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, 2023

Or

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

For the transition period from      to      

Commission file number:

001-36299

Ladder Capital Corp

(Exact name of registrant as specified in its charter)

Delaware			80-0925494
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)
320 Park Avenue,	New York,	NY	10022
(Address of principal executive offices)			(Zip Code)

(212) 715-3170

(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
Class A common stock, $0.001 par value	LADR	New York Stock Exchange

1

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

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

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): 

Yes ☐  No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class	Outstanding at October 20, 2023
Class A common stock, $0.001 par value	126,911,689
Class B common stock, $0.001 par value	—

2

LADDER CAPITAL CORP

FORM 10-Q

September 30, 2023

Index			Page
PART I - FINANCIAL INFORMATION			3
Item 1.	Financial Statements (Unaudited)		3
		Consolidated Balance Sheets	4
		Consolidated Statements of Income	5
		Consolidated Statements of Comprehensive Income	6
		Consolidated Statements of Changes in Equity	9
		Consolidated Statements of Cash Flows	11
		Notes to Consolidated Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		52
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		84
Item 4.	Controls and Procedures		87
PART II - OTHER INFORMATION			87
Item 1.	Legal Proceedings		87
Item 1A.	Risk Factors		87
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities		87
Item 3.	Defaults Upon Senior Securities		88
Item 4.	Mine Safety Disclosures		88
Item 5.	Other Information		88
Item 6.	Exhibits		89
SIGNATURES			90

1

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “should,” “can have,” “likely,” “continue,” “design,” and other words and terms of similar expressions are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ from those expressed in our forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements are subject to change and inherent risks and uncertainties. You should consider our forward-looking statements in light of a number of factors that may cause actual results to vary from our forward-looking statements including, but not limited to:

•risks discussed under the heading “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2022 (“the Annual Report”), as well as our consolidated financial statements, related notes, and the other financial information appearing elsewhere in this Quarterly Report and our other filings with the United States Securities and Exchange Commission (the “SEC”);

•labor shortages, supply chain imbalances, the broader impacts of the Ukraine-Russia and Hamas-Israel conflicts, inflation, and the potential for a global economic recession;

•changes in general economic conditions and in the commercial finance and the real estate markets;

•changes to our business and investment strategy;

•our ability to obtain and maintain financing arrangements;

•the financing and advance rates for our assets;

•our actual and expected leverage and liquidity;

•the adequacy of collateral securing our loan portfolio and a decline in the fair value of our assets;

•interest rate mismatches between our assets and our borrowings used to fund such investments;

•changes in interest rates affecting the market value of our assets and the related impacts on our borrowers, including any unforeseen impacts of the transition to Term Secured Overnight Financing Rate (“SOFR”);

•changes in prepayment rates on our mortgages and the loans underlying our commercial mortgage-backed and other asset-backed securities;

•the effects of hedging instruments and the degree to which our hedging strategies may or may not protect us from interest rate and credit risk volatility;

•the increased rate of default or decreased recovery rates on our assets;

•the adequacy of our policies, procedures and systems for managing risk effectively;

•a potential downgrade in the credit ratings assigned to Ladder or our investments;

•our compliance with, and the impact of, and changes in laws, governmental regulations, tax laws and rates, accounting guidance and similar matters;

•our ability to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes and our ability and the ability of our subsidiaries to operate in compliance with REIT requirements;

•our ability and the ability of our subsidiaries to maintain our and their exemptions from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”);

•the effects of climate change or the potential liability relating to environmental matters that impact the value of properties we may acquire or the properties underlying our investments;

•the inability of insurance covering real estate underlying our loans and investments to cover all losses;

•the availability of investment opportunities in mortgage-related and real estate-related instruments and other securities;

•fraud by potential borrowers;

•our ability to attract and retain qualified employees;

•the impact of any tax legislation or IRS guidance;

2

•volatility in the equity capital markets and the impact on our Class A common stock;

•the degree and nature of our competition; and

•the market trends in our industry, interest rates, real estate values and the debt securities markets.

You should not rely upon forward-looking statements as predictions of future events. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The forward-looking statements contained in this Quarterly Report are made as of the date hereof, and the Company assumes no obligation to update or supplement any forward-looking statements.

Part I - Financial Information

Item 1. Financial Statements (Unaudited)

The consolidated financial statements of Ladder Capital Corp and the notes related to the foregoing consolidated financial statements are included in this Item.

Index to Consolidated Financial Statements (Unaudited)

Consolidated Balance Sheets		4
Consolidated Statements of Income		5
Consolidated Statements of Comprehensive Income		6
Consolidated Statements of Changes in Equity		9
Consolidated Statements of Cash Flows		11
Notes to Consolidated Financial Statements		13
	Note 1. Organization and Operations	13
	Note 2. Significant Accounting Policies	14
	Note 3. Mortgage Loan Receivables	16
	Note 4. Securities	21
	Note 5. Real Estate and Related Lease Intangibles, Net	23
	Note 6. Debt Obligations, Net	26
	Note 7. Derivative Instruments	32
	Note 8. Offsetting Assets and Liabilities	34
	Note 9. Consolidated Variable Interest Entities	35
	Note 10. Equity Structure and Accounts	36
	Note 11. Noncontrolling Interests	37
	Note 12. Earnings Per Share	38
	Note 13. Stock-Based and Other Compensation Plans	39
	Note 14. Fair Value of Financial Instruments	42
	Note 15. Income Taxes	47
	Note 16. Related Party Transactions	48
	Note 17. Commitments and Contingencies	48
	Note 18. Segment Reporting	49
	Note 19. Subsequent Events	52

3

Ladder Capital Corp

Consolidated Balance Sheets

(Dollars in Thousands)

	September 30, 2023(1)		December 31, 2022(1)
	(Unaudited)
Assets
Cash and cash equivalents	$	798,391	$	609,078
Restricted cash	59,523		50,524
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans receivable	3,371,685		3,885,746
Allowance for credit losses	(39,575)		(20,755)
Mortgage loan receivables held for sale	26,272		27,391
Securities	476,698		587,519
Real estate and related lease intangibles, net	675,334		700,136
Investments in and advances to unconsolidated ventures	7,032		6,219
Derivative instruments	1,817		2,038
Accrued interest receivable	23,056		24,938
Other assets	102,909		78,339
Total assets	$	5,503,142	$	5,951,173
Liabilities
Debt obligations, net	$	3,793,845	$	4,245,697
Dividends payable	31,788		32,000
Accrued expenses	63,446		68,227
Other liabilities	75,910		71,688
Total liabilities	3,964,989		4,417,612
Commitments and contingencies (Note 17)	—		—
Equity
Class A common stock, par value $0.001 per share, 600,000,000 shares authorized; 128,027,478 and 128,027,478 shares issued and 126,911,689 and 126,502,049 shares outstanding as of September 30, 2023 and December 31, 2022, respectively.	127		127
Additional paid-in capital	1,842,208		1,826,833
Treasury stock, 1,115,789 and 1,525,429 shares, at cost	(105,943)		(95,600)
Retained earnings (dividends in excess of earnings)	(182,637)		(177,005)
Accumulated other comprehensive income (loss)	(14,879)		(21,009)
Total shareholders’ equity	1,538,876		1,533,346
Noncontrolling interests in consolidated ventures	(723)		215
Total equity	1,538,153		1,533,561
Total liabilities and equity	$	5,503,142	$	5,951,173

(1)Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

Refer to the accompanying notes to consolidated financial statements.

4

Ladder Capital Corp

Consolidated Statements of Income

(Dollars in Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net interest income
Interest income	$	101,090	$	77,359	$	306,715	$	198,832
Interest expense	62,259		48,471		184,350		138,212
Net interest income (expense)	38,831		28,888		122,365		60,620
Provision for (release of) loan loss reserves, net	7,473		1,501		19,090		1,373
Net interest income (expense) after provision for (release of) loan losses	31,358		27,387		103,275		59,247
Other income (loss)
Real estate operating income	24,761		27,679		73,847		82,678
Net result from mortgage loan receivables held for sale	(629)		796		(1,119)		(2,083)
Realized gain (loss) on securities	23		9		(276)		(75)
Unrealized gain (loss) on securities	(42)		(66)		(20)		(98)
Realized gain (loss) on sale of real estate, net	8,808		4,393		8,808		62,101
Fee and other income	1,829		2,697		6,987		12,238
Net result from derivative transactions	4,773		6,567		6,680		12,381
Earnings from investment in unconsolidated ventures	479		407		913		1,197
Gain on extinguishment of debt	921		—		10,600		685
Total other income (loss)	40,923		42,482		106,420		169,024
Costs and expenses
Compensation and employee benefits	14,285		13,806		50,612		59,165
Operating expenses	4,775		5,143		15,018		15,303
Real estate operating expenses	9,456		10,069		29,071		28,928
Investment related expenses	2,279		1,689		6,460		5,163
Depreciation and amortization	7,144		7,864		22,144		24,764
Total costs and expenses	37,939		38,571		123,305		133,323
Income (loss) before taxes	34,342		31,298		86,390		94,948
Income tax expense (benefit)	3,147		2,613		4,913		3,897
Net income (loss)	31,195		28,685		81,477		91,051
Net (income) loss attributable to noncontrolling interests in consolidated ventures	124		(102)		412		(8,388)
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Earnings per share:
Basic	$	0.25	$	0.23	$	0.66	$	0.66
Diluted	$	0.25	$	0.23	$	0.66	$	0.66
Weighted average shares outstanding:
Basic	124,730,343		124,278,732		124,652,426		124,393,861
Diluted	124,968,545		125,172,180		124,817,335		125,813,280

Refer to the accompanying notes to consolidated financial statements.

5

Ladder Capital Corp

Consolidated Statements of Comprehensive Income

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	31,195	$	28,685	$	81,477	$	91,051
Other comprehensive income (loss)
Unrealized gain (loss) on securities, net of tax:
Unrealized gain (loss) on securities, available for sale	1,355		(947)		5,537		(14,749)
Reclassification adjustment for (gain) loss included in net income (loss)	290		(9)		593		50
Total other comprehensive income (loss)	1,645		(956)		6,130		(14,699)
Comprehensive income (loss)	32,840		27,729		87,607		76,352
Comprehensive (income) loss attributable to noncontrolling interest in consolidated ventures	124		(102)		412		(8,388)
Comprehensive income (loss) attributable to Class A common shareholders	$	32,964	$	27,627	$	88,019	$	67,964

Refer to the accompanying notes to consolidated financial statements.

6

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Equity
	Shares	Par										Consolidated Ventures
Balance, June 30, 2023	126,932	$	127	$	1,839,003	$	(105,738)	$	(184,769)	$	(16,524)	$	(599)	$	1,531,500
Amortization of equity based compensation	—	—		3,205		—		—		—		—		3,205
Purchase of treasury stock	(19)	—		—		(197)		—		—		—		(197)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(1)	—		—		(8)		—		—		—		(8)
Dividends declared	—	—		—		—		(29,187)		—		—		(29,187)
Net income (loss)	—	—		—		—		31,319		—		(124)		31,195
Other comprehensive income (loss)	—	—		—		—		—		1,645		—		1,645
Balance, September 30, 2023	126,912	$	127	$	1,842,208	$	(105,943)	$	(182,637)	$	(14,879)	$	(723)	$	1,538,153

Refer to the accompanying notes to consolidated financial statements.

7

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Equity
	Shares	Par										Consolidated Ventures
Balance, June 30, 2022	126,834	$	127	$	1,819,298	$	(92,302)	$	(206,922)	$	(17,855)	$	7,363	$	1,509,709
Distributions	—	—		—		—		—		—		(5,804)		(5,804)
Amortization of equity based compensation	—	—		3,738		—		—		—		—		3,738
Grants of restricted stock	7	—		—		—		—		—		—		—
Purchase of treasury stock	(266)	—		—		(2,623)		—		—		—		(2,623)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock and units	(3)	—		—		(35)		—		—		—		(35)
Forfeitures	(6)	—		—		—		—		—		—		—
Dividends declared	—	—		—		—		(29,095)		—		—		(29,095)
Net income (loss)	—	—		—		—		28,583		—		102		28,685
Other comprehensive income (loss)	—	—		—		—		—		(956)		—		(956)
Balance, September 30, 2022	126,566	$	127	$	1,823,036	$	(94,960)	$	(207,434)	$	(18,811)	$	1,661	$	1,503,619

Refer to the accompanying notes to consolidated financial statements.

8

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling  Interests		Total Equity
	Shares	Par										Consolidated Ventures
Balance, December 31, 2022	126,502	$	127	$	1,826,833	$	(95,600)	$	(177,005)	$	(21,009)	$	215	$	1,533,561
Distributions	—	—		—		—		—		—		(526)		(526)
Amortization of equity based compensation	—	—		15,375		—		—		—		—		15,375
Grants of restricted stock	1,008	1		—		(1)		—		—		—		—
Purchase of treasury stock	(269)	—		—		(2,481)		—		—		—		(2,481)
Re-issuance of treasury stock	410	—		—		—		—		—		—		—
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	(689)	(1)		—		(7,861)		—		—		—		(7,862)
Forfeitures	(50)	—		—		—		—		—		—		—
Dividends declared	—	—		—		—		(87,521)		—		—		(87,521)
Net income (loss)	—	—		—		—		81,889		—		(412)		81,477
Other comprehensive income (loss)	—	—		—		—		—		6,130		—		6,130
Balance, September 30, 2023	126,912	$	127	$	1,842,208	$	(105,943)	$	(182,637)	$	(14,879)	$	(723)	$	1,538,153

Refer to the accompanying notes to consolidated financial statements.

9

Ladder Capital Corp

Consolidated Statements of Changes in Equity

(Dollars and Shares in Thousands)

(Unaudited)

	Shareholders’ Equity
	Class A Common Stock			Additional Paid- in-Capital		Treasury Stock		Retained Earnings (Dividends in Excess of Earnings)		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Equity
	Shares	Par										Consolidated Ventures
Balance, December 31, 2021	125,453	$	126	$	1,795,249	$	(76,324)	$	(207,802)	$	(4,112)	$	6,482	$	1,513,619
Contributions	—	—		—		—		—		—		186		186
Distributions	—	—		—		—		—		—		(13,395)		(13,395)
Amortization of equity based compensation	—	—		27,787		—		—		—		—		27,787
Grants of restricted stock	2,289	2		—		(2)		—		—		—		—
Purchase of treasury stock	(721)	(1)		—		(7,278)		—		—		—		(7,279)
Re-issuance of treasury stock	596	1		—		(1)		—		—		—		—
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	(955)	(1)		—		(11,355)		—		—		—		(11,356)
Forfeitures	(96)	—		—		—		—		—		—		—
Dividends declared	—	—		—		—		(82,295)		—		—		(82,295)
Net income (loss)	—	—		—		—		82,663		—		8,388		91,051
Other comprehensive income (loss)	—	—		—		—		—		(14,699)		—		(14,699)
Balance, September 30, 2022	126,566	$	127	$	1,823,036	$	(94,960)	$	(207,434)	$	(18,811)	$	1,661	$	1,503,619

Refer to the accompanying notes to consolidated financial statements.

10

Ladder Capital Corp

Consolidated Statements of Cash Flows

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	81,477	$	91,051
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
(Gain) loss on extinguishment of debt	(10,600)		(685)
Depreciation and amortization	22,144		24,764
Non-cash operating lease expense	1,457		—
Unrealized (gain) loss on derivative instruments	175		(825)
Unrealized (gain) loss on equity securities	(2)		77
Unrealized (gain) loss on Agency interest-only securities	22		21
Provision for (release of) loan loss reserves	19,090		1,373
Amortization of equity based compensation	15,375		27,787
Amortization of deferred financing costs included in interest expense	9,662		12,152
Amortization of premium/discount on mortgage loan financing included in interest expense	(452)		(649)
Amortization of above- and below-market lease intangibles	(1,360)		(1,318)
(Accretion)/amortization of discount, premium and other fees on loans	(14,971)		(14,932)
(Accretion)/amortization of discount and premium on securities	(796)		(360)
Net result from mortgage loan receivables held for sale	1,119		2,083
Realized (gain) loss on securities	276		75
Realized (gain) loss on sale of real estate, net	(8,808)		(62,101)
Realized (gain) loss on sale of derivative instruments	269		—
(Earnings) loss from investments in unconsolidated ventures in excess of distributions received	(813)		(572)
Insurance proceeds for remediation work due to property damage	473		—
Insurance proceeds used for remediation work due to property damage	(457)		(27)
Origination of mortgage loan receivables held for sale	—		(61,318)
Repayment of mortgage loan receivables held for sale	—		68
Proceeds from sales of mortgage loan receivables held for sale	—		29,153
Change in deferred tax asset (liability)	2,929		137
Changes in operating assets and liabilities:
Accrued interest receivable	1,883		(6,699)
Other assets	6,941		5,288
Accrued expenses and other liabilities	(2,828)		7,673
Net cash provided by (used in) operating activities	122,205		52,216
Cash flows from investing activities:
Origination and funding of mortgage loan receivables held for investment	(61,412)		(1,183,422)
Repayment of mortgage loan receivables held for investment	531,797		725,913
Purchases of securities	(76,557)		(68,039)
Repayment of securities	172,992		136,864
Basis recovery of interest-only securities	3,066		3,924
Proceeds from sales of securities	17,838		5,454
Capital improvements of real estate	(2,640)		(5,657)
Proceeds from sale of real estate	13,391		173,119
Capital distribution from investment in unconsolidated ventures	—		2,284
Proceeds from FHLB stock	4,410		2,250
Purchase of derivative instruments	(223)		(942)
Sale of derivative instruments	—		157
Net cash provided by (used in) investing activities	602,662		(208,095)

11

	Nine Months Ended September 30,
	2023		2022
Cash flows from financing activities:
Deferred financing costs paid	(2,384)		(8,177)
Proceeds from borrowings under debt obligations	744,339		1,553,068
Repayment and repurchase of borrowings under debt obligations	(1,159,993)		(1,544,204)
Cash dividends paid to Class A common shareholders	(87,732)		(78,454)
Capital contributed by noncontrolling interests in consolidated ventures	—		186
Capital distributed to noncontrolling interests in consolidated ventures	(526)		(13,395)
Reissuance of treasury stock	—		(1)
Payment of liability assumed in exchange for shares for the minimum withholding taxes on vesting restricted stock	(7,862)		(11,356)
Purchase of treasury stock	(2,481)		(6,158)
Issuance of common stock	—		3
Net cash provided by (used in) financing activities	(516,639)		(108,488)
Net increase (decrease) in cash, cash equivalents and restricted cash	208,228		(264,367)
Cash, cash equivalents and restricted cash at beginning of period	659,602		621,546
Cash, cash equivalents and restricted cash at end of period	$	867,830	$	357,179
Non-cash investing and financing activities:
Securities and derivatives purchased, not settled	—		17
Securities and derivatives sold, not settled	—		10
Repurchase of treasury shares, not settled	—		1,121
Repayments in transit of securities (other assets)	—		2
Repayment in transit of mortgage loans receivable held for investment (other assets)	47,070		21,319
Settlement of mortgage loan receivable held for investment by real estate, net	(30,497)		—
Real estate acquired in settlement of mortgage loan receivable held for investment, net	30,400		—
Net settlement of sale of real estate, subject to debt - real estate	(31,292)		—
Net settlement of sale of real estate, subject to debt - debt obligations	31,292		—
Real estate acquired in former unconsolidated venture agreement	—		15,436
Transfer of real estate, net into real estate held for sale	—		(62,814)
Dividends declared, not paid	31,788		31,432

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows ($ in thousands):

	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	798,391	$	328,440
Restricted cash	59,523		28,739
Short-term unsettled U.S. Treasury securities classified in other assets on the consolidated balance sheet	9,916		—
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	867,830	$	357,179

Refer to the accompanying notes to consolidated financial statements.

12

Ladder Capital Corp

Notes to Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION AND OPERATIONS

Ladder Capital Corp (“Ladder,” “Ladder Capital,” and the “Company”) is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. The Company originates and invests in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. The Company’s investment activities include: (i) the Company’s primary business of originating senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures; (ii) owning and operating commercial real estate, including net leased commercial properties; and (iii) investing in investment grade securities secured by first mortgage loans on commercial real estate. Ladder Capital Corp, as the general partner of Ladder Capital Finance Holdings LLLP (“LCFH” or the “Operating Partnership”), operates the Ladder Capital business through LCFH and its subsidiaries. As of September 30, 2023, Ladder Capital Corp has a 100% economic interest in LCFH and controls the management of LCFH as a result of its ability to appoint its board members. Accordingly, Ladder Capital Corp consolidates the financial results of LCFH and its subsidiaries. In addition, Ladder Capital Corp, through certain subsidiaries which are treated as taxable REIT subsidiaries (each a “TRS”), is indirectly subject to U.S. federal, state and local income taxes. Other than such indirect U.S. federal, state and local income taxes, there are no material differences between Ladder Capital Corp’s consolidated financial statements and LCFH’s consolidated financial statements.

Ladder Capital Corp was formed as a Delaware corporation on May 21, 2013. The Company conducted its initial public offering (“IPO”) which closed on February 11, 2014. The Company used the net proceeds from the IPO to purchase newly-issued limited partnership units (“LP Units”) from LCFH. In connection with the IPO, Ladder Capital Corp also became a holding corporation and the general partner of, and obtained a controlling interest in, LCFH. Ladder Capital Corp’s only business is to act as the general partner of LCFH, and, as such, Ladder Capital Corp indirectly operates and controls all of the business and affairs of LCFH and its subsidiaries. The IPO transactions described herein are referred to as the “IPO Transactions.”

13

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this report reflects all normal and recurring adjustments necessary for a fair statement of results of operations, financial position and cash flows. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022, which are included in the Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this interim report. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.

The consolidated financial statements include the Company’s accounts and those of its subsidiaries that are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. Refer to Note 9, Consolidated Variable Interest Entities, for further information on the Company’s consolidated variable interest entities. Investments in and advances to unconsolidated ventures represents the Company’s investment in Grace Lake LLC, a VIE. The Company determined that it was not the primary beneficiary of this VIE because the Company has a passive investment and no control of this entity and therefore does not have controlling financial interests in this VIE. The Company’s maximum exposure to loss is limited to its investment in the VIE. The Company has not provided financial support to this unconsolidated VIE that it was not previously contractually required to provide.

Provision for Loan Losses

The Company uses a current expected credit loss model (“CECL”) for estimating the provision for loan losses on its loan portfolio. The CECL model requires the consideration of possible credit losses over the life of an instrument and includes a portfolio-based component and an asset-specific component. In accordance with ASC 326 reporting requirements, the Company supplemented its existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. The Company engages a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with the Company’s loan-level data, fair value of collateral, net operating income of collateral, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level. Where management has determined that the credit loss model does not fully capture certain external factors, including portfolio trends or loan-specific factors, a qualitative adjustment to the reserve, is recorded. In addition, interest receivable on loans is not included in the Company’s CECL calculations as the Company performs timely write off of aged accounts receivable. The Company has made a policy election to write off aged receivables through interest income as opposed to through the CECL provision on its statements of income.

Loans for which the borrower or sponsor is experiencing financial difficulty, and where repayment of the loan is expected substantially through the operation or sale of the underlying collateral, are considered collateral dependent loans.

For collateral dependent loans, the Company measures expected losses based on the difference between the collateral’s fair value and the amortized cost basis of the loan. When the repayment or satisfaction of the loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated costs to sell the collateral.

14

The Company may use the direct capitalization rate valuation methodology, the discounted cash flow methodology, or the sales comparison approach to estimate the fair value of the collateral for collateral dependent loans and in certain cases will obtain external appraisals and take into account potential sale bids. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess: (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan at maturity; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including: (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and other market data and ultimately presented to management for approval.

When a debtor is experiencing financial difficulties and a loan is modified, the effect of the modification will be included in the Company’s assessment of the CECL allowance for loan losses. If the Company provides principal forgiveness, the amortized cost basis of the loan is written off against the allowance for loan losses. Generally, when modifying loans, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset the effects of modifications granted should conditions impacting the loan improve.

The Company designates a loan as a non-accrual loan generally when: (i) the principal or coupon interest components of loan payments become 90-days past due; or (ii) in the opinion of the Company, it is doubtful the Company will be able to collect all principal and coupon interest due according to the contractual terms of the loan. Interest income on non-accrual loans in which the Company reasonably expects a full recovery of the loan’s outstanding principal balance is recognized when received in cash. Otherwise, income recognition will be suspended and any cash received will be applied as a reduction to the amortized cost basis. A non-accrual loan is returned to accrual status at such time as the loan becomes contractually current and future principal and coupon interest are reasonably assured to be received in accordance with the contractual loan terms. A loan will be written off when management has determined principal and coupon interest is no longer realizable and deemed non-recoverable.

Recently Adopted Accounting Pronouncements

In March 2022, the FASB issued ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, (“ASU 2022-02”). ASU 2022-02 eliminated the recognition and measurement guidance for troubled debt restructuring for creditors that have adopted ASC 326 and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The standard is effective for fiscal years beginning after December 15, 2022. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

Management is evaluating any new accounting standards that have been issued or proposed by FASB and that do not require adoption until a future date. These new standards are not expected to have a material impact on the consolidated financial statements upon adoption.

15

3. MORTGAGE LOAN RECEIVABLES

September 30, 2023 ($ in thousands)

	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)(2)		Remaining Maturity (years)(2)(3)
Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,343,499	$	3,334,385		9.75	%	0.8
Mezzanine loans	37,346		37,300			11.53	%	1.1
Total mortgage loans receivable	3,380,845		3,371,685			9.77	%	0.8
Allowance for credit losses	N/A		(39,575)
Total mortgage loan receivables held for investment, net, at amortized cost	3,380,845		3,332,110
Mortgage loan receivables held for sale:
First mortgage loans	31,350		26,272		(4)	4.57	%	8.4
Total	$	3,412,195	$	3,358,382	(5)	9.73	%	0.8

(1)Includes the impact from interest rate floors. Term SOFR rates in effect as of September 30, 2023 are used to calculate weighted average yield for floating rate loans.

(2)Excludes non-accrual loans of $58.4 million. Refer to “Non-Accrual Status” below for further details.

(3)The remaining maturity is calculated based on the initial maturity. The weighted average extended maturity for all loans is 2.0 years.

(4)As a result of rising prevailing rates, the Company recorded a lower of cost or market adjustment as of September 30, 2023. The adjustment was calculated using a 5.94% discount rate.

(5)Net of $9.2 million of deferred origination fees and other items as of September 30, 2023.

As of September 30, 2023, $3.0 billion, or 87.7%, of the outstanding face amount of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates linked to Term SOFR. Of this $3.0 billion, 100.0% of these variable interest rate mortgage loan receivables were subject to interest rate floors. As of September 30, 2023, $31.4 million, or 100%, of the outstanding face amount of our mortgage loan receivables held for sale were at fixed interest rates.

December 31, 2022 ($ in thousands)

	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)(2)(3)		Remaining Maturity (years)(2)(3)
Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,841,315	$	3,819,860		8.83	%	1.3
Mezzanine loans	65,950		65,886			10.62	%	1.6
Total mortgage loans receivable	3,907,265		3,885,746			8.85	%	1.3
Allowance for credit losses	N/A		(20,755)
Total mortgage loan receivables held for investment, net, at amortized cost	3,907,265		3,864,991
Mortgage loan receivables held for sale:
First mortgage loans	31,350		27,391		(4)	4.57	%	9.2
Total	$	3,938,615	$	3,892,382	(5)	8.82	%	1.3

(1)Includes the impact from interest rate floors. December 31, 2022 LIBOR rates are used to calculate weighted average yield for floating rate loans.

(2)Excludes non-accrual loans of $53.8 million.

(3)Includes the impact of one loan with a principal balance of $51.5 million, which was extended through 2026 in January 2023.

(4)As a result of rising prevailing rates, the Company recorded a lower of cost or market adjustment as of December 31, 2022. The adjustment was calculated using a 5.16% discount rate.

(5)Net of $21.5 million of deferred origination fees and other items as of December 31, 2022.

16

As of December 31, 2022, $3.4 billion, or 87.2%, of the outstanding face amount of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates with $2.3 billion linked to LIBOR and $1.1 billion linked to Term SOFR. Of this $3.4 billion, 99% of these variable rate mortgage loan receivables were subject to interest rate floors. As of December 31, 2022, $31.4 million, or 100%, of the outstanding face amount of our mortgage loan receivables held for sale were at fixed interest rates.

For the nine months ended September 30, 2023 and 2022, the activity in our loan portfolio was as follows ($ in thousands):

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans receivable		Allowance for credit losses		Mortgage loan  receivables held for sale
Balance, December 31, 2022	$	3,885,746	$	(20,755)	$	27,391
Origination of mortgage loan receivables (1)	61,412		—		—
Repayment of mortgage loan receivables (2)	(559,947)		—		—
Non-cash disposition of loans via foreclosure (3)	(30,497)		—		—
Net result from mortgage loan receivables held for sale (4)	—		—		(1,119)
Accretion/amortization of discount, premium and other fees	14,971		—		—
Release (addition) of provision for current expected credit loss, net (5)	—		(18,820)		—
Balance, September 30, 2023	$	3,371,685	$	(39,575)	$	26,272

(1)Includes funding of commitments on existing mortgage loans.

(2)Includes $28.2 million of repayments in transit.

(3)Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

(4)Includes unrealized lower of cost or market adjustment and realized gain/loss on loans held for sale.

(5)Refer to “Allowance for Credit Losses” table below for further detail.

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans receivable		Allowance for credit losses		Mortgage loan  receivables held for sale
Balance, December 31, 2021	$	3,553,737	$	(31,752)	$	—
Origination of mortgage loan receivables (1)	1,183,423		—		61,318
Repayment of mortgage loan receivables	(720,597)		—		(68)
Proceeds from sales of mortgage loan receivables	—		—		(29,053)
Net result from mortgage loan receivables held for sale (2)	2,197		—		(4,380)
Accretion/amortization of discount, premium and other fees	14,932		—		—
Charge offs	(14,395)		14,395		—
Release (addition) of provision for current expected credit loss, net (3)	—		(1,117)		—
Balance, September 30, 2022	$	4,019,297	$	(18,474)	$	27,817

(1)Includes funding of commitments on existing mortgage loans.

(2)Represents unrealized lower of cost or market adjustment on loans held for sale.

(3)Refer to “Allowance for Credit Losses” table below for further detail.

17

Allowance for Credit Losses and Non-Accrual Status ($ in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
Allowance for Credit Losses	2023		2022		2023		2022
Allowance for credit losses at beginning of period	$	32,248	$	16,960	$	20,755	$	31,752
Provision for (release of) current expected credit loss, net (1)	7,327		1,514		18,820		4,222
Charge-offs	—		—		—		(14,395)
Recoveries (2)	—		—		—		(3,105)
Allowance for credit losses at end of period	$	39,575	$	18,474	$	39,575	$	18,474

(1)There were no asset-specific reserves recorded for the nine months ended September 30, 2023 or 2022.

(2)Recoveries are recognized within the consolidated statements of income through “Provision for (release of) loan loss reserves.”

Non-Accrual Status (1)	September 30, 2023(2)(3)		December 31, 2022(2)(4)
Amortized cost basis of loans on non-accrual status, net of asset-specific reserve	$	58,436	$	53,809

(1)As of September 30, 2023 and December 31, 2022, the loans on non-accrual status were greater than 90 days past due and are considered collateral dependent.

(2)Includes two retail loans with an amortized cost basis of $25.8 million and asset-specific reserves of $2.7 million.

(3)Includes one mixed-use loan with an amortized cost basis of $35.3 million, for which the Company determined no asset-specific reserve was necessary.

(4)Includes one mixed-use loan with an amortized cost basis of $30.5 million.

During the nine months ended September 30, 2023, the Company modified two first mortgage loans with a combined amortized cost basis of $106.6 million as of September 30, 2023, or 3.2% of the Company’s mortgage loan receivable portfolio. Together, these modifications resulted in a weighted average extension of 2.3 years, in exchange for terms that included $6.0 million of payments that reduced our amortized cost basis and $6.5 million of reserve replenishments. No principal or interest was forgiven, and Ladder also received a 15% non-controlling common equity interest in one of the properties. The payment structure of both loans was modified to defer a portion of the contractual interest until maturity and the Company is accruing only the current pay component. As of September 30, 2023, both loans are current. Subsequent to the modifications, for the three and nine months ended September 30, 2023, the Company accrued $0.7 million and $1.8 million of interest income related to these two loans, respectively.

Current Expected Credit Loss (“CECL”)

As of September 30, 2023, the Company has a $40.6 million allowance for current expected credit losses, of which $39.6 million pertains to mortgage loan receivables and $1.0 million relates to unfunded commitments. This allowance includes $2.7 million of asset-specific reserves relating to two retail loans. As of September 30, 2023, the Company concluded that none of its other loans required an asset-specific reserve.

As of December 31, 2022, the Company had a $21.5 million allowance for current expected credit losses, of which $20.8 million pertained to mortgage loan receivables and $0.7 million related to unfunded commitments. This allowance included $2.7 million of asset-specific reserves relating to two retail loans with an amortized cost basis of $26.0 million as of December 31, 2022. The Company concluded that none of its other loans are individually impaired as of December 31, 2022.

The total change in provision for loan loss reserves for the three and nine months ended September 30, 2023 was an increase of the provision of $7.5 million and $19.1 million, respectively. The net increase for the three and nine months ended September 30, 2023 represents an increase in the general reserve of loans held for investment of $7.3 million and $18.8 million, respectively, and an increase related to unfunded loan commitments of $146 thousand and $270 thousand, respectively. The increase in provision associated with the general reserve during the three and nine months ended September 30, 2023 is primarily due to adverse changes in macroeconomic market conditions affecting commercial real estate.

18

The total change in provision for loan loss reserves for the three and nine months ended September 30, 2022 was an increase of the provision of $1.5 million and $1.4 million, respectively. The net increase for the three months ended September 30, 2022 represents an increase in the general reserve of loans held for investment of $1.5 million and a decrease related to unfunded loan commitments of $13 thousand. The net increase for the nine months ended September 30, 2022 represents an increase in the general reserve of loans held for investment of $4.2 million and an increase related to unfunded loan commitments $0.3 million partially offset by a $3.1 million recovery of provision. The increase in the general reserve during the three and nine months ended September 30, 2022 was primarily due to an overall increase in the size of our balance sheet first mortgage portfolio as a result of net originations during that time and adverse changes in macroeconomic conditions.

Loan Portfolio by Geographic Region, Collateral Type and Vintage (amortized cost $ in thousands)

	September 30,		December 31,
Geographic Region	2023		2022
Northeast	$	1,015,365	$	1,191,337
South	1,062,180		1,080,132
Southwest	482,865		675,069
Midwest	451,933		496,640
West	333,515		416,556
Subtotal mortgage loans receivable	3,345,858		3,859,734
Individually impaired loans	25,827		26,012
Total mortgage loans receivable	$	3,371,685	$	3,885,746

19

Management’s method for monitoring credit is the performance of a loan. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing the Company’s mortgage loan portfolio by collateral type. The primary credit quality indicator is reviewed and updated by management on a quarterly basis. The following tables summarize the amortized cost of the mortgage loan portfolio by collateral type as of September 30, 2023 and December 31, 2022, respectively ($ in thousands):

	Amortized Cost Basis by Origination Year as of September 30, 2023
Collateral Type	2023		2022		2021		2020		2019 and Earlier		Total (1)
Multifamily	$	14,420	$	548,555	$	664,065	$	—	$	—	$	1,227,040
Office	—		79,054		612,104		—		216,424		907,582
Mixed Use	—		200,949		322,957		—		41,392		565,298
Industrial	4,308		38,254		97,441		—		114,752		254,755
Retail	—		12,923		85,760		—		21,802		120,485
Manufactured Housing	—		32,625		82,854		—		—		115,479
Hospitality	—		—		18,574		—		92,226		110,800
Other	—		32,423		11,996		—		—		44,419
Subtotal mortgage loans receivable	18,728		944,783		1,895,751		—		486,596		3,345,858
Individually Impaired loans	—		—		—		—		25,827		25,827
Total mortgage loans receivable (2)	$	18,728	$	944,783	$	1,895,751	$	—	$	512,423	$	3,371,685

	Amortized Cost Basis by Origination Year as of December 31, 2022
Collateral Type	2022		2021		2020		2019		2018 and Earlier		Total
Multifamily	$	702,125	$	722,862	$	—	$	—	$	—	$	1,424,987
Office	78,754		676,431		29,650		58,684		136,512		980,031
Mixed Use	201,777		351,291		26,500		120,300		—		699,868
Industrial	37,616		96,486		—		115,545		—		249,647
Retail	60,089		107,305		—		12,953		9,126		189,473
Hospitality	—		45,416		—		13,843		78,364		137,623
Manufactured Housing	32,515		82,618		—		2,921		—		118,054
Other	32,353		19,898		—		7,800		—		60,051
Subtotal mortgage loans receivable	1,145,229		2,102,307		56,150		332,046		224,002		3,859,734
Individually Impaired loans	—		—		—		—		26,012		26,012
Total mortgage loans receivable (3)	$	1,145,229	$	2,102,307	$	56,150	$	332,046	$	250,014	$	3,885,746

(1)For the three and nine months ended September 30, 2023, there were no write offs.

(2)Not included above is $21.3 million of accrued interest receivable on all loans at September 30, 2023.

(3)Not included above is $23.2 million of accrued interest receivable on all loans at December 31, 2022.

20

4. SECURITIES

The Company invests in primarily AAA-rated real estate securities, typically front pay securities, with relatively short duration and significant credit subordination. We continue to actively monitor the impacts of current market conditions on our securities portfolio.

Commercial mortgage-backed securities (“CMBS”), CMBS interest-only securities, U.S. Agency securities, corporate bonds and U.S. Treasury securities are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income. As of September 30, 2023, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.

Government National Mortgage Association (“GNMA”) interest-only, Federal Home Loan Mortgage Corp (“FHLMC”) and equity securities are recorded at fair value with changes in fair value recorded in current period earnings. The following is a summary of the Company’s securities at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

						Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount			Amortized Cost Basis		Gains		Losses (7)		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS	$	484,501		$	483,880	$	136	$	(15,165)	$	468,851	(2)	67	AAA	6.64 %		6.79 %		2.08
CMBS interest-only(3)	888,870		(3)	7,487		145		(114)		7,518		(4)	9	AAA	0.43 %		6.44 %		1.13
GNMA interest-only(5)	43,946		(3)	230		28		(54)		204			14	AAA	0.31 %		5.59 %		3.05
Agency securities	25			25		—		(1)		24			1	AAA	4.00 %		2.70 %		1.18
Total debt securities	$	1,417,342		$	491,622	$	309	$	(15,334)	$	476,597	(6)	91		2.55	%	6.78	%	2.06
Equity securities	N/A			160		—		(39)		121			1	N/A	N/A		N/A		N/A
Allowance for current expected credit losses	N/A			—		—		(20)		(20)
Total securities	$	1,417,342		$	491,782	$	309	$	(15,393)	$	476,698		92

December 31, 2022

						Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount			Amortized Cost Basis		Gains		Losses (7)		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS	$	562,839		$	562,246	$	—	$	(20,913)	$	541,333	(2)	71	AAA	5.22	%	5.32	%	1.06
CMBS interest-only(3)	1,026,195		(3)	10,498		121		(176)		10,443		(4)	10	AAA	0.41	%	3.65	%	1.45
GNMA interest-only(5)	45,369		(3)	285		17		(21)		281			14	AAA	0.31	%	4.23	%	3.30
Agency securities	36			36		—		(1)		35			1	AAA	4.00	%	2.70	%	1.54
U.S. Treasury securities	36,000			35,374		6		(52)		35,328			10	AAA	N/A		4.17	%	0.60
Total debt securities	$	1,670,439		$	608,439	$	144	$	(21,163)	$	587,420	(6)	106		2.06	%	5.29	%	1.07
Equity securities	N/A			160		—		(41)		119			1	N/A	N/A		N/A		N/A
Allowance for current expected credit losses	N/A			—		—		(20)		(20)
Total real estate securities	$	1,670,439		$	608,599	$	144	$	(21,224)	$	587,519		107

(1)Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple rating agencies, the highest rating is used. The ratings provided were determined by third-party rating agencies. The rates may not be current and are subject to change (including the assignment of a “negative outlook” or “credit watch”) at any time.

(2)As of September 30, 2023 and December 31, 2022, includes $9.0 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (“Dodd-Frank Act”) and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(3)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(4)As of September 30, 2023 and December 31, 2022, includes $0.3 million and $0.4 million, respectively of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

21

(5)GNMA interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s GNMA interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company has elected to account for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on securities in the consolidated statements of income.

(6)The Company’s investments in debt securities represent an ownership interest in unconsolidated VIEs. The Company’s maximum exposure to loss from these unconsolidated VIEs is the amortized cost basis of the securities which represents the purchase price of the investment adjusted by any unamortized premiums or discounts as of the reporting date.

(7)Based on the Company’s analysis, including review of interest rate changes and current levels of subordination, among other factors, the unrealized loss positions are determined to be due to market factors other than credit.

The following summarizes the carrying value of the Company’s debt securities by remaining maturity based upon expected cash flows at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	109,188	$	346,226	$	13,437	$	—	$	468,851
CMBS interest-only	2,736		4,782		—		—		7,518
GNMA interest-only	13		100		91		—		204
Agency securities	—		24		—		—		24
Total securities (1)	$	111,937	$	351,132	$	13,528	$	—	$	476,597

(1)Excluded from the table above are $0.1 million of equity securities and $(20.0) thousand of allowance for current expected credit losses.

December 31, 2022

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	346,272	$	195,061	$	—	$	—	$	541,333
CMBS interest-only	937		9,506		—		—		10,443
GNMA interest-only	40		111		130		—		281
Agency securities	—		35		—		—		35
U.S. Treasury securities	32,451		2,877		—		—		35,328
Total securities (1)	$	379,700	$	207,590	$	130	$	—	$	587,420

(1)Excluded from the table above are $0.1 million of equity securities and $(20.0) thousand of allowance for current expected credit losses.

During the three and nine months ended September 30, 2023, the Company did not sell any equity securities. During the three and nine months ended September 30, 2022, the Company sold $0.7 million and $1.2 million of equity securities, respectively.

22

5. REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

The Company’s real estate assets were comprised of the following ($ in thousands):

	September 30, 2023		December 31, 2022
Land	$	167,158	$	158,802
Building	605,499		625,655
In-place leases and other intangibles	115,708		114,687
Undepreciated real estate and related lease intangibles	888,365		899,144
Less: Accumulated depreciation and amortization	(213,031)		(199,008)
Real estate and related lease intangibles, net(1)	$	675,334	$	700,136
Below market lease intangibles, net (other liabilities)(2)	$	(29,390)	$	(30,892)

(1)There was unencumbered real estate of $104.8 million and $140.3 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Below market lease intangibles is net of $15.2 million and $13.6 million of accumulated amortization as of September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023 and December 31, 2022, the Company held foreclosed properties included in real estate and related lease intangibles, net with carrying values of $94.4 million and $103.1 million, respectively.

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense(1)	$	5,803	$	6,310	$	18,146	$	19,396
Amortization expense	1,341		1,554		3,998		5,368
Total real estate depreciation and amortization expense	$	7,144	$	7,864	$	22,144	$	24,764

(1)Depreciation expense on the consolidated statements of income also includes $0.1 million and $0.3 million of depreciation on corporate fixed assets for the three and nine months ended September 30, 2023, respectively, and $8 thousand for the nine months ended September 30, 2022.

The Company’s intangible assets are comprised of in-place leases, above market leases and other intangibles. The following tables present additional detail related to our intangible assets ($ in thousands):

	September 30, 2023		December 31, 2022
Gross intangible assets(1)	$	115,708	$	114,687
Accumulated amortization	53,938		49,725
Net intangible assets	$	61,770	$	64,962

(1)Includes $2.8 million of unamortized above market lease intangibles, which are included in real estate and related lease intangibles, net on the consolidated balance sheets as of September 30, 2023 and December 31, 2022.

The following table presents increases/reductions in operating lease income related to the amortization of above or below market leases recorded by the Company ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Reduction in operating lease income for amortization of above market lease intangibles acquired	$	(73)	$	(76)	$	(216)	$	(229)
Increase in operating lease income for amortization of below market lease intangibles acquired	526		513		1,576		1,547
Total	$	453	$	437	$	1,360	$	1,318

23

The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of September 30, 2023 ($ in thousands):

Period Ending December 31,	Increase/(Decrease) to Operating Lease Income		Amortization Expense
2023 (last three months)	$	448	$	1,430
2024	1,788		5,718
2025	1,773		5,509
2026	1,736		4,519
2027	1,699		4,332
Thereafter	19,152		37,471
Total	$	26,596	$	58,979

Rent Receivables

There were $0.9 million and $1.3 million of rent receivables included in other assets on the consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

Operating Lease Income & Tenant Reimbursements

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at September 30, 2023 ($ in thousands):

Period Ending December 31,	Amount
2023 (last three months)	$	15,516
2024	57,029
2025	52,063
2026	50,712
2027	49,252
Thereafter	206,027
Total	$	430,599

Tenant reimbursements, which consist of real estate taxes and other municipal charges paid by the Company, which were reimbursable by our tenants pursuant to the terms of the lease agreements, were $1.4 million and $3.5 million for the three and nine months ended September 30, 2023, respectively, and $1.4 million and $3.9 million for the three and nine months ended September 30, 2022, respectively. Tenant reimbursements are included in operating lease income on the Company’s consolidated statements of income.

Acquisitions

The Company acquired the following properties during the nine months ended September 30, 2023 ($ in thousands):

Acquisition Date		Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
September 2023	(2)	Mixed use	New York, NY	$	30,400	100.0%
Total real estate acquisitions				$	30,400

(1)Properties were consolidated as of acquisition date.

(2)In September 2023, the Company acquired a mixed use portfolio consisting of four properties in New York, NY via foreclosure. The portfolio served as collateral for a mortgage loan receivable held for investment. The Company obtained a third-party appraisal of the property. The $30.4 million fair value was determined by using the sales comparison and income approaches. The appraiser utilized a terminal capitalization rate of 5.5%. There was no gain or loss resulting from the foreclosure of the loan. The key inputs used to determine fair value were determined to be Level 3 inputs.

24

The Company acquired the following properties during the nine months ended September 30, 2022 ($ in thousands):

Acquisition Date		Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
February 2022	(2)	Apartments	New York, NY	$	15,436	100.0%
Total real estate acquisitions				$	15,436

(1)Properties were consolidated as of acquisition date.

(2)In February 2022, the Company acquired, via change in control, a previously held interest in a non-controlling equity investment in a mixed use property with one remaining residential condo unit and one remaining retail condo unit in New York, New York. The carrying value of the property at the time of change in control was $15.4 million, which was determined to be fair value. The fair value of the remaining condo unit was determined based on comparable sales in the building and the value of the remaining retail unit was valued utilizing a direct capitalization rate of 5.5%. The key inputs used to determine fair value were determined to be Level 3 inputs.

The Company allocates purchase consideration based on relative fair values, and real estate acquisition costs are capitalized as a component of the cost of the assets acquired for asset acquisitions. During the nine months ended September 30, 2023 and September 30, 2022, all acquisitions were determined to be asset acquisitions.

Sales

The Company sold the following properties during the nine months ended September 30, 2023 ($ in thousands):

Sales Date	Type	Primary Location(s)		Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties
August 2023	Hotel	San Diego, CA	(1)	$	43,335	$	34,526	$	8,808	1
Totals				$	43,335	$	34,526	$	8,808

(1)Included within sales proceeds is $31.3 million of mortgage financing that was assumed by the buyer.

The Company sold the following properties during the nine months ended September 30, 2022 ($ in thousands):

Sales Date	Type	Primary Location(s)		Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties
March 2022	Office	Ewing, NJ		$	38,694	$	24,175	$	14,519	1
March 2022	Warehouse	Conyers, GA		40,752		26,116		14,636		1
June 2022	Apartments	Stillwater, OK		23,314		18,032		5,283		1
June 2022	Apartments	Miami, FL		60,856		37,585		23,270		1
September 2022	Retail	Wichita, KS		9,503		5,110		4,393		1
Totals			(1)	$	173,119	$	111,018	$	62,101

(1)Excludes $3.7 million of prepayment costs upon repayment of the mortgage financing in connection with the sales that is recorded within interest expense on the consolidated statement of income, such amount was correspondingly paid by the buyer and received by the Company as part of the sale and recorded in fee and other income on the consolidated statement of income.

25

6. DEBT OBLIGATIONS, NET

The details of the Company’s debt obligations at September 30, 2023 and December 31, 2022 are as follows ($ in thousands):

September 30, 2023

Debt Obligations	Committed / Principal Amount		Carrying Value of Debt Obligations			Committed but Unfunded		Interest Rate at September 30, 2023(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility	$	500,000	$	256,170		$	243,830	7.07%	—	7.47%	9/27/2025	(2)	(3)	$	351,242	$	351,242
Committed Loan Repurchase Facility	300,000		141,681			158,319		7.18%	—	8.33%	12/19/2023	(4)	(5)	222,705		219,355
Committed Loan Repurchase Facility	142,000		139,162			2,838		7.03%	—	7.57%	4/30/2024	(6)	(3)	65,027		65,027
Committed Loan Repurchase Facility	100,000		77,959			22,041		6.73%	—	7.23%	1/2/2024	(7)	(3)	103,831		103,831
Committed Loan Repurchase Facility	100,000		—			100,000		—%		—%	1/22/2024	(8)	(5)	—		—
Total Committed Loan Repurchase Facilities	1,142,000		614,972			527,028								742,805		739,455
Committed Securities Repurchase Facility	100,000		—			100,000		—%	—	—%	5/27/2024	N/A	(9)	—		—
Uncommitted Securities Repurchase Facility	N/A (10)		1,646			N/A (10)		6.54%	—	7.49%	10/19/2023	N/A	(9)	8,902		8,902		(11)
Total Repurchase Facilities	1,242,000		616,618			627,028								751,707		748,357
Revolving Credit Facility	323,850		—			323,850		—%	—	—%	7/27/2024	(12)	N/A (13)	N/A (13)		N/A (13)
Mortgage Loan Financing	437,448		437,739			—		4.39%	—	9.03%	2024-2031 (14)	N/A	(15)	478,428		624,663		(16)
CLO Debt	1,063,249		1,060,417		(17)	—		6.65%	—	9.10%	2024-2026 (18)	N/A	(3)	1,272,832		1,272,832
Borrowings from the FHLB	115,000		115,000			—		5.69%	—	5.81%	2023-2024	N/A	(19)	141,853		141,853		(20)
Senior Unsecured Notes	1,576,614		1,564,071		(21)	—		4.25%	—	5.25%	2025-2029	N/A	N/A (22)	N/A (22)		N/A (22)
Total Debt Obligations, Net	$	4,758,161	$	3,793,845		$	950,878							$	2,644,820	$	2,787,705

(1)Interest rates on floating rate debt reflect the applicable index in effect as of September 30, 2023.

(2)Two 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)Two additional 364-day periods at Company’s option.

(5)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(6)Three additional 12-month extension periods at Company’s option.

(7)One additional 12-month extension periods at Company’s option. No new advances are permitted.

(8)Two additional 12-month extension periods at Company's option. No new advances permitted during the final 12-month period.

(9)Commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(10)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(11)Includes $1.9 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(12)Three additional 12-month periods at Company’s option.

(13)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(14)Anticipated repayment dates.

(15)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(16)Using undepreciated carrying value of commercial real estate to approximate fair value.

(17)Presented net of unamortized debt issuance costs of $2.8 million at September 30, 2023.

(18)Represents the estimated maturity date based on the remaining reinvestment period and underlying loan maturities.

(19)Investment grade commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(20)Includes $2.3 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(21)Presented net of unamortized debt issuance costs of $12.5 million at September 30, 2023.

(22)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

26

December 31, 2022

Debt Obligations	Committed / Principal Amount		Carrying Value of Debt Obligations			Committed but Unfunded		Interest Rate at December 31, 2022(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility(2)	$	500,000	$	318,983		$	181,017	6.07%	—	6.57%	9/27/2025	(2)	(3)	$	428,477	$	429,276
Committed Loan Repurchase Facility	100,000		—			100,000		—%	—	—%	2/26/2023	(4)	(5)	—		—
Committed Loan Repurchase Facility	300,000		157,558			142,442		6.19%	—	7.07%	12/19/2023	(6)	(7)	244,102		244,102
Committed Loan Repurchase Facility	100,000		47,415			52,585		6.00%	—	6.00%	4/30/2024	(8)	(3)	63,307		63,307
Committed Loan Repurchase Facility	100,000		77,959			22,041		5.74%	—	6.24%	1/3/2023	(2)	(3)	103,393		103,393
Committed Loan Repurchase Facility	100,000		—			100,000		—%		—%	1/22/2024	(9)	(7)	—		—
Committed Loan Repurchase Facility	100,000		14,979			85,021		7.07%	—	7.07%	7/14/2023	(10)	(11)	21,206		21,206
Total Committed Loan Repurchase Facilities	1,300,000		616,894			683,106								860,485		861,284
Committed Securities Repurchase Facility(2)	100,000		8,640			91,360		5.04%	—	5.29%	5/27/2023	N/A	(12)	10,023		10,023
Uncommitted Securities Repurchase Facility	N/A (13)		222,328			N/A (13)		4.73%	—	6.00%	3/2/2023	N/A	(12)	247,351		247,351		(14)
Total Repurchase Facilities	1,400,000		847,862			774,466								1,117,859		1,118,658
Revolving Credit Facility	323,850		—			323,850		—%	—	—%	7/27/2023	(15)	N/A (16)	N/A (16)		N/A (16)
Mortgage Loan Financing	497,454		497,991			—		4.25%	—	8.03%	2023 - 2031(17)	N/A	(18)	559,885		710,977		(19)
CLO Debt	1,064,365		1,058,462		(20)	—		5.52%	—	7.97%	2024 - 2026(21)	N/A	(3)	1,308,654		1,308,654
Borrowings from the FHLB	213,000		213,000			—		2.74%	—	4.70%	2023 - 2024	N/A	(22)	248,806		248,806		(23)
Senior Unsecured Notes	1,643,794		1,628,382		(24)	—		4.25%	—	5.25%	2025 - 2029	N/A	N/A (25)	N/A (25)		N/A (25)
Total Debt Obligations, Net	$	5,142,463	$	4,245,697		$	1,098,316							$	3,235,204	$	3,387,095

(1)LIBOR and Term SOFR rates in effect as of December 31, 2022 are used to calculate interest rates for floating rate debt, as applicable.

(2)Two 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)One additional 12-month period at Company’s option.

(5)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(6)Two additional 364-day periods at Company’s option.

(7)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(8)Three additional 12-month extension periods at Company’s option.

(9)Two additional 12-month extension periods at Company's option. No new advances are permitted during the final 12-month period.

(10)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(11)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(12)Commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(13)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(14)Includes $2.0 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(15)Four additional 12-month periods at Company’s option.

(16)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(17)Anticipated repayment dates.

(18)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(19)Using undepreciated carrying value of commercial real estate to approximate fair value.

(20)Presented net of unamortized debt issuance costs of $5.9 million at December 31, 2022.

(21)Represents the estimated maturity date based on the remaining reinvestment period and underlying loan maturities.

(22)Investment grade commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(23)Includes $6.6 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(24)Presented net of unamortized debt issuance costs of $15.4 million at December 31, 2022.

27

(25)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

Committed Loan and Securities Repurchase Facilities

The Company has entered into five committed master repurchase agreements, as outlined in the September 30, 2023 table above, totaling $1.1 billion of credit capacity in order to finance its lending activities. Assets pledged as collateral under these facilities are limited to whole mortgage loans or participation interests in mortgage loans collateralized by first liens on commercial properties and mezzanine debt. The Company also has a term master repurchase agreement with a major U.S. bank to finance CMBS totaling $100 million. The Company’s repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, maximum leverage ratios, and minimum fixed charge coverage ratios. The Company was in compliance with all covenants as of September 30, 2023 and December 31, 2022.

The Company has the option to extend some of the current facilities subject to a number of conditions, including satisfaction of certain notice requirements, the absence of an event of default, and the absence of a margin deficit, all as defined in the repurchase facility agreements. The lenders have sole discretion with respect to the inclusion of collateral in these facilities and the determination of the market value of the collateral on a daily basis, to be exercised on a good faith basis, and have the right in certain cases to require additional collateral, a full and/or partial repayment of the facilities (margin call), or a reduction in unused availability under the facilities, sufficient to rebalance the facilities if the estimated market value of the included collateral declines.

As of September 30, 2023, the Company had total debt obligations of $616.6 million outstanding pursuant to repurchase agreements with four counterparties. As of September 30, 2023 no counterparties held collateral that exceeded the amounts borrowed under the related repurchase agreements by more than $153.8 million, or 10% of our total equity. As of September 30, 2023, the weighted average haircut, or the percent of collateral value in excess of the loan amount, under our repurchase agreements was 18%. There have been no significant fluctuations in haircuts across asset classes on our repurchase facilities.

