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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 March 31, 2024
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: 001-34452
__________________________________ 
Apollo Commercial Real Estate Finance, Inc.
(Exact name of registrant as specified in its charter)
__________________________________ 
Maryland 27-0467113
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
Apollo Commercial Real Estate Finance, Inc.
c/o Apollo Global Management, Inc.
9 West 57th Street, 42nd Floor,
New York, New York 10019
(Address of principal executive offices) (Zip Code)
(212) 515–3200
(Registrant's telephone number, including area code)
__________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 par valueARINew York Stock Exchange


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      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  
As of April 26, 2024, there were 142,162,205 shares, $0.01 par value per share, of the registrant's common stock issued and outstanding.





Table of Contents
 

See notes to unaudited condensed consolidated financial statements.
3

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Apollo Commercial Real Estate Finance, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands—except share data)
March 31, 2024December 31, 2023
Assets:
Cash and cash equivalents$161,190 $225,438 
Commercial mortgage loans, net(1)(3)
7,846,460 7,925,359 
Subordinate loans, net(2)(3)
303,965 432,734 
Commercial mortgage loan, held for sale(4)
135,465  
Real estate owned, held for investment, net(5) (net of $16,254 and $10,404 accumulated depreciation in 2024 and 2023, respectively)
627,099 519,498 
Other assets103,529 85,623 
Derivative assets, net47,284 29,425 
Assets related to real estate owned, held for sale 78,653 
Total Assets$9,224,992 $9,296,730 
Liabilities and Stockholders' Equity
Liabilities:
Secured debt arrangements, net$5,596,967 $5,538,476 
Senior secured term loans, net757,912 759,150 
Senior secured notes, net495,835 495,637 
Accounts payable, accrued expenses and other liabilities(6)
155,542 120,334 
Debt related to real estate owned, held for investment, net161,878 161,562 
Payable to related party9,423 9,553 
Liabilities related to real estate owned, held for sale 3,285 
Total Liabilities7,177,557 7,087,997 
Commitments and Contingencies (see Note 18)
Stockholders' Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, Series B-1, 6,770,393 shares issued and outstanding ($169,260 liquidation preference) in 2024 and 2023 (see Note 17)
68 68 
Common stock, $0.01 par value, 450,000,000 shares authorized, 142,096,715 and 140,595,995 shares issued and outstanding in 2024 and 2023, respectively
1,421 1,414 
Additional paid-in-capital2,724,395 2,727,488 
Accumulated deficit(678,449)(520,237)
Total Stockholders' Equity2,047,435 2,208,733 
Total Liabilities and Stockholders' Equity$9,224,992 $9,296,730 
———————
(1) Includes $7,642,848 and $7,705,491 pledged as collateral under secured debt arrangements in 2024 and 2023, respectively.
(2) Includes $246,725 and $232,991 pledged as collateral under secured debt arrangements in 2024 and 2023, respectively.
(3) Net of $367,558 and $219,482 CECL Allowances comprised of $335,000 and $193,000 Specific CECL Allowance and $32,558    and $26,482 General CECL Allowance in 2024 and 2023, respectively.
(4) Includes $135,465 pledged as collateral under secured debt arrangements in 2024.
(5) Includes $154,048 pledged as collateral under secured debt arrangements in 2024 and 2023.
(6) Includes $3,625 and $4,017 of General CECL Allowance related to unfunded commitments on commercial mortgage loans and subordinate loans, net in 2024 and 2023, respectively.

See notes to unaudited condensed consolidated financial statements.
4

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations (Unaudited)
(in thousands—except share and per share data)
 
