v3.22.4
COVER PAGE - USD ($)
 12 Months Ended
Dec. 31, 2022
Feb. 14, 2023
Jun. 30, 2022
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2022    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-35517    
Entity Registrant Name ARES COMMERCIAL REAL ESTATE CORPORATION    
Entity Incorporation, State or Country Code MD    
Entity Tax Identification Number 45-3148087    
Entity Address, Address Line One 245 Park Avenue    
Entity Address, Address Line Two 42nd Floor    
Entity Address, City or Town New York    
Entity Address, State or Province NY    
Entity Address, Postal Zip Code 10167    
City Area Code 212    
Local Phone Number 750-7300    
Title of 12(b) Security Common Stock, $0.01 par value per share    
Trading Symbol ACRE    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 624,555,623
Entity Common Stock, Shares Outstanding   54,606,826  
Documents Incorporated by Reference Portions of the registrant’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K are incorporated by reference into Part III of this Form 10-K.    
Entity Central Index Key 0001529377    
Amendment Flag false    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
v3.22.4
Audit Information
 12 Months Ended
Dec. 31, 2022
Audit Information [Abstract]  
Auditor Firm ID 42
Auditor Name Ernst & Young LLP
Auditor Location Los Angeles, California
v3.22.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
ASSETS    
Cash and cash equivalents $ 141,278 $ 50,615
Loans held for investment ($887,662 and $974,424 related to consolidated VIEs, respectively) 2,264,008 2,414,383
Current expected credit loss reserve (65,969) (23,939)
Loans held for investment, net of current expected credit loss reserve 2,198,039 2,390,444
Real estate owned held for sale, net 0 36,602
Investment in available-for-sale debt securities, at fair value 27,936 0
Other assets ($2,980 and $2,592 of interest receivable related to consolidated VIEs, respectively; $129,495 and $128,589 of other receivables related to consolidated VIEs, respectively) 155,749 154,177
Total assets 2,523,002 2,631,838
LIABILITIES    
Secured funding agreements 705,231 840,047
Notes payable 104,460 50,358
Secured term loan 149,200 149,016
Collateralized loan obligation securitization debt (consolidated VIEs) 777,675 861,188
Secured borrowings 0 22,589
Due to affiliate 5,580 4,156
Dividends payable 19,347 16,674
Other liabilities ($1,913 and $570 of interest payable related to consolidated VIEs, respectively) 13,969 9,182
Total liabilities 1,775,462 1,953,210
Commitments and contingencies (Note 9)
STOCKHOLDERS' EQUITY    
Common stock, par value $0.01 per share, 450,000,000 shares authorized at December 31, 2022 and 2021 and 54,443,983 and 47,144,058 shares issued and outstanding at December 31, 2022 and 2021, respectively 537 465
Additional paid-in capital 812,788 703,950
Accumulated other comprehensive income 7,541 2,844
Accumulated earnings (deficit) (73,326) (28,631)
Total stockholders' equity 747,540 678,628
Total liabilities and stockholders' equity $ 2,523,002 $ 2,631,838
v3.22.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Loans held for investment $ 2,264,008 $ 2,414,383
Other assets 155,749 154,177
Other liabilities $ 13,969 $ 9,182
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 450,000,000 450,000,000
Common stock shares issued (in shares) 54,443,983 47,144,058
Common stock, shares outstanding (in shares) 54,443,983 47,144,058
Variable Interest Entity, Primary Beneficiary    
Loans held for investment $ 887,662,000 $ 974,424,000
Interest receivable 2,980,000 2,592,000
Other assets 129,495,000 128,589,000
Other liabilities $ 1,913,000 $ 570,000
v3.22.4
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenue:      
Interest income $ 170,171 $ 133,631 $ 121,052
Interest expense (65,994) (50,080) (51,949)
Net interest margin 104,177 83,551 69,103
Revenue from real estate owned 2,672 18,518 13,593
Total revenue 106,849 102,069 82,696
Expenses:      
Management and incentive fees to affiliate 14,898 12,136 8,159
Professional fees 3,350 2,436 2,640
General and administrative expenses 6,394 4,741 3,732
General and administrative expenses reimbursed to affiliate 3,777 3,016 3,653
Expenses from real estate owned 4,309 18,548 18,127
Total expenses 32,728 40,877 36,311
Provision for current expected credit losses 46,061 10 20,185
Realized losses on loans sold 0 0 4,008
Gain on sale of real estate owned 2,197 0 0
Income before income taxes 30,257 61,182 22,192
Income tax expense, including excise tax 472 722 352
Net income attributable to common stockholders $ 29,785 $ 60,460 $ 21,840
Earnings per common share:      
Basic earnings per common share (in dollars per share) $ 0.58 $ 1.43 $ 0.66
Diluted earnings per common share (in dollars per share) $ 0.57 $ 1.42 $ 0.66
Weighted average number of common shares outstanding:      
Basic weighted average shares of common stock outstanding (in shares) 51,679,744 42,399,613 32,977,462
Diluted weighted average shares of common stock outstanding (in shares) 52,126,256 42,681,505 33,196,508
v3.22.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
Net income attributable to common stockholders $ 29,785 $ 60,460 $ 21,840
Other comprehensive income:      
Realized and unrealized gains (losses) on derivative financial instruments 4,642 2,844 0
Unrealized gains (losses) on available-for-sale debt securities 55 0 0
Comprehensive income $ 34,482 $ 63,304 $ 21,840
v3.22.4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Impact of adoption of CECL
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income
Accumulated Earnings (Deficit)
Accumulated Earnings (Deficit)
Impact of adoption of CECL
Beginning balance (in shares) at Dec. 31, 2019     28,865,610,000        
Beginning balance at Dec. 31, 2019 $ 426,339 $ (5,051) $ 283 $ 423,619 $ 0 $ 2,437 $ (5,051)
Increase (Decrease) in Stockholders' Equity              
Sale of common stock (in shares)     4,600,000,000        
Sale of common stock 73,232   $ 46 73,186      
Offering costs (341)     (341)      
Stock-based compensation (in shares)     (23,278,000)        
Stock‑based compensation 1,339     1,339      
Net income 21,840         21,840  
Dividends declared (44,343)         (44,343)  
Ending balance (in shares) at Dec. 31, 2020     33,442,332,000        
Ending balance at Dec. 31, 2020 473,015   $ 329 497,803 0 (25,117)  
Increase (Decrease) in Stockholders' Equity              
Sale of common stock (in shares)     13,637,237,000        
Sale of common stock 204,779   $ 136 204,643      
Offering costs (436)     (436)      
Stock-based compensation (in shares)     64,489,000        
Stock‑based compensation 1,940     1,940      
Other comprehensive income 2,844       2,844    
Net income 60,460         60,460  
Dividends declared $ (63,974)         (63,974)  
Ending balance (in shares) at Dec. 31, 2021 47,144,058   47,144,058,000        
Ending balance at Dec. 31, 2021 $ 678,628   $ 465 703,950 2,844 (28,631)  
Increase (Decrease) in Stockholders' Equity              
Sale of common stock (in shares)     7,190,369,000        
Sale of common stock 106,267   $ 72 106,195      
Offering costs (233)     (233)      
Stock-based compensation (in shares)     109,556,000        
Stock‑based compensation 2,876     2,876      
Other comprehensive income 4,697       4,697    
Net income 29,785         29,785  
Dividends declared $ (74,480)         (74,480)  
Ending balance (in shares) at Dec. 31, 2022 54,443,983   54,443,983,000        
Ending balance at Dec. 31, 2022 $ 747,540   $ 537 $ 812,788 $ 7,541 $ (73,326)  
v3.22.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Operating activities:      
Net income $ 29,785 $ 60,460 $ 21,840
Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
Amortization of deferred financing costs 7,096 9,895 6,434
Accretion of discounts, deferred loan origination fees and costs (10,347) (8,433) (7,430)
Stock-based compensation 2,876 1,940 1,339
Depreciation of real estate owned 0 825 892
Provision for current expected credit losses 46,061 10 20,185
Realized losses on loans sold 0 0 4,008
Amortization of derivative financial instruments (1,029) 0 0
Gain on sale of real estate owned (2,197) 0 0
Changes in operating assets and liabilities:      
Other assets (17,674) (18,545) (15,344)
Due to affiliate 1,424 1,006 389
Other liabilities 1,162 1,192 (551)
Net cash provided by (used in) operating activities 57,157 48,350 31,762
Investing activities:      
Issuance of and fundings on loans held for investment (652,720) (1,241,996) (524,166)
Principal repayment of loans held for investment 824,940 534,973 341,450
Proceeds from sale of loans held for sale 0 0 96,597
Receipt of origination fees 8,513 7,632 4,526
Purchases of capitalized additions to real estate owned 0 (144) (274)
Proceeds from sale of real estate owned 38,227 0 0
Purchases of available-for-sale debt securities (27,872) 0 0
Amounts received (paid) under derivative financial instruments 2,085 (150) 0
Net cash provided by (used in) investing activities 193,173 (699,685) (81,867)
Financing activities:      
Proceeds from notes payable 105,000 15,869 6,967
Repayments of notes payable (51,110) (27,880) 0
Payment of secured funding costs (4,467) (13,066) (5,065)
Proceeds from issuance of debt of consolidated VIEs 0 540,471 0
Repayments of debt of consolidated VIEs (85,856) (121,246) 0
Dividends paid (71,807) (58,424) (42,765)
Proceeds from sale of common stock 106,267 204,779 73,232
Payment of offering costs (163) (324) (301)
Net cash provided by (used in) financing activities (159,667) 627,174 119,246
Change in cash and cash equivalents 90,663 (24,161) 69,141
Cash and cash equivalents, beginning of period 50,615 74,776 5,635
Cash and cash equivalents, end of period 141,278 50,615 74,776
Supplemental Information:      
Interest paid during the period 57,819 40,126 46,137
Income taxes paid during the period 250 1,406 399
Supplemental disclosure of noncash investing and financing activities:      
Dividends declared, but not yet paid 19,347 16,674 11,124
Other receivables related to consolidated VIEs 129,495 128,589 6,410
Secured funding agreements      
Financing activities:      
Proceeds from secured funding agreements 267,192 970,036 473,493
Repayments of secured funding agreements (402,008) (885,541) (446,530)
Secured term loan      
Financing activities:      
Proceeds from secured funding agreements 0 90,000 0
Repayments of secured funding agreements 0 (50,000) 0
Secured bowowings      
Financing activities:      
Proceeds from secured funding agreements 0 0 60,215
Repayments of secured funding agreements $ (22,715) $ (37,500) $ 0
v3.22.4
ORGANIZATION
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION ORGANIZATION
Ares Commercial Real Estate Corporation (together with its consolidated subsidiaries, the “Company” or “ACRE”) is a specialty finance company primarily engaged in originating and investing in commercial real estate loans and related investments. Through Ares Commercial Real Estate Management LLC (“ACREM” or the Company’s “Manager”), a Securities and Exchange Commission (“SEC”) registered investment adviser and a subsidiary of Ares Management Corporation (NYSE: ARES) (“Ares Management” or “Ares”), a publicly traded, leading global alternative investment manager, it has investment professionals strategically located across the United States and Europe who directly source new loan opportunities for the Company with owners, operators and sponsors of commercial real estate (“CRE”) properties. The Company was formed and commenced operations in late 2011. The Company is a Maryland corporation and completed its initial public offering (the “IPO”) in May 2012. The Company is externally managed by its Manager, pursuant to the terms of a management agreement (the “Management Agreement”).
 
The Company operates as one operating segment and is primarily focused on directly originating and managing a diversified portfolio of CRE debt-related investments for the Company’s own account. The Company’s target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investments, including commercial mortgage backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, self storage, student housing, residential, and other commercial real estate properties, or by ownership interests therein.

    The Company has elected and qualified to be taxed as a real estate investment trust (“REIT”) for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year     ended December 31, 2012. The Company generally will not be subject to United States federal income taxes on its REIT taxable income as long as it annually distributes all of its REIT taxable income prior to the deduction for dividends paid to stockholders and complies with various other requirements as a REIT.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, labor shortages and challenges in the supply chain, have the potential to negatively impact the Company and its borrowers. These current macroeconomic conditions may continue or aggravate and could cause the United States economy or other global economies to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States or other major global economy.

The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2022, however, uncertainty over the global economy and the Company’s business, makes any estimates and assumptions as of December 31, 2022 inherently less certain than they would be absent the current and potential impacts of current macroeconomic conditions. Actual results could differ from those estimates.
Variable Interest Entities

The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE.
 
To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE.

To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company.

For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements.

The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. See Note 16 included in these consolidated financial statements for further discussion of the Company’s VIEs.

Cash and Cash Equivalents

Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short‑term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and statements of cash flows.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, loans held for investment, available-for-sale debt securities and interest receivable. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the Federal Deposit Insurance Corporation insured limit. The Company has exposure to credit risk on its loans held for investment and available-for-sale debt securities. The Company and the Company’s Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non‑recourse financing, when and where available and appropriate.
Loans Held for Investment

    The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs (the “carrying value”). Loans are generally collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its loans held for investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors.

    Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

    Loan balances that are deemed to be uncollectible are written off as a realized loss and are deducted from the current expected credit loss reserve. The write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment.

Current Expected Credit Losses

Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requires the Company to reflect current expected credit losses (“CECL”) on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broad range of historical experience adjusted for current conditions and reasonable and supportable forecast information to inform credit loss estimates (the “CECL Reserve”). ASU No. 2016-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. ASU No. 2016-13 was adopted by the Company on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of January 1, 2020. Subsequent period increases and decreases to expected credit losses impact earnings and are recorded within provision for current expected credit losses in the Company’s consolidated statements of operations. The CECL Reserve related to outstanding balances on loans held for investment required under ASU No. 2016-13 is a valuation account that is deducted from the amortized cost basis of the Company’s loans held for investment in the Company’s consolidated balance sheets. The CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets. See Note 4 included in these consolidated financial statements for CECL related disclosures.

Real Estate Owned

    Real estate 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 land, building, furniture, fixtures and equipment.

    Real estate 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 asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred.

    Real estate assets are evaluated for indicators of impairment on a quarterly basis. Factors that the Company may consider in its impairment analysis include, among others: (1) significant underperformance relative to historical or anticipated operating results; (2) significant negative industry or economic trends; (3) costs necessary to extend the life or improve the real
estate asset; (4) significant increase in competition; and (5) ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows expected to be generated by the real estate asset over the estimated remaining holding period is less than the carrying amount of such real estate asset. Cash flows include operating cash flows and anticipated capital proceeds generated by the real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon the Company’s estimate of a capitalization rate and discount rate.

    The Company reviews its real estate assets, from time to time, in order to determine whether to sell such assets. Real estate assets are classified as held for sale when the Company commits to a plan to sell the asset, when the asset is being actively marketed for sale at a reasonable price and the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year. Real estate assets that are held for sale are carried at the lower of the asset’s carrying amount or its fair value less costs to sell.

Available-for-Sale Debt Securities

The Company acquires debt securities that are collateralized by mortgages on CRE properties primarily for short-term cash management and investment purposes. On the acquisition date, the Company designates investments in CRE debt securities as available-for-sale. Investments in CRE debt securities that are classified as available-for-sale are carried at fair value. Unrealized holding gains and losses for available-for-sale debt securities are recorded each period in other comprehensive income (“OCI”). The Company uses a specific identification method when determining the cost of a debt security sold and the amount of unrealized gain or loss reclassified from accumulated other comprehensive income (loss) into earnings.

Available-for-sale debt securities that are in an unrealized loss position are evaluated on a quarterly basis to determine whether declines in the fair value below the amortized cost basis qualify as other than temporary impairment (“OTTI”). The OTTI assessment is performed at the individual security level. In assessing whether the entire amortized cost basis of each security will be recovered, the Company will compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, the entire amortized cost basis of the security will not be recovered and an OTTI shall be considered to have occurred.

Available-for-sale debt securities are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the debt security is placed on non-accrual status. Interest payments received on non-accrual securities may be recognized as income or applied to principal depending upon management’s judgment regarding collectability of the debt security. Non-accrual debt securities are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current.

Debt Issuance Costs

Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense, except as noted below, in the Company’s consolidated statements of operations while the unamortized balance on the (i) Secured Funding Agreements (each individually defined in Note 6 included in these consolidated financial statements) is included within other assets and (ii) Notes Payable, the Secured Term Loan (each defined in Note 6 included in these consolidated financial statements) and secured borrowings (described in Note 7 included in these consolidated financial statements) and debt securitizations are each included as a reduction to the carrying amount of the liability in the Company’s consolidated balance sheets. Amortization of debt issuance costs for the note payable on the hotel property that was recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable) is included within expenses from real estate owned in the Company’s consolidated statements of operations.
Derivative Financial Instruments

Derivative financial instruments are classified as either other assets (gain positions) or other liabilities (loss positions) in the Company’s consolidated balance sheets at fair value. These amounts may be offset to the extent that there is a legal right to offset and if elected by management.

On the date the Company enters into a derivative contract, the Company designates each contract as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, or as a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, the Company formally documents the hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and an evaluation of the effectiveness of its hedged transaction.

The Company performs a formal assessment on a quarterly basis on whether the derivative designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. Changes in the fair value of derivative contracts are recorded each period in either current earnings or OCI, depending on whether the derivative is designated as part of a hedge transaction and, if so, the type of hedge transaction. For derivatives that are designated as cash flow hedges, the effective portion of the unrealized gains or losses on these contracts is recorded in OCI. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in current earnings prospectively. The Company does not enter into derivatives for trading or speculative purposes.

Revenue Recognition

    Interest income is accrued based on the outstanding principal amount and the contractual terms of each loan or debt security. For loans held for investment, the origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income over the initial loan term as a yield adjustment using the effective interest method. For available-for-sale debt securities, premiums or discounts are amortized or accreted into interest income as a yield adjustment using the effective interest method.

    Revenue from real estate owned represents revenue associated with the operations of a hotel property classified as real estate owned that was sold in March 2022. Revenue from the operation of the hotel property was recognized when guestrooms were occupied, services had been rendered or fees had been earned. Revenues were recorded net of any discounts and sales and other taxes collected from customers. Revenues consisted of room sales, food and beverage sales and other hotel revenues.

Net Interest Margin and Interest Expense
    Net interest margin in the Company’s consolidated statements of operations serves to measure the performance of the Company’s loans and debt securities as compared to its use of debt leverage. The Company includes interest income from its loans and debt securities and interest expense related to its Secured Funding Agreements, Notes Payable, securitization debt, the Secured Term Loan (each individually defined in Note 6 included in these consolidated financial statements) and secured borrowings (described in Note 7 included in these consolidated financial statements) in net interest margin. For the years ended December 31, 2022, 2021 and 2020, interest expense is comprised of the following ($ in thousands):
For the years ended December 31,
 202220212020
Secured funding agreements $33,602 $16,403 $28,003 
Notes payable (1)3,410 2,275 1,317 
Securitization debt29,341 20,104 12,384 
Secured term loan7,028 4,353 7,114 
Secured borrowings845 6,145 3,131 
Other (2)(8,232)800 — 
Interest expense$65,994 $50,080 $51,949 
____________________________
(1)    Excludes interest expense on the $28.3 million note payable, which was secured by a hotel property that was recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable). Interest expense on the $28.3 million note payable is included within expenses from real estate owned in the Company’s consolidated statements of operations.
(2)    Represents the net interest expense recognized from the Company’s derivative financial instruments upon periodic settlement.
Income Taxes

The Company has elected and qualified for taxation as a REIT commencing with its taxable year ended December 31, 2012. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally pay United States federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes annually to its stockholders at least 90% of the Company’s REIT taxable income prior to the deduction for dividends paid. To the extent that the Company distributes less than 100% of its REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), the Company will pay tax at regular corporate rates on that undistributed portion. Furthermore, if the Company distributes less than the sum of 1) 85% of its ordinary income for the calendar year, 2) 95% of its capital gain net income for the calendar year, and 3) any undistributed shortfall from its prior calendar year (the “Required Distribution”) to its stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then it is required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if the Company elects to retain any of its net capital gain for any tax year, it must notify its stockholders and pay tax at regular corporate rates on the retained net capital gain. The stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that the Company’s estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, the Company accrues excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K.

The Company formed a wholly-owned subsidiary, ACRC Lender W TRS LLC (“ACRC W TRS”), in December 2013 in order to issue and hold certain loans intended for sale. The Company also formed a wholly-owned subsidiary, ACRC 2017-FL3 TRS LLC (“FL3 TRS”), in March 2017 in order to hold a portion of the CLO Securitizations (as defined below), including the portion that generates excess inclusion income. Additionally, the Company also formed a wholly-owned subsidiary, ACRC WM Tenant LLC (“ACRC WM”), in March 2019 in order to lease the hotel property classified as real estate owned, which was acquired on March 8, 2019. Entity classification elections to be taxed as a corporation and taxable REIT subsidiary (“TRS”) elections were made with respect to ACRC W TRS, FL3 TRS and ACRC WM. A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. For financial reporting purposes, a provision for current and deferred taxes has been established for the portion of the Company’s GAAP consolidated earnings recognized by ACRC W TRS, FL3 TRS and ACRC WM. The income tax provision is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K.

FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of December 31, 2022 and 2021, based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. ACRC W TRS, FL3 TRS and ACRC WM recognize interest and penalties, if any, related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets.
Comprehensive Income

Comprehensive income consists of net income and OCI that are excluded from net income.

Stock-Based Compensation

The Company recognizes the cost of stock‑based compensation, which is included within general and administrative expenses in the Company’s consolidated statements of operations. The fair value of the time vested restricted stock or restricted stock units (“RSUs”) granted is recorded to expense on a straight‑line basis over the vesting period for the award, with an offsetting increase in stockholders’ equity. For grants to directors and officers and employees of the Manager, the fair value is determined based upon the market price of the stock on the grant date.

Earnings per Share

The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common stockholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP. Diluted earnings (loss) per share takes into effect any dilutive instruments, such as restricted stock, RSUs and convertible debt, except when doing so would be anti‑dilutive. See Note 11 included in these consolidated financial statements for the earnings per share calculations.

Recent Accounting Pronouncements

    In March 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 optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. ASU No. 2020-04 and ASU No. 2021-01 are effective for all entities and may be adopted retrospectively as of any date from the beginning of any interim period that includes or is subsequent to March 12, 2020. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848) to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company elected to adopt the new guidance and, for the modifications that have occurred to date, the adoption of the guidance has not had a material impact on the Company’s consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance on troubled debt restructurings (“TDRs”) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under Topic 326 and adds enhanced disclosures for creditors with respect to loan refinancing and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 supersedes the accounting guidance for TDRs for creditors in its entirety and requires entities to evaluate all receivable modifications to determine whether a modification made to a borrower results in a new loan or a continuation of the existing loan. The Company elected to adopt the ASU for modifications occurring prospectively beginning in the first quarter of 2022.
v3.22.4
LOANS HELD FOR INVESTMENT
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
LOANS HELD FOR INVESTMENT LOANS HELD FOR INVESTMENTAs of December 31, 2022, the Company’s portfolio included 60 loans held for investment, excluding 150 loans that were repaid, sold or converted to real estate owned since inception. The aggregate originated commitment under these loans at closing was approximately $2.6 billion and outstanding principal was $2.3 billion as of December 31, 2022. During the year ended December 31, 2022, the Company funded approximately $676.9 million of outstanding principal and received repayments of $823.2 million of outstanding principal as described in more detail in the tables below. As of December 31, 2022, 90.2% of the Company’s loans have LIBOR or Secured Overnight Financing Rate (“SOFR”) floors, with a weighted average floor of 0.95%, calculated based on loans with LIBOR or SOFR floors. References to LIBOR or “L” are to 30-day LIBOR and references to SOFR or “S” are to 30-day SOFR (unless otherwise specifically stated).
 
