BLACKSTONE MORTGAGE TRUST, INC. [BXMT] Filings

10-Q 1 bxmt-20230930.htm 10-Q bxmt-20230930

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


☐			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: 001-14788

Blackstone Mortgage Trust, Inc.

(Exact name of Registrant as specified in its charter)


Maryland			94-6181186
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

345 Park Avenue, 24th Floor

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 655-0220

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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,

par value $0.01 per share

BXMT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 ☒

The number of the registrant’s shares of class A common stock, par value $0.01 per share, outstanding as of October 18, 2023 was 172,297,559.

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of September 3 0, 2023 and December 31, 2022	3
	Consolidated Statements of Operations for the Three and Nine Months Ended Septe mber 30, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022	5
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2023 and 2022, June 30, 2023 and 2022, and September 30, 2023 and 2022	6
	Consolidated Statements of Cash Flows for the Ni ne Months Ended September 30, 2023 and 2022	8
	Notes to Consolidated Financial Statements	10
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	48
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	76
ITEM 4.	CONTROLS AND PROCEDURES	78
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	79
ITEM 1A.	RISK FACTORS	79
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES	79
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	79
ITEM 4.	MINE SAFETY DISCLOSURES	79
ITEM 5.	OTHER INFORMATION	79
ITEM 6.	EXHIBITS	80
SIGNATURES		81

TABLE OF CONTENTS

Website Disclosure

We use our website (www.blackstonemortgagetrust.com) as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, Securities and Exchange Commission, or SEC, filings and public conference calls, and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone Mortgage Trust when you enroll your email address by visiting the “Contact Us and Email Alerts” section of our website at http://ir.blackstonemortgagetrust.com. The contents of our website and any alerts are not, however, a part of this report.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)


	September 30, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	421,495	$	291,340
Loans receivable	23,715,901		25,017,880
Current expected credit loss reserve	(463,423)		(326,137)
Loans receivable, net	23,252,478		24,691,743
Other assets	369,446		370,902
Total Assets	$	24,043,419	$	25,353,985
Liabilities and Equity
Secured debt, net	$	12,793,344	$	13,528,164
Securitized debt obligations, net	2,509,254		2,664,010
Asset-specific debt, net	930,757		942,503
Loan participations sold, net	275,184		224,232
Term loans, net	2,104,824		2,114,549
Senior secured notes, net	362,981		395,166
Convertible notes, net	295,527		514,257
Other liabilities	278,027		426,904
Total Liabilities	19,549,898		20,809,785
Commitments and contingencies	—		—
Equity
Class A common stock, $0.01 par value, 400,000,000 shares authorized, 172,296,051 and 171,695,985 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	1,723		1,717
Additional paid-in capital	5,499,491		5,475,804
Accumulated other comprehensive income	10,606		10,022
Accumulated deficit	(1,040,950)		(968,749)
Total Blackstone Mortgage Trust, Inc. stockholders’ equity	4,470,870		4,518,794
Non-controlling interests	22,651		25,406
Total Equity	4,493,521		4,544,200
Total Liabilities and Equity	$	24,043,419	$	25,353,985

Note: The consolidated balance sheets as of September 30, 2023 and December 31, 2022 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc. As of September 30, 2023 and December 31, 2022, assets of the consolidated VIEs totaled $3.0 billion and $3.2 billion, respectively and liabilities of the consolidated VIEs totaled $2.5 billion and $2.7 billion, respectively. Refer to Note 18 for additional discussion of the VIEs.

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Income from loans and other investments
Interest and related income	$	519,342	$	358,557	$	1,532,618	$	876,676
Less: Interest and related expenses	353,972		202,375		1,015,718		439,708
Income from loans and other investments, net	165,370		156,182		516,900		436,968
Other expenses
Management and incentive fees	28,882		25,911		92,747		76,462
General and administrative expenses	12,001		12,932		37,888		37,701
Total other expenses	40,883		38,843		130,635		114,163
Increase in current expected credit loss reserve	(96,900)		(12,248)		(134,530)		(22,694)
Gain on extinguishment of debt	4,541		—		4,541		—
Income before income taxes	32,128		105,091		256,276		300,111
Income tax provision	1,568		1,172		4,663		2,064
Net income	30,560		103,919		251,613		298,047
Net income attributable to non-controlling interests	(1,036)		(673)		(2,681)		(1,864)
Net income attributable to Blackstone Mortgage Trust, Inc.	$	29,524	$	103,246	$	248,932	$	296,183

