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| Maryland                                                         (State      or other  jurisdictionof      incorporation or organization) |  _____20-2287134(I.R.S.      EmployerIdentification      No.) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
| 712      5th      Avenue, 10th      Floor, New York, NY 10019                                                                                                                                                                                                                                                                                                                                                                                    |
| (Address      of principal executive offices) (Zip code)                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (212)      506-3870                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (Registrant’s      telephone number, including area code)                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Securities      registered pursuant to Section 12(b) of the Act:                                                                                                                                                                                                                                                                                                                                                                                 |
| Common      Stock, $.001 par value                                                                                                                                                                                                                                                                                                                                                                                                               | New      York Stock Exchange (NYSE)                                |
| Title of each class                                                                                                                                                                                                                                                                                                                                                                                                                              | Name of each exchange on which      registered                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                               |
| Securities      registered pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                                                                                                                                                 |
| None                                                                                                                                                                                                                                                                                                                                                                                                                                             |

| Large      accelerated      filer                                       |  o |                                               | Accelerated      filer                                   |  R |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
| Non-accelerated      filer                                              |  o | (Do      not check if a smaller reporting company) | Smaller      reporting company                                                                                                                                                                                                     |  o |

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INDEX TO ANNUAL REPORT

|          |                                  | Page                                                                                                                  |
|---------------|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------|
|          |  Forward-Looking      Statements |                                                                                                                  |
| PART      I   |                                  |                                                                                                                  |
|          | Item 1:                               | Business                                                                                                              |  3 |
|          | Item 1A:                              | Risk Factors                                                                                                          |  14 |
|          | Item 1B:                              | Unresolved Staff Comments                                                                                             |  30 |
|          | Item 2:                               | Properties                                                                                                            |  30 |
|          | Item 3:                               | Legal Proceedings                                                                                                     |  31 |
|          | Item 4:                               | [Omitted and Reserved]                                                                                                |  31 |
| PART      II  |                                  |                                                                                                                  |
|          | Item 5:                               | Market for Registrant's Common Equity, Related Stockholder      Matters and IssuerPurchases of      Equity Securities |  31 |
|          | Item 6:                               | Selected Financial Data                                                                                               |  33 |
|          | Item 7:                               | Management’s Discussion and Analysis of Financial Condition      andResults of      Operations                  |  34 |
|          | Item 7A:                              | Quantitative and Qualitative Disclosures About Market      Risk                                                       |  60 |
|          | Item 8:                               | Financial Statements and Supplementary Data                                                                           |  62 |
|          | Item 9:                               | Changes and Disagreements with Accountants on      Accounting andFinancial      Disclosure                       | 101 |
|          | Item 9A:                              | Controls and Procedures                                                                                               |  101 |
|          | Item 9B:                              | Other Information                                                                                                     |  103 |
| PART      III |                                  |                                                                                                                  |
|          | Item 10:                              | Directors, Executive Officers and Corporate Governance                                                                |  103 |
|          | Item 11:                              | Executive Compensation                                                                                                |  107 |
|          | Item 12:                              | Security Ownership of Certain Beneficial Owners and      Management andRelated      Stockholder Matters               |  112 |
|          | Item 13:                              | Certain Relationships and Related Transactions and Director      Independence                                         |  113 |
|          | Item 14:                              | Principal Accounting Fees and Services                                                                                |  116 |
| PART      IV  |                                  |                                                                                                                  |
|          | Item 15:                              | Exhibits and Financial Statement Schedules                                                                            |  116 |
| SIGNATURES    |  118                             |

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|   | · | the      factors described in this report, including those set forth under the      sections captioned “Risk Factors” and  “Business;” |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in our industry, interest rates, the debt securities markets, real estate      markets or the general economy; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | increased      rates of default and/or decreased recovery rates on our      investments; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | availability,      terms and deployment of capital; |
|--------|--------|-----------------------------------------------------|

|   | · | availability      of qualified personnel; |
|--------|--------|-------------------------------------------|

|   | · | changes      in governmental regulations, tax rates and similar  matters; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | changes      in our business strategy; |
|--------|--------|----------------------------------------|

|   | · | availability      of investment opportunities in commercial real estate-related and      commercial finance assets; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | the      degree and nature of ourcompetition; |
|--------|--------|-----------------------------------------------|

|   | · | the      adequacy of our cash reserves and working capital;  and |
|--------|--------|------------------------------------------------------------------|

|   | · | the      timing of cash flows, if any, from our  investments. |
|--------|--------|---------------------------------------------------------------|

| ITEM 1. | BUSINESS |
|---------|----------|

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| Asset      Class                           |   | Principal      Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Commercial      real estate-related assets |   | ·  First      mortgage loans, which we refer to as whole loans·       First priority interests in first mortgage real estate loans, which      we refer to as A notes·       Subordinated interests in first mortgage real estate loans, which      we refer to as B notes·       Mezzanine debt related to commercial real estate that is senior to      the borrower’s equity position but subordinated to other third-party      financing·       Commercial mortgage-backed securities, which we refer to as      CMBS  |
|                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Commercial      finance assets             |   | ·  Senior      secured corporate loans, which we refer to as bank loans·       Other asset-backed securities, which we refer to as other      ABS,·  Equipment      leases and notes, principally small- and middle-ticket commercial direct      financing leases and notes·  Debt      tranches of collateralized debt obligations and collateralized loan      obligations, which we refer to as CDOs and CLOs, respectively                                                                                                        |

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|                                                  |   | Amortized      cost |      |   | Estimated      fair value      (1) |   |      | Percent      of portfolio |   |   | Weighted      average coupon |   |
|-------------------------------------------------------|--------|---------------------|-----------|--------|------------------------------------|--------|-----------|---------------------------|--------|--------|------------------------------|--------|
| Loans      Held for Investment:                       |   |                |      |   |                               |   |      |                      |   |   |                         |   |
| Commercial real estate      loans:                    |   |                |      |   |                               |   |      |                      |   |   |                         |   |
| Mezzanine loans                                       |   | $                   | 182,686   |   |                               | $      | 176,117   |                      |   |   | 11.1%                        |   |   |   | 4.82% |   |
| B notes                                               |   |                | 81,477    |   |                               |   | 80,283    |                      |   |   |  5.0%                   |   |   |   | 6.07% |   |
| Whole loans                                           |   |                | 484,195   |   |                               |   | 460,612   |                      |   |   | 29.0%                        |   |   |   | 5.50% |   |
| Bank loans                                            |   |                | 865,501   |   |                               |   | 827,951   |                      |   |   | 52.1%                        |   |   |   | 2.91% |   |
|                                                  |   |                | 1,613,859 |   |                               |   | 1,544,963 |                      |   |   | 97.2%                        |   |   |   |   |   |
| Investments      in Available-for-Sale Securities:    |   |                |      |   |                               |   |      |                      |   |   |                         |   |   |   |   |   |
| CMBS                                                  |   |                | 92,110    |   |                               |   | 44,518    |                      |   |   |        2.8%             |   |   |   | 4.69% |   |
| Other ABS                                             |   |                | 24        |   |                               |   | 24        |                      |   |   | −%                     |   |   |   | 2.74% |   |
|                                                  |   |                | 92,134    |   |                               |   | 44,542    |                      |   |   |        2.8%             |   |   |   |   |   |
| Investments      in direct financing leases and notes |   |                | 2,067     |   |                               |   | 927       |                      |   |   | −%                     |   |   |   | 9.30% |   |
| Total portfolio/weighted      average                 |   | $                   | 1,708,060 |   |                               | $      | 1,590,432 |                      |   |   | 100.0%                       |   |   |   | 4.08% |   |

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| (1) | The      fair value of our investments represents our management’s estimate of the      price that a market participant would pay for such      assets.  Management bases this estimate on the underlying      interest rates and credit spreads for fixed-rate securities and, to the      extent available, quoted marketprices. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | CLO      securities                                                             | 3.8% |   |
|--------|---------------------------------------------------------------------------------|------|--------|
|   | Aerospace      and defense                                                      | 2.8% |   |
|   | Leisure,      Amusement, Motion Pictures, Entertainment                         | 2.8% |   |
|   | Buildings      and real estate                                                  | 2.2% |   |
|   | Beverage,      food and tobacco                                                 | 2.1% |   |
|   | Ecological                                                                      | 2.1% |   |
|   | Utilities                                                                       | 2.1% |   |
|   | Electronics                                                                     | 2.1% |   |
|   | Finance                                                                         | 2.1% |   |
|   | Containers,      packaging and glass                                            | 1.8% |   |
|   | Oil      and gas                                                                | 1.8% |   |
|   | Personal      and nondurable consumer products                                  | 1.7% |   |
|   | Machinery      (non-agriculture, non-construction, non-electronic)              | 1.2% |   |
|   | Cargo      transport                                                            | 0.9% |   |
|   | Mining,      steel, iron and non-precious metals                                | 0.7% |   |
|   | Textiles      and leather                                                       | 0.6% |   |
|   | Insurance                                                                       | 0.5% |   |
|   | Home      and office furnishings, housewares and durable consumer      products | 0.4% |   |
|   | Farming      and agriculture                                                    | 0.3% |   |

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|   | · | general      office equipment, such as office machinery, furniture and telephone and      computer systems; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | medical      and dental practices and equipment for diagnostic and treatment      use; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | energy      and climate control systems; |
|--------|--------|------------------------------------------|

|   | · | industrial      equipment, including manufacturing, material handling and electronic      diagnostic systems; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | agricultural      equipment and facilities. |
|--------|--------|---------------------------------------------|

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|   | · | A      monthly base management fee equal to 1/12th of the amount of our equity      multiplied by 1.50%.  Under the management agreement, ‘‘equity’’      is equal to the net proceeds from any issuance of shares of common stock      less offering related costs, plus or minus our retained earnings      (excluding non-cash equity compensation incurred in current or prior      periods) less any amounts we have paid for common stock      repurchases.  The calculation is adjusted for one-time events      due to changes in accounting principles generally accepted in the United      States, which we refer to as GAAP, as well as other non-cash charges, upon      approval of our independentdirectors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incentive      compensation calculated as follows: (i) twenty-five percent      (25%) of the dollar amount by which (A) our Adjusted Operating      Earnings (before Incentive Compensation but after the Base Management Fee)      for such quarter per Common Share (based on the weighted average number of      Common Shares outstanding for such quarter) exceeds (B) an      amount equal to (1) the weighted average of the price per share of      the Common Shares in the initial offering by us and the prices per share      of the Common Shares in any subsequent offerings by us, in each case at      the time of issuance thereof, multiplied by (2) the greater of      (a) 2.00% and (b) 0.50% plus one-fourth of the Ten Year Treasury      Rate for such quarter, multiplied by (ii) the weighted average number      of Common Shares outstanding during such quarter subject to adjustment; to      exclude events pursuant to changes in GAAP or the application of GAAP, as      well as non-recurring or unusual transactions or events, after discussion      between the Manager and the Independent Directors and approval by a      majority of the Independent Directors in the case of non-recurring or      unusual transactions orevents.  |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reimbursement      of out-of-pocket expenses and certain other costs incurred by the Manager      that relate directly to us and ouroperations. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Pursuant      to an amendment on October 16, 2009, the Manager will, in addition to a      Chief Financial Officer, provide us with three accounting professionals,      each of whom will be exclusively dedicated to our operations, and a      director of investor relations who will be 50% dedicated to our      operations.  The amendment also provides that we will reimburse      the Manager for the expense of the wages, salaries and benefits of the      Chief Financial Officer and three accounting professionals and 50% of the      salary and benefits of the director of investor  relations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      such shares are traded on a securities exchange, at the average of the      closing prices of the shares on such exchange over the thirty day period      ending three days prior to the issuance of such  shares; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      such shares are actively traded over-the-counter, at the average of the      closing bid or sales price as applicable over the thirty day period ending      three days prior to the issuance of such shares;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      there is no active market for such shares, at the fair market value as      reasonably determined in good faith by our board of    directors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | the      Manager’s continued material breach of any provision of the management      agreement following a period of 30 days after written notice      thereof; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      Manager’s fraud, misappropriation of funds, or embezzlement against      us; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | the      Manager’s gross negligence in the performance of its duties under the      management agreement; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | the      bankruptcy or insolvency of the Manager, or the filing of a voluntary      bankruptcy petition by the Manager; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | the      dissolution of the Manager; and |
|--------|--------|------------------------------------------|

|   | · | a      change of control (as defined in the management agreement) of the Manager      if a majority of our independent directors determines, at any point during      the 18 months following the change of control, that the change of control      was detrimental to the ability of the Manager to perform its duties in      substantially the same manner conducted before the change of      control. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 1A. | RISK      FACTORS |
|----------|-------------------|