The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of December 31, 2022 and 2021 ($ in thousands):

 As of December 31, 2022
Carrying Amount (1)Outstanding Principal (1)Weighted Average Unleveraged Effective YieldWeighted Average Remaining Life (Years)
Senior mortgage loans $2,225,725 $2,243,818 8.4 %(2)8.8 %(3)1.3
Subordinated debt and preferred equity investments38,283 39,003 14.0 %(2)14.0 %(3)2.8
Total loans held for investment portfolio $2,264,008 $2,282,821 8.5 %(2)8.9 %(3)1.4

 As of December 31, 2021
Carrying Amount (1)Outstanding Principal (1)Weighted Average Unleveraged Effective YieldWeighted Average Remaining Life (Years)
Senior mortgage loans $2,397,655 $2,411,718 5.3 %(2)5.4 %(3)1.5
Subordinated debt and preferred equity investments16,728 17,394 13.7 %(2)13.7 %(3)4.0
Total loans held for investment portfolio$2,414,383 $2,429,112 5.4 %(2)5.5 %(3)1.6
______________________________

(1)The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs.
(2)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2022 and 2021 as weighted by the outstanding principal balance of each loan.
(3)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all interest accruing loans held by the Company as of December 31, 2022 and 2021 as weighted by the total outstanding principal balance of each interest accruing loan (excludes loans on non-accrual status as of December 31, 2022 and 2021).
A more detailed listing of the Company’s loans held for investment portfolio based on information available as of December 31, 2022 is as follows ($ in millions, except percentages):
Loan TypeLocationOutstanding Principal (1)Carrying Amount (1)Interest RateUnleveraged Effective Yield (2)Maturity Date (3)Payment Terms (4)
Senior Mortgage Loans:
OfficeIL$151.5$151.4L+3.60%8.3%Mar 2023I/O
MultifamilyNY130.6129.3S+3.90%8.7%Jun 2025I/O
OfficeDiversified118.0117.7S+3.75%8.5%Jan 2024(5)I/O
MultifamilyTX100.099.2S+3.50%8.2%Jul 2025I/O
IndustrialIL98.297.8L+4.55%9.4%May 2024I/O
Mixed-useFL84.084.0L+4.25%8.6%Feb 2023I/O
OfficeAZ77.476.8L+3.50%8.3%Oct 2024I/O
Mixed-useNY75.074.6L+3.65%8.4%Jul 2024I/O
Residential CondominiumFL72.572.3L+5.25%10.2%Jul 2023I/O
Residential CondominiumNY72.271.7S+8.95%15.3%Oct 2023(6)I/O
OfficeNC69.169.0L+4.25%9.0%Mar 2023(7)P/I(8)
OfficeNY68.267.6L+3.85%8.6%Aug 2025I/O
MultifamilyTX67.967.4L+2.85%7.6%Dec 2024I/O
Multifamily/OfficeSC67.066.8L+2.90%7.6%Nov 2024I/O
OfficeNC66.566.0S+3.65%8.5%Aug 2024I/O
OfficeIL56.955.0S+3.95%—%Jun 2023(9)I/O
OfficeIL56.055.5S+4.25%9.1%Jan 2025I/O
OfficeGA48.748.6S+3.15%7.8%Dec 2023(10)I/O
HotelCA40.040.0L+4.12%9.0%Jan 2023I/O
HotelCA39.539.1S+4.20%9.0%Mar 2025I/O
Mixed-useCA37.937.9L+4.10%9.1%Mar 2023I/O
Mixed-useTX35.335.2S+3.85%(11)8.5%Sep 2024(11)I/O
HotelIL35.029.8S+4.00%—%(12)May 2024(12)I/O
Student HousingCA34.534.5S+3.95%8.3%Jul 2023(13)I/O
HotelNY34.033.5S+4.40%9.2%Mar 2026I/O
OfficeCA33.233.1L+3.35%8.5%Mar 2023(14)I/O
MultifamilyCA31.731.5L+2.90%7.6%Dec 2025I/O
OfficeIL30.230.2L+3.80%8.8%Jan 2023I/O
MultifamilyPA29.329.3S+4.00%(15)8.6%Dec 2023(15)I/O
IndustrialFL25.525.4L+2.90%7.6%Dec 2025I/O
IndustrialCO24.524.5(16)12.2%Feb 2023I/O
OfficeMA23.723.0S+3.75%9.6%Apr 2025I/O
IndustrialNJ23.323.1L+3.75%8.9%May 2024I/O
MultifamilyWA23.123.0L+2.90%7.5%Nov 2025I/O
OfficeCA22.822.8S+3.50%8.1%Nov 2023I/O
MultifamilyTX22.222.1L+2.50%7.3%Oct 2024I/O
IndustrialCA19.619.6L+3.75%8.7%Mar 2023I/O
Student HousingAL19.519.4L+3.85%8.6%May 2024I/O
MultifamilyWA18.818.7L+3.00%7.8%Mar 2023I/O
Self StoragePA17.917.7L+2.90%7.6%Dec 2025I/O
Self StorageNJ17.617.3S+2.90%8.0%Apr 2025I/O
ResidentialCA14.314.313.00%—%(17)May 2021(17)I/O
Self StorageWA11.511.3S+2.90%8.0%Mar 2025I/O
IndustrialTX10.410.3L+5.25%10.0%Dec 2024I/O
IndustrialFL9.59.4L+4.75%10.7%Nov 2024I/O
Self StorageMA8.58.5L+2.90%7.5%Dec 2024I/O
IndustrialPA8.08.0L+5.50%10.3%Sep 2024I/O
Self StorageTX8.08.0L+2.90%7.5%Aug 2024I/O
Self StorageMA7.77.7L+2.90%7.5%Nov 2024I/O
IndustrialPA7.06.9L+5.90%10.7%Nov 2024I/O
IndustrialTN6.76.6L+5.50%10.3%Nov 2024I/O
Self StorageMA6.56.5L+2.90%7.5%Oct 2024I/O
Self StorageMO6.56.5L+3.00%7.5%Dec 2023I/O
Self StorageNJ5.95.9L+2.90%7.7%Jul 2024I/O
Self StorageIL5.65.6L+3.00%7.7%Dec 2023I/O
IndustrialFL4.74.6S+5.75%10.5%Mar 2025I/O
Self StorageTX2.92.9L+2.90%7.4%Sep 2024I/O
IndustrialGA1.31.3L+5.25%10.0%Sep 2024I/O
Subordinated Debt and Preferred
Equity Investments:
MultifamilySC20.620.4S+9.53%14.3%Sep 2025I/O
OfficeNJ18.417.912.00%13.6%Jan 2026I/O
Total/Weighted Average $2,282.8$2,264.08.5%
_________________________

(1)The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 14 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Amount and Outstanding Principal held by the Company is reflected.
(2)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR or SOFR as of December 31, 2022 or the LIBOR or SOFR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2022 as weighted by the outstanding principal balance of each loan.
(3)Certain loans are subject to contractual extension options that generally vary between one and two 12-month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.
(4)I/O = interest only, P/I = principal and interest.
(5)In December 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior diversified loan to January 2024.
(6)This senior mortgage loan refinanced the previously existing $53.3 million senior mortgage loan that was held by the Company. The senior New York loan is currently in default due to the failure of the borrower to reach certain construction milestones.
(7)In March 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior North Carolina loan to March 2023.
(8)In April 2022, amortization began on the senior North Carolina loan, which had an outstanding principal balance of $69.1 million as of December 31, 2022. The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms.
(9)Loan was on non-accrual status as of December 31, 2022 and the Unleveraged Effective Yield is not applicable. In May 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 3.95% to S + 3.95% and extend the maturity date on the senior Illinois loan from June 2022 to June 2023. For the year ended December 31, 2022, the Company received $3.5 million of interest payments in cash on the senior Illinois loan that was recognized either as interest income or as a reduction to the carrying value of the loan and the borrower is current on all contractual interest payments.
(10)In October 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Georgia loan to December 2023.
(11)In September 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 3.75% to S + 3.85% and extend the maturity date on the senior Texas loan from September 2022 to September 2024.
(12)Loan was on non-accrual status as of December 31, 2022 and the Unleveraged Effective Yield is not applicable. In March 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 4.40% to S + 4.00% and extend the maturity date on the senior Illinois loan from May 2022 to May 2024. For the year ended December 31, 2022, the Company received $1.8 million of interest payments in cash on the senior Illinois loan that was recognized either as interest income or as a reduction to the carrying value of the loan and the borrower is current on all contractual interest payments. However, the senior Illinois loan is currently in default due to the failure of the borrower to make certain contractual reserve deposits by the May 2022 due date.
(13)In May 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior California loan to July 2023.
(14)In November 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan from November 2022 to March 2023.
(15)In December 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 3.00% to S + 4.00% and extend the maturity date on the senior Pennsylvania loan from December 2022 to December 2023.
(16)At origination, the Colorado loan was structured as a senior loan and in January 2022, the Company also originated the mezzanine loan. The senior loan, which had an outstanding principal balance of $20.8 million as of December 31, 2022, accrues interest at a per annum rate of L + 6.75% and the mezzanine loan, which had an outstanding principal balance of $3.8 million as of December 31, 2022, accrues interest at a per annum rate of S + 8.50%.
(17)Loan was on non-accrual status as of December 31, 2022 and the Unleveraged Effective Yield is not applicable. As of December 31, 2022, the senior California loan, which is collateralized by a residential property, is in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the May 2021 maturity date. As of December 31, 2022, the Company has elected to assign a specific CECL reserve on the senior California loan. See Note 4 included in these consolidated financial statements for more information. See Note 17 included in these consolidated financial statements for a subsequent event related to the senior California loan.

The Company has made, and may continue to make, modifications to loans, including loans that are in default. Loan terms that may be modified include interest rates, required prepayments, asset release prices, maturity dates, covenants, principal amounts and other loan terms. The terms and conditions of each modification vary based on individual circumstances and will be determined on a case by case basis. The Company’s Manager monitors and evaluates each of the Company’s loans held for investment and is maintaining regular communications with borrowers and sponsors regarding the potential impacts of current macroeconomic conditions on the Company’s loans.

For the years ended December 31, 2022 and 2021, the activity in the Company’s loan portfolio was as follows ($ in thousands):
Balance at December 31, 2020$1,815,219 
Initial funding1,166,100 
Origination fees and discounts, net of costs(12,192)
Additional funding93,973 
Amortizing payments(2,586)
Loan payoffs(654,564)
Origination fee and discount accretion8,433 
Balance at December 31, 2021$2,414,383 
Initial funding578,652 
Origination fees and discounts, net of costs(9,577)
Additional funding 96,057 
Amortizing payments(4,333)
Loan payoffs(821,513)
Origination fee and discount accretion 10,339 
Balance at December 31, 2022$2,264,008 
Except as described in the table above listing the Company’s loans held for investment portfolio, as of December 31, 2022, all loans held for investment were paying in accordance with their contractual terms. As of December 31, 2022, the Company had three loans held for investment on non-accrual status with a carrying value of $99.1 million. As of December 31, 2021, the Company had two loans held for investment on non-accrual status with a carrying value of $45.0 million.
v3.22.4
CURRENT EXPECTED CREDIT LOSSES
 12 Months Ended
Dec. 31, 2022
Credit Loss [Abstract]  
CURRENT EXPECTED CREDIT LOSSES CURRENT EXPECTED CREDIT LOSSES     The Company estimates its CECL Reserve primarily using a probability-weighted model that considers the likelihood of default and expected loss given default for each individual loan. Calculation of the CECL Reserve requires loan specific data, which includes capital senior to the Company when the Company is the subordinate lender, changes in net operating income, debt service coverage ratio, loan-to-value, occupancy, property type and geographic location. Estimating the CECL Reserve also requires significant judgment with respect to various factors, including (i) the appropriate historical loan loss reference data, (ii) the expected timing of loan repayments, (iii) calibration of the likelihood of default to reflect the risk characteristics of the Company’s floating rate loan portfolio and (iv) the Company’s current and future view of the macroeconomic environment. The Company may consider loan-specific qualitative factors on certain loans to estimate its CECL Reserve. In order to estimate the future expected loan losses relevant to the Company’s portfolio, the Company utilizes historical market loan loss data licensed from a third party data service. The third party’s loan database includes historical loss data for commercial mortgage-
backed securities, or CMBS, issued dating back to 1998, which the Company believes is a reasonably comparable and available data set to its type of loans. The Company utilized macroeconomic data that reflects a current recession given current macroeconomic conditions; however, the financial impact on the Company of current circumstances is highly uncertain. For periods beyond the reasonable and supportable forecast period, the Company reverts back to historical loss data. Management's current estimate of expected credit losses as of December 31, 2022 increased compared to the current estimate of expected credit losses as of December 31, 2021 primarily due to changes to the loan portfolio, including new loan production, and the impact of the current macroeconomic environment on certain assets, including rising inflation, and rapidly rising interest rates, partially offset by shorter average remaining loan term and loan repayments during the year ended December 31, 2022. The CECL Reserve takes into consideration the assumed impact of macroeconomic conditions on CRE properties and is not specific to any loan losses or impairments on the Company’s loans held for investment, unless the Company determines that a specific reserve is warranted for a select asset.
    
As of December 31, 2022, the Company’s CECL Reserve for its loans held for investment portfolio is $71.3 million or 284 basis points of the Company’s total loans held for investment commitment balance of $2.5 billion and is bifurcated between the CECL reserve (contra-asset) related to outstanding balances on loans held for investment of $66.0 million and a liability for unfunded commitments of $5.3 million. The liability was based on the unfunded portion of the loan commitment over the full contractual period over which the Company is exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur, and if funded, the expected credit loss on the funded portion.

During the year ended December 31, 2022, the senior mortgage loan on a residential property located in California with a principal balance of $14.3 million was downgraded to a risk rating of “5.” As such, as of December 31, 2022, this loan was assessed individually and the Company has elected to assign a specific CECL reserve of $5.6 million on the loan based on the Company’s estimate of proceeds available from the anticipated sale of the collateral property less the estimated cost to sell the property. This specific CECL reserve is included in the Company's total CECL reserve.    

Current Expected Credit Loss Reserve for Funded Loan Commitments    

    Activity related to the CECL Reserve for outstanding balances on the Company’s loans held for investment as of and for the years ended December 31, 2022 and 2021 was as follows ($ in thousands):
Balance at December 31, 2020 (1)
$23,604 
Provision for current expected credit losses335
Write-offs—
Recoveries—
Balance at December 31, 2021 (1)
$23,939 
Provision for current expected credit losses42,030 
Write-offs— 
Recoveries— 
Balance at December 31, 2022 (1)
$65,969 
__________________________

(1)     The CECL Reserve related to outstanding balances on loans held for investment is recorded within current expected credit loss reserve in the Company's consolidated balance sheets.

Current Expected Credit Loss Reserve for Unfunded Loan Commitments    

    Activity related to the CECL Reserve for unfunded commitments on the Company’s loans held for investment as of and for the years ended December 31, 2022 and 2021 was as follows ($ in thousands):
Balance at December 31, 2020 (1)
$1,633 
Provision for current expected credit losses(325)
Write-offs— 
Recoveries— 
Balance at December 31, 2021 (1)
$1,308 
Provision for current expected credit losses4,031 
Write-offs— 
Recoveries — 
Balance at December 31, 2022 (1)
$5,339 
__________________________

(1)     The CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets.

The Company continuously evaluates the credit quality of each loan by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors. Risk factors include property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, loan structure and exit plan, loan-to-value ratio, debt service coverage ratio, project sponsorship, and other factors deemed necessary. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:
Ratings    Definition
1Very Low Risk
2Low Risk
3Medium Risk
4High Risk/Potential for Loss: Asset performance is trailing underwritten expectations. Loan at risk of impairment without material improvement to performance
5Impaired/Loss Likely: A loan that has a significantly increased probability of default and principal loss

    The risk ratings are primarily based on historical data as well as taking into account future economic conditions.

    As of December 31, 2022, the carrying value, excluding the CECL Reserve, of the Company’s loans held for investment within each risk rating by year of origination is as follows ($ in thousands):
20222021202020192018PriorTotal
Risk rating:
1$13,536$27,684$—$—$—$—$41,220
234,706323,544——22,80234,460415,512
3442,153461,706136,456256,35929,28040,0001,365,954
471,709—189,34863,28984,80717,845426,998
5————14,324—14,324
Total$562,104$812,934$325,804$319,648$151,213$92,305$2,264,008

Accrued Interest Receivable

    The Company elected not to measure a CECL Reserve on accrued interest receivable due to the Company’s policy of writing off uncollectible accrued interest receivable balances in a timely manner. As of December 31, 2022 and 2021, interest receivable of $14.0 million and $17.1 million, respectively, is included within other assets in the Company's consolidated balance sheets and is excluded from the carrying value of loans held for investment. If the Company were to have uncollectible accrued interest receivable, it generally would reverse accrued and unpaid interest against interest income and no longer accrue for these amounts.
v3.22.4
REAL ESTATE OWNED
 12 Months Ended
Dec. 31, 2022
Real Estate Owned [Abstract]  
REAL ESTATE OWNED REAL ESTATE OWNED
On March 8, 2019, the Company acquired legal title to a hotel property located in New York through a deed in lieu of foreclosure. Prior to March 8, 2019, the hotel property collateralized a $38.6 million senior mortgage loan held by the Company that was in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the December 2018 maturity date. In conjunction with the deed in lieu of foreclosure, the Company derecognized the $38.6 million senior mortgage loan and recognized the hotel property as real estate owned. As of the date of the deed in lieu of foreclosure, the Company did not expect to complete a sale of the hotel property within the next twelve months and thus, the hotel property was considered held for use, and was carried at its estimated fair value at acquisition and was presented net of accumulated depreciation and impairment charges. The Company did not recognize any gain or loss on the derecognition of the senior mortgage loan as the fair value of the hotel property of $36.9 million and the net assets held at the hotel property of $1.7 million at acquisition approximated the $38.6 million carrying value of the senior mortgage loan. 

On November 8, 2021, the Company entered into a Purchase and Sale Agreement to sell the hotel property to a third party for $40.0 million and the sale closed on March 1, 2022. As such, as of December 31, 2021, the hotel property was classified as real estate owned held for sale in the Company’s consolidated balance sheet. For the three months ended March 31, 2022, the Company recognized a $2.2 million gain on the sale of the hotel property as the net carrying value of the hotel property as of the March 1, 2022 sale date was lower than the net sales proceeds received by the Company. The gain on the sale of the hotel property is included within gain on sale of real estate owned in the Company’s consolidated statements of operations. As of December 31, 2021, the assets and liabilities of the hotel property are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets and include items such as cash, restricted cash, trade receivables and payables and advance deposits. In connection with the sale of the hotel property, the Company provided a senior mortgage loan to the buyer of the hotel property. The initial advance funded under such loan was $30.7 million, with up to another $25.0 million of additional loan proceeds to be available for future advances to cover a portion of the anticipated property renovation plan costs, provided certain conditions are satisfied. At closing, the buyer contributed $12.9 million of equity into the purchase. Additionally, the buyer is required to fund an additional $8.7 million of equity associated with the anticipated property renovation plan costs.

The following table summarizes the Company’s real estate owned as of December 31, 2021 ($ in thousands):
Land$10,200 
Buildings and improvements24,281 
Furniture, fixtures and equipment4,506 
38,987 
Less: Accumulated depreciation (2,385)
Real estate owned, net$36,602 

For the year ended December 31, 2022, the Company did not incur depreciation expense. For the year ended December 31, 2021, the Company incurred depreciation expense of $825 thousand. Depreciation expense is included within expenses from real estate owned in the Company’s consolidated statements of operations.
v3.22.4
DEBT
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
DEBT DEBT
Financing Agreements

The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the CNB Facility, the MetLife Facility and the Morgan Stanley Facility (individually defined below and collectively, the “Secured Funding Agreements”), Notes Payable (as defined below) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements, Notes Payable and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of December 31, 2022 and 2021, the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands):
As of December 31,
20222021
Outstanding BalanceTotal
Commitment		Outstanding BalanceTotal
Commitment
Secured Funding Agreements:
Wells Fargo Facility$270,798 $450,000 (1)$399,528 $450,000 (1)
Citibank Facility236,240 325,000 192,970 325,000 
CNB Facility— 75,000 — 75,000 
MetLife Facility— 180,000 20,648 180,000 
Morgan Stanley Facility198,193 250,000 226,901 250,000 
Subtotal$705,231 $1,280,000 $840,047 $1,280,000 
Notes Payable $105,000 $105,000 $51,110 $51,755 
Secured Term Loan$150,000 $150,000 $150,000 $150,000 
   Total$960,231 $1,535,000 $1,041,157 $1,481,755 
______________________________

(1)The maximum commitment for the Wells Fargo Facility (as defined below) may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee.

Some of the Company’s Financing Agreements are collateralized by (i) assignments of specific loans, preferred equity or a pool of loans held for investment or loans held for sale owned by the Company, (ii) interests in the subordinated portion of the Company’s securitization debt, or (iii) interests in wholly-owned entity subsidiaries that hold the Company’s loans held for investment. The Company is the borrower or guarantor under each of the Financing Agreements. Generally, the Company partially offsets interest rate risk by matching the interest index of loans held for investment with the Secured Funding Agreements used to fund them. The Company’s Financing Agreements contain various affirmative and negative covenants, including negative pledges, and provisions regarding events of default that are normal and customary for similar financing arrangements.

Wells Fargo Facility
 
The Company is party to a master repurchase funding facility with Wells Fargo Bank, National Association (“Wells Fargo”) (the “Wells Fargo Facility”), which allows the Company to borrow up to $450.0 million. The maximum commitment may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee. Under the Wells Fargo Facility, the Company is permitted to sell, and later repurchase, certain qualifying senior commercial mortgage loans, A-Notes, pari-passu participations in commercial mortgage loans and mezzanine loans under certain circumstances, subject to available collateral approved by Wells Fargo in its sole discretion. In December 2022, the Company amended the Wells Fargo Facility to, among other things, (1) extend the funding period of the Wells Fargo Facility to December 15, 2025, (2) extend the initial maturity date of the Wells Fargo Facility to December 15, 2025, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the Wells Fargo Facility to December 14, 2027 and (3) modify the interest rate on advances under the Wells Fargo Facility from a per annum rate equal to the sum of one-month LIBOR or SOFR plus a pricing margin range of 1.50% to 2.75%, subject to certain exceptions, to a per annum rate equal to the sum of one-month LIBOR or SOFR plus a pricing margin range of 1.50% to 3.75%, subject to certain exceptions. In December 2020, the Company amended the Wells Fargo Facility to, among other things, eliminate the non-utilization fee on the Wells Fargo Facility. Prior to the amendment, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Wells Fargo Facility to the extent less than 75% of the Wells Fargo Facility was utilized. For the years ended December 31, 2022 and 2021, the Company did not incur a non-utilization fee. For the year ended December 31, 2020, the Company incurred a non-utilization fee of $19 thousand. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.

The Wells Fargo Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for
similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments in excess of the minimum amount necessary to continue to qualify as a REIT and avoid the payment of income and excise taxes, (d) maintenance of adequate capital, (e) limitations on change of control, (f) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (g) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (h) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (i) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (j) maintaining a tangible net worth of at least the sum of (1) approximately $135.5 million, plus (2) 80% of the net proceeds raised in all future equity issuances by the Company and (k) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the Wells Fargo Facility, the Company may be required to repay certain amounts under the Wells Fargo Facility. As of December 31, 2022, the Company was in compliance with all financial covenants of the Wells Fargo Facility.

Citibank Facility

The Company is party to a $325.0 million master repurchase facility with Citibank, N.A. (“Citibank”) (the “Citibank Facility”). Under the Citibank Facility, the Company is permitted to sell and later repurchase certain qualifying senior commercial mortgage loans and A-Notes approved by Citibank in its sole discretion. In January 2022, the Company amended the Citibank Facility to, among other things, extend the initial maturity date and funding availability period to January 13, 2025, subject to two 12-month extensions, each of which may be exercised at the Company’s option assuming no existing defaults under the Citibank Facility and applicable extension fees being paid, which, if both were exercised, would extend the maturity date of the Citibank Facility to January 13, 2027. Advances under the Citibank Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR or SOFR plus an indicative pricing margin range of 1.50% to 2.10%, subject to certain exceptions. Prior to the January 2022 amendment, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility to the extent less than 75% of the Citibank Facility was utilized. Subsequent to the January 2022 amendment, the Company incurs a non-utilization fee of 25 basis points per annum on the average daily positive difference between the maximum advances approved by Citibank and the actual advances outstanding on the Citibank Facility. For the years ended December 31, 2022, 2021 and 2020, the Company incurred a non-utilization fee of $11 thousand, $598 thousand and $516 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.

The Citibank Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Citibank Facility, the Company may be required to repay certain amounts under the Citibank Facility. The Citibank Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2022, the Company was in compliance with all financial covenants of the Citibank Facility. 

CNB Facility
    The Company is party to a $75.0 million secured revolving funding facility with City National Bank (the “CNB Facility”). The Company is permitted to borrow funds under the CNB Facility to finance investments and for other working capital and general corporate needs. In March 2022, the Company exercised a 12-month extension option on the CNB Facility to extend the maturity date to March 10, 2023. Since November 12, 2021, advances under the CNB Facility accrue interest at a per annum rate equal to the sum of, at the Company’s option, either (a) SOFR (with a 0.35% floor) plus 2.65% or (b) a base rate
(which is the highest of a prime rate, the federal funds rate plus 0.50%, or Daily Simple SOFR plus 1.00%) plus 1.00%; provided that in no event shall the interest rate be less than 2.65%. Prior to November 12, 2021, the interest rate on advances was a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12-month interest period plus 2.65% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50%, or one-month LIBOR plus 1.00%) plus 1.00%. Unless at least 75% of the CNB Facility is used on average, unused commitments under the CNB Facility accrue non-utilization fees at the rate of 0.375% per annum. For the years ended December 31, 2022, 2021 and 2020, the Company incurred a non-utilization fee of $284 thousand, $146 thousand and $38 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.

The CNB Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets, (e) maintenance of minimum total asset value by the borrower under the CNB Facility and its subsidiaries and (f) prohibitions of certain change of control events.  The agreements governing the CNB Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (ii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after March 12, 2014, (iii) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, (iv) limitations on mergers, consolidations, transfers of assets and similar transactions and (v) maintaining its status as a REIT. As of December 31, 2022, the Company was in compliance with all financial covenants of the CNB Facility.

MetLife Facility    

The Company is party to a $180.0 million revolving master repurchase facility with Metropolitan Life Insurance Company (“MetLife”) (the “MetLife Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans meeting defined eligibility criteria which are approved by MetLife in its sole discretion. In July 2022, the Company exercised a 12-month extension option on the MetLife Facility to extend the initial maturity date to August 13, 2023, subject to one 12-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date of the MetLife Facility to August 13, 2024. Advances under the MetLife Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR or SOFR plus a spread of 2.50%, subject to certain exceptions. For a period of nine months subsequent to August 2020, the non-utilization fee of 25 basis points per annum on the average daily available balance of the MetLife Facility, which is owed if less than 65% of the MetLife Facility is utilized, was waived. For the years ended December 31, 2022, 2021 and 2020, the Company incurred non-utilization fee of $247 thousand, $162 thousand and $7 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.
The MetLife Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default and (d) limitations on dispositions of assets.  The agreements governing the MetLife Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after August 13, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, and (v) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the MetLife Facility, the Company may be required to repay certain amounts under the MetLife Facility. As of December 31, 2022, the Company was in compliance with all financial covenants of the MetLife Facility.
Morgan Stanley Facility
    The Company is party to a $250.0 million master repurchase and securities contract with Morgan Stanley Bank, N.A. (“Morgan Stanley”) (the “Morgan Stanley Facility”). Under the Morgan Stanley Facility, the Company is permitted to sell, and later repurchase, certain qualifying commercial mortgage loans collateralized by retail, office, mixed-use, multifamily,
industrial, hospitality, student housing or self-storage properties. Morgan Stanley may approve the mortgage loans that are subject to the Morgan Stanley Facility in its sole discretion. In December 2022, the Company exercised a 12-month extension option on the Morgan Stanley Facility to extend the initial maturity date to January 16, 2024, subject to one 12-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date of the Morgan Stanley Facility to January 16, 2025. On March 21, 2022, ACRC Lender MS LLC, a subsidiary of the Company and Morgan Stanley entered into the Second Amendment to Master Repurchase and Securities Contract to modify the interest rate provisions in the Morgan Stanley Facility such that financings under the Morgan Stanley Facility in connection with loans pledged to the Morgan Stanley Facility after December 31, 2021 will utilize SOFR. Advances under the Morgan Stanley Facility generally accrue interest at a per annum rate equal to the sum of one-month LIBOR or SOFR plus a spread ranging from 1.75% to 2.25%, determined by Morgan Stanley, depending upon the mortgage loan sold to Morgan Stanley in the applicable transaction.

The Morgan Stanley Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00 and (e) if certain specific debt yield and loan to value tests are not met with respect to assets on the Morgan Stanley Facility, the Company may be required to repay certain amounts under the Morgan Stanley Facility. The Morgan Stanley Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2022, the Company was in compliance with all financial covenants of the Morgan Stanley Facility.

