|
x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Maryland
|
|
27-0467113
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
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|
|
|
|
|
|
Page
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Assets:
|
|
|
|
||||
Cash
|
$
|
99,188
|
|
|
$
|
77,671
|
|
Commercial mortgage loans, net (includes $3,245,600 and $2,148,368 pledged as collateral under secured debt arrangements in 2018 and 2017, respectively)
|
3,723,550
|
|
|
2,653,826
|
|
||
Subordinate loans, net
|
1,104,496
|
|
|
1,025,932
|
|
||
Loan proceeds held by servicer
|
—
|
|
|
302,756
|
|
||
Other assets
|
31,894
|
|
|
28,420
|
|
||
Derivative assets, net
|
15,341
|
|
|
—
|
|
||
Total Assets
|
$
|
4,974,469
|
|
|
$
|
4,088,605
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Secured debt arrangements, net (net of deferred financing costs of $16,746 and $14,348 in 2018 and 2017, respectively)
|
$
|
1,996,871
|
|
|
$
|
1,330,847
|
|
Convertible senior notes, net
|
370,174
|
|
|
584,897
|
|
||
Derivative liabilities, net
|
—
|
|
|
5,644
|
|
||
Accounts payable, accrued expenses and other liabilities
|
79,538
|
|
|
70,906
|
|
||
Payable to related party
|
9,515
|
|
|
8,168
|
|
||
Total Liabilities
|
2,456,098
|
|
|
2,000,462
|
|
||
Commitments and Contingencies (see Note 15)
|
|
|
|
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
|
|
|
|
||||
Series B preferred stock, 6,770,393 shares issued and outstanding ($169,260 aggregate liquidation preference) in 2018 and 2017
|
68
|
|
|
68
|
|
||
Series C preferred stock, 6,900,000 shares issued and outstanding ($172,500 aggregate liquidation preference) in 2018 and 2017
|
69
|
|
|
69
|
|
||
Common stock, $0.01 par value, 450,000,000 shares authorized, 133,765,392 and 107,121,235 shares issued and outstanding in 2018 and 2017, respectively
|
1,338
|
|
|
1,071
|
|
||
Additional paid-in-capital
|
2,630,468
|
|
|
2,170,078
|
|
||
Accumulated deficit
|
(113,572
|
)
|
|
(83,143
|
)
|
||
Total Stockholders’ Equity
|
2,518,371
|
|
|
2,088,143
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
4,974,469
|
|
|
$
|
4,088,605
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net interest income:
|
|
|
|
|
|
|
|
||||||||
Interest income from commercial mortgage loans
|
$
|
71,179
|
|
|
$
|
41,203
|
|
|
$
|
188,434
|
|
|
$
|
112,690
|
|
Interest income from subordinate loans
|
37,308
|
|
|
47,268
|
|
|
105,236
|
|
|
121,298
|
|
||||
Interest income from securities
|
—
|
|
|
2,625
|
|
|
—
|
|
|
13,379
|
|
||||
Interest expense
|
(31,007
|
)
|
|
(19,855
|
)
|
|
(82,184
|
)
|
|
(56,089
|
)
|
||||
Net interest income
|
77,480
|
|
|
71,241
|
|
|
211,486
|
|
|
191,278
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses (includes equity-based compensation of $4,048 and $11,404 in 2018 and $2,635 and $9,887 of equity-based compensation in 2017, respectively)
|
(5,843
|
)
|
|
(4,629
|
)
|
|
(16,493
|
)
|
|
(15,587
|
)
|
||||
Management fees to related party
|
(9,515
|
)
|
|
(8,309
|
)
|
|
(26,620
|
)
|
|
(23,484
|
)
|
||||
Total operating expenses
|
(15,358
|
)
|
|
(12,938
|
)
|
|
(43,113
|
)
|
|
(39,071
|
)
|
||||
Loss from unconsolidated joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,847
|
)
|
||||
Other income
|
427
|
|
|
359
|
|
|
973
|
|
|
710
|
|
||||
Provision for loan losses and impairments
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
(5,000
|
)
|
||||
Realized loss on sale of assets
|
—
|
|
|
(4,076
|
)
|
|
—
|
|
|
(5,118
|
)
|
||||
Unrealized gain on securities
|
—
|
|
|
13,488
|
|
|
—
|
|
|
11,830
|
|
||||
Foreign currency gain (loss)
|
(4,050
|
)
|
|
7,763
|
|
|
(23,574
|
)
|
|
17,848
|
|
||||
Loss on early extinguishment of debt
|
(2,573
|
)
|
|
—
|
|
|
(2,573
|
)
|
|
—
|
|
||||
Gain (loss) on derivative instruments (includes unrealized gains (losses) of $5,045 and $20,986 in 2018 and $(7,302) and $(17,626) in 2017, respectively)
|
6,291
|
|
|
(7,481
|
)
|
|
28,797
|
|
|
(17,916
|
)
|
||||
Net income
|
$
|
62,217
|
|
|
$
|
68,356
|
|
|
$
|
166,996
|
|
|
$
|
151,714
|
|
Preferred dividends
|
(6,836
|
)
|
|
(11,148
|
)
|
|
(20,505
|
)
|
|
(29,768
|
)
|
||||
Net income available to common stockholders
|
$
|
55,381
|
|
|
$
|
57,208
|
|
|
$
|
146,491
|
|
|
$
|
121,946
|
|
Net income per share of common stock:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.42
|
|
|
$
|
0.54
|
|
|
$
|
1.19
|
|
|
$
|
1.23
|
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.54
|
|
|
$
|
1.14
|
|
|
$
|
1.23
|
|
Basic weighted average shares of common stock outstanding
|
129,188,343
|
|
|
105,446,704
|
|
|
120,876,240
|
|
|
97,546,437
|
|
||||
Diluted weighted average shares of common stock outstanding
|
153,918,435
|
|
|
106,812,721
|
|
|
150,424,889
|
|
|
98,919,689
|
|
||||
Dividend declared per share of common stock
|
$
|
0.46
|
|
|
$
|
0.46
|
|
|
$
|
1.38
|
|
|
$
|
1.38
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income available to common stockholders
|
$
|
55,381
|
|
|
$
|
57,208
|
|
|
$
|
146,491
|
|
|
$
|
121,946
|
|
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
3,811
|
|
||||
Comprehensive income
|
$
|
55,381
|
|
|
$
|
57,208
|
|
|
$
|
146,491
|
|
|
$
|
125,757
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In-Capital
|
|
Accumulated
Deficit
|
|
Total
|
||||||||||||||||
|
Shares
|
|
Par
|
|
Shares
|
|
Par
|
|
|||||||||||||||||
Balance at January 1, 2018
|
13,670,393
|
|
|
$
|
137
|
|
|
107,121,235
|
|
|
$
|
1,071
|
|
|
$
|
2,170,078
|
|
|
$
|
(83,143
|
)
|
|
$
|
2,088,143
|
|
Capital increase related to Equity Incentive Plan
|
—
|
|
|
—
|
|
|
374,580
|
|
|
5
|
|
|
6,672
|
|
|
—
|
|
|
6,677
|
|
|||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
15,525,000
|
|
|
155
|
|
|
275,724
|
|
|
—
|
|
|
275,879
|
|
|||||
Exchange of convertible senior notes for common stock
|
—
|
|
|
—
|
|
|
10,744,577
|
|
|
107
|
|
|
178,459
|
|
|
—
|
|
|
178,566
|
|
|||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(465
|
)
|
|
—
|
|
|
(465
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166,996
|
|
|
166,996
|
|
|||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,505
|
)
|
|
(20,505
|
)
|
|||||
Dividends declared on common stock - $0.46 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(176,920
|
)
|
|
(176,920
|
)
|
|||||
Balance at September 30, 2018
|
13,670,393