|   | · | the      cash provided by our operating activities will not be sufficient to meet      required payments of principal andinterest, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      cost of financing may increase relative to the income from the assets      financed, reducing the income we have available to pay distributions,      and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      investments may have maturities that differ from the maturities of the      related financing and, consequently, the risk that the terms of any      refinancing we obtain will not be as favorable as the terms of existing      financing. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | If      we accumulate assets for a CDO on a short-term credit facility and do not      complete the CDO financing, or if a default occurs under the facility, the      short-term lender will sell the assets and we would be responsible for the      amount by which the original purchase price of the assets exceeds their      sale price, up to the amount of our investment or  guaranty. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      event of default under one short-term facility may constitute a default      under other credit facilities we may have, potentially resulting in asset      sales and losses to us, as well as increasing our financing costs or      reducing the amount of investable funds available to  us. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      may be unable to acquire a sufficient amount of eligible assets to      maximize the efficiency of a CDO issuance, which would require us to seek      other forms of term financing or liquidate the assets.  We may      not be able to obtain term financing on acceptable terms, or at all, and      liquidation of the assets may be at prices less than those we paid,      resulting in losses to us. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Using      short-term financing to accumulate assets for a CDO issuance may require      us to obtain new financing as the short-term financing      matures.  Residual financing may not be available on acceptable      terms, or at all.  Moreover, an increase in short-term interest      rates at the time that we seek to enter into new borrowings would reduce      the spread between the income on our assets and the cost of our      borrowings.  This would reduce returns on our assets, which      would reduce earnings and, in turn, cash available for distribution to our      stockholders. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      will lose money on our repurchase transactions if the counterparty to the      transaction defaults on its obligation to resell the underlying security      back to us at the end of the transaction term, or if the value of the      underlying security has declined as of the end of the term or if we      default on our obligations under the repurchase  agreements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Available      interest rate hedges may not correspond directly with the interest rate      risk against which we seekprotection. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      duration of the hedge may not match the duration of the related      liability. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Interest      rate hedging can be expensive, particularly during periods of rising and      volatile interest rates.  Hedging costs may include structuring      and legal fees and fees payable to hedge counterparties to execute the      hedge transaction. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Losses      on a hedge position may reduce the cash available to make distributions to      stockholders, and may exceed the amounts invested in the hedge      position. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      amount of income that a REIT may earn from hedging transactions, other      than through a TRS, is limited by federal tax provisions governing      REITs. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      credit quality of the party owing money on the hedge may be downgraded to      such an extent that it impairs our ability to sell or assign our side of      the hedging transaction. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      party owing money in the hedging transaction may default on its obligation      to pay. |
|--------|--------|--------------------------------------------------------------------------------------------------|

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|   | · | tenant      mix, success of tenant businesses and property management      decisions, |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | property      location and condition, |
|--------|--------|---------------------------------------|

|   | · | competition      from comparable types ofproperties, |
|--------|--------|------------------------------------------------------|

|   | · | changes      in laws that increase operating expense or limit rents that may be      charged, |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | any      need to address environmental contamination at the    property, |
|--------|--------|--------------------------------------------------------------------------|

|   | · | the      occurrence of any uninsured casualty at the  property, |
|--------|--------|-----------------------------------------------------------------|

|   | · | changes      in national, regional or local economic conditions and/or the conditions      of specific industry segments in which our lessees may      operate, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | declines      in regional or local real estatevalues, |
|--------|--------|-------------------------------------------------------|

|   | · | declines      in regional or local rental or occupancyrates, |
|--------|--------|--------------------------------------------------------------|

|   | · | increases      in interest rates, real estate tax rates and other operating      expenses, |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | increases      in costs of construction material; |
|--------|--------|---------------------------------------------------|

|   | · | changes      in governmental rules, regulations and fiscal policies, including      environmental legislation, and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | acts      of God, terrorism, social unrest and civil  disturbances. |
|--------|--------|---------------------------------------------------------------------|

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|   | · | There are ownership limits and      restrictions on transferability and ownership in our      charter.  For purposes of assisting us in maintaining our      REIT qualification under the Internal Revenue Code, our charter generally      prohibits any person from beneficially or constructively owning more than      9.8% in value or number of shares, whichever is more restrictive, of any      class or series of our outstanding capital stock.  This      restriction may: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | discourage      a tender offer or other transactions or a change in the composition of our      board of directors or control that might involve a premium price for our      shares or otherwise be in the best interests of our stockholders;      or |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | result      in shares issued or transferred in violation of such restrictions being      automatically transferred to a trust for a charitable beneficiary,      resulting in the forfeiture of thoseshares. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our charter permits our board      of directors to issue stock with terms that may discourage a third party      from acquiring us.  Our board of directors may amend our      charter without stockholder approval to increase the total number of      authorized shares of stock or the number of shares of any class or series      and issue common or preferred stock having preferences, conversion or      other rights, voting powers, restrictions, limitations as to      distributions, qualifications, or terms or conditions of redemption as      determined by our board.  Thus, our board could authorize the      issuance of stock with terms and conditions that could have the effect of      discouraging a takeover or other transaction in which holders of some or a      majority of our shares might receive a premium for their shares over the      then-prevailing market price. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our charter and bylaws contain      other possible anti-takeover provisions.  Our charter and      bylaws contain other provisions that may have the effect of delaying or      preventing a change in control of us or the removal of existing directors      and, as a result, could prevent our stockholders from being paid a premium      for their common stock over the then-prevailing market    price. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | any      person who beneficially owns ten percent or more of the voting power of      the corporation’s shares; or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | an      affiliate or associate of the corporation who, at any time within the      two-year period before the date in question, was the beneficial owner of      ten percent or more of the voting power of the then outstanding voting      stock of the corporation. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | 80%      of the votes entitled to be cast by holders of outstanding shares of      voting stock of the corporation;and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | two-thirds      of the votes entitled to be cast by holders of voting stock of the      corporation other than shares held by the interested stockholder with whom      or with whose affiliate the business combination is to be effected or held      by an affiliate or associate of the interested  stockholder. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | actual      receipt of an improper benefit or profit in money, property or services;      or |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | a      final judgment based upon a finding of active and deliberate dishonesty by      the director or officer that was material to the cause of action      adjudicated. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | 85%      of our ordinary income for thatyear; |
|--------|--------|-----------------------------------------------|

|   | · | 95%      of our capital gain net income for that year;  and |
|--------|--------|-------------------------------------------------------------|

|   | · | 100%      our undistributed taxable income from prior  years. |
|--------|--------|---------------------------------------------------------------|

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| ITEM 1B. | UNRESOLVED      STAFF COMMENTS |
|----------|--------------------------------|

| ITEM 2. | PROPERTIES |
|---------|------------|

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| ITEM 3. | LEGAL      PROCEEDINGS |
|---------|------------------------|

| ITEM 4. | [OMITTED      AND RESERVED] |
|---------|-----------------------------|

| ITEM 5. | MARKET      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERMATTERS      AND ISSUER PURCHASES OF EQUITYSECURITIES |
|---------|----------------------------------------------------------------------------------------------------------------------------|

|                |   | High   |   |   | Low    |   |   | Dividends      Declared |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|-------------------------|--------|
| Fiscal 2009         |   |   |   |   |   |   |   |                    |   |
| Fourth      Quarter |   | $      | 5.40   |   |   | $      | 4.33   |                    |   | $ | 0.25 | (1) |
| Third      Quarter  |   | $      | 6.21   |   |   | $      | 2.76   |                    |   | $ | 0.30 |   |
| Second      Quarter |   | $      | 3.89   |   |   | $      | 2.96   |                    |   | $ | 0.30 |   |
| First      Quarter  |   | $      | 3.83   |   |   | $      | 1.50   |                    |   | $ | 0.30 |   |
|                |   |   |   |   |   |   |   |                    |   |   |   |   |
| Fiscal 2008         |   |   |   |   |   |   |   |                    |   |   |   |   |
| Fourth      Quarter |   | $      | 6.09   |   |   | $      | 1.74   |                    |   | $ | 0.39 |   |
| Third      Quarter  |   | $      | 7.63   |   |   | $      | 4.84   |                    |   | $ | 0.39 |   |
| Second      Quarter |   | $      | 9.78   |   |   | $      | 7.21   |                    |   | $ | 0.41 |   |
| First      Quarter  |   | $      | 10.28  |   |   | $      | 6.00   |                    |   | $ | 0.41 |   |

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| (1) | We      distributed a regular dividend of $0.25 paid on January 26, 2010, to      stockholders of record as of December 31,2009. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 6. | SELECTED      FINANCIAL DATA |
|---------|------------------------------|

|                                                                                                                                   |   | As      of and for the years ended |       |   | As      of and for the Period fromMarch      8, 2005 (Date Operations Commended) to |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|------------|--------|-------------------------------------------------------------------------------------|--------|
|                                                                                                                                   |   | December      31,                  |       |   | December      31,                                                                   |   |
|                                                                                                                                   |   | 2009                               |       |   | 2008                                                                                |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Consolidated      Statement of Operations Data:                                                                                        |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                                                                               |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                                                                        |   | $                                  | 97,593     |   |                                                                                | $      | 134,341 |   |   | $ | 176,995 |   |   | $ | 137,075 |   |   | $ | 61,387 |   |
| Interest expense                                                                                                                       |   |                               | 45,427     |   |                                                                                |   | 79,619 |   |   |   | 121,564 |   |   |   | 101,851 |   |   |   | 43,062 |   |
| Net interest income                                                                                                                    |   |                               | 52,166     |   |                                                                                |   | 54,722 |   |   |   | 55,431 |   |   |   | 35,224 |   |   |   | 18,325 |   |
|                                                                                                                                   |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES                                                                                                                |   |                               | 16,059     |   |                                                                                |   | 12,438 |   |   |   | 13,415 |   |   |   | 11,144 |   |   |   | 7,728 |   |
|                                                                                                                                   |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET      OPERATING INCOME                                                                                                              |   |                               | 36,107     |   |                                                                                |   | 42,284 |   |   |   | 42,016 |   |   |   | 24,080 |   |   |   | 10,597 |   |
|                                                                                                                                   |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      (EXPENSES) REVENUES                                                                                                         |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impairment losses on      investment securities                                                                                        |   |                               | (27,490    | )      |                                                                                |   | (26,611 | ) |   |   | (48,853 | ) |   |   | (2,612 | ) |   |   | − |   |
| Recognized in other      comprehensive loss                                                                                            |   |                               | (14,019    | )      |                                                                                |   | (26,611 | ) |   |   | (22,576 | ) |   |   | (2,612 | ) |   |   | − |   |
| Net impairment losses      recognized in earnings                                                                                      |   |                               | (13,471    | )      |                                                                                |   | − |   |   |   | (26,277 | ) |   |   | − |   |   |   | − |   |
| Net realized gains/(losses) on      investments                                                                                        |   |                               | 1,890      |   |                                                                                |   | (1,637 | ) |   |   | (15,098 | ) |   |   | (8,627 | ) |   |   | 311 |   |
| Gain on deconsolidation                                                                                                                |   |                               | −    |   |                                                                                |   | − |   |   |   | 14,259 |   |   |   | − |   |   |   | − |   |
| Provision for loan and lease      losses                                                                                               |   |                               | (61,383    | )      |                                                                                |   | (46,160 | ) |   |   | (6,211 | ) |   |   | − |   |   |   | − |   |
| Gain on the extinguishment of      debt                                                                                                |   |                               | 44,546     |   |                                                                                |   | 1,750 |   |   |   | − |   |   |   | − |   |   |   | − |   |
| Gain on the settlement of      loan                                                                                                    |   |                               | −    |   |                                                                                |   | 574 |   |   |   | − |   |   |   | − |   |   |   | − |   |
| Other (expense) income                                                                                                                 |   |                               | (1,350     | )      |                                                                                |   | 115 |   |   |   | 201 |   |   |   | 153 |   |   |   | − |   |
| Total other (expenses)      revenues                                                                                                   |   |                               | (29,768    | )      |                                                                                |   | (45,358 | ) |   |   | (33,126 | ) |   |   | (8,474 | ) |   |   | 311 |   |
| NET      INCOME (LOSS)                                                                                                                 |   | $                                  | 6,339      |   |                                                                                | $      | (3,074 | ) |   | $ | 8,890 |   |   | $ | 15,606 |   |   | $ | 10,908 |   |
|                                                                                                                                   |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated      Balance Sheet Data:                                                                                                  |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                         |   | $                                  | 51,991     |   |                                                                                | $      | 14,583 |   |   | $ | 6,029 |   |   | $ | 5,354 |   |   | $ | 17,729 |   |
| Restricted      cash                                                                                                                   |   |                               | 85,125     |   |                                                                                |   | 60,394 |   |   |   | 119,482 |   |   |   | 30,721 |   |   |   | 23,592 |   |
| Investment      securities available-for-sale, pledged ascollateral, at fair value                                                     |   |                               | 39,304     |   |                                                                                |   | 22,466 |   |   |   | 65,464 |   |   |   | 420,997 |   |   |   | 1,362,392 |   |
| Investment      securities available-for-sale, at fair value                                                                           |   |                               | 5,238      |   |                                                                                |   | 6,794 |   |   |   | − |   |   |   | − |   |   |   | 28,285 |   |
| Investment      securities held-to-maturity, pledgedas collateral                                                                      |   |                               | 31,401     |   |                                                                                |   | 28,157 |   |   |   | 18,517 |   |   |   | 3,978 |   |   |   | − |   |
| Loans,      net of allowances of $47.1 million, $43.9 million,$0, $0 and $0                                                            |   |                               | 1,558,687  |   |                                                                                |   | 1,684,622 |   |   |   | 1,748,122 |   |   |   | 1,236,310 |   |   |   | 569,873 |   |
| Loans      held for sale                                                                                                               |   |                               | 8,050      |   |                                                                                |   | − |   |   |   | − |   |   |   | − |   |   |   | − |   |
| Direct      financing leases and notes, net of allowances of$1.1 million, $450,000, $293,000,      $0 and $0 and net ofunearned income |   |                               | 927        |   |                                                                                |   | 104,015 |   |   |   | 95,030 |   |   |   | 88,970 |   |   |   | 23,317 |   |
| Total      assets                                                                                                                      |   |                               | 1,795,184  |   |                                                                                |   | 1,936,031 |   |   |   | 2,072,148 |   |   |   | 1,802,829 |   |   |   | 2,045,547 |   |
| Borrowings                                                                                                                             |   |                               | 1,536,500  |   |                                                                                |   | 1,699,763 |   |   |   | 1,760,969 |   |   |   | 1,463,853 |   |   |   | 1,833,645 |   |
| Total      liabilities                                                                                                                 |   |                               | 1,566,354  |   |                                                                                |   | 1,749,726 |   |   |   | 1,800,542 |   |   |   | 1,485,278 |   |   |   | 1,850,214 |   |
| Total      stockholders’ equity                                                                                                  |   |                               | 228,830    |   |                                                                                |   | 186,305 |   |   |   | 271,606 |   |   |   | 317,551 |   |   |   | 195,333 |   |
| Per      Share Data:                                                                                                                   |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared per common share                                                                                               |   | $                                  | 1.15       |   |                                                                                | $      | 1.60 |   |   | $ | 1.62 |   |   | $ | 1.49 |   |   | $ | 0.86 |   |
|                                                                                                                                   |   |                               |       |   |                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) per share − basic                                                                                         |   | $                                  | 0.25       |   |                                                                                | $      | (0.12 | ) |   | $ | 0.36 |   |   | $ | 0.89 |   |   | $ | 0.71 |   |
| Net      income (loss) per share − diluted                                                                                       |   | $                                  | 0.25       |   |                                                                                | $      | (0.12 | ) |   | $ | 0.36 |   |   | $ | 0.87 |   |   | $ | 0.71 |   |
| Weighted      average number of shares outstanding − basic                                                                       |   |                               | 25,205,403 |   |                                                                                |   | 24,757,386 |   |   |   | 24,610,468 |   |   |   | 17,538,273 |   |   |   | 15,333,334 |   |
| Weighted      average number of shares outstanding – diluted                                                                     |   |                               | 25,355,821 |   |                                                                                |   | 24,757,386 |   |   |   | 24,860,184 |   |   |   | 17,881,355 |   |   |   | 15,405,714 |   |

