10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

 For the quarterly period ended September 30, 2021

 OR

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

Commission file number: 000-55188

FRANKLIN BSP 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.)
1345 Avenue of the Americas, Suite 32A New York, New York	10105
(Address of Principal Executive Office)	(Zip Code)

(212) 588-6770

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	FBRT	New York Stock Exchange
7.50% Series E Cumulative Redeemable Preferred Stock, par value $0.01 per share	FBRT PRE	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes 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:

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company ☐
	Emerging growth filer ☐
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 ☐ No ☒

The number of shares of the registrant's common stock, $0.01 par value, outstanding as of October 31, 2021 was 43,951,382.

FRANKLIN BSP REALTY TRUST, INC.

TABLE OF CONTENTS

PART I	Page
Item 1. Consolidated Financial Statements and Notes (unaudited)	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	63
Item 3. Quantitative and Qualitative Disclosures about Market Risk	89
Item 4. Controls and Procedures	90
PART II
Item 1. Legal Proceedings	91
Item 1A. Risk Factors	91
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	93
Item 3. Defaults Upon Senior Securities	93
Item 4. Mine Safety Disclosures	93
Item 5. Other Information	94
Item 6. Exhibits	95
Signatures	96

i

PART I

Item 1. Consolidated Financial Statements and Notes (unaudited)

1

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30, 2021		December 31, 2020
ASSETS	(Unaudited)
Cash and cash equivalents	$	91,374	$	82,071
Restricted cash	9,531		10,070
Commercial mortgage loans, held for investment, net of allowance of $15,499 and $20,886 as of September 30, 2021 and December 31, 2020, respectively	3,247,646		2,693,848
Commercial mortgage loans, held for sale, measured at fair value	99		67,649
Real estate securities, available for sale, measured at fair value, amortized cost of $0 and $179,392 as of September 30, 2021 and December 31, 2020, respectively	—		171,136
Derivative instruments, measured at fair value	—		25
Other real estate investments, measured at fair value	2,547		2,522
Receivable for loan repayment (1)	123,311		98,551
Accrued interest receivable	17,132		15,295
Prepaid expenses and other assets	4,023		8,538
Intangible lease asset, net of amortization	49,192		13,546
Real estate owned, net of depreciation	90,623		26,510
Total assets	$	3,635,478	$	3,189,761
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations	$	1,792,353	$	1,625,498
Repurchase agreements - commercial mortgage loans	550,156		276,340
Repurchase agreements - real estate securities	46,531		186,828
Mortgage note payable	23,998		29,167
Other financing and loan participation - commercial mortgage loans	37,434		31,379
Unsecured debt	60,000		—
Derivative instruments, measured at fair value	—		403
Interest payable	972		2,110
Distributions payable	20,447		15,688
Accounts payable and accrued expenses	9,318		5,125
Due to affiliates	17,140		9,525
Total liabilities	$	2,558,349	$	2,182,063
Commitment and contingencies (See Note 10)
Redeemable convertible preferred stock Series A, $0.01 par value, 60,000 authorized and 25,567 and 40,515 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	$	127,603	$	202,292
Redeemable convertible preferred stock Series C, $0.01 par value, 20,000 authorized and 1,400 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	6,969		6,962
Redeemable convertible preferred stock Series D, $0.01 par value, 20,000 authorized and 17,950 issued and outstanding as of September 30, 2021 and none issued or outstanding as of December 31, 2020, respectively	89,677		—
Equity:
Preferred stock, $0.01 par value, 50,000,000 authorized and none issued or outstanding as of September 30, 2021 and December 31, 2020, respectively	—		—
Common stock, $0.01 par value, 949,999,000 shares authorized, 44,162,657 and 44,510,051 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	443		446
Additional paid-in capital	906,517		912,725
Accumulated other comprehensive income (loss)	—		(8,256)
Accumulated deficit	(59,844)		(106,471)
Total stockholders' equity	$	847,116	$	798,444
Non-controlling interest	5,764		—
Total equity	$	852,880	$	798,444
Total liabilities, redeemable convertible preferred stock and equity	$	3,635,478	$	3,189,761

__________________________________

(1) Includes $123.3 million and $98.6 million of cash held by servicer related to the CLOs as of September 30, 2021 and December 31, 2020, respectively.

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

2

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Income:
Interest income	$	47,747	$	44,414	$	138,969	$	135,509
Less: Interest expense	11,988		15,113		35,994		54,740
Net interest income	35,759		29,301		102,975		80,769
Revenue from real estate owned	1,015		1,017		2,447		3,474
Total income	$	36,774	$	30,318	$	105,422	$	84,243
Expenses:
Asset management and subordinated performance fee	8,265		3,749		19,682		11,399
Acquisition expenses	690		166		1,012		483
Administrative services expenses	2,980		3,128		9,532		10,180
Professional fees	2,488		2,470		7,262		8,476
Real estate owned operating expenses	—		509		—		3,250
Depreciation and amortization	—		591		812		1,765
Other expenses	709		571		2,115		3,213
Total expenses	$	15,132	$	11,184	$	40,415	$	38,766
Other (income)/loss:
Provision/(benefit) for credit losses	(1,613)		(3,710)		(5,452)		14,929
Impairment losses on real estate owned assets	—		—		—		398
Realized (gain)/loss on extinguishment of debt	—		—		—		(438)
Realized (gain)/loss on sale of real estate securities	—		4,390		1,375		10,137
Realized (gain)/loss on sale of commercial mortgage loans, held for sale	(206)		—		(206)		(252)
Realized (gain)/loss on sale of real estate owned assets, held for sale	(8,698)		(1,424)		(9,810)		(1,424)
Realized (gain)/loss on sale of commercial mortgage loans, held for sale, measured at fair value	(9,061)		(1,940)		(22,211)		(11,106)
Unrealized (gain)/loss on commercial mortgage loans, held for sale, measured at fair value	1,104		(263)		—		76
Unrealized (gain)/loss on other real estate investments, measured at fair value	(1)		(6)		(27)		37
Unrealized (gain)/loss on derivatives	(1,428)		(4,310)		(374)		625
Realized (gain)/loss on derivatives	1,902		4,722		(357)		13,050
Total other (income)/loss	$	(18,001)	$	(2,541)	$	(37,062)	$	26,032
Income before taxes	39,643		21,675		102,069		19,445
Provision/(benefit) for income tax	1,148		178		3,418		(2,466)
Net income	$	38,495	$	21,497	$	98,651	$	21,911
Net income applicable to common stock	$	29,490	$	16,739	$	75,905	$	10,466
Basic earnings per share	$	0.67	$	0.38	$	1.72	$	0.24
Diluted earnings per share	$	0.67	$	0.38	$	1.71	$	0.24
Basic weighted average shares outstanding	44,185,241		44,405,196		44,245,733		44,348,282
Diluted weighted average shares outstanding	44,200,564		44,421,084		44,261,470		44,361,739

    

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

3

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	38,495	$	21,497	$	98,651	$	21,911
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	—		18,656		8,256		(8,632)
Comprehensive income attributable to Franklin BSP Realty Trust, Inc.	$	38,495	$	40,153	$	106,907	$	13,279

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

4

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

	Common Stock
	Number of Shares	Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity		Non-Controlling Interest		Total Equity
Balance, December 31, 2020	44,510,051	$	446	$	912,725	$	(8,256)	$	(106,471)	$	798,444	$	—	$	798,444
Issuance of common stock	—	—		—		—		—		—		—		—
Common stock repurchases	(521,796)	(5)		(9,142)		—		—		(9,147)		—		(9,147)
Common stock issued through distribution reinvestment plan	147,404	2		2,583		—		—		2,585		—		2,585
Share-based compensation	—	—		55		—		—		55		—		55
Offering costs	—	—		(21)		—		—		(21)		—		(21)
Net income	—	—		—		—		30,146		30,146		—		30,146
Distributions declared	—	—		—		—		(15,644)		(15,644)		—		(15,644)
Other comprehensive income	—	—		—		8,042		—		8,042		—		8,042
Balance, March 31, 2021	44,135,659	$	443	$	906,200	$	(214)	$	(91,969)	$	814,460	$	—	$	814,460
Issuance of common stock	504	—		—		—		—		—		—		—
Common stock repurchases	(3,784)	—		(66)		—		—		(66)		—		(66)
Common stock issued through distribution reinvestment plan	141,270	1		2,523		—		—		2,524		—		2,524
Share-based compensation	11,184	—		53		—		—		53		—		53
Offering costs	—	—		(21)		—		—		(21)		—		(21)
Net income	—	—		—		—		30,010		30,010		—		30,010
Distributions declared	—	—		—		—		(15,898)		(15,898)		—		(15,898)
Other comprehensive income	—	—		—		214		—		214		—		214
Balance, June 30, 2021	44,284,833	$	444	$	908,689	$	—	$	(77,857)	$	831,276	$	—	$	831,276
Issuance of common stock	—	—		—		—		—		—		—		—
Common stock repurchases	(123,257)	(1)		(2,203)		—		—		(2,204)		—		(2,204)
Common stock issued through distribution reinvestment plan	1,081	—		1		—		—		1		—		1
Share-based compensation	—	—		52		—		—		52		—		52
Offering costs	—	—		(22)		—		—		(22)		—		(22)
Net income	—	—		—		—		38,495		38,495		—		38,495
Distributions declared	—	—		—		—		(20,482)		(20,482)		—		(20,482)
Other comprehensive income	—	—		—		—		—		—		—		—
Non-controlling interest	—	—		—		—		—				5,764		5,764
Balance, September 30, 2021	44,162,657	$	443	$	906,517	$	—	$	(59,844)	$	847,116	$	5,764	$	852,880
Balance, December 31, 2019	43,916,815	$	441	$	903,310	$	(978)	$	(85,968)	$	816,805	$	—	$	816,805
Issuance of common stock	650,034	7		10,855		—		—		10,862		—		10,862
Common stock repurchases	(361,829)	(4)		(6,711)		—		—		(6,715)		—		(6,715)
Common stock issued through distribution reinvestment plan	191,326	1		3,548		—		—		3,549		—		3,549
Share-based compensation	—	—		39		—		—		39		—		39
Offering costs	—	—		(136)		—		—		(136)		—		(136)
Net income/(loss)	—	—		—		—		(7,400)		(7,400)		—		(7,400)
Distributions declared	—	—		—		—		(20,371)		(20,371)		—		(20,371)
Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)	—	—		—		—		(7,761)		(7,761)		—		(7,761)
Other comprehensive income/(loss)	—	—		—		(67,607)		—		(67,607)		—		(67,607)
Balance, March 31, 2020	44,396,346	$	445	$	910,905	$	(68,585)	$	(121,500)	$	721,265	$	—	$	721,265

5

Issuance of common stock	—	—		25		—		—		25		—		25
Common stock repurchases	(11,306)	—		(192)		—		—		(192)		—		(192)
Common stock issued through distribution reinvestment plan	6	—		(57)		—		—		(57)		—		(57)
Share-based compensation	10,770	—		57		—		—		57		—		57
Offering costs	—	—		(32)		—		—		(32)		—		(32)
Net income	—	—		—		—		7,814		7,814		—		7,814
Distributions declared	—	—		—		—		(15,603)		(15,603)		—		(15,603)
Other comprehensive income	—	—		—		40,319		—		40,319		—		40,319
Balance, June 30, 2020	44,395,816	$	445	$	910,706	$	(28,266)	$	(129,289)	$	753,596	$	—	$	753,596
Issuance of common stock	—	—		—		—		—		—		—		—
Common stock repurchases	(206,332)	(2)		(3,350)		—		—		(3,352)		—		(3,352)
Common stock issued through distribution reinvestment plan	164,243	2		2,667		—		—		2,669		—		2,669
Share-based compensation	—	—		40		—		—		40		—		40
Offering costs	—	—		(23)		—		—		(23)		—		(23)
Net income	—	—		—		—		21,497		21,497		—		21,497
Distributions declared	—	—		—		—		(15,668)		(15,668)		—		(15,668)
Other comprehensive income	—	—		—		18,656		—		18,656		—		18,656
Balance, September 30, 2020	44,353,727	$	445	$	910,040	$	(9,610)	$	(123,460)	$	777,415	$	—	$	777,415

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

6

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	98,651	$	21,911
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Premium amortization and (discount accretion), net	$	(4,421)	$	(4,535)
Accretion of deferred commitment fees	(6,429)		(4,710)
Amortization of deferred financing costs	3,820		8,297
Share-based compensation	160		136
Realized (gain)/loss from sale of real estate securities	1,375		10,137
Realized (gain)/loss from sale of real estate owned, held for sale	(9,810)		(1,424)
Unrealized (gain)/loss from commercial mortgage loans, held for sale	—		76
Unrealized (gain)/loss from derivative instruments	(374)		625
Unrealized (gain)/loss from other real estate investments	(27)		37
Depreciation and amortization	812		1,765
Recognition of deferred rent revenue	—		(150)
Provision/(benefit) for credit losses	(5,452)		14,929
Impairment losses on real estate owned assets	—		398
Origination of commercial mortgage loans, held for sale	(321,278)		(122,043)
Proceeds from sale of commercial mortgage loans, held for sale	388,828		270,479
Changes in assets and liabilities:
Accrued interest receivable	4,593		6,280
Prepaid expenses and other assets	1,434		(5,173)
Accounts payable and accrued expenses	4,547		(3,114)
Due to affiliates	7,615		3,649
Interest payable	(1,005)		(2,175)
Net cash (used in)/provided by operating activities	$	163,039	$	195,395
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans, held for investment	$	(1,388,777)	$	(851,524)
Principal repayments received on commercial mortgage loans, held for investment	771,878		880,067
Purchase of real estate owned and capital expenditures	(134,052)		(2,869)
Proceeds from sale of real estate owned, held for sale	29,914		15,424
Purchase of real estate securities	—		(148,580)
Proceeds from sale of commercial mortgage loans, held for sale	38,161		—
Proceeds from sale/repayment of real estate securities	178,017		346,200
Proceeds from (purchase)/sale of derivative instruments	(4)		(829)
Net cash (used in)/provided by investing activities	$	(504,863)	$	237,889
Cash flows from financing activities:
Proceeds from issuances of common stock	$	—	$	10,887
Proceeds from issuances of redeemable convertible preferred stock	15,000		70
Common stock repurchases	(11,417)		(10,259)
Borrowings on collateralized loan obligations	612,723		—
Repayments of collateralized loan obligations	(442,672)		(150,766)
Borrowings on repurchase agreements - commercial mortgage loans	812,528		195,182

7

FRANKLIN BSP REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Repayments of repurchase agreements - commercial mortgage loans	(538,712)		(263,482)
Borrowings on repurchase agreements - real estate securities	175,822		857,163
Repayments of repurchase agreements - real estate securities	(316,118)		(1,073,977)
Proceeds from other financing and loan participation - commercial mortgage loans	6,055		23,001
Borrowings on unsecured debt	160,000		—
Repayments of unsecured debt	(100,000)		—
Borrowing on mortgage note payable	23,940		11,456
Payments of deferred financing costs	(4,497)		(511)
Distributions paid	(42,064)		(36,666)
Net cash (used in)/provided by financing activities:	$	350,588	$	(437,902)
Net change in cash, cash equivalents and restricted cash	8,764		(4,618)
Cash, cash equivalents and restricted cash, beginning of period	92,141		109,122
Cash, cash equivalents and restricted cash, end of period	$	100,905	$	104,504
Supplemental disclosures of cash flow information:
Taxes paid	$	80	$	4,400
Interest paid	33,312		48,618
Supplemental disclosures of non - cash flow information:
Distribution payable	$	20,447	$	15,645
Common stock issued through distribution reinvestment plan	5,110		6,161
Commercial mortgage loans transferred from held for sale to held for investment	—		23,625
Real estate owned received in foreclosure	—		35,411
Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$	91,374	$	96,066
Restricted cash	9,531		8,438
Cash, cash equivalents and restricted cash, end of period	$	100,905	$	104,504

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

8

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 1 - Organization and Business Operations

Franklin BSP Realty Trust, Inc. (the "Company"), formerly known as Benefit Street Realty Trust, Inc., is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt investments secured by properties located within and outside the United States. The Company was incorporated in Maryland on November 15, 2012 and commenced operations on May 14, 2013.

The Company made a tax election to be treated as a real estate investment trust (a "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. In addition, the Company, through a subsidiary which is treated as a taxable REIT subsidiary (a "TRS") is indirectly subject to U.S federal, state and local income taxes. The majority 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 Amended and Restated Advisory Agreement, dated January 19, 2018, as amended August 18, 2021 (the "Advisory Agreement"). The Advisor is a wholly owned subsidiary of Franklin Resources, Inc. which, together with its various subsidiaries, operates as Franklin Templeton. 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 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.

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 originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") at a profit. The Company also invests in commercial real estate securities. 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 collateralized debt obligations ("CDOs"). The Company also owns real estate acquired by the Company through foreclosure and deed in lieu of foreclosure, and purchased for investment, typically subject to triple net leases.

On October 19, 2021, the Company completed a merger with Capstead Mortgage Corporation (“Capstead”) pursuant to which Capstead merged into a wholly-owned subsidiary of the Company, and the Company’s common stock commenced trading on the NYSE under the ticker “FBRT”. The Capstead assets acquired in the merger consist primarily of cash and residential adjustable-rate mortgage pass-through securities issued and guaranteed by government-sponsored enterprises or by an agency of the federal government. The Company intends to reinvest the cash and proceeds from dividends, interest, repayments and sales of the assets acquired in the merger into its own investment strategies (see Note 16 - Subsequent Events).

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The Company's unaudited consolidated financial statements and related footnotes 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.

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, 2020, which are included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 11, 2021.

9

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Use of Estimates

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.

The global coronavirus (COVID-19) pandemic has caused economic disruptions and changes to the real estate market. Numerous countries, including the U.S., have declared national emergencies with respect to COVID-19 and certain jurisdictions, including those where our corporate headquarters and/or properties that secure our investments, or properties that the Company owns, are located, have at times imposed “stay-at-home” guidelines or orders or other restrictions to help prevent its spread. The effects of COVID-19 may negatively and materially impact significant estimates and assumptions used by the Company including, but not limited to estimates of expected credit losses, valuation of our equity investments and the fair value estimates of the Company's assets and liabilities. Actual results could differ from those estimates.

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 variable interest entity ("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 it 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. Non-controlling interest represents the equity of a consolidated joint venture that is not owned by the Company.

The accompanying consolidated financial statements include the accounts of collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.

Acquisition Expenses

The Company capitalizes certain direct costs relating to loan origination activities. The cost is amortized over the life of the loan and recognized in interest income in the Company's consolidated statements of operations. Acquisition expenses paid on future funding amounts are expensed within the acquisition expenses line in the Company's consolidated statements of operations.

Cash and Cash Equivalents

Cash consists of amounts deposited with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased.

Restricted Cash

Restricted cash primarily consists of cash pledged as margin on repurchase agreements and derivative transactions. The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.

10

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Commercial Mortgage Loans

Held for Investment - 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, are carried at amortized cost less allowance for credit 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 commitment 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 commitment fees is recognized in interest income in the Company's consolidated statements of operations.

Held for Sale - Commercial mortgage 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 statements of operations. Unamortized loan origination costs for commercial mortgage loans held for sale that are carried at the lower of cost or fair value 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 mortgage loans to held for sale.

Held for Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held for sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in the Commercial mortgage loans, held for sale, measured at fair value in the consolidated balance sheets. Interest income received on commercial mortgage loans, held for sale, measured at fair value is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. Costs to originate these investments are expensed when incurred.

Real estate owned

The Company classifies its real estate owned as long-lived assets held for investment or as long-lived assets held for sale. Held for investment assets are stated at cost, as adjusted for any impairment loss, less accumulated depreciation. Held for sale assets are carried at the lower of depreciated cost or estimated fair value, less estimated costs to sell. The Company generally reclassifies assets as held for sale once a sales contract has been executed and earnest money has become non-refundable and the criteria under ASC 360 has been met.

Amounts capitalized to real estate owned consist of the cost of acquisition or construction, any tenant improvements or major improvements, betterments that extend the useful life of the related asset, and transaction costs associated with the acquisition of an individual asset that does not qualify as a business combination. All repairs and maintenance are expensed as incurred. Additionally, the Company capitalizes interest while the development, or redevelopment, of a real estate owned asset is in progress. No development or redevelopments of real estate owned assets are in progress as of September 30, 2021.

The Company’s real estate owned assets are depreciated or amortized using the straight-line method over the following useful lives:

Buildings & Site Improvements	40 years
Furniture, fixtures, and equipment	15 years
Intangible lease assets	Lease term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of either operating properties or properties under construction in which the Company has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present, management assesses whether the respective carrying values will be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition for assets held for use, or from the estimated fair values, less costs to sell, for assets held for sale. In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts such assets to the respective estimated fair values and recognizes an impairment loss. Estimated fair values are calculated based on the following information, depending upon availability, in order of preference: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated sales value (which is based on key assumptions such as estimated market rents, lease-up periods, estimated lease terms, and capitalization and discount rates) less estimated selling costs.

11

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Fair Value of Assets and Liabilities of Acquired Properties

Upon the acquisition of real properties, the Company records the fair value of properties (plus any related acquisition costs) allocated based on relative fair value as tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based on their estimated fair values. Substantially all of the Company’s property acquisitions qualify as asset acquisitions under Accounting Standards Codification ("ASC") 805, Business Combinations.

The estimated fair values of the tangible assets of an acquired property are determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building based on management’s determination of the estimated fair value of these assets. Management relies on a sales comparison approach using closed land sales and listings in determining the land value, and determines the as-if-vacant estimated fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs.

The estimated fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of market rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases, taking into consideration the probability of renewals for any below-market leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental revenues over the remaining terms of the respective leases.

The estimated fair values of in-place leases include an estimate of the direct costs associated with obtaining the acquired or "in place" tenant and estimates of opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease. The amount capitalized as direct costs associated with obtaining a tenant include commissions, tenant improvements, and other direct costs and are estimated based on management’s consideration of current market costs to execute a similar lease. These direct lease origination costs are included in deferred lease costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

Credit Losses

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses, which amends the credit impairment model for financial instruments. The Company adopted ASU 2016-13 on January 1, 2020.

The allowance for credit losses required under ASU 2016-13 is deducted from the respective loans’ amortized cost basis on the Company’s consolidated balance sheets. The allowance for credit losses attributed to unfunded loan commitments is included in Accounts payable and accrued expenses on the consolidated balance sheets. The guidance also required a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

The following discussion highlights changes to the Company’s accounting policies as a result of this adoption.

Allowance for credit losses

The allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan commitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and reasonable and supportable forecasts.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.

12

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

In measuring the allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 1998 to 2020 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a discounted cash flow (“DCF”) methodology.

For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the allowance for credit losses.

In developing the allowance for credit losses for its loans held for investment, 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, using similar factors as those in developing the allowance for credit losses. 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. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly. At the time of origination or purchase, loans held for investment are ranked as a “2” and will move accordingly going forward based on the ratings which are defined as follows:

1.Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.

2.Low Risk- Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.

3.Average Risk- Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.

4.High Risk/Delinquent/Potential for Loss- Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.

5.Impaired/Defaulted/Loss Likely- Underperforming investment with expected loss of interest and some principal.

The Company also considers qualitative and environmental factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the allowance for credit losses.

Changes in the allowance for credit losses for the Company’s financial instruments are recorded in Provision/(benefit) for credit losses on the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded on the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.

The Company has elected to not measure an allowance for credit losses for accrued interest receivable as it is timely, following three months' time, reversed against interest income when a loan, real estate security or preferred equity investment is placed on nonaccrual status. The Company did not record reversals of accrued interest receivable during the nine months ended September 30, 2021. Loans are charged off against the Provision/(benefit) for credit losses when all or a portion of the principal amount is determined to be uncollectible.

Past due and nonaccrual status

Loans are placed on nonaccrual status and considered non-performing when full payment of principal and interest is unpaid for 90 days or more or where reasonable doubt exists as to timely collection, unless the loan is both well secured and in the process of collection. Interest received on nonaccrual status loans are accounted for under the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company may return a loan to accrual status when repayment of principal and interest is reasonably assured.

13

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Troubled Debt Restructuring (“TDR”)

The Company classifies an individual financial instrument as a TDR when it has a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concession to the borrower who is experiencing financial difficulty. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument. The Company determines the allowance for credit losses for financial instruments that are TDRs individually.

Real Estate Securities

On the acquisition date, all of the Company’s commercial real estate securities were classified as available for sale ("AFS") and carried at fair value, and subsequently any unrealized gains or losses are recognized as a component of accumulated other comprehensive income or loss. The Company may elect the fair value option for its real estate securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded in the Company’s consolidated statements of operations. No such election was made as of September 30, 2021. 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. The Company uses the specific identification method in determining the cost relief for real estate securities sold. Realized gains and losses from the sale of real estate securities are included in the Company’s consolidated statements of operations.

AFS real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations. If the Company intends to sell an impaired real estate security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.

The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.

The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to accumulated other comprehensive income in the consolidated balance sheets.

Repurchase Agreements

Commercial mortgage loans and real estate securities sold under repurchase agreements have been treated as collateralized financing transactions because the Company maintains effective control over the transferred securities. Commercial mortgage loans and real estate securities financed through a repurchase agreement remain on the Company’s consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability. Interest paid in accordance with repurchase agreements is recorded in interest expense on the Company's consolidated statements of operations.

Deferred Financing Costs

The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets on the consolidated balance sheets. Deferred financing cost on the Company's collateralized loan obligations ("CLO") are netted against the Company's CLO payable in the Collateralized loan obligations on the consolidated balance sheets. Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in interest expense on the Company's consolidated statements of operations. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity.

Share Repurchase Program

The Company has a Share Repurchase Program (the "SRP") that enables stockholders to sell their shares to the Company, subject to certain conditions. Refer to Note 9 - Stock Transactions for a description of the SRP. When a stockholder requests a redemption and the redemption is approved by the board of directors, the Company reclassifies such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares.

14

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Offering and Related Costs

Since 2018, the Company has from time to time offered, and may in the future offer, shares of the Company’s common stock or one or more series of its preferred stock (“Preferred Stock”), including its Series A convertible preferred stock (“Series A Preferred Stock”), Series C convertible preferred stock (the “Series C Preferred Stock,”) and Series D convertible preferred stock (the “Series D Preferred Stock”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended. In connection with these offerings, the Company incurs various offering costs. These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers. Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are included within Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, on the Company’s consolidated balance sheets.

Distribution Reinvestment Plan

Pursuant to the Company's distribution reinvestment plan ("DRIP") stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. The purchase price for shares purchased through the DRIP has been the lesser of (i) the Company’s most recent estimated per share net asset value ("NAV"), and (ii) the Company’s most recently disclosed GAAP book value per share. There is no market for our common stock. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the consolidated balance sheets in the period distributions are declared. The DRIP was suspended during the second quarter of 2021 and was also suspended during the third quarter of 2021 in connection with the Capstead merger.

Income Taxes

The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on income in addition to U.S. federal income and excise taxes on its undistributed income. The Company, through its TRS, is indirectly subject to U.S. federal, state and local income taxes. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but is instead taxed as a C corporation. For financial reporting purposes, the TRS is consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. Total income tax provision/(benefit) for the three months ended September 30, 2021 and September 30, 2020 was $1.1 million and $0.2 million, respectively. Total income tax provision/(benefit) for the nine months ended September 30, 2021 and September 30, 2020 was $3.4 million and $(2.5) million, respectively.

The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return. The Company has assessed its tax positions for all open tax years beginning with December 31, 2017 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes.

The Company utilizes the TRS to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests. Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.

Derivatives and Hedging Activities

In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives.  The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.

15

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The Company recognizes all derivatives on the consolidated balance sheets at fair value.  The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized (gain)/loss on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash on the Company’s consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.

Per Share Data

The Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are each considered a participating security and the Company calculates basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock 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 outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, except when doing so would be anti-dilutive.

Reportable Segments

The Company has determined that it has four reportable segments based on how the chief operating decision maker reviews and manages the business. The four reporting segments are as follows:

•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.

•The commercial conduit business in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

See Note 15 - Segment Reporting for further information regarding the Company's segments.

Preferred Stock

The Company’s outstanding classes of preferred stock are classified outside of permanent equity in the consolidated balance sheets. Subject to certain conditions, the outstanding Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock is redeemable at the option of the holders of the Preferred Stock, outside of the control of the Company.

Series A Preferred Stock

The Series A Preferred Stock, ranks senior to the Common Stock, and on parity with all other outstanding classes of preferred stock of the Company (including the Series C and Series D Preferred Stock) with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series A Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series A Preferred Stock into Common Stock.

Dividends on the Series A Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share (subject to a 1.0% increase in the event of the ratings for the Series A Preferred Stock decreases below a certain threshold) and (ii) the dividends that would have been paid had such share of Series A Preferred Stock been converted into a share of Common Stock on the first day of such quarter, subject to proration in the event the share of Series A Preferred Stock is not outstanding for the full quarter. Dividends are paid in arrears.

16

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Series C Preferred Stock

The Series C Preferred Stock ranks senior to the Common Stock and on parity with the Series D Preferred Stock with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series C Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series C Preferred Stock into the Common Stock.

Dividends on the Series C Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share and (ii) the dividends that would have been paid had such share of Series C Preferred Stock been converted into a share of common stock on the first day of such quarter, subject to proration in the event the share of Series C preferred stock is not outstanding for the full quarter. Dividends are paid in arrears. Dividends will accumulate and be cumulative from the most recent date to which dividends had been paid.

Each outstanding share of Series C Preferred Stock shall convert into 299.2 shares of common stock (the “Conversion Rate”), subject to anti-dilution adjustments described in the Articles Supplementary for the Series C Preferred Stock, on October 19, 2022 or, upon the election of the Company upon 10 days’ notice to the holders, on or after April 19, 2022.

In the event of the sale of all or substantially all of the business or assets of the Company (by sale, merger, consolidation or otherwise) or the acquisition by any person of more than 50% of the total economic interests or voting power of all securities of the Company (a “ Change of Control”), in each case prior to the automatic conversion dates set forth above, each holder of Series C Preferred Stock will have the right, prior to consummation of such transaction, to convert its Series C Preferred Stock into common stock at the Conversion Rate. In addition, in the event of a change of control (as defined in the Articles Supplementary of the Series C Preferred Stock) of the Advisor or a Change of Control that is not a "Liquidity Event" and that is related to the removal of the Advisor, both the Company and the holder shall have the right, prior to consummation of the transaction, to require the redemption of the Series C Preferred Stock for the liquidation preference. A "Liquidity Event" is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares of Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchanged for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system.

Holders of the Series C Preferred Stock (voting as a single class with holders of common stock) are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of common stock are entitled to vote. The number of votes applicable to a share of outstanding Series C Preferred Stock will be equal to the number of shares of common stock a share of Series C Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of common stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series C Preferred Stock, voting as a single class with other shares of parity preferred stock, is required to approve the issuance of any equity securities senior to the Series C Preferred Stock and to take certain actions materially adverse to the holders of the Series C Preferred Stock.

Series D Preferred Stock

The Series D Preferred Stock is on parity with the Series C Preferred Stock with respect to preference on liquidation and dividend rights. The terms of the Series D Preferred Stock are substantially the same as the terms of the Series C Preferred Stock, except that the holders of the Series D Preferred Stock have the option to accelerate the mandatory conversion date, which is October 19, 2022, to a date no earlier than April 19, 2022.

The complete terms of the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are set forth in the Articles Supplementary applicable to each class, which have been filed as exhibits to the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended.

17

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Accounting Pronouncements Not Yet Adopted

On March 12, 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company has not adopted any of the optional expedients or exceptions through September 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

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 (dollars in thousands):

	September 30, 2021		December 31, 2020
Senior loans	$	3,239,207	$	2,698,823
Mezzanine loans	23,938		15,911
Total gross carrying value of loans	3,263,145		2,714,734
Less: Allowance for credit losses (1)	15,499		20,886
Total commercial mortgage loans, held for investment, net	$	3,247,646	$	2,693,848

________________________

(1) As of September 30, 2021 and December 31, 2020, there have been no specific reserves for loans in non-performing status.

As of September 30, 2021 and December 31, 2020, the Company's total commercial mortgage loan portfolio, excluding commercial mortgage loans accounted for under the fair value option, was comprised of 150 and 130 loans, respectively.

Allowance for Credit Losses

The following table presents the activity in the Company's allowance for credit losses, excluding the unfunded loan commitments, as of September 30, 2021 (dollars in thousands):

	Three Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	7,389	$	103	$	1,028	$	199	$	440	$	7,715	$	241	$	77	$	17,192
Current Period:
Provision/(benefit) for credit losses	(1,278)		261		509		136		34		(1,286)		(89)		20		(1,693)
Write offs	—		—		—		—		—		—		—		—		—
Ending Balance	$	6,111	$	364	$	1,537	$	335	$	474	$	6,429	$	152	$	97	$	15,499

	Nine Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	3,095	$	404	$	1,575	$	3,795	$	132	$	11,646	$	117	$	122	$	20,886
Current Period:
Provision/(benefit) for credit losses	3,305		(40)		(38)		(3,460)		342		(5,217)		35		(25)		(5,098)
Write offs	(289)		—		—		—		—		—		—		—		(289)
Ending Balance	$	6,111	$	364	$	1,537	$	335	$	474	$	6,429	$	152	$	97	$	15,499

The Company recorded a decrease in its provision for credit losses during the three and nine months ended September 30, 2021 of $1.7 million and $5.1 million, respectively. The primary driver for the improvement in the reserve balance is the positive economic outlook since the end of the prior year.

18

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following table presents the activity in the Company's allowance for credit losses, for the unfunded loan commitments, as of September 30, 2021 (dollars in thousands):

	Three Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	120	$	—	$	28	$	10	$	8	$	65	$	—	$	—	$	231
Current Period:
Provision/(benefit) for credit losses	67		1		15		3		3		(9)		—		—		80
Ending Balance	$	187	$	1	$	43	$	13	$	11	$	56	$	—	$	—	$	311

    

	Nine Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	85	$	—	$	47	$	418	$	14	$	101	$	—	$	—	$	665
Current Period:
Provision/(benefit) for credit losses	102		1		(4)		(405)		(3)		(45)		—		—		(354)
Ending Balance	$	187	$	1	$	43	$	13	$	11	$	56	$	—	$	—	$	311

19

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):

	September 30, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	1,856,441	56.7	%	$	1,202,694	44.2	%
Office	527,371		16.1	%	517,464		19.0	%
Hospitality	445,770		13.6	%	403,908		14.8	%
Mixed Use	133,644		4.1	%	102,756		3.8	%
Industrial	125,120		3.8	%	243,404		8.9	%
Retail	75,961		2.3	%	78,550		2.9	%
Self Storage	56,495		1.7	%	86,424		3.2	%
Manufactured Housing	36,225		1.2	%	71,263		2.6	%
Land	16,400		0.5	%	16,400		0.6	%
Total	$	3,273,427	100.0	%	$	2,722,863	100.0	%

	September 30, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Southeast	$	1,030,591	31.5	%	$	796,908	29.3	%
Southwest	1,027,246		31.4	%	515,392		18.9	%
Mideast	431,104		13.2	%	473,514		17.4	%
Far West	368,565		11.3	%	415,173		15.2	%
Great Lakes	134,591		4.1	%	199,203		7.3	%
Plains	94,292		2.9	%	116,143		4.3	%
Various	70,118		2.1	%	136,855		5.0	%
New England	68,169		2.0	%	69,675		2.6	%
Rocky Mountain	48,751		1.5	%	—		—	%
Total	$	3,273,427	100.0	%	$	2,722,863	100.0	%

As of September 30, 2021 and December 31, 2020, the Company's total commercial mortgage loans, held for sale, measured at fair value were comprised of one and three loans, respectively. As of September 30, 2021 and December 31, 2020, the contractual principal outstanding of commercial mortgage loans, held for sale, measured at fair value was $0.1 million and $67.6 million, respectively. As of September 30, 2021 and December 31, 2020, none of the Company's commercial mortgage loans, held for sale, measured at fair value were in default or greater than ninety days past due.

20

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for sale, measured at fair value (dollars in thousands):

	September 30, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	100	100.0	%	$	100	0.1	%
Industrial	—		—	%	67,550		99.9	%
Total	$	100	100.0	%	$	67,650	100.0	%

	September 30, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Great Lakes	$	100	100.0	%	$	9,150	13.5	%
Far West	—		—	%	58,500		86.5	%
Total	$	100	100.0	%	$	67,650	100.0	%

Loan Credit Quality and Vintage

The following tables present the amortized cost of our commercial mortgage loans, held for investment as of September 30, 2021 and December 31, 2020, by loan type, the Company’s internal risk rating and year of origination. The risk ratings are updated as of September 30, 2021.

As of September 30, 2021
	2021		2020		2019		2018		2017		2016		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	1,059,072	$	505,437	$	116,286	$	128,581	$	—	$	—	$	3,487	$	1,812,863
3-4 internal grade	—		—		—		37,025		—		—		—		37,025
Total Multifamily Loans	$	1,059,072	$	505,437	$	116,286	$	165,606	$	—	$	—	$	3,487	$	1,849,888
Retail:
Risk Rating:
1-2 internal grade	$	—	$	13,344	$	20,162	$	16,400	$	—	$	—	$	—	$	49,906
3-4 internal grade	—		—		12,884		29,445		—		—		—		42,329
Total Retail Loans	$	—	$	13,344	$	33,046	$	45,845	$	—	$	—	$	—	$	92,235
Office:
Risk Rating:
1-2 internal grade	$	55,283	$	253,254	$	131,380	$	36,584	$	26,549	$	—	$	—	$	503,050
3-4 internal grade	—		—		—		22,685		—		—		—		22,685
Total Office Loans	$	55,283	$	253,254	$	131,380	$	59,269	$	26,549	$	—	$	—	$	525,735
Industrial:
Risk Rating:
1-2 internal grade	$	—	$	46,033	$	78,833	$	—	$	—	$	—	$	—	$	124,866
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	—	$	46,033	$	78,833	$	—	$	—	$	—	$	—	$	124,866
Mixed Use:
Risk Rating:

21

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

1-2 internal grade	$	32,378	$	30,305	$	—	$	70,679	$	—	$	—	$	—	$	133,362
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	32,378	$	30,305	$	—	$	70,679	$	—	$	—	$	—	$	133,362
Hospitality:
Risk Rating:
1-2 internal grade	$	136,726	$	26,910	$	10,564	$	—	$	—	$	—	$	—	$	174,200
3-4 internal grade	—		—		137,534		52,786		80,140		—		—		270,460
Total Hospitality Loans	$	136,726	$	26,910	$	148,098	$	52,786	$	80,140	$	—	$	—	$	444,660
Self-Storage:
Risk Rating:
1-2 internal grade	$	14,939	$	41,362	$	—	$	—	$	—	$	—	$	—	$	56,301
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	14,939	$	41,362	$	—	$	—	$	—	$	—	$	—	$	56,301
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	—	$	25,936	$	10,162	$	—	$	—	$	—	$	—	$	36,098
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	—	$	25,936	$	10,162	$	—	$	—	$	—	$	—	$	36,098
Total	$	1,298,398	$	942,581	$	517,805	$	394,185	$	106,689	$	—	$	3,487	$	3,263,145

December 31, 2020
	2020		2019		2018		2017		2016		2015		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	583,550	$	349,588	$	188,975	$	—	$	—	$	—	$	3,488	$	1,125,601
3-4 internal grade	—		—		35,887		37,812		—		—		—		73,699
Total Multifamily Loans	$	583,550	$	349,588	$	224,862	$	37,812	$	—	$	—	$	3,488	$	1,199,300
Retail:
Risk Rating:
1-2 internal grade	$	13,277	$	22,760	$	16,400	$	—	$	—	$	—	$	—	$	52,437
3-4 internal grade	—		12,872		29,425		—		—		—		—		42,297
Total Retail Loans	$	13,277	$	35,632	$	45,825	$	—	$	—	$	—	$	—	$	94,734
Office:
Risk Rating:
1-2 internal grade	$	244,301	$	160,709	$	61,169	$	40,846	$	—	$	—	$	—	$	507,025
3-4 internal grade	—		—		—		8,392		—		—		—		8,392
Total Office Loans	$	244,301	$	160,709	$	61,169	$	49,238	$	—	$	—	$	—	$	515,417
Industrial:
Risk Rating:

22

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

1-2 internal grade	$	119,193	$	89,590	$	—	$	—	$	—	$	33,655	$	—	$	242,438
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	119,193	$	89,590	$	—	$	—	$	—	$	33,655	$	—	$	242,438
Mixed Use:
Risk Rating:
1-2 internal grade	$	30,246	$	—	$	59,451	$	12,839	$	—	$	—	$	—	$	102,536
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	30,246	$	—	$	59,451	$	12,839	$	—	$	—	$	—	$	102,536
Hospitality:
Risk Rating:
1-2 internal grade	$	26,878	$	10,547	$	—	$	—	$	—	$	—	$	—	$	37,425
3-4 internal grade	—		160,079		115,026		90,612		—		—		—		365,717
Total Hospitality Loans	$	26,878	$	170,626	$	115,026	$	90,612	$	—	$	—	$	—	$	403,142
Self-Storage:
Risk Rating:
1-2 internal grade	$	41,305	$	—	$	44,908	$	—	$	—	$	—	$	—	$	86,213
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	41,305	$	—	$	44,908	$	—	$	—	$	—	$	—	$	86,213
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	25,905	$	45,049	$	—	$	—	$	—	$	—	$	—	$	70,954
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	25,905	$	45,049	$	—	$	—	$	—	$	—	$	—	$	70,954
Total	$	1,084,655	$	851,194	$	551,241	$	190,501	$	—	$	33,655	$	3,488	$	2,714,734

23

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Past Due Status

The following table presents an aging summary of the loans amortized cost basis at September 30, 2021 (dollars in thousands):

	Multifamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Status:
Current	$	1,849,888	$	92,235	$	525,735	$	124,866	$	133,362	$	387,585	$	56,301	$	36,098	$	3,206,070
1-29 days past due	—		—		—		—		—		—				—		—
30-59 days past due	—		—		—		—		—		—		—		—		—
60-89 days past due	—		—		—		—		—		—		—		—		—
90-119 days past due	—		—		—		—		—		—		—		—		—
120+ days past due (1)	—		—		—		—		—		57,075		—		—		57,075
Total	$	1,849,888	$	92,235	$	525,735	$	124,866	$	133,362	$	444,660	$	56,301	$	36,098	$	3,263,145

________________________

(1) For the three and nine months ended September 30, 2021, there was no interest income recognized on this loan.

As of September 30, 2021 and December 31, 2020, the Company had one loan with a total cost basis of $57.1 million and two loans with a total cost basis of $94.9 million, respectively, on non-accrual status for which there was no related allowance for credit losses.

Credit Characteristics

As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

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

All commercial mortgage loans, excluding loans classified as commercial mortgage loans, held for sale, measured at fair value within the consolidated balance sheets, are assigned an initial risk rating of 2.0. As of September 30, 2021 the weighted average risk rating of the loans was 2.1. As of December 31, 2020, the weighted average risk rating of the loans was 2.2.

The following table represents the allocation by risk rating for the Company's commercial mortgage loans, held for investment (dollars in thousands):

September 30, 2021				December 31, 2020
Risk Rating	Number of Loans	Par Value		Risk Rating	Number of Loans	Par Value
1	—	$	—	1	—	$	—
2	130	2,900,711		2	104	2,232,045
3	19	315,641		3	22	384,040
4	1	57,075		4	4	106,778
5	—	—		5	—	—
	150	$	3,273,427		130	$	2,722,863

24

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

For the nine months ended September 30, 2021 and year ended December 31, 2020, the activity in the Company's commercial mortgage loans, held for investment portfolio was as follows (dollars in thousands):

	Nine Months Ended September 30,		Year Ended December 31,
	2021		2020
Balance at Beginning of Year	$	2,693,848	$	2,762,042
Cumulative-effect adjustment upon adoption of ASU 2016-13	—		(7,211)
Acquisitions and originations	1,395,556		1,287,720
Principal repayments	(769,103)		(1,223,490)
Discount accretion/premium amortization	4,421		6,146
Loans transferred from/(to) commercial real estate loans, held for sale	(38,161)		(76,979)
Net fees capitalized into carrying value of loans	(6,779)		(6,562)
(Provision)/benefit for credit losses	5,098		(13,181)
Charge-off from allowance	289		427
Transfer to real estate owned	(37,523)		(35,064)
Balance at End of Period	$	3,247,646	$	2,693,848

During the nine months ended September 30, 2021, the Company wrote off a commercial mortgage loan, held for investment, with a carrying value of $37.8 million in exchange for the possession of a REO investment at a fair value of $37.5 million, comprised of $33.0 million of real property (land, building and improvements) and $4.5 million of personal property (furniture, fixture, and equipment) at the time of transfer. The transfer occurred when the Company took possession of the property by completing a foreclosure transaction in January 2021, resulting in a $0.3 million impairment loss at the time of transfer. Since the foreclosure was entered into due to the borrower experiencing financial difficulty and the recorded investment in the receivable was more than the fair value of the collateral collected, the transaction qualifies as a TDR. The Company accounted for the REO acquired during the nine months ended September 30, 2021 as an asset acquisition. The Company subsequently sold this REO asset during the nine months ended September 30, 2021 for a $0.8 million gain, presented net of direct selling costs associated with the disposition of the asset, included within Realized gain/loss on sale of real estate owned assets, held for sale in the Company's consolidated statements of operations.

Note 4 - Real Estate Securities

As of September 30, 2021 the Company did not hold any real estate securities, CMBS. The following is a summary of the Company's real estate securities, CMBS, as of December 31, 2020 (dollars in thousands):

December 31, 2020
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	3.0%	5/15/2022	$13,250	$12,657
CMBS 2	2.2%	6/26/2025	10,800	10,335
CMBS 3	2.5%	2/15/2036	40,000	38,292
CMBS 4	1.9%	6/15/2037	8,000	7,892
CMBS 5	2.1%	9/15/2037	24,000	23,297
CMBS 6	2.3%	6/15/2034	12,000	11,580
CMBS 7	1.5%	12/15/2036	20,000	18,975
CMBS 8	1.8%	12/15/2036	25,000	23,268
CMBS 9	2.3%	3/15/2035	25,665	24,840

The Company classified its CMBS investments as available for sale and reported them at fair value in the consolidated balance sheets with changes in fair value recorded in accumulated other comprehensive income/(loss) as of December 31, 2020. The weighted average contractual maturity for CLO investments included within the CMBS portfolio as of December 31, 2020 was 14 years. The weighted average contractual maturity for single asset single borrower "SASB" investments as of December 31, 2020 was 14 years.

25

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CMBS investments by investment type as of December 31, 2020 (dollars in thousands):

	Amortized Cost		Credit Loss Allowance		Unrealized Gain		Unrealized Loss		Fair Value
December 31, 2020
CLOs	$	123,444	$	—	$	—	$	(4,888)	$	118,556
SASB	55,948		—		—		(3,368)		52,580
Total	$	179,392	$	—	$	—	$	(8,256)	$	171,136

As of December 31, 2020, the Company held 9 CMBS positions with an amortized cost basis of $179.4 million and an unrealized loss of $8.3 million, of which 7 positions had an unrealized loss for a period greater than twelve months. As of September 30, 2021 the Company did not hold any real estate securities, CMBS.

The following table provides information on the unrealized losses and fair value on the Company's real estate securities, CMBS, available for sale that were in an unrealized loss position, and for which an allowance for credit losses has not been recorded, in each case as of December 31, 2020 (amounts in thousands):

	Fair Value				Unrealized Loss
	Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months		Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months
December 31, 2020
CLOs	$	63,131	$	55,425	$	(2,824)	$	(2,065)
SASB	—		52,580		—		(3,367)
Total	$	63,131	$	108,005	$	(2,824)	$	(5,432)

As of September 30, 2021 the Company did not hold any real estate securities, CMBS. As of December 31, 2020, there were 7 securities with unrealized losses for a period greater than twelve months reflected in the table above. After evaluating the securities, the Company concluded that the unrealized losses reflected above were noncredit-related and would be recovered from the securities’ estimated future cash flows. The Company considered a number of factors in reaching this conclusion, including that the Company did not intend to sell the securities, it was not considered more likely than not that we would be forced to sell the securities prior to recovering our amortized cost, the portfolio is made up of investment grade securities of recent originations and higher tranches, and that there were no material credit events that would have caused us to otherwise conclude that the Company would not recover our cost. The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the original cash flows expected to be collected to the revised cash flows expected to be collected discounted using the effective interest rate, limited by the amount that the fair value is less than the amortized cost basis. Significant judgment is used in projecting cash flows. As a result, actual income and/or credit losses could be materially different from what is currently projected and/or reported.

The following table provides information on the amounts of gain/(loss) on the Company's real estate securities, CMBS, available for sale (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Unrealized gain/(loss) on available for sale securities	$	—	$	4,199	$	1,665	$	(9,380)
Reclassification of net (gain)/loss on available for sale securities included in net income	—		14,457		6,591		748
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	$	—	$	18,656	$	8,256	$	(8,632)

26

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The amounts reclassified for net (gain)/loss on available for sale securities are included in the realized (gain)/loss on sale of real estate securities in the Company's consolidated statements of operations. The Company's unrealized gain/(loss) on available for sale securities is net of tax. Due to the Company's designation as a REIT, there was no tax impact on unrealized gain/(loss) on available for sale securities.

Note 5 - Real Estate Owned

The following table summarizes the Company's real estate owned asset as of September 30, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Site Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
September 2021 (1)	Industrial	Jeffersonville, GA	$	3,436	$	87,187	$	—	$	—	$	90,623
			$	3,436	$	87,187	$	—	$	—	$	90,623

________________________

(1) See Note 2 - Summary of Significant Accounting Policies.

The following table summarizes the Company's real estate owned asset as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Site Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
October 2019 (1)	Office	Jeffersonville, IN	$	1,887	$	21,989	$	3,565	$	(931)	$	26,510
			$	1,887	$	21,989	$	3,565	$	(931)	$	26,510

________________________

(1) See Note 2 - Summary of Significant Accounting Policies.

Depreciation expense for the nine months ended September 30, 2021 totaled $0.4 million. There was no depreciation expense for the three months ended September 30, 2021. Depreciation expense for the three and nine months ended September 30, 2020 totaled $0.3 million and $0.8 million, respectively.

During the nine months ended September 30, 2021, the Company sold the real estate owned asset in Jeffersonville, IN to a third party, resulting in a $8.6 million gain recognized within Realized gain/loss on sale of real estate owned assets, held for sale in the consolidated statements of operations.

In August 2021 the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the "Jeffersonville JV") to acquire a $139.5 million triple net lease property in Jeffersonville, GA. The Company has a 79% interest in the Jeffersonville JV, while the affiliate has a 21% interest. The Company invested a total of $109.8 million, made up of $88.7 million in debt and $21.1 million in equity, representing 79% of the ownership interest in the Jeffersonville JV. The affiliate made up the remaining $29.8 million composed of a $24.0 million mortgage note payable and $5.7 million in equity. The Company has control of Jeffersonville JV with 79% ownership and, therefore, consolidates Jeffersonville JV on its consolidated balance sheet. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).

27

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 6 - Leases

Intangible Lease Asset

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of September 30, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
September 2021	Industrial	Jeffersonville, GA	$	49,192	$	—	$	49,192
			$	49,192	$	—	$	49,192

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
October 2019	Office	Jeffersonville, IN	$	14,509	$	(963)	$	13,546
			$	14,509	$	(963)	$	13,546

Rental Income

On September 17, 2021, the Company, through a joint venture, purchased an industrial facility that is subject to an existing triple net lease. The minimum rental amount due under the lease is subject to annual increases of 2.0%. The initial term of the lease expires in 2038 and contains renewal options for four consecutive five-year terms. The remaining lease term is 17.1 years. Rental income for this lease for the three and nine months ended September 30, 2021 totaled $0.3 million. Rental income is included in Revenue from real estate owned in the consolidated statements of operations.

On October 15, 2019, the Company purchased an office building that was subject to an existing triple net lease. The minimum rental amount due under the lease was subject to annual increases of 1.5%. The initial term of the lease expires in 2037 and contained renewal options for four consecutive five-year terms. The Company sold the real estate owned asset during the three months ended September 30, 2021 (see Note 5 - Real Estate Owned). Rental income for this lease for each of the three and nine months ended September 30, 2021 and September 30, 2020 totaled $0.7 million and $2.1 million, respectively. Rental income is included in Revenue from real estate owned in the consolidated statements of operations.

The following table summarizes the Company's schedule of future minimum rents to be received under the industrial facility lease (dollars in thousands):

Minimum Rents	September 30, 2021
2021 (October - December)	$	1,953
2022	7,889
2023	8,046
2024	8,207
2025	8,372
2026 and beyond	123,520
Total minimum rent	$	157,987

Amortization Expense

Intangible lease assets are amortized using the straight-line method over the contractual life of the lease, of a period up to 20 years. The weighted average life of the intangible asset as of September 30, 2021 is approximately 17.1 years. There had been no amortization expense for the three months ended September 30, 2021. Amortization expense for the nine months ended September 30, 2021 totaled $0.4 million. Amortization expense for the three and nine months ended September 30, 2020 totaled $0.2 million and $0.6 million, respectively.

28

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following table summarizes the Company's expected amortization for intangible assets over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):

Amortization Expense	September 30, 2021
2021 (October - December)	$	(723)
2022	(2,894)
2023	(2,894)
2024	(2,894)
2025	(2,894)

Note 7 - Debt

Repurchase Agreements - Commercial Mortgage Loans

The Company has entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").

The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.

The details of the Company's Repo Facilities at September 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

As of September 30, 2021
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility	$	400,000	$	114,584	$	2,821	2.14	%	10/6/2022
CS Repo Facility (2)	200,000		61,788		2,432		2.95	%	8/11/2022
WF Repo Facility (3)	175,000		102,368		924		1.75	%	11/22/2021
Barclays Revolver Facility (4)	100,000		75,000		223		8.25	%	9/20/2023
Barclays Repo Facility (5)	300,000		196,416		1,512		1.75	%	3/15/2022
Total	$	1,175,000	$	550,156	$	7,912

________________________

(1) For the nine months ended September 30, 2021. Includes amortization of deferred financing costs.

(2) On August 12, 2021, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 11, 2022. Additionally, on November 3, 2021 the committed financing amount was amended from $200 million to $300 million with the option to upsize to $400 million at the Company's discretion.

(3) There are two more one-year extension options available at the Company's discretion. On October 15, 2021 the committed financing amount was upsized from $175 million to $275 million.

(4) On September 8, 2021, the Company amended the maturity date to September 20, 2023. There is one one-year extension option available at the Company's discretion.

(5) There are two one-year extension options available at the Company's discretion.

29

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility (2)	$	300,000	$	113,884	$	5,020	2.54	%	10/6/2022
USB Repo Facility (3)	100,000		5,775		599		2.40	%	6/15/2021
CS Repo Facility (4)	200,000		106,971		3,539		2.84	%	8/19/2021
WF Repo Facility (5)	175,000		27,150		1,041		2.50	%	11/21/2021
Barclays Revolver Facility (6)	100,000		—		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.

(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.

(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.

(6) There is one one-year extension option available at the Company's discretion.

(7) Includes two one-year extensions at the Company's option.

The Company expects to use the advances from the Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

The Repo Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. As of September 30, 2021 and December 31, 2020, the Company is in compliance with all debt covenants.

Other financing and loan participation - Commercial Mortgage Loans

On March 23, 2020, the Company transferred $15.2 million of its interest in a term loan to Sterling National Bank ("SNB") via a participation agreement. Since inception, the Company's outstanding loan increased as a result of future fundings, leading to an increase in amount outstanding via the participation agreement. The Company incurred $0.2 million and $0.7 million of interest expense on the SNB term loan for the three and nine months ended September 30, 2021. As of September 30, 2021 the outstanding participation balance was $37.4 million. The loan matures on February 9, 2023.

Mortgage Note Payable

On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of September 30, 2021 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $0.3 million and $0.9 million of interest expense for the three and nine months ended September 30, 2021. As of September 30, 2021 the loan has been assumed by the purchaser of the underlying asset and is no longer held by the Company (see Note 5 - Real Estate Owned).

On September 17, 2021, the Company, in connection with the consolidating joint venture (as discussed in Note 5 - Real Estate Owned), originated a $112.7 million mortgage note payable, of which $88.7 million is eliminated in consolidation (see Note 5 - Real Estate Owned). The remaining mortgage note payable of $24.0 million is disclosed on the consolidated balance sheet. As of September 30, 2021, the loan accrued interest at an annual rate of 3.1% and matures on October 9, 2024.

30

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Unsecured Debt

Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million and $1.2 million of interest expense on the lending agreement with SBL for the three and nine months ended September 30, 2021. As of September 30, 2021, the outstanding balance was $60.0 million.

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 30-90 days and terms are adjusted for current market rates as necessary.

Below is a summary of the Company's MRAs as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Interest Expense		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of September 30, 2021
JP Morgan Securities LLC	$	18,980	$	205	$	24,105	1.14	%	1
Goldman Sachs International	—		37		—		N/A		N/A
Barclays Capital Inc.	27,551		467		36,162		1.28	%	50
Citigroup Global Markets, Inc.	—		81		—		N/A		N/A
Total/Weighted Average	$	46,531	$	790	$	60,267	1.22	%	30
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	—		1,057		—		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	—		905		—		N/A		N/A
Citigroup Global Markets, Inc.	53,788		2,532		71,723		1.70	%	29
Total/Weighted Average	$	186,828	$	8,719	$	243,373	1.71	%	33

________________________

(1) Includes $60.3 million and $72.2 million of CLO notes, held by the Company, which are eliminated within the real estate securities, at fair value line in the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

Collateralized Loan Obligations

As of September 30, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 15 and 27 mortgage assets having a principal balance of $230.2 million and $417.9 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.

As of September 30, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 41 and 59 mortgage assets having a principal balance of $619.6 million and $852.1 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October 12, 2018, between the Company and BSPRT 2018-FL4 Issuer.

31

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

As of September 30, 2021 and December 31, 2020, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 56 and 54 mortgage assets having a principal balance of $754.5 million and $799.8 million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer.

On March 25, 2021, BSPRT 2021-FL6 Issuer, Ltd. (the “Issuer”) and BSPRT 2021-FL6 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company entered into an indenture with the OP, as advancing agent and U.S. Bank National Association, as note administrator and trustee, which governs the issuance of approximately $645.8 million principal balance secured floating rate notes (the “Notes”), of which $573.1 million were purchased by third party investors and $72.6 million were purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 54,250 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 September 30, 2021, the notes issued by BSPRT 2021-FL6 Issuer, Ltd. and BSPRT 2021-FL6 Co-Issuer, LLC, are collateralized by interests in a pool of 49 mortgage assets having a principal balance of $699.2 million (the "2021-FL6 Mortgage Assets"). The sale of the 2021-FL6 Mortgage Assets to BSPRT 2021-FL6 Issuer, Ltd. is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL6 Issuer, Ltd.

32

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of the above CLOs of approximately $311.2 million and $256.9 million as of September 30, 2021 and December 31, 2020, respectively. The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer, 2019-FL5 Issuer and 2021-FL6 Issuer (the "CLOs), respectively, as of September 30, 2021 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	—	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		65,176		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		185,596		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2018-FL4 Issuer	Tranche E	28,223		28,223		1M LIBOR + 305	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		369,761		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,374		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
2021-FL6 Issuer	Tranche A	367,500		367,500		1M LIBOR + 110	3/15/2036
2021-FL6 Issuer	Tranche A-S	86,625		86,625		1M LIBOR + 130	3/15/2036
2021-FL6 Issuer	Tranche B	33,250		33,250		1M LIBOR + 160	3/15/2036
2021-FL6 Issuer	Tranche C	41,125		41,125		1M LIBOR + 205	3/15/2036
2021-FL6 Issuer	Tranche D	44,625		44,625		1M LIBOR + 300	3/15/2036
2021-FL6 Issuer	Tranche E	11,375		11,375		1M LIBOR + 350	3/15/2036
		$	2,437,924	$	1,809,280

________________________

(1) Excludes $300.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line in the consolidated balance sheets as of September 30, 2021.

33

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer and 2019-FL5 Issuer, as of December 31, 2020 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	161,745	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		77,775		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		416,659		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		407,025		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,373		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
		$	1,825,201	$	1,639,227

________________________

(1) Excludes $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line in the consolidated balance sheets as of December 31, 2020.

34

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The below table reflects the total assets and liabilities of the Company's outstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of September 30, 2021 and December 31, 2020 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs 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 VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. The VIE's are non-recourse to the Company.

Assets (dollars in thousands)	September 30, 2021		December 31, 2020
Cash (1)	$	123,940	$	99,025
Commercial mortgage loans, held for investment, net (2)	2,288,676		2,044,956
Accrued interest receivable	5,540		5,626
Total Assets	$	2,418,156	$	2,149,607
Liabilities
Notes payable (3)(4)	$	2,092,498	$	1,892,616
Accrued interest payable	1,220		1,240
Total Liabilities	$	2,093,718	$	1,893,856

________________________

(1) Includes $123.3 million and $98.6 million of cash held by the servicer related to CLO loan payoffs as of September 30, 2021 and December 31, 2020, respectively.

(2) The balance is presented net of allowance for credit losses of $8.7 million and $19.4 million as of September 30, 2021 and December 31, 2020, respectively.

(3) Includes $300.1 million and $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line of the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

(4) The balance is presented net of deferred financing cost and discount of $16.9 million and $13.7 million as of September 30, 2021 and December 31, 2020, respectively.

35

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 8 - Earnings Per Share

The Company uses the two-class method in calculating basic and diluted earnings per share. Net income is allocated between our common stock and other participating securities based on their participation rights. Diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities. The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and September 30, 2020 (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
Numerator	2021		2020		2021		2020
Net income	$	38,495	$	21,497	$	98,651	$	21,911
Less: Preferred stock dividends	4,804		3,475		12,040		11,445
Less: Undistributed earnings allocated to preferred stock	4,201		1,283		10,706		—
Net income attributable to common stockholders (for basic and diluted earnings per share)	$	29,490	$	16,739	$	75,905	$	10,466
Denominator
Weighted-average common shares outstanding for basic earnings per share	44,185,241		44,405,196		44,245,733		44,348,282
Effect of dilutive shares:
Unvested restricted shares	15,323		15,888		15,737		13,457
Weighted-average common shares outstanding for diluted earnings per share	44,200,564		44,421,084		44,261,470		44,361,739
Basic earnings per share	$	0.67	$	0.38	$	1.72	$	0.24
Diluted earnings per share	$	0.67	$	0.38	$	1.71	$	0.24

36

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 9 - Stock Transactions

As of September 30, 2021 and December 31, 2020, the Company had 44,162,657 and 44,510,051 shares of common stock outstanding, respectively, including shares issued pursuant to the Company's distribution reinvestment plan (the "DRIP") and unvested restricted shares.

As of September 30, 2021 and December 31, 2020, the Company had 25,567 and 40,515 shares of Series A Preferred Stock outstanding, respectively and 1,400 shares of Series C Preferred Stock outstanding. Additionally, as of September 30, 2021 the Company had 17,950 shares of Series D Preferred Stock outstanding.

On March 15, 2021, the Company and SBL entered into an agreement pursuant to which SBL agreed to (i) exchange the 14,949 shares of the Series A Preferred Stock it held for an equal amount of Series D Preferred Stock and (ii) purchase from the Company an additional 3,000 newly issued shares of Series D Preferred Stock for $15.0 million (with the proceeds reduced by the accrued and unpaid dividends on the exchanged Series A Preferred Stock). The transaction settled on March 18, 2021.

The following tables present the activity in the Company's Series A Preferred Stock for the period ended September 30, 2021 and September 30, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	40,515	$	202,292
Exchanged for Series D Preferred Stock	(14,950)	(74,748)
Dividends paid in Preferred Stock	2	5
Offering costs	—	(14)
Amortization of offering costs	—	68
Ending Balance, September 30, 2021	25,567	$	127,603
	Shares	Amount
Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	1	4
Offering costs	—	(9)
Amortization of offering costs	—	71
Ending Balance, September 30, 2020	40,515	$	202,280

The following tables present the activity in the Company's Series C Preferred Stock for the period ended September 30, 2021 and September 30, 2020 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	1,400	$	6,962
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	—
Amortization of offering costs	—	7
Ending Balance, September 30, 2021	1,400	$	6,969

	Shares	Amount
Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	(11)
Amortization of offering costs	—	6
Ending Balance, September 30, 2020	1,400	$	6,961

37

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following table presents the activity in the Company's Series D Preferred Stock for the period ended September 30, 2021 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	—	$	—
Issuance of Preferred Stock	17,950	89,748
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(83)
Amortization of offering costs	—	12
Ending Balance, September 30, 2021	17,950	$	89,677

As of September 30, 2020 the Company did not have any Series D Preferred Stock outstanding.

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. Distribution payments are dependent on the availability of funds. The Company's board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.

In April 2020, the Company’s board of directors unanimously approved a transition in the timing of the dividend payments to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly payment and accrual basis. The first quarterly dividend was the second quarter 2020 dividend payable in July 2020. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.

The monthly distributions for the first quarter of 2020 were paid at a daily rate equivalent to $1.44 per annum, per share of common stock. Starting with the second quarter 2020 distribution, the 2020 quarterly distributions were paid at a quarterly rate of $0.275 per share of common stock (equivalent to $1.10 per annum). In September 2021, the Company's board of directors declared the following third quarter 2021 dividends: (i) a quarterly cash dividend of $0.355 per share (equivalent to $1.42 per annum), an increase of $0.08 per share compared to the second quarter of 2021, which was paid in October 2021 to holders of record on September 30, 2021, and (ii) a third quarter dividend of $106.22 per share on the Company’s Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, which was paid in October 2021 to holders of record on September 30, 2021. Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distribution payments are not assured. Dividends on the Company’s preferred stock, to the extent not declared by the board of directors quarterly, will accrue, and dividends may not be paid on the Company's common stock to the extent there are accrued and unpaid dividends on the Preferred Stock. The amount of dividends paid on the Company’s Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are generally in an amount equal to the dividends a holder of such preferred stock would have received if the preferred stock had been converted into common stock in accordance with its terms, except when the amount of common stock dividends are below the threshold stated in the terms of such preferred stock.

The Company distributed $36.5 million of common stock dividends during the nine months ended September 30, 2021, comprised of $31.4 million in cash and $5.1 million in shares of common stock issued under the DRIP. On June 28, 2021, the Company temporarily suspended the DRIP and as a result, DRIP participants, along with all other holders of the Company’s equity securities, received their second and third quarter 2021 Company dividends in cash. The DRIP was also temporarily suspended for the March 2020 dividend due to COVID-19 related valuation volatility, but was reactivated for the second quarter 2020 dividend. The Company distributed $33.3 million of common stock dividends during the nine months ended September 30, 2020, comprised of $27.1 million in cash and $6.2 million in shares of common stock issued under the DRIP.

As of September 30, 2021 and December 31, 2020, the Company had declared but unpaid common stock distributions of $15.7 million and $12.2 million, respectively. Additionally, as of September 30, 2021 and December 31, 2020, the Company had declared but unpaid Series A Preferred Stock distributions of $2.7 million and $3.3 million, respectively and $0.1 million and $0.1 million of declared but unpaid Series C Preferred stock distributions, respectively. Additionally, as of September 30, 2021 the Company had declared but unpaid Series D Preferred Stock distributions of $1.9 million. These amounts are included in Distributions payable on the Company’s consolidated balance sheets.

38

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Share Repurchase Program

The Company's share repurchase program (the “SRP”) enabled stockholders to sell their shares to the Company for an amount equal to the lesser of (i) the Company’s most recent estimated per-share NAV, as approved by the Company’s board of directors from time to time, and (ii) the Company’s book value per share, computed in accordance with GAAP, 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 or in the case of requests for death or disability.

Repurchases pursuant to the SRP, when requested, were made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester were 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 was 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 Company's board of directors 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 were paid at the price, computed as described above on the last day of such fiscal semester. Repurchase requests were honored on a pro rata basis.

The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2021:

	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2020	8,094	4,121,735	$	19.88
January 1 - January 31, 2021(1)	1,355	525,580	17.53
February 1 - February 28, 2021	—	—	N/A
March 1 - March 31, 2021(1)	—	—	N/A
April 1 - April 30, 2021	—	—	N/A
May 1 - May 31, 2021(1)	—	—	N/A
June 1 - June 30, 2021	—	—	N/A
July 1 - July 31, 2021(2)	1,424	123,257	17.88
August 1 - August 31, 2021	—	—	N/A
September 1 - September 30, 2021(2)	—	—	N/A
Cumulative as of September 30, 2021	10,873	4,770,572	$	19.57

________________________

(1) Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2020, including 15,772 and 3,784 shares which for administrative reasons were processed in March 2021 and May 2021, respectively. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,881,556 shares were not fulfilled for the second semester of 2020.

(2) Reflects shares repurchased pursuant to repurchase requests submitted for the first semester of 2021, including 1,776 shares which for administrative reasons were processed in September 2021. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 761 shares were not fulfilled for the first semester of 2021.

39

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 10 - Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of September 30, 2021 and December 31, 2020, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

Funding Expiration	September 30, 2021		December 31, 2020
2021	$	26,989	$	59,692
2022	41,917		91,420
2023	69,702		69,880
2024	265,295		7,700
2025 and beyond	25,501		—
	$	429,404	$	228,692

The borrowers are required to meet or maintain certain metrics in order to qualify for the unfunded commitment amounts.

Litigation and Regulatory Matters

The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows.

Capstead Merger Litigation

Five lawsuits were filed by purported stockholders of Capstead with respect to the Capstead merger. The first suit, styled as Shiva Stein v. Capstead Mortgage Corporation, et al., No. 1:21-cv-7306 (the “Stein Lawsuit”), was filed in the United States District Court for the Southern District of New York on August 31, 2021, and asserts claims against Capstead, members of the Capstead board of directors (the “Capstead Board”) and the Company. The second suit, styled as Matthew Hopkins v. Capstead Mortgage Corporation, et al., No. 1:21-cv-07369 (the “Hopkins Lawsuit”), was filed in the United States District Court for the Southern District of New York on September 1, 2021, and asserts claims against Capstead, members of the Capstead Board, the Company and the Advisor. The third suit, styled as Bryan Harrington v. Capstead Mortgage Corporation, et al., No. 1:21-cv-05080 (the “Harrington Lawsuit”), was filed in the United States District Court for the Eastern District of New York on September 11, 2021, and asserts claims against Capstead and members of the Capstead Board. The fourth suit, styled as Randy Gill v. Capstead Mortgage Corporation, et al., No. 1:21-cv-07973 (the “Gill Lawsuit”), was filed in the United States District Court for the Southern District of New York on September 24, 2021, and asserts claims against Capstead and members of the Capstead Board. The fifth suit, styled as Jordan Wilson v. Capstead Mortgage Corporation, et al., No. 1:21-cv-08147-UA (the “Wilson Lawsuit”), was filed in the United States District Court for the Southern District of New York on October 1, 2021, and asserts claims against Capstead and members of the Capstead Board. Capstead also received demand letters from two purported stockholders, Brett Braafhart and Angelo Fisichella, threatening to assert claims against Capstead and members of the Capstead Board (such demand letters, together with the Stein Lawsuit, the Hopkins Lawsuit, the Harrington Lawsuit, the Gill Lawsuit and the Wilson Lawsuit, the “Lawsuits”).

Each of the Lawsuits alleges that certain of the disclosures in the Capstead proxy statement related to the merger were deficient, and sought preliminary and injunctive relief. While Capstead believed that the disclosures set forth in the proxy statement complied fully with applicable law, in order to address certain disclosure claims in the Lawsuits, minimize the cost, risk and uncertainty inherent in litigation, avoid nuisance and preclude any efforts to delay the completion of the merger, Capstead voluntarily supplemented the proxy statement with certain supplemental disclosures. The Company, as successor to Capstead in the merger, believes the claims asserted in the Lawsuits are without merit and expressly denies all allegations in the Lawsuits, including that any additional disclosure was or is required.

40

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 11 - Related Party Transactions and Arrangements

Advisory Agreement Fees and Reimbursements

Pursuant to the Advisory Agreement, the Company is required to make the following payments and reimbursements to the Advisor:

•The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company’s executive officers.

•The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' 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 (as defined in the Advisory Agreement) exceeds 6.0% per annum, our 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 our Advisor exceed 10.0% of the aggregate total return for such year.

•The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company‘s behalf 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.

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended September 30, 2021 and 2020 and the associated payable as of September 30, 2021 and December 31, 2020 (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2021		2020		2021		2020		September 30, 2021		December 31, 2020
Acquisition expenses (1)	$	690	$	166	$	1,012	$	483	$	—	$	—
Administrative services expenses	2,980		3,128		9,532		10,180		2,980		2,940
Asset management and subordinated performance fee	8,265		3,749		19,682		11,399		13,025		4,773
Other related party expenses (2)(3)	146		14		182		685		1,135		1,812
Total related party fees and reimbursements	$	12,081	$	7,057	$	30,408	$	22,747	$	17,140	$	9,525

________________________

(1) Total acquisition expenses paid during the three and nine months ended September 30, 2021 were $2.9 million and $7.5 million respectively, of which $2.2 million and $6.5 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets. Total acquisition expenses paid during the three and nine months ended September 30, 2020 were $2.2 million and $5.0 million respectively, of which $2.0 million and $4.5 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets.

(2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated statements of operations.

(3) As of September 30, 2021 and December 31, 2020 the related party payables include $1.1 million and $1.8 million of payments made by the Advisor to third party vendors on behalf of the Company.

The payables as of September 30, 2021 and December 31, 2020 in the table above are included in Due to affiliates on the Company's consolidated balance sheets.

Other Transactions

Pursuant to a lending and security agreement with SBL, which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million and $1.2 million in interest expense on the lending agreement with SBL for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021 there was $60.0 million outstanding under the lending agreement.

41

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

SBL also holds 17,950 shares of the Company's outstanding shares of Series D Preferred Stock of which, 14,950 shares were acquired in exchange for an equivalent number of shares of Series A Preferred Stock in March 2021. SBL also acquired an additional 3,000 shares of Series D Preferred Stock at the liquidation preference of $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock) in such transaction.

In August 2021 the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the "Jeffersonville JV") to acquire a $139.5 million triple net lease property in Jeffersonville, GA. The Company has a 79% interest in the Jeffersonville JV, while the affiliate has a 21% interest. The Company invested a total of $109.8 million, made up of $88.7 million in debt and $21.1 million in equity, representing 79% of the ownership interest in the Jeffersonville JV. The affiliate made up the remaining $29.8 million composed of a $24.0 million mortgage note payable and $5.7 million in equity. The Company has control of Jeffersonville JV with 79% ownership and, therefore, consolidates Jeffersonville JV on its consolidated balance sheet. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).

Note 12 - 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.

Financial Instruments Measured at Fair Value on a Recurring Basis

CMBS, recorded in real estate securities, available for sale, measured at fair value on the consolidated balance sheets are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities. 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 third party pricing for determining the fair value of each CMBS investments, resulting in a Level II classification.

Commercial mortgage loans, held for sale, measured at fair value in the Company's TRS are initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. Commercial mortgage loans, held for sale, measured at fair value that are originated in the last month of the reporting period are held and marked to the transaction proceeds. The Company classified the commercial mortgage loans, held for sale, measured at fair value as Level III.

42

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Other real estate investments, measured at fair value on the consolidated balance sheets are valued using unobservable inputs. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments, including preferred equity investments, held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. The Company classified the other real estate investments, measured at fair value as Level III.

The fair value for Treasury note futures is derived using market prices. Treasury note futures trade on the Chicago Mercantile Exchange (“CME”). The instruments are a variety of recently issued 10-year U.S. Treasury notes. The future contracts are liquid and are centrally cleared through the CME. Treasury note futures are generally categorized in Level I of the fair value hierarchy.

The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. Valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy. The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy.

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 or liabilities. 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 material transfers between levels within the fair value hierarchy for the period ended September 30, 2021 and December 31, 2020.

43

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(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 September 30, 2021 and December 31, 2020 (dollars in thousands):

	Total		Level I		Level II		Level III
September 30, 2021
Assets, at fair value
Commercial mortgage loans, held for sale, measured at fair value	$	99	$	—	$	—	$	99
Other real estate investments, measured at fair value	2,547		—		—		2,547
Interest rate swaps	—		—		—		—
Total assets, at fair value	$	2,646	$	—	$	—	$	2,646
Liabilities, at fair value
Credit default swaps	$	—	$	—	$	—	$	—
Treasury note futures	—		—		—		—
Total liabilities, at fair value	$	—	$	—	$	—	$	—
December 31, 2020
Assets, at fair value
Real estate securities, available for sale, measured at fair value	$	171,136	$	—	$	171,136	$	—
Commercial mortgage loans, held for sale, measured at fair value	67,649		—		—		67,649
Other real estate investments, measured at fair value	2,522		—		—		2,522
Interest rate swaps	25		—		25		—
Total assets, at fair value	$	241,332	$	—	$	171,161	$	70,171
Liabilities, at fair value
Credit default swaps	$	297	$	—	$	297	$	—
Treasury note futures	106		106		—		—
Total liabilities, at fair value	$	403	$	106	$	297	$	—

44

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category. As a result, the unrealized gains and losses for assets and liabilities within the Level III category may include changes in fair value that were attributable to both observable and unobservable inputs. The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of September 30, 2021 and December 31, 2020 (dollars in thousands):

Asset Category	Fair Value		Valuation Methodologies	Unobservable Inputs (1)	Weighted Average (2)	Range
September 30, 2021
Commercial mortgage loans, held for sale, measured at fair value	$	99	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,547		Discounted Cash Flow	Yield	11.4%	10.4% - 12.4%
December 31, 2020
Commercial mortgage loans, held for sale, measured at fair value	$	67,649	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,522		Discounted Cash Flow	Yield	13.2%	12.2% - 14.2%

________________________

(1) In determining certain inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments.

