Document

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 March 31, 2017



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

Commission file number: 000-55188

BENEFIT STREET PARTNERS REALTY 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, Suite #4920 New York, New York		10019
(Address of Principal Executive Office)		(Zip Code)

(212) 588-6770

(Registrant’s Telephone Number, Including Area Code)

(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, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (check one):



Large accelerated filer o	Accelerated filer o
Non-accelerated filer (Do not check if a smaller reporting company) o	Smaller reporting company x
	Emerging growth filer o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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 April 30, 2017 was 31,759,537.

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	23
Item 3. Quantitative and Qualitative Disclosures about Market Risk	37
Item 4. Controls and Procedures	37
PART II
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39
Signatures	40

Table of Contents

PART I

Item 1. Consolidated Financial Statements.

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

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



	March 31, 2017			December 31, 2016
ASSETS	(Unaudited)
Cash and cash equivalents	$	148,372		$	118,048
Restricted cash	5,107			5,021
Commercial mortgage loans, held for investment, net of allowance of $2,793 and $2,181 ⁽¹⁾	1,008,864			1,046,556
Commercial mortgage loans, held-for-sale, measured at fair value	53,305			21,179
Real estate securities, available for sale, at fair value	25,733			49,049
Receivable for loan repayment	6,401			401
Accrued interest receivable ⁽²⁾	5,805			5,955
Prepaid expenses and other assets	1,691			1,916
Total assets	$	1,255,278		$	1,248,125
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations	$	229,088		$	278,450
Repurchase agreements - commercial mortgage loans	340,948			257,664
Repurchase agreements - real estate securities	52,174			66,639
Interest payable ⁽³⁾	997			897
Distributions payable	5,562			5,591
Accounts payable and accrued expenses	1,461			1,170
Due to affiliates	3,741			4,064
Total liabilities	$	633,971		$	614,475
Commitment and Contingencies (See Note 8)
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of March 31, 2017 and December 31, 2016	—			—
Common stock, $0.01 par value, 949,999,000 shares authorized, 31,673,924 and 31,884,631 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	317			319
Additional paid-in capital	700,792			704,500
Accumulated other comprehensive income (loss)	888			(500		)
Accumulated deficit	(80,690		)	(70,669		)
Total stockholders' equity	621,307			633,650
Total liabilities and stockholders' equity	$	1,255,278		$	1,248,125


⁽¹⁾	Includes $367.8 million and $417.1 million of loans net of allowance of $1.2 million and $1.0 million pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of March 31, 2017 and December 31, 2016, respectively.


⁽²⁾	Includes $1.0 million and $1.1 million of interest receivable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively.


⁽³⁾	Includes $0.5 million and $0.6 million of interest payable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively.

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

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)



	Three Months Ended March 31,
	2017		2016
Interest Income:
Interest income	$	18,879	$	20,291
Less: Interest expense	5,428		4,768
Net interest income	13,451		15,523
Operating Expenses:
Asset management and subordinated performance fee	2,312		3,010
Acquisition fees and acquisition expenses	624		157
Administrative services expenses	855		816
Professional fees	767		1,261
Other expenses	606		694
Total Operating Expenses	5,164		5,938

Loan loss provision	612		165
Realized loss on loans held for sale	247		—
Realized loss on sale of real estate securities	29		—
Unrealized losses on loans held-for-sale	1,350		—
Net income	$	6,049	$	9,420

Basic net income per share	$	0.19	$	0.30
Diluted net income per share	$	0.19	$	0.30
Basic weighted average shares outstanding	31,740,256		31,548,897
Diluted weighted average shares outstanding	31,750,045		31,555,011

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

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)



	Three Months Ended March 31,
	2017		2016
Net income	$	6,049	$	9,420
Unrealized gain/(loss) on available-for-sale securities	1,388		(4,964		)
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc.	$	7,437	$	4,456

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

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except for share data)

(Unaudited)



	Common Stock
	Number of Shares		Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total Stockholders' Equity
Balance, December 31, 2016	31,884,631		$	319		$	704,500		$	(500	)	$	(70,669	)	$	633,650
Common stock repurchases	(496,678	)	(5		)	(9,454		)	—			—			(9,459		)
Common stock issued through distribution reinvestment plan	285,971		3			5,731			—			—			5,734
Share-based compensation	—		—			15			—			—			15
Net income	—		—			—			—			6,049			6,049
Distributions declared	—		—			—			—			(16,070		)	(16,070		)
Other comprehensive income	—		—			—			1,388			—			1,388
Balance, March 31, 2017	31,673,924		$	317		$	700,792		$	888		$	(80,690	)	$	621,307

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

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Three Months Ended March 31,
	2017			2016
Cash flows from operating activities:
Net income	$	6,049		$	9,420
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization and (discount accretion), net	(634		)	(575		)
Accretion of deferred commitment fees	(538		)	(382		)
Amortization of deferred financing costs	694			541
Share-based compensation	15			9
Change in unrealized losses on loans held for sale	1,597			—
Change in unrealized losses on real estate securities	29			—
Loan loss provision	612			165
Changes in assets and liabilities:
Accrued interest receivable	688			582
Prepaid expenses and other assets	(41		)	(35		)
Accounts payable and accrued expenses	291			155
Due to affiliates	(323		)	76
Interest payable	100			132
Net cash provided by operating activities	$	8,539		$	10,088
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans	$	(93,884	)	$	(9,697	)
Proceeds from sale of real estate securities	24,681			—
Proceeds from sale of commercial mortgage loans	11,790			—
Principal repayments received on commercial mortgage loans	80,079			9,253
Principal repayments received on real estate securities	—			928
Net cash provided by investing activities	$	22,666		$	484
Cash flows from financing activities:
Common stock repurchases	$	(9,459	)	$	(6,003	)
Repayments of collateralized loan obligations	(49,456		)	—
Borrowings on repurchase agreements - commercial mortgage loans	89,085			85,614
Repayments of repurchase agreements - commercial mortgage loans	(5,801		)	(48,270		)
Borrowings on repurchase agreements - real estate securities	196,503			319,001
Repayments of repurchase agreements - real estate securities	(210,968		)	(315,763		)
Increase in restricted cash related to financing activities	(86		)	(1,132		)
Payments of deferred financing costs	(334		)	—
Distributions paid	(10,365		)	(9,619		)
Net cash (used in) provided by financing activities	$	(881	)	$	23,828
Net change in cash and cash equivalents	$	30,324		$	34,400
Cash and cash equivalents, beginning of period	118,048			14,807
Cash and cash equivalents, end of period	$	148,372		$	49,207

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

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands)

(Unaudited)



	Three Months Ended March 31,
	2017		2016
Supplemental disclosures of cash flow information:
Interest paid	$	4,634	$	4,095
Supplemental disclosures of non-cash flow information:
Distributions payable	$	5,562	$	5,530
Common stock issued through distribution reinvestment plan	5,734		6,582
Loans transferred to commercial real estate loans, held-for-sale, transferred at fair value	45,513		—

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

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

Note 1 - Organization and Business Operations

Benefit Street Partners Realty Trust, Inc. (the "Company"), formerly known as Realty Finance Trust, Inc., is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt secured by properties located both within and outside of the United States. The Company was incorporated in Maryland on November 15, 2012. The Company made a tax election to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. The Company believes that it has qualified as a REIT and intends to continue to meet the requirements for qualification and taxation as a REIT. On May 14, 2013, the Company commenced business operations after raising in excess of $2.0 million of equity, the amount required for the Company to release equity proceeds from escrow. Substantially all of the Company's business is conducted through Benefit Street Partners Realty 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.

The Company has no direct employees. 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. Established in 2008, the Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor is in partnership with Providence Equity Partners L.L.C., a global private equity firm. The Advisor manages 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. Prior to September 29, 2016, Realty Finance Advisor, LLC ("Former Advisor") was the Company's advisor. The Former Advisor was controlled by AR Global Investments, LLC ("AR Global").