Three months ended March 31,
 20242023
Net interest income:
Interest income from commercial mortgage loans$183,716 $166,147 
Interest income from subordinate loans and other lending assets 849 9,707 
Interest expense(127,887)(104,868)
Net interest income$56,678 $70,986 
Revenue from real estate owned operations23,857 16,131 
Total net revenue$80,535 $87,117 
Operating expenses:
General and administrative expenses (includes equity-based compensation of $4,188 and $4,358 in 2024 and 2023, respectively)
$(7,373)$(7,015)
Management fees to related party(9,421)(9,517)
Operating expenses related to real estate owned(19,893)(14,006)
Depreciation and amortization on real estate owned(4,656)(3,986)
Total operating expenses$(41,343)$(34,524)
Other income, net$570 $732 
Increase in current expected credit loss allowance, net
(147,684)(4,390)
Foreign currency translation gain (loss)(19,563)18,634 
Gain (loss) on foreign currency forward contracts (includes unrealized gains (losses) of $18,053 and $(35,851) in 2024 and 2023 respectively)
23,398 (14,135)
Gain (loss) on interest rate hedging instruments (includes unrealized gains (losses) of $(194) and $(4,813) 2024 and 2023 respectively)
356 (107)
Valuation allowance, commercial mortgage loan held for sale(679) 
Net realized loss on investments (4,624)
Gain on extinguishment of debt 213 
Net income (loss) before taxes$(104,410)$48,916 
Income tax provision(114) 
Net income (loss)$(104,524)$48,916 
Preferred dividends(3,068)(3,068)
Net income (loss) available to common stockholders$(107,592)$45,848 
Net income (loss) per share of common stock:
Basic$(0.76)$0.32 
Diluted$(0.76)$0.32 
Basic weighted-average shares of common stock outstanding141,869,604 141,072,471 
Diluted weighted-average shares of common stock outstanding141,869,604 155,483,979 
Dividend declared per share of common stock$0.35 $0.35 
    



See notes to unaudited condensed consolidated financial statements.
5

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
(in thousands—except share and per share data)
 Preferred StockCommon StockAdditional
Paid-In-Capital
Accumulated
Deficit
Total
SharesParSharesPar
Balance at January 1, 20246,770,393 $68 141,358,605 $1,414 $2,727,488 $(520,237)$2,208,733 
Capital increase (decrease) related to Equity Incentive Plan— — 738,110 7 (3,093)— (3,086)
Net loss— — — — — (104,524)(104,524)
Dividends declared on preferred stock - $0.45 per share
— — — — — (3,068)(3,068)
Dividends declared on common stock and RSUs - $0.35 per share
— — — — — (50,620)(50,620)
Balance at March 31, 20246,770,393 $68 142,096,715 $1,421 $2,724,395 $(678,449)$2,047,435 


Preferred StockCommon StockAdditional
Paid-In-Capital
Accumulated
Deficit
Total
SharesParSharesPar
Balance at January 1, 20236,770,393 $68 140,595,995 $1,406 $2,716,907 $(363,877)$2,354,504 
Capital increase (decrease) related to Equity Incentive Plan — — 670,044 7 (2,352)— (2,345)
Net income— — — — — 48,916 48,916 
Dividends declared on preferred stock - $0.45 per share
— — — — — (3,068)(3,068)
Dividends declared on common stock and RSUs - $0.35 per share
— — — — — (50,446)(50,446)
Balance at March 31, 20236,770,393 $68 141,266,039 $1,413 $2,714,555 $(368,475)$2,347,561 

See notes to unaudited condensed consolidated financial statements.
6


Apollo Commercial Real Estate Finance, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows (Unaudited)
(in thousands)
 For the three months ended March 31,
 20242023
Cash flows from operating activities:
     Net income (loss)$(104,524)$48,916 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
     Amortization of discount/premium and payment-in-kind interest(6,716)(10,012)
     Amortization of deferred financing costs4,027 3,807 
     Equity-based compensation4,188 4,358 
Increase in current expected credit loss allowance, net147,684 4,390 
Valuation allowance, commercial mortgage loan held for sale679  
Foreign currency (gain) loss20,881 (1,525)
Unrealized loss (gain) on foreign currency contracts(18,053)35,851 
Unrealized loss on interest rate hedging instruments194 4,813 
Depreciation and amortization on real estate owned4,656 3,986 
Gain on extinguishment of debt (213)
     Net realized loss (gain) on investment 4,624 
     Changes in operating assets and liabilities:
          Proceeds received from payment-in-kind interest 3,573 
          Other assets(12,575)1,012 
          Accounts payable, accrued expenses and other liabilities12,532 6,864 
          Payable to related party(130)(194)
Net cash provided by operating activities$52,843 $110,250 
Cash flows from investing activities:
    New funding of commercial mortgage loans (181,017)
    Add-on funding of commercial mortgage loans(308,032)(76,421)
    Add-on funding of subordinate loans(13,734)(37,400)
    Proceeds received from the repayment and sale of commercial mortgage loans168,526 435,442 
    Proceeds received from the repayment of subordinate loans and other lending assets102 6,611 
    Origination and exit fees received on commercial mortgage loans, and subordinate loans, net4,346 4,290 
    Increase (decrease) in collateral related to derivative contracts, net20,020 (50,830)
    Capital expenditures on real estate assets(37,901)(14,131)
    Cash received from hotel title assumption 569 
Net cash provided by (used in) investing activities$(166,673)$87,113 
Cash flows from financing activities:
     Proceeds from secured debt arrangements548,557 173,919 
     Repayments of secured debt arrangements(433,604)(191,681)
     Repayments of senior secured term loan principal(2,000)(2,000)
     Repayments and repurchases of convertible notes (6,877)
     Payment of deferred financing costs(3,454)(5,873)
     Payment of withholding tax on RSU delivery(7,274)(6,703)
     Dividends on common stock(50,839)(50,643)
     Dividends on preferred stock(3,068)(3,068)
Net cash provided by (used in) financing activities$48,318 $(92,926)