|
|
|
$
|
137
|
|
|
133,765,392
|
|
|
$
|
1,338
|
|
|
$
|
2,630,468
|
|
|
$
|
(113,572
|
)
|
|
$
|
2,518,371
|
|
|
For the nine months ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows (used in) provided by operating activities:
|
|
|
|
||||
Net income
|
$
|
166,996
|
|
|
$
|
151,714
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization of discount/premium and PIK
|
(46,103
|
)
|
|
(15,491
|
)
|
||
Amortization of deferred financing costs
|
8,204
|
|
|
4,464
|
|
||
Equity-based compensation
|
6,672
|
|
|
7,551
|
|
||
Unrealized gain on securities
|
—
|
|
|
(11,830
|
)
|
||
Provision for loan losses and impairment
|
5,000
|
|
|
5,000
|
|
||
Loss from unconsolidated joint venture
|
—
|
|
|
2,259
|
|
||
Foreign currency (gain) loss
|
22,162
|
|
|
(16,940
|
)
|
||
Unrealized (gain) loss on derivative instruments
|
(20,986
|
)
|
|
17,564
|
|
||
Loss on early extinguishment of debt
|
2,573
|
|
|
—
|
|
||
Realized loss on derivative instruments
|
—
|
|
|
289
|
|
||
Realized loss on sale of assets
|
—
|
|
|
5,118
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Proceeds received from PIK
|
75,652
|
|
|
—
|
|
||
Other assets
|
(8,476
|
)
|
|
(28,893
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
8,087
|
|
|
(8,623
|
)
|
||
Payable to related party
|
1,347
|
|
|
1,295
|
|
||
Net cash (used in) provided by operating activities
|
221,128
|
|
|
113,477
|
|
||
Cash flows used in investing activities:
|
|
|
|
||||
New funding of commercial mortgage loans
|
(1,382,440
|
)
|
|
(505,323
|
)
|
||
Add-on funding of commercial mortgage loans
|
(90,201
|
)
|
|
(76,244
|
)
|
||
New funding of subordinate loans
|
(207,683
|
)
|
|
(365,500
|
)
|
||
Add-on funding of subordinate loans
|
(84,852
|
)
|
|
(110,003
|
)
|
||
Proceeds and payments received on commercial mortgage loans
|
356,865
|
|
|
17,062
|
|
||
Proceeds and payments received on subordinate loans
|
463,524
|
|
|
221,478
|
|
||
Funding of derivative instruments
|
—
|
|
|
(201
|
)
|
||
Origination and exit fees received on commercial mortgage and subordinate loans
|
32,473
|
|
|
13,047
|
|
||
Funding of unconsolidated joint venture
|
—
|
|
|
(726
|
)
|
||
Funding of other assets
|
—
|
|
|
(1,379
|
)
|
||
(Increase) decrease in collateral held related to derivative contracts
|
4,930
|
|
|
(14,262
|
)
|
||
Payments and proceeds received on securities
|
—
|
|
|
288,781
|
|
||
Proceeds from sale of investments in unconsolidated joint venture
|
—
|
|
|
24,498
|
|
||
Net cash (used in) provided by investing activities
|
(907,384
|
)
|
|
(508,772
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
275,879
|
|
|
249,021
|
|
||
Redemption of preferred stock
|
—
|
|
|
(86,250
|
)
|
||
Payment of offering costs
|
(199
|
)
|
|
(359
|
)
|
||
Proceeds from secured debt arrangements
|
1,623,186
|
|
|
866,548
|
|
||
Repayments of secured debt arrangements
|
(941,662
|
)
|
|
(727,691
|
)
|
||
Proceeds from issuance of convertible senior notes
|
—
|
|
|
227,700
|
|
||
Exchanges and conversions of convertible senior notes
|
(40,461
|
)
|
|
—
|
|
||
Repayments of participations sold
|
—
|
|
|
(85,081
|
)
|
||
Payment of deferred financing costs
|
(11,545
|
)
|
|
(8,585
|
)
|
||
Dividends on common stock
|
(176,920
|
)
|
|
(136,404
|
)
|
||
Dividends on preferred stock
|
(20,505
|
)
|
|
(26,752
|
)
|
||
Net cash (used in) provided by financing activities
|
707,773
|
|
|
272,147
|
|
||
Net increase (decrease) in cash and cash equivalents
|
21,517
|
|
|
(123,148
|
)
|
||
Cash and restricted cash, beginning of period
|
77,671
|
|
|
263,453
|
|
||
Cash and restricted cash, end of period
|
$
|
99,188
|
|
|
$
|
140,305
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
77,219
|
|
|
$
|
44,303
|
|
Supplemental disclosure of non-cash financing activities:
|
|
|
|
||||
Exchange of convertible senior notes for common stock
|
$
|
178,567
|
|
|
$
|
—
|
|
Dividend declared, not yet paid
|
$
|
68,536
|
|
|
$
|
55,916
|
|
Offering costs payable
|
$
|
265
|
|
|
$
|
41
|
|
|
Balance at September 30, 2018
|
|
Balance at September 30, 2017
|
||||
Cash
|
$
|
99,188
|
|
|
$
|
140,229
|
|
Restricted cash
|
—
|
|
|
76
|
|
||
Total cash and restricted cash shown in the condensed consolidated statement of cash flows
|
$
|
99,188
|
|
|
$
|
140,305
|
|
|
Fair Value as of September 30, 2018
|
|
Fair Value as of December 31, 2017
|
||||||||||||||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||||||||||
Derivative assets (liabilities), net
|
$
|
—
|
|
|
$
|
15,341
|
|
|
$
|
—
|
|
|
$
|
15,341
|
|
|
$
|
—
|
|
|
$
|
(5,644
|
)
|
|
$
|
—
|
|
|
$
|
(5,644
|
)
|
Loan Type
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Commercial mortgage loans, net
|
|
$
|
3,723,550
|
|
|
$
|
2,653,826
|
|
Subordinate loans, net
|
|
1,104,496
|
|
|
1,025,932
|
|
||
Total loans, net
|
|
$
|
4,828,046
|
|
|
$
|
3,679,758
|
|
|
|
Principal Balance
|
|
Deferred Fees/Other Items
(1)
|
|
Provision for Loan Loss
(2)
|
|
Carrying Value
|
||||||||
December 31, 2017
|
|
$
|
3,706,169
|
|
|
$
|
(9,430
|
)
|
|
$
|
(16,981
|
)
|
|
$
|
3,679,758
|
|
New loan fundings
|
|
1,590,123
|
|
|
—
|
|
|
—
|
|
|
1,590,123
|
|
||||
Add-on loan fundings
(3)
|
|
175,053
|
|
|
—
|
|
|
—
|
|
|
175,053
|
|
||||
Loan repayments
|
|
(601,041
|
)
|
|
—
|
|
|
—
|
|
|
(601,041
|
)
|
Unrealized gain (loss) on foreign currency translation
|
|
(35,412
|
)
|
|
(21
|
)
|
|
—
|
|
|
(35,433
|
)
|
||||
Provision for loan loss
(2)
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
(5,000
|
)
|
||||
Deferred fees and other items
(1)
|
|
—
|
|
|
(24,596
|
)
|
|
—
|
|
|
(24,596
|
)
|
||||
PIK interest, amortization of fees and other items
(1)
|
|
29,944
|
|
|
19,238
|
|
|
—
|
|
|
49,182
|
|
||||
September 30, 2018
|
|
$
|
4,864,836
|
|
|
$
|
(14,809
|
)
|
|
$
|
(21,981
|
)
|
|
$
|
4,828,046
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Number of loans
|
|
68
|
|
|
59
|
|
||
Principal balance
|
|
$
|
4,864,836
|
|
|
$
|
3,706,169
|
|
Carrying value
|
|
$
|
4,828,046
|
|
|
$
|
3,679,758
|
|
Unfunded loan commitments
(1)
|
|
$
|
884,178
|
|
|
$
|
435,627
|
|
Weighted-average cash coupon
(2)
|
|
8.2
|
%
|
|
8.4
|
%
|
(1)
|
Unfunded loan commitments are primarily funded to finance property improvements or lease-related expenditures by the borrowers. 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.