Net income per share of common stock
Basic	$	0.17	$	0.60	$	1.44	$	1.74
Diluted	$	0.17	$	0.59	$	1.44	$	1.71
Weighted-average shares of common stock outstanding
Basic	172,648,118		170,971,874		172,620,799		170,303,470
Diluted	172,648,118		185,316,078		180,891,859		182,011,842

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	30,560	$	103,919	$	251,613	$	298,047
Other comprehensive (loss) income
Unrealized loss on foreign currency translation	(71,782)		(158,097)		(21,455)		(333,526)
Realized and unrealized gain on derivative financial instruments	71,648		154,849		22,039		329,048
Other comprehensive (loss) income	(134)		(3,248)		584		(4,478)
Comprehensive income	30,426		100,671		252,197		293,569
Comprehensive income attributable to non-controlling interests	(1,036)		(673)		(2,681)		(1,864)
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$	29,390	$	99,998	$	249,516	$	291,705

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)


	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid- In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance at December 31, 2022	$	1,717	$	5,475,804	$	10,022	$	(968,749)	$	4,518,794	$	25,406	$	4,544,200

Restricted class A common stock earned	6		7,486		—		—		7,492		—		7,492
Dividends reinvested	—		287		—		—		287		—		287
Deferred directors’ compensation	—		163		—		—		163		—		163
Net income	—		—		—		117,757		117,757		799		118,556
Other comprehensive loss	—		—		(2,194)		—		(2,194)		—		(2,194)
Dividends declared on common stock and deferred stock units, $0.62 per share	—		—		—		(107,072)		(107,072)		—		(107,072)

Distributions to non-controlling interests	—		—		—		—		—		(733)		(733)
Balance at March 31, 2023	$	1,723	$	5,483,740	$	7,828	$	(958,064)	$	4,535,227	$	25,472	$	4,560,699


Restricted class A common stock earned	—		7,492		—		—		7,492		—		7,492
Dividends reinvested	—		235		—		—		235		—		235
Deferred directors’ compensation	—		173		—		—		173		—		173
Net income	—		—		—		101,651		101,651		846		102,497
Other comprehensive income	—		—		2,912		—		2,912		—		2,912
Dividends declared on common stock and deferred stock units, $0.62 per share	—		—		—		(107,028)		(107,028)		—		(107,028)

Distributions to non-controlling interests	—		—		—		—		—		(791)		(791)
Balance at June 30, 2023	$	1,723	$	5,491,640	$	10,740	$	(963,441)	$	4,540,662	$	25,527	$	4,566,189


Restricted class A common stock earned	—		7,434		—		—		7,434		—		7,434
Dividends reinvested	—		245		—		—		245		—		245
Deferred directors’ compensation	—		172		—		—		172		—		172
Net income	—		—		—		29,524		29,524		1,036		30,560
Other comprehensive loss	—		—		(134)		—		(134)		—		(134)
Dividends declared on common stock and deferred stock units, $0.62 per share	—		—		—		(107,033)		(107,033)		—		(107,033)

Distributions to non-controlling interests	—		—		—		—		—		(3,912)		(3,912)
Balance at September 30, 2023	$	1,723	$	5,499,491	$	10,606	$	(1,040,950)	$	4,470,870	$	22,651	$	4,493,521

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)


