Table of ~~our common stock and thus the Advisor's interests may not be aligned with those of our stockholders.~~Contents

Although the Advisor has committed that the Advisor and/or its affiliates shall hold an equity investment in the Company of at least $10 million within a certain period, our Advisor does not currently own shares of our common stock. Since the Advisor receives significant fees annually that are not dependent on increases in the value of our common stock, the Advisor’s interests are not as aligned as an advisor that had a significant equity investment or that had a significant portion of annual fees tied to the value of our common stock.

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.

~~Our~~The Company's charter, with certain exceptions, authorizes ~~our~~the board of directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by ~~our~~the board of directors, no person or entity may own more than ~~9.8%~~7.9% in value of the aggregate of our outstanding shares of stock or more than ~~9.8%~~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.

~~Our charter permits our board~~Certain 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.

Our 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. Thus, our board of directorsMaryland law could authorize the issuance of preferred stock with terms and conditions that could have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Preferred stock 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 as~~or of impeding a ~~merger, tender offer or sale~~change in control under circumstances that otherwise could provide the holders of ~~all or substantially all our assets) that might provide a premium price for holders~~shares 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 for~~between 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 ~~the~~our then outstanding voting power of ~~the corporation’s outstanding voting stock;~~our shares or

an affiliate or associate of ~~the corporation~~ours 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 the~~our then outstanding ~~stock of~~voting shares) or an affiliate thereof for five years after the ~~corporation.~~

~~A person is not~~most 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 determined~~other shares controlled by the ~~board~~stockholder, entitle the stockholder to exercise one of ~~directors.~~

~~After~~three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the ~~five-year prohibition, any business combination between~~direct 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 recommended~~extent approved by ~~the board of directors of the corporation and approved~~our 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 of~~on the ~~corporation; and~~matter, 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.

~~Our~~Company's bylaws contain a provision exempting from the ~~Control Share Acquisition Act~~control 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.~~

We conduct, 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.

We expect 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.

We expect 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.

In 2011, the SEC solicited public comment on a wide range of issues relating to Section 3(c)(5)(C) of the Investment Company Act, including the nature of the assets that qualify for purposes of the exclusion and whether mortgage REITs should be regulated in a manner similar to investment companies. There can be no assurance that the laws and regulations governing the Investment Company Act status of REITs, including more specific or different guidance regarding these exclusions that may be published by the SEC or its staff, will not change in a manner that adversely affects our operations. In addition, we cannot assure you that the SEC or its staff will not take action that results in our, our operating partnerships or any of our subsidiaries’ failure to maintain an exception or exemption from the Investment Company Act.

We 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.

~~Our board~~

Table of ~~directors may change our investment policies without stockholder approval, which could alter the nature of our portfolio.~~Contents

Our charter requires that our independent directors review our investment policies at least annually to determine that the policies we are following are in the best interest of the stockholders. These 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.

~~Payment of fees to our Advisor and its affiliates reduces cash available for investment and distributions.~~

Our Advisor and its affiliates will perform services for us in connection with the offer and sale of the shares, the selection and acquisition of our investments, the servicing of our loans and the administration of our other commercial real estate-related investments. They are paid substantial fees for these services, which reduces the amount of cash available for investment in real estate debt and securities or distribution to stockholders.

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.

~~Our estimated per share NAV may significantly change if the appraised values of our investments materially change.~~

We expect 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.

WeThe 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

~~We use~~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 ~~parallels~~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. ~~Our~~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. Historically we have relied on debt financing and, until January 2016, equity financing from our primary equity offering. We terminated our primary offering in January 2016 and this has significantly reduced our access to equity financing. 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 ana securities exchange, in order to consummate these private placements, we have ~~any~~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 ~~choose,~~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 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 continue to improve. 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;~~

~~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.

~~Our investments in commercial real estate debt and commercial real estate securities are subject to changes in credit spreads.~~

Our investments in commercial real estate debt and commercial real estate securities are subject to changes in credit spreads. When credit spreads widen, the economic value of such investments decrease. Even though such investment may be performing in accordance with its terms and the underlying collateral has not changed, the economic value of the investment may be negatively impacted by the incremental interest foregone from the widened credit spread.

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. ~~Special~~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 ~~continues to deteriorate.~~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 size of each investment we make in commercial real estate debt, commercial real estate securities and other commercial real estate-related investments. If we have an investment that represents a material percentage of our assets, and that investment experiences a loss, the value of our common stock could be significantly diminished.

Certain of our commercial real estate debt, commercial real estate-related securities and other commercial real estate investments may represent a significant percentage of our assets. Any such investment may carry the risk associated with a significant asset concentration. Should any investment representing a material percentage of our assets, experience a loss on all or a portion of the investment, we could experience a material adverse effect, which would result in the value of our common stock being diminished.

We have no established investment criteria limiting the geographic 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 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. These investments may carry the risks associated with significant geographical 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, and we may experience losses as a result. A worsening of economic conditions in the geographic area in which our investments may be 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.

We have no established investment criteria limiting the industry concentration of our investments in commercial real estate debt and commercial real estate-related securities and other commercial real estate investments. If our investments are concentrated in an industry that experiences adverse economic conditions, our investments may lose value and we may experience losses.

Certain commercial real estate debt and other commercial real estate-related investments in which we invest may be secured by a single property or properties serving a particular industry, such as hotel, office or otherwise. These investments may carry the risks associated with significant 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 industries, and we may experience losses as a result. A worsening of economic conditions in an industry in which we 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.

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.

~~We depend on borrowers for a substantial portion~~

Table of ~~our revenue, and accordingly, our revenue and our ability to make distributions is dependent upon the success and economic viability of such borrowers.~~Contents

The success of our origination or acquisition of commercial real estate debt investments and our acquisition of commercial real estate securities significantly depends on the financial stability of the borrowers underlying such investments. The inability of a single major borrower or a number of smaller borrowers to meet their payment obligations could result in reduced revenue or losses.

~~A prolonged economic slowdown, a lengthy or severe recession or declining real estate values could harm our operations.~~

Many of our investments may be susceptible to economic slowdowns or recessions, which could lead to financial losses in our investments and a decrease in revenues, earnings and assets. An economic slowdown or recession, in addition to other non-economic factors, such as an excess supply of properties, could have a material negative impact on the values of commercial real estate properties. Declining real estate values will likely reduce our level of new loan originations, since borrowers often use increases in the value of their existing properties to support the purchase or investment in additional properties. Borrowers may also be less able to pay principal and interest on our loans if the real estate economy weakens. Further, declining real estate values significantly increase the likelihood that we will incur losses on our loans in the event of a default because the value of our collateral may be insufficient to cover our cost on the loan. Any sustained period of increased payment delinquencies, foreclosures or losses could adversely affect both our net interest income from loans in our portfolio as well as our ability to originate, sell and securitize loans, which would significantly harm our revenues, results of operations, financial condition, business prospects and our ability to make distributions.

~~If we overestimate the value or income-producing ability or incorrectly price the risks of our investments, we may experience losses.~~

Analysis of the value or income-producing ability of a commercial property is highly subjective and may be subject to error. We value our potential investments based on yields and risks, taking into account estimated future losses on the commercial real estate loans and the property included in the securitization’s pools or commercial real estate investments, and the estimated impact of these losses on expected future cash flows and returns. In the event that we underestimate the risks relative to the price we pay for a particular investment, we may experience losses with respect to such investment.

~~Our borrowers’ forms of entities may cause special risks or hinder our recovery.~~

Most of the borrowers for our commercial real estate loan investments will most likely be legal entities rather than individuals. As a result, our risk of loss may be greater than originators of loans made to or leases with individuals. Unlike individuals involved in bankruptcies, these legal entities generally do not have personal assets and creditworthiness at stake. As a result, the bankruptcy of one of our borrowers, or a general partner or managing member of that borrower, may impair our ability to enforce our rights and remedies under the related mortgage.

~~Real estate debt restructurings may reduce our net interest income.~~

Although our commercial real estate debt investments are relatively new and the commercial real estate market has exhibited signs of recovery, 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 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.

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. As a result of the recent economic recession and persisting market conditions, many borrowers and guarantors face financial difficulties and may be unable to comply with their financial covenants. If the economy does not strengthen, 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 ~~expect~~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. In addition, we plan to match interest rates on our assets with like-kind borrowings, so fixed-rate assets are financed with fixed-rate borrowings and floating-rate assets are financed with floating-rate borrowings, directly or indirectly through the use of interest rate swaps, caps and other financial instruments or through a combination of these strategies. 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 ~~loan~~credit losses is difficult to estimate.

~~Our~~Our provision for ~~loan~~credit losses is evaluated on a quarterly basis. Our determination of provision for ~~loan~~credit 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.

IfSince the start of 2020 we ~~enter into joint ventures, our joint venture partners could take actions that decrease~~have been subject to the ~~value~~FASB’s Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of ~~an investment to us~~Credit Losses on Financial Instruments. The new standard, known as the Current Expected Credit Loss (“CECL”) model, significantly changed how entities measure credit losses for most financial assets and ~~lower our overall return.~~

~~We may enter into joint ventures with third parties to make investments. We may also make investments in partnerships or~~certain other ~~co-ownership arrangements or participations. Such investments may involve risks not otherwise present with other methods of investment, including, for example, the following risks:~~

~~that our co-venturer or partner in an investment could become insolvent or bankrupt;~~

~~that such co-venturer or partner may at any time have economic or business interests or goals~~instruments that are ~~or that become inconsistent with our business interests or goals; or~~

~~that such co-venturer or partner may be in~~not measured at fair value through net income. CECL amended the existing credit loss model to reflect a ~~position to take action contrary to our instructions or requests or contrary to our policies or objectives.~~

~~Any~~reporting entity's current estimate of ~~the above might subject us to liabilities~~all expected credit losses, not only based on historical experience and ~~thus reduce our returns on our investment with that co-venturer or partner. In addition, disagreements or disputes between us~~current conditions, but also by including reasonable and ~~our co-venturer or partner could result in litigation, which could increase our expenses and potentially limit~~supportable forecasts incorporating forward-looking information. This measurement takes place at the time the financial asset is first added to the balance sheet and ~~effort our officers and directors are able to devote to our business.~~updated quarterly thereafter. This differs significantly from the prior “incurred loss” model.

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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 ~~an evolving~~a regulatory environment that may affect certain aspects of these activities.

As a result of the dislocation of the credit markets, the securitization ~~market~~industry has become subject to additional regulation. In particular, pursuant to the ~~Dodd‑Frank~~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. ToWhile the ~~extent we~~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 ~~buy significant B‑Pieces in~~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 ~~securitizations, this~~liquidity and could potentially reduce our returns ~~in these transactions.~~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.

~~Hedging may adversely affect our earnings, which could reduce our cash available for distribution to our stockholders.~~

Subject to maintaining our qualification as a REIT, we pursue various hedging strategies to seek to reduce our exposure to adverse changes in interest rates. Our hedging activity varies in scope based on the level and volatility

Table of ~~interest rates, exchange rates, the types of assets held and other changing market conditions. Hedging may fail to protect or could adversely affect us because, among other things:~~Contents

~~interest rate, currency and/or credit hedging can be expensive and may result in us receiving less interest income;~~

~~available interest rate hedges may not correspond directly with the interest rate risk for which protection is sought;~~

~~due to a credit loss, prepayment or asset sale, the duration of the hedge may not match the duration of the related asset or liability;~~

the amount of income that a REIT may earn from hedging transactions (other than hedging transactions that satisfy certain requirements of the Internal Revenue Code or that are done through a taxable REIT subsidiary) to offset losses is limited by U.S. federal tax provisions governing REITs;

~~the credit quality of the hedging counterparty 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; and~~

~~the hedging counterparty owing money in the hedging transaction may default on its obligation to pay.~~

~~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.

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. For taxable years beginning before January 1, 2018 we also could be subject to the U.S. federal~~rates (including any applicable alternative minimum ~~tax.~~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.

~~Stockholders who participate in our DRIP may have current tax liability on distributions if they elect to reinvest in our common stock.~~

Stockholders who participate in our DRIP, will be deemed to have received, for U.S. federal income tax purposes, a distribution equal to the amount reinvested in shares of our common stock and an additional distribution to the extent the shares are purchased at a discount to fair market value. Such amounts will be taxable distributions, to the extent of our current or accumulated earnings and profits. As a result, unless such investor is a tax-exempt entity, such investor may have to use cash from other sources to pay the tax liability on the value of the shares of common stock received.

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.~~

~~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 our 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. 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 25% (20% for taxable years beginning after December 31, 2017) 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.

In connection with our qualification as a REIT, we are required to annually distribute at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. Although we do not currently intend to do so, in order to satisfy this requirement, we are permitted, subject to certain conditions and limitations, to make distributions that are in part payable in shares of our common stock. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income. As a result, U.S. stockholders may be required to pay income taxes with respect to such distributions in excess of the cash portion of the distribution received. Since there is currently no market for our common stock, U.S. stockholders receiving a distribution of our shares of common stock may not be able to sell shares received in such distribution in order to satisfy any tax imposed on such distribution and therefore may be required to sell other stock or assets owned by them, at a time that may be disadvantageous. Furthermore,

with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock.

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. In particular, the TCJA makes many significant changes to the U.S. federal income tax laws that will profoundly impact the taxation of individuals and corporations (both non-REIT “C” corporations as well as corporations that have elected to be taxed as REITs). A number of changes that affect non-corporate taxpayers will expire at the end of 2025 unless Congress acts to extend them. These changes will impact us and our stockholders in various ways, some of which are adverse or potentially adverse compared to prior law. To date, the IRS has issued only limited guidance with respect to certain of the new provisions, and there are numerous interpretive issues that will require guidance. It is highly likely that technical corrections legislation will be needed to clarify certain aspects of the new law and give proper effect to Congressional intent. There can be no assurance, however, that technical clarifications or changes needed to prevent unintended or unforeseen tax consequences will be enacted by Congress in the near future.

~~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 knowledge~~For a description of ~~material pending~~the Company’s legal proceedings, ~~other than ordinary routine litigation incidental~~see “Note 10. Commitments and Contingencies” to ~~the business, or material pending or threatened regulatory proceedings, against the Company at~~our 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 ~~our~~the Company's shares of common stock and wethe Company currently ~~have~~has no immediate plans to list our shares of common stock on a national securities exchange. Until our shares are listed on a national securities exchange, if ever, ~~our~~the Company's stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase requirements. In addition, our charter prohibits the ownership of more than 9.8% in value of the aggregate of our outstanding shares of stock or more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock by a single investor, unless exempted by our board of directors. Consequently, there is the risk that our stockholders may not be able to sell their shares at a time or price acceptable to them. On November ~~9, 2017,~~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 ~~$19.02.~~$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, ~~2017.~~2020. This valuation was performed in ~~accordance~~a 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 ~~firm~~firms to estimate the fair value of our ~~commercial~~loan portfolio, securities portfolio and real estate ~~debt investments and commercial mortgage backed securities.~~owned portfolio. See our ~~current report~~Quarterly Report on Form 10-Q filed with the SEC on November ~~14, 2017~~6, 2020 for ~~our~~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 ~~$19.02~~$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 ~~our~~the Company's investments were sold and the sale proceeds were distributed upon liquidation of ~~our~~the Company's assets. Such a distribution upon liquidation may be less than ~~$19.02~~$17.88 per share for various reasons including changes in values between the September 30, ~~2017~~2020 valuation date and the date of any liquidation.

~~We are~~ The Company is currently offering our shares for ~~$19.02~~$17.88 pursuant to the DRIP.

Holders

As of February 28, ~~2018, we~~2021, the Company had ~~31,533,370~~44,135,876 shares of common stock outstanding held by a total of ~~16,330 stockholders.~~16,061 stockholders of record.

Distributions

~~We have~~The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with ~~our~~the taxable year ended December 31, 2013. As a REIT, if ~~we meet~~the Company meets certain organizational and operational requirements and ~~distribute~~distributes at least 90% of ~~our~~its' "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to ~~our~~the stockholders in a year, wethe Company will not be subject to U.S. federal income tax to the extent of the income that we distribute. Even if ~~we qualify~~the Company qualifies for taxation as a REIT, wethe Company may be subject to certain state and local taxes on ~~our~~its' income and property and U.S. federal income and excise taxes on any undistributed income.

~~On May 13, 2013, our~~In April 2020, the Company’s board of directors ~~authorized,~~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 ~~we declared~~payment basis, starting with the second quarter 2020 dividend that was paid in July 2020. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a ~~distribution, which is calculated based on stockholders~~quarterly basis.

The monthly distributions for the first quarter of ~~record each day during the applicable period~~2020 were paid at a daily rate ~~of $0.00565068493 per day, which is~~ equivalent to ~~$2.0625~~$1.44 per annum, per share of common stock. ~~In March 2016, our board of directors ratified~~Starting with the ~~same~~second quarter 2020 distribution, ~~amount. In August 2017, our board of directors authorized and declared a distribution calculated daily~~the 2020 quarterly distributions were paid at a quarterly rate of ~~$0.00394521 per day, which is equivalent to $1.44 per annum per annum,~~$0.275 per share of common ~~stock.~~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 distributions will be~~Distributions are generally payable by the fifth day following each ~~month~~quarter 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, ~~2017~~2020 and ~~2016 (in~~2019 (dollars in thousands):


	Year Ended December 31,
	2020				2019
Distributions:
Cash distributions paid	$	36,798			$	45,763
Distributions reinvested	8,883				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 DRIP	8,883		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,
2017 2016
Distributions:
Cash distributions paid $ 38,828
$ 40,251

Distributions reinvested 20,051
25,047

Total distributions $ 58,879
$ 65,298

Source of distribution coverage:
Cash flows provided by operations $ 8,354
14.2 % $ 35,024
53.6 %
Available cash on hand 30,474
51.8 % 5,227
8.0 %
Common stock issued under DRIP 20,051
34.0 % 25,047
38.4 %
Total sources of distributions $ 58,879
100.0 % $ 65,298
100.0 %
Cash flows provided by operations (GAAP) $ 8,354
$ 35,024

Net income (GAAP) $ 33,779
$ 29,990

Share-Based Compensation

Restricted Share Plan

~~We have~~The Company has an employee and director incentive restricted share plan (the “RSP”), which provides usthe Company with the ability to grant awards of restricted shares to our directors, officers, and employees (if wethe Company ever ~~have~~has employees), employees of the Advisor and its affiliates, employees of entities that provide services to ~~us,~~the Company, directors of the Advisor or of entities that provide services to usthe Company or certain consultants to usthe Company and the Advisor and its affiliates. The total number of common shares granted under the RSP ~~shall~~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 usthe 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 ~~us.~~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 ~~five years.~~the award.

As of December 31, ~~2017, we have~~2020, the Company has granted ~~21,398~~44,876 restricted shares to our independent directors of which ~~4,683~~27,823 shares have vested and 5,333 shares were forfeited. ~~Based on a share price of $19.02, the~~The compensation expense associated with the restricted share grants was ~~$96,880~~$0.2 million for the year ended December 31, ~~2017.~~2020. Additionally, wethe Company recorded a distribution payable of ~~$26,623~~$3,248 at December 31, ~~2017~~2020 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, ~~2017:~~

2020:



Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise of Price of Outstanding Options, Warrants, and Rights		Number 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	—	—	—	~~3,984,586~~	3,977,510
Total	—	—	—	~~3,984,586~~	3,977,510

~~Recent Sale of Unregistered Equity Securities~~

On February 14, 2018 (the “Commitment Date”), the Company entered into stock purchase agreements (collectively, the “Purchase Agreements”), by and between the Company and certain institutional investors (the “Institutional Investors”), certain officers of the Company, and certain owners, employees and associates of the Advisor and its affiliates (collectively, the “Manager Investors,” and together with the Institutional Investors, the “Investors”), pursuant to which the Investors committed to purchase an aggregate amount of up to approximately $97.0 million of shares (the “Shares”) of Common Stock in one or more closings (each, a “Closing,” and collectively, the “Closings”). The timing of any Closing, and the amount of Shares to be sold at such Closing, will be determined by the Company in its sole discretion, subject to certain limitations. As described in

the Purchase Agreements, the Company may enter into additional Purchase Agreements with other investors within 12 months of the Commitment Date. As of the date of this 10-K filing, there have been no Closings pursuant to the Purchase Agreements.

The Purchase Agreements each provide that the purchase price for the Shares shall be equal to $17.25, which is 90% of GAAP book value per share of the Common Stock as of December 31, 2017 (“Book Value”). However, in consideration of them being the first investors to commit to purchase Shares in the offering, the Company agreed to sell the Shares to the Investors at $16.87 per share. The Company further agreed that if subsequent investors in the offering are permitted to acquire Common Stock for less than 90% of Book Value, the effective purchase price of the Investors will be subject to downward adjustment. The Purchase Agreement also provides that the Company will enter into a liquidity event, such as a listing of the Common Stock, within three years of the Commitment Date, subject to certain restrictions. The Purchase Agreements contain customary representations, warranties and covenants and indemnification provisions.

Investors have agreed with the Advisor not to sell or otherwise transfer the Shares, 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 Investors will not be eligible to participate in the Company’s amended and restated share repurchase program for at least three years.

This offering was not registered under the Securities Act and was made pursuant to the exemption provided by Section 4(a)(2) of the Securities Act and certain rules and regulations promulgated thereunder.

The Company intends to use the net proceeds from the Closings to originate and acquire additional commercial real estate debt investments for the Company and for working capital and other general corporate purposes of the Company.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

~~Our Board~~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 ~~us.~~the Company. Subject to certain conditions, stockholders that purchased shares of ~~our~~the Company's common stock or received their shares from usthe 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 wethe Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland ~~law.~~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, ~~our Board~~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) ~~our~~the Company's most recent estimated per-share NAV, as approved by ~~our~~the Company's board of directors from time to time, and (ii) ~~our~~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 ~~$19.02~~$17.88 and the Company’s GAAP book value per share as of December 31, ~~2017 is $19.17.~~2020 was $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 ~~Board~~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. ~~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. WeThe 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~~repurchase and the ~~redemption~~repurchase is approved, wethe 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.

~~We are only authorized to~~Share repurchase shares pursuant to the SRP using the proceeds received from the DRIP and will limit the amount spent to repurchase shares in a given quarter to the amount of proceeds received from the DRIP in that same quarter. In addition, the board of directors may reject a request for redemption at any time. Due to these limitations, we cannot guarantee that it will be able to accommodate all repurchase requests. Purchasesactivity under the SRP ~~will be limited in any calendar year to 5% of the weighted average number of shares outstanding on December 31 of the previous calendar year.~~

~~The following table reflects the number of shares repurchased under the SRP cumulatively through December 31, 2017:~~

Number of Requests Number of Shares Repurchased Average Price per Share
Cumulative as of January 1, 2013 —
—
—
Year ended December 31, 2013 1
1,400
25.00
Cumulative as of December 31, 2013 1
1,400
25.00
Year ended December 31, 2014 9
19,355
23.94
Cumulative as of December 31, 2014 10
20,755
24.01
Year ended December 31, 2015 ⁽¹⁾
291
360,719
23.70
Cumulative as of December 31, 2015 301
381,474
23.72
Year ended December 31, 2016 ⁽²⁾⁽³⁾
684
537,209
24.11
Cumulative as of December 31, 2016 985
918,683
23.94
Year ended December 31, 2017 ⁽⁴⁾⁽⁵⁾
1,140
1,072,708
19.15
Cumulative as of December 31, 2017 2,125
1,991,391
21.36

~~________________________~~

¹~~As permitted under the SRP, in January 2016, our board of directors authorized, with respect to redemption requests received~~ during the ~~quarter~~year ended December 31, 2015, the repurchase of shares validly submitted for repurchase in an amount such that the aggregate amount of shares repurchased pursuant to redemption requests received for the year-ended December 31, 2015 equaled 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Accordingly, 274,921 shares at an average per share of $23.37 (including all shares submitted for death and disability) were approved for repurchase and completed in February 2016, while 1,309,471 shares at an average price per share of $23.38 were not fulfilled. There were no other unfulfilled share repurchases for the period from January 1, 2013 to December 31, 2015.2020 was as follows:

²~~As permitted under~~


	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, 2020	373,135	$	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, 2020	206,332	$	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		—	—
Total	579,467			579,467

For additional details about the SRP, see “Share Repurchase Program” in ~~July 2016,~~“Note 9 - Stock Transactions” to our board of directors authorized, with respect to redemption requests received during the semi-annual period from January 1, 2016 to June 30, 2016, the repurchase of shares validly submitted for repurchaseconsolidated financial statements included in ~~an amount limited to the proceeds reinvested through our DRIP. As a result, redemption requests in the amount of 208,470 shares were not fulfilled.~~this Annual Report on Form 10-K.

³ Amounts exclude 483 redemption requests, representing 473,807 shares, received during the semi-annual period from July 1, 2016 to December 31, 2016, which were approved by the Board and repurchased in January 2017. As permitted under the SRP, in January 2017, our board of directors authorized, with respect to redemption requests received during the semi-annual period from June 30, 2016 to December 31, 2016, the repurchase of shares validly submitted for repurchase in an amount limited to the proceeds reinvested through our DRIP. There were no unfulfilled repurchase requests during this semi-annual period.

⁴ As permitted under the SRP, in July 2017, our board of directors authorized, with respect to redemption requests received during the semi-annual period from January 1, 2017 to June 30, 2017, the repurchase of shares validly submitted for repurchase in an amount limited to the proceeds reinvested through our DRIP. There were no unfulfilled repurchase requests during this semi-annual period.

⁵ Amounts exclude 875 redemption requests, representing 1,024,874 shares during the semi-annual period from July 1, 2017 to December 31, 2017, of which 417,376 shares were approved by the Board and repurchased in January 2018. As permitted under the SRP, in January 2018, our board of directors authorized, with respect to redemption requests received during the semi-annual period from July 1, 2017 to December 31, 2017, the repurchase of shares validly submitted for repurchase in an amount limited to the proceeds reinvested through our DRIP. As a result, redemption requests in the amount of 607,498 shares were not fulfilled.

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 Analysis~~Intentionally Omitted.

Table of Financial Condition and Results of Operations". The following consolidated balance sheet as of December 31, 2017 and 2016 and consolidated statements of operations the for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 were derived from our consolidated financial statements:

Contents

December 31,
Balance sheet data (in thousands) 2017 2016
Commercial mortgage loans, held for investment, net $ 1,402,046
$ 1,046,556
Commercial mortgage loans, held-for-sale —
21,179
Commercial mortgage loans, held-for-sale, measured at fair value 28,531
—
Real estate securities, available for sale, at fair value —
49,049
Total assets 1,583,661
1,248,125
Collateralized loan obligations 826,150
278,450
Repurchase agreements - commercial mortgage loans 65,690
257,664
Other financing - commercial mortgage loans 25,698
—
Repurchase agreements - real estate securities 39,035
66,639
Total liabilities 973,322
614,475
Total stockholders' equity 610,339
633,650

Year Ended December 31,
Operating data (in thousands) 2017 2016 2015 2014 2013
Interest income:
Interest income $ 89,564
$ 79,404
$ 59,393
$ 15,466
$ 775
Less: Interest expense 32,359
23,169
12,268
2,196
32
Net interest income 57,205
56,235
47,125
13,270
743
Expenses:
Asset management and subordinated performance fee 9,273
9,504
7,615
604
—
Acquisition fees and acquisition expenses 4,197
806
7,916
4,386
—
Administrative services expenses ⁽¹⁾
6,765
4,376
644
—
—
Other expenses 9,281
7,803
5,699
2,198
641
Total expenses 29,516
22,489
21,874
7,188
641
Other (income)/loss:
Loan loss (recovery) provision (715 ) 1,293
318
570
—
Realized (gain) loss on sale of real estate securities (172 ) 1,906
—
—
—
Realized (gain) loss on sale of commercial mortgage loan (120 ) —
—
(112 ) —
Realized (gain) loss on sale of commercial mortgage loan, held-for-sale, measured at fair value (4,523 ) —
—
—
—
Impairment losses of real estate securities —
310
—
—
—
Unrealized (gain) loss on loans held-for-sale (247 ) 247
—
—
—
Unrealized (gain) loss on derivatives 17
—
—
—
—
Realized (gain) loss on derivatives (555 ) —
—
—
—
Total other (income) /loss $ (6,315 ) $ 3,756
$ 318
$ 458
$ —
Income (loss) before taxes 34,004
29,990
24,933
5,624
102
Income tax expense (benefit) 225
—
—
209
—
Net income (loss) $ 33,779
$ 29,990
$ 24,933
$ 5,415
$ 102

Basic net income per share $ 1.06
$ 0.95
$ 1.03
$ 0.75
$ 0.19
Diluted net income per share $ 1.06
$ 0.95
$ 1.03
$ 0.75
$ 0.19
Basic weighted average shares outstanding 31,772,231
31,659,274
24,253,905
7,227,169
526,084
Diluted weighted average shares outstanding 31,784,889
31,666,504
24,259,169
7,232,559
530,096
Distributions per common share $ 1.80
$ 2.06
$ 2.06
$ 2.06
$ 1.22

~~________________________~~

⁽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 on November 15, 2012 and 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. ~~On May 14, 2013, we~~We commenced business ~~operations after raising~~ in ~~excess of $2.0 million of equity, the amount required for us to release equity proceeds from escrow.~~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. ~~On September 29, 2016 we terminated~~We are managed by our ~~advisory agreement with our Former~~ Advisor pursuant to an ~~affiliate of AR Global Investments, LLC,~~Amended and ~~entered into, and executed, an advisory agreement with Benefit Street Partners L.L.C. on~~Restated Advisory Agreement, dated January 19, 2018. The appointment of the Advisor and the execution of the Advisory Agreement were recommended by a special committee of our board of directors consisting exclusively of our independent directors. The special committee, with the assistance of its independent financial advisor and independent legal counsel, conducted a competitive process to select a new advisor before selecting the Advisor.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. On February 1, 2019, Franklin Resources, Inc. 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.

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.

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 ~~9, 2017,~~2, 2020, the board of directors, upon the recommendation of the Audit Committee of the board, unanimously approved and established the estimated net asset value ("NAV") per share of the Company’s common stock proposed by the Advisor of$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, 2020 (the “Valuation Date”). This valuation was performed in a 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 independent third-party valuation firms to estimate the fair value of our loan portfolio, securities portfolio and real estate owned portfolio.

These valuation firms estimated the value of our loan portfolio using customary valuation methods, including a discounted cash flow analysis with respect to our loan portfolio, available market pricing information with respect to our 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 added the amounts of cash and other tangible assets reflected on our balance sheet (as computed in accordance with GAAP) and subtracted our liabilities as reflected on our balance sheet (computed in accordance with GAAP). Based on this the Advisor estimated that the Company’s NAV as of September 30, 2020 is $17.88 which is the midpoint of the valuation range of $17.14 to $18.62.

The Advisor recommended our board of directors ~~unanimously approved and established an~~approve the estimated ~~(“NAV”)~~ per share NAV of ~~$19.02. Refer~~$17.88. As with any methodology used to ~~"Item 5. Market~~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.

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 ~~Registrant's Common Equity, Related Stockholder Matters~~the fact that the shares are not currently traded on a national securities exchange and ~~Issuer Purchases~~other costs that may be incurred in connection with a liquidity event. Our estimated per share NAV does not reflect the conversion of ~~Equity Securities"~~any of ~~this Form 10-K for additional information regarding~~our Series A convertible preferred stock ("Series A Preferred Stock") or Series C convertible preferred stock (“Series C Preferred 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. For 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 ~~per share.~~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~~

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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 ~~Loan~~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 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's~~commitments 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 as~~term, 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 statement~~borrower, expected payments of ~~operations~~principal and ~~is decreased by charge-offs when losses are confirmed through the receipt of assets, such~~interest, as ~~cash in a pre-foreclosure sale~~well 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 ~~includes~~is 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 component~~commercial 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 recorded~~immediate 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 in~~discounted cash flow (“DCF”) methodology.

For financial instruments where the ~~portfolio~~borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and ~~(ii)~~ the ~~amount~~repayment is expected to be provided substantially through the operation or sale of the ~~loss can be reasonably estimated. The~~collateral, the Company ~~currently estimates loss rates based on historical realized losses experienced in~~may elect to use as a practical expedient the ~~industry and takes into account current~~fair value of the collateral ~~and economic conditions affecting~~at the ~~probability and severity of losses~~reporting date when ~~establishing~~determining the allowance for ~~loan~~credit 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 investment~~collectability, 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 relates~~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 ~~reserves~~timely 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. The~~under the cost-recovery method, until qualifying for return to accrual. Upon restructuring the nonaccrual loan, the Company ~~considers~~may return a loan to ~~be impaired~~accrual status when ~~based upon current information~~repayment of principal and ~~events, it believes that it~~interest is ~~probable that the Company will be unable to collect all amounts due under the contractual terms~~reasonably assured.

Table of the loan agreement. This assessment is made on an individual 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.Contents

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, generally when third party participations exist.