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| ITEM 7. | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|---------|-------------------------------------------------------------------------------------------------------|

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|   | · | $22.0      million of commercial real estate loans paid  off; |
|--------|--------|---------------------------------------------------------------|

|   | · | $46.4      million of commercial real estate loan principal    repayments; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | $109.0      million of bank loan principal repayments;and |
|--------|--------|-----------------------------------------------------------|

|   | · | $128.8      million of bank loan sale proceeds. |
|--------|--------|-------------------------------------------------|

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|                                                         |   | Years      Ended  |    |
|--------------------------------------------------------------|--------|-------------------|---------|
|                                                         |   | December      31, |    |
|                                                         |   | 2009              |    |   | 2008 |   |   | 2007 |   |
| Interest      income:                                        |   |              |    |   |   |   |   |   |   |
| Interest income from      loans:                             |   |              |    |   |   |   |   |   |   |
| Bank loans                                                   |   | $                 | 35,770  |   |   | $ | 53,172 |   |   | $ | 68,978 |   |
| Commercial real estate loans                                 |   |              | 48,793  |   |   |   | 63,936 |   |   |   | 67,895 |   |
| Total interest income from      loans                        |   |              | 84,563  |   |   |   | 117,108 |   |   |   | 136,873 |   |
|                                                         |   |              |    |   |   |   |   |   |   |   |   |   |
| Interest income from      securities:                        |   |              |    |   |   |   |   |   |   |   |   |   |
| Non-agency RMBS                                              |   |              | − |   |   |   | − |   |   |   | 21,837 |   |
| CMBS                                                         |   |              | − |   |   |   | − |   |   |   | 1,394 |   |
| CMBS-private placement                                       |   |              | 5,404   |   |   |   | 4,425 |   |   |   | 4,082 |   |
| Securities held-to-maturity                                  |   |              | 1,807   |   |   |   | 1,934 |   |   |   | 1,205 |   |
| Other ABS                                                    |   |              | 14      |   |   |   | 19 |   |   |   | 1,496 |   |
| Total interest income from      securitiesavailable-for-sale |   |              | 7,225   |   |   |   | 6,378 |   |   |   | 30,014 |   |
|                                                         |   |              |    |   |   |   |   |   |   |   |   |   |
| Leasing                                                      |   |              | 4,336   |   |   |   | 8,180 |   |   |   | 7,553 |   |
|                                                         |   |              |    |   |   |   |   |   |   |   |   |   |
| Interest income –      other:                          |   |              |    |   |   |   |   |   |   |   |   |   |
| Interest income – other (1)                       |   |              | − |   |   |   | 997 |   |   |   | − |   |
| Temporary investment in      over-nightrepurchase agreements |   |              | 1,469   |   |   |   | 1,678 |   |   |   | 2,555 |   |
| Total interest income –      other                     |   |              | 1,469   |   |   |   | 2,675 |   |   |   | 2,555 |   |
| Total      interest income                                   |   | $                 | 97,593  |   |   | $ | 134,341 |   |   | $ | 176,995 |   |

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| (1) | Represents      cash received on our 90% equity investment in Ischus CDO II in excess of      our investment.  Income on this investment was recognized using      the cost recovery method. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |   | Year      EndedDecember      31, 2009 |                             |   | Year      EndedDecember      31, 2008 |   |    | Year      EndedDecember      31, 2007 |   |
|---------------------------------------|--------|---------------------------------------|----------------------------------|--------|---------------------------------------|--------|---------|---------------------------------------|--------|
|                                  |   | Weighted      Average                 |                             |   | Weighted      Average                 |   |    | Weighted      Average                 |   |
|                                  |   | Yield                                 |                             |   | Balance                               |   |    | Yield                                 |   |   | Balance |   |   | Yield |   |   | Balance |   |
| Interest      income:                 |   |                                  |                             |   |                                  |   |    |                                  |   |   |   |   |   |   |   |   |   |   |
| Interest income from      loans:      |   |                                  |                             |   |                                  |   |    |                                  |   |   |   |   |   |   |   |   |   |   |
| Bank loans                            |   |                                  | 3.87%                            |   |                                  | $      | 943,854 |                                  |   |   | 5.62% |   |   | $ | 947,753 |   |   |   | 7.42% |   |   | $ | 911,514 |   |
| Commercial real estate loans          |   |                                  | 6.12%                            |   |                                  | $      | 785,380 |                                  |   |   | 7.48% |   |   | $ | 840,874 |   |   |   | 8.58% |   |   | $ | 781,954 |   |
|                                  |   |                                  |                             |   |                                  |   |    |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income from      securities: |   |                                  |                             |   |                                  |   |    |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-agency RMBS                       |   |                                  |          −% |   |                                  | $      | − |                                  |   |   |         −% |   |   | $  | − |   |   |   | 7.09% |   |   | $ | 303,960 |   |
| CMBS                                  |   |                                  |          −%      |   |                                  | $      | − |                                  |   |   |         −% |   |   | $ | − |   |   |   | 5.67% |   |   | $ | 24,549 |   |
| CMBS-private placement                |   |                                  | 5.90%                            |   |                                  | $      | 90,784  |                                  |   |   | 5.76% |   |   | $ | 76,216 |   |   |   | 6.45% |   |   | $ | 61,952 |   |
| Securities held-to-maturity           |   |                                  | 5.28%                            |   |                                  | $      | 33,249  |                                  |   |   | 7.72% |   |   | $ | 25,782 |   |   |   | 9.48% |   |   | $ | 13,236 |   |
| Other ABS                             |   |                                  | 4.98%                            |   |                                  | $      | 281     |                                  |   |   | 0.32% |   |   | $ | 6,000 |   |   |   | 6.96% |   |   | $ | 21,094 |   |
|                                  |   |                                  |                             |   |                                  |   |    |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leasing                               |   |                                  | 6.88%                            |   |                                  | $      | 65,300  |                                  |   |   | 8.68% |   |   | $ | 94,864 |   |   |   | 8.71% |   |   | $ | 85,092 |   |

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|   | · | a      decrease in the weighted average balance of assets of $55.5 million to      $785.4 million for the year ended December 31, 2009 from $840.9 million      for the year ended December 31, 2008 primarily as a result of payoffs and      paydowns and to a lesser extent as a result of interest adjustments taken      on several loans; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in the weighted average yield on our assets to 6.12% for the year      ended December 31, 2009 from 7.48% for the year ended December 31, 2008      primarily due to decreases in LIBOR floors, which is a reference index for      the rates payable on these loans from loan modifications during      2009.  Management      determined that five of these modifications was due to financial distress      of the borrower and accordingly, qualified as a troubled debt      restructuring.  There were $401.3 million of loans with a      weighted average LIBOR floor of 4.71% as of December 31, 2008 and that      decreased to $310.9 million of loans with a weighted average LIBOR floor      of 2.37% as of December 31, 2009. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase in the weighted average balance of assets of $14.6 million to      $90.8 million for the year ended December 31, 2009 from $76.2 million for      the year ended December 31, 2008 primarily as a result of the purchase of      $54.8 million par value of assets during the year ended December 31, 2009,      principally during the last half of the year;  and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase in the weighted average yield to 5.90% for the year ended      December 31, 2009 from 5.76% for the year ended December 31, 2008      primarily as a result of an increase of $1.0 million in accretion income      from assets purchased at discounts during the year ended December 31,      2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A      decrease in interest income-other to $0 for the year ended December 31,      2009, as compared to $997,000 for the year ended December 31,      2008.  The decrease is the result of our having disposed of the      equity investment in Ischus CDO II in December 2008.  Prior to      that disposition, we used the cost recovery method to recognize the income      on this investment.  We sold our interest in Ischus CDO II in      November 2007 and, as a result, deconsolidated it at that      time.  For the three months ended March 31, 2008, $997,000 of      interest income was recognized on this investment.  No such      income has been recognized since March2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A      decrease in interest from temporary investments in over-night repurchase      agreements of $209,000 (12%) to $1.5 million for the year ended December      31, 2009, as compared to $1.7 million for the year ended December 31, 2008      primarily as a result of lower rates earned on our over-night      repurchase agreements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Interest      income – other was $997,000 for the year ended December 31, 2008 as      compared to $0 for the year ended December 31, 2007.  The income      for 2008 was the result of income from our equity method investment in      Ischus CDO II.  We used the cost recovery method to recognize      the income on this investment.  We sold our interest in Ischus      CDO II in November 2007 and, as a result, deconsolidated it at that      time.  For the three months ended March 31, 2008, $997,000 of      interest income was recognized on this investment.  No such      income has been recognized since March 31,    2008.   |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      increase in interest income – other was partially offset by interest      earned on temporary investments in over-night repurchase agreements which      decreased $877,000 (34%) to $1.7 million for the year ended December 31,      2008 as compared to $2.6 million for the year ended December 31, 2007      primarily due to lower rates. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                         |   | Years      Ended  |    |
|------------------------------|--------|-------------------|---------|
|                         |   | December      31, |    |
|                         |   | 2009              |    |   | 2008 |   |   | 2007 |   |
| Interest      expense:       |   |              |    |   |   |   |   |   |   |
| Bank loans                   |   | $                 | 15,394  |   |   | $ | 35,165 |   |   | $ | 52,466 |   |
| Commercial real estate loans |   |              | 11,072  |   |   |   | 27,924 |   |   |   | 37,184 |   |
| Non-agency / CMBS / ABS      |   |              | − |   |   |   | − |   |   |   | 19,794 |   |
| CMBS-private placement       |   |              | − |   |   |   | 163 |   |   |   | 1,223 |   |
| Leasing                      |   |              | 2,143   |   |   |   | 4,357 |   |   |   | 5,595 |   |
| General                      |   |              | 16,818  |   |   |   | 12,010 |   |   |   | 5,302 |   |
| Total      interest expense  |   | $                 | 45,427  |   |   | $ | 79,619 |   |   | $ | 121,564 |   |