	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid- In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance at December 31, 2021	$	1,682	$	5,373,029	$	8,308	$	(794,832)	$	4,588,187	$	30,524	$	4,618,711
Adoption of ASU 2020-06, See Note 2	—		(2,431)		—		1,954		(477)		—		(477)
Shares of class A common stock issued, net	16		52,138		—		—		52,154		—		52,154
Restricted class A common stock earned	5		8,472		—		—		8,477		—		8,477
Dividends reinvested	—		246		—		—		246		—		246
Deferred directors’ compensation	—		173		—		—		173		—		173
Net income	—		—		—		99,687		99,687		576		100,263
Other comprehensive income	—		—		292		—		292		—		292
Dividends declared on common stock and deferred stock units, $0.62 per share	—		—		—		(105,801)		(105,801)		—		(105,801)
Contributions from non-controlling interests	—		—		—		—		—		5,040		5,040
Distributions to non-controlling interests	—		—		—		—		—		(9,241)		(9,241)
Balance at March 31, 2022	$	1,703	$	5,431,627	$	8,600	$	(798,992)	$	4,642,938	$	26,899	$	4,669,837
Restricted class A common stock earned	—		8,245		—		—		8,245		—		8,245
Dividends reinvested	—		319		—		—		319		—		319
Deferred directors’ compensation	—		173		—		—		173		—		173
Net income	—		—		—		93,250		93,250		615		93,865
Other comprehensive loss	—		—		(1,522)		—		(1,522)		—		(1,522)
Dividends declared on common stock and deferred stock units, $0.62 per share	—		—		—		(105,812)		(105,812)		—		(105,812)

Distributions to non-controlling interests	—		—		—		—		—		(2,118)		(2,118)
Balance at June 30, 2022	$	1,703	$	5,440,364	$	7,078	$	(811,554)	$	4,637,591	$	25,396	$	4,662,987
Shares of class A common stock issued, net	6		18,490		$	—	$	—	18,496		$	—	$	18,496
Restricted class A common stock earned	—		8,046		—		—		8,046		—		8,046
Dividends reinvested	—		299		—		—		299		—		299
Deferred directors’ compensation	—		173		—		—		173		—		173
Net income	—		—		—		103,246		103,246		673		103,919
Other comprehensive loss	—		—		(3,248)		—		(3,248)		—		(3,248)
Dividends declared on common stock and deferred stock units, $0.62 per share	—		—		—		(106,197)		(106,197)		—		(106,197)

Distributions to non-controlling interests	—		—		—		—		—		(568)		(568)
Balance at September 30, 2022	$	1,709	$	5,467,372	$	3,830	$	(814,505)	$	4,658,406	$	25,501	$	4,683,907

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities
Net income	$	251,613	$	298,047
Adjustments to reconcile net income to net cash provided by operating activities

Non-cash compensation expense	22,926		25,286
Amortization of deferred fees on loans and debt securities	(60,333)		(59,285)
Amortization of deferred financing costs and premiums/discounts on debt obligations	42,620		35,455
Increase in current expected credit loss reserve	134,530		22,694
Gain on extinguishment of debt	(4,541)		—
Unrealized gain on assets denominated in foreign currencies, net	—		(31)
Unrealized loss (gain) on derivative financial instruments, net	3,195		(3,227)
Realized gain on derivative financial instruments, net	(23,800)		(8,418)
Changes in assets and liabilities, net
Other assets	(931)		(72,769)
Other liabilities	(16,226)		28,858
Net cash provided by operating activities	349,053		266,610
Cash flows from investing activities
Principal fundings of loans receivable	(1,068,853)		(6,210,880)
Principal collections, sales proceeds, and cost-recovery proceeds from loans receivable and debt securities	2,325,690		2,670,902
Origination and other fees received on loans receivable	11,046		67,950
Payments under derivative financial instruments	(224,367)		(7,385)
Receipts under derivative financial instruments	40,466		279,343
Collateral deposited under derivative agreements	(230,620)		(56,330)
Return of collateral deposited under derivative agreements	333,730		56,330
Net cash provided by (used in) investing activities	1,187,092		(3,200,070)

continued…

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2023		2022
Cash flows from financing activities
Borrowings under secured debt	$	1,490,503	$	4,857,829
Repayments under secured debt	(2,162,706)		(3,090,429)

Repayments of securitized debt obligations	(161,030)		—
Borrowings under asset-specific debt	223,357		654,578
Repayments under asset-specific debt	(239,037)		(78,659)
Proceeds from sale of loan participations	50,692		245,278