See notes to unaudited condensed consolidated financial statements.
7


Apollo Commercial Real Estate Finance, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows (Continued)
(in thousands)

 For the three months ended March 31,
 20242023
Net increase (decrease) in cash and cash equivalents, including cash classified within assets related to real estate owned, held for sale$(65,512)$104,437 
Decrease (increase) in cash classified within assets related to real estate owned, held for sale577 5,677 
Net increase (decrease) in cash and cash equivalents$(64,935)$110,114 
Cash and cash equivalents beginning of period225,438 222,030 
Effects of foreign currency translation on cash and cash equivalents687 (611)
Cash and cash equivalents end of period$161,190 $331,533 
Supplemental disclosure of cash flow information:
    Interest paid$116,463 $89,983 
Supplemental disclosure of non-cash financing activities:
    Dividend declared, not yet paid$53,688 $53,514 
    Change in participation sold (25,130)
    Change in loan proceeds held by servicer1,624 (2,327)
Assumption of real estate 75,000 
Assumption of other assets related to real estate owned 2,827 
Assumption of accounts payable, accrued expenses and other liabilities related to real estate owned (3,396)
Transfer of assets related to real estate owned, held for sale to assets related to real estate owned held for investment, net70,688 151,676 
Transfer of assets related to real estate owned, held for sale to other assets2,280 4,357 
Transfer of liabilities related to real estate owned, held for sale to accounts payable, accrued expenses and other liabilities3,937 7,163 
Transfer of commercial mortgage loan to commercial mortgage loan, held for sale135,465  
See notes to unaudited condensed consolidated financial statements.
8

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 – Organization
Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate related debt investments. These asset classes are referred to as our target assets.
We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo").
We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include current expected credit loss ("CECL") allowances. Actual results may differ from estimates.
These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any other future period.
We currently operate in one reporting segment.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provide new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods with fiscal years beginning after December 15, 2024. ASU 2023-07 is to be adopted retrospectively to all prior periods presented. We are currently assessing the impact this guidance will have on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. We are currently assessing the impact of this guidance, however, we do not expect a material impact to our consolidated financial statements.
Reference Rate Reform
In response to concerns about structural risks of interbank offered rates, including the London Interbank Offered Rate ("LIBOR"), regulators and market participants in various jurisdictions have undertaken efforts, generally referred to as reference rate reform, to eliminate certain reference rates, and introduce new reference rates that are based on a larger and more liquid population of observable transactions. As of December 31, 2023, all our floating rate loans and related financings have transitioned to the applicable replacement benchmark rate or reference a benchmark rate.

