|
☒
|
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.)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
Common Stock, $0.01 par value
|
ARI
|
New York Stock Exchange
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
116,472
|
|
|
$
|
109,806
|
|
Commercial mortgage loans, net (includes $3,638,419 and $3,197,900 pledged as collateral under secured debt arrangements in 2019 and 2018, respectively)
|
4,206,754
|
|
|
3,878,981
|
|
||
Subordinate loans, net
|
1,236,990
|
|
|
1,048,612
|
|
||
Other assets
|
40,072
|
|
|
33,720
|
|
||
Derivative assets
|
19,502
|
|
|
23,700
|
|
||
Loan proceeds held by servicer
|
4,619
|
|
|
1,000
|
|
||
Total Assets
|
$
|
5,624,409
|
|
|
$
|
5,095,819
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Secured debt arrangements, net (net of deferred financing costs of $18,246 and $17,555 in 2019 and 2018, respectively)
|
$
|
1,783,057
|
|
|
$
|
1,879,522
|
|
Convertible senior notes, net
|
559,619
|
|
|
592,000
|
|
||
Senior secured term loan, net (net of deferred financing costs of $7,333 and $0 in 2019 and 2018, respectively)
|
490,226
|
|
|
—
|
|
||
Derivative liabilities
|
13,113
|
|
|
—
|
|
||
Accounts payable, accrued expenses and other liabilities
|
96,736
|
|
|
104,746
|
|
||
Payable to related party
|
10,259
|
|
|
9,804
|
|
||
Total Liabilities
|
2,953,010
|
|
|
2,586,072
|
|
||
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 liquidation preference)
|
68
|
|
|
68
|
|
||
Series C preferred stock, 0 and 6,900,000 issued and outstanding ($0 and $172,500 liquidation preference in 2019 and 2018), respectively
|
—
|
|
|
69
|
|
||
Common stock, $0.01 par value, 450,000,000 shares authorized, 153,531,597 and 133,853,565 shares issued and outstanding in 2019 and 2018, respectively
|
1,535
|
|
|
1,339
|
|
||
Additional paid-in-capital
|
2,817,542
|
|
|
2,638,441
|
|
||
Accumulated deficit
|
(147,746
|
)
|
|
(130,170
|
)
|
||
Total Stockholders’ Equity
|
2,671,399
|
|
|
2,509,747
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
5,624,409
|
|
|
$
|
5,095,819
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Net interest income:
|
|
|
|
|
|
|
|
|||||||||
Interest income from commercial mortgage loans
|
$
|
77,458
|
|
|
$
|
65,141
|
|
|
$
|
155,744
|
|
|
$
|
117,255
|
|
|
Interest income from subordinate loans
|
41,043
|
|
|
34,075
|
|
|
81,882
|
|
|
67,928
|
|
|||||
Interest expense
|
(33,511
|
)
|
|
(28,437
|
)
|
|
(69,806
|
)
|
|
(51,177
|
)
|
|||||
Net interest income
|
84,990
|
|
|
70,779
|
|
|
167,820
|
|
|
134,006
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||||
General and administrative expenses (includes equity-based compensation of $4,294 and $8,195 in 2019 and $4,014 and $7,356 in 2018, respectively)
|
(6,574
|
)
|
|
(5,652
|
)
|
|
(12,725
|
)
|
|
(10,650
|
)
|
|||||
Management fees to related party
|
(10,259
|
)
|
|
(9,013
|
)
|
|
(19,872
|
)
|
|
(17,105
|
)
|
|||||
Total operating expenses
|
(16,833
|
)
|
|
(14,665
|
)
|
|
(32,597
|
)
|
|
(27,755
|
)
|
|||||
Other income
|
484
|
|
|
343
|
|
|
1,002
|
|
|
546
|
|
|||||
Reversal of (Provision for) loan losses and impairments
|
15,000
|
|
|
(5,000
|
)
|
|
15,000
|
|
|
(5,000
|
)
|
|||||
Realized loss on investments
|
(12,513
|
)
|
|
—
|
|
|
(12,513
|
)
|
|
—
|
|
|||||
Foreign currency loss
|
(7,777
|
)
|
|
(29,649
|
)
|
|
(883
|
)
|
|
(19,524
|
)
|
|||||
Gain on foreign currency forwards (includes unrealized gains (losses) of $10,787 and $(4,198) in 2019 and $24,796 and $15,941 in 2018, respectively)
|
11,186
|
|
|
33,538
|
|
|
4,466
|
|
|
22,506
|
|
|||||
Unrealized loss on interest rate swap
|
(13,113
|
)
|
|
—
|
|
|
(13,113
|
)
|
|
—
|
|
|||||
Net income
|
$
|
61,424
|
|
|
$
|
55,346
|
|
|
$
|
129,182
|
|
|
$
|
104,779
|
|
|
Preferred dividends
|
(4,919
|
)
|
|
(6,834
|
)
|
—
|
|
(11,754
|
)
|
|
(13,669
|
)
|
||||
Net income available to common stockholders
|
$
|
56,505
|
|
|
$
|
48,512
|
|
|
$
|
117,428
|
|
|
$
|
91,110
|
|
|
Net income per share of common stock:
|
|
|
|
|
|
|
|
|||||||||
Basic
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
$
|
0.83
|
|
|
$
|
0.78
|
|
|
Diluted
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.80
|
|
|
$
|
0.78
|
|
|
Basic weighted-average shares of common stock outstanding
|
145,567,963
|
|
|
123,019,993
|
|
|
140,117,813
|
|
|
116,651,305
|
|
|||||
Diluted weighted-average shares of common stock outstanding
|
174,101,234
|
|
|
124,629,317
|
|
|
169,418,177
|
|
|
118,281,153
|
|
|||||
Dividend declared per share of common stock
|
$
|
0.46
|
|
|
$
|
0.46
|
|
|
$
|
0.92
|
|
|
$
|
0.92
|
|
|
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 (decrease) related to Equity Incentive Plan
|
—
|
|
|
—
|
|
|
345,996
|
|
|
4
|
|
|
(1,389
|
)
|
|
—
|
|
|
(1,385
|
)
|
|||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
15,525,000
|
|
|
155
|
|
|
275,724
|
|
|
—
|
|
|
275,879
|
|
|||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(377
|
)
|
|
—
|
|
|
(377