(2) Inputs were weighted based on the fair value of the investments included in the range.

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

45

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 for which the Company has used Level III inputs to determine fair value (dollars in thousands):

	September 30, 2021
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2021	$	67,649	$	2,522
Transfers into Level III (2)	—		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loans, held for sale	22,211		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	—		27
Net accretion	—		(2)
Purchases	321,278		—
Sales / paydowns	(411,039)		—
Transfers out of Level III (2)	—		—
Ending Balance, September 30, 2021	$	99	$	2,547
	December 31, 2020
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2020	$	112,562	$	2,557
Transfers into Level III (2)	23,625		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loans, held for sale	15,931		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	(75)		(32)
Net accretion	—		(3)
Purchases(1)	267,552		—
Sales / paydowns (1)	(328,321)		—
Transfers out of Level III (2)	(23,625)		—
Ending Balance, December 31, 2020	$	67,649	$	2,522

(1) Excluded from Purchases and Sales/paydowns are $679.1 million and $682.0 million, respectively, of loans that collateralize a CMBS investment required to be consolidated in connection with the Company's retention of the B tranche during the year ended December 31, 2020. Upon disposition of the B tranche during the year ended December 31, 2020, the Company recognized a gain of $2.8 million that is recorded in Realized gain/loss on sale of real estate securities on the consolidated statements of operations.

(2) Transfers in and transfers out include transfers between Commercial mortgage loans, held for sale and Commercial mortgage loans, held for investment.

46

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(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, held for investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2021 and December 31, 2020 (dollars in thousands):

		Level	Carrying Amount (1)		Fair Value
September 30, 2021
Commercial mortgage loans, held for investment (1)	Asset	III	$	3,263,145	$	3,265,960
Collateralized loan obligations	Liability	III	1,792,353		1,811,509
Mortgage note payable	Liability	III	23,998		23,998
Other financing and loan participation - commercial mortgage loans	Liability	III	37,434		37,434
Unsecured debt	Liability	III	60,000		60,000
December 31, 2020
Commercial mortgage loans, held for investment (1)	Asset	III	$	2,714,734	$	2,724,039
Collateralized loan obligations	Liability	III	1,625,498		1,606,478
Mortgage note payable	Liability	III	29,167		29,167
Other financing and loan participation - commercial mortgage loans	Liability	III	31,379		31,379

________________________

(1) The carrying value is gross of $15.5 million and $20.9 million of allowance for credit losses as of September 30, 2021 and December 31, 2020, respectively.

The fair value of the commercial mortgage loans, held for investment is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company estimates the fair value of the collateralized loan obligations using external broker quotes. The fair value of the other financing and loan participation-commercial mortgage loans is generally estimated using a discounted cash flow analysis. At September 30, 2021, the Mortgage note payable and Unsecured debt was recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.

47

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 13 - Derivative Instruments

The Company uses derivative instruments primarily to manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk.

As of September 30, 2021, the net premiums received on derivative instrument assets were $4.8 million.

The following derivative instruments were outstanding as of September 30, 2021 and December 31, 2020 (dollars in thousands):

			Fair Value
Contract type	Notional		Assets		Liabilities
September 30, 2021
Credit default swaps	$	—	$	—	$	—
Interest rate swaps	17,335		—		—
Treasury note futures	—		—		—
Total	$	17,335	$	—	$	—
December 31, 2020
Credit default swaps	$	46,000	$	—	$	297
Interest rate swaps	32,517		25		—
Treasury note futures	43,500		—		106
Total	$	122,017	$	25	$	403

The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the three and nine months ended September 30, 2021 and September 30, 2020:

	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss		Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	(111)	$	32	$	(289)	$	675
Interest rate swaps	(1,282)		1,692		22		414
Treasury note futures	(35)		145		(107)		(1,479)
Options	—		33		—		33
Total	$	(1,428)	$	1,902	$	(374)	$	(357)
	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss		Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	101	$	206	$	(433)	$	269
Interest rate swaps	(4,411)		4,516		323		7,462
Treasury note futures	—		—		735		5,284
Options	—		—		—		35
Total	$	(4,310)	$	4,722	$	625	$	13,050

48

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 14 - 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 derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Amount of Assets Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
September 30, 2021
Derivative instruments, at fair value	$	—	$	—	$	—		$	—	$	—	$	—
December 31, 2020
Derivative instruments, at fair value	$	25	$	—	$	25		$	—	$	—	$	25

							Gross Amounts Not Offset on the Balance Sheet
Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
September 30, 2021
Repurchase agreements - commercial mortgage loans	$	550,156	$	—	$	550,156		$	858,613	$	5,015	$	—
Repurchase agreements - real estate securities	46,531		—		46,531			60,267		—		—
Derivative instruments, at fair value	—		—		—			—		3,886		—
December 31, 2020
Repurchase agreements - commercial mortgage loans	$	276,340	$	—	$	276,340		$	496,030	$	5,016	$	—
Repurchase agreements - real estate securities	186,828		—		186,828			245,956		1,146		—
Derivative instruments, at fair value	403		—		403			—		3,435		—

________________________

(1) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets.

49

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 15 - Segment Reporting

The Company conducts its business through the following reporting segments:

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

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

•The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

The following table represents the Company's operations by segment for the three and nine months ended September 30, 2021 and September 30, 2020 (dollars in thousands):

Three Months Ended September 30, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	47,747	$	47,166	$	—	$	581	$	—
Revenue from Real Estate Owned	1,015		—		—		—		1,015
Interest expense	11,988		11,263		148		232		345
Net income	38,495		25,056		(148)		3,984		9,603
Total assets as of September 30, 2021	3,635,478		3,436,065		814		57,437		141,162
Three Months Ended September 30, 2020
Interest income	$	44,414	$	39,944	$	3,996	$	474	$	—
Revenue from Real Estate Owned	1,017		—		—		—		1,017
Interest expense	15,113		10,194		3,393		494		1,032
Net income	21,497		25,158		(3,797)		(162)		298
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519
Nine Months Ended September 30, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	138,969	$	135,945	$	461	$	2,563	$	—
Revenue from Real Estate Owned	2,447		—		—		—		2,447
Interest expense	35,994		34,887		720		812		1,014
Net income	98,651		74,745		(196)		13,434		10,667
Total assets as of September 30, 2021	3,635,478		3,436,065		814		57,437		141,162
Nine Months Ended September 30, 2020
Interest income	$	135,509	$	123,284	$	9,870	$	2,355	$	—
Revenue from Real Estate Owned	3,474		—		—		—		3,474
Interest expense	54,740		43,735		7,670		1,735		1,600
Net income	21,911		40,273		(7,947)		(8,290)		(2,125)
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519

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 originated during the year as the denominator and commercial mortgage loans, held for investment, net of allowance and commercial mortgage loans, held for sale, measured at fair value as numerator.

50

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Note 16 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q.

Reverse Stock Split and Stock Dividend

In accordance with the terms of the Merger Agreement (as defined below), on October 6, 2021, the Company filed Articles of Amendment to the Company’s Charter (the “Articles of Amendment”) with the State Department of Assessments and Taxation of Maryland (the “SDAT”) to effect (a) a Company name change and (b) a one-for-ten reverse stock split (the “Reverse Stock Split”). Pursuant to the Articles of Amendment, effective as of 9:00 a.m. eastern time on October 12, 2021, the Company’s name changed to “Franklin BSP Realty Trust, Inc.,” and effective as of the close of business on October 12, 2021, each outstanding share of the Company’s Common Stock, automatically combined into 1/10th of a share of Common Stock. Fractional shares that were created as a result of the Reverse Stock Split remained outstanding. As a result of the Reverse Stock Split, the number of outstanding shares of Common Stock of the Company as of the date of the Reverse Stock Split were reduced to approximately 4.5 million shares.

In addition, also on October 6, 2021 the Company filed Articles Supplementary (the “Articles Supplementary”) to the Company’s charter with the SDAT, with an effective date of October 12, 2021. The Articles Supplementary (a) reclassified 50,000,000 shares of authorized but unissued shares of Common Stock as preferred stock, $0.01 par value per share, as a result of which the Company is authorized to issue 900,000,000 shares of Common Stock and 100,000,000 shares of preferred stock under the charter, and (b) designated and classified 40,000,000 shares of preferred stock as a new series of Series F Preferred Stock, with the rights, preferences and obligations set forth in the Articles Supplementary.

Also in accordance with the terms of the Merger Agreement, on October 4, 2021, the Board declared a stock dividend (the “Stock Dividend”) on the outstanding shares of Common Stock, payable at a rate of nine shares of Series F Preferred Stock for each share of Common Stock issued and outstanding following the Reverse Stock Split on October 12, 2021. The record date used to determine the list of holders of Common Stock eligible to receive the Stock Dividend (following the Reverse Stock Split) was set by the Board as October 7, 2021. As a result of the Reverse Stock Split, holders of Common Stock collectively received 39,733,298 shares of Series F Preferred Stock.

The Reverse Stock Split and Stock Dividend resulted in each stockholder of Common Stock having the same economic value of equity securities in the Company as such holder did prior to the Reverse Stock Split and Stock Dividend, except that each such holder now has 10% of their holdings in Common Stock and 90% of their holdings in Series F Preferred Stock. Each share (or fractional share) of Series F Preferred Stock will automatically convert into one share of Common Stock (or equivalent fractional share, as applicable) on April 19, 2022.

Interim Common Stock Dividend

On October 11, 2021, the Company’s board of directors declared an interim fourth quarter of 2021 dividend on the Common Stock and Series F Preferred Stock of $0.07 per share. The board of directors also declared an interim fourth quarter of 2021 dividend of $20.94 per share on the Company’s Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock convertible preferred stock. The dividends were paid on or about October 18, 2021 to stockholders of record as of October 13, 2021.

Merger with Capstead Mortgage Corporation

On October 19, 2021 (the “Closing Date”), the Company consummated the transactions contemplated by that certain Agreement and Plan of Merger, dated as of July 25, 2021, as amended pursuant to that certain First Amendment to Agreement and Plan of Merger, dated as of September 22, 2021 (as amended, the “Merger Agreement”), by and among the Company, Rodeo Sub I, LLC (“Merger Sub”), Capstead Mortgage Corporation (“Capstead”) and, solely for the purposes set forth therein, the Advisor. Pursuant to the Merger Agreement, on the Closing Date, Capstead merged with and into Merger Sub, with Merger Sub continuing as the surviving company (the “Merger”).

At the effective time of the merger (the "Effective Time"), each outstanding share of common stock, par value $0.01 per share, of Capstead (the “Capstead Common Stock”) (other than shares held by the Company or Merger Sub or by any wholly owned subsidiary of the Company or Merger Sub or any wholly owned subsidiary of Capstead immediately prior to the Effective Time, which were automatically canceled and retired and ceased to exist) was cancelled and converted into the right to receive:

•from the Company, (A) 0.3288 newly-issued shares of the Company's Common Stock (the “Per Share Stock Consideration”); and (B) a cash amount equal to $0.21 per share (the “Per Share Cash Consideration” and together with the Per Share Stock Consideration, the “Per Common Share FBRT Consideration”); and

51

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

•from the Advisor, a cash amount equal to $0.73 per share (the “Advisor Cash Consideration” and together with the Per Common Share FBRT Consideration, the “Total Per Common Share Consideration”).

No fractional shares of Common Stock were issued in the Merger, and the value of any fractional interests to which a former holder of Capstead Common Stock is otherwise entitled will be paid in cash.

Additionally, at the Effective Time, (i) each outstanding share of Capstead’s 7.50% Series E Cumulative Redeemable Preferred Stock, $0.10 par value per share (“Capstead Preferred Stock”), was cancelled and converted into the right to receive one newly-issued share of the Company's Series E Preferred Stock, which has the rights, preferences, and privileges and voting powers materially the same as those of the Capstead Preferred Stock.The Company filed Articles Supplementary to the Company’s charter with the SDAT, with an effective date of October 19, 2021, which designated and classified 10,329,039 shares of preferred stock as a new series of Series E Preferred Stock, with the rights, preferences and obligations set forth in the Articles Supplementary.

Furthermore, effective immediately prior to the Effective Time, all outstanding restricted stock under Capstead’s Amended and Restated 2014 Flexible Incentive Plan (the “Capstead Plan”) automatically became fully vested and non-forfeitable, and all shares of Capstead Common Stock represented thereby became eligible to receive the Total Per Common Share Consideration. Also effective immediately prior to the Effective Time, all outstanding awards of performance units under the Capstead Plan automatically became earned and vested at the conversion rate of one share of Capstead Common Stock for each outstanding performance unit, and all shares of Capstead Common Stock represented thereby became eligible to receive the Total Per Common Share Consideration. Each outstanding dividend equivalent right under the Capstead Plan was automatically cancelled as of the Effective Time; provided that any accrued amounts that were not paid as of immediately prior to the Effective Time were paid to the holders thereof at the Effective Time (or will be as soon as practicable thereafter but in no event later than the first payroll date following the Effective Time).

The issuances of shares of Common Stock and Series E Preferred Stock in connection with the Merger were registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s registration statement on Form S-4 (Registration No. 333-258947), which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on September 3, 2021 (as amended or supplemented, the “S-4 Registration Statement”). The proxy statement/prospectus included in the S-4 Registration Statement contains additional information regarding the Merger.

Per the terms of the transactions described in the Merger Agreement, approximately 32.1 million shares of Common Stock were issued in connection with the Merger to former Capstead common stockholders, and the Company paid $20.5 million in cash consideration to former Capstead common stockholders. In addition, the Company issued 10.3 million shares of Series E Preferred Stock to former holders of Capstead Preferred Stock. In addition, both the Company’s Common Stock and Series E Preferred Stock were listed on the New York Stock Exchange (“NYSE”) on October 19, 2021, under the ticker symbols “FBRT” and “FBRT PRE,” respectively.

In addition, in connection with the listing of the Common Stock on the NYSE, on October 19, 2021, each outstanding share of the Company’s Series A Preferred Stock converted into 299.2 shares of Common Stock, pursuant to the terms of the Series A Preferred Stock, resulting in the issuance of 7,649,632 shares of Common Stock. Each such holder remains subject to the lock-up agreement signed with the Advisor at the time of the investment in the Series A Preferred Stock, which will restrict sales of the Common Stock received upon conversion until April 17, 2022.

52

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

7.50% Series E cumulative redeemable preferred stock

At the closing of the Capstead merger on October 19, 2021, the Company issued one share of the Company’s 7.50% Series E cumulative redeemable preferred stock (“Series E Preferred Stock”) for each outstanding share of Capstead’s 7.50% Series E preferred stock.

Maturity

The Series E Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption. Shares of the Series E Preferred Stock will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase them or they become convertible and are converted as described below under “—Change of Control Conversion Right.” The Company is not required to set apart for payment the funds to redeem the Series E Preferred Stock.

Ranking

The Series E Preferred Stock ranks, with respect to rights to the payment of dividends and the distribution of assets upon its liquidation, dissolution or winding up:

1.senior to all classes or series of our common stock, of Series F Preferred Stock and to all other equity securities issued by the Company other than equity securities referred to in clauses (2) and (3) below;

2.on a parity with all Series C Preferred Stock, Series D Preferred Stock and all other equity securities issued by the Company with terms specifically providing that those equity securities rank on a parity with the Series E Preferred Stock, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up;

3. junior to all equity securities issued by the Company with terms specifically providing that those equity securities rank senior to the Series E Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon its liquidation, dissolution or winding up (please see the section entitled “—Limited Voting Rights” below); and

4.effectively junior to all of the Company’s existing and future indebtedness (including indebtedness convertible to its common stock or preferred stock, if any) and to the indebtedness of its existing subsidiaries and any future subsidiaries.

Dividends

Holders of shares of the Series E Preferred Stock are entitled to receive, when, as and if authorized by our board of directors and declared by the Company, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 7.50% of the $25.00 per share liquidation preference per annum (equivalent to $1.875 per annum per share). Dividends on the Series E Preferred Stock shall accumulate daily and be cumulative from, and including, October 15, 2021 and shall be payable quarterly in arrears on the 15th day of each January, April, July and October (each, a “dividend payment date”) with respect to the immediately preceding dividend period; provided that if any dividend payment date is not a business day, as defined in the Articles Supplementary for the Series E Preferred Stock, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day and no interest, additional dividends or other sums will accumulate on the amount so payable for the period from and after that dividend payment date to that next succeeding business day. Any dividend payable on the Series E Preferred Stock, including dividends payable for any partial dividend period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in our stock records for the Series E Preferred Stock at the close of business on the applicable record date, which shall be the last day of the calendar quarter, whether or not a business day, immediately preceding the applicable dividend payment date (each, a “dividend record date”).

No dividends on shares of the Series E Preferred Stock shall be authorized by our board of directors or paid or set apart for payment by the Company at any time when the terms and provisions of any agreement of the Company, including any agreement relating to its indebtedness, prohibit the authorization, payment or setting apart for payment thereof or provide that the authorization, payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment shall be restricted or prohibited by law.

Notwithstanding the foregoing, dividends on the Series E Preferred Stock will accumulate whether or not the Company has earnings, whether or not there are funds legally available for the payment of those dividends and whether or not those dividends are declared. No interest, or sum in lieu of interest, will be payable in respect of any dividend payment or payments on the Series E Preferred Stock which may be in arrears, and holders of the Series E Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series E Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to those shares.

53

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Unless full cumulative dividends on the Series E Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods, no dividends (other than in shares of common stock or in shares of any series of preferred stock that the Company may issue ranking junior to the Series E Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set apart for payment upon shares of the Company’s common stock or preferred stock that the Company may issue ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation. Nor shall any other distribution be declared or made upon shares of the Company’s common stock or preferred stock that the Company may issue ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation. In addition, any shares of the Company’s common stock or preferred stock that the Company may issue ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation shall not be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Company (except by conversion into or exchange for the Company’s other capital stock that it may issue ranking junior to the Series E Preferred Stock as to dividends and upon liquidation and except for transfers made pursuant to the provisions of our Articles of Amendment and Restatement (the “Charter”) relating to restrictions on transfer and ownership of our capital stock). The foregoing shall not, however, prevent the purchase or acquisition by the Company of shares of any class or series of stock pursuant to the provision of Article V of the Charter relating to restrictions on transfer and ownership or pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of the Series E Preferred Stock and any preferred stock that the Company may issue ranking on parity with the Series E Preferred Stock as to dividends or upon liquidation.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series E Preferred Stock and the shares of any other series of preferred stock that the Company may issue ranking on a parity as to dividends with the Series E preferred stock, all dividends declared upon the Series E Preferred Stock and such other series of preferred stock shall be declared pro rata so that the amount of dividends declared per share of the Series E Preferred Stock and such other series of preferred stock shall in all cases bear to each other the same ratio that accumulated dividends per share on the Series E Preferred Stock and such other series of preferred stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such preferred stock does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series E Preferred Stock which may be in arrears.

Liquidation Preference

In the event of the Company’s voluntary or involuntary liquidation, dissolution or winding up, the holders of shares Series E Preferred Stock will be entitled to be paid out of the assets the Company has legally available for distribution to its stockholders, subject to the preferential rights of the holders of any class or series of its stock the Company may issue ranking senior to the Series E Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends to, but not including, the date of payment, before any distribution of assets is made to holders of the Common Stock or any other class or series of its stock the Company may issue that ranks junior to the Series E Preferred Stock as to liquidation rights.

In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of the Series E Preferred Stock and the corresponding amounts payable on all shares of other classes or series of the Company’s capital stock that the Company may issue ranking on a parity with the Series E Preferred Stock in the distribution of assets, then the holders of the Series E Preferred Stock and all other such classes or series of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Holders of the Series E Preferred Stock will be entitled to written notice of any such liquidation no fewer than 30 days and no more than 60 days prior to the payment date. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of the Series E Preferred Stock will have no right or claim to any of the Company’s remaining assets. The consolidation or merger of the Company with or into any other corporation, trust or entity or of any other entity with or into the Company, or the sale, lease, transfer or conveyance of all or substantially all of the Company’s property or business, shall not be deemed to constitute a liquidation, dissolution or winding up of the Company (although such events may give rise to the special optional redemption and contingent conversion rights described below).

In determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition of shares of stock of the Company or otherwise, is permitted under Maryland law, amounts that would be needed, if the Company were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of holders of shares of the Series E Preferred Stock shall not be added to our total liabilities.

54

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Redemption

As s provided in our Charter, the Company may purchase or redeem shares of the Series E Preferred Stock in order to preserve its qualification as a REIT. Please see the section entitled “Restrictions on Ownership and Transfer.”

Optional Redemption. The Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series E Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption.

Special Optional Redemption Upon Change of Control. Upon the occurrence of a Change of Control, the Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series E Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. If, prior to the Change of Control Conversion Date, the Company has provided notice of its election to redeem some or all of the shares of Series E Preferred Stock (whether pursuant to our optional redemption right described above under “—Optional Redemption” or this special optional redemption right), the holders of Series E Preferred Stock will not have the Change of Control Conversion Right (as defined below) described below under “—Change of Control Conversion Right” with respect to the shares called for redemption.

A “Change of Control” is deemed to occur when, after the original issuance of the Series E Preferred Stock, the following have occurred and are continuing:

•the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of the Company’s stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of the Company’s directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

•following the closing of any transaction referred to in the bullet point above, neither the Company nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the NYSE, the NYSE American or the Nasdaq, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or Nasdaq.

Redemption Procedures. In the event the Company elects to redeem Series E Preferred Stock, the notice of redemption will be mailed to each holder of record of the Series E Preferred Stock called for redemption at such holder’s address as it appears on our stock transfer records and will state the following:

•the redemption date;

•the number of shares of the Series E Preferred Stock to be redeemed;

•the redemption price;

•the place or places where certificates (if any) for the Series E Preferred Stock are to be surrendered for payment of the redemption price;

•that dividends on the shares to be redeemed will cease to accumulate on the redemption date;

•whether such redemption is being made pursuant to the provisions described above under “—Optional Redemption” or “—Special Optional Redemption Upon Change of Control”;

•if applicable, that such redemption is being made in connection with a Change of Control and, in that case, a brief description of the transaction or transactions constituting such Change of Control; and

•if such redemption is being made in connection with a Change of Control, that the holders of the shares of the Series E Preferred Stock being so called for redemption will not be able to tender such shares of the Series E Preferred Stock for conversion in connection with the Change of Control and that each share of the Series E Preferred Stock tendered for conversion that is called, prior to the Change of Control Conversion Date (as defined below), for redemption will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date.

55

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

If less than all of the Series E Preferred Stock held by any holder is to be redeemed, the notice mailed to such holder shall also specify the number of shares of the Series E Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of the Series E Preferred Stock, except as to the holder to whom notice was defective or not given.

Holders of shares of the Series E Preferred Stock to be redeemed shall surrender the Series E Preferred Stock at the place designated in the notice of redemption and shall be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender. If notice of redemption of any shares of the Series E Preferred Stock has been given and if the Company has irrevocably set apart for payment the funds necessary for redemption in trust for the benefit of the holders of the shares of the Series E Preferred Stock so called for redemption, then from and after the redemption date (unless default shall be made by the Company in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accumulate on those shares of the Series E Preferred Stock, those shares of the Series E Preferred Stock shall no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption. If any redemption date is not a business day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next business day and no interest, additional dividends or other sums will accumulate on the amount payable for the period from and after that redemption date to that next business day. If less than all of the outstanding Series E Preferred Stock is to be redeemed, the Series E Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method the Company determines but that will not result in the automatic transfer of any shares of the Series E Preferred Stock to a trust as described under “—Restrictions on Ownership and Transfer.”

Immediately prior to any redemption of the Series E Preferred Stock, the Company shall pay, in cash, any accumulated and unpaid dividends to, but not including, the redemption date, unless a redemption date falls after a dividend record date and prior to the corresponding dividend payment date, in which case each holder of the Series E Preferred Stock at the close of business on such dividend record date shall be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date. Except as provided above, the Company will make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of the Series E Preferred Stock to be redeemed.

Unless full cumulative dividends on all shares of the Series E Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no shares of the Series E Preferred Stock shall be redeemed unless all outstanding shares of the Series E Preferred Stock are simultaneously redeemed, and the Company shall not purchase or otherwise acquire directly or indirectly any shares of the Series E Preferred Stock (except by exchanging it for our capital stock ranking junior to the Series E Preferred Stock as to dividends and upon liquidation); provided, however, that the foregoing shall not prevent the purchase or acquisition by the Company of shares of the Series E Preferred Stock to preserve its REIT status or pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of the Series E Preferred Stock.

Subject to applicable law, the Company may purchase shares of the Series E Preferred Stock in the open market, by tender or by private agreement. Any shares of the Series E Preferred Stock that the Company acquires may be retired and re-classified as authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be reissued as any class or series of preferred stock.

Change of Control Conversion Right

Upon the occurrence of a Change of Control, each holder of the Series E Preferred Stock will have the right (unless, prior to the Change of Control Conversion Date, the Company has provided notice of its election to redeem some or all of the shares of the Series E Preferred Stock held by such holder as described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption Upon Change of Control,” in which case such holder will have the right only with respect to shares of the Series E Preferred Stock that are not called for redemption) to convert some or all of the shares of the Series E Preferred Stock held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of shares of the Company’s common stock per share of the Series E Preferred Stock (the “common stock Conversion Consideration”) equal to the lesser of:

56

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference per share of the Series E Preferred Stock plus the amount of any accumulated and unpaid dividends thereon to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a dividend record date and prior to the corresponding dividend payment date for the Series E Preferred Stock, in which case no additional amount for such accumulated and unpaid dividends will be included in this sum) by (ii) the Common Stock Price, as defined below (such quotient, the “Conversion Rate”); and

•a number to be determined as of the effective time of the Merger (the “Share Cap”), equal to (A) 3.81388 multiplied by (B) a fraction in which (i) the numerator is equal to the sum of (x) the Per Share Cash Consideration, (y) Advisor Cash Consideration per share and (z) the product of (1) the Per Share Stock Consideration and (2) the most recently reported GAAP book value per share of common stock prior to the Closing, and (ii) the denominator is the most recently reported GAAP book value per share of common stock prior to the Closing, subject to certain adjustments as described below.

Except as set forth in the Articles Supplementary for the Series E Preferred Stock and as otherwise required by law, the persons who are the holders of record of shares of the Series E Preferred Stock at the close of business on a dividend record date will be entitled to receive the dividend payable on the corresponding dividend payment date notwithstanding the conversion of those shares after such dividend record date and on or prior to such dividend payment date and, in such case, the full amount of such dividend shall be paid on such dividend payment date to the persons who were the holders of record at the close of business on such dividend record date. Except as provided above, the Company will make no allowance for unpaid dividends that are not in arrears on the shares of the Series E Preferred Stock to be converted.

The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a distribution of the Company’s common stock to existing holders of its common stock), subdivisions or combinations (in each case, a “Share Split”) with respect to our common stock as follows: the adjusted Share Cap as the result of a Share Split will be the number of shares of the Company’s common stock that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of shares of the Company’s common stock outstanding immediately after giving effect to such Share Split and the denominator of which is the number of shares of the Company’s common stock outstanding immediately prior to such Share Split.

For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate number of shares of the Company’s common stock (or equivalent Alternative Conversion Consideration (as defined below), as applicable) issuable or deliverable, as applicable, in connection with the exercise of the Change of Control Conversion Right will not exceed the product of the Share Cap times the aggregate number of shares of the Series E Preferred Stock issued and outstanding at the Change of Control Conversion Date (or equivalent Alternative Conversion Consideration, as applicable) (the “Exchange Cap”). The Exchange Cap is subject to pro rata adjustments for any Share Splits on the same basis as the corresponding adjustment to the Share Cap.

In the case of a Change of Control pursuant to which our common stock is or will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of the Series E Preferred Stock will receive upon conversion of such shares of the Series E Preferred Stock, the kind and amount of Alternative Form Consideration which such holder would have owned or been entitled to receive upon the Change of Control had such holder held a number of shares of the Company’s common stock equal to the common stock Conversion Consideration immediately prior to the effective time of the Change of Control (the “Alternative Conversion Consideration”); the common stock Conversion Consideration or the Alternative Conversion Consideration, whichever shall be applicable to a Change of Control, is referred to as the “Conversion Consideration”).

If the holders of the Company’s common stock have the opportunity to elect the form of consideration to be received in the Change of Control, the consideration in respect of such Change of Control will be deemed to be the kind and amount of consideration actually received by holders of a majority of the outstanding shares of the Company’s common stock that made or voted for such an election (if electing between two types of consideration) or holders of a plurality of the outstanding shares of the Company’s common stock that made or voted for such an election (if electing between more than two types of consideration), as the case may be, and will be subject to any limitations to which all holders of the Company’s common stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in such Change of Control.

57

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The Company will not issue fractional shares of its common stock upon the conversion of the Series E Preferred Stock in connection with a Change of Control. Instead, the Company will make a cash payment equal to the value of such fractional shares based upon the Common Stock Price used in determining the common stock Conversion Consideration for such Change of Control.

Within 15 days following the occurrence of a Change of Control, provided that the Company has not then exercised its right to redeem all shares of the Series E Preferred Stock pursuant to the redemption provisions described above, the Company will provide to holders of the Series E Preferred Stock a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right. This notice will state the following:

•the events constituting the Change of Control;

•the date of the Change of Control;

•the last date on which the holders of the Series E Preferred Stock may exercise their Change of Control Conversion Right;

•the method and period for calculating the Common Stock Price;

•the Change of Control Conversion Date;

•that if, prior to the Change of Control Conversion Date, the Company has provided notice of its election to redeem all or any shares of the Series E Preferred Stock, holders will not be able to convert the shares of the Series E Preferred Stock called for redemption and such shares will be redeemed on the related redemption date, even if such shares have already been tendered for conversion pursuant to the Change of Control Conversion Right;

•if applicable, the type and amount of Alternative Conversion Consideration entitled to be received per share of the Series E Preferred Stock;

•the name and address of the paying agent, transfer agent and conversion agent for the Series E Preferred Stock;

•the procedures that the holders of the Series E Preferred Stock must follow to exercise the Change of Control Conversion Right (including procedures for surrendering shares for conversion through the facilities of a Depositary (as defined below)), including the form of conversion notice to be delivered by such holders as described below; and

•the last date on which holders of the Series E Preferred Stock may withdraw shares surrendered for conversion and the procedures that such holders must follow to effect such a withdrawal.

Under such circumstances, the Company also will issue a press release containing such notice for publication on Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if these organizations are not in existence at the time of issuance of the press release, such other news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public), and post a notice on our website, in any event prior to the opening of business on the first business day following any date on which the Company provides the notice described above to the holders of the Series E Preferred Stock.

To exercise the Change of Control Conversion Right, the holders of the Series E Preferred Stock will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) representing the shares of the Series E Preferred Stock to be converted, duly endorsed for transfer (or, in the case of any shares of the Company Series E Preferred Stock held in book-entry form through a Depositary, to deliver, on or before the close of business on the Change of Control Conversion Date, the shares of the Company Series E Preferred Stock to be converted through the facilities of such Depositary), together with a written conversion notice in the form provided by the Company, duly completed, to its transfer agent. The conversion notice must state:

•the relevant Change of Control Conversion Date;

•the number of shares of the Series E Preferred Stock to be converted; and

•that the shares of the Series E Preferred Stock are to be converted pursuant to the applicable provisions of the Series E Preferred Stock.

The “Change of Control Conversion Date” is the date the Series E Preferred Stock is to be converted, which will be a business day selected by the Company that is no fewer than 20 days nor more than 35 days after the date on which the Company provides the notice described above to the holders of the Series E Preferred Stock.

58

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The “Common Stock Price” is (i) if the consideration to be received in the Change of Control by the holders of the Company’s common stock is solely cash, the amount of cash consideration per share of its common stock or (ii) if the consideration to be received in the Change of Control by holders of the Company’s common stock is other than solely cash (x) the average of the closing sale prices per share of the Company common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices per share or, if more than one in either case, the average of the average closing bid and the average closing ask prices per share) for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred as reported on the principal U.S. securities exchange on which our common stock is then traded, or (y) the average of the last quoted bid prices for our common stock in the over-the-counter market as reported by Pink OTC Markets Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred, if our common stock is not then listed for trading on a U.S. securities exchange.

Holders of the Series E Preferred Stock may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date. The notice of withdrawal delivered by any holder must state:

•the number of withdrawn shares of the Series E Preferred Stock;

•if certificated Series E Preferred Stock has been surrendered for conversion, the certificate numbers of the withdrawn shares of the Series E Preferred Stock; and

•the number of shares of the Series E Preferred Stock, if any, which remain subject to the holder’s conversion notice.

Notwithstanding the foregoing, if any shares of the Series E Preferred Stock are held in book-entry form through The Depository Trust Company (“DTC”) or a similar depositary (each, a “Depositary”), the conversion notice and/or the notice of withdrawal, as applicable, must comply with applicable procedures, if any, of the applicable Depositary.

Series E Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control Conversion Date the Company has provided notice of its election to redeem some or all of the shares of the Series E Preferred Stock, as described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption Upon Change of Control,” in which case only the shares of the Series E Preferred Stock properly surrendered for conversion and not properly withdrawn that are not called for redemption will be converted as aforesaid. If the Company elects to redeem shares of the Series E Preferred Stock that would otherwise be converted into the applicable Conversion Consideration on a Change of Control Conversion Date, such shares of the Series E Preferred Stock will not be so converted and the holders of such shares will be entitled to receive on the applicable redemption date the redemption price described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption Upon Change of Control,” as applicable.

The Company will deliver all securities, cash and any other property owing upon conversion no later than the third business day following the Change of Control Conversion Date. Notwithstanding the foregoing, the persons entitled to receive any shares of the Company’s common stock or other securities delivered on conversion will be deemed to have become the holders of record thereof as of the Change of Control Conversion Date.

In connection with the exercise of any Change of Control Conversion Right, the Company will comply with all federal and state securities laws and stock exchange rules in connection with any conversion of shares of the Series E Preferred Stock into shares of the Company’s common stock or other property. Notwithstanding any other provision of the Series E Preferred Stock, no holder of the Series E Preferred Stock will be entitled to convert such shares of the Series E Preferred Stock into shares of the Company’s common stock to the extent that receipt of such shares of common stock would cause such holder (or any other person) to exceed the applicable share ownership limitations contained in our Charter. Please see the section entitled “Restrictions on Ownership and Transfer.”

The Change of Control conversion feature may make it more difficult for a third party to acquire the Company or discourage a party from acquiring it.

Except as provided above in connection with a Change of Control, the Series E Preferred Stock is not convertible into or exchangeable for any other securities or property.

Limited Voting Rights

Holders of the Series E Preferred Stock do not have any voting rights, except as set forth below.

59

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Whenever dividends on any shares of the Series E Preferred Stock are in arrears for six or more quarterly dividend periods, whether or not consecutive, the number of directors constituting the Board will be automatically increased by two (if not already increased by two by reason of the election of directors by the holders of any other class or series of the Company’s preferred stock the Company has issued or may issue upon which like voting rights have been conferred and are exercisable and with which the Series E Preferred Stock is entitled to vote as a class with respect to the election of those two directors), and the holders of the Series E Preferred Stock, voting as a single class with all other classes or series of preferred stock the Company has issued or may issue upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series E Preferred Stock in the election of those two directors will be entitled to vote for the election of those two additional directors at a special meeting called by the Company at the request of the holders of record of at least 25% of the outstanding shares of the Series E Preferred Stock or by the holders of any other class or series of preferred stock upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series E Preferred Stock in the election of those two directors (unless the request is received less than 90 days before the date fixed for the next annual or special meeting of stockholders, in which case, such vote will be held at the earlier of the next annual or special meeting of stockholders), and at each subsequent annual meeting until all dividends accumulated on the Series E Preferred Stock for all past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set apart for payment. In that case, the right of holders of the Series E Preferred Stock to elect any directors will cease and, unless there are other classes or series of the Company’s preferred stock upon which like voting rights have been conferred and are exercisable, the term of office of any directors elected by holders of the Series E Preferred Stock shall immediately terminate and the number of directors constituting the board of directors shall be reduced accordingly. For the avoidance of doubt, in no event shall the total number of directors elected by holders of the Series E Preferred Stock (voting together as a separate class with all other classes or series of preferred stock the Company may issue upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series E Preferred Stock in the election of such directors) pursuant to these voting rights exceed two.

If a special meeting is not called by the Company within 30 days after request from the holders of the Series E Preferred Stock as described above, then the holders of record of at least 25% of the outstanding Series E Preferred Stock may designate a holder to call the meeting at our expense.

On each matter on which holders of the Series E Preferred Stock are entitled to vote, each share of the Series E Preferred Stock will be entitled to one vote, except that when shares of any other class or series of the Company’s preferred stock have the right to vote with the Series E Preferred Stock as a single class on any matter, the Series E Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accumulated dividends).

So long as any shares of the Series E Preferred Stock remain outstanding, the Company will not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of the Series E Preferred Stock outstanding at the time, voting together as a single class with all series of preferred stock ranking on a parity with the Series E Preferred Stock that the Company may issue and upon which like voting rights have been conferred and are exercisable, given in person or by proxy, either in writing or at a meeting, (a) authorize or create, or increase the authorized or issued amount of, any class or series of capital stock ranking senior to the Series E Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any of the Company’s authorized capital stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (b) amend, alter or repeal the provisions of our Charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series E Preferred Stock (each, an “Event”); provided, however, with respect to the occurrence of any Event set forth in (b) above, so long as the Series E Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into account that, upon an occurrence of an Event, the Company may not be the surviving entity, the occurrence of any such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of the Series E Preferred Stock and, provided further, that any increase in the amount of the authorized common stock or preferred stock, including the Series E Preferred Stock, or the creation or issuance of any additional Series E Preferred Stock or other series of preferred stock that the Company may issue, or any increase in the amount of authorized shares of such series, in each case ranking on a parity with or junior to the Series E Preferred Stock that the Company may issue with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. Notwithstanding the foregoing, holders of any parity preferred stock shall not be entitled to vote together as a class with the holders of the Series E Preferred Stock on any amendment, alteration or repeal of our Charter unless such action affects the holders of the Series E Preferred Stock and such parity preferred stock equally.

60

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of the Series E Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been deposited in trust to effect such redemption.

Except as expressly stated in the Articles Supplementary for the Series E Preferred Stock, the Series E Preferred Stock does not have any relative, participating, optional or other special voting rights or powers and the consent of the holders thereof shall not be required for the taking of any corporate action.

Information Rights

During any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act and any shares of the Series E Preferred Stock are outstanding, the Company will use its best efforts to (i) transmit by mail (or other permissible means under the Exchange Act) to all holders of the Series E Preferred Stock, as their names and addresses appear on our record books and without cost to such holders, copies of the annual reports on Form 10-K and quarterly reports on Form 10-Q that the Company would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject thereto (other than any exhibits that would have been required) and (ii) promptly, upon request, supply copies of such reports to any holders or prospective holder of the Series E Preferred Stock. the Company will use its best effort to mail (or otherwise provide) the information to the holders of the Series E Preferred Stock within 15 days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case may be, in respect of such information would have been required to be filed with the SEC, if the Company were subject to Section 13 or 15(d) of the Exchange Act, in each case, based on the dates on which the Company would be required to file such periodic reports if the Company were a “non-accelerated filer” within the meaning of the Exchange Act.

Preemptive Rights

No holders of the Series E Preferred Stock, as holders of the Series E Preferred Stock, have any preemptive rights to purchase or subscribe for our common stock or any of its other securities.

Listing

The Series E Preferred Stock is listed on the New York Stock Exchange under the symbol “FBRT PRE”.

Transfer Agent and Registrar

The transfer agent and registrar for the Series E Preferred Stock is DST Systems, Inc.

Series F Convertible Preferred Stock

On October 12, 2021, as contemplated by the Merger Agreement with Capstead, the Company completed its previously-announced stock dividend on the outstanding shares of Common Stock, which stock dividend was paid at a rate of nine shares of the Company’s newly issued Series F Convertible Preferred Stock (“Series F Preferred Stock”) for each share of Common Stock issued and outstanding.

The Series F Preferred Stock ranks junior to all other outstanding classes of the Company’s preferred stock with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series F Preferred Stock is $2.00.

Dividends on the Series F Preferred Stock are equal to, and will be paid at the same time as, dividends that are authorized and declared on the Company’s common stock. The Series F Preferred Stock ranks senior to the Company’s Common Stock with respect to the distribution of assets upon any liquidation, dissolution or winding up of the Company (other than a liquidation, dissolution or winding up of the Company that results in the automatic conversion of such Series F Preferred Stock into Common Stock).

Each share (or fractional share) of Series F Preferred Stock shall automatically convert into one share of Common Stock (or equivalent fractional share, as applicable) upon the earlier of (i) April 19, 2022, (ii) three business days prior to a liquidation, dissolution or winding up of the Company in the event that the Company’s board of directors determines (which determination will be conclusive) that the liquidating distribution per share in respect of such converted share of Series F Preferred Stock (or fractional share) would be in an amount in excess of the liquidation preference of $2.00 per share or (iii) immediately prior to the effective time of a qualifying change of control, provided that the consideration per share payable in connection with such change in control in respect of such converted share of Series F Preferred Stock (or fractional share) is an amount in excess of the liquidation preference of $2.00.

The Series F Preferred Stock has no stated maturity and is not redeemable.

61

FRANKLIN BSP REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

(Unaudited)

Holders of Series F Preferred Stock (voting as a single class with holders of Common Stock and other series of Company equity securities entitled to vote with the common stockholders) are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of Common Stock are entitled to vote. The number of votes applicable to a share of outstanding Series F Preferred Stock will be equal to the number of shares of Common Stock a share of Series F Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of Common Stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series F Preferred Stock is required to take certain actions materially adverse to the holders of the Series F Preferred Stock.

Share Repurchase Program

The Company's SRP was terminated effective as of October 19, 2021 in connection with the closing of the Capstead merger and the listing of the Company’s common stock on the NYSE.

62

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

The following discussion and analysis should be read in conjunction with the accompanying financial statements of Franklin BSP 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, 2020 filed with the U.S. Securities and Exchange Commission (the "SEC") on March 11, 2021.

As used herein, the terms "we," "our" and "us" refer to Franklin BSP Realty Trust, Inc., a Maryland corporation (formerly known as Benefit Street Partners Realty Trust, Inc.), 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").

Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

Our forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements, and thus our investors should not place undue reliance on these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 and this Quarterly Report on Form 10-Q, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at http://www.sec.gov. These factors include:

•our business and investment strategy;

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

•the impact of the COVID-19 pandemic;

•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;

•our ability to successfully and in a timely matter reinvest the dividend, interest, principal and sales proceeds from the assets acquired in the merger with Capstead Mortgage Corporation in a manner consistent with our investment strategies;

•adverse changes in the value of the assets acquired in the merger with Capstead Mortgage Corporation prior to the time such assets are monetized and reinvested in in a manner consistent with our investment strategies;

•the degree and nature of our competition;

•the availability of qualified personnel;

•we may be deemed to be an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and thus subject to regulation under the Investment Company Act;

•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, 2020 and this Quarterly Report on Form 10-Q.

In addition, words such as "anticipate," "believe," "expect" and "intend" indicate a forward-looking statement, although not all forward-looking statements include these words. Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the continuing adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, operating results and cash flows of the Company, its borrowers, the real estate market, the global economy and the financial markets. The extent to which the COVID-19 pandemic continues to impact us and our borrowers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, including resurgences of the virus and its variants, including the Delta variant, the speed, effectiveness and adoption of vaccine (including boosters) and treatment developments and the direct and indirect economic effects of the pandemic and containment measures, among others.

63

Overview

We were incorporated in Maryland on November 15, 2012 and have conducted our operations to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2013. The Company, through a subsidiary which is treated as a TRS, is indirectly subject to U.S. federal, state and local income taxes. We commenced business in May 2013. We primarily originate, acquire and manage a diversified portfolio of commercial real estate debt investments secured by properties located within and outside of the United States. Commercial real estate debt investments may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Substantially all of our business is conducted through the OP, a Delaware limited partnership. We are the sole general partner and directly or indirectly hold all of the units of limited partner interests in the OP.

The Company has no direct employees. We are managed by our Advisor pursuant to an Amended and Restated Advisory Agreement, dated January 19, 2018, as amended August 18, 2021 (the "Advisory Agreement"). 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 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 Advisor’s robust platform. On February 1, 2019, Franklin Resources, Inc. and Templeton International, Inc. (collectively, “Franklin Templeton”) acquired the Advisor (the “Transaction”). The Transaction did not impact the terms of the Advisory Agreement and the Transaction did not result in any changes to the executive officers of the Company.

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 originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions at a profit. The Company also owns real estate, which represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

The Company also invests in commercial real estate securities. 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.

Merger with Capstead Mortgage Corporation

On October 19, 2021, we consummated our previously-announced acquisition of Capstead Mortgage Corporation (“Capstead”), a Maryland corporation that primarily invests in residential adjustable-rate mortgage pass-through securities, referred to as ARM securities, issued and guaranteed by government-sponsored enterprises. On the effective date of the merger, Capstead merged with and into a wholly-owned subsidiary of the Company, with such subsidiary continuing as the surviving company. Per the terms of the merger agreement with Capstead, approximately 32.1 million shares of our common stock were issued in connection with the merger to former Capstead common stockholders, and the Company paid $20.5 million in cash consideration to former Capstead common stockholders. In addition, the Company issued 10.3 million shares of our newly-designated 7.50% Series E Cumulative Redeemable Preferred Stock $0.01 par value per share, (the “Series E Preferred Stock”) to former holders of Capstead’s 7.50% Series E Cumulative Redeemable Preferred Stock. As a result of the merger, our shares of common stock were listed on the NYSE under the ticker symbol “FBRT,” and the shares of Series E Preferred Stock were listed on the NYSE under the ticker symbol “FBRT PRE.”

At the closing of the merger on October 19, 2021, we acquired approximately $6.9 billion of ARM securities which were subject to approximately $6.4 billion of borrowings secured by such assets. We intend to, over time, sell the ARM securities acquired in the Capstead merger and reinvest the proceeds (along with payments of interest and principal prior to sale) in our historical investment strategies, including the origination of commercial mortgage loans. Until we have transitioned these assets into our traditional investment strategies, our results of operations may be materially impacted by changes in market values of these assets and thus our historical results of operations may not be indicative of future results.

For more detail about the merger, please see Note 16 - Subsequent Events to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

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, 2020.

64

Portfolio

As of September 30, 2021 and December 31, 2020, our portfolio consisted of 150 and 130 commercial mortgage loans, respectively, excluding commercial mortgage loans accounted for under the fair value option. The commercial mortgage loans, held for investment as of September 30, 2021 and December 31, 2020 had a total carrying value, net of allowance for credit losses, of $3,247.6 million and $2,693.8 million, respectively. As of September 30, 2021 and December 31, 2020, our total commercial mortgage loans, held for sale, measured at fair value comprised of one loan with total fair value of $0.1 million and 3 loans with total fair value of $67.6 million, respectively. As of September 30, 2021 we had no real estate securities, available for sale, measured at fair value. As of December 31, 2020, our real estate securities, available for sale, measured at fair value comprised of nine CMBS investments with total fair value of $171.1 million, respectively. As of September 30, 2021 and December 31, 2020, our other real estate investments, measured at fair value, were comprised of one investment with a total fair value of $2.5 million. As of September 30, 2021, our real estate owned, held for sale portfolio comprised of one investment with a carrying value of $90.6 million. As of December 31, 2020, our real estate owned portfolio was comprised of one investment with a carrying value of $26.5 million.

As of September 30, 2021, we had one loan with unpaid contractual principal balance for a total carrying value of $57.1 million that had interest past due for greater than 90 days. We did not take any asset specific reserves for this loan. As of December 31, 2020, we had two loans with unpaid contractual principal balance and carrying value of $94.9 million, one with interest past due for greater than 90 days and the other with interest past due greater than 30 days.

As of September 30, 2021 and December 31, 2020 our commercial mortgage loans, excluding commercial mortgage loans accounted for under the fair value option, had a weighted average coupon of 4.9% and 5.5%, and a weighted average remaining life of 1.8 years and 1.7 years, respectively. As of September 30, 2021 there were no CMBS investments. As of December 31, 2020, our CMBS investments had a weighted average coupon of 2.2%, and a remaining life of 12.8 years.

65

The following charts summarize our commercial mortgage loans, held for investment, by coupon rate type, collateral type and geographical region as of September 30, 2021 and December 31, 2020:

66

67

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

68

The following charts show the par value by contractual maturity year for the commercial mortgage loans held for investments (excluding commercial mortgage loans in principal default) in our portfolio as of September 30, 2021 and December 31, 2020:

69

The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of September 30, 2021 (dollars in thousands):

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 1	Office	$26,549	1 month LIBOR + 4.15%	5.4%	69.5%
Senior Debt 2	Hospitality	5,867	1 month LIBOR + 3.50%	4.5%	77.0%
Senior Debt 3	Hospitality	57,075	1 month LIBOR + 5.19%	6.2%	51.8%
Senior Debt 4	Multifamily	37,267	1 month LIBOR + 4.50%	5.5%	22.4%
Senior Debt 5	Hospitality	22,150	1 month LIBOR + 6.00%	6.5%	48.1%
Senior Debt 6	Office	22,685	1 month LIBOR + 5.15%	6.6%	56.4%
Senior Debt 7	Multifamily	36,960	1 month LIBOR + 3.00%	3.8%	63.7%
Senior Debt 8	Multifamily	37,025	1 month LIBOR + 3.00%	4.5%	83.6%
Senior Debt 9	Hospitality	22,355	1 month LIBOR + 3.50%	4.8%	68.8%
Senior Debt 10	Mixed Use	70,679	1 month LIBOR + 4.87%	5.3%	49.0%
Senior Debt 11	Office	20,810	1 month LIBOR + 3.75%	5.8%	70.0%
Senior Debt 12	Office	15,774	1 month LIBOR + 3.40%	5.3%	67.5%
Senior Debt 13	Retail	29,500	6.50%	6.5%	68.5%
Senior Debt 14	Multifamily	23,828	1 month LIBOR + 3.40%	5.0%	80.5%
Senior Debt 15	Multifamily	29,583	1 month LIBOR + 3.35%	5.3%	73.0%
Senior Debt 16	Land	16,400	1 month LIBOR + 6.00%	8.3%	45.7%
Senior Debt 17	Hospitality	8,285	1 month LIBOR + 4.80%	6.8%	62.5%
Senior Debt 18	Office	7,147	1 month LIBOR + 3.90%	6.0%	67.6%
Senior Debt 19	Manufactured Housing	10,175	1 month LIBOR + 4.40%	6.5%	60.3%
Senior Debt 20	Hospitality	14,000	1 month LIBOR + 4.47%	6.7%	44.8%
Senior Debt 21	Retail	11,958	1 month LIBOR + 3.95%	6.5%	61.2%
Senior Debt 22	Office	42,631	1 month LIBOR + 3.50%	5.8%	71.0%
Senior Debt 23	Retail	8,203	1 month LIBOR + 7.50%	7.6%	51.6%
Senior Debt 24	Hospitality	10,580	1 month LIBOR + 4.50%	6.8%	68.7%
Senior Debt 25	Hospitality	19,900	1 month LIBOR + 4.15%	6.5%	61.8%
Senior Debt 26	Office	34,400	1 month LIBOR + 4.01%	6.3%	68.2%
Senior Debt 27	Hospitality	20,930	1 month LIBOR + 3.75%	6.1%	62.6%
Senior Debt 28	Hospitality	13,000	1 month LIBOR + 2.94%	5.4%	56.4%
Senior Debt 29	Hospitality	4,987	1 month LIBOR + 4.25%	6.5%	47.7%
Senior Debt 30	Hospitality	12,750	1 month LIBOR + 4.45%	6.9%	62.9%
Senior Debt 31	Hospitality	10,845	1 month LIBOR + 4.50%	6.9%	64.0%
Senior Debt 32	Retail	9,400	1 month LIBOR + 4.20%	6.3%	77.1%
Senior Debt 33	Hospitality	34,161	1 month LIBOR + 3.99%	5.7%	31.0%
Senior Debt 34	Multifamily	13,236	1 month LIBOR + 2.65%	4.5%	71.6%
Senior Debt 35	Industrial	56,718	1 month LIBOR + 3.75%	5.5%	59.7%
Senior Debt 36	Office	21,825	1 month LIBOR + 3.50%	5.4%	70.9%
Senior Debt 37	Hospitality	7,100	1 month LIBOR + 4.00%	5.8%	70.3%
Senior Debt 38	Industrial	22,230	1 month LIBOR + 3.55%	5.3%	69.7%
Senior Debt 39	Multifamily	15,123	1 month LIBOR + 2.75%	4.3%	71.7%
Senior Debt 40	Multifamily	27,650	1 month LIBOR + 3.15%	5.0%	71.6%
Senior Debt 41	Multifamily	26,768	1 month LIBOR + 2.70%	2.8%	76.0%
Senior Debt 42	Multifamily	8,706	1 month LIBOR + 3.95%	5.0%	75.3%
Senior Debt 43	Multifamily	25,000	1 month LIBOR + 3.00%	4.5%	75.5%
Senior Debt 44	Office	25,686	1 month LIBOR + 4.35%	6.1%	64.9%
Senior Debt 45	Multifamily	15,150	1 month LIBOR + 3.10%	4.5%	63.7%
Senior Debt 46	Office	58,312	1 month LIBOR + 3.70%	5.0%	65.7%
Senior Debt 47	Multifamily	11,785	1 month LIBOR + 3.15%	4.8%	72.4%
Senior Debt 48	Office	27,928	1 month LIBOR + 2.70%	2.8%	71.4%
Senior Debt 49	Manufactured Housing	1,366	5.50%	5.5%	62.8%
Senior Debt 50	Industrial	14,606	1 month LIBOR + 6.00%	6.8%	59.9%
Senior Debt 51	Multifamily	7,082	1 month LIBOR + 4.75%	5.8%	62.6%
Senior Debt 52	Multifamily	46,000	1 month LIBOR + 4.75%	5.8%	69.4%
Senior Debt 53	Multifamily	5,550	1 month LIBOR + 6.87%	7.9%	75.0%
Senior Debt 54	Industrial	16,956	1 month LIBOR + 6.25%	7.0%	61.0%

70

Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 55	Multifamily	15,281	1 month LIBOR + 4.75%	5.5%	65.3%
Senior Debt 56	Multifamily	4,300	1 month LIBOR + 5.50%	6.5%	87.4%
Senior Debt 57	Manufactured Housing	7,680	1 month LIBOR + 4.50%	5.0%	66.7%
Senior Debt 58	Mixed Use	30,465	1 month LIBOR + 5.15%	6.2%	67.0%
Senior Debt 59	Multifamily	3,140	1 month LIBOR + 6.25%	6.8%	73.5%
Senior Debt 60	Multifamily	21,925	1 month LIBOR + 6.50%	6.6%	—%
Senior Debt 61	Hospitality	27,000	1 month LIBOR + 6.50%	6.9%	62.7%
Senior Debt 62	Multifamily	50,000	1 month LIBOR + 6.69%	7.4%	80.0%
Senior Debt 63	Self Storage	29,895	1 month LIBOR + 5.00%	5.3%	58.8%
Senior Debt 64	Multifamily	13,692	1 month LIBOR + 4.75%	5.3%	70.0%
Senior Debt 65	Manufactured Housing	3,400	1 month LIBOR + 5.00%	5.3%	58.6%
Senior Debt 66	Multifamily	27,550	1 month LIBOR + 5.75%	6.0%	69.8%
Senior Debt 67	Multifamily	76,000	1 month LIBOR + 4.10%	4.4%	67.9%
Senior Debt 68	Multifamily	58,000	1 month LIBOR + 5.25%	5.3%	74.7%
Senior Debt 69	Manufactured Housing	5,020	1 month LIBOR + 5.25%	5.4%	65.9%
Senior Debt 70	Office	18,703	1 month LIBOR + 4.50%	5.3%	47.9%
Senior Debt 71	Office	68,169	5.15%	5.2%	52.5%
Senior Debt 72	Office	30,900	1 month LIBOR + 5.20%	5.5%	66.0%
Senior Debt 73	Multifamily	10,945	1 month LIBOR + 7.04%	7.3%	63.3%
Senior Debt 74	Self Storage	11,600	1 month LIBOR + 4.76%	5.0%	66.6%
Senior Debt 75	Manufactured Housing	5,000	1 month LIBOR + 5.90%	6.5%	58.8%
Senior Debt 76	Office	12,750	1 month LIBOR + 5.00%	5.3%	67.8%
Senior Debt 77	Multifamily	42,812	1 month LIBOR + 4.35%	4.6%	73.2%
Senior Debt 78	Multifamily	37,330	1 month LIBOR + 4.45%	4.7%	66.5%
Senior Debt 79	Multifamily	8,763	1 month LIBOR + 5.50%	5.8%	73.7%
Senior Debt 80	Retail	11,962	1 month LIBOR + 4.87%	5.1%	75.0%
Senior Debt 81	Manufactured Housing	3,585	1 month LIBOR + 5.40%	5.9%	76.3%
Senior Debt 82	Multifamily	5,730	1 month LIBOR + 5.00%	5.3%	73.5%
Senior Debt 83	Multifamily	18,800	1 month LIBOR + 4.00%	4.1%	79.7%
Senior Debt 84	Industrial	14,610	1 month LIBOR + 4.50%	4.8%	66.3%
Senior Debt 85	Office	11,550	1 month LIBOR + 5.50%	5.8%	68.8%
Senior Debt 86	Multifamily	11,820	1 month LIBOR + 4.55%	4.8%	73.0%
Senior Debt 87	Multifamily	21,000	1 month LIBOR + 4.60%	4.8%	66.7%
Senior Debt 88	Office	26,000	1 month LIBOR + 5.00%	5.3%	63.9%
Senior Debt 89	Multifamily	54,500	1 month LIBOR + 3.80%	4.1%	77.0%
Senior Debt 90	Multifamily	11,671	1 month LIBOR + 3.50%	3.7%	60.1%
Senior Debt 91	Multifamily	21,000	1 month LIBOR + 4.95%	5.0%	84.2%
Senior Debt 92	Office	43,751	1 month LIBOR + 3.94%	4.1%	53.9%
Senior Debt 93 (3)	Multifamily	—	1 month LIBOR + 7.25%	7.5%	—%
Senior Debt 94	Multifamily	5,400	1 month LIBOR + 5.25%	5.5%	83.1%
Senior Debt 95	Hospitality	23,000	1 month LIBOR + 5.79%	6.0%	57.2%
Senior Debt 96	Multifamily	32,370	1 month LIBOR + 6.75%	7.0%	78.2%
Senior Debt 97	Multifamily	12,325	1 month LIBOR + 4.50%	4.7%	83.3%
Senior Debt 98	Multifamily	6,300	1 month LIBOR + 5.35%	5.6%	84.0%
Senior Debt 99	Multifamily	31,023	1 month LIBOR + 3.00%	3.1%	74.3%
Senior Debt 100	Multifamily	11,759	1 month LIBOR + 4.25%	4.6%	76.4%
Senior Debt 101	Multifamily	5,575	1 month LIBOR + 4.50%	4.8%	83.6%
Senior Debt 102	Multifamily	52,455	1 month LIBOR + 3.00%	3.3%	71.6%
Senior Debt 103	Multifamily	13,846	1 month LIBOR + 3.39%	3.5%	70.6%
Senior Debt 104	Multifamily	8,140	1 month LIBOR + 3.80%	4.0%	69.9%
Senior Debt 105	Multifamily	13,582	1 month LIBOR + 4.50%	4.8%	76.7%
Senior Debt 106	Multifamily	18,277	1 month LIBOR + 5.25%	5.5%	67.0%
Senior Debt 107	Multifamily	17,985	1 month LIBOR + 3.60%	3.8%	70.8%
Senior Debt 108	Multifamily	41,245	1 month LIBOR + 2.95%	3.1%	71.6%
Senior Debt 109	Hospitality	25,785	1 month LIBOR + 5.60%	5.9%	61.0%
Senior Debt 110	Mixed Use	32,500	1 month LIBOR + 3.70%	4.2%	69.7%

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Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 111	Multifamily	12,454	1 month LIBOR + 3.75%	3.9%	63.2%
Senior Debt 112	Multifamily	68,683	1 month LIBOR + 2.95%	3.1%	72.6%
Senior Debt 113	Multifamily	20,321	1 month LIBOR + 3.35%	3.5%	67.7%
Senior Debt 114	Multifamily	27,125	1 month LIBOR + 2.95%	3.1%	70.4%
Senior Debt 115	Multifamily	33,790	1 month LIBOR + 2.95%	3.1%	71.7%
Senior Debt 116	Multifamily	32,120	1 month LIBOR + 2.95%	3.1%	72.2%
Senior Debt 117	Hospitality	25,980	1 month LIBOR + 9.00%	9.3%	74.2%
Senior Debt 118	Self Storage	15,000	1 month LIBOR + 4.26%	4.5%	74.6%
Senior Debt 119	Multifamily	23,919	1 month LIBOR + 3.25%	3.4%	70.8%
Senior Debt 120	Office	6,800	1 month LIBOR + 5.25%	5.5%	67.3%
Senior Debt 121 (4)	Multifamily	—	1 month LIBOR + 6.50%	7.0%	—%
Senior Debt 122	Multifamily	10,391	1 month LIBOR + 3.15%	3.2%	75.6%
Senior Debt 123	Hospitality	17,449	1 month LIBOR + 5.35%	5.8%	56.8%
Senior Debt 124	Hospitality	28,000	1 month LIBOR + 6.25%	6.5%	59.2%
Senior Debt 125	Multifamily	31,900	1 month LIBOR + 3.15%	3.3%	73.0%
Senior Debt 126	Multifamily	37,032	1 month LIBOR + 3.40%	3.6%	75.6%
Senior Debt 127 (5)	Multifamily	—	1 month LIBOR + 8.00%	8.3%	—%
Senior Debt 128	Multifamily	29,500	1 month LIBOR + 2.88%	3.0%	68.0%
Senior Debt 129	Multifamily	10,050	1 month LIBOR + 4.50%	4.7%	77.3%
Senior Debt 130	Multifamily	29,250	1 month LIBOR + 3.00%	3.1%	73.5%
Senior Debt 131	Multifamily	34,077	1 month LIBOR + 3.15%	3.3%	71.0%
Senior Debt 132	Multifamily	42,850	1 month LIBOR + 3.40%	3.5%	79.9%
Senior Debt 133	Multifamily	34,886	1 month LIBOR + 3.64%	3.7%	66.0%
Senior Debt 134	Multifamily	8,500	1 month LIBOR + 3.75%	4.0%	79.4%
Senior Debt 135	Multifamily	14,200	1 month LIBOR + 3.15%	3.2%	79.8%
Senior Debt 136	Multifamily	13,350	1 month LIBOR + 3.75%	3.8%	64.2%
Senior Debt 137	Multifamily	66,650	1 month LIBOR + 3.25%	3.4%	77.1%
Senior Debt 138	Multifamily	18,750	1 month LIBOR + 2.95%	3.0%	72.1%
Senior Debt 139	Multifamily	9,099	1 month LIBOR + 3.75%	4.0%	70.0%
Senior Debt 140	Multifamily	26,160	1 month LIBOR + 3.20%	3.3%	77.3%
Senior Debt 141	Hospitality	17,370	1 month LIBOR + 5.25%	5.5%	61.0%
Senior Debt 142	Multifamily	56,150	1 month LIBOR + 3.10%	3.2%	78.9%
Senior Debt 143	Hospitality	17,201	5.75%	5.8%	52.9%
Mezzanine Loan 1	Multifamily	3,480	9.50%	9.5%	84.3%
Mezzanine Loan 2	Retail	3,500	10.00%	10.0%	59.7%
Mezzanine Loan 3	Multifamily	6,500	1 month LIBOR + 10.25%	11.0%	90.4%
Mezzanine Loan 4	Retail	1,438	1 month LIBOR + 10.75%	11.0%	84.0%
Mezzanine Loan 5	Multifamily	3,000	1 month LIBOR + 9.20%	10.0%	62.2%
Mezzanine Loan 6	Office	5,000	1 month LIBOR + 11.80%	12.0%	60.0%
Mezzanine Loan 7	Multifamily	1,000	11.00%	11.0%	68.9%
		$3,273,427		4.9%	66.9%

________________________

(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.

(3) The total commitment of this loan is $31.5 million, however none was funded as of September 30, 2021.

(4) The total commitment of this loan is $128.9 million, however none was funded as of September 30, 2021.

(5) The total commitment of this loan is $38.0 million, however none was funded as of September 30, 2021.

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The following table shows selected data from our commercial mortgage loans, measured at fair value as of September 30, 2021 (dollars in thousands):

Loan Type	Property Type	Par Value	Interest Rate	Effective Yield	Loan to Value (1)
TRS Mezzanine Loan 1	Multifamily	$100	1 month LIBOR + 14.00%	15.0%	76.4%
		$100		15.0%	76.4%

________________________

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

The following table shows selected data from our other real estate investment, measured at fair value as of September 30, 2021 (dollars in thousands):

Type	Property Type	Par Value		Preferred Return
Preferred Equity 1	Retail	$	2,500	12.50%
		$	2,500

The following table shows selected data from our real estate owned asset in our portfolio as of September 30, 2021 (dollars in thousands):

Type	Property Type	Carrying Value
Real Estate Owned 1	Industrial	$	90,623
		$	90,623

Results of Operations

We conduct our business through the following segments:

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

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

•The Conduit business operated through the Company's TRS, which is focused on generating superior risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

73

Comparison of the Three Months Ended September 30, 2021 to the Three Months Ended September 30, 2020

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, real estate securities and TRS 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 September 30, 2021 and September 30, 2020 (dollars in thousands):

	Three Months Ended September 30,
	2021							2020
	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	$	3,118,201		$	47,166	6.1%		$	2,500,671		$	39,944	6.4%
Real estate conduit	61,157			581		3.8%		44,907			474		4.2%
Real estate securities	—			—		N/A		373,529			3,996		4.3%
Total	$	3,179,358		$	47,747	6.0%		$	2,919,107		$	44,414	6.1%
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans	$	331,871		$	3,095	3.7%		$	197,633		$	2,537	5.1%
Other financing and loan participation - commercial mortgage loans	49,145			350		2.8%		21,348			328		6.1%
Repurchase Agreements - real estate securities	46,527			148		1.3%		316,230			4,913		6.2%
Collateralized loan obligations	1,906,402			8,395		1.8%		1,683,626			7,335		1.7%
Total	$	2,333,945		$	11,988	2.1%		$	2,218,837		$	15,113	2.7%
Net interest income/spread				$	35,759	3.9%					$	29,301	3.4%
Average leverage % (5)	73.4		%					76.0		%
Weighted average levered yield (6)						16.9	%						16.7	%

________________________

(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 the three months ended September 30, 2021 and September 30, 2020, 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 dividing net interest income/spread by the net average interest-earning assets and average interest-bearing liabilities.

Interest income

Interest income for the three months ended September 30, 2021 and September 30, 2020 totaled $47.7 million and $44.4 million, respectively. As of September 30, 2021, our portfolio consisted of 150 commercial mortgage loans, held for investment, one commercial mortgage loan, held for sale, measured at fair value and one other real estate investment, measured at fair value. The increase in interest income of $3.3 million was primarily due to an increase of $260.3 million in the average carrying value of our interest-earning assets.

Interest expense

Interest expense for the three months ended September 30, 2021 decreased to $12.0 million compared to interest expense for three months ended September 30, 2020 of $15.1 million. The decrease in interest expense of $3.1 million was due to a decrease of $269.7 million in the average carrying value of our repurchase agreements on real estate securities.

74

Realized Gain/Loss on Commercial Mortgage Loans Held for Sale

Realized gain on commercial mortgage loans, held for sale, measured at fair value at the TRS for the three months ended September 30, 2021 was $9.1 million compared to a realized gain of $1.9 million for the three months ended September 30, 2020. The $7.2 million increase in realized gain was due to the fact that there had been two sales of fixed-rate commercial real estate loans into the CMBS securitization market during the three months ended September 30, 2021 compared to one sale during the three months ended September 30, 2020. Proceeds from sale were $154.0 million for the three months ended September 30, 2021 compared to $74.5 million for the three months ended September 30, 2020.

Realized Gain/Loss on Real Estate Securities Available for Sale

For the three months ended September 30, 2021 there was no realized gain/loss on our real estate securities, available for sale, measured at fair value. For the three months ended September 30, 2020 our real estate securities, available for sale, measured at fair value had a realized loss of $4.4 million, included within the consolidated statements of operations. The loss is attributable to 15 sales of CMBS securities during the three months ended September 30, 2020.

Expenses from operations

Expenses from operations for the three months ended September 30, 2021 and September 30, 2020 consisted of the following (dollars in thousands):

	Three Months Ended September 30,
	2021		2020
Asset management and subordinated performance fee	$	8,265	$	3,749
Administrative services expenses	2,980		3,128
Acquisition expenses	690		166
Professional fees	2,488		2,470
Real estate owned operating expenses	—		509
Depreciation and amortization	—		591
Other expenses	709		571
Total expenses from operations	$	15,132	$	11,184

The increase in our expenses from operations was primarily related to asset management and subordinated performance fee during the three months ended September 30, 2021. This increase in asset management and subordinated performance fee is attributable to $4.3 million in incentive fees incurred during the three months ended September 30, 2021 compared to no incentive fees incurred during the three months ended September 30, 2020. This is partially offset by real estate owned operating expenses and depreciation and amortization as there were no such expenses during the three months ended September 30, 2021 compared to $0.5 million and $0.6 million, respectively, incurred during the three months ended September 30, 2020.

75

Comparison of the Nine Months Ended September 30, 2021 to the Nine Months Ended September 30, 2020

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, real estate securities and TRS 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 nine months ended September 30, 2021 and September 30, 2020 (dollars in thousands):

	Nine Months Ended September 30,
	2021							2020
	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	$	2,996,468		$	135,945	6.0%		$	2,604,209		$	123,284	6.3%
Real estate conduit	88,839			2,563		3.8%		63,769			2,355		4.9%
Real estate securities	28,500			461		2.2%		409,765			9,870		3.2%
Total	$	3,113,807		$	138,969	6.0%		$	3,077,743		$	135,509	5.9%
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans	$	314,507		$	8,229	3.5%		$	239,246		$	8,538	4.8%
Other financing and loan participation - commercial mortgage loans	48,559			1,489		4.1%		13,396			588		5.9%
Repurchase Agreements - real estate securities	75,436			2,278		4.0%		356,740			11,647		4.4%
Collateralized loan obligations	1,858,139			23,998		1.7%		1,726,726			33,967		2.6%
Total	$	2,296,641		$	35,994	2.1%		$	2,336,108		$	54,740	3.1%
Net interest income/spread				$	102,975	3.9%					$	80,769	2.8%
Average leverage % (5)	73.8		%					75.9		%
Weighted average levered yield (6)						16.8	%						14.5	%

________________________

(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 the nine months ended September 30, 2021 and September 30, 2020, 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 dividing net interest income/spread by the net average interest-earning assets and average interest-bearing liabilities.

Interest income

Interest income for the nine months ended September 30, 2021 and September 30, 2020 totaled $139.0 million and $135.5 million, respectively. As of September 30, 2021, our portfolio consisted of 150 commercial mortgage loans, held for investment, one commercial mortgage loan, held for sale, measured at fair value and one other real estate investment, measured at fair value. The increase in interest income of $3.5 million was primarily due to an increase of $36.1 million in the average carrying value of our interest-earning assets.

Interest expense

Interest expense for the nine months ended September 30, 2021 decreased to $36.0 million compared to interest expense for the nine months ended September 30, 2020 of $54.7 million. The decrease in interest expense of $18.7 million was due to a decrease in the one-month LIBOR, the benchmark index for our financing lines. Additionally, interest expense for the nine months ended September 30, 2020 includes $4.5 million related to the call of BSPRT 2017 - FL2 CLO.

76

Realized Gain/Loss on Commercial Mortgage Loans Held for Sale

Realized gain on commercial mortgage loans, held for sale, measured at fair value at the TRS for the nine months ended September 30, 2021 was $22.2 million compared to a realized gain of $11.1 million for the nine months ended September 30, 2020. The $11.1 million increase in realized gain was due to the fact that there had been four sales of fixed-rate commercial real estate loans into the CMBS securitization market during the nine months ended September 30, 2021 with total proceeds of $410.7 million compared to three CMBS securitizations during the nine months ended September 30, 2020 with total proceeds of $147.6 million.

Realized Gain/Loss on Real Estate Securities Available for Sale

For the nine months ended September 30, 2021 and September 30, 2020 our real estate securities, available for sale, measured at fair value had a realized loss of $1.4 million and $10.1 million, respectively, included within the consolidated statements of operations. The loss is attributable to 9 CMBS sales during the nine months ended September 30, 2021 and 20 sales of CMBS securities during the nine months ended September 30, 2020, respectively.

Unrealized Gain/Loss on Real Estate Securities Available for Sale

For the nine months ended September 30, 2021 our real estate securities, available for sale, measured at fair value had an unrealized gain of $8.3 million included within the consolidated statements of comprehensive income. The increase in fair value of real estate securities can be attributed to the reversal of the unrealized losses on the 9 CMBS sales during the nine months ended September 30, 2021.

Expenses from operations

Expenses from operations for the nine months ended September 30, 2021 and September 30, 2020 consisted of the following (dollars in thousands):

	Nine Months Ended September 30,
	2021		2020
Asset management and subordinated performance fee	$	19,682	$	11,399
Administrative services expenses	9,532		10,180
Acquisition expenses	1,012		483
Professional fees	7,262		8,476
Real estate owned operating expenses	—		3,250
Depreciation and amortization	812		1,765
Other expenses	2,115		3,213
Total expenses from operations	$	40,415	$	38,766

The increase in our expenses from operations was primarily related to asset management and subordinated performance fee during the nine months ended September 30, 2021. This increase in asset management and subordinated performance fee is attributable to $8.0 million in incentive fees incurred during the nine months ended September 30, 2021 compared to no incentive fees incurred during the nine months ended September 30, 2020. This is partially offset by real estate owned operating expenses as there were no such expenses during the nine months ended September 30, 2021 compared to $3.3 million incurred during the nine months ended September 30, 2020. The decrease in other expenses was due to less travel and entertainment expenses for origination activities due to COVID-19.

77

Comparison of the Three Months Ended September 30, 2021 to the Three Months Ended June 30, 2021

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, real estate securities and TRS 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 September 30, 2021 and June 30, 2021 (dollars in thousands):

	Three Months Ended
	September 30, 2021							June 30, 2021
	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	$	3,118,201		$	47,166	6.1%		$	3,140,324		$	48,023	6.1%
Real estate conduit	61,157			581		3.8%		89,189			926		4.2%
Real estate securities	—			—		N/A		6,709			36		2.2%
Total	$	3,179,358		$	47,747	6.0%		$	3,236,222		$	48,985	6.1%
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans	$	331,871		$	3,095	3.7%		$	282,891		$	3,000	4.2%
Other financing and loan participation - commercial mortgage loans	49,145			350		2.8%		51,547			611		4.7%
Repurchase Agreements - real estate securities	46,527			148		1.3%		57,301			189		1.3%
Collateralized loan obligations	1,906,402			8,395		1.8%		2,066,099			8,837		1.7%
Total	$	2,333,945		$	11,988	2.1%		$	2,457,838		$	12,637	2.1%
Net interest income/spread				$	35,759	3.9%					$	36,348	4.0%
Average leverage % (5)	73.4		%					75.9		%
Weighted average levered yield (6)						16.9	%						18.7	%

________________________

(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 the three months ended September 30, 2021 and June 30, 2021, 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 dividing net interest income/spread by the net average interest-earning assets and average interest-bearing liabilities.

Interest Income

Interest income for the three months ended September 30, 2021 and June 30, 2021 totaled $47.7 million and $49.0 million, respectively. As of September 30, 2021, our portfolio consisted of 150 commercial mortgage loans, held for investment, 1 commercial mortgage loan, held for sale, measured at fair value and one other real estate investment, measured at fair value. The decrease in interest income of $1.3 million was primarily due to a decrease of $56.9 million in the average carrying value of our interest-earning assets.

Interest expense

Interest expense for the three months ended September 30, 2021 decreased to $12.0 million compared to interest expense for three months ended June 30, 2021 of $12.6 million. The decrease in interest expense of $0.6 million was due to a decrease of $123.9 million in the average carrying value of our interest-earning liabilities.

