0001562528us-gaap:FirstMortgageMembernaics:ZZ236116bsprt:Senior104Member2020-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
10-K
(Mark One)
xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 20192020
 OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number: 000-55188
BENEFIT STREET PARTNERS REALTY TRUST, INC.
(Exact name of registrant as specified in its charter) 
Maryland46-1406086
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
9 West 57th Street, Suite 4920, New York, NY10019
(Address of principal executive offices)(Zip Code)
(212) 588-6770 
(Registrant's telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act
Title of Each ClassTrading SymbolsName of exchange on which registered
None
Securities registered pursuant to section 12(g) of the Act:
Common stock, $0.01 par value per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Large accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer x

Smaller reporting company ¨
Emerging growth company¨
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No



There is no established public market for the registrant's shares of common stock. On November 12, 2019,2, 2020, the board of directors of the registrant, , upon the recommendation of the registrant’s external advisor, unanimously approved and established an estimated net asset value (“NAV”) per share of the registrant’s common stock of $18.57.$17.88. The estimated NAV per share is based upon the estimated value of the registrant’s assets less the registrant’s liabilities as of September 30, 2019.2020. For a full description of the methodologies used to value the



registrant’s assets and liabilities in connection with the calculation of the estimated NAV per share, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”
The number of outstanding shares of the registrant's common stock on February 28, 20202021 was 44,385,16244,135,876 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to be delivered to stockholders in connection with the registrant's 20202021 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K/A.10-K. The registrant intends to file its proxy statement within 120 days after its fiscal year end.



BENEFIT STREET PARTNERS REALTY TRUST, INC.


FORM 10-K/A10-K
Year Ended December 31, 20192020





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Explanatory Paragraph
Benefit Street Partners Realty Trust, Inc. is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, originally filed with the Securities and Exchange Commission on March 16, 2020 (the “Original Filing”) to add the correct date of the Report of Independent Registered Accounting Firm ("Report"), which was inadvertently omitted from the Original Filing. We possessed manually signed copies of the Report, which included the Report date, when we filed the Original Filing on March 16, 2020.We are also filing as exhibits currently dated certifications by our Chief Executive Officer and Chief Financial Officer and an updated Consent of Independent Registered Public Accounting Firm. For the convenience of the reader, this Amendment sets forth the Original Filing in its entirety, as amended to reflect this change. No attempt has been made in this Amendment to update other disclosures presented in the Original Filing.


Forward-Looking Statements
Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Benefit Street Partners Realty Trust, Inc. ("we," "our," "us," or the "Company") and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.
Our forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements, and thus our investors should not place undue reliance on these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in this Annual Report, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at http://www.sec.gov. These factors include:
our business and investment strategy;
our ability to make investments in a timely manner or on acceptable terms;
the impact of the COVID-19 pandemic;
current credit market conditions and our ability to obtain long-term financing for our investments in a timely manner and on terms that are consistent with what we project when we invest;
the effect of general market, real estate market, economic and political conditions;conditions, including the recent economic slowdown and dislocation in the global credit markets;
our ability to make scheduled payments on our debt obligations;
our ability to generate sufficient cash flows to make distributions to our stockholders;
our ability to generate sufficient debt and equity capital to fund additional investments;
our ability to refinance our existing financing arrangements;
the degree and nature of our competition;
the availability of qualified personnel;
we may be deemed to be an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and thus subject to regulation under the Investment Company Act; and
our ability to maintain our qualification as a real estate investment trust ("REIT").
All forward-looking statements should be read in light of the risks identified in Part I, Item 1A of this Annual Report on Form 10-K.





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PART I
Item 1. Business
Benefit Street Partners Realty Trust, Inc. (the “Company”) is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt investments secured by properties located within and outside the United States. The Company was incorporated in Maryland on November 15, 2012 and commenced business operations on May 14, 2013. We made a tax election to be treated as a real estate investment trust (a "REIT") for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2013. We believe that we have qualified as a REIT and we intend to continue to meet the requirements for qualification and taxation as a REIT. Substantially all of our business is conducted through Benefit Street Partners Realty Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. We are the sole general partner and directly or indirectly hold all of the units of limited partner interests in the OP. In addition, the Company, through a subsidiary which is treated as a taxable REIT subsidiary (a “TRS”), is indirectly subject to U.S. federal, state and local income taxes.
The Company has no direct employees. Benefit Street Partners L.L.C. serves as our advisor ("Advisor") pursuant to an amended and restated advisory agreement, executed on January 19, 2018 (the "Advisory Agreement"). The Advisor, an investment adviser registered with the SEC, is a credit-focused alternative asset management firm.
Established in 2008, our Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private/opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor manages the Company's affairs on a day-to-day basis. The Advisor receives compensation fees and reimbursements for services related to the investment and management of the Company's assets and the operations of the Company. The advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as "Franklin Templeton”.
The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") securitization transactions.
The Company also invests in commercial real estate securities.securities and properties. Real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs"). Property investments, other than properties owned in connection with a foreclosure, are generally subject to triple net leases.
Investment Objectives
We plan to implement policies and strategies to achieve our primary investment objectives:
to pay attractive and stable cash distributions to stockholders; and
to preserve and return stockholders’ invested capital.
Investment Strategies and Policies
We have four investment strategies. One strategy is to originate, acquire and manage a diversified portfolio of commercial real estate debt, including first mortgage loans, subordinate loans, mezzanine loans and participations in such loans. We expect that our portfolio of debt investments will be secured by real estate located within and outside the United States and diversified by property type and geographic location. The second strategy is to invest in commercial real estate securities, such as CMBS, senior unsecured debt of publicly-traded REITs and CDO notes. The third strategy is to originate conduit loans and sell them through our TRS business into CMBS securitization transactions. The fourth strategy represents real estate acquired by the Company through foreclosure and deed in lieu of foreclosure, and purchases of real estate that generally are, or purchase.will be, subject to a triple net lease.
We will seek to create and maintain a portfolio of commercial real estate investments that generate stable income to enable us to pay attractive and consistent cash distributions to our stockholders. Our focus on originating and acquiring commercial real estate debt instruments emphasizes the payment of current returns to investors and preservation of invested capital as our primary investment objectives.
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Commercial Real Estate Debt
We originate, fund, acquire and structure commercial real estate debt, including first mortgage loans, mezzanine loans, bridge loans, and other loans related to commercial real estate. We may also acquire some equity participations in the underlying collateral of commercial real estate debt. We structure, underwrite, and originate most of our investments. We use conservative underwriting criteria to focus on risk adjusted returns based on several factors, which may include the leverage point, debt service coverage and sensitivity, lease sustainability studies, market and economic conditions, quality of the underlying collateral and location, reputation and track record of the borrower, and a clear exit or refinancing plan for the borrower. Our underwriting process involves comprehensive financial, structural, operational, and legal due diligence to assess

any risks in connection with making such investments so that we can optimize pricing and structuring. By originating loans directly, we are able to structure and underwrite loans that satisfy our standards, establish a direct relationship with the borrower, and utilize our own documentation. Described below are some of the types of loans we may originate or acquire. In addition, although we generally prefer the benefits of new origination, market conditions can create situations where holders of commercial real estate debt may be in distress and are therefore willing to sell at prices that compensate the buyer for the lack of control typically associated with directly structured investments.
First Mortgage Loans
We primarily focus on first mortgage loans. First mortgage loans generally finance the acquisition, refinancing or rehabilitation of commercial real estate. First mortgage loans may be either short (one-to-five years) or long (up to ten years) term, may be fixed or floating rate, and are predominantly current-pay loans. We may originate or acquire current-pay first mortgage loans backed by properties that fit our investment strategy. We may selectively syndicate portions of these loans, including senior or junior participations that will effectively provide permanent financing or optimize returns which may include retained origination fees.
First mortgage loans typically provide for a higher recovery rate and lower defaults than other debt positions due to the lender's favorable control position, which at times can include control of the entire capital structure. Because of these attributes, this type of investment typically receives favorable treatment from third-party rating agencies and financing sources, which should increase the liquidity of these investments. However, these loans typically generate lower returns than subordinate debt, such as subordinate loans and mezzanine loans, commonly referred to as B-notes.
B-notes
B-notes consist of subordinate mortgage loans, including structurally subordinated first mortgage loans and junior participations in first mortgage loans or participations in these types of assets. Like first mortgage loans, these loans generally finance the acquisition, refinancing, rehabilitation or construction of commercial real estate. Subordinated mortgage loans or B-notes may be either short (one-to-five years) or long (up to ten years) term, may be fixed or floating rate, and are predominantly current-pay loans. We may originate or acquire current-pay subordinated mortgage loans or B-notes backed by high quality properties that fit our investment strategy. We may create subordinated mortgage loans by tranching our directly originated first mortgage loans generally through syndications of senior first mortgages or buy such assets directly from third party originators. Due to the limited opportunities in this part of the capital structure, we believe there are certain situations that allow us to directly originate or to buy subordinated mortgage investments from third parties on favorable terms.
Bridge Loans
We may offer bridge financing products to borrowers who are typically seeking short-term capital to be used in an acquisition, development or refinancing of a given property. From the borrower’s perspective, shorter term bridge financing is advantageous because it allows time to improve the property value through repositioning without encumbering it with restrictive long-term debt. The terms of these loans generally do not exceed three years.
Mezzanine Loans
Mezzanine loans are secured by one or more direct or indirect ownership interests in an entity that directly or indirectly owns commercial real estate and generally finance the acquisition, refinancing, rehabilitation or construction of commercial real estate. Mezzanine loans may be either short (one-to-five years) or long (up to ten years) term and may be fixed or floating rate. We may originate or acquire mezzanine loans backed by properties that fit our investment strategy. We may own such mezzanine loans directly or we may hold a participation in a mezzanine loan or a sub-participation in a mezzanine loan. These loans are predominantly current-pay loans (although there may be a portion of the interest that accrues) and may provide for participation in the value or cash flow appreciation of the underlying property as described below. With the credit market disruption and resulting dearth of capital available in this part of the capital structure, we believe that the opportunities to both directly originate and to buy mezzanine loans from third parties on favorable terms will continue to be attractive.
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Equity Participations or “Kickers”
We may pursue equity participation opportunities in connection with our commercial real estate debt originations if we believe that the risk-reward characteristics of the loan merit additional upside participation related to the potential appreciation in value of the underlying assets securing the loan. Equity participations can be paid in the form of additional interest, exit fees, percentage of sharing in refinance or resale proceeds or warrants in the borrower. Equity participation can also take the form of a conversion feature, sometimes referred to as a "kicker," which permits the lender to convert a loan or preferred equity investment into common equity in the borrower at a negotiated premium to the current net asset value of the borrower. We expect to generate additional revenues from these equity participations as a result of excess cash flows being distributed or as appreciated properties are sold or refinanced.

Commercial Real Estate Securities
In addition to our focus on origination of and investments in commercial real estate debt, we may also acquire commercial real estate securities, such as CMBS, unsecured REIT debt, CDO notes, and equity investments in entities that own commercial real estate.
CMBS
CMBS are securities that are collateralized by, or evidence ownership interests in, a single commercial mortgage loan or a partial or entire pool of mortgage loans secured by commercial properties. CMBS are generally pass-through certificates that represent beneficial ownership interests in common law trusts whose assets consist of defined portfolios of one or more commercial mortgage loans. They are typically issued in multiple tranches whereby the more senior classes are entitled to priority distributions of specified principal and interest payments from the trust’s underlying assets. The senior classes are often securities which, if rated, would have ratings ranging from low investment grade “BBB-” to higher investment grades “A,” “AA” or “AAA.” The junior, subordinated classes typically would include one or more non-investment grade classes which, if rated, would have ratings below investment grade “BBB.” Losses and other shortfalls from expected amounts to be received on the mortgage pool are borne first by the most subordinate classes, which receive payments only after the more senior classes have received all principal and/or interest to which they are entitled. We may invest in senior or subordinated, investment grade or non-investment grade CMBS, as well as unrated CMBS.
Unsecured Publicly-Traded REIT Debt Securities
We may also choose to acquire senior unsecured debt of publicly-traded equity REITs that acquire and hold real estate. Publicly-traded REITs may own large, diversified pools of commercial real estate properties or they may focus on a specific type of property, such as shopping centers, office buildings, multifamily properties and industrial warehouses. Publicly-traded REITs typically employ moderate leverage. Corporate bonds issued by these types of REITs are usually rated investment grade and benefit from strong covenant protection.
CDO Notes
CDOs are multiple class debt notes, secured by pools of assets, such as CMBS, mezzanine loans, and unsecured REIT debt. Like typical securitization structures, in a CDO, the assets are pledged to a trustee for the benefit of the holders of the bonds. CDOs often have reinvestment periods that typically last for five years, during which time, proceeds from the sale of a collateral asset may be invested in substitute collateral. Upon termination of the reinvestment period, the static pool functions very similarly to a CMBS securitization where repayment of principal allows for redemption of bonds sequentially.
Commercial Real Estate Equity Investments
We may acquire: (i) equity interests (including preferred equity) in an entity (including, without limitation, a partnership or a limited liability company) that is an owner of commercial real property (or in an entity operating or controlling commercial real property, directly or through affiliates), which may be structured to receive a priority return or is senior to the owner's equity (in the case of preferred equity); (ii) certain strategic joint venture opportunities where the risk-return and potential upside through sharing in asset or platform appreciation is compelling; and (iii) private issuances of equity securities (including preferred equity securities) of public companies. Our commercial real estate equity investments may or may not have a scheduled maturity and are expected to be of longer duration (five-to-ten year terms) than our typical portfolio investment. Such investments are expected to be fixed rate (if they have a stated investment rate) and may have accrual structures and provide other distributions or equity participations in overall returns above negotiated levels.
Conduit Loans
The Company originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions at a profit. The Conduit loans are typically fixed-rate commercial real estate loans and are long (up to ten years)
term, and are predominantly current-pay loans.
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Other Possible Investments
Although we expect that most of our investments will be of the types described above, we may make other investments. We may invest in whatever types of interests in real estate-related assets that we believe are in our best interest which may include the commercial real property underlying our debt investments as a result of a loan workout, foreclosure or similar circumstances. Although we can purchase any type of real estate-related assets, our charter does limit our ability to make certain types of investments.
Investment Process
Our Advisor has the authority to make all the decisions regarding our investments consistent with the investment guidelines and borrowing policies approved by our board of directors and subject to the direction and oversight of our board of directors. With respect to investments in commercial real estate debt, our board of directors has adopted investment guidelines

that our Advisor must follow when acquiring such assets on our behalf without the approval of our board of directors. We will not, however, purchase assets in which our Advisor, any of our directors or any of their affiliates has an interest without a determination by a majority of our directors (including a majority of the independent directors) not otherwise interested in the transaction that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the asset to the affiliated seller, unless there is substantial justification for the excess amount and such excess is reasonable. Our investment guidelines and borrowing policies may be altered by a majority of our directors without approval of our stockholders. Our Advisor may not alter our investment guidelines or borrowing policies without the approval of a majority of our directors, including a majority of our independent directors.
Borrowing Strategies and Policies
In addition to raising capital through private placements of our equity securities, ourOur financing strategy primarily includes the use of secured repurchase agreement facilities for loans, securities and securitizations. We have also raised capital through private placements of our equity securities. In addition to our current mix of financing sources, we may also access additional forms of financings, including credit facilities, and public or private secured and unsecured debt issuances by us or our subsidiaries.
We expect to use additional debt financing as a source of capital. We intend to employ reasonable levels of borrowing in order to provide more cash available for investment and to generate improved returns. We believe that careful use of leverage will help us to achieve our diversification goals and potentially enhance the returns on our investments. Our board of directors reviews our aggregate borrowings at least quarterly.
Income Taxes
We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013. In general, as a REIT, if we meet certain organizational and operational requirements and distribute at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders in a year, we will not be subject to U.S. federal income tax to the extent of the income that we distribute. We believe that we currently qualify and we intend to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). If we fail to qualify as a REIT in any taxable year and statutory relief provisions were not to apply, we will be subject to U.S. federal income tax on our income at regular corporate tax rates for the year in which we do not qualify and the succeeding four years. Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and property and U.S. federal income and excise taxes on our undistributed income.
We pay income taxes on our Conduit segment, which is conducted by our wholly-owned TRS. The income taxes on the Conduit segment are paid at the U.S. federal and applicable state levels.
Competition
Our net income depends, in large part, on our ability to originate investments that provide returns in excess of our borrowing cost. In originating these investments, we compete with other mortgage REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, private funds, other lenders, governmental bodies, and other entities, many of which have greater financial resources and lower costs of capital available to them than we have. In addition, there are numerous mortgage REITs with asset acquisition objectives similar to ours, and others may be organized in the future, which may increase competition for the investments suitable for us. Competitive variables include market presence and visibility, size of loans offered and underwriting standards. To the extent that a competitor is willing to risk larger amounts of capital in a particular transaction or to employ more liberal underwriting standards when evaluating potential loans than we are, our investment volume and profit margins for our investment portfolio could be impacted. Our competitors may also be willing to accept lower returns on their investments and may succeed in buying or underwriting the assets that we have targeted. Although we believe that we are well positioned to compete effectively in each facet of our business, there is enormous competition in our market sector and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.
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Employees
As of December 31, 2019,2020, we had no direct employees. Our executive officers serve as officers of our Advisor and are employed by an affiliate of our Advisor. The employees of the Advisor and other affiliates of the Advisor perform a full range of real estate services for us, including origination, acquisitions, accounting, legal, asset management, wholesale brokerage, and investor relations services. We are dependent on these affiliates for services that are essential to us, including asset acquisition decisions, and other general administrative responsibilities. In the event that any of these companies were unable to provide these services to us, we would be required to provide such services ourselves or obtain such services from other sources.

Government Regulation
Our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (i) regulate credit-granting activities; (ii) establish maximum interest rates, finance charges and other charges; (iii) require disclosures to customers; (iv) govern secured transactions; and (v) set collection, foreclosure, repossession and claims-handling procedures and other trade practices. We intend to conduct our business so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act.
In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In recent years, legislators in the United States and in other countries have said that greater regulation of financial services firms is needed, particularly in areas such as risk management, leverage, and disclosure. While we expect that additional new regulations in these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, or results of operations or prospects.
Impact of COVID-19
Refer to “Covid-19 Pandemic” in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for a discussion of the impact COVID-19 is having on our business and results of operations and financial condition.
Available Information
We electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, and proxy statements, with the SEC. We also filed with the SEC a registration statement in connection with our dividend reinvestment plan ("DRIP") securities offerings. The SEC maintains an internet address at www.sec.gov that contains reports, proxy statements and information statements, and other information, which may be obtained free of charge. In addition, copies of our filings with the SEC may be obtained from the website maintained for us at www.bsprealtytrust.com. Access to these filings is free of charge. We are not incorporating our website or any information from the website into this Form 10-K.
Item 1A. Risk Factors
Risks Related to an Investment in Benefit Street Partners Realty Trust, Inc.
The ongoing COVID-19 pandemic is materially and adversely affecting our financial condition, operating results and cash flows and the operations and financial performance of many of the borrowers underlying our real estate-related assets, and we expect the adverse impacts will continue in the future.
The COVID-19 pandemic has had, and another pandemic or public health crisis in the future could have, repercussions across domestic and global economies and financial markets. The global impact of the COVID-19 outbreak evolved rapidly and many governmental authorities, including state and local governments in regions in which our borrowers own properties, have reacted by instituting government restrictions, border closings, quarantines, “shelter-in-place” orders and “social distancing” guidelines which have forced many of our borrowers to suspend or significantly restrict their business activities, and has resulted in a dramatic increase in national unemployment and corporate bankruptcies, with particularly adverse impacts on the retail, including restaurants, and hospitality sectors.
The COVID-19 pandemic is materially and adversely affecting our financial condition, operating results and cash flows and the operations and financial performance of many of the borrowers underlying our real estate-related assets, and we expect the adverse impacts will continue in the future. Specifically, the COVID-19 pandemic has:
significantly disrupted the financial markets for the assets in our real estate securities portfolio, resulting in significant decreases in market values for these assets and significant market volatility. This has resulted in margin calls from our lenders, which we have thus far satisfied, and could result in future margin calls which, if not satisfied, could result in the liquidation of some of our assets at significant losses.
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resulted in a decline in the value of commercial real estate generally, and significant declines in certain assets classes, including hospitality and retail, which has negatively impacted the value of our commercial mortgage loan portfolio, and could continue to negatively impact the value in the future, potentially materially.
negatively impacted the financial stability of many of our borrowers, which has and is expected to continue to result in an increase in the number of our borrowers who become delinquent or default on their loans, or who seek to defer payment on or to amend the terms of their loans. Borrowers in the hospitality and retail sector have been particularly adversely impacted.
increased the cost and decreased the availability of debt capital, including as a result of dislocations in the commercial mortgage-backed securities market, which has currently made raising capital through CDO or CLO securitizations impracticable, and as a result of lenders permitting significantly lower advance rates on our repurchase agreements.
as a result of the decline in the market value of the loans in our CDOs and CLOs, we may not meet certain interest coverage tests, over-collateralization coverage tests or other tests that could result in a change in the priority of distributions, which could result in the reduction or elimination of distributions to the subordinate debt and equity tranches we own until the tests have been met or certain senior classes of securities have been paid in full. Accordingly, we may experience a reduction in our cash flow from those interests which may adversely affect our liquidity and therefore our ability to fund our operations or address maturing liabilities on a timely basis.
resulted in a general decline in business activity which if continued will result in a decline in demand for mortgage financing, which could adversely affect our ability to make new investments or to redeploy the proceeds from repayments of our existing investments.
The extent to which the COVID-19 pandemic impacts our or our borrowers’ operations will depend on future developments which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, including any resurgences, the speed and effectiveness of vaccine and treatment developments and the direct and indirect economic effects of the pandemic and containment measures. The inability of our borrowers to meet their loan obligations and/or borrowers filing for bankruptcy protection would reduce our cash flows, which would impact our ability to pay dividends to our stockholders. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Moreover, many risk factors set forth in this Annual Report on Form 10-K should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic.
We may be unable to maintain or increase cash distributions over time, or may decide to reduce the amount of distributions for business reasons.
There are many factors that can affect the amount and timing of cash distributions to stockholders. The amount of cash available for distributions is affected by many factors, such as the cash provided by the Company's investments and obligations to repay indebtedness as well as many other variables. There is no assurance that the Company will be able to pay or maintain the current level of distributions or that distributions will increase over time. In certain prior periods, distributions have been in excess of cash flows from operations. Distributions in excess of earnings will decrease the book value and NAV per share of common stock. The Company cannot give any assurance that returns from the investments will be sufficient to maintain or increase cash available for distributions to stockholders. Actual results may differ significantly from the assumptions used by the board of directors in establishing the distribution rate to stockholders. The Company may not have sufficient cash from operations to make a distribution required to qualify for or maintain our REIT status, which may materially adversely affect the value of common stock or Series A Convertible Preferred Stock (the “Series A Preferred Stock”) or Series C Convertible Preferred Stock (the “Series C Preferred Stock”), and together with the Series A Preferred Stock, (the "Preferred Stock").
No established trading market for our shares currently exists, and as a result, it will be difficult for you to sell our shares. If our shares are listed they may trade below our estimated NAV per share or our GAAP book value per share.
The Company's charter does not require the board of directors to seek stockholder approval to liquidate our assets by a specified date, nor does our charter require us to list our shares for trading on a national securities exchange by a specified date or otherwise pursue a transaction to provide liquidity to our stockholders. There is no established trading market for our shares and our shares are not currently listed on a national securities exchange. Until our shares are listed, if ever, our stockholders may have difficulty selling their shares. If our shares are eventually listed, they may trade at prices significantly below our estimated NAV per share and our most recent GAAP book value due to, among other things, significant selling pressure from legacy stockholders that had previously been unable to sell or the market perception that such selling pressure will occur. To address this risk the Company could delay the ability of legacy stockholders to sell all of their shares upon a successful listing. Because of the illiquid nature of our shares, investors should purchase our shares only as a long-term investment and be prepared to hold them for an indefinite period of time.
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Our share repurchase program (the "SRP"), which is subject to numerous restrictions, may be canceled at any time and should not be relied upon as a means of liquidity.
The Company has a SRP that may enable investors to sell their shares to us in limited circumstances. Share repurchases are made at the sole discretion of the board of directors. In its sole discretion, the board of directors could amend, suspend or terminate our SRP upon 30 days prior written notice to stockholders. Further, the SRP includes numerous restrictions that would limit the ability to sell shares. For example, the SRP has historically been limited to the proceeds from our DRIP which has frequently resulted in us not satisfying all SRP requests for a given semester. Due to the foregoing, our SRP should not be relied upon as a means of liquidity.
If the Advisor loses or is unable to obtain key personnel, our ability to implement our investment strategies could be delayed or hindered, which could adversely affect our ability to make distributions and the value of our common stock.
The Company's success depends to a significant degree upon the contributions of certain of the executive officers and other key personnel of the Advisor, each of whom would be difficult to replace.The Company cannot guarantee that all, or any particular officer or employee of the Advisor, will remain associated with us and/or the Advisor. If any of the Company's key personnel were to cease their employment with the Advisor, operating results could suffer. Further, the Company does not intend to separately maintain key person life insurance on any person. We believe that our future success depends, in large part, upon the Advisor’s ability to hire and retain highly skilled managerial, operational and marketing personnel.

Competition for such personnel is intense, and the Company cannot assure you that the Advisor will be successful in attracting and retaining such skilled personnel. If the Advisor loses or is unable to obtain the services of key personnel, our ability to implement our investment strategies could be delayed or hindered, and the value of your investment may decline.
Our business could suffer in the event our Advisor or any other party that provides us with services essential to our operations experiences system failures or cyber-incidents or a deficiency in cybersecurity.
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for the internal information technology systems of our Advisor and other parties that provide us with services essential to our operations, these systems are vulnerable to damage from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business.
A cyber-incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of information resources. More specifically, a cyber-incident is an intentional attack or an unintentional event that can result in third parties gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information. As reliance on technology in our industry has increased, so have the risks posed to the systems of our Advisor and other parties that provide us with services essential to our operations, both internal and outsourced. In addition, the risk of a cyber-incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted attacks and intrusions evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected.
The remediation costs and lost revenues experienced by a victim of a cyber-incident may be significant and significant resources may be required to repair system damage, protect against the threat of future security breaches or to alleviate problems, including reputational harm, loss of revenues and litigation, caused by any breaches. In addition, a security breach or other significant disruption involving the IT networks and related systems of our Advisor or any other party that provides us with services essential to our operations could:
result in misstated financial reports, violations of loan covenants, missed reporting deadlines and/or missed permitting deadlines;
affect our ability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;
result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information, which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes;
require significant management attention and resources to remedy any damages that result;
subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; or
adversely impact our reputation among our borrowers and investors generally.
Although the Advisor and other parties that provide us with services essential to our operations intend to continue to implement industry-standard security measures, there can be no assurance that those measures will be sufficient, and any material adverse effect experienced by the Advisor and other parties that provide us with services essential to our operations could, in turn, have an adverse impact on us.
Risks Related to Conflicts of Interest
The Advisor faces conflicts of interest relating to purchasing commercial real estate-related investments, and such conflicts may not be resolved in our favor, which could adversely affect our investment opportunities.
We rely on the Advisor and the executive officers and other key real estate professionals at our Advisor to identify suitable investment opportunities for us. Although there are restrictions in the Advisory Agreement we have entered into with the Advisor with respect to the Advisor’s ability to manage another REIT that competes with us, or to provide any services related to fixed-rate conduit lending to another person, the Advisor and its employees are not otherwise restricted from engaging in investment and investment management activities unrelated to us. Some investment opportunities that are suitable for us may also be suitable for other investment vehicles managed by the Advisor or its affiliates. Thus, the executive officers and real estate professionals of the Advisor could direct attractive investment opportunities to other entities or investors. Such events could result in us investing in assets that provide less attractive returns, which may reduce our ability to make distributions.

The Advisor and its employees face competing demands relating to their time, and this may cause our operating results to suffer.
The Advisor and its employees are engaged in investment and investment management activities unrelated to us. Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. If this occurs, the returns on our investments may suffer.
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Risks Related to Our Corporate Structure
The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders.
The Company's charter, with certain exceptions, authorizes the board of directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by the board of directors, no person or entity may own more than 7.9% in value of the aggregate of our outstanding shares of stock or more than 7.9% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock determined after applying certain rules of attribution. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our common stock.
The Company's charter permits the boardCertain provisions of directors to issue stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
The Company's charter permits our board of directors to issue up to 1,000,000,000 shares of stock. In addition, our board of directors, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue. Our board of directors may classify or reclassify any unissued common stock or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption of any such stock. For example, the board of directors has authorized our two series of Preferred Stock, which have terms and conditions that have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock, and the board of directors may authorize issuance of additional shares or series of preferred stock in the future. Preferred StockMaryland law could also have the effect of delaying, deferring or preventinginhibit a change in control of our Company.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us including an extraordinary transaction (such asor of impeding a merger, tender offer or salechange in control under circumstances that otherwise could provide the holders of all or substantially all our assets) that might provide a premium price for holdersshares of our common stock.stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:
Maryland law prohibits“business combination” provisions that, subject to limitations, prohibit certain business combinations which may make it more difficult forbetween us to be acquired and may limit our stockholders' ability to exit the investment.
Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:
“interested stockholder” (defined generally as any person who beneficially owns directly or indirectly, 10% or more of theour then outstanding voting power of the corporation’s outstanding voting stock;our shares or
an affiliate or associate of the corporationours who, at any time within the two-year period prior to the date in question, was the beneficial owner directly or indirectly, of 10% or more of the voting power of theour then outstanding stock ofvoting shares) or an affiliate thereof for five years after the corporation.
A person is notmost recent date on which the stockholder becomes an interested stockholder, under the statute if the board of directors approved in advance the transaction by which he or she otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors mayand thereafter imposes special appraisal rights and special stockholder voting requirements on these combinations; and
“control share” provisions that provide that its approval is subject to compliance, at or after the time“control shares” of approval,our company (defined as shares which, when aggregated with any terms and conditions determinedother shares controlled by the boardstockholder, entitle the stockholder to exercise one of directors.
Afterthree increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the five-year prohibition, any business combination betweendirect or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the Maryland corporation and an interested stockholder generally must be recommendedextent approved by the board of directors of the corporation and approvedour stockholders by the affirmative vote of at least:

80%least two-thirds of all the votes entitled to be cast by holders of outstanding shares of voting stock ofon the corporation; andmatter, excluding all interested shares.
two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The business combination statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute,MGCL, our board of directors has exempted any business combination involving our Advisor or any affiliate of our Advisor. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and our Advisor or any affiliate of our Advisor. As a result, our Advisor and any affiliate of our Advisor may be able to enter into business combinations with us that may not be in
In addition, the best interest of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute. The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
Maryland law limits the ability of a third-party to buy a large stake in us and exercise voting power in electing directors, which may discourage a takeover that could otherwise result in a premium price to our stockholders.
The Maryland Control Share Acquisition Act provides that holders of “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by stockholders by a vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by the acquirer, by officers or by employees who are directors of the corporation, are excluded from shares entitled to vote on the matter. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer can exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within specified ranges of voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means the acquisition of issued and outstanding control shares.
The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction, or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation.
The Company's bylaws contain a provision exempting from the Control Share Acquisition Actcontrol share provisions any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future.
In addition, the “unsolicited takeover” provisions of Title 3, Subtitle 8 of the MGCL permit the Board, without shareholder approval and regardless of what is currently provided in the charter or bylaws, to implement certain takeover defenses, including adopting a classified board or increasing the vote required to remove a director. Such takeover defenses may have the effect of inhibiting a third-party from making an acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise could provide our common stockholders with the opportunity to realize a premium over the then-current market price.
The value of our common stock may be reduced if we are required to register as an investment company under the Investment Company Act.
We are not registered, and do not intend to register ourselves, our operating partnership or any of our subsidiaries, as an investment company under the Investment Company Act. If we become obligated to register ourselves, our operating partnership or any of our subsidiaries as an investment company, the registered entity would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:
things, limitations on capital structure;
structure and restrictions on specified investments;investments.
prohibitions on transactions with affiliates; and
compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.
The Company conducts, and intend to continue to conduct, our operations, directly and through wholly or majority-owned subsidiaries, so that we, our operating partnership and each of our subsidiaries are exempt from registration as an investment company under the Investment Company Act. Under Section 3(a)(1)(A) of the Investment Company Act, a company is an “investment company” if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an “investment company” if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis. “Investment securities” excludes (A) U.S. Government securities, (B) securities issued by employees’ securities companies, and (C)

securities issued by majority-owned subsidiaries which (i) are not investment companies, and (ii) are not relying on the exception from the definition of investment company under Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
The Company expects that we will not fall under the definition of, and will therefore not be required to register as, an investment company. We intend to make investments and conduct our operations so that we are not required to register as an investment company. We are organized as a holding company that conducts business primarily through the operating partnership. Both the Company and the operating partnership intend to conduct operations so that each complies with the 40% test. The securities issued to the operating partnership by any wholly-owned or majority-owned subsidiaries that we may form in the future that are excepted from the definition of “investment company” based on Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities the operating partnership may own, may not have a value in excess of 40% of the value of the operating partnership's total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We will monitor the Company’s and the operating partnership’s holdings to support continuing and ongoing compliance with these tests but we may be unsuccessful and could fail to comply. We believe neither the Company nor the operating partnership will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because neither the Company nor the operating partnership will engage primarily or hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, through the operating partnership's wholly-owned or majority-owned subsidiaries, the Company and the operating partnership are primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring mortgages and other interests in real estate.
The Company expects that most of our investments will be held by wholly-owned or majority-owned subsidiaries of the operating partnership and that most of these subsidiaries will rely on the exception from the definition of an investment company under Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion generally requires that at least 55% of a subsidiary's portfolio be comprised of qualifying real estate assets and at least 80% of its portfolio be comprised of qualifying real estate assets and real estate-related assets (and no more than 20% comprised of miscellaneous assets). For purposes of the exclusions provided by Sections 3(c)(5)(C), we will classify our investments based in large measure on no-action letters issued by the SEC staff and other SEC interpretive guidance and, in the absence of SEC guidance, on our view of what constitutes a qualifying real estate asset and a real estate-related asset. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than twenty years ago. Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, mezzanine loans, joint venture investments and the equity securities of other entities may not constitute qualifying real estate investments, and therefore, investments in these types of assets may be limited. The SEC or its staff may not concur with our classification of our assets. Future revisions to the Investment Company Act or further guidance from the SEC or its staff may cause us to lose our exclusion from the definition of investment company or force us to re-evaluate our portfolio and our investment strategy. Such changes may prevent us from operating our business successfully.
The Company may in the future organize special purpose subsidiaries of the operating partnership that will borrow under or participate in government sponsored incentive programs. We expect that some of these subsidiaries will rely on Section 3(c)(7) for their Investment Company Act exclusion and, therefore, the operating partnership's interest in each of these subsidiaries would constitute an “investment security” for purposes of determining whether the operating partnership passes the 40% test. Also, we may in the future organize one or more subsidiaries that seek to rely on the Investment Company Act exclusion provided to certain structured financing vehicles by Rule 3a-7. Any such subsidiary would need to be structured to comply with any guidance on the restrictions contained in Rule 3a-7 that may be issued by the SEC or its staff. In certain circumstances, compliance with Rule 3a-7 may require, among other things, that the indenture governing the subsidiary include limitations on the types of assets the subsidiary may sell or acquire out of the proceeds of assets that mature, are refinanced or otherwise sold, on the period of time during which such transactions may occur, and on the amount of transactions that may occur. In 2011, the SEC also solicited public comment on issues relating to Rule 3a-7. Accordingly, more specific or different guidance regarding Rule 3a-7 that may be published by the SEC or its staff may affect our ability to rely upon this rule. We expect that the aggregate value of the operating partnership's interests in subsidiaries that seek to rely on Rule 3a-7 will comprise less than 20% of the operating partnership's (and, therefore, the Company's) total assets on an unconsolidated basis.
In the event that the company, or the operating partnership, were to acquire assets that could make either entity fall within the definition of investment company under Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act, we believe that we may still qualify for an exclusion from registration pursuant to Section 3(c)(6). Although the SEC staff has issued little interpretive guidance with respect to Section 3(c)(6), we believe that the Company and the operating partnership may rely on Section 3(c)(6) if 55% of the assets of the operating partnership consist of, and at least 55% of the income of the operating partnership is derived from, qualifying real estate assets owned by wholly-owned or majority-owned subsidiaries of the operating partnership.

To ensure that neither the Company nor any of its subsidiaries, including the operating partnership, are required to register as an investment company, each entity may be unable to sell assets that it would otherwise want to sell and may need to sell assets that it would otherwise wish to retain. In addition, the Company, the operating partnership or its subsidiaries may be required to acquire additional income- or loss-generating assets that we might not otherwise acquire or forgo opportunities to acquire interests in companies that we would otherwise want to acquire. Although we monitor the portfolio of the Company, the operating partnership and its subsidiaries periodically and prior to each acquisition and disposition, any of these entities may not be able to maintain an exclusion from the definition of investment company. If the Company, the operating partnership or any subsidiary is required to register as an investment company but fails to do so, the unregistered entity would be prohibited from engaging in our business, and criminal and civil actions could be brought against such entity. In addition, the contracts of such entity would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of the entity and liquidate its business.
The board
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Table of directors may change our investment policies without stockholder approval, which could alter the nature of our portfolio.Contents
Our investment policies may change over time. The methods of implementing our investment policies also may vary as the commercial debt markets change, new real estate development trends emerge and new investment techniques are developed. Our investment policies, the methods for their implementation, and our other objectives, policies and procedures may be altered by our board of directors without the approval of our stockholders. As a result, the nature of our portfolio could change without our stockholders' consent.
Because of our holding company structure, we depend on our operating partnership and its subsidiaries for cash flow and we will be structurally subordinated in right of payment to the obligations of such operating subsidiary and its subsidiaries, which could adversely affect our ability to make distributions.
We are a holding company with no business operations of our own. Our only significant asset is and will be the general partnership interests of our operating partnership. We conduct, and intend to continue to conduct, all of our business operations through our operating partnership. Accordingly, our only source of cash to pay our obligations is distributions from our operating partnership and its subsidiaries of their net earnings and cash flows. There can be no assurance that our operating partnership or its subsidiaries will be able to, or be permitted to, make distributions to us that will enable us to make distributions to our stockholders from cash flows from operations. Each of our operating partnership’s subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from such entities. In addition, because we are a holding company, stockholders' claims will be structurally subordinated to all existing and future liabilities and obligations of our operating partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be able to satisfy stockholders' claims only after all of our and our operating partnerships and its subsidiaries liabilities and obligations have been paid in full.
Although our Advisor is responsible for calculating our estimated per share NAV, our Advisor will consider independent valuations of our investments, the accuracy of which our Advisor will not independently verify.
In calculating our estimated per share NAV, our Advisor will include the net value of our commercial real estate debt and other commercial real estate-related investments, taking into consideration valuations of investments obtained from our independent valuer. Although our Advisor is responsible for the accuracy of the NAV calculation and will provide our independent valuer with our valuation guidelines, which have been approved by our board of directors, our Advisor will not independently verify the appraised value of our investments. As a result, the appraised value of a particular investment may be greater or less than its potential realizable value, which would cause our estimated NAV to be greater or less than the potential realizable NAV.
The estimated per share NAV may significantly change if the appraised values of our investments materially change.
The Company expects that our investments will be appraised annually for purposes of establishing our estimated per share NAV. To the extent conditions specific to the investment, or investment conditions generally have changed since the prior appraisal, the estimated appraised value of an investment may decrease significantly.

The estimated per share NAV that we published does not reflect changes in our NAV since such date and does not represent the actual value of your shares on any given day.
The Company expects that our investments will only be valued annually for purposes of establishing our estimated per share NAV. The Company may experience events affecting our investments that may have a material impact on our NAV. For example, if a material borrower becomes insolvent or if investment conditions deteriorate generally, the value of an investment may materially change. Our NAV per share as published will not reflect such subsequent events. As a result, the NAV per share published after the announcement of a material event may differ significantly from our actual NAV per share. The resulting potential disparity may benefit repurchasing or non-repurchasing stockholders, depending on whether NAV is overstated or understated.
Risks Related to Our Financing Strategy
The Company uses leverage in connection with our investments, which increases the risk of loss associated with our investments.
We finance the origination and acquisition of a portion of our investments with repurchase agreements, collateralized loan obligations ("CLO") and other borrowings. Although the use of leverage may enhance returns and increase the number of investments that we can make, it may also substantially increase the risk of loss. Our ability to execute this strategy depends on various conditions in the financing markets that are beyond our control, including liquidity and credit spreads. We may be unable to obtain additional financing on favorable terms or, with respect to our debt and other investments, on terms that parallel the maturities of the debt originated or other investments acquired, if we are able to obtain additional financing at all. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets, as secured revolving credit facilities and repurchase facilities may not accommodate long-term financing. This could subject us to more restrictive recourse borrowings and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution, for our operations and for future business opportunities. If alternative financing is not available, we may have to liquidate assets at unfavorable prices to pay off such financing or pay significant fees to extend our financing arrangements. The return on our investments and cash available for distribution may be reduced to the extent that changes in market conditions cause the cost of our financing to increase relative to the income that we can derive from the assets we originate or acquire.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions.
When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies, and our ability to incur additional borrowings. Financing agreements that we may enter into may contain covenants that limit our ability to further incur borrowings, restrict distributions or that prohibit us from discontinuing insurance coverage or replacing our Advisor. Certain limitations would decrease our operating flexibility and our ability to achieve our operating objectives, including making distributions.
In a period of rising interest rates, our interest expense could increase while the interest we earn on our fixed-rate assets would not change, which would adversely affect our profitability.
Our operating results depend in large part on differences between the income from our assets, reduced by any credit losses and financing costs. Income from our assets may respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may significantly influence our net income. Increases in these rates will tend to decrease our net income and the market value of our assets. Interest rate fluctuations resulting in our interest expense exceeding the income from our assets would result in operating losses for us and may limit our ability to make distributions to our stockholders. In addition, if we need to repay existing borrowings during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on those investments, which would adversely affect our profitability.
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We may not be able to access financing sources on attractive terms, if at all, which could dilute our existing stockholders and adversely affect our ability to grow our business.
We will require outside capital to significantly grow our business. We have and may continue to raise equity capital through private placements to institutions and other investors. Because our common stock is not traded on a securities exchange, in order to consummate these private placements, we have and may continue to have to sell our common stock and Preferred Stock, on an as-converted basis, at prices that reflect a significant discount to our book value per share. Sales of common stock at less than our book value per share and sales of Preferred Stock that is convertible at less than our book value per share will dilute the value of common stock held by our existing shareholders. In addition, our business may be adversely affected by disruptions in the debt and equity capital markets and institutional lending market, including the lack of access to capital or prohibitively high costs of obtaining or replacing capital. If we cannot obtain sufficient debt and equity capital on acceptable terms, our business and our ability to operate could be severely impacted.

We have broad authority to utilize leverage and high levels of leverage could hinder our ability to make distributions and decrease the value of our common stock.
Our charter does not limit the amount of our leverage. High leverage levels would cause us to incur higher interest charges and higher debt service payments and the agreements governing our borrowings may also include restrictive covenants. These factors could limit the amount of cash we have available to distribute to our stockholders and could result in a decline in the value of our common stock.
We use short-term borrowings, such as credit facilities and repurchase agreements to finance our investments, which require us to provide additional collateral in the event the lender determines there is a decrease in the fair value of our collateral, and these calls for collateral could significantly impact our liquidity position.
We use short-term borrowing through repurchase agreements, credit facilities and other arrangements that put our assets and financial condition at risk. We may need to use such short-term borrowings for extended periods of time to the extent we are unable to access long-term financing. Repurchase agreements economically resemble short-term, variable-rate financing and usually require the maintenance of specific loan-to-collateral value ratios. If the market value of the assets subject to a repurchase agreement decline, we may be required to provide additional collateral or make cash payments to maintain the loan-to-collateral value ratio. If we are unable to provide such collateral or cash repayments, the lender may accelerate the loan or we would be required to liquidate the collateral. In a weakening economic environment, or in an environment of widening credit spreads, we would generally expect the value of the commercial real estate debt or securities that serve as collateral for our short-term borrowings to decline, and in such a scenario, it is likely that the terms of our short-term borrowings would require us to provide additional collateral or to make partial repayment, which amounts could be substantial.
Further, such borrowings may require us to maintain a certain amount of cash reserves or to set aside unleveraged assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. In addition, such short-term borrowing facilities may limit the length of time that any given asset may be used as eligible collateral, and these short-term borrowing arrangements may also be restricted to financing certain types of assets, such as first mortgage loans, which could impact our asset allocation. As a result, we may not be able to leverage our assets as fully as we would like, which could reduce our return on assets. In the event that we are unable to meet these collateral obligations, our financial condition could deteriorate rapidly.
Risks Related to Our Investments
Our commercial real estate debt investments are subject to the risks typically associated with commercial real estate.
Our commercial real estate debt and commercial real estate securities generally are directly or indirectly secured by a lien on real property. The occurrence of a default on a commercial real estate debt investment could result in our acquiring ownership of the property. We do not know whether the values of the properties ultimately securing our commercial real estate debt and loans underlying our securities will remain at the levels existing on the dates of origination of these loans and the dates of origination of the loans ultimately securing our securities, as applicable. If the values of the properties drop, our risk will increase because of the lower value of the security and reduction in borrower equity associated with such loans. In this manner, real estate values could impact the values of our debt and security investments. Therefore, our commercial real estate debt and securities investments are subject to the risks typically associated with real estate.
Our operating results may be adversely affected by a number of risks generally incident to holding real estate debt, including, without limitation:
natural disasters, such as hurricanes, earthquakes and floods;
acts of war or terrorism, including the consequences of terrorist attacks;
adverse changes in national and local economic and real estate conditions;
adverse changes in economic and market conditions related to pandemics and health crises, such as the recent outbreak of novel coronavirus (COVID-19);COVID-19;
an oversupply of (or a reduction in demand for) space in the areas where particular properties securing our loans are located and the attractiveness of particular properties to prospective tenants;
changes in interest rates and availability of permanent mortgage funds that my render the sale of property difficult or unattractive;
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changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance therewith and the potential for liability under applicable laws;
costs of remediation and liabilities associated with environmental conditions affecting properties; and
the potential for uninsured or underinsured property losses; and

periods of high interest rates and tight money supply.
The value of each property securing our loans is affected significantly by its ability to generate cash flow and net income, which in turn depends on the amount of rental or other income that can be generated net of expenses required to be incurred with respect to the property. Many expenses associated with properties (such as operating expenses and capital expenses) cannot be reduced when there is a reduction in income from the properties.
These factors may have a material adverse effect on the ability of our borrowers to pay their loans and the ability of the borrowers on the underlying loans securing our securities to pay their loans, as well as on the value and the return that we can realize from assets we acquire and originate.
The commercial real estate debt we originate and invest in and the commercial real estate loans underlying the commercial real estate securities we invest in could be subject to delinquency, foreclosure and loss, which could result in losses to us.
Commercial real estate loans are secured by commercial real estate and are subject to risks of delinquency, foreclosure, loss and bankruptcy of the borrower, all of which are and will continue to be prevalent if the overall economic environment does not remain stable. The ability of a borrower to repay a loan secured by commercial real estate is typically dependent primarily upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced or is not increased, depending on the borrower’s business plan, the borrower’s ability to repay the loan may be impaired. Net operating income of a property can be affected by each of the following factors, among other things:
macroeconomic and local economic conditions;
tenant mix;
success of tenant businesses;
property management decisions;
property location and condition;
property operating costs, including insurance premiums, real estate taxes and maintenance costs;
competition from comparable types of properties;
effects on a particular industry applicable to the property, such as hotel vacancy rates;
changes in governmental rules, regulations and fiscal policies, including environmental legislation;
changes in laws that increase operating expenses or limit rents that may be charged;
increases in costs associated with renovation and/or construction;
any need to address environmental contamination at the property;
the occurrence of any uninsured casualty at the property;
changes in national, regional or local economic conditions and/or specific industry segments;
declines in regional or local real estate values;
branding, marketing and operational strategies;
declines in regional or local rental or occupancy rates;
increases in interest rates;
real estate tax rates and other operating expenses;
acts of God;
adverse changes in market conditions, including those related to pandemics and health crises;
social unrest and civil disturbances; and
terrorism.
Any one or a combination of these factors may cause a borrower to default on a loan or to declare bankruptcy. If a default or bankruptcy occurs and the underlying asset value is less than the loan amount, we will suffer a loss.
In the event of any default under a commercial real estate loan held directly by us, we will bear a risk of loss of principal or accrued interest to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the commercial real estate loan, which could have a material adverse effect on our cash flow from operations. In the event of a default by a borrower on a non-recourse commercial real estate loan, we will only have recourse to the underlying asset (including any escrowed funds and reserves) collateralizing the commercial real estate loan. If a borrower defaults on one of

our commercial real estate debt investments and the underlying property collateralizing the commercial real estate debt is insufficient to satisfy the outstanding balance of the debt, we may suffer a loss of principal or interest. In addition, even if we have recourse to a borrower’s assets, we may not have full recourse to such assets in the event of a borrower bankruptcy as the loan to such borrower will be deemed to be secured only to the extent of the value of the mortgaged property at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. We are also exposed to these risks though the commercial real estate loans underlying a commercial real estate security we hold may result in us not recovering a portion or all of our investment in such commercial real estate security.
Delays in liquidating defaulted commercial real estate debt investments could reduce our investment returns.
If we originate or acquire commercial real estate debt investments and there are defaults under those debt investments, we may not be able to repossess and sell the properties securing the commercial real estate debt investment quickly. Foreclosure of a loan can be an expensive and lengthy process that could have a negative effect on our return on the foreclosed loan. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses, including but not limited to, lender liability claims, in an effort to prolong the foreclosure action. In some states, foreclosure actions can take several years or more to resolve. At any time during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure action and further delaying the foreclosure process. The resulting time delay could reduce the value of our assets in the defaulted loans. Furthermore, an action to foreclose on a property securing a loan is regulated by state statutes and regulations and is subject to the delays and expenses associated with lawsuits if the borrower raises defenses or counterclaims. In the event of default by a borrower, these restrictions, among other things, may impede our ability to foreclose on or sell the property securing the loan or to obtain proceeds sufficient to repay all amounts due to us on the loan. In addition, we may be forced to operate any foreclosed properties for a substantial period of time, which could be a distraction for our management team and may require us to pay significant costs associated with such property.
Subordinate commercial real estate debt that we originate or acquire could constitute a significant portion of our portfolio and may expose us to greater losses.
We acquire and originate subordinate commercial real estate debt, including subordinate mortgage and mezzanine loans and participations in such loans. These types of investments could constitute a significant portion of our portfolio and may involve a higher degree of risk than the type of assets that will constitute the majority of our commercial real estate debt investments, namely first mortgage loans secured by real property. In the event a borrower declares bankruptcy, we may not have full recourse to the assets of the borrower or the assets of the borrower may not be sufficient to satisfy the first mortgage loan and our subordinate debt investment. If a borrower defaults on our subordinate debt or on debt senior to ours, or in the event of a borrower bankruptcy, our subordinate debt will be satisfied only after the senior debt is paid in full. Where debt senior to our debt investment exists, the presence of intercreditor arrangements may limit our ability to amend our debt agreements, assign our debt, accept prepayments, exercise our remedies (through “standstill periods”) and control decisions made in bankruptcy proceedings relating to our borrowers. As a result, we may not recover some or all of our investment. In addition, real properties with subordinate debt may have higher loan-to-value ratios than conventional debt, resulting in less equity in the real property and increasing the risk of loss of principal and interest.
We may be subject to risks associated with construction lending, such as declining real estate values, cost overruns and delays in completion.
Our commercial real estate debt portfolio may include loans made to developers to construct prospective projects. The primary risks to us of construction loans are the potential for cost overruns, the developer’s failing to meet a project delivery schedule and the inability of a developer to sell or refinance the project at completion in accordance with its business plan and repay our commercial real estate loan due to declining real estate values. These risks could cause us to have to fund more money than we originally anticipated in order to complete the project. We may also suffer losses on our commercial real estate debt if the developer is unable to sell the project or refinance our commercial real estate debt investment.
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Jurisdictions with one action or security first rules or anti-deficiency legislation may limit the ability to foreclose on the property or to realize the obligation secured by the property by obtaining a deficiency judgment.
In the event of any default under our commercial real estate debt investments and in the loans underlying our commercial real estate securities, we bear the risk of loss of principal and nonpayment of interest and fees to the extent of any deficiency between the value of the collateral and the principal amount of the loan. Certain states in which the collateral securing our commercial real estate debt and securities is located may have laws that prohibit more than one judicial action to enforce a mortgage obligation, requiring the lender to exhaust the real property security for such obligation first or limiting the ability of the lender to recover a deficiency judgment from the obligor following the lender’s realization upon the collateral, in particular if a non-judicial foreclosure is pursued. These statutes may limit the right to foreclose on the property or to realize the obligation secured by the property.