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,433
|
|
|
49,433
|
|
|||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,835
|
)
|
|
(6,835
|
)
|
|||||
Dividends declared on common stock - $0.46 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,328
|
)
|
|
(57,328
|
)
|
|||||
Balance at March 31, 2018
|
13,670,393
|
|
$
|
137
|
|
|
122,992,231
|
|
$
|
1,230
|
|
|
$
|
2,444,036
|
|
|
$
|
(97,873
|
)
|
|
$
|
2,347,530
|
|
||
Capital increase related to Equity Incentive Plan
|
—
|
|
—
|
|
|
28,070
|
|
|
—
|
|
|
4,013
|
|
|
—
|
|
|
4,013
|
|
||||||
Offering costs
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
—
|
|
|
(76
|
)
|
||||||
Net income
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,346
|
|
|
55,346
|
|
||||||
Dividends declared on preferred stock
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,834
|
)
|
|
(6,834
|
)
|
||||||
Dividends declared on common stock - $0.46 per share
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,326
|
)
|
|
(57,326
|
)
|
||||||
Balance at June 30, 2018
|
13,670,393
|
|
$
|
137
|
|
|
123,020,301
|
|
$
|
1,230
|
|
|
$
|
2,447,973
|
|
|
$
|
(106,687
|
)
|
|
$
|
2,342,653
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In-Capital
|
|
Accumulated
Deficit
|
|
Total
|
||||||||||||||||
|
Shares
|
|
Par
|
|
Shares
|
|
Par
|
|
|||||||||||||||||
Balance at January 1, 2019
|
13,670,393
|
|
|
$
|
137
|
|
|
133,853,565
|
|
|
$
|
1,339
|
|
|
$
|
2,638,441
|
|
|
$
|
(130,170
|
)
|
|
$
|
2,509,747
|
|
Capital increase (decrease) related to Equity Incentive Plan
|
—
|
|
|
—
|
|
|
433,426
|
|
|
4
|
|
|
(1,099
|
)
|
|
—
|
|
|
(1,095
|
)
|
|||||
Conversions of convertible senior notes for common stock
|
—
|
|
|
—
|
|
|
1,967,361
|
|
|
20
|
|
|
33,758
|
|
|
—
|
|
|
33,778
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,758
|
|
|
67,758
|
|
|||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,835
|
)
|
|
(6,835
|
)
|
|||||
Dividends declared on common stock - $0.46 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,529
|
)
|
|
(63,529
|
)
|
|||||
Balance at March 31, 2019
|
13,670,393
|
|
|
$
|
137
|
|
|
136,254,352
|
|
|
$
|
1,363
|
|
|
$
|
2,671,100
|
|
|
$
|
(132,776
|
)
|
|
$
|
2,539,824
|
|
Capital increase related to Equity Incentive Plan
|
—
|
|
|
—
|
|
|
27,245
|
|
|
—
|
|
|
4,294
|
|
|
—
|
|
|
4,294
|
|
|||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
17,250,000
|
|
|
172
|
|
|
314,985
|
|
|
—
|
|
|
315,157
|
|
|||||
Redemption of preferred stock
|
(6,900,000
|
)
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
(172,431
|
)
|
|
—
|
|
|
(172,500
|
)
|
|||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(406
|
)
|
|
—
|
|
|
(406
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,424
|
|
|
61,424
|
|
|||||
Dividends declared on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,919
|
)
|
|
(4,919
|
)
|
|||||
Dividends declared on common stock - $0.46 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,475
|
)
|
|
(71,475
|
)
|
|||||
Balance at June 30, 2019
|
6,770,393
|
|
|
$
|
68
|
|
|
153,531,597
|
|
|
$
|
1,535
|
|
|
$
|
2,817,542
|
|
|
$
|
(147,746
|
)
|
|
$
|
2,671,399
|
|
|
For the six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows (used in) provided by operating activities:
|
|
|
|
||||
Net income
|
$
|
129,182
|
|
|
$
|
104,779
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization of discount/premium and PIK
|
(40,490
|
)
|
|
(30,192
|
)
|
||
Amortization of deferred financing costs
|
5,487
|
|
|
5,355
|
|
||
Equity-based compensation
|
3,195
|
|
|
2,628
|
|
||
(Reversal of) Provision for loan losses and impairments
|
(15,000
|
)
|
|
5,000
|
|
||
Realized loss on Investments
|
12,513
|
|
|
—
|
|
||
Foreign currency gain
|
3,068
|
|
|
17,371
|
|
||
Unrealized (gain) loss on derivative instruments
|
17,311
|
|
|
(15,941
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Proceeds received from PIK
|
—
|
|
|
75,652
|
|
||
Other assets
|
(6,460
|
)
|
|
(4,069
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
668
|
|
|
10,190
|
|
||
Payable to related party
|
455
|
|
|
845
|
|
||
Net cash (used in) provided by operating activities
|
109,929
|
|
|
171,618
|
|
||
Cash flows used in investing activities:
|
|
|
|
||||
New funding of commercial mortgage loans
|
(511,310
|
)
|
|
(1,275,507
|
)
|
||
Add-on funding of commercial mortgage loans
|
(175,497
|
)
|
|
(60,500
|
)
|
||
New funding of subordinate loans
|
(276,607
|
)
|
|
(201,966
|
)
|
||
Add-on funding of subordinate loans
|
(12,825
|
)
|
|
(43,284
|
)
|
||
Proceeds and payments received on commercial mortgage loans
|
341,453
|
|
|
227,913
|
|
||
Proceeds and payments received on subordinate loans
|
130,567
|
|
|
367,143
|
|
||
Origination and exit fees received on commercial mortgage and subordinate loans
|
12,275
|
|
|
28,362
|
|
||
Decrease in collateral held related to derivative contracts
|
(18,180
|
)
|
|
4,930
|
|
||
Net cash (used in) provided by investing activities
|
(510,124