On October 3, 2023, the Company executed an amendment to one of its loan repurchase agreements to, among other things, increase the maximum funding capacity from $100.0 million to $200.0 million and extend the maximum term of the facility including extension options to October 3, 2027.

Revolving Credit Facility

The Company’s Revolving Credit Facility provides for an aggregate maximum borrowing amount of $323.9 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. On July 27, 2022, the Company amended its Revolving Credit Facility to increase the maximum borrowing amount to $323.9 million, extend the final maturity date to July 27, 2027, and reduce the interest rate to the sum of one-month Term SOFR plus a fixed margin of 2.50%. The amendment also provides for reductions in the fixed margin upon the achievement of investment grade credit ratings. As of September 30, 2023, the Company had no outstanding borrowings on the Revolving Credit Facility, but still maintains the ability to draw $323.9 million. During the three months ended September 30, 2023, the Company exercised one of the four remaining one-year extension options, which extended the maturity date of the Revolving Credit Facility to July 27, 2024.

The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

The Company is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions. In addition, the Company is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities. The Company’s ability to borrow is dependent on, among other things, compliance with the financial covenants. The Revolving Credit Facility contains customary events of default, including non-payment of principal or interest, fees or other amounts, failure to perform or observe covenants, cross-default to other indebtedness, the rendering of judgments against the Company or certain of our subsidiaries to pay certain amounts of money and certain events of bankruptcy or insolvency.

28

Debt Issuance Costs

As of September 30, 2023 and December 31, 2022, the amounts of unamortized costs relating to our master repurchase facilities and Revolving Credit Facility were $4.0 million and $5.0 million, respectively, and are included in other assets in the consolidated balance sheets.

Uncommitted Securities Repurchase Facilities

The Company has also entered into multiple uncommitted master repurchase agreements collateralized by real estate securities with several counterparties. The borrowings under these agreements have typical advance rates between 75% and 95% of the fair value of collateral, which is primarily AAA-rated securities.

Mortgage Loan Financing

These non-recourse debt agreements provide for secured financing at rates ranging from 4.39% to 9.03%, and, as of September 30, 2023, have anticipated maturity dates between 2024 - 2031, with an average term of 3.12 years. These mortgage loans have carrying amounts of $437.7 million and $498.0 million, net of unamortized premiums of $2.0 million and $2.4 million as of September 30, 2023 and December 31, 2022, respectively, representing proceeds received upon financing greater than the contractual amounts due under these agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $0.5 million and $0.4 million of premium amortization, which decreased interest expense for the nine months ended September 30, 2023 and 2022, respectively. The mortgage loans are collateralized by real estate and related lease intangibles, net, of $478.4 million and $559.9 million as of September 30, 2023 and December 31, 2022, respectively. During each of the nine months ended September 30, 2023 and September 30, 2022, the Company did not execute any new term debt agreements to finance properties in its real estate portfolio.

Collateralized Loan Obligations (“CLO”) Debt

On July 13, 2021, a consolidated subsidiary of the Company completed a privately-marketed CLO transaction, which generated $498.2 million of gross proceeds to Ladder, financing $607.5 million of loans (“Contributed July 2021 CLO Loans”) at an 82% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 18% subordinate and controlling interest in the CLO. The Company retained consent rights over major decisions with respect to the servicing of the Contributed July 2021 CLO Loans, including the right to appoint and replace the special servicer under the CLO. The CLO is a VIE and the Company is the primary beneficiary and, therefore, consolidated the VIE - Refer to Note 9, Consolidated Variable Interest Entities.

On December 2, 2021, a consolidated subsidiary of the Company completed a privately marketed CLO transaction, which generated $566.2 million of gross proceeds to Ladder, financing $729.4 million of loans (“Contributed December 2021 CLO Loans”) at a maximum 77.6% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 15.6% subordinate and controlling interest in the CLO. The Company also held two additional tranches as investments totaling 6.8% interest in the CLO. The Company retained consent rights over major decisions with respect to the servicing of the Contributed December 2021 CLO Loans, including the right to appoint and replace the special servicer under the CLO. The CLO is a VIE and the Company is the primary beneficiary and, therefore, consolidated the VIE - Refer to Note 9, Consolidated Variable Interest Entities.

As of September 30, 2023, the Company had $1.1 billion of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets, which includes unamortized debt issuance costs of $2.8 million.

Borrowings from the Federal Home Loan Bank (“FHLB”)

On July 11, 2012, Tuebor, a consolidated subsidiary of the Company, became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. As of February 19, 2021, pursuant to a final rule adopted by the Federal Housing Finance Agency (the “FHFA”) regarding the eligibility of captive insurance companies, Tuebor’s membership in the FHLB has been terminated, although outstanding advances may remain outstanding until their scheduled maturity dates. Funding for future advance paydowns is expected to be obtained from the natural amortization and/or sales of securities collateral, or from other financing sources. There is no assurance that the FHFA or the FHLB will not take actions that could adversely impact Tuebor’s existing advances. 

29

As of September 30, 2023, Tuebor had $115.0 million of borrowings outstanding, with terms of 0.59 years to 1.00 year (with a weighted average of 0.82 years), and interest rates of 5.69% to 5.81% (with a weighted average of 5.74%). As of September 30, 2023, collateral for the borrowings was comprised of $141.9 million of CMBS and U.S. Agency securities (with advance rates of 71.7% to 95.7%).

Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval. However, there can be no assurance that we would obtain such approval if sought. Largely as a result of this restriction, approximately $838.1 million of Tuebor’s member’s capital was restricted from transfer via dividend to Tuebor’s parent without prior approval of state insurance regulators at September 30, 2023. To facilitate intercompany cash funding of operations and investments, Tuebor and its parent maintain regulator-approved intercompany borrowing/lending agreements.

Senior Unsecured Notes

As of September 30, 2023, the Company had $1.6 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $327.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”) and $636.9 million in aggregate principal of 4.75% senior notes due 2029 (the “2029 Notes,” collectively with the 2025 Notes and the 2027 Notes, the “Notes”).

During the three months ended September 30, 2023, the Company repurchased $0.5 million of the 2027 Notes and recognized a net gain of $0.1 million on extinguishment of debt, and repurchased $4.8 million of the 2029 Notes and recognized a net gain of $0.9 million on extinguishment of debt.

During the nine months ended September 30, 2023, the Company repurchased $16.2 million of the 2025 Notes and recognized a net gain of $1.3 million on extinguishment of debt, repurchased $38.9 million of the 2027 Notes and recognized a net gain of $6.8 million on extinguishment of debt, and repurchased $12.1 million of the 2029 Notes and recognized a net gain of $2.5 million on extinguishment of debt.

LCFH issued the Notes with Ladder Capital Finance Corporation (“LCFC”), as co-issuers on a joint and several basis. LCFC is a 100% owned finance subsidiary of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes. The Company and certain subsidiaries of LCFH currently guarantee the obligations under the Notes and the indenture. The Company was in compliance with all covenants of the Notes as of September 30, 2023 and 2022.

The Notes require interest payments semi-annually in cash in arrears, are unsecured, and are subject to an unencumbered assets to unsecured debt covenant. The Company may redeem the Notes prior to their stated maturity, in whole or in part, at any time or from time to time, with required notice and at a redemption price as specified in each respective indenture governing the Notes, plus accrued and unpaid interest, if any, to the redemption date. The board of directors has authorized the Company to repurchase any or all of the Notes from time to time without further approval.

30

Combined Maturity of Debt Obligations

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands): 

Period ending December 31,	Borrowings by Maturity(1)
2023 (last three months)	$	1,710
2024	417,827
2025	631,948
2026	89,161
2027	898,242
Thereafter	706,791
Subtotal	2,745,679
Debt issuance costs included in senior unsecured notes	(12,543)
Debt issuance costs included in mortgage loan financings	(1,677)
Premiums included in mortgage loan financings(2)	1,968
Total (3)	$	2,733,427

(1)The allocation of repayments under our committed loan repurchase facilities is based on the earlier of: (i) the maturity date of each agreement; or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

(2)Represents deferred gains on intercompany mortgage loans, secured by our own real estate, sold into securitizations. These premiums are amortized as a reduction to interest expense.

(3)Total does not include $1.1 billion of consolidated CLO debt obligations and the related debt issuance costs of $2.8 million, as the satisfaction of these liabilities will be paid through cash flow from loan collateral including amortization and will not require cash outlays from us.

Financial Covenants

The Company’s debt facilities are subject to covenants that require the Company to maintain a minimum level of total equity. Largely as a result of this restriction, approximately $871.4 million of the total equity is restricted from payment as a dividend by the Company at September 30, 2023.

The Company was in compliance with all covenants as of September 30, 2023.

LIBOR Transition

We have implemented fallback language for our LIBOR-based mortgage loans, bi-lateral committed repurchase facilities and revolving credit facility, including adjustments as applicable to maintain the anticipated economic terms of the existing contracts. As of September 30, 2023, all of our floating rate debt obligations bear interest indexed to Term SOFR.

31

7. DERIVATIVE INSTRUMENTS

The Company primarily uses derivative instruments to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

				Fair Value				Remaining Maturity (years)
Contract Type	Notional			Asset(1)		Liability(1)
Caps
1 Month Term SOFR	$	90,000		$	1,520	$	—	0.88
Futures
5-year Treasury-Note Futures	20,500			32		—		0.25
10-year Treasury-Note Futures	51,400			81		—		0.25
Total futures	71,900			113		—
Options
Options	N/A		(2)	184		—		0.24
Total derivatives	$	161,900		$	1,817	$	—

(1)Shown as derivative instruments in the accompanying consolidated balance sheets.

(2)The Company held 556 options contracts as of September 30, 2023.

December 31, 2022

				Fair Value				Remaining Maturity (years)
Contract Type	Notional			Asset(1)		Liability(1)
Caps
1 Month Term SOFR	$	90,000		$	1,804	$	—	1.68
Futures
5-year Treasury-Note Futures	44,200			51		—		0.25
10-year Treasury-Note Futures	61,400			71		—		0.25
Total futures	105,600			122		—
Options
Options	N/A		(2)	112		—		0.20
Total derivatives	$	195,600		$	2,038	$	—

(1)Shown as derivative instruments in the accompanying consolidated balance sheets.

(2)The Company held 91 options contracts as of December 31, 2022.

The following table summarizes the net realized gains (losses) and unrealized gains (losses) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):

	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
Contract Type	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Caps	$	(294)	$	378	$	84	$	(284)	$	962	$	678
Futures	99		4,579		4,678		(8)		6,162		6,154
Options	11		—		11		117		(269)		(152)
Total	$	(184)	$	4,957	$	4,773	$	(175)	$	6,855	$	6,680

32

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
Contract Type	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Caps	$	747	$	—	$	747	$	736	$	648	$	1,384
Futures	539		5,120		5,659		(83)		10,919		10,836
Options	161		—		161		161		—		161
Total	$	1,447	$	5,120	$	6,567	$	814	$	11,567	$	12,381

Futures

Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an International Swaps and Derivatives Association (“ISDA”) agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for our interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures. The Company’s counterparties held $1.7 million and $2.5 million of cash margin as collateral for derivatives as of September 30, 2023 and December 31, 2022, respectively, which is included in restricted cash in the consolidated balance sheets.

33

8. OFFSETTING ASSETS AND LIABILITIES

The following tables present both gross information and net information about derivatives and other instruments eligible for offset in the statement of financial position as of September 30, 2023 and December 31, 2022. The Company’s accounting policy is to record derivative asset and liability positions on a gross basis; therefore, the following tables present the gross derivative asset and liability positions recorded on the balance sheets, while also disclosing the eligible amounts of financial instruments and cash collateral to the extent those amounts could offset the gross amount of derivative asset and liability positions. The actual amounts of collateral posted by or received from counterparties may be in excess of the amounts disclosed in the following tables as the following only disclose amounts eligible to be offset to the extent of the recorded gross derivative positions.

The following table represents offsetting of financial assets and derivative assets as of September 30, 2023 ($ in thousands): 

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	1,817	$	—	$	1,817	$	—	$	(1,711)	$	106
Total	$	1,817	$	—	$	1,817	$	—	$	(1,711)	$	106

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial liabilities and derivative liabilities as of September 30, 2023 ($ in thousands): 

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	616,618	$	—	$	616,618	$	616,618	$	—	$	616,618
Total	$	616,618	$	—	$	616,618	$	616,618	$	—	$	616,618

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial assets and derivative assets as of December 31, 2022 ($ in thousands):

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	2,038	$	—	$	2,038	$	—	$	(2,505)	$	(467)
Total	$	2,038	$	—	$	2,038	$	—	$	(2,505)	$	(467)

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial liabilities and derivative liabilities as of December 31, 2022 ($ in thousands):

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	847,863	$	—	$	847,863	$	847,863	$	19,128	$	828,735
Total	$	847,863	$	—	$	847,863	$	847,863	$	19,128	$	828,735

(1)Included in restricted cash on consolidated balance sheets.

Master netting agreements that the Company has entered into with its derivative and repurchase agreement counterparties allow for netting of the same transaction, in the same currency, on the same date. Assets, liabilities, and collateral subject to master netting agreements as of September 30, 2023 and December 31, 2022 are disclosed in the tables above. The Company does not present its derivative and repurchase agreements net on the consolidated financial statements as it has elected gross presentation. 

34

9. CONSOLIDATED VARIABLE INTEREST ENTITIES

The Company consolidates on its balance sheet two CLOs that are considered VIEs as of September 30, 2023 and December 31, 2022 ($ in thousands):

	September 30, 2023		December 31, 2022
Restricted cash	$	36,844	$	4,902
Mortgage loan receivables held for investment, net, at amortized cost	1,272,832		1,308,654
Accrued interest receivable	8,743		8,313
Other assets	23,089		17,505
Total assets	$	1,341,508	$	1,339,374
Debt obligations, net	$	1,060,417	$	1,058,462
Accrued expenses	3,385		3,029
Other liabilities	—		65
Total liabilities	1,063,802		1,061,556
Net equity in VIEs (eliminated in consolidation)	277,706		277,818
Total equity	277,706		277,818
Total liabilities and equity	$	1,341,508	$	1,339,374

Refer to Note 6, Debt Obligations, Net - Collateralized Loan Obligations (“CLO”) Debt for further details.

35

10. EQUITY STRUCTURE AND ACCOUNTS

Stock Repurchases

On July 27, 2022, the board of directors authorized the repurchase of $50.0 million of the Company’s Class A common stock from time to time without further approval. This authorization increased the remaining outstanding authorization per the August 4, 2021 authorization from $39.5 million to $50.0 million. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. As of September 30, 2023, the Company has a remaining amount available for repurchase of $44.3 million, which represents 3.4% in the aggregate of its outstanding Class A common stock, based on the closing price of $10.26 per share on such date.

The following tables summarize the Company’s repurchase activity of its Class A common stock during the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2022		$	46,737
Repurchases paid:
March 1, 2023 - March 31, 2023	250,000	(2,285)
September 1 - September 30, 2023	19,000	(196)
Authorizations remaining as of September 30, 2023		$	44,256

(1)Amount excludes commissions paid associated with share repurchases.

	Shares	Amount(1)
Authorizations remaining as of December 31, 2021		$	44,122
Additional authorizations(2)		10,534
Repurchases paid	721,299	(7,279)
Authorizations remaining as of September 30, 2022		$	47,377

(1)Amount excludes commissions paid associated with share repurchases.

(2)On July 27, 2022 the Board authorized repurchases up to $50.0 million in aggregate.

Dividends

The following table presents dividends declared (on a per share basis) of Class A common stock for the nine months ended September 30, 2023 and 2022:

Declaration Date	Dividend per Share
March 15, 2023	$	0.23
June 15, 2023	0.23
September 15, 2023	0.23
Total	$	0.69
March 15, 2022	$	0.20
June 15, 2022	0.22
September 15, 2022	0.23
Total	$	0.65

36

Changes in Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Accumulated Other Comprehensive Income (Loss)
December 31, 2022	$	(21,009)
Other comprehensive income (loss)	6,130
September 30, 2023	$	(14,879)

	Accumulated Other Comprehensive Income (Loss)
December 31, 2021	$	(4,112)
Other comprehensive income (loss)	(14,699)
September 30, 2022	$	(18,811)

11. NONCONTROLLING INTERESTS

Noncontrolling Interests in Consolidated Ventures

As of September 30, 2023, the Company consolidates two ventures and in each, there are different noncontrolling investors, which own between 10.0% - 25.0% of such ventures. These ventures hold investments in a 40-building student housing portfolio in Isla Vista, CA with a book value of $79.0 million, and a single-tenant office building in Oakland County, MI with a book value of $8.7 million. The Company makes distributions and allocates income from these ventures to the noncontrolling interests in accordance with the terms of the respective governing agreements.

Sales

During the three months ended September 30, 2023 and September 30, 2022, there were no sales of assets with noncontrolling interests. During the nine months ended September 30, 2022, the Company sold its apartment complex in Stillwater, OK, and its apartment complex in Miami, FL. Refer to Note 5, Real Estate and Related Lease Intangibles, Net for further details.

37

12. EARNINGS PER SHARE

The Company’s net income (loss) and weighted average shares outstanding for the three and nine months ended September 30, 2023 and 2022 consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands except share amounts)	2023		2022		2023		2022
Basic and Diluted Net income (loss) available for Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Weighted average shares outstanding:
Basic	124,730,343		124,278,732		124,652,426		124,393,861
Diluted	124,968,545		125,172,180		124,817,335		125,813,280

The calculation of basic and diluted net income (loss) per share amounts for the three and nine months ended September 30, 2023 and 2022 consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except share and per share amounts) (1)	2023		2022		2023		2022
Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Denominator:
Weighted average number of shares of Class A common stock outstanding	124,730,343		124,278,732		124,652,426		124,393,861
Basic net income (loss) per share of Class A common stock	$	0.25	$	0.23	$	0.66	$	0.66
Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Diluted net income (loss) attributable to Class A common shareholders	31,319		28,583		81,889		82,663
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	124,730,343		124,278,732		124,652,426		124,393,861
Add - dilutive effect of:
Incremental shares of unvested Class A restricted stock(1)	238,202		893,448		164,909		1,419,419
Diluted weighted average number of shares of Class A common stock outstanding (2)	124,968,545		125,172,180		124,817,335		125,813,280
Diluted net income (loss) per share of Class A common stock	$	0.25	$	0.23	$	0.66	$	0.66

(1)The Company applies the treasury stock method.

(2)There were 299,641 and 440,573 anti-dilutive shares for the three and nine months ended September 30, 2023.

38

13. STOCK-BASED AND OTHER COMPENSATION PLANS

Summary of Stock and Shares Unvested/Outstanding

The following table summarizes the impact on the consolidated statements of income of the various stock-based compensation plans and other compensation plans ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock-based compensation expense	$	3,205	$	3,738	$	15,375	$	27,787
Total Stock-Based Compensation Expense	$	3,205	$	3,738	$	15,375	$	27,787

A summary of the grants is presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share
Grants - Class A Common Stock	—	$	—	7,179	$	9.75	1,417,561	$	11.58	2,884,303	$	11.87

The table below presents the number of unvested shares of Class A common stock and outstanding stock options at September 30, 2023 and changes during 2023 of the Class A common stock and stock options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

	Restricted Stock	Weighted Average Grant Date Fair Value		Stock Options
Nonvested/Outstanding at December 31, 2022	2,529,571	$	12.62	623,788
Granted	1,417,561	11.58		—
Vested	(1,699,744)	12.14		—
Forfeited	(49,425)	10.43		—
Nonvested/Outstanding at September 30, 2023	2,197,963	$	12.37	623,788
Exercisable at September 30, 2023 (1)				623,788

(1)The weighted average exercise price of outstanding options is $14.84 at September 30, 2023.

At September 30, 2023, there was $12.7 million of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 29.0 months, with a weighted average remaining vesting period of 21.7 months.

2014 Omnibus Incentive Plan

In connection with the IPO Transactions, the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) was adopted by the board of directors on February 11, 2014, and provided certain members of management, employees and directors of the Company or its affiliates with additional incentives including grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards.

2023 Omnibus Incentive Plan

At the Company’s Annual Meeting held on June 6, 2023, the stockholders of the Company approved the Ladder Capital Corp 2023 Omnibus Incentive Plan (the “2023 Omnibus Incentive Plan”), effective as of the date of the Annual Meeting (the “Effective Date”). The 2023 Omnibus Incentive Plan superseded and replaced the 2014 Omnibus Incentive Plan in its entirety as of the Effective Date.

The aggregate number of shares of the Company’s Class A common stock that will be available for issuance to employees, non-employee directors and consultants of the Company and its affiliates under the 2023 Omnibus Incentive Plan will not exceed

39

3,000,000 shares of Class A common stock, plus an additional amount, not to exceed 10,253,867 shares of Class A common stock, remaining available for new awards under the 2014 Omnibus Incentive Plan as of the Effective Date, subject to the terms and conditions set forth in the 2023 Omnibus Incentive Plan.

The material terms of the 2023 Omnibus Incentive Plan are summarized in the Company’s definitive proxy statement on Schedule 14A, filed with the SEC on April 21, 2023 (the “Proxy Statement”), under the heading “Proposal 3—Approval of the Ladder Capital Corp 2023 Omnibus Incentive Plan.” The summary of the 2023 Omnibus Incentive Plan in the Proxy Statement is qualified in its entirety by reference to the full text of the 2023 Omnibus Incentive Plan, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 7, 2023.

Annual Incentive Awards Granted in 2023 with respect to 2022 Performance

For 2022 performance, certain employees received stock-based incentive equity in February 2023. Restricted stock subject to time-based vesting criteria will vest in three installments on February 18 of each of 2024, 2025 and 2026, subject to continued employment on the applicable vesting dates. The Company has elected to recognize the compensation expense related to the time-based vesting of the annual restricted stock awards for the entire award on a straight-line basis over the requisite service period for the entire award. Restricted stock subject to performance criteria is eligible to vest in three equal installments upon the compensation committee’s confirmation that the Company achieves a pre-tax return on average equity, based on distributable earnings divided by the Company’s average shareholders’ equity, equal to or greater than 8% for such year (the “Performance Target”) for the years ended December 31, 2023, 2024 and 2025, respectively. If the Company misses the Performance Target during either the first or second calendar year but meets the Performance Target for a subsequent year during the three-year performance period and the Company’s return on equity for such subsequent year and any years for which it missed its Performance Target equals or exceeds the compounded pre-tax return on average equity of 8% based on distributable earnings divided by the Company’s average shareholders’ equity, the performance-vesting restricted stock which failed to vest because the Company previously missed its Performance Target will vest subject to continued employment on the applicable vesting date (the “Catch-Up Provision”). Approximately 2/3 of all the shares subject to attainment of the Performance Target are also subject to the Catch-Up Provision, as the Catch-Up Provision is not available for the missed performance during the third performance year and has the effect of requiring the Company to achieve an average 8% return over the full three-year performance plan in order to be effective. Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved. The probability of meeting the performance outcome is assessed quarterly.

On February 18, 2023, in connection with 2022 performance, annual stock awards were granted to management employees (each, a “Management Grantee”), with an aggregate grant date fair value of $8.5 million, which represents 733,607 shares of Class A common stock. The grant to Mr. Harris and approximately half of the grants to each of Ms. McCormack and Mr. Perelman were unrestricted. The other half of incentive equity granted to each of Ms. McCormack and Mr. Perelman is restricted stock subject to attainment of the Performance Target for the applicable years and is also subject to the Catch-Up Provision described above. For the grants to Mr. Miceli and Ms. Porcella (a total of 101,344 shares with an aggregate fair value of $1.2 million), approximately half of the awards are subject to time-based vesting criteria and the remaining half are subject to attainment of the Performance Target for the applicable years.

On February 18, 2023, in connection with 2022 performance, annual stock awards were granted to certain non-management employees (“Non-Management Grantees”) with an aggregate grant date fair value of $7.5 million, which represents 651,429 shares of Class A common stock. Of these awards, 19,558 shares were unrestricted, 306,162 shares are subject to time-based vesting criteria and the remaining 325,709 shares are subject to the attainment of the Performance Target, including the Catch-Up Provision, for the applicable years.

Other 2023 Restricted Stock Awards

On February 18, 2023, certain members of the board of directors received annual restricted stock awards with a grant date fair value of $0.4 million, representing 32,525 shares of restricted Class A common stock, which will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense related to the time-based vesting criteria of the award shall be recognized on a straight-line basis over the one-year vesting period.

40

Annual Incentive Awards Granted in 2022 with respect to 2021 Performance

For 2021 performance, certain employees received stock-based incentive equity in January 2022. Restricted stock subject to time-based vesting criteria will vest in three installments on February 18 of each of 2023, 2024 and 2025, subject to continued employment on the applicable vesting dates. The Company has elected to recognize the compensation expense related to the time-based vesting of the annual restricted stock awards for the entire award on a straight-line basis over the requisite service period for the entire award. Restricted stock subject to performance criteria is eligible to vest in three equal installments upon the compensation committee’s confirmation that the Company achieves the Performance Target for the years ended December 31, 2022, 2023 and 2024, respectively. Approximately 2/3 of all the shares subject to attainment of the Performance Target are also subject to the Catch-Up Provision. Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved. The probability of meeting the performance outcome is assessed quarterly.

On January 31, 2022, in connection with 2021 performance, annual stock awards were granted to management employees (each, a “Management Grantee”), with an aggregate grant date fair value of $18 million, which represents 1,517,627 shares of Class A common stock. The grant to Mr. Harris and approximately 2/3 of the grants to each of Ms. McCormack and Mr. Perelman were unrestricted. The other 1/3 of incentive equity granted to each of Ms. McCormack and Mr. Perelman is restricted stock subject to attainment of the Performance Target for the applicable years and is also subject to the Catch-Up Provision described above. For the grants to Mr. Miceli and Ms. Porcella (a total of 210,662 shares with an aggregate fair value of $2.5 million), approximately 1/3 of the awards were unrestricted, with another 1/3 of the awards subject to time-based vesting criteria, and the remaining 1/3 subject to attainment of the Performance Target for the applicable years.

On January 31, 2022, in connection with 2021 performance, annual stock awards were granted to certain non-management employees (“Non-Management Grantees”) with an aggregate grant date fair value of $15.4 million, which represents 1,293,853 shares of Class A common stock. Of these awards, 264,704 shares were unrestricted, 497,169 shares are subject to time-based vesting criteria, and the remaining 531,980 shares are subject to attainment of the Performance Target, including the Catch-Up Provision, for the applicable years.

Other Incentive Awards Granted in 2022

On May 10, 2022, a new employee of the Company received a restricted stock award with a grant date fair value of $0.4 million, representing 33,784 shares of restricted Class A common stock. Fifty percent of the restricted stock award is subject to time-based vesting criteria, and the remaining 50% of the restricted stock award is subject to attainment of the Performance Target for the applicable years. The time-vesting restricted stock will vest in three installments on February 18 of each of 2023, 2024 and 2025, subject to continued employment on the applicable vesting dates. The performance-vesting restricted stock will vest in three equal installments upon the Compensation Committee’s confirmation that the Company achieves the Performance Target for the years ended December 31, 2022, 2023 and 2024, respectively. The Catch-Up Provision applies to the performance vesting portion of this award, provided that a termination has not occurred. The Company has elected to recognize the compensation expense related to the time-based vesting criteria of these Restricted Stock Awards on a straight-line basis over the requisite service period.

Other 2022 Restricted Stock Awards

On February 18, 2022, certain members of the board of directors received annual restricted stock awards with a grant date fair value of $0.4 million, representing 31,860 shares of restricted Class A common stock, which will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense related to the time-based vesting criteria of the award shall be recognized on a straight-line basis over the one-year vesting period.

Change in Control

Upon a change in control (as defined in the respective award agreements), restricted stock awards to Mr. Miceli, Ms. McCormack, Mr. Perelman, and one Non-Management Grantee will become fully vested if: (1) such Grantee continues to be employed through the closing of the change in control; or (2) after the signing of definitive documentation related to the change in control, but prior to its closing, such Grantee’s employment is terminated without cause or due to death or disability or the Grantee resigns for Good Reason, as defined in each Grantee’s employment agreement. The compensation committee retains the right, in its sole discretion, to provide for the accelerated vesting (in whole or in part) of the restricted stock awards granted.

In the event Ms. Porcella or a Non-Management Grantee, except for the one mentioned above, is terminated by the Company without cause within six months of certain changes in control, all unvested time shares shall vest on the termination date and all unvested performance shares shall remain outstanding and be eligible to vest (or be forfeited) in accordance with the performance conditions.

41

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is based upon internal models, using market quotations, broker quotations, counterparty quotations or pricing services quotations, which provide valuation estimates based upon reasonable market order indications and are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity. The fair value of the mortgage loan receivables held for sale is based upon a securitization model utilizing market data from recent securitization spreads and pricing.

Fair Value Summary Table

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at September 30, 2023 and December 31, 2022 are as follows ($ in thousands):

September 30, 2023

									Weighted Average
	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	484,501		$	483,880	$	468,851	Internal model, third-party inputs	6.79	%	2.08
CMBS interest-only(1)	888,870		(2)	7,487		7,518		Internal model, third-party inputs	6.44	%	1.13
GNMA interest-only(3)	43,946		(2)	230		204		Internal model, third-party inputs	5.59	%	3.05
Agency securities(1)	25			25		24		Internal model, third-party inputs	2.70	%	1.18
Equity securities(3)	N/A			160		121		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost(4)	3,380,845			3,371,773		3,365,688		Discounted Cash Flow(5)	9.77	%	0.79
Mortgage loan receivables held for sale	31,350			26,272		26,272		Internal model, third-party inputs(6)	4.57	%	8.44
FHLB stock(7)	5,175			5,175		5,175		(7)	7.50	%	N/A
Nonhedge derivatives(1)(10)	161,900			1,817		1,817		Counterparty quotations	N/A		1.10
Liabilities:
Repurchase agreements - short-term	360,447			360,447		360,447		Cost plus Accrued Interest (8)	6.61	%	0.14
Repurchase agreements - long-term	256,170			256,170		256,170		Discounted Cash Flow(9)	6.20	%	1.99
Mortgage loan financing	437,448			437,739		417,967		Discounted Cash Flow	5.87	%	2.90
CLO debt	1,063,249			1,060,417		1,060,417		Discounted Cash Flow(9)	7.55	%	2.14
Borrowings from the FHLB	115,000			115,000		115,000		Discounted Cash Flow	2.88	%	0.82
Senior unsecured notes	1,576,614			1,564,071		1,367,484		Internal model, third-party inputs	4.66	%	4.02

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $39.6 million at September 30, 2023.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)For repurchase agreements - short term, the value approximates the cost plus accrued interest.

(9)For repurchase agreements - long term and CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

42

December 31, 2022

									Weighted Average
	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	562,839		$	562,246	$	541,333	Internal model, third-party inputs	5.32	%	1.06
CMBS interest-only(1)	1,026,195		(2)	10,498		10,443		Internal model, third-party inputs	3.65	%	1.45
GNMA interest-only(3)	45,369		(2)	285		281		Internal model, third-party inputs	4.23	%	3.30
Agency securities(1)	36			36		35		Internal model, third-party inputs	2.70	%	1.54
U.S. Treasury securities(1)	36,000			35,328		35,328		Internal model, third-party inputs	4.17	%	0.60
Equity securities(3)	N/A			160		118		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost(4)	3,907,295			3,885,746		3,875,708		Discounted Cash Flow(5)	8.85	%	1.26
Mortgage loan receivables held for sale	31,350			27,391		27,391		Internal model, third-party inputs(6)	4.57	%	9.19
FHLB stock(7)	9,585			9,585		9,585		(7)	4.75	%	N/A
Nonhedge derivatives(1)(10)	204,700			2,038		2,038		Counterparty quotations	N/A		1.52
Liabilities:
Repurchase agreements - short-term	481,465			481,465		481,465		Cost plus Accrued Interest (8)	4.04	%	0.37
Repurchase agreements - long-term	366,398			366,398		366,398		Discounted Cash Flow(9)	4.06	%	2.56
Mortgage loan financing	497,454			497,991		477,101		Discounted Cash Flow	5.51	%	3.36
CLO debt	1,064,365			1,058,462		1,058,462		Discounted Cash Flow(9)	6.35	%	15.92
Borrowings from the FHLB	213,000			213,000		213,055		Discounted Cash Flow	1.61	%	1.25
Senior unsecured notes	1,643,794			1,628,382		1,397,977		Internal model, third-party inputs	4.66	%	4.75

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $20.8 million at December 31, 2022.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)Fair value for repurchase agreement liabilities - short term borrowings under the Secured Financing Facility and borrowings under the Revolving Credit Facility is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term and CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(11)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

43

The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	475,186		$	—	$	—	$	459,877	$	459,877
CMBS interest-only(1)	880,509		(2)	—		—		7,182		7,182
GNMA interest-only(3)	43,946		(2)	—		—		204		204
Agency securities(1)	25			—		—		24		24
Equity securities	N/A			121		—		—		121
Nonhedge derivatives(4)	161,900			—		1,817		—		1,817
				$	121	$	1,817	$	467,287	$	469,225
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost(5)	$	3,380,845		$	—	$	—	$	3,365,688	$	3,365,688
Mortgage loan receivable held for sale(6)	31,350			—		—		26,272		26,272
CMBS(7)	9,316			—		—		8,974		8,974
CMBS interest-only(7)	8,361			—		—		336		336
FHLB stock	5,175			—		—		5,175		5,175
				$	—	$	—	$	3,406,445	$	3,406,445
Liabilities:
Repurchase agreements - short-term	$	360,447		$	—	$	—	$	360,447	$	360,447
Repurchase agreements - long-term	256,170			—		—		256,170		256,170
Mortgage loan financing	437,448			—		—		417,967		417,967
CLO debt	1,063,249			—		—		1,060,417		1,060,417
Borrowings from the FHLB	115,000			—		—		115,000		115,000
Senior unsecured notes	1,576,614			—		—		1,367,484		1,367,484
				$	—	$	—	$	3,577,485	$	3,577,485

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $39.6 million at September 30, 2023.

(6)A lower of cost or market adjustment was recorded as of September 30, 2023.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.

44

December 31, 2022

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	553,424		$	—	$	—	$	532,304	$	532,304
CMBS interest-only(1)	1,017,735		(2)	—		—		10,026		10,026
GNMA interest-only(3)	45,369		(2)	—		—		281		281
Agency securities(1)	36			—		—		35		35
Equity securities	N/A			118		—		—		118
U.S. Treasury securities	36,000			35,328		—		—		35,328
Nonhedge derivatives(4)	204,700			—		2,038		—		2,038
				$	35,446	$	2,038	$	542,646	$	580,130
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost(5)	$	3,907,295		$	—	$	—	$	3,875,708	$	3,875,708
Mortgage loan receivable held for sale(6)	31,350			—		—		27,391		27,391
CMBS(7)	9,415			—		—		9,030		9,030
CMBS interest-only(7)	8,460			—		—		417		417
FHLB stock	9,585			—		—		9,585		9,585
				$	—	$	—	$	3,922,131	$	3,922,131
Liabilities:
Repurchase agreements - short-term	$	481,465		$	—	$	—	$	481,465	$	481,465
Repurchase agreements - long-term	366,398			—		—		366,398		366,398
Mortgage loan financing	497,454			—		—		477,101		477,101
CLO debt	1,064,365			—		—		1,058,462		1,058,462
Borrowings from the FHLB	213,000			—		—		213,055		213,055
Senior unsecured notes	1,643,794			—		—		1,397,977		1,397,977
				$	—	$	—	$	3,994,458	$	3,994,458

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $20.8 million at December 31, 2022.

(6)A lower of cost or market adjustment was recorded as of December 31, 2022.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.  

45

The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Nine Months Ended September 30,
Level 3	2023		2022
Balance at January 1,	$	542,646	$	692,864
Transfer from level 2	—		—
Purchases	73,591		55,716
Sales	(14,930)		(4,261)
Paydowns/maturities	(136,892)		(135,988)
Amortization of premium/discount	(2,796)		(3,503)
Unrealized gain/(loss)	5,949		(14,719)
Realized gain/(loss) on sale	(281)		(106)
Balance at September 30,	$	467,287	$	590,003

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

September 30, 2023

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	459,877		Discounted cash flow	Yield (4)	2.86	%	6.76	%	17.54	%
CMBS interest-only(1)	7,182		(2)	Discounted cash flow	Yield (4)	2.73	%	6.57	%	21.81	%
GNMA interest-only(3)	204		(2)	Discounted cash flow	Yield (4)	1.28	%	9.46	%	10.00	%
Agency securities(1)	24			Discounted cash flow	Yield (4)	2.70	%	2.70	%	2.70	%
Total	$	467,287

December 31, 2022

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	532,304		Discounted cash flow	Yield (4)	2.89	%	5.29	%	17.47	%
CMBS interest-only(1)	10,026		(2)	Discounted cash flow	Yield (4)	1.39	%	3.72	%	19.66	%
GNMA interest-only(3)	281		(2)	Discounted cash flow	Yield (4)	1.28	%	5.50	%	10.00	%
Agency securities(1)	35			Discounted cash flow	Yield (4)	2.70	%	2.70	%	2.70	%
Total	$	542,646

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities, U.S. Treasury securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)GNMA interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may be impaired. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-down of assets value due to impairment. Refer to Note 3, Mortgage Loan Receivables and Note 5, Real Estate and Related Lease Intangibles, Net for disclosure of level 3 inputs.

46

15. INCOME TAXES

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2015 (the REIT Election”). As such, the Company’s income is generally not subject to U.S. federal, state and local corporate income taxes other than as described below.

Certain of the Company’s subsidiaries have elected to be treated as TRSs. TRSs permit the Company to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, the Company will continue to maintain its qualification as a REIT. The Company’s TRSs are not consolidated for U.S. federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in TRSs. Current income tax expense (benefit) was $1.2 million and $2.0 million for the three and nine months ended September 30, 2023 and $4.2 million and $3.8 million for the three and nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, the Company’s net deferred tax assets (liabilities) were $(4.7) million and $(1.8) million, respectively, and are included in other assets (other liabilities) in the Company’s consolidated balance sheets. Deferred income tax expense (benefit) included within the provision for income taxes was $2.0 million and $(1.6) million for the three months ended September 30, 2023 and September 30, 2022, respectively. Deferred income tax expense (benefit) included within the provision for income taxes was $2.9 million and $0.1 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The Company’s net deferred tax liability is comprised of deferred tax assets and deferred tax liabilities. The Company believes it is more likely than not that the deferred tax assets (aside from the exception noted below) will be realized in the future. Realization of the deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of September 30, 2023, the Company had a deferred tax asset of $2.8 million relating to capital losses which it may only use to offset capital gains. These tax attributes will begin to expire if unused by December 31, 2024. As the realization of these assets are not more likely than not to be realized before their expiration, the Company provided a full valuation allowance against this deferred tax asset. Additionally, as of September 30, 2023, the Company had $1.5 million of deferred tax asset related to Code Section 163(j) interest expense limitation. As the Company is uncertain if this asset will be realized in the future, the Company provided a full valuation allowance against this deferred tax asset.

The Company’s tax returns are subject to audit by taxing authorities. Generally, as of September 30, 2023, the tax years 2019-2022 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. One of the Company’s subsidiary entities is currently under an IRS audit for tax year 2020 and also under audit in New York City for tax years 2014-2020. The Company does not expect these audits to result in any material changes to the Company’s financial position or performance. In April 2023, a settlement was reached for $2.6 million with New York City pertaining to an audit of the Company for the years 2012-2013 resulting in an incremental income tax expense of $0.2 million for the nine months ended September 30, 2023. The Company does not expect tax expense to have an impact on either short, or long-term liquidity or capital needs.

As of September 30, 2023, the Company did not have any unrecognized tax benefit. As of December 31, 2022, the Company’s unrecognized tax benefit was a liability of $2.4 million, and was included in the accrued expenses in the Company’s consolidated balance sheets. This unrecognized tax benefit, if recognized, would have a favorable impact on the Company’s effective income tax rate in future periods. As of September 30, 2023, the Company has not recognized a significant amount of any interest or penalties related to uncertain tax positions. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

Under U.S. GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

47

16. RELATED PARTY TRANSACTIONS

The Company has no material related party relationships to disclose.

17. COMMITMENTS AND CONTINGENCIES

Leases

As of September 30, 2023, the Company had a $(16.6) million lease liability and a $15.0 million right-of-use asset on its consolidated balance sheets recorded within other liabilities and other assets, respectively. The right-of-use lease asset relates to the Company's operating lease of office space. Right-of use lease assets initially equal the lease liability. The Company recognized $0.5 million and $1.6 million for the three and nine months ended September 30, 2023 and $0.3 million and $0.8 million for the three and nine months ended September 30, 2022 in operating expenses in its consolidated statements of income relating to operating leases.

Future minimum lease payments under non-cancelable operating leases as of September 30, 2023 are as follows ($ in thousands):

2023 (last three months)	$	473
2024	2,171
2025	2,207
2026	2,219
2027	2,232
Thereafter	13,344
Total undiscounted cash flows	22,646
Present value discount (1)	(6,026)
Lease liabilities	$	16,620

(1)Lease liabilities were discounted at the Company's weighted average incremental borrowing rate for similar collateral, which is estimated to be 6.62%, and the remaining lease term is 9.8 years.

Unfunded Loan Commitments

As of September 30, 2023, the Company’s off-balance sheet arrangements consisted of $257.5 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing over the next three years at rates to be determined at the time of funding, 58% of which additional funds relate to the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income. As of December 31, 2022, the Company’s off-balance sheet arrangements consisted of $321.8 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing.

Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. The Company carefully monitors the progress of work at properties that serve as collateral underlying its commercial mortgage loans, including the progress of capital expenditures, construction, leasing and business plans in light of current market conditions. These commitments are not reflected on the consolidated balance sheets. 

Unsettled Trades

As of September 30, 2023, the Company had $9.9 million of U.S. Treasury securities traded and not yet settled on its consolidated balance sheets. The U.S. Treasury securities are recorded within other assets, and the related payable is recorded within other liabilities. These balances relate to the Company’s purchase of U.S. Treasury securities with maturities of less than three months, which will be recorded within cash and cash equivalents upon settlement.

48

18. SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how the chief operating decision makers review and manage the business. These reportable segments include loans, securities, and real estate. The loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans).  The securities segment is composed of all of the Company’s activities related to securities, which include investments in CMBS, U.S. Agency securities, corporate bonds, equity securities and U.S. Treasury securities. The real estate segment includes net leased properties, office buildings, student housing portfolios, hotels, industrial buildings, a shopping center and condominium units. Corporate/other includes certain of the Company’s investments in ventures, other asset management activities and operating expenses.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

Three months ended September 30, 2023	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	82,814	$	7,810	$	1	$	10,465	$	101,090
Interest expense	(32,601)		(52)		(7,677)		(21,929)		(62,259)
Net interest income (expense)	50,213		7,758		(7,676)		(11,464)		38,831
(Provision for) release of loan loss reserves	(7,473)		—		—		—		(7,473)
Net interest income (expense) after provision for (release of) loan reserves	42,740		7,758		(7,676)		(11,464)		31,358
Real estate operating income	—		—		24,761		—		24,761
Net result from mortgage loan receivables held for sale	(629)		—		—		—		(629)
Realized gain (loss) on securities	—		23		—		—		23
Unrealized gain (loss) on securities	—		(42)		—		—		(42)
Realized gain on sale of real estate, net	—		—		8,808		—		8,808
Fee and other income	1,518		4		134		173		1,829
Net result from derivative transactions	4,449		241		83		—		4,773
Earnings (loss) from investment in unconsolidated ventures	—		—		479		—		479
Gain (loss) on extinguishment of debt	—		—		—		921		921
Total other income (loss)	5,338		226		34,265		1,094		40,923
Compensation and employee benefits	—		—		—		(14,285)		(14,285)
Operating expenses	—		—		—		(4,775)		(4,775)
Real estate operating expenses	—		—		(9,456)		—		(9,456)
Investment related expenses	(1,704)		(48)		(190)		(337)		(2,279)
Depreciation and amortization	—		—		(7,034)		(110)		(7,144)
Total costs and expenses	(1,704)		(48)		(16,680)		(19,507)		(37,939)
Income tax (expense) benefit	—		—		—		(3,147)		(3,147)
Segment profit (loss)	$	46,374	$	7,936	$	9,909	$	(33,024)	$	31,195
Total assets as of September 30, 2023	$	3,358,382	$	476,698	$	682,366	$	985,696	$	5,503,142

49

Three months ended September 30, 2022	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	70,851	$	5,705	$	2	$	801	$	77,359
Interest expense	(17,344)		(1,327)		(8,088)		(21,712)		(48,471)
Net interest income (expense)	53,507		4,378		(8,086)		(20,911)		28,888
(Provision for) release of loan loss reserves	(1,501)		—		—		—		(1,501)
Net interest income (expense) after provision for (release of) loan reserves	52,006		4,378		(8,086)		(20,911)		27,387
Real estate operating income	—		—		27,679		—		27,679
Net result from mortgage loan receivables held for sale	796		—		—		—		796
Realized gain (loss) on securities	—		9		—		—		9
Unrealized gain (loss) on securities	—		(66)		—		—		(66)
Realized gain on sale of real estate, net	—		—		4,393		—		4,393
Fee and other income	2,546		11		—		140		2,697
Net result from derivative transactions	4,837		982		748		—		6,567
Earnings (loss) from investment in unconsolidated ventures	—		—		407		—		407
Total other income (loss)	8,179		936		33,227		140		42,482
Compensation and employee benefits	—		—		—		(13,806)		(13,806)
Operating expenses	—		—		—		(5,143)		(5,143)
Real estate operating expenses	—		—		(10,069)		—		(10,069)
Investment related expenses	(917)		(102)		(138)		(532)		(1,689)
Depreciation and amortization	—		—		(7,864)		—		(7,864)
Total costs and expenses	(917)		(102)		(18,071)		(19,481)		(38,571)
Income tax (expense) benefit	—		—		—		(2,613)		(2,613)
Segment profit (loss)	$	59,268	$	5,212	$	7,070	$	(42,865)	$	28,685
Total assets as of December 31, 2022	$	3,892,382	$	587,519	$	706,355	$	764,917	$	5,951,173

50

Nine months ended September 30, 2023	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	261,822	$	23,964	$	5	$	20,924	$	306,715
Interest expense	(92,236)		(3,149)		(22,053)		(66,912)		(184,350)
Net interest income (expense)	169,586		20,815		(22,048)		(45,988)		122,365
(Provision for) release of loan loss reserves	(19,090)		—		—		—		(19,090)
Net interest income (expense) after provision for (release of) loan reserves	150,496		20,815		(22,048)		(45,988)		103,275
Real estate operating income	—		—		73,847		—		73,847
Net result from mortgage loan receivables held for sale	(1,119)		—		—		—		(1,119)
Realized gain (loss) on securities	—		(276)		—		—		(276)
Unrealized gain (loss) on securities	—		(20)		—		—		(20)
Realized gain on sale of real estate, net	—		—		8,808		—		8,808
Fee and other income	6,363		12		135		477		6,987
Net result from derivative transactions	5,390		612		678		—		6,680
Earnings (loss) from investment in unconsolidated ventures	—		—		913		—		913
Gain (loss) on extinguishment of debt	—		—		—		10,600		10,600
Total other income (loss)	10,634		328		84,381		11,077		106,420
Compensation and employee benefits	—		—		—		(50,612)		(50,612)
Operating expenses	—		—		—		(15,018)		(15,018)
Real estate operating expenses	—		—		(29,071)		—		(29,071)
Investment related expenses	(4,459)		(144)		(765)		(1,092)		(6,460)
Depreciation and amortization	—		—		(21,822)		(322)		(22,144)
Total costs and expenses	(4,459)		(144)		(51,658)		(67,044)		(123,305)
Income tax (expense) benefit	—		—		—		(4,913)		(4,913)
Segment profit (loss)	$	156,671	$	20,999	$	10,675	$	(106,868)	$	81,477
Total assets as of September 30, 2023	$	3,358,382	$	476,698	$	682,366	$	985,696	$	5,503,142

51

Nine months ended September 30, 2022	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	185,212	$	12,650	$	4	$	966	$	198,832
Interest expense	(44,330)		(2,429)		(27,642)		(63,811)		(138,212)
Net interest income (expense)	140,882		10,221		(27,638)		(62,845)		60,620
(Provision for) release of loan loss reserves	(1,373)		—		—		—		(1,373)
Net interest income (expense) after provision for (release of) loan reserves	139,509		10,221		(27,638)		(62,845)		59,247
Real estate operating income	—		—		82,678		—		82,678
Net result from mortgage loan receivables held for sale	(2,083)		—		—		—		(2,083)
Realized gain (loss) on securities	—		(75)		—		—		(75)
Unrealized gain (loss) on securities	—		(98)		—		—		(98)
Realized gain on sale of real estate, net	—		—		62,101		—		62,101
Fee and other income	8,147		45		3,704		342		12,238
Net result from derivative transactions	8,761		2,235		1,385		—		12,381
Earnings (loss) from investment in unconsolidated ventures	—		—		1,197		—		1,197
Gain (loss) on extinguishment of debt	—		—		—		685		685
Total other income (loss)	14,825		2,107		151,065		1,027		169,024
Compensation and employee benefits	—		—		—		(59,165)		(59,165)
Operating expenses	—		—		—		(15,303)		(15,303)
Real estate operating expenses	—		—		(28,928)		—		(28,928)
Investment related expenses	(1,715)		(200)		(437)		(2,811)		(5,163)
Depreciation and amortization	—		—		(24,756)		(8)		(24,764)
Total costs and expenses	(1,715)		(200)		(54,121)		(77,287)		(133,323)
Income tax (expense) benefit	—		—		—		(3,897)		(3,897)
Segment profit (loss)	$	152,619	$	12,128	$	69,306	$	(143,002)	$	91,051
Total assets as of December 31, 2022	$	3,892,382	$	587,519	$	706,355	$	764,917	$	5,951,173

(1)Includes the Company’s investment in unconsolidated ventures that held real estate of $7.0 million and $6.2 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in FHLB stock of $5.2 million as of September 30, 2023 and $9.6 million as of December 31, 2022, and the Company’s senior unsecured notes of $1.6 billion at September 30, 2023 and December 31, 2022.

19. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the issuance date of the financial statements and determined that no additional disclosure is necessary.

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

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes of Ladder Capital Corp included within this report and the Annual Report. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” within this Quarterly Report and “Risk Factors” within the Annual Report for a discussion of the uncertainties, risks and assumptions associated with these

52

statements. Actual results may differ materially from those contained in any forward-looking statements as a result of various factors, including but not limited to, those in “Risk Factors” set forth within the Annual Report.

References to “Ladder,” the “Company,” and “we,” “our” and “us” refer to Ladder Capital Corp, a Delaware corporation incorporated in 2013, and its consolidated subsidiaries. 

Overview

Ladder Capital Corp is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. We originate and invest in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. Our investment activities include: (i) our primary business of originating senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures; (ii) owning and operating commercial real estate, including net leased commercial properties; and (iii) investing in investment grade securities secured by first mortgage loans on commercial real estate. We believe that our in-house origination platform, ability to flexibly allocate capital among complementary product lines, credit-centric underwriting approach, access to diversified financing sources, and experienced management team position us well to deliver attractive returns on equity to our shareholders through economic and credit cycles.

Our businesses, including balance sheet lending, conduit lending, securities investments, and real estate investments, provide for a stable base of net interest and rental income. We have originated $29.7 billion of commercial real estate loans from our inception in October 2008 through September 30, 2023. During this timeframe, we also acquired $13.1 billion of predominantly investment grade-rated securities secured by first mortgage loans on commercial real estate and $2.0 billion of selected net leased and other real estate assets.

As part of our commercial mortgage lending operations, we originate conduit loans, which are first mortgage loans on stabilized, income producing commercial real estate properties that we intend to make available for sale in commercial mortgage-backed securities (“CMBS”) securitizations. From our inception in October 2008 through September 30, 2023, we originated $16.9 billion of conduit loans, of which $16.8 billion were sold into 71 CMBS securitizations, making us, by volume, the second largest non-bank contributor of loans to CMBS securitizations in the United States in such period. Our sales of loans into securitizations are generally accounted for as true sales, not financings, and we generally retain no ongoing interest in loans which we securitize unless we are required to do so as issuer pursuant to the risk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended, (the “Dodd-Frank Act”). The securitization of conduit loans enables us to reinvest our equity capital into new loan originations or allocate it to other investments.

As of September 30, 2023, we had $5.5 billion in total assets and $1.5 billion of total equity. Our assets primarily included $3.4 billion of loans, $675.3 million of real estate, $476.7 million of securities and $798.4 million of unrestricted cash.

We maintain a diversified and flexible financing strategy supporting our investment strategy and overall business operations, including the use of unsecured corporate bonds, non-recourse, non-mark-to-market CLO debt issuances and committed term financing from leading financial institutions. Refer to “Our Financing Strategies” and “Liquidity and Capital Resources” for further information.

Ladder was founded in October 2008 and we completed our IPO in February 2014. We are led by a disciplined and highly aligned management team. As of September 30, 2023, our management team and directors held interests in our Company comprising over 10% of our total equity. On average, our management team members have over 27 years of experience in the industry. Our management team includes Brian Harris, Chief Executive Officer; Pamela McCormack, President; Paul J. Miceli, Chief Financial Officer; Robert Perelman, Head of Asset Management; and Kelly Porcella, Chief Administrative Officer & General Counsel. Anthony V. Esposito, Chief Accounting Officer, is an additional officer of Ladder.

We continue to actively manage the liquidity and operations of the Company in light of market conditions, including rising interest rates and potential recessionary conditions. The Company has disclosed the impact of current market conditions on our business throughout this Quarterly Report.

53

Our Businesses

We invest primarily in loans, securities and other interests in U.S. commercial real estate, with a focus on senior secured assets. Our complementary business segments are designed to provide us with the flexibility to opportunistically allocate capital in order to generate attractive risk-adjusted returns under varying market conditions. The following table summarizes the carrying value of our investment portfolio as reported in our consolidated financial statements as of the dates indicated below ($ in thousands):

	September 30, 2023				December 31, 2022
Loans
Balance sheet loans:
Balance sheet first mortgage loans	$	3,334,385	60.6	%	$	3,819,860	64.1	%
Other commercial real estate-related loans	37,300		0.7	%	65,886		1.1	%
Allowance for credit losses	(39,575)		(0.7)	%	(20,755)		(0.3)	%
Total balance sheet loans	3,332,110		60.6	%	3,864,991		64.9	%
Conduit first mortgage loans	26,272		0.5	%	27,391		0.5	%
Total loans	3,358,382		61.1	%	3,892,382		65.4	%
Real Estate
Real estate and related lease intangibles, net	675,334		12.3	%	700,136		11.8	%
Total real estate	675,334		12.3	%	700,136		11.8	%
Securities
CMBS investments	476,369		8.7	%	551,776		9.3	%
U.S. Treasury securities	—		—	%	35,328		0.6	%
U.S. Agency securities investments	228		—	%	316		—	%
Equity securities	121		—	%	118		—	%
Allowance for credit losses	(20)		—	%	(20)		—	%
Total securities	476,698		8.7	%	587,518		9.9	%
Other Investments
Investments in and advances to unconsolidated ventures	7,032		0.1	%	6,219		0.1	%
Total other investments	7,032		0.1	%	6,219		0.1	%
Total investments	4,517,446		82.2	%	5,186,255		87.1	%
Cash, cash equivalents and restricted cash	857,914		15.6	%	659,602		11.1	%
Other assets	127,782		2.2	%	105,316		1.8	%
Total assets	$	5,503,142	100	%	$	5,951,173	100	%

Loans

Balance Sheet First Mortgage Loans.  We originate and invest in balance sheet first mortgage loans secured by commercial real estate properties that are typically undergoing transition, including lease-up, sell-out, and renovation or repositioning. These mortgage loans are structured to fit the needs and business plans of the property owners, and generally have Term SOFR-based floating rates and terms (including extension options) ranging from one to five years. Our loans are directly originated by an internal team that has longstanding and strong relationships with borrowers and mortgage brokers throughout the United States. We follow a rigorous investment process, which begins with an initial due diligence review; continues through a comprehensive legal and underwriting process incorporating multiple internal and external checks and balances; and culminates in approval or disapproval of each prospective investment by our Investment Committee. Balance sheet first mortgage loans in excess of $50.0 million also require the approval of our board of directors’ Risk and Underwriting Committee.

We generally seek to hold our balance sheet first mortgage loans for investment although we also maintain the flexibility to contribute such loans into a collateralized loan obligation (“CLO”) or similar structure, sell participation interests or “b-notes” in our mortgage loans or sell such mortgage loans as whole loans. Our balance sheet first mortgage loans have been typically repaid at or prior to maturity (including by being refinanced by us into a new conduit first mortgage loan upon property stabilization). As of September 30, 2023, we held a portfolio of 116 balance sheet first mortgage loans with an aggregate book

54

value of $3.3 billion. Based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 66.4% at September 30, 2023.