The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also invests in commercial real estate securities. 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").

Realty Capital Securities, LLC, (the “Former Dealer Manager”) served as the dealer manager of the Offering. The Former Advisor and Former Dealer Manager are under common control with AR Global, the parent of American Realty Capital VIII, LLC (the "Former Sponsor"). As a result they are related parties and each of them received compensation and fees for services related to the Offering, 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, 2016, which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 29, 2017. There have been no significant changes to the Company's significant accounting policies during the three months ended March 31, 2017, as described below.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

Principles of Consolidation

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 Company consolidates all entities that the Company controls through either majority ownership or voting rights. In addition, the Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are 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 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 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 assets and liabilities of the CLO are consolidated in the accompanying consolidated balance sheet in accordance with ASC 810 - Consolidation.

Acquisition Fees and Acquisition Expenses

The Company incurs acquisition fees and acquisition expenses payable to the Advisor. The Company pays the Advisor an acquisition fee based on the principal amount funded by the Company to originate or acquire commercial mortgage loan investments or on the anticipated net equity funded by the Company to acquire real estate securities. Acquisition fees and acquisition expenses paid to the Company's Advisor in connection with the origination and acquisition of commercial mortgage loan investments and acquisition of real estate securities are evaluated based on the nature of the expense to determine if they should be expensed in the period incurred or capitalized and amortized over the life of the investment. The Company capitalizes certain direct costs relating to the loan origination activities and the cost is amortized over the life of the loan. 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.

Commercial Mortgage Loans

Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses. Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Guaranteed loan exit fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method. The accretion of guaranteed loan exit fees is recognized in interest income in the Company's consolidated statements of operation.

Commercial loans that are intended to be sold in the foreseeable future are reported as held-for-sale and are transferred at fair value and recorded at the lower of cost or fair value with changes recorded through the statement of operations. Unamortized loan origination costs for commercial loans held-for-sale are capitalized as part of the carrying value of the loans and recognized upon the sale of such loans. Amortization of origination costs ceases upon transfer of commercial loans to held-for-sale.

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

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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 March 2016, the Financial Accounting Standards Board ("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

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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. The Company adopted this revised guidance this reporting period which did not have any effect on the Company’s consolidated financial statements.

In November 2016, the FASB issued guidance on the classification of restricted cash in the statement of cash flows. The amendment requires restricted cash to be included in the beginning-of-period and end-of-period total cash amounts. Therefore, transfers between cash and restricted cash will no longer be shown on the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. We do not expect this guidance to have a material impact on the Company’s consolidated financial statements.

Note 3 - Commercial Mortgage Loans

The following table is a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (in thousands):



	March 31, 2017		December 31, 2016
Senior loans	$	918,323	$	901,907
Mezzanine loans	93,334		136,830
Subordinated loans	—		10,000
Total gross carrying value of loans	1,011,657		1,048,737
Less: Allowance for loan losses	2,793		2,181
Total commercial mortgage loans, held for investment, net	$	1,008,864	$	1,046,556

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



	Three Months Ended March 31, 2017		Three Months Ended March 31, 2016
Beginning of period	$	2,181	$	888
Provision for loan losses	612		165
Charge-offs	—		—
Recoveries	—		—
Ending allowance for loan losses	$	2,793	$	1,053

As of March 31, 2017 and December 31, 2016, the Company's total commercial mortgage loan portfolio, including loans held-for-sale, comprised of 67 and 71 loans, respectively.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)



	March 31, 2017				December 31, 2016
Loan Type	Par Value		Percentage		Par Value		Percentage
Office	$	361,289	33.7	%	$	340,944	31.6	%
Multifamily	291,020		27.1	%	329,203		30.6	%
Hospitality	125,291		11.7	%	143,582		13.3	%
Retail	197,668		18.4	%	154,684		14.4	%
Mixed Use	45,235		4.2	%	56,136		5.2	%
Industrial	52,797		4.9	%	52,688		4.9	%
	$	1,073,300	100.0	%	$	1,077,237	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 rated on a 5-point scale 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 March 31, 2017 and December 31, 2016, the weighted average risk rating of loans was 2.2 and 2.1, respectively. As of March 31, 2017 and December 31, 2016, the Company did not have any loans that were past due on their payments, in non-accrual status or impaired.

For the three months ended March 31, 2017 and March 31, 2016, the activity in the Company's loan portfolio was as follows (in thousands):



	Three Months Ended March 31, 2017			Three Months Ended March 31, 2016
Balance at Beginning of Year	$	1,046,556		$	1,124,201
Acquisitions and originations	93,140			9,697
Dispositions	—			—
Principal repayments	(86,079		)	(7,949		)
Discount accretion and premium amortization*	628			566
Loans transferred to commercial real estate loans, held-for-sale, at fair value	(45,513		)	—
Fees capitalized into carrying value of loans	744			—
Provision for loan losses	(612		)	(165		)
Balance at End of Period	$	1,008,864		$	1,126,350

________________________

* Includes amortization of capitalized acquisition fees and expenses.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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
March 31, 2017	2	7.9	%	May 2022	$	25,000	$	25,733
December 31, 2016	6	5.8	%	February 2020	50,000		49,049

The Company classified its CMBS as available-for-sale as of March 31, 2017 and December 31, 2016. 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 March 31, 2017 and December 31, 2016 (in thousands):



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
March 31, 2017	$	24,845	$	888	$	—		$	25,733
December 31, 2016	49,548		—		(499		)	49,049

As of March 31, 2017, the Company held 2 CMBS positions for an aggregate carrying value of $24.8 million, with an unrealized gain of $0.9 million. As of December 31, 2016, the Company held 6 CMBS positions with an amortized cost of $49.5 million, with an unrealized loss of $0.5 million, of which 2 positions had a total unrealized loss of $0.2 million for a period greater than 12 months.

The Company has recognized a loss of $28,281 for the three months ended March 31, 2017, 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 months ended March 31, 2016.

Note 5 - Debt

Repurchase Agreements - Commercial Mortgage Loans

The Company entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility") and Goldman Sachs Bank USA (the "GS Repo Facility"). The JPM Repo Facility matures on June 17, 2017 and, as amended on October 5, 2016, provides up to $300.0 million in advances. The GS Repo Facility matures on December 27, 2018, with a one-year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions, and provides up to $250.0 million in advances. Both the JPM Repo Facility and GS Repo Facility are subject to various adjustments. 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 of between 2.25% to 4.50%, depending on the attributes of the purchased assets. Borrowings under the GS Repo Facility accrue interest at per annum rates equal to the sum of (i) a spread over LIBOR of between 2.35% to 2.85%, depending on the attributes of the purchased asset, and (ii) 0.50%. The Company expects to use advances from the JPM Repo Facility and the GS Repo Facility to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

As of March 31, 2017 and December 31, 2016, the Company had $251.9 million and $257.7 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 4.50%, depending on the attributes of the purchased assets. As of March 31, 2017 and December 31, 2016, the weighted average interest rate on advances was 3.29% and 3.08%, respectively. The Company incurred $2.6 million and $0.8 million in interest expense on the JPM Repo Facility for the three months ended March 31, 2017 and 2016, respectively, including amortization of deferred financing cost.

As of March 31, 2017, the Company had $89.1 million outstanding under the GS Repo Facility. Advances under the GS Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.35% to 2.85%, depending on the attributes of the purchased assets. As of March 31, 2017, the weighted average interest rate on advances was 3.38%. The Company incurred $0.3 million of interest expense on the GS Repo Facility for the three months ended March 31, 2017, including amortization of deferred financing cost. The Company had no advances under the GS Repo Facility as of December 31, 2016.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

The JPM Repo Facility and the GS 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. As of March 31, 2017 and December 31, 2016, the Company is in compliance with all debt covenants.