Notes Payable

Certain of the Company’s subsidiaries were party to two separate non-recourse note agreements with the lenders referred to therein, consisting of (1) a $28.3 million note that was closed in June 2019, which was secured by a hotel property located in New York that was recognized as real estate owned in the Company’s consolidated balance sheets and (2) a $23.5 million note that was closed in November 2019, which was secured by a $34.6 million senior mortgage loan held by the Company on a multifamily property located in South Carolina.

The $28.3 million note was repaid in full in conjunction with the sale of the hotel property that was recognized as real estate owned on March 1, 2022. See Note 5 for further details. The maturity date of the $28.3 million note was June 10, 2024, subject to one 6-month extension, which if exercised would have extended the maturity date to December 10, 2024. The loan was subject to prepayment at any time. Advances under the $28.3 million note accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.00%.

In June 2022, the Company repaid the $23.5 million note in full. The initial maturity date of the $23.5 million note was September 5, 2022, subject to two 12-month extensions, which if exercised would have extended the maturity date to September 5, 2024. Advances under the $23.5 million note accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.75%.

In July 2022, ACRC Lender CO LLC, a wholly owned subsidiary of the Company entered into a Credit and Security Agreement with Capital One, National Association, as administrative agent and collateral agent, and the lender referred to therein. The Credit and Security Agreement provides for a $105.0 million recourse note (together with the two non-recourse note agreements discussed above, the “Notes Payable”). The $105.0 million note is secured by a $133.0 million senior mortgage loan held by the Company on a multifamily property located in New York and is fully and unconditionally guaranteed by the Company pursuant to a Guaranty of Recourse Obligation. The initial maturity date of the $105.0 million note is July 28, 2025, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date to July 28, 2027. The $105.0 million note accrues interest at a per annum rate equal to the sum of one-month SOFR plus a spread of 2.00%. As of December 31, 2022, the total outstanding principal balance of the note was $105.0 million.

The $105.0 million note contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of June 30, 2022, plus (2) 80% of the
total net capital raised in all future equity issuances by the Company and (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity). As of December 31, 2022, the Company was in compliance with all financial covenants of the $105.0 million note.

Secured Term Loan

The Company and certain of its subsidiaries are party to a $150.0 million Credit and Guaranty Agreement with the lenders referred to therein and Cortland Capital Market Services LLC, as administrative agent and collateral agent for the lenders (the “Secured Term Loan”). In November 2021, the Company amended the Secured Term Loan to, among other things, (1) increase the commitment amount to $150.0 million, which was fully drawn on the closing date of the amendment, net of an original issue discount equal to 0.50% of the commitment amount, (2) extend the maturity date of the Secured Term Loan to November 12, 2026 and (3) update the interest rate on advances under the Secured Term Loan to the following fixed rates: (i) 4.50% per annum until May 12, 2025, (ii) after May 12, 2025 through November 12, 2025, the interest rate increases 0.125% every three months and (iii) after November 12, 2025 through November 12, 2026, the interest rate increases 0.250% every three months. Prior to the November 2021 amendment, advances under the Secured Term Loan accrued interest at a per annum rate equal to the sum of, at the Company’s option, one, two, three or six-month LIBOR plus a spread of 5.00%. During the 12-month extension period beginning December 22, 2020, the spread on advances under the Secured Term Loan increased every three months by 0.125%, 0.375% and 0.750% per annum, respectively, beginning after the third-month of the extension period. As of December 31, 2022, the total outstanding principal balance of the Secured Term Loan was $150.0 million.

The total original issue discount on the Secured Term Loan represents a discount to the debt cost to be amortized into interest expense using the effective interest method over the term of the Secured Term Loan. For the year ended December 31, 2022, the estimated per annum effective interest rate of the Secured Term Loan, which is equal to the fixed interest rate plus the accretion of the original issue discount and associated costs, was 4.6%. For the years ended December 31, 2021 and 2020, the estimated per annum effective interest rate of the Secured Term Loan, which was equal to LIBOR plus the spread plus the accretion of the original issue discount and associated costs, was 5.2% and 6.4%, respectively.

The Company's obligations under the Secured Term Loan are guaranteed by certain subsidiaries of the Company. Certain subsidiaries of the Company entered into a Pledge and Security Agreement with the collateral agent under the Secured Term Loan, pursuant to which the obligations of the Company and the subsidiary guarantors under the Secured Term Loan are each secured by equity interests in certain of the Company's indirect subsidiaries and other assets. In addition, the Company and certain of its subsidiaries entered into a Negative Pledge Agreement with the collateral agent under the Secured Term Loan, which prohibits pledging or otherwise encumbering, subject to permitted encumbrances, certain of the assets which were not subject to the Pledge and Security Agreement.

The Secured Term Loan contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing agreements, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets and (e) prohibitions of certain change of control events. The agreements governing the Secured Term Loan also impose certain covenants on the Company, including the following: (i) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.10 to 1.00, (ii) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2021, plus 80% of the net cash proceeds raised in subsequent equity issuances by the Company, (iv) maintaining an asset coverage ratio greater than 115%, (v) maintaining an unencumbered asset ratio greater than 125%, (vi) limitations on mergers, consolidations, transfers of assets and similar transactions, (vii) maintaining its status as a REIT and (viii) maintaining at least 65% of loans held for investment as senior commercial real estate loans, as measured by the average daily outstanding principal balance of all loans held for investment during a fiscal quarter and as adjusted for non-controlling interests. As of December 31, 2022, the Company was in compliance with all financial covenants of the Secured Term Loan.
Financing Agreements Maturities

At December 31, 2022, approximate principal maturities of the Company’s Financing Agreements are as follows ($ in thousands):
Wells Fargo
Facility		Citibank
Facility		CNB FacilityMetLife FacilityMorgan Stanley FacilityNotes PayableSecured Term LoanTotal
2023$— $— $— $— $— $— $— $— 
2024— — — — 198,193 — — 198,193 
2025270,798 236,240 — — 105,000 — 612,038 
2026— — — — 150,000 150,000 
2027— — — — — — — — 
Thereafter— — — — — — — — 
$270,798 $236,240 $— $— $198,193 $105,000 $150,000 $960,231 
SECURED BORROWINGS    A subsidiary of the Company was party to a secured borrowing arrangement related to a transferred loan that was closed in February 2020. In April 2019, the Company originated a $30.5 million loan on an office property located in North Carolina, which was bifurcated between a $24.4 million senior mortgage loan and a $6.1 million mezzanine loan. In February 2020, the Company transferred its interest in the $24.4 million senior mortgage loan to a third party and retained the $6.1 million mezzanine loan. The Company evaluated whether the transfer of the $24.4 million senior mortgage loan met the criteria in FASB ASC Topic 860, Transfers and Servicing, for treatment as a sale – legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint and transfer of effective control – and determined that the transfer did not qualify as a sale and thus, was treated as a financing transaction. As such, the Company did not derecognize the $24.4 million senior mortgage loan asset and recorded a secured borrowing liability in the Company’s consolidated balance sheets. The initial maturity date of the $24.4 million secured borrowing was May 5, 2023, subject to one 12-month extension, which may have been exercised at the transferee’s option, which, if exercised, would have extended the maturity date to May 5, 2024. Advances under the $24.4 million secured borrowing accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. In July 2022, the $30.5 million loan was fully repaid and thus, the $24.4 million secured borrowing liability was derecognized.
v3.22.4
SECURED BORROWINGS
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
SECURED BORROWINGS DEBT
Financing Agreements

The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the CNB Facility, the MetLife Facility and the Morgan Stanley Facility (individually defined below and collectively, the “Secured Funding Agreements”), Notes Payable (as defined below) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements, Notes Payable and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of December 31, 2022 and 2021, the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands):
As of December 31,
20222021
Outstanding BalanceTotal
Commitment		Outstanding BalanceTotal
Commitment
Secured Funding Agreements:
Wells Fargo Facility$270,798 $450,000 (1)$399,528 $450,000 (1)
Citibank Facility236,240 325,000 192,970 325,000 
CNB Facility— 75,000 — 75,000 
MetLife Facility— 180,000 20,648 180,000 
Morgan Stanley Facility198,193 250,000 226,901 250,000 
Subtotal$705,231 $1,280,000 $840,047 $1,280,000 
Notes Payable $105,000 $105,000 $51,110 $51,755 
Secured Term Loan$150,000 $150,000 $150,000 $150,000 
   Total$960,231 $1,535,000 $1,041,157 $1,481,755 
______________________________

(1)The maximum commitment for the Wells Fargo Facility (as defined below) may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee.

Some of the Company’s Financing Agreements are collateralized by (i) assignments of specific loans, preferred equity or a pool of loans held for investment or loans held for sale owned by the Company, (ii) interests in the subordinated portion of the Company’s securitization debt, or (iii) interests in wholly-owned entity subsidiaries that hold the Company’s loans held for investment. The Company is the borrower or guarantor under each of the Financing Agreements. Generally, the Company partially offsets interest rate risk by matching the interest index of loans held for investment with the Secured Funding Agreements used to fund them. The Company’s Financing Agreements contain various affirmative and negative covenants, including negative pledges, and provisions regarding events of default that are normal and customary for similar financing arrangements.

Wells Fargo Facility
 
The Company is party to a master repurchase funding facility with Wells Fargo Bank, National Association (“Wells Fargo”) (the “Wells Fargo Facility”), which allows the Company to borrow up to $450.0 million. The maximum commitment may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee. Under the Wells Fargo Facility, the Company is permitted to sell, and later repurchase, certain qualifying senior commercial mortgage loans, A-Notes, pari-passu participations in commercial mortgage loans and mezzanine loans under certain circumstances, subject to available collateral approved by Wells Fargo in its sole discretion. In December 2022, the Company amended the Wells Fargo Facility to, among other things, (1) extend the funding period of the Wells Fargo Facility to December 15, 2025, (2) extend the initial maturity date of the Wells Fargo Facility to December 15, 2025, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the Wells Fargo Facility to December 14, 2027 and (3) modify the interest rate on advances under the Wells Fargo Facility from a per annum rate equal to the sum of one-month LIBOR or SOFR plus a pricing margin range of 1.50% to 2.75%, subject to certain exceptions, to a per annum rate equal to the sum of one-month LIBOR or SOFR plus a pricing margin range of 1.50% to 3.75%, subject to certain exceptions. In December 2020, the Company amended the Wells Fargo Facility to, among other things, eliminate the non-utilization fee on the Wells Fargo Facility. Prior to the amendment, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Wells Fargo Facility to the extent less than 75% of the Wells Fargo Facility was utilized. For the years ended December 31, 2022 and 2021, the Company did not incur a non-utilization fee. For the year ended December 31, 2020, the Company incurred a non-utilization fee of $19 thousand. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.

The Wells Fargo Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for
similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments in excess of the minimum amount necessary to continue to qualify as a REIT and avoid the payment of income and excise taxes, (d) maintenance of adequate capital, (e) limitations on change of control, (f) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (g) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (h) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (i) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (j) maintaining a tangible net worth of at least the sum of (1) approximately $135.5 million, plus (2) 80% of the net proceeds raised in all future equity issuances by the Company and (k) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the Wells Fargo Facility, the Company may be required to repay certain amounts under the Wells Fargo Facility. As of December 31, 2022, the Company was in compliance with all financial covenants of the Wells Fargo Facility.

Citibank Facility

The Company is party to a $325.0 million master repurchase facility with Citibank, N.A. (“Citibank”) (the “Citibank Facility”). Under the Citibank Facility, the Company is permitted to sell and later repurchase certain qualifying senior commercial mortgage loans and A-Notes approved by Citibank in its sole discretion. In January 2022, the Company amended the Citibank Facility to, among other things, extend the initial maturity date and funding availability period to January 13, 2025, subject to two 12-month extensions, each of which may be exercised at the Company’s option assuming no existing defaults under the Citibank Facility and applicable extension fees being paid, which, if both were exercised, would extend the maturity date of the Citibank Facility to January 13, 2027. Advances under the Citibank Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR or SOFR plus an indicative pricing margin range of 1.50% to 2.10%, subject to certain exceptions. Prior to the January 2022 amendment, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility to the extent less than 75% of the Citibank Facility was utilized. Subsequent to the January 2022 amendment, the Company incurs a non-utilization fee of 25 basis points per annum on the average daily positive difference between the maximum advances approved by Citibank and the actual advances outstanding on the Citibank Facility. For the years ended December 31, 2022, 2021 and 2020, the Company incurred a non-utilization fee of $11 thousand, $598 thousand and $516 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.

The Citibank Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Citibank Facility, the Company may be required to repay certain amounts under the Citibank Facility. The Citibank Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2022, the Company was in compliance with all financial covenants of the Citibank Facility. 

CNB Facility
    The Company is party to a $75.0 million secured revolving funding facility with City National Bank (the “CNB Facility”). The Company is permitted to borrow funds under the CNB Facility to finance investments and for other working capital and general corporate needs. In March 2022, the Company exercised a 12-month extension option on the CNB Facility to extend the maturity date to March 10, 2023. Since November 12, 2021, advances under the CNB Facility accrue interest at a per annum rate equal to the sum of, at the Company’s option, either (a) SOFR (with a 0.35% floor) plus 2.65% or (b) a base rate
(which is the highest of a prime rate, the federal funds rate plus 0.50%, or Daily Simple SOFR plus 1.00%) plus 1.00%; provided that in no event shall the interest rate be less than 2.65%. Prior to November 12, 2021, the interest rate on advances was a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12-month interest period plus 2.65% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50%, or one-month LIBOR plus 1.00%) plus 1.00%. Unless at least 75% of the CNB Facility is used on average, unused commitments under the CNB Facility accrue non-utilization fees at the rate of 0.375% per annum. For the years ended December 31, 2022, 2021 and 2020, the Company incurred a non-utilization fee of $284 thousand, $146 thousand and $38 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.

The CNB Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets, (e) maintenance of minimum total asset value by the borrower under the CNB Facility and its subsidiaries and (f) prohibitions of certain change of control events.  The agreements governing the CNB Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (ii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after March 12, 2014, (iii) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, (iv) limitations on mergers, consolidations, transfers of assets and similar transactions and (v) maintaining its status as a REIT. As of December 31, 2022, the Company was in compliance with all financial covenants of the CNB Facility.

MetLife Facility    

The Company is party to a $180.0 million revolving master repurchase facility with Metropolitan Life Insurance Company (“MetLife”) (the “MetLife Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans meeting defined eligibility criteria which are approved by MetLife in its sole discretion. In July 2022, the Company exercised a 12-month extension option on the MetLife Facility to extend the initial maturity date to August 13, 2023, subject to one 12-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date of the MetLife Facility to August 13, 2024. Advances under the MetLife Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR or SOFR plus a spread of 2.50%, subject to certain exceptions. For a period of nine months subsequent to August 2020, the non-utilization fee of 25 basis points per annum on the average daily available balance of the MetLife Facility, which is owed if less than 65% of the MetLife Facility is utilized, was waived. For the years ended December 31, 2022, 2021 and 2020, the Company incurred non-utilization fee of $247 thousand, $162 thousand and $7 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations.
The MetLife Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default and (d) limitations on dispositions of assets.  The agreements governing the MetLife Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after August 13, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, and (v) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the MetLife Facility, the Company may be required to repay certain amounts under the MetLife Facility. As of December 31, 2022, the Company was in compliance with all financial covenants of the MetLife Facility.
Morgan Stanley Facility
    The Company is party to a $250.0 million master repurchase and securities contract with Morgan Stanley Bank, N.A. (“Morgan Stanley”) (the “Morgan Stanley Facility”). Under the Morgan Stanley Facility, the Company is permitted to sell, and later repurchase, certain qualifying commercial mortgage loans collateralized by retail, office, mixed-use, multifamily,
industrial, hospitality, student housing or self-storage properties. Morgan Stanley may approve the mortgage loans that are subject to the Morgan Stanley Facility in its sole discretion. In December 2022, the Company exercised a 12-month extension option on the Morgan Stanley Facility to extend the initial maturity date to January 16, 2024, subject to one 12-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date of the Morgan Stanley Facility to January 16, 2025. On March 21, 2022, ACRC Lender MS LLC, a subsidiary of the Company and Morgan Stanley entered into the Second Amendment to Master Repurchase and Securities Contract to modify the interest rate provisions in the Morgan Stanley Facility such that financings under the Morgan Stanley Facility in connection with loans pledged to the Morgan Stanley Facility after December 31, 2021 will utilize SOFR. Advances under the Morgan Stanley Facility generally accrue interest at a per annum rate equal to the sum of one-month LIBOR or SOFR plus a spread ranging from 1.75% to 2.25%, determined by Morgan Stanley, depending upon the mortgage loan sold to Morgan Stanley in the applicable transaction.

The Morgan Stanley Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00 and (e) if certain specific debt yield and loan to value tests are not met with respect to assets on the Morgan Stanley Facility, the Company may be required to repay certain amounts under the Morgan Stanley Facility. The Morgan Stanley Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2022, the Company was in compliance with all financial covenants of the Morgan Stanley Facility.

Notes Payable

Certain of the Company’s subsidiaries were party to two separate non-recourse note agreements with the lenders referred to therein, consisting of (1) a $28.3 million note that was closed in June 2019, which was secured by a hotel property located in New York that was recognized as real estate owned in the Company’s consolidated balance sheets and (2) a $23.5 million note that was closed in November 2019, which was secured by a $34.6 million senior mortgage loan held by the Company on a multifamily property located in South Carolina.

The $28.3 million note was repaid in full in conjunction with the sale of the hotel property that was recognized as real estate owned on March 1, 2022. See Note 5 for further details. The maturity date of the $28.3 million note was June 10, 2024, subject to one 6-month extension, which if exercised would have extended the maturity date to December 10, 2024. The loan was subject to prepayment at any time. Advances under the $28.3 million note accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.00%.

In June 2022, the Company repaid the $23.5 million note in full. The initial maturity date of the $23.5 million note was September 5, 2022, subject to two 12-month extensions, which if exercised would have extended the maturity date to September 5, 2024. Advances under the $23.5 million note accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.75%.

In July 2022, ACRC Lender CO LLC, a wholly owned subsidiary of the Company entered into a Credit and Security Agreement with Capital One, National Association, as administrative agent and collateral agent, and the lender referred to therein. The Credit and Security Agreement provides for a $105.0 million recourse note (together with the two non-recourse note agreements discussed above, the “Notes Payable”). The $105.0 million note is secured by a $133.0 million senior mortgage loan held by the Company on a multifamily property located in New York and is fully and unconditionally guaranteed by the Company pursuant to a Guaranty of Recourse Obligation. The initial maturity date of the $105.0 million note is July 28, 2025, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date to July 28, 2027. The $105.0 million note accrues interest at a per annum rate equal to the sum of one-month SOFR plus a spread of 2.00%. As of December 31, 2022, the total outstanding principal balance of the note was $105.0 million.

The $105.0 million note contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of June 30, 2022, plus (2) 80% of the
total net capital raised in all future equity issuances by the Company and (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity). As of December 31, 2022, the Company was in compliance with all financial covenants of the $105.0 million note.

Secured Term Loan

The Company and certain of its subsidiaries are party to a $150.0 million Credit and Guaranty Agreement with the lenders referred to therein and Cortland Capital Market Services LLC, as administrative agent and collateral agent for the lenders (the “Secured Term Loan”). In November 2021, the Company amended the Secured Term Loan to, among other things, (1) increase the commitment amount to $150.0 million, which was fully drawn on the closing date of the amendment, net of an original issue discount equal to 0.50% of the commitment amount, (2) extend the maturity date of the Secured Term Loan to November 12, 2026 and (3) update the interest rate on advances under the Secured Term Loan to the following fixed rates: (i) 4.50% per annum until May 12, 2025, (ii) after May 12, 2025 through November 12, 2025, the interest rate increases 0.125% every three months and (iii) after November 12, 2025 through November 12, 2026, the interest rate increases 0.250% every three months. Prior to the November 2021 amendment, advances under the Secured Term Loan accrued interest at a per annum rate equal to the sum of, at the Company’s option, one, two, three or six-month LIBOR plus a spread of 5.00%. During the 12-month extension period beginning December 22, 2020, the spread on advances under the Secured Term Loan increased every three months by 0.125%, 0.375% and 0.750% per annum, respectively, beginning after the third-month of the extension period. As of December 31, 2022, the total outstanding principal balance of the Secured Term Loan was $150.0 million.

The total original issue discount on the Secured Term Loan represents a discount to the debt cost to be amortized into interest expense using the effective interest method over the term of the Secured Term Loan. For the year ended December 31, 2022, the estimated per annum effective interest rate of the Secured Term Loan, which is equal to the fixed interest rate plus the accretion of the original issue discount and associated costs, was 4.6%. For the years ended December 31, 2021 and 2020, the estimated per annum effective interest rate of the Secured Term Loan, which was equal to LIBOR plus the spread plus the accretion of the original issue discount and associated costs, was 5.2% and 6.4%, respectively.

The Company's obligations under the Secured Term Loan are guaranteed by certain subsidiaries of the Company. Certain subsidiaries of the Company entered into a Pledge and Security Agreement with the collateral agent under the Secured Term Loan, pursuant to which the obligations of the Company and the subsidiary guarantors under the Secured Term Loan are each secured by equity interests in certain of the Company's indirect subsidiaries and other assets. In addition, the Company and certain of its subsidiaries entered into a Negative Pledge Agreement with the collateral agent under the Secured Term Loan, which prohibits pledging or otherwise encumbering, subject to permitted encumbrances, certain of the assets which were not subject to the Pledge and Security Agreement.

The Secured Term Loan contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing agreements, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets and (e) prohibitions of certain change of control events. The agreements governing the Secured Term Loan also impose certain covenants on the Company, including the following: (i) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.10 to 1.00, (ii) maintaining a ratio of total debt to tangible net worth of not more than 4.50 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2021, plus 80% of the net cash proceeds raised in subsequent equity issuances by the Company, (iv) maintaining an asset coverage ratio greater than 115%, (v) maintaining an unencumbered asset ratio greater than 125%, (vi) limitations on mergers, consolidations, transfers of assets and similar transactions, (vii) maintaining its status as a REIT and (viii) maintaining at least 65% of loans held for investment as senior commercial real estate loans, as measured by the average daily outstanding principal balance of all loans held for investment during a fiscal quarter and as adjusted for non-controlling interests. As of December 31, 2022, the Company was in compliance with all financial covenants of the Secured Term Loan.
Financing Agreements Maturities

At December 31, 2022, approximate principal maturities of the Company’s Financing Agreements are as follows ($ in thousands):
Wells Fargo
Facility		Citibank
Facility		CNB FacilityMetLife FacilityMorgan Stanley FacilityNotes PayableSecured Term LoanTotal
2023$— $— $— $— $— $— $— $— 
2024— — — — 198,193 — — 198,193 
2025270,798 236,240 — — 105,000 — 612,038 
2026— — — — 150,000 150,000 
2027— — — — — — — — 
Thereafter— — — — — — — — 
$270,798 $236,240 $— $— $198,193 $105,000 $150,000 $960,231 
SECURED BORROWINGS    A subsidiary of the Company was party to a secured borrowing arrangement related to a transferred loan that was closed in February 2020. In April 2019, the Company originated a $30.5 million loan on an office property located in North Carolina, which was bifurcated between a $24.4 million senior mortgage loan and a $6.1 million mezzanine loan. In February 2020, the Company transferred its interest in the $24.4 million senior mortgage loan to a third party and retained the $6.1 million mezzanine loan. The Company evaluated whether the transfer of the $24.4 million senior mortgage loan met the criteria in FASB ASC Topic 860, Transfers and Servicing, for treatment as a sale – legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint and transfer of effective control – and determined that the transfer did not qualify as a sale and thus, was treated as a financing transaction. As such, the Company did not derecognize the $24.4 million senior mortgage loan asset and recorded a secured borrowing liability in the Company’s consolidated balance sheets. The initial maturity date of the $24.4 million secured borrowing was May 5, 2023, subject to one 12-month extension, which may have been exercised at the transferee’s option, which, if exercised, would have extended the maturity date to May 5, 2024. Advances under the $24.4 million secured borrowing accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. In July 2022, the $30.5 million loan was fully repaid and thus, the $24.4 million secured borrowing liability was derecognized.
v3.22.4
DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments, which includes interest rate swaps and interest rate caps, on certain borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. These derivatives may or may not qualify as cash flow hedges under the hedge accounting requirements of FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”). Derivatives not designated as cash flow hedges are not speculative and are used to manage our exposure to interest rate movements. See Note 2 included in these consolidated financial statements for additional discussion of the accounting for designated and non-designated hedges.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which the Company and its affiliates may also have other financial relationships.

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of December 31, 2022 and 2021 (notional amount in thousands):
As of
December 31, 2022December 31, 2021
Interest Rate DerivativesNumber of InstrumentsNotional Amount
Rate(1)
IndexWeighted Average Maturity (Years)Number of InstrumentsNotional Amount
Rate(1)
IndexWeighted Average Maturity (Years)
Interest rate swaps1$410,0000.2075%
LIBOR(2)
0.4
1$700,0000.2075%
LIBOR(2)
1.0
Interest rate caps
0(3)
$—— — — 1$220,0000.5000%LIBOR1.0
_______________________________

(1)    Represents fixed rate for interest rate swaps and strike rate for interest rate caps.
(2)    Subject to a 0.00% floor.
(3)    In March 2022, the Company re-calibrated its net exposure to interest rate changes by terminating its interest rate cap derivative, which had a notional amount of $170.0 million on the termination date and a strike rate of 0.50%. For the year ended December 31, 2022, the Company recognized a $2.0 million realized gain within OCI in conjunction with the termination of the interest rate cap. In accordance with ASC 815, the realized gain will be recognized within current earnings over the remaining original term of the interest rate cap derivative as it was designated as an effective hedge. For the year ended December 31, 2022, the Company recognized a realized gain of $1.0 million through a reduction in interest expense, on the termination of the interest rate cap within current earnings.