9

Note 3 – Fair Value Disclosure
GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair value. Market-based or observable inputs are the preferred source of values, followed by valuation models using management's assumptions in the absence of market-based or observable inputs. The three levels of the hierarchy as noted in Accounting Standards Codification, "Fair Value Measurements and Disclosures" ("ASC 820") are described below:
Level I — Quoted prices in active markets for identical assets or liabilities.
Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.
While we anticipate that our valuation methods are appropriate and consistent with valuation methods used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.
The fair values of foreign exchange ("Fx") forwards are determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying countries. Our Fx forwards are classified as Level II in the fair value hierarchy.
The fair value of our interest rate cap is determined by using the market standard methodology of discounting the future expected cash receipts that occur when variable interest rates rise above the strike rate of the interest rate cap. The variable interest rates used in the calculation of projected receipts on the interest rate cap are based on a third-party expert's expectation of future interest rates derived from observable market interest rate curves and volatility. Our interest rate caps are classified as Level II in the fair value hierarchy and manage our exposure to variable cash flows on certain of our borrowings. As of March 31, 2024 and December 31, 2023, we held one interest rate cap related to our construction financing which was purchased on September 26, 2023. Refer to "Note 5 – Real Estate Owned" and "Note 11 – Derivatives" for further detail.
The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with recurring fair value measurements were categorized as of March 31, 2024 and December 31, 2023 ($ in thousands): 
 Fair Value as of March 31, 2024Fair Value as of December 31, 2023
 Level ILevel IILevel IIITotalLevel ILevel IILevel IIITotal
Recurring fair value measurements:
Foreign currency forward, net$ $46,118 $ $46,118 $ $28,065 $ $28,065 
Interest rate cap asset 1,166  1,166  1,360  1,360 
Total financial instruments$ $47,284 $ $47,284 $ $29,425 $ $29,425 
Non-recurring Fair Value Measurements
Loans Held for Sale
Loans are classified as held for sale if there is an intent to sell them in the short-term following the reporting date. These loans are recorded at the lower of amortized cost or fair value, less selling costs, unless the fair value option was elected at the time of origination. If the loan's fair value, less selling costs, is determined to be less than its amortized cost, a nonrecurring fair value adjustment may be recorded through a valuation allowance.
The fair value of loans held for sale may be estimated using sales of comparable loans as supported by independent market data, or a contractually negotiated sales price. We consider the inputs used to calculate the fair value of loans held for sale as unobservable inputs. Accordingly, we classify the fair value of loans held for sale within Level III of the fair value hierarchy.
During the three months ended March 31, 2024, we entered into an agreement to sell a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI at a price of 99.5%. We recorded a fair value adjustment of $0.7 million (representing the difference between the loan's amortized cost and the loan's fair value at the agreed upon price),
10

which is included within valuation allowance, commercial mortgage loan held for sale on our condensed consolidated statement of operations. The loan is carried at fair value of $135.5 million on our condensed consolidated balance sheet, as of March 31, 2024. The loan sale subsequently closed in April 2024.
Refer to "Note 21 – Subsequent Events" for additional detail.

Real Estate Owned
Property acquired through foreclosure or deed-in-lieu of foreclosure is classified as real estate owned and recognized at fair value on our condensed consolidated balance sheet upon acquisition in accordance with ASC 805, "Business Combinations" ("ASC 805"). We are required to record real estate owned, a nonfinancial asset, at fair value on a non-recurring basis in accordance with ASC 820. Under ASC 820, we may utilize the income, market or cost approach (or combination thereof) to determine the fair value of real estate owned. We deem the inputs used in these approaches to be significant unobservable inputs. Therefore, we classify the fair value of real estate owned within Level III of the fair value hierarchy.
On March 31, 2023, we acquired legal title of a hotel property in Atlanta, GA ("Atlanta Hotel") through a deed-in-lieu of foreclosure. At the time of acquisition, we determined the fair value of the net real estate assets to be $75.0 million, using a combination of market and income approaches. We utilized a discount rate and capitalization rate of 10.5% and 9.5%, respectively. During the three months ended June 30, 2023, the Atlanta Hotel's assets and liabilities were reclassified to held for sale and the fair value of the net real estate assets, less costs to sell, was in excess of our cost basis. During the three months ended March 31, 2024, we determined that the sale to a third party from whom we received an unsolicited offer was no longer probable, and we are not actively marketing the property for sale. Therefore, as of March 31, 2024, the Atlanta Hotel no longer met the criteria for held for sale and was reclassified to real estate owned, held for investment. No impairments had been recorded as of March 31, 2024 or December 31, 2023.
On August 3, 2022, we acquired legal title of a multifamily development property located in downtown Brooklyn, NY ("Brooklyn Development") through a deed-in-lieu of foreclosure. We determined the fair value of the real estate assumed to be $270.1 million, based on the market value of the land at the time of acquisition. No impairments had been recorded as of March 31, 2024 or December 31, 2023.
On May 24, 2021, we acquired legal title to a full-service luxury hotel in Washington D.C. ("D.C. Hotel") through a deed-in-lieu of foreclosure. We assumed the D.C. Hotel's assets and liabilities, including a $110.0 million mortgage loan which we repaid at par. At the time of acquisition, we determined the fair value of the real estate assets to be $154.3 million. No impairments had been recorded as of March 31, 2024 or December 31, 2023.
Refer to "Note 5 – Real Estate Owned" for additional discussions.
Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net
Our loan portfolio was comprised of the following at March 31, 2024 and December 31, 2023 ($ in thousands):
Loan TypeMarch 31, 2024December 31, 2023
Commercial mortgage loans, net(1)
$7,846,460 $7,925,359 
Commercial mortgage loan, held for sale135,465  
Subordinate loans, net303,965 432,734 
Carrying value, net$8,285,890 $8,358,093 
  ———————
(1)Includes $83.5 million and $95.5 million in 2024 and 2023, respectively, of contiguous financing structured as subordinate loans.