78

Realized Gain/Loss on Commercial Mortgage Loans Held for Sale

Realized gain on commercial mortgage loans, held for sale, measured at fair value at the TRS for the three months ended September 30, 2021 was $9.1 million compared to a realized gain of $6.5 million for the three months ended June 30, 2021. The $2.6 million increase in realized gain was due to the fact that there had been two sales of fixed-rate commercial real estate loans into the CMBS securitization market during the three months ended September 30, 2021 with total proceeds of $154.0 million compared to one sale of fixed-rate commercial real estate loans into the CMBS securitization market for the three months ended June 30, 2021 with total proceeds of $108.9 million.

Realized Gain/Loss on Real Estate Securities Available for Sale

For the three months ended September 30, 2021 there was no realized gain/loss on our real estate securities, available for sale, measured at fair value. For the three months ended June 30, 2021 our real estate securities, available for sale, measured at fair value had a realized loss of $0.3 million, included within the consolidated statements of operations. The loss is attributable to one CMBS sale during the three months ended June 30, 2021.

Expenses from operations

Expenses from operations for the three months ended September 30, 2021 and June 30, 2021 consisted of the following (dollars in thousands):

	Three Months Ended
	September 30, 2021		June 30, 2021
Asset management and subordinated performance fee	$	8,265	$	6,001
Administrative services expenses	2,980		3,078
Acquisition expenses	690		169
Professional fees	2,488		2,777
Depreciation and amortization	—		406
Other expenses	709		911
Total expenses from operations	$	15,132	$	13,342

The increase in our expenses from operations was primarily related to asset management and subordinated performance fee during the three months ended September 30, 2021. The increase in asset management and subordinated performance fee of $2.3 million was primarily attributable to the incentive fee incurred during the three months ended September 30, 2021 compared to the three months ended June 30, 2021. This has partially been offset by the decrease in depreciation and amortization as there had been no such expenses recorded on our real estate owned assets during the three months ended September 30, 2021.

For additional details regarding our results of operations for the three months ended June 30, 2021, please refer to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the Securities and Exchange Commission on August 12, 2021.

Liquidity and Capital Resources

Our principal demands for cash will be funding our loan investments, continuing debt service obligations, distributions to our stockholders and the payment of our operating and administrative expenses.

We expect to use additional debt and equity financing as a source of capital. Our board of directors currently intends to operate at a leverage level of between one to three times book value of equity. However, our board of directors may change this target without shareholder approval. We believe that the recent listing of our common stock will improve our access to capital through public offerings of our securities. We anticipate that our debt and equity financing sources and our anticipated cash generated from operations will be adequate to fund our anticipated uses of capital.

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.

As discussed in detail in Note 16 - Subsequent Events, we recently closed our merger with Capstead. We intend to transition the equity invested in the assets we acquired from Capstead into our traditional investment strategies, including the origination of commercial real estate mortgages. Specifically, we intend to reinvest any dividend, interest and principal paid on such assets, and proceeds from the sale of such assets, into our current investment strategies. Until we fully transition this equity into our business, we expect that proceeds received from the sale of Capstead assets will be a significant source of capital.

79

Collateralized Loan Obligations

As of September 30, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 15 and 27 mortgage assets having a principal balance of $230.2 million and $417.9 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.

As of September 30, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, collateralized by interests in a pool of 41 and 59 mortgage assets having a principal balance of $619.6 million and $852.1 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October12, 2018, between the Company and BSPRT 2018-FL4 Issuer, Ltd.

As of September 30, 2021 and December 31, 2020, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 56 and 54 mortgage assets having a principal balance of $754.5 million and $799.8 million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer.

On March 25, 2021, BSPRT 2021-FL6 Issuer, Ltd. (the “Issuer”) and BSPRT 2021-FL6 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company entered into an indenture with the OP, as advancing agent and U.S. Bank National Association, as note administrator and trustee, which governs the issuance of approximately $645.8 million principal balance secured floating rate notes (the “Notes”), of which $573.1 million were purchased by third party investors and $72.6 million were purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 54,250 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 September 30, 2021, the notes issued by BSPRT 2021-FL6 Issuer, Ltd. and BSPRT 2021-FL6 Co-Issuer, LLC, are collateralized by interests in a pool of 49 mortgage assets having a principal balance of $699.2 million (the "2021-FL6 Mortgage Assets"). The sale of the 2021-FL6 Mortgage Assets to BSPRT 2021-FL6 Issuer, Ltd. is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL6 Issuer, Ltd.

Repurchase Agreements, Commercial Mortgage Loans

We have entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility and Barclays Repo Facility, the "Repo Facilities").

The Repo Facilities are financing sources through which we may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.

We expect to use the advances from these Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

The Repo Facilities 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 as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in our liquidity position.

80

The details of our Repo Facilities at September 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

As of September 30, 2021
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility	$	400,000	$	114,584	$	2,821	2.14	%	10/6/2022
CS Repo Facility (2)	200,000		61,788		2,432		2.95	%	8/11/2022
WF Repo Facility (3)	175,000		102,368		924		1.75	%	11/22/2021
Barclays Revolver Facility (4)	100,000		75,000		223		8.25	%	9/20/2023
Barclays Repo Facility (5)	300,000		196,416		1,512		1.75	%	3/15/2022
Total	$	1,175,000	$	550,156	$	7,912

________________________

(1) For the nine months ended September 30, 2021. Includes amortization of deferred financing costs.

(2) On August 12, 2021, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 11, 2022. Additionally, on November 3, 2021 the committed financing amount was amended from $200 million to $300 million with the option to upsize to $400 million at the Company's discretion.

(3) There are two more one-year extension options available at the Company's discretion. On October 15, 2021 the committed financing amount was upsized from $175 million to $275 million.

(4) On September 8, 2021, the Company amended the maturity date to September 20, 2023. There is one one-year extension option available at the Company's discretion.

(5) There are two one-year extension options available at the Company's discretion.

As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility (2)	$	300,000	$	113,884	$	5,020	2.54	%	10/6/2022
USB Repo Facility (3)	100,000		5,775		599		2.40	%	6/15/2021
CS Repo Facility (4)	200,000		106,971		3,539		2.84	%	8/19/2021
WF Repo Facility (5)	175,000		27,150		1,041		2.50	%	11/21/2021
Barclays Revolver Facility (6)	100,000		—		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.

(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.

(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.

(6) There is one one-year extension option available at the Company's discretion.

(7) Includes two one-year extensions at the Company's option.

Other financing and loan participation - Commercial Mortgage Loans

On March 23, 2020, the Company transferred $15.2 million of its interest in a term loan to Sterling National Bank ("SNB") via a participation agreement. Since inception, the Company's outstanding loan increased as a result of future fundings, leading to an increase in amount outstanding via the participation agreement. The Company incurred $0.2 million and $0.7 million of interest expense on the SNB term loan for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021 the outstanding participation balance was $37.4 million. The loan matures on February 9, 2023.

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Mortgage Note Payable

On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of September 30, 2021 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $0.3 million and $0.9 million of interest expense for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021 the loan has been assumed by the purchaser of the underlying asset and is no longer held by the Company (see Note 5 - Real Estate Owned).

On September 17, 2021, the Company, in connection with the consolidating joint venture (as discussed in Note 5 - Real Estate Owned), originated a $112.7 million mortgage note payable, of which $88.7 million is eliminated in consolidation (see Note 5 - Real Estate Owned). The remaining mortgage note payable of $24.0 million is disclosed on the consolidated balance sheet. As of September 30, 2021, the loan accrued interest at an annual rate of 3.1% and matures on October 9, 2024.

Unsecured Debt

Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million and $1.2 million of interest expense on the lending agreement with SBL for the three and nine months ended September 30, 2021. As of September 30, 2021, the outstanding balance was $60.0 million.

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 30-90 days and terms are adjusted for current market rates as necessary.

Below is a summary of the Company's MRAs as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Interest Expense		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of September 30, 2021
JP Morgan Securities LLC	$	18,980	$	205	$	24,105	1.14	%	1
Wells Fargo Securities, LLC	—		—		—		N/A		N/A
Goldman Sachs International	—		37		—		N/A		N/A
Barclays Capital Inc.	27,551		467		36,162		1.28	%	50
Credit Suisse AG	—		—		—		N/A		N/A
Citigroup Global Markets, Inc.	—		81		—		N/A		N/A
Total/Weighted Average	$	46,531	$	790	$	60,267	1.22	%	30
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	—		1,057		—		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	—		905		—		N/A		N/A
Citigroup Global Markets, Inc.	53,788		2,532		71,723		1.70	%	29
Total/Weighted Average	$	186,828	$	8,719	$	243,373	2.79	%	33

________________________

(1) Includes $60.3 million and $72.2 million of CLO notes, held by the Company, which are eliminated within the real estate securities, at fair value line in the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

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The following tables summarize our Repurchase Agreements, Commercial Mortgage Loans and our MRAs for the nine months ended September 30, 2021, 2020 and 2019, respectively:

	As of September 30, 2021
	Amount Outstanding						Average Outstanding Balance
	Q1		Q2		Q3		Q1		Q2		Q3
Repurchase Agreements, Commercial Mortgage Loans	$	152,925	$	287,462	$	550,156	$	340,485	$	282,891	$	331,871
Repurchase Agreements, Real Estate Securities	$	88,272	$	46,510	$	46,531	$	123,322	$	57,301	$	46,527
	As of September 30, 2020
	Amount Outstanding						Average Outstanding Balance
	Q1		Q2		Q3		Q1		Q2		Q3
Repurchase Agreements, Commercial Mortgage Loans	$	234,524	$	226,224	$	183,033	$	282,282	$	238,280	$	197,632
Repurchase Agreements, Real Estate Securities	$	496,880	$	335,256	$	177,541	$	412,809	$	351,202	$	316,229
	As of September 30, 2019
	Amount Outstanding						Average Outstanding Balance
	Q1		Q2		Q3		Q1		Q2		Q3
Repurchase Agreements, Commercial Mortgage Loans	$	370,889	$	132,870	$	111,937	$	357,850	$	337,970	$	132,126
Repurchase Agreements, Real Estate Securities	$	22,078	$	85,022	$	244,308	$	52,711	$	84,179	$	181,198

The use of our warehouse lines is dependent upon a number of factors including but not limited to: origination volume, loan repayments and prepayments, our use of other financing sources such as collateralized loan obligations, our liquidity needs and types of loan assets and underlying collateral that we hold.

During the nine months ended September 30, 2021, the maximum average outstanding balance was $475.5 million, of which $363.6 million was related to repurchase agreements on our commercial mortgage loans and $111.9 million for repurchase agreements on our real estate securities.

During the nine months ended September 30, 2020, the maximum average outstanding balance was $721.0 million, of which $452.8 million was related to repurchase agreements on our commercial mortgage loans and $268.2 million for repurchase agreements on our real estate securities.

During the nine months ended September 30, 2019, the maximum average outstanding balance was $565.1 million, of which $483.2 million was related to repurchase agreements on our commercial mortgage loans and $81.9 million for repurchase agreements on our real estate securities.

Private Placements

Since February 2018, we have been conducting offerings of our common stock, Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock in offerings exempt from the registration requirements of the Securities Act.

There were no issuances of common stock, Series A Preferred Stock or Series C Preferred Stock during the nine months ended September 30, 2021.

As of September 30, 2021, we had no outstanding binding purchase commitments for common stock, Series A Preferred Stock or Series C Preferred Stock.

On March 15, 2021, the Company and SBL entered into an agreement pursuant to which SBL agreed to (i) exchange the 14,949 shares of the Series A Preferred Stock it held for an equal amount of Series D Preferred Stock and (ii) purchase from the Company an additional 3,000 newly issued shares of Series D Preferred Stock for $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock). The transaction settled on March 18, 2021.

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The following table summarizes the issuance of Series D Preferred Stock in these offerings (dollars in thousands, except share amounts):

	Total
	Shares Issued	Proceeds
Balance, December 31, 2020	—	$	—
January 2021	—	—
February 2021	—	—
March 2021	17,950	89,722
April 2021	—	—
May 2021	—	—
June 2021	—	—
July 2021	—	—
August 2021	—	—
September 2021	—	—
Ending Balance September 30, 2021	17,950	$	89,722

As of September 30, 2021, we had no outstanding binding purchase commitments for Series D Preferred Stock.

The following tables present the activity in the Company's Series A Preferred Stock for the periods ended September 30, 2021 and September 30, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	40,515	$	202,292
Exchanged for Series D Preferred Stock	(14,950)	(74,748)
Dividends paid in Preferred Stock	2	5
Offering costs	—	(14)
Amortization of offering costs	—	68
Ending Balance September 30, 2021	25,567	$	127,603
	Shares	Amount
Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	1	4
Offering costs	—	(9)
Amortization of offering costs	—	71
Ending Balance, September 30, 2020	40,515	$	202,280

The following table presents the activity in the Company's Series C Preferred Stock for the period ended September 30, 2021 and September 30, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	1,400	$	6,962
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	—
Amortization of offering costs	—	7
Ending Balance, September 30, 2021	1,400	$	6,969

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	Shares	Amount
Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(11)
Amortization of offering costs	—	6
Ending Balance, September 30, 2020	1,400	$	6,961

The following table present the activity in the Company's Series D Preferred Stock for the three months ended September 30, 2021 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	—	$	—
Issuance of Preferred Stock	17,950	89,748
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(83)
Amortization of offering costs	—	12
Ending Balance, September 30, 2021	17,950	$	89,677

As of September 30, 2020 the Company did not have any Series D Preferred Stock outstanding.

Distributions

In order to maintain its election to qualify as a REIT, we 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.

Distributions on our common stock are payable when authorized and declared by our board of directors.

Dividends payable on each share of Series A, Series C and Series D Preferred Stock are generally equal to the quarterly dividend that would have been paid had such share of Preferred Stock been converted to a share of common stock, except to the extent common stock dividends have been reduced below certain specified levels. To the extent dividends on shares of Preferred Stock are not authorized and declared by our board of directors and paid by the Company monthly, the dividend amounts will accrue.

In April 2020, our board of directors unanimously approved a transition in the timing of its dividend payments, if any, to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly accrual and payment basis. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis. On June 28, 2021, we temporarily suspended the DRIP and as a result, DRIP participants, along with all other holders of the Company’s equity securities, received their second and third quarter 2021 dividends in cash.

In September 2021, our board of directors declared the following third quarter 2021 dividends: (i) a quarterly cash dividend of $0.355 per share (equivalent to $1.42 per annum), an increase of $0.08 per share compared to the second quarter of 2021, which was paid in October 2021 to holders of record on September 30, 2021, and (ii) a third quarter dividend of $106.22 per share on our Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, which was paid in October 2021 to holders of record on September 30, 2021.

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The below table shows the distributions paid on shares outstanding of common stock during the nine months ended September 30, 2021 and September 30, 2020 (dollars in thousands):

Nine Months Ended September 30, 2021
Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 4, 2021	$	9,652	$	2,584
April 1, 2021	9,603		2,530
July 8, 2021	12,170		—
Total	$	31,425	$	5,114

    

Nine Months Ended September 30, 2020
Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 2, 2020	$	4,154	$	1,211
February 5, 2020	4,177		1,210
March 2, 2020	3,919		1,130
April 1, 2020	5,413		—
July 1, 2020	9,463		2,679
Total	$	27,126	$	6,230

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

	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Distributions:
Distributions paid in Cash	$	12,170			$	9,463			$	31,425			$	27,126
Distributions Reinvested	—				2,679				5,114				6,230
Total Distributions	$	12,170			$	12,142			$	36,539			$	33,356
Source of Distribution Coverage:
Net Income	$	12,170	100.0	%	$	9,463	77.9	%	$	31,425	86.0	%	$	10,466	31.4	%
Available Cash on hand	—		—	%	—		—	%	—		—	%	16,660		49.9	%
Common Stock Issued Under DRIP	—		—	%	2,679		22.1	%	5,114		14.0	%	6,230		18.7	%
Total Sources of Distributions	$	12,170	100.0	%	$	12,142	100.0	%	$	36,539	100.0	%	$	33,356	100.0	%
Net Income applicable to common stock (GAAP)	$	29,490			$	16,739			$	75,905			$	10,466

Cash Flows

Cash Flows for the Nine Months Ended September 30, 2021

Net cash provided by operating activities for the nine months ended September 30, 2021 was $163.0 million. Cash inflows were primarily driven by net income of $98.7 million, coupled with net inflows of $67.6 million related to originations of and proceeds from sales of commercial mortgage loans, measured at fair value.

Net cash used in investing activities for the nine months ended September 30, 2021 was $504.9 million. Cash outflows were primarily driven by origination and purchase of $1,388.8 million of commercial mortgage loans, held for investment and net purchase/sale of real estate owned assets of $104.1 million. Outflows were offset by proceeds from the sale of real estate securities of $178.0 million, principal repayments on commercial mortgage loans, held for investment of $771.9 million and proceeds from sale of commercial mortgage loans, held for sale of $38.2 million.

Net cash provided by financing activities for the nine months ended September 30, 2021 was $350.6 million. Cash inflows were primarily driven by net proceeds from borrowings on CLOs and repurchase agreements - commercial mortgage loans of $170.1 million and $273.8 million, respectively, net borrowings on unsecured debt and mortgage note payable of $60.0 million and $23.9 million, respectively, and proceeds from issuances of redeemable convertible preferred stock of $15.0 million. Inflows were offset by net repayments on our CMBS MRAs of $140.3 million. Additionally, $42.1 million was used in cash distributions to stockholders and $11.4 million was used for stock repurchases.

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Cash Flows for the Nine Months Ended September 30, 2020

Net cash provided by operating activities for the nine months ended September 30, 2020 was $195.4 million. Cash inflows were primarily driven by net proceeds from originations of and proceeds from sales of commercial mortgage loans, measured at fair value for $148.4 million and net interest proceeds related to interest income and interest expense for $88.5 million. Inflows were partially offset by the payment of $37.0 million of operating expenses.

Net cash provided by investing activities for the nine months ended September 30, 2020 was $237.9 million. Cash inflows were primarily driven by proceeds from principal repayments of $880.1 million received on commercial mortgage loans and proceeds from the sale of real estate securities of $346.2 million. Inflows were partially offset by the origination and acquisition of $851.5 million of commercial mortgage loans and the purchase of real estate securities of $148.6 million.

Net cash used in financing activities for the nine months ended September 30, 2020 was $437.9 million. Cash outflows were primarily driven by net repayment on our Repo Facilities, CMBS MRAs, and CLOs of $68.3 million, $216.8 million and $150.8 million respectively. Additionally, $36.7 million was used in cash distributions to stockholders and $10.3 million was used for stock repurchases. Outflows were partially offset by proceeds from issuances of common stock for $10.9 million and borrowing on the other financing and loan participation and the mortgage note payable for $34.5 million.

Election as a REIT

We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013. As a REIT, if we meet certain organizational and operational requirements and distribute at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders in a year, we will not be subject to U.S. federal income tax to the extent of the income that we distribute. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and U.S. federal income and excise taxes on our undistributed income.

Contractual Obligations and Commitments

Our contractual obligations, excluding interest obligations (as amounts are not fixed or determinable), as of September 30, 2021 are summarized as follows (dollars in thousands):

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
Unfunded loan commitments (1)	$	26,989	$	111,619	$	290,796	$	—	$	429,404
Repurchase agreements - commercial mortgage loans	360,572		189,584		—		—		550,156
Repurchase agreements - real estate securities	46,531		—		—		—		46,531
CLOs (2)	—		—		—		1,809,280		1,809,280
Mortgage Note Payable	—		—		—		23,998		23,998
Total	$	434,092	$	301,203	$	290,796	$	1,833,278	$	2,859,369

________________________

(1) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.

(2) Excludes $300.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line of the consolidated balance sheet as of September 30, 2021.

Related Party Arrangements

Amended Advisory Agreement

Refer to “Note 11 - Related Party Transactions and Arrangements” for a summary of the Company’s Advisory Agreement with the Advisor and amounts paid to the Advisor pursuant to the Advisory Agreement for the three and nine months ended September 30, 2021 and 2020.

Lending Agreement with Stockholder

Pursuant to a lending and security agreement with SBL, which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million and $1.2 million interest expense on the lending agreement with SBL for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021 there was $60.0 million outstanding under the lending agreement.

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SBL also holds 17,950 shares of the Company's outstanding shares of Series D Preferred Stock, of which 14,950 shares were acquired in exchange for an equivalent number of shares of Series A Preferred Stock in March 2021. SBL also acquired an additional 3,000 shares of Series D Preferred Stock at the liquidation preference of $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock) in such transaction.

Other Related Party Arrangement

On September 17, 2021, the Company, in connection with the consolidating joint venture (as discussed in Note 5 - Real Estate Owned), originated a $112.7 million mortgage note payable, of which $88.7 million is eliminated in consolidation (see Note 5 - Real Estate Owned). The remaining mortgage note payable of $24.0 million is disclosed on the consolidated balance sheet. As of September 30, 2021, the loan accrued interest at an annual rate of 3.1% and matures on October 9, 2024.

Off Balance Sheet Arrangements

We currently have no off balance sheet arrangements as of September 30, 2021 and through the date of the filing of this Form 10-Q.

Distributable Earnings

Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss), adjusted for (i) non-cash CLO amortization acceleration and amortization over our expected useful life of our CLOs, (ii) unrealized gains and losses on loans and derivatives, including CECL reserves and impairments, (iii) non-cash equity compensation expense, (iv) depreciation and amortization, (v) non-cash incentive fee accruals, and (vi) certain other non-cash items.

We believe that Distributable Earnings provides meaningful information to consider in addition to our GAAP results. We believe Distributable Earnings is a useful financial metric for existing and potential future holders of our common stock as historically, over time, Distributable Earnings has been an indicator of our dividends per share. As a REIT, we generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments, and therefore we believe our dividends are one of the principal reasons stockholders may invest in our common stock. Further, Distributable Earnings helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations and is one of the performance metrics we consider when declaring our dividends.

Distributable Earnings does not represent net income (loss) and should not be considered as an alternative to GAAP net income (loss). Our methodology for calculating Distributable Earnings may differ from the methodologies employed by other companies and thus may not be comparable to the Distributable Earnings reported by other companies.

The following table provides a reconciliation of GAAP net income to Distributable Earnings as of September 30, 2021 and September 30, 2020 (amounts in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
GAAP Net Income	$	38,495	$	21,497	$	98,651	$	21,911
Adjustments:
CLO amortization acceleration (1)	(867)		(691)		(2,401)		953
Unrealized (gain)/loss on financial instruments (2)	(325)		(4,579)		(401)		738
Incentive fees	4,280		—		8,046		—
Depreciation and amortization	—		591		812		1,765
Increase/(decrease) in provision for credit losses	(1,613)		(3,710)		(5,452)		14,929
Impairment losses on real estate owned assets	—		—		—		398
Distributable earnings	$	39,970	$	13,108	$	99,255	$	40,694
Average Equity	$	1,063,428	$	974,733	$	1,044,583	$	966,519
Annualized GAAP ROE	14.5%		8.8%		12.6%		3.0%
Annualized distributable earnings ROE	15.0%		5.4%		12.7%		5.5%
Distributable earnings per share	$	0.69	$	0.23	$	1.73	$	0.71

________________________

(1) Adjusted for non-cash CLO amortization acceleration to effectively amortize issuance costs of our CLOs over the expected lifetime of the CLOs. We assume our CLOs will be outstanding for four years and amortized the financing costs over four years in our distributable earnings as compared to effective yield methodology in our GAAP earnings.

(2) Adjusted for unrealized gains and losses on loans and derivatives.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Credit Risk

Our investments are subject to a high degree of credit risk. Credit risk is the exposure to loss from loan defaults. Default rates are subject to a wide variety of factors, including, but not limited to, borrower financial condition, property performance, property management, supply/demand factors, construction trends, consumer behavior, regional economics, interest rates, the strength of the U.S. economy, and other factors beyond our control. All loans are subject to a certain probability of default. We manage credit risk through the underwriting process, acquiring our investments at the appropriate discount to face value, if any, and establishing loss assumptions. We also carefully monitor the performance of the loans, as well as external factors that may affect their value.

Capital Market Risk

We are exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under repurchase obligations or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt capital markets to inform our decisions on the amount, timing and terms of capital we raise.

The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. We have and may continue to receive margin calls from our lenders as a result of the decline in the market value of the assets pledged by us to our lenders under our repurchase agreements and warehouse credit facilities, and if we fail to resolve such margin calls when due by payment of cash or delivery of additional collateral, the lenders may exercise remedies including demanding payment by us of our aggregate outstanding financing obligations and/or taking ownership of the loans or other assets securing the applicable obligations and liquidating them at inopportune prices.

Interest Rate 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. We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.

As of September 30, 2021 and December 31, 2020, our portfolio included 144 and 133 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.

For the LIBOR sensitivity range, a reduction in LIBOR results in an increase in our portfolio return. This is driven by the LIBOR floor in place for majority of our commercial mortgage loans, held for investment. In contrast, the majority of our financing instruments do not have LIBOR floors. The presence of a LIBOR floor on interest-bearing assets coupled with lack of LIBOR floor on the majority of interest bearing liabilities allows the portfolio to generate a higher return for a decrease in LIBOR rate compared to increase in LIBOR rate for the LIBOR range presented:

	Estimated Percentage Change in Interest Income Net of Interest Expense
Change in Interest Rates	September 30, 2021		December 31, 2020
(-) 25 Basis Points	1.47	%	2.16	%
Base Interest Rate	—	%	—	%
(+) 50 Basis Points	(4.02)	%	(5.87)	%
(+) 100 Basis Points	(5.47)	%	(9.86)	%

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Real Estate Risk

The market values of commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, the impacts of the COVID-19 pandemic, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; and demographic factors. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses.

Market Risk

As a result of the closing of the Capstead merger on October 19, 2021 we hold a significant amount of ARM securities. Changes in the level of interest rates and spreads can significantly impact the value of these assets. We may utilize a variety of financial instruments in order to limit the adverse effects of interest rates on our results.

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 Rules 13a-15(e) and 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 Control Over Financial Reporting

During the quarter ended September 30, 2021, there were no changes in our internal control over financial reporting 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.

Refer to “Litigation and Regulatory Proceedings” in “Note 10 – Commitments and Contingencies”. The Company believes that these matters, individually or in the aggregate, will not have a material impact on the Company’s financial condition, operating results or cash flows.

Item 1A. Risk Factors.

Our potential risks and uncertainties are presented in the section entitled "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2020. Except as set forth below, there have been no material changes from these risk factors.

Risks Related to the Capstead Merger

We may not be able to realize the anticipated benefits of the merger on the anticipated timeframe or at all.

The merger involved the combination of two companies that operated as independent public companies. We may encounter the following difficulties in integrating the acquired assets into our operations:

•we may not be able to convert Capstead’s securities portfolio into cash at the prices we expected when we entered into the merger agreement, or in the timeframe we expected;

•we may not be able to successfully redeploy the capital generated from Capstead’s assets into investments made pursuant to the Company’s traditional investment strategies at return thresholds consistent with our historical returns, or within the expected timetable;

•we may encounter unknown liabilities and unforeseen increased expenses, delays or conditions associated with the merger; and

•we may experience performance shortfalls as a result of the diversion of management’s attention caused by the merger.

These challenges could result in the distraction of the Company’s management, the disruption of the Company’s ongoing business or inconsistencies in its operations, services, standards, controls, policies and procedures, any of which could adversely affect the Company’s ability to deliver investment returns to stockholders, to maintain relationships with its key stakeholders, to achieve the anticipated benefits of the merger, or could otherwise materially and adversely affect its business and financial results.

Changes in interest rates, whether increases or decreases, may adversely affect yields on the securities acquired in the Merger.

The securities we acquired in the Capstead acquisition primarily consist of residential adjustable-rate mortgage pass-through securities issued and guaranteed by government-sponsored enterprises or by an agency of the federal government (“ARM Agency Securities”). Only a portion of coupon interest rates on the ARM loans underlying these securities reset each month and the terms of these ARM loans generally limit the amount of any increases during any single interest rate adjustment period and over the life of a loan. During periods of relatively low short term interest rates, declines in the indices used to determine coupon interest rate resets for ARM loans may adversely affect yields on the Capstead ARM securities as the underlying ARM loans reset at lower rates.

An increase in prepayments may adversely affect the fair value of the Capstead portfolio.

Prepayment expectations are an essential part of pricing mortgage investments in the marketplace and the speed of prepayments can vary widely from month to month and across individual investments; however, until we have liquidated the Capstead portfolio, prolonged periods of high mortgage prepayments could significantly reduce the expected life of the Capstead portfolio. Therefore, actual yields we realize can be lower due to faster amortization of investment premiums, which can adversely affect earnings. High levels of mortgage prepayments can also lead to larger than anticipated demands on our liquidity from our lending counterparties. Additionally, periods of high prepayments can adversely affect pricing for most of Capstead’s mortgage investments and, as a result, book value per common share can be adversely affected due to declines in the fair value of the remaining Capstead portfolio.

Periods of illiquidity in the mortgage markets may reduce amounts available under secured borrowing arrangements due to declines in the perceived value of related collateral and may reduce the number of counterparties willing to lend to us and/or the amounts individual counterparties are willing to lend, both of which could adversely impact our liquidity, financial condition and earnings.

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Capstead financed its portfolio by pledging individual securities as collateral under uncommitted secured borrowing arrangements. If the perceived market value of the pledged collateral of the Capstead portfolio as determined by the lenders under these arrangements declines, we may be subject to margin calls wherein the lender requires us to pledge additional collateral to reestablish the agreed-upon margin percentage. Because market illiquidity tends to put downward pressure on asset prices, we may be presented with substantial margin calls during such periods. If we are unable or unwilling to pledge additional collateral, lenders can liquidate the collateral or seek other remedies, potentially under adverse market conditions, resulting in losses. At such times we may determine that it is prudent to sell assets to improve our ability to pledge sufficient collateral to support our remaining secured borrowings, which could result in losses. In addition, lower pricing levels for remaining investments will lead to declines in book value per common share.

Our ability to achieve our investment objectives depends on our ability to re-establish or roll maturing secured borrowings on a continuous basis and none of our counterparties are obligated to enter into new borrowing transactions at the conclusion of existing transactions. During periods of market illiquidity or due to perceived credit deterioration of the collateral pledged or of us, a lender may require that less favorable asset pricing procedures be employed, margin requirements be increased and/or may choose to limit or completely curtail lending to us. If a counterparty chooses not to roll a maturing borrowing, we must pay off the borrowing, generally with cash available from another secured borrowing arrangement entered into with another counterparty. If we determine that we do not have sufficient borrowing capacity with our remaining counterparties, we could be forced to sell assets under potentially adverse market conditions, which could result in losses. An industry-wide reduction in the availability of secured borrowings could adversely affect pricing levels for mortgage investments leading to declines in our liquidity and book value per common share. Under these conditions, we may determine that it is prudent to sell assets to improve our ability to pledge sufficient collateral to support our remaining borrowings, which could result in losses. In addition, lower pricing levels for remaining investments will lead to declines in book value per common share.

We incurred direct and indirect costs as a result of the merger with Capstead

We incurred substantial expenses in connection with and as a result of completing the merger with Capstead and expect to incur additional expenses in connection with integrating the acquired business. Factors beyond our control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately.

Because we have a large number of stockholders subject to lock-up restrictions which expire six months after the effective time of the merger, there may be significant pent-up demand to sell shares of our common stock once applicable lock-up restrictions expire. Significant sales of shares of our common stock, or the perception that significant sales of such shares could occur, may adversely impact the price of shares of our common stock.

Pursuant to certain lock-up agreements and the restructuring of our equity prior to the effective time of the Merger, approximately 94% of the shares of our common stock (including shares of common stock underlying preferred shares that automatically convert to common stock) which were outstanding prior to the effective time of the Merger are prohibited from being publicly traded for six months following the Merger (i.e., until April 19, 2022). Prior to its listing in connection with the closing of the Merger on October 19, 2021, our common stock had never been listed on any national securities exchange and the ability of stockholders to liquidate their investments was limited. As a result, there may be significant pent-up demand to sell shares of our common stock once the lock-up restrictions referenced above expire. A large volume of sales of shares of our common stock could decrease the prevailing market price of shares of our common stock and could impair the our ability to raise additional capital through the sale of equity securities in the future. Even if actual sales volumes are not elevated, the mere perception of the possibility of these sales could depress the market price of shares of our common stock and have a negative effect on the our ability to raise capital in the future.

We have a significant amount of indebtedness and may need to incur more in the future.

We have substantial indebtedness following completion of the Merger. In addition, in connection with executing our business strategies following the Merger, we expect to evaluate the possibility of originating, funding, and acquiring additional commercial real estate debt and making other strategic investments, and we may elect to finance these endeavors by incurring additional indebtedness. The amount of such indebtedness could have material adverse consequences, including:

•hindering our ability to adjust to changing market, industry or economic conditions;

•limiting our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms or to fund acquisitions or emerging businesses;

•limiting the amount of cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses;

•making US more vulnerable to economic or industry downturns, including interest rate increases; and

•placing US at a competitive disadvantage compared to less leveraged competitors.

92

Moreover, we may be required to raise substantial additional capital to execute our business strategy. Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. If we are unable to obtain additional financing, our credit ratings could be further adversely affected, which could further raise our borrowing costs and further limit our future access to capital and our ability to satisfy our obligations under our indebtedness.

If we are unable to implement and maintain effective internal controls over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a newly-listed public company, beginning with the 2022 fiscal year, our independent registered public accounting firm will be required to formally attest to the effectiveness of our internal controls over financial reporting on an annual basis. The process of designing, implementing and testing the internal controls over financial reporting required to comply with this obligation is time consuming, costly and complicated. If we identify material weaknesses in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to assert that our internal controls over financial reporting are effective or if the independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. We could also become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.

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

Issuer Purchases of Equity Securities

Share repurchase activity under the SRP (which was terminated in October 2021) during the nine months ended September 30, 2021 was as follows:

	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2020	8,094	4,121,735	$	19.88
January 1 - January 31, 2021(1)	1,355	525,580	17.53
February 1 - February 28, 2021	—	—	N/A
March 1 - March 31, 2021(1)	—	—	N/A
April 1 - April 30, 2021	—	—	N/A
May 1 - May 31, 2021(1)	—	—	N/A
June 1 - June 30, 2021	—	—	N/A
July 1 - July 31, 2021(2)	1,424	123,257	17.88
August 1 - August 31, 2021	—	—	N/A
September 1 - September 30, 2021(2)	—	—	N/A
Cumulative as of September 30, 2021	10,873	4,770,572	$	19.57

________________________

(1) Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2020, including 15,772 and 3,784 shares which for administrative reasons were processed in March 2021 and May 2021, respectively. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,881,556 shares were not fulfilled for the second semester of 2020.

(2) Reflects shares repurchased pursuant to repurchase requests submitted for the first semester of 2021, including 1,776 shares which for administrative reasons were processed in September 2021. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 761 shares were not fulfilled for the first semester of 2021.

Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

None.

94

Item 6. Exhibits.

EXHIBITS INDEX

The following exhibits are included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of July 25, 2021, by and among Benefit Street Partners Realty Trust, Inc., Rodeo Sub I, LLC, Capstead Mortgage Corporation and Benefit Street Partners L.L.C. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on July 26, 2021).
2.2	First Amendment to Agreement and Plan of Merger, dated September 22, 2021, by and among Benefit Street Partners Realty Trust, Inc., Rodeo Sub I, LLC, Capstead Mortgage Corporation and Benefit Street Partners L.L.C. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on September 22, 2021)
3.1	Articles of Amendment to the Articles of Amendment and Restatement of Benefit Street Partners Realty Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on October 8, 2021)
3.2	Articles Supplementary of Franklin BSP Realty Trust, Inc., effective October 12, 2021, relating to Series F Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on October 8, 2021)
3.3	Amended and Restated Bylaws of Franklin BSP Realty Trust, Inc. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC on October 8, 2021)
3.4	Articles Supplementary of Franklin BSP Realty Trust, Inc., effective October 19, 2021, relating to Series E Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on October 21, 2021)
10.1	Amendment No. 1 to Amended and Restated Advisory Agreement, dated August 18, 2021, by and among Benefit Street Partners Realty Trust, Inc., Benefit Street Partners Realty Operating Partnership, L.P. and Benefit Street Partners, L.L.C. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 18, 2021)
10.2*	Third Amendment to Credit Agreement, dated as of September 8, 2021, among the Company, BSPRT BB Loan, LLC and Barclays Bank PLC.
31.1*	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	XBRL (eXtensible Business Reporting Language). The following materials from Benefit Street Partners Realty Trust, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.

____________________________________________

*Filed herewith.

95

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Franklin BSP Realty Trust, Inc.
Dated:	November 10, 2021	By	/s/ Richard J. Byrne
			Name: Richard J. Byrne
			Title: Chief Executive Officer and President
			(Principal Executive Officer)
Dated:	November 10, 2021	By	/s/ Jerome S. Baglien
			Name: Jerome S. Baglien
			Title: Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

96

EX-10.2

EXECUTION COPY

THIRD AMENDMENT TO CREDIT AGREEMENT

THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of September 8, 2021 (this “Third Amendment”), among BSPRT BB LOAN, LLC, a Delaware limited liability company (“Borrower Representative”), BSPRT FINANCE SUB-LENDER II, LLC, a Delaware limited liability company (“BSPRT Finance Sub-Lender” and, together with the Borrower Representative, the “Borrowers”, and each a “Borrower”), BENEFIT STREET PARTNERS REALTY TRUST, INC., a Maryland corporation (the “Guarantor”), the several banks and other financial institutions or entities party to this Agreement (the “Lenders”) and BARCLAYS BANK PLC, as administrative agent (in such capacity, the “Administrative Agent”).

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement (as defined below).

WITNESSETH:

WHEREAS, the parties hereto have entered into that certain Credit Agreement, dated as of September 19, 2017 (as amended by that certain First Amendment to Credit Agreement, dated as of July 30, 2018, and Second Amendment to Credit Agreement, dated as of September 12, 2019 and as further amended, restated, supplemented or otherwise modified from time to time, including pursuant to this Third Amendment, “Credit Agreement”);

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders (a) increase the Revolving Credit Commitment during the Specified Commitment Increase Period (as defined in the Credit Agreement, as amended hereby), (b) extend the Revolving Credit Termination Date by two years and (c) make certain other changes to the Credit Agreement as further described herein; and

WHEREAS, the Administrative Agent and the Lenders have agreed to so amend the Credit Agreement on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the continued performance by the Borrowers and the other Loan Parties of their respective promises and obligations under the Credit Agreement and the other Loan Documents, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendments to Credit Agreement. As of the Third Amendment Effective Date (as defined below), the Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the redline comparison of the Credit Agreement attached as Exhibit 1 hereto.

2.Conditions to Effectiveness. This Third Amendment shall become effective as of the first Business Day (the “Third Amendment Effective Date”) on which each of the following conditions precedent shall have been satisfied:

(a)The Administrative Agent (unless otherwise noted below) shall have received each of the following (unless otherwise agreed to or waived by the Administrative Agent), in form and substance satisfactory to the Administrative Agent and dated as of the Third Amendment Effective Date:

(i)this Third Amendment, duly executed by the Borrowers, the Guarantor, the Lenders party thereto and the Administrative Agent;

008330-0449-41102985.5

(ii)the Acknowledgment and Consent Agreement in the form attached hereto as Exhibit 2hereto (the “Acknowledgment and Consent”), duly executed by the Borrowers, the Guarantor and the Intermediate Pledgors;

(iii)the legal opinion of Nelson Mullins Riley & Scarborough LLP, special counsel to the Loan Parties addressed to the Administrative Agent and the Lenders;

(iv)certified resolutions of each Loan Party, authorizing its entry into the Third Amendment and the other documents or certificates to be delivered pursuant to this Third Amendment to which it is a party;

(v)(i) a signed certificate of a Responsible Officer, who shall certify the names of the Persons authorized, on the date hereof, to sign the Third Amendment and other documents or certificates to be delivered pursuant to this Third Amendment on behalf of the Loan Parties, together with the true signatures of each such Person (the Administrative Agent may conclusively rely on such certificate until it shall receive a further certificate canceling or amending the prior certificate and submitting the signatures of the Persons named in such further certificate and (ii) true and complete copies of the organizational documents of the Loan Parties, together with certificates of existence and, if applicable, good standing (or other similar instruments), in each case certified by a Responsible Officer of each Loan Party to be correct and complete copies thereof and in effect on the date hereof, in each case satisfactory to the Administrative Agent;

(vi)a Closing Certificate of a Responsible Officer from each Loan Party, dated the Third Amendment Effective Date, substantially in the form of Exhibit C to the Credit Agreement;

(vii)a Solvency Certificate in substantially the form delivered on the Closing Date from the chief financial officer of the Guarantor certifying that the Guarantor and its Subsidiaries, considered as a whole, after giving effect to the transactions contemplated hereby to occur on the Third Amendment Effective Date, are Solvent;

(viii)a Compliance Certificate, substantially in the form of Exhibit B to the Credit Agreement, containing all information and calculations necessary for determining pro forma compliance with Section 5.2 of the Credit Agreement as of the Third Amendment Effective Date; and

(ix)a Borrowing Base Certificate.

(b)All governmental and third party approvals necessary in connection with the continuing operations of the Loan Parties and the transactions contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the financing contemplated hereby.

(c)The Lenders, the Arranger and the Administrative Agent shall have received all fees required to be paid, and all actual out-of-pocket expenses for which invoices have been presented (including reasonable fees, actual out-of-pocket disbursements and other charges of outside counsel to the Administrative Agent), on or before the Third Amendment Effective Date.

(d)At least three business days prior to the Third Amendment Effective Date, any Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, shall deliver to the Administrative Agent a Beneficial Ownership Certification in relation to such Borrower.

008330-0449-41102985.5

3.Representations and Warranties. To induce the Administrative Agent and the Lenders to enter into this Third Amendment, the Borrowers and the Guarantor hereby jointly and severally represent and warrant to the Administrative Agent and Lenders on the date hereof that:

(a)The representations and warranties set forth in Section 3of the Credit Agreement and in the other Loan Documents are true and correct in all material respects (or, in the case of any such representation and warranty already qualified by materiality or Material Adverse Effect, in all respects) on and as of the Third Amendment Effective Date (or, in the case of any such representation or warranty expressly stated to have been made as of a specific date, as of such specific date); provided that, (x) the representations and warranties contained in Section 3.1 of the Credit Agreement shall be made with respect to the most recent financial statements delivered pursuant to Section 5.1 of the Credit Agreement and (y) the representations and warranties contained in Section 3.2 of the Credit Agreement shall be made with respect to the most recent audited financial statements delivered pursuant to Section 5.1 of the Credit Agreement;

(b)The execution, delivery and performance of this Third Amendment and the Acknowledgment and Consent, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation. No Requirement of Law or Contractual Obligation applicable to any Loan Party would reasonably be expected to have a Material Adverse Effect;

(c)Each Loan Party has the corporate or other power and authority, and the legal right, to make, deliver and perform this Third Amendment and the Acknowledgment and Consent (as applicable) and, in the case of the Borrowers, to borrow under the Credit Agreement. Each Loan Party has taken all necessary corporate or other action to authorize the execution, delivery and performance of this Third Amendment and the Acknowledgment and Consent (as applicable) and to authorize the borrowings on the terms and conditions of this Third Amendment. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or the execution, delivery, performance, validity or enforceability of this Third Amendment or the Acknowledgment and Consent, except consents, authorizations, filings and notices described in Schedule 3.4 of the Credit Agreement, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect. This Third Amendment and the Acknowledgment and Consent have been duly executed and delivered on behalf of each Loan Party that is a party thereto. This Third Amendment constitutes, and the Acknowledgment and Consent upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law); and

(d)At the time of and after giving effect to this Third Amendment, no Default or Event of Default shall have occurred and be continuing.

4.Reference to and Effect on the Loan Documents.

(a)As of the Third Amendment Effective Date, each reference in the Credit Agreement and the other Loan Documents to the “Credit Agreement”, “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement, as amended hereby.

008330-0449-41102985.5

(b)Except to the extent amended hereby, the Credit Agreement and all of the other Loan Documents shall remain in full force and effect and each is hereby ratified and confirmed.

(c)The execution, delivery and effectiveness of this Third Amendment shall not operate as a waiver of any Default or Event of Default or of any right, power, privilege or remedy of the Administrative Agent, any Lender under the Credit Agreement or any Loan Document, or constitute a waiver of any provision of the Credit Agreement or any Loan Document.

(d)The Borrowers and the Guarantor hereby confirm that the security interests and Liens granted by the Borrowers and the Guarantor pursuant to the Loan Documents continue to secure the Obligations and that such security interests and Liens remain in full force and effect.

(e)This Third Amendment shall constitute a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

5.Headings. Section headings used herein are for convenience of reference only, are not part of this Third Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Third Amendment.

6.Counterparts; Severability; Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. The provisions of Sections 9.8, 9.9, 9.11, 9.12 and 9.17 of the Credit Agreement are incorporated herein and apply to this Third Amendment mutatis mutandis (except that any references to “Agreement” shall mean this Third Amendment).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGES FOLLOW]

008330-0449-41102985.5

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BSPRT BB LOAN, LLC,

as a Borrower

By: /s/ Micah Goodman _____________
Name: Micah Goodman
Title: Authorized Signatory

BSPRT FINANCE SUB-LENDER II, LLC,

as a Borrower

By: /s/ Micah Goodman _______________
Name: Micah Goodman
Title: Authorized Signatory

BENEFIT STREET PARTNERS REALTY TRUST, INC., as the Guarantor

By: /s/ Micah Goodman _______________
Name: Micah Goodman
Title: Authorized Signatory

[Signature Page to Third Amendment to Credit Agreement]

008330-0449-41102985.5

BARCLAYS BANK PLC,
as Administrative Agent and Lender

By: /s/ Craig Malloy_______________
Name: Craig Malloy
Title: Authorized Signatory

[Signature Page to Third Amendment to Credit Agreement]

008330-0449-41102985.5

EXHIBIT 1

Amended Credit Agreement

[Attached]

008330-0449-41102985.5

EXHIBIT 1 TO THIRD AMENDMENT

$100,000,000 CREDIT AGREEMENT

among

BSPRT BB LOAN, LLC,

and

BSPRT FINANCE SUB-LENDER II, LLC,
as Borrowers,

BENEFIT STREET PARTNERS REALTY TRUST, INC.,
as Guarantor,

The Several Lenders
from Time to Time Parties Hereto,

BARCLAYS BANK PLC,
as Sole Lead Arranger and Bookrunner,

and

BARCLAYS BANK PLC,
as Administrative Agent

Dated as of September 19, 20171

1     Conformed through Third Amendment.

008330-0449-41102985.5

TABLE OF CONTENTS

Page

SECTION 1DEFINITIONS	1
1.1Defined Terms	1
1.2Other Definitional Provisions	30
SECTION 2AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT	30
2.1Revolving Credit Commitments	30
2.2Procedure for Revolving Credit Borrowing	31
2.3Repayment of Loans; Evidence of Debt	31
2.4Extension of Revolving Credit Termination Date	32
2.5Commitment Fees, etc.	34
2.6Termination or Reduction of Revolving Credit Commitments	34
2.7Optional Prepayments	34
2.8Mandatory Prepayments	34
2.9Conversion and Continuation Options	35
2.10Minimum Amounts and Maximum Number of Eurodollar Tranches	35
2.11Interest Rates and Payment Dates	35
2.12Computation of Interest and Fees; Retroactive Adjustments of Applicable Margin	36
2.13Inability to Determine Interest Rate	36
2.14Pro Rata Treatment and Payments	37
2.15Requirements of Law	38
2.16Taxes	39
2.17Indemnity	42
2.18Illegality	42
2.19Change of Lending Office	42
2.20Replacement of Lenders under Certain Circumstances	43
2.21[Intentionally Omitted].	43
2.22Defaulting Lender.	43
2.23Borrower Representative	44
2.24Benchmark Replacement Setting	45
SECTION 3REPRESENTATIONS AND WARRANTIES	46
3.1Financial Condition	46
3.2No Change	46
3.3Corporate Existence; Compliance with Law; Special Purpose Entity	46
3.4Corporate Power; Authorization; Enforceable Obligations	47
3.5No Legal Bar	47
3.6No Material Litigation	47
3.7No Default	47
3.8[Intentionally Omitted]	47
3.9Taxes	48
3.10Federal Regulations	48
3.11Labor Matters	48
3.12ERISA	48
3.13Investment Company Act; Other Regulations	48
3.14[Intentionally Omitted]	48

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TABLE OF CONTENTS

(continued)

            Page

3.15Use of Proceeds	48
3.16Environmental Matters	48
3.17Accuracy of Information, etc	49
3.18Security Documents	49
3.19Representations and Warranties Regarding Borrowing Base Assets	49
3.20Solvency	49
3.21REIT Status; Guarantor Tax Status	49
3.22Insurance	50
3.23Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws	50
SECTION 4CONDITIONS PRECEDENT	50
4.1Conditions to the Closing Date	50
4.2Conditions to Each Extension of Credit	52
4.3Conditions to the Addition of a Borrowing Base Asset	53
4.4Conditions to the Release of a Borrowing Base Asset	54
SECTION 5AFFIRMATIVE COVENANTS	54
5.1Financial Statements	54
5.2Certificates; Other Information	55
5.3Payment of Obligations	56
5.4Conduct of Business and Maintenance of Existence	56
5.5Maintenance of Property; Insurance	56
5.6Inspection of Property; Books and Records; Discussions	56
5.7Notices	57
5.8Further Assurances	59
5.9Servicing of Borrowing Base Assets	59
5.10Cash Management	59
5.11Borrowing Base Reports	60
5.12Taxes	60
5.13Disclosable Events	60
5.14Appraisals	61
5.15Additional Collateral	61
SECTION 6NEGATIVE COVENANTS	61
6.1Financial Condition Covenants	61
6.2Indebtedness	62
6.3Limitation on Liens	62
6.4Limitation on Fundamental Changes	62
6.5Dispositions	62
6.6Restricted Payments	62
6.7Investments	63
6.8Limitation on Modifications of Organizational Documents	63
6.9Transactions with Affiliates	63
6.10[Intentionally Omitted]	63
6.11Limitation on Changes in Fiscal Periods	63
6.12Limitation on Negative Pledge Clauses	63
6.13Limitation on Restrictions on Subsidiary Distributions	63
6.14Limitation on Lines of Business	64

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TABLE OF CONTENTS

(continued)

            Page

6.15[Intentionally Omitted]	64
6.16Limitation on Modifications to Borrowing Base Assets	64
6.17Servicing of Borrowing Base Assets	64
6.18REIT Status	64
6.19[Intentionally Omitted]	64
6.20Special Purpose Entity.	64
6.21[Intentionally Omitted]	64
6.22Disclosable Events	64
SECTION 7EVENTS OF DEFAULT	65
7.1Events of Default	65
SECTION 8THE ADMINISTRATIVE AGENT	67
8.1Appointment	67
8.2Delegation of Duties	67
8.3Exculpatory Provisions	68
8.4Reliance by Administrative Agent	68
8.5Notice of Default	68
8.6Non-Reliance on Administrative Agent and Other Lenders	69
8.7Indemnification	69
8.8Administrative Agent in Its Individual Capacity	69
8.9Successor Administrative Agent	70
8.10Authorization to Release Liens and Guarantees	70
8.11The Arranger	70
8.12No Duty to Disclose	70
8.13Waiver	70
SECTION 9MISCELLANEOUS	71
9.1Amendments and Waivers	71
9.2Notices	72
9.3No Waiver; Cumulative Remedies	72
9.4Survival of Representations and Warranties	73
9.5Payment of Expenses	73
9.6Successors and Assigns	74
9.7Adjustments; Set-off	78
9.8Counterparts	79
9.9Severability	79
9.10Integration	80
9.11Governing Law	80
9.12Submission To Jurisdiction; Waivers	80
9.13Acknowledgements	80
9.14Confidentiality	81
9.15Release of Guarantee Obligations	81
9.16Accounting Changes	82
9.17Waivers of Jury Trial	82
9.18Acknowledgment and Consent to Bail-In of Affected Financial Institutions	82
9.19Joint and Several Liability	82

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ANNEX:

A    Commitments

B    Representations and Warranties Regarding Borrowing Base Assets

SCHEDULES:

1.1(a)    Disqualified Institutions

3.18    Filing Offices

EXHIBITS:

A-1    Form of Guarantee and Collateral Agreement

A-2    Form of Pledge Agreement

B    Form of Compliance Certificate

C    Form of Closing Certificate

D-1    Form of Servicing Agreement Joinder (Situs)

D-2    Form of Servicing Agreement Joinder (Wells)

E    Form of Assignment and Assumption

F    Form of Note

G-1    Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships for U.S. Federal Income Tax Purposes)

G-2    Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships for U.S. Federal Income Tax Purposes)

G-3    Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships for U.S. Federal Income Tax Purposes)

G-4    Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships for U.S. Federal Income Tax Purposes)

H    Form of Borrowing Notice

I    Intentionally Omitted

J    Intentionally Omitted

K    Form of Borrowing Base Certificate

L    Form of Conversion/Continuation Notice

M    Form of Prepayment Notice

    -iv-

CREDIT AGREEMENT, dated as of September 19, 2017, among BSPRT BB LOAN, LLC, a Delaware limited liability company (“Borrower Representative”), BSPRT FINANCE SUB-LENDER II, LLC, a Delaware limited liability company (“BSPRT Finance Sub-Lender” and, together with Borrower Representative, the “Borrowers”, and each a “Borrower”), BENEFIT STREET PARTNERS REALTY TRUST, INC., a Maryland corporation (the “Guarantor”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), BARCLAYS BANK PLC, as sole lead arranger and bookrunner (in such capacity, the “Arranger”) and BARCLAYS BANK PLC, as administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrowers have requested the Lenders provide a senior secured revolving loan facility in an aggregate principal amount of $100,000,000, with the proceeds thereof to be used by the Borrowers or their Affiliates (a) to originate loans or other eligible assets pursuant to the Borrowers’ investment guidelines and (b) for operating expenses and general corporate purposes of the Borrowers;

WHEREAS, the Lenders are willing to make such a revolving loan facility available upon and subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

Section 1DEFINITIONS

1.1Defined Terms

. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“Act of Insolvency”: with respect to any Person, (a)  the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its assets or property in an involuntary case under any applicable Debtor Relief Law now or hereafter in effect which (i) results in the entry of an order for relief or (ii) is not dismissed within 90 days, (b) the appointment by a court having jurisdiction over such Person or any substantial part of its assets or property, of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property and such appointment shall remain unstayed and in effect for a period of 90 days, (c) an order by a court having jurisdiction over such Person or any substantial part of its assets or property ordering the winding up or liquidation of such Person’s affairs, and such order shall remain unstayed and in effect for a period of 90 days, (d) the commencement by such Person of a voluntary case under any applicable Debtor Relief Law now or hereafter in effect, (e) the consent by such Person to the entry of an order for relief in an involuntary case under any Debtor Relief Law, (f) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, (g) the making by such Person of any general assignment for the benefit of creditors, or (h) the admission by such Person in writing in connection with a legal proceeding of the inability of such Person to pay its debts generally as they become due.

“Administrative Agent”: as defined in the preamble hereto.

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“Administrative Questionnaire”: an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether through the ability to exercise voting power, by contract or otherwise; provided that the right to designate a member of a board or manager of a Person will not, by itself, be deemed to constitute “control”.

“Agreement”: this Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time.

“Applicable Margin”: (a) with respect to Eurodollar Loans, 2.75% and (b) with respect to Base Rate Loans, 1.75%.

“Appraisal”: an appraisal of the underlying Real Property securing any Eligible Asset prepared by a state licensed or state certified, nationally recognized appraiser, in accordance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and in compliance with the requirements of Title 11 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and the Interagency Appraisal and Evaluation Guidelines and utilizing customary valuation methods, such as the income, sales/market or cost approaches, as any of the same may be updated by recertification from time to time by the appraiser performing such appraisal.

“Approved Fund”: any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender and which is not a Disqualified Institution.

“Arranger”: as defined in the preamble hereto.

“Assignment and Assumption”: an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.6(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

“Available Borrowing Capacity”: with respect to any Person, on any date of determination, the total unrestricted borrowing capacity which may be drawn (taking into account required reserves and discounts) upon by such Person or its Subsidiaries, at such Person’s or its Subsidiaries’ sole discretion, under committed credit facilities or repurchase agreements which provide financing to such Person or its Subsidiaries.

“Available Revolving Credit Commitment”: with respect to any Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Credit Commitment then in effect over (b) such Lender’s Revolving Extensions of Credit then outstanding.

“Available Tenor”: as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment

3

period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.

“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bankruptcy Code”: Title 11 of the United States Code, 11 U.S.C. § 101, et seq., as the same may be amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state bankruptcy or insolvency law.

“Bank Secrecy Act”: the Bank Secrecy Act, 31 CFR 103, as amended from time to time.

“Base Rate”: for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) 1.0% per annum plus the Eurodollar Rate (for avoidance of doubt after giving effect to the proviso of the definition thereof) applicable to an Interest Period of one month. For purposes hereof: “Prime Rate” shall mean the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Board (as determined by the Administrative Agent). The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually available. Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the one-month Eurodollar Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or the one-month Eurodollar Rate, respectively.

“Base Rate Loans”: Loans for which the applicable rate of interest is based upon the Base Rate.

“Benchmark”: initially, the LIBO Rate; provided that if a replacement of the Benchmark has occurred pursuant to Section 2.24 titled “Benchmark Replacement Setting”, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.

“Benchmark Replacement”: for any Available Tenor:

(1) For purposes of clause (a) of Section 2.24, the first alternative set forth below that can be determined by the Administrative Agent:

4

(a)    the sum of: (i) Term SOFR and (ii) 0.11448% (11.448 basis points) for an Available Tenor of one-month’s duration, 0.26161% (26.161 basis points) for an Available Tenor of three-months’ duration, and 0.42826% (42.826 basis points) for an Available Tenor of six-months’ duration; or

(b)    the sum of: (i) Daily Simple SOFR and (ii) the spread adjustment selected or recommended by the Relevant Governmental Body for the replacement of the tenor of LIBO Rate with a SOFR-based rate having approximately the same length as the interest payment period specified in clause (a) of Section 2.24; and

(2) For purposes of clause (b) of Section 2.24, the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for Dollar-denominated syndicated or bilateral credit facilities at such time;

providedthat, if the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Conforming Changes”: with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Transition Event”: with respect to any then-current Benchmark other than LIBO Rate, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (b) all Available Tenors of such Benchmark are or will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.

“Beneficial Ownership Certificate”: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

5

“Beneficial Ownership Regulation”: 31 C.F.R. §1010.230.

“Benefited Lender”: as defined in Section 9.7.

“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

“Borrower” and “Borrowers”: as defined in the preamble hereto.

“Borrower Account”: any account of any Borrower designated by such Borrower in writing to the Administrative Agent from time to time, which account, as an initial matter with respect to each Borrower, shall be the account of such Borrower set forth in the Collection Account Control Agreement to which such Borrower is a party.

“Borrower Representative”: as defined in the preamble hereto.

“Borrowing Base”: subject to the Concentration Limit, as of any date of determination, an amount equal to:

(a)70% of the Borrowing Base Asset Amount for all Borrowing Base Assets which were originated by a Borrower or an Affiliate no earlier than ninety (90) days prior to such date of determination, as certified by Borrower Representative in accordance with Section 4.3(c);

(b)60% of the Borrowing Base Asset Amount for all Borrowing Base Assets which were originated by a Borrower or an Affiliate between ninety-one (91) days and one hundred and twenty (120) days prior to such date of determination, as certified by Borrower Representative in accordance with Section 4.3(c);

(c)40% of the Borrowing Base Asset Amount for all Borrowing Base Assets which were originated by a Borrower or an Affiliate between one hundred and twenty-one (121) days and one hundred and fifty (150) days prior to such date of determination, as certified by Borrower Representative in accordance with Section 4.3(c);

(d)25% of the Borrowing Base Asset Amount for all Borrowing Base Assets which were originated by a Borrower or an Affiliate between one hundred and fifty-one (151) days and one hundred and eighty (180) days prior to such date of determination, as certified by Borrower Representative in accordance with Section 4.3(c); and

(e)0% of the Borrowing Base Asset Amount for any Borrowing Base Assets which were originated by a Borrower or an Affiliate earlier than one hundred and eighty-one (181) days prior to such date of determination, as certified by Borrower Representative in accordance with Section 4.3(c).

“Borrowing Base Addition Notice”: as defined in Section 4.3(a).

“Borrowing Base Approval Notice”: as defined in Section 4.3(b).

“Borrowing Base Asset”: each Eligible Asset included in the Borrowing Base on the Closing Date or subsequently added to the Borrowing Base pursuant to Section 4.3.

“Borrowing Base Asset Amount”: with respect to any Borrowing Base Asset, the lesser of (i) the outstanding principal balance of the portion of the Borrowing Base Asset owned by a Borrower

6

and (ii) the purchase price paid by such Borrower or its Affiliate to a third party to acquire such Borrowing Base Asset, if applicable, plus, in either circumstance, the amount of any future advances made by such Borrower following the addition of the Borrowing Base Asset to the Borrowing Base; provided that unfunded future advance obligations in respect of any Eligible Asset that exist when such asset first became a Borrowing Base Asset shall be disregarded when calculating the Borrowing Base Asset Amount until such time as such unfunded future advances are funded by such Borrower.

“Borrowing Base Asset Documents”: all documents, instruments, agreements, assignments and certificates, including without limitation, any and all loan or credit agreements, notes, allonges or endorsements, mortgages, assignments of leases and rents, security agreements, pledge agreements, assignments of contracts, environmental indemnities, guaranties, mortgagee’s title insurance policies, opinions of counsel, evidences of authorization or incumbency, escrow instructions and UCC-1 financing statements, as may be applicable, that are or may be executed (and acknowledged where applicable) and recorded and filed by an Underlying Obligor in connection with a Borrowing Base Asset, as the same may be amended or otherwise modified from time to time in accordance with this Agreement. Borrowing Base Asset Documents shall also include all agreements, permits, assurances and other instruments (such as permits and approvals) that may be delivered to the applicable Borrower by the Underlying Obligor pursuant to the Borrowing Base Asset Documents.

“Borrowing Base Certificate”: a certificate, appropriately completed that calculates the Maximum Facility Availability, substantially in the form of Exhibit K (with such modifications as to format and presentation as may be reasonably requested by the Administrative Agent upon five Business Days’ notice), together with all supporting documentation reasonably requested by the Administrative Agent.

“Borrowing Base Conditions”: with respect to any asset, each of the following conditions:

(a)the applicable Borrower shall own 100% of such asset;

(b)such asset shall not be a Defaulted Asset;

(c)such asset shall be originated by the applicable Borrower or its Affiliate not more than 180 days before becoming a Borrowing Base Asset, and shall not have been modified in any material respect since its origination except as disclosed to the Administrative Agent prior to becoming a Borrowing Base Asset or otherwise in accordance with this Agreement;

(d)other than pursuant to the Loan Documents, the applicable Borrower’s interest in such asset is not subject to any Lien, negative pledge or other encumbrance;

(e)in the case of a senior or pari passu co-lender interest or participation in a commercial mortgage loan, either (i) the applicable Borrower, or an Affiliate of such Borrower together with such Borrower, owns at least 50% of the initial aggregate principal amount of such loan or (ii) the applicable Borrower or an Affiliate of such Borrower shall serve as the administrative agent with respect to such loan and shall directly hold a co-lender interest or participation in such loan large enough to block any lender vote under the underlying loan documentation;

(f)the Loan to Value Ratio with respect to such asset shall not exceed 80% (or in the case of a mezzanine loan, shall not exceed 85%) ; provided that for such asset to initially be

7

included in the Borrowing Base, an Appraisal of the related Real Property shall have been conducted not more than 180 days prior to becoming a Borrowing Base Asset;

(g)the Guarantor believes, in its reasonable, good faith judgment, that such asset can be alternately financed in accordance with the Guarantor’s standards for similar assets including, but not limited, to (i) such asset satisfying all criteria necessary to qualify as an “eligible asset” (or similar term) under one or more of the Guarantor’s or its Subsidiaries’ credit or repurchase facilities, (ii) the Guarantor’s or its Affiliates’ ability to sell a senior participation or mortgage interest in such asset or (iii) the Guarantor’s or its Subsidiaries’ ability to contribute such asset to a securitized financing vehicle or similar structure sponsored by the Guarantor;

(h)such asset shall be secured (or, in the case of a mezzanine loan, the mortgage loan to which it is related is secured) by a mortgage on Real Property that is the subject of an Appraisal that has been delivered to the Administrative Agent at the time such loan becomes a Borrowing Base Asset;

(i)such asset is not a construction loan, a land loan or a condominium conversion loan;

(j)the representations and warranties for assets of that type set forth in the applicable part of Annex B are true and correct in all material respects (except as disclosed in writing to the Administrative Agent in an Exception Report prior to approval of such Borrowing Base Asset pursuant to Section 4.3 and otherwise from time to time);

(k)none of the Real Property securing such loan shall have any material environmental, structural, title or other defects, and not be subject to any condemnation proceeding, that in any event would give rise to a material adverse effect as to the value, use of, operation of or ability to sell or finance such property;

(l)the Underlying Obligor under such asset is an entity organized under the laws of a state of the United States of America or the District of Columbia;

(m)such asset is denominated in Dollars;

(n)the underlying Real Property with respect to such loan shall be located within any state of the United States of America or the District of Columbia; and

(o)except as approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed), the Underlying Obligor shall have no Indebtedness other than such loan and unsecured trade payables incurred in the ordinary course of business.

Notwithstanding anything to the contrary, the failure of any asset proposed to be added as a Borrowing Base Asset to comply with any of the foregoing conditions will not preclude the addition of such asset as a Borrowing Base Asset so long as the Administrative Agent has consented to the addition, and if such consent is given, the applicable Borrowing Base Condition will be modified with respect to such asset for so long as such asset is a Borrowing Base Asset.

Upon any asset ceasing to qualify as an Eligible Asset, such loan shall no longer be included in the Borrowing Base unless otherwise approved in writing by the Administrative Agent. Within five Business Days after becoming aware of any such disqualification, Borrower Representative shall deliver to the Administrative Agent a certificate reflecting such disqualification, together with the identity of the

8

disqualified loan, a statement as to whether any Material Default or Event of Default arises as a result of such disqualification, and a calculation of the Borrowing Base attributable to such loan.

“Borrowing Base Disapproval Notice”: as defined in Section 4.3(b).

“Borrowing Date”: any Business Day specified by Borrower Representative as a date on which the Borrower requests the Lenders to make Loans hereunder.

“Borrowing Notice”: with respect to any request for borrowing of Loans hereunder, a notice from Borrower Representative, substantially in the form of, and containing the information prescribed by, Exhibit H, delivered to the Administrative Agent.

“Business Day”: (a) for all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which (i) commercial banks (A) in the State of New York, (B) solely with respect to Wells Fargo Bank, National Association for purposes of Section 5.10(a), the State of North Carolina, and (C) solely with respect to Situs Asset Management LLC for purposes of Section 5.10(a), any other State in which any account maintained by it with respect to the Borrowing Base Assets is located, or (ii) the New York Stock Exchange, are authorized or required by law to close and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

“Capital Lease Obligations”: with respect to any Person, the amount of all obligations of such Person, as a lessee to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligation shall be the capitalized amount thereof, determined in accordance with GAAP.

“Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents”: as of any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States and (ii) time deposits, certificates of deposit, money market accounts or banker’s acceptances of any investment grade rated commercial bank, in each case maturing within 30 days after such date.

“Cash Liquidity”: with respect to any Person, on any date of determination, the sum of (i) unrestricted cash, plus (ii) Available Borrowing Capacity, plus (iii) Cash Equivalents.

“Change in Law”: the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel

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Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control”: the occurrence of any of the following events:

(a)any consummation of a merger, amalgamation or consolidation of the Guarantor with or into another entity or any other reorganization occurs and more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s stock or other ownership interest in such entity outstanding immediately after such merger, amalgamation, consolidation or such other reorganization is not owned directly or indirectly by Persons who were stockholders or holders of such other ownership interests in the Guarantor immediately prior to such merger, amalgamation, consolidation or other reorganization;

(b)any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a percentage of the total voting power of all Capital Stock of the Guarantor entitled to vote generally in the election of directors, members or partners of 20% or more other than Controlled Affiliates of the Guarantor, or to the extent such interests are obtained through a public market offering or secondary market trading;

(c)the Guarantor shall cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of any Intermediate Pledgor;

(d)the Guarantor (or any entity managed or controlled by the Guarantor or any of its Affiliates) shall cease to be the sole general partner of the Operating Partnership;

(e)any Intermediate Pledgor shall cease to own directly and control, of record and beneficially, 100% of each class of outstanding Capital Stock of any Borrower which is a direct Subsidiary of such Intermediate Pledgor; or

(f)any transfer of all or substantially all of any Borrower’s or the Guarantor’s assets (other than any securitization transaction or any repurchase or other similar transactions in the ordinary course of such Borrower’s or the Guarantor’s business).

“Closing Date”: the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied, which date shall be no later than September 19, 2017.

“Closing Date Fee Letter”: the Fee Letter, dated as of the Closing Date, by and among the Borrowers, the Arranger and the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

“Collateral”: collectively, the collateral upon which Liens have been granted pursuant to the Security Documents.

“Collection Account”: a deposit account with the Deposit Bank in the name of a Borrower subject to a Lien of the Administrative Agent for the benefit of the Secured Parties.

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“Collection Account Control Agreements” means (i) that certain Deposit Account Control Agreement, dated as of September 19, 2017, by and among Borrower Representative, the Administrative Agent and the Deposit Bank, and (ii) that certain Deposit Account Control Agreement, dated as of September 19, 2017, by and among BSPRT Finance Sub-Lender, the Administrative Agent and the Deposit Bank, in each case as amended, restated, supplemented or otherwise modified from time to time, and each providing to the Administrative Agent “control” of the applicable Collection Account within the meaning of Article 9 of the Uniform Commercial Code, as amended, restated, supplemented or otherwise modified from time to time.

“Collections”: with respect to any Borrowing Base Asset:

(a)all scheduled payments of principal and principal prepayments, all insurance proceeds and all guaranty payments and net proceeds of any liquidations, sales, dispositions or securitizations received by the Borrower, in each case, attributable to the principal of such Borrowing Base Asset;

(b)all payments and collections attributable to interest on such Borrowing Base Asset, including, without limitation, all scheduled payments of interest and payments of interest relating to principal prepayments, all guaranty payments attributable to interest and net proceeds of any liquidations, sales, dispositions or securitizations attributable to interest on such Borrowing Base Asset received by the Borrower; and

(c)amendment fees, late fees, waiver fees or other amounts received in respect of such Borrowing Base Asset.

For the avoidance of doubt, Collections shall not include fees and reimbursements paid to the Servicers pursuant to the applicable Servicing Agreement, origination fees and expense deposits paid by any Underlying Obligor in connection with the origination and closing of any Borrowing Base Asset, any reimbursement for out-of-pocket costs and expenses or any amounts deposited into an escrow reserve pursuant to and in accordance with the related Borrowing Base Asset Documents.

“Commitment Fee Rate”: as defined in the Fee Letters.

“Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with any Borrower within the meaning of Section 4001(a)(14) of ERISA or is part of a group that includes any Borrower and that is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of any Plan subject to Section 412 or 430 of the Code, Section 414(b), (c), (m) or (o) of the Code.

“Compliance Certificate”: a certificate duly executed by a Responsible Officer, substantially in the form of Exhibit B.

“Concentration Limit”: at all times, mezzanine loans do not in the aggregate exceed 25% of the Borrowing Base.

“Conduit Lender Pledgor”: as defined in the definition of Intermediate Pledgor.

“Consolidated Net Income”: with respect to any Person, for any period, the amount of consolidated net income (or loss) of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

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“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

“Controlled Affiliate”: any Person that, directly or indirectly, is controlled by the Guarantor. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether through the ability to exercise voting power, by contract or otherwise; provided that the right to designate a member of a board or manager of a Person will not, by itself, be deemed to constitute “control”.

“Conversion/Continuation Notice”: a Conversion/Continuation Notice substantially in the form of Exhibit L.

“Convertible Debt Securities”: debt securities, the terms of which provide for conversion into Capital Stock, cash by reference to such Capital Stock or a combination thereof.

“CRE Finance Pledgor”: BSPRT CRE Finance, LLC.

“Daily Simple SOFR”: for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for bilateral business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

“Debtor Relief Laws”: the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or otherwise available debtor relief laws of the United States, of any State or of any other applicable jurisdictions from time to time in effect.

“Default”: any of the events specified in Section 7.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Defaulted Asset”: any Borrowing Base Asset (a) that is 30 days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents or other asset documentation or, with respect to a senior or pari passu co-lender interest or participation in a commercial mortgage loan, the underlying commercial mortgage loan is 30 days or more delinquent in the payment of principal, interest, fees or other amounts payable under the terms of the related loan documents or other asset documentation, (b) for which there is a breach of the applicable representations and warranties set forth on Annex B (except as has been disclosed to the Administrative Agent in an Exception Report prior to approval of such Borrowing Base Asset pursuant to Section 4.3) that results in a determination by Administrative Agent in its sole and absolute discretion, exercised in good faith, that such breach could reasonably be expected to have a material adverse effect on the market value of a Borrowing Base Asset or the underlying Real Property, (c) to which an Act of Insolvency shall have occurred with respect to the Underlying Obligor, (d) as to which a material non-monetary event of default shall have occurred beyond any applicable notice or cure period under any related Borrowing Base Asset Documents, including, without limitation, with respect to any senior or pari passu co-lender interest or participation in a commercial mortgage loan, any document related to the underlying commercial mortgage loan, or (e) for which the related Borrowing Base Asset Documents have been amended in a manner which does not constitute a Permitted Modification, in each case, without regard to any waivers or modifications of, or amendments to, the related Borrowing Base Asset Documents, other

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than those that were disclosed in writing to the Administrative Agent prior to the date such Borrowing Base Asset was approved for inclusion in the Borrowing Base or which are otherwise entered into in accordance with this Agreement.

“Defaulting Lender”: subject to Section 2.22(b), any Lender that:

(a)has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and Borrower Representative in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due,

(b)has notified Borrower Representative or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied),

(c)has failed, within three Business Days after written request by the Administrative Agent or Borrower Representative, to confirm in writing to the Administrative Agent and Borrower Representative that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and Borrower Representative), or

(d)has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22(b)) upon delivery of written notice of such determination to Borrower Representative and each Lender.

“Deposit Bank”: Wells Fargo Bank, National Association, or any other deposit bank mutually agreed upon between the applicable Borrower and the Administrative Agent.

“Disclosable Event”: as defined in Section 5.13.

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“Disposition”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and “Disposed of” shall have correlative meanings.

“Disqualified Institution”: on any date, any Person specified on Schedule 1.1(a); provided that “Disqualified Institutions” shall exclude any Person that Borrower Representative has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent from time to time.

“Dollars” and “$”: dollars in lawful currency of the United States of America.

“Early Opt-in Effective Date”: with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Borrower Representative.

“Early Opt-in Election”: the occurrence of:

(1) a determination by the Administrative Agent that at least five currently outstanding Dollar-denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate, and

(2) the election by the Administrative Agent to trigger a fallback from the LIBO Rate and the provision by the Administrative Agent of written notice of such election to the Borrower Representative.

“EBITDA”: with respect to any Person, for any period, such Person’s Consolidated Net Income, excluding the effects of such Person’s and its Subsidiaries’ interest expense with respect to Indebtedness, taxes, depreciation, amortization, asset write-ups or impairment charges, provisions for loan losses, and changes in mark-to-market value(s) (both gains and losses) of financial instruments and noncash compensation expenses, all determined on a consolidated basis in accordance with GAAP.

“EEA Financial Institution”: any of (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein and Norway.

“EEA Resolution Authority”: any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligible Asset”: any asset that is either (i) a commercial mortgage loan, (ii) a senior or pari passu co-lender interest or participation in a commercial mortgage loan or (iii) a mezzanine loan, provided that the applicable Borrower has provided reasonably satisfactory evidence that any other repurchase, warehouse or similar facility entered into by an Affiliate of such Borrower has preliminarily approved of such mezzanine loan for such facility, and in each case, which satisfies each of the Borrowing Base Conditions.

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“Eligible Assignee”: any (a) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $250,000,000, (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Corporation and Development or a political subdivision of any such country and which has total assets in excess of $250,000,000, (c) a finance company, insurance company, or other financial institution or fund that is engaged in making, purchasing, or otherwise investing in commercial loans in the ordinary course of its business and having (in its name or under management) total assets in excess of $250,000,000, (d) a Lender, any Affiliate of a Lender, or any Approved Fund, and (e) any other Person approved by the Administrative Agent and the Borrowers; provided that no Disqualified Institutions may be considered an Eligible Assignee. For the avoidance of doubt, any Disqualified Institution is subject to Section 9.6(f).

“Environmental Claim”: any investigative, enforcement, cleanup, removal, containment, remedial, or other private or governmental or regulatory action threatened, instituted, or completed pursuant to any applicable Environmental Law.

“Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, agreements or other legally enforceable requirements (including, without limitation, common law) of any international authority, foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health, or employee health and safety, as has been, is now, or may at any time hereafter be, in effect.

