase was partially offset by a decrease in yield on our investments by 30 basis points during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 primarily due to a shift in the composition of the portfolio predominately to lower yielding senior loans over the course of 2015 and into 2016.

Interest Expense

Interest expense for the nine months endedSeptember 30, 2016 was $9.6 million higher than for the nine months endedSeptember 30, 2015, primarily due to an increase in average borrowings outstanding of approximately $348 million period over period and payment of various extensions fees on the Repo Facilities, of which approximately $287.5 million is an increase due to the issuance of a CLO. The increase in interest expense also equates to a 20 basis points increase in rates on interest-bearing liabilities primarily due to the extension fees paid to our borrowers on the Repo Facilities.

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Expenses from Operations

Expenses from operations for the nine months endedSeptember 30, 2016 and 2015 were made up of the following (in thousands):

	Nine Months Ended September 30,
	2016		2015
Asset management and subordinated performance fee	$	7,091	$	3,741
Acquisition fees	635		5,958
Professional fees	4,226		3,136
Administrative services expenses	3,835		—
Other expenses	2,092		919
Total expenses from operations	$	17,879	$	13,754

For the nine months ended September 30, 2016, expenses from operations were primarily related to asset management and subordinated performance fees. During the nine months ended September 30, 2016 and September 30, 2015, we incurred $7.1 million and $3.7 million of asset management and subordinated performance fees, respectively, an increase of $3.4 million due to increase in portfolio size of approximately $140 million during first three quarters of 2016 compared to first three quarters of 2015. Additionally, there was no waiver of asset management fee during 2016 as was the case for 2015. The entire $7.1 million in the asset management and subordinated performance fee line is composed of asset management fees, as there was no subordinated performance fee for 2016 due to applicable conditions not having been satisfied. Additionally, we have incurred approximately $1.1 million more in professional fees during the nine months ended September 30, 2016 compared 2015 due to increase in consulting fees and legal fees, slightly offset by decrease in audit fees. Additionally, we have incurred approximately $3.8 million of administrative service expenses related to general and administrative expense reimbursement to the Former Advisor for the nine months ended September 30, 2016, while we did not have these expenses for the nine months ended September 30, 2015 as the Former Advisor did not seek reimbursement during this period. For the nine months ended September 30, 2015, our expenses from operations were primarily related to acquisition fees of $6.0 million.

Liquidity and Capital Resources

Our principal demands for cash will be acquisition costs, including the purchase price of any investments we originate or acquire, the payment of our operating and administrative expenses, continuing debt service obligations, debt maturities, and distributions to our stockholders. We currently believe that we have sufficient liquidity and capital resources available for the acquisition of additional investments, payment of our operating and administrative expenses, debt service and repayments on borrowings and the payment of cash dividends, although given the termination of our Offering we continue to expect our new investments to be significantly lower in future periods than they were while the Offering was ongoing, unless we decide to pursue raising additional equity capital.

Loan Repo Facilities

As of September 30, 2016, we were party to repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility") and Barclays Bank PLC (the "Barclays Repo Facility"). The JPM Repo Facility provided up to $150.0 million in advances. The Barclays Repo Facility provided up to $150.0 million in advances. Both, the JPM Repo Facility and Barclays Repo Facility are subject to various adjustments. The initial maturity date of the JPM Repo Facility was June 18, 2016, with a one year extension at our option. We exercised the extension option with the JPM Repo Facility lender, extending the maturity date to June 17, 2017. We entered into an amendment of the Barclays Repo Facility, upon payment of an extension fee, dated as of September 2, 2016 (the “Barclays Amendment”), pursuant to which the maturity date of the Barclays Repo Facility was extended to October 6, 2016. Subsequent to September 30, 2016, the JPM Repo Facility was amended to, among other things, increase the size to $300 million. The proceeds from the increase in the size of the JPM Repo Facility was used to pay off the outstanding balance on the Barclays Repo Facility and the Barclays Repo Facility was terminated. Refer to Note 13-Subsequent Events. As of September 30, 2016,we were in compliance with all debt covenants.

As of September 30, 2016 and December 31, 2015, there was $130.0 million and $84.3 million of principal outstanding on the JPM Repo Facility, respectively. On October 5, 2016, we entered into an amendment with JPM Morgan Chase amending the JPM Repo Facility. The amendment to the JPM Repo Facility increased our capacity from $150 million to $300 million, and we have utilized the upsize to draw down on the facility.

As of September 30, 2016 and December 31, 2015, we had $111.9 million and $121.9 million outstanding under the Barclays Repo Facility, respectively. As previously mentioned, on October 5, 2016, we have completely paid off the Barclays Repo Facility using proceeds from an amendment to the JPM Repo Facility. As of September 30, 2016, we were in compliance with all debt covenants.

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The JPM Repo Facility and the Barclays Repo Facility generally provide that in the event of a decrease in the value of our collateral, the lenders can demand additional collateral. Should the value of our collateral decrease, whether as a result of deteriorating credit quality, an increase in credit market spreads or otherwise, resulting margin calls may cause an adverse change in our liquidity position.

CMBS Master Repurchase Agreements ("MRAs")

We entered into various MRAs that allow us to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. As of September 30, 2016 and December 31, 2015, we entered into six MRAs, of which three were in use, described below (in thousands):

	Amount						Weighted Average
Counterparty	Outstanding		Accrued Interest		Collateral Pledged (*)		Interest Rate		Days to Maturity
As of September 30, 2016
J.P. Morgan Securities LLC	$	65,295	$	65	$	102,663	2.38	%	14
Citigroup Global Markets, Inc.	3,878		1		4,807		1.88	%	26
Wells Fargo Securities, LLC	3,525		3		4,813		1.86	%	12
Total/Weighted Average	$	72,698	$	69	$	112,283	2.33	%	15
As of December 31, 2015
J.P. Morgan Securities LLC	$	86,898	$	108	$	130,618	2.03	%	8
Citigroup Global Markets, Inc.	26,619		71		35,528		2.00	%	45
Wells Fargo Securities, LLC	3,694		3		4,925		1.67	%	13
Total/Weighted Average	$	117,211	$	182	$	171,071	2.01	%	17

^(*) Collateral includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

We expect to use additional debt financing as a source of capital. Under our charter, the maximum amount of our total indebtedness shall not exceed 300% of our total ‘‘net assets’’ (as defined by the NASAA REIT Guidelines) as of the date of any borrowing, which is generally expected to be 75% of the cost of our investments; however, we may exceed that limit if approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for exceeding such limit. This charter limitation, however, does not apply to individual real estate assets or investments. At the date of acquisition of each asset, we anticipate that the cost of investment for such asset will be substantially similar to its fair market value, which will enable us to satisfy our requirements under the North American Securities Administrators ("NASAA") Statement of Policy regarding REITs (the "REIT Guidelines"). However, subsequent events, including changes in the fair market value of our assets, could result in our exceeding these limits. We anticipate that adequate cash will be generated from operations to fund our operating and administrative expenses, continuing debt service obligations and the payment of distributions.

In addition to our current mix of financing sources, we may also access additional forms of financings, including credit facilities, securitizations, public and private, secured and unsecured debt issuances by us or our subsidiaries, or through capital recycling initiatives whereby we sell certain assets in our portfolio and reinvest the proceeds in assets with more attractive risk-adjusted returns.

Distributions

On May 13, 2013, our board of directors authorized, and we declared, a distribution payable on a monthly basis to stockholders of record on each day at a rate equal to $0.00565068493 per day, which is equivalent to $2.0625 per annum, per share of common stock. In March 2016, our board of directors ratified the existing distribution amount equivalent to $2.0625 per annum, and, for calendar year 2016, affirmed a change to the daily distribution amount to $0.0056352459 per day per share of common stock, effective January 1, 2016, to accurately reflect that 2016 is a leap year. The distribution will be payable by the fifth day following the end of each month to stockholders of record at the close of business each day during the prior month.

The below table shows the distributions paid on shares outstanding during the nine months ended September 30, 2016 and nine months ended September 30, 2015 (in thousands):

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Nine Months Ended September 30, 2016 Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 4, 2016	$	3,225	$	2,324
February 2, 2016	3,337		2,159
March 2, 2016	3,057		2,099
April 1, 2016	3,342		2,188
May 2, 2016	3,296		2,068
June 1, 2016	3,446		2,112
July 1, 2016	3,361		2,034
August 3, 2016	3,423		2,070
September 1, 2016	3,465		2,045
Total	$	29,952	$	19,099

Nine Months Ended September 30, 2015 Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 2, 2015	$	1,512	$	1,109
February 2, 2015	1,618		1,182
March 2, 2015	1,568		1,153
April 1, 2015	1,873		1,395
May 1, 2015	1,972		1,478
June 1, 2015	2,216		1,657
July 1, 2015	2,283		1,737
August 3, 2015	2,510		1,907
September 1, 2015	2,663		2,025
Total	$	18,215	$	13,643

The following table shows the sources for the payment of distributions to common stockholders for the periods presented (in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2016				2015				2016				2015
Distributions:
Cash distributions paid	$	10,249			$	7,456			$	29,952			$	18,215
Distributions reinvested	6,149				5,669				19,099				13,643
Total distributions	$	16,398			$	13,125			$	49,051			$	31,858
Source of distribution coverage:
Cash flows provided by operations	$	8,349	50.9	%	$	6,487	49.4	%	$	27,553	56.2	%	$	16,797	52.7	%
Proceeds from issuance of common stock	—		—	%	969		7.4	%	—		—	%	1,418		4.5	%
Available cash on hand	1,900		11.6	%	—		—	%	2,399		4.9	%	—		—	%
Common stock issued under DRIP	6,149		37.5	%	5,669		43.2	%	19,099		38.9	%	13,643		42.8	%
Total sources of distributions	$	16,398	100.0	%	$	13,125	100.0	%	$	49,051	100.0	%	$	31,858	100.0	%
Cash flows provided by operations (GAAP)	$	8,349			$	15,646			$	27,553			$	16,797
Net income (GAAP)	$	5,373			$	7,425			$	23,653			$	16,360

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The following table compares cumulative distributions paid to cumulative net income (in accordance with GAAP) for the period from November 15, 2012 (date of inception) through September 30, 2016 (in thousands):

	For the Period from November 15, 2012 (date of inception) to September 30, 2016
Distributions paid:
Common stockholders in cash	$	64,779
Common stockholders pursuant to DRIP / offering proceeds	44,476
Total distributions paid	$	109,255
Reconciliation of net income:
Net interest income	$	104,423
Loss on sale of securities	(920		)
Acquisition fees	(12,937		)
Other operating expenses	(36,479		)
Net income	54,087
Cash flows provided by operations	$	56,447

Cash Flows

Cash Flows for the Nine Months EndedSeptember 30, 2016

Net cash provided by operating activities for the nine months endedSeptember 30, 2016 was $27.6 million. Cash inflows were primarily driven by net income of $23.7 million.

Net cash provided by investing activities for the nine months endedSeptember 30, 2016 was $78.8 million. Cash inflows were driven by proceeds from the sale of real estate securities of $70 million and principal repayments of $51.1 million, partially offset by additional funding of $42.2 million on existing loans.

Net cash used in financing activities for the nine months endedSeptember 30, 2016 was $60.3 million. Cash inflows were primarily driven by $35.6 million from net borrowings on the JPM Repo Facility offset by $44.5 million from net payment on our CMBS MRAs, the payment of $30.0 million in cash distributions paid to stockholders and $19.0 million of stock redemptions.

Cash Flows for the Nine Months EndedSeptember 30, 2015

Net cash provided by operating activities for the nine months ended September 30, 2015 was $16.8 million. Cash inflows were primarily driven by an increase in net interest income to $30.4 million, but were partially offset by cash outflows mainly for acquisition fees of $8.4 million.

Net cash used in investing activities for the nine months ended September 30, 2015 was $533.1 million. Cash outflows were primarily driven by originations and acquisitions with $526.9 million and $53.3 million representing our investment in 33 new loans and 5 new CMBS position, respectively and principal repayments of $47.1 million.

Net cash provided by financing activities for the nine months ended September 30, 2015 was $529.4 million. Cash inflows were primarily driven by the $316.6 million from the issuance of common stock, $225.9 million from net borrowings on the JPM Repo Facility and the Barclays Repo Facility and $46.3 million from net borrowings on our CMBS MRAs which were partially offset by the payment of $37 million of offering costs and cash distributions of $18.2 million.

Related Party Arrangements

We entered into the Advisory Agreement with the Advisor on September 29, 2016.

The Advisor receives an acquisition fee of 1.0% of the principal amount funded by us to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by us to acquire real estate securities; provided, however, that if and when the aggregate purchase price for all investments acquired after the date of the Advisory Agreement reaches $600,000,000, our obligation to pay acquisition fees to the Advisor shall terminate. We reimburse the Advisor for insourced expenses incurred by the Advisor on our behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by us to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by us to acquire real estate securities investments. In no event will the total of all acquisition fees and acquisition expenses exceed 4.5% of the principal amount funded with respect to our total portfolio including subsequent fundings to investments in our portfolio.

We pay the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholder’s equity as calculated pursuant to the Advisory Agreement. We will pay the Advisor, an annual subordinated performance fee calculated

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on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Advisor exceed 10.0% of the aggregate total return for such year. We will reimburse the Advisor for expenses incurred related to administrative services such as accounting, legal and other services in accordance with the advisory agreement.

Except as noted below, we did not make any payments to the Advisor for the nine months ended September 30, 2016. However, until September 29, 2016, the Former Advisor served as our advisor and we paid the Former Advisor certain fees and expense reimbursements pursuant to its advisory agreement with the Former Advisor, as discussed below.

Total Costs Incurred Due to Related Party Arrangements

The table below shows the costs incurred due to arrangements with our Former Advisor and its affiliates and the Advisor during the three and nine months ended September 30, 2016 and 2015 and the associated payable as of September 30, 2016 and December 31, 2015 (in thousands). See Note 9 - Related Party Transactions and Arrangements for further detail. Of the amounts included in the table below, $26.4 thousand and $28.4 thousand for three and nine months ended September 30, 2016, respectively, for asset management fees and acquisition fees and expenses, were the only amounts payable to the Advisor.

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2016		2015		2016		2015		September 30, 2016		December 31, 2015
Total commissions and fees incurred from the Former Dealer Manager in connection with the offering	$	—	$	9,932	$	—	$	30,700	$	—	$	—
Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager	—		1,957		—		5,805		480		480
Acquisition fees and expenses(1)	255		572		635		8,441		28		55
Administrative services expenses	2,480		—		3,835		—		1,500
Advisory and investment banking fee	—		14		6		42		—		—
Asset management and subordinated performance fee	1,066		2,405		7,091		3,741		758		3,792
Other related party expenses	6		—		56		—		32		—
Total	$	3,807	$	14,880	$	11,623	$	48,729	$	2,798	$	4,327

________________________

¹ Includes amortization of capitalized acquisition fees and expenses.

The payables as of September 30, 2016 and December 31, 2015 in the table above are included in Due to affiliates on our consolidated balance sheets.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements as of September 30, 2016 and through the date of the filing of this Form 10-Q.

Non-GAAP Financial Measures

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT") and the Investment Program Association ("IPA") industry trade groups, have each promulgated measures respectively known as funds from operations ("FFO") and modified funds from operations ("MFFO"), which we believe to be appropriate supplemental measures to reflect the operating performance of a REIT. The use of FFO and MFFO is recommended by the REIT industry as supplemental performance measures. FFO and MFFO are not equivalents to our net income or loss as determined under generally accepted accounting principles ("GAAP").

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of depreciable property, property and asset impairment write-downs, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. Our business plan is to operate as a mortgage REIT with our portfolio consisting of commercial mortgage loan investments and investments in real

39

estate securities. We will typically have no FFO adjustments to our net income or loss computed in accordance with GAAP as a result of operating as a mortgage REIT. Although we have the ability to acquire real property, we have not acquired any at this time and as such have not had any FFO adjustments to our net income or loss computed in accordance with GAAP.

Publicly registered, non-listed REITs typically operate differently from exchange traded REITs because they generally have a limited life followed by a liquidity event or other targeted exit strategy. Non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation as compared to later years when the proceeds from their continuous public offering have been fully invested and when we are seeking to implement a liquidity event or other exit strategy. However, it is likely that we will make investments past the acquisition stage, albeit at a substantially lower level.

The origination and acquisition of debt investments is a key operating feature of our business plan that results in the generation of income and cash flows in order to make distributions to stockholders. Acquisition fees paid to our Advisor and acquisition expenses reimbursed to our Advisor in connection with the origination and acquisition of debt investments are evaluated in accordance with GAAP to determine if they should be expensed in the period incurred or capitalized and amortized over the life of the investment. Acquisition fees and acquisition expenses that are deemed to be expensed in the period incurred are included in the computation of net income or loss from operations. The amortization of acquisition fees and acquisition expenses that are able to be capitalized are included in the computation of net income or loss from operations. All such acquisition fees and acquisition expenses are paid in cash when incurred that would otherwise be available to distribute to our stockholders. When proceeds from our equity offerings have not been sufficient to fund the payment of acquisition fees and the reimbursement of acquisition expenses to our Former Advisor or Advisor, such fees and expenses have been paid from other sources, including financings, operating cash flow, net proceeds from the sale of investments or from other cash flows. We believe that acquisition fees and acquisition expenses incurred by us negatively impact our operating performance during the period in which such investments are originated or acquired by reducing cash flows and therefore the potential distributions to stockholders.

We define MFFO, a non-GAAP measure, consistent with the IPA's Guideline 2010 - 01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the "Practice Guideline") issued by the IPA in November 2010. We define MFFO as FFO further adjusted for the following items, as applicable: acquisition fees (to the extent reflected in net income or loss from operations in the current period); accretion of discounts and amortization of premiums and other loan expenses on debt investments; fair value adjustments on real estate related investments such as commercial real estate securities or derivative investments included in net income; impairments of real estate related investments, gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses from fair value adjustments on real estate securities, including commercial mortgage backed securities and other securities, interest rate swaps and other derivatives not deemed to be hedges and foreign exchanges holdings; unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums and other loan expenses on debt investments, gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. While we will be responsible for managing interest rate, hedge and foreign exchange risk, we expect to retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such gains and losses in calculating MFFO, as such gains and losses are not reflective of our core operations.

Our MFFO calculation excludes impairments of real estate related investments, including loans. We assess the credit quality of our investments and adequacy of loan loss reserves on a quarterly basis, or more frequently as necessary. For loans classified as held-for-investment, we establish and maintain a general allowance for loan losses inherent in our portfolio at the reporting date and, where appropriate, a specific allowance for loan losses for loans we have determined to be impaired at the reporting date. An individual loan is considered impaired when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. Real estate related securities are evaluated for other-than-temporary impairment when the fair value of a security falls below its net amortized cost. Significant judgment is required in this analysis. We consider the estimated net recoverable value of the loan or security as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the prospects for the borrower and the competitive situation of the region where the borrower does business. Fair value is typically estimated based upon discounting the expected future cash flows of the underlying collateral taking into consideration the discount rate, capitalization rate, occupancy, creditworthiness of major tenants and many other factors. This requires significant judgment and because it is based upon projections of future economic events, which are inherently subjective, the amounts ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the

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underlying collateral is less than the net carrying value of the loan, a specific allowance for loan losses is recorded. In the case of real estate securities, all or a portion of a deemed impairment may be recorded. Due to our limited life, any allowance for loan losses or impairment of real estate securities recorded may be difficult to recover.

MFFO is a metric used by management to evaluate our performance against other non-listed REITs which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter and is not intended to be used as a liquidity measure. Although management uses the MFFO metric to evaluate future operating performance, this metric excludes certain key operating items and other adjustments that may affect our overall operating performance. MFFO is not equivalent to net income or loss as determined under GAAP. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to investors.

We believe that FFO provides useful context for understanding MFFO, and we believe that MFFO is a useful non-GAAP measure for non-listed REITs. It is helpful to management and stockholders in assessing our future operating performance once our organization and offering and acquisition and development stages are complete, because it eliminates from net income non-cash fair value adjustments on our real estate securities and acquisition fees and acquisition expenses that are incurred as part of our investment activities. However, MFFO may not be a useful measure of our operating performance or as a comparable measure to other typical non-listed REITs if we do not continue to operate in a similar manner to other non-listed REITs, including if we were to extend our acquisition and development stage or if we determined not to pursue an exit strategy.

However, MFFO does have certain limitations. For instance, the effect of any amortization or accretion on investments originated or acquired at a premium or discount, respectively, is not reported in MFFO. In addition, realized gains or losses from acquisitions and dispositions and other adjustments listed above are not reported in MFFO, even though such realized gains or losses and other adjustments could affect our operating performance and cash available for distribution. Stockholders should note that any cash gains generated from the sale of investments would generally be used to fund new investments. Any mark-to-market or fair value adjustments may be based on many factors, including current operational or individual property issues or general market or overall industry conditions.

Neither FFO nor MFFO is equivalent to net income or loss or cash flow provided by operating activities determined in accordance with GAAP and should not be construed to be more relevant or accurate than the GAAP methodology in evaluating our operating performance or our ability to pay distributions to our stockholders. Neither FFO nor MFFO is necessarily indicative of cash flow available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Furthermore, neither FFO nor MFFO should be considered as an alternative to net income or loss as an indicator of our operating performance.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.

The table below reflects the items deducted or added to net income or loss in our calculation of FFO and MFFO for the three and nine months endedSeptember 30, 2016 and 2015 (in thousands):

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Funds From Operations:
Net income (GAAP)	$	5,373		$	7,425		$	23,653		$	16,360
Funds from operations	$	5,373		$	7,425		$	23,653		$	16,360
Modified Funds From Operations:
Funds from operations	$	5,373		$	7,425		$	23,653		$	16,360
Accretion of premiums, discounts and fees on investments, net	(619		)	(369		)	(1,761		)	(877		)
Acquisition fees	255			1,777			635			5,958
Loan loss (recovery)/provision	(113		)	78			721			302
Modified funds from operations	$	4,896		$	8,911		$	23,248		$	21,743

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. During the periods covered by this report, we did not engage in interest rate hedging activities. We do not hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.

As of September 30, 2016 and December 31, 2015, our portfolio included 65 and 77 variable rate investments, respectively, based on LIBOR for various terms. Borrowings under our repurchase agreements are also based on LIBOR. The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 50 or 100 basis points or decrease by 25 basis points, assuming that our current balance sheet was to remain constant and no actions were taken to alter our existing interest rate sensitivity:

	Estimated Percentage Change in Interest Income Net of Interest Expense
Change in Interest Rates	September 30, 2016		December 31, 2015
(-) 25 Basis Points	(2.02	)%	(2.38	)%
Base Interest Rate	—	%	—	%
(+) 50 Basis Points	4.03	%	4.81	%
(+) 100 Basis Points	8.06	%	9.61	%

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of the end of such period, that our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.

Changes in Internal Controls Over Financial Reporting

Except as noted below, during the three months ended September 30, 2016, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15(d)-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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As of September 29, 2016, the Advisor replaced the Former Advisor as the Company’s advisor. In connection therewith, the Company appointed a new Chief Executive Officer and Chief Financial Officer. The advisory agreement between the Former Advisor and the Company requires the Former Advisor to cooperate with the Company to provide an orderly management transition. In addition, the facilitate the transition from the Former Advisor to the Advisor, the Advisor has entered into a transitional services arrangement with the Former Advisor, including with respect to financial reporting services, and the Advisor has entered into employment agreements with a number of former employees of the Former Advisor that historically provided services to the Company, including services related to financial reporting.

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PART II

Item 1. Legal Proceedings.

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. Except as noted below, the Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.  On June 6, 2016, an action was filed against the Company and two of its directors in the United States District Court for the Southern District of New York and styled Rurode v. Realty Finance Trust, Inc., et. al., No. 1:16-cv-04553.  The plaintiff’s individual and derivative complaint alleged that the Company made material misstatements in the proxy statement for its 2016 annual stockholder’s meeting related to an alleged planned merger transaction between the Company and an affiliate of its former advisor.  The plaintiff alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and sought to enjoin the Company’s 2016 annual meeting.  On June 28, 2016, the parties filed, and the court subsequently entered,  a stipulation and order of dismissal of the action, but provided that the court would retain jurisdiction to consider any application by plaintiff for an award of attorneys’ fees.  On October 20, 2016, the plaintiff submitted a request for $0.75 million in fees and expenses. The Company intends to oppose that request. The Company did not record any accrual in the September 30, 2016 financial statements related fee and expense request as the Company does not believe it is probable there will be a judgment against the Company that would have a material effect on the Company’s financial statements.

Item 1A. Risk Factors.

Our potential risks and uncertainties are presented in the section entitled "Risk Factors" contained in the Annual Report on Form 10-K for the year ended December 31, 2015. There have been no material changes from these risk factors.

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

We did not sell any equity securities that were not registered under the Securities Act during the three months endedSeptember 30, 2016.

Refer to See Note 7 - Common Stock to our consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016.

Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Effective November 14th, 2016, the Company amended its charter to implement all the amendments approved by the Company’s stockholders at the Annual Meeting of Stockholders held on August 19, 2016 which had not been previously implemented.

The foregoing summary of the charter amendment does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Charter, a copy of which is attached hereto as Exhibit 3.1.

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Item 6. Exhibits.

EXHIBITS INDEX

The following exhibits are included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
3.1*	Articles of Restatement, dated November 14, 2016.
10.1(1)	Second Amendment to Master Repurchase Agreement and Second Amendment to Fee Letter, dated as of September 2, 2016, by and among Barclays Bank PLC, RFT BB Loan, LLC and Realty Finance Trust, Inc.
10.2(2)	Advisory Agreement, by and among Realty Finance Trust, Inc. Realty Finance Operating Partnership, L.P. and Benefit Street Partners L.L.C.
10.3(3)	Amendment No. 4 to Master Repurchase Agreement, dated as of October 5, 2016, by and among RFT JPM Loan, LLC, JP Morgan Chase Bank, National Association, Realty Finance Special Limited Partnership, LLC and Realty Finance Advisors, LLC.
10.4*	Form of Indemnification Agreement, by and between the Company and Indemnitee.
31.1*	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	XBRL (eXtensible Business Reporting Language). The following materials from Realty Finance Trust, Inc.’s Quarterly Report on Form 10-Q for the three months ended September 30, 2016, formatted in XBRL: (i) the consolidated Balance Sheets, (ii) the consolidated Statements of Operations, (iii) the consolidated Statements of Comprehensive Income, (iv) the consolidated Statement of Changes in Stockholders' Equity, (v) the consolidated Statements of Cash Flows and (vi) the Notes to the consolidated Financial Statements.

____________________________________________

* Filed herewith.

(1) Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 9, 2016.

(2) Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 29, 2016.