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 March 31, 2017 and December 31, 2016 (in thousands):



							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (*)		Interest Rate		Days to Maturity
As of March 31, 2017
J.P. Morgan Securities LLC	$	52,174	$	119	$	80,376	3.10	%	90
Total/Weighted Average	$	52,174	$	119	$	80,376	3.10	%	90

As of December 31, 2016
J.P. Morgan Securities LLC	$	59,122	$	96	$	92,658	2.55	%	6
Citigroup Global Markets, Inc.	3,879		1		4,850		2.11	%	26
Wells Fargo Securities, LLC	3,638		4		4,850		2.05	%	13
Total/Weighted Average	$	66,639	$	101	$	102,358	2.50	%	8

* Includes $54.6 and $53.3 Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, 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.

As of March 31, 2017 and December 31, 2016, the Notes are collateralized by interests in a pool of 22 and 27 mortgage assets having a total principal balance of $369.8 million and $419.3 million, respectively, (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.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)



Facility ($000s)	Par Value Issued		Par Value Outstanding ^(*)		Interest Rate	Maturity Date
As of March 31, 2017
Tranche A	$	231,345	$	172,739	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	$	235,580

As of December 31, 2016
Tranche A	$	231,345	$	222,195	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	$	285,036

________________________

* Excludes $56.0 million and $56.0 million of Tranche C of Company issued CLO held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016 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)	March 31, 2017		December 31, 2016
Cash	$	5	$	5
Commercial mortgage loans, held for investment, net of allowance of $1,160 and $1,017 ⁽¹⁾	367,810		417,057
Accrued interest receivable	1,006		1,101
Total Assets	$	368,821	$	418,163

Liabilities
Notes payable ⁽²⁾⁽³⁾	$	284,890	$	334,246
Interest payable	535		564
Total Liabilities	$	285,425	$	334,810

________________________

⁽¹⁾ The balance is presented net of allowance for loan loss of $1.2 million and $1.0 million as of March 31, 2017 and December 31, 2016, respectively.

⁽²⁾ Includes $55.8 million and $55.8 million of Tranche C of Company issued CLO held by the Company, which eliminates within the Collateral loan obligations line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively.

⁽³⁾ The balance is presented net of deferred financing cost and discount of $6.7 million and $6.8 million as of March 31, 2017 and December 31, 2016, respectively.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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 months ended March 31, 2017 and 2016, respectively:



	Three Months Ended March 31,
	2017		2016
Net income (in thousands)	$	6,049	$	9,420
Basic weighted average shares outstanding	31,740,256		31,548,897
Unvested restricted shares	9,789		6,114
Diluted weighted average shares outstanding	31,750,045		31,555,011
Basic net income per share	$	0.19	$	0.30
Diluted net income per share	$	0.19	$	0.30

Note 7 - Common Stock

As of March 31, 2017 and December 31, 2016, the Company had 31,673,924 and 31,884,631 shares of common stock outstanding, respectively, including shares issued pursuant to the Dividend Reinvestment Plan ("DRIP") and unvested restricted shares.

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 converted to shares of common stock upon the first occurrence of certain triggering events, including the termination of the Advisory Agreement with the Former Advisor and the Company, with payouts dependent on the achievement of certain stockholder total return thresholds. 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. 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 and the par value of the shares was transferred to Additional Paid In Capital upon extinguishment.

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 U.S. federal income taxes.

On May 13, 2013, the Company's board of directors authorized and declared a distribution calculated daily at a rate of $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 equivalent to $2.0625 per annum for calendar year 2016. 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 was applied to the reinvestment of distributions commencing with the October 2016 distributions. On March 28, 2017, the Company's board of directors authorized and declared a distribution calculated daily at a rate of $0.00565068493 per day, which is equivalent to $2.0625 per annum, per share of common stock. 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 $16.1 million during the three months ended March 31, 2017, comprised of $10.4 million in cash and $5.7 million in shares of common stock issued under the DRIP. The Company distributed $16.2 million during the three months ended March 31, 2016.

Share Repurchase Program

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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 March 31, 2017:



	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2016	985	918,683	$	23.94
January 1 - March 31, 2017	502	496,678	19.04
Cumulative as of March 31, 2017	1,487	1,415,361	$	22.22

Note 8 - Commitments and Contingencies

Unfunded Commitments for Commercial Mortgage Loans

As of March 31, 2017 and December 31, 2016, the Company had the below unfunded commitments to the Company's borrowers.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)



Funding Expiration	March 31, 2017		December 31, 2016
2016	$	—	$	—
2017	7,367		7,794
2018	52,014		62,368
2019	13,954		9,072
2023	—		—
Total	$	73,335	$	79,234

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. On November 14, 2016, the defendants filed a memorandum of law in opposition to that fee request. No hearing date has been set on plaintiff’s request for fees.

The Company did not record any accrual in the March 31, 2017 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. The Company estimates the range of possible loss to be between $0 and $750,000.

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 funding 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 prior to entering into the Advisory Agreement.

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 fees and expense reimbursements reflected for the three months ended March 31, 2016 in the table below were paid to the Former Advisor.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

During the three months ended March 31, 2017, and 2016, the Company paid acquisition fees and expenses of $1.4 million and $0.2 million respectively, of which $0.6 million and $0.2 million respectively, have been recognized in Acquisition fees on the Company's consolidated statement of operations. In addition, during the three months ended March 31, 2017, the Company capitalized $0.8 million of acquisition expenses included in Commercial mortgage loans within the Company's consolidated balance sheets, which is amortized over the life of each investment using the effective interest method. The Company did not capitalize any acquisitions expenses for the three months ended March 31, 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 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 months ended March 31, 2017, and 2016, the Company incurred $2.3 million and $2.4 million in asset management fees, respectively. These asset management fees are recorded in "Asset management and subordinated performance fee" within the consolidated statements of operations.

The Company is required to 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 Former 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 Former Advisor exceed 10.0% of the aggregate total return for such year. This fee will be payable only upon the sale of assets, distributions or other event which results in the Company's return on stockholders’ capital exceeding 6.0% per annum.

The Company did not incur an annual subordinated performance fee during the three months ended March 31, 2017. During the three months ended March 31, 2016, the Company incurred an annual subordinated performance fee of $0.6 million. The subordinated performance fee is recorded in "Asset management and subordinated performance fees" within the Company's consolidated statements of operations.

The table below depicts related party fees and reimbursements in connection with the operations of the Company for the three and nine months ended March 31, 2017 and 2016 and the associated payable as of March 31, 2017 and December 31, 2016 (in thousands):



	Three Months Ended March 31,				Payable as of
	2017		2016		March 31, 2017		December 31, 2016
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	$	—	$	—	$	480	$	480
Acquisition fees and expenses ⁽¹⁾	1,412		157		—		—
Administrative services expenses	855		816		855		1,000
Advisory and investment banking fee	—		6		—		—
Asset management and subordinated performance fee	2,312		3,010		2,340		2,439
Other related party expenses	48		26		66		145
Total related party fees and reimbursements	$	4,627	$	4,015	$	3,741	$	4,064

________________________

¹ Includes amortization of capitalized acquisition fees and expenses.

The payables as of March 31, 2017 and December 31, 2016 in the table above are included in "Due to affiliates" in the Company's consolidated balance sheets.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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 provided, 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 months ended March 31, 2017 and March 31, 2016, the Company incurred $0.9 million and $0.8 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 Advisor is 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 March 31, 2017.