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 ~~the fair value option for certain of our real estate~~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 ~~statement~~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-temporary~~credit impairment. IfAFS real estate securities which have experienced a decline in the fair value ~~of a security is less than its~~below their amortized cost basis (i.e., impairment) are evaluated each reporting period to determine whether the ~~security~~decline in fair value is ~~considered impaired. Impairment~~due 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 intent~~Company intends to sell ~~the~~an impaired ~~security; (ii) it is~~real estate security or more likely than not we will be required to sell ~~the security; or (iii) the Advisor does not expect to recover~~such 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. If~~underlying assets in the ~~Advisor determines that an other-than-temporary impairment exists~~security, borrower financial resources and ~~a sale~~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 ~~likely, the impairment charge will be~~ recognized as an ~~impairment of assets on our consolidated statement of operations. If a sale is not expected,~~adjustment to the ~~portion of the impairment charge related~~individual security’s asset balance with an offsetting entry to credit factors will be recorded as an impairment of assets on our 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.

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

~~We have~~The Company has conducted ~~our~~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 ~~we meet~~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, weit will not be subject to U.S. federal income tax to the extent of the income that ~~we distribute.~~it distributes. However, even if ~~we qualify~~the Company qualifies for taxation as a REIT, weit may be subject to certain state and local taxes on our income in addition to U.S. federal income and excise taxes on ~~our~~its undistributed income. ~~Our~~The Conduit business segment is operated through ~~our wholly owned TRS subsidiary.~~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 Series of Preferred Stock are considered to be participating securities. As such, the Company ~~calculates~~is required to include the Preferred Stock in the calculation of basic earnings per share ~~by dividing net income attributable to~~and calculate basic earnings per share using the ~~Company for~~two-class method. The Company’s dilutive earnings per share calculation is computed using the ~~period by~~more dilutive result of the ~~weighted-average number of shares of~~treasury stock method, assuming the participating security is a potential common ~~stock outstanding for that period.~~share, or the two-class method, assuming the participating security is not converted. Diluted earnings per share reflects the potential dilution ~~that~~ 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 ~~and if convertible~~or upon conversion of the outstanding shares ~~were exercised,~~of the Company’s Preferred Stock, except when doing so would be anti-dilutive.

~~Reportable Segments~~

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Results of Operations

Comparison of the Year Ended December 31, 2020 to the Year Ended December 31, 2019

The Company conducts its business through the following segments:

•The real estate debt business ~~which is focused~~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 ~~which is focused~~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 conduit business operated ~~business~~ 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~~profit.

~~See Note 14 - Segment Reporting for further information regarding~~•The real estate owned business represents real estate acquired by the ~~Company's~~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,
	2020							2019
	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 conduit	83,618			3,111		3.7	%	132,042			7,716		5.8	%
Real estate securities	351,859			10,854		3.1	%	153,484			6,149		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 loans	16,704			916		5.5	%	2,686			225		8.4	%
Repurchase agreements - real estate securities	313,227			13,637		4.4	%	161,460			5,117		3.2	%
Collateralized loan obligations	1,706,207			41,095		2.4	%	1,641,740			67,927		4.1	%
Derivative instruments	—			—		N/A		—			334		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	%

________________________

~~Portfolio~~(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.

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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, ~~2017~~ ~~and 2016,~~2020, our portfolio consisted of ~~69 and 71~~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,
	2020		2019
Asset management and subordinated performance fee	$	15,178	$	16,226
Acquisition expenses	696		900
Administrative services expenses	13,120		16,363
Professional fees	10,964		11,631
Real estate owned operating expenses	3,653		2,802
Depreciation and amortization	2,233		507
Other expenses	3,312		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.

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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.


	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	—			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. All amounts are calculated based on quarterly averages for years ended December 31, 2019 and 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 of interest-earning assets and 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, 7 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.

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Expenses from operations

Expenses from operations for the years ended December 31, 2019 and 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
Acquisition expenses	900		452
Administrative services expenses	16,363		13,446
Professional fees	11,631		8,318
Real estate owned operating expenses	2,802		—
Depreciation and amortization	507		—
Other expenses	3,771		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.

Portfolio

As of December 31, 2020 and 2019, our portfolio consisted of 130 and 122 commercial mortgage loans, respectively, excluding commercial mortgage loans accounted for under the fair value ~~option, and zero and 6 investments in CMBS, respectively.~~option. The commercial mortgage loans held for investment as of December 31, ~~2017~~2020 and December 31, ~~2016~~2019 had a total carrying value, net of allowance for ~~loan~~credit losses, of ~~$1,402.0~~$2,693.8 million and ~~$1,046.6~~$2,762.0 million, respectively. As of December 31, ~~2017~~2020 and ~~2016~~2019 the Company's total commercial mortgage loans, ~~held for sale,~~held-for-sale, measured at fair value comprised of 3three loans with total fair value of $67.6 million and ~~zero~~seven loans ~~respectively. We had no CMBS investments as~~with total fair value of ~~December 31, 2017.~~$112.6 million, respectively. As of December 31, ~~2016, the Company's total~~2020 and 2019, our real estate securities, available for sale, at fair value comprised of nine CMBS investments ~~had a~~with total fair value of ~~$49.0 million. For our commercial mortgage loans, excluding commercial mortgage loans accounted for under the~~$171.1 million and 21 CMBS investments with total 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 severity of ~~losses when establishing the allowance for loan losses. We recorded a general allowance for loan losses as of~~ ~~December 31, 2017~~ ~~and 2016 in the amount of $1.5 million and $2.2 million, respectively. There were no impaired or specifically reserved loans in the portfolio as of~~ ~~December 31, 2017~~ ~~and 2016.~~

$386.3 million. As of December 31, ~~2017~~2020 and ~~2016,~~December 31, 2019, our other real estate investments, measured at fair value, comprised one investment with a total fair value of $2.5 million and $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 other 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 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, 2020 and 2019, our commercial mortgage loans, excluding commercial mortgage loans accounted for under the fair value option, had a weighted average coupon of ~~6.7%~~5.5% and ~~6.1%~~5.6%, and a weighted average remaining life of ~~1.3~~1.7 years and ~~1.9~~1.8 years, respectively. ~~We had no CMBS as of December 31, 2017.~~ As of December 31, ~~2016,~~2020 and 2019, our CMBS investments had a weighted average coupon of ~~5.8%~~2.2% and 3.7%, and a weighted average remaining life of ~~3.1 years.~~12.8 years and 15.8 years, respectively.

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The following charts summarize our ~~portfolio as a percentage of par value, including CMBS,~~commercial mortgage loans, held for investment, by ~~the collateral type, geographical region and~~ coupon rate type, collateral type and geographical region as of December 31, ~~2017~~2020 and ~~2016:~~2019:

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An investments region classification is defined according to the below map based on the location of investments secured property.

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The following charts show the par value by contractual maturity year for the investments in our portfolio as of December 31, ~~2017~~2020 and ~~2016.~~2019:

Table of Contents

The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of December 31, ~~2017 (in~~2020 (dollars in thousands):


Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 1	Industrial	$33,655	1 month LIBOR + 4.00%	4.20%	65.0%
Senior Debt 2	Mixed Use	12,839	1 month LIBOR + 5.00%	5.75%	73.3%
Senior Debt 3	Office	14,034	1 month LIBOR + 4.45%	5.45%	64.2%
Senior Debt 4	Office	8,391	1 month LIBOR + 6.00%	7.00%	74.0%
Senior Debt 5	Multifamily	37,812	1 month LIBOR + 3.35%	5.60%	76.0%
Senior Debt 6	Office	26,811	1 month LIBOR + 4.15%	5.40%	69.5%
Senior Debt 7	Hospitality	10,400	1 month LIBOR + 6.25%	6.50%	61.6%
Senior Debt 8	Hospitality	5,894	1 month LIBOR + 3.50%	4.50%	77.0%
Senior Debt 9	Hospitality	57,075	1 month LIBOR + 5.19%	6.19%	51.8%
Senior Debt 10	Multifamily	77,945	1 month LIBOR + 4.50%	5.50%	22.4%
Senior Debt 11	Hospitality	10,250	1 month LIBOR + 5.25%	6.25%	60.7%
Senior Debt 12	Hospitality	23,000	1 month LIBOR + 6.00%	6.50%	48.1%
Senior Debt 13	Office	23,726	1 month LIBOR + 5.15%	6.60%	56.4%
Senior Debt 14	Multifamily	41,826	1 month LIBOR + 3.70%	4.50%	63.7%
Senior Debt 15	Hospitality	28,272	1 month LIBOR + 4.00%	5.25%	68.0%
Senior Debt 16	Hospitality	22,700	1 month LIBOR + 4.40%	5.00%	72.7%
Senior Debt 17	Multifamily	35,886	1 month LIBOR + 3.00%	4.50%	83.6%
Senior Debt 18	Self Storage	3,851	1 month LIBOR + 4.05%	5.00%	45.5%
Senior Debt 19	Self Storage	6,496	1 month LIBOR + 4.05%	5.05%	55.8%
Senior Debt 20	Self Storage	7,606	1 month LIBOR + 4.05%	5.05%	57.6%
Senior Debt 21	Self Storage	2,400	1 month LIBOR + 4.05%	5.00%	37.6%
Senior Debt 22	Self Storage	6,310	1 month LIBOR + 5.05%	5.19%	59.1%
Senior Debt 23	Hospitality	22,355	1 month LIBOR + 3.50%	4.80%	68.8%
Senior Debt 24	Mixed Use	59,451	1 month LIBOR + 4.87%	5.27%	49.0%
Senior Debt 25	Office	21,100	1 month LIBOR + 3.75%	5.80%	70.0%
Senior Debt 26	Self Storage	6,299	1 month LIBOR + 6.00%	7.75%	58.9%
Senior Debt 27	Office	16,342	1 month LIBOR + 3.40%	5.30%	67.5%
Senior Debt 28	Retail	29,500	6.25%	6.25%	68.5%
Senior Debt 29	Self Storage	11,966	1 month LIBOR + 5.50%	7.25%	68.1%
Senior Debt 30	Multifamily	16,172	1 month LIBOR + 3.15%	4.95%	80.3%
Senior Debt 31	Multifamily	22,417	1 month LIBOR + 3.40%	4.95%	80.5%
Senior Debt 32	Multifamily	29,868	1 month LIBOR + 3.35%	5.25%	73.0%
Senior Debt 33	Land	16,400	1 month LIBOR + 6.00%	8.25%	45.7%
Senior Debt 34	Hospitality	8,523	1 month LIBOR + 4.80%	6.75%	62.5%
Senior Debt 35	Industrial	14,160	1 month LIBOR + 3.95%	5.95%	66.4%
Senior Debt 36	Multifamily	48,500	1 month LIBOR + 3.75%	6.15%	69.5%
Senior Debt 37	Multifamily	23,295	1 month LIBOR + 5.70%	7.50%	70.7%
Senior Debt 38	Office	7,200	1 month LIBOR + 3.90%	5.95%	67.6%
Senior Debt 39	Manufactured Housing	8,893	1 month LIBOR + 4.40%	6.50%	60.3%
Senior Debt 40	Hospitality	14,000	1 month LIBOR + 4.47%	6.72%	44.8%
Senior Debt 41	Retail	14,250	1 month LIBOR + 3.95%	6.45%	61.2%
Senior Debt 42	Hospitality	21,000	1 month LIBOR + 4.14%	6.64%	56.0%
Senior Debt 43	Multifamily	24,711	1 month LIBOR + 3.10%	5.40%	73.1%
Senior Debt 44	Multifamily	37,643	1 month LIBOR + 3.10%	5.40%	73.4%
Senior Debt 45	Office	42,631	1 month LIBOR + 3.50%	5.75%	71.0%
Senior Debt 46	Retail	8,500	1 month LIBOR + 7.50%	7.64%	51.6%

Table of Contents

Loan Type Property Type Par Value
Interest Rate ⁽¹⁾
Effective Yield
Loan to Value ⁽²⁾
Senior 1 Office $31,250 1M LIBOR + 4.50% 5.98% 71.1%
Senior 2 Retail 9,450 1M LIBOR + 4.90% 6.38% 69.2%
Senior 3 Office 41,885 1M LIBOR + 5.25% 6.73% 72.1%
Senior 4 Office 30,451 1M LIBOR + 4.60% 6.08% 70.0%
Senior 5 Retail 11,684 1M LIBOR + 4.50% 5.98% 74.8%
Senior 6 Multifamily 14,990 1M LIBOR + 5.00% 6.48% 63.9%
Senior 7 Retail 10,790 1M LIBOR + 5.25% 6.73% 72.0%
Senior 8 Hospitality 16,800 1M LIBOR + 4.90% 6.38% 74.0%
Senior 9 Multifamily 26,410 1M LIBOR + 4.25% 5.73% 79.7%
Senior 10 Multifamily 14,980 1M LIBOR + 4.50% 5.98% 68.4%
Senior 11 Retail 14,600 1M LIBOR + 4.25% 5.73% 65.0%
Senior 12 Retail 27,249 1M LIBOR + 4.75% 6.23% 67.4%
Senior 13 Office 9,844 1M LIBOR + 4.65% 6.13% 70.8%
Senior 14 Industrial 19,553 1M LIBOR + 4.25% 5.73% 68.0%
Senior 15 Multifamily 18,941 1M LIBOR + 4.20% 5.68% 76.4%
Senior 16 Hospitality 10,350 1M LIBOR + 5.50% 6.98% 69.9%
Senior 17 Hospitality 15,375 1M LIBOR + 5.30% 6.78% 73.5%
Senior 18 Office 45,235 1M LIBOR + 5.50% 6.98% 72.6%
Senior 19 Retail 7,500 1M LIBOR + 5.00% 6.48% 59.0%
Senior 20 Retail 4,725 1M LIBOR + 5.50% 6.98% 72.0%
Senior 21 Multifamily 44,595 1M LIBOR + 4.25% 5.73% 77.0%
Senior 22 Office 14,250 1M LIBOR + 4.75% 6.23% 74.4%
Senior 23 Multifamily 24,387 1M LIBOR + 4.25% 5.73% 69.6%
Senior 24 Multifamily 5,538 1M LIBOR + 3.85% 5.33% 76.8%
Senior 25 Multifamily 5,519 1M LIBOR + 3.95% 5.43% 77.5%
Senior 26 Multifamily 13,120 1M LIBOR + 3.95% 5.43% 78.2%
Senior 27 Multifamily 5,894 1M LIBOR + 4.05% 5.53% 80.0%
Senior 28 Industrial 33,655 1M LIBOR + 4.00% 5.48% 65.0%
Senior 29 Office 12,000 1M LIBOR + 4.75% 6.23% 54.1%
Senior 30 Office 35,000 1M LIBOR + 5.00% 6.48% 79.0%
Senior 31 Office 29,163 1M LIBOR + 4.25% 5.73% 73.3%
Senior 32 Office 15,030 1M LIBOR + 5.35% 6.83% 48.2%
Senior 33 Multifamily 14,000 1M LIBOR + 5.00% 6.48% 56.3%
Senior 34 Office 16,300 1M LIBOR + 6.00% 7.48% 66.4%
Senior 35 Retail 13,700 1M LIBOR + 4.75% 6.23% 62.6%
Senior 36 Retail 28,500 1M LIBOR + 4.73% 6.21% 73.1%
Senior 37 Retail 12,700 1M LIBOR + 5.00% 6.48% 73.3%
Senior 38 Multifamily 37,410 1M LIBOR + 6.75% 8.23% 72.8%
Senior 39 Retail 15,750 1M LIBOR + 5.25% 6.73% 70.5%
Senior 40 Retail 25,000 1M LIBOR + 4.40% 5.88% 71.4%
Senior 41 Multifamily 14,817 1M LIBOR + 7.10% 8.58% 76.4%
Senior 42 Hospitality 12,600 1M LIBOR + 5.50% 6.98% 61.6%
Senior 43 Hospitality 11,750 1M LIBOR + 5.50% 6.98% 71.2%
Senior 44 Retail 20,450 1M LIBOR + 5.00% 6.48% 60.9%
Senior 45 Multifamily 26,000 1M LIBOR + 7.50% 8.98% 69.7%
Senior 46 Hospitality 14,900 1M LIBOR + 6.25% 7.73% 69.0%
Senior 47 Office 11,580 1M LIBOR + 4.45% 5.93% 64.2%
Senior 48 Office 9,750 1M LIBOR + 5.50% 6.98% 74.0%
Senior 49 Multifamily 39,700 1M LIBOR + 5.50% 6.98% 76.0%
Senior 50 Multifamily 25,500 1M LIBOR + 4.85% 6.33% 83.1%


Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 47	Hospitality	10,580	1 month LIBOR + 4.50%	6.75%	68.7%
Senior Debt 48	Multifamily	18,100	1 month LIBOR + 3.40%	5.35%	76.4%
Senior Debt 49	Hospitality	19,900	1 month LIBOR + 4.15%	6.50%	61.8%
Senior Debt 50	Multifamily	18,656	1 month LIBOR + 3.10%	5.50%	67.4%
Senior Debt 51	Office	34,400	1 month LIBOR + 3.90%	6.15%	68.2%
Senior Debt 52	Hospitality	20,930	1 month LIBOR + 3.75%	6.10%	62.6%
Senior Debt 53	Hospitality	15,500	1 month LIBOR + 4.00%	6.50%	56.4%
Senior Debt 54	Hospitality	5,250	1 month LIBOR + 4.25%	6.50%	47.7%
Senior Debt 55	Hospitality	12,750	1 month LIBOR + 4.45%	6.85%	62.9%
Senior Debt 56	Hospitality	9,545	1 month LIBOR + 4.50%	6.85%	64.0%
Senior Debt 57	Retail	9,400	1 month LIBOR + 4.20%	6.30%	77.1%
Senior Debt 58	Manufactured Housing	12,200	1 month LIBOR + 3.65%	5.90%	48.4%
Senior Debt 59	Manufactured Housing	24,100	1 month LIBOR + 3.65%	5.90%	53.8%
Senior Debt 60	Multifamily	23,149	1 month LIBOR + 2.65%	4.75%	75.8%
Senior Debt 61	Office	29,750	1 month LIBOR + 3.35%	5.42%	54.3%
Senior Debt 62	Hospitality	34,484	1 month LIBOR + 3.99%	5.74%	31.0%
Senior Debt 63	Multifamily	12,839	1 month LIBOR + 2.65%	4.50%	71.6%
Senior Debt 64	Multifamily	37,021	1 month LIBOR + 2.75%	4.50%	79.3%
Senior Debt 65	Industrial	53,500	1 month LIBOR + 3.75%	5.50%	59.7%
Senior Debt 66	Office	21,825	1 month LIBOR + 3.50%	5.40%	70.9%
Senior Debt 67	Hospitality	7,100	1 month LIBOR + 4.00%	5.75%	70.3%
Senior Debt 68	Industrial	22,230	1 month LIBOR + 3.55%	5.25%	69.7%
Senior Debt 69	Multifamily	21,083	1 month LIBOR + 2.75%	4.25%	71.7%
Senior Debt 70	Multifamily	27,087	1 month LIBOR + 3.15%	4.95%	71.6%
Senior Debt 71	Multifamily	26,130	1 month LIBOR + 2.70%	2.84%	76.0%
Senior Debt 72	Multifamily	7,150	1 month LIBOR + 4.75%	5.80%	75.3%
Senior Debt 73	Multifamily	25,000	1 month LIBOR + 3.00%	4.50%	75.5%
Senior Debt 74	Office	25,500	1 month LIBOR + 4.35%	6.05%	64.9%
Senior Debt 75	Multifamily	14,181	1 month LIBOR + 3.10%	4.50%	63.7%
Senior Debt 76	Office	48,276	1 month LIBOR + 3.70%	5.00%	65.7%
Senior Debt 77	Industrial	25,350	1 month LIBOR + 3.50%	5.20%	58.1%
Senior Debt 78	Multifamily	11,800	1 month LIBOR + 3.15%	4.75%	72.4%
Senior Debt 79	Office	27,598	1 month LIBOR + 2.70%	2.84%	71.4%
Senior Debt 80	Multifamily	75,100	1 month LIBOR + 4.35%	6.00%	64.7%
Senior Debt 81	Manufactured Housing	1,385	5.50%	5.50%	62.8%
Senior Debt 82	Industrial	14,650	1 month LIBOR + 6.00%	6.75%	59.9%
Senior Debt 83	Multifamily	7,149	1 month LIBOR + 4.75%	5.75%	62.6%
Senior Debt 84	Multifamily	6,764	1 month LIBOR + 4.90%	5.65%	53.2%
Senior Debt 85	Multifamily	46,000	1 month LIBOR + 4.75%	5.75%	69.4%
Senior Debt 86	Multifamily	5,550	1 month LIBOR + 6.87%	7.87%	75.0%
Senior Debt 87	Industrial	16,400	1 month LIBOR + 6.25%	7.00%	61.0%
Senior Debt 88	Multifamily	14,505	1 month LIBOR + 4.75%	5.50%	65.3%
Senior Debt 89	Multifamily	23,438	1 month LIBOR + 4.65%	5.40%	52.7%
Senior Debt 90	Multifamily	4,300	1 month LIBOR + 5.50%	6.50%	87.4%
Senior Debt 91	Manufactured Housing	7,680	1 month LIBOR + 4.50%	5.00%	66.7%
Senior Debt 92	Mixed Use	30,465	1 month LIBOR + 5.15%	6.15%	67.0%
Senior Debt 93	Multifamily	3,140	1 month LIBOR + 6.25%	6.75%	73.5%
Senior Debt 94	Industrial	24,657	1 month LIBOR + 4.60%	5.10%	20.7%

Table of Contents

Loan Type Property Type Par Value
Interest Rate ⁽¹⁾
Effective Yield
Loan to Value ⁽²⁾
Senior 51 Retail 7,500 1M LIBOR + 5.25% 6.73% 70.5%
Senior 52 Office 62,040 1M LIBOR + 4.50% 5.98% 69.2%
Senior 53 Multifamily 39,033 1M LIBOR + 4.50% 5.98% 73.8%
Senior 54 Hospitality 8,875 1M LIBOR + 6.20% 7.68% 67.7%
Senior 55 Office 25,120 1M LIBOR + 4.15% 5.63% 69.5%
Senior 56 Multifamily 34,875 1M LIBOR + 3.80% 5.28% 71.2%
Senior 57 Multifamily 81,000 1M LIBOR + 7.00% 8.48% 69.4%
Senior 58 Office 29,800 1M LIBOR + 7.00% 8.48% 69.0%
Senior 59 Hospitality 10,600 1M LIBOR + 5.00% 6.48% 61.6%
Senior 60 Office 20,000 1M LIBOR + 4.25% 5.73% 68.6%
Senior 61 Hospitality 7,700 1M LIBOR + 5.75% 7.23% 77.0%
Senior 62 Hospitality 57,075 1M LIBOR + 5.75% 7.23% 51.8%
Senior 63 Hospitality 18,000 5.75% 5.75% 52.9%
Mezzanine 1 Multifamily 4,000 12.00% 12.00% 74.5%
Mezzanine 2 Office 7,000 12.00% 12.00% 78.3%
Mezzanine 3 Multifamily 3,480 9.50% 9.50% 84.3%
Mezzanine 4 Office 10,000 10.00% 10.00% 78.7%
Mezzanine 5 Multifamily 3,000 1M LIBOR + 13.00% 14.48% 77.7%
Mezzanine 6 Multifamily 8,000 1M LIBOR + 13.00% 14.48% 76.4%
$1,407,718 6.71% 70.0%


Loan Type	Property Type	Par Value	Interest Rate (1)	Effective Yield	Loan to Value (2)
Senior Debt 95 (3)	Multifamily	—	1 month LIBOR + 5.25%	5.39%	—%
Senior Debt 96	Hospitality	27,000	1 month LIBOR + 6.50%	6.85%	62.7%
Senior Debt 97	Multifamily	2,465	1 month LIBOR + 5.75%	6.50%	66.6%
Senior Debt 98	Multifamily	50,000	1 month LIBOR + 6.69%	7.44%	80.0%
Senior Debt 99	Self Storage	29,895	1 month LIBOR + 5.00%	5.25%	58.8%
Senior Debt 100	Multifamily	11,622	1 month LIBOR + 4.75%	5.25%	70.0%
Senior Debt 101	Manufactured Housing	3,400	1 month LIBOR + 5.00%	5.25%	58.6%
Senior Debt 102	Multifamily	27,550	1 month LIBOR + 5.75%	6.00%	69.8%
Senior Debt 103	Multifamily	76,000	1 month LIBOR + 4.10%	4.35%	67.9%
Senior Debt 104	Multifamily	58,000	1 month LIBOR + 5.25%	5.39%	74.7%
Senior Debt 105	Manufactured Housing	5,020	1 month LIBOR + 5.25%	5.39%	65.9%
Senior Debt 106	Office	19,003	1 month LIBOR + 4.50%	5.25%	47.9%
Senior Debt 107	Office	69,675	5.15%	5.15%	52.5%
Senior Debt 108	Office	30,900	1 month LIBOR + 5.20%	5.45%	66.0%
Senior Debt 109	Multifamily	10,945	1 month LIBOR + 7.04%	7.29%	63.3%
Senior Debt 110	Self Storage	11,600	1 month LIBOR + 4.76%	5.01%	66.6%
Senior Debt 111	Industrial	24,552	1 month LIBOR + 4.35%	4.60%	69.8%
Senior Debt 112	Manufactured Housing	5,000	1 month LIBOR + 5.90%	6.50%	58.8%
Senior Debt 113	Office	12,750	1 month LIBOR + 5.00%	5.25%	67.8%
Senior Debt 114	Multifamily	40,937	1 month LIBOR + 4.35%	4.60%	73.2%
Senior Debt 115	Multifamily	36,200	1 month LIBOR + 4.45%	4.70%	66.5%
Senior Debt 116	Multifamily	8,250	1 month LIBOR + 5.50%	5.75%	73.7%
Senior Debt 117	Retail	11,963	1 month LIBOR + 4.87%	5.12%	75.0%
Senior Debt 118	Manufactured Housing	3,585	1 month LIBOR + 5.40%	5.90%	76.3%
Senior Debt 119	Multifamily	5,730	1 month LIBOR + 5.00%	5.25%	73.5%
Senior Debt 120	Multifamily	18,800	1 month LIBOR + 4.00%	4.14%	79.7%
Senior Debt 121	Industrial	14,250	1 month LIBOR + 4.50%	4.75%	66.3%
Senior Debt 122	Office	11,550	1 month LIBOR + 5.50%	5.75%	68.8%
Senior Debt 123	Multifamily	21,000	1 month LIBOR + 4.60%	4.75%	66.7%
Senior Debt 124	Office	26,000	1 month LIBOR + 5.00%	5.25%	63.9%
Senior Debt 125	Hospitality	17,401	5.75%	5.75%	52.9%
Mezzanine Loan 1	Multifamily	3,480	9.50%	9.50%	84.3%
Mezzanine Loan 2	Retail	3,500	10.00%	10.00%	59.7%
Mezzanine Loan 3	Multifamily	6,500	1 month LIBOR + 10.25%	11.00%	90.4%
Mezzanine Loan 4	Retail	1,438	1 month LIBOR + 10.75%	11.00%	84.0%
Mezzanine Loan 5	Multifamily	1,000	11.00%	11.00%	68.9%
		$2,722,863		5.50%	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.

Table of Contents

The following table shows selected data from our commercial mortgage loans, held-for-sale, measured at fair ~~value.~~

Loan Type Property Type Par Value Interest Rate Effective Yield
Loan to Value ⁽¹⁾
TRS Senior 1 Multifamily $7,200 4.87% 4.9% 49.7%
TRS Senior 2 Multifamily 6,331 4.95% 5.0% 65.0%
TRS Senior 3 Multifamily 15,000 5.00% 5.0% 67.6%
$28,531 n/m 60.8%
value as of December 31, 2020 (dollars in thousands):


Loan Type	Property Type	Par Value	Interest Rate	Effective Yield	Loan to Value (1)
TRS Senior Debt 1	Industrial	$58,500	3.33%	3.33%	58.0%
TRS Senior Debt 2	Industrial	9,050	4.30%	4.30%	58.4%
TRS Mezzanine Loan 3	Multifamily	100	1 month LIBOR + 14.00%	15.00%	76.4%
		$67,650		3.48%	58.1%

________________________

⁽¹⁾Loan to value percentage is from metrics at origination.

~~n/m - not meaningful.~~

~~Results of Operations~~

~~Comparison of the Year Ended~~ ~~December 31, 2017~~ ~~to the Year Ended~~ ~~December 31, 2016~~

~~We conduct~~The following table shows selected data from our ~~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, 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 conduit 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 marketavailable for sale, measured at ~~a profit. .~~

~~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.~~

Years Ended December 31,
2017 2016

Average Carrying Value⁽¹⁾

Interest Income/Expense⁽²⁾

WA Yield/Financing Cost⁽³⁾⁽⁴⁾

Average Carrying Value⁽¹⁾

Interest Income/Expense⁽²⁾

WA Yield/Financing Cost⁽³⁾⁽⁴⁾
Interest-earning assets:
Real estate debt $ 1,231,824
$ 88,213
7.2 % $ 1,123,992
$ 73,884
6.6 %
Real estate securities 19,016
1,351
7.1 % 109,035
5,520
5.1 %
Total $ 1,250,840
$ 89,564
7.2 % $ 1,233,027
$ 79,404
6.4 %
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans $ 300,199
$ 14,142
4.7 % $ 250,788
$ 12,079
4.8 %
Other financing - commercial mortgage loans 20,086
1,213
6.0 % —
—
n/a
Repurchase Agreements - real estate securities 50,379
1,499
3.0 % 106,086
2,450
2.3 %
Collateralized loan obligations 406,262
15,385
3.8 % 286,936
8,640
3.0 %
Derivative instruments —
120
n/a
—
—
n/a
Total $ 776,926
$ 32,359
4.2 % $ 643,810
$ 23,169
3.6 %
Net interest income/spread $ 57,205
3.0 % $ 56,235
2.8 %
Average leverage %⁽⁵⁾
62.1 % 52.2 %
Weighted average levered yield⁽⁶⁾
9.1 %

7.9 %

~~________________________~~

⁽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 year ended December 31, 2017 and quarterly averages for the year ended December 31, 2016, 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⁾ ~~Annualized.~~

⁽⁵⁾ ~~Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.~~

⁽⁶⁾ ~~Calculated by taking the sum of (i) the net interest spread multiplied by the average leverage and (ii) the weighted average yield on interest-earning assets.~~

~~Interest income~~

~~Interest income for the years ended~~ ~~December 31, 2017~~ ~~and 2016 totaled $89.6 million and $79.4 million, respectively. As of~~ ~~December 31, 2017~~, our portfolio consisted of 69 loans and no investments in CMBS. The main driver in the increase in interest income was due to an increase in the 1 Month LIBOR, the benchmark for our loans. As of December 31, 2017, our loans had an average carryingfair value ~~of $1,231.8 million and our CMBS investments had an average carrying value of $19.0 million, while~~ as of December 31, ~~2016, our loans had an average carrying value of $1,124.0 million and our CMBS investments had an average carrying value of $109.0 million. The decrease~~2020 (dollars in ~~the average carrying value of our CMBS portfolio was offset by an increase in asset yields of 80 basis points, primarily due to an increase in the 1 Month LIBOR.~~thousands):


Type	Par Value	Interest Rate	Effective Yield
CMBS 1	$13,250	1 month LIBOR + 2.95%	3.1%
CMBS 2	10,800	1 month LIBOR + 2.10%	2.2%
CMBS 3	40,000	1 month LIBOR + 2.35%	2.5%
CMBS 4	8,000	1 month LIBOR + 1.85%	2.0%
CMBS 5	24,000	1 month LIBOR + 2.00%	2.1%
CMBS 6	12,000	1 month LIBOR + 2.15%	2.3%
CMBS 7	20,000	1 month LIBOR + 1.33%	1.5%
CMBS 8	25,000	1 month LIBOR + 1.63%	1.8%
CMBS 9	25,665	1 month LIBOR + 2.15%	2.3%
	$178,715		2.2%

~~Interest expense~~

~~Interest expense for the year ended~~ ~~December 31, 2017~~ increased to $32.4 million compared to interest expense for year ended December 31, 2016 of $23.2 million, primarily due to increase in average borrowings of approximately $133.1 million year over year, of which approximately $202.3 million is an increase due to the issuance of two CLOs issued in 2017. During the years ended December 31, 2017 and 2016, our total average borrowings outstanding were $776.9 million and $643.8 million, respectively. The increase in interest expense also equates to a 50 basis points increase in rates on interest-bearing liabilities primarily due to increases in the 1 Month LIBOR, the benchmark index for our financing lines.