Investments in non-conforming or non-investment grade rated loans or securities involve greater risk of loss.
Some of our investments may not conform to conventional loan standards applied by traditional lenders and either will not be rated or will be rated as non-investment grade by the rating agencies. The non-investment grade ratings for these assets typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the properties’ underlying cash flow or other factors. As a result, these investments may have a higher risk of default and loss than investment grade rated assets. Any loss we incur may be significant and may reduce distributions and adversely affect the value of our common stock.
Insurance may not cover all potential losses on the properties underlying our investments which may harm the value of our assets.
We generally require that each of the borrowers under our commercial real estate debt investments obtain comprehensive insurance covering the mortgaged property, including liability, fire and extended coverage. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods and hurricanes that may be uninsurable or not economically insurable. We may not require borrowers to obtain certain types of insurance if it is deemed commercially unreasonable. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it infeasible to use insurance proceeds to replace a property if it is damaged or destroyed. Under such circumstances, the insurance proceeds, if any, might not be adequate to restore the economic value of the property, which might impair our security and decrease the value of the property.
Investments that are not insured involve greater risk of loss than insured investments.
We may acquire and originate uninsured loans and assets as part of our investment strategy. Such loans and assets may include first mortgage loans, subordinate mortgage and mezzanine loans and participations in such loans and commercial real estate securities. While holding such interests, we are subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance. To the extent we suffer such losses with respect to our uninsured investments, the value of our company and the value of our common stock may be adversely affected.
We invest in CMBS, which may include subordinate securities, which entails certain risks.
We invest in a variety of CMBS, which may include subordinate securities that are subject to the first risk of loss if any losses are realized on the underlying mortgage loans. CMBS entitle the holders thereof to receive payments that depend primarily on the cash flow from a specified pool of commercial or multifamily mortgage loans. Consequently, CMBS will be adversely affected by payment defaults, delinquencies and losses on the underlying commercial real estate loans. Furthermore, if the rental and leasing markets deteriorate, it could reduce cash flow from the loan pools underlying our CMBS investments. The CMBS market is dependent upon liquidity for refinancing and will be negatively impacted by a slowdown in the new issue CMBS market.
Additionally, CMBS is subject to particular risks, including lack of standardized terms and payment of all or substantially all of the principal only at maturity rather than regular amortization of principal. Additional risks may be presented by the type and use of a particular commercial property. For example, special risks are presented by hospitals, nursing homes, hospitality properties and certain other property types. Commercial property values and net operating income are subject to volatility, which may result in net operating income becoming insufficient to cover debt service on the related commercial real estate loan, particularly if the current economic environment deteriorates. The repayment of loans secured by income-producing properties is typically dependent upon the successful operation of the related real estate project rather than upon the liquidation value of the underlying real estate. Furthermore, the net operating income from and value of any commercial property are subject to various risks. The exercise of remedies and successful realization of liquidation proceeds relating to CMBS may be highly dependent upon the performance of the servicer or special servicer. Expenses of enforcing the underlying commercial real estate loans (including litigation expenses) and expenses of protecting the properties securing the commercial real estate loans may be substantial. Consequently, in the event of a default or loss on one or more commercial real estate loans contained in a securitization, we may not recover a portion or all of our investment.
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The CMBS in which we may invest are subject to the risks of the mortgage securities market as a whole and risks of the securitization process.
The value of CMBS may change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole. Due to our investment in subordinate CMBS, we are also subject to several risks created through the securitization process. Our subordinate CMBS are paid interest only to the extent that there are funds available to make payments. To the extent the collateral pool includes delinquent loans, there is a risk that the interest payment on subordinate CMBS will not be fully paid. Subordinate CMBS are also subject to greater credit risk than those CMBS that are senior and generally more highly rated.

We may not control the special servicing of the mortgage loans underlying the CMBS in which we invest and, in such cases, the special servicer may take actions that could adversely affect our interests.
Overall control over the special servicing of the underlying mortgage loans of the CMBS may be held by a directing certificate holder, which is appointed by the holders of the most subordinate class of such CMBS. We ordinarily do not have the right to appoint the directing certificate holder. In connection with the servicing of the specially serviced mortgage loans, the related special servicer may, at the direction of the directing certificate holder, take actions that could adversely affect our interests.
We may invest in collateralized debt obligations ("CDOs") and such investments involve significant risks.
We may invest in CDOs, which are multiple class securities secured by pools of assets, such as CMBS, subordinate mortgage and mezzanine loans and REIT debt. Like typical securities structures, in a CDO, the assets are pledged to a trustee for the benefit of the holders of the bonds. Like CMBS, CDO notes are affected by payments, defaults, delinquencies and losses on the underlying commercial real estate loans. CDOs often have reinvestment periods that typically last for five years during which proceeds from the sale of a collateral asset may be invested in substitute collateral. Upon termination of the reinvestment period, the static pool functions very similarly to a CMBS where repayment of principal allows for redemption of bonds sequentially. To the extent we invest in the equity securities of a CDO, we will be entitled to all of the income generated by the CDO after the CDO pays all of the interest due on the senior securities and its expenses. However, there will be little or no income or principal available to the holders of CDO equity securities if defaults or losses on the underlying collateral exceed a certain amount. In that event, the value of our investment in any equity class of a CDO could decrease substantially. In addition, the equity securities of CDOs are generally illiquid and often must be held by a REIT and because they represent a leveraged investment in the CDO’s assets, the value of the equity securities will generally have greater fluctuations than the values of the underlying collateral.
We have no established investment criteria limiting the geographic or industry concentration of our investments in commercial real estate debt, commercial real estate securities and other commercial real estate-related investments. If our investments are concentrated in an area or industry that experiences adverse economic conditions, our investments may lose value and we may experience losses.
Certain commercial real estate debt, commercial real estate securities and other commercial real estate-related investments in which we invest may be secured by a single property or properties in one geographic location, or serving a particular industry such as hospitality or office space. These investments may carry the risks associated with significant geographical or industry concentration. We have not established and do not plan to establish any investment criteria to limit our exposure to these risks for future investments. As a result, properties underlying our investments may be overly concentrated in certain geographic areas or in certain industries, and we may experience losses as a result. A worsening of economic conditions in the geographic area or industry in which our investments are concentrated could have an adverse effect on our business, including reducing the demand for new financings, limiting the ability of borrowers to pay financed amounts and impairing the value of our collateral.
Adjustable-rate commercial real estate loans may entail greater risks of default to us than fixed-rate commercial real estate loans.
Adjustable-rate commercial real estate loans we originate or acquire or that collateralize our commercial real estate securities may have higher delinquency rates than fixed-rate loans. Borrowers with adjustable-rate mortgage loans may be exposed to increased monthly payments if the related interest rate adjusts upward from the initial fixed-rate or a low introductory rate, as applicable, in effect during the initial period of the loan to the rate computed in accordance with the applicable index and margin. This increase in borrowers’ monthly payments, together with any increase in prevailing market interest rates, after the initial fixed-rate period, may result in significantly increased monthly payments for borrowers with adjustable-rate loans, which may make it more difficult for the borrowers to repay the loan or could increase the risk of default of their obligations under the loan.
Changes in interest rates could negatively affect the value of our investments, which could result in reduced income or losses and negatively affect the cash available for distribution.
We may invest in fixed-rate CMBS and other fixed-rate investments. Under a normal yield curve, an investment in these instruments will decline in value if long-term interest rates increase. We will also invest in floating-rate investments, for which decreases in interest rates will have a negative effect on interest income. Declines in fair value may ultimately reduce income or result in losses to us, which may negatively affect cash available for distribution.

Hedging against interest rate exposure may adversely affect our income, limit our gains or result in losses, which could adversely affect cash available for distribution to our stockholders.
We may enter into interest rate swap agreements or pursue other interest rate hedging strategies. Our hedging activity will vary in scope based on interest rate levels, the type of investments held, and other changing market conditions. Interest rate hedging may fail to protect or could adversely affect us because, among other things:
interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates;
available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought;
the duration of the hedge may not match the duration of the related liability or asset;
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our hedging opportunities may be limited by the treatment of income from hedging transactions under the rules determining REIT qualification;
the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;
the party owing money in the hedging transaction may default on its obligation to pay; and
we may purchase a hedge that turns out not to be necessary.
Any hedging activity we engage in may adversely affect our income, which could adversely affect cash available for distribution. Therefore, while we may enter into such transactions to seek to reduce interest rate risks, unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not be able to establish a perfect correlation between hedging instruments and the investment being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss.
Hedging instruments often are not traded on regulated exchanges, guaranteed by an exchange or its clearinghouse or regulated by any U.S. or foreign governmental authorities and involve risks and costs.
The cost of using hedging instruments increases as the period covered by the instrument lengthens and during periods of rising and volatile interest rates. We may increase our hedging activity and thus increase our hedging costs during periods when interest rates are volatile or rising and hedging costs have increased. In addition, hedging instruments involve risk since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. Consequently, there are no regulatory or statutory requirements with respect to record keeping, financial responsibility or segregation of customer funds and positions. Furthermore, the enforceability of agreements underlying derivative transactions may depend on compliance with applicable statutory, commodity and other regulatory requirements and, depending on the identity of the counterparty, applicable international requirements. The business failure of a hedging counterparty with whom we enter into a hedging transaction will most likely result in a default. Default by a party with whom we enter into a hedging transaction may result in the loss of unrealized profits and force us to cover our resale commitments, if any, at the then current market price. It may not always be possible to dispose of or close out a hedging position without the consent of the hedging counterparty, and we may not be able to enter into an offsetting contract in order to cover our risk. There can be no assurance that a liquid secondary market will exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in losses.
We may fail to recalculate, readjust or execute hedges in an efficient manner.
Any hedging activity in which we engage may materially and adversely affect our results of operations and cash flows. Therefore, while we may enter into such transactions seeking to reduce risks, unanticipated changes in interest rates, credit spreads or currencies may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio positions or liabilities being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss.

Our investments in commercial real estate securities, which may include preferred and common equity, will be subject to the specific risks relating to the particular issuer of the securities and may involve greater risk of loss than secured debt financings.
Our investments in securities, which may include preferred and common equity, will involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Issuers that are REITs and other real estate companies are subject to the inherent risks associated with real estate and real estate-related investments. Issuers that are finance companies are subject to the inherent risks associated with structured financing investments. Furthermore, securities, including preferred and common equity, may involve greater risk of loss than secured financings due to a variety of factors, including that such investments are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in securities, including preferred and common equity, are subject to risks of: (i) limited liquidity in the secondary trading market; (ii) substantial market price volatility resulting from changes in prevailing interest rates; (iii) subordination to the prior claims of banks and other senior lenders to the issuer; (iv) the operation of mandatory sinking fund or call or redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets; (v) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations; and (vi) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn. These risks may adversely affect the value of outstanding securities, including preferred and common equity, and the ability of the issuers thereof to make principal, interest and distribution payments to us.
Many of our investments are illiquid and we may not be able to vary our portfolio in response to changes in economic and other conditions, which may result in losses to us.
Many of our investments are illiquid. As a result, our ability to sell commercial real estate debt, securities or properties in response to changes in economic and other conditions, could be limited, even at distressed prices. The Internal Revenue Code also places limits on our ability to sell properties held for fewer than four years. These considerations could make it difficult for us to dispose of any of our assets even if a disposition were in the best interests of our stockholders. As a result, our ability to vary our portfolio in response to further changes in economic and other conditions may be relatively limited, which may result in losses to us.
Declines in the fair value of our investments may adversely affect periodic reported results of operations and credit availability, which may reduce earnings and, in turn, cash available for distribution.
Most of our security investments will be classified for accounting purposes as “available-for-sale.” These assets will be carried at estimated fair value and temporary changes in the fair value of those assets will be directly charged or credited to equity with no impact on our statement of operations. If we determine that a decline in the estimated fair value of an available-for-sale security falls below its amortized value and is not temporary, we will recognize a loss on that security on the statement of operations, which will reduce our income in the period recognized.
A decline in the fair value of our assets may adversely affect us particularly in instances where we have borrowed money based on the fair value of those assets. If the fair value of those assets declines, the lender may require us to post additional collateral to support the asset. If we were unable to post the additional collateral, our lenders may refuse to continue to lend to us or reduce the amounts they are willing to lend to us. Additionally, we may have to sell assets at a time when we might not otherwise choose to do so. A reduction in credit available may reduce our income and, in turn, cash available for distribution.
Further, lenders may require us to maintain a certain amount of cash reserves or to set aside unlevered assets sufficient to maintain a specified liquidity position, which would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would choose, which could reduce our return on equity. In the event that we are unable to meet these contractual obligations, our financial condition could deteriorate rapidly.
The fair value of our investments may decline for a number of reasons, such as changes in prevailing market rates, increases in defaults, increases in voluntary prepayments for those investments that we have that are subject to prepayment risk, widening of credit spreads and downgrades of ratings of the securities by ratings agencies.
Some of our investments will be carried at estimated fair value as determined by us and, as a result, there may be uncertainty as to the value of these investments.
Some of our investments will be in the form of securities that are recorded at fair value but have limited liquidity or are not publicly-traded. The fair value of these securities and potentially other investments that have limited liquidity or are not publicly-traded may not be readily determinable. We estimate the fair value of these investments on a quarterly basis. Because such valuations are inherently uncertain, may fluctuate over short periods of time and may be based on numerous estimates and assumptions, our determinations of fair value may differ materially from the values that would have been used if a readily available market for these securities existed. The value of our common stock could be adversely affected if our determinations regarding the fair value of these investments are materially higher than the values that we ultimately realize upon their disposal.

Competition with third parties for originating and acquiring investments may reduce our profitability.
We have significant competition with respect to our origination and acquisition of assets with many other companies, including other REITs, insurance companies, commercial banks, private investment funds, hedge funds, specialty finance companies and other investors, many of which have greater resources than us. We may not be able to compete successfully for investments. In addition, the number of entities and the amount of funds competing for suitable investments may increase. If we pay higher prices for investments or originate loans on more generous terms than our competitors, our returns will be lower and the value of our assets may not increase or may decrease significantly below the amount we paid for such assets. If such events occur, our investors may experience a lower return on their investment.
Our due diligence may not reveal all material issues relating to our origination or acquisition of a particular investment.
Before making an investment, we assess the strength and skills of the management of the borrower or the operator of the property and other factors that we believe are material to the performance of the investment. In making the assessment and otherwise conducting customary due diligence, we rely on the resources available to us and, in some cases, an investigation by third parties. This process is particularly important and subjective with respect to newly organized or private entities because there may be little or no information publicly available about the entity. Even if we conduct extensive due diligence on a particular investment, there can be no assurance that this diligence will uncover all material issues relating to such investment, or that factors outside of our control will not later arise. If our due diligence fails to identify issues specific to investment, we may be forced to write-down or write-off assets, restructure our operations or incur impairment or other charges that could result in our reporting losses. Charges of this nature could contribute to negative market perceptions about us or our shares of common stock.
Real estate debt restructurings may reduce our net interest income.
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We may need to restructure our commercial real estate debt investments if the borrowers are unable to meet their obligations to us and we believe restructuring is the best way to maximize value. In order to preserve long-term value, we may determine to lower the interest rate on our commercial real estate debt investments in connection with a restructuring, which will have an adverse impact on our net interest income. We may also determine to extend the time to maturity and make other concessions with the goal
Table of increasing overall value but there is no assurance that the results of our restructurings will be favorable to us. We may lose some or all of our investment even if we restructure in an effort to increase value.Contents
We may be unable to restructure loans in a manner that we believe maximizes value, particularly if we are one of multiple creditors in large capital structures.
In the current environment, in order to maximize value we may be more likely to extend and work out a loan, rather than pursue foreclosure. However, in situations where there are multiple creditors in large capital structures, it can be particularly difficult to assess the most likely course of action that a lender group or the borrower may take and it may also be difficult to achieve consensus among the lender group as to major decisions. Consequently, there could be a wide range of potential principal recovery outcomes, the timing of which can be unpredictable, based on the strategy pursued by a lender group and/or by a borrower. These multiple creditor situations tend to be associated with larger loans. If we are one of a group of lenders, we may be a lender on a subordinated basis, and may not independently control the decision making. Consequently, we may be unable to restructure a loan in a manner that we believe would maximize value.
We may not be able to realize the benefits of any guarantees we may receive which could harm our ability to preserve our capital upon a default.
We sometimes obtain personal or corporate guarantees, which are not secured, from borrowers or their affiliates. These guarantees are often triggered only upon the occurrence of certain trigger, or “bad boy” events. In cases where guarantees are not fully or partially secured, we typically rely on financial covenants from borrowers and guarantors which are designed to require the borrower or guarantor to maintain certain levels of creditworthiness. Borrowers and guarantors may face financial difficulties and be unable to comply with their financial covenants. If the economy worsens, our borrowers could experience additional financial stress. Where we do not have recourse to specific collateral pledged to satisfy such guarantees or recourse loans, we will only have recourse as an unsecured creditor to the general assets of the borrower or guarantor, some or all of which may be pledged to satisfy other lenders. There can be no assurance that a borrower or guarantor will comply with its financial covenants or that sufficient assets will be available to pay amounts owed to us under our commercial real estate debt and related guarantees.

We may be subject to risks associated with future advance obligations, such as declining real estate values and operating performance.
Our commercial real estate debt portfolio may include loans that require us to advance future funds. Future funding obligations subject us to significant risks that the property may have declined in value, projects to be completed with the additional funds may have cost overruns and the borrower may be unable to generate enough cash flow, or sell or refinance the property, in order to repay our commercial real estate loan due. We could determine that we need to fund more money than we originally anticipated in order to maximize the value of our investment even though there is no assurance additional funding would be the best course of action.
While we attempt to align the maturities of our liabilities with the maturities on our assets, we may not be successful in that regard which could harm our operating results and financial condition.
Our general financing strategy will include the use of “match-funded” structures. This means that we will seek to align the maturities of our liabilities with the maturities on our assets in order to manage the risks of being forced to refinance our liabilities prior to the maturities of our assets. We may fail to appropriately employ match-funded structures on favorable terms, or at all. We may also determine not to pursue a match-funded structure with respect to a portion of our financings for a variety of reasons. If we fail to appropriately employ match-funded structures, our exposure to interest rate volatility and exposure to matching liabilities prior to the maturity of the corresponding asset may increase substantially which could harm our operating results, liquidity and financial condition.
Provision for loancredit losses is difficult to estimate.
Our provision for loancredit losses is evaluated on a quarterly basis. Our determination of provision for loancredit losses requires us to make certain estimates and judgments. Our estimates and judgments are based on a number of factors, including projected cash flows from the collateral securing our commercial real estate debt, debt structure, including the availability of reserves and recourse guarantees, likelihood of repayment in full at the maturity of a loan, loan-to-value ("LTV"), potential for refinancing and expected market discount rates for varying property types. Our estimates and judgments may not be correct and, therefore, our results of operations and financial condition could be severely impacted.
In addition, in June 2016,Since the FASB issuedstart of 2020 we have been subject to the FASB’s Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard, and subsequent amendments, known as the Current Expected Credit Loss (“CECL”) model, significantly changeschanged how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. CECL amendsamended the existing credit loss model to reflect a reporting entity's current estimate of all expected credit losses, not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information. This measurement will taketakes place at the time the financial asset is first added to the balance sheet and updated quarterly thereafter. This differs significantly from the prior “incurred loss” model required under current GAAP, which delays recognition until it is probable a loss has been incurred. Accordingly, we expect that the adoptionmodel.
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Risks Related to the Conduit Segment of the Business
We use warehouse facilities that may limit our ability to acquire assets, and we may incur losses if the collateral is liquidated.
We utilize warehouse facilities pursuant to which we accumulate mortgage loans in anticipation of a securitization financing, which assets are pledged as collateral for such facilities until the securitization transaction is consummated. In order to borrow funds to acquire assets under any additional warehouse facilities, we expect that our lenders thereunder would have the right to review the potential assets for which we are seeking financing. We may be unable to obtain the consent of a lender to acquire assets that we believe would be beneficial to us and we may be unable to obtain alternate financing for such assets. In addition, no assurance can be given that a securitization transaction would be consummated with respect to the assets being warehoused. If the securitization is not consummated, the lender could liquidate the warehoused collateral and we would then have to pay any amount by which the original purchase price of the collateral assets exceeds its sale price, subject to negotiated caps, if any, on our exposure. In addition, regardless of whether the securitization is consummated, if any of the warehoused collateral is sold before the consummation, we would have to bear any resulting loss on the sale. No assurance can be given that we will be able to obtain additional warehouse facilities on favorable terms, or at all.

We directly or indirectly utilize non‑recourse securitizations, and such structures expose us to risks that could result in losses to us.
We utilize non‑recourse securitizations of our investments in mortgage loans to the extent consistent with the maintenance of our REIT qualification and exemption from the Investment Company Act in order to generate cash for funding new investments and/or to leverage existing assets. In most instances, this involves us transferring our loans to a special purpose securitization entity in exchange for cash. In some sale transactions, we also retain a subordinated interest in the loans sold. The securitization of our portfolio investments might magnify our exposure to losses on those portfolio investments because the subordinated interest we retain in the loans sold would be subordinate to the senior interest in the loans sold, and we would, therefore, absorb all of the losses sustained with respect to a loan sold before the owners of the senior interest experience any losses. Moreover, we cannot be assured that we will be able to access the securitization market in the future, or be able to do so at favorable rates. The inability to consummate securitizations of our portfolio investments to finance our investments on a long‑term basis could require us to seek other forms of potentially less attractive financing or to liquidate assets at an inopportune time or price, which could adversely affect our performance and our ability to continue to grow our business.
The securitization market is subject to a regulatory environment that may affect certain aspects of these activities.
As a result of the dislocation of the credit markets, the securitization industry has become subject to additional regulation. In particular, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, various federal agencies have promulgated a rule that generally requires issuers in securitizations to retain 5% of the risk associated with the securities. While the rule as adopted generally allows the purchase of the CMBS B-Piece by a party not affiliated with the issuer to satisfy the risk retention requirement, current CMBS B-Pieces are generally not large enough to fully satisfy the 5% requirement. Accordingly, buyers of B-Pieces such as us may be required to purchase larger B-Pieces, potentially reducing returns on such investments. Furthermore, any such B-Pieces purchased by a party (such as us) unaffiliated with the issuer generally cannot be transferred for a period of five years following the closing date of the securitization or hedged against credit risk. These restrictions would reduce our liquidity and could potentially reduce our returns on such investments.
We enter into hedging transactions that could expose us to contingent liabilities in the future.
Subject to maintaining our qualification as a REIT, part of our investment strategy involves entering into hedging transactions that require us to fund cash payments in certain circumstances (such as the early termination of the hedging instrument caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the hedging instrument). The amount due would be equal to the unrealized loss of the open swap positions with the respective counterparty and could also include other fees and charges. These economic losses will be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely impact our financial condition.
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Risks Related to Taxation
Our failure to qualify as a REIT could have significant adverse consequences to us and the value of our common stock.
We believe that we have qualified as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2013. We intend to continue to meet the requirements for qualification and taxation as a REIT, but we cannot assure stockholders that we qualify as a REIT. Qualification as a REIT involves the application of highly technical and complex Code provisions for which only a limited number of judicial and administrative interpretations exist. Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. Even an inadvertent or technical mistake could jeopardize our REIT status. Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis.
If we were to fail to qualify as a REIT in any taxable year and are unable to avail ourselves of certain savings provisions set forth in the Code, we would be subject to U.S federal and applicable state and local income tax on our taxable income at regular corporate rates (including any applicable alternative minimum tax (which alternative minimum tax has been repealed for tax years after 2017)). Losing our REIT status would reduce our net income available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends-paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow or liquidate some investments in order to pay the applicable tax. We would not be able to elect to be taxed as a REIT for four years following the year we first failed to qualify unless the IRS were to grant us relief under certain statutory provisions.

The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.
The Internal Revenue Service ("IRS") has issued Revenue Procedure 2003-65, which provides a safe harbor pursuant to which a mezzanine loan, if it meets certain requirements, will be treated by the IRS as a real estate asset for purposes of the REIT asset tests, and interest derived from such loan will be treated as qualifying mortgage interest for purposes of the REIT 75% gross income test. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. We may originate or acquire mezzanine loans that do not satisfy all of the requirements for reliance on the safe harbor set forth in the Revenue Procedure, in which case, there can be no assurance that the IRS will not challenge the tax treatment of such loans. If such a challenge were sustained, we could fail to qualify as a REIT.
Even if we qualify as a REIT, we may be subject to tax liabilities that reduce our cash flow for distribution to our stockholders.
Even if we qualify as a REIT, we may be subject to some U.S. federal, state and local taxes on our income or property. For example:
In order to qualify as a REIT, we must distribute annually at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders. To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed income.
We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.
If we sell an asset, other than a foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax. We might be subject to this tax if we were to dispose of or securitize loans in a manner that is treated as a sale of loans for U.S. federal income tax purposes that is subject to the prohibited transaction tax.
Any TRS of ours will be subject to U.S. federal corporate income tax on its taxable income, and non-arm’s length transactions between us and any TRS, could be subject to a 100% tax.
We could, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Code to maintain our qualification as a REIT.
Any of these taxes would decrease cash available for distribution to our stockholders.
REIT distribution requirements could adversely affect our ability to execute our business plan.
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We generally must distribute annually at least 90%
Table of our REIT taxable income (determined before the deduction of dividends paid and excluding net capital gains) in order to qualify as a REIT, and any REIT taxable income that we do not distribute will be subject to U.S. federal corporate tax at regular rates. We intend to continue to make distributions to our stockholders to comply with the REIT requirements of the Code and to avoid U.S. federal corporate income tax and the 4% excise tax imposed on us if we distribute less than our required distribution in any calendar year.Contents
From time to time, we may generate taxable income greater than our income for financial reporting purposes prepared in accordance with GAAP, or differences in timing between the recognition of taxable income and the actual receipt of cash. For example:
we may be required to accrue income from mortgage loans, mortgage-backed securities (“MBS”), and other types of debt securities or interests in debt securities before we receive any payments of interest or principal on such assets;
we may acquire distressed debt investments that are subsequently modified by agreement with the borrower, which could cause us to have to recognize gain in certain circumstances;
we may recognize substantial amounts of “cancellation of debt” income for U.S. federal income tax purposes (but not for GAAP purposes) due to discount repurchases of our liabilities, which could cause our REIT taxable income to exceed our GAAP income;
we may deduct our capital losses only to the extent of our capital gains and not against our ordinary income, in computing our REIT taxable income for any given taxable year; and
certain of our assets and liabilities are marked-to-market for GAAP purposes but not for tax purposes which could result in losses for GAAP purposes that are not recognized in computing our REIT taxable income; and under the “Tax

Cuts and Jobs Act of 2017” (the “TCJA”), we generally must accrue income for U.S. federal income tax purposes no later than when such income is taken into account as revenue in our financial statements, which could create additional differences between REIT taxable income and the receipt of cash attributable to such income.
As a result of both the requirement to distribute 90% of our REIT taxable income each year (and to pay tax on any income that we do not distribute), and the fact that our taxable income may well exceed our cash income due to the factors mentioned above as well as other factors, we may find it difficult or impossible to meet the distribution requirements in certain circumstances while also having adequate cash resources to execute our business plan. In particular, where we experience differences in timing between the recognition of taxable income and the actual receipt of cash, the requirement to distribute a substantial portion of our taxable income could cause us to: (i) sell assets in adverse market conditions, (ii) borrow on unfavorable terms, (iii) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt or (iv) make a taxable distribution of shares of our common stock as part of a distribution in which stockholders may elect to receive shares of our common stock or (subject to a limit measured as a percentage of the total distribution) cash, in order to comply with the REIT requirements. These alternatives could increase our costs, reduce our equity, and/or result in stockholders being taxed on distributions of shares of stock without receiving cash sufficient to pay the resulting taxes. With respect to taxable distributions of our shares, U.S. stockholders receiving such distribution may be required to sell our shares or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. With respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to distributions, including in respect of all or a portion of such dividend that is payable in common stock. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
To maintain our REIT status, we may be forced to forgo and/or liquidate otherwise attractive opportunities.
To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualifying real estate assets, including certain mortgage loans and certain kinds of MBS. The remainder of our investment in securities (other than qualified 75% asset test assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than qualified 75% asset test assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total assets can be represented by securities of one or more TRSs, and no more than 25% of the value of our total assets may be represented by debt instruments issued by "publicly offered REITs" (i.e. REITs which are required to file annual and periodic reports with the SEC under the Exchange Act) that are “nonqualified” (e.g., not secured by real property or interests in real property). If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate from our portfolio, or contribute to a TRS, otherwise attractive investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income, increasing our income tax liability, and reducing amounts available for distribution to our stockholders. In addition, we may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution, and may be unable to pursue investments (or, in some cases, forego the sale of such investments) that would be otherwise advantageous to us in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT. Thus, compliance with the REIT requirements may hinder our ability to make, and, in certain cases, maintain ownership of certain attractive investments.
The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT.
We are party to certain financing arrangements, and may in the future enter into additional financing arrangements, that are structured as sale and repurchase agreements pursuant to which we would nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these assets at a later date in exchange for a purchase price. Economically, these agreements are financings which are secured by the assets sold pursuant thereto. We believe that we would be treated for REIT asset and income test purposes as the owner of the assets that are the subject of any such sale and repurchase agreement notwithstanding that such agreement may transfer record ownership of the assets to the counterparty during the term of the agreement. It is possible, however, that the IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT.
The “taxable mortgage pool” rules may increase the taxes that we or our stockholders incur, and may limit the manner in which we effect future securitizations.

Certain of our securitizations have resulted in the creation of "taxable mortgage pools" for U.S. federal income tax purposes. As a REIT, so long as we own 100% of the equity interest in a taxable mortgage pool, we generally would not be adversely affected by the characterization as a taxable mortgage pool. Certain categories of stockholders, however, such as non-U.S. stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, will be subject to increased taxes on the portion of their dividend income from us that is attributable to any "excess inclusion income" that we have generated as a result of our securitization transactions, and may generate as a result of future securitization transactions. In addition, to the extent that our common stock is owned by tax-exempt “disqualified organizations,” such as certain government-related entities and charitable remainder trusts that are not subject to tax on unrelated business income, we will incur a corporate-level tax on a portion of any excess inclusion income. In that case, we may reduce the amount of our distributions to any disqualified organization whose stock ownership gave rise to the tax. Moreover, we could face limitations in selling equity interests in these securitizations to outside investors, or selling any debt securities issued in connection with these securitizations that might be considered to be equity interests for tax purposes. These limitations may prevent us from using certain techniques to maximize our returns from securitization transactions.
The prohibited transactions tax may limit our ability to engage in transactions, including certain methods of securitizing mortgage loans that would be treated as sales for U.S. federal income tax purposes.
A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of assets, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We might be subject to the prohibited transaction tax if we were to dispose of, modify or securitize loans in a manner that is treated as a sale of the loans for U.S. federal income tax purposes. Therefore, in order to avoid the prohibited transactions tax, we may choose not to engage in certain sales or modifications of loans at the REIT level and may limit the structures we utilize for our securitization transactions, even though the sales, modifications or structures might otherwise be beneficial to us. Additionally, we may be subject to the prohibited transaction tax upon a disposition of real property. Although a safe-harbor exception to prohibited transaction treatment is available, there can be no assurance that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business.
It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS. However, to the extent that we engage in such activities through a TRS, the income associated with such activities may be subject to U.S. federal corporate income tax.
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from hedging transactions will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges: (i) interest rate risk on liabilities incurred to carry or acquire real estate assets; or (ii) risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the REIT 75% or 95% gross income tests, and such instrument is properly identified under applicable U.S. Department of Treasury regulations ("Treasury Regulations"). Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result, we may have to limit our use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur.
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Liquidation of assets may jeopardize our REIT qualification.
To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to repay obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% prohibited transaction tax on any resultant gain if we sell assets that are treated as dealer property or inventory.

Modification of the terms of our debt investments and mortgage loans underlying our CMBS in conjunction with reductions in the value of the real property securing such loans could cause us to fail to qualify as a REIT.
Our debt and securities investments may be materially affected by a weak real estate market and economy in general. As a result, many of the terms of our debt and the mortgage loans underlying our securities may be modified to avoid taking title to a property. Under the Code, if the terms of a loan are modified in a manner constituting a "significant modification," such modification triggers a deemed exchange of the original loan for the modified loan. In general, under applicable Treasury Regulations if a loan is secured by real property and other property and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property securing the loan determined as of the date we agreed to acquire the loan or the date we significantly modified the loan, a portion of the interest income from such loan will not be qualifying income for purposes of the REIT 75% gross income test, but will be qualifying income for purposes of the REIT 95% gross income test. Although the law is not entirely clear, a portion of the loan will likely be a non-qualifying asset for purposes of the REIT 75% asset test. The non-qualifying portion of such a loan would be subject to, among other requirements, the requirement that a REIT not hold securities possessing more than 10% of the total value of the outstanding securities of any one issuer ("10% Value Test").
IRS Revenue Procedure 2014-51 provides a safe harbor pursuant to which we will not be required to redetermine the fair market value of real property securing a loan for purposes of the gross income and asset tests discussed above in connection with a loan modification that is: (i) occasioned by a borrower default; or (ii) made at a time when we reasonably believe that the modification to the loan will substantially reduce a significant risk of default on the original loan. No assurance can be provided that all of our loan modifications have or will qualify for the safe harbor in Revenue Procedure 2014-51. To the extent we significantly modify loans in a manner that does not qualify for that safe harbor, we will be required to redetermine the value of the real property securing the loan at the time it was significantly modified. In determining the value of the real property securing such a loan, we generally will not obtain third-party appraisals, but rather will rely on internal valuations. No assurance can be provided that the IRS will not successfully challenge our internal valuations. If the terms of our debt investments and the mortgage loans underlying our CMBS are "significantly modified" in a manner that does not qualify for the safe harbor in Revenue Procedure 2014-51 and the fair market value of the real property securing such loans has decreased significantly, we could fail the REIT 75% gross income test, the 75% asset test and/or the 10% Value Test. Unless we qualified for relief under certain Code cure provisions, such failures could cause us to fail to continue to qualify as a REIT.
Our qualification as a REIT may depend upon the accuracy of legal opinions or advice rendered or given or statements by the issuers of assets we acquire.
When purchasing securities, we may rely on opinions or advice of counsel for the issuer of such securities, or statements made in related offering documents, for purposes of determining, among other things, whether such securities represent debt or equity securities for U.S. federal income tax purposes, the value of such securities and to what extent those securities constitute qualified real estate assets for purposes of the REIT asset tests and produce qualified income for purposes of the REIT 75% gross income test. The inaccuracy of any such opinions, advice or statements may adversely affect our ability to qualify as a REIT.
Dividends paid by REITs do not qualify for the preferential tax rates that apply to other corporate dividends.
The maximum tax rate for “qualified dividends” paid by non-REIT "C" corporations to U.S stockholders that are individuals, trusts and estates is generally 20%. Dividends payable by REITs to those U.S stockholders, however, generally are not eligible for the reduced rate, except to the extent that certain holding requirements have been met and a REIT’s dividends are attributable to dividends received by a REIT from taxable corporations (such as a TRS), to income that was subject to tax at the REIT/corporate level, or to dividends properly designated by the REIT as “capital gain dividends.” Effective for taxable years beginning after December 31, 2017 and before January 1, 2026, those U.S. stockholders may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends). For those U.S. stockholders in the top marginal tax bracket of 37%, the deduction for REIT dividends yields an effective income tax rate of 29.6% on REIT dividends, which is higher than the 20% tax rate on qualified dividend income paid by non-REIT “C” corporations but still lower than the effective rate that applied prior to 2018, which is the first year that this special deduction for REIT dividends is available. Although the reduced rates applicable to dividend income from non-REIT “C” corporations do not adversely affect the taxation of REITs or dividends payable by REITs, it could cause investors who are non-corporate taxpayers to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT “C” corporations that pay dividends, which could adversely affect the value of our common stock.

There is a risk of changes in the tax law applicable to REITs.
The IRS, the United States Treasury Department and Congress frequently review U.S. federal income tax legislation, regulations and other guidance. We cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted. Any legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. We urge you to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock. Although REITs generally receive certain tax advantages compared to entities taxed as non-REIT “C” corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a non-REIT “C” corporation.
The ability of our board of directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders.
Our charter provides that the board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if the board determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to U.S. federal income tax on our net taxable income and we generally would no longer be required to distribute any of our net taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders.
Employee Benefit Plan and IRA Risks
If certain investors fail to meet the fiduciary and other standards under the Employment Retirement Income Security Act of 1974 ("ERISA") or the Code as a result of an investment in our stock, such investors could be subject to criminal and civil penalties.
Special considerations apply to the purchase of shares by employee benefit plans subject to the fiduciary rules of Title I of ERISA, including pension or profit sharing plans and entities that hold assets of such plans ("ERISA Plans") and plans and accounts that are not subject to ERISA, but are subject to the prohibited transaction rules of Section 4975 of the Internal Revenue Code, including IRAs, Keogh Plans and medical savings accounts (collectively, we refer to ERISA Plans and plans subject to Section 4975 of the Internal Revenue Code as “Benefit Plans”). If an investor is investing the assets of any Benefit Plan, such investors should be satisfied that:
any investment is consistent with the its fiduciary obligations under ERISA and the Internal Revenue Code, or any other applicable governing authority in the case of a government plan; the investment is made in accordance with the documents and instruments governing the Benefit Plan, including the Benefit Plan’s investment policy;
the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA, if applicable, and other applicable provisions of ERISA and the Internal Revenue Code;
the investment will not impair the liquidity of the Benefit Plan;
the investment will not produce unrelated business taxable income for the Benefit Plan;
they will be able to value the assets of the Benefit Plan annually in accordance with the applicable provisions of ERISA and the Internal Revenue Code; and
the investment will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
Fiduciaries may be held personally liable under ERISA for losses as a result of failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA. In addition, if an investment in our shares constitutes a non-exempt prohibited transaction under ERISA or the Internal Revenue Code, the fiduciary of the Benefit Plan who authorized or directed the investment may be subject to imposition of excise taxes with respect to the amount invested and an IRA investing in our shares may lose its tax-exempt status.
Governmental plans, church plans and foreign plans that are not subject to ERISA or the prohibited transaction rules of the Internal Revenue Code, may be subject to similar restrictions under other laws. A plan fiduciary making an investment in our shares on behalf of such a plan should satisfy themselves that an investment in our shares satisfies both applicable law and is permitted by the governing plan documents.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.

Our headquarters are located in a leased space at 9 West 57th Street, Suite 4920, New York, New York 10019.
Item 3. Legal Proceedings.
The Company has no knowledgeFor a description of material pendingthe Company’s legal proceedings, other than ordinary routine litigation incidentalsee “Note 10. Commitments and Contingencies” to the business, or material pending or threatened regulatory proceedings, against the Company atour consolidated financial statements included in this time.Annual Report on Form 10-K.
Item 4. Mine Safety Disclosures.
Not applicable.

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PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
No public trading market currently exists for the Company's shares of common stock and the Company currently has no immediate plans to list theseour shares of common stock on a national securities exchange. Until our shares are listed on a national securities exchange, if ever, the Company's stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase requirements. On November 12, 2019,2, 2020, the board of directors, upon the recommendation of the Advisor,Audit Committee of the board, unanimously approved and established anthe estimated NAV per share of the Company’s common stock proposed by the Advisor of $18.57.$17.88. The estimated per share NAV is based upon the estimated value of the Company’s assets less the Company’s liabilities as of September 30, 2019.2020. This valuation was performed in accordancea manner consistent with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013, including the use of an independent third-party valuation firmfirms to estimate the fair value of our commercialloan portfolio, securities portfolio and real estate debt investments and commercial mortgage backed securities.owned portfolio. See our current reportQuarterly Report on Form 10-Q filed with the SEC on November 13, 20196, 2020 for the Company's methodology for calculating our estimated per-share NAV.
There is no public trading market for the shares at this time, and there can be no assurance that stockholders would receive $18.57$17.88 per share if such a market did exist and they sold their shares or that they will be able to receive such amount for their shares in the future. Nor does this deemed value reflect the distributions that stockholders would be entitled to receive if the Company's investments were sold and the sale proceeds were distributed upon liquidation of the Company's assets. Such a distribution upon liquidation may be less than $18.57$17.88 per share for various reasons including changes in values between the September 30, 20192020 valuation date and the date of any liquidation. The Company is currently offering our shares for $18.57$17.88 pursuant to the DRIP.
Holders
As of February 28, 2020,2021, the Company had 44,385,16244,135,876 shares of common stock outstanding held by a total of 16,223 stockholders.16,061 stockholders of record.
Distributions
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its' "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to the stockholders in a year, the Company will not be subject to U.S. federal income tax to the extent of the income that we distribute. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its' income and property and U.S. federal income and excise taxes on any undistributed income.
In 2019,April 2020, the Company’s board of directors unanimously approved a transition in the timing of the dividend payments, to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly accrual and payment basis, starting with the second quarter 2020 dividend that was paid in July 2020. Similarly, the Company paidbegan paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.
The monthly distributions for the first quarter of 2020 were paid at a daily rate equivalent to $1.44 per annum, per share of common stock. Starting with the second quarter 2020 distribution, the 2020 quarterly distributions were paid at a quarterly rate of $0.275 per share of common stock (equivalent to $1.10 per annum). Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distribution payments are not assured. Subject to the terms of the Preferred Stock, dividends on the Company’s Preferred Stock are generally paid on an as-converted basis with the common stock.
Distributions are generally payable by the fifth day following each monthquarter end to stockholders of record at the close of business each day during the prior month.quarter.

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The below table reflects the value of distributions paid in cash and through the DRIP to common stockholders during the years ended December 31, 20192020 and 20182019 (dollars in thousands):
Year Ended December 31,
20202019
Distributions:
  Cash distributions paid$36,798 $45,763 
  Distributions reinvested8,883 13,901 
Total Distributions$45,681 $59,664 
Source of Distribution Coverage:
  Net Income$36,798 80.6 %$45,763 76.7 %
  Common stock issued under DRIP8,883 19.4 %13,901 23.3 %
Total Sources of Distributions$45,681 100.0 %$59,664 100.0 %
Net Income applicable to common stock (GAAP)$39,826 $66,914 
 Year Ended December 31,
 2019 2018
Distributions:       
Cash distributions paid$45,763
   $34,467
  
Distributions reinvested13,901
   14,023
  
Total distributions$59,664
   $48,490
  
Source of distribution coverage:       
Net Income (Loss)

$45,763
 76.7% $34,467
 71.1%
Available cash on hand
 % 
 %
Common stock issued under DRIP13,901
 23.3% 14,023
 28.9%
Total sources of distributions$59,664
 100.0% $48,490
 100.0%
Net income applicable to common stock (GAAP)$66,914
   $49,181
  

Share-Based Compensation
Restricted Share Plan
The Company has an employee and director incentive restricted share plan (the “RSP”), which provides the Company with the ability to grant awards of restricted shares to our directors, officers, and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company or certain consultants to the Company and the Advisor and its affiliates. The total number of common shares granted under the RSP may not exceed 5.0% of our authorized common shares, and in any event, will not exceed 4.0 million shares (as such number may be adjusted for stock splits, stock dividends, combinations, and similar events).
Restricted share awards entitle the recipient to receive common shares from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in common shares shall be subject to the same restrictions as the underlying restricted shares. The fair value of the restricted shares will be expensed over the vesting period of the award.
As of December 31, 2019,2020, the Company has granted 34,10644,876 restricted shares to our independent directors of which 20,20727,823 shares have vested and 5,333 shares were forfeited. The compensation expense associated with the restricted share grants was $0.2 million for the year ended December 31, 2019.2020. Additionally, the Company recorded a distribution payable of $14,971$3,248 at December 31, 20192020 in connection with these shares.
The following table provides information about our common stock that may be issued under our RSP as of December 31, 2019:
2020:
Plan CategoryNumber of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and RightsWeighted-Average Exercise of Price of Outstanding Options, Warrants, and RightsNumber of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity compensation plans approved by security holders


Equity compensation plans not approved by security holders

3,985,1263,977,510 
    Total

3,985,126


Recent Sales of Unregistered Equity Securities
Commencing in February 2018, the Company has been offering common stock and Series A Preferred Stock and commencing in October 2019, the Company has been offering Series C Preferred Stock, in private placements exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") pursuant to Section 4(a)(2) of the Securities Act and certain rules and regulations promulgated thereunder. Pursuant to these private placements, for the year ended December 31, 2019, the Company made the following sales to institutional and individual investors:
    Total
Class of Security3,977,510Number of SharesSale Price
Common Stock4,601,904$76.9 Million
Series A Preferred Stock11,247
$56.2 Million (1)
Series C Preferred Stock1,400
$7.0 Million (1)
________________________
(1)Includes accrued dividends as of settlement paid as part of purchase price.
Conversion Terms of the Preferred Stock
Immediately prior to a “Liquidity Event” (defined as (i) the listing of the Company's common stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares of common stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transactions that result in all shares of common stock being transferred or exchanged for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system), each outstanding share of Series A Preferred Stock shall convert (the “Mandatory Conversion”) into 299.2 shares of the Company's common stock, subject to anti-dilution adjustments (the “Conversion Rate”). Series C Preferred Stock will convert into the same amount of shares of common stock on the one-year anniversary of a Liquidity Event, subject to the Company’s right to accelerate the conversion to a date no earlier than six months after the Liquidity Event, upon at least ten days prior notice to the holders of the Series C Preferred Stock. If there has not been a Liquidity Event within six years from the initial issuance of the Preferred Stock, each holder of Preferred Stock shall have the right to convert all, but not less than all, of the Preferred Stock held by such holder into the Company's common stock at the Conversion Rate. Each holder also has the option to convert its shares of Preferred Stock into common stock upon a Change in Control (as defined in the Articles Supplementary) of the Company. In addition, neither the Company nor a holder of shares of Preferred Stock may redeem shares of the Preferred Stock until six years from the initial issuance of the Preferred Stock, except in cases of a Change in Control (as defined in the respective Articles Supplementary for the Series A and Series C Preferred Stock).
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The Company's board of directors unanimously approved an amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016. The SRP enables stockholders to sell their shares to the Company. Subject to certain conditions, stockholders that purchased shares of the Company's common stock or received their shares from the Company (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland Law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period.
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On August 10, 2017, the Company's board of directors amended the SRP to provide that the repurchase price per share for requests will be equal to the lesser of (i) the Company's most recent estimated per-share NAV, as approved by the Company's board of directors from time to time, and (ii) the Company's book value per share, computed in accordance with GAAP, multiplied by a percentage equal to (i) 92.5%, if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95%, if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5%, if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100%, if the person seeking repurchase has held his or her shares for a period greater than four years or in the case of requests for death or qualifying disability. Investors in our private placements are not eligible to participate in the SRP for three years.
The Company’s most recent estimated per-share NAV is $18.57$17.88 and the Company’s GAAP book value per share as of December 31, 20192020 was $18.60.$17.94.
Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any

fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same fiscal semester through the issuance of common stock pursuant to any DRIP in effect from time to time, provided that the Company's board of directors has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. In addition, the board of directors may reject a request for redemption at any time. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. Pending repurchase requests will be honored on a pro rata basis. The Company will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made.
When a stockholder requests repurchase and the repurchase is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares.
Share repurchase activity under the SRP during the year ended December 31, 20192020 was as follows:
Number of Shares RepurchasedAverage Price per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plan or ProgramsMaximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
January 1 - January 31, 2020373,135 $18.56 373,135 — 
February 1 - February 28, 2020— N/A— — 
March 1 - March 31, 2020— N/A— — 
April 1 - April 30, 2020— N/A— — 
May 1 - May 31, 2020— N/A— — 
June 1 - June 30, 2020— N/A— — 
July 1 - July 31, 2020206,332$16.25 206,332 — 
August 1 - August 31, 2020— N/A— — 
September 1 - September 30, 2020— N/A— — 
October 1 - October 31, 2020— N/A— — 
November 1 - November 30, 2020— N/A— — 
December 1 - December 31, 2020— N/A— — 
Total579,467 579,467 
For additional details about the SRP, see “Share Repurchase Program” in “Note 9 - Stock Transactions” to our consolidated financial statements included in this Annual Report on Form 10-K.