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. 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. 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 March 31, 2017 and December 31, 2016, the Company obtained broker quotes for determining the fair value of each CMBS investment used. As the broker quotes were both limited and non-binding, the Company has classified the CMBS as level III.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

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 March 31, 2017 and December 31, 2016 (in thousands):



	Total		Level I		Level II		Level III
March 31, 2017
Real estate securities	$	25,733	$	—	$	—	$	25,733
December 31, 2016
Real estate securities	49,049		—		—		49,049

The following table presents additional information about CMBS investments which are measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 for which the Company has used Level 3 inputs to determine fair value (dollars in thousands):



	March 31, 2017			Year Ended December 31, 2016
Beginning balance	$	49,049		$	—
Transfers into Level III	—			57,639
Total realized and unrealized gains (losses)
included in earnings:
Realized loss on sale of real estate securities	(29		)	(874		)
Impairment losses on real estate securities	—			(310		)
Net accretion	6			—
Unrealized gains (losses) included in OCI ⁽¹⁾	1,388			1,719
Purchases	—			—
Sales	(24,681		)	(9,125		)
Cash repayments/receipts	—			—
Transfers out of Level III	—			—
Ending balance	$	25,733		$	49,049

________________________

(1) - Unrealized gains included in Other comprehensive income ("OCI") are attributable to assets still held at March 31, 2017 and December 31, 2016.

Financial Instruments Measured at Fair Value on a Non-Recurring Basis

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



	Total		Level I		Level II		Level III
March 31, 2017^(*)
Commercial mortgage loans, held-for-sale, measured at fair value	$	53,305	$	—	$	—	$	53,305
December 31, 2016^(*)
Commercial mortgage loans, held-for-sale, measured at fair value	21,179		—		—		21,179

________________________

* As of March 31, 2017 and December 31, 2016, the Company's portfolio of commercial real estate loans held-for-sale were carried at the lower of cost or market value. The fair value of certain held-for-sale loans were adjusted to reflect fair value of the assets based on the sales price received from a potential buyer.

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 months ended March 31, 2017.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(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.

Financial Instruments Not Measured at Fair Value

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 March 31, 2017 and December 31, 2016 (in thousands):



		Level	Carrying Amount		Fair Value
March 31, 2017
Commercial mortgage loans ⁽¹⁾	Asset	III	$	1,011,657	$	987,810
Collateralized loan obligation	Liability	II	229,088		231,954
December 31, 2016
Commercial mortgage loans⁽¹⁾	Asset	III	1,048,737		1,029,756
Collateralized loan obligation	Liability	II	278,450		282,001

________________________

¹ The carrying value is gross of $2.8 million and $2.2 million of allowance for loan losses as of March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016, (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
March 31, 2017
Commercial mortgage loans	$	340,948	$	—	$	340,948	$	510,972	$	5,005	$	—
Real estate securities	52,174		—		52,174		80,376		102		—
December 31, 2016
Commercial mortgage loans	257,664		—		257,664		399,914		5,000		—
Real estate securities	66,639		—		66,639		102,358		21		—

* Includes $54.6 million and $53.3 million Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, 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.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(Unaudited)

The following table represents the Company's operations by segment for the three months ended March 31, 2017 and 2016 (in thousands):



Three Months Ended March 31, 2017	Total		Real Estate Debt		Real Estate Securities
Interest income	$	18,879	$	18,208	$	671
Interest expense	5,428		4,993		435
Net income	6,049		5,949		100
Three Months Ended March 31, 2016
Interest income	20,291		18,676		1,615
Interest expense	4,768		4,091		677
Net income	9,420		9,059		361

The following table represents the Company's total assets by segment as of March 31, 2017 and December 31, 2016 (in

thousands):



As of March 31, 2017	Total		Real Estate Debt		Real Estate Securities
Total Assets	$	1,255,278	$	1,229,244	$	26,034
As of December 31, 2016
Total Assets	1,248,125		1,198,806		49,319

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

On May 9, 2017, the Company’s loan servicer notified the Company of a maturity default on one of the Company’s mezzanine loans. The borrower of the loan had been current through April 2017. The Company is currently evaluating the impact of, and any actions it intends to take regarding, the maturity default. Based on the Company’s preliminary assessment, the Company does not believe there to be risk of any principal loss as of the filing of this form 10Q.

Distributions Paid

On April 3, 2017, the Company paid a distribution of $5.5 million to stockholders of record during the month of March 2017. The Company paid $3.6 million of the distribution in cash, while $1.9 million was used to purchase 96,082 shares through the DRIP.

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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 Benefit Street Partners Realty 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, 2016 filed with the U.S. Securities and Exchange Commission (the "SEC") on March 29, 2017.

As used herein, the terms "we," "our" and "us" refer to Benefit Street Partners Realty Trust, Inc., a Maryland corporation, and, as required by context, to Benefit Street Partners Realty 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, 2016.

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 required 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. 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.

The Advisor, an SEC-registered investment adviser, is a credit-focused alternative asset management firm. The Advisor manages assets across a broad range of complementary credit strategies, including high yield, levered loans, private/

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opportunistic debt, liquid credit, structured credit and commercial real estate debt. 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, 2016.

Portfolio

As of March 31, 2017 and December 31, 2016, our portfolio consisted of 67 and 71 loans (the "Loans") and 2 and 6 investments in CMBS, respectively. The Loans held for investment had a total carrying value, net of allowance for loan losses, of $1,008.9 million and $1,046.6 million, and our CMBS investments had a fair value of $25.7 million and $49.0 million as of March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016 in the amount of $2.8 million and $2.2 million, respectively. There were no impaired or specifically reserved loans in the portfolio as of March 31, 2017 and December 31, 2016.

As of March 31, 2017 and December 31, 2016, our Loans had a weighted average coupon of 6.2% and 6.1%, and a weighted average life of 1.7 and 1.9 years, respectively. Our CMBS investments had a weighted average coupon of 7.9% and 5.8% and a remaining life of 5.1 and 3.1 years as of March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016:

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

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The following charts show the par value by maturity year for the investments in our portfolio as of March 31, 2017 and December 31, 2016.

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The following table shows selected data from our commercial mortgage loans portfolio as of March 31, 2017 (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%	5.9%	78.0%
Senior 2	Office	8,676	1M LIBOR + 4.65%	5.9%	70.8%
Senior 3	Office	38,750	1M LIBOR + 5.25%	6.4%	75.0%
Senior 4	Office	13,442	1M LIBOR + 4.75%	5.8%	74.4%
Senior 5	Retail	14,600	1M LIBOR + 4.25%	5.4%	65.0%
Senior 6	Office	19,979	1M LIBOR + 4.55%	5.5%	70.0%
Senior 7	Multifamily	14,852	1M LIBOR + 4.50%	5.7%	76.0%
Senior 8	Office	12,000	1M LIBOR + 4.75%	5.7%	54.1%
Senior 9	Multifamily	24,085	1M LIBOR + 4.25%	5.3%	69.6%
Senior 10	Retail	9,850	1M LIBOR + 5.25%	6.4%	80.0%
Senior 11	Industrial	19,142	1M LIBOR + 4.25%	5.4%	68.0%
Senior 12	Hospitality	10,350	1M LIBOR + 5.50%	6.7%	69.9%
Senior 13	Office	33,734	1M LIBOR + 4.65%	5.9%	80.0%
Senior 14	Retail	4,725	1M LIBOR + 5.50%	6.8%	72.0%
Senior 15	Retail	25,688	1M LIBOR + 4.75%	6.0%	55.0%
Senior 16	Multifamily	44,192	1M LIBOR + 4.00%	5.0%	77.0%
Senior 17	Retail	7,500	1M LIBOR + 5.00%	6.3%	59.0%
Senior 18	Office	13,440	1M LIBOR + 5.00%	6.2%	75.0%
Senior 19	Hospitality	15,375	1M LIBOR + 5.30%	6.4%	73.5%
Senior 20	Hospitality	9,660	1M LIBOR + 5.50%	6.8%	55.3%
Senior 21	Multifamily	18,941	1M LIBOR + 4.20%	5.3%	76.4%
Senior 22	Multifamily	44,595	1M LIBOR + 4.25%	5.4%	77.0%
Senior 23	Retail	9,450	1M LIBOR + 4.90%	6.0%	69.2%
Senior 24	Industrial	33,655	1M LIBOR + 4.00%	4.9%	65.0%
Senior 25	Mixed Use	45,235	1M LIBOR + 5.50%	6.7%	72.6%
Senior 26	Office	28,431	1M LIBOR + 4.60%	5.7%	65.0%
Senior 27	Hospitality	16,800	1M LIBOR + 4.90%	5.9%	74.0%
Senior 28	Office	35,000	1M LIBOR + 5.00%	6.0%	79.0%