|
)
|
|
(952,909
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
315,157
|
|
|
275,879
|
|
||
Redemption of preferred stock
|
(172,500
|
)
|
|
—
|
|
||
Payment of offering costs
|
(141
|
)
|
|
(188
|
)
|
||
Proceeds from secured debt arrangements
|
981,529
|
|
|
1,367,211
|
|
||
Repayments of secured debt arrangements
|
(1,063,071
|
)
|
|
(723,260
|
)
|
||
Proceeds from issuance of senior secured term loan
|
497,500
|
|
|
—
|
|
||
Exchanges and conversions of convertible senior notes
|
(704
|
)
|
|
—
|
|
||
Payment of deferred financing costs
|
(9,416
|
)
|
|
(11,314
|
)
|
||
Dividends on common stock
|
(126,289
|
)
|
|
(114,655
|
)
|
||
Dividends on preferred stock
|
(15,204
|
)
|
|
(13,669
|
)
|
||
Net cash (used in) provided by financing activities
|
406,861
|
|
|
780,004
|
|
||
Net increase (decrease) in cash and cash equivalents
|
6,666
|
|
|
(1,287
|
)
|
||
Cash and cash equivalents, beginning of period
|
109,806
|
|
|
77,671
|
|
||
Cash and cash equivalents, end of period
|
$
|
116,472
|
|
|
$
|
76,384
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
62,915
|
|
|
$
|
43,420
|
|
Supplemental disclosure of non-cash financing activities:
|
|
|
|
||||
Exchange of convertible senior notes for common stock
|
$
|
33,778
|
|
|
$
|
—
|
|
Dividend declared, not yet paid
|
$
|
74,295
|
|
|
$
|
64,162
|
|
Offering costs payable
|
$
|
265
|
|
|
$
|
—
|
|
Loan proceeds held by servicer
|
$
|
4,619
|
|
|
$
|
—
|
|
Deferred financing costs, not yet paid
|
$
|
4,095
|
|
|
$
|
—
|
|
|
Fair Value as of June 30, 2019
|
|
Fair Value as of December 31, 2018
|
||||||||||||||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||||||||||
Foreign currency forward assets, net
|
$
|
—
|
|
|
$
|
19,502
|
|
|
$
|
—
|
|
|
$
|
19,502
|
|
|
$
|
—
|
|
|
$
|
23,700
|
|
|
$
|
—
|
|
|
$
|
23,700
|
|
Interest rate swap liability
|
—
|
|
|
(13,113
|
)
|
|
—
|
|
|
(13,113
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loan Type
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Commercial mortgage loans, net
|
|
$
|
4,206,754
|
|
|
$
|
3,878,981
|
|
Subordinate loans, net
|
|
1,236,990
|
|
|
1,048,612
|
|
||
Total loans, net
|
|
$
|
5,443,744
|
|
|
$
|
4,927,593
|
|
|
|
Principal Balance
|
|
Deferred Fees/Other Items (1)
|
|
Provision for Loan Loss (2)
|
|
Carrying Value
|
||||||||
December 31, 2018
|
|
$
|
4,982,514
|
|
|
$
|
(17,940
|
)
|
|
$
|
(36,981
|
)
|
|
$
|
4,927,593
|
|
New loan fundings
|
|
787,917
|
|
|
—
|
|
|
—
|
|
|
787,917
|
|
||||
Add-on loan fundings (3)
|
|
188,322
|
|
|
—
|
|
|
—
|
|
|
188,322
|
|
Loan repayments
|
|
(490,087
|
)
|
|
—
|
|
|
—
|
|
|
(490,087
|
)
|
||||
Gain (loss) on foreign currency translation
|
|
(2,806
|
)
|
|
(58
|
)
|
|
—
|
|
|
(2,864
|
)
|
||||
Provision for loan loss / (Realized loss on Investment) (2)
|
|
(12,513
|
)
|
|
—
|
|
|
15,000
|
|
|
2,487
|
|
||||
Deferred fees
|
|
—
|
|
|
(12,275
|
)
|
|
—
|
|
|
(12,275
|
)
|
||||
PIK interest and amortization of fees
|
|
29,201
|
|
|
13,450
|
|
|
—
|
|
|
42,651
|
|
||||
June 30, 2019
|
|
$
|
5,482,548
|
|
|
$
|
(16,823
|
)
|
|
$
|
(21,981
|
)
|
|
$
|
5,443,744
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Number of loans
|
|
71
|
|
|
69
|
|
||
Principal balance
|
|
$
|
5,482,548
|
|
|
$
|
4,982,514
|
|
Carrying value
|
|
$
|
5,443,744
|
|
|
$
|
4,927,593
|
|
Unfunded loan commitments (1)
|
|
$
|
1,192,118
|
|
|
$
|
1,095,598
|
|
Weighted-average cash coupon (2)
|
|
8.2
|
%
|
|
8.4
|
%
|
||
Weighted-average remaining term (3)
|
|
2.9 years
|
|
|
2.8 years
|
|
(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.
|
(3)
|
Assumes all extension options are exercised.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
Property Type
|
|
Carrying
Value |
|
% of
Portfolio |
|
Carrying
Value |
|
% of
Portfolio |
||||||
Hotel
|
|
$
|
1,322,167
|
|
|
24.3
|
%
|
|
$
|
1,286,590
|
|
|
26.1
|
%
|
Residential-for-sale: construction
|
|
706,260
|
|
|
12.9
|
%
|
|
528,510
|
|
|
10.7
|
%
|
||
Residential-for-sale: inventory
|
|
395,375
|
|
|
7.3
|
%
|
|
577,053
|
|
|
11.7
|
%
|
||
Office
|
|
1,202,311
|
|
|
22.2
|
%
|
|
832,620
|
|
|
16.9
|
%
|
||
Urban Predevelopment
|
|
595,263
|
|
|
10.8
|
%
|
|
683,886
|
|
|
13.9
|
%
|
||
Multifamily
|
|
472,785
|
|
|
8.7
|
%
|
|
448,899
|
|
|
9.1
|
%
|
||
Industrial
|
|
227,451
|
|
|
4.2
|
%
|
|
32,000
|
|
|
0.6
|
%
|
||
Retail Center
|
|
158,128
|
|
|
2.9
|
%
|
|
156,067
|
|
|
3.2
|
%
|
||
Healthcare
|
|
142,933
|
|
|
2.6
|
%
|
|
156,814
|
|
|
3.2
|
%
|
||
Other
|
|
120,041
|
|
|
2.2
|
%
|
|
151,197
|
|
|
3.1
|
%
|
||
Mixed Use
|
|
101,030
|
|
|
1.9
|
%
|
|
73,957
|
|
|
1.5
|
%
|
||
Total
|
|
$
|
5,443,744
|
|
|
100.0
|
%
|
|
$
|
4,927,593
|
|
|
100.0
|
%
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
Geographic Location
|
|
Carrying
Value |
|
% of
Portfolio |
|
Carrying
Value |
|
% of
Portfolio |
||||||
Manhattan, NY
|
|
$
|
1,883,438
|
|
|
34.6
|
%
|
|
$
|
1,669,145
|
|
|
33.9
|
%
|
Brooklyn, NY
|
|
553,859
|
|
|
10.2
|
%