Net proceeds from term loan borrowings	—		492,500
Repayments of term loans	(16,497)		(11,554)

Repurchases of senior secured notes	(28,525)		—
Net proceeds from issuance of convertible notes	—		294,000
Repayment of convertible notes	(220,000)		(402,500)
Payment of deferred financing costs	(18,680)		(37,747)
Contributions from non-controlling interests	—		5,040
Distributions to non-controlling interests	(5,436)		(11,927)
Net proceeds from issuance of class A common stock	—		70,651
Dividends paid on class A common stock	(320,104)		(315,430)
Net cash (used in) provided by financing activities	(1,407,463)		2,671,630
Net increase (decrease) in cash and cash equivalents	128,682		(261,830)
Cash and cash equivalents at beginning of period	291,340		551,154
Effects of currency translation on cash and cash equivalents	1,473		(17,425)
Cash and cash equivalents at end of period	$	421,495	$	271,899
Supplemental disclosure of cash flows information
Payments of interest	$	(981,945)	$	(374,646)
Payments of income taxes	$	(5,228)	$	(730)
Supplemental disclosure of non-cash investing and financing activities
Dividends declared, not paid	$	(106,824)	$	(105,956)

Loan principal payments held by servicer, net	$	12,713	$	1,902

See accompanying notes to consolidated financial statements.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (Unaudited)

1. ORGANIZATION

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us” or “our” refer to Blackstone Mortgage Trust, Inc., a Maryland corporation, and its subsidiaries unless the context specifically requires otherwise.

Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators. These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and syndicating senior loan participations, depending on our view of the most prudent financing option available for each of our investments. We are not in the business of buying or trading securities, and the only securities we own are the retained interests from our securitization financing transactions, which we have not financed. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 24th Floor, New York, New York 10154.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. We believe we have made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing our consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission, or the SEC.

Basis of Presentation

The accompanying consolidated financial statements include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made in the presentation of the prior period statements of changes in equity related to restricted class A common stock and in the loans receivable disclosures related to risk ratings, property type, and geography in Note 3 to conform to the current period presentation.

Principles of Consolidation

We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have an interest with the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

In 2017, we entered into a joint venture, or our Multifamily Joint Venture, with Walker & Dunlop Inc. to originate, hold, and finance multifamily bridge loans. Pursuant to the terms of the agreements governing the joint venture, Walker &

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

Dunlop contributed 15% of the venture’s equity capital and we contributed 85%. We consolidate the Multifamily Joint Venture as we have a controlling financial interest. The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are owned by Walker & Dunlop. A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on Walker & Dunlop’s pro rata ownership of our Multifamily Joint Venture.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ materially from those estimates.

Revenue Recognition

Interest income from our loans receivable portfolio is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in our opinion, recovery of income and principal becomes doubtful. Interest received is then recorded as income or as a reduction in the amortized cost basis, based on the specific facts and circumstances, until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a reduction to interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents. As of both September 30, 2023 and December 31, 2022, we had no restricted cash on our consolidated balance sheets.

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $634.7 million and $459.6 million as of September 30, 2023 and December 31, 2022, respectively. This cash is maintained in segregated bank accounts, and these amounts are not included in the assets and liabilities presented in our consolidated balance sheets. Cash in these Servicing Accounts will be transferred by the respective third-party servicer to the borrower or us under the terms of the applicable loan agreement upon occurrence of certain future events. We do not generate any revenue or incur any expenses as a result of these Servicing Accounts.

Loans Receivable

We originate and purchase commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost.

Current Expected Credit Losses Reserve

The current expected credit loss, or CECL, reserve required under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 326 “Financial Instruments – Credit Losses,” or ASC 326, reflects our current estimate of potential credit losses related to our loans included in our consolidated balance sheets. Changes to the CECL reserve are recognized through net income on our consolidated statements of operations. While ASC 326 does not require any particular method for determining the CECL reserve, it does specify the reserve should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASC 326 requires that all financial instruments subject to the CECL model have some amount of loss reserve to reflect the GAAP principal underlying the CECL model that all loans and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

We estimate our CECL reserve primarily using the Weighted-Average Remaining Maturity, or WARM method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in FASB Staff Q&A Topic 326, No. 1. The WARM method requires us to reference historic loan loss data across a comparable data set and apply such loss rate to each of our loans over their expected remaining term, taking into consideration expected economic conditions over the relevant timeframe. We apply the WARM method for the majority of our loan portfolio, which consists of loans that share similar risk characteristics. In certain instances, for loans with unique risk characteristics, we may instead use a probability-weighted model that considers the likelihood of default and expected loss given default for each such individual loan.