(3) Filed as an exhibit to our current report on Form 8-K filed with the SEC on October 12, 2016

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REALTY FINANCE TRUST, INC.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	REALTY FINANCE TRUST, INC.
Dated: November 14, 2016	By: /s/ Richard J. Byrne Name: Richard J. Byrne Title: Chief Executive Officer and President (Principal Executive Officer)
Dated: November 14, 2016	By: /s/ Jerome S. Baglien Name: Jerome S. Baglien Title: Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

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EX-3.1

Exhibit 3.1 \\DC - 045418/000001 - 8136396 v3 ARTICLES OF RESTATEMENT FOR REALTY FINANCE TRUST, INC. a Maryland corporation TABLE OF CONTENTS PAGE ARTICLE I. NAME 1 ARTICLE II. PURPOSES AND POWERS 1 ARTICLE III. RESIDENT AGENT AND PRINCIPAL OFFICE 1 ARTICLE IV. DEFINITIONS 1 ARTICLE V. STOCK 8 SECTION 5.1 AUTHORIZED SHARES 8 SECTION 5.2 COMMON SHARES 8 SECTION 5.3 PREFERRED SHARES 9 SECTION 5.4 CLASSIFIED OR RECLASSIFIED SHARES 9 SECTION 5.5 STOCKHOLDERS’ CONSENT IN LIEU OF MEETING 9 SECTION 5.6 CHARTER AND BYLAWS 9 SECTION 5.7 NO ISSUANCE OF SHARE CERTIFICATES 9 SECTION 5.8 SUITABILITY OF STOCKHOLDERS. 9 SECTION 5.9 RESTRICTIONS ON OWNERSHIP AND TRANSFER. 10 SECTION 5.10 SETTLEMENTS 16 SECTION 5.11 SEVERABILITY 16 SECTION 5.12 ENFORCEMENT 16 SECTION 5.13 NON-WAIVER 16 SECTION 5.14 REPURCHASE OF SHARES 16 SECTION 5.15 DISTRIBUTION REINVESTMENT PLANS 16 SECTION 5.16 PREEMPTIVE AND APPRAISAL RIGHTS 16 ARTICLE VI. BOARD OF DIRECTORS 17 SECTION 6.1 NUMBER OF DIRECTORS 17 SECTION 6.2 EXPERIENCE 17 SECTION 6.3 COMMITTEES 17 SECTION 6.4 TERM 17 SECTION 6.5 RESIGNATION, REMOVAL OR DEATH 17 ARTICLE VII. POWERS OF THE BOARD OF DIRECTORS 17 SECTION 7.1 GENERAL 17 SECTION 7.2 AUTHORIZATION BY BOARD OF STOCK ISSUANCE 18 SECTION 7.3 FINANCINGS 18 SECTION 7.4 REIT QUALIFICATION 18 SECTION 7.5 DETERMINATIONS BY BOARD 18 SECTION 7.6 STOCKHOLDER CONCURRENCE REQUIRED 19 SECTION 7.7 VOTE OF MAJORITY OF INDEPENDENT DIRECTORS REQUIRED 19 ARTICLE VIII. ADVISOR 19 SECTION 8.1 APPOINTMENT AND INITIAL INVESTMENT OF ADVISOR 19

ii \\DC - 045418/000001 - 8136396 v3 SECTION 8.2 SUPERVISION OF ADVISOR 19 SECTION 8.3 FIDUCIARY OBLIGATIONS 20 SECTION 8.4 AFFILIATION AND FUNCTIONS 20 SECTION 8.5 TERMINATION 20 SECTION 8.6 DISPOSITION FEE ON SALE OF PROPERTIES 20 SECTION 8.7 INCENTIVE FEES 20 SECTION 8.8 ORGANIZATION AND OFFERING EXPENSES LIMITATION 20 SECTION 8.9 ACQUISITION FEES 21 SECTION 8.10 ANNUAL SUBORDINATED PERFORMANCE FEE 21 SECTION 8.11 REIMBURSEMENT FOR TOTAL OPERATING EXPENSES 21 SECTION 8.12 REIMBURSEMENT LIMITATION 21 SECTION 8.13 NO FEES UPON INTERNALIZATION 21 ARTICLE IX. INVESTMENT OBJECTIVES AND LIMITATIONS 21 SECTION 9.1 REVIEW OF OBJECTIVES 21 SECTION 9.2 CERTAIN PERMITTED INVESTMENTS 21 SECTION 9.3 INVESTMENT LIMITATIONS 22 ARTICLE X. CONFLICTS OF INTEREST 23 SECTION 10.1 SALES AND LEASES TO THE COMPANY 23 SECTION 10.2 SALES AND LEASES TO THE SPONSOR, ADVISOR, DIRECTORS OR AFFILIATES 23 SECTION 10.3 OTHER TRANSACTIONS. 23 ARTICLE XI. STOCKHOLDERS 24 SECTION 11.1 MEETINGS OF STOCKHOLDERS 24 SECTION 11.2 VOTING RIGHTS OF STOCKHOLDERS 25 SECTION 11.3 EXTRAORDINARY ACTIONS 25 SECTION 11.4 VOTING LIMITATIONS ON SHARES HELD BY THE ADVISOR, DIRECTORS AND AFFILIATES 25 SECTION 11.5 RIGHT OF INSPECTION 25 SECTION 11.6 ACCESS TO STOCKHOLDER LIST 25 SECTION 11.7 REPORTS 26 SECTION 11.8 TENDER OFFERS 26 ARTICLE XII. LIABILITY OF STOCKHOLDERS, DIRECTORS, ADVISORS AND AFFILIATES; TRANSACTIONS BETWEEN AFFILIATES AND THE COMPANY 26 SECTION 12.1 LIMITATION OF STOCKHOLDER LIABILITY 26 SECTION 12.2 LIMITATION OF DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION 27 SECTION 12.3 PAYMENT OF EXPENSES 28 SECTION 12.4 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS 28 ARTICLE XIII. AMENDMENTS 28 ARTICLE XIV. ROLL-UP TRANSACTIONS 28 ARTICLE XV. DURATION 29

1 \\DC - 045418/000001 - 8136396 v3 REALTY FINANCE TRUST, INC. ARTICLES OF RESTATEMENT FIRST: Realty Finance Trust, Inc., a Maryland corporation (the “Company”), desires to amend and restate its charter as currently in effect and as hereinafter amended. SECOND: The following provisions are all the provisions of the charter currently in effect and as hereinafter amended: ARTICLE I. NAME The name of the Company is Realty Finance Trust, Inc. ARTICLE II. PURPOSES AND POWERS The purpose for which the Company is formed is to engage in any lawful act or activity (including, without limitation or obligation, qualifying and engaging in business as a real estate investment trust under Sections 856 through 860, or any successor sections, of the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”)), for which corporations may be organized under the MGCL and the general laws of the State of Maryland as now or hereafter in force. ARTICLE III. RESIDENT AGENT AND PRINCIPAL OFFICE The name and address of the resident agent for service of process of the Company in the State of Maryland is CSC- Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. The address of the Company’s principal office in the State of Maryland is c/o CSC-Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202. The Company may have such other offices and places of business within or outside the State of Maryland as the Board may from time to time determine. ARTICLE IV. DEFINITIONS As used in the Charter, the following terms shall have the following meanings unless the context otherwise requires: “ACQUISITION EXPENSES” means any and all expenses incurred by the Company, the Advisor, or any Affiliate of either in connection with the selection, acquisition or development of any Asset, whether or not acquired, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance, and miscellaneous expenses related to selection and acquisition of properties, whether or not acquired. “ACQUISITION FEE” means any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to any Affiliate of the Company or the Advisor) in connection with making or investing in Mortgages or the purchase, development or construction of a Property, including real estate commissions, selection fees, Development Fees, Construction Fees, nonrecurring management fees, loan fees, points or any other fees of a similar nature. Excluded shall be Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in connection with the actual development and construction of a project. “ADVISOR” or “ADVISORS” means the Person or Persons, if any, appointed, employed or contracted with by the Company pursuant to Section 8.1 hereof and responsible for directing or performing the day-to-day business affairs of the Company, including any Person to whom the Advisor subcontracts all or substantially all of such functions.

2 \\DC - 045418/000001 - 8136396 v3 “ADVISORY AGREEMENT” means the agreement between the Company and the Advisor pursuant to which the Advisor will direct or perform the day-to-day business affairs of the Company. “AFFILIATE” or “AFFILIATED” means, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent (10%) or more of the outstanding voting securities of such other Person; (ii) any Person, ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner. “ANNUAL SUBORDINATED PERFORMANCE FEE” shall have the meaning given in Section 8.10. “ASSET” means any Property, Mortgage or other investments owned by the Company, directly or indirectly through one (1) or more of its Affiliates, and any other investment made by the Company, directly or indirectly through one (1) or more of its Affiliates. “AVERAGE INVESTED ASSETS” means, for a specified period, the average of the aggregate book value of the Assets invested, directly or indirectly in equity interests in and loans secured by real estate, before deducting depreciation, bad debts or other non-cash reserves, computed by taking the average of such values at the end of each month during such period. “BOARD” means the Board of Directors of the Company. “BYLAWS” means the Bylaws of the Company, as amended from time to time. “CHARTER” means the charter of the Company. “CODE” shall have the meaning as provided in Article II herein. “COMMENCEMENT OF THE INITIAL PUBLIC OFFERING” shall mean the date that the Securities and Exchange Commission declares effective the registration statement filed under the Securities Act for the Initial Public Offering. “COMMON SHARES” shall have the meaning as provided in Section 5.1 herein. “COMPANY” shall have the meaning as provided in Article I herein. “COMPETITIVE REAL ESTATE COMMISSION” means a real estate or brokerage commission paid for the purchase or sale of a Property that is reasonable, customary and competitive in light of the size, type and location of the Property. “CONSTRUCTION FEE” means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or provide major repairs or rehabilitations on a Property. “CONTRACT PURCHASE PRICE” means the amount actually paid or allocated in respect of the purchase, development, construction or improvement of a Property or the amount of funds advanced with respect to a Mortgage, or the amount actually paid or allocated in respect of the purchase of other Assets, in each case exclusive of Acquisition Fees and Acquisition Expenses, but in each case including any indebtedness assumed or incurred in respect of such Property. “DEALER MANAGER” means any Person selected by the Board to act as the dealer manager for an Offering.

3 \\DC - 045418/000001 - 8136396 v3 “DEVELOPMENT FEE” means a fee for the packaging of a Property or Mortgage, including the negotiation and approval of plans and any assistance in obtaining zoning and necessary variances and financing for a specific Property, either initially or at a later date. “DIRECTOR” means a director of the Company. “DISTRIBUTIONS” means any distributions of money or other property, pursuant to Section 5.2(c) hereof, by the Company to owners of Shares, including distributions that may constitute a return of capital for federal income tax purposes. “EXCESS AMOUNT” has the meaning provided in Section 8.11 herein. “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto. “FINANCING COORDINATION FEE” means a fee paid in connection with the financing of an Asset, assumption of any loan in connection with the acquisition of an Asset or refinancing of any loan on an Asset. “GROSS PROCEEDS” means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Selling Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Selling Commissions are paid to a Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount of the offering price per Share pursuant to the Prospectus for such Offering without reduction. “INDEMNITEE” has the meaning provided in Section 12.2 herein. “INDEPENDENT APPRAISER” means a Person with no material current or prior business or personal relationship with the Advisor or the Directors and who is engaged to a substantial extent in the business of rendering opinions regarding the value of Real Property or of other Assets of the type held by the Company. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence of being engaged to a substantial extent in the business of rendering opinions as to the value of Real Property. “INDEPENDENT DIRECTOR” means a Director who is not and who has not been within the last two years from the date of determination, directly or indirectly associated with the Sponsor or the Advisor by virtue of (i) ownership of an interest in the Sponsor, the Advisor or any of their Affiliates, (ii) employment by the Sponsor, the Advisor or any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any of their Affiliates, (iv) performance of services, other than as a Director, for the Company, (v) service as a director or trustee of more than three REITs organized by the Sponsor or advised by the Advisor or (vi) maintenance of a material business or professional relationship with the Sponsor, the Advisor or any of their Affiliates. A business or professional relationship is considered “material” per se if the aggregate gross income derived by the Director from the Sponsor, the Advisor and their Affiliates exceeds five percent (5%) of either the Director’s annual gross income, derived from all sources, during either of the last two years or the Director’s net worth on a fair market value basis. An indirect association with the Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law is or has been associated with the Sponsor, the Advisor, any of their Affiliates or the Company. “INITIAL INVESTMENT” means that portion of the initial capitalization of the Company contributed by the Sponsor or its Affiliates pursuant to Section II.A. of the NASAA REIT Guidelines. “INITIAL PUBLIC OFFERING” means the first Offering. “INVESTED CAPITAL” means the amount calculated by multiplying the total number of Shares purchased by Stockholders by the issue price at the time of such purchase, reduced by the portion of any Distribution that is

4 \\DC - 045418/000001 - 8136396 v3 attributable to Net Sales Proceeds and by any amounts paid by the Company to repurchase Shares pursuant to the Company’s plan for the repurchase of Shares. “IRA” means an “individual retirement account” (as defined in Section 408 of the Code). “JOINT VENTURES” means those joint venture or partnership arrangements in which the Company or the Operating Partnership is a co-venturer, limited liability company member, limited partner or general partner established to acquire or hold Assets. “LEVERAGE” means the aggregate amount of indebtedness of the Company for money borrowed (including purchase money mortgage loans) outstanding at any time, both secured and unsecured. “LIQUIDITY EVENT” includes a sale of all or substantially all the Assets, a sale or merger of the Company, a Listing, or other similar transaction. “LISTING” means the listing of the Common Shares on a national securities exchange. Upon such Listing, the Common Shares shall be deemed Listed. “MGCL” means the Maryland General Corporation Law, as in effect from time to time. “MORTGAGES” means, in connection with mortgage financing provided by the Company, all of the notes, deeds of trust, security interests or other evidences of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness or obligations. “NASAA REIT GUIDELINES” means the Statement of Policy Regarding Real Estate Investment Trusts as revised and adopted by the North American Securities Administrators Association on May 7, 2007. “NET ASSETS” means the total Assets (other than intangibles) at cost, before deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities, calculated at least quarterly by the Company on a basis consistently applied. “NET INCOME” means, for any period, the Company’s total revenues applicable to such period, less the total expenses applicable to such period other than additions to reserves for depreciation, bad debts or other similar non- cash reserves and excluding any gain from the sale of the Assets. “NET SALES PROCEEDS” means, in the case of a transaction described in clause (i)(A) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company, including all real estate commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(B) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (i)(C) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction actually distributed to the Company or the Operating Partnership from the Joint Venture less the amount of any selling expenses, including legal fees and expenses incurred by or on behalf of the Company (other than those paid by the Joint Venture). In the case of a transaction or series of transactions described in clause (i)(D) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction (including the aggregate of all payments under a Mortgage on or in satisfaction thereof other than regularly scheduled interest payments) less the amount of selling expenses incurred by or on behalf of the Company, including all commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(E) of the definition of Sale, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Company, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (ii) of the definition of Sale, Net Sales Proceeds means the proceeds of such transaction or series of transactions less all amounts generated thereby which are reinvested in one (1) or more Assets within one hundred eighty (180) days thereafter and less the amount of any real estate commissions, closing

5 \\DC - 045418/000001 - 8136396 v3 costs, and legal fees and expenses and other selling expenses incurred by or allocated to the Company or the Operating Partnership in connection with such transaction or series of transactions. Net Sales Proceeds shall also include Refinancing Proceeds and any other amounts that the Company determines, in its discretion, to be economically equivalent to proceeds of a Sale. Net Sales Proceeds shall not include any reserves established by the Company in its sole discretion. “NON-COMPLIANT TENDER OFFER” has the meaning provided in Section 11.8 herein. “OFFERING” means any public offering and sale of shares of stock pursuant to an effective registration statement filed under the Securities Act. “OPERATING PARTNERSHIP” means Realty Finance Operating Partnership, L.P., an Affiliate of the Company through which the Company may own Assets. “ORGANIZATION AND OFFERING EXPENSES” means any and all costs and expenses incurred by and to be paid from the Assets of the Company in connection with the formation of the Company and the qualification and registration of an Offering, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys), expenses for printing, engraving and amending registration statements or supplementing prospectuses, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses (including the costs related to investor and broker-dealer sales meetings), charges of transfer agents, registrars, trustees, escrow holders, depositories and experts, and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees. “PERSON” means an individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other legal entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and a group to which an Excepted Holder Limit (as defined in Section 5.9(i) hereof) applies. “PLAN OF LIQUIDATION” has the meaning provided in Article XV herein. “PREFERRED SHARES” has the meaning provided in Section 5.1 herein. “PROPERTY” or “PROPERTIES” means, as the context requires, any, or all, respectively, of the Real Property acquired by the Company, directly or indirectly through joint venture arrangements or other partnership or investment interests. “PROSPECTUS” means the same as that term is defined in Section 2(10) of the Securities Act, including a preliminary prospectus and an offering circular as described in Rule 256 of the General Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering and selling securities to the public. “REAL PROPERTY” or “REAL ESTATE” means land, rights in land (including leasehold interests), and any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land. “REFINANCING PROCEEDS” means the proceeds of the refinancing of any indebtedness of the Company, less the amount of expenses incurred by or on behalf of the Company in connection with such refinancing. “REINVESTMENT PLAN” has the meaning provided in Section 5.15 herein.

6 \\DC - 045418/000001 - 8136396 v3 “REIT” means a corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in equity interests in real estate (including fee ownership and leasehold interests) or in loans secured by real estate or both, as defined pursuant to the REIT Provisions of the Code. “REIT PROVISIONS OF THE CODE” means Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and the regulations promulgated thereunder. “ROLL-UP ENTITY” means a partnership, real estate investment trust, corporation, trust or similar entity that would be created or would survive after the successful completion of a proposed Roll-Up Transaction. “ROLL-UP TRANSACTION” means a transaction involving the acquisition, merger, conversion or consolidation either directly or indirectly of the Company and the issuance of securities of a Roll-Up Entity to the holders of Common Shares. Such term does not include: (a) a transaction involving securities of a Roll-Up Entity that have been for at least twelve (12) months listed on a national securities exchange; or (b) a transaction involving the conversion to corporate, trust or association form of only the Company, if, as a consequence of the transaction, there will be no significant adverse change in any of the following: (i) the voting rights of the holders of the Shares; (ii) the term of existence of the Company; (iii) Sponsor or Advisor compensation; or (iv) The Company’s investment objectives. “SALE” or “SALES” means (i) any transaction or series of transactions whereby: (A) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, and including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Operating Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture in which the Company or the Operating Partnership is a co-venturer or partner directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (D) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof, including any payments thereunder or in satisfaction thereof (other than regularly scheduled interest payments) or any amounts owed pursuant to such Mortgage, and including any event with respect to any Mortgage which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Company or the Operating Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) not including any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested by the Company in one (1) or more Assets within one hundred eighty (180) days thereafter. “SECURITIES” means any of the following issued by the Company, as the text requires: Shares, any other stock, shares or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any

7 \\DC - 045418/000001 - 8136396 v3 instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing. “SECURITIES ACT” means the Securities Act of 1933, as amended from time to time, or any successor statute thereto. Reference to any provision of the Securities Act shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time. “SELLING COMMISSIONS” means any and all commissions payable to underwriters, dealer managers or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to a Dealer Manager. “SHARES” means shares of stock of the Company of any class or series, including Common Shares and Preferred Shares. “SOLICITING DEALERS” means those broker-dealers that are members of the Financial Industry Regulatory Authority, or that are exempt from broker-dealer registration, and that, in either case, enter into participating broker or other agreements with a Dealer Manager to sell Shares. “SPONSOR” means any Person which (i) is directly or indirectly instrumental in organizing, wholly or in part, the Company, (ii) will control, manage or participate in the management of the Company, and any Affiliate of any such Person, (iii) takes the initiative, directly or indirectly, in founding or organizing the Company, either alone or in conjunction with one (1) or more other Persons, (iv) receives a material participation in the Company in connection with the founding or organizing of the business of the Company, in consideration of services or property, or both services and property, (v) has a substantial number of relationships and contacts with the Company, (vi) possesses significant rights to control Properties, (vii) receives fees for providing services to the Company which are paid on a basis that is not customary in the industry or (viii) provides goods or services to the Company on a basis which was not negotiated at arm’s-length with the Company. The term “Sponsor” shall not include a Person whose only relationship with the Company is that of an independent property manager and whose only compensation is as such or wholly independent third parties such as attorneys, accountants and underwriters whose only compensation is for professional services. “STOCKHOLDER LIST” has the meaning provided in Section 11.6 herein. “STOCKHOLDERS” means the holders of record of the Shares as maintained in the books and records of the Company or its transfer agent. “TERMINATION DATE” means the date of termination of the Advisory Agreement. “TERMINATION OF THE INITIAL PUBLIC OFFERING” shall mean the earlier of (i) the date on which the Initial Public Offering expires or is terminated by the Company or (ii) the date on which all shares of stock offered in the Initial Public Offering are sold, excluding warrants, if any, offered thereunder and shares that may be acquired upon exercise of such warrants and shares offered thereunder that may be acquired pursuant to the Reinvestment Plan. “TOTAL OPERATING EXPENSES” means all costs and expenses paid or incurred by the Company, as determined under generally accepted accounting principles, that are in any way related to the operation of the Company or to Company business, including advisory fees, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) incentive fees paid in compliance with the NASAA REIT Guidelines, (vi) Acquisition Fees and Acquisition Expenses, (vii) real estate commissions on the Sale of Properties, (viii) Financing Coordination Fees and (ix) other fees and expenses connected with the acquisition, disposition, management and

8 \\DC - 045418/000001 - 8136396 v3 ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). “UNIMPROVED REAL PROPERTY” means Property in which the Company has an equity interest that was not acquired for the purpose of producing rental or other operating income, that has no development or construction in process and for which no development or construction is planned, in good faith, to commence within one (1) year. “2%/25% GUIDELINES” has the meaning provided in Section 8.11 herein. ARTICLE V. STOCK SECTION 5.1 AUTHORIZED SHARES. The total number of Shares that the Company shall have authority to issue is 1,000,000,000 Shares, of which (i) 950,000,000 are designated as common stock, $0.01 par value per share (the “Common Shares”); and (ii) 50,000,000 are designated as preferred stock, $0.01 par value per share (the “Preferred Shares”) The Common Shares and Preferred Shares each comprise a separate class of shares. The aggregate par value of all authorized Shares having par value is $10,000,000. If Shares of one (1) class of stock are classified or reclassified into Shares of another class of stock pursuant to Section 5.2(b) or Section 5.3 of this Article V, the number of authorized Shares of the former class shall be automatically decreased and the number of Shares of the latter class shall be automatically increased, in each case by the number of Shares so classified or reclassified, as the case may be, so that the aggregate number of Shares of all classes that the Company has authority to issue shall not be more than the total number of Shares set forth in the first sentence of this Section 5.1. The Board, with the approval of a majority of the entire Board and without any action by the Stockholders, may amend the Charter from time to time to increase or decrease the aggregate number of Shares or the number of Shares of any class or series that the Company has authority to issue. SECTION 5.2 COMMON SHARES. (a) COMMON SHARES SUBJECT TO TERMS OF PREFERRED SHARES. The Common Shares shall be subject to the express terms of any series of Preferred Shares. (b) DESCRIPTION. Subject to Section 5.9 hereof and except as may otherwise be specified in the Charter, each Common Share shall entitle the holder thereof to one (1) vote. The Board may classify or reclassify any unissued Common Shares from time to time into one (1) or more classes or series of stock. (c) DISTRIBUTION RIGHTS. The Board from time to time may authorize the Company to declare and pay to Stockholders such dividends or other Distributions in cash or other Assets of the Company, or in securities of the Company, including Shares of one class payable to holders of Shares of another class, or from any other source as the Board in its discretion shall determine. The Board shall endeavor to authorize the Company to declare and pay such dividends and other Distributions as shall be necessary for the Company to qualify as a REIT under the REIT Provisions of the Code unless the Board has determined, in its sole discretion, that qualification as a REIT is not in the best interests of the Company; provided, however, Stockholders shall have no right to any dividend or other Distribution unless and until authorized by the Board and declared by the Company. The exercise of the powers and rights of the Board pursuant to this section shall be subject to the provisions of any class or series of Shares at the time outstanding. The receipt by any Person in whose name any Shares are registered on the records of the Company or by his or her duly authorized agent shall be a sufficient discharge for all dividends or other Distributions payable or deliverable in respect of such Shares and from all liability to see to the application thereof. (d) RIGHTS UPON LIQUIDATION. In the event of any voluntary or involuntary liquidation, dissolution or winding up, or any distribution of the Assets of the Company, the aggregate Assets available for distribution to holders of the Common Shares shall be determined in accordance with applicable law. Each holder of Common Shares of a particular class shall be entitled to receive, ratably with each other holder of Common Shares of such class, that portion of such aggregate Assets available for distribution as the number of outstanding Common Shares of such class held by such holder bears to the total number of outstanding Common Shares of such class then outstanding.

9 \\DC - 045418/000001 - 8136396 v3 (e) VOTING RIGHTS. Except as may be provided otherwise in the Charter, and subject to the express terms of any class or series of Preferred Shares, the holders of the Common Shares shall have the exclusive right to vote on all matters (as to which a common stockholder shall be entitled to vote pursuant to applicable law) at all meetings of the Stockholders. SECTION 5.3 PREFERRED SHARES. The Board may classify any unissued Preferred Shares and reclassify any previously classified but unissued Preferred Shares of any series from time to time, into one (1) or more classes or series of Shares. SECTION 5.4 CLASSIFIED OR RECLASSIFIED SHARES. Prior to issuance of classified or reclassified Shares of any class or series, the Board by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of Shares; (b) specify the number of Shares to be included in the class or series; (c) set or change, subject to the provisions of Section 5.9 and subject to the express terms of any class or series of Shares outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other Distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Company to file articles supplementary with the State Department of Assessments and Taxation of Maryland. Any of the terms of any class or series of Shares set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinations by the Board or other facts or events within the control of the Company) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of Shares is clearly and expressly set forth in the articles supplementary or other Charter document. SECTION 5.5 STOCKHOLDERS’ CONSENT IN LIEU OF MEETING. Any action required or permitted to be taken at any meeting of the Stockholders may be taken without a meeting by consent, in writing or by electronic transmission, in any manner and by the vote permitted by the MGCL and set forth in the Bylaws. SECTION 5.6 CHARTER AND BYLAWS. The rights of all Stockholders and the terms of all Shares are subject to the provisions of the Charter and the Bylaws. SECTION 5.7 NO ISSUANCE OF SHARE CERTIFICATES. Unless otherwise provided by the Board, the Company shall not issue stock certificates. A Stockholder’s investment shall be recorded on the books of the Company. To transfer his or her shares of stock, a Stockholder shall submit an executed form to the Company, which form shall be provided by the Company upon request. Such transfer will also be recorded on the books of the Company. Upon issuance or transfer of Shares, the Company will provide the Stockholder with information concerning his or her rights with regard to such Shares, as required by the Bylaws and the MGCL or other applicable law. SECTION 5.8 SUITABILITY OF STOCKHOLDERS. Until Listing, the following provisions shall apply: (i) INVESTOR SUITABILITY STANDARDS. Subject to suitability standards established by individual states, to become a Stockholder, if such prospective Stockholder is an individual (including an individual beneficiary of a purchasing IRA), or if the prospective Stockholder is a fiduciary (such as a trustee of a trust or corporate pension or profit sharing plan, or other tax-exempt organization, or a custodian under the Uniform Gifts to Minors Act), such individual or fiduciary, as the case may be, must represent to the Company, among other requirements as the Company may require from time to time: (a) that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a minimum annual gross income of $70,000 and a net worth (excluding home, home furnishings and automobiles) of not less than $70,000; or (b) that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a net worth (excluding home, home furnishings, and automobiles) of not less than $250,000.