|
|
346,056
|
|
|
7.0
|
%
|
||
Northeast
|
|
18,738
|
|
|
0.3
|
%
|
|
23,479
|
|
|
0.5
|
%
|
||
West
|
|
696,804
|
|
|
12.8
|
%
|
|
614,160
|
|
|
12.5
|
%
|
||
Midwest
|
|
638,981
|
|
|
11.8
|
%
|
|
631,710
|
|
|
12.8
|
%
|
||
Southeast
|
|
501,878
|
|
|
9.2
|
%
|
|
559,043
|
|
|
11.3
|
%
|
||
Southwest
|
|
119,910
|
|
|
2.2
|
%
|
|
96,345
|
|
|
2.0
|
%
|
||
Mid Atlantic
|
|
108,056
|
|
|
2.0
|
%
|
|
211,775
|
|
|
4.3
|
%
|
||
United Kingdom
|
|
654,952
|
|
|
12.0
|
%
|
|
700,460
|
|
|
14.2
|
%
|
||
Other International
|
|
267,128
|
|
|
4.9
|
%
|
|
75,420
|
|
|
1.5
|
%
|
||
Total
|
|
$
|
5,443,744
|
|
|
100.0
|
%
|
|
$
|
4,927,593
|
|
|
100.0
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Interest receivable
|
$
|
39,047
|
|
|
$
|
33,399
|
|
Other
|
1,025
|
|
|
321
|
|
||
Total
|
$
|
40,072
|
|
|
$
|
33,720
|
|
|
June 30, 2019 (2)
|
|
December 31, 2018 (2)
|
|||||||||||||||||
|
Maximum Amount of Borrowings
|
|
Borrowings Outstanding
|
|
Maturity (1)
|
|
Maximum Amount of Borrowings
|
|
Borrowings Outstanding
|
|
Maturity (1)
|
|||||||||
JPMorgan Facility (USD)
|
$
|
951,723
|
|
|
$
|
712,335
|
|
|
June 2024
|
|
$
|
1,333,503
|
|
|
$
|
680,141
|
|
|
June 2021
|
|
JPMorgan Facility (GBP)
|
48,277
|
|
|
48,277
|
|
|
June 2024
|
|
48,497
|
|
|
48,497
|
|
|
June 2021
|
|||||
DB Repurchase Facility (USD)
|
862,588
|
|
|
434,090
|
|
|
March 2021
|
|
904,181
|
|
|
419,823
|
|
|
March 2021
|
|||||
DB Repurchase Facility (GBP)
|
137,412
|
|
|
137,412
|
|
|
March 2021
|
|
150,819
|
|
|
150,819
|
|
|
March 2021
|
|||||
Goldman Facility
|
500,000
|
|
|
112,713
|
|
|
November 2021
|
|
300,000
|
|
|
210,072
|
|
|
November 2020
|
|||||
CS Facility (USD)
|
174,278
|
|
|
174,278
|
|
|
December 2019
|
|
187,117
|
|
|
187,117
|
|
|
June 2019
|
|||||
CS Facility (GBP)
|
144,364
|
|
|
144,364
|
|
|
December 2019
|
|
151,773
|
|
|
151,773
|
|
|
June 2019
|
|||||
HSBC Facility (GBP)
|
37,834
|
|
|
37,834
|
|
|
December 2019
|
|
48,835
|
|
|
48,835
|
|
|
December 2019
|
|||||
Sub-total
|
2,856,476
|
|
|
1,801,303
|
|
|
|
|
3,124,725
|
|
|
1,897,077
|
|
|
|
|||||
less: deferred financing costs
|
N/A
|
|
|
(18,246
|
)
|
|
|
|
N/A
|
|
|
(17,555
|
)
|
|
|
|||||
Total / Weighted-Average
|
$
|
2,856,476
|
|
|
$
|
1,783,057
|
|
|
$
|
3,124,725
|
|
|
$
|
1,879,522
|
|
|
||||
|
Less than
1 year (1) |
|
1 to 3
years (1) |
|
3 to 5
years (1) |
|
More than
5 years |
|
Total
|
||||||||||
JPMorgan Facility
|
$
|
144,554
|
|
|
$
|
294,839
|
|
|
$
|
321,219
|
|
|
$
|
—
|
|
|
$
|
760,612
|
|
DB Repurchase Facility
|
106,304
|
|
|
465,198
|
|
|
—
|
|
|
—
|
|
|
571,502
|
|
|||||
Goldman Facility
|
—
|
|
|
112,713
|
|
|
—
|
|
|
—
|
|
|
112,713
|
|
|||||
CS Facility - USD
|
174,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174,278
|
|
|||||
CS Facility - GBP
|
144,364
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,364
|
|
|||||
HSBC Facility
|
37,834
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,834
|
|
|||||
Total
|
$
|
607,334
|
|
|
$
|
872,750
|
|
|
$
|
321,219
|
|
|
$
|
—
|
|
|
$
|
1,801,303
|
|
|
As of June 30, 2019
|
|
For the six months ended June 30, 2019
|
||||||||||||
|
Balance
|
|
Amortized Cost of Collateral
|
|
Maximum Month-End
Balance |
|
Average Month-End
Balance |
||||||||
JPMorgan Facility
|
$
|
760,612
|
|
|
$
|
1,612,150
|
|
|
$
|
929,496
|
|
|
$
|
836,744
|
|
DB Repurchase Facility
|
571,502
|
|
|
1,012,396
|
|
|
672,477
|
|
|
583,879
|
|
||||
Goldman Facility
|
112,713
|
|
|
515,064
|
|
|
312,507
|
|
|
207,934
|
|
||||
CS Facility - USD
|
174,278
|
|
|
238,441
|
|
|
188,037
|
|
|
184,049
|
|
||||
CS Facility - GBP
|
144,364
|
|
|
206,422
|
|
|
150,811
|
|
|
145,599
|
|
||||
HSBC Facility
|
37,834
|
|
|
53,946
|
|
|
50,784
|
|
|
47,830
|
|
||||
Total
|
$
|
1,801,303
|
|
|
$
|
3,638,419
|
|
|
|
|
|
|
Principal Amount
|
Coupon Rate
|
Effective Rate (1)
|
Conversion Rate (2)
|
Maturity Date
|
Remaining Period of Amortization
|
|||||
2022 Notes
|
$
|
345,000
|
|
4.75
|
%
|
5.60
|
%
|
50.2260
|
|
8/23/2022
|
3.15
|
2023 Notes
|
230,000
|
|
5.38
|
%
|
6.16
|
%
|
48.7187
|
|
10/15/2023
|
4.29
|
|
Total
|
$
|
575,000
|
|
|
|
|
|
|
(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.
|
|
June 30, 2019
|
||||||||
|
Number of Contracts
|
|
Aggregate Notional Amount (in thousands)
|
|
Notional Currency
|
|
Maturity
|
|
Weighted-Average Years to Maturity
|
Fx Contracts - GBP
|
95
|
|
271,961
|
|
GBP
|
|
July 2019- December 2021
|
|
0.89
|
Fx Contracts - EUR
|
15
|
|
183,689
|
|
EUR
|
|
August 2019- February 2023
|
|
0.87
|
Interest Rate Swap
|
1
|
|
500,000
|
|
USD
|
|
May 2026
|
|
6.87
|
|
December 31, 2018
|
||||||||
|
Number of Contracts
|
|
Aggregate Notional Amount (in thousands)
|
|
Notional Currency
|
|
Maturity
|
|
Weighted-Average Years to Maturity
|
Fx Contracts - GBP
|
43
|
|
270,161
|
|
GBP
|
|
January 2019 - November 2020
|
|
0.69
|
(1)
|
With a notional amount of $0.0 million and $37.5 million at June 30, 2019, and 2018, respectively.