~~Expenses from operations~~

~~Expenses from operations for the years ended December 31, 2017 and 2016 were made up of the following (in thousands):~~

Year Ended December 31,
2017 2016
Asset management and subordinated performance fee $ 9,273
$ 9,504
Administrative services expenses 6,765
4,376
Acquisition fees and acquisition expenses 4,197
806
Professional fees 5,444
5,467
Other expenses 3,837
2,336
Total expenses from operations $ 29,516
$ 22,489

The increase in our expenses from operations was primarily related to administrative services expenses, acquisition fees and acquisition expenses, and other expenses. During the years ended December 31, 2017 and 2016, we incurred asset management and subordinated performance fees of $9.3 million and $9.5 million, respectively. The entire $9.3 million in the asset management and subordinated performance fee line is composed of asset management fees, as there was no subordinated performance fee for 2017 due to applicable conditions not having been satisfied. For the year ended December 31, 2017, we have incurred approximately $6.8 million of administrative service expenses related to general and administrative expense reimbursement, of which the full amount was attributable to our Advisor. Additionally, we incurred approximately $3.2 million more in acquisition fees during the year ended December 31, 2017 compared to December 31, 2016 primarily due to the fact that we had nominal origination activity in 2016.

~~Comparison of the Year Ended December 31, 2016 to the Year Ended December 31, 2015~~

~~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.~~

Years Ended December 31,
2016 2015

Average Carrying Value⁽¹⁾

Interest Income/Expense⁽²⁾

WA Yield/Financing Cost⁽³⁾⁽⁴⁾

Average Carrying Value⁽¹⁾

Interest Income/Expense⁽²⁾

WA Yield/Financing Cost⁽³⁾⁽⁴⁾
Interest-earning assets:
Real estate debt $ 1,123,992
$ 73,884
6.6 % $ 719,206
$ 56,040
7.8 %
Real estate securities 109,035
5,520
5.1 % 84,803
3,353
4.0 %
Total 1,233,027
79,404
6.4 % 804,009
59,393
7.4 %
Interest-bearing liabilities:
Repurchase Agreements - Loans 250,788
12,079
4.8 % 262,727
9,543
3.6 %
Repurchase Agreements - Securities 106,086
2,450
2.3 % 63,687
1,119
1.8 %
Collateralized loan obligations 286,936
8,640
3.0 % 58,223
1,606
2.8 %
Total 643,810
23,169
3.6 % 384,637
12,268
3.2 %
Net interest income/spread $ 56,235
2.8 % $ 47,125
4.2 %
Average leverage %⁽⁵⁾
52.2 % 47.8 %
Weighted average levered yield⁽⁶⁾
7.9 % 9.4 %

~~________________________~~

⁽¹⁾ ~~Based on amortized cost for~~shows selected data from our other 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, 2016 and 2015.~~

⁽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⁾ ~~Annualized.~~

⁽⁵⁾ ~~Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets.~~

⁽⁶⁾ ~~Calculated by taking the sum of (i) the net interest spread multiplied by the average leverage and (ii) the weighted average yield on interest-earning assets.~~

~~Interest income~~

~~Interest income for the years ended December 31, 2016 and 2015 totaled $79.4 million and $59.4 million, respectively. As of December 31, 2016, our portfolio consisted of 71 Loans and 6~~ investments, ~~in CMBS. The main driver in the increase in interest income was the increase in the average carrying~~measured at fair value of our portfolio due to investing capital raised through the Offering into real estate debt. As of December 31, 2016, our Loans had an average carrying value of $1,124.0 million and our CMBS investments had an average carrying value of $109.0 million, while as of December 31, ~~2015, the Loans had an average carrying value of $719.2 million and~~2020 (dollars in thousands):


Type	Property Type	Par Value	Preferred Return
Preferred Equity 1	Retail	$2,500	12.5%
		$2,500

The following table shows selected data from our ~~CMBS investments had an average carrying value of $84.8 million. The increase~~real estate owned assets in ~~the average carrying value of~~ our portfolio ~~was offset by a decrease in asset yields~~as of ~~100 basis point due to a shift in the composition of the portfolio predominately to lower yielding senior loans over the course of 2015 and into 2016.~~

~~Interest expense~~

~~Interest expense for the year ended~~ December 31, ~~2016 increased to $23.2 million compared to interest expense for the year ended December 31, 2015 of $12.3 million, primarily due to increase~~2020 (dollars in average borrowings of approximately $259.2 million year over year and payment of various extension fees on the Repo Facilities, of which approximately $287.5 million is an increase due to the issuance of a CLO issued on October 19, 2015. During the years ended December 31, 2016 and 2015, our total average borrowing outstanding was $643.8 million and $384.6 million, respectively. The increase in interest expense also equates to a 40 basis points increase in rates on interest-bearing liabilities due to the extension fees paid to our borrowers on the Repo Facilities and increases in LIBOR index rate during the year.thousands):


Type	Property Type	Carrying Value
Real Estate Owned 1	Office	$26,510
		$26,510

~~Expenses from operations~~

~~Expenses from operations for the years ended December 31, 2016 and 2015 were made up of the following (in thousands):~~

Year Ended December 31,
2016 2015
Asset management and subordinated performance fee $ 9,504
$ 7,615
Acquisition fees and acquisition expenses 806
7,916
Administrative services expenses ⁽¹⁾
4,376
644
Professional fees 5,467
4,353
Other expenses ⁽²⁾
2,336
1,346
Total expenses from operations $ 22,489
$ 21,874

~~________________________~~

⁽¹⁾ During the years 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.

⁽²⁾ ~~Other expenses include board of directors and insurance expenses.~~

The increase in our expenses from operations was primarily related to asset management, administrative services expenses, other expenses and professional fees. During the years ended December 31, 2016 and 2015, we incurred asset management and subordinated performance fees of $9.5 million and $7.6 million, respectively, an increase of $1.9 million due to incurring a full year of asset management fees for the year ended December 31, 2016 as there was no waiver of asset management fee during 2016 as was the case for 2015. The entire $9.5 million in the asset management and subordinated performance fee line is composed of asset management fees, as there was no subordinated performance fee for 2016 due to applicable conditions not having been satisfied. Additionally, we have incurred approximately $4.4 million of administrative service expenses for the year ended December 31, 2016, related to general and administrative expense reimbursement, of which approximately $1.0 million and $3.4 million was attributable to our Advisor and the Former Advisor, respectively. Additionally, we have incurred approximately $1.1 million more in professional fees during year ended December 31, 2016 compared to December 31, 2015 due to an increase in consulting and legal fees, slightly offset by a decrease in audit fees.

Liquidity and Capital Resources

Our principal demands for cash will be funding our loan investments, ~~payment of fees~~continuing debt service obligations, distributions to our stockholders and ~~reimbursements owed to the Advisor,~~ the payment of our operating and administrative expenses, continuing debt service obligations and distributions to our stockholders. We currently believe that we have sufficient liquidity and capital resources available for all anticipated uses, including the origination of loan investments, required debt service and the payment of cash dividends.expenses.

~~We expect~~The Company expects to use additional debt and equity financing as a source of capital. ~~Our~~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. ~~We anticipate~~In addition, in 2020 the Company raised $10.9 million through sales of common and preferred equity to institutional and individual investors. The Company anticipates that ~~adequate~~our debt and equity financing sources and our anticipated cash ~~will be~~ generated from operations will be adequate to fund our ~~operating and administrative expenses, continuing debt service obligations and the payment~~anticipated uses of ~~distributions.~~capital.

In addition to our current mix of financing sources, wethe 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.

Table of Contents

Collateralized Loan Obligations

On January 15, 2020, the Company called all of the outstanding notes issued by BSPRT 2017-FL2 Issuer, Ltd., a wholly owned indirect subsidiary of the Company. The outstanding principal of the notes on the date of the call was $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, 2020 and December 31, 2019 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 27 and 41 mortgage assets having a principal balance of $417.9 million and $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, 2020 and December 31, 2019 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 59 and 49 mortgage assets having a principal balance of $852.1 million and $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, Ltd.

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, Ltd.

Repurchase Agreements, Commercial Mortgage Loans

As of December 31, ~~2017, we have~~2020, the Company has repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM ~~Repo Facility"), Goldman Sachs Bank USA (the "GS~~ 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, ~~GS Repo Facility,~~ USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").

The ~~JPM~~ Repo Facility has a maturity date of June 12, 2019 plus a one-year extension at the Company's option and provides up to $300 million in advances. The GS Repo Facility has a maturity date of December 27, 2018 with a one-year extension at the Company’s option,Facilities are financing sources through which may be exercised upon the satisfaction of certain conditions, and provides up to $250 million in advances. The USB Repo Facility matures on June 15, 2020, with 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, and provides up to $100.0 million in advances. The CS Repo Facility matures on August 30, 2018 and provides up to $250.0 million in advances. Prior to the end of each calendar quarter, the Company may ~~request~~pledge one or more mortgage loans to the financing entity in exchange for funds typically at an ~~extension~~advance rate of between 65% to 80% of the ~~termination date for an additional 364 days from~~principal amount of the ~~end of such calendar quarter subject to the satisfaction of certain conditions and approvals.~~mortgage loan being pledged.

~~We expect~~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.

As of December 31, 2017 and December 31, 2016, there was $42.0 million and $257.7 million outstanding under the JPM Repo Facility, respectively. As of December 31, 2017, we had $13.5 million outstanding under the GS Repo Facility, $0.0 million outstanding under the USB Repo Facility and $10.1 million outstanding under the CS Repo Facility. The Company had no advances under the GS Repo Facility, no advances under the USB Repo Facility and no advances under the CS Repo Facility as of December 31, 2016.

The Company entered into the Barclays Facility on September 19, 2017. The Barclays Facility provides for a senior secured $75.0 million revolving line of credit and bears interest at per annum rates equal to one of two base rates plus an applicable margin. The Barclays Facility has a maturity of September 19, 2019, subject to an extension term of one year, and provides for quarterly interest-only payments, with all principal and interest outstanding being due on the maturity date. The Company expects to use advances on the Barclays Facility to finance the origination of eligible loans, including first lien mortgage loans, junior mortgage loans, mezzanine loans, and participation interests therein. As of December 31, 2017, the Company had no advances under the Barclays Facility.

The Repo Facilities generally provide that in the event of a decrease in the value of ~~the Company's~~our collateral, the lenders can demand additional collateral. Should the value of ~~the Company’s~~our collateral decrease as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in ~~the Company’s~~our liquidity position.

Table of Contents

The details of our Repo Facilities at December 31, 2020 and December 31, 2019 are as follows (dollars in thousands):


As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense(1)		Ending Weighted Average Interest Rate		Initial 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/A		9/20/2021
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 Facility	Committed 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 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.

Other financing and loan participation - Commercial Mortgage Loans

~~We entered into a financing arrangement with Pacific Western Bank for term financing ("PWB Financing") on May 17, 2017. The PWB Financing provided~~On March 23, 2020, the Company ~~with $36.2~~transferred $15.2 million ~~and is collateralized by~~of its interest in a ~~portfolio asset~~term loan to Sterling National Bank ("SNB") via a participation agreement. During 2020, the Company's outstanding loan increased resultant of ~~$54.2 million.~~future fundings, leading to an increase in amount outstanding via the participation agreement. The ~~PWB Financing initially matures~~Company incurred $0.5 million of interest expense on ~~June 9, 2019, with two one-year extension option at~~SNB for the ~~Company’s option.~~year ended December 31, 2020. As of December 31, ~~2017, we had $26.2~~2020 there was an outstanding balance of $31.4 million. The loan matures on February 9, 2023.

Table of Contents

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, 2020 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 twelve months ended December 31, 2020. As of December 31, 2020, there was no outstanding balance under the ~~PWB Financing.~~lending agreement.

~~CMBS~~Repurchase Agreements - Real Estate Securities

The Company has entered into various Master Repurchase Agreements ~~("MRAs"~~(the "MRAs")

~~We entered into various MRAs~~ that allow usthe 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 to 90~~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, ~~2017~~2020 and ~~2016, we entered into six MRAs, of which one and three were~~2019 (dollars in ~~use for each respective periods presented, described below (in~~ thousands):


							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (1)		Interest Rate		Days 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 International	22,440		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, LLC	178,304		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

________________________

Amount Weighted Average
Counterparty Outstanding Accrued Interest
Collateral Pledged^(*)
Interest Rate Days to Maturity
As of December 31, 2017
J.P. Morgan Securities LLC $ 39,035
$ 11
$ 56,044
3.32 % 26
Total $ 39,035
$ 11
$ 56,044
3.32 % 26

As of December 31, 2016
J.P. Morgan Securities LLC $ 59,122
$ 96
$ 92,658
2.55 % 6
Citigroup Global Markets, Inc. 3,879
1
4,850
2.11 % 26
Wells Fargo Securities, LLC 3,638
4
4,850
2.05 % 13
Total/Weighted Average $ 66,639
$ 101
$ 102,358
2.50 % 8

~~________________________~~

^(*)~~Collateral includes $56.0~~(1) Includes $72.2 million and ~~$53.3~~$68.5 million ~~Tranche C~~ of ~~Company issued~~ CLO notes, held by the Company, which ~~eliminates~~is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

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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 respectively:


	As of December 31, 2020
	Amount Outstanding								Average Outstanding Balance
	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4
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 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

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.

During 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.

During 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.

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Private Placements

Since February 2018, we have been conducting offerings of our common stock, Series A Preferred Stock, and Series C Preferred Stock in offerings exempt from the registration requirements of the Securities Act. The following table summarizes the issuance of common stock in these offerings (dollars in thousands, except share amounts):


	Total
	Shares Issued	Proceeds
Balance, December 31, 2019	12,136,262	$	201,225
January 2020	284,983	4,762
February 2020	365,051	6,100
March 2020	—	—
April 2020	—	—
May 2020	—	—
June 2020	—	—
July 2020	—	—
August 2020	—	—
September 2020	—	—
October 2020	—	—
November 2020	—	—
December 2020	—	—
Balance, December 31, 2020	12,786,296	$	212,087

As of December 31, 2020, we had no outstanding binding purchase commitments for common stock.

The following table summarizes the issuance of Series A Preferred Stock in these offerings (dollars in thousands, except share amounts):


	Total
	Shares Issued	Proceeds
Balance, December 31, 2019	40,496	$	202,549
January 2020	—	—
February 2020	14	70
March 2020	—	—
April 2020	—	—
May 2020	—	—
June 2020	—	—
July 2020	—	—
August 2020	—	—
September 2020	—	—
October 2020	—	—
November 2020	—	—
December 2020	—	—
Balance, December 31, 2020	40,510	$	202,619

As of December 31, 2020, we had no outstanding binding purchase commitments for Series A Preferred Stock.

There were no issuances of Series C Preferred Stock during the year ended December 31, 2020.

As of December 31, 2020, we had no outstanding binding purchase commitments for Series C Preferred Stock.

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The following tables present the activity in the Company's Series A Preferred Stock for the periods ended December 31, 2020 and December 31, 2019, respectively (dollars in thousands, except share amounts):


Series A Preferred Stock	Shares	Amount
Beginning Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	1	7
Offering costs	—	(23)
Amortization of offering costs	—	94
Ending Balance, December 31, 2020	40,515	$	202,292

Series A Preferred Stock	Shares	Amount
Beginning Balance, December 31, 2018	29,249	$	145,786
Issuance of Preferred Stock	11,247	56,233
Dividends paid in Preferred Stock	4	24
Offering costs	—	—
Amortization of offering costs	—	101
Ending Balance, December 31, 2019	40,500	$	202,144

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 Stock	Shares	Amount
Beginning Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	—	—
Dividends paid in Preferred Stock	—	—
Offering costs		(11)
Amortization of offering costs	—	7
Ending Balance, December 31, 2020	1,400	$	6,962


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

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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 March 2016,~~Distributions on our common stock are payable when authorized and declared by our board of directors authorized and declared ongoing monthly distributions at a rate equivalent to $2.0625 per annum, per share. In August 2017, our board of directors 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 stockholders 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's~~Our 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, ~~2017~~2020 and ~~2016 (in~~2019 (dollars in thousands):


Year Ended December 31, 2020
Payment Date	Amount Paid in Cash		Amount Issued under DRIP
January 2, 2020	$	4,154	$	1,211
February 5, 2020	4,177		1,210
March 2, 2020	3,919		1,130
April 1, 2020	5,413		—
May 1, 2020	—		—
June 1, 2020	—		—
July 1, 2020	9,463		2,679
August 1, 2020	—		—
September 1, 2020	—		—
October 1, 2020	9,540		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.

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Year Ended December 31, 2017

Payment Date
Amount Paid in Cash Amount Issued under DRIP
January 3, 2017 $ 3,575
$ 2,007
February 1, 2017 3,560
1,957
March 1, 2017 3,231
1,770
April 1, 2017 3,621
1,926
May 1, 2017 3,536
1,846
June 1, 2017 3,692
1,887
July 3, 2017 3,607
1,809
August 1, 2017 3,755
1,854
September 1, 2017 2,580
1,283
October 2, 2017 2,513
1,232
November 1, 2017 2,615
1,263
December 4, 2017 2,543
1,217
Total $ 38,828
$ 20,051


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

Year Ended December 31, 2016

Payment Date Amount Paid in Cash Amount Issued under DRIP
January 4, 2016
$ 3,225

$ 2,324
February 2, 2016
3,337

2,159
March 2, 2016
3,057

2,099
April 1, 2016
3,342

2,188
May 2, 2016
3,296

2,068
June 1, 2016
3,446

2,112
July 1, 2016
3,361

2,034
August 3, 2016
3,423

2,070
September 1, 2016
3,465

2,045
October 3, 2016
3,371

1,968
November 3, 2016
3,505

2,028
December 3, 2016
3,423

1,952
Total $ 40,251
$ 25,047

The following table shows the sources for the payment of distributions to common stockholders for the periods presented ~~(in~~(dollars in thousands):


	Year Ended December 31,
	2020				2019
Distributions:
Cash distributions paid	$	36,798			$	45,763
Distributions reinvested	8,883				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 DRIP	8,883		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

~~The following table compares cumulative distributions paid to cumulative net income (in accordance with GAAP) for the period from November 15, 2012 (date of inception) through~~ ~~December 31, 2017~~ ~~(in thousands):~~

For the period from November 15, 2012 (date of inception) to December 31, 2017
Distributions paid:
Common stockholders in cash $ 113,906
Common stockholders pursuant to DRIP / offering proceeds 70,475
Total distributions paid $ 184,381
Reconciliation of net income:
Net interest income $ 174,578
Realized loss on sale of real estate securities (1,734 )
Realized gain on sale of commercial mortgage loan 232
Acquisition fees and expenses (17,305 )
Other operating expenses (66,094 )
Net income $ 89,677
Cash flows provided by operations $ 72,272

Cash Flows

Cash Flows for the Year Ended December 31, ~~2017~~2020

Net cash provided by operating activities for the year endedDecember 31, ~~2017~~2020 was ~~$8.4~~$115.3 million. Cash inflows were primarily driven by ~~an increase in~~ net income ~~to $33.8~~of $54.7 million ~~offset by~~and net ~~cash outflows~~proceeds of ~~$24.0~~$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.

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Net cash used in investing activities for the year endedDecember 31, ~~2017~~2019 was ~~$332.8~~$969.2 million. Cash outflows were primarily driven by the origination and acquisition of ~~$837.0~~$1,321.6 million of commercial mortgage ~~loans.~~loans and $369.9 million of CMBS. Outflows were offset by proceeds from principal repayments of ~~$381.9~~$756.1 million received on commercial mortgage loans, held for investment and proceeds from sale of commercial mortgage loans, ~~held for sale~~held-for-sale of ~~$121.7~~$0.0 million.

Net cash provided by financing activities for the year ended December 31, ~~2017~~2019 was ~~$290.1~~$828.6 million. Cash inflows were primarily driven byby: proceeds of ~~$700.9~~$639.9 million from issuance of ~~two CLOs,~~one CLO, BSPRT ~~2017-FL1 and BSPRT 2017-FL2. This was partially offset by cash outflows of $192.0 million~~2019-FL5; proceeds from net ~~repayments~~borrowing on the Repo Facilities ~~$27.6 million~~of $103.1 million; proceeds from net ~~payment~~borrowing on our CMBS MRAs of $349.8 million. Inflows were partially offset by the payment of ~~$38.8~~$60.6 million in cash distributions to stockholders, ~~$20.5~~$13.8 million of stock repurchases and repayments on ~~CDOs~~CLOs of ~~$143.1 million~~

~~Cash Flows for the Year Ended December 31, 2016~~

~~Net cash provided by operating activities for the year ended December 31, 2016 was $35.0 million. Cash inflows were primarily driven by an increase in net income to $30.0~~$343.2 million.

~~Net cash provided by investing activities for the~~ ~~year endedDecember 31, 2016~~ was $139.4 million. Cash inflows were primarily driven by proceeds from the sale of real estate securities of $79.1 million, proceeds from the sale of commercial mortgage loans of $44.4 million and principal repayments of $69.6 million, partially offset by additional funding of $53.6 million on existing loans.

~~Net cash used in financing activities for the year ended~~ ~~December 31, 2016~~ was $71.2 million. Cash outflows were primarily driven by $51.4 million from net borrowings on the JPM Repo Facility offset by $50.6 million from net payment on our CMBS MRAs, the payments of $40.3 million in cash distributions to stockholders, $19.0 million of stock repurchases and repayments on CDOs of $9.2 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 ~~expected~~ interest ~~payments,~~obligations (as amounts are not fixed or determinable), as of December 31, ~~2017~~2020 are summarized as follows ~~(in~~(dollars in thousands):


	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
Unfunded loan commitments (1)	$	59,692	$	161,300	$	7,700	$	—	$	228,692

Repurchase agreements - commercial mortgage loans	139,896		136,444		—		—		276,340
Repurchase agreements - real estate securities	186,828		—		—		—		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

________________________

Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total
Unfunded loan commitments ⁽¹⁾
$ 36,475
$ 47,063
$ —
$ —
$ 83,538
JPM Repo Facility —
42,042
—
—
42,042
GS Repo Facility 13,500
—
—
—
13,500
CS Repo Facility 10,148
—
—
—
10,148
CLOs ⁽²⁾
—
—
—
842,812
842,812
JPM MRA 39,035
—
—
—
39,035
PWB Financing —
26,183
—
—
26,183
Total $ 99,158
$ 115,288
$ —
$ 842,812
$ 1,057,258

~~________________________~~

⁽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 ~~$56.0~~$267.1 million of ~~Tranche C~~CLO notes, ~~issued by 2015 CLO Issuer, $16.0 million of Tranche E notes and $14.9 million of Tranche F notes issued by 2017-FL2 Issuer, which are~~ held by the Company, ~~and~~which are eliminated within the ~~Collateralized~~collateralized loan ~~obligations~~obligation line of the consolidated balance sheets as of December 31, ~~2017.~~2020.

~~In addition, we have contractual obligations under our agreements with the Advisor as described below.~~

Related Party Arrangements

Benefit Street Partners L.L.C.

Amended Advisory Agreement

On January 19, 2018, wethe Company entered into an amendment toand 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 ~~our Board,~~the Company's board of directors, which consists solely of the Company’s independent directors, negotiated, approved and recommended that the ~~Board~~board of directors approve, the amended Advisory Agreement. The Committee engaged independent legal counsel to assist the Committee in negotiating the amended Advisory Agreement.

~~The~~Pursuant to the amended Advisory Agreement, the Advisor ~~will continue to provide~~provides 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. The Advisor shall continue to be entitled to an asset management fee equal to one and one-half percent (1.5%)~~board 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.

directors. The initial term of the amended Advisory Agreement iswas three-years and ~~shall be~~was 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.

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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.

•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

~~On February 14, 2018 (the “Commitment Date”),~~Refer to Note 9 - Stock Transactions for a description of the ~~Company entered into stock purchase agreements (collectively, the “Purchase Agreements”), by and between the Company and certain officers~~Company’s private placements. Officers of the Company and ~~certain owners,~~other employees ~~and associates~~ of the Advisor and its affiliates ~~(collectively, the “Manager~~(“Manager Investors”), ~~pursuant to which~~as well as members of the ~~Manager Investors committed to purchase an aggregate amount~~Company's board of ~~up to approximately $10.0 million of shares of~~directors, have acquired common stock ofand 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 ~~in one~~ or ~~more closings (each, a “Closing,” and collectively,~~ the “Closings”). The timing of any Closing, and the amount of shares of common stock to be sold at such Closing, will be determined by the Company in its sole discretion, subject to certain limitations. As described in the Purchase Agreements, the Company may enter into additional Purchase Agreements with other investors within 12 months of the Commitment Date.

The Purchase Agreements provide that the purchase price for the shares of common stock shall be equal to 90% of GAAP book value per share of the common stock as of December 31, 2017 (“Book Value”). However, in consideration of them being the first investors to commit to purchase shares in the offering, the Company agreed to sell the shares to the Manager Investors at 88% of Book Value. The Company further agreed that if subsequent investors in the offering are permitted to acquire common stock for less than 90% of Book Value, the effective purchase price of the Manager Investors will be subject to downward adjustment. The Purchase Agreements also provide that the Company will enter into a liquidity event, such as a listing of the common stock, within three years of the Commitment Date, subject to certain restrictions. The Purchase Agreements contain customary representations, warranties and covenants and indemnification provisions.Advisor.

The Manager Investors have agreed with the Advisor not to sell or otherwise transfer the ~~shares of common stock,~~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 ~~Company’s amended and restated share repurchase program~~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 ~~entry into~~issuance of shares to the ~~Purchase Agreements~~Manager Investors and the terms ~~therein including the offering price.~~

~~Acquisition of Loans~~

In December 2017, we purchased a commercial mortgage loan from an entity that is an affiliate of our Advisor, for an aggregate purchase price of $17.1 million. The loan is included in "Commercial mortgage loans, held-for-investment" in the consolidated balance sheet. The purchase of the commercial mortgage loan and the $17.1 million purchase price were approved by the Company’s board of directors and the Nominating and Corporate Governance Committee, which consists solely of independent directors.

~~Advisory Agreement Fees and Reimbursements~~

~~Pursuant to the Advisory Agreement, we are or were required to make the following payments and reimbursements to the Advisor:~~

~~We reimburse our Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to our executive officers.~~

~~We pay our Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholder’s equity as calculated pursuant to the Advisory Agreement.~~

We will pay our 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.

Until September 2017, we paid our 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 us to acquire real estate securities.

We reimburse our Advisor for insourced expenses incurred by our Advisor on our behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by us to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by us to acquire real estate securities investments.

Until September 29, 2016, the Former Advisor served as the Company's advisor and the Company paid the Former Advisor certain fees and expense reimbursements pursuant to its advisory agreement with the Former Advisor. The types of fees and reimbursements paid to the Former Advisor were similar to those paid to the Advisor prior to September 2017. In addition, prior to January 2016 we paid dealer-manager fees and selling commissions to an affiliate of the Former Advisor, prior to February 2016 we paid transfer agent fees to an affiliate of the Former Advisor, and prior to November 2015 we paid various financial services fees to an affiliate of the Former Advisor.offering.

Loan ~~Acquisition~~Acquisitions

On February 22, 2018, the Company purchased commercial mortgage loans from an entity that is an affiliate of ~~our~~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~~On April 18, 2018, the Company sold $23.3 million of these commercial mortgage loans ~~are expected to be sold~~ into a ~~securitization vehicle through our TRS segment.~~CMBS securitization. The remaining $4.5 million of these commercial mortgage loans, 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 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. 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 lending agreement with SBL for the year ended December 31, 2020. As of December 31, 2020 there was no outstanding balance under the lending agreement.

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The table below shows the costs incurred due to arrangements with our Advisor and ~~with respect to periods prior to September 30, 2016, the Former Advisor and~~ its affiliates during the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018 and the associated amounts payable as of December 31, ~~2017~~2020 and ~~2016 (in~~2019 (dollars in thousands):. See Note 911 - Related Party Transactions and Arrangements for further detail.


	Year Ended December 31,						Payable as of December 31,
	2020		2019		2018		2020		2019
Acquisition expenses (1)	696		900		452		—		225
Administrative services expenses	13,120		16,363		13,446		2,940		1,238
Asset management and subordinated performance fee	15,178		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,
2017 2016 2015 2017 2016
Total commissions and fees incurred from the Former Dealer Manager in connection with the offering $ —
$ —
$ 37,092
$ —
$ —
Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager⁽¹⁾
—
—
7,442
480
480
Acquisition fees and expenses ⁽²⁾
4,197
806
7,916
—
—
Administrative services expenses ⁽³⁾
6,765
4,376
644
3,480
1,000
Advisory and investment banking fee —
6
56
—
—
Asset management and subordinated performance fee 9,273
9,504
7,615
2,315
2,439
Other related party expenses 394
84
364
146
145
Total $ 20,629
$ 14,776
$ 61,129
$ 6,421
$ 4,064

~~________________________~~

⁽¹⁾ During 2016, the Company received reimbursement of excess payment of $0.8 million of offering costs from the Former Advisor. The reimbursement resulted in an increase to our Additional Paid-In Capital.

⁽²⁾ Total acquisition fees and expenses paid during the years ended December 31, ~~2017~~2020, 2019 and ~~2016~~2018 were ~~$10.2~~$7.1 million, $8.4 million and ~~$0.8~~$8.1 million respectively, of which ~~$6.0~~$6.4 million, $7.5 million and ~~$0.0~~$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, ~~2017~~2020, 2019 and ~~2016.~~2018.

⁽³⁾ ~~During~~(2) These are related to reimbursable costs incurred for the ~~year ended December 31, 2015,~~increase in loan origination activities and are included in Other expenses in the ~~Company previously disclosed Administrative services expenses within~~Company's consolidated statements of operations.

(3) The related party payable includes $1.8 million of payments made by the ~~Acquisition fees and acquisition expenses line~~Advisor to third party vendors on behalf of ~~this table. For~~ the ~~periods ended December 31, 2017 and December 31, 2016 the amounts are presented separately and the change was applied retrospectively.~~Company.

The ~~payables~~amounts payable as of December 31, ~~2017~~2020 and ~~2016~~2019 in the table above are included in Due to affiliates on ~~our~~the Company's consolidated balance sheets.

Off Balance Sheet Arrangements

We currently have no off balance sheet arrangements as of December 31, ~~2017~~2020 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 ~~equivalents~~substitutes to ~~our~~GAAP net income or ~~loss~~loss. We believe our presentations of FFO and MFFO assist investors in analyzing and comparing our operating and financial performance between reporting periods. In addition, we believe MFFO is a useful financial metric for shareholders as ~~determined under~~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 ~~accepted accounting principles ("GAAP").~~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 ~~February~~February 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, property~~certain 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 ~~commercial~~commercial 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 result~~securities and real estate owned assets.

Table of operating as a mortgage REIT. Although we have the ability to acquire real property, we have not acquired any at this time and as such have not had any FFO adjustments to our net income or loss computed in accordance with GAAP.Contents

Publicly registered, non-listed REITs typically operate differently from exchange traded REITs because they generally have a limited life followed by a liquidity event or other targeted exit strategy. Non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation as

compared to later years when the proceeds from their continuous public offering have been fully invested and when the Company is seeking to implement a liquidity event or other exit strategy. However, it is likely that we will make investments past the acquisition stage, albeit at a substantially lower level.

The origination and acquisition of debt investments is a key operating feature of our business plan that results in the generation of income and cash flows in order to make distributions to stockholders. Acquisition fees paid to our Advisor and acquisition expenses reimbursed to our Advisor in connection with the origination and acquisition of debt investments are evaluated in accordance with GAAP to determine if they should be expensed in the period incurred or capitalized and amortized over the life of the investment. Acquisition fees and acquisition expenses that are deemed to be expensed in the period incurred are included in the computation of net income or loss from operations. The amortization of acquisition fees and acquisition expenses that are able to be capitalized are included in the computation of net income or loss from operations. All such acquisition fees and acquisition expenses are paid in cash when incurred that would otherwise be available to distribute to our stockholders. When proceeds from the Offering have not been sufficient to fund the payment of acquisition fees and the reimbursement of acquisition expenses to our Advisor, such fees and expenses have been paid from other sources, including financings, operating cash flow, net proceeds from the sale of investments or from other cash flows. We believe that acquisition fees and acquisition expenses incurred by us negatively impact our operating performance during the period in which such investments are originated or acquired by reducing cash flows and therefore the potential distributions to stockholders. However, we only add back acquisition fees and acquisition expenses reflected in net income or loss from operations in the current period.

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 ~~loan~~credit 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 ~~loan~~credit losses inherent in our portfolio at the reporting date and, where appropriate, a specific allowance for ~~loan~~credit 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 when~~each 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 ~~loan~~credit 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 ~~loan~~credit losses or impairment of real estate securities recorded may be difficult to recover.

MFFO is a metric used by management to evaluate our performance against other non-listed REITs which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter and is not intended to be used as a liquidity measure. Although management uses the MFFO metric to evaluate future operating performance, this metric excludes

~~certain key operating items and other adjustments that may affect our overall operating performance. MFFO is not equivalent to net income or loss as determined under GAAP. We believe that our use~~Table of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to investors.Contents

We believe that FFO provides useful context for understanding MFFO, and we believe that MFFO is a useful non-GAAP measure for non-listed REITs. It is helpful to management and stockholders in assessing our future operating performance once our organization and offering and acquisition and development stages are complete, because it eliminates from net income non-cash fair value adjustments on our real estate securities and acquisition fees and acquisition expenses that are incurred as part of our investment activities. However, MFFO may not be a useful measure of our operating performance or as a comparable measure to other typical non-listed REITs if we do not continue to operate in a similar manner to other non-listed REITs, including if we were to extend our acquisition and development stage or if we determined not to pursue an exit strategy.