Other Commercial Real Estate-Related Loans.  We selectively invest in note purchase financings, subordinated debt, mezzanine debt and other structured finance products related to commercial real estate that are generally held for investment. As of September 30, 2023, we held a portfolio of 10 other commercial real estate-related loans with an aggregate book value of $37.3 million. Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of the portfolio was 77.3% at September 30, 2023.

Conduit First Mortgage Loans.  We also originate conduit loans, which are first mortgage loans that are secured by cash-flowing commercial real estate and are available for sale to securitizations. These first mortgage loans are typically structured with fixed interest rates and generally have five- to ten-year terms. Conduit first mortgage loans are originated, underwritten, approved and funded using the same comprehensive legal and underwriting approach, process and personnel used to originate our balance sheet first mortgage loans. Conduit first mortgage loans in excess of $50.0 million also require approval of our board of directors’ Risk and Underwriting Committee. We held one conduit loan with an aggregate carrying value of $26.3 million at September 30, 2023.

Although our primary intent is to sell our conduit first mortgage loans to CMBS trusts, we generally seek to maintain the flexibility to keep them on our balance sheet, sell participation interests or “b-notes” in such loans or sell the loans as whole loans. The Company holds these conduit loans in its taxable REIT subsidiary (“TRS”) upon origination. As of September 30, 2023, we held one conduit first mortgage loan that was available for contribution into securitizations. Based on the loan balances and the “as-is” third-party FIRREA appraised values at origination, loan-to-value ratio of this loan was 84.7% at September 30, 2023.

The following charts set forth our total outstanding balance sheet first mortgage loans, other commercial real estate-related loans, and conduit first mortgage loans as of September 30, 2023, and a breakdown of our loan portfolio by loan size and geographic location and asset type of the underlying real estate by loan balance.

55

Real Estate

Net Leased Commercial Real Estate Properties. As of September 30, 2023, we owned 156 single tenant net leased properties with an aggregate book value of $482.8 million. These properties are fully leased on a net basis where the tenant is generally responsible for payment of real estate taxes, property, building and general liability insurance and property and building maintenance expenses. As of September 30, 2023, our net leased properties comprised a total of 3.8 million square feet, 100% leased with an average age since construction of 18.6 years and a weighted average remaining lease term of 8.8 years. Commercial real estate investments in excess of $20.0 million require the approval of our board of directors’ Risk and Underwriting Committee. The majority of the tenants in our net leased properties are necessity-based businesses. During the three months ended September 30, 2023, we collected 100% of rent on these properties.

56

Diversified Commercial Real Estate Properties. As of September 30, 2023, we owned 51 diversified commercial real estate properties throughout the U.S with an aggregate book value of $192.5 million. During the three months ended September 30, 2023, we collected 100% of rent on these properties.

The following charts summarize the composition of our real estate investments as of September 30, 2023 ($ in millions):

We continue to actively monitor our commercial real estate properties in light of the current market conditions, including consideration of any long-term impacts on the buildings, tenants, business plans and the ability to execute those business plans.

Securities

We invest primarily in CMBS, including CLOs, secured by first mortgage loans on commercial real estate and own predominantly AAA-rated securities. These investments provide a stable and attractive base of net interest income and help us manage our liquidity. We have significant in-house expertise in the evaluation and trading of these securities, due in part to our experience in originating and underwriting mortgage loans that comprise assets within CMBS trusts, as well as our experience in structuring CMBS transactions. AAA-rated CMBS or U.S. Agency securities investments in excess of $76.0 million and all other investment grade CMBS or U.S. Agency securities investments in excess of $51.0 million, each in any single class of any single issuance, require the approval of our board of directors’ Risk and Underwriting Committee. The Risk and Underwriting Committee also must approve any investments in non-rated or sub-investment grade CMBS or U.S. Agency securities in any single class of any single issuance in excess of the lesser of (x) $21.0 million and (y) 10% of the total net asset value of the respective Ladder subsidiary or other entity for which Ladder has authority to make investment decisions.

The Company invests in primarily AAA-rated real estate securities, typically front pay securities, with relatively short duration and significant subordination. The hyperamortization features included in many of the securities positions we own help mitigate potential credit losses in the event of adverse market conditions.

As of September 30, 2023, the estimated fair value of our portfolio of CMBS investments totaled $476.4 million in 76 CUSIPs ($6.3 million average investment per CUSIP). Included in the $476.4 million of CMBS securities are $9.3 million of CMBS securities designated as risk retention securities under the Dodd-Frank Act, which are subject to transfer restrictions over the term of the securitization trust. The following chart summarizes our securities investments by market value, 99.4% of which were rated investment grade by Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc. or Fitch Ratings Inc. as of September 30, 2023:

57

In the future, we may invest in CMBS securities or other securities that are unrated. As of September 30, 2023, our CMBS investments had a weighted average duration of 2.1 years. The commercial real estate collateral underlying our CMBS investment portfolio is located throughout the United States. As of September 30, 2023, by property count and market value, respectively, 63.5% and 64.5% of the collateral underlying our CMBS investment portfolio was distributed throughout the top 25 metropolitan statistical areas (“MSAs”) in the United States, with 7.5% and 19.6%, by property count and market value, respectively, of the collateral located in the New York-Newark-Jersey City MSA, and the concentrations in each of the remaining top 24 MSAs ranging from 0.1% to 7.6% by property count and 0.1% to 7.9% by market value.

Other Investments

Unconsolidated Venture.  In connection with the origination of a loan in April 2012, we received a 25% equity interest with the right to convert upon a capital event. On March 22, 2013, we refinanced the loan, and we converted our equity interest into a 19% limited liability company membership interest in Grace Lake JV, LLC (“Grace Lake LLC”). As of September 30, 2023, Grace Lake LLC owned an office building campus with a carrying value of $48.0 million, which is net of accumulated depreciation of $49.7 million, that is financed by $38.0 million of long-term debt. Debt of Grace Lake LLC is non-recourse to the limited liability company members, except for customary non-recourse carve-outs for certain actions and environmental liability. As of September 30, 2023, the book value of our investment in Grace Lake LLC was $7.0 million.

United States Treasury Securities. From time to time, we invest in short-term U.S. Treasury securities that are classified as cash and cash equivalents on our consolidated balance sheet. As of September 30, 2023, we held $742.2 million of U.S. Treasury securities.

Our Financing Strategies

Our financing strategies are critical to the success and growth of our business. We manage our financing to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties. In addition to cash flow from operations, we fund our operations and investment strategy through a diverse array of funding sources, including:

•Unsecured corporate bonds

•CLO transactions

•Secured loan and securities repurchase facilities

•Non-recourse mortgage debt

•Revolving credit facility

•Loan sales and securitizations

•Unencumbered assets available for financing

•Equity

From time to time, we may add financing counterparties that we believe will complement our business, although the agreements governing our indebtedness may limit our ability and the ability of our present and future subsidiaries to incur additional indebtedness. Our amended and restated charter and by-laws do not impose any threshold limits on our ability to use leverage. Refer to our discussion below and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 6 Debt Obligations, Net in our consolidated financial statements included elsewhere in this Quarterly Report for more information about our financing arrangements.

58

Unsecured Corporate Bonds

As of September 30, 2023, we had $1.6 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $327.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”) and $636.9 million in aggregate principal amount of 4.75% senior notes due 2029 (the “2029 Notes,” and collectively with the 2025 Notes and the 2027 Notes, the “Notes”).

Due in large part to devoting such a large portion of the Company’s capital structure to equity and unsecured corporate bond debt, Ladder maintains a $3.0 billion pool of unencumbered assets, comprised primarily of first mortgage loans and unrestricted cash as of September 30, 2023.

CLO Debt

On July 13, 2021, a consolidated subsidiary of the Company completed a privately marketed CLO transaction, which generated $498.2 million of gross proceeds to Ladder, financing $607.5 million of loans (“Contributed July 2021 Loans”) at an 82% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 18% subordinate and controlling interest in the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed July 2021 Loans, including broad discretion in managing these loans, and has the ability to appoint the special servicer under the CLO.

On December 2, 2021, a consolidated subsidiary of the Company completed a privately marketed CLO transaction, which generated $566.2 million of gross proceeds to Ladder, financing $729.4 million of loans (“Contributed December 2021 Loans”) at a 77.6% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 15.6% subordinate and controlling interest in the CLO. The Company also held two additional tranches as investments totaling 6.8% interest in the CLO. The Company retained control over major decisions made with respect to the administration of the Contributed December 2021 Loans, including broad discretion in managing these loans, and has the ability to appoint the special servicer under the CLO.

As of September 30, 2023, the Company had $1.1 billion of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $2.8 million were included in CLO debt as of September 30, 2023. The CLOs are considered variable interest entities (“VIEs”) of which the Company is the primary beneficiary and, therefore, consolidated the VIEs - See Note 9, Consolidated Variable Interest Entities.

Committed Loan Financing Facilities

We are parties to multiple committed loan repurchase agreement facilities, totaling $1.1 billion of credit capacity. As of September 30, 2023, the Company had $615.0 million of borrowings outstanding, with an additional $527.0 million of committed financing available. Assets pledged as collateral under these facilities are generally limited to first mortgage whole mortgage loans, mezzanine loans and certain interests in such first mortgage and mezzanine loans. Our repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum debt/equity ratios.

We have the option to extend some of our existing facilities subject to a number of customary conditions. The lenders have sole discretion to include collateral in these facilities and to determine the market value of the collateral on a daily basis, and, if the estimated market value of the included collateral declines, the lenders have the right to require additional collateral or a full and/or partial repayment of the facilities (margin call) sufficient to rebalance the facilities. Typically, the lender establishes a maximum percentage of the collateral asset’s market value that can be borrowed. We often borrow at a lower percentage of the collateral asset’s value than the maximum, leaving us with excess borrowing capacity that can be drawn upon at a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis.

Securities Repurchase Facilities

We are a party to a committed term master repurchase agreement with a major U.S. banking institution for CMBS, totaling $100.0 million of credit capacity. As we do in the case of borrowings under committed loan facilities, we often borrow at a lower percentage of the collateral asset’s value than the maximum, leaving us with excess borrowing capacity that can be drawn upon at a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis. As of September 30, 2023, the Company had no borrowings outstanding, with an additional $100.0 million of committed financing available.

59

Additionally, we are a party to multiple uncommitted master repurchase agreements with several counterparties to finance our investments in CMBS and U.S. Agency securities. The securities that serve as collateral for these borrowings are typically AAA-rated CMBS with relatively short duration and significant subordination. The lenders have sole discretion to determine the market value of the collateral on a daily basis, and, if the estimated market value of the collateral declines, the lenders have the right to require additional cash collateral. If the estimated market value of the collateral subsequently increases, we have the right to call back excess cash collateral.

Mortgage Loan Financing

We generally finance our real estate using long-term non-recourse mortgage financing. During the nine months ended September 30, 2023, we did not execute any long term debt agreement to finance real estate. Our mortgage loan financings have primarily fixed rates ranging from 4.39% to 9.03%, mature between 2024 - 2031 and total $437.7 million as of September 30, 2023. These long-term non-recourse mortgages include net unamortized premiums of $2.0 million at September 30, 2023, representing proceeds received upon financing greater than the contractual amounts due under the agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. We recorded $0.5 million of premium amortization, which decreased interest expense, for the nine months ended September 30, 2023. The loans are collateralized by real estate and related lease intangibles, net, of $478.4 million as of September 30, 2023.

Revolving Credit Facility

The Company’s revolving credit facility (the “Revolving Credit Facility”) provides for an aggregate maximum borrowing amount of $323.9 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. The Revolving Credit Facility has a final maturity date, assuming all extension options are exercised, of July 2027. The interest rate on Eurodollar advances is the sum of one-month Term SOFR plus a fixed margin of 2.50%, with reductions in the fixed margin upon the achievement of investment grade credit ratings. As of September 30, 2023, the Company had no outstanding borrowings on the Revolving Credit Facility.

The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

LCFH is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions under the Revolving Credit Facility. In addition, under the Revolving Credit Facility, LCFH is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities.

FHLB Financing

We became a member of the FHLB in 2012 through our subsidiary, Tuebor Captive Insurance Company LLC (“Tuebor”). In 2016, the FHFA adopted a final rule that limited our captive insurance subsidiary’s membership in the FHLB, requiring us to significantly reduce the amounts of FHLB borrowings outstanding by February 2021. The Company has complied with such targeted paydowns. As of September 30, 2023, Tuebor had $115.0 million of borrowings outstanding from the FHLB, with terms of 0.59 years to 1.0 year, interest rates of 5.69% to 5.81%, and advance rates of 71.7% to 95.7% on eligible collateral, including cash collateral. As of September 30, 2023, collateral for the borrowings was comprised of $141.9 million of CMBS and U.S. Agency securities.

Hedging Strategies

We may enter into interest rate and credit spread derivative contracts to mitigate our exposure to changes in interest rates and credit spreads. We generally seek to hedge the interest rate risk on the financing of assets that have a duration longer than five years, including newly-originated conduit first mortgage loans, securities in our CMBS portfolio if long enough in duration, and most of our U.S. Agency securities portfolio. We monitor our asset profile and our hedge positions to manage our interest rate and credit spread exposures, and we seek to match fund our assets according to the liquidity characteristics and expected holding periods of our assets.

60

Financial Covenants

We generally seek to maintain a debt-to-equity ratio of approximately 3.0:1.0 or below. We expect this ratio to fluctuate during the course of a fiscal year due to the normal course of business. This ratio may also fluctuate as a result of our conduit lending operations, in which we generally securitize our inventory of conduit loans at intervals, and also because of changes in our asset mix, due in part to such securitizations. We generally seek to match fund our assets according to their liquidity characteristics and expected hold period. We believe that the defensive positioning of our predominantly senior secured assets and our financing strategy has allowed us to maintain financial flexibility to capitalize on an attractive range of market opportunities as they have arisen.

We and our subsidiaries may incur substantial additional debt in the future. However, we are subject to certain restrictions on our ability to incur additional debt in the indentures governing the Notes (the “Indentures”) and our other debt agreements. Under the Indentures, we may not incur certain types of indebtedness unless our consolidated non-funding debt to equity ratio (as defined in the Indentures) is less than or equal to 1.75:1.00 or if the unencumbered assets of the Company and its subsidiaries is less than 120% of their unsecured indebtedness, although our subsidiaries are permitted to incur indebtedness where recourse is limited to the assets and/or the general credit of such subsidiary.

Our borrowings under certain financing agreements and our committed repurchase facilities are subject to maximum consolidated leverage ratio limits (either a fixed ratio ranging from 3.5:1.0 to 4.0:1.0, or a maximum ratio based on our asset composition at the time of determination), minimum net worth requirements (ranging from $400.0 million to $871.4 million), maximum reductions in net worth over stated time periods, minimum liquidity levels (typically $30.0 million of cash or a higher standard that often allows for the inclusion of different percentages of liquid securities in the determination of compliance with the requirement), and a fixed charge coverage ratio of 1.25x, and, in the instance of one lender, an interest coverage ratio of 1.50x, in each case, if certain liquidity thresholds are not satisfied. Leverage ratio limits exclude CLO financing for purposes of this covenant calculation. These restrictions, which would permit us to incur substantial additional debt, are subject to significant qualifications and exceptions.

Further, certain of our financing arrangements and loans on our real property are secured by the assets of the Company, including pledges of the equity of certain subsidiaries or the assets of certain subsidiaries. From time to time, certain of these financing arrangements and loans may prohibit certain of our subsidiaries from paying dividends to the Company, from making distributions on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or other assets to the Company or other subsidiaries of the Company.

We are in compliance with all covenants as described in this Quarterly Report as of September 30, 2023.

61

Results of Operations

A discussion regarding our results of operations for the three months ended September 30, 2023 compared to the three months ended June 30, 2023 is presented below.

Three months ended September 30, 2023 compared to the three months ended June 30, 2023

The following table sets forth information regarding our consolidated results of operations ($ in thousands):

	Three Months Ended
	September 30, 2023		June 30, 2023		Difference
Net interest income
Interest income	$	101,090	$	101,829	$	(739)
Interest expense	62,259		61,342		917
Net interest income (expense)	38,831		40,487		(1,656)
Provision for (release of) loan loss reserves, net	7,473		6,881		592
Net interest income (expense) after provision for (release of) loan losses	31,358		33,606		(2,248)
Other income (loss)
Real estate operating income	24,761		25,887		(1,126)
Net result from mortgage loan receivables held for sale	(629)		(296)		(333)
Realized gain (loss) on securities	23		8		15
Unrealized gain (loss) on securities	(42)		(95)		53
Realized gain (loss) on sale of real estate, net	8,808		—		8,808
Fee and other income	1,829		3,327		(1,498)
Net result from derivative transactions	4,773		4,149		624
Earnings from investment in unconsolidated ventures	479		217		262
Gain on extinguishment of debt	921		462		459
Total other income (loss)	40,923		33,659		7,264
Costs and expenses
Compensation and employee benefits	14,285		14,242		43
Operating expenses	4,775		4,987		(212)
Real estate operating expenses	9,456		9,766		(310)
Investment related expenses	2,279		2,661		(382)
Depreciation and amortization	7,144		7,471		(327)
Total costs and expenses	37,939		39,127		(1,188)
Income (loss) before taxes	34,342		28,138		6,204
Income tax expense (benefit)	3,147		46		3,101
Net income (loss)	$	31,195	$	28,092	$	3,103

Investment Overview

Activity for the three months ended September 30, 2023 included originating and funding $17.2 million in principal value of commercial mortgage loans and $119.4 million of principal repayments, which contributed to a net decrease in our loan portfolio of $137.5 million. Activity for the three months ended September 30, 2023 included securities purchases of $58.6 million, sales of $3.6 million and $37.3 million of amortization and paydowns, which contributed to a net increase in our securities portfolio of $18.5 million. In addition, we purchased $1.4 billion of short-term U.S. Treasury securities during the three months ended September 30, 2023, of which $1.3 billion matured during the three months ended September 30, 2023.

Activity for the three months ended June 30, 2023 included originating and funding $11.6 million in principal value of commercial mortgage loans, which was partially offset by $309.3 million of principal repayments. Activity for the three months ended June 30, 2023 included securities purchases of $14.4 million sales of $0.6 million and $75.5 million of amortization and paydowns in the portfolio, which contributed to a net decrease in our securities portfolio of $61.8 million. In addition, we purchased $1.1 billion of short-term U.S. Treasury securities during the three months ended June 30, 2023, of which $948.0 million matured during the three months ended June 30, 2023.

62

Net Interest Income

The $0.7 million decrease in interest income was primarily attributable to a reduction in our outstanding loan balances as a result of net paydowns partially offset by an increase in prevailing interest rates. For the three months ended September 30, 2023, the amortized cost of loan investments averaged $3.5 billion and the amortized cost of securities investments averaged $468.5 million. For the three months ended June 30, 2023, the amortized cost of loan investments averaged $3.7 billion and the amortized cost of securities investments averaged $486.7 million. There was a $18.3 million decrease in average securities investments, and a $214.0 million decrease in average loan investments.

The $0.9 million increase in interest expense is primarily a result of rising prevailing interest rates, partially offset by a reduction in our security repurchase facilities as well as a reduction in expense as a result of redemptions of our Notes.

The decrease in net interest income before provision for loan losses of $1.7 million as explained above is primarily driven by a reduction in interest income as a result of net payoffs partially offset by a rise in prevailing interest rates.

As of September 30, 2023, the weighted average yield on our mortgage loan receivables was 9.7%, compared to 9.5% as of June 30, 2023. The weighted average yield increased as a result of increases in the prevailing interest rates. As of September 30, 2023 and June 30, 2023, the weighted average interest rate on borrowings against our mortgage loan receivables was 7.8% as compared to 7.2% as of June 30, 2023. As of September 30, 2023, we had outstanding borrowings secured by our mortgage loan receivables equal to 49.9% of the carrying value of our mortgage loan receivables, compared to 49.3% as of June 30, 2023.

As of September 30, 2023, the weighted average yield on our securities was 6.8%, compared to 6.2% as of June 30, 2023. The weighted average yield increased as a result of increases in the prevailing interest rates. As of September 30, 2023, the weighted average interest rate on borrowings against our securities was 5.8%, compared to 5.4% as of June 30, 2023. The increase in the rate on borrowings against our securities from June 30, 2023 to September 30, 2023 was primarily due to higher prevailing market borrowing rates as of September 30, 2023 compared to June 30, 2023. As of September 30, 2023, we had outstanding borrowings secured by our securities equal to 24.5% of the carrying value of our securities, compared to 39.5% as of June 30, 2023.

Our real estate is comprised of non-interest bearing assets; however, interest incurred on mortgage financing collateralized by such real estate is included in interest expense. As of September 30, 2023, and June 30, 2023, the weighted average interest rate on mortgage borrowings against our real estate was 5.9% and 5.7%, respectively. As of September 30, 2023, we had outstanding borrowings secured by our real estate equal to 64.8% of the carrying value of our real estate, compared to 68.3% as of June 30, 2023.

Provision for (release of) Loan Loss Reserves

The provision for the three months ended September 30, 2023 of $7.5 million was primarily due to adverse changes in macroeconomic conditions.

The provision for the three months ended June 30, 2023 of $6.9 million was primarily due to adverse changes in macroeconomic conditions. For additional information, refer to Note 3, Mortgage Loan Receivables, in the consolidated financial statements.

Real Estate Operating Income

The decrease of $1.1 million in real estate operating income was primarily attributable to the timing of the sale of a hotel property during the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Net Result from Mortgage Loan Receivables Held for Sale

Net result from mortgage loan receivables held for sale, includes all loan sales, whether by securitization, whole loan sales or other means. Net result from mortgage loan receivables held for sale also includes unrealized losses on loans related to lower of cost or market adjustments. During the three months ended September 30, 2023, we did not transfer any balance sheet first mortgage or conduit loans and recorded a lower of cost or market adjustment of $0.6 million. During the three months ended June 30, 2023, we did not transfer any balance sheet mortgage loans or conduit loans and recorded $0.3 million net in lower of cost or market adjustments. Income from sales of loans, net is subject to market conditions impacting timing, size and pricing and as such may vary significantly quarter to quarter.

63

Realized Gain (Loss) on Sale of Real Estate, Net

There was an increase of $8.8 million in realized gain (loss) on the sale of real estate for the three months ended September 30, 2023. The increase was the result of a sale of a hotel property during the three months ended September 30, 2023 compared to no sale activity for the three months ended June 30, 2023.

Fee and Other Income

We generate fee income on the loans we originate and in which we invest, and dividend income on our FHLB stock. The $1.5 million decrease in fee and other income was primarily due to the timing of loan payoffs for the three months ended September 30, 2023 as compared to the three months ended June 30, 2023.

Net Result from Derivative Transactions

Net gain from derivative transactions of $4.8 million is composed of a realized gain of $5.0 million and an unrealized loss of $0.2 million for the three months ended September 30, 2023, compared to a net gain from derivative transactions of $4.1 million which is composed of a realized gain of $3.7 million and an unrealized gain of $0.4 million for the three months ended June 30, 2023. The hedge positions primarily relate to fixed rate conduit loans and securities investments. The derivative positions that generated these results were a combination of five and ten year U.S. treasury rate futures that we employed in an effort to hedge the interest rate risk primarily on the financing of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The gain in 2023 was primarily related to movement in interest rates during the three months ended September 30, 2023. The total net result from derivative transactions is comprised of hedging interest expense, realized gains/losses related to hedge terminations and unrealized gains/losses related to changes in the fair value of asset hedges.

Earnings (Loss) from Investment in Unconsolidated Ventures

Earnings from our investment in unconsolidated ventures totaled $0.5 million for the three months ended September 30, 2023 and $0.2 million for the three months ended June 30, 2023. Our maximum exposure to loss from these investments is limited to the carrying value of our investment.

Gain (Loss) on Extinguishment of Debt

During the three months ended September 30, 2023, there was $0.9 million of gain on extinguishment of debt as the Company retired: (1) $0.5 million of principal of the 2027 Notes for a repurchase price of $0.4 million, recognizing a $0.1 million net gain on extinguishment of debt after recognizing $(3) thousand of unamortized debt issuance costs associated with the retired debt and (2) $4.8 million of principal of the 2029 Notes for a repurchase price of $3.9 million, recognizing a $0.9 million net gain on extinguishment of debt after recognizing $(55) thousand of unamortized debt issuance costs associated with the retired debt.

During the three months ended June 30, 2023, there was $0.5 million of gain on extinguishment of debt as the Company retired: (1) $2.0 million of principal of the 2027 Notes for a repurchase price of $1.7 million, recognizing a $0.3 million net gain on extinguishment of debt after recognizing $(15) thousand of unamortized debt issuance costs associated with the retired debt and (2) $1.1 million of principal of the 2029 Notes for a repurchase price of $0.9 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(13) thousand of unamortized debt issuance costs associated with the retired debt.

Operating Expenses

Operating expenses are primarily composed of professional fees, lease expense and technology expenses. The decrease during the three months ended September 30, 2023 compared to the three months ended June 30, 2023 of $(0.2) million was primarily related to a decrease in administrative expenses.

Real Estate Operating Expenses

The decrease during the three months ended September 30, 2023 compared to the three months ended June 30, 2023 of $(0.3) million in real estate operating expense is primarily the result of the timing of the sale of a hotel property during the three months ended September 30, 2023.

64

Investment Related Expenses

Investment related expenses are comprised primarily of custodian fees, financing costs, servicing fees related to loans, and other deal related expenses. The decrease during the three months ended September 30, 2023 compared to the three months ended June 30, 2023 of $(0.4) million was primarily attributable to a decrease in deal related expenses.

Depreciation and amortization

The $(0.3) million decrease during the three months ended September 30, 2023 compared to the three months ended June 30, 2023 in depreciation and amortization is primarily attributable to the timing of the sale of a hotel property during the three months ended September 30, 2023.

Income Tax (Benefit) Expense

Most of our consolidated income tax provision related to the business units held in our TRSs. The increase in expense during the three months ended September 30, 2023 compared to the three months ended June 30, 2023 is primarily a result of increases in our income in our TRSs.

65

Results of Operations

A discussion regarding our results of operations for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 is presented below.

Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022

The following table sets forth information regarding our consolidated results of operations ($ in thousands):

	Nine Months Ended September 30,
	2023		2022		Difference
Net interest income
Interest income	$	306,715	$	198,832	$	107,883
Interest expense	184,350		138,212		46,138
Net interest income (expense)	122,365		60,620		61,745
Provision for (release of) loan loss reserves, net	19,090		1,373		17,717
Net interest income (expense) after provision for (release of) loan losses	103,275		59,247		44,028
Other income (loss)
Real estate operating income	73,847		82,678		(8,831)
Net result from mortgage loan receivables held for sale	(1,119)		(2,083)		964
Realized gain (loss) on securities	(276)		(75)		(201)
Unrealized gain (loss) on securities	(20)		(98)		78
Realized gain (loss) on sale of real estate, net	8,808		62,101		(53,293)
Fee and other income	6,987		12,238		(5,251)
Net result from derivative transactions	6,680		12,381		(5,701)
Earnings from investment in unconsolidated ventures	913		1,197		(284)
Gain on extinguishment of debt	10,600		685		9,915
Total other income (loss)	106,420		169,024		(62,604)
Costs and expenses
Compensation and employee benefits	50,612		59,165		(8,553)
Operating expenses	15,018		15,303		(285)
Real estate operating expenses	29,071		28,928		143
Investment related expenses	6,460		5,163		1,297
Depreciation and amortization	22,144		24,764		(2,620)
Total costs and expenses	123,305		133,323		(10,018)
Income (loss) before taxes	86,390		94,948		(8,558)
Income tax expense (benefit)	4,913		3,897		1,016
Net income (loss)	$	81,477	$	91,051	$	(9,574)

Investment Overview

Activity for the nine months ended September 30, 2023 included originating and funding $61.4 million in principal value of commercial mortgage loans and $559.9 million of principal repayments, which contributed to a net decrease in our loan portfolio of $0.5 billion. Activity for the nine months ended September 30, 2023 included securities purchases of $76.6 million, sales of $17.8 million and $173.0 million of amortization and paydowns, which contributed to a net decrease in our securities portfolio of $110.8 million. In addition, we purchased $3.5 billion of short-term U.S. Treasury securities during the nine months ended September 30, 2023, of which $2.8 billion matured during the nine months ended September 30, 2023.

Activity for the nine months ended September 30, 2022 included originating and funding $1.2 billion in principal value of commercial mortgage loans, which was offset by $0.7 billion of principal repayments and $29.1 million of proceeds of sales of loans. We acquired $68.0 million of new securities, which was offset by $5.5 million of sales and $136.9 million of amortization in the portfolio, which partially contributed to a net decrease in our securities portfolio of $92.7 million during the nine months ended September 30, 2022. We acquired $15.4 million in real estate and received proceeds from the sale of real estate of $173.1 million as a result of the sale of five investments.

66

Net Interest Income

The $107.9 million increase in interest income was primarily attributable to increases in prevailing interest rate benchmarks on our floating rate balance sheet loan and securities portfolios partially offset by net payoffs. For the nine months ended September 30, 2023, the amortized cost of loan investments averaged $3.7 billion and the amortized cost of securities investments averaged $502.0 million. For the nine months ended September 30, 2022, the amortized cost of loan investments averaged $3.9 billion and the amortized cost of securities investments averaged $656.5 million. There was a $(0.2) billion decrease in average loan investments and a $(154.5) million decrease in average securities investments.

The $46.1 million increase in interest expense is primarily related to higher prevailing rates on our floating rate debt and higher outstanding balances on our loan repurchase facilities. The increase in interest expense was partially offset by the payoff of our Secured Financing Facility and reductions in the outstanding balances of our long-term mortgage loan debt, securities repurchase financing, and FHLB borrowings as well as a reduction in expense as a result of redemptions of our Notes.

The increase in net interest income before provision for loan losses of $61.7 million as explained above is also attributable to a higher percentage of our owned assets being variable rate as compared to certain financing sources such as our unsecured bonds and our mortgage loan financing being fixed rate.

As of September 30, 2023, the weighted average yield on our mortgage loan receivables was 9.7%, compared to 7.4% as of September 30, 2022. The weighted average yield increased as a result of increases in the prevailing interest rates. As of September 30, 2023, the weighted average interest rate on borrowings against our mortgage loan receivables was 7.8%, compared to 4.5% as of September 30, 2022. The increase in the rate on borrowings against our mortgage loan receivables from September 30, 2022 to September 30, 2023 was primarily due to the increase in prevailing interest rates. As of September 30, 2023, we had outstanding borrowings secured by our mortgage loan receivables equal to 49.9% of the carrying value of our mortgage loan receivables, compared to 39.8% as of September 30, 2022.

As of September 30, 2023, the weighted average yield on our securities was 6.8%, compared to 3.7% as of September 30, 2022. The weighted average yield increased as a result of increases in the prevailing interest rates. As of September 30, 2023, the weighted average interest rate on borrowings against our securities was 5.8%, compared to 3.4% as of September 30, 2022. The increase in the rate on borrowings against our securities from September 30, 2022 to September 30, 2023 was primarily due to higher prevailing market borrowing rates as of September 30, 2023 compared to September 30, 2022. As of September 30, 2023, we had outstanding borrowings secured by our securities equal to 24.5% of the carrying value of our real estate securities, compared to 63.9% as of September 30, 2022.

Our real estate is comprised of non-interest bearing assets; however, interest incurred on mortgage financing collateralized by such real estate is included in interest expense. As of September 30, 2023, the weighted average interest rate on mortgage borrowings against our real estate was 5.9%, compared to 5.1% as of September 30, 2022. As of September 30, 2023, we had outstanding borrowings secured by our real estate equal to 64.8% of the carrying value of our real estate, compared to 79.3% as of September 30, 2022.

Provision for (release of) Loan Loss Reserves

The provision for the nine months ended September 30, 2023 of $19.1 million was primarily due to adverse changes in macroeconomic conditions.

The provision for the nine months ended September 30, 2022 was $1.4 million. The net increase represents an increase in the general reserve of loans held for investment of $4.2 million and an increase related to unfunded loan commitments of $0.3 million partially offset by a $3.1 million release in reserve for provision. The increase in provision associated with the general reserve during the nine months ended September 30, 2022 is primarily due to adverse changes in macroeconomic scenarios and an overall increase in the size of our balance sheet first mortgage portfolio as a result of net originations during that time.

Real Estate Operating Income

The decrease of $8.8 million in real estate operating income primarily relates to operating income earned on properties sold during the twelve months ended December 31, 2022 for which there was no operating income during the current period.

67

Net Result from Mortgage Loan Receivables Held for Sale

Net result from mortgage loan receivables held for sale, includes all loan sales, whether by securitization, whole loan sales or other means. Net result from mortgage loan receivables held for sale also includes unrealized losses on loans related to lower of cost or market adjustments. During the nine months ended September 30, 2023, we did not sell any conduit loans and recorded $1.1 million of unrealized losses on loans related to lower of cost or market adjustments on our conduit loans. During the nine months ended September 30, 2022, we sold two conduit loans for a net gain of $0.1 million and recorded $2.2 million of unrealized losses on loans related to lower of cost or market adjustments on our conduit loans. Income from sales of loans, net is subject to market conditions impacting timing, size and pricing and as such may vary significantly quarter to quarter.

Realized Gain (Loss) on Securities

The realized loss on securities for the nine months ended September 30, 2023 was $(0.3) million compared to a realized loss of $(0.1) million for September 30, 2022, which resulted in a net negative change of $(0.2) million. For the nine months ended September 30, 2023, we sold $14.9 million of CMBS securities. For the nine months ended September 30, 2022, we sold $4.3 million of CMBS securities and $1.2 million of equity securities.

Realized Gain (Loss) on Sale of Real Estate, Net

There was a decrease of $53.3 million in realized gain (loss) on the sale of real estate, which was a result of the timing of real estate sales. During the nine months ended September 30, 2023, there was a sale of one hotel property for a realized gain of $8.8 million. During the nine months ended September 30, 2022, there were sales of (i) one office property for a realized gain of $14.5 million; (ii) one warehouse property for a realized gain of $14.6 million; (iii) two apartment buildings for a combined realized gain of $28.6 million; and (iv) one retail property for a realized gain of $4.4 million.

Fee and Other Income

We generate fee income on the loans we originate and in which we invest, and dividend income on our FHLB stock. The $5.3 million decrease in fee and other income was primarily due to the timing of loan payoffs for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022, partially offset by an increase in dividends from FHLB stock.

Net Result from Derivative Transactions

Net result from derivative transactions of $6.7 million is composed of a realized gain of $6.9 million and a realized loss of $(0.2) million for the nine months ended September 30, 2023, compared to a net gain of $12.4 million for the nine months ended September 30, 2022, which was comprised of a realized gain of $11.6 million and a $0.8 million unrealized gain resulting in a negative change of $5.7 million. The hedge positions primarily relate to fixed rate conduit loans, and securities investments. The derivative positions that generated these results were a combination of five and ten year U.S. treasury rate futures that we employed in an effort to hedge the interest rate risk primarily on the financing of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates. The gain in 2023 was primarily related to movement in interest rates during the nine months ended September 30, 2023. The total net result from derivative transactions is comprised of hedging interest expense, realized gains/losses related to hedge terminations and unrealized gains/losses related to changes in the fair value of asset hedges.

Earnings (Loss) from Investment in Unconsolidated Ventures

Earnings from our investment in unconsolidated ventures totaled $0.9 million and $1.2 million for the nine months ended September 30, 2023 and 2022, respectively. Our maximum exposure to loss from these investments is limited to the carrying value of our investment.

68

Gain (Loss) on Extinguishment of Debt

Gain (loss) on extinguishment of debt totaled $10.6 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2023, the Company retired: (1) $16.2 million of principal of the 2025 Notes for a repurchase price of $14.8 million, recognizing a $1.3 million net gain on extinguishment of debt after recognizing $(72) thousand of unamortized debt issuance costs associated with the retired debt; (2) $38.9 million of principal of the 2027 Notes for a repurchase price of $31.8 million, recognizing a $6.8 million net gain on extinguishment of debt after recognizing $(0.3) million of unamortized debt issuance costs associated with the retired debt; and (3) $12.1 million of principal of the 2029 Notes for a repurchase price of $9.4 million, recognizing a $2.5 million net gain on extinguishment of debt after recognizing $(0.1) million of unamortized debt issuance costs associated with the retired debt.

Gain (loss) on extinguishment of debt totaled $0.7 million for the nine months ended September 30, 2022. During the nine months ended September 30, 2022, the Company retired: (1) $4.0 million of principal of the 2025 Notes for a repurchase price of $3.7 million, recognizing a $0.3 million net gain on extinguishment of debt after recognizing $(23) thousand of unamortized debt issuance costs associated with the retired debt, (2) $1.0 million of principal of the 2027 Notes for a repurchase price of $0.8 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(9) thousand of unamortized debt issuance costs associated with the retired debt and (3) $1.0 million of principal of the 2029 Notes for a repurchase price of $0.8 million, recognizing a $0.2 million net gain on extinguishment of debt after recognizing $(14) thousand of unamortized debt issuance costs associated with the retired debt.

Compensation and Employee Benefits

Compensation and employee benefits are comprised primarily of salaries, bonuses, equity-based compensation and other employee benefits. The decrease of $8.6 million in compensation expense is primarily due to a decrease in equity-based compensation.

Operating Expenses

Operating expenses are primarily comprised of professional fees, lease expense and technology expenses. The decrease during the nine months ended September 30, 2023 as compared to September 30, 2022 of $0.3 million was primarily related to a decrease in professional and technology expenses.

Investment Related Expenses

Investment related expenses are comprised primarily of custodian fees, financing costs, servicing fees related to loans and other deal related expenses. The increase during the nine months ended September 30, 2023 as compared to September 30, 2022 of $1.3 million was primarily attributable to an increase in deal related expenses.

Depreciation and Amortization

The $2.6 million decrease during the nine months ended September 30, 2023 as compared to September 30, 2022 in depreciation and amortization is primarily attributable to the timing of the four real estate sales and one acquisition that occurred after September 30, 2022.

Income Tax (Benefit) Expense

Most of our consolidated income tax provision related to the business units held in our TRSs. The increase in expense of $1.0 million during the nine months ended September 30, 2023 as compared to September 30, 2022 is primarily a result of changes to income in our TRSs.

69

Liquidity and Capital Resources

The management of our liquidity and capital diversity and allocation strategies is critical to the success and growth of our business. We manage our sources of liquidity to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties.

We require substantial amounts of capital to support our business. The management team, in consultation with our board of directors, establishes our overall liquidity and capital allocation strategies. A key objective of those strategies is to support the execution of our business strategy while maintaining sufficient ongoing liquidity throughout the business cycle to service our financial obligations as they become due. When making funding and capital allocation decisions, members of our senior management consider: business performance; the availability of, and costs and benefits associated with, different funding sources; current and expected capital markets and general economic conditions; our asset composition and capital structure; and our targeted liquidity profile and risks relating to our funding needs.

To ensure that Ladder can effectively address the funding needs of the Company on a timely basis, we maintain a diverse array of liquidity sources including: (1) cash and cash equivalents; (2) cash generated from operations; (3) proceeds from the issuance of the unsecured bonds; (4) borrowings under repurchase agreements; (5) principal repayments on investments including mortgage loans and securities; (6) borrowings under our Revolving Credit Facility; (7) proceeds from securitizations and sales of loans; (8) proceeds from the sale of securities; (9) proceeds from the sale of real estate; (10) proceeds from the issuance of CLO debt and other non-mark-to-market loan financing; and (11) proceeds from the issuance of equity capital. We use these funding sources to meet our obligations on a timely basis and have the ability to use our significant unencumbered asset base to further finance our business.

Our primary uses of liquidity are for: (1) the funding of loan, real estate-related and securities investments; (2) the repayment of short-term and long-term borrowings and related interest; (3) the funding of our operating expenses; and (4) distributions to our equity investors to comply with the REIT distribution requirements. We require short-term liquidity to fund loans that we originate and hold on our consolidated balance sheet pending sale, including through whole loan sale, participation, or securitization. We generally require longer-term funding to finance the loans and real estate-related investments that we hold for investment. We have historically used the aforementioned funding sources to meet the operating and investment needs as they have arisen and have been able to do so by applying a rigorous approach to long and short-term cash and debt forecasting.

In addition, as a REIT, we are also required to make sufficient dividend payments to our shareholders in amounts at least sufficient to maintain our REIT status. Under IRS guidance, we may elect to pay a portion of our dividends in stock, subject to a cash/stock election by our shareholders, to optimize our level of capital retention. Accordingly, our cash requirement to pay dividends to maintain REIT status could be substantially reduced at the discretion of the board of directors.

Our principal debt financing sources include: (1) long-term senior unsecured notes in the form of corporate bonds; (2) CLO issuances; (3) committed secured funding provided by banks and other lenders; (4) long term non-recourse mortgage financing; (5) uncommitted secured funding sources, including asset repurchase agreements with a number of banks; and (6) secured advances from the FHLB through our captive insurance company.

In the future, we may also use other sources of financing to fund the acquisition of our assets, including credit facilities, warehouse facilities, repurchase facilities and other secured and unsecured forms of borrowing. These financings may be collateralized or non-collateralized, may involve one or more lenders and may accrue interest at either fixed or floating rates. We may also seek to raise further equity capital or issue debt securities in order to fund our future investments.

Refer to “Financial Covenants” and “Our Financing Strategies” for further disclosure of our diverse financing sources and, for a summary of our financial obligations, refer to the Contractual Obligations table below. All of our existing financial obligations due within the following year can be extended for one or more additional years at our discretion, refinanced or repaid at maturity or are incurred in the normal course of business (i.e., interest payments/loan funding obligations).

Cash, Cash Equivalents and Restricted Cash

We held cash, cash equivalents and restricted cash of $857.9 million at September 30, 2023, of which $798.4 million was unrestricted cash and cash equivalents and $59.5 million was restricted cash. We held cash and cash equivalents of $609.1 million and restricted cash of $50.5 million as of December 31, 2022.

70

Cash Flows

The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash ($ in thousands):

	Nine Months Ended September 30,
	2023		2022
Net cash provided by (used in) operating activities	$	122,205	$	52,216
Net cash provided by (used in) investing activities	602,662		(208,095)
Net cash provided by (used in) financing activities	(516,639)		(108,488)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	208,228	$	(264,367)

Nine months ended September 30, 2023

We experienced a net increase in cash, cash equivalents and restricted cash of $208.2 million for the nine months ended September 30, 2023, reflecting cash provided by operating activities of $122.2 million, cash provided by investing activities of $602.7 million and cash used in financing activities of $(516.6) million.

Net cash provided by operating activities of $122.2 million was primarily driven by net interest income and increases in net operating income on our real estate portfolio.

Net cash provided by investing activities of $602.7 million was driven by $531.8 million of repayment from mortgage loan receivables, $173.0 million in repayments on securities, and $17.8 million of proceeds from sale of securities, partially offset by $(76.6) million in purchases of securities and $(61.4) million of origination of mortgage loans held for investment.

Net cash used in financing activities of $(516.6) million was primarily as a result of net repayments of borrowings of $(415.7) million, $(87.7) million of dividend payments, $(7.9) million of shares acquired to satisfy minimum federal and state tax withholdings on restricted stock, $(2.5) million purchase of treasury stock, and $(2.4) million in deferred financing cost.

Nine months ended September 30, 2022

We experienced a net decrease in cash, cash equivalents and restricted cash of $(264.4) million for the nine months ended September 30, 2022 reflecting cash provided by operating activities of $52.2 million, cash used by investing activities of $(208.1) million and cash used in financing activities of $(108.5) million.

Net cash provided by operating activities of $52.2 million was primarily driven by $29.2 million in proceeds from sale of loans and increases in net interest income and increases in net operating income on our real estate portfolio partially offset by $(61.3) million of originations of mortgage loans held for sale.

Net cash used in investing activities of $(208.1) million was driven by usage of $(1.2) billion of origination of mortgage loans held for investment and $(68.0) million in purchases of real estate securities. These uses were partially offset by $725.9 million of repayment from mortgage loan receivables, $173.1 million proceeds from the sale of real estate, $136.9 million in repayments on securities, and $5.5 million of proceeds from sale of securities.

Net cash used in financing activities of $(108.5) million was primarily as a result of $(78.5) million of dividend payments, $(13.4) million of capital distributed to noncontrolling interests in consolidated ventures, $(11.4) million of shares acquired to satisfy minimum federal and state tax withholdings on restricted stock, $(6.2) million purchase of treasury stock, and $(8.2) million in deferred financing cost, partially offset by net repayments of borrowings of $8.9 million.

Unencumbered Assets

As of September 30, 2023, we held unencumbered cash of $798.4 million, unencumbered loans of $1.4 billion, unencumbered securities of $326.0 million, unencumbered real estate of $104.8 million and $380.7 million of other assets not secured by any portion of secured indebtedness. As of December 31, 2022, we held unencumbered cash of $609.1 million, unencumbered loans of $1.7 billion, unencumbered securities of $97.5 million, unencumbered real estate of $140.3 million and $351.6 million of other assets not secured by any portion of secured indebtedness.

71

Borrowings under various financing arrangements

Our financing strategies are critical to the success and growth of our business. We manage our leverage policies to complement our asset composition and to diversify our exposure across multiple counterparties. Our borrowings under various financing arrangements as of September 30, 2023 are set forth in the table below ($ in thousands):

	September 30, 2023
Committed loan repurchase facilities	$	614,972
Committed securities repurchase facility	—
Uncommitted securities repurchase facilities	1,646
Total repurchase facilities	616,618
Revolving credit facility	—
Mortgage loan financing(1)	437,739
CLO debt(2)	1,060,417
Borrowings from the FHLB	115,000
Senior unsecured notes(3)	1,564,071
Total debt obligations, net	$	3,793,845

(1)Presented net of unamortized debt issuance costs of $1.7 million as of September 30, 2023.

(2)Presented net of unamortized debt issuance costs of $2.8 million as of September 30, 2023.

(3)Presented net of unamortized debt issuance costs of $12.5 million as of September 30, 2023.

The Company’s repurchase facilities include covenants covering minimum net worth requirements (ranging from $400.0 million to $871.4 million), maximum reductions in net worth over stated time periods, minimum liquidity levels (typically $30.0 million of cash or a higher standard that often allows for the inclusion of different percentages of liquid securities in the determination of compliance with the requirement), maximum leverage ratios (calculated in various ways based on specified definitions of indebtedness and net worth) and a fixed charge coverage ratio of 1.25x, and, in the instance of one lender, an interest coverage ratio of 1.50x, in each case, if certain liquidity thresholds are not satisfied. We were in compliance with all covenants as of September 30, 2023 and December 31, 2022. Further, certain of our financing arrangements and loans on our real property are secured by the assets of the Company, including pledges of the equity of certain subsidiaries or the assets of certain subsidiaries. From time to time, certain of these financing arrangements and loans may prohibit certain of our subsidiaries from paying dividends to the Company, from making distributions on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or other assets to the Company or other subsidiaries of the Company.

72

Committed loan facilities

We are a party to multiple committed loan repurchase agreement facilities, totaling $1.1 billion of credit capacity as of September 30, 2023. As of September 30, 2023, the Company had $615.0 million of borrowings outstanding, with an additional $527.0 million of committed financing available. As of December 31, 2022, the Company had $616.9 million of borrowings outstanding, with an additional $683.1 million of committed financing available. Assets pledged as collateral under these facilities are generally limited to whole mortgage loans collateralized by first liens on commercial real estate, mezzanine loans collateralized by equity interests in entities that own commercial real estate, and certain interests in such first mortgage and mezzanine loans. Our repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum debt/equity ratios. We believe we were in compliance with all covenants as of September 30, 2023.

On October 3, 2023, the Company executed an amendment to one of its loan repurchase agreements to, among other things, increase the maximum funding capacity from $100.0 million to $200.0 million and extend the maximum term of the facility including extension options to October 3, 2027.

We have the option to extend some of our existing facilities subject to a number of customary conditions. The lenders have sole discretion with respect to the inclusion of collateral in these facilities, to determine the market value of the collateral on a daily basis, and, if the estimated market value of the included collateral declines, the lenders have the right to require additional collateral or a full and/or partial repayment of the facilities (margin call), sufficient to rebalance the facilities. Typically, the facilities are established with stated guidelines regarding the maximum percentage of the collateral asset’s market value that can be borrowed. We often borrow at a lower percentage of the collateral asset’s value than the maximum leaving us with excess borrowing capacity that can be drawn upon at a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis.

Committed securities facility

We are a party to a term master repurchase agreement with a major U.S. banking institution for CMBS, totaling $100.0 million of credit capacity. As we do in the case of borrowings under committed loan facilities, we often borrow at a lower percentage of the collateral asset’s value than the maximum, leaving us with excess borrowing capacity that can be drawn upon a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis. As of September 30, 2023, the Company had no borrowings outstanding, with an additional $100.0 million of committed financing available. As of December 31, 2022, the Company had $8.6 million of borrowings outstanding, and an additional $91.4 million of committed financing available.

Uncommitted securities facilities

We are a party to multiple master repurchase agreements with several counterparties to finance our investments in CMBS and U.S. Agency securities. The securities that served as collateral for these borrowings are highly liquid and marketable assets that are typically of relatively short duration.

Revolving Credit Facility

The Company’s revolving credit facility (“Revolving Credit Facility”) provides for an aggregate maximum borrowing amount of $323.9 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. On July 27, 2022, the Company amended its Revolving Credit Facility to increase the maximum borrowing amount to $323.9 million, extend the maturity date to July 27, 2027, and reduce the interest rate to the sum of one-month Term SOFR plus a fixed margin of 2.50%. The amendment also provides for reductions in the fixed margin upon the achievement of investment grade credit ratings. As of September 30, 2023, the Company had no outstanding borrowings on the Revolving Credit Facility, but still maintains the ability to draw $323.9 million. There were no outstanding draws on the facility at December 31, 2022. During the three months ended September 30, 2023, the Company exercised one of the four remaining one-year extension options, which extended the maturity date of the Revolving Credit Facility to July 27, 2024.

The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

73

The Company is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions. In addition, the Company is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities. The Company’s ability to borrow is dependent on, among other things, compliance with the financial covenants. The Revolving Credit Facility contains customary events of default, including non-payment of principal or interest, fees or other amounts, failure to perform or observe covenants, cross-default to other indebtedness, the rendering of judgments against the Company or certain of our subsidiaries to pay certain amounts of money and certain events of bankruptcy or insolvency.

Mortgage Loan Financing

We generally finance our real estate using long-term non-recourse mortgage financing. During the nine months ended September 30, 2023, we did not execute any term debt agreement to finance real estate. Our non-recourse debt agreements provide for primarily fixed rate financing at rates ranging from 4.39% to 9.03%, with anticipated maturity dates between 2024 - 2031 and an average term of 3.12 as of September 30, 2023. These loans have carrying amounts of $437.7 million and $498.0 million, net of unamortized premiums of $2.0 million and $2.4 million as of September 30, 2023 and December 31, 2022, respectively, representing proceeds received upon financing greater than the contractual amounts due under these agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $0.5 million of premium amortization, which decreased interest expense for the nine months ended September 30, 2023. The mortgage loans are collateralized by real estate and related lease intangibles, net, of $478.4 million and $559.9 million as of September 30, 2023 and December 31, 2022, respectively.

Collateralized Loan Obligations (“CLO”) Debt

On July 13, 2021, a consolidated subsidiary of the Company completed a privately-marketed CLO transaction, which generated $498.2 million of gross proceeds to Ladder, financing $607.5 million of loans (“Contributed July 2021 Loans”) at an 82% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 18% subordinate and controlling interest in the CLO. The Company retained consent rights over major decisions with respect to the servicing of the Contributed July 2021 Loans, including the right to appoint and replace the special servicer under the CLO. The CLO is a VIE and the Company was the primary beneficiary and, therefore, consolidated the VIE - See Note 9, Consolidated Variable Interest Entities.

On December 2, 2021, a consolidated subsidiary of the Company completed a privately marketed CLO transaction, which generated $566.2 million of gross proceeds to Ladder, financing $729.4 million of loans (“Contributed December 2021 Loans”) at a maximum 77.6% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 15.6% subordinate and controlling interest in the CLO. The Company also held two additional tranches as investments totaling 6.8% interest in the CLO. The Company retained consent rights over major decisions with respect to the servicing of the Contributed December 2021 Loans, including the right to appoint and replace the special servicer under the CLO. The CLO is a VIE and the Company was the primary beneficiary and, therefore, consolidated the VIE - See Note 9, Consolidated Variable Interest Entities.

As of September 30, 2023, the Company had $1.1 billion of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $2.8 million were included in CLO debt as of September 30, 2023.

As of December 31, 2022, the Company had $1.1 billion of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets. Unamortized debt issuance costs of $5.9 million were included in CLO debt as of December 31, 2022.

Borrowings from the Federal Home Loan Bank (“FHLB”)

On July 11, 2012, Tuebor, a consolidated subsidiary of the Company, became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. As of February 19, 2021, pursuant to a final rule adopted by the Federal Housing Finance Agency (the “FHFA”) regarding the eligibility of captive insurance companies, Tuebor’s membership in the FHLB has been terminated, although outstanding advances may remain outstanding until their scheduled maturity dates. Funding for future advance paydowns is expected to be obtained from the natural amortization and/or sales of securities collateral, or from other financing sources. There is no assurance that the FHFA or the FHLB will not take actions that could adversely impact Tuebor’s existing advances. 

74

As of September 30, 2023, Tuebor had $115.0 million of borrowings outstanding, with terms of 0.59 years to 1.00 year (with a weighted average of 0.82 years), interest rates of 5.69% to 5.81% (with a weighted average of 5.74%), and advance rates of 71.7% to 95.7% on eligible collateral. As of September 30, 2023, collateral for the borrowings was comprised primarily of $141.9 million of CMBS.

As of December 31, 2022, Tuebor had $213.0 million of borrowings outstanding, with terms of 0.6 years to 1.75 years (with a weighted average of 1.25 years), and interest rates of 2.74% to 4.70% (with a weighted average of 4.52%). As of December 31, 2022, collateral for the borrowings was comprised of $248.8 million of CMBS and U.S. Agency securities (with advance rates of 71.7% to 95.7%, respectively).

Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval. However, there can be no assurance that we would obtain such approval if sought. Largely as a result of this restriction, approximately $0.8 billion of Tuebor’s member’s capital was restricted from transfer via dividend to Tuebor’s parent without prior approval of state insurance regulators at September 30, 2023. To facilitate intercompany cash funding of operations and investments, Tuebor and its parent maintain regulator-approved intercompany borrowing/lending agreements.

Senior unsecured notes

As of September 30, 2023, the Company had $1.6 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $327.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”) and $636.9 million in aggregate principal of 4.75% senior notes due 2029 (the “2029 Notes,” and collectively with the 2025 Notes and the 2027 Notes, the “Notes”).

As of December 31, 2022, the Company had $1.6 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $344.0 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $650.8 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”) and $649.0 million in aggregate principal of 4.75% senior notes due 2029 (the “2029 Notes,” and collectively with the 2025 Notes and the 2027 Notes, the “Notes”).

LCFH issued the Notes with Ladder Capital Finance Corporation (“LCFC”), as co-issuers on a joint and several basis. LCFC is a 100% owned finance subsidiary of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes. The Company and certain subsidiaries of LCFH currently guarantee the obligations under the Notes and the indenture. The Company believes it was in compliance with all covenants of the Notes as of September 30, 2023 and 2022. The Notes are presented net of unamortized debt issuance costs of $12.5 million and $15.4 million as of September 30, 2023 and December 31, 2022, respectively.

The Notes require interest payments semi-annually in cash in arrears, are unsecured, and are subject to an unencumbered assets to unsecured debt covenant. The Company may redeem the Notes, in whole or in part, at any time, or from time to time, prior to their stated maturity upon not less than 10 nor more than 60 days’ notice, at a redemption price as specified in each respective indenture governing the Notes, plus accrued and unpaid interest, if any, to the redemption date. The board of directors has authorized the Company to repurchase any or all of the Notes from time to time without further approval.

During the nine months ended September 30, 2023, the Company repurchased $16.2 million of the 2025 Notes and recognized a net gain of $1.3 million on extinguishment of debt, $38.9 million of the 2027 Notes and recognized a net gain of $6.8 million on extinguishment of debt, and $12.1 million of the 2029 Notes and recognized a net gain of $2.5 million on extinguishment of debt.

Stock Repurchases

On July 27, 2022, the board of directors authorized the repurchase of $50.0 million of the Company’s Class A common stock from time to time without further approval. This authorization increased the remaining outstanding authorization per the August 4, 2021 authorization from $39.5 million to $50.0 million. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. As of September 30, 2023, the Company has a remaining amount available for repurchase of $44.3 million, which represents 3.4% in the aggregate of its outstanding Class A common stock, based on the

75

closing price of $10.26 per share on such date. Refer to Item 1—“Financial Statements—Note 11, Equity Structure and Accounts” for disclosure of the Company’s repurchase activity.