  Number of Shares Repurchased Average Price per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
January 1 - January 31, 2019 387,530
 18.60
 387,530
 
February 1 - February 28, 2019 
 N/A
 
 
March 1 - March 31, 2019 
 N/A
 
 
April 1 - April 30, 2019 
 N/A
 
 
May 1 - May 31, 2019 
 N/A
 
 
June 1 - June 30, 2019 
 N/A
 
 
July 1 - July 31, 2019 354,323
 18.65
 354,323
 
August 1 - August 31, 2019 
 N/A
 
 
September 1 - September 30, 2019 
 N/A
 
 
October 1 - October 31, 2019 
 N/A
 
 
November 1 - November 30, 2019 
 N/A
 
 
December 1 - December 31, 2019 
 N/A
 
 
Total 741,853
   741,853
  

Item 6. Selected Financial Data.
The following selected financial data should be read in conjunction with the accompanying consolidated financial statements and related notes thereto and "Item 7. Management's Discussion and AnalysisIntentionally Omitted.
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Table of Financial Condition and Results of Operations". The following consolidated balance sheets as of December 31, 2019 and 2018 and consolidated statements of operations the for the years ended December 31, 2019, 2018, 2017, 2016 and 2015 were derived from our consolidated financial statements.
  December 31,
Balance sheet data (dollars in thousands) 2019 2018
Commercial mortgage loans, held for investment, net $2,762,042
 $2,206,830
Commercial mortgage loans, held-for-sale, measured at fair value 112,562
 76,863
Real estate securities, available for sale, measured at fair value 386,316
 26,412
Total assets 3,540,620
 2,606,078
Collateralized loan obligations 1,803,185
 1,505,279
Repurchase agreements - commercial mortgage loans 252,543
 149,440
Other financing and loan participation - commercial mortgage loans 
 9,902
Repurchase agreements - real estate securities 394,359
 44,539
Total liabilities 2,514,705
 1,727,064
Total stockholders' equity 816,805
 733,228

  Year Ended December 31,
Operating data (dollars in thousands) 2019 2018 2017 2016 2015
Interest income:          
Interest income $195,299
 $152,288
 $89,564
 $79,404
 $59,393
Less: Interest expense 90,418
 70,000
 32,359
 23,169
 12,268
Net interest income 104,881
 82,288
 57,205
 56,235
 47,125
Revenue from real estate owned 3,169
 
 
 
 
Total Income $108,050
 $82,288
 $57,205
 $56,235
 $47,125
Expenses:          
Asset management and subordinated performance fee 16,226
 10,299
 9,273
 9,504
 7,615
Acquisition fees and acquisition expenses
 900
 452
 4,197
 806
 7,916
Administrative services expenses (1)
 16,363
 13,446
 6,765
 4,376
 644
Other expenses 18,711
 13,205
 9,281
 7,803
 5,699
Total expenses $52,200
 $37,402
 $29,516
 $22,489
 $21,874
Other (income)/loss:          
Loan loss provision/(recovery) 3,007
 3,370
 (715) 1,293
 318
Realized (gain)/loss on sale of real estate securities 
 107
 (172) 1,906
 
Realized (gain)/loss on sale of commercial mortgage loan held-for-sale 25
 9
 (120) 
 
Realized (gain)/loss on sale of commercial mortgage loan, held-for-sale, measured at fair value (37,832) (11,288) (4,523) 
 
Impairment losses on real estate securities 
 
 
 310
 
Unrealized (gain)/loss on commercial mortgage loans held-for-sale 
 
 (247) 247
 
Unrealized (gain)/loss on commercial mortgage loans, held-for-sale, measured at fair value (312) 237
 
 
 
Unrealized (gain)/loss on other real estate investments, measured at fair value (47) 
 
 
 
Unrealized (gain)/loss on derivatives (1,722) 1,374
 17
 
 
Realized (gain)/loss on derivatives 4,324
 (1,827) (555) 
 
Total other (income)/loss $(32,557) $(8,018) $(6,315) $3,756
 $318
Income/(loss) before taxes 88,407
 52,904
 34,004
 29,990
 24,933
Provision/(benefit) for income tax 4,483
 79
 225
 
 
Net income $83,924
 $52,825
 $33,779
 $29,990
 $24,933
Less: Preferred stock dividends (15,337) (3,644) 
 
 
Less: Undistributed earnings allocated to preferred stock (1,673) 
 
 
 
Net income applicable to common stock $66,914
 $49,181
 $33,779
 $29,990
 $24,933
           
Basic net income per share $1.60
 $1.44
 $1.06
 $0.95
 $1.03
Diluted net income per share $1.60
 $1.44
 $1.06
 $0.95
 $1.03
Basic weighted average shares outstanding 41,859,142
 34,268,707
 31,772,231
 31,659,274
 24,253,905
Diluted weighted average shares outstanding 41,871,646
 36,779,735
 31,784,889
 31,666,504
 24,259,169
Distributions per common share $1.44
 $1.44
 $1.80
 $2.06
 $2.06
________________________
(1) During the year ended December 31, 2015 the Company previously reported Administrative services expenses within the Professional fees line. For the year ended December 31, 2016 the amounts are presented separately and the change was applied retrospectively. For the year ended December 31, 2014, the Company did not incur administrative services expenses.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying financial statements of Benefit Street Partners Realty Trust, Inc. the notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting the Company’s current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections of this Annual Report entitled “Risk Factors” and “Forward-Looking Statements.”
Overview
We were incorporated in Maryland inon November 15, 2012 and commenced our business activities in May 2013. We have conducted our operations to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2013. The Company, through a subsidiary which is treated as a TRS, is indirectly subject to U.S. federal, state and local income taxes. We commenced business in May 2013. We primarily originate, acquire and manage a diversified portfolio of commercial real estate debt investments secured by properties located within and outside of the United States. Commercial real estate debt investments may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. Substantially all of our business is conducted through the OP, a Delaware limited partnership. We are the sole general partner and directly or indirectly hold all of the units of limited partner interests in the OP.
The Company has no direct employees. We are managed by our Advisor pursuant to thean Amended and Restated Advisory Agreement.Agreement, dated January 19, 2018 (the "Advisory Agreement"). Our Advisor manages our affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of our assets and our operations.
The Advisor, an SEC-registered investment adviser, is a credit-focused alternative asset management firm. The Advisor manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the Advisor’s robust platform. Our Advisor is a wholly-owned subsidiary ofOn February 1, 2019, Franklin Resources, Inc., which, together with its various subsidiaries, operates as Franklin Templeton. and Templeton International, Inc. (collectively, “Franklin Templeton”) acquired the Advisor (the “Transaction”). The Transaction did not impact the terms of the Advisory Agreement and the Transaction did not result in any changes to the executive officers of the Company.
The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions at a profit. The Company also owns real estate which it acquires through foreclosure and deed in lieu of foreclosure, and which it purchases for investment, typically subject to triple net leases.
The Company also invests in commercial real estate securities. Real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and CDOs.
COVID-19 Pandemic
Since December 2019, COVID-19 has spread globally, including to every state in the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic, and subsequently, the United States declared a national emergency. The COVID-19 pandemic has had significant repercussions across domestic and global economies and financial markets, including the industries in which our borrowers operate. The global impact of the COVID-19 outbreak evolved rapidly and many governmental authorities, including state and local governments in regions in which our borrowers own properties, have reacted by instituting government restrictions, border closings, quarantines, “shelter-in-place” orders and “social distancing” guidelines which have forced many of our borrowers to suspend or significantly restrict their business activities. The effects of the pandemic have resulted in a dramatic increase in national unemployment and numerous corporate bankruptcies.
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The COVID-19 pandemic has had and is continuing to have a negative impact on our operations, however during the second half of 2020 the impact was less significant:
Impact on Operating Results. With respect to our operating results for the year ended December 31, 2020, the COVID-19 pandemic drove a significant increase in our allowance for credit loss provision on our loan portfolio and an increase in the realized loss on our securities portfolio. Specifically, for the year ended December 31, 2020, we experienced an increase in our provision for expected credit losses on our loan portfolio, primarily driven by the decline in the overall economic outlook as a result of the COVID-19 pandemic. Additionally, we had realized losses of $10.1 million on our real estate securities portfolio, the majority of which occurred during the first half of 2020. This was a result of dislocation in the broader capital markets and uncertainty due to COVID-19 and its expected impact on values of properties underlying our real-estate debt assets. Due primarily to changes in market conditions associated with the COVID-19 pandemic, the weighted average risk rating of our loan portfolio increased from 2.1 as of December 31, 2019 to 2.2 as of December 31, 2020, and the amortized cost basis of our loans past due increased by $37.8 million to $94.9 million over this period.
In the second and third quarters of 2020, we made limited modifications to certain loans to assist borrowers during the COVID-19 pandemic, but none of these modifications qualify as troubled debt restructurings ("TDRs").
Impact on Liquidity. During the year ended December 31, 2020, there were significant disruptions in the financial markets that impacted our real estate securities portfolio. This resulted in decreases in market value for these assets due to volatility and lack of liquidity. During the second quarter of 2020, we received margin calls from certain of our lenders due to the decline in pricing, which we satisfied through the contribution of additional cash, thereby reducing our liquidity position and substantially reducing our levered returns on this portfolio of assets. As of December 31, 2020 the Company has significantly reduced its real estate securities portfolio, further reducing mark to market exposure and the associated liquidity risk from counterparty margin calls on real estate securities repurchase agreements compared to prior quarters. In addition, the financial market dislocations created by the COVID-19 pandemic have currently made financing through CDO or CLO securitizations more difficult.
The extent to which the COVID-19 pandemic impacts our future operating results and liquidity will depend on future developments which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, including any resurgences, or mutations of the virus, the direct and indirect economic effects of the pandemic and containment measures, and the effectiveness of vaccines and treatment therapies and the distribution thereof. The inability of our borrowers to meet their loan obligations and/or borrowers filing for bankruptcy protection would reduce our cash flows, which would impact our ability to pay dividends to our stockholders. As a result of the adverse effects of the COVID-19 pandemic, starting the second quarter of 2020 our board of directors reduced the amount of our regular common stock dividend. The board may reduce or eliminate the dividend in the future in the event of further economic deterioration or dislocations in the capital markets.
Estimated Per Share NAV
On November 12, 2019,2, 2020, the board of directors, upon the recommendation of the Advisor,Audit Committee of the board, unanimously approved and established anthe estimated net asset value ("NAV") per share of the Company’s common stock proposed by the Advisor of$18.57.17.88. The estimated per share NAV is based upon the estimated value of the Company’s assets less the Company’s liabilities as of September 30, 20192020 (the “Valuation Date”). This valuation was performed in accordancea manner consistent with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013, including the use of an independent third-party valuation firmfirms to estimate the fair value of our commercialloan portfolio, securities portfolio and real estate debt investments and commercial mortgage backed securities.owned portfolio.
With the unanimous approval of our board of directors, we engaged an independent third-partyThese valuation firm to estimate the fair value of our loans. The valuation firmfirms estimated the value of our loan portfolio by applyingusing customary valuation methods, including a discounted cash flow analysis with respect to eachour loan portfolio, available market pricing information with respect to determineour securities portfolio, and real estate appraisals with respect to our real estate owned portfolio. Based on these methodologies these firms determined a range of estimated valuations. To estimate the Company’s NAV, the Advisor adjusted the loan portfolio valuation prepared by the valuation advisor by addingadded the amounts of cash and other tangible assets reflected on our balance sheet (as computed in accordance with GAAP) and subtractingsubtracted our liabilities as reflected on our balance sheet (computed in accordance with GAAP). Based in part on these valuation ranges,this the Advisor estimated that the Company’s NAV as of September 30, 20192020 is $18.57$17.88 which falls withinis the midpoint of the valuation range of $18.07$17.14 to $19.15.$18.62.
The Advisor recommended our board of directors approve the estimated per share NAV of $18.57.$17.88. As with any methodology used to estimate value, the methodologies employed to estimate the NAV were based upon a number of estimates and assumptions that may not be accurate or complete. If different judgments, assumptions or opinions were used, a different estimate would likely result.
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We believe that the method used to determine the estimated per share NAV of the Company’s common stock is the methodology most commonly used by public, non-listed REITs to estimate per share NAV. The estimated per share NAV does not represent the per share amount a third party would pay to acquire us, or the price at which our common stock would trade in

the event we were listed on a national securities exchange. For example, the estimated per share NAV of the Company’s common stock does not reflect a liquidity discount for the fact that the shares are not currently traded on a national securities exchange and other costs that may be incurred in connection with a liquidity event. Our estimated per share NAV does not reflect the conversion of any of our Series A convertible preferred stock ("Series A Preferred Stock") or Series C convertible preferred stock (“Series C Preferred Stock.Stock,” and with the Series A Preferred Stock, the “Preferred Stock”).
The estimated per share NAV was determined at a moment in time and as of the Valuation Date and the values of our assets and liabilities will change over time as a result of changes relating to the individual loans in our portfolio as well as changes and developments in the real estate and capital markets generally, including changes in interest rates. StockholdersFor example, material adverse developments in the real estate or credit markets related to the COVID-19 pandemic after September 30, 2020 would have a significant impact on our estimated per share NAV. Therefore, stockholders should not rely on the estimated per share NAV in making a decision to buy or sell shares of our common stock.
Significant Accounting Estimates and Critical Accounting Policies
Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. In preparing the financial statements, management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. As our expected operating plans occur, we will describe additional critical accounting policies in the notes to our future financial statements in addition to those discussed below.
Set forth below is a summary of the significant accounting estimates and critical accounting policies that management believes are important to the preparation of our financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by our management. As a result, these estimates are subject to a degree of uncertainty.
Commercial Mortgage Loans
Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses.credit loss. Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in our consolidated statements of operations. Guaranteed loan exit fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method. The accretion of guaranteed loan exit fees is recognized in interest income in our consolidated statements of operations and the associated receivable is included in the consolidated balance sheet.
Commercial mortgage loans that are intended to be sold in the foreseeable future are reported as held-for-sale and are transferred at fair value then recorded at the lower of cost or fair value with changes recorded through the statement of operations. Unamortized loan origination costs for commercial mortgage loans held-for-sale that are carried at the lower of cost or fair value are capitalized as part of the carrying value of the loans and recognized upon the sale of such loans. Amortization of origination costs ceases upon transfer of commercial mortgage loans to held-for-sale.
The Company has elected to measure commercial mortgage loans held-for-sale in the Company's TRS under the fair value option to better reflect those commercial mortgage loans that are part of securitization warehousing activity. These commercial mortgage loans are included in the Commercial mortgage loans, held-for-sale, measured at fair value in the consolidated balance sheet. Interest income received on commercial mortgage loans held-for-sale is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. Acquisition expenses on originating these investments are expensed when incurred.
Allowance
25

Real Estate Owned
Real estate owned assets are carried at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment.
Real estate owned assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for Loanbuildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate owned assets are capitalized and depreciated over their estimated useful lives. Real estate owned revenue is recognized when the Company satisfies a performance obligation by transferring a promised good or service to a customer. The Company is considered to have satisfied all performance obligation at a point in time.
Real estate owned assets that are probable to be sold within one year are reported as held-for-sale. Real estate owned assets classified as held-for-sale shall be measured at the lower of its carrying amount or fair value less cost to sell. Real estate owned assets shall not be depreciated or amortized while it is classified as held-for-sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held-for-sale shall continue to be accrued. Upon the disposition of a real estate owned asset, the Company calculates realized gains and losses as net proceeds received less the carrying value of the real estate owned asset. Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.
Credit Losses
The allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan losses reflects management'scommitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan losses inherent in the loan portfolio asterm, property type, occupancy and geographic location, financial performance of the balance sheet date. The reserve is increased through the loan loss provision on the Company's consolidated statementborrower, expected payments of operationsprincipal and is decreased by charge-offs when losses are confirmed through the receipt of assets, suchinterest, as cash in a pre-foreclosure salewell as internal or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. external information relating to past events, current conditions and reasonable and supportable forecasts.
The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.
In measuring the allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses includesis calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model principally utilizes historical loss rates derived from a general, formula-based componentcommercial mortgage backed securities database with historical losses from 1998 to 2020 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an asset-specific component.

General reserves are recordedimmediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when (i) available information as of each balance sheet date indicates that it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a loss has occurred indiscounted cash flow (“DCF”) methodology.
For financial instruments where the portfolioborrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and (ii) the amountrepayment is expected to be provided substantially through the operation or sale of the loss can be reasonably estimated. Thecollateral, the Company currently estimates loss rates based on historical realized losses experienced inmay elect to use as a practical expedient the industry and takes into account currentfair value of the collateral and economic conditions affectingat the probability and severity of lossesreporting date when establishingdetermining the allowance for loancredit losses. The
In developing the allowance for credit losses for its loans held for investment, the Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investmentcollectability, using similar factors as those in collateral, collateral type, project economics and geographic location as well as national and regional economic factors.developing the allowance for credit losses. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.loss with the ratings updated quarterly.
The asset-specific reserve component relatesLoans are placed on nonaccrual status and considered non-performing when full payment of principal and interest is unpaid for 90 days or more or where reasonable doubt exists as to reservestimely collection, unless the loan is both well secured and in the process of collection. Interest received on nonaccrual status loans are accounted for losses on individual impaired loans. Theunder the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company considersmay return a loan to be impairedaccrual status when based upon current informationrepayment of principal and events, it believes that itinterest is probable that the Company will be unable to collect all amounts due under the contractual termsreasonably assured.
26

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral.
A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans.
The Company designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-performing and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged.
Real Estate Securities
On the acquisition date, all of our commercial real estate securities will be classified as available for sale and will be carried at fair value, with any unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. However, we may elect to transfer these assets to trading securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded as unrealized gains or losses on investments in our consolidated statements of operations. Related discounts, premiums, and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the consolidated statements of operations.
Credit Impairment Analysis of Real Estate Securities
Commercial real estate securities for which the fair value option has not been elected will be periodically evaluated for other-than-temporarycredit impairment. IfAFS real estate securities which have experienced a decline in the fair value of a security is less than itsbelow their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the securitydecline in fair value is considered impaired. Impairmentdue to credit-related factors. Any impairment that is not credit-related is recognized in other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of a security will be considered to be other-than-temporary when (i)operations. If the Advisor has the intentCompany intends to sell thean impaired security; (ii) it isreal estate security or more likely than not we will be required to sell the security; or (iii) the Advisor does not expect to recoversuch a security before recovering its amortized cost basis, the entire amortized cost ofimpairment amount is recognized in the security. If the Advisor determines that an other-than-temporary impairment exists and a sale is likely, the impairment charge will be recognized as an impairment of assets on our consolidated statements of operations. If a sale is not expected, the portion of the impairment charge related to credit factors will be recorded as an impairment of assets on our consolidated statements of operations with a corresponding adjustment to the remainder recordedsecurity’s amortized cost basis.
The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the underlying assets in the security, borrower financial resources and investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.
The non-credit loss component of the unrealized loss within the Company’s AFS portfolio is recognized as an unrealized gain or loss on investments reported as a component of accumulatedadjustment to the individual security’s asset balance with an offsetting entry to other comprehensive income or loss.in the consolidated balance sheets.
Commercial real estate securities for which the fair value option has been elected will not be evaluated for other-than-temporary impairment as changes in fair value are recorded in our consolidated statement of operations.

Income Taxes
The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distribute at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on our income in addition to U.S. federal income and excise taxes on its undistributed income. The Conduit business segment is operated through the Company’s TRS. The TRS is subject to U.S. federal and applicable state income taxes.
Derivatives and Hedging Activities
The Company recognizes all derivatives on the consolidated balance sheets at fair value.  The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in gain/(loss) on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately on the Company’s consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.
Per Share Data
The Company’s seriesSeries of preferred stockPreferred Stock are considered to be participating securities. As such, the Company is required to include the Preferred Stock in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. Diluted earnings per share reflects the potential dilution that could occur from shares outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of the Company’s Preferred Stock, except when doing so would be anti-dilutive.
27

Results of Operations
Comparison of the Year Ended December 31, 20192020 to the Year Ended December 31, 20182019
The Company conducts its business through the following segments:
The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans,mortgages, subordinate mortgages, mezzanine loans and participations in such loans.
The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.
The Conduitconduit business operated through the Company's TRS, which is focused on generating superior risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.
The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.
Net Interest Income
Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities and TRS segments.
The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the years ended December 31, 2020 and 2019 (dollars in thousands):
Year Ended December 31,
20202019
Average Carrying Value (1)
Interest Income / Expense (2)
WA Yield / Financing Cost (3)
Average Carrying Value (1)
Interest Income / Expense (2)
WA Yield / Financing Cost (3)
Interest-earning assets:
Real estate debt$2,606,081$165,907 6.4 %$2,482,946$181,434 7.3 %
Real estate conduit83,6183,111 3.7 %132,0427,716 5.8 %
Real estate securities351,85910,854 3.1 %153,4846,149 4.0 %
   Total$3,041,558 $179,872 5.9 %$2,768,472 $195,299 7.1 %
Interest-bearing Liabilities:
Repurchase agreements - commercial mortgage loans$249,289$10,908 4.4 %$259,945$16,816 6.5 %
Other financing and loan participation- commercial mortgage loans16,704916 5.5 %2,686225 8.4 %
Repurchase agreements - real estate securities313,22713,637 4.4 %161,4605,117 3.2 %
Collateralized loan obligations1,706,20741,095 2.4 %1,641,74067,927 4.1 %
Derivative instruments— N/A334  N/A
   Total$2,285,427$66,556 2.9 %$2,065,831$90,419 4.4 %
Net interest income/spread$113,316 3.0 %$104,880 2.7 %
Average leverage % (4)
75.1 %74.6 %
Weighted average levered yield (5)
15.0 %14.9 %
________________________
(1) Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. Amounts are calculated based on daily averages for the years ended December 31, 2020 and 2019, respectively.
(2) Includes the effect of amortization of premium or accretion of discount and deferred fees.
(3) Calculated as interest income or expense divided by average carrying value.
(4) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.
(5) Calculated by dividing net interest income/spread by the average interest-earning assets less average interest-bearing liabilities.
28

Interest income
Interest income for the years ended December 31, 2020 and 2019 totaled $179.9 million and $195.3 million, respectively. As of December 31, 2020, our portfolio consisted of 130 commercial mortgage loans, three commercial mortgage loans, held-for-sale, measured at fair value and nine investments in CMBS. The main driver in the decrease in interest income was due to a decrease in the one-month LIBOR, the benchmark index for our loans. The decrease in the one-month LIBOR was partially offset by the index floors we have on our loans and a higher average carrying value of interest-earning assets in the year ended December 31, 2020.
Interest expense
Interest expense for the year ended December 31, 2020 decreased to $66.6 million compared to interest expense for the year ended December 31, 2019 of $90.4 million. Similar to our interest income, the decrease in interest expense was due to a decrease in the one-month LIBOR, the benchmark index for our financing lines.
Realized Gain/Loss on Commercial Mortgage Loans Held-for-Sale
Realized gain on commercial mortgage loans held-for-sale, measured at fair value at the TRS for the year ended December 31, 2020 was $15.9 million compared to $37.8 million for the year ended December 31, 2019. The $21.9 million decrease in realized gain was due to lower sales volumes with total proceeds of $328.1 million from the sale of fixed-rate commercial real estate loans into the CMBS securitization market during the year ended December 31, 2020 versus transactions of total proceeds of $1,013.1 million for the year ended December 31, 2019.
Realized Gain/Loss on Real Estate Securities Available for Sale
For the year ended December 31, 2020 our real estate securities, available for sale, measured at fair value had a realized loss of $10.1 million included within the consolidated statements of operations. The loss is attributable to 20 CMBS securities sold during the year ended December 31, 2020 in response to the dislocations in the capital markets due to COVID-19. There had been no sales of CMBS securities during the year ended December 31, 2019.
Unrealized Gain/Loss on Real Estate Securities Available for Sale
For the year ended December 31, 2020 our real estate securities, available for sale, measured at fair value had an unrecognized unrealized loss of $7.3 million included within the consolidated statements of comprehensive income. The deterioration in fair value of real estate securities for the year ended December 31, 2020 can be attributed to the significant market volatility and credit uncertainties related to the outbreak of COVID-19 followed by some recovery in CMBS markets in the second half of 2020.
Expenses from operations
Expenses from operations for the years ended December 31, 2020 and 2019 were made up of the following (dollars in thousands):
Year Ended December 31,
20202019
Asset management and subordinated performance fee$15,178 $16,226 
Acquisition expenses696 900 
Administrative services expenses13,120 16,363 
Professional fees10,964 11,631 
Real estate owned operating expenses3,653 2,802 
Depreciation and amortization2,233 507 
Other expenses3,312 3,771 
Total expenses from operations$49,156 $52,200 
The decrease in our expenses from operations was primarily related to lower administrative services expenses. The decrease in administrative services expenses was due to fewer conduit activities during the twelve months ended December 31, 2020, compared to the twelve months ended December 31, 2019. The decrease in asset management and subordinated performance fee was primarily driven by the lower stockholders’ equity and preferred stock for the year ended December 31, 2020, compared to the year ended December 31, 2019. The increase in depreciation and amortization expense was due to $2.2 million of expenses incurred on a total of two real estate owned assets during the twelve months ended December 31, 2020, compared to $0.5 million incurred on two real estate owned assets during the twelve months ended December 31, 2019.
29

Comparison of the Year Ended December 31, 2019 to the Year Ended December 31, 2018
Net Interest Income
Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt and real estate securities segments.
The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the years ended December 31, 2019 and December 31, 2018 (dollars in thousands):
Year Ended December 31,
20192018
Average Carrying Value (1)
Interest Income / Expense (2)
WA Yield / Financing Cost (3)
Average Carrying Value (1)
Interest Income / Expense (2)
WA Yield / Financing Cost (3)
Interest-earning assets:
Real estate debt$2,482,946$181,434 7.3 %$1,877,159$144,967 7.7 %
Real estate conduit132,0427,716 5.8 %106,7036,604 6.2 %
Real estate securities153,4846,149 4.0 %15,166717 4.7 %
   Total$2,768,472$195,299 7.1 %$1,999,028$152,288 7.6 %
Interest-bearing Liabilities:
Repurchase agreements - commercial mortgage loans$259,945$16,816 6.5 %$285,257$17,023 6.0 %
Other financing and loan participation- commercial mortgage loans2,686225 8.4 %9,4461,244 13.2 %
Repurchase agreements - real estate securities161,4605,117 3.2 %21,986770 3.5 %
Collateralized loan obligations1,641,74067,927 4.1 %1,124,42450,679 4.5 %
Derivative instruments334  N/A284 N/A
   Total$2,065,831$90,419 4.4 %$1,441,113$70,000 4.9 %
Net interest income/spread$104,880 2.7 %$82,288 2.7 %
Average leverage % (4)
74.6 %72.1 %
Weighted average levered yield (5)
14.9 %14.7 %
________________________

  Year Ended December 31,
  2019 2018
  
Average Carrying Value(1)
 
Interest Income/Expense(2)
 
WA Yield/Financing Cost(3)
 
Average Carrying Value(1)
 
Interest Income/Expense(2)
 
WA Yield/Financing Cost(3)
Interest-earning assets:            
Real estate debt $2,482,946
 181,434
 7.3% $1,877,159
 $144,967
 7.7%
Real estate conduit 132,042
 7,716
 5.8% 106,703
 6,604
 6.2%
Real estate securities 153,484
 6,149
 4.0% 15,166
 717
 4.7%
Total $2,768,472
 $195,299
 7.1% $1,999,028
 $152,288
 7.6%
Interest-bearing liabilities:            
Repurchase agreements - commercial mortgage loans $259,945
 $16,816
 6.5% $285,257
 $17,023
 6.0%
Other financing and loan participation - commercial mortgage loans 2,686
 225
 8.4% 9,446
 1,244
 13.2%
Repurchase agreements - real estate securities 161,460
 5,117
 3.2% 21,986
 770
 3.5%
Collateralized loan obligations 1,641,740
 67,927
 4.1% 1,124,424
 50,679
 4.5%
Derivative instruments, at fair value 
 334
 N/A
 
 284
 N/A
Total $2,065,831
 $90,419
 4.4% $1,441,113
 $70,000
 4.9%
Net interest income/spread   $104,880
 2.7%   $82,288
 2.7%
Average leverage %(4)
 74.6%     72.1%    
Weighted average levered yield(5)
     14.9%   

 14.7%
________________________
(1)Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. AmountsAll amounts are calculated based on dailyquarterly averages for the years ended December 31, 2019 and 2018, respectively.2018.
(2)Includes the effect of amortization of premium or accretion of discount and deferred fees.
(3) Calculated as interest income or expense divided by average carrying value.
(4) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.
(5)Calculated by dividing net interest income/spread by the net averageof interest-earning assets and average interest-bearing liabilities.
Interest income
Interest income for the years ended December 31, 2019 and December 31, 2018 totaled $195.3 million and $152.3 million, respectively. As of December 31, 2019, our portfolio consisted of 122 commercial mortgage loans, seven7 commercial mortgage loans, held-for-sale, measured at fair value and 21 investments in CMBS. The main driver in the increase in interest income was an increase of $769.4 million in the average carrying value of our interest-earning assets.
Interest expense
Interest expense for the year ended December 31, 2019 increased to $90.4 million compared to interest expense for the year ended December 31, 2018 of $70.0 million. The increase in interest expense was due to an increase of $624.7 million in the average carrying value of our interest-bearing liabilities.
Realized Gain/Loss on Commercial Mortgage Loans Held-for-Sale
Realized gain on commercial mortgage loans held-for-sale, measured at fair value at the TRS for the year ended December 31, 2019 was $37.8 million compared to $11.3 million for the year ended December 31, 2018. The $26.5 million increase in realized gain was due to total proceeds of $1,013.1 million from the sale of fixed-rate commercial real estate loans into the CMBS securitization market during the year ended December 31, 2019 versus transactions of total proceeds of $567.4 million for the year ended December 31, 2018.
30

Expenses from operations
Expenses from operations for the years ended December 31, 2019 and December 31, 2018 were made up of the following (dollars in thousands):

  Year Ended December 31,
  2019 2018
Asset management and subordinated performance fee $16,226
 $10,299
Administrative services expenses 16,363
 13,446
Acquisition fees and acquisition expenses
 900
 452
Professional fees 11,631
 8,318
Other expenses 3,771
 4,887
Real estate owned operating expense 2,802
 
Depreciation and amortization 507
 
Total expenses from operations $52,200
 $37,402
Year Ended December 31,
20192018
Asset management and subordinated performance fee$16,226 $10,299 
Acquisition expenses900 452 
Administrative services expenses16,363 13,446 
Professional fees11,631 8,318 
Real estate owned operating expenses2,802 — 
Depreciation and amortization507 — 
Other expenses3,771 4,887 
Total expenses from operations$52,200 $37,402 
The increase in our expenses from operations was primarily related to asset management and subordinated performance fees, administrative services expenses and professional fees.
The increase in asset management and subordinated performance fee was primarily driven by the larger stockholders’ equity and preferred stock for the year ended December 31, 2019, compared to the year ended December 31, 2018. In addition to a higher equity base, we accrued approximately $2.0 million of subordinated performance fee during the year ended December 31, 2019 compared to $0.0 million during the year ended December 31, 2018. The increase in administrative services expenses and professional fees was primarily driven by the increase in outstanding equity during 2019 and a larger portfolio. In addition, the increase in real estate owned operating expense was driven by the two new real estate owned assets on our balance sheet for the year ended December 31, 2019, compared to none for the year ended December 31, 2018.

Comparison of the Year Ended December 31, 2018 to the Year Ended December 31, 2017Portfolio
Net Interest Income
Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt and real estate securities segments.
The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the years ended December 31, 2018 and December 31, 2017 (dollars in thousands):
  Year Ended December 31,
  2018 2017
  
Average Carrying Value(1)
 
Interest Income/Expense(2)
 
WA Yield/Financing Cost(3)
 
Average Carrying Value(1)
 
Interest Income/Expense(2)
 
WA Yield/Financing Cost(3)
Interest-earning assets:            
Real estate debt $1,877,159
 $144,967
 7.7% $1,208,603
 $87,014
 7.2%
Real estate conduit 106,703
 6,604
 6.2% 23,221
 1,199
 5.2%
Real estate securities 15,166
 717
 4.7% 19,016
 1,351
 7.1%
Total 1,999,028
 152,288
 7.6% 1,250,840
 89,564
 7.2%
Interest-bearing liabilities:            
Repurchase agreements - commercial mortgage loans $285,257
 $17,023
 6.0% $300,199
 $14,142
 4.7%
Other financing and loan participation - commercial mortgage loans 9,446
 1,244
 13.2% 20,086
 1,213
 N/A
Repurchase agreements - real estate securities 21,986
 770
 3.5% 50,379
 1,499
 3.0%
Collateralized loan obligations 1,124,424
 50,679
 4.5% 406,262
 15,385
 3.8%
Derivative instruments, at fair value 
 284
 N/A
 
 120
 N/A
Total $1,441,113
 $70,000
 4.9% $776,926
 $32,359
 4.2%
Net interest income/spread   $82,288
 2.7%   $57,205
 3.0%
Average leverage %(5)
 72.1%     62.1%    
Weighted average levered yield(6)
     14.7%     12.1%
________________________
(1) Based on amortized cost for real estate debt and real estate securities and principal amount for repurchase agreements. All amounts are calculated based on quarterly averages for years ended December 31, 2018 and 2017.
(2) Includes the effect of amortization of premium or accretion of discount and deferred fees.
(3) Calculated as interest income or expense divided by average carrying value.
(5) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.
(6) Calculated by dividing net interest income/spread by the net of interest-earning assets and interest-bearing liabilities.
Interest income
Interest income for the years ended December 31, 2018 and 2017 totaled $152.3 million and $89.6 million, respectively. As of December 31, 2018,2020 and 2019, our portfolio consisted of 100130 and 122 commercial mortgage loans, 7 commercial mortgage loans, held-for-sale, measured at fair value and two investments in CMBS. The main drivers in the increase in interest income were the increase in the 1 Month LIBOR, the benchmark for our loans and an increase of $748.2 million in the average carrying value of our interest-earning assets. The increase in interest income was due to the formation of the TRS in September 2017.
Interest expense
Interest expense for the year ended December 31, 2018 increased to $70.0 million compared to interest expense for the year ended December 31, 2017 of $32.4 million. The increase in interest expense was due to an increase in the 1 Month LIBOR, the benchmark index for our financing lines and an increase of $664.2 million in the average carrying value of our interest-bearing liabilities, of which approximately $718.2 million is an increase due to two CLOs issued in 2018. The increase in interest expense was also due to the formation of the TRS in September 2017.
Realized Gain/Loss on Commercial Mortgage Loans Held-for-Sale
Realized loss on commercial mortgage loans held-for-sale for the year ended December 31, 2018 was $9.0 thousand on sale of 5 commercial mortgage loans held-for-sale for proceeds of $20.6 million compared to $120.0 thousand realized gain for the year ended December 31, 2017 on sale of 15 commercial mortgage loans held-for-sale for total proceeds of $121.7 million.

Realized gain on commercial mortgage loans held-for-sale, measured at fair value at the TRS for the year ended December 31, 2018 was $11.3 million compared to $4.5 million for the year ended December 31, 2017. The $6.8 million increase in realized gain was due to total proceeds of $567.4 million from the sale of fixed-rate commercial real estate loans into the CMBS securitization market during the year ended December 31, 2018 versus limited transaction of total proceeds of $20.6 million for the year ended December 31, 2017 due to the formation of the TRS in September 2017.
Expenses from operations
Expenses from operations for the years ended December 31, 2018 and 2017 were made up of the following (dollars in thousands):
  Year Ended December 31,
  2018 2017
Asset management and subordinated performance fee $10,299
 $9,273
Administrative services expenses 13,446
 6,765
Acquisition fees and acquisition expenses
 452
 4,197
Professional fees 8,318
 5,444
Other expenses 4,887
 3,837
Total expenses from operations $37,402
 $29,516
The increase in our expenses from operations was primarily related to asset management and subordinated performance fees, administrative services expenses and professional fees. During the years ended December 31, 2018 and 2017, we incurred asset management and subordinated performance fees of $10.3 million and $9.3 million, respectively. The entire $10.3 million in the asset management and subordinated performance fee line is composed of asset management fees, as there was no subordinated performance fee for 2018 due to applicable conditions not having been satisfied. The increase in asset management fees was due to additional equity raised during the year ended December 31, 2018. For the year ended December 31, 2018, we incurred approximately $13.4 million of administrative service expenses related to general and administrative expense reimbursement, of which the full amount was attributable to our Advisor; compared to $6.8 million of administrative services expense for the year ended December 31, 2017, an increase of approximately $6.6 million. Additionally, during the year ended December 31, 2018 and December 31, 2017, we incurred $8.3 million and $5.4 million of professional fees, respectively, an increase of approximately $2.9 million. The increases in administrative services expenses and professional fee are due to increases in overall Company growth, origination activities and the addition of the Conduit business.
Portfolio
As of December 31, 2019 and 2018, our portfolio consisted of 122 and 100 commercial mortgage loans, excluding commercial mortgage loans accounted for under the fair value option, respectively.option. The commercial mortgage loans held for investment as of December 31, 20192020 and December 31, 20182019 had a total carrying value, net of allowance for loancredit losses, of $2,762.0$2,693.8 million and $2,206.8$2,762.0 million, respectively. As of December 31, 20192020 and 20182019 the Company's total commercial mortgage loans, held for sale,held-for-sale, measured at fair value comprised of 7three loans with total fair value of $67.6 million and seven loans with total fair value of $112.6 million, respectively. As of December 31, 2020 and 7 loans2019, our real estate securities, available for sale, at fair value comprised of nine CMBS investments with total fair value of $76.9$171.1 million respectively. As of December 31, 2019, the Company hadand 21 CMBS investments with total fair value of $386.3 million. We had $26.4 million CMBS investments asAs of December 31, 2018. For2020 and December 31, 2019, our commercial mortgage loans, excluding commercial mortgage loans accounted for under theother real estate investments, measured at fair value, option, we currently estimate loss rates based on historical realized losses experienced in the industry and take into account current collateral and economic conditions affecting the probability or severitycomprised one investment with a total fair value of losses when establishing the allowance for loan losses. The allowance for loan loss as of December 31, 2019 and 2018 is $0.9$2.5 million and $4.8$2.6 million, respectively. As of December 31, 2020 and December 31, 2019, our real estate owned portfolio comprised one investment with a carrying value of $26.5 million and two investments with a carrying value of $35.3 million, respectively.
As of December 31, 2020, we had two loans with unpaid contractual principal balance for a total carrying value of $94.9 million, one with interest past due for greater than 90 days and the Companyother with interest past due greater than 30 days. We did not take any asset specific reserves for these loans. As of December 31, 2019, we had one loan with an unpaid contractual principal balance and carrying value of $57.1 million that had interest past due for greater than 90 days. As of December 31, 2018, the Company had one loan with an unpaid principal balance of $14.3 million that had interest past due for greater than 90 days.
As of December 31, 20192020 and 2018,2019, our commercial mortgage loans, excluding commercial mortgage loans accounted for under the fair value option, had a weighted average coupon of 5.6%5.5% and 6.7%5.6%, and a weighted average remaining life of 1.81.7 years and 1.51.8 years, respectively. As of December 31, 20192020 and 2018,2019, our CMBS investments had a weighted average coupon of 3.7%2.2% and 5.0%3.7%, and a weighted average remaining life of 15.812.8 years and 4.915.8 years, respectively.

31

The following charts summarize our commercial mortgage loans, held for investment, by thecoupon rate type, collateral type and geographical region and coupon rate type as of December 31, 20192020 and 2018:2019:
chart-4a92a28574715d78a43.jpgchart-027c51e044915a38948.jpgbsprt-20201231_g1.jpgbsprt-20201231_g2.jpg

32

chart-557eb3101a0d5858b2c.jpgchart-c749dca00ecc530ea30.jpgbsprt-20201231_g3.jpgbsprt-20201231_g4.jpg



33

chart-da5a393a219251349a1.jpgchart-b883ee76f49c541090b.jpgbsprt-20201231_g5.jpgbsprt-20201231_g6.jpg


An investments region classification is defined according to the below map based on the location of investments secured property.
bsprt-20201231_g7.jpg



34

The following charts show the par value by contractual maturity year for the investments in our portfolio as of December 31, 20192020 and 2018:2019:
chart-b50a972846c256d6ba6.jpgbsprt-20201231_g8.jpg


chart-3d4e6718831354069c4.jpgbsprt-20201231_g9.jpg



35

The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of December 31, 20192020 (dollars in thousands):
Loan TypeProperty TypePar Value
Interest Rate (1)
Effective Yield
Loan to Value (2)
Senior Debt 1Industrial$33,6551 month LIBOR + 4.00%4.20%65.0%
Senior Debt 2Mixed Use12,8391 month LIBOR + 5.00%5.75%73.3%
Senior Debt 3Office14,0341 month LIBOR + 4.45%5.45%64.2%
Senior Debt 4Office8,3911 month LIBOR + 6.00%7.00%74.0%
Senior Debt 5Multifamily37,8121 month LIBOR + 3.35%5.60%76.0%
Senior Debt 6Office26,8111 month LIBOR + 4.15%5.40%69.5%
Senior Debt 7Hospitality10,4001 month LIBOR + 6.25%6.50%61.6%
Senior Debt 8Hospitality5,8941 month LIBOR + 3.50%4.50%77.0%
Senior Debt 9Hospitality57,0751 month LIBOR + 5.19%6.19%51.8%
Senior Debt 10Multifamily77,9451 month LIBOR + 4.50%5.50%22.4%
Senior Debt 11Hospitality10,2501 month LIBOR + 5.25%6.25%60.7%
Senior Debt 12Hospitality23,0001 month LIBOR + 6.00%6.50%48.1%
Senior Debt 13Office23,7261 month LIBOR + 5.15%6.60%56.4%
Senior Debt 14Multifamily41,8261 month LIBOR + 3.70%4.50%63.7%
Senior Debt 15Hospitality28,2721 month LIBOR + 4.00%5.25%68.0%
Senior Debt 16Hospitality22,7001 month LIBOR + 4.40%5.00%72.7%
Senior Debt 17Multifamily35,8861 month LIBOR + 3.00%4.50%83.6%
Senior Debt 18Self Storage3,8511 month LIBOR + 4.05%5.00%45.5%
Senior Debt 19Self Storage6,4961 month LIBOR + 4.05%5.05%55.8%
Senior Debt 20Self Storage7,6061 month LIBOR + 4.05%5.05%57.6%
Senior Debt 21Self Storage2,4001 month LIBOR + 4.05%5.00%37.6%
Senior Debt 22Self Storage6,3101 month LIBOR + 5.05%5.19%59.1%
Senior Debt 23Hospitality22,3551 month LIBOR + 3.50%4.80%68.8%
Senior Debt 24Mixed Use59,4511 month LIBOR + 4.87%5.27%49.0%
Senior Debt 25Office21,1001 month LIBOR + 3.75%5.80%70.0%
Senior Debt 26Self Storage6,2991 month LIBOR + 6.00%7.75%58.9%
Senior Debt 27Office16,3421 month LIBOR + 3.40%5.30%67.5%
Senior Debt 28Retail29,5006.25%6.25%68.5%
Senior Debt 29Self Storage11,9661 month LIBOR + 5.50%7.25%68.1%
Senior Debt 30Multifamily16,1721 month LIBOR + 3.15%4.95%80.3%
Senior Debt 31Multifamily22,4171 month LIBOR + 3.40%4.95%80.5%
Senior Debt 32Multifamily29,8681 month LIBOR + 3.35%5.25%73.0%
Senior Debt 33Land16,4001 month LIBOR + 6.00%8.25%45.7%
Senior Debt 34Hospitality8,5231 month LIBOR + 4.80%6.75%62.5%
Senior Debt 35Industrial14,1601 month LIBOR + 3.95%5.95%66.4%
Senior Debt 36Multifamily48,5001 month LIBOR + 3.75%6.15%69.5%
Senior Debt 37Multifamily23,2951 month LIBOR + 5.70%7.50%70.7%
Senior Debt 38Office7,2001 month LIBOR + 3.90%5.95%67.6%
Senior Debt 39Manufactured Housing8,8931 month LIBOR + 4.40%6.50%60.3%
Senior Debt 40Hospitality14,0001 month LIBOR + 4.47%6.72%44.8%
Senior Debt 41Retail14,2501 month LIBOR + 3.95%6.45%61.2%
Senior Debt 42Hospitality21,0001 month LIBOR + 4.14%6.64%56.0%
Senior Debt 43Multifamily24,7111 month LIBOR + 3.10%5.40%73.1%
Senior Debt 44Multifamily37,6431 month LIBOR + 3.10%5.40%73.4%
Senior Debt 45Office42,6311 month LIBOR + 3.50%5.75%71.0%
Senior Debt 46Retail8,5001 month LIBOR + 7.50%7.64%51.6%
36

Loan TypeProperty TypePar Value
Interest Rate (1)
Effective Yield
Loan to Value (2)
Senior Debt 1Retail$9,450 1 month LIBOR + 4.50%6.26%69.2%
Senior Debt 2Office10,699 1 month LIBOR + 4.65%6.41%70.8%
Senior Debt 3Industrial33,655 1 month LIBOR + 4.00%5.76%65.0%
Senior Debt 4Mixed Use12,952 1 month LIBOR + 5.00%6.76%73.3%
Senior Debt 5Office14,080 1 month LIBOR + 4.45%6.21%64.2%
Senior Debt 6Office10,533 1 month LIBOR + 6.00%7.76%74.0%
Senior Debt 7Multifamily38,248 1 month LIBOR + 3.35%5.11%76.0%
Senior Debt 8Office27,662 1 month LIBOR + 4.15%5.91%69.5%
Senior Debt 9Multifamily34,875 1 month LIBOR + 3.75%5.51%71.2%
Senior Debt 10Hospitality10,599 1 month LIBOR + 5.00%6.76%61.6%
Senior Debt 11Hospitality5,930 1 month LIBOR + 3.50%5.26%77.0%
Senior Debt 12Multifamily18,985 1 month LIBOR + 3.62%5.38%69.5%
Senior Debt 13Hospitality57,075 1 month LIBOR + 5.19%6.95%51.8%
Senior Debt 14Multifamily58,590 1 month LIBOR + 4.50%6.26%22.4%
Senior Debt 15Hospitality10,250 1 month LIBOR + 5.25%7.01%60.7%
Senior Debt 16Hospitality23,000 1 month LIBOR + 4.41%6.17%48.1%
Senior Debt 17Multifamily19,280 1 month LIBOR + 3.60%5.36%80.5%
Senior Debt 18Multifamily12,155 1 month LIBOR + 3.30%5.06%70.9%
Senior Debt 19Office24,426 1 month LIBOR + 4.65%6.41%56.4%
Senior Debt 20Hospitality21,000 1 month LIBOR + 4.00%5.76%54.8%
Senior Debt 21Office20,340 1 month LIBOR + 3.70%5.46%58.9%
Senior Debt 22Multifamily20,741 1 month LIBOR + 4.25%6.01%75.0%
Senior Debt 23Multifamily42,000 1 month LIBOR + 3.70%5.46%63.7%
Senior Debt 24Hospitality19,975 1 month LIBOR + 4.95%6.71%52.6%
Senior Debt 25Hospitality27,541 1 month LIBOR + 4.00%5.76%68.0%
Senior Debt 26Hospitality21,495 1 month LIBOR + 4.40%6.16%72.7%
Senior Debt 27Multifamily33,663 1 month LIBOR + 3.00%4.76%83.6%
Senior Debt 28Self Storage4,120 1 month LIBOR + 4.05%5.81%45.5%
Senior Debt 29Self Storage6,496 1 month LIBOR + 4.05%5.81%55.8%
Senior Debt 30Self Storage7,606 1 month LIBOR + 5.05%6.81%57.6%
Senior Debt 31Multifamily90,499 1 month LIBOR + 3.50%5.26%71.8%
Senior Debt 32Self Storage2,400 1 month LIBOR + 4.05%5.81%37.6%
Senior Debt 33Self Storage6,310 1 month LIBOR + 5.05%6.81%59.1%
Senior Debt 34Multifamily22,775 1 month LIBOR + 3.15%4.91%79.7%
Senior Debt 35Multifamily11,590 1 month LIBOR + 3.75%5.51%85.9%
Senior Debt 36Multifamily66,000 1 month LIBOR + 3.75%5.51%76.8%
Senior Debt 37Multifamily17,250 1 month LIBOR + 3.95%5.71%70.0%
Senior Debt 38Hospitality22,355 1 month LIBOR + 4.00%5.76%68.8%
Senior Debt 39Hospitality34,000 1 month LIBOR + 4.50%6.26%36.2%
Senior Debt 40Mixed Use45,856 1 month LIBOR + 4.87%6.63%49.0%
Senior Debt 41Multifamily12,007 1 month LIBOR + 3.50%5.26%74.6%
Senior Debt 42Multifamily18,000 1 month LIBOR + 3.30%5.06%83.1%
Senior Debt 43Office20,900 1 month LIBOR + 3.75%5.51%70.0%
Senior Debt 44Office50,000 1 month LIBOR + 4.23%6.00%59.6%
Senior Debt 45Self Storage6,600 1 month LIBOR + 6.00%7.76%58.9%
Senior Debt 46Multifamily7,250 1 month LIBOR + 4.00%5.76%75.6%
Senior Debt 47Multifamily115,069 1 month LIBOR + 3.10%4.86%79.1%
Senior Debt 48Office13,298 1 month LIBOR + 3.40%5.16%67.5%
Senior Debt 49Retail29,5006.25%6.25%68.5%
Senior Debt 50Multifamily25,500 1 month LIBOR + 3.50%5.26%73.3%
Senior Debt 51Self Storage12,125 1 month LIBOR + 5.50%7.26%68.1%
Senior Debt 52Office37,550 1 month LIBOR + 3.74%5.50%62.4%
Senior Debt 53Multifamily15,045 1 month LIBOR + 3.15%4.91%80.3%
Senior Debt 54Multifamily21,276 1 month LIBOR + 3.40%5.16%80.5%

Loan TypeProperty TypePar Value
Interest Rate (1)
Effective Yield
Loan to Value (2)
Senior Debt 47Hospitality10,5801 month LIBOR + 4.50%6.75%68.7%
Senior Debt 48Multifamily18,1001 month LIBOR + 3.40%5.35%76.4%
Senior Debt 49Hospitality19,9001 month LIBOR + 4.15%6.50%61.8%
Senior Debt 50Multifamily18,6561 month LIBOR + 3.10%5.50%67.4%
Senior Debt 51Office34,4001 month LIBOR + 3.90%6.15%68.2%
Senior Debt 52Hospitality20,9301 month LIBOR + 3.75%6.10%62.6%
Senior Debt 53Hospitality15,5001 month LIBOR + 4.00%6.50%56.4%
Senior Debt 54Hospitality5,2501 month LIBOR + 4.25%6.50%47.7%
Senior Debt 55Hospitality12,7501 month LIBOR + 4.45%6.85%62.9%
Senior Debt 56Hospitality9,5451 month LIBOR + 4.50%6.85%64.0%
Senior Debt 57Retail9,4001 month LIBOR + 4.20%6.30%77.1%
Senior Debt 58Manufactured Housing12,2001 month LIBOR + 3.65%5.90%48.4%
Senior Debt 59Manufactured Housing24,1001 month LIBOR + 3.65%5.90%53.8%
Senior Debt 60Multifamily23,1491 month LIBOR + 2.65%4.75%75.8%
Senior Debt 61Office29,7501 month LIBOR + 3.35%5.42%54.3%
Senior Debt 62Hospitality34,4841 month LIBOR + 3.99%5.74%31.0%
Senior Debt 63Multifamily12,8391 month LIBOR + 2.65%4.50%71.6%
Senior Debt 64Multifamily37,0211 month LIBOR + 2.75%4.50%79.3%
Senior Debt 65Industrial53,5001 month LIBOR + 3.75%5.50%59.7%
Senior Debt 66Office21,8251 month LIBOR + 3.50%5.40%70.9%
Senior Debt 67Hospitality7,1001 month LIBOR + 4.00%5.75%70.3%
Senior Debt 68Industrial22,2301 month LIBOR + 3.55%5.25%69.7%
Senior Debt 69Multifamily21,0831 month LIBOR + 2.75%4.25%71.7%
Senior Debt 70Multifamily27,0871 month LIBOR + 3.15%4.95%71.6%
Senior Debt 71Multifamily26,1301 month LIBOR + 2.70%2.84%76.0%
Senior Debt 72Multifamily7,1501 month LIBOR + 4.75%5.80%75.3%
Senior Debt 73Multifamily25,0001 month LIBOR + 3.00%4.50%75.5%
Senior Debt 74Office25,5001 month LIBOR + 4.35%6.05%64.9%
Senior Debt 75Multifamily14,1811 month LIBOR + 3.10%4.50%63.7%
Senior Debt 76Office48,2761 month LIBOR + 3.70%5.00%65.7%
Senior Debt 77Industrial25,3501 month LIBOR + 3.50%5.20%58.1%
Senior Debt 78Multifamily11,8001 month LIBOR + 3.15%4.75%72.4%
Senior Debt 79Office27,5981 month LIBOR + 2.70%2.84%71.4%
Senior Debt 80Multifamily75,1001 month LIBOR + 4.35%6.00%64.7%
Senior Debt 81Manufactured Housing1,3855.50%5.50%62.8%
Senior Debt 82Industrial14,6501 month LIBOR + 6.00%6.75%59.9%
Senior Debt 83Multifamily7,1491 month LIBOR + 4.75%5.75%62.6%
Senior Debt 84Multifamily6,7641 month LIBOR + 4.90%5.65%53.2%
Senior Debt 85Multifamily46,0001 month LIBOR + 4.75%5.75%69.4%
Senior Debt 86Multifamily5,5501 month LIBOR + 6.87%7.87%75.0%
Senior Debt 87Industrial16,4001 month LIBOR + 6.25%7.00%61.0%
Senior Debt 88Multifamily14,5051 month LIBOR + 4.75%5.50%65.3%
Senior Debt 89Multifamily23,4381 month LIBOR + 4.65%5.40%52.7%
Senior Debt 90Multifamily4,3001 month LIBOR + 5.50%6.50%87.4%
Senior Debt 91Manufactured Housing7,6801 month LIBOR + 4.50%5.00%66.7%
Senior Debt 92Mixed Use30,4651 month LIBOR + 5.15%6.15%67.0%
Senior Debt 93Multifamily3,1401 month LIBOR + 6.25%6.75%73.5%
Senior Debt 94Industrial24,6571 month LIBOR + 4.60%5.10%20.7%
37