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Loan Type	Property Type	Par Value	Interest Rate ⁽¹⁾	Effective Yield	Loan to Value ⁽²⁾
Senior 29	Office	6,290	1M LIBOR + 4.90%	5.9%	80.0%
Senior 30	Retail	11,800	1M LIBOR + 4.75%	5.9%	79.4%
Senior 31	Retail	13,500	1M LIBOR + 5.00%	6.2%	78.0%
Senior 32	Retail	11,684	1M LIBOR + 4.50%	5.6%	74.8%
Senior 33	Multifamily	18,075	1M LIBOR + 4.50%	5.5%	75.0%
Senior 34	Office	31,250	1M LIBOR + 4.50%	5.6%	75.0%
Senior 35	Multifamily	26,410	1M LIBOR + 4.25%	5.4%	79.7%
Senior 36	Multifamily	25,200	1M LIBOR + 3.85%	4.7%	76.8%
Senior 37	Multifamily	8,707	1M LIBOR + 3.95%	4.8%	77.5%
Senior 38	Multifamily	13,120	1M LIBOR + 3.95%	4.8%	78.2%
Senior 39	Multifamily	5,894	1M LIBOR + 4.05%	4.9%	80.0%
Senior 40	Office	28,489	1M LIBOR + 4.25%	5.3%	73.3%
Senior 41	Multifamily	14,546	1M LIBOR + 5.00%	6.1%	76.7%
Senior 42	Retail	27,249	1M LIBOR + 4.75%	5.7%	67.4%
Senior 43	Multifamily	10,922	1M LIBOR + 4.75%	5.8%	75.0%
Senior 44	Office	15,030	1M LIBOR + 5.35%	6.5%	47.1%
Senior 45	Multifamily	14,000	1M LIBOR + 5.00%	6.0%	56.3%
Senior 46	Office	16,300	1M LIBOR + 6.00%	7.3%	75.0%
Senior 47	Retail	13,700	1M LIBOR + 4.75%	5.9%	62.6%
Senior 48	Retail	28,500	1M LIBOR + 4.73%	5.7%	74.1%
Mezzanine 1	Office	5,000	11.00%	10.8%	63.6%
Mezzanine 2	Hospitality	11,000	1M LIBOR + 7.05%	8.0%	70.0%
Mezzanine 3	Office	13,399	1M LIBOR + 7.25%	8.2%	76.0%
Mezzanine 4	Office	7,000	12.00%	11.9%	78.3%
Mezzanine 5	Hospitality	12,000	1M LIBOR + 9.00%	9.9%	74.2%
Mezzanine 6	Retail	1,963	13.00%	12.9%	85.0%
Mezzanine 7	Office	5,079	3M LIBOR + 10.00%	11.1%	79.5%
Mezzanine 8	Multifamily	3,480	9.50%	9.4%	84.5%
Mezzanine 9	Office	10,000	1M LIBOR + 8.00%	8.9%	80.0%
Mezzanine 10	Multifamily	4,000	12.00%	11.7%	74.5%
Mezzanine 11	Office	10,000	10.00%	10.9%	79.0%
Mezzanine 12	Office	10,000	1M LIBOR + 10.75%	15.9%	80.0%
Mezzanine 13	Hospitality	7,140	10.00%	11.5%	73.9%
Mezzanine 14	Hospitality	3,900	10.00%	11.5%	73.9%
Mezzanine 15	Hospitality	12,510	10.00%	11.5%	73.9%
Mezzanine 16	Hospitality	8,050	10.00%	11.5%	73.9%
Mezzanine 17	Hospitality	6,156	5.46%	12.7%	76.7%
Mezzanine 18	Hospitality	12,350	1M LIBOR + 10.00%	10.9%	74.0%
Subordinate 1	Retail	10,000	11.00%	11.0%	50.1%
		$1,073,300		6.5%	72.4%

________________________

⁽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 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.

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•	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 March 31, 2017 to the Three Months Ended March 31, 2016

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 ended March 31, 2017 and 2016 (dollars in thousands):



	Three Months Ended March 31,
	2017							2016
	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	$	1,064,405		$	18,208	6.8	%	$	1,132,923		$	18,667	6.6	%
Real estate securities	43,745			671		6.1	%	132,010			1,615		4.9	%
Total	$	1,108,150		$	18,879	6.8	%	$	1,264,933		$	20,282	6.4	%
Interest-bearing liabilities:
Repurchase Agreements - Loans	$	280,468		$	2,824	4.0	%	$	231,185		$	1,983	3.4	%
Repurchase Agreements - Securities	63,611			435		2.7	%	123,513			677		2.2	%
Collateralized loan obligations	258,653			2,169		3.4	%	288,106			2,108		2.9	%
Total	$	602,732		$	5,428	3.6	%	$	642,804		$	4,768	3.0	%
Net interest income/spread				$	13,451	3.2	%				$	15,514	3.4	%
Average leverage %⁽⁵⁾	54.4		%					50.8		%
Weighted average levered yield⁽⁶⁾						8.5	%						8.1	%

________________________

⁽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 March 31, 2017 and 2016, 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.

Interest Income

The primary driver for decreased interest income during the three months ended March 31, 2017 compared to the same period in 2016 was the decrease in the size of our portfolio resulting from payoffs and sales of our Loans and sales of CMBS positions. As of March 31, 2017, our Loans had a total carrying value of $1,065.0 million and our CMBS investments had a fair value of $25.7 million, while as of March 31, 2016, the Loans had a total carrying value of $1,126.4 million and our CMBS investments had a fair value of $124.9 million. This decrease was partially offset by an increase in yield on our investments by 40 basis points quarter over quarter, primarily due to increases in the LIBOR index rate during the three months ended March 31, 2017.

Interest Expense

Interest expense for the three months ended March 31, 2017 was $0.7 million higher compared to the three months ended March 31, 2016. The increase in interest expense equates to a 60 basis point increase in rates on interest-bearing liabilities primarily due to increases in the 1 Month LIBOR, the benchmark index for our financing lines.

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Expenses from Operations

Expenses from operations for the three months ended March 31, 2017 and 2016 were made up of the following (in thousands):



	Three Months Ended March 31,
	2017		2016
Asset management and subordinated performance fee	$	2,312	$	3,010
Acquisition fees and acquisition expenses	624		157
Professional fees	767		1,261
Administrative services expenses	855		816
Other expenses	606		694
Total expenses from operations	$	5,164	$	5,938

For the three months ended March 31, 2017, expenses from operations were primarily related to asset management and subordinated performance fees. During the three months ended March 31, 2017 and March 31, 2016, we incurred $2.3 million and $3.0 million of asset management and subordinated performance fees, respectively, a decrease of $0.7 million. The entire $2.3 million in the asset management and subordinated performance fee line for the three months ended March 31, 2017 is composed of asset management fees, as there was no subordinated performance fee due to applicable conditions not having been satisfied.

Additionally, we have incurred approximately $0.9 million of administrative service expenses related to general and administrative expense reimbursement to the Advisor for three months ended March 31, 2017. In addition, our professional fees decreased by approximately $0.5 million during the three months ended March 31, 2017 compared to 2016 due to lower engagement of various consulting and advisory services. For the three months ended March 31, 2016, our expenses from operations were primarily related to asset management and subordinated performance fees of $3.0 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, and distributions to our stockholders. We currently believe that we have sufficient liquidity and capital resources available for all anticipated uses, including the acquisition of additional investments, required debt service and the payment of cash dividends.