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||
Property Type
|
|
Carrying
Value |
|
% of
Portfolio |
|
Carrying
Value |
|
% of
Portfolio |
||||||
Hotel
|
|
$
|
1,229,460
|
|
|
25.5
|
%
|
|
$
|
645,056
|
|
|
17.6
|
%
|
Residential-for-sale: inventory
(1)
|
|
602,826
|
|
|
12.5
|
%
|
|
92,438
|
|
|
2.5
|
%
|
||
Residential-for-sale: construction
(1)
|
|
385,303
|
|
|
8.0
|
%
|
|
349,739
|
|
|
9.5
|
%
|
||
Urban Predevelopment
|
|
677,440
|
|
|
14.0
|
%
|
|
654,736
|
|
|
17.8
|
%
|
||
Office
|
|
520,926
|
|
|
10.8
|
%
|
|
513,830
|
|
|
14.0
|
%
|
||
Multifamily
|
|
450,017
|
|
|
9.3
|
%
|
|
465,057
|
|
|
12.6
|
%
|
||
Mixed Use
|
|
320,984
|
|
|
6.6
|
%
|
|
354,640
|
|
|
9.6
|
%
|
||
Healthcare
|
|
255,588
|
|
|
5.3
|
%
|
|
173,870
|
|
|
4.7
|
%
|
||
Retail Center
|
|
202,031
|
|
|
4.2
|
%
|
|
198,913
|
|
|
5.4
|
%
|
||
Other
|
|
151,471
|
|
|
3.1
|
%
|
|
154,141
|
|
|
4.2
|
%
|
||
Industrial
|
|
32,000
|
|
|
0.7
|
%
|
|
77,338
|
|
|
2.1
|
%
|
||
Total
|
|
$
|
4,828,046
|
|
|
100.0
|
%
|
|
$
|
3,679,758
|
|
|
100.0
|
%
|
(1)
|
To conform to the current period’s presentation, loans with a combined carrying value of
$442.2 million
classified as residential-for-sale as of December 31, 2017 were broken out into
$349.8 million
of residential-for-sale: construction and
$92.4 million
of residential-for-sale: inventory.
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||
Geographic Location
|
|
Carrying
Value |
|
% of
Portfolio |
|
Carrying
Value |
|
% of
Portfolio |
||||||
Manhattan, NY
|
|
$
|
1,365,211
|
|
|
28.3
|
%
|
|
$
|
1,173,833
|
|
|
31.9
|
%
|
Brooklyn, NY
|
|
332,372
|
|
|
6.9
|
%
|
|
357,611
|
|
|
9.7
|
%
|
||
Northeast
|
|
37,410
|
|
|
0.8
|
%
|
|
100,536
|
|
|
2.7
|
%
|
||
Midwest
|
|
800,196
|
|
|
16.6
|
%
|
|
683,380
|
|
|
18.6
|
%
|
||
Southeast
|
|
608,925
|
|
|
12.6
|
%
|
|
531,582
|
|
|
14.4
|
%
|
||
West
|
|
522,818
|
|
|
10.8
|
%
|
|
227,024
|
|
|
6.2
|
%
|
||
Mid Atlantic
|
|
213,881
|
|
|
4.4
|
%
|
|
191,976
|
|
|
5.2
|
%
|
||
Southwest
|
|
115,683
|
|
|
2.4
|
%
|
|
33,615
|
|
|
0.9
|
%
|
||
United Kingdom
|
|
706,342
|
|
|
14.6
|
%
|
|
303,488
|
|
|
8.3
|
%
|
||
Other International
|
|
125,208
|
|
|
2.6
|
%
|
|
76,713
|
|
|
2.1
|
%
|
||
Total
|
|
$
|
4,828,046
|
|
|
100.0
|
%
|
|
$
|
3,679,758
|
|
|
100.0
|
%
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||
Risk Rating
|
|
Number of Loans
|
|
Carrying Value
|
|
% of Loan Portfolio
|
|
Number of Loans
|
|
Carrying Value
|
|
% of Loan Portfolio
|
||||||
1
|
|
—
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
|
$
|
—
|
|
|
—
|
%
|
2
|
|
5
|
|
340,237
|
|
|
7
|
%
|
|
5
|
|
399,326
|
|
|
10
|
%
|
||
3
|
|
60
|
|
4,254,383
|
|
|
88
|
%
|
|
51
|
|
3,034,358
|
|
|
83
|
%
|
||
4
|
|
1
|
|
171,127
|
|
|
4
|
%
|
|
1
|
|
168,208
|
|
|
5
|
%
|
||
5
|
|
2
|
|
62,299
|
|
|
1
|
%
|
|
2
|
|
77,866
|
|
|
2
|
%
|
||
|
|
68
|
|
$
|
4,828,046
|
|
|
100
|
%
|
|
59
|
|
$
|
3,679,758
|
|
|
100
|
%
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Interest receivable
|
$
|
31,255
|
|
|
$
|
23,101
|
|
Collateral deposited under derivative agreements
|
—
|
|
|
4,930
|
|
||
Other
|
639
|
|
|
389
|
|
||
Total
|
$
|
31,894
|
|
|
$
|
28,420
|
|
|
September 30, 2018
(2)
|
|
December 31, 2017
|
||||||||||||||||||
|
Maximum Amount of Borrowings
|
|
Borrowings Outstanding
|
|
Maturity
(1)
|
|
Maximum Amount of Borrowings
|
|
Borrowings Outstanding
|
|
Maturity
(1)
|
|
Weighted
Average Rate |
||||||||
JPMorgan Facility (USD)
|
$
|
1,332,450
|
|
|
$
|
950,635
|
|
|
June 2021
|
|
$
|
1,393,000
|
|
|
$
|
944,529
|
|
|
March 2020
|
|
USD L + 2.30%
|
JPMorgan Facility (GBP)
|
49,550
|
|
|
49,550
|
|
|
June 2021
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
N/A
|
||||
DB Repurchase Facility (USD)
|
900,905
|
|
|
389,525
|
|
|
March 2021
|
|
472,090
|
|
|
225,367
|
|
|
March 2020
|
|
USD L + 2.56%
|
||||
DB Repurchase Facility (GBP)
|
154,095
|
|
|
154,095
|
|
|
March 2021
|
|
93,919
|
|
|
93,919
|
|
|
March 2020
|
|
GBP L + 2.60%
|
||||
Goldman Facility
|
300,000
|
|
|
205,982
|
|
|
November 2020
|
|
331,130
|
|
|
81,380
|
|
|
November 2020
|
|
USD L + 2.73%
|
||||
CS Facility (USD)
|
69,941
|
|
|
69,941
|
|
|
March 2019
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
N/A
|
||||
CS Facility (GBP)
|
143,993
|
|
|
143,993
|
|
|
March 2019
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
N/A
|
||||
HSBC Facility (GBP)
|
49,896
|
|
|
49,896
|
|
|
September 2019
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
N/A
|
||||
Sub-total
|
3,000,830
|
|
|
2,013,617
|
|
|
|
|
2,290,139
|
|
|
1,345,195
|
|
|
|
|
|
||||
less: deferred financing costs
|
N/A
|
|
|
(16,746
|
)
|
|
|
|
N/A
|
|
|
(14,348
|
)
|
|
|
|
N/A
|
||||
Total / Weighted Average
|
$
|
3,000,830
|
|
|
$
|
1,996,871
|
|
|
$2,290,139
|
|
$1,330,847
|
|
USD L + 2.37% /
|
||||||||
|
GBP L + 2.60%
|
|
Less than
1 year (1) |
|
1 to 3
years (1) |
|
3 to 5
years |
|
More than
5 years |
|
Total
|
||||||||||
JPMorgan Facility
|
$
|
334,884
|
|
|
$
|
665,301
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000,185
|
|
DB Repurchase Facility
|
177,164
|
|
|
366,456
|
|
|
—
|
|
|
—
|
|
|
543,620
|
|
|||||
Goldman Facility
|
—
|
|
|
205,982
|
|
|
—
|
|
|
—
|
|
|
205,982
|
|
|||||
CS Facility - USD
|
69,941
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,941
|
|
|||||
CS Facility - GBP
|
143,993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143,993
|
|
|||||
HSBC Facility
|
49,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,896
|
|
|||||
Total
|
$
|
775,878
|
|
|
$
|
1,237,739