Our loan portfolio consisted of 99% floating rate loans, based on amortized cost, as of both March 31, 2024 and December 31, 2023.
Activity relating to our loan portfolio for the three months ended March 31, 2024 was as follows ($ in thousands):
Principal
Balance
Deferred Fees/Other ItemsSpecific CECL AllowanceCarrying Value, Net
December 31, 2023$8,610,110 $(32,535)$(193,000)$8,384,575 
Add-on loan fundings(1)
321,766 — — 321,766 
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Loan repayments(175,731)— — (175,731)
Gain (loss) on foreign currency translation(72,337)289 — (72,048)
Increase in Specific CECL Allowance, net— — (142,000)(142,000)
Valuation allowance, loan held for sale(679) — (679)
Deferred fees and other items(2)
— (4,936)— (4,936)
Amortization of fees 7,501 — 7,501 
March 31, 2024$8,683,129 $(29,681)$(335,000)$8,318,448 
General CECL Allowance(3)
(32,558)
Carrying value, net$8,285,890 
———————
(1)Represents fundings committed prior to 2024.
(2)Other items primarily consist of purchase discounts or premiums, cost recovery interest, exit fees, deferred origination expenses, and the activity of unconsolidated joint ventures.
(3)$3.6 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):
March 31, 2024December 31, 2023
Number of loans 49 50 
Principal balance$8,683,129 $8,610,110 
Carrying value, net$8,285,890 $8,358,093 
Unfunded loan commitments(1)
$555,596 $868,582 
Weighted-average cash coupon(2)
8.4 %8.3 %
Weighted-average remaining fully-extended term(3)
2.3 years2.3 years
Weighted-average expected term(4)
2.0 years1.8 years
———————
(1)Unfunded loan commitments are funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.
(2)For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on non-accrual, the interest rate used in calculating weighted-average cash coupon is 0%.
(3)Assumes all extension options are exercised.
(4)Expected term represents our estimated timing of repayments as of the specified dates. Excludes risk-rated 5 loans.