Loan TypeProperty TypePar Value
Interest Rate (1)
Effective Yield
Loan to Value (2)
Senior Debt 55Multifamily29,900 1 month LIBOR + 3.35%5.11%73.0%
Senior Debt 56Multifamily38,928 1 month LIBOR + 3.10%4.86%75.5%
Senior Debt 57Self Storage17,400 1 month LIBOR + 4.00%5.76%69.5%
Senior Debt 58Multifamily10,020 1 month LIBOR + 3.45%5.21%76.8%
Senior Debt 59Multifamily73,620 1 month LIBOR + 3.45%5.21%76.3%
Senior Debt 60Land16,400 1 month LIBOR + 6.00%7.76%45.7%
Senior Debt 61Hospitality8,628 1 month LIBOR + 4.80%6.56%62.5%
Senior Debt 62Retail14,500 1 month LIBOR + 4.75%6.51%53.5%
Senior Debt 63Industrial11,358 1 month LIBOR + 3.95%5.71%66.4%
Senior Debt 64Multifamily87,700 1 month LIBOR + 2.99%4.75%46.0%
Senior Debt 65Multifamily48,500 1 month LIBOR + 3.75%5.51%69.5%
Senior Debt 66Multifamily31,906 1 month LIBOR + 3.25%5.01%73.8%
Senior Debt 67Multifamily52,031 1 month LIBOR + 5.20%6.96%70.7%
Senior Debt 68Office7,200 1 month LIBOR + 3.90%5.66%67.6%
Senior Debt 69Hospitality10,000 1 month LIBOR + 4.95%6.71%69.0%
Senior Debt 70Manufactured Housing8,356 1 month LIBOR + 3.90%5.66%60.3%
Senior Debt 71Self Storage4,710 1 month LIBOR + 5.00%6.76%66.7%
Senior Debt 72Hospitality7,620 1 month LIBOR + 3.44%5.21%44.8%
Senior Debt 73Retail14,250 1 month LIBOR + 3.95%5.71%61.2%
Senior Debt 74Hospitality21,000 1 month LIBOR + 4.14%5.91%56.0%
Senior Debt 75Office21,850 1 month LIBOR + 4.25%6.01%62.3%
Senior Debt 76Multifamily23,750 1 month LIBOR + 3.10%4.86%73.1%
Senior Debt 77Multifamily36,250 1 month LIBOR + 3.10%4.86%73.4%
Senior Debt 78Retail13,400 1 month LIBOR + 4.00%5.76%84.0%
Senior Debt 79Office41,293 1 month LIBOR + 3.50%5.26%71.0%
Senior Debt 80Retail8,500 1 month LIBOR + 5.00%6.76%51.6%
Senior Debt 81Hospitality8,180 1 month LIBOR + 4.50%6.26%68.7%
Senior Debt 82Multifamily18,100 1 month LIBOR + 3.40%5.16%76.4%
Senior Debt 83Multifamily28,250 1 month LIBOR + 3.40%5.16%77.2%
Senior Debt 84Hospitality19,900 1 month LIBOR + 3.48%5.24%61.8%
Senior Debt 85Multifamily18,553 1 month LIBOR + 3.10%4.86%67.4%
Senior Debt 86Office25,900 1 month LIBOR + 3.77%5.54%68.2%
Senior Debt 87Hospitality16,527 1 month LIBOR + 3.75%5.51%62.6%
Senior Debt 88Hospitality15,500 1 month LIBOR + 4.00%5.76%56.4%
Senior Debt 89Hospitality5,250 1 month LIBOR + 4.25%6.01%47.7%
Senior Debt 90Hospitality11,977 1 month LIBOR + 4.45%6.21%62.9%
Senior Debt 91Multifamily20,900 1 month LIBOR + 3.50%5.26%77.6%
Senior Debt 92Hospitality9,000 1 month LIBOR + 4.50%6.26%64.0%
Senior Debt 93Multifamily42,900 1 month LIBOR + 2.80%4.56%44.1%
Senior Debt 94Retail9,400 1 month LIBOR + 4.20%5.96%77.1%
Senior Debt 95Manufactured Housing12,200 1 month LIBOR + 3.65%5.41%48.4%
Senior Debt 96Manufactured Housing24,100 1 month LIBOR + 3.65%5.41%53.8%
Senior Debt 97Multifamily4,4525.53%5.53%66.0%
Senior Debt 98Multifamily23,115 1 month LIBOR + 2.65%4.41%75.8%
Senior Debt 99Office29,750 1 month LIBOR + 3.35%5.11%54.3%
Senior Debt 100Hospitality34,914 1 month LIBOR + 3.99%5.76%31.0%
Senior Debt 101Multifamily11,490 1 month LIBOR + 2.65%4.41%71.6%
Senior Debt 102Multifamily34,733 1 month LIBOR + 2.75%4.51%79.3%
Senior Debt 103Industrial51,500 1 month LIBOR + 3.75%5.51%59.7%
Senior Debt 104Office21,825 1 month LIBOR + 3.50%5.26%70.9%
Senior Debt 105Hospitality7,100 1 month LIBOR + 4.00%5.76%70.3%
Senior Debt 106Industrial22,230 1 month LIBOR + 3.55%5.31%69.7%
Senior Debt 107Multifamily19,575 1 month LIBOR + 2.75%4.51%71.7%
Senior Debt 108Multifamily16,100 1 month LIBOR + 3.75%5.51%64.9%
Senior Debt 109Multifamily26,000 1 month LIBOR + 3.15%4.91%71.6%
Senior Debt 110Retail9,120 1 month LIBOR + 5.25%7.01%71.8%
Senior Debt 111Multifamily25,320 1 month LIBOR + 2.70%4.46%76.0%

Loan TypeProperty TypePar Value
Interest Rate (1)
Effective Yield
Loan to Value (2)
Loan TypeProperty TypePar Value
Interest Rate (1)
Effective Yield
Loan to Value (2)
Senior Debt 95 (3)
Senior Debt 95 (3)
Multifamily1 month LIBOR + 5.25%5.39%—%
Senior Debt 96Senior Debt 96Hospitality27,0001 month LIBOR + 6.50%6.85%62.7%
Senior Debt 97Senior Debt 97Multifamily2,4651 month LIBOR + 5.75%6.50%66.6%
Senior Debt 98Senior Debt 98Multifamily50,0001 month LIBOR + 6.69%7.44%80.0%
Senior Debt 99Senior Debt 99Self Storage29,8951 month LIBOR + 5.00%5.25%58.8%
Senior Debt 100Senior Debt 100Multifamily11,6221 month LIBOR + 4.75%5.25%70.0%
Senior Debt 101Senior Debt 101Manufactured Housing3,4001 month LIBOR + 5.00%5.25%58.6%
Senior Debt 102Senior Debt 102Multifamily27,5501 month LIBOR + 5.75%6.00%69.8%
Senior Debt 103Senior Debt 103Multifamily76,0001 month LIBOR + 4.10%4.35%67.9%
Senior Debt 104Senior Debt 104Multifamily58,0001 month LIBOR + 5.25%5.39%74.7%
Senior Debt 105Senior Debt 105Manufactured Housing5,0201 month LIBOR + 5.25%5.39%65.9%
Senior Debt 106Senior Debt 106Office19,0031 month LIBOR + 4.50%5.25%47.9%
Senior Debt 107Senior Debt 107Office69,6755.15%52.5%
Senior Debt 108Senior Debt 108Office30,9001 month LIBOR + 5.20%5.45%66.0%
Senior Debt 109Senior Debt 109Multifamily10,9451 month LIBOR + 7.04%7.29%63.3%
Senior Debt 110Senior Debt 110Self Storage11,6001 month LIBOR + 4.76%5.01%66.6%
Senior Debt 111Senior Debt 111Industrial24,5521 month LIBOR + 4.35%4.60%69.8%
Senior Debt 112Multifamily7,150 1 month LIBOR + 4.75%6.51%75.3%Senior Debt 112Manufactured Housing5,0001 month LIBOR + 5.90%6.50%58.8%
Senior Debt 113Multifamily25,000 1 month LIBOR + 3.00%4.76%75.5%Senior Debt 113Office12,7501 month LIBOR + 5.00%5.25%67.8%
Senior Debt 114Multifamily8,550 1 month LIBOR + 2.80%4.56%69.2%Senior Debt 114Multifamily40,9371 month LIBOR + 4.35%4.60%73.2%
Senior Debt 115Office27,500 1 month LIBOR + 5.50%7.26%64.9%Senior Debt 115Multifamily36,2001 month LIBOR + 4.45%4.70%66.5%
Senior Debt 116Hospitality17,7465.75%52.9%Senior Debt 116Multifamily8,2501 month LIBOR + 5.50%5.75%73.7%
Senior Debt 117Senior Debt 117Retail11,9631 month LIBOR + 4.87%5.12%75.0%
Senior Debt 118Senior Debt 118Manufactured Housing3,5851 month LIBOR + 5.40%5.90%76.3%
Senior Debt 119Senior Debt 119Multifamily5,7301 month LIBOR + 5.00%5.25%73.5%
Senior Debt 120Senior Debt 120Multifamily18,8001 month LIBOR + 4.00%4.14%79.7%
Senior Debt 121Senior Debt 121Industrial14,2501 month LIBOR + 4.50%4.75%66.3%
Senior Debt 122Senior Debt 122Office11,5501 month LIBOR + 5.50%5.75%68.8%
Senior Debt 123Senior Debt 123Multifamily21,0001 month LIBOR + 4.60%4.75%66.7%
Senior Debt 124Senior Debt 124Office26,0001 month LIBOR + 5.00%5.25%63.9%
Senior Debt 125Senior Debt 125Hospitality17,4015.75%52.9%
Mezzanine Loan 1Multifamily3,4809.50%84.3%Mezzanine Loan 1Multifamily3,4809.50%84.3%
Mezzanine Loan 2Office9,96610.00%78.7%Mezzanine Loan 2Retail3,50010.00%59.7%
Mezzanine Loan 3Multifamily22,800 1 month LIBOR + 8.01%9.77%57.9%Mezzanine Loan 3Multifamily6,5001 month LIBOR + 10.25%11.00%90.4%
Mezzanine Loan 4Retail3,50010.00%59.7%Mezzanine Loan 4Retail1,4381 month LIBOR + 10.75%11.00%84.0%
Mezzanine Loan 5Multifamily1,10011.01%68.4%Mezzanine Loan 5Multifamily1,00011.00%68.9%
Mezzanine Loan 6Multifamily1,00011.00%11.00%68.9%
 $2,771,299 5.60%65.5%$2,722,8635.50%64.0%
________________________
(1) Our floating rate loan agreements contain the contractual obligation for the borrower to maintain an interest rate cap to protect against rising interest rates. In a simple interest rate cap, the borrower pays a premium for a notional principal amount based on a capped interest rate (the “cap rate”). When the floating rate exceeds the cap rate, the borrower receives a payment from the cap counterparty equal to the difference between the floating rate and the cap rate on the same notional principal amount for a specified period of time. When interest rates rise, the value of an interest rate cap will increase, thereby reducing the borrower's exposure to rising interest rates.
(2) Loan to value percentage is from metrics at origination.
(3) The total commitment of this loan is $40.5 million, however none was funded as of December 31, 2020.
38

The following table shows selected data from our commercial mortgage loans, held-for-sale, measured at fair value as of December 31, 20192020 (dollars in thousands):
Loan TypeProperty TypePar ValueInterest RateEffective Yield
Loan to Value (1)
TRS Senior Debt 1Industrial$23,6254.70%4.70%74.1%
TRS Senior Debt 2Retail2,6134.02%4.02%48.1%
TRS Senior Debt 3Multifamily43,2504.07%4.07%61.7%
TRS Senior Debt 4Multifamily2,0004.57%4.57%61.5%
TRS Senior Debt 5Multifamily3,0004.77%4.77%66.7%
TRS Senior Debt 6Multifamily30,0003.50%3.50%52.8%
TRS Senior Debt 7Hospitality8,0004.80%4.80%69.6%
  $112,488 4.1%62.3%
Loan TypeProperty TypePar ValueInterest RateEffective Yield
Loan to Value (1)
TRS Senior Debt 1Industrial$58,5003.33%3.33%58.0%
TRS Senior Debt 2Industrial9,0504.30%4.30%58.4%
TRS Mezzanine Loan 3Multifamily1001 month LIBOR + 14.00%15.00%76.4%
$67,6503.48%58.1%
________________________
(1)Loan to value percentage is from metrics at origination.
The following table shows selected data from our real estate securities, available for sale, measured at fair value as of December 31, 2020 (dollars in thousands):
TypePar ValueInterest RateEffective Yield
CMBS 1$13,2501 month LIBOR + 2.95%3.1%
CMBS 210,8001 month LIBOR + 2.10%2.2%
CMBS 340,0001 month LIBOR + 2.35%2.5%
CMBS 48,0001 month LIBOR + 1.85%2.0%
CMBS 524,0001 month LIBOR + 2.00%2.1%
CMBS 612,0001 month LIBOR + 2.15%2.3%
CMBS 720,0001 month LIBOR + 1.33%1.5%
CMBS 825,0001 month LIBOR + 1.63%1.8%
CMBS 925,6651 month LIBOR + 2.15%2.3%
$178,7152.2%
The following table shows selected data from our other real estate investments, measured at fair value as of December 31, 2020 (dollars in thousands):
 TypeProperty TypePar ValuePreferred Return
Preferred Equity 1Retail$2,50012.5%
$2,500
The following table shows selected data from our real estate owned assets in our portfolio as of December 31, 2020 (dollars in thousands):
TypeProperty TypeCarrying Value
Real Estate Owned 1Office$26,510
$26,510
Liquidity and Capital Resources
Our principal demands for cash will be funding our loan investments, continuing debt service obligations, distributions to our stockholders and the payment of our operating and administrative expenses.
The Company expects to use additional debt and equity financing as a source of capital. The board of directors currently intends to operate at a leverage level of between one to three times book value of equity. However, our board of directors may change this target without shareholder approval. In addition, in 20192020 the Company raised $140.2$10.9 million through sales of common and preferred equity through private placements to institutional and individual investors, and we expect to continue to raise capital in private placements in 2020.investors. The Company anticipates that our debt and equity financing sources and our anticipated cash generated from operations will be adequate to fund our anticipated uses of capital.
In addition to our current mix of financing sources, the Company may also access additional forms of financings, including credit facilities, securitizations, public and private, secured and unsecured debt issuances by us or our subsidiaries, or through capital recycling initiatives whereby we sell certain assets in our portfolio and reinvest the proceeds in assets with more attractive risk-adjusted returns.
Refer to “COVID-19 Pandemic” above for information on the impact of the COVID-19 pandemic on our liquidity.
39

Collateralized Loan Obligations
On AprilJanuary 15, 2019,2020, the Company called all of the outstanding notes issued by BSPRT 2017-FL12017-FL2 Issuer, Ltd., a wholly owned indirect subsidiary of the Company. The outstanding principal of the notes on the date of the call was $45.6$21.0 million. The Company recognized all the remaining unamortized deferred financing costs of $4.5 million recorded within the Interest expense line of the consolidated statements of operations, which was a non-cash charge.

As of December 31, 20192020 and December 31, 2018 the notes issued by BSPRT 2017-FL2 Issuer, a wholly owned indirect subsidiary of the Company, are collateralized by interests in a pool of 5 and 12 mortgage assets having a total principal balance of $100.8 million and $244.6 million, respectively (the “2017-FL2 Mortgage Assets”). The sale of the 2017-FL2 Mortgage Assets to BSPRT 2017-FL2 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of November 29, 2017, between the Company and BSPRT 2017-FL2 Issuer.
As of December 31, 2019 and December 31, 2018 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 4127 and 41 mortgage assets having a principal balance of $523.2$417.9 million and $609.3$523.2 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.
As of December 31, 20192020 and December 31, 20182019 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 4959 and 4149 mortgage assets having a principal balance of $867.9$852.1 million and $859.3$867.9 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of October 12, 2018, between the Company and BSPRT 2018-FL4 Ltd. Issuer.
On May 30, 2019, BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, collateralized by interests in a pool of 49 mortgage assets having a principal balance of $810.0 million (the "2019-FL5 Mortgage Assets") entered into an indenture with the OP, as advancing agent, U.S. Bank National Association as note administrator and U.S. Bank National Association as trustee, which governs the issuance of approximately $714.8 million principal balance secured floating rate notes (the “2019 FL5 Notes”), of which $639.9 million were purchased by third party investors and $74.9 million purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the 2019 FL5 Notes, BSPRT 2019-FL5 Issuer, Ltd. also issued 95,177 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share, which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities.
As of December 31, 2020 and December 31, 2019, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 54 and 48 mortgage assets having a principal balance of $799.8 million and $809.4 million.million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer, Ltd.
Repurchase Agreements, Commercial Mortgage Loans
As of December 31, 2019,2020, the Company has entered into various repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").
The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.
The Company expects to use the advances from these Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.
The Repo Facilities generally provide that in the event of a decrease in the value of our collateral, the lenders can demand additional collateral. Should the value of our collateral decrease as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in our liquidity position.

40

The details of our Repo Facilities at December 31, 20192020 and December 31, 20182019 are as follows (dollars in thousands):
As of December 31, 2019         
Repurchase FacilityCommitted Financing Amount Outstanding 
Interest Expense(1)
 Ending Weighted Average Interest Rate Initial Term Maturity
JPM Repo Facility (2)
$300,000
 $107,526
 $6,862
 4.51% 1/30/2021
USB Repo Facility (3)
100,000
 
 622
 N/A
 6/15/2020
CS Repo Facility (4)
300,000
 87,375
 5,563
 4.84% 3/27/2020
WF Repo Facility (5)
175,000
 24,942
 1,333
 3.65% 11/21/2020
Barclays Revolver Facility (6)
100,000
 
 976
 N/A
 9/20/2021
Barclays Repo Facility (7)
300,000
 32,700
 1,260
 3.80% 3/15/2022
Total$1,275,000
 $252,543
 $16,616
    
As of December 31, 2020
Repurchase FacilityCommitted FinancingAmount Outstanding
Interest Expense(1)
Ending Weighted Average Interest RateInitial Term Maturity
JPM Repo Facility (2)
$300,000 $113,884 $5,020 2.54 %10/6/2022
USB Repo Facility (3)
100,000 5,775 599 2.40 %6/15/2021
CS Repo Facility (4)
200,000 106,971 3,539 2.84 %8/19/2021
WF Repo Facility (5)
175,000 27,150 1,041 2.50 %11/21/2021
Barclays Revolver Facility (6)
100,000 — 387 N/A9/20/2021
Barclays Repo Facility (7)
300,000 22,560 1,046 2.51 %3/15/2022
Total$1,175,000 $276,340 $11,632 
__________________________
(1) For the year ended December 31, 2020. Includes amortization of deferred financing costs.
(2) On October 6, 2020 the maturity date was amended to October 6, 2022.
(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.
(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.
(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.
(6) There is one one-year extension option available at the Company's discretion.
(7) Includes two one-year extensions at the Company's option.
As of December 31, 2019
Repurchase FacilityCommitted FinancingAmount Outstanding
Interest Expense(1)
Ending Weighted Average Interest RateInitial Term Maturity
JPM Repo Facility (2)
$300,000 $107,526 $6,862 4.51 %1/30/2021
USB Repo Facility (3)
100,000 — 622 N/A6/15/2020
CS Repo Facility (4)
300,000 87,375 5,563 4.84 %3/27/2020
WF Repo Facility (5)
175,000 24,942 1,333 3.65 %11/21/2020
Barclays Revolver Facility (6)
100,000 — 976 N/A9/20/2021
Barclays Facility (7)
300,000 32,700 1,260 3.80 %3/15/2022
Total$1,275,000 $252,543 $16,616 
_______________________
(1) For the year ended December 31, 2019. Includes amortization of deferred financing costs.
(2) On September 3, 2019, the committed financing amount was downsized from $520 million to $300 million and the maturity date was amended to January 30, 2021.
(3) Includes two one-year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions.
(4) On March 26, 2019, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to March 27, 2020.
(5) Includes three one-year extensions at the Company’s option, which may be exercised upon the satisfaction of certain conditions.
(6) On September 13, 2019, the Company exercised the extension option, and extended the term maturity to September 20, 2021. There is one more one-year extension option available at the Company's discretion.
(7) Includes two one-year extensions at the Company's option.
As of December 31, 2018          
Repurchase Facility Committed Financing Amount Outstanding 
Interest Expense(1)
 Ending Weighted Average Interest Rate Initial Term Maturity
JPM Repo Facility (2)
 $520,000
 $72,906
 $7,838
 4.55% 1/30/2020
GS Repo Facility (3)
 
 
 470
 N/A
 12/27/2018
USB Repo Facility (4)
 100,000
 
 594
 4.71% 6/15/2020
CS Repo Facility (5)
 300,000
 76,534
 6,594
 4.69% 6/19/2019
WF Repo Facility (6)
 175,000
 
 86
 4.71% 11/21/2020
Barclays Facility (7)
 100,000
 
 1,445
 6.24% 9/19/2019
Total $1,195,000
 $149,440
 $17,027
    
_______________________
(1) For the year ended December 31, 2018. Includes amortization of deferred financing costs.
(2) On January 30, 2018 the committed financing amount was upsized from $300 million to $520 million and the maturity date was amended to January 30, 2020. Includes a one-year extension at the Company's option.
(3) Matured on December 27, 2018. Committed balance was $250 million prior to maturity.
(4) Includes two one-year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions.
(5) On July 19, 2018, the committed financing amount was upsized from $250 million to $300 million. On June 20, 2018, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 19, 2019.
(6) Includes three one-year extensions at the Company’s option, which may be exercised upon the satisfaction of certain conditions.
(7) On July 30, 2018, the committed financing amount was upsized from $75 million to $100 million. Includes a one-year extension at the Company's option.
Other financing and loan participation - Commercial Mortgage Loans
On December 11, 2018,March 23, 2020, the Company transferred $10.0$15.2 million of its interest in a term loan to CitySterling National Bank ("City National Financing"SNB") via a participation agreement. AsDuring 2020, the Company's outstanding loan increased resultant of December 31, 2019,future fundings, leading to an increase in amount outstanding via the City National Financing accrued interest at an annual rate of 4.6%participation agreement. The Company incurred $0.2$0.5 million of interest expense on the City National FinancingSNB for the year ended December 31, 2019. On April 10, 2019, the Company terminated the participation agreement with City National Bank and paid off the $10.0 million under the participation agreement.2020. As of December 31, 2020 there was an outstanding balance of $31.4 million. The loan matures on February 9, 2023.

41

Mortgage Note Payable
On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of December 31, 20192020 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $1.1 million of interest expense for the twelve months ended December 31, 2020. Additionally, on January 6, 2020, the Company obtained a commercial mortgage loan for $11.0 million related to the real estate owned portfolio (see Note 5 - Real Estate Owned). As of December 31, 2020 the loan and related real estate owned assets were no longer held by the Company. The Company incurred $0.8 million of interest expense for the twelve months ended December 31, 2020.
Unsecured Debt
Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.2 million of interest expense on the lending agreement with SBL for the yeartwelve months ended December 31, 2019.2020. As of December 31, 2020, there was no outstanding balance under the lending agreement.
Repurchase Agreements - Real Estate Securities
The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30-90 days and terms are adjusted for current market rates as necessary. As
Below is a summary of the Company's MRAs as of December 31, 20192020 and December 31, 2018 we were party to six MRAs, of which two were used for each respective periods presented, described below2019 (dollars in thousands):
As of December 31, 2019      Weighted Average
CounterpartyAmount Outstanding Accrued Interest 
Collateral Pledged (1)
 Interest Rate Days to Maturity
JP Morgan Securities LLC$83,353
 $124
 $93,500
 2.53% 20
Wells Fargo Securities, LLC178,304
 1,199
 209,873
 2.94% 11
Barclays Capital Inc.40,720
 221
 47,475
 2.81% 23
Citigroup Global Markets, Inc.91,982
 413
 103,453
 2.69% 19
    Total/Weighted Average$394,359
 $1,957
 $454,301
 2.79% 16
          
As of December 31,2018      Weighted Average
CounterpartyAmount Outstanding Accrued Interest 
Collateral Pledged (1)
 Interest Rate Days to Maturity
JP Morgan Securities LLC$21,961
 $27
 $26,750
 3.67% 18
Wells Fargo Securities, LLC22,578
 47
 28,223
 3.93% 11
    Total/Weighted Average$44,539
 $74
 $54,973
 3.8% 15
_______________________
Weighted Average
CounterpartyAmount OutstandingAccrued Interest
Collateral Pledged (1)
Interest RateDays to Maturity
As of December 31, 2020
JP Morgan Securities LLC$33,791 $1,668 $43,612 1.75 %31
Wells Fargo Securities, LLC— 1,057 — N/A N/A
Goldman Sachs International22,440 455 30,794 1.68 %16
Barclays Capital Inc.76,809 2,102 97,244 1.71 %33
Credit Suisse AG— 905 — N/A N/A
Citigroup Global Markets, Inc.53,788 2,532 71,723 1.70 %29
Total/Weighted Average$186,828 $8,719 $243,373 1.71 %33
As of December 31, 2019
JP Morgan Securities LLC$83,353 $124 $93,500 2.53 %20
Wells Fargo Securities, LLC178,304 1,199 209,873 2.94 %11
Barclays Capital Inc.40,720 221 47,475 2.81 %23
Citigroup Global Markets, Inc.91,982 413 103,453 2.69 %19
Total/Weighted Average$394,359 $1,957 $454,301 2.79 %16
________________________
1(1) Includes $68.5$72.2 million and $28.2$68.5 million of CLO notes, held by the Company, which is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of as of December 31, 20192020 and December 31, 2018,2019, respectively.
42

The following tables summarize our Repurchase Agreements, Commercial Mortgage Loans and our MRAs for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 and December 31, 2017 respectively:
  As of December 31, 2019
  Amount Outstanding Average Outstanding Balance
  Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Repurchase Agreements, Commercial Mortgage Loans $370,889
 $132,870
 $111,937
 $252,543
 $357,850
 $337,970
 $132,126
 $214,812
Repurchase Agreements, Real Estate Securities $22,078
 $85,022
 $244,308
 $394,359
 $52,711
 $84,179
 $181,198
 $324,545
  As of December 31, 2018
  Amount Outstanding Average Outstanding Balance
  Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Repurchase Agreements, Commercial Mortgage Loans $501,310
 $304,975
 $565,329
 $149,440
 $313,509
 $222,339
 $456,636
 $183,689
Repurchase Agreements, Real Estate Securities $
 $10,600
 $22,272
 $44,539
 $19,542
 $3,029
 $23,056
 $42,079
  As of December 31, 2017
  Amount Outstanding Average Outstanding Balance
  Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Repurchase Agreements, Commercial Mortgage Loans $340,948
 $177,495
 $319,386
 $65,690
 $280,468
 $387,988
 $237,017
 $295,849
Repurchase Agreements, Real Estate Securities $52,174
 $49,071
 $39,035
 $39,035
 $63,611
 $66,996
 $47,477
 $39,035

As of December 31, 2020
Amount OutstandingAverage Outstanding Balance
Q1Q2Q3Q4Q1Q2Q3Q4
Repurchase Agreements, Commercial Mortgage Loans$234,524 $226,224 $183,033 $276,340 $282,282 $238,280 $197,632 $279,187 
Repurchase Agreements, Real Estate Securities$496,880 $335,256 $177,541 $186,828 $412,809 $351,202 $316,229 $183,632 
As of December 31, 2019
Amount OutstandingAverage Outstanding Balance
Q1Q2Q3Q4Q1Q2Q3Q4
Repurchase Agreements, Commercial Mortgage Loans$370,889 $132,870 $111,937 $252,543 $357,850 $337,970 $132,126 $214,812 
Repurchase Agreements, Real Estate Securities$22,078 $85,022 $244,308 $394,359 $52,711 $84,179 $181,198 $324,545 
As of December 31, 2018
Amount OutstandingAverage Outstanding Balance
Q1Q2Q3Q4Q1Q2Q3Q4
Repurchase Agreements, Commercial Mortgage Loans$501,310 $304,975 $565,329 $149,440 $313,509 $222,339 $456,636 $183,689 
Repurchase Agreements, Real Estate Securities$— $10,600 $22,272 $44,539 $19,542 $3,029 $23,056 $42,079 
The use of our warehouse lines is dependent upon a number of factors including but not limited to: origination volume, loan repayments and prepayments, our use of other financing sources such as collateralized loan obligations, our liquidity needs and types of loan assets and underlying collateral that we hold.
InDuring the twelve months ended December 31, 2020 the maximum average outstanding balance was $721.0 million, of which $268.2 million was related to repurchase agreements on our commercial mortgage loans and $452.8 million for repurchase agreements on our real estate securities.
During the twelve months ended December 31, 2019, the maximum average outstanding balance was $612.0 million, at the end of November 30, 2019, of which $266.6 million was related to repurchase agreements on our commercial mortgage loans and $345.4 million for repurchase agreements on our real estate securities.
InDuring the twelve months ended December 31, 2018, the maximum average outstanding balance was $560.6 million, at the end of September 30, 2018, of which $534.8 million was related to repurchase agreements on our commercial mortgage loans and $25.8 million for repurchase agreements on our real estate securities.
In 2017, the maximum average outstanding balance was $483.4 million, at the end
43

Private Placements
Commencing inSince February 2018, the Company haswe have been offeringconducting offerings of our common stock, and Series A Preferred Stock, and commencing in October 2019, the Company has been offering Series C Preferred Stock in private placementsofferings exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and certain rules and regulations promulgated thereunder.
Act. The following table summarizes the salesissuance of common stock in these offerings (dollars in thousands, except share amounts):
Total
Shares IssuedProceeds
Balance, December 31, 201912,136,262$201,225 
January 2020284,9834,762 
February 2020365,0516,100 
March 2020— 
April 2020— 
May 2020— 
June 2020— 
July 2020— 
August 2020— — 
September 2020— — 
October 2020— — 
November 2020— — 
December 2020— — 
Balance, December 31, 202012,786,296 $212,087 
 Total
 Shares Issued Proceeds
Balance, December 31, 20187,534,358
 $124,335
January 2019139,138
 2,325
February 2019655,296
 10,950
March 2019367,145
 6,135
April 2019557,309
 9,314
May 2019662,492
 11,070
June 201948,033
 803
July 20191,225,426
 20,461
August 201980,790
 1,350
September 2019160,213
 2,675
October 2019201,975
 3,375
November 2019289,048
 4,830
December 2019215,039
 3,602
Balance, December 31, 201912,136,262
 $201,225
As of December 31, 2019, the Company2020, we had $10.7 millionno outstanding of binding purchase commitments for common stock.

The following table summarizes the salesissuance of Series A Preferred Stock in these offerings (dollars in thousands, except share amounts):
Total
Shares IssuedProceeds
Balance, December 31, 201940,496 $202,549 
January 2020— 
February 20201470 
March 2020— 
April 2020— 
May 2020— 
June 2020— 
July 2020— 
August 2020— 
September 2020— 
October 2020— 
November 2020— 
December 2020— 
Balance, December 31, 202040,510 $202,619 
 Total
 Shares Issued Proceeds
Balance, December 31, 201829,249
 $146,245
January 2019
 
February 20192,996
 14,979
March 2019
 
April 2019
 
May 2019
 
June 2019
 
July 20196,253
 31,325
August 2019
 
September 2019
 
October 2019
 
November 2019
 
December 20191,998
 10,000
Balance, December 31, 201940,496
 $202,549
As of December 31, 2020, we had no outstanding binding purchase commitments for Series A Preferred Stock.
The following table summarizes the salesThere were no issuances of Series C Preferred Stock in these offerings (dollars in thousands, except share amounts):during the year ended December 31, 2020.
As of December 31, 2020, we had no outstanding binding purchase commitments for Series C Preferred Stock.
44

 Total
 Shares Issued Proceeds
Balance, December 31, 2018
 $
January 2019
 
February 2019
 
March 2019
 
April 2019
 
May 2019
 
June 2019
 
July 2019
 
August 2019
 
September 2019
 
October 20191,000
 5,000
November 2019
 
December 2019400
 2,000
Balance, December 31, 20191,400
 $7,000

The following tables present the activity in the Company's Series A Preferred Stock for the periods ended December 31, 20192020 and December 31, 2018,2019, respectively (dollars in thousands, except share amounts):
Series A Preferred StockSeries A Preferred StockSharesAmount
Beginning Balance, December 31, 2019Beginning Balance, December 31, 201940,500 $202,144 
Issuance of Preferred StockIssuance of Preferred Stock14 70 
Dividends paid in Preferred StockDividends paid in Preferred Stock
Offering costsOffering costs— (23)
Amortization of offering costsAmortization of offering costs— 94 
Ending Balance, December 31, 2020Ending Balance, December 31, 202040,515 $202,292 
Series A Preferred Stock Shares AmountSeries A Preferred StockSharesAmount
Beginning Balance, December 31, 2018 29,249
 $145,786
Beginning Balance, December 31, 201829,249 $145,786 
Issuance of Preferred Stock 11,247
 56,233
Issuance of Preferred Stock11,247 56,233 
Dividends paid in Preferred Stock 4
 24
Dividends paid in Preferred Stock24 
Offering costs 
 
Offering costs— — 
Amortization of offering costs 
 101
Amortization of offering costs— 101 
Ending Balance, December 31, 2019 40,500
 $202,144
Ending Balance, December 31, 201940,500 $202,144 
    
 Shares Amount
Beginning Balance, December 31, 2017 
 $
Issuance of Preferred Stock 29,249
 146,245
Offering costs 
 (510)
Amortization of offering costs 
 51
Ending Balance, December 31, 2018
 29,249
 $145,786
The following table presents the activity in the Company's Series C Preferred Stock for the period ended December 31, 2020 and December 31, 2019, (dollars in thousands, except share amounts):
Preferred C StockSharesAmount
Beginning Balance, December 31, 20191,400 $6,966 
Issuance of Preferred Stock— — 
Dividends paid in Preferred Stock— — 
Offering costs(11)
Amortization of offering costs— 
Ending Balance, December 31, 20201,400 $6,962 
Series C Preferred StockSharesAmount
Beginning Balance, December 31, 2018— $— 
Issuance of Preferred Stock1,400 6,998 
Dividends paid in Preferred Stock— — 
Offering costs— (33)
Amortization of offering costs— 
Ending Balance, December 31, 20191,400 $6,966 
45
Preferred C Stock Shares Amount
Beginning Balance, December 31, 2018 
 $
Issuance of Preferred Stock 1,400
 6,998
Dividends paid in Preferred Stock 
 
Offering costs 
 (33)
Amortization of offering costs 
 1
Ending Balance, December 31, 2019 1,400
 $6,966

Distributions
In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes.
In 2019, the Company's board of directorsDistributions on our common stock are payable when authorized and declared ongoing monthly distributions at a rate equivalent to $1.44 per annum, per share.
The Company's distributions are payable by the fifth day following each month end to stockholdersour board of record at the close of business each day during the prior month.directors. Distribution payments are dependent on the availability of funds. The Company'sOur board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.

Dividends payable on each share of Series A and Series C Preferred Stock are generally equal to the quarterly dividend that would have been paid had such share of Preferred Stock been converted to a share of common stock, except to the extent common stock dividends have been reduced below certain specified levels. To the extent dividends on Preferred Shares are not authorized and declared by our board of directors and paid by the Company monthly, the dividend amounts will accrue.
In April 2020, the Company’s board of directors unanimously approved a transition in the timing of the dividend payments to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly accrual and payment basis. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.
In November 2020, the Company’s board of directors declared the following fourth quarter 2020 dividends: (i) a quarterly cash dividend of $0.275 per common share (equivalent to $1.10 per annum) which was paid in January 2021 to holders of record on December 31, 2020, and (ii) a quarterly cash dividend per share of Preferred Stock equivalent to the amount of distributions that would have been paid upon a conversion of such share of Preferred Stock into common stock, which was paid in January 2021 to holders of record on December 31, 2020.
The below table shows the distributions paid on shares outstanding of common stock, as well as the amount of shares of common stock issued upon reinvestment of distributions by stockholders under our DRIP during the years ended December 31, 20192020 and 20182019 (dollars in thousands):
Year Ended December 31, 2020
Payment DateAmount Paid in CashAmount Issued under DRIP
January 2, 2020$4,154 $1,211 
February 5, 20204,177 1,210 
March 2, 20203,919 1,130 
April 1, 20205,413 — 
May 1, 2020— — 
June 1, 2020— — 
July 1, 20209,463 2,679 
August 1, 2020— — 
September 1, 2020— — 
October 1, 20209,540 2,653 
November 1, 2020— — 
December 23, 2020 (1)
132 — 
Total$36,798 $8,883 
_____________________
(1) Payment relates to second quarter dividend distributions which were recalculated as a result of the transition from a monthly payment with daily accruals to a quarterly payment and accrual basis.
46

Year Ended December 31, 2019

   Year Ended December 31, 2019


Payment Date
Amount Paid in Cash Amount Issued under DRIPPayment DateAmount Paid in CashAmount Issued under DRIP
January 4, 2019$3,576
 $1,171
January 4, 2019$3,576 $1,171 
February 1, 20193,657
 1,168
February 1, 20193,657 1,168 
March 1, 20193,333
 1,053
March 1, 20193,333 1,053 
April 1, 20193,749
 1,167
April 1, 20193,749 1,167 
May 1, 20193,678
 1,143
May 1, 20193,678 1,143 
June 3, 20193,870
 1,182
June 3, 20193,870 1,182 
July 1, 20193,796
 1,141
July 1, 20193,796 1,141 
August 2, 20194,033
 1,181
August 2, 20194,033 1,181 
September 3, 20194,051
 1,182
September 3, 20194,051 1,182 
October 1, 20193,951
 1,138
October 1, 20193,951 1,138 
November 1, 20194,093
 1,194
November 1, 20194,093 1,194 
December 2, 20193,976
 1,181
December 2, 20193,976 1,181 
Total$45,763
 $13,901
Total$45,763 $13,901 
Year Ended December 31, 2018

   


Payment Date
Amount Paid in Cash Amount Issued under DRIP
January 3, 2018$2,649

$1,242
February 1, 20182,665

1,233
March 1, 20182,386

1,098
April 1, 20182,664

1,200
May 1, 20182,593

1,152
June 1, 20182,694

1,184
July 2, 20182,637

1,143
August 1, 20182,939

1,179
September 2, 20183,156

1,166
October 4, 20183,309

1,124
November 1, 20183,433

1,165
December 3, 20183,342

1,137
Total$34,467
 $14,023

The following table shows the sources for the payment of distributions to common stockholders for the periods presented (dollars in thousands):
Year Ended December 31,
20202019
Distributions:
  Cash distributions paid$36,798 $45,763 
  Distributions reinvested8,883 13,901 
Total Distributions$45,681 $59,664 
Source of Distribution Coverage:
  Net Income$36,798 80.6 %$45,763 76.7 %
  Common stock issued under DRIP8,883 19.4 %13,901 23.3 %
Total Sources of Distributions$45,681 100.0 %$59,664 100.0 %
Net Income applicable to common stock (GAAP)$39,826 $66,914 
 Year Ended December 31,
 2019 2018
Distributions:       
Cash distributions paid$45,763
   $34,467
  
Distributions reinvested13,901
   14,023
  
Total distributions$59,664
   $48,490
  
Source of distribution coverage:       
Net Income (Loss)

$45,763
 76.7% $34,467
 71.1%
Available cash on hand
 % 
 %
Common stock issued under DRIP13,901
 23.3% 14,023
 28.9%
Total sources of distributions$59,664
 100.0% $48,490
 100.0%
Net income applicable to common stock (GAAP)$66,914
   $49,181
  
Cash Flows
Cash Flows for the Year Ended December 31, 20192020
Net cash provided by operating activities for the year ended December 31, 2020 was $115.3 million. Cash inflows were primarily driven by net income of $54.7 million and net proceeds of $44.7 million related to originations of and proceeds from sales of commercial mortgage loans, measured at fair value.
Net cash provided by investing activities for the year ended December 31, 2020 was $240.7 million. Cash inflows were primarily driven by proceeds from principal repayments of $1,228.2 million received on commercial mortgage loans, held for investment, proceeds received from the sale/repayment of real estate securities of $346.2 million, $77.2 million of proceeds received from the sale of commercial mortgage loans, held-for-sale and $22.5 million of proceeds received from sale of real estate owned assets. Inflows were partially offset by the origination and acquisition of $1,281.2 million of commercial mortgage loans and the purchase of real estate securities of $148.6 million.
Net cash used in financing activities for the year ended December 31, 2020 was $373.0 million. Cash outflows were primarily driven by repayments on CLOs of $182.7 million, net payment on CMBS repurchase agreements of $207.5 million, $49.8 million in cash distributions to stockholders and $10.3 million of stock repurchases. Outflows were offset by $31.4 million of proceeds received from borrowing on other financing and loan participation for commercial mortgage loans, $11.7 million from borrowing on mortgage note payable and net proceeds of $23.8 million received from repurchase agreements on commercial mortgage loans.
Cash Flows for the Year Ended December 31, 2019
Net cash provided by operating activities for the year ended December 31, 2019 was $45.4 million. Cash inflows were primarily driven by an increase in net income to $83.9 million, offset by net cash outflows of $45.5 million related to originations of and proceeds from sales of commercial mortgage loans, measured at fair value.
47

Net cash used in investing activities for the year endedDecember 31, 2019 was $969.2 million. Cash outflows were primarily driven by the origination and acquisition of $1,321.6 million of commercial mortgage loans and $369.9 million of CMBS. Outflows were offset by proceeds from principal repayments of $756.1 million received on commercial mortgage loans, held for investment and proceeds from sale of commercial mortgage loans, held for saleheld-for-sale of $0.0 million.
Net cash provided by financing activities for the year ended December 31, 2019 was $828.6 million. Cash inflows were primarily driven by: proceeds of $639.9 million from issuance of one CLO, BSPRT 2019-FL5; proceeds from net borrowing on the Repo Facilities of $103.1 million; proceeds from net borrowing on our CMBS MRAs of $349.8 million. Inflows were partially offset by the payment of $60.6 million in cash distributions to stockholders, $13.8 million of stock repurchases and repayments on CLOs of $343.2 million.
Cash Flows for the Year Ended December 31, 2018
Net cash provided by operating activities for the year ended December 31, 2018 was $7.1 million. Cash inflows were primarily driven by an increase in net income to $52.8 million, offset by net cash outflows of $24.0 million related to originations of and proceeds from sales of commercial mortgage loans, measured at fair value.
Net cash used in investing activities for the year endedDecember 31, 2018 was $855.8 million. Cash outflows were primarily driven by the origination and acquisition of $1,598.8 million of commercial mortgage loans. Outflows were offset by proceeds from principal repayments of $753.9 million received on commercial mortgage loans, held for investment and proceeds from sale of commercial mortgage loans, held for sale of $16.9 million.
Net cash provided by financing activities for the year ended December 31, 2018 was $961.4 million. Cash inflows were primarily driven by proceeds of $1,161.0 million from issuance of two CLOs, BSPRT 2017-FL1 and BSPRT 2017-FL2. This was partially offset by cash outflows of $83.8 million from net repayments on the Repo Facilities, $5.5 million from net payment on our CMBS MRAs, the payment of $37.0 million in cash distributions to stockholders, $20.5 million of stock repurchases and repayments on CLOs of $143.1 million
Election as a REIT
We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013. As a REIT, if we meet certain organizational and operational requirements and distribute at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders in a year, we will not be subject to U.S. federal income tax to the extent of the income that we distribute. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and U.S. federal income and excise taxes on our undistributed income.

Contractual Obligations and Commitments
Our contractual obligations, excluding interest obligations (as amounts are not fixed or determinable), as of December 31, 20192020 are summarized as follows (dollars in thousands):
  Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total
Unfunded loan commitments (1)
 $90,519
 $157,724
 $14,087
 $
 $262,330
Maturities of lease liabilities for operating lease 398
 832
 883
 39,438
 41,551
Repurchase agreements - commercial mortgage loans 112,317
 140,226
 
 
 252,543
Repurchase agreements - real estate securities 394,359
 
 
 
 394,359
CLOs (2)
 
 
 
 1,822,345
 1,822,345
Mortgage Note Payable 
 
 
 29,167
 29,167
Total $597,593
 $298,782
 $14,970
 $1,890,950
 $2,802,295
Less than 1 year1 to 3 years3 to 5 yearsMore than 5 yearsTotal
Unfunded loan commitments (1)
$59,692 $161,300 $7,700 $— $228,692 
Repurchase agreements - commercial mortgage loans139,896 136,444 — — 276,340 
Repurchase agreements - real estate securities186,828 — — — 186,828 
CLOs (2)
— — — 1,639,227 1,639,227 
Mortgage Note Payable— — — 29,167 29,167 
Total$386,416 $297,744 $7,700 $1,668,394 $2,360,254 
________________________
(1) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.
(2) Excludes $261.4$267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2019.2020.
Related Party Arrangements
Benefit Street Partners L.L.C.
Amended Advisory Agreement
On January 19, 2018, the Company entered into an amendment and restatement of the Advisory Agreement. The amended Advisory Agreement amends and restates the Advisory Agreement, dated as of September 29, 2016, by and among the Company, the Operating Partnership and the Advisor.
The Nominating and Corporate Governance Committee (the “Committee”) of the Company's board of directors, which consists solely of the Company’s independent directors, negotiated, approved and recommended that the board of directors approve, the amended Advisory Agreement. The Committee engaged independent legal counsel to assist the Committee in negotiating the amended Advisory Agreement.
ThePursuant to the amended Advisory Agreement, the Advisor will continue to provideprovides the daily management for the Company and the Operating Partnership, including an investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the board of directors. The Advisor shall continue to be entitled to an asset management fee equal to one and one-half percent (1.5%) of Equity (as defined in the amended Advisory Agreement). The Advisor shall continue to be entitled to an annual subordinated performance fee equal to fifteen percent (15%) of the Total Return (as defined in the amended Advisory Agreement) over a six percent (6%) per annum hurdle, subject to certain limitations. The Advisor shall not be entitled to acquisition or disposition fees. The Company or the Operating Partnership shall continue to pay directly or reimburse the Advisor for all the expenses paid or actually incurred by the Advisor in connection with the services it provides to the Company and the Operating Partnership pursuant to the amended Advisory Agreement, subject to certain limitations.
The initial term of the amended Advisory Agreement iswas three-years and shall bewas automatically renewed for an additional one-year period on January 19, 2021 and will continue to automatically renew for additional one-year periods unless either party elects not to renew.
48

The Company may terminate the amended Advisory Agreement for a Cause Event (as defined in the amended Advisory Agreement) without payment of a termination fee. Following the expiration of a term, and upon 180 days’ prior written notice, the Company may, without cause, elect not to renew the amended Advisory Agreement upon the determination by two-thirds of the Company’s independent directors that (i) there has been unsatisfactory performance by the Advisor or (ii) that the asset management fee and annual subordinated performance fee payable to the Advisor are not fair, subject to certain conditions. In such case, the Company shall be obligated to pay a termination fee.
Pursuant to the amended Advisory Agreement, the Advisor and/or its affiliates are required to acquire equity securities of the Company equal to a purchase price of not less than $10 million, subject to certain conditions. During the term of the amended Advisory Agreement, the Advisor shall not, directly or indirectly, manage or advise another REIT that is engaged in the business of the Company in any geographical region in which the Company has a significant investment, or provide any services related to fixed-rate conduit lending to any other person, subject to certain conditions.

Advisory Agreement Fees and Reimbursements
Pursuant to the Advisory Agreement, the Company is or was required to make the following payments and reimbursements to the Advisor:
The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company's executive officers.
The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' equity as calculated pursuant to the Advisory Agreement.
The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Advisor exceed 10.0% of the aggregate total return for such year.
Until September 2017, the Company paid the Advisor an acquisition fee of 1.0% of the principal amount funded by us to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities.
The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company's behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments.
Investment in Common and Preferred Stock
Refer to Note 9 - Stock Transactions for a description of the Company’s private placements. Officers of the Company and other employees of the Advisor and its affiliates (“Manager Investors”), as well as members of the Company's board of directors, have acquired common stock and Series A and Series C Convertible Preferred Stock in these private placements on substantially the same terms applying to purchases by third party accredited investors unaffiliated with the Company or the Advisor. The Manager Investors acquired an aggregate of $2.4 million of common stock in these private placements during the year ended December 31, 2019. During the year ended December 31, 2019, each independent member of the Company's board of directors acquired 5,984 shares of common stock in these private placements for an aggregate purchase price of $0.4 million.
The Manager Investors have agreed with the Advisor not to sell or otherwise transfer the securities purchased in the private placement without the consent of the Advisor, prior to 180 days after a listing of the Company’s common stock on a national securities exchange. In addition, the Manager Investors will not be eligible to participate in the SRP for at least three years.
The board of directors and the Nominating and Corporate Governance Committee of the board of directors each reviewed and unanimously approved the Company’s issuance of shares to the Manager Investors and the terms of the offering.
Loan Acquisitions
On February 22, 2018, the Company purchased commercial mortgage loans from an entity that is an affiliate of the Company's Advisor, for an aggregate purchase price of $27.8 million. The purchase of the commercial mortgage loans and the $27.8 million purchase price were approved by the independent directors of the Company’s board of directors. These loans are expected to be sold into a securitization vehicle through the Company's TRS segment. On April 18, 2018, the Company sold $23.3 million of these commercial mortgage loans into a CMBS securitization. The remaining $4.5 million carrying value of $3.9 million, of these commercial mortgage loans, are recorded as held for investment, were fully paid down during the year ended December 31, 2020.
Lending Agreement with Stockholder
Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in commercial mortgage loans, held-for-investmentFebruary 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. SBL also holds 14,950 of the Company’s outstanding shares of Series A Preferred Stock. The Company incurred $0.2 million interest expense on the consolidated balance sheet aslending agreement with SBL for the year ended December 31, 2020. As of December 31, 2019.2020 there was no outstanding balance under the lending agreement.