Loan Repo Facilities

As of March 31, 2017, we were party to repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility") and Goldman Sachs Bank USA (the "GS Repo Facility"). The JPM Repo Facility matures on June 17, 2017 and, as amended on October 5, 2016, provides up to $300.0 million in advances. The GS Repo Facility initially matures on December 27, 2018, with a one-year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions, and provides up to $250.0 million in advances. Both the JPM Repo Facility and GS Repo Facility are subject to various adjustments. 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 of between 2.25% to 4.50%, depending on the attributes of the purchased assets. Borrowings under the GS Repo Facility accrue interest at per annum rates equal to the sum of (i) a spread over LIBOR of between 2.35% to 2.85%, depending on the attributes of the purchased asset, and (ii) 0.50%. As of March 31, 2017,we were in compliance with all debt covenants.

As of March 31, 2017 and December 31, 2016, there was $251.9 million and $257.7 million of principal outstanding on the JPM Repo Facility, respectively. As of March 31, 2017 we had $89.1 million outstanding under the GS Repo Facility. The Company had no advances under the GS Repo Facility as of December 31, 2016.

The JPM Repo Facility and the GS 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 March 31, 2017 and December 31, 2016, we entered into six MRAs, of which three were in use, described below (in thousands):

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	Amount						Weighted Average
Counterparty	Outstanding		Accrued Interest		Collateral Pledged (*)		Interest Rate		Days to Maturity
As of March 31, 2017
J.P. Morgan Securities LLC	$	52,174	$	119	$	80,376	3.10	%	90
Total/Weighted Average	$	52,174	$	119	$	80,376	3.10	%	90

As of December 31, 2016
J.P. Morgan Securities LLC	$	59,122	$	96	$	92,658	2.55	%	6
Citigroup Global Markets, Inc.	3,879		1		4,850		2.11	%	26
Wells Fargo Securities, LLC	3,638		4		4,850		2.05	%	13
Total/Weighted Average	$	66,639	$	101	$	102,358	2.50	%	8

^(*)Collateral includes $54.6 million and $53.3 million Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, 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 declared a distribution calculated daily at a rate of $0.00565068493, 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 for calendar year 2016. 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 three months ended March 31, 2017 and three months ended March 31, 2016 (in thousands):



Three Months Ended March 31, 2017 Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 3, 2017	$	3,575	$	2,007
February 1, 2017	3,560		1,957
March 1, 2017	3,230		1,770
Total	$	10,365	$	5,734



Three Months Ended March 31, 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
Total	$	9,619	$	6,582

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



	Three Months Ended March 31,
	2017				2016
Distributions:
Cash distributions paid	$	10,365			$	9,619
Distributions reinvested	5,734				6,582
Total distributions	$	16,099			$	16,201
Source of distribution coverage:
Cash flows provided by operations	$	8,539	53.0	%	$	9,619	59.4	%
Available cash on hand	1,826		11.4	%	—		—	%
Common stock issued under DRIP	5,734		35.6	%	6,582		40.6	%
Total sources of distributions	$	16,099	100.0	%	$	16,201	100.0	%
Cash flows provided by operations (GAAP)	$	8,539			$	10,088
Net income (GAAP)	$	6,049			$	9,420

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 March 31, 2017 (in thousands):



	For the Period from November 15, 2012 (date of inception) to March 31, 2017
Distributions paid:
Common stockholders in cash	$	85,444
Common stockholders pursuant to DRIP / offering proceeds	56,158
Total distributions paid	$	141,602
Reconciliation of net income:
Net interest income	$	130,824
Realized loss on sale of real estate securities	(1,935		)
Realized loss on loans held for sale	(135		)
Acquisition fees	(13,732		)
Other operating expenses	(47,992		)
Net income	67,030
Cash flows provided by operations	$	72,457

Cash Flows

Cash Flows for the Three Months Ended March 31, 2017

Net cash provided by operating activities for the three months ended March 31, 2017 was $8.5 million. Cash inflows were primarily driven by net income of $6.0 million.

Net cash provided by investing activities for the three months ended March 31, 2017 was $22.7 million. Cash inflows were driven by proceeds from the sale of real estate securities of $24.7 million, proceeds from the sale of commercial mortgage loans of $11.8 million and principal repayments of $80.1 million, offset by additional funding of $93.9 million on existing loans.

Net cash used in financing activities for the three months ended March 31, 2017 was $0.9 million. Cash outflows were primarily driven by $83.3 million from net borrowings on the Repo Facilities offset by $14.5 million from net payment on our CMBS MRAs, the payment of $10.4 million in cash distributions paid to stockholders, $9.5 million of stock redemptions and repayments on collateralized debt obligations of $49.5 million.

Cash Flows for the Three Months Ended March 31, 2016

Net cash provided by operating activities for the three months ended March 31, 2016 was $10.1 million. Cash inflows were primarily driven by net income of $9.4 million.

Net cash used in investing activities for the three months ended March 31, 2016 was $0.5 million. Cash outflows were primarily driven by additional funding of $9.7 million on existing loans, partially offset by principal repayments of $10.2 million.

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Net cash provided by financing activities for the three months ended March 31, 2016 was $23.8 million. Cash inflows were primarily driven by $37.3 million from net borrowings on the JPM Repo Facility and $3.2 million from net borrowings on our CMBS MRAs which were partially offset by the payment of $9.6 million in cash distributions paid to stockholders.

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 funding 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 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.

Total Costs Incurred Due to Related Party Arrangements

The table below shows the costs incurred due to arrangements with our Advisor (with respect to the three months ended months ended March 31, 2017) and the Former Advisor and its affiliates (with respect to the three months ended months ended March 31, 2016) during the three months ended months ended March 31, 2017 and 2016 and the associated payable as of March 31, 2017 and December 31, 2016 (in thousands). See Note 9 - Related Party Transactions and Arrangements for further detail.



	Three Months Ended March 31,				Payable as of
	2017		2016		March 31, 2017		December 31, 2016
Total commissions and fees incurred from the Former Dealer Manager in connection with the offering	$	—	$	—	$	—	$	—
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	—		—		480		480
Acquisition fees and expenses⁽¹⁾	1,412		157		—		—
Administrative services expenses	855		816		855		1,000
Advisory and investment banking fee	—		6		—		—
Asset management and subordinated performance fee	2,312		3,010		2,340		2,439
Other related party expenses	48		26		66		145
Total	$	4,627	$	4,015	$	3,741	$	4,064

________________________

¹ Includes amortization of capitalized acquisition fees and expenses.

The payables as of March 31, 2017 and December 31, 2016 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 March 31, 2017 and through the date of the filing of this Form 10-Q.

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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 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

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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 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 months ended March 31, 2017 and 2016 (in thousands):

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	Three Months Ended March 31,
	2017			2016
Funds From Operations:
Net income (GAAP)	$	6,049		$	9,420
Funds from operations	$	6,049		$	9,420
Modified Funds From Operations:
Funds from operations	$	6,049		$	9,420
Accretion of premiums, discounts and fees on investments, net	(634		)	(575		)
Acquisition fees	624			157
Unrealized losses on loans held-for-sale	1,350			—
Loan loss (recovery)/provision	612			165
Modified funds from operations	$	8,001		$	9,167

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 March 31, 2017 and December 31, 2016, our portfolio included 67 and 71 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	March 31, 2017		December 31, 2016
(-) 25 Basis Points	(1.58	)%	(1.94	)%
Base Interest Rate	—	%	—	%
(+) 50 Basis Points	3.15	%	3.89	%
(+) 100 Basis Points	6.30	%	7.78	%

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 March 31, 2017, 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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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 March 31, 2017 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, 2016. 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 ended March 31, 2017.

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.

Not applicable.

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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 March 31, 2017 (and are numbered in accordance with Item 601 of Regulation S-K).