Property Type
The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
March 31, 2024December 31, 2023
Property TypeCarrying
Value
% of
Portfolio
(1)
Carrying
Value
% of
Portfolio(1)
Hotel$1,978,794 23.7 %$2,128,256 25.4 %
Office1,635,450 19.7 1,593,320 19.0 
Retail1,394,228 16.8 1,407,764 16.8 
Residential1,099,134 13.2 1,247,238 14.9 
Mixed Use696,048 8.4 679,303 8.1 
Healthcare504,075 6.1 511,803 6.1 
Industrial276,350 3.3 293,133 3.5 
Other(2)
734,369 8.8 523,758 6.2 
Total$8,318,448 100.0 %$8,384,575 100.0 %
General CECL Allowance(3)
(32,558)(26,482)
Carrying value, net$8,285,890 $8,358,093 
———————
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(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.
(2)Other property types include pubs (2.5%), parking garages (2.3%), caravan parks (2.4%) and urban predevelopment (1.6%) in 2024, and parking garages (2.3%), caravan parks (2.4%) and urban predevelopment (1.5%) in 2023.
(3)$3.6 million and $4.0 million of the General CECL Allowance for 2024 and 2023, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Geography
The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
March 31, 2024December 31, 2023
Geographic LocationCarrying
Value
% of
Portfolio
(1)
Carrying
Value
% of
Portfolio(1)
United Kingdom$2,937,602 35.3 %$2,675,097 31.9 %
New York City1,597,081 19.2 1,736,856 20.7 
Other Europe(2)
1,509,453 18.2 1,686,425 20.1 
Southeast537,333 6.5 535,054 6.4 
Midwest519,395 6.2 522,137 6.2 
West484,581 5.8 484,842 5.8 
Other(3)
733,003 8.8 744,164 8.9 
Total$8,318,448 100.0 %$8,384,575 100.0 %
General CECL Allowance(4)
(32,558)(26,482)
Carrying value, net$8,285,890 $8,358,093 
———————
(1)Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.
(2)Other Europe includes Germany (7.3%), Italy (3.3%), Spain (4.1%), Sweden (2.8%), Ireland (0.5%) and the Netherlands (0.2%) in 2024 and Germany (7.4%), Italy (4.9%), Spain (4.2%), Sweden (2.9%), Ireland (0.5%) and the Netherlands (0.2%) in 2023.
(3)Other includes Northeast (4.9%), Southwest (1.7%), Mid-Atlantic (1.1%) and Other (1.1%) in 2024 and Northeast (5.0%), Southwest (1.7%), Mid-Atlantic (1.1%) and Other (1.1%) in 2023.
(4)$3.6 million and $4.0 million of the General CECL Allowance for 2024 and 2023, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Risk Rating
We assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, loan to value ("LTV") ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. We apply these various factors on a case-by-case basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations. This review is performed quarterly. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, which ratings are defined as follows:
    1.    Very low risk
    2.    Low risk
    3. Moderate/average risk
    4. High risk/potential for loss: a loan that has a risk of realizing a principal loss
    5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss, or an impairment has been recorded

The following tables present the carrying value of our loan portfolio by year of origination and internal risk rating and gross write-offs by year of origination as of March 31, 2024 and December 31, 2023, respectively ($ in thousands):

March 31, 2024
Amortized Cost by Year Originated
13

Risk RatingNumber of LoansTotal% of Portfolio20242023202220212020Prior
1$  %$ $ $ $ $ $ 
24447,202 5.4 %  332,059 49,729  65,414 
3417,658,452 92.1 % 642,657 2,412,096 2,206,805 389,815 2,007,079 
4285,612 1.0 %     85,612 
52127,182 1.5 %    27,881 99,301 
Total49$8,318,448 100.0 %$ $642,657 $2,744,155 $2,256,534 $417,696 $2,257,406 
General CECL Allowance(1)
(32,558)
Total carrying value, net$8,285,890 
Weighted-Average Risk Rating3.0
Gross write-offs$ $— $— $— $— $— $ 


December 31, 2023
Amortized Cost by Year Originated
Risk RatingNumber of LoansTotal% of Portfolio20232022202120202019Prior
1$  %$ $ $ $ $ $ 
24478,440 5.7 % 280,572   132,309 65,560 
3427,548,252 90.0 %440,720 2,426,511 2,285,902 387,323 1,465,618 542,177 
4288,112 1.1 %     88,112 
52269,771 3.2 %   169,881  99,890 
Total50$8,384,575 100.0 %$440,720 $2,707,083 $2,285,902 $557,204 $1,597,927 $795,739 
General CECL Allowance(1)
(26,482)
Total carrying value, net$8,358,093 
Weighted-Average Risk Rating3.0
Gross write-offs$81,890 $— $— $— $— $— $81,890 
———————
(1)$3.6 million and $4.0 million of the General CECL Allowance for 2024 and 2023, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.
CECL
In accordance with ASC Topic 326 "Financial Instruments – Credit Losses," which we refer to as the "CECL Standard", we record allowances for loans and held-to-maturity debt securities that are deducted from the carrying amount of the assets to present the net carrying value of the amounts expected to be collected on the assets. We record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing financial difficulty. For the remainder of the portfolio, we record a general allowance ("General CECL Allowance", and together with the Specific CECL Allowance, "CECL Allowances") on a collective basis by assets with similar risk characteristics. We have elected to use the weighted-average remaining maturity ("WARM") method in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method.
The following schedule illustrates changes in CECL Allowances for the three months ended March 31, 2024 ($ in thousands):
14

Specific CECL Allowance(1)
General CECL AllowanceTotal CECL AllowanceCECL Allowance as % of Amortized Cost
FundedUnfundedTotal
General(1)
Total
December 31, 2023$193,000 $26,482 $4,017 $30,499 $223,499 0.38 %2.61 %
Changes:
Allowances (Reversals), net142,000 6,076 (392)5,684 147,684 
March 31, 2024$335,000 $32,558 $3,625 $36,183 $371,183 0.44 %4.29 %
(1)Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.