10 \\DC - 045418/000001 - 8136396 v3 (ii) DETERMINATION OF SUITABILITY OF SALE. The Sponsor and each Person selling Common Shares on behalf of the Sponsor or the Company shall make every reasonable effort to determine that the purchase of Common Shares is a suitable and appropriate investment for each Stockholder. In making this determination, the Sponsor and each Person selling Common Shares on behalf of the Company shall ascertain that the prospective Stockholder: (a) meets the minimum income and net worth standards established for the Company; (b) can reasonably benefit from the Company based on the prospective Stockholder’s overall investment objectives and portfolio structure; (c) is able to bear the economic risk of the investment based on the prospective Stockholder’s overall financial situation; and (d) has apparent understanding of (1) the fundamental risks of the investment; (2) the risk that the Stockholder may lose the entire investment; (3) the lack of liquidity of the Common Shares; (4) the restrictions on transferability of the Common Shares; and (5) the tax consequences of the investment. The Sponsor or each Person selling Common Shares on behalf of the Sponsor or the Company shall make this determination with respect to each prospective Stockholder on the basis of information it has obtained from such prospective Stockholder. Relevant information for this purpose will include at least the age, investment objectives, investment experiences, income, net worth, financial situation, and other investments of the prospective Stockholder, as well as any other pertinent factors. The Sponsor and each Person selling Common Shares on behalf of the Company shall maintain records of the information used to determine that an investment in Common Shares is suitable and appropriate for a Stockholder. The Sponsor and each Person selling Common Shares on behalf of the Company shall maintain these records for at least six years. (iii) MINIMUM INVESTMENT AND TRANSFER. Subject to certain individual state requirements and except for Shares issued pursuant to the Reinvestment Plan, the Company will sell its Common Shares only to investors who initially purchase a minimum of 100 Common Shares for an aggregate price of $2,500. In order to satisfy the purchase requirements for retirement plans, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $100.00 or four (4) whole shares. An investment in Shares shall not, in itself, create a retirement plan, and in order to create a retirement plan a Stockholder must comply with all applicable provisions of the Code. Following the initial minimum investment, no subsequent sale or transfer of Common Shares other than pursuant to the Reinvestment Plan will be permitted of less than 100 Common Shares, and a Stockholder shall not transfer, fractionalize or subdivide such Shares so as to retain less than the minimum number thereof. SECTION 5.9 RESTRICTIONS ON OWNERSHIP AND TRANSFER. (i) DEFINITIONS. For purposes of this Section 5.9, the following terms shall have the following meanings: (a) “BENEFICIAL OWNERSHIP” means ownership of Shares by a Person, whether the interest in the Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings. (b) “BUSINESS DAY” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close. (c) “CHARITABLE BENEFICIARY” means one (1) or more beneficiaries of the Trust as determined pursuant to Section 5.9(iii)(f), provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code. (d) “CONSTRUCTIVE OWNERSHIP” means ownership of Shares by a Person, whether the interest in the Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The

11 \\DC - 045418/000001 - 8136396 v3 terms “Constructive Owner,” “Constructively Owns,” “Constructively Owning,” and “Constructively Owned” shall have the correlative meanings. (e) “EXCEPTED HOLDER” means a Stockholder for whom an Excepted Holder Limit is created by the Board pursuant to Section 5.9(ii)(g). (f) “EXCEPTED HOLDER LIMIT” means, provided that the affected Excepted Holder agrees to comply with the requirements established by the Board pursuant to Section 5.9(ii)(g), and subject to adjustment pursuant to Section 5.9(ii)(h), the percentage limit established by the Board pursuant to Section 5.9(ii)(g). (g) “MARKET PRICE” on any date means, with respect to any class or series of outstanding Shares, the Closing Price for such Shares on such date. The “Closing Price” on any date shall mean the last sale price for such Shares, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Shares, in either case as reported on the principal national securities exchange on which such Shares are Listed or admitted to trading or, if such Shares are not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the principal automated quotation system that may then be in use or, if such Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Shares selected by the Board or, in the event that no trading price is available for such Shares, the fair market value of the Shares, as determined by the Board. (f) “NYSE” means the New York Stock Exchange. (g) “PROHIBITED OWNER” means, with respect to any purported Transfer, any Person who, but for the provisions of Section 5.9(ii)(a), would Beneficially Own or Constructively Own Shares in violation of Section 5.9(ii)(a), and if appropriate in the context, shall also mean any Person who would have been the record owner of the Shares that the Prohibited Owner would have so owned. (h) “RESTRICTION TERMINATION DATE” means the first day on which the Board determines pursuant to Section 7.4 that it is no longer in the best interests of the Company to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of Shares set forth herein is no longer required in order for the Company to qualify as a REIT. (i) “SHARE OWNERSHIP LIMIT” means 9.8% in value of the aggregate of the outstanding Shares and 9.8% (in value or in number of Shares, whichever is more restrictive) of any class or series of Shares, or such other percentage determined by the Board in accordance with Section 5.9(ii)(h) hereof. (j) “TRANSFER” means any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership of Shares or the right to vote or receive dividends on Shares, or any agreement to take any such actions or cause any such events, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities or rights convertible into or exchangeable for Shares or any interest in Shares or any exercise of any such conversion or exchange right and (c) Transfers of interests in other entities that result in changes in Beneficial Ownership or Constructive Ownership of Shares; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings. (k) “TRUST” means any trust provided for in Section 5.9(iii)(a). (l) “TRUSTEE” means the Person unaffiliated with the Company and a Prohibited Owner, that is appointed by the Company to serve as trustee of the Trust. (ii) SHARES. (a) OWNERSHIP LIMITATIONS. Prior to the Restriction Termination Date, but subject to Section 5.10:

12 \\DC - 045418/000001 - 8136396 v3 (I) BASIC RESTRICTIONS. (A)(1) Except as set forth in any articles supplementary creating any class or series of Shares, no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own Shares in excess of the Share Ownership Limit and (2) no Excepted Holder shall Beneficially Own or Constructively Own Shares in excess of the Excepted Holder Limit for such Excepted Holder. (B) No Person shall Beneficially Own or Constructively Own Shares to the extent that such Beneficial Ownership or Constructive Ownership of Shares would result in the Company being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Company actually owning or Constructively Owning an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Company from such tenant would cause the Company to fail to satisfy any of the gross income requirements of Section 856(c) of the Code). (C) Any Transfer of Shares that, if effective, would result in the Shares being beneficially owned by fewer than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio, and the intended transferee shall acquire no rights in such Shares. (II) TRANSFER IN TRUST. If any Transfer of Shares occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning Shares in violation of Section 5.9(ii)(a)(I)(A) or (B), (A) then that number of Shares the Beneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 5.9(ii)(a)(I)(A) or (B) (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Section 5.9(iii), effective as of the close of business on the Business Day prior to the date of such Transfer, and such Person shall acquire no rights in such Shares; or (B) if the transfer to the Trust described in clause (A) of this Section 5.9(ii)(a)(II) would not be effective for any reason to prevent the violation of Section 5.9(ii)(a)(I)(A) or (B) then the transfer of that number of Shares that otherwise would cause any Person to violate Section 5.9(ii)(a)(I)(A) or (B) shall be void ab initio, and the intended transferee shall acquire no rights in such Shares. To the extent that, upon a transfer of Shares pursuant to this Section 5.9(i)(II), a violation of any provision of this Section 5.9 would nonetheless be continuing (for example where the ownership of Shares by a single Trust would violate the 100 stockholder requirement applicable to REITs), then Shares shall be transferred to that number of Trusts, each having a distinct Trustee and a Charitable Beneficiary or Beneficiaries that are distinct from those of each other Trust, such that there is no violation of any provision of this Section 5.9. (b) REMEDIES FOR BREACH. If the Board shall at any time determine that a Transfer or other event has taken place that results in a violation of Section 5.9(ii)(a) or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any Shares in violation of Section 5.9(ii)(a) (whether or not such violation is intended), the Board shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event, including, without limitation, causing the Company to redeem Shares, refusing to give effect to such Transfer on the books of the Company or instituting proceedings to enjoin such Transfer or other event; provided, however, that any Transfer or attempted Transfer or other event in violation of Section 5.9(ii)(a) shall automatically result in the transfer to the Trust described above, and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board or a committee thereof. (c) NOTICE OF RESTRICTED TRANSFER. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of Shares that will or may violate Section 5.9(ii)(a)(I)(A) or (B) or any Person who would have owned Shares that resulted in a transfer to the Trust pursuant to the provisions of Section 5.9(ii)(a)(II) shall immediately give written notice to the Company of such event, or in the case of such a

13 \\DC - 045418/000001 - 8136396 v3 proposed or attempted transaction, give at least 15 days prior written notice to the Company, and shall provide to the Company such other information as the Company may request in order to determine the effect, if any, of such Transfer on the Company’s status as a REIT. (d) OWNERS REQUIRED TO PROVIDE INFORMATION. Prior to the Restriction Termination Date: (I) every owner of more than five percent (5%) (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding Shares, within 30 days after the end of each taxable year, shall give written notice to the Company stating the name and address of such owner, the number of Shares Beneficially Owned and a description of the manner in which such Shares are held. Each such owner shall provide to the Company such additional information as the Company may request in order to determine the effect, if any, of such Beneficial Ownership on the Company’s status as a REIT and to ensure compliance with the Share Ownership Limit; and (II) each Person who is a Beneficial Owner or Constructive Owner of Shares and each Person (including the stockholder of record) who is holding Shares for a Beneficial Owner or a Constructive Owner shall provide to the Company such information as the Company may request, in good faith, in order to determine the Company’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance. (e) REMEDIES NOT LIMITED. Subject to Section 7.4 hereof, nothing contained in this Section 5.9(ii)(e) shall limit the authority of the Board to take such other action as it deems necessary or advisable to protect the Company and the interests of its Stockholders in preserving the Company’s status as a REIT. (f) AMBIGUITY. In the case of an ambiguity in the application of any of the provisions of this Section 5.9(ii), Section 5.9(iii), or any definition contained in Section 5.9(i), the Board shall have the power to determine the application of the provisions of this Section 5.9(ii) or Section 5.9(iii) or any such definition with respect to any situation based on the facts known to it. In the event Section 5.9(ii) or (iii) requires an action by the Board and the Charter fails to provide specific guidance with respect to such action, the Board shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Section 5.9. Absent a decision to the contrary by the Board (which the Board may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Section 5.9(ii)(b)) acquired Beneficial Ownership or Constructive Ownership of Shares in violation of Section 5.9(ii)(a), such remedies (as applicable) shall apply first to the Shares which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such Shares based upon the relative number of the Shares held by each such Person. (g) EXCEPTIONS. (I) Subject to Section 5.9(ii)(a)(I)(B), the Board, in its sole discretion, may (prospectively or retroactively) exempt a Person from the Share Ownership Limit and may establish or increase an Excepted Holder Limit for such Person if: (A) the Board obtains such representations and undertakings from such Person as the Board determines are reasonably necessary to ascertain that no individual’s Beneficial Ownership or Constructive Ownership of such Shares will violate Section 5.9(ii)(a)(I)(B); (B) such Person represents that it does not, and undertakes that it will not, actually own or Constructively Own an interest in a tenant of the Company (or a tenant of any entity owned or controlled by the Company) that would cause the Company to actually own or Constructively Own more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board obtains such representations and undertakings from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Company (or an entity owned or controlled by the Company) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the Board, rent from such tenant would not adversely affect the Company’s ability to qualify as a REIT, shall not be treated as a tenant of the Company); and

14 \\DC - 045418/000001 - 8136396 v3 (C) such Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Section 5.9(ii)(a) through Section 5.9(ii)(f)) will result in such Shares being automatically transferred to a Trust in accordance with Section 5.9(ii)(a)(II) and Section 5.9(iii). (II) Prior to granting any exception pursuant to Section 5.9(ii)(g)(I), the Board may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Company’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board may impose such conditions or restrictions as it deems appropriate in connection with granting such exception. (III) Subject to Section 5.9(ii)(a)(I)(B), an underwriter which participates in an Offering or a private placement of Shares (or Securities convertible into or exchangeable for Shares) may Beneficially Own or Constructively Own Shares (or Securities convertible into or exchangeable for Shares) in excess of the Share Ownership Limit but only to the extent necessary to facilitate such Offering or private placement. (IV) The Board may only reduce the Excepted Holder Limit for an Excepted Holder: (1) with the written consent of such Excepted Holder at any time, or (2) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Share Ownership Limit. (h) INCREASE OR DECREASE IN SHARE OWNERSHIP LIMIT. Subject to Section 5.9(ii)(a)(I)(B), the Board may from time to time increase the Share Ownership Limit for one (1) or more Persons and decrease the Share Ownership Limit for all other Persons; provided, however, that the decreased Share Ownership Limit will not be effective for any Person whose percentage ownership of Shares is in excess of such decreased Share Ownership Limit until such time as such Person’s percentage of Shares equals or falls below the decreased Share Ownership Limit, but any further acquisition of Shares in excess of such percentage ownership of Shares will be in violation of the Share Ownership Limit and, provided further, that the new Share Ownership Limit would not allow five or fewer Persons to Beneficially Own or Constructively Own more than 49.9% in value of the outstanding Shares. (i) NOTICE TO STOCKHOLDERS UPON ISSUANCE OR TRANSFER. Upon issuance or Transfer of Shares prior to the Restriction Termination Date, the Company shall provide the recipient with a notice containing information about the Shares purchased or otherwise Transferred, in lieu of issuance of a share certificate, in a form substantially similar to the following: The securities of Realty Finance Trust, Inc. (the “Company”) are subject to restrictions on Beneficial Ownership and Constructive Ownership and Transfer for the purpose, among others, of the Company’s maintenance of its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Company’s Charter, (i) no Person may Beneficially Own or Constructively Own Shares in excess of 9.8% of the value of the total outstanding Shares or 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of Shares unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially Own or Constructively Own Shares that would result in the Company being “closely held” under Section 856(h) of the Code or otherwise cause the Company to fail to qualify as a REIT; and (iii) any Transfer of Shares that, if effective, would result in the Shares being Beneficially Owned by fewer than 100 Persons (as determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio and the intended transferee shall acquire no rights in such shares. Any Person who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own Shares which causes or will cause a Person to Beneficially Own or Constructively Own Shares in excess or in violation of the above limitations must immediately give written notice (or, in the case of an attempted transaction, give at least 15 days prior written notice) to the Company. If any of the restrictions on transfer or ownership as set forth in (i) and (ii) above are violated, the Shares in excess or in violation of the above limitations will be automatically transferred to a Trustee of a Trust for the benefit of one (1) or more Charitable Beneficiaries. In addition, the Company may redeem Shares upon the terms and conditions specified by the Board in its sole discretion if the Board determines that ownership or a Transfer or other event may violate the restrictions

15 \\DC - 045418/000001 - 8136396 v3 described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio. All capitalized terms in this notice have the meanings defined in the Company’s Charter, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Shares on request and without charge. Requests for such a copy may be directed to the Secretary of the Company at its principal office. (iii) TRANSFER OF SHARES IN TRUST. (a) OWNERSHIP IN TRUST. Upon any purported Transfer or other event described in Section 5.9(ii)(a)(II) that would result in a transfer of Shares to a Trust, such shares shall be transferred to the Trustee as trustee of a Trust for the exclusive benefit of one (1) or more Charitable Beneficiaries. Such transfer to the Trustee shall be effective as of the close of business on the Business Day prior to the purported transfer or other event that results in the transfer to the Trust pursuant to Section 5.9(ii)(a)(III). The Trustee shall be appointed by the Company and shall be a Person unaffiliated with the Company and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Company as provided in Section 5.9(iii)(f). (b) STATUS OF SHARES HELD BY THE TRUSTEE. Shares held by the Trustee shall be issued and outstanding Shares. The Prohibited Owner shall have no rights in the Shares held in trust by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any Shares held in trust by the Trustee, shall have no rights to dividends or other Distributions and shall not possess any rights to vote or other rights attributable to the Shares held in the Trust. (c) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting rights and rights to dividends or other Distributions with respect to Shares held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other Distribution paid prior to the discovery by the Company that the Shares have been transferred to the Trustee shall be paid by the recipient of such dividend or other Distribution to the Trustee upon demand and any dividend or other Distribution authorized but unpaid shall be paid when due to the Trustee. Any dividend or other Distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to Shares held in the Trust and, subject to Maryland law, effective as of the date that the Shares have been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Company that the Shares have been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Company has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Section 5.9, until the Company has received notification that Shares have been transferred into a Trust, the Company shall be entitled to rely on its stock transfer and other stockholder records for purposes of preparing lists of Stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of Stockholders. (d) SALE OF SHARES BY TRUSTEE. Within twenty (20) days of receiving notice from the Company that Shares have been transferred to the Trust, the Trustee shall sell the Shares held in the Trust to a Person, designated by the Trustee, whose ownership of the Shares will not violate the ownership limitations set forth in Section 5.9(ii)(a)(I) or (II). Upon such sale, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 5.9(iii)(d). The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the Shares or, if the Prohibited Owner did not give value for the Shares in connection with the event causing the Shares to be held in the Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the Shares on the day of the event causing the Shares to be held in the Trust and (2) the price per share received by the Trustee from the sale or other disposition of the Shares held in the Trust. The Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 5.9(iii)(c). Any Net Sales Proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Company that Shares have been transferred to the Trustee, such Shares are sold by a Prohibited Owner, then (i) such Shares shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such Shares that exceeds

16 \\DC - 045418/000001 - 8136396 v3 the amount that such Prohibited Owner was entitled to receive pursuant to this Section 5.9, such excess shall be paid to the Trustee upon demand. (e) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares Transferred to the Trustee shall be deemed to have been offered for sale to the Company, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date the Company, or its designee, accepts such offer. The Company may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee pursuant to Section 5.9(iii)(c). The Company may pay the amount of such reduction to the Trustee for the benefit of the Charitable Beneficiary. The Company shall have the right to accept such offer until the Trustee has sold the Shares held in the Trust pursuant to Section 5.9(iii)(d). Upon such a sale to the Company, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner. (f) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the Trustee, the Company shall designate one (1) or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (i) the Shares held in the Trust would not violate the restrictions set forth in Section 5.9(ii)(a)(I) or (II) in the hands of such Charitable Beneficiary and (ii) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1) (A), 2055 and 2522 of the Code. SECTION 5.10 SETTLEMENTS. Nothing in Section 5.9 shall preclude the settlement of any transaction entered into through the facilities of any national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any provision of Sections 5.7, and any transfer in such a transaction shall be subject to all of the provisions and limitations set forth in Section 5.9. SECTION 5.11 SEVERABILITY. If any provision of Section 5.9 or any application of any such provision is determined to be void, invalid or unenforceable by any court having jurisdiction over the issue, the validity and enforceability of the remaining provisions of Section 5.9 shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court. SECTION 5.12 ENFORCEMENT. The Company is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of Section 5.9. SECTION 5.13 NON-WAIVER. No delay or failure on the part of the Company or the Board in exercising any right hereunder shall operate as a waiver of any right of the Company or the Board, as the case may be, except to the extent specifically waived in writing. SECTION 5.14 REPURCHASE OF SHARES. The Board may establish, from time to time, a program or programs by which the Company voluntarily repurchases Shares of Capital Stock from its Stockholders; provided, however, that such repurchase does not impair the capital or operations of the Company. The Sponsor, the Advisor, the Directors or any Affiliates thereof may not receive any fees arising out of the repurchase of stock by the Company. SECTION 5.15 DISTRIBUTION REINVESTMENT PLANS. The Board may establish, from time to time, a Distribution reinvestment plan or plans (each, a “Reinvestment Plan”). Under any such Reinvestment Plan, (i) all material information regarding Distributions to the Stockholders and the effect of reinvesting such Distributions, including the tax consequences thereof, shall be provided to the Stockholders not less often than annually and (ii) each Stockholder participating in such Reinvestment Plan shall have a reasonable opportunity to withdraw from the Reinvestment Plan not less often than annually after receipt of the information required in clause (i) above. SECTION 5.16 PREEMPTIVE AND APPRAISAL RIGHTS. Except as may be provided by the Board in setting the terms of classified or reclassified Shares pursuant to Section 5.4 or as may otherwise be provided by contract approved by the Board, no holder of stock shall, as such holder, have any preemptive right to purchase or subscribe

17 \\DC - 045418/000001 - 8136396 v3 for any additional Shares or any other security of the Company which it may issue or sell. Holders of Shares shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board, upon the affirmative vote of a majority of the Board, shall determine that such rights apply, with respect to all or any classes or series of stock, to one (1) or more transactions occurring after the date of such determination in connection with which holders of such Shares would otherwise be entitled to exercise such rights. ARTICLE VI. BOARD OF DIRECTORS SECTION 6.1 NUMBER OF DIRECTORS. The business and affairs of the Company shall be managed under the direction of the Board of Directors. The number of Directors of the Company (the “Directors”) shall be three, which number may be increased or decreased from time to time pursuant to the Bylaws, but shall never be less than the minimum required by the MGCL. A majority of the Board shall be Independent Directors, except for a period of up to sixty (60) days after the death, removal or resignation of an Independent Director pending the election of such Independent Director’s successor. The Company elects, under Section 3-804(c) of the MGCL, except as may be provided by the Board in setting the terms of any class or series of Preferred Shares, that any and all vacancies on the Board, may be filled only by the affirmative vote of a majority of the remaining Directors, even if the remaining Directors constitute less than a quorum, and any Director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred and until a successor is duly elected and qualifies. Notwithstanding the foregoing sentence, Independent Directors shall nominate replacements for vacancies among the Independent Directors’ positions. No reduction in the number of Directors shall cause the removal of any Director from office prior to the expiration of his term. For the purposes of voting for Directors, each Share may be voted for as many individuals as there are Directors to be elected and for whose election the Share is entitled to be voted. Cumulative voting for Directors is prohibited. SECTION 6.2 EXPERIENCE. Each Director shall have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage the type of Assets being acquired by the Company. At least one (1) of the Independent Directors shall have three years of relevant real estate experience, and at least one (1) of the Independent Directors shall be a financial expert with at least three years of relevant finance experience. SECTION 6.3 COMMITTEES. Subject to the MGCL, the Board may establish such committees as it deems appropriate, in its discretion, provided that the majority of the members of each committee are Independent Directors. Any Audit Committee established by the Board shall be composed solely of Independent Directors. SECTION 6.4 TERM. Except as may otherwise be provided in the terms of any Preferred Shares issued by the Company, each Director shall hold office for one (1) year, until the next annual meeting of Stockholders and until his successor is duly elected and qualifies. Directors may be elected to an unlimited number of successive terms. SECTION 6.5 RESIGNATION, REMOVAL OR DEATH. Any Director may resign by delivering his resignation to the Board, the Chairman of the Board, the chief executive officer or the Secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. Any Director or the entire Board may be removed from office with or without cause, by the affirmative vote of the holders of not less than a majority of the Shares then outstanding and entitled to vote generally in the election of directors, subject to the rights of any Preferred Shares to elect or remove such Directors. ARTICLE VII. POWERS OF THE BOARD OF DIRECTORS SECTION 7.1 GENERAL. The business and affairs of the Company shall be managed under the direction of the Board. In accordance with the policies on investments and borrowing set forth in this Article VII and Article IX hereof, the Board shall monitor the administrative procedures, investment operations and performance of the Company and the Advisor to assure that such policies are carried out. The Board may take any action that, in its sole judgment and discretion, is necessary or desirable to conduct the business of the Company. The Charter shall be

18 \\DC - 045418/000001 - 8136396 v3 construed with a presumption in favor of the grant of power and authority to the Board. Any construction of the Charter or determination made in good faith by the Board concerning its powers and authority hereunder shall be conclusive. The enumeration and definition of particular powers of the Board included in this Article VII shall in no way be limited or restricted by reference to or inference from the terms of this or any other provision of the Charter or construed or deemed by inference or otherwise in any manner to exclude or limit the powers conferred upon the Board under the general laws of the State of Maryland as now or hereafter in force. SECTION 7.2 AUTHORIZATION BY BOARD OF STOCK ISSUANCE. The Board may authorize the issuance from time to time of Shares of any class or series, whether now or hereafter authorized, or securities or rights convertible into Shares of any class or series, whether now or hereafter authorized, for such consideration as the Board may deem advisable (including as compensation for the Independent Directors or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws; provided that the issuance of Preferred Shares shall be approved by a majority of the Independent Directors not otherwise interested in the transaction, who shall have access, at the Company’s expense, to the Company’s legal counsel or to independent legal counsel. SECTION 7.3 FINANCINGS. The Board shall have the power and authority to cause the Company to borrow or, in any other manner, raise money for the purposes and on the terms it determines, which terms may (i) include evidencing the same by issuance of Securities and (ii) have such provisions as the Board may determine (a) to reacquire such Securities; (b) to enter into other contracts or obligations on behalf of the Company; (c) to guarantee, indemnify or act as surety with respect to payment or performance of obligations of any Person; and (d) to mortgage, pledge, assign, grant security interests in or otherwise encumber the Company’s Assets to secure any such Securities, contracts or obligations (including guarantees, indemnifications and suretyships); and to renew, modify, release, compromise, extend, consolidate or cancel, in whole or in part, any obligation to or of the Company or participate in any reorganization of obligors to the Company. SECTION 7.4 REIT QUALIFICATION. The Board shall use its reasonable best efforts to take such actions as are necessary or appropriate to preserve the status of the Company as a REIT; provided, however, if the Board determines that it is no longer in the best interests of the Company to continue to be qualified as a REIT, the Board may revoke or otherwise terminate the Company’s REIT election pursuant to Section 856(g) of the Code. The Board also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Section 5.9 is no longer required for REIT qualification. SECTION 7.5 DETERMINATIONS BY BOARD. The determination as to any of the following matters, made by or pursuant to the direction of the Board, shall be final and conclusive and shall be binding upon the Company and every Stockholder: the amount of the Net Income of the Company for any period and the amount of Assets at any time legally available for the payment of dividends, redemption of Shares or the payment of other Distributions on Shares; the amount of paid-in surplus, Net Assets, other surplus, annual or other cash flow, funds from operations, adjusted or modified funds from operations, adjusted or modified funds from operations, net profit, Net Assets in excess of capital, undivided profits or excess of profits over losses on sales of Assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other Distributions, qualifications or terms or conditions of redemption of any class or series of stock; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Company or any shares of stock; the number of shares of stock of any class of the Company; any matter relating to the acquisition, holding and disposition of any assets by the Company; the application of any provision of the Charter in the case of any ambiguity, including, without limitation: (i) any provision of the definitions of any of the following: Affiliate, Independent Director and Sponsor, (ii) which amounts paid to the Advisor or its Affiliates are property-level expenses connected with the ownership of real estate interests, loans or other property, (iii) which expenses are excluded from the definition of Total Operating Expenses and (iv) whether expenses qualify as Organization and Offering Expenses; any conflict between the MGCL and the provisions set forth in the NASAA REIT Guidelines; any interpretation of the terms and conditions of one or more agreements with any Persons; or any other matter relating to the business and affairs of the Company or required or permitted by applicable law, the Charter or Bylaws or otherwise to be determined by the Board; provided, however,