The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

 
Fair Value of Derivatives in an Asset Position(1) as of
Fair Value of Derivatives in a Liability Position(2) as of
December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Derivatives designated as hedging instruments:
Interest rate derivatives$6,565 $2,979 $— $— 
____________________________

(1)    Included in other assets in the Company’s consolidated balance sheets.
(2)    Included in other liabilities in the Company’s consolidated balance sheets.
v3.22.4
COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
    As of December 31, 2022, there were no contingencies recorded on the Company’s consolidated balance sheets as a result of such conditions, however, if global market conditions worsen, it could adversely affect the Company’s business, financial condition and results of operations.
    As of December 31, 2022 and 2021, the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands):
 As of December 31,
20222021
Total commitments $2,510,308 $2,662,853 
Less: funded commitments (2,282,821)(2,429,112)
Total unfunded commitments $227,487 $233,741 
The Company from time to time may be a party to litigation relating to claims arising in the normal course of business. As of December 31, 2022, the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations.
v3.22.4
STOCKHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY STOCKHOLDERS’ EQUITY
At the Market Stock Offering Program

    On November 22, 2019, the Company entered into an equity distribution agreement (the “Equity Distribution Agreement”), pursuant to which the Company offered and sold, from time to time, shares of the Company’s common stock, governing as “at the market offering” program having an aggregate offering price of up to $100.0 million. During the year ended December 31, 2022, the Company sold an aggregate of 190,369 shares of the Company’s common stock under the Equity Distribution Agreement at an average price of $15.33 per share. The sales generated net proceeds of approximately $2.9 million. During the year ended December 31, 2021, the Company sold an aggregate of 137,237 shares of the Company’s common stock under the Equity Distribution Agreement at an average price of $15.68 per share. The sales generated net proceeds of approximately $2.1 million. The “at the market offering” program is currently unavailable.

Stock Repurchase Program

On July 26, 2022, the Company’s Board of Directors approved a stock repurchase program of up to $50.0 million, which is expected to be in effect until July 26, 2023, or until the approved dollar amount has been used to repurchase shares (the “Repurchase Program”). Pursuant to the Repurchase Program, the Company may repurchase shares of its common stock in amounts, at prices and at such times as it deems appropriate, subject to market conditions and other considerations, including all applicable legal requirements. Repurchases may include purchases on the open market or privately negotiated transactions, under Rule 10b5-1 trading plans, under accelerated share repurchase programs, in tender offers and otherwise. The Repurchase Program does not obligate the Company to acquire any particular amount of shares of its common stock and may be modified or suspended at any time at its discretion. The Company did not conduct any repurchases under the Repurchase Program during the year ended December 31, 2022.

Equity Offerings

On May 20, 2022, the Company closed the public offering of an aggregate of 7,000,000 shares of the Company’s common stock, generating net proceeds of approximately $103.2 million, after deducting transaction expenses.

Equity Incentive Plan
 
On April 23, 2012, the Company adopted an equity incentive plan, which was amended and restated in June 2018 (as further amended, the “Amended and Restated 2012 Equity Incentive Plan”). In February 2022, the Company’s board of directors authorized, and in May 2022, the Company’s stockholders approved, the first amendment to the Amended and Restated 2012 Equity Incentive Plan, which among other things, increased the total number of shares of common stock the Company may grant thereunder to 2,490,000 shares. Pursuant to the Amended and Restated 2012 Equity Incentive Plan, as amended by the first amendment, the Company may grant awards consisting of restricted shares of the Company’s common stock, restricted stock units (“RSUs”) and/or other equity-based awards to the Company’s outside directors, employees of the Manager, officers, ACREM and other eligible awardees under the plan. Any restricted shares of the Company’s common stock and RSUs will be accounted for under FASB ASC Topic 718, Compensation—Stock Compensation, resulting in stock-based compensation expense equal to the grant date fair value of the underlying restricted shares of common stock or RSUs.
 
Restricted stock and RSU grants generally vest ratably over a one to three-year period from the vesting start date. The grantee receives additional compensation for each outstanding restricted stock or RSU grant, classified as dividends paid, equal to the per-share dividends received by the Company’s common stockholders.
The following tables summarize the (i) non-vested shares of restricted stock and RSUs and (ii) vesting schedule of shares of restricted stock and RSUs for the Company’s directors and officers and employees of the Manager as of December 31, 2022:

Schedule of Non-Vested Share and Share Equivalents
 Restricted Stock Grants—DirectorsRestricted Stock Grants—Officers and Employees of the ManagerRSUs—Officers and Employees of the ManagerTotal
Balance at December 31, 202116,640 25,373 497,161 539,174 
Granted 24,780 — 434,150 458,930 
Vested (25,283)(25,373)(84,776)(135,432)
Forfeited — — (14,063)(14,063)
Balance at December 31, 202216,137 — 832,472 848,609 

Future Anticipated Vesting Schedule
Restricted Stock Grants—DirectorsRestricted Stock Grants—Officers and Employees of the ManagerRSUs—Officers and Employees of the ManagerTotal
202314,052 — 168,274 182,326 
20241,668 — 285,405 287,073 
2025417 — 234,097 234,514 
2026— — 144,696 144,696 
2027— — — — 
Total 16,137 — 832,472 848,609 
The following table summarizes the restricted stock and RSU compensation expense included within general and administrative expenses in the Company’s consolidated statements of operations, the total fair value of shares vested and the weighted average grant date fair value of the restricted stock and RSUs granted to the Company’s directors and officers and employees of the Manager for the years ended December 31, 2022, 2021 and 2020 ($ in thousands):
 For the years ended December 31,
 2022
2021
2020
Restricted Stock and RSU GrantsRestricted Stock and RSU GrantsRestricted Stock and RSU Grants
DirectorsOfficers and Employees of the ManagerTotalDirectorsOfficers and Employees of the ManagerTotalDirectorsOfficers and Employees of the ManagerTotal
Compensation expense $399 $2,477 $2,876 $329 $1,611 $1,940 $319 $1,020 $1,339 
Total fair value of shares vested (1)338 1,623 1,961 460 1,009 1,469 315 849 1,164 
Weighted average grant date fair value390 4,654 5,044 403 4,255 4,658 292 2,898 3,190 
___________________________

(1)    Based on the closing price of the Company’s common stock on the NYSE on each vesting date.

As of December 31, 2022, 2021 and 2020, the total compensation cost related to non-vested awards not yet recognized totaled $8.0 million, $6.0 million and $3.7 million, respectively, and the weighted average period over which the non-vested awards are expected to be recognized is 2.3 years.
v3.22.4
EARNINGS PER SHARE
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
EARNINGS PER SHARE EARNINGS PER SHARE
The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2022, 2021 and 2020 ($ in thousands, except share and per share data):

For the years ended December 31,
202220212020
Net income attributable to common stockholders$29,785 $60,460 $21,840 
Divided by:
Basic weighted average shares of common stock outstanding:51,679,744 42,399,613 32,977,462 
Weighted average non-vested restricted stock and RSUs446,512 281,892 219,046 
Diluted weighted average shares of common stock outstanding:52,126,256 42,681,505 33,196,508 
Basic earnings per common share$0.58 $1.43 $0.66 
Diluted earnings per common share$0.57 $1.42 $0.66 
v3.22.4
INCOME TAX
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAX INCOME TAX
    
    The Company wholly owns ACRC Lender W TRS LLC, which is a taxable REIT subsidiary (“TRS”) formed to issue and hold certain loans intended for sale. The Company also wholly owns ACRC 2017-FL3 TRS LLC, which is a TRS formed to hold a portion of the FL3 CLO Securitization and FL4 CLO Securitization (as defined below), including the portion that generates excess inclusion income. Additionally, the Company wholly owns ACRC WM Tenant LLC, which is a TRS formed to lease from an affiliate the hotel property classified as real estate owned acquired on March 8, 2019. ACRC WM Tenant LLC engaged a third-party hotel management company to operate the hotel under a management contract prior to the sale of the hotel on March 1, 2022.

The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2022, 2021 and 2020 ($ in thousands):
For the years ended December 31,
 202220212020
Current $42 $450 $82 
Deferred — — (99)
Excise tax 430 272 369 
   Total income tax expense, including excise tax$472 $722 $352 

    For the years ended December 31, 2022, 2021 and 2020, the Company incurred an expense of $430 thousand, $272 thousand and $369 thousand, respectively, for U.S. federal excise tax. Excise tax represents a 4% tax on the sum of a portion of the Company’s ordinary income and net capital gains not distributed during the calendar year (including any distribution declared in the fourth quarter and paid following January) plus any prior year shortfall. If it is determined that an excise tax liability exists for the current tax year, the Company will accrue excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations.

The TRSs recognize interest and penalties related to unrecognized tax benefits within income tax expense in the Company’s consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the Company’s consolidated balance sheets.

As of December 31, 2022, tax years 2019 through 2022 remain subject to examination by taxing authorities. The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months.
v3.22.4
FAIR VALUE
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUEThe Company follows FASB ASC Topic 820-10, Fair Value Measurement (“ASC 820-10”), which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure requirements for fair value measurements. ASC 820-10 determines fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants on the measurement date. ASC 820-10 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value.

In accordance with ASC 820-10, the inputs used to measure fair value are summarized in the three broad levels listed below:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

•Level 3—Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

GAAP requires disclosure of fair value information about financial and nonfinancial assets and liabilities, whether or not recognized in the financial statements, for which it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows using market yields, or other valuation methodologies. Any changes to the valuation methodology will be reviewed by the Company’s management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that the valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial and nonfinancial assets and liabilities could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of the measurement date, which may fall within periods of market dislocation, during which price transparency may be reduced.

Recurring Fair Value Measurements

Derivative Financial Instruments

The Company is required to record derivative financial instruments at fair value on a recurring basis in accordance with GAAP. The fair value of interest rate derivatives was estimated using a third-party specialist, based on contractual cash flows and observable inputs comprising credit spreads.

Available-for-Sale Debt Securities

The Company designates investments in CRE debt securities as available-for-sale on the acquisition date of such CRE debt securities. The Company is required to record investments in available-for-sale debt securities at fair value on a recurring basis in accordance with GAAP. During the year ended December 31, 2022, the Company acquired three CRE debt securities for an aggregate purchase price of $27.9 million, which consisted of floating rate, investment grade rated debt securities that had a weighted average coupon of SOFR plus 2.47%. The Company’s available-for-sale debt securities have a contractual maturity greater than 10 years from the purchase date.

As of December 31, 2022, the Company had three CRE debt security investments designated as available-for-sale debt securities. As of December 31, 2021, the Company had no CRE debt security investments. The following table summarizes the Company’s investments in available-for-sale debt securities as of December 31, 2022 ($ in thousands):
Face AmountAmortized CostUnamortized DiscountUnrealized Gain (Loss), Net
Available-for-sale debt securities$28,000 $27,881 $119 $55 

The fair value of available-for-sale debt securities was estimated using third-party broker quotes, which provide valuation estimates based upon contractual cash flows, observable inputs comprising credit spreads and market liquidity.
The following tables summarize the financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 ($ in thousands):
As of December 31, 2022
Level 1Level 2Level 3Total
Financial assets:
Interest rate derivatives$— $6,565 $— $6,565 
Available-for-sale debt securities$— $27,936 $— $27,936 
Financial liabilities:
Interest rate derivatives$— $— $— $— 

As of December 31, 2021
Level 1Level 2Level 3Total
Financial assets:
Interest rate derivatives$— $2,979 $— $2,979 
Financial liabilities:
Interest rate derivatives$— $— $— $— 

As of December 31, 2022 and 2021, the Company did not have any nonfinancial assets or liabilities required to be recorded at fair value on a recurring basis.
Nonrecurring Fair Value Measurements

The Company was required to record real estate owned, a nonfinancial asset, at fair value on a nonrecurring basis in accordance with GAAP. Real estate owned consisted of a hotel property that was acquired by the Company on March 8, 2019 through a deed in lieu of foreclosure. See Note 5 included in these consolidated financial statements for more information on real estate owned. Real estate owned was recorded at fair value at acquisition using Level 3 inputs and is evaluated for indicators of impairment on a quarterly basis. Real estate owned was considered impaired when the sum of estimated future undiscounted cash flows expected to be generated by the real estate owned over the estimated remaining holding period is less than the carrying amount of such real estate owned. Cash flows include operating cash flows and anticipated capital proceeds generated by the real estate owned. An impairment charge is recorded equal to the excess of the carrying value of the real estate owned over the fair value. The fair value of the hotel property at acquisition was estimated using a third-party appraisal, which utilized standard industry valuation techniques such as the income and market approach. When determining the fair value of a hotel, certain assumptions are made including, but not limited to: (1) projected operating cash flows, including factors such as booking pace, growth rates, occupancy, daily room rates, hotel specific operating costs and future capital expenditures; and (2) projected cash flows from the eventual disposition of the hotel based upon the Company’s estimation of a hotel specific capitalization rate, hotel specific discount rates and comparable selling prices in the market.

As of December 31, 2022, the Company did not have any financial assets or liabilities or nonfinancial assets or liabilities required to be recorded at fair value on a nonrecurring basis. As of December 31, 2021, the Company did not have any financial assets or liabilities or nonfinancial liabilities required to be recorded at fair value on a nonrecurring basis.
Financial Assets and Liabilities Not Measured at Fair Value
 
As of December 31, 2022 and 2021, the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands):
As of December 31,
20222021
Level in Fair Value HierarchyCarrying ValueFair
Value		Carrying ValueFair
Value
Financial assets:
   Loans held for investment3$2,264,008 $2,233,319 $2,414,383 $2,408,463 
Financial liabilities:
   Secured funding agreements2$705,231 $705,231 $840,047 $840,047 
   Notes payable 3104,460 103,635 50,358 51,110 
   Secured term loan3149,200 137,571 149,016 150,000 
Collateralized loan obligation securitization debt (consolidated VIEs)3777,675 749,242 861,188 863,403 
   Secured borrowings3— — 22,589 22,715 

The carrying values of cash and cash equivalents, restricted cash, interest receivable, due to affiliate liability and accrued expenses, which are all categorized as Level 2 within the fair value hierarchy, approximate their fair values due to their short-term nature.
 
Loans held for investment are recorded at cost, net of unamortized loan fees and origination costs. To determine the fair value of the collateral, the Company may employ different approaches depending on the type of collateral. The Company determined the fair value of loans held for investment based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and comparable selling prices in the market. The Secured Funding Agreements are recorded at outstanding principal, which is the Company’s best estimate of the fair value. The Company determined the fair value of the Notes Payable, Secured Term Loan, collateralized loan obligation (“CLO”) securitization debt and Secured Borrowings based on a discounted cash flow methodology, taking into consideration various factors including discount rates, actions of other lenders and comparable market quotes and recent trades for similar products.
v3.22.4
RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
Management Agreement

The Company is party to an Amended and Restated Management Agreement under which ACREM, subject to the supervision and oversight of the Company’s board of directors, is responsible for, among other duties, (a) performing all of the Company’s day-to-day functions, (b) determining the Company’s investment strategy and guidelines in conjunction with the Company’s board of directors, (c) sourcing, analyzing and executing investments, asset sales and financing, and (d) performing portfolio management duties. In addition, ACREM has an Investment Committee that oversees compliance with the Company’s investment strategy and guidelines, loans held for investment portfolio holdings and financing strategy.

In exchange for its services, ACREM is entitled to receive a base management fee, an incentive fee and expense reimbursements. In addition, ACREM and its personnel may receive grants of equity-based awards pursuant to the Company’s Amended and Restated 2012 Equity Incentive Plan and a termination fee, if applicable.
 
The base management fee is equal to 1.5% of the Company’s stockholders’ equity per annum, which is calculated and payable quarterly in arrears in cash. For purposes of calculating the base management fee, stockholders’ equity means: (a) the sum of (i) the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro-rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (ii) the Company’s retained earnings at the end of the most recently completed fiscal quarter determined in accordance with GAAP (without taking into account any non-cash equity compensation expense incurred in current or prior periods); less (b) (x) any amount that the Company has paid to repurchase the Company’s common stock since inception, (y) any unrealized gains and losses and other non-cash items that have impacted stockholders’ equity as reported in the Company’s consolidated financial statements prepared in accordance with
GAAP, and (z) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between ACREM and the Company’s independent directors and approval by a majority of the Company’s independent directors. As a result, the Company’s stockholders’ equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown in the Company’s consolidated financial statements.
 
The incentive fee is an amount, not less than zero, equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) the Company’s Core Earnings (as defined below) for the previous 12-month period, and (B) the product of (1) the weighted average of the issue price per share of the Company’s common stock of all of the Company’s public offerings of common stock multiplied by the weighted average number of all shares of common stock outstanding including any restricted shares of the Company’s common stock, RSUs, or any shares of the Company’s common stock not yet issued, but underlying other awards granted under the Company’s Amended and Restated 2012 Equity Incentive Plan (see Note 10 included in these consolidated financial statements) in the previous 12-month period, and (2) 8%; and (b) the sum of any incentive fees earned by ACREM with respect to the first three fiscal quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect to any fiscal quarter unless cumulative Core Earnings for the 12 most recently completed fiscal quarters is greater than zero. “Core Earnings” is defined in the Management Agreement as GAAP net income (loss) computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fee, depreciation and amortization (to the extent that any of the Company’s target investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss), and one-time events pursuant to changes in GAAP and certain non-cash charges after discussions between ACREM and the Company’s independent directors and after approval by a majority of the Company’s independent directors. On April 25, 2022, the Company and ACREM entered into an amendment to the Management Agreement to (a) exclude $2.4 million of net income associated with the sale of the real estate owned property for the three months ended March 31, 2022 and to (b) include $2.0 million of net income associated with the Company’s gain on the termination of its interest rate cap derivative for the three months ended March 31, 2022, in each case, with respect to Core Earnings for the three months ended March 31, 2022. Core Earnings is defined in the Management Agreement and is used to calculate the incentive fees the Company pays to ACREM. For the years ended December 31, 2022, 2021 and 2020, the Company incurred incentive fees of $3.4 million, $2.8 million and $0.8 million, respectively.

The Company reimburses ACREM at cost for operating expenses that ACREM incurs on the Company’s behalf, including expenses relating to legal, financial, accounting, servicing, due diligence and other services, expenses in connection with the origination and financing of the Company’s investments, communications with the Company’s stockholders, information technology systems, software and data services used for the Company, travel, complying with legal and regulatory requirements, taxes, insurance maintained for the benefit of the Company as well as all other expenses actually incurred by ACREM that are reasonably necessary for the performance by ACREM of its duties and functions under the Management Agreement. Ares Management, from time to time, incurs fees, costs and expenses on behalf of more than one investment vehicle. To the extent such fees, costs and expenses are incurred for the account or benefit of more than one fund, each such investment vehicle, including the Company, will typically bear an allocable portion of any such fees, costs and expenses in proportion to the size of its investment in the activity or entity to which such expense relates (subject to the terms of each fund’s governing documents) or in such other manner as Ares Management considers fair and equitable under the circumstances, such as the relative fund size or capital available to be invested by such investment vehicles. Where an investment vehicle’s governing documents do not permit the payment of a particular expense, Ares Management will generally pay such investment vehicle’s allocable portion of such expense. In addition, the Company is responsible for its proportionate share of certain fees and expenses, including due diligence costs, as determined by ACREM and Ares Management, including legal, accounting and financial advisor fees and related costs, incurred in connection with evaluating and consummating investment opportunities, regardless of whether such transactions are ultimately consummated by the parties thereto.
 
The Company will not reimburse ACREM for the salaries and other compensation of its personnel, except for the allocable share of the salaries and other compensation of the Company’s (a) Chief Financial Officer, based on the percentage of his time spent on the Company’s affairs and (b) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of ACREM or its affiliates who spend all or a portion of their time managing the Company’s affairs based on the percentage of their time spent on the Company’s affairs. The Company is also required to pay its pro-rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of ACREM and its affiliates that are required for the Company’s operations.
 
Certain of the Company’s subsidiaries, along with the Company’s lenders under certain of the Company’s Secured Funding Agreements, as well as under the CLO transaction have entered into various servicing agreements with ACREM’s subsidiary servicer, Ares Commercial Real Estate Servicer LLC (“ACRES”). The Company’s Manager will specially service, as needed, certain of the Company’s investments. Effective May 1, 2012, ACRES agreed that no servicing fees pursuant to
these servicing agreements would be charged to the Company or its subsidiaries by ACRES or the Manager for so long as the Management Agreement remains in effect, but that ACRES will continue to receive reimbursement for overhead related to servicing and operational activities pursuant to the terms of the Management Agreement.

The term of the Management Agreement ends on April 25, 2023, with automatic one-year renewal terms thereafter. Except under limited circumstances, upon a termination of the Management Agreement, the Company will pay ACREM a termination fee equal to three times the average annual base management fee and incentive fee received by ACREM during the 24-month period immediately preceding the most recently completed fiscal quarter prior to the date of termination, each as described above.

The following table summarizes the related party costs incurred by the Company for the years ended December 31, 2022, 2021 and 2020 and amounts payable to the Company’s Manager as of December 31, 2022 and 2021 ($ in thousands):
IncurredPayable
For the years ended December 31,As of December 31,
20222021202020222021
Affiliate Payments
Management fees $11,456 $9,384 $7,323 $3,026 $2,613 
Incentive fees3,442 2,752 836 1,264 830 
General and administrative expenses 3,777 3,016 3,653 1,232 703 
Direct costs(1)165 9 100 58 10 
   Total$18,840 $15,161 $11,912 $5,580 $4,156 
_______________________________

(1)    For the years ended December 31, 2022, 2021 and 2020, direct costs incurred are included within general and administrative expenses in the Company’s consolidated statements of operations.

Investments in Loans

From time to time, the Company may co-invest with other investment vehicles managed by Ares Management or its affiliates, including the Manager, and their portfolio companies, including by means of splitting investments, participating in investments or other means of syndication of investments. For such co-investments, the Company expects to act as the administrative agent for the holders of such investments provided that the Company maintains a majority of the aggregate investment. No fees will be received by the Company for performing such service. The Company will be responsible for its pro-rata share of costs and expenses for such co-investments, including due diligence costs for transactions which fail to close. The Company’s investment in such co-investments are made on a pari-passu basis with the other Ares managed investment vehicles and the Company is not obligated to provide, nor has it provided, any financial support to the other Ares managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment and the Company recognizes only the carrying value of its investment in its consolidated balance sheets. As of December 31, 2022 and 2021, the total outstanding principal balance for co-investments held by the Company was $213.7 million and $158.3 million, respectively.

Loan Purchases From Affiliate

An affiliate of the Company’s Manager maintains a $200.0 million real estate debt warehouse investment vehicle (the “Ares Warehouse Vehicle”) that holds Ares Management originated commercial real estate loans, which are made available to purchase by other investment vehicles, including the Company and other Ares Management managed investment vehicles. From time to time, the Company may purchase loans from the Ares Warehouse Vehicle. The Company’s Manager will approve the purchase of such loans only on terms, including the consideration to be paid, that are determined by the Company’s Manager in good faith to be appropriate for the Company once the Company has sufficient liquidity. The Company is not obligated to purchase any loans originated by the Ares Warehouse Vehicle. In addition, from time to time, the Company may purchase loans, including participations in loans, from other Ares Management managed investment vehicles. Loans purchased by the Company from the Ares Warehouse Vehicle or other Ares Management managed investment vehicles are purchased at fair value as determined by an independent third-party valuation expert and are subject to approval by a majority of the Company’s independent directors. No loans were purchased by the Company from the Ares Warehouse Vehicle for the year ended December 31, 2022.
v3.22.4
DIVIDENDS AND DISTRIBUTIONS
 12 Months Ended
Dec. 31, 2022
DIVIDENDS AND DISTRIBUTIONS  
DIVIDENDS AND DISTRIBUTIONS DIVIDENDS AND DISTRIBUTIONS
The following table summarizes the Company’s dividends declared during the years ended December 31, 2022, 2021 and 2020 ($ in thousands, except per share data):

Date DeclaredRecord DatePayment DatePer Share AmountTotal Amount
November 2, 2022December 30, 2022January 18, 2023$0.35 (1)$19,347 
July 29, 2022September 30, 2022October 17, 20220.35 (1)19,196 
May 3, 2022June 30, 2022July 15, 20220.35 (1)19,198 
February 15, 2022March 31, 2022April 14, 20220.35 (1)16,740 
Total cash dividends declared for the year ended December 31, 2022
$1.40 $74,481 
November 3, 2021December 31, 2021January 19, 2022$0.35 (1)$16,674 
July 30, 2021September 30, 2021October 15, 20210.35 (1)16,524 
May 4, 2021June 30, 2021July 15, 20210.35 (1)16,528 
February 17, 2021March 31, 2021April 15, 20210.35 (1)14,248 
Total cash dividends declared for the year ended December 31, 2021
$1.40 $63,974 
December 15, 2020December 30, 2020January 15, 2021$0.33 $11,124 
September 16, 2020September 30, 2020October 15, 20200.33 11,072 
June 19, 2020June 30, 2020July 15, 20200.33 11,072 
February 20, 2020March 31, 2020April 15, 20200.33 11,057 
Total cash dividends declared for the year ended December 31, 2020$1.32 $44,325 
(1) Consists of a regular cash dividend of $0.33 and a supplemental cash dividend of $0.02.
v3.22.4
VARIABLE INTEREST ENTITIES
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
VARIABLE INTEREST ENTITIES VARIABLE INTEREST ENTITIES
Consolidated VIEs

As discussed in Note 2, the Company evaluates all of its investments and other interests in entities for consolidation, including its investments in the CLO Securitizations (as defined below), which are considered to be variable interests in VIEs.

CLO Securitizations

On January 11, 2019, ACRE Commercial Mortgage 2017-FL3 Ltd. (the “FL3 Issuer”) and ACRE Commercial Mortgage 2017-FL3 LLC (the “FL3 Co-Issuer”), both wholly-owned indirect subsidiaries of the Company, entered into an Amended and Restated Indenture (the “FL3 Amended Indenture”) with Wells Fargo Bank, National Association, as advancing agent and note administrator, and Wilmington Trust, National Association, as trustee, which governs the approximately $504.1 million principal balance of secured floating rate notes (the “FL3 Notes”) issued by the FL3 Issuer and $52.9 million of preferred equity in the FL3 Issuer (the “FL3 CLO Securitization”). The FL3 Amended Indenture amends and restates, and replaces in its entirety, the indenture for the CLO securitization issued in March 2017, which governed the issuance of approximately $308.8 million principal balance of secured floating rate notes and $32.4 million of preferred equity in the FL3 Issuer.