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,013,617
|
|
|
|
|
|
|
For the nine months ended September 30, 2018
|
||||||||||
|
Balance at September 30, 2018
|
|
Amortized Cost of collateral at September 30, 2018
|
|
Maximum Month-End
Balance |
|
Average Month-End
Balance |
||||||||
JPMorgan Facility
|
$
|
1,000,185
|
|
|
$
|
1,621,477
|
|
|
$
|
1,000,854
|
|
|
$
|
910,138
|
|
DB Repurchase Facility
|
543,620
|
|
|
955,460
|
|
|
707,405
|
|
|
511,259
|
|
||||
Goldman Facility
|
205,982
|
|
|
278,490
|
|
|
236,764
|
|
|
159,010
|
|
||||
CS Facility - USD
|
69,941
|
|
|
99,013
|
|
|
69,941
|
|
|
69,941
|
|
||||
CS Facility - GBP
|
143,993
|
|
|
220,397
|
|
|
145,937
|
|
|
144,540
|
|
||||
HSBC Facility
|
49,896
|
|
|
70,763
|
|
|
49,896
|
|
|
49,896
|
|
||||
Total
|
$
|
2,013,617
|
|
|
$
|
3,245,600
|
|
|
|
|
|
|
Principal Amount
|
Coupon Rate
|
Effective Rate
(1)
|
Conversion Rate
(2)
|
Maturity Date
|
Remaining Period of Amortization
|
|||||
2019 Notes
|
$
|
35,932
|
|
5.50
|
%
|
6.50
|
%
|
58.0421
|
|
3/15/2019
|
0.45 years
|
2022 Notes
|
345,000
|
|
4.75
|
%
|
5.61
|
%
|
50.2260
|
|
8/23/2022
|
3.90 years
|
|
Total
|
$
|
380,932
|
|
|
|
|
|
|
(1)
|
Effective rate includes the effect of the adjustment for the conversion option (See endnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.
|
(2)
|
We have the option to settle any conversions in cash, shares of common stock or a combination thereof. The conversion rate represents the number of shares of common stock issuable per
one thousand
principal amount of the Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.
|
Type of Derivative
|
September 30, 2018
|
||||||
|
Number of Contracts
|
|
Aggregate Notional Amount (in thousands)
|
|
Notional Currency
|
|
Maturity
|
Fx Contracts - GBP
|
35
|
|
274,309
|
|
GBP
|
|
October 2018 - November 2020
|
Fx Contracts - EUR
|
1
|
|
42,247
|
|
EUR
|
|
October 2018
|
Type of Derivative
|
December 31, 2017
|
||||||
|
Number of Contracts
|
|
Aggregate Notional Amount (in thousands)
|
|
Notional Currency
|
|
Maturity
|
Fx Contracts - GBP
|
24
|
|
177,077
|
|
GBP
|
|
January 2018- November 2020
|
(1)
|
With a notional amount of
$36.2
million and
$41.5
million at
September 30, 2018
, and
2017
, respectively.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross
Amount of Recognized Assets |
|
Gross
Amounts Offset in the Condensed Consolidated Balance Sheet |
|
Net Amounts
of Assets Presented in the Condensed Consolidated Balance Sheet |
|
Gross
Amount of Recognized Liabilities |
|
Gross
Amounts Offset in the Condensed Consolidated Balance Sheet |
|
Net Amounts of Assets (Liabilities) Presented in the Condensed Consolidated Balance Sheet
|
||||||||||||
Interest rate caps
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Forward currency contracts
|
15,708
|
|
|
(368
|
)
|
|
15,340
|
|
|
(5,645
|
)
|
|
—
|
|
|
(5,645
|
)
|
||||||
Total derivative instruments
|
$
|
15,709
|
|
|
$
|
(368
|
)
|
|
$
|
15,341
|
|
|
$
|
(5,645
|
)
|
|
$
|
1
|
|
|
$
|
(5,644
|
)
|
|
September 30, 2018
|
|
|
December 31, 2017
|
|
||
Accrued dividends payable
|
$
|
68,544
|
|
|
$
|
56,576
|
|
Accrued interest payable
|
6,540
|
|
|
12,796
|
|
||
Accounts payable and other liabilities
|
4,454
|
|
|
1,534
|
|
||
Total
|
$
|
79,538
|
|
|
$
|
70,906
|
|
|
Type
|
|
Restricted Stock
|
|
RSUs
|
|
Grant Date Fair Value ($ in thousands)
|
|||
Outstanding at December 31, 2017
|
|
105,561
|
|
|
1,632,746
|
|
|
|
||
|
Grant
|
|
28,070
|
|
|
7,100
|
|
|
634
|
|
|
Vested
|
|
(24,840
|
)
|
|
(807
|
)
|
|
N/A
|
|
|
Forfeiture
|
|
—
|
|
|
(44,739
|
)
|
|
N/A
|
|
Outstanding at September 30, 2018
|
|
108,791
|
|
|
1,594,300
|
|
|
|
Vesting Year
|
Restricted Stock
|
|
RSU
|
|
Total Awards
|
|||
2018
|
43,094
|
|
|
738,581
|
|
|
781,675
|
|
2019
|
60,803
|
|
|
557,394
|
|
|
618,197
|
|
2020
|
4,894
|
|
|
295,957
|
|
|
300,851
|
|
2021
|
—
|
|
|
2,368
|
|
|
2,368
|
|
Total
|
108,791
|
|
|
1,594,300
|
|
|
1,703,091
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Value |
|
Estimated
Fair Value |
|
Carrying
Value |
|
Estimated
Fair Value |
||||||||
Cash
|
$
|
99,188
|
|
|
$
|
99,188
|
|
|
$
|
77,671
|
|
|
$
|
77,671
|
|
Commercial first mortgage loans, net
|
3,723,550
|
|
|
3,720,475
|
|
|
2,653,826
|
|
|
2,657,262
|
|
||||
Subordinate loans, net
|
1,104,496
|
|
|
1,098,632
|
|
|
1,025,932
|
|
|
1,029,390
|
|
||||
Secured debt arrangements
|
(2,013,617
|
)
|
|
(2,013,617
|
)
|
|
(1,345,195
|
)
|
|
(1,345,195
|
)
|
||||
2019 Notes
|
(35,477
|
)
|
|
(39,660
|
)
|
|
(251,935
|
)
|
|
(267,506
|
)
|
||||
2022 Notes
|
(334,697
|
)
|
|
(345,863
|
)
|
|
(332,962
|
)
|
|
(350,175
|
)
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Basic Earnings
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
62,217
|
|
|
$
|
68,356
|
|
|
$
|
166,996
|
|
|
$
|
151,714
|
|
Less: Preferred dividends
|
(6,836
|
)
|
|
(11,148
|
)
|
|
(20,505
|
)
|
|
(29,768
|
)
|
||||
Net income available to common stockholders
|
$
|
55,381
|
|
|
$
|
57,208
|
|
|
$
|
146,491
|
|
|
$
|
121,946
|
|
Less: Dividends on participating securities
|
(733
|
)
|
|
(620
|
)
|
|
(2,215
|
)
|
|
(1,884
|
)
|
||||
Basic Earnings
|
$
|
54,648
|
|
|
$
|
56,588
|
|
|
$
|
144,276
|
|
|
$
|
120,062
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
62,217
|
|
|
$
|
68,356
|
|
|
$
|
166,996
|
|
|
$
|
151,714
|
|
Less: Preferred dividends
|
(6,836
|
)
|
|
(11,148
|
)
|
|
(20,505
|
)
|
|
(29,768
|
)
|
||||
Net income available to common stockholders
|
$
|
55,381
|
|
|
$
|
57,208
|
|
|
$
|
146,491
|
|
|
$
|
121,946
|
|
Add: Interest expense on Notes
|
6,746
|
|
|
N/A
|
|