The following schedule illustrates changes in CECL Allowances for the three months ended March 31, 2023 ($ in thousands):
Specific CECL Allowance(1)
General CECL AllowanceTotal CECL AllowanceCECL Allowance as % of Amortized Cost
FundedUnfundedTotal
General(1)
Total
December 31, 2022$133,500 $26,224 $4,347 $30,571 $164,071 0.36 %1.86 %
Changes:
Allowances 4,043 348 4,391 4,391 
March 31, 2023$133,500 $30,267 $4,695 $34,962 $168,462 0.42 %1.95 %
(1)Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.


General CECL Allowance
In determining the General CECL Allowance using the WARM method, an annual historical loss rate, adjusted for macroeconomic estimates, is applied to the amortized cost of an asset, or pool of assets, over each subsequent period for the assets' remaining expected life. We considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment for a reasonable and supportable forecast period. The CECL Standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions, including inflation, labor shortages and interest rates.

We derive an annual historical loss rate based on a commercial mortgage-backed securities ("CMBS") database with historical losses from 1998 through the first quarter of 2024 provided by a third party, Trepp LLC ("Trepp"). We apply various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate is further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period of eight quarters. In assessing the macroeconomic environment, we consider macroeconomic factors, including unemployment rate, commercial real estate prices, and market liquidity. We compare the historical data for each metric to historical commercial real estate losses in order to determine the correlation of the data. We use projections, obtained from third-party service providers, of each factor to approximate the impact the macroeconomic outlook may have on our loss rate.

The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan(s). The subordinate loans, by virtue of being the first loss position, are required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheets within accounts payable, accrued expenses and other liabilities.
Additionally, we have made an accounting policy election to exclude accrued interest from the amortized cost basis of the related commercial mortgage loans and subordinate loans and other lending assets in determining the General CECL Allowance, as any uncollectible accrued interest receivable is written off in a timely manner. As of March 31, 2024 and December 31, 2023, accrued interest receivable was $85.1 million and $72.4 million, respectively, and included within other assets on our condensed consolidated balance sheets.
Although our secured debt obligations and senior secured term loan financing have a minimum tangible net worth
15

