The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and the related notes of Ladder Capital Corp included within this
report and the Annual Report. This Management's Discussion and Analysis of
Financial Condition and Results of Operations contains forward-looking
statements. See "Cautionary Statement Regarding Forward-Looking Statements"
within this Quarterly Report and "Risk Factors" within the Annual Report for a
discussion of the uncertainties, risks and assumptions associated with these
statements. Actual results may differ materially from those contained in any
forward-looking statements as a result of various factors, including but not
limited to, those in "Risk Factors" set forth within the Annual Report.
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References to "Ladder," the "Company," and "we," "our" and "us" refer to Ladder
Capital Corp, a Delaware corporation incorporated in 2013, and its consolidated
subsidiaries.
Overview
Ladder Capital Corp is an internally-managed real estate investment trust
("REIT") that is a leader in commercial real estate finance. We originate and
invest in a diverse portfolio of commercial real estate and real estate-related
assets, focusing on senior secured assets. Our investment activities include:
(i) our primary business of originating senior first mortgage fixed and floating
rate loans collateralized by commercial real estate with flexible loan
structures; (ii) owning and operating commercial real estate, including net
leased commercial properties; and (iii) investing in investment grade securities
secured by first mortgage loans on commercial real estate. We believe that our
in-house origination platform, ability to flexibly allocate capital among
complementary product lines, credit-centric underwriting approach, access to
diversified financing sources, and experienced management team position us well
to deliver attractive returns on equity to our shareholders through economic and
credit cycles.
Our businesses, including balance sheet lending, conduit lending, securities
investments, and real estate investments, provide for a stable base of net
interest and rental income. We have originated $29.7 billion of commercial real
estate loans from our inception in October 2008 through March 31, 2023. During
this timeframe, we also acquired $13.1 billion of predominantly investment
grade-rated securities secured by first mortgage loans on commercial real estate
and $2.0 billion of selected net leased and other real estate assets.
As part of our commercial mortgage lending operations, we originate conduit
loans, which are first mortgage loans on stabilized, income producing commercial
real estate properties that we intend to make available for sale in commercial
mortgage-backed securities ("CMBS") securitizations. From our inception in
October 2008 through March 31, 2023, we originated $16.9 billion of conduit
loans, of which $16.8 billion were sold into 71 CMBS securitizations, making us,
by volume, the second largest non-bank contributor of loans to CMBS
securitizations in the United States in such period. Our sales of loans into
securitizations are generally accounted for as true sales, not financings, and
we generally retain no ongoing interest in loans which we securitize unless we
are required to do so as issuer pursuant to the risk retention requirements of
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as
amended, (the "Dodd-Frank Act"). The securitization of conduit loans enables us
to reinvest our equity capital into new loan originations or allocate it to
other investments.
As of March 31, 2023, we had $5.9 billion in total assets and $1.5 billion of
total equity. Our assets primarily included $3.8 billion of loans, $693.3
million of real estate, $520.0 million of securities and $626.1 million of
unrestricted cash.
We maintain a diversified and flexible financing strategy supporting our
investment strategy and overall business operations, including the use of
unsecured corporate bonds, non-recourse, non-mark-to-market CLO debt issuances
and committed term financing from leading financial institutions. Refer to "Our
Financing Strategies" and "Liquidity and Capital Resources" for further
information.
Ladder was founded in October 2008 and we completed our IPO in February 2014. We
are led by a disciplined and highly aligned management team. As of March 31,
2023, our management team and directors held interests in our Company comprising
over 10% of our total equity. On average, our management team members have over
26 years of experience in the industry. Our management team includes Brian
Harris, Chief Executive Officer; Pamela McCormack, President; Paul J. Miceli,
Chief Financial Officer; Robert Perelman, Head of Asset Management; and Kelly
Porcella, Chief Administrative Officer & General Counsel. Anthony V. Esposito,
Chief Accounting Officer, is an additional officer of Ladder. As of March 31,
2023, we employed 63 full-time industry professionals.
We continue to actively manage the liquidity and operations of the Company in
light of market conditions, including rising interest rates and potential
recessionary conditions. The Company has disclosed the impact of current market
conditions on our business throughout this Quarterly Report.
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