19 \\DC - 045418/000001 - 8136396 v3 that any determination by the Board as to any of the preceding matters shall not render invalid or improper any action taken or omitted prior to such determination and no Director shall be liable for making or failing to make such a determination. SECTION 7.6 STOCKHOLDER CONCURRENCE REQUIRED. Notwithstanding the foregoing, without concurrence of a majority of the outstanding Shares entitled to vote thereon, the Board may not (i) amend the Charter, except for amendments that do not adversely affect the rights, preferences and privileges of Stockholders (including amendments to provisions relating to Director qualifications, fiduciary duty, liability and indemnification, conflicts of interest, investment policies or investment restrictions), (ii) sell all or substantially all of the Assets other than in the ordinary course of the Company’s business or in connection with liquidation and dissolution or as otherwise permitted by law, (iii) cause the merger or similar reorganization of the Company except as permitted by law or (iv) dissolve or liquidate the Company, other than before the Company’s Initial Investment in Assets. SECTION 7.7 VOTE OF MAJORITY OF INDEPENDENT DIRECTORS REQUIRED. Notwithstanding the foregoing, a majority of the Independent Directors must approve matters relating to: (i) the requirement that a majority of Directors and of Independent Directors review and ratify the Charter at or before the first meeting of the Board; (ii) the duty of the Board to establish written policies on investments and borrowing and to monitor the administrative procedures, investment operations and performance of the Company and the Advisor to assure that such policies are carried out; (iii) the Company’s minimum capitalization; (iv) the Advisory Agreement; (v) liability and indemnification; (vi) reasonableness of the Company’s fees and expenses; (vii) limitations on Organization and Offering Expenses; (viii) limitations on Acquisition Fees and Acquisition Expenses; (viii) limitations on Total Operating Expenses; (ix) limitations on Real Estate commissions on resale of property; (x) limitations on incentive fees; (xi) Advisor compensation; (xii) the Independent Directors’ periodic duty to review the Company’s investment policies; (xiii) the authority of a majority of the Independent Directors to select an Independent Appraiser to determine the fair market value that the Company pays for Real Estate that it acquires both (a) when a majority of the Independent Directors determine to appoint an Independent Appraiser to determine fair market value in connection with any acquisition by the Company and (b) whenever the Company acquires property from the Advisor, the Directors, the Sponsor or their Affiliates; (xiv) the restrictions and procedures contained herein relating to meetings of Stockholders; (xv) the authority of a majority of Stockholders present in person or by proxy at an annual meeting at which a quorum is present, without the necessity for concurrence by the Board, to vote to elect the Directors; (xvi) those requirements of any Reinvestment Plan that the Board establishes, relating to periodic distribution of certain material information to Stockholders and opportunity for participating Stockholders to withdraw; (xvii) the adoption of a Plan of Liquidation or a postponement thereof; and (xviii) the requirement that a majority of Independent Directors must approve matters relating to the duties and restrictions enumerated in this Section 7.7. ARTICLE VIII. ADVISOR SECTION 8.1 APPOINTMENT AND INITIAL INVESTMENT OF ADVISOR. The Board is responsible for setting the general policies of the Company and for the general supervision of its business conducted by officers, agents, employees, advisors or independent contractors of the Company. However, the Board is not required personally to conduct the business of the Company, and it may (but need not) appoint, employ or contract with any Person (including a Person Affiliated with any Director) as an Advisor and may grant or delegate such authority to the Advisor as the Board may, in its sole discretion, deem necessary or desirable. The term of retention of any Advisor shall not exceed one (1) year, although there is no limit to the number of times that a particular Advisor may be retained. SECTION 8.2 SUPERVISION OF ADVISOR. The Board shall evaluate the performance of the Advisor before entering into or renewing an Advisory Agreement, and the criteria used in such evaluation shall be reflected in the minutes of the meetings of the Board. The Board may exercise broad discretion in allowing the Advisor to administer and regulate the operations of the Company, to act as agent for the Company, to execute documents on behalf of the Company and to make executive decisions that conform to general policies and principles established by the Board. The Board shall monitor the Advisor to assure that the administrative procedures, operations and programs of the Company are in the best interests of the Stockholders and are fulfilled. The Independent Directors

20 \\DC - 045418/000001 - 8136396 v3 are responsible for reviewing the total fees and expenses of the Company at least annually or with sufficient frequency to determine that the expenses incurred are reasonable in light of the investment performance of the Company, its Net Assets, its Net Income and the fees and expenses of other comparable unaffiliated REITs. Each such determination shall be reflected in the minutes of the meetings of the Board. The Independent Directors also will be responsible for reviewing, from time to time and at least annually, the performance of the Advisor and determining that compensation to be paid to the Advisor is reasonable in relation to the nature and quality of services performed and that such compensation is within the limits prescribed by the Charter. The Independent Directors shall also supervise the performance of the Advisor and the compensation paid to the Advisor by the Company in order to determine that the provisions of the Advisory Agreement are being carried out. Specifically, the Independent Directors will consider factors such as (i) the amount of the fee paid to the Advisor in relation to the size, composition and performance of the Assets, (ii) the success of the Advisor in generating opportunities that meet the investment objectives of the Company, (iii) rates charged to other REITs and to investors other than REITs by advisors performing the same or similar services, (iv) additional revenues realized by the Advisor and its Affiliates through their relationship with the Company, including loan administration, underwriting or broker commissions, servicing, engineering, inspection and other fees, whether paid by the Company or by others with whom the Company does business, (v) the quality and extent of service and advice furnished by the Advisor, (vi) the performance of the Assets, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations, and (vii) the quality of the Assets relative to the investments generated by the Advisor for its own account. The Independent Directors may also consider all other factors that they deem relevant, and the findings of the Independent Directors on each of the factors considered shall be recorded in the minutes of the Board. The Board shall determine whether any successor Advisor possesses sufficient qualifications to perform the advisory function for the Company and whether the compensation provided for in its contract with the Company is justified. SECTION 8.3 FIDUCIARY OBLIGATIONS. The Advisor shall have a fiduciary responsibility and duty to the Company and to the Stockholders. SECTION 8.4 AFFILIATION AND FUNCTIONS. The Board, by resolution or in the Bylaws, may provide guidelines, provisions or requirements concerning the affiliation and functions of the Advisor. SECTION 8.5 TERMINATION. Either a majority of the Independent Directors or the Advisor may terminate the Advisory Agreement on sixty (60) days’ written notice without cause or penalty, and, in such event, the Advisor will cooperate with the Company and the Board in making an orderly transition of the advisory function. SECTION 8.6 DISPOSITION FEE ON SALE OF PROPERTIES. The Company may pay the Advisor a real estate commission upon Sale of one (1) or more Properties, in an amount equal to the lesser of (i) one-half (1/2) of the Competitive Real Estate Commission if a third party broker is also involved, or (ii) two percent (2%) of the sales price of such Property or Properties. Payment of such fee may be made only if the Advisor provides a substantial amount of services in connection with the Sale of a Property or Properties, as determined by a majority of the Independent Directors. In addition, the amount paid when added to all other real estate commissions paid to unaffiliated parties in connection with such Sale shall not exceed the lesser of the Competitive Real Estate Commission or an amount equal to six percent (6%) of the sales price of such Property or Properties. SECTION 8.7 INCENTIVE FEES. The Company may pay (including through the issuance of an interest by the Operating Partnership) the Advisor or its Affiliates an interest in the gain from the Sale of Assets, for which full consideration is not paid in cash or property of equivalent value, provided the amount or percentage of such interest is reasonable. Such an interest in gain from the Sale of Assets shall be considered presumptively reasonable if it does not exceed fifteen percent (15%) of the balance of such net proceeds remaining after payment to Stockholders, in the aggregate, of an amount equal to one hundred percent (100%) of the Invested Capital, plus an amount equal to six percent (6%) of the Invested Capital per annum cumulative. In the case of multiple Advisors, such Advisor and any of their Affiliates shall be allowed such fees provided such fees are distributed by a proportional method reasonably designed to reflect the value added to the Company Assets by each respective Advisor or any Affiliate. SECTION 8.8 ORGANIZATION AND OFFERING EXPENSES LIMITATION. The Company shall reimburse the Advisor and its Affiliates for Organization and Offering Expenses incurred by the Advisor or its Affiliates;

21 \\DC - 045418/000001 - 8136396 v3 provided, however, that the total amount of all Organization and Offering Expenses shall be reasonable and shall in no event exceed fifteen percent (15%) of the Gross Proceeds of each Offering. SECTION 8.9 ACQUISITION FEES. The Company may pay the Advisor and its Affiliates fees for the review and evaluation of potential investments in Assets; provided, however, (i) that the total of all Acquisition Fees and Acquisition Expenses shall be reasonable, and shall not exceed an amount equal to four and one-half percent (4.5%) of the Contract Purchase Price, or, in the case of a Mortgage, four and one-half percent (4.5%) of the funds advanced and (ii) that once all the proceeds from the Initial Public Offering have been fully invested, the total of all Acquisition Fees shall not exceed an amount equal to one and one-half percent (1.5%) of the Contract Purchase Price for all the Assets acquired; provided, however, that a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in the transaction may approve fees and expenses in excess of these limits if they determine the transaction to be commercially competitive, fair and reasonable to the Company. SECTION 8.10 ANNUAL SUBORDINATED PERFORMANCE FEE. The Company may pay the Advisor an Annual Subordinated Performance Fee (“Annual Subordinated Performance Fee”) calculated on the basis of the Company’s total return to Stockholders; provided, that in any year in which the Company’s total return to Stockholders exceeds six percent (6%) per annum, the Advisor shall receive fifteen percent (15%) of the excess total return but shall not receive more than ten percent (10%) of the aggregate total return for such year. SECTION 8.11 REIMBURSEMENT FOR TOTAL OPERATING EXPENSES. The Company may reimburse the Advisor, at the end of each fiscal quarter, for Total Operating Expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for Total Operating Expenses that, in the four consecutive fiscal quarters then ended, exceed the greater of two percent (2%) of Average Invested Assets or twenty five percent (25%) of Net Income (the “2%/25% Guidelines”) for such year. The Independent Directors shall have the fiduciary responsibility of limiting Total Operating Expenses to amounts that do not exceed the 2%/25% Guidelines unless they have made a finding that, based on such unusual and non-recurring factors that they deem sufficient, a higher level of expenses (an “Excess Amount”) is justified. Any such finding and the reasons in support thereof shall be reflected in the minutes of the meetings of the Board. Within sixty (60) days after the end of any fiscal quarter of the Company for which there is an Excess Amount which the Independent Directors conclude was justifiable and reimbursable to the Advisor, there shall be sent to the Stockholders a written disclosure of such fact, together with an explanation of the factors the Independent Directors considered in determining that such Excess Amount was justified. If the Independent Directors do not determine that excess expenses are justified, the Advisor shall reimburse the Company at the end of the twelve month period the amount by which the annual expenses paid or incurred by the Company exceeded the 2%/25% Guidelines. SECTION 8.12 REIMBURSEMENT LIMITATION. The Company shall not reimburse the Advisor or its Affiliates for services for which the Advisor or its Affiliates are entitled to compensation in the form of a separate fee. SECTION 8.13 NO FEES UPON INTERNALIZATION. If the Board elects to internalize any management services provided by the Advisor, neither the Company nor the Operating Partnership shall pay any compensation or other remuneration to the Advisor or its Affiliates in connection with such internalization of management services. ARTICLE IX. INVESTMENT OBJECTIVES AND LIMITATIONS SECTION 9.1 REVIEW OF OBJECTIVES. The Independent Directors shall review the investment policies of the Company with sufficient frequency (not less often than annually) to determine that the policies being followed by the Company are in the best interests of its Stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the Board. SECTION 9.2 CERTAIN PERMITTED INVESTMENTS. The following shall apply: (i) The Company may invest in Assets.

22 \\DC - 045418/000001 - 8136396 v3 (ii) The Company may invest in Joint Ventures with the Sponsor, the Advisor, one (1) or more Directors or any of their Affiliates only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction, approve such investment as being fair and reasonable to the Company and on substantially the same terms and conditions as those received by the other joint venturers. (iii) Subject to any limitations in Section 9.3, the Company may invest in equity securities, provided that such investment shall be permitted only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approve such investment as being fair, competitive and commercially reasonable. SECTION 9.3 INVESTMENT LIMITATIONS. In addition to other investment restrictions imposed by the Board from time to time, consistent with the Company’s objective of qualifying as a REIT, unless otherwise determined with or upon the approval of a majority of Independent Directors, the following shall apply to the Company’s investments: (i) Not more than ten percent (10%) of the Company’s total assets shall be invested in Unimproved Real Property or mortgage loans on Unimproved Real Property. (ii) The Company shall not invest in commodities or commodity future contracts. This limitation is not intended to apply to futures contracts, when used solely for hedging purposes in connection with the Company’s ordinary business of investing in Real Estate assets and Mortgages. (iii) Except for those Mortgages insured or guaranteed by a government or government agency, the Company shall not invest in or make any Mortgage, unless an appraisal is obtained concerning the underlying property. In a transaction in which a majority of the Independent Directors so determine, and in any transaction with the Advisor, the Sponsor, any Director or any Affiliate thereof, such appraisal will be obtained from an Independent Appraiser concerning the underlying property. Such appraisals shall be maintained in the Company’s records for at least five (5) years and shall be available for inspection and duplication by any holder of Common Shares for a reasonable charge. In addition to the appraisal, a mortgagee’s or owner’s title insurance policy or commitment as to the priority of the mortgage or condition of the title must be obtained. (iv) The Company shall not make or invest in any Mortgage, including a construction loan, on any one (1) property if the aggregate amount of all mortgage loans outstanding on the property, including the loans of the Company, would exceed an amount equal to eighty-five percent (85%) of the appraised value of the property as determined by appraisal, unless substantial justification exists because of the presence of other underwriting criteria. For purposes of this subsection, the “aggregate amount of all mortgage loans outstanding on the property, including the loans of the Company” shall include all interest (excluding contingent participation in income and/or appreciation in value of the mortgaged property), the current payment of which may be deferred pursuant to the terms of such loans, to the extent that deferred interest on each loan exceeds five percent (5%) per annum of the principal balance of the loan. (v) The Company shall not invest in indebtedness secured by a mortgage on real property which is subordinate to liens or other indebtedness or equity interests of the Advisor, the Sponsor, any Director or any Affiliate of the Company. (vi) The Company shall not issue (A) equity Securities redeemable solely at the option of the holder (except that Stockholders may offer their Common Shares to the Company pursuant to any repurchase plan adopted by the Board on terms outlined in the Prospectus relating to any Offering, as such plan is thereafter amended in accordance with its terms); (B) debt Securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is sufficient to properly service that higher level of debt; (C) equity Securities on a deferred payment basis or under similar arrangements; or (D) options or warrants to purchase shares of Capital Stock to the Advisor, the Directors, the Sponsor or any Affiliate thereof except on the same terms as such options or warrants, if any, are sold to the general public. The foregoing restrictions shall not prevent the Company from issuing options or warrants to the Advisor, the Directors, the Sponsor or any Affiliate thereof at exercise prices not less than the fair market value of the underlying Securities on the date of grant and for consideration (which may

23 \\DC - 045418/000001 - 8136396 v3 include services) that in the judgment of the Independent Directors has a market value not less than the value of such option or warrant on the date of grant. Options or warrants issuable to the Advisor, the Directors, the Sponsor or any Affiliate thereof shall not exceed ten percent (10%) of the outstanding Shares on the date of grant. The voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Company for each privately offered share bears to the book value of each outstanding publicly held share. (vii) A majority of the Directors or a majority of a duly authorized committee of the Board shall authorize the consideration to be paid for each Asset, ordinarily based on the fair market value of the Asset. If a majority of the Independent Directors on the Board or such duly authorized committee determine, or if the Asset is acquired from the Advisor, a Director, the Sponsor or their Affiliates, such fair market value shall be determined by a qualified Independent Appraiser selected by such Independent Directors. (viii) The Company will continually review its investment activity to attempt to ensure that it is not classified as an “investment company” under the Investment Company Act of 1940, as amended. (ix) The Company will not make any investment that the Company believes will be inconsistent with its objectives of qualifying and remaining qualified as a REIT unless and until the Board determines, in its sole discretion, that REIT qualification is not in the best interests of the Company. (x) The Company shall not invest in real estate contracts of sale unless such contracts are in recordable form and appropriately recorded in the chain of title. (xi) The Company shall not engage in trading, as opposed to investment activities. (xii) The Company shall not engage in underwriting activities or distribute, as agent, securities issued by others. (xiii) The aggregate amount of borrowing shall not exceed three hundred percent (300%) of the Company’s Net Assets as of the date of the borrowing, which is generally expected to be approximately seventy-five percent (75%) of the cost of the Company’s investments, unless the excess is approved by a majority of the Independent Directors and disclosed to the Stockholders in the Company’s next quarterly report to Stockholders following such borrowing along with justification for such excess. This limitation, however, shall not apply to individual real estate assets or investments. (xiv) The Company shall not acquire securities in any entity holding investments or engaging in activities prohibited by the restrictions on investments set forth in the foregoing clauses (i) through (xiii) of this Section 9.3. ARTICLE X. CONFLICTS OF INTEREST SECTION 10.1 SALES AND LEASES TO THE COMPANY. The Company may purchase or lease an Asset or Assets from the Sponsor, the Advisor, a Director, an officer or any Affiliate thereof upon a finding by a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction (i) that such transaction is fair and reasonable to the Company and (ii) that such transaction is at a price to the Company no greater than the cost of the Asset to such Sponsor, Advisor, Director, officer, Affiliate or, if the price to the Company is in excess of such cost, substantial justification exists for the excess and the excess is reasonable. In no event shall the purchase price paid by the Company for any such Asset exceed the Asset’s current appraised value. SECTION 10.2 SALES AND LEASES TO THE SPONSOR, ADVISOR, DIRECTORS OR AFFILIATES. An Advisor, the Sponsor, a Director, an officer or any Affiliate thereof may only purchase or lease Assets from the Company if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction determine that the transaction is fair and reasonable to the Company. SECTION 10.3 OTHER TRANSACTIONS.

24 \\DC - 045418/000001 - 8136396 v3 (i) The Company shall not engage in any other transaction with the Sponsor, a Director, the Advisor or any Affiliates thereof unless a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in such transaction approve such transaction as fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties. (ii) The Company shall not make loans to the Sponsor, the Advisor, a Director, an officer or any Affiliates thereof except Mortgages pursuant to Section 9.3(ii) hereof or loans to wholly owned subsidiaries of the Company. The Sponsor, the Advisor, the Directors, the officers and any Affiliates thereof shall not make loans to the Company, or to Joint Ventures in which the Company is a co-venturer, unless approved by a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in such transaction as fair, competitive, and commercially reasonable, and no less favorable to the Company than comparable loans between unaffiliated parties. (iii) The Company may enter into Joint Ventures with the Sponsor, the Advisor, a Director and any Affiliates thereof, provided that (a) a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approves the transaction as being fair and reasonable to the Company and (b) the investment by the Company is on substantially the same terms as those received by other joint venturers. ARTICLE XI. STOCKHOLDERS SECTION 11.1 MEETINGS OF STOCKHOLDERS. There shall be an annual meeting of the Stockholders, to be held on such date and at such time and place as shall be determined by or in the manner prescribed in the Bylaws, at which the Directors shall be elected and any other proper business may be conducted. The annual meeting will be held upon reasonable notice on a date that is within a reasonable period of time following the distribution of the Company’s annual report to Stockholders, but not less than thirty (30) days after delivery of such report. The Directors, including the Independent Directors, shall take reasonable steps to ensure that such notice is provided. The holders of a majority of Shares entitled to vote, present in person or by proxy, at an annual meeting at which a quorum is present may, without the necessity for concurrence by the Board, vote to elect the Directors. A quorum shall be the presence in person or by proxy of Stockholders entitled to cast at least fifty percent (50%) of all the votes entitled to be cast at such meeting on any matter. Special meetings of Stockholders may be called in the manner provided in the Bylaws, including by the Chairman of the Board, the President, the Chief Executive Officer, a majority of the Directors or a majority of the Independent Directors, and shall be called by the Secretary of the Company to act on any matter that may properly be considered at a meeting of Stockholders upon written request of Stockholders entitled to cast not less than ten percent (10%) of all votes entitled to be cast on such matter at such meeting. The written request must be delivered in person or by mail and must state the purpose of the meeting and the matters proposed to be acted upon at the meeting. Within ten (10) days after receipt of such written request, either in person or by mail, the secretary of the Company shall inform the Stockholders who made such request of the reasonably estimated cost of preparing and mailing a notice of the proposed meeting; and within (10) ten days of his or her receipt of payment of such costs, the Secretary of the Company shall provide all Stockholders with written notice, either in person or by mail, of such meeting and the purpose of such meeting. Notwithstanding anything to the contrary herein, such meeting shall be held not less than fifteen (15) days nor more than sixty (60) days after the Secretary’s delivery of such notice. Subject to the foregoing sentence, if the meeting is called by written request of Stockholders as described in this Section 11.1, such meeting shall be held at the time and place specified in the Stockholders’ request; provided, however, that if none is so specified, such meeting shall be held at a time and place convenient to the Stockholders. If there are no Directors, the Secretary of the Company shall promptly call a special meeting of the Stockholders entitled to vote for the election of successor Directors. Any meeting may be adjourned and reconvened as the Board may determine or as otherwise provided in the Bylaws. Without the approval of a majority of the Shares of stock entitled to vote on the matter, the Board may not (i) amend the Charter to materially and adversely affect the rights, preferences and privileges of the Stockholders; (ii) amend provisions of the Charter relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (iii) liquidate or dissolve the Company other than before the Initial Investment in Property; (iv) sell all or substantially all of the Company’s Assets other than in the ordinary course of business or as otherwise permitted by law; or (v) cause the merger or similar reorganization of the Company except as permitted by law.

25 \\DC - 045418/000001 - 8136396 v3 SECTION 11.2 VOTING RIGHTS OF STOCKHOLDERS. Subject to the provisions of any class or series of Shares of stock then outstanding and the mandatory provisions of any applicable laws or regulations, the Stockholders shall be entitled to vote only on the following matters: (a) election or removal of Directors, without the necessity for concurrence by the Board, as provided in Sections 6.1, 6.4 and 11.1 hereof; (b) amendment of the Charter, without the necessity for concurrence by the Board, as provided in Article XIII hereof; (c) dissolution of the Company, without the necessity for concurrence by the Board; (d) to the extent required under Maryland law, merger or consolidation of the Company or the sale or other disposition of all or substantially all of the Company’s Assets; and (e) such other matters with respect to which the Board has adopted a resolution declaring that a proposed action is advisable and directing that the matter be submitted to the Stockholders for approval or ratification. Except with respect to the foregoing matters, no action taken by the Stockholders at any meeting shall in any way bind the Board. Without the approval of a majority of the Shares of stock entitled to vote on the matter, the Board may not (i) amend the Charter to materially and adversely affect the rights, preferences and privileges of the Stockholders; (ii) amend provisions of the Charter relating to director qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (iii) liquidate or dissolve the Company other than before the Initial Investment in property; (iv) sell all or substantially all of the Company’s Assets other than in the ordinary course of business or as otherwise permitted by law; or (v) cause the merger or similar reorganization of the Company except as permitted by law. SECTION 11.3 EXTRAORDINARY ACTIONS. Notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of Shares of stock entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board and taken or approved by the affirmative vote of holders of Shares entitled to cast a majority of all the votes entitled to be cast on the matter. SECTION 11.4 VOTING LIMITATIONS ON SHARES HELD BY THE ADVISOR, DIRECTORS AND AFFILIATES. With respect to Shares owned by the Advisor, any Director or any of their Affiliates, neither the Advisor, nor such Director(s), nor any of their Affiliates may vote or consent on matters submitted to the Stockholders regarding the removal of the Advisor, such Director(s) or any of their Affiliates or any transaction between the Company and any of them. In determining the requisite percentage in interest of Shares necessary to approve a matter on which the Advisor, such Director(s) and any of their Affiliates may not vote or consent, any Shares owned by any of them shall not be included. SECTION 11.5 RIGHT OF INSPECTION. Any Stockholder and any designated representative thereof shall be permitted access to the records of the Company at all reasonable times, and may inspect and copy any of them for a reasonable charge. Inspection of the Company books and records by the office or agency administering the securities laws of a jurisdiction shall be provided upon reasonable notice and during normal business hours. SECTION 11.6 ACCESS TO STOCKHOLDER LIST. An alphabetical list of the names, addresses and telephone numbers of the Stockholders of the Company, along with the number of Shares held by each of them (the “Stockholder List”), shall be maintained as part of the books and records of the Company and shall be available for inspection by any Stockholder or the Stockholder’s designated agent at the home office of the Company upon the request of the Stockholder. The Stockholder List shall be updated at least quarterly to reflect changes in the information contained therein. A copy of the Stockholder List shall be mailed to any Stockholder so requesting within ten days of receipt by the Company of the request. The copy of the Stockholder List shall be printed in alphabetical order, on white paper, and in a readily readable type size (in no event smaller than 10-point type). The Company may impose a reasonable charge for expenses incurred in reproduction pursuant to the Stockholder request. A Stockholder may request a copy of the Stockholder List in connection with matters relating to Stockholders’ voting rights, and the exercise of Stockholder rights under federal proxy laws. If the Advisor or the Board neglects or refuses to exhibit, produce or mail a copy of the Stockholder List as requested, the Advisor and/or the Board, as the case may be, shall be liable to any Stockholder requesting the Stockholder List for the costs, including reasonable attorneys’ fees, incurred by that Stockholder for compelling the production of the Stockholder List, and for actual damages suffered by any Stockholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Stockholder List is to secure the Stockholder List or other information for the purpose of selling the Stockholder List