Application of the WARM method to estimate a CECL reserve requires judgment, including (i) the appropriate historical loan loss reference data, (ii) the expected timing and amount of future loan fundings and repayments, and (iii) the current credit quality of our portfolio and our expectations of performance and market conditions over the relevant time period. To estimate the historic loan losses relevant to our portfolio, we have augmented our historical loan performance, with market loan loss data licensed from Trepp LLC. This database includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through August 31, 2023. Within this database, we focused our historical loss reference calculations on the most relevant subset of available CMBS data, which we determined based on loan metrics that are most comparable to our loan portfolio including asset type, geography, and origination loan-to-value, or LTV. We believe this CMBS data, which includes month-over-month loan and property performance, is the most relevant, available, and comparable dataset to our portfolio.

Our loans typically include commitments to fund incremental proceeds to our borrowers over the life of the loan. These future funding commitments are also subject to the CECL model. The CECL reserve related to future loan fundings is recorded as a component of other liabilities on our consolidated balance sheets. This CECL reserve is estimated using the same process outlined above for our outstanding loan balances, and changes in this component of the CECL reserve will similarly impact our consolidated net income. For both the funded and unfunded portions of our loans, we consider our internal risk rating of each loan as the primary credit quality indicator underlying our assessment.

The CECL reserve is measured on a collective basis wherever similar risk characteristics exist within a pool of similar assets. We have identified the following pools and measure the reserve for credit losses using the following methods:

•U.S. Loans: WARM method that incorporates a subset of historical loss data, expected weighted-average remaining maturity of our loan pool, and an economic view.

•Non-U.S. Loans: WARM method that incorporates a subset of historical loss data, expected weighted-average remaining maturity of our loan pool, and an economic view.

•Unique Loans: a probability of default and loss given default model, assessed on an individual basis.

•Impaired Loans: impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. Determining that a loan is impaired requires significant judgment from management and is based on several factors including (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan. If a loan is determined to be impaired, we record the impairment as a component of our CECL reserve by applying the practical expedient for collateral dependent loans. The CECL reserve is assessed on an individual basis for these loans by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors. Actual losses, if any, could ultimately differ materially from these estimates. We only expect to charge-off the impairment losses if and when such amounts are deemed nonrecoverable. This is generally at the time a loan is repaid or foreclosed. However, non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected.

Contractual Term and Unfunded Loan Commitments

Expected credit losses are estimated over the contractual term of each loan, adjusted for expected repayments. As part of our quarterly review of our loan portfolio, we assess the expected repayment date of each loan, which is used to determine the contractual term for purposes of computing our CECL reserve.

Additionally, the expected credit losses over the contractual period of our loans are subject to the obligation to extend credit through our unfunded loan commitments. The CECL reserve for unfunded loan commitments is adjusted quarterly, as we consider the expected timing of future funding obligations over the estimated life of the loan. The considerations in

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Notes to Consolidated Financial Statements (continued) (Unaudited)

estimating our CECL reserve for unfunded loan commitments are similar to those used for the related outstanding loans receivable.

Credit Quality Indicator

Our risk rating is our primary credit quality indicator in assessing our current expected credit loss reserve. We perform a quarterly risk review of our portfolio of loans, and assign each loan a risk rating based on a variety of factors, including, without limitation, origination LTV, 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. Based on a 5-point scale, our loans are rated “l” through “5,” from less risk to greater risk, relative to our loan portfolio in the aggregate, which ratings are defined as follows:

1 -Very Low Risk

2 -Low Risk

3 -Medium 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 very high risk of realizing a principal loss or has otherwise incurred a principal loss.