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|                              |   | Year      EndedDecember      31, 2009 |                                   |   | Year      EndedDecember      31, 2008 |   |    | Year      EndedDecember      31, 2007 |   |
|-----------------------------------|--------|---------------------------------------|----------------------------------------|--------|---------------------------------------|--------|---------|---------------------------------------|--------|
|                              |   | Weighted      Average                 |                                   |   | Weighted      Average                 |   |    | Weighted      Average                 |   |
|                              |   | Yield                                 |                                   |   | Balance                               |   |    | Yield                                 |   |   | Balance |   |   | Yield |   |   | Balance |   |
| Interest      expense:            |   |                                  |                                   |   |                                  |   |    |                                  |   |   |   |   |   |   |   |   |   |   |
| Bank loans                        |   |                                  | 1.68%                                  |   |                                  | $      | 906,000 |                                  |   |   | 3.82% |   |   | $ | 906,000 |   |   |   | 5.96% |   |   | $ | 868,345 |   |
| Commercial real estate      loans |   |                                  | 1.70%                                  |   |                                  | $      | 649,258 |                                  |   |   | 3.91% |   |   | $ | 696,492 |   |   |   | 6.29% |   |   | $ | 582,173 |   |
| Non-agency / CMBS / ABS           |   |                                  |           −% |   |                                  | $      | − |                                  |   |   |          −% |   |   | $  | − |   |   |   | 5.93% |   |   | $ | 326,458 |   |
| CMBS-private placement            |   |                                  |          −%       |   |                                  | $      | − |                                  |   |   | 4.34% |   |   | $ | 3,597 |   |   |   | 5.84% |   |   | $ | 20,571 |   |
| Leasing                           |   |                                  | 4.42%                                  |   |                                  | $      | 44,388  |                                  |   |   | 4.67% |   |   | $ | 89,778 |   |   |   | 6.68% |   |   | $ | 83,405 |   |
| General                           |   |                                  | 5.01%                                  |   |                                  | $      | 322,720 |                                  |   |   | 3.00% |   |   | $ | 383,860 |   |   |   | 9.91% |   |   | $ | 51,981 |   |

|   | · | a      decrease in the weighted average yield on our financings to 1.70% for the      year ended December 31, 2009 from 3.91% for the year ended December 31,      2008 primarily due to the decrease in LIBOR which is a reference index for      the rates payable on a vast majority of these borrowings;    and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in the weighted average balance of $47.2 million to $649.3      million for the year ended December 31, 2009 from $696.5 million for the      year ended December 31, 2008 as a result of our buyback of $55.5 million      in notes and the payoff of $17.1 million in repurchase agreement debt      during the year. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | a      decrease in the weighted average balance of debt of $17.0 million to $3.6      million for the year ended December 31, 2008 from $20.6 for the year ended      December 31, 2007 primarily from the reduction in advance rates on our      pledged CMBS-private placement collateral, which resulted in $15.8 million      in pay-downs on the related repurchase agreement debt;  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in the weighted average rate on our financings to 4.34% for the      year ended December 31, 2008 from 5.84% for the year ended December 31,      2007 primarily due to the decrease in LIBOR, which is a reference index      for the rates payable on a majority of these  borrowings. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                   |   | Years      Ended  |   |
|----------------------------------------|--------|-------------------|--------|
|                                   |   | December      31, |   |
|                                   |   | 2009              |   |   | 2008 |   |   | 2007 |   |
| Non-investment      expenses:          |   |              |   |   |   |   |   |   |   |
| Management fees-related      party     |   | $                 | 8,363  |   |   | $ | 6,301 |   |   | $ | 6,554 |   |
| Equity compensation-related      party |   |              | 1,240  |   |   |   | 540 |   |   |   | 1,565 |   |
| Professional services                  |   |              | 3,866  |   |   |   | 3,349 |   |   |   | 2,911 |   |
| Insurance                              |   |              | 828    |   |   |   | 641 |   |   |   | 466 |   |
| General and administrative             |   |              | 1,764  |   |   |   | 1,848 |   |   |   | 1,581 |   |
| Income tax (benefit)      expense      |   |              | (2     | ) |   |   | (241 | ) |   |   | 338 |   |
| Total      non-investment expenses     |   | $                 | 16,059 |   |   | $ | 12,438 |   |   | $ | 13,415 |   |

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|   | · | Increase      of $151,000 in lease servicing expense for the year ended December 31,      2008 due to the increase in managed assets in the year ended December 31,      2008. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $394,000 in legal fees due to compliance work  performed. |
|--------|--------|----------------------------------------------------------------------------|

|                                                      |   | Years      Ended  |    |
|-----------------------------------------------------------|--------|-------------------|---------|
|                                                      |   | December      31, |    |
|                                                      |   | 2009              |    |   | 2008 |   |   | 2007 |   |
| Impairment      losses on investment securities           |   | $                 | (27,490 | ) |   | $ | (26,611 | ) |   | $ | (48,853 | ) |
| Recognized      in other comprehensive loss               |   |              | (14,019 | ) |   |   | (26,611 | ) |   |   | (22,576 | ) |
| Net      impairment losses recognized in earnings         |   |              | (13,471 | ) |   |   | − |   |   |   | (26,277 | ) |
| Net      realized gains (losses) on loans and investments |   |              | 1,890   |   |   |   | (1,637 | ) |   |   | (15,098 | ) |
| Gain      on deconsolidation of VIE                       |   |              | − |   |   |   | − |   |   |   | 14,259 |   |
| Provision      for loan and lease losses                  |   |              | (61,383 | ) |   |   | (46,160 | ) |   |   | (6,211 | ) |
| Gain      on the extinguishment of debt                   |   |              | 44,546  |   |   |   | 1,750 |   |   |   | − |   |
| Gain      on the settlement of a loan                     |   |              | − |   |   |   | 574 |   |   |   | − |   |
| Other      (expense) income                               |   |              | (1,350  | ) |   |   | 115 |   |   |   | 201 |   |
| Total                                                     |   | $                 | (29,768 | ) |   | $ | (45,358 | ) |   | $ | (33,126 | ) |

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|                                      |   | Amortizedcost      (3) |      |   | Dollar      price |   |                          | Net      carrying amount |   |   | Dollar      price |   |   | Net      carrying amount      less amortized cost |                    |   | Dollar      price |   |
|-------------------------------------------|--------|------------------------|-----------|--------|-------------------|--------|-------------------------------|--------------------------|--------|--------|-------------------|--------|--------|---------------------------------------------------|-------------------------|--------|-------------------|--------|
| December      31, 2009                    |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |
| Floating rate                             |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |
| CMBS-private      placement               |   | $                      | 32,043    |   |              |   | 100.00%                       |                     |   | $      | 11,185            |   |   |                                              |  34.91%            |   |              | $      | (20,858 | ) |   |   | -65.09% |   |
| Other      ABS                            |   |                   | 24        |   |              |   |          0.29% |                     |   |   | 24                |   |   |                                              |         0.29% |   |              |   | − |   |   |   |             −% |   |
| B      notes (1)                     |   |                   | 26,500    |   |              |   | 100.00%                       |                     |   |   | 26,283            |   |   |                                              | 99.18%                  |   |              |   | (217 | ) |   |   | -0.82% |   |
| Mezzanine      loans (1)             |   |                   | 124,048   |   |              |   | 100.00%                       |                     |   |   | 123,033           |   |   |                                              | 99.18%                  |   |              |   | (1,015 | ) |   |   | -0.82% |   |
| Whole      loans (1)                 |   |                   | 403,890   |   |              |   |        99.98%            |                     |   |   | 382,371           |   |   |                                              | 94.65%                  |   |              |   | (21,519 | ) |   |   | -5.33% |   |
| Bank      loans (2)                  |   |                   | 857,451   |   |              |   |        96.87%            |                     |   |   | 798,614           |   |   |                                              | 90.23%                  |   |              |   | (58,837 | ) |   |   | -6.65% |   |
| Bank      loans held for sale (3)         |   |                   | 8,050     |   |              |   |        78.88%            |                     |   |   | 8,050             |   |   |                                              | 78.88%                  |   |              |   | − |   |   |   |      −% |   |
| ABS      held-to-maturity (4)             |   |                   | 31,401    |   |              |   |        88.77%            |                     |   |   | 21,287            |   |   |                                              | 60.18%                  |   |              |   | (10,114 | ) |   |   | -28.59% |   |
| Total floating rate                       |   |                   | 1,483,407 |   |              |   |        97.23%            |                     |   |   | 1,370,847         |   |   |                                              | 89.85%                  |   |              |   | (112,560 | ) |   |   |  -7.38% |   |
| Fixed rate                                |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |   |   |   |   |   |   |
| CMBS      – private placement       |   |                   | 60,067    |   |              |   |        64.08%            |                     |   |   | 33,333            |   |   |                                              | 35.56%                  |   |              |   | (26,734 | ) |   |   | -28.52% |   |
| B      notes (1)                     |   |                   | 54,977    |   |              |   | 100.05%                       |                     |   |   | 54,527            |   |   |                                              | 99.23%                  |   |              |   | (450 | ) |   |   |        -0.82% |   |
| Mezzanine      loans (1)             |   |                   | 58,638    |   |              |   | 100.28%                       |                     |   |   | 53,200            |   |   |                                              | 90.98%                  |   |              |   | (5,438 | ) |   |   |        -9.30% |   |
| Whole      loans (1)                 |   |                   | 80,305    |   |              |   |        99.78%            |                     |   |   | 79,647            |   |   |                                              | 98.96%                  |   |              |   | (658 | ) |   |   |        -0.82% |   |
| Equipment      leases and loans (5)  |   |                   | 2,067     |   |              |   | 100.05%                       |                     |   |   | 927               |   |   |                                              | 44.87%                  |   |              |   | (1,140 | ) |   |   | -55.18% |   |
| Total fixed rate                          |   |                   | 256,054   |   |              |   |        88.38%            |                     |   |   | 221,634           |   |   |                                              | 76.50%                  |   |              |   | (34,420 | ) |   |   | -11.88% |   |
| Grand total                               |   | $                      | 1,739,461 |   |              |   |        95.82%            |                     |   | $      | 1,592,481         |   |   |                                              | 87.72%                  |   |              | $      | (146,980 | ) |   |   |        -8.10% |   |
|                                      |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |   |   |   |   |   |   |
| December      31, 2008                    |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |   |   |   |   |   |   |
| Floating rate                             |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |   |   |   |   |   |   |
| CMBS-private      placement               |   | $                      | 32,061    |   |              |   |        99.99%            |                     |   | $      | 15,042            |   |   |                                              | 46.91%                  |   |              | $      | (17,019 | ) |   |   | -53.08% |   |
| Other      ABS                            |   |                   | 5,665     |   |              |   |        94.42%            |                     |   |   | 45                |   |   |                                              |    0.75% |   |              |   | (5,620 | ) |   |   | -93.67% |   |
| B      notes (1)                     |   |                   | 33,535    |   |              |   | 100.00%                       |                     |   |   | 33,434            |   |   |                                              | 99.70%                  |   |              |   | (101 | ) |   |   |        -0.30% |   |
| Mezzanine      loans (1)             |   |                   | 129,459   |   |              |   | 100.01%                       |                     |   |   | 129,071           |   |   |                                              | 99.71%                  |   |              |   | (388 | ) |   |   |        -0.30% |   |
| Whole      loans (1)                 |   |                   | 431,985   |   |              |   |        99.71%            |                     |   |   | 430,690           |   |   |                                              | 99.41%                  |   |              |   | (1,295 | ) |   |   |        -0.30% |   |
| Bank      loans (2)                  |   |                   | 909,350   |   |              |   |        99.17%            |                     |   |   | 577,598           |   |   |                                              | 62.99%                  |   |              |   | (331,752 | ) |   |   | -36.18% |   |
| ABS      held-to-maturity (4)             |   |                   | 28,157    |   |              |   |        97.09%            |                     |   |   | 4,818             |   |   |                                              | 16.61%                  |   |              |   | (23,339 | ) |   |   | -80.48% |   |
| Total floating rate                       |   |                   | 1,570,212 |   |              |   |        99.36%            |                     |   |   | 1,190,698         |   |   |                                              | 75.35%                  |   |              |   | (379,514 | ) |   |   | -24.01% |   |
| Fixed rate                                |   |                   |      |   |              |   |                          |                     |   |   |              |   |   |                                              |                    |   |              |   |   |   |   |   |   |   |
| CMBS      – private placement       |   |                   | 38,397    |   |              |   |        91.26%            |                     |   |   | 14,173            |   |   |                                              | 33.69%                  |   |              |   | (24,224 | ) |   |   | -57.57% |   |
| B      notes (1)                     |   |                   | 55,534    |   |              |   | 100.11%                       |                     |   |   | 55,367            |   |   |                                              | 99.81%                  |   |              |   | (167 | ) |   |   |        -0.30% |   |
| Mezzanine      loans (1)             |   |                   | 81,274    |   |              |   |        94.72%            |                     |   |   | 68,378            |   |   |                                              | 79.69%                  |   |              |   | (12,896 | ) |   |   | -15.03% |   |
| Whole      loans (1)                 |   |                   | 87,352    |   |              |   |        99.52%            |                     |   |   | 87,090            |   |   |                                              | 99.23%                  |   |              |   | (262 | ) |   |   |        -0.29% |   |
| Equipment      leases and notes (4)  |   |                   | 104,465   |   |              |   |        99.38%            |                     |   |   | 104,015           |   |   |                                              | 98.95%                  |   |              |   | (450 | ) |   |   |        -0.43% |   |
| Total fixed rate                          |   |                   | 367,022   |   |              |   |        97.55%            |                     |   |   | 329,023           |   |   |                                              | 87.45%                  |   |              |   | (37,999 | ) |   |   | -10.10% |   |
| Grand total                               |   | $                      | 1,937,234 |   |              |   |        99.02%            |                     |   | $      | 1,519,721         |   |   |                                              | 77.68%                  |   |              | $      | (417,513 | ) |   |   | -21.34% |   |