|
|
|
|
Amount of loss
recognized in income |
|
Amount of loss
recognized in income |
||||||||
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
Location of Loss Recognized in Income
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Interest rate swap(1)
|
Unrealized loss on interest rate swap
|
|
(13,113
|
)
|
|
—
|
|
|
(13,113
|
)
|
|
—
|
|
(1)
|
With a notional amount of $500.0 million and $0.0 million at June 30, 2019, and 2018, respectively.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross
Amount of Recognized Assets (Liabilities) |
|
Gross
Amounts Offset in the Condensed Consolidated Balance Sheet |
|
Net Amounts
of Assets (Liabilities) Presented in the Condensed Consolidated Balance Sheet |
|
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
|
||||||||||||
Forward currency contracts
|
$
|
19,760
|
|
|
$
|
(258
|
)
|
|
$
|
19,502
|
|
|
$
|
23,753
|
|
|
$
|
(53
|
)
|
|
$
|
23,700
|
|
Interest rate swap
|
(13,113
|
)
|
|
—
|
|
|
(13,113
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Accrued dividends payable
|
$
|
74,295
|
|
|
$
|
69,033
|
|
Collateral deposited under derivative agreements
|
1,820
|
|
|
20,000
|
|
||
Accrued interest payable
|
13,470
|
|
|
14,208
|
|
||
Accounts payable and other liabilities
|
7,151
|
|
|
1,505
|
|
||
Total
|
$
|
96,736
|
|
|
$
|
104,746
|
|
|
Type
|
|
Restricted Stock
|
|
RSUs
|
|
Grant Date Fair Value ($ in thousands)
|
|||
Outstanding at December 31, 2018
|
|
65,697
|
|
|
1,852,957
|
|
|
|
||
|
Granted
|
|
27,245
|
|
|
—
|
|
|
500
|
|
|
Vested
|
|
(47,586
|
)
|
|
—
|
|
|
N/A
|
|
|
Forfeiture
|
|
—
|
|
|
(6,784
|
)
|
|
N/A
|
|
Outstanding at June 30, 2019
|
|
45,356
|
|
|
1,846,173
|
|
|
|
Vesting Year
|
|
Restricted Stock
|
|
RSU
|
|
Total Awards
|
|||
2019
|
|
20,000
|
|
|
885,976
|
|
|
905,976
|
|
2020
|
|
25,356
|
|
|
625,825
|
|
|
651,181
|
|
2021
|
|
—
|
|
|
334,372
|
|
|
334,372
|
|
Total
|
|
45,356
|
|
|
1,846,173
|
|
|
1,891,529
|
|
|
Three months ended
|
|
Dividend declared per share of:
|
June 30, 2019
|
March 31, 2019
|
Common Stock
|
$0.46
|
$0.46
|
Series B Preferred Stock
|
0.50
|
0.50
|
Series C Preferred Stock
|
0.2223
|
0.50
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Value |
|
Estimated
Fair Value |
|
Carrying
Value |
|
Estimated
Fair Value |
||||||||
Cash and cash equivalents
|
$
|
116,472
|
|
|
$
|
116,472
|
|
|
$
|
109,806
|
|
|
$
|
109,806
|
|
Commercial first mortgage loans, net
|
4,206,754
|
|
|
4,263,296
|
|
|
3,878,981
|
|
|
3,894,947
|
|
||||
Subordinate loans, net
|
1,236,990
|
|
|
1,246,454
|
|
|
1,048,612
|
|
|
1,047,854
|
|
||||
Secured debt arrangements
|
(1,783,057
|
)
|
|
(1,783,057
|
)
|
|
(1,897,077
|
)
|
|
(1,897,077
|
)
|
||||
Senior secured term loan
|
(490,226
|
)
|
|
(496,875
|
)
|
|
—
|
|
|
—
|
|
||||
2019 Notes
|
—
|
|
|
—
|
|
|
(34,278
|
)
|
|
(35,276
|
)
|
||||
2022 Notes
|
(336,505
|
)
|
|
(344,786
|
)
|
|
(335,291
|
)
|
|
(326,025
|
)
|
||||
2023 Notes
|
(223,114
|
)
|
|
(230,097
|
)
|
|
(222,431
|
)
|
|
(221,964
|
)
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Basic Earnings
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
61,424
|
|
|
$
|
55,346
|
|
|
$
|
129,182
|
|
|
$
|
104,779
|
|
Less: Preferred dividends
|
(4,919
|
)
|
|
(6,834
|
)
|
|
(11,754
|
)
|
|
(13,669
|
)
|
||||
Net income available to common stockholders
|
$
|
56,505
|
|
|
$
|
48,512
|
|
|
$
|
117,428
|
|
|
$
|
91,110
|
|
Less: Dividends on participating securities
|
(849
|
)
|
|
(738
|
)
|
|
(1,700
|
)
|
|
(1,489
|
)
|
||||
Basic Earnings
|
$
|
55,656
|
|
|
$
|
47,774
|
|
|
$
|
115,728
|
|
|
$
|
89,621
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
61,424
|
|
|
$
|
55,346
|
|
|
$
|
129,182
|
|
|
$
|
104,779
|
|
Less: Preferred dividends
|
(4,919
|
)
|
|
(6,834
|
)
|
|
(11,754
|
)
|
|
(13,669
|
)
|
||||
Net income available to common stockholders
|
$
|
56,505
|
|
|
$
|
48,512
|
|
|
$
|
117,428
|
|
|
$
|
91,110
|
|
Add: Interest expense on Notes
|
8,619
|
|
|
N/A
|
|
|
17,881
|
|
|
N/A
|
|
||||
Diluted Earnings
|
$
|
65,124
|
|
|
$
|
48,512
|
|
|
$
|
135,309
|
|
|
$
|
91,110
|
|
|
|
|
|
|
|
|
|
||||||||
Number of Shares:
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares of common stock outstanding
|
145,567,963
|
|
|
123,019,993
|
|
|
140,117,813
|
|
|
116,651,305
|
|
||||
Diluted weighted-average shares of common stock outstanding
|
174,101,234
|
|
|
124,629,317
|
|
|
169,418,177
|
|
|
118,281,153
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Earnings Per Share Attributable to Common Stockholders
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
$
|
0.83
|
|
|
$
|
0.78
|
|
Diluted
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.80
|
|
|
$
|
0.78
|
|
Description
|
|
Amortized
Cost |
|
Weighted-Average Coupon (1)
|
|
Weighted Average All-in Yield (1)(2)
|
|
Secured Debt Arrangements (3)
|
|
Cost of Funds
|
|
Equity at
cost(4) |
|||||||||
Commercial mortgage loans, net
|
|
$
|
4,206,754
|
|
|
6.7
|
%
|
|
7.5
|
%
|
|
$
|
1,801,303
|
|
|
3.9
|
%
|
|
$
|
2,405,451
|
|
Subordinate loans, net
|
|
1,236,990
|
|
|
13.2
|
%
|
|
14.1
|
%
|
|
—
|
|
|
—
|
|
|
1,236,990
|
|
|||
Total/Weighted-Average
|
|
$
|
5,443,744
|
|
|
8.2
|
%
|
|
9.0
|
%
|
|
$
|
1,801,303
|
|
|
3.9
|
%
|
|
$
|
3,642,441
|
|
(1)
|
Weighted-Average Coupon and Weighted-Average All-in Yield are based on the applicable benchmark rates as of June 30, 2019 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 $18.2 million.