However, MFFO does have certain limitations. For instance, the effect of any amortization or accretion on investments originated or acquired at a premium or discount, respectively, is not reported in MFFO. In addition, realized gains or losses from acquisitions and dispositions and other adjustments listed above are not reported in MFFO, even though such realized gains or losses and other adjustments could affect our operating performance and cash available for distribution. Stockholders should note that any cash gains generated from the sale of investments would generally be used to fund new investments. Any mark-to-market or fair value adjustments may be based on many factors, including current operational or individual property issues or general market or overall industry conditions.

Neither FFO nor MFFO is equivalent to net income or loss or cash flow provided by operating activities determined in accordance with GAAP and should not be construed to be more relevant or accurate than the GAAP methodology in evaluating our operating performance. Neither FFO nor MFFO is necessarily indicative of cash flow available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Furthermore, neither FFO nor MFFO should be considered as an alternative to net income or loss as an indicator of our operating performance.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.

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, ~~2017, 2016~~2020, December 31, 2019 and ~~2015 (in~~December 31, 2018 (dollars in thousands):


	Year Ended December 31,
	2020		2019		2018
Funds From Operations:
Net income	$	54,746	$	83,924	$	52,825
Impairment losses on real estate owned assets	398		—		—
Depreciation and amortization	2,233		—		—
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 expenses	696		900		452
Unrealized (gain)/loss on financial instruments	1,102		(2,081)		1,611
Provision/(benefit) for credit losses	13,296		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 this non-cash charge, modified funds from operations would have been $84.1 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.

Year Ended December 31,
2017 2016 2015
Funds From Operations:
Net income $ 33,779
$ 29,990
$ 24,933
Funds from operations $ 33,779
$ 29,990
$ 24,933
Modified Funds From Operations:
Funds from operations $ 33,779
$ 29,990
$ 24,933
Amortization of premiums, discounts and fees on investments, net (2,554 ) (2,336 ) (1,561 )
Acquisition fees and acquisition expenses 4,197
806
7,916
Impairment losses on real estate securities —
310
—
Unrealized (gain) loss on financial instruments (230 ) 247
—
Loan loss (recovery)/provision (715 ) 1,293
318
Modified funds from operations $ 34,477
$ 30,310
$ 31,606

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.

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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. ~~During the periods covered by this report, we did not engage in interest rate hedging activities. We do not hold or issue derivative contracts for trading or speculative purposes.~~ We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.

As of December 31, ~~2017~~2020 and ~~2016,~~2019, our portfolio included 64133 and 62135 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 ~~(in thousands):~~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 presence 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 Rates	December 31, 2020		December 31, 2019
(-) 25 Basis Points	2.16	%	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, 2017 December 31, 2016
(-) 25 Basis Points (1.61 )% (1.94 )%
Base Interest Rate — % — %
(+) 50 Basis Points 3.23 % 3.89 %
(+) 100 Basis Points 6.45 % 7.78 %

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, ~~2017.~~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, ~~2017,~~2020, our internal control over financial reporting was effective.

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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, ~~2017,~~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.

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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 ~~2018~~2021 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 ~~2018~~2021 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 ~~2018~~2021 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 ~~2018~~2021 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 ~~2018~~2021 annual meeting of stockholders.

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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, ~~2017~~2020 (and are numbered in accordance with Item 601 of Regulation S-K).



Exhibit No.		Description
~~3.1~~⁽¹⁾ 3.1*		Articles of Amendment and Restatement, effective ~~August 16, 2017.~~March 10, 2021.
~~3.1~~⁽²⁾3.2(1)		Articles Supplementary of Benefit Street Partners Realty Trust, Inc., dated June 22, 2018, relating to Series A Convertible Preferred Stock
3.3(2)		Articles Supplementary of Benefit Street Partners Realty Trust, Inc., dated December 11, 2018, relating to Additional Shares of Series A Convertible Preferred Stock
3.4(3)		Articles Supplementary of Benefit Street Partners Realty Trust, Inc., dated October 18, 2019, relating to Series C Convertible Preferred Stock
3.5(4)		Articles Supplementary of Benefit Street Partners Realty Trust, Inc., dated December 5, 2019, relating to Additional Shares of Series A Convertible Preferred Stock
3.6(5)		Amended and Restated Bylaws.
4.1⁽²⁾(7)		Amended and Restated Agreement of Limited Partnership of Benefit Street Partners Realty Operating Partnership, L.P., dated as of December 31, 2014.
4.2⁽³⁾(8)		Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of Benefit Street Partners Realty Operating Partnership, L.P., dated as of February 9, 2017.
~~10.1~~⁽³⁾4.3(6)		Description of Securities of the Registrant
10.1(8)†		Amended and Restated Employee and Director Incentive Restricted Share Plan.
10.2⁽³⁾(8)†		Form of Director Restricted Share Award Agreement.
10.3⁴⁾(9)		Uncommitted Master Repurchase Agreement, dated as of June 18, 2014, between the Company JPM Loan, LLC and JPMorgan Chase Bank, National Association.
10.4⁽⁵⁾(10)		Amendment No.1 to Master Repurchase Agreement, dated as of June 24, 2015, by and between the Company, JPM Loan, LLC and JP Morgan Chase Bank, National Association.
10.5⁽⁶⁾(11)		Amendment No. 2 to Master Repurchase Agreement, dated as of September 28, 2015, between the Company, JPM Loan, LLC and JPMorgan Chase Bank, National Association.
10.6⁽⁷⁾(12)		Amendment No. 3 to Master Repurchase Agreement, dated as of December 30, 2015, between the Company, JPM Loan, LLC and JPMorgan Chase Bank, National Association.
10.7⁽⁸⁾(13)		Amendment No. 4 to Master Repurchase Agreement, dated as of October 5, 2016, between the Company, JPM Loan, LLC and JPMorgan Chase Bank, National Association.
10.8⁽⁹⁾(14)		Guarantee Agreement, dated as of June 18, 2014, between the Company and JPMorgan Chase Bank, National Association.
10.9⁽¹⁰⁾(15)		Indenture, dated October 19, 2015, by and among RFT 2015-FL1 Issuer Ltd., as issuer, RFT 2015-FL1 Co-Issuer LLC, as issuer, Realty Finance Operating Partnership L.P., as advancing agent, and U.S. Bank National Association, as trustee, note administrator, paying agent, calculation agent, transfer agent, custodian, securities intermediary, backup advancing agent and notes registrar.
~~10.10~~⁽¹¹⁾	Form of Director and Officer Indemnification Agreement.
~~10.12~~⁽¹²⁾10.10(16)		~~Master Repurchase Agreement, dated December 27, 2016, between RFT GS Loan, LLC and Goldman Sachs Bank USA.~~
~~10.13~~⁽¹²⁾	~~Guaranty, dated December 27, 2016, between the Company and Goldman Sachs Bank USA.~~
~~10.14~~⁽¹³⁾	Indenture, dated as of June 29, 2017, by and among BSPRT 2017-FL1 Issuer, Ltd., BSPRT 2017-FL1 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S. Bank National Association, as trustee and note administrator.
~~10.15~~⁽¹⁴⁾	Amended and Restated Uncommitted Master Repurchase Agreement, dated as of June 12, 2017, by and between BSPRT JPM Loan, LLC and JP Morgan Chase Bank, National Association.
10.11*		Amendment No. 5 to Amended and Restated Uncommitted Master Repurchase Agreement, d ated as of October 6 , 2020, by and between BSPRT JPM Loan, LLC and JP Morgan Chase Bank, National Association.
~~10.16~~⁽¹⁴⁾10.12(16)		Amended and Restated Guarantee Agreement, dated as of June 12, 2017, by and between the Company and JPMorgan Chase Bank, National Association.



~~10.17~~⁽¹⁴⁾10.13(16)						Master Repurchase and Securities Contract, dated as of June 15, 2017, between BSPRT USB Loan, LLC and U.S. Bank National Association.
~~10.18~~⁽¹⁴⁾10.14(16)						Payment Guaranty, dated as of June 15, 2017, by and between the Company and U.S. Bank National Association.
~~10.19~~⁽¹⁵⁾10.15(17)						Master Repurchase Agreement, dated as of August 31, 2017, by and among Column Financial, Inc., Credit Suisse AG, Alpine Securitization Ltd., the Company and BSPRT Finance Sub-Lender I, LLC.
~~10.20~~⁽¹⁵⁾10.16(17)						Guaranty, dated as of August 31, 2017, by and between the Company and Column Financial, Inc.

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~~10.21~~⁽¹⁶⁾10.17(18)		Credit Agreement, dated as of September 19, 2017, by and among the Company, BSPRT BB Loan, LLC, BSPRT Finance Sub-Lender II, L.L.C., Barclays Bank PLC, as sole lead arranger and bookrunner, Barclays Bank PLC, as administrative agent, and the lenders from time to time partiers thereto.
~~10.22~~⁽¹⁶⁾10.18(18)		Guarantee and Collateral Agreement, dated as of September 19, 2017, by and among the Company, BSPRT BB Loan, LLC, BSPRT Finance Sub-Lender II, L.L.C. and Barclays Bank PLC, as administrative agent for the secured parties.
~~10.23~~⁽¹⁷⁾10.19(19)		Indenture, dated as of November 29, 2017, by and among BSPRT 2017-FL2 Issuer, Ltd., as issuer, BSPRT 2017-FL2 Co-Issuer, LLC, as co-issuer, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S. Bank National Association, as trustee, note administrator and custodian.
~~10.24~~⁽¹⁸⁾10.20(20)		Amended and Restated Advisory Agreement, dated as of January 19, 2018, by and among Benefit Street Partners Realty Trust, Benefit Street Partners Realty Operating Partnership, L.P. and Benefit Street Partners, L.L.C.
~~10.25~~⁽¹⁹⁾10.21(21)		~~Form~~Indenture, dated as of ~~Purchase Agreement.~~April 5, 2018, by and among BSPRT 2018-FL3 Issuer, Ltd., BSPRT 2018-FL3 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S. Bank National Association, as trustee, note administrator and custodian.
21^*10.22(5)		Indenture, dated as of October 12, 2018, by and among BSPRT 2018-FL4 Issuer, Ltd., BSPRT 2018-FL4 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S. Bank National Association, as trustee, note administrator and custodian.
10.23(22)		Master Repurchase and Securities Contract, dated November 21, 2018, among the Company, BSPRT WFB LOAN, LLC and Wells Fargo Bank, National Association.
10.24(22)		Guarantee Agreement, dated November 21, 2018, between the Company and Wells Fargo Bank, National Association.
10.25(22)		Master Repurchase and Securities Contract, dated March 15, 2019, among the Company, BSPRT BB FLOAT, LLC, BSPRT BB Fixed, LLC and BARCLAYS BANK PLC.
10.26(22)		Guarantee Agreement, dated March 15, 2019, between the Company and BARCLAYS BANK PLC.
10.27(23)		Indenture, dated as of May 30, 2019, by and among BSPRT 2010-FL5 Issuer, Ltd., BSPRT 2019-FL5 Co-Issuer, LLC, Benefit Street Partners Realty Operating Partnership, L.P., as advancing agent, and U.S. Bank National Association, as trustee, note administrator and custodian.
10.28(24)		Loan and Security Agreement, dated February 11, 2020 and as amended by Agreement of Amendment dated March 26, 2020, among BSPRT OP SUB I, LLC, Benefit Street Partners Realty Trust, Inc., Benefit Street Partners Realty Trust LP, LLC, Benefit Street Partners Realty Operating Partnership, L.P., and Security Benefit Life Insurance Company and the other lenders from time to time parties thereto, and Cortland Capital Market Services LLC, as administrative agent.
10.29*		Loan and Security Agreement, dated as of February 11, 2020, as amended by that certain Agreement of Amendment No. 1, dated March 26, 2020 and that certain Consent and Amendment No. 2 to Loan and Security Agreement, dated as of July 14, 2020, among BSPRT OP Sub I, LLC, Benefit Street Partners Realty Trust, Inc., Benefit Street Partners Realty Trust LP, LLC, and Benefit Street Partners Realty Operating Partnership, L.P. and Security Benefit Life Insurance Company and the other lenders from time to time parties thereto, and Cortland Capital Market Services LLC, as administrative agent.
21*		Subsidiaries of the Registrant
~~23.1~~^* 23.1*		Consent of Ernst & Young LLP
~~23.2~~^* 31.1*		~~Consent of KPMG LLP~~
~~31.1~~^*	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
~~31.2~~^* 31.2*		Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a - 14(a) or 15(d) - 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32^* 32*		Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~101~~^* 101*		XBRL (eXtensible Business Reporting Language). The following materials from Benefit Street Partners Realty Trust, Inc.’s Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2020, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.

____________________________________________

*Filed herewith.


~~(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 January 6, 2015.~~


~~(3)~~	~~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.~~


~~(4)~~	~~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.~~


~~(5)~~	~~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.~~


~~(6)~~	~~Filed as an exhibit to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 13 filed with the SEC on October 8, 2015.~~


~~(7)~~	~~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.~~


~~(8)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on October 12, 2016.~~


~~(9)~~	~~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.~~


~~(10)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on October 23, 2015.~~


~~(11)~~	~~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.~~


~~(12)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on January 3, 2017.~~


~~(13)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on July 6, 2017.~~


~~(14)~~	~~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.~~


~~(15)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 7, 2017.~~


~~(16)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 25, 2017.~~


~~(17)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on December 5, 2017.~~


~~(18)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on January 23, 2018.~~


~~(19)~~	~~Filed as an exhibit to our current report on Form 8-K filed with the SEC on February 16, 2018.~~

† 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 June 26, 2018.

(2) Filed as an exhibit to our current report on Form 8-K filed with the SEC on December 11, 2018.

(3) Filed as exhibit 3.1 to our current report on Form 8-K filed with the SEC on October 18, 2019.

(4) Filed as exhibit 3.1 to our current report on Form 8-K filed with the SEC on December 5, 2019.

(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.

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(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 quarterly report on Form 10-Q for the quarter ended September 30, 2016 filed with the SEC on November 14, 2016.

(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.

(17) Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 7, 2017.

(18) Filed as an exhibit to our current report on Form 8-K filed with the SEC on September 25, 2017.

(19) Filed as an exhibit to our current report on Form 8-K filed with the SEC on December 5, 2017.

(20) Filed as an exhibit to our current report on Form 8-K filed with the SEC on January 23, 2018.

(21) Filed as an exhibit to our current report on Form 8-K filed with the SEC on April 11, 2018.

(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 5, 2019.

(24) Filed as exhibit 10.1 to our quarterly report on Form 10-Q for the quarter ended March 31, 2020 filed with the SEC on May 15, 2020.

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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~~ ~~16th day of March, 2018~~.

authorized.



	Benefit Street Partners Realty Trust, Inc.
Date: March 10, 2021	By	/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.

Name

Capacity

Date

/s/ Richard J. Byrne

Chief Executive Officer and President

March 10, 2021

Richard J. Byrne

(Principal Executive Officer)

~~Name~~

~~Capacity~~

~~Date~~

~~/s/ Richard J. Byrne~~

~~Chief Executive Officer and President~~

~~March 16, 2018~~

~~Richard J. Byrne~~

~~(Principal Executive Officer)~~

/s/ Jerome S. Baglien

Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

March ~~16, 2018~~10, 2021

Jerome S. Baglien

/s/ Elizabeth K. Tuppeny

Lead Independent Director

March ~~16, 2018~~10, 2021

Elizabeth K. Tuppeny

/s/ Buford Ortale

Director

March ~~16, 2018~~10, 2021

Buford Ortale

/s/ Jamie Handwerker

Director

March ~~16, 2018~~10, 2021

Jamie Handwerker

/s/ Peter McDonough

Director

March ~~16, 2018~~10, 2021

Peter McDonough

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	Page
Reports of Independent Registered Public Accounting Firm		F-~~F-2~~2
Consolidated Balance Sheets		F-~~F-4~~4
Consolidated Statements of Operations		F-~~F-5~~5
Consolidated Statements of Comprehensive Income		F-~~F-6~~6
Consolidated Statements of Changes in Stockholders' Equity		F-~~F-7~~7
Consolidated Statements of Cash Flows		F-~~F-8~~8
Notes to Consolidated Financial Statements		F-~~F-10~~10
Financial Statement Schedule:
Schedule IV: Mortgage Loans on Real Estate		F-~~F-42~~51

F-1

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

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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 ~~sheet~~sheets of Benefit Street Partners Realty Trust, Inc. (the “Company”) as of December 31, ~~2017,~~2020 and 2019, the related consolidated ~~statement~~statements of operations, comprehensive income, ~~changes in~~ stockholders' equity and cash flows for each of the ~~year~~three years in the period ended December 31, ~~2017,~~2020, and the related notes and financial statement schedule IV (collectively referred to as the “consolidated financial ~~statements“~~statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, ~~2017,~~2020 and 2019, and the results of its operations and its cash flows for each of the ~~year~~three years in the period ended December 31, ~~2017,~~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’s~~Company'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 ~~audit~~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 ~~audit~~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~~Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our ~~audit~~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 ~~include~~included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our ~~audit~~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 ~~audit provides~~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

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


Description of the Matter			Allowance 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 Audit			With 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, 2018~~

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~The Board of Directors and Stockholders~~

~~Benefit Street Partners Realty Trust, Inc.:~~

We have audited the accompanying consolidated balance sheets of Benefit Street Partners Realty Trust, Inc. (formerly Realty Finance Trust, Inc.) and subsidiaries (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2016. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule titled Schedule IV - Mortgage Loans on Real Estate as of December 31, 2016. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Benefit Street Partners Realty Trust, Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the years in the three‑year period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

~~/s/ KPMG LLP~~

New York, New York

March ~~29, 2017~~10, 2021

F-3

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Audited)


	December 31, 2020		December 31, 2019
ASSETS
Cash and cash equivalents	$	82,071	$	87,246
Restricted cash	10,070		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, respectively	2,693,848		2,762,042
Commercial mortgage loans, held-for-sale, measured at fair value	67,649		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, respectively	171,136		386,316
Derivative instruments, measured at fair value	25		1,119
Other real estate investments, measured at fair value	2,522		2,557
Receivable for loan repayment (1)	98,551		89,317
Accrued interest receivable	15,295		16,308
Prepaid expenses and other assets	8,538		5,322
Intangible lease asset, net of amortization	13,546		14,377
Operating right of use asset, net of amortization	0		5,979
Real estate owned, net of depreciation	26,510		35,333
Receivable for unsettled trades	0		266
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 loans	276,340		252,543
Repurchase agreements - real estate securities	186,828		394,359
Mortgage note payable	29,167		29,167
Other financing and loan participation - commercial mortgage loans	31,379		0
Derivative instruments, measured at fair value	403		1,581
Interest payable	2,110		4,958
Distributions payable	15,688		6,912
Accounts payable and accrued expenses	5,125		10,925
Due to affiliates	9,525		4,789
Operating lease liability	0		6,136
Deferred rent revenue	0		150
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, respectively	6,962		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, respectively	0		0
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, respectively	446		441
Additional paid-in capital	912,725		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

___________________

December 31, 2017 December 31, 2016
ASSETS
Cash and cash equivalents $ 83,711
$ 118,048
Restricted cash 7,997
5,021
Commercial mortgage loans, held for investment, net of allowance of $1,466 and $2,181 1,402,046
1,046,556
Commercial mortgage loans, held-for-sale —
21,179
Commercial mortgage loans, held-for-sale, measured at fair value 28,531
—
Real estate securities, available for sale, at fair value —
49,049
Derivative instruments, at fair value 132
—
Receivable for loan repayment ⁽¹⁾
49,085
401
Accrued interest receivable 8,152
5,955
Prepaid expenses and other assets 4,007
1,916
Total assets $ 1,583,661
$ 1,248,125
LIABILITIES AND STOCKHOLDERS' EQUITY
Collateralized loan obligations $ 826,150
$ 278,450
Repurchase agreements - commercial mortgage loans 65,690
257,664
Other financing - commercial mortgage loans 25,698
—
Repurchase agreements - real estate securities 39,035
66,639
Derivative instruments, at fair value 357
—
Interest payable 1,544
897
Distributions payable 3,917
5,591
Accounts payable and accrued expenses 4,510
1,170
Due to affiliates 6,421
4,064
Total liabilities $ 973,322
$ 614,475
Commitment and Contingencies (See Note 8)

Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of December 31, 2017 and 2016 $ —
$ —
Common stock, $0.01 par value, 949,999,000 shares authorized, 31,834,072 and 31,884,631 shares issued and outstanding as of December 31, 2017 and 2016, respectively 320
319
Additional paid-in capital 704,101
704,500
Accumulated other comprehensive income (loss) —
(500 )
Accumulated deficit (94,082 ) (70,669 )
Total stockholders' equity 610,339
633,650
Total liabilities and stockholders' equity $ 1,583,661
$ 1,248,125

~~_______________________~~

⁽¹⁾ Includes ~~$48.7~~$98.6 million and $89.3 million of cash held by the servicer related to CLO loan payoffs ~~pledged to the CLOs~~ as of December 31, ~~2017.~~

2020 and December 31, 2019.

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

F-4

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Audited)

Years Ended December 31,
2017 2016 2015
Interest income:
Interest income $ 89,564
$ 79,404
$ 59,393
Less: Interest expense 32,359
23,169
12,268
Net interest income 57,205
56,235
47,125
Expenses:
Asset management and subordinated performance fee 9,273
9,504
7,615
Acquisition fees and acquisition expenses 4,197
806
7,916
Administrative services expenses 6,765
4,376
644
Professional fees 5,444
5,467
4,353
Other expenses 3,837
2,336
1,346
Total expenses 29,516
22,489
21,874
Other (income)/loss:
Loan loss (recovery)/provision (715 ) 1,293
318
Realized (gain) loss on sale of real estate securities (172 ) 1,906
—
Realized (gain) loss on sale of commercial mortgage loan held-for-sale (120 ) —
—
Realized (gain) loss on sale of commercial mortgage loan, held-for-sale, measured at fair value (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 derivatives 17
—
—
Realized (gain) loss on derivatives (555 ) —
—
Total other (income)/loss $ (6,315 ) $ 3,756
$ 318
Income (loss) before taxes 34,004
29,990
24,933
Provision for income tax 225
—
—
Net income $ 33,779
$ 29,990
$ 24,933

Basic net income per share $ 1.06
$ 0.95
$ 1.03
Diluted net income per share $ 1.06
$ 0.95
$ 1.03
Basic weighted average shares outstanding 31,772,231
31,659,274
24,253,905
Diluted weighted average shares outstanding 31,784,889
31,666,504
24,259,169


	Year Ended December 31,
	2020		2019		2018
Interest Income:
Interest income	$	179,872	$	195,299	$	152,288
Less: Interest expense	66,556		90,418		70,000
Net interest income	113,316		104,881		82,288
Revenue from real estate owned	4,299		3,169		0
Total Income	$	117,615	$	108,050	$	82,288
Expenses:
Asset management and subordinated performance fee	15,178		16,226		10,299
Acquisition expenses	696		900		452
Administrative services expenses	13,120		16,363		13,446
Professional fees	10,964		11,631		8,318
Real estate owned operating expenses	3,653		2,802		0
Depreciation and amortization	2,233		507		0
Other expenses	3,312		3,771		4,887
Total expenses	$	49,156	$	52,200	$	37,402
Other (income)/loss:
Provision/(benefit) for credit losses	13,296		3,007		3,370
Impairment losses on real estate owned assets	398		0		0
Realized (gain)/loss on extinguishment of debt	(3,678)		0		0
Realized (gain)/loss on sale of real estate securities	10,137		0		107
Realized (gain)/loss on sale of commercial mortgage loan, held-for-sale	(184)		25		9
Realized (gain)/loss on sale of real estate owned assets, held-for-sale	(1,851)		0		0
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, measured at fair value	75		(312)		237
Unrealized (gain)/loss on other real estate investments, measured at fair value	32		(47)		0
Unrealized (gain)/loss on derivatives	995		(1,722)		1,374
Realized (gain)/loss on derivatives	12,486		4,324		(1,827)
Total other (income)/loss	$	15,775	$	(32,557)	$	(8,018)
Income before taxes	52,684		88,407		52,904
Provision/(benefit) for income tax	(2,062)		4,483		$	79
Net income	$	54,746	$	83,924	$	52,825


Net income applicable to common stock	$	39,826	$	66,914	$	49,181

Basic net income per share	$	0.90	$	1.60	$	1.44
Diluted net income per share	$	0.90	$	1.60	$	1.44
Basic weighted average shares outstanding	44,384,813		41,859,142		34,268,707
Diluted weighted average shares outstanding	44,398,879		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,
	2020		2019		2018
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

Years Ended December 31,
2017 2016 2015
Net income $ 33,779
$ 29,990
$ 24,933
Unrealized gain/(loss) on available-for-sale securities 500
1,754
(1,947 )
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc. $ 34,279
$ 31,744
$ 22,986

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 Shares	Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
Balance, December 31, 2017	31,834,072	$	320	$	704,101	$	—	$	(94,082)	$	610,339
Issuance of common stock	7,533,834	75		124,260		—		—		124,335
Common stock repurchases	(809,023)	(8)		(15,077)		—		—		(15,085)
Common stock issued through distribution reinvestment plan	739,052	8		14,015		—		—		14,023
Share-based compensation	5,775	—		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, 2018	39,303,710	$	395	$	827,558	$	(459)	$	(94,266)	$	733,228
Issuance of common stock	4,601,904	46		76,846		—		—		76,892
Common stock repurchases	(741,853)	(7)		(13,806)		—		—		(13,813)
Common stock issued through distribution reinvestment plan	746,654	7		13,903		—		—		13,910
Share-based compensation	6,400	—		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, 2019	43,916,815	$	441	$	903,310	$	(978)	$	(85,968)	$	816,805
Issuance of common stock	650,034	6		10,880		—		—		10,886
Common stock repurchases	(579,467)	(6)		(10,253)		—		—		(10,259)
Common stock issued through distribution reinvestment plan	511,899	5		8,809		—		—		8,814
Share-based compensation	10,770	—		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, 2020	44,510,051	$	446	$	912,725	$	(8,256)	$	(106,471)	$	798,444

Convertible Stock Common Stock
Number of Shares Amount Number of Shares Par Value Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity
Balance, December 31, 2014 1,000
$ 1
15,472,192
$ 155
$ 340,874
$ (307 ) $ (10,216 ) $ 330,507
Issuance of common stock —
—
15,428,195
155
385,000
—
—
385,155
Common stock repurchases —
—
(360,719 ) (4 ) (8,550 ) —
—
(8,554 )
Common stock offering costs, commissions and dealer manager fees —
—
—
—
(45,917 ) —
—
(45,917 )
Common stock issued through distribution reinvestment plan —
—
842,946
8
20,153
—
—
20,161
Share-based compensation —
—
2,666
—
30
—
—
30
Net income —
—
—
—
—
—
24,933
24,933
Distributions declared —
—
—
—
—
—
(50,039 ) (50,039 )
Other comprehensive loss —
—
—
—
—
(1,947 ) —
(1,947 )
Balance, December 31, 2015 1,000
1
31,385,280
314
691,590
(2,254 ) (35,322 ) 654,329
Common stock repurchases —
—
(537,209 ) (5 ) (12,965 ) —
—
(12,970 )
Common stock offering costs⁽¹⁾
—
—
—
—
793
—
—
793
Common stock issued through distribution reinvestment plan —
—
1,031,812
10
25,037
—
—
25,047
Share-based compensation —
—
4,748
—
44
—
—
44
Net income —
—
—
—
—
—
29,990
29,990
Distributions declared —
—
—
—
—
—
(65,337 ) (65,337 )
Conversion of convertible stocks (1,000 ) (1 ) —
—
1
—
—
—
Other comprehensive loss —
—
—
—
—
1,754
—
1,754
Balance, December 31, 2016 —
—
31,884,631
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 plan —
—
1,016,165
12
20,039
—
—
20,051
Share-based compensation —
—
5,984
—
97
—
—
97
Net income —
—
—
—
—
—
33,779
33,779
Distributions declared —
—
—
—
—
—
(57,192 ) (57,192 )
Other comprehensive income —
—
—
—
—
500
—
500
Balance, December 31, 2017 —
$ —
31,834,072
$ 320
$ 704,101
$ —
$ (94,082 ) $ 610,339

~~_______________________~~

⁽¹⁾During 2016, the Company received reimbursement of excess payment of $0.8 million from the Former Advisor for previously paid Offering cost. Please refer to Note 9 of the consolidated financial statements for additional details of this reimbursement.

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

F-7

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	For the Years Ended December 31,
	2020		2019		2018
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 costs	9,585		9,584		12,681
Share-based compensation	193		156		157
Realized (gain)/loss from sale of real estate securities	10,137		0		107
Realized (gain)/loss from sale of real estate owned, held-for-sale	(1,851)		0		0
Realized (gain)/loss from extinguishment of debt	(3,678)		0		0
Unrealized (gain)/loss on commercial mortgage loans held-for-sale	75		(359)		237
Unrealized (gain)/losses on derivative instruments	995		(1,722)		1,374
Unrealized loss on other real estate securities	32		0		0
Depreciation and amortization	2,233		0		0
Recognition of deferred rent revenue	(150)		0		0
Increase/(decrease) for credit losses	13,296		3,007		3,370
Impairment losses on real estate owned assets	398		0		0
Origination of commercial mortgage loans, held-for-sale	(267,553)		(1,020,702)		(621,597)
Proceeds from sale of commercial mortgage loans, held-for-sale	312,206		975,243		573,010
Changes in assets and liabilities:
Accrued interest receivable	7,423		(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 affiliates	4,736		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 investment	1,228,225		756,141		753,921
Purchase of other real estate investments	0		(2,511)		0
Purchase of real estate owned and capital expenditures	(2,824)		(42,018)		0
Proceeds from sale of real estate owned, held-for-sale	22,472		0		0
Proceeds from sale of commercial mortgage loans, held-for-sale	77,164		0		16,910
Purchase of real estate securities	(148,580)		(369,911)		(39,510)

Proceeds from sale/repayment of real estate securities	346,201		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 stock	47		63,197		146,245
Common stock repurchases	(10,259)		(13,813)		(15,085)
Reimbursements/(payments) of offering costs and fees related to stock issuances	0		0		(887)

For the Years Ended December 31,
2017 2016 2015
Cash flows from operating activities:
Net income $ 33,779
$ 29,990
$ 24,933
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization and (discount accretion), net (2,554 ) (2,336 ) (1,561 )
Accretion of deferred commitment fees (1,372 ) (1,535 ) (1,068 )
Amortization of deferred financing costs 4,650
4,048
2,819
Share-based compensation 97
44
30
Realized loss on sale of real estate securities —
1,906
—
Impairment losses on real estate securities —
310
—
Change in unrealized gains on commercial mortgage loans held-for-sale (247 ) 247
—
Change in unrealized losses on derivative instruments 17
—
—
Loan loss (recovery)/provision (715 ) 1,293
318
Origination of commercial mortgage loans, held-for-sale, measured at fair value (156,101 ) —
—
Proceeds from sale of commercial mortgage loans, held for sale, at fair value 132,093
—
—
Changes in assets and liabilities:
Accrued interest receivable (2,197 ) 940
(1,426 )
Prepaid expenses and other assets (5,441 ) (85 ) 723
Accounts payable and accrued expenses 3,341
360
(1,707 )
Due to affiliates 2,357
(263 ) 1,812
Interest payable 647
105
560
Net cash provided by operating activities $ 8,354
$ 35,024
$ 25,433
Cash flows from investing activities:
Origination and purchase of commercial mortgage loans, held for investment $ (836,961 ) $ (53,640 ) $ (793,731 )
Receivable for loan repayment (48,684 ) —
—
Purchase of real estate securities —
—
(85,463 )
Proceeds from sale of real estate securities 34,888
79,082
—
Purchase of derivative instruments (592 ) —
—
Proceeds from sale of commercial mortgage loans, held for sale 121,658
44,355
—
Principal repayments received on commercial mortgage loans, held for investment 381,933
67,396
126,336
Principal repayments received on real estate securities 15,000
2,218
3,010
Net cash provided by (used in) investing activities $ (332,758 ) $ 139,411
$ (749,848 )
Cash flows from financing activities:
Proceeds from issuances of common stock $ —
$ —
$ 385,203
Common stock repurchases (20,546 ) (18,965 ) (2,555 )
Reimbursements/(payments) of offering costs and fees related to common stock issuances⁽¹⁾
—
793
(45,357 )
Borrowings under collateralized loan obligation 700,862
—
292,484
Repayments of collateralized loan obligation (143,086 ) (9,150 ) —
Borrowings on repurchase agreements - commercial mortgage loans 652,978
233,855
423,538
Repayments of repurchase agreements - commercial mortgage loans (844,952 ) (182,430 ) (367,468 )
Borrowings on repurchase agreements - real estate securities 499,290
1,208,244
690,406
Repayments of repurchase agreements - real estate securities (526,894 ) (1,258,816 ) (599,464 )

F-8

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


Borrowings under collateralized loan obligation	0		639,899		1,161,002
Repayments of collateralized loan obligation	(182,680)		(343,191)		(478,177)
Borrowings on repurchase agreements - commercial mortgage loans	682,970		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 securities	2,675,218		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 loans	31,379		0		10,000
Repayments on other financing and loan participation - commercial mortgage loans	0		(10,000)		(26,182)
Borrowing on mortgage note payable	11,712		29,167		0
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 period	109,122		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	$	0	$	355
Interest paid	59,819		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-sale	76,979		0		16,750
Distribution payable	15,688		6,912		5,834
Commercial mortgage loans transferred from held-for-sale to held for investment	0		10,072		0
Real estate owned received in foreclosure	35,411		8,110		0

Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$	82,071	$	87,246	$	191,390
Restricted cash	10,070		21,876		13,029
Cash, cash equivalents and restricted cash, end of period	$	92,141	$	109,122	$	204,419

For the Years Ended December 31,
2017 2016 2015
Borrowings on other financing - commercial mortgage loans 36,200
—
—
Repayments on other financing - commercial mortgage loans (10,017 ) —
—
Decrease/(Increase) in restricted cash related to financing activities (2,976 ) 345
(5,298 )
Payments of deferred financing costs (11,964 ) (4,819 ) (5,704 )
Distributions paid (38,828 ) (40,251 ) (26,949 )
Net cash (used in) provided by financing activities: $ 290,067
$ (71,194 ) $ 738,836
Net change in cash and cash equivalents $ (34,337 ) $ 103,241
$ 14,421
Cash and cash equivalents, beginning of period 118,048
14,807
386
Cash and cash equivalents, end of period $ 83,711
$ 118,048
$ 14,807
Supplemental disclosures of cash flow information:
Income taxes paid $ —
$ —
$ 159
Interest paid 27,062
19,016
8,889
Supplemental disclosures of non-cash flow information:
Common stock issued through distribution reinvestment plan 20,051
25,047
20,161
Distributions payable 3,917
5,591
5,552
Loans transferred to commercial real estate loans, held-for-sale, transferred at fair value 100,005
21,179
—

~~_______________________~~

⁽¹⁾ During 2016, the Company received reimbursement of excess payment of $0.8 million from the Former Advisor for Offering costs. Please refer to Note 9 of the consolidated financial statements for additional details of this reimbursement.