“Environmental Liability”: any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or, except in the case of Section 9.5, indemnities), of any Loan Party directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Eurocurrency Reserve Requirements”: for any day, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Base Rate”: for any Interest Period as to any Eurodollar Loan, (i) the rate per annum determined by the Administrative Agent to be the offered rate which appears on the page of the Reuters Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (such page currently being the LIBOR01 page) (the “LIBO Rate”) for deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period in Dollars, determined as of approximately 11:00 A.M. (London, England time), two Business Days prior to the commencement of such Interest Period or (ii) in the event the rate referenced in the preceding clause (i) does not appear on such page or service or if such page or service shall cease to be available, the

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rate determined by the Administrative Agent to be the offered rate on such other page or other service which displays the LIBO Rate for deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period in Dollars, determined as of approximately 11:00 A.M. (London, England time) two Business Days prior to the commencement of such Interest Period; provided that, if LIBO Rates are quoted under either of the preceding clauses (i) or (ii), but there is no such quotation for the Interest Period elected, the LIBO Rate shall be equal to the Interpolated Rate; and providedfurther that, if any such rate determined pursuant to the preceding clauses (i) or (ii) is below zero, the LIBO Rate will be deemed to be zero.

“Eurodollar Loans”: Loans for which the applicable rate of interest is based upon the Eurodollar Rate.

“Eurodollar Rate”: with respect to each day during each Interest Period, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

Eurodollar Base Rate

1.00 – Eurocurrency Reserve Requirements

“Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“Event of Default”: any of the events specified in Section 7.1; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Exception Report”: as defined in Section 4.3(d).

“Exchange Act”: as defined in the definition of “Change of Control”.

“Existing Termination Date”: as defined in Section 2.4(a).

“Extending Lender”: as defined in Section 2.4(b).

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

“FCPA”: the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq., as amended from time to time.

“Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depository institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate.

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“Fee Letters”: the Closing Date Fee Letter, the First Amendment Fee Letter, the Second Amendment Fee Letter and the Third Amendment Fee Letter.

“First Amendment”: First Amendment to Credit Agreement, dated as of the First Amendment Effective Date, among the Borrowers, the Guarantor, the lenders party thereto and the Administrative Agent.

“First Amendment Effective Date”: the date on which the conditions precedent set forth in Section 2 of the First Amendment shall have been satisfied, which date shall be no later than July 30, 2018.

“First Amendment Fee Letter”: the Fee Letter, dated as of the First Amendment Effective Date, by and among the Borrowers and the Arranger, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Fixed Charges”: with respect to any Person, for any period, the amount of interest paid in cash with respect to Indebtedness as shown on such Person’s consolidated statement of cash flow in accordance with GAAP as offset by the amount of receipts pursuant to net receive interest rate swap agreements of such Person and its consolidated Subsidiaries during the applicable period.

“Floor”: the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the LIBO Rate.

“Fund”: any Person (other than a natural person) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“Funding Office”: the office specified from time to time by the Administrative Agent as its funding office by notice to Borrower Representative and the Lenders.

“Funds From Operations”: for any Person for any period, the sum of (a) Consolidated Net Income for such period plus (b) depreciation and amortization expense determined in accordance with GAAP; provided that, there shall not be included in such calculation (i) any proceeds of any insurance policy other than rental or business interruption insurance received by such Person, (ii) any gain or loss which is classified as “extraordinary” in accordance with GAAP or (iii) any capital gains and taxes on capital gains.

“GAAP”: generally accepted accounting principles in the United States of America consistently applied as in effect from time to time.

“Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to be executed and delivered by each Borrower and the Guarantor on the Closing Date, substantially in the form of Exhibit A-1, as the same may be amended, restated, supplemented or otherwise modified from time to time.

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“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (a) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (A) an amount equal to the maximum stated amount of the primary obligation in respect of which such Guarantee Obligation is made and (B) the maximum stated amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by Borrower Representative in good faith.

“Guarantor”: as defined in the preamble hereto.

“Hazardous Materials”: any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including but not limited to petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise), but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purpose of cleaning or other maintenance or operations and otherwise in compliance with all Environmental Laws.

“Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity or currency futures contracts, options to purchase or sell a commodity or currency, or option, warrant or other right with respect to a commodity or currency futures contract or similar arrangements entered into by the Loan Parties providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

“Hedge Recourse Indebtedness”: with respect to any Person, on any date of determination, the amount of obligations in respect of Hedge Agreements for which such Person has recourse liability, equal to the net amount that would be payable (giving effect to netting) at such time if such Hedge Agreements were terminated, exclusive of recourse liability that is limited to obligations relating to customary nonrecourse carve-outs.

“Indebtedness”: with respect to any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to

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repurchase such property from such Person), (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such unsecured trade accounts payable are payable within 90 days of the date the respective goods are delivered or the respective services are rendered, (c) Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person, (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person, (e) Capital Lease Obligations of such Person, (f) obligations of such Person under repurchase agreements or like arrangements, (g) Indebtedness of others guaranteed by such Person to the extent of such guarantee, and (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person. Notwithstanding the foregoing, neither (i) non-Recourse Indebtedness owing pursuant to a securitization transaction such as a REMIC securitization, a collateralized loan obligation transaction or other similar securitization nor (ii) Indebtedness owing pursuant to an adjustable-rate mortgage security or any related repurchase agreement, shall be considered Indebtedness for any Person.

“Indemnified Liabilities”: as defined in Section 9.5.

“Indemnitee”: as defined in Section 9.5.

“Independent Director”: an individual who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of any Borrower and that provides professional Independent Directors and other corporate services in the ordinary course of its business, and which individual is duly appointed as a member of the board of directors or board of managers of such corporation or limited liability company and is not, has not been at any time in the preceding five years, and will not while serving as Independent Director be, any of the following:

(a)a member, partner, equity holder (but excluding holders of public stock or securities), manager, director, officer or employee of any Borrower, the Guarantor or any of their respective equity holders or Affiliates (other than (i) as an Independent Director of such Borrower or (ii) as an Independent Director of an Affiliate of such Borrower that is not in the direct chain of ownership of such Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity; provided that, such Independent Director is employed by a company that routinely provides professional Independent Directors);

(b)a creditor, supplier or service provider (including a provider of professional services) to any Borrower, the Guarantor or any of their respective equity holders or Affiliates (other than through a nationally recognized company that routinely provides professional Independent Directors and other corporate services to the Guarantor, any single purpose entity equity holder, or any of their respective equity holders or Affiliates in the ordinary course of business);

(c)a family member of any such member, partner, equity holder, manager, director, officer, employee, creditor, supplier or service provider; or

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(d)a Person who controls (whether directly, indirectly or otherwise) any of the individuals described in the preceding clauses (a), (b) or (c).

An individual who otherwise satisfies the preceding definition other than clause (a) by reason of being the Independent Director of a “special purpose entity” affiliated with any Borrower or the Guarantor shall not be disqualified from serving as an Independent Director if (x) such individual is provided by CT Corporation or (y) the fees that such individual earns from serving as an Independent Director of Affiliates of any Borrower and the Guarantor in any given year constitute in the aggregate less than 5% of such individual’s annual income for that year.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Interest Payment Date”: (a) as to any Base Rate Loan, the last Business Day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan and (b) as to any Eurodollar Loan, the last day of such Interest Period and the date of any repayment or prepayment made in respect thereof.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one month thereafter and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one month thereafter; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

(a)if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(b)any Interest Period that would otherwise extend beyond the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date or such due date, as applicable; and

(c)any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

“Intermediate Pledgor”: each of BSPRT CRE Finance, LLC (the “CRE Finance Pledgor”), a Delaware limited liability company and/or BSPRT CMBS Finance, LLC (formerly BSPRT Finance, LLC) (the “Conduit Lender Pledgor”), a Delaware limited liability company.

“Interpolated Rate”: in relation to the LIBO Rate for any Loan, the rate which results from interpolating on a linear basis between:

(a)the applicable LIBO Rate for the longest period (for which that LIBO Rate is available) which is less than the Interest Period of such Loan; and

(b)the applicable LIBO Rate for the shortest period (for which that LIBO Rate is available) which exceeds the Interest Period of such Loan,

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each as of approximately 11:00 A.M. (London, England time) two Business Days prior to the commencement of such Interest Period of such Loan.

“Investment”: as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Capital Stock or other securities of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount of such investment required to be included on the investor’s consolidated balance sheet in accordance with GAAP.

“Knowledge”: as of any date of determination, the then current actual (as distinguished from imputed or constructive and without duty of further inquiry or investigation) knowledge of (x) solely in the case of any Borrowing Base Asset, any asset manager employed by Benefit Street Partners L.L.C. that is responsible for the origination, acquisition and/or management of such Borrowing Base Asset and (y) in all other cases, a Responsible Officer of any Borrower or the Guarantor, as applicable. “Known” shall have a correlative meaning.

“Lender”: as defined in the preamble hereto.

“LIBO Rate”: as defined in the definition of “Eurodollar Base Rate”.

“Lien”: any mortgage, statutory or other lien, pledge, charge, right, claim, adverse claim, attachment, levy, hypothecation, hypothec, prior claim, assignment, deposit arrangement, security interest, Uniform Commercial Code financing statement or encumbrance of any kind on or otherwise relating to any Person’s assets or properties in favor of any other Person or any preference, priority or other security agreement or preferential arrangement of any kind.

“Loan”: as defined in Section 2.1.

“Loan Documents”: this Agreement, the Security Documents, the Servicing Agreements, the Notes, the Fee Letters and any other letter agreements with respect to fees payable to the Arranger, the Administrative Agent or the Lenders and any agreements in connection with any of the foregoing.

“Loan Parties”: the Borrowers, the Intermediate Pledgors and the Guarantor.

“Loan to Value Ratio”: with respect to any asset on any date of determination, the ratio of (x) the aggregate outstanding debt (which shall include the underlying loan and all debt senior to or pari passu with such loan) secured, directly or indirectly, by the related real property, to (y) the aggregate value of such Real Property as determined by (i) an Appraisal addressed to the applicable Borrower or an Affiliate of such Borrower dated not earlier than 180 days prior to the date such asset becomes a Borrowing Base Asset or (ii) with respect to an asset originated by such Borrower or an Affiliate thereof more than 150 days prior to such date, at the Administrative Agent’s sole option in accordance with Section 5.14, an Appraisal of the Real Property underlying such asset commissioned by the Administrative Agent at the Borrowers’ expense.

“Material Adverse Effect”: a material adverse effect on (a) the business, assets, financial condition or operations of the Loan Parties, taken as a whole; (b) the ability of the Loan Parties, taken as a

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whole, to perform their material obligations under the Loan Documents; or (c) the legality, validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

“Material Default”: on any date of determination, any of the events specified in (i) Section 7.1(a), 7.1(c) with respect to a Default in the observance or performance of any agreement contained in Section 5.9, 5.10, 5.11, 6.2, 6.3. 6.4, 6.5, 6.7 or 6.18, 7.1(e), 7.1(f) or 7.1(k), whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied and (ii) Section 7.1(c) with respect to the failure to comply with the financial condition covenants set forth in Section 6.1 on such date after giving pro forma effect to the Loans, extension of the Existing Termination Date or other action to be taken by the Loan Parties on such date.

“Material Environmental Amount”: an amount or amounts payable with respect to any Real Property directly or indirectly securing any Borrowing Base Asset in the aggregate in excess of (x) with respect to the Guarantor or any Intermediate Pledgor, $25,000,000, and (y) with respect to any Borrower, $1,000,000, for: costs to comply with any Environmental Law; costs of any investigation, and any remediation, of any Material of Environmental Concern; and compensatory damages (including, without limitation, damages to natural resources), punitive damages, fines, and penalties pursuant to any Environmental Law.

“Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products (virgin or used), polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other materials, substances or forces of any kind, whether or not any such material, substance or force is defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to or would reasonably be expected to give rise to liability under any Environmental Law.

“Maximum Facility Availability”: at any date, an amount equal to the lesser of (a) the Total Revolving Credit Commitments on such date and (b) the Borrowing Base on such date.

“Money Laundering Control Act”: the Money Laundering Control Act of 1986, as amended from time to time.

“Multiemployer Plan”: a multiemployer plan as defined in Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA and to which any Borrower, the Guarantor or any Commonly Controlled Entity has an obligation to contribute.

“Non-Consenting Lender”: as defined in Section 2.20(b).

“Non-Excluded Taxes”: as defined in Section 2.16(a).

“Non-Recourse Indebtedness”: any Indebtedness other than Recourse Indebtedness.

“Non-U.S. Lender”: as defined in Section 2.16(e).

“Non-U.S. Participant”: as defined in Section 2.16(e).

“Note”: any promissory note evidencing any Loan.

“NYFRB”: the Federal Reserve Bank of New York.

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“Obligations”: the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrowers to the Administrative Agent or to any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender) in each case that are required to be paid by the Borrowers pursuant hereto or otherwise.

“OFAC”: Office of Foreign Assets Control of the United States Department of the Treasury.

“Operating Partnership”: Benefit Street Realty Operating Partnership, L.P.

“Other Connection Taxes”: with respect to any Recipient, any Taxes that are (i) imposed on a Recipient by a jurisdiction as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such recipient having (x) executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest in, enforced, or engaged in any other transaction pursuant to any Loan Document, or (y) sold or assigned an interest in any Loan or Loan Document) and (ii) imposed with respect to an assignment, grant of participation, designation of a new office for receiving payments by or on account of any Borrower, or other transfer of an interest in any Loan or Loan Document.

“Other Taxes”: any and all present or future stamp, court or documentary, intangible, recording, filing or similar taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, registration of, enforcement of, receipt or perfection of a security interest under or otherwise with respect to, this Agreement or any other Loan Document, except any Other Connection Taxes imposed with respect to an assignment or grant of a participation (other than an assignment made pursuant to Section 2.20 or a participation made pursuant to clause (A) of Section 9.6(d)).

“Participant”: as defined in Section 9.6(d).

“Payment Office”: the office specified from time to time by the Administrative Agent as its payment office by notice to Borrower Representative and the Lenders.

“Payment Time”: with respect to payments to be made by Borrower hereunder, (i) 4:00 P.M. (New York City time) on the due date thereof to the extent that Barclays Bank PLC is the sole Lender hereunder, or (ii) 2:00 P.M. (New York City time) on the due date thereof to the extent that one or more Lenders are not Barclays Bank PLC or an Affiliate thereof.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

“Permitted Modification”: a consent, amendment, supplement, waiver, release or other modification, subject to compliance with the Guarantor’s or its Subsidiaries’ standards for similarly situated loans, participations and other loan interests, which consent, amendment, supplement, waiver, release or other modification (i) does not increase the loan amount or commitment of the applicable

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Borrower to the Underlying Obligor, decrease the interest rate, postpone the maturity date, release any material collateral or any underlying guarantor or waive any financial covenants or (ii) result in such Borrowing Base Asset ceasing to be an Eligible Asset, unless, in the case of either (i) or (ii), such consent, amendment, supplement, waiver, release or other modification is (x) previously approved by the Administrative Agent for such Borrowing Base Asset in its reasonable discretion, (y) required by law or (z) constitutes action that such Borrower is required to take pursuant to the terms of the relevant Borrowing Base Asset Documents.

“Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Plan”: at a particular time, any employee benefit plan, other than a Multiemployer Plan, that is covered by Title IV or Section 412 of ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA and with respect to which the Borrower or the Guarantor could reasonably be expected to have liability (contingent or otherwise).

“Platform”: any of DebtDomain, WatchDox, IntraLinks, SyndTrak or a substantially similar electronic transmission system

“Pledge Agreement”: collectively (i) the Pledge Agreement, dated as of September 19, 2017, made by BSPRT Finance, LLC (n/k/a BSPRT CMBS Finance, LLC) in favor of the Administrative Agent for the benefit of the Lenders and (ii) the Pledge Agreement, dated as of September 13, 2019, made by BSPRT CRE Finance, LLC in favor of the Administrative Agent for the benefit of the Lenders, as applicable, each substantially in the form of Exhibit A-2, as amended, restated, supplemented or otherwise modified in writing from time to time.

“Pledged Stock”: as defined in the Pledge Agreement.

“Prepayment Notice”: a notice of prepayment of Loans pursuant to Section 2.5(a), substantially in the form of Exhibit M.

“Prime Rate”: as defined in the definition of “Base Rate”.

“Principal Financial Officer”: the chief financial officer, any director (or equivalent) or officer from time to time of the Guarantor with actual knowledge of the financial affairs of the Guarantor and its Subsidiaries.

“Property”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

“Proposed Borrowing Base Asset”: as defined in Section 4.3(a).

“Real Property”: with respect to any Person, all of the right, title, and interest of such Person in and to land, improvements and fixtures, including ground leases.

“Recipient”: the Administrative Agent or any Lender.

“Recourse Indebtedness”: with respect to any Person, on any date of determination, the amount of Indebtedness for which such Person has recourse liability (such as through a guarantee

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agreement), exclusive of any such Indebtedness for which such recourse liability is limited to obligations relating to or under agreements containing customary nonrecourse carve-outs.

“Register”: as defined in Section 9.6(c).

“Regulation U”: Regulation U of the Board as in effect from time to time.

“REIT Status”: with respect to any Person, (a) the qualification of such Person as a real estate investment trust under Sections 856 through 860 of the Code, and (b) the applicability to such Person and its shareholders of the method of taxation provided for in Section 857 et seq. of the Code, including a deduction for dividends paid.

“Related Parties”: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Relevant Governmental Body”: the Board or the NYFRB, or a committee officially endorsed or convened by the Board or the NYFRB, or any successor thereto.

“Reorganization”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the 30-day notice period is waived under PBGC Reg. § 4043.

“Required Lenders”: at any time, the holders of more than 51% of the Total Revolving Credit Commitments then in effect or, if the Revolving Credit Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding. The Total Revolving Extensions of Credit of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Requirements of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any treaty, federal, state, county, municipal and other governmental statutes, laws, orders, rules, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities or determination of an arbitrator or a court, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer”: the president, chief executive officer, managing director or chief financial officer of the Guarantor.

“Restricted Payment”: any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Capital Stock, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or on account of any option, warrant or other right to acquire any such dividend or other distribution or payment. Notwithstanding the foregoing, the conversion of (including any cash payment upon the conversion of), payment of any principal or premium on, or payment of any interest with respect to, any Convertible Debt Securities shall not constitute a Restricted Payment.

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“Revolving Credit Commitment”: as to any Lender, the obligation of such Lender, if any, to make Loans, in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Credit Commitment” opposite such Lender’s name on Annex A, or, as the case may be, in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The aggregate amount of the Total Revolving Credit Commitments as of the First Amendment Effective Date is $100,000,000; provided that, following the delivery of the Specified Commitment Increase Notice, solely during the Specified Commitment Increase Period, the aggregate amount of the Total Revolving Credit Commitments is $150,000,000 as set forth on Annex A.

“Revolving Credit Commitment Period”: the period from and including the Closing Date to the Revolving Credit Termination Date.

“Revolving Credit Percentage”: as to any Lender at any time, the percentage which such Lender’s Revolving Credit Commitment then constitutes of the Total Revolving Credit Commitments (or, at any time after the Revolving Credit Commitments shall have expired or terminated, the percentage which the aggregate amount of such Lender’s Revolving Extensions of Credit then outstanding constitutes of the Total Revolving Extensions of Credit then outstanding).

“Revolving Credit Termination Date”: September 20, 2023, as such date may be extended pursuant to Section 2.4.

“Revolving Extensions of Credit”: as to any Lender at any time, an amount equal to the sum of the aggregate principal amount of all Loans made by such Lender then outstanding.

“SEC”: the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

“Second Amendment”: Second Amendment to Credit Agreement, dated as of the Second Amendment Effective Date, among the Borrowers, the Guarantor, the lenders party thereto and the Administrative Agent.

“Second Amendment Effective Date”: the date on which the conditions precedent set forth in Section 2 of the Second Amendment shall have been satisfied, which date shall be no later than September 13, 2019.

“Second Amendment Fee Letter”: the Fee Letter, dated as of the Second Amendment Effective Date, by and among the Borrowers, the Arranger and the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Secured Parties”: as defined in the Guarantee and Collateral Agreement.

“Security Documents”: the Guarantee and Collateral Agreement, the Pledge Agreement, the Collection Account Control Agreements and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document, as each may be amended, restated, supplemented or otherwise modified from time to time.

“Servicers”: Wells Fargo Bank, National Association, Situs Asset Management LLC or any other servicer mutually agreed upon between Borrower Representative and the Administrative Agent.

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“Servicing Agreement Joinders”: the Situs Servicing Agreement Joinder and the Wells Servicing Agreement Joinder.

“Servicing Agreements”: the Situs Servicing Agreement and the Wells Servicing Agreement.

“Shareholder’s Equity”: with respect to any Person, on any date of determination, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a consolidated balance sheet of such Person pursuant to GAAP.

“Situs Servicing Agreement”: the Servicing Agreement, dated as of January 31, 2017, by and between Benefit Street Partners, LLC and Situs Asset Management LLC (as such agreement relates to Additional Owner Assets (as defined in the Situs Servicing Agreement Joinder) only, to which Borrower Representative is a party pursuant to the Situs Servicing Agreement Joinder, as amended, restated, supplemented or otherwise modified from time to time.

“Situs Servicing Agreement Joinder”: the Joinder to Servicing Agreement, dated as of the Closing Date, by and between Borrower Representative and Situs Asset Management LLC, substantially in the form of Exhibit D-1, relating to the Situs Servicing Agreement.

“SOFR”: a rate per annum equal to the secured overnight financing rate for such Business Day published by the NYFRB (or a successor administrator of the secured overnight financing rate) on the website of the NYFRB, currently at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time).

“Solvent”: with respect to any Person, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“Special Purpose Entity”: with respect to any Person, such Person’s organizational documents provide that such Person shall (i) not engage in any business, other than the origination, acquisition, ownership, hedging, administering, financing, servicing, management, enforcement and disposition of the Collateral, any Borrowing Base Asset and any Proposed Borrowing Base Asset, all in accordance with the applicable provisions of the Loan Documents and applicable Borrower’s organizational documents, (ii) not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) obligations under the Loan Documents, and (B) unsecured trade payables in the ordinary course of its business which are no more than 90 days past due, and (C) as otherwise expressly permitted under this Agreement, (iii) not make any loans or advances to any Affiliate or third party and shall not acquire obligations or

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securities of its Affiliates, in each case other than in connection with the origination or acquisition of Borrowing Base Assets or Proposed Borrowing Base Assets, (iv) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from and solely to the extent of its own assets, provided that the foregoing shall not require any member, partner or shareholder of such Person to make any additional capital contributions to such Person, (v) comply with the special purpose provisions of its certificate of formation and limited liability company agreement, (vi) do all things necessary to observe organizational formalities and to preserve its existence, and shall not amend, modify, waive the “Special Purpose Provisions” of its Limited Liability Company Agreement (as defined therein) in a manner so as to modify or limit its obligations in accordance with this definition, without prior written consent of the Required Lenders, (vii) maintain all of its books, records, balance sheet and bank accounts separate from those of its Affiliates, (viii) be, and at all times owns itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any Known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other, (ix) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall remain Solvent, provided that the foregoing shall not require any member, partner or shareholder of such Person to make any additional capital contributions to such Person, (x) not engage in or suffer any Change of Control, dissolution, winding up, liquidation, consolidation or merger in whole or in part, (xi) not commingle its funds or other assets with those of any Affiliate or any other Person and shall maintain its properties and assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or any other Person, (xii) not hold itself out to be responsible for the debts or obligations of any other Person, (xiii) not, without the prior written consent of its Independent Director, take any Act of Insolvency, (xiv)(A) have at all times at least one Independent Director whose vote is required to take any Act of Insolvency, and (B) provide the Administrative Agent with up-to-date contact information for such Independent Director and a copy of the agreement pursuant to which such Independent Director consents to and serves as an “Independent Director” for such Person, (xv) ensure that the organizational documents for such Person provide that, for so long as any all Obligations remain outstanding, (A) that the Administrative Agent be given at least five Business Days’ prior notice of the removal and/or replacement of such Independent Director, together with the name and contact information of the replacement Independent Director and evidence of the replacement’s satisfaction of the definition of Independent Director, (B) that, to the fullest extent permitted by law, and notwithstanding any duty otherwise existing at law or in equity, such Independent Director shall consider only the interests of such Person, including its respective creditors, in acting or otherwise voting on the Act of Insolvency, and (C) that, except for duties to such Person as set forth in the immediately preceding clause (including duties to the holders of the Capital Stock in such Person or such Person’s respective creditors solely to the extent of their respective economic interests in such Person, but excluding (1) all other interests of the holders of the Capital Stock in such Person, (2) the interests of other Affiliates of such Person, and (3) the interests of any group of Affiliates of which such Person is a part), the Independent Director shall not have any fiduciary duties to the holders of the Capital Stock in such Person, any officer or any other Person bound by the organizational documents of such Person; provided that, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing, (xvi) not enter into any transaction with an Affiliate of such Person except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction, (xvii) allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an Affiliate, (xviii) not pledge its assets to secure the obligations of any other Person, (xix) not form, acquire or hold any Subsidiary or own any Capital Stock in any other entity, in each case, other than such Person, and (xx) have one natural person (who may be the Independent Director) that is not an economic member of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company agreement becomes a special member of the company simultaneously with the

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resignation or dissolution of the last remaining member of the company such that the company is continued without dissolution.

“Specially Designated Nationals List”: the Specially Designated Nationals and Blocked Persons List maintained by OFAC and available at http://www.ustreas.gov/offices/ enforcement/ofac/sdn/, or as otherwise published from time to time.

“Specified Commitment Increase Period”: the period between the Specified Commitment Increase Date until the date that is three months thereafter.

“Specified Commitment Increase Notice”: a written notice of a Responsible Officer of the Borrower Representative, in form and substance satisfactory to the Administrative Agent, delivered to the Administrative Agent at least five Business Days prior to the date specified in such notice (such date, the “Specified Commitment Increase Date”), requesting an increase in the Total Revolving Credit Commitments by $50,000,000 for only the Specified Commitment Increase Period, and certifying that any and all amounts of the Total Revolving Credit Commitments outstanding in excess of the Total Revolving Credit Commitments immediately prior to the Specified Commitment Increase Date shall be repaid in full on the last day of the Specified Commitment Increase Period; provided, that, on the Specified Commitment Increase Date, the Administrative Agent shall have received (unless otherwise agreed to or waived by the Administrative Agent), in form and substance satisfactory to the Administrative Agent and dated as of the Specified Commitment Increase Date, a certificate of a Responsible Officer from each Loan Party, substantially in the form of Exhibit C to the Credit Agreement.

“State”: any state, commonwealth or territory of the United States of America, in which the subject of such reference or any part thereof is located.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Guarantor.

“Tangible Net Worth”: with respect to any Person, on any date of determination, all amounts which would be included under capital or shareholder’s equity (or any like caption) on a balance sheet of such Person pursuant to GAAP, minus (a) amounts owing to such Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly affiliated with such Person or any Affiliate thereof, (b) intangible assets, and (c) prepaid taxes and/or expenses, all on or as of such date.

“Tax”: any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings (including backup withholding) or other similar charges, whether computed on a separate, consolidated, unitary, combined or other basis and any and all liabilities (including interest, fines, penalties or additions with respect to any of the foregoing) with respect to the foregoing.

“Term SOFR”: for the applicable corresponding tenor, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

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“Termination Date Extension Request”: a written request by Borrower Representative, in form and substance reasonably satisfactory to the Administrative Agent, for the extension of the applicable Revolving Credit Termination Date pursuant to Section 2.4.

“Third Amendment”: Third Amendment to Credit Agreement, dated as of the Third Amendment Effective Date, among the Borrowers, the Guarantor, the Lenders party thereto and the Administrative Agent.

“Third Amendment Effective Date”: the date on which the conditions precedent set forth in Section 2 of the Third Amendment shall have been satisfied, which date shall be no later than September 8, 2021.

“Third Amendment Fee Letter”: the Fee Letter, dated as of the Third Amendment Effective Date, by and among the Borrowers, the Arranger and the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Total Indebtedness”: with respect to any Person, on any date of determination, all Indebtedness of such Person (other than contingent liabilities not reflected on such Person’s consolidated balance sheet), plus the proportionate share of all Indebtedness (other than contingent liabilities not reflected on such Person’s consolidated balance sheet) of all non-consolidated Affiliates of such Person, on or as of such date of determination.

“Total Revolving Credit Commitments”: at any time, the aggregate amount of the Revolving Credit Commitments then in effect.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the Revolving Extensions of Credit of the Lenders outstanding at such time.

“Transferee”: as defined in Section 9.14.

“Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

“UK Financial Institutions”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Underlying Obligor”: the borrower under a Borrowing Base Asset.

“USA PATRIOT Act”: the United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56), as amended from time to time.

“Wells Servicing Agreement”: the Servicing Agreement, dated as of February 21, 2017, by and between Benefit Street Partners CRE Finance, LLC and Wells Fargo Bank, National Association (as such agreement relates to Additional Owner Assets (as defined in the Wells Servicing Agreement

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Joinder) only, to which BSPRT Finance Sub-Lender is a party pursuant to the Wells Servicing Agreement Joinder, as amended, restated, supplemented or otherwise modified from time to time.

“Wells Servicing Agreement Joinder”: the Joinder to Servicing Agreement, dated as of the Closing Date, by and between BSPRT Finance Sub-Lender and Wells Fargo Bank, National Association, substantially in the form of Exhibit D-2, relating to the Wells Servicing Agreement.

“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

1.2Other Definitional Provisions. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b)As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Guarantor and its Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

(c)The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d)The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(e)All calculations of financial ratios set forth in Section 6.1 shall be calculated to the same number of decimal places as the relevant ratios are expressed in and shall be rounded upward if the number in the decimal place immediately following the last calculated decimal place is five or greater. For example, if the relevant ratio is to be calculated to the hundredth decimal place and the calculation of the ratio is 5.126, the ratio will be rounded up to 5.13.

Section 2AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT

2.1Revolving Credit Commitments

. Subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans (the “Loans”) to the Borrowers from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding for such Lender which does not exceed the amount of such Lender’s Revolving Credit Commitment; provided that, the Total Revolving Extensions of Credit shall at no time exceed the Maximum Facility Availability at such time. During the Revolving Credit Commitment Period the Borrowers may use the Revolving Credit

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Commitments by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by Borrower Representative and notified to the Administrative Agent in accordance with Sections 2.2 and 2.9; provided that, no Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date.

(b)The Borrowers shall repay all outstanding Loans on the Revolving Credit Termination Date.

2.2Procedure for Revolving Credit Borrowing. The Borrowers may borrow under the Revolving Credit Commitments on any Business Day during the Revolving Credit Commitment Period; provided that, Borrower Representative shall deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice must be (x) received by the Administrative Agent (i) prior to 2:00 P.M. (New York City time) two Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (ii) prior to 10:00 A.M. (New York City time) on the requested Borrowing Date, in the case of Base Rate Loans and (y) accompanied by a pro forma Borrowing Base Certificate). Each borrowing of Loans under the Revolving Credit Commitments shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof (or, if the then aggregate Available Revolving Credit Commitments are less, such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof (or, if the then aggregate Available Revolving Credit Commitments are less, such lesser amount). Upon receipt of any such Borrowing Notice from Borrower Representative, the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make its Revolving Credit Percentage of the amount of each borrowing of Loans available to the Administrative Agent for the account of the applicable Borrower indicated on the applicable Borrowing Notice at the Funding Office prior to 11:30 A.M. (New York City time) on the Borrowing Date requested by Borrower Representative in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the applicable Borrower by the Administrative Agent in like funds as received by the Administrative Agent.

2.3Repayment of Loans; Evidence of Debt. The Borrowers hereby jointly and severally unconditionally promise to pay to the Administrative Agent for the account of the appropriate Lender the then unpaid principal amount of each Loan of such Lender on the Revolving Credit Termination Date (or on such earlier date on which the Loans become due and payable pursuant to Section 7.1). The Borrowers hereby further agree to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date hereof until payment in full thereof, in each case, at the rates per annum, and on the dates, set forth in Section 2.11.

(b)Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrowers to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(c)The Administrative Agent, on behalf of the Borrowers, shall maintain the Register pursuant to Section 9.6(c), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder and any Note evidencing such Loan, the Type of such Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrowers and each Lender’s share thereof.

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(d)The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.3(b) shall, to the extent permitted by applicable law and absent manifest error, be prima facie evidence of the existence and amounts of the obligations of the Borrowers therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of such Borrower to repay (with applicable interest) the Loans made to the Borrowers in accordance with the terms of this Agreement.

(e)Each Borrower agrees that, upon the request to the Administrative Agent by any Lender, the Borrowers will promptly execute and deliver to such Lender a Note evidencing any Loans of such Lender, substantially in the form of Exhibit F, with appropriate insertions as to date and principal amount; provided that, delivery of Notes shall not be a condition precedent to the occurrence of the Closing Date or the making of Loans, if any, on the Closing Date.

2.4Extension of Revolving Credit Termination Date.   During the period commencing not more than 180 days prior to, and ending not less than 90 days prior to the Revolving Credit Termination Date then in effect (the “Existing Termination Date”) the Borrowers shall have the option, by delivery of a Termination Date Extension Request by Borrower Representative to the Administrative Agent (which shall promptly deliver a copy thereof to each of the Lenders), to extend the Existing Termination Date with respect to all, or any portion of, the Revolving Credit Commitments, for an additional one-year period in accordance with this Section 2.4; provided that, (i) no Event of Default or Material Default shall have occurred and be continuing at the time a Termination Date Extension Request is delivered to the Lenders or at the time of the applicable extension, (ii) except as to interest, fees and final maturity (which shall be subject to the requirements of this Section 2.4, be determined by Borrower Representative and set forth in the Termination Date Extension Request), the Revolving Credit Commitments and Loans extended pursuant to a Termination Date Extension Request shall have the same terms as the original Revolving Credit Commitments and Loans subject to such Termination Date Extension Request, (iii) Borrower Representative may not submit more than one Termination Date Extension Request and (iv) the Revolving Credit Termination Date, as extended, shall not be later than the September 20, 2024 of the Closing Date.

(b)The Termination Date Extension Request shall specify (i) the date to which the Existing Termination Date is to be extended, (ii) the portion of the Revolving Credit Commitments to be extended, (iii) the changes, if any, to the Applicable Margin to be applied in determining the interest payable on the Loans of, and the fees payable hereunder to, Extending Lenders (as defined below) in respect of that portion of their Revolving Credit Commitments and Loans extended to such new Revolving Credit Termination Date and (iv) any other amendments or modifications to this Agreement to be effected in connection with the Termination Date Extension Request; provided that, no such changes or modifications requiring approvals pursuant to the provisos in Section 9.1 shall become effective prior to the then Existing Termination Date and other matters contemplated thereby on the terms and subject to the conditions set forth therein (each Lender holding Revolving Credit Commitments subject to the Termination Date Extension Request being referred to herein as an “Extending Lender”). If the Borrowers elect to extend only a portion of the then existing Revolving Credit Commitment, each Lender will be deemed for purposes hereof to be an Extending Lender solely in respect of such extended portion, and the aggregate principal amount of each Type of Loans of such Lender shall be allocated ratably among the extended and non-extended portions of the Loans of such Lender based on the aggregate principal amount of such Loans so extended and not extended. Subject to Section 2.4(e), on the date specified in the Termination Date Extension Request as the effective date thereof, (i) the Existing Termination Date of the applicable Revolving Credit Commitments and Loans shall, as to the Extending Lenders, be extended to such date as shall be specified therein and (ii) such other modifications and

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amendments hereto specified in the Termination Date Extension Request shall (subject to any required approvals (including those of the Required Lenders) having been obtained) shall become effective.

(c)[Intentionally omitted].

(d)If a Termination Date Extension Request has become effective hereunder:

(i)not later than the fifth Business Day prior to the Existing Termination Date, the Borrowers shall make prepayments of Loans such that, after giving effect to such prepayments, the Total Revolving Extensions of Credit as of such date will not exceed the aggregate Revolving Credit Commitments of the Extending Lenders extended pursuant to this Section 2.4 (and the Borrowers shall not be permitted thereafter to request any Loan if, after giving effect thereto, the Total Revolving Extensions of Credit of all Lenders would exceed the aggregate amount of the Revolving Credit Commitments so extended); and

(ii)on the Existing Termination Date, if the Borrowers have elected to extend only a portion of the then-existing Revolving Credit Commitment and Loans, the non-extended portion of the Revolving Credit Commitments shall terminate, and the Borrowers shall repay the non-extended portion of such Loans, together with accrued and unpaid interest and all fees and other amounts owing to the applicable Lender hereunder, it being understood and agreed that, subject to satisfaction of the conditions set forth in Section 4.2, such repayments may be funded with the proceeds of new Loans made simultaneously with such repayments by the Extending Lenders, which Loans shall be made ratably by the Extending Lenders in accordance with their Extended Revolving Credit Commitments.

(e)The Termination Date Extension Request shall become effective hereunder, on the effective date of such extension, upon the satisfaction of the following conditions:

(i)on the Existing Termination Date, the Administrative Agent shall have received an officer’s certificate from a Responsible Officer of Borrower Representative certifying that:

(x) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of date; provided that, (A) to the extent that any such representation and warranty relates to a specific earlier date, they shall be true and correct in all material respects as of such earlier date and (B) to the extent that any such representation and warranty is qualified as to “materiality”, “Material Adverse Effect” or similar language, they shall be true and correct (after giving effect to any such qualification therein) in all respects on such respective dates; and

(y) no Event of Default or Material Default has occurred and is continuing on such date or after giving effect to the requested extension; and

(ii)the Administrative Agent shall have received, for the ratable account of each Extending Lender, an extension fee in the amount of 0.25% of the Revolving Credit Commitments and Loans so extended.

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(f)Notwithstanding any provision of this Agreement to the contrary, it is hereby agreed that no extension of an Existing Termination Date in accordance with the express terms of this Section 2.4, or any amendment or modification of the terms and conditions of the Revolving Credit Commitments and Loans of the Extending Lenders effected pursuant thereto, shall be deemed to violate (i) the last sentence of Section 2.6 or Section 2.14 or 9.7 or any other provision of this Agreement requiring the ratable reduction of Revolving Credit Commitments or the ratable sharing of payments or (ii) require the consent of all Lenders or all affected Lenders under Section 9.1.

(g)The Borrowers, the Administrative Agent and the Extending Lenders may enter into an amendment to this Agreement to effect such modifications as may be reasonably necessary to reflect the terms of the Termination Date Extension Request that has become effective in accordance with the provisions of this Section 2.4. In connection with such amendment, the Borrowers shall, if reasonably requested by the Administrative Agent, deliver a customary opinion of counsel reasonably acceptable to the Administrative Agent as to the enforceability of such amendment, this Agreement as amended thereby and such other Loan Documents (if any) as may be amended thereby.

2.5Commitment Fees, etc. The Borrowers agree to pay to the Administrative Agent for the account of each Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Credit Commitment Period, computed at the applicable Commitment Fee Rate on the average daily amount of the Available Revolving Credit Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Revolving Credit Termination Date, commencing on the first of such dates to occur after the date hereof. If there is any change in the Commitment Fee Rate during any quarter, the actual daily amount of the commitment fee shall be computed and multipliedby the Commitment Fee Rate separately for each period during such quarter that such Commitment Fee Rate was in effect.

(b)The Borrowers jointly and severally agree to pay to the Administrative Agent and the Arranger the fees in the amounts and on the dates set forth in the Fee Letters and otherwise from time to time agreed to in writing by the Borrowers, the Administrative Agent and the Lenders.

2.6Termination or Reduction of Revolving Credit Commitments. The Borrowers shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Credit Commitments or, from time to time, to reduce the aggregate amount of the Revolving Credit Commitments; provided that, no such termination or reduction of Revolving Credit Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Maximum Facility Availability. Any such reduction (excluding any termination of a portion of the Revolving Credit Commitments pursuant to Section 2.4) shall be in an amount equal to $1,000,000, or a whole multiple thereof (or, if the aggregate Revolving Credit Commitments are less, such lesser amount), and shall reduce permanently the Revolving Credit Commitments then in effect.

2.7Optional Prepayments

. The Borrowers may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty (except as otherwise provided herein), upon delivery of an irrevocable Prepayment Notice delivered to the Administrative Agent no later than 2:00 P.M. (New York City time) three Business Days prior thereto in the case of Eurodollar Loans and no later than 10:00 A.M. (New York City time) on the day thereto in the case of Base Rate Loans, which Prepayment Notice shall specify the date and amount of such prepayment and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest

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Period applicable thereto, the Borrowers shall also pay any amounts owing pursuant to Section 2.17. Upon receipt of a Prepayment Notice the Administrative Agent shall promptly notify each relevant Lender thereof. If a Prepayment Notice is given, the amount specified in such Prepayment Notice shall be due and payable on the date specified therein, together with (except in the case of Loans that are Base Rate Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Loans (other than after any principal prepayment with respect to a Borrowing Base Asset made by the relevant Underlying Obligor which, immediately after giving effect to such prepayment, does not result in the Borrower being required to make a mandatory prepayment in accordance with Section 2.8) shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $250,000 thereof (or, if the aggregate outstanding principal amount of the Loans are less, such lesser amount).

2.8Mandatory Prepayments. If at any date the Total Revolving Extensions of Credit exceed the Maximum Facility Availability calculated as of such date (including, for the avoidance of doubt, if the Borrowing Base decreases due to a Borrowing Base Asset ceasing to qualify as an Eligible Asset), the Borrowers shall prepay the Loans within two Business Days of such date in an aggregate amount equal to or greater than such excess so that the Total Revolving Extensions of Credit no longer exceed the Maximum Facility Availability as of such date.

2.9Conversion and Continuation Options.  The Borrowers may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Administrative Agent prior irrevocable notice of such election with delivery of a Conversion/Continuation Notice no later than 12:00 Noon (New York City time) two Business Days in advance thereof; provided that, any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto. The Borrowers may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 12:00 Noon (New York City time) two Business Days in advance thereof (which notice shall specify the length of the initial Interest Period therefor); provided that no Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is continuing and the Administrative Agent has, or the Required Lenders have determined in its or their sole discretion not to permit such conversions or (ii) after the date that is one month prior to the Revolving Credit Termination Date (as in effect from time to time). Upon receipt of any such notice, the Administrative Agent shall promptly notify each Lender thereof.

(b)The Borrowers may elect to continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto by giving irrevocable notice to the Administrative Agent no later than 12:00 Noon (New York City time) two Business Days in advance thereof; provided that no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Administrative Agent has, or the Required Lenders have, determined in its or their sole discretion not to permit such continuations or (ii) after the date that is one month prior to the Revolving Credit Termination Date; and providedfurther that if Borrower Representative shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall be converted automatically to Base Rate Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice, the Administrative Agent shall promptly notify each Lender thereof.

2.10Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $250,000 in excess thereof (or, if the aggregate Eurodollar Loans then outstanding are less, such lesser amount).

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2.11Interest Rates and Payment Dates.   Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(b)Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate per annum equal to the Base Rate in effect for such day plus the Applicable Margin.

(c)(i) At any time an Event of Default has occurred and is continuing, all outstanding Loans (whether or not overdue) (to the extent legally permitted) shall bear interest at a rate per annum that is equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% per annum and (ii) if all or a portion of any interest payable on any Loan or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans plus 2% per annum, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (after as well as before judgment).

(d)Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand during the applicability of Section 2.11(c). The Administrative Agent shall use commercially reasonable efforts to deliver an invoice 5 Business Days prior to each Interest Payment Date; provided that, the Administrative Agent’s failure to deliver an invoice pursuant to this Section 2.11(d) shall not relieve, excuse or waive any of the Borrowers’ payment or other obligation under the Loan Documents.

2.12Computation of Interest and Fees; Retroactive Adjustments of Applicable Margin.   Interest, fees and commissions payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify Borrower Representative and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify Borrower Representative and the relevant Lenders of the effective date and the amount of each such change in interest rate.

(b)Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of Borrower Representative, deliver to Borrower Representative a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.11(a) or (b).

2.13Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a)the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; provided, that the Administrative Agent has made a similar determination, where permitted, under each other comparable credit facility where the Administrative Agent is the administrative agent (or a capacity similar thereto), or

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(b)the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period; provided, that such Lenders shall have taken similar action, where permitted, under each other comparable credit facility where such Lender is a lender,

the Administrative Agent shall give telecopy or telephonic notice thereof to Borrower Representative and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then current Interest Period with respect thereto, to Base Rate Loans unless such notice has been withdrawn. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrowers have the right to convert Loans to Eurodollar Loans.

2.14Pro Rata Treatment and Payments.   Each borrowing by the Borrowers from the Lenders hereunder, each payment by the Borrowers on account of any commitment fee and any reduction of the Revolving Credit Commitments of the Lenders, shall be made pro rata according to the Revolving Credit Percentages of the Lenders. Each payment of interest in respect of the Loans and each payment in respect of fees payable hereunder shall be applied to the amounts of such obligations owing to the Lenders pro rata according to the respective amounts then due and owing to the Lenders.

(b)Each payment (including each prepayment) by the Borrowers on account of principal of the Loans shall be made pro rata according to the respective outstanding principal amounts of the Loans then held by the Lenders.

(c)The application of any payment of Loans (including optional and mandatory prepayments) shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each payment of the Loans (except in the case of Loans that are Base Rate Loans) shall be accompanied by accrued interest to the date of such payment on the amount paid.

(d)All payments (including prepayments) to be made by the Borrowers hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to the Payment Time, on the due date thereof to the Administrative Agent, for the account of the relevant Lenders, at the Payment Office, in Dollars and in immediately available funds. Any payment made by the Borrowers after the Payment Time on any Business Day shall be deemed to have been made on the next following Business Day. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be deemed made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(e)Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing of Loans that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative

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Agent may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans, on demand, from the Borrowers.

(f)Unless the Administrative Agent shall have been notified in writing by Borrower Representative prior to the date of any payment of Loans due to be made by the Borrowers hereunder that the Borrowers will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrowers are making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrowers within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrowers.

(g)Upon receipt by the Administrative Agent of payments on behalf of Lenders, the Administrative Agent shall promptly distribute such payments to the Lender or Lenders entitled thereto, in like funds as received by the Administrative Agent.

2.15Requirements of Law.   If any Change in Law:

(i)shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Loan made by it (except for Non-Excluded Taxes imposed on amounts payable by the Borrowers under this Agreement, taxes expressly excluded under the provisions of Section 2.16 in defining “Non-Excluded Taxes” or Other Taxes covered by Section 2.16);

(ii)shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or

(iii)shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender, in its commercially reasonable judgment, deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrowers shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount

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receivable; provided, however, that with respect to the foregoing, such Lender has made such determination and imposed such increase upon all of its similarly situated borrowers under similar credit facilities. If any Lender becomes entitled to claim any additional amounts pursuant to this Section 2.15, it shall promptly notify Borrower Representative (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

(b)Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.15 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender pursuant to this Section 2.15 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies Borrower Representative of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

(c)If any Lender shall have determined that any Change in Law regarding capital adequacy or liquidity requirements or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under to a level below that which such Lender or such corporation could have achieved but for such Change in Law or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender, in its commercially reasonable judgment, to be material, then from time to time, after submission by such Lender to Borrower Representative (with a copy to the Administrative Agent) of a written request therefor, the Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction; provided, however, that with respect to the foregoing, such Lender has made such determination and imposed such increase upon all of its similarly situated borrowers under similar credit facilities.

(d)A certificate as to any additional amounts payable pursuant to this Section 2.15 submitted by any Lender to Borrower Representative (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The obligations of the Borrowers pursuant to this Section 2.15 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.16Taxes.   All payments made by the Borrowers under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes, except as required by applicable Law. If any applicable Law (as determined in good faith by an applicable withholding agent) requires the deduction or withholding of any Tax, excluding, however, (i) net income Taxes (however denominated), branch profit Taxes, and franchise Taxes (A) imposed on any Recipient by the United States, or by the jurisdiction under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (B) that are Other Connection Taxes; (ii) Taxes that are attributable to such Recipient’s failure to comply with the requirements of paragraph (e) or (h) of this Section 2.16; (iii) in the case of a Lender, United States federal withholding Taxes imposed on amounts payable to such Lender pursuant to a law in effect on the date on which such Lender (A) becomes a party to this Agreement (other than pursuant to an assignment request under Section 2.19), or (B) designates a new lending office, except, in each case, to the extent that pursuant to this Section 2.16, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before the time of assignment or to such Lender immediately before it changed its lending office; or (iv) any U.S. federal withholding Taxes imposed under FATCA (Taxes

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not so excluded, and imposed on or with respect to any payment made by or on account of any obligation of any Borrower under any Loan Document, “Non-Excluded Taxes”), then, in the case of any Non-Excluded Taxes or any Other Taxes, the amounts so payable to the Recipient shall be increased to the extent necessary to yield to the Recipient (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement.

(b)In addition, without duplication of other amounts payable by the Borrowers or Loan Party pursuant to Section 2.16(a), the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)The Borrowers shall indemnify each Lender or the Administrative Agent, as the case may be, within ten days after demand therefor, for the full amount of any Non-Excluded Taxes (including Non-Excluded Taxes imposed or asserted on or attributable to amounts payable under this Section 2.16(c)) payable or paid by the Administrative Agent or such Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower Representative by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrowers, as promptly as possible thereafter Borrower Representative shall send to the Administrative Agent for the account of the relevant Agent or Lender, as the case may be, a certified copy of an original official receipt received by Borrower Representative showing payment thereof, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. If the Borrowers fail to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrowers shall indemnify the Administrative Agent and the Lenders for any Taxes that may become payable by the Administrative Agent or any Lender as a result of any such failure, except to the extent that any such amounts are compensated for by an increased payment under Section 2.18(a). The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

(e)Each Lender shall deliver documentation and information to Borrower Representative and the Administrative Agent, at the times and in form required by applicable law or reasonably requested by Borrower Representative or the Administrative Agent, sufficient to permit Borrower Representative or the Administrative Agent to determine whether or not payments made with respect to this Agreement or any other Loan Documents are subject to taxes, and, if applicable, the required rate of withholding or deduction. Each such Lender shall, whenever a lapse in time or change in circumstances renders such documentation expired, obsolete or inaccurate in any material respect, deliver promptly to Borrower Representative and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the applicable withholding agent) or promptly notify Borrower Representative and the Administrative Agent in writing of its legal ineligibility to do so. In addition, any Recipient, if reasonably requested by Borrower Representative or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower Representative or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Except for the items expressly referenced in clause (i) below, a Lender shall not be required to deliver any documentation or information pursuant to this paragraph that such Lender is not legally able to deliver. Without limiting the generality of the foregoing,

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(i)Any Lender (or Transferee) that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to Borrower Representative and the Administrative Agent Internal Revenue Service Form W-9 (or successor form) on or prior to the date it becomes a Lender hereunder (and from time to time thereafter upon the reasonable request of Borrower Representative or the Administrative Agent) establishing that such Lender is not subject to U.S. backup withholding or such Lender shall otherwise establish an exemption from U.S. backup withholding, and provide a new U.S. Internal Revenue Service Form W-9.

(ii)Each Lender (or Transferee) that in not a “United States person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to Borrower Representative and the Administrative Agent (or, in the case of a Participant that would be Non-U.S. Lender if it were a Lender (each, a “Non-U.S. Participant”), to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN, Form W-8BEN-E or Form W-8ECI, Form W-8IMY (together with all required supporting documentation), or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest” a statement substantially in the form of Exhibit G-1, G-2, G-3 or G-4, as applicable, and a Form W-8BEN or Form W-8BEN-E, or any subsequent versions thereof or successors thereto properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrowers under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Non-U.S. Participant, on or before the date such Non-U.S. Participant purchases the related participation) (and from time to time thereafter upon the reasonable request of Borrower Representative or the Administrative Agent). Each Non-U.S. Lender shall promptly notify Borrower Representative (or, in the case of a Non-U.S. Participant, the Lender from which the related participation shall have been purchased) at any time it determines that it is no longer in a position to provide any previously delivered certificate to Borrower Representative (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver.

(f)For the avoidance of doubt, if a Lender is an entity disregarded from its owner for U.S. federal income tax purposes, references to the foregoing documentation are intended to refer to documentation with respect to such Lender’s owner and, as applicable, such Lender.

(g)The Administrative Agent shall deliver to Borrower Representative a duly executed U.S. branch withholding certificate on U.S. Internal Revenue Service Form W-8IMY evidencing its agreement to be treated as a United States person with respect to payments made by the Borrowers under this Agreement on or prior to the Closing Date, and thereafter when such documentation previously delivered has expired or become obsolete or invalid or otherwise upon the reasonable request of Borrower Representative. Notwithstanding anything to the contrary in this Section 2.16, the Administrative Agent shall not be required to provide any documentation that the Administrative Agent is not legally eligible to deliver.

(h)If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the

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applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower Representative and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower Representative or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower Representative or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (h), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(i)If the Administrative Agent or a Lender determines in its discretion exercised in good faith that it has received a refund of any Non-Excluded Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section 2.16, it shall pay over such refund to Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by Borrowers under this Section 2.16 with respect to the Non-Excluded Taxes or the Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that if the Administrative Agent or such Lender is required to repay all or a portion of such refund to the relevant Governmental Authority, Borrowers, upon the request of the Administrative Agent or such Lender, shall repay the amount paid over to Borrowers that is required to be repaid (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender within three Business Days after receipt of written notice that the Administrative Agent or such Lender is required to repay such refund (or a portion thereof) to such Governmental Authority. Notwithstanding anything to the contrary, in no event will the Administrative Agent or any Lender be required to pay any amount to Borrowers the payment of which would place the Administrative Agent or such Lender in a less favorable net after-Tax position than the Administrative Agent or such Lender would have been in if the Non-Excluded Taxes giving rise to such refund had not been deducted, withheld or otherwise imposed and additional amounts with respect to such Non-Excluded Taxes had never been paid.

(j)Nothing in this Section 2.16 shall require the Lender to make available any of its tax returns or any other information that it deems to be confidential or proprietary.

2.17Indemnity. The Borrowers jointly and severally agree to indemnify each Lender for, and to hold each Lender harmless from, any actual out-of-pocket loss or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrowers in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrowers have given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrowers in making any prepayment after the Borrowers have given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market. A certificate as to any amounts payable pursuant to this Section submitted to Borrower Representative by any Lender shall be

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conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.18Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall, upon notice to Borrower Representative, be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law; provided, however, that with respect to the foregoing, such Lender has made such determination and imposed such conversion upon all of its similarly situated borrowers under similar credit facilities. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrowers shall pay to such Lender such amounts, if any, as may be required pursuant to Section 2.17.

2.19Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.15, 2.16 or 2.18 with respect to such Lender, it will, if requested by Borrower Representative, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage; and providedfurther that nothing in this Section shall affect or postpone any of the obligations of any Borrower or the rights of any Lender pursuant to Section 2.15, 2.16(a) or 2.18.

2.20Replacement of Lenders under Certain Circumstances.   The Borrowers shall be permitted to replace any Lender that (i) requests reimbursement for amounts owing pursuant to Section 2.15 or 2.16 or gives a notice of illegality pursuant to Section 2.18, (ii) is a Defaulting Lender or (iii) is a Non-Consenting Lender with a replacement financial institution; provided that (A) such replacement does not conflict with any Requirement of Law, (B) no Event of Default shall have occurred and be continuing at the time of such replacement, (C) prior to any such replacement, such Lender shall not have taken action under Section 2.19 which has eliminated the continued need for payment of amounts owing pursuant to Section 2.15 or 2.16 or which has eliminated the illegality referred to in such notice of illegality given pursuant to Section 2.18, (D) the replacement financial institution shall purchase, at par (or such other amount agreed upon by the replacement financial institution and the replaced Lender), all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (E) the Borrowers shall be liable to such replaced Lender under Section 2.17 (as though Section 2.17 were applicable) if any Eurodollar Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (F) the replacement financial institution, if not already a Lender, shall be an Eligible Assignee and be reasonably satisfactory to the Administrative Agent, (G) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 9.6 (provided that, if applicable, the Borrowers shall be obligated to pay the registration and processing fee referred to therein), (H) the Borrowers shall pay all additional amounts (if any) required pursuant to Section 2.15 or 2.16, as the case may be, in respect of any period prior to the date on which such replacement shall be consummated, and (I) any such replacement shall not be deemed to be a waiver of any rights that the Borrowers, the Administrative Agent or any other Lender shall have against the replaced Lender.

(b)In the event that (i)  Borrower Representative or the Administrative Agent has requested that the Lenders consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver or amendment requires the agreement of the

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Required Lenders, all Lenders or all affected Lenders in accordance with the terms of Section 9.1 and (iii) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender”.

2.21[Intentionally Omitted].

2.22Defaulting Lender.

(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i)Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders”.

(ii)Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 7.1 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.7 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as Borrower Representative may request (so long as no Default or Event of Default has occurred and is continuing), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and Borrower Representative, to be held in a deposit account and released in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with their Revolving Credit Commitments. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)Certain Fees. No Defaulting Lender shall be entitled to receive any commitment fee pursuant to Section 2.5(a) for any period during which that Lender is a

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Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(b)Defaulting Lender Cure. If Borrower Representative and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with their Revolving Credit Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and providedfurther that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

2.23Borrower Representative. Borrower Representative hereby (i) is designated and appointed by each Borrower as its representative and agent on its behalf and (ii) accepts such appointment as the representative and agent of the Borrowers, in each case, for the purposes of issuing Borrowing Notices, giving instructions with respect to the disbursement of the proceeds of the Loans, selecting interest rate options, giving and receiving all other notices and consents hereunder or under any of the other Loan Documents and taking all other actions (including in respect of compliance with covenants, but without relieving any other Borrower of its joint and several obligations to pay and perform the Obligations) on behalf of any Borrower or the Borrowers under the Loan Documents. The Administrative Agent and each Lender may regard any notice or other communication pursuant to any Loan Document from Borrower Representative as a notice or communication from all Borrowers. Each warranty, covenant, agreement and undertaking made on behalf of a Borrower by Borrower Representative shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.

2.24Benchmark Replacement Setting. Notwithstanding anything to the contrary herein or in any other Loan Document:

(a)Replacing LIBO Rate. On March 5, 2021 the Financial Conduct Authority (“FCA”), the regulatory supervisor of the administrator of LIBO Rate (“IBA”), announced in a public statement the future cessation or loss of representativeness of overnight/Spot Next, 1-month, 3-month, 6-month and 12-month LIBO Rate tenor settings. On the earlier of (i) the date that all Available Tenors of LIBO Rate have either permanently or indefinitely ceased to be provided by IBA or have been announced by the FCA pursuant to public statement or publication of information to be no longer representative and (ii) the Early Opt-in Effective Date, if the then-current Benchmark is LIBO Rate, the Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Loan Document. If the Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a quarterly basis.

(b)Replacing Future Benchmarks. Upon the occurrence of a Benchmark Transition Event, the Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Borrower Representative without any amendment to this Agreement or any other Loan Document, or further action

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or consent of the Borrowers. At any time that the administrator of the then-current Benchmark has permanently or indefinitely ceased to provide such Benchmark or such Benchmark has been announced by the regulatory supervisor for the administrator of such Benchmark pursuant to public statement or publication of information to be no longer representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored, the Borrower Representative may revoke any request for a borrowing of, conversion to or continuation of Loans to be made, converted or continued that would bear interest by reference to such Benchmark until the Borrower Representative’s receipt of notice from the Administrative Agent that a Benchmark Replacement has replaced such Benchmark, and, failing that, the Borrower Representative will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During the period referenced in the foregoing sentence, the component of Base Rate based upon the Benchmark will not be used in any determination of Base Rate.

(c)Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

(d)Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower Representative of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by the Administrative Agent pursuant to this Section 2.24, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.24.

(e)Unavailability of Tenor of Benchmark. At any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or LIBO Rate), then the Administrative Agent may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (ii) the Administrative Agent may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.

Section 3REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans, each Borrower and the Guarantor hereby jointly and severally represent and warrant, on behalf of the other Loan Parties, to the Administrative Agent and each Lender that:

3.1Financial Condition.

(a)The unaudited consolidated balance sheet of the Guarantor as at June 30, 2017, and the related consolidated statements of income and retained earnings and of cash flows for the fiscal quarter ended on such date, copies of which have heretofore been furnished to each Lender, present fairly in accordance with GAAP (to the extent applicable) the consolidated financial condition of the Guarantor and its consolidated Subsidiaries as at such date, and the consolidated results of its operations and its consolidated cash flows for the fiscal quarter then ended.

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(b)The audited consolidated balance sheet of the Guarantor as at December 31, 2016, and the related consolidated statement of income and retained earnings and of cash flows for the fiscal year ended on such date, reported on by and accompanied by an unqualified report from KPMG LLP, copies of which have heretofore been furnished to each Lender, present fairly in accordance with GAAP (to the extent applicable) the consolidated financial condition of the Guarantor and its consolidated Subsidiaries as at such date, and the consolidated results of its operations and its consolidated cash flows for the fiscal year then ended.

(c)All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved, subject, in the case of the quarterly financial statements, to normal year-end audit adjustments and the absence of footnotes. The Loan Parties do not have any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including, without limitation, any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the most recent financial statements referred to in this paragraph. During the period from December 31, 2016 to and including the date hereof there has been no Disposition by the Guarantor and its Subsidiaries of any material part of its business or Property.

3.2No Change. Since December 31, 2016 there has been no development or event that has had or would reasonably be expected to have a Material Adverse Effect, which has not been disclosed by Borrower Representative in accordance with Section 5.7(f) and waived in writing by the Administrative Agent and the Required Lenders.

3.3Corporate Existence; Compliance with Law; Special Purpose Entity. (a) Each of the Loan Parties (i) is duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate power and authority, and the legal right and all requisite governmental licenses, authorizations, consents and approvals to own and operate its Property and to conduct the business in which it is currently engaged, (iii) is duly qualified as a foreign corporation or other organization and in good standing (to the extent such concept exists in such jurisdiction) under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (iv) is in compliance with all Requirements of Law, except in the case of clauses (ii) (with respect to requisite governmental licenses, authorizations, consents and approvals only), (iii) and (iv) to the extent that the failure to so qualify or comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)Each Borrower complies with the definition of Special Purpose Entity.

3.4Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has the corporate or other power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of each Borrower, to borrow hereunder. Each Loan Party has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of each Borrower, to authorize the borrowings on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except consents, authorizations, filings and notices which have been obtained or made and are in full force and effect. Each Loan Document has been or will be duly executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each

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such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

3.5No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation. No Requirement of Law or Contractual Obligation applicable to any Loan Party would reasonably be expected to have a Material Adverse Effect.

3.6No Material Litigation. Except as otherwise disclosed to the Administrative Agent prior to the Closing Date or after the Closing Date pursuant to Section 5.7(c) and waived in writing by the Administrative Agent and the Required Lenders, no litigation, investigation of which any Borrower or the Guarantor has Knowledge or proceeding of or before any arbitrator or Governmental Authority is pending or, to the Knowledge of any Borrower or the Guarantor, threatened in writing by or against any Loan Party or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that would reasonably be expected to have a Material Adverse Effect.

3.7No Default. None of the Loan Parties is in default under or with respect to any of its Contractual Obligations (other than those governing Indebtedness of any Loan Party) in any respect, that could reasonably be expected to have a Material Adverse Effect, and no Default or Event of Default has occurred and is continuing which has not been disclosed a Borrower in accordance with Section 5.7(a) and waived in writing by the Administrative Agent and the Required Lenders.

3.8[Intentionally Omitted].

3.9Taxes. Each of the Loan Parties has filed or caused to be filed all Federal, state and other material tax returns that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority (other than any taxes the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the applicable Loan Party; and no tax Lien has been filed (other than with respect to any taxes the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the applicable Loan Party, as the case may be), and, to the Knowledge of the Borrowers and the Guarantor, no claim is being asserted against any Loan Party, with respect to any such tax, fee or other charge.

3.10Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board.

3.11Labor Matters

. Except as otherwise disclosed by Borrower Representative pursuant to Section 5.7(f) and waived in writing by the Administrative Agent and the Required Lenders, there are no strikes or other labor disputes against any Loan Party pending or, to the Knowledge of the Borrowers, threatened that

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(individually or in the aggregate) in either case would reasonably be expected to have a Material Adverse Effect.

3.12ERISA. Neither a Reportable Event nor a failure to meet the minimum funding standards and benefit limitations of Section 412, 430 or 436 of the Code with respect to any Plan (whether or not waived) has occurred. Each Plan has complied in all material respects with the applicable provisions of ERISA and the Code, except as would not reasonably be expected to have a Material Adverse Effect. No termination of a Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during the previous five years. Neither any Borrower, the Guarantor nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect, and neither any Borrower nor the Guarantor would become subject to any material liability under ERISA if such Borrower, the Guarantor or any Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made, except as would not reasonably be expected to have a Material Adverse Effect. No such Multiemployer Plan is in Reorganization or, to the Knowledge of any Borrower, Insolvent.

3.13Investment Company Act; Other Regulations. No Loan Party is required to register as an “investment company,” or a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended.

3.14[Intentionally Omitted].

3.15Use of Proceeds. The proceeds of the Loans shall be used by the Borrowers and their Affiliates (a) to originate loans or other Eligible Assets pursuant to Borrowers’ investment guidelines and (b) for operating expenses and general corporate purposes of the Borrowers and their Affiliates (including, without limitation, Restricted Payments to the Intermediate Pledgors and the Guarantor permitted by Section 6.6).

3.16Environmental Matters. Except with respect to any matters that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, no Loan Party has (i) failed to comply with any Environmental Law, (ii) failed to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (iii) become subject to any Environmental Liability that remains outstanding, (iv) received written notice of any claim with respect to any Environmental Liability that remains outstanding or (v) gained Knowledge of any basis for any Environmental Liability that remains outstanding.

3.17Accuracy of Information, etc. None of the information and data heretofore or contemporaneously furnished in writing by or on behalf of any Loan Party (other than financial estimates, forecasts and other forward-looking information, pro forma financial information and information of a general economic or industry-specific nature) to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or omits to state any material fact necessary to make such information and data (taken as a whole), in light of the circumstances under which it was delivered, not materially misleading, provided that, any such information and data with respect to Borrowing Base Assets or Proposed Borrowing Base Assets only, shall be subject to the Knowledge of the Borrowers. With respect to any projections (including the projections delivered on the Closing Date), financial estimates, forecasts and other forward-looking information or any pro forma financial information, the Borrowers represent that such information was prepared in good faith based upon

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assumptions believed to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.

3.18Security Documents. Each Security Document is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the Pledged Stock described in the Pledge Agreement, when any stock certificates representing such Pledged Stock are delivered to the Administrative Agent, and in the case of the other Collateral described in the other Security Documents, when financing statements in appropriate form are filed in the offices specified on Schedule 3.18 (which financing statements have been duly completed and delivered to the Administrative Agent) and such other filings as are specified in the Security Documents have been completed (all of which filings have been duly completed), the Security Documents shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations, in each case prior and superior in right to any other Person (except, in the case of Collateral other than Pledged Stock, Liens permitted by Section 6.3).

3.19Representations and Warranties Regarding Borrowing Base Assets.  Each Borrowing Base Asset is an Eligible Asset and conforms to the applicable representations and warranties set forth in Annex B attached hereto, except as has been disclosed to the Administrative Agent in an Exception Report prior to approval of such Borrowing Base Asset pursuant to Section 4.3 and otherwise from time to time. Each Borrowing Base Asset has been originated directly by a Borrower or an Affiliate of such Borrower.

3.20Solvency. Each Loan Party is, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be and will continue to be, Solvent.

3.21REIT Status; Guarantor Tax Status. The Guarantor has been organized and operated in a manner that has allowed it to qualify for REIT Status commencing with its taxable year ending December 31, 2013. Each of the Intermediate Pledgors and each Borrower is treated as a qualified REIT subsidiary, as defined in Section 856(i)(2) of the Code, and is not an association taxable as a corporation under the Code.

3.22Insurance. The Loan Parties are insured with financially sound and reputable insurance companies (as determined in the good faith judgment of the applicable Loan Party) which are not Affiliates of the Guarantor, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar assets (as determined in the good faith judgment of the applicable Loan Party), except to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

3.23Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws.   Neither any Borrower, nor any other Loan Party or Controlled Affiliate, has, directly or indirectly, (i) engaged in business dealings with any party listed on, or any party owned or controlled by any party on the Specially Designated Nationals List or other similar lists maintained by OFAC, or in any related Executive Order issued by the President, (ii) conducted business dealings with a party, or in any country or territory, subject to sanctions administered by OFAC or (iii) derived income from business dealings with a party subject to sanctions administered by OFAC.

(b)Neither any Borrower nor any other Loan Party or Controlled Affiliate has derived or used any of its assets in violation of the anti-money laundering or anti-terrorism laws or

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regulations of the United States, including but not limited to the USA PATRIOT Act, the Money Laundering Control Act, the Bank Secrecy Act and any related Executive Order issued by the President.

(c)Neither any Borrower, nor any other Loan Party or Controlled Affiliate has failed to comply with applicable anti-bribery and anti-corruption laws and regulations (including the FCPA), including failing to comply in any manner that may result in the forfeiture of any Borrowing Base Asset or the proceeds of the Loans or a claim of forfeiture of any Borrowing Base Asset or the proceeds of the Loans.

Section 4CONDITIONS PRECEDENT

4.1Conditions to the Closing Date

. The effectiveness of the Revolving Credit Commitments of each Lender, and the agreement of each Lender to make the initial extension of credit requested to be made by it hereunder on or after the Closing Date, is subject to the satisfaction of the following conditions precedent:

(a)Loan Documents. The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, (i) this Agreement, executed and delivered by a duly authorized officer of each Borrower, the Guarantor and each Lender party hereto, (ii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of each Borrower and the Guarantor, (iii) the Pledge Agreement, executed and delivered by a duly authorized officer of each of the Intermediate Pledgors, (iv) the Collection Account Control Agreements, executed and delivered by the Depositary Bank and a duly authorized officer of each Borrower and (v) to the extent requested by any Lender, a Note duly completed and executed by each Borrower and payable to such Lender.

(b)Collection Account. Each Collection Account shall have been established at the Depositary Bank pursuant to documentation reasonably satisfactory to the Administrative Agent.

(c)Servicing Agreement Joinders. The Administrative Agent shall have received, in form and substance reasonably satisfactory to the Administrative Agent, the Servicing Agreement Joinders, executed and delivered by the applicable Servicer and a duly authorized officer of the applicable Borrower.

(d)Financial Condition Covenants. The Administrative Agent shall have received a Compliance Certificate containing all information and calculations reasonably necessary for determining pro forma compliance with Section 6.1 as of the last day of the fiscal quarter of the Guarantor ended June 30, 2017 after giving effect to the transactions contemplated hereby to occur on the Closing Date.

(e)Projections; Financial Statements. The Lenders shall have received (i) projections with respect to the Guarantor’s and its consolidated Subsidiaries’ financial performance in form and substance reasonably acceptable to the Administrative Agent and (ii) audited consolidated financial statements of the Guarantor and its consolidated Subsidiaries for the 2015 and 2016 fiscal years.

(f)Approvals. All governmental and third party approvals necessary in connection with the continuing operations of the Loan Parties and the transactions contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have

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expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the financing contemplated hereby.

(g)Fees. The Lenders, the Arranger and the Administrative Agent shall have received all fees required to be paid, including pursuant to the Fee Letters, and all actual out-of-pocket expenses for which invoices have been presented (including reasonable fees, actual out-of-pocket disbursements and other charges of outside counsel to the Administrative Agent), on or before the Closing Date.

(h)Solvency. The Administrative Agent shall have received a certificate (in form and substance reasonably satisfactory to the Administrative Agent) from the chief financial officer of the Guarantor certifying that the Guarantor and its Subsidiaries, considered as a whole, after giving effect to the transactions contemplated hereby to occur on the Closing Date, are Solvent.

(i)Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions in which Uniform Commercial Code financing statement or other filings or recordations should be made to evidence or perfect security interests in all assets of the Loan Parties, and such search shall reveal no Liens on any of the assets of the Loan Parties, except for Liens incurred in the normal course of the Loan Parties’ business which are reasonably acceptable to the Administrative Agent; provided, that such Liens on the Collateral are permitted under Section 6.3.

(j)Pledged Membership Interests; Stock Powers; Acknowledgment and Consent. The Administrative Agent shall have received (i) the certificates representing the shares of Capital Stock of each Borrower pledged pursuant to the Pledge Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the applicable Intermediate Pledgor, and (ii) an Acknowledgment and Consent, substantially in the form of Annex I to the Pledge Agreement, duly executed by each Borrower.

(k)Filings, Registrations and Recordings. Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.3), shall have been filed, registered or recorded or shall have been delivered to the Administrative Agent in proper form for filing, registration or recordation.

(l)Closing Certificate. The Administrative Agent shall have received a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments.

(m)Legal Opinion. The Administrative Agent shall have received an executed legal opinion of Nelson Mullins Riley & Scarborough LLP, special counsel to the Loan Parties addressed to the Administrative Agent and the Lenders and Hogan Lovells US LLP, Maryland counsel to the Loan Parties, in each case, in form and substance reasonably acceptable to the Administrative Agent. Such legal opinions shall cover such other matters incident to the transactions contemplated by this Agreement as the Administrative Agent may reasonably require and shall be addressed to the Administrative Agent and the Lenders.

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(n)USA PATRIOT Act. The Lenders shall have received, sufficiently in advance of the Closing Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the USA PATRIOT Act.

(o)Borrowing Base Assets. On or prior to the Closing Date, the Administrative Agent shall have received each of the documents required pursuant to Section 4.3 for each Borrowing Base Asset to be included in the Borrowing Base on the Closing Date.

(p)[Intentionally Omitted].    

(q)No Material Adverse Effect. No event or condition shall have occurred since the date of the Guarantor’s most recent audited financial statements delivered to the Administrative Agent which has had or could reasonably be expected to result in a Material Adverse Effect.

4.2Conditions to Each Extension of Credit

. The agreement of each Lender to make any extension of credit requested to be made by it hereunder on any date (including, without limitation, its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

(a)Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date; provided that, (x) to the extent that any such representation or warranty relates to a specific earlier date, they shall be true and correct in all material respects as of such earlier date and (y) to the extent that any such representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

(b)No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date or from the application of the proceeds therefrom.

(c)Borrowing Base Certificate. The Administrative Agent shall have received, and be satisfied in all respects with, a completed Borrowing Base Certificate, containing an accurate representation of the Borrowing Base as of such date, signed by a Principal Financial Officer.

Each borrowing by the Borrowers hereunder shall constitute a representation and warranty by each Borrower as of the date of such extension of credit that the conditions contained in this Section 4.2 have been satisfied.

4.3Conditions to the Addition of a Borrowing Base Asset.   Borrower Representative may request the addition of a Borrowing Base Asset (a “Proposed Borrowing Base Asset”) to the Borrowing Base by submitting a request in writing to the Administrative Agent, together with such business and legal materials, third party reports, information and documentation reasonably necessary for the Administrative Agent to determine that such Proposed Borrowing Base Asset will be in compliance with the Borrowing Base Conditions as of the proposed date of addition of such Proposed Borrowing Base Asset (such notice and other materials delivered therewith, a “Borrowing Base Addition Notice”).

(b)Within three Business Days of receipt of a Borrowing Base Addition Notice, the Administrative Agent shall notify Borrower Representative that the Administrative Agent has approved

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such Proposed Borrowing Base Asset (a “Borrowing Base Approval Notice”) or that the Administrative Agent has not approved such Proposed Borrowing Base Asset (a “Borrowing Base Disapproval Notice”) and specifying the Borrowing Base Conditions that are not met.

(c)If the Administrative Agent delivers a Borrowing Base Approval Notice or fails to deliver a Borrowing Base Disapproval Notice within three Business Days after receipt of a Borrowing Base Addition Notice (the failure to timely deliver a Borrowing Base Disapproval Notice being deemed to be a Borrowing Base Approval Notice), then, the Proposed Borrowing Base Asset shall become a Borrowing Base Asset upon the delivery of a certificate of a Responsible Officer of Borrower Representative, not later than ten (10) Business Days after the receipt of such Borrowing Base Approval Notice or deemed approval, certifying (i) the date such Proposed Borrowing Base Asset was originated by the applicable Borrower or an Affiliate, (ii) that the Proposed Borrowing Base Asset is an Eligible Asset satisfying each of the Borrowing Base Conditions on such date, (iii) that no Material Default or Event of Default shall have occurred and be continuing immediately prior to and after giving effect to the addition of such Proposed Borrowing Base Asset and (iv) the Guarantor is in compliance with the financial condition covenants set forth in Section 6.1 on a pro forma basis as of the last day of the most recently ended fiscal quarter for which Borrower Representative is required to have delivered a Compliance Certificate pursuant to Section 5.2(b) immediately after giving effect to the addition of such Proposed Borrowing Base Asset.

(d)Borrower Representative or the Guarantor shall have delivered to the Administrative Agent a report of any exceptions to the Borrowing Base Conditions or the representations and warranties in Annex B (an “Exception Report”).

(e)In the event that a Proposed Borrowing Base Asset is not an Eligible Asset satisfying each of the Borrowing Base Conditions, such Proposed Borrowing Base Asset may be included in the Borrowing Base upon the prior written consent of the Administrative Agent in its sole discretion.

