Climate Change Data

Environmental Metrics

Social Achievements

• Implemented changes in response to the COVID-19 pandemic, including remote work and flexible return-to-work strategies, and additional safety measures for on-site personnel.
• Conducted annual company-wide training for cybersecurity, anti-harassment, and diversity and inclusion, and actively reviewed anti-discrimination, anti-harassment, retaliation, and whistleblower policies.

Climate Goals & Targets

Environmental Challenges

• Ongoing COVID-19 pandemic and its impact on the global and U.S. economies and commercial real estate markets.
• LIBOR transition and the need to transition to alternative reference rates.
• Increased competition from entities engaged in mortgage lending and/or investing in target assets.
• Potential for credit losses in excess of initial anticipations or unanticipated credit events experienced by borrowers.
• ESG risks associated with potential collateral and borrowers.
• Cybersecurity incidents and cyberattacks.

Mitigation Strategies

• Actively engaged in discussions with borrowers and agreed to near-term loan modifications in some instances.
• Increased liquidity position during 2020 and 2021.
• Monitoring developments with respect to the potential phasing out of LIBOR and working with lenders and borrowers to minimize the impact.
• Diversifying investment portfolio across geographical regions and local markets, property types, borrowers, and loan structures.
• Incorporating diligence practices into the investment process to identify material ESG matters.
• Implementing various measures to manage risks relating to cybersecurity threats.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency or intensity of adverse weather and natural disasters

Transition Risks

• Government restrictions, standards, or regulations intended to reduce greenhouse gas emissions and potential climate change impacts

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• the general political, economic and competitive conditions in the markets in which we invest, including with respect to the lagging effects of the COVID-19 pandemic on various subsectors of the real estate market and their impact on our loan portfolio, financial condition and business operations, such as the impact of work-from-home dynamics on office properties
• inflationary trends, spurred by multiple factors including high commodity prices, a tight labor market, and low residential vacancy rates, may result further in interest rate increases and lead to increased market volatility
• higher interest rates imposed by the Federal Reserve, which may lead to a decrease in prepayment timing and an increase in the number of our borrowers who exercise extension options, which could extend beyond the term of certain secured financing agreements we use to finance our loan investments
• the economic impact of escalating global trade tensions, including the conflict between Russia and Ukraine and the adoption or expansion of economic sanctions or trade restrictions
• reduced demand for office, multifamily or retail space, including as a result of hybrid work schedules which allow work from remote locations other than the employer's office premises
• defaults by borrowers in paying debt service on outstanding indebtedness and borrowers' abilities to manage and stabilize properties
• our ability to obtain or maintain financing arrangements on terms favorable to us or at all
• the level and volatility of prevailing interest rates and credit spreads
• reductions in the yield on our investments and increases in the cost of our financing
• general volatility of the securities markets in which we participate and the potential need to post additional collateral on our financing arrangements
• the return or impact of current or future investments
• changes in our business, investment strategies or target investments
• increased competition from entities investing in our target investments
• effects of hedging instruments on our target investments
• changes in governmental regulations, tax law and rates and similar matters
• our ability to maintain our qualification as a real estate investment trust for U.S. federal income tax purposes and our exclusion from registration under the Investment Company Act of 1940, as amended
• availability of desirable investment opportunities
• threats to information security, including by way of cyber-attacks
• availability of qualified personnel
• operational failures by third parties on whom we rely in the conduct of our business
• estimates relating to our ability to make distributions to our stockholders in the future
• acts of God, such as hurricanes, earthquakes and other natural disasters, including climate change-related risks, acts of war and/or terrorism, pandemics or outbreaks of infectious disease and other events that may cause unanticipated and uninsured performance declines and/or losses to us or the owners and operators of the real estate securing our investments
• deterioration in the performance of the properties securing our investments that may cause deterioration in the performance of our investments, risks in collection of contractual interest payments and, potentially, principal losses to us, including the risk of credit loss charges and any impact on our ability to satisfy the covenants and conditions in our debt agreements
• difficulty or delays in redeploying the proceeds from repayments of our existing investments

Mitigation Strategies

• matching benchmark indices on our assets with those on our asset level borrowings
• diversifying our investment portfolio across geographical regions and local markets, property types, borrowers and loan structures
• actively manage each loan investment from closing and initial funding through final repayment and assess the risk of credit deterioration by quarterly evaluating the performance of the underlying collateral properties
• We also evaluate the macroeconomic environment, prevailing real estate fundamentals and local property market dynamics.
• We maintain strong relationships and an active asset management dialogue with our borrowers.
• We have leveraged those strong relationships to maximize the performance of our portfolio, including during periods of economic uncertainty and market volatility.
• performing deep fundamental credit analysis of our potential investments, as well as seeking to originate or acquire assets of higher quality at appropriate rates of return given anticipated and unanticipated losses, by employing a comprehensive review and selection process and by proactively monitoring our investments.
• monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise
• rigorous and fundamentally driven underwriting and investment management processes

Supply Chain Management

Climate-Related Risks & Opportunities