Exhibit No.		Description
3.1⁽¹⁾		Articles of Amendment to the Articles of Restatement, effective January 30, 2017.
10.1⁽²⁾		Master Repurchase Agreement, dated as of December 27, 2016, by and between RFT GS Loan, LLC and Goldman Sachs Bank USA.
10.2⁽²⁾		Guaranty, dated as of December 27, 2016, by and between Realty Finance Trust, Inc. and Goldman Sachs Bank USA.
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^*		Quarterly Report on Form 10-Q for the three months ended March 31, 2017, 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 February 3, 2017.

(2) Filed as an exhibit to our current report on Form 8-K filed with the SEC on January 3, 2017.

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BENEFIT STREET PARTNERS REALTY 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.



	BENEFIT STREET PARTNERS REALTY TRUST, INC.

Dated: May 12, 2017	By: /s/ Richard J. Byrne Name: Richard J. Byrne Title: Chief Executive Officer and President (Principal Executive Officer)

Dated: May 12, 2017	By: /s/ Jerome S. Baglien Name: Jerome S. Baglien Title: Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	Apr. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Benefit Street Partners Realty 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	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		31,759,537


1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 of Benefit Street Partners Realty 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


(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:	May 12, 2017	/s/ Richard J. Byrne
		Richard J. Byrne Chief Executive Officer and President (Principal Executive Officer)



Date:	May 12, 2017	/s/ Jerome S. Baglien
		Jerome S. Baglien Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Income:
Interest income	$ 18,879	$ 20,291
Less: Interest expense	5,428	4,768
Net interest income	13,451	15,523
Operating Expenses:
Asset management and subordinated performance fee	2,312	3,010
Acquisition fees and acquisition expenses	624	157
Administrative services expenses	855	816
Professional fees	767	1,261
Other expenses	606	694
Total Operating Expenses	5,164	5,938
Loan loss provision	612	165
Realized loss on loans held for sale	247	0
Realized loss on sale of real estate securities	29	0
Unrealized losses on loans held-for-sale	1,350	0
Net income	$ 6,049	$ 9,420
Basic net income per share (in dollars per share)	$ 0.19	$ 0.30
Diluted net income per share (in dollars per share)	$ 0.19	$ 0.30
Basic weighted average shares outstanding (in shares)	31,740,256	31,548,897
Diluted weighted average shares outstanding (in shares)	31,750,045	31,555,011

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 6,049	$ 9,420
Unrealized gain/(loss) on available-for-sale securities	1,388	(4,964)
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc.	$ 7,437	$ 4,456

Consolidated Statement of Changes In Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit
Balance, shares at Dec. 31, 2016		31,884,631
Balance at Dec. 31, 2016	$ 633,650	$ 319	$ 704,500	$ (500)	$ (70,669)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock repurchases (in shares)		(496,678)
Common stock repurchases	(9,459)	$ (5)	(9,454)
Common stock issued through distribution reinvestment plan (in shares)		285,971
Common stock issued through distribution reinvestment plan	5,734	$ 3	5,731
Share-based compensation (in shares)		0
Share-based compensation	15		15
Net income	6,049				6,049
Distributions declared	(16,070)				(16,070)
Other comprehensive income	1,388			1,388
Balance, shares at Mar. 31, 2017		31,673,924
Balance at Mar. 31, 2017	$ 621,307	$ 317	$ 700,792	$ 888	$ (80,690)

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 6,049	$ 9,420
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization and (discount accretion), net	(634)	(575)
Accretion of deferred commitment fees	(538)	(382)
Amortization of deferred financing costs	694	541
Share-based compensation	15	9
Change in unrealized losses on loans held for sale	1,597	0
Change in unrealized losses on real estate securities	29	0
Loan loss provision	612	165
Changes in assets and liabilities:
Accrued interest receivable	688	582
Prepaid expenses and other assets	(41)	(35)
Accounts payable and accrued expenses	291	155
Due to affiliates	(323)	76
Interest payable	100	132
Net cash provided by operating activities	8,539	10,088
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans	(93,884)	(9,697)
Proceeds from sale of commercial mortgage loans	24,681	0
Proceeds from sale of commercial mortgage loans	11,790	0
Principal repayments received on commercial mortgage loans	80,079	9,253
Principal repayments received on real estate securities	0	928
Net cash provided by investing activities	22,666	484
Cash flows from financing activities:
Common stock repurchases	(9,459)	(6,003)
Repayments of collateralized loan obligations	(49,456)	0
Borrowings on repurchase agreements - commercial mortgage loans	89,085	85,614
Repayments of repurchase agreements - commercial mortgage loans	(5,801)	(48,270)
Borrowings on repurchase agreements - real estate securities	196,503	319,001
Repayments of repurchase agreements - real estate securities	(210,968)	(315,763)
Increase in restricted cash related to financing activities	(86)	(1,132)
Payments of deferred financing costs	(334)	0
Distributions paid	(10,365)	(9,619)
Net cash (used in) provided by financing activities	(881)	23,828
Net change in cash and cash equivalents	30,324	34,400
Cash and cash equivalents, beginning of period	118,048	14,807
Cash and cash equivalents, end of period	148,372	49,207
Supplemental disclosures of cash flow information:
Interest paid	4,634	4,095
Supplemental disclosures of non-cash flow information:
Distributions payable	5,562	5,530
Common stock issued through distribution reinvestment plan	5,734	6,582
Loans transferred to commercial real estate loans, held-for-sale, transferred at fair value	$ 45,513	$ 0

Organization and Business Operations	3 Months Ended
Organization and Business Operations	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Business Operations	Organization and Business Operations Benefit Street Partners Realty Trust, Inc. (the "Company"), formerly known as Realty Finance Trust, Inc., is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt secured by properties located both within and outside of the United States. The Company was incorporated in Maryland on November 15, 2012. The Company made a tax election to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. The Company believes that it has qualified as a REIT and intends to continue to meet the requirements for qualification and taxation as a REIT. On May 14, 2013, the Company commenced business operations after raising in excess of $2.0 million of equity, the amount required for the Company to release equity proceeds from escrow. Substantially all of the Company's business is conducted through Benefit Street Partners Realty 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. The Company has no direct employees. 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. Established in 2008, the Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor is in partnership with Providence Equity Partners L.L.C., a global private equity firm. The Advisor manages 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. Prior to September 29, 2016, Realty Finance Advisor, LLC ("Former Advisor") was the Company's advisor. The Former Advisor was controlled by AR Global Investments, LLC ("AR Global"). The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also invests in commercial real estate securities. 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"). Realty Capital Securities, LLC, (the “Former Dealer Manager”) served as the dealer manager of the Offering. The Former Advisor and Former Dealer Manager are under common control with AR Global, the parent of American Realty Capital VIII, LLC (the "Former Sponsor"). As a result they are related parties and each of them received compensation and fees for services related to the Offering, the investment and management of the Company's assets and the operations of the Company.

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On May 9, 2017, the Company’s loan servicer notified the Company of a maturity default on one of the Company’s mezzanine loans. The borrower of the loan had been current through April 2017. The Company is currently evaluating the impact of, and any actions it intends to take regarding, the maturity default. Based on the Company’s preliminary assessment, the Company does not believe there to be risk of any principal loss as of the filing of this form 10Q. Distributions Paid On April 3, 2017, the Company paid a distribution of $5.5 million to stockholders of record during the month of March 2017. The Company paid $3.6 million of the distribution in cash, while $1.9 million was used to purchase 96,082 shares through the DRIP.