|
(4)
|
Represents loan portfolio at amortized cost less secured debt arrangements outstanding.
|
Hotel
|
3
|
05/2018
|
139
|
—
|
|
06/2023
|
Miami, FL
|
Office
|
3
|
01/2018
|
106
|
82
|
Y
|
01/2022
|
Renton, WA
|
Hotel
|
3
|
03/2017
|
105
|
—
|
|
03/2022
|
Atlanta, GA
|
Office
|
3
|
10/2018
|
104
|
81
|
Y
|
10/2023
|
Manhattan, NY
|
Hotel
|
3
|
11/2018
|
99
|
—
|
|
12/2023
|
Vail, CO
|
Hotel
|
3
|
12/2017
|
89
|
—
|
|
12/2022
|
Manhattan, NY
|
Hotel
|
3
|
07/2018
|
87
|
—
|
|
08/2021
|
Detroit, MI
|
Residential-for-sale: construction
|
3
|
05/2018
|
78
|
5
|
Y
|
06/2020
|
Brooklyn, NY
|
Office
|
3
|
12/2017
|
75
|
55
|
|
03/2022
|
London, UK
|
Multifamily
|
3
|
04/2014
|
73
|
—
|
|
07/2023
|
Various
|
Urban Predevelopment
|
3
|
12/2016
|
73
|
—
|
|
12/2020
|
Los Angeles, CA
|
Residential-for-sale: construction
|
3
|
12/2018
|
70
|
107
|
Y
|
12/2023
|
Manhattan, NY
|
Multifamily
|
3
|
10/2017
|
67
|
—
|
|
11/2021
|
Brooklyn, NY
|
Office
|
3
|
03/2018
|
65
|
22
|
|
04/2023
|
Chicago, IL
|
Hotel
|
3
|
04/2018
|
63
|
—
|
|
05/2023
|
Scottsdale, AZ
|
Multifamily
|
3
|
11/2014
|
57
|
—
|
|
11/2021
|
Various
|
Residential-for-sale: inventory
|
3
|
06/2018
|
56
|
—
|
|
06/2020
|
Manhattan, NY
|
Multifamily
|
3
|
06/2018
|
54
|
—
|
|
06/2020
|
London, UK
|
Hotel
|
3
|
05/2019
|
52
|
—
|
|
06/2024
|
Chicago, IL
|
Multifamily
|
3
|
05/2016
|
51
|
1
|
|
09/2019
|
Brooklyn, NY
|
Residential-for-sale: inventory
|
3
|
05/2018
|
50
|
—
|
|
04/2021
|
Manhattan, NY
|
Other
|
3
|
04/2019
|
48
|
111
|
Y
|
09/2025
|
Culver City, CA
|
Hotel
|
3
|
12/2015
|
42
|
2
|
|
05/2024
|
St. Thomas, USVI
|
Multifamily
|
3
|
12/2017
|
42
|
—
|
|
01/2020
|
Manhattan, NY
|
Multifamily
|
3
|
10/2017
|
42
|
—
|
|
10/2022
|
London, UK
|
Residential-for-sale: construction
|
3
|
01/2018
|
40
|
40
|
Y
|
01/2023
|
Manhattan, NY
|
Hotel
|
3
|
02/2018
|
38
|
—
|
|
03/2023
|
Pittsburgh, PA
|
Residential-for-sale: inventory (3)
|
5
|
02/2014
|
21
|
—
|
|
04/2020
|
Bethesda, MD
|
Office
|
3
|
04/2019
|
17
|
56
|
Y
|
08/2022
|
Birmingham, UK
|
Residential-for-sale: construction
|
3
|
12/2018
|
8
|
94
|
Y
|
01/2024
|
Hallandale Beach, FL
|
Residential-for-sale: construction
|
3
|
03/2018
|
(1)
|
115
|
Y
|
03/2023
|
San Francisco, CA
|
Office
|
3
|
08/2018
|
(2)
|
196
|
Y
|
12/2022
|
London, UK
|
Sub total / Weighted-Average Commercial Mortgage Loans
|
3.0
|
|
$4,207
|
$1,117
|
15%
|
2.9 Years
|
|
Subordinate Loan Portfolio
|
|||||||
Property Type
|
Risk Rating
|
Origination Date
|
Amortized Cost
|
Unfunded Commitment
|
Construction Loan(4)
|
Fully-extended Maturity
|
Location
|
Residential-for-sale: construction (2)
|
3
|
06/2015
|
$196
|
—
|
Y
|
02/2021
|
Manhattan, NY
|
Office
|
3
|
01/2019
|
99
|
—
|
|
12/2025
|
Manhattan, NY
|
Healthcare
|
3
|
01/2019
|
95
|
—
|
|
01/2024
|
Various
|
Residential-for-sale: construction
|
3
|
12/2017
|
90
|
22
|
Y
|
06/2022
|
Manhattan, NY
|
Residential-for-sale: construction
|
3
|
01/2016
|
86
|
—
|
Y
|
02/2020
|
Manhattan, NY
|
Other
|
3
|
09/2017
|
72
|
—
|
|
09/2022
|
Various
|
Multifamily
|
3
|
10/2015
|
68
|
1
|
|
11/2019
|
Manhattan, NY
|
Residential-for-sale: construction
|
3
|
12/2017
|
63
|
—
|
Y
|
04/2023
|
Los Angeles, CA
|
Healthcare
|
2
|
01/2015
|
46
|
—
|
|
12/2019
|
Various
|
Residential-for-sale: construction (2)
|
3
|
11/2017
|
46
|
—
|
Y
|
02/2021
|
Manhattan, NY
|
Mixed Use
|
3
|
01/2017
|
42
|
—
|
|
02/2027
|
Cleveland, OH
|
Mixed Use
|
3
|
02/2019
|
37
|
—
|
Y
|
12/2022
|
London, UK
|
Residential-for-sale: inventory
|
3
|
10/2016
|
36
|
—
|
|
10/2020
|
Manhattan, NY
|
Industrial
|
2
|
05/2013
|
32
|
—
|
|
05/2023
|
Various
|
Residential-for-sale: construction
|
3
|
04/2019
|
32
|
8
|
Y
|
02/2020
|
Manhattan, NY
|
Residential-for-sale: inventory
|
3
|
06/2017
|
25
|
—
|
|
12/2020
|
Manhattan, NY
|
Hotel
|
3
|
06/2015
|
25
|
—
|
|
07/2025
|
Phoenix, AZ
|
Hotel
|
3
|
06/2015
|
20
|
—
|
|
12/2022
|
Washington, DC
|
Hotel
|
3
|
06/2018
|
20
|
—
|
|
06/2023
|
Las Vegas, NV