49

The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the years ended December 31, 2020, 2019 and 2018 and 2017 and the associated amounts payable as of December 31, 20192020 and 20182019 (dollars in thousands):. See Note 11 - Related Party Transactions and Arrangements for further detail.
  Year Ended December 31, Payable as of December 31,
  2019 2018 2017 2019 2018
Acquisition fees and expenses (1)
 900
 452
 4,197
 225
 1
Administrative services expenses 16,363
 13,446
 6,765
 1,238
 1,224
Asset management and subordinated performance fee 16,226
 10,299
 9,273
 3,326
 1,072
Other related party expenses (2)
 1,610
 1,259
 394
 
 932
Total $35,099
 $25,456
 $20,629
 $4,789
 $3,229
Year Ended December 31,Payable as of December 31,
20202019201820202019
Acquisition expenses (1)
696 900 452 — 225 
Administrative services expenses13,120 16,363 13,446 2,940 1,238 
Asset management and subordinated performance fee15,178 16,226 10,299 4,773 3,326 
Other related party expenses (2)(3)
703 1,610 1,259 1,812 — 
Total related party fees and reimbursements$29,697 $35,099 $25,456 $9,525 $4,789 
______________________
(1) Total acquisition fees and expenses paid during the years ended December 31, 2020, 2019 and 2018 and 2017 were $7.1 million, $8.4 million $8.1 million and $10.2$8.1 million respectively, of which $6.4 million, $7.5 million $7.6 million and $6.0$7.6 million were capitalized within the commercial mortgage loans, held for investment line of the consolidated balance sheets for the years ended December 31, 2020, 2019 2018 and 2017.2018.
(2) These are primarily related to reimbursable costs incurred for the increase in loan origination activities. These amountsactivities and are included in Other expenses in the Company's consolidated statements of operations.
(3) The related party payable includes $1.8 million of payments made by the Advisor to third party vendors on behalf of the Company.
The payablesamounts payable as of December 31, 20192020 and 20182019 in the table above are included in Due to affiliates on ourthe Company's consolidated balance sheets.
Off Balance Sheet Arrangements
We currently have no off balance sheet arrangements as of December 31, 20192020 and through the date of the filing of this Form 10-K.
Non-GAAP Financial Measures
Funds from Operations and Modified Funds from Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT") and the Investment Program Association ("IPA") industry trade groups, have each promulgated measures respectively known as funds from operations ("FFO") and modified funds from operations ("MFFO"), which we believe to be appropriate supplemental measures to reflect the operating performance of a REIT. The use of FFO and MFFO is recommended by the REIT industry as supplemental performance measures. However, FFO and MFFO are not substitutes to GAAP net income or loss. We believe our presentations of FFO and MFFO assist investors in analyzing and comparing our operating and financial performance between reporting periodsperiods. In addition, we believe MFFO is a useful financial metric for shareholders as historically, over time, MFFO has been a strong indicator of our distributions per share and is a metric we consider in declaring our distributions. As a REIT, we generally must distribute annually at least 90% of our net taxable income, and distributions are one of the principal reasons shareholders invest in our common stock.
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in FebruaryFebruary 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of depreciable property, propertycertain real estate assets, gains or losses from change in control and asset impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, depreciation and amortization related to real estate and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO.on the same basis. Our business plan is to operate as a mortgage REIT with our portfolio consisting of commercialcommercial mortgage loan investments, and investments in real estate securities. We will typically have no FFO adjustments to our net income or loss computed in accordance with GAAP as a resultsecurities and real estate owned assets.
50

We define MFFO, a non-GAAP measure, consistent with the IPA's Guideline 2010 - 01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the "Practice Guideline") issued by the IPA in November 2010. We define MFFO as FFO further adjusted for the following items, as applicable: acquisition fees; accretion of discounts and amortization of premiums and other loan expenses on debt investments; fair value adjustments on real estate related investments such as commercial real estate securities or derivative investments included in net income; impairments of real estate related investments, gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses from fair value adjustments on real estate securities, including commercial mortgage backed securities and other securities, interest rate swaps and other derivatives not deemed to be hedges and foreign exchanges holdings; unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums and other loan expenses on debt investments, gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses

resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. While we will be responsible for managing interest rate, hedge and foreign exchange risk, we expect to retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such gains and losses in calculating MFFO, as such gains and losses are not reflective of our core operations.
Our MFFO calculation excludes impairments of real estate related investments, including loans. We assess the credit quality of our investments and adequacy of loancredit loss reserves on a quarterly basis, or more frequently as necessary. For loans classified as held-for-investment,held for investment, we establish and maintain a general allowance for loancredit losses inherent in our portfolio at the reporting date and, where appropriate, a specific allowance for loancredit losses for loans we have determined to be impaired at the reporting date. An individual loan is considered impaired when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. Real estate related securities which have experienced a decline in fair value below their amortized cost basis (i.e., impairment) are evaluated for other-than-temporary impairment wheneach reporting period to determine whether the decline in fair value is due to credit-related factors. Credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of a security falls below its net amortized cost.operations. Significant judgment is required in this analysis. We consider the estimated net recoverable value of the loan or security as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the prospects for the borrower and the competitive situation of the region where the borrower does business. Fair value is typically estimated based upon discounting the expected future cash flows of the underlying collateral taking into consideration the discount rate, capitalization rate, occupancy, creditworthiness of major tenants and many other factors. This requires significant judgment and because it is based upon projections of future economic events, which are inherently subjective, the amounts ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a specific allowance for loancredit losses is recorded. In the case of real estate securities, all or a portion of a deemed impairment may be recorded. Due to our limited life, any allowance for loancredit losses or impairment of real estate securities recorded may be difficult to recover.
51

The table below reflects the items deducted or added to net income or loss in our calculation of FFO and MFFO for the years ended December 31, 2019,2020, December 31, 20182019 and December 31, 20172018 (dollars in thousands):
  Year Ended December 31,
  2019 2018 2017
Funds From Operations:      
Net income $83,924
 $52,825
 $33,779
Funds from operations $83,924
 $52,825
 $33,779
Modified Funds From Operations:      
Funds from operations $83,924
 $52,825
 $33,779
Amortization of premiums, discounts and fees on investments, net (6,144) (4,572) (2,554)
Acquisition fees and acquisition expenses 900
 452
 4,197
Unrealized (gain)/loss on financial instruments (2,081) 1,611
 (230)
Loan loss (recovery)/provision 3,007
 3,370
 (715)
Modified funds from operations (1)
 $79,606
 $53,686
 $34,477
___________________
Year Ended December 31,
202020192018
Funds From Operations:
Net income$54,746 $83,924 $52,825 
Impairment losses on real estate owned assets398 — — 
Depreciation and amortization2,233 — — 
Funds from operations$57,377 $83,924 $52,825 
Modified Funds From Operations:
Funds from operations$57,377 $83,924 $52,825 
Amortization of premiums, discounts and fees on investments, net(5,999)(6,144)(4,572)
Acquisition fees and acquisition expenses696 900 452 
Unrealized (gain)/loss on financial instruments1,102 (2,081)1,611 
Provision/(benefit) for credit losses13,296 3,007 3,370 
Modified funds from operations (1)
$66,472 $79,606 $53,686 
____________________________
(1) Modified funds from operations for the year ended December 31, 2020 includes a non-cash charge of $4.5 million related to the call of BSPRT 2017 - FL2 CLO on January 15, 2020. Excluding the non-cash charge modified funds from operations would be $71.0 million for the year ended December 31, 2020. Modified funds from operations for year ended December 31, 2019 includes a non-cash charge of $4.5 million related to the call of BSPRT 2017 - FL1 CLO on April 15, 2019. Excluding thethis non-cash charge, modified funds from operations would behave been $84.1 million for the year ended December 31, 2019.million. Modified funds from operations for year ended December 31, 2018 includes a non-cash charge of $6.4 million related to the call of RFT 2015-FL1 CLO on February 15, 2018. Excluding this non-cash charge, modified funds from operations would have been $60.1 million.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Credit Risk
Our investments are subject to a high degree of credit risk. Credit risk is the exposure to loss from loan defaults. Default rates are subject to a wide variety of factors, including, but not limited to, borrower financial condition, property performance, property management, supply/demand factors, construction trends, consumer behavior, regional economics, interest rates, the strength of the U.S. economy, and other factors beyond our control. All loans are subject to a certain probability of default. We manage credit risk through the underwriting process, acquiring our investments at the appropriate discount to face value, if any, and establishing loss assumptions. We also carefully monitor the performance of the loans, as well as external factors that may affect their value.
Capital Market Risk
We are exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under repurchase obligations or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt capital markets to inform our decisions on the amount, timing and terms of capital we raise.
The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. We have and may continue to receive margin calls from our lenders as a result of the decline in the market value of the assets pledged by us to our lenders under our repurchase agreements and warehouse credit facilities, and if we fail to resolve such margin calls when due by payment of cash or delivery of additional collateral, the lenders may exercise remedies including demanding payment by us of our aggregate outstanding financing obligations and/or taking ownership of the loans or other assets securing the applicable obligations and liquidating them at inopportune prices.
52

Interest Rate Risk

Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.
As of December 31, 20192020 and 2018,2019, our portfolio included 135133 and 98135 variable rate investments, respectively, based on LIBOR for various terms. Borrowings under our repurchase agreements are also based on LIBOR. The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 2550 or 50100 basis points or decrease by 25 basis points, assuming that our current balance sheet was to remain constant and no actions were taken to alter our existing interest rate sensitivity.
For the LIBOR sensitivity range, a reduction in LIBOR results in an increase in our portfolio return. This is driven by the LIBOR floor in place for majority of our commercial mortgage loans, held for investment. In contrast, the majority of our financing instruments do not have LIBOR floors. The presentpresence of a LIBOR floor on interest-bearing assets coupled with lack of LIBOR floor on interest bearing liabilities allows the portfolio to generate a higher return for a decrease in LIBOR rate compared to increase in LIBOR rate for the LIBOR range presented:
Estimated Percentage Change in Interest Income Net of Interest Expense
Change in Interest RatesDecember 31, 2020December 31, 2019
(-) 25 Basis Points2.16 %3.22 %
Base Interest Rate— %— %
(+) 50 Basis Points(5.87)%(2.20)%
(+) 100 Basis Points(9.86)%(0.26)%
  Estimated Percentage Change in Interest Income Net of Interest Expense
Change in Interest Rates December 31, 2019 December 31, 2018
(-) 25 Basis Points 3.22 % (1.38)%
Base Interest Rate  %  %
(+) 50 Basis Points (2.20)% 2.75 %
(+) 100 Basis Points (0.26)% 5.50 %
Item 8. Financial Statements and Supplementary Data.
The information required by this Item 8 is hereby incorporated by reference to our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of the end of such period, that our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.
Internal Control Over Financial Reporting
Management's Annual Reporting on Internal Controls over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act.
In connection with the preparation of our Annual Report on Form 10-K, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019.2020. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
Based on its assessment, our management concluded that, as of December 31, 2019,2020, our internal control over financial reporting was effective.

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Table of Contents
The rules of the SEC do not require, and this Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.
Changes in Internal Control Over Financial Reporting
During the quarter ended December 31, 2019,2020, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item9B. Other Information.
None.On March 10, 2021, we filed a corrected version of our Articles of Amendment and Restatement (“Articles”) to address a scrivener’s error relating to an incorrect cross-reference. The Articles are filed as Exhibit 3.1 to this Annual Report on Form 10-K.





54

Table of Contents
PART III

Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted a Code of Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our Code of Ethics may be obtained, free of charge, by sending a written request to our executive office – 9 West 57th Street - Suite 4920, New York, NY 10019, attention Chief Financial Officer of Benefit Street Partners Realty Trust, Inc. In addition, the Code of Ethics is available on the Company’s website at www.bsprealtytrust.com by clicking on “Investor Relations - Corporate Governance - Code of Ethics.” Any amendments and waivers to our Code of Ethics will be disclosed on our website.
The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 20192021 annual meeting of stockholders.
Item 11. Executive Compensation.
The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 20202021 annual meeting of stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 20202021 annual meeting of stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 20202021 annual meeting of stockholders.
Item 14. Principal Accounting Fees and Services.
The information required by this Item is incorporated by reference to our definitive proxy statement to be filed with the SEC with respect to our 20202021 annual meeting of stockholders.

55

PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a)    Financial Statement Schedules
See the Index to Consolidated Financial Statements on page F-1 of this report.
(b)    Exhibits
See the Index to Exhibit below.
Item 16. Form 10-K Summary.
None.
INDEX TO EXHIBITS
The following exhibits are included in this Annual Report on Form 10-K for the year ended December 31, 20182020 (and are numbered in accordance with Item 601 of Regulation S-K).
Exhibit No.Description
3.1(1)
3.1*
3.2(2)(1)
3.3(3)(2)
3.4(4)(3)
3.5(5)(4)
3.6(6)(5)
4.1(7)
4.2(8)
4.3*
4.3(6)
10.1(7)(8)
10.2(8)†
10.3(9)
10.4(10)
10.5(11)
10.6(12)
10.7(13)
10.8(14)
10.9(15)
10.10(16)
10.11(17)10.10(16)
10.12(18)
10.11*
10.13(18)10.12(16)

56

10.18(20)10.17(18)
10.19(20)10.18(18)
10.20(21)10.19(19)
10.21(22)10.20(20)
10.22(23)10.21(21)
10.23(24)
10.24(25)10.22(5)
10.25(26)
10.26(26)10.23(22)
10.27(26)10.24(22)
10.28(26)10.25(22)
10.29(26)10.26(22)
10.30(27)10.27(23)
21*
10.28(24)
10.29*
21*
23.1*
31.1*
31.2*
32*
101*

____________________________________________
* Filed herewith.
† Indicates management contract or compensatory plan or arrangement.
(1) Filed as an exhibit to our current report on Form 8-K filed with the SEC on August 17, 2017.
(2) Filed as an exhibit to our current report on Form 8-K filed with the SEC on June 26, 2018.
(3) (2) Filed as an exhibit to our current report on Form 8-K filed with the SEC on December 11, 2018.
(4) (3) Filed as exhibit 3.1 to our Current Reportcurrent report on Form 8-K filed with the SEC on October 18, 2019.
(5) (4) Filed as exhibit 3.1 to our Current Reportcurrent report on Form 8-K filed with the SEC on December 5, 2019.
(6) (5) Filed as an exhibit to our quarterly report on Form 10-Q for the quarter ended September 30, 2018 filed with the SEC on November 9, 2018.
(6) Filed as an exhibit to our annual report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 17, 2020.
(7) Filed as an exhibit to our current report on Form 8-K filed with the SEC on January 6, 2015.
(8) Filed as an exhibit to our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 29, 2017.
(9) Filed as an exhibit to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 7 to our Registration Statement on Form S-11 filed with the SEC on July 11, 2014.

57

(10) Filed as an exhibit to Pre-Effective Amendment No.1 to Post-Effective Amendment No.12 to our Registration Statement on Form S-11 filed with the SEC on July 8, 2015.
(11) Filed as an exhibit to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 13 filed with the SEC on October 8, 2015.
(12) Filed as an exhibit to our annual report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 11, 2016.
(13) Filed as an exhibit to our current report on Form 8-K filed with the SEC on October 12, 2016.
(14) Filed as an exhibit to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 8 to our Registration Statement on Form S-11 filed with the SEC on October 8, 2014.
(15) Filed as an exhibit to our current report on Form 8-K filed with the SEC on October 23, 2015.
(16) Filed as an exhibit to our quarterly report on Form 10-Q for the quarter ended September 30, 2016 filed with the SEC on November 14, 2016.
(17) Filed as an exhibit to our current report on Form 8-K filed with the SEC on July 6, 2017.
(18) (16) Filed as an exhibit to Amendment No. 1 to our quarterly report on Form 10-Q for the quarter ended June 30, 2017 filed with the SEC on August 23, 2017.
(19) (17) Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 7, 2017.
(20) (18) Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 25, 2017.
(21) (19) Filed as an exhibit to our current report on Form 8-K filed with the SEC on December 5, 2017.
(22) (20) Filed as an exhibit to our current report on Form 8-K filed with the SEC on January 23, 2018.
(23) Filed as an exhibit to our current report on Form 8-K filed with the SEC on February 16, 2018.
(24) (21) Filed as an exhibit to our current report on Form 8-K filed with the SEC on April 11, 2018.
(25) (22) Filed as an exhibit to our annual report on Form 10-K filed with the SEC on March 29, 2019.
(23) Filed as an exhibit 10.1 to our current report on Form 8-K filed with the SEC on June 6, 2018.5, 2019.
(26) Filed as an exhibit to our Annual Report on Form 10-K filed with the SEC on March 29, 2019.
(27) (24) Filed as exhibit 10.1 to our Current Reportquarterly report on Form 8-K10-Q for the quarter ended March 31, 2020 filed with the SEC on June 5, 2019.May 15, 2020.

58



Table of Contents

SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 19th day of March, 2020.
authorized.
Benefit Street Partners Realty Trust, Inc. 
Date: March 10, 2021By/s/ Richard J. Byrne
Richard J. Byrne
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this annual report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
NameCapacityDate
/s/ Richard J. ByrneChief Executive Officer and PresidentMarch 10, 2021
Richard J. Byrne(Principal Executive Officer)
NameCapacityDate
/s/ Richard J. ByrneChief Executive Officer and PresidentMarch 19, 2020
Richard J. Byrne(Principal Executive Officer)
/s/ Jerome S. BaglienChief Financial Officer and Treasurer (Principal Financial and Accounting Officer)March 19, 202010, 2021
Jerome S. Baglien
/s/ Elizabeth K. TuppenyLead Independent DirectorMarch 19, 202010, 2021
Elizabeth K. Tuppeny
/s/ Buford OrtaleDirectorMarch 19, 202010, 2021
Buford Ortale
/s/ Jamie HandwerkerDirectorMarch 19, 202010, 2021
Jamie Handwerker
/s/ Peter McDonoughDirectorMarch 19, 202010, 2021
Peter McDonough

59


BENEFIT STREET PARTNERS REALTY TRUST, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Report of Independent Registered Public Accounting Firm




To the Stockholders and the Board of Directors of Benefit Street Partners Realty Trust, Inc.


Opinion on the Financial Statements


We have audited the accompanying consolidated balance sheets of Benefit Street Partners Realty Trust, Inc. (the “Company”) as of December 31, 20192020 and 2018,2019, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2019,2020, and the related notes and financial statement schedule IV (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 20192020 and 2018,2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019,2020, in conformity with U.S. generally accepted accounting principles.


Adoption of new accounting standard

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for credit losses in 2020. As explained below, auditing Benefit Street Partners Realty Trust Inc.’s allowance for credit losses – Commercial mortgage loans held-for-investment, including the adoption of the new accounting guidance, was a critical audit matter.

Basis for Opinion


These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’sCompany's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.


Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



Critical Audit Matter


The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.


F-2


Allowance for credit losses – Commercial mortgage loans held-for-investment

Description of the MatterAllowance for credit losses – Commercial mortgage loans held-for-investment totaled $20.9 million as of December 31, 2020. As disclosed in Note 2 to the consolidated financial statements, the allowance for credit losses for the Commercial mortgage loans held-for-investment carried at amortized cost, represents a lifetime estimate of expected credit losses. As discussed above and in Note 2 to the financial statements, effective January 1, 2020 the Company adopted new accounting guidance related to the estimate of allowance for credit losses. The allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio by utilizing expected loss models. When determining expected losses, the Company uses an economic scenario over a reasonable and supportable forecast period and then fully reverts to historical loss experience to estimate losses over the remaining asset lives. The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. Auditing the Allowance for credit losses – Commercial mortgage loans held-for-investment was complex due to the use of intricate expected loss models and the highly judgmental nature of the economic scenario and the key inputs of the models.
How We Addressed the Matter in Our AuditWith the support of specialists, we assessed the economic scenario by, among other procedures, evaluating management’s methodology and agreeing a sample of key economic variables used to external sources. We also performed and considered the results of various sensitivity analyses and analytical procedures, including comparison of a sample of the key economic variables to alternative external sources, historical statistics and peer real estate investment trust information. With respect to expected loss models, with the support of specialists, we evaluated model calculation design and re-performed the calculation for the models. We also tested the appropriateness of a sample of key inputs and assumptions used in these models by agreeing significant inputs and underlying data to internal and external sources, as well as recalculating when required. We evaluated the overall allowance amount, including model estimates and whether the recorded allowance for credit losses appropriately reflects expected credit losses on the loan portfolio. We reviewed historical loss statistics, peer real estate investment trust information, subsequent events and transactions and considered whether they corroborate or contradict the Company’s measurement of the allowance for credit losses.


/s/ Ernst & Young LLP


We have served as the Company’s auditor since 2017.


New York, New York
March 16, 202010, 2021







F-3


BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Audited)
 December 31, 2019 December 31, 2018
ASSETS   
Cash and cash equivalents$87,246
 $191,390
Restricted cash21,876
 13,029
Commercial mortgage loans, held for investment, net of allowance of $921 and $4,8362,762,042
 2,206,830
Commercial mortgage loans, held-for-sale, measured at fair value112,562
 76,863
Real estate securities, available for sale, measured at fair value386,316
 26,412
Derivative instruments, at fair value1,119
 846
Other real estate investments, measured at fair value2,557
 
Receivable for loan repayment (1)
89,317
 73,684
Accrued interest receivable16,308
 12,789
Prepaid expenses and other assets5,322
 4,235
Intangible lease asset, net of amortization14,377
 
Operating right of use asset, net of amortization5,979
 
Real estate owned, net of depreciation35,333
 
Receivable for unsettled trades266
 
Total assets$3,540,620
 $2,606,078
LIABILITIES AND STOCKHOLDERS' EQUITY   
Collateralized loan obligations$1,803,185
 $1,505,279
Repurchase agreements - commercial mortgage loans252,543
 149,440
Repurchase agreements - real estate securities394,359
 44,539
Mortgage note payable29,167
 
Other financing and loan participation - commercial mortgage loans
 9,902
Derivative instruments, at fair value1,581
 1,319
Interest payable4,958
 3,025
Distributions payable6,912
 5,834
Accounts payable and accrued expenses10,925
 4,497
Due to affiliates4,789
 3,229
Operating lease liability6,136
 
Deferred rent revenue150
 
Total liabilities$2,514,705
 $1,727,064
Commitment and contingencies (See Note 10)

 

Redeemable convertible preferred stock Series A, $0.01 par value, 60,000 authorized, 40,500 and 29,249 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively$202,144
 $145,786
Redeemable convertible preferred stock Series C, $0.01 par value, 20,000 authorized, 1,400 shares issued and outstanding as of December 31, 2019 and none issued or outstanding as of December 31, 20186,966
 
Equity:   
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of December 31, 2019 and December 31, 2018
 
Common stock, $0.01 par value, 949,999,000 shares authorized, 43,916,815 and 39,303,710 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively441
 395
Additional paid-in capital903,310
 827,558
Accumulated other comprehensive income (loss)(978) (459)
Accumulated deficit(85,968) (94,266)
Total stockholders' equity$816,805
 $733,228
Total liabilities, redeemable convertible preferred stock and stockholders' equity$3,540,620
 $2,606,078
December 31, 2020December 31, 2019
ASSETS
Cash and cash equivalents$82,071 $87,246 
Restricted cash10,070 21,876 
Commercial mortgage loans, held for investment, net of allowance of $20,886 and $921 as of December 31, 2020 and December 31, 2019, respectively2,693,848 2,762,042 
Commercial mortgage loans, held-for-sale, measured at fair value67,649 112,562 
Real estate securities, available for sale, measured at fair value, amortized cost of $179,392 and $387,294 as of December 31, 2020 and December 31, 2019, respectively171,136 386,316 
Derivative instruments, measured at fair value25 1,119 
Other real estate investments, measured at fair value2,522 2,557 
Receivable for loan repayment (1)
98,551 89,317 
Accrued interest receivable15,295 16,308 
Prepaid expenses and other assets8,538 5,322 
Intangible lease asset, net of amortization13,546 14,377 
Operating right of use asset, net of amortization5,979 
Real estate owned, net of depreciation26,510 35,333 
Receivable for unsettled trades0266 
Total assets$3,189,761 $3,540,620 
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations$1,625,498 $1,803,185 
Repurchase agreements - commercial mortgage loans276,340 252,543 
Repurchase agreements - real estate securities186,828 394,359 
Mortgage note payable29,167 29,167 
Other financing and loan participation - commercial mortgage loans31,379 0
Derivative instruments, measured at fair value403 1,581 
Interest payable2,110 4,958 
Distributions payable15,688 6,912 
Accounts payable and accrued expenses5,125 10,925 
Due to affiliates9,525 4,789 
Operating lease liability6,136 
Deferred rent revenue150 
Total liabilities$2,182,063 $2,514,705 
Redeemable convertible preferred stock Series A, $0.01 par value, 60,000 authorized and 40,515 and 40,500 issued and outstanding as of December 31, 2020 and December 31, 2019, respectively$202,292 $202,144 
Redeemable convertible preferred stock Series C, $0.01 par value, 20,000 authorized and 1,400 issued and outstanding as of December 31, 2020 and December 31, 2019, respectively6,962 6,966 
Equity:
Preferred stock, $0.01 par value, 50,000,000 authorized, NaN issued and outstanding as of December 31, 2020 and December 31, 2019, respectively00
Common stock, $0.01 par value, 949,999,000 shares authorized, 44,510,051 and 43,916,815 issued and outstanding as of December 31, 2020 and December 31, 2019, respectively446 441 
Additional paid-in capital912,725 903,310 
Accumulated other comprehensive income (loss)(8,256)(978)
Accumulated deficit(106,471)(85,968)
Total stockholders' equity$798,444 $816,805 
Total liabilities, redeemable convertible preferred stock and stockholders' equity$3,189,761 $3,540,620 
___________________
(1) Includes $89.3$98.6 million and $73.7$89.3 million of cash held by the servicer related to CLO loan payoffs as of December 31, 20192020 and December 31, 2018.2019.
The accompanying notes are an integral part of these consolidated financial statements.

F-4


BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Audited)
Year Ended December 31,
Year Ended December 31,202020192018
2019 2018 2017
Interest income:     
Interest Income:Interest Income:
Interest income$195,299
 $152,288
 $89,564
Interest income$179,872 $195,299 $152,288 
Less: Interest expense90,418
 70,000
 32,359
Less: Interest expense66,556 90,418 70,000 
Net interest income104,881
 82,288
 57,205
Net interest income113,316 104,881 82,288 
Revenue from real estate owned3,169
 
 
Revenue from real estate owned4,299 3,169 
Total Income$108,050
 $82,288
 $57,205
Total Income$117,615 $108,050 $82,288 
     
Expenses:     Expenses:
Asset management and subordinated performance fee16,226
 10,299
 9,273
Asset management and subordinated performance fee15,178 16,226 10,299 
Acquisition fees and acquisition expenses
900
 452
 4,197
Acquisition expensesAcquisition expenses696 900 452 
Administrative services expenses16,363
 13,446
 6,765
Administrative services expenses13,120 16,363 13,446 
Professional fees11,631
 8,318
 5,444
Professional fees10,964 11,631 8,318 
Real estate owned operating expenses2,802
 
 
Real estate owned operating expenses3,653 2,802 
Depreciation and Amortization507
 
 
Depreciation and amortizationDepreciation and amortization2,233 507 
Other expenses3,771
 4,887
 3,837
Other expenses3,312 3,771 4,887 
Total expenses$52,200
 $37,402
 $29,516
Total expenses$49,156 $52,200 $37,402 
Other (income)/loss:     Other (income)/loss:
Loan loss provision/(recovery)3,007
 3,370
 (715)
Provision/(benefit) for credit lossesProvision/(benefit) for credit losses13,296 3,007 3,370 
Impairment losses on real estate owned assetsImpairment losses on real estate owned assets398 
Realized (gain)/loss on extinguishment of debtRealized (gain)/loss on extinguishment of debt(3,678)
Realized (gain)/loss on sale of real estate securities
 107
 (172)Realized (gain)/loss on sale of real estate securities10,137 107
Realized (gain)/loss on sale of commercial mortgage loan held-for-sale25
 9
 (120)
Realized (gain)/loss on sale of commercial mortgage loan, held-for-saleRealized (gain)/loss on sale of commercial mortgage loan, held-for-sale(184)25 
Realized (gain)/loss on sale of real estate owned assets, held-for-saleRealized (gain)/loss on sale of real estate owned assets, held-for-sale(1,851)
Realized (gain)/loss on sale of commercial mortgage loan, held-for-sale, measured at fair value(37,832) (11,288) (4,523)Realized (gain)/loss on sale of commercial mortgage loan, held-for-sale, measured at fair value(15,931)(37,832)(11,288)
Unrealized (gain)/loss on commercial mortgage loans held-for-sale
 
 (247)
Unrealized (gain)/loss on commercial mortgage loans, held-for-sale, measured at fair value(312) 237
 
Unrealized (gain)/loss on commercial mortgage loans, held-for-sale, measured at fair value75 (312)237 
Unrealized (gain)/loss on other real estate investments, measured at fair value(47) 
 
Unrealized (gain)/loss on other real estate investments, measured at fair value32 (47)
Unrealized (gain)/loss on derivatives(1,722) 1,374
 17
Unrealized (gain)/loss on derivatives995 (1,722)1,374 
Realized (gain)/loss on derivatives4,324
 (1,827) (555)Realized (gain)/loss on derivatives12,486 4,324 (1,827)
Total other (income)/loss$(32,557) $(8,018) $(6,315)Total other (income)/loss$15,775 $(32,557)$(8,018)
Income/(loss) before taxes88,407
 52,904
 34,004
Income before taxesIncome before taxes52,684 88,407 52,904 
Provision/(benefit) for income tax4,483
 79
 225
Provision/(benefit) for income tax(2,062)4,483 $79 
Net income$83,924
 $52,825
 $33,779
Net income$54,746 $83,924 $52,825 
Net income applicable to common stock$66,914
 $49,181
 $33,779
Net income applicable to common stock$39,826 $66,914 $49,181 
     
Basic net income per share$1.60
 $1.44
 $1.06
Basic net income per share$0.90 $1.60 $1.44 
Diluted net income per share$1.60
 $1.44
 $1.06
Diluted net income per share$0.90 $1.60 $1.44 
Basic weighted average shares outstanding41,859,142
 34,268,707
 31,772,231
Basic weighted average shares outstanding44,384,813 41,859,142 34,268,707 
Diluted weighted average shares outstanding41,871,646
 36,779,735
 31,784,889
Diluted weighted average shares outstanding44,398,879 41,871,646 36,779,735 
The accompanying notes are an integral part of these consolidated financial statements.

F-5

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars In thousands)
(Audited)
Year Ended December 31,
202020192018
Net income$54,746 $83,924 $52,825 
Unrealized gain/(loss) on available for sale securities(7,278)(978)(459)
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc.$47,468 $82,946 $52,366 
 Year Ended December 31,
 2019 2018 2017
Net income$83,924
 $52,825
 $33,779
Unrealized gain/(loss) on available-for-sale securities(978) (459) 500
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc.$82,946
 $52,366
 $34,279


The accompanying notes are an integral part of these consolidated financial statements.



F-6

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except share data)
Common Stock
Number of SharesPar ValueAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders' Equity
Balance, December 31, 201731,834,072 $320 $704,101 $ $(94,082)$610,339 
Issuance of common stock7,533,834 75 124,260 — — 124,335 
Common stock repurchases(809,023)(8)(15,077)— — (15,085)
Common stock issued through distribution reinvestment plan739,052 14,015 — — 14,023 
Share-based compensation5,775 — 157 — — 157 
Offering costs— — 102 — — 102 
Net income— — — — 52,825 52,825 
Distributions declared— — — — (53,009)(53,009)
Other comprehensive income— — — (459)— (459)
Balance, December 31, 201839,303,710 $395 $827,558 $(459)$(94,266)$733,228 
Issuance of common stock4,601,904 46 76,846 — — 76,892 
Common stock repurchases(741,853)(7)(13,806)— — (13,813)
Common stock issued through distribution reinvestment plan746,654 13,903 — — 13,910 
Share-based compensation6,400 — 156 — — 156 
Offering costs— — (1,347)— — (1,347)
Net income— — — — 83,924 83,924 
Distributions declared— — — — (75,626)(75,626)
Other comprehensive income— — — (519)— (519)
Balance, December 31, 201943,916,815 $441 $903,310 $(978)$(85,968)$816,805 
Issuance of common stock650,034 10,880 — — 10,886 
Common stock repurchases(579,467)(6)(10,253)— — (10,259)
Common stock issued through distribution reinvestment plan511,899 8,809 — — 8,814 
Share-based compensation10,770 — 193 — — 193 
Offering costs— — (214)— — (214)
Net income— — — — 54,746 54,746 
Distributions declared— — — — (67,488)(67,488)
Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)— — — — (7,761)(7,761)
Other comprehensive income— — — (7,278)— (7,278)
Balance, December 31, 202044,510,051 $446 $912,725 $(8,256)$(106,471)$798,444 
 Common Stock        
 Number of Shares Par Value Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity
Balance, December 31, 201631,884,631
 $319
 $704,500
 $(500) $(70,669) $633,650
Common stock repurchases(1,072,708) (11) (20,535) 
 
 (20,546)
Common stock issued through distribution reinvestment plan1,016,165
 12
 20,039
 
 
 20,051
Share-based compensation5,984
 
 97
 
 
 97
Net income
 
 
 
 33,779
 33,779
Distributions declared
 
 
 
 (57,192) (57,192)
Other comprehensive loss
 
 
 500
 
 500
Balance, December 31, 201731,834,072
 $320
 $704,101
 $
 $(94,082) $610,339
Issuance of common stock7,533,834
 75
 124,260
 
 
 124,335
Common stock repurchases(809,023) (8) (15,077) 
 
 (15,085)
Common stock issued through distribution reinvestment plan739,052
 8
 14,015
 
 
 14,023
Share-based compensation5,775
 
 157
 
 
 157
Offering costs
 
 102
 
 
 102
Net income
 
 
 
 52,825
 52,825
Distributions declared
 
 
 
 (53,009) (53,009)
Other comprehensive income
 
 
 (459) 
 (459)
Balance, December 31, 201839,303,710
 $395
 $827,558
 $(459) $(94,266) $733,228
Issuance of common stock4,601,904
 46
 76,846
 
 
 76,892
Common stock repurchases(741,853) (7) (13,806) 
 
 (13,813)
Common stock issued through distribution reinvestment plan746,654
 7
 13,903
 
 
 13,910
Share-based compensation6,400
 
 156
 
 
 156
Offering Cost
 
 (1,347) 
 
 (1,347)
Net income
 
 
 
 83,924
 83,924
Distributions declared
 
 
 
 (75,626) (75,626)
Other comprehensive income
 
 
 (519) 
 (519)
Balance, December 31, 201943,916,815
 $441
 $903,310
 $(978) $(85,968) $816,805



The accompanying notes are an integral part of these consolidated financial statements.



F-6
F-7

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)





For the Years Ended December 31,
202020192018
Cash flows from operating activities:
Net income$54,746 $83,924 $52,825 
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization and (discount accretion), net(5,999)(6,144)(4,572)
Accretion of deferred commitment fees(6,410)(2,754)(1,577)
Amortization of deferred financing costs9,585 9,584 12,681 
Share-based compensation193 156 157 
Realized (gain)/loss from sale of real estate securities10,137 107 
Realized (gain)/loss from sale of real estate owned, held-for-sale(1,851)
Realized (gain)/loss from extinguishment of debt(3,678)
Unrealized (gain)/loss on commercial mortgage loans held-for-sale75 (359)237 
Unrealized (gain)/losses on derivative instruments995 (1,722)1,374 
Unrealized loss on other real estate securities32 
Depreciation and amortization2,233 
Recognition of deferred rent revenue(150)
Increase/(decrease) for credit losses13,296 3,007 3,370 
Impairment losses on real estate owned assets398 
Origination of commercial mortgage loans, held-for-sale(267,553)(1,020,702)(621,597)
Proceeds from sale of commercial mortgage loans, held-for-sale312,206 975,243 573,010 
Changes in assets and liabilities:
Accrued interest receivable7,423 (765)(3,060)
Prepaid expenses and other assets(7,079)(4,020)(4,133)
Accounts payable and accrued expenses(5,837)6,428 (13)
Due to affiliates4,736 1,560 (3,192)
Interest payable(2,164)1,933 1,481 
Net cash (used in)/provided by operating activities$115,334 $45,369 $7,098 
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans, held for investment$(1,281,158)$(1,321,644)$(1,598,786)
Principal repayments received on commercial mortgage loans, held for investment1,228,225 756,141 753,921 
Purchase of other real estate investments(2,511)
Purchase of real estate owned and capital expenditures(2,824)(42,018)
Proceeds from sale of real estate owned, held-for-sale22,472 
Proceeds from sale of commercial mortgage loans, held-for-sale77,164 16,910 
Purchase of real estate securities(148,580)(369,911)(39,510)
Proceeds from sale/repayment of real estate securities346,201 9,369 12,456 
Purchase of derivative instruments(813)1,333 (804)
Net cash (used in)/provided by investing activities$240,687 $(969,241)$(855,813)
Cash flows from financing activities:
Proceeds from issuances of common stock$10,672 $75,545 $124,335 
Proceeds from issuances of redeemable convertible preferred stock47 63,197 146,245 
Common stock repurchases(10,259)(13,813)(15,085)
Reimbursements/(payments) of offering costs and fees related to stock issuances(887)
F-8
 For the Years Ended December 31,
 2019 2018 2017
Cash flows from operating activities:     
Net income$83,924
 $52,825
 $33,779
Adjustments to reconcile net income to net cash provided by operating activities:     
Premium amortization and (discount accretion), net(6,144) (4,572) (2,554)
Accretion of deferred commitment fees(2,754) (1,577) (1,372)
Amortization of deferred financing costs9,584
 12,681
 4,650
Share-based compensation156
 157
 97
Unrealized (gain)/loss on commercial mortgage loans held-for-sale(359) 237
 (247)
Unrealized (gain)/losses on derivative instruments(1,722) 1,374
 17
Loan loss (recovery)/provision3,007
 3,370
 (715)
Realized (gain)/loss on sale of real estate securities
 107
 
Impairment losses on real estate securities
 
 
Origination of commercial mortgage loans, held-for-sale(1,020,702) (621,597) (156,101)
Proceeds from sale of commercial mortgage loans, held-for-sale975,243
 573,010
 132,093
Changes in assets and liabilities:     
Accrued interest receivable(765) (3,060) (2,197)
Prepaid expenses and other assets(4,020) (4,133) (5,441)
Accounts payable and accrued expenses6,428
 (13) 3,341
Due to affiliates1,560
 (3,192) 2,357
Interest payable1,933
 1,481
 647
Net cash (used in)/provided by operating activities$45,369
 $7,098
 $8,354
Cash flows from investing activities:     
Origination and purchase of commercial mortgage loans, held for investment$(1,321,644) $(1,598,786) $(836,961)
Purchase of real estate owned(42,018) 
 
Proceeds from sale of commercial mortgage loans, held for sale
 16,910
 121,658
Principal repayments received on commercial mortgage loans, held for investment756,141
 753,921
 333,249
Purchase of real estate securities(369,911) (39,510) 
Purchase of other real estate investments(2,511) 
 
Proceeds from sale of real estate securities
 12,456
 34,888
Principal repayments received on real estate securities9,369
 
 15,000
Purchase of derivative instruments1,333
 (804) (592)
Net cash (used in)/provided by investing activities$(969,241) $(855,813) $(332,758)
Cash flows from financing activities:     
Proceeds from issuances of common stock$75,545
 $124,335
 $
Proceeds from issuances of redeemable convertible preferred stock63,197
 146,245
 
Common stock repurchases(13,813) (15,085) (20,546)
Reimbursements/(payments) of offering costs and fees related to stock issuances
 (887) 
Borrowings under collateralized loan obligation639,899
 1,161,002
 700,862
Repayments of collateralized loan obligation(343,191) (478,177) (143,086)
Borrowings on repurchase agreements - commercial mortgage loans1,035,524
 1,833,838
 652,978
Repayments of repurchase agreements - commercial mortgage loans(932,420) (1,750,088) (844,952)
Borrowings on repurchase agreements - real estate securities1,570,331
 280,837
 499,290

F-7

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)





Borrowings under collateralized loan obligation639,899 1,161,002 
Repayments of collateralized loan obligation(182,680)(343,191)(478,177)
Borrowings on repurchase agreements - commercial mortgage loans682,970 1,035,524 1,833,838 
Repayments of repurchase agreements - commercial mortgage loans(659,173)(932,420)(1,750,088)
Borrowings on repurchase agreements - real estate securities2,675,218 1,570,331 280,837 
Repayments of repurchase agreements - real estate securities(2,882,749)(1,220,511)(275,332)
Proceeds from other financing and loan participation - commercial mortgage loans31,379 10,000 
Repayments on other financing and loan participation - commercial mortgage loans(10,000)(26,182)
Borrowing on mortgage note payable11,712 29,167 
Payments of deferred financing costs(349)(4,540)(12,128)
Distributions paid(49,790)(60,613)(36,952)
Net cash (used in)/provided by financing activities:$(373,002)$828,575 $961,426 
Net change in cash, cash equivalents and restricted cash$(16,981)$(95,297)$112,711 
Cash, cash equivalents and restricted cash, beginning of period109,122 204,419 91,708 
Cash, cash equivalents and restricted cash, end of period$92,141 $109,122 $204,419 
Supplemental disclosures of cash flow information:
Taxes paid$4,400 $$355 
Interest paid59,819 78,901 53,029 
Supplemental disclosures of non-cash flow information:
Common stock issued through distribution reinvestment plan$8,814 13,903 14,023 
Commercial mortgage loans transferred from held for investment to held-for-sale76,979 16,750 
Distribution payable15,688 6,912 5,834 
Commercial mortgage loans transferred from held-for-sale to held for investment10,072 
Real estate owned received in foreclosure35,411 8,110 
Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents$82,071 $87,246 $191,390 
Restricted cash10,070 21,876 13,029 
Cash, cash equivalents and restricted cash, end of period$92,141 $109,122 $204,419 
Repayments of repurchase agreements - real estate securities(1,220,511) (275,332) (526,894)
Proceeds from other financing and loan participation - commercial mortgage loans
 10,000
 36,200
Repayments on other financing and loan participation - commercial mortgage loans(10,000) (26,182) (10,017)
Borrowing on mortgage note payable29,167
 
 
Payments of deferred financing costs(4,540) (12,128) (11,964)
Distributions paid(60,613) (36,952) (38,828)
Net cash (used in)/provided by financing activities:$828,575
 $961,426
 $293,043
Net change in cash, cash equivalents and restricted cash$(95,297) $112,711
 $(31,361)
Cash, cash equivalents and restricted cash, beginning of period204,419
 91,708
 123,069
Cash, cash equivalents and restricted cash, end of period$109,122
 $204,419
 $91,708
      
Supplemental disclosures of cash flow information:     
Taxes paid$
 $355
 $
Interest paid78,901
 53,029
 27,062
Supplemental disclosures of non-cash flow information:     
Common stock issued through distribution reinvestment plan13,903
 14,023
 20,051
Loans transferred to commercial real estate loans, held-for-sale, transferred at fair value
 16,750
 100,005
Distribution payable6,912
 5,834
 3,917
Commercial mortgage loans transferred from HFS to HFI10,072
 
 
      
Reconciliation of cash, cash equivalents and restricted cash at end of period:     
Cash and cash equivalents$87,246
 $191,390
 $83,711
Restricted cash
21,876
 13,029
 7,997
Cash, cash equivalents and restricted cash, end of period$109,122
 $204,419
 $91,708
      


The accompanying notes are an integral part of these consolidated financial statements.

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F-8

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020



Note 1 - Organization and Business Operations
Benefit Street Partners Realty Trust, Inc. (the "Company") is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt investments secured by properties located within and outside the United States. The Company was incorporated in Maryland on November 15, 2012 and commenced operations on May 14, 2013.
The Company made a tax election to be treated as a real estate investment trust (a "REIT") for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. The Company believes that it has qualified as a REIT and intends to continue to meet the requirements for qualification and taxation as a REIT. In addition, the Company, through a subsidiary which is treated as a taxable REIT subsidiary (a "TRS") is indirectly subject to U.S federal, state and local income taxes. The majority of the Company's business is conducted through Benefit Street Partners Realty Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the units of limited partner interests in the OP.
The Company has no direct employees. Benefit Street Partners L.L.C. serves as the Company's advisor (the "Advisor") pursuant to an Amended and Restated Advisory Agreement, dated January 19, 2018 (the "Advisory Agreement"). The Advisor is a wholly owned subsidiary of Franklin Resources, Inc. which, together with its various subsidiaries, operates as Franklin Templeton. Prior to February 1, 2019, the Advisor was in partnership with Providence Equity Partners L.L.C., a global private equity firm. The Advisor, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), is a credit-focused alternative asset management firm. Established in 2008, the Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor manages the Company's affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of the Company's assets and the operations of the Company.
The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") at a profit. The Company also invests in commercial real estate securities. Real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs"). The Company also owns real estate acquired by the Company through foreclosure and deed in lieu of foreclosure, and purchased for investment, typically subject to triple net leases.
Note 2 - Summary of Significant Accounting Policies
Basis of Accounting
The accompanyingCompany's consolidated financial statements and related footnotes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the requirements for reporting on Form 10-K and Regulation S-X, as appropriate.
Certain prior period amounts have been reclassified to conform with current presentation. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. The current period’s results of operations will not necessarily be indicative of results in any subsequent reporting period.
Use of Estimates
GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the annualinterim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented.
Certain prior period amounts have been reclassified to conform with current presentation. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. The current period’s results of operations will not necessarily be indicative of results inthat ultimately may be achieved for the entire year or any subsequent reporting period.periods.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
In response to the global coronavirus (COVID-19) pandemic, numerous countries, including the U.S., have declared national emergencies with respect to COVID-19 and certain jurisdictions, including those where our corporate headquarters and/or properties that secure our investments, or properties that the Company owns, are located, have at times imposed “stay-at-home” guidelines or orders or other restrictions to help prevent its spread. The effects of COVID-19 may negatively and materially impact significant estimates and assumptions used by the Company including, but not limited to estimates of expected credit losses, valuation of our equity method investments and the fair value estimates of the Company’s assets and liabilities. Actual results could materially differ from those estimates.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members, as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary.