maintenance covenant, the General CECL Allowance has no impact on these covenants as we are permitted to add back the General CECL Allowance for the computation of tangible net worth as defined in the respective agreements.
The following schedule sets forth our General CECL Allowance as of March 31, 2024 and December 31, 2023 ($ in thousands):
March 31, 2024December 31, 2023
Commercial mortgage loans, net$31,397 $25,723 
Subordinate loans, net1,161 759 
Unfunded commitments(1)
3,625 4,017 
Total General CECL Allowance$36,183 $30,499 
 ———————
(1)The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheets within accounts payable, accrued expenses and other liabilities.
Our General CECL Allowance increased by $5.7 million during the quarter ended March 31, 2024. The increase was
primarily related to extending our expected loan repayment dates as well as an increase to the historical loss rate derived from Trepp's data. The increase was partially offset by the favorable impacts of portfolio seasoning.
Specific CECL Allowance
For collateral-dependent loans where we have deemed the borrower/sponsor to be experiencing financial difficulty, we have elected to apply a practical expedient in accordance with the CECL Standard in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the underlying collateral and the carrying value of the loan (prior to the Specific CECL Allowance). When the repayment or satisfaction of a loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated cost to sell the collateral. Collateral-dependent loans evaluated for a Specific CECL Allowance are removed from the General CECL Allowance pool. The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. The key unobservable inputs used to determine the fair value of the underlying collateral may vary depending on the information available to us and market conditions as of the valuation date.
We regularly evaluate the extent and impact of any credit migration 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. The Specific CECL Allowance is evaluated on a quarterly basis. Specifically, a property's operating results and any cash reserves are analyzed and used to assess (i) whether cash 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 and/or (iii) the liquidation value of the underlying collateral. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower's competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such impairment analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower's exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants.
The following table summarizes our risk rated 5 loans as of March 31, 2024, which were analyzed for Specific CECL Allowances ($ in thousands):
TypeProperty typeLocationAmortized cost prior to Specific CECL AllowanceSpecific CECL AllowanceAmortized costInterest recognition status/ as of dateRisk rating
Mortgage
Retail(1)(2)
Cincinnati, OH$166,301$67,000$99,301 Non-Accrual/ 10/1/20195
Mortgage total:$166,301$67,000$99,301
Mezzanine
Residential(3)
Manhattan, NY$295,881$268,000$27,881Non-Accrual/ 7/1/20215
Mezzanine total:$295,881$268,000$27,881
Total:$462,182$335,000$127,182
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(1)The fair value of retail collateral was determined by applying a capitalization rate of 9.0%.
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(2)In September 2018, we entered a joint venture with Turner Consulting II, LLC ("Turner Consulting"), through an entity which owns the underlying property that secures our loan. Turner Consulting contributed 10% of the venture's equity and we contributed 90%. The entity was deemed to be a variable interest entity ("VIE"), and we determined that we are not the primary beneficiary of that VIE as we do not have the power to direct the entity's activities. During the three months ended March 31, 2024 and 2023, $0.6 million and $0.7 million, respectively, of interest paid was applied towards reducing the carrying value of the loan. During the second quarter of 2023, the loan's maturity was extended from September 2023 to September 2024.
(3)The fair value of the residential collateral was determined by making certain projections and assumptions with respect to future performance and a discount rate of 10%.
During the three months ended March 31, 2024, we recorded an additional $142.0 million Specific CECL Allowance on our Junior Mezzanine A Loan (as defined below).
We cease accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. The amortized cost basis for loans on non-accrual was $556.0 million and $693.7 million as of March 31, 2024 and December 31, 2023, respectively. Under certain circumstances, we may apply the cost recovery method under which interest collected on a loan reduces the loan's amortized cost. For the three months ended March 31, 2024 and 2023, we received $0.6 million and $0.7 million, respectively, in interest that reduced amortized cost under the cost recovery method.
As of March 31, 2024 and December 31, 2023, the amortized cost basis for loans with accrued interest past due 90 or more days was $556.0 million and $693.7 million, respectively. As of March 31, 2024 and December 31, 2023, there were no loans with accrued interest between 30 and 89 days past due.
Loan Modifications Pursuant to ASC 326
ASC 326, "Financial Instruments – Credit Losses," requires disclosure of loan modifications made to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant payment delays, or term extensions in the current reporting period. As of March 31, 2024 and December 31, 2023, the aggregate amortized cost basis of such modified receivables was $534.8 million and $674.5 million, respectively, or 6.4% and 8.0% of our aggregate commercial mortgage loans and subordinate loans by amortized cost, respectively. There were no unfunded commitments as of both March 31, 2024 and December 31, 2023 related to these loans.
Chicago Office
In March 2018, we originated a first mortgage loan secured by an office property in Chicago, IL. In July 2023, we deemed the borrower to be experiencing financial difficulty and modified our loan to provide a two year term extension (and a six-month extension option) in exchange for a partial repayment. These modified terms are included in the determination of our general CECL reserve for the quarter ended March 31, 2024. The loan is performing pursuant to its contractual terms and its risk rating remains a four as of March 31, 2024.
Manhattan Residential
In August 2022, we refinanced three of our mezzanine loans (a senior mezzanine loan ("Senior Mezzanine Loan") and two junior mezzanine loans ("Junior Mezzanine A Loan" and "Junior Mezzanine B Loan" collectively referred to as "Junior Mezzanine Loan")), and originated a commercial mortgage loan ("Senior Loan") as part of an overall recapitalization. All of the loans are secured by an ultra-luxury residential property in Manhattan, NY.
In refinancing the Senior Mezzanine Loan and Junior Mezzanine Loan, we modified the loan terms with the borrower to include an interest rate reduction and two year extension of the term on all three loans. Based on our analysis under ASC 310-20 "Receivables – Nonrefundable Fees and Other Costs" ("ASC 310-20"), we have deemed this refinance to be a continuation of our existing loans.
The modified loan terms as discussed above have been reflected in our calculation of CECL for the quarter ended March 31, 2024. R