26 \\DC - 045418/000001 - 8136396 v3 or copies thereof, or of using the same for a commercial purpose, other than in the interest of the applicant as a Stockholder relative to the affairs of the Company. The Company may require the Stockholder requesting the Stockholder List to represent that the Stockholder List is not requested for a commercial purpose unrelated to the Stockholder’s interest in the Company. The remedies provided hereunder to Stockholders requesting copies of the Stockholder List are in addition to, and shall not in any way limit, other remedies available to Stockholders under federal law, or the laws of any state. SECTION 11.7 REPORTS. The Directors, including the Independent Directors, shall take reasonable steps to insure that the Company shall cause to be prepared and mailed or delivered to each Stockholder as of a record date after the end of the fiscal year and each holder of other publicly held Securities within one hundred twenty (120) days after the end of the fiscal year to which it relates an annual report for each fiscal year ending after the Commencement of the Initial Public Offering that shall include: (i) financial statements prepared in accordance with generally accepted accounting principles which are audited and reported on by independent certified public accountants; (ii) the ratio of the costs of raising capital during the period to the capital raised; (iii) the aggregate amount of advisory fees and the aggregate amount of other fees paid to the Advisor and any Affiliate of the Advisor by the Company and including fees or charges paid to the Advisor and any Affiliate of the Advisor by third parties doing business with the Company; (iv) the Total Operating Expenses of the Company, stated as a percentage of Average Invested Assets and as a percentage of Net Income; (v) a report from the Independent Directors that the policies being followed by the Company are in the best interests of its Stockholders and the basis for such determination; and (vi) separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving the Company, the Directors, the Advisors, the Sponsors and any Affiliate thereof occurring in the year for which the annual report is made, and the Independent Directors shall be specifically charged with a duty to examine and comment in the report on the fairness of such transactions. SECTION 11.8 TENDER OFFERS. If any Person makes a tender offer, including, without limitation, a “mini- tender” offer, such Person must comply with all of the provisions of Regulation 14D of the Exchange Act, including, without limitation, disclosure and notice requirements, that would be applicable if the tender offer was for more than five percent (5%) of the outstanding Shares of the stock of the Company; provided, however, that unless otherwise required by the Exchange Act, such documents are not required to be filed with the Securities and Exchange Commission. In addition, any such Person must provide notice to the Corporation at least ten (10) business days prior to initiating any such tender offer. No Stockholder may Transfer any Shares held by such Stockholder to any Person who initiates a tender offer without complying with the provisions set forth above (a “Non-Compliant Tender Offer”) unless such Stockholder shall have first offered such Shares to the Corporation at the greater of (i) the tender offer price, and (ii) the following, as applicable: (A) if the Company has an effective Share repurchase plan at the time of such Non-Compliant Tender Offer, the price at which such Stockholder would be able to sell such Shares pursuant to the Corporation’s Share repurchase plan, (B) if the Company does not have an effective repurchase plan at the time of such Non-Compliant Tender Offer and it has not yet determined a Net Asset value per share, the price at which such Stockholder would have been able to sell such shares pursuant to the Corporation’s Share repurchase plan immediately prior to the suspension or termination of the Corporation’s Share repurchase plan, or (C) if the Company does not have an effective Share repurchase plan at the time of such Non-Compliant Tender Offer and it has determined a Net Asset value per share, the price equal to Net Asset value per share (as calculated in the Prospectus) at such time as determined by the Board. In addition, any Person who makes a Non-Compliant Tender Offer shall be responsible for all expenses incurred by the Company in connection with the enforcement of the provisions of this Section 11.8, including, without limitation, expenses incurred in connection with the review of all documents related to such tender offer. In addition to the remedies provided herein, the Company may seek injunctive relief, including, without limitation, a temporary or permanent restraining order, in connection with any Non-Compliant Tender Offer. This Section 11.8 shall be of no force or effect with respect to any Shares that are then Listed. ARTICLE XII. LIABILITY OF STOCKHOLDERS, DIRECTORS, ADVISORS AND AFFILIATES; TRANSACTIONS BETWEEN AFFILIATES AND THE COMPANY SECTION 12.1 LIMITATION OF STOCKHOLDER LIABILITY. No Stockholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Company by reason of being a

27 \\DC - 045418/000001 - 8136396 v3 Stockholder, nor shall any Stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the Company’s Assets or the affairs of the Company by reason of being a Stockholder. SECTION 12.2 LIMITATION OF DIRECTOR AND OFFICER LIABILITY; INDEMNIFICATION. (a) Subject to the limitations set forth under Maryland law or in paragraph (c) or (d) below, no Director or officer of the Company shall be liable to the Company or its Stockholders for money damages. Neither the amendment nor repeal of this Section 12.2(a), nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Section 12.2(a), shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption. (b) Subject to the limitations set forth under Maryland law or in paragraph (c) or (d) below, the Company shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former Director or officer of the Company and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity, (ii) any individual who, while a Director or officer of the Company and at the request of the Company, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (iii) the Advisor of any of its Affiliates acting as an agent of the Company. The rights of a Director or officer to indemnification and advance of expenses provided hereby shall vest immediately upon election of such Director or officer. The Company may, with the approval of the Board or any duly authorized committee thereof, provide such indemnification and advance for expenses to a Person who served a predecessor of the Company in any of the capacities described in (i) or (ii) above and to any employee or agent of the Company or a predecessor of the Company. The Board may take such action as is necessary to carry out this Section 12.2(b). No amendment of the Charter or repeal of any of its provisions shall limit or eliminate the right of indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal. (c) Notwithstanding anything to the contrary contained in paragraph (a) or (b) above, the Company shall not provide for indemnification of a Director, the Advisor or any Affiliate of the Advisor (the “Indemnitee”) for any liability or loss suffered by any of them and the Company shall not provide that an Indemnitee be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: (i) The Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company. (ii) The Indemnitee was acting on behalf of or performing services for the Company. (iii) Such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnitee is a Director (other than an Independent Director), the Advisor or an Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an Independent Director. (iv) Such indemnification or agreement to hold harmless is recoverable only out of Net Assets and not from the Stockholders. (d) Notwithstanding anything to the contrary contained in paragraph (a) or (b) above, the Company shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by an Indemnitee, or any Person acting as a broker-dealer, unless one (1) or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the Indemnitee or any Person acting as a broker-dealer; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee or any Person acting as a broker-dealer; or (iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee, or any Person acting as a broker-dealer, and finds that indemnification of the settlement and the related

28 \\DC - 045418/000001 - 8136396 v3 costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which Securities were offered or sold as to indemnification for violations of securities laws. SECTION 12.3 PAYMENT OF EXPENSES. The Company may pay or reimburse reasonable legal expenses and other costs incurred by an Indemnitee in advance of final disposition of a proceeding only if: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (ii) the Indemnitee provides the Company with a written affirmation of the Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by the Company as authorized by Section 12.2, (iii) the proceeding was initiated by a third party who is not a Stockholder or, if by a Stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (iv) the Indemnitee provides the Company with a written undertaking to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest, if it is ultimately determined that the Indemnitee did not comply with the requisite standard of conduct. SECTION 12.4 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS. Neither the Stockholders nor the Directors, officers, employees or agents of the Company shall be liable under any written instrument creating an obligation of the Company by reason of their being Stockholders, Directors, officers, employees or agents of the Company, and all Persons shall look solely to the Company’s Assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of such instrument and shall not render any Stockholder, Director, officer, employee or agent liable thereunder to any third party, nor shall the Directors or any officer, employee or agent of the Company be liable to anyone as a result of such omission. ARTICLE XIII. AMENDMENTS The Company reserves the right from time to time to make any amendment to its Charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any outstanding Shares. All rights and powers conferred by the Charter on Stockholders, Directors and officers are granted subject to this reservation. Except for amendments permitted to be made without Stockholder approval under Maryland law or by specific provision in the Charter, any amendment to the Charter shall be valid only if declared advisable by the Board and approved by the affirmative vote of Stockholders entitled to cast a majority of all the votes entitled to be cast on the matter, including, without limitation, (i) any amendment which would adversely affect the rights, preferences and privileges of the Stockholders and (ii) any amendment to Sections 6.2 and 6.5 of Article VI, Article IX, Article X, Article XII, Article XIV, Article XV and this Article XIII (or any other amendment of the Charter that would have the effect of amending such sections). ARTICLE XIV. ROLL-UP TRANSACTIONS (i) In connection with any proposed Roll-Up Transaction, an appraisal of all of the Company’s assets shall be obtained from a competent Independent Appraiser. The Company’s assets shall be appraised on a consistent basis, and the appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The appraisal shall assume an orderly liquidation of the assets over a 12-month period. If the appraisal will be included in a prospectus used to offer the securities of a Roll-Up Entity, the appraisal shall be filed with the Securities and Exchange Commission and the states as an exhibit to the registration statement for the offering. Accordingly, an issuer using the appraisal shall be subject to liability for violation of Section 11 of the Securities Act, and comparable provisions under state laws for any material misrepresentations or omissions in the appraisal. The terms of the engagement of the Independent Appraiser shall clearly state that the engagement is for the benefit of the Company and the Stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to Stockholders in connection with a proposed Roll-Up Transaction. In connection with a proposed Roll-Up Transaction, the person sponsoring the Roll-Up Transaction shall offer to holders of Common Shares who vote against the proposed Roll-Up Transaction the choice of:

29 \\DC - 045418/000001 - 8136396 v3 (a) accepting the securities of a Roll-Up Entity offered in the proposed Roll-Up Transaction; or (b) one (1) of the following: (I) remaining as Stockholders of the Company and preserving their interests therein on the same terms and conditions as existed previously; or (II) receiving cash in an amount equal to the Stockholder’s pro rata share of the appraised value of the net assets of the Company. (ii) The Company is prohibited from participating in any proposed Roll-Up Transaction: (a) that would result in the holders of Common Shares having voting rights in a Roll-Up Entity that are less than the rights provided for in Article XI hereof; (b) that includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares of stock by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll-Up Entity), or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-Up Entity on the basis of the number of shares held by that investor; (c) in which investor’s rights to access of records of the Roll-Up Entity will be less than those described in Sections 11.5 and 11.6 hereof; or (d) in which any of the costs of the Roll-Up Transaction would be borne by the Company if the Roll-Up Transaction is rejected by the holders of Common Shares. ARTICLE XV. DURATION If the Board has not determined to pursue a Liquidity Event by the sixth anniversary of the Termination of the Initial Public Offering, the Board shall adopt a resolution declaring that a proposed liquidation of the Company is advisable on substantially the terms and conditions set forth in, or referred to, in the resolution (the “Plan of Liquidation”) and directing that the proposed Plan of Liquidation be submitted for consideration at either an annual or special meeting of the Stockholders provided, however, that the adoption of a Plan of Liquidation by the Board and the submission thereof to the Stockholders may be postponed if a majority of Directors, including a majority of Independent Directors, determines that a liquidation is not then in the best interest of the Stockholders. If the adoption of a Plan of Liquidation and the submission thereof to the Stockholders is so postponed, the Board shall reconsider whether the liquidation is in the best interest of the Stockholders at least annually and further postponement of the adoption of a Plan of Liquidation and the submission thereof to the Stockholders shall only be permitted if a majority of Directors, including a majority of Independent Directors, again determines that a liquidation would not then be in the best interest of the Stockholders. If the Board adopts a Plan of Liquidation and the Stockholders do not approve the Plan of Liquidation, (i) the Company shall continue operating and (ii) upon the written request of Stockholders owning in the aggregate not less than ten percent (10%) of the then outstanding Common Shares, the Board shall resubmit the Plan of Liquidation for consideration by proxy statement to the Stockholders up to once every two (2) years. If the Board adopts a Plan of Liquidation and the Stockholders approve the Plan of Liquidation, the Board shall commence an orderly liquidation of the Assets pursuant to such Plan of Liquidation. If listing occurs on or before the sixth anniversary of the Termination of the Initial Public Offering, the Company shall continue perpetually unless dissolved pursuant to any applicable provision of the MGCL. THIRD: The restatement of the charter as herein set forth have been duly approved by the Board of Directors of the Company as required by law.

30 \\DC - 045418/000001 - 8136396 v3 FOURTH: The current address of the principal office of the Company is as set forth in Article III of the foregoing restatement of the charter. FIFTH: The name and address of the Company’s current resident agent are as set forth in Article III of the foregoing restatement of the charter. SIXTH: The number of directors of the Company are five and the names of the directors currently in office are Richard J. Byrne, Jamie Handwerker, Peter J. McDonough, Buford Ortale and Elizabeth K. Tuppeny. SEVENTH: The undersigned acknowledges these Articles of Restatement to be the corporate act of the Company and, as to all matters or facts required to be verified under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury. [SIGNATURES ON FOLLOWING PAGE]

31 \\DC - 045418/000001 - 8136396 v3 IN WITNESS WHEREOF, Realty Finance Trust, Inc. has caused these Articles of Restatement to be signed in its name and on its behalf by its Chief Executive Officer, and attested by its Secretary, on this 14th day of November, 2016. ATTEST: By: /s/ Micah Goodman ______ Name: Micah Goodman Title: Secretary By: /s/ Richard Byrne Name: Richard Byrne Title: Chief Executive Officer

EX-10.4

Exhibit 10.4 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the , by and between Realty Finance Trust, Inc., a Maryland corporation (the “Company”), and (the “Indemnitee”). WHEREAS, at the request of the Company, Indemnitee currently serves as a director, officer or service provider of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his or her service; and WHEREAS, as an inducement to Indemnitee to continue to serve as such director, officer or service provider, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses; NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: Section 1. Definitions. For purposes of this Agreement: (a) “Applicable Legal Rate” means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determined that Indemnitee must repay any advanced expenses. (b) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who

-2- were directors as of the Effective Date or whose election for nomination for election was previously so approved. (c) “Corporate Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directly or indirectly by the Company. (d) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee. (e) “Effective Date” means the date set forth in the first paragraph of this Agreement. (f) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent. (g) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

-3- (h) “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding. Section 2. Services by Indemnitee. Indemnitee will serve as a director, officer or service provider of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee. Section 3. General. Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”). Section 4. Standard for Indemnification. Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful. Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to: (a) indemnification for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performing services for the Company; (iii) such loss or liability was not the result of (A) gross negligence or willful misconduct, in the case that the Indemnitee is an independent director of the Company or (B) negligence or misconduct, in the case that the Indemnitee is not

-4- an independent director of the Company; and (iv) such indemnification is recoverable only out of the Company’s net assets and not from the Company’s stockholders; (b) indemnification for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws; (c) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company; (d) indemnification hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or (e) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise. Section 6. Court-Ordered Indemnification. Subject to the limitations in Section 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances: (a) if such determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or (b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

-5- Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 5, to the extent that Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. Section 8. Advance of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with (a) such Proceeding which is initiated by a third party who is not a stockholder of the Company, or (b) such Proceeding which is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee, together with the Applicable Legal Rate of interest thereon, relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence, that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor. Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified against all

-6- Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. Section 10. Procedure for Determination of Entitlement to Indemnification. (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. (b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom. (c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.

-7- Section 11. Presumptions and Effect of Certain Proceedings. (a) In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption. (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification. (c) The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement. Section 12. Remedies of Indemnitee. (a) If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration. (b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of

-8- Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement. (c) If a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification. (d) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. (e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) and ending on the date such payment is made to Indemnitee by the Company. Section 13. Defense of the Underlying Proceeding. (a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the

-9- Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced. (b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement. (c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter. Section 14. Non-Exclusivity; Survival of Rights; Subrogation. (a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee

-10- in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy. (b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. Section 15. Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. Section 16. Coordination of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. Section 17. Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.

-11- Section 18. Duration of Agreement; Binding Effect. (a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement). (b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. (c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. (d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking. Section 19. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality

-12- and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. Section 20. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement. Section 21. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 22. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. Section 23. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: (a) If to Indemnitee, to the address set forth on the signature page hereto. (b) If to the Company, to: Realty Finance Trust, Inc. 9 West 57th Street, #4920 New York, New York 10022 Attn: Richard J. Byrne, Chief Executive Officer and President or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

-13- Section 24. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules. [SIGNATURE PAGE FOLLOWS]

-14- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. REALTY FINANCE TRUST, INC. By: _________________________ INDEMNITEE _________________________

Exhibit 10.4 EXHIBIT A AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED To: The Board of Directors of Realty Finance Trust, Inc. Re: Affirmation and Undertaking Ladies and Gentlemen: This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement, dated the [ ] day of [ ] 20[ ], by and between Realty Finance Trust, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”). Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement. I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as a director of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful. In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established. IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of _______________, 20____. _____________________________ Name:

EX-31.1

Exhibit 31.1

I, Richard J. Byrne, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 of Realty Finance Trust, 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:	November 14, 2016	/s/ Richard J. Byrne
		Richard J. Byrne Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Jerome Baglien, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 of Realty Finance Trust, 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:	November 14, 2016	/s/ Jerome S. Baglien
		Jerome S. Baglien Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATIONS

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer of Realty Finance Trust, Inc. (the “Company”), each hereby certify to his knowledge as follows:

The Quarterly Report on Form 10-Q of the Company, which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 14, 2016	/s/ Richard J. Byrne
		Richard J. Byrne Chief Executive Officer and President (Principal Executive Officer)
		/s/ Jerome S. Baglien
		Jerome S. Baglien Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Realty Finance Trust, Inc.
Entity Central Index Key	0001562528
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		31,683,529

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Consolidated Balance Sheets - USD ($) $ in Thousands		Sep. 30, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents		$ 60,873	$ 14,807
Restricted cash		5,000	5,366
Commercial mortgage loans, held for investment, net of allowance of $1,609 and $888	[1]	1,119,293	1,124,201
Real estate securities, available for sale, at fair value		57,639	130,754
Receivable for loan repayment		528	1,307
Accrued interest receivable	[2]	5,316	5,360
Prepaid expenses and other assets		763	689
Total assets		1,249,412	1,282,484
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations		287,505	287,229
Interest payable	[3]	1,705	792
Distributions payable		5,335	5,552
Accounts payable and accrued expenses		2,225	6,805
Due to affiliate		2,798	4,327
Total liabilities		614,134	628,155
Commitments and Contingencies
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of September 30, 2016 and December 31, 2015		0	0
Convertible stock (promote shares); $0.01 par value, 1,000 shares authorized, issued and outstanding as of September 30, 2016 and December 31, 2015		0	1
Common stock, $0.01 par value, 949,999,000 shares authorized, 31,605,701 and 31,385,280 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively		316	314
Additional paid-in capital		697,684	691,590
Accumulated other comprehensive loss		(2,219)	(2,254)
Accumulated deficit		(60,503)	(35,322)
Total stockholders' equity		635,278	654,329
Total liabilities and stockholders' equity		1,249,412	1,282,484
Commercial mortgage loans
ASSETS
Real estate securities, available for sale, at fair value		57,639	130,754
LIABILITIES AND STOCKHOLDERS' EQUITY
Repurchase agreements		241,868	206,239
Real estate securities
LIABILITIES AND STOCKHOLDERS' EQUITY
Repurchase agreements		$ 72,698	$ 117,211

[1] Includes $426,278 and $425,733 of loans net of allowance of $703 and $422 pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of September 30, 2016 and December 31, 2015, respectively.

[2] Includes $1,026 and $1,048 of interest receivable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

[3] Includes $513 and $513 of interest payable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands		Sep. 30, 2016	Dec. 31, 2015
Allowance for loan losses		$ 1,609	$ 888
Preferred stock, par value per share (in dollars per share)		$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)		50,000,000	50,000,000
Preferred stock, shares issued (in shares)		0	0
Preferred stock, shares outstanding (in shares)		0	0
Convertible stock, par value per share (in dollars per share)		$ 0.01	$ 0.01
Convertible stock, shares authorized (in shares)		1,000	1,000
Convertible stock, shares issued (in shares)		1,000	1,000
Convertible stock, shares outstanding (in shares)		1,000	1,000
Common stock, par value per share (in dollars per share)		$ 0.01	$ 0.01
Common stock, shares authorized (in shares)		949,999,000	949,999,000
Common stock, shares issued (in shares)		31,605,701	31,385,280
Common stock, shares outstanding (in shares)		31,605,701	31,385,280
Loans pledged as collateral		$ 426,278	$ 425,733
Interest receivable	[1]	5,316	5,360
Interest payable	[2]	1,705	792
Variable Interest Entity, Primary Beneficiary
Allowance for loan losses		703	422
Interest receivable		1,026	1,048
Interest payable		$ 513	$ 513

[1] Includes $1,026 and $1,048 of interest receivable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

[2] Includes $513 and $513 of interest payable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

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Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Interest Income:
Interest income	$ 20,250	$ 16,252	$ 60,763	$ 38,341
Less: Interest expense	7,317	3,469	17,478	7,925
Net interest income	12,933	12,783	43,285	30,416
Operating Expenses:
Asset management and subordinated performance fee	1,066	2,405	7,091	3,741
Acquisition fees	255	1,777	635	5,958
Administrative services expenses	2,480	0	3,835	0
Professional fees	2,154	659	4,226	3,136
Other expenses	686	439	2,092	919
Total expenses	6,641	5,280	17,879	13,754
Loan loss recovery/(provision)	113	(78)	(721)	(302)
Realized loss on sale of real estate securities	(1,032)	0	(1,032)	0
Net income	$ 5,373	$ 7,425	$ 23,653	$ 16,360
Basic net income per share (in dollars per share)	$ 0.17	$ 0.28	$ 0.75	$ 0.74
Diluted net income per share (in dollars per share)	$ 0.17	$ 0.28	$ 0.75	$ 0.74
Basic weighted average shares outstanding (in shares)	31,516,876	26,684,913	31,622,796	22,035,227
Diluted weighted average shares outstanding (in shares)	31,523,911	26,690,964	31,629,070	22,040,110

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 5,373	$ 7,425	$ 23,653	$ 16,360
Unrealized (loss)/gain on available-for-sale securities	2,608	(1,008)	35	(1,010)
Comprehensive income attributable to Realty Finance Trust, Inc.	$ 7,981	$ 6,417	$ 23,688	$ 15,350

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Consolidated Statement of Changes In Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Total	Convertible Stock	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance, shares at Dec. 31, 2015		1,000	31,385,280
Balance at Dec. 31, 2015	$ 654,329	$ 1	$ 314	$ 691,590	$ (2,254)	$ (35,322)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock repurchases (in shares)			(540,125)
Common stock repurchases	(13,031)		$ (5)	(13,026)
Common stock issued through distribution reinvestment plan (in shares)			755,798
Common stock issued through distribution reinvestment plan	19,099		$ 7	19,092
Share-based compensation (in shares)			4,748
Share-based compensation	27			27
Net income	23,653					23,653
Distributions declared	(48,834)					(48,834)
Conversion of convertible stocks (in shares)		(1,000)
Conversion of convertible stocks	0	$ (1)		1
Other comprehensive loss	35				35
Balance, shares at Sep. 30, 2016		0	31,605,701
Balance at Sep. 30, 2016	$ 635,278	$ 0	$ 316	$ 697,684	$ (2,219)	$ (60,503)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 23,653	$ 16,360
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization and (discount accretion), net	(1,761)	(877)
Accretion of deferred commitment fees	(1,169)	(603)
Amortization of deferred financing costs	2,989	1,872
Share-based compensation	27	24
Realized loss on sale of real estate securities	1,032	0
Loan loss provision	721	302
Changes in assets and liabilities:
Accrued interest receivable	1,213	(2,041)
Prepaid expenses and other assets	49	(416)
Accounts payable and accrued expenses	1,415	519
Due to affiliates	(1,529)	1,353
Interest payable	913	304
Net cash provided by operating activities	27,553	16,797
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans	(42,236)	(526,919)
Purchase of real estate securities	0	(53,304)
Proceeds from sale of real estate securities	69,957	0
Principal repayments received on commercial mortgage loans	48,906	45,542
Principal repayments received on real estate securities	2,218	1,573
Net cash provided by (used in) investing activities	78,845	(533,108)
Cash flows from financing activities:
Proceeds from issuances of common stock	0	316,614
Common stock repurchases	(19,026)	(2,899)
Payments of offering costs and fees related to common stock issuances	0	(36,981)
Borrowings on repurchase agreements - commercial mortgage loans	104,626	244,178
Repayments of repurchase agreements - commercial mortgage loans	(68,997)	(18,257)
Borrowings on repurchase agreements - real estate securities	1,019,598	50,274
Repayments of repurchase agreements - real estate securities	(1,064,111)	(3,946)
Increase in restricted cash related to financing activities	366	(1,339)
Payments of deferred financing costs	(2,836)	0
Distributions paid	(29,952)	(18,215)
Net cash (used in) provided by financing activities	(60,332)	529,429
Net change in cash and cash equivalents	46,066	13,118
Cash and cash equivalents, beginning of period	14,807	386
Cash and cash equivalents, end of period	60,873	13,504
Supplemental disclosures of cash flow information:
Interest paid	13,576	5,749
Supplemental disclosures of non-cash flow information:
Common stock issued through distribution reinvestment plan	19,099	13,643
Receivable for common stock issued	$ 0	$ 3,065

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Organization and Business Operations

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Operations

Organization and Business Operations

Realty Finance Trust, Inc. (the "Company") was incorporated in Maryland on November 15, 2012 and conducts its operations to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2013. Substantially all of the Company's business is conducted through Realty Finance Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the units of limited partner interests in the OP.

Benefit Street Partners L.L.C. serves as the Company's advisor (the "Advisor") pursuant to an advisory agreement executed on September 29, 2016 (the “Advisory Agreement”). The Advisor, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), is a credit-focused alternative asset management firm with over $14 billion in assets under management. The Advisor manages assets across a broad range of complementary credit strategies, including high yield, levered loans, private/opportunistic debt, liquid credit, structured credit and commercial real estate debt. The Advisor has over 115 professionals, including a 34-person team dedicated to the Advisor's real estate platform. The Advisor is in partnership with Providence Equity Partners L.L.C., a global private equity firm with a combined $47 billion in assets under management. Prior to September 29, 2016, Realty Finance Advisor, LLC ("Former Advisor") was the Company's advisor. The Former Advisor is controlled by AR Global Investments, LLC ("AR Global"). The Advisor is an affiliate of Providence Equity Partners L.L.C.

The Company is in business to originate, acquire and manage a diversified portfolio of commercial real estate debt secured by properties located both within and outside of the United States. The Company also invests in commercial real estate securities. Commercial real estate debt may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Real estate securities may include commercial mortgage-backed securities ("CMBS"), senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs").

The Company has no employees. The Company has retained the Advisor to manage the Company's affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of the Company's assets and the operations of the Company.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements and related footnotes are unaudited and have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2015, which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2016. There have been no significant changes to the Company's significant accounting policies during the three and nine months endedSeptember 30, 2016, as described below.

Principles of Consolidation

The Company consolidates all entities that the Company controls through either majority ownership or voting rights. In addition, the Company consolidates all variable interest entities ("VIE") of which the Company is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a VIE for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP.

The accompanying consolidated financial statements include the accounts of a collateralized loan obligation ("CLO") issued and securitized by a wholly owned subsidiary of the Company. The Company has determined the CLO is a VIE of which the Company's subsidiary is the primary beneficiary. The Company has disclosed the assets and liabilities of the CLO on the face of the consolidated balance sheet in accordance with ASC 810 - Consolidation.

Allowance for Loan Losses

The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is increased through the loan loss provision on the Company's consolidated statement of operations and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as cash in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes a general, formula-based component and an asset-specific component.

General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company currently estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced any losses, and takes into account current collateral and economic conditions affecting the probability and severity of losses when establishing the allowance for loan losses. The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans.

The Company designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-performing and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged.