F-9

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP.
The Company consolidates all entities that it controls through either majority ownership or voting rights. In addition, the Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.
The accompanying consolidated financial statements include the accounts of collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheetsheets in accordance with ASCFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.Consolidation.
Acquisition Fees and Acquisition Expenses
The Company has historically incurred acquisition fees and acquisition expenses payable to the Advisor. The Company’s obligation to pay the Advisor acquisition fees terminated in September 2017. Prior to then, the Company paid the Advisor an acquisition fee based on the principal amount funded by the Company to originate or acquire commercial mortgage loan investments or on the anticipated net equity funded by the Company to acquire real estate securities. Acquisition fees and acquisition expenses paid to the Company's Advisor in connection with the origination and acquisition of commercial mortgage loan investments and acquisition of real estate securities were evaluated based on the nature of the expense to determine if they should be expensed in the period incurred or capitalized and amortized over the life of the investment. The Company capitalizes certain direct costs relating to the loan origination activities and theactivities. The cost is amortized over the life of the loan. Pursuant to the Advisory Agreement, the Advisor is entitled to an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans (or anticipated net equity funded by the Companyloan and recognized in interest income in the caseCompany's consolidated statements of acquisition of real estate securities) untiloperations. Acquisition expenses paid on future funding amounts are expensed within the aggregate purchase price for all investments acquired reaches $600,000,000 and reimbursement for insourced acquisition expenses of 0.5%. In September 2017,line in the Company's aggregate purchase price for all investments acquired reached $600,000,000, which concurrently terminated the 1.0% acquisition fee payments to the Advisor for all investments subsequent to the limit being reached.consolidated statements of operations.
Cash and Cash Equivalents
Cash consists of amounts deposited with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company up to an insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of 90 days or less when purchased. Cash equivalents includes a $10.3 million certificate of deposit.
Restricted Cash
Restricted cash primarily consists of cash pledged as margin on repurchase agreements and derivative transactions. The duration of this restricted cash generally matches the duration of the related repurchase agreements or derivative transaction.
Commercial Mortgage Loans
Held-for-InvestmentHeld for Investment - Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired are carried at amortized cost less a specific allowance for loancredit losses. Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Guaranteed loan exitcommitment fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method. The accretion of guaranteed loan exitcommitment fees is recognized in interest income in the Company's consolidated statements of operations.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Held-for-Sale - Commercial mortgage loans that are intended to be sold in the foreseeable future are reported as held-for sale and are transferred at fair value and recorded at the lower of cost or fair value with changes recorded through the statements of operations. Unamortized loan origination costs for commercial mortgage loans held-for-sale that are carried at the lower of cost or fair value are capitalized as part of the carrying value of the loans and recognized upon the sale of such loans. Amortization of origination costs ceases upon transfer of commercial mortgage loans to held-for-sale. For the year ended December 31, 2019, the Company originated $5.0 million of commercial mortgage loans held-for-sale and sold these loans during the period for net proceeds of approximately $5.0 million.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Held-for-Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held-for-sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in the Commercial mortgage loans, held-for-sale, measured at fair value in the consolidated balance sheet.sheets. Interest income received on commercial mortgage loans held-for-sale, measured at fair value is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. Costs to originate these investments are expensed when incurred.
Real estate owned
Real estate owned (“REO”) representsassets represent real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase. For real estate acquired by the Company through foreclosure, REO assets are recordedcarried at their estimated fair value at acquisition and are presented net of accumulated depreciation. For REOdepreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired assets such as land, building, furniture, fixtures and equipment. Asset acquisitions in which monetary consideration is given generally includes the transaction costs of the asset acquisition. Acquiring assets in groups requires not only ascertaining the cost of the asset (or net asset) group but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. The cost of a group of assets acquired through purchase, REOin an asset acquisition shall be allocated to the individual assets are recorded at cost at acquisitionacquired or liabilities assumed based on their relative fair values and are presented net of accumulated depreciation.  shall not give rise to goodwill.
Real estate owned assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate assetowned assets are capitalized and depreciated over their estimated useful lives. Real estate owned revenue is recognized when the Company satisfies a performance obligation by transferring a promised good or service to a customer. The Company is considered to have satisfied all performance obligations at a point in time.
Real estate owned assets that are probable to be sold within one year are reported as held-for-sale. Real estate owned assets classified as held-for-sale shall be measured at the lower of its carrying amount or fair value less cost to sell. Real estate owned assets shall not be depreciated or amortized while it is classified as held-for-sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held-for-sale shall continue to be accrued. Upon the disposition of a real estate owned asset, the Company calculates realized gains and losses as net proceeds received less the carrying value of the real estate owned asset. Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.
Leases
Operating right of use assets "ROU" represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. Leases will be classified as either a finance or operating lease, with such classification affecting the pattern and classification of expense recognition in the consolidated statements of operations. For leases greater than 12 months, the Company determines, at the inception of the contract, if the arrangement meets the classification criteria for an operating or finance lease. For leases that have extension options, which can be exercised at the Company's discretion, management uses judgment to determine if it is reasonably certain that such extension options will be elected. If the extension options are reasonably certain to occur, the Company includes the extended term's lease payments in the calculation of the respective lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The incremental borrowing rate used to discount the lease liability is determined at commencement of the lease, or upon modification of the lease, as the interest rate a lessee would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company's incremental borrowing rate considers information at both the corporate and property level and analysis of current market conditions for obtaining new financings. All leases as of December 31, 2020 and December 31, 2019 were operating leases.
Separately, on October 15, 2019, the Company acquired certain real estate assets which had an existing in-place lease asset. This in-place lease asset is recorded as an Intangible lease asset on the consolidated balance sheetsheets and amortized using the straight-line method over the contractual life of the lease.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Credit Losses
In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses, which amends the credit impairment model for financial instruments. The Company adopted ASU 2016-13 on January 1, 2020.
Following our adoption of ASU 2016-13, our previous incurred loss model was replaced with a lifetime current expected credit loss (“CECL”) model for financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans, loan commitments, held-to-maturity (“HTM”) debt securities, financial guarantees, net investments in leases, reinsurance and trade receivables, which will generally result in earlier recognition of allowance for losses. For available for sale (“AFS”) debt securities, unrealized credit losses are recognized as allowances rather than reductions in amortized cost basis and elimination of the other than temporary impairment concept will result in more frequent estimation of credit losses. The accounting model for purchased credit impaired loans and debt securities has been simplified, including elimination of some of the asymmetrical treatment between credit losses and credit recoveries, to be consistent with the CECL model for originated and purchased non-credit impaired assets. The adopted model for ASC 326 as it applies to HTM and AFS securities, encompassing the beneficial interest model for securities that are not of high credit quality, has been clarified to include the effective interest method as a basis for the projection of cash collections method in connection with the newly adopted impairment models for HTM and AFS debt securities under ASC 326 when securities are not of high credit quality. Upon adoption of ASU 2016-13 on January 1, 2020, the Company recorded an additional allowance for credit losses for our outstanding loans and unfunded loan commitments of $7.8 million, or $0.18 per share, which was 0.27% of the aggregate commitment amount of the Company’s loan portfolio at December 31, 2019.
Pre-adoptionTransition AdjustmentPost-adjustment
Assets
Commercial mortgage loans, held for investment, net of allowance$2,762,042 $(7,211)$2,754,831 
Liabilities
Accounts payable and accrued expenses (1)
10,925 (550)10,375 
Equity
Accumulated deficit$(85,968)$(7,761)$(93,729)
_______________________
(1) Includes allowance associated with unfunded loan commitment.
The following discussion highlights changes to the Company’s accounting policies as a result of this adoption.
Allowance for Loan Lossescredit losses
The allowance for credit losses for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans held for investment and unfunded loan losses reflects management'scommitments represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan losses inherent in the loan portfolio asterm, property type, occupancy and geographic location, financial performance of the balance sheet date. The reserve is increasedborrower, expected payments of principal and interest, as well as internal or decreased through the loan loss provision or (recovery) on the Company's consolidated statements of operationsexternal information relating to past events, current conditions and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as cash in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. reasonable and supportable forecasts.
The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the allowance for credit losses on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.
In measuring the allowance for credit losses for financial instruments including our unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses includesis calculated as the product of PD, LGD and exposure at default (“EAD”). The Company’s model principally utilizes historical loss rates derived from a general, formula-based componentcommercial mortgage backed securities database with historical losses from 1998 to 2020 provided by a reputable third party, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by an asset-specific component.
General reserves are recordedimmediate reversion to average historical losses. For financial instruments assessed on an individual basis, including when (i) available information as of each balance sheet date indicates that it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument, the Company applies a loss has occurred indiscounted cash flow (“DCF”) methodology.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
For financial instruments where the portfolioborrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and (ii) the amountrepayment is expected to be provided substantially through the operation or sale of the loss can be reasonably estimated. The Company estimates loss rates based on historical realized losses experienced in the industry, given the factcollateral, the Company has not experienced significant losses, and takes into account currentmay elect to use as a practical expedient the fair value of the collateral and economic conditions affectingat the probability and severity of lossesreporting date when establishingdetermining the allowance for loancredit losses. The
In developing the allowance for credit losses for its loans held for investment, the Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investmentcollectability, using similar factors as those in collateral, collateral type, project economics and geographic location as well as national and regional economic factors.developing the allowance for credit losses. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. RatingsRisk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.loss with the ratings updated quarterly. At the time of origination or purchase, loans held for investment are ranked as a “2” and will move accordingly going forward based on the ratings which are defined as follows:
1.Very Low Risk- Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2.Low Risk- Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3.Average Risk- Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4.High Risk/Delinquent/Potential for Loss- Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5.Impaired/Defaulted/Loss Likely- Underperforming investment with expected loss of interest and some principal.
The asset-specific reserve component relatesCompany also considers qualitative and environmental factors, including, but not limited to, reserveseconomic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the allowance for credit losses.
Changes in the allowance for credit losses for the Company’s financial instruments are recorded in Provision/(benefit) for credit losses on individual impaired loans. the consolidated statements of operations with a corresponding offset to the financial instrument’s amortized cost recorded on the consolidated balance sheets, or as a component of Accounts payable and accrued expenses for unfunded loan commitments.
The Company considershas elected to not measure an allowance for credit losses for accrued interest receivable as it is timely, following three months time, reversed against interest income when a loan, real estate security or preferred equity investment is placed on nonaccrual status. The Company did not record reversals of accrued interest receivable during the year ended December 31, 2020. Loans are charged off against the Provision/(benefit) for credit losses when all or a portion of the principal amount is determined to be uncollectible.
Past due and nonaccrual status
Loans are placed on nonaccrual status and considered non-performing when full payment of principal and interest is unpaid for 90 days or more or where reasonable doubt exists as to timely collection, unless the loan is both well secured and in the process of collection. Interest received on nonaccrual status loans are accounted for under the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company may return a loan to be impairedaccrual status when based upon current informationrepayment of principal and events,interest is reasonably assured.
Troubled Debt Restructuring (“TDR”)
The Company classifies an individual financial instrument as a TDR when it believes that it is probablehas a reasonable expectation that the Companyfinancial instrument’s contractual terms will be unablemodified in a manner that grants concession to collect all amounts due under the contractual terms ofborrower who is experiencing financial difficulty. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the loan agreement. This assessment is madeCompany’s collection on an individual

the financial instrument. The Company determines the allowance for credit losses for financial instruments that are TDRs individually.
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F-14

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.
For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use either the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans or obtain external "as is" appraisals for loan collateral.
A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans.
The Company generally designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will generally be suspended when a loan is designated non-performing unless the loan is well secured, and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged.
Real Estate Securities
On the acquisition date, all of the Company’s commercial real estate securities were classified as available for sale and carried at fair value, and subsequently any unrealized gains or losses are recognized as a component of accumulated other comprehensive income or loss. The Company may elect the fair value option for its real estate securities, and as a result, any unrealized gains or losses on such real estate securities will be recorded in the Company’s consolidated statementstatements of operations. No such election has been made to date. Related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations.
Impairment Analysis of Real Estate Securities
Commercial The Company uses the specific identification method in determining the cost relief for real estate securities forsold. Realized gains and losses from the sale of real estate securities are included in the Company’s consolidated statements of operations.
AFS real estate securities which have experienced a decline in the fair value option hasbelow their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the decline in fair value is due to credit-related factors. Any impairment that is not been elected are periodically evaluated for other-than-temporary impairment.credit-related is recognized in accumulated other comprehensive income, while credit-related impairment is recognized as an allowance on the consolidated balance sheets with a corresponding adjustment on the consolidated statements of operations. If the fair value of a security is less than its amortized cost, the security is considered impaired. Impairment of a security is considered other-than-temporary when (i) the Company has the intentintends to sell thean impaired security; (ii) it isreal estate security or more likely than not the Company will be required to sell the security; or (iii) the Company does not expect to recoversuch a security before recovering its amortized cost basis, the entire impairment amount is recognized in the consolidated statements of operations with a corresponding adjustment to the security’s amortized cost basis.
The Company analyzes the AFS security portfolio on a periodic basis for credit losses at the individual security level using the same criteria described above for those amortized cost financial assets subject to an allowance for credit losses including but not limited to; performance of the security. Ifunderlying assets in the Company determines that an other-than-temporary impairment existssecurity, borrower financial resources and a sale is likely,investment in collateral, collateral type, credit ratings, project economics and geographic location as well as national and regional economic factors.
The non-credit loss component of the impairment chargeunrealized loss within the Company’s AFS portfolio is recognized as an impairment of assets onadjustment to the Company's consolidated statement of operations. If a sale is not expected, the portion of the impairment charge relatedindividual security’s asset balance with an offsetting entry to credit factors is recorded as an impairment of assets on the Company's consolidated statement of operations with the remainder recorded as an unrealized gain or loss on investments reported as a component of accumulated other comprehensive income or loss.in the consolidated balance sheets.
Repurchase Agreements
Commercial mortgage loans and real estate securities sold under repurchase agreements have been treated as collateralized financing transactions because the Company maintains effective control over the transferred securities. Commercial mortgage loans and real estate securities financed through a repurchase agreement remain on the Company’s consolidated balance sheets as an asset and cash received from the purchaser is recorded as a liability. Interest paid in accordance with repurchase agreements is recorded in interest expense on the Company's consolidated statements of operations.
Deferred Financing Costs
The deferred financing costs related to the Company's various Master Repurchase Agreements as well as certain prepaid subscription costs are included in Prepaid expenses and other assets on the consolidated balance sheets. Deferred financing cost on the Company's collateralized debtloan obligations ("CLO") are netted against the Company's CLO payable in the Collateralized debtloan obligations on the consolidated balance sheets. Deferred financing costs are amortized over the terms of the respective financing agreement using the effective interest method and included in interest expense on the Company's consolidated statements of operations. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity.
Share Repurchase Program

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

The Company has a Share Repurchase Program (the "SRP"), which became effective as of February 28, 2016, that enables stockholders to sell their shares to the Company.
SubjectCompany, subject to certain conditions, stockholders that purchased shares of our common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions and have held their sharesconditions. Refer to Note 9 - Stock Transactions for a period of at least one year may request that we repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period.
On August 10, 2017, our board of directors amended the SRP to provide that the repurchase price per share for requests will be equal to the lesser of (i) our most recent estimated per-share NAV, as approved by our board of directors from time to time, and (ii) our book value per share, computed in accordance with GAAP, multiplied by a percentage equal to (i) 92.5%, if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95%, if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5%, if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100%, if the person seeking repurchase has held his or her shares for a period greater than four years or in the case of requests for death or disability.
Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5%description of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same fiscal semester through the issuance of common stock pursuant to any Dividend Reinvestment Plan ("DRIP") in effect from time to time, provided that the board of directors has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. However, a stockholder may withdraw its request at any time or ask that we honor the request when funds are available. Pending repurchase requests will be honored on a pro rata basis. We will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made.
SRP. When a stockholder requests a redemption and the redemption is approved by the board of directors, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Offering and Related Costs
TheSince 2018, the Company is currently offeringhas from time to time offered, and may in the future offer, shares of the Company’s common stock or one or more series of its preferred stock (“Preferred Stock”), including its Series A convertible preferred stock (“Series A Preferred Stock”) and Series C convertible preferred stock (the “Series C Preferred Stock,” and, together with the Series A Preferred stock, the “Preferred Stock”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended (the “Offering”).amended. In connection with the Offering,these offerings, the Company incurredincurs various offering costs and will continue to incur these costs until the Offering is complete.costs. These offering costs include but are not limited to legal, accounting, printing, mailing and filing fees, and diligence expenses of broker-dealers. Offering costs for the common stock are recorded in the Company’s stockholders’ equity, while the offering costs for the Preferred Stock are included within Redeemable convertible preferred stock Series A Preferred Stock and Redeemable convertible preferred stock seriesSeries C Preferred Stock, respectively, on the Company’s consolidated balance sheets.
Distribution Reinvestment Plan
Pursuant to the DRIP,Company's distribution reinvestment plan ("DRIP"), stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasingThe purchase price for shares pursuant topurchased through the DRIP haveis the same rightslesser of (i) the Company’s most recent estimated per share NAV, and are treated in(ii) the same manner as if such shares were issued pursuant to the Offering.Company’s GAAP book value per share. There is no market for our common stock. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the consolidated balance sheets in the period distributions are declared.
Share-Based Compensation
The Company has a share-based incentive plan for certain of the Company's directors, officers and employees of the Advisor and its affiliates. Share-based awards are measured at the grant date fair value and is recognized as compensation expense on a on a straight line basis over the related vesting period of the award. See Note 12 - Share-Based Compensation.

F-13

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Income Taxes
The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on income in addition to U.S. federal income and excise taxes on its undistributed income. The Company, through its TRS, is indirectly subject to U.S. federal, state and local income taxes. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but is instead taxed as a C corporation. For financial reporting purposes, the TRS is consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. Total income tax expenseprovision/(benefit) for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 and December 31, 2017 were $(2.1) million, $4.5 million and $0.1 million, and $0.2 million respectively.
The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return. The Company has assessed its tax positions for all open tax years beginning with December 31, 20162017 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes.
The Company utilizes the TRS to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests. Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.
Derivatives and Hedging Activities
In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives. The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The Company recognizes all derivatives on the consolidated balance sheets at fair value. The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized (gain)/loss on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately within Restricted cash on the Company’s consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date.
Per Share Data
The Company’s Preferred Stock is considered a participating security. As such,security and the Company is required to include the Preferred Stock in the calculation of basic earnings per share and calculatecalculates basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of the Company’s Preferred Stock, except when doing so would be anti-dilutive.
Reportable Segments
The Company has determined that it has four4 reportable segments based on how the chief operating decision maker reviews and manages the business. The four4 reporting segments are as follows:
The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.
The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.
The commercial Conduitconduit business in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market.
The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

F-14

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

See Note 16 - Segment Reporting for further information regarding the Company's segments.
Redeemable Convertible Preferred Stock
The Company’s outstanding Preferred Stock is classified outside of permanent equity in the consolidated balance sheets. Subject to certain conditions, the outstanding Preferred Stock is redeemable at the option of the holderholders of the Preferred Stock, outside of the control of the Company. As set forth in the Articles Supplementary relating to each of the Series A Preferred Stock and the Series C Preferred Stock (the(collectively, the “Articles Supplementary”) to the Company’s Articles of Amendment and Restatement, the Preferred Stock is redeemable for shares of the Company's common stock, $0.01 par value per share (the "Common Stock") at the option of the shareholderholder upon a change of control (as defined in the Articles Supplementary) or after the sixth anniversary of the date of issuance. A change in control of the Company occurs if any person acquires more than 50% of the total economic interests or voting power of all securities of the Company, other than in a liquidity event.
Shares of Preferred Stock rank senior to shares of Common Stock with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Dividends payable on each share of outstanding Preferred Stock will be equal to the greater of (i) an amount equal to $16.67 per share and (ii) the monthly dividend that would have been paid had such share of Preferred Stock been converted to a share of Common Stock, subject to proration in the event that such share of Preferred Stock was not outstanding for the full month.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Immediately prior to a “Liquidity Event,” each outstanding share of Series A Preferred Stock shall convert into 299.2 shares of Common Stock, subject to anti-dilution adjustments (the “Conversion Rate”). Each outstanding share of Series C Preferred Stock will convert into shares of Common Stock at the same Conversion Rate on the one-year anniversary of a Liquidity Event, subject to the Company’s right to accelerate the conversion to a date no earlier than six months after the Liquidity Event, upon at least ten days prior notice to the holders of the Series C Preferred Stock. A “Liquidity Event” is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchange for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system. If there has not been a Liquidity Event within six years from the initial issuance of the outstanding Preferred Stock, each holder of Preferred Stock shall have the right to convert all, but not less than all, of the Preferred Stock held by such holder into Common Stock at the Conversion Rate. Each holder also has the option to convert its shares of outstanding Preferred Stock into Common Stock upon a change in control (as defined in the respective Articles Supplementary for the Series A Preferred Stock and Series C Preferred Stock) of the Company. In addition, neither the Company nor a holder of shares of outstanding Preferred Stock may redeem shares of the Preferred Stock until six years from the initial issuance of the Preferred Stock, except in cases of a change in control (as defined in the respective Articles Supplementary).
Holders of the outstanding Preferred Stock are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of Common Stock are entitled to vote, upon which the holders of the Preferred Stock and holders of the Common Stock shall vote together as a single class. The number of votes applicable to a share of outstanding Preferred Stock will be equal to the number of shares of Common Stock a share of Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of Common Stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Preferred Stock is required to approve the issuance of any equity securities senior to the Preferred Stock and to take certain actions materially adverse to the holders of the Preferred Stock.
Recently Adopted Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-02 ("ASC 842"), Leases, which replaced Topic 840, Leases, and requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements ("ASU 2016-02"). ASC 842 was subsequently amended by ASU 2018-01, “Land Easement Practical Expedient for Transition to ASC 842” ("ASU 2018-01"); ASU 2018-10, Codification Improvements to ASC 842, Leases” ("ASU 2018-10"); and ASU 2018-11, “Targeted Improvements” ("ASU 2018-11"). The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The Company adopted ASC 842 on January 1, 2019.
Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard and subsequent amendments, known as the Current Expected Credit Loss (“CECL”) model, significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. CECL amends the existing credit loss model to reflect a reporting entity's current estimate of all expected credit losses, not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information.

F-15

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

For available-for-sale (“AFS”) debt securities, unrealized credit losses will be recognized as allowances rather than reductions in amortized cost basis and elimination of the OTTI concept will result in more frequent estimation of credit losses. ASU No. 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019, and will be adopted through a cumulative-effect adjustment to accumulated deficit as of January 1, 2020.
The CECL reserve required under ASU 2016-13 is a valuation account that is deducted from the amortized cost basis of the related loans and AFS debt securities on our consolidated balance sheets, which will reduce our stockholders’ equity. The initial CECL reserve recorded on January 1,On March 12, 2020, will be reflected as a direct charge against retained earnings; however, future net changes to the CECL reserve will be recognized in net income on our consolidated statement of operations. ASU 2016-13 does not require use of a particular method for determining the CECL reserve, but it does specify the allowance should be based on relevant information about past events, including historical loss experience, composition of the current loan and AFS debt securities portfolio, current conditions, and reasonable and supportable forecasts for the expected term of each loan. We expect that recognition of credit losses will generally be accelerated under the CECL model.
Additionally, but for a few narrow exceptions, ASU 2016-13 does not have a minimum threshold for recognition of impairment losses and requires that all financial instruments, including those for which there is a low risk of loss, incur some amount of valuation reserve to reflect the inherent risk of loss regardless of credit quality, amount of subordinate capital, or other risk mitigants.
As part of the implementation process, we have utilized loan loss forecasting models and have implemented policies, systems and controls necessary for the implementation and ongoing measurement of the CECL reserve. We elected to utilize a widely-used analytical model incorporating a loss-given-default methodology and loan performance data for commercial real estate loans dating back to 1998. Our loans may include commitments to fund incremental proceeds to our borrowers over the life of the loan, which are also subject to the CECL model. The CECL reserve related to future loan funding will be recorded as a component of Other Liabilities on our balance sheet and be estimated using the same process as for our outstanding loan balances. Changes in this component of the CECL reserve will similarly impact our consolidated net income.
Upon adoption of ASU 2016-13 on January 1, 2020, we expect to record a cumulative-effect adjustment to our accumulated deficit of $7.8 million, or $0.18 book value per share, which is 0.27% of the aggregate commitment amount of the Company’s loan portfolio at December 31, 2019. We do not expect the impact of CECL on our portfolio of AFS debt securities to be material.
In August 2018, the FASB issued ASU 2018-13, "Fair Value MeasurementNo. 2020-04, Reference Rate Reform (Topic 820), Disclosure Framework - Changes848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13").US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance provides amendments to the fair value measurement disclosure requirements of ASC 820. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU.and generally can be applied through December 31, 2022. The Company is currently evaluatinghas not adopted any of the impact of this new guidance. The Company does not expectoptional expedients or exceptions through December 31, 2020, but will continue to evaluate the possible adoption of ASU 2018-13 to have a material impact on its financial statements and related discourses.any such expedients or exceptions during the effective period as circumstances evolve.

F-16

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Note 3 - Commercial Mortgage Loans
The following table is a summary of the Company's commercial mortgage loans, held-for-investment,held for investment, carrying values by class (dollars in thousands):
December 31, 2020December 31, 2019
Senior loans$2,698,823 $2,721,325 
Mezzanine loans15,911 41,638 
Total gross carrying value of loans2,714,734 2,762,963 
Less: Allowance for credit losses (1)
20,886 921 
Total commercial mortgage loans, held for investment, net$2,693,848 $2,762,042 
________________________
 December 31, 2019 December 31, 2018
Senior loans$2,721,325
 $2,198,555
Mezzanine loans41,638
 13,111
Total gross carrying value of loans2,762,963
 2,211,666
Less: Allowance for loan losses (1)
921
 4,836
Total commercial mortgage loans, held-for-investment, net$2,762,042
 $2,206,830
________________________
(1)Includes $0.0 million and $4.1 million of loan loss provision specifically reserved on 1 loan in non-performing status asAs of December 31, 2020 and 2019, and December 31, 2018, respectively.
The following table presents the activitythere have been no specific reserves for loans in the Company's allowance for loan losses (dollars in thousands):
 Year Ended December 31,
 2019 2018
Beginning of period$4,836
 $1,466
Loan loss provision/(recovery)3,007
 3,370
Charge-offs(6,922) 
Ending allowance for loan losses$921
 $4,836
non-performing status.
As of December 31, 20192020 and December 31, 2018,2019, the Company's total commercial mortgage loan portfolio, excluding commercial mortgage loans accounted for under the fair value option, was comprised of 122130 and 100122 loans, respectively.
Allowance for Credit Losses
The following table presents the activity in the Company's allowance for credit losses, excluding the unfunded loan commitments, as of December 31, 2020 (dollars in thousands):
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Year Ended December 31, 2020
MultiFamilyRetailOfficeIndustrialMixed UseHospitalitySelf StorageManufactured HousingTotal
Beginning Balance$322 $202 $249 $23 $4 $103 $0 $18 $921 
Cumulative-effect adjustment upon adoption of ASU 2016-133,220 386 1,966 434 739 399 58 7,211 
Current Period:
Provision/(benefit) for credit losses(447)(184)(640)3,338 119 11,231 (282)46 13,181 
Write offs(427)(427)
Ending Balance$3,095 $404 $1,575 $3,795 $132 $11,646 $117 $122 $20,886 
The Company recorded an increase in its allowance for credit losses during the year ended December 31, 2020 of $13.2 million. This is primarily driven by the significant adverse change in the overall economic outlook due to the COVID-19 pandemic.
The following table presents the activity in the Company's allowance for credit losses, for the unfunded loan commitments, as of December 31, 2020 (dollars in thousands):
Year Ended December 31, 2020
MultiFamilyRetailOfficeIndustrialMixed UseHospitalitySelf StorageManufactured HousingTotal
Beginning Balance$0 $0 $0 $0 $0 $0 $0 $0 $0 
Cumulative-effect adjustment upon adoption of ASU 2016-13239 40 150 30 57 28 550 
Current Period:
Provision/(benefit) for credit losses(154)(40)(103)388 13 44 (28)(5)115 
Ending Balance$85 $0 $47 $418 $14 $101 $0 $0 $665 
The following table represents the composition by loan type of the Company's commercial mortgage loans portfolio, excluding commercial mortgage loans, held for investment (dollars in thousands).:
December 31, 2020December 31, 2019
Loan TypePar ValuePercentagePar ValuePercentage
Multifamily$1,202,694 44.2 %$1,491,971 53.9 %
Office517,464 19.0 %414,772 15.0 %
Hospitality403,908 14.8 %446,562 16.1 %
Industrial243,404 8.9 %118,743 4.3 %
Mixed Use102,756 3.8 %58,808 2.1 %
Self Storage86,424 3.2 %67,767 2.4 %
Retail78,550 2.9 %111,620 4.0 %
Manufactured Housing71,263 2.6 %44,656 1.6 %
Land16,400 0.6 %16,400 0.6 %
Total$2,722,863 100.0 %$2,771,299 100.0 %
F-19
  December 31, 2019 December 31, 2018
Loan Type Par Value Percentage Par Value Percentage
Multifamily $1,491,971
 53.9% $1,001,540
 45.2%
Office 414,772
 15.0% 357,819
 16.1%
Hospitality 446,562
 16.1% 347,080
 15.6%
Industrial 118,743
 4.3% 65,871
 3.0%
Retail 111,620
 4.0% 262,622
 11.8%
Mixed Use 58,808
 2.1% 120,647
 5.4%
Self Storage 67,767
 2.4% 49,957
 2.2%
Land 16,400
 0.6% 16,400
 0.7%
Manufactured Housing 44,656
 1.6% 
 %
Total $2,771,299
 100% $2,221,936
 100%

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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

As of December 31, 20192020 and December 31, 2018,2019, the Company's total commercial mortgage loans, held-for-sale, measured at fair value was comprised of 73 and 7 loans, respectively. As of December 31, 20192020 and December 31, 2018,2019, the contractual principal outstanding of commercial mortgage loans, held-for-sale, measured at fair value was $112.5$67.6 million and $77.1$112.5 million, respectively. As of December 31, 20192020 and December 31, 2018,2019, none of the Company's commercial mortgage loans, held-for-sale, measured at fair value were in default or greater than 90 days past due.
The following table represents the composition by loan type of the Company's commercial mortgage loans, held-for-sale, measured at fair value (dollars in thousands):
December 31, 2020December 31, 2019
Loan TypePar ValuePercentagePar ValuePercentage
Industrial$67,550 99.9 %$23,625 21.0 %
Multifamily100 0.1 %78,250 69.6 %
Retail%2,613 2.3 %
Hospitality%8,000 7.1 %
Total$67,650 100.0 %$112,488 100.0 %
Loan Credit Quality and Vintage
The following tables present the amortized cost of our commercial mortgage loans, held for investment as of December 31, 2020, by loan type, the Company’s internal risk rating and year of origination. The risk ratings are updated as of December 31, 2020.
202020192018201720162015PriorTotal
Multifamily:
Risk Rating:
1-2 internal grade$583,550 $349,588 $188,975 $$$$3,488 $1,125,601 
3-4 internal grade35,887 37,812 73,699 
Total Multifamily Loans$583,550 $349,588 $224,862 $37,812 $0 $0 $3,488 $1,199,300 
Retail:
Risk Rating:
1-2 internal grade$13,277 $22,760 $16,400 $$$$$52,437 
3-4 internal grade12,872 29,425 42,297 
Total Retail Loans$13,277 $35,632 $45,825 $0 $0 $0 $0 $94,734 
Office:
Risk Rating:
1-2 internal grade$244,301 $160,709 $61,169 $40,846 $$$$507,025 
3-4 internal grade8,392 8,392 
Total Office Loans$244,301 $160,709 $61,169 $49,238 $0 $0 $0 $515,417 
Industrial:
Risk Rating:
1-2 internal grade$119,193 $89,590 $$$$33,655 $$242,438 
3-4 internal grade
Total Industrial Loans$119,193 $89,590 $0 $0 $0 $33,655 $0 $242,438 
Mixed Use:
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
  December 31, 2019 December 31, 2018
Loan Type Par Value Percentage Par Value Percentage
Multifamily $78,250
 69.6% $34,000
 44.1%
Industrial 23,625
 21.0% 
 %
Hospitality 8,000
 7.1% 27,800
 36.1%
Retail 2,613
 2.3% 
 %
Office 
 % 15,300
 19.8%
Total $112,488
 100.0% $77,100
 100.0%
Risk Rating:
1-2 internal grade$30,246 $$59,451 $12,839 $$$$102,536 
3-4 internal grade
Total Mixed Use Loans$30,246 $0 $59,451 $12,839 $0 $0 $0 $102,536 
Hospitality:
Risk Rating:
1-2 internal grade$26,878 $10,547 $$$$$$37,425 
3-4 internal grade160,079 115,026 90,612 365,717 
Total Hospitality Loans$26,878 $170,626 $115,026 $90,612 $0 $0 $0 $403,142 
Self Storage:
Risk Rating:
1-2 internal grade$41,305 $$44,908 $$$$$86,213 
3-4 internal grade
Total Self Storage Loans$41,305 $0 $44,908 $0 $0 $0 $0 $86,213 
Manufactured Housing:
Risk Rating:
1-2 internal grade$25,905 $45,049 $$$$$$70,954 
3-4 internal grade
Total Manufactured Housing Loans$25,905 $45,049 $0 $0 $0 $0 $0 $70,954 
Total$1,084,655 $851,194 $551,241 $190,501 $0 $33,655 $3,488 $2,714,734 
Past Due Status
The following table presents an aging summary of the loans amortized cost basis at December 31, 2020 (dollars in thousands):
MultifamilyRetailOfficeIndustrialMixed UseHospitalitySelf StorageManufactured HousingTotal
Status:
Current$1,161,488 $94,734 $515,417 $242,438 $102,536 $346,067 $86,213 $70,954 $2,619,847 
1-29 days past due
30-59 days past due (1)
37,812 37,812 
60-89 days past due
90-119 days past due
120+ days past due (1)
57,075 57,075 
Total$1,199,300 $94,734 $515,417 $242,438 $102,536 $403,142 $86,213 $70,954 $2,714,734 
________________________
(1) For the year ended December 31, 2020, interest income recognized on these two loans was $1.9 million.
As of December 31, 2020, the Company had 2 loans on non-accrual status with a total cost basis of $94.9 million for which there was no related allowance for credit losses. As of December 31, 2019, the Company had 1 loan on non-accrual status with a cost basis of $57.1 million.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Credit Characteristics
As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held-for-sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 as follows:
Investment RatingSummary Description
1Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5Underperforming investment with expected loss of interest and some principal.
All commercial mortgage loans, excluding loans classified as commercial mortgage loans, held-for-sale, measured at fair value within the consolidated balance sheets, are assigned an initial risk rating of 2.0. As of December 31, 20192020 and December 31, 2018,2019, the weighted average risk ratings of loans were 2.12.2 and 2.1, respectively.
The following table represents the allocation by risk rating for the Company's commercial mortgage loans, excluding loans classified as commercial mortgage loans, held-for-sale,held for investment, measured at fair value:
December 31, 2020December 31, 2019
Risk Rating  Number of LoansPar ValueRisk RatingNumber of LoansPar Value
1  $1
2  104 2,232,045 2113 2,452,330 
3  22 384,040 3298,994 
4  106,778 419,975 
5  5
  130 $2,722,863 122 $2,771,299 
December 31, 2019 December 31, 2018
Risk Rating  Number of Loans  Par Value Risk Rating  Number of Loans  Par Value
1  
  $
 1  2
  23,250
2  113
  2,452,330
 2  87
  1,965,186
3  8
  298,994
 3  9
  202,400
4  1
  19,975
 4  1
  14,300
5  
  
 5  1
  16,800
   122
  $2,771,299
   100
  $2,221,936
As ofFor the years ended December 31, 2020 and December 31, 2019, the Company had 1 loan on non-accrual status with an unpaid principal balance of $57.1 million that had interest past dueactivity in the Company's commercial mortgage loans, held for greater than 90 days.
As of December 31, 2018, the Company had 1 loan on non-accrual status with an unpaid principal balance of $14.3 million that had interest past due for greater than 90 days.

investment portfolio was as follows (dollars in thousands):
Year Ended December 31,
20202019
Balance at Beginning of Year$2,762,042 $2,206,830 
Cumulative-effect adjustment upon adoption of ASU 2016-13(7,211)— 
Acquisitions and originations1,287,720 1,326,983 
Principal repayments(1,223,490)(771,774)
Discount accretion/premium amortization6,146 6,264 
Loans transferred from/(to) commercial real estate loans, held-for-sale(76,979)10,100 
Net fees capitalized into carrying value of loans(6,562)(5,339)
Provision/(benefit) for credit losses(13,181)(3,007)
Charge-off from allowance427 6,922 
Transfer to real estate owned(35,064)
Transfer on deed in lieu of foreclosure to real estate owned(14,937)
Balance at End of Year$2,693,848 $2,762,042 
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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

ForDuring the year ended December 31, 2019 and December 31, 2018, the activity in the Company's commercial mortgage loans, held-for-investment portfolio was as follows (dollars in thousands):
 Year Ended December 31,
 2019 2018
Balance at Beginning of Year$2,206,830
 $1,402,046
Acquisitions and originations1,326,983
 1,608,512
Principal repayments(771,774) (778,520)
Discount accretion/premium amortization6,264
 4,648
Loans transferred from/(to) commercial real estate loans, held-for-sale10,100
 (16,750)
Net fees capitalized into carrying value of loans(5,339) (9,736)
Loan Loss recovery/(provision)(3,007) (3,370)
Charge-off from allowance6,922
 
Transfer on deed in lieu of foreclosure to real estate owned(14,937) 
Balance at End of Period$2,762,042
 $2,206,830
As of December 31, 2019,2020, the Company wrote off a commercial mortgage loan, held for investment, with a carrying value $14.9of $14.4 million in exchange for the possession of a REO investment at a fair value of $8.1$14.0 million at the time of the transfer. The $8.1This $14.0 million REO investment iswas comprised of $8.1$11.6 million of real property (building(land, building and improvements) and $0.0$2.4 million of personal property (furniture, fixture, and equipment). The transfer occurred when the Company took possession of the property by completing a deed-in-lieu of foreclosure transaction which resultedin March 2020, resulting in a charge-off of $6.4$0.4 million that was taken through the loanimpairment loss provision in prior periods as well as $0.5 million of additional loan loss provision at the time of transfer. Since the foreclosure was entered into due to the borrower experiencing financial difficulty and the recorded investment in the receivable was more than the fair value for the collateral collected, the transaction qualifies as a TDR. The Company accounted for thesold this REO acquiredasset during the periodyear ended December 31, 2019 as an2020 for a $1.4 million gain, presented net of direct selling costs associated with the disposition of the asset, acquisition.included within Realized gain/loss on sale of real estate owned assets, held-for-sale in the Company's consolidated statements of operations. The results of operations of the REO and the gain on sale have been included in the Company’s consolidated statements of operations sincefor the acquisition date.year ended December 31, 2020.


During the year ended December 31, 2020, the Company reached an agreement with a borrower to take possession of certain real estate collateral. At the time of transfer, the carrying value of the commercial mortgage loan, held for investment was $21.1 million, which was exchanged for possession of the REO asset at a purchase price of $21.4 million. This $21.4 million REO investment was comprised of $18.9 million of real property (land, building and improvements) and $2.5 million of personal property (furniture, fixture, and equipment). The Company accounted for the REO acquired during the year ended December 31, 2020 as an asset acquisition. No gain or loss was recognized at the time of transfer. The Company sold this REO asset during the year ended December 31, 2020 for a $0.4 million gain, included within Realized gain/loss on sale of real estate owned assets, held-for-sale in the Company's consolidated statements of operations.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 4 - Real Estate Securities
The following is a summary of the Company's real estate securities, CMBS (dollars in thousands):
December 31, 2020December 31, 2020
TypeTypeInterest RateMaturityPar ValueFair Value
CMBS 1CMBS 13.0%5/15/2022$13,250$12,657
CMBS 2CMBS 22.2%6/26/202510,80010,335
CMBS 3CMBS 32.5%2/15/203640,00038,292
CMBS 4CMBS 41.9%6/15/20378,0007,892
CMBS 5CMBS 52.1%9/15/203724,00023,297
CMBS 6CMBS 62.3%6/15/203412,00011,580
CMBS 7CMBS 71.5%12/15/203620,00018,975
CMBS 8CMBS 81.8%12/15/203625,00023,268
CMBS 9CMBS 92.3%3/15/203525,66524,840
December 31, 2019December 31, 2019December 31, 2019
Type Interest Rate Maturity Par Value Fair ValueTypeInterest RateMaturityPar ValueFair Value
CMBS 1 4.7% 5/15/2028 $13,250 $13,274CMBS 14.7%5/15/2022$13,250$13,274
CMBS 2 3.8% 6/15/2032 12,131 12,151CMBS 23.8%6/26/202512,13112,151
CMBS 3 4.1% 2/15/2036 40,000 40,186CMBS 34.1%2/15/203640,00040,186
CMBS 4 3.7% 5/15/2036 18,500 18,535CMBS 43.7%5/15/203618,50018,535
CMBS 5 3.1% 4/15/2034 15,000 15,019CMBS 53.1%5/15/203615,00015,019
CMBS 6 3.2% 5/15/2037 13,500 13,525CMBS 63.2%5/15/203713,50013,525
CMBS 7 3.4% 5/15/2037 15,000 15,028CMBS 73.4%5/15/203715,00015,028
CMBS 8 3.2% 6/15/2037 7,000 7,013CMBS 83.2%6/15/20377,0007,013
CMBS 9 3.6% 2/15/2036 9,600 9,641CMBS 93.6%2/15/20369,6009,641
CMBS 10 3.5% 8/15/2036 10,000 10,027CMBS 103.5%8/15/203610,00010,027
CMBS 11 3.6% 6/15/2037 8,000 8,015CMBS 113.6%6/15/20378,0008,015
CMBS 12 3.3% 7/15/2038 13,000 13,022CMBS 123.3%7/15/203813,00013,022
CMBS 13 3.3% 9/15/2037 32,000 32,074CMBS 133.3%9/15/203732,00032,074
CMBS 14 3.7% 9/15/2037 24,000 24,084CMBS 143.7%9/15/203724,00024,084
CMBS 15 3.3% 10/19/2038 50,000 50,094CMBS 153.3%10/19/203850,00050,094
CMBS 16 3.7% 10/19/2038 26,000 26,029CMBS 163.7%10/19/203826,00026,029
CMBS 17 3.2% 6/15/2034 15,000 15,022CMBS 173.2%6/15/203415,00015,022
CMBS 18 3.5% 6/15/2034 6,500 6,509CMBS 183.5%6/15/20346,5006,509
CMBS 19 3.9% 6/15/2034 12,000 12,022CMBS 193.9%6/15/203412,00012,022
CMBS 20 3.1% 12/15/2029 20,000 20,021CMBS 203.1%12/15/203620,00020,021
CMBS 21 3.4% 12/15/2029 25,000 25,025CMBS 213.4%12/15/203625,00025,025
 
December 31, 2018
Type Interest Rate Maturity Par Value Fair Value
CMBS 1 5.4% 5/15/2022 $13,250 $13,164
CMBS 2 4.6% 6/26/2025 13,500 13,248
The Company classified its CMBS investments as available-for-saleavailable for sale as of December 31, 20192020 and December 31, 2018.2019. These investments are reported at fair value in the consolidated balance sheets with changes in fair value recorded in accumulated other comprehensive income income/(loss). The weighted average contractual maturity for CLO investments included within the CMBS portfolio as of December 31, 2020 and December 31, 2019 was 14 and 17 years. The weighted average contractual maturity for single asset single borrower "SASB" investments as of December 31, 2020 and December 31, 2019 was 14 and 5 years.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The following table shows the amortized cost, allowance for expected credit losses, unrealized gain/(loss) and fair value of the Company's CMBS investments by investment type (dollars in thousands):
Amortized CostCredit Loss AllowanceUnrealized GainUnrealized LossFair Value
 Amortized Cost Unrealized Gain Unrealized Loss Fair Value
December 31, 2020December 31, 2020
CLOCLO$123,444 $$$(4,888)$118,556 
SASBSASB55,948 (3,368)52,580 
TotalTotal$179,392 $0 $0 $(8,256)$171,136 
December 31, 2019 $387,294
 $1
 $(979) $386,316
December 31, 2019
December 31, 2018 $26,871
 $
 (459) $26,412
CLOCLO$330,000 $$(881)$329,120 
SASBSASB57,294 (98)57,196 
TotalTotal$387,294 $0 $1 $(979)$386,316 

As of December 31, 2020 the Company held 9 CMBS positions with an amortized cost basis of $179.4 million and an unrealized loss of $8.3 million, of which 7 positions had an unrealized loss for a period greater than twelve months. As of December 31, 2019, the Company held 21 CMBS positions with an aggregate carrying valueamortized cost basis of $387.3 million and an unrealized loss of $1.0 million of which 2 positions had an unrealized loss for a period greater than twelve months.
The following table provides information on the unrealized losses and fair value on the Company's real estate securities, CMBS, available for sale that were in an unrealized loss position, and for which an allowance for credit losses has not been recorded as of December 31, 2020 and December 31, 2019 (amounts in thousands):
Fair ValueUnrealized Loss
Securities with an unrealized loss less than 12 monthsSecurities with an unrealized loss greater than 12 monthsSecurities with an unrealized loss less than 12 monthsSecurities with an unrealized loss greater than 12 months
December 31, 2020
CLOs$63,131 $55,425 $(2,824)$(2,064)
SASB52,580 (3,368)
Total$63,131 $108,005 $(2,824)$(5,432)
December 31, 2019
CLOs$315,845 $13,275 $(863)$(17)
SASB45,045 12,151 (67)(31)
Total$360,890 $25,426 $(930)$(48)
As of December 31, 2018, the Company held2020 and December 31, 2019, there were 7 securities and 2 CMBS positionssecurities, respectively with an aggregate carrying value of $26.9 million and an unrealized loss of $0.5 million of which no positions had an unrealized losslosses for a period greater than twelve months.

months reflected in the table above. After evaluating the securities, the Company concluded that the unrealized losses reflected above were noncredit-related and would be recovered from the securities’ estimated future cash flows. The Company considered a number of factors in reaching this conclusion, including that the Company did not intend to sell the securities, it was not considered more likely than not that we would be forced to sell the securities prior to recovering our amortized cost, the portfolio is made up of investment grade securities of recent originations and higher tranches, and that there were no material credit events that would have caused us to otherwise conclude that the Company would not recover our cost. The allowance for credit losses is calculated using a discounted cash flow approach and is measured as the difference between the original cash flows expected to be collected to the revised cash flows expected to be collected discounted using the effective interest rate, limited by the amount that the fair value is less than the amortized cost basis. Significant judgment is used in projecting cash flows. As a result, actual income and/or credit losses could be materially different from what is currently projected and/or reported.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

The following table provides information on the amounts of gain/(loss) on the Company's real estate securities, CMBS, available-for-saleavailable for sale (dollars in thousands):
  Year Ended December 31,
  2019 2018 2017
Unrealized gain/(loss) available-for-sale securities $(978) $(459) $19
Reclassification of net (gain)/loss on available-for-sale securities included in net income (loss) 
 
 481
Unrealized gain/(loss) available-for-sale securities, net of reclassification adjustment $(978) $(459) $500
Year Ended December 31,
202020192018
Unrealized gain/(loss) available for sale securities$(8,026)$(978)$(459)
Reclassification of net (gain)/loss on available for sale securities included in net income (loss)748 
Unrealized gain/(loss) available for sale securities, net of reclassification adjustment$(7,278)$(978)$(459)
The amounts reclassified for net (gain)/loss on available-for-saleavailable for sale securities are included in the realized (gain)/loss on sale of real estate securities in the Company's consolidated statements of operations. The Company's unrealized gain/(loss) on available-for-saleavailable for sale securities is net of tax. Due to the Company's designation as a REIT, there was no tax impact on unrealized gain/(loss) on available-for-saleavailable for sale securities.

F-21

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
real estate securities for both collateralized loan obligations and other securities as of December 31, 2019
2020 can be attributed mainly to the market down-turn and volatility as a result of high unemployment and credit uncertainties related to the outbreak of COVID-19. Management currently does not have the intention to sell any of the real estate securities as of December 31, 2020.




Note 5 - Real Estate Owned

The following table summarizes the Company's real estate asset acquisitions for the twelve months endedowned assets as of December 31, 20192020 (dollars in thousands):
As of December 31, 2019        
Acquisition Date Property Type Primary Location(s) Land Building and Improvements Furniture, Fixtures and Equipment Accumulated Depreciation Real Estate Owned, net
August 2019 (1)(2)
 Hotel Chicago, IL $
 $8,110
 $
 $(86) $8,024
October 2019 (1)
 Office Jeffersonville, IN 1,887
 25,554
 
 (133) 27,309
      $1,887
 $33,664
 $
 $(219) $35,333
As of December 31, 2020
Acquisition DateProperty TypePrimary Location(s)LandBuilding and ImprovementsFurniture, Fixtures and EquipmentAccumulated DepreciationReal Estate Owned, net
October 2019 (1)
OfficeJeffersonville, IN$1,887 $21,989 $3,565 $(931)$26,510 
$1,887 $21,989 $3,565 $(931)$26,510 
________________________
(1)Refer to Note 2 for the useful life of the above assetsassets.
The following table summarizes the Company's real estate owned assets as of December 31, 2019 (dollars in thousands):
As of December 31, 2019
Acquisition DateProperty TypePrimary Location(s)LandBuilding and ImprovementsFurniture, Fixtures and EquipmentAccumulated DepreciationReal Estate Owned, net
August 2019 (1)(2)
HotelChicago, IL$$8,110 $$(86)$8,024 
October 2019 (1)
OfficeJeffersonville, IN1,887 25,554 (133)$27,309 
$1,887 $33,664 $0 $(219)$35,333 
________________________
(1) Refer to Note 2 for the useful life of the above assets.
(2)Represents assets acquired by the Company by completing a deed-in-lieu of foreclosure transactiontransaction.
Depreciation expense for the twelve monthsyears ended December 31, 2020 and 2019 totaled $1.0 million and $0.2 million.million, respectively.



During the year ended December 31, 2020, the Company entered into a deed in lieu of foreclosure agreement which resulted in the transfer of the REO asset located in Chicago, Illinois to a third party and thereby extinguished $11.0 million of debt that was acquired by the Company in 2020. The cost basis of the REO asset at the time of transfer was $16.3 million and liabilities assumed by the third party, including the extinguishment of debt, were $19.5 million, resulting in a realized gain of $3.2 million recognized in the consolidated statements of operations for the year ended December 31, 2020. In addition, during the first quarter of 2020, the Company recorded $0.4 million of Impairment losses on real estate owned assets in the consolidated statement of operations as indicators of impairment were noted through the Company's test for recoverability and review of the valuation estimates and operating results.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 6 - Leases
Operating Right of Use Asset
The Company had no operating right of use assets as of December 31, 2020 (see Note 5 - Real Estate Owned).
The following table summarizes the Company's operating right of use asset recognized in the consolidated balance sheet for the twelve months endedsheets as of December 31, 2019 (dollars in thousands):
Acquisition Date Property Type Primary Location(s) Operating Right of Use Asset Gross Accumulated Amortization Operating Right of Use Asset, net of AmortizationAcquisition DateProperty TypePrimary Location(s)Operating Right of Use Asset GrossAccumulated AmortizationOperating Right of Use Asset, Net of Amortization
August 2019 Hotel Chicago, IL $6,109
 $(130) $5,979
August 2019HotelChicago, IL$6,109 $(130)$5,979 
 $6,109
 $(130) $5,979
$6,109 $(130)$5,979 
Operating Lease Liabilities
The Company had no operating lease liabilities as of December 31, 2020 (see Note 5 - Real Estate Owned).
On August 19, 2019, in conjunction with thea deed-in-lieu of foreclosure transaction, (see Note 3), the Company assumed a non-cancelable ground lease for the land on which the property is located and classified the lease as an operating lease. The ground lease requiresrequired monthly rental payments with annual increases of 3%. The initial term of the lease expiresexpired in 2067, and can be renewed forwhich included a sixty-year period.sixty-year period renewal. Rent expense for this operating lease for the twelve monthsyears ended December 31, 2020 and 2019 totaled $0.7 million and $0.3 million.
The following table summarizes the Company's schedule of minimum future lease payments (dollars in thousands):
Minimum Future Lease Payments December 31, 2019
2020 $398
2021 410
2022 422
2023 435
2024 448
2025 and beyond 39,438
Total undiscounted lease payments $41,551
Less: Amount representing interest (35,415)
Present value of lease liability $6,136
million, respectively.
The discount rate used to calculate the lease liability iswas 9% and the remaining lease term iswas 47.95 years.years as of December 31, 2019.
Intangible Lease Asset
The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheet forsheets as of December 31, 2020 (dollars in thousands):
Acquisition DateProperty TypePrimary Location(s)Intangible Lease Asset, GrossAccumulated AmortizationIntangible Lease Asset, Net of Amortization
October 2019OfficeJeffersonville, IN$14,509 $(963)$13,546 
$14,509 $(963)$13,546 
The following table summarizes the twelve months endedCompany's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2019 (dollars in thousands):
Acquisition Date Property Type Primary Location(s) Intangible Lease Asset Gross Accumulated Amortization Intangible Lease Asset, net of AmortizationAcquisition DateProperty TypePrimary Location(s)Intangible Lease Asset, GrossAccumulated AmortizationIntangible Lease Asset, Net of Amortization
October 2019 Office Jeffersonville, IN $14,509
 $(131) $14,377
October 2019OfficeJeffersonville, IN$14,509 $(131)$14,377 
 $14,509
 $(131) $14,377
$14,509 $(131)$14,377 
Rental Income
On October 15, 2019, the Company purchased an office building that was subject to an existing triple net lease. The minimum rental amount due under the lease is subject to annual increases of 1.5%. The initial term of the lease expires in 20362037 and contains renewal options for four consecutive five-year terms. The remaining lease term is 17.316.3 years. Rental income for this operating lease for the twelve monthsyears ended December 31, 2020 and 2019 totaled $2.9 million and $0.6 million.

million, respectively and is included in Revenue from real estate owned in the consolidated statements of operations.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

The following table summarizes the Company's schedule of future minimum rents to be received under the lease (dollars in thousands):
Minimum RentsDecember 31, 2020
2021$2,568 
20222,607 
20232,646 
20242,686 
20252,726 
2026 and beyond34,168 
Total minimum rent$47,401 
Minimum Rent December 31, 2019
2020 $2,530
2021 2,568
2022 2,607
2023 2,646
2024 2,686
2025 and beyond 36,895
Total minimum rent $49,932
AmortizationExpense
Intangible lease assets are amortized using the straight-line method over the contractual life of the lease, of a period up to 20 years. The weighted average life of intangible assets as of December 31, 20192020 is approximately 17.316.3 years. Amortization expense for the twelve monthsyears ended December 31, 2020 and 2019 totaled $0.8 million and $0.2 million.million, respectively.
The following table summarizes the Company's expected amortization for intangible assets over the next five years, assuming no further acquisitions or dispositions (dollars in thousands):
Amortization ExpenseDecember 31, 2020
2021$(825)
2022(825)
2023(825)
2024(825)
2025(825)
Amortization Expense December 31, 2019
2020 $(825)
2021 (825)
2022 (825)
2023 (825)
2024 (825)
Note 7 - Debt
Repurchase Agreements - Commercial Mortgage Loans
The Company has entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), Barclays Bank PLC (the "Barclays Revolver Facility" and the "Barclays Repo Facility"), Wells Fargo Bank, National Association (the "WF Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" and together with JPM Repo Facility, USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").
The Repo Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate of between 65% to 80% of the principal amount of the mortgage loan being pledged.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The details of the Company's Repo Facilities at December 31, 20192020 and December 31, 20182019 are as follows (dollars in thousands):
As of December 31, 2019      
 
Repurchase FacilityCommitted Financing Amount Outstanding 
Interest Expense(1)
 Ending Weighted Average Interest Rate Initial Term Maturity
JPM Repo Facility (2)
$300,000
 $107,526
 $6,862
 4.51% 1/30/2021
USB Repo Facility (3)
100,000
 
 622
 N/A
 6/15/2020
CS Repo Facility (4)
300,000
 87,375
 5,563
 4.84% 3/27/2020
WF Repo Facility (5)
175,000
 24,942
 1,333
 3.65% 11/21/2020
Barclays Revolver Facility (6)
100,000
 
 976
 N/A
 9/20/2021
Barclays Repo Facility (7)
300,000
 32,700
 1,260
 3.80% 3/15/2022
Total$1,275,000
 $252,543
 $16,616
    
As of December 31, 2020
Repurchase FacilityCommitted FinancingAmount Outstanding
Interest Expense(1)
Ending Weighted Average Interest RateInitial Term Maturity
JPM Repo Facility (2)
$300,000 $113,884 $5,020 2.54 %10/6/2022
USB Repo Facility (3)
100,000 5,775 599 2.40 %6/15/2021
CS Repo Facility (4)
200,000 106,971 3,539 2.84 %8/19/2021
WF Repo Facility (5)
175,000 27,150 1,041 2.50 %11/21/2021
Barclays Revolver Facility (6)
100,000 387 N/A9/20/2021
Barclays Repo Facility (7)
300,000 22,560 1,046 2.51 %3/15/2022
Total$1,175,000 $276,340 $11,632 
________________________

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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) For the year ended December 31, 2019
2020. Includes amortization of deferred financing costs.