|
Multifamily
|
3
|
05/2018
|
20
|
—
|
|
05/2028
|
Cleveland, OH
|
Hotel
|
3
|
02/2015
|
20
|
—
|
|
01/2020
|
Burbank, CA
|
Mixed Use
|
3
|
12/2018
|
15
|
35
|
Y
|
12/2023
|
Brooklyn, NY
|
Hotel (1)
|
3
|
09/2015
|
15
|
9
|
|
06/2023
|
Manhattan, NY
|
Office
|
3
|
07/2013
|
14
|
—
|
|
07/2022
|
Manhattan, NY
|
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 / Weighted-Average Subordinate Loans
|
2.9
|
|
$1,237
|
$75
|
46%
|
3.0 Years
|
|
|
|
|
|
|
|
|
|
Total / Weighted-Average
Loan Portfolio
|
3.0
|
|
$5,444
|
$1,192
|
22%
|
2.9 Years
|
|
|
|
Average month-end balances for the six months ended June 30, 2019
|
||||||
Description
|
|
Assets
|
|
Related debt
|
||||
Commercial mortgage loans, net
|
|
$
|
4,069,457
|
|
|
$
|
2,006,036
|
|
Subordinate loans, net
|
|
1,195,393
|
|
|
—
|
|
|
Three months ended June 30,
|
|
2019 vs 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||||
|
2019
|
|
2018
|
|
|
|
2019
|
|
2018
|
|
|
||||||||||||
Net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income from commercial mortgage loans
|
$
|
77,458
|
|
|
$
|
65,141
|
|
|
$
|
12,317
|
|
|
$
|
155,744
|
|
|
$
|
117,255
|
|
|
$
|
38,489
|
|
Interest income from subordinate loans
|
41,043
|
|
|
34,075
|
|
|
6,968
|
|
|
81,882
|
|
|
67,928
|
|
|
13,954
|
|
||||||
Interest expense
|
(33,511
|
)
|
|
(28,437
|
)
|
|
(5,074
|
)
|
|
(69,806
|
)
|
|
(51,177
|
)
|
|
(18,629
|
)
|
||||||
Net interest income
|
84,990
|
|
|
70,779
|
|
|
14,211
|
|
|
167,820
|
|
|
134,006
|
|
|
33,814
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
General and administrative expenses
|
(6,574
|
)
|
|
(5,652
|
)
|
|
(922
|
)
|
|
(12,725
|
)
|
|
(10,650
|
)
|
|
(2,075
|
)
|
||||||
Management fees to related party
|
(10,259
|
)
|
|
(9,013
|
)
|
|
(1,246
|
)
|
|
(19,872
|
)
|
|
(17,105
|
)
|
|
(2,767
|
)
|
||||||
Total operating expenses
|
(16,833
|
)
|
|
(14,665
|
)
|
|
(2,168
|
)
|
|
(32,597
|
)
|
|
(27,755
|
)
|
|
(4,842
|
)
|
||||||
Other income
|
484
|
|
|
343
|
|
|
141
|
|
|
1,002
|
|
|
546
|
|
|
456
|
|
||||||
Reversal of (Provision for) loan losses and impairments
|
15,000
|
|
|
(5,000
|
)
|
|
20,000
|
|
|
15,000
|
|
|
(5,000
|
)
|
|
20,000
|
|
||||||
Realized loss on investments
|
(12,513
|
)
|
|
—
|
|
|
(12,513
|
)
|
|
(12,513
|
)
|
|
—
|
|
|
(12,513
|
)
|
||||||
Foreign currency loss
|
(7,777
|
)
|
|
(29,649
|
)
|
|
21,872
|
|
|
(883
|
)
|
|
(19,524
|
)
|
|
18,641
|
|
||||||
Gain on foreign currency forwards
|
11,186
|
|
|
33,538
|
|
|
(22,352
|
)
|
|
4,466
|
|
|
22,506
|
|
|
(18,040
|
)
|
||||||
Unrealized loss on interest rate swap
|
(13,113
|
)
|
|
—
|
|
|
(13,113
|
)
|
|
(13,113
|
)
|
|
—
|
|
|
(13,113
|
)
|
||||||
Net income
|
$
|
61,424
|
|
|
$
|
55,346
|
|
|
$
|
6,078
|
|
|
$
|
129,182
|
|
|
$
|
104,779
|
|
|
$
|
24,403
|
|
|
June 30, 2019
|
|
December 31, 2018
|
Debt to 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 (1) |
|
1 to 3
years (1) |
|
3 to 5
years (1) |
|
More
than 5 years (1) |
|
Total
|
||||||||||
Secured debt arrangements (2)
|
$
|
669,174
|
|
|
$
|
935,439
|
|
|
$
|
50,584
|
|
|
$
|
—
|
|
|
$
|
1,655,197
|
|
Senior secured term loan(3)
|
24,880
|
|
|
49,626
|
|
|
49,693
|
|
|
546,417
|
|
|
670,616
|
|
|||||
Convertible senior notes
|
28,750
|
|
|
57,500
|
|
|
594,002
|
|
|
—
|
|
|
680,252
|
|
|||||
Unfunded loan commitments (4)
|
665,703
|
|
|
504,326
|
|
|
22,089
|
|
|
—
|
|
|
1,192,118
|
|
|||||
Total
|
$
|
1,388,507
|
|
|
$
|
1,546,891
|
|
|
$
|
716,368
|
|
|
$
|
546,417
|
|
|
$
|
4,198,183
|
|
(1)
|
Assumes underlying assets are financed through the fully extended maturity date of the secured debt arrangement.
|
(2)
|
Based on the applicable benchmark rates as of June 30, 2019 on the floating rate debt for interest payments due.
|
(3)
|
In connection with the Term Loan B, we entered into an interest rate swap to fix LIBOR at 2.12% effectively fixing our all-in coupon on the Term Loan B at 4.87%.
|
(4)
|
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.