|
25,607
|
|
|
N/A
|
|
||||
Diluted Earnings
|
$
|
62,127
|
|
|
$
|
57,208
|
|
|
$
|
172,098
|
|
|
$
|
121,946
|
|
|
|
|
|
|
|
|
|
||||||||
Number of Shares:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares of common stock outstanding
|
129,188,343
|
|
|
105,446,704
|
|
|
120,876,240
|
|
|
97,546,437
|
|
||||
Diluted weighted average shares of common stock outstanding
|
153,918,435
|
|
|
106,812,721
|
|
|
150,424,889
|
|
|
98,919,689
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings Per Share Attributable to common stockholders
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
0.42
|
|
|
$
|
0.54
|
|
|
$
|
1.19
|
|
|
$
|
1.23
|
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.54
|
|
|
$
|
1.14
|
|
|
$
|
1.23
|
|
Description
|
|
Amortized
Cost |
|
Weighted Average Coupon
(1)
|
|
Weighted Average All-in Yield
(1)(2)
|
|
Secured Debt
(3)
|
|
Cost of Funds
|
|
Equity at
cost (4) |
|||||||||
Commercial mortgage loans, net
|
|
$
|
3,723,550
|
|
|
7.0
|
%
|
|
7.8
|
%
|
|
$
|
2,013,617
|
|
|
4.2
|
%
|
|
$
|
1,709,933
|
|
Subordinate loans, net
|
|
1,104,496
|
|
|
12.2
|
%
|
|
13.6
|
%
|
|
—
|
|
|
—
|
|
|
1,104,496
|
|
|||
Total/Weighted Average
|
|
$
|
4,828,046
|
|
|
8.2
|
%
|
|
9.2
|
%
|
|
$
|
2,013,617
|
|
|
4.2
|
%
|
|
$
|
2,814,429
|
|
(1)
|
Weighted-Average Coupon and Weighted Average All-in-Yield are based on the applicable benchmark rates as of September 30, 2018 on the floating rate loans.
|
(2)
|
Weighted-Average All-in-Yield includes the amortization of deferred origination fees, loan origination costs and accrual of both extension and exit fees.
|
(3)
|
Gross of deferred financing costs of $16.7 million.
|
(4)
|
Represents loan portfolio at amortized cost less secured debt outstanding.
|
Commercial Mortgage Loan Portfolio
|
|||||||
Property Type
|
Risk Rating
|
Origination Date
|
Amortized Cost
|
Unfunded Commitment
|
Construction Loan
|
Fully-extended Maturity
|
Location
|
Urban Predevelopment
|
3
|
01/2016
|
$222
|
—
|
|
07/2019
|
Miami, FL
|
Residential-for-sale: inventory
|
3
|
03/2018
|
220
|
—
|
|
03/2021
|
London, UK
|
Hotel
|
3
|
09/2016
|
215
|
—
|
|
08/2021
|
Manhattan, NY
|
Urban Predevelopment
|
3
|
04/2017
|
182
|
—
|
|
03/2019
|
London, UK
|
Office
|
3
|
11/2017
|
174
|
—
|
|
01/2023
|
Chicago, IL
|
Retail Center
|
4
|
11/2014
|
171
|
—
|
|
09/2020
|
Cincinnati, OH
|
Hotel
|
3
|
04/2018
|
151
|
2
|
|
04/2023
|
Honolulu, HI
|
Urban Predevelopment
|
3
|
03/2017
|
143
|
—
|
|
07/2020
|
Brooklyn, NY
|
Hotel
(1)
|
3
|
09/2015
|
140
|
—
|
|
06/2023
|
Manhattan, NY
|
Hotel
|
3
|
05/2018
|
139
|
—
|
|
06/2023
|
Miami, FL
|
Mixed Use
|
3
|
09/2016
|
133
|
—
|
|
10/2020
|
Chicago, IL
|
Mixed Use
|
2
|
07/2017
|
125
|
—
|
|
06/2019
|
Manhattan, NY
|
Office
|
3
|
11/2017
|
122
|
126
|
Y
|
12/2022
|
Manhattan, NY
|
Residential-for-sale: inventory
|
3
|
06/2018
|
99
|
—
|
|
06/2020
|
Manhattan, NY
|
Hotel
|
3
|
07/2018
|
86
|
—
|
|
08/2021
|
Detroit, MI
|
Multifamily
|
3
|
04/2014
|
80
|
—
|
|
07/2023
|
Various
|
Other
|
2
|
10/2016
|
80
|
—
|
|
08/2019
|
Manassas, VA
|
Residential-for-sale: inventory
|
3
|
05/2018
|
77
|
2
|
|
06/2020
|
Brooklyn, NY
|
Hotel
|
2
|
03/2017
|
77
|
—
|
|
03/2022
|
Atlanta, GA
|
Office
|
3
|
12/2017
|
75
|
58
|
|
03/2022
|
London, UK
|
Residential-for-sale: inventory
|
3
|
06/2018
|
71
|
—
|
|
06/2020
|
London, UK
|
Urban Predevelopment
|
3
|
07/2017
|
68
|
11
|
|
04/2019
|
London, UK
|
Multifamily
|
3
|
10/2017
|
67
|
—
|
|
11/2021
|
Brooklyn, NY
|
Urban Predevelopment
|
3
|
12/2016
|
63
|
18
|
|
12/2020
|
Los Angeles, CA
|
Office
|
3
|
01/2018
|
63
|
125
|
Y
|
01/2022
|
Renton, WA
|
Hotel
|
3
|
04/2018
|
63
|
—
|
|
05/2023
|
Scottsdale, AZ
|
Hotel
|
3
|
12/2017
|
63
|
27
|
Y
|
12/2022
|
Manhattan, NY
|
Hotel
|
2
|
01/2017
|
60
|
—
|
|
01/2022
|
Miami, FL
|
Multifamily
|
3
|
11/2014
|
59
|
—
|
|
11/2021
|
Various
|
Office
|
3
|
03/2018
|
59
|
28
|
|
04/2023
|
Chicago, IL
|
Residential-for-sale: inventory
|
3
|
05/2018
|
50
|
—
|
|
04/2021
|
Manhattan, NY
|
Multifamily
|
3
|
05/2016
|
46
|
6
|
|
06/2019
|
Brooklyn, NY
|
Multifamily
|
3
|
10/2017
|
43
|
—
|
|
10/2022
|
London, UK
|
Hotel
|
3
|
12/2015
|
42
|
2
|
|
12/2020
|
St. Thomas, USVI
|
Multifamily
|
3
|
12/2017
|
40
|
—
|
|
01/2020
|
Manhattan, NY
|
Hotel
|
3
|
02/2018
|
38
|
—
|
|
03/2023
|
Pittsburgh, PA
|
Multifamily
(3)
|
5
|
11/2014
|
34
|
—
|
|
11/2019
|
Williston, ND
|
Retail Center
|
3
|
02/2017
|
31
|
—
|
|
10/2018
|
Miami, FL
|
Residential-for-sale: inventory
(3)
|
5
|
02/2014
|
28
|
—
|
|
04/2019
|
Bethesda, MD
|
Residential-for-sale: construction
|
3
|
01/2018
|
16
|
63
|
Y
|
01/2023
|
Manhattan, NY
|
Mixed Use
|
3
|
07/2017
|
14
|
—
|
|
02/2019
|
Manhattan, NY
|
Residential-for-sale: construction
|
2
|
03/2018
|
(1)
|
115
|
Y
|
03/2023
|
San Francisco, CA
|
Office
|
3
|
08/2018
|
(2)
|
201
|
Y
|
12/2022
|
London, UK
|
Commercial mortgage loans
|
|
|
$3,724
|
$783
|
7%
|
2.6 Years
|
|
Subordinate Loan Portfolio
|
|||||||
Property Type
|
Risk Rating
|
Origination Date
|
Amortized Cost
|
Unfunded Commitment
|
Construction Loan
|
Fully-extended Maturity
|
Location
|
Residential-for-sale: construction
(2)
|
3
|
06/2015
|
$177
|
—
|
Y
|
07/2020
|
Manhattan, NY
|
Healthcare
|
3
|
10/2016
|
112
|
—
|
|
10/2021
|
Various
|
Healthcare
|
3
|
06/2018
|
95
|
—
|
|
05/2019
|
Various
|
Residential-for-sale: construction
|
3
|
02/2016
|
78
|
—
|
Y
|
02/2021
|
Manhattan, NY
|
Other
|
3
|
09/2017
|
72
|
—
|
|
09/2022
|
Various
|
Multifamily
|
3
|
10/2015
|
61
|
2
|
|
07/2019
|
Manhattan, NY
|
Residential-for-sale: construction
|
3