(2) On October 6, 2020 the maturity date was amended to October 6, 2022.
(3) On June 9, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 15, 2021.
(4) On August 28, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to August 19, 2021. Additionally, in 2020 the committed financing amount was downsized from $300 million to $200 million.
(5) On November 17, 2020, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to November 21, 2021. There are two more one-year extension options available at the Company's discretion.
(6) There is 1 one-year extension option available at the Company's discretion.
(7) Includes 2 one-year extensions at the Company's option.
As of December 31, 2019
Repurchase FacilityCommitted FinancingAmount Outstanding
Interest Expense(1)
Ending Weighted Average Interest RateInitial Term Maturity
JPM Repo Facility (2)
$300,000 $107,526 $6,862 4.51 %1/30/2021
USB Repo Facility (3)
100,000 622 N/A6/15/2020
CS Repo Facility (4)
300,000 87,375 5,563 4.84 %3/27/2020
WF Repo Facility (5)
175,000 24,942 1,333 3.65 %11/21/2020
Barclays Revolver Facility (6)
100,000 976 N/A9/20/2021
Barclays Facility (7)
300,000 32,700 1,260 3.80 %3/15/2022
Total$1,275,000 $252,543 $16,616 
________________________
(1) For the year ended December 31, 2019. Includes amortization of deferred financing costs.
(2) On September 3, 2019, the committed financing amount was downsized from $520 million to $300 million and the maturity date was amended to January 30, 2021.
(3) Includes two one-year2 one-year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions.
(4) On March 26, 2019, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to March 27, 2020.
(5) Includes three one-year3 one-year extensions at the Company’s option, which may be exercised upon the satisfaction of certain conditions.
(6) On September 13, 2019, the Company exercised the extension option, and extended the term maturity to September 20, 2021. There is one1 more one-yearone-year extension option available at the Company's discretion.
(7) Includes two one-year2 one-year extensions at the Company's option.
F-29

As of December 31, 2018          
Repurchase Facility Committed Financing Amount Outstanding 
Interest Expense(1)
 Ending Weighted Average Interest Rate Initial Term Maturity
JPM Repo Facility (2)
 $520,000
 $72,906
 $7,838
 4.55% 1/30/2020
GS Repo Facility (3)
 
 
 470
 N/A
 12/27/2018
USB Repo Facility (4)
 100,000
 
 594
 4.71% 6/15/2020
CS Repo Facility (5)
 300,000
 76,534
 6,594
 4.69% 6/19/2019
WF Repo Facility (6)
 175,000
 
 86
 4.71% 11/21/2020
Barclays Facility (7)
 100,000
 
 1,445
 6.24% 9/19/2019
Total $1,195,000
 $149,440
 $17,027
    
Table of Contents
________________________BENEFIT STREET PARTNERS REALTY TRUST, INC.
(1) For the year ended NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018. Includes amortization of deferred financing costs.2020
(2) On January 30, 2018 the committed financing amount was upsized from $300 million to $520 million and the maturity date was amended to January 30, 2020. Includes a one-year extension at the Company's option.
(3) Matured on December 27, 2018. Committed balance was $250 million prior to maturity.
(4) Includes two one-year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions.
(5) On July 19, 2018, the committed financing amount was upsized from $250 million to $300 million. On June 20, 2018, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 19, 2019.
(6) Includes three one-year extensions at the Company’s option, which may be exercised upon the satisfaction of certain conditions.
(7) On July 30, 2018, the committed financing amount was upsized from $75 million to $100 million. Includes a one-year extension at the Company's option.
The Company expects to use the advances from the Repo Facilities to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein.
The Repo Facilities generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. As of December 31, 20192020 and December 31, 2018,2019, the Company is in compliance with all debt covenants.
Other financing and loan participation - Commercial Mortgage Loans
On December 11, 2018,March 23, 2020, the Company transferred $10.0$15.2 million of its interest in a term loan to CitySterling National Bank ("City National Financing"SNB") via a participation agreement. AsDuring 2020, the Company's outstanding loan increased resultant of December 31, 2019,future fundings, leading to an increase in amount outstanding via the City National Financing accrued interest at an annual rate of 4.6%participation agreement. The Company incurred $0.2$0.5 million of interest expense on the City National FinancingSNB for the year ended December 31, 2019. On April 10, 2019,2020. As of December 31, 2020 the Company terminated theoutstanding participation agreement with City National Bank and paid off the $10.0 million under the participation agreement.balance was $31.4 million. The loan matures on February 9, 2023.
Mortgage Note Payable
On October 15, 2019, the Company obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of December 31, 20192020 the loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred $1.1 million of interest expense for the twelve months ended December 31, 2020. Additionally, on January 6, 2020, the Company obtained a commercial mortgage loan for $11.0 million related to the real estate owned portfolio. As of December 31, 2020 the loan and related real estate owned asset was no longer held by the Company (see Note 5 - Real Estate Owned). The Company incurred $0.8 million of interest expense for the twelve months ended December 31, 2020.
Unsecured Debt
Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.2 million of interest expense on the lending agreement with SBL for the yeartwelve months ended December 31, 2019.

F-25

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

2020, there was no outstanding balance under the lending agreement.
Repurchase Agreements - Real Estate Securities
The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30-90 days and terms are adjusted for current market rates as necessary.
F-30

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Below is a summary of the Company's MRAs as of December 31, 20192020 and 20182019 (dollars in thousands):
As of December 31, 2019      Weighted Average
CounterpartyAmount Outstanding Accrued Interest 
Collateral Pledged (1)
 Interest Rate Days to Maturity
JP Morgan Securities LLC83,353
 124
 93,500
 2.53% 20
Wells Fargo Securities, LLC178,304
 1,199
 209,873
 2.94% 11
Barclays Capital Inc.40,720
 221
 47,475
 2.81% 23
Citigroup Global Markets, Inc.91,982
 413
 103,453
 2.69% 19
    Total/Weighted Average394,359
 1,957
 454,301
 2.79% 16
          
As of December 31,2018      Weighted Average
CounterpartyAmount Outstanding Accrued Interest 
Collateral Pledged (1)
 Interest Rate Days to Maturity
JP Morgan Securities LLC21,961
 27
 26,750
 3.67% 18
Wells Fargo Securities, LLC22,578
 47
 28,223
 3.93% 11
    Total/Weighted Average44,539
 74
 54,973
 3.80% 15
Weighted Average
CounterpartyAmount OutstandingAccrued Interest
Collateral Pledged (1)
Interest RateDays to Maturity
As of December 31, 2020
JP Morgan Securities LLC$33,791 $1,668 $43,612 1.75 %31
Wells Fargo Securities, LLC1,057 N/A N/A
Goldman Sachs International22,440 455 30,794 1.68 %16
Barclays Capital Inc.76,809 2,102 97,244 1.71 %33
Credit Suisse AG905 N/A N/A
Citigroup Global Markets, Inc.53,788 2,532 71,723 1.70 %29
Total/Weighted Average$186,828 $8,719 $243,373 1.71 %33
As of December 31, 2019
JP Morgan Securities LLC$83,353 $124 $93,500 2.53 %20
Wells Fargo Securities, LLC178,304 1,199 209,873 2.94 %11
Barclays Capital Inc.40,720 221 47,475 2.81 %23
Citigroup Global Markets, Inc.91,982 413 103,453 2.69 %19
Total/Weighted Average$394,359 $1,957 $454,301 2.79 %16
________________________
(1) Includes $68.5$72.2 million and $28.2$68.5 million of CLO notes, held by the Company, which is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of as of December 31, 20192020 and December 31, 2018,2019, respectively.
Collateralized Loan Obligation
On AprilJanuary 15, 2019,2020, the Company called all of the outstanding notes issued by BSPRT 2017-FL12017-FL2 Issuer, Ltd., a wholly owned indirect subsidiary of the Company. The outstanding principal of the notes on the date of the call was $45.6$21.0 million. The Company recognized all the remaining unamortized deferred financing costs of $4.5 million recorded within the Interest expense line of the consolidated statements of operations, which was a non-cash charge.
As of December 31, 20192020 and December 31, 2018 the notes issued by BSPRT 2017-FL2 Issuer, a wholly owned indirect subsidiary of the Company, are collateralized by interests in a pool of 5 and 12 mortgage assets having a total principal balance of $100.8 million and $244.6 million, respectively (the “2017-FL2 Mortgage Assets”). The sale of the 2017-FL2 Mortgage Assets to BSPRT 2017-FL2 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of November 29, 2017, between the Company and BSPRT 2017-FL2 Issuer.
As of December 31, 2019 and December 31, 2018 the notes issued by BSPRT 2018-FL3 Issuer, Ltd. and BSPRT 2018-FL3 Co-Issuer, LLC, wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 4127 and 41 mortgage assets having a principal balance of $523.2$417.9 million and $609.3$523.2 million, respectively (the "2018-FL3 Mortgage Assets"). The sale of the 2018-FL3 Mortgage Assets to BSPRT 2018-FL3 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of April 5, 2018, between the Company and BSPRT 2018-FL3 Issuer, Ltd.
As of December 31, 20192020 and December 31, 20182019 the notes issued by BSPRT 2018-FL4 Issuer, Ltd. and BSPRT 2018-FL4 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 4959 and 4149 mortgage assets having a principal balance of $867.9$852.1 million and $859.3$867.9 million, respectively (the "2018-FL4 Mortgage Assets"). The sale of the 2018-FL4 Mortgage Assets to BSPRT 2018-FL4 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of October 12, 2018, between the Company and BSPRT 2018-FL4 Issuer.
On May 30, 2019, BSPRT 2019-FL5 Issuer, Ltd. (the “Issuer”) and BSPRT 2019-FL5 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, collateralized by interests in a pool of 49 mortgage assets having a principal balance of $810.0 million (the "2019-FL5 Mortgage Assets") entered into an indenture with the OP, as advancing

F-26

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

agent, U.S. Bank National Association as note administrator and U.S. Bank National Association as trustee, which governs the issuance of approximately $714.8 million principal balance secured floating rate notes (the “Notes”), of which $639.9 million were purchased by third party investors and $74.9 million purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 95,177 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares”), which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities.
As of December 31, 2020 and December 31, 2019, the notes issued by BSPRT 2019-FL5 Issuer, Ltd. and BSPRT 2019-FL5 Co-Issuer, LLC, each wholly owned indirect subsidiaries of the Company, are collateralized by interests in a pool of 54 and 48 mortgage assets having a principal balance of $799.8 million and $809.4 million respectively (the "2019-FL5 Mortgage Assets"). The sale of the 2019-FL5 Mortgage Assets to BSPRT 2019-FL5 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of May 30, 2019, between the Company and BSPRT 2019-FL5 Issuer.Issuer, Ltd.
F-31

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of all four of the above CLOs of approximately $305.4$256.9 million and $288.8$305.4 million as of December 31, 20192020 and December 31, 2018,2019, respectively. The following table represents the terms of the notes issued by the 2018-FL3 Issuer, 2018-FL4 Issuer, and 2019-FL5 Issuer (the "CLOs), respectively, as of December 31, 2020 (dollars in thousands):
CLO FacilityTranchePar Value Issued
Par Value Outstanding (1)
Interest RateMaturity Date
2018-FL3 IssuerTranche A$286,700 $161,745 1M LIBOR + 10510/15/2034
2018-FL3 IssuerTranche A-S77,775 77,775 1M LIBOR + 13510/15/2034
2018-FL3 IssuerTranche B41,175 41,175 1M LIBOR + 16510/15/2034
2018-FL3 IssuerTranche C39,650 39,650 1M LIBOR + 25510/15/2034
2018-FL3 IssuerTranche D42,700 42,700 1M LIBOR + 34510/15/2034
2018-FL4 IssuerTranche A416,827 416,659 1M LIBOR + 1059/15/2035
2018-FL4 IssuerTranche A-S73,813 73,813 1M LIBOR + 1309/15/2035
2018-FL4 IssuerTranche B56,446 56,446 1M LIBOR + 1609/15/2035
2018-FL4 IssuerTranche C68,385 68,385 1M LIBOR + 2109/15/2035
2018-FL4 IssuerTranche D57,531 57,531 1M LIBOR + 2759/15/2035
2019-FL5 IssuerTranche A407,025 407,025 1M LIBOR + 1155/15/2029
2019-FL5 IssuerTranche A-S76,950 76,950 1M LIBOR + 1485/15/2029
2019-FL5 IssuerTranche B50,000 50,000 1M LIBOR + 1405/15/2029
2019-FL5 IssuerTranche C61,374 61,373 1M LIBOR + 2005/15/2029
2019-FL5 IssuerTranche D48,600 5,000 1M LIBOR + 2405/15/2029
2019-FL5 IssuerTranche E20,250 3,000 1M LIBOR + 2855/15/2029
$1,825,201 $1,639,227 
________________________
(1) Excludes $267.1 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2020.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The following table represents the terms of the notes issued by the 2017-FL1 Issuer, 2017-FL2 Issuer, 2018-FL3 Issuer, 2018-FL4 Issuer, and 2019-FL5 Issuer (the "CLOs), respectively, as of December 31, 2019 (dollars in thousands):
CLO Facility Tranche Par Value Issued 
Par Value Outstanding (1)
 Interest Rate Maturity Date
2017-FL2 Issuer Tranche A $237,970
 $
 1M LIBOR + 82 10/15/2034
2017-FL2 Issuer Tranche A-S 36,357
 
 1M LIBOR + 110 10/15/2034
2017-FL2 Issuer Tranche B 26,441
 
 1M LIBOR + 140 10/15/2034
2017-FL2 Issuer Tranche C 25,339
 
 1M LIBOR + 215 10/15/2034
2017-FL2 Issuer Tranche D 35,255
 21,444
 1M LIBOR + 345 10/15/2034
2018-FL3 Issuer Tranche A 286,700
 286,700
 1M LIBOR + 105 10/15/2034
2018-FL3 Issuer Tranche A-S 77,775
 77,775
 1M LIBOR + 135 10/15/2034
2018-FL3 Issuer Tranche B 41,175
 41,175
 1M LIBOR + 165 10/15/2034
2018-FL3 Issuer Tranche C 39,650
 39,650
 1M LIBOR + 255 10/15/2034
2018-FL3 Issuer Tranche D 42,700
 42,700
 1M LIBOR + 345 10/15/2034
2018-FL4 Issuer Tranche A 416,827
 416,827
 1M LIBOR + 105 9/15/2035
2018-FL4 Issuer Tranche A-S 73,813
 73,813
 1M LIBOR + 130 9/15/2035
2018-FL4 Issuer Tranche B 56,446
 56,446
 1M LIBOR + 160 9/15/2035
2018-FL4 Issuer Tranche C 68,385
 68,385
 1M LIBOR + 210 9/15/2035
2018-FL4 Issuer Tranche D 57,531
 57,531
 1M LIBOR + 275 9/15/2035
2019-FL5 Issuer Tranche A 407,025
 407,025
 1M LIBOR + 115 5/15/2029
2019-FL5 Issuer Tranche A-S 76,950
 76,950
 1M LIBOR + 148 5/15/2029
2019-FL5 Issuer Tranche B 50,000
 50,000
 1M LIBOR + 140 5/15/2029
2019-FL5 Issuer Tranche C 61,374
 61,374
 1M LIBOR + 200 5/15/2029
2019-FL5 Issuer Tranche D 48,600
 24,300
 1M LIBOR + 240 5/15/2029
2019-FL5 Issuer Tranche E 20,250
 20,250
 1M LIBOR + 285 5/15/2029
    $2,186,563
 $1,822,345
    
CLO FacilityTranchePar Value Issued
Par Value Outstanding (1)
Interest RateMaturity Date
2017-FL2 IssuerTranche A$237,970 $1M LIBOR + 8210/15/2034
2017-FL2 IssuerTranche A-S36,357 1M LIBOR + 11010/15/2034
2017-FL2 IssuerTranche B26,441 1M LIBOR + 14010/15/2034
2017-FL2 IssuerTranche C25,339 1M LIBOR + 21510/15/2034
2017-FL2 IssuerTranche D35,255 21,444 1M LIBOR + 34510/15/2034
2018-FL3 IssuerTranche A286,700 286,700 1M LIBOR + 10510/15/2034
2018-FL3 IssuerTranche A-S77,775 77,775 1M LIBOR + 13510/15/2034
2018-FL3 IssuerTranche B41,175 41,175 1M LIBOR + 16510/15/2034
2018-FL3 IssuerTranche C39,650 39,650 1M LIBOR + 25510/15/2034
2018-FL3 IssuerTranche D42,700 42,700 1M LIBOR + 34510/15/2034
2018-FL4 IssuerTranche A416,827 416,827 1M LIBOR + 1059/15/2035
2018-FL4 IssuerTranche A-S73,813 73,813 1M LIBOR + 1309/15/2035
2018-FL4 IssuerTranche B56,446 56,446 1M LIBOR + 1609/15/2035
2018-FL4 IssuerTranche C68,385 68,385 1M LIBOR + 2109/15/2035
2018-FL4 IssuerTranche D57,531 57,531 1M LIBOR + 2759/15/2035
2019-FL5 IssuerTranche A407,025 407,025 1M LIBOR + 1155/15/2029
2019-FL5 IssuerTranche A-S76,950 76,950 1M LIBOR + 1485/15/2029
2019-FL5 IssuerTranche B50,000 50,000 1M LIBOR + 1405/15/2029
2019-FL5 IssuerTranche C61,374 61,374 1M LIBOR + 2005/15/2029
2019-FL5 IssuerTranche D48,600 24,300 1M LIBOR + 2405/15/2029
2019-FL5 IssuerTranche E20,250 20,250 1M LIBOR + 2855/15/2029
$2,186,563 $1,822,345 
________________________
(1) Excludes $261.4 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2019.



F-27
F-33

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

The following table represents the terms of the notes issued by the 2017-FL1 Issuer, 2017-FL2 Issuer, 2018-FL3 Issuer, and 2018-FL4 Issuer, (the "CLOs), respectively, as of December 31, 2018 (dollars in thousands):
CLO Facility Tranche Par Value Issued 
Par Value Outstanding (1)
 Interest Rate Maturity Date
2017-FL1 Issuer Tranche A $223,600
 $48,557
 1M LIBOR + 135 6/15/2027
2017-FL1 Issuer Tranche B 48,000
 48,000
 1M LIBOR + 240 6/15/2027
2017-FL1 Issuer Tranche C 67,900
 67,900
 1M LIBOR + 425 6/15/2027
2017-FL2 Issuer Tranche A 237,970
 76,785
 1M LIBOR + 82 10/15/2034
2017-FL2 Issuer Tranche A-S 36,357
 36,357
 1M LIBOR + 110 10/15/2034
2017-FL2 Issuer Tranche B 26,441
 26,441
 1M LIBOR + 140 10/15/2034
2017-FL2 Issuer Tranche C 25,339
 25,339
 1M LIBOR + 215 10/15/2034
2017-FL2 Issuer Tranche D 35,255
 35,255
 1M LIBOR + 345 10/15/2034
2018-FL3 Issuer Tranche A 286,700
 286,700
 1M LIBOR + 105 3/15/2028
2018-FL3 Issuer Tranche A-S 77,775
 77,775
 1M LIBOR + 135 3/15/2028
2018-FL3 Issuer Tranche B 41,175
 41,175
 1M LIBOR + 165 3/15/2028
2018-FL3 Issuer Tranche C 39,650
 39,650
 1M LIBOR + 255 3/15/2028
2018-FL3 Issuer Tranche D 42,700
 42,700
 1M LIBOR + 345 3/15/2028
2018-FL4 Issuer Tranche A 416,827
 416,827
 1M LIBOR + 105 9/15/2035
2018-FL4 Issuer Tranche A-S 73,813
 73,813
 1M LIBOR + 130 9/15/2035
2018-FL4 Issuer Tranche B 56,446
 56,446
 1M LIBOR + 160 9/15/2035
2018-FL4 Issuer Tranche C 68,385
 68,385
 1M LIBOR + 210 9/15/2035
2018-FL4 Issuer Tranche D 57,531
 57,531
 1M LIBOR + 275 9/15/2035
    $1,861,864
 $1,525,636
    
________________________
(1) Excludes $186.5 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2018.


F-28

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

The below table reflects the total assets and liabilities of the Company's fouroutstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of December 31, 20192020 and December 31, 20182019 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE.
Assets (dollars in thousands) December 31, 2019 December 31, 2018
Cash and cash equivalents (1)
 $89,946
 $74,157
Commercial mortgage loans, held for investment, net (2)
 2,294,663
 1,921,428
Accrued interest receivable 6,254
 6,353
Total Assets $2,390,863
 $2,001,938
     
Liabilities    
Notes payable (3)(4)
 $2,064,601
 $1,712,129
Accrued interest payable 2,576
 3,163
Total Liabilities $2,067,177
 $1,715,292
Assets (dollars in thousands)December 31, 2020December 31, 2019
Cash and cash equivalents (1)
$99,025 $89,946 
Commercial mortgage loans, held for investment, net (2)
2,044,956 2,294,663 
Accrued interest receivable5,626 6,254 
Total Assets$2,149,607 $2,390,863 
Liabilities
Notes payable (3)(4)
$1,892,616 $2,064,601 
Accrued interest payable1,240 2,576 
Total Liabilities$1,893,856 $2,067,177 
________________________
(1) Includes $89.3$98.6 million and $73.7$89.3 million of cash held by the servicer related to CLO loan payoffs as of December 31, 20192020 and December 31, 2018.2019.
(2) The balance is presented net of allowance for loan losscredit losses of $0.8$19.4 million and $0.6$0.8 million as of December 31, 20192020 and December 31, 2018,2019, respectively.
(3) Includes $261.4$267.1 million and $186.5$261.4 million of CLO notes, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 20192020 and December 31, 2018.2019.
(4) The balance is presented net of deferred financing cost and discount of $19.2$13.7 million and $20.4$19.2 million as of December 31, 20192020 and December 31, 2018,2019, respectively.


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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Note 8 - Earnings Per Share
The Company uses the two-class method in calculating basic and diluted earnings per share. Net income is allocated between our common stock and other participating securities based on their participation rights. Diluted net income per share has been computed using the weighted average number of shares of common stock outstanding and other dilutive securities. The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations and the calculation of basic and diluted earnings per share for the years ended December 31, 2020, 2019 2018 and 2017,2018, respectively (dollars in thousands, except share amounts):
Year Ended December 31,
Numerator202020192018
Net income$54,746 $83,924 $52,825 
Less: Preferred stock dividends14,920 15,337 3,644 
Less: Undistributed earnings allocated to preferred stock1,673 
Net income attributable to common shareholders (for basic and diluted earnings per share)$39,826 $66,914 $49,181 
Denominator
Weighted-average common shares outstanding for basic earnings per share44,384,813 41,859,142 34,268,707 
  Effect of dilutive shares:
Unvested restricted shares14,066 12,504 14,229 
Weighted-average common shares outstanding for diluted earnings per share44,398,879 41,871,646 36,779,735 
Basic earnings per share$0.90 $1.60 $1.44 
Diluted earnings per share$0.90 $1.60 $1.44 
F-34
 Year Ended December 31,
Numerator2019 2018 2017
Net income$83,924
 $52,825
 $33,779
Less: Preferred stock dividends15,337
 3,644
 
Less: Undistributed earnings allocated to preferred stock1,673
 
 
Net income attributable to common shareholders (for basic and diluted earnings per share)66,914
 49,181
 33,779
      
Denominator     
Weighted-average common shares outstanding for basic earnings per share41,859,142
 34,268,707
 31,772,231
  Effect of dilutive shares:     
Unvested restricted shares12,504
 14,229
 12,658
Weighted-average common shares outstanding for diluted earnings per share41,871,646
 36,779,735
 31,784,889
      
Basic earnings per share$1.60
 $1.44
 $1.06
Diluted earnings per share$1.60
 $1.44
 $1.06


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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 9 - Stock Transactions
As of December 31, 20192020 and December 31, 2018,2019, the Company had 43,916,81544,510,051 and 39,303,71043,916,815 shares of common stock outstanding, respectively, including shares issued pursuant to the Company's distribution reinvestment plan (the "DRIP"), share repurchases and unvested restricted shares.
As of December 31, 2020 and December 31, 2019, the Company had $10.7 million outstanding of binding purchase commitments for common stock. As of December 31, 2018, the Company did not have any outstanding binding purchase commitments for common stock.
As of December 31, 201940,515 and December 31, 2018, the Company had 40,500 and 29,249 shares of Series A Preferred Stock outstanding, respectively and 1,400 and 01,400 shares of Series C Preferred Stock outstanding, respectively. As of December 31, 2019 and 2018, the Company did not have any outstanding of binding purchase commitments for Series A or Series C Preferred Stock.
The following tables present the activity in the Company's Series A Preferred Stock for the periods ended December 31, 20192020 and December 31, 2018,2019, respectively (dollars in thousands, except share amounts):
Series A Preferred StockSharesAmount
Beginning Balance, December 31, 201940,500 $202,144 
Issuance of Preferred Stock14 70 
Dividends paid in Preferred Stock
Offering costs— (23)
Amortization of offering costs— 94 
Ending Balance, December 31, 202040,515 $202,292 
Series A Preferred Stock Shares AmountSeries A Preferred StockSharesAmount
Beginning Balance, December 31, 2018 29,249
 $145,786
Beginning Balance, December 31, 201829,249 $145,786 
Issuance of Preferred Stock 11,247
 56,233
Issuance of Preferred Stock11,247 56,233 
Dividends paid in Preferred Stock 4
 24
Dividends paid in Preferred Stock24 
Offering costs 
 
Offering costs— 
Amortization of offering costs 
 101
Amortization of offering costs— 101 
Ending Balance, December 31, 2019 40,500
 $202,144
Ending Balance, December 31, 201940,500 $202,144 
    
 Shares Amount
Beginning Balance, December 31, 2017 
 $
Issuance of Preferred Stock 29,249
 146,245
Offering costs 
 (510)
Amortization of offering costs 
 51
Ending Balance, December 31, 2018
 29,249
 $145,786
The following tables present the activity in the Company's Series C Preferred Stock for the periodperiods ended December 31, 2020 and December 31, 2019, (dollars in thousands, except share amounts):
Series C Preferred StockSharesAmount
Beginning Balance, December 31, 20191,400 $6,966 
Issuance of Preferred Stock
Dividends paid in Preferred Stock
Offering costs— (11)
Amortization of offering costs— 
Ending Balance, December 31, 20201,400 $6,962 
Series C Preferred StockSharesAmount
Beginning Balance, December 31, 2018$
Issuance of Preferred Stock1,400 6,998 
Dividends paid in Preferred Stock
Offering costs— (33)
Amortization of offering costs— 
Ending Balance, December 31, 20191,400 $6,966 
F-35

Series C Preferred Stock Shares Amount
Beginning Balance, December 31, 2018 
 $
Issuance of Preferred Stock 1,400
 6,998
Dividends paid in Preferred Stock 
 
Offering costs 
 (33)
Amortization of offering costs 
 1
Ending Balance, December 31, 2019 1,400
 $6,966
Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Distributions
In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes. The Company's distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Company's board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured.

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TableIn April 2020, the Company’s board of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Fordirectors unanimously approved a transition in the years ended December 31, 2019timing of the dividend payments to holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly payment and December 31, 2018,accrual basis. The first quarterly dividend was the second quarter 2020 dividend payable in July 2020. Similarly, the Company declaredbegan paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.
The monthly distributions for the first quarter of 2020 were paid at a daily common stock distributionsrate equivalent to 1.44$1.44 per annum, per share respectively. Forof common stock. Starting with the yearssecond quarter 2020 distribution, the 2020 quarterly distributions were paid at a quarterly rate of $0.275 per share of common stock (equivalent to $1.10 per annum). Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distribution payments are not assured. Subject to the terms of the Preferred Stock, dividends on the Company’s Preferred Stock are generally paid on an as-converted basis with the common stock.
The Company distributed $45.7 million of common stock dividends during the year ended December 31, 20192020, comprised of $36.8 million in cash and December 31, 2018, the Company declared monthly Preferred Stock dividends per share equivalent to the amount$8.9 million in shares of common stock distributions that would be paid on a conversion of Preferred Stock into common stock.
As of December 31, 2019 and December 31, 2018,issued under the Company had declaredDRIP. The DRIP was temporarily suspended for the March 2020 dividend due to COVID-19 related valuation volatility, but unpaid common stock distributions of $5.4 million and $4.7 million, respectively. Additionally, as of December 31, 2019 and December 31, 2018,was reactivated for the Company had declared but unpaid distributions of $1.5 million and $1.1 million for Series A Preferred Stock, respectively and $0.1 million and $0.0 million for Series C Preferred Stock, respectively. These amounts are included in Distributions payable on the Company’s consolidated balance sheets.
second quarter 2020 dividend. The Company distributed $59.7 million of common stock dividends during the year ended December 31, 2019, comprised of $45.8 million in cash and $13.9 million in shares of common stock issued under the DRIP. The Company distributed $48.5 million during the year ended
As of December 31, 2018, comprised of $34.5 million in cash2020 and $14.0 million in shares ofDecember 31, 2019, the Company had declared but unpaid common stock issued underdistributions of $12.2 million and $5.4 million, respectively. Additionally, as of December 31, 2020 and December 31, 2019, the DRIP.Company had declared but unpaid distributions of $3.3 million and $1.5 million for Series A Preferred Stock, respectively and $0.1 million and $0.1 million for Series C Preferred Stock, respectively. These amounts are included in Distributions payable on the Company’s consolidated balance sheets.
Share Repurchase Program
The Company's board of directors unanimously approved an amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016. The SRP enables stockholders to sell their shares to the Company. Subject to certain conditions, stockholders that purchased shares of the Company's common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period.
On August 10, 2017, the Company's board of directors amended the SRP to provide that theThe repurchase price per share for requests will beSRP repurchases is equal to the lesser of (i) the Company’s most recent estimated per-share net asset value ("NAV"), as approved by the Company’s board of directors from time to time, and (ii) the Company’s book value per share, computed in accordance with GAAP, multiplied by a percentage equal to (i) 92.5%, if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95%, if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5%, if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100%, if the person seeking repurchase has held his or her shares for a period greater than four years or in the case of requests for death or disability.
The Company’s most recent estimated per-share NAV is $18.57,as of December 31, 2020, as determined by the board of directors, as of September 30, 2019.is $17.88. The Company’s GAAP book value per share as of December 31, 20192020 is $18.60.$17.94.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Repurchase requests related to death or a qualifying disability must satisfy certain conditions, each of which are assessed by and at the sole discretion of the Company, including the following conditions. In the case of death, the shareholder must be a natural person (or a revocable grantor trust) and the Company must receive a written notice from the estate of the shareholder, the recipient of the shares through bequest or inheritance, or the trustee in the case of a revocable grantor trust. In the case of a “qualifying disability”, the shareholder must be a natural person (or a revocable grantor trust) and the Company must receive a written notice from the shareholder, or the trustee in the case of a revocable grantor trust, that the condition was not pre-existing on the date the shares were acquired. In order for a disability to be considered a “qualifying disability”, the shareholder must receive and provide evidence (the shareholder application and the notice of final determination) of disability based upon a physical or mental condition or impairment made by a government agency responsible for reviewing and determining disability retirement benefits (e.g. the Social Security Administration).
Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same fiscal semester through the issuance of common stock pursuant to any DRIP in effect from time to time, provided that the Company's board of directors has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. Any repurchase requests received during such fiscal semester will be paid at the price, computed as described above on the last day of such fiscal semester. Due to these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. However, a stockholder may withdraw its request at any time or ask that the Company honors the

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

request when funds are available. Pending repurchase requests will be honored on a pro rata basis. The Company will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made.
When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares.
The following table reflects the number of shares repurchased under the SRP cumulatively through December 31, 2019:
  Number of Requests Number of Shares Repurchased Average Price per Share
Cumulative as of December 31, 2018 3,845
 2,800,414
 $20.65
January 1 - January 31, 2019(1)
 845
 387,530
 18.60
February 1 - February 28, 2019 
 
 N/A
March 1 - March 31, 2019 
 
 N/A
April 1 - April 30, 2019 
 
 N/A
May 1 - May 31, 2019 
 
 N/A
June 1 - June 30, 2019 
 
 N/A
July 1 - July 31, 2019(2)
 1,188
 354,323
 18.65
August 1 - August 31, 2019 
 
 N/A
September 1 - September 30, 2019 
 
 N/A
October 1 - October 31, 2019 
 
 N/A
November 1 - November 30, 2019 
 
 N/A
December 1 - December 31, 2019 
 
 N/A
Cumulative as of December 31, 2019 5,878
 3,542,267
 $20.23
2020:
Number of RequestsNumber of Shares RepurchasedAverage Price per Share
Cumulative as of December 31, 20195,878 3,542,267 $20.23 
January 1 - January 31, 2020 (1)
1,170 373,135 18.56 
February 1 - February 28, 2020N/A
March 1 - March 31, 2020N/A
April 1 - April 30, 2020 (1)
N/A
May 1 - May 31, 2020N/A
June 1 - June 30, 2020N/A
July 1 - July 31, 2020 (2)
1,046206,33216.25 
August 1 - August 31, 2020N/A
September 1 - September 30, 2020 (2)
N/A
October 1 - October 31, 2020N/A
November 1 - November 30, 2020N/A
December 1 - December 31, 2020N/A
Cumulative as of December 31, 20208,0944,121,734$19.88 
________________________
(1) Reflects shares repurchased in January 2019 pursuant to repurchase requests submitted for the fiscalsecond semester ended December 31, 2018.
(2) Reflectsof 2019, including 11,306 shares repurchasedwhich for administrative reasons were processed in July 2019 pursuant to repurchase requests submitted for the fiscal semester ended June 30, 2019.April 2020. Pursuant to the terms of the SRP, the BoardCompany is only authorized repurchasesto repurchase up to the amount of proceeds reinvested through our DRIP.DRIP during the applicable semester. As a result, redemption requests for this semester in the amount of 1,934,3691,986,803 shares were not fulfilled.fulfilled for the second semester of 2019.
(2) Reflects shares repurchased pursuant to repurchase requests submitted for the first semester of 2020, including 771 shares which for administrative reasons were processed in September 2020. Pursuant to the terms of the SRP, the Company is only authorized to repurchase up to the amount of proceeds reinvested through our DRIP during the applicable semester. As a result, redemption requests in the amount of 1,677,268 shares were not fulfilled for the first semester of 2020.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Note 10 - Commitments and Contingencies
Unfunded Commitments Under Commercial Mortgage Loans
As of December 31, 20192020 and 2018,2019, the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands):
Funding ExpirationDecember 31, 2019 December 31, 2018
2019
 34,667
202090,519
 176,760
2021100,861
 106,940
202256,863
 
20238,637
 
20245,450
 
2025 and beyond
 
 262,330
 318,367
Funding ExpirationDecember 31, 2020December 31, 2019
2020$$90,519 
202159,692 100,861 
202291,420 56,863 
202369,880 8,637 
2024 and beyond7,700 5,450 
$228,692 $262,330 
The borrowers are required to meet or maintain certain metrics in order to qualify for the unfunded commitment amounts.

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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Litigation and Regulatory Matters
InThe Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company may become subject to litigation, claims and regulatory matters. The Company has no knowledge ofbelieves, individually or in the aggregate, will have a material legalimpact on the Company’s financial condition, operating results or regulatory proceedings pending or known to be contemplated against the Company at this time.cash flows.
Note 11 - Related Party Transactions and Arrangements
Advisory Agreement Fees and Reimbursements
Pursuant to the Advisory Agreement, the Company makes or wasis required to make the following payments and reimbursements to the Advisor:
The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company’s executive officers.
The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' equity as calculated pursuant to the Advisory Agreement.
The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, our Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to our Advisor exceed 10.0% of the aggregate total return for such year.
The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company's behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the years ended December 31, 2020, 2019 2018 and 20172018 and the associated payable as of December 31, 20192020 and 20182019 (dollars in thousands):
Year Ended December 31,Payable as of December 31,
20202019201820202019
Acquisition expenses (1)
696 900 452 225 
Administrative services expenses13,120 16,363 13,446 2,940 1,238 
Asset management and subordinated performance fee15,178 16,226 10,299 4,773 3,326 
Other related party expenses (2)(3)
703 1,610 1,259 1,812 
Total related party fees and reimbursements$29,697 $35,099 $25,456 $9,525 $4,789 
________________________
  Year Ended December 31, Payable as of December 31,
  2019 2018 2017 2019 2018
Acquisition fees and acquisition expenses (1)
 $900
 $452
 $4,197
 $225
 $1
Administrative services expenses 16,363
 13,446
 6,765
 1,238
 1,224
Asset management and subordinated performance fee 16,226
 10,299
 9,273
 3,326
 1,072
Other related party expenses(2)
 1,610
 1,259
 394
 
 932
Total related party fees and reimbursements $35,099
 $25,456
 $20,629
 $4,789
 $3,229
________________________
(1) Total acquisition fees and expenses paid during the years ended December 31, 2020, 2019 and 2018 and 2017 were $7.1 million, $8.4 million $8.1 million and $10.2$8.1 million respectively, of which $6.4 million, $7.5 million $7.6 million and $6.0$7.6 million were capitalized within the commercial mortgage loans, held for investment line of the consolidated balance sheets for the years ended December 31, 2020, 2019 2018 and 2017.2018.
(2) These are primarily related to reimbursable costs incurred related to the increase in loan origination activities. These amountsactivities and are included in Other expenses in the Company's consolidated statements of operations.
(3) The related party payable includes $1.8 million of payments made by the Advisor to third party vendors on behalf of the Company.
The payables as of December 31, 20192020 and 20182019 in the table above are included in Due to affiliates on the Company's consolidated balance sheets.
Purchases of Common Stock and Preferred Stock
Refer to Note 9 - Stock Transactions for a description of the Company’s private placements. Officers of the Company and other employees of the Advisor and its affiliates (“Manager Investors”), as well as members of the Company's board of directors, have acquired common stock and Series A preferred stock in these private placements on substantially the same terms applying to purchases by third party accredited investors unaffiliated with the Company or the Advisor. The Manager Investors acquired an aggregate of $2.4 million of common stock in these private placements during the year ended December 31, 2019. During the year ended December 31, 2019, each independent member of the Company's board of directors acquired 5,984 shares of common stock in these private placements for an aggregate purchase price of $0.4 million.

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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

Other Transactions
On February 22, 2018, the Company purchased commercial mortgage loans, held-for-sale from an entity that is an affiliate of ourthe Company's Advisor, for an aggregate purchase price of $27.8 million. The purchase of the commercial mortgage loans and the $27.8 million purchase price were approved by the Company’s board of directors. On April 18, 2018, the Company sold $23.3 million of these commercial mortgage loans into a CMBS securitization. The remaining $4.5 million of principal, with carrying value of $3.9 million, of these commercial mortgage loans, are recorded as held for investment, were fully paid down during the year ended December 31, 2020.
Pursuant to a lending and security agreement with Security Benefit Life Insurance Company ("SBL"), which was entered into in commercial mortgage loans, held-for-investment,February 2020 and amended in March and August 2020, the Company may borrow up to $100.0 million at a rate of one-month LIBOR + 4.5%. SBL is an entity that also holds 14,950 of the Company’s outstanding shares of Series A Preferred Stock. The facility has a maturity of February 10, 2023 and is secured by a pledge of equity interests in certain of the Company’s subsidiaries. The Company incurred $0.2 million of interest expense on the consolidated balance sheet aslending agreement with SBL for the year ended December 31, 2020. As of December 31, 2019.2020 there was 0 outstanding balance under the lending agreement.
Note 12 - Share-Based Compensation
Restricted Share Plan
The Company has an employee and director incentive restricted share plan (the "RSP"), which provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, the Advisor and its affiliates. The total number of common shares granted under the RSP shall not exceed 5.0% of the Company’s authorized common shares pursuant to the Offering, and in any event, will not exceed 4.0 million shares (as such number may be adjusted for stock splits, stock distributions, combinations and similar events).
Restricted share awards entitle the recipient to receive common shares from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in common shares shall be subject to the same restrictions as the underlying restricted shares. The fair value of the restricted share awards are expensed over the vesting period.
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Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
As of December 31, 2020, the Company had granted 44,876 restricted shares to its independent directors, of which 5,333 were forfeited and 27,823 have vested, leaving a balance of 11,720 unvested restricted shares. As of December 31, 2019, the Company had granted 34,106 restricted shares to its independent directors, of which 5,333 were forfeited and 20,207 have vested, leaving a balance of 8,566 unvested restricted shares. As of December 31, 2018, the Company had granted 31,970 restricted shares to its independent directors, of which 5,333 were forfeited and 12,935 have vested, leaving a balance of 13,702 unvested restricted shares. The compensation expense associated with the restricted share grants was $0.2 million, $0.2 million and $0.1$0.2 million, for the years ended December 31, 2020, 2019 2018 and 2017,2018, respectively and are included within Other expenses line on the consolidated statements of operations.
Note 13 - Fair Value of Financial Instruments
GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:
Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
Level III - Unobservable inputs that reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.
The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.
Financial Instruments Measured at Fair Value on a Recurring Basis
CMBS is recorded in real estate securities, available for sale, measured at fair value on the consolidated balance sheets are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, and recent trades of similar real estate securities. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of December 31, 2020 and December 31, 2019, the Company obtained third party pricing for determining the fair value of each CMBS investment, which resultedresulting in a Level II classification. As of December 31, 2018, the Company classified the real estate securities, available for sale, measured at fair value as Level III.
Commercial mortgage loans held-for-sale, measured at fair value in the Company's TRS are initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. Commercial mortgage loans held-for-sale, measured at fair value that are originated in the last month of the reporting period are held and marked to the transaction proceeds. The Company classified the commercial mortgage loans held-for-sale, measured at fair value as Level III.
Other real estate investments, measured at fair value on the consolidated balance sheets are valued using unobservable inputs. The Company engaged the services of a third party independent valuation firm to determine fair value of certain investments, including preferred equity investments, held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. The Company classified the other real estate investments, measured at fair value as Level III.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
The fair value for Treasury note futures is derived using market prices. Treasury note futures trade on the Chicago Mercantile Exchange (“CME”). The instruments are a variety of recently issued 10-year U.S. Treasury notes. The future contracts are liquid and are centrally cleared through the CME. Treasury note futures are generally categorized in Level I of the fair value hierarchy.
The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. Valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy. The credit default swaps and
interest rate swaps are generally categorized in Level II of the fair value hierarchy.
A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets.assets or liabilities. The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period. There were sixno material transfers out of Level III ofbetween levels within the fair value hierarchy during the yearyears ended December 31, 2020 and December 31, 2019.  

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of December 31, 20192020 and December 31, 20182019 (dollars in thousands):
December 31, 2020TotalLevel ILevel IILevel III
Assets, at fair value
Real estate securities, available for sale, measured at fair value$171,136 $$171,136 $
Commercial mortgage loans, held-for-sale, measured at fair value67,649 67,649 
Other real estate investments, measured at fair value2,522 2,522 
Interest rate swaps25 25 
Total assets, at fair value$241,332 $0 $171,161 $70,171 
Liabilities, at fair value
 Credit default swaps$297 $$297 $
 Treasury note futures106 106 
Total liabilities, at fair value$403 $106 $297 $0 
December 31, 2019
Assets, at fair value
Real estate securities, available for sale, measured at fair value$386,316 $$386,316 $
Commercial mortgage loans, held-for-sale, measured at fair value112,562 112,562 
Other real estate investments, measured at fair value2,557 2,557 
Credit default swaps59 59 
Interest rate swaps325 325 
Treasury note futures735 735 
Total assets, at fair value$502,554 $735 $386,700 $115,119 
Liabilities, at fair value
Credit default swaps$1,581 $$1,581 $
Total liabilities, at fair value$1,581 $0 $1,581 $0 
 Total Level I Level II Level III
December 31, 2019       
Assets, at fair value       
Real estate securities, available for sale, measured at fair value$386,316
 $
 $386,316
 $
Commercial mortgage loans, held-for-sale, measured at fair value112,562
 
 
 112,562
Other real estate investments, measured at fair value2,557
 
 
 2,557
Credit default swaps59
 
 59
 
Interest rate swaps325
 
 325
 
Treasury note futures735
 735
 
 
Total assets, at fair value$502,554
 $735
 $386,700
 $115,119
        
Liabilities at FV       
Credit default swaps$1,581
 $
 $1,581
 $
Total liabilities, at fair value1,581
 
 1,581
 
        
December 31, 2018       
Assets, at fair value       
Real estate securities, available for sale, measured at fair value$26,412
 $
 $
 $26,412
Commercial mortgage loans, held-for-sale, measured at fair value76,863
 
   76,863
Credit default swaps640
 
 640
 
Interest rate swaps206
 
 206
 
Total assets, at fair value$104,121
 $
 $846
 $103,275
        
Liabilities, at fair value       
Interest rate swaps$256
 $
 $256
 $
Treasury note futures1,063
 1,063
 
 
Total liabilities, at fair value$1,319
 $1,063
 $256
 $



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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category. As a result, the unrealized gains and losses for assets and liabilities within the Level III category may include changes in fair value that were attributable to both observable and unobservable inputs. The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of December 31, 20192020 and December 31, 20182019 (dollars in thousands).
Asset CategoryFair ValueValuation Methodologies
Unobservable Inputs (1)
Weighted Average (2)
Range
December 31, 2019     
Commercial mortgage loans, held-for-sale, measured at fair value$112,562
Discounted Cash FlowYield4.9%4.7% - 5.2%
Other real estate investments, measured at fair value2,557
Discounted Cash FlowYield12.4%11.4% - 13.4%
December 31, 2018     
Commercial mortgage loans, held-for-sale, measured at fair value$76,863
Discounted Cash FlowYield6.3%4.7% - 11.3%
Real estate securities, available for sale, measured at fair value26,412
Broker QuotesYield5.5%4.0% - 6.0%
Asset CategoryFair ValueValuation Methodologies
Unobservable Inputs (1)
Weighted Average (2)
Range
December 31, 2020
Commercial mortgage loans, held-for-sale, measured at fair value$67,649 Discounted Cash FlowYield16.6%15.6% - 17.6%
Other real estate investments, measured at fair value2,522 Discounted Cash FlowYield13.2%12.2% - 14.2%
December 31, 2019
Commercial mortgage loans, held-for-sale, measured at fair value$112,562 Discounted Cash FlowYield4.9%4.7% - 5.2%
Other real estate investments, measured at fair value2,557 Broker QuotesYield12.4%11.4% - 13.4%
________________________
(1) In determining certain inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments.
(2) Inputs were weighted based on the fair value of the investments included in the range.
Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.


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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020


The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of December 31, 20192020 and December 31, 20182019 for which the Company has used Level III inputs to determine fair value (dollars in thousands):
December 31, 2020
Commercial mortgage loans, held-for-sale, measured at fair valueOther real estate investments, measured at fair value
Beginning balance, January 1, 2020Beginning balance, January 1, 2020$112,562 $2,557 
Transfers into Level III (2)
Transfers into Level III (2)
23,625 
Total realized and unrealized gain/(loss) included in earnings:Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loan, held-for-saleRealized gain/(loss) on sale of commercial mortgage loan, held-for-sale15,931 
Unrealized gain/(loss) on commercial mortgage loans, held-for-sale and other real estate investmentsUnrealized gain/(loss) on commercial mortgage loans, held-for-sale and other real estate investments(75)(32)
Net accretionNet accretion(3)
Purchases (1)
Purchases (1)
267,552 
Sales / paydowns (1)
Sales / paydowns (1)
(328,321)
Transfers out of Level III (2)
Transfers out of Level III (2)
(23,625)
Ending Balance, December 31, 2020Ending Balance, December 31, 2020$67,649 $2,522 
 December 31, 2019December 31, 2019
 Commercial mortgage loans, held-for-sale, measured at fair value Real estate securities, available for sale, measured at fair value Other real estate investments, measured at fair valueCommercial mortgage loans, held-for-sale, measured at fair valueOther real estate investments, measured at fair value
Beginning balance, January 1, 2019 $76,863
 $26,412
 $
Beginning balance, January 1, 2019$76,863 $0 
Transfers into Level III 
 
 
Transfers into Level III (2)
Transfers into Level III (2)
Total realized and unrealized gain (loss) included in earnings:      Total realized and unrealized gain (loss) included in earnings:
Realized gain (loss) on sale of real estate securities 
 
 
Realized gain (loss) on sale of real estate securities— 
Realized gain (loss) on sale of commercial mortgage loan held-for-sale 37,832
 
 
Realized gain (loss) on sale of commercial mortgage loan held-for-sale37,832 
Unrealized gain (loss) on commercial mortgage loans held-for-sale and other real estate investments 312
 
 47
Unrealized gain (loss) on commercial mortgage loans held-for-sale and other real estate investments312 47 
Net accretion 
 
 
Net accretion
Unrealized gain (loss) included in OCI (1)
 
 
 
Unrealized gain (loss) included in OCIUnrealized gain (loss) included in OCI
Purchases 1,015,677
 
 2,510
Purchases1,015,677 2,510 
Sales / paydowns (1,008,050) 
 
Sales / paydowns(1,008,050)
Cash repayments / receipts 
 
 
Cash repayments / receipts
Transfers out of Level III (10,072) (26,412) 
December 31, 2019 balance $112,562
 $
 $2,557
      
 December 31, 2018
 Commercial mortgage loans, held-for-sale, measured at fair value Real estate securities, available for sale, measured at fair value Other real estate investments, measured at fair value
Beginning balance, January 1, 2018 $28,531
 $
 $
Transfers into Level III 
 
 
Total realized and unrealized gain (loss) included in earnings:      
Realized gain (loss) on sale of real estate securities 
 (107) 
Realized gain (loss) on sale of commercial mortgage loan held-for-sale 11,288
 
 
Unrealized gain (loss) on commercial mortgage loans held-for-sale and other real estate investments (237) 
 
Net Accretion 
 (76) 
Unrealized gains (losses) included in OCI (1)
 
 (459) 
Purchases 617,916
 39,510
 
Sales / paydowns (580,635) (12,456) 
Cash repayments / receipts 
 
 
Transfers out of Level III 
 
 
December 31, 2018 balance $76,863
 $26,412
 $
Transfers out of Level III (2)
Transfers out of Level III (2)
(10,072)
Ending Balance, December 31, 2019Ending Balance, December 31, 2019$112,562 $2,557 
________________________
(1) Unrealized losses included Excluded from Purchases and Sales/paydowns are $679.1 million and $682.0 million, respectively, of loans that collateralize a CMBS investment required to be consolidated in Other comprehensive income ("OCI") are attributable to assets held atconnection with the Company's retention of the B tranche during the year ended December 31, 2019 and2020. Upon disposition of the B tranche during the year ended December 31, 2018.2020, the Company recognized a gain of $2.8 million that is recorded in Realized gain/loss on sale of real estate securities on the consolidated statements of operations.