Estimation of Economic Conditions

In addition to the WARM method computations and probability-weighted models described above, our CECL reserve is also adjusted to reflect our estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing our loans. These estimations include unemployment rates, interest rates, expectations of inflation and/or recession, and other macroeconomic factors impacting the likelihood and magnitude of potential credit losses for our loans during their anticipated term. In addition to the CMBS data we have licensed from Trepp LLC, we have also licensed certain macroeconomic financial forecasts to inform our view of the potential future impact that broader economic conditions may have on our loan portfolio’s performance. We generally also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations. This process requires significant judgments about future events that, while based on the information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic condition impacting our portfolio could vary significantly from the estimates we made as of September 30, 2023.

Derivative Financial Instruments

We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value.

On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction.

On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in net income prospectively. Our net investment hedges are assessed using a method based on changes in spot exchange rates. Gains and losses, representing hedge components excluded from the assessment of effectiveness, are recognized in interest income on our consolidated statements of operations over the contractual term of our net investment hedges on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. All other changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of accumulated other comprehensive income (loss) on our consolidated financial statements. Deferred gains and losses are reclassified out of accumulated other comprehensive income (loss) and into net income in the same period or periods during which the hedged transaction affects earnings, and are presented in the

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Notes to Consolidated Financial Statements (continued) (Unaudited)

same line item as the earnings effect of the hedged item. For cash flow hedges, this is typically when the periodic swap settlements are made, while for net investment hedges, this occurs when the hedged item is sold or substantially liquidated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its fair value are included in net income concurrently.

Proceeds or payments from periodic settlements of derivative instruments are classified on our consolidated statement of cash flows in the same section as the underlying hedged item.

Secured Debt and Asset-Specific Debt

We record investments financed with secured debt or asset-specific debt as separate assets and the related borrowings under any secured debt or asset-specific debt are recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the secured debt or asset-specific debt are reported separately on our consolidated statements of operations.

Loan Participations Sold

In certain instances, we have executed a syndication of a non-recourse loan interest to a third-party. Depending on the particular structure of the syndication, the loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the loan interest will no longer be included in our consolidated financial statements. When these sales are not recognized under GAAP we reflect the transaction by recording a loan participation sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income. When the sales are recognized, our balance sheet only includes our remaining loan interest, and excludes the interest in the loan that we sold.

Term Loans

We record our term loans as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the term loans as additional non-cash interest expense.

Senior Secured Notes

We record our senior secured notes as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the senior secured notes as additional non-cash interest expense.

Convertible Notes

Convertible note proceeds, unless issued with a substantial premium or an embedded conversion feature, are classified as debt. Additionally, shares issuable under our convertible notes are included in diluted earnings per share in our consolidated financial statements, if the effect is dilutive, using the if-converted method, regardless of settlement intent. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the convertible notes as additional non-cash interest expense.

Deferred Financing Costs

The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations.

Underwriting Commissions and Offering Costs

Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

Fair Value of Financial Instruments

The “Fair Value Measurements and Disclosures” Topic of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

ASC 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

•Level 1: Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

•Level 2: Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.

•Level 3: Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third-parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2.

Certain of our other assets are reported at fair value, as of quarter-end, either (i) on a recurring basis or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets that are recorded at fair value are discussed further in Note 17. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-parties. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors.

As of September 30, 2023, we had an aggregate $322.6 million asset-specific CECL reserve related to ten of our loans receivable with an aggregate amortized cost basis of $1.4 billion, net of cost-recovery proceeds. The CECL reserve was recorded based on our estimation of the fair value of the loans' aggregate underlying collateral as of September 30, 2023. These loans receivable are therefore measured at fair value on a nonrecurring basis using significant unobservable inputs, and are classified as Level 3 assets in the fair value hierarchy. We estimated the fair value of these loans receivable by considering a variety of inputs including property performance, market data, and comparable sales, as applicable. The significant unobservable inputs used include the exit capitalization rate assumption used to forecast the future sale price of the underlying real estate collateral, which ranged from 5.25% to 7.80%, and the unlevered discount rate, which ranged from 7.28% to 10.00%.