----

| (1) | Net      carrying amount includes an allowance for loan losses of $29.3 million at      December 31, 2009, allocated as follows:  B notes ($0.7      million), mezzanine loans ($6.4 million) and whole loans ($22.2      million).  Net carrying amount includes an allowance for loan      losses of $15.1 million at December 31, 2008, allocated as follows: B      notes ($0.3 million), mezzanine loans ($13.3 million) and whole loans      ($1.5 million). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      bank loan portfolio is carried at amortized cost less allowance for loan      loss and was $839.6 million at December 31, 2009.  The amount      disclosed represents net realizable value at December 31, 2009, which      includes $17.8 million allowance for loan losses at December 31,      2009.  The bank loan portfolio was $908.7 million (net of      allowance of $28.8 million) at December 31,  2008. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Bank      loans held for sale are carried at the lower of cost or      market.  Amortized cost is equal to fair  value. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (4) | ABS      held to maturity are carried at amortized cost less other-than-temporary      impairment. |
|-----|----------------------------------------------------------------------------------------------------|

| (5) | Net      carrying amount includes a $1.1 million allowance for equipment leases and      loans losses at December 31, 2009. |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

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|   | · | the      length of time the market value has been less than amortized      cost; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | the      severity of the impairment; |
|--------|--------|--------------------------------------|

|   | · | the      expected loss of the security as generated by third party      software; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | credit      ratings from the rating agencies; |
|--------|--------|-----------------------------------------------|

|   | · | underlying      credit fundamentals of the collateral backing the security;      and |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | our      intent to sell as well as the likelihood that we will be required to sell      the security before the recovery of the amortized cost    basis. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      income approach utilizing an appropriate current risk-adjusted yield, time      value and projected estimated losses from default assumptions based on      analysis of underlying loanperformance; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes      on similar-vintage, higher rate, more actively traded CMBS adjusted as      appropriate for the lower subordination level of our securities;      and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer      quotes on our securities for which there is not an active      market. |
|--------|--------|------------------------------------------------------------------------------------|

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|                                 |   | December      31, 2009 |   |   | December      31, 2008 |   |
|--------------------------------------|--------|------------------------|--------|--------|------------------------|--------|
|                                 |   | Amortized      Cost    |   |   | Dollar      Price      |   |   | Amortized      Cost |   |   | Dollar      Price |   |
| Moody’s      Ratings Category: |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Aaa                                  |   | $                      | 11,690 |   |                   |   |        64.70% |   |   | $ | − |   |   |   |         −  % |   |
| Aa1      through Aa3                 |   |                   | 9,639  |   |                   |   |        50.73% |   |   |   | − |   |   |   |         −  % |   |
| A1      through A3                   |   |                   | 4,826  |   |                   |   |        56.14% |   |   |   | − |   |   |   |         −  % |   |
| Baa1      through Baa3               |   |                   | 2,021  |   |                   |   |        33.68% |   |   |   | 63,459 |   |   |   | 94.52% |   |
| Ba1      through Ba3                 |   |                   | 10,443 |   |                   |   | 100.00% |   |   |   | − |   |   |   |          −  % |   |
| B1      through B3                   |   |                   | 24,449 |   |                   |   |        85.27% |   |   |   | 6,999 |   |   |   | 99.99% |   |
| Caa1      through Caa3               |   |                   | 12,832 |   |                   |   |        98.71% |   |   |   | − |   |   |   |          −  % |   |
| Ca      through C                    |   |                   | 16,210 |   |                   |   |        73.68% |   |   |   | − |   |   |   |          −  % |   |
| Total                                |   | $                      | 92,110 |   |                   |   |        73.23% |   |   | $ | 70,458 |   |   |   | 95.04% |   |
|                                 |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| S&P      Ratings Category:       |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| AAA                                  |   | $                      | 5,997  |   |                   |   |        59.97% |   |   | $ | − |   |   |   |          −  % |   |
| AA+      through AA-                 |   |                   | 3,659  |   |                   |   |        40.65% |   |   |   | − |   |   |   |          −  % |   |
| A+      through A-                   |   |                   | 6,544  |   |                   |   |        62.75% |   |   |   | − |   |   |   |          −  % |   |
| BBB+      through BBB-               |   |                   | 11,955 |   |                   |   |        59.49% |   |   |   | 51,378 |   |   |   | 94.24% |   |
| BB+      through BB-                 |   |                   | 7,847  |   |                   |   |        78.76% |   |   |   | 19,080 |   |   |   | 97.26% |   |
| B+      through B-                   |   |                   | 9,081  |   |                   |   |        90.81% |   |   |   | − |   |   |   |          −  % |   |
| CCC+      through CCC-               |   |                   | 47,027 |   |                   |   |        83.54% |   |   |   | − |   |   |   |          −  % |   |
| Total                                |   | $                      | 92,110 |   |                   |   |        73.23% |   |   | $ | 70,458 |   |   |   | 95.04% |   |
|                                 |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average rating factor  |   |                   | 2,971  |   |                   |   |   |   |   |   | 830 |   |   |   |   |   |

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| Description                                       |   | Number      of      Loans |   |   | Amortized      Cost |   | ContractedInterest      Rates |   | Maturity Dates (3)                             |
|---------------------------------------------------|--------|---------------------------|--------|--------|---------------------|--------|-------------------------------|--------|------------------------------------------------|
| December 31, 2009:                                |   |                      |   |   |                |   |                          |   |                                           |
| Whole      loans, floating rate  (1)    |   |                      | 32     |   |                | $      | 403,890                       |   | LIBOR      plus 1.50% to LIBOR      plus 4.40% |   | May      2010 toFebruary      2017 |
| Whole      loans, fixed rate  (1)  |   |                      | 6      |   |                |   | 80,305                        |   | 6.98%      to 10.00%                           |   | May      2010 toAugust      2012 |
| B      notes, floating rate                       |   |                      | 3      |   |                |   | 26,500                        |   | LIBOR      plus 2.50% to LIBOR      plus 3.01% |   | July      2010 toOctober      2010 |
| B      notes, fixed rate                          |   |                      | 3      |   |                |   | 54,977                        |   | 7.00%      to 8.68%                            |   | July      2011 toJuly      2016 |
| Mezzanine      loans, floating rate               |   |                      | 10     |   |                |   | 124,048                       |   | LIBOR      plus 2.15% to LIBOR      plus 3.45% |   | May      2010 toJanuary      2013 |
| Mezzanine      loans, fixed rate                  |   |                      | 5      |   |                |   | 58,638                        |   | 8.14%      to 11.00%                           |   | May      2010 toSeptember      2016 |
| Total (2)                                    |   |                      | 59     |   |                | $      | 748,358                       |   |                                           |   |   |
|                                              |   |                      |   |   |                |   |                          |   |                                           |   |   |
| December 31, 2008:                                |   |                      |   |   |                |   |                          |   |                                           |   |   |
| Whole      loans, floating rate  (1)    |   |                      | 29     |   |                | $      | 431,985                       |   | LIBOR      plus 1.50% to LIBOR      plus 4.40% |   | April      2009 toAugust      2011 |
| Whole      loans, fixed rate  (1)  |   |                      | 7      |   |                |   | 87,352                        |   | 6.98%      to 10.00%                           |   | May      2009 toAugust      2012 |
| B      notes, floating rate                       |   |                      | 4      |   |                |   | 33,535                        |   | LIBOR      plus 2.50% to LIBOR      plus 3.01% |   | March      2009 toOctober      2009 |
| B      notes, fixed rate                          |   |                      | 3      |   |                |   | 55,534                        |   | 7.00%      to 8.68%                            |   | July      2011 toJuly      2016 |
| Mezzanine      loans, floating rate               |   |                      | 10     |   |                |   | 129,459                       |   | LIBOR      plus 2.15% to LIBOR      plus 3.45% |   | May      2009 toFebruary      2010 |
| Mezzanine      loans, fixed rate                  |   |                      | 7      |   |                |   | 81,274                        |   | 5.78%      to 11.00%                           |   | November      2009 toSeptember      2016 |
| Total (2)                                    |   |                      | 60     |   |                | $      | 819,139                       |   |                                           |   |   |

----

| (1) | Whole      loans had $5.6 million and $26.6 million in unfunded loan commitments as      of December 31, 2009 and 2008, respectively, that are funded as the loans      require additional funding and the related borrowers have satisfied the      requirements to obtain this additionalfunding. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      total does not include an allowance for loan losses of $29.3 million and      $15.1 million recorded as of December 31, 2009 and 2008,      respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Excludes      two floating rate whole loans.  One whole loan matured in July      2009 and is in foreclosure.  The other whole loan that matured      is on a month-to-month extension.  This loan is current with      respect to interest. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

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|                                 |   |   | December      31, 2009 |        |   | December      31, 2008 |   |
|--------------------------------------|--------|--------|------------------------|-------------|--------|------------------------|--------|
|                                 |   |   | Amortized      cost    |        |   | Dollar      price      |   |   | Amortized      cost |   |   | Dollar      price |   |
| Moody’s      ratings category: |   |   |                   |        |   |                   |   |   |   |   |   |   |   |
| Baa1      through Baa3               |   |   | $                      | 38,419      |   |                   |   |        98.09% |   |   | $ | 16,732 |   |   |   |        97.71% |   |
| Ba1      through Ba3                 |   |   |                   | 404,609     |   |                   |   |        96.91% |   |   |   | 456,594 |   |   |   |        99.21% |   |
| B1      through B3                   |   |   |                   | 355,441     |   |                   |   |        96.33% |   |   |   | 397,157 |   |   |   |        99.10% |   |
| Caa1      through Caa3               |   |   |                   | 44,265      |   |                   |   |        99.79% |   |   |   | 34,617 |   |   |   | 100.09% |   |
| Ca                                   |   |   |                   | 13,697      |   |                   |   |        88.68% |   |   |   | − |   |   |   |            −  % |   |
| No      rating provided              |   |   |                   | 9,070       |   |                   |   |        91.64% |   |   |   | 4,250 |   |   |   | 100.00% |   |
| Total                                |   |   | $                      | 865,501     |   |                   |   |        96.67% |   |   | $ | 909,350 |   |   |   |         99.17% |   |
|                                 |   |   |                   |        |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| S&P      ratings category:       |   |   |                   |        |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| BBB+      through BBB-               |   |   | $                      | 73,629      |   |                   |   |        98.23% |   |   | $ | 41,495 |   |   |   |  99.44% |   |
| BB+      through BB-                 |   |   |                   | 353,725     |   |                   |   |        97.11% |   |   |   | 473,354 |   |   |   |  99.03% |   |
| B+      through B-                   |   |   |                   | 337,193     |   |                   |   |        96.12% |   |   |   | 317,601 |   |   |   |  99.46% |   |
| CCC+      through CCC-               |   |   |                   | 42,198      |   |                   |   |        96.65% |   |   |   | 26,886 |   |   |   | 100.02% |   |
| CC+      through CC-                 |   |   |                   | 3,104       |   |                   |   | 100.13% |   |   |   | − |   |   |   | 100.00% |   |
| C+      through C-                   |   |   |                   | −     |   |                   |   |             −  %  |   |   |   | 1,075 |   |   |   | 100.00% |   |
| D                     |   |   |                   | 8,602  |   |                   |   |        95.91% |   |   |   |  1,480 |   |   |   | 100.00% |   |
| No      rating provided              |   |   |                   | 47,050      |   |                   |   |  94.85% |   |   |   | 47,459 |   |   |   |    97.85% |   |
| Total                                |   |   | $                      | 865,501     |   |                   |   |  96.67% |   |   | $ | 909,350 |   |   |   |        99.17% |   |
| Weighted      average rating factor  |   |   |                   | 2,131       |   |                   |   |   |   |   |   | 1,982 |   |   |   |   |   |

