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Commercial Mortgage Loans (Tables)
 3 Months Ended
Mar. 31, 2022
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):
March 31, 2022December 31, 2021
Senior loans$4,517,879 $4,204,464 
Mezzanine loans27,505 22,424 
Total gross carrying value of loans4,545,384 4,226,888 
Less: Allowance for credit losses (1)
14,933 15,827 
Total commercial mortgage loans, held for investment, net$4,530,451 $4,211,061 
________________________
(1) As of March 31, 2022 and December 31, 2021, 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):
March 31, 2022December 31, 2021
Loan Type Par Value Percentage Par Value Percentage
Multifamily$3,264,959 71.6 %$2,953,938 69.6 %
Hospitality542,171 11.9 %460,884 10.9 %
Office479,607 10.5 %485,575 11.4 %
Retail84,215 1.8 %104,990 2.5 %
Industrial69,985 1.5 %88,956 2.1 %
Mixed Use52,500 1.2 %62,965 1.5 %
Self Storage44,895 1.0 %56,495 1.3 %
Manufactured Housing24,152 0.5 %29,159 0.7 %
Total $4,562,484 100.0 %$4,242,962 100.0 %
March 31, 2022December 31, 2021
Loan RegionPar Value Percentage Par Value Percentage
Southwest$1,784,211 39.1 %$1,764,905 41.6 %
Southeast1,380,246 30.1 %1,106,439 26.2 %
Mideast784,182 17.2 %646,125 15.2 %
Far West262,728 5.8 %301,040 7.1 %
Great Lakes168,114 3.7 %183,930 4.3 %
New England67,117 1.5 %67,651 1.6 %
Plains60,172 1.3 %60,225 1.4 %
Rocky Mountain43,751 1.0 %43,751 1.0 %
Various11,963 0.3 %68,896 1.6 %
Total$4,562,484 100.0 %$4,242,962 100.0 %
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):
March 31, 2022December 31, 2021
Loan Type Par Value PercentagePar Value Percentage
Retail$54,550 50.3 %$— — %
Hospitality32,457 30.0 %— — %
Office12,193 11.2 %34,250 100.0 %
Multifamily6,500 6.0 %— — %
Mixed Use2,750 2.5 %— — %
Total $108,450 100.0 %$34,250 100.0 %
March 31, 2022December 31, 2021
Loan RegionPar ValuePercentagePar ValuePercentage
Far West$47,300 43.6 %$— — %
Southeast44,750 41.3 %34,250 100.0 %
Great Lakes10,000 9.2 %— — %
Rocky Mountain6,400 5.9 %— — %
Total$108,450 100.0 %$34,250 100.0 %
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 March 31, 2022 (dollars in thousands):
Three Months Ended March 31, 2022
MultiFamilyRetailOfficeIndustrialMixed UseHospitalitySelf-StorageManufactured HousingTotal
Beginning Balance$9,681 $288 $776 $86 $169 $4,597 $152 $78 $15,827 
Current Period:
Provision/(benefit) for credit losses32 234 (103)15 (108)(807)(110)(47)(894)
Write offs— — — — — — — — — 
Ending Balance$9,713 $522 $673 $101 $61 $3,790 $42 $31 $14,933 
The following table presents the activity in the Company's allowance for credit losses, for the unfunded loan commitments, as of March 31, 2022 (dollars in thousands):
Three Months Ended March 31, 2022
MultiFamilyRetailOfficeIndustrialMixed UseHospitalitySelf-StorageManufactured HousingTotal
Beginning Balance$137 $1 $13 $3 $10 $79 $— $— $243 
Current Period:
Provision/(benefit) for credit losses(32)15 (4)(2)(10)(28)— — (61)
Ending Balance$105 $16 $9 $1 $— $51 $— $— $182 
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
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.
Schedule of allocation by risk rating
The following tables present the amortized cost of our commercial mortgage loans, held for investment as of March 31, 2022 and December 31, 2021, by loan type, the Company’s internal risk rating and year of origination. The risk ratings are updated as of March 31, 2022.
As of March 31, 2022
202220212020201920182017Total
Multifamily:
Risk Rating:
1-2 internal grade$388,347 $2,426,914 $229,560 $67,567 $83,619 $— $3,196,007 
3-4 internal grade— — 18,669 37,025 — 55,694 
Total Multifamily Loans$388,347 $2,426,914 $248,229 $67,567 $120,644 $— $3,251,701 
Retail:
Risk Rating:
1-2 internal grade$20,480 $33,843 $11,952 $17,596 $— $— $83,871 
3-4 internal grade— — — — — 
Total Retail Loans$20,480 $33,843 $11,952 $17,596 $— $— $83,871 
Office:
Risk Rating:
1-2 internal grade$— $50,320 $254,583 $137,233 $36,291 $— $478,427 
3-4 internal grade— — — — — — 
Total Office Loans$— $50,320 $254,583 $137,233 $36,291 $— $478,427 
Industrial:
Risk Rating:
1-2 internal grade$54,730 $— $14,931 $— $— $— $69,661 
3-4 internal grade— — — — — — 
Total Industrial Loans$54,730 $— $14,931 $— $— $— $69,661 
Mixed Use:
Risk Rating:
1-2 internal grade$19,902 $32,411 $— $— $— $— $52,313 
3-4 internal grade— — — — — — — 
Total Mixed Use Loans$19,902 $32,411 $— $— $— $— $52,313 
Hospitality:
Risk Rating:
1-2 internal grade$90,726 $154,543 $26,932 $33,945 $— $— $306,146 
3-4 internal grade— — — 103,130 52,234 79,041 234,405 
Total Hospitality Loans$90,726 $154,543 $26,932 $137,075 $52,234 $79,041 $540,551 
Self-Storage:
Risk Rating:
1-2 internal grade$— $14,957 $29,820 $— $— $— $44,777 
3-4 internal grade— — — — — — — 
Total Self-Storage Loans$— $14,957 $29,820 $— $— $— $44,777 
Manufactured Housing:
Risk Rating:
1-2 internal grade$— $6,668 $17,415 $— $— $— $24,083 
3-4 internal grade— — — — — — — 
Total Manufactured Housing Loans$— $6,668 $17,415 $— $— $— $24,083 
Total$574,185 $2,719,656 $603,862 $359,471 $209,169 $79,041 $4,545,384 

December 31, 2021
20212020201920182017Total
Multifamily:
Risk Rating:
1-2 internal grade$2,438,376 $270,953 $103,989 $90,877 $— $2,904,195 
3-4 internal grade— — — 37,025 — 37,025 
Total Multifamily Loans$2,438,376 $270,953 $103,989 $127,902 $— $2,941,220 
Retail:
Risk Rating:
1-2 internal grade$33,830 $11,928 $29,515 $29,452 $— $104,725 
3-4 internal grade— — — — — — 
Total Retail Loans$33,830 $11,928 $29,515 $29,452 $— $104,725 
Office:
Risk Rating:
1-2 internal grade$50,291 $253,759 $136,800 $43,308 $— $484,158 
3-4 internal grade— — — — — — 
Total Office Loans$50,291 $253,759 $136,800 $43,308 $— $484,158 
Industrial:
Risk Rating:
1-2 internal grade$— $31,906 $— $— $— $31,906 
3-4 internal grade— — 56,933 — — 56,933 
Total Industrial Loans$— $31,906 $56,933 $— $— $88,839 
Mixed Use:
Risk Rating:
1-2 internal grade$32,395 $30,325 $— $— $— $62,720 
3-4 internal grade— — — — — — 
Total Mixed Use Loans$32,395 $30,325 $— $— $— $62,720 
Hospitality:
Risk Rating:
1-2 internal grade$153,032 $26,920 $34,054 $— $— $214,006 
3-4 internal grade— — 113,961 52,790 79,102 245,853 
Total Hospitality Loans$153,032 $26,920 $148,015 $52,790 $79,102 $459,859 
Self-Storage:
Risk Rating:
1-2 internal grade$14,948 $41,382 $— $— $— $56,330 
3-4 internal grade— — — — — — 
Total Self-Storage Loans$14,948 $41,382 $— $— $— $56,330 
Manufactured Housing:
Risk Rating:
1-2 internal grade$6,665 $22,372 $— $— $— $29,037 
3-4 internal grade— — — — — — 
Total Manufactured Housing Loans$6,665 $22,372 $— $— $— $29,037 
Total$2,729,537 $689,545 $475,252 $253,452 $79,102 $4,226,888 
The following table represents the allocation by risk rating for the Company's commercial mortgage loans, held for investment (dollars in thousands):
March 31, 2022  December 31, 2021
Risk Rating  Number of Loans  Par ValueRisk Rating  Number of Loans  Par Value
1  —   $— 1  —   $— 
2  150   4,272,194 2  148   3,903,047 
3  15   233,215 3  16   282,840 
4  1   57,075 4  1   57,075 
5  —   — 5  —   — 
  166   $4,562,484 165   $4,242,962 
Schedule of financing receivable past due
The following table presents an aging summary of the loans amortized cost basis at March 31, 2022 (dollars in thousands):
MultifamilyRetailOfficeIndustrialMixed UseHospitalitySelf-StorageManufactured HousingTotal
Status:
Current$3,251,701 $83,871 $478,427 $69,661 $52,313 $483,476 $44,777 $24,083 $4,488,309 
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$3,251,701 $83,871 $478,427 $69,661 $52,313 $540,551 $44,777 $24,083 $4,545,384 
________________________
(1) For the three months ended March 31, 2022, there was no interest income recognized on this loan.
Schedule of real estate notes receivable rollforward
For the three months ended March 31, 2022 and year ended December 31, 2021, the activity in the Company's commercial mortgage loans, held for investment portfolio was as follows (dollars in thousands):
Three Months Ended March 31,Year Ended December 31,
20222021
Balance at Beginning of Year$4,211,061 $2,693,848 
Acquisitions and originations640,033 2,897,002 
Principal repayments(320,511)(1,286,598)
Discount accretion/premium amortization2,542 7,038 
Loans transferred from/(to) commercial real estate loans, held for sale— (52,615)
Net fees capitalized into carrying value of loans(3,568)(15,150)
(Provision)/benefit for credit losses894 4,770 
Charge-off from allowance— 289 
Transfer to real estate owned— (37,523)
Balance at End of Period$4,530,451 $4,211,061