Per Share Data

The Company calculates basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares issuable in connection with the restricted stock plan and if convertible shares were exercised, except when doing so would be anti-dilutive.

Reportable Segments

The Company conducts its business through the following segments:

• The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

• The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

See Note 12 - Segment Reporting for further information regarding the Company's segments.

Recently Issued Accounting Pronouncements

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are VIEs or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership and affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption was permitted, including adoption in an interim period. The Company elected to adopt this guidance effective January 1, 2016. The Company has evaluated the impact of the adoption of the new guidance on its consolidated financial statements and has determined the Company’s OP is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the Company's partnership interest is considered a majority voting interest in a business and the assets of the OP can be used for purposes other than settling its obligation, such as paying distributions. As such, the new guidance did not have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued an update that changes the accounting for certain aspects of share-based compensation. Among other things, the revised guidance allows companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the provisions of this guidance beginning January 1, 2016, electing to account for forfeitures when they occur, and determined that there is no impact to the Company’s consolidated financial position, results of operations and cash flows.

In March 2016, the FASB issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

In June 2016, the FASB issued guidance that changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance.

In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

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Commercial Mortgage Loans

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Commercial Mortgage Loans

Commercial Mortgage Loans

The following table is a summary of the Company's commercial mortgage loan carrying values by class (in thousands):

	September 30, 2016		December 31, 2015
Senior loans	$	905,876	$	894,075
Mezzanine loans	205,026		221,014
Subordinated loans	10,000		10,000
Total gross carrying value of loans	1,120,902		1,125,089
Less: Allowance for loan losses	1,609		888
Total commercial mortgage loans, net	$	1,119,293	$	1,124,201

The following table presents the activity in the Company's allowance for loan losses (in thousands):

	Nine Months Ended September 30, 2016		Nine Months Ended September 30, 2015
Beginning of period	$	888	$	570
Provision for loan losses	721		302
Charge-offs	—		—
Recoveries	—		—
Ending allowance for loan losses	$	1,609	$	872

As of September 30, 2016 and December 31, 2015, the Company's commercial mortgage loan portfolio comprised 73 and 77 loans, respectively.

	September 30, 2016				December 31, 2015
Loan Type	Par Value		Percentage		Par Value		Percentage
Office	$	320,195	28.4	%	$	307,876	27.2	%
Multifamily	323,031		28.6	%	305,129		26.9	%
Hospitality	173,526		15.4	%	171,752		15.1	%
Retail	151,584		13.4	%	158,784		14.0	%
Mixed Use	107,531		9.5	%	138,798		12.2	%
Industrial	52,688		4.7	%	52,107		4.6	%
	$	1,128,555	100.0	%	$	1,134,446	100.0	%

Credit Characteristics

As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

Investment Rating	Summary Description
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

All commercial mortgage loans are assigned an initial risk rating of 2.0. As of September 30, 2016 and December 31, 2015, the weighted average risk rating of loans was 2.1 and 2.0, respectively. As of September 30, 2016 and December 31, 2015, the Company did not have any loans that were past due on their payments, in non-accrual status or impaired.

For the nine months endedSeptember 30, 2016 and September 30, 2015, the activity in the Company's loan portfolio was as follows (in thousands):

	Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Balance at Beginning of Year	$	1,124,201		$	456,884
Acquisitions and originations	42,236			526,919
Dispositions	—			—
Principal repayments	(48,127		)	(45,542		)
Discount accretion and premium amortization*	1,704			873
Provision for loan losses	(721		)	(302		)
Balance at End of Period	$	1,119,293		$	938,832

________________________

* Includes amortization of capitalized acquisition fees and expenses.

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Real Estate Securities

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Real Estate Securities

Real Estate Securities

The following is a summary of the Company's real estate securities, CMBS (in thousands):

		Weighted Average
	Number of Investments	Interest Rate		Maturity	Par Value		Fair Value
September 30, 2016	7	5.27	%	September 2019	$	60,000	$	57,639
December 31, 2015	16	4.71	%	February 2019	133,183		130,754

The Company classified its CMBS as available-for-sale as of September 30, 2016 and December 31, 2015. These investments are reported at fair value in the consolidated balance sheet with changes in fair value recorded in accumulated other comprehensive income or loss. The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of September 30, 2016 and December 31, 2015 (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2016	$	59,858	$	—	$	(2,219	)	$	57,639
December 31, 2015	133,008		—		(2,254		)	130,754

As of September 30, 2016, the Company held 7 CMBS positions for an aggregate carrying value of $59.9 million, with an unrealized loss of $2.2 million, of which 6 positions had a total unrealized loss of $0.7 million for a period greater than 12 months. The Company does not believe any of the positions are other than temporarily impaired based on current market spreads. The Company does not intend to dispose the CMBS positions nor does the Company believe it is more likely than not that the Company will be required to dispose these positions before recovery of their amortized cost basis.

The Company has recognized loss of approximately $1.0 million for the three and nine months endedSeptember 30, 2016, recorded within the realized loss on sale of real estate securities in the consolidated statement of operations. The Company did not have any realized losses during the three and nine months endedSeptember 30, 2015.

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Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt

Debt

Repurchase Agreements - Commercial Mortgage Loans

As of September 30, 2016, the Company was party to repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility") and Barclays Bank PLC (the "Barclays Repo Facility"). The JPM Repo Facility provides up to $150.0 million in advances. The Barclays Repo Facility provides up to $150.0 million in advances. Both, the JPM Repo Facility and Barclays Repo Facility are subject to various adjustments. The initial maturity date of the JPM Repo Facility was June 18, 2016, with a one year extension at the Company’s option. The Company exercised the extension option with the JPM Repo Facility lender, extending the maturity date to June 17, 2017. The Company entered into an amendment of the Barclays Repo Facility, dated as of September 2, 2016 (the “Barclays Amendment”), upon the payment of an amendment fee, pursuant to which the maturity date of the Barclays Repo Facility was extended to October 6, 2016. Subsequent to September 30, 2016, the JPM Repo Facility was amended to, among other things, increase the maximum advance capacity to $300 million. The proceeds from the increase in the size of the JPM Repo Facility were used to pay off the outstanding balance on the Barclays Repo Facility and the Barclays Repo Facility was terminated. Refer to Note 13-Subsequent Events. As of September 30, 2016, the Company was in compliance with all debt covenants.

As of September 30, 2016 and December 31, 2015, the Company had $130.0 million and $84.3 million outstanding under the JPM Repo Facility. Advances under the JPM Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.25% to 4.5%, depending on the attributes of the purchased assets. As of September 30, 2016 and December 31, 2015, the weighted average interest rate on advances was 2.8% and 3.1%, respectively. The Company incurred $3.4 million and $4.2 million in interest expense on the JPM Repo Facility for the nine months ended September 30, 2016 and 2015, respectively, excluding amortization of deferred financing cost.

As of September 30, 2016 and December 31, 2015, the Company had $111.9 million and $121.9 million outstanding under the Barclays Repo Facility. As of September 30, 2016 and December 31, 2015, the weighted average interest rate on advances was 3.1% and 2.4%, respectively. The Company incurred $4.7 million and $3.1 million of interest expense on the Barclays Repo Facility for the nine months ended September 30, 2016 and 2015, respectively, excluding amortization of deferred financing cost. The Barclays Repo Facility was terminated on October 5, 2016.

The JPM Repo Facility and the Barclays Repo Facility generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. Should the value of the Company’s collateral decrease, whether as a result of deteriorating credit quality, an increase in credit market spreads or otherwise, resulting margin calls may cause an adverse change in the Company’s liquidity position.

Repurchase Agreements - Real Estate Securities

The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. Below is a summary of the Company's MRAs as of September 30, 2016 and December 31, 2015 (in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (*)		Interest Rate		Days to Maturity
As of September 30, 2016
J.P. Morgan Securities LLC	$	65,295	$	65	$	102,663	2.38	%	14
Citigroup Global Markets, Inc.	3,878		1		4,807		1.88	%	26
Wells Fargo Securities, LLC	3,525		3		4,813		1.86	%	12
Total/Weighted Average	$	72,698	$	69	$	112,283	2.33	%	15
As of December 31, 2015
J.P. Morgan Securities LLC	$	86,898	$	108	$	130,618	2.03	%	8
Citigroup Global Markets, Inc.	26,619		71		35,528		2.00	%	45
Wells Fargo Securities, LLC	3,694		3		4,925		1.67	%	13
Total/Weighted Average	$	117,211	$	182	$	171,071	2.01	%	17

* Includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

Collateralized Loan Obligation

On October 19, 2015, RFT 2015-FL1 Issuer, Ltd. (the “Issuer”) and RFT 2015-FL1 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, entered into an indenture with the OP, as advancing agent, U.S. Bank National Association as note administrator and U.S. Bank National Association as trustee, which governs the issuance of approximately $350.2 million principal balance secured floating rate notes (the “Notes”). In addition, concurrently with the issuance of the Notes, the Issuer also issued 78,188,494 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares”), which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities.

The Notes are collateralized by interests in a pool of 28 mortgage assets having a total principal balance of $428.4 million (the “Mortgage Assets”) originated by a subsidiary of the Company. The sale of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October 19, 2015, between the Company and the Issuer. In connection with the securitization, the Issuer and Co-Issuer offered and sold the following classes of Notes to third parties: Class A, Class B, Class C. A wholly owned subsidiary of the Company retained approximately $56.0 million of the total $76.0 million of Class C and all of the preferred equity in the Issuer. The retained Class C and its related interest income and the preferred equity are eliminated in the Company's consolidated financial statements. The Company, as the holder of preferred equity in the Issuer, will absorb the first losses of the CLO, which may have a negative impact to the Company's result of operations. The issuance of the CLO also results in an increase in interest expense within the consolidated statement of operations. The following table represents the terms of the CLO issued.

Facility ($000s)	Par Value Issued		Par Value Outstanding (*)		Interest Rate	Maturity Date
As of September 30, 2016
Tranche A	$	231,345	$	231,345	1M LIBOR + 175	8/1/2030
Tranche B	42,841		42,841		1M LIBOR + 388	8/1/2030
Tranche C	76,044		20,000		1M LIBOR + 525	8/1/2030
	$	350,230	$	294,186
As of December 31, 2015
Tranche A	$	231,345	$	231,345	1M LIBOR + 175	8/1/2030
Tranche B	42,841		42,841		1M LIBOR + 388	8/1/2030
Tranche C	76,044		20,000		1M LIBOR + 525	8/1/2030
	$	350,230	$	294,186

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* Excludes $56,044 and $56,044 of Tranche C of RFT issued CLO held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

The below table reflects the total assets and liabilities of the Company's only CLO. The CLO is considered a VIE and is consolidated into the Company's consolidated financial statements as of September 30, 2016 and December 31, 2015 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLO because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

Assets ($000s)	September 30, 2016		December 31, 2015
Cash	$	5	$	5
Commercial mortgage loans, held for investment, net of allowance of $703 and $422 (1)	426,278		425,733
Accrued interest receivable	1,026		1,048
Total Assets	$	427,309	$	426,786
Liabilities
Notes payable (2)(3)	$	343,295	$	342,998
Interest payable	513		513
Total Liabilities	$	343,808	$	343,511

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⁽¹⁾ The balance is presented net of allowance for loan loss of $703 and $422 as of September 30, 2016 and December 31, 2015, respectively. The commercial mortgage loans balance as of December 31, 2015 of $426,155 as disclosed in Note 5 to the consolidated financial statements included in the 2015 Form 10-K was not net of allowance for loan loss of $422.

⁽²⁾ Includes $55,790 and $55,769 of Tranche C of RFT issued CLO held by the Company, which eliminates within the Collateral loan obligations line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

⁽³⁾ The balance is presented net of deferred financing cost and discount of $6,935 and $7,232 as of September 30, 2016 and December 31, 2015, respectively. The notes payable balance as of December 31, 2015 of $348,269 as disclosed in Note 5 to the consolidated financial statements included in the 2015 Form 10-K was not net of deferred financing cost of $5,271.

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Net Income Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per Share

The following table is a summary of the basic and diluted net income per share computation for the three and nine months endedSeptember 30, 2016 and 2015, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Net income (in thousands)	$	5,373	$	7,425	$	23,653	$	16,360
Basic weighted average shares outstanding	31,516,876		26,684,913		31,622,796		22,035,227
Unvested restricted shares	7,035		6,051		6,274		4,883
Diluted weighted average shares outstanding	31,523,911		26,690,964		31,629,070		22,040,110
Basic net income per share	$	0.17	$	0.28	$	0.75	$	0.74
Diluted net income per share	$	0.17	$	0.28	$	0.75	$	0.74

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Common Stock

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Common Stock

Common Stock

As of September 30, 2016 and December 31, 2015, the Company had 31,605,701 and 31,385,280 shares of common stock outstanding, respectively, including shares issued pursuant to the DRIP and unvested restricted shares. As of September 30, 2016 and December 31, 2015, the Company had received total proceeds of $755.5 million and $755.5 million, respectively, excluding shares issued pursuant to the DRIP and share-based compensation.

On December 30, 2014, the Company filed with the Maryland State Department of Assessments and Taxation articles supplementary to its charter that reclassified 1,000 authorized but unissued shares of the Company’s common stock as shares of convertible stock and set the terms of such convertible shares. The Company then issued 1,000 convertible shares to the Former Advisor for $1.00 per share. The convertible shares automatically convert to shares of common stock upon the first occurrence of certain triggering events (the "Triggering Event"), including the termination of the advisory agreement between the Former Advisor and the Company under certain circumstances. In general, but with certain exceptions as outlined in the articles supplementary, each convertible share will convert into a number of common shares equal to 1/1000 of the quotient of (a) the conversion product (the product of 0.15 times the amount, if any, by which (i) the sum of the enterprise value as of the date of the Triggering Event plus total distributions paid to the Company’s stockholders through the date of the Triggering Event exceeds (ii) the sum of the Company's stockholders’ invested capital plus a 6.0% return as of the date of the Triggering Event) divided by (b) the quotient of the enterprise value divided by the number of shares of the Company’s common stock outstanding (on an as-converted basis) on the date of the Triggering Event. The conversion product will be reduced by the amounts payable pursuant to the annual subordinated performance fee as realized appreciation in the Company’s assets during the time that the Former Advisor or one of its affiliates acts as the Company’s advisor. Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a Triggering Event had occurred and, based on the Company’s determination of the enterprise value of the Company on the date of the Triggering Event, the total distributions paid to the Company’s stockholders through the date of the Triggering Event, and the sum of the Company's stockholders’ invested capital as of the date of the Triggering Event, that the convertible shares converted into a number of common shares equal to zero. As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion.

Distributions

In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate federal income taxes.

In May 2013, the Company's board of directors authorized, and the Company declared, a distribution payable on a monthly basis to stockholders of record on each day at a rate equal to $0.00565068493 per day, which is equivalent to $2.0625 per annum, per share of common stock. In March 2016, the Company's board of directors ratified the existing distribution amount a change to the daily distribution amount equivalent to $2.0625 per annum and for calendar year 2016, affirmed a change to the daily distribution amount to $0.0056352459 per day per share of common stock, effective January 1, 2016, to accurately reflect that 2016 is a leap year. The Company's distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured. The Company distributed $49.1 million during the nine months endedSeptember 30, 2016, comprised of $30.0 million in cash and $19.1 million in shares of common stock issued under the DRIP. The Company distributed $31.8 million during the nine months ended September 30, 2015, comprised of $18.2 million in cash and $13.6 million in shares of common stock issued under the DRIP. On November 10, 2016 the Company’s board of directors changed the DRIP offer price to $20.05, which is equal to the estimated per-share NAV as of September 30, 2016 approved by the board of directors. The price change will apply to the reinvestment of distributions commencing with October 2016 distributions.

Share Repurchase Program

The Company's Board unanimously approved an amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016. The SRP enables stockholders to sell their shares to the Company. Subject to certain conditions, stockholders that purchased shares of the Company's common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period.

The repurchase price per share for requests other than for death or disability will be equal to the most-recent estimated net asset value per share of the Company's common stock calculated by the Company's Advisor and approved by the Company's board of directors in accordance with the Company's valuation guidelines, or estimated per-share NAV, multiplied by a percentage equal to (i) 92.5%, if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95%, if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5%, if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100%, if the person seeking repurchase has held his or her shares for a period greater than four years. In the case of requests for death or disability, the repurchase price per share will be equal to the estimated per-share NAV at the time of repurchase.

Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same fiscal semester through the issuance of common stock pursuant to any DRIP in effect from time to time, provided that the Board has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. Any repurchase requests received during such fiscal semester will be paid at a price based on the Company's estimated per share NAV applicable on the last day of such fiscal semester, as described above. Due to these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. However, a stockholder may withdraw its request at any time or ask that the Company honors the request when funds are available. Pending repurchase requests will be honored on a pro rata basis. The Company will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made.

Calculations of the Company's estimated per-share NAV will occur periodically, at the discretion of the Board, provided that such calculations will be made at least annually. Following its calculation, the Company's estimated per-share NAV will be disclosed in a periodic report. The most recent calculation of the Company's estimated per-share NAV approved by the Board occurred on November 10, 2016 based on the Company's net asset value as of September 30, 2016 and was equal to $20.05.

When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares.

The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2016:

	Number of Requests	Number of Shares Repurchased(1)	Average Price per Share
Cumulative as of December 31, 2015	301	381,474	$	23.72
January 1 - March 31, 2016	—	—	—
April 1 - June 30, 2016	668	536,240	24.08
July 1 - September 30, 2016	4	3,542	25.27
Cumulative as of September 30, 2016	973	921,256	$	23.94

________________________

¹ As permitted under the SRP, in July 2016, our board of directors authorized, with respect to redemption requests received during the semi-annual period from January 1, 2016 to June 30, 2016, the repurchase of shares validly submitted for repurchase in an amount limited to the proceeds reinvested through our DRIP.  As a result, redemption requests in the amount of 208,470 shares were not fulfilled.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of September 30, 2016 and December 31, 2015, the Company had the below unfunded commitments to the Company's borrowers.

Funding Expiration	September 30, 2016		December 31, 2015
2016	$	238	$	890
2017	7,957		16,072
2018	74,745		104,428
2019	10,039		16,939
2023	6,500		—
Total	$	99,479	$	138,329

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. Except as noted below, the Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.  On June 6, 2016, an action was filed against the Company and two of its directors in the United States District Court for the Southern District of New York and styled Rurode v. Realty Finance Trust, Inc., et. al., No. 1:16-cv-04553.  The plaintiff’s individual and derivative complaint alleged that the Company made material misstatements in the proxy statement for its 2016 annual stockholder’s meeting related to an alleged planned merger transaction between the Company and an affiliate of its former advisor.  The plaintiff alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and sought to enjoin the Company’s 2016 annual meeting.  On June 28, 2016, the parties filed, and the court subsequently entered,  a stipulation and order of dismissal of the action, but provided that the court would retain jurisdiction to consider any application by plaintiff for an award of attorneys’ fees.  On October 20, 2016, the plaintiff submitted a request for $0.75 million in fees and expenses. The Company intends to oppose that request. The Company did not record any accrual in the September 30, 2016 financial statements related fee and expense request as the Company does not believe it is probable there will be a judgment against the Company that would have a material effect on the Company’s financial statements.

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Related Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions and Arrangements

Related Party Transactions and Arrangements

The Company entered into the Advisory Agreement with the Advisor on September 29, 2016.

The Advisor receives an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities; provided, however, that if and when the aggregate purchase price for all investments acquired after the date of the Advisory Agreement reaches $600,000,000, the Company’s obligation to pay acquisition fees to the Advisor shall terminate. The Company reimburses the Advisor for insourced expenses incurred by the Advisor on behalf of the Company related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments. In no event will the total of all acquisition fees and acquisition expenses exceed 4.5% of the principal amount funded with respect to the Company's total portfolio including subsequent fundings to investments in the Company's portfolio.

The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholder’s equity as calculated pursuant to the Advisory Agreement. The Company will pay the Advisor, an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Advisor exceed 10.0% of the aggregate total return for such year. The Company will reimburse the Advisor for expenses incurred related to administrative services such as accounting, legal and other services in accordance with the advisory agreement. Except as noted below, the Company did not make any payments to the Advisor for the three and nine months endedSeptember 30, 2016.

Until September 29, 2016, the Former Advisor served as the Company’s advisor and the Company paid the Former Advisor certain fees and expense reimbursements pursuant to its advisory agreement with the Former Advisor.

The Company also engaged in transactions with affiliates of the Former Advisor and AR Global. Until January 2016, the Company had been engaged in a public offering of its common shares, which was registered with the SEC (the “Offering”). Realty Capital Securities, LLC (the "Former Dealer Manager") served as the dealer manager of the Offering through December 31, 2015.  American National Stock Transfer, LLC, a subsidiary of the parent company of the Former Dealer Manager ("ANST"), provided the Company with transfer agency services through February 2016. RCS Capital Corporation, the parent company of the Company's Former Dealer Manager and certain of its affiliates that provided the Company with services, filed for Chapter 11 bankruptcy protection in January 2016, prior to which they were under common control with AR Global. In May 2016, RCAP and its affiliated debtors emerged from bankruptcy under the new name, Aretec Group, Inc.

Share Ownership

As of September 30, 2016 and December 31, 2015, entities wholly-owned by AR Global owned 52,771 and 8,888 shares of the Company’s outstanding common stock, respectively.

Fees Paid to Affiliates of AR Global in Connection with the Offering

Prior to the termination of the Offering, the Former Dealer Manager received fees and compensation in connection with the sale of the Company’s common stock in the Offering. The Former Dealer Manager received a selling commission of up to 7% of the per share purchase price of the Company's offering proceeds before reallowance of commissions earned by soliciting dealers. In addition, the Former Dealer Manager received up to 3% of the gross proceeds from the sale of shares, before reallowance to soliciting dealers, as a dealer manager fee. The Former Dealer Manager was permitted to reallow its dealer manager fee to such soliciting dealers.

The predecessor to AR Global was a party to a services agreement with RCS Advisory Services, LLC, ("RCS Advisory") a subsidiary of the parent company of the Former Dealer Manager, pursuant to which RCS Advisory and its affiliates provided the Company and certain other companies sponsored by AR Global with services (including, without limitation, transaction management, compliance, due diligence, event coordination and marketing services, among others) on a time and expenses incurred basis or at a flat rate based on services performed. The predecessor to AR Global instructed RCS Advisory to stop providing such services in November 2015 and no services have since been provided to the Company by RCS Advisory.

The Company was also party to a transfer agency agreement with ANST, pursuant to which ANST provided the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services), and supervisory services overseeing the transfer agency services performed by a third-party transfer agent. AR Global received written notice from ANST on February 10, 2016 that it would wind down operations by the end of the month and would withdraw as the transfer agent effective February 29, 2016. Subsequently, effective February 26, 2016, the Company entered into a definitive agreement with DST Systems, Inc., a third-party and its previous provider of sub-transfer agency services, to provide the Company directly with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services).

The table below shows the compensation and reimbursement to the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager incurred for services relating to the Offering during the three and nine months ended months ended September 30, 2016 and 2015, respectively, and the associated payable as of September 30, 2016 and December 31, 2015, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2016		2015		2016		2015		September 30, 2016		December 31, 2015
Total commissions and fees incurred from the Former Dealer Manager	$	—	$	9,932	$	—	$	30,700	$	—	$	—
Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager	$	—	$	1,957	$	—	$	5,805	$	480	$	480

The payables as of September 30, 2016 and December 31, 2015 in the table above are included in "Due to affiliates" on the Company's consolidated balance sheets. The fees incurred are recorded within additional paid in capital line in the consolidated balance sheets.

The Company is responsible for organizational and offering costs from the Offering, excluding commissions and Former Dealer Manager fees, up to a maximum of 2.0% of gross proceeds from its Offering of common stock, measured at the end of the Offering. Organizational and offering costs in excess of the 2.0% cap as of the end of the Offering are the Advisor's responsibility. As of September 30, 2016 and December 31, 2015, organizational and offering costs exceeded 2.0% of cap of gross proceeds received from the Offering by $0.8 million and $0.8 million, respectively which has been recorded in Additional Paid-In Capital of the Company's consolidated financial statements as the Former Advisor has not reimbursed the Company for these costs. Subsequent to September 30, 2016, these amounts were reimbursed to the Company.

Fees Paid to Former Advisor in Connection with the Operations of the Company

The Former Advisor received an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities. The Company reimbursed the Former Advisor for expenses incurred by the Former Advisor on behalf of the Company related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments. During the three and nine months endedSeptember 30, 2016, acquisition fees of $0.3 million and $0.6 million and for three and nine months endedSeptember 30, 2015, acquisition fees of $1.8 million and $6.0 million, respectively, have been recognized in Acquisition fees within the consolidated statement of operations. In addition, for the three and nine months endedSeptember 30, 2015 the Company capitalized $0.5 million and $2.2 million, of acquisition expenses in Commercial mortgage loans line within the Company's consolidated balance sheets, which will be amortized over the life of each investment using the effective interest method. The Company did not capitalize any acquisitions expenses for the three and nine months ended September 30, 2016.

The Company paid the Former Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 0.75% of the cost of the Company's assets. The asset management fee was based on the lower of the cost of the Company's assets and the fair value of the Company's assets (fair value will consist of the market value of each portfolio investment as determined by the Former Advisor in accordance with the Company's valuation guidelines). During the three and nine months endedSeptember 30, 2016 , the Company incurred $2.3 million and $7.1 million, respectively, in asset management fees. The total asset management fees were incurred to both the Former Advisor and the Advisor, the Former Advisor receiving $2.3 million and $7.1 million, while the amount payable to the Advisor is $26.4 thousand for the three and nine months ended, respectively. During the three and nine months ended2015, the Company incurred $1.9 million and $2.4 million in asset management fees, respectively, all of which were attributable to the Former Advisor. These asset management fees are recorded in Asset management and subordinated performance fee within the consolidated statement of operations. Prior to June 17, 2015, the amount of the asset management fee was reduced to the extent that funds from operations as defined by the National Association of Real Estate Investment Trusts ("FFO"), as adjusted, during the six month period ending on the last day of the calendar quarter immediately preceding the date such asset management fee was payable, was less than distributions declared during the same period. For purposes of this determination, FFO, as adjusted, is FFO adjusted to (i) include acquisition fees and acquisition expenses; (ii) include non-cash restricted stock grant amortization, if any; and (iii) impairments and loan loss reserves on investments, if any (including commercial mortgage loans and other debt investments). FFO, as adjusted, is not the same as FFO.

The Company paid the Former Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Former Advisor was be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Former Advisor exceed 10.0% of the aggregate total return for such year. The Company did not incur an annual subordinated performance fee during the three and nine months endedSeptember 30, 2016. In the June 30, 2016 Form 10-Q filed with the SEC on August 11, 2016 the Company recorded an annual subordinated performance fee of $1.3 million for the six months ended June 30, 2016. This amount has been reversed as the Company determined that as of the date the advisory agreement with the Former Advisor was terminated, the conditions necessary for payment of the annual subordinated performance fee for 2016 had not been satisfied. During the three and nine months endedSeptember 30, 2015, the Company incurred an annual subordinated performance fee of $0.6 million and $1.4 million, respectively. These subordinated performance fees are recorded in Asset management and subordinated performance fee within the statement of operations.