(f)Upon the effectiveness of any new Borrowing Base Asset added to the Borrowing Base, Borrower Representative may deliver to the Administrative Agent an updated Borrowing Base Certificate giving pro forma effect to such new Borrowing Base Asset as of the date of the most recent Borrowing Base Certificate previously delivered pursuant to Sections 4.2(c), 4.3, 4.4 and 5.11.

4.4Conditions to the Release of a Borrowing Base Asset. The release of any Borrowing Base Asset at the written request of Borrower Representative delivered to the Administrative Agent shall be subject to the satisfaction of each of the following conditions:

(a)the Administrative Agent shall have received a certificate of a Responsible Officer of Borrower Representative certifying that, after giving effect to the release of such Borrowing Base Asset, (i) each of the remaining Borrowing Base Assets continue to be Eligible Assets satisfying each of the Borrowing Base Conditions, (ii) no Material Default or Event of Default shall have occurred and be continuing on such date immediately prior to or after giving effect to the release of such Borrowing Base Asset from the Borrowing Base (unless such Material Default or Event of Default is caused by, or arises directly in relation to, the Borrowing Base Asset being released, and would be cured by such release) and (iii) all representations and warranties in the Loan Documents are true and accurate in all material respects at the time of such release and immediately after giving effect to such release; provided that (x) to the extent that any such representation or warranty relates to a specific earlier date, they shall be true and correct in all material respects as of such earlier date and (y) any representation and warranty that is

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qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to qualifications therein) in all respects on such respective dates;

(b)the Administrative Agent shall have received a certificate of a Principal Financial Officer certifying that after giving pro forma effect to the release of such Borrowing Base Asset from the Borrowing Base, the Total Revolving Extensions of Credit shall not exceed the Maximum Facility Availability; and

(c)the Administrative Agent shall have received an updated Borrowing Base Certificate giving pro forma effect to the release of such Borrowing Base Asset from the Borrowing Base as of the date of the most recent Borrowing Base Certificate previously delivered pursuant to Sections 4.2(c), 4.3, 4.4 and 5.11.

Section 5AFFIRMATIVE COVENANTS

Each Borrower and the Guarantor hereby jointly and severally agree that, so long as the Revolving Credit Commitments remain in effect or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder (other than, after the repayment in full of the Obligations then owing and termination of this Agreement and the other Loan Documents, obligations under the Loan Documents (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of this Agreement or such other Loan Document, as the case may be, for which a claim has not yet been made), each Borrower and the Guarantor (in the case of the Guarantor, solely with respect to Sections 5.1, 5.2, 5.3, 5.4, 5.5(a), 5.6, 5.8, 5.11, 5.12, and 5.13) shall, and the Guarantor shall cause each Intermediate Pledgor (solely with respect to Sections 5.3, 5.4, 5.5(a), 5.6, 5.8, 5.12 and 5.13) to:

5.1Financial Statements. Furnish to the Administrative Agent on behalf of each Lender:

(a)as soon as available, but in any event within 90 days after the end of each fiscal year of the Guarantor, a copy of the audited consolidated balance sheet of the Guarantor and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and retained earnings and of cash flows for such year, setting forth in each case in comparative form the figures as of the end of such year and for the previous year, reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit (other than in respect of an upcoming maturity of Indebtedness occurring within one year from the delivery of such opinion or any potential inability to satisfy a financial condition covenant on a future date or in a future period), by Ernst & Young LLP or other independent certified public accountants of nationally recognized standing (it being agreed that the furnishing of the Guarantor’s annual report on Form 10-K for each such fiscal year as filed with the SEC within the time periods specified above, will satisfy the obligation under this Section 5.1(a) with respect to such fiscal year except with respect to the requirement that such financial statements be reported on without a “going concern” or like qualification or exception, or qualification arising out of the scope of the audit); and

(b)as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of the Guarantor, beginning with the quarter ending September 30, 2017, the unaudited consolidated balance sheet of the Guarantor and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and retained earnings and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the

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figures as of the end of such quarter and for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes) (it being agreed that the furnishing of Guarantor’s quarterly report on Form 10-Q for each such fiscal quarter, as filed with the SEC within the time periods specified above, will satisfy the obligations under this Section 5.1(b) with respect to such fiscal quarter);

all such financial statements to be complete and correct in all material respects and to be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein).

5.2Certificates; Other Information. Furnish to the Administrative Agent on behalf of each Lender, or, in the case of clause (d), to the relevant Lender:

(a)concurrently with the delivery of the financial statements referred to in Section 5.1(a), a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no Default or Event of Default has occurred and is continuing, except as specified in such certificate (it being understood that such certificate shall be limited to the items that independent certified public accountants are permitted to cover in such certificates pursuant to their professional standards and customs of the profession);

(b)concurrently with the delivery of any financial statements pursuant to Section 5.1, (i) a certificate of a Responsible Officer stating that, to the best of such Responsible Officer’s knowledge, each Loan Party during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and that no Default or Event of Default has occurred and is continuing except as specified in such certificate and (ii) a Compliance Certificate containing all information and calculations necessary for determining compliance with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of the Guarantor, as the case may be;

(c)(i) within five Business Days after the same are sent, copies, including copies sent electronically, of all financial statements and reports that the Guarantor sends to the holders of any class of its debt securities or public equity securities and, within five Business Days after the same are filed, copies of all financial statements and reports that the Guarantor may make to, or file with, the SEC; and (ii) within five Business Days after the receipt thereof, copies of all written correspondence received from the SEC concerning any material investigation or inquiry regarding financial or other operational results of any Loan Party; provided, however, that public filing of any of the foregoing in this Section 5.2(c) shall constitute delivery to the Administrative Agent and each Lender of the same upon such filing; and

(d)promptly, such additional information regarding the business, legal, financial or corporate affairs of any Loan Party, or compliance with the terms of the Loan Documents, as the Administrative Agent may from time to time on its own behalf or on behalf of any Lender reasonably request.

5.3Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent subject to applicable notice and cure periods, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being

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contested in good faith by appropriate proceedings and reserves in accordance with GAAP with respect thereto have been provided on the books of the relevant Loan Party.

5.4Conduct of Business and Maintenance of Existence

. (a)(i)  Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 6.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law, including Environmental Laws, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.04.

5.5Maintenance of Property; Insurance.   Keep and maintain its property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and in compliance with all material applicable standards, rules or regulations imposed by any Governmental Authority or by any insurance policy held by the Loan Parties.

(b)Maintain with insurance companies which the applicable Borrower believes (in its good faith judgment) are financially sound and reputable, insurance in such amounts and against such risks as is customarily maintained by companies of established repute engaged in the same or similar businesses (as determined in the good faith judgment of such Borrower).

5.6Inspection of Property; Books and Records; Discussions.  (a)  Keep proper books of records and account in which entries are full, true and correct in all material respects and in accordance with GAAP and in all material respects with all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Loan Parties with officers and employees of the Loan Parties and with its independent certified public accountants.

5.7Notices. Promptly (unless otherwise specified below) give notice to the Administrative Agent, on behalf of each Lender, of:

(a)the occurrence of any Default or Event of Default (and in the case of a Default or Event of Default caused by, or arising directly in relation to, Borrowing Base Assets only, of which any Borrower has Knowledge);

(b)any (i) default or event of default under any Contractual Obligation of any Loan Party of which such Loan Party Knows, should have Known or has otherwise received written notice thereof or (ii) litigation, investigation of which such Loan Party has Knowledge or proceeding which may exist at any time between any Loan Party and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, would reasonably be expected to have a Material Adverse Effect;

(c)any pending or threatened (in writing to any Loan Party), litigation or proceeding affecting any Loan Party (i) in which the aggregate actual or estimated liability of the Loan Parties is (x) with respect to the Guarantor or any Intermediate Pledgor, $25,000,000 or more, and (y) with respect to any Borrower, $1,000,000 or more, and in each case not covered by insurance

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or for which adequate reserves have not been established in accordance with GAAP, (ii) in which injunctive or similar relief is sought that, if adversely determined, would reasonably be expected to have a Material Adverse Effect or (iii) which relates to any Loan Document;

(d)the following events, as soon as possible and in any event within 30 days after the Guarantor knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Guarantor or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;

(e)promptly after the Loan Parties first obtain Knowledge thereof, any Environmental Claim or other development, event, or condition that, individually or in the aggregate with other developments, events or conditions, would reasonably be expected to result in the payment by the Loan Parties, in the aggregate, of a Material Environmental Amount, including a full description of the nature and extent of the matter for which notice is given and all relevant circumstances, other than Environmental Claims covered by environmental indemnities or otherwise covered by insurance or for which adequate reserves have been established in accordance with GAAP;

(f)as soon as possible and in any event within five (5) Business Days of any Loan Party obtaining Knowledge thereof, any development or event that in Borrower Representative’s sole but commercially reasonable judgment, has had or would reasonably be expected to have a Material Adverse Effect;

(g)with respect to any Borrowing Base Asset:

(i)promptly following receipt of written notice or Knowledge that the Real Property underlying such Borrowing Base Asset comprised of real property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to materially and adversely affect the value of such Real Property;

(ii)promptly upon Knowledge that any Borrowing Base Asset is not an Eligible Asset or that any of the representations and warranties set forth in Annex B with respect to any Borrowing Base Asset is untrue or incorrect in any material respect;

(iii)promptly upon Knowledge of (1) any Borrowing Base Asset that becomes a Defaulted Asset, (2) any Lien or security interest (other than security interests created hereby) on, or claim asserted against, any Borrowing Base Asset, or the underlying collateral therefor, other than Liens permitted under Section 6.3 and immaterial Liens permitted under the relevant Borrowing Base Documents, and, or (3) any event that is reasonably likely to materially and adversely affect the market value of a Borrowing Base Asset or the underlying Real Property;

(iv)promptly, and in any event within ten days after service of process on any Loan Party of any of the following, notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or

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threatened) or other legal or arbitrable proceedings before any Governmental Authority affecting (x) any Loan Party or (y) any of the Borrowing Base Assets that (1) questions or challenges the validity or enforceability of any of the Borrowing Base Asset Documents or any action to be taken in connection with the transactions contemplated thereby, or (2) makes a claim or claims in an aggregate amount greater than (A) in the case of clause (x) above with respect to the Guarantor or any Intermediate Pledgor, $25,000,000, and with respect to any Borrower, $1,000,000 and (B) in the case of clause (y) above $1,000,000;

(v)promptly upon any transfer of the Real Property underlying any Borrowing Base Asset or any direct or indirect equity interest in any Underlying Obligor, in violation of a due on sale clause contained in the relevant Borrowing Base Asset Documents;

(vi)promptly after the effectiveness of any written consent, amendment, supplement, waiver, release or other modification for any Borrowing Base Asset, a true correct and complete copy of such consent, amendment, supplement, waiver, release or other modification;

(vii)promptly and in any event within two Business Days of Borrower Representative’s written notice of or any Borrower’s Knowledge of, (A) notice of any material event or any material change in circumstances that an institutional asset manager would reasonably expect to result in a material adverse effect on any Borrower or any Underlying Obligor in respect of a Borrowing Base Asset, (B) copies of any written notice of any monetary or material non-monetary default or event of default under any Borrowing Base Asset delivered by or to Borrower Representative and (C) copies of any written notice of any allegation made by any Underlying Obligor in writing that any Borrower has defaulted with respect to its obligations under any Borrowing Base Asset; and

(viii)promptly and in any event within two Business Days of Borrower Representative’s written notice of or any Borrower’s Knowledge of, to the extent that there exists a mezzanine loan related to a Borrowing Base Asset, which mezzanine loan is not also a Borrowing Base Asset, (A) notice of any material event that an institutional asset manager would reasonably expect to result in a material adverse effect in respect of such mezzanine loan or the applicable mezzanine loan borrower, (B) notice of any default or event of default under any related mezzanine loan documentation, and (C) notice of any default or event of default under any intercreditor documentation relating to such mezzanine loan and the applicable Borrowing Base Asset;

(h)the failure of the Guarantor to maintain REIT Status; and

(i)promptly after the effectiveness of any amendment or other modification of the organizational documents of any Loan Party, a true correct and complete copy of such amendment or other modification.

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Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the relevant Loan Party proposes to take with respect thereto.

5.8Further Assurances

. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take such actions, as the Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents. Upon the exercise by the Administrative Agent or any Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording, qualification or authorization of any Governmental Authority, the Borrowers and the Guarantor will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Administrative Agent or such Lender may reasonably be required to obtain from any Loan Party for such governmental consent, approval, recording, qualification or authorization.

5.9Servicing of Borrowing Base Assets.   Each Borrower shall cause each Borrowing Base Asset to be serviced by the applicable Servicer pursuant to the applicable Servicing Agreement in accordance with servicing practices consistent with practices maintained by other prudent mortgage or mezzanine lenders with respect to mortgage or mezzanine loans of the same type as the Borrowing Base Assets. Notwithstanding the foregoing, neither any Borrowers nor any Servicer shall take any action with respect to any Borrowing Base Asset except as otherwise permitted by Section 6.17.

(b)Any failure by any Servicer to deposit Collections to any Collection Account as set forth in the applicable Servicing Agreement shall be remedied promptly, and in any event within five Business Days after such Collections should have been deposited in accordance with such Servicing Agreement.

(c)The payment of servicing fees and other costs of servicing shall be at the sole expense of the Borrowers and, if any Servicer is an Affiliate of any Borrower, the payment by the Borrowers of such fees and costs shall be subordinated to the payment of the Obligations.

(d)Borrower Representative shall notify the Administrative Agent promptly, and in any event within five Business Days, after any amendment to any Servicing Agreement which does not require the consent of the Required Lenders pursuant to Section 6.17.

5.10Cash Management.   Each Collection Account shall be established at the Deposit Bank on the Closing Date. Each Borrower shall, or shall cause the applicable Servicer to, deposit all Collections in respect of the Borrowing Base Assets directly into the relevant Collection Account (x) in the case of Wells Fargo Bank, National Association, no later than the Business Day following receipt thereof; provided that, if such Borrower or the applicable Servicer receives Collections after 3:00 P.M. (New York City time) on any Business Day, such Collections shall be deposited into such Borrower’s Collection Account no later than the second Business Day following receipt thereof and (y) in the case of Situs Asset Management LLC, no later than the second Business Day following receipt thereof; provided that, if such Borrower or the applicable Servicer receives Collections after 2:00 P.M. (New York City time) on any Business Day, such Collections shall be deposited into such Borrower’s Collection Account no later than the third Business Day following receipt thereof. Until deposited into such Borrower’s Collection Account, any Collections held by such Borrower or the applicable Servicer shall be deemed to be Collateral and shall be held in trust by them for the benefit of the Administrative Agent on behalf of the Secured Parties and shall not be commingled with any other funds or property of any Borrower, the

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Guarantor or any Servicer. Each Collection Account shall be under the sole dominion and control of the Administrative Agent.

(b)Any time no Material Default or Event of Default has occurred and is continuing, funds on deposit in any Collection Account shall be swept on a daily basis to the relevant Borrower Account.

(c)If at any time, a Material Default or Event of Default shall have occurred and be continuing, funds on deposit in each Collection Account shall be applied by the Administrative Agent from time to time to the prepayment and repayment of the Obligations in the amounts and order of priority in its sole discretion.

5.11Borrowing Base Reports.   Beginning with the month ended September 30, 2017, deliver to the Administrative Agent (and the Administrative Agent shall thereafter deliver to each Lender), as soon as available and in any event no later than five Business Days after the end of each month, a completed Borrowing Base Certificate calculating and certifying the Borrowing Base as of the end of such month, signed on behalf of the Guarantor by a Principal Financial Officer.

(b)Furnish to the Administrative Agent (and the Administrative Agent shall thereafter deliver to each Lender) as soon as practicable and in any event within five Business Days after any Disposition of any Borrowing Base Asset, an updated Borrowing Base Certificate calculating (on a pro forma basis, after giving effect to such Disposition) and certifying such pro forma Borrowing Base as of the end of the most recent month for which a Borrowing Base Certificate was delivered pursuant to Section 4.2(c), 4.3 or 4.4 or this Section 5.11, as applicable. The Borrowing Base set forth in each Borrowing Base Certificate delivered with respect to each month occurring after the fiscal quarter covered by the updated Borrowing Base Certificate described in the preceding sentence and ending prior to any such Disposition shall be calculated on a pro forma basis, after giving effect to such Disposition.

5.12Taxes. Timely file or cause to be filed all Federal, state and other tax returns that are required to be filed and shall timely pay all taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority (other than any taxes the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Guarantor or the applicable Subsidiary).

5.13Disclosable Events. If any Borrower or the Guarantor obtains Knowledge or receives any written notice that any Loan Party or Controlled Affiliate is in violation of Section 6.22(a), 6.22(b) or (c), including any such violation that could result in the forfeiture of the proceeds of the Loans or a claim of forfeiture of the proceeds of the Loans (any such violation, a “Disclosable Event”), such Borrower or the Guarantor shall promptly (i) give written notice to the Administrative Agent of such Disclosable Event and (ii) comply with all applicable laws with respect to such Disclosable Event. Each Borrower or the Guarantor hereby authorizes and consents to the Administrative Agent and each Lender taking any and all steps the Administrative Agent or such Lender deems necessary, in its sole but reasonable discretion, to avoid a violation of all applicable laws with respect to any such Disclosable Event.

5.14Appraisals. The Administrative Agent shall have the right to commission an Appraisal for the underlying Real Property securing any Borrowing Base Asset which was originated by a Borrower or an Affiliate thereof more than 150 days prior to the applicable date of determination of the

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Loan to Value Ratio, at the Borrowers’ expense. Any Appraisal received by the Administrative Agent pursuant to this Section 5.14 shall be used to determine the Loan to Value Ratio of the applicable asset.

5.15Additional Collateral. With respect to any Property acquired after the Closing Date by any Borrower (other than any Excluded Asset (as defined in the Guarantee and Collateral Agreement)) as to which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected Lien, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent deems reasonably necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such Property and (ii) subject to Section 5.12 of the Guarantee and Collateral Agreement, take all actions reasonably necessary to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest in such Property, including without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent.

Section 6NEGATIVE COVENANTS

Each Borrower and the Guarantor hereby jointly and severally agree that, so long as the Revolving Credit Commitments remain in effect or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder (other than obligations under the Loan Documents (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of this Agreement or such other Loan Document, as the case may be), such Borrower and the Guarantor (in the case of the Guarantor, solely with respect to Sections 6.1, 6.4, 6.8, 6.9, 6.11, 6.12, 6.14, 6.18 and 6.22) shall not, and the Guarantor shall cause any Intermediate Pledgor (solely with respect to Sections 6.3, 6.4, 6.5, 6.6, 6.8, 6.9, 6.12, 6.13, 6.14 and 6.22) not to, directly or indirectly:

6.1Financial Condition Covenants.

(a)Minimum Fixed Charge Coverage Ratio. Permit the ratio of (i) the Guarantor’s EBITDA for any period of four consecutive fiscal quarters of the Guarantor to (ii) the Guarantor’s Fixed Charges during such period to be less than 1.75 to 1.00 as determined as soon as practicable after the end of each fiscal quarter, but in no event later than 45 days after the last day of the applicable fiscal quarter.

(b)Minimum Tangible Net Worth. Permit the Guarantor’s Tangible Net Worth as of the last day of any fiscal quarter of the Guarantor to fall below the sum of (i) $450,000,000 plus (ii) 75% of the net cash proceeds of any equity issuance or sale of Capital Stock by the Guarantor that occurs after the Closing Date.

(c)Minimum Cash Liquidity. Permit the Guarantor’s Cash Liquidity as of the last day of any fiscal quarter of the Guarantor to be less than the greater of (i) $10,000,000 and (ii) 5% of the Guarantor’s Recourse Indebtedness.

(d)Maximum Debt to Equity. Permit the ratio of (i) the Guarantor’s Total Indebtedness as of the last day of any fiscal quarter of the Guarantor to (ii) the Guarantor’s Shareholder’s Equity as of such date to be greater than 3.00 to 1.00 as determined as soon as practicable after the end of each fiscal quarter, but in no event later than 45 days after the last day of the applicable fiscal quarter.

6.2Indebtedness. In the case of the Borrower only, create, incur, assume or suffer to exist any Indebtedness, except Indebtedness under the Loan Documents.

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1.3Limitation on Liens

. Create, incur, assume or suffer to exist any Lien upon any of the Collateral, any Borrowing Base Asset or any Proposed Borrowing Base Asset, whether now owned or hereafter acquired, except for Liens in favor of the Administrative Agent and the Lenders under the Loan Documents to secure the Obligations and Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings for which adequate reserves with respect thereto are maintained on the books of the Borrowers, the Guarantor or the Intermediate Pledgors, as the case may be, in conformity with GAAP.

6.4Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that the Borrowers may Dispose of any or all of the Borrowing Base Assets, subject to satisfaction of the conditions precedent set forth in Section 4.4 and Guarantor may enter into any merger, consolidation or amalgamation in connection with one or more transactions which do not constitute a Change of Control; provided that (i) the Guarantor shall be the continuing or surviving Person or (ii) simultaneously with such transaction, the continuing or surviving Person shall become a Guarantor and the Borrowers shall comply with Section 5.8 in connection therewith.

6.5Dispositions. Make any Disposition of any Collateral, except for Dispositions of any Borrowing Base Asset in accordance with Section 4.4.

6.6Restricted Payments. In the case of the Borrowers or the Intermediate Pledgors only, make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except for:

(a)each Borrower may make (and incur any obligation (contingent or otherwise) to declare and/or pay) Restricted Payments to the applicable Intermediate Pledgor, each Intermediate Pledgor may make (and incur any obligation (contingent or otherwise) to declare and/or pay) Restricted Payments to the Operating Partnership, and the Operating Partnership may make (and incur any obligation (contingent or otherwise) to declare and/or pay) Restricted Payments to the Guarantor (including, without limitation, Restricted Payments in such amounts necessary to avoid, to the extent possible, the imposition of income tax under Section 857(b) of the Code and the imposition of excise tax under Section 4981 of the Code), provided that, any such Restricted Payment may only be made if (i) at the time of such Restricted Payment, no Default or Event of Default shall have occurred and be continuing and (ii) after giving effect to such Restricted Payment, the Loan Parties shall be in compliance with the financial condition covenants set forth in Section 6.1 on a pro forma basis as of the last day of the most recently ended fiscal quarter for which the Borrowers are required to have delivered a Compliance Certificate pursuant to Section 5.02(b); and

(b)each Borrower may make (and incur any obligation (contingent or otherwise) to declare and/or pay) Restricted Payments to the applicable Intermediate Pledgor, each Intermediate Pledgor, may make (and incur any obligation (contingent or otherwise) to declare and/or pay) Restricted Payments to the Operating Partnership, and the Operating Partnership may make (and incur any obligation (contingent or otherwise) to declare and/or pay) Restricted Payments to the Guarantor, in such amounts necessary to ensure that the Guarantor maintains REIT Status (it being understood and agreed that the Guarantor and the Intermediate Pledgors shall not be required to issue any new equity in order to ensure the same prior to making such Restricted Payments), provided that, such Restricted Payment may only be made if (i) at the time of such Restricted Payment, no Event of Default shall have occurred and be continuing and (ii) after giving effect to such Restricted Payment, the Loan Parties shall be in compliance with the financial condition covenants set forth in Section 6.1 on a pro forma basis.

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6.7Investments. In the case of the Borrowers only, make any Investments, except Investments in Eligible Assets.

6.8Limitation on Modifications of Organizational Documents. Amend its organizational documents in any manner determined by the Administrative Agent in its good faith, commercially reasonable judgment to be materially adverse to the Lenders, which amendment, in the case of the Guarantor only, is not corrected in a manner reasonably satisfactory to the Administrative Agent on or prior to the date that is 30 days after receipt of notice thereof from the Administrative Agent; provided that the Borrowers may not request any Loans until the Guarantor has so corrected such amendment to its organizational documents.

6.9Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Guarantor, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrowers or the Guarantor as would be obtainable by the Borrowers or the Guarantor at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, provided that the foregoing restriction shall not apply to (i) transaction between or among the Loan Parties not prohibited hereunder and (ii) Investments and Restricted Payments not prohibited hereunder.

6.10[Intentionally Omitted].

6.11Limitation on Changes in Fiscal Periods. Permit the fiscal year of any Borrower or the Guarantor to end on a day other than December 31 or change any Borrower’s or the Guarantor’s method of determining fiscal quarters in each case without providing prior written notice thereof to the Administrative Agent.

6.12Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Intermediate Pledgor or any Borrower to create, incur, assume or suffer to exist any Lien upon any of the Collateral, any Borrowing Base Asset or any Proposed Borrowing Base Asset, whether now owned or hereafter acquired, to secure the Obligations or, in the case of a Borrower and the Guarantor, their respective obligations under the Guarantee and Collateral Agreement, other than this Agreement and the other Loan Documents.

6.13Limitation on Restrictions on Subsidiary Distributions. Solely with respect to or relating to the assets or the proceeds of assets owned by any Borrower, enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of the applicable Intermediate Pledgor or such Borrower to (a) make dividends in respect of any Capital Stock held by, or pay any Indebtedness owed to, the Guarantor or any other Loan Party, (b) make investments in the Guarantor or any other Loan Party or (c) transfer any of its assets to the Guarantor or any other Loan Party, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents, (ii) restrictions imposed by applicable law, (iii) any restrictions imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or any of the Borrowing Base Assets permitted by Section 6.5, and (iv) any restrictions existing under an agreement that amends, refinances or replaces any agreement containing restrictions permitted under the preceding clauses (i), (ii) or (iii); provided that the terms and conditions of any such agreement, as they relate to any such restrictions are no less favorable to such Borrower than those under the agreement so amended, refinanced or replaced, taken as a whole.

6.14Limitation on Lines of Business. Enter into any business, either directly or through any Subsidiary, except for those businesses which may lawfully be conducted while maintaining REIT Status.

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6.15[Intentionally Omitted].

6.16Limitation on Modifications to Borrowing Base Assets. Take any action constituting a consent, amendment, supplement, waiver, release or other modification of any material term of any Borrowing Base Asset, except pursuant to a Permitted Modification.

6.17Servicing of Borrowing Base Assets.   Make any change, or permit any Servicer to make any change, in its instructions to the Underlying Obligors regarding payments to be made with respect to the Borrowing Base Assets to any Collection Account, without the prior written consent of the Required Lenders;

(b)(i) amend or modify Section 4 of any Servicing Agreement Joinder or (ii) otherwise modify any Servicing Agreement in a manner adverse to the Lenders without the consent of the Required Lenders; or

(c)deposit or otherwise credit, or use commercially reasonable efforts to cause to be so deposited or credited, to each Collection Account cash or cash proceeds other than Collections in respect of the Borrowing Base Assets, Proposed Borrowing Base Assets then owned by a Borrower, assets which formerly constituted a part of the Borrowing Base which are still owned by a Borrower or assets otherwise originated by a Borrower for the purpose of adding such assets to the Borrowing Base (whether or not added to the Borrowing Base).

6.18REIT Status. Permit the Guarantor to fail to meet the requirements for REIT Status.

6.19[Intentionally Omitted].

6.20Special Purpose Entity. Permit any Borrower (i) to fail to comply with the requirements set forth in the definition of “Special Purpose Entity” in any material respect (but in no event, in any manner which is reasonably likely to result in the substantive consolidation of such Borrower with any other Person), (ii) to directly or indirectly make any change, amendment or modification to any of the “Special Purpose Provisions” as defined in and set forth in its organizational documents without the prior written consent of the Required Lenders, or (iii) otherwise take any action which would reasonably be expected to result in any Borrower not being a Special Purpose Entity.

6.21[Intentionally Omitted].

6.22Disclosable Events.  (i) Engage, directly or indirectly, in business dealings with any party listed on, or any party owned or controlled by any party listed on, the Specially Designated Nationals List or other similar lists maintained by OFAC, or in any related Executive Order issued by the President; (ii) conduct business dealings with a party, or in any country or territory, subject to sanctions administered by OFAC; (iii) derive or use income from business dealings with a party subject to sanctions administered by OFAC; or (iv) use the proceeds of the Loans to conduct any business dealings or transaction with any party, or in any country or territory, subject to sanctions administered by OFAC.

(b)Derive or use any of its assets in violation of the anti-money laundering or anti-terrorism laws or regulations of the United States, including but not limited to the USA PATRIOT Act, the Money Laundering Control Act, the Bank Secrecy Act and any related Executive Order of the President.

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(c)Fail to comply with applicable anti-bribery and anti-corruption laws and regulations (including the FCPA), including any failure to so comply that may result in the forfeiture of the proceeds of the Loans or a claim of forfeiture of the proceeds of the Loans.

(d)Fail to provide the Administrative Agent and the Lenders with any information regarding any Loan Party or any Controlled Affiliate necessary for the Administrative Agent or any of the Lenders to comply with (i) the anti-money laundering laws and regulations, including but not limited to the USA PATRIOT Act, The Money Laundering Control Act, the Bank Secrecy Act and any related Executive Order issued by the President, (ii) all applicable economic sanctions laws and regulations administered by OFAC, and (iii) all applicable anti-corruption and anti-bribery laws and regulations, including the FCPA, in each case which the Administrative Agent and the Lenders have requested be provided.

Section 7EVENTS OF DEFAULT

7.1Events of Default

. If any of the following events shall occur and be continuing:

(a)(i) the Borrowers shall fail to pay any principal of any Loan when due in accordance with the terms hereof; or (ii) the Borrowers shall fail to pay (A) any interest on any Loan within three Business Days after any such interest becomes due in accordance with the terms hereof, or (B) any other amount payable hereunder or under any other Loan Document, within three Business Days after notice thereof to the Borrower Representative from the Administrative Agent or any Borrower first obtaining Knowledge; or

(b)any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document (other than the representations and warranties set forth in the first sentence of Section 3.19, Annex B or in an Exception Report delivered to the Administrative Agent in accordance with this Agreement), in any Borrowing Base Certificate, or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished, and such breach is not remedied within ten Business Days after the earliest to occur of notice thereof to Borrower Representative from the Administrative Agent or any Borrower first obtaining Knowledge thereof; or

(c)(i)  any Loan Party shall default in the observance or performance of any agreement contained in Section 5.4(a) (with respect to the Loan Parties only), Section 5.7(a), Section 5.9, Section 5.10, Section 5.11 or Section 6 (other than Section 6.8 with respect to the Guarantor only), and such default shall continue unremedied for a period of five Business Days after the earliest to occur of notice thereof to Borrower Representative from the Administrative Agent or any Borrower first obtaining Knowledge thereof, or (ii) the Guarantor shall default in the observance or performance of Section 6.8; or

(d)any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after the earliest to occur of the Administrative Agent notifying Borrower Representative of a failure to observe or perform such agreement or any Borrower first obtaining Knowledge thereof; or

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(e)any Loan Party shall (i) default in making any payment of any principal of any Indebtedness (including, without limitation, any Guarantee Obligation, but excluding the Loans) or any Hedge Recourse Indebtedness on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness or any Hedge Recourse Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness or Hedge Recourse Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or Hedge Recourse Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness or Hedge Recourse Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required and subject to any cure or grace periods, such Indebtedness or Hedge Recourse Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided that, a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness or Hedge Recourse Indebtedness having an aggregate outstanding principal amount (including amounts owing to all creditors under any combined or syndicated credit arrangement) of which exceeds in the aggregate, (x) with respect to the Guarantor or any Intermediate Pledgor, $25,000,000, and (y) with respect to any Borrower, $1,000,000; provided, further, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default if the applicable Loan Party cures such default, event or condition, as the case may be, within the grace period, if any, provided under the applicable instrument or agreement; or

(f)an Act of Insolvency shall have occurred with respect to any Loan Party; or

(g)(i) any Person shall engage in any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Borrower or the Guarantor, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, or (v) any Borrower or the Guarantor shall, or shall be reasonably likely, to incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan; and in each case in clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, could, reasonably be expected to have a Material Adverse Effect; or

(h)one or more judgments or decrees shall be entered against any Loan Party involving for the Loan Parties taken as a whole a liability (not paid or fully covered by insurance or for which adequate reserves have not been established in accordance with GAAP) of (x) with respect to the Guarantor or any Intermediate Pledgor, $25,000,000 or more, and (y) with respect to any Borrower, $1,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 90 days from the entry thereof; or

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(i)any of the Security Documents shall cease, for any reason, to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby; or

(j)the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason, to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

(k)any Change of Control shall occur;

then, and in any such event for so long as such event is continuing, (A) if such event is an Event of Default specified in paragraph (f) above with respect to any Borrower, the Revolving Credit Commitments shall immediately and automatically terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately and automatically become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to Borrower Representative declare the Revolving Credit Commitments to be terminated forthwith, whereupon the Revolving Credit Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to Borrower Representative, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable.

Notwithstanding anything to the contrary in the foregoing, in no event shall the Guarantor be deemed to be in default or to have failed to perform its obligations under this Agreement or the other Loan Documents as a result of the occurrence of any Default or Event of Default caused by any other Loan Party, provided that, the Administrative Agent and the Secured Parties shall be entitled to exercise all rights and remedies against the Guarantor under Section 2 of the Guarantee and Collateral Agreement in respect of such Default or Event of Default in accordance with the Loan Documents.

Section 8THE ADMINISTRATIVE AGENT

8.1Appointment. Each Lender hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall have no duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.

8.2Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative

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Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

8.3Exculpatory Provisions. (a) Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

(b) The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Institutions. Without limiting the generality of the foregoing, the Administrative Agent shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Institution.

8.4Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Loan Parties), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless such Note shall have been transferred in accordance with Section 9.6 and all actions required by such Section in connection with such transfer shall have been taken. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders, Required Lenders or any other instructing group of Lenders specified by this Agreement) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders, Required Lenders or any other instructing group of Lenders specified by this Agreement), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

8.5Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent shall have received notice from a Lender or Borrower Representative referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent shall receive such a notice, the Administrative Agent

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shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders, Required Lenders or any other instructing group of Lenders specified by this Agreement); provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

8.6Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither any of the Administrative Agent nor any of its Related Parties have made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of a Loan Party or any Affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of an investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their Affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of a Loan Party that may come into the possession of the Administrative Agent or any of its Related Parties.

8.7Indemnification. The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably according to their respective Revolving Credit Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Revolving Credit Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Revolving Credit Percentages immediately prior to such date), for, and to save the Administrative Agent harmless from and against, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of, the Revolving Credit Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder.

8.8Administrative Agent in Its Individual Capacity. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with

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any Loan Party as though the Administrative Agent were not the Administrative Agent. With respect to its Loans made or renewed by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall include the Administrative Agent in its individual capacity.

8.9Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon ten days’ notice to the Lenders and Borrower Representative. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders or another Person that is an Eligible Assignee a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 7.1(a) or 7.1(f) with respect to any Borrower shall have occurred and be continuing) be subject to approval by Borrower Representative (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans; provided that, in no event shall any such successor Administrative Agent be a Defaulting Lender or a Disqualified Institution. A resigning Administrative Agent’s resignation shall become effective (x) in the case an Event of Default has occurred and is continuing regardless of whether a successor agent has accepted appointment as Administrative Agent by the date that is ten days following a retiring Administrative Agent’s notice of resignation, upon the expiration of such ten day period, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above, and (y) in all other cases, only at such time as the Required Lenders appoint a successor agent as provided for above. After the Administrative Agent’s resignation as Administrative Agent, the Administrative Agent shall remain indemnified to the extent provided in this Agreement and the other Loan Documents and the provisions of this Section 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

8.10Authorization to Release Liens and Guarantees. The Administrative Agent is hereby irrevocably authorized by each of the Lenders to effect any release of guarantee obligations contemplated by Section 9.15 of this Agreement or Section 2 of the Guarantee and Collateral Agreement.

8.11The Arranger. The Arranger, in its capacity as such, shall have no duties or responsibilities, nor shall the Arranger incur any liability, under this Agreement and the other Loan Documents.

8.12No Duty to Disclose. The Administrative Agent, the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers, the other Loan Parties and their respective Affiliates, and none of the Administrative Agent nor the Arranger has any obligation to disclose any of such interests to any Borrower, any other Loan Party or any of their respective Affiliates.

8.13Waiver. To the fullest extent permitted by law, each of the Borrowers and the other Loan Parties hereby waives and releases any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

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Section 9MISCELLANEOUS

9.1Amendments and Waivers

. Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be amended, restated, supplemented or modified except in accordance with the provisions of this Section 9.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or (with the written consent of the Required Lenders) the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents (including amendments and restatements hereof or thereof) for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as may be specified in the instrument of waiver, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall:

(i)forgive the principal amount or extend the final scheduled date of maturity of any Loan, reduce the stated rate of any interest or fee payable under this Agreement (except (x) in connection with the waiver of applicability of any post-default increase in interest rates (which waiver shall be effective with the consent of the Required Lenders), (y) that any amendment or modification of defined terms used in the financial condition covenants in this Agreement and (z) that a waiver of any Default, Event of Default or mandatory reduction of the Revolving Credit Commitments shall not constitute a forgiveness in principal (which amendment or modification shall be effective with the consent of the Required Lenders) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Revolving Credit Commitment of any Lender, in each case without the consent of each Lender directly affected thereby, except that a waiver of any Default, Event of Default or mandatory reduction of the Revolving Credit Commitments shall not constitute an extension of any scheduled date of payment or increase in the amount or extend the expiration of the Revolving Credit Commitments;

(ii)amend, modify or waive any provision of this Section, reduce any percentage specified in the definition of “Required Lenders”, increase any percentage specified in the definition of “Borrowing Base”, consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement and the other Loan Documents or release the Guarantor or the Borrowers from their respective obligations under the Guarantee and Collateral Agreement, in each case without the consent of all of the Lenders;

(iii)amend, modify or waive any provision of Section 8, or any other provision affecting the rights, duties or obligations of the Administrative Agent, without the consent of the Administrative Agent;

(iv)amend, modify or waive any provision of Section 2.14 without the consent of each Lender directly affected thereby; or

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(v)impose restrictions on assignments and participations that are more restrictive than, or additional to, those set forth in Section 9.6 without the consent of each Lender directly affected thereby.

Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or modification shall be effected by a written instrument signed by the parties required to sign pursuant to the foregoing provisions of this Section; provided that delivery of an executed signature page of any such instrument by facsimile transmission or electronic communication shall be effective as delivery of a manually executed counterpart thereof.

9.2Notices.   All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy or electronic mail), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice or electronic mail, when received, addressed (i) in the case of Borrower Representative and the Administrative Agent, as follows, (ii) in the case of the Lenders, as set forth in an Administrative Questionnaire delivered to the Administrative Agent or, in the case of a Lender which becomes a party to this Agreement pursuant to an Assignment and Assumption, in such Assignment and Assumption or (iii) in the case of any party, to such other address as such party may hereafter notify to the other parties hereto:

Borrower Representative:    BSPRT BB Loan, LLC,

    c/o Benefit Street Partners Realty Trust, Inc.
1345 Avenue of the Americas, Suite 32A, New York, New York 10105
Attention: Micah Goodman, Esq.
Telephone: (212) 588-6982
Email: m.goodman@benefitstreetpartners.com

and to:    Nelson Mullins Riley & Scarborough, LLP
201 17th Street, Suite 1700
Atlanta, Georgia 30363
Attention: Rusty A. Fleming, Esq.
Email: rusty.fleming@nelsonmullins.com
Phone: 404-322-6466
Telecopy: 404-322-6050

Administrative Agent:    Barclays Bank PLC
745 Seventh Avenue
New York, NY 10019
Attention: Nicholas J. Guzzardo
Telephone: (212) 320-6759

Email: Nicholas.Guzzardo@barclays.com

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provided that, any notice, request or demand to or upon the Administrative Agent or any Lender shall not be effective until received.

(b)Without limiting Section 9.2(a), notices and other communications to the Administrative Agent, the Borrowers or the Lenders hereunder may be delivered or furnished by any other electronic communications pursuant to procedures mutually approved by the Administrative Agent and Borrower Representative.

9.3No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

9.4Survival of Representations and Warranties. All representations and warranties made herein, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

9.5Payment of Expenses. The Borrowers jointly and severally agree (a) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses actually incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements and other charges of outside counsel to the Administrative Agent and the charges of the Platform, (b) to pay or reimburse each Lender and the Administrative Agent for all their reasonable out-of-pocket costs and expenses actually incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any other documents prepared in connection herewith or therewith, including, without limitation, the fees and disbursements of outside counsel to each Lender and of outside counsel to the Administrative Agent, and (c) to pay, indemnify or reimburse each Lender, the Administrative Agent, their respective Affiliates, and their respective officers, directors, trustees, employees, advisors, agents and controlling persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other out-of-pocket liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever actually incurred by an Indemnitee or imposed on any Indemnitee in connection with any claim asserted by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document, any commitment letter or fee letter in connection therewith, or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds thereof, (iii) any actual or alleged presence or release of Materials of Environmental Concern on or from any property owned, occupied or operated by any Borrower or any other Loan Party, or any Environmental Liability related in any way to any Borrower or any other Loan Party or any of their respective properties (other than any such presence or release to the extent first arising solely after the date on which the Administrative Agent or any Secured Party enforces its remedies with respect to such property or the Pledged Stock of the applicable Borrower pursuant to the Loan Documents following an Event of Default by transferring the respective property or such Pledged Stock pursuant to a foreclosure, accepting a deed in lieu of foreclosure or similar transfer thereof or the

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appointment of a receiver by a court of competent jurisdiction with respect thereto) or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by any third party or by any Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto (all the foregoing in this clause (c), collectively, the “Indemnified Liabilities”); provided that, the Borrowers shall not have any obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or a material breach of this Agreement by such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons unless determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee, or for any special, indirect, consequential or punitive damages in connection with the Revolving Credit Commitments. No Loan Party (or any of their respective Affiliates, and their respective officers, directors, trustees, employees, advisors, agents and controlling persons) shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with the Revolving Credit Commitments unless determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Loan Party (or any of their respective Affiliates, and their respective officers, directors, trustees, employees, advisors, agents and controlling persons); provided that such waiver of special, indirect, consequential or punitive damages shall not otherwise limit the indemnification obligations of the Borrowers under this Section. Without limiting the foregoing, and to the extent permitted by applicable law, each Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries so to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section shall be payable not later than 30 days after written demand therefor. Statements payable by the Borrowers pursuant to this Section shall be submitted to the address of the Borrowers set forth in Section 9.2, or to such other Person or address as may be hereafter designated by Borrower Representative in a notice to the Administrative Agent. The agreements in this Section shall survive repayment of the Loans and all other amounts payable hereunder. For the avoidance of doubt, this Section 9.5 shall not apply to Taxes, except any Taxes that represent losses or damages arising from any non-Tax claim.

9.6Successors and Assigns.

(a)Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that none of the Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (c) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the

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Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Credit Commitment and the Loans at the time owing to it) to an Eligible Assignee; provided that, any such assignment shall be subject to the following conditions:

(i)Minimum Amounts.

(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Revolving Credit Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Revolving Credit Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Credit Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000 and whole increments of $1,000,000 in excess thereof, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrower Representative otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii)Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Revolving Credit Commitment assigned.

(iii)Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A)the consent of Borrower Representative (such consent not to be unreasonably withheld or delayed, it being agreed that the Borrower Representative’s refusal to consent to an assignment to an Affiliate of a Disqualified Institution shall not be deemed unreasonable) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment, or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that, Borrower Representative shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof; and

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(B)the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund with respect to a Lender.

(iv)Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (it being understood, for the avoidance of doubt, that no Loan Party shall have any obligation to pay, or reimburse the Administrative Agent for, such recordation fee other than as provided in Section 2.20(a)(F)); provided that, the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons. No such assignment shall be made to (A) the Guarantor or any of the Guarantor’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.

(vi)No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

(vii)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower Representative and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each other Lender hereunder (and interest accrued thereon). Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an

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Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.18 and 9.5 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

(c)Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at its address referred to in Section 9.2 a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Credit Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice. The Register is intended to cause each Loan and other obligation hereunder to be in registered form within the meaning of Section 5f.103-1(c) of the United States Treasury Regulations and within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

(d)Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Guarantor or any of the Guarantor’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Credit Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrowers, the Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 8.7 with respect to any payments made by such Lender to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that, such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that requires the consent of all the Lenders under Section 9.1 that directly affects such Participant. The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 (subject to the requirements and limitations therein, including the requirements under Section 2.16 (it being understood that the documentation required under Section 2.16 shall be delivered to the participating Lender)) and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that, such Participant (A) agrees to be subject to the provisions of Sections 2.19 and 2.20 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.16, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that

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sells a participation agrees, at Borrower Representative's request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 2.20 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.7(b) as though it were a Lender; provided that such Participant agrees to be subject to Section 9.7(a) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that, no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The Participant Register is intended to cause each Loan and other obligation hereunder to be in registered form within the meaning of Section 5f.103-1(c) of the United States Treasury Regulations and within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f)Disqualified Institutions. (i) No assignment or participation shall be made to any Person that was a Disqualified Institution as of the date (the “Trade Date”) on which the assigning Lender entered into a binding agreement to sell and assign all or a portion of its rights and obligations under this Agreement to such Person (unless Borrower Representative has consented to such assignment in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Institution for the purpose of such assignment or participation). Any assignment or participation to a Disqualified Institution without Borrower Representative’s consent shall be null and void.

(ii)    Notwithstanding anything to the contrary contained in this Agreement, Disqualified Institutions (A) will not (x) have the right to receive information, reports or other materials provided to Lenders by the Borrowers, the Administrative Agent or any other Lender, (y) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan Document, each Disqualified Institution will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Institutions consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws (a “Debtor Relief Plan”), each Disqualified Institution party hereto hereby agrees (1) not to vote on such Debtor Relief Plan, (2) if such Disqualified Institution does vote on such Debtor Relief Plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any

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similar provision in any other Debtor Relief Laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such Debtor Relief Plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and (3) not to contest any request by any party for a determination by the bankruptcy court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).

(iii)    The Administrative Agent shall have the right, and the Borrowers hereby expressly authorize the Administrative Agent, to post the list of Disqualified Institutions provided by the Borrowers and any updates thereto from time to time on the Platform and/or provide such list to each Lender requesting the same.

9.7Adjustments; Set-off.   Except to the extent that this Agreement provides for payments to be allocated to a particular Lender or to the Lenders, if any Lender (a “Benefited Lender”) shall at any time receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 7.1(f) or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Obligations, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Obligations, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that  if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest and (ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender or Disqualified Institution), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant.

(b)Subject to Sections 9.7(c) and (d), in addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, at any time and from time to time while an Event of Default shall have occurred and be continuing, without prior notice to the Borrowers, any such notice being expressly waived by each Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrowers hereunder (whether at the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrowers, as the case may be. Each Lender agrees promptly to notify the Borrowers and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.

(c)Each Lender hereby acknowledges that the exercise by any Lender of offset, set-off, banker’s lien or similar rights against any deposit account or other property or asset of any Borrower or any other Loan Party could result under certain laws in significant impairment of the ability of all Lenders to recover any further amounts in respect of the Obligations. Each Lender hereby agrees not to charge or offset any amount owed to it by Borrowers against any of the accounts, property or assets of any Borrower or any other Loan Party held by such Lender without the prior written approval of the Required Lenders.

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(d)In the event that any Defaulting Lender shall exercise any such right of setoff, all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.22 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders.

9.8Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with Borrower Representative and the Administrative Agent.

9.9Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

9.10Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrowers, the Administrative Agent, the Arranger and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Arranger, the Administrative Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

9.11Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

9.12Submission To Jurisdiction; Waivers. Each of the Borrowers and the Administrative Agent hereby irrevocably and unconditionally:

(a)submits for itself and its Property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b)consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c)agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Borrower Representative or the Administrative Agent, as applicable, at its address set forth in Section 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

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(d)agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e)waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

For avoidance of doubt, nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

9.13Acknowledgements. Each of the Borrowers and Guarantor hereby acknowledges that:

(a)it has been advised by and consulted with its own legal, accounting, regulatory and tax advisors (to the extent it deemed appropriate) in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b)none of the Arranger, the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrowers or the Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Arranger, the Administrative Agent and the Lenders, on one hand, and the Borrowers and the Guarantor, on the other hand, in connection herewith or therewith is solely that of debtor and creditor;

(c)it is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and

(d)no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Arranger, the Administrative Agent and the Lenders or among the Borrowers, the Guarantor and the Lenders.

9.14Confidentiality. Each of the Administrative Agent and the Lenders agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party as confidential (including the terms hereof or any other Loan Document); provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Arranger, the Administrative Agent, any other Lender or any Affiliate of any thereof, (b) to any Participant or Eligible Assignee (each, a “Transferee”) or prospective Transferee, other than a Disqualified Institution, that agrees to comply with the provisions of this Section or substantially equivalent provisions, (c) to any of its employees, directors, agents, attorneys, accountants and other professional advisors who need to know such information and has generally been informed of confidentiality requirements, (d) to any financial institution that is a direct or indirect contractual counterparty in swap agreements (other than a Disqualified Institution) or such contractual counterparty’s professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty agrees to be bound by the provisions of this Section), (e) upon the request or demand of any Governmental Authority having jurisdiction over it, (f) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (g) in connection with any litigation or similar proceeding, (h) that has been publicly disclosed other than in breach of this Section, (i) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender or (j) in

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connection with the exercise of any remedy hereunder or under any other Loan Document; provided, that in the case of each of clauses (e), (f) and (g), the Administrative Agent and such Lender, as applicable, shall, to the extent permitted by applicable Requirements of Law, provide Borrower Representative with reasonable advance notice of such disclosure.

9.15Release of Guarantee Obligations. Notwithstanding anything to the contrary contained herein or any other Loan Document, when all Obligations have been paid in full (other than obligations under the Loan Documents (including contingent reimbursement obligations and indemnity obligations) which, by their express terms, survive termination of this Agreement or such other Loan Document, as the case may be) and all Revolving Credit Commitments have terminated or expired, upon request of Borrower Representative, the Administrative Agent shall take such actions as shall be required to release all guarantee obligations under any Loan Document. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower or the Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Borrower or the Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

9.16Accounting Changes. In the event that any Accounting Change (as defined below) shall occur and such change results in a change in the method of calculation of financial condition covenants, standards or terms in this Agreement, then Borrower Representative and the Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Change with the desired result that the criteria for evaluating a Borrower’s financial condition shall be the same after such Accounting Change as if such Accounting Change had not been made. Until such time as such an amendment shall have been executed and delivered by Borrower Representative, the Administrative Agent and the Required Lenders, all financial condition covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Change had not occurred. “Accounting Change” refers to any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board or, if applicable, the SEC.

9.17Waivers of Jury Trial. THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

9.18Acknowledgment and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

(b)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

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(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.

9.19Joint and Several Liability. Each Borrower hereby accepts joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of each other Borrower to accept joint and several liability for the Loans and the other Obligations hereunder. Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with each other Borrower, with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them. If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event each other Borrower will make such payment with respect to, or perform, such Obligation.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BSPRT BB LOAN, LLC,

as a Borrower

By: ___________________________________
Name:
Title:

BSPRT FINANCE SUB-LENDER II, LLC,

as a Borrower

By: ___________________________________
Name:
Title:

BENEFIT STREET PARTNERS REALTY TRUST, INC.,

as the Guarantor

By: __________________________________
Name:
Title:

[Signature Page to Credit Agreement]

BARCLAYS BANK PLC,
as Administrative Agent, Arranger and Lender

By: ___________________________________
Name:
Title:

[Signature Page to Credit Agreement]

Annex A

Commitments

Lender	Revolving Credit Commitment
BARCLAYS BANK PLC	$100,000,000
Total Commitments	$100,000,000

Commitments during the Specified Commitment Increase Period

Lender	Revolving Credit Commitment
BARCLAYS BANK PLC	$150,000,000
Total Commitments	$150,000,000

Annex A

Annex B

Representations and Warranties Regarding Borrowing Base Assets

Attached.

Annex B

Schedule 1.1(a)

DISQUALIFIED INSTITUTIONS

All Affiliates, successors and assigns of the entities listed on this Schedule 1.1(a), in each case to the extent readily identifiable as an Affiliate, successor or assign of such entity on the basis of its name, and such other Persons indicated in writing by Borrower Representative from time to time to the Lenders in accordance with Section 9.6(f)(iii), shall be a Disqualified Institution, as defined and used in this Agreement.

1.      Annaly Commercial Real Estate Group

2.      Apollo Global Management

3.      Arbor Capital Group, Inc.

4.      Argentic Investment Management

5.      Ares Management

6.      Berkadia Commercial Mortgage LLC

7.      Blackstone

8.      C-III Commercial Mortgage

9.      Cantor Commercial Real Estate

10.    CBRE Group Inc.

11.    Cerberus Capital Management

12.    Colony Capital

13.    Crexus Investment Corp.

14.    Greystone

15.    Guggenheim Partners, LLC

16.    Ellington Management Group

17.    Elliot Management

18.    Fortress Investment Group

19.    Jefferies LoanCore

20.    KKR

21.    Ladder Capital Finance

22.    LStar Capital

23.    Mesa West

24.    money360

25.    Newcastle Investment Group

26.    Oaktree Capital Management

27.    Principal Commercial

28.    Prime Finance

29.    Rialto Capital Management

30.    ReadyCap Lending

31.    Shelter Growth Capital Partners

32.    Silverpeak Real Estate Partners

33.    Starwood Mortgage Capital

34.    Voya Financial

35.    Walker & Dunlop Inc.

36.    Waterfall Asset Management

Schedule 1.1(a)

TABLE OF CONTENTS

(continued)

Page

-ii-

OHSUSA:759868611.4

10212630.13

Schedule 3.18

FILING OFFICES

Intermediate Pledgors	Delaware Secretary of State
Borrowers	Delaware Secretary of State

EXHIBIT 2

Form of Acknowledgment and Consent

[Attached]

Schedule 3.18

ACKNOWLEDGMENT AND CONSENT

Reference is made to (a) the THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of September 8, 2021 (the “Third Amendment”), to the Credit Agreement, dated as of September 19, 2017 (as amended by that certain First Amendment to Credit Agreement, dated as of July 30, 2018, and Second Amendment to Credit Agreement, dated as of September 12, 2019, and as further amended, restated, supplemented or otherwise modified in writing from time to time, including pursuant to the Third Amendment, the “Credit Agreement”), among BSPRT BB LOAN LLC, a Delaware limited liability company (“Borrower Representative”), BSPRT FINANCE SUB-LENDER II, LLC, a Delaware limited liability company (“BSPRT Finance Sub-Lender” and together with Borrower Representative, the “Borrowers”, and each a “Borrower”), BENEFIT STREET PARTNERS REALTY TRUST, INC., a Maryland corporation (the “Guarantor”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”) and BARCLAYS BANK PLC, as administrative agent (in such capacity, the “Administrative Agent”), (b) the GUARANTEE AND COLLATERAL AGREEMENT, dated as of September 19, 2017 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “Guarantee and Collateral Agreement”), made by the Borrowers and the Guarantor, in favor of the Administrative Agent for the Lenders, (c) the PLEDGE AGREEMENT, dated as of September 19, 2017 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “Conduit Lender Pledge Agreement”), made by BSPRT Finance, LLC (n/k/a BSPRT CMBS Finance, LLC), a Delaware limited liability company (the “Conduit Lender Pledgor”), in favor of the Administrative Agent for the Lenders and (d) the PLEDGE AGREEMENT, dated as of September 13, 2019 (as amended, restated, supplemented or otherwise modified in writing from time to time, the “CRE Finance Pledge Agreement”), made by BSPRT CRE Finance, LLC, a Delaware limited liability company (the “CRE Finance Pledgor”), in favor of the Administrative Agent for the Lenders. Unless otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement are used herein as therein defined.

Each of the undersigned parties to the Credit Agreement, the Guarantee and Collateral Agreement, the Conduit Lender Pledge Agreement, the CRE Finance Pledge Agreement and the other Security Documents, as applicable, hereby (a) consents to the transactions contemplated by the Third Amendment and (b) acknowledges and agrees that the guarantees and grants of security interests made by such party contained in the Credit Agreement, the Guarantee and Collateral Agreement, the Conduit Lender Pledge Agreement, the Operating Partnership Pledge Agreement and the other Security Documents, as applicable, are, and shall remain, in full force and effect after giving effect to the Third Amendment.

[Signature Pages Follow]

[Signature Page to Acknowledgment and Consent]

IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment and Consent to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.

BSPRT BB LOAN LLC,

as a Borrower

By:    ___________________________
Name:
Title:

BSPRT FINANCE SUB-LENDER II, LLC,

as a Borrower

By:    ___________________________
Name:
Title:

BENEFIT STREET PARTNERS REALTY

TRUST, INC., as Guarantor

By:    ___________________________
Name:
Title:

BSPRT CMBS FINANCE, LLC,

as Conduit Lender Pledgor

By:    ___________________________
Name:
Title:

[Signature Page to Acknowledgment and Consent]

BSPRT CRE FINANCE, LLC,

as CRE Finance Pledgor

By:    ___________________________
Name:
Title:

[Signature Page to Acknowledgment and Consent]

EX-31.1

Exhibit 31.1

I, Richard J. Byrne, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 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

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

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

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

Date: November 10, 2021 /s/ Richard J. Byrne_____________ Richard J. Byrne Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Jerome S. Baglien, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 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

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

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

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

Date: November 10, 2021 /s/ Jerome S. Baglien______________ Jerome S. Baglien Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATIONS

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

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

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

Date: November 10, 2021 /s/ Richard J. Byrne_________________ Richard J. Byrne Chief Executive Officer and President (Principal Executive Officer) /s/ Jerome S. Baglien_________________ Jerome S. Baglien Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	000-55188
Entity Registrant Name	FRANKLIN BSP REALTY TRUST, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-1406086
Entity Address, Address Line One	1345 Avenue of the Americas
Entity Address, Address Line Two	Suite 32A
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10105
City Area Code	212
Local Phone Number	588-6770
Title of 12(b) Security	Common Stock, par value $0.01 per share
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		43,951,382
Entity Central Index Key	0001562528
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
ASSETS
Cash and cash equivalents		$ 91,374	$ 82,071
Restricted cash		9,531	10,070
Commercial mortgage loans, held for investment, net of allowance of $15,499 and $20,886 as of September 30, 2021 and December 31, 2020, respectively		3,247,646	2,693,848
Commercial mortgage loans, held for sale, measured at fair value		99	67,649
Real estate securities, available for sale, measured at fair value, amortized cost of $0 and $179,392 as of September 30, 2021 and December 31, 2020, respectively		0	171,136
Derivative instruments, measured at fair value		0	25
Other real estate investments, measured at fair value		2,547	2,522
Receivable for loan repayment	[1]	123,311	98,551
Accrued interest receivable		17,132	15,295
Prepaid expenses and other assets		4,023	8,538
Intangible lease asset, net of amortization		49,192	13,546
Real estate owned, net of depreciation		90,623	26,510
Total assets		3,635,478	3,189,761
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations		1,792,353	1,625,498
Mortgage note payable		23,998	29,167
Unsecured debt		60,000	0
Derivative instruments, measured at fair value		0	403
Interest payable		972	2,110
Distributions payable		20,447	15,688
Accounts payable and accrued expenses		9,318	5,125
Due to affiliates		17,140	9,525
Total liabilities		2,558,349	2,182,063
Commitment and contingencies (See Note 10)
Equity [Abstract]
Preferred stock, $0.01 par value, 50,000,000 authorized and none issued or outstanding as of September 30, 2021 and December 31, 2020, respectively		0	0
Common stock, $0.01 par value, 949,999,000 shares authorized, 44,162,657 and 44,510,051 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		443	446
Additional paid-in capital		906,517	912,725
Accumulated other comprehensive income (loss)		0	(8,256)
Accumulated deficit		(59,844)	(106,471)
Total stockholders' equity		847,116	798,444
Non-controlling interest		5,764	0
Total equity		852,880	798,444
Total liabilities, redeemable convertible preferred stock and equity		3,635,478	3,189,761
CMBS
ASSETS
Real estate securities, available for sale, measured at fair value, amortized cost of $0 and $179,392 as of September 30, 2021 and December 31, 2020, respectively			171,136
LIABILITIES AND STOCKHOLDERS' EQUITY
Repurchase agreements		550,156	276,340
Other financing and loan participation - commercial mortgage loans		37,434	31,379
Real Estate Securities
LIABILITIES AND STOCKHOLDERS' EQUITY
Repurchase agreements		46,531	186,828
Convertible Series A Preferred Stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Convertible preferred stock, redeemable, issuer option, value		127,603	202,292
Convertible Series C Preferred Stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Convertible preferred stock, redeemable, issuer option, value		6,969	6,962
Convertible Series D Preferred Stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Convertible preferred stock, redeemable, issuer option, value		$ 89,677	$ 0

[1] Includes $123.3 million and $98.6 million of cash held by servicer related to the CLOs as of September 30, 2021 and December 31, 2020, respectively.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Allowance for loan losses	$ 15,499	$ 20,886
Aggregate carrying value	$ 0	$ 179,392
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	949,999,000	949,999,000
Common stock, shares issued (in shares)	44,162,657	44,510,051
Common stock, shares outstanding (in shares)	44,162,657	44,510,051
Restricted cash	$ 9,531	$ 10,070
Convertible Series A Preferred Stock
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	60,000	60,000
Preferred stock, shares issued (in shares)	25,567	40,515
Preferred stock, shares outstanding (in shares)	25,567	40,515
Convertible Series C Preferred Stock
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	20,000	20,000
Preferred stock, shares issued (in shares)	1,400	1,400
Preferred stock, shares outstanding (in shares)	1,400	1,400
Convertible Series D Preferred Stock
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	20,000	20,000
Preferred stock, shares issued (in shares)	17,950	0
Preferred stock, shares outstanding (in shares)	17,950	0
Collaterized loan obligation
Restricted cash	$ 123,300	$ 98,600

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income:
Interest income	$ 47,747	$ 44,414	$ 138,969	$ 135,509
Less: Interest expense	11,988	15,113	35,994	54,740
Net interest income	35,759	29,301	102,975	80,769
Revenue from real estate owned	1,015	1,017	2,447	3,474
Total income	36,774	30,318	105,422	84,243
Expenses:
Asset management and subordinated performance fee	8,265	3,749	19,682	11,399
Acquisition expenses	690	166	1,012	483
Administrative services expenses	2,980	3,128	9,532	10,180
Professional fees	2,488	2,470	7,262	8,476
Real estate owned operating expenses	0	509	0	3,250
Depreciation and amortization	0	591	812	1,765
Other expenses	709	571	2,115	3,213
Total expenses	15,132	11,184	40,415	38,766
Other (income)/loss:
Provision/(benefit) for credit losses	(1,613)	(3,710)	(5,452)	14,929
Impairment losses on real estate owned assets	0	0	0	398
Realized (gain)/loss on extinguishment of debt	0	0	0	(438)
Realized (gain)/loss on sale of real estate securities	0	4,390	1,375	10,137
Realized (gain)/loss on sale of commercial mortgage loans, held for sale	(206)	0	(206)	(252)
Realized (gain)/loss on sale of real estate owned assets, held for sale	(8,698)	(1,424)	(9,810)	(1,424)
Realized (gain)/loss on sale of commercial mortgage loans, held for sale, measured at fair value	(9,061)	(1,940)	(22,211)	(11,106)
Unrealized (gain)/loss on commercial mortgage loans, held for sale, measured at fair value	1,104	(263)	0	76
Unrealized (gain)/loss on other real estate investments, measured at fair value	(1)	(6)	(27)	37
Unrealized (gain)/loss on derivatives	(1,428)	(4,310)	(374)	625
Realized (gain)/loss on derivatives	1,902	4,722	(357)	13,050
Total other (income)/loss	(18,001)	(2,541)	(37,062)	26,032
Income before taxes	39,643	21,675	102,069	19,445
Provision/(benefit) for income tax	1,148	178	3,418	(2,466)
Net income	38,495	21,497	98,651	21,911
Net income applicable to common stock	$ 29,490	$ 16,739	$ 75,905	$ 10,466
Basic earnings per share (in dollars per share)	$ 0.67	$ 0.38	$ 1.72	$ 0.24
Diluted earnings per share (in dollars per share)	$ 0.67	$ 0.38	$ 1.71	$ 0.24
Basic weighted average shares outstanding (in shares)	44,185,241	44,405,196	44,245,733	44,348,282
Diluted weighted average shares outstanding (in shares)	44,200,564	44,421,084	44,261,470	44,361,739

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 38,495	$ 21,497	$ 98,651	$ 21,911
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	0	18,656	8,256	(8,632)
Comprehensive income attributable to Franklin BSP Realty Trust, Inc.	$ 38,495	$ 40,153	$ 106,907	$ 13,279

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Parent	Noncontrolling Interest	Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)	Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2) Accumulated Deficit	Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2) Parent
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	$ 816,805	$ 441	$ 903,310	$ (978)	$ (85,968)	$ 816,805		$ (7,761)	$ (7,761)	$ (7,761)
Beginning balance (in shares) at Dec. 31, 2019		43,916,815
Beginning balance, total equity at Dec. 31, 2019	$ 816,805	$ 441	903,310	(978)	(85,968)	816,805		(7,761)	(7,761)	(7,761)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)	650,034
Issuance of common stock	$ 10,862	$ 7	10,855			10,862
Common stock repurchases (in shares)		(361,829)
Common stock repurchases	(6,715)	$ (4)	(6,711)			(6,715)
Common stock issued through distribution reinvestment plan (in shares)		191,326
Common stock issued through distribution reinvestment plan	3,549	$ 1	3,548			3,549
Share-based compensation	39		39			39
Offering costs	(136)		(136)			(136)
Net income	(7,400)				(7,400)	(7,400)
Distributions declared	(20,371)				(20,371)	(20,371)
Other comprehensive income	(67,607)			(67,607)		(67,607)
Ending balance (in shares) at Mar. 31, 2020		44,396,346
Ending balance, total equity at Mar. 31, 2020	721,265	$ 445	910,905	(68,585)	(121,500)	721,265	$ 0
Beginning balance (in shares) at Dec. 31, 2019		43,916,815
Beginning balance, total equity at Dec. 31, 2019	816,805	$ 441	903,310	(978)	(85,968)	816,805		(7,761)	(7,761)	(7,761)
Ending balance (in shares) at Jun. 30, 2020		44,395,816
Ending balance, total equity at Jun. 30, 2020	$ 753,596	$ 445	910,706	(28,266)	(129,289)	753,596	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	Accounting Standards Update 2016-13 [Member]
Beginning balance (in shares) at Dec. 31, 2019		43,916,815
Beginning balance, total equity at Dec. 31, 2019	$ 816,805	$ 441	903,310	(978)	(85,968)	816,805		$ (7,761)	$ (7,761)	$ (7,761)
Ending balance (in shares) at Sep. 30, 2020		44,353,727
Ending balance, total equity at Sep. 30, 2020	777,415	$ 445	910,040	(9,610)	(123,460)	777,415	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	721,265	$ 445	910,905	(68,585)	(121,500)	721,265	0
Beginning balance (in shares) at Mar. 31, 2020		44,396,346
Beginning balance, total equity at Mar. 31, 2020	721,265	$ 445	910,905	(68,585)	(121,500)	721,265	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock	25		25			25
Common stock repurchases (in shares)		(11,306)
Common stock repurchases	(192)		(192)			(192)
Common stock issued through distribution reinvestment plan (in shares)		6
Common stock issued through distribution reinvestment plan	(57)		(57)			(57)
Share-based compensation (in shares)		10,770
Share-based compensation	57		57			57
Offering costs	(32)		(32)			(32)
Net income	7,814				7,814	7,814
Distributions declared	(15,603)				(15,603)	(15,603)
Other comprehensive income	40,319			40,319		40,319
Ending balance (in shares) at Jun. 30, 2020		44,395,816
Ending balance, total equity at Jun. 30, 2020	753,596	$ 445	910,706	(28,266)	(129,289)	753,596	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	753,596	$ 445	910,706	(28,266)	(129,289)	753,596	0
Common stock repurchases (in shares)		(206,332)
Common stock repurchases	(3,352)	$ (2)	(3,350)			(3,352)
Common stock issued through distribution reinvestment plan (in shares)		164,243
Common stock issued through distribution reinvestment plan	2,669	$ 2	2,667			2,669
Share-based compensation	40		40			40
Offering costs	(23)		(23)			(23)
Net income	21,497				21,497	21,497
Distributions declared	(15,668)				(15,668)	(15,668)
Other comprehensive income	18,656			18,656		18,656
Ending balance (in shares) at Sep. 30, 2020		44,353,727
Ending balance, total equity at Sep. 30, 2020	777,415	$ 445	910,040	(9,610)	(123,460)	777,415	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	777,415	445	910,040	(9,610)	(123,460)	777,415	0
Total equity	798,444	$ 446	912,725	(8,256)	(106,471)	798,444	0
Beginning balance (in shares) at Dec. 31, 2020		44,510,051
Beginning balance, total equity at Dec. 31, 2020	798,444	$ 446	912,725	(8,256)	(106,471)	798,444	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock repurchases (in shares)		(521,796)
Common stock repurchases	(9,147)	$ (5)	(9,142)			(9,147)
Common stock issued through distribution reinvestment plan (in shares)		147,404
Common stock issued through distribution reinvestment plan	2,585	$ 2	2,583			2,585
Share-based compensation	55		55			55
Offering costs	(21)		(21)			(21)
Net income	30,146				30,146	30,146
Distributions declared	(15,644)				(15,644)	(15,644)
Other comprehensive income	8,042			8,042		8,042
Ending balance (in shares) at Mar. 31, 2021		44,135,659
Ending balance, total equity at Mar. 31, 2021	814,460	$ 443	906,200	(214)	(91,969)	814,460	0
Beginning balance (in shares) at Dec. 31, 2020		44,510,051
Beginning balance, total equity at Dec. 31, 2020	798,444	$ 446	912,725	(8,256)	(106,471)	798,444	0
Ending balance (in shares) at Sep. 30, 2021		44,162,657
Ending balance, total equity at Sep. 30, 2021	852,880	$ 443	906,517	0	(59,844)	847,116	5,764
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	814,460	$ 443	906,200	(214)	(91,969)	814,460	0
Beginning balance (in shares) at Mar. 31, 2021		44,135,659
Beginning balance, total equity at Mar. 31, 2021	814,460	$ 443	906,200	(214)	(91,969)	814,460	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)		504
Common stock repurchases (in shares)		(3,784)
Common stock repurchases	(66)		(66)			(66)
Common stock issued through distribution reinvestment plan (in shares)		141,270
Common stock issued through distribution reinvestment plan	2,524	$ 1	2,523			2,524
Share-based compensation (in shares)		11,184
Share-based compensation	53		53			53
Offering costs	(21)		(21)			(21)
Net income	30,010				30,010	30,010
Distributions declared	(15,898)				(15,898)	(15,898)
Other comprehensive income	214			214		214
Ending balance (in shares) at Jun. 30, 2021		44,284,833
Ending balance, total equity at Jun. 30, 2021	831,276	$ 444	908,689	0	(77,857)	831,276	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	831,276	$ 444	908,689	0	(77,857)	831,276	0
Common stock repurchases (in shares)		(123,257)
Common stock repurchases	(2,204)	$ (1)	(2,203)			(2,204)
Common stock issued through distribution reinvestment plan (in shares)		1,081
Common stock issued through distribution reinvestment plan	1		1			1
Share-based compensation	52		52			52
Offering costs	(22)		(22)			(22)
Net income	38,495				38,495	38,495
Distributions declared	(20,482)				(20,482)	(20,482)
Other comprehensive income	0					0
Noncontrolling interest, increase from business combination	5,764						5,764
Ending balance (in shares) at Sep. 30, 2021		44,162,657
Ending balance, total equity at Sep. 30, 2021	852,880	$ 443	906,517	0	(59,844)	847,116	5,764
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total equity	$ 852,880	$ 443	$ 906,517	$ 0	$ (59,844)	$ 847,116	$ 5,764

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Cash flows from operating activities:
Net income	$ 38,495	$ 21,497	$ 98,651	$ 21,911
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Premium amortization and (discount accretion), net			(4,421)	(4,535)
Accretion of deferred commitment fees			(6,429)	(4,710)
Amortization of deferred financing costs			3,820	8,297
Share-based compensation			160	136
Realized (gain)/loss from sale of real estate securities			1,375	10,137
Realized (gain)/loss on sale of real estate owned assets, held for sale	(8,698)	(1,424)	(9,810)	(1,424)
Unrealized (gain)/loss from commercial mortgage loans, held for sale			0	76
Unrealized (gain)/loss from derivative instruments			(374)	625
Unrealized (gain)/loss from other real estate investments			(27)	37
Depreciation and amortization	0	591	812	1,765
Recognition of deferred rent revenue			0	(150)
Provision/(benefit) for credit losses	(1,613)	(3,710)	(5,452)	14,929
Impairment losses on real estate owned assets			0	398
Origination of commercial mortgage loans, held for sale			(321,278)	(122,043)
Proceeds from sale of commercial mortgage loans, held for sale			388,828	270,479
Changes in assets and liabilities:
Accrued interest receivable			4,593	6,280
Prepaid expenses and other assets			1,434	(5,173)
Accounts payable and accrued expenses			4,547	(3,114)
Due to affiliates			7,615	3,649
Interest payable			(1,005)	(2,175)
Net cash (used in)/provided by operating activities			163,039	195,395
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans, held for investment			(1,388,777)	(851,524)
Principal repayments received on commercial mortgage loans, held for investment			771,878	880,067
Purchase of real estate owned and capital expenditures			(134,052)	(2,869)
Proceeds from sale of real estate owned, held for sale			29,914	15,424
Purchase of real estate securities			0	(148,580)
Proceeds from sale of commercial mortgage loans, held for sale			38,161	0
Proceeds from sale/repayment of real estate securities			178,017	346,200
Proceeds from (purchase)/sale of derivative instruments			(4)	(829)
Net cash (used in)/provided by investing activities			(504,863)	237,889
Cash flows from financing activities:
Proceeds from issuances of common stock			0	10,887
Proceeds from issuances of redeemable convertible preferred stock			15,000	70
Common stock repurchases			(11,417)	(10,259)
Borrowings on collateralized loan obligations			612,723	0
Repayments of collateralized loan obligations			(442,672)	(150,766)
Borrowings on repurchase agreements - commercial mortgage loans			812,528	195,182
Repayments of repurchase agreements - commercial mortgage loans			(538,712)	(263,482)
Borrowings on repurchase agreements - real estate securities			175,822	857,163
Repayments of repurchase agreements - real estate securities			(316,118)	(1,073,977)
Proceeds from other financing and loan participation - commercial mortgage loans			6,055	23,001
Borrowings on unsecured debt			160,000	0
Repayments of unsecured debt			(100,000)	0
Borrowing on mortgage note payable			23,940	11,456
Payments of deferred financing costs			(4,497)	(511)
Distributions paid			(42,064)	(36,666)
Net cash (used in)/provided by financing activities:			350,588	(437,902)
Net change in cash, cash equivalents and restricted cash			8,764	(4,618)
Cash, cash equivalents and restricted cash, beginning of period			92,141	109,122	$ 109,122
Cash, cash equivalents and restricted cash, end of period	100,905	104,504	100,905	104,504	92,141
Supplemental disclosures of cash flow information:
Taxes paid			80	4,400
Interest paid			33,312	48,618
Supplemental disclosures of non - cash flow information:
Distributions payable	20,447	15,645	20,447	15,645	15,688
Common stock issued through distribution reinvestment plan			5,110	6,161
Commercial mortgage loans transferred from held for sale to held for investment			0	23,625
Real estate owned received in foreclosure			0	35,411
Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	91,374	96,066	91,374	96,066	82,071
Restricted cash	9,531	8,438	9,531	8,438	10,070
Cash, cash equivalents and restricted cash, end of period	$ 100,905	$ 104,504	$ 100,905	$ 104,504	$ 92,141

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Organization and Business Operations

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Operations

Organization and Business Operations

Franklin BSP Realty Trust, Inc. (the "Company"), formerly known as Benefit Street Realty Trust, Inc., is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt investments secured by properties located within and outside the United States. The Company was incorporated in Maryland on November 15, 2012 and commenced operations on May 14, 2013.

The Company made a tax election to be treated as a real estate investment trust (a "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. In addition, the Company, through a subsidiary which is treated as a taxable REIT subsidiary (a "TRS") is indirectly subject to U.S federal, state and local income taxes. The majority 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 Amended and Restated Advisory Agreement, dated January 19, 2018, as amended August 18, 2021 (the "Advisory Agreement"). The Advisor is a wholly owned subsidiary of Franklin Resources, Inc. which, together with its various subsidiaries, operates as Franklin Templeton. 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 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.

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 originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") at a profit. The Company also invests in commercial real estate securities. 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 collateralized debt obligations ("CDOs"). The Company also owns real estate acquired by the Company through foreclosure and deed in lieu of foreclosure, and purchased for investment, typically subject to triple net leases.

On October 19, 2021, the Company completed a merger with Capstead Mortgage Corporation (“Capstead”) pursuant to which Capstead merged into a wholly-owned subsidiary of the Company, and the Company’s common stock commenced trading on the NYSE under the ticker “FBRT”. The Capstead assets acquired in the merger consist primarily of cash and residential adjustable-rate mortgage pass-through securities issued and guaranteed by government-sponsored enterprises or by an agency of the federal government. The Company intends to reinvest the cash and proceeds from dividends, interest, repayments and sales of the assets acquired in the merger into its own investment strategies (see Note 16 - Subsequent Events).