As of December 31, 2022, the FL3 Notes were collateralized by interests in a pool of 16 mortgage assets having a total principal balance of $429.4 million (the “FL3 Mortgage Assets”) that were closed by a wholly-owned subsidiary of the Company and approximately $127.6 million of receivables related to repayments of outstanding principal on previous mortgage assets. As of December 31, 2021, the FL3 Notes were collateralized by interests in a pool of 16 mortgage assets having a total principal balance of approximately $451.6 million that were closed by a wholly-owned subsidiary of the Company and approximately $105.4 million of receivables related to repayments of outstanding principal on previous mortgage assets. On
April 13, 2021, the FL3 Issuer and the FL3 Co-Issuer entered into a First Supplement to Amended and Restated Indenture (the “2021 Amended Indenture”) with Wells Fargo Bank, National Association, as advancing agent and note administrator, and Wilmington Trust, National Association, as trustee, which governs the FL3 CLO Securitization. The purpose of the 2021 Amended Indenture was to, among other things, extend the reinvestment period to March 31, 2024. During the reinvestment period, the Company may direct the FL3 Issuer to acquire additional mortgage assets meeting applicable reinvestment criteria using the principal repayments from the FL3 Mortgage Assets, subject to the satisfaction of certain conditions, including receipt of a Rating Agency Confirmation and investor approval of the new mortgage assets.
 
The contribution of the FL3 Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement between the Seller and the FL3 Issuer, and acknowledged by the Company solely for purposes of confirming its status as a REIT, in which the Seller made certain customary representations, warranties and covenants.
 
In connection with the securitization, the FL3 Issuer and FL3 Co-Issuer offered and issued the following classes of Notes: Class A, Class A-S, Class B, Class C and Class D Notes (collectively, the “FL3 Offered Notes”) to a third party. The Company retained (through one of its wholly-owned subsidiaries) approximately $58.5 million of the FL3 Notes and all of the $52.9 million of preferred equity in the FL3 Issuer, which totaled $111.4 million. The Company, as the holder of the subordinated FL3 Notes and all of the preferred equity in the FL3 Issuer, has the obligation to absorb losses of the CLO, since the Company has a first loss position in the capital structure of the CLO.

On January 28, 2021, ACRE Commercial Mortgage 2021-FL4 Ltd. (the “FL4 Issuer”) and ACRE Commercial Mortgage 2021-FL4 LLC (the “FL4 Co-Issuer”), both wholly owned indirect subsidiaries of the Company, entered into an Indenture (the “FL4 Indenture”) with ACRC Lender LLC, a wholly owned subsidiary of the Company (the “Seller”), as advancing agent, Wells Fargo Bank, National Association, as note administrator, and Wilmington Trust, National Association, as trustee, which governs the issuance of approximately $603.0 million principal balance secured floating rate notes (the “FL4 Notes”) and $64.3 million of preferred equity in the FL4 Issuer (the “FL4 CLO Securitization”). For U.S. federal income tax purposes, the FL4 Issuer and FL4 Co-Issuer are disregarded entities.

As of December 31, 2022, the FL4 Notes were collateralized by interests in a pool of 12 mortgage assets having a total principal balance of approximately $458.3 million (the “FL4 Mortgage Assets”) that were closed by a wholly-owned subsidiary of the Company and approximately $1.9 million of receivables related to repayments of outstanding principal on previous mortgage assets. As of December 31, 2021, the FL4 Notes were collateralized by interests in a pool of 17 mortgage assets having a total principal balance of approximately $522.8 million that were closed by a wholly-owned subsidiary of the Company and approximately $23.2 million of receivables related to repayments of outstanding principal on previous mortgage assets. During the period ending in April 2024 (the “Companion Participation Acquisition Period”), the FL4 Issuer may use certain principal proceeds from the FL4 Mortgage Assets to acquire additional funded pari-passu participations related to the FL4 Mortgage Assets that meet certain acquisition criteria.

The sale of the FL4 Mortgage Assets to the FL4 Issuer is governed by a FL4 Mortgage Asset Purchase Agreement between the Seller and the FL4 Issuer, and acknowledged by the Company solely for purposes of confirming its status as a REIT, in which the Seller made certain customary representations, warranties and covenants.

In connection with the FL4 CLO Securitization, the FL4 Issuer and FL4 Co-Issuer offered and issued the following classes of FL4 Notes to third party investors: Class A, Class A-S, Class B, Class C, Class D and Class E Notes (collectively, the “FL4 Offered Notes”). A wholly owned subsidiary of the Company retained approximately $62.5 million of the FL4 Notes and all of the $64.3 million of preferred equity in the FL4 Issuer, which totaled $126.8 million. The Company, as the holder of the subordinated FL4 Notes and all of the preferred equity in the FL4 Issuer, has the obligation to absorb losses of the FL4 CLO Securitization, since the Company has a first loss position in the capital structure of the FL4 CLO Securitization. During the year ended December 31, 2022, the Company paid down $85.9 million of the FL4 Offered Notes.
 
The FL3 CLO Securitization and the FL4 CLO Securitization are collectively referred to as the “CLO Securitizations.” As the directing holder of the CLO Securitizations, the Company has the ability to direct activities that could significantly impact the CLO Securitizations’ economic performance. ACRES is designated as special servicer of the CLO Securitizations and has the power to direct activities during the loan workout process on defaulted and delinquent loans, which is the activity that most significantly impacts the CLO Securitizations’ economic performance. ACRES did not waive the special servicing fee, and the Company pays its overhead costs. If an unrelated third party had the right to unilaterally remove the special servicer, then the Company would not have the power to direct activities that most significantly impact the CLO Securitizations’ economic performance. In addition, there were no substantive kick-out rights of any unrelated third party to remove the special servicer without cause. The Company’s subsidiaries, as directing holders, have the ability to remove the
special servicer without cause. Based on these factors, the Company is determined to be the primary beneficiary of each of the CLO Securitizations; thus, the CLO Securitizations are consolidated into the Company’s consolidated financial statements.

The CLO Securitizations are consolidated in accordance with FASB ASC Topic 810 and are structured as pass through entities that receive principal and interest on the underlying collateral and distributes those payments to the note holders, as applicable. The assets and other instruments held by the CLO Securitizations are restricted and can only be used to fulfill the obligations of the respective CLO Securitizations. Additionally, the obligations of the CLO Securitizations do not have any recourse to the general credit of any other consolidated entities, nor to the Company as the primary beneficiary.
The inclusion of the assets and liabilities of the CLO Securitizations of which the Company is deemed the primary beneficiary has no economic effect on the Company. The Company’s exposure to the obligations of the CLO Securitizations are generally limited to its investment in the entity. The Company is not obligated to provide, nor has it provided, any financial support for the consolidated structures. As such, the risk associated with the Company’s involvement in the CLO Securitizations are limited to the carrying value of its investment in each of the entities. As of December 31, 2022, the Company’s maximum risk of loss was $238.2 million, which represents the carrying value of its investments in the CLO Securitizations.
v3.22.4
SUBSEQUENT EVENTS
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTS
The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this annual report on Form 10-K or would be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2022, except as disclosed below.

In January 2023, the senior mortgage loan held by the Company on an office property located in Illinois was not repaid upon its contractual maturity, which triggered an event of default under the loan agreement. As of February 14, 2023, the outstanding principal balance of the senior Illinois loan is $27.2 million.

In January 2023, the senior mortgage loan held by the Company on a mixed-use property located in California did not receive the January interest payment, which triggered an event of default under the loan agreement. As of February 14, 2023, the outstanding principal balance of the senior California loan is $37.9 million.

In January 2023, the Company sold the senior loan collateralized by a residential property in California and was in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the maturity date. The Company sold the loan at an all-cash price of $10.0 million, with estimated net proceeds of $9.8 million.

In February 2023, the senior mortgage loan held by the Company on a mixed-use property located in Florida was not repaid upon its contractual maturity, which triggered an event of default under the loan agreement. As of February 14, 2023, the outstanding principal balance of the senior Florida loan is $84.0 million.

The Company’s Board of Directors declared a regular cash dividend of $0.33 per common share and a supplemental cash dividend of $0.02 per common share for the first quarter of 2023. The first quarter 2023 and supplemental cash dividends will be payable on April 18, 2023 to common stockholders of record as of March 31, 2023.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated.
Use of Estimates in the Preparation of Financial Statements
Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, labor shortages and challenges in the supply chain, have the potential to negatively impact the Company and its borrowers. These current macroeconomic conditions may continue or aggravate and could cause the United States economy or other global economies to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States or other major global economy.

The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2022, however, uncertainty over the global economy and the Company’s business, makes any estimates and assumptions as of December 31, 2022 inherently less certain than they would be absent the current and potential impacts of current macroeconomic conditions. Actual results could differ from those estimates.
Variable Interest Entities
Variable Interest Entities

The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE.
 
To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE.

To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company.

For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements.

The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. See Note 16 included in these consolidated financial statements for further discussion of the Company’s VIEs.
Cash and Cash Equivalents
Cash and Cash Equivalents

Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short‑term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and statements of cash flows.
Concentration of Credit Risk
Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, loans held for investment, available-for-sale debt securities and interest receivable. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the Federal Deposit Insurance Corporation insured limit. The Company has exposure to credit risk on its loans held for investment and available-for-sale debt securities. The Company and the Company’s Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non‑recourse financing, when and where available and appropriate.
Loans Held for Investment
Loans Held for Investment

    The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs (the “carrying value”). Loans are generally collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its loans held for investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors.

    Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
    Loan balances that are deemed to be uncollectible are written off as a realized loss and are deducted from the current expected credit loss reserve. The write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment.
Current Expected Credit Losses Current Expected Credit Losses Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requires the Company to reflect current expected credit losses (“CECL”) on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broad range of historical experience adjusted for current conditions and reasonable and supportable forecast information to inform credit loss estimates (the “CECL Reserve”). ASU No. 2016-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. ASU No. 2016-13 was adopted by the Company on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of January 1, 2020. Subsequent period increases and decreases to expected credit losses impact earnings and are recorded within provision for current expected credit losses in the Company’s consolidated statements of operations. The CECL Reserve related to outstanding balances on loans held for investment required under ASU No. 2016-13 is a valuation account that is deducted from the amortized cost basis of the Company’s loans held for investment in the Company’s consolidated balance sheets. The CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets. See Note 4 included in these consolidated financial statements for CECL related disclosures.
Real Estate Owned
Real Estate Owned

    Real estate 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 land, building, furniture, fixtures and equipment.

    Real estate 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 asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred.

    Real estate assets are evaluated for indicators of impairment on a quarterly basis. Factors that the Company may consider in its impairment analysis include, among others: (1) significant underperformance relative to historical or anticipated operating results; (2) significant negative industry or economic trends; (3) costs necessary to extend the life or improve the real
estate asset; (4) significant increase in competition; and (5) ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows expected to be generated by the real estate asset over the estimated remaining holding period is less than the carrying amount of such real estate asset. Cash flows include operating cash flows and anticipated capital proceeds generated by the real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon the Company’s estimate of a capitalization rate and discount rate.

    The Company reviews its real estate assets, from time to time, in order to determine whether to sell such assets. Real estate assets are classified as held for sale when the Company commits to a plan to sell the asset, when the asset is being actively marketed for sale at a reasonable price and the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year. Real estate assets that are held for sale are carried at the lower of the asset’s carrying amount or its fair value less costs to sell.
Available-for-Sale Debt Securities
Available-for-Sale Debt Securities

The Company acquires debt securities that are collateralized by mortgages on CRE properties primarily for short-term cash management and investment purposes. On the acquisition date, the Company designates investments in CRE debt securities as available-for-sale. Investments in CRE debt securities that are classified as available-for-sale are carried at fair value. Unrealized holding gains and losses for available-for-sale debt securities are recorded each period in other comprehensive income (“OCI”). The Company uses a specific identification method when determining the cost of a debt security sold and the amount of unrealized gain or loss reclassified from accumulated other comprehensive income (loss) into earnings.

Available-for-sale debt securities that are in an unrealized loss position are evaluated on a quarterly basis to determine whether declines in the fair value below the amortized cost basis qualify as other than temporary impairment (“OTTI”). The OTTI assessment is performed at the individual security level. In assessing whether the entire amortized cost basis of each security will be recovered, the Company will compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, the entire amortized cost basis of the security will not be recovered and an OTTI shall be considered to have occurred.
Available-for-sale debt securities are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the debt security is placed on non-accrual status. Interest payments received on non-accrual securities may be recognized as income or applied to principal depending upon management’s judgment regarding collectability of the debt security. Non-accrual debt securities are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current.
Debt Issuance Costs
Debt Issuance Costs

Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense, except as noted below, in the Company’s consolidated statements of operations while the unamortized balance on the (i) Secured Funding Agreements (each individually defined in Note 6 included in these consolidated financial statements) is included within other assets and (ii) Notes Payable, the Secured Term Loan (each defined in Note 6 included in these consolidated financial statements) and secured borrowings (described in Note 7 included in these consolidated financial statements) and debt securitizations are each included as a reduction to the carrying amount of the liability in the Company’s consolidated balance sheets. Amortization of debt issuance costs for the note payable on the hotel property that was recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable) is included within expenses from real estate owned in the Company’s consolidated statements of operations.
Derivative Financial Instruments
Derivative Financial Instruments

Derivative financial instruments are classified as either other assets (gain positions) or other liabilities (loss positions) in the Company’s consolidated balance sheets at fair value. These amounts may be offset to the extent that there is a legal right to offset and if elected by management.

On the date the Company enters into a derivative contract, the Company designates each contract as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, or as a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, the Company formally documents the hedge relationships and designation at the contract’s inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and an evaluation of the effectiveness of its hedged transaction.

The Company performs a formal assessment on a quarterly basis on whether the derivative designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. Changes in the fair value of derivative contracts are recorded each period in either current earnings or OCI, depending on whether the derivative is designated as part of a hedge transaction and, if so, the type of hedge transaction. For derivatives that are designated as cash flow hedges, the effective portion of the unrealized gains or losses on these contracts is recorded in OCI. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in current earnings prospectively. The Company does not enter into derivatives for trading or speculative purposes.
Revenue Recognition
Revenue Recognition

    Interest income is accrued based on the outstanding principal amount and the contractual terms of each loan or debt security. For loans held for investment, the origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income over the initial loan term as a yield adjustment using the effective interest method. For available-for-sale debt securities, premiums or discounts are amortized or accreted into interest income as a yield adjustment using the effective interest method.

    Revenue from real estate owned represents revenue associated with the operations of a hotel property classified as real estate owned that was sold in March 2022. Revenue from the operation of the hotel property was recognized when guestrooms were occupied, services had been rendered or fees had been earned. Revenues were recorded net of any discounts and sales and other taxes collected from customers. Revenues consisted of room sales, food and beverage sales and other hotel revenues.
Net Interest Margin and Interest Expense Net Interest Margin and Interest Expense    Net interest margin in the Company’s consolidated statements of operations serves to measure the performance of the Company’s loans and debt securities as compared to its use of debt leverage. The Company includes interest income from its loans and debt securities and interest expense related to its Secured Funding Agreements, Notes Payable, securitization debt, the Secured Term Loan (each individually defined in Note 6 included in these consolidated financial statements) and secured borrowings (described in Note 7 included in these consolidated financial statements) in net interest margin.
Income Taxes
Income Taxes

The Company has elected and qualified for taxation as a REIT commencing with its taxable year ended December 31, 2012. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally pay United States federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes annually to its stockholders at least 90% of the Company’s REIT taxable income prior to the deduction for dividends paid. To the extent that the Company distributes less than 100% of its REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), the Company will pay tax at regular corporate rates on that undistributed portion. Furthermore, if the Company distributes less than the sum of 1) 85% of its ordinary income for the calendar year, 2) 95% of its capital gain net income for the calendar year, and 3) any undistributed shortfall from its prior calendar year (the “Required Distribution”) to its stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then it is required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if the Company elects to retain any of its net capital gain for any tax year, it must notify its stockholders and pay tax at regular corporate rates on the retained net capital gain. The stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that the Company’s estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, the Company accrues excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K.

The Company formed a wholly-owned subsidiary, ACRC Lender W TRS LLC (“ACRC W TRS”), in December 2013 in order to issue and hold certain loans intended for sale. The Company also formed a wholly-owned subsidiary, ACRC 2017-FL3 TRS LLC (“FL3 TRS”), in March 2017 in order to hold a portion of the CLO Securitizations (as defined below), including the portion that generates excess inclusion income. Additionally, the Company also formed a wholly-owned subsidiary, ACRC WM Tenant LLC (“ACRC WM”), in March 2019 in order to lease the hotel property classified as real estate owned, which was acquired on March 8, 2019. Entity classification elections to be taxed as a corporation and taxable REIT subsidiary (“TRS”) elections were made with respect to ACRC W TRS, FL3 TRS and ACRC WM. A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. For financial reporting purposes, a provision for current and deferred taxes has been established for the portion of the Company’s GAAP consolidated earnings recognized by ACRC W TRS, FL3 TRS and ACRC WM. The income tax provision is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K.

FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of December 31, 2022 and 2021, based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. ACRC W TRS, FL3 TRS and ACRC WM recognize interest and penalties, if any, related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets.
Comprehensive Income Comprehensive Income Comprehensive income consists of net income and OCI that are excluded from net income.
Stock-based Compensation
Stock-Based Compensation

The Company recognizes the cost of stock‑based compensation, which is included within general and administrative expenses in the Company’s consolidated statements of operations. The fair value of the time vested restricted stock or restricted stock units (“RSUs”) granted is recorded to expense on a straight‑line basis over the vesting period for the award, with an offsetting increase in stockholders’ equity. For grants to directors and officers and employees of the Manager, the fair value is determined based upon the market price of the stock on the grant date.
Earnings per Share
Earnings per Share

The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common stockholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP. Diluted earnings (loss) per share takes into effect any dilutive instruments, such as restricted stock, RSUs and convertible debt, except when doing so would be anti‑dilutive. See Note 11 included in these consolidated financial statements for the earnings per share calculations.
Recent Accounting Pronouncements
Recent Accounting Pronouncements

    In March 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 optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. ASU No. 2020-04 and ASU No. 2021-01 are effective for all entities and may be adopted retrospectively as of any date from the beginning of any interim period that includes or is subsequent to March 12, 2020. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848) to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company elected to adopt the new guidance and, for the modifications that have occurred to date, the adoption of the guidance has not had a material impact on the Company’s consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance on troubled debt restructurings (“TDRs”) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under Topic 326 and adds enhanced disclosures for creditors with respect to loan refinancing and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 supersedes the accounting guidance for TDRs for creditors in its entirety and requires entities to evaluate all receivable modifications to determine whether a modification made to a borrower results in a new loan or a continuation of the existing loan. The Company elected to adopt the ASU for modifications occurring prospectively beginning in the first quarter of 2022.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Schedule of interest expense For the years ended December 31, 2022, 2021 and 2020, interest expense is comprised of the following ($ in thousands):
For the years ended December 31,
 202220212020
Secured funding agreements $33,602 $16,403 $28,003 
Notes payable (1)3,410 2,275 1,317 
Securitization debt29,341 20,104 12,384 
Secured term loan7,028 4,353 7,114 
Secured borrowings845 6,145 3,131 
Other (2)(8,232)800 — 
Interest expense$65,994 $50,080 $51,949 
____________________________(1)    Excludes interest expense on the $28.3 million note payable, which was secured by a hotel property that was recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable). Interest expense on the $28.3 million note payable is included within expenses from real estate owned in the Company’s consolidated statements of operations.(2)    Represents the net interest expense recognized from the Company’s derivative financial instruments upon periodic settlement.
v3.22.4
LOANS HELD FOR INVESTMENT (Tables)
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
Schedule of loans held for investments
The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of December 31, 2022 and 2021 ($ in thousands):

 As of December 31, 2022
Carrying Amount (1)Outstanding Principal (1)Weighted Average Unleveraged Effective YieldWeighted Average Remaining Life (Years)
Senior mortgage loans $2,225,725 $2,243,818 8.4 %(2)8.8 %(3)1.3
Subordinated debt and preferred equity investments38,283 39,003 14.0 %(2)14.0 %(3)2.8
Total loans held for investment portfolio $2,264,008 $2,282,821 8.5 %(2)8.9 %(3)1.4

 As of December 31, 2021
Carrying Amount (1)Outstanding Principal (1)Weighted Average Unleveraged Effective YieldWeighted Average Remaining Life (Years)
Senior mortgage loans $2,397,655 $2,411,718 5.3 %(2)5.4 %(3)1.5
Subordinated debt and preferred equity investments16,728 17,394 13.7 %(2)13.7 %(3)4.0
Total loans held for investment portfolio$2,414,383 $2,429,112 5.4 %(2)5.5 %(3)1.6
______________________________

(1)The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs.
(2)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2022 and 2021 as weighted by the outstanding principal balance of each loan.
(3)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all interest accruing loans held by the Company as of December 31, 2022 and 2021 as weighted by the total outstanding principal balance of each interest accruing loan (excludes loans on non-accrual status as of December 31, 2022 and 2021).
Schedule of current investment portfolio
A more detailed listing of the Company’s loans held for investment portfolio based on information available as of December 31, 2022 is as follows ($ in millions, except percentages):
Loan TypeLocationOutstanding Principal (1)Carrying Amount (1)Interest RateUnleveraged Effective Yield (2)Maturity Date (3)Payment Terms (4)
Senior Mortgage Loans:
OfficeIL$151.5$151.4L+3.60%8.3%Mar 2023I/O
MultifamilyNY130.6129.3S+3.90%8.7%Jun 2025I/O
OfficeDiversified118.0117.7S+3.75%8.5%Jan 2024(5)I/O
MultifamilyTX100.099.2S+3.50%8.2%Jul 2025I/O
IndustrialIL98.297.8L+4.55%9.4%May 2024I/O
Mixed-useFL84.084.0L+4.25%8.6%Feb 2023I/O
OfficeAZ77.476.8L+3.50%8.3%Oct 2024I/O
Mixed-useNY75.074.6L+3.65%8.4%Jul 2024I/O
Residential CondominiumFL72.572.3L+5.25%10.2%Jul 2023I/O
Residential CondominiumNY72.271.7S+8.95%15.3%Oct 2023(6)I/O
OfficeNC69.169.0L+4.25%9.0%Mar 2023(7)P/I(8)
OfficeNY68.267.6L+3.85%8.6%Aug 2025I/O
MultifamilyTX67.967.4L+2.85%7.6%Dec 2024I/O
Multifamily/OfficeSC67.066.8L+2.90%7.6%Nov 2024I/O
OfficeNC66.566.0S+3.65%8.5%Aug 2024I/O
OfficeIL56.955.0S+3.95%—%Jun 2023(9)I/O
OfficeIL56.055.5S+4.25%9.1%Jan 2025I/O
OfficeGA48.748.6S+3.15%7.8%Dec 2023(10)I/O
HotelCA40.040.0L+4.12%9.0%Jan 2023I/O
HotelCA39.539.1S+4.20%9.0%Mar 2025I/O
Mixed-useCA37.937.9L+4.10%9.1%Mar 2023I/O
Mixed-useTX35.335.2S+3.85%(11)8.5%Sep 2024(11)I/O
HotelIL35.029.8S+4.00%—%(12)May 2024(12)I/O
Student HousingCA34.534.5S+3.95%8.3%Jul 2023(13)I/O
HotelNY34.033.5S+4.40%9.2%Mar 2026I/O
OfficeCA33.233.1L+3.35%8.5%Mar 2023(14)I/O
MultifamilyCA31.731.5L+2.90%7.6%Dec 2025I/O
OfficeIL30.230.2L+3.80%8.8%Jan 2023I/O
MultifamilyPA29.329.3S+4.00%(15)8.6%Dec 2023(15)I/O
IndustrialFL25.525.4L+2.90%7.6%Dec 2025I/O
IndustrialCO24.524.5(16)12.2%Feb 2023I/O
OfficeMA23.723.0S+3.75%9.6%Apr 2025I/O
IndustrialNJ23.323.1L+3.75%8.9%May 2024I/O
MultifamilyWA23.123.0L+2.90%7.5%Nov 2025I/O
OfficeCA22.822.8S+3.50%8.1%Nov 2023I/O
MultifamilyTX22.222.1L+2.50%7.3%Oct 2024I/O
IndustrialCA19.619.6L+3.75%8.7%Mar 2023I/O
Student HousingAL19.519.4L+3.85%8.6%May 2024I/O
MultifamilyWA18.818.7L+3.00%7.8%Mar 2023I/O
Self StoragePA17.917.7L+2.90%7.6%Dec 2025I/O
Self StorageNJ17.617.3S+2.90%8.0%Apr 2025I/O
ResidentialCA14.314.313.00%—%(17)May 2021(17)I/O
Self StorageWA11.511.3S+2.90%8.0%Mar 2025I/O
IndustrialTX10.410.3L+5.25%10.0%Dec 2024I/O
IndustrialFL9.59.4L+4.75%10.7%Nov 2024I/O
Self StorageMA8.58.5L+2.90%7.5%Dec 2024I/O
IndustrialPA8.08.0L+5.50%10.3%Sep 2024I/O
Self StorageTX8.08.0L+2.90%7.5%Aug 2024I/O
Self StorageMA7.77.7L+2.90%7.5%Nov 2024I/O
IndustrialPA7.06.9L+5.90%10.7%Nov 2024I/O
IndustrialTN6.76.6L+5.50%10.3%Nov 2024I/O
Self StorageMA6.56.5L+2.90%7.5%Oct 2024I/O
Self StorageMO6.56.5L+3.00%7.5%Dec 2023I/O
Self StorageNJ5.95.9L+2.90%7.7%Jul 2024I/O
Self StorageIL5.65.6L+3.00%7.7%Dec 2023I/O
IndustrialFL4.74.6S+5.75%10.5%Mar 2025I/O
Self StorageTX2.92.9L+2.90%7.4%Sep 2024I/O
IndustrialGA1.31.3L+5.25%10.0%Sep 2024I/O
Subordinated Debt and Preferred
Equity Investments:
MultifamilySC20.620.4S+9.53%14.3%Sep 2025I/O
OfficeNJ18.417.912.00%13.6%Jan 2026I/O
Total/Weighted Average $2,282.8$2,264.08.5%
_________________________