Organization and Business Operations - Narrative (Details) $ in Millions	May 14, 2013 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Proceeds from issuances of common stock	$ 2.0

Summary of Significant Accounting Policies - Narrative (Details) - New Advisor - Affiliate - USD ($)	Mar. 31, 2017	Sep. 29, 2016
Related Party Transaction [Line Items]
Real estate acquisition fee, percentage	1.00%	1.00%
Amount of purchase price to terminate Company's obligation to pay acquisition fees to the Advisor	$ 600,000,000	$ 600,000,000

Commercial Mortgage Loans - Provision for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 2,181	$ 888
Provision for loan losses	612	165
Charge-offs	0	0
Recoveries	0	0
Ending balance	$ 2,793	$ 1,053

Commercial Mortgage Loans - Narrative (Details)	3 Months Ended	12 Months Ended
Commercial Mortgage Loans - Narrative (Details)	Mar. 31, 2017 rating loan	Dec. 31, 2016 rating loan
Receivables [Abstract]
Number of mezzanine loans funded (loan) \| loan	67	71
Initial risk rating of loans	2.0
Weighted average risk rating of loans	2.2	2.1

Commercial Mortgage Loans - Loans Receivable Portfolio (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 1,011,657	$ 1,048,737
First Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 1,073,300	$ 1,077,237
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	$ 361,289	$ 340,944
Loan type as a percent of total loans, percent	33.70%	31.60%
First Mortgage \| Multifamily
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 291,020	$ 329,203
Loan type as a percent of total loans, percent	27.10%	30.60%
First Mortgage \| Hospitality
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 125,291	$ 143,582
Loan type as a percent of total loans, percent	11.70%	13.30%
First Mortgage \| Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 197,668	$ 154,684
Loan type as a percent of total loans, percent	18.40%	14.40%
First Mortgage \| Mixed Use
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 45,235	$ 56,136
Loan type as a percent of total loans, percent	4.20%	5.20%
First Mortgage \| Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross carrying value of loans	$ 52,797	$ 52,688
Loan type as a percent of total loans, percent	4.90%	4.90%

Commercial Mortgage Loans - Real Estate Notes Receivable (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Movement in Mortgage Loans on Real Estate [Roll Forward]
Balance at Beginning of Year	$ 1,046,556	$ 1,124,201
Acquisitions and originations	93,140	9,697
Dispositions	0	0
Principal repayments	(86,079)	(7,949)
Discount accretion and premium amortization	628	566
Loans transferred to commercial real estate loans, held-for-sale, at fair value	(45,513)	0
Fees capitalized into carrying value of loans	744	0
Provision for loan losses	(612)	(165)
Balance at End of Period	$ 1,008,864	$ 1,126,350

Real Estate Securities - Fair Value Measurements, Recurring and Nonrecurring (Details) - Real estate securities $ in Thousands	Mar. 31, 2017 USD ($) investment	Dec. 31, 2016 USD ($) investment
Schedule of Available-for-sale Securities [Line Items]
Number of Investments \| investment	2	6
Interest Rate	7.90%	5.80%
Par Value	$ 25,000	$ 50,000
Fair Value	$ 25,733	$ 49,049

Real Estate Securities - Narrative (Details)	3 Months Ended		12 Months Ended
Real Estate Securities - Narrative (Details)	Mar. 31, 2017 USD ($) investment	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($) investment
Schedule of Available-for-sale Securities [Line Items]
Change in unrealized losses on real estate securities	$ 29,000	$ 0
Real estate securities
Schedule of Available-for-sale Securities [Line Items]
Number of Investments \| investment	2		6
Aggregate carrying value	$ 24,845,000		$ 49,548,000
Unrealized gain	888,000		0
Unrealized loss	0		$ 499,000
Number of investments in an unrealized loss position, 12 months or longer (investment) \| investment			2
Unrealized loss for 12 months or longer			$ 200,000
Change in unrealized losses on real estate securities	$ 28,281	$ 0

Debt - Narrative (Details)	3 Months Ended		12 Months Ended
Debt - Narrative (Details)	Mar. 31, 2017 USD ($) mortgage_asset $ / shares shares	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($) mortgage_asset $ / shares shares	Oct. 19, 2015 USD ($) $ / 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		$ 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	22		27
Principal balance of collateral	$ 369,800,000		$ 419,300,000
U.S. Bank National Association \| Secured Debt \| Collateralized Loan Obligations \| Class C Notes
Line of Credit Facility [Line Items]
Principal balance of collateral	$ 56,000,000		$ 56,000,000
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
GS Repo Facility
Line of Credit Facility [Line Items]
Extension on initial maturity date			1 year
Revolving Credit Facility
Line of Credit Facility [Line Items]
Revolving line of credit	$ 52,174,000		$ 66,639,000
Interest Rate	3.10%		2.50%
Revolving Credit Facility \| JPM Repo Facility
Line of Credit Facility [Line Items]
Unsecured line of credit	$ 300,000,000
Revolving line of credit	$ 251,900,000		$ 257,700,000
Interest Rate	3.29%		3.08%
Interest expense	$ 2,600,000	$ 800,000
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 \| GS Repo Facility
Line of Credit Facility [Line Items]
Unsecured line of credit	$ 250,000,000
Revolving line of credit	$ 89,100,000
Variable interest rate	0.50%
Interest Rate	3.38%
Interest expense	$ 300,000
Revolving Credit Facility \| GS Repo Facility \| Minimum \| London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Variable interest rate	2.35%
Revolving Credit Facility \| GS Repo Facility \| Maximum \| London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Variable interest rate	2.85%

Debt - Schedule of CLO Issued (Details) - Secured Debt - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Oct. 19, 2015
Tranche A \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	1.75%	1.75%
Tranche B \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	3.88%	3.88%
Tranche C \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	5.25%	5.25%
U.S. Bank National Association
Debt Instrument [Line Items]
Par value issued	$ 350,230	$ 350,230	$ 350,200
Par value outstanding	235,580	285,036
U.S. Bank National Association \| Tranche A
Debt Instrument [Line Items]
Par value issued	231,345	231,345
Par value outstanding	172,739	222,195
U.S. Bank National Association \| Tranche B
Debt Instrument [Line Items]
Par value issued	42,841	42,841
Par value outstanding	42,841	42,841
U.S. Bank National Association \| Tranche C
Debt Instrument [Line Items]
Par value issued	76,044	76,044
Par value outstanding	20,000	20,000
Collateralized Loan Obligations \| U.S. Bank National Association
Debt Instrument [Line Items]
Principal balance of collateral	369,800	419,300
Collateralized Loan Obligations \| U.S. Bank National Association \| Tranche C
Debt Instrument [Line Items]
Principal balance of collateral	$ 56,000	$ 56,000

Net Income Per Share - Summary of the Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income	$ 6,049	$ 9,420
Basic weighted average shares outstanding (in shares)	31,740,256	31,548,897
Unvested restricted shares (in shares)	9,789	6,114
Diluted weighted average shares outstanding (in shares)	31,750,045	31,555,011
Basic net income per share (in dollars per share)	$ 0.19	$ 0.30
Diluted net income per share (in dollars per share)	$ 0.19	$ 0.30

Common Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions				1 Months Ended			3 Months Ended
	Mar. 28, 2017	Feb. 28, 2016	Dec. 30, 2014	Nov. 14, 2016	Mar. 31, 2016	May 31, 2013	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Nov. 10, 2016
Class of Stock [Line Items]
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)	$ 0.00565068493					$ 0.00565068493
Common stock, dividends, per share per year, declared (in dollars per share)	$ 2.0625				$ 2.0625	$ 2.0625
NAV per share (in dollars per share)							$ 20.05			$ 20.05
Total distributions							$ 16.1	$ 16.2
Cash distributions							10.4
Common stock distributions							$ 5.7
Share repurchase program, period in force		1 year
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]
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%
Convertible Stock
Class of Stock [Line Items]
Issuance of convertible stock (in shares)			1,000
Convertible Stock \| Former Advisor
Class of Stock [Line Items]
Issuance of convertible stock (in shares)			1,000
Convertible stock, per share value (in dollars per share)			$ 1.00
Common Stock
Class of Stock [Line Items]
Common shares converted (shares)				0
Shares issued in connection with conversion (shares)				0
Common Stock
Class of Stock [Line Items]
Shares outstanding (in shares)							31,673,924		31,884,631