|                                 |   | December      31, 2009 |    |   | December      31, 2008 |   |
|--------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                 |   | Amortized      cost    |    |   | Dollar      price      |   |   | Amortized      cost |   |   | Dollar      price |   |
| Moody’s      ratings category: |   |                   |    |   |                   |   |   |   |   |   |   |   |
| Aa1      through Aa3                 |   | $                      | 2,854   |   |                   |   | 82.89% |   |   | $ | 1,136 |   |   |   | 75.73% |   |
| A1      through A3                   |   |                   | 303     |   |                   |   | 75.75% |   |   |   | 6,351 |   |   |   | 97.71% |   |
| Baa1      through Baa3               |   |                   | − |   |                   |   |           −  % |   |   |   | 3,050 |   |   |   | 97.60% |   |
| Ba1      through Ba3                 |   |                   | 4,427   |   |                   |   | 95.72% |   |   |   | 15,187 |   |   |   | 98.78% |   |
| B1      through B3                   |   |                   | 4,240   |   |                   |   | 97.58% |   |   |   | − |   |   |   |          −  % |   |
| Caa1      through Caa3               |   |                   | 9,913   |   |                   |   | 99.14% |   |   |   | − |   |   |   |          −  % |   |
| Ca                                   |   |                   | 3,629   |   |                   |   | 79.57% |   |   |   | − |   |   |   |          −  % |   |
| No      rating provided              |   |                   | 6,035   |   |                   |   | 75.44% |   |   |   | 2,433 |   |   |   | 97.32% |   |
| Total                                |   | $                      | 31,401  |   |                   |   | 88.77% |   |   | $ | 28,157 |   |   |   | 97.09% |   |
| S&P      ratings category:       |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| No      rating provided              |   | $                      | 31,401  |   |                   |   | 88.77% |   |   | $ | 28,157 |   |   |   | 97.09% |   |
| Total                                |   | $                      | 31,401  |   |                   |   | 88.77% |   |   | $ | 28,157 |   |   |   | 97.09% |   |
| Weighted      average rating factor  |   |                   | 4,028   |   |                   |   |   |   |   |   | 795 |   |   |   |   |   |

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|                    |   | Benchmark      rate |   | Notional      value |    |   | Strike      rate |   | Effective      date |   | Maturity      date |   | Fair      value |   |
|-------------------------|--------|---------------------|--------|---------------------|---------|--------|------------------|--------|---------------------|--------|--------------------|--------|-----------------|--------|
| Interest      rate swap |   | 1      month LIBOR  |   | $                   | 15,235  |   |             |   | 5.34%               |   | 06/08/07           |   | 02/25/10        |   | $ | (119 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 7,000   |   |             |   | 5.34%               |   | 06/08/07           |   | 02/25/10        |   |   | (55 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 28,000  |   |             |   | 5.10%               |   | 05/24/07           |   | 06/05/10        |   |   | (579 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 12,965  |   |             |   | 4.63%               |   | 12/04/06           |   | 07/01/11        |   |   | (721 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 12,150  |   |             |   | 5.44%               |   | 06/08/07           |   | 03/25/12        |   |   | (1,082 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 12,750  |   |             |   | 5.27%               |   | 07/25/07           |   | 08/06/12        |   |   | (1,186 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 34,530  |   |             |   | 4.13%               |   | 01/10/08           |   | 05/25/16        |   |   | (1,266 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 1,681   |   |             |   | 5.72%               |   | 07/09/07           |   | 10/01/16        |   |   | (141 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 1,880   |   |             |   | 5.68%               |   | 07/13/07           |   | 03/12/17        |   |   | (274 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 82,117  |   |             |   | 5.58%               |   | 06/08/07           |   | 04/25/17        |   |   | (6,677 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 1,726   |   |             |   | 5.65%               |   | 06/28/07           |   | 07/15/17        |   |   | (135 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 3,850   |   |             |   | 5.65%               |   | 07/19/07           |   | 07/15/17        |   |   | (301 | ) |
| Interest      rate swap |   | 1      month LIBOR  |   |                | 4,023   |   |             |   | 5.41%               |   | 08/07/07           |   | 07/25/17        |   |   | (276 | ) |
| Total                   |   |                |   | $                   | 217,907 |   |             |   | 5.18%               |   |               |   |            |   | $ | (12,812 | ) |

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|   | · | In      June 2007, we closed RREF CDO 2007-1, a $500.0 million CDO transaction      that provided financing for commercial real estate loans.  The      investments held by RREF CDO 2007-1 collateralized $390.0 million of      senior notes issued by the CDO vehicle, of which RCC Real Estate, Inc., or      RCC Real Estate, a subsidiary of ours, purchased 100% of the class H      senior notes, class K senior notes, class L senior notes and class M      senior notes for $68.0 million at closing, $5.0 million of the Class J      senior notes purchased in February 2008 an additional $2.5 million of the      Class J senior notes in November 2009, and $11.9 million of the Class E      senior notes, $11.9 million of the Class F senior notes and $7.3 million      of the Class G senior notes in December 2009.  In addition, RREF      2007-1 CDO Investor, LLC, a subsidiary of RCC Real Estate, purchased a      $41.3 million equity interest representing 100% of the outstanding      preference shares.  At December 31, 2009, the notes issued to      outside investors, net of repurchased notes had a weighted average      borrowing rate of 0.81%. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      May 2007, we closed Apidos Cinco CDO, a $350.0 million CDO transaction      that provided financing for bank loans.  The investments held by      Apidos Cinco CDO collateralized $322.0 million of senior notes issued by      the CDO vehicle, of which RCC Commercial Inc., or RCC Commercial, a      subsidiary of ours, purchased a $28.0 million equity interest representing      100% of the outstanding preference shares.  At December 31,      2009, the notes issued to outside investors had a weighted average      borrowing rate of 0.78%. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      August 2006, we closed RREF CDO 2006-1, a $345.0 million CDO transaction      that provided financing for commercial real estate loans.  The      investments held by RREF CDO 2006-1 collateralized $308.7 million of      senior notes issued by the CDO vehicle, of which RCC Real Estate purchased      100% of the class J senior notes and class K senior notes for $43.1      million at closing and $7.5 million of the Class F senior notes in June      2009, $3.5 million of the Class E senior note and $4.0 million of the      Class F senior notes in September 2009.  In addition, RREF      2006-1 CDO Investor, LLC, a subsidiary of RCC Real Estate, purchased a      $36.3 million equity interest representing 100% of the outstanding      preference shares.  At December 31, 2009, the notes issued to      outside investors, net of repurchased notes had a weighted average      borrowing rate of 1.11%. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      May 2006, we closed Apidos CDO III, a $285.5 million CDO transaction that      provided financing for bank loans.  The investments held by      Apidos CDO III collateralized $262.5 million of senior notes issued by the      CDO vehicle, of which RCC Commercial purchased $23.0 million equity      interest representing 100% of the outstanding preference      shares.  At December 31, 2009, the notes issued to outside      investors had a weighted average borrowing rate of  0.71%. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      August 2005, we closed Apidos CDO I, a $350.0 million CDO transaction that      provided financing for bank loans.  The investments held by      Apidos CDO I collateralize $321.5 million of senior notes issued by the      CDO vehicle, of which RCC Commercial purchased $28.5 million equity      interest representing 100% of the outstanding preference      shares.  At December 31, 2009, the notes issued to outside      investors had a weighted average borrowing rate of  0.86%. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                     |   | As      of December 31,                    |    |
|------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                     |   | 2009                                       |    |   | 2008 |   |
|                                                                                     |   | (in      thousands, except per share data) |    |
| Stockholders’      equity - GAAP                                                   |   | $                                          | 228,830 |   |   | $ | 186,305 |   |
| Add:      (1)                                                                            |   |                                       |    |   |   |   |   |   |
| Unrealized losses – CMBS      portfolio                                            |   |                                       | 47,592  |   |   |   | 41,243 |   |
| Unrealized losses recognized in      excess of value at risk – interest rate swaps |   |                                       | 12,812  |   |   |   | 31,589 |   |
| Economic      book value (2)                                                        |   | $                                          | 289,234 |   |   | $ | 259,137 |   |
| Shares      outstanding                                                                  |   |                                       | 36,546  |   |   |   | 25,345 |   |
| Economic      book value per share                                                       |   | $                                          | 7.91    |   |   | $ | 10.22 |   |

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| (1) | RCC      adds back unrealized losses on interest rate swaps (cash flow hedges) that      are associated with fixed-rate loans that have not been fair-valued      through stockholders’ equity.  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Management      views economic book value, a non-GAAP measure, as a useful and appropriate      supplement to GAAP stockholders' equity and book value per      share.  The measure serves as an additional measure of RCC’s      value because it facilitates evaluation of us without the effects of      unrealized losses on investments for which we expect to recover full par      value at maturity and on interest rate swaps, which we intend to hold to      maturity, in excess of RCC’s value at risk.  Unrealized losses      recognized in RCC’s financial statements, prepared in accordance with GAAP      that are in excess of RCC’s maximum value at risk are added back to      stockholders' equity in arriving at economic book      value.  Economic book value should be reviewed in connection      with GAAP stockholders' equity as set forth in RCC’s consolidated balance      sheets, to help analyze RCC’s value to investors.  Economic book      value is defined in various ways throughout the REIT      industry.  Investors should consider these differences when      comparing RCC’s economic book value to that of other  REITs. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                           |   | Years      Ended  |    |
|------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                           |   | December      31, |    |
|                                                                                           |   | 2009              |    |   | 2008 |   |   | 2007 |   |
| Net      income (loss) – GAAP                                                            |   | $                 | 6,339   |   |   | $ | (3,074 | ) |   | $ | 8,890 |   |
| Taxable REIT subsidiary’s      loss                                                      |   |              | 3,138   |   |   |   | − |   |   |   | − |   |
| Adjusted net income (loss)                                                                     |   |              | 9,477   |   |   |   | (3,074 | ) |   |   | 8,890 |   |
|                                                                                           |   |              |    |   |   |   |   |   |   |   |   |   |
| Adjustments:                                                                                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Share-based compensation to      related parties                                               |   |              | 543     |   |   |   | (1,620 | ) |   |   | (500 | ) |
| Capital carryover      (utilization)/losses from the sale ofsecurities                         |   |              | 4,818   |   |   |   | 2,000 |   |   |   | (49 | ) |
| Provision for loan and lease      losses unrealized                                            |   |              | 26,877  |   |   |   | 14,817 |   |   |   | 3,153 |   |
| Asset impairments                                                                              |   |              | 13,471  |   |   |   | − |   |   |   | 26,277 |   |
| Deferral of extinguishment of debt      income                                                 |   |              | (28,530 | ) |   |   | − |   |   |   | − |   |
| Net book to tax adjustment for the      inclusion of ourtaxable foreign REIT      subsidiaries |   |              | (6,277  | ) |   |   | 27,115 |   |   |   | 3,432 |   |
| Subpart F income limitation                                                                    |   |              | 9,872   |   |   |   | − |   |   |   | − |   |
| Net unrealized loss on the      deconsolidation ofABS-RMBS portfolio                           |   |              | − |   |   |   | − |   |   |   | 1,317 |   |
| Other net book to tax      adjustments                                                         |   |              | 1,212   |   |   |   | 16 |   |   |   | (110 | ) |
| Estimated      REIT taxable income                                                             |   | $                 | 31,463  |   |   | $ | 39,254 |   |   | $ | 42,410 |   |

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|   | · | unrestricted      cash and cash equivalents of $29.1 million and restricted cash of $4.0      million in margin call accounts;and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | capital      available for reinvestment in its five CDO entities of $83.6 million, of      which $1.7 million is designated to finance future funding commitments on      CRE loans. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      amount of the facility was reduced from $150,000,000 to      $100,000,000. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | The      amount of the facility will further be reduced to the amount outstanding      on October 18, 2009. |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Beginning      on November 25, 2008, any further repurchase agreement transactions may be      made in Natixis’ sole discretion.  In addition, premiums over      new repurchase prices are required for early repurchase by RCC Real Estate      SPE 3 of the Existing Assets that represent collateral under the facility;      however, the premiums will reduce the repurchase price of the remaining      Existing Assets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | RCC      Real Estate SPE 3’s obligation to pay non-usage fees was      terminated. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | The      weighted average undrawn balance (as defined in the agreement) threshold      exempting payment of the non-usage fee was reduced from $75,000,000 to      $56,250,000. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      minimum net worth covenant amount was reduced from $250,000,000 to      $125,000,000. |
|--------|--------|------------------------------------------------------------------------------------------------|