We are also required by GAAP to disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value:

•Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

•Loans receivable, net: The fair values of these loans were estimated using a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, credit worthiness of

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Notes to Consolidated Financial Statements (continued) (Unaudited)

major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors.

•Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads.

•Secured debt, net: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced.

•Securitized debt obligations, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

•Asset-specific debt, net: The fair value of these instruments was estimated based on the rate at which a similar agreement would currently be priced.

•Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset.

•Term loans, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

•Senior secured notes, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price.

•Convertible notes, net: Each series of the convertible notes is actively traded and their fair values were obtained using quoted market prices.

Income Taxes

Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. If we were to fail to meet these requirements, we may be subject to federal, state, and local income tax on current and past income, and penalties. Refer to Note 15 for additional information.

Stock-Based Compensation

Our stock-based compensation consists of awards issued to our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors that vest over the life of the awards, as well as deferred stock units issued to certain members of our board of directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 16 for additional information.

Earnings per Share

Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on (i) the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by (ii) the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

Diluted earnings per share, or Diluted EPS, is determined using the if-converted method, and is based on (i) the net earnings, adjusted for interest expense incurred on our convertible notes during the relevant period, net of incentive fees, allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by (ii) the weighted-average number of shares of our class A common stock, including restricted class A common stock, deferred stock units, and shares of class A common stock issuable under our convertible notes. Refer to Note 13 for additional discussion of earnings per share.

Foreign Currency

In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated subsidiaries are recorded in other comprehensive income (loss).

Recent Accounting Pronouncements

In March 2022, the FASB issued Accounting Standards Update, or ASU, 2022-02 “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,” or ASU 2022-02. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings and requires disclosure of current-period gross write-offs by year of loan origination. Additionally, ASU 2022-02 updates the accounting for credit losses under ASC 326 and adds enhanced disclosures with respect to loan refinancings and restructurings in the form of principal forgiveness, interest rate concessions, other-than-insignificant payment delays, or term extensions when the borrower is experiencing financial difficulties. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. The amendments should be applied prospectively, however for the recognition and measurement of troubled debt restructurings, the entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. The adoption of ASU 2022-02 on January 1, 2023 did not have a material impact on our consolidated financial statements.

Reference Rate Reform

LIBOR and certain other floating rate benchmark indices have been the subject of national, international and regulatory guidance and proposals for reform or replacement. The Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee composed of large U.S. financial institutions, identified SOFR, an index calculated using short-term repurchase agreements backed by U.S. Treasury securities, as its preferred alternative rate for USD LIBOR. As of September 30, 2023, one-month term SOFR is utilized as the floating benchmark rate on all of our floating rate U.S. dollar loans and related financings. Additionally, market participants have continued to transition from GBP LIBOR to the Sterling Overnight Index Average, or SONIA, in line with guidance from the U.K. regulators. As of September 30, 2023, daily compounded SONIA is utilized as the floating benchmark rate for all of our floating rate British Pound Sterling loans and related financings. As of September 30, 2023, all of our floating rate loans and related financings have transitioned to the applicable replacement benchmark rate, or reference a benchmark rate that is not expected to be replaced.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

3. LOANS RECEIVABLE, NET

The following table details overall statistics for our loans receivable portfolio ($ in thousands):


	September 30, 2023			December 31, 2022
Number of loans	185			203
Principal balance	$	23,849,497		$	25,160,343
Net book value	$	23,252,478		$	24,691,743
Unfunded loan commitments(1)	$	2,671,851		$	3,806,153
Weighted-average cash coupon(2)	+ 3.43		%	+ 3.44		%
Weighted-average all-in yield(2)	+ 3.77		%	+ 3.84		%
Weighted-average maximum maturity (years)(3)	2.6			3.1

(1)Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.

(2)The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, USD LIBOR, SONIA, EURIBOR, and other indices, as applicable to each loan. As of September 30, 2023 99% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR, and the remaining 1% of our loans earned a fixed rate of interest. As of December 31, 2022, substantially all of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR and USD LIBOR. Floating rate exposure includes an interest rate swap with a notional amount of $229.9 million that effectively converts our fixed rate loan exposure to floating rate exposure. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method.