|
|
Three months ended June 30, 2019(1)
|
|
Six months ended June 30, 2019(1)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted-Averages
|
Face
|
|
Price
|
|
Shares
|
|
Face
|
|
Price
|
|
Shares
|
|||||||
Weighted-average diluted shares - GAAP
|
|
|
|
|
174,101,234
|
|
|
|
|
|
|
169,418,177
|
|
|||||
2019 Notes (2)
|
$
|
—
|
|
|
N/A
|
|
—
|
|
|
$
|
13,170
|
|
|
$17.17
|
|
(767,093
|
)
|
|
2022 Notes
|
$
|
345,000
|
|
|
$19.91
|
|
(17,327,970
|
)
|
|
$
|
345,000
|
|
|
$19.91
|
|
(17,327,970
|
)
|
|
2023 Notes
|
$
|
230,000
|
|
|
$20.53
|
|
(11,205,301
|
)
|
|
$
|
230,000
|
|
|
$20.53
|
|
(11,205,301
|
)
|
|
Unvested RSUs
|
—
|
|
|
—
|
|
|
1,846,173
|
|
|
|
|
|
|
1,847,860
|
|
|||
Weighted-average diluted shares - Operating Earnings
|
|
|
|
|
147,414,136
|
|
|
|
|
|
|
141,965,673
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income available to common stockholders
|
$
|
56,505
|
|
|
$
|
48,512
|
|
|
$
|
117,428
|
|
|
$
|
91,110
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Equity-based compensation expense
|
4,294
|
|
|
4,014
|
|
|
8,195
|
|
|
7,356
|
|
||||
Unrealized loss on interest rate swap
|
13,113
|
|
|
—
|
|
|
13,113
|
|
|
—
|
|
||||
Gain on currency forwards
|
(11,186
|
)
|
|
(33,538
|
)
|
|
(4,466
|
)
|
|
(22,506
|
)
|
||||
Foreign currency loss, net
|
7,777
|
|
|
29,649
|
|
|
883
|
|
|
19,524
|
|
||||
Net realized gains (losses) relating to interest income on foreign currency hedges, net (1)
|
325
|
|
|
148
|
|
|
744
|
|
|
(89
|
)
|
||||
Net realized gains relating to forward points on foreign currency hedges, net
|
44
|
|
|
1
|
|
|
2,476
|
|
|
175
|
|
||||
Amortization of the convertible senior notes related to equity reclassification
|
721
|
|
|
1,156
|
|
|
1,630
|
|
|
2,296
|
|
||||
(Reversal of) Provision for loan losses and impairments
|
(15,000
|
)
|
|
5,000
|
|
|
(15,000
|
)
|
|
5,000
|
|
||||
Total adjustments:
|
88
|
|
|
6,430
|
|
|
7,575
|
|
|
11,756
|
|
||||
Operating Earnings
|
$
|
56,593
|
|
|
$
|
54,942
|
|
|
$
|
125,003
|
|
|
$
|
102,866
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Realized loss on investments
|
12,513
|
|
|
—
|
|
|
12,513
|
|
|
—
|
|
||||
Operating Earnings excluding realized loss on investments
|
$
|
69,106
|
|
|
$
|
54,942
|
|
|
$
|
137,516
|
|
|
$
|
102,866
|
|
Diluted Operating Earnings per share of common stock (2)
|
$
|
0.38
|
|
|
$
|
0.44
|
|
|
$
|
0.88
|
|
|
$
|
0.87
|
|
Diluted Operating Earnings excluding realized loss on investments
|
$
|
0.47
|
|
|
$
|
0.44
|
|
|
$
|
0.97
|
|
|
$
|
0.87
|
|
Basic weighted-average shares of common stock outstanding
|
145,567,963
|
|
|
123,019,993
|
|
|
140,117,813
|
|
|
116,651,305
|
|
||||
Weighted-average diluted shares - Operating Earnings
|
147,414,136
|
|
|
124,629,317
|
|
|
141,965,673
|
|
|
118,281,153
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Stockholders' Equity
|
$
|
2,671,399
|
|
|
$
|
2,509,747
|
|
Series B Preferred Stock (Liquidation Preference)
|
(169,260
|
)
|
|
(169,260
|
)
|
||
Series C Preferred Stock (Liquidation Preference)
|
—
|
|
|
(172,500
|
)
|
||
Common Stockholders' Equity
|
$
|
2,502,139
|
|
|
$
|
2,167,987
|
|
Common Stock
|
153,531,597
|
|
|
133,853,565
|
|
||
Book value per share
|
$
|
16.30
|
|
|
$
|
16.20
|
|
|
Book value per share
|
||
Book value per share at December 31, 2018
|
$
|
16.20
|
|
Vesting and issuance of common shares under the LTIPs
|
(0.09
|
)
|
|
Shares issued related to the conversion of the 2019 Notes
|
0.01
|
|
|
Other
|
0.01
|
|
|
Book value per share at March 31, 2019
|
$
|
16.13
|
|
Common stock offering, net of subsequent dividend
|
0.20
|
|
|
Reversal of loan losses and impairments
|
0.02
|
|
|
Gain on foreign currency forwards, net
|
0.02
|
|
|
Unrealized loss on interest rate swap
|
(0.08
|
)
|
|
Other
|
0.01
|
|
|
Book value per share at June 30, 2019
|
$
|
16.30
|
|
•
|
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
|
|
50 basis point decrease
|
||||||||||||||
Currency
|
|
Net floating rate assets subject to interest rate sensitivity
|
|
Increase to net interest income (1)(2)
|
|
Increase to net interest income (per share) (1)(2)
|
|
Decrease to net interest income (1)(2)
|
|
Decrease to net interest income (per share) (1)(2)
|
||||||||||
USD
|
|
$
|
2,798,729
|
|
|
$
|
13,843
|
|
|
$
|
0.09
|
|
|
$
|
(11,676
|
)
|
|
$
|
(0.08
|
)
|
GBP
|
|
291,421
|
|
|
1,441
|
|
|
0.01
|
|
|
(570
|
)
|
|
—
|
|
|||||
EUR
|
|
195,294
|
|
|
212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total:
|
|
$
|
3,285,444
|
|
|
$
|
15,496
|
|
|
$
|
0.10
|
|
|
$
|
(12,246
|
)
|
|
$
|
(0.08
|
)
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
101.INS*
|
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.
|
|
|
|
|
July 24, 2019
|
|
|
|
|
|
|
|
|
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)
|
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
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: July 24, 2019
|
By:
|
|
/s/ Stuart A. Rothstein
|
|
Name:
|
|
Stuart A. Rothstein
|
|
Title:
|
|
President and Chief Executive Officer
|
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;
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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)
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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: July 24, 2019
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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: July 24, 2019
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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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Date: July 24, 2019
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By:
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/s/ Jai Agarwal
|
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Name:
|
|
Jai Agarwal
|
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Title:
|
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Chief Financial Officer, Treasurer and Secretary
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