(1)The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 14 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Amount and Outstanding Principal held by the Company is reflected.
(2)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR or SOFR as of December 31, 2022 or the LIBOR or SOFR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2022 as weighted by the outstanding principal balance of each loan.
(3)Certain loans are subject to contractual extension options that generally vary between one and two 12-month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.
(4)I/O = interest only, P/I = principal and interest.
(5)In December 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior diversified loan to January 2024.
(6)This senior mortgage loan refinanced the previously existing $53.3 million senior mortgage loan that was held by the Company. The senior New York loan is currently in default due to the failure of the borrower to reach certain construction milestones.
(7)In March 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior North Carolina loan to March 2023.
(8)In April 2022, amortization began on the senior North Carolina loan, which had an outstanding principal balance of $69.1 million as of December 31, 2022. The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms.
(9)Loan was on non-accrual status as of December 31, 2022 and the Unleveraged Effective Yield is not applicable. In May 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 3.95% to S + 3.95% and extend the maturity date on the senior Illinois loan from June 2022 to June 2023. For the year ended December 31, 2022, the Company received $3.5 million of interest payments in cash on the senior Illinois loan that was recognized either as interest income or as a reduction to the carrying value of the loan and the borrower is current on all contractual interest payments.
(10)In October 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Georgia loan to December 2023.
(11)In September 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 3.75% to S + 3.85% and extend the maturity date on the senior Texas loan from September 2022 to September 2024.
(12)Loan was on non-accrual status as of December 31, 2022 and the Unleveraged Effective Yield is not applicable. In March 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 4.40% to S + 4.00% and extend the maturity date on the senior Illinois loan from May 2022 to May 2024. For the year ended December 31, 2022, the Company received $1.8 million of interest payments in cash on the senior Illinois loan that was recognized either as interest income or as a reduction to the carrying value of the loan and the borrower is current on all contractual interest payments. However, the senior Illinois loan is currently in default due to the failure of the borrower to make certain contractual reserve deposits by the May 2022 due date.
(13)In May 2022, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior California loan to July 2023.
(14)In November 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan from November 2022 to March 2023.
(15)In December 2022, the Company and the borrower entered into a modification and extension agreement to, among other things, amend the interest rate from L + 3.00% to S + 4.00% and extend the maturity date on the senior Pennsylvania loan from December 2022 to December 2023.
(16)At origination, the Colorado loan was structured as a senior loan and in January 2022, the Company also originated the mezzanine loan. The senior loan, which had an outstanding principal balance of $20.8 million as of December 31, 2022, accrues interest at a per annum rate of L + 6.75% and the mezzanine loan, which had an outstanding principal balance of $3.8 million as of December 31, 2022, accrues interest at a per annum rate of S + 8.50%.
(17)Loan was on non-accrual status as of December 31, 2022 and the Unleveraged Effective Yield is not applicable. As of December 31, 2022, the senior California loan, which is collateralized by a residential property, is in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the May 2021 maturity date. As of December 31, 2022, the Company has elected to assign a specific CECL reserve on the senior California loan. See Note 4 included in these consolidated financial statements for more information. See Note 17 included in these consolidated financial statements for a subsequent event related to the senior California loan.
Schedule of activity in loan portfolio
For the years ended December 31, 2022 and 2021, the activity in the Company’s loan portfolio was as follows ($ in thousands):
Balance at December 31, 2020$1,815,219 
Initial funding1,166,100 
Origination fees and discounts, net of costs(12,192)
Additional funding93,973 
Amortizing payments(2,586)
Loan payoffs(654,564)
Origination fee and discount accretion8,433 
Balance at December 31, 2021$2,414,383 
Initial funding578,652 
Origination fees and discounts, net of costs(9,577)
Additional funding 96,057 
Amortizing payments(4,333)
Loan payoffs(821,513)
Origination fee and discount accretion 10,339 
Balance at December 31, 2022$2,264,008 
v3.22.4
CURRENT EXPECTED CREDIT LOSSES (Tables)
 12 Months Ended
Dec. 31, 2022
Credit Loss [Abstract]  
Financing receivable, allowance for credit loss Activity related to the CECL Reserve for outstanding balances on the Company’s loans held for investment as of and for the years ended December 31, 2022 and 2021 was as follows ($ in thousands):
Balance at December 31, 2020 (1)
$23,604 
Provision for current expected credit losses335
Write-offs—
Recoveries—
Balance at December 31, 2021 (1)
$23,939 
Provision for current expected credit losses42,030 
Write-offs— 
Recoveries— 
Balance at December 31, 2022 (1)
$65,969 
__________________________

(1)     The CECL Reserve related to outstanding balances on loans held for investment is recorded within current expected credit loss reserve in the Company's consolidated balance sheets.

Current Expected Credit Loss Reserve for Unfunded Loan Commitments    

    Activity related to the CECL Reserve for unfunded commitments on the Company’s loans held for investment as of and for the years ended December 31, 2022 and 2021 was as follows ($ in thousands):
Balance at December 31, 2020 (1)
$1,633 
Provision for current expected credit losses(325)
Write-offs— 
Recoveries— 
Balance at December 31, 2021 (1)
$1,308 
Provision for current expected credit losses4,031 
Write-offs— 
Recoveries — 
Balance at December 31, 2022 (1)
$5,339 
__________________________

(1)     The CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets.
Schedule of company loan risk definitions Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:
Ratings    Definition
1Very Low Risk
2Low Risk
3Medium Risk
4High Risk/Potential for Loss: Asset performance is trailing underwritten expectations. Loan at risk of impairment without material improvement to performance
5Impaired/Loss Likely: A loan that has a significantly increased probability of default and principal loss
Financing receivable credit quality indicators As of December 31, 2022, the carrying value, excluding the CECL Reserve, of the Company’s loans held for investment within each risk rating by year of origination is as follows ($ in thousands):
20222021202020192018PriorTotal
Risk rating:
1$13,536$27,684$—$—$—$—$41,220
234,706323,544——22,80234,460415,512
3442,153461,706136,456256,35929,28040,0001,365,954
471,709—189,34863,28984,80717,845426,998
5————14,324—14,324
Total$562,104$812,934$325,804$319,648$151,213$92,305$2,264,008
v3.22.4
REAL ESTATE OWNED (Tables)
 12 Months Ended
Dec. 31, 2022
Real Estate Owned [Abstract]  
Schedule of real estate properties
The following table summarizes the Company’s real estate owned as of December 31, 2021 ($ in thousands):
Land$10,200 
Buildings and improvements24,281 
Furniture, fixtures and equipment4,506 
38,987 
Less: Accumulated depreciation (2,385)
Real estate owned, net$36,602 
v3.22.4
DEBT (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Schedule of outstanding balances and total commitments under financing agreements As of December 31, 2022 and 2021, the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands):
As of December 31,
20222021
Outstanding BalanceTotal
Commitment		Outstanding BalanceTotal
Commitment
Secured Funding Agreements:
Wells Fargo Facility$270,798 $450,000 (1)$399,528 $450,000 (1)
Citibank Facility236,240 325,000 192,970 325,000 
CNB Facility— 75,000 — 75,000 
MetLife Facility— 180,000 20,648 180,000 
Morgan Stanley Facility198,193 250,000 226,901 250,000 
Subtotal$705,231 $1,280,000 $840,047 $1,280,000 
Notes Payable $105,000 $105,000 $51,110 $51,755 
Secured Term Loan$150,000 $150,000 $150,000 $150,000 
   Total$960,231 $1,535,000 $1,041,157 $1,481,755 
______________________________

(1)The maximum commitment for the Wells Fargo Facility (as defined below) may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee.
Schedule of maturities of long-term debt
At December 31, 2022, approximate principal maturities of the Company’s Financing Agreements are as follows ($ in thousands):
Wells Fargo
Facility		Citibank
Facility		CNB FacilityMetLife FacilityMorgan Stanley FacilityNotes PayableSecured Term LoanTotal
2023$— $— $— $— $— $— $— $— 
2024— — — — 198,193 — — 198,193 
2025270,798 236,240 — — 105,000 — 612,038 
2026— — — — 150,000 150,000 
2027— — — — — — — — 
Thereafter— — — — — — — — 
$270,798 $236,240 $— $— $198,193 $105,000 $150,000 $960,231 
v3.22.4
DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of interest rate derivatives The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of December 31, 2022 and 2021 (notional amount in thousands):
As of
December 31, 2022December 31, 2021
Interest Rate DerivativesNumber of InstrumentsNotional Amount
Rate(1)
IndexWeighted Average Maturity (Years)Number of InstrumentsNotional Amount
Rate(1)
IndexWeighted Average Maturity (Years)
Interest rate swaps1$410,0000.2075%
LIBOR(2)
0.4
1$700,0000.2075%
LIBOR(2)
1.0
Interest rate caps
0(3)
$—— — — 1$220,0000.5000%LIBOR1.0
_______________________________

(1)    Represents fixed rate for interest rate swaps and strike rate for interest rate caps.
(2)    Subject to a 0.00% floor.
(3)    In March 2022, the Company re-calibrated its net exposure to interest rate changes by terminating its interest rate cap derivative, which had a notional amount of $170.0 million on the termination date and a strike rate of 0.50%. For the year ended December 31, 2022, the Company recognized a $2.0 million realized gain within OCI in conjunction with the termination of the interest rate cap. In accordance with ASC 815, the realized gain will be recognized within current earnings over the remaining original term of the interest rate cap derivative as it was designated as an effective hedge. For the year ended December 31, 2022, the Company recognized a realized gain of $1.0 million through a reduction in interest expense, on the termination of the interest rate cap within current earnings.
Schedule of derivative assets at fair value
The following table summarizes the fair value of our derivative financial instruments ($ in thousands):

 
Fair Value of Derivatives in an Asset Position(1) as of
Fair Value of Derivatives in a Liability Position(2) as of
December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Derivatives designated as hedging instruments:
Interest rate derivatives$6,565 $2,979 $— $— 
____________________________

(1)    Included in other assets in the Company’s consolidated balance sheets.
(2)    Included in other liabilities in the Company’s consolidated balance sheets.
v3.22.4
COMMITMENTS AND CONTINGENCIES (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Schedule of loan commitments As of December 31, 2022 and 2021, the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands):
 As of December 31,
20222021
Total commitments $2,510,308 $2,662,853 
Less: funded commitments (2,282,821)(2,429,112)
Total unfunded commitments $227,487 $233,741 
v3.22.4
STOCKHOLDERS' EQUITY (Tables)
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
Schedule of restricted stock award activity
The following tables summarize the (i) non-vested shares of restricted stock and RSUs and (ii) vesting schedule of shares of restricted stock and RSUs for the Company’s directors and officers and employees of the Manager as of December 31, 2022:

Schedule of Non-Vested Share and Share Equivalents
 Restricted Stock Grants—DirectorsRestricted Stock Grants—Officers and Employees of the ManagerRSUs—Officers and Employees of the ManagerTotal
Balance at December 31, 202116,640 25,373 497,161 539,174 
Granted 24,780 — 434,150 458,930 
Vested (25,283)(25,373)(84,776)(135,432)
Forfeited — — (14,063)(14,063)
Balance at December 31, 202216,137 — 832,472 848,609 
Future anticipated vesting schedule of restricted stock awards
Future Anticipated Vesting Schedule
Restricted Stock Grants—DirectorsRestricted Stock Grants—Officers and Employees of the ManagerRSUs—Officers and Employees of the ManagerTotal
202314,052 — 168,274 182,326 
20241,668 — 285,405 287,073 
2025417 — 234,097 234,514 
2026— — 144,696 144,696 
2027— — — — 
Total 16,137 — 832,472 848,609 
Schedule of restricted stock and restricted stock unit, activity
The following table summarizes the restricted stock and RSU compensation expense included within general and administrative expenses in the Company’s consolidated statements of operations, the total fair value of shares vested and the weighted average grant date fair value of the restricted stock and RSUs granted to the Company’s directors and officers and employees of the Manager for the years ended December 31, 2022, 2021 and 2020 ($ in thousands):
 For the years ended December 31,
 2022
2021
2020
Restricted Stock and RSU GrantsRestricted Stock and RSU GrantsRestricted Stock and RSU Grants
DirectorsOfficers and Employees of the ManagerTotalDirectorsOfficers and Employees of the ManagerTotalDirectorsOfficers and Employees of the ManagerTotal
Compensation expense $399 $2,477 $2,876 $329 $1,611 $1,940 $319 $1,020 $1,339 
Total fair value of shares vested (1)338 1,623 1,961 460 1,009 1,469 315 849 1,164 
Weighted average grant date fair value390 4,654 5,044 403 4,255 4,658 292 2,898 3,190 
___________________________

(1)    Based on the closing price of the Company’s common stock on the NYSE on each vesting date.
v3.22.4
EARNINGS PER SHARE (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Schedule of computations of basic and diluted earnings per share
The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2022, 2021 and 2020 ($ in thousands, except share and per share data):

For the years ended December 31,
202220212020
Net income attributable to common stockholders$29,785 $60,460 $21,840 
Divided by:
Basic weighted average shares of common stock outstanding:51,679,744 42,399,613 32,977,462 
Weighted average non-vested restricted stock and RSUs446,512 281,892 219,046 
Diluted weighted average shares of common stock outstanding:52,126,256 42,681,505 33,196,508 
Basic earnings per common share$0.58 $1.43 $0.66 
Diluted earnings per common share$0.57 $1.42 $0.66 
v3.22.4
INCOME TAX (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of components of the TRS's income tax provision
The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2022, 2021 and 2020 ($ in thousands):
For the years ended December 31,
 202220212020
Current $42 $450 $82 
Deferred — — (99)
Excise tax 430 272 369 
   Total income tax expense, including excise tax$472 $722 $352 
v3.22.4
FAIR VALUE (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Debt Securities, Available-for-Sale The following table summarizes the Company’s investments in available-for-sale debt securities as of December 31, 2022 ($ in thousands):
Face AmountAmortized CostUnamortized DiscountUnrealized Gain (Loss), Net
Available-for-sale debt securities$28,000 $27,881 $119 $55 
Fair value, assets measured on recurring basis
The following tables summarize the financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 ($ in thousands):
As of December 31, 2022
Level 1Level 2Level 3Total
Financial assets:
Interest rate derivatives$— $6,565 $— $6,565 
Available-for-sale debt securities$— $27,936 $— $27,936 
Financial liabilities:
Interest rate derivatives$— $— $— $— 

As of December 31, 2021
Level 1Level 2Level 3Total
Financial assets:
Interest rate derivatives$— $2,979 $— $2,979 
Financial liabilities:
Interest rate derivatives$— $— $— $— 
Fair value, liabilities measured on recurring basis
The following tables summarize the financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 ($ in thousands):
As of December 31, 2022
Level 1Level 2Level 3Total
Financial assets:
Interest rate derivatives$— $6,565 $— $6,565 
Available-for-sale debt securities$— $27,936 $— $27,936 
Financial liabilities:
Interest rate derivatives$— $— $— $— 

As of December 31, 2021
Level 1Level 2Level 3Total
Financial assets:
Interest rate derivatives$— $2,979 $— $2,979 
Financial liabilities:
Interest rate derivatives$— $— $— $— 
Schedule of carrying value and estimated fair value of the Company's financial instruments not carried at fair value on the consolidated balance sheet
As of December 31, 2022 and 2021, the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands):
As of December 31,
20222021
Level in Fair Value HierarchyCarrying ValueFair
Value		Carrying ValueFair
Value
Financial assets:
   Loans held for investment3$2,264,008 $2,233,319 $2,414,383 $2,408,463 
Financial liabilities:
   Secured funding agreements2$705,231 $705,231 $840,047 $840,047 
   Notes payable 3104,460 103,635 50,358 51,110 
   Secured term loan3149,200 137,571 149,016 150,000 
Collateralized loan obligation securitization debt (consolidated VIEs)3777,675 749,242 861,188 863,403 
   Secured borrowings3— — 22,589 22,715 
v3.22.4
RELATED PARTY TRANSACTIONS (Tables)
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Summary of related-party costs incurred by the company and amounts payable to the Manager
The following table summarizes the related party costs incurred by the Company for the years ended December 31, 2022, 2021 and 2020 and amounts payable to the Company’s Manager as of December 31, 2022 and 2021 ($ in thousands):
IncurredPayable
For the years ended December 31,As of December 31,
20222021202020222021
Affiliate Payments
Management fees $11,456 $9,384 $7,323 $3,026 $2,613 
Incentive fees3,442 2,752 836 1,264 830 
General and administrative expenses 3,777 3,016 3,653 1,232 703 
Direct costs(1)165 9 100 58 10 
   Total$18,840 $15,161 $11,912 $5,580 $4,156 
_______________________________
(1)    For the years ended December 31, 2022, 2021 and 2020, direct costs incurred are included within general and administrative expenses in the Company’s consolidated statements of operations.
v3.22.4
DIVIDENDS AND DISTRIBUTIONS (Tables)
 12 Months Ended
Dec. 31, 2022
DIVIDENDS AND DISTRIBUTIONS  
Summary of the company's dividends declared
The following table summarizes the Company’s dividends declared during the years ended December 31, 2022, 2021 and 2020 ($ in thousands, except per share data):