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

The Company's unaudited consolidated financial statements and related footnotes 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.

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, 2020, which are included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 11, 2021.

Use of Estimates

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.

The global coronavirus (COVID-19) pandemic has caused economic disruptions and changes to the real estate market. Numerous countries, including the U.S., have declared national emergencies with respect to COVID-19 and certain jurisdictions, including those where our corporate headquarters and/or properties that secure our investments, or properties that the Company owns, are located, have at times imposed “stay-at-home” guidelines or orders or other restrictions to help prevent its spread. The effects of COVID-19 may negatively and materially impact significant estimates and assumptions used by the Company including, but not limited to estimates of expected credit losses, valuation of our equity investments and the fair value estimates of the Company's assets and liabilities. Actual results could differ from those estimates.

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 variable interest entity ("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 it 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. Non-controlling interest represents the equity of a consolidated joint venture that is not owned by the Company.

The accompanying consolidated financial statements include the accounts of collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.

Acquisition Expenses

The Company capitalizes certain direct costs relating to loan origination activities. The cost is amortized over the life of the loan and recognized in interest income in the Company's consolidated statements of operations. Acquisition expenses paid on future funding amounts are expensed within the acquisition expenses line in the Company's consolidated statements of operations.

Cash and Cash Equivalents

Cash consists of amounts deposited with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased.

Restricted Cash

Restricted cash primarily consists of cash pledged as margin on repurchase agreements and derivative transactions. The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.

Commercial Mortgage Loans

Held for Investment - 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, are carried at amortized cost less allowance for credit 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 commitment 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 commitment fees is recognized in interest income in the Company's consolidated statements of operations.

Held for Sale - Commercial mortgage 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 statements of operations. Unamortized loan origination costs for commercial mortgage loans held for sale that are carried at the lower of cost or fair value 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 mortgage loans to held for sale.

Held for Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held for sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in the Commercial mortgage loans, held for sale, measured at fair value in the consolidated balance sheets. Interest income received on commercial mortgage loans, held for sale, measured at fair value is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. Costs to originate these investments are expensed when incurred.

Real estate owned

The Company classifies its real estate owned as long-lived assets held for investment or as long-lived assets held for sale. Held for investment assets are stated at cost, as adjusted for any impairment loss, less accumulated depreciation. Held for sale assets are carried at the lower of depreciated cost or estimated fair value, less estimated costs to sell. The Company generally reclassifies assets as held for sale once a sales contract has been executed and earnest money has become non-refundable and the criteria under ASC 360 has been met.

Amounts capitalized to real estate owned consist of the cost of acquisition or construction, any tenant improvements or major improvements, betterments that extend the useful life of the related asset, and transaction costs associated with the acquisition of an individual asset that does not qualify as a business combination. All repairs and maintenance are expensed as incurred. Additionally, the Company capitalizes interest while the development, or redevelopment, of a real estate owned asset is in progress. No development or redevelopments of real estate owned assets are in progress as of September 30, 2021.

The Company’s real estate owned assets are depreciated or amortized using the straight-line method over the following useful lives:

Buildings & Site Improvements	40 years
Furniture, fixtures, and equipment	15 years
Intangible lease assets	Lease term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of either operating properties or properties under construction in which the Company has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present, management assesses whether the respective carrying values will be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition for assets held for use, or from the estimated fair values, less costs to sell, for assets held for sale. In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts such assets to the respective estimated fair values and recognizes an impairment loss. Estimated fair values are calculated based on the following information, depending upon availability, in order of preference: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated sales value (which is based on key assumptions such as estimated market rents, lease-up periods, estimated lease terms, and capitalization and discount rates) less estimated selling costs.

Fair Value of Assets and Liabilities of Acquired Properties

Upon the acquisition of real properties, the Company records the fair value of properties (plus any related acquisition costs) allocated based on relative fair value as tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based on their estimated fair values. Substantially all of the Company’s property acquisitions qualify as asset acquisitions under Accounting Standards Codification ("ASC") 805, Business Combinations.

The estimated fair values of the tangible assets of an acquired property are determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building based on management’s determination of the estimated fair value of these assets. Management relies on a sales comparison approach using closed land sales and listings in determining the land value, and determines the as-if-vacant estimated fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs.

The estimated fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of market rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases, taking into consideration the probability of renewals for any below-market leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental revenues over the remaining terms of the respective leases.

The estimated fair values of in-place leases include an estimate of the direct costs associated with obtaining the acquired or "in place" tenant and estimates of opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease. The amount capitalized as direct costs associated with obtaining a tenant include commissions, tenant improvements, and other direct costs and are estimated based on management’s consideration of current market costs to execute a similar lease. These direct lease origination costs are included in deferred lease costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

Credit Losses

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses, which amends the credit impairment model for financial instruments. The Company adopted ASU 2016-13 on January 1, 2020.

The allowance for credit losses required under ASU 2016-13 is deducted from the respective loans’ amortized cost basis on the Company’s consolidated balance sheets. The allowance for credit losses attributed to unfunded loan commitments is included in Accounts payable and accrued expenses on the consolidated balance sheets. The guidance also required a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

The following discussion highlights changes to the Company’s accounting policies as a result of this adoption.

Allowance for credit losses

The allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan commitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and reasonable and supportable forecasts.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.

In measuring the allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 1998 to 2020 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a discounted cash flow (“DCF”) methodology.

For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the allowance for credit losses.

In developing the allowance for credit losses for its loans held for investment, 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, using similar factors as those in developing the allowance for credit losses. 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. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly. At the time of origination or purchase, loans held for investment are ranked as a “2” and will move accordingly going forward based on the ratings which are defined as follows:

1.Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.

2.Low Risk- Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.

3.Average Risk- Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.

4.High Risk/Delinquent/Potential for Loss- Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.

5.Impaired/Defaulted/Loss Likely- Underperforming investment with expected loss of interest and some principal.

The Company also considers qualitative and environmental factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the allowance for credit losses.

Changes in the allowance for credit losses for the Company’s financial instruments are recorded in Provision/(benefit) for credit losses on the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded on the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.

The Company has elected to not measure an allowance for credit losses for accrued interest receivable as it is timely, following three months' time, reversed against interest income when a loan, real estate security or preferred equity investment is placed on nonaccrual status. The Company did not record reversals of accrued interest receivable during the nine months ended September 30, 2021. Loans are charged off against the Provision/(benefit) for credit losses when all or a portion of the principal amount is determined to be uncollectible.

Past due and nonaccrual status

Loans are placed on nonaccrual status and considered non-performing when full payment of principal and interest is unpaid for 90 days or more or where reasonable doubt exists as to timely collection, unless the loan is both well secured and in the process of collection. Interest received on nonaccrual status loans are accounted for under the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company may return a loan to accrual status when repayment of principal and interest is reasonably assured.

Troubled Debt Restructuring (“TDR”)

The Company classifies an individual financial instrument as a TDR when it has a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concession to the borrower who is experiencing financial difficulty. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument. The Company determines the allowance for credit losses for financial instruments that are TDRs individually.

Real Estate Securities

On the acquisition date, all of the Company’s commercial real estate securities were classified as available for sale ("AFS") and carried at fair value, and subsequently any unrealized gains or losses are recognized as a component of accumulated other comprehensive income or loss. The Company may elect the fair value option for its real estate securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded in the Company’s consolidated statements of operations. No such election was made as of September 30, 2021. 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. The Company uses the specific identification method in determining the cost relief for real estate securities sold. Realized gains and losses from the sale of real estate securities are included in the Company’s consolidated statements of operations.

AFS real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations. If the Company intends to sell an impaired real estate security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.

The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.

The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to accumulated other comprehensive income in the consolidated balance sheets.

Repurchase Agreements

Commercial mortgage loans and real estate securities sold under repurchase agreements have been treated as collateralized financing transactions because the Company maintains effective control over the transferred securities. Commercial mortgage loans and real estate securities financed through a repurchase agreement remain on the Company’s consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability. Interest paid in accordance with repurchase agreements is recorded in interest expense on the Company's consolidated statements of operations.

Deferred Financing Costs

The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets on the consolidated balance sheets. Deferred financing cost on the Company's collateralized loan obligations ("CLO") are netted against the Company's CLO payable in the Collateralized loan obligations on the consolidated balance sheets. Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in interest expense on the Company's consolidated statements of operations. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity.

Share Repurchase Program

The Company has a Share Repurchase Program (the "SRP") that enables stockholders to sell their shares to the Company, subject to certain conditions. Refer to Note 9 - Stock Transactions for a description of the SRP. When a stockholder requests a redemption and the redemption is approved by the board of directors, the Company reclassifies such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares.

Offering and Related Costs

Since 2018, the Company has from time to time offered, and may in the future offer, shares of the Company’s common stock or one or more series of its preferred stock (“Preferred Stock”), including its Series A convertible preferred stock (“Series A Preferred Stock”), Series C convertible preferred stock (the “Series C Preferred Stock,”) and Series D convertible preferred stock (the “Series D Preferred Stock”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended. In connection with these offerings, the Company incurs various offering costs. These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers. Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are included within Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, on the Company’s consolidated balance sheets.

Distribution Reinvestment Plan

Pursuant to the Company's distribution reinvestment plan ("DRIP") stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. The purchase price for shares purchased through the DRIP has been the lesser of (i) the Company’s most recent estimated per share net asset value ("NAV"), and (ii) the Company’s most recently disclosed GAAP book value per share. There is no market for our common stock. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the consolidated balance sheets in the period distributions are declared. The DRIP was suspended during the second quarter of 2021 and was also suspended during the third quarter of 2021 in connection with the Capstead merger.

Income Taxes

The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on income in addition to U.S. federal income and excise taxes on its undistributed income. The Company, through its TRS, is indirectly subject to U.S. federal, state and local income taxes. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but is instead taxed as a C corporation. For financial reporting purposes, the TRS is consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. Total income tax provision/(benefit) for the three months ended September 30, 2021 and September 30, 2020 was $1.1 million and $0.2 million, respectively. Total income tax provision/(benefit) for the nine months ended September 30, 2021 and September 30, 2020 was $3.4 million and $(2.5) million, respectively.

The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return. The Company has assessed its tax positions for all open tax years beginning with December 31, 2017 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes.

The Company utilizes the TRS to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests. Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.

Derivatives and Hedging Activities

In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives.  The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.

The Company recognizes all derivatives on the consolidated balance sheets at fair value.  The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized (gain)/loss on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash on the Company’s consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.

Per Share Data

The Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are each considered a participating security and the Company calculates basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock 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 outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, except when doing so would be anti-dilutive.

Reportable Segments

The Company has determined that it has four reportable segments based on how the chief operating decision maker reviews and manages the business. The four reporting segments are as follows:

•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.

•The commercial conduit business in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

See Note 15 - Segment Reporting for further information regarding the Company's segments.

Preferred Stock

The Company’s outstanding classes of preferred stock are classified outside of permanent equity in the consolidated balance sheets. Subject to certain conditions, the outstanding Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock is redeemable at the option of the holders of the Preferred Stock, outside of the control of the Company.

Series A Preferred Stock

The Series A Preferred Stock, ranks senior to the Common Stock, and on parity with all other outstanding classes of preferred stock of the Company (including the Series C and Series D Preferred Stock) with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series A Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series A Preferred Stock into Common Stock.

Dividends on the Series A Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share (subject to a 1.0% increase in the event of the ratings for the Series A Preferred Stock decreases below a certain threshold) and (ii) the dividends that would have been paid had such share of Series A Preferred Stock been converted into a share of Common Stock on the first day of such quarter, subject to proration in the event the share of Series A Preferred Stock is not outstanding for the full quarter. Dividends are paid in arrears.

Series C Preferred Stock

The Series C Preferred Stock ranks senior to the Common Stock and on parity with the Series D Preferred Stock with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series C Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series C Preferred Stock into the Common Stock.

Dividends on the Series C Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share and (ii) the dividends that would have been paid had such share of Series C Preferred Stock been converted into a share of common stock on the first day of such quarter, subject to proration in the event the share of Series C preferred stock is not outstanding for the full quarter. Dividends are paid in arrears. Dividends will accumulate and be cumulative from the most recent date to which dividends had been paid.

Each outstanding share of Series C Preferred Stock shall convert into 299.2 shares of common stock (the “Conversion Rate”), subject to anti-dilution adjustments described in the Articles Supplementary for the Series C Preferred Stock, on October 19, 2022 or, upon the election of the Company upon 10 days’ notice to the holders, on or after April 19, 2022.

In the event of the sale of all or substantially all of the business or assets of the Company (by sale, merger, consolidation or otherwise) or the acquisition by any person of more than 50% of the total economic interests or voting power of all securities of the Company (a “ Change of Control”), in each case prior to the automatic conversion dates set forth above, each holder of Series C Preferred Stock will have the right, prior to consummation of such transaction, to convert its Series C Preferred Stock into common stock at the Conversion Rate. In addition, in the event of a change of control (as defined in the Articles Supplementary of the Series C Preferred Stock) of the Advisor or a Change of Control that is not a "Liquidity Event" and that is related to the removal of the Advisor, both the Company and the holder shall have the right, prior to consummation of the transaction, to require the redemption of the Series C Preferred Stock for the liquidation preference. A "Liquidity Event" is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares of Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchanged for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system.

Holders of the Series C Preferred Stock (voting as a single class with holders of common stock) are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of common stock are entitled to vote. The number of votes applicable to a share of outstanding Series C Preferred Stock will be equal to the number of shares of common stock a share of Series C Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of common stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series C Preferred Stock, voting as a single class with other shares of parity preferred stock, is required to approve the issuance of any equity securities senior to the Series C Preferred Stock and to take certain actions materially adverse to the holders of the Series C Preferred Stock.

Series D Preferred Stock

The Series D Preferred Stock is on parity with the Series C Preferred Stock with respect to preference on liquidation and dividend rights. The terms of the Series D Preferred Stock are substantially the same as the terms of the Series C Preferred Stock, except that the holders of the Series D Preferred Stock have the option to accelerate the mandatory conversion date, which is October 19, 2022, to a date no earlier than April 19, 2022.

The complete terms of the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are set forth in the Articles Supplementary applicable to each class, which have been filed as exhibits to the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended.

Accounting Pronouncements Not Yet Adopted

On March 12, 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company has not adopted any of the optional expedients or exceptions through September 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

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Commercial Mortgage Loans

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Commercial Mortgage Loans

Commercial Mortgage Loans

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

	September 30, 2021		December 31, 2020
Senior loans	$	3,239,207	$	2,698,823
Mezzanine loans	23,938		15,911
Total gross carrying value of loans	3,263,145		2,714,734
Less: Allowance for credit losses (1)	15,499		20,886
Total commercial mortgage loans, held for investment, net	$	3,247,646	$	2,693,848

________________________

(1) As of September 30, 2021 and December 31, 2020, there have been no specific reserves for loans in non-performing status.

As of September 30, 2021 and December 31, 2020, the Company's total commercial mortgage loan portfolio, excluding commercial mortgage loans accounted for under the fair value option, was comprised of 150 and 130 loans, respectively.

Allowance for Credit Losses

The following table presents the activity in the Company's allowance for credit losses, excluding the unfunded loan commitments, as of September 30, 2021 (dollars in thousands):

	Three Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	7,389	$	103	$	1,028	$	199	$	440	$	7,715	$	241	$	77	$	17,192
Current Period:
Provision/(benefit) for credit losses	(1,278)		261		509		136		34		(1,286)		(89)		20		(1,693)
Write offs	—		—		—		—		—		—		—		—		—
Ending Balance	$	6,111	$	364	$	1,537	$	335	$	474	$	6,429	$	152	$	97	$	15,499

	Nine Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	3,095	$	404	$	1,575	$	3,795	$	132	$	11,646	$	117	$	122	$	20,886
Current Period:
Provision/(benefit) for credit losses	3,305		(40)		(38)		(3,460)		342		(5,217)		35		(25)		(5,098)
Write offs	(289)		—		—		—		—		—		—		—		(289)
Ending Balance	$	6,111	$	364	$	1,537	$	335	$	474	$	6,429	$	152	$	97	$	15,499

The Company recorded a decrease in its provision for credit losses during the three and nine months ended September 30, 2021 of $1.7 million and $5.1 million, respectively. The primary driver for the improvement in the reserve balance is the positive economic outlook since the end of the prior year.

The following table presents the activity in the Company's allowance for credit losses, for the unfunded loan commitments, as of September 30, 2021 (dollars in thousands):

	Three Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	120	$	—	$	28	$	10	$	8	$	65	$	—	$	—	$	231
Current Period:
Provision/(benefit) for credit losses	67		1		15		3		3		(9)		—		—		80
Ending Balance	$	187	$	1	$	43	$	13	$	11	$	56	$	—	$	—	$	311

    

	Nine Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	85	$	—	$	47	$	418	$	14	$	101	$	—	$	—	$	665
Current Period:
Provision/(benefit) for credit losses	102		1		(4)		(405)		(3)		(45)		—		—		(354)
Ending Balance	$	187	$	1	$	43	$	13	$	11	$	56	$	—	$	—	$	311

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):

	September 30, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	1,856,441	56.7	%	$	1,202,694	44.2	%
Office	527,371		16.1	%	517,464		19.0	%
Hospitality	445,770		13.6	%	403,908		14.8	%
Mixed Use	133,644		4.1	%	102,756		3.8	%
Industrial	125,120		3.8	%	243,404		8.9	%
Retail	75,961		2.3	%	78,550		2.9	%
Self Storage	56,495		1.7	%	86,424		3.2	%
Manufactured Housing	36,225		1.2	%	71,263		2.6	%
Land	16,400		0.5	%	16,400		0.6	%
Total	$	3,273,427	100.0	%	$	2,722,863	100.0	%

	September 30, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Southeast	$	1,030,591	31.5	%	$	796,908	29.3	%
Southwest	1,027,246		31.4	%	515,392		18.9	%
Mideast	431,104		13.2	%	473,514		17.4	%
Far West	368,565		11.3	%	415,173		15.2	%
Great Lakes	134,591		4.1	%	199,203		7.3	%
Plains	94,292		2.9	%	116,143		4.3	%
Various	70,118		2.1	%	136,855		5.0	%
New England	68,169		2.0	%	69,675		2.6	%
Rocky Mountain	48,751		1.5	%	—		—	%
Total	$	3,273,427	100.0	%	$	2,722,863	100.0	%

As of September 30, 2021 and December 31, 2020, the Company's total commercial mortgage loans, held for sale, measured at fair value were comprised of one and three loans, respectively. As of September 30, 2021 and December 31, 2020, the contractual principal outstanding of commercial mortgage loans, held for sale, measured at fair value was $0.1 million and $67.6 million, respectively. As of September 30, 2021 and December 31, 2020, none of the Company's commercial mortgage loans, held for sale, measured at fair value were in default or greater than ninety days past due.

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for sale, measured at fair value (dollars in thousands):

	September 30, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	100	100.0	%	$	100	0.1	%
Industrial	—		—	%	67,550		99.9	%
Total	$	100	100.0	%	$	67,650	100.0	%

	September 30, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Great Lakes	$	100	100.0	%	$	9,150	13.5	%
Far West	—		—	%	58,500		86.5	%
Total	$	100	100.0	%	$	67,650	100.0	%

Loan Credit Quality and Vintage

The following tables present the amortized cost of our commercial mortgage loans, held for investment as of September 30, 2021 and December 31, 2020, by loan type, the Company’s internal risk rating and year of origination. The risk ratings are updated as of September 30, 2021.

As of September 30, 2021
	2021		2020		2019		2018		2017		2016		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	1,059,072	$	505,437	$	116,286	$	128,581	$	—	$	—	$	3,487	$	1,812,863
3-4 internal grade	—		—		—		37,025		—		—		—		37,025
Total Multifamily Loans	$	1,059,072	$	505,437	$	116,286	$	165,606	$	—	$	—	$	3,487	$	1,849,888
Retail:
Risk Rating:
1-2 internal grade	$	—	$	13,344	$	20,162	$	16,400	$	—	$	—	$	—	$	49,906
3-4 internal grade	—		—		12,884		29,445		—		—		—		42,329
Total Retail Loans	$	—	$	13,344	$	33,046	$	45,845	$	—	$	—	$	—	$	92,235
Office:
Risk Rating:
1-2 internal grade	$	55,283	$	253,254	$	131,380	$	36,584	$	26,549	$	—	$	—	$	503,050
3-4 internal grade	—		—		—		22,685		—		—		—		22,685
Total Office Loans	$	55,283	$	253,254	$	131,380	$	59,269	$	26,549	$	—	$	—	$	525,735
Industrial:
Risk Rating:
1-2 internal grade	$	—	$	46,033	$	78,833	$	—	$	—	$	—	$	—	$	124,866
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	—	$	46,033	$	78,833	$	—	$	—	$	—	$	—	$	124,866
Mixed Use:
Risk Rating:

1-2 internal grade	$	32,378	$	30,305	$	—	$	70,679	$	—	$	—	$	—	$	133,362
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	32,378	$	30,305	$	—	$	70,679	$	—	$	—	$	—	$	133,362
Hospitality:
Risk Rating:
1-2 internal grade	$	136,726	$	26,910	$	10,564	$	—	$	—	$	—	$	—	$	174,200
3-4 internal grade	—		—		137,534		52,786		80,140		—		—		270,460
Total Hospitality Loans	$	136,726	$	26,910	$	148,098	$	52,786	$	80,140	$	—	$	—	$	444,660
Self-Storage:
Risk Rating:
1-2 internal grade	$	14,939	$	41,362	$	—	$	—	$	—	$	—	$	—	$	56,301
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	14,939	$	41,362	$	—	$	—	$	—	$	—	$	—	$	56,301
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	—	$	25,936	$	10,162	$	—	$	—	$	—	$	—	$	36,098
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	—	$	25,936	$	10,162	$	—	$	—	$	—	$	—	$	36,098
Total	$	1,298,398	$	942,581	$	517,805	$	394,185	$	106,689	$	—	$	3,487	$	3,263,145

December 31, 2020
	2020		2019		2018		2017		2016		2015		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	583,550	$	349,588	$	188,975	$	—	$	—	$	—	$	3,488	$	1,125,601
3-4 internal grade	—		—		35,887		37,812		—		—		—		73,699
Total Multifamily Loans	$	583,550	$	349,588	$	224,862	$	37,812	$	—	$	—	$	3,488	$	1,199,300
Retail:
Risk Rating:
1-2 internal grade	$	13,277	$	22,760	$	16,400	$	—	$	—	$	—	$	—	$	52,437
3-4 internal grade	—		12,872		29,425		—		—		—		—		42,297
Total Retail Loans	$	13,277	$	35,632	$	45,825	$	—	$	—	$	—	$	—	$	94,734
Office:
Risk Rating:
1-2 internal grade	$	244,301	$	160,709	$	61,169	$	40,846	$	—	$	—	$	—	$	507,025
3-4 internal grade	—		—		—		8,392		—		—		—		8,392
Total Office Loans	$	244,301	$	160,709	$	61,169	$	49,238	$	—	$	—	$	—	$	515,417
Industrial:
Risk Rating:

1-2 internal grade	$	119,193	$	89,590	$	—	$	—	$	—	$	33,655	$	—	$	242,438
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	119,193	$	89,590	$	—	$	—	$	—	$	33,655	$	—	$	242,438
Mixed Use:
Risk Rating:
1-2 internal grade	$	30,246	$	—	$	59,451	$	12,839	$	—	$	—	$	—	$	102,536
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	30,246	$	—	$	59,451	$	12,839	$	—	$	—	$	—	$	102,536
Hospitality:
Risk Rating:
1-2 internal grade	$	26,878	$	10,547	$	—	$	—	$	—	$	—	$	—	$	37,425
3-4 internal grade	—		160,079		115,026		90,612		—		—		—		365,717
Total Hospitality Loans	$	26,878	$	170,626	$	115,026	$	90,612	$	—	$	—	$	—	$	403,142
Self-Storage:
Risk Rating:
1-2 internal grade	$	41,305	$	—	$	44,908	$	—	$	—	$	—	$	—	$	86,213
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	41,305	$	—	$	44,908	$	—	$	—	$	—	$	—	$	86,213
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	25,905	$	45,049	$	—	$	—	$	—	$	—	$	—	$	70,954
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	25,905	$	45,049	$	—	$	—	$	—	$	—	$	—	$	70,954
Total	$	1,084,655	$	851,194	$	551,241	$	190,501	$	—	$	33,655	$	3,488	$	2,714,734

Past Due Status

The following table presents an aging summary of the loans amortized cost basis at September 30, 2021 (dollars in thousands):

	Multifamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Status:
Current	$	1,849,888	$	92,235	$	525,735	$	124,866	$	133,362	$	387,585	$	56,301	$	36,098	$	3,206,070
1-29 days past due	—		—		—		—		—		—				—		—
30-59 days past due	—		—		—		—		—		—		—		—		—
60-89 days past due	—		—		—		—		—		—		—		—		—
90-119 days past due	—		—		—		—		—		—		—		—		—
120+ days past due (1)	—		—		—		—		—		57,075		—		—		57,075
Total	$	1,849,888	$	92,235	$	525,735	$	124,866	$	133,362	$	444,660	$	56,301	$	36,098	$	3,263,145

________________________

(1) For the three and nine months ended September 30, 2021, there was no interest income recognized on this loan.

As of September 30, 2021 and December 31, 2020, the Company had one loan with a total cost basis of $57.1 million and two loans with a total cost basis of $94.9 million, respectively, on non-accrual status for which there was no related allowance for credit losses.

Credit Characteristics

As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

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

All commercial mortgage loans, excluding loans classified as commercial mortgage loans, held for sale, measured at fair value within the consolidated balance sheets, are assigned an initial risk rating of 2.0. As of September 30, 2021 the weighted average risk rating of the loans was 2.1. As of December 31, 2020, the weighted average risk rating of the loans was 2.2.

The following table represents the allocation by risk rating for the Company's commercial mortgage loans, held for investment (dollars in thousands):

September 30, 2021				December 31, 2020
Risk Rating	Number of Loans	Par Value		Risk Rating	Number of Loans	Par Value
1	—	$	—	1	—	$	—
2	130	2,900,711		2	104	2,232,045
3	19	315,641		3	22	384,040
4	1	57,075		4	4	106,778
5	—	—		5	—	—
	150	$	3,273,427		130	$	2,722,863

For the nine months ended September 30, 2021 and year ended December 31, 2020, the activity in the Company's commercial mortgage loans, held for investment portfolio was as follows (dollars in thousands):

	Nine Months Ended September 30,		Year Ended December 31,
	2021		2020
Balance at Beginning of Year	$	2,693,848	$	2,762,042
Cumulative-effect adjustment upon adoption of ASU 2016-13	—		(7,211)
Acquisitions and originations	1,395,556		1,287,720
Principal repayments	(769,103)		(1,223,490)
Discount accretion/premium amortization	4,421		6,146
Loans transferred from/(to) commercial real estate loans, held for sale	(38,161)		(76,979)
Net fees capitalized into carrying value of loans	(6,779)		(6,562)
(Provision)/benefit for credit losses	5,098		(13,181)
Charge-off from allowance	289		427
Transfer to real estate owned	(37,523)		(35,064)
Balance at End of Period	$	3,247,646	$	2,693,848

During the nine months ended September 30, 2021, the Company wrote off a commercial mortgage loan, held for investment, with a carrying value of $37.8 million in exchange for the possession of a REO investment at a fair value of $37.5 million, comprised of $33.0 million of real property (land, building and improvements) and $4.5 million of personal property (furniture, fixture, and equipment) at the time of transfer. The transfer occurred when the Company took possession of the property by completing a foreclosure transaction in January 2021, resulting in a $0.3 million impairment loss at the time of transfer. Since the foreclosure was entered into due to the borrower experiencing financial difficulty and the recorded investment in the receivable was more than the fair value of the collateral collected, the transaction qualifies as a TDR. The Company accounted for the REO acquired during the nine months ended September 30, 2021 as an asset acquisition. The Company subsequently sold this REO asset during the nine months ended September 30, 2021 for a $0.8 million gain, presented net of direct selling costs associated with the disposition of the asset, included within Realized gain/loss on sale of real estate owned assets, held for sale in the Company's consolidated statements of operations.

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Real Estate Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Real Estate Securities

Real Estate Securities

As of September 30, 2021 the Company did not hold any real estate securities, CMBS. The following is a summary of the Company's real estate securities, CMBS, as of December 31, 2020 (dollars in thousands):

December 31, 2020
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	3.0%	5/15/2022	$13,250	$12,657
CMBS 2	2.2%	6/26/2025	10,800	10,335
CMBS 3	2.5%	2/15/2036	40,000	38,292
CMBS 4	1.9%	6/15/2037	8,000	7,892
CMBS 5	2.1%	9/15/2037	24,000	23,297
CMBS 6	2.3%	6/15/2034	12,000	11,580
CMBS 7	1.5%	12/15/2036	20,000	18,975
CMBS 8	1.8%	12/15/2036	25,000	23,268
CMBS 9	2.3%	3/15/2035	25,665	24,840

The Company classified its CMBS investments as available for sale and reported them at fair value in the consolidated balance sheets with changes in fair value recorded in accumulated other comprehensive income/(loss) as of December 31, 2020. The weighted average contractual maturity for CLO investments included within the CMBS portfolio as of December 31, 2020 was 14 years. The weighted average contractual maturity for single asset single borrower "SASB" investments as of December 31, 2020 was 14 years.

The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CMBS investments by investment type as of December 31, 2020 (dollars in thousands):

	Amortized Cost		Credit Loss Allowance		Unrealized Gain		Unrealized Loss		Fair Value
December 31, 2020
CLOs	$	123,444	$	—	$	—	$	(4,888)	$	118,556
SASB	55,948		—		—		(3,368)		52,580
Total	$	179,392	$	—	$	—	$	(8,256)	$	171,136

As of December 31, 2020, the Company held 9 CMBS positions with an amortized cost basis of $179.4 million and an unrealized loss of $8.3 million, of which 7 positions had an unrealized loss for a period greater than twelve months. As of September 30, 2021 the Company did not hold any real estate securities, CMBS.

The following table provides information on the unrealized losses and fair value on the Company's real estate securities, CMBS, available for sale that were in an unrealized loss position, and for which an allowance for credit losses has not been recorded, in each case as of December 31, 2020 (amounts in thousands):

	Fair Value				Unrealized Loss
	Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months		Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months
December 31, 2020
CLOs	$	63,131	$	55,425	$	(2,824)	$	(2,065)
SASB	—		52,580		—		(3,367)
Total	$	63,131	$	108,005	$	(2,824)	$	(5,432)

As of September 30, 2021 the Company did not hold any real estate securities, CMBS. As of December 31, 2020, there were 7 securities with unrealized losses for a period greater than twelve months reflected in the table above. After evaluating the securities, the Company concluded that the unrealized losses reflected above were noncredit-related and would be recovered from the securities’ estimated future cash flows. The Company considered a number of factors in reaching this conclusion, including that the Company did not intend to sell the securities, it was not considered more likely than not that we would be forced to sell the securities prior to recovering our amortized cost, the portfolio is made up of investment grade securities of recent originations and higher tranches, and that there were no material credit events that would have caused us to otherwise conclude that the Company would not recover our cost. The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the original cash flows expected to be collected to the revised cash flows expected to be collected discounted using the effective interest rate, limited by the amount that the fair value is less than the amortized cost basis. Significant judgment is used in projecting cash flows. As a result, actual income and/or credit losses could be materially different from what is currently projected and/or reported.

The following table provides information on the amounts of gain/(loss) on the Company's real estate securities, CMBS, available for sale (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Unrealized gain/(loss) on available for sale securities	$	—	$	4,199	$	1,665	$	(9,380)
Reclassification of net (gain)/loss on available for sale securities included in net income	—		14,457		6,591		748
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	$	—	$	18,656	$	8,256	$	(8,632)

The amounts reclassified for net (gain)/loss on available for sale securities are included in the realized (gain)/loss on sale of real estate securities in the Company's consolidated statements of operations. The Company's unrealized gain/(loss) on available for sale securities is net of tax. Due to the Company's designation as a REIT, there was no tax impact on unrealized gain/(loss) on available for sale securities.

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Real Estate Owned

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Real Estate Owned

Real Estate Owned

The following table summarizes the Company's real estate owned asset as of September 30, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Site Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
September 2021 (1)	Industrial	Jeffersonville, GA	$	3,436	$	87,187	$	—	$	—	$	90,623
			$	3,436	$	87,187	$	—	$	—	$	90,623

________________________

(1) See Note 2 - Summary of Significant Accounting Policies.

The following table summarizes the Company's real estate owned asset as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Site Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
October 2019 (1)	Office	Jeffersonville, IN	$	1,887	$	21,989	$	3,565	$	(931)	$	26,510
			$	1,887	$	21,989	$	3,565	$	(931)	$	26,510

________________________

(1) See Note 2 - Summary of Significant Accounting Policies.

Depreciation expense for the nine months ended September 30, 2021 totaled $0.4 million. There was no depreciation expense for the three months ended September 30, 2021. Depreciation expense for the three and nine months ended September 30, 2020 totaled $0.3 million and $0.8 million, respectively.

During the nine months ended September 30, 2021, the Company sold the real estate owned asset in Jeffersonville, IN to a third party, resulting in a $8.6 million gain recognized within Realized gain/loss on sale of real estate owned assets, held for sale in the consolidated statements of operations.

In August 2021 the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the "Jeffersonville JV") to acquire a $139.5 million triple net lease property in Jeffersonville, GA. The Company has a 79% interest in the Jeffersonville JV, while the affiliate has a 21% interest. The Company invested a total of $109.8 million, made up of $88.7 million in debt and $21.1 million in equity, representing 79% of the ownership interest in the Jeffersonville JV. The affiliate made up the remaining $29.8 million composed of a $24.0 million mortgage note payable and $5.7 million in equity. The Company has control of Jeffersonville JV with 79% ownership and, therefore, consolidates Jeffersonville JV on its consolidated balance sheet. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).

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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

Leases

Intangible Lease Asset

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of September 30, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
September 2021	Industrial	Jeffersonville, GA	$	49,192	$	—	$	49,192
			$	49,192	$	—	$	49,192

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
October 2019	Office	Jeffersonville, IN	$	14,509	$	(963)	$	13,546
			$	14,509	$	(963)	$	13,546

Rental Income

On September 17, 2021, the Company, through a joint venture, purchased an industrial facility that is subject to an existing triple net lease. The minimum rental amount due under the lease is subject to annual increases of 2.0%. The initial term of the lease expires in 2038 and contains renewal options for four consecutive five-year terms. The remaining lease term is 17.1 years. Rental income for this lease for the three and nine months ended September 30, 2021 totaled $0.3 million. Rental income is included in Revenue from real estate owned in the consolidated statements of operations.

On October 15, 2019, the Company purchased an office building that was subject to an existing triple net lease. The minimum rental amount due under the lease was subject to annual increases of 1.5%. The initial term of the lease expires in 2037 and contained renewal options for four consecutive five-year terms. The Company sold the real estate owned asset during the three months ended September 30, 2021 (see Note 5 - Real Estate Owned). Rental income for this lease for each of the three and nine months ended September 30, 2021 and September 30, 2020 totaled $0.7 million and $2.1 million, respectively. Rental income is included in Revenue from real estate owned in the consolidated statements of operations.

The following table summarizes the Company's schedule of future minimum rents to be received under the industrial facility lease (dollars in thousands):

Minimum Rents	September 30, 2021
2021 (October - December)	$	1,953
2022	7,889
2023	8,046
2024	8,207
2025	8,372
2026 and beyond	123,520
Total minimum rent	$	157,987

Amortization Expense

Intangible lease assets are amortized using the straight-line method over the contractual life of the lease, of a period up to 20 years. The weighted average life of the intangible asset as of September 30, 2021 is approximately 17.1 years. There had been no amortization expense for the three months ended September 30, 2021. Amortization expense for the nine months ended September 30, 2021 totaled $0.4 million. Amortization expense for the three and nine months ended September 30, 2020 totaled $0.2 million and $0.6 million, respectively.

The following table summarizes the Company's expected amortization for intangible assets over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):

Amortization Expense	September 30, 2021
2021 (October - December)	$	(723)
2022	(2,894)
2023	(2,894)
2024	(2,894)
2025	(2,894)

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Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

Debt

Repurchase Agreements - Commercial Mortgage Loans

The Company has entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").

The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.

The details of the Company's Repo Facilities at September 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

As of September 30, 2021
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility	$	400,000	$	114,584	$	2,821	2.14	%	10/6/2022
CS Repo Facility (2)	200,000		61,788		2,432		2.95	%	8/11/2022
WF Repo Facility (3)	175,000		102,368		924		1.75	%	11/22/2021
Barclays Revolver Facility (4)	100,000		75,000		223		8.25	%	9/20/2023
Barclays Repo Facility (5)	300,000		196,416		1,512		1.75	%	3/15/2022
Total	$	1,175,000	$	550,156	$	7,912

________________________

(1) For the nine months ended September 30, 2021. Includes amortization of deferred financing costs.

(2) On August 12, 2021, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 11, 2022. Additionally, on November 3, 2021 the committed financing amount was amended from $200 million to $300 million with the option to upsize to $400 million at the Company's discretion.

(3) There are two more one-year extension options available at the Company's discretion. On October 15, 2021 the committed financing amount was upsized from $175 million to $275 million.

(4) On September 8, 2021, the Company amended the maturity date to September 20, 2023. There is one one-year extension option available at the Company's discretion.

(5) There are two one-year extension options available at the Company's discretion.

As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility (2)	$	300,000	$	113,884	$	5,020	2.54	%	10/6/2022
USB Repo Facility (3)	100,000		5,775		599		2.40	%	6/15/2021
CS Repo Facility (4)	200,000		106,971		3,539		2.84	%	8/19/2021
WF Repo Facility (5)	175,000		27,150		1,041		2.50	%	11/21/2021
Barclays Revolver Facility (6)	100,000		—		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.

(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.

(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.

(6) There is one one-year extension option available at the Company's discretion.

(7) Includes two one-year extensions at the Company's option.

The Company expects to use the advances from the Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.

The Repo Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. As of September 30, 2021 and December 31, 2020, the Company is in compliance with all debt covenants.

Other financing and loan participation - Commercial Mortgage Loans

On March 23, 2020, the Company transferred $15.2 million of its interest in a term loan to Sterling National Bank ("SNB") via a participation agreement. Since inception, the Company's outstanding loan increased as a result of future fundings, leading to an increase in amount outstanding via the participation agreement. The Company incurred $0.2 million and $0.7 million of interest expense on the SNB term loan for the three and nine months ended September 30, 2021. As of September 30, 2021 the outstanding participation balance was $37.4 million. The loan matures on February 9, 2023.

Mortgage Note Payable

On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of September 30, 2021 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $0.3 million and $0.9 million of interest expense for the three and nine months ended September 30, 2021. As of September 30, 2021 the loan has been assumed by the purchaser of the underlying asset and is no longer held by the Company (see Note 5 - Real Estate Owned).

On September 17, 2021, the Company, in connection with the consolidating joint venture (as discussed in Note 5 - Real Estate Owned), originated a $112.7 million mortgage note payable, of which $88.7 million is eliminated in consolidation (see Note 5 - Real Estate Owned). The remaining mortgage note payable of $24.0 million is disclosed on the consolidated balance sheet. As of September 30, 2021, the loan accrued interest at an annual rate of 3.1% and matures on October 9, 2024.

Unsecured Debt

Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million and $1.2 million of interest expense on the lending agreement with SBL for the three and nine months ended September 30, 2021. As of September 30, 2021, the outstanding balance was $60.0 million.

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 30-90 days and terms are adjusted for current market rates as necessary.

Below is a summary of the Company's MRAs as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Interest Expense		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of September 30, 2021
JP Morgan Securities LLC	$	18,980	$	205	$	24,105	1.14	%	1
Goldman Sachs International	—		37		—		N/A		N/A
Barclays Capital Inc.	27,551		467		36,162		1.28	%	50
Citigroup Global Markets, Inc.	—		81		—		N/A		N/A
Total/Weighted Average	$	46,531	$	790	$	60,267	1.22	%	30
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	—		1,057		—		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	—		905		—		N/A		N/A
Citigroup Global Markets, Inc.	53,788		2,532		71,723		1.70	%	29
Total/Weighted Average	$	186,828	$	8,719	$	243,373	1.71	%	33

________________________

(1) Includes $60.3 million and $72.2 million of CLO notes, held by the Company, which are eliminated within the real estate securities, at fair value line in the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

Collateralized Loan Obligations

As of September 30, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 15 and 27 mortgage assets having a principal balance of $230.2 million and $417.9 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.

As of September 30, 2021 and December 31, 2020 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 41 and 59 mortgage assets having a principal balance of $619.6 million and $852.1 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October 12, 2018, between the Company and BSPRT 2018-FL4 Issuer.

As of September 30, 2021 and December 31, 2020, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 56 and 54 mortgage assets having a principal balance of $754.5 million and $799.8 million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer.

On March 25, 2021, BSPRT 2021-FL6 Issuer, Ltd. (the “Issuer”) and BSPRT 2021-FL6 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company entered into an indenture with the OP, as advancing agent and U.S. Bank National Association, as note administrator and trustee, which governs the issuance of approximately $645.8 million principal balance secured floating rate notes (the “Notes”), of which $573.1 million were purchased by third party investors and $72.6 million were purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 54,250 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 September 30, 2021, the notes issued by BSPRT 2021-FL6 Issuer, Ltd. and BSPRT 2021-FL6 Co-Issuer, LLC, are collateralized by interests in a pool of 49 mortgage assets having a principal balance of $699.2 million (the "2021-FL6 Mortgage Assets"). The sale of the 2021-FL6 Mortgage Assets to BSPRT 2021-FL6 Issuer, Ltd. is governed by a Collateral Interest Purchase Agreement dated as of March 25, 2021, between the Company and BSPRT 2021-FL6 Issuer, Ltd.

The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of the above CLOs of approximately $311.2 million and $256.9 million as of September 30, 2021 and December 31, 2020, respectively. The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer, 2019-FL5 Issuer and 2021-FL6 Issuer (the "CLOs), respectively, as of September 30, 2021 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	—	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		65,176		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		185,596		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2018-FL4 Issuer	Tranche E	28,223		28,223		1M LIBOR + 305	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		369,761		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,374		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
2021-FL6 Issuer	Tranche A	367,500		367,500		1M LIBOR + 110	3/15/2036
2021-FL6 Issuer	Tranche A-S	86,625		86,625		1M LIBOR + 130	3/15/2036
2021-FL6 Issuer	Tranche B	33,250		33,250		1M LIBOR + 160	3/15/2036
2021-FL6 Issuer	Tranche C	41,125		41,125		1M LIBOR + 205	3/15/2036
2021-FL6 Issuer	Tranche D	44,625		44,625		1M LIBOR + 300	3/15/2036
2021-FL6 Issuer	Tranche E	11,375		11,375		1M LIBOR + 350	3/15/2036
		$	2,437,924	$	1,809,280

________________________

(1) Excludes $300.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line in the consolidated balance sheets as of September 30, 2021.

The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer and 2019-FL5 Issuer, as of December 31, 2020 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	161,745	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		77,775		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		416,659		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		407,025		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,373		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
		$	1,825,201	$	1,639,227

________________________

(1) Excludes $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line in the consolidated balance sheets as of December 31, 2020.

The below table reflects the total assets and liabilities of the Company's outstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of September 30, 2021 and December 31, 2020 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs 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 VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. The VIE's are non-recourse to the Company.

Assets (dollars in thousands)	September 30, 2021		December 31, 2020
Cash (1)	$	123,940	$	99,025
Commercial mortgage loans, held for investment, net (2)	2,288,676		2,044,956
Accrued interest receivable	5,540		5,626
Total Assets	$	2,418,156	$	2,149,607
Liabilities
Notes payable (3)(4)	$	2,092,498	$	1,892,616
Accrued interest payable	1,220		1,240
Total Liabilities	$	2,093,718	$	1,893,856

________________________

(1) Includes $123.3 million and $98.6 million of cash held by the servicer related to CLO loan payoffs as of September 30, 2021 and December 31, 2020, respectively.

(2) The balance is presented net of allowance for credit losses of $8.7 million and $19.4 million as of September 30, 2021 and December 31, 2020, respectively.

(3) Includes $300.1 million and $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line of the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

(4) The balance is presented net of deferred financing cost and discount of $16.9 million and $13.7 million as of September 30, 2021 and December 31, 2020, respectively.

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Earnings Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The Company uses the two-class method in calculating basic and diluted earnings per share. Net income is allocated between our common stock and other participating securities based on their participation rights. Diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities. The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and September 30, 2020 (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
Numerator	2021		2020		2021		2020
Net income	$	38,495	$	21,497	$	98,651	$	21,911
Less: Preferred stock dividends	4,804		3,475		12,040		11,445
Less: Undistributed earnings allocated to preferred stock	4,201		1,283		10,706		—
Net income attributable to common stockholders (for basic and diluted earnings per share)	$	29,490	$	16,739	$	75,905	$	10,466
Denominator
Weighted-average common shares outstanding for basic earnings per share	44,185,241		44,405,196		44,245,733		44,348,282
Effect of dilutive shares:
Unvested restricted shares	15,323		15,888		15,737		13,457
Weighted-average common shares outstanding for diluted earnings per share	44,200,564		44,421,084		44,261,470		44,361,739
Basic earnings per share	$	0.67	$	0.38	$	1.72	$	0.24
Diluted earnings per share	$	0.67	$	0.38	$	1.71	$	0.24

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Stock Transactions

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stock Transactions

Stock Transactions

As of September 30, 2021 and December 31, 2020, the Company had 44,162,657 and 44,510,051 shares of common stock outstanding, respectively, including shares issued pursuant to the Company's distribution reinvestment plan (the "DRIP") and unvested restricted shares.

As of September 30, 2021 and December 31, 2020, the Company had 25,567 and 40,515 shares of Series A Preferred Stock outstanding, respectively and 1,400 shares of Series C Preferred Stock outstanding. Additionally, as of September 30, 2021 the Company had 17,950 shares of Series D Preferred Stock outstanding.

On March 15, 2021, the Company and SBL entered into an agreement pursuant to which SBL agreed to (i) exchange the 14,949 shares of the Series A Preferred Stock it held for an equal amount of Series D Preferred Stock and (ii) purchase from the Company an additional 3,000 newly issued shares of Series D Preferred Stock for $15.0 million (with the proceeds reduced by the accrued and unpaid dividends on the exchanged Series A Preferred Stock). The transaction settled on March 18, 2021.

The following tables present the activity in the Company's Series A Preferred Stock for the period ended September 30, 2021 and September 30, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	40,515	$	202,292
Exchanged for Series D Preferred Stock	(14,950)	(74,748)
Dividends paid in Preferred Stock	2	5
Offering costs	—	(14)
Amortization of offering costs	—	68
Ending Balance, September 30, 2021	25,567	$	127,603
	Shares	Amount
Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	1	4
Offering costs	—	(9)
Amortization of offering costs	—	71
Ending Balance, September 30, 2020	40,515	$	202,280

The following tables present the activity in the Company's Series C Preferred Stock for the period ended September 30, 2021 and September 30, 2020 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	1,400	$	6,962
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	—
Amortization of offering costs	—	7
Ending Balance, September 30, 2021	1,400	$	6,969

	Shares	Amount
Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	(11)
Amortization of offering costs	—	6
Ending Balance, September 30, 2020	1,400	$	6,961

The following table presents the activity in the Company's Series D Preferred Stock for the period ended September 30, 2021 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	—	$	—
Issuance of Preferred Stock	17,950	89,748
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(83)
Amortization of offering costs	—	12
Ending Balance, September 30, 2021	17,950	$	89,677

As of September 30, 2020 the Company did not have any Series D Preferred Stock outstanding.

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. Distribution payments are dependent on the availability of funds. The Company's board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.

In April 2020, the Company’s board of directors unanimously approved a transition in the timing of the dividend payments to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly payment and accrual basis. The first quarterly dividend was the second quarter 2020 dividend payable in July 2020. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.

The monthly distributions for the first quarter of 2020 were paid at a daily rate equivalent to $1.44 per annum, per share of common stock. Starting with the second quarter 2020 distribution, the 2020 quarterly distributions were paid at a quarterly rate of $0.275 per share of common stock (equivalent to $1.10 per annum). In September 2021, the Company's board of directors declared the following third quarter 2021 dividends: (i) a quarterly cash dividend of $0.355 per share (equivalent to $1.42 per annum), an increase of $0.08 per share compared to the second quarter of 2021, which was paid in October 2021 to holders of record on September 30, 2021, and (ii) a third quarter dividend of $106.22 per share on the Company’s Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, which was paid in October 2021 to holders of record on September 30, 2021. Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distribution payments are not assured. Dividends on the Company’s preferred stock, to the extent not declared by the board of directors quarterly, will accrue, and dividends may not be paid on the Company's common stock to the extent there are accrued and unpaid dividends on the Preferred Stock. The amount of dividends paid on the Company’s Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are generally in an amount equal to the dividends a holder of such preferred stock would have received if the preferred stock had been converted into common stock in accordance with its terms, except when the amount of common stock dividends are below the threshold stated in the terms of such preferred stock.

The Company distributed $36.5 million of common stock dividends during the nine months ended September 30, 2021, comprised of $31.4 million in cash and $5.1 million in shares of common stock issued under the DRIP. On June 28, 2021, the Company temporarily suspended the DRIP and as a result, DRIP participants, along with all other holders of the Company’s equity securities, received their second and third quarter 2021 Company dividends in cash. The DRIP was also temporarily suspended for the March 2020 dividend due to COVID-19 related valuation volatility, but was reactivated for the second quarter 2020 dividend. The Company distributed $33.3 million of common stock dividends during the nine months ended September 30, 2020, comprised of $27.1 million in cash and $6.2 million in shares of common stock issued under the DRIP.

As of September 30, 2021 and December 31, 2020, the Company had declared but unpaid common stock distributions of $15.7 million and $12.2 million, respectively. Additionally, as of September 30, 2021 and December 31, 2020, the Company had declared but unpaid Series A Preferred Stock distributions of $2.7 million and $3.3 million, respectively and $0.1 million and $0.1 million of declared but unpaid Series C Preferred stock distributions, respectively. Additionally, as of September 30, 2021 the Company had declared but unpaid Series D Preferred Stock distributions of $1.9 million. These amounts are included in Distributions payable on the Company’s consolidated balance sheets.

Share Repurchase Program

The Company's share repurchase program (the “SRP”) enabled stockholders to sell their shares to the Company for an amount equal to the lesser of (i) the Company’s most recent estimated per-share NAV, as approved by the Company’s board of directors from time to time, and (ii) the Company’s book value per share, computed in accordance with GAAP, 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 or in the case of requests for death or disability.

Repurchases pursuant to the SRP, when requested, were made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester were 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 was 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 Company's board of directors 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 were paid at the price, computed as described above on the last day of such fiscal semester. Repurchase requests were honored on a pro rata basis.

The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2021:

	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2020	8,094	4,121,735	$	19.88
January 1 - January 31, 2021(1)	1,355	525,580	17.53
February 1 - February 28, 2021	—	—	N/A
March 1 - March 31, 2021(1)	—	—	N/A
April 1 - April 30, 2021	—	—	N/A
May 1 - May 31, 2021(1)	—	—	N/A
June 1 - June 30, 2021	—	—	N/A
July 1 - July 31, 2021(2)	1,424	123,257	17.88
August 1 - August 31, 2021	—	—	N/A
September 1 - September 30, 2021(2)	—	—	N/A
Cumulative as of September 30, 2021	10,873	4,770,572	$	19.57

________________________

(1) Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2020, including 15,772 and 3,784 shares which for administrative reasons were processed in March 2021 and May 2021, respectively. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,881,556 shares were not fulfilled for the second semester of 2020.

(2) Reflects shares repurchased pursuant to repurchase requests submitted for the first semester of 2021, including 1,776 shares which for administrative reasons were processed in September 2021. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 761 shares were not fulfilled for the first semester of 2021.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of September 30, 2021 and December 31, 2020, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

Funding Expiration	September 30, 2021		December 31, 2020
2021	$	26,989	$	59,692
2022	41,917		91,420
2023	69,702		69,880
2024	265,295		7,700
2025 and beyond	25,501		—
	$	429,404	$	228,692

The borrowers are required to meet or maintain certain metrics in order to qualify for the unfunded commitment amounts.

Litigation and Regulatory Matters

The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, will have a material impact on the Company’s financial condition, operating results or cash flows.

Capstead Merger Litigation

Five lawsuits were filed by purported stockholders of Capstead with respect to the Capstead merger. The first suit, styled as Shiva Stein v. Capstead Mortgage Corporation, et al., No. 1:21-cv-7306 (the “Stein Lawsuit”), was filed in the United States District Court for the Southern District of New York on August 31, 2021, and asserts claims against Capstead, members of the Capstead board of directors (the “Capstead Board”) and the Company. The second suit, styled as Matthew Hopkins v. Capstead Mortgage Corporation, et al., No. 1:21-cv-07369 (the “Hopkins Lawsuit”), was filed in the United States District Court for the Southern District of New York on September 1, 2021, and asserts claims against Capstead, members of the Capstead Board, the Company and the Advisor. The third suit, styled as Bryan Harrington v. Capstead Mortgage Corporation, et al., No. 1:21-cv-05080 (the “Harrington Lawsuit”), was filed in the United States District Court for the Eastern District of New York on September 11, 2021, and asserts claims against Capstead and members of the Capstead Board. The fourth suit, styled as Randy Gill v. Capstead Mortgage Corporation, et al., No. 1:21-cv-07973 (the “Gill Lawsuit”), was filed in the United States District Court for the Southern District of New York on September 24, 2021, and asserts claims against Capstead and members of the Capstead Board. The fifth suit, styled as Jordan Wilson v. Capstead Mortgage Corporation, et al., No. 1:21-cv-08147-UA (the “Wilson Lawsuit”), was filed in the United States District Court for the Southern District of New York on October 1, 2021, and asserts claims against Capstead and members of the Capstead Board. Capstead also received demand letters from two purported stockholders, Brett Braafhart and Angelo Fisichella, threatening to assert claims against Capstead and members of the Capstead Board (such demand letters, together with the Stein Lawsuit, the Hopkins Lawsuit, the Harrington Lawsuit, the Gill Lawsuit and the Wilson Lawsuit, the “Lawsuits”).

Each of the Lawsuits alleges that certain of the disclosures in the Capstead proxy statement related to the merger were deficient, and sought preliminary and injunctive relief. While Capstead believed that the disclosures set forth in the proxy statement complied fully with applicable law, in order to address certain disclosure claims in the Lawsuits, minimize the cost, risk and uncertainty inherent in litigation, avoid nuisance and preclude any efforts to delay the completion of the merger, Capstead voluntarily supplemented the proxy statement with certain supplemental disclosures. The Company, as successor to Capstead in the merger, believes the claims asserted in the Lawsuits are without merit and expressly denies all allegations in the Lawsuits, including that any additional disclosure was or is required.

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Related Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions and Arrangements

Related Party Transactions and Arrangements

Advisory Agreement Fees and Reimbursements

Pursuant to the Advisory Agreement, the Company is required to make the following payments and reimbursements to the Advisor:

•The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company’s executive officers.

•The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' 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 (as defined in the Advisory Agreement) exceeds 6.0% per annum, our 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 our Advisor exceed 10.0% of the aggregate total return for such year.

•The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company‘s behalf 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.

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended September 30, 2021 and 2020 and the associated payable as of September 30, 2021 and December 31, 2020 (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2021		2020		2021		2020		September 30, 2021		December 31, 2020
Acquisition expenses (1)	$	690	$	166	$	1,012	$	483	$	—	$	—
Administrative services expenses	2,980		3,128		9,532		10,180		2,980		2,940
Asset management and subordinated performance fee	8,265		3,749		19,682		11,399		13,025		4,773
Other related party expenses (2)(3)	146		14		182		685		1,135		1,812
Total related party fees and reimbursements	$	12,081	$	7,057	$	30,408	$	22,747	$	17,140	$	9,525

________________________

(1) Total acquisition expenses paid during the three and nine months ended September 30, 2021 were $2.9 million and $7.5 million respectively, of which $2.2 million and $6.5 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets. Total acquisition expenses paid during the three and nine months ended September 30, 2020 were $2.2 million and $5.0 million respectively, of which $2.0 million and $4.5 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets.

(2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated statements of operations.

(3) As of September 30, 2021 and December 31, 2020 the related party payables include $1.1 million and $1.8 million of payments made by the Advisor to third party vendors on behalf of the Company.

The payables as of September 30, 2021 and December 31, 2020 in the table above are included in Due to affiliates on the Company's consolidated balance sheets.

Other Transactions

Pursuant to a lending and security agreement with SBL, which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.4 million and $1.2 million in interest expense on the lending agreement with SBL for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021 there was $60.0 million outstanding under the lending agreement.

SBL also holds 17,950 shares of the Company's outstanding shares of Series D Preferred Stock of which, 14,950 shares were acquired in exchange for an equivalent number of shares of Series A Preferred Stock in March 2021. SBL also acquired an additional 3,000 shares of Series D Preferred Stock at the liquidation preference of $15.0 million (net of accrued and unpaid dividends on the exchanged Series A Preferred Stock) in such transaction.

In August 2021 the Company and an affiliate of the Company entered into a joint venture agreement and formed a joint venture entity, Jeffersonville Member, LLC (the "Jeffersonville JV") to acquire a $139.5 million triple net lease property in Jeffersonville, GA. The Company has a 79% interest in the Jeffersonville JV, while the affiliate has a 21% interest. The Company invested a total of $109.8 million, made up of $88.7 million in debt and $21.1 million in equity, representing 79% of the ownership interest in the Jeffersonville JV. The affiliate made up the remaining $29.8 million composed of a $24.0 million mortgage note payable and $5.7 million in equity. The Company has control of Jeffersonville JV with 79% ownership and, therefore, consolidates Jeffersonville JV on its consolidated balance sheet. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 7 - Debt).

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

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

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

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

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

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

Financial Instruments Measured at Fair Value on a Recurring Basis

CMBS, recorded in real estate securities, available for sale, measured at fair value on the consolidated balance sheets are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities. 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 third party pricing for determining the fair value of each CMBS investments, resulting in a Level II classification.

Commercial mortgage loans, held for sale, measured at fair value in the Company's TRS are initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. Commercial mortgage loans, held for sale, measured at fair value that are originated in the last month of the reporting period are held and marked to the transaction proceeds. The Company classified the commercial mortgage loans, held for sale, measured at fair value as Level III.

Other real estate investments, measured at fair value on the consolidated balance sheets are valued using unobservable inputs. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments, including preferred equity investments, held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. The Company classified the other real estate investments, measured at fair value as Level III.

The fair value for Treasury note futures is derived using market prices. Treasury note futures trade on the Chicago Mercantile Exchange (“CME”). The instruments are a variety of recently issued 10-year U.S. Treasury notes. The future contracts are liquid and are centrally cleared through the CME. Treasury note futures are generally categorized in Level I of the fair value hierarchy.

The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. Valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy. The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy.

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 or liabilities. 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 material transfers between levels within the fair value hierarchy for the period ended September 30, 2021 and December 31, 2020.

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2021 and December 31, 2020 (dollars in thousands):

	Total		Level I		Level II		Level III
September 30, 2021
Assets, at fair value
Commercial mortgage loans, held for sale, measured at fair value	$	99	$	—	$	—	$	99
Other real estate investments, measured at fair value	2,547		—		—		2,547
Interest rate swaps	—		—		—		—
Total assets, at fair value	$	2,646	$	—	$	—	$	2,646
Liabilities, at fair value
Credit default swaps	$	—	$	—	$	—	$	—
Treasury note futures	—		—		—		—
Total liabilities, at fair value	$	—	$	—	$	—	$	—
December 31, 2020
Assets, at fair value
Real estate securities, available for sale, measured at fair value	$	171,136	$	—	$	171,136	$	—
Commercial mortgage loans, held for sale, measured at fair value	67,649		—		—		67,649
Other real estate investments, measured at fair value	2,522		—		—		2,522
Interest rate swaps	25		—		25		—
Total assets, at fair value	$	241,332	$	—	$	171,161	$	70,171
Liabilities, at fair value
Credit default swaps	$	297	$	—	$	297	$	—
Treasury note futures	106		106		—		—
Total liabilities, at fair value	$	403	$	106	$	297	$	—

Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category. As a result, the unrealized gains and losses for assets and liabilities within the Level III category may include changes in fair value that were attributable to both observable and unobservable inputs. The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of September 30, 2021 and December 31, 2020 (dollars in thousands):

Asset Category	Fair Value		Valuation Methodologies	Unobservable Inputs (1)	Weighted Average (2)	Range
September 30, 2021
Commercial mortgage loans, held for sale, measured at fair value	$	99	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,547		Discounted Cash Flow	Yield	11.4%	10.4% - 12.4%
December 31, 2020
Commercial mortgage loans, held for sale, measured at fair value	$	67,649	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,522		Discounted Cash Flow	Yield	13.2%	12.2% - 14.2%

________________________

(1) In determining certain inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments.

(2) Inputs were weighted based on the fair value of the investments included in the range.

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 for which the Company has used Level III inputs to determine fair value (dollars in thousands):

	September 30, 2021
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2021	$	67,649	$	2,522
Transfers into Level III (2)	—		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loans, held for sale	22,211		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	—		27
Net accretion	—		(2)
Purchases	321,278		—
Sales / paydowns	(411,039)		—
Transfers out of Level III (2)	—		—
Ending Balance, September 30, 2021	$	99	$	2,547
	December 31, 2020
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2020	$	112,562	$	2,557
Transfers into Level III (2)	23,625		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loans, held for sale	15,931		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	(75)		(32)
Net accretion	—		(3)
Purchases(1)	267,552		—
Sales / paydowns (1)	(328,321)		—
Transfers out of Level III (2)	(23,625)		—
Ending Balance, December 31, 2020	$	67,649	$	2,522

(1) Excluded from Purchases and Sales/paydowns are $679.1 million and $682.0 million, respectively, of loans that collateralize a CMBS investment required to be consolidated in connection with the Company's retention of the B tranche during the year ended December 31, 2020. Upon disposition of the B tranche during the year ended December 31, 2020, the Company recognized a gain of $2.8 million that is recorded in Realized gain/loss on sale of real estate securities on the consolidated statements of operations.

(2) Transfers in and transfers out include transfers between Commercial mortgage loans, held for sale and Commercial mortgage loans, held for investment.

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, held for investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2021 and December 31, 2020 (dollars in thousands):

		Level	Carrying Amount (1)		Fair Value
September 30, 2021
Commercial mortgage loans, held for investment (1)	Asset	III	$	3,263,145	$	3,265,960
Collateralized loan obligations	Liability	III	1,792,353		1,811,509
Mortgage note payable	Liability	III	23,998		23,998
Other financing and loan participation - commercial mortgage loans	Liability	III	37,434		37,434
Unsecured debt	Liability	III	60,000		60,000
December 31, 2020
Commercial mortgage loans, held for investment (1)	Asset	III	$	2,714,734	$	2,724,039
Collateralized loan obligations	Liability	III	1,625,498		1,606,478
Mortgage note payable	Liability	III	29,167		29,167
Other financing and loan participation - commercial mortgage loans	Liability	III	31,379		31,379

________________________

(1) The carrying value is gross of $15.5 million and $20.9 million of allowance for credit losses as of September 30, 2021 and December 31, 2020, respectively.

The fair value of the commercial mortgage loans, held for investment is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company estimates the fair value of the collateralized loan obligations using external broker quotes. The fair value of the other financing and loan participation-commercial mortgage loans is generally estimated using a discounted cash flow analysis. At September 30, 2021, the Mortgage note payable and Unsecured debt was recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.

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Derivative Instruments

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company uses derivative instruments primarily to manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk.

As of September 30, 2021, the net premiums received on derivative instrument assets were $4.8 million.

The following derivative instruments were outstanding as of September 30, 2021 and December 31, 2020 (dollars in thousands):

			Fair Value
Contract type	Notional		Assets		Liabilities
September 30, 2021
Credit default swaps	$	—	$	—	$	—
Interest rate swaps	17,335		—		—
Treasury note futures	—		—		—
Total	$	17,335	$	—	$	—
December 31, 2020
Credit default swaps	$	46,000	$	—	$	297
Interest rate swaps	32,517		25		—
Treasury note futures	43,500		—		106
Total	$	122,017	$	25	$	403

The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the three and nine months ended September 30, 2021 and September 30, 2020:

	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss		Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	(111)	$	32	$	(289)	$	675
Interest rate swaps	(1,282)		1,692		22		414
Treasury note futures	(35)		145		(107)		(1,479)
Options	—		33		—		33
Total	$	(1,428)	$	1,902	$	(374)	$	(357)
	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss		Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	101	$	206	$	(433)	$	269
Interest rate swaps	(4,411)		4,516		323		7,462
Treasury note futures	—		—		735		5,284
Options	—		—		—		35
Total	$	(4,310)	$	4,722	$	625	$	13,050

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Offsetting Assets and Liabilities

9 Months Ended

Sep. 30, 2021

Offsetting [Abstract]

Offsetting Assets and Liabilities

Offsetting Assets and Liabilities

The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Amount of Assets Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
September 30, 2021
Derivative instruments, at fair value	$	—	$	—	$	—		$	—	$	—	$	—
December 31, 2020
Derivative instruments, at fair value	$	25	$	—	$	25		$	—	$	—	$	25

							Gross Amounts Not Offset on the Balance Sheet
Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
September 30, 2021
Repurchase agreements - commercial mortgage loans	$	550,156	$	—	$	550,156		$	858,613	$	5,015	$	—
Repurchase agreements - real estate securities	46,531		—		46,531			60,267		—		—
Derivative instruments, at fair value	—		—		—			—		3,886		—
December 31, 2020
Repurchase agreements - commercial mortgage loans	$	276,340	$	—	$	276,340		$	496,030	$	5,016	$	—
Repurchase agreements - real estate securities	186,828		—		186,828			245,956		1,146		—
Derivative instruments, at fair value	403		—		403			—		3,435		—

________________________

(1) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets.

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Segment Reporting

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company conducts its business through the following reporting segments:

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

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

•The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

The following table represents the Company's operations by segment for the three and nine months ended September 30, 2021 and September 30, 2020 (dollars in thousands):

Three Months Ended September 30, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	47,747	$	47,166	$	—	$	581	$	—
Revenue from Real Estate Owned	1,015		—		—		—		1,015
Interest expense	11,988		11,263		148		232		345
Net income	38,495		25,056		(148)		3,984		9,603
Total assets as of September 30, 2021	3,635,478		3,436,065		814		57,437		141,162
Three Months Ended September 30, 2020
Interest income	$	44,414	$	39,944	$	3,996	$	474	$	—
Revenue from Real Estate Owned	1,017		—		—		—		1,017
Interest expense	15,113		10,194		3,393		494		1,032
Net income	21,497		25,158		(3,797)		(162)		298
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519
Nine Months Ended September 30, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	138,969	$	135,945	$	461	$	2,563	$	—
Revenue from Real Estate Owned	2,447		—		—		—		2,447
Interest expense	35,994		34,887		720		812		1,014
Net income	98,651		74,745		(196)		13,434		10,667
Total assets as of September 30, 2021	3,635,478		3,436,065		814		57,437		141,162
Nine Months Ended September 30, 2020
Interest income	$	135,509	$	123,284	$	9,870	$	2,355	$	—
Revenue from Real Estate Owned	3,474		—		—		—		3,474
Interest expense	54,740		43,735		7,670		1,735		1,600
Net income	21,911		40,273		(7,947)		(8,290)		(2,125)
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519

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 originated during the year as the denominator and commercial mortgage loans, held for investment, net of allowance and commercial mortgage loans, held for sale, measured at fair value as numerator.

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Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q.

Reverse Stock Split and Stock Dividend

In accordance with the terms of the Merger Agreement (as defined below), on October 6, 2021, the Company filed Articles of Amendment to the Company’s Charter (the “Articles of Amendment”) with the State Department of Assessments and Taxation of Maryland (the “SDAT”) to effect (a) a Company name change and (b) a one-for-ten reverse stock split (the “Reverse Stock Split”). Pursuant to the Articles of Amendment, effective as of 9:00 a.m. eastern time on October 12, 2021, the Company’s name changed to “Franklin BSP Realty Trust, Inc.,” and effective as of the close of business on October 12, 2021, each outstanding share of the Company’s Common Stock, automatically combined into 1/10th of a share of Common Stock. Fractional shares that were created as a result of the Reverse Stock Split remained outstanding. As a result of the Reverse Stock Split, the number of outstanding shares of Common Stock of the Company as of the date of the Reverse Stock Split were reduced to approximately 4.5 million shares.

In addition, also on October 6, 2021 the Company filed Articles Supplementary (the “Articles Supplementary”) to the Company’s charter with the SDAT, with an effective date of October 12, 2021. The Articles Supplementary (a) reclassified 50,000,000 shares of authorized but unissued shares of Common Stock as preferred stock, $0.01 par value per share, as a result of which the Company is authorized to issue 900,000,000 shares of Common Stock and 100,000,000 shares of preferred stock under the charter, and (b) designated and classified 40,000,000 shares of preferred stock as a new series of Series F Preferred Stock, with the rights, preferences and obligations set forth in the Articles Supplementary.

Also in accordance with the terms of the Merger Agreement, on October 4, 2021, the Board declared a stock dividend (the “Stock Dividend”) on the outstanding shares of Common Stock, payable at a rate of nine shares of Series F Preferred Stock for each share of Common Stock issued and outstanding following the Reverse Stock Split on October 12, 2021. The record date used to determine the list of holders of Common Stock eligible to receive the Stock Dividend (following the Reverse Stock Split) was set by the Board as October 7, 2021. As a result of the Reverse Stock Split, holders of Common Stock collectively received 39,733,298 shares of Series F Preferred Stock.

The Reverse Stock Split and Stock Dividend resulted in each stockholder of Common Stock having the same economic value of equity securities in the Company as such holder did prior to the Reverse Stock Split and Stock Dividend, except that each such holder now has 10% of their holdings in Common Stock and 90% of their holdings in Series F Preferred Stock. Each share (or fractional share) of Series F Preferred Stock will automatically convert into one share of Common Stock (or equivalent fractional share, as applicable) on April 19, 2022.

Interim Common Stock Dividend

On October 11, 2021, the Company’s board of directors declared an interim fourth quarter of 2021 dividend on the Common Stock and Series F Preferred Stock of $0.07 per share. The board of directors also declared an interim fourth quarter of 2021 dividend of $20.94 per share on the Company’s Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock convertible preferred stock. The dividends were paid on or about October 18, 2021 to stockholders of record as of October 13, 2021.

Merger with Capstead Mortgage Corporation

On October 19, 2021 (the “Closing Date”), the Company consummated the transactions contemplated by that certain Agreement and Plan of Merger, dated as of July 25, 2021, as amended pursuant to that certain First Amendment to Agreement and Plan of Merger, dated as of September 22, 2021 (as amended, the “Merger Agreement”), by and among the Company, Rodeo Sub I, LLC (“Merger Sub”), Capstead Mortgage Corporation (“Capstead”) and, solely for the purposes set forth therein, the Advisor. Pursuant to the Merger Agreement, on the Closing Date, Capstead merged with and into Merger Sub, with Merger Sub continuing as the surviving company (the “Merger”).

At the effective time of the merger (the "Effective Time"), each outstanding share of common stock, par value $0.01 per share, of Capstead (the “Capstead Common Stock”) (other than shares held by the Company or Merger Sub or by any wholly owned subsidiary of the Company or Merger Sub or any wholly owned subsidiary of Capstead immediately prior to the Effective Time, which were automatically canceled and retired and ceased to exist) was cancelled and converted into the right to receive:

•from the Company, (A) 0.3288 newly-issued shares of the Company's Common Stock (the “Per Share Stock Consideration”); and (B) a cash amount equal to $0.21 per share (the “Per Share Cash Consideration” and together with the Per Share Stock Consideration, the “Per Common Share FBRT Consideration”); and

•from the Advisor, a cash amount equal to $0.73 per share (the “Advisor Cash Consideration” and together with the Per Common Share FBRT Consideration, the “Total Per Common Share Consideration”).

No fractional shares of Common Stock were issued in the Merger, and the value of any fractional interests to which a former holder of Capstead Common Stock is otherwise entitled will be paid in cash.

Additionally, at the Effective Time, (i) each outstanding share of Capstead’s 7.50% Series E Cumulative Redeemable Preferred Stock, $0.10 par value per share (“Capstead Preferred Stock”), was cancelled and converted into the right to receive one newly-issued share of the Company's Series E Preferred Stock, which has the rights, preferences, and privileges and voting powers materially the same as those of the Capstead Preferred Stock.The Company filed Articles Supplementary to the Company’s charter with the SDAT, with an effective date of October 19, 2021, which designated and classified 10,329,039 shares of preferred stock as a new series of Series E Preferred Stock, with the rights, preferences and obligations set forth in the Articles Supplementary.

Furthermore, effective immediately prior to the Effective Time, all outstanding restricted stock under Capstead’s Amended and Restated 2014 Flexible Incentive Plan (the “Capstead Plan”) automatically became fully vested and non-forfeitable, and all shares of Capstead Common Stock represented thereby became eligible to receive the Total Per Common Share Consideration. Also effective immediately prior to the Effective Time, all outstanding awards of performance units under the Capstead Plan automatically became earned and vested at the conversion rate of one share of Capstead Common Stock for each outstanding performance unit, and all shares of Capstead Common Stock represented thereby became eligible to receive the Total Per Common Share Consideration. Each outstanding dividend equivalent right under the Capstead Plan was automatically cancelled as of the Effective Time; provided that any accrued amounts that were not paid as of immediately prior to the Effective Time were paid to the holders thereof at the Effective Time (or will be as soon as practicable thereafter but in no event later than the first payroll date following the Effective Time).

The issuances of shares of Common Stock and Series E Preferred Stock in connection with the Merger were registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s registration statement on Form S-4 (Registration No. 333-258947), which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on September 3, 2021 (as amended or supplemented, the “S-4 Registration Statement”). The proxy statement/prospectus included in the S-4 Registration Statement contains additional information regarding the Merger.

Per the terms of the transactions described in the Merger Agreement, approximately 32.1 million shares of Common Stock were issued in connection with the Merger to former Capstead common stockholders, and the Company paid $20.5 million in cash consideration to former Capstead common stockholders. In addition, the Company issued 10.3 million shares of Series E Preferred Stock to former holders of Capstead Preferred Stock. In addition, both the Company’s Common Stock and Series E Preferred Stock were listed on the New York Stock Exchange (“NYSE”) on October 19, 2021, under the ticker symbols “FBRT” and “FBRT PRE,” respectively.

In addition, in connection with the listing of the Common Stock on the NYSE, on October 19, 2021, each outstanding share of the Company’s Series A Preferred Stock converted into 299.2 shares of Common Stock, pursuant to the terms of the Series A Preferred Stock, resulting in the issuance of 7,649,632 shares of Common Stock. Each such holder remains subject to the lock-up agreement signed with the Advisor at the time of the investment in the Series A Preferred Stock, which will restrict sales of the Common Stock received upon conversion until April 17, 2022.

7.50% Series E cumulative redeemable preferred stock

At the closing of the Capstead merger on October 19, 2021, the Company issued one share of the Company’s 7.50% Series E cumulative redeemable preferred stock (“Series E Preferred Stock”) for each outstanding share of Capstead’s 7.50% Series E preferred stock.

Maturity

The Series E Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption. Shares of the Series E Preferred Stock will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase them or they become convertible and are converted as described below under “—Change of Control Conversion Right.” The Company is not required to set apart for payment the funds to redeem the Series E Preferred Stock.

Ranking

The Series E Preferred Stock ranks, with respect to rights to the payment of dividends and the distribution of assets upon its liquidation, dissolution or winding up:

1.senior to all classes or series of our common stock, of Series F Preferred Stock and to all other equity securities issued by the Company other than equity securities referred to in clauses (2) and (3) below;

2.on a parity with all Series C Preferred Stock, Series D Preferred Stock and all other equity securities issued by the Company with terms specifically providing that those equity securities rank on a parity with the Series E Preferred Stock, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up;

3. junior to all equity securities issued by the Company with terms specifically providing that those equity securities rank senior to the Series E Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon its liquidation, dissolution or winding up (please see the section entitled “—Limited Voting Rights” below); and

4.effectively junior to all of the Company’s existing and future indebtedness (including indebtedness convertible to its common stock or preferred stock, if any) and to the indebtedness of its existing subsidiaries and any future subsidiaries.

Dividends

Holders of shares of the Series E Preferred Stock are entitled to receive, when, as and if authorized by our board of directors and declared by the Company, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 7.50% of the $25.00 per share liquidation preference per annum (equivalent to $1.875 per annum per share). Dividends on the Series E Preferred Stock shall accumulate daily and be cumulative from, and including, October 15, 2021 and shall be payable quarterly in arrears on the 15th day of each January, April, July and October (each, a “dividend payment date”) with respect to the immediately preceding dividend period; provided that if any dividend payment date is not a business day, as defined in the Articles Supplementary for the Series E Preferred Stock, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day and no interest, additional dividends or other sums will accumulate on the amount so payable for the period from and after that dividend payment date to that next succeeding business day. Any dividend payable on the Series E Preferred Stock, including dividends payable for any partial dividend period, will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in our stock records for the Series E Preferred Stock at the close of business on the applicable record date, which shall be the last day of the calendar quarter, whether or not a business day, immediately preceding the applicable dividend payment date (each, a “dividend record date”).