(3)Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. As of September 30, 2023, 18% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 82% were open to repayment by the borrower without penalty. As of December 31, 2022, 50% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 50% were open to repayment by the borrower without penalty.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table details the index rate floors for our loans receivable portfolio as of September 30, 2023 ($ in thousands):


	Loans Receivable Principal Balance
Index Rate Floors	USD		Non-USD(1)		Total
Fixed Rate	$	326,972	$	—	$	326,972
0.00% or no floor(2)	4,452,986		6,968,770		11,421,756
0.01% to 1.00% floor	7,651,125		803,299		8,454,424
1.01% to 1.50% floor	1,305,951		153,906		1,459,857
1.51% to 2.00% floor	694,857		234,344		929,201
2.01% or more floor	1,257,287		—		1,257,287
Total(3)	$	15,689,178	$	8,160,319	$	23,849,497

(1)Includes Euro, British Pound Sterling, Swedish Krona, Australian Dollar, Swiss Franc, and Danish Krone currencies.

(2)Includes an interest rate swap with a notional amount of $229.9 million that effectively converts our fixed rate loan exposure to floating rate exposure.

(3)As of September 30, 2023, the weighted-average index rate floor of our loans receivable principal balance was 0.42%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 0.78%.

Activity relating to our loans receivable portfolio was as follows ($ in thousands):


	Principal Balance		Deferred Fees / Other Items(1)		Net Book Value







Loans Receivable, as of December 31, 2022	$	25,160,343	$	(142,463)	$	25,017,880
Loan fundings	1,068,853		—		1,068,853
Loan repayments, sales, and cost-recovery proceeds	(2,280,034)		(40,733)		(2,320,767)


Unrealized (loss) gain on foreign currency translation	(99,665)		313		(99,352)
Deferred fees and other items	—		(11,046)		(11,046)
Amortization of fees and other items	—		60,333		60,333
Loans Receivable, as of September 30, 2023	$	23,849,497	$	(133,596)	$	23,715,901
CECL reserve					(463,423)
Loans Receivable, net, as of September 30, 2023					$	23,252,478

(1)Other items primarily consist of purchase and sale discounts or premiums, exit fees, deferred origination expenses, and cost-recovery proceeds.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):


September 30, 2023
Property Type	Number of Loans	Net Book Value		Total Loan Exposure(1)		Net Loan Exposure(2)		Net Loan Exposure Percentage of Portfolio
Office	57	$	9,206,553	$	10,016,113	$	8,006,364	36%
Multifamily	74	5,908,559		6,068,116		5,855,896		26
Hospitality	25	4,184,422		4,219,762		3,891,569		17
Industrial	12	2,121,085		2,133,209		2,124,686		10
Retail	7	842,100		859,681		830,697		4
Life Sciences / Studio	4	373,818		535,148		373,853		2
Other	6	1,079,364		1,080,847		1,051,144		5
Total loans receivable	185	$	23,715,901	$	24,912,876	$	22,134,209	100%
CECL reserve		(463,423)
Loans receivable, net		$	23,252,478

Geographic Location	Number of Loans	Net Book Value		Total Loan Exposure(1)		Net Loan Exposure(2)		Net Loan Exposure Percentage of Portfolio
United States
Sunbelt	67	$	5,811,609	$	5,971,930	$	5,644,980	25%
Northeast	32	5,404,008		5,446,368		4,421,379		20
West	31	3,080,257		4,074,953		2,977,926		13
Midwest	9	944,028		943,954		915,330		4
Northwest	6	360,566		364,148		362,089		2
Subtotal	145	15,600,468		16,801,353		14,321,704		64
International
United Kingdom	23	3,511,992		3,486,567		3,240,731		15
Australia	5	1,343,580		1,352,700		1,346,196		6
Ireland	3	1,132,912		1,137,526		1,130,878		5
Spain	3	1,079,272		1,082,148		1,044,808		5
Sweden	1	451,731		454,222		453,891		2