Effective June 1, 2013, the Company entered into an agreement with the Former Dealer Manager to provide strategic advisory services and investment banking services required in the ordinary course of the Company's business, such as performing financial analysis, evaluating publicly traded comparable companies and assisting in developing a portfolio composition strategy, a capitalization structure to optimize future liquidity options and structuring operations. The Company prepaid the cost of a one-time $0.9 million fee associated with this agreement and amortized the cost over the estimated life of the Offering into Other expenses on the Company's consolidated statements of operations. For period ending December 31, 2015, the Company had approximately $6,000 of unamortized cost. There was no remaining unamortized cost as of September 30, 2016 and these services are no longer being provided.

The table below depicts related party fees and reimbursements in connection with the operations of the Company for the three and nine months endedSeptember 30, 2016 and 2015 and the associated payable as of September 30, 2016 and December 31, 2015 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,				Payable as of
	2016			2015		2016		2015		September 30, 2016		December 31, 2015
Acquisition fees and expenses (1)	$	255		$	572	$	635	$	8,441	$	28	$	55
Administrative services expenses	2,480		—	—		3,835		—		1,500		—
Advisory and investment banking fee	—			14		6		42		—		—
Asset management and subordinated performance fee	1,066			2,405		7,091		3,741		758		3,792
Other related party expenses	6			—		56		—		32		—
Total related party fees and reimbursements	$	3,807		$	2,991	$	11,623	$	12,224	$	2,318	$	3,847

________________________

¹ Includes amortization of capitalized acquisition fees and expenses.

The payables as of September 30, 2016 and December 31, 2015 in the table above are included in "Due to affiliates" on the Company's consolidated balance sheets.

In order to improve operating cash flows and the ability to pay distributions from operating cash flows, the Former Advisor could elect to waive certain fees. The Former Advisor permanently waived a portion of the acquisition fees and expenses earned on the acquisition of the Company's CMBS in the amount of $0.1 million and $0.5 million for the three and nine months endedSeptember 30, 2015, respectively. The Company did not purchase any CMBS positions during the three and nine months ended September 30, 2016 as such did not incur any acquisition fees and expenses for CMBS purchases.

Subject to the limitations outlined below, the Company reimbursed the Former Advisor's cost of providing administrative services and personnel costs in connection with other services during the operational stage, in addition to paying an asset management fee; however, the Company did not reimburse the Former Advisor for personnel costs in connection with services for which the Former Advisor received acquisition fees or disposition fees. For the three and nine months endedSeptember 30, 2016, the Company incurred $2.5 million and $3.8 million of administrative costs in connection with the operations of the Company, which is included in "Administrative services expenses" in the consolidated statements of operations. The Company did not incur such expenses for the three and nine months endedSeptember 30, 2015.

The Former Advisor was required to pay any expenses in which the Company's operating expenses as defined by North American Securities Administrators Association at the end of the four preceding fiscal quarters exceeds the greater of (i) 2.0% of average invested assets or (ii) 25.0% of net income for such expense year. For the preceding four fiscal quarters, the Company did not exceed the greater of the two aforementioned criteria as of September 30, 2016.

Fees Paid to the Former Advisor in Connection with the Listing of the Company's Common Stock or Termination of the Advisory Agreement

On December 30, 2014, the Company issued 1,000 convertible shares to the Former Advisor for $1.00 per share. The convertible shares issued to the Advisor would convert to shares of the Company’s common stock upon the first to occur of any of the Triggering Events described in Note 7. Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a Triggering Event had occurred and, based on the Company’s determination of the enterprise value of the Company on the date of the Triggering Event, the total distributions paid to the Company’s stockholders through the date of the Triggering Event, and the sum of the Company's stockholders’ invested capital as of the date of the Triggering Event, that the convertible shares converted into a number of common shares equal to zero. As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion.

During the three and nine months endedSeptember 30, 2016 and 2015, no fees were paid in connection with the liquidation of assets, listing of the Company's common stock or termination of the advisory agreement.

The Company has also established a restricted share plan for the benefit of employees, directors, employees of the Advisor and its affiliates.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

• Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

• Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

• Level III - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.

CMBS are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all CMBS. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of September 30, 2016 and December 31, 2015, the Company received broker quotes on each CMBS investment used in determining the fair value and have been classified as Level II due to the observable nature of many of the market inputs.

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2016 and December 31, 2015 (in thousands):

	Total		Level I		Level II		Level III
September 30, 2016
Real estate securities	$	57,639	$	—	$	57,639	$	—
December 31, 2015
Real estate securities	130,754		—		130,754		—

A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period. There were no transfers between levels within fair value hierarchy during the three and nine months endedSeptember 30, 2016 and 2015. There are no financial instruments carried at fair value on a non-recurring basis as of September 30, 2016 and December 31, 2015.

The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximates their fair value. The fair value of borrowings under repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature, and are measured using Level II inputs.

The fair values of the Company's commercial mortgage loans and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2016 and December 31, 2015 (in thousands):

		Level	Carrying Amount		Fair Value
September 30, 2016
Commercial mortgage loans (1)	Asset	III	$	1,120,902	$	1,117,636
Collateralized loan obligation	Liability	II	287,505		289,680
December 31, 2015
Commercial mortgage loans(1)	Asset	III	1,125,089		1,138,841
Collateralized loan obligation	Liability	II	287,229		289,733

________________________

¹ The carrying value is gross of $1.6 million and $0.9 million of allowance for loan losses as of September 30, 2016 and December 31, 2015, respectively.

The fair value of the commercial mortgage loans is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company received broker quotes for each tranche of CLO to determine the fair value of the debt.

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Offsetting Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Offsetting [Abstract]

Offsetting Assets and Liabilities

Offsetting Assets and Liabilities

The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of September 30, 2016 and December 31, 2015, (in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Repurchase Agreements	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet		Financial Instruments as Collateral Pledged (*)		Cash Collateral Pledged		Net Amount
September 30, 2016
Commercial mortgage loans	$	241,868	$	—	$	241,868	$	399,544	$	5,000	$	—
Real estate securities	72,698		—		72,698		112,283		—		—
December 31, 2015
Commercial mortgage loans	206,239		—		206,239		355,802		5,000		—
Real estate securities	117,211		—		117,211		171,071		366		—

* Includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

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Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company conducts its business through the following segments:

• The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

• The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

The following table represents the Company's operations by segment for the three months endedSeptember 30, 2016 and 2015 (in thousands):

Three Months Ended September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Interest income	$	20,250	$	18,682	$	1,568
Interest expense	7,317		6,642		675
Net income	5,373		5,265		108
Three Months Ended September 30, 2015
Interest income	16,252		15,285		967
Interest expense	3,469		3,175		294
Net income	7,425		7,105		320

The following table represents the Company's operations by segment for the nine months endedSeptember 30, 2016 and 2015 (in thousands):

Nine Months Ended September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Interest income	$	60,763	$	55,973	$	4,790
Interest expense	17,478		15,443		2,035
Net income	23,653		22,775		878
Nine Months Ended September 30, 2015
Interest income	38,341		36,303		2,038
Interest expense	7,925		7,323		602
Net income	16,360		15,853		507

The following table represents the Company's total assets by segment as of September 30, 2016 and December 31, 2015 (in thousands):

As of September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Total Assets	$	1,249,412	$	1,191,562	$	57,850
As of December 31, 2015
Total Assets	1,282,484		1,150,858		131,626

For the purposes of the table above, any expenses not associated with a specific segment have been allocated to the business segments using a percentage derived by using the sum of commercial mortgage loans, net and real estate securities, at fair value as the denominator and commercial mortgage loans, net and real estate securities, at fair value as the numerators.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Repurchase Agreements

The Company entered into the JPM Amendment as of October 5, 2016, pursuant to which the limit on the JPM Repo Facility was increased from $150 million to $300 million with the payment of an extension fee. The proceeds were used to payoff the BarclaysRepo facility in its entirety. For additional information refer to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources.”

Indemnification Agreement

On October 27, 2016, the Company entered into an indemnification agreement (the “Indemnification Agreement”) with each of Buford Ortale, Jamie Handwerker, Richard Byrne, Jerome Baglien and Micah Goodman (each an “Indemnitee”) in connection with their respective appointment as a director and/or officer of the Company. The Indemnification Agreement provides that the Company will indemnify the Indemnitee, to the fullest extent permitted by Maryland law and the Company's charter and subject to the limitations set forth in the Indemnification Agreement, from and against all judgments, penalties, fines and amounts paid in settlement and expenses reasonably incurred by the Indemnitee that may result or arise in connection with the Indemnitee serving in his capacity as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at our request. The Indemnification Agreement further provides that, subject to the limitations set forth in the Indemnification Agreement, the Company will, without requiring a preliminary determination of the Indemnitee’s ultimate entitlement of indemnification under the Indemnification Agreement, advance all reasonable expenses to the Indemnitee incurred by or on behalf of the Indemnitee in connection with any proceeding the Indemnitee is or is threatened to be made a party to.

The Indemnification Agreement provides that the Indemnitee is entitled to indemnification unless it is established that (a) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that his conduct was unlawful. The Indemnification Agreement further limits the Indemnitee’s entitlement to indemnification in cases where (a) the proceeding was won by or in the right of the Company and the Indemnitee was adjudged to be liable to the Company, (b) the Indemnitee was adjudged to be liable on the basis that personal benefit was improperly received in any proceeding charging improper personal benefit to the Indemnitee or (c) the proceeding was brought by the Indemnitee, except in certain circumstances.

The Indemnification Agreement also provides that, except for a proceeding brought by the Indemnitee, the Company has the right to defend the Indemnitee in any proceeding which may give rise to indemnification under the Indemnification Agreement. The Indemnification Agreement grants the Indemnitee the right to separate counsel in certain proceedings involving separate defenses, counterclaims or other conflicts of interest and in proceedings in which the Company fail to assume the defense of the Indemnitee in a timely manner. The Indemnification Agreement further provides that the Company will use its reasonable best efforts to acquire directors and officers liability insurance covering the Indemnitee or any claim made against the Indemnitee by reason of his service to the Company.

The description of the Indemnification Agreement in this Quarterly Report on Form 10-Q is a summary and is qualified in its entirety by the terms of the form of Indemnification Agreement attached as Exhibit 10.4 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

Distributions Paid

On October 3, 2016, the Company paid a distribution of $5.3 million to stockholders of record during the month of September 2016. The Company paid $3.3 million of the distribution in cash, while $2.0 million was used to purchase 77,828 shares through the DRIP.

Determination of Net Asset Value per Share

On November 10, 2016, the Company’s board of directors unanimously determined an estimated NAV per share of the Company’s common stock of $20.05 as of September 30, 2016. The estimated NAV per share is based upon the estimated value of the Company’s assets less the Company’s liabilities as of September 30, 2016. Duff & Phelps, LLC, an independent third-party real estate advisory firm, performed appraisals of the Company’s investment portfolio. The Advisor calculated the estimated NAV per share based on the Duff & Phelps, LLC valuations and recommended to the board of directors the estimated NAV per share calculated by the Advisor. The valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013.

On November 10, 2016, the Company’s board of directors unanimously determined: (i) to change the purchase price for shares issued pursuant to the DRIP to equal the estimated NAV per share; and (ii) to change the repurchase price of shares under the SRP to equal, or be at a discount from, the estimated NAV per share. Accordingly, the Company (i) will offer shares pursuant to the DRIP at a purchase price of $20.05, beginning with October 2016 distributions which are reinvested in November 2016; and (ii) will repurchase shares pursuant to the SRP at a repurchase price of $20.05, subject to discounts in certain circumstances and subject to the terms and conditions of the SRP.

Convertible Shares

Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a Triggering Event had occurred and, based on the Company’s determination of the enterprise value of the Company on the date of the Triggering Event, the total distributions paid to the Company’s stockholders through the date of the Triggering Event, and the sum of the Company's stockholders’ invested capital as of the date of the Triggering Event, that the convertible shares converted into a number of common shares equal to zero. As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The accompanying consolidated financial statements and related footnotes are unaudited and have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2015, which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2016. There have been no significant changes to the Company's significant accounting policies during the three and nine months endedSeptember 30, 2016, as described below.

Principles of Consolidation

Principles of Consolidation

The Company consolidates all entities that the Company controls through either majority ownership or voting rights. In addition, the Company consolidates all variable interest entities ("VIE") of which the Company is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a VIE for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP.

The accompanying consolidated financial statements include the accounts of a collateralized loan obligation ("CLO") issued and securitized by a wholly owned subsidiary of the Company. The Company has determined the CLO is a VIE of which the Company's subsidiary is the primary beneficiary. The Company has disclosed the assets and liabilities of the CLO on the face of the consolidated balance sheet in accordance with ASC 810 - Consolidation.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is increased through the loan loss provision on the Company's consolidated statement of operations and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as cash in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes a general, formula-based component and an asset-specific component.

General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company currently estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced any losses, and takes into account current collateral and economic conditions affecting the probability and severity of losses when establishing the allowance for loan losses. The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist.

A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans.

The Company designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-performing and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged.

Per Share Data

Per Share Data

The Company calculates basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares issuable in connection with the restricted stock plan and if convertible shares were exercised, except when doing so would be anti-dilutive.

Reportable Segments

Reportable Segments

The Company conducts its business through the following segments:

• The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.

• The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are VIEs or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership and affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption was permitted, including adoption in an interim period. The Company elected to adopt this guidance effective January 1, 2016. The Company has evaluated the impact of the adoption of the new guidance on its consolidated financial statements and has determined the Company’s OP is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the Company's partnership interest is considered a majority voting interest in a business and the assets of the OP can be used for purposes other than settling its obligation, such as paying distributions. As such, the new guidance did not have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued an update that changes the accounting for certain aspects of share-based compensation. Among other things, the revised guidance allows companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the provisions of this guidance beginning January 1, 2016, electing to account for forfeitures when they occur, and determined that there is no impact to the Company’s consolidated financial position, results of operations and cash flows.

In March 2016, the FASB issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

In June 2016, the FASB issued guidance that changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance.

In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

• Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

• Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

• Level III - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.

CMBS are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all CMBS. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy.

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Commercial Mortgage Loans (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Summary of the company's loans receivable by class

The following table presents the activity in the Company's allowance for loan losses (in thousands):

	Nine Months Ended September 30, 2016		Nine Months Ended September 30, 2015
Beginning of period	$	888	$	570
Provision for loan losses	721		302
Charge-offs	—		—
Recoveries	—		—
Ending allowance for loan losses	$	1,609	$	872

The following table is a summary of the Company's commercial mortgage loan carrying values by class (in thousands):

	September 30, 2016		December 31, 2015
Senior loans	$	905,876	$	894,075
Mezzanine loans	205,026		221,014
Subordinated loans	10,000		10,000
Total gross carrying value of loans	1,120,902		1,125,089
Less: Allowance for loan losses	1,609		888
Total commercial mortgage loans, net	$	1,119,293	$	1,124,201

	September 30, 2016				December 31, 2015
Loan Type	Par Value		Percentage		Par Value		Percentage
Office	$	320,195	28.4	%	$	307,876	27.2	%
Multifamily	323,031		28.6	%	305,129		26.9	%
Hospitality	173,526		15.4	%	171,752		15.1	%
Retail	151,584		13.4	%	158,784		14.0	%
Mixed Use	107,531		9.5	%	138,798		12.2	%
Industrial	52,688		4.7	%	52,107		4.6	%
	$	1,128,555	100.0	%	$	1,134,446	100.0	%

Loans and Leases Receivable, Allowance for Loan Losses Policy

As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

Investment Rating	Summary Description
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

Real Estate Notes Receivable Rollforward

For the nine months endedSeptember 30, 2016 and September 30, 2015, the activity in the Company's loan portfolio was as follows (in thousands):

	Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Balance at Beginning of Year	$	1,124,201		$	456,884
Acquisitions and originations	42,236			526,919
Dispositions	—			—
Principal repayments	(48,127		)	(45,542		)
Discount accretion and premium amortization*	1,704			873
Provision for loan losses	(721		)	(302		)
Balance at End of Period	$	1,119,293		$	938,832

________________________

* Includes amortization of capitalized acquisition fees and expenses.

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Real Estate Securities (Tables)

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following is a summary of the Company's real estate securities, CMBS (in thousands):

		Weighted Average
	Number of Investments	Interest Rate		Maturity	Par Value		Fair Value
September 30, 2016	7	5.27	%	September 2019	$	60,000	$	57,639
December 31, 2015	16	4.71	%	February 2019	133,183		130,754

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2016 and December 31, 2015 (in thousands):

	Total		Level I		Level II		Level III
September 30, 2016
Real estate securities	$	57,639	$	—	$	57,639	$	—
December 31, 2015
Real estate securities	130,754		—		130,754		—

Available-for-Sale Securities

The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of September 30, 2016 and December 31, 2015 (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2016	$	59,858	$	—	$	(2,219	)	$	57,639
December 31, 2015	133,008		—		(2,254		)	130,754

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Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule of Master Repurchase Agreements

Below is a summary of the Company's MRAs as of September 30, 2016 and December 31, 2015 (in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (*)		Interest Rate		Days to Maturity
As of September 30, 2016
J.P. Morgan Securities LLC	$	65,295	$	65	$	102,663	2.38	%	14
Citigroup Global Markets, Inc.	3,878		1		4,807		1.88	%	26
Wells Fargo Securities, LLC	3,525		3		4,813		1.86	%	12
Total/Weighted Average	$	72,698	$	69	$	112,283	2.33	%	15
As of December 31, 2015
J.P. Morgan Securities LLC	$	86,898	$	108	$	130,618	2.03	%	8
Citigroup Global Markets, Inc.	26,619		71		35,528		2.00	%	45
Wells Fargo Securities, LLC	3,694		3		4,925		1.67	%	13
Total/Weighted Average	$	117,211	$	182	$	171,071	2.01	%	17

* Includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

Schedule of Long-term Debt Instruments

The following table represents the terms of the CLO issued.

Facility ($000s)	Par Value Issued		Par Value Outstanding (*)		Interest Rate	Maturity Date
As of September 30, 2016
Tranche A	$	231,345	$	231,345	1M LIBOR + 175	8/1/2030
Tranche B	42,841		42,841		1M LIBOR + 388	8/1/2030
Tranche C	76,044		20,000		1M LIBOR + 525	8/1/2030
	$	350,230	$	294,186
As of December 31, 2015
Tranche A	$	231,345	$	231,345	1M LIBOR + 175	8/1/2030
Tranche B	42,841		42,841		1M LIBOR + 388	8/1/2030
Tranche C	76,044		20,000		1M LIBOR + 525	8/1/2030
	$	350,230	$	294,186

________________________

* Excludes $56,044 and $56,044 of Tranche C of RFT issued CLO held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

Schedule of Variable Interest Entities

The below table reflects the total assets and liabilities of the Company's only CLO. The CLO is considered a VIE and is consolidated into the Company's consolidated financial statements as of September 30, 2016 and December 31, 2015 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLO because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

Assets ($000s)	September 30, 2016		December 31, 2015
Cash	$	5	$	5
Commercial mortgage loans, held for investment, net of allowance of $703 and $422 (1)	426,278		425,733
Accrued interest receivable	1,026		1,048
Total Assets	$	427,309	$	426,786
Liabilities
Notes payable (2)(3)	$	343,295	$	342,998
Interest payable	513		513
Total Liabilities	$	343,808	$	343,511

________________________

⁽¹⁾ The balance is presented net of allowance for loan loss of $703 and $422 as of September 30, 2016 and December 31, 2015, respectively. The commercial mortgage loans balance as of December 31, 2015 of $426,155 as disclosed in Note 5 to the consolidated financial statements included in the 2015 Form 10-K was not net of allowance for loan loss of $422.

⁽²⁾ Includes $55,790 and $55,769 of Tranche C of RFT issued CLO held by the Company, which eliminates within the Collateral loan obligations line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

⁽³⁾ The balance is presented net of deferred financing cost and discount of $6,935 and $7,232 as of September 30, 2016 and December 31, 2015, respectively. The notes payable balance as of December 31, 2015 of $348,269 as disclosed in Note 5 to the consolidated financial statements included in the 2015 Form 10-K was not net of deferred financing cost of $5,271.

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Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Summary of the Basic and Diluted Earnings Per Share

The following table is a summary of the basic and diluted net income per share computation for the three and nine months endedSeptember 30, 2016 and 2015, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Net income (in thousands)	$	5,373	$	7,425	$	23,653	$	16,360
Basic weighted average shares outstanding	31,516,876		26,684,913		31,622,796		22,035,227
Unvested restricted shares	7,035		6,051		6,274		4,883
Diluted weighted average shares outstanding	31,523,911		26,690,964		31,629,070		22,040,110
Basic net income per share	$	0.17	$	0.28	$	0.75	$	0.74
Diluted net income per share	$	0.17	$	0.28	$	0.75	$	0.74

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Common Stock (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Schedule of Share Repurchases

The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2016:

	Number of Requests	Number of Shares Repurchased(1)	Average Price per Share
Cumulative as of December 31, 2015	301	381,474	$	23.72
January 1 - March 31, 2016	—	—	—
April 1 - June 30, 2016	668	536,240	24.08
July 1 - September 30, 2016	4	3,542	25.27
Cumulative as of September 30, 2016	973	921,256	$	23.94

________________________

¹ As permitted under the SRP, in July 2016, our board of directors authorized, with respect to redemption requests received during the semi-annual period from January 1, 2016 to June 30, 2016, the repurchase of shares validly submitted for repurchase in an amount limited to the proceeds reinvested through our DRIP.  As a result, redemption requests in the amount of 208,470 shares were not fulfilled.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Unfunded Commitments Under Commercial Mortgage Loans

As of September 30, 2016 and December 31, 2015, the Company had the below unfunded commitments to the Company's borrowers.

Funding Expiration	September 30, 2016		December 31, 2015
2016	$	238	$	890
2017	7,957		16,072
2018	74,745		104,428
2019	10,039		16,939
2023	6,500		—
Total	$	99,479	$	138,329

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Related Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Schedule of Selling Commissions and Dealer Manager Fees Payable to Affiliate

The table below shows the compensation and reimbursement to the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager incurred for services relating to the Offering during the three and nine months ended months ended September 30, 2016 and 2015, respectively, and the associated payable as of September 30, 2016 and December 31, 2015, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2016		2015		2016		2015		September 30, 2016		December 31, 2015
Total commissions and fees incurred from the Former Dealer Manager	$	—	$	9,932	$	—	$	30,700	$	—	$	—
Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager	$	—	$	1,957	$	—	$	5,805	$	480	$	480

Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services

The table below depicts related party fees and reimbursements in connection with the operations of the Company for the three and nine months endedSeptember 30, 2016 and 2015 and the associated payable as of September 30, 2016 and December 31, 2015 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,				Payable as of
	2016			2015		2016		2015		September 30, 2016		December 31, 2015
Acquisition fees and expenses (1)	$	255		$	572	$	635	$	8,441	$	28	$	55
Administrative services expenses	2,480		—	—		3,835		—		1,500		—
Advisory and investment banking fee	—			14		6		42		—		—
Asset management and subordinated performance fee	1,066			2,405		7,091		3,741		758		3,792
Other related party expenses	6			—		56		—		32		—
Total related party fees and reimbursements	$	3,807		$	2,991	$	11,623	$	12,224	$	2,318	$	3,847

________________________

¹ Includes amortization of capitalized acquisition fees and expenses.

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following is a summary of the Company's real estate securities, CMBS (in thousands):

		Weighted Average
	Number of Investments	Interest Rate		Maturity	Par Value		Fair Value
September 30, 2016	7	5.27	%	September 2019	$	60,000	$	57,639
December 31, 2015	16	4.71	%	February 2019	133,183		130,754

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2016 and December 31, 2015 (in thousands):

	Total		Level I		Level II		Level III
September 30, 2016
Real estate securities	$	57,639	$	—	$	57,639	$	—
December 31, 2015
Real estate securities	130,754		—		130,754		—

Fair Value by Balance Sheet Grouping

The fair values of the Company's commercial mortgage loans and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2016 and December 31, 2015 (in thousands):

		Level	Carrying Amount		Fair Value
September 30, 2016
Commercial mortgage loans (1)	Asset	III	$	1,120,902	$	1,117,636
Collateralized loan obligation	Liability	II	287,505		289,680
December 31, 2015
Commercial mortgage loans(1)	Asset	III	1,125,089		1,138,841
Collateralized loan obligation	Liability	II	287,229		289,733

________________________

¹ The carrying value is gross of $1.6 million and $0.9 million of allowance for loan losses as of September 30, 2016 and December 31, 2015, respectively.

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Offsetting Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Offsetting [Abstract]

Offsetting Liabilities

The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of September 30, 2016 and December 31, 2015, (in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Repurchase Agreements	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet		Financial Instruments as Collateral Pledged (*)		Cash Collateral Pledged		Net Amount
September 30, 2016
Commercial mortgage loans	$	241,868	$	—	$	241,868	$	399,544	$	5,000	$	—
Real estate securities	72,698		—		72,698		112,283		—		—
December 31, 2015
Commercial mortgage loans	206,239		—		206,239		355,802		5,000		—
Real estate securities	117,211		—		117,211		171,071		366		—

* Includes $54,643 and $56,044 Tranche C of RFT issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively.

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following table represents the Company's operations by segment for the three months endedSeptember 30, 2016 and 2015 (in thousands):

Three Months Ended September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Interest income	$	20,250	$	18,682	$	1,568
Interest expense	7,317		6,642		675
Net income	5,373		5,265		108
Three Months Ended September 30, 2015
Interest income	16,252		15,285		967
Interest expense	3,469		3,175		294
Net income	7,425		7,105		320

The following table represents the Company's operations by segment for the nine months endedSeptember 30, 2016 and 2015 (in thousands):

Nine Months Ended September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Interest income	$	60,763	$	55,973	$	4,790
Interest expense	17,478		15,443		2,035
Net income	23,653		22,775		878
Nine Months Ended September 30, 2015
Interest income	38,341		36,303		2,038
Interest expense	7,925		7,323		602
Net income	16,360		15,853		507

The following table represents the Company's total assets by segment as of September 30, 2016 and December 31, 2015 (in thousands):

As of September 30, 2016	Total		Real Estate Debt		Real Estate Securities
Total Assets	$	1,249,412	$	1,191,562	$	57,850
As of December 31, 2015
Total Assets	1,282,484		1,150,858		131,626

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Organization and Business Operations (Details) - Benefit Street Partners LLC $ in Billions	Sep. 30, 2016 USD ($) professional
Related Party Transaction [Line Items]
Assets under management | $	$ 14
Number of professionals (professional) | professional	115
Number of professionals dedicated to the real estate platform (professional) | professional	34
Providence Equity Partners LLC
Related Party Transaction [Line Items]
Assets under management | $	$ 47

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Commercial Mortgage Loans - Loans Receivable by Class (Details) - USD ($) $ in Thousands		Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Receivables [Abstract]
Senior loans		$ 905,876	$ 894,075
Mezzanine loans		205,026	221,014
Subordinated loans		10,000	10,000
Total gross carrying value of loans		1,120,902	1,125,089
Less: Allowance for loan losses		1,609	888	$ 872	$ 570
Total commercial mortgage loans, net	[1]	$ 1,119,293	$ 1,124,201

[1] Includes $426,278 and $425,733 of loans net of allowance of $703 and $422 pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of September 30, 2016 and December 31, 2015, respectively.