The following table is a summary of the Company’s repurchase activity of its Class A common stock during the nine months ended September 30, 2023 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2022		$	46,737
Repurchases paid:
March 1 - March 31, 2023	250,000	(2,285)
September 1 - September 30, 2023	19,000	(196)
Authorizations remaining as of September 30, 2023		$	44,256

(1)Amount excludes commissions paid associated with share repurchases.

Dividends

In order for the Company to maintain its qualification as a REIT under the Code, it must annually distribute at least 90% of its taxable income. The Company has paid and in the future intends to declare regular quarterly distributions to its shareholders in aggregating to an amount approximating at least 90% of the REIT’s annual net taxable income. Refer to Item 1 —“Financial Statements and Supplemental Data—Note 10, Equity Structure and Accounts” for disclosure of dividends declared.

Principal repayments on investments

We receive principal amortization on our loans and securities as part of the normal course of our business. Repayment of mortgage loan receivables provided net cash of $531.8 million for the nine months ended September 30, 2023 and $726.0 million for the nine months ended September 30, 2022. Repayment of real estate securities provided net cash of $173.0 million for the nine months ended September 30, 2023, and $136.9 million for the nine months ended September 30, 2022.

Proceeds from securitizations and sales of loans

We sell our conduit mortgage loans to securitization trusts and to other third parties as part of our normal course of business and from time to time will sell balance sheet mortgage loans. There were no proceeds from sales of mortgage loans for the nine months ended September 30, 2023, and there were $29.2 million of proceeds from sales of mortgage loans for the nine months ended September 30, 2022.

Proceeds from the sale of securities

We sell our investments in CMBS, U.S. Agency securities, corporate bonds, U.S. Treasury securities, and equity securities as a part of our normal course of business. Proceeds from sales of securities provided net cash of $17.8 million for the nine months ended September 30, 2023, and $5.5 million for the nine months ended September 30, 2022.

Proceeds from the sale of real estate

There were $13.4 million, net proceeds from sales of real estate for the nine months ended September 30, 2023, and $173.1 million for the nine months ended September 30, 2022.

Other potential sources of financing

In the future, we may also use other sources of financing to fund the acquisition of our assets, including credit facilities, warehouse facilities, repurchase facilities and other secured and unsecured forms of borrowing. These financings may be collateralized or non-collateralized, may involve one or more lenders and may accrue interest at either fixed or floating rates. We may also seek to raise further equity capital or issue debt securities in order to fund our future investments.

76

Contractual obligations

Contractual obligations as of September 30, 2023 were as follows ($ in thousands):

	Contractual Obligations (1)
	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total
Secured financings(2)	$	1,710	$	722,019	$	375,464	$	69,872	$	1,169,065
Senior unsecured notes	—		327,756		611,939		636,919		1,576,614
Interest payable(3)	100,724		173,740		85,180		32,735		392,379
Other funding obligations(4)	86,579		28,546		—		—		115,125
Operating lease obligations	473		4,378		4,450		13,344		22,645
Total	$	189,486	$	1,256,439	$	1,077,033	$	752,870	$	3,275,828

(1)As more fully disclosed in Note 6, Debt Obligations, Net, the allocation of repayments under our committed loan repurchase facilities and Secured Financing Facility is based on the earlier of: (i) the maturity date of each agreement; or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

(2)Total does not include $1.1 billion of consolidated CLO debt obligations and the related debt issuance costs of $2.8 million, as the satisfaction of these liabilities will not require cash outlays from us.

(3)Comprised of interest on secured financings and on senior unsecured notes. For borrowings with variable interest rates, we used the rates in effect as of September 30, 2023 to determine the future interest payment obligations.

(4)Comprised primarily of our off-balance sheet unfunded commitment to provide additional first mortgage loan financing as of September 30, 2023. The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final maturity date, however, we may be obligated to fund these commitments earlier than such date. This amount excludes $149.3 million of future funding commitments that require the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching a pre-determined net operating income which may or may not be achieved.

The table above does not include amounts due under our derivative agreements as those contracts do not have fixed and determinable payments. Our contractual obligations will be refinanced and/or repaid from earnings as well as amortization and sales of our liquid collateral. We have made investments in various unconsolidated ventures of which our maximum exposure to loss from these investments is limited to the carrying value of our investments.

Future Liquidity Needs

In addition to the future contractual obligations above, the Company, in the coming year and beyond, as a part of its normal course of business will require cash to fund unfunded loan commitments and new investments in a combination of balance sheet mortgage loans, conduit loans, real estate investments and securities as it deems appropriate as well as necessary expenses as a part of general corporate purposes. These new investments and general corporate expenses may be funded with existing cash, proceeds from loan and securities payoffs, through financing using our Revolving Credit Facility or loan and security financing facilities, or through additional debt or equity facility raises. The Company has no known material cash requirements other than its contractual obligations in the above table, unfunded commitments and future general corporate expenses.

Unfunded Loan Commitments

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our borrowers. These commitments are not reflected on the consolidated balance sheets. As of September 30, 2023, our off-balance sheet arrangements consisted of $257.5 million of unfunded commitments of mortgage loan receivables held for investment, 58% of which additional funds relate to the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income. As of December 31, 2022, our off-balance sheet arrangements consisted of $321.8 million of unfunded commitments of mortgage loan receivables held for investment to provide additional first mortgage loan financing. Such commitments are subject to our borrowers’ satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring.

77

LIBOR Transition

We have implemented fallback language for our LIBOR-based mortgage loans, bi-lateral committed repurchase facilities and revolving credit facility, including adjustments as applicable to maintain the anticipated economic terms of the existing contracts. As of September 30, 2023, all of our floating rate loans earn interest at a rate indexed Term SOFR; and all of our floating rate debt obligations bear interest indexed to Term SOFR.

Interest Rate Environment

The nature of the Company’s business exposes it to market risk arising from changes in interest rates. Changes, both increases and decreases, in the rates the Company is able to charge its borrowers, the yields the Company is able to achieve in its securities investments, and the Company’s cost of borrowing directly impacts its net income. The Company’s net interest income includes interest from both fixed and floating-rate debt. The percentage of the Company’s assets and liabilities bearing interest at fixed and floating rates may change over time, and asset composition may differ materially from debt composition. Refer to Item 3. Quantitative and Qualitative Disclosures about Market Risk for further disclosures surrounding the impact of rising or falling interest rate on our earnings.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments in certain circumstances that affect amounts reported as assets, liabilities, revenues and expenses. We have established detailed policies and control procedures intended to ensure that valuation methods, including any judgments made as part of such methods, are well controlled, reviewed and applied consistently from period to period. We base our estimates on historical corporate and industry experience and various other assumptions that we believe to be appropriate under the circumstances. The Company’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Company’s financial results. For all of these estimates, we caution that future events rarely develop exactly as forecasted, and therefore, routinely require adjustment.

During 2023, management reviewed and evaluated these critical accounting estimates and believes they are appropriate. Our significant accounting policies are described in Item 1—“Financial Statements and Supplemental Data—Note 2.” The following is a list of accounting policies that require more significant estimates and judgments:

•Current expected credit losses

•Acquisition of real estate

•Impairment or disposal of long lived assets

•Identified intangible assets and liabilities

•Variable interest entities

•Valuation of financial instruments

The following is a summary of accounting policies that require more significant management estimates and judgments:

Provision for Loan Losses

The Company uses a current expected credit loss model (“CECL”) for estimating the provision for loan losses on its loan portfolio. The CECL model requires the consideration of possible credit losses over the life of an instrument and includes a portfolio-based component and an asset-specific component. In compliance with the CECL reporting requirements, the Company supplemented its existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. The Company engages a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with the Company’s loan-level data, fair value of collateral, net operating income of collateral, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level. Where management has determined that the credit loss model does not fully capture certain external factors, including portfolio trends or loan-specific factors, a qualitative adjustment to the reserve is recorded. In addition, interest receivable on loans is not included in the Company’s CECL calculations as the Company performs timely write offs of aged accounts receivable. The Company has made a policy election to write off aged receivables through interest income as opposed to through the CECL provision on its statements of income.

78

Loans for which the borrower or sponsor is experiencing financial difficulty, and where repayment of the loan is expected substantially through the operation or sale of the underlying collateral, are considered collateral dependent loans.

For collateral dependent loans the Company measures expected losses based on the difference between the collateral’s fair value and the amortized cost basis of the loan. When the repayment or satisfaction of the loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated costs to sell the collateral.

The Company generally will use the direct capitalization rate valuation methodology or the sales comparison approach to estimate the fair value of the collateral for collateral dependent loans and in certain cases will obtain external appraisals. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess: (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan at maturity; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including: (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and other market data and ultimately presented to management for approval.

When a debtor is experiencing financial difficulties and a loan is modified, the effect of the modification will be included in the Company’s assessment of the CECL allowance for loan losses. If the Company provides principal forgiveness, the amortized cost basis of the loan is written off against the allowance for loan losses. Generally, when granting concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset concessions granted should conditions impacting the loan improve.

The Company designates a loan as a non-accrual loan generally when: (i) the principal or coupon interest components of loan payments become 90-days past due; or (ii) in the opinion of the Company, it is doubtful the Company will be able to collect all principal and coupon interest due according to the contractual terms of the loan. Interest income on non-accrual loans in which the Company reasonably expects a full recovery of the loan’s outstanding principal balance is recognized when received in cash. Otherwise, income recognition will be suspended and any cash received will be applied as a reduction to the amortized cost basis. A non-accrual loan is returned to accrual status at such time as the loan becomes contractually current and future principal and coupon interest are reasonably assured to be received in accordance with the contractual loan terms. A loan will be written off when management has determined principal and coupon interest is no longer realizable and deemed non-recoverable.

The CECL accounting estimate is subject to uncertainty as a result of changing macro-economic market conditions, as well as the vintage and location of the underlying assets as disclosed in Note 3. Mortgage Loans Receivable. The provision for (release of) loan losses for the three months ended September 30, 2023 and September 30, 2022 was $7.5 million and $1.5 million, respectively, and $19.1 million and $1.4 million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Acquisition of real estate

We generally acquire real estate assets or land and development assets through purchases and may also acquire such assets through foreclosure or deed-in-lieu of foreclosure in full or partial satisfaction of defaulted loans. Purchased properties are classified as real estate, net or land and development, net on our consolidated balance sheets. When we intend to hold, operate or develop the property for a period of at least 12 months, the asset is classified as real estate, net, and if the asset meets the held-for-sale criteria, the asset is classified as real estate held for sale. Upon purchase, the properties are recorded at cost. Foreclosed assets classified as real estate and land and development are initially recorded at their estimated fair value and assets classified as held for sale are recorded at their estimated fair value less costs to sell. The excess of the carrying value of the loan over these amounts is charged-off against the reserve for loan losses. In both cases, upon acquisition, tangible and intangible assets and liabilities acquired are recorded at their relative fair values.

79

Impairment or disposal of long-lived assets

Real estate assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less costs to sell and are included in real estate held for sale on our consolidated balance sheets. The difference between the estimated fair value less costs to sell and the carrying value will be recorded as an impairment charge. Impairment for real estate assets are included in impairment of assets in our consolidated statements of operations. Once the asset is classified as held for sale, depreciation expense is no longer recorded.

We periodically review real estate to be held and used, and land and development assets for impairment in value, whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The asset’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate and land and development assets are recorded in impairment of assets in our consolidated statements of operations.

There were no properties classified as held for sale as of September 30, 2023 and December 31, 2022. We did not record any impairments of real estate for the nine months ended September 30, 2023 or September 30, 2022.

Identified intangible assets and liabilities

We record intangible assets and liabilities acquired at their relative fair values, and determine whether such intangible assets and liabilities have finite or indefinite lives. As of September 30, 2023 and December 31, 2022, all such acquired intangible assets and liabilities have finite lives. We amortize finite lived intangible assets and liabilities over the period which the assets and liabilities are expected to contribute directly or indirectly to the future cash flows of the asset acquired. We review finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If we determine the carrying value of an intangible asset is not recoverable, we will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangibles are recorded in impairment of assets in our consolidated statements of income.

Variable interest entities

We evaluate our investments and other contractual arrangements to determine if our interests constitute variable interests in a variable interest entity (“VIE”) and if we are the primary beneficiary. There is a significant amount of judgment required to determine if an entity is considered a VIE and if we are the primary beneficiary. We first perform a qualitative analysis, which requires certain subjective decisions regarding our assessment, including, but not limited to, which interests create or absorb variability, the contractual terms, the key decision-making powers, impact on the VIE’s economic performance and related party relationships. An iterative quantitative analysis is required if our qualitative analysis proves inconclusive as to whether the entity is a VIE or we are the primary beneficiary and consolidation is required.

Fair value of assets and liabilities

The degree of management judgment involved in determining the fair value of assets and liabilities is dependent upon the availability of quoted market prices or observable market parameters. For financial and nonfinancial assets and liabilities that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not fully available, management judgment is necessary to estimate fair value. In addition, changes in market conditions may reduce the availability of quoted prices or observable data. For example, reduced liquidity in the capital markets or changes in secondary market activities could result in observable market inputs becoming unavailable. Therefore, when market data is not available, we would use valuation techniques requiring more management judgment to estimate the appropriate fair value measurement.

Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Pending Adoption

Our recently adopted accounting pronouncements and recent accounting pronouncements pending adoption are described in Item 1—“Financial Statements and Supplemental Data—Note 2. Significant Accounting Policies.”

80

Reconciliation of Non-GAAP Financial Measures

Distributable earnings

The Company utilizes distributable earnings, a non-GAAP financial measure, as a supplemental measure of our operating performance. We believe distributable earnings assists investors in comparing our operating performance and our ability to pay dividends across reporting periods on a more relevant and consistent basis by excluding from GAAP measures certain non-cash expenses and unrealized results as well as eliminating timing differences related to securitization gains and changes in the values of assets and derivatives. In addition, we use distributable earnings: (i) to evaluate our earnings from operations because management believes that it may be a useful performance measure; and (ii) because our board of directors considers distributable earnings in determining the amount of quarterly dividends.

We define distributable earnings as income before taxes adjusted for: (i) real estate depreciation and amortization; (ii) the impact of derivative gains and losses related to the hedging of assets on our balance sheet as of the end of the specified accounting period; (iii) unrealized gains/(losses) related to our investments in fair value securities and passive interest in unconsolidated ventures; (iv) economic gains on loan sales not recognized under GAAP accounting for which risk has substantially transferred during the period and the exclusion of resultant GAAP recognition of the related economics during the subsequent periods; (v) unrealized provision for loan losses and unrealized real estate impairment; (vi) realized provisions for loan losses and realized real estate impairment; (vii) non-cash stock-based compensation; and (viii) certain transactional items. For the purpose of computing distributable earnings, management recognizes loan and real estate losses as being realized generally in the period in which the asset is sold or the Company determines a decline in value to be non-recoverable and the loss to be nearly certain.

For distributable earnings, we include adjustments for economic gains on loan sales not recognized under GAAP accounting for which risk has substantially transferred during the period and exclude the resultant GAAP recognition of the related economics during the subsequent periods. This adjustment is reflected in distributable earnings when there is a true risk transfer on the mortgage loan transfer and settlement. Historically, this adjustment has represented the impact of economic gains/(discounts) on intercompany loans secured by our own real estate which we had not previously recognized because such gains were eliminated in consolidation. Conversely, if the economic risk was not substantially transferred, no adjustments to net income would be made relating to those transactions for distributable earnings purposes. Management believes recognizing these amounts for distributable earnings purposes in the period of transfer of economic risk is a reasonable supplemental measure of our performance.

As discussed in Note 2 to the consolidated financial statements included elsewhere in this Quarterly Report, we do not designate derivatives as hedges to qualify for hedge accounting and, therefore, any net payments under, or fluctuations in the fair value of, our derivatives are recognized currently in our GAAP income statement. However, fluctuations in the fair value of the related assets are not included in our income statement. We consider the gain or loss on our hedging positions related to assets that we still own as of the reporting date to be “open hedging positions.” While recognized for GAAP purposes, we exclude the results on the hedges from distributable earnings until the related asset is sold and/or the hedge position is considered “closed,” whereupon they would then be included in distributable earnings in that period. These are reflected as “Adjustments for unrecognized derivative results” for purposes of computing distributable earnings for the period. We believe that excluding these specifically identified gains and losses associated with the open hedging positions adjusts for timing differences between when we recognize changes in the fair values of our assets and changes in the fair value of the derivatives used to hedge such assets.

As more fully discussed in Note 2 to the consolidated financial statements included elsewhere in this Quarterly Report, our investments in Agency interest-only securities and equity securities are recorded at fair value with changes in fair value recorded in current period earnings. We believe that excluding these specifically identified gains and losses associated with the fair value securities adjusts for timing differences between when we recognize changes in the fair values of our assets. With regard to securities valuation, distributable earnings includes a decline in fair value deemed to be an impairment for GAAP purposes only if the decline is determined to be nearly certain to be eventually realized. In those cases, an impairment is included in distributable earnings for the period in which such determination was made. Set forth below is an unaudited reconciliation of income (loss) before taxes to distributable earnings (in thousands):

81

	Three Months Ended
	September 30,		June 30,
	2023		2023
Income (loss) before taxes	$	34,342	$	28,138
Net (income) loss attributable to noncontrolling interests in consolidated ventures (GAAP)	124		71
Our share of real estate depreciation, amortization and gain adjustments (1)	(2,016)		6,591
Adjustments for derivative results (2)	(3,969)		(3,161)
Unrealized (gain) loss on fair value securities	42		95
Adjustment for economic gain on loan sales not recognized under GAAP for which risk has been substantially transferred, net of reversal/amortization	(152)		(150)
Adjustment for impairment (3)	7,473		6,881
Non-cash stock-based compensation	3,205		3,046
Distributable earnings	$	39,049	$	41,511

(1)	The following is a reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments ($ in thousands):
		Three Months Ended
		September 30,		June 30,
		2023		2023
	Total GAAP depreciation and amortization	$	7,144	$	7,471
	Less: Depreciation and amortization related to non-rental property fixed assets	(110)		(108)
	Less: Non-controlling interests in consolidated ventures’ share of depreciation and amortization and adjustment for passive interest in unconsolidated ventures	(581)		(319)
	Our share of real estate depreciation and amortization	6,453		7,044
	Accumulated depreciation and amortization on real estate sold (a)	(8,016)		—
	Less: Our share of operating lease income on above/below market lease intangible amortization	(453)		(453)
	Our share of real estate depreciation, amortization and gain adjustments	$	(2,016)	$	6,591
	(a) GAAP gains/losses on sales of real estate include the effects of previously recognized real estate depreciation and amortization. For purposes of distributable earnings, our share of real estate depreciation and amortization is eliminated and, accordingly, the resultant gain/losses also must be adjusted. The following is a reconciliation of the related consolidated GAAP amounts to the amounts reflected in distributable earnings ($ in thousands):
		Three Months Ended
		September 30,		June 30,
		2023		2023
	GAAP realized gain (loss) on sale of real estate, net	$	8,808	$	—
	Adjusted gain/loss on sale of real estate for purposes of distributable earnings	(792)		—
	Accumulated depreciation and amortization on real estate sold	$	8,016	$	—

82

(2)	The following is a reconciliation of GAAP net results from derivative transactions to our derivative result presented in the computation of distributable earnings ($ in thousands):
		Three Months Ended
		September 30,		June 30,
		2023		2023
	Net results from derivative transactions	$	(4,773)	$	(4,149)
	Hedging interest income (expense)	175		380
	Other hedging related activity (a)	629		608
	Adjustments for derivative results	$	(3,969)	$	(3,161)
	(a) Includes unrealized lower of cost or market adjustments of $0.6 million and $0.3 million for the three months ended September 30, 2023 and June 30, 2023, respectively.
(3)	The adjustment reflects the portion of the loan loss provision that management determined to be recoverable. Additional provisions and releases of those provisions are excluded from distributable earnings as a result.

Distributable earnings has limitations as an analytical tool. Some of these limitations are:

•Distributable earnings does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations and is not necessarily indicative of cash necessary to fund cash needs; and

•Other companies in our industry may calculate distributable earnings differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, distributable earnings should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders or any other performance measures calculated in accordance with GAAP, or as an alternative to cash flows from operations as a measure of our liquidity.

In addition, distributable earnings should not be considered to be the equivalent to REIT taxable income calculated to determine the minimum amount of dividends the Company is required to distribute to shareholders to maintain REIT status. In order for the Company to maintain its qualification as a REIT under the Code, we must annually distribute at least 90% of our REIT taxable income. The Company has declared, and intends to continue declaring, regular quarterly distributions to its shareholders in an amount approximating the REIT’s net taxable income.

In the future we may incur gains and losses that are the same as or similar to some of the adjustments in this presentation. Our presentation of distributable earnings should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

83

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For a discussion of current market conditions, refer to Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and to Part II, Item 1A. “Risk Factors.”

Interest Rate Risk

The nature of the Company’s business exposes it to market risk arising from changes in interest rates. Changes, both increases and decreases, in the rates the Company is able to charge its borrowers, the yields the Company is able to achieve in its securities investments, and the Company’s cost of borrowing directly impacts its net income. The Company’s net interest income includes interest from both fixed and floating-rate debt. The percentage of the Company’s assets and liabilities bearing interest at fixed and floating rates may change over time, and asset composition may differ materially from debt composition. Another component of interest rate risk is the effect changes in interest rates will have on the market value of the assets the Company acquires. The Company faces the risk that the market value of its assets will increase or decrease at different rates than that of its liabilities, including its hedging instruments. The Company mitigates interest rate risk through utilization of hedging instruments, primarily interest rate futures agreements. Interest rate futures agreements are utilized to hedge against future interest rate increases on the Company’s borrowings and potential adverse changes in the value of certain assets that result from interest rate changes. The Company generally seeks to hedge assets that have a duration longer than five years, including newly originated conduit first mortgage loans, securities in the Company’s CMBS portfolio if long enough in duration, and most of its U.S. Agency securities portfolio.

The following table summarizes the change in net income for a 12-month period commencing September 30, 2023 and the change in fair value of our investments and indebtedness assuming an increase or decrease of 100 basis points in the relevant benchmark interest rates on September 30, 2023, both adjusted for the effects of our interest rate hedging activities ($ in thousands):

	Projected change in net income(1)		Projected change in portfolio value
Change in interest rate:
Decrease by 1.00%	$	(26,233)	$	2,033
Increase by 1.00%	26,313		(2,010)

(1)    Subject to limits for floors on our floating rate investments and indebtedness.

Market Risk

As market volatility increases or liquidity decreases, the market value of the Company’s assets may be adversely impacted.

The Company’s securities investments are reflected at their estimated fair value. The change in estimated fair value of securities available-for-sale is reflected in accumulated other comprehensive income. The change in estimated fair value of Agency interest-only securities is recorded in current period earnings. The estimated fair value of these securities fluctuates primarily due to changes in interest rates and other factors. Generally, in a rising interest rate environment, the estimated fair value of these securities would be expected to decrease; conversely, in a decreasing interest rate environment, the estimated fair value of these securities would be expected to increase.

The Company’s fixed rate mortgage loan portfolio is subject to the same risks. However, to the extent those loans are classified as held for sale, they are reflected at the lower of cost or market. Otherwise, held for investment mortgage loans are reflected at values equal to the unpaid principal balances net of certain fees, costs and loan loss allowances.

Concentrations of market risk may exist with respect to the Company’s investments. Market risk is a potential loss the Company may incur as a result of change in the fair values of its investments. The Company may also be subject to risk associated with concentrations of investments in geographic regions and industries.

84

Liquidity Risk

Market disruptions may lead to a significant decline in transaction activity in all or a significant portion of the asset classes in which the Company invests and may at the same time lead to a significant contraction in short-term and long-term debt and equity funding sources. A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability of observable transaction data and inputs, may make it more difficult to sell the Company’s investments or determine their fair values. As a result, the Company may be unable to sell its investments, or only be able to sell its investments at a price that may be materially different from the fair values presented. Also, in such conditions, there is no guarantee that the Company’s borrowing arrangements or other arrangements for obtaining leverage will continue to be available or, if available, will be available on terms and conditions acceptable to the Company. In addition, a decline in market value of the Company’s assets may have particular adverse consequences in instances where it borrowed money based on the fair value of its assets. A decrease in the market value of the Company’s assets may result in the lender requiring it to post additional collateral or otherwise sell assets at a time when it may not be in the Company’s best interest to do so. The Company’s captive insurance company subsidiary, Tuebor, is subject to state regulations which require that dividends may only be made with regulatory approval, limiting the Company’s ability to utilize cash held by Tuebor.

Credit Risk

The Company is subject to varying degrees of credit risk in connection with its investments. The Company seeks to manage credit risk by performing deep credit fundamental analyses of potential assets and through ongoing asset management. The Company’s investment guidelines do not limit the amount of its equity that may be invested in any type of its assets; however, investments greater than a certain size are subject to approval by the Risk and Underwriting Committee of the board of directors.

Our portfolio’s low weighted average loan-to-value of 66.7% as of September 30, 2023 reflects significant equity value that our sponsors are motivated to protect through periods of cyclical disruption. While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain investments.

Credit Spread Risk

Credit spread risk is the risk that interest rate spreads between two different financial instruments will change. In general, fixed-rate commercial mortgages and CMBS are priced based on a spread to Treasury or interest rate swaps. The Company generally benefits if credit spreads narrow during the time that it holds a portfolio of mortgage loans or CMBS investments, and the Company may experience losses if credit spreads widen during the time that it holds a portfolio of mortgage loans or CMBS investments. The Company actively monitors its exposure to changes in credit spreads and the Company may enter into credit total return swaps or take positions in other credit-related derivative instruments to moderate its exposure against losses associated with a widening of credit spreads.

Risks Related to Real Estate

Real estate and real estate-related assets, including loans and commercial real estate-related securities, are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; environmental conditions; competition from comparable property types or properties; changes in tenant mix or performance and retroactive changes to building or similar codes and rent regulations. 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 the Company to suffer losses.

85

Covenant Risk

In the normal course of business, the Company enters into loan and securities repurchase agreements and credit facilities with certain lenders to finance its real estate investment transactions. These agreements contain, among other conditions, events of default and various covenants and representations. If such events are not cured by the Company or waived by the lenders, the lenders may decide to curtail or limit extension of credit, and the Company may be forced to repay its advances or loans. In addition, the Company’s Notes are subject to covenants, including maintenance of unencumbered assets, limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type. The Company’s failure to comply with these covenants could result in an event of default, which could result in the Company being required to repay these borrowings before their due date.

We were in compliance with all covenants as described in this Quarterly Report as of September 30, 2023.

Diversification Risk

The assets of the Company are concentrated in the commercial real estate sector. Accordingly, the investment portfolio of the Company may be subject to more rapid change in value than would be the case if the Company were to maintain a wide diversification among investments or industry sectors. Furthermore, even within the commercial real estate sector, the investment portfolio may be relatively concentrated in terms of geography and type of real estate investment. This lack of diversification may subject the investments of the Company to more rapid change in value than would be the case if the assets of the Company were more widely diversified.

Regulatory Risk

Tuebor is subject to state regulation as a captive insurance company. If Tuebor fails to comply with regulatory requirements, it could be subject to loss of its licenses and registration and/or economic penalties.

Effective as of July 16, 2021, LCAM is a registered investment adviser under the Investment Advisors Act of 1940, as amended and currently provides investment advisory services solely to Ladder-sponsored collateralized loan obligation trusts (“CLO Issuers”). The CLO Issuers invest primarily in first mortgage loans secured by commercial real estate originated or acquired by Ladder and in participation interests in such loans. LCAM is entitled to receive a management fee connection with the advisory, administrative and monitoring services it performs for the CLO Issuer as the collateral manager; however, LCAM has waived this fee for so long as it or any of its affiliates serves as collateral manager for the CLO Issuers.

A registered investment adviser is subject to U.S. federal and state laws and regulations primarily intended to benefit its clients. These laws and regulations include requirements relating to, among other things, fiduciary duties to clients, maintaining an effective compliance program, solicitation agreements, conflicts of interest, record keeping and reporting requirements, disclosure requirements, custody arrangements, limitations on agency cross and principal transactions between an investment adviser and its advisory clients and general anti-fraud prohibitions. In addition, these laws and regulations generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict us from conducting our advisory activities in the event we fail to comply with those laws and regulations. Sanctions that may be imposed for a failure to comply with applicable legal requirements include the suspension of individual employees, limitations on our engaging in various advisory activities for specified periods of time, disgorgement, the revocation of registrations, and other censures and fines.

We may become subject to additional regulatory and compliance burdens if our investment adviser subsidiary expands its product offerings and investment platform.

86

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as required by Rules 13a-15 and 15d-15 under the Exchange Act as of September 30, 2023. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective, as of September 30, 2023, to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II

Item 1. Legal Proceedings

From time to time, we may be involved in litigation and claims incidental to the conduct of our business in the ordinary course. Further, certain of our subsidiaries, such as our registered investment adviser and captive insurance company, are subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters. We are not presently a party to any material enforcement proceedings, litigation related to regulatory compliance matters or any other type of material litigation matters. We maintain insurance policies in amounts and with the coverage and deductibles we believe are adequate, based on the nature and risks of our business, historical experience and industry standards.

Item 1A. Risk Factors

There have been no material changes during the three months ended September 30, 2023 to the risk factors in Item 1A in our Annual Report.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

a) Sales of Unregistered Securities

None.

c) Issuer Purchases of Equity Securities

The following table summarizes the share repurchase activity for the three months ended September 30, 2023 ($ in thousands, except per share data and average price paid per share):

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31, 2023	—	$	—	—	$	—
August 1 - August 31, 2023	—	—		—	—
September 1 - September 30, 2023	19,000	10.33		19,000	44,256
Total	19,000	$	10.33	19,000	$	44,256

(1)On July 27, 2022 the Board authorized repurchases up to $50.0 million in aggregate.

87

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

88

Item 6. Exhibits

EXHIBIT INDEX
EXHIBIT NO.	DESCRIPTION
31.1	Certification of Brian Harris pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Paul J. Miceli pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Brian Harris pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Paul J. Miceli pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	101.SCH* iXBRL Schema Document. 101.CAL* iXBRL Calculation Linkbase Document. 101.DEF* iXBRL Definition Linkbase Document. 101.LAB* iXBRL Label Linkbase Document. 101.PRE* iXBRL Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101)

*                                        The certifications attached hereto as Exhibits 32.1 and 32.2 are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

89

SIGNATURES

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

	LADDER CAPITAL CORP
	(Registrant)
Date: October 27, 2023	By:	/s/ BRIAN HARRIS
		Brian Harris
		Chief Executive Officer
Date: October 27, 2023	By:	/s/ PAUL J. MICELI
		Paul J. Miceli
		Chief Financial Officer

90

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, Brian Harris, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Ladder Capital Corp;

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 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 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: October 27, 2023	/s/ Brian Harris
	Brian Harris
	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, Paul J. Miceli, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Ladder Capital Corp;

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 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 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: October 27, 2023	/s/ Paul J. Miceli
	Paul J. Miceli
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION FURNISHED PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Report”) by Ladder Capital Corp (the “Company”), I, Brian Harris, as Chief Executive Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 27, 2023	/s/ Brian Harris
	Brian Harris
	Chief Executive Officer (Principal Executive Officer)

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

EX-32.2

Exhibit 32.2

CERTIFICATION FURNISHED PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Report”) by Ladder Capital Corp (the “Company”), I, Paul J. Miceli, as Chief Financial Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 27, 2023	/s/ Paul J. Miceli
	Paul J. Miceli
	Chief Financial Officer (Principal Financial Officer)

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

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 20, 2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-36299
Entity Registrant Name	Ladder Capital Corp
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	80-0925494
Entity Address, Address Line One	320 Park Avenue,
Entity Address, City or Town	New York,
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10022
City Area Code	212
Local Phone Number	715-3170
Title of 12(b) Security	Class A common stock, $0.001 par value
Trading Symbol	LADR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Smaller Reporting Company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001577670
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Class A Common Stock
Entity Common Stock, Shares Outstanding		126,911,689
Class B Common Stock
Entity Common Stock, Shares Outstanding		0

XML

Consolidated Balance Sheets - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	[1]	$ 798,391	$ 609,078
Restricted cash	[1]	59,523	50,524
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans receivable	[1]	3,371,685	3,885,746
Allowance for credit losses	[1]	(39,575)	(20,755)
Mortgage loan receivables held for sale	[1]	26,272	27,391
Securities	[1]	476,698	587,519
Real estate and related lease intangibles, net	[1]	675,334	700,136
Investments in and advances to unconsolidated ventures	[1]	7,032	6,219
Derivative instruments	[1]	1,817	2,038
Accrued interest receivable	[1]	23,056	24,938
Other assets	[1]	102,909	78,339
Total assets	[1]	5,503,142	5,951,173
Liabilities
Debt obligations, net	[1]	3,793,845	4,245,697
Dividends payable	[1]	31,788	32,000
Accrued expenses	[1]	63,446	68,227
Other liabilities	[1]	75,910	71,688
Total liabilities	[1]	3,964,989	4,417,612
Commitments and contingencies	[1]	0	0
Equity
Additional paid-in capital	[1]	1,842,208	1,826,833
Treasury stock, 1,115,789 and 1,525,429 shares, at cost	[1]	(105,943)	(95,600)
Retained earnings (dividends in excess of earnings)	[1]	(182,637)	(177,005)
Accumulated other comprehensive income (loss)	[1]	(14,879)	(21,009)
Total shareholders’ equity	[1]	1,538,876	1,533,346
Noncontrolling interests in consolidated ventures	[1]	(723)	215
Total equity	[1]	1,538,153	1,533,561
Total liabilities and equity	[1]	5,503,142	5,951,173
Class A Common Stock
Equity
Class A common stock, par value $0.001 per share, 600,000,000 shares authorized; 128,027,478 and 128,027,478 shares issued and 126,911,689 and 126,502,049 shares outstanding as of September 30, 2023 and December 31, 2022, respectively.	[1]	$ 127	$ 127

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Treasury stock (in shares)	1,115,789	1,525,429
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	600,000,000	600,000,000
Common stock, issued (in shares)	128,027,478	128,027,478
Common stock, outstanding (in shares)	126,911,689	126,502,049

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net interest income
Interest income	$ 101,090	$ 77,359	$ 306,715	$ 198,832
Interest expense	62,259	48,471	184,350	138,212
Net interest income (expense)	38,831	28,888	122,365	60,620
Provision for (release of) loan loss reserves, net	7,473	1,501	19,090	1,373
Net interest income (expense) after provision for (release of) loan losses	31,358	27,387	103,275	59,247
Other income (loss)
Real estate operating income	24,761	27,679	73,847	82,678
Net result from mortgage loan receivables held for sale	(629)	796	(1,119)	(2,083)
Realized gain (loss) on securities	23	9	(276)	(75)
Unrealized gain (loss) on securities	(42)	(66)	(20)	(98)
Realized gain (loss) on sale of real estate, net	8,808	4,393	8,808	62,101
Fee and other income	1,829	2,697	6,987	12,238
Net result from derivative transactions	4,773	6,567	6,680	12,381
Earnings from investment in unconsolidated ventures	479	407	913	1,197
Gain on extinguishment of debt	921	0	10,600	685
Total other income (loss)	40,923	42,482	106,420	169,024
Costs and expenses
Compensation and employee benefits	14,285	13,806	50,612	59,165
Operating expenses	4,775	5,143	15,018	15,303
Real estate operating expenses	9,456	10,069	29,071	28,928
Investment related expenses	2,279	1,689	6,460	5,163
Depreciation and amortization	7,144	7,864	22,144	24,764
Total costs and expenses	37,939	38,571	123,305	133,323
Income (loss) before taxes	34,342	31,298	86,390	94,948
Income tax expense (benefit)	3,147	2,613	4,913	3,897
Net income (loss)	31,195	28,685	81,477	91,051
Net (income) loss attributable to noncontrolling interests in consolidated ventures	$ 124	$ (102)	$ 412	$ (8,388)
Earnings per share:
Basic (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Diluted (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Weighted average shares outstanding:
Basic (in shares)	124,730,343	124,278,732	124,652,426	124,393,861
Diluted (in shares)	124,968,545	125,172,180	124,817,335	125,813,280
Class A Common Stock
Costs and expenses
Net income (loss) attributable to Class A common shareholders	$ 31,319	$ 28,583	$ 81,889	$ 82,663
Earnings per share:
Basic (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Diluted (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Weighted average shares outstanding:
Basic (in shares)	124,730,343	124,278,732	124,652,426
Diluted (in shares)	124,968,545	125,172,180	124,817,335	125,813,280

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net income (loss)	$ 31,195	$ 28,685	$ 81,477	$ 91,051
Unrealized gain (loss) on securities, net of tax:
Unrealized gain (loss) on securities, available for sale	1,355	(947)	5,537	(14,749)
Reclassification adjustment for (gain) loss included in net income (loss)	290	(9)	593	50
Total other comprehensive income (loss)	1,645	(956)	6,130	(14,699)
Comprehensive income (loss)	32,840	27,729	87,607	76,352
Comprehensive (income) loss attributable to noncontrolling interest in consolidated ventures	124	(102)	412	(8,388)
Class A Common Stock
Unrealized gain (loss) on securities, net of tax:
Comprehensive income (loss) attributable to Class A common shareholders	$ 32,964	$ 27,627	$ 88,019	$ 67,964

XML

Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total		Class A Common Stock	Class A Common Stock	Class A Common Stock Class A Common Stock	Additional Paid- in-Capital	Treasury Stock	Retained Earnings (Dividends in Excess of Earnings)	Accumulated Other Comprehensive Income (Loss)	Consolidated Ventures
Beginning Balance (in shares) at Dec. 31, 2021					125,453,000
Beginning Balance at Dec. 31, 2021	$ 1,513,619				$ 126	$ 1,795,249	$ (76,324)	$ (207,802)	$ (4,112)	$ 6,482
Increase Decrease in Stockholders' Equity
Contributions	186									186
Distributions	(13,395)									(13,395)
Amortization of equity based compensation	27,787					27,787
Grants of restricted stock (in shares)					2,289,000
Grants of restricted stock	0				$ 2		(2)
Purchase of treasury stock (in shares)					(721,000)
Purchase of treasury stock	(7,279)			$ (1)			(7,278)
Re-issuance of treasury stock (in shares)					596,000
Re-issuance of treasury stock	0			$ 1			(1)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock (in shares)					(955,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	(11,356)				$ (1)		(11,355)
Forfeitures (in shares)					(96,000)
Dividends declared	(82,295)							(82,295)
Net income (loss)	91,051							82,663		8,388
Other comprehensive income (loss)	(14,699)								(14,699)
Ending Balance (in shares) at Sep. 30, 2022					126,566,000
Ending Balance at Sep. 30, 2022	1,503,619				$ 127	1,823,036	(94,960)	(207,434)	(18,811)	1,661
Beginning Balance (in shares) at Jun. 30, 2022					126,834,000
Beginning Balance at Jun. 30, 2022	1,509,709				$ 127	1,819,298	(92,302)	(206,922)	(17,855)	7,363
Increase Decrease in Stockholders' Equity
Distributions	(5,804)									(5,804)
Amortization of equity based compensation	3,738					3,738
Grants of restricted stock (in shares)					7,000
Purchase of treasury stock (in shares)					(266,000)
Purchase of treasury stock	(2,623)						(2,623)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock (in shares)					(3,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	(35)						(35)
Forfeitures (in shares)					(6,000)
Dividends declared	(29,095)							(29,095)
Net income (loss)	28,685							28,583		102
Other comprehensive income (loss)	(956)								(956)
Ending Balance (in shares) at Sep. 30, 2022					126,566,000
Ending Balance at Sep. 30, 2022	1,503,619				$ 127	1,823,036	(94,960)	(207,434)	(18,811)	1,661
Beginning Balance (in shares) at Dec. 31, 2022			126,502,049		126,502,000
Beginning Balance at Dec. 31, 2022	1,533,561	[1]			$ 127	1,826,833	(95,600)	(177,005)	(21,009)	215
Increase Decrease in Stockholders' Equity
Distributions	(526)									(526)
Amortization of equity based compensation	15,375					15,375
Grants of restricted stock (in shares)					1,008,000
Grants of restricted stock	0				$ 1		(1)
Purchase of treasury stock (in shares)					(269,000)
Purchase of treasury stock	(2,481)						(2,481)
Re-issuance of treasury stock (in shares)					410,000
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock (in shares)					(689,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	(7,862)				$ (1)		(7,861)
Forfeitures (in shares)					(50,000)
Dividends declared	(87,521)							(87,521)
Net income (loss)	81,477							81,889		(412)
Other comprehensive income (loss)	6,130								6,130
Ending Balance (in shares) at Sep. 30, 2023			126,911,689		126,912,000
Ending Balance at Sep. 30, 2023	1,538,153	[1]			$ 127	1,842,208	(105,943)	(182,637)	(14,879)	(723)
Beginning Balance (in shares) at Jun. 30, 2023					126,932,000
Beginning Balance at Jun. 30, 2023	1,531,500				$ 127	1,839,003	(105,738)	(184,769)	(16,524)	(599)
Increase Decrease in Stockholders' Equity
Amortization of equity based compensation	3,205					3,205
Purchase of treasury stock (in shares)					(19,000)
Purchase of treasury stock	(197)						(197)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock (in shares)					(1,000)
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	(8)						(8)
Dividends declared	(29,187)							(29,187)
Net income (loss)	31,195							31,319		(124)
Other comprehensive income (loss)	1,645								1,645
Ending Balance (in shares) at Sep. 30, 2023			126,911,689		126,912,000
Ending Balance at Sep. 30, 2023	$ 1,538,153	[1]			$ 127	$ 1,842,208	$ (105,943)	$ (182,637)	$ (14,879)	$ (723)

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023		Sep. 30, 2022
Cash flows from operating activities:
Net income (loss)	$ 81,477		$ 91,051
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
(Gain) loss on extinguishment of debt	(10,600)		(685)
Depreciation and amortization	22,144		24,764
Non-cash operating lease expense	1,457		0
Unrealized (gain) loss on derivative instruments	175		(825)
Unrealized (gain) loss on equity securities	(2)		77
Unrealized (gain) loss on Agency interest-only securities	22		21
Provision for (release of) loan loss reserves	19,090		1,373
Amortization of equity based compensation	15,375		27,787
Amortization of deferred financing costs included in interest expense	9,662		12,152
Amortization of premium/discount on mortgage loan financing included in interest expense	(452)		(649)
Amortization of above- and below-market lease intangibles	(1,360)		(1,318)
(Accretion)/amortization of discount, premium and other fees on loans	(14,971)		(14,932)
(Accretion)/amortization of discount and premium on securities	(796)		(360)
Net result from mortgage loan receivables held for sale	1,119		2,083
Realized (gain) loss on securities	276		75
Realized (gain) loss on sale of real estate, net	(8,808)		(62,101)
Realized (gain) loss on sale of derivative instruments	269		0
(Earnings) loss from investments in unconsolidated ventures in excess of distributions received	(813)		(572)
Insurance proceeds for remediation work due to property damage	473		0
Insurance proceeds used for remediation work due to property damage	(457)		(27)
Origination of mortgage loan receivables held for sale	0		(61,318)
Repayment of mortgage loan receivables held for sale	0		68
Proceeds from sales of mortgage loan receivables held for sale	0		29,153
Change in deferred tax asset (liability)	2,929		137
Changes in operating assets and liabilities:
Accrued interest receivable	1,883		(6,699)
Other assets	6,941		5,288
Accrued expenses and other liabilities	(2,828)		7,673
Net cash provided by (used in) operating activities	122,205		52,216
Cash flows from investing activities:
Origination and funding of mortgage loan receivables held for investment	(61,412)		(1,183,422)
Repayment of mortgage loan receivables held for investment	531,797		725,913
Purchases of securities	(76,557)		(68,039)
Repayment of securities	172,992		136,864
Basis recovery of interest-only securities	3,066		3,924
Proceeds from sales of securities	17,838		5,454
Capital improvements of real estate	(2,640)		(5,657)
Proceeds from sale of real estate	13,391		173,119
Capital distribution from investment in unconsolidated ventures	0		2,284
Proceeds from FHLB stock	4,410		2,250
Purchase of derivative instruments	(223)		(942)
Sale of derivative instruments	0		157
Net cash provided by (used in) investing activities	602,662		(208,095)
Cash flows from financing activities:
Deferred financing costs paid	(2,384)		(8,177)
Proceeds from borrowings under debt obligations	744,339		1,553,068
Repayment and repurchase of borrowings under debt obligations	(1,159,993)		(1,544,204)
Cash dividends paid to Class A common shareholders	(87,732)		(78,454)
Reissuance of treasury stock	0		(1)
Payment of liability assumed in exchange for shares for the minimum withholding taxes on vesting restricted stock	(7,862)		(11,356)
Purchase of treasury stock	(2,481)		(6,158)
Issuance of common stock	0		3
Net cash provided by (used in) financing activities	(516,639)		(108,488)
Net increase (decrease) in cash, cash equivalents and restricted cash	208,228		(264,367)
Cash, cash equivalents and restricted cash at beginning of period	659,602		621,546
Cash, cash equivalents and restricted cash at end of period	867,830		357,179
Non-cash investing and financing activities:
Securities and derivatives purchased, not settled	0		17
Securities and derivatives sold, not settled	0		10
Repurchase of treasury shares, not settled	0		1,121
Repayments in transit of securities (other assets)	0		2
Repayment in transit of mortgage loans receivable held for investment (other assets)	47,070		21,319
Settlement of mortgage loan receivable held for investment by real estate, net	(30,497)		0
Real estate acquired in settlement of mortgage loan receivable held for investment, net	30,400		0
Net settlement of sale of real estate, subject to debt - real estate	(31,292)		0
Net settlement of sale of real estate, subject to debt - debt obligations	31,292		0
Real estate acquired in former unconsolidated venture agreement	0		15,436
Transfer of real estate, net into real estate held for sale	0		(62,814)
Dividends declared, not paid	31,788		31,432
Cash and cash equivalents	798,391	[1]	328,440
Restricted cash	59,523		28,739
Short-term unsettled U.S. Treasury securities classified in other assets on the consolidated balance sheet	9,916		0
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	867,830		357,179
Consolidated Joint Venture
Cash flows from financing activities:
Capital contributed by noncontrolling interests in consolidated ventures	0		186
Capital distributed to noncontrolling interests in consolidated ventures	$ (526)		$ (13,395)

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

ORGANIZATION AND OPERATIONS

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND OPERATIONS

1. ORGANIZATION AND OPERATIONS

Ladder Capital Corp (“Ladder,” “Ladder Capital,” and the “Company”) is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. The Company originates and invests in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. The Company’s investment activities include: (i) the Company’s primary business of originating senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures; (ii) owning and operating commercial real estate, including net leased commercial properties; and (iii) investing in investment grade securities secured by first mortgage loans on commercial real estate. Ladder Capital Corp, as the general partner of Ladder Capital Finance Holdings LLLP (“LCFH” or the “Operating Partnership”), operates the Ladder Capital business through LCFH and its subsidiaries. As of September 30, 2023, Ladder Capital Corp has a 100% economic interest in LCFH and controls the management of LCFH as a result of its ability to appoint its board members. Accordingly, Ladder Capital Corp consolidates the financial results of LCFH and its subsidiaries. In addition, Ladder Capital Corp, through certain subsidiaries which are treated as taxable REIT subsidiaries (each a “TRS”), is indirectly subject to U.S. federal, state and local income taxes. Other than such indirect U.S. federal, state and local income taxes, there are no material differences between Ladder Capital Corp’s consolidated financial statements and LCFH’s consolidated financial statements.

Ladder Capital Corp was formed as a Delaware corporation on May 21, 2013. The Company conducted its initial public offering (“IPO”) which closed on February 11, 2014. The Company used the net proceeds from the IPO to purchase newly-issued limited partnership units (“LP Units”) from LCFH. In connection with the IPO, Ladder Capital Corp also became a holding corporation and the general partner of, and obtained a controlling interest in, LCFH. Ladder Capital Corp’s only business is to act as the general partner of LCFH, and, as such, Ladder Capital Corp indirectly operates and controls all of the business and affairs of LCFH and its subsidiaries. The IPO transactions described herein are referred to as the “IPO Transactions.”

XML

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this report reflects all normal and recurring adjustments necessary for a fair statement of results of operations, financial position and cash flows. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022, which are included in the Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this interim report. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.

The consolidated financial statements include the Company’s accounts and those of its subsidiaries that are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. Refer to Note 9, Consolidated Variable Interest Entities, for further information on the Company’s consolidated variable interest entities. Investments in and advances to unconsolidated ventures represents the Company’s investment in Grace Lake LLC, a VIE. The Company determined that it was not the primary beneficiary of this VIE because the Company has a passive investment and no control of this entity and therefore does not have controlling financial interests in this VIE. The Company’s maximum exposure to loss is limited to its investment in the VIE. The Company has not provided financial support to this unconsolidated VIE that it was not previously contractually required to provide.

Provision for Loan Losses

The Company uses a current expected credit loss model (“CECL”) for estimating the provision for loan losses on its loan portfolio. The CECL model requires the consideration of possible credit losses over the life of an instrument and includes a portfolio-based component and an asset-specific component. In accordance with ASC 326 reporting requirements, the Company supplemented its existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. The Company engages a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with the Company’s loan-level data, fair value of collateral, net operating income of collateral, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level. Where management has determined that the credit loss model does not fully capture certain external factors, including portfolio trends or loan-specific factors, a qualitative adjustment to the reserve, is recorded. In addition, interest receivable on loans is not included in the Company’s CECL calculations as the Company performs timely write off of aged accounts receivable. The Company has made a policy election to write off aged receivables through interest income as opposed to through the CECL provision on its statements of income.

Loans for which the borrower or sponsor is experiencing financial difficulty, and where repayment of the loan is expected substantially through the operation or sale of the underlying collateral, are considered collateral dependent loans.

For collateral dependent loans, the Company measures expected losses based on the difference between the collateral’s fair value and the amortized cost basis of the loan. When the repayment or satisfaction of the loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated costs to sell the collateral.

The Company may use the direct capitalization rate valuation methodology, the discounted cash flow methodology, or the sales comparison approach to estimate the fair value of the collateral for collateral dependent loans and in certain cases will obtain external appraisals and take into account potential sale bids. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess: (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan at maturity; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including: (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and other market data and ultimately presented to management for approval.

When a debtor is experiencing financial difficulties and a loan is modified, the effect of the modification will be included in the Company’s assessment of the CECL allowance for loan losses. If the Company provides principal forgiveness, the amortized cost basis of the loan is written off against the allowance for loan losses. Generally, when modifying loans, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset the effects of modifications granted should conditions impacting the loan improve.

The Company designates a loan as a non-accrual loan generally when: (i) the principal or coupon interest components of loan payments become 90-days past due; or (ii) in the opinion of the Company, it is doubtful the Company will be able to collect all principal and coupon interest due according to the contractual terms of the loan. Interest income on non-accrual loans in which the Company reasonably expects a full recovery of the loan’s outstanding principal balance is recognized when received in cash. Otherwise, income recognition will be suspended and any cash received will be applied as a reduction to the amortized cost basis. A non-accrual loan is returned to accrual status at such time as the loan becomes contractually current and future principal and coupon interest are reasonably assured to be received in accordance with the contractual loan terms. A loan will be written off when management has determined principal and coupon interest is no longer realizable and deemed non-recoverable.

Recently Adopted Accounting Pronouncements

In March 2022, the FASB issued ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, (“ASU 2022-02”). ASU 2022-02 eliminated the recognition and measurement guidance for troubled debt restructuring for creditors that have adopted ASC 326 and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The standard is effective for fiscal years beginning after December 15, 2022. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

Management is evaluating any new accounting standards that have been issued or proposed by FASB and that do not require adoption until a future date. These new standards are not expected to have a material impact on the consolidated financial statements upon adoption.

XML

MORTGAGE LOAN RECEIVABLES

9 Months Ended

Sep. 30, 2023

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

MORTGAGE LOAN RECEIVABLES

3. MORTGAGE LOAN RECEIVABLES

September 30, 2023 ($ in thousands)

	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)(2)		Remaining Maturity (years)(2)(3)
Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,343,499	$	3,334,385		9.75	%	0.8
Mezzanine loans	37,346		37,300			11.53	%	1.1
Total mortgage loans receivable	3,380,845		3,371,685			9.77	%	0.8
Allowance for credit losses	N/A		(39,575)
Total mortgage loan receivables held for investment, net, at amortized cost	3,380,845		3,332,110
Mortgage loan receivables held for sale:
First mortgage loans	31,350		26,272		(4)	4.57	%	8.4
Total	$	3,412,195	$	3,358,382	(5)	9.73	%	0.8

(1)Includes the impact from interest rate floors. Term SOFR rates in effect as of September 30, 2023 are used to calculate weighted average yield for floating rate loans.

(2)Excludes non-accrual loans of $58.4 million. Refer to “Non-Accrual Status” below for further details.

(3)The remaining maturity is calculated based on the initial maturity. The weighted average extended maturity for all loans is 2.0 years.

(4)As a result of rising prevailing rates, the Company recorded a lower of cost or market adjustment as of September 30, 2023. The adjustment was calculated using a 5.94% discount rate.

(5)Net of $9.2 million of deferred origination fees and other items as of September 30, 2023.

As of September 30, 2023, $3.0 billion, or 87.7%, of the outstanding face amount of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates linked to Term SOFR. Of this $3.0 billion, 100.0% of these variable interest rate mortgage loan receivables were subject to interest rate floors. As of September 30, 2023, $31.4 million, or 100%, of the outstanding face amount of our mortgage loan receivables held for sale were at fixed interest rates.

December 31, 2022 ($ in thousands)

	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)(2)(3)		Remaining Maturity (years)(2)(3)
Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,841,315	$	3,819,860		8.83	%	1.3
Mezzanine loans	65,950		65,886			10.62	%	1.6
Total mortgage loans receivable	3,907,265		3,885,746			8.85	%	1.3
Allowance for credit losses	N/A		(20,755)
Total mortgage loan receivables held for investment, net, at amortized cost	3,907,265		3,864,991
Mortgage loan receivables held for sale:
First mortgage loans	31,350		27,391		(4)	4.57	%	9.2
Total	$	3,938,615	$	3,892,382	(5)	8.82	%	1.3

(1)Includes the impact from interest rate floors. December 31, 2022 LIBOR rates are used to calculate weighted average yield for floating rate loans.

(2)Excludes non-accrual loans of $53.8 million.

(3)Includes the impact of one loan with a principal balance of $51.5 million, which was extended through 2026 in January 2023.

(4)As a result of rising prevailing rates, the Company recorded a lower of cost or market adjustment as of December 31, 2022. The adjustment was calculated using a 5.16% discount rate.

(5)Net of $21.5 million of deferred origination fees and other items as of December 31, 2022.

As of December 31, 2022, $3.4 billion, or 87.2%, of the outstanding face amount of our mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates with $2.3 billion linked to LIBOR and $1.1 billion linked to Term SOFR. Of this $3.4 billion, 99% of these variable rate mortgage loan receivables were subject to interest rate floors. As of December 31, 2022, $31.4 million, or 100%, of the outstanding face amount of our mortgage loan receivables held for sale were at fixed interest rates.

For the nine months ended September 30, 2023 and 2022, the activity in our loan portfolio was as follows ($ in thousands):

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans receivable		Allowance for credit losses		Mortgage loan  receivables held for sale
Balance, December 31, 2022	$	3,885,746	$	(20,755)	$	27,391
Origination of mortgage loan receivables (1)	61,412		—		—
Repayment of mortgage loan receivables (2)	(559,947)		—		—
Non-cash disposition of loans via foreclosure (3)	(30,497)		—		—
Net result from mortgage loan receivables held for sale (4)	—		—		(1,119)
Accretion/amortization of discount, premium and other fees	14,971		—		—
Release (addition) of provision for current expected credit loss, net (5)	—		(18,820)		—
Balance, September 30, 2023	$	3,371,685	$	(39,575)	$	26,272

(1)Includes funding of commitments on existing mortgage loans.

(2)Includes $28.2 million of repayments in transit.

(3)Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

(4)Includes unrealized lower of cost or market adjustment and realized gain/loss on loans held for sale.

(5)Refer to “Allowance for Credit Losses” table below for further detail.

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans receivable		Allowance for credit losses		Mortgage loan  receivables held for sale
Balance, December 31, 2021	$	3,553,737	$	(31,752)	$	—
Origination of mortgage loan receivables (1)	1,183,423		—		61,318
Repayment of mortgage loan receivables	(720,597)		—		(68)
Proceeds from sales of mortgage loan receivables	—		—		(29,053)
Net result from mortgage loan receivables held for sale (2)	2,197		—		(4,380)
Accretion/amortization of discount, premium and other fees	14,932		—		—
Charge offs	(14,395)		14,395		—
Release (addition) of provision for current expected credit loss, net (3)	—		(1,117)		—
Balance, September 30, 2022	$	4,019,297	$	(18,474)	$	27,817

(1)Includes funding of commitments on existing mortgage loans.

(2)Represents unrealized lower of cost or market adjustment on loans held for sale.