Date DeclaredRecord DatePayment DatePer Share AmountTotal Amount
November 2, 2022December 30, 2022January 18, 2023$0.35 (1)$19,347 
July 29, 2022September 30, 2022October 17, 20220.35 (1)19,196 
May 3, 2022June 30, 2022July 15, 20220.35 (1)19,198 
February 15, 2022March 31, 2022April 14, 20220.35 (1)16,740 
Total cash dividends declared for the year ended December 31, 2022
$1.40 $74,481 
November 3, 2021December 31, 2021January 19, 2022$0.35 (1)$16,674 
July 30, 2021September 30, 2021October 15, 20210.35 (1)16,524 
May 4, 2021June 30, 2021July 15, 20210.35 (1)16,528 
February 17, 2021March 31, 2021April 15, 20210.35 (1)14,248 
Total cash dividends declared for the year ended December 31, 2021
$1.40 $63,974 
December 15, 2020December 30, 2020January 15, 2021$0.33 $11,124 
September 16, 2020September 30, 2020October 15, 20200.33 11,072 
June 19, 2020June 30, 2020July 15, 20200.33 11,072 
February 20, 2020March 31, 2020April 15, 20200.33 11,057 
Total cash dividends declared for the year ended December 31, 2020$1.32 $44,325 
(1) Consists of a regular cash dividend of $0.33 and a supplemental cash dividend of $0.02.
v3.22.4
ORGANIZATION (Details)
 12 Months Ended
Dec. 31, 2022
segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of reportable segments 1
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Reserve for uncertain tax positions $ 0 $ 0
Furniture, fixtures and equipment    
Property, Plant and Equipment [Line Items]    
Useful life (in years) 15 years  
Maximum | Buildings and improvements    
Property, Plant and Equipment [Line Items]    
Useful life (in years) 40 years  
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Interest Expense (Details) - USD ($)
$ in Thousands
 1 Months Ended 12 Months Ended
Jun. 30, 2019
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Debt Instrument [Line Items]        
Interest expense   $ 65,994 $ 50,080 $ 51,949
Secured funding agreements        
Debt Instrument [Line Items]        
Interest expense   33,602 16,403 28,003
Notes Payable        
Debt Instrument [Line Items]        
Interest expense   3,410 2,275 1,317
Securitization debt        
Debt Instrument [Line Items]        
Interest expense   29,341 20,104 12,384
Secured term loan        
Debt Instrument [Line Items]        
Interest expense   7,028 4,353 7,114
Secured borrowings        
Debt Instrument [Line Items]        
Interest expense   845 6,145 3,131
Other        
Debt Instrument [Line Items]        
Other   $ (8,232) $ 800 $ 0
Notes Payable, Due June 10, 2024 | Notes Payable | NEW YORK        
Debt Instrument [Line Items]        
Interest expense from real estate owned $ 28,300      
v3.22.4
LOANS HELD FOR INVESTMENT - Narrative (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2022
USD ($)
loan
Dec. 31, 2021
USD ($)
loan
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Number of loans originated or co-originated | loan 60  
Number of loans repaid or sold, since inception | loan 150  
Total commitment $ 2,600.0  
Loans held for investment 2,300.0  
Amount funded 676.9  
Amount of repayments $ 823.2  
Percentage of loans held for investment having LIBOR floors 90.20%  
Weighted average floor (as a percent) 0.95%  
Impact of COVID-19    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Number of loans in non-accrual status | loan 3 2
Financing receivable, nonaccrual $ 99.1 $ 45.0
v3.22.4
LOANS HELD FOR INVESTMENT - Loans held for Investments (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Loans held for investment $ 2,264,008 $ 2,414,383
Outstanding Principal $ 2,282,821 $ 2,429,112
Weighted Average Unleveraged Effective Yield, Including Non-accrual Loans 8.50% 5.40%
Weighted Average Unleveraged Effective Yield, Excluding Non-accrual Loans 8.90% 5.50%
Weighted Average Remaining Life (Years) 1 year 4 months 24 days 1 year 7 months 6 days
Senior mortgage loans    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Loans held for investment $ 2,225,725 $ 2,397,655
Outstanding Principal $ 2,243,818 $ 2,411,718
Weighted Average Unleveraged Effective Yield, Including Non-accrual Loans 8.40% 5.30%
Weighted Average Unleveraged Effective Yield, Excluding Non-accrual Loans 8.80% 5.40%
Weighted Average Remaining Life (Years) 1 year 3 months 18 days 1 year 6 months
Subordinated debt and preferred equity investments    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Loans held for investment $ 38,283 $ 16,728
Outstanding Principal $ 39,003 $ 17,394
Weighted Average Unleveraged Effective Yield, Including Non-accrual Loans 14.00% 13.70%
Weighted Average Unleveraged Effective Yield, Excluding Non-accrual Loans 14.00% 13.70%
Weighted Average Remaining Life (Years) 2 years 9 months 18 days 4 years
v3.22.4
LOANS HELD FOR INVESTMENT - Investment Portfolio (Details)
$ in Thousands
 1 Months Ended 12 Months Ended
May 31, 2022
Mar. 31, 2022
Dec. 31, 2022
USD ($)
option
Sep. 30, 2022
Jul. 31, 2022
Dec. 31, 2021
USD ($)
Mar. 08, 2019
USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 2,282,821     $ 2,429,112  
Loans held for investment     $ 2,264,008     2,414,383  
Unleveraged effective yield     8.50%        
Minimum              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Number of extension options | option     1        
Maximum              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Number of extension options | option     2        
Extension period of maturity date     12 months        
SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate         2.00%    
Office | Senior Mortgage Loans | IL | LIBOR Plus 3.60% Due Mar 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 151,500        
Loans held for investment     $ 151,400        
Unleveraged effective yield     8.30%        
Office | Senior Mortgage Loans | IL | LIBOR Plus 3.60% Due Mar 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.60%        
Office | Senior Mortgage Loans | IL | SOFR Plus 3.95% Due Jun 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 56,900        
Loans held for investment     $ 55,000        
Unleveraged effective yield     0.00%        
Office | Senior Mortgage Loans | IL | SOFR Plus 3.95% Due Jun 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.95%        
Interest income     $ 3,500        
Office | Senior Mortgage Loans | IL | SOFR Plus 4.25%, Due Jan 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     56,000        
Loans held for investment     $ 55,500        
Basis spread on variable rate     4.25%        
Unleveraged effective yield     9.10%        
Office | Senior Mortgage Loans | IL | LIBOR Plus 3.80% Due Jan 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 30,200        
Loans held for investment     $ 30,200        
Basis spread on variable rate     3.80%        
Unleveraged effective yield     8.80%        
Office | Senior Mortgage Loans | IL | LIBOR Plus 3.95%, Due Jun 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate 395.00%            
Office | Senior Mortgage Loans | NY | LIBOR Plus 3.85% Due Aug 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 68,200        
Loans held for investment     $ 67,600        
Unleveraged effective yield     8.60%        
Office | Senior Mortgage Loans | NY | LIBOR Plus 3.85% Due Aug 2025 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.85%        
Office | Senior Mortgage Loans | Diversified | SOFR Plus 3.75% Due Jan 2024 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 118,000        
Loans held for investment     $ 117,700        
Basis spread on variable rate     3.75%        
Unleveraged effective yield     8.50%        
Office | Senior Mortgage Loans | AZ | LIBOR Plus 3.50% Due Oct 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 77,400        
Loans held for investment     $ 76,800        
Unleveraged effective yield     8.30%        
Office | Senior Mortgage Loans | AZ | LIBOR Plus 3.50% Due Oct 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.50%        
Office | Senior Mortgage Loans | NC | LIBOR Plus 4.25% Due Mar2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Extension option period exercised (in years)   1 year          
Office | Senior Mortgage Loans | NC | LIBOR Plus 4.25% Due Mar2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 69,100        
Loans held for investment     $ 69,000        
Basis spread on variable rate     4.25%        
Unleveraged effective yield     9.00%        
Office | Senior Mortgage Loans | NC | SOFR Plus 3.65% Due Aug 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 66,500        
Loans held for investment     $ 66,000        
Unleveraged effective yield     8.50%        
Office | Senior Mortgage Loans | NC | SOFR Plus 3.65% Due Aug 2024 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.65%        
Office | Senior Mortgage Loans | GA | SOFR Plus 3.15%, Due Dec 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 48,700        
Loans held for investment     $ 48,600        
Unleveraged effective yield     7.80%        
Office | Senior Mortgage Loans | GA | SOFR Plus 3.15%, Due Dec 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.15%        
Office | Senior Mortgage Loans | CA | LIBOR Plus 3.35% Due Mar 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 33,200        
Loans held for investment     $ 33,100        
Unleveraged effective yield     8.50%        
Office | Senior Mortgage Loans | CA | LIBOR Plus 3.35% Due Mar 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.35%        
Office | Senior Mortgage Loans | CA | SOFR Plus 3.50% Due Nov 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 22,800        
Loans held for investment     $ 22,800        
Unleveraged effective yield     8.10%        
Office | Senior Mortgage Loans | CA | SOFR Plus 3.50% Due Nov 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.50%        
Office | Senior Mortgage Loans | MA | SOFR Plus 3.75% Due Apr 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 23,700        
Loans held for investment     $ 23,000        
Unleveraged effective yield     9.60%        
Office | Senior Mortgage Loans | MA | SOFR Plus 3.75% Due Apr 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.75%        
Office | Subordinated debt and preferred equity investments | NJ              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 18,400        
Loans held for investment     $ 17,900        
Fixed interest rate     12.00%        
Unleveraged effective yield     13.60%        
Multifamily | Senior Mortgage Loans | NY | SOFR Plus 3.90%, Due Jun 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 130,600        
Loans held for investment     $ 129,300        
Basis spread on variable rate     3.90%        
Unleveraged effective yield     8.70%        
Multifamily | Senior Mortgage Loans | TX | SOFR Plus 3.50% Due Jul 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 100,000        
Loans held for investment     $ 99,200        
Basis spread on variable rate     3.50%        
Unleveraged effective yield     8.20%        
Multifamily | Senior Mortgage Loans | TX | LIBOR Plus 2.85% Due Dec 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 67,900        
Loans held for investment     $ 67,400        
Unleveraged effective yield     7.60%        
Multifamily | Senior Mortgage Loans | TX | LIBOR Plus 2.85% Due Dec 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.85%        
Multifamily | Senior Mortgage Loans | TX | LIBOR Plus 2.50% Due Oct 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 22,200        
Loans held for investment     $ 22,100        
Unleveraged effective yield     7.30%        
Multifamily | Senior Mortgage Loans | TX | LIBOR Plus 2.50% Due Oct 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.50%        
Multifamily | Senior Mortgage Loans | CA | LIBOR Plus 2.90% Due Dec 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 31,700        
Loans held for investment     $ 31,500        
Unleveraged effective yield     7.60%        
Multifamily | Senior Mortgage Loans | CA | LIBOR Plus 2.90% Due Dec 2025 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Multifamily | Senior Mortgage Loans | PA | SOFR Plus 4.00% Due Dec 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 29,300        
Loans held for investment     $ 29,300        
Unleveraged effective yield     8.60%        
Multifamily | Senior Mortgage Loans | PA | SOFR Plus 4.00% Due Dec 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate   4.00% 4.00%        
Multifamily | Senior Mortgage Loans | PA | LIBOR Plus 3 .00% Due Dec 2022 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.00%        
Multifamily | Senior Mortgage Loans | WA | LIBOR Plus 2 .90% Due Nov 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 23,100        
Loans held for investment     $ 23,000        
Unleveraged effective yield     7.50%        
Multifamily | Senior Mortgage Loans | WA | LIBOR Plus 2 .90% Due Nov 2025 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Multifamily | Senior Mortgage Loans | WA | LIBOR Plus 3.00% Due Mar 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 18,800        
Loans held for investment     $ 18,700        
Unleveraged effective yield     7.80%        
Multifamily | Senior Mortgage Loans | WA | LIBOR Plus 3.00% Due Mar 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.00%        
Multifamily | Subordinated debt and preferred equity investments | SC | SOFR Plus 9.53%, Due Sep 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 20,600        
Loans held for investment     $ 20,400        
Unleveraged effective yield     14.30%        
Multifamily | Subordinated debt and preferred equity investments | SC | SOFR Plus 9.53%, Due Sep 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Fixed interest rate     9.53%        
Industrial | Senior Mortgage Loans | IL | LIBOR Plus 4.55% Due May 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 98,200        
Loans held for investment     $ 97,800        
Unleveraged effective yield     9.40%        
Industrial | Senior Mortgage Loans | IL | LIBOR Plus 4.55% Due May 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     4.55%        
Industrial | Senior Mortgage Loans | IL | LIBOR Plus 3.00% Due Dec 2023, Instrument 1              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 5,600        
Loans held for investment     $ 5,600        
Unleveraged effective yield     7.70%        
Industrial | Senior Mortgage Loans | IL | LIBOR Plus 3.00% Due Dec 2023, Instrument 1 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.00%        
Industrial | Senior Mortgage Loans | TX | LIBOR Plus 5.25% Due Dec 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 10,400        
Loans held for investment     $ 10,300        
Unleveraged effective yield     10.00%        
Industrial | Senior Mortgage Loans | TX | LIBOR Plus 5.25% Due Dec 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Fixed interest rate     5.25%        
Industrial | Senior Mortgage Loans | FL | LIBOR Plus 2.90% Due Dec 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 25,500        
Loans held for investment     $ 25,400        
Unleveraged effective yield     7.60%        
Industrial | Senior Mortgage Loans | FL | LIBOR Plus 2.90% Due Dec 2025 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Industrial | Senior Mortgage Loans | FL | LIBOR Plus 4 .75% Due Nov 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 9,500        
Loans held for investment     $ 9,400        
Unleveraged effective yield     10.70%        
Industrial | Senior Mortgage Loans | FL | LIBOR Plus 4 .75% Due Nov 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     4.75%        
Industrial | Senior Mortgage Loans | FL | SOFR Plus 5.75% Due Mar 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 4,700        
Loans held for investment     $ 4,600        
Unleveraged effective yield     10.50%        
Industrial | Senior Mortgage Loans | FL | SOFR Plus 5.75% Due Mar 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     5.75%        
Industrial | Senior Mortgage Loans | GA | LIBOR Plus 5.25% Due Sep 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 1,300        
Loans held for investment     $ 1,300        
Unleveraged effective yield     10.00%        
Industrial | Senior Mortgage Loans | GA | LIBOR Plus 5.25% Due Sep 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     5.25%        
Industrial | Senior Mortgage Loans | CA | LIBOR Plus 3.75% Due Mar 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 19,600        
Loans held for investment     $ 19,600        
Unleveraged effective yield     8.70%        
Industrial | Senior Mortgage Loans | CA | LIBOR Plus 3.75% Due Mar 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.75%        
Industrial | Senior Mortgage Loans | PA | LIBOR Plus 5.50% Due Sep 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 8,000        
Loans held for investment     $ 8,000        
Unleveraged effective yield     10.30%        
Industrial | Senior Mortgage Loans | PA | LIBOR Plus 5.50% Due Sep 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     5.50%        
Industrial | Senior Mortgage Loans | CO              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 24,500        
Loans held for investment     $ 24,500        
Unleveraged effective yield     12.20%        
Industrial | Senior Mortgage Loans | CO | LIBOR Plus 6.75% Due Feb 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Loans held for investment     $ 20,800        
Industrial | Senior Mortgage Loans | CO | LIBOR Plus 6.75% Due Feb 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     6.75%        
Industrial | Senior Mortgage Loans | CO | SOFR Plus 8.50% Due Feb 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Loans held for investment     $ 3,800        
Industrial | Senior Mortgage Loans | CO | SOFR Plus 8.50% Due Feb 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     8.50%        
Industrial | Senior Mortgage Loans | MA | LIBOR Plus 2.90% Due Nov 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 7,700        
Loans held for investment     $ 7,700        
Unleveraged effective yield     7.50%        
Industrial | Senior Mortgage Loans | MA | LIBOR Plus 2.90% Due Nov 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Industrial | Senior Mortgage Loans | NJ | LIBOR Plus 3.75%, Due May 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 23,300        
Loans held for investment     $ 23,100        
Unleveraged effective yield     8.90%        
Industrial | Senior Mortgage Loans | NJ | LIBOR Plus 3.75%, Due May 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.75%        
Industrial | Senior Mortgage Loans | TN | LIBOR Plus 5.50% Due Nov 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 6,700        
Loans held for investment     $ 6,600        
Unleveraged effective yield     10.30%        
Industrial | Senior Mortgage Loans | TN | LIBOR Plus 5.50% Due Nov 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     5.50%        
Mixed-use | Senior Mortgage Loans | NY | LIBOR Plus 3.65% Due Jul 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 75,000        
Loans held for investment     $ 74,600        
Unleveraged effective yield     8.40%        
Mixed-use | Senior Mortgage Loans | NY | LIBOR Plus 3.65% Due Jul 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.65%        
Mixed-use | Senior Mortgage Loans | TX | SOFR Plus 3.85%, Due Sep 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 35,300        
Loans held for investment     $ 35,200        
Unleveraged effective yield     8.50%        
Mixed-use | Senior Mortgage Loans | TX | SOFR Plus 3.85%, Due Sep 2024 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.85% 3.85%      
Mixed-use | Senior Mortgage Loans | TX | LIBOR Plus 3.75% Due Sep 2022 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate 375.00%            
Mixed-use | Senior Mortgage Loans | FL | LIBOR Plus 4.25% Due Feb 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 84,000        
Loans held for investment     $ 84,000        
Unleveraged effective yield     8.60%        
Mixed-use | Senior Mortgage Loans | FL | LIBOR Plus 4.25% Due Feb 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     4.25%        
Mixed-use | Senior Mortgage Loans | CA | LIBOR Plus 4.10% Due Mar 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 37,900        
Loans held for investment     $ 37,900        
Basis spread on variable rate     4.10%        
Unleveraged effective yield     9.10%        
Residential Condominium | Senior Mortgage Loans | NY | SOFR Plus 8.95% Due Oct 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 72,200        
Loans held for investment     $ 71,700        
Unleveraged effective yield     15.30%        
Residential Condominium | Senior Mortgage Loans | NY | SOFR Plus 8.95% Due Oct 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal           $ 53,300  
Basis spread on variable rate     8.95%        
Residential Condominium | Senior Mortgage Loans | FL | LIBOR Plus 5.25% Due Jul 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 72,500        
Loans held for investment     $ 72,300        
Unleveraged effective yield     10.20%        
Residential Condominium | Senior Mortgage Loans | FL | LIBOR Plus 5.25% Due Jul 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     5.25%        
Multifamily/Office | Senior Mortgage Loans | SC | LIBOR Plus 2.90% Due Nov 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 67,000        
Loans held for investment     $ 66,800        
Basis spread on variable rate     2.90%        
Unleveraged effective yield     7.60%        
Hotel | Senior Mortgage Loans | IL              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Interest income     $ 1,800        
Hotel | Senior Mortgage Loans | IL | SOFR Plus 4.00% Due May 2024 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     35,000        
Loans held for investment     $ 29,800        
Basis spread on variable rate   4.00% 4.00%        
Unleveraged effective yield     0.00%        
Hotel | Senior Mortgage Loans | IL | LIBOR Plus 4.40%, Due May 2022 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate   4.40%          
Hotel | Senior Mortgage Loans | NY              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal             $ 38,600
Hotel | Senior Mortgage Loans | NY | LIBOR Plus 4 .40% Due Mar 2026 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 34,000        
Loans held for investment     $ 33,500        
Basis spread on variable rate     4.40%        
Unleveraged effective yield     9.20%        
Hotel | Senior Mortgage Loans | CA | LIBOR Plus 4.12% Due Jan 2023              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 40,000        
Loans held for investment     $ 40,000        
Unleveraged effective yield     9.00%        
Hotel | Senior Mortgage Loans | CA | LIBOR Plus 4.12% Due Jan 2023 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     4.12%        
Hotel | Senior Mortgage Loans | CA | SOFR Plus 4.20% Due Mar 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 39,500        
Loans held for investment     $ 39,100        
Unleveraged effective yield     9.00%        
Hotel | Senior Mortgage Loans | CA | SOFR Plus 4.20% Due Mar 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     4.20%        
Student Housing | Senior Mortgage Loans | CA | SOFR Plus 3.95% Due July 2023 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 34,500        
Loans held for investment     $ 34,500        
Basis spread on variable rate     3.95%        
Unleveraged effective yield     8.30%        
Extension option period exercised (in years) 1 year            
Student Housing | Senior Mortgage Loans | AL | LIBOR Plus 3.85% Due May 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 19,500        
Loans held for investment     $ 19,400        
Unleveraged effective yield     8.60%        
Student Housing | Senior Mortgage Loans | AL | LIBOR Plus 3.85% Due May 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.85%        
Self Storage | Senior Mortgage Loans | TX | LIBOR Plus 2.90% Due Aug 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 8,000        
Loans held for investment     $ 8,000        
Unleveraged effective yield     7.50%        
Self Storage | Senior Mortgage Loans | TX | LIBOR Plus 2.90% Due Aug 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | TX | LIBOR Plus 2.90% Due Sep 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 2,900        
Loans held for investment     $ 2,900        
Unleveraged effective yield     7.40%        
Self Storage | Senior Mortgage Loans | TX | LIBOR Plus 2.90% Due Sep 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | PA | LIBOR Plus 2.90% Due Dec 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 17,900        
Loans held for investment     $ 17,700        
Unleveraged effective yield     7.60%        
Self Storage | Senior Mortgage Loans | PA | LIBOR Plus 2.90% Due Dec 2025 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | PA | LIBOR Plus 5.90% Due Nov 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 7,000        
Loans held for investment     $ 6,900        
Unleveraged effective yield     10.70%        
Self Storage | Senior Mortgage Loans | PA | LIBOR Plus 5.90% Due Nov 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     5.90%        
Self Storage | Senior Mortgage Loans | MA | LIBOR Plus 2.90% Due Dec 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 8,500        
Loans held for investment     $ 8,500        
Unleveraged effective yield     7.50%        
Self Storage | Senior Mortgage Loans | MA | LIBOR Plus 2.90% Due Dec 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | MA | LIBOR Plus 2.90% Due Oct 2024              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 6,500        
Loans held for investment     $ 6,500        
Unleveraged effective yield     7.50%        
Self Storage | Senior Mortgage Loans | MA | LIBOR Plus 2.90% Due Oct 2024 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | NJ | SOFR Plus 2.90% Due April 2025              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 17,600        
Loans held for investment     $ 17,300        
Unleveraged effective yield     8.00%        
Self Storage | Senior Mortgage Loans | NJ | SOFR Plus 2.90% Due April 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | NJ | LIBOR Plus 2.90% Due Dec 2023, Instrument 4              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 5,900        
Loans held for investment     $ 5,900        
Unleveraged effective yield     7.70%        
Self Storage | Senior Mortgage Loans | NJ | LIBOR Plus 2.90% Due Dec 2023, Instrument 4 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     2.90%        
Self Storage | Senior Mortgage Loans | WA | SOFR Plus 2.90%, Due March 2025 | SOFR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 11,500        
Loans held for investment     $ 11,300        
Fixed interest rate     2.90%        
Unleveraged effective yield     8.00%        
Self Storage | Senior Mortgage Loans | MO | LIBOR Plus 3.00% Due Dec 2023, Instrument 1              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 6,500        
Loans held for investment     $ 6,500        
Unleveraged effective yield     7.50%        
Self Storage | Senior Mortgage Loans | MO | LIBOR Plus 3.00% Due Dec 2023, Instrument 1 | LIBOR              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Basis spread on variable rate     3.00%        
Residential | Senior Mortgage Loans | CA              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding Principal     $ 14,300        
Loans held for investment     $ 14,300        
Basis spread on variable rate     13.00%        
Unleveraged effective yield     0.00%        
v3.22.4
LOANS HELD FOR INVESTMENT - Portfolio Activity (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Change in the activity of loan portfolio    
Balance at the beginning of the period $ 2,414,383 $ 1,815,219
Initial funding 578,652 1,166,100
Origination fees and discounts, net of costs (9,577) (12,192)
Additional funding 96,057 93,973
Amortizing payments (4,333) (2,586)
Loan payoffs (821,513) (654,564)
Origination fee and discount accretion 10,339 8,433
Balance at the end of the period $ 2,264,008 $ 2,414,383
v3.22.4
CURRENT EXPECTED CREDIT LOSSES - Narrative (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]      
Financing receivable, allowance for credit loss, excluding accrued interest $ 71,300    
Allowance for credit loss, basis points 28400.00%    
Commitments $ 2,510,308 $ 2,662,853  
Outstanding Principal 2,282,821 2,429,112  
Senior Mortgage Loans | Residential | CA      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Outstanding Principal 14,300    
Senior Mortgage Loans | Residential | CA | 5 - Impaired/Loss Likely: A loan that has significantly increased probability of default or principal loss      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Financing receivable, allowance for credit loss, excluding accrued interest 5,600    
Outstanding Principal 14,300    
Other Assets      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Interest receivable 14,000 17,100  
Loans Held for Investment      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Financing receivable, allowance for credit loss, excluding accrued interest 65,969 23,939 $ 23,604
Unfunded Loan Commitment      
Financing Receivable, Allowance for Credit Loss [Line Items]      
Financing receivable, allowance for credit loss, excluding accrued interest $ 5,339 $ 1,308 $ 1,633
v3.22.4
CURRENT EXPECTED CREDIT LOSSES - Allowance for Credit Loss (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Roll Forward]      
Provision for current expected credit losses $ 46,061 $ 10 $ 20,185
Balance at the end of the period 71,300    
Loans Held for Investment      
Financing Receivable, Allowance for Credit Loss [Roll Forward]      
Balance at the beginning of the period 23,939 23,604  
Provision for current expected credit losses 42,030 335  
Write-offs 0 0  
Recoveries 0 0  
Balance at the end of the period 65,969 23,939 23,604
Unfunded Loan Commitment      
Financing Receivable, Allowance for Credit Loss [Roll Forward]      
Balance at the beginning of the period 1,308 1,633  
Provision for current expected credit losses 4,031 (325)  
Write-offs 0 0  
Recoveries 0 0  
Balance at the end of the period $ 5,339 $ 1,308 $ 1,633
v3.22.4
CURRENT EXPECTED CREDIT LOSSES - Internal Credit Risk Rating (Details) - Loans Held for Investment
$ in Thousands
Dec. 31, 2022
USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]  
2022 $ 562,104
2021 812,934
2020 325,804
2019 319,648
2018 151,213
Prior 92,305
Total 2,264,008
1 - Very Low Risk  
Financing Receivable, Credit Quality Indicator [Line Items]  
2022 13,536
2021 27,684
2020 0
2019 0
2018 0
Prior 0
Total 41,220
2 - Low Risk  
Financing Receivable, Credit Quality Indicator [Line Items]  
2022 34,706
2021 323,544
2020 0
2019 0
2018 22,802
Prior 34,460
Total 415,512
3 - Medium Risk  
Financing Receivable, Credit Quality Indicator [Line Items]  
2022 442,153
2021 461,706
2020 136,456
2019 256,359
2018 29,280
Prior 40,000
Total 1,365,954
4 - High Risk/Potential for Loss: Asset performance is trailing underwritten expectations. Loan at risk of impairment without material improvement to performance  
Financing Receivable, Credit Quality Indicator [Line Items]  
2022 71,709
2021 0
2020 189,348
2019 63,289
2018 84,807
Prior 17,845
Total 426,998
5 - Impaired/Loss Likely: A loan that has significantly increased probability of default or principal loss  
Financing Receivable, Credit Quality Indicator [Line Items]  
2022 0
2021 0
2020 0
2019 0
2018 14,324
Prior 0
Total $ 14,324
v3.22.4
REAL ESTATE OWNED - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 01, 2022
Nov. 08, 2021
Mar. 31, 2022
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Mar. 08, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding principal       $ 2,282,821 $ 2,429,112    
Real estate owned held for sale, net       0 36,602    
Gain on sale of real estate owned       2,197 0 $ 0  
Depreciation of real estate owned       0 825 $ 892  
NEW YORK | Hotel              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Real estate owned held for sale, net         36,602    
Repossessed hotel property         38,987    
Depreciation of real estate owned       0 $ 825    
Senior Mortgage Loans | NEW YORK | Hotel              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Outstanding principal             $ 38,600
Debt derecognized             38,600
Real estate owned held for sale, net             36,900
Other repossessed hotel assets             1,700
Repossessed hotel property             $ 38,600
Proceeds from sale of hotel property   $ 40,000          
Gain on sale of real estate owned     $ 2,200        
Senior Mortgage Loans | NEW YORK | Hotel | Third Party Buyer of the Hotel Property              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Initial funding of loan receivable       30,700      
Senior Mortgage Loans | NEW YORK | Hotel | Third Party Buyer of the Hotel Property | Unfunded Loan Commitment              
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]              
Additional loan proceeds to be available to fund future advances       $ 25,000      
Contributed equity into purchase $ 12,900            
Additional equity associated with planned renovation costs $ 8,700            
v3.22.4
REAL ESTATE OWNED - Schedule of Real Estate Owned, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Real estate owned held for sale, net $ 0 $ 36,602
NEW YORK | Hotel    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Repossessed hotel property   38,987
Less: Accumulated depreciation   (2,385)
Real estate owned held for sale, net   36,602
Land | NEW YORK | Hotel    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Repossessed hotel property   10,200
Buildings and improvements | NEW YORK | Hotel    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Repossessed hotel property   24,281
Furniture, fixtures and equipment | NEW YORK | Hotel    
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]    
Repossessed hotel property   $ 4,506
v3.22.4
DEBT - Schedule of outstanding balances and total commitments under Financing Agreements (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Outstanding Balance $ 960,231,000 $ 1,041,157,000
Total Commitment 1,535,000,000 1,481,755,000
Secured term loan    
Debt Instrument [Line Items]    
Outstanding Balance 150,000,000 150,000,000
Total Commitment 150,000,000 150,000,000
Wells Fargo Facility | Revolving credit facility, optional commitment amount    
Debt Instrument [Line Items]    
Total Commitment 500,000,000  
Secured funding facility    
Debt Instrument [Line Items]    
Outstanding Balance 705,231,000 840,047,000
Total Commitment 1,280,000,000 1,280,000,000
Secured funding facility | Wells Fargo Facility    
Debt Instrument [Line Items]    
Outstanding Balance 270,798,000 399,528,000
Total Commitment 450,000,000 450,000,000
Secured funding facility | Citibank Facility    
Debt Instrument [Line Items]    
Outstanding Balance 236,240,000 192,970,000
Total Commitment 325,000,000 325,000,000
Secured funding facility | CNB Facility    
Debt Instrument [Line Items]    
Outstanding Balance 0 0
Total Commitment 75,000,000 75,000,000
Secured funding facility | MetLife Facility    
Debt Instrument [Line Items]    
Outstanding Balance 0 20,648,000
Total Commitment 180,000,000 180,000,000
Secured funding facility | Morgan Stanley Facility    
Debt Instrument [Line Items]    
Outstanding Balance 198,193,000 226,901,000
Total Commitment 250,000,000 250,000,000
Notes Payable    
Debt Instrument [Line Items]    
Outstanding Balance 105,000,000 51,110,000
Total Commitment $ 105,000,000 $ 51,755,000
v3.22.4
DEBT - Disclosures (Details)
 1 Months Ended 3 Months Ended 6 Months Ended 10 Months Ended 12 Months Ended 18 Months Ended
Nov. 30, 2019
USD ($)
loan
extension
Jul. 31, 2022
USD ($)
loan
Nov. 30, 2021
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
USD ($)
extension
Nov. 12, 2025
Oct. 31, 2021
Nov. 12, 2026
Dec. 31, 2022
USD ($)
extension
option
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Nov. 12, 2026
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 1,535,000,000       $ 1,535,000,000 $ 1,481,755,000    
Number of non-recourse notes | loan 2                          
Outstanding Balance             960,231,000       960,231,000 1,041,157,000    