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|                                                            |   | Contractual      Commitments(dollars      in thousands) |      |
|-----------------------------------------------------------------|--------|---------------------------------------------------------|-----------|
|                                                            |   | Payments      due by period                             |      |
|                                                            |   | Total                                                   |      |   | Less      than1      year |   |   | 1 –      3 years |   |   | 3 –      5 years |   |   | More      than5      years |   |
| CDOs                                                            |   | $                                                       | 1,484,952 |   |   | $ | − |   |   | $ | − |   |   | $ | − |   |   | $ | 1,484,952 | (1) |
| Unsecured      junior subordinated         debentures |   |                                                    | 51,548    |   |   |   | − |   |   |   | − |   |   |   | − |   |   |   | 51,548 | (2) |
| Base      management fees(3)                               |   |                                                    | 4,456     |   |   |   | 4,456 |   |   |   | − |   |   |   | − |   |   |   | − |   |
| Total                                                           |   | $                                                       | 1,540,956 |   |   | $ | 4,456 |   |   | $ | − |   |   | $ | − |   |   | $ | 1,536,500 |   |

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| (1) | Contractual      commitment does not include $2.2 million, $6.4 million, $5.2 million, $7.5      million and $16.4 million of interest expense payable through the non-call      dates of July 2010, May 2011, June 2011, August 2011 and June 2012,      respectively, on Apidos CDO I, Apidos Cinco CDO, Apidos CDO III, RREF      2006-1 and RREF 2007-1.  The non-call date represents the      earliest period under which the CDO assets can be sold, resulting in      repayment of the CDO notes. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Contractual      commitment does not include $3.7 million and $5.0 million of interest      expense payable through the non-call dates of June 2011 and October 2011,      respectively, on our trust preferredsecurities. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Calculated      only for the next 12 months based on our current equity, as defined in our      management agreement. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

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|   | · | an      income approach utilizing an appropriate current risk-adjusted yield, time      value and projected estimated losses from default assumptions based on      historical analysis of underlying loan  performance; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes      on similar-vintage, higher rated, more actively traded CMBS securities      adjusted for the lower subordination level of our securities;      and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer      quotes on our securities for which there is not an active      market. |
|--------|--------|------------------------------------------------------------------------------------|

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| Allowance      for loan loss at January 1, 2008   |   | $      | 5,918   |   |
|---------------------------------------------------|--------|--------|---------|--------|
| Reserve charged to expense                        |   |   | 45,259  |   |
| Loans charged-off                                 |   |   | (7,310  | )      |
| Recoveries                                        |   |   | − |   |
| Allowance      for loan loss at January 1, 2009   |   |   | 43,867  |   |
| Reserve charged to expense                        |   |   | 58,711  |   |
| Loans charged-off                                 |   |   | (55,456 | )      |
| Recoveries                                        |   |   | − |   |
| Allowance      for loan loss at December 31, 2009 |   | $      | 47,122  |   |

| Allowance      for lease loss at January 1, 2008   |   | $      | − |   |
|----------------------------------------------------|--------|--------|---------|--------|
| Reserve charged to expense                         |   |   | 901     |   |
| Lease charged-off                                  |   |   | (451    | )      |
| Recoveries                                         |   |   | − |   |
| Allowance      for lease loss at December 31, 2008 |   |   | 450     |   |
| Reserve charged to expense                         |   |   | 2,672   |   |
| Lease charged-off                                  |   |   | (1,994  | )      |
| Recoveries                                         |   |   | 12      |   |
| Allowance      for lease loss at December 31, 2009 |   | $      | 1,140   |   |

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| ITEM 7A. | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK |
|----------|----------------------------------------------------------------|

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|                                    |   | December      31, 2009                             |    |
|-----------------------------------------|--------|----------------------------------------------------|---------|
|                                    |   | Interest      rates fall      100basis      points |    |   | Unchanged |   |   | Interest      rates rise 100basis      points |   |
| CMBS      – private placement (1) |   |                                               |    |   |   |   |   |   |   |
| Fair value                              |   | $                                                  | 34,815  |   |   | $ | 33,333 |   |   | $ | 31,914 |   |
| Change in fair value                    |   | $                                                  | 1,482   |   |   | $ | − |   |   | $ | (1,419 | ) |
| Change as a percent of fair      value  |   |                                               | 4.45    | % |   |   | − | % |   |   | 4.26 | % |
|                                    |   |                                               |    |   |   |   |   |   |   |   |   |   |
| Hedging      instruments                |   |                                               |    |   |   |   |   |   |   |   |   |   |
| Fair value                              |   | $                                                  | (27,870 | ) |   | $ | (12,812 | ) |   | $ | (10,559 | ) |
| Change in fair value                    |   | $                                                  | (15,058 | ) |   | $ | − |   |   | $ | 2,253 |   |
| Change as a percent of fair      value  |   |                                               | 117.53  | % |   |   | − | % |   |   | 17.59 | % |

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| (1)   | Includes      the fair value of available-for-sale investments that are sensitive to      interest rate change. |
|-----------------|-----------------------------------------------------------------------------------------------------------------|

|   | · | monitoring      and adjusting, if necessary, the reset index and interest rate related to      our mortgage-backed securities and our  borrowings; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | attempting      to structure our borrowing agreements for our CMBS to have a range of      different maturities, terms, amortizations and interest rate adjustment      periods; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | using      derivatives, financial futures, swaps, options, caps, floors and forward      sales, to adjust the interest rate sensitivity of our fixed-rate      commercial real estate mortgages and CMBS and our    borrowing. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 8. | FINANCIAL      STATEMENTS AND SUPPLEMENTARY DATA |
|---------|--------------------------------------------------|

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|                                                                                                                                                                                                      |   | December      31, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                                                                                                                      |   | 2009              |      |   | 2008 |   |
| ASSETS                                                                                                                                                                                                    |   |              |      |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                 |   | $                 | 51,991    |   |   | $ | 14,583 |   |
| Restricted cash                                                                                                                                                                                           |   |              | 85,125    |   |   |   | 60,394 |   |
| Investment securities      available-for-sale, pledged as collateral, at fair value                                                                                                                       |   |              | 39,304    |   |   |   | 22,466 |   |
| Investment securities      available-for-sale, at fair value                                                                                                                                              |   |              | 5,238     |   |   |   | 6,794 |   |
| Investment securities      held-to-maturity, pledged as collateral                                                                                                                                        |   |              | 31,401    |   |   |   | 28,157 |   |
| Loans, pledged as collateral and      net of allowances of $47.1 million and$43.9 million                                                                                                                 |   |              | 1,558,687 |   |   |   | 1,684,622 |   |
| Loans held for sale                                                                                                                                                                                       |   |              | 8,050     |   |   |   | − |   |
| Direct financing leases and      notes, net of allowances of$1.1 million and $450,000 and      net of unearned income                                                                                |   |              | 927       |   |   |   | 104,015 |   |
| Investments in unconsolidated      entities                                                                                                                                                               |   |              | 3,605     |   |   |   | 1,548 |   |
| Interest receivable                                                                                                                                                                                       |   |              | 5,754     |   |   |   | 8,440 |   |
| Other assets                                                                                                                                                                                              |   |              | 5,102     |   |   |   | 5,012 |   |
| Total assets                                                                                                                                                                                              |   | $                 | 1,795,184 |   |   | $ | 1,936,031 |   |
| LIABILITIES                                                                                                                                                                                               |   |              |      |   |   |   |   |   |
| Borrowings                                                                                                                                                                                                |   | $                 | 1,536,500 |   |   | $ | 1,699,763 |   |
| Distribution payable                                                                                                                                                                                      |   |              | 9,170     |   |   |   | 9,942 |   |
| Accrued interest expense                                                                                                                                                                                  |   |              | 1,516     |   |   |   | 4,712 |   |
| Derivatives, at fair value                                                                                                                                                                                |   |              | 12,767    |   |   |   | 31,589 |   |
| Accounts payable and other      liabilities                                                                                                                                                               |   |              | 6,401     |   |   |   | 3,720 |   |
| Total liabilities                                                                                                                                                                                         |   |              | 1,566,354 |   |   |   | 1,749,726 |   |
| STOCKHOLDERS’      EQUITY                                                                                                                                                                           |   |              |      |   |   |   |   |   |
| Preferred stock, par value      $0.001:  100,000,000 shares authorized;no shares issued and      outstanding                                                                                    |   |              | −   |   |   |   | − |   |
| Common stock, par value      $0.001:  500,000,000 shares authorized;36,545,737 and 25,344,867      shares issued and outstanding(including 437,319 and 452,310      unvested restricted shares) |   |              | 36        |   |   |   | 26 |   |
| Additional paid-in capital                                                                                                                                                                                |   |              | 405,517   |   |   |   | 356,103 |   |
| Accumulated other comprehensive      loss                                                                                                                                                                 |   |              | (62,154   | ) |   |   | (80,707 | ) |
| Distributions in excess of      earnings                                                                                                                                                                  |   |              | (114,569  | ) |   |   | (89,117 | ) |
| Total stockholders’ equity                                                                                                                                                                          |   |              | 228,830   |   |   |   | 186,305 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                     |   | $                 | 1,795,184 |   |   | $ | 1,936,031 |   |

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|                                                              |   | December      31, |       |
|-------------------------------------------------------------------|--------|-------------------|------------|
|                                                              |   | 2009              |       |   | 2008 |   |   | 2007 |   |
| REVENUES                                                          |   |              |       |   |   |   |   |   |   |
| Net interest      income:                                         |   |              |       |   |   |   |   |   |   |
| Loans                                                             |   | $                 | 84,563     |   |   | $ | 117,108 |   |   | $ | 136,873 |   |
| Securities                                                        |   |              | 7,225      |   |   |   | 6,378 |   |   |   | 30,014 |   |
| Leases                                                            |   |              | 4,336      |   |   |   | 8,180 |   |   |   | 7,553 |   |
| Interest income – other                                     |   |              | 1,469      |   |   |   | 2,675 |   |   |   | 2,555 |   |
| Total interest income                                             |   |              | 97,593     |   |   |   | 134,341 |   |   |   | 176,995 |   |
| Interest expense                                                  |   |              | 45,427     |   |   |   | 79,619 |   |   |   | 121,564 |   |
| Net interest income                                               |   |              | 52,166     |   |   |   | 54,722 |   |   |   | 55,431 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES                                           |   |              |       |   |   |   |   |   |   |   |   |   |
| Management fees − related      party                        |   |              | 8,363      |   |   |   | 6,301 |   |   |   | 6,554 |   |
| Equity compensation – related      party                    |   |              | 1,240      |   |   |   | 540 |   |   |   | 1,565 |   |
| Professional services                                             |   |              | 3,866      |   |   |   | 3,349 |   |   |   | 2,911 |   |
| Insurance expense                                                 |   |              | 828        |   |   |   | 641 |   |   |   | 466 |   |
| General and administrative                                        |   |              | 1,764      |   |   |   | 1,848 |   |   |   | 1,581 |   |
| Income tax (benefit)      expense                                 |   |              | (2         | ) |   |   | (241 | ) |   |   | 338 |   |
| Total expenses                                                    |   |              | 16,059     |   |   |   | 12,438 |   |   |   | 13,415 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| NET      OPERATING INCOME                                         |   |              | 36,107     |   |   |   | 42,284 |   |   |   | 42,016 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| OTHER      INCOME (EXPENSES)                                      |   |              |       |   |   |   |   |   |   |   |   |   |
| Impairment losses on investment      securities                   |   |              | (27,490    | ) |   |   | (26,611 | ) |   |   | (48,853 | ) |
| Recognized in other      comprehensive loss                       |   |              | (14,019    | ) |   |   | (26,611 | ) |   |   | (22,576 | ) |
| Net impairment losses      recognized in earnings                 |   |              | (13,471    | ) |   |   | − |   |   |   | (26,277 | ) |
| Net realized losses on loans      andinvestments                  |   |              | 1,890      |   |   |   | (1,637 | ) |   |   | (15,098 | ) |
| Gain on deconsolidation of      VIE                               |   |              | −    |   |   |   | − |   |   |   | 14,259 |   |
| Provision for loan and lease      losses                          |   |              | (61,383    | ) |   |   | (46,160 | ) |   |   | (6,211 | ) |
| Gain on the extinguishment of      debt                           |   |              | 44,546     |   |   |   | 1,750 |   |   |   | − |   |
| Gain on the settlement of      loan                               |   |              | −    |   |   |   | 574 |   |   |   | − |   |
| Other (expense) income                                            |   |              | (1,350     | ) |   |   | 115 |   |   |   | 201 |   |
| Total expenses                                                    |   |              | (29,768    | ) |   |   | (45,358 | ) |   |   | (33,126 | ) |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| NET      INCOME (LOSS)                                            |   | $                 | 6,339      |   |   | $ | (3,074 | ) |   | $ | 8,890 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| NET      INCOME (LOSS) PER SHARE – BASIC                    |   | $                 | 0.25       |   |   | $ | (0.12 | ) |   | $ | 0.36 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| NET      INCOME (LOSS) PER SHARE – DILUTED                  |   | $                 | 0.25       |   |   | $ | (0.12 | ) |   | $ | 0.36 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF SHARESOUTSTANDING – BASIC   |   |              | 25,205,403 |   |   |   | 24,757,386 |   |   |   | 24,610,468 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF SHARESOUTSTANDING – DILUTED |   |              | 25,355,821 |   |   |   | 24,757,386 |   |   |   | 24,860,184 |   |
|                                                              |   |              |       |   |   |   |   |   |   |   |   |   |
| DIVIDENDS      DECLARED PER SHARE                                 |   | $                 | 1.15       |   |   | $ | 1.60 |   |   | $ | 1.62 |   |