No dividends on shares of the Series E Preferred Stock shall be authorized by our board of directors or paid or set apart for payment by the Company at any time when the terms and provisions of any agreement of the Company, including any agreement relating to its indebtedness, prohibit the authorization, payment or setting apart for payment thereof or provide that the authorization, payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment shall be restricted or prohibited by law.

Notwithstanding the foregoing, dividends on the Series E Preferred Stock will accumulate whether or not the Company has earnings, whether or not there are funds legally available for the payment of those dividends and whether or not those dividends are declared. No interest, or sum in lieu of interest, will be payable in respect of any dividend payment or payments on the Series E Preferred Stock which may be in arrears, and holders of the Series E Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series E Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to those shares.

Unless full cumulative dividends on the Series E Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods, no dividends (other than in shares of common stock or in shares of any series of preferred stock that the Company may issue ranking junior to the Series E Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set apart for payment upon shares of the Company’s common stock or preferred stock that the Company may issue ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation. Nor shall any other distribution be declared or made upon shares of the Company’s common stock or preferred stock that the Company may issue ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation. In addition, any shares of the Company’s common stock or preferred stock that the Company may issue ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation shall not be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Company (except by conversion into or exchange for the Company’s other capital stock that it may issue ranking junior to the Series E Preferred Stock as to dividends and upon liquidation and except for transfers made pursuant to the provisions of our Articles of Amendment and Restatement (the “Charter”) relating to restrictions on transfer and ownership of our capital stock). The foregoing shall not, however, prevent the purchase or acquisition by the Company of shares of any class or series of stock pursuant to the provision of Article V of the Charter relating to restrictions on transfer and ownership or pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of the Series E Preferred Stock and any preferred stock that the Company may issue ranking on parity with the Series E Preferred Stock as to dividends or upon liquidation.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series E Preferred Stock and the shares of any other series of preferred stock that the Company may issue ranking on a parity as to dividends with the Series E preferred stock, all dividends declared upon the Series E Preferred Stock and such other series of preferred stock shall be declared pro rata so that the amount of dividends declared per share of the Series E Preferred Stock and such other series of preferred stock shall in all cases bear to each other the same ratio that accumulated dividends per share on the Series E Preferred Stock and such other series of preferred stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such preferred stock does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series E Preferred Stock which may be in arrears.

Liquidation Preference

In the event of the Company’s voluntary or involuntary liquidation, dissolution or winding up, the holders of shares Series E Preferred Stock will be entitled to be paid out of the assets the Company has legally available for distribution to its stockholders, subject to the preferential rights of the holders of any class or series of its stock the Company may issue ranking senior to the Series E Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends to, but not including, the date of payment, before any distribution of assets is made to holders of the Common Stock or any other class or series of its stock the Company may issue that ranks junior to the Series E Preferred Stock as to liquidation rights.

In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of the Series E Preferred Stock and the corresponding amounts payable on all shares of other classes or series of the Company’s capital stock that the Company may issue ranking on a parity with the Series E Preferred Stock in the distribution of assets, then the holders of the Series E Preferred Stock and all other such classes or series of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Holders of the Series E Preferred Stock will be entitled to written notice of any such liquidation no fewer than 30 days and no more than 60 days prior to the payment date. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of the Series E Preferred Stock will have no right or claim to any of the Company’s remaining assets. The consolidation or merger of the Company with or into any other corporation, trust or entity or of any other entity with or into the Company, or the sale, lease, transfer or conveyance of all or substantially all of the Company’s property or business, shall not be deemed to constitute a liquidation, dissolution or winding up of the Company (although such events may give rise to the special optional redemption and contingent conversion rights described below).

In determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition of shares of stock of the Company or otherwise, is permitted under Maryland law, amounts that would be needed, if the Company were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of holders of shares of the Series E Preferred Stock shall not be added to our total liabilities.

Redemption

As s provided in our Charter, the Company may purchase or redeem shares of the Series E Preferred Stock in order to preserve its qualification as a REIT. Please see the section entitled “Restrictions on Ownership and Transfer.”

Optional Redemption. The Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series E Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption.

Special Optional Redemption Upon Change of Control. Upon the occurrence of a Change of Control, the Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series E Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. If, prior to the Change of Control Conversion Date, the Company has provided notice of its election to redeem some or all of the shares of Series E Preferred Stock (whether pursuant to our optional redemption right described above under “—Optional Redemption” or this special optional redemption right), the holders of Series E Preferred Stock will not have the Change of Control Conversion Right (as defined below) described below under “—Change of Control Conversion Right” with respect to the shares called for redemption.

A “Change of Control” is deemed to occur when, after the original issuance of the Series E Preferred Stock, the following have occurred and are continuing:

•the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of the Company’s stock entitling that person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in the election of the Company’s directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

•following the closing of any transaction referred to in the bullet point above, neither the Company nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the NYSE, the NYSE American or the Nasdaq, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or Nasdaq.

Redemption Procedures. In the event the Company elects to redeem Series E Preferred Stock, the notice of redemption will be mailed to each holder of record of the Series E Preferred Stock called for redemption at such holder’s address as it appears on our stock transfer records and will state the following:

•the redemption date;

•the number of shares of the Series E Preferred Stock to be redeemed;

•the redemption price;

•the place or places where certificates (if any) for the Series E Preferred Stock are to be surrendered for payment of the redemption price;

•that dividends on the shares to be redeemed will cease to accumulate on the redemption date;

•whether such redemption is being made pursuant to the provisions described above under “—Optional Redemption” or “—Special Optional Redemption Upon Change of Control”;

•if applicable, that such redemption is being made in connection with a Change of Control and, in that case, a brief description of the transaction or transactions constituting such Change of Control; and

•if such redemption is being made in connection with a Change of Control, that the holders of the shares of the Series E Preferred Stock being so called for redemption will not be able to tender such shares of the Series E Preferred Stock for conversion in connection with the Change of Control and that each share of the Series E Preferred Stock tendered for conversion that is called, prior to the Change of Control Conversion Date (as defined below), for redemption will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date.

If less than all of the Series E Preferred Stock held by any holder is to be redeemed, the notice mailed to such holder shall also specify the number of shares of the Series E Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of the Series E Preferred Stock, except as to the holder to whom notice was defective or not given.

Holders of shares of the Series E Preferred Stock to be redeemed shall surrender the Series E Preferred Stock at the place designated in the notice of redemption and shall be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender. If notice of redemption of any shares of the Series E Preferred Stock has been given and if the Company has irrevocably set apart for payment the funds necessary for redemption in trust for the benefit of the holders of the shares of the Series E Preferred Stock so called for redemption, then from and after the redemption date (unless default shall be made by the Company in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accumulate on those shares of the Series E Preferred Stock, those shares of the Series E Preferred Stock shall no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption. If any redemption date is not a business day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next business day and no interest, additional dividends or other sums will accumulate on the amount payable for the period from and after that redemption date to that next business day. If less than all of the outstanding Series E Preferred Stock is to be redeemed, the Series E Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method the Company determines but that will not result in the automatic transfer of any shares of the Series E Preferred Stock to a trust as described under “—Restrictions on Ownership and Transfer.”

Immediately prior to any redemption of the Series E Preferred Stock, the Company shall pay, in cash, any accumulated and unpaid dividends to, but not including, the redemption date, unless a redemption date falls after a dividend record date and prior to the corresponding dividend payment date, in which case each holder of the Series E Preferred Stock at the close of business on such dividend record date shall be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date. Except as provided above, the Company will make no payment or allowance for unpaid dividends, whether or not in arrears, on shares of the Series E Preferred Stock to be redeemed.

Unless full cumulative dividends on all shares of the Series E Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no shares of the Series E Preferred Stock shall be redeemed unless all outstanding shares of the Series E Preferred Stock are simultaneously redeemed, and the Company shall not purchase or otherwise acquire directly or indirectly any shares of the Series E Preferred Stock (except by exchanging it for our capital stock ranking junior to the Series E Preferred Stock as to dividends and upon liquidation); provided, however, that the foregoing shall not prevent the purchase or acquisition by the Company of shares of the Series E Preferred Stock to preserve its REIT status or pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of the Series E Preferred Stock.

Subject to applicable law, the Company may purchase shares of the Series E Preferred Stock in the open market, by tender or by private agreement. Any shares of the Series E Preferred Stock that the Company acquires may be retired and re-classified as authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be reissued as any class or series of preferred stock.

Change of Control Conversion Right

Upon the occurrence of a Change of Control, each holder of the Series E Preferred Stock will have the right (unless, prior to the Change of Control Conversion Date, the Company has provided notice of its election to redeem some or all of the shares of the Series E Preferred Stock held by such holder as described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption Upon Change of Control,” in which case such holder will have the right only with respect to shares of the Series E Preferred Stock that are not called for redemption) to convert some or all of the shares of the Series E Preferred Stock held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of shares of the Company’s common stock per share of the Series E Preferred Stock (the “common stock Conversion Consideration”) equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference per share of the Series E Preferred Stock plus the amount of any accumulated and unpaid dividends thereon to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a dividend record date and prior to the corresponding dividend payment date for the Series E Preferred Stock, in which case no additional amount for such accumulated and unpaid dividends will be included in this sum) by (ii) the Common Stock Price, as defined below (such quotient, the “Conversion Rate”); and

•a number to be determined as of the effective time of the Merger (the “Share Cap”), equal to (A) 3.81388 multiplied by (B) a fraction in which (i) the numerator is equal to the sum of (x) the Per Share Cash Consideration, (y) Advisor Cash Consideration per share and (z) the product of (1) the Per Share Stock Consideration and (2) the most recently reported GAAP book value per share of common stock prior to the Closing, and (ii) the denominator is the most recently reported GAAP book value per share of common stock prior to the Closing, subject to certain adjustments as described below.

Except as set forth in the Articles Supplementary for the Series E Preferred Stock and as otherwise required by law, the persons who are the holders of record of shares of the Series E Preferred Stock at the close of business on a dividend record date will be entitled to receive the dividend payable on the corresponding dividend payment date notwithstanding the conversion of those shares after such dividend record date and on or prior to such dividend payment date and, in such case, the full amount of such dividend shall be paid on such dividend payment date to the persons who were the holders of record at the close of business on such dividend record date. Except as provided above, the Company will make no allowance for unpaid dividends that are not in arrears on the shares of the Series E Preferred Stock to be converted.

The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a distribution of the Company’s common stock to existing holders of its common stock), subdivisions or combinations (in each case, a “Share Split”) with respect to our common stock as follows: the adjusted Share Cap as the result of a Share Split will be the number of shares of the Company’s common stock that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of shares of the Company’s common stock outstanding immediately after giving effect to such Share Split and the denominator of which is the number of shares of the Company’s common stock outstanding immediately prior to such Share Split.

For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate number of shares of the Company’s common stock (or equivalent Alternative Conversion Consideration (as defined below), as applicable) issuable or deliverable, as applicable, in connection with the exercise of the Change of Control Conversion Right will not exceed the product of the Share Cap times the aggregate number of shares of the Series E Preferred Stock issued and outstanding at the Change of Control Conversion Date (or equivalent Alternative Conversion Consideration, as applicable) (the “Exchange Cap”). The Exchange Cap is subject to pro rata adjustments for any Share Splits on the same basis as the corresponding adjustment to the Share Cap.

In the case of a Change of Control pursuant to which our common stock is or will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of the Series E Preferred Stock will receive upon conversion of such shares of the Series E Preferred Stock, the kind and amount of Alternative Form Consideration which such holder would have owned or been entitled to receive upon the Change of Control had such holder held a number of shares of the Company’s common stock equal to the common stock Conversion Consideration immediately prior to the effective time of the Change of Control (the “Alternative Conversion Consideration”); the common stock Conversion Consideration or the Alternative Conversion Consideration, whichever shall be applicable to a Change of Control, is referred to as the “Conversion Consideration”).

If the holders of the Company’s common stock have the opportunity to elect the form of consideration to be received in the Change of Control, the consideration in respect of such Change of Control will be deemed to be the kind and amount of consideration actually received by holders of a majority of the outstanding shares of the Company’s common stock that made or voted for such an election (if electing between two types of consideration) or holders of a plurality of the outstanding shares of the Company’s common stock that made or voted for such an election (if electing between more than two types of consideration), as the case may be, and will be subject to any limitations to which all holders of the Company’s common stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in such Change of Control.

The Company will not issue fractional shares of its common stock upon the conversion of the Series E Preferred Stock in connection with a Change of Control. Instead, the Company will make a cash payment equal to the value of such fractional shares based upon the Common Stock Price used in determining the common stock Conversion Consideration for such Change of Control.

Within 15 days following the occurrence of a Change of Control, provided that the Company has not then exercised its right to redeem all shares of the Series E Preferred Stock pursuant to the redemption provisions described above, the Company will provide to holders of the Series E Preferred Stock a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right. This notice will state the following:

•the events constituting the Change of Control;

•the date of the Change of Control;

•the last date on which the holders of the Series E Preferred Stock may exercise their Change of Control Conversion Right;

•the method and period for calculating the Common Stock Price;

•the Change of Control Conversion Date;

•that if, prior to the Change of Control Conversion Date, the Company has provided notice of its election to redeem all or any shares of the Series E Preferred Stock, holders will not be able to convert the shares of the Series E Preferred Stock called for redemption and such shares will be redeemed on the related redemption date, even if such shares have already been tendered for conversion pursuant to the Change of Control Conversion Right;

•if applicable, the type and amount of Alternative Conversion Consideration entitled to be received per share of the Series E Preferred Stock;

•the name and address of the paying agent, transfer agent and conversion agent for the Series E Preferred Stock;

•the procedures that the holders of the Series E Preferred Stock must follow to exercise the Change of Control Conversion Right (including procedures for surrendering shares for conversion through the facilities of a Depositary (as defined below)), including the form of conversion notice to be delivered by such holders as described below; and

•the last date on which holders of the Series E Preferred Stock may withdraw shares surrendered for conversion and the procedures that such holders must follow to effect such a withdrawal.

Under such circumstances, the Company also will issue a press release containing such notice for publication on Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if these organizations are not in existence at the time of issuance of the press release, such other news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public), and post a notice on our website, in any event prior to the opening of business on the first business day following any date on which the Company provides the notice described above to the holders of the Series E Preferred Stock.

To exercise the Change of Control Conversion Right, the holders of the Series E Preferred Stock will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) representing the shares of the Series E Preferred Stock to be converted, duly endorsed for transfer (or, in the case of any shares of the Company Series E Preferred Stock held in book-entry form through a Depositary, to deliver, on or before the close of business on the Change of Control Conversion Date, the shares of the Company Series E Preferred Stock to be converted through the facilities of such Depositary), together with a written conversion notice in the form provided by the Company, duly completed, to its transfer agent. The conversion notice must state:

•the relevant Change of Control Conversion Date;

•the number of shares of the Series E Preferred Stock to be converted; and

•that the shares of the Series E Preferred Stock are to be converted pursuant to the applicable provisions of the Series E Preferred Stock.

The “Change of Control Conversion Date” is the date the Series E Preferred Stock is to be converted, which will be a business day selected by the Company that is no fewer than 20 days nor more than 35 days after the date on which the Company provides the notice described above to the holders of the Series E Preferred Stock.

The “Common Stock Price” is (i) if the consideration to be received in the Change of Control by the holders of the Company’s common stock is solely cash, the amount of cash consideration per share of its common stock or (ii) if the consideration to be received in the Change of Control by holders of the Company’s common stock is other than solely cash (x) the average of the closing sale prices per share of the Company common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices per share or, if more than one in either case, the average of the average closing bid and the average closing ask prices per share) for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred as reported on the principal U.S. securities exchange on which our common stock is then traded, or (y) the average of the last quoted bid prices for our common stock in the over-the-counter market as reported by Pink OTC Markets Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred, if our common stock is not then listed for trading on a U.S. securities exchange.

Holders of the Series E Preferred Stock may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date. The notice of withdrawal delivered by any holder must state:

•the number of withdrawn shares of the Series E Preferred Stock;

•if certificated Series E Preferred Stock has been surrendered for conversion, the certificate numbers of the withdrawn shares of the Series E Preferred Stock; and

•the number of shares of the Series E Preferred Stock, if any, which remain subject to the holder’s conversion notice.

Notwithstanding the foregoing, if any shares of the Series E Preferred Stock are held in book-entry form through The Depository Trust Company (“DTC”) or a similar depositary (each, a “Depositary”), the conversion notice and/or the notice of withdrawal, as applicable, must comply with applicable procedures, if any, of the applicable Depositary.

Series E Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control Conversion Date the Company has provided notice of its election to redeem some or all of the shares of the Series E Preferred Stock, as described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption Upon Change of Control,” in which case only the shares of the Series E Preferred Stock properly surrendered for conversion and not properly withdrawn that are not called for redemption will be converted as aforesaid. If the Company elects to redeem shares of the Series E Preferred Stock that would otherwise be converted into the applicable Conversion Consideration on a Change of Control Conversion Date, such shares of the Series E Preferred Stock will not be so converted and the holders of such shares will be entitled to receive on the applicable redemption date the redemption price described above under “—Redemption—Optional Redemption” or “—Redemption—Special Optional Redemption Upon Change of Control,” as applicable.

The Company will deliver all securities, cash and any other property owing upon conversion no later than the third business day following the Change of Control Conversion Date. Notwithstanding the foregoing, the persons entitled to receive any shares of the Company’s common stock or other securities delivered on conversion will be deemed to have become the holders of record thereof as of the Change of Control Conversion Date.

In connection with the exercise of any Change of Control Conversion Right, the Company will comply with all federal and state securities laws and stock exchange rules in connection with any conversion of shares of the Series E Preferred Stock into shares of the Company’s common stock or other property. Notwithstanding any other provision of the Series E Preferred Stock, no holder of the Series E Preferred Stock will be entitled to convert such shares of the Series E Preferred Stock into shares of the Company’s common stock to the extent that receipt of such shares of common stock would cause such holder (or any other person) to exceed the applicable share ownership limitations contained in our Charter. Please see the section entitled “Restrictions on Ownership and Transfer.”

The Change of Control conversion feature may make it more difficult for a third party to acquire the Company or discourage a party from acquiring it.

Except as provided above in connection with a Change of Control, the Series E Preferred Stock is not convertible into or exchangeable for any other securities or property.

Limited Voting Rights

Holders of the Series E Preferred Stock do not have any voting rights, except as set forth below.

Whenever dividends on any shares of the Series E Preferred Stock are in arrears for six or more quarterly dividend periods, whether or not consecutive, the number of directors constituting the Board will be automatically increased by two (if not already increased by two by reason of the election of directors by the holders of any other class or series of the Company’s preferred stock the Company has issued or may issue upon which like voting rights have been conferred and are exercisable and with which the Series E Preferred Stock is entitled to vote as a class with respect to the election of those two directors), and the holders of the Series E Preferred Stock, voting as a single class with all other classes or series of preferred stock the Company has issued or may issue upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series E Preferred Stock in the election of those two directors will be entitled to vote for the election of those two additional directors at a special meeting called by the Company at the request of the holders of record of at least 25% of the outstanding shares of the Series E Preferred Stock or by the holders of any other class or series of preferred stock upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series E Preferred Stock in the election of those two directors (unless the request is received less than 90 days before the date fixed for the next annual or special meeting of stockholders, in which case, such vote will be held at the earlier of the next annual or special meeting of stockholders), and at each subsequent annual meeting until all dividends accumulated on the Series E Preferred Stock for all past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set apart for payment. In that case, the right of holders of the Series E Preferred Stock to elect any directors will cease and, unless there are other classes or series of the Company’s preferred stock upon which like voting rights have been conferred and are exercisable, the term of office of any directors elected by holders of the Series E Preferred Stock shall immediately terminate and the number of directors constituting the board of directors shall be reduced accordingly. For the avoidance of doubt, in no event shall the total number of directors elected by holders of the Series E Preferred Stock (voting together as a separate class with all other classes or series of preferred stock the Company may issue upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series E Preferred Stock in the election of such directors) pursuant to these voting rights exceed two.

If a special meeting is not called by the Company within 30 days after request from the holders of the Series E Preferred Stock as described above, then the holders of record of at least 25% of the outstanding Series E Preferred Stock may designate a holder to call the meeting at our expense.

On each matter on which holders of the Series E Preferred Stock are entitled to vote, each share of the Series E Preferred Stock will be entitled to one vote, except that when shares of any other class or series of the Company’s preferred stock have the right to vote with the Series E Preferred Stock as a single class on any matter, the Series E Preferred Stock and the shares of each such other class or series will have one vote for each $25.00 of liquidation preference (excluding accumulated dividends).

So long as any shares of the Series E Preferred Stock remain outstanding, the Company will not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of the Series E Preferred Stock outstanding at the time, voting together as a single class with all series of preferred stock ranking on a parity with the Series E Preferred Stock that the Company may issue and upon which like voting rights have been conferred and are exercisable, given in person or by proxy, either in writing or at a meeting, (a) authorize or create, or increase the authorized or issued amount of, any class or series of capital stock ranking senior to the Series E Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any of the Company’s authorized capital stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (b) amend, alter or repeal the provisions of our Charter, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the Series E Preferred Stock (each, an “Event”); provided, however, with respect to the occurrence of any Event set forth in (b) above, so long as the Series E Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into account that, upon an occurrence of an Event, the Company may not be the surviving entity, the occurrence of any such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of the Series E Preferred Stock and, provided further, that any increase in the amount of the authorized common stock or preferred stock, including the Series E Preferred Stock, or the creation or issuance of any additional Series E Preferred Stock or other series of preferred stock that the Company may issue, or any increase in the amount of authorized shares of such series, in each case ranking on a parity with or junior to the Series E Preferred Stock that the Company may issue with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. Notwithstanding the foregoing, holders of any parity preferred stock shall not be entitled to vote together as a class with the holders of the Series E Preferred Stock on any amendment, alteration or repeal of our Charter unless such action affects the holders of the Series E Preferred Stock and such parity preferred stock equally.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of the Series E Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been deposited in trust to effect such redemption.

Except as expressly stated in the Articles Supplementary for the Series E Preferred Stock, the Series E Preferred Stock does not have any relative, participating, optional or other special voting rights or powers and the consent of the holders thereof shall not be required for the taking of any corporate action.

Information Rights

During any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act and any shares of the Series E Preferred Stock are outstanding, the Company will use its best efforts to (i) transmit by mail (or other permissible means under the Exchange Act) to all holders of the Series E Preferred Stock, as their names and addresses appear on our record books and without cost to such holders, copies of the annual reports on Form 10-K and quarterly reports on Form 10-Q that the Company would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject thereto (other than any exhibits that would have been required) and (ii) promptly, upon request, supply copies of such reports to any holders or prospective holder of the Series E Preferred Stock. the Company will use its best effort to mail (or otherwise provide) the information to the holders of the Series E Preferred Stock within 15 days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case may be, in respect of such information would have been required to be filed with the SEC, if the Company were subject to Section 13 or 15(d) of the Exchange Act, in each case, based on the dates on which the Company would be required to file such periodic reports if the Company were a “non-accelerated filer” within the meaning of the Exchange Act.

Preemptive Rights

No holders of the Series E Preferred Stock, as holders of the Series E Preferred Stock, have any preemptive rights to purchase or subscribe for our common stock or any of its other securities.

Listing

The Series E Preferred Stock is listed on the New York Stock Exchange under the symbol “FBRT PRE”.

Transfer Agent and Registrar

The transfer agent and registrar for the Series E Preferred Stock is DST Systems, Inc.

Series F Convertible Preferred Stock

On October 12, 2021, as contemplated by the Merger Agreement with Capstead, the Company completed its previously-announced stock dividend on the outstanding shares of Common Stock, which stock dividend was paid at a rate of nine shares of the Company’s newly issued Series F Convertible Preferred Stock (“Series F Preferred Stock”) for each share of Common Stock issued and outstanding.

The Series F Preferred Stock ranks junior to all other outstanding classes of the Company’s preferred stock with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series F Preferred Stock is $2.00.

Dividends on the Series F Preferred Stock are equal to, and will be paid at the same time as, dividends that are authorized and declared on the Company’s common stock. The Series F Preferred Stock ranks senior to the Company’s Common Stock with respect to the distribution of assets upon any liquidation, dissolution or winding up of the Company (other than a liquidation, dissolution or winding up of the Company that results in the automatic conversion of such Series F Preferred Stock into Common Stock).

Each share (or fractional share) of Series F Preferred Stock shall automatically convert into one share of Common Stock (or equivalent fractional share, as applicable) upon the earlier of (i) April 19, 2022, (ii) three business days prior to a liquidation, dissolution or winding up of the Company in the event that the Company’s board of directors determines (which determination will be conclusive) that the liquidating distribution per share in respect of such converted share of Series F Preferred Stock (or fractional share) would be in an amount in excess of the liquidation preference of $2.00 per share or (iii) immediately prior to the effective time of a qualifying change of control, provided that the consideration per share payable in connection with such change in control in respect of such converted share of Series F Preferred Stock (or fractional share) is an amount in excess of the liquidation preference of $2.00.

The Series F Preferred Stock has no stated maturity and is not redeemable.

Holders of Series F Preferred Stock (voting as a single class with holders of Common Stock and other series of Company equity securities entitled to vote with the common stockholders) are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of Common Stock are entitled to vote. The number of votes applicable to a share of outstanding Series F Preferred Stock will be equal to the number of shares of Common Stock a share of Series F Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of Common Stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series F Preferred Stock is required to take certain actions materially adverse to the holders of the Series F Preferred Stock.

Share Repurchase Program

The Company's SRP was terminated effective as of October 19, 2021 in connection with the closing of the Capstead merger and the listing of the Company’s common stock on the NYSE.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The Company's unaudited consolidated financial statements and related footnotes 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.

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, 2020, which are included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 11, 2021.

Use of Estimates

Use of Estimates

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.

The global coronavirus (COVID-19) pandemic has caused economic disruptions and changes to the real estate market. Numerous countries, including the U.S., have declared national emergencies with respect to COVID-19 and certain jurisdictions, including those where our corporate headquarters and/or properties that secure our investments, or properties that the Company owns, are located, have at times imposed “stay-at-home” guidelines or orders or other restrictions to help prevent its spread. The effects of COVID-19 may negatively and materially impact significant estimates and assumptions used by the Company including, but not limited to estimates of expected credit losses, valuation of our equity investments and the fair value estimates of the Company's assets and liabilities. Actual results could differ from those estimates.

Principles of Consolidation

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 variable interest entity ("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 it 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. Non-controlling interest represents the equity of a consolidated joint venture that is not owned by the Company.

The accompanying consolidated financial statements include the accounts of collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.

Acquisition Expenses

Acquisition Expenses

The Company capitalizes certain direct costs relating to loan origination activities. The cost is amortized over the life of the loan and recognized in interest income in the Company's consolidated statements of operations. Acquisition expenses paid on future funding amounts are expensed within the acquisition expenses line in the Company's consolidated statements of operations.

Cash and Cash Equivalents

Cash and Cash EquivalentsCash consists of amounts deposited with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased.

Restricted Cash

Restricted Cash

Restricted cash primarily consists of cash pledged as margin on repurchase agreements and derivative transactions. The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.

Commercial Mortgage Loans

Commercial Mortgage Loans

Held for Investment - 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, are carried at amortized cost less allowance for credit 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 commitment 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 commitment fees is recognized in interest income in the Company's consolidated statements of operations.

Held for Sale - Commercial mortgage 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 statements of operations. Unamortized loan origination costs for commercial mortgage loans held for sale that are carried at the lower of cost or fair value 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 mortgage loans to held for sale.

Held for Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held for sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in the Commercial mortgage loans, held for sale, measured at fair value in the consolidated balance sheets. Interest income received on commercial mortgage loans, held for sale, measured at fair value is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. Costs to originate these investments are expensed when incurred.

Real estate owned

Real estate owned

The Company classifies its real estate owned as long-lived assets held for investment or as long-lived assets held for sale. Held for investment assets are stated at cost, as adjusted for any impairment loss, less accumulated depreciation. Held for sale assets are carried at the lower of depreciated cost or estimated fair value, less estimated costs to sell. The Company generally reclassifies assets as held for sale once a sales contract has been executed and earnest money has become non-refundable and the criteria under ASC 360 has been met.

Amounts capitalized to real estate owned consist of the cost of acquisition or construction, any tenant improvements or major improvements, betterments that extend the useful life of the related asset, and transaction costs associated with the acquisition of an individual asset that does not qualify as a business combination. All repairs and maintenance are expensed as incurred. Additionally, the Company capitalizes interest while the development, or redevelopment, of a real estate owned asset is in progress. No development or redevelopments of real estate owned assets are in progress as of September 30, 2021.

The Company’s real estate owned assets are depreciated or amortized using the straight-line method over the following useful lives:

Buildings & Site Improvements	40 years
Furniture, fixtures, and equipment	15 years
Intangible lease assets	Lease term

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of either operating properties or properties under construction in which the Company has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present, management assesses whether the respective carrying values will be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition for assets held for use, or from the estimated fair values, less costs to sell, for assets held for sale. In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, management adjusts such assets to the respective estimated fair values and recognizes an impairment loss. Estimated fair values are calculated based on the following information, depending upon availability, in order of preference: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated sales value (which is based on key assumptions such as estimated market rents, lease-up periods, estimated lease terms, and capitalization and discount rates) less estimated selling costs.

Leases

Fair Value of Assets and Liabilities of Acquired Properties

Upon the acquisition of real properties, the Company records the fair value of properties (plus any related acquisition costs) allocated based on relative fair value as tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, based on their estimated fair values. Substantially all of the Company’s property acquisitions qualify as asset acquisitions under Accounting Standards Codification ("ASC") 805, Business Combinations.

The estimated fair values of the tangible assets of an acquired property are determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and building based on management’s determination of the estimated fair value of these assets. Management relies on a sales comparison approach using closed land sales and listings in determining the land value, and determines the as-if-vacant estimated fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates the cost to execute similar leases including leasing commissions, legal, and other related costs.

The estimated fair values of above-market and below-market in-place leases are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of market rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases, taking into consideration the probability of renewals for any below-market leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental revenues over the remaining terms of the respective leases.

The estimated fair values of in-place leases include an estimate of the direct costs associated with obtaining the acquired or "in place" tenant and estimates of opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease. The amount capitalized as direct costs associated with obtaining a tenant include commissions, tenant improvements, and other direct costs and are estimated based on management’s consideration of current market costs to execute a similar lease. These direct lease origination costs are included in deferred lease costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. These lease intangibles are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

Credit Losses

Credit Losses

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses, which amends the credit impairment model for financial instruments. The Company adopted ASU 2016-13 on January 1, 2020.

The allowance for credit losses required under ASU 2016-13 is deducted from the respective loans’ amortized cost basis on the Company’s consolidated balance sheets. The allowance for credit losses attributed to unfunded loan commitments is included in Accounts payable and accrued expenses on the consolidated balance sheets. The guidance also required a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

The following discussion highlights changes to the Company’s accounting policies as a result of this adoption.

Allowance for credit losses

The allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan commitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and reasonable and supportable forecasts.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.

In measuring the allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model principally utilizes historical loss rates derived from a commercial mortgage backed securities database with historical losses from 1998 to 2020 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an immediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a discounted cash flow (“DCF”) methodology.

For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the allowance for credit losses.

In developing the allowance for credit losses for its loans held for investment, 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, using similar factors as those in developing the allowance for credit losses. 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. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly. At the time of origination or purchase, loans held for investment are ranked as a “2” and will move accordingly going forward based on the ratings which are defined as follows:

1.Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.

2.Low Risk- Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.

3.Average Risk- Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.

4.High Risk/Delinquent/Potential for Loss- Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.

5.Impaired/Defaulted/Loss Likely- Underperforming investment with expected loss of interest and some principal.

The Company also considers qualitative and environmental factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the allowance for credit losses.

Changes in the allowance for credit losses for the Company’s financial instruments are recorded in Provision/(benefit) for credit losses on the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded on the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.

The Company has elected to not measure an allowance for credit losses for accrued interest receivable as it is timely, following three months' time, reversed against interest income when a loan, real estate security or preferred equity investment is placed on nonaccrual status. The Company did not record reversals of accrued interest receivable during the nine months ended September 30, 2021. Loans are charged off against the Provision/(benefit) for credit losses when all or a portion of the principal amount is determined to be uncollectible.

Past due and nonaccrual status

Loans are placed on nonaccrual status and considered non-performing when full payment of principal and interest is unpaid for 90 days or more or where reasonable doubt exists as to timely collection, unless the loan is both well secured and in the process of collection. Interest received on nonaccrual status loans are accounted for under the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company may return a loan to accrual status when repayment of principal and interest is reasonably assured.

Troubled Debt Restructuring (“TDR”)

The Company classifies an individual financial instrument as a TDR when it has a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concession to the borrower who is experiencing financial difficulty. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument. The Company determines the allowance for credit losses for financial instruments that are TDRs individually.

Real Estate Securities

Real Estate Securities

On the acquisition date, all of the Company’s commercial real estate securities were classified as available for sale ("AFS") and carried at fair value, and subsequently any unrealized gains or losses are recognized as a component of accumulated other comprehensive income or loss. The Company may elect the fair value option for its real estate securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded in the Company’s consolidated statements of operations. No such election was made as of September 30, 2021. 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. The Company uses the specific identification method in determining the cost relief for real estate securities sold. Realized gains and losses from the sale of real estate securities are included in the Company’s consolidated statements of operations.

AFS real estate securities which have experienced a decline in the fair value below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Any impairment that is not credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations. If the Company intends to sell an impaired real estate security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.

The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.

The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an adjustment to the individual security’s asset balance with an offsetting entry to accumulated other comprehensive income in the consolidated balance sheets.

Repurchase Agreements

Repurchase Agreements

Commercial mortgage loans and real estate securities sold under repurchase agreements have been treated as collateralized financing transactions because the Company maintains effective control over the transferred securities. Commercial mortgage loans and real estate securities financed through a repurchase agreement remain on the Company’s consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability. Interest paid in accordance with repurchase agreements is recorded in interest expense on the Company's consolidated statements of operations.

Deferred Financing Cost

Deferred Financing Costs

The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets on the consolidated balance sheets. Deferred financing cost on the Company's collateralized loan obligations ("CLO") are netted against the Company's CLO payable in the Collateralized loan obligations on the consolidated balance sheets. Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in interest expense on the Company's consolidated statements of operations. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity.

Share Repurchase Program

Share Repurchase ProgramThe Company has a Share Repurchase Program (the "SRP") that enables stockholders to sell their shares to the Company, subject to certain conditions. Refer to Note 9 - Stock Transactions for a description of the SRP. When a stockholder requests a redemption and the redemption is approved by the board of directors, the Company reclassifies such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares.

Offering and Related Costs

Offering and Related Costs

Since 2018, the Company has from time to time offered, and may in the future offer, shares of the Company’s common stock or one or more series of its preferred stock (“Preferred Stock”), including its Series A convertible preferred stock (“Series A Preferred Stock”), Series C convertible preferred stock (the “Series C Preferred Stock,”) and Series D convertible preferred stock (the “Series D Preferred Stock”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended. In connection with these offerings, the Company incurs various offering costs. These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers. Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are included within Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, on the Company’s consolidated balance sheets.

Distribution Reinvestment Plan

Distribution Reinvestment Plan

Pursuant to the Company's distribution reinvestment plan ("DRIP") stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. The purchase price for shares purchased through the DRIP has been the lesser of (i) the Company’s most recent estimated per share net asset value ("NAV"), and (ii) the Company’s most recently disclosed GAAP book value per share. There is no market for our common stock. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the consolidated balance sheets in the period distributions are declared. The DRIP was suspended during the second quarter of 2021 and was also suspended during the third quarter of 2021 in connection with the Capstead merger.

Income Taxes

Income Taxes

The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on income in addition to U.S. federal income and excise taxes on its undistributed income. The Company, through its TRS, is indirectly subject to U.S. federal, state and local income taxes. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but is instead taxed as a C corporation. For financial reporting purposes, the TRS is consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. Total income tax provision/(benefit) for the three months ended September 30, 2021 and September 30, 2020 was $1.1 million and $0.2 million, respectively. Total income tax provision/(benefit) for the nine months ended September 30, 2021 and September 30, 2020 was $3.4 million and $(2.5) million, respectively.

The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return. The Company has assessed its tax positions for all open tax years beginning with December 31, 2017 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes.

The Company utilizes the TRS to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests. Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.

Derivatives and Hedging Activities

Derivatives and Hedging Activities

In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives.  The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.

The Company recognizes all derivatives on the consolidated balance sheets at fair value.  The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized (gain)/loss on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash on the Company’s consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.

Per Share Data

Per Share Data

The Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are each considered a participating security and the Company calculates basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock 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 outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, except when doing so would be anti-dilutive.

Reportable Segments

Reportable Segments

The Company has determined that it has four reportable segments based on how the chief operating decision maker reviews and manages the business. The four reporting segments are as follows:

•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.

•The commercial conduit business in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

Redeemable Convertible Preferred Stock

Preferred Stock

The Company’s outstanding classes of preferred stock are classified outside of permanent equity in the consolidated balance sheets. Subject to certain conditions, the outstanding Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock is redeemable at the option of the holders of the Preferred Stock, outside of the control of the Company.

Series A Preferred Stock

The Series A Preferred Stock, ranks senior to the Common Stock, and on parity with all other outstanding classes of preferred stock of the Company (including the Series C and Series D Preferred Stock) with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series A Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series A Preferred Stock into Common Stock.

Dividends on the Series A Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share (subject to a 1.0% increase in the event of the ratings for the Series A Preferred Stock decreases below a certain threshold) and (ii) the dividends that would have been paid had such share of Series A Preferred Stock been converted into a share of Common Stock on the first day of such quarter, subject to proration in the event the share of Series A Preferred Stock is not outstanding for the full quarter. Dividends are paid in arrears.

Series C Preferred Stock

The Series C Preferred Stock ranks senior to the Common Stock and on parity with the Series D Preferred Stock with respect to priority in dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company. The liquidation preference of each share of Series C Preferred Stock is the greater of (i) $5,000 plus accrued and unpaid dividends, and (ii) the amount that would be received upon a conversion of the Series C Preferred Stock into the Common Stock.

Dividends on the Series C Preferred Stock, which are typically declared and paid quarterly, accrue at a rate equal to the greater of (i) an annual amount equal to 4.0% of the liquidation preference per share and (ii) the dividends that would have been paid had such share of Series C Preferred Stock been converted into a share of common stock on the first day of such quarter, subject to proration in the event the share of Series C preferred stock is not outstanding for the full quarter. Dividends are paid in arrears. Dividends will accumulate and be cumulative from the most recent date to which dividends had been paid.

Each outstanding share of Series C Preferred Stock shall convert into 299.2 shares of common stock (the “Conversion Rate”), subject to anti-dilution adjustments described in the Articles Supplementary for the Series C Preferred Stock, on October 19, 2022 or, upon the election of the Company upon 10 days’ notice to the holders, on or after April 19, 2022.

In the event of the sale of all or substantially all of the business or assets of the Company (by sale, merger, consolidation or otherwise) or the acquisition by any person of more than 50% of the total economic interests or voting power of all securities of the Company (a “ Change of Control”), in each case prior to the automatic conversion dates set forth above, each holder of Series C Preferred Stock will have the right, prior to consummation of such transaction, to convert its Series C Preferred Stock into common stock at the Conversion Rate. In addition, in the event of a change of control (as defined in the Articles Supplementary of the Series C Preferred Stock) of the Advisor or a Change of Control that is not a "Liquidity Event" and that is related to the removal of the Advisor, both the Company and the holder shall have the right, prior to consummation of the transaction, to require the redemption of the Series C Preferred Stock for the liquidation preference. A "Liquidity Event" is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares of Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchanged for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system.

Holders of the Series C Preferred Stock (voting as a single class with holders of common stock) are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of common stock are entitled to vote. The number of votes applicable to a share of outstanding Series C Preferred Stock will be equal to the number of shares of common stock a share of Series C Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of common stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Series C Preferred Stock, voting as a single class with other shares of parity preferred stock, is required to approve the issuance of any equity securities senior to the Series C Preferred Stock and to take certain actions materially adverse to the holders of the Series C Preferred Stock.

Series D Preferred Stock

The Series D Preferred Stock is on parity with the Series C Preferred Stock with respect to preference on liquidation and dividend rights. The terms of the Series D Preferred Stock are substantially the same as the terms of the Series C Preferred Stock, except that the holders of the Series D Preferred Stock have the option to accelerate the mandatory conversion date, which is October 19, 2022, to a date no earlier than April 19, 2022.

The complete terms of the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are set forth in the Articles Supplementary applicable to each class, which have been filed as exhibits to the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended.

Accounting Pronouncements Not Yet Adopted

Accounting Pronouncements Not Yet Adopted

On March 12, 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company has not adopted any of the optional expedients or exceptions through September 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

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

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

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

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

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

Financial Instruments Measured at Fair Value on a Recurring Basis

CMBS, recorded in real estate securities, available for sale, measured at fair value on the consolidated balance sheets are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities. 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 third party pricing for determining the fair value of each CMBS investments, resulting in a Level II classification.

Commercial mortgage loans, held for sale, measured at fair value in the Company's TRS are initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. Commercial mortgage loans, held for sale, measured at fair value that are originated in the last month of the reporting period are held and marked to the transaction proceeds. The Company classified the commercial mortgage loans, held for sale, measured at fair value as Level III.

Other real estate investments, measured at fair value on the consolidated balance sheets are valued using unobservable inputs. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments, including preferred equity investments, held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. The Company classified the other real estate investments, measured at fair value as Level III.

The fair value for Treasury note futures is derived using market prices. Treasury note futures trade on the Chicago Mercantile Exchange (“CME”). The instruments are a variety of recently issued 10-year U.S. Treasury notes. The future contracts are liquid and are centrally cleared through the CME. Treasury note futures are generally categorized in Level I of the fair value hierarchy.

The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. Valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy. The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy.

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 or liabilities. 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 material transfers between levels within the fair value hierarchy for the period ended September 30, 2021 and December 31, 2020.

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Commercial Mortgage Loans (Tables)

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Schedule of loans receivable by class

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

	September 30, 2021		December 31, 2020
Senior loans	$	3,239,207	$	2,698,823
Mezzanine loans	23,938		15,911
Total gross carrying value of loans	3,263,145		2,714,734
Less: Allowance for credit losses (1)	15,499		20,886
Total commercial mortgage loans, held for investment, net	$	3,247,646	$	2,693,848

________________________

(1) As of September 30, 2021 and December 31, 2020, there have been no specific reserves for loans in non-performing status.

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for investment portfolio (dollars in thousands):

	September 30, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	1,856,441	56.7	%	$	1,202,694	44.2	%
Office	527,371		16.1	%	517,464		19.0	%
Hospitality	445,770		13.6	%	403,908		14.8	%
Mixed Use	133,644		4.1	%	102,756		3.8	%
Industrial	125,120		3.8	%	243,404		8.9	%
Retail	75,961		2.3	%	78,550		2.9	%
Self Storage	56,495		1.7	%	86,424		3.2	%
Manufactured Housing	36,225		1.2	%	71,263		2.6	%
Land	16,400		0.5	%	16,400		0.6	%
Total	$	3,273,427	100.0	%	$	2,722,863	100.0	%

	September 30, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Southeast	$	1,030,591	31.5	%	$	796,908	29.3	%
Southwest	1,027,246		31.4	%	515,392		18.9	%
Mideast	431,104		13.2	%	473,514		17.4	%
Far West	368,565		11.3	%	415,173		15.2	%
Great Lakes	134,591		4.1	%	199,203		7.3	%
Plains	94,292		2.9	%	116,143		4.3	%
Various	70,118		2.1	%	136,855		5.0	%
New England	68,169		2.0	%	69,675		2.6	%
Rocky Mountain	48,751		1.5	%	—		—	%
Total	$	3,273,427	100.0	%	$	2,722,863	100.0	%

The following tables represent the composition by loan type and region of the Company's commercial mortgage loans, held for sale, measured at fair value (dollars in thousands):

	September 30, 2021				December 31, 2020
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	100	100.0	%	$	100	0.1	%
Industrial	—		—	%	67,550		99.9	%
Total	$	100	100.0	%	$	67,650	100.0	%

	September 30, 2021				December 31, 2020
Loan Region	Par Value		Percentage		Par Value		Percentage
Great Lakes	$	100	100.0	%	$	9,150	13.5	%
Far West	—		—	%	58,500		86.5	%
Total	$	100	100.0	%	$	67,650	100.0	%

Schedule of allowance for credit losses

The following table presents the activity in the Company's allowance for credit losses, excluding the unfunded loan commitments, as of September 30, 2021 (dollars in thousands):

	Three Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	7,389	$	103	$	1,028	$	199	$	440	$	7,715	$	241	$	77	$	17,192
Current Period:
Provision/(benefit) for credit losses	(1,278)		261		509		136		34		(1,286)		(89)		20		(1,693)
Write offs	—		—		—		—		—		—		—		—		—
Ending Balance	$	6,111	$	364	$	1,537	$	335	$	474	$	6,429	$	152	$	97	$	15,499

	Nine Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	3,095	$	404	$	1,575	$	3,795	$	132	$	11,646	$	117	$	122	$	20,886
Current Period:
Provision/(benefit) for credit losses	3,305		(40)		(38)		(3,460)		342		(5,217)		35		(25)		(5,098)
Write offs	(289)		—		—		—		—		—		—		—		(289)
Ending Balance	$	6,111	$	364	$	1,537	$	335	$	474	$	6,429	$	152	$	97	$	15,499

The following table presents the activity in the Company's allowance for credit losses, for the unfunded loan commitments, as of September 30, 2021 (dollars in thousands):

	Three Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	120	$	—	$	28	$	10	$	8	$	65	$	—	$	—	$	231
Current Period:
Provision/(benefit) for credit losses	67		1		15		3		3		(9)		—		—		80
Ending Balance	$	187	$	1	$	43	$	13	$	11	$	56	$	—	$	—	$	311

    

	Nine Months Ended September 30, 2021
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Beginning Balance	$	85	$	—	$	47	$	418	$	14	$	101	$	—	$	—	$	665
Current Period:
Provision/(benefit) for credit losses	102		1		(4)		(405)		(3)		(45)		—		—		(354)
Ending Balance	$	187	$	1	$	43	$	13	$	11	$	56	$	—	$	—	$	311

As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held for sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:

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

Schedule of allocation by risk rating

The following tables present the amortized cost of our commercial mortgage loans, held for investment as of September 30, 2021 and December 31, 2020, by loan type, the Company’s internal risk rating and year of origination. The risk ratings are updated as of September 30, 2021.

As of September 30, 2021
	2021		2020		2019		2018		2017		2016		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	1,059,072	$	505,437	$	116,286	$	128,581	$	—	$	—	$	3,487	$	1,812,863
3-4 internal grade	—		—		—		37,025		—		—		—		37,025
Total Multifamily Loans	$	1,059,072	$	505,437	$	116,286	$	165,606	$	—	$	—	$	3,487	$	1,849,888
Retail:
Risk Rating:
1-2 internal grade	$	—	$	13,344	$	20,162	$	16,400	$	—	$	—	$	—	$	49,906
3-4 internal grade	—		—		12,884		29,445		—		—		—		42,329
Total Retail Loans	$	—	$	13,344	$	33,046	$	45,845	$	—	$	—	$	—	$	92,235
Office:
Risk Rating:
1-2 internal grade	$	55,283	$	253,254	$	131,380	$	36,584	$	26,549	$	—	$	—	$	503,050
3-4 internal grade	—		—		—		22,685		—		—		—		22,685
Total Office Loans	$	55,283	$	253,254	$	131,380	$	59,269	$	26,549	$	—	$	—	$	525,735
Industrial:
Risk Rating:
1-2 internal grade	$	—	$	46,033	$	78,833	$	—	$	—	$	—	$	—	$	124,866
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	—	$	46,033	$	78,833	$	—	$	—	$	—	$	—	$	124,866
Mixed Use:
Risk Rating:

1-2 internal grade	$	32,378	$	30,305	$	—	$	70,679	$	—	$	—	$	—	$	133,362
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	32,378	$	30,305	$	—	$	70,679	$	—	$	—	$	—	$	133,362
Hospitality:
Risk Rating:
1-2 internal grade	$	136,726	$	26,910	$	10,564	$	—	$	—	$	—	$	—	$	174,200
3-4 internal grade	—		—		137,534		52,786		80,140		—		—		270,460
Total Hospitality Loans	$	136,726	$	26,910	$	148,098	$	52,786	$	80,140	$	—	$	—	$	444,660
Self-Storage:
Risk Rating:
1-2 internal grade	$	14,939	$	41,362	$	—	$	—	$	—	$	—	$	—	$	56,301
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	14,939	$	41,362	$	—	$	—	$	—	$	—	$	—	$	56,301
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	—	$	25,936	$	10,162	$	—	$	—	$	—	$	—	$	36,098
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	—	$	25,936	$	10,162	$	—	$	—	$	—	$	—	$	36,098
Total	$	1,298,398	$	942,581	$	517,805	$	394,185	$	106,689	$	—	$	3,487	$	3,263,145

December 31, 2020
	2020		2019		2018		2017		2016		2015		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	583,550	$	349,588	$	188,975	$	—	$	—	$	—	$	3,488	$	1,125,601
3-4 internal grade	—		—		35,887		37,812		—		—		—		73,699
Total Multifamily Loans	$	583,550	$	349,588	$	224,862	$	37,812	$	—	$	—	$	3,488	$	1,199,300
Retail:
Risk Rating:
1-2 internal grade	$	13,277	$	22,760	$	16,400	$	—	$	—	$	—	$	—	$	52,437
3-4 internal grade	—		12,872		29,425		—		—		—		—		42,297
Total Retail Loans	$	13,277	$	35,632	$	45,825	$	—	$	—	$	—	$	—	$	94,734
Office:
Risk Rating:
1-2 internal grade	$	244,301	$	160,709	$	61,169	$	40,846	$	—	$	—	$	—	$	507,025
3-4 internal grade	—		—		—		8,392		—		—		—		8,392
Total Office Loans	$	244,301	$	160,709	$	61,169	$	49,238	$	—	$	—	$	—	$	515,417
Industrial:
Risk Rating:

1-2 internal grade	$	119,193	$	89,590	$	—	$	—	$	—	$	33,655	$	—	$	242,438
3-4 internal grade	—		—		—		—		—		—		—		—
Total Industrial Loans	$	119,193	$	89,590	$	—	$	—	$	—	$	33,655	$	—	$	242,438
Mixed Use:
Risk Rating:
1-2 internal grade	$	30,246	$	—	$	59,451	$	12,839	$	—	$	—	$	—	$	102,536
3-4 internal grade	—		—		—		—		—		—		—		—
Total Mixed Use Loans	$	30,246	$	—	$	59,451	$	12,839	$	—	$	—	$	—	$	102,536
Hospitality:
Risk Rating:
1-2 internal grade	$	26,878	$	10,547	$	—	$	—	$	—	$	—	$	—	$	37,425
3-4 internal grade	—		160,079		115,026		90,612		—		—		—		365,717
Total Hospitality Loans	$	26,878	$	170,626	$	115,026	$	90,612	$	—	$	—	$	—	$	403,142
Self-Storage:
Risk Rating:
1-2 internal grade	$	41,305	$	—	$	44,908	$	—	$	—	$	—	$	—	$	86,213
3-4 internal grade	—		—		—		—		—		—		—		—
Total Self-Storage Loans	$	41,305	$	—	$	44,908	$	—	$	—	$	—	$	—	$	86,213
Manufactured Housing:
Risk Rating:
1-2 internal grade	$	25,905	$	45,049	$	—	$	—	$	—	$	—	$	—	$	70,954
3-4 internal grade	—		—		—		—		—		—		—		—
Total Manufactured Housing Loans	$	25,905	$	45,049	$	—	$	—	$	—	$	—	$	—	$	70,954
Total	$	1,084,655	$	851,194	$	551,241	$	190,501	$	—	$	33,655	$	3,488	$	2,714,734

The following table represents the allocation by risk rating for the Company's commercial mortgage loans, held for investment (dollars in thousands):

September 30, 2021				December 31, 2020
Risk Rating	Number of Loans	Par Value		Risk Rating	Number of Loans	Par Value
1	—	$	—	1	—	$	—
2	130	2,900,711		2	104	2,232,045
3	19	315,641		3	22	384,040
4	1	57,075		4	4	106,778
5	—	—		5	—	—
	150	$	3,273,427		130	$	2,722,863

Schedule of financing receivable past due

The following table presents an aging summary of the loans amortized cost basis at September 30, 2021 (dollars in thousands):

	Multifamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self-Storage		Manufactured Housing		Total
Status:
Current	$	1,849,888	$	92,235	$	525,735	$	124,866	$	133,362	$	387,585	$	56,301	$	36,098	$	3,206,070
1-29 days past due	—		—		—		—		—		—				—		—
30-59 days past due	—		—		—		—		—		—		—		—		—
60-89 days past due	—		—		—		—		—		—		—		—		—
90-119 days past due	—		—		—		—		—		—		—		—		—
120+ days past due (1)	—		—		—		—		—		57,075		—		—		57,075
Total	$	1,849,888	$	92,235	$	525,735	$	124,866	$	133,362	$	444,660	$	56,301	$	36,098	$	3,263,145

________________________

(1) For the three and nine months ended September 30, 2021, there was no interest income recognized on this loan.

Schedule of real estate notes receivable rollforward

For the nine months ended September 30, 2021 and year ended December 31, 2020, the activity in the Company's commercial mortgage loans, held for investment portfolio was as follows (dollars in thousands):

	Nine Months Ended September 30,		Year Ended December 31,
	2021		2020
Balance at Beginning of Year	$	2,693,848	$	2,762,042
Cumulative-effect adjustment upon adoption of ASU 2016-13	—		(7,211)
Acquisitions and originations	1,395,556		1,287,720
Principal repayments	(769,103)		(1,223,490)
Discount accretion/premium amortization	4,421		6,146
Loans transferred from/(to) commercial real estate loans, held for sale	(38,161)		(76,979)
Net fees capitalized into carrying value of loans	(6,779)		(6,562)
(Provision)/benefit for credit losses	5,098		(13,181)
Charge-off from allowance	289		427
Transfer to real estate owned	(37,523)		(35,064)
Balance at End of Period	$	3,247,646	$	2,693,848

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Real Estate Securities (Tables)

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of real estate securities

The following is a summary of the Company's real estate securities, CMBS, as of December 31, 2020 (dollars in thousands):

December 31, 2020
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	3.0%	5/15/2022	$13,250	$12,657
CMBS 2	2.2%	6/26/2025	10,800	10,335
CMBS 3	2.5%	2/15/2036	40,000	38,292
CMBS 4	1.9%	6/15/2037	8,000	7,892
CMBS 5	2.1%	9/15/2037	24,000	23,297
CMBS 6	2.3%	6/15/2034	12,000	11,580
CMBS 7	1.5%	12/15/2036	20,000	18,975
CMBS 8	1.8%	12/15/2036	25,000	23,268
CMBS 9	2.3%	3/15/2035	25,665	24,840

Available-for-sale debt securities

The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CMBS investments by investment type as of December 31, 2020 (dollars in thousands):

	Amortized Cost		Credit Loss Allowance		Unrealized Gain		Unrealized Loss		Fair Value
December 31, 2020
CLOs	$	123,444	$	—	$	—	$	(4,888)	$	118,556
SASB	55,948		—		—		(3,368)		52,580
Total	$	179,392	$	—	$	—	$	(8,256)	$	171,136

The following table provides information on the amounts of gain/(loss) on the Company's real estate securities, CMBS, available for sale (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Unrealized gain/(loss) on available for sale securities	$	—	$	4,199	$	1,665	$	(9,380)
Reclassification of net (gain)/loss on available for sale securities included in net income	—		14,457		6,591		748
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	$	—	$	18,656	$	8,256	$	(8,632)

Schedule of unrealized loss on investments

The following table provides information on the unrealized losses and fair value on the Company's real estate securities, CMBS, available for sale that were in an unrealized loss position, and for which an allowance for credit losses has not been recorded, in each case as of December 31, 2020 (amounts in thousands):

	Fair Value				Unrealized Loss
	Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months		Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months
December 31, 2020
CLOs	$	63,131	$	55,425	$	(2,824)	$	(2,065)
SASB	—		52,580		—		(3,367)
Total	$	63,131	$	108,005	$	(2,824)	$	(5,432)

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Real Estate Owned (Tables)

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Summary of real estate owned

The following table summarizes the Company's real estate owned asset as of September 30, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Site Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
September 2021 (1)	Industrial	Jeffersonville, GA	$	3,436	$	87,187	$	—	$	—	$	90,623
			$	3,436	$	87,187	$	—	$	—	$	90,623

________________________

(1) See Note 2 - Summary of Significant Accounting Policies.

The following table summarizes the Company's real estate owned asset as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Land		Building and Site Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
October 2019 (1)	Office	Jeffersonville, IN	$	1,887	$	21,989	$	3,565	$	(931)	$	26,510
			$	1,887	$	21,989	$	3,565	$	(931)	$	26,510

________________________

(1) See Note 2 - Summary of Significant Accounting Policies.

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Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Schedule of intangible leased assets

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of September 30, 2021 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
September 2021	Industrial	Jeffersonville, GA	$	49,192	$	—	$	49,192
			$	49,192	$	—	$	49,192

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2020 (dollars in thousands):

Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
October 2019	Office	Jeffersonville, IN	$	14,509	$	(963)	$	13,546
			$	14,509	$	(963)	$	13,546

Schedule of future minimum payments to be received

The following table summarizes the Company's schedule of future minimum rents to be received under the industrial facility lease (dollars in thousands):

Minimum Rents	September 30, 2021
2021 (October - December)	$	1,953
2022	7,889
2023	8,046
2024	8,207
2025	8,372
2026 and beyond	123,520
Total minimum rent	$	157,987

Schedule of expected future amortization expense

The following table summarizes the Company's expected amortization for intangible assets over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):

Amortization Expense	September 30, 2021
2021 (October - December)	$	(723)
2022	(2,894)
2023	(2,894)
2024	(2,894)
2025	(2,894)

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Debt (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of repurchase facilities and agreements

The details of the Company's Repo Facilities at September 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

As of September 30, 2021
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility	$	400,000	$	114,584	$	2,821	2.14	%	10/6/2022
CS Repo Facility (2)	200,000		61,788		2,432		2.95	%	8/11/2022
WF Repo Facility (3)	175,000		102,368		924		1.75	%	11/22/2021
Barclays Revolver Facility (4)	100,000		75,000		223		8.25	%	9/20/2023
Barclays Repo Facility (5)	300,000		196,416		1,512		1.75	%	3/15/2022
Total	$	1,175,000	$	550,156	$	7,912

________________________

(1) For the nine months ended September 30, 2021. Includes amortization of deferred financing costs.

(2) On August 12, 2021, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 11, 2022. Additionally, on November 3, 2021 the committed financing amount was amended from $200 million to $300 million with the option to upsize to $400 million at the Company's discretion.

(3) There are two more one-year extension options available at the Company's discretion. On October 15, 2021 the committed financing amount was upsized from $175 million to $275 million.

(4) On September 8, 2021, the Company amended the maturity date to September 20, 2023. There is one one-year extension option available at the Company's discretion.

(5) There are two one-year extension options available at the Company's discretion.

As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense (1)		Ending Weighted Average Interest Rate		Maturity
JPM Repo Facility (2)	$	300,000	$	113,884	$	5,020	2.54	%	10/6/2022
USB Repo Facility (3)	100,000		5,775		599		2.40	%	6/15/2021
CS Repo Facility (4)	200,000		106,971		3,539		2.84	%	8/19/2021
WF Repo Facility (5)	175,000		27,150		1,041		2.50	%	11/21/2021
Barclays Revolver Facility (6)	100,000		—		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.

(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.

(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.

(6) There is one one-year extension option available at the Company's discretion.

(7) Includes two one-year extensions at the Company's option.

Below is a summary of the Company's MRAs as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Weighted Average
Counterparty	Amount Outstanding		Interest Expense		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of September 30, 2021
JP Morgan Securities LLC	$	18,980	$	205	$	24,105	1.14	%	1
Goldman Sachs International	—		37		—		N/A		N/A
Barclays Capital Inc.	27,551		467		36,162		1.28	%	50
Citigroup Global Markets, Inc.	—		81		—		N/A		N/A
Total/Weighted Average	$	46,531	$	790	$	60,267	1.22	%	30
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	—		1,057		—		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	—		905		—		N/A		N/A
Citigroup Global Markets, Inc.	53,788		2,532		71,723		1.70	%	29
Total/Weighted Average	$	186,828	$	8,719	$	243,373	1.71	%	33

________________________

(1) Includes $60.3 million and $72.2 million of CLO notes, held by the Company, which are eliminated within the real estate securities, at fair value line in the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

Schedule of collateralized loan obligations by tranche

The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer, 2019-FL5 Issuer and 2021-FL6 Issuer (the "CLOs), respectively, as of September 30, 2021 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	—	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		65,176		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		185,596		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2018-FL4 Issuer	Tranche E	28,223		28,223		1M LIBOR + 305	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		369,761		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,374		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
2021-FL6 Issuer	Tranche A	367,500		367,500		1M LIBOR + 110	3/15/2036
2021-FL6 Issuer	Tranche A-S	86,625		86,625		1M LIBOR + 130	3/15/2036
2021-FL6 Issuer	Tranche B	33,250		33,250		1M LIBOR + 160	3/15/2036
2021-FL6 Issuer	Tranche C	41,125		41,125		1M LIBOR + 205	3/15/2036
2021-FL6 Issuer	Tranche D	44,625		44,625		1M LIBOR + 300	3/15/2036
2021-FL6 Issuer	Tranche E	11,375		11,375		1M LIBOR + 350	3/15/2036
		$	2,437,924	$	1,809,280

________________________

(1) Excludes $300.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line in the consolidated balance sheets as of September 30, 2021.

The following table represents the terms of the notes issued by 2018-FL3 Issuer, 2018-FL4 Issuer and 2019-FL5 Issuer, as of December 31, 2020 (dollars in thousands):

CLO Facility	Tranche	Par Value Issued		Par Value Outstanding (1)		Interest Rate	Maturity Date
2018-FL3 Issuer	Tranche A	$	286,700	$	161,745	1M LIBOR + 105	10/15/2034
2018-FL3 Issuer	Tranche A-S	77,775		77,775		1M LIBOR + 135	10/15/2034
2018-FL3 Issuer	Tranche B	41,175		41,175		1M LIBOR + 165	10/15/2034
2018-FL3 Issuer	Tranche C	39,650		39,650		1M LIBOR + 255	10/15/2034
2018-FL3 Issuer	Tranche D	42,700		42,700		1M LIBOR + 345	10/15/2034
2018-FL4 Issuer	Tranche A	416,827		416,659		1M LIBOR + 105	9/15/2035
2018-FL4 Issuer	Tranche A-S	73,813		73,813		1M LIBOR + 130	9/15/2035
2018-FL4 Issuer	Tranche B	56,446		56,446		1M LIBOR + 160	9/15/2035
2018-FL4 Issuer	Tranche C	68,385		68,385		1M LIBOR + 210	9/15/2035
2018-FL4 Issuer	Tranche D	57,531		57,531		1M LIBOR + 275	9/15/2035
2019-FL5 Issuer	Tranche A	407,025		407,025		1M LIBOR + 115	5/15/2029
2019-FL5 Issuer	Tranche A-S	76,950		76,950		1M LIBOR + 148	5/15/2029
2019-FL5 Issuer	Tranche B	50,000		50,000		1M LIBOR + 140	5/15/2029
2019-FL5 Issuer	Tranche C	61,374		61,373		1M LIBOR + 200	5/15/2029
2019-FL5 Issuer	Tranche D	48,600		5,000		1M LIBOR + 240	5/15/2029
2019-FL5 Issuer	Tranche E	20,250		3,000		1M LIBOR + 285	5/15/2029
		$	1,825,201	$	1,639,227

________________________

(1) Excludes $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line in the consolidated balance sheets as of December 31, 2020.

Schedule of collateralized loan obligations

The below table reflects the total assets and liabilities of the Company's outstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of September 30, 2021 and December 31, 2020 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs 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 VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. The VIE's are non-recourse to the Company.

Assets (dollars in thousands)	September 30, 2021		December 31, 2020
Cash (1)	$	123,940	$	99,025
Commercial mortgage loans, held for investment, net (2)	2,288,676		2,044,956
Accrued interest receivable	5,540		5,626
Total Assets	$	2,418,156	$	2,149,607
Liabilities
Notes payable (3)(4)	$	2,092,498	$	1,892,616
Accrued interest payable	1,220		1,240
Total Liabilities	$	2,093,718	$	1,893,856

________________________

(1) Includes $123.3 million and $98.6 million of cash held by the servicer related to CLO loan payoffs as of September 30, 2021 and December 31, 2020, respectively.

(2) The balance is presented net of allowance for credit losses of $8.7 million and $19.4 million as of September 30, 2021 and December 31, 2020, respectively.

(3) Includes $300.1 million and $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligations line of the consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.

(4) The balance is presented net of deferred financing cost and discount of $16.9 million and $13.7 million as of September 30, 2021 and December 31, 2020, respectively.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Summary of the basic and diluted earnings per share

The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and September 30, 2020 (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
Numerator	2021		2020		2021		2020
Net income	$	38,495	$	21,497	$	98,651	$	21,911
Less: Preferred stock dividends	4,804		3,475		12,040		11,445
Less: Undistributed earnings allocated to preferred stock	4,201		1,283		10,706		—
Net income attributable to common stockholders (for basic and diluted earnings per share)	$	29,490	$	16,739	$	75,905	$	10,466
Denominator
Weighted-average common shares outstanding for basic earnings per share	44,185,241		44,405,196		44,245,733		44,348,282
Effect of dilutive shares:
Unvested restricted shares	15,323		15,888		15,737		13,457
Weighted-average common shares outstanding for diluted earnings per share	44,200,564		44,421,084		44,261,470		44,361,739
Basic earnings per share	$	0.67	$	0.38	$	1.72	$	0.24
Diluted earnings per share	$	0.67	$	0.38	$	1.71	$	0.24

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Stock Transactions (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Schedule of share repurchases

The following tables present the activity in the Company's Series A Preferred Stock for the period ended September 30, 2021 and September 30, 2020, respectively (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	40,515	$	202,292
Exchanged for Series D Preferred Stock	(14,950)	(74,748)
Dividends paid in Preferred Stock	2	5
Offering costs	—	(14)
Amortization of offering costs	—	68
Ending Balance, September 30, 2021	25,567	$	127,603
	Shares	Amount
Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	1	4
Offering costs	—	(9)
Amortization of offering costs	—	71
Ending Balance, September 30, 2020	40,515	$	202,280

The following tables present the activity in the Company's Series C Preferred Stock for the period ended September 30, 2021 and September 30, 2020 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	1,400	$	6,962
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	—
Amortization of offering costs	—	7
Ending Balance, September 30, 2021	1,400	$	6,969

	Shares	Amount
Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs	—	(11)
Amortization of offering costs	—	6
Ending Balance, September 30, 2020	1,400	$	6,961

The following table presents the activity in the Company's Series D Preferred Stock for the period ended September 30, 2021 (dollars in thousands, except share amounts):

	Shares	Amount
Balance, December 31, 2020	—	$	—
Issuance of Preferred Stock	17,950	89,748
Dividends paid in Preferred Stock	—	—
Offering Costs	—	(83)
Amortization of offering costs	—	12
Ending Balance, September 30, 2021	17,950	$	89,677

The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2021:

	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2020	8,094	4,121,735	$	19.88
January 1 - January 31, 2021(1)	1,355	525,580	17.53
February 1 - February 28, 2021	—	—	N/A
March 1 - March 31, 2021(1)	—	—	N/A
April 1 - April 30, 2021	—	—	N/A
May 1 - May 31, 2021(1)	—	—	N/A
June 1 - June 30, 2021	—	—	N/A
July 1 - July 31, 2021(2)	1,424	123,257	17.88
August 1 - August 31, 2021	—	—	N/A
September 1 - September 30, 2021(2)	—	—	N/A
Cumulative as of September 30, 2021	10,873	4,770,572	$	19.57

________________________

(1) Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2020, including 15,772 and 3,784 shares which for administrative reasons were processed in March 2021 and May 2021, respectively. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,881,556 shares were not fulfilled for the second semester of 2020.

(2) Reflects shares repurchased pursuant to repurchase requests submitted for the first semester of 2021, including 1,776 shares which for administrative reasons were processed in September 2021. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 761 shares were not fulfilled for the first semester of 2021.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Unfunded commitments under commercial mortgage loans

As of September 30, 2021 and December 31, 2020, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):

Funding Expiration	September 30, 2021		December 31, 2020
2021	$	26,989	$	59,692
2022	41,917		91,420
2023	69,702		69,880
2024	265,295		7,700
2025 and beyond	25,501		—
	$	429,404	$	228,692

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Related Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Schedule of amount contractually due and forgiven in connection with operation related services

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended September 30, 2021 and 2020 and the associated payable as of September 30, 2021 and December 31, 2020 (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Payable as of
	2021		2020		2021		2020		September 30, 2021		December 31, 2020
Acquisition expenses (1)	$	690	$	166	$	1,012	$	483	$	—	$	—
Administrative services expenses	2,980		3,128		9,532		10,180		2,980		2,940
Asset management and subordinated performance fee	8,265		3,749		19,682		11,399		13,025		4,773
Other related party expenses (2)(3)	146		14		182		685		1,135		1,812
Total related party fees and reimbursements	$	12,081	$	7,057	$	30,408	$	22,747	$	17,140	$	9,525

________________________

(1) Total acquisition expenses paid during the three and nine months ended September 30, 2021 were $2.9 million and $7.5 million respectively, of which $2.2 million and $6.5 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets. Total acquisition expenses paid during the three and nine months ended September 30, 2020 were $2.2 million and $5.0 million respectively, of which $2.0 million and $4.5 million were capitalized within the commercial mortgage loans, held for investment and real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets.

(2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated statements of operations.

(3) As of September 30, 2021 and December 31, 2020 the related party payables include $1.1 million and $1.8 million of payments made by the Advisor to third party vendors on behalf of the Company.

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Financial instruments carried at fair value on a recurring basis

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of September 30, 2021 and December 31, 2020 (dollars in thousands):

	Total		Level I		Level II		Level III
September 30, 2021
Assets, at fair value
Commercial mortgage loans, held for sale, measured at fair value	$	99	$	—	$	—	$	99
Other real estate investments, measured at fair value	2,547		—		—		2,547
Interest rate swaps	—		—		—		—
Total assets, at fair value	$	2,646	$	—	$	—	$	2,646
Liabilities, at fair value
Credit default swaps	$	—	$	—	$	—	$	—
Treasury note futures	—		—		—		—
Total liabilities, at fair value	$	—	$	—	$	—	$	—
December 31, 2020
Assets, at fair value
Real estate securities, available for sale, measured at fair value	$	171,136	$	—	$	171,136	$	—
Commercial mortgage loans, held for sale, measured at fair value	67,649		—		—		67,649
Other real estate investments, measured at fair value	2,522		—		—		2,522
Interest rate swaps	25		—		25		—
Total assets, at fair value	$	241,332	$	—	$	171,161	$	70,171
Liabilities, at fair value
Credit default swaps	$	297	$	—	$	297	$	—
Treasury note futures	106		106		—		—
Total liabilities, at fair value	$	403	$	106	$	297	$	—

The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 for which the Company has used Level III inputs to determine fair value (dollars in thousands):

	September 30, 2021
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2021	$	67,649	$	2,522
Transfers into Level III (2)	—		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loans, held for sale	22,211		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	—		27
Net accretion	—		(2)
Purchases	321,278		—
Sales / paydowns	(411,039)		—
Transfers out of Level III (2)	—		—
Ending Balance, September 30, 2021	$	99	$	2,547
	December 31, 2020
	Commercial Mortgage Loans, held for sale, measured at fair value		Other Real Estate Investments, measured at fair value
Beginning balance, January 1, 2020	$	112,562	$	2,557
Transfers into Level III (2)	23,625		—
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loans, held for sale	15,931		—
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments	(75)		(32)
Net accretion	—		(3)
Purchases(1)	267,552		—
Sales / paydowns (1)	(328,321)		—
Transfers out of Level III (2)	(23,625)		—
Ending Balance, December 31, 2020	$	67,649	$	2,522

(1) Excluded from Purchases and Sales/paydowns are $679.1 million and $682.0 million, respectively, of loans that collateralize a CMBS investment required to be consolidated in connection with the Company's retention of the B tranche during the year ended December 31, 2020. Upon disposition of the B tranche during the year ended December 31, 2020, the Company recognized a gain of $2.8 million that is recorded in Realized gain/loss on sale of real estate securities on the consolidated statements of operations.

(2) Transfers in and transfers out include transfers between Commercial mortgage loans, held for sale and Commercial mortgage loans, held for investment.

Fair value measurements, recurring and nonrecurring, valuation techniques

The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of September 30, 2021 and December 31, 2020 (dollars in thousands):

Asset Category	Fair Value		Valuation Methodologies	Unobservable Inputs (1)	Weighted Average (2)	Range
September 30, 2021
Commercial mortgage loans, held for sale, measured at fair value	$	99	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,547		Discounted Cash Flow	Yield	11.4%	10.4% - 12.4%
December 31, 2020
Commercial mortgage loans, held for sale, measured at fair value	$	67,649	Discounted Cash Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,522		Discounted Cash Flow	Yield	13.2%	12.2% - 14.2%

________________________

(1) In determining certain inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments.

(2) Inputs were weighted based on the fair value of the investments included in the range.

Financial instruments not carried at fair value

The fair values of the Company's commercial mortgage loans, held for investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2021 and December 31, 2020 (dollars in thousands):

		Level	Carrying Amount (1)		Fair Value
September 30, 2021
Commercial mortgage loans, held for investment (1)	Asset	III	$	3,263,145	$	3,265,960
Collateralized loan obligations	Liability	III	1,792,353		1,811,509
Mortgage note payable	Liability	III	23,998		23,998
Other financing and loan participation - commercial mortgage loans	Liability	III	37,434		37,434
Unsecured debt	Liability	III	60,000		60,000
December 31, 2020
Commercial mortgage loans, held for investment (1)	Asset	III	$	2,714,734	$	2,724,039
Collateralized loan obligations	Liability	III	1,625,498		1,606,478
Mortgage note payable	Liability	III	29,167		29,167
Other financing and loan participation - commercial mortgage loans	Liability	III	31,379		31,379

________________________

(1) The carrying value is gross of $15.5 million and $20.9 million of allowance for credit losses as of September 30, 2021 and December 31, 2020, respectively.