Outstanding principal             2,282,821,000       $ 2,282,821,000 2,429,112,000    
SOFR                            
Funding agreements                            
Basis spread on variable rate   2.00%                        
Minimum                            
Funding agreements                            
Number of extension options | option                     1      
Maximum                            
Funding agreements                            
Extension period of maturity date                     12 months      
Number of extension options | option                     2      
Notes Payable, Due June 10, 2024 | NEW YORK                            
Funding agreements                            
Interest rate margin (as a percent)                     3.00%      
Notes Payable                            
Funding agreements                            
Number of extension periods available for maturity date | extension 2                          
Extension period of maturity date 12 months                          
Interest rate margin (as a percent)                     3.75%      
Outstanding Balance $ 23,500,000                          
Notes Payable | SOUTH CAROLINA                            
Funding agreements                            
Outstanding Balance $ 34,600,000                          
Secured term loan                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             150,000,000       $ 150,000,000 150,000,000    
Outstanding Balance             150,000,000       150,000,000 $ 150,000,000    
Aggregate principal amount     $ 150,000,000       $ 150,000,000       $ 150,000,000      
Debt discount on initial draw down (as a percent)                     4.60% 520.00% 640.00%  
Secured term loan | Forecast                            
Funding agreements                            
Interest rate during period               4.50%            
Interest rate, increase (decrease)                   0.125%        
Interest rate, quarterly increase                           0.25%
Secured term loan | LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)     0.50%           5.00%          
Interest rate, increase (decrease)             0.125%              
Secured term loan | LIBOR | Forecast                            
Funding agreements                            
Interest rate, increase (decrease)         0.75% 0.375%                
Secured term loan | Minimum                            
Funding agreements                            
Covenant ratio of EBITDA to fixed charges                     1.10      
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained                     80.00%      
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained                     80.00%      
Asset coverage ratio                     115.00%      
Unencumbered asset ratio                     125.00%      
Covenant percentage of tangible net worth required to be maintained                     65.00%      
Secured term loan | Maximum                            
Funding agreements                            
Covenant ratio of debt to tangible net worth                     4.50      
Wells Fargo Facility | Secured revolving funding facility                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 450,000,000       $ 450,000,000      
Number of extension periods available for maturity date | extension             2       2      
Extension period of maturity date                     12 months      
Non-utilization fee on average available balance (basis points)                     0.25%      
Facility used on average (at least) (as a percent)                     75.00%      
Non-utilization fee                         $ 19,000  
Covenant liquidity to be maintained as percentage of recourse indebtedness                     5.00%      
Wells Fargo Facility | Secured revolving funding facility | Minimum                            
Funding agreements                            
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained                     80.00%      
Covenant amount of liquidity to be maintained                     $ 5,000,000      
Wells Fargo Facility | Secured revolving funding facility | Minimum | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     1.50%      
Wells Fargo Facility | Secured revolving funding facility | Minimum | One-month LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     1.50%      
Wells Fargo Facility | Secured revolving funding facility | Maximum                            
Funding agreements                            
Covenant ratio of debt to tangible net worth                     4.50      
Covenant ratio of recourse debt to tangible net worth                     3,000.00      
Covenant ratio of EBITDA to fixed charges                     1.25      
Covenant specified amount for computing tangible net worth to be maintained                     $ 135,500,000      
Covenant amount of liquidity to be maintained                     $ 10,000,000      
Wells Fargo Facility | Secured revolving funding facility | Maximum | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     2.75%      
Wells Fargo Facility | Secured revolving funding facility | Maximum | One-month LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     3.75%      
Wells Fargo Facility | Revolving credit facility, optional commitment amount                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 500,000,000       $ 500,000,000      
Citibank Facility | Secured revolving funding facility                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 325,000,000       $ 325,000,000      
Number of extension periods available for maturity date | extension             2       2      
Extension period of maturity date                     12 months      
Non-utilization fee on average available balance (basis points)                     0.25%      
Facility used on average (at least) (as a percent)                     75.00%      
Non-utilization fee                     $ 11,000 $ 598,000 516,000  
Covenant liquidity to be maintained as percentage of recourse indebtedness                     5.00%      
Citibank Facility | Secured revolving funding facility | Minimum                            
Funding agreements                            
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained                     80.00%      
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained                     80.00%      
Covenant amount of liquidity to be maintained                     $ 5,000,000      
Citibank Facility | Secured revolving funding facility | Minimum | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     1.50%      
Citibank Facility | Secured revolving funding facility | Maximum                            
Funding agreements                            
Covenant ratio of debt to tangible net worth                     4.50      
Covenant ratio of recourse debt to tangible net worth                     3.00      
Covenant ratio of EBITDA to fixed charges                     1.25      
Covenant amount of liquidity to be maintained                     $ 10,000,000      
Citibank Facility | Secured revolving funding facility | Maximum | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     2.10%      
CNB Facility | CNB Facility                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 75,000,000       $ 75,000,000      
Non-utilization fee                     $ 284,000 146,000 38,000  
CNB Facility | CNB Facility | LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     2.65%      
CNB Facility | CNB Facility | One-month LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     1.00%      
CNB Facility | CNB Facility | SOFR                            
Funding agreements                            
Interest rate margin (as a percent)                     1.00%      
CNB Facility | CNB Facility | Federal funds rate                            
Funding agreements                            
Interest rate margin (as a percent)                     0.50%      
Non-utilization fee on average available balance (basis points)                     0.375%      
Facility used on average (at least) (as a percent)                     75.00%      
CNB Facility | CNB Facility | Minimum                            
Funding agreements                            
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained                     80.00%      
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained                     80.00%      
CNB Facility | CNB Facility | Minimum | SOFR                            
Funding agreements                            
Interest rate margin (as a percent)                     0.35%      
CNB Facility | CNB Facility | Maximum                            
Funding agreements                            
Covenant ratio of debt to tangible net worth                     4.50      
Covenant ratio of EBITDA to fixed charges                     1.25      
CNB Facility | CNB Facility | Maximum | SOFR                            
Funding agreements                            
Interest rate margin (as a percent)                     2.65%      
CNB Facility | Revolving Credit Facility - Optional Funding Period                            
Funding agreements                            
Extension period of maturity date                     12 months      
MetLife Facility | Secured revolving funding facility                            
Funding agreements                            
Non-utilization fee on average available balance (basis points)                     0.25%      
Non-utilization threshold percentage (less than) (as a percent)             65.00%       65.00%      
MetLife Facility | CNB Facility                            
Funding agreements                            
Non-utilization fee                     $ 247,000 $ 162,000 $ 7,000  
MetLife Facility | Revolving master repurchase facility                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 180,000,000       $ 180,000,000      
Number of extension periods available for maturity date | extension             1       1      
Extension period of maturity date                     12 months      
MetLife Facility | Revolving master repurchase facility | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     2.50%      
MetLife Facility | Revolving master repurchase facility | Maximum                            
Funding agreements                            
Covenant ratio of debt to tangible net worth                     4.50      
Covenant ratio of recourse debt to tangible net worth                     3.00      
Covenant ratio of EBITDA to fixed charges                     1.25      
MetLife Facility | Revolving credit facility, optional commitment amount | Minimum                            
Funding agreements                            
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained                     80.00%      
Morgan Stanley Facility | Revolving master repurchase facility                            
Funding agreements                            
Line of credit facility, maximum borrowing capacity             $ 250,000,000       $ 250,000,000      
Number of extension periods available for maturity date | extension             1       1      
Extension period of maturity date                     12 months      
Morgan Stanley Facility | Revolving master repurchase facility | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     2.25%      
Morgan Stanley Facility | Revolving master repurchase facility | Minimum | 30 day LIBOR                            
Funding agreements                            
Interest rate margin (as a percent)                     1.75%      
Morgan Stanley Facility | Revolving credit facility, optional commitment amount                            
Funding agreements                            
Covenant liquidity to be maintained as percentage of recourse indebtedness                     5.00%      
Morgan Stanley Facility | Revolving credit facility, optional commitment amount | Minimum                            
Funding agreements                            
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained                     80.00%      
Covenant amount of liquidity to be maintained                     $ 5,000,000      
Morgan Stanley Facility | Revolving credit facility, optional commitment amount | Maximum                            
Funding agreements                            
Covenant ratio of EBITDA to fixed charges                     1.25      
Covenant amount of liquidity to be maintained                     $ 10,000,000      
Notes Payable | Secured revolving funding facility                            
Funding agreements                            
Covenant liquidity to be maintained as percentage of recourse indebtedness                     5.00%      
Notes Payable | Secured revolving funding facility | Minimum                            
Funding agreements                            
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained                     80.00%      
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained                     80.00%      
Covenant amount of liquidity to be maintained                     $ 5,000,000      
Notes Payable | Secured revolving funding facility | Maximum                            
Funding agreements                            
Covenant amount of liquidity to be maintained                     $ 10,000,000      
Notes Payable | Notes Payable, Due June 10, 2024 | NEW YORK                            
Funding agreements                            
Number of extension periods available for maturity date | extension             1       1      
Extension period of maturity date                     6 months      
Interest expense from real estate owned       $ 28,300,000                    
ACRC Lender CO LLC                            
Funding agreements                            
Outstanding Balance   $ 105,000,000                        
ACRC Lender CO LLC | NEW YORK | Multifamily | Senior Mortgage Loans                            
Funding agreements                            
Outstanding Balance   105,000,000                        
Outstanding principal   $ 133,000,000                        
ACRC Lender CO LLC | Notes Payable                            
Funding agreements                            
Extension period of maturity date   12 months                        
Number of extension options | loan   2                        
v3.22.4
DEBT - Schedule of Maturity (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Debt Instrument [Line Items]  
2023 $ 0
2024 198,193
2025 612,038
2026 150,000
2027 0
Thereafter 0
Long-term debt 960,231
Wells Fargo Facility  
Debt Instrument [Line Items]  
2023 0
2024 0
2025 270,798
2026
2027 0
Thereafter 0
Long-term debt 270,798
Citibank Facility  
Debt Instrument [Line Items]  
2023 0
2024 0
2025 236,240
2026 0
2027 0
Thereafter 0
Long-term debt 236,240
CNB Facility  
Debt Instrument [Line Items]  
2023 0
2024 0
2025 0
2026 0
2027 0
Thereafter 0
Long-term debt 0
MetLife Facility  
Debt Instrument [Line Items]  
2023 0
2024 0
2025 0
2026 0
2027 0
Thereafter 0
Long-term debt 0
Morgan Stanley Facility  
Debt Instrument [Line Items]  
2023 0
2024 198,193
2025
2026 0
2027 0
Thereafter 0
Long-term debt 198,193
Notes Payable  
Debt Instrument [Line Items]  
2023 0
2024 0
2025 105,000
2026
2027 0
Thereafter 0
Long-term debt 105,000
Secured term loan  
Debt Instrument [Line Items]  
2023 0
2024 0
2025 0
2026 150,000
2027 0
Thereafter 0
Long-term debt $ 150,000
v3.22.4
SECURED BORROWINGS (Details) - USD ($)
 1 Months Ended 12 Months Ended
Nov. 30, 2019
Jul. 31, 2022
Apr. 30, 2019
Dec. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]          
Outstanding Balance       $ 960,231,000 $ 1,041,157,000
Notes Payable          
Debt Instrument [Line Items]          
Outstanding Balance $ 23,500,000        
Extension period of maturity date 12 months        
Interest rate margin (as a percent)       3.75%  
NORTH CAROLINA | Multifamily          
Debt Instrument [Line Items]          
Repayments of debt   $ 30,500,000      
NORTH CAROLINA | Notes Payable          
Debt Instrument [Line Items]          
Aggregate principal amount     $ 30,500,000    
Outstanding Balance     24,400,000    
NORTH CAROLINA | Notes Payable | Multifamily          
Debt Instrument [Line Items]          
Outstanding Balance     $ 6,100,000    
NORTH CAROLINA | Notes Payable | Multifamily | Senior Mortgage Loan Purchased          
Debt Instrument [Line Items]          
Outstanding Balance   $ 24,400,000      
NORTH CAROLINA | Senior Mortgage Loans          
Debt Instrument [Line Items]          
Extension period of maturity date     12 months    
NORTH CAROLINA | Senior Mortgage Loan, Due May 5, 2023 | Office          
Debt Instrument [Line Items]          
Interest rate margin (as a percent)     2.50%    
v3.22.4
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Interest Rate Derivatives (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
derivative
Dec. 31, 2021
USD ($)
derivative
Derivative [Line Items]    
Floor rate (percent) 0.0000  
Other comprehensive income $ 4,697 $ 2,844
Interest rate caps | LIBOR    
Derivative [Line Items]    
Notional Amount 170,000  
Other comprehensive income 2,000  
Gain on derivative $ 1,000  
Designated as Hedging Instrument | Interest rate swaps | LIBOR    
Derivative [Line Items]    
Number of Instruments | derivative 1 1
Notional Amount $ 410,000 $ 700,000
Interest rate swaps, fixed rate (percent) 0.2075% 0.2075%
Weighted Average Maturity (Years) 4 months 24 days 1 year
Designated as Hedging Instrument | Interest rate caps | LIBOR    
Derivative [Line Items]    
Number of Instruments | derivative 0 1
Notional Amount $ 0 $ 220
Interest rate caps, fixed rate (percent) 0.50% 0.50%
Weighted Average Maturity (Years)   1 year
v3.22.4
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Fair Value of Derivative Instruments (Details) - Designated as Hedging Instrument - Interest rate derivatives - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Other Assets    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivatives in an Asset Position $ 6,565 $ 2,979
Other Liabilities    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivatives in an Liability Position $ 0 $ 0
v3.22.4
COMMITMENTS AND CONTINGENCIES - Commitments to Fund (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]    
Total commitments $ 2,510,308 $ 2,662,853
Less: funded commitments (2,282,821) (2,429,112)
Total unfunded commitments $ 227,487 $ 233,741
v3.22.4
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
May 20, 2022
May 17, 2022
Nov. 22, 2019
Dec. 31, 2022
Dec. 31, 2021
Jul. 26, 2022
Dec. 31, 2020
Jun. 30, 2018
Class of Stock [Line Items]                
Share repurchase program, authorized amount.           $ 50.0    
Cost not yet recognized, amount       $ 8.0 $ 6.0   $ 3.7  
Period for recognition       2 years 3 months 18 days        
Restricted stock | Amended and Restated 2012 Equity Incentive Plan                
Class of Stock [Line Items]                
Shares available for grant (in shares)               2,490,000
Restricted Stock and Restricted Stock Units | Amended and Restated 2012 Equity Incentive Plan | Minimum                
Class of Stock [Line Items]                
Award vesting period (in years)       1 year        
Restricted Stock and Restricted Stock Units | Amended and Restated 2012 Equity Incentive Plan | Maximum                
Class of Stock [Line Items]                
Award vesting period (in years)       3 years        
Common Stock | At the Market Stock Offering Program                
Class of Stock [Line Items]                
Sale of stock, consideration received on transaction       $ 2.9 $ 2.1      
Sale of stock, shares issued in transaction (in shares)       190,369 137,237      
Sale of stock, share price (in dollars per share)       $ 15.33 $ 15.68      
Common Stock | At the Market Stock Offering Program | Maximum                
Class of Stock [Line Items]                
Sale of stock, consideration received on transaction     $ 100.0          
Common Stock | Equity Offerings                
Class of Stock [Line Items]                
Sale of stock, consideration received on transaction $ 103.2              
Sale of stock, shares issued in transaction (in shares)   7,000,000            
v3.22.4
STOCKHOLDERS' EQUITY - Disclosures (Details)
 12 Months Ended
Dec. 31, 2022
shares
Restricted stock activity  
Balance at the beginning of the period (in shares) 539,174
Granted (in shares) 458,930
Vested (in shares) (135,432)
Forfeited (in shares) (14,063)
Balance at the end of the period (in shares) 848,609
Future Anticipated Vesting Schedule  
2023 (in shares) 182,326
2024 (in shares) 287,073
2025 (in shares) 234,514
2026 (in shares) 144,696
2027 (in shares) 0
Total (in shares) 848,609
Restricted stock | Restricted Stock Grants—Directors  
Restricted stock activity  
Balance at the beginning of the period (in shares) 16,640
Granted (in shares) 24,780
Vested (in shares) (25,283)
Forfeited (in shares) 0
Balance at the end of the period (in shares) 16,137
Future Anticipated Vesting Schedule  
2023 (in shares) 14,052
2024 (in shares) 1,668
2025 (in shares) 417
2026 (in shares) 0
2027 (in shares) 0
Total (in shares) 16,137
Restricted stock | Officers and Employees of the Manager  
Restricted stock activity  
Balance at the beginning of the period (in shares) 25,373
Granted (in shares) 0
Vested (in shares) (25,373)
Forfeited (in shares) 0
Balance at the end of the period (in shares) 0
Future Anticipated Vesting Schedule  
2023 (in shares) 0
2024 (in shares) 0
2025 (in shares) 0
2026 (in shares) 0
2027 (in shares) 0
Total (in shares) 0
Restricted Stock Units (RSUs) | Officers and Employees of the Manager  
Restricted stock activity  
Balance at the beginning of the period (in shares) 497,161
Granted (in shares) 434,150
Vested (in shares) (84,776)
Forfeited (in shares) (14,063)
Balance at the end of the period (in shares) 832,472
Future Anticipated Vesting Schedule  
2023 (in shares) 168,274
2024 (in shares) 285,405
2025 (in shares) 234,097
2026 (in shares) 144,696
2027 (in shares) 0
Total (in shares) 832,472
v3.22.4
STOCKHOLDERS' EQUITY - Disclosures (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Restricted Stock and Restricted Stock Units      
Equity Incentive Plan      
Compensation expense $ 2,876,000 $ 1,940,000  
Total fair value of shares vested 1,961,000 1,469,000  
Weighted average grant date fair value 5,044,000 4,658,000  
Restricted stock      
Equity Incentive Plan      
Compensation expense     $ 1,339,000
Total fair value of shares vested     1,164,000
Weighted average grant date fair value     3,190,000
Restricted Stock Grants—Directors | Restricted Stock and Restricted Stock Units      
Equity Incentive Plan      
Compensation expense 399,000 329,000  
Total fair value of shares vested 338,000 460,000  
Weighted average grant date fair value 390,000 403,000  
Restricted Stock Grants—Directors | Restricted stock      
Equity Incentive Plan      
Compensation expense     319,000
Total fair value of shares vested     315,000
Weighted average grant date fair value     292,000
Officers and Employees of the Manager | Restricted Stock and Restricted Stock Units      
Equity Incentive Plan      
Compensation expense 2,477,000 1,611,000  
Total fair value of shares vested 1,623,000 1,009,000  
Weighted average grant date fair value $ 4,654,000 $ 4,255,000  
Officers and Employees of the Manager | Restricted stock      
Equity Incentive Plan      
Compensation expense     1,020,000
Total fair value of shares vested     849,000
Weighted average grant date fair value     $ 2,898,000
v3.22.4
EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Earnings Per Share [Abstract]      
Net income attributable to common stockholders, basic $ 29,785 $ 60,460 $ 21,840
Net income attributable to common stockholders, diluted $ 29,785 $ 60,460 $ 21,840
Divided by:      
Basic weighted average shares of common stock outstanding (in shares) 51,679,744 42,399,613 32,977,462
Weighted average non-vested restricted stock and RSUs (in shares) 446,512 281,892 219,046
Diluted weighted average shares of common stock outstanding (in shares) 52,126,256 42,681,505 33,196,508
Basic earnings per common share (in dollars per share) $ 0.58 $ 1.43 $ 0.66
Diluted earnings per common share (in dollars per share) $ 0.57 $ 1.42 $ 0.66
v3.22.4
INCOME TAX - Schedule of Components of Income Tax (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Components of the company's income tax provision      
Total income tax expense, including excise tax $ 472 $ 722 $ 352
Excise tax rate 4.00%    
ACRE Capital Sale      
Components of the company's income tax provision      
Current $ 42 450 82
Deferred 0 0 (99)
Excise tax 430 272 369
Total income tax expense, including excise tax $ 472 $ 722 $ 352
v3.22.4
FAIR VALUE - Available-For-Sale Debt Securities - Narrative (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2022
USD ($)
investment
loan
Dec. 31, 2021
investment
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]    
Number of debt securities for an aggregate purchase price | loan 3  
Debt securities for an aggregate purchase price | $ $ 27.9  
Debt securities, available-for-sale, term 10 years  
Number of debt security investments | investment 3 0
SOFR    
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]    
Debt securities floating Rate, investment grade rated 247.00%  
v3.22.4
FAIR VALUE - Available-For-Sale Debt Securities (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
Fair Value Disclosures [Abstract]  
Face Amount $ 28,000
Amortized Cost 27,881
Unamortized Discount 119
Unrealized Gain (Loss), Net $ 55
v3.22.4
FAIR VALUE - Derivative Assets and Liabilities, Recurring (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Interest rate derivatives    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: $ 6,565 $ 2,979
Financial liabilities: 0 0
Interest rate derivatives | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: 0 0
Financial liabilities: 0 0
Interest rate derivatives | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: 6,565 2,979
Financial liabilities: 0 0
Interest rate derivatives | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: 0 0
Financial liabilities: 0 $ 0
Available-for-sale debt securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: 27,936  
Available-for-sale debt securities | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: 0  
Available-for-sale debt securities | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: 27,936  
Available-for-sale debt securities | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets: $ 0  
v3.22.4
FAIR VALUE - Carrying Value and Fair Value (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Financial assets:    
Loans held for investment $ 2,264,008 $ 2,414,383
Financial liabilities:    
Collateralized loan obligation securitization debt (consolidated VIEs) 777,675 861,188
Carrying Value    
Financial assets:    
Loans held for investment 2,264,008 2,414,383
Financial liabilities:    
Secured funding agreements 705,231 840,047
Notes payable 104,460 50,358
Secured term loan 149,200 149,016
Collateralized loan obligation securitization debt (consolidated VIEs) 777,675 861,188
Secured borrowings 0 22,589
Fair Value | Level 3    
Financial assets:    
Loans held for investment 2,233,319 2,408,463
Financial liabilities:    
Notes payable 103,635 51,110
Secured term loan 137,571 150,000
Collateralized loan obligation securitization debt (consolidated VIEs) 749,242 863,403
Secured borrowings 0 22,715
Fair Value | Level 2    
Financial liabilities:    
Secured funding agreements $ 705,231 $ 840,047
v3.22.4
RELATED PARTY TRANSACTIONS - Narrative (Details)
 3 Months Ended 12 Months Ended
Mar. 31, 2022
USD ($)
Dec. 31, 2022
USD ($)
quarter
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Related Party Transaction [Line Items]        
Amended agreement to exclude real estate revenues from net income $ 2,400,000      
Amended agreement to include gain on termination of interest rate cap derivative $ 2,000,000      
Incentive fees incurred   $ 3,400,000 $ 2,800,000 $ 800,000
Management fee renewal term (in years)   1 year    
Management agreement termination, termination fee times average annual base management free and incentive fees received   300.00%    
Management fee look back period   24 months    
Loans held for investment   $ 2,264,008,000 2,414,383,000  
Outstanding principal   2,282,821,000 2,429,112,000  
Residential        
Related Party Transaction [Line Items]        
Loans held for investment   213,700,000 $ 158,300,000  
Senior Mortgage Loans | Industrial | Loan Purchase Commitments        
Related Party Transaction [Line Items]        
Outstanding principal   $ 200,000,000    
ACREM        
Related Party Transaction [Line Items]        
Base management fees as a percentage of stockholders' equity per annum   1.50%    
Incentive fee payable (not less than)   $ 0    
Percentage multiplied to arrive at first value affecting calculation of incentive fees   20.00%    
Previous period for which core earnings are considered to arrive at first value affecting calculation of incentive fees   12 months    
Previous period for product of weighted average price per share and weighted average number of shares of common stock and other shares   12 months    
Percentage multiplied to arrive at difference of first value affecting calculation of incentive fees   8.00%    
Period whose fiscal quarters are considered to arrive at first value affecting calculation of incentive fees   12 months    
Minimum cumulative core earnings, number of quarters | quarter   12    
Minimum cumulative core earnings for calculation of incentive fee   $ 0    
v3.22.4
RELATED PARTY TRANSACTIONS - Related Party Costs Incurred (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Related Party Transaction [Line Items]      
Payable $ 5,580 $ 4,156  
ACREM | Continuing Operations      
Related Party Transaction [Line Items]      
Incurred 18,840 15,161 $ 11,912
Payable 5,580 4,156  
ACREM | Continuing Operations | Management fees      
Related Party Transaction [Line Items]      
Incurred 11,456 9,384 7,323
Payable 3,026 2,613  
ACREM | Continuing Operations | Incentive fees      
Related Party Transaction [Line Items]      
Incurred 3,442 2,752 836
Payable 1,264 830  
ACREM | Continuing Operations | General and administrative expenses      
Related Party Transaction [Line Items]      
Incurred 3,777 3,016 3,653
Payable 1,232 703  
ACREM | Continuing Operations | Direct costs      
Related Party Transaction [Line Items]      
Incurred 165 9 $ 100
Payable $ 58 $ 10  
v3.22.4
DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Nov. 02, 2022
Jul. 29, 2022
May 03, 2022
Feb. 15, 2022
Nov. 03, 2021
Jul. 30, 2021
May 04, 2021
Feb. 17, 2021
Dec. 15, 2020
Sep. 16, 2020
Jun. 19, 2020
Feb. 20, 2020
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
DIVIDENDS AND DISTRIBUTIONS                              
Dividends per share amount declared (in dollars per share) $ 0.35 $ 0.35 $ 0.35 $ 0.35 $ 0.35 $ 0.35 $ 0.35 $ 0.35 $ 0.33 $ 0.33 $ 0.33 $ 0.33 $ 1.40 $ 1.40 $ 1.32
Total cash dividends $ 19,347 $ 19,196 $ 19,198 $ 16,740 $ 16,674 $ 16,524 $ 16,528 $ 14,248 $ 11,124 $ 11,072 $ 11,072 $ 11,057 $ 74,481 $ 63,974 $ 44,325
Cash dividends payable (in dollars per share)                         $ 0.33    
Supplemental cash dividend payable (in dollars per share)                         $ 0.02    
v3.22.4
VARIABLE INTEREST ENTITIES - Narrative (Details)
$ in Thousands
 12 Months Ended
Jan. 28, 2021
USD ($)
Dec. 31, 2022
USD ($)
loan
Dec. 31, 2021
USD ($)
loan
Dec. 31, 2020
USD ($)
Jan. 11, 2019
USD ($)
Mar. 30, 2017
USD ($)
Variable Interest Entity [Line Items]            
Debt commitment   $ 960,231        
Financing receivable, unpaid principal balance   127,600 $ 105,400      
Loans held for investment   2,264,008 2,414,383      
Sale of common stock   106,267 $ 204,779 $ 73,232    
Credit risk, financial instrument, maximum exposure   238,200        
ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | Preferred Stock            
Variable Interest Entity [Line Items]            
Sale of common stock $ 64,300          
ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | Preferred Stock | Wholly Owned Subsidiary To Parent Company            
Variable Interest Entity [Line Items]            
Sale of common stock   $ 64,300        
Floating Rate Notes, Weighted Average Coupon Rate, LIBOR Plus 1.85%            
Variable Interest Entity [Line Items]            
Number of properties collateralized for mortgage loan | loan   16 16      
Receivables related to repayments of outstanding principal   $ 429,400 $ 451,600      
Mortgaged Assets | Holdco            
Variable Interest Entity [Line Items]            
Principal amount of certificates retained by wholly owned subsidiary of the entity   58,500        
Offered Certificates | Parent Company            
Variable Interest Entity [Line Items]            
Preferred equity fully funded amount   52,900        
Secured funding agreements | Parent Company            
Variable Interest Entity [Line Items]            
Loans held for investment   111,400        
Secured, Floating Rate Notes | ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC            
Variable Interest Entity [Line Items]            
Aggregate principal amount $ 603,000          
Secured, Floating Rate Notes | ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | Wholly Owned Subsidiary To Parent Company            
Variable Interest Entity [Line Items]            
Aggregate principal amount   62,500        
Collateral amount   126,800        
Repayments of debt   $ 85,900        
FL4 Mortgage Assets            
Variable Interest Entity [Line Items]            
Number of properties collateralized for mortgage loan | loan   12 17      
Receivables related to repayments of outstanding principal   $ 458,300 $ 522,800      
Financing Receivable, Excluding Accrued Interest, Receivables Related to Repayments of Outstanding Principal on Mortgage Assets   $ 1,900 $ 23,200      
Wells Fargo Facility | Notes Payable            
Variable Interest Entity [Line Items]            
Debt commitment           $ 308,800
Wells Fargo Facility | Notes Payable | 2019 FL3 CLO Securitization            
Variable Interest Entity [Line Items]            
Debt commitment         $ 504,100  
Wells Fargo Facility | Collateralized Loan Obligations            
Variable Interest Entity [Line Items]            
Debt commitment           $ 32,400
Wells Fargo Facility | Collateralized Loan Obligations | 2019 FL3 CLO Securitization            
Variable Interest Entity [Line Items]            
Debt commitment         $ 52,900  
v3.22.4
SUBSEQUENT EVENTS (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jan. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Mar. 31, 2023
Feb. 14, 2023
Subsequent Event [Line Items]            
Outstanding principal   $ 2,282,821,000 $ 2,429,112,000      
Proceeds from sale of loans held for sale   $ 0 $ 0 $ 96,597,000    
Cash dividends payable (in dollars per share)   $ 0.33        
Supplemental cash dividend payable (in dollars per share)   $ 0.02        
Senior Mortgage Loans | CA | Residential            
Subsequent Event [Line Items]            
Outstanding principal   $ 14,300,000        
Subsequent Event            
Subsequent Event [Line Items]            
Cash dividends payable (in dollars per share)         $ 0.33  
Supplemental cash dividend payable (in dollars per share)         $ 0.02  
Subsequent Event | CA | Residential            
Subsequent Event [Line Items]            
Proceeds from sale of loans held for sale $ 10,000,000          
Proceeds from Loans $ 9,800,000          
Subsequent Event | Senior Mortgage Loans | IL | Office            
Subsequent Event [Line Items]            
Outstanding principal           $ 27,200,000
Subsequent Event | Senior Mortgage Loans | CA | Mixed-use            
Subsequent Event [Line Items]            
Outstanding principal           37,900,000
Subsequent Event | Senior Mortgage Loans | FL | Mixed-use            
Subsequent Event [Line Items]            
Outstanding principal           $ 84,000,000
v3.22.4
Label Element Value
Accounting Standards Update [Extensible Enumeration] us-gaap_AccountingStandardsUpdateExtensibleList Accounting Standards Update 2016-13 [Member]