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Commercial Mortgage Loans - Provision for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			$ 888	$ 570
Provision for loan losses	$ (113)	$ 78	721	302
Charge-offs			0	0
Recoveries			0	0
Ending balance	$ 1,609	$ 872	$ 1,609	$ 872

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Commercial Mortgage Loans - Narrative (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2016 rating loan	Dec. 31, 2015 rating loan
Receivables [Abstract]
Number of mezzanine loans funded (loan) | loan	73	77
Initial risk rating of loans	2.0
Weighted average risk rating of loans	2.1	2.0

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Commercial Mortgage Loans - Loans Receivable Portfolio (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 1,120,902	$ 1,125,089
First Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 1,128,555	$ 1,134,446
Loan type as a percent of total loans, percent	100.00%	100.00%
First Mortgage | Office
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 320,195	$ 307,876
Loan type as a percent of total loans, percent	28.40%	27.20%
First Mortgage | Multifamily
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 323,031	$ 305,129
Loan type as a percent of total loans, percent	28.60%	26.90%
First Mortgage | Hospitality
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 173,526	$ 171,752
Loan type as a percent of total loans, percent	15.40%	15.10%
First Mortgage | Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 151,584	$ 158,784
Loan type as a percent of total loans, percent	13.40%	14.00%
First Mortgage | Mixed Use
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 107,531	$ 138,798
Loan type as a percent of total loans, percent	9.50%	12.20%
First Mortgage | Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 52,688	$ 52,107
Loan type as a percent of total loans, percent	4.70%	4.60%

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Commercial Mortgage Loans - Real Estate Notes Receivable (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Movement in Mortgage Loans on Real Estate [Roll Forward]
Balance at Beginning of Year			$ 1,124,201	$ 456,884
Acquisitions and originations			42,236	526,919
Dispositions			0	0
Principal repayments			(48,127)	(45,542)
Discount accretion and premium amortization			1,704	873
Provision for loan losses	$ 113	$ (78)	(721)	(302)
Balance at End of Period	$ 1,119,293	$ 938,832	$ 1,119,293	$ 938,832

XML

Real Estate Securities - Fair Value Measurements, Recurring and Nonrecurring (Details) - Real estate securities $ in Thousands	Sep. 30, 2016 USD ($) investment	Dec. 31, 2015 USD ($) investment
Schedule of Available-for-sale Securities [Line Items]
Number of Investments | investment	7	16
Interest Rate	5.27%	4.71%
Par Value	$ 60,000	$ 133,183
Fair Value	$ 57,639	$ 130,754

XML

Real Estate Securities - Available-for-sale Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 57,639	$ 130,754
Real estate securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	59,858	133,008
Unrealized Gains	0	0
Unrealized Losses	(2,219)	(2,254)
Fair Value	$ 57,639	$ 130,754

XML

Real Estate Securities - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) investment	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) investment	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) investment
Schedule of Available-for-sale Securities [Line Items]
Realized loss on sale of real estate securities	$ 1,032	$ 0	$ 1,032	$ 0
Real estate securities
Schedule of Available-for-sale Securities [Line Items]
Number of Investments | investment	7		7		16
Aggregate carrying value	$ 59,858		$ 59,858		$ 133,008
Unrealized loss	$ 2,219		$ 2,219		$ 2,254
Number of investments in an unrealized loss position, 12 months or longer (investment) | investment	6		6
Unrealized loss for 12 months or longer			$ 700

XML

Debt - Narrative (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) $ / shares shares	Oct. 05, 2016 USD ($)	Oct. 19, 2015 USD ($) mortgage_asset $ / shares shares
Line of Credit Facility [Line Items]
Preferred stock, shares issued (in shares) | shares	0		0
Preferred stock, par value per share (in dollars per share) | $ / shares	$ 0.01		$ 0.01
U.S. Bank National Association
Line of Credit Facility [Line Items]
Preferred stock, shares issued (in shares) | shares					78,188,494
Preferred stock, par value per share (in dollars per share) | $ / shares					$ 0.001
Preferred stock liquidation preference (in dollars per share) | $ / shares					$ 1,000
U.S. Bank National Association | Secured Debt
Line of Credit Facility [Line Items]
Notes payable	$ 350,230,000		$ 350,230,000		$ 350,200,000
U.S. Bank National Association | Secured Debt | Class C Notes
Line of Credit Facility [Line Items]
Notes payable					$ 76,044,000
U.S. Bank National Association | Secured Debt | Collateralized Loan Obligations
Line of Credit Facility [Line Items]
Number of mortgage assets pledged as collateral (mortgage asset) | mortgage_asset					28
Principal balance of collateral					$ 428,400,000
U.S. Bank National Association | Secured Debt | Subsidiaries | Class C Notes
Line of Credit Facility [Line Items]
Notes payable					$ 56,000,000
London Interbank Offered Rate (LIBOR) | Secured Debt | Class C Notes
Line of Credit Facility [Line Items]
Variable interest rate	5.25%		5.25%
Minimum
Line of Credit Facility [Line Items]
MRA maturity term (days)	30 days
Maximum
Line of Credit Facility [Line Items]
MRA maturity term (days)	90 days
Revolving Credit Facility
Line of Credit Facility [Line Items]
Revolving line of credit	$ 72,698,000		$ 117,211,000
Revolving Credit Facility | JPM Repo Facility
Line of Credit Facility [Line Items]
Unsecured line of credit	$ 150,000,000
Extension on initial maturity date (years)	1 year
Revolving line of credit	$ 130,000,000		$ 84,300,000
Weighted average interest rate	2.80%		3.10%
Interest expense	$ 3,400,000	$ 4,200,000
Revolving Credit Facility | JPM Repo Facility | Minimum | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Variable interest rate	2.25%
Revolving Credit Facility | JPM Repo Facility | Maximum | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Variable interest rate	4.50%
Revolving Credit Facility | JPM Repo Facility | Subsequent Event
Line of Credit Facility [Line Items]
Unsecured line of credit				$ 300,000,000
Revolving Credit Facility | Barclays Repo Facility
Line of Credit Facility [Line Items]
Unsecured line of credit	$ 150,000,000
Revolving line of credit	$ 111,900,000		$ 121,900,000
Weighted average interest rate	3.10%		2.40%
Interest expense	$ 4,700,000	$ 3,100,000

XML

Debt - Schedule of Master Repurchase Agreements (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2016	Dec. 31, 2015
Assets Sold under Agreements to Repurchase [Line Items]
Accrued Interest	[1]	$ 1,705	$ 792
Real estate securities, available for sale, at fair value		57,639	130,754
Class C Notes | Secured Debt | U.S. Bank National Association
Assets Sold under Agreements to Repurchase [Line Items]
Real estate securities, available for sale, at fair value		54,643	56,044
Revolving Credit Facility
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding		72,698	117,211
Accrued Interest		69	182
Collateral Pledged		$ 112,283	$ 171,071
Interest Rate		2.33%	2.01%
Days to Maturity		15 days	17 days
Revolving Credit Facility | J.P. Morgan Securities LLC
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding		$ 65,295	$ 86,898
Accrued Interest		65	108
Collateral Pledged		$ 102,663	$ 130,618
Interest Rate		2.38%	2.03%
Days to Maturity		14 days	8 days
Revolving Credit Facility | Citigroup Global Markets, Inc.
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding		$ 3,878	$ 26,619
Accrued Interest		1	71
Collateral Pledged		$ 4,807	$ 35,528
Interest Rate		1.88%	2.00%
Days to Maturity		26 days	45 days
Revolving Credit Facility | Wells Fargo Securities, LLC
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding		$ 3,525	$ 3,694
Accrued Interest		3	3
Collateral Pledged		$ 4,813	$ 4,925
Interest Rate		1.86%	1.67%
Days to Maturity		12 days	13 days

[1] Includes $513 and $513 of interest payable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

XML

Debt - Schedule of CLO Issued (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Oct. 19, 2015
Debt Instrument [Line Items]
Fair Value	$ 57,639	$ 130,754
Collateralized loan obligations	$ 287,505	$ 287,229
Secured Debt | Tranche A | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	1.75%	1.75%
Secured Debt | Tranche B | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	3.88%	3.88%
Secured Debt | Tranche C | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	5.25%	5.25%
U.S. Bank National Association | Secured Debt
Debt Instrument [Line Items]
Par value issued	$ 350,230	$ 350,230	$ 350,200
Par value outstanding	294,186	294,186
U.S. Bank National Association | Secured Debt | Tranche A
Debt Instrument [Line Items]
Par value issued		231,345
Par value outstanding	231,345	231,345
U.S. Bank National Association | Secured Debt | Tranche B
Debt Instrument [Line Items]
Par value issued		42,841
Par value outstanding	42,841	42,841
U.S. Bank National Association | Secured Debt | Tranche C
Debt Instrument [Line Items]
Par value issued			$ 76,044
Par value outstanding	20,000	20,000
Fair Value	54,643	56,044
Collateralized loan obligations	$ 56,044	$ 56,044

XML

Debt - Assets and Liabilities of the Company's VIE (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2016	Dec. 31, 2015	Oct. 19, 2015	Sep. 30, 2015	Dec. 31, 2014
Variable Interest Entity [Line Items]
Cash		$ 60,873	$ 14,807		$ 13,504	$ 386
Commercial mortgage loans, held for investment, net of allowance of $703 and $422	[1]	1,119,293	1,124,201
Accrued interest receivable	[2]	5,316	5,360
Total assets		1,249,412	1,282,484
Accrued Interest	[3]	1,705	792
Total liabilities		614,134	628,155
Allowance for loan losses		1,609	888		$ 872	$ 570
Gross commercial mortgage loans		1,120,902	1,125,089
Collateralized loan obligation		287,505	287,229
U.S. Bank National Association | Secured Debt
Variable Interest Entity [Line Items]
Notes payable		350,230	350,230	$ 350,200
U.S. Bank National Association | Secured Debt | Class C Notes
Variable Interest Entity [Line Items]
Notes payable				$ 76,044
Collateralized loan obligation		56,044	56,044
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Cash		5	5
Commercial mortgage loans, held for investment, net of allowance of $703 and $422		426,278	425,733
Accrued interest receivable		1,026	1,048
Total assets		427,309	426,786
Notes payable		343,295	342,998
Accrued Interest		513	513
Total liabilities		343,808	343,511
Allowance for loan losses		703	422
Gross commercial mortgage loans			426,155
Deferred financing cost and discount		6,935	7,232
Variable Interest Entity, Primary Beneficiary | Notes Payable
Variable Interest Entity [Line Items]
Notes payable gross			348,269
Deferred financing cost			5,271
Variable Interest Entity, Primary Beneficiary | U.S. Bank National Association | Secured Debt | Class C Notes
Variable Interest Entity [Line Items]
Collateralized loan obligation		$ 55,790	$ 55,769

[1] Includes $426,278 and $425,733 of loans net of allowance of $703 and $422 pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of September 30, 2016 and December 31, 2015, respectively.

[2] Includes $1,026 and $1,048 of interest receivable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

[3] Includes $513 and $513 of interest payable for loans pledged as collateral on CLO, a VIE as of September 30, 2016 and December 31, 2015, respectively.

XML

Net Income Per Share - Summary of the Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net income	$ 5,373	$ 7,425	$ 23,653	$ 16,360
Basic weighted average shares outstanding (in shares)	31,516,876	26,684,913	31,622,796	22,035,227
Unvested restricted shares (in shares)	7,035	6,051	6,274	4,883
Diluted weighted average shares outstanding (in shares)	31,523,911	26,690,964	31,629,070	22,040,110
Basic net income per share (in dollars per share)	$ 0.17	$ 0.28	$ 0.75	$ 0.74
Diluted net income per share (in dollars per share)	$ 0.17	$ 0.28	$ 0.75	$ 0.74

XML

Common Stock - Narrative (Details) $ / shares in Units, $ in Millions				1 Months Ended			9 Months Ended		12 Months Ended
	Oct. 03, 2016 USD ($)	Feb. 28, 2016	Dec. 30, 2014 $ / shares shares	Nov. 14, 2016 shares	Mar. 31, 2016 $ / shares	May 31, 2013 $ / shares	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) shares
Class of Stock [Line Items]
Proceeds from issuance of common stock, DRIP | $							$ 755.5		$ 755.5
Convertible common stock quotient			0.15
Cumulative capital investment return, percentage of benchmark			6.00%
Minimum distribution percentage to qualify for REIT taxation status							90.00%
Distribution percentage required to avoid paying federal income taxes							100.00%
Common stock, dividends, per share per day, declared (in dollars per share) | $ / shares						$ 0.00565068493
Common stock, dividends, per share per year, declared (in dollars per share) | $ / shares					$ 2.0625	$ 2.0625
Common stock, dividends, per share per day, declared if it's a leap year (in dollars per share) | $ / shares					$ 0.0056352459
Total distributions | $							$ 49.1	$ 31.8
Cash distributions | $							30.0	18.2
Common stock distributions | $							$ 19.1	$ 13.6
NAV per share (in dollars per share) | $ / shares							$ 20.05
Maximum share repurchases per fiscal semester		2.50%
Maximum share repurchases per fiscal year		5.00%
Share Repurchase Program (SRP)
Class of Stock [Line Items]
NAV per share (in dollars per share) | $ / shares							$ 20.05
Share repurchase program, NAV multiplier year one		92.50%
Share repurchase program, NAV multiplier year two		95.00%
Share repurchase program, NAV multiplier year three		97.50%
Share repurchase program, NAV multiplier year four		100.00%
Subsequent Event
Class of Stock [Line Items]
Cash distributions | $	$ 3.3
Convertible Stock
Class of Stock [Line Items]
Shares outstanding (in shares) | shares							0		1,000
Issuance of convertible stock (in shares) | shares			1,000				(1,000)
Convertible Stock | Former Advisor
Class of Stock [Line Items]
Issuance of convertible stock (in shares) | shares			1,000
Convertible stock, per share value (in dollars per share) | $ / shares			$ 1.00
Common Stock | Subsequent Event
Class of Stock [Line Items]
Common shares converted (shares) | shares				0
Shares issued in connection with conversion (shares) | shares				0
Common Stock
Class of Stock [Line Items]
Shares outstanding (in shares) | shares							31,605,701		31,385,280

XML

Common Stock - Shares Repurchased During the Period (Details) - Share Repurchase Program (SRP) - Common Stock	3 Months Ended			6 Months Ended
	Sep. 30, 2016 repurchase_request share_repurchase_request $ / shares shares	Jun. 30, 2016 share_repurchase_request $ / shares shares	Mar. 31, 2016 share_repurchase_request $ / shares shares	Jun. 30, 2016 share_repurchase_request $ / shares shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, number of requests (share repurchase request) | share_repurchase_request			301	301
Number of requests during the period (share repurchase request)	4	668	0
Ending balance, number of requests (share repurchase request) | share_repurchase_request	973
Beginning balance, number of shares repurchased (shares)			381,474	381,474
Number of shares repurchased (shares)	3,542	536,240	0
Ending balance, number of shares repurchased (shares)	921,256
Beginning balance, average price per share (usd per share) | $ / shares			$ 23.72	$ 23.72
Repurchases, average price per share (usd per share) | $ / shares	$ 25.27	$ 24.08	$ 0.00
Ending balance, average price per share (usd per share) | $ / shares	$ 23.94
Unfulfilled redemption requests (shares)				208,470

XML

Commitments and Contingencies (Details) $ in Thousands	Oct. 20, 2016 USD ($)	Jun. 06, 2016 defendant	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Loan Origination Commitments
Unrecorded Unconditional Purchase Obligation [Line Items]
2016			$ 238	$ 890
2017			7,957	16,072
2018			74,745	104,428
2019			10,039	16,939
2023			6,500	0
Total unfunded commitments			$ 99,479	$ 138,329
Pending Litigation | Rurode v. Realty Finance Trust, Inc., et. al. | Subsequent Event
Unrecorded Unconditional Purchase Obligation [Line Items]
Plaintiff requested fees and expenses	$ 750
Director | Pending Litigation | Rurode v. Realty Finance Trust, Inc., et. al.
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of defendants (defendant) | defendant		2

XML

Related Party Transactions and Arrangements - Narrative (Details) - USD ($)			3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 29, 2016	Dec. 30, 2014	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Jun. 01, 2013
Related Party Transaction [Line Items]
Common stock, shares outstanding and owned by related party (in shares)			31,605,701			31,605,701		31,385,280
Selling commission, organizational and offering costs, maximum						2.00%
Organizational and offering costs, amount exceeding offering proceeds			$ 800,000			$ 800,000		$ 800,000
Asset management and subordinated performance fee			1,066,000	$ 2,405,000		7,091,000	$ 3,741,000
Prepaid expenses and other assets			763,000			763,000		$ 689,000
Acquisition related expenses and fees			255,000	1,777,000		$ 635,000	5,958,000
Convertible Stock
Related Party Transaction [Line Items]
Issuance of convertible stock (in shares)		1,000				(1,000)
Affiliate
Related Party Transaction [Line Items]
Related party expenses			3,807,000	2,991,000		$ 11,623,000	12,224,000
Affiliate | New Advisor
Related Party Transaction [Line Items]
Real estate acquisition fee, percentage	1.00%
Amount of purchase price to terminate Company's obligation to pay acquisition fees to the Advisor	$ 600,000,000
Maximum percent of principal amount funded given as acquisition fees and expenses	4.50%
Monthly asset management fee as a percent of stockholders' equity	1.50%
Subordinated performance fee, total return threshold	6.00%
Subordinated participation in asset sale fee	15.00%
Subordinated participation in asset sale fee maximum	10.00%
Affiliate | New Advisor | Fee to Acquire and Originate Real Estate Debt
Related Party Transaction [Line Items]
Transaction rate	0.50%
Affiliate | New Advisor | Asset Management Fee
Related Party Transaction [Line Items]
Due to related party			$ 26,400			$ 26,400
Affiliate | AR Global
Related Party Transaction [Line Items]
Common stock, shares outstanding and owned by related party (in shares)			52,771			52,771		8,888
Affiliate | Former Advisor | Asset Management Fee
Related Party Transaction [Line Items]
Related party expenses			$ 2,300,000	1,900,000		$ 7,100,000	2,400,000
Affiliate | Former Advisor | Administrative Services and Other
Related Party Transaction [Line Items]
Related party expenses				0			0
Dealer Manager
Related Party Transaction [Line Items]
Selling commission, percentage of offering proceeds			7.00%			7.00%
Selling commission, percentage of offering proceeds, reallowance fee			3.00%			3.00%
Related party expenses			$ 0	9,932,000		$ 0	30,700,000
Prepaid expenses and other assets			$ 0			$ 0		$ 6,000	$ 900,000
Former Advisor
Related Party Transaction [Line Items]
Real estate acquisition fee, percentage			1.00%			1.00%
Subordinated performance fee, total return threshold			6.00%			6.00%
Subordinated participation in asset sale fee			15.00%			15.00%
Subordinated participation in asset sale fee maximum			10.00%			10.00%
Annual asset management fee, percentage based on the lower of total costs of assets or net asset value			0.75%			0.75%
Asset management and subordinated performance fee			$ 0	600,000	$ 1,300,000	$ 0	1,400,000
Administrative services reimbursement, limitation, percentage of average invested assets			2.00%			2.00%
Administrative services reimbursement, limitation, percentage of net income			25.00%			25.00%
Former Advisor | Convertible Stock
Related Party Transaction [Line Items]
Issuance of convertible stock (in shares)		1,000
Convertible stock, per share value (in dollars per share)		$ 1.00
Former Advisor | Waived
Related Party Transaction [Line Items]
Acquisition related expenses and fees			$ 0	100,000		$ 0	500,000
Former Advisor | Acquisition fees and acquisition expenses | Incurred
Related Party Transaction [Line Items]
Related party expenses			300,000	1,800,000		$ 600,000	6,000,000
Former Advisor | Acquisition fees and acquisition expenses | Payable
Related Party Transaction [Line Items]
Related party expenses				500,000			2,200,000
Former Advisor | Fee to Acquire and Originate Real Estate Debt
Related Party Transaction [Line Items]
Transaction rate						0.50%
Former Advisor | Administrative Service and Personnel Cost Reimbursements
Related Party Transaction [Line Items]
Related party expenses			$ 2,500,000	$ 0		$ 3,800,000	$ 0

XML

Related Party Transactions and Arrangements - Schedule of Selling Commissions and Dealer Manager Fees Payable to Affiliate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Payable to related party	$ 2,798		$ 2,798		$ 4,327
Dealer Manager
Related Party Transaction [Line Items]
Related party expenses	0	$ 9,932	0	$ 30,700
Payable to related party	0		0		0
Advisor and Dealer Manager | Fees and Expense Reimbursement, Stock Offering
Related Party Transaction [Line Items]
Related party expenses	0	$ 1,957	0	$ 5,805
Payable to related party	$ 480		$ 480		$ 480

XML

Related Party Transactions and Arrangements - Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Payable to related party	$ 2,798		$ 2,798		$ 4,327
Affiliate
Related Party Transaction [Line Items]
Related party expenses	3,807	$ 2,991	11,623	$ 12,224
Payable to related party	2,318		2,318		3,847
Affiliate | Nonrecurring Fees | Acquisition fees and expenses
Related Party Transaction [Line Items]
Related party expenses	255	572	635	8,441
Payable to related party	28		28		55
Affiliate | Nonrecurring Fees | Administrative services expenses
Related Party Transaction [Line Items]
Related party expenses	2,480	0	3,835	0
Payable to related party	1,500		1,500		0
Affiliate | Nonrecurring Fees | Advisory and investment banking fee
Related Party Transaction [Line Items]
Related party expenses	0	14	6	42
Payable to related party	0		0		0
Affiliate | Nonrecurring Fees | Asset management and subordinated performance fee
Related Party Transaction [Line Items]
Related party expenses	1,066	2,405	7,091	3,741
Payable to related party	758		758		3,792
Affiliate | Nonrecurring Fees | Other related party expenses
Related Party Transaction [Line Items]
Related party expenses	6	$ 0	56	$ 0
Payable to related party	$ 32		$ 32		$ 0

XML

Fair Value of Financial Instruments - Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 57,639	$ 130,754
Real estate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	57,639	130,754
Fair Value, Measurements, Recurring | Real estate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	57,639	130,754
Fair Value, Measurements, Recurring | Real estate securities | Level I
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Fair Value, Measurements, Recurring | Real estate securities | Level II
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	57,639	130,754
Fair Value, Measurements, Recurring | Real estate securities | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 0	$ 0

XML

Fair Value of Financial Instruments - Fair Value by Balance Sheet Grouping (Details) - USD ($) $ in Thousands		Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial mortgage loans	[1]	$ 1,119,293	$ 1,124,201
Collateralized loan obligation		287,505	287,229
Allowance for loan losses		1,609	888	$ 872	$ 570
Carrying Amount | Level III
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial mortgage loans		1,120,902	1,125,089
Allowance for loan losses		1,600	900
Carrying Amount | Level II
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateralized loan obligation		287,505	287,229
Fair Value | Level III
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial mortgage loans		1,117,636	1,138,841
Fair Value | Level II
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateralized loan obligation		$ 289,680	$ 289,733

[1] Includes $426,278 and $425,733 of loans net of allowance of $703 and $422 pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of September 30, 2016 and December 31, 2015, respectively.

XML

Offsetting Assets and Liabilities - Offsetting Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Offsetting Liabilities [Line Items]
Real estate securities, available for sale, at fair value	$ 57,639	$ 130,754
U.S. Bank National Association | Class C Notes | Secured Debt
Offsetting Liabilities [Line Items]
Real estate securities, available for sale, at fair value	54,643	56,044
Commercial mortgage loans
Offsetting Liabilities [Line Items]
Gross Amounts of Recognized Liabilities	241,868	206,239
Gross Amounts Offset on the Balance Sheet	0	0
Net Amount of Liabilities Presented on the Balance Sheet	241,868	206,239
Financial Instruments as Collateral Pledged ()	399,544	355,802
Cash Collateral Pledged	5,000	5,000
Net Amount	0	0
Real Estate Securities
Offsetting Liabilities [Line Items]
Gross Amounts of Recognized Liabilities	72,698	117,211
Gross Amounts Offset on the Balance Sheet	0	0
Net Amount of Liabilities Presented on the Balance Sheet	72,698	117,211
Financial Instruments as Collateral Pledged ()	112,283	171,071
Cash Collateral Pledged	0	366
Net Amount	0	0
Real Estate Securities | U.S. Bank National Association | Class C Notes | Secured Debt
Offsetting Liabilities [Line Items]
Real estate securities, available for sale, at fair value	$ 54,643	$ 56,044

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Segment Reporting - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Interest income	$ 20,250	$ 16,252	$ 60,763	$ 38,341
Interest expense	7,317	3,469	17,478	7,925
Net income	5,373	7,425	23,653	16,360
Total assets	1,249,412		1,249,412		$ 1,282,484
Real Estate Debt
Segment Reporting Information [Line Items]
Interest income	18,682	15,285	55,973	36,303
Interest expense	6,642	3,175	15,443	7,323
Net income	5,265	7,105	22,775	15,853
Total assets	1,191,562		1,191,562		1,150,858
Real Estate Securities
Segment Reporting Information [Line Items]
Interest income	1,568	967	4,790	2,038
Interest expense	675	294	2,035	602
Net income	108	$ 320	878	$ 507
Total assets	$ 57,850		$ 57,850		$ 131,626

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Subsequent Events - Narrative (Details) - USD ($)		1 Months Ended	9 Months Ended
	Oct. 03, 2016	Nov. 14, 2016	Sep. 30, 2016	Sep. 30, 2015	Oct. 05, 2016
Subsequent Event [Line Items]
Distributions paid			$ 29,952,000	$ 18,215,000
Dividends in cash			30,000,000	$ 18,200,000
Common stock issued through distribution reinvestment plan			$ 19,099,000
NAV per share (in dollars per share)			$ 20.05
Subsequent Event
Subsequent Event [Line Items]
Distributions paid	$ 5,300,000
Dividends in cash	3,300,000
Common stock issued through distribution reinvestment plan	$ 2,000,000
Shares issued under DRIP (in shares)	77,828
Subsequent Event | Common Stock
Subsequent Event [Line Items]
Common shares converted (shares)		0
Shares issued in connection with conversion (shares)		0
Share Repurchase Program (SRP)
Subsequent Event [Line Items]
NAV per share (in dollars per share)			$ 20.05
Revolving Credit Facility | JPM Repo Facility
Subsequent Event [Line Items]
Unsecured line of credit			$ 150,000,000
Revolving Credit Facility | JPM Repo Facility | Subsequent Event
Subsequent Event [Line Items]
Unsecured line of credit					$ 300,000,000