(2) Transfers in and transfers out include transfers between Commercial mortgage loans, held-for-sale and Commercial mortgage loans, held for investment.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximates their fair value. The fair value of borrowings under repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature, and are measured using Level II inputs.
Financial Instruments Not Measured at Fair Value
The fair values of the Company's commercial mortgage loans, held-for-investmentheld for investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of December 31, 20192020 and 20182019 (dollars in thousands)
   Level Carrying Amount Fair Value
December 31, 2019       
Commercial mortgage loans, held-for-investment (1)
Asset III $2,762,963
 $2,784,650
Collateralized loan obligationLiability III 1,803,185
 1,822,386
Mortgage note payableLiability III 29,167
 29,167
December 31, 2018       
Commercial mortgage loans, held-for-investment (1)
Asset III $2,211,666
 $2,213,650
Collateralized loan obligationLiability III 1,505,279
 1,518,127
Other financing and loan participation - commercial mortgage loansLiability III 9,902
 9,902
:
LevelCarrying AmountFair Value
December 31, 2020
Commercial mortgage loans, held for investment (1)
AssetIII$2,714,734 $2,724,039 
Collateralized loan obligationLiabilityIII1,625,498 1,606,478 
Mortgage note payableLiabilityIII29,167 29,167 
Other financing and loan participation - commercial mortgage loansLiabilityIII31,379 31,379 
December 31, 2019
Commercial mortgage loans, held for investment (1)
AssetIII$2,762,963 $2,784,650 
Collateralized loan obligationLiabilityIII1,803,185 1,822,386 
Mortgage note payableLiabilityIII29,167 29,167 
________________________
(1) The carrying value is gross of $20.9 millionand $0.9 millionand $4.8 millionof allowance for loancredit losses as of December 31, 20192020 and December 31, 2018,2019, respectively.
The fair value of the commercial mortgage loans, held-for-investmentheld for investment is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company estimates the fair value of the collateralized loan obligations using external broker quotes. The fair value of the other financing and loan participation-commercial mortgage loans is generally estimated using a discounted cash flow analysis. At December 31, 2019,2020, the Mortgage note payable was initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 14 - Derivative Instruments
The Company uses derivative instruments primarily to manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk.
As of December 31, 2019,2020, the net premiums received on derivative instrument assets were $5.7$1.3 million.
The following derivative instruments were outstanding as of December 31, 20192020 and December 31, 20182019 (dollars in thousands)
    Fair Value
Contract type Notional 
Assets 
 Liabilities
As of December 31, 2019      
Credit default swaps $94,300
 $59
 $1,581
Interest rate swaps 42,546
 325
 
Treasury note futures 74,000
 735
 
Total $210,846
 $1,119
 $1,581
       
As of December 31, 2018      
Credit default swaps $45,000
 $640
 $
Interest rate swaps 37,965
 206
 256
Treasury note futures 49,000
 
 1,063
Total $131,965
 $846
 $1,319
:
Fair Value
Contract typeNotional
Assets
Liabilities
As of December 31, 2020
Credit default swaps$46,000 $$297 
Interest rate swaps32,517 25 
Treasury note futures43,500 106 
Total$122,017 $25 $403 
As of December 31, 2019
Credit default swaps$94,300 $59 $1,581 
Interest rate swaps42,546 325 
Treasury note futures74,000 735 
Total$210,846 $1,119 $1,581 
The following table indicates the net realized and unrealized gains and losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for year ended December 31, 20192020 and December 31, 2018:2019:
Year Ended December 31, 2020Year Ended December 31, 2019
Contract typeUnrealized
(Gain)/Loss
Realized
(Gain)/Loss
Unrealized
(Gain)/Loss
Realized
(Gain)/Loss
Credit default swaps$(143)$323 $456 $2,230 
Interest rate swaps296 7,463 (380)(269)
Treasury note futures842 4,665 (1,798)1,962 
Options35 401 
Total$995 $12,486 $(1,722)$4,324 

F-46
  Year Ended December 31, 2019 Year Ended December 31, 2018
Contract type 
Unrealized
(Gain)/Loss
 
Realized
(Gain)/Loss
 
Unrealized
(Gain)/Loss
 
Realized
(Gain)/Loss
Credit default swaps $456
 $2,230
 $(139) $(229)
Interest rate swaps (380) (269) 351
 136
Treasury note futures (1,798) 1,962
 1,162
 (1,734)
Options 
 401
 
 
Total $(1,722) $4,324
 $1,374
 $(1,827)

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 15 - Offsetting Assets and Liabilities
The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting, as of December 31, 20192020 and December 31, 20182019 (dollars in thousands):
Gross Amounts Not Offset on the Balance Sheet
AssetsGross Amounts of Recognized AssetsGross Amounts Offset on the Balance SheetNet Amount of Assets Presented on the Balance SheetFinancial Instruments
Cash Collateral (1)
Net Amount
December 31, 2020
Derivative instruments, at fair value$25 $$25 $$$25 
December 31, 2019
Derivative instruments, at fair value$1,119 $$1,119 $$10,895 $
       Gross Amounts Not Offset on the Balance Sheet 
Assets Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amount of Assets Presented on the Balance Sheet Financial Instruments 
Cash Collateral Pledged (1)
 Net Amount
December 31, 2019            
Derivative instruments, at fair value $1,119
 $
 $1,119
 $
 $10,895
 $
December 31, 2018            
Derivative instruments, at fair value $846
 $
 $846
 $
 $
 $846
       Gross Amounts Not Offset on the Balance Sheet  Gross Amounts Not Offset on the Balance Sheet
Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amount of Liabilities Presented on the Balance Sheet Financial Instruments 
Cash Collateral Pledged (1)
 Net AmountLiabilitiesGross Amounts of Recognized LiabilitiesGross Amounts Offset on the Balance SheetNet Amount of Assets Presented on the Balance SheetFinancial Instruments
Cash Collateral (1)
Net Amount
December 31, 2020December 31, 2020
Repurchase agreements, commercial mortgage loansRepurchase agreements, commercial mortgage loans$276,340 $$276,340 $496,030 $5,016 $
Repurchase agreements, real estate securitiesRepurchase agreements, real estate securities186,828 186,828 245,956 1,146 
Derivative instruments, at fair valueDerivative instruments, at fair value403 403 3,435 
December 31, 2019            December 31, 2019
Repurchase agreements, commercial mortgage loans $252,543
 $
 $252,543
 $394,229
 $5,011
 $
Repurchase agreements, commercial mortgage loans$252,543 $$252,543 $394,229 $5,011 $
Repurchase agreements, real estate securities 394,359
 
 394,359
 455,301
 1,657
 
Repurchase agreements, real estate securities394,359 394,359 454,301 1,657 
Derivative instruments, at fair value 1,581
 
 1,581
 
 3,679
 
Derivative instruments, at fair value1,581 1,581 3,679 
December 31, 2018            
Repurchase agreements, commercial mortgage loans $149,440
 $
 $149,440
 $203,846
 $5,010
 $
Repurchase agreements, real estate securities 44,539
 
 44,539
 54,973
 305
 
Derivative instruments, at fair value 1,319
 
 1,319
 
 7,232
 
________________________
(1) These cash collateral amounts are recorded within the Restricted cash balanceand Accounts payable and accrued expenses balances on the consolidated balance sheets.



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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 16 - Segment Reporting
The Company conducts its business through the following reporting segments:
The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans.
The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities.
The commercial real estate Conduitconduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.
The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.
The following table represents the Company's operations by segment for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 and December 31, 2017 (dollars in thousands):
December 31, 2020December 31, 2020TotalReal Estate Debt and Other Real EstateReal Estate SecuritiesTRSReal Estate Owned
Interest incomeInterest income$179,872 $165,907 $10,854 $3,111 $
Revenue from real estate ownedRevenue from real estate owned4,299 4,299 
Interest expenseInterest expense66,556 54,480 7,914 2,185 1,977 
Net incomeNet income54,746 66,383 (7,207)(5,559)1,129 
Total assets as of December 31, 2020Total assets as of December 31, 20203,189,761 2,866,790 175,088 105,364 42,519 
December 31, 2019 Total Real Estate Debt and Other Real Estate Real Estate Securities TRS Real Estate OwnedDecember 31, 2019
Interest income $195,299
 $181,434
 $6,149
 $7,716
 $
Interest income$195,299 $181,434 $6,149 $7,716 $
Revenue from real estate owned 3,169
 
 
 
 3,169
Revenue from real estate owned3,169 3,169 
Interest expense 90,418
 83,597
 2,911
 3,670
 240
Interest expense90,418 83,597 2,911 3,670 240 
Net income 83,924
 61,936
 3,238
 19,130
 (380)Net income83,924 61,936 3,238 19,130 (380)
Total assets as of December 31, 2019 3,540,620
 2,964,233
 388,170
 131,193
 57,024
Total assets as of December 31, 20193,540,620 2,964,233 388,170 131,193 57,024 
December 31, 2018          December 31, 2018
Interest income $152,288
 $144,967
 $717
 $6,604
 $
Interest income$152,288 $144,967 $717 $6,604 $
Interest expense 70,000
 65,521
 770
 3,709
 
Interest expense70,000 65,521 770 3,709 
Net income 52,825
 50,041
 (160) 2,944
 
Net income52,825 50,041 (160)2,944 
Total assets as of December 31, 2018 2,606,078
 2,492,440
 26,474
 87,164
 
Total assets as of December 31, 20182,606,078 2,492,440 26,474 87,164 
December 31, 2017          
Interest income $89,564
 $87,014
 $1,351
 $1,199
 $
Interest expense 32,359
 30,407
 1,254
 698
 
Net income 33,779
 33,184
 269
 326
 
Total assets as of December 31, 2017 1,583,661
 1,517,021
 389
 66,251
 
For the purposes of the table above, any expenses not associated with a specific segment have been allocated to the business segments using a percentage derived by using the sum of commercial mortgage loans originated during the year as the denominator and commercial mortgage loans, held for investment net of allowance and commercial mortgage loans, held-for-sale, measured at fair value as numerator.
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BENEFIT STREET PARTNERS REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
Note 17 - Income Taxes
The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a year, it will not be subject to U.S. federal income tax to the extent of the income that it distributes. However, even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on income in addition to U.S. federal income and excise taxes on its undistributed income. The Company, through its TRS, is indirectly subject to U.S. federal, state and local income taxes. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but is instead taxed as a C corporation. For financial reporting purposes, the TRS is consolidated and a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. Total income tax expense (benefit) for the yearyears ended December 31, 2020, December 31, 2019 and December 31, 2018 and December 31, 2017 were $(2.1) million, $4.5 million and $0.1 million, and $0.2 million, respectively.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2019

The Company uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken in a tax return. The Company has assessed its tax positions for all open tax years beginning with December 31, 20152017 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes.
Components of the provision for income taxes consist of the following (dollars in thousands):
 Years Ended December 31,
 2019 2018 2017
Current expense (benefit)     
U.S. Federal$4,076
 $68
 $140
State and local397
 12
 61
Total current expense (benefit)4,473
 80
 201
Deferred expense (benefit)     
U.S. Federal$10
 $(1) $18
State and local
 
 6
Total deferred expense (benefit)10
 (1) 24
Provision for income tax expense (benefit)$4,483
 $79
 $225
Year Ended December 31,
202020192018
Current expense/(benefit)
U.S. Federal$(2,086)$4,076 $68 
State and local370 397 12 
  Total current expense/(benefit)$(1,716)$4,473 $80 
Deferred expense/(benefit)
U.S. Federal$$10 $(1)
State and local(346)
  Total deferred expense/(benefit)$(346)$10 $(1)
Provision for income tax expense/(benefit)$(2,062)$4,483 $79 
The tax characteristiccharacteristics of $1.44the $1.30 distributions per common share declared during 20192020 was $1.20$1.24 ordinary income and $0.24 return of capital.$0.06 capital gain. Of the $1.20$1.24 of ordinary income, $1.20$1.24 represents the amount of the ordinary dividend that may be eligible for the 20% deduction applicable to qualified REIT dividends under Internal Revenue Code Section 199A. The tax characteristics of $430.88the $390.48 distributions per share of Series A Preferred stockStock and Series C Preferred Stock declared during 20192020 was all$370.93 ordinary income.income and $19.55 capital gain. Of the $430.88$370.93 of ordinary income, $430.88 represents the amount of the ordinary dividend that may be eligible for the 20% deduction applicable to qualified REIT dividends under Section 199A. The tax characteristics of $35.41 per share of Series C Preferred stock declared during 2019 was all ordinary income. Of the $35.41 of ordinary income, $35.41$370.93 represents the amount of the ordinary dividend that may be eligible for the 20% deduction applicable to qualified REIT dividends under Section 199A. The tax characteristics of the $1.44 distributions per common share declared during 20182019 was $1.43$1.20 ordinary income and $0.01$0.24 return of capital. The tax characteristics of the $216.03$430.88 distributions per share of Series A Preferred stockStock declared during 20182019 was all ordinary income. The tax characteristics of the $35.41 distributions per share of Series C Preferred Stock declared during 2019 was all ordinary income.
The Company utilizes the TRS to reduce the impact of the prohibited transaction tax and to avoid penalty for the holding of assets not qualifying as real estate assets for purposes of the REIT asset tests. Any income associated with a TRS is fully taxable because the TRS is subject to federal and state income taxes as a domestic C corporation based upon its net income.
Enacted on December 22, 2017,On March 27, 2020, the recently passed Tax CutsCoronavirus Aid, Relief, and JobsEconomic Security Act ("TCJA") made many significant changes(CARES Act) was enacted in response to the U.S. federalCOVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income tax laws applicable to businesses and their owners, including REITs and their stockholders, and may lessen the relative competitive advantage of operating as a REIT rather than as a C corporation. Pursuant to this legislation, as of January 1, 2018, (1) the federal income tax rate applicable to corporations is reduced to 21%, (2) the highest marginal individual income tax rate is reduced to 37% (throughfor taxable years endingbeginning before 2021. In addition, the CARES Act allows NOLs incurred in 2025), (3)2018, 2019, and 2020 to be carried back to each of the corporate alternative minimum taxfive preceding taxable years to generate a refund of previously paid income taxes. The Company is repealed,currently evaluating the impact of the CARES Act, and (4)expects to fully utilize the backup withholding rate for U.S. stockholders is reduced to 24%. Generally,current year NOL under the new interest expense limitation rules, the Company’s business interest expense deduction cannot exceed the sum of business interest income, 30% of adjusted taxable income (cannot be less than zero), and any floor plan financing interest expense for the taxable year. The Company completed its assessmentNOL carryback provision of the income tax provisions of the sections of the TCJA that were effective for the year ended December 31, 2019, and there were no material amounts recorded.

CARES Act.
F-44
F-49

Table of Contents
BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 20192020

Note 18 - Summary of Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2020, 2019 2018 and 20172018 (dollars in thousands, except per share data):
March 31June 30September 30December 31
March 31 June 30 September 30 December 31
20202020
Net interest incomeNet interest income$23,362 $28,106 $29,301 $32,547 
Net incomeNet income(7,400)7,814 21,497 32,835 
Net income applicable to common stockNet income applicable to common stock(11,915)4,359 16,739 25,624 
Basic net income per shareBasic net income per share$(0.27)$0.10 $0.38 $0.58 
Diluted net income per shareDiluted net income per share$(0.27)$0.10 $0.38 $0.58 
Basic weighted average shares outstandingBasic weighted average shares outstanding44,263,334 44,376,437 44,405,196 44,492,325 
Diluted weighted average shares outstandingDiluted weighted average shares outstanding44,274,852 44,389,380 44,421,084 44,508,213 
2019       2019
Net interest income$26,145
 $22,356
 $29,349
 $27,031
Net interest income$26,145 $22,356 $29,349 $27,031 
Net incomeNet income19,890 14,526 25,913 23,595 
Net income applicable to common stock16,108
 11,036
 20,460
 19,310
Net income applicable to common stock16,108 11,036 20,460 19,310 
Net income19,890
 14,526
 25,913
 23,595
Basic net income per share$0.40
 $0.27
 $0.48
 $0.44
Basic net income per share$0.40 $0.27 $0.48 $0.44 
Diluted net income per share$0.40
 $0.27
 $0.48
 $0.44
Diluted net income per share$0.40 $0.27 $0.48 $0.44 
Basic weighted average shares outstanding39,798,215
 41,226,805
 42,795,038
 43,549,406
Basic weighted average shares outstanding39,798,215 41,226,805 42,795,038 43,549,406 
Diluted weighted average shares outstanding39,811,304
 41,239,548
 42,807,773
 43,560,937
Diluted weighted average shares outstanding39,811,304 41,239,548 42,807,773 43,560,937 
2018       2018
Net interest income$10,734
 $19,738
 $25,823
 $25,993
Net interest income$10,734 $19,738 $25,823 $25,993 
Net incomeNet income5,296 12,102 19,000 16,427 
Net income applicable to common stock5,296
 12,086
 17,745
 14,054
Net income applicable to common stock5,296 12,086 17,745 14,054 
Net income5,296
 12,102
 19,000
 16,427
Basic net income per share$0.17
 $0.38
 $0.49
 $0.37
Basic net income per share$0.17 $0.38 $0.49 $0.37 
Diluted net income per share$0.17
 $0.38
 $0.49
 $0.37
Diluted net income per share$0.17 $0.38 $0.49 $0.37 
Basic weighted average shares outstanding31,670,518
 31,762,199
 35,468,648
 38,088,364
Basic weighted average shares outstanding31,670,518 31,762,199 35,468,648 38,088,364 
Diluted weighted average shares outstanding31,684,832
 31,820,527
 38,942,428
 44,504,418
Diluted weighted average shares outstanding31,684,832 31,820,527 38,942,428 44,504,418 
2017       
Net interest income$13,451
 $13,126
 $13,350
 $17,278
Net income applicable to common stock6,049
 6,281
 6,975
 14,474
Net income6,049
 6,281
 6,975
 14,474
Basic net income per share$0.19
 $0.20
 $0.22
 $0.46
Diluted net income per share$0.19
 $0.20
 $0.22
 $0.46
Basic weighted average shares outstanding31,740,256
 31,850,897
 31,741,679
 34,754,734
Diluted weighted average shares outstanding31,750,045
 31,860,444
 31,756,503
 31,769,048
Basic and diluted earnings per share are computed independently based on the weighted-average shares of common stock and restricted shares outstanding for each period. Accordingly, the sum of the quarterly earnings per share amounts may not agree to the total for the year.
Note 19 - Subsequent Events
The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K.
Private Placements
F-50
Subsequent to December 31, 2019, the Company sold an additional $10.9 million

Table of common stock at $16.71 per share and $0.1 million of Series A Preferred Stock at $5,000 per share plus accrued dividends to accredited investors.Contents





BENEFIT STREET PARTNERS REALTY TRUST, INC.

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 20192020
(Dollars in thousands)

DescriptionProperty TypeFace AmountCarrying AmountInterest
Rate
 Payment
Terms
Maturity Date
Senior Debt 1Industrial$33,655 $33,655 1 month LIBOR + 4.00% Interest Only11/9/2021
Senior Debt 2Mixed Use12,839 12,839 1 month LIBOR + 5.00% Interest Only4/9/2021
Senior Debt 3Office14,034 14,034 1 month LIBOR + 4.45% Interest Only9/9/2021
Senior Debt 4Office8,391 8,391 1 month LIBOR +6.00% Amortizing Balloon10/9/2021
Senior Debt 5Multifamily37,812 37,812 1 month LIBOR + 3.35%Amortizing Balloon1/9/2022
Senior Debt 6Office26,811 26,811 1 month LIBOR + 4.15%Amortizing Balloon10/9/2021
Senior Debt 7Hospitality10,400 10,400 1 month LIBOR + 6.25% Interest Only5/9/2022
Senior Debt 8Hospitality5,894 5,894 1 month LIBOR + 3.50%Amortizing Balloon12/9/2021
Senior Debt 9Hospitality57,075 57,075 1 month LIBOR + 5.19% Interest Only6/9/2019
Senior Debt 10Multifamily77,945 77,701 1 month LIBOR + 4.50% Interest Only12/31/2021
Senior Debt 11Hospitality10,250 10,247 1 month LIBOR + 5.25% Interest Only2/9/2021
Senior Debt 12Hospitality23,000 22,998 1 month LIBOR + 6.00% Interest Only1/9/2021
Senior Debt 13Office23,726 23,726 1 month LIBOR + 5.15% Interest Only2/9/2021
Senior Debt 14Multifamily41,826 41,811 1 month LIBOR + 3.70% Interest Only3/9/2021
Senior Debt 15Hospitality28,272 28,255 1 month LIBOR + 4.00% Interest Only4/9/2021
Senior Debt 16Hospitality22,700 22,688 1 month LIBOR + 4.40% Interest Only4/9/2021
Senior Debt 17Multifamily35,886 35,886 1 month LIBOR + 3.00% Interest Only5/9/2021
Senior Debt 18Self Storage3,851 3,849 1 month LIBOR + 4.05% Interest Only5/9/2021
Senior Debt 19Self Storage6,496 6,492 1 month LIBOR + 4.05% Interest Only5/9/2021
Senior Debt 20Self Storage7,606 7,600 1 month LIBOR + 4.05% Interest Only5/9/2021
Senior Debt 21Self Storage2,400 2,398 1 month LIBOR + 4.05% Interest Only6/9/2021
Senior Debt 22Self Storage6,310 6,305 1 month LIBOR + 5.05% Interest Only6/9/2021
Senior Debt 23Hospitality22,355 22,332 1 month LIBOR + 3.50% Interest Only3/9/2023
Senior Debt 24Mixed Use59,451 59,451 1 month LIBOR + 4.87% Interest Only7/9/2021
Senior Debt 25Office21,100 21,100 1 month LIBOR + 3.75% Interest Only9/9/2021
Senior Debt 26Self Storage6,299 6,299 1 month LIBOR + 6.00% Interest Only9/9/2021
Senior Debt 27Office16,342 16,342 1 month LIBOR + 3.40%Amortizing Balloon9/9/2021
Senior Debt 28Retail29,500 29,426 6.25% Interest Only9/9/2023
Senior Debt 29Self Storage11,966 11,966 1 month LIBOR + 5.50% Interest Only10/9/2021
Senior Debt 30Multifamily16,172 16,172 1 month LIBOR + 3.15% Interest Only11/9/2021
Senior Debt 31Multifamily22,417 22,417 1 month LIBOR + 3.40% Interest Only11/9/2021
Senior Debt 32Multifamily29,868 29,868 1 month LIBOR + 3.35% Interest Only11/9/2021
Senior Debt 33Land16,400 16,400 1 month LIBOR + 6.00% Interest Only12/11/2021
Senior Debt 34Hospitality8,523 8,507 1 month LIBOR + 4.80%Amortizing Balloon1/9/2022
Senior Debt 35Industrial14,160 14,159 1 month LIBOR + 3.95% Interest Only1/9/2021
Senior Debt 36Multifamily48,500 48,498 1 month LIBOR + 3.75% Interest Only1/9/2021
Senior Debt 37Multifamily23,295 23,196 1 month LIBOR + 5.70% Interest Only8/9/2021
Senior Debt 38Office7,200 7,198 1 month LIBOR + 3.90% Interest Only2/9/2021
Senior Debt 39Manufactured Housing8,893 8,858 1 month LIBOR + 4.40% Interest Only3/9/2022
Senior Debt 40Hospitality14,000 13,985 1 month LIBOR + 4.47% Interest Only4/9/2021
Senior Debt 41Retail14,250 14,260 1 month LIBOR + 3.95% Interest Only4/9/2021
Senior Debt 42Hospitality21,000 20,981 1 month LIBOR + 4.14% Interest Only5/9/2021
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Table of Contents
Description Property Type Face Amount Carrying Amount 
Interest
Rate
 
 Payment
Terms
 Maturity Date
Senior Debt 1 Retail $9,450
 $9,450
  1 month LIBOR + 4.50%  Interest Only 9/9/2020
Senior Debt 2 Office 10,699
 10,699
  1 month LIBOR + 4.65%  Interest Only 6/9/2020
Senior Debt 3 Industrial 33,655
 33,655
  1 month LIBOR + 4.00%  Interest Only 11/9/2020
Senior Debt 4 Mixed Use 12,952
 12,952
  1 month LIBOR + 5.00%  Interest Only 4/9/2020
Senior Debt 5 Office 14,080
 14,066
  1 month LIBOR + 4.45%  Interest Only 9/9/2020
Senior Debt 6 Office 10,533
 10,533
  1 month LIBOR + 6.00%  Amortizing Balloon 10/9/2020
Senior Debt 7 Multifamily 38,248
 38,249
  1 month LIBOR + 3.35%  Amortizing Balloon 1/9/2022
Senior Debt 8 Office 27,662
 27,662
  1 month LIBOR + 4.15%  Amortizing Balloon 10/9/2020
Senior Debt 9 Multifamily 34,875
 34,875
  1 month LIBOR + 3.75%  Interest Only 11/9/2020
Senior Debt 10 Hospitality 10,599
 10,569
  1 month LIBOR + 5.00%  Interest Only 11/9/2020
Senior Debt 11 Hospitality 5,930
 5,930
  1 month LIBOR + 3.50%  Amortizing Balloon 12/9/2021
Senior Debt 12 Multifamily 18,985
 18,983
  1 month LIBOR + 3.62%  Interest Only 4/9/2020
Senior Debt 13 Hospitality 57,075
 57,075
  1 month LIBOR + 5.19%  Interest Only 6/9/2019
Senior Debt 14 Multifamily 58,590
 58,117
  1 month LIBOR + 4.50%  Interest Only 12/31/2021
Senior Debt 15 Hospitality 10,250
 10,221
  1 month LIBOR + 5.25%  Interest Only 2/9/2021
Senior Debt 16 Hospitality 23,000
 22,890
  1 month LIBOR + 4.41%  Interest Only 1/9/2021
Senior Debt 17 Multifamily 19,280
 19,273
  1 month LIBOR + 3.60%  Interest Only 2/9/2020
Senior Debt 18 Multifamily 12,155
 12,151
  1 month LIBOR + 3.30%  Interest Only 2/9/2020
Senior Debt 19 Office 24,426
 24,429
  1 month LIBOR + 4.65%  Interest Only 2/9/2020
Senior Debt 20 Hospitality 21,000
 20,951
  1 month LIBOR + 4.00%  Interest Only 2/9/2021
Senior Debt 21 Office 20,340
 20,326
  1 month LIBOR + 3.70%  Interest Only 3/9/2020
Senior Debt 22 Multifamily 20,741
 20,671
  1 month LIBOR + 4.25%  Interest Only 3/9/2021
Senior Debt 23 Multifamily 42,000
 41,907
  1 month LIBOR + 3.70%  Interest Only 3/9/2021
Senior Debt 24 Hospitality 19,975
 19,958
  1 month LIBOR + 4.95%  Interest Only 4/9/2020
Senior Debt 25 Hospitality 27,541
 27,460
  1 month LIBOR + 4.00%  Interest Only 4/9/2021
Senior Debt 26 Hospitality 21,495
 21,438
  1 month LIBOR + 4.40%  Interest Only 4/9/2021
Senior Debt 27 Multifamily 33,663
 33,624
  1 month LIBOR + 3.00%  Interest Only 5/9/2021
Senior Debt 28 Self Storage 4,120
 4,110
  1 month LIBOR + 4.05%  Interest Only 5/9/2021
Senior Debt 29 Self Storage 6,496
 6,480
  1 month LIBOR + 4.05%  Interest Only 5/9/2021
Senior Debt 30 Self Storage 7,606
 7,585
  1 month LIBOR + 5.05%  Interest Only 5/9/2021
Senior Debt 31 Multifamily 90,499
 90,322
  1 month LIBOR + 3.50%  Interest Only 6/9/2020
Senior Debt 32 Self Storage 2,400
 2,392
  1 month LIBOR + 4.05%  Interest Only 6/9/2021
Senior Debt 33 Self Storage 6,310
 6,293
  1 month LIBOR + 5.05%  Interest Only 6/9/2021
Senior Debt 34 Multifamily 22,775
 22,698
  1 month LIBOR + 3.15%  Interest Only 6/9/2021
Senior Debt 35 Multifamily 11,590
 11,572
  1 month LIBOR + 3.75%  Interest Only 7/9/2020
Senior Debt 36 Multifamily 66,000
 65,768
  1 month LIBOR + 3.75%  Interest Only 8/9/2020
Senior Debt 37 Multifamily 17,250
 17,222
  1 month LIBOR + 3.95%  Interest Only 7/9/2020
Senior Debt 38 Hospitality 22,355
 22,291
  1 month LIBOR + 4.00%  Interest Only 7/9/2021
Senior Debt 39 Hospitality 34,000
 33,939
  1 month LIBOR + 4.50%  Interest Only 8/9/2020
Senior Debt 40 Mixed Use 45,856
 45,874
  1 month LIBOR + 4.87%  Interest Only 7/9/2020

DescriptionProperty TypeFace AmountCarrying AmountInterest
Rate
 Payment
Terms
Maturity Date
Senior Debt 43Multifamily24,711 24,669 1 month LIBOR + 3.10% Interest Only5/9/2022
Senior Debt 44Multifamily37,643 37,581 1 month LIBOR + 3.10% Interest Only5/9/2022
Senior Debt 45Office42,631 42,519 1 month LIBOR + 3.50% Interest Only5/9/2022
Senior Debt 46Retail8,500 8,500 1 month LIBOR + 7.50% Interest Only12/9/2021
Senior Debt 47Hospitality10,580 10,547 1 month LIBOR + 4.50% Interest Only6/9/2022
Senior Debt 48Multifamily18,100 18,097 1 month LIBOR + 3.40% Interest Only6/9/2021
Senior Debt 49Hospitality19,900 19,850 1 month LIBOR + 4.15% Interest Only6/9/2022
Senior Debt 50Multifamily18,656 18,604 1 month LIBOR + 3.10% Interest Only6/9/2022
Senior Debt 51Office34,400 34,232 1 month LIBOR + 3.90% Interest Only6/9/2022
Senior Debt 52Hospitality20,930 20,852 1 month LIBOR + 3.75% Interest Only8/9/2022
Senior Debt 53Hospitality15,500 15,452 1 month LIBOR + 4.00% Interest Only10/9/2022
Senior Debt 54Hospitality5,250 5,242 1 month LIBOR + 4.25% Interest Only7/9/2021
Senior Debt 55Hospitality12,750 12,708 1 month LIBOR + 4.45% Interest Only8/9/2022
Senior Debt 56Hospitality9,545 9,525 1 month LIBOR + 4.50% Interest Only8/9/2021
Senior Debt 57Retail9,400 9,371 1 month LIBOR + 4.20% Interest Only9/9/2022
Senior Debt 58Manufactured Housing12,200 12,162 1 month LIBOR + 3.65% Interest Only10/9/2022
Senior Debt 59Manufactured Housing24,100 24,029 1 month LIBOR + 3.65% Interest Only9/9/2022
Senior Debt 60Multifamily23,149 23,103 1 month LIBOR + 2.65% Interest Only9/9/2021
Senior Debt 61Office29,750 29,681 1 month LIBOR + 3.35% Interest Only9/9/2022
Senior Debt 62Hospitality34,484 34,407 1 month LIBOR + 3.99%Amortizing Balloon11/9/2021
Senior Debt 63Multifamily12,839 12,787 1 month LIBOR + 2.65% Interest Only11/9/2022
Senior Debt 64Multifamily37,021 36,924 1 month LIBOR + 2.75% Interest Only11/9/2023
Senior Debt 65Industrial53,500 53,297 1 month LIBOR + 3.75% Interest Only12/9/2021
Senior Debt 66Office21,825 21,728 1 month LIBOR + 3.50% Interest Only12/9/2022
Senior Debt 67Hospitality7,100 7,076 1 month LIBOR + 4.00% Interest Only12/9/2022
Senior Debt 68Industrial22,230 22,133 1 month LIBOR + 3.55% Interest Only12/9/2023
Senior Debt 69Multifamily21,083 21,017 1 month LIBOR + 2.75% Interest Only12/9/2022
Senior Debt 70Multifamily27,087 26,989 1 month LIBOR + 3.15% Interest Only12/9/2022
Senior Debt 71Multifamily26,130 26,069 1 month LIBOR + 2.70% Interest Only12/9/2022
Senior Debt 72Multifamily7,150 7,119 1 month LIBOR + 4.75% Interest Only12/9/2021
Senior Debt 73Multifamily25,000 24,935 1 month LIBOR + 3.00% Interest Only1/9/2022
Senior Debt 74Office25,500 25,351 1 month LIBOR + 4.35% Interest Only1/9/2024
Senior Debt 75Multifamily14,181 14,141 1 month LIBOR + 3.10% Interest Only2/9/2023
Senior Debt 76Office48,276 47,862 1 month LIBOR + 3.70% Interest Only2/9/2023
Senior Debt 77Industrial25,350 25,315 1 month LIBOR + 3.50% Interest Only5/9/2021
Senior Debt 78Multifamily11,800 11,757 1 month LIBOR + 3.15% Interest Only8/9/2022
Senior Debt 79Office27,598 27,491 1 month LIBOR + 2.70% Interest Only2/9/2023
Senior Debt 80Multifamily75,100 75,260 1 month LIBOR + 4.35% Interest Only8/9/2021
Senior Debt 81Manufactured Housing1,385 1,385 5.50% Interest Only5/9/2025
Senior Debt 82Industrial14,650 14,606 1 month LIBOR + 6.00% Interest Only11/9/2021
Senior Debt 83Multifamily7,149 7,123 1 month LIBOR + 4.75% Interest Only5/9/2022
Senior Debt 84Multifamily6,764 6,731 1 month LIBOR + 4.90% Interest Only7/9/2023
Senior Debt 85Multifamily46,000 45,797 1 month LIBOR + 4.75% Interest Only7/9/2023
Senior Debt 86Multifamily5,550 5,530 1 month LIBOR + 6.87% Interest Only1/9/2022
Senior Debt 87Industrial16,400 16,312 1 month LIBOR + 6.25% Interest Only7/9/2023
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Table of Contents
Description Property Type Face Amount Carrying Amount 
Interest
Rate
 
 Payment
Terms
 Maturity Date
Senior Debt 41 Multifamily 12,007
 11,994
  1 month LIBOR + 3.50%  Interest Only 8/9/2020
Senior Debt 42 Multifamily 18,000
 17,965
  1 month LIBOR + 3.30%  Interest Only 9/9/2020
Senior Debt 43 Office 20,900
 20,855
  1 month LIBOR + 3.75%  Interest Only 9/9/2020
Senior Debt 44 Office 50,000
 49,984
  1 month LIBOR + 4.23%  Interest Only 3/9/2020
Senior Debt 45 Self Storage 6,600
 6,592
  1 month LIBOR + 6.00%  Interest Only 9/9/2020
Senior Debt 46 Multifamily 7,250
 7,237
  1 month LIBOR + 4.00%  Interest Only 9/9/2020
Senior Debt 47 Multifamily 115,069
 114,809
  1 month LIBOR + 3.10%  Interest Only 9/9/2020
Senior Debt 48 Office 13,298
 13,267
  1 month LIBOR + 3.40%  Amortizing Balloon 9/9/2020
Senior Debt 49 Retail 29,500
 29,401
 6.25%  Interest Only 9/9/2023
Senior Debt 50 Multifamily 25,500
 25,505
  1 month LIBOR + 3.50%  Interest Only 4/9/2020
Senior Debt 51 Self Storage 12,125
 12,088
  1 month LIBOR + 5.50%  Interest Only 10/9/2020
Senior Debt 52 Office 37,550
 37,464
  1 month LIBOR + 3.74%  Interest Only 10/9/2020
Senior Debt 53 Multifamily 15,045
 15,016
  1 month LIBOR + 3.15%  Interest Only 11/9/2020
Senior Debt 54 Multifamily 21,276
 21,227
  1 month LIBOR + 3.40%  Interest Only 11/9/2020
Senior Debt 55 Multifamily 29,900
 29,834
  1 month LIBOR + 3.35%  Interest Only 11/9/2020
Senior Debt 56 Multifamily 38,928
 38,821
  1 month LIBOR + 3.10%  Interest Only 12/9/2020
Senior Debt 57 Self Storage 17,400
 17,358
  1 month LIBOR + 4.00%  Interest Only 11/9/2020
Senior Debt 58 Multifamily 10,020
 9,986
  1 month LIBOR + 3.45%  Interest Only 12/9/2021
Senior Debt 59 Multifamily 73,620
 73,322
  1 month LIBOR + 3.45%  Interest Only 12/9/2021
Senior Debt 60 Land 16,400
 16,359
  1 month LIBOR + 6.00%  Interest Only 12/11/2020
Senior Debt 61 Hospitality 8,628
 8,597
  1 month LIBOR + 4.80%  Amortizing Balloon 1/9/2022
Senior Debt 62 Retail 14,500
 14,434
  1 month LIBOR + 4.75%  Interest Only 1/9/2021
Senior Debt 63 Industrial 11,358
 11,312
  1 month LIBOR + 3.95%  Interest Only 1/9/2021
Senior Debt 64 Multifamily 87,700
 88,002
  1 month LIBOR + 2.99%  Interest Only 1/9/2022
Senior Debt 65 Multifamily 48,500
 48,388
  1 month LIBOR + 3.75%  Interest Only 1/9/2021
Senior Debt 66 Multifamily 31,906
 31,844
  1 month LIBOR + 3.25%  Interest Only 2/9/2021
Senior Debt 67 Multifamily 52,031
 51,773
  1 month LIBOR + 5.20%  Interest Only 8/9/2021
Senior Debt 68 Office 7,200
 7,179
  1 month LIBOR + 3.90%  Interest Only 2/9/2021
Senior Debt 69 Hospitality 10,000
 9,976
  1 month LIBOR + 4.95%  Interest Only 9/9/2020
Senior Debt 70 Manufactured Housing 8,356
 8,307
  1 month LIBOR + 3.90%  Interest Only 3/9/2022
Senior Debt 71 Self Storage 4,710
 4,703
  1 month LIBOR + 5.00%  Interest Only 4/9/2020
Senior Debt 72 Hospitality 7,620
 7,552
  1 month LIBOR + 3.44%  Interest Only 4/9/2021
Senior Debt 73 Retail 14,250
 14,294
  1 month LIBOR + 3.95%  Interest Only 4/9/2021
Senior Debt 74 Hospitality 21,000
 20,928
  1 month LIBOR + 4.14%  Interest Only 5/9/2021
Senior Debt 75 Office 21,850
 21,848
  1 month LIBOR + 4.25%  Interest Only 7/9/2020
Senior Debt 76 Multifamily 23,750
 23,678
  1 month LIBOR + 3.10%  Interest Only 5/9/2022
Senior Debt 77 Multifamily 36,250
 36,145
  1 month LIBOR + 3.10%  Interest Only 5/9/2022
Senior Debt 78 Retail 13,400
 13,360
  1 month LIBOR + 4.00%  Interest Only 11/9/2020
Senior Debt 79 Office 41,293
 41,104
  1 month LIBOR + 3.50%  Interest Only 5/9/2022
Senior Debt 80 Retail 8,500
 8,473
  1 month LIBOR + 5.00%  Interest Only 12/9/2020
Senior Debt 81 Hospitality 8,180
 8,126
  1 month LIBOR + 4.50%  Interest Only 6/9/2022
Senior Debt 82 Multifamily 18,100
 18,091
  1 month LIBOR + 3.40%  Interest Only 6/9/2021
Senior Debt 83 Multifamily 28,250
 28,236
  1 month LIBOR + 3.40%  Interest Only 6/9/2021
Senior Debt 84 Hospitality 19,900
 19,817
  1 month LIBOR + 3.48%  Interest Only 6/9/2022
Senior Debt 85 Multifamily 18,553
 18,469
  1 month LIBOR + 3.10%  Interest Only 6/9/2022

DescriptionProperty TypeFace AmountCarrying AmountInterest
Rate
 Payment
Terms
Maturity Date
Senior Debt 88Multifamily14,505 14,425 1 month LIBOR + 4.75% Interest Only7/9/2023
Senior Debt 89Multifamily23,438 23,337 1 month LIBOR + 4.65% Interest Only7/9/2023
Senior Debt 90Multifamily4,300 4,281 1 month LIBOR + 5.50% Interest Only2/9/2023
Senior Debt 91Manufactured Housing7,680 7,645 1 month LIBOR + 4.50% Interest Only8/9/2023
Senior Debt 92Mixed Use30,465 30,246 1 month LIBOR + 5.15% Interest Only8/9/2023
Senior Debt 93Multifamily3,140 3,126 1 month LIBOR + 6.25% Interest Only8/9/2022
Senior Debt 94Industrial24,657 24,376 1 month LIBOR + 4.60% Interest Only9/6/2022
Senior Debt 95Multifamily1 month LIBOR + 5.25% Interest Only7/1/2022
Senior Debt 96Hospitality27,000 26,878 1 month LIBOR + 6.50% Interest Only9/9/2023
Senior Debt 97Multifamily2,465 2,453 1 month LIBOR + 5.75% Interest Only9/9/2022
Senior Debt 98Multifamily50,000 49,789 1 month LIBOR + 6.69% Interest Only9/9/2022
Senior Debt 99Self Storage29,895 29,759 1 month LIBOR + 5.00% Interest Only9/9/2023
Senior Debt 100Multifamily11,622 11,545 1 month LIBOR + 4.75% Interest Only9/9/2022
Senior Debt 101Manufactured Housing3,400 3,384 1 month LIBOR + 5.00% Interest Only9/9/2022
Senior Debt 102Multifamily27,550 27,431 1 month LIBOR + 5.75% Interest Only9/9/2022
Senior Debt 103Multifamily76,000 75,649 1 month LIBOR + 4.10% Interest Only10/9/2023
Senior Debt 104Multifamily58,000 57,732 1 month LIBOR + 5.25% Interest Only10/9/2023
Senior Debt 105Manufactured Housing5,020 4,996 1 month LIBOR + 5.25% Interest Only10/9/2023
Senior Debt 106Office19,003 18,909 1 month LIBOR + 4.50% Interest Only10/9/2023
Senior Debt 107Office69,675 69,339 5.15% Interest Only10/9/2025
Senior Debt 108Office30,900 30,670 1 month LIBOR + 5.20% Interest Only10/9/2023
Senior Debt 109Multifamily10,945 10,895 1 month LIBOR + 7.04% Interest Only5/9/2022
Senior Debt 110Self Storage11,600 11,546 1 month LIBOR + 4.76% Interest Only11/9/2022
Senior Debt 111Industrial24,552 24,426 1 month LIBOR + 4.35% Interest Only11/9/2022
Senior Debt 112Manufactured Housing5,000 4,929 1 month LIBOR + 5.90% Interest Only5/9/2023
Senior Debt 113Office12,750 12,682 1 month LIBOR + 5.00% Interest Only11/9/2023
Senior Debt 114Multifamily40,937 40,682 1 month LIBOR + 4.35% Interest Only11/9/2023
Senior Debt 115Multifamily36,200 35,997 1 month LIBOR + 4.45% Interest Only11/9/2023
Senior Debt 116Multifamily8,250 8,200 1 month LIBOR + 5.50% Interest Only11/9/2023
Senior Debt 117Retail11,963 11,833 1 month LIBOR + 4.87% Interest Only5/9/2022
Senior Debt 118Manufactured Housing3,585 3,567 1 month LIBOR + 5.40% Interest Only12/9/2022
Senior Debt 119Multifamily5,730 5,701 1 month LIBOR + 5.00% Interest Only6/9/2023
Senior Debt 120Multifamily18,800 18,613 1 month LIBOR + 4.00% Interest Only12/9/2024
Senior Debt 121Industrial14,250 14,160 1 month LIBOR + 4.50% Interest Only12/9/2023
Senior Debt 122Office11,550 11,479 1 month LIBOR + 5.50% Interest Only1/9/2024
Senior Debt 123Multifamily21,000 20,884 1 month LIBOR + 4.60% Interest Only1/9/2024
Senior Debt 124Office26,000 25,869 1 month LIBOR + 5.00% Interest Only1/9/2023
Senior Debt 125Hospitality17,401 17,243 5.75% Amortizing Balloon10/6/2021
Mezzanine Loan 1Multifamily3,480 3,488 9.50% Interest Only7/1/2024
Mezzanine Loan 2Retail3,500 3,500 10.00% Interest Only2/6/2029
Mezzanine Loan 3Multifamily6,500 6,473 1 month LIBOR + 10.25% Interest Only9/9/2022
Mezzanine Loan 4Retail1,438 1,444 1 month LIBOR + 10.75% Interest Only5/9/2022
Mezzanine Loan 5Multifamily1,000 1,005 11.00% Interest Only11/6/2028
$2,722,863 $2,714,734 
Description Property Type Face Amount Carrying Amount 
Interest
Rate
 
 Payment
Terms
 Maturity Date
Senior Debt 86 Office 25,900
 25,623
  1 month LIBOR + 3.77%  Interest Only 6/9/2022
Senior Debt 87 Hospitality 16,527
 16,404
  1 month LIBOR + 3.75%  Interest Only 8/9/2022
Senior Debt 88 Hospitality 15,500
 15,428
  1 month LIBOR + 4.00%  Interest Only 10/9/2022
Senior Debt 89 Hospitality 5,250
 5,229
  1 month LIBOR + 4.25%  Interest Only 7/9/2021
Senior Debt 90 Hospitality 11,977
 11,911
  1 month LIBOR + 4.45%  Interest Only 8/9/2022
Senior Debt 91 Multifamily 20,900
 20,899
  1 month LIBOR + 3.50%  Interest Only 8/9/2020
Senior Debt 92 Hospitality 9,000
 8,948
  1 month LIBOR + 4.50%  Interest Only 8/9/2021
Senior Debt 93 Multifamily 42,900
 42,830
  1 month LIBOR + 2.80%  Interest Only 8/9/2021
Senior Debt 94 Retail 9,400
 9,356
  1 month LIBOR + 4.20%  Interest Only 9/9/2022
Senior Debt 95 Manufactured Housing 12,200
 12,142
  1 month LIBOR + 3.65%  Interest Only 10/9/2022
Senior Debt 96 Manufactured Housing 24,100
 23,989
  1 month LIBOR + 3.65%  Interest Only 9/9/2022
Senior Debt 97 Multifamily 4,452
 3,906
 5.53%  Amortizing Balloon 2/6/2027
Senior Debt 98 Multifamily 23,115
 23,005
  1 month LIBOR + 2.65%  Interest Only 9/9/2021
Senior Debt 99 Office 29,750
 29,643
  1 month LIBOR + 3.35%  Interest Only 9/9/2022
Senior Debt 100 Hospitality 34,914
 34,752
  1 month LIBOR + 3.99%  Amortizing Balloon 11/9/2021
Senior Debt 101 Multifamily 11,490
 11,413
  1 month LIBOR + 2.65%  Interest Only 11/9/2022
Senior Debt 102 Multifamily 34,733
 34,604
  1 month LIBOR + 2.75%  Interest Only 11/9/2023
Senior Debt 103 Industrial 51,500
 51,093
  1 month LIBOR + 3.75%  Interest Only 12/9/2021
Senior Debt 104 Office 21,825
 21,682
  1 month LIBOR + 3.50%  Interest Only 12/9/2022
Senior Debt 105 Hospitality 7,100
 7,064
  1 month LIBOR + 4.00%  Interest Only 12/9/2022
Senior Debt 106 Industrial 22,230
 22,104
  1 month LIBOR + 3.55%  Interest Only 12/9/2023
Senior Debt 107 Multifamily 19,575
 19,477
  1 month LIBOR + 2.75%  Interest Only 12/9/2022
Senior Debt 108 Multifamily 16,100
 16,103
  1 month LIBOR + 3.75%  Interest Only 12/9/2020
Senior Debt 109 Multifamily 26,000
 25,854
  1 month LIBOR + 3.15%  Interest Only 12/9/2022
Senior Debt 110 Retail 9,120
 9,122
  1 month LIBOR + 5.25%  Interest Only 8/9/2020
Senior Debt 111 Multifamily 25,320
 25,230
  1 month LIBOR + 2.70%  Interest Only 12/9/2022
Senior Debt 112 Multifamily 7,150
 7,088
  1 month LIBOR + 4.75%  Interest Only 12/9/2022
Senior Debt 113 Multifamily 25,000
 24,874
  1 month LIBOR + 3.00%  Interest Only 1/7/2022
Senior Debt 114 Multifamily 8,550
 8,497
  1 month LIBOR + 2.80%  Interest Only 1/9/2023
Senior Debt 115 Office 27,500
 27,308
  1 month LIBOR + 5.50%  Interest Only 1/9/2024
Senior Debt 116 Hospitality 17,746
 17,367
 5.75%  Amortizing Balloon 10/6/2021
Mezzanine Loan 1 Multifamily 3,480
 3,490
 9.50%  Interest Only 7/1/2024
Mezzanine Loan 2 Office 9,966
 9,639
 10.00%  Amortizing Balloon 9/6/2024
Mezzanine Loan 3 Multifamily 22,800
 22,880
  1 month LIBOR + 8.01%  Interest Only 1/9/2022
Mezzanine Loan 4 Retail 3,500
 3,501
 10.00%  Interest Only 2/6/2029
Mezzanine Loan 5 Multifamily 1,100
 1,122
 11.01%  Interest Only 12/6/2028
Mezzanine Loan 6 Multifamily 1,000
 1,006
 11.00%  Interest Only 11/6/2028
    $2,771,299
 $2,762,963
      



F-48F-53