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

F-9

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

Note 1 - Organization and Business Operations

Benefit Street Partners Realty Trust, Inc. (the "Company")~~, formerly known as Realty Finance Trust, Inc.,~~ 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 ~~advisory agreement executed on September 29, 2016 (the “Advisory Agreement”), as amended~~Amended and ~~restated by the amended and restated advisory agreement, executed on~~Restated Advisory Agreement, dated January 19, ~~2018.~~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. 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 ~~is in partnership with Providence Equity Partners L.L.C., a global private equity firm. 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. ~~Prior to September 29, 2016, Realty Finance Advisor, LLC ("Former Advisor") was the Company's advisor. The Former Advisor was controlled by AR Global Investments, LLC ("AR Global").~~

The Company ~~may~~ also ~~invest~~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 ~~accompanying~~Company'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 ~~annual~~interim 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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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

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~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

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.

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 ~~sheet~~sheets in accordance with ~~ASC~~Financial 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 the~~activities. The cost is amortized over the life of the ~~loan. Pursuant to~~loan and recognized in interest income in the ~~Advisory Agreement,~~Company's consolidated statements of operations. Acquisition expenses paid on future funding amounts are expensed within the ~~Advisor is entitled~~acquisition expenses line in the Company's 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 ~~acquisition fee~~insurance limit. Cash equivalents include short-term, liquid investments in money market funds with original maturities of ~~1.0%~~90 days or less when purchased.

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 ~~principal amount funded by the Company to originate~~related repurchase agreements or acquire commercial mortgage loans (or anticipated net equity funded by the Company in the case of acquisition of real estate securities) until the aggregate purchase price for all investments acquired reaches $600,000,000 and reimbursement for insourced acquisition expenses of 0.5%. In September 2017, 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.derivative transaction.

Commercial Mortgage Loans

~~Held-for-Investment~~Held 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 ~~loan~~credit 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 ~~exit~~commitment 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~~commitment fees is recognized in interest income in the Company's consolidated statements of ~~operation.~~operations.

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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~~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.

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.

AsReal estate owned

Real estate owned (“REO”) assets represent real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase. REO assets are carried at their estimated fair value at acquisition and are 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 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 in an asset acquisition shall be allocated to the individual assets acquired or liabilities assumed based on their relative fair values and 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 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 obligations at a point in time.

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, ~~2017,~~2020 and December 31, 2019 were operating leases.

Separately, on October 15, 2019, the ~~fair value amount~~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 sheets and amortized using the straight-line method over the contractual ~~principal outstanding of commercial mortgage loans accounted for under the fair value option was $28.5 million. None~~life of the ~~Company's commercial mortgage loans accounted for under the fair value option are in default or greater than ninety days past due. For the year ended December 31, 2017, the~~

lease.

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~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 ~~realized gain~~basis for the projection of ~~$4.5~~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, ~~relating~~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-adoption		Transition Adjustment		Post-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 ~~sale~~Company’s accounting policies as a result of commercial mortgage loans that are accounted for under the fair value option. Acquisition expenses on originating these investments are expensed when incurred. As of December 31, 2016, the Company did not account for any of its commercial mortgage loans under the fair value option.this adoption.

Allowance for ~~Loan Losses~~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's~~commitments 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 as~~term, property type, occupancy and geographic location, financial performance of the ~~balance sheet date. The reserve is increased~~borrower, 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 operations~~external 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

For financial instruments where the ~~portfolio~~borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and ~~(ii)~~ the ~~amount~~repayment 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 fact~~collateral, the Company ~~has not experienced any losses, and takes into account current~~may elect to use as a practical expedient the fair value of the collateral ~~and economic conditions affecting~~at the ~~probability and severity of losses~~reporting date when ~~establishing~~determining the allowance for ~~loan~~credit 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 investment~~collectability, 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. ~~Ratings~~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. 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 relates~~Company also considers qualitative and environmental factors, including, but not limited to, ~~reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information~~economic and ~~events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms~~business conditions, nature and volume of the loan ~~agreement. This assessment is made on an individual loan basis each quarter based on~~portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such ~~factors as payment status, lien position, borrower financial resources and investment~~concentrations 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 valueits determination of the ~~collateral (for loans that~~allowance for credit losses.

Changes in the allowance for credit losses for the Company’s financial instruments are ~~dependent~~recorded in Provision/(benefit) for credit losses on the ~~collateral~~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 ~~repayment)~~unfunded loan commitments.

The Company has elected to not measure an allowance for credit losses for accrued interest receivable as it is ~~lower than~~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 ~~carrying value~~year ended December 31, 2020. Loans are charged off against the Provision/(benefit) for credit losses when all or a portion 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~~principal amount is determined to be ~~impaired~~uncollectible.

Past due and ~~designated~~nonaccrual status

Loans are placed on nonaccrual status and considered non-performing when full payment of principal and ~~they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use~~interest is unpaid for 90 days or more or where reasonable doubt exists as to timely collection, unless 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, generally when third party participations exist.

A loan is ~~also considered impaired if its~~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 accrual status when repayment of principal and interest is reasonably assured.

Troubled Debt Restructuring (“TDR”)

The Company classifies an individual financial instrument as a TDR when it has a reasonable expectation that the financial instrument’s contractual terms ~~are~~will be modified in a ~~troubled debt restructuring ("TDR"). A TDR occurs when a~~manner that grants concession ~~is granted and~~to the ~~debtor~~borrower who is experiencing financial ~~difficulties. Impairments on TDR loans are generally measured based~~difficulty. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the ~~present value of expected future cash flows discounted at the effective interest rate of the original loans.~~

financial instrument. The Company ~~designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii)~~determines the ~~loan has a maturity default; or (iii) in the opinion~~allowance for credit losses for financial instruments that are TDRs individually.

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Table 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.Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

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 ~~statement~~statements 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 ~~for~~sold. 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 has~~below 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.~~

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~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

~~Impairment of a security is considered other-than-temporary when (i) the~~ Company ~~has the intent~~intends to sell ~~the~~an impaired ~~security; (ii) it is~~real estate security or more likely than not ~~the Company~~ will be required to sell ~~the security; or (iii) the Company does not expect to recover~~such 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. If~~underlying assets in the ~~Company determines that an other-than-temporary impairment exists~~security, 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 charge~~unrealized loss within the Company’s AFS portfolio is recognized as an ~~impairment of assets on~~adjustment to the ~~Company's consolidated statement of operations. If a sale is not expected, the portion of the impairment charge related~~individual 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 ~~sheet~~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.

~~Cash and Cash Equivalents~~Deferred Financing Costs

Cash represents deposits 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.

~~Restricted Cash~~

~~Restricted cash primarily consists of cash pledged as margin on repurchase agreements.~~

~~Prepaid Expenses~~

~~Prepaid expenses consists of~~The deferred financing costs related to ~~our~~the Company's various Master Repurchase Agreements as well as certain prepaid subscription ~~costs.~~costs are included in Prepaid expenses and other assets on the consolidated balance sheets. Deferred financing cost on the Company's collateralized loan obligations ("CLO") are netted against the Company's CLO payable in the Collateralized loan 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

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.~~

~~Subject~~Company, 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 shares~~conditions. 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.

~~Calculations of our estimated per-share NAV will occur periodically, at the discretion~~description of the board of directors, provided that such calculations will be made at least annually. Following its calculation, our estimated per-share NAV will be disclosed in a periodic report. The most recent calculation of our estimated per-share NAV approved by the board of directors occurred on November 10, 2017 based on our net asset value as of September 30, 2017 and was equal to $19.02.

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 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

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~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

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, wethe 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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Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Offering and Related Costs

~~Prior~~Since 2018, the Company has from time to ~~January 2016, we were offering for sale a maximum~~time offered, and may in the future offer, shares of ~~$2.0 billion of~~the Company’s common stock ~~on a reasonable best efforts basis~~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 ~~"Offering"~~“Series C Preferred Stock,”)~~, pursuant to a~~ in private placements exempt from the registration ~~statement on Form S-11 filed with the SEC under~~requirements of the Securities Act of 1933, as amended. ~~Prior to the termination of the Offering, offering and related costs included all expenses incurred in~~In connection with ~~the Offering. Offering costs (other than selling commissions and the dealer manager fee) of~~these offerings, the Company were paid by the Former Advisor, and Realty Capital Securities, LLC (the "Former Dealer Manager") or their affiliates on behalf of the Company. Offering costs were reclassified from deferred costs to stockholders' equity on the day the Company commenced its operations. Offering costs included all expenses incurred by the Company in connection with its Offering as of the balance sheet date presented.incurs various offering costs. These offering costs include but ~~were~~are not limited to ~~(i)~~ legal, accounting, printing, mailing and filing ~~fees; (ii) escrow service related fees; (iii) reimbursement of the Former Dealer Manager for amounts it paid to reimburse the bona fide~~fees, and diligence expenses of ~~broker-dealers; and (iv) reimbursement to~~broker-dealers. Offering costs for the ~~Former Advisor for a portion of~~common stock are recorded in the ~~costs of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. The Company was obligated to reimburse~~Company’s stockholders’ equity, while the ~~Former Advisor or its affiliates, as applicable, for organizational and~~ offering costs ~~paid by them~~for the Preferred Stock are included within Series A Preferred Stock and Series C Preferred Stock, respectively, on ~~behalf of~~ the ~~Company to the extent organizational and offering costs (excluding selling commissions and the dealer manager fee) incurred by the Company in the Offering did not exceed~~ 2% ~~of gross offering proceeds. The Former Advisor was required to reimburse the Company to the extent that organization and offering and related costs paid by the Company exceeded~~ 2% of gross offering proceeds. As a result, these costs were only a liability of the Company to the extent aggregate selling commissions, the dealer manager fees and other organization and offering costs did not exceed ~~12%~~ ~~of the gross Offering proceeds determined at the end of the Offering. See Note 9 - Related Party Transactions and Arrangements.~~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 purchasing~~The purchase price for shares ~~pursuant to~~purchased through the DRIP ~~have~~is the ~~same rights~~lesser 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 ~~sheet~~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 1012 - Share-Based Compensation.

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 for the year ended December 31, 2017 was $0.2 million. There was no income tax provision~~provision/(benefit) for the years ended December 31, ~~2016~~2020, December 31, 2019 and ~~2015.~~December 31, 2018 were $(2.1) million, $4.5 million and $0.1 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, ~~2014~~2017 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.

~~F-14~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

The estimated tax characteristic of $1.80 distributions per common share declared during 2017 was $1.07 ordinary income and $0.73 return of capital. The estimated tax characteristics of the $2.06 distributions per common share declared during 2016 was $0.98 ordinary income and $1.08 return of capital.

The Company ~~utilize~~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, the recently passed Tax Cuts and Jobs Act ("TCJA") made many significant changes to the U.S. federal 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% (through taxable years ending in 2025), (3) the corporate alternative minimum tax is repealed, and (4) the backup withholding rate for U.S. stockholders is reduced to 24%. The amounts recorded in the consolidated statement of operations is provisional. Due to the timing of the enacted legislation, as well as the technical corrections, amendments or administrative guidance that could clarify the treatment of certain provisions, the Company will continue to evaluate its conclusions and update its estimates as necessary.

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, ~~such as~~including but not limited to: Treasury note futures and credit derivatives on various indices including CMBX and CDX.

F-16

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)~~(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 and the Company calculates 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 ~~attributable~~applicable to ~~the Company~~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 ~~three~~4 reportable segments based on how the chief operating decision maker reviews and manages the business. The ~~three~~4 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 conduit ~~operated~~ business ~~through~~in the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization ~~market at a profit.~~market.

•The real estate owned business represents real estate acquired by the Company through foreclosure, deed in lieu of foreclosure, or purchase.

See Note 1416 - Segment Reporting for further information regarding the Company's segments.

Redeemable Convertible Preferred Stock

~~Recently Adopted Accounting Pronouncements~~

~~In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE.~~ The ~~amendments change the evaluation~~Company’s outstanding Preferred Stock is classified outside of ~~whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests~~permanent equity in the ~~entity held through related parties that are under common~~consolidated balance sheets. Subject to certain conditions, the outstanding Preferred Stock is redeemable at the option of the holders of the Preferred Stock, outside of the control ~~with~~of the ~~reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. The Company adopted this guidance on January 1, 2017. The application~~Company. As set forth in the Articles Supplementary relating to each of ~~this guidance did not have a material impact on~~the Series A Preferred Stock and the Series C Preferred Stock (collectively, the “Articles Supplementary”) to the Company’s ~~consolidated financial statements.~~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 holder 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.

~~F-15~~

F-17

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

~~Future Adoption of Accounting Pronouncements~~

~~In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services~~Immediately prior to a ~~customer~~“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 ~~performed~~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 ~~principal~~national securities exchange or ~~agent capacity~~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 ~~recognize revenue in a gross or net manner based on its principal/agent designation. The Company adopted this guidance on January 1, 2018. The adoption~~take certain actions materially adverse to the holders of ~~this guidance did not have a material impact on~~ the ~~Company's consolidated financial statements.~~Preferred Stock.

Accounting Pronouncements Not Yet Adopted

~~In August 2016,~~On March 12, 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the US GAAP guidance on ~~how certain transactions should~~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 is effective upon issuance and generally can be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments.applied through December 31, 2022. The Company has not adopted ~~this guidance on January 1, 2018. The~~any of the optional expedients or exceptions through December 31, 2020, but will continue to evaluate the possible adoption of ~~this guidance did not have a material impact on~~any such expedients or exceptions during the ~~Company's consolidated financial statements.~~effective period as circumstances evolve.

In November 2016, the FASB issued guidance on the classification of restricted cash in the statement of cash flows. The amendment requires restricted cash to be included in the beginning-of-period and end-of-period total cash amounts. Therefore, transfers between cash and restricted cash will no longer be shown on the statement of cash flows. The Company adopted this guidance on January 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued guidance that changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance.

In February 2018, the FASB issued guidance that allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income into retained earnings. The amendments become effective January 1, 2019, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance.

~~F-16~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

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, 2020		December 31, 2019
Senior loans	$	2,698,823	$	2,721,325
Mezzanine loans	15,911		41,638
Total gross carrying value of loans	2,714,734		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, 2017 December 31, 2016
Senior loans $ 1,368,425
$ 901,907
Mezzanine loans 35,087
136,830
Subordinated loans —
10,000
Total gross carrying value of loans 1,403,512
1,048,737
Less: Allowance for loan losses 1,466
2,181
Total commercial mortgage loans, held-for-investment, net $ 1,402,046
$ 1,046,556

~~The following table presents the activity~~(1)As of December 31, 2020 and 2019, there have been no specific reserves for loans in ~~the Company's allowance for loan losses (dollars in thousands):~~

Year Ended December 31,
2017 2016
Beginning of period $ 2,181
$ 888
Loan loss (recovery)/provision (715 ) 1,293
Charge-offs —
—
Recoveries —
—
Ending allowance for loan losses $ 1,466
$ 2,181
non-performing status.

As of December 31, ~~2017~~2020 and ~~2016,~~December 31, 2019, the Company's total commercial mortgage loan portfolio, excluding commercial mortgage loans accounted for under the fair value option, was comprised of 69130 and 71122 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):

F-18

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020


	Year Ended December 31, 2020
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self Storage		Manufactured Housing		Total
Beginning Balance	$	322	$	202	$	249	$	23	$	4	$	103	$	0	$	18	$	921
Cumulative-effect adjustment upon adoption of ASU 2016-13	3,220		386		1,966		434		9		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	0		0		0		0		0		(427)		0		0		(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
	MultiFamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self Storage		Manufactured Housing		Total
Beginning Balance	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Cumulative-effect adjustment upon adoption of ASU 2016-13	239		40		150		30		1		57		28		5		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-sale, measured at fair value~~held for investment (dollars in thousands).:


	December 31, 2020				December 31, 2019
Loan Type	Par Value		Percentage		Par Value		Percentage
Multifamily	$	1,202,694	44.2	%	$	1,491,971	53.9	%
Office	517,464		19.0	%	414,772		15.0	%
Hospitality	403,908		14.8	%	446,562		16.1	%
Industrial	243,404		8.9	%	118,743		4.3	%
Mixed Use	102,756		3.8	%	58,808		2.1	%
Self Storage	86,424		3.2	%	67,767		2.4	%
Retail	78,550		2.9	%	111,620		4.0	%
Manufactured Housing	71,263		2.6	%	44,656		1.6	%
Land	16,400		0.6	%	16,400		0.6	%
Total	$	2,722,863	100.0	%	$	2,771,299	100.0	%

F-19

December 31, 2017 December 31, 2016
Loan Type Par Value Percentage Par Value Percentage
Multifamily $ 505,189
35.9 % $ 329,203
30.6 %
Office 455,698
32.4 % 340,944
31.6 %
Retail 209,598
14.9 % 154,684
14.4 %
Hospitality 184,025
13.1 % 143,582
13.3 %
Industrial 53,208
3.7 % 52,688
4.9 %
Mixed Use —
— % 56,136
5.2 %
Total ⁽¹⁾
$ 1,407,718
100.0 % $ 1,077,237
100.0 %

(1) Excludes $28.5 million in commercial mortgage loans held-for-sale, measured at fair value in the Company's TRS segment.

~~As of December 31, 2017 and 2016, the Company's total commercial mortgage loans excluding those held-for-sale, measured at fair value comprised of 3 and zero loans, respectively.~~

~~F-17~~

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

As of December 31, 2020 and 2019, the Company's total commercial mortgage loans, held-for-sale, measured at fair value was comprised of 3 and 7 loans, respectively. As of December 31, 2020 and 2019, the contractual principal outstanding of commercial mortgage loans, held-for-sale, measured at fair value was $67.6 million and $112.5 million, respectively. As of December 31, 2020 and 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, ~~excluding those~~ held-for-sale, measured at fair value (dollars in thousands).:


	December 31, 2020				December 31, 2019
Loan Type	Par Value		Percentage		Par Value		Percentage
Industrial	$	67,550	99.9	%	$	23,625	21.0	%
Multifamily	100		0.1	%	78,250		69.6	%
Retail	0		0	%	2,613		2.3	%

Hospitality	0		0	%	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.


	2020		2019		2018		2017		2016		2015		Prior		Total
Multifamily:
Risk Rating:
1-2 internal grade	$	583,550	$	349,588	$	188,975	$	0	$	0	$	0	$	3,488	$	1,125,601
3-4 internal grade	0		0		35,887		37,812		0		0		0		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	$	0	$	0	$	0	$	0	$	52,437
3-4 internal grade	0		12,872		29,425		0		0		0		0		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	$	0	$	0	$	0	$	507,025
3-4 internal grade	0		0		0		8,392		0		0		0		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	$	0	$	0	$	0	$	33,655	$	0	$	242,438
3-4 internal grade	0		0		0		0		0		0		0		0
Total Industrial Loans	$	119,193	$	89,590	$	0	$	0	$	0	$	33,655	$	0	$	242,438

Mixed Use:

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Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

December 31, 2017 December 31, 2016
Loan Type Par Value Percentage Par Value Percentage
Multifamily $ 28,531
100.0 % $ —
— %
Mixed Use —
— % —
— %
Industrial —
— % —
— %
Retail —
— % —
— %
Total $ 28,531
100.0 % $ —
— %


Risk Rating:
1-2 internal grade	$	30,246	$	0	$	59,451	$	12,839	$	0	$	0	$	0	$	102,536
3-4 internal grade	0		0		0		0		0		0		0		0
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	$	0	$	0	$	0	$	0	$	0	$	37,425
3-4 internal grade	0		160,079		115,026		90,612		0		0		0		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	$	0	$	44,908	$	0	$	0	$	0	$	0	$	86,213
3-4 internal grade	0		0		0		0		0		0		0		0
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	$	0	$	0	$	0	$	0	$	0	$	70,954
3-4 internal grade	0		0		0		0		0		0		0		0
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):


	Multifamily		Retail		Office		Industrial		Mixed Use		Hospitality		Self Storage		Manufactured Housing		Total
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	0		0		0		0		0		0		0		0		0
30-59 days past due (1)	37,812		0		0		0		0		0		0		0		37,812
60-89 days past due	0		0		0		0		0		0		0		0		0
90-119 days past due	0		0		0		0		0		0		0		0		0
120+ days past due (1)	0		0		0		0		0		57,075		0		0		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:



~~InvestmentRating~~Investment Rating						Summary Description
1						Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2						Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3						Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
4						Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5						Underperforming 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, ~~2017~~2020 and ~~2016,~~2019, the weighted average risk ratings of loans were 2.2 and 2.1, respectively. ~~As of~~ ~~December 31, 2017~~ ~~and 2016,~~

The following table represents the ~~Company did not have any~~allocation by risk rating for the Company's commercial mortgage loans, ~~that were past due on their payments, in non-accrual status or impaired.~~held for investment, measured at fair value:


December 31, 2020				December 31, 2019
Risk Rating	Number of Loans	Par Value		Risk Rating	Number of Loans	Par Value
1	0	$	0	1	0	0
2	104	2,232,045		2	113	2,452,330
3	22	384,040		3	8	298,994
4	4	106,778		4	1	19,975
5	0	0		5	0	0
	130	$	2,722,863		122	$	2,771,299

For the ~~year~~years ended December 31, ~~2017~~2020 and ~~2016,~~December 31, 2019, the activity in the Company's commercial mortgage loans, ~~held-for-investment~~held for investment portfolio was as follows ~~(in~~(dollars in thousands):

Year Ended December 31,
2017 2016
Balance at Beginning of Year $ 1,046,556
$ 1,124,201
Acquisitions and originations 837,861
53,640
Dispositions —
(44,355 )
Principal repayments (381,933 ) (66,490 )
Discount accretion and premium amortization 2,554
2,279
Loans transferred to commercial real estate loans, held-for-sale (100,005 ) (21,179 )
Unrealized losses on loans held-for-sale —
(247 )
Loan loss recovery/(provision) 715
(1,293 )
Fees capitalized into carrying value of loans (3,702 ) —
Balance at End of Year $ 1,402,046
$ 1,046,556


	Year Ended December 31,
	2020		2019
Balance at Beginning of Year	$	2,762,042	$	2,206,830
Cumulative-effect adjustment upon adoption of ASU 2016-13	(7,211)		—
Acquisitions and originations	1,287,720		1,326,983
Principal repayments	(1,223,490)		(771,774)
Discount accretion/premium amortization	6,146		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 allowance	427		6,922
Transfer to real estate owned	(35,064)		0
Transfer on deed in lieu of foreclosure to real estate owned	0		(14,937)
Balance at End of Year	$	2,693,848	$	2,762,042

~~F-18~~

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

During the year ended December 31, 2020, the Company wrote off a commercial mortgage loan, held for investment, with a carrying value of $14.4 million in exchange for the possession of a REO investment at a fair value of $14.0 million at the time of the transfer. This $14.0 million REO investment was comprised of $11.6 million of real property (land, building and improvements) and $2.4 million of personal property (furniture, fixture, and equipment). The transfer occurred when the Company took possession of the property by completing a foreclosure transaction in March 2020, resulting in a $0.4 million impairment loss 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 sold this REO asset during the year ended December 31, 2020 for a $1.4 million gain, presented net of direct selling costs associated with the disposition of the asset, 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 for the 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.

F-23

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Note 4 - Real Estate Securities

The following is a summary of the Company's real estate securities, CMBS (dollars in thousands):

Weighted Average
Number of Investments Interest Rate Maturity Par Value Fair Value
December 31, 2017 —
— % N/A $ —
$ —
December 31, 2016 6
5.8 % February 2020 $ 50,000
$ 49,049


December 31, 2020
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	3.0%	5/15/2022	$13,250	$12,657
CMBS 2	2.2%	6/26/2025	10,800	10,335
CMBS 3	2.5%	2/15/2036	40,000	38,292
CMBS 4	1.9%	6/15/2037	8,000	7,892
CMBS 5	2.1%	9/15/2037	24,000	23,297
CMBS 6	2.3%	6/15/2034	12,000	11,580
CMBS 7	1.5%	12/15/2036	20,000	18,975
CMBS 8	1.8%	12/15/2036	25,000	23,268
CMBS 9	2.3%	3/15/2035	25,665	24,840













December 31, 2019
Type	Interest Rate	Maturity	Par Value	Fair Value
CMBS 1	4.7%	5/15/2022	$13,250	$13,274
CMBS 2	3.8%	6/26/2025	12,131	12,151
CMBS 3	4.1%	2/15/2036	40,000	40,186
CMBS 4	3.7%	5/15/2036	18,500	18,535
CMBS 5	3.1%	5/15/2036	15,000	15,019
CMBS 6	3.2%	5/15/2037	13,500	13,525
CMBS 7	3.4%	5/15/2037	15,000	15,028
CMBS 8	3.2%	6/15/2037	7,000	7,013
CMBS 9	3.6%	2/15/2036	9,600	9,641
CMBS 10	3.5%	8/15/2036	10,000	10,027
CMBS 11	3.6%	6/15/2037	8,000	8,015
CMBS 12	3.3%	7/15/2038	13,000	13,022
CMBS 13	3.3%	9/15/2037	32,000	32,074
CMBS 14	3.7%	9/15/2037	24,000	24,084
CMBS 15	3.3%	10/19/2038	50,000	50,094
CMBS 16	3.7%	10/19/2038	26,000	26,029
CMBS 17	3.2%	6/15/2034	15,000	15,022
CMBS 18	3.5%	6/15/2034	6,500	6,509
CMBS 19	3.9%	6/15/2034	12,000	12,022
CMBS 20	3.1%	12/15/2036	20,000	20,021
CMBS 21	3.4%	12/15/2036	25,000	25,025

The Company classified its CMBS investments as ~~available-for-sale~~available for sale as of December 31, ~~2017~~2020 and ~~2016.~~December 31, 2019. These investments are reported at fair value in the consolidated balance ~~sheet~~sheets with changes in fair value recorded in accumulated other comprehensive ~~income~~ income/(loss). The ~~following table shows~~weighted average contractual maturity for CLO investments included within the ~~changes in fair value of the Company's~~ CMBS ~~investments (in thousands):~~

Amortized Cost Unrealized Gains Unrealized Losses Fair Value
December 31, 2017 $ —
$ —
$ —
$ —
December 31, 2016 $ 49,548
$ —
$ (499 ) $ 49,049

Asportfolio as of December 31, ~~2017, the Company held no CMBS positions. As~~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, ~~2016, the Company held six CMBS positions with an aggregate carrying value of $49.5 million~~2020 and ~~an unrealized loss of $0.5 million, of which two positions had a total unrealized loss of $0.2 million for a period greater than twelve months. One CMBS security was other than temporarily impaired at~~ December 31, ~~2016~~2019 was 14 and ~~losses of $0.3 million were recognized, within the impairment losses on real estate securities in the consolidated statement of operations for the year ended December 31, 2016.~~5 years.

For the year ended December 31, 2017, the Company has recognized a gain of approximately $0.2 million, recorded within realized (gain) loss on sale of real estate securities in the consolidated statement of operations. For the year ended December 31, 2016, the Company recognized losses of approximately $1.9 million on the sale of ten securities. The Company did not have any realized (gains) losses during the year ended December 31, 2015.

~~F-19~~

F-24

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~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 Cost		Credit Loss Allowance		Unrealized Gain		Unrealized Loss		Fair Value
December 31, 2020
CLO	$	123,444	$	0	$	0	$	(4,888)	$	118,556
SASB	55,948		0		0		(3,368)		52,580
Total	$	179,392	$	0	$	0	$	(8,256)	$	171,136
December 31, 2019
CLO	$	330,000	$	0	$	1	(881)		$	329,120
SASB	57,294		0		0		(98)		57,196
Total	$	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 amortized 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 Value				Unrealized Loss
	Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months		Securities with an unrealized loss less than 12 months		Securities with an unrealized loss greater than 12 months
December 31, 2020
CLOs	$	63,131	$	55,425	$	(2,824)	$	(2,064)
SASB	0		52,580		0		(3,368)
Total	$	63,131	$	108,005	$	(2,824)	$	(5,432)
December 31, 2019
CLOs	$	315,845	$	13,275	$	(863)	$	(17)
SASB	45,045		12,151		(67)		(31)
Total	$	360,890	$	25,426	$	(930)	$	(48)

As of December 31, 2020 and December 31, 2019, there were 7 securities and 2 securities, respectively with unrealized losses for a period greater than twelve 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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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

The following table provides information on the amounts of ~~gains (losses)~~gain/(loss) on the Company's real estate securities, CMBS, ~~available-for-sale~~available for sale (dollars in thousands):

Years Ended December 31,
2017 2016 2015
Unrealized gains/(losses) available-for-sale securities $ 19
$ 329
$ (1,947 )
Reclassification of net gains/(losses) on available-for-sale securities included in net income (loss) 481
1,425
—
Unrealized gains (losses) available-for-sale securities, net of reclassification adjustment $ 500
$ 1,754
$ (1,947 )


	Year Ended December 31,
	2020		2019		2018
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		0		0
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-sale~~available 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 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 sale securities.

The deterioration in fair value of real estate securities for both collateralized loan obligations and other securities as of December 31, 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 owned assets as of December 31, 2020 (dollars in thousands):


As of December 31, 2020
Acquisition Date	Property Type	Primary Location(s)	Land		Building and Improvements		Furniture, Fixtures and Equipment		Accumulated Depreciation		Real Estate Owned, net
October 2019 (1)	Office	Jeffersonville, 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 assets.

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 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	$	0	$	8,110	$	0	$	(86)	$	8,024
October 2019 (1)	Office	Jeffersonville, IN	1,887		25,554		0		(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 transaction.

Depreciation expense for the years ended December 31, 2020 and 2019 totaled $1.0 million and $0.2 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.

~~F-20~~

F-26

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

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 sheets 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 Amortization
August 2019	Hotel	Chicago, IL	$	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 a deed-in-lieu of foreclosure transaction, 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 required monthly rental payments with annual increases of 3%. The initial term of the lease expired in 2067, which included a sixty-year period renewal. Rent expense for this operating lease for the years ended December 31, 2020 and 2019 totaled $0.7 million and $0.3 million, respectively.

The discount rate used to calculate the lease liability was 9% and the remaining lease term was 47.95 years as of December 31, 2019.