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivative assets at fair value

The following derivative instruments were outstanding as of September 30, 2021 and December 31, 2020 (dollars in thousands):

			Fair Value
Contract type	Notional		Assets		Liabilities
September 30, 2021
Credit default swaps	$	—	$	—	$	—
Interest rate swaps	17,335		—		—
Treasury note futures	—		—		—
Total	$	17,335	$	—	$	—
December 31, 2020
Credit default swaps	$	46,000	$	—	$	297
Interest rate swaps	32,517		25		—
Treasury note futures	43,500		—		106
Total	$	122,017	$	25	$	403

Schedule of derivative liabilities at fair value

The following derivative instruments were outstanding as of September 30, 2021 and December 31, 2020 (dollars in thousands):

			Fair Value
Contract type	Notional		Assets		Liabilities
September 30, 2021
Credit default swaps	$	—	$	—	$	—
Interest rate swaps	17,335		—		—
Treasury note futures	—		—		—
Total	$	17,335	$	—	$	—
December 31, 2020
Credit default swaps	$	46,000	$	—	$	297
Interest rate swaps	32,517		25		—
Treasury note futures	43,500		—		106
Total	$	122,017	$	25	$	403

Schedule of derivative instruments, gain (loss)

The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the three and nine months ended September 30, 2021 and September 30, 2020:

	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss		Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	(111)	$	32	$	(289)	$	675
Interest rate swaps	(1,282)		1,692		22		414
Treasury note futures	(35)		145		(107)		(1,479)
Options	—		33		—		33
Total	$	(1,428)	$	1,902	$	(374)	$	(357)
	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss		Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	101	$	206	$	(433)	$	269
Interest rate swaps	(4,411)		4,516		323		7,462
Treasury note futures	—		—		735		5,284
Options	—		—		—		35
Total	$	(4,310)	$	4,722	$	625	$	13,050

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Offsetting Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Offsetting [Abstract]

Offsetting assets

The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of September 30, 2021 and December 31, 2020 (dollars in thousands):

							Gross Amounts Not Offset on the Balance Sheet
Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Balance Sheet		Net Amount of Assets Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
September 30, 2021
Derivative instruments, at fair value	$	—	$	—	$	—		$	—	$	—	$	—
December 31, 2020
Derivative instruments, at fair value	$	25	$	—	$	25		$	—	$	—	$	25

Offsetting liabilities

							Gross Amounts Not Offset on the Balance Sheet
Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Liabilities Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
September 30, 2021
Repurchase agreements - commercial mortgage loans	$	550,156	$	—	$	550,156		$	858,613	$	5,015	$	—
Repurchase agreements - real estate securities	46,531		—		46,531			60,267		—		—
Derivative instruments, at fair value	—		—		—			—		3,886		—
December 31, 2020
Repurchase agreements - commercial mortgage loans	$	276,340	$	—	$	276,340		$	496,030	$	5,016	$	—
Repurchase agreements - real estate securities	186,828		—		186,828			245,956		1,146		—
Derivative instruments, at fair value	403		—		403			—		3,435		—

________________________(1) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets.

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Schedule of segment reporting information, by segment

The following table represents the Company's operations by segment for the three and nine months ended September 30, 2021 and September 30, 2020 (dollars in thousands):

Three Months Ended September 30, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	47,747	$	47,166	$	—	$	581	$	—
Revenue from Real Estate Owned	1,015		—		—		—		1,015
Interest expense	11,988		11,263		148		232		345
Net income	38,495		25,056		(148)		3,984		9,603
Total assets as of September 30, 2021	3,635,478		3,436,065		814		57,437		141,162
Three Months Ended September 30, 2020
Interest income	$	44,414	$	39,944	$	3,996	$	474	$	—
Revenue from Real Estate Owned	1,017		—		—		—		1,017
Interest expense	15,113		10,194		3,393		494		1,032
Net income	21,497		25,158		(3,797)		(162)		298
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519
Nine Months Ended September 30, 2021	Total		Real Estate Debt and Other Real Estate Investments		Real Estate Securities		TRS		Real Estate Owned
Interest income	$	138,969	$	135,945	$	461	$	2,563	$	—
Revenue from Real Estate Owned	2,447		—		—		—		2,447
Interest expense	35,994		34,887		720		812		1,014
Net income	98,651		74,745		(196)		13,434		10,667
Total assets as of September 30, 2021	3,635,478		3,436,065		814		57,437		141,162
Nine Months Ended September 30, 2020
Interest income	$	135,509	$	123,284	$	9,870	$	2,355	$	—
Revenue from Real Estate Owned	3,474		—		—		—		3,474
Interest expense	54,740		43,735		7,670		1,735		1,600
Net income	21,911		40,273		(7,947)		(8,290)		(2,125)
Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519

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Summary of Significant Accounting Policies (Details) $ / shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 19, 2022 shares	Sep. 30, 2021 USD ($) $ / shares	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) segment $ / shares	Sep. 30, 2020 USD ($)
Equity, Class of Treasury Stock [Line Items]
Minimum distribution percentage to qualify for REIT taxation status				90.00%
Income tax expense | $		$ 1,148	$ 178	$ 3,418	$ (2,466)
Number of reportable segments | segment				4
Forecast
Equity, Class of Treasury Stock [Line Items]
Conversion of stock, preferred stock to common stock, notice period	10 days
Convertible preferred stock purchase agreements | Forecast
Equity, Class of Treasury Stock [Line Items]
Preferred stock converted to common stock, per share stock consideration | shares	299.2
Convertible Series A Preferred Stock
Equity, Class of Treasury Stock [Line Items]
Liquidation preference (in dollars per share)		$ 5		$ 5
Rate of dividend accrual (in percent)				4.00%
Dividend accrual increase contingent on rating (in percent)				1.00%
Convertible Series C Preferred Stock
Equity, Class of Treasury Stock [Line Items]
Liquidation preference (in dollars per share)		$ 5		$ 5
Rate of dividend accrual (in percent)				4.00%
Percentage of total economic interests needed to convert preferred stock to common stock		50.00%		50.00%
Preferred stock, percentage of vote required for adverse actions to stockholders		67.00%		67.00%
Buildings & Site Improvements
Equity, Class of Treasury Stock [Line Items]
Useful lives of property, plant, and equipment (up to)				40 years
Furniture, fixtures, and equipment
Equity, Class of Treasury Stock [Line Items]
Useful lives of property, plant, and equipment (up to)				15 years

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Commercial Mortgage Loans - Loans Receivable by Class (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, gross	$ 3,263,145	$ 2,714,734
Less: Allowance for credit losses	15,499	20,886
Total commercial mortgage loans, held for investment, net	3,247,646	2,693,848
Senior loans
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, gross	3,239,207	2,698,823
Mezzanine loans
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, gross	$ 23,938	$ 15,911

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Commercial Mortgage Loans - Narrative (Details) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) rating loan	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) rating loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision/(benefit) for credit losses		$ (1,613)	$ (3,710)	$ (5,452)	$ 14,929
Par value		3,263,145		$ 3,263,145		$ 2,714,734
Initial risk rating | rating				2.0
Weighted average risk rating of loans | rating				2.1		2.2
Real estate owned, net of depreciation		90,623		$ 90,623		$ 26,510
Gain on sale of REO				800
Real Estate Acquired in Satisfaction of Debt
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impairment loss at time of transfer	$ 300
Commercial Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision/(benefit) for credit losses		(1,693)		$ (5,098)
Commercial Mortgage Receivable, Held-For-Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan				150		130
Par value		3,273,427		$ 3,273,427		$ 2,722,863
Commercial Mortgage Receivable, Held-For-Investment | Real Estate Acquired in Satisfaction of Debt
Accounts, Notes, Loans and Financing Receivable [Line Items]
Write-off of commercial mortgage loan				37,800
Real estate owned, net of depreciation		37,500		37,500
Commercial Mortgage Receivable, Held-For-Investment | Real Estate Acquired in Satisfaction of Debt | Land, buildings and improvements
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate owned, net of depreciation		33,000		33,000
Commercial Mortgage Receivable, Held-For-Investment | Real Estate Acquired in Satisfaction of Debt | Furniture and fixtures
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate owned, net of depreciation		4,500		4,500
Commercial Mortgage Receivable, Held-For-Investment | Commercial Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value		3,263,145		$ 3,263,145		$ 2,714,734
Commercial Mortgage Receivable, Held-For-Investment | Commercial Portfolio Segment | Nonperforming Financial Instruments
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan				1		2
Nonaccrual loans		57,100		$ 57,100		$ 94,900
Commercial Mortgage Receivable, Held-For-Sale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan				1		3
Par value		$ 100		$ 100		$ 67,650

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Commercial Mortgage Loans - Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance			$ 20,886
Provision/(benefit) for credit losses	$ (1,613)	$ (3,710)	(5,452)	$ 14,929
Ending Balance	15,499		15,499
Commercial Portfolio Segment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	17,192		20,886
Provision/(benefit) for credit losses	(1,693)		(5,098)
Write offs	0		(289)
Ending Balance	15,499		15,499
Commercial Portfolio Segment | Multifamily
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	7,389		3,095
Provision/(benefit) for credit losses	(1,278)		3,305
Write offs	0		(289)
Ending Balance	6,111		6,111
Commercial Portfolio Segment | Retail
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	103		404
Provision/(benefit) for credit losses	261		(40)
Write offs	0		0
Ending Balance	364		364
Commercial Portfolio Segment | Office
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,028		1,575
Provision/(benefit) for credit losses	509		(38)
Write offs	0		0
Ending Balance	1,537		1,537
Commercial Portfolio Segment | Industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	199		3,795
Provision/(benefit) for credit losses	136		(3,460)
Write offs	0		0
Ending Balance	335		335
Commercial Portfolio Segment | Mixed Use
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	440		132
Provision/(benefit) for credit losses	34		342
Write offs	0		0
Ending Balance	474		474
Commercial Portfolio Segment | Hospitality
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	7,715		11,646
Provision/(benefit) for credit losses	(1,286)		(5,217)
Write offs	0		0
Ending Balance	6,429		6,429
Commercial Portfolio Segment | Self Storage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	241		117
Provision/(benefit) for credit losses	(89)		35
Write offs	0		0
Ending Balance	152		152
Commercial Portfolio Segment | Manufactured Housing
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	77		122
Provision/(benefit) for credit losses	20		(25)
Write offs	0		0
Ending Balance	97		97
Commercial Portfolio Segment | Unfunded Loan Commitment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	231		665
Provision/(benefit) for credit losses	80		(354)
Ending Balance	311		311
Commercial Portfolio Segment | Unfunded Loan Commitment | Multifamily
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	120		85
Provision/(benefit) for credit losses	67		102
Ending Balance	187		187
Commercial Portfolio Segment | Unfunded Loan Commitment | Retail
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	0		0
Provision/(benefit) for credit losses	1		1
Ending Balance	1		1
Commercial Portfolio Segment | Unfunded Loan Commitment | Office
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	28		47
Provision/(benefit) for credit losses	15		(4)
Ending Balance	43		43
Commercial Portfolio Segment | Unfunded Loan Commitment | Industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	10		418
Provision/(benefit) for credit losses	3		(405)
Ending Balance	13		13
Commercial Portfolio Segment | Unfunded Loan Commitment | Mixed Use
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	8		14
Provision/(benefit) for credit losses	3		(3)
Ending Balance	11		11
Commercial Portfolio Segment | Unfunded Loan Commitment | Hospitality
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	65		101
Provision/(benefit) for credit losses	(9)		(45)
Ending Balance	56		56
Commercial Portfolio Segment | Unfunded Loan Commitment | Self Storage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	0		0
Provision/(benefit) for credit losses	0		0
Ending Balance	0		0
Commercial Portfolio Segment | Unfunded Loan Commitment | Manufactured Housing
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	0		0
Provision/(benefit) for credit losses	0		0
Ending Balance	$ 0		$ 0

XML

Commercial Mortgage Loans - Commercial Mortgage Loan Portfolio, Excluding Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 3,263,145	$ 2,714,734
Commercial Mortgage Receivable, Held-For-Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 3,273,427	$ 2,722,863
Commercial Mortgage Receivable, Held-For-Investment | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	100.00%	100.00%
Commercial Mortgage Receivable, Held-For-Investment | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	100.00%	100.00%
Commercial Mortgage Receivable, Held-For-Investment | Southeast
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 1,030,591	$ 796,908
Commercial Mortgage Receivable, Held-For-Investment | Southeast | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	31.50%	29.30%
Commercial Mortgage Receivable, Held-For-Investment | Southwest
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 1,027,246	$ 515,392
Commercial Mortgage Receivable, Held-For-Investment | Southwest | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	31.40%	18.90%
Commercial Mortgage Receivable, Held-For-Investment | Mideast
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 431,104	$ 473,514
Commercial Mortgage Receivable, Held-For-Investment | Mideast | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	13.20%	17.40%
Commercial Mortgage Receivable, Held-For-Investment | Far West
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 368,565	$ 415,173
Commercial Mortgage Receivable, Held-For-Investment | Far West | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	11.30%	15.20%
Commercial Mortgage Receivable, Held-For-Investment | Great Lakes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 134,591	$ 199,203
Commercial Mortgage Receivable, Held-For-Investment | Great Lakes | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	4.10%	7.30%
Commercial Mortgage Receivable, Held-For-Investment | Plains
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 94,292	$ 116,143
Commercial Mortgage Receivable, Held-For-Investment | Plains | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	2.90%	4.30%
Commercial Mortgage Receivable, Held-For-Investment | Various
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 70,118	$ 136,855
Commercial Mortgage Receivable, Held-For-Investment | Various | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	2.10%	5.00%
Commercial Mortgage Receivable, Held-For-Investment | New England
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 68,169	$ 69,675
Commercial Mortgage Receivable, Held-For-Investment | New England | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	2.00%	2.60%
Commercial Mortgage Receivable, Held-For-Investment | Rocky Mountain
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 48,751	$ 0
Commercial Mortgage Receivable, Held-For-Investment | Rocky Mountain | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	1.50%	0.00%
Commercial Mortgage Receivable, Held-For-Investment | Multifamily
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 1,856,441	$ 1,202,694
Commercial Mortgage Receivable, Held-For-Investment | Multifamily | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	56.70%	44.20%
Commercial Mortgage Receivable, Held-For-Investment | Office
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 527,371	$ 517,464
Commercial Mortgage Receivable, Held-For-Investment | Office | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	16.10%	19.00%
Commercial Mortgage Receivable, Held-For-Investment | Hospitality
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 445,770	$ 403,908
Commercial Mortgage Receivable, Held-For-Investment | Hospitality | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	13.60%	14.80%
Commercial Mortgage Receivable, Held-For-Investment | Mixed Use
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 133,644	$ 102,756
Commercial Mortgage Receivable, Held-For-Investment | Mixed Use | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	4.10%	3.80%
Commercial Mortgage Receivable, Held-For-Investment | Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 125,120	$ 243,404
Commercial Mortgage Receivable, Held-For-Investment | Industrial | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	3.80%	8.90%
Commercial Mortgage Receivable, Held-For-Investment | Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 75,961	$ 78,550
Commercial Mortgage Receivable, Held-For-Investment | Retail | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	2.30%	2.90%
Commercial Mortgage Receivable, Held-For-Investment | Self Storage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 56,495	$ 86,424
Commercial Mortgage Receivable, Held-For-Investment | Self Storage | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	1.70%	3.20%
Commercial Mortgage Receivable, Held-For-Investment | Manufactured Housing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 36,225	$ 71,263
Commercial Mortgage Receivable, Held-For-Investment | Manufactured Housing | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	1.20%	2.60%
Commercial Mortgage Receivable, Held-For-Investment | Land
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 16,400	$ 16,400
Commercial Mortgage Receivable, Held-For-Investment | Land | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	0.50%	0.60%
Commercial Mortgage Receivable, Held-For-Sale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 100	$ 67,650
Commercial Mortgage Receivable, Held-For-Sale | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	100.00%	100.00%
Commercial Mortgage Receivable, Held-For-Sale | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	100.00%	100.00%
Commercial Mortgage Receivable, Held-For-Sale | Far West
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 0	$ 58,500
Commercial Mortgage Receivable, Held-For-Sale | Far West | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	0.00%	86.50%
Commercial Mortgage Receivable, Held-For-Sale | Great Lakes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 100	$ 9,150
Commercial Mortgage Receivable, Held-For-Sale | Great Lakes | Geographic Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	100.00%	13.50%
Commercial Mortgage Receivable, Held-For-Sale | Multifamily
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 100	$ 100
Commercial Mortgage Receivable, Held-For-Sale | Multifamily | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	100.00%	0.10%
Commercial Mortgage Receivable, Held-For-Sale | Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 0	$ 67,550
Commercial Mortgage Receivable, Held-For-Sale | Industrial | Customer Concentration Risk | Commercial Mortgage Loans, held for sale, measured at fair value
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage	0.00%	99.90%

XML

Commercial Mortgage Loans - Internal Credit Qualities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 3,263,145	$ 2,714,734
Commercial Mortgage Receivable, Held-For-Investment
Financing Receivable, Credit Quality Indicator [Line Items]
Total	3,273,427	2,722,863
Commercial Mortgage Receivable, Held-For-Investment | Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
Total	1,856,441	1,202,694
Commercial Mortgage Receivable, Held-For-Investment | Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Total	75,961	78,550
Commercial Mortgage Receivable, Held-For-Investment | Office
Financing Receivable, Credit Quality Indicator [Line Items]
Total	527,371	517,464
Commercial Mortgage Receivable, Held-For-Investment | Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total	125,120	243,404
Commercial Mortgage Receivable, Held-For-Investment | Mixed Use
Financing Receivable, Credit Quality Indicator [Line Items]
Total	133,644	102,756
Commercial Mortgage Receivable, Held-For-Investment | Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
Total	445,770	403,908
Commercial Mortgage Receivable, Held-For-Investment | Self Storage
Financing Receivable, Credit Quality Indicator [Line Items]
Total	56,495	86,424
Commercial Mortgage Receivable, Held-For-Investment | Manufactured Housing
Financing Receivable, Credit Quality Indicator [Line Items]
Total	36,225	71,263
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	1,298,398	1,084,655
Originated in prior fiscal year one	942,581	851,194
Originated in prior fiscal year two	517,805	551,241
Originated in prior fiscal year three	394,185	190,501
Originated in prior fiscal year four	106,689	0
Originated in prior fiscal year five	0	33,655
Originated before prior fiscal year five	3,487	3,488
Total	3,263,145	2,714,734
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	1,059,072	583,550
Originated in prior fiscal year one	505,437	349,588
Originated in prior fiscal year two	116,286	224,862
Originated in prior fiscal year three	165,606	37,812
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	3,487	3,488
Total	1,849,888	1,199,300
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	13,277
Originated in prior fiscal year one	13,344	35,632
Originated in prior fiscal year two	33,046	45,825
Originated in prior fiscal year three	45,845	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	92,235	94,734
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Office
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	55,283	244,301
Originated in prior fiscal year one	253,254	160,709
Originated in prior fiscal year two	131,380	61,169
Originated in prior fiscal year three	59,269	49,238
Originated in prior fiscal year four	26,549	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	525,735	515,417
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	119,193
Originated in prior fiscal year one	46,033	89,590
Originated in prior fiscal year two	78,833	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	33,655
Originated before prior fiscal year five	0	0
Total	124,866	242,438
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Mixed Use
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	32,378	30,246
Originated in prior fiscal year one	30,305	0
Originated in prior fiscal year two	0	59,451
Originated in prior fiscal year three	70,679	12,839
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	133,362	102,536
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	136,726	26,878
Originated in prior fiscal year one	26,910	170,626
Originated in prior fiscal year two	148,098	115,026
Originated in prior fiscal year three	52,786	90,612
Originated in prior fiscal year four	80,140	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	444,660	403,142
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Self Storage
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	14,939	41,305
Originated in prior fiscal year one	41,362	0
Originated in prior fiscal year two	0	44,908
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	56,301	86,213
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | Manufactured Housing
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	25,905
Originated in prior fiscal year one	25,936	45,049
Originated in prior fiscal year two	10,162	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	36,098	70,954
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	1,059,072	583,550
Originated in prior fiscal year one	505,437	349,588
Originated in prior fiscal year two	116,286	188,975
Originated in prior fiscal year three	128,581	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	3,487	3,488
Total	1,812,863	1,125,601
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	13,277
Originated in prior fiscal year one	13,344	22,760
Originated in prior fiscal year two	20,162	16,400
Originated in prior fiscal year three	16,400	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	49,906	52,437
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Office
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	55,283	244,301
Originated in prior fiscal year one	253,254	160,709
Originated in prior fiscal year two	131,380	61,169
Originated in prior fiscal year three	36,584	40,846
Originated in prior fiscal year four	26,549	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	503,050	507,025
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	119,193
Originated in prior fiscal year one	46,033	89,590
Originated in prior fiscal year two	78,833	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	33,655
Originated before prior fiscal year five	0	0
Total	124,866	242,438
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Mixed Use
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	32,378	30,246
Originated in prior fiscal year one	30,305	0
Originated in prior fiscal year two	0	59,451
Originated in prior fiscal year three	70,679	12,839
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	133,362	102,536
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	136,726	26,878
Originated in prior fiscal year one	26,910	10,547
Originated in prior fiscal year two	10,564	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	174,200	37,425
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Self Storage
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	14,939	41,305
Originated in prior fiscal year one	41,362	0
Originated in prior fiscal year two	0	44,908
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	56,301	86,213
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 1-2 internal grade | Manufactured Housing
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	25,905
Originated in prior fiscal year one	25,936	45,049
Originated in prior fiscal year two	10,162	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	36,098	70,954
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	0
Originated in prior fiscal year two	0	35,887
Originated in prior fiscal year three	37,025	37,812
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	37,025	73,699
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	12,872
Originated in prior fiscal year two	12,884	29,425
Originated in prior fiscal year three	29,445	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	42,329	42,297
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Office
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	0
Originated in prior fiscal year two	0	0
Originated in prior fiscal year three	22,685	8,392
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	22,685	8,392
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	0
Originated in prior fiscal year two	0	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	0	0
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Mixed Use
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	0
Originated in prior fiscal year two	0	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	0	0
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	160,079
Originated in prior fiscal year two	137,534	115,026
Originated in prior fiscal year three	52,786	90,612
Originated in prior fiscal year four	80,140	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	270,460	365,717
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Self Storage
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	0
Originated in prior fiscal year two	0	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	0	0
Commercial Portfolio Segment | Commercial Mortgage Receivable, Held-For-Investment | 3-4 internal grade | Manufactured Housing
Financing Receivable, Credit Quality Indicator [Line Items]
Originated in current fiscal year	0	0
Originated in prior fiscal year one	0	0
Originated in prior fiscal year two	0	0
Originated in prior fiscal year three	0	0
Originated in prior fiscal year four	0	0
Originated in prior fiscal year five	0	0
Originated before prior fiscal year five	0	0
Total	$ 0	$ 0

XML

Commercial Mortgage Loans - Allowance Past Due (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Past Due [Line Items]
Loans, gross	$ 3,263,145	$ 2,714,734
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment
Financing Receivable, Past Due [Line Items]
Loans, gross	3,263,145
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	3,206,070
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	57,075
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily
Financing Receivable, Past Due [Line Items]
Loans, gross	1,849,888
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	1,849,888
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Multifamily | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail
Financing Receivable, Past Due [Line Items]
Loans, gross	92,235
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	92,235
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Retail | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office
Financing Receivable, Past Due [Line Items]
Loans, gross	525,735
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	525,735
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Office | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial
Financing Receivable, Past Due [Line Items]
Loans, gross	124,866
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	124,866
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Industrial | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use
Financing Receivable, Past Due [Line Items]
Loans, gross	133,362
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	133,362
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Mixed Use | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality
Financing Receivable, Past Due [Line Items]
Loans, gross	444,660
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	387,585
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Hospitality | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	57,075
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage
Financing Receivable, Past Due [Line Items]
Loans, gross	56,301
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	56,301
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Self Storage | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing
Financing Receivable, Past Due [Line Items]
Loans, gross	36,098
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing | Current
Financing Receivable, Past Due [Line Items]
Loans, gross	36,098
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing | 1-29 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing | 30-59 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing | 60-89 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing | 90-119 days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	0
Financing Receivable, Held-to-Maturity | Commercial Portfolio Segment | Manufactured Housing | 120+ days past due
Financing Receivable, Past Due [Line Items]
Loans, gross	$ 0

XML

Commercial Mortgage Loans - Allocation by Risk Rating (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($) loan	Dec. 31, 2020 USD ($) loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Par value	$ 3,263,145	$ 2,714,734
Commercial Mortgage Receivable, Held-For-Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	150	130
Par value	$ 3,273,427	$ 2,722,863
Commercial Mortgage Receivable, Held-For-Investment | 1
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	0	0
Par value	$ 0	$ 0
Commercial Mortgage Receivable, Held-For-Investment | 2
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	130	104
Par value	$ 2,900,711	$ 2,232,045
Commercial Mortgage Receivable, Held-For-Investment | 3
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	19	22
Par value	$ 315,641	$ 384,040
Commercial Mortgage Receivable, Held-For-Investment | 4
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	1	4
Par value	$ 57,075	$ 106,778
Commercial Mortgage Receivable, Held-For-Investment | 5
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | loan	0	0
Par value	$ 0	$ 0

XML

Commercial Mortgage Loans - Commercial Mortgage Loan Portfolio, Held-For-Investment (Details) - Commercial Mortgage Receivable, Held-For-Investment - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Balance at Beginning of Year	$ 2,693,848	$ 2,762,042
Acquisitions and originations	1,395,556	1,287,720
Principal repayments	(769,103)	(1,223,490)
Discount accretion/premium amortization	4,421	6,146
Loans transferred from/(to) commercial real estate loans, held for sale	(38,161)	(76,979)
Net fees capitalized into carrying value of loans	(6,779)	(6,562)
(Provision)/benefit for credit losses	5,098	(13,181)
Charge-off from allowance	289	427
Transfer to real estate owned	(37,523)	(35,064)
Balance at End of Period	$ 3,247,646	2,693,848
Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Balance at Beginning of Year		$ (7,211)

XML

Real Estate Securities - Summary of Company's Real Estate Securities, CMBS (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Fair Value	$ 0	$ 171,136
CMBS 1
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		3.00%
Available For Sale Securities, Par Value Amount		$ 13,250
Fair Value		$ 12,657
CMBS 2
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		2.20%
Available For Sale Securities, Par Value Amount		$ 10,800
Fair Value		$ 10,335
CMBS 3
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		2.50%
Available For Sale Securities, Par Value Amount		$ 40,000
Fair Value		$ 38,292
CMBS 4
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		1.90%
Available For Sale Securities, Par Value Amount		$ 8,000
Fair Value		$ 7,892
CMBS 5
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		2.10%
Available For Sale Securities, Par Value Amount		$ 24,000
Fair Value		$ 23,297
CMBS 6
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		2.30%
Available For Sale Securities, Par Value Amount		$ 12,000
Fair Value		$ 11,580
CMBS 7
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		1.50%
Available For Sale Securities, Par Value Amount		$ 20,000
Fair Value		$ 18,975
CMBS 8
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		1.80%
Available For Sale Securities, Par Value Amount		$ 25,000
Fair Value		$ 23,268
CMBS 9
Debt Securities, Available-for-sale [Line Items]
Available For Sale Securities, Weighted Average Interest Rate		2.30%
Available For Sale Securities, Par Value Amount		$ 25,665
Fair Value		$ 24,840

XML

Real Estate Securities - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) investment security	Sep. 30, 2021 USD ($)
Debt Securities, Available-for-sale [Line Items]
Aggregate carrying value	$ 179,392	$ 0
Number of positions | security	7
CMBS
Debt Securities, Available-for-sale [Line Items]
Number of investments | investment	9
Aggregate carrying value	$ 179,392
Unrealized loss	$ 8,256
CLOs
Debt Securities, Available-for-sale [Line Items]
Debt securities, weighted average contractual maturity	14 years
Aggregate carrying value	$ 123,444
Unrealized loss	$ 4,888
SASB
Debt Securities, Available-for-sale [Line Items]
Debt securities, weighted average contractual maturity	14 years
Aggregate carrying value	$ 55,948
Unrealized loss	$ 3,368

XML

Real Estate Securities - Summary of Changes in Fair Value of CMBS Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 0	$ 179,392
Fair Value	$ 0	171,136
CMBS
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		179,392
Credit Loss Allowance		0
Unrealized Gain		0
Unrealized Loss		(8,256)
Fair Value		171,136
CLOs
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		123,444
Credit Loss Allowance		0
Unrealized Gain		0
Unrealized Loss		(4,888)
Fair Value		118,556
SASB
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		55,948
Credit Loss Allowance		0
Unrealized Gain		0
Unrealized Loss		(3,368)
Fair Value		$ 52,580

XML

Real Estate Securities - Gains (Losses) On Real Estate Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Unrealized gain/(loss) on available for sale securities	$ 0	$ 4,199	$ 1,665	$ (9,380)
Reclassification of net (gain)/loss on available for sale securities included in net income	0	14,457	6,591	748
Unrealized gain/(loss) on available for sale securities, net of reclassification adjustment	$ 0	$ 18,656	$ 8,256	$ (8,632)
CMBS
Debt Securities, Available-for-sale [Line Items]
Securities with an unrealized loss less than 12 months					$ 63,131
Securities with an unrealized loss greater than 12 months					108,005
Securities with an unrealized loss less than 12 months					(2,824)
Securities with an unrealized loss greater than 12 months					(5,432)
CLOs
Debt Securities, Available-for-sale [Line Items]
Securities with an unrealized loss less than 12 months					63,131
Securities with an unrealized loss greater than 12 months					55,425
Securities with an unrealized loss less than 12 months					(2,824)
Securities with an unrealized loss greater than 12 months					(2,065)
SASB
Debt Securities, Available-for-sale [Line Items]
Securities with an unrealized loss less than 12 months					0
Securities with an unrealized loss greater than 12 months					52,580
Securities with an unrealized loss less than 12 months					0
Securities with an unrealized loss greater than 12 months					$ (3,367)

XML

Real Estate Owned (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, net of depreciation	$ 90,623	$ 26,510
Accumulated depreciation	0	(931)
Real estate owned, net	90,623	26,510
Land
Real Estate [Line Items]
Real estate owned, gross	3,436	1,887
Building and Site Improvements
Real Estate [Line Items]
Real estate owned, gross	87,187	21,989
Furniture, Fixtures and Equipment
Real Estate [Line Items]
Real estate owned, gross	0	3,565
Industrial | Jeffersonville, GA
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, accumulated depreciation	0
Real estate owned, acquired through foreclosure, net of depreciation	90,623
Industrial | Jeffersonville, GA | Land
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, gross	3,436
Industrial | Jeffersonville, GA | Building and Site Improvements
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, gross	87,187
Industrial | Jeffersonville, GA | Furniture, Fixtures and Equipment
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, gross	$ 0
Office | Jeffersonville, IN
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, accumulated depreciation		(931)
Real estate owned, acquired through foreclosure, net of depreciation		26,510
Office | Jeffersonville, IN | Land
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, gross		1,887
Office | Jeffersonville, IN | Building and Site Improvements
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, gross		21,989
Office | Jeffersonville, IN | Furniture, Fixtures and Equipment
Real Estate [Line Items]
Real estate owned, acquired through foreclosure, gross		$ 3,565

XML

Real Estate Owned - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 17, 2021	Aug. 31, 2021
Real Estate [Line Items]
Depreciation expense	$ 0	$ 300,000	$ 400,000	$ 800,000
Office | Jeffersonville, IN | Held-for-sale
Real Estate [Line Items]
Gain (loss) on sale of properties			$ 8,600,000
Industrial | Jeffersonville, GA
Real Estate [Line Items]
Real estate investment property, net					$ 139,500,000
Industrial | Jeffersonville, GA | Franklin BSP Realty Trust, Inc
Real Estate [Line Items]
Noncontrolling interest, ownership percentage by parent						79.00%
Real estate investments, joint ventures						$ 109,800,000
Equity method investments						$ 21,100,000
Industrial | Jeffersonville, GA | JV Affiliate
Real Estate [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners						21.00%
Equity method investments						$ 5,700,000
Noncontrolling interest in joint ventures						29,800,000
Industrial | Jeffersonville, GA | Mortgages
Real Estate [Line Items]
Debt instrument, face amount					112,700,000
Industrial | Jeffersonville, GA | September 2021 Mortgage Note Payable, Eliminated in Consolidation | Mortgages | Franklin BSP Realty Trust, Inc
Real Estate [Line Items]
Debt instrument, face amount					88,700,000	88,700,000
Industrial | Jeffersonville, GA | September 2021 Mortgage Note Payable, Affiliate | Mortgages | JV Affiliate
Real Estate [Line Items]
Debt instrument, face amount					$ 24,000,000	$ 24,000,000

XML

Leases - Intangible Leased Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Intangible Lease Asset, Gross	$ 49,192	$ 14,509
Accumulated Amortization	0	(963)
Intangible Lease Asset, Net of Amortization	49,192	13,546
Industrial | Jeffersonville, GA
Finite-Lived Intangible Assets [Line Items]
Intangible Lease Asset, Gross	49,192
Accumulated Amortization	0
Intangible Lease Asset, Net of Amortization	$ 49,192
Office | Jeffersonville, IN
Finite-Lived Intangible Assets [Line Items]
Intangible Lease Asset, Gross		14,509
Accumulated Amortization		(963)
Intangible Lease Asset, Net of Amortization		$ 13,546

XML

Leases - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 17, 2021 extension	Oct. 15, 2019 extension
Finite-Lived Intangible Assets [Line Items]
Intangible lease contractual life of lease			20 years
Weighted average life of intangible asset			17 years 1 month 6 days
Amortization	$ 0	$ 200,000	$ 400,000	$ 600,000
Industrial | Jeffersonville, GA
Finite-Lived Intangible Assets [Line Items]
Operating lease minimal annual rate increase					2.00%
Number of lease renewal terms | extension					4
Lease renewal term					5 years
Remaining term of operating lease					17 years 1 month 6 days
Rental income	300,000		300,000
Office | Jeffersonville, IN
Finite-Lived Intangible Assets [Line Items]
Operating lease minimal annual rate increase						150.00%
Number of lease renewal terms | extension						4
Lease renewal term						5 years
Rental income	$ 700,000	$ 2,100,000	$ 700,000	$ 2,100,000

XML

Leases - Future Minimum Payments to be Received (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Leases [Abstract]
2021 (October - December)	$ 1,953
2022	7,889
2023	8,046
2024	8,207
2025	8,372
2026 and beyond	123,520
Total minimum rent	$ 157,987

XML

Leases - Schedule of Expected Amortization Expense (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Leases [Abstract]
2021 (October - December)	$ (723)
2022	(2,894)
2023	(2,894)
2024	(2,894)
2025	$ (2,894)

XML

Debt - Narrative (Details)			1 Months Ended	3 Months Ended		9 Months Ended	12 Months Ended
	Mar. 25, 2021 USD ($) $ / shares shares	Mar. 23, 2020 USD ($)	Aug. 31, 2020 USD ($)	Sep. 30, 2021 USD ($) mortgage_asset $ / shares	Mar. 31, 2020 shares	Sep. 30, 2021 USD ($) mortgage_asset $ / shares	Dec. 31, 2020 USD ($) mortgage_asset $ / shares	Sep. 17, 2021 USD ($)	Aug. 31, 2021 USD ($)	Oct. 15, 2019 USD ($)
Line of Credit Facility [Line Items]
Interest expense						$ 7,912,000	$ 11,632,000
Outstanding balance				$ 37,400,000		37,400,000
Unsecured debt				$ 60,000,000		$ 60,000,000	$ 0
Issuance of Preferred stock (in shares) | shares					650,034
Preferred stock, par value per share (in dollars per share) | $ / shares				$ 0.01		$ 0.01	$ 0.01
Preferred Stock
Line of Credit Facility [Line Items]
Issuance of Preferred stock (in shares) | shares	54,250,000
Preferred stock, par value per share (in dollars per share) | $ / shares	$ 0.001
Liquidation preference (in dollars per share) | $ / shares	$ 1,000
Mortgages | Industrial | Jeffersonville, GA
Line of Credit Facility [Line Items]
Debt instrument, face amount								$ 112,700,000
Mortgages | October 2019 Mortgage Note Payable
Line of Credit Facility [Line Items]
Interest expense				$ 300,000		$ 900,000
Debt instrument, face amount										$ 29,200,000
Stated interest rate				3.85%		3.85%
Mortgages | September 2021 Mortgage Note Payable, Affiliate
Line of Credit Facility [Line Items]
Stated interest rate				3.10%		3.10%
Mortgages | September 2021 Mortgage Note Payable, Affiliate | Industrial | Jeffersonville, GA | JV Affiliate
Line of Credit Facility [Line Items]
Debt instrument, face amount								24,000,000	$ 24,000,000
Mortgages | September 2021 Mortgage Note Payable, Eliminated in Consolidation | Industrial | Jeffersonville, GA | Franklin BSP Realty Trust, Inc
Line of Credit Facility [Line Items]
Debt instrument, face amount								$ 88,700,000	$ 88,700,000
Secured debt | BSPRT 2021-FL6
Line of Credit Facility [Line Items]
Debt instrument, face amount	$ 645,800,000
Secured debt | BSPRT 2021-FL6 | Subsidiaries
Line of Credit Facility [Line Items]
Debt instrument, face amount	72,600,000
Secured debt | U.S. Bank National Association | Collateralized Loan Obligations Issued in 2018-FL3
Line of Credit Facility [Line Items]
Collateral (mortgage asset) | mortgage_asset				15		15	27
Collateral amount				$ 230,200,000		$ 230,200,000	$ 417,900,000
Secured debt | U.S. Bank National Association | Collateralized Loan Obligations Issued in 2018-FL4
Line of Credit Facility [Line Items]
Collateral (mortgage asset) | mortgage_asset				41		41	59
Collateral amount				$ 619,600,000		$ 619,600,000	$ 852,100,000
Secured debt | U.S. Bank National Association | Collateralized Loan Obligations Issued in 2019-FL5
Line of Credit Facility [Line Items]
Collateral (mortgage asset) | mortgage_asset				56		56	54
Collateral amount				$ 754,500,000		$ 754,500,000	$ 799,800,000
Secured debt | U.S. Bank National Association | Collateralized Loan Obligations Issued in 2021-FL6
Line of Credit Facility [Line Items]
Collateral (mortgage asset) | mortgage_asset				49		49
Collateral amount				$ 699,200,000		$ 699,200,000
Secured debt | U.S. Bank National Association | BSPRT 2021-FL6, BSPRT 2018-FL3, BSPRT 2018-FL4 and BSPRT 2019-FL5
Line of Credit Facility [Line Items]
Collateral amount				311,200,000		311,200,000	$ 256,900,000
Secured debt | Third Party Investors | BSPRT 2021-FL6
Line of Credit Facility [Line Items]
Debt instrument, face amount	$ 573,100,000
Sterling National Bank
Line of Credit Facility [Line Items]
Amount of interest in loan transferred		$ 15,200,000
Interest expense				200,000		700,000
Security benefit life insurance company | Unsecured debt
Line of Credit Facility [Line Items]
Interest expense				400,000		1,200,000
Debt instrument, face amount			$ 100,000,000
Unsecured debt				$ 60,000,000		$ 60,000,000
Security benefit life insurance company | Unsecured debt | LIBOR
Line of Credit Facility [Line Items]
Interest Rate			4.50%
Minimum
Line of Credit Facility [Line Items]
Advance rate of mortgage loan (percent)						65.00%
Master repurchase agreements maturity (days)						30 days
Maximum
Line of Credit Facility [Line Items]
Advance rate of mortgage loan (percent)						80.00%
Master repurchase agreements maturity (days)						90 days

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Debt - Schedule of Repurchase Facilities (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2021 USD ($) extension	Dec. 31, 2020 USD ($) extension	Nov. 03, 2021 USD ($)	Oct. 15, 2021 USD ($)	Dec. 31, 2019 USD ($)
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing	$ 1,175,000,000	$ 1,175,000,000
Amount Outstanding	550,156,000	276,340,000
Interest expense	7,912,000	11,632,000
Secured debt | Barclays Repo Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing	300,000,000	300,000,000
Amount Outstanding	196,416,000	22,560,000
Interest expense	$ 1,512,000	$ 1,046,000
Ending weighted average interest rate	1.75%	2.51%
Number of extension options | extension		2
Extension on initial maturity date		1 year
Revolving Credit Facility
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	$ 46,531,000	$ 186,828,000
Ending weighted average interest rate	1.22%	1.71%
Revolving Credit Facility | JPM Repo Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing	$ 400,000,000	$ 300,000,000
Amount Outstanding	114,584,000	113,884,000
Interest expense	$ 2,821,000	$ 5,020,000
Ending weighted average interest rate	2.14%	2.54%
Revolving Credit Facility | USB Repo Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing		$ 100,000,000
Amount Outstanding		5,775,000
Interest expense		$ 599,000
Ending weighted average interest rate		2.40%
Revolving Credit Facility | CS Repo Facility (2)
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing	$ 200,000,000	$ 200,000,000			$ 300
Amount Outstanding	61,788,000	106,971,000
Interest expense	$ 2,432,000	$ 3,539,000
Ending weighted average interest rate	2.95%	2.84%
Downsized maximum line of credit borrowing capacity		$ 200
Revolving Credit Facility | CS Repo Facility (2) | Subsequent Event
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing			$ 300,000,000
Maximum line of credit borrowing capacity at company discretion			$ 400,000,000
Revolving Credit Facility | WF Repo Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing	$ 175,000,000	175,000,000
Amount Outstanding	102,368,000	27,150,000
Interest expense	$ 924,000	$ 1,041,000
Ending weighted average interest rate	1.75%	2.50%
Number of extension options | extension	2	2
Extension on initial maturity date	1 year	1 year
Revolving Credit Facility | WF Repo Facility | Subsequent Event
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing				$ 275,000,000
Revolving Credit Facility | Secured debt | Barclays Revolver Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed financing	$ 100,000,000	$ 100,000,000
Amount Outstanding	75,000,000	0
Interest expense	$ 223,000	$ 387,000
Ending weighted average interest rate	8.25%
Number of extension options | extension	1	1
Extension on initial maturity date	1 year	1 year

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Debt - Repurchase Agreements, Real Estate Securities (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	$ 550,156	$ 276,340
Interest Expense	972	2,110
Fair Value	0	171,136
Secured debt | U.S. Bank National Association | Tranche C
Assets Sold under Agreements to Repurchase [Line Items]
Fair Value	60,300	72,200
Revolving Credit Facility
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	46,531	186,828
Interest Expense	790	8,719
Collateral pledged	$ 60,267	$ 243,373
Interest Rate	1.22%	1.71%
Days to Maturity	30 days	33 days
Revolving Credit Facility | JP Morgan Securities LLC
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	$ 18,980	$ 33,791
Interest Expense	205	1,668
Collateral pledged	$ 24,105	$ 43,612
Interest Rate	1.14%	1.75%
Days to Maturity	1 day	31 days
Revolving Credit Facility | Wells Fargo Securities, LLC
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding		$ 0
Interest Expense		1,057
Collateral pledged		0
Revolving Credit Facility | Goldman Sachs International
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	$ 0	22,440
Interest Expense	37	455
Collateral pledged	0	$ 30,794
Interest Rate		1.68%
Days to Maturity		16 days
Revolving Credit Facility | Barclays Capital Inc.
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	27,551	$ 76,809
Interest Expense	467	2,102
Collateral pledged	$ 36,162	$ 97,244
Interest Rate	1.28%	1.71%
Days to Maturity	50 days	33 days
Revolving Credit Facility | Credit Suisse AG
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding		$ 0
Interest Expense		905
Collateral pledged		0
Revolving Credit Facility | Citigroup Global Markets, Inc.
Assets Sold under Agreements to Repurchase [Line Items]
Amount Outstanding	$ 0	53,788
Interest Expense	81	2,532
Collateral pledged	$ 0	$ 71,723
Interest Rate		1.70%
Days to Maturity		29 days

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Debt - Collateralized Loan Obligation by Tranche (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Par Value Issued		$ 23,998	$ 29,167
Collateralized loan obligations		1,792,353	1,625,498
U.S. Bank National Association | Secured debt
Debt Instrument [Line Items]
Par Value Issued		2,437,924	1,825,201
Par value outstanding		1,809,280	1,639,227
Collateralized loan obligations		300,100	267,100
U.S. Bank National Association | Secured debt | Tranche A Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Par Value Issued		286,700	286,700
Par value outstanding		0	161,745
U.S. Bank National Association | Secured debt | Tranche A-S Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Par Value Issued		77,775	77,775
Par value outstanding		65,176	77,775
U.S. Bank National Association | Secured debt | Tranche B Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Par Value Issued		41,175	41,175
Par value outstanding		41,175	41,175
U.S. Bank National Association | Secured debt | Tranche C Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Par Value Issued		39,650	39,650
Par value outstanding		39,650	39,650
U.S. Bank National Association | Secured debt | Tranche D Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Par Value Issued		42,700	42,700
Par value outstanding		42,700	42,700
U.S. Bank National Association | Secured debt | Tranche A Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Par Value Issued		416,827	416,827
Par value outstanding		185,596	416,659
U.S. Bank National Association | Secured debt | Tranche A-S Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Par Value Issued		73,813	73,813
Par value outstanding		73,813	73,813
U.S. Bank National Association | Secured debt | Tranche B Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Par Value Issued		56,446	56,446
Par value outstanding		56,446	56,446
U.S. Bank National Association | Secured debt | Tranche C Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Par Value Issued		68,385	68,385
Par value outstanding		68,385	68,385
U.S. Bank National Association | Secured debt | Tranche D Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Par Value Issued		57,531	57,531
Par value outstanding		57,531	57,531
U.S. Bank National Association | Secured debt | Tranche E Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Par Value Issued		28,223
Par value outstanding		28,223
U.S. Bank National Association | Secured debt | Tranche A Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Par Value Issued		407,025	407,025
Par value outstanding		369,761	407,025
U.S. Bank National Association | Secured debt | Tranche A-S Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Par Value Issued		76,950	76,950
Par value outstanding		76,950	76,950
U.S. Bank National Association | Secured debt | Tranche B Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Par Value Issued		50,000	50,000
Par value outstanding		50,000	50,000
U.S. Bank National Association | Secured debt | Tranche C Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Par Value Issued		61,374	61,374
Par value outstanding		61,374	61,373
U.S. Bank National Association | Secured debt | Tranche D Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Par Value Issued		48,600	48,600
Par value outstanding		5,000	5,000
U.S. Bank National Association | Secured debt | Tranche E Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Par Value Issued		20,250	20,250
Par value outstanding		3,000	3,000
U.S. Bank National Association | Secured debt | Class A Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Par Value Issued		367,500
Par value outstanding		367,500
U.S. Bank National Association | Secured debt | Class A-S Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Par Value Issued		86,625
Par value outstanding		86,625
U.S. Bank National Association | Secured debt | Class B Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Par Value Issued		33,250
Par value outstanding		33,250
U.S. Bank National Association | Secured debt | Class C Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Par Value Issued		41,125
Par value outstanding		41,125
U.S. Bank National Association | Secured debt | Class D Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Par Value Issued		44,625
Par value outstanding		44,625
U.S. Bank National Association | Secured debt | Class E Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Par Value Issued		11,375
Par value outstanding		$ 11,375
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche A Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Interest Rate	1.05%	1.05%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche A-S Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Interest Rate	1.35%	1.35%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche B Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Interest Rate	1.65%	1.65%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche C Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Interest Rate	2.55%	2.55%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche D Notes - 2018-FL3 Issuer
Debt Instrument [Line Items]
Interest Rate	3.45%	3.45%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche A Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Interest Rate	1.05%	1.05%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche A-S Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Interest Rate	1.30%	1.30%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche B Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Interest Rate	1.60%	1.60%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche C Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Interest Rate	2.10%	2.10%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche D Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Interest Rate	2.75%	2.75%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche E Notes - 2018-FL4 Issuer
Debt Instrument [Line Items]
Interest Rate	3.05%	3.05%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche A Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Interest Rate	1.15%	1.15%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche A-S Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Interest Rate	1.48%	1.48%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche B Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Interest Rate	1.40%	1.40%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche C Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Interest Rate	2.00%	2.00%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche D Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Interest Rate	2.40%	2.40%
1M LIBOR | U.S. Bank National Association | Secured debt | Tranche E Notes - 2019-FL5 Issuer
Debt Instrument [Line Items]
Interest Rate	2.85%	2.85%
1M LIBOR | U.S. Bank National Association | Secured debt | Class A Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Interest Rate		1.10%
1M LIBOR | U.S. Bank National Association | Secured debt | Class A-S Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Interest Rate		1.30%
1M LIBOR | U.S. Bank National Association | Secured debt | Class B Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Interest Rate		1.60%
1M LIBOR | U.S. Bank National Association | Secured debt | Class C Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Interest Rate		2.05%
1M LIBOR | U.S. Bank National Association | Secured debt | Class D Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Interest Rate		3.00%
1M LIBOR | U.S. Bank National Association | Secured debt | Class E Notes - 2021-FL6 Issuer
Debt Instrument [Line Items]
Interest Rate		3.50%
Collaterized loan obligation
Debt Instrument [Line Items]
Par Value Issued		$ 2,092,498	$ 1,892,616

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Debt - Collateralized Loan Obligation (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Variable Interest Entity [Line Items]
Cash		$ 91,374	$ 82,071	$ 96,066
Commercial mortgage loans, held for investment, net		3,247,646	2,693,848
Accrued interest receivable		17,132	15,295
Total assets		3,635,478	3,189,761
Notes payable		23,998	29,167
Interest payable		972	2,110
Total liabilities		2,558,349	2,182,063
Allowance for credit loss		15,499	20,886
Collaterized loan obligation
Variable Interest Entity [Line Items]
Cash		123,940	99,025
Commercial mortgage loans, held for investment, net		2,288,676	2,044,956
Accrued interest receivable		5,540	5,626
Total assets		2,418,156	2,149,607
Notes payable		2,092,498	1,892,616
Interest payable		1,220	1,240
Total liabilities		2,093,718	1,893,856
Restricted cash		123,300	98,600
Allowance for credit loss		8,700	19,400
Collateralized loan obligation excluded		300,100	$ 267,100
Deferred financing cost and discount	$ 13,700	$ 16,900

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator
Net income	$ 38,495	$ 21,497	$ 98,651	$ 21,911
Less: Preferred stock dividends	4,804	3,475	12,040	11,445
Less: Undistributed earnings allocated to preferred stock	4,201	1,283	10,706	0
Net income attributable to common stockholders, diluted	29,490	16,739	75,905	10,466
Net income attributable to common stockholders, basic	$ 29,490	$ 16,739	$ 75,905	$ 10,466
Denominator
Weighted-average common shares outstanding for basic earnings per share (in shares)	44,185,241	44,405,196	44,245,733	44,348,282
Unvested restricted shares (in shares)	15,323	15,888	15,737	13,457
Weighted-average common shares outstanding for diluted earnings per share (in shares)	44,200,564	44,421,084	44,261,470	44,361,739
Basic earnings per share (in dollars per share)	$ 0.67	$ 0.38	$ 1.72	$ 0.24
Diluted earnings per share (in dollars per share)	$ 0.67	$ 0.38	$ 1.71	$ 0.24

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Stock Transactions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands						1 Months Ended		3 Months Ended				9 Months Ended
	Oct. 18, 2021	Oct. 11, 2021	Mar. 18, 2021	Mar. 15, 2021	Feb. 28, 2016	Oct. 31, 2021	Mar. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Issuance of common stock (in shares)											650,034
Issuance of common stock										$ 25	$ 10,862
Minimum distribution percentage to qualify for REIT taxation status												90.00%
Distribution percentage required to avoid paying federal income taxes												100.00%
Total distributions												$ 36,500	$ 33,300
Cash distributions												31,400	27,100
Common stock issued under DRIP												5,100	6,200
Distributions payable								$ 20,447				$ 20,447	$ 15,645	$ 15,688
Repurchase price percent of NAV per share year one					92.50%
Repurchase price percent of NAV per share year two					95.00%
Repurchase price percent of NAV per share year three					97.50%
Repurchase price percent of NAV per share year four					100.00%
Repurchase limit percent per fiscal semester					2.50%
Repurchase limit percent per fiscal year					5.00%
Subsequent Event
Class of Stock [Line Items]
Cash paid for common stock dividends (in dollars per share)	$ 0.07
Common stock dividends declared (in dollars per share)		$ 0.07
Series A preferred stock
Class of Stock [Line Items]
Shares outstanding (in shares)								25,567				25,567		40,515
Issuance of common stock (in shares)												14,950	14
Preferred stock dividends declared (in dollars per share)								$ 106.22
Distributions payable								$ 2,700				$ 2,700		$ 3,300
Series A preferred stock | Subsequent Event
Class of Stock [Line Items]
Cash paid for preferred stock dividends (in dollars per share)	20.94					$ 106.22
Preferred stock dividends declared (in dollars per share)		20.94
Series C preferred stock
Class of Stock [Line Items]
Shares outstanding (in shares)								1,400				1,400		1,400
Issuance of common stock (in shares)												0	0
Preferred stock dividends declared (in dollars per share)								$ 106.22
Distributions payable								$ 100				$ 100		$ 100
Series C preferred stock | Subsequent Event
Class of Stock [Line Items]
Cash paid for preferred stock dividends (in dollars per share)	20.94					106.22
Preferred stock dividends declared (in dollars per share)		20.94
Series D Preferred Stock
Class of Stock [Line Items]
Shares outstanding (in shares)								17,950				17,950
Stock exchanges for other series of preferred stock (in shares)				14,949			14,950
Issuance of common stock (in shares)			3,000									17,950
Issuance of common stock			$ 15,000
Preferred stock dividends declared (in dollars per share)								$ 106.22
Distributions payable								$ 1,900				$ 1,900
Series D Preferred Stock | Subsequent Event
Class of Stock [Line Items]
Cash paid for preferred stock dividends (in dollars per share)	$ 20.94					106.22
Preferred stock dividends declared (in dollars per share)		$ 20.94
Common Stock
Class of Stock [Line Items]
Shares outstanding (in shares)							44,135,659	44,162,657	44,284,833	44,395,816	44,396,346	44,162,657	44,353,727	44,510,051	43,916,815
Issuance of common stock (in shares)									504
Issuance of common stock											$ 7
Cash paid for common stock dividends (in dollars per share)										$ 0.275	$ 1.44
Cash paid for common stock dividends, per annum (in dollars per share)								$ 1.42		$ 1.10
Common stock dividends declared (in dollars per share)								0.355
Increase in common stock dividends declared (in dollars per share)								$ 0.08
Distributions payable								$ 15,700				$ 15,700		$ 12,200
Common Stock | Subsequent Event
Class of Stock [Line Items]
Cash paid for common stock dividends (in dollars per share)						$ 0.355

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Stock Transactions - Preferred Stock Activity (Details) - USD ($) $ in Thousands		3 Months Ended						9 Months Ended
	Mar. 18, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0				0
Beginning balance				$ 0				$ 0
Issuance of Preferred stock (in shares)							650,034
Dividends paid in Preferred Stock		$ 1	$ 2,524	$ 2,585	$ 2,669	$ (57)	$ 3,549
Ending balance (in shares)		0						0
Ending balance		$ 0						$ 0
Series A preferred stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				40,515			40,500	40,515	40,500
Beginning balance				$ 202,292			$ 202,144	$ 202,292	$ 202,144
Issuance of Preferred stock (in shares)								14,950	14
Issuance of Preferred Stock								$ (74,748)	$ (70)
Dividends paid in Preferred Stock (in shares)								2	1
Dividends paid in Preferred Stock								$ 5	$ 4
Offering costs								(14)	(9)
Amortization of offering costs								$ 68	$ 71
Ending balance (in shares)		25,567			40,515			25,567	40,515
Ending balance		$ 127,603			$ 202,280			$ 127,603	$ 202,280
Series C preferred stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				1,400			1,400	1,400	1,400
Beginning balance				$ 6,962			$ 6,966	$ 6,962	$ 6,966
Issuance of Preferred stock (in shares)								0	0
Issuance of Preferred Stock								$ 0	$ 0
Dividends paid in Preferred Stock (in shares)								0	0
Dividends paid in Preferred Stock								$ 0	$ 0
Offering costs								0	(11)
Amortization of offering costs								$ 7	$ 6
Ending balance (in shares)		1,400			1,400			1,400	1,400
Ending balance		$ 6,969			$ 6,961			$ 6,969	$ 6,961
Series D Preferred Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)				0				0
Issuance of Preferred stock (in shares)	3,000							17,950
Issuance of Preferred Stock								$ (89,748)
Dividends paid in Preferred Stock (in shares)								0
Dividends paid in Preferred Stock								$ 0
Offering costs								(83)
Amortization of offering costs								$ 12
Ending balance (in shares)		17,950						17,950
Ending balance		$ 89,677			$ 0			$ 89,677	$ 0

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Stock Transactions - Schedule of Shares Repurchased (Details)	1 Months Ended										6 Months Ended
	Sep. 30, 2021 repurchaseRequest $ / shares shares	Jun. 30, 2021 repurchaseRequest shares	May 31, 2021 repurchaseRequest shares	Apr. 30, 2021 repurchaseRequest shares	Mar. 31, 2021 repurchaseRequest shares	Feb. 28, 2021 repurchaseRequest shares	Jan. 31, 2021 repurchaseRequest $ / shares shares	Sep. 30, 2020 repurchaseRequest shares	Aug. 31, 2020 repurchaseRequest	Jul. 31, 2020 repurchaseRequest $ / shares shares	Jun. 30, 2021 repurchaseRequest $ / shares shares	Dec. 31, 2020 repurchaseRequest $ / shares shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unfulfilled redemption requests (shares)											761	1,881,556
Share Repurchase Program (SRP) | Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, number of requests (share repurchase request) | repurchaseRequest							8,094				8,094
Number of requests during period (share repurchase request) | repurchaseRequest		0	0	0	0	0	1,355	0	0	1,424
Ending balance, number of requests (share repurchase request) | repurchaseRequest	10,873											8,094
Beginning balance, number of shares repurchased (in shares)							4,121,735				4,121,735
Number of shares repurchased during period (in shares)		0	0	0	0	0	525,580	0		123,257
Ending balance, number of shares repurchased (in shares)	4,770,572											4,121,735
Beginning balance, average price per share (usd per share) | $ / shares							$ 19.88				$ 19.88
Repurchases during period, average price per share (usd per share) | $ / shares							$ 17.53			$ 17.88
Ending balance, average price per share (usd per share) | $ / shares	$ 19.57											$ 19.88
Unfulfilled redemption requests (shares)	1,776		3,784		15,772

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Commitments and Contingencies (Details) - Unfunded commitments under commercial mortgage loans - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
2021	$ 26,989	$ 59,692
2022	41,917	91,420
2023	69,702	69,880
2024	265,295	7,700
2025 and beyond	25,501	0
Total	$ 429,404	$ 228,692

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Related Party Transactions and Arrangements - Narrative (Details) - USD ($)			1 Months Ended		3 Months Ended			9 Months Ended	12 Months Ended
	Mar. 18, 2021	Mar. 15, 2021	Mar. 31, 2021	Aug. 31, 2020	Sep. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Dec. 31, 2020	Sep. 17, 2021	Aug. 31, 2021	Sep. 29, 2016
Related Party Transaction [Line Items]
Interest expense								$ 7,912,000	$ 11,632,000
Unsecured debt					$ 60,000,000			$ 60,000,000	$ 0
Preferred stock, shares outstanding (in shares)					0			0	0
Issuance of common stock (in shares)							650,034
Issuance of common stock						$ 25,000	$ 10,862,000
Industrial | Jeffersonville, GA
Related Party Transaction [Line Items]
Real estate investment property, net										$ 139,500,000
Industrial | Jeffersonville, GA | Franklin BSP Realty Trust, Inc
Related Party Transaction [Line Items]
Noncontrolling interest, ownership percentage by parent											79.00%
Real estate investments, joint ventures											$ 109,800,000
Equity method investments											$ 21,100,000
Industrial | Jeffersonville, GA | JV Affiliate
Related Party Transaction [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners											21.00%
Equity method investments											$ 5,700,000
Noncontrolling interest in joint ventures											29,800,000
Series D Preferred Stock
Related Party Transaction [Line Items]
Preferred stock, shares outstanding (in shares)					17,950			17,950	0
Stock exchanges for other series of preferred stock (in shares)		14,949	14,950
Issuance of common stock (in shares)	3,000							17,950
Issuance of common stock	$ 15,000,000
Unsecured debt | Security benefit life insurance company
Related Party Transaction [Line Items]
Debt instrument, face amount				$ 100,000,000
Interest expense					$ 400,000			$ 1,200,000
Unsecured debt					$ 60,000,000			$ 60,000,000
Mortgages | Industrial | Jeffersonville, GA
Related Party Transaction [Line Items]
Debt instrument, face amount										112,700,000
Mortgages | September 2021 Mortgage Note Payable, Affiliate | Industrial | Jeffersonville, GA | JV Affiliate
Related Party Transaction [Line Items]
Debt instrument, face amount										24,000,000	24,000,000
Mortgages | September 2021 Mortgage Note Payable, Eliminated in Consolidation | Industrial | Jeffersonville, GA | Franklin BSP Realty Trust, Inc
Related Party Transaction [Line Items]
Debt instrument, face amount										$ 88,700,000	$ 88,700,000
LIBOR | Unsecured debt | Security benefit life insurance company
Related Party Transaction [Line Items]
Interest rate				4.50%
Affiliated entity | Benefit Street Partners LLC
Related Party Transaction [Line Items]
Monthly asset management fee												0.125%
Subordinated performance fee, percent that total return exceeds per year					6.00%			6.00%
Percent of excess total return					15.00%			15.00%
Maximum annual subordinated performance fee payable percent of total return					10.00%			10.00%
Affiliated entity | Benefit Street Partners LLC | Fee to acquire and originate real estate debt
Related Party Transaction [Line Items]
Transaction rate								0.50%

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Related Party Transactions and Arrangements - Amount Contractually Due and Forgiven (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Related Party Transaction [Line Items]
Payable to related party	$ 17,140		$ 17,140		$ 9,525
Affiliated entity
Related Party Transaction [Line Items]
Total expenses from transactions with related party	12,081	$ 7,057	30,408	$ 22,747
Payable to related party	17,140		17,140		9,525
Affiliated entity | Acquisition expenses | Nonrecurring fees
Related Party Transaction [Line Items]
Total expenses from transactions with related party	690	166	1,012	483
Payable to related party	0		0		0
Affiliated entity | Administrative services expenses | Nonrecurring fees
Related Party Transaction [Line Items]
Total expenses from transactions with related party	2,980	3,128	9,532	10,180
Payable to related party	2,980		2,980		2,940
Affiliated entity | Asset management and subordinated performance fee | Nonrecurring fees
Related Party Transaction [Line Items]
Total expenses from transactions with related party	8,265	3,749	19,682	11,399
Payable to related party	13,025		13,025		4,773
Affiliated entity | Other related party expenses | Nonrecurring fees
Related Party Transaction [Line Items]
Total expenses from transactions with related party	146	14	182	685
Payable to related party	1,135		1,135		$ 1,812
Affiliated entity | Acquisition fees and expenses, including amount capitalized | Nonrecurring fees
Related Party Transaction [Line Items]
Total expenses from transactions with related party	2,900	2,200	7,500	5,000
Affiliated entity | Acquisition fees and expenses, amount capitalized | Nonrecurring fees
Related Party Transaction [Line Items]
Total expenses from transactions with related party	$ 2,200	$ 2,000	$ 6,500	$ 4,500

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Fair Value of Financial Instruments - Financial Instruments Carried at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	$ 99	$ 67,649
Derivative instruments, measured at fair value	0	25
Fair Value	0	171,136
Liabilities	0	403
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	99	67,649
Other real estate investments, measured at fair value	2,547	2,522
Fair Value		171,136
Total assets, at fair value	2,646	241,332
Total liabilities, at fair value	0	403
Level I | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	0	0
Other real estate investments, measured at fair value	0	0
Fair Value		0
Total assets, at fair value	0	0
Total liabilities, at fair value	0	106
Level II | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	0	0
Other real estate investments, measured at fair value	0	0
Fair Value		171,136
Total assets, at fair value	0	171,161
Total liabilities, at fair value	0	297
Level III | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	99	67,649
Other real estate investments, measured at fair value	2,547	2,522
Fair Value		0
Total assets, at fair value	2,646	70,171
Total liabilities, at fair value	0	0
Credit default swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	0
Liabilities	0	297
Credit default swaps | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	297
Credit default swaps | Level I | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	0
Credit default swaps | Level II | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	297
Credit default swaps | Level III | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	0
Interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	25
Liabilities	0	0
Interest rate swaps | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	25
Interest rate swaps | Level I | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	0
Interest rate swaps | Level II | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	25
Interest rate swaps | Level III | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	0
Treasury note futures
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, measured at fair value	0	0
Liabilities	0	106
Treasury note futures | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	106
Treasury note futures | Level I | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	106
Treasury note futures | Level II | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	0
Treasury note futures | Level III | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	$ 0	$ 0

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Fair Value of Financial Instruments - Valuation Method Of Level 3 Financial Instruments Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	$ 99	$ 67,649
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	99	67,649
Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	99	67,649
Real estate securities, available-for-sale, measured at fair value	2,547	2,522
Commercial Mortgage Loans, held for sale, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commercial mortgage loans, held for sale, measured at fair value	$ 99	$ 67,649
Discounted Cash Flow | Weighted Average | Commercial Mortgage Loans, held for sale, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Yield	16.60%	16.60%
Discounted Cash Flow | Weighted Average | Other real estate investments, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Yield	11.40%	13.20%
Discounted Cash Flow | Minimum | Commercial Mortgage Loans, held for sale, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Yield	15.60%	15.60%
Discounted Cash Flow | Minimum | Other real estate investments, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Yield	10.40%	12.20%
Discounted Cash Flow | Maximum | Commercial Mortgage Loans, held for sale, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Yield	17.60%	17.60%
Discounted Cash Flow | Maximum | Other real estate investments, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Yield	12.40%	14.20%

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Fair Value of Financial Instruments - Changes in the Company's Financial Instruments Classified as Level III (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Net accretion			$ 4,421	$ 4,535
Gain on sale of real estate securities	$ 0	$ (4,390)	(1,375)	(10,137)
Commercial Mortgage Loans, held for sale, measured at fair value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of asset purchases, collateralized amount					$ 679,100
Fair value of asset sales, collateralized amount					682,000
Gain on sale of real estate securities					2,800
Commercial Mortgage Loans, held for sale, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance			67,649	112,562	112,562
Transfers Into Level III			0		23,625
Realized gain/(loss) on sale of commercial mortgage loans, held for sale			22,211		15,931
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments			0		(75)
Net accretion			0		0
Purchases			321,278		267,552
Sales / paydowns			(411,039)		(328,321)
Transfers out of Level III			0		(23,625)
Ending balance	99		99		67,649
Other Real Estate Investments, measured at fair value | Fair Value, Measurements, Recurring | Level III
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance			2,522	$ 2,557	2,557
Transfers Into Level III			0		0
Realized gain/(loss) on sale of commercial mortgage loans, held for sale			0		0
Unrealized gain/(loss) on commercial mortgage loans, held for sale and other real estate investments			27		(32)
Net accretion			(2)		(3)
Purchases			0		0
Sales / paydowns			0		0
Transfers out of Level III			0		0
Ending balance	$ 2,547		$ 2,547		$ 2,522

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Fair Value of Financial Instruments - Financial Instruments Not Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Allowance for credit loss	$ 15,499	$ 20,886
Carrying Amount | Level III
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial mortgage loans, held for investment	3,263,145	2,714,734
Collateralized loan obligations	1,792,353	1,625,498
Mortgage note payable	23,998	29,167
Other financing and loan participation - commercial mortgage loans	37,434	31,379
Unsecured debt	60,000
Allowance for credit loss	15,500	20,900
Fair Value | Level III
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial mortgage loans, held for investment	3,265,960	2,724,039
Collateralized loan obligations	1,811,509	1,606,478
Mortgage note payable	23,998	29,167
Other financing and loan participation - commercial mortgage loans	37,434	$ 31,379
Unsecured debt	$ 60,000

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Derivative Instruments - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Net premiums received on derivative instrument assets	$ 4.8

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Derivative Instruments - Schedule of Outstanding Derivatives (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Notional	$ 17,335	$ 122,017
Assets	0	25
Liabilities	0	403
Credit default swaps
Derivative [Line Items]
Notional	0	46,000
Assets	0	0
Liabilities	0	297
Interest rate swaps
Derivative [Line Items]
Notional	17,335	32,517
Assets	0	25
Liabilities	0	0
Treasury note futures
Derivative [Line Items]
Notional	0	43,500
Assets	0	0
Liabilities	$ 0	$ 106

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Derivative Instruments - Net Realized and Unrealized Losses on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized (Gain)/Loss	$ (1,428)	$ (4,310)	$ (374)	$ 625
Realized (Gain)/Loss	1,902	4,722	(357)	13,050
Credit default swaps
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized (Gain)/Loss	(111)	101	(289)	(433)
Realized (Gain)/Loss	32	206	675	269
Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized (Gain)/Loss	(1,282)	(4,411)	22	323
Realized (Gain)/Loss	1,692	4,516	414	7,462
Treasury note futures
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized (Gain)/Loss	(35)	0	(107)	735
Realized (Gain)/Loss	$ 145	0	(1,479)	5,284
Options
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized (Gain)/Loss		0	0	0
Realized (Gain)/Loss		$ 0	$ 33	$ 35

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Offsetting Assets and Liabilities - Offsetting Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Offsetting Derivative Assets [Abstract]
Gross amounts of recognized assets	$ 0	$ 25
Gross amounts offset on the balance sheet	0	0
Net amount of assets presented on the balance sheet	0	25
Financial instruments	0	0
Cash collateral	0	0
Net amount	$ 0	$ 25

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Offsetting Assets and Liabilities - Offsetting Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Offsetting Derivative Liabilities [Abstract]
Derivative instruments, at fair value, gross amounts recognized	$ 0	$ 403
Derivative instruments, at fair value, gross amounts offset on the balance sheet	0	0
Derivative instruments, at fair value, net amount of liabilities presented on the balance sheet	0	403
Derivative instruments, at fair value, gross amounts not offset on balance sheet, financial instruments	0	0
Derivative instruments, at fair value, gross amounts not offset on the balance sheet, cash collateral pledged	3,886	3,435
Derivative instruments, at fair value, net amount	0	0
Repurchase agreements - commercial mortgage loans
Offsetting Securities Sold under Agreements to Repurchase [Abstract]
Repurchase agreements, gross amounts of recognized liabilities	550,156	276,340
Repurchase agreements, gross amounts offset on the balance sheet	0	0
Repurchase agreements, net amount of liabilities presented on the balance sheet	550,156	276,340
Repurchase agreements, gross amounts not offset on the balance sheet, financial instruments	858,613	496,030
Repurchase agreements, gross amounts not offset on the balance sheet, cash collateral pledged	5,015	5,016
Repurchase agreements, net amount	0	0
Real Estate Securities
Offsetting Securities Sold under Agreements to Repurchase [Abstract]
Repurchase agreements, gross amounts of recognized liabilities	46,531	186,828
Repurchase agreements, gross amounts offset on the balance sheet	0	0
Repurchase agreements, net amount of liabilities presented on the balance sheet	46,531	186,828
Repurchase agreements, gross amounts not offset on the balance sheet, financial instruments	60,267	245,956
Repurchase agreements, gross amounts not offset on the balance sheet, cash collateral pledged	0	1,146
Repurchase agreements, net amount	$ 0	$ 0

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Interest income	$ 47,747	$ 44,414	$ 138,969	$ 135,509
Interest expense	11,988	15,113	35,994	54,740
Net income, attributable to parent	38,495	21,497	98,651	21,911
Total assets	3,635,478		3,635,478		$ 3,189,761
Revenue from real estate owned	1,015	1,017	2,447	3,474
Real Estate Debt and Other Real Estate Investments
Segment Reporting Information [Line Items]
Interest income	47,166	39,944	135,945	123,284
Interest expense	11,263	10,194	34,887	43,735
Net income, attributable to parent	25,056	25,158	74,745	40,273
Total assets	3,436,065		3,436,065		2,866,790
Revenue from real estate owned	0	0	0	0
Real Estate Securities
Segment Reporting Information [Line Items]
Interest income	0	3,996	461	9,870
Interest expense	148	3,393	720	7,670
Net income, attributable to parent	(148)	(3,797)	(196)	(7,947)
Total assets	814		814		175,088
Revenue from real estate owned	0	0	0	0
TRS
Segment Reporting Information [Line Items]
Interest income	581	474	2,563	2,355
Interest expense	232	494	812	1,735
Net income, attributable to parent	3,984	(162)	13,434	(8,290)
Total assets	57,437		57,437		105,364
Revenue from real estate owned	0	0	0	0
Real Estate Owned
Segment Reporting Information [Line Items]
Interest income	0	0	0	0
Interest expense	345	1,032	1,014	1,600
Net income, attributable to parent	9,603	298	10,667	(2,125)
Total assets	141,162		141,162		$ 42,519
Revenue from real estate owned	$ 1,015	$ 1,017	$ 2,447	$ 3,474

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Subsequent Events (Details) $ / shares in Units, $ in Millions					1 Months Ended	3 Months Ended
	Oct. 19, 2021 USD ($) conversionRate boardDirector considerationType $ / shares shares	Oct. 18, 2021 $ / shares	Oct. 12, 2021 $ / shares shares	Oct. 11, 2021 $ / shares	Oct. 31, 2021 $ / shares	Sep. 30, 2021 $ / shares shares	Dec. 31, 2020 $ / shares shares
Subsequent Event [Line Items]
Common stock, shares outstanding (in shares) | shares						44,162,657	44,510,051
Preferred stock, par value per share (in dollars per share)						$ 0.01	$ 0.01
Common stock, shares authorized (in shares) | shares						949,999,000	949,999,000
Preferred stock, shares authorized (in shares) | shares						50,000,000	50,000,000
Common stock, par value per share (in dollars per share)						$ 0.01	$ 0.01
Series A preferred stock
Subsequent Event [Line Items]
Preferred stock dividends declared (in dollars per share)						106.22
Series C preferred stock
Subsequent Event [Line Items]
Preferred stock dividends declared (in dollars per share)						106.22
Series D Preferred Stock
Subsequent Event [Line Items]
Preferred stock dividends declared (in dollars per share)						$ 106.22
Subsequent Event
Subsequent Event [Line Items]
Common stock, shares outstanding (in shares) | shares			4,500,000
Authorized common stock shares reclassified as preferred stock | shares			50,000,000
Preferred stock, par value per share (in dollars per share)			$ 0.01
Common stock, shares authorized (in shares) | shares			900,000,000
Preferred stock, shares authorized (in shares) | shares			100,000,000
Stockholders' percentage of common stock holding after merger closing and recapitalization			10.00%
Cash paid for common stock dividends (in dollars per share)		$ 0.07
Common stock dividends declared (in dollars per share)				$ 0.07
Conversion of stock, common stock shares issued per share, merger (in shares) | shares	0.3288
Conversion of stock, common stock, per share cash consideration, merger (in dollars per share)	$ 0.21
Conversion of stock, common stock, per share advisor cash consideration, merger (in dollars per share)	$ 0.73
Preferred stock converted to common stock, per share stock consideration, merger | shares	299.2
Common stock, shares, issued, merger, conversion of preferred stock (in shares) | shares	7,649,632
Common stock, change of control, consideration options | considerationType	2
Reverse stock split conversion ratio			0.10
Subsequent Event | Minimum
Subsequent Event [Line Items]
Liquidation of stock, notice period	30 days
Subsequent Event | Maximum
Subsequent Event [Line Items]
Liquidation of stock, notice period	60 days
Subsequent Event | Capstead Mortgage Corporation
Subsequent Event [Line Items]
Common stock, par value per share (in dollars per share)	$ 0.01
Conversion of stock, common stock shares issued per share, merger (in shares) | shares	1
Number of shares issued in connection with merger | shares	32,100,000
Payments to acquire businesses, gross | $	$ 20.5
Subsequent Event | Series F Preferred Stock
Subsequent Event [Line Items]
Preferred stock, shares authorized (in shares) | shares			40,000,000
Preferred stock dividends, per share stock consideration | shares			9
Stock issued during period, shares, reverse stock splits (in shares) | shares			39,733,298
Stockholders' percentage of preferred stock holding after merger closing and recapitalization			90.00%
Per share consideration of preferred stock converted to common stock | shares	1
Cash paid for preferred stock dividends (in dollars per share)		0.07
Preferred stock dividends declared (in dollars per share)				0.07
Conversion of stock, common stock shares issued per share, merger (in shares) | shares	1
Liquidation preference (in dollars per share)			$ 2.00
Conversion of stock, preferred stock to common stock, conversion period	3 days
Preferred stock, percentage of vote required for adverse actions to stockholders	67.00%
Subsequent Event | Series A preferred stock
Subsequent Event [Line Items]
Cash paid for preferred stock dividends (in dollars per share)		20.94			$ 106.22
Preferred stock dividends declared (in dollars per share)				20.94
Subsequent Event | Series C preferred stock
Subsequent Event [Line Items]
Cash paid for preferred stock dividends (in dollars per share)		20.94			106.22
Preferred stock dividends declared (in dollars per share)				20.94
Subsequent Event | Series D Preferred Stock
Subsequent Event [Line Items]
Cash paid for preferred stock dividends (in dollars per share)		$ 20.94			$ 106.22
Preferred stock dividends declared (in dollars per share)				$ 20.94
Subsequent Event | Convertible Series E Preferred Stock | Capstead Mortgage Corporation
Subsequent Event [Line Items]
Preferred stock, par value per share (in dollars per share)	$ 0.10
Preferred stock rate, as a percentage	7.50%
Subsequent Event | Series E Preferred Stock
Subsequent Event [Line Items]
Preferred stock rate, as a percentage	7.50%
Conversion of stock, preferred stock, per share stock consideration, merger (in shares) | shares	1
Preferred stock, shares reclassified | shares	10,329,039
Liquidation preference (in dollars per share)	$ 25.00
Preferred stock, liquidation preference per share, per annum (in dollars per share)	1.875
Preferred stock, redemption price per share (in dollars per share)	$ 25.00
Preferred stock, redemption of stock for cash, change of control, notice period limitation	120 days
Percentage of total economic interests needed to convert preferred stock to common stock	50.00%
Conversion of stock, preferred stock converted to common stock, conversion rate | conversionRate	3.81388
Preferred stock, change of control, notice period	15 days
Preferred stock, dividends in arrears, increase in number of board directors | boardDirector	2
Preferred stock, dividends in arrears, percentage of holders of outstanding stock required to call board meeting	25.00%
Preferred stock, dividends in arrears, boarding meeting call period limitation	90 days
Preferred stock, dividends in arrears, board meeting call period	30 days
Preferred stock, annual and quarterly reports, information distribution period	15 days
Preferred stock, percentage of vote required to amend charter and authorize or issue additional preferred stock	67.00%
Subsequent Event | Series E Preferred Stock | Minimum
Subsequent Event [Line Items]
Preferred stock, redemption of stock, notice period	30 days
Preferred stock, redemption of stock for cash, change of control, notice period	30 days
Preferred stock, change of control, conversion date period limitation	20 days
Subsequent Event | Series E Preferred Stock | Maximum
Subsequent Event [Line Items]
Preferred stock, redemption of stock, notice period	60 days
Preferred stock, redemption of stock for cash, change of control, notice period	60 days
Preferred stock, change of control, conversion date period limitation	35 days
Subsequent Event | Series E Preferred Stock | Capstead Mortgage Corporation
Subsequent Event [Line Items]
Number of shares issued in connection with merger | shares	10,300,000