|
12/2017
|
58
|
—
|
Y
|
04/2023
|
Los Angeles, CA
|
Healthcare
|
3
|
01/2015
|
49
|
—
|
|
12/2019
|
Various
|
Hotel
|
3
|
06/2018
|
48
|
—
|
|
02/2023
|
Various
|
Mixed Use
|
3
|
01/2017
|
42
|
—
|
|
02/2027
|
Cleveland, OH
|
Residential-for-sale: construction
(2)
|
3
|
11/2017
|
39
|
—
|
Y
|
07/2020
|
Manhattan, NY
|
Residential-for-sale: inventory
|
3
|
10/2016
|
34
|
—
|
|
10/2020
|
Manhattan, NY
|
Industrial
|
3
|
05/2013
|
32
|
—
|
|
05/2023
|
Various
|
Hotel
|
3
|
06/2015
|
25
|
—
|
|
07/2025
|
Phoenix, AZ
|
Residential-for-sale: inventory
|
3
|
06/2017
|
24
|
—
|
|
12/2020
|
Manhattan, NY
|
Multifamily
|
3
|
05/2018
|
21
|
—
|
|
05/2028
|
Cleveland, OH
|
Hotel
|
3
|
06/2015
|
20
|
—
|
|
07/2019
|
Washington, DC
|
Hotel
|
3
|
02/2015
|
20
|
—
|
|
01/2020
|
Burbank, CA
|
Hotel
|
3
|
06/2018
|
20
|
—
|
|
06/2023
|
Las Vegas, NV
|
Residential-for-sale: construction
|
3
|
12/2017
|
19
|
90
|
Y
|
06/2022
|
Manhattan, NY
|
Hotel
(1)
|
3
|
09/2015
|
15
|
9
|
|
06/2023
|
Manhattan, NY
|
Office
|
3
|
07/2013
|
14
|
—
|
|
07/2022
|
Manhattan, NY
|
Office
|
3
|
09/2012
|
9
|
—
|
|
10/2022
|
Kansas City, MO
|
Hotel
|
3
|
05/2017
|
8
|
—
|
|
06/2027
|
Anaheim, CA
|
Office
|
3
|
08/2017
|
8
|
—
|
|
09/2024
|
Troy, MI
|
Mixed Use
|
3
|
07/2012
|
7
|
—
|
|
08/2022
|
Chapel Hill, NC
|
Sub total- Subordinate loans
|
|
|
$1,104
|
$101
|
34%
|
3.0 Years
|
|
|
|
|
|
|
|
|
|
Total Loan Portfolio
|
|
|
$4,828
|
$884
|
13%
|
2.7 Years
|
|
|
|
Average month-end balances for the nine months ended September 30, 2018
|
||||||
Description
|
|
Assets
|
|
Related debt
|
||||
Commercial mortgage loans, net
|
|
$
|
3,342,537
|
|
|
$
|
1,844,784
|
|
Subordinate loans, net
|
|
1,060,957
|
|
|
—
|
|
|
Three months ended September 30,
|
|
2018 vs. 2017
|
|
Nine months ended September 30,
|
|
2018 vs. 2017
|
||||||||||||||||
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
||||||||||||
Net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income from commercial mortgage loans
|
$
|
71,179
|
|
|
$
|
41,203
|
|
|
$
|
29,976
|
|
|
$
|
188,434
|
|
|
$
|
112,690
|
|
|
$
|
75,744
|
|
Interest income from subordinate loans
|
37,308
|
|
|
47,268
|
|
|
(9,960
|
)
|
|
105,236
|
|
|
121,298
|
|
|
(16,062
|
)
|
||||||
Interest income from securities
|
—
|
|
|
2,625
|
|
|
(2,625
|
)
|
|
—
|
|
|
13,379
|
|
|
(13,379
|
)
|
||||||
Interest expense
|
(31,007
|
)
|
|
(19,855
|
)
|
|
(11,152
|
)
|
|
(82,184
|
)
|
|
(56,089
|
)
|
|
(26,095
|
)
|
||||||
Net interest income
|
77,480
|
|
|
71,241
|
|
|
6,239
|
|
|
211,486
|
|
|
191,278
|
|
|
20,208
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
General and administrative expenses
|
(5,843
|
)
|
|
(4,629
|
)
|
|
(1,214
|
)
|
|
(16,493
|
)
|
|
(15,587
|
)
|
|
(906
|
)
|
||||||
Management fees to related party
|
(9,515
|
)
|
|
(8,309
|
)
|
|
(1,206
|
)
|
|
(26,620
|
)
|
|
(23,484
|
)
|
|
(3,136
|
)
|
||||||
Total operating expenses
|
(15,358
|
)
|
|
(12,938
|
)
|
|
(2,420
|
)
|
|
(43,113
|
)
|
|
(39,071
|
)
|
|
(4,042
|
)
|
||||||
Loss from unconsolidated joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,847
|
)
|
|
2,847
|
|
||||||
Other income
|
427
|
|
|
359
|
|
|
68
|
|
|
973
|
|
|
710
|
|
|
263
|
|
||||||
Provision for loan losses and impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
(5,000
|
)
|
|
—
|
|
||||||
Realized loss on sale of assets
|
—
|
|
|
(4,076
|
)
|
|
4,076
|
|
|
—
|
|
|
(5,118
|
)
|
|
5,118
|
|
||||||
Unrealized gain on securities
|
—
|
|
|
13,488
|
|
|
(13,488
|
)
|
|
—
|
|
|
11,830
|
|
|
(11,830
|
)
|
||||||
Foreign currency gain (loss)
|
(4,050
|
)
|
|
7,763
|
|
|
(11,813
|
)
|
|
(23,574
|
)
|
|
17,848
|
|
|
(41,422
|
)
|
||||||
Loss on early extinguishment of debt
|
(2,573
|
)
|
|
—
|
|
|
(2,573
|
)
|
|
(2,573
|
)
|
|
—
|
|
|
(2,573
|
)
|
||||||
Gain (loss) on derivative instruments
|
6,291
|
|
|
(7,481
|
)
|
|
13,772
|
|
|
28,797
|
|
|
(17,916
|
)
|
|
46,713
|
|
||||||
Net income
|
$
|
62,217
|
|
|
$
|
68,356
|
|
|
$
|
(6,139
|
)
|
|
$
|
166,996
|
|
|
$
|
151,714
|
|
|
$
|
15,282
|
|
|
Three months ended
|
||||||||
Dividends declared per share of:
|
September 30, 2018
|
June 30, 2018
|
March 31, 2018
|
||||||
Common Stock
|
$
|
0.46
|
|
$
|
0.46
|
|
$
|
0.46
|
|
Series B Preferred Stock
|
0.50
|
|
0.50
|
|
0.50
|
|
|||
Series C Preferred Stock
|
0.50
|
|
0.50
|
|
0.50
|
|
|
September 30, 2018
|
|
December 31, 2017
|
Debt-to-Common Equity Ratio
(1)
|
1.0x
|
|
0.9x
|
•
|
no investment will be made that would cause us to fail to qualify as a REIT for U.S. federal income tax purposes;
|
•
|
no investment will be made that would cause us to register as an investment company under the 1940 Act;
|
•
|
investments will be predominantly in our target assets;
|
•
|
no more than 20% of our cash equity (on a consolidated basis) will be invested in any single investment at the time of the investment; and
|
•
|
until appropriate investments can be identified, the Manager may invest the proceeds of any offering in interest bearing, short-term investments, including money market accounts and/or funds, that are consistent with our intention to qualify as a REIT.
|
|
Less than 1
year (3) |
|
1 to 3
years (3) |
|
3 to 5
years (3) |
|
More
than 5 years (3) |
|
Total
|
||||||||||
JPMorgan Facility
(1)
|
373,551
|
|
|
708,557
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,082,108
|
|
||
DB Repurchase Facility
(1)
|
197,556
|
|
|
388,886
|
|
|
—
|
|
|
—
|
|
|
586,442
|
|
|||||
Goldman Facility
(1)
|
9,739
|
|
|
217,348
|
|
|
—
|
|
|
—
|
|
|
227,087
|
|
|||||
CS Facility - USD
(1)
|
71,536