Intangible Lease Asset

The following table summarizes the Company's intangible lease asset recognized in the consolidated balance sheets as of December 31, 2020 (dollars in thousands):


Acquisition Date	Property Type	Primary Location(s)	Intangible Lease Asset, Gross		Accumulated Amortization		Intangible Lease Asset, Net of Amortization
October 2019	Office	Jeffersonville, IN	$	14,509	$	(963)	$	13,546
			$	14,509	$	(963)	$	13,546

The following table summarizes the Company'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 Amortization
October 2019	Office	Jeffersonville, IN	$	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 2037 and contains renewal options for four consecutive five-year terms. The remaining lease term is 16.3 years. Rental income for this operating lease for the years ended December 31, 2020 and 2019 totaled $2.9 million and $0.6 million, respectively and is included in Revenue from real estate owned in the consolidated statements of operations.

F-27

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

The following table summarizes the Company's schedule of future minimum rents to be received under the lease (dollars in thousands):


Minimum Rents	December 31, 2020
2021	$	2,568
2022	2,607
2023	2,646
2024	2,686
2025	2,726
2026 and beyond	34,168
Total minimum rent	$	47,401

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, 2020 is approximately 16.3 years. Amortization expense for the years ended December 31, 2020 and 2019 totaled $0.8 million and $0.2 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 Expense	December 31, 2020
2021	$	(825)
2022	(825)
2023	(825)
2024	(825)
2025	(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"), Goldman Sachs Bank USA (the "GS~~ 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, ~~GS Repo Facility,~~ USB Repo Facility, WF Repo Facility, Barclays Revolver Facility, and Barclays Repo Facility, the "Repo Facilities").

~~Advances under~~The Repo Facilities are financing sources through which the ~~JPM Repo Facility currently accrue interest at per annum rates generally equal~~Company may pledge one or more mortgage loans to the ~~sum of (i) the applicable LIBOR index~~financing entity in exchange for funds typically at an advance rate ~~plus (ii) a margin of 2.40%. Borrowings under the GS Repo Facility accrue interest at per annum rates generally equal to the sum of (i) a spread over LIBOR~~ of between ~~2.35%~~65% to ~~2.85%, depending on the attributes~~80% of the purchased asset, and (ii) 0.50%. Borrowings under the USB Repo Facility accrue interest at per annum rates generally equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.25% to 3.00%, depending on the attributesprincipal amount of the ~~purchased assets. Borrowings under the CS Repo Facility accrue interest at per annum rates generally equal to the sum~~mortgage loan being pledged.

F-28

Table of ~~(i) the applicable LIBOR index rate plus (ii) a margin of 2.50% depending on the attributes of the purchased assets.~~Contents

The Company entered into the Barclays Facility on September 19, 2017. The Barclays Facility provides for a senior secured revolving line of credit and bears interest, at the Company's option, at per annum rates equal to (i) a spread over the Base Rate of 1.75% or (ii) a spread over the Eurodollar Rate of 2.75%, and provides for quarterly interest-only payments, with all principal and interest outstanding being due on the maturity date. The Barclays Facility may be prepaid from time to time and at any time, in whole or in part, without premium or penalty. The Company expects to use advances on the Barclays Facility to finance the origination of eligible loans, including first lien mortgage loans, junior mortgage loans, mezzanine loans, and participation interests therein.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, ~~2017~~2020 and December 31, ~~2016~~2019 are as follows (dollars in thousands):


As of December 31, 2020
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense(1)		Ending Weighted Average Interest Rate		Initial 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		0		387		N/A		9/20/2021
Barclays Repo Facility (7)	300,000		22,560		1,046		2.51	%	3/15/2022
Total	$	1,175,000	$	276,340	$	11,632

________________________

As of December 31, 2017 Ending Weighted Average Interest Rate Initial Term Maturity
Repurchase Facility Committed Financing Amount Outstanding
Interest Expense ⁽¹⁾

JPM Repo Facility ⁽²⁾
$ 300,000
$ 42,042
$ 8,453
3.77 % 6/12/2019
GS Repo Facility ⁽³⁾
250,000
13,500
4,573
3.83 % 12/27/2018
USB Repo Facility ⁽⁴⁾
100,000
—
303
N/A
6/15/2020
CS Repo Facility ⁽⁵⁾
250,000
10,148
577
3.99 % 8/30/2018
Barclays Facility ⁽⁶⁾
75,000
—
236
N/A
9/19/2019
Total $ 975,000
$ 65,690
$ 14,142

~~__________________________~~

⁽¹⁾ For the year ended December 31, 2020. Includes amortization of deferred financing costs.

⁽²⁾ ~~Includes a one-year~~On October 6, 2020 the maturity date was amended to October 6, 2022.

(3) On June 9, 2020, the Company exercised the extension ~~at the Company's option.~~

⁽³⁾ ~~Includes a one-year extension at the Company’s~~ option ~~which may be exercised~~ upon the satisfaction of certain ~~conditions.~~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.

(6) There is 1 one-year extension option available at the Company's discretion.

(7) Includes ~~two one-year~~2 one-year extensions at the Company's option.


As of December 31, 2019
Repurchase Facility	Committed 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		0		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		0		976		N/A		9/20/2021
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 2 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⁾ ~~Prior to the end of each calendar quarter,~~(4) On March 26, 2019, the Company ~~may request an~~exercised the extension ~~of the termination date for an additional 364 days from the end of such calendar quarter subject to~~option upon the satisfaction of certain conditions, and ~~approvals.~~extended the term maturity to March 27, 2020.

⁽⁶⁾(5) Includes ~~an extension term of~~ 3 one ~~year.~~

~~F-21~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

As of December 31, 2016 Ending Weighted Average Interest Rate Initial Term Maturity
Repurchase Facility Committed Financing Amount Outstanding
Interest Expense ⁽¹⁾

JPM Repo Facility ⁽²⁾
$ 300,000
$ 257,664
6,016
3.08 % 6/18/2016
GS Repo Facility ⁽³⁾
250,000
—
—
N/A
12/27/2018
Barclays Repo Facility ⁽⁴⁾
—
—
6,063
N/A
10/6/2016
Total $ 550,000
$ 257,664
$ 12,079

~~_______________________~~

⁽¹⁾ ~~Includes amortization of deferred financing costs.~~

⁽²⁾ ~~The Company exercised its one-year extension option with the JPM Repo Facility lender, extending the maturity date to June 17, 2017.~~

⁽³⁾ ~~Includes a one-year extension~~-year extensions at the Company’s option, which may be exercised upon the satisfaction of certain conditions.

⁽⁴⁾(6) On ~~October 5, 2016,~~September 13, 2019, the Company ~~paid off~~exercised the ~~outstanding balance on~~extension option, and extended the ~~Barclays Repo Facility and~~term maturity to September 20, 2021. There is 1 more one-year extension option available at the ~~Barclays Repo Facility was terminated.~~Company's discretion.

~~We expect~~(7) Includes 2 one-year extensions at the Company's option.

F-29

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

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. ~~Should the value of the Company’s collateral decrease as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in the Company’s liquidity position.~~ As of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company is in compliance with all debt covenants.

Other financing and loan participation - Commercial Mortgage Loans

On March 23, 2020, the Company transferred $15.2 million of its interest in a term loan to Sterling National Bank ("SNB") via a participation agreement. During 2020, the Company's outstanding loan increased resultant of future fundings, leading to an increase in amount outstanding via the participation agreement. The Company ~~entered into a financing arrangement with Pacific Western Bank~~incurred $0.5 million of interest expense on SNB for ~~term financing (“PWB Financing”) on May 17, 2017. The PWB Financing provided~~ the Company with $36.2 million and is collateralized by a portfolio asset of $54.2 million. The PWB Financing currently accrues interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin of 4.0%. The PWB Financing initially matures on June 9, 2019, with two one-year extension options at the Company’s option.year ended December 31, 2020. As of December 31, ~~2017,~~2020 the outstanding participation balance was $31.4 million. The loan matures on February 9, 2023.

Mortgage Note Payable

On October 15, 2019, the Company ~~had $26.2~~obtained a commercial mortgage loan for $29.2 million related to the real estate owned portfolio. As of ~~outstanding principal under~~December 31, 2020 the ~~PWB Financing.~~loan accrued interest at an annual rate of 3.85% and matures on November 6, 2034. The Company incurred ~~$1.2~~$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 ~~PWB Financing~~lending agreement with SBL for the ~~year~~twelve months ended December 31, ~~2017, including amortization~~2020. As of ~~deferred financing costs.~~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 of December 31, 2017, the Company pledged Tranche C of RFT 2015-FL1 Issuer under its MRAs. As of December 31, 2016, the Company pledged Tranche C of RFT 2015-FL1 Issuer and its real estate securities available for sale under its MRAs.

~~F-22~~

F-30

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

Below is a summary of the Company's MRAs as of December 31, ~~2017~~2020 and ~~2016~~2019 (dollars in thousands):

Weighted Average
Counterparty Amount Outstanding Accrued Interest
Collateral Pledged ^(*)
Interest Rate Days to Maturity
As of December 31, 2017
JP Morgan Securities LLC $ 39,035
$ 11
$ 56,044
3.32 % 26
Total $ 39,035
$ 11
$ 56,044
3.32 % 26

As of December 31, 2016
JP Morgan Securities LLC $ 59,122
$ 96
$ 92,658
2.55 % 6
Citigroup Global Markets, Inc. 3,879
1
4,850
2.11 % 26
Wells Fargo Securities, LLC 3,638
4
4,850
2.05 % 13
Total/Weighted Average $ 66,639
$ 101
$ 102,358
2.50 % 8


							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest		Collateral Pledged (1)		Interest Rate		Days to Maturity
As of December 31, 2020
JP Morgan Securities LLC	$	33,791	$	1,668	$	43,612	1.75	%	31
Wells Fargo Securities, LLC	0		1,057		0		N/A		N/A
Goldman Sachs International	22,440		455		30,794		1.68	%	16
Barclays Capital Inc.	76,809		2,102		97,244		1.71	%	33
Credit Suisse AG	0		905		0		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, LLC	178,304		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 ~~$56.0~~$72.2 million and ~~$53.3~~$68.5 million ~~Tranche C~~ of ~~Company issued~~ CLO notes, held by the Company, which ~~eliminates~~is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

Collateralized Loan Obligation

As of December 31, ~~2017~~2020 and ~~2016,~~December 31, 2019 the notes issued ~~in 2015~~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 1327 and 2741 mortgage assets having a ~~total~~ principal balance of ~~$276.2~~$417.9 million and ~~$419.3~~$523.2 million, respectively (the ~~“ 2015-FL1~~"2018-FL3 Mortgage ~~Assets”~~Assets") ~~originated by a subsidiary of the Company.~~. The sale of the ~~2015-FL1~~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 ~~RFT 2015-FL1~~Company and BSPRT 2018-FL3 Issuer, Ltd.

As of December 31, 2020 and December 31, 2019 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 59 and 49 mortgage assets having a principal balance of $852.1 million and $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 ~~19, 2015,~~12, 2018, between the Company and ~~RFT 2015-FL1 Issuer. In connection with the securitization, the RFT 2015-FL1~~BSPRT 2018-FL4 Issuer, and RFT 2015-FL1 Co-Issuer offered and sold the following classes of Notes to third parties: Class A, Class B, and Class C Notes. A wholly-owned subsidiary of the Company retained approximately $56.0 million of the total $76.0 million of Class C Notes and all of the preferred equity in the RFT 2015-FL1 Issuer. The retained Class C Notes and its related interest income, interest receivable and the preferred equity are eliminated in the Company's consolidated financial statements.Ltd.

As of December 31, ~~2017~~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 ~~BSPRT 2017-FL1 Issuer~~Company, are collateralized by interests in a pool of 2554 and 48 mortgage assets having a ~~total~~ principal balance of ~~$418.1~~$799.8 million and $809.4 million respectively (the ~~“2017-FL1~~"2019-FL5 Mortgage ~~Assets”~~Assets") ~~originated by a subsidiary of the Company.~~. The sale of the ~~2017-FL1~~2019-FL5 Mortgage Assets to ~~the 2017-FL1~~BSPRT 2019-FL5 Issuer, Ltd. is governed by a Mortgage Asset Purchase Agreement dated as of ~~June 29, 2017,~~May 30, 2019, between the Company and ~~the 2017-FL1 Issuer.~~

~~As of December 31, 2017 the notes issued by the~~ BSPRT ~~2017-FL2~~2019-FL5 Issuer, are collateralized by interests in a pool of 20 mortgage assets having a total principal balance of $440.7 million (the “2017-FL2 Mortgage Assets”) originated by a subsidiary of the Company. The sale of the 2017-FL2 Mortgage Assets to the BSPRT 2017-FL2 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of November 29, 2017, between the Company and the BSPRT 2017-FL2 Issuer.

Ltd.

~~F-23~~

F-31

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of ~~all three of~~ the above CLOs of approximately ~~$204.3 million.~~$256.9 million and $305.4 million as of December 31, 2020 and December 31, 2019, respectively. The following table represents the terms of the notes issued by the ~~2015-FL1~~2018-FL3 Issuer, ~~2017-FL1~~2018-FL4 Issuer, and ~~2017-FL2~~2019-FL5 Issuer (the "CLOs), respectively, ~~(dollars in thousands):~~

CLO Facility As of December 31, 2017 Par Value Issued
Par Value Outstanding ^{(1) (2)}
Interest Rate Maturity Date
2015-FL1 Issuer Tranche A $ 231,345
$ 79,109
1M LIBOR + 175 8/1/2030
2015-FL1 Issuer Tranche B 42,841
42,841
1M LIBOR + 388 8/1/2030
2015-FL1 Issuer Tranche C 76,044
20,000
1M LIBOR + 525 8/1/2030
2017-FL1 Issuer Tranche A 223,600
223,600
1M LIBOR + 135 7/1/2027
2017-FL1 Issuer Tranche B 48,000
48,000
1M LIBOR + 240 7/1/2027
2017-FL1 Issuer Tranche C 67,900
67,900
1M LIBOR + 425 7/1/2027
2017-FL2 Issuer Tranche A 237,970
237,970
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
$ 1,051,092
$ 842,812

CLO Facility As of December 31, 2016 Par Value Issued
Par Value Outstanding ⁽¹⁾
Interest Rate Maturity Date
2015-FL1 Issuer Tranche A $ 231,345
$ 222,195
1M LIBOR + 175 8/1/2030
2015-FL1 Issuer Tranche B 42,841
42,841
1M LIBOR + 388 8/1/2030
2015-FL1 Issuer Tranche C 76,044
20,000
1M LIBOR + 525 8/1/2030
$ 350,230
$ 285,036

~~________________________~~

⁽¹⁾ Excludes $56.0 million and $56.0 million of Tranche C notes issued by 2015-FL1 Issuer, held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of December 31, ~~2017 and December 31, 2016, respectively.~~2020 (dollars in thousands):

CLO Facility

Tranche

Par Value Issued

Par Value Outstanding (1)

Interest Rate

Maturity Date

2018-FL3 Issuer

Tranche A

286,700

161,745

1M LIBOR + 105

10/15/2034

2018-FL3 Issuer

Tranche A-S

77,775

1M LIBOR + 135

10/15/2034

2018-FL3 Issuer

Tranche B

41,175

1M LIBOR + 165

10/15/2034

2018-FL3 Issuer

Tranche C

39,650

1M LIBOR + 255

10/15/2034

2018-FL3 Issuer

Tranche D

42,700

1M LIBOR + 345

10/15/2034

2018-FL4 Issuer

Tranche A

416,827

416,659

1M LIBOR + 105

9/15/2035

2018-FL4 Issuer

Tranche A-S

73,813

1M LIBOR + 130

9/15/2035

2018-FL4 Issuer

Tranche B

56,446

1M LIBOR + 160

9/15/2035

2018-FL4 Issuer

Tranche C

68,385

1M LIBOR + 210

9/15/2035

2018-FL4 Issuer

Tranche D

57,531

1M LIBOR + 275

9/15/2035

2019-FL5 Issuer

Tranche A

407,025

1M LIBOR + 115

5/15/2029

2019-FL5 Issuer

Tranche A-S

76,950

1M LIBOR + 148

5/15/2029

2019-FL5 Issuer

Tranche B

50,000

1M LIBOR + 140

5/15/2029

2019-FL5 Issuer

Tranche C

61,374

61,373

1M LIBOR + 200

5/15/2029

2019-FL5 Issuer

Tranche D

48,600

5,000

1M LIBOR + 240

5/15/2029

2019-FL5 Issuer

Tranche E

20,250

3,000

1M LIBOR + 285

5/15/2029

1,825,201

1,639,227

________________________

~~(2)~~(1) Excludes ~~$16.0~~$267.1 million of ~~Tranche E~~CLO notes, ~~and $14.9 million of Tranche F notes issued by 2017-FL2 Issuer,~~ held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, ~~2017.~~

2020.

~~F-24~~

F-32

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~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

1M LIBOR + 105

10/15/2034

2018-FL3 Issuer

Tranche A-S

77,775

1M LIBOR + 135

10/15/2034

2018-FL3 Issuer

Tranche B

41,175

1M LIBOR + 165

10/15/2034

2018-FL3 Issuer

Tranche C

39,650

1M LIBOR + 255

10/15/2034

2018-FL3 Issuer

Tranche D

42,700

1M LIBOR + 345

10/15/2034

2018-FL4 Issuer

Tranche A

416,827

1M LIBOR + 105

9/15/2035

2018-FL4 Issuer

Tranche A-S

73,813

1M LIBOR + 130

9/15/2035

2018-FL4 Issuer

Tranche B

56,446

1M LIBOR + 160

9/15/2035

2018-FL4 Issuer

Tranche C

68,385

1M LIBOR + 210

9/15/2035

2018-FL4 Issuer

Tranche D

57,531

1M LIBOR + 275

9/15/2035

2019-FL5 Issuer

Tranche A

407,025

1M LIBOR + 115

5/15/2029

2019-FL5 Issuer

Tranche A-S

76,950

1M LIBOR + 148

5/15/2029

2019-FL5 Issuer

Tranche B

50,000

1M LIBOR + 140

5/15/2029

2019-FL5 Issuer

Tranche C

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

1M LIBOR + 285

5/15/2029

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-33

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

The below table reflects the total assets and liabilities of the Company's ~~three~~outstanding CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of December 31, ~~2017~~2020 and December 31, ~~2016~~2019 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, 2020		December 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 receivable	5,626		6,254
Total Assets	$	2,149,607	$	2,390,863

Liabilities
Notes payable (3)(4)	$	1,892,616	$	2,064,601
Accrued interest payable	1,240		2,576
Total Liabilities	$	1,893,856	$	2,067,177

________________________

Assets (dollars in thousands) December 31, 2017 December 31, 2016
Cash ⁽¹⁾
$ 49,017
$ 5
Commercial mortgage loans, held for investment, net of allowance ⁽²⁾
1,033,427
417,057
Accrued interest receivable 4,212
1,101
Total Assets $ 1,086,656
$ 418,163

Liabilities
Notes payable ⁽³⁾⁽⁴⁾
$ 912,800
$ 334,246
Interest payable 1,462
564
Total Liabilities $ 914,262
$ 334,810

~~________________________~~

⁽¹⁾ Includes ~~$48.7~~$98.6 million and $89.3 million of cash held by the servicer related to CLO loan payoffs as of December 31, ~~2017.~~2020 and December 31, 2019.

⁽²⁾ The balance is presented net of allowance for ~~loan loss~~credit losses of ~~$1.3~~$19.4 million and ~~$1.0~~$0.8 million as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

⁽³⁾ Includes ~~$55.8~~$267.1 million and ~~$55.8~~$261.4 million of ~~Tranche C of Company issued~~ CLO held by the Company as of December 31, 2017 and December 31, 2016, respectively. Also includes $16.0 million of Tranche E notes and $14.9 million of Tranche F notes issued by 2017-FL2 Issuer held by the Company as of December 31, 2017. The notes, held by the Company, which are eliminated within the ~~Collateral~~collateralized loan ~~obligations~~obligation line of the consolidated balance ~~sheets.~~sheets as of December 31, 2020 and December 31, 2019.

⁽⁴⁾ The balance is presented net of deferred financing cost and discount of ~~$16.9~~$13.7 million and ~~$6.8~~$19.2 million as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

Note 68 - ~~Net Income~~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 ispresents a ~~summary~~reconciliation of the numerators and denominators of the basic and diluted ~~net income~~earnings per share ~~computation~~computations and the calculation of basic and diluted earnings per share for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, respectively (dollars in thousands, except share amounts):


	Year Ended December 31,
Numerator	2020		2019		2018
Net income	$	54,746	$	83,924	$	52,825
Less: Preferred stock dividends	14,920		15,337		3,644
Less: Undistributed earnings allocated to preferred stock	0		1,673		0
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 share	44,384,813		41,859,142		34,268,707
Effect of dilutive shares:
Unvested restricted shares	14,066		12,504		14,229
Weighted-average common shares outstanding for diluted earnings per share	44,398,879		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

Years Ended December 31,
2017 2016 2015
Net income (in thousands) $ 33,779
$ 29,990
$ 24,933
Basic weighted average shares outstanding 31,772,231
31,659,274
24,253,905
Unvested restricted shares 12,658
7,230
5,264
Diluted weighted average shares outstanding 31,784,889
31,666,504
24,259,169
Basic net income per share $ 1.06
$ 0.95
$ 1.03
Diluted net income per share $ 1.06
$ 0.95
$ 1.03

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Note 79 - ~~Common~~ Stock Transactions

As of December 31, ~~2017~~2020 and ~~2016,~~December 31, 2019, the Company had ~~31,834,072~~44,510,051 and ~~31,884,631~~43,916,815 shares of common stock outstanding, respectively, including shares issued pursuant to the ~~DRIP,~~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 40,515 and 40,500 shares of Series A Preferred Stock outstanding, respectively and 1,400 and 1,400 shares of Series C Preferred Stock outstanding, respectively.


Series A Preferred Stock	Shares	Amount
Beginning Balance, December 31, 2019	40,500	$	202,144
Issuance of Preferred Stock	14	70
Dividends paid in Preferred Stock	1	7
Offering costs	—	(23)
Amortization of offering costs	—	94
Ending Balance, December 31, 2020	40,515	$	202,292


Series A Preferred Stock	Shares	Amount
Beginning Balance, December 31, 2018	29,249	$	145,786
Issuance of Preferred Stock	11,247	56,233
Dividends paid in Preferred Stock	4	24
Offering costs	—	0
Amortization of offering costs	—	101
Ending Balance, December 31, 2019	40,500	$	202,144

The following tables present the activity in the Company's Series C Preferred Stock for the periods ended December 31, 2020 and December 31, 2019, (dollars in thousands, except share amounts):


Series C Preferred Stock	Shares	Amount
Beginning Balance, December 31, 2019	1,400	$	6,966
Issuance of Preferred Stock	0	0
Dividends paid in Preferred Stock	0	0
Offering costs	—	(11)
Amortization of offering costs	—	7
Ending Balance, December 31, 2020	1,400	$	6,962


Series C Preferred Stock	Shares	Amount
Beginning Balance, December 31, 2018	0	$	0
Issuance of Preferred Stock	1,400	6,998
Dividends paid in Preferred Stock	0	0
Offering costs	—	(33)
Amortization of offering costs	—	1
Ending Balance, December 31, 2019	1,400	$	6,966

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Distributions

~~F-25~~

~~Table~~ Distribution payments are dependent on the availability of ~~Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

~~On May 13, 2013, the~~funds. The Company's board of directors ~~authorized,~~may reduce the amount of distributions paid or suspend distribution payments at any time, and ~~the Company declared a distribution, which is calculated based on stockholders of record each day during the applicable period at a rate of $0.00565068493~~ ~~per day, which is equivalent to $2.0625 per annum, per share of common stock.~~ therefore, distributions payments are not assured.

In March 2016, the Company's board of directors ratified the existing distribution amount a change to the daily distribution amount equivalent to $2.0625 per annum for calendar year 2016. On November 10, 2016April 2020, the Company’s board of directors ~~changed~~unanimously approved a transition in the ~~DRIP offer price~~timing of the dividend payments to ~~$20.05, which is equal~~holders of the Company’s common stock from a monthly payment with daily accruals to a quarterly payment and accrual basis. The first quarterly dividend was the ~~estimated per-share NAV as~~second quarter 2020 dividend payable in July 2020. Similarly, the Company began paying accrued and unpaid dividends on Preferred Stock on a quarterly basis.

The monthly distributions for the first quarter of ~~September 30, 2016 approved by the board of directors. In August 2017, the Company's board of directors authorized and declared a distribution calculated daily~~2020 were paid at a daily rate ~~of $0.00394521 per day, which is~~ equivalent to $1.44 per annum, per share of common stock. ~~The price change applied to~~Starting with the ~~reinvestment~~second quarter 2020 distribution, the 2020 quarterly distributions were paid at a quarterly rate of ~~distributions commencing with October 2017 distributions.~~

On May 10, 2017, the Company’s board of directors changed the methodology used to determine the DRIP offer price to be 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$0.275 per share ~~computed in accordance with GAAP. Based on this new methodology, the DRIP offer price for June 2017, July 2017 and August 2017 was $19.62~~of common stock (equivalent to $1.10 per share, which was the GAAP book value per share as of March 31, 2017. The DRIP offer price for September 2017, October 2017 and November 2017 was $19.29 per share, which was the GAAP book value per share as of June 30, 2017. The DRIP offer price since December 2017, has been $19.02, which is the estimated per share NAV as determined by the board of directors on November 10, 2017.

~~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.~~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, ~~distributions~~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 ~~$58.9~~$45.7 million of common stock dividends during the year ended December 31, ~~2017,~~2020, comprised of ~~$38.8~~$36.8 million in cash and ~~$20.1~~$8.9 million in shares of common stock issued under the DRIP. The DRIP was temporarily suspended for the March 2020 dividend due to COVID-19 related valuation volatility, but was reactivated for the second quarter 2020 dividend. The Company distributed ~~$65.3~~$59.7 million of common stock dividends during the year ended December 31, ~~2016,~~2019, comprised of ~~$40.3~~$45.8 million in cash and ~~$25.0~~$13.9 million in shares of common stock issued under the DRIP.

As of December 31, 2020 and December 31, 2019, the Company had declared but unpaid common stock distributions of $12.2 million and $5.4 million, respectively. Additionally, as of December 31, 2020 and December 31, 2019, the 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 the~~The repurchase price per share for ~~requests will be~~SRP repurchases is equal to the lesser of (i) the Company’s most recent estimated per-share ~~NAV,~~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 $19.02,~~as of December 31, 2020, as determined by the board of directors, ~~as of September 30, 2017.~~is $17.88. The Company’s GAAP book value per share as of December 31, ~~2017~~2020 is ~~$19.17.~~$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).

~~F-26~~

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~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

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 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.

Calculations of the Company's estimated per-share NAV occurs periodically, at the discretion of the board of directors, provided that such calculations will be made at least annually. Following its calculation, the Company's estimated per-share NAV will be disclosed in a periodic report. The most recent calculation of the Company's estimated per-share NAV approved by the board of directors occurred on November 10, 2017 based on the Company's net asset value as of September 30, 2017 and was equal to $19.02.

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, ~~2017:~~2020:


	Number of Requests	Number of Shares Repurchased	Average Price per Share
Cumulative as of December 31, 2019	5,878	3,542,267	$	20.23
January 1 - January 31, 2020 (1)	1,170	373,135	18.56
February 1 - February 28, 2020	0	0	N/A
March 1 - March 31, 2020	0	0	N/A
April 1 - April 30, 2020 (1)	0	0	N/A
May 1 - May 31, 2020	0	0	N/A
June 1 - June 30, 2020	0	0	N/A
July 1 - July 31, 2020 (2)	1,046	206,332	16.25
August 1 - August 31, 2020	0	0	N/A
September 1 - September 30, 2020 (2)	0	0	N/A
October 1 - October 31, 2020	0	0	N/A
November 1 - November 30, 2020	0	0	N/A
December 1 - December 31, 2020	0	0	N/A
Cumulative as of December 31, 2020	8,094	4,121,734	$	19.88

________________________

Number of Requests Number of Shares Repurchased Average Price per Share
Cumulative as of December 31, 2016 985
918,683
$ 23.94
January 1 - March 31, 2017 502
496,678
19.04
April 1 - June 30, 2017 2
327
20.08
July 1 - September 30, 2017 636
575,703
19.24
September 30 - December 31, 2017 ⁽¹⁾
—
—
—
Cumulative as of December 31, 2017 2,125
1,991,391
$ 21.36

~~_______________________~~

⁽¹⁾ ~~Amounts exclude 875~~ Reflects shares repurchased pursuant to repurchase requests submitted for the second semester of 2019, including 11,306 shares which for administrative reasons were processed in April 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 ~~representing 607,498~~in the amount of 1,986,803 shares ~~received~~were not 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 ~~semi-annual period from July 1, 2017 to~~ 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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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017, which were approved by the board of directors and repurchased in January 2018.~~2020

Note 810 - Commitments and Contingencies

Unfunded Commitments Under Commercial Mortgage Loans

As of December 31, ~~2017~~2020 and ~~2016,~~2019, the Company had the below unfunded commitments to the Company's ~~borrowers.~~

Funding Expiration December 31, 2017 December 31, 2016
2017 $ —
$ 7,794
2018 36,475
62,368
2019 26,465
9,072
2020 20,598
—
$ 83,538
$ 79,234
borrowers (dollars in thousands):


Funding Expiration	December 31, 2020		December 31, 2019
2020	$	0	$	90,519
2021	59,692		100,861
2022	91,420		56,863
2023	69,880		8,637
2024 and beyond	7,700		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.

Litigation and Regulatory Matters

~~F-27~~

~~Table~~The Company is not presently involved in any material litigation arising outside the ordinary course of ~~Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

Inbusiness. However, the Company is involved in routine litigation arising in the ordinary course of business, ~~the Company may become subject to litigation, claims and regulatory matters. The Company has no knowledge~~none of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time. On June 6, 2016, an action was filed against the Company and two of its directors in the United States District Court for the Southern District of New York and styled Rurode v. Realty Finance Trust, Inc., et. al., No. 1:16-cv-04553. The plaintiff’s individual and derivative complaint alleged that the Company made material misstatements in the proxy statement for its 2016 annual stockholder’s meeting related to an alleged planned merger transaction between the Company and an affiliate of its Former advisor. The plaintiff alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and sought to enjoin the Company’s 2016 annual meeting. On June 28, 2016, the parties filed, and the court subsequently entered, a stipulation and order of dismissal of the action, but provided that the court would retain jurisdiction to consider any application by plaintiff for an award of attorneys’ fees. On October 20, 2016, the plaintiff submitted a request for $0.75 million in fees and expenses. On November 14, 2016, the defendants filed a memorandum of law in opposition to that fee request. On July 19, 2017, the Company and the plaintiff entered into an agreement pursuant to which the Company ~~paid $245,000~~believes, individually or in ~~attorneys’ fees and expenses and~~ the ~~plaintiff agreed to withdraw its October 20, 2016 fee request to~~aggregate, will have a material impact on the ~~court and to release the Company from any further claims related to such fee request.~~Company’s financial condition, operating results or cash flows.

Note 911 - Related Party Transactions and Arrangements

Advisory Agreement Fees and Reimbursements

Pursuant to the Advisory Agreement, the Company ~~makes or was~~is 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 ~~stockholder’s~~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.

•Until September 2017, the Company paid its 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~~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.

Until September 29, 2016, the Former Advisor served as the Company's advisor and the Company paid the Former Advisor certain fees and expense reimbursements pursuant to its advisory agreement with the Former Advisor. The types of fees and reimbursements paid to the Former Advisor were similar to those paid to the Advisor prior to September 2017. In addition, prior to January 2016, the Company paid dealer-manager fees and selling commissions to an affiliate ("Former Dealer Manager") of the Former Advisor.

The table below shows the compensation and reimbursement to the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager incurred for services relating to the Company's public offering during the years ended December 31, 2017, 2016 and 2015, respectively, and the associated payable as of December 31, 2017 and 2016, respectively (dollars in thousands):

Years Ended December 31, Payable as of December 31,
2017 2016 2015 2017 2016
Total commissions and fees incurred from the Former Dealer Manager $ —
$ —
$ 37,092
$ —
$ —

~~F-28~~

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager⁽¹⁾
$ —
$ —
$ 7,442
$ 480
$ 480

~~________________________~~

The payables as of December 31, 2017 and 2016 in the table above are included in "Due to affiliates" on the Company's consolidated balance sheets. The fees incurred are recorded within the Additional paid in capital line in the consolidated balance sheets.