(Back to Index)

----

(Back to Index)

|                                                                                                                    |   | Shares |       |   | Amount |   |    | Additional      Paid-In Capital |   |   | DeferredEquityCompensation |   |   | AccumulatedOther      Comprehensive Loss |    |   | Retained      Earnings |   |    | Distributions      in Excess of Earnings |   |   | Treasury      Shares |   |   | Total      Stockholders’ Equity |     |   | Comprehensive      (Loss)/Income |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|---------|---------------------------------|--------|--------|----------------------------|--------|--------|------------------------------------------|---------|--------|------------------------|--------|---------|------------------------------------------|--------|--------|----------------------|--------|--------|---------------------------------------|----------|--------|----------------------------------|--------|
| Balance, December 31,      2006                                                                                         |   |   | 23,821,434 |   |   | $      | 24      |                            |   | $      | 341,400                    |   |   | $                                        | (1,072  | )      |                   | $      | (9,279  | )                                        |   | $      | −              |   |   | $                                     | (13,522  | )      |                             |   | − |   |   | $ | 317,551 |   |   |   |   |
| Net      proceeds from common         stock offerings                                                         |   |   | 650,000    |   |   |   | 1       |                            |   |   | 10,134                     |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 10,135 |   |   |   | − |   |
| Offering costs                                                                                                          |   |   | −    |   |   |   | − |                            |   |   | (406                       | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (406 | ) |   |   | − |   |
| Reclassification      of deferred        equity compensation                                                  |   |   | −    |   |   |   | − |                            |   |   | (1,072                     | )      |   |                                     | 1,072   |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   |   | − |   |
| Stock based      compensation                                                                                           |   |   | 526,448    |   |   |   | − |                            |   |   | 723                        |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 723 |   |   |   | − |   |
| Stock      based compensation,         fair value adjustment                                                  |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   |   | − |   |
| Exercise      of common stock warrants                                                                                  |   |   | 375,547    |   |   |   | − |                            |   |   | 5,632                      |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 5,632 |   |   |   | − |   |
| Amortization      of stock based         compensation                                                         |   |   | −    |   |   |   | − |                            |   |   | 1,565                      |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 1,565 |   |   |   | − |   |
| Repurchase      and retirement of         treasury shares                                                     |   |   | (263,000   | )      |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | (2,771 | ) |   |   | (2,771 | ) |   |   |   |   |
| Forfeiture of      unvested stock                                                                                       |   |   | (6,897     | )      |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   |   |   |   |
| Net income                                                                                                              |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | 8,890                |   |   |                                  | −  |   |                             |   | − |   |   |   | 8,890 |   |   | $ | 8,890 |   |
| Available-for-sale      securities,         fair value adjustment                                             |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (16,544 | )                                        |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (16,544 | ) |   |   | (16,544 | ) |
| Designated      derivatives,         fair value adjustment                                               |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (12,500 | )                                        |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (12,500 | ) |   |   | (12,500 | ) |
| Distributions on      common stock                                                                                      |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | (8,890               | )      |   |                                  | (31,779  | )      |                             |   | − |   |   |   | (40,669 | ) |   |   |   |   |
| Comprehensive      loss                                                                                                 |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   | $ | (20,154 | ) |
| Balance, December 31,      2007                                                                                         |   |   | 25,103,532 |   |   |   | 25      |                            |   |   | 357,976                    |   |   |                                     | − |   |                   |   | (38,323 | )                                        |   |   | −−       |   |   |                                  | (45,301  | )      |                             |   | (2,771 | ) |   |   | 271,606 |   |   |   |   |   |
| Net      proceeds from dividend         reinvestment and      stock         purchase      plan |   |   | 10,831     |   |   |   | − |                            |   |   | 40                         |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 40 |   |   |   | − |   |
| Offering costs                                                                                                          |   |   | −    |   |   |   | − |                            |   |   | (22                        | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (22 | ) |   |   | − |   |
| Retirement of      treasury shares                                                                                      |   |   | −    |   |   |   | − |                            |   |   | (2,771                     | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | 2,771 |   |   |   | − |   |   |   | − |   |
| Stock based      compensation                                                                                           |   |   | 234,871    |   |   |   | 1       |                            |   |   | 340                        |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 341 |   |   |   | − |   |
| Amortization      of stock based        compensation                                                          |   |   | −    |   |   |   | − |                            |   |   | 540                        |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 540 |   |   |   | − |   |
| Forfeiture of      unvested stock                                                                                       |   |   | (4,367     | )      |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   |   |   |   |
| Net income                                                                                                              |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | (3,074               | )      |   |                                  | −  |   |                             |   | − |   |   |   | (3,074 | ) |   |   | (3,074 | ) |
| Available-for-sale      securities,         fair value adjustment                                             |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (24,288 | )                                        |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (24,288 | ) |   |   | (24,288 | ) |
| Designated      derivatives,         fair value adjustment                                               |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (18,096 | )                                        |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (18,096 | ) |   |   | (18,096 | ) |
| Distributions on      common stock                                                                                      |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | 3,074                |   |   |                                  | (43,816  | )      |                             |   | − |   |   |   | (40,742 | ) |   |   |   |   |
| Comprehensive      loss                                                                                                 |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   | $ | (45,458 | ) |
| Balance, December 31,      2008                                                                                         |   |   | 25,344,867 |   |   |   | 26      |                            |   |   | 356,103                    |   |   |                                     | − |   |                   |   | (80,707 | )                                        |   |   | −−       |   |   |                                  | (89,117  | )      |                             |   | − |   |   |   | 186,305 |   |   |   |   |   |
| Proceeds      from common         stock offering                                                              |   |   | 10,294,455 |   |   |   | 10      |                            |   |   | 46,316                     |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 46,326 |   |   |   | − |   |
| Proceeds      from dividend         reinvestment and      stock         purchase      plan          |   |   | 1,895,043  |   |   |   | 1       |                            |   |   | 8,994                      |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 8,995 |   |   |   | − |   |
| Offering costs                                                                                                          |   |   | −    |   |   |   | − |                            |   |   | (2,964                     | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (2,964 | ) |   |   | − |   |
| Repurchase      and retirement         of treasury shares                                                     |   |   | (1,400,000 | )      |   |   | (1      | )                               |   |   | (5,039                     | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   |   |   |   |   | (5,040 | ) |   |   | − |   |
| Stock based      compensation                                                                                           |   |   | 419,563    |   |   |   |    |                            |   |   | 867                        |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 867 |   |   |   | − |   |
| Amortization      of stock based         compensation                                                         |   |   | −    |   |   |   | − |                            |   |   | 1,240                      |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 1,240 |   |   |   | − |   |
| Forfeiture of      unvested stock                                                                                       |   |   | (8,191     | )      |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   |   | − |   |
| Net income                                                                                                              |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | 6,339                |   |   |                                  | −  |   |                             |   | − |   |   |   | 6,339 |   |   |   | 6,339 |   |
| Securities      available-for-sale,         fair value adjustment, net                                        |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (729    | )                                        |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | (729 | ) |   |   | (729 | ) |
| Designated      derivatives,         fair value adjustment                                                    |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | 19,282  |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | 19,282 |   |   |   | 19,282 |   |
| Distributions on      common stock                                                                                      |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | (6,339               | )      |   |                                  | (25,452  | )      |                             |   | − |   |   |   | (31,791 | ) |   |   |   |   |
| Comprehensive      loss                                                                                                 |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | −  |   |                             |   | − |   |   |   | − |   |   | $ | 24,892 |   |
| Balance, December 31,      2009                                                                                         |   |   | 36,545,737 |   |   | $      | 36      |                            |   | $      | 405,517                    |   |   | $                                        | − |   |                   | $      | (62,154 | )                                        |   | $      | −              |   |   | $                                     | (114,569 | )      |                             | $      | − |   |   | $ | 228,830 |   |   |   |   |   |

(Back to Index)

----

(Back to Index)

|                                                                                       |   | Years      Ended  |        |
|--------------------------------------------------------------------------------------------|--------|-------------------|-------------|
|                                                                                       |   | December      31, |        |
|                                                                                       |   | 2009              |        |   | 2008 |   |   | 2007 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                 |   |              |        |   |   |   |   |   |   |
| Net income (loss)                                                                          |   | $                 | 6,339       |   |   | $ | (3,074 | ) |   | $ | 8,890 |   |
| Adjustments to reconcile net      income to net cashprovided by operating      activities: |   |              |        |   |   |   |   |   |   |
| Provision for loan and lease      losses                                                   |   |              | 61,383      |   |   |   | 46,160 |   |   |   | 6,211 |   |
| Depreciation and amortization of      term facilities                                      |   |              | 1,355       |   |   |   | 1,019 |   |   |   | 793 |   |
| Accretion of net discounts on      investments                                             |   |              | (8,719      | ) |   |   | (1,478 | ) |   |   | (1,034 | ) |
| Amortization of discount on      notes of CDOs                                             |   |              | 1,032       |   |   |   | 173 |   |   |   | 83 |   |
| Amortization of debt issuance      costs on notes of CDOs                                  |   |              | 4,058       |   |   |   | 3,129 |   |   |   | 2,681 |   |
| Amortization of stock-based      compensation                                              |   |              | 1,240       |   |   |   | 540 |   |   |   | 1,565 |   |
| Amortization of terminated      derivative instruments                                     |   |              | 499         |   |   |   | 205 |   |   |   | (174 | ) |
| Non-cash incentive compensation      to the Manager                                        |   |              | 1,143       |   |   |   | 440 |   |   |   | 774 |   |
| Unrealized losses on      non-designated derivativeinstruments                             |   |              | 95          |   |   |   | − |   |   |   | − |   |
| Net realized (gains) losses on      investments                                            |   |              | (1,890      | ) |   |   | 1,637 |   |   |   | 15,098 |   |
| Net impairment losses recognized      in earnings                                          |   |              | 13,471      |   |   |   | − |   |   |   | 26,277 |   |
| Gain on the extinguishment of      debt                                                    |   |              | (44,546     | ) |   |   | (1,750 | ) |   |   | − |   |
| Gain on deconsolidation of      VIEs                                                       |   |              | −     |   |   |   | − |   |   |   | (14,259 | ) |
| Gain on the settlement of      loan                                                        |   |              | −     |   |   |   | (574 | ) |   |   | − |   |
| Changes in operating assets and      liabilities:                                          |   |              |        |   |   |   |   |   |   |   |   |   |
| Decrease (increase) in restricted      cash                                                |   |              | 10,596      |   |   |   | 4,113 |   |   |   | (16,775 | ) |
| Decrease (increase) in interest      receivable, net of purchasedinterest                  |   |              | 2,697       |   |   |   | 3,526 |   |   |   | (4,881 | ) |
| Decrease (increase) in accounts      receivable                                            |   |              | 424         |   |   |   | 574 |   |   |   | (511 | ) |
| Increase (decrease) in management      and incentive fee payable                           |   |              | 474         |   |   |   | 221 |   |   |   | (647 | ) |
| (Decrease) increase in security      deposits                                              |   |              | (791        | ) |   |   | 353 |   |   |   | 134 |   |
| Increase (decrease) in accounts      payable and accrued liabilities                       |   |              | 2,714       |   |   |   | (962 | ) |   |   | 55 |   |
| (Decrease) increase in accrued      interest expense                                       |   |              | (3,168      | ) |   |   | (2,729 | ) |   |   | 993 |   |
| Increase in other assets                                                                   |   |              | (1,784      | ) |   |   | (573 | ) |   |   | (1,895 | ) |
| Net cash provided by operating      activities                                             |   |              | 46,622      |   |   |   | 50,950 |   |   |   | 23,378 |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                 |   |              |        |   |   |   |   |   |   |   |   |   |
| (Increase) decrease in      restricted cash                                                |   |              | (35,327     | ) |   |   | 54,976 |   |   |   | (71,930 | ) |
| Purchase of securities      available-for-sale                                             |   |              | (28,958     | ) |   |   | − |   |   |   | (87,378 | ) |
| Principal payments received on      securities available-for-sale                          |   |              | 21          |   |   |   | 2,359 |   |   |   | 11,333 |   |
| Proceeds from sale of securities      available-for-sale                                   |   