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,536
|
|
|||||
CS Facility - GBP
(1)
|
146,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146,068
|
|
|||||
HSBC Facility
(1)
|
50,233
|
|
|
—
|
|
|
|
|
|
|
50,233
|
|
|||||||
Convertible Senior Notes
|
53,225
|
|
|
32,775
|
|
|
359,809
|
|
|
—
|
|
|
445,809
|
|
|||||
Unfunded loan commitments
(2)
|
381,500
|
|
|
474,908
|
|
|
27,770
|
|
|
—
|
|
|
884,178
|
|
|||||
Total
|
$
|
1,283,408
|
|
|
$
|
1,822,474
|
|
|
$
|
387,579
|
|
|
$
|
—
|
|
|
$
|
3,493,461
|
|
(1)
|
Based on the applicable benchmark rates as of September 30, 2018 on the floating rate debt for interest payments due.
|
(2)
|
Based on our expected funding schedule, which is based upon the Manager’s estimates based upon the best information available to the Manager at the time. There is no assurance that the payments will occur in accordance with these estimates or at all, which could affect our operating results.
|
(3)
|
Assumes underlying assets are financed through the fully extended maturity date of the facility.
|
|
For the three months ended September 30, 2018
|
|
For the nine months ended September 30, 2018
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted Averages
|
Face
|
|
Price
|
|
Shares
|
|
Face
|
|
Price
|
|
Shares
|
|||||||
Weighted average diluted shares - GAAP
|
|
|
|
|
153,918,435
|
|
|
|
|
|
|
150,424,889
|
|
|||||
2019 Notes
(1)
|
$
|
127,925
|
|
|
$17.28
|
|
(7,402,122
|
)
|
|
$
|
121,010
|
|
|
$17.34
|
|
(12,220,679
|
)
|
|
2022 Notes
|
$
|
345,000
|
|
|
$19.91
|
|
(17,327,970
|
)
|
|
$
|
345,000
|
|
|
$19.91
|
|
(17,327,970
|
)
|
|
Unvested RSUs
|
—
|
|
|
—
|
|
|
1,593,070
|
|
|
|
|
|
|
1,617,398
|
|
|||
Weighted average diluted shares - Operating Earnings
|
|
|
|
|
130,781,413
|
|
|
|
|
|
|
122,493,638
|
|
Computation of Share Count for Operating Earnings
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Basic weighted average shares of common stock outstanding
|
|
129,188,343
|
|
|
105,446,704
|
|
|
120,876,240
|
|
|
97,546,437
|
|
Weighted average unvested RSUs
|
|
1,593,070
|
|
|
1,366,017
|
|
|
1,617,398
|
|
|
1,373,252
|
|
Weighted average diluted shares - Operating Earnings
|
|
130,781,413
|
|
|
106,812,721
|
|
|
122,493,638
|
|
|
98,919,689
|
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income available to common stockholders
|
$
|
55,381
|
|
|
$
|
57,208
|
|
|
$
|
146,491
|
|
|
$
|
121,946
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Equity-based compensation expense
|
4,048
|
|
|
2,635
|
|
|
11,404
|
|
|
9,887
|
|
||||
Unrealized gain on securities
|
—
|
|
|
(13,488
|
)
|
|
—
|
|
|
(11,830
|
)
|
||||
(Gain) loss on derivative instruments
|
(6,291
|
)
|
|
7,481
|
|
|
(28,798
|
)
|
|
17,916
|
|
||||
Foreign currency (gain) loss, net
|
4,471
|
|
|
(7,850
|
)
|
|
23,906
|
|
|
(18,135
|
)
|
||||
Amortization of the convertible senior notes related to equity reclassification
|
728
|
|
|
769
|
|
|
3,024
|
|
|
1,995
|
|
||||
Loss from unconsolidated joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
2,847
|
|
||||
Provision for loan losses and impairments
|
—
|
|
|
—
|
|
|
5,000
|
|
|
5,000
|
|
||||
Series A preferred stock redemption charge
|
|
|
3,016
|
|
|
|
|
3,016
|
|
||||||
Realized gain from unconsolidated joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
346
|
|
||||
Total adjustments:
|
2,956
|
|
|
(7,437
|
)
|
|
14,536
|
|
|
11,042
|
|
||||
Operating Earnings
|
$
|
58,337
|
|
|
$
|
49,771
|
|
|
$
|
161,027
|
|
|
$
|
132,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized loss and costs from sale of CMBS
|
—
|
|
|
4,076
|
|
|
—
|
|
|
5,118
|
|
||||
Loss on early extinguishment of debt
|
2,573
|
|
|
—
|
|
|
2,573
|
|
|
—
|
|
||||
Operating Earnings excluding realized loss and costs from sale of CMBS and loss on early extinguishment of debt
|
60,910
|
|
|
53,847
|
|
|
163,600
|
|
|
138,106
|
|
||||
Basic and diluted Operating Earnings per share of common stock
|
$
|
0.45
|
|
|
$
|
0.47
|
|
|
$
|
1.31
|
|
|
$
|
1.34
|
|
Basic and diluted Operating Earnings excluding realized loss and costs from sale of CMBS and loss on early extinguishment of debt per share of common stock
|
$
|
0.47
|
|
|
$
|
0.51
|
|
|
$
|
1.34
|
|
|
$
|
1.40
|
|
Basic weighted average shares of common stock outstanding
|
129,188,343
|
|
|
105,446,704
|
|
|
120,876,240
|
|
|
97,546,437
|
|
||||
Weighted average diluted shares - Operating Earnings
|
130,781,413
|
|
|
106,812,721
|
|
|
122,493,638
|
|
|
98,919,689
|
|
•
|
attempting to structure our financing agreements to have a range of different maturities, terms, amortizations and interest rate adjustment periods;
|
•
|
using hedging instruments, interest rate swaps and interest rate caps; and
|
•
|
to the extent available, using securitization financing to better match the maturity of our financing with the duration of our assets.
|
|
|
|
|
50 basis point increase
|
||||||||
Currency
|
|
Net floating rate assets subject to interest rate sensitivity
|
|
Increase to net interest income
(1)
|
|
Increase to net interest income (per Share)
(1)
|
||||||
USD
|
|
$
|
2,026,142
|
|
|
$
|
10,131
|
|
|
$
|
0.08
|
|
GBP
|
|
314,090
|
|
|
1,570
|
|
|
0.01
|
|
|||
EUR
|
|
48,253
|
|
|
241
|
|
|
—
|
|
|||
Total:
|
|
$
|
2,388,485
|
|
|
$
|
11,942
|
|
|
$
|
0.09
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Filed herewith.
|
|
|
|
APOLLO COMMERCIAL REAL ESTATE FINANCE, INC.
|
|
|
|
|
October 24, 2018
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Stuart A. Rothstein
|
|
|
|
Stuart A. Rothstein
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
By:
|
|
/s/ Jai Agarwal
|
|
|
|
Jai Agarwal
|
|
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
(a)
|
[___] shares of common stock, par value $0.01 per share, of the Company (the “
Common Stock
”) in the amounts set forth for each individual Holder on
Exhibit A
hereto (the “
Exchange Shares
”);
plus
|
(b)
|
an amount in cash equal to $[___] plus accrued and unpaid interest to, but excluding, the Closing Date (as defined below), together with cash in lieu of any fractional share of Common Stock, in the amounts set forth for each individual Holder on
Exhibit A
hereto (the “
Total Cash Amount
” and, together with the Exchange Shares, the “
Exchange Consideration
”).
|
The Company
|
Apollo Commercial Real Estate Finance, Inc.
|
By:
Name:
Title:
|
The Undersigned
|
[___]
, in its capacities described in the first paragraph hereof
|
By:
Name:
Title:
|
Address for Notices:
______________________________
______________________________ ______________________________ |
Name of Beneficial Owner and State of Residence
|
Aggregate Principal Amount of Exchanged Notes
|
Exchange Shares
|
Cash Payment for Fractional Shares
|
Total Cash Amount
|
DTC Participant Number of DTC Participant through Which the Exchanged Notes Will Be Delivered
|
DTC Participant Number of DTC Participant to Which the Exchange Shares Will Be Credited
|
Payment Instructions for Total Cash Amount
|
[
Name
]
[
State of Residence
]
|
$[__]
|
[__]
|
$[__]
|
$[__]
|
[__]
|
[__]
|
[__]
|
1.
|
The undersigned has all requisite discretionary and contractual authority to enter into this letter agreement on behalf of, and bind, each Account.
|
2.
|
No disclosure or offering document has been prepared in connection with the Exchange by J.P. Morgan Securities LLC or any of its affiliates (
“
J.P.
Morgan
”
).
|
3.
|
(a) Each Holder has conducted its own investigation of the Company, the Exchanged Notes and the Exchange Shares and has not relied on any statements or other information provided by J.P. Morgan concerning the Company or the Exchange Shares or the Exchange, (b) each Holder has had access to, and an adequate opportunity to review, financial and other information as it deems necessary to make its decision to subscribe to the Exchange, (c) each Holder has been offered the opportunity to ask questions of the Company and received answers thereto, as it deemed necessary in connection with its decision to subscribe to the Exchange, and (d) each Holder has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Exchange Shares.
|
4.
|
J.P. Morgan and its directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Company, the Exchanged Notes or the Exchange Shares, or the accuracy, completeness or adequacy of any information supplied to each Holder by the Company.
|
5.
|
In connection with the Exchange, J.P. Morgan has not acted as financial advisor or fiduciary to the undersigned or any Holder.
|
6.
|
Each Holder is both (i) an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended (the “
Securities Act
”), and (ii) a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act. Each Holder is aware that the issuance and delivery to it of the Exchange Shares are being made in reliance on a private placement exemption from registration under the Securities Act and is acquiring the Exchange Shares for its own account or for an account over which the Holder exercises sole discretion for another qualified institutional buyer or accredited investor.
|
7.
|
Each Holder has the expertise and commercial sophistication to enable it to evaluate the transactions contemplated in connection with the Exchange for itself or with such advisors as it deems necessary in its sole discretion; has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in the Exchange Shares; and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment.
|
8.
|
The Exchange Shares have not been registered under the Securities Act or any other applicable securities laws, and are being offered for exchange in transactions not requiring registration under the Securities Act.
|
[NAME OF INVESTOR]
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: October 24, 2018
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By:
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/s/ Stuart A. Rothstein
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Name:
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Stuart A. Rothstein
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Title:
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Apollo Commercial Real Estate Finance, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: October 24, 2018
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By:
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/s/ Jai Agarwal
|
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Name:
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Jai Agarwal
|
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Title:
|
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Chief Financial Officer, Treasurer and Secretary
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Date: October 24, 2018
|
By:
|
|
/s/ Stuart A. Rothstein
|
|
Name:
|
|
Stuart A. Rothstein
|
|
Title:
|
|
President and Chief Executive Officer
|
Date: October 24, 2018
|
By:
|
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/s/ Jai Agarwal
|
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Name:
|
|
Jai Agarwal
|
|
Title:
|
|
Chief Financial Officer, Treasurer and Secretary
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