~~F-29~~

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~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

The table below shows the costs incurred due to arrangements with our Advisor and ~~with respect to periods prior to September 30, 2016, the Former Advisor and~~ its affiliates during the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018 and the associated payable as of December 31, ~~2017~~2020 and ~~2016~~2019 (dollars in thousands):


	Year Ended December 31,						Payable as of December 31,
	2020		2019		2018		2020		2019
Acquisition expenses (1)	696		900		452		0		225
Administrative services expenses	13,120		16,363		13,446		2,940		1,238
Asset management and subordinated performance fee	15,178		16,226		10,299		4,773		3,326
Other related party expenses (2)(3)	703		1,610		1,259		1,812		0
Total related party fees and reimbursements	$	29,697	$	35,099	$	25,456	$	9,525	$	4,789

________________________

Years Ended December 31, Payable as of December 31,
2017 2016 2015 2017 2016
Acquisition fees and acquisition expenses ⁽¹⁾
$ 4,197
$ 806
$ 7,916
$ —
$ —
Administrative services expenses 6,765
4,376
644
3,480
1,000
Advisory and investment banking fee —
6
56
—
—
Asset management and subordinated performance fee 9,273
9,504
7,615
2,315
2,439
Other related party expenses ⁽²⁾
394
84
364
146
145
Total related party fees and reimbursements $ 20,629
$ 14,776
$ 16,595
$ 5,941
$ 3,584

~~________________________~~

⁽¹⁾ Total acquisition fees and expenses paid during the years ended December 31, ~~2017~~2020, 2019 and ~~2016~~2018 were ~~$10.2~~$7.1 million, $8.4 million and ~~$0.8~~$8.1 million respectively, of which ~~$6.0~~$6.4 million, $7.5 million and ~~$0.0~~$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, ~~2017~~2020, 2019 and ~~2016.~~2018.

⁽²⁾ ~~Included~~ These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated ~~statement~~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, ~~2017~~2020 and ~~2016~~2019 in the table above are included in Due to affiliates on the Company's consolidated balance sheets.

~~Share Ownership~~

~~As of December 31, 2017 and December 31, 2016, entities wholly-owned by AR Global owned 52,771 and 52,771 shares of the Company’s outstanding common stock, respectively.~~

Other Transactions

~~In December 2017,~~On February 22, 2018, the Company purchased a commercial mortgage ~~loan~~loans, held-for-sale from an entity that is an affiliate of ~~our~~the Company's Advisor, for an aggregate purchase price of ~~$17.1 million and is included in Commercial mortgage loans, held-for-investment in the consolidated balance sheet.~~$27.8 million. The purchase of the commercial mortgage ~~loan~~loans and the ~~$17.1~~$27.8 million purchase price were approved by the Company’s board of ~~directors~~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 these commercial mortgage loans, 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 February 2020 and amended in March and August 2020, the ~~Nominating~~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 ~~Corporate Governance Committee, which consists solely~~is secured by a pledge of ~~independent directors.~~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 year ended December 31, 2020. As of December 31, 2020 there was 0 outstanding balance under the lending agreement.

Note 1012 - 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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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

As of December 31, ~~2017,~~2020, the Company had granted ~~21,398~~44,876 restricted shares to its independent directors, of which 5,333 were forfeited and ~~4,683~~27,823 have vested, leaving a balance of ~~11,382~~11,720 unvested restricted shares. As of December 31, ~~2016,~~2019, the Company had granted ~~15,414~~34,106 restricted shares to its independent directors, of which ~~2,399~~5,333 were forfeited and ~~2,399~~20,207 have

~~F-30~~

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~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

vested, leaving a balance of ~~10,081~~8,566 unvested restricted shares. ~~Based on a share price of $20.05, which was the NAV per share as of the most recent grant, the~~The compensation expense associated with the restricted share grants was ~~$96.9 thousand, $44.3 thousand~~$0.2 million, $0.2 million and ~~$29.6 thousand,~~$0.2 million, for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, respectively and are included within Other expenses line on the consolidated statements of operations.

Note 1113 - 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.

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 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 and the spreads used in the prior valuation.~~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, ~~2017 the Company had no CMBS. As of~~2020 and December 31, ~~2016,~~2019, the Company obtained ~~broker quotes~~third party pricing for determining the fair value of each CMBS ~~investment. As the broker quotes were both limited and non-binding, the Company has classified the CMBS as~~investment, resulting in a Level ~~III.~~II classification.

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 ~~swap~~swaps and interest rate swaps contracts isare derived using a pricing ~~model~~models that isare widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing ~~model takes~~models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, ~~and~~and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the ~~model~~models are not subjective as they

~~F-31~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

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 no material transfers between levels within the fair value hierarchy during the ~~year~~years ended December 31, ~~2017. During the quarter ended~~2020 and December 31, ~~2016 the Company's CMBS investments were transferred from Level II to Level III due to a decrease in the observable relevant market data because~~2019.

F-41

Table of the limited availability of the broker quotes and because the Company uses non-binding broker quotes without adjustment and therefore the fair value of the CMBS investments were classified as Level III.Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

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, ~~2017~~2020 and ~~2016~~December 31, 2019 (dollars in thousands):


December 31, 2020	Total		Level I		Level II		Level III
Assets, at fair value
Real estate securities, available for sale, measured at fair value	$	171,136	$	0	$	171,136	$	0
Commercial mortgage loans, held-for-sale, measured at fair value	67,649		0		0		67,649
Other real estate investments, measured at fair value	2,522		0		0		2,522

Interest rate swaps	25		0		25		0

Total assets, at fair value	$	241,332	$	0	$	171,161	$	70,171

Liabilities, at fair value
Credit default swaps	$	297	$	0	$	297	$	0

Treasury note futures	106		106		0		0
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	$	0	$	386,316	$	0
Commercial mortgage loans, held-for-sale, measured at fair value	112,562		0		0		112,562
Other real estate investments, measured at fair value	2,557		0		0		2,557
Credit default swaps	59		0		59		0
Interest rate swaps	325		0		325		0
Treasury note futures	735		735		0		0
Total assets, at fair value	$	502,554	$	735	$	386,700	$	115,119

Liabilities, at fair value
Credit default swaps	$	1,581	$	0	$	1,581	$	0
Total liabilities, at fair value	$	1,581	$	0	$	1,581	$	0

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Total Level I Level II Level III
December 31, 2017
Real estate securities $ —
$ —
$ —
$ —
Commercial mortgage loans, held-for-sale ⁽¹⁾
28,531
—
—
28,531
Treasury note futures 132
132
—
—
Total assets, at fair value $ 28,663
$ 132
$ —
$ 28,531

Liabilities, at fair value
Credit default swaps $ 357
$ —
$ 357
$ —
Total liabilities, at fair value $ 357
$ —
$ 357
$ —

December 31, 2016

Real estate securities $ 49,049
$ —
$ —
$ 49,049
Commercial mortgage loans, held-for-sale ⁽¹⁾
—
—
—
—
Treasury note futures —
—
—
—
Credit default swaps —
—
—
—
Total assets, at fair value $ 49,049
$ —
$ —
$ 49,049

~~________________________~~

⁽¹⁾ ~~Loans held in the Company's TRS, reported within Commercial mortgage loans, held-for-sale, measured at fair value on the consolidated balance sheets.~~

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, ~~2017~~2020 and December 31, ~~2016~~2019 (dollars in thousands).


Asset Category	Fair Value		Valuation 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 Flow	Yield	16.6%	15.6% - 17.6%
Other real estate investments, measured at fair value	2,522		Discounted Cash Flow	Yield	13.2%	12.2% - 14.2%
December 31, 2019
Commercial mortgage loans, held-for-sale, measured at fair value	$	112,562	Discounted Cash Flow	Yield	4.9%	4.7% - 5.2%
Other real estate investments, measured at fair value	2,557		Broker Quotes	Yield	12.4%	11.4% - 13.4%

Asset Category Fair Value Valuation Methodologies
Unobservable Inputs ⁽¹⁾
Weighted Average ⁽²⁾
Range
December 31, 2017 Commercial mortgage loans, held-for-sale, measured at fair value $28,531 Discounted Cash Flow Yield 4.93% 4.8% - 5.3%

December 31, 2016
Real estate securities, available for sale, at fair value

$49,049 Discounted Cash Flow Yield 6.50% 3.7% - 8.3%
________________________

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~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

⁽¹⁾ In determining certain ~~of these~~ 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.

~~F-33~~

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Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

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, ~~2017~~2020 and December 31, ~~2016~~2019 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 value		Other real estate investments, measured at fair value
Beginning balance, January 1, 2020	$	112,562	$	2,557
Transfers into Level III (2)	23,625		0
Total realized and unrealized gain/(loss) included in earnings:
Realized gain/(loss) on sale of commercial mortgage loan, held-for-sale	15,931		0
Unrealized gain/(loss) on commercial mortgage loans, held-for-sale and other real estate investments	(75)		(32)
Net accretion	0		(3)
Purchases (1)	267,552		0
Sales / paydowns (1)	(328,321)		0

Transfers out of Level III (2)	(23,625)		0
Ending Balance, December 31, 2020	$	67,649	$	2,522

	December 31, 2019
	Commercial mortgage loans, held-for-sale, measured at fair value		Other real estate investments, measured at fair value
Beginning balance, January 1, 2019	$	76,863	$	0
Transfers into Level III (2)	0		0
Total realized and unrealized gain (loss) included in earnings:
Realized gain (loss) on sale of real estate securities	—		0
Realized gain (loss) on sale of commercial mortgage loan held-for-sale	37,832		0
Unrealized gain (loss) on commercial mortgage loans held-for-sale and other real estate investments	312		47
Net accretion	0		0
Unrealized gain (loss) included in OCI	0		0
Purchases	1,015,677		2,510
Sales / paydowns	(1,008,050)		0
Cash repayments / receipts	0		0
Transfers out of Level III (2)	(10,072)		0
Ending Balance, December 31, 2019	$	112,562	$	2,557

December 31, 2017
Commercial Mortgage Loans, held-for-sale, measured at fair value Real Estate Securities
Beginning balance, January 1, 2017 $ —
$ 49,049
Transfers into Level III —
—
Total realized and unrealized gains (losses) included in earnings:
Realized gain on sale of real estate securities —
172
Realized gain on sale of commercial mortgage loan held-for-sale 4,523
—
Net accretion —
167
Unrealized gains included in OCI —
500
Purchases 156,101
—
Sales (132,093 ) (34,888 )
Cash repayments/receipts —
(15,000 )
Transfers out of Level III —
—
December 31, 2017 balance $ 28,531
$ —

December 31, 2016
Commercial Mortgage Loans, held-for-sale, measured at fair value Real Estate Securities
Beginning balance, January 1, 2016 $ —
$ —
Transfers into Level III —
57,639
Total realized and unrealized gains (losses) —

Realized (gain) loss on sale of real estate securities —
(874 )
Impairment losses on real estate securities —
(310 )
Net accretion —
—
Unrealized gains (losses) included in OCI —
1,719
Purchases —
—
Sales/paydown —
(9,125 )
Cash repayments/receipts —
—
Transfers out of Level III —
—
December 31, 2016 balance $ —
$ 49,049
________________________

(1) 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 connection with the Company's retention of the B tranche during the year ended December 31, 2020. Upon disposition of the B tranche during the year ended December 31, 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.

~~F-34~~

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Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

~~Financial Instruments Measured at Fair Value on a Non-Recurring Basis~~

As of December 31, 2017 the Company did not hold financial instruments carried at fair value on a non-recurring basis. The following table presents the Company's financial instruments carried at fair value on a non-recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of December 31, 2016 (dollars in thousands):

Total Level I Level II Level III
December 31, 2016
Commercial mortgage loans, held-for-sale $ 21,179
$ —
$ —
$ 21,179

Asset Category Fair Value Valuation Methodologies
Unobservable Inputs ⁽¹⁾
Weighted Average ⁽²⁾
Range
December 31, 2016 Commercial mortgage loans, held-for-sale $ 21,179
Discounted Cash Flow Yield 10.80 % 10.5% - 11%

~~________________________~~

(1) In determining certain of these 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.~~

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-investment~~held 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, ~~2017~~2020 and ~~2016~~2019 (dollars in thousands):


		Level	Carrying Amount		Fair Value
December 31, 2020
Commercial mortgage loans, held for investment (1)	Asset	III	$	2,714,734	$	2,724,039
Collateralized loan obligation	Liability	III	1,625,498		1,606,478
Mortgage note payable	Liability	III	29,167		29,167
Other financing and loan participation - commercial mortgage loans	Liability	III	31,379		31,379
December 31, 2019
Commercial mortgage loans, held for investment (1)	Asset	III	$	2,762,963	$	2,784,650
Collateralized loan obligation	Liability	III	1,803,185		1,822,386
Mortgage note payable	Liability	III	29,167		29,167

________________________

Level Carrying Amount Fair Value
December 31, 2017
Commercial mortgage loans, held-for-investment ⁽¹⁾
Asset III $ 1,403,512
$ 1,396,406
Collateralized loan obligation Liability II 826,150
842,812
December 31, 2016
Commercial mortgage loans, held-for-investment ⁽¹⁾
Asset III 1,048,737
$ 1,029,756
Collateralized loan obligation Liability II 278,450
282,001

⁽¹⁾ The carrying value is gross of ~~$1.5~~$20.9 millionand ~~$2.2~~$0.9 millionof allowance for ~~loan~~credit losses as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

The fair value of the commercial mortgage loans, ~~held-for-investment~~held 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, 2020, the Mortgage note payable was initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value.

~~F-35~~

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BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

Note 1214 - Derivative Instruments

The Company uses derivative instruments primarily to ~~economically~~ manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk.

As of December 31, ~~2017,~~2020, the net premiums received on derivative instrument assets were ~~$0.6~~$1.3 million.

The following derivative instruments were outstanding as of December 31, ~~2017~~2020 and December 31, 2019 (dollars in thousands):

�� Fair Value
Contract type Notional
Assets⁽¹⁾
Liabilities⁽¹⁾
Net
Credit default swaps $ 30,000
$ 32
$ 357
$ (325 )
Treasury note futures 43,906
100
—
100
Total $ 73,906
$ 132
$ 357
$ (225 )

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.

~~The Company did not have any derivative instruments outstanding as of December 31, 2016.~~


			Fair Value
Contract type	Notional		Assets		Liabilities
As of December 31, 2020
Credit default swaps	$	46,000	$	0	$	297
Interest rate swaps	32,517		25		0
Treasury note futures	43,500		0		106
Total	$	122,017	$	25	$	403

As of December 31, 2019
Credit default swaps	$	94,300	$	59	$	1,581
Interest rate swaps	42,546		325		0
Treasury note futures	74,000		735		0
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, ~~2017. The Company did not have any net realized~~2020 and ~~unrealized gain or loss on derivatives during the year ended~~ December 31, ~~2016.~~2019:


	Year Ended December 31, 2020				Year Ended December 31, 2019
Contract type	Unrealized (Gain)/Loss		Realized (Gain)/Loss			Unrealized (Gain)/Loss		Realized (Gain)/Loss
Credit default swaps	$	(143)	$	323		$	456	$	2,230
Interest rate swaps	296		7,463			(380)		(269)
Treasury note futures	842		4,665			(1,798)		1,962
Options	0		35			0		401
Total	$	995	$	12,486		$	(1,722)	$	4,324

F-46

Year Ended December 31, 2017
Contract type
Unrealized
(Gain)/Loss

Realized
(Gain)/Loss
Total
Credit default swaps $ 117
$ 373
$ 490
Treasury note futures (100 ) (928 ) (1,028 )
Total $ 17
$ (555 ) $ (538 )

~~F-36~~

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017~~2020

Note 1315 - 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, 2017~~ ~~and 2016 (dollars in thousands):~~

Gross Amounts Not Offset on the Balance Sheet
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 Net Amount
December 31, 2017
Derivative instruments, at fair value $ 132
$ —
$ 132
$ —
$ —
$ —

Gross Amounts Not Offset on the Balance Sheet
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 ⁽²⁾
Net Amount
December 31, 2017
Repurchase agreements, commercial mortgage loans $ 65,690
$ —
$ 65,690
$ 163,235
$ 5,005
$ —
Repurchase agreements, real estate securities ⁽¹⁾
39,035
—
39,035
56,044
—
—
Derivative instruments, at fair value 357
—
357
—
2,961
—
December 31, 2016
Repurchase agreements, commercial mortgage loans 257,664
—
257,664
399,914
5,000
—
Repurchase agreements, real estate securities ^(*)
66,639
—
66,639
102,358
21
—

~~________________________~~

1) Includes $56.0 million and $53.3 million of Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of December 31, ~~2017~~2020 and December 31, ~~2016, respectively.~~2019 (dollars in thousands):


							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 (1)		Net Amount
December 31, 2020
Derivative instruments, at fair value	$	25	$	0	$	25		$	0	$	0	$	25
December 31, 2019
Derivative instruments, at fair value	$	1,119	$	0	$	1,119		$	0	$	10,895	$	0


							Gross Amounts Not Offset on the Balance Sheet
Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Balance Sheet		Net Amount of Assets Presented on the Balance Sheet			Financial Instruments		Cash Collateral (1)		Net Amount
December 31, 2020
Repurchase agreements, commercial mortgage loans	$	276,340	$	0	$	276,340		$	496,030	$	5,016	$	0
Repurchase agreements, real estate securities	186,828		0		186,828			245,956		1,146		0
Derivative instruments, at fair value	403		0		403			0		3,435		0
December 31, 2019
Repurchase agreements, commercial mortgage loans	$	252,543	$	0	$	252,543		$	394,229	$	5,011	$	0
Repurchase agreements, real estate securities	394,359		0		394,359			454,301		1,657		0
Derivative instruments, at fair value	1,581		0		1,581			0		3,679		0

________________________

(1) These cash collateral amounts are recorded within the Restricted cash ~~balance~~and Accounts payable and accrued expenses balances on the consolidated balance sheets.

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Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Note 1416 - Segment Reporting

Effective the third quarter of 2017, the Company realigned certain of its reportable segments with changes in its organizational structure and how the chief operating decision maker reviews and manages the business. A new reportable segment was added for the TRS business, a new line of business introduced by the Company during 2017. The Company ~~uses~~conducts its business through the ~~accounting policies for its segments as described in Note 2- Summary of Significant Accounting Policies. The three~~following reporting ~~segments are as follows:~~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.

~~F-37~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

•The commercial real estate conduit 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 ~~Company's historical segment reporting has been retrospectively recast to reflect~~real estate owned business represents real estate acquired by the ~~Company's current organizational structure.~~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, ~~2017, 2016~~2020, December 31, 2019 and ~~2015 (in~~December 31, 2018 (dollars in thousands):


December 31, 2017	Total		Real Estate Debt		Real Estate Securities		TRS
December 31, 2020									December 31, 2020	Total		Real Estate Debt and Other Real Estate		Real Estate Securities		TRS		Real Estate Owned
Interest income									Interest income	$	179,872	$	165,907	$	10,854	$	3,111	$	0
Revenue from real estate owned									Revenue from real estate owned	4,299		0		0		0		4,299
Interest expense									Interest expense	66,556		54,480		7,914		2,185		1,977
Net income									Net income	54,746		66,383		(7,207)		(5,559)		1,129
Total assets as of December 31, 2020									Total assets as of December 31, 2020	3,189,761		2,866,790		175,088		105,364		42,519
December 31, 2019									December 31, 2019
Interest income									Interest income	$	195,299	$	181,434	$	6,149	$	7,716	$	0
Revenue from real estate owned									Revenue from real estate owned	3,169		0		0		0		3,169
Interest expense									Interest expense	90,418		83,597		2,911		3,670		240
Net income									Net income	83,924		61,936		3,238		19,130		(380)
Total assets as of December 31, 2019									Total assets as of December 31, 2019	3,540,620		2,964,233		388,170		131,193		57,024
December 31, 2018									December 31, 2018
Interest income	$	89,564	$	87,014	$	1,351	$	1,199	Interest income	$	152,288	$	144,967	$	717	$	6,604	$	0
Interest expense	32,359		30,407		1,254		698		Interest expense	70,000		65,521		770		3,709		0
Net income	33,779		33,184		269		326		Net income	52,825		50,041		(160)		2,944		0
Total assets	1,583,661		1,517,021		389		66,251
December 31, 2016
Interest income	79,404		73,884		5,520		—
Interest expense	23,169		20,719		2,450		—
Net income	29,990		29,797		193		—
Total assets	1,248,125		1,198,806		49,319		—
December 31, 2015
Interest income	59,393		56,040		3,353		—
Interest expense	12,268		11,149		1,119		—
Net income	24,933		24,401		532		—
Total assets	1,282,484		1,150,858		131,626		—
Total assets as of December 31, 2018									Total assets as of December 31, 2018	2,606,078		2,492,440		26,474		87,164		0

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 ~~derive~~derived by using the sum of commercial mortgage loans ~~net and real estate securities, at fair value~~originated during the year as the denominator and commercial mortgage loans, held for investment net of allowance and ~~real estate securities,~~commercial mortgage loans, held-for-sale, measured at fair value as ~~the numerators.~~numerator.

F-48

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Note 1517 - Income Taxes

The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes beginning with its ~~tax return for the~~ taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and ~~distribute~~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. The Company did not have any REIT— U.S federal taxable income, net of dividends paid for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, and therefore, has not provided for REIT U.S. federal income tax expense. 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 ~~and franchise taxes.~~

taxes on its undistributed income. The Company, through ~~a subsidiary which is treated as~~its TRS, is indirectly subject to U.S. federal, state and local income taxes. TRS permit the Company to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code, and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, the Company expects to continue to maintain its qualification as a REIT. The Company’s TRS is not consolidated for U.S. federal income tax purposes, but ~~are~~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.

~~The Company's TRS recognized pre-tax income of approximately $0.6 million and U.S. federal~~ Total income tax expense ~~of $0.2 million~~(benefit) for the ~~year~~years ended December 31, ~~2017, which has been included on the accompanying consolidated statements of operations. The TRS did not have any activity during the year ended~~2020, December 31, ~~2016.~~

~~F-38~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

2019 and December 31, ~~2017~~

~~Components of the provision for income taxes consist of the following (dollars in thousands):~~

Years Ended December 31,
2017 2016 2015
Current expense (benefit)
U.S. Federal $ 140
$ —
$ —
State and local 61
—
—
Total current expense (benefit) 201
—
—
Deferred expense (benefit)
U.S. Federal 18
—
—
State and local 6
—
—
Total deferred expense (benefit) 24
—
—
Provision for income tax expense (benefit) $ 225
$ —
$ —

2018 were $(2.1) million, $4.5 million and $0.1 million, respectively.

The ~~Company’s~~Company uses a more-likely-than-not threshold for recognition and derecognition of tax ~~returns are subject~~positions taken or to ~~audit by taxing authorities. Generally, as of December 31, 2017, the tax years 2014, 2015, 2016 and 2017 remain open to examination by the major taxing jurisdictions~~be taken in ~~which the Company is subject to taxes. The Company does not expect tax expense to have an impact on either short or long-term liquidity or capital needs.~~

~~Under GAAP,~~ a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized upon settlement.return. The Company has assessed its tax positions for all open tax years beginning with ~~its taxable year~~ December 31, ~~2014~~2017 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.

~~Enacted on December 22, 2017,~~Components of the ~~recently passed Tax Cuts~~provision for income taxes consist of the following (dollars in thousands):


	Year Ended December 31,
	2020		2019		2018
Current expense/(benefit)
U.S. Federal	$	(2,086)	$	4,076	$	68
State and local	370		397		12
Total current expense/(benefit)	$	(1,716)	$	4,473	$	80
Deferred expense/(benefit)
U.S. Federal	$	0	$	10	$	(1)
State and local	(346)		0		0
Total deferred expense/(benefit)	$	(346)	$	10	$	(1)
Provision for income tax expense/(benefit)	$	(2,062)	$	4,483	$	79

The tax characteristics of the $1.30 distributions per common share declared during 2020 was $1.24 ordinary income and ~~Jobs~~$0.06 capital gain. Of the $1.24 of ordinary income, $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 the $390.48 distributions per share of Series A Preferred Stock and Series C Preferred Stock declared during 2020 was $370.93 ordinary income and $19.55 capital gain. Of the $370.93 of ordinary income, $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 2019 was $1.20 ordinary income and $0.24 return of capital. The tax characteristics of the $430.88 distributions per share of Series A Preferred Stock declared during 2019 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.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ~~("TCJA") made many significant changes~~(CARES Act) was enacted in response to the ~~U.S. federal~~COVID-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. For example, pursuant to this legislation, as of January 1, 2018, (1) the U.S. 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 ~~ending~~beginning before 2021. In addition, the CARES Act allows NOLs incurred in ~~2025), (3) the corporate alternative minimum tax is repealed,~~2018, 2019, and ~~(4) the backup withholding rate for U.S. stockholders is reduced~~2020 to ~~24%. The amounts recorded in the consolidated statement of operations is provisional. Due~~be carried back to ~~the timing~~each of the enacted legislation, as well as the technical corrections, amendments or administrative guidance that could clarify the treatment of certain provisions, the Company will continue to evaluate its conclusions and update its estimates as necessary.

The reduced corporate tax rate will apply to the Company's TRS and any other TRS it forms. Changes in tax rates and tax laws are accounted for in the period of enactment. In addition, individuals, estates and trusts may deduct up to 20% of certain pass-through income, including ordinary REIT dividends that are not "capital gain dividends" or "qualified dividend income," subject to certain limitations. For taxpayers qualifying for the full deduction, the effective maximum tax rate on ordinary REIT dividends would be 29.6% (throughfive preceding taxable years ~~ending in 2025).~~to generate a refund of previously paid income taxes. The ~~maximum rate~~Company is currently evaluating the impact of ~~withholding with respect~~the CARES Act, and expects to fully utilize the ~~Company's distributions to non-U.S. stockholders that are treated as attributable to gains from~~current year NOL under the ~~sale or exchange~~NOL carryback provision of ~~U.S. real property interests is also reduced from 35% to 21%. The deduction~~the CARES Act.

F-49

Table of net interest expense is limited for all businesses; provided that certain businesses, including real estate businesses, may elect not to be subject to such limitations and instead to depreciate their real property related assets over longer depreciable lives. To the extent that the Company's TRS or any other TRS it forms has interest expense that exceeds its interest income, the net interest expense limitation could potentially apply to such TRS.Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Note 1618 - 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, ~~2017~~2020, 2019 and ~~2016~~2018 (dollars in thousands, except per share data):

~~F-39~~

~~Table of Contents~~

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~


										March 31		June 30		September 30		December 31
	March 31		June 30		September 30		December 31
2017
2020									2020
Net interest income	$	13,451	$	13,126	$	13,350	$	17,278	Net interest income	$	23,362	$	28,106	$	29,301	$	32,547
Net income	$	6,049	$	6,281	$	6,975	$	14,474	Net income	(7,400)		7,814		21,497		32,835
Net income applicable to common stock									Net income applicable to common stock	(11,915)		4,359		16,739		25,624
Basic net income per share	$	0.19	$	0.20	$	0.22	$	0.46	Basic net income per share	$	(0.27)	$	0.10	$	0.38	$	0.58
Diluted net income per share	$	0.19	$	0.20	$	0.22	$	0.46	Diluted net income per share	$	(0.27)	$	0.10	$	0.38	$	0.58
Basic weighted average shares outstanding	31,740,256		31,850,897		31,741,679		31,754,734		Basic weighted average shares outstanding	44,263,334		44,376,437		44,405,196		44,492,325
Diluted weighted average shares outstanding	31,750,045		31,860,444		31,756,503		31,769,048		Diluted weighted average shares outstanding	44,274,852		44,389,380		44,421,084		44,508,213
2016
2019									2019
Net interest income	$	15,523	$	14,829	$	12,933	$	12,950	Net interest income	$	26,145	$	22,356	$	29,349	$	27,031
Net income	$	9,420	$	8,860	$	5,373	$	6,337	Net income	19,890		14,526		25,913		23,595
Net income applicable to common stock									Net income applicable to common stock	16,108		11,036		20,460		19,310
Basic net income per share	$	0.30	$	0.28	$	0.17	$	0.20	Basic net income per share	$	0.40	$	0.27	$	0.48	$	0.44
Diluted net income per share	$	0.30	$	0.28	$	0.17	$	0.20	Diluted net income per share	$	0.40	$	0.27	$	0.48	$	0.44
Basic weighted average shares outstanding	31,548,897		31,802,261		31,516,876		31,767,915		Basic weighted average shares outstanding	39,798,215		41,226,805		42,795,038		43,549,406
Diluted weighted average shares outstanding	31,555,011		31,807,927		31,523,911		31,777,994		Diluted weighted average shares outstanding	39,811,304		41,239,548		42,807,773		43,560,937
2018									2018
Net interest income									Net interest income	$	10,734	$	19,738	$	25,823	$	25,993
Net income									Net income	5,296		12,102		19,000		16,427
Net income applicable to common stock									Net income applicable to common stock	5,296		12,086		17,745		14,054
Basic net income per share									Basic net income per share	$	0.17	$	0.38	$	0.49	$	0.37
Diluted net income per share									Diluted net income per share	$	0.17	$	0.38	$	0.49	$	0.37
Basic weighted average shares outstanding									Basic weighted average shares outstanding	31,670,518		31,762,199		35,468,648		38,088,364
Diluted weighted average shares outstanding									Diluted weighted average shares outstanding	31,684,832		31,820,527		38,942,428		44,504,418

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 1719 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Annual Report on Form ~~10-K and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:~~

~~Distributions Paid~~

On ~~January 2, 2018~~, the Company paid a distribution of $3.9 million to stockholders of record during the month of December 31, 2017. Approximately $2.6 million of the distribution was paid in cash, while $1.2 million was used to purchase 65,288 shares for those stockholders that chose to reinvest distributions through the DRIP.

~~Share Repurchase Program~~

As permitted under the SRP, in January 2018, our board of directors approved, with respect to redemption requests received during the semi-annual period from July 1, 2017 to December 31, 2017, the repurchase of shares validly submitted for repurchase in an amount such that the aggregate amount of shares repurchased pursuant to redemption requests received for the semi-annual period ended December 31, 2017 did not exceed 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Accordingly, 417,376 shares at an average per share of $18.56 (including all shares submitted for death and disability) were approved for repurchase and completed in January 2017.

~~Liquidity~~

Subsequent to year end, on February 15, 2018 the Company negotiated an increase in credit line to the existing JPM Repo Facility from $300.0 million to $520.0 million, of which $70.0 million is reserved for a specific asset. The Company used the increased capacity to call the CLO RFT 2015 - FL1 by paying off all note holders.

10-K.

~~F-40~~

F-50

Table of Contents

BENEFIT STREET PARTNERS REALTY TRUST, INC.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

~~Related Party Transactions~~

~~Amended Advisory Agreement~~

On January 19, 2018, the Company entered into an amendment to 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 of the 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.

~~Loan Acquisition~~

On February 22, 2018, the Company purchased commercial mortgage loans from an entity that is an affiliate of our 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. These loans are expected to be sold into a securitization vehicle through our TRS segment.

~~Equity Offering~~

On February 14, 2018 (the “Commitment Date”) the Company entered into stock purchase agreements (collectively, the “Purchase Agreements”), by and between the Company and certain institutional investors (the “Institutional Investors”), certain officers of the Company, and certain owners, employees and associates of the Advisor and its affiliates (collectively, the “Manager Investors,” and together with the Institutional Investors, the “Investors”), pursuant to which the Investors committed to purchase an aggregate amount of up to approximately $97.0 million of common stock (including Manager Investor commitments of approximately $32.1 million) of the Company in one or more closings. The purchase price will be $16.87 per share. The timing of any closing, and the amount of shares to be sold at such Closing, will be determined by the Company in its sole discretion, subject to certain limitations. As described in the Purchase Agreements, the Company may enter into additional Purchase Agreements with other investors within 12 months of the Commitment Date.