(3)Refer to “Allowance for Credit Losses” table below for further detail.

Allowance for Credit Losses and Non-Accrual Status ($ in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
Allowance for Credit Losses	2023		2022		2023		2022
Allowance for credit losses at beginning of period	$	32,248	$	16,960	$	20,755	$	31,752
Provision for (release of) current expected credit loss, net (1)	7,327		1,514		18,820		4,222
Charge-offs	—		—		—		(14,395)
Recoveries (2)	—		—		—		(3,105)
Allowance for credit losses at end of period	$	39,575	$	18,474	$	39,575	$	18,474

(1)There were no asset-specific reserves recorded for the nine months ended September 30, 2023 or 2022.

(2)Recoveries are recognized within the consolidated statements of income through “Provision for (release of) loan loss reserves.”

Non-Accrual Status (1)	September 30, 2023(2)(3)		December 31, 2022(2)(4)
Amortized cost basis of loans on non-accrual status, net of asset-specific reserve	$	58,436	$	53,809

(1)As of September 30, 2023 and December 31, 2022, the loans on non-accrual status were greater than 90 days past due and are considered collateral dependent.

(2)Includes two retail loans with an amortized cost basis of $25.8 million and asset-specific reserves of $2.7 million.

(3)Includes one mixed-use loan with an amortized cost basis of $35.3 million, for which the Company determined no asset-specific reserve was necessary.

(4)Includes one mixed-use loan with an amortized cost basis of $30.5 million.

During the nine months ended September 30, 2023, the Company modified two first mortgage loans with a combined amortized cost basis of $106.6 million as of September 30, 2023, or 3.2% of the Company’s mortgage loan receivable portfolio. Together, these modifications resulted in a weighted average extension of 2.3 years, in exchange for terms that included $6.0 million of payments that reduced our amortized cost basis and $6.5 million of reserve replenishments. No principal or interest was forgiven, and Ladder also received a 15% non-controlling common equity interest in one of the properties. The payment structure of both loans was modified to defer a portion of the contractual interest until maturity and the Company is accruing only the current pay component. As of September 30, 2023, both loans are current. Subsequent to the modifications, for the three and nine months ended September 30, 2023, the Company accrued $0.7 million and $1.8 million of interest income related to these two loans, respectively.

Current Expected Credit Loss (“CECL”)

As of September 30, 2023, the Company has a $40.6 million allowance for current expected credit losses, of which $39.6 million pertains to mortgage loan receivables and $1.0 million relates to unfunded commitments. This allowance includes $2.7 million of asset-specific reserves relating to two retail loans. As of September 30, 2023, the Company concluded that none of its other loans required an asset-specific reserve.

As of December 31, 2022, the Company had a $21.5 million allowance for current expected credit losses, of which $20.8 million pertained to mortgage loan receivables and $0.7 million related to unfunded commitments. This allowance included $2.7 million of asset-specific reserves relating to two retail loans with an amortized cost basis of $26.0 million as of December 31, 2022. The Company concluded that none of its other loans are individually impaired as of December 31, 2022.

The total change in provision for loan loss reserves for the three and nine months ended September 30, 2023 was an increase of the provision of $7.5 million and $19.1 million, respectively. The net increase for the three and nine months ended September 30, 2023 represents an increase in the general reserve of loans held for investment of $7.3 million and $18.8 million, respectively, and an increase related to unfunded loan commitments of $146 thousand and $270 thousand, respectively. The increase in provision associated with the general reserve during the three and nine months ended September 30, 2023 is primarily due to adverse changes in macroeconomic market conditions affecting commercial real estate.

The total change in provision for loan loss reserves for the three and nine months ended September 30, 2022 was an increase of the provision of $1.5 million and $1.4 million, respectively. The net increase for the three months ended September 30, 2022 represents an increase in the general reserve of loans held for investment of $1.5 million and a decrease related to unfunded loan commitments of $13 thousand. The net increase for the nine months ended September 30, 2022 represents an increase in the general reserve of loans held for investment of $4.2 million and an increase related to unfunded loan commitments $0.3 million partially offset by a $3.1 million recovery of provision. The increase in the general reserve during the three and nine months ended September 30, 2022 was primarily due to an overall increase in the size of our balance sheet first mortgage portfolio as a result of net originations during that time and adverse changes in macroeconomic conditions.

Loan Portfolio by Geographic Region, Collateral Type and Vintage (amortized cost $ in thousands)

	September 30,		December 31,
Geographic Region	2023		2022
Northeast	$	1,015,365	$	1,191,337
South	1,062,180		1,080,132
Southwest	482,865		675,069
Midwest	451,933		496,640
West	333,515		416,556
Subtotal mortgage loans receivable	3,345,858		3,859,734
Individually impaired loans	25,827		26,012
Total mortgage loans receivable	$	3,371,685	$	3,885,746

Management’s method for monitoring credit is the performance of a loan. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing the Company’s mortgage loan portfolio by collateral type. The primary credit quality indicator is reviewed and updated by management on a quarterly basis. The following tables summarize the amortized cost of the mortgage loan portfolio by collateral type as of September 30, 2023 and December 31, 2022, respectively ($ in thousands):

	Amortized Cost Basis by Origination Year as of September 30, 2023
Collateral Type	2023		2022		2021		2020		2019 and Earlier		Total (1)
Multifamily	$	14,420	$	548,555	$	664,065	$	—	$	—	$	1,227,040
Office	—		79,054		612,104		—		216,424		907,582
Mixed Use	—		200,949		322,957		—		41,392		565,298
Industrial	4,308		38,254		97,441		—		114,752		254,755
Retail	—		12,923		85,760		—		21,802		120,485
Manufactured Housing	—		32,625		82,854		—		—		115,479
Hospitality	—		—		18,574		—		92,226		110,800
Other	—		32,423		11,996		—		—		44,419
Subtotal mortgage loans receivable	18,728		944,783		1,895,751		—		486,596		3,345,858
Individually Impaired loans	—		—		—		—		25,827		25,827
Total mortgage loans receivable (2)	$	18,728	$	944,783	$	1,895,751	$	—	$	512,423	$	3,371,685

	Amortized Cost Basis by Origination Year as of December 31, 2022
Collateral Type	2022		2021		2020		2019		2018 and Earlier		Total
Multifamily	$	702,125	$	722,862	$	—	$	—	$	—	$	1,424,987
Office	78,754		676,431		29,650		58,684		136,512		980,031
Mixed Use	201,777		351,291		26,500		120,300		—		699,868
Industrial	37,616		96,486		—		115,545		—		249,647
Retail	60,089		107,305		—		12,953		9,126		189,473
Hospitality	—		45,416		—		13,843		78,364		137,623
Manufactured Housing	32,515		82,618		—		2,921		—		118,054
Other	32,353		19,898		—		7,800		—		60,051
Subtotal mortgage loans receivable	1,145,229		2,102,307		56,150		332,046		224,002		3,859,734
Individually Impaired loans	—		—		—		—		26,012		26,012
Total mortgage loans receivable (3)	$	1,145,229	$	2,102,307	$	56,150	$	332,046	$	250,014	$	3,885,746

(1)For the three and nine months ended September 30, 2023, there were no write offs.

(2)Not included above is $21.3 million of accrued interest receivable on all loans at September 30, 2023.

(3)Not included above is $23.2 million of accrued interest receivable on all loans at December 31, 2022.

XML

SECURITIES

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

SECURITIES

4. SECURITIES

The Company invests in primarily AAA-rated real estate securities, typically front pay securities, with relatively short duration and significant credit subordination. We continue to actively monitor the impacts of current market conditions on our securities portfolio.

Commercial mortgage-backed securities (“CMBS”), CMBS interest-only securities, U.S. Agency securities, corporate bonds and U.S. Treasury securities are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income. As of September 30, 2023, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.

Government National Mortgage Association (“GNMA”) interest-only, Federal Home Loan Mortgage Corp (“FHLMC”) and equity securities are recorded at fair value with changes in fair value recorded in current period earnings. The following is a summary of the Company’s securities at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

						Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount			Amortized Cost Basis		Gains		Losses (7)		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS	$	484,501		$	483,880	$	136	$	(15,165)	$	468,851	(2)	67	AAA	6.64 %		6.79 %		2.08
CMBS interest-only(3)	888,870		(3)	7,487		145		(114)		7,518		(4)	9	AAA	0.43 %		6.44 %		1.13
GNMA interest-only(5)	43,946		(3)	230		28		(54)		204			14	AAA	0.31 %		5.59 %		3.05
Agency securities	25			25		—		(1)		24			1	AAA	4.00 %		2.70 %		1.18
Total debt securities	$	1,417,342		$	491,622	$	309	$	(15,334)	$	476,597	(6)	91		2.55	%	6.78	%	2.06
Equity securities	N/A			160		—		(39)		121			1	N/A	N/A		N/A		N/A
Allowance for current expected credit losses	N/A			—		—		(20)		(20)
Total securities	$	1,417,342		$	491,782	$	309	$	(15,393)	$	476,698		92

December 31, 2022

						Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount			Amortized Cost Basis		Gains		Losses (7)		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS	$	562,839		$	562,246	$	—	$	(20,913)	$	541,333	(2)	71	AAA	5.22	%	5.32	%	1.06
CMBS interest-only(3)	1,026,195		(3)	10,498		121		(176)		10,443		(4)	10	AAA	0.41	%	3.65	%	1.45
GNMA interest-only(5)	45,369		(3)	285		17		(21)		281			14	AAA	0.31	%	4.23	%	3.30
Agency securities	36			36		—		(1)		35			1	AAA	4.00	%	2.70	%	1.54
U.S. Treasury securities	36,000			35,374		6		(52)		35,328			10	AAA	N/A		4.17	%	0.60
Total debt securities	$	1,670,439		$	608,439	$	144	$	(21,163)	$	587,420	(6)	106		2.06	%	5.29	%	1.07
Equity securities	N/A			160		—		(41)		119			1	N/A	N/A		N/A		N/A
Allowance for current expected credit losses	N/A			—		—		(20)		(20)
Total real estate securities	$	1,670,439		$	608,599	$	144	$	(21,224)	$	587,519		107

(1)Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple rating agencies, the highest rating is used. The ratings provided were determined by third-party rating agencies. The rates may not be current and are subject to change (including the assignment of a “negative outlook” or “credit watch”) at any time.

(2)As of September 30, 2023 and December 31, 2022, includes $9.0 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (“Dodd-Frank Act”) and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(3)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(4)As of September 30, 2023 and December 31, 2022, includes $0.3 million and $0.4 million, respectively of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(5)GNMA interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s GNMA interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company has elected to account for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on securities in the consolidated statements of income.

(6)The Company’s investments in debt securities represent an ownership interest in unconsolidated VIEs. The Company’s maximum exposure to loss from these unconsolidated VIEs is the amortized cost basis of the securities which represents the purchase price of the investment adjusted by any unamortized premiums or discounts as of the reporting date.

(7)Based on the Company’s analysis, including review of interest rate changes and current levels of subordination, among other factors, the unrealized loss positions are determined to be due to market factors other than credit.

The following summarizes the carrying value of the Company’s debt securities by remaining maturity based upon expected cash flows at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	109,188	$	346,226	$	13,437	$	—	$	468,851
CMBS interest-only	2,736		4,782		—		—		7,518
GNMA interest-only	13		100		91		—		204
Agency securities	—		24		—		—		24
Total securities (1)	$	111,937	$	351,132	$	13,528	$	—	$	476,597

(1)Excluded from the table above are $0.1 million of equity securities and $(20.0) thousand of allowance for current expected credit losses.

December 31, 2022

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	346,272	$	195,061	$	—	$	—	$	541,333
CMBS interest-only	937		9,506		—		—		10,443
GNMA interest-only	40		111		130		—		281
Agency securities	—		35		—		—		35
U.S. Treasury securities	32,451		2,877		—		—		35,328
Total securities (1)	$	379,700	$	207,590	$	130	$	—	$	587,420

(1)Excluded from the table above are $0.1 million of equity securities and $(20.0) thousand of allowance for current expected credit losses.

During the three and nine months ended September 30, 2023, the Company did not sell any equity securities. During the three and nine months ended September 30, 2022, the Company sold $0.7 million and $1.2 million of equity securities, respectively.

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

5. REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

The Company’s real estate assets were comprised of the following ($ in thousands):

	September 30, 2023		December 31, 2022
Land	$	167,158	$	158,802
Building	605,499		625,655
In-place leases and other intangibles	115,708		114,687
Undepreciated real estate and related lease intangibles	888,365		899,144
Less: Accumulated depreciation and amortization	(213,031)		(199,008)
Real estate and related lease intangibles, net(1)	$	675,334	$	700,136
Below market lease intangibles, net (other liabilities)(2)	$	(29,390)	$	(30,892)

(1)There was unencumbered real estate of $104.8 million and $140.3 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Below market lease intangibles is net of $15.2 million and $13.6 million of accumulated amortization as of September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023 and December 31, 2022, the Company held foreclosed properties included in real estate and related lease intangibles, net with carrying values of $94.4 million and $103.1 million, respectively.

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense(1)	$	5,803	$	6,310	$	18,146	$	19,396
Amortization expense	1,341		1,554		3,998		5,368
Total real estate depreciation and amortization expense	$	7,144	$	7,864	$	22,144	$	24,764

(1)Depreciation expense on the consolidated statements of income also includes $0.1 million and $0.3 million of depreciation on corporate fixed assets for the three and nine months ended September 30, 2023, respectively, and $8 thousand for the nine months ended September 30, 2022.

The Company’s intangible assets are comprised of in-place leases, above market leases and other intangibles. The following tables present additional detail related to our intangible assets ($ in thousands):

	September 30, 2023		December 31, 2022
Gross intangible assets(1)	$	115,708	$	114,687
Accumulated amortization	53,938		49,725
Net intangible assets	$	61,770	$	64,962

(1)Includes $2.8 million of unamortized above market lease intangibles, which are included in real estate and related lease intangibles, net on the consolidated balance sheets as of September 30, 2023 and December 31, 2022.

The following table presents increases/reductions in operating lease income related to the amortization of above or below market leases recorded by the Company ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Reduction in operating lease income for amortization of above market lease intangibles acquired	$	(73)	$	(76)	$	(216)	$	(229)
Increase in operating lease income for amortization of below market lease intangibles acquired	526		513		1,576		1,547
Total	$	453	$	437	$	1,360	$	1,318

The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of September 30, 2023 ($ in thousands):

Period Ending December 31,	Increase/(Decrease) to Operating Lease Income		Amortization Expense
2023 (last three months)	$	448	$	1,430
2024	1,788		5,718
2025	1,773		5,509
2026	1,736		4,519
2027	1,699		4,332
Thereafter	19,152		37,471
Total	$	26,596	$	58,979

Rent Receivables

There were $0.9 million and $1.3 million of rent receivables included in other assets on the consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

Operating Lease Income & Tenant Reimbursements

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at September 30, 2023 ($ in thousands):

Period Ending December 31,	Amount
2023 (last three months)	$	15,516
2024	57,029
2025	52,063
2026	50,712
2027	49,252
Thereafter	206,027
Total	$	430,599

Tenant reimbursements, which consist of real estate taxes and other municipal charges paid by the Company, which were reimbursable by our tenants pursuant to the terms of the lease agreements, were $1.4 million and $3.5 million for the three and nine months ended September 30, 2023, respectively, and $1.4 million and $3.9 million for the three and nine months ended September 30, 2022, respectively. Tenant reimbursements are included in operating lease income on the Company’s consolidated statements of income.

Acquisitions

The Company acquired the following properties during the nine months ended September 30, 2023 ($ in thousands):

Acquisition Date		Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
September 2023	(2)	Mixed use	New York, NY	$	30,400	100.0%
Total real estate acquisitions				$	30,400

(1)Properties were consolidated as of acquisition date.

(2)In September 2023, the Company acquired a mixed use portfolio consisting of four properties in New York, NY via foreclosure. The portfolio served as collateral for a mortgage loan receivable held for investment. The Company obtained a third-party appraisal of the property. The $30.4 million fair value was determined by using the sales comparison and income approaches. The appraiser utilized a terminal capitalization rate of 5.5%. There was no gain or loss resulting from the foreclosure of the loan. The key inputs used to determine fair value were determined to be Level 3 inputs.

The Company acquired the following properties during the nine months ended September 30, 2022 ($ in thousands):

Acquisition Date		Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
February 2022	(2)	Apartments	New York, NY	$	15,436	100.0%
Total real estate acquisitions				$	15,436

(1)Properties were consolidated as of acquisition date.

(2)In February 2022, the Company acquired, via change in control, a previously held interest in a non-controlling equity investment in a mixed use property with one remaining residential condo unit and one remaining retail condo unit in New York, New York. The carrying value of the property at the time of change in control was $15.4 million, which was determined to be fair value. The fair value of the remaining condo unit was determined based on comparable sales in the building and the value of the remaining retail unit was valued utilizing a direct capitalization rate of 5.5%. The key inputs used to determine fair value were determined to be Level 3 inputs.

The Company allocates purchase consideration based on relative fair values, and real estate acquisition costs are capitalized as a component of the cost of the assets acquired for asset acquisitions. During the nine months ended September 30, 2023 and September 30, 2022, all acquisitions were determined to be asset acquisitions.

Sales

The Company sold the following properties during the nine months ended September 30, 2023 ($ in thousands):

Sales Date	Type	Primary Location(s)		Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties
August 2023	Hotel	San Diego, CA	(1)	$	43,335	$	34,526	$	8,808	1
Totals				$	43,335	$	34,526	$	8,808

(1)Included within sales proceeds is $31.3 million of mortgage financing that was assumed by the buyer.

The Company sold the following properties during the nine months ended September 30, 2022 ($ in thousands):

Sales Date	Type	Primary Location(s)		Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties
March 2022	Office	Ewing, NJ		$	38,694	$	24,175	$	14,519	1
March 2022	Warehouse	Conyers, GA		40,752		26,116		14,636		1
June 2022	Apartments	Stillwater, OK		23,314		18,032		5,283		1
June 2022	Apartments	Miami, FL		60,856		37,585		23,270		1
September 2022	Retail	Wichita, KS		9,503		5,110		4,393		1
Totals			(1)	$	173,119	$	111,018	$	62,101

(1)Excludes $3.7 million of prepayment costs upon repayment of the mortgage financing in connection with the sales that is recorded within interest expense on the consolidated statement of income, such amount was correspondingly paid by the buyer and received by the Company as part of the sale and recorded in fee and other income on the consolidated statement of income.

XML

DEBT OBLIGATIONS, NET

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

DEBT OBLIGATIONS, NET

6. DEBT OBLIGATIONS, NET

The details of the Company’s debt obligations at September 30, 2023 and December 31, 2022 are as follows ($ in thousands):

September 30, 2023

Debt Obligations	Committed / Principal Amount		Carrying Value of Debt Obligations			Committed but Unfunded		Interest Rate at September 30, 2023(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility	$	500,000	$	256,170		$	243,830	7.07%	—	7.47%	9/27/2025	(2)	(3)	$	351,242	$	351,242
Committed Loan Repurchase Facility	300,000		141,681			158,319		7.18%	—	8.33%	12/19/2023	(4)	(5)	222,705		219,355
Committed Loan Repurchase Facility	142,000		139,162			2,838		7.03%	—	7.57%	4/30/2024	(6)	(3)	65,027		65,027
Committed Loan Repurchase Facility	100,000		77,959			22,041		6.73%	—	7.23%	1/2/2024	(7)	(3)	103,831		103,831
Committed Loan Repurchase Facility	100,000		—			100,000		—%		—%	1/22/2024	(8)	(5)	—		—
Total Committed Loan Repurchase Facilities	1,142,000		614,972			527,028								742,805		739,455
Committed Securities Repurchase Facility	100,000		—			100,000		—%	—	—%	5/27/2024	N/A	(9)	—		—
Uncommitted Securities Repurchase Facility	N/A (10)		1,646			N/A (10)		6.54%	—	7.49%	10/19/2023	N/A	(9)	8,902		8,902		(11)
Total Repurchase Facilities	1,242,000		616,618			627,028								751,707		748,357
Revolving Credit Facility	323,850		—			323,850		—%	—	—%	7/27/2024	(12)	N/A (13)	N/A (13)		N/A (13)
Mortgage Loan Financing	437,448		437,739			—		4.39%	—	9.03%	2024-2031 (14)	N/A	(15)	478,428		624,663		(16)
CLO Debt	1,063,249		1,060,417		(17)	—		6.65%	—	9.10%	2024-2026 (18)	N/A	(3)	1,272,832		1,272,832
Borrowings from the FHLB	115,000		115,000			—		5.69%	—	5.81%	2023-2024	N/A	(19)	141,853		141,853		(20)
Senior Unsecured Notes	1,576,614		1,564,071		(21)	—		4.25%	—	5.25%	2025-2029	N/A	N/A (22)	N/A (22)		N/A (22)
Total Debt Obligations, Net	$	4,758,161	$	3,793,845		$	950,878							$	2,644,820	$	2,787,705

(1)Interest rates on floating rate debt reflect the applicable index in effect as of September 30, 2023.

(2)Two 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)Two additional 364-day periods at Company’s option.

(5)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(6)Three additional 12-month extension periods at Company’s option.

(7)One additional 12-month extension periods at Company’s option. No new advances are permitted.

(8)Two additional 12-month extension periods at Company's option. No new advances permitted during the final 12-month period.

(9)Commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(10)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(11)Includes $1.9 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(12)Three additional 12-month periods at Company’s option.

(13)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(14)Anticipated repayment dates.

(15)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(16)Using undepreciated carrying value of commercial real estate to approximate fair value.

(17)Presented net of unamortized debt issuance costs of $2.8 million at September 30, 2023.

(18)Represents the estimated maturity date based on the remaining reinvestment period and underlying loan maturities.

(19)Investment grade commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(20)Includes $2.3 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(21)Presented net of unamortized debt issuance costs of $12.5 million at September 30, 2023.

(22)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

December 31, 2022

Debt Obligations	Committed / Principal Amount		Carrying Value of Debt Obligations			Committed but Unfunded		Interest Rate at December 31, 2022(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility(2)	$	500,000	$	318,983		$	181,017	6.07%	—	6.57%	9/27/2025	(2)	(3)	$	428,477	$	429,276
Committed Loan Repurchase Facility	100,000		—			100,000		—%	—	—%	2/26/2023	(4)	(5)	—		—
Committed Loan Repurchase Facility	300,000		157,558			142,442		6.19%	—	7.07%	12/19/2023	(6)	(7)	244,102		244,102
Committed Loan Repurchase Facility	100,000		47,415			52,585		6.00%	—	6.00%	4/30/2024	(8)	(3)	63,307		63,307
Committed Loan Repurchase Facility	100,000		77,959			22,041		5.74%	—	6.24%	1/3/2023	(2)	(3)	103,393		103,393
Committed Loan Repurchase Facility	100,000		—			100,000		—%		—%	1/22/2024	(9)	(7)	—		—
Committed Loan Repurchase Facility	100,000		14,979			85,021		7.07%	—	7.07%	7/14/2023	(10)	(11)	21,206		21,206
Total Committed Loan Repurchase Facilities	1,300,000		616,894			683,106								860,485		861,284
Committed Securities Repurchase Facility(2)	100,000		8,640			91,360		5.04%	—	5.29%	5/27/2023	N/A	(12)	10,023		10,023
Uncommitted Securities Repurchase Facility	N/A (13)		222,328			N/A (13)		4.73%	—	6.00%	3/2/2023	N/A	(12)	247,351		247,351		(14)
Total Repurchase Facilities	1,400,000		847,862			774,466								1,117,859		1,118,658
Revolving Credit Facility	323,850		—			323,850		—%	—	—%	7/27/2023	(15)	N/A (16)	N/A (16)		N/A (16)
Mortgage Loan Financing	497,454		497,991			—		4.25%	—	8.03%	2023 - 2031(17)	N/A	(18)	559,885		710,977		(19)
CLO Debt	1,064,365		1,058,462		(20)	—		5.52%	—	7.97%	2024 - 2026(21)	N/A	(3)	1,308,654		1,308,654
Borrowings from the FHLB	213,000		213,000			—		2.74%	—	4.70%	2023 - 2024	N/A	(22)	248,806		248,806		(23)
Senior Unsecured Notes	1,643,794		1,628,382		(24)	—		4.25%	—	5.25%	2025 - 2029	N/A	N/A (25)	N/A (25)		N/A (25)
Total Debt Obligations, Net	$	5,142,463	$	4,245,697		$	1,098,316							$	3,235,204	$	3,387,095

(1)LIBOR and Term SOFR rates in effect as of December 31, 2022 are used to calculate interest rates for floating rate debt, as applicable.

(2)Two 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)One additional 12-month period at Company’s option.

(5)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(6)Two additional 364-day periods at Company’s option.

(7)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(8)Three additional 12-month extension periods at Company’s option.

(9)Two additional 12-month extension periods at Company's option. No new advances are permitted during the final 12-month period.

(10)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(11)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(12)Commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(13)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(14)Includes $2.0 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(15)Four additional 12-month periods at Company’s option.

(16)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(17)Anticipated repayment dates.

(18)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(19)Using undepreciated carrying value of commercial real estate to approximate fair value.

(20)Presented net of unamortized debt issuance costs of $5.9 million at December 31, 2022.

(21)Represents the estimated maturity date based on the remaining reinvestment period and underlying loan maturities.

(22)Investment grade commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(23)Includes $6.6 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(24)Presented net of unamortized debt issuance costs of $15.4 million at December 31, 2022.

(25)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

Committed Loan and Securities Repurchase Facilities

The Company has entered into five committed master repurchase agreements, as outlined in the September 30, 2023 table above, totaling $1.1 billion of credit capacity in order to finance its lending activities. Assets pledged as collateral under these facilities are limited to whole mortgage loans or participation interests in mortgage loans collateralized by first liens on commercial properties and mezzanine debt. The Company also has a term master repurchase agreement with a major U.S. bank to finance CMBS totaling $100 million. The Company’s repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, maximum leverage ratios, and minimum fixed charge coverage ratios. The Company was in compliance with all covenants as of September 30, 2023 and December 31, 2022.

The Company has the option to extend some of the current facilities subject to a number of conditions, including satisfaction of certain notice requirements, the absence of an event of default, and the absence of a margin deficit, all as defined in the repurchase facility agreements. The lenders have sole discretion with respect to the inclusion of collateral in these facilities and the determination of the market value of the collateral on a daily basis, to be exercised on a good faith basis, and have the right in certain cases to require additional collateral, a full and/or partial repayment of the facilities (margin call), or a reduction in unused availability under the facilities, sufficient to rebalance the facilities if the estimated market value of the included collateral declines.

As of September 30, 2023, the Company had total debt obligations of $616.6 million outstanding pursuant to repurchase agreements with four counterparties. As of September 30, 2023 no counterparties held collateral that exceeded the amounts borrowed under the related repurchase agreements by more than $153.8 million, or 10% of our total equity. As of September 30, 2023, the weighted average haircut, or the percent of collateral value in excess of the loan amount, under our repurchase agreements was 18%. There have been no significant fluctuations in haircuts across asset classes on our repurchase facilities.

On October 3, 2023, the Company executed an amendment to one of its loan repurchase agreements to, among other things, increase the maximum funding capacity from $100.0 million to $200.0 million and extend the maximum term of the facility including extension options to October 3, 2027.

Revolving Credit Facility

The Company’s Revolving Credit Facility provides for an aggregate maximum borrowing amount of $323.9 million, including a $25.0 million sublimit for the issuance of letters of credit. The Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. On July 27, 2022, the Company amended its Revolving Credit Facility to increase the maximum borrowing amount to $323.9 million, extend the final maturity date to July 27, 2027, and reduce the interest rate to the sum of one-month Term SOFR plus a fixed margin of 2.50%. The amendment also provides for reductions in the fixed margin upon the achievement of investment grade credit ratings. As of September 30, 2023, the Company had no outstanding borrowings on the Revolving Credit Facility, but still maintains the ability to draw $323.9 million. During the three months ended September 30, 2023, the Company exercised one of the four remaining one-year extension options, which extended the maturity date of the Revolving Credit Facility to July 27, 2024.

The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

The Company is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions. In addition, the Company is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities. The Company’s ability to borrow is dependent on, among other things, compliance with the financial covenants. The Revolving Credit Facility contains customary events of default, including non-payment of principal or interest, fees or other amounts, failure to perform or observe covenants, cross-default to other indebtedness, the rendering of judgments against the Company or certain of our subsidiaries to pay certain amounts of money and certain events of bankruptcy or insolvency.

Debt Issuance Costs

As of September 30, 2023 and December 31, 2022, the amounts of unamortized costs relating to our master repurchase facilities and Revolving Credit Facility were $4.0 million and $5.0 million, respectively, and are included in other assets in the consolidated balance sheets.

Uncommitted Securities Repurchase Facilities

The Company has also entered into multiple uncommitted master repurchase agreements collateralized by real estate securities with several counterparties. The borrowings under these agreements have typical advance rates between 75% and 95% of the fair value of collateral, which is primarily AAA-rated securities.

Mortgage Loan Financing

These non-recourse debt agreements provide for secured financing at rates ranging from 4.39% to 9.03%, and, as of September 30, 2023, have anticipated maturity dates between 2024 - 2031, with an average term of 3.12 years. These mortgage loans have carrying amounts of $437.7 million and $498.0 million, net of unamortized premiums of $2.0 million and $2.4 million as of September 30, 2023 and December 31, 2022, respectively, representing proceeds received upon financing greater than the contractual amounts due under these agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $0.5 million and $0.4 million of premium amortization, which decreased interest expense for the nine months ended September 30, 2023 and 2022, respectively. The mortgage loans are collateralized by real estate and related lease intangibles, net, of $478.4 million and $559.9 million as of September 30, 2023 and December 31, 2022, respectively. During each of the nine months ended September 30, 2023 and September 30, 2022, the Company did not execute any new term debt agreements to finance properties in its real estate portfolio.

Collateralized Loan Obligations (“CLO”) Debt

On July 13, 2021, a consolidated subsidiary of the Company completed a privately-marketed CLO transaction, which generated $498.2 million of gross proceeds to Ladder, financing $607.5 million of loans (“Contributed July 2021 CLO Loans”) at an 82% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 18% subordinate and controlling interest in the CLO. The Company retained consent rights over major decisions with respect to the servicing of the Contributed July 2021 CLO Loans, including the right to appoint and replace the special servicer under the CLO. The CLO is a VIE and the Company is the primary beneficiary and, therefore, consolidated the VIE - Refer to Note 9, Consolidated Variable Interest Entities.

On December 2, 2021, a consolidated subsidiary of the Company completed a privately marketed CLO transaction, which generated $566.2 million of gross proceeds to Ladder, financing $729.4 million of loans (“Contributed December 2021 CLO Loans”) at a maximum 77.6% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 15.6% subordinate and controlling interest in the CLO. The Company also held two additional tranches as investments totaling 6.8% interest in the CLO. The Company retained consent rights over major decisions with respect to the servicing of the Contributed December 2021 CLO Loans, including the right to appoint and replace the special servicer under the CLO. The CLO is a VIE and the Company is the primary beneficiary and, therefore, consolidated the VIE - Refer to Note 9, Consolidated Variable Interest Entities.

As of September 30, 2023, the Company had $1.1 billion of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets, which includes unamortized debt issuance costs of $2.8 million.

Borrowings from the Federal Home Loan Bank (“FHLB”)

On July 11, 2012, Tuebor, a consolidated subsidiary of the Company, became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. As of February 19, 2021, pursuant to a final rule adopted by the Federal Housing Finance Agency (the “FHFA”) regarding the eligibility of captive insurance companies, Tuebor’s membership in the FHLB has been terminated, although outstanding advances may remain outstanding until their scheduled maturity dates. Funding for future advance paydowns is expected to be obtained from the natural amortization and/or sales of securities collateral, or from other financing sources. There is no assurance that the FHFA or the FHLB will not take actions that could adversely impact Tuebor’s existing advances. 

As of September 30, 2023, Tuebor had $115.0 million of borrowings outstanding, with terms of 0.59 years to 1.00 year (with a weighted average of 0.82 years), and interest rates of 5.69% to 5.81% (with a weighted average of 5.74%). As of September 30, 2023, collateral for the borrowings was comprised of $141.9 million of CMBS and U.S. Agency securities (with advance rates of 71.7% to 95.7%).

Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval. However, there can be no assurance that we would obtain such approval if sought. Largely as a result of this restriction, approximately $838.1 million of Tuebor’s member’s capital was restricted from transfer via dividend to Tuebor’s parent without prior approval of state insurance regulators at September 30, 2023. To facilitate intercompany cash funding of operations and investments, Tuebor and its parent maintain regulator-approved intercompany borrowing/lending agreements.

Senior Unsecured Notes

As of September 30, 2023, the Company had $1.6 billion of unsecured corporate bonds outstanding. These unsecured financings were comprised of $327.8 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”) and $636.9 million in aggregate principal of 4.75% senior notes due 2029 (the “2029 Notes,” collectively with the 2025 Notes and the 2027 Notes, the “Notes”).

During the three months ended September 30, 2023, the Company repurchased $0.5 million of the 2027 Notes and recognized a net gain of $0.1 million on extinguishment of debt, and repurchased $4.8 million of the 2029 Notes and recognized a net gain of $0.9 million on extinguishment of debt.

During the nine months ended September 30, 2023, the Company repurchased $16.2 million of the 2025 Notes and recognized a net gain of $1.3 million on extinguishment of debt, repurchased $38.9 million of the 2027 Notes and recognized a net gain of $6.8 million on extinguishment of debt, and repurchased $12.1 million of the 2029 Notes and recognized a net gain of $2.5 million on extinguishment of debt.

LCFH issued the Notes with Ladder Capital Finance Corporation (“LCFC”), as co-issuers on a joint and several basis. LCFC is a 100% owned finance subsidiary of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes. The Company and certain subsidiaries of LCFH currently guarantee the obligations under the Notes and the indenture. The Company was in compliance with all covenants of the Notes as of September 30, 2023 and 2022.

The Notes require interest payments semi-annually in cash in arrears, are unsecured, and are subject to an unencumbered assets to unsecured debt covenant. The Company may redeem the Notes prior to their stated maturity, in whole or in part, at any time or from time to time, with required notice and at a redemption price as specified in each respective indenture governing the Notes, plus accrued and unpaid interest, if any, to the redemption date. The board of directors has authorized the Company to repurchase any or all of the Notes from time to time without further approval.

Combined Maturity of Debt Obligations

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands): 

Period ending December 31,	Borrowings by Maturity(1)
2023 (last three months)	$	1,710
2024	417,827
2025	631,948
2026	89,161
2027	898,242
Thereafter	706,791
Subtotal	2,745,679
Debt issuance costs included in senior unsecured notes	(12,543)
Debt issuance costs included in mortgage loan financings	(1,677)
Premiums included in mortgage loan financings(2)	1,968
Total (3)	$	2,733,427

(1)The allocation of repayments under our committed loan repurchase facilities is based on the earlier of: (i) the maturity date of each agreement; or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

(2)Represents deferred gains on intercompany mortgage loans, secured by our own real estate, sold into securitizations. These premiums are amortized as a reduction to interest expense.

(3)Total does not include $1.1 billion of consolidated CLO debt obligations and the related debt issuance costs of $2.8 million, as the satisfaction of these liabilities will be paid through cash flow from loan collateral including amortization and will not require cash outlays from us.

Financial Covenants

The Company’s debt facilities are subject to covenants that require the Company to maintain a minimum level of total equity. Largely as a result of this restriction, approximately $871.4 million of the total equity is restricted from payment as a dividend by the Company at September 30, 2023.

The Company was in compliance with all covenants as of September 30, 2023.

LIBOR Transition

We have implemented fallback language for our LIBOR-based mortgage loans, bi-lateral committed repurchase facilities and revolving credit facility, including adjustments as applicable to maintain the anticipated economic terms of the existing contracts. As of September 30, 2023, all of our floating rate debt obligations bear interest indexed to Term SOFR.

XML

DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

7. DERIVATIVE INSTRUMENTS

The Company primarily uses derivative instruments to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. The following is a breakdown of the derivatives outstanding as of September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

				Fair Value				Remaining Maturity (years)
Contract Type	Notional			Asset(1)		Liability(1)
Caps
1 Month Term SOFR	$	90,000		$	1,520	$	—	0.88
Futures
5-year Treasury-Note Futures	20,500			32		—		0.25
10-year Treasury-Note Futures	51,400			81		—		0.25
Total futures	71,900			113		—
Options
Options	N/A		(2)	184		—		0.24
Total derivatives	$	161,900		$	1,817	$	—

(1)Shown as derivative instruments in the accompanying consolidated balance sheets.

(2)The Company held 556 options contracts as of September 30, 2023.

December 31, 2022

				Fair Value				Remaining Maturity (years)
Contract Type	Notional			Asset(1)		Liability(1)
Caps
1 Month Term SOFR	$	90,000		$	1,804	$	—	1.68
Futures
5-year Treasury-Note Futures	44,200			51		—		0.25
10-year Treasury-Note Futures	61,400			71		—		0.25
Total futures	105,600			122		—
Options
Options	N/A		(2)	112		—		0.20
Total derivatives	$	195,600		$	2,038	$	—

(1)Shown as derivative instruments in the accompanying consolidated balance sheets.

(2)The Company held 91 options contracts as of December 31, 2022.

The following table summarizes the net realized gains (losses) and unrealized gains (losses) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):

	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
Contract Type	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Caps	$	(294)	$	378	$	84	$	(284)	$	962	$	678
Futures	99		4,579		4,678		(8)		6,162		6,154
Options	11		—		11		117		(269)		(152)
Total	$	(184)	$	4,957	$	4,773	$	(175)	$	6,855	$	6,680

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
Contract Type	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Caps	$	747	$	—	$	747	$	736	$	648	$	1,384
Futures	539		5,120		5,659		(83)		10,919		10,836
Options	161		—		161		161		—		161
Total	$	1,447	$	5,120	$	6,567	$	814	$	11,567	$	12,381

Futures

Collateral posted with our futures counterparties is segregated in the Company’s books and records. Interest rate futures are centrally cleared by the Chicago Mercantile Exchange (“CME”) through a futures commission merchant. Interest rate futures that are governed by an International Swaps and Derivatives Association (“ISDA”) agreement provide for bilateral collateral pledging based on the counterparties’ market value. The counterparties have the right to re-pledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the interest rate futures change.

The Company is required to post initial margin and daily variation margin for our interest rate futures that are centrally cleared by CME. CME determines the fair value of our centrally cleared futures, including daily variation margin. Variation margin pledged on the Company’s centrally cleared interest rate futures is settled against the realized results of these futures. The Company’s counterparties held $1.7 million and $2.5 million of cash margin as collateral for derivatives as of September 30, 2023 and December 31, 2022, respectively, which is included in restricted cash in the consolidated balance sheets.

XML

OFFSETTING ASSETS AND LIABILITIES

9 Months Ended

Sep. 30, 2023

Offsetting [Abstract]

OFFSETTING ASSETS AND LIABILITIES

8. OFFSETTING ASSETS AND LIABILITIES

The following tables present both gross information and net information about derivatives and other instruments eligible for offset in the statement of financial position as of September 30, 2023 and December 31, 2022. The Company’s accounting policy is to record derivative asset and liability positions on a gross basis; therefore, the following tables present the gross derivative asset and liability positions recorded on the balance sheets, while also disclosing the eligible amounts of financial instruments and cash collateral to the extent those amounts could offset the gross amount of derivative asset and liability positions. The actual amounts of collateral posted by or received from counterparties may be in excess of the amounts disclosed in the following tables as the following only disclose amounts eligible to be offset to the extent of the recorded gross derivative positions.

The following table represents offsetting of financial assets and derivative assets as of September 30, 2023 ($ in thousands): 

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	1,817	$	—	$	1,817	$	—	$	(1,711)	$	106
Total	$	1,817	$	—	$	1,817	$	—	$	(1,711)	$	106

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial liabilities and derivative liabilities as of September 30, 2023 ($ in thousands): 

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	616,618	$	—	$	616,618	$	616,618	$	—	$	616,618
Total	$	616,618	$	—	$	616,618	$	616,618	$	—	$	616,618

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial assets and derivative assets as of December 31, 2022 ($ in thousands):

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	2,038	$	—	$	2,038	$	—	$	(2,505)	$	(467)
Total	$	2,038	$	—	$	2,038	$	—	$	(2,505)	$	(467)

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial liabilities and derivative liabilities as of December 31, 2022 ($ in thousands):

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	847,863	$	—	$	847,863	$	847,863	$	19,128	$	828,735
Total	$	847,863	$	—	$	847,863	$	847,863	$	19,128	$	828,735

(1)Included in restricted cash on consolidated balance sheets.

Master netting agreements that the Company has entered into with its derivative and repurchase agreement counterparties allow for netting of the same transaction, in the same currency, on the same date. Assets, liabilities, and collateral subject to master netting agreements as of September 30, 2023 and December 31, 2022 are disclosed in the tables above. The Company does not present its derivative and repurchase agreements net on the consolidated financial statements as it has elected gross presentation.

XML

CONSOLIDATED VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONSOLIDATED VARIABLE INTEREST ENTITIES

9. CONSOLIDATED VARIABLE INTEREST ENTITIES

The Company consolidates on its balance sheet two CLOs that are considered VIEs as of September 30, 2023 and December 31, 2022 ($ in thousands):

	September 30, 2023		December 31, 2022
Restricted cash	$	36,844	$	4,902
Mortgage loan receivables held for investment, net, at amortized cost	1,272,832		1,308,654
Accrued interest receivable	8,743		8,313
Other assets	23,089		17,505
Total assets	$	1,341,508	$	1,339,374
Debt obligations, net	$	1,060,417	$	1,058,462
Accrued expenses	3,385		3,029
Other liabilities	—		65
Total liabilities	1,063,802		1,061,556
Net equity in VIEs (eliminated in consolidation)	277,706		277,818
Total equity	277,706		277,818
Total liabilities and equity	$	1,341,508	$	1,339,374

Refer to Note 6, Debt Obligations, Net - Collateralized Loan Obligations (“CLO”) Debt for further details.

XML

EQUITY STRUCTURE AND ACCOUNTS

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

EQUITY STRUCTURE AND ACCOUNTS

10. EQUITY STRUCTURE AND ACCOUNTS

Stock Repurchases

On July 27, 2022, the board of directors authorized the repurchase of $50.0 million of the Company’s Class A common stock from time to time without further approval. This authorization increased the remaining outstanding authorization per the August 4, 2021 authorization from $39.5 million to $50.0 million. Stock repurchases by the Company are generally made for cash in open market transactions at prevailing market prices but may also be made in privately negotiated transactions or otherwise. The timing and amount of purchases are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. As of September 30, 2023, the Company has a remaining amount available for repurchase of $44.3 million, which represents 3.4% in the aggregate of its outstanding Class A common stock, based on the closing price of $10.26 per share on such date.

The following tables summarize the Company’s repurchase activity of its Class A common stock during the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2022		$	46,737
Repurchases paid:
March 1, 2023 - March 31, 2023	250,000	(2,285)
September 1 - September 30, 2023	19,000	(196)
Authorizations remaining as of September 30, 2023		$	44,256

(1)Amount excludes commissions paid associated with share repurchases.

	Shares	Amount(1)
Authorizations remaining as of December 31, 2021		$	44,122
Additional authorizations(2)		10,534
Repurchases paid	721,299	(7,279)
Authorizations remaining as of September 30, 2022		$	47,377

(1)Amount excludes commissions paid associated with share repurchases.

(2)On July 27, 2022 the Board authorized repurchases up to $50.0 million in aggregate.

Dividends

The following table presents dividends declared (on a per share basis) of Class A common stock for the nine months ended September 30, 2023 and 2022:

Declaration Date	Dividend per Share
March 15, 2023	$	0.23
June 15, 2023	0.23
September 15, 2023	0.23
Total	$	0.69
March 15, 2022	$	0.20
June 15, 2022	0.22
September 15, 2022	0.23
Total	$	0.65

Changes in Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Accumulated Other Comprehensive Income (Loss)
December 31, 2022	$	(21,009)
Other comprehensive income (loss)	6,130
September 30, 2023	$	(14,879)

	Accumulated Other Comprehensive Income (Loss)
December 31, 2021	$	(4,112)
Other comprehensive income (loss)	(14,699)
September 30, 2022	$	(18,811)

XML

NONCONTROLLING INTERESTS

9 Months Ended

Sep. 30, 2023

Noncontrolling Interest [Abstract]

NONCONTROLLING INTERESTS

11. NONCONTROLLING INTERESTS

Noncontrolling Interests in Consolidated Ventures

As of September 30, 2023, the Company consolidates two ventures and in each, there are different noncontrolling investors, which own between 10.0% - 25.0% of such ventures. These ventures hold investments in a 40-building student housing portfolio in Isla Vista, CA with a book value of $79.0 million, and a single-tenant office building in Oakland County, MI with a book value of $8.7 million. The Company makes distributions and allocates income from these ventures to the noncontrolling interests in accordance with the terms of the respective governing agreements.

Sales

During the three months ended September 30, 2023 and September 30, 2022, there were no sales of assets with noncontrolling interests. During the nine months ended September 30, 2022, the Company sold its apartment complex in Stillwater, OK, and its apartment complex in Miami, FL. Refer to Note 5, Real Estate and Related Lease Intangibles, Net for further details.

XML

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

12. EARNINGS PER SHARE

The Company’s net income (loss) and weighted average shares outstanding for the three and nine months ended September 30, 2023 and 2022 consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands except share amounts)	2023		2022		2023		2022
Basic and Diluted Net income (loss) available for Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Weighted average shares outstanding:
Basic	124,730,343		124,278,732		124,652,426		124,393,861
Diluted	124,968,545		125,172,180		124,817,335		125,813,280

The calculation of basic and diluted net income (loss) per share amounts for the three and nine months ended September 30, 2023 and 2022 consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except share and per share amounts) (1)	2023		2022		2023		2022
Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Denominator:
Weighted average number of shares of Class A common stock outstanding	124,730,343		124,278,732		124,652,426		124,393,861
Basic net income (loss) per share of Class A common stock	$	0.25	$	0.23	$	0.66	$	0.66
Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Diluted net income (loss) attributable to Class A common shareholders	31,319		28,583		81,889		82,663
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	124,730,343		124,278,732		124,652,426		124,393,861
Add - dilutive effect of:
Incremental shares of unvested Class A restricted stock(1)	238,202		893,448		164,909		1,419,419
Diluted weighted average number of shares of Class A common stock outstanding (2)	124,968,545		125,172,180		124,817,335		125,813,280
Diluted net income (loss) per share of Class A common stock	$	0.25	$	0.23	$	0.66	$	0.66

(1)The Company applies the treasury stock method.

(2)There were 299,641 and 440,573 anti-dilutive shares for the three and nine months ended September 30, 2023.

XML

STOCK-BASED AND OTHER COMPENSATION PLANS

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED AND OTHER COMPENSATION PLANS

13. STOCK-BASED AND OTHER COMPENSATION PLANS

Summary of Stock and Shares Unvested/Outstanding

The following table summarizes the impact on the consolidated statements of income of the various stock-based compensation plans and other compensation plans ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock-based compensation expense	$	3,205	$	3,738	$	15,375	$	27,787
Total Stock-Based Compensation Expense	$	3,205	$	3,738	$	15,375	$	27,787

A summary of the grants is presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share
Grants - Class A Common Stock	—	$	—	7,179	$	9.75	1,417,561	$	11.58	2,884,303	$	11.87

The table below presents the number of unvested shares of Class A common stock and outstanding stock options at September 30, 2023 and changes during 2023 of the Class A common stock and stock options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

	Restricted Stock	Weighted Average Grant Date Fair Value		Stock Options
Nonvested/Outstanding at December 31, 2022	2,529,571	$	12.62	623,788
Granted	1,417,561	11.58		—
Vested	(1,699,744)	12.14		—
Forfeited	(49,425)	10.43		—
Nonvested/Outstanding at September 30, 2023	2,197,963	$	12.37	623,788
Exercisable at September 30, 2023 (1)				623,788

(1)The weighted average exercise price of outstanding options is $14.84 at September 30, 2023.

At September 30, 2023, there was $12.7 million of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to 29.0 months, with a weighted average remaining vesting period of 21.7 months.

2014 Omnibus Incentive Plan

In connection with the IPO Transactions, the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) was adopted by the board of directors on February 11, 2014, and provided certain members of management, employees and directors of the Company or its affiliates with additional incentives including grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards.

2023 Omnibus Incentive Plan

At the Company’s Annual Meeting held on June 6, 2023, the stockholders of the Company approved the Ladder Capital Corp 2023 Omnibus Incentive Plan (the “2023 Omnibus Incentive Plan”), effective as of the date of the Annual Meeting (the “Effective Date”). The 2023 Omnibus Incentive Plan superseded and replaced the 2014 Omnibus Incentive Plan in its entirety as of the Effective Date.

The aggregate number of shares of the Company’s Class A common stock that will be available for issuance to employees, non-employee directors and consultants of the Company and its affiliates under the 2023 Omnibus Incentive Plan will not exceed

3,000,000 shares of Class A common stock, plus an additional amount, not to exceed 10,253,867 shares of Class A common stock, remaining available for new awards under the 2014 Omnibus Incentive Plan as of the Effective Date, subject to the terms and conditions set forth in the 2023 Omnibus Incentive Plan.

The material terms of the 2023 Omnibus Incentive Plan are summarized in the Company’s definitive proxy statement on Schedule 14A, filed with the SEC on April 21, 2023 (the “Proxy Statement”), under the heading “Proposal 3—Approval of the Ladder Capital Corp 2023 Omnibus Incentive Plan.” The summary of the 2023 Omnibus Incentive Plan in the Proxy Statement is qualified in its entirety by reference to the full text of the 2023 Omnibus Incentive Plan, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 7, 2023.

Annual Incentive Awards Granted in 2023 with respect to 2022 Performance

For 2022 performance, certain employees received stock-based incentive equity in February 2023. Restricted stock subject to time-based vesting criteria will vest in three installments on February 18 of each of 2024, 2025 and 2026, subject to continued employment on the applicable vesting dates. The Company has elected to recognize the compensation expense related to the time-based vesting of the annual restricted stock awards for the entire award on a straight-line basis over the requisite service period for the entire award. Restricted stock subject to performance criteria is eligible to vest in three equal installments upon the compensation committee’s confirmation that the Company achieves a pre-tax return on average equity, based on distributable earnings divided by the Company’s average shareholders’ equity, equal to or greater than 8% for such year (the “Performance Target”) for the years ended December 31, 2023, 2024 and 2025, respectively. If the Company misses the Performance Target during either the first or second calendar year but meets the Performance Target for a subsequent year during the three-year performance period and the Company’s return on equity for such subsequent year and any years for which it missed its Performance Target equals or exceeds the compounded pre-tax return on average equity of 8% based on distributable earnings divided by the Company’s average shareholders’ equity, the performance-vesting restricted stock which failed to vest because the Company previously missed its Performance Target will vest subject to continued employment on the applicable vesting date (the “Catch-Up Provision”). Approximately 2/3 of all the shares subject to attainment of the Performance Target are also subject to the Catch-Up Provision, as the Catch-Up Provision is not available for the missed performance during the third performance year and has the effect of requiring the Company to achieve an average 8% return over the full three-year performance plan in order to be effective. Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved. The probability of meeting the performance outcome is assessed quarterly.

On February 18, 2023, in connection with 2022 performance, annual stock awards were granted to management employees (each, a “Management Grantee”), with an aggregate grant date fair value of $8.5 million, which represents 733,607 shares of Class A common stock. The grant to Mr. Harris and approximately half of the grants to each of Ms. McCormack and Mr. Perelman were unrestricted. The other half of incentive equity granted to each of Ms. McCormack and Mr. Perelman is restricted stock subject to attainment of the Performance Target for the applicable years and is also subject to the Catch-Up Provision described above. For the grants to Mr. Miceli and Ms. Porcella (a total of 101,344 shares with an aggregate fair value of $1.2 million), approximately half of the awards are subject to time-based vesting criteria and the remaining half are subject to attainment of the Performance Target for the applicable years.

On February 18, 2023, in connection with 2022 performance, annual stock awards were granted to certain non-management employees (“Non-Management Grantees”) with an aggregate grant date fair value of $7.5 million, which represents 651,429 shares of Class A common stock. Of these awards, 19,558 shares were unrestricted, 306,162 shares are subject to time-based vesting criteria and the remaining 325,709 shares are subject to the attainment of the Performance Target, including the Catch-Up Provision, for the applicable years.

Other 2023 Restricted Stock Awards

On February 18, 2023, certain members of the board of directors received annual restricted stock awards with a grant date fair value of $0.4 million, representing 32,525 shares of restricted Class A common stock, which will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense related to the time-based vesting criteria of the award shall be recognized on a straight-line basis over the one-year vesting period.

Annual Incentive Awards Granted in 2022 with respect to 2021 Performance

For 2021 performance, certain employees received stock-based incentive equity in January 2022. Restricted stock subject to time-based vesting criteria will vest in three installments on February 18 of each of 2023, 2024 and 2025, subject to continued employment on the applicable vesting dates. The Company has elected to recognize the compensation expense related to the time-based vesting of the annual restricted stock awards for the entire award on a straight-line basis over the requisite service period for the entire award. Restricted stock subject to performance criteria is eligible to vest in three equal installments upon the compensation committee’s confirmation that the Company achieves the Performance Target for the years ended December 31, 2022, 2023 and 2024, respectively. Approximately 2/3 of all the shares subject to attainment of the Performance Target are also subject to the Catch-Up Provision. Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition. Therefore, compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved. The probability of meeting the performance outcome is assessed quarterly.

On January 31, 2022, in connection with 2021 performance, annual stock awards were granted to management employees (each, a “Management Grantee”), with an aggregate grant date fair value of $18 million, which represents 1,517,627 shares of Class A common stock. The grant to Mr. Harris and approximately 2/3 of the grants to each of Ms. McCormack and Mr. Perelman were unrestricted. The other 1/3 of incentive equity granted to each of Ms. McCormack and Mr. Perelman is restricted stock subject to attainment of the Performance Target for the applicable years and is also subject to the Catch-Up Provision described above. For the grants to Mr. Miceli and Ms. Porcella (a total of 210,662 shares with an aggregate fair value of $2.5 million), approximately 1/3 of the awards were unrestricted, with another 1/3 of the awards subject to time-based vesting criteria, and the remaining 1/3 subject to attainment of the Performance Target for the applicable years.

On January 31, 2022, in connection with 2021 performance, annual stock awards were granted to certain non-management employees (“Non-Management Grantees”) with an aggregate grant date fair value of $15.4 million, which represents 1,293,853 shares of Class A common stock. Of these awards, 264,704 shares were unrestricted, 497,169 shares are subject to time-based vesting criteria, and the remaining 531,980 shares are subject to attainment of the Performance Target, including the Catch-Up Provision, for the applicable years.

Other Incentive Awards Granted in 2022

On May 10, 2022, a new employee of the Company received a restricted stock award with a grant date fair value of $0.4 million, representing 33,784 shares of restricted Class A common stock. Fifty percent of the restricted stock award is subject to time-based vesting criteria, and the remaining 50% of the restricted stock award is subject to attainment of the Performance Target for the applicable years. The time-vesting restricted stock will vest in three installments on February 18 of each of 2023, 2024 and 2025, subject to continued employment on the applicable vesting dates. The performance-vesting restricted stock will vest in three equal installments upon the Compensation Committee’s confirmation that the Company achieves the Performance Target for the years ended December 31, 2022, 2023 and 2024, respectively. The Catch-Up Provision applies to the performance vesting portion of this award, provided that a termination has not occurred. The Company has elected to recognize the compensation expense related to the time-based vesting criteria of these Restricted Stock Awards on a straight-line basis over the requisite service period.

Other 2022 Restricted Stock Awards

On February 18, 2022, certain members of the board of directors received annual restricted stock awards with a grant date fair value of $0.4 million, representing 31,860 shares of restricted Class A common stock, which will vest in full on the first anniversary of the date of grant, subject to continued service on the board of directors. Compensation expense related to the time-based vesting criteria of the award shall be recognized on a straight-line basis over the one-year vesting period.

Change in Control

Upon a change in control (as defined in the respective award agreements), restricted stock awards to Mr. Miceli, Ms. McCormack, Mr. Perelman, and one Non-Management Grantee will become fully vested if: (1) such Grantee continues to be employed through the closing of the change in control; or (2) after the signing of definitive documentation related to the change in control, but prior to its closing, such Grantee’s employment is terminated without cause or due to death or disability or the Grantee resigns for Good Reason, as defined in each Grantee’s employment agreement. The compensation committee retains the right, in its sole discretion, to provide for the accelerated vesting (in whole or in part) of the restricted stock awards granted.

In the event Ms. Porcella or a Non-Management Grantee, except for the one mentioned above, is terminated by the Company without cause within six months of certain changes in control, all unvested time shares shall vest on the termination date and all unvested performance shares shall remain outstanding and be eligible to vest (or be forfeited) in accordance with the performance conditions.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is based upon internal models, using market quotations, broker quotations, counterparty quotations or pricing services quotations, which provide valuation estimates based upon reasonable market order indications and are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity. The fair value of the mortgage loan receivables held for sale is based upon a securitization model utilizing market data from recent securitization spreads and pricing.

Fair Value Summary Table

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at September 30, 2023 and December 31, 2022 are as follows ($ in thousands):

September 30, 2023

									Weighted Average
	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	484,501		$	483,880	$	468,851	Internal model, third-party inputs	6.79	%	2.08
CMBS interest-only(1)	888,870		(2)	7,487		7,518		Internal model, third-party inputs	6.44	%	1.13
GNMA interest-only(3)	43,946		(2)	230		204		Internal model, third-party inputs	5.59	%	3.05
Agency securities(1)	25			25		24		Internal model, third-party inputs	2.70	%	1.18
Equity securities(3)	N/A			160		121		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost(4)	3,380,845			3,371,773		3,365,688		Discounted Cash Flow(5)	9.77	%	0.79
Mortgage loan receivables held for sale	31,350			26,272		26,272		Internal model, third-party inputs(6)	4.57	%	8.44
FHLB stock(7)	5,175			5,175		5,175		(7)	7.50	%	N/A
Nonhedge derivatives(1)(10)	161,900			1,817		1,817		Counterparty quotations	N/A		1.10
Liabilities:
Repurchase agreements - short-term	360,447			360,447		360,447		Cost plus Accrued Interest (8)	6.61	%	0.14
Repurchase agreements - long-term	256,170			256,170		256,170		Discounted Cash Flow(9)	6.20	%	1.99
Mortgage loan financing	437,448			437,739		417,967		Discounted Cash Flow	5.87	%	2.90
CLO debt	1,063,249			1,060,417		1,060,417		Discounted Cash Flow(9)	7.55	%	2.14
Borrowings from the FHLB	115,000			115,000		115,000		Discounted Cash Flow	2.88	%	0.82
Senior unsecured notes	1,576,614			1,564,071		1,367,484		Internal model, third-party inputs	4.66	%	4.02

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $39.6 million at September 30, 2023.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)For repurchase agreements - short term, the value approximates the cost plus accrued interest.

(9)For repurchase agreements - long term and CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

December 31, 2022

									Weighted Average
	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	562,839		$	562,246	$	541,333	Internal model, third-party inputs	5.32	%	1.06
CMBS interest-only(1)	1,026,195		(2)	10,498		10,443		Internal model, third-party inputs	3.65	%	1.45
GNMA interest-only(3)	45,369		(2)	285		281		Internal model, third-party inputs	4.23	%	3.30
Agency securities(1)	36			36		35		Internal model, third-party inputs	2.70	%	1.54
U.S. Treasury securities(1)	36,000			35,328		35,328		Internal model, third-party inputs	4.17	%	0.60
Equity securities(3)	N/A			160		118		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost(4)	3,907,295			3,885,746		3,875,708		Discounted Cash Flow(5)	8.85	%	1.26
Mortgage loan receivables held for sale	31,350			27,391		27,391		Internal model, third-party inputs(6)	4.57	%	9.19
FHLB stock(7)	9,585			9,585		9,585		(7)	4.75	%	N/A
Nonhedge derivatives(1)(10)	204,700			2,038		2,038		Counterparty quotations	N/A		1.52
Liabilities:
Repurchase agreements - short-term	481,465			481,465		481,465		Cost plus Accrued Interest (8)	4.04	%	0.37
Repurchase agreements - long-term	366,398			366,398		366,398		Discounted Cash Flow(9)	4.06	%	2.56
Mortgage loan financing	497,454			497,991		477,101		Discounted Cash Flow	5.51	%	3.36
CLO debt	1,064,365			1,058,462		1,058,462		Discounted Cash Flow(9)	6.35	%	15.92
Borrowings from the FHLB	213,000			213,000		213,055		Discounted Cash Flow	1.61	%	1.25
Senior unsecured notes	1,643,794			1,628,382		1,397,977		Internal model, third-party inputs	4.66	%	4.75

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $20.8 million at December 31, 2022.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)Fair value for repurchase agreement liabilities - short term borrowings under the Secured Financing Facility and borrowings under the Revolving Credit Facility is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term and CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(11)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	475,186		$	—	$	—	$	459,877	$	459,877
CMBS interest-only(1)	880,509		(2)	—		—		7,182		7,182
GNMA interest-only(3)	43,946		(2)	—		—		204		204
Agency securities(1)	25			—		—		24		24
Equity securities	N/A			121		—		—		121
Nonhedge derivatives(4)	161,900			—		1,817		—		1,817
				$	121	$	1,817	$	467,287	$	469,225
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost(5)	$	3,380,845		$	—	$	—	$	3,365,688	$	3,365,688
Mortgage loan receivable held for sale(6)	31,350			—		—		26,272		26,272
CMBS(7)	9,316			—		—		8,974		8,974
CMBS interest-only(7)	8,361			—		—		336		336
FHLB stock	5,175			—		—		5,175		5,175
				$	—	$	—	$	3,406,445	$	3,406,445
Liabilities:
Repurchase agreements - short-term	$	360,447		$	—	$	—	$	360,447	$	360,447
Repurchase agreements - long-term	256,170			—		—		256,170		256,170
Mortgage loan financing	437,448			—		—		417,967		417,967
CLO debt	1,063,249			—		—		1,060,417		1,060,417
Borrowings from the FHLB	115,000			—		—		115,000		115,000
Senior unsecured notes	1,576,614			—		—		1,367,484		1,367,484
				$	—	$	—	$	3,577,485	$	3,577,485

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $39.6 million at September 30, 2023.

(6)A lower of cost or market adjustment was recorded as of September 30, 2023.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.

December 31, 2022

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	553,424		$	—	$	—	$	532,304	$	532,304
CMBS interest-only(1)	1,017,735		(2)	—		—		10,026		10,026
GNMA interest-only(3)	45,369		(2)	—		—		281		281
Agency securities(1)	36			—		—		35		35
Equity securities	N/A			118		—		—		118
U.S. Treasury securities	36,000			35,328		—		—		35,328
Nonhedge derivatives(4)	204,700			—		2,038		—		2,038
				$	35,446	$	2,038	$	542,646	$	580,130
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost(5)	$	3,907,295		$	—	$	—	$	3,875,708	$	3,875,708
Mortgage loan receivable held for sale(6)	31,350			—		—		27,391		27,391
CMBS(7)	9,415			—		—		9,030		9,030
CMBS interest-only(7)	8,460			—		—		417		417
FHLB stock	9,585			—		—		9,585		9,585
				$	—	$	—	$	3,922,131	$	3,922,131
Liabilities:
Repurchase agreements - short-term	$	481,465		$	—	$	—	$	481,465	$	481,465
Repurchase agreements - long-term	366,398			—		—		366,398		366,398
Mortgage loan financing	497,454			—		—		477,101		477,101
CLO debt	1,064,365			—		—		1,058,462		1,058,462
Borrowings from the FHLB	213,000			—		—		213,055		213,055
Senior unsecured notes	1,643,794			—		—		1,397,977		1,397,977
				$	—	$	—	$	3,994,458	$	3,994,458

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $20.8 million at December 31, 2022.

(6)A lower of cost or market adjustment was recorded as of December 31, 2022.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.  

The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Nine Months Ended September 30,
Level 3	2023		2022
Balance at January 1,	$	542,646	$	692,864
Transfer from level 2	—		—
Purchases	73,591		55,716
Sales	(14,930)		(4,261)
Paydowns/maturities	(136,892)		(135,988)
Amortization of premium/discount	(2,796)		(3,503)
Unrealized gain/(loss)	5,949		(14,719)
Realized gain/(loss) on sale	(281)		(106)
Balance at September 30,	$	467,287	$	590,003

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

September 30, 2023

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	459,877		Discounted cash flow	Yield (4)	2.86	%	6.76	%	17.54	%
CMBS interest-only(1)	7,182		(2)	Discounted cash flow	Yield (4)	2.73	%	6.57	%	21.81	%
GNMA interest-only(3)	204		(2)	Discounted cash flow	Yield (4)	1.28	%	9.46	%	10.00	%
Agency securities(1)	24			Discounted cash flow	Yield (4)	2.70	%	2.70	%	2.70	%
Total	$	467,287

December 31, 2022

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	532,304		Discounted cash flow	Yield (4)	2.89	%	5.29	%	17.47	%
CMBS interest-only(1)	10,026		(2)	Discounted cash flow	Yield (4)	1.39	%	3.72	%	19.66	%
GNMA interest-only(3)	281		(2)	Discounted cash flow	Yield (4)	1.28	%	5.50	%	10.00	%
Agency securities(1)	35			Discounted cash flow	Yield (4)	2.70	%	2.70	%	2.70	%
Total	$	542,646

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities, U.S. Treasury securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)GNMA interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may be impaired. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-down of assets value due to impairment. Refer to Note 3, Mortgage Loan Receivables and Note 5, Real Estate and Related Lease Intangibles, Net for disclosure of level 3 inputs.

XML

INCOME TAXES

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

15. INCOME TAXES

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the taxable year ended December 31, 2015 (the REIT Election”). As such, the Company’s income is generally not subject to U.S. federal, state and local corporate income taxes other than as described below.

Certain of the Company’s subsidiaries have elected to be treated as TRSs. TRSs permit the Company to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, the Company will continue to maintain its qualification as a REIT. The Company’s TRSs are not consolidated for U.S. federal income tax purposes, but are instead taxed as corporations. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in TRSs. Current income tax expense (benefit) was $1.2 million and $2.0 million for the three and nine months ended September 30, 2023 and $4.2 million and $3.8 million for the three and nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, the Company’s net deferred tax assets (liabilities) were $(4.7) million and $(1.8) million, respectively, and are included in other assets (other liabilities) in the Company’s consolidated balance sheets. Deferred income tax expense (benefit) included within the provision for income taxes was $2.0 million and $(1.6) million for the three months ended September 30, 2023 and September 30, 2022, respectively. Deferred income tax expense (benefit) included within the provision for income taxes was $2.9 million and $0.1 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The Company’s net deferred tax liability is comprised of deferred tax assets and deferred tax liabilities. The Company believes it is more likely than not that the deferred tax assets (aside from the exception noted below) will be realized in the future. Realization of the deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of September 30, 2023, the Company had a deferred tax asset of $2.8 million relating to capital losses which it may only use to offset capital gains. These tax attributes will begin to expire if unused by December 31, 2024. As the realization of these assets are not more likely than not to be realized before their expiration, the Company provided a full valuation allowance against this deferred tax asset. Additionally, as of September 30, 2023, the Company had $1.5 million of deferred tax asset related to Code Section 163(j) interest expense limitation. As the Company is uncertain if this asset will be realized in the future, the Company provided a full valuation allowance against this deferred tax asset.

The Company’s tax returns are subject to audit by taxing authorities. Generally, as of September 30, 2023, the tax years 2019-2022 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. One of the Company’s subsidiary entities is currently under an IRS audit for tax year 2020 and also under audit in New York City for tax years 2014-2020. The Company does not expect these audits to result in any material changes to the Company’s financial position or performance. In April 2023, a settlement was reached for $2.6 million with New York City pertaining to an audit of the Company for the years 2012-2013 resulting in an incremental income tax expense of $0.2 million for the nine months ended September 30, 2023. The Company does not expect tax expense to have an impact on either short, or long-term liquidity or capital needs.

As of September 30, 2023, the Company did not have any unrecognized tax benefit. As of December 31, 2022, the Company’s unrecognized tax benefit was a liability of $2.4 million, and was included in the accrued expenses in the Company’s consolidated balance sheets. This unrecognized tax benefit, if recognized, would have a favorable impact on the Company’s effective income tax rate in future periods. As of September 30, 2023, the Company has not recognized a significant amount of any interest or penalties related to uncertain tax positions. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

Under U.S. GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.

XML

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

16. RELATED PARTY TRANSACTIONS

The Company has no material related party relationships to disclose.

XML

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

17. COMMITMENTS AND CONTINGENCIES

Leases

As of September 30, 2023, the Company had a $(16.6) million lease liability and a $15.0 million right-of-use asset on its consolidated balance sheets recorded within other liabilities and other assets, respectively. The right-of-use lease asset relates to the Company's operating lease of office space. Right-of use lease assets initially equal the lease liability. The Company recognized $0.5 million and $1.6 million for the three and nine months ended September 30, 2023 and $0.3 million and $0.8 million for the three and nine months ended September 30, 2022 in operating expenses in its consolidated statements of income relating to operating leases.

Future minimum lease payments under non-cancelable operating leases as of September 30, 2023 are as follows ($ in thousands):

2023 (last three months)	$	473
2024	2,171
2025	2,207
2026	2,219
2027	2,232
Thereafter	13,344
Total undiscounted cash flows	22,646
Present value discount (1)	(6,026)
Lease liabilities	$	16,620

(1)Lease liabilities were discounted at the Company's weighted average incremental borrowing rate for similar collateral, which is estimated to be 6.62%, and the remaining lease term is 9.8 years.

Unfunded Loan Commitments

As of September 30, 2023, the Company’s off-balance sheet arrangements consisted of $257.5 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing over the next three years at rates to be determined at the time of funding, 58% of which additional funds relate to the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income. As of December 31, 2022, the Company’s off-balance sheet arrangements consisted of $321.8 million of unfunded commitments on mortgage loan receivables held for investment to provide additional first mortgage loan financing.

Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. The Company carefully monitors the progress of work at properties that serve as collateral underlying its commercial mortgage loans, including the progress of capital expenditures, construction, leasing and business plans in light of current market conditions. These commitments are not reflected on the consolidated balance sheets. 

Unsettled Trades

As of September 30, 2023, the Company had $9.9 million of U.S. Treasury securities traded and not yet settled on its consolidated balance sheets. The U.S. Treasury securities are recorded within other assets, and the related payable is recorded within other liabilities. These balances relate to the Company’s purchase of U.S. Treasury securities with maturities of less than three months, which will be recorded within cash and cash equivalents upon settlement.

XML

SEGMENT REPORTING

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

18. SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how the chief operating decision makers review and manage the business. These reportable segments include loans, securities, and real estate. The loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans).  The securities segment is composed of all of the Company’s activities related to securities, which include investments in CMBS, U.S. Agency securities, corporate bonds, equity securities and U.S. Treasury securities. The real estate segment includes net leased properties, office buildings, student housing portfolios, hotels, industrial buildings, a shopping center and condominium units. Corporate/other includes certain of the Company’s investments in ventures, other asset management activities and operating expenses.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

Three months ended September 30, 2023	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	82,814	$	7,810	$	1	$	10,465	$	101,090
Interest expense	(32,601)		(52)		(7,677)		(21,929)		(62,259)
Net interest income (expense)	50,213		7,758		(7,676)		(11,464)		38,831
(Provision for) release of loan loss reserves	(7,473)		—		—		—		(7,473)
Net interest income (expense) after provision for (release of) loan reserves	42,740		7,758		(7,676)		(11,464)		31,358
Real estate operating income	—		—		24,761		—		24,761
Net result from mortgage loan receivables held for sale	(629)		—		—		—		(629)
Realized gain (loss) on securities	—		23		—		—		23
Unrealized gain (loss) on securities	—		(42)		—		—		(42)
Realized gain on sale of real estate, net	—		—		8,808		—		8,808
Fee and other income	1,518		4		134		173		1,829
Net result from derivative transactions	4,449		241		83		—		4,773
Earnings (loss) from investment in unconsolidated ventures	—		—		479		—		479
Gain (loss) on extinguishment of debt	—		—		—		921		921
Total other income (loss)	5,338		226		34,265		1,094		40,923
Compensation and employee benefits	—		—		—		(14,285)		(14,285)
Operating expenses	—		—		—		(4,775)		(4,775)
Real estate operating expenses	—		—		(9,456)		—		(9,456)
Investment related expenses	(1,704)		(48)		(190)		(337)		(2,279)
Depreciation and amortization	—		—		(7,034)		(110)		(7,144)
Total costs and expenses	(1,704)		(48)		(16,680)		(19,507)		(37,939)
Income tax (expense) benefit	—		—		—		(3,147)		(3,147)
Segment profit (loss)	$	46,374	$	7,936	$	9,909	$	(33,024)	$	31,195
Total assets as of September 30, 2023	$	3,358,382	$	476,698	$	682,366	$	985,696	$	5,503,142

Three months ended September 30, 2022	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	70,851	$	5,705	$	2	$	801	$	77,359
Interest expense	(17,344)		(1,327)		(8,088)		(21,712)		(48,471)
Net interest income (expense)	53,507		4,378		(8,086)		(20,911)		28,888
(Provision for) release of loan loss reserves	(1,501)		—		—		—		(1,501)
Net interest income (expense) after provision for (release of) loan reserves	52,006		4,378		(8,086)		(20,911)		27,387
Real estate operating income	—		—		27,679		—		27,679
Net result from mortgage loan receivables held for sale	796		—		—		—		796
Realized gain (loss) on securities	—		9		—		—		9
Unrealized gain (loss) on securities	—		(66)		—		—		(66)
Realized gain on sale of real estate, net	—		—		4,393		—		4,393
Fee and other income	2,546		11		—		140		2,697
Net result from derivative transactions	4,837		982		748		—		6,567
Earnings (loss) from investment in unconsolidated ventures	—		—		407		—		407
Total other income (loss)	8,179		936		33,227		140		42,482
Compensation and employee benefits	—		—		—		(13,806)		(13,806)
Operating expenses	—		—		—		(5,143)		(5,143)
Real estate operating expenses	—		—		(10,069)		—		(10,069)
Investment related expenses	(917)		(102)		(138)		(532)		(1,689)
Depreciation and amortization	—		—		(7,864)		—		(7,864)
Total costs and expenses	(917)		(102)		(18,071)		(19,481)		(38,571)
Income tax (expense) benefit	—		—		—		(2,613)		(2,613)
Segment profit (loss)	$	59,268	$	5,212	$	7,070	$	(42,865)	$	28,685
Total assets as of December 31, 2022	$	3,892,382	$	587,519	$	706,355	$	764,917	$	5,951,173

Nine months ended September 30, 2023	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	261,822	$	23,964	$	5	$	20,924	$	306,715
Interest expense	(92,236)		(3,149)		(22,053)		(66,912)		(184,350)
Net interest income (expense)	169,586		20,815		(22,048)		(45,988)		122,365
(Provision for) release of loan loss reserves	(19,090)		—		—		—		(19,090)
Net interest income (expense) after provision for (release of) loan reserves	150,496		20,815		(22,048)		(45,988)		103,275
Real estate operating income	—		—		73,847		—		73,847
Net result from mortgage loan receivables held for sale	(1,119)		—		—		—		(1,119)
Realized gain (loss) on securities	—		(276)		—		—		(276)
Unrealized gain (loss) on securities	—		(20)		—		—		(20)
Realized gain on sale of real estate, net	—		—		8,808		—		8,808
Fee and other income	6,363		12		135		477		6,987
Net result from derivative transactions	5,390		612		678		—		6,680
Earnings (loss) from investment in unconsolidated ventures	—		—		913		—		913
Gain (loss) on extinguishment of debt	—		—		—		10,600		10,600
Total other income (loss)	10,634		328		84,381		11,077		106,420
Compensation and employee benefits	—		—		—		(50,612)		(50,612)
Operating expenses	—		—		—		(15,018)		(15,018)
Real estate operating expenses	—		—		(29,071)		—		(29,071)
Investment related expenses	(4,459)		(144)		(765)		(1,092)		(6,460)
Depreciation and amortization	—		—		(21,822)		(322)		(22,144)
Total costs and expenses	(4,459)		(144)		(51,658)		(67,044)		(123,305)
Income tax (expense) benefit	—		—		—		(4,913)		(4,913)
Segment profit (loss)	$	156,671	$	20,999	$	10,675	$	(106,868)	$	81,477
Total assets as of September 30, 2023	$	3,358,382	$	476,698	$	682,366	$	985,696	$	5,503,142

Nine months ended September 30, 2022	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	185,212	$	12,650	$	4	$	966	$	198,832
Interest expense	(44,330)		(2,429)		(27,642)		(63,811)		(138,212)
Net interest income (expense)	140,882		10,221		(27,638)		(62,845)		60,620
(Provision for) release of loan loss reserves	(1,373)		—		—		—		(1,373)
Net interest income (expense) after provision for (release of) loan reserves	139,509		10,221		(27,638)		(62,845)		59,247
Real estate operating income	—		—		82,678		—		82,678
Net result from mortgage loan receivables held for sale	(2,083)		—		—		—		(2,083)
Realized gain (loss) on securities	—		(75)		—		—		(75)
Unrealized gain (loss) on securities	—		(98)		—		—		(98)
Realized gain on sale of real estate, net	—		—		62,101		—		62,101
Fee and other income	8,147		45		3,704		342		12,238
Net result from derivative transactions	8,761		2,235		1,385		—		12,381
Earnings (loss) from investment in unconsolidated ventures	—		—		1,197		—		1,197
Gain (loss) on extinguishment of debt	—		—		—		685		685
Total other income (loss)	14,825		2,107		151,065		1,027		169,024
Compensation and employee benefits	—		—		—		(59,165)		(59,165)
Operating expenses	—		—		—		(15,303)		(15,303)
Real estate operating expenses	—		—		(28,928)		—		(28,928)
Investment related expenses	(1,715)		(200)		(437)		(2,811)		(5,163)
Depreciation and amortization	—		—		(24,756)		(8)		(24,764)
Total costs and expenses	(1,715)		(200)		(54,121)		(77,287)		(133,323)
Income tax (expense) benefit	—		—		—		(3,897)		(3,897)
Segment profit (loss)	$	152,619	$	12,128	$	69,306	$	(143,002)	$	91,051
Total assets as of December 31, 2022	$	3,892,382	$	587,519	$	706,355	$	764,917	$	5,951,173

(1)Includes the Company’s investment in unconsolidated ventures that held real estate of $7.0 million and $6.2 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in FHLB stock of $5.2 million as of September 30, 2023 and $9.6 million as of December 31, 2022, and the Company’s senior unsecured notes of $1.6 billion at September 30, 2023 and December 31, 2022.

XML

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

19. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the issuance date of the financial statements and determined that no additional disclosure is necessary.

XML

Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

XML

SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Accounting and Principles of Consolidation

Basis of Accounting and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, the unaudited financial information for the interim periods presented in this report reflects all normal and recurring adjustments necessary for a fair statement of results of operations, financial position and cash flows. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022, which are included in the Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this interim report. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.

The consolidated financial statements include the Company’s accounts and those of its subsidiaries that are majority-owned and/or controlled by the Company and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. All significant intercompany transactions and balances have been eliminated.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

Provision for Loan Losses

Provision for Loan Losses

The Company uses a current expected credit loss model (“CECL”) for estimating the provision for loan losses on its loan portfolio. The CECL model requires the consideration of possible credit losses over the life of an instrument and includes a portfolio-based component and an asset-specific component. In accordance with ASC 326 reporting requirements, the Company supplemented its existing credit monitoring and management processes with additional processes to support the calculation of the CECL reserves. The Company engages a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool. It is comprised of a probability of default (“PD”) model and a loss given default (“LGD”) model that, layered together with the Company’s loan-level data, fair value of collateral, net operating income of collateral, selected forward-looking macroeconomic variables, and pool-level mean loss rates, produces life of loan expected losses (“EL”) at the loan and portfolio level. Where management has determined that the credit loss model does not fully capture certain external factors, including portfolio trends or loan-specific factors, a qualitative adjustment to the reserve, is recorded. In addition, interest receivable on loans is not included in the Company’s CECL calculations as the Company performs timely write off of aged accounts receivable. The Company has made a policy election to write off aged receivables through interest income as opposed to through the CECL provision on its statements of income.

Loans for which the borrower or sponsor is experiencing financial difficulty, and where repayment of the loan is expected substantially through the operation or sale of the underlying collateral, are considered collateral dependent loans.

For collateral dependent loans, the Company measures expected losses based on the difference between the collateral’s fair value and the amortized cost basis of the loan. When the repayment or satisfaction of the loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated costs to sell the collateral.

The Company may use the direct capitalization rate valuation methodology, the discounted cash flow methodology, or the sales comparison approach to estimate the fair value of the collateral for collateral dependent loans and in certain cases will obtain external appraisals and take into account potential sale bids. Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

The Company’s loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. Specifically, a property’s operating results and any cash reserves are analyzed and used to assess: (i) whether cash flow from operations is sufficient to cover the debt service requirements currently and into the future; (ii) the ability of the borrower to refinance the loan at maturity; and/or (iii) the property’s liquidation value. The Company also evaluates the financial wherewithal of any loan guarantors as well as the borrower’s competency in managing and operating the properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic submarket in which the collateral property is located. Such impairment analyses are completed and reviewed by asset management and underwriting personnel, who utilize various data sources, including: (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrowers’ business plan, and capitalization and discount rates; (ii) site inspections; and (iii) current credit spreads and other market data and ultimately presented to management for approval.

When a debtor is experiencing financial difficulties and a loan is modified, the effect of the modification will be included in the Company’s assessment of the CECL allowance for loan losses. If the Company provides principal forgiveness, the amortized cost basis of the loan is written off against the allowance for loan losses. Generally, when modifying loans, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and, in some cases, lookback features or equity interests to offset the effects of modifications granted should conditions impacting the loan improve.

The Company designates a loan as a non-accrual loan generally when: (i) the principal or coupon interest components of loan payments become 90-days past due; or (ii) in the opinion of the Company, it is doubtful the Company will be able to collect all principal and coupon interest due according to the contractual terms of the loan. Interest income on non-accrual loans in which the Company reasonably expects a full recovery of the loan’s outstanding principal balance is recognized when received in cash. Otherwise, income recognition will be suspended and any cash received will be applied as a reduction to the amortized cost basis. A non-accrual loan is returned to accrual status at such time as the loan becomes contractually current and future principal and coupon interest are reasonably assured to be received in accordance with the contractual loan terms. A loan will be written off when management has determined principal and coupon interest is no longer realizable and deemed non-recoverable.

Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Pending Adoption

Recently Adopted Accounting Pronouncements

In March 2022, the FASB issued ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, (“ASU 2022-02”). ASU 2022-02 eliminated the recognition and measurement guidance for troubled debt restructuring for creditors that have adopted ASC 326 and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The standard is effective for fiscal years beginning after December 15, 2022. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

Management is evaluating any new accounting standards that have been issued or proposed by FASB and that do not require adoption until a future date. These new standards are not expected to have a material impact on the consolidated financial statements upon adoption.

XML

MORTGAGE LOAN RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2023

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

Schedule of Mortgage Loan Receivables

	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)(2)		Remaining Maturity (years)(2)(3)
Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,343,499	$	3,334,385		9.75	%	0.8
Mezzanine loans	37,346		37,300			11.53	%	1.1
Total mortgage loans receivable	3,380,845		3,371,685			9.77	%	0.8
Allowance for credit losses	N/A		(39,575)
Total mortgage loan receivables held for investment, net, at amortized cost	3,380,845		3,332,110
Mortgage loan receivables held for sale:
First mortgage loans	31,350		26,272		(4)	4.57	%	8.4
Total	$	3,412,195	$	3,358,382	(5)	9.73	%	0.8

(1)Includes the impact from interest rate floors. Term SOFR rates in effect as of September 30, 2023 are used to calculate weighted average yield for floating rate loans.

(2)Excludes non-accrual loans of $58.4 million. Refer to “Non-Accrual Status” below for further details.

(3)The remaining maturity is calculated based on the initial maturity. The weighted average extended maturity for all loans is 2.0 years.

(4)As a result of rising prevailing rates, the Company recorded a lower of cost or market adjustment as of September 30, 2023. The adjustment was calculated using a 5.94% discount rate.

(5)Net of $9.2 million of deferred origination fees and other items as of September 30, 2023.

	Outstanding Face Amount		Carrying Value			Weighted Average Yield (1)(2)(3)		Remaining Maturity (years)(2)(3)
Mortgage loan receivables held for investment, net, at amortized cost:
First mortgage loans	$	3,841,315	$	3,819,860		8.83	%	1.3
Mezzanine loans	65,950		65,886			10.62	%	1.6
Total mortgage loans receivable	3,907,265		3,885,746			8.85	%	1.3
Allowance for credit losses	N/A		(20,755)
Total mortgage loan receivables held for investment, net, at amortized cost	3,907,265		3,864,991
Mortgage loan receivables held for sale:
First mortgage loans	31,350		27,391		(4)	4.57	%	9.2
Total	$	3,938,615	$	3,892,382	(5)	8.82	%	1.3

(1)Includes the impact from interest rate floors. December 31, 2022 LIBOR rates are used to calculate weighted average yield for floating rate loans.

(2)Excludes non-accrual loans of $53.8 million.

(3)Includes the impact of one loan with a principal balance of $51.5 million, which was extended through 2026 in January 2023.

(4)As a result of rising prevailing rates, the Company recorded a lower of cost or market adjustment as of December 31, 2022. The adjustment was calculated using a 5.16% discount rate.

(5)Net of $21.5 million of deferred origination fees and other items as of December 31, 2022.

Summary of Mortgage Loan Receivables by Loan Type

For the nine months ended September 30, 2023 and 2022, the activity in our loan portfolio was as follows ($ in thousands):

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans receivable		Allowance for credit losses		Mortgage loan  receivables held for sale
Balance, December 31, 2022	$	3,885,746	$	(20,755)	$	27,391
Origination of mortgage loan receivables (1)	61,412		—		—
Repayment of mortgage loan receivables (2)	(559,947)		—		—
Non-cash disposition of loans via foreclosure (3)	(30,497)		—		—
Net result from mortgage loan receivables held for sale (4)	—		—		(1,119)
Accretion/amortization of discount, premium and other fees	14,971		—		—
Release (addition) of provision for current expected credit loss, net (5)	—		(18,820)		—
Balance, September 30, 2023	$	3,371,685	$	(39,575)	$	26,272

(1)Includes funding of commitments on existing mortgage loans.

(2)Includes $28.2 million of repayments in transit.

(3)Refer to Note 5 Real Estate and Related Lease Intangibles, Net for further detail on foreclosure of real estate.

(4)Includes unrealized lower of cost or market adjustment and realized gain/loss on loans held for sale.

(5)Refer to “Allowance for Credit Losses” table below for further detail.

	Mortgage loan receivables held for investment, net, at amortized cost:
	Mortgage loans receivable		Allowance for credit losses		Mortgage loan  receivables held for sale
Balance, December 31, 2021	$	3,553,737	$	(31,752)	$	—
Origination of mortgage loan receivables (1)	1,183,423		—		61,318
Repayment of mortgage loan receivables	(720,597)		—		(68)
Proceeds from sales of mortgage loan receivables	—		—		(29,053)
Net result from mortgage loan receivables held for sale (2)	2,197		—		(4,380)
Accretion/amortization of discount, premium and other fees	14,932		—		—
Charge offs	(14,395)		14,395		—
Release (addition) of provision for current expected credit loss, net (3)	—		(1,117)		—
Balance, September 30, 2022	$	4,019,297	$	(18,474)	$	27,817

(1)Includes funding of commitments on existing mortgage loans.

(2)Represents unrealized lower of cost or market adjustment on loans held for sale.

(3)Refer to “Allowance for Credit Losses” table below for further detail.

Schedule of Provision for Loan Losses

Allowance for Credit Losses and Non-Accrual Status ($ in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
Allowance for Credit Losses	2023		2022		2023		2022
Allowance for credit losses at beginning of period	$	32,248	$	16,960	$	20,755	$	31,752
Provision for (release of) current expected credit loss, net (1)	7,327		1,514		18,820		4,222
Charge-offs	—		—		—		(14,395)
Recoveries (2)	—		—		—		(3,105)
Allowance for credit losses at end of period	$	39,575	$	18,474	$	39,575	$	18,474

(1)There were no asset-specific reserves recorded for the nine months ended September 30, 2023 or 2022.

(2)Recoveries are recognized within the consolidated statements of income through “Provision for (release of) loan loss reserves.”

Non-Accrual Status (1)	September 30, 2023(2)(3)		December 31, 2022(2)(4)
Amortized cost basis of loans on non-accrual status, net of asset-specific reserve	$	58,436	$	53,809

(1)As of September 30, 2023 and December 31, 2022, the loans on non-accrual status were greater than 90 days past due and are considered collateral dependent.

(2)Includes two retail loans with an amortized cost basis of $25.8 million and asset-specific reserves of $2.7 million.

(3)Includes one mixed-use loan with an amortized cost basis of $35.3 million, for which the Company determined no asset-specific reserve was necessary.

(4)Includes one mixed-use loan with an amortized cost basis of $30.5 million.

Schedule of Individually Impaired Loans

Loan Portfolio by Geographic Region, Collateral Type and Vintage (amortized cost $ in thousands)

	September 30,		December 31,
Geographic Region	2023		2022
Northeast	$	1,015,365	$	1,191,337
South	1,062,180		1,080,132
Southwest	482,865		675,069
Midwest	451,933		496,640
West	333,515		416,556
Subtotal mortgage loans receivable	3,345,858		3,859,734
Individually impaired loans	25,827		26,012
Total mortgage loans receivable	$	3,371,685	$	3,885,746

Management’s method for monitoring credit is the performance of a loan. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing the Company’s mortgage loan portfolio by collateral type. The primary credit quality indicator is reviewed and updated by management on a quarterly basis. The following tables summarize the amortized cost of the mortgage loan portfolio by collateral type as of September 30, 2023 and December 31, 2022, respectively ($ in thousands):

	Amortized Cost Basis by Origination Year as of September 30, 2023
Collateral Type	2023		2022		2021		2020		2019 and Earlier		Total (1)
Multifamily	$	14,420	$	548,555	$	664,065	$	—	$	—	$	1,227,040
Office	—		79,054		612,104		—		216,424		907,582
Mixed Use	—		200,949		322,957		—		41,392		565,298
Industrial	4,308		38,254		97,441		—		114,752		254,755
Retail	—		12,923		85,760		—		21,802		120,485
Manufactured Housing	—		32,625		82,854		—		—		115,479
Hospitality	—		—		18,574		—		92,226		110,800
Other	—		32,423		11,996		—		—		44,419
Subtotal mortgage loans receivable	18,728		944,783		1,895,751		—		486,596		3,345,858
Individually Impaired loans	—		—		—		—		25,827		25,827
Total mortgage loans receivable (2)	$	18,728	$	944,783	$	1,895,751	$	—	$	512,423	$	3,371,685

	Amortized Cost Basis by Origination Year as of December 31, 2022
Collateral Type	2022		2021		2020		2019		2018 and Earlier		Total
Multifamily	$	702,125	$	722,862	$	—	$	—	$	—	$	1,424,987
Office	78,754		676,431		29,650		58,684		136,512		980,031
Mixed Use	201,777		351,291		26,500		120,300		—		699,868
Industrial	37,616		96,486		—		115,545		—		249,647
Retail	60,089		107,305		—		12,953		9,126		189,473
Hospitality	—		45,416		—		13,843		78,364		137,623
Manufactured Housing	32,515		82,618		—		2,921		—		118,054
Other	32,353		19,898		—		7,800		—		60,051
Subtotal mortgage loans receivable	1,145,229		2,102,307		56,150		332,046		224,002		3,859,734
Individually Impaired loans	—		—		—		—		26,012		26,012
Total mortgage loans receivable (3)	$	1,145,229	$	2,102,307	$	56,150	$	332,046	$	250,014	$	3,885,746

(1)For the three and nine months ended September 30, 2023, there were no write offs.

(2)Not included above is $21.3 million of accrued interest receivable on all loans at September 30, 2023.

(3)Not included above is $23.2 million of accrued interest receivable on all loans at December 31, 2022.

XML

SECURITIES (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Securities Which are Classified as Available-for-sale

The following is a summary of the Company’s securities at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

						Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount			Amortized Cost Basis		Gains		Losses (7)		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS	$	484,501		$	483,880	$	136	$	(15,165)	$	468,851	(2)	67	AAA	6.64 %		6.79 %		2.08
CMBS interest-only(3)	888,870		(3)	7,487		145		(114)		7,518		(4)	9	AAA	0.43 %		6.44 %		1.13
GNMA interest-only(5)	43,946		(3)	230		28		(54)		204			14	AAA	0.31 %		5.59 %		3.05
Agency securities	25			25		—		(1)		24			1	AAA	4.00 %		2.70 %		1.18
Total debt securities	$	1,417,342		$	491,622	$	309	$	(15,334)	$	476,597	(6)	91		2.55	%	6.78	%	2.06
Equity securities	N/A			160		—		(39)		121			1	N/A	N/A		N/A		N/A
Allowance for current expected credit losses	N/A			—		—		(20)		(20)
Total securities	$	1,417,342		$	491,782	$	309	$	(15,393)	$	476,698		92

December 31, 2022

						Gross Unrealized								Weighted Average
Asset Type	Outstanding Face Amount			Amortized Cost Basis		Gains		Losses (7)		Carrying Value			# of Securities	Rating (1)	Coupon %		Yield %		Remaining Duration (years)
CMBS	$	562,839		$	562,246	$	—	$	(20,913)	$	541,333	(2)	71	AAA	5.22	%	5.32	%	1.06
CMBS interest-only(3)	1,026,195		(3)	10,498		121		(176)		10,443		(4)	10	AAA	0.41	%	3.65	%	1.45
GNMA interest-only(5)	45,369		(3)	285		17		(21)		281			14	AAA	0.31	%	4.23	%	3.30
Agency securities	36			36		—		(1)		35			1	AAA	4.00	%	2.70	%	1.54
U.S. Treasury securities	36,000			35,374		6		(52)		35,328			10	AAA	N/A		4.17	%	0.60
Total debt securities	$	1,670,439		$	608,439	$	144	$	(21,163)	$	587,420	(6)	106		2.06	%	5.29	%	1.07
Equity securities	N/A			160		—		(41)		119			1	N/A	N/A		N/A		N/A
Allowance for current expected credit losses	N/A			—		—		(20)		(20)
Total real estate securities	$	1,670,439		$	608,599	$	144	$	(21,224)	$	587,519		107

(1)Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple rating agencies, the highest rating is used. The ratings provided were determined by third-party rating agencies. The rates may not be current and are subject to change (including the assignment of a “negative outlook” or “credit watch”) at any time.

(2)As of September 30, 2023 and December 31, 2022, includes $9.0 million of restricted securities which are designated as risk retention securities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (“Dodd-Frank Act”) and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(3)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(4)As of September 30, 2023 and December 31, 2022, includes $0.3 million and $0.4 million, respectively of restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust and are classified as held-to-maturity and reported at amortized cost.

(5)GNMA interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings. The Company’s GNMA interest-only securities are considered to be hybrid financial instruments that contain embedded derivatives. As a result, the Company has elected to account for them as hybrid instruments in their entirety at fair value with changes in fair value recognized in unrealized gain (loss) on securities in the consolidated statements of income.

(6)The Company’s investments in debt securities represent an ownership interest in unconsolidated VIEs. The Company’s maximum exposure to loss from these unconsolidated VIEs is the amortized cost basis of the securities which represents the purchase price of the investment adjusted by any unamortized premiums or discounts as of the reporting date.

(7)Based on the Company’s analysis, including review of interest rate changes and current levels of subordination, among other factors, the unrealized loss positions are determined to be due to market factors other than credit.

Schedule of Fair Value of the Company's Securities by Remaining Maturity Based Upon Expected Cash Flows

The following summarizes the carrying value of the Company’s debt securities by remaining maturity based upon expected cash flows at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	109,188	$	346,226	$	13,437	$	—	$	468,851
CMBS interest-only	2,736		4,782		—		—		7,518
GNMA interest-only	13		100		91		—		204
Agency securities	—		24		—		—		24
Total securities (1)	$	111,937	$	351,132	$	13,528	$	—	$	476,597

(1)Excluded from the table above are $0.1 million of equity securities and $(20.0) thousand of allowance for current expected credit losses.

December 31, 2022

Asset Type	Within 1 year		1-5 years		5-10 years		After 10 years		Total
CMBS	$	346,272	$	195,061	$	—	$	—	$	541,333
CMBS interest-only	937		9,506		—		—		10,443
GNMA interest-only	40		111		130		—		281
Agency securities	—		35		—		—		35
U.S. Treasury securities	32,451		2,877		—		—		35,328
Total securities (1)	$	379,700	$	207,590	$	130	$	—	$	587,420

(1)Excluded from the table above are $0.1 million of equity securities and $(20.0) thousand of allowance for current expected credit losses.

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET (Tables)

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Schedule of Real Estate Properties by Category

The Company’s real estate assets were comprised of the following ($ in thousands):

	September 30, 2023		December 31, 2022
Land	$	167,158	$	158,802
Building	605,499		625,655
In-place leases and other intangibles	115,708		114,687
Undepreciated real estate and related lease intangibles	888,365		899,144
Less: Accumulated depreciation and amortization	(213,031)		(199,008)
Real estate and related lease intangibles, net(1)	$	675,334	$	700,136
Below market lease intangibles, net (other liabilities)(2)	$	(29,390)	$	(30,892)

(1)There was unencumbered real estate of $104.8 million and $140.3 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Below market lease intangibles is net of $15.2 million and $13.6 million of accumulated amortization as of September 30, 2023 and December 31, 2022, respectively.

Schedule of Depreciation and Amortization Expense Recorded

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense(1)	$	5,803	$	6,310	$	18,146	$	19,396
Amortization expense	1,341		1,554		3,998		5,368
Total real estate depreciation and amortization expense	$	7,144	$	7,864	$	22,144	$	24,764

(1)Depreciation expense on the consolidated statements of income also includes $0.1 million and $0.3 million of depreciation on corporate fixed assets for the three and nine months ended September 30, 2023, respectively, and $8 thousand for the nine months ended September 30, 2022.

Schedule of Lease Intangible Assets

The Company’s intangible assets are comprised of in-place leases, above market leases and other intangibles. The following tables present additional detail related to our intangible assets ($ in thousands):

	September 30, 2023		December 31, 2022
Gross intangible assets(1)	$	115,708	$	114,687
Accumulated amortization	53,938		49,725
Net intangible assets	$	61,770	$	64,962

(1)Includes $2.8 million of unamortized above market lease intangibles, which are included in real estate and related lease intangibles, net on the consolidated balance sheets as of September 30, 2023 and December 31, 2022.

The following table presents increases/reductions in operating lease income related to the amortization of above or below market leases recorded by the Company ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Reduction in operating lease income for amortization of above market lease intangibles acquired	$	(73)	$	(76)	$	(216)	$	(229)
Increase in operating lease income for amortization of below market lease intangibles acquired	526		513		1,576		1,547
Total	$	453	$	437	$	1,360	$	1,318

Schedule of Expected Amortization Expense Related to the Acquired In-place Lease Intangibles, for Property Owned

The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of September 30, 2023 ($ in thousands):

Period Ending December 31,	Increase/(Decrease) to Operating Lease Income		Amortization Expense
2023 (last three months)	$	448	$	1,430
2024	1,788		5,718
2025	1,773		5,509
2026	1,736		4,519
2027	1,699		4,332
Thereafter	19,152		37,471
Total	$	26,596	$	58,979

Schedule of Contractual Future Minimum Rent Under Leases

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at September 30, 2023 ($ in thousands):

Period Ending December 31,	Amount
2023 (last three months)	$	15,516
2024	57,029
2025	52,063
2026	50,712
2027	49,252
Thereafter	206,027
Total	$	430,599

Schedule of Real Estate Properties Acquired

The Company acquired the following properties during the nine months ended September 30, 2023 ($ in thousands):

Acquisition Date		Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
September 2023	(2)	Mixed use	New York, NY	$	30,400	100.0%
Total real estate acquisitions				$	30,400

(1)Properties were consolidated as of acquisition date.

(2)In September 2023, the Company acquired a mixed use portfolio consisting of four properties in New York, NY via foreclosure. The portfolio served as collateral for a mortgage loan receivable held for investment. The Company obtained a third-party appraisal of the property. The $30.4 million fair value was determined by using the sales comparison and income approaches. The appraiser utilized a terminal capitalization rate of 5.5%. There was no gain or loss resulting from the foreclosure of the loan. The key inputs used to determine fair value were determined to be Level 3 inputs.

The Company acquired the following properties during the nine months ended September 30, 2022 ($ in thousands):

Acquisition Date		Type	Primary Location(s)	Purchase Price/Fair Value on the Date of Foreclosure		Ownership Interest (1)
February 2022	(2)	Apartments	New York, NY	$	15,436	100.0%
Total real estate acquisitions				$	15,436

(1)Properties were consolidated as of acquisition date.

(2)In February 2022, the Company acquired, via change in control, a previously held interest in a non-controlling equity investment in a mixed use property with one remaining residential condo unit and one remaining retail condo unit in New York, New York. The carrying value of the property at the time of change in control was $15.4 million, which was determined to be fair value. The fair value of the remaining condo unit was determined based on comparable sales in the building and the value of the remaining retail unit was valued utilizing a direct capitalization rate of 5.5%. The key inputs used to determine fair value were determined to be Level 3 inputs.

Schedule of Properties Sold

The Company sold the following properties during the nine months ended September 30, 2023 ($ in thousands):

Sales Date	Type	Primary Location(s)		Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties
August 2023	Hotel	San Diego, CA	(1)	$	43,335	$	34,526	$	8,808	1
Totals				$	43,335	$	34,526	$	8,808

(1)Included within sales proceeds is $31.3 million of mortgage financing that was assumed by the buyer.

The Company sold the following properties during the nine months ended September 30, 2022 ($ in thousands):

Sales Date	Type	Primary Location(s)		Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties
March 2022	Office	Ewing, NJ		$	38,694	$	24,175	$	14,519	1
March 2022	Warehouse	Conyers, GA		40,752		26,116		14,636		1
June 2022	Apartments	Stillwater, OK		23,314		18,032		5,283		1
June 2022	Apartments	Miami, FL		60,856		37,585		23,270		1
September 2022	Retail	Wichita, KS		9,503		5,110		4,393		1
Totals			(1)	$	173,119	$	111,018	$	62,101

(1)Excludes $3.7 million of prepayment costs upon repayment of the mortgage financing in connection with the sales that is recorded within interest expense on the consolidated statement of income, such amount was correspondingly paid by the buyer and received by the Company as part of the sale and recorded in fee and other income on the consolidated statement of income.

XML

DEBT OBLIGATIONS, NET (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt Obligations

The details of the Company’s debt obligations at September 30, 2023 and December 31, 2022 are as follows ($ in thousands):

September 30, 2023

Debt Obligations	Committed / Principal Amount		Carrying Value of Debt Obligations			Committed but Unfunded		Interest Rate at September 30, 2023(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility	$	500,000	$	256,170		$	243,830	7.07%	—	7.47%	9/27/2025	(2)	(3)	$	351,242	$	351,242
Committed Loan Repurchase Facility	300,000		141,681			158,319		7.18%	—	8.33%	12/19/2023	(4)	(5)	222,705		219,355
Committed Loan Repurchase Facility	142,000		139,162			2,838		7.03%	—	7.57%	4/30/2024	(6)	(3)	65,027		65,027
Committed Loan Repurchase Facility	100,000		77,959			22,041		6.73%	—	7.23%	1/2/2024	(7)	(3)	103,831		103,831
Committed Loan Repurchase Facility	100,000		—			100,000		—%		—%	1/22/2024	(8)	(5)	—		—
Total Committed Loan Repurchase Facilities	1,142,000		614,972			527,028								742,805		739,455
Committed Securities Repurchase Facility	100,000		—			100,000		—%	—	—%	5/27/2024	N/A	(9)	—		—
Uncommitted Securities Repurchase Facility	N/A (10)		1,646			N/A (10)		6.54%	—	7.49%	10/19/2023	N/A	(9)	8,902		8,902		(11)
Total Repurchase Facilities	1,242,000		616,618			627,028								751,707		748,357
Revolving Credit Facility	323,850		—			323,850		—%	—	—%	7/27/2024	(12)	N/A (13)	N/A (13)		N/A (13)
Mortgage Loan Financing	437,448		437,739			—		4.39%	—	9.03%	2024-2031 (14)	N/A	(15)	478,428		624,663		(16)
CLO Debt	1,063,249		1,060,417		(17)	—		6.65%	—	9.10%	2024-2026 (18)	N/A	(3)	1,272,832		1,272,832
Borrowings from the FHLB	115,000		115,000			—		5.69%	—	5.81%	2023-2024	N/A	(19)	141,853		141,853		(20)
Senior Unsecured Notes	1,576,614		1,564,071		(21)	—		4.25%	—	5.25%	2025-2029	N/A	N/A (22)	N/A (22)		N/A (22)
Total Debt Obligations, Net	$	4,758,161	$	3,793,845		$	950,878							$	2,644,820	$	2,787,705

(1)Interest rates on floating rate debt reflect the applicable index in effect as of September 30, 2023.

(2)Two 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)Two additional 364-day periods at Company’s option.

(5)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(6)Three additional 12-month extension periods at Company’s option.

(7)One additional 12-month extension periods at Company’s option. No new advances are permitted.

(8)Two additional 12-month extension periods at Company's option. No new advances permitted during the final 12-month period.

(9)Commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(10)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(11)Includes $1.9 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(12)Three additional 12-month periods at Company’s option.

(13)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(14)Anticipated repayment dates.

(15)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(16)Using undepreciated carrying value of commercial real estate to approximate fair value.

(17)Presented net of unamortized debt issuance costs of $2.8 million at September 30, 2023.

(18)Represents the estimated maturity date based on the remaining reinvestment period and underlying loan maturities.

(19)Investment grade commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(20)Includes $2.3 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(21)Presented net of unamortized debt issuance costs of $12.5 million at September 30, 2023.

(22)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

December 31, 2022

Debt Obligations	Committed / Principal Amount		Carrying Value of Debt Obligations			Committed but Unfunded		Interest Rate at December 31, 2022(1)			Current Term Maturity	Remaining Extension Options	Eligible Collateral	Carrying Amount of Collateral		Fair Value of Collateral
Committed Loan Repurchase Facility(2)	$	500,000	$	318,983		$	181,017	6.07%	—	6.57%	9/27/2025	(2)	(3)	$	428,477	$	429,276
Committed Loan Repurchase Facility	100,000		—			100,000		—%	—	—%	2/26/2023	(4)	(5)	—		—
Committed Loan Repurchase Facility	300,000		157,558			142,442		6.19%	—	7.07%	12/19/2023	(6)	(7)	244,102		244,102
Committed Loan Repurchase Facility	100,000		47,415			52,585		6.00%	—	6.00%	4/30/2024	(8)	(3)	63,307		63,307
Committed Loan Repurchase Facility	100,000		77,959			22,041		5.74%	—	6.24%	1/3/2023	(2)	(3)	103,393		103,393
Committed Loan Repurchase Facility	100,000		—			100,000		—%		—%	1/22/2024	(9)	(7)	—		—
Committed Loan Repurchase Facility	100,000		14,979			85,021		7.07%	—	7.07%	7/14/2023	(10)	(11)	21,206		21,206
Total Committed Loan Repurchase Facilities	1,300,000		616,894			683,106								860,485		861,284
Committed Securities Repurchase Facility(2)	100,000		8,640			91,360		5.04%	—	5.29%	5/27/2023	N/A	(12)	10,023		10,023
Uncommitted Securities Repurchase Facility	N/A (13)		222,328			N/A (13)		4.73%	—	6.00%	3/2/2023	N/A	(12)	247,351		247,351		(14)
Total Repurchase Facilities	1,400,000		847,862			774,466								1,117,859		1,118,658
Revolving Credit Facility	323,850		—			323,850		—%	—	—%	7/27/2023	(15)	N/A (16)	N/A (16)		N/A (16)
Mortgage Loan Financing	497,454		497,991			—		4.25%	—	8.03%	2023 - 2031(17)	N/A	(18)	559,885		710,977		(19)
CLO Debt	1,064,365		1,058,462		(20)	—		5.52%	—	7.97%	2024 - 2026(21)	N/A	(3)	1,308,654		1,308,654
Borrowings from the FHLB	213,000		213,000			—		2.74%	—	4.70%	2023 - 2024	N/A	(22)	248,806		248,806		(23)
Senior Unsecured Notes	1,643,794		1,628,382		(24)	—		4.25%	—	5.25%	2025 - 2029	N/A	N/A (25)	N/A (25)		N/A (25)
Total Debt Obligations, Net	$	5,142,463	$	4,245,697		$	1,098,316							$	3,235,204	$	3,387,095

(1)LIBOR and Term SOFR rates in effect as of December 31, 2022 are used to calculate interest rates for floating rate debt, as applicable.

(2)Two 12-month extension periods at Company’s option. No new advances are permitted after the initial maturity date.

(3)First mortgage commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(4)One additional 12-month period at Company’s option.

(5)First mortgage commercial real estate loans. It does not include the real estate collateralizing such loans.

(6)Two additional 364-day periods at Company’s option.

(7)First mortgage and mezzanine commercial real estate loans and senior and pari passu interests therein. It does not include the real estate collateralizing such loans.

(8)Three additional 12-month extension periods at Company’s option.

(9)Two additional 12-month extension periods at Company's option. No new advances are permitted during the final 12-month period.

(10)The Company may extend periodically with lender’s consent. At no time can the maturity of the facility exceed 364 days from the date of determination.

(11)First mortgage, junior and mezzanine commercial real estate loans, and certain senior and/or pari passu interests therein.

(12)Commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(13)Represents uncommitted securities repurchase facilities for which there is no committed amount subject to future advances.

(14)Includes $2.0 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(15)Four additional 12-month periods at Company’s option.

(16)The obligations under the Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries and secured by equity pledges in certain Company subsidiaries.

(17)Anticipated repayment dates.

(18)Certain of our real estate investments serve as collateral for our mortgage loan financing.

(19)Using undepreciated carrying value of commercial real estate to approximate fair value.

(20)Presented net of unamortized debt issuance costs of $5.9 million at December 31, 2022.

(21)Represents the estimated maturity date based on the remaining reinvestment period and underlying loan maturities.

(22)Investment grade commercial real estate securities. It does not include the first mortgage commercial real estate loans collateralizing such securities.

(23)Includes $6.6 million of restricted securities under the risk retention rules of the Dodd-Frank Act. These securities are accounted for as held-to-maturity and recorded at amortized cost basis.

(24)Presented net of unamortized debt issuance costs of $15.4 million at December 31, 2022.

(25)The obligations under the senior unsecured notes are guaranteed by the Company and certain of its subsidiaries.

Schedule of Contractual Payments Under All Borrowings by Maturity

The following schedule reflects the Company’s contractual payments under all borrowings by maturity ($ in thousands): 

Period ending December 31,	Borrowings by Maturity(1)
2023 (last three months)	$	1,710
2024	417,827
2025	631,948
2026	89,161
2027	898,242
Thereafter	706,791
Subtotal	2,745,679
Debt issuance costs included in senior unsecured notes	(12,543)
Debt issuance costs included in mortgage loan financings	(1,677)
Premiums included in mortgage loan financings(2)	1,968
Total (3)	$	2,733,427

(1)The allocation of repayments under our committed loan repurchase facilities is based on the earlier of: (i) the maturity date of each agreement; or (ii) the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

(2)Represents deferred gains on intercompany mortgage loans, secured by our own real estate, sold into securitizations. These premiums are amortized as a reduction to interest expense.

(3)Total does not include $1.1 billion of consolidated CLO debt obligations and the related debt issuance costs of $2.8 million, as the satisfaction of these liabilities will be paid through cash flow from loan collateral including amortization and will not require cash outlays from us.

XML

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Breakdown of the Derivatives Outstanding

The following is a breakdown of the derivatives outstanding as of September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

				Fair Value				Remaining Maturity (years)
Contract Type	Notional			Asset(1)		Liability(1)
Caps
1 Month Term SOFR	$	90,000		$	1,520	$	—	0.88
Futures
5-year Treasury-Note Futures	20,500			32		—		0.25
10-year Treasury-Note Futures	51,400			81		—		0.25
Total futures	71,900			113		—
Options
Options	N/A		(2)	184		—		0.24
Total derivatives	$	161,900		$	1,817	$	—

(1)Shown as derivative instruments in the accompanying consolidated balance sheets.

(2)The Company held 556 options contracts as of September 30, 2023.

December 31, 2022

				Fair Value				Remaining Maturity (years)
Contract Type	Notional			Asset(1)		Liability(1)
Caps
1 Month Term SOFR	$	90,000		$	1,804	$	—	1.68
Futures
5-year Treasury-Note Futures	44,200			51		—		0.25
10-year Treasury-Note Futures	61,400			71		—		0.25
Total futures	105,600			122		—
Options
Options	N/A		(2)	112		—		0.20
Total derivatives	$	195,600		$	2,038	$	—

(1)Shown as derivative instruments in the accompanying consolidated balance sheets.

(2)The Company held 91 options contracts as of December 31, 2022.

Schedule of Net Realized Gains/(Losses) and Unrealized Appreciation/(Depreciation) on Derivatives

The following table summarizes the net realized gains (losses) and unrealized gains (losses) on derivatives, by primary underlying risk exposure, as included in net result from derivatives transactions in the consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):

	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
Contract Type	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Caps	$	(294)	$	378	$	84	$	(284)	$	962	$	678
Futures	99		4,579		4,678		(8)		6,162		6,154
Options	11		—		11		117		(269)		(152)
Total	$	(184)	$	4,957	$	4,773	$	(175)	$	6,855	$	6,680

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
Contract Type	Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions		Unrealized Gain/(Loss)		Realized Gain/(Loss)		Net Result from Derivative Transactions
Caps	$	747	$	—	$	747	$	736	$	648	$	1,384
Futures	539		5,120		5,659		(83)		10,919		10,836
Options	161		—		161		161		—		161
Total	$	1,447	$	5,120	$	6,567	$	814	$	11,567	$	12,381

XML

OFFSETTING ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2023

Offsetting [Abstract]

Schedule of Offsetting of Financial Assets

The following table represents offsetting of financial assets and derivative assets as of September 30, 2023 ($ in thousands): 

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	1,817	$	—	$	1,817	$	—	$	(1,711)	$	106
Total	$	1,817	$	—	$	1,817	$	—	$	(1,711)	$	106

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial assets and derivative assets as of December 31, 2022 ($ in thousands):

Description	Gross amounts of recognized assets		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments		Cash collateral received/(posted)(1)
Derivatives	$	2,038	$	—	$	2,038	$	—	$	(2,505)	$	(467)
Total	$	2,038	$	—	$	2,038	$	—	$	(2,505)	$	(467)

(1)Included in restricted cash on consolidated balance sheets.

Schedule of Offsetting of Financial Liabilities

The following table represents offsetting of financial liabilities and derivative liabilities as of September 30, 2023 ($ in thousands): 

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	616,618	$	—	$	616,618	$	616,618	$	—	$	616,618
Total	$	616,618	$	—	$	616,618	$	616,618	$	—	$	616,618

(1)Included in restricted cash on consolidated balance sheets.

The following table represents offsetting of financial liabilities and derivative liabilities as of December 31, 2022 ($ in thousands):

Description	Gross amounts of recognized liabilities		Gross amounts offset in the balance sheet		Net amounts of liabilities presented in the balance sheet		Gross amounts not offset in the balance sheet				Net amount
							Financial instruments collateral		Cash collateral posted/(received)(1)
Repurchase agreements	$	847,863	$	—	$	847,863	$	847,863	$	19,128	$	828,735
Total	$	847,863	$	—	$	847,863	$	847,863	$	19,128	$	828,735

(1)Included in restricted cash on consolidated balance sheets.

XML

CONSOLIDATED VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

The Company consolidates on its balance sheet two CLOs that are considered VIEs as of September 30, 2023 and December 31, 2022 ($ in thousands):

	September 30, 2023		December 31, 2022
Restricted cash	$	36,844	$	4,902
Mortgage loan receivables held for investment, net, at amortized cost	1,272,832		1,308,654
Accrued interest receivable	8,743		8,313
Other assets	23,089		17,505
Total assets	$	1,341,508	$	1,339,374
Debt obligations, net	$	1,060,417	$	1,058,462
Accrued expenses	3,385		3,029
Other liabilities	—		65
Total liabilities	1,063,802		1,061,556
Net equity in VIEs (eliminated in consolidation)	277,706		277,818
Total equity	277,706		277,818
Total liabilities and equity	$	1,341,508	$	1,339,374

XML

EQUITY STRUCTURE AND ACCOUNTS (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Common Stock Repurchase Activity

The following tables summarize the Company’s repurchase activity of its Class A common stock during the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Shares	Amount(1)
Authorizations remaining as of December 31, 2022		$	46,737
Repurchases paid:
March 1, 2023 - March 31, 2023	250,000	(2,285)
September 1 - September 30, 2023	19,000	(196)
Authorizations remaining as of September 30, 2023		$	44,256

(1)Amount excludes commissions paid associated with share repurchases.

	Shares	Amount(1)
Authorizations remaining as of December 31, 2021		$	44,122
Additional authorizations(2)		10,534
Repurchases paid	721,299	(7,279)
Authorizations remaining as of September 30, 2022		$	47,377

(1)Amount excludes commissions paid associated with share repurchases.

(2)On July 27, 2022 the Board authorized repurchases up to $50.0 million in aggregate.

Schedule of Dividends Declared and Paid

The following table presents dividends declared (on a per share basis) of Class A common stock for the nine months ended September 30, 2023 and 2022:

Declaration Date	Dividend per Share
March 15, 2023	$	0.23
June 15, 2023	0.23
September 15, 2023	0.23
Total	$	0.69
March 15, 2022	$	0.20
June 15, 2022	0.22
September 15, 2022	0.23
Total	$	0.65

Schedule of Accumulated Other Comprehensive Income

The following table presents changes in accumulated other comprehensive income related to the cumulative difference between the fair market value and the amortized cost basis of securities classified as available for sale for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Accumulated Other Comprehensive Income (Loss)
December 31, 2022	$	(21,009)
Other comprehensive income (loss)	6,130
September 30, 2023	$	(14,879)

	Accumulated Other Comprehensive Income (Loss)
December 31, 2021	$	(4,112)
Other comprehensive income (loss)	(14,699)
September 30, 2022	$	(18,811)

XML

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of the Company's Net Income and Weighted Average Shares Outstanding

The Company’s net income (loss) and weighted average shares outstanding for the three and nine months ended September 30, 2023 and 2022 consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands except share amounts)	2023		2022		2023		2022
Basic and Diluted Net income (loss) available for Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Weighted average shares outstanding:
Basic	124,730,343		124,278,732		124,652,426		124,393,861
Diluted	124,968,545		125,172,180		124,817,335		125,813,280

Schedule of Calculation of Basic and Diluted Net Income Per Share Amounts

The calculation of basic and diluted net income (loss) per share amounts for the three and nine months ended September 30, 2023 and 2022 consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except share and per share amounts) (1)	2023		2022		2023		2022
Basic Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Denominator:
Weighted average number of shares of Class A common stock outstanding	124,730,343		124,278,732		124,652,426		124,393,861
Basic net income (loss) per share of Class A common stock	$	0.25	$	0.23	$	0.66	$	0.66
Diluted Net Income (Loss) Per Share of Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$	31,319	$	28,583	$	81,889	$	82,663
Diluted net income (loss) attributable to Class A common shareholders	31,319		28,583		81,889		82,663
Denominator:
Basic weighted average number of shares of Class A common stock outstanding	124,730,343		124,278,732		124,652,426		124,393,861
Add - dilutive effect of:
Incremental shares of unvested Class A restricted stock(1)	238,202		893,448		164,909		1,419,419
Diluted weighted average number of shares of Class A common stock outstanding (2)	124,968,545		125,172,180		124,817,335		125,813,280
Diluted net income (loss) per share of Class A common stock	$	0.25	$	0.23	$	0.66	$	0.66

(1)The Company applies the treasury stock method.

(2)There were 299,641 and 440,573 anti-dilutive shares for the three and nine months ended September 30, 2023.

XML

STOCK-BASED AND OTHER COMPENSATION PLANS (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Based Compensation Plans

The following table summarizes the impact on the consolidated statements of income of the various stock-based compensation plans and other compensation plans ($ in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock-based compensation expense	$	3,205	$	3,738	$	15,375	$	27,787
Total Stock-Based Compensation Expense	$	3,205	$	3,738	$	15,375	$	27,787

Schedule of the Grants

A summary of the grants is presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	Number of Shares/Options	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share		Number of Shares	Weighted Average Fair Value Per Share
Grants - Class A Common Stock	—	$	—	7,179	$	9.75	1,417,561	$	11.58	2,884,303	$	11.87

Schedule of Nonvested Shares Activity

The table below presents the number of unvested shares of Class A common stock and outstanding stock options at September 30, 2023 and changes during 2023 of the Class A common stock and stock options of Ladder Capital Corp granted under the 2014 Omnibus Incentive Plan:

	Restricted Stock	Weighted Average Grant Date Fair Value		Stock Options
Nonvested/Outstanding at December 31, 2022	2,529,571	$	12.62	623,788
Granted	1,417,561	11.58		—
Vested	(1,699,744)	12.14		—
Forfeited	(49,425)	10.43		—
Nonvested/Outstanding at September 30, 2023	2,197,963	$	12.37	623,788
Exercisable at September 30, 2023 (1)				623,788

(1)The weighted average exercise price of outstanding options is $14.84 at September 30, 2023.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Fair Value

The carrying values and estimated fair values of the Company’s financial instruments, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at September 30, 2023 and December 31, 2022 are as follows ($ in thousands):

September 30, 2023

									Weighted Average
	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	484,501		$	483,880	$	468,851	Internal model, third-party inputs	6.79	%	2.08
CMBS interest-only(1)	888,870		(2)	7,487		7,518		Internal model, third-party inputs	6.44	%	1.13
GNMA interest-only(3)	43,946		(2)	230		204		Internal model, third-party inputs	5.59	%	3.05
Agency securities(1)	25			25		24		Internal model, third-party inputs	2.70	%	1.18
Equity securities(3)	N/A			160		121		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost(4)	3,380,845			3,371,773		3,365,688		Discounted Cash Flow(5)	9.77	%	0.79
Mortgage loan receivables held for sale	31,350			26,272		26,272		Internal model, third-party inputs(6)	4.57	%	8.44
FHLB stock(7)	5,175			5,175		5,175		(7)	7.50	%	N/A
Nonhedge derivatives(1)(10)	161,900			1,817		1,817		Counterparty quotations	N/A		1.10
Liabilities:
Repurchase agreements - short-term	360,447			360,447		360,447		Cost plus Accrued Interest (8)	6.61	%	0.14
Repurchase agreements - long-term	256,170			256,170		256,170		Discounted Cash Flow(9)	6.20	%	1.99
Mortgage loan financing	437,448			437,739		417,967		Discounted Cash Flow	5.87	%	2.90
CLO debt	1,063,249			1,060,417		1,060,417		Discounted Cash Flow(9)	7.55	%	2.14
Borrowings from the FHLB	115,000			115,000		115,000		Discounted Cash Flow	2.88	%	0.82
Senior unsecured notes	1,576,614			1,564,071		1,367,484		Internal model, third-party inputs	4.66	%	4.02

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $39.6 million at September 30, 2023.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)For repurchase agreements - short term, the value approximates the cost plus accrued interest.

(9)For repurchase agreements - long term and CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

December 31, 2022

									Weighted Average
	Principal Amount			Amortized Cost Basis/Purchase Price		Fair Value		Fair Value Method	Yield %		Remaining Maturity/Duration (years)
Assets:
CMBS(1)	$	562,839		$	562,246	$	541,333	Internal model, third-party inputs	5.32	%	1.06
CMBS interest-only(1)	1,026,195		(2)	10,498		10,443		Internal model, third-party inputs	3.65	%	1.45
GNMA interest-only(3)	45,369		(2)	285		281		Internal model, third-party inputs	4.23	%	3.30
Agency securities(1)	36			36		35		Internal model, third-party inputs	2.70	%	1.54
U.S. Treasury securities(1)	36,000			35,328		35,328		Internal model, third-party inputs	4.17	%	0.60
Equity securities(3)	N/A			160		118		Observable market prices	N/A		N/A
Mortgage loan receivables held for investment, net, at amortized cost(4)	3,907,295			3,885,746		3,875,708		Discounted Cash Flow(5)	8.85	%	1.26
Mortgage loan receivables held for sale	31,350			27,391		27,391		Internal model, third-party inputs(6)	4.57	%	9.19
FHLB stock(7)	9,585			9,585		9,585		(7)	4.75	%	N/A
Nonhedge derivatives(1)(10)	204,700			2,038		2,038		Counterparty quotations	N/A		1.52
Liabilities:
Repurchase agreements - short-term	481,465			481,465		481,465		Cost plus Accrued Interest (8)	4.04	%	0.37
Repurchase agreements - long-term	366,398			366,398		366,398		Discounted Cash Flow(9)	4.06	%	2.56
Mortgage loan financing	497,454			497,991		477,101		Discounted Cash Flow	5.51	%	3.36
CLO debt	1,064,365			1,058,462		1,058,462		Discounted Cash Flow(9)	6.35	%	15.92
Borrowings from the FHLB	213,000			213,000		213,055		Discounted Cash Flow	1.61	%	1.25
Senior unsecured notes	1,643,794			1,628,382		1,397,977		Internal model, third-party inputs	4.66	%	4.75

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity.

(2)Represents notional outstanding balance of underlying collateral.

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.

(4)Balance does not include impact of allowance for current expected credit losses of $20.8 million at December 31, 2022.

(5)Fair value for floating rate mortgage loan receivables, held for investment is estimated to approximate the outstanding face amount given the short interest rate reset risk (30 days) and no significant change in credit risk. Fair value for fixed rate mortgage loan receivables, held for investment is measured using a discounted cash flow model.

(6)Fair value for mortgage loan receivables, held for sale is measured using a hypothetical securitization model utilizing market data from recent securitization spreads and pricing.

(7)Fair value of the FHLB stock approximates outstanding face amount as the Company’s captive insurance subsidiary is restricted from trading the stock and can only put the stock back to the FHLB, at the FHLB’s discretion, at par.

(8)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(9)Fair value for repurchase agreement liabilities - short term borrowings under the Secured Financing Facility and borrowings under the Revolving Credit Facility is estimated to approximate carrying amount primarily due to the short interest rate reset risk (30 days) of the financings and the high credit quality of the assets collateralizing these positions. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(10)For repurchase agreements - long term and CLO debt, the carrying value approximates the fair value discounting the expected cash flows at current market rates. If the collateral is determined to be impaired, the related financing would be revalued accordingly. There are no impairments on any positions.

(11)The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

Summary of Financial Assets and Liabilities, both reported at Fair Value on a Recurring Basis or Amortized Cost/Par

The following table summarizes the Company’s financial assets and liabilities, which are both reported at fair value on a recurring basis (as indicated) or amortized cost/par, at September 30, 2023 and December 31, 2022 ($ in thousands):

September 30, 2023

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	475,186		$	—	$	—	$	459,877	$	459,877
CMBS interest-only(1)	880,509		(2)	—		—		7,182		7,182
GNMA interest-only(3)	43,946		(2)	—		—		204		204
Agency securities(1)	25			—		—		24		24
Equity securities	N/A			121		—		—		121
Nonhedge derivatives(4)	161,900			—		1,817		—		1,817
				$	121	$	1,817	$	467,287	$	469,225
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost(5)	$	3,380,845		$	—	$	—	$	3,365,688	$	3,365,688
Mortgage loan receivable held for sale(6)	31,350			—		—		26,272		26,272
CMBS(7)	9,316			—		—		8,974		8,974
CMBS interest-only(7)	8,361			—		—		336		336
FHLB stock	5,175			—		—		5,175		5,175
				$	—	$	—	$	3,406,445	$	3,406,445
Liabilities:
Repurchase agreements - short-term	$	360,447		$	—	$	—	$	360,447	$	360,447
Repurchase agreements - long-term	256,170			—		—		256,170		256,170
Mortgage loan financing	437,448			—		—		417,967		417,967
CLO debt	1,063,249			—		—		1,060,417		1,060,417
Borrowings from the FHLB	115,000			—		—		115,000		115,000
Senior unsecured notes	1,576,614			—		—		1,367,484		1,367,484
				$	—	$	—	$	3,577,485	$	3,577,485

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $39.6 million at September 30, 2023.

(6)A lower of cost or market adjustment was recorded as of September 30, 2023.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.

December 31, 2022

Financial Instruments Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
CMBS(1)	$	553,424		$	—	$	—	$	532,304	$	532,304
CMBS interest-only(1)	1,017,735		(2)	—		—		10,026		10,026
GNMA interest-only(3)	45,369		(2)	—		—		281		281
Agency securities(1)	36			—		—		35		35
Equity securities	N/A			118		—		—		118
U.S. Treasury securities	36,000			35,328		—		—		35,328
Nonhedge derivatives(4)	204,700			—		2,038		—		2,038
				$	35,446	$	2,038	$	542,646	$	580,130
Financial Instruments Not Reported at Fair Value on Consolidated Statements of Financial Condition	Principal Amount			Fair Value
				Level 1		Level 2		Level 3		Total
Assets:
Mortgage loan receivable held for investment, net, at amortized cost:
Mortgage loan receivables held for investment, net, at amortized cost(5)	$	3,907,295		$	—	$	—	$	3,875,708	$	3,875,708
Mortgage loan receivable held for sale(6)	31,350			—		—		27,391		27,391
CMBS(7)	9,415			—		—		9,030		9,030
CMBS interest-only(7)	8,460			—		—		417		417
FHLB stock	9,585			—		—		9,585		9,585
				$	—	$	—	$	3,922,131	$	3,922,131
Liabilities:
Repurchase agreements - short-term	$	481,465		$	—	$	—	$	481,465	$	481,465
Repurchase agreements - long-term	366,398			—		—		366,398		366,398
Mortgage loan financing	497,454			—		—		477,101		477,101
CLO debt	1,064,365			—		—		1,058,462		1,058,462
Borrowings from the FHLB	213,000			—		—		213,055		213,055
Senior unsecured notes	1,643,794			—		—		1,397,977		1,397,977
				$	—	$	—	$	3,994,458	$	3,994,458

(1)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded as a component of other comprehensive income (loss) in equity. 

(2)Represents notional outstanding balance of underlying collateral. 

(3)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings. 

(4)Measured at fair value on a recurring basis with the net unrealized gains or losses recorded in current period earnings.  The outstanding face amount of the nonhedge derivatives represents the notional amount of the underlying contracts.

(5)Balance does not include impact of allowance for current expected credit losses of $20.8 million at December 31, 2022.

(6)A lower of cost or market adjustment was recorded as of December 31, 2022.

(7)Restricted securities which are designated as risk retention securities under the Dodd-Frank Act and are therefore subject to transfer restrictions over the term of the securitization trust, are classified as held-to-maturity and reported at amortized cost.

Schedule of Changes in Level 3 of Financial Instruments

The following table summarizes changes in Level 3 financial instruments reported at fair value on the consolidated statements of financial condition for the nine months ended September 30, 2023 and 2022 ($ in thousands):

	Nine Months Ended September 30,
Level 3	2023		2022
Balance at January 1,	$	542,646	$	692,864
Transfer from level 2	—		—
Purchases	73,591		55,716
Sales	(14,930)		(4,261)
Paydowns/maturities	(136,892)		(135,988)
Amortization of premium/discount	(2,796)		(3,503)
Unrealized gain/(loss)	5,949		(14,719)
Realized gain/(loss) on sale	(281)		(106)
Balance at September 30,	$	467,287	$	590,003

Schedule of Quantitative Information

The following is quantitative information about significant unobservable inputs in our Level 3 measurements for those assets and liabilities measured at fair value on a recurring basis ($ in thousands):

September 30, 2023

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	459,877		Discounted cash flow	Yield (4)	2.86	%	6.76	%	17.54	%
CMBS interest-only(1)	7,182		(2)	Discounted cash flow	Yield (4)	2.73	%	6.57	%	21.81	%
GNMA interest-only(3)	204		(2)	Discounted cash flow	Yield (4)	1.28	%	9.46	%	10.00	%
Agency securities(1)	24			Discounted cash flow	Yield (4)	2.70	%	2.70	%	2.70	%
Total	$	467,287

December 31, 2022

Financial Instrument	Carrying Value			Valuation Technique	Unobservable Input	Minimum		Weighted Average		Maximum
CMBS(1)	$	532,304		Discounted cash flow	Yield (4)	2.89	%	5.29	%	17.47	%
CMBS interest-only(1)	10,026		(2)	Discounted cash flow	Yield (4)	1.39	%	3.72	%	19.66	%
GNMA interest-only(3)	281		(2)	Discounted cash flow	Yield (4)	1.28	%	5.50	%	10.00	%
Agency securities(1)	35			Discounted cash flow	Yield (4)	2.70	%	2.70	%	2.70	%
Total	$	542,646

(1)CMBS, CMBS interest-only securities, Agency securities, GNMA permanent securities, U.S. Treasury securities and corporate bonds are classified as available-for-sale and reported at fair value with changes in fair value recorded in the current period in other comprehensive income.

(2)The amounts presented represent the principal amount of the mortgage loans outstanding in the pool in which the interest-only securities participate.

(3)GNMA interest-only securities are recorded at fair value with changes in fair value recorded in current period earnings.

Sensitivity of the Fair Value to Changes in the Unobservable Inputs

(4)Significant increase (decrease) in the unobservable input in isolation would result in significantly lower (higher) fair value measurement.

XML

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Obligations under Non-cancelable Operating Leases

Future minimum lease payments under non-cancelable operating leases as of September 30, 2023 are as follows ($ in thousands):

2023 (last three months)	$	473
2024	2,171
2025	2,207
2026	2,219
2027	2,232
Thereafter	13,344
Total undiscounted cash flows	22,646
Present value discount (1)	(6,026)
Lease liabilities	$	16,620

(1)Lease liabilities were discounted at the Company's weighted average incremental borrowing rate for similar collateral, which is estimated to be 6.62%, and the remaining lease term is 9.8 years.

XML

SEGMENT REPORTING (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Company's Performance Evaluation by Segment

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

Three months ended September 30, 2023	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	82,814	$	7,810	$	1	$	10,465	$	101,090
Interest expense	(32,601)		(52)		(7,677)		(21,929)		(62,259)
Net interest income (expense)	50,213		7,758		(7,676)		(11,464)		38,831
(Provision for) release of loan loss reserves	(7,473)		—		—		—		(7,473)
Net interest income (expense) after provision for (release of) loan reserves	42,740		7,758		(7,676)		(11,464)		31,358
Real estate operating income	—		—		24,761		—		24,761
Net result from mortgage loan receivables held for sale	(629)		—		—		—		(629)
Realized gain (loss) on securities	—		23		—		—		23
Unrealized gain (loss) on securities	—		(42)		—		—		(42)
Realized gain on sale of real estate, net	—		—		8,808		—		8,808
Fee and other income	1,518		4		134		173		1,829
Net result from derivative transactions	4,449		241		83		—		4,773
Earnings (loss) from investment in unconsolidated ventures	—		—		479		—		479
Gain (loss) on extinguishment of debt	—		—		—		921		921
Total other income (loss)	5,338		226		34,265		1,094		40,923
Compensation and employee benefits	—		—		—		(14,285)		(14,285)
Operating expenses	—		—		—		(4,775)		(4,775)
Real estate operating expenses	—		—		(9,456)		—		(9,456)
Investment related expenses	(1,704)		(48)		(190)		(337)		(2,279)
Depreciation and amortization	—		—		(7,034)		(110)		(7,144)
Total costs and expenses	(1,704)		(48)		(16,680)		(19,507)		(37,939)
Income tax (expense) benefit	—		—		—		(3,147)		(3,147)
Segment profit (loss)	$	46,374	$	7,936	$	9,909	$	(33,024)	$	31,195
Total assets as of September 30, 2023	$	3,358,382	$	476,698	$	682,366	$	985,696	$	5,503,142

Three months ended September 30, 2022	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	70,851	$	5,705	$	2	$	801	$	77,359
Interest expense	(17,344)		(1,327)		(8,088)		(21,712)		(48,471)
Net interest income (expense)	53,507		4,378		(8,086)		(20,911)		28,888
(Provision for) release of loan loss reserves	(1,501)		—		—		—		(1,501)
Net interest income (expense) after provision for (release of) loan reserves	52,006		4,378		(8,086)		(20,911)		27,387
Real estate operating income	—		—		27,679		—		27,679
Net result from mortgage loan receivables held for sale	796		—		—		—		796
Realized gain (loss) on securities	—		9		—		—		9
Unrealized gain (loss) on securities	—		(66)		—		—		(66)
Realized gain on sale of real estate, net	—		—		4,393		—		4,393
Fee and other income	2,546		11		—		140		2,697
Net result from derivative transactions	4,837		982		748		—		6,567
Earnings (loss) from investment in unconsolidated ventures	—		—		407		—		407
Total other income (loss)	8,179		936		33,227		140		42,482
Compensation and employee benefits	—		—		—		(13,806)		(13,806)
Operating expenses	—		—		—		(5,143)		(5,143)
Real estate operating expenses	—		—		(10,069)		—		(10,069)
Investment related expenses	(917)		(102)		(138)		(532)		(1,689)
Depreciation and amortization	—		—		(7,864)		—		(7,864)
Total costs and expenses	(917)		(102)		(18,071)		(19,481)		(38,571)
Income tax (expense) benefit	—		—		—		(2,613)		(2,613)
Segment profit (loss)	$	59,268	$	5,212	$	7,070	$	(42,865)	$	28,685
Total assets as of December 31, 2022	$	3,892,382	$	587,519	$	706,355	$	764,917	$	5,951,173

Nine months ended September 30, 2023	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	261,822	$	23,964	$	5	$	20,924	$	306,715
Interest expense	(92,236)		(3,149)		(22,053)		(66,912)		(184,350)
Net interest income (expense)	169,586		20,815		(22,048)		(45,988)		122,365
(Provision for) release of loan loss reserves	(19,090)		—		—		—		(19,090)
Net interest income (expense) after provision for (release of) loan reserves	150,496		20,815		(22,048)		(45,988)		103,275
Real estate operating income	—		—		73,847		—		73,847
Net result from mortgage loan receivables held for sale	(1,119)		—		—		—		(1,119)
Realized gain (loss) on securities	—		(276)		—		—		(276)
Unrealized gain (loss) on securities	—		(20)		—		—		(20)
Realized gain on sale of real estate, net	—		—		8,808		—		8,808
Fee and other income	6,363		12		135		477		6,987
Net result from derivative transactions	5,390		612		678		—		6,680
Earnings (loss) from investment in unconsolidated ventures	—		—		913		—		913
Gain (loss) on extinguishment of debt	—		—		—		10,600		10,600
Total other income (loss)	10,634		328		84,381		11,077		106,420
Compensation and employee benefits	—		—		—		(50,612)		(50,612)
Operating expenses	—		—		—		(15,018)		(15,018)
Real estate operating expenses	—		—		(29,071)		—		(29,071)
Investment related expenses	(4,459)		(144)		(765)		(1,092)		(6,460)
Depreciation and amortization	—		—		(21,822)		(322)		(22,144)
Total costs and expenses	(4,459)		(144)		(51,658)		(67,044)		(123,305)
Income tax (expense) benefit	—		—		—		(4,913)		(4,913)
Segment profit (loss)	$	156,671	$	20,999	$	10,675	$	(106,868)	$	81,477
Total assets as of September 30, 2023	$	3,358,382	$	476,698	$	682,366	$	985,696	$	5,503,142

Nine months ended September 30, 2022	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	185,212	$	12,650	$	4	$	966	$	198,832
Interest expense	(44,330)		(2,429)		(27,642)		(63,811)		(138,212)
Net interest income (expense)	140,882		10,221		(27,638)		(62,845)		60,620
(Provision for) release of loan loss reserves	(1,373)		—		—		—		(1,373)
Net interest income (expense) after provision for (release of) loan reserves	139,509		10,221		(27,638)		(62,845)		59,247
Real estate operating income	—		—		82,678		—		82,678
Net result from mortgage loan receivables held for sale	(2,083)		—		—		—		(2,083)
Realized gain (loss) on securities	—		(75)		—		—		(75)
Unrealized gain (loss) on securities	—		(98)		—		—		(98)
Realized gain on sale of real estate, net	—		—		62,101		—		62,101
Fee and other income	8,147		45		3,704		342		12,238
Net result from derivative transactions	8,761		2,235		1,385		—		12,381
Earnings (loss) from investment in unconsolidated ventures	—		—		1,197		—		1,197
Gain (loss) on extinguishment of debt	—		—		—		685		685
Total other income (loss)	14,825		2,107		151,065		1,027		169,024
Compensation and employee benefits	—		—		—		(59,165)		(59,165)
Operating expenses	—		—		—		(15,303)		(15,303)
Real estate operating expenses	—		—		(28,928)		—		(28,928)
Investment related expenses	(1,715)		(200)		(437)		(2,811)		(5,163)
Depreciation and amortization	—		—		(24,756)		(8)		(24,764)
Total costs and expenses	(1,715)		(200)		(54,121)		(77,287)		(133,323)
Income tax (expense) benefit	—		—		—		(3,897)		(3,897)
Segment profit (loss)	$	152,619	$	12,128	$	69,306	$	(143,002)	$	91,051
Total assets as of December 31, 2022	$	3,892,382	$	587,519	$	706,355	$	764,917	$	5,951,173

(1)Includes the Company’s investment in unconsolidated ventures that held real estate of $7.0 million and $6.2 million as of September 30, 2023 and December 31, 2022, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in FHLB stock of $5.2 million as of September 30, 2023 and $9.6 million as of December 31, 2022, and the Company’s senior unsecured notes of $1.6 billion at September 30, 2023 and December 31, 2022.

XML

ORGANIZATION AND OPERATIONS (Details)	Sep. 30, 2023
LCFH
ORGANIZATION AND OPERATIONS
Ownership interest in LCFH	100.00%

XML

MORTGAGE LOAN RECEIVABLES - Schedule of Mortgage Loans (Details) $ in Thousands	1 Months Ended	9 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) security	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount		$ 3,412,195	$ 3,938,615
Allowance for credit losses		(39,575)	(20,755)	$ (32,248)	$ (18,474)	$ (16,960)	$ (31,752)
Carrying Value	$ 51,500	$ 3,358,382	$ 3,892,382
Weighted average yield		9.73%	8.82%
Remaining maturity		9 months 18 days	1 year 3 months 18 days
Principal balance of loans on non-accrual status		$ 58,436	$ 53,809
Deferred origination fees and other items		9,200	21,500
Number of loans | security	1
First mortgage loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount		3,343,499	3,841,315
Carrying value gross, consumer and commercial real estate		$ 3,334,385	$ 3,819,860
Weighted average yield		9.75%	8.83%
Remaining maturity		9 months 18 days	1 year 3 months 18 days
Mezzanine loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount		$ 37,346	$ 65,950
Carrying value gross, consumer and commercial real estate		$ 37,300	$ 65,886
Weighted average yield		11.53%	10.62%
Remaining maturity		1 year 1 month 6 days	1 year 7 months 6 days
Total mortgage loans receivable
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount		$ 3,380,845	$ 3,907,265
Carrying value gross, consumer and commercial real estate		$ 3,371,685	$ 3,885,746
Weighted average yield		9.77%	8.85%
Remaining maturity		9 months 18 days	1 year 3 months 18 days
Total mortgage loan receivables held for investment, net, at amortized cost
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount		$ 3,380,845	$ 3,907,265
Allowance for credit losses		(39,575)	(20,755)		$ (18,474)		$ (31,752)
Carrying Value		$ 3,332,110	3,864,991
Remaining maturity		2 years
Mortgage loan receivables held for sale, First Mortgage Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding Face Amount		$ 31,350	31,350
Carrying Value		$ 26,272	$ 27,391
Weighted average yield		4.57%	4.57%
Remaining maturity		8 years 4 months 24 days	9 years 2 months 12 days
Mortgage loan receivables held for sale, First Mortgage Loans | US Treasury (UST) Interest Rate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Cost or market adjustment of interest, percentage		5.94%	516.00%

XML

MORTGAGE LOAN RECEIVABLES - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) property loans	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) loans	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding face amount	$ 3,412,195		$ 3,412,195		$ 3,938,615
Allowance for current expected credit losses	40,600		40,600		21,500
General CECL Reserve	39,575	$ 18,474	39,575	$ 18,474	20,755	$ 32,248	$ 16,960	$ 31,752
Increase in reserve of unfunded commitments	1,000		1,000		700
Individually impaired loans	25,827		25,827		26,012
Provision for (release of) loan loss reserves, net	7,473	1,501	19,090	1,373
Recoveries	0	0	0	3,105
Increase (decrease) of reserve on unfunded commitments	146	(13)	270	300
Asset Specific Reserve, Company Loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
General CECL Reserve	2,700		$ 2,700		$ 2,700
Number or loans in default | loans			2		2
Provision for (release of) loan loss reserves, net	7,300	1,500	$ 18,800	4,200
Total mortgage loan receivables held for investment, net, at amortized cost
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans receivable with variable rates of interest	$ 3,000,000		$ 3,000,000		$ 3,400,000
Loans receivable with variable rates of interest	87.70%		87.70%		87.20%
Loans receivable with variable rates of interest, subject to interest rate floors	100.00%		100.00%		99.00%
Outstanding face amount	$ 3,380,845		$ 3,380,845		$ 3,907,265
General CECL Reserve	39,575	$ 18,474	39,575	18,474	20,755			$ 31,752
Provision for (release of) loan loss reserves, net			18,820	$ 1,117
Total mortgage loan receivables held for investment, net, at amortized cost | London Interbank Offered Rate (LIBOR)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans receivable with variable rates of interest					2,300,000
Total mortgage loan receivables held for investment, net, at amortized cost | Secured Overnight Financing Rate (SOFR)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Loans receivable with variable rates of interest					1,100,000
Mortgage loan  receivables held for sale
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding face amount	$ 31,350		$ 31,350		$ 31,350
Percentage of loans receivable with fixed rates of interest	100.00%		100.00%		100.00%
First mortgage loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Outstanding face amount	$ 3,343,499		$ 3,343,499		$ 3,841,315
Number of loans modified | loans			2
Amortized cost basis			$ 106,600
Loans modified, amount of mortgage loan receivable portfolio			3.20%
Weighted-average extension length			2 years 3 months 18 days
Principal paydown			$ 6,000
Reserve funding			$ 6,500
Common equity interest received			15.00%
Equity interest received, number of companies | property			1
Accrued interest income	$ 700		$ 1,800

XML

MORTGAGE LOAN RECEIVABLES - Activity in Loan Portfolio (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Mortgage loan receivables held for investment, net, at amortized cost:
Net result from mortgage loan receivables held for sale	$ (629)	$ 796	$ (1,119)	$ (2,083)
Allowance for credit losses
Beginning balance, Allowance for credit losses	(32,248)	(16,960)	(20,755)	(31,752)
Charge-offs	0	0	0	14,395
Release (addition) of provision for current expected credit loss, net	(7,473)	(1,501)	(19,090)	(1,373)
Ending balance, Allowance for credit losses	(39,575)	(18,474)	(39,575)	(18,474)
Repayments in transit of securities (other assets)			0	2
Total mortgage loans receivable
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans receivable, ending balance	3,371,685		3,371,685
Total mortgage loan receivables held for investment, net, at amortized cost
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans receivable, beginning balance			3,885,746	3,553,737
Origination of mortgage loan receivables			61,412	1,183,423
Repayment of mortgage loan receivables			(559,947)	(720,597)
Proceeds from sales of mortgage loan receivables				0
Non-cash disposition of loan via foreclosure			(30,497)
Net result from mortgage loan receivables held for sale			0	2,197
Accretion/amortization of discount, premium and other fees			14,971	14,932
Charge offs				(14,395)
Mortgage loans receivable, ending balance		4,019,297		4,019,297
Allowance for credit losses
Beginning balance, Allowance for credit losses			(20,755)	(31,752)
Charge-offs				14,395
Release (addition) of provision for current expected credit loss, net			(18,820)	(1,117)
Ending balance, Allowance for credit losses	(39,575)	(18,474)	(39,575)	(18,474)
Repayments in transit of securities (other assets)			28,200
Mortgage loan  receivables held for sale
Mortgage loan receivables held for investment, net, at amortized cost:
Mortgage loans receivable, beginning balance			27,391	0
Origination of mortgage loan receivables			0	61,318
Repayment of mortgage loan receivables			0	(68)
Proceeds from sales of mortgage loan receivables				(29,053)
Net result from mortgage loan receivables held for sale			(1,119)	(4,380)
Accretion/amortization of discount, premium and other fees			0	0
Charge offs				0
Mortgage loans receivable, ending balance	$ 26,272	$ 27,817	$ 26,272	$ 27,817

XML

MORTGAGE LOAN RECEIVABLES - Provision for Loan Losses (Details) $ in Thousands	3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) loans	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2022 USD ($) loans
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses at beginning of period	$ 32,248	$ 16,960	$ 20,755	$ 31,752		$ 31,752
Provision for (release of) current expected credit loss, net	7,327	1,514	18,820	4,222
Charge-offs	0	0	0	(14,395)
Recoveries	0	0	0	(3,105)
Allowance for credit losses at end of period	39,575	18,474	39,575	18,474		20,755
Principal balance of loans on non-accrual status	58,436		58,436			53,809
Total mortgage loan receivables held for investment, net, at amortized cost
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses at beginning of period			20,755	31,752		31,752
Charge-offs				(14,395)
Allowance for credit losses at end of period	39,575	$ 18,474	39,575	18,474		20,755
Asset Specific Reserve, Company Loan
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses at beginning of period			2,700
Allowance for credit losses at end of period	2,700		2,700			$ 2,700
Additional asset-specific reserve			$ 0	$ 0
Number or loans in default | loans			2			2
Two Of Company Loans, Retail
Allowance for Loan and Lease Losses [Roll Forward]
Asset-specific reserves					$ 2,700
Two Of Company Loans, Retail | Total mortgage loan receivables held for investment, net, at amortized cost
Allowance for Loan and Lease Losses [Roll Forward]
Principal balance of loans on non-accrual status	25,800		$ 25,800
Number or loans in default | loans			2
Two Company Loans | Total mortgage loan receivables held for investment, net, at amortized cost
Allowance for Loan and Lease Losses [Roll Forward]
Principal balance of loans on non-accrual status	35,300		$ 35,300
Number or loans in default | loans			1
One loan | Total mortgage loan receivables held for investment, net, at amortized cost
Allowance for Loan and Lease Losses [Roll Forward]
Principal balance of loans on non-accrual status	$ 30,500		$ 30,500
Number or loans in default | loans			1

XML

MORTGAGE LOAN RECEIVABLES - Individually Impaired Loans (Details) - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	[1]	$ 3,371,685	$ 3,885,746
Subtotal loans, Year One		18,728	1,145,229
Subtotal loans, Year Two		944,783	2,102,307
Subtotal loans, Year Three		1,895,751	56,150
Subtotal loans, Year Four		0	332,046
Subtotal loans, Year 5 and Earlier		486,596	224,002
Subtotal mortgage loans receivable		3,345,858	3,859,734
Individually impaired loans, Year One		0	0
Individually impaired loans, Year Two		0	0
Individually impaired loans, Year Three		0	0
Individually impaired loans, Year Four		0	0
Individually impaired loans, Year Five and Earlier		25,827	26,012
Individually impaired loans		25,827	26,012
Total loans, Year One		18,728	1,145,229
Total loans, Year Two		944,783	2,102,307
Total loans, Year Three		1,895,751	56,150
Total loans, Year Four		0	332,046
Total loans, Year Five and Earlier		512,423	250,014
Accrued interest receivable		$ 21,300	23,200
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]		Accrued interest receivable
Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		$ 14,420	702,125
Year Two		548,555	722,862
Year Three		664,065	0
Year Four		0	0
Year Five and Earlier		0	0
Total loans		1,227,040	1,424,987
Office
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		0	78,754
Year Two		79,054	676,431
Year Three		612,104	29,650
Year Four		0	58,684
Year Five and Earlier		216,424	136,512
Total loans		907,582	980,031
Mixed Use
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		0	201,777
Year Two		200,949	351,291
Year Three		322,957	26,500
Year Four		0	120,300
Year Five and Earlier		41,392	0
Total loans		565,298	699,868
Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		4,308	37,616
Year Two		38,254	96,486
Year Three		97,441	0
Year Four		0	115,545
Year Five and Earlier		114,752	0
Total loans		254,755	249,647
Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		0	60,089
Year Two		12,923	107,305
Year Three		85,760	0
Year Four		0	12,953
Year Five and Earlier		21,802	9,126
Total loans		120,485	189,473
Manufactured Housing
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		0	32,515
Year Two		32,625	82,618
Year Three		82,854	0
Year Four		0	2,921
Year Five and Earlier		0	0
Total loans		115,479	118,054
Hospitality
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		0	0
Year Two		0	45,416
Year Three		18,574	0
Year Four		0	13,843
Year Five and Earlier		92,226	78,364
Total loans		110,800	137,623
Other
Financing Receivable, Credit Quality Indicator [Line Items]
Year One		0	32,353
Year Two		32,423	19,898
Year Three		11,996	0
Year Four		0	7,800
Year Five and Earlier		0	0
Total loans		44,419	60,051
Northeast
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		1,015,365	1,191,337
South
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		1,062,180	1,080,132
Southwest
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		482,865	675,069
Midwest
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		451,933	496,640
West
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		$ 333,515	$ 416,556

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

SECURITIES - Summary of Securities (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount	$ 1,417,342	$ 1,670,439
Amortized Cost Basis	491,622	608,439
Gross Unrealized Gains	309	144
Gross Unrealized Losses	(15,334)	(21,163)
Carrying value, before allowance for credit loss	$ 476,597	$ 587,420
# of Securities | security	91	106
Weighted Average Coupon	2.55%	2.06%
Weighted Average Yield	6.78%	5.29%
Remaining Duration (years)	2 years 21 days	1 year 25 days
Amortized Cost Basis	$ 160
Gross Unrealized Gains	0
Gross Unrealized Losses	(39)
Carrying Value	$ 121	$ 119
# of Securities | security	1	1
Allowance for current expected credit losses	$ (20)	$ (20)
Total Amortized Cost Basis	491,782	608,599
Total Gross Unrealized Gains	309	144
Total real estate securities, Gross Unrealized Losses	(15,393)	(21,224)
Carrying Value	$ 476,698	$ 587,519
Total number of Securities | security	92	107
CMBS
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount	$ 484,501	$ 562,839
Amortized Cost Basis	483,880	562,246
Gross Unrealized Gains	136	0
Gross Unrealized Losses	(15,165)	(20,913)
Carrying value, before allowance for credit loss	$ 468,851	$ 541,333
# of Securities | security	67	71
Weighted Average Coupon	6.64%	5.22%
Weighted Average Yield	6.79%	5.32%
Remaining Duration (years)	2 years 29 days	1 year 21 days
Risk retention requirement, amount	$ 9,000	$ 9,000
CMBS interest-only
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount	888,870	1,026,195
Amortized Cost Basis	7,487	10,498
Gross Unrealized Gains	145	121
Gross Unrealized Losses	(114)	(176)
Carrying value, before allowance for credit loss	$ 7,518	$ 10,443
# of Securities | security	9	10
Weighted Average Coupon	0.43%	0.41%
Weighted Average Yield	6.44%	3.65%
Remaining Duration (years)	1 year 1 month 17 days	1 year 5 months 12 days
Risk retention requirement, amount	$ 300	$ 400
GNMA interest-only
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount	43,946	45,369
Amortized Cost Basis	230	285
Gross Unrealized Gains	28	17
Gross Unrealized Losses	(54)	(21)
Carrying value, before allowance for credit loss	$ 204	$ 281
# of Securities | security	14	14
Weighted Average Coupon	0.31%	0.31%
Weighted Average Yield	5.59%	4.23%
Remaining Duration (years)	3 years 18 days	3 years 3 months 18 days
Agency securities
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount	$ 25	$ 36
Amortized Cost Basis	25	36
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1)	(1)
Carrying value, before allowance for credit loss	$ 24	$ 35
# of Securities | security	1	1
Weighted Average Coupon	4.00%	4.00%
Weighted Average Yield	2.70%	2.70%
Remaining Duration (years)	1 year 2 months 4 days	1 year 6 months 14 days
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Outstanding Face Amount		$ 36,000
Amortized Cost Basis		35,374
Gross Unrealized Gains		6
Gross Unrealized Losses		(52)
Carrying value, before allowance for credit loss		$ 35,328
# of Securities | security		10
Weighted Average Yield		4.17%
Remaining Duration (years)		7 months 6 days
Class A Common Stock
Debt Securities, Available-for-sale [Line Items]
Amortized Cost Basis		$ 160
Gross Unrealized Gains		0
Gross Unrealized Losses		$ (41)

XML

SECURITIES - Securities by Remaining Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Within 1 year	$ 111,937	$ 379,700
1-5 years	351,132	207,590
5-10 years	13,528	130
After 10 years	0	0
Total	476,597	587,420
Equity securities	100	100
Allowance for current expected credit losses	(20)	(20)
CMBS
Debt Securities, Available-for-sale [Line Items]
Within 1 year	109,188	346,272
1-5 years	346,226	195,061
5-10 years	13,437	0
After 10 years	0	0
Total	468,851	541,333
CMBS interest-only
Debt Securities, Available-for-sale [Line Items]
Within 1 year	2,736	937
1-5 years	4,782	9,506
5-10 years	0	0
After 10 years	0	0
Total	7,518	10,443
GNMA interest-only
Debt Securities, Available-for-sale [Line Items]
Within 1 year	13	40
1-5 years	100	111
5-10 years	91	130
After 10 years	0	0
Total	204	281
Agency securities
Debt Securities, Available-for-sale [Line Items]
Within 1 year	0	0
1-5 years	24	35
5-10 years	0	0
After 10 years	0	0
Total	$ 24	35
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Within 1 year		32,451
1-5 years		2,877
5-10 years		0
After 10 years		0
Total		$ 35,328

XML

SECURITIES - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Sale of equity securities	$ 0.0	$ 0.7	$ 0.0	$ 1.2

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Real Estate Portfolio (Details) - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Real estate and related lease intangibles, net
Less: Accumulated depreciation and amortization		$ (213,031)	$ (199,008)
Real estate and related lease intangibles, net	[1]	675,334	700,136
Below market lease intangibles, net (other liabilities)		(29,390)	(30,892)
Unencumbered real estates		104,800	140,300
Accumulated amortization of below market lease		15,200	13,600
In-place leases and other intangibles
Real estate and related lease intangibles, net
Real estate		115,708	114,687
Undepreciated real estate and related lease intangibles
Real estate and related lease intangibles, net
Real estate		888,365	899,144
Land
Real estate and related lease intangibles, net
Real estate		167,158	158,802
Building
Real estate and related lease intangibles, net
Real estate		$ 605,499	$ 625,655

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Real Estate [Abstract]
Foreclosed properties held in real estate	$ 94.4		$ 94.4		$ 103.1
Unbilled rent receivables	0.9		0.9		$ 1.3
Tenant recoveries	$ (1.4)	$ (1.4)	$ (3.5)	$ (3.9)

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Depreciation and Amortization Expense on Real Estate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Real Estate [Abstract]
Depreciation expense	$ 5,803	$ 6,310	$ 18,146	$ 19,396
Amortization expense	1,341	1,554	3,998	5,368
Total real estate depreciation and amortization expense	7,144	$ 7,864	22,144	24,764
Depreciation on corporate fixed assets	$ 100		$ 300	$ 8

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Unamortized Favorable Lease Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Gross intangible assets	$ 115,708		$ 115,708		$ 114,687
Accumulated amortization	53,938		53,938		49,725
Net intangible assets	61,770		61,770		64,962
Unamortized favorable lease intangibles	2,800		2,800		$ 2,800
Increase in operating lease income for amortization of below market lease intangibles acquired	526	$ 513	1,576	$ 1,547
Total	453	437	1,360	1,318
Above Market Leases
Business Acquisition [Line Items]
Reduction in operating lease income for amortization of above market lease intangibles acquired	$ (73)	$ (76)	$ (216)	$ (229)

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Expected Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Net intangible assets	$ 61,770	$ 64,962
Increase/(Decrease) to Operating Lease Income
Finite-Lived Intangible Assets [Line Items]
2023 (last three months)	448
2024	1,788
2025	1,773
2026	1,736
2027	1,699
Thereafter	19,152
Net intangible assets	26,596
Amortization Expense
Finite-Lived Intangible Assets [Line Items]
2023 (last three months)	1,430
2024	5,718
2025	5,509
2026	4,519
2027	4,332
Thereafter	37,471
Net intangible assets	$ 58,979

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Future Minimum Rental Payments Receivable (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Real Estate [Abstract]
2023 (last three months)	$ 15,516
2024	57,029
2025	52,063
2026	50,712
2027	49,252
Thereafter	206,027
Total	$ 430,599

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Schedule of Real Estate Properties Acquired (Details) $ in Thousands	1 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Feb. 28, 2022 USD ($) security
Business Acquisition [Line Items]
Total real estate acquisitions		$ 30,400	$ 15,436
New York, NY | Mixed Use
Business Acquisition [Line Items]
Real estate acquired through foreclosure	$ 30,400	$ 30,400
Ownership Interest	100.00%	100.00%
Terminal capitalization rate	5.50%
New York, NY | Mixed Use | Real Estate Acquired in Satisfaction of Debt
Business Acquisition [Line Items]
Realized (gain) loss on disposition of loan	$ 0
New York, NY | Apartments
Business Acquisition [Line Items]
Real estate acquired through foreclosure				$ 15,436
Ownership Interest				100.00%
New York, NY | Condos
Business Acquisition [Line Items]
Real estate acquired through foreclosure				$ 15,400
New York, NY | Condos | Measurement Input, Cap Rate
Business Acquisition [Line Items]
Measurement input				0.055
New York, NY | Condos, Residential
Business Acquisition [Line Items]
Type of real estate unit acquired via foreclosure | security				1
New York, NY | Condos, Retail
Business Acquisition [Line Items]
Type of real estate unit acquired via foreclosure | security				1

XML

REAL ESTATE AND RELATED LEASE INTANGIBLES, NET - Real Estate Properties Sold (Details) $ in Thousands		1 Months Ended				3 Months Ended		9 Months Ended
		Aug. 31, 2023 USD ($) security	Sep. 30, 2022 USD ($) security	Jun. 30, 2022 USD ($) security	Mar. 31, 2022 USD ($) security	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($) security	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($) security	Dec. 31, 2022 USD ($)
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds								$ 13,391	$ 173,119
Net Book Value	[1]					$ 675,334		675,334		$ 700,136
Realized gain (loss) on sale of real estate, net						8,808	$ 4,393	8,808	62,101
Amount assumed by buyer included within sales proceeds								31,300
2023 Disposal Properties
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds								43,335
Net Book Value						$ 34,526		34,526
Realized gain (loss) on sale of real estate, net								8,808
2023 Disposal Properties | Hotel | San Diego, CA
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds		$ 43,335
Net Book Value		34,526
Realized gain (loss) on sale of real estate, net		$ 8,808
Number of consolidated ventures sold | security		1
2022 Disposal Properties
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds									173,119
Net Book Value			$ 111,018				111,018		111,018
Realized gain (loss) on sale of real estate, net									62,101
Defeasance cost								$ 3,700
2022 Disposal Properties | Office | Ewing, NJ
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					$ 38,694
Net Book Value					24,175
Realized gain (loss) on sale of real estate, net					$ 14,519
Number of consolidated ventures sold | security					1
2022 Disposal Properties | Warehouse | Conyers, GA
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds					$ 40,752
Net Book Value					26,116
Realized gain (loss) on sale of real estate, net					$ 14,636
Number of consolidated ventures sold | security					1
2022 Disposal Properties | Apartments | Stillwater, OK
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds				$ 23,314
Net Book Value				18,032
Realized gain (loss) on sale of real estate, net				$ 5,283
Number of consolidated ventures sold | security				1
2022 Disposal Properties | Apartments | Miami, FL
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds				$ 60,856
Net Book Value				37,585
Realized gain (loss) on sale of real estate, net				$ 23,270
Number of consolidated ventures sold | security				1
2022 Disposal Properties | Retail | Wichita, KS
Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales Proceeds			9,503
Net Book Value			5,110				$ 5,110		$ 5,110
Realized gain (loss) on sale of real estate, net			$ 4,393
Number of consolidated ventures sold | security			1				1		1

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

DEBT OBLIGATIONS, NET - Schedule of Company's Debt Obligations (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) extensionOfMaturityPeriod	Dec. 31, 2022 USD ($) extensionOfMaturityPeriod
Assets Sold under Agreements to Repurchase [Line Items]
Carrying Value of Debt Obligations	$ 616,618	$ 847,863
Total	2,733,427
Carrying Amount of Collateral	0	0
Committed Loan Repurchase Facility
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	1,142,000	1,300,000
Carrying Value of Debt Obligations	614,972	616,894
Committed but Unfunded	527,028	683,106
Carrying Amount of Collateral	742,805	860,485
Fair Value of Collateral	739,455	861,284
Committed Loan Repurchase Facility | Maturing on 27 September 2025
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	500,000	500,000
Carrying Value of Debt Obligations	256,170	318,983
Committed but Unfunded	243,830	181,017
Carrying Amount of Collateral	351,242	428,477
Fair Value of Collateral	$ 351,242	$ 429,276
Number of extension maturity periods | extensionOfMaturityPeriod	2	2
Length of extension options	12 months	12 months
Committed Loan Repurchase Facility | Maturing on 19 December 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	$ 300,000	$ 300,000
Carrying Value of Debt Obligations	141,681	157,558
Committed but Unfunded	158,319	142,442
Carrying Amount of Collateral	222,705	244,102
Fair Value of Collateral	$ 219,355	$ 244,102
Number of extension maturity periods | extensionOfMaturityPeriod	2	2
Length of extension options	364 days	364 days
Committed Loan Repurchase Facility | Maturing on April 30 2024
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	$ 142,000	$ 100,000
Carrying Value of Debt Obligations	139,162	47,415
Committed but Unfunded	2,838	52,585
Carrying Amount of Collateral	65,027	63,307
Fair Value of Collateral	$ 65,027	$ 63,307
Number of extension maturity periods | extensionOfMaturityPeriod	3	3
Length of extension options	12 months	12 months
Committed Loan Repurchase Facility | Maturing On 2 January 2024
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	$ 100,000
Carrying Value of Debt Obligations	77,959
Committed but Unfunded	22,041
Carrying Amount of Collateral	103,831
Fair Value of Collateral	$ 103,831
Number of extension maturity periods | extensionOfMaturityPeriod	1
Length of extension options	12 months
Committed Loan Repurchase Facility | Maturing On 22 January 2024
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	$ 100,000	$ 100,000
Carrying Value of Debt Obligations	0	0
Committed but Unfunded	100,000	100,000
Carrying Amount of Collateral	0	0
Fair Value of Collateral	$ 0	$ 0
Number of extension maturity periods | extensionOfMaturityPeriod	2	2
Length of extension options	12 months	12 months
Committed Loan Repurchase Facility | Maturing On 14 July 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount		$ 100,000
Carrying Value of Debt Obligations		14,979
Committed but Unfunded		85,021
Carrying Amount of Collateral		21,206
Fair Value of Collateral		$ 21,206
Length of extension options		364 days
Committed Loan Repurchase Facility | Maturing On February 26 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount		$ 100,000
Carrying Value of Debt Obligations		0
Committed but Unfunded		100,000
Carrying Amount of Collateral		0
Fair Value of Collateral		$ 0
Number of extension maturity periods | extensionOfMaturityPeriod		1
Length of extension options		12 months
Committed Loan Repurchase Facility | Maturing On 3 January 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount		$ 100,000
Carrying Value of Debt Obligations		77,959
Committed but Unfunded		22,041
Carrying Amount of Collateral		103,393
Fair Value of Collateral		103,393
Committed Securities Repurchase Facility | Maturing On 27 May 2024
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	$ 100,000
Carrying Value of Debt Obligations	0
Committed but Unfunded	100,000
Carrying Amount of Collateral	0
Fair Value of Collateral	0
Committed Securities Repurchase Facility | Maturing On 27 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount		100,000
Carrying Value of Debt Obligations		8,640
Committed but Unfunded		91,360
Carrying Amount of Collateral		10,023
Fair Value of Collateral		10,023
Uncommitted Securities Repurchase Facility | Maturing On 19 October 2023
Assets Sold under Agreements to Repurchase [Line Items]
Carrying Value of Debt Obligations	1,646
Carrying Amount of Collateral	8,902
Fair Value of Collateral	8,902
Restricted securities held-to-maturity	1,900
Uncommitted Securities Repurchase Facility | Maturing On 2 March 2023
Assets Sold under Agreements to Repurchase [Line Items]
Carrying Value of Debt Obligations		222,328
Carrying Amount of Collateral		247,351
Fair Value of Collateral		247,351
Restricted securities held-to-maturity		2,000
Total Repurchase Facilities
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	1,242,000	1,400,000
Carrying Value of Debt Obligations	616,618	847,862
Committed but Unfunded	627,028	774,466
Carrying Amount of Collateral	751,707	1,117,859
Fair Value of Collateral	748,357	1,118,658
Revolving Credit Facility | Maturing On 27 July 2024
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	323,850
Carrying Value of Debt Obligations	0
Committed but Unfunded	$ 323,850
Number of extension maturity periods | extensionOfMaturityPeriod	3
Length of extension options	12 months
Revolving Credit Facility | Maturing On 27 July 2023
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount		323,850
Carrying Value of Debt Obligations		0
Committed but Unfunded		$ 323,850
Number of extension maturity periods | extensionOfMaturityPeriod		4
Length of extension options		12 months
Mortgage Loan Financing | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	$ 437,448	$ 497,454
Carrying Value of Debt Obligations	437,739	497,991
Committed but Unfunded	0	0
Carrying Amount of Collateral	478,428	559,885
Fair Value of Collateral	624,663	710,977
CLO Debt
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	1,100,000
Unamortized debt issuance costs	2,800
CLO Debt | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	1,063,249	1,064,365
Carrying Value of Debt Obligations	1,060,417	1,058,462
Committed but Unfunded	0	0
Carrying Amount of Collateral	1,272,832	1,308,654
Fair Value of Collateral	1,272,832	1,308,654
Unamortized debt issuance costs	2,800	5,900
Borrowings from the FHLB | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Committed / Principal Amount	115,000	213,000
Carrying Value of Debt Obligations	115,000	213,000
Committed but Unfunded	0	0
Carrying Amount of Collateral	141,853	248,806
Fair Value of Collateral	141,853	248,806
Restricted securities held-to-maturity	2,300	6,600
Senior Unsecured Notes
Assets Sold under Agreements to Repurchase [Line Items]
Unamortized debt issuance costs	12,543
Senior Unsecured Notes | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Debt issued	1,576,614	1,643,794
Senior Unsecured Notes	1,564,071	1,628,382
Committed but Unfunded	0	0
Unamortized debt issuance costs	12,500	15,400
Total Debt Obligations, Net
Assets Sold under Agreements to Repurchase [Line Items]
Debt issued	4,758,161	5,142,463
Total	3,793,845	4,245,697
Committed but Unfunded	950,878	1,098,316
Carrying Amount of Collateral	2,644,820	3,235,204
Fair Value of Collateral	$ 2,787,705	$ 3,387,095
Minimum | Committed Loan Repurchase Facility | Maturing on 27 September 2025
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.07%	6.07%
Minimum | Committed Loan Repurchase Facility | Maturing on 19 December 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.18%	6.19%
Minimum | Committed Loan Repurchase Facility | Maturing on April 30 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.03%	6.00%
Minimum | Committed Loan Repurchase Facility | Maturing On 2 January 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	6.73%
Minimum | Committed Loan Repurchase Facility | Maturing On 22 January 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.00%	0.00%
Minimum | Committed Loan Repurchase Facility | Maturing On 14 July 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		7.07%
Minimum | Committed Loan Repurchase Facility | Maturing On February 26 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		0.00%
Minimum | Committed Loan Repurchase Facility | Maturing On 3 January 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		5.74%
Minimum | Committed Securities Repurchase Facility | Maturing On 27 May 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.00%
Minimum | Committed Securities Repurchase Facility | Maturing On 27 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		5.04%
Minimum | Uncommitted Securities Repurchase Facility | Maturing On 19 October 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	6.54%
Minimum | Uncommitted Securities Repurchase Facility | Maturing On 2 March 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		4.73%
Minimum | Revolving Credit Facility | Maturing On 27 July 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.00%
Minimum | Revolving Credit Facility | Maturing On 27 July 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		0.00%
Minimum | Mortgage Loan Financing | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	4.39%	4.25%
Minimum | CLO Debt | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	6.65%	5.52%
Minimum | Borrowings from the FHLB | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	569.00%	274.00%
Minimum | Senior Unsecured Notes | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	4.25%	4.25%
Maximum | Committed Loan Repurchase Facility | Maturing on 27 September 2025
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.47%	6.57%
Maximum | Committed Loan Repurchase Facility | Maturing on 19 December 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	8.33%	7.07%
Maximum | Committed Loan Repurchase Facility | Maturing on April 30 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.57%	6.00%
Maximum | Committed Loan Repurchase Facility | Maturing On 2 January 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.23%
Maximum | Committed Loan Repurchase Facility | Maturing On 22 January 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.00%	0.00%
Maximum | Committed Loan Repurchase Facility | Maturing On 14 July 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		7.07%
Maximum | Committed Loan Repurchase Facility | Maturing On February 26 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		0.00%
Maximum | Committed Loan Repurchase Facility | Maturing On 3 January 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		6.24%
Maximum | Committed Securities Repurchase Facility | Maturing On 27 May 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.00%
Maximum | Committed Securities Repurchase Facility | Maturing On 27 May 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		5.29%
Maximum | Uncommitted Securities Repurchase Facility | Maturing On 19 October 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	7.49%
Maximum | Uncommitted Securities Repurchase Facility | Maturing On 2 March 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		6.00%
Maximum | Revolving Credit Facility | Maturing On 27 July 2024
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	0.00%
Maximum | Revolving Credit Facility | Maturing On 27 July 2023
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate		0.00%
Maximum | Mortgage Loan Financing | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	9.03%	8.03%
Maximum | CLO Debt | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	9.10%	7.97%
Maximum | Borrowings from the FHLB | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	5.81%	4.70%
Maximum | Senior Unsecured Notes | Various Date
Assets Sold under Agreements to Repurchase [Line Items]
Interest rate	5.25%	5.25%

XML

DEBT OBLIGATIONS, NET - Committed Loan and Securities Repurchase Facilities (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) security agreement	Oct. 03, 2023 USD ($) security	Oct. 02, 2023 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Obligations outstanding	$ 616,618			$ 847,863
Number of counterparties with repurchase agreements | security	4
Number of counterparties with collateral exceeding borrowed amounts | security	0
Amount of collateral exceeding borrowings	$ 153,800
Amount of collateral exceeding borrowings, as a percentage	10.00%
Weighted average haircut	18.00%
Subsequent Event
Debt Instrument [Line Items]
Number of agreements amended | security		1
Committed Loan Repurchase Facility
Debt Instrument [Line Items]
Number of agreements | agreement	5
Consolidated CLO debt obligations	$ 1,142,000			$ 1,300,000
Committed Securities Repurchase Facility | Maturing on 23 December 2021
Debt Instrument [Line Items]
Consolidated CLO debt obligations	$ 100,000
Committed Securities Repurchase Facility | Maturing on 23 December 2021 | Subsequent Event
Debt Instrument [Line Items]
Consolidated CLO debt obligations		$ 200,000	$ 100,000

XML

DEBT OBLIGATIONS, NET - Revolving Credit Facility (Details)	3 Months Ended
	Sep. 30, 2023 USD ($) security	Dec. 31, 2022 USD ($)	Jul. 27, 2022 USD ($)
Debt Instrument [Line Items]
Carrying Value of Debt Obligations	$ 616,618,000	$ 847,863,000
Letter of Credit
Debt Instrument [Line Items]
Committed amount on credit agreement	$ 25,000,000
Revolving credit facility | Line of Credit
Debt Instrument [Line Items]
Committed amount on credit agreement			$ 323,900,000
Number of options exercised | security	1
Number of extension options remaining | security	4
Length of extension options	1 year
Revolving credit facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Committed amount on credit agreement	$ 323,900,000
Revolving credit facility | Secured Overnight Financing Rate (SOFR) | Line of Credit
Debt Instrument [Line Items]
Stated interest rate on debt instrument			2.50%
Revolving credit facility | Maturing on 11 February 2023
Debt Instrument [Line Items]
Carrying Value of Debt Obligations	$ 0

XML

DEBT OBLIGATIONS, NET - Debt Issuance Costs (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Credit Agreement and Revolving Credit Facility
Debt Instrument [Line Items]
Unamortized debt issuance expense	$ 4.0	$ 5.0

XML

DEBT OBLIGATIONS, NET - Uncommitted Securities Repurchase Facilities (Details) - Uncommitted Securities Repurchase Facilities	9 Months Ended
	Sep. 30, 2023
Minimum
Debt Instrument [Line Items]
Advance rates	75.00%
Maximum
Debt Instrument [Line Items]
Advance rates	95.00%

XML

DEBT OBLIGATIONS, NET - Mortgage Loan Financing (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) security	Sep. 30, 2022 USD ($) security	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Amortization of premium/discount on mortgage loan financing included in interest expense	$ 452	$ 649
Mortgage loan financing
Debt Instrument [Line Items]
Weighted average term	3 years 1 month 13 days
Carrying amount	$ 437,700		$ 498,000
Net unamortized premiums	2,000		2,400
Amortization of premium/discount on mortgage loan financing included in interest expense	(500)	$ 400
Pledged assets, real estate and lease intangibles, net	$ 478,400		$ 559,900
Number of agreements | security	0	0
Minimum | Mortgage loan financing
Debt Instrument [Line Items]
Stated interest rate on debt instrument	4.39%
Maximum | Mortgage loan financing
Debt Instrument [Line Items]
Stated interest rate on debt instrument	9.03%

XML

DEBT OBLIGATIONS, NET - Collateralized Loan Obligation Debt (Details) $ in Thousands		Dec. 02, 2021 USD ($) security	Jul. 13, 2021 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Debt obligations, net	[1]			$ 3,793,845	$ 4,245,697
Variable Interest Entity, Primary Beneficiary
Debt Instrument [Line Items]
Debt obligations, net				1,060,417	1,058,462
Variable Interest Entity, Primary Beneficiary | Collateralized Loan Obligation
Debt Instrument [Line Items]
Subordinate and controlling interest		15.60%	18.00%
Number of additional tranches | security		2
Subordinate and controlling interest as investment		6.80%
CLO Debt
Debt Instrument [Line Items]
Unamortized debt issuance costs				2,800
Various Date | CLO Debt
Debt Instrument [Line Items]
Debt obligations, net				1,100,000
Unamortized debt issuance costs				$ 2,800	$ 5,900
Non-Recourse Notes | CLO Debt
Debt Instrument [Line Items]
Debt obligations, net		$ 566,200	$ 498,200
Loans financed		$ 729,400	$ 607,500
Advance rate		77.60%	82.00%

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

DEBT OBLIGATIONS, NET - Borrowings from the Federal Home Loan Bank (“FHLB”) (Details) - Tuebor Captive Insurance Company LLC $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Amount restricted from transfer	$ 838.1
Borrowings from the FHLB
Debt Instrument [Line Items]
FHLB borrowings outstanding	$ 115.0
Weighted average term	9 months 25 days
Weighted average interest rate	5.74%
Borrowings from the FHLB | Commercial Mortgage Backed Securities, US Agency Securities and U.S. Treasury Securities
Debt Instrument [Line Items]
Collateral for debt instrument	$ 141.9
Borrowings from the FHLB | Minimum
Debt Instrument [Line Items]
Average term	7 months 2 days
Stated interest rate on debt instrument	5.69%
Advance rates	71.70%
Borrowings from the FHLB | Maximum
Debt Instrument [Line Items]
Average term	1 year
Stated interest rate on debt instrument	5.81%
Advance rates	95.70%

XML

DEBT OBLIGATIONS, NET - Senior Unsecured Notes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Debt Instrument [Line Items]
Gain on extinguishment of debt	$ 921,000	$ 0	$ 10,600,000	$ 685,000
Ladder Capital Finance Corporation | LCFH
Debt Instrument [Line Items]
Ownership interest in LCFC	100.00%		100.00%
Senior Unsecured Notes
Debt Instrument [Line Items]
Senior Unsecured Notes	$ 1,600,000,000		$ 1,600,000,000
Senior Notes Due 2025 | Senior Unsecured Notes
Debt Instrument [Line Items]
Loan refinance	$ 327,800,000		$ 327,800,000
Stated interest rate on debt instrument	5.25%		5.25%
Notes repurchased			$ 16,200,000
Gain on extinguishment of debt			1,300,000
Senior Notes Due 2027 | Senior Unsecured Notes
Debt Instrument [Line Items]
Loan refinance	$ 611,900,000		$ 611,900,000
Stated interest rate on debt instrument	4.25%		4.25%
Notes repurchased	$ 500,000		$ 38,900,000
Gain on extinguishment of debt	100,000		6,800,000
Senior Notes Due 2029 | Senior Unsecured Notes
Debt Instrument [Line Items]
Loan refinance	$ 636,900,000		$ 636,900,000
Stated interest rate on debt instrument	4.75%		4.75%
Notes repurchased	$ 4,800,000		$ 12,100,000
Gain on extinguishment of debt	$ 900,000		$ 2,500,000

XML

DEBT OBLIGATIONS, NET - Schedule of Maturities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]
2023 (last three months)	$ 1,710
2024	417,827
2025	631,948
2026	89,161
2027	898,242
Thereafter	706,791
Subtotal	2,745,679
Premiums included in mortgage loan financing	1,968
Total	2,733,427
Senior Unsecured Notes
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs	(12,543)
Mortgage loan financings
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs	(1,677)
CLO Debt
Long-term Debt, Fiscal Year Maturity [Abstract]
Unamortized debt issuance costs	(2,800)
Consolidated CLO debt obligations	$ 1,100,000

XML

DEBT OBLIGATIONS, NET - Financial Covenants (Details) $ in Millions	Sep. 30, 2023 USD ($)
Debt Disclosure [Abstract]
Equity restricted as payment as a dividend	$ 871.4

XML

DERIVATIVE INSTRUMENTS - Schedule of Derivatives Outstanding (Details) $ in Thousands	Sep. 30, 2023 USD ($) option	Dec. 31, 2022 USD ($) option
Derivative [Line Items]
Notional	$ 161,900	$ 195,600
Fair value, asset	1,817	2,038
Fair value, liability	0	0
1 Month Term SOFR
Derivative [Line Items]
Notional	90,000	90,000
Fair value, asset	1,520	1,804
Fair value, liability	$ 0	$ 0
Remaining Maturity (years)	10 months 17 days	1 year 8 months 4 days
5-year Treasury-Note Futures
Derivative [Line Items]
Notional	$ 20,500	$ 44,200
Fair value, asset	32	51
Fair value, liability	$ 0	$ 0
Remaining Maturity (years)	3 months	3 months
10-year Treasury-Note Futures
Derivative [Line Items]
Notional	$ 51,400	$ 61,400
Fair value, asset	81	71
Fair value, liability	$ 0	$ 0
Remaining Maturity (years)	3 months	3 months
Futures
Derivative [Line Items]
Notional	$ 71,900	$ 105,600
Fair value, asset	113	122
Fair value, liability	0	0
Options
Derivative [Line Items]
Fair value, asset	184	112
Fair value, liability	$ 0	$ 0
Remaining Maturity (years)	2 months 26 days	2 months 12 days
Option contracts held | option	556	91

XML

DERIVATIVE INSTRUMENTS - Schedule of Realized Gains (Losses) on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative [Line Items]
Unrealized Gain/(Loss)	$ (184)	$ 1,447	$ (175)	$ 814
Realized Gain/(Loss)	4,957	5,120	6,855	11,567
Net Result from Derivative Transactions	4,773	6,567	6,680	12,381
Caps
Derivative [Line Items]
Unrealized Gain/(Loss)	(294)	747	(284)	736
Realized Gain/(Loss)	378	0	962	648
Net Result from Derivative Transactions	84	747	678	1,384
Futures
Derivative [Line Items]
Unrealized Gain/(Loss)	99	539	(8)	(83)
Realized Gain/(Loss)	4,579	5,120	6,162	10,919
Net Result from Derivative Transactions	4,678	5,659	6,154	10,836
Options
Derivative [Line Items]
Unrealized Gain/(Loss)	11	161	117	161
Realized Gain/(Loss)	0	0	(269)	0
Net Result from Derivative Transactions	$ 11	$ 161	$ (152)	$ 161

XML

DERIVATIVE INSTRUMENTS - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Cash margins held as collateral for derivatives by counterparties	$ 1.7	$ 2.5

XML

OFFSETTING ASSETS AND LIABILITIES - Offsetting Assets (Details) - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Offsetting of derivative assets
Gross amounts of recognized assets		$ 1,817	$ 2,038
Gross amounts offset in the balance sheet		0	0
Derivative instruments	[1]	1,817	2,038
Derivative instruments		1,817	2,038
Gross amounts not offset in the balance sheet
Financial instruments		0	0
Cash collateral received/(posted)		(1,711)	(2,505)
Net amount		$ 106	$ (467)

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

OFFSETTING ASSETS AND LIABILITIES - Offsetting Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Repurchase agreements
Gross amounts of recognized liabilities	$ 616,618	$ 847,863
Gross amounts offset in the balance sheet	0	0
Net amounts of liabilities presented in the balance sheet	616,618	847,863
Gross amounts not offset in the balance sheet
Financial instruments collateral	616,618	847,863
Cash collateral posted/(received)	0	19,128
Net amount	616,618	828,735
Total
Gross amounts of recognized liabilities	616,618	847,863
Gross amounts offset in the balance sheet	0	0
Net amounts of liabilities presented in the balance sheet	616,618	847,863
Gross amounts not offset in the balance sheet
Financial instruments collateral	616,618	847,863
Cash collateral posted/(received)	0	19,128
Net amount	$ 616,618	$ 828,735

XML

CONSOLIDATED VARIABLE INTEREST ENTITIES (Details) $ in Thousands		Sep. 30, 2023 USD ($) security		Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($) security		Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of consolidated collateralized loan obligation variable interest entities | security		2			2
Variable Interest Entity [Line Items]
Restricted cash	[1]	$ 59,523			$ 50,524
Accrued interest receivable	[1]	23,056			24,938
Other assets	[1]	102,909			78,339
Total assets	[1]	5,503,142			5,951,173
Debt obligations, net	[1]	3,793,845			4,245,697
Accrued expenses	[1]	63,446			68,227
Other liabilities	[1]	75,910			71,688
Total liabilities	[1]	3,964,989			4,417,612
Total equity		1,538,153	[1]	$ 1,531,500	1,533,561	[1]	$ 1,503,619	$ 1,509,709	$ 1,513,619
Total liabilities and equity	[1]	5,503,142			5,951,173
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Restricted cash		36,844			4,902
Mortgage loan receivables held for investment, net, at amortized cost		1,272,832			1,308,654
Accrued interest receivable		8,743			8,313
Other assets		23,089			17,505
Total assets		1,341,508			1,339,374
Debt obligations, net		1,060,417			1,058,462
Accrued expenses		3,385			3,029
Other liabilities		0			65
Total liabilities		1,063,802			1,061,556
Net equity in VIEs (eliminated in consolidation)		277,706			277,818
Total equity		277,706			277,818
Total liabilities and equity		$ 1,341,508			$ 1,339,374

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

EQUITY STRUCTURE AND ACCOUNTS - Additional Information (Details) - 2014 Share Repurchase Authorization Program - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jul. 27, 2022	Jul. 26, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Remaining amount available for repurchase	$ 44,300
Percentage of aggregate common stock outstanding under Repurchase Program	3.40%
Closing price (in dollars per share)	$ 10.26
Class A Common Stock
Class of Stock [Line Items]
Additional authorizations				$ 50,000	$ 39,500
Remaining amount available for repurchase	$ 44,256	$ 46,737	$ 47,377			$ 44,122

XML

EQUITY STRUCTURE AND ACCOUNTS - Schedule of Repurchase of Treasury Stock Activity (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jul. 27, 2022	Jul. 26, 2022
Treasury Stock [Roll Forward]
Repurchases paid			$ (197)	$ (2,623)	$ (2,481)	$ (7,279)
2014 Share Repurchase Authorization Program
Treasury Stock [Roll Forward]
Remaining amount available for repurchase, end of period	$ 44,300		44,300		44,300
2014 Share Repurchase Authorization Program | Class A Common Stock
Class of Stock [Line Items]
Purchase of treasury stock (in shares)	19,000	250,000				721,299
Treasury Stock [Roll Forward]
Remaining amount available for repurchase, beginning of period					46,737	$ 44,122
Additional authorizations						10,534
Repurchases paid	$ (196)	$ (2,285)				(7,279)
Remaining amount available for repurchase, end of period	$ 44,256		$ 44,256	$ 47,377	$ 44,256	$ 47,377
Additional authorizations							$ 50,000	$ 39,500

XML

EQUITY STRUCTURE AND ACCOUNTS - Dividends Declared (Details) - $ / shares							9 Months Ended
	Sep. 15, 2023	Jun. 15, 2023	Mar. 15, 2023	Sep. 15, 2022	Jun. 15, 2022	Mar. 15, 2022	Sep. 30, 2023	Sep. 30, 2022
Class A Common Stock
Class of Stock [Line Items]
Dividends per share of Class A common stock (in dollars per share)	$ 0.23	$ 0.23	$ 0.23	$ 0.23	$ 0.22	$ 0.20	$ 0.69	$ 0.65

XML

EQUITY STRUCTURE AND ACCOUNTS - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023		Sep. 30, 2022	Sep. 30, 2023		Sep. 30, 2022
AOCI Attributable to Parent [Roll Forward]
Beginning Balance	$ 1,531,500		$ 1,509,709	$ 1,533,561	[1]	$ 1,513,619
Other comprehensive income (loss)	1,645		(956)	6,130		(14,699)
Ending Balance	1,538,153	[1]	1,503,619	1,538,153	[1]	1,503,619
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent [Roll Forward]
Beginning Balance	(16,524)		(17,855)	(21,009)		(4,112)
Other comprehensive income (loss)	1,645		(956)	6,130		(14,699)
Ending Balance	$ (14,879)		$ (18,811)	$ (14,879)		$ (18,811)

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.

XML

NONCONTROLLING INTERESTS (Details) - Consolidated Venture $ in Millions	Sep. 30, 2023 USD ($) jointVenture property
Noncontrolling Interest [Line Items]
Number of consolidated ventures | jointVenture	2
Isla Vista, CA | Student Housing
Noncontrolling Interest [Line Items]
Number of real estate properties | property	40
Property book value	$ 79.0
Oakland County, MI | Office Building
Noncontrolling Interest [Line Items]
Property book value	$ 8.7
Consolidated Ventures | Minimum
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership	10.00%
Consolidated Ventures | Maximum
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership	25.00%

XML

EARNINGS PER SHARE - Net Income and Weighted Average Shares Outstanding (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Weighted average shares outstanding:
Basic (in shares)	124,730,343	124,278,732	124,652,426	124,393,861
Diluted (in shares)	124,968,545	125,172,180	124,817,335	125,813,280
Class A Common Stock
Earnings Per Share
Basic Net income (loss) available for Class A common shareholders	$ 31,319	$ 28,583	$ 81,889	$ 82,663
Diluted Net income (loss) available for Class A common shareholders	$ 31,319	$ 28,583	$ 81,889	$ 82,663
Weighted average shares outstanding:
Basic (in shares)	124,730,343	124,278,732	124,652,426
Diluted (in shares)	124,968,545	125,172,180	124,817,335	125,813,280

XML

EARNINGS PER SHARE - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Denominator:
Weighted average number of shares of Class A common stock outstanding (in shares)	124,730,343	124,278,732	124,652,426	124,393,861
Basic net income (loss) per share of Class A common stock (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Denominator:
Basic, weighted average number of shares of Class A common stock outstanding (in shares)	124,730,343	124,278,732	124,652,426	124,393,861
Diluted weighted average number of shares of Class A common stock outstanding (in shares)	124,968,545	125,172,180	124,817,335	125,813,280
Diluted net income (loss) per share of Class A common stock (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Anti-dilutive shares (in shares)	299,641		440,573
Class A Common Stock
Numerator:
Net income (loss) attributable to Class A common shareholders	$ 31,319	$ 28,583	$ 81,889	$ 82,663
Denominator:
Weighted average number of shares of Class A common stock outstanding (in shares)	124,730,343	124,278,732	124,652,426
Basic net income (loss) per share of Class A common stock (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Numerator:
Net income (loss) attributable to Class A common shareholders	$ 31,319	$ 28,583	$ 81,889	$ 82,663
Diluted net income (loss) attributable to Class A common shareholders	$ 31,319	$ 28,583	$ 81,889	$ 82,663
Denominator:
Basic, weighted average number of shares of Class A common stock outstanding (in shares)	124,730,343	124,278,732	124,652,426
Diluted weighted average number of shares of Class A common stock outstanding (in shares)	124,968,545	125,172,180	124,817,335	125,813,280
Diluted net income (loss) per share of Class A common stock (in dollars per share)	$ 0.25	$ 0.23	$ 0.66	$ 0.66
Class A Common Stock | Restricted Stock
Denominator:
Incremental shares of unvested Class A restricted stock (in shares)	238,202	893,448	164,909	1,419,419

XML

STOCK-BASED AND OTHER COMPENSATION PLANS - Schedule of Stock Based Compensation Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense	$ 3,205	$ 3,738	$ 15,375	$ 27,787
Total stock based compensation expense	$ 3,205	$ 3,738	$ 15,375	$ 27,787

XML

STOCK-BASED AND OTHER COMPENSATION PLANS - Schedule of Grants (Details) - Restricted Stock - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares (in shares)			1,417,561
Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares (in shares)	0	7,179	1,417,561	2,884,303
Weighted average fair value per share (in dollars per share)	$ 0	$ 9.75	$ 11.58	$ 11.87

XML

STOCK-BASED AND OTHER COMPENSATION PLANS - Schedule of Nonvested Shares Outstanding (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2023
Weighted Average Grant Date Fair Value
Nonvested/Outstanding weighted average grant date fair value, beginning balance (in dollars pre share)	$ 12.62
Granted, weighted average grant date fair value (in dollars per share)	11.58
Vested, weighted average grant date fair value (in dollars per share)	12.14
Forfeited, weighted average grant date fair value (in dollars per share)	10.43
Nonvested/Outstanding weighted average grant date fair value, ending balance (in dollars per share)	12.37
Stock Options
Weighted-average exercise price of outstanding options, warrants and rights	$ 12.37
Unrecognized compensation cost	$ 12.7
Period of recognition for unrecognized compensation costs	29 months
Remaining vesting period	21 months 21 days
Restricted Stock
Restricted Stock
Nonvested/Outstanding (in shares)	2,529,571
Granted (in shares)	1,417,561
Vested (in shares)	(1,699,744)
Forfeited (in shares)	(49,425)
Nonvested/Outstanding (in shares)	2,197,963
Stock Options
Stock Options
Nonvested/Outstanding (in shares)	623,788
Granted (in shares)	0
Vested (in shares)	0
Forfeited (in shares)	0
Nonvested/Outstanding (in shares)	623,788
Exercisable (in shares)	623,788
Options, warrants and rights
Weighted Average Grant Date Fair Value
Nonvested/Outstanding weighted average grant date fair value, ending balance (in dollars per share)	$ 14.84
Stock Options
Weighted-average exercise price of outstanding options, warrants and rights	$ 14.84

XML

STOCK-BASED AND OTHER COMPENSATION PLANS- Omnibus Incentive Plan (Details) $ in Millions					1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 18, 2023 USD ($) shares	May 10, 2022 USD ($) installment shares	Feb. 18, 2022 USD ($) shares	Jan. 31, 2022 USD ($) installment shares	Feb. 28, 2023 installment	Sep. 30, 2023 shares	Sep. 30, 2022 shares	Sep. 30, 2023 shares	Sep. 30, 2022 shares	Jun. 06, 2023 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate value of awards granted | $	$ 8.5			$ 18.0
Omnibus Incentive Plan 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)										3,000,000
2014 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)										10,253,867
2014 Omnibus Incentive Plan | Performance Based Vesting and Catch-up Provision
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	66.67%
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)								1,417,561
Restricted Stock | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)						0	7,179	1,417,561	2,884,303
Non-Management Grantee | Mr. Miceli and Ms. Porcella
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrestricted shares granted (in shares)	19,558			264,704
Non-Management Grantee | Performance Based Vesting | Other Non-ManagementGrantees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted with certain vesting rights (in shares)	325,709			531,980
Non-Management Grantee | Time-Based Vesting | Other Non-ManagementGrantees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted with certain vesting rights (in shares)	306,162			497,169
Non-Management Grantee | Restricted Stock | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate value of awards granted | $	$ 7.5			$ 15.4
Granted (in shares)	651,429			1,293,853
Non-Management Grantee | Restricted Stock | 2014 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of installments | installment				3	3
Management Grantees | 2014 Omnibus Incentive Plan | Ms. McCormack and Mr. Perelman
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of unrestricted stock				66.67%
Management Grantees | 2014 Omnibus Incentive Plan | Performance Based Vesting | Mr. Miceli and Ms. Porcella
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Management Grantees | 2014 Omnibus Incentive Plan | Time-Based Vesting | Mr. Miceli and Ms. Porcella
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Management Grantees | 2014 Omnibus Incentive Plan | Performance Based Vesting and Catch-up Provision | Ms. McCormack and Mr. Perelman
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Management Grantees | 2014 Omnibus Incentive Plan | Performance Based Vesting and Catch-up Provision | Mr. Miceli and Ms. Porcella
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage				33.33%
Management Grantees | 2014 Omnibus Incentive Plan | Class A Common Stock | Ms. McCormack and Mr. Perelman
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of unrestricted stock	50.00%
Management Grantees | 2014 Omnibus Incentive Plan | Class A Common Stock | Performance Based Vesting | Mr. Miceli and Ms. Porcella
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
Management Grantees | 2014 Omnibus Incentive Plan | Class A Common Stock | Time-Based Vesting | Mr. Miceli and Ms. Porcella
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
Management Grantees | 2014 Omnibus Incentive Plan | Class A Common Stock | Performance Based Vesting and Catch-up Provision | Ms. McCormack and Mr. Perelman
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	50.00%
Management Grantees | Restricted Stock | Class A Common Stock | Time and Performance Based Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate value of awards granted | $	$ 1.2			$ 2.5
Management Grantees | Restricted Stock | 2014 Omnibus Incentive Plan | Performance Based Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum performance target percentage					8.00%
Performance period					3 years
Management Grantees | Restricted Stock | 2014 Omnibus Incentive Plan | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	733,607			1,517,627
Management Grantees | Restricted Stock | 2014 Omnibus Incentive Plan | Class A Common Stock | Time and Performance Based Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	101,344			210,662
Board of Directors | Restricted Stock | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	32,525		31,860
Grant date fair value | $	$ 0.4		$ 0.4
Vesting period	1 year		1 year
Employee | Restricted Stock | 2014 Omnibus Incentive Plan | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		33,784
Grant date fair value | $		$ 0.4
Employee | Restricted Stock | 2014 Omnibus Incentive Plan | Class A Common Stock | Performance Based Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of installments | installment		3
Vesting percentage		50.00%
Employee | Restricted Stock | 2014 Omnibus Incentive Plan | Class A Common Stock | Time-Based Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of installments | installment		3
Vesting percentage		50.00%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Values of Financial Instruments (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Assets:
Fair Value	$ 3,406,445	$ 3,922,131
Liabilities:
Fair Value	3,577,485	3,994,458
Allowance for credit losses	$ (39,575)	$ (20,755)	$ (32,248)	$ (18,474)	$ (16,960)	$ (31,752)
Total mortgage loan receivables held for investment, net, at amortized cost
Liabilities:
Period of short interest rate reset risk	30 days	30 days
CLO debt
Liabilities:
Period of short interest rate reset risk		30 days
Recurring
Assets:
Fair Value	$ 469,225	$ 580,130
Recurring | Agency securities
Assets:
Principal Amount	25	36
Fair Value	24	35
Recurring | CMBS | Internal model, third-party inputs
Assets:
Principal Amount	484,501	562,839
Amortized Cost Basis/Purchase Price	483,880	562,246
Fair Value	$ 468,851	$ 541,333
Liabilities:
Financial instruments, measurement input	0.0679	0.0532
Weighted average remaining maturity/duration	2 years 29 days	1 year 21 days
Recurring | CMBS interest-only | Internal model, third-party inputs
Assets:
Principal Amount	$ 888,870	$ 1,026,195
Amortized Cost Basis/Purchase Price	7,487	10,498
Fair Value	$ 7,518	$ 10,443
Liabilities:
Financial instruments, measurement input	0.0644	0.0365
Weighted average remaining maturity/duration	1 year 1 month 17 days	1 year 5 months 12 days
Recurring | GNMA interest-only | Internal model, third-party inputs
Assets:
Principal Amount	$ 43,946	$ 45,369
Amortized Cost Basis/Purchase Price	230	285
Fair Value	$ 204	$ 281
Liabilities:
Financial instruments, measurement input	0.0559	0.0423
Weighted average remaining maturity/duration	3 years 18 days	3 years 3 months 18 days
Recurring | Agency securities | Internal model, third-party inputs
Assets:
Principal Amount	$ 25	$ 36
Amortized Cost Basis/Purchase Price	25	36
Fair Value	$ 24	$ 35
Liabilities:
Financial instruments, measurement input	0.0270	0.0270
Weighted average remaining maturity/duration	1 year 2 months 4 days	1 year 6 months 14 days
Recurring | U.S. Treasury securities | Internal model, third-party inputs
Assets:
Principal Amount		$ 36,000
Amortized Cost Basis/Purchase Price		35,328
Fair Value		$ 35,328
Liabilities:
Financial instruments, measurement input		0.0417
Weighted average remaining maturity/duration		7 months 6 days
Recurring | Equity securities
Assets:
Amortized Cost Basis/Purchase Price	$ 160	$ 160
Fair Value	121	118
Recurring | Total mortgage loan receivables held for investment, net, at amortized cost | Discounted Cash Flow
Assets:
Principal Amount	3,380,845	3,907,295
Amortized Cost Basis/Purchase Price	3,371,773	3,885,746
Fair Value	$ 3,365,688	$ 3,875,708
Liabilities:
Financial instruments, measurement input	0.0977	0.0885
Weighted average remaining maturity/duration	9 months 14 days	1 year 3 months 3 days
Allowance for credit losses	$ (39,600)	$ (20,800)
Recurring | Mortgage loan  receivables held for sale | Internal model, third-party inputs
Assets:
Principal Amount	31,350	31,350
Amortized Cost Basis/Purchase Price	26,272	27,391
Fair Value	$ 26,272	$ 27,391
Liabilities:
Financial instruments, measurement input	0.0457	0.0457
Weighted average remaining maturity/duration	8 years 5 months 8 days	9 years 2 months 8 days
Recurring | FHLB stock | FHLB stock
Assets:
Principal Amount	$ 5,175	$ 9,585
Amortized Cost Basis/Purchase Price	5,175	9,585
Fair Value	$ 5,175	$ 9,585
Liabilities:
Financial instruments, measurement input	0.0750	0.0475
Recurring | Nonhedge derivatives | Counterparty quotations
Assets:
Nonhedge derivative assets	$ 161,900	$ 204,700
Amortized Cost Basis/Purchase Price	1,817	2,038
Fair Value	$ 1,817	$ 2,038
Liabilities:
Weighted average remaining maturity/duration	1 year 1 month 6 days	1 year 6 months 7 days
Recurring | Repurchase agreements - short-term | Cost plus Accrued Interest
Liabilities:
Principal Amount	$ 360,447	$ 481,465
Amortized Cost Basis/Purchase Price	360,447	481,465
Fair Value	$ 360,447	$ 481,465
Financial instruments, measurement input	0.0661	0.0404
Weighted average remaining maturity/duration	1 month 20 days	4 months 13 days
Recurring | Repurchase agreements - long-term | Discounted Cash Flow
Liabilities:
Principal Amount	$ 256,170	$ 366,398
Amortized Cost Basis/Purchase Price	256,170	366,398
Fair Value	$ 256,170	$ 366,398
Financial instruments, measurement input	0.0620	0.0406
Weighted average remaining maturity/duration	1 year 11 months 26 days	2 years 6 months 21 days
Recurring | Mortgage loan financing | Discounted Cash Flow
Liabilities:
Principal Amount	$ 437,448	$ 497,454
Amortized Cost Basis/Purchase Price	437,739	497,991
Fair Value	$ 417,967	$ 477,101
Financial instruments, measurement input	0.0587	0.0551
Weighted average remaining maturity/duration	2 years 10 months 24 days	3 years 4 months 9 days
Recurring | CLO debt | Discounted Cash Flow
Liabilities:
Principal Amount	$ 1,063,249	$ 1,064,365
Amortized Cost Basis/Purchase Price	1,060,417	1,058,462
Fair Value	$ 1,060,417	$ 1,058,462
Financial instruments, measurement input	0.0755	0.0635
Weighted average remaining maturity/duration	2 years 1 month 20 days	15 years 11 months 1 day
Recurring | Borrowings from the FHLB | Discounted Cash Flow
Liabilities:
Principal Amount	$ 115,000	$ 213,000
Amortized Cost Basis/Purchase Price	115,000	213,000
Fair Value	$ 115,000	$ 213,055
Financial instruments, measurement input	0.0288	0.0161
Weighted average remaining maturity/duration	9 months 25 days	1 year 3 months
Recurring | Senior unsecured notes | Internal model, third-party inputs
Liabilities:
Principal Amount	$ 1,576,614	$ 1,643,794
Amortized Cost Basis/Purchase Price	1,564,071	1,628,382
Fair Value	$ 1,367,484	$ 1,397,977
Financial instruments, measurement input	0.0466	0.0466
Weighted average remaining maturity/duration	4 years 7 days	4 years 9 months

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Summary of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Assets:
Fair value of assets	$ 3,406,445		$ 3,922,131
Liabilities:
Fair value of liabilities	3,577,485		3,994,458
Allowance for credit losses	(39,575)	$ (32,248)	(20,755)	$ (18,474)	$ (16,960)	$ (31,752)
Repurchase agreements - short-term
Liabilities:
Principal Amount	360,447		481,465
Fair value of liabilities	360,447		481,465
Repurchase agreements - long-term
Liabilities:
Principal Amount	256,170		366,398
Fair value of liabilities	256,170		366,398
Mortgage loan financing
Liabilities:
Principal Amount	437,448		497,454
Fair value of liabilities	417,967		477,101
CLO debt
Liabilities:
Principal Amount	1,063,249		1,064,365
Fair value of liabilities	1,060,417		1,058,462
Borrowings from the FHLB
Liabilities:
Principal Amount	115,000		213,000
Fair value of liabilities	115,000		213,055
Senior unsecured notes
Liabilities:
Principal Amount	1,576,614		1,643,794
Fair value of liabilities	1,367,484		1,397,977
CMBS
Assets:
Principal Amount	9,316		9,415
Fair value of assets	8,974		9,030
CMBS interest-only
Assets:
Principal Amount	8,361		8,460
Fair value of assets	336		417
Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Principal Amount	3,380,845		3,907,295
Fair value of assets	3,365,688		3,875,708
Mortgage loan  receivables held for sale
Assets:
Principal Amount	31,350		31,350
Fair value of assets	26,272		27,391
FHLB stock
Assets:
Principal Amount	5,175		9,585
Fair value of assets	5,175		9,585
Level 1
Assets:
Fair value of assets	0		0
Liabilities:
Fair value of liabilities	0		0
Level 1 | Repurchase agreements - short-term
Liabilities:
Fair value of liabilities	0		0
Level 1 | Repurchase agreements - long-term
Liabilities:
Fair value of liabilities	0		0
Level 1 | Mortgage loan financing
Liabilities:
Fair value of liabilities	0		0
Level 1 | CLO debt
Liabilities:
Fair value of liabilities	0		0
Level 1 | Borrowings from the FHLB
Liabilities:
Fair value of liabilities	0		0
Level 1 | Senior unsecured notes
Liabilities:
Fair value of liabilities	0		0
Level 1 | CMBS
Assets:
Fair value of assets	0		0
Level 1 | CMBS interest-only
Assets:
Fair value of assets	0		0
Level 1 | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Fair value of assets	0		0
Level 1 | Mortgage loan  receivables held for sale
Assets:
Fair value of assets	0		0
Level 1 | FHLB stock
Assets:
Fair value of assets	0		0
Level 2
Assets:
Fair value of assets	0		0
Liabilities:
Fair value of liabilities	0		0
Level 2 | Repurchase agreements - short-term
Liabilities:
Fair value of liabilities	0		0
Level 2 | Repurchase agreements - long-term
Liabilities:
Fair value of liabilities	0		0
Level 2 | Mortgage loan financing
Liabilities:
Fair value of liabilities	0		0
Level 2 | CLO debt
Liabilities:
Fair value of liabilities	0		0
Level 2 | Borrowings from the FHLB
Liabilities:
Fair value of liabilities	0		0
Level 2 | Senior unsecured notes
Liabilities:
Fair value of liabilities	0		0
Level 2 | CMBS
Assets:
Fair value of assets	0		0
Level 2 | CMBS interest-only
Assets:
Fair value of assets	0		0
Level 2 | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Fair value of assets	0		0
Level 2 | Mortgage loan  receivables held for sale
Assets:
Fair value of assets	0		0
Level 2 | FHLB stock
Assets:
Fair value of assets	0		0
Level 3
Assets:
Fair value of assets	3,406,445		3,922,131
Liabilities:
Fair value of liabilities	3,577,485		3,994,458
Level 3 | Repurchase agreements - short-term
Liabilities:
Fair value of liabilities	360,447		481,465
Level 3 | Repurchase agreements - long-term
Liabilities:
Fair value of liabilities	256,170		366,398
Level 3 | Mortgage loan financing
Liabilities:
Fair value of liabilities	417,967		477,101
Level 3 | CLO debt
Liabilities:
Fair value of liabilities	1,060,417		1,058,462
Level 3 | Borrowings from the FHLB
Liabilities:
Fair value of liabilities	115,000		213,055
Level 3 | Senior unsecured notes
Liabilities:
Fair value of liabilities	1,367,484		1,397,977
Level 3 | CMBS
Assets:
Fair value of assets	8,974		9,030
Level 3 | CMBS interest-only
Assets:
Fair value of assets	336		417
Level 3 | Total mortgage loan receivables held for investment, net, at amortized cost
Assets:
Fair value of assets	3,365,688		3,875,708
Level 3 | Mortgage loan  receivables held for sale
Assets:
Fair value of assets	26,272		27,391
Level 3 | FHLB stock
Assets:
Fair value of assets	5,175		9,585
Recurring
Assets:
Fair value of assets	469,225		580,130
Recurring | Total mortgage loan receivables held for investment, net, at amortized cost | Discounted Cash Flow
Assets:
Principal Amount	3,380,845		3,907,295
Fair value of assets	3,365,688		3,875,708
Liabilities:
Allowance for credit losses	(39,600)		(20,800)
Recurring | CMBS
Assets:
Principal Amount	475,186		553,424
Fair value of assets	459,877		532,304
Recurring | CMBS interest-only
Assets:
Principal Amount	880,509		1,017,735
Fair value of assets	7,182		10,026
Recurring | GNMA interest-only
Assets:
Principal Amount	43,946		45,369
Fair value of assets	204		281
Recurring | Agency securities
Assets:
Principal Amount	25		36
Fair value of assets	24		35
Recurring | U.S. Treasury securities
Assets:
Principal Amount			36,000
Fair value of assets			35,328
Recurring | Equity securities
Assets:
Fair value of assets	121		118
Recurring | Nonhedge derivatives
Assets:
Principal Amount	161,900		204,700
Fair value of assets	1,817		2,038
Recurring | Level 1
Assets:
Fair value of assets	121		35,446
Recurring | Level 1 | CMBS
Assets:
Fair value of assets	0		0
Recurring | Level 1 | CMBS interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 1 | GNMA interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 1 | Agency securities
Assets:
Fair value of assets	0		0
Recurring | Level 1 | U.S. Treasury securities
Assets:
Fair value of assets			35,328
Recurring | Level 1 | Equity securities
Assets:
Fair value of assets	121		118
Recurring | Level 1 | Nonhedge derivatives
Assets:
Fair value of assets	0		0
Recurring | Level 2
Assets:
Fair value of assets	1,817		2,038
Recurring | Level 2 | CMBS
Assets:
Fair value of assets	0		0
Recurring | Level 2 | CMBS interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 2 | GNMA interest-only
Assets:
Fair value of assets	0		0
Recurring | Level 2 | Agency securities
Assets:
Fair value of assets	0		0
Recurring | Level 2 | U.S. Treasury securities
Assets:
Fair value of assets			0
Recurring | Level 2 | Equity securities
Assets:
Fair value of assets	0		0
Recurring | Level 2 | Nonhedge derivatives
Assets:
Fair value of assets	1,817		2,038
Recurring | Level 3
Assets:
Fair value of assets	467,287		542,646
Recurring | Level 3 | CMBS
Assets:
Fair value of assets	459,877		532,304
Recurring | Level 3 | CMBS interest-only
Assets:
Fair value of assets	7,182		10,026
Recurring | Level 3 | GNMA interest-only
Assets:
Fair value of assets	204		281
Recurring | Level 3 | Agency securities
Assets:
Fair value of assets	24		35
Recurring | Level 3 | U.S. Treasury securities
Assets:
Fair value of assets			0
Recurring | Level 3 | Equity securities
Assets:
Fair value of assets	0		0
Recurring | Level 3 | Nonhedge derivatives
Assets:
Fair value of assets	$ 0		$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Changes in Level 3 (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 542,646	$ 692,864
Transfer from level 2	0	0
Purchases	73,591	55,716
Sales	(14,930)	(4,261)
Paydowns/maturities	(136,892)	(135,988)
Amortization of premium/discount	(2,796)	(3,503)
Unrealized gain/(loss)	5,949	(14,719)
Realized gain/(loss) on sale	(281)	(106)
Ending balance	$ 467,287	$ 590,003
Fair value, recurring basis, unobservable input reconciliation, asset, gain (loss) statement of other comprehensive income, extensible list, not disclosed, flag	Unrealized gain/(loss)
Fair value, recurring basis, unobservable input reconciliation, asset, gain (loss) statement of income, extensible list, not disclosed, flag	Realized gain/(loss) on sale

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Quantitative Information (Details) - Level 3 $ in Thousands	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 467,287	$ 542,646
Valuation Technique, Discounted Cash Flow | Yield | CMBS | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0286	0.0289
Valuation Technique, Discounted Cash Flow | Yield | CMBS | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0676	0.0529
Valuation Technique, Discounted Cash Flow | Yield | CMBS | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.1754	0.1747
Valuation Technique, Discounted Cash Flow | Yield | CMBS interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0273	0.0139
Valuation Technique, Discounted Cash Flow | Yield | CMBS interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0657	0.0372
Valuation Technique, Discounted Cash Flow | Yield | CMBS interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.2181	0.1966
Valuation Technique, Discounted Cash Flow | Yield | GNMA interest-only | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0128	0.0128
Valuation Technique, Discounted Cash Flow | Yield | GNMA interest-only | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0946	0.0550
Valuation Technique, Discounted Cash Flow | Yield | GNMA interest-only | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.1000	0.1000
Valuation Technique, Discounted Cash Flow | Yield | Agency securities | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0270	0.0270
Valuation Technique, Discounted Cash Flow | Yield | Agency securities | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0270	0.0270
Valuation Technique, Discounted Cash Flow | Yield | Agency securities | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0270	0.0270
Recurring | CMBS
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 459,877	$ 532,304
Recurring | CMBS interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	7,182	10,026
Recurring | GNMA interest-only
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	204	281
Recurring | Agency securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying Value	$ 24	$ 35

XML

INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Apr. 30, 2023	Dec. 31, 2022
Income Tax Contingency [Line Items]
Income tax expense (benefit)	$ 1.2	$ 4.2	$ 2.0	$ 3.8
Deferred income tax expense (benefit)	2.0	$ (1.6)	2.9	$ 0.1
Deferred tax asset related to capital losses	2.8		2.8
Deferred tax assets related to interest expense limitation	1.5		1.5
Settlement pertaining to audit					$ 2.6
Incremental income tax expense due to audit			0.2
Other assets
Income Tax Contingency [Line Items]
Deferred tax liabilities	(4.7)		(4.7)			$ (1.8)
Accrued Liabilities
Income Tax Contingency [Line Items]
Liability for unrecognized tax benefits for uncertain income tax positions	$ 0.0		$ 0.0			$ 2.4

XML

COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Unfunded Loan Commitments
Lease liabilities	$ 16,620		$ 16,620
Operating lease, right-of-use asset	$ 15,000		$ 15,000
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Other liabilities		Other liabilities
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other assets		Other assets
Operating expenses	$ 500	$ 300	$ 1,600	$ 800
Treasury bills traded and not yet settled	9,916	$ 0	9,916	$ 0
Provision for loan losses
Unfunded Loan Commitments
Unfunded commitments of mortgage loan receivables held for investment	257,500		$ 257,500		$ 321,800
Length of additional mortgage loan financing			3 years
Unfunded commitments of mortgage loan receivables held for investment, additional funds			58.00%
U.S. Treasury Securities Traded, Not Yet Settled
Unfunded Loan Commitments
Treasury bills traded and not yet settled	$ 9,900		$ 9,900

XML

COMMITMENTS AND CONTINGENCIES - Future Minimum Operating Lease Obligation (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023 (last three months)	$ 473
2024	2,171
2025	2,207
2026	2,219
2027	2,232
Thereafter	13,344
Total undiscounted cash flows	22,646
Present value discount	(6,026)
Lease liabilities	$ 16,620
Weighted average incremental borrowing rate	6.62%
Remaining lease term	9 years 9 months 18 days

XML

SEGMENT REPORTING - Additional Information (Details)	9 Months Ended
	Sep. 30, 2023 segment
Segment Reporting [Abstract]
Number of reportable segments	3

XML

SEGMENT REPORTING - Schedule of Segments (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Statement [Abstract]
Interest income		$ 101,090	$ 77,359	$ 306,715	$ 198,832
Interest expense		(62,259)	(48,471)	(184,350)	(138,212)
Net interest income (expense)		38,831	28,888	122,365	60,620
(Provision for) release of loan loss reserves		(7,473)	(1,501)	(19,090)	(1,373)
Net interest income (expense) after provision for (release of) loan losses		31,358	27,387	103,275	59,247
Real estate operating income		24,761	27,679	73,847	82,678
Net result from mortgage loan receivables held for sale		(629)	796	(1,119)	(2,083)
Realized gain (loss) on securities		23	9	(276)	(75)
Unrealized gain (loss) on securities		(42)	(66)	(20)	(98)
Realized gain (loss) on sale of real estate, net		8,808	4,393	8,808	62,101
Fee and other income		1,829	2,697	6,987	12,238
Net result from derivative transactions		4,773	6,567	6,680	12,381
Earnings (loss) from investment in unconsolidated ventures		479	407	913	1,197
Gain on assignment of mortgage loan financing		921	0	10,600	685
Total other income (loss)		40,923	42,482	106,420	169,024
Compensation and employee benefits		(14,285)	(13,806)	(50,612)	(59,165)
Operating expenses		(4,775)	(5,143)	(15,018)	(15,303)
Real estate operating expenses		(9,456)	(10,069)	(29,071)	(28,928)
Real estate acquisition costs		(2,279)	(1,689)	(6,460)	(5,163)
Investment related expenses					(5,163)
Depreciation and amortization		(7,144)	(7,864)	(22,144)	(24,764)
Total costs and expenses		(37,939)	(38,571)	(123,305)	(133,323)
Income tax (expense) benefit		(3,147)	(2,613)	(4,913)	(3,897)
Net income (loss)		31,195	28,685	81,477	91,051
Total assets	[1]	5,503,142		5,503,142		$ 5,951,173
Investment in unconsolidated ventures	[1]	7,032		7,032		6,219
Investment in FHLB stock		5,200		5,200		9,600
Operating Segment
Income Statement [Abstract]
Investment in unconsolidated ventures		7,000		7,000		6,200
Operating Segment | Loans
Income Statement [Abstract]
Interest income		82,814	70,851	261,822	185,212
Interest expense		(32,601)	(17,344)	(92,236)	(44,330)
Net interest income (expense)		50,213	53,507	169,586	140,882
(Provision for) release of loan loss reserves		(7,473)	(1,501)	(19,090)	(1,373)
Net interest income (expense) after provision for (release of) loan losses		42,740	52,006	150,496	139,509
Real estate operating income		0	0	0	0
Net result from mortgage loan receivables held for sale		(629)	796	(1,119)	(2,083)
Realized gain (loss) on securities		0	0	0	0
Unrealized gain (loss) on securities		0	0	0	0
Realized gain (loss) on sale of real estate, net		0	0	0	0
Fee and other income		1,518	2,546	6,363	8,147
Net result from derivative transactions		4,449	4,837	5,390	8,761
Earnings (loss) from investment in unconsolidated ventures		0	0	0	0
Gain on assignment of mortgage loan financing		0		0	0
Total other income (loss)		5,338	8,179	10,634	14,825
Compensation and employee benefits		0	0	0	0
Operating expenses		0	0	0	0
Real estate operating expenses		0	0	0	0
Real estate acquisition costs		(1,704)	(917)	(4,459)
Investment related expenses					(1,715)
Depreciation and amortization		0	0	0	0
Total costs and expenses		(1,704)	(917)	(4,459)	(1,715)
Income tax (expense) benefit		0	0	0	0
Net income (loss)		46,374	59,268	156,671	152,619
Total assets		3,358,382		3,358,382		3,892,382
Operating Segment | Securities
Income Statement [Abstract]
Interest income		7,810	5,705	23,964	12,650
Interest expense		(52)	(1,327)	(3,149)	(2,429)
Net interest income (expense)		7,758	4,378	20,815	10,221
(Provision for) release of loan loss reserves		0	0	0	0
Net interest income (expense) after provision for (release of) loan losses		7,758	4,378	20,815	10,221
Real estate operating income		0	0	0	0
Net result from mortgage loan receivables held for sale		0	0	0	0
Realized gain (loss) on securities		23	9	(276)	(75)
Unrealized gain (loss) on securities		(42)	(66)	(20)	(98)
Realized gain (loss) on sale of real estate, net		0	0	0	0
Fee and other income		4	11	12	45
Net result from derivative transactions		241	982	612	2,235
Earnings (loss) from investment in unconsolidated ventures		0	0	0	0
Gain on assignment of mortgage loan financing		0		0	0
Total other income (loss)		226	936	328	2,107
Compensation and employee benefits		0	0	0	0
Operating expenses		0	0	0	0
Real estate operating expenses		0	0	0	0
Real estate acquisition costs		(48)	(102)	(144)
Investment related expenses					(200)
Depreciation and amortization		0	0	0	0
Total costs and expenses		(48)	(102)	(144)	(200)
Income tax (expense) benefit		0	0	0	0
Net income (loss)		7,936	5,212	20,999	12,128
Total assets		476,698		476,698		587,519
Operating Segment | Real Estate
Income Statement [Abstract]
Interest income		1	2	5	4
Interest expense		(7,677)	(8,088)	(22,053)	(27,642)
Net interest income (expense)		(7,676)	(8,086)	(22,048)	(27,638)
(Provision for) release of loan loss reserves		0	0	0	0
Net interest income (expense) after provision for (release of) loan losses		(7,676)	(8,086)	(22,048)	(27,638)
Real estate operating income		24,761	27,679	73,847	82,678
Net result from mortgage loan receivables held for sale		0	0	0	0
Realized gain (loss) on securities		0	0	0	0
Unrealized gain (loss) on securities		0	0	0	0
Realized gain (loss) on sale of real estate, net		8,808	4,393	8,808	62,101
Fee and other income		134	0	135	3,704
Net result from derivative transactions		83	748	678	1,385
Earnings (loss) from investment in unconsolidated ventures		479	407	913	1,197
Gain on assignment of mortgage loan financing		0		0	0
Total other income (loss)		34,265	33,227	84,381	151,065
Compensation and employee benefits		0	0	0	0
Operating expenses		0	0	0	0
Real estate operating expenses		(9,456)	(10,069)	(29,071)	(28,928)
Real estate acquisition costs		(190)	(138)	(765)
Investment related expenses					(437)
Depreciation and amortization		(7,034)	(7,864)	(21,822)	(24,756)
Total costs and expenses		(16,680)	(18,071)	(51,658)	(54,121)
Income tax (expense) benefit		0	0	0	0
Net income (loss)		9,909	7,070	10,675	69,306
Total assets		682,366		682,366		706,355
Corporate/Other
Income Statement [Abstract]
Interest income		10,465	801	20,924	966
Interest expense		(21,929)	(21,712)	(66,912)	(63,811)
Net interest income (expense)		(11,464)	(20,911)	(45,988)	(62,845)
(Provision for) release of loan loss reserves		0	0	0	0
Net interest income (expense) after provision for (release of) loan losses		(11,464)	(20,911)	(45,988)	(62,845)
Real estate operating income		0	0	0	0
Net result from mortgage loan receivables held for sale		0	0	0	0
Realized gain (loss) on securities		0	0	0	0
Unrealized gain (loss) on securities		0	0	0	0
Realized gain (loss) on sale of real estate, net		0	0	0	0
Fee and other income		173	140	477	342
Net result from derivative transactions		0	0	0	0
Earnings (loss) from investment in unconsolidated ventures		0	0	0	0
Gain on assignment of mortgage loan financing		921		10,600	685
Total other income (loss)		1,094	140	11,077	1,027
Compensation and employee benefits		(14,285)	(13,806)	(50,612)	(59,165)
Operating expenses		(4,775)	(5,143)	(15,018)	(15,303)
Real estate operating expenses		0	0	0	0
Real estate acquisition costs		(337)	(532)	(1,092)
Investment related expenses					(2,811)
Depreciation and amortization		(110)	0	(322)	(8)
Total costs and expenses		(19,507)	(19,481)	(67,044)	(77,287)
Income tax (expense) benefit		(3,147)	(2,613)	(4,913)	(3,897)
Net income (loss)		(33,024)	$ (42,865)	(106,868)	$ (143,002)
Total assets		985,696		985,696		764,917
Corporate/Other | Senior Unsecured Notes
Income Statement [Abstract]
Senior notes		$ 1,600,000		$ 1,600,000		$ 1,600,000

[1] Includes amounts relating to consolidated variable interest entities. Refer to Note 2 and Note 9.