~~BENEFIT STREET PARTNERS REALTY TRUST, INC.~~

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

December 31, ~~2017~~2020

(InDollars in thousands)

Description

Property Type

Face Amount

Carrying Amount

Interest
Rate

Payment
Terms

Maturity Date

Senior Debt 1

Industrial

33,655

1 month LIBOR + 4.00%

Interest Only

11/9/2021

Senior Debt 2

Mixed Use

12,839

1 month LIBOR + 5.00%

Interest Only

4/9/2021

Senior Debt 3

Office

14,034

1 month LIBOR + 4.45%

Interest Only

9/9/2021

Senior Debt 4

Office

8,391

1 month LIBOR +6.00%

Amortizing Balloon

10/9/2021

Senior Debt 5

Multifamily

37,812

1 month LIBOR + 3.35%

Amortizing Balloon

1/9/2022

Senior Debt 6

Office

26,811

1 month LIBOR + 4.15%

Amortizing Balloon

10/9/2021

Senior Debt 7

Hospitality

10,400

1 month LIBOR + 6.25%

Interest Only

5/9/2022

Senior Debt 8

Hospitality

5,894

1 month LIBOR + 3.50%

Amortizing Balloon

12/9/2021

Senior Debt 9

Hospitality

57,075

1 month LIBOR + 5.19%

Interest Only

6/9/2019

Senior Debt 10

Multifamily

77,945

77,701

1 month LIBOR + 4.50%

Interest Only

12/31/2021

Senior Debt 11

Hospitality

10,250

10,247

1 month LIBOR + 5.25%

Interest Only

2/9/2021

Senior Debt 12

Hospitality

23,000

22,998

1 month LIBOR + 6.00%

Interest Only

1/9/2021

Senior Debt 13

Office

23,726

1 month LIBOR + 5.15%

Interest Only

2/9/2021

Senior Debt 14

Multifamily

41,826

41,811

1 month LIBOR + 3.70%

Interest Only

3/9/2021

Senior Debt 15

Hospitality

28,272

28,255

1 month LIBOR + 4.00%

Interest Only

4/9/2021

Senior Debt 16

Hospitality

22,700

22,688

1 month LIBOR + 4.40%

Interest Only

4/9/2021

Senior Debt 17

Multifamily

35,886

1 month LIBOR + 3.00%

Interest Only

5/9/2021

Senior Debt 18

Self Storage

3,851

3,849

1 month LIBOR + 4.05%

Interest Only

5/9/2021

Senior Debt 19

Self Storage

6,496

6,492

1 month LIBOR + 4.05%

Interest Only

5/9/2021

Senior Debt 20

Self Storage

7,606

7,600

1 month LIBOR + 4.05%

Interest Only

5/9/2021

Senior Debt 21

Self Storage

2,400

2,398

1 month LIBOR + 4.05%

Interest Only

6/9/2021

Senior Debt 22

Self Storage

6,310

6,305

1 month LIBOR + 5.05%

Interest Only

6/9/2021

Senior Debt 23

Hospitality

22,355

22,332

1 month LIBOR + 3.50%

Interest Only

3/9/2023

Senior Debt 24

Mixed Use

59,451

1 month LIBOR + 4.87%

Interest Only

7/9/2021

Senior Debt 25

Office

21,100

1 month LIBOR + 3.75%

Interest Only

9/9/2021

Senior Debt 26

Self Storage

6,299

1 month LIBOR + 6.00%

Interest Only

9/9/2021

Senior Debt 27

Office

16,342

1 month LIBOR + 3.40%

Amortizing Balloon

9/9/2021

Senior Debt 28

Retail

29,500

29,426

6.25%

Interest Only

9/9/2023

Senior Debt 29

Self Storage

11,966

1 month LIBOR + 5.50%

Interest Only

10/9/2021

Senior Debt 30

Multifamily

16,172

1 month LIBOR + 3.15%

Interest Only

11/9/2021

Senior Debt 31

Multifamily

22,417

1 month LIBOR + 3.40%

Interest Only

11/9/2021

Senior Debt 32

Multifamily

29,868

1 month LIBOR + 3.35%

Interest Only

11/9/2021

Senior Debt 33

Land

16,400

1 month LIBOR + 6.00%

Interest Only

12/11/2021

Senior Debt 34

Hospitality

8,523

8,507

1 month LIBOR + 4.80%

Amortizing Balloon

1/9/2022

Senior Debt 35

Industrial

14,160

14,159

1 month LIBOR + 3.95%

Interest Only

1/9/2021

Senior Debt 36

Multifamily

48,500

48,498

1 month LIBOR + 3.75%

Interest Only

1/9/2021

Senior Debt 37

Multifamily

23,295

23,196

1 month LIBOR + 5.70%

Interest Only

8/9/2021

Senior Debt 38

Office

7,200

7,198

1 month LIBOR + 3.90%

Interest Only

2/9/2021

Senior Debt 39

Manufactured Housing

8,893

8,858

1 month LIBOR + 4.40%

Interest Only

3/9/2022

Senior Debt 40

Hospitality

14,000

13,985

1 month LIBOR + 4.47%

Interest Only

4/9/2021

Senior Debt 41

Retail

14,250

14,260

1 month LIBOR + 3.95%

Interest Only

4/9/2021

Senior Debt 42

Hospitality

21,000

20,981

1 month LIBOR + 4.14%

Interest Only

5/9/2021

F-51

Table of Contents

Face Carrying Interest Payment Maturity
Description Property Type Amount Amount Rate Terms Date
Senior 1 Office $ 31,250
$ 31,250
1M LIBOR + 4.50% Interest Only 9/9/2018
Senior 2 Retail 9,450
9,451
1M LIBOR + 4.90% Interest Only 9/9/2018
Senior 3 Office 41,885
41,791
1M LIBOR + 5.25% Interest Only 12/9/2018
Senior 4 Office 30,451
30,394
1M LIBOR + 4.60% Interest Only 2/9/2019
Senior 5 Retail 11,684
11,665
1M LIBOR + 4.50% Interest Only 2/9/2019
Senior 6 Multifamily 14,990
14,988
1M LIBOR + 5.00% Interest Only 2/9/2018
Senior 7 Retail 10,790
10,787
1M LIBOR + 5.25% Interest Only 3/9/2018
Senior 8 Hospitality 16,800
16,795
1M LIBOR + 4.90% Interest Only 4/9/2018
Senior 9 Multifamily 26,410
26,388
1M LIBOR + 4.25% Interest Only 5/9/2018
Senior 10 Multifamily 14,980
14,968
1M LIBOR + 4.50% Interest Only 5/9/2018
Senior 11 Retail 14,600
14,591
1M LIBOR + 4.25% Interest Only 5/9/2018
Senior 12 Retail 27,249
27,245
1M LIBOR + 4.75% Interest Only 6/9/2018
Senior 13 Office 9,844
9,832
1M LIBOR + 4.65% Interest Only 6/9/2018
Senior 14 Industrial 19,553
19,533
1M LIBOR + 4.25% Interest Only 7/9/2018
Senior 15 Multifamily 18,941
18,927
1M LIBOR + 4.20% Interest Only 7/9/2018
Senior 16 Hospitality 10,350
10,336
1M LIBOR + 5.50% Interest Only 7/9/2018
Senior 17 Hospitality 15,375
15,362
1M LIBOR + 5.30% Interest Only 7/9/2018
Senior 18 Office 45,235
45,179
1M LIBOR + 5.50% Interest Only 7/9/2018
Senior 19 Retail 7,500
7,487
1M LIBOR + 5.00% Interest Only 7/9/2018
Senior 20 Retail 4,725
4,715
1M LIBOR + 5.50% Interest Only 8/9/2018
Senior 21 Multifamily 44,595
44,529
1M LIBOR + 4.25% Interest Only 8/9/2018
Senior 22 Office 14,250
14,229
1M LIBOR + 4.75% Interest Only 3/9/2019
Senior 23 Multifamily 24,387
24,363
1M LIBOR + 4.25% Interest Only 11/9/2018
Senior 24 Multifamily 5,538
5,554
1M LIBOR + 3.85% Interest Only 11/9/2018
Senior 25 Multifamily 5,519
5,525
1M LIBOR + 3.95% Interest Only 11/9/2018
Senior 26 Multifamily 13,120
13,127
1M LIBOR + 3.95% Interest Only 11/9/2018
Senior 27 Multifamily 5,894
5,898
1M LIBOR + 4.05% Interest Only 11/9/2018
Senior 28 Industrial 33,655
33,647
1M LIBOR + 4.00% Interest Only 11/9/2018
Senior 29 Office 12,000
11,984
1M LIBOR + 4.75% Interest Only 11/9/2019
Senior 30 Office 35,000
34,978
1M LIBOR + 5.00% Interest Only 11/9/2018
Senior 31 Office 29,163
29,136
1M LIBOR + 4.25% Interest Only 1/9/2019
Senior 32 Office 15,030
14,991
1M LIBOR + 5.35% Interest Only 3/9/2019
Senior 33 Multifamily 14,000
13,990
1M LIBOR + 5.00% Interest Only 2/9/2019
Senior 34 Office 16,300
16,250
1M LIBOR + 6.00% Interest Only 2/9/2019
Senior 35 Retail 13,700
13,684
1M LIBOR + 4.75% Interest Only 3/9/2019
Senior 36 Retail 28,500
28,478
1M LIBOR + 4.73% Interest Only 4/9/2019
Senior 37 Retail 12,700
12,690
1M LIBOR + 5.00% Interest Only 4/9/2019
Senior 38 Multifamily 37,410
37,347
1M LIBOR + 6.75% Interest Only 6/9/2019
Senior 39 Retail 15,750
15,732
1M LIBOR + 5.25% Interest Only 6/9/2019

Description

Property Type

Face Amount

Carrying Amount

Interest
Rate

Payment
Terms

Maturity Date

Senior Debt 43

Multifamily

24,711

24,669

1 month LIBOR + 3.10%

Interest Only

5/9/2022

Senior Debt 44

Multifamily

37,643

37,581

1 month LIBOR + 3.10%

Interest Only

5/9/2022

Senior Debt 45

Office

42,631

42,519

1 month LIBOR + 3.50%

Interest Only

5/9/2022

Senior Debt 46

Retail

8,500

1 month LIBOR + 7.50%

Interest Only

12/9/2021

Senior Debt 47

Hospitality

10,580

10,547

1 month LIBOR + 4.50%

Interest Only

6/9/2022

Senior Debt 48

Multifamily

18,100

18,097

1 month LIBOR + 3.40%

Interest Only

6/9/2021

Senior Debt 49

Hospitality

19,900

19,850

1 month LIBOR + 4.15%

Interest Only

6/9/2022

Senior Debt 50

Multifamily

18,656

18,604

1 month LIBOR + 3.10%

Interest Only

6/9/2022

Senior Debt 51

Office

34,400

34,232

1 month LIBOR + 3.90%

Interest Only

6/9/2022

Senior Debt 52

Hospitality

20,930

20,852

1 month LIBOR + 3.75%

Interest Only

8/9/2022

Senior Debt 53

Hospitality

15,500

15,452

1 month LIBOR + 4.00%

Interest Only

10/9/2022

Senior Debt 54

Hospitality

5,250

5,242

1 month LIBOR + 4.25%

Interest Only

7/9/2021

Senior Debt 55

Hospitality

12,750

12,708

1 month LIBOR + 4.45%

Interest Only

8/9/2022

Senior Debt 56

Hospitality

9,545

9,525

1 month LIBOR + 4.50%

Interest Only

8/9/2021

Senior Debt 57

Retail

9,400

9,371

1 month LIBOR + 4.20%

Interest Only

9/9/2022

Senior Debt 58

Manufactured Housing

12,200

12,162

1 month LIBOR + 3.65%

Interest Only

10/9/2022

Senior Debt 59

Manufactured Housing

24,100

24,029

1 month LIBOR + 3.65%

Interest Only

9/9/2022

Senior Debt 60

Multifamily

23,149

23,103

1 month LIBOR + 2.65%

Interest Only

9/9/2021

Senior Debt 61

Office

29,750

29,681

1 month LIBOR + 3.35%

Interest Only

9/9/2022

Senior Debt 62

Hospitality

34,484

34,407

1 month LIBOR + 3.99%

Amortizing Balloon

11/9/2021

Senior Debt 63

Multifamily

12,839

12,787

1 month LIBOR + 2.65%

Interest Only

11/9/2022

Senior Debt 64

Multifamily

37,021

36,924

1 month LIBOR + 2.75%

Interest Only

11/9/2023

Senior Debt 65

Industrial

53,500

53,297

1 month LIBOR + 3.75%

Interest Only

12/9/2021

Senior Debt 66

Office

21,825

21,728

1 month LIBOR + 3.50%

Interest Only

12/9/2022

Senior Debt 67

Hospitality

7,100

7,076

1 month LIBOR + 4.00%

Interest Only

12/9/2022

Senior Debt 68

Industrial

22,230

22,133

1 month LIBOR + 3.55%

Interest Only

12/9/2023

Senior Debt 69

Multifamily

21,083

21,017

1 month LIBOR + 2.75%

Interest Only

12/9/2022

Senior Debt 70

Multifamily

27,087

26,989

1 month LIBOR + 3.15%

Interest Only

12/9/2022

Senior Debt 71

Multifamily

26,130

26,069

1 month LIBOR + 2.70%

Interest Only

12/9/2022

Senior Debt 72

Multifamily

7,150

7,119

1 month LIBOR + 4.75%

Interest Only

12/9/2021

Senior Debt 73

Multifamily

25,000

24,935

1 month LIBOR + 3.00%

Interest Only

1/9/2022

Senior Debt 74

Office

25,500

25,351

1 month LIBOR + 4.35%

Interest Only

1/9/2024

Senior Debt 75

Multifamily

14,181

14,141

1 month LIBOR + 3.10%

Interest Only

2/9/2023

Senior Debt 76

Office

48,276

47,862

1 month LIBOR + 3.70%

Interest Only

2/9/2023

Senior Debt 77

Industrial

25,350

25,315

1 month LIBOR + 3.50%

Interest Only

5/9/2021

Senior Debt 78

Multifamily

11,800

11,757

1 month LIBOR + 3.15%

Interest Only

8/9/2022

Senior Debt 79

Office

27,598

27,491

1 month LIBOR + 2.70%

Interest Only

2/9/2023

Senior Debt 80

Multifamily

75,100

75,260

1 month LIBOR + 4.35%

Interest Only

8/9/2021

Senior Debt 81

Manufactured Housing

1,385

5.50%

Interest Only

5/9/2025

Senior Debt 82

Industrial

14,650

14,606

1 month LIBOR + 6.00%

Interest Only

11/9/2021

Senior Debt 83

Multifamily

7,149

7,123

1 month LIBOR + 4.75%

Interest Only

5/9/2022

Senior Debt 84

Multifamily

6,764

6,731

1 month LIBOR + 4.90%

Interest Only

7/9/2023

Senior Debt 85

Multifamily

46,000

45,797

1 month LIBOR + 4.75%

Interest Only

7/9/2023

Senior Debt 86

Multifamily

5,550

5,530

1 month LIBOR + 6.87%

Interest Only

1/9/2022

Senior Debt 87

Industrial

16,400

16,312

1 month LIBOR + 6.25%

Interest Only

7/9/2023

F-52

Table of Contents

Senior 40 Retail 25,000
24,953
1M LIBOR + 4.40% Interest Only 7/9/2019
Senior 41 Multifamily 14,817
14,825
1M LIBOR + 7.10% Interest Only 5/9/2019
Senior 42 Hospitality 12,600
12,578
1M LIBOR + 5.50% Interest Only 6/9/2019
Senior 43 Hospitality 11,750
11,709
1M LIBOR + 5.50% Interest Only 5/9/2020
Senior 44 Retail 20,450
20,394
1M LIBOR + 5.00% Interest Only 7/9/2020
Senior 45 Multifamily 26,000
26,023
1M LIBOR + 7.50% Interest Only 3/9/2019
Senior 46 Hospitality 14,900
14,877
1M LIBOR + 6.25% Interest Only 9/9/2019
Senior 47 Office 11,580
11,528
1M LIBOR + 4.45% Interest Only 9/9/2020
Senior 48 Office 9,750
9,723
1M LIBOR + 5.50% Interest Only 10/9/2019
Senior 49 Multifamily 39,700
39,644
1M LIBOR + 5.50% Interest Only 10/9/2019
Senior 50 Multifamily 25,500
25,473
1M LIBOR + 4.85% Interest Only 8/9/2019
Senior 51 Retail 7,500
7,490
1M LIBOR + 5.25% Interest Only 6/9/2019
Senior 52 Office 62,040
61,940
1M LIBOR + 4.50% Interest Only 6/9/2019
Senior 53 Multifamily 39,033
38,888
1M LIBOR + 4.50% Interest Only 7/9/2020
Senior 54 Hospitality 8,875
8,766
1M LIBOR + 6.20% Interest Only 10/9/2019
Senior 55 Office 25,120
24,939
1M LIBOR + 4.15% Interest Only 10/9/2019
Senior 56 Multifamily 34,875
34,706
1M LIBOR + 3.80% Interest Only 11/9/2019
Senior 57 Multifamily 81,000
80,628
1M LIBOR + 7.00% Interest Only 11/9/2019
Senior 58 Office 29,800
29,660
1M LIBOR + 7.00% Interest Only 2/9/2018
Senior 59 Hospitality 10,600
10,485
1M LIBOR + 5.00% Interest Only 11/9/2020
Senior 60 Office 20,000
19,877
1M LIBOR + 4.25% Interest Only 12/9/2020
Senior 61 Hospitality 7,700
7,657
1M LIBOR + 5.75% Interest Only 12/9/2019
Senior 62 Hospitality 57,075
56,788
1M LIBOR + 5.75% Interest Only 6/9/2019
Senior 63 Hospitality 18,000
17,063
5.75% Interest Only 10/6/2021
Mezzanine 1 Multifamily 4,000
4,036
12.0% Interest Only 1/6/2024
Mezzanine 2 Office 7,000
7,012
12.0% Interest Only 5/1/2019
Mezzanine 3 Multifamily 3,480
3,494
9.5% Interest Only 7/1/2024
Mezzanine 4 Office 10,000
9,572
10.0% Interest Only 9/6/2024
Mezzanine 5 Multifamily 3,000
3,003
1M LIBOR + 13.00% Interest Only 3/9/2019
Mezzanine 6 Multifamily 8,000
7,965
1M LIBOR + 13.00% Interest Only 11/9/2019
$ 1,407,718
$ 1,403,512

Description

Property Type

Face Amount

Carrying Amount

Interest
Rate

Payment
Terms

Maturity Date

Senior Debt 88

Multifamily

14,505

14,425

1 month LIBOR + 4.75%

Interest Only

7/9/2023

Senior Debt 89

Multifamily

23,438

23,337

1 month LIBOR + 4.65%

Interest Only

7/9/2023

Senior Debt 90

Multifamily

4,300

4,281

1 month LIBOR + 5.50%

Interest Only

2/9/2023

Senior Debt 91

Manufactured Housing

7,680

7,645

1 month LIBOR + 4.50%

Interest Only

8/9/2023

Senior Debt 92

Mixed Use

30,465

30,246

1 month LIBOR + 5.15%

Interest Only

8/9/2023

Senior Debt 93

Multifamily

3,140

3,126

1 month LIBOR + 6.25%

Interest Only

8/9/2022

Senior Debt 94

Industrial

24,657

24,376

1 month LIBOR + 4.60%

Interest Only

9/6/2022

Senior Debt 95

Multifamily

1 month LIBOR + 5.25%

Interest Only

7/1/2022

Senior Debt 96

Hospitality

27,000

26,878

1 month LIBOR + 6.50%

Interest Only

9/9/2023

Senior Debt 97

Multifamily

2,465

2,453

1 month LIBOR + 5.75%

Interest Only

9/9/2022

Senior Debt 98

Multifamily

50,000

49,789

1 month LIBOR + 6.69%

Interest Only

9/9/2022

Senior Debt 99

Self Storage

29,895

29,759

1 month LIBOR + 5.00%

Interest Only

9/9/2023

Senior Debt 100

Multifamily

11,622

11,545

1 month LIBOR + 4.75%

Interest Only

9/9/2022

Senior Debt 101

Manufactured Housing

3,400

3,384

1 month LIBOR + 5.00%

Interest Only

9/9/2022

Senior Debt 102

Multifamily

27,550

27,431

1 month LIBOR + 5.75%

Interest Only

9/9/2022

Senior Debt 103

Multifamily

76,000

75,649

1 month LIBOR + 4.10%

Interest Only

10/9/2023

Senior Debt 104

Multifamily

58,000

57,732

1 month LIBOR + 5.25%

Interest Only

10/9/2023

Senior Debt 105

Manufactured Housing

5,020

4,996

1 month LIBOR + 5.25%

Interest Only

10/9/2023

Senior Debt 106

Office

19,003

18,909

1 month LIBOR + 4.50%

Interest Only

10/9/2023

Senior Debt 107

Office

69,675

69,339

5.15%

Interest Only

10/9/2025

Senior Debt 108

Office

30,900

30,670

1 month LIBOR + 5.20%

Interest Only

10/9/2023

Senior Debt 109

Multifamily

10,945

10,895

1 month LIBOR + 7.04%

Interest Only

5/9/2022

Senior Debt 110

Self Storage

11,600

11,546

1 month LIBOR + 4.76%

Interest Only

11/9/2022

Senior Debt 111

Industrial

24,552

24,426

1 month LIBOR + 4.35%

Interest Only

11/9/2022

Senior Debt 112

Manufactured Housing

5,000

4,929

1 month LIBOR + 5.90%

Interest Only

5/9/2023

Senior Debt 113

Office

12,750

12,682

1 month LIBOR + 5.00%

Interest Only

11/9/2023

Senior Debt 114

Multifamily

40,937

40,682

1 month LIBOR + 4.35%

Interest Only

11/9/2023

Senior Debt 115

Multifamily

36,200

35,997

1 month LIBOR + 4.45%

Interest Only

11/9/2023

Senior Debt 116

Multifamily

8,250

8,200

1 month LIBOR + 5.50%

Interest Only

11/9/2023

Senior Debt 117

Retail

11,963

11,833

1 month LIBOR + 4.87%

Interest Only

5/9/2022

Senior Debt 118

Manufactured Housing

3,585

3,567

1 month LIBOR + 5.40%

Interest Only

12/9/2022

Senior Debt 119

Multifamily

5,730

5,701

1 month LIBOR + 5.00%

Interest Only

6/9/2023

Senior Debt 120

Multifamily

18,800

18,613

1 month LIBOR + 4.00%

Interest Only

12/9/2024

Senior Debt 121

Industrial

14,250

14,160

1 month LIBOR + 4.50%

Interest Only

12/9/2023

Senior Debt 122

Office

11,550

11,479

1 month LIBOR + 5.50%

Interest Only

1/9/2024

Senior Debt 123

Multifamily

21,000

20,884

1 month LIBOR + 4.60%

Interest Only

1/9/2024

Senior Debt 124

Office

26,000

25,869

1 month LIBOR + 5.00%

Interest Only

1/9/2023

Senior Debt 125

Hospitality

17,401

17,243

5.75%

Amortizing Balloon

10/6/2021

Mezzanine Loan 1

Multifamily

3,480

3,488

9.50%

Interest Only

7/1/2024

Mezzanine Loan 2

Retail

3,500

10.00%

Interest Only

2/6/2029

Mezzanine Loan 3

Multifamily

6,500

6,473

1 month LIBOR + 10.25%

Interest Only

9/9/2022

Mezzanine Loan 4

Retail

1,438

1,444

1 month LIBOR + 10.75%

Interest Only

5/9/2022

Mezzanine Loan 5

Multifamily

1,000

1,005

11.00%

Interest Only

11/6/2028

2,722,863

2,714,734

~~F-43~~

F-53



Maryland						46-1406086
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
9 West 57th Street, Suite 4920, New York, NY						10019
(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: None~~Act
Title of Each Class	Trading Symbols	Name 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~~
(Title of ~~class)~~Class)



(Mark One)
x☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PART I					Page

Item 1.			Business		1
Item 1A.			Risk Factors		5
Item 1B.			Unresolved Staff Comments		19
Item 2.			Properties		19
Item 3.			Legal Proceedings		19
Item 4.			Mine Safety Disclosure		19

PART II

~~PART I~~			~~Page~~

~~Item 1.~~	~~Business~~	1
~~Item 1A.~~	~~Risk Factors~~	5
~~Item 1B.~~	~~Unresolved Staff Comments~~	28
~~Item 2.~~	~~Properties~~	28
~~Item 3.~~	~~Legal Proceedings~~	29
~~Item 4.~~	~~Mine Safety Disclosure~~	29

~~PART II~~

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			3020
Item 6.			Selected Financial Data		3422
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		3623
Item 7A.			Quantitative and Qualitative Disclosures about Market Risk		5752
Item 8.			Financial Statements and Supplementary Data		5853
Item 9.			Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		5853
Item 9A.			Controls and Procedures		5853
Item 9B.			Other Information		5954

PART III

Item 10.			Directors, Executive Officers and Corporate Governance		6055
Item 11.			Executive Compensation		6055
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		6055
Item 13.			Certain Relationships and Related Transactions and Director Independence		6055
Item 14.			Principal Accounting Fees and Services		6055

PART IV

Item 15.			Exhibits and Financial Statement Schedules		6156
Item 16.			Form 10-K Summary		6156
Index to Exhibits					6156
Signatures					6459



	December 31,
Balance sheet data (in thousands)	2017		2016
Commercial mortgage loans, held for investment, net	$	1,402,046	$	1,046,556
Commercial mortgage loans, held-for-sale	—		21,179
Commercial mortgage loans, held-for-sale, measured at fair value	28,531		—
Real estate securities, available for sale, at fair value	—		49,049
Total assets	1,583,661		1,248,125
Collateralized loan obligations	826,150		278,450
Repurchase agreements - commercial mortgage loans	65,690		257,664
Other financing - commercial mortgage loans	25,698		—
Repurchase agreements - real estate securities	39,035		66,639
Total liabilities	973,322		614,475
Total stockholders' equity	610,339		633,650



	Year Ended December 31,
Operating data (in thousands)	2017			2016		2015		2014			2013
Interest income:
Interest income	$	89,564		$	79,404	$	59,393	$	15,466		$	775
Less: Interest expense	32,359			23,169		12,268		2,196			32
Net interest income	57,205			56,235		47,125		13,270			743
Expenses:
Asset management and subordinated performance fee	9,273			9,504		7,615		604			—
Acquisition fees and acquisition expenses	4,197			806		7,916		4,386			—
Administrative services expenses ⁽¹⁾	6,765			4,376		644		—			—
Other expenses	9,281			7,803		5,699		2,198			641
Total expenses	29,516			22,489		21,874		7,188			641
Other (income)/loss:
Loan loss (recovery) provision	(715		)	1,293		318		570			—
Realized (gain) loss on sale of real estate securities	(172		)	1,906		—		—			—
Realized (gain) loss on sale of commercial mortgage loan	(120		)	—		—		(112		)	—
Realized (gain) loss on sale of commercial mortgage loan, held-for-sale, measured at fair value	(4,523		)	—		—		—			—
Impairment losses of real estate securities	—			310		—		—			—
Unrealized (gain) loss on loans held-for-sale	(247		)	247		—		—			—
Unrealized (gain) loss on derivatives	17			—		—		—			—
Realized (gain) loss on derivatives	(555		)	—		—		—			—
Total other (income) /loss	$	(6,315	)	$	3,756	$	318	$	458		$	—
Income (loss) before taxes	34,004			29,990		24,933		5,624			102
Income tax expense (benefit)	225			—		—		209			—
Net income (loss)	$	33,779		$	29,990	$	24,933	$	5,415		$	102

Basic net income per share	$	1.06		$	0.95	$	1.03	$	0.75		$	0.19
Diluted net income per share	$	1.06		$	0.95	$	1.03	$	0.75		$	0.19
Basic weighted average shares outstanding	31,772,231			31,659,274		24,253,905		7,227,169			526,084
Diluted weighted average shares outstanding	31,784,889			31,666,504		24,259,169		7,232,559			530,096
Distributions per common share	$	1.80		$	2.06	$	2.06	$	2.06		$	1.22



	Years Ended December 31,
	2017							2016
	Average Carrying Value⁽¹⁾			Interest Income/Expense⁽²⁾		WA Yield/Financing Cost⁽³⁾⁽⁴⁾		Average Carrying Value⁽¹⁾			Interest Income/Expense⁽²⁾		WA Yield/Financing Cost⁽³⁾⁽⁴⁾
Interest-earning assets:
Real estate debt	$	1,231,824		$	88,213	7.2	%	$	1,123,992		$	73,884	6.6	%
Real estate securities	19,016			1,351		7.1	%	109,035			5,520		5.1	%
Total	$	1,250,840		$	89,564	7.2	%	$	1,233,027		$	79,404	6.4	%
Interest-bearing liabilities:
Repurchase Agreements - commercial mortgage loans	$	300,199		$	14,142	4.7	%	$	250,788		$	12,079	4.8	%
Other financing - commercial mortgage loans	20,086			1,213		6.0	%	—			—		n/a
Repurchase Agreements - real estate securities	50,379			1,499		3.0	%	106,086			2,450		2.3	%
Collateralized loan obligations	406,262			15,385		3.8	%	286,936			8,640		3.0	%
Derivative instruments	—			120		n/a		—			—		n/a
Total	$	776,926		$	32,359	4.2	%	$	643,810		$	23,169	3.6	%
Net interest income/spread				$	57,205	3.0	%				$	56,235	2.8	%
Average leverage %⁽⁵⁾	62.1		%					52.2		%
Weighted average levered yield⁽⁶⁾						9.1	%						7.9	%



	For the period from November 15, 2012 (date of inception) to December 31, 2017
Distributions paid:
Common stockholders in cash	$	113,906
Common stockholders pursuant to DRIP / offering proceeds	70,475
Total distributions paid	$	184,381
Reconciliation of net income:
Net interest income	$	174,578
Realized loss on sale of real estate securities	(1,734		)
Realized gain on sale of commercial mortgage loan	232
Acquisition fees and expenses	(17,305		)
Other operating expenses	(66,094		)
Net income	$	89,677
Cash flows provided by operations	$	72,272



	Convertible Stock					Common Stock
	Number of Shares		Amount			Number of Shares		Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, December 31, 2014	1,000		$	1		15,472,192		$	155		$	340,874		$	(307	)	$	(10,216	)	$	330,507
Issuance of common stock	—		—			15,428,195		155			385,000			—			—			385,155
Common stock repurchases	—		—			(360,719	)	(4		)	(8,550		)	—			—			(8,554		)
Common stock offering costs, commissions and dealer manager fees	—		—			—		—			(45,917		)	—			—			(45,917		)
Common stock issued through distribution reinvestment plan	—		—			842,946		8			20,153			—			—			20,161
Share-based compensation	—		—			2,666		—			30			—			—			30
Net income	—		—			—		—			—			—			24,933			24,933
Distributions declared	—		—			—		—			—			—			(50,039		)	(50,039		)
Other comprehensive loss	—		—			—		—			—			(1,947		)	—			(1,947		)
Balance, December 31, 2015	1,000		1			31,385,280		314			691,590			(2,254		)	(35,322		)	654,329
Common stock repurchases	—		—			(537,209	)	(5		)	(12,965		)	—			—			(12,970		)
Common stock offering costs⁽¹⁾	—		—			—		—			793			—			—			793
Common stock issued through distribution reinvestment plan	—		—			1,031,812		10			25,037			—			—			25,047
Share-based compensation	—		—			4,748		—			44			—			—			44
Net income	—		—			—		—			—			—			29,990			29,990
Distributions declared	—		—			—		—			—			—			(65,337		)	(65,337		)
Conversion of convertible stocks	(1,000	)	(1		)	—		—			1			—			—			—
Other comprehensive loss	—		—			—		—			—			1,754			—			1,754
Balance, December 31, 2016	—		—			31,884,631		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 plan	—		—			1,016,165		12			20,039			—			—			20,051
Share-based compensation	—		—			5,984		—			97			—			—			97
Net income	—		—			—		—			—			—			33,779			33,779
Distributions declared	—		—			—		—			—			—			(57,192		)	(57,192		)
Other comprehensive income	—		—			—		—			—			500			—			500
Balance, December 31, 2017	—		$	—		31,834,072		$	320		$	704,101		$	—		$	(94,082	)	$	610,339



		Weighted Average
	Number of Investments	Interest Rate		Maturity	Par Value		Fair Value
December 31, 2017	—	—	%	N/A	$	—	$	—
December 31, 2016	6	5.8	%	February 2020	$	50,000	$	49,049



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
December 31, 2017	$	—	$	—	$	—		$	—
December 31, 2016	$	49,548	$	—	$	(499	)	$	49,049



As of December 31, 2017							Ending Weighted Average Interest Rate		Initial Term Maturity
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense ⁽¹⁾		Ending Weighted Average Interest Rate		Initial Term Maturity
JPM Repo Facility ⁽²⁾	$	300,000	$	42,042	$	8,453	3.77	%	6/12/2019
GS Repo Facility ⁽³⁾	250,000		13,500		4,573		3.83	%	12/27/2018
USB Repo Facility ⁽⁴⁾	100,000		—		303		N/A		6/15/2020
CS Repo Facility ⁽⁵⁾	250,000		10,148		577		3.99	%	8/30/2018
Barclays Facility ⁽⁶⁾	75,000		—		236		N/A		9/19/2019
Total	$	975,000	$	65,690	$	14,142



As of December 31, 2016							Ending Weighted Average Interest Rate		Initial Term Maturity
Repurchase Facility	Committed Financing		Amount Outstanding		Interest Expense ⁽¹⁾		Ending Weighted Average Interest Rate		Initial Term Maturity
JPM Repo Facility ⁽²⁾	$	300,000	$	257,664	6,016		3.08	%	6/18/2016
GS Repo Facility ⁽³⁾	250,000		—		—		N/A		12/27/2018
Barclays Repo Facility ⁽⁴⁾	—		—		6,063		N/A		10/6/2016
Total	$	550,000	$	257,664	$	12,079



Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager⁽¹⁾	$	—	$	—	$	7,442	$	480	$	480



	��			Fair Value
Contract type		Notional		Assets⁽¹⁾		Liabilities⁽¹⁾		Net
Credit default swaps		$	30,000	$	32	$	357	$	(325	)
Treasury note futures		43,906		100		—		100
Total		$	73,906	$	132	$	357	$	(225	)

(1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets.



	Year Ended December 31, 2017
Contract type	Unrealized (Gain)/Loss			Realized (Gain)/Loss			Total
Credit default swaps	$	117		$	373		$	490
Treasury note futures	(100		)	(928		)	(1,028		)
Total	$	17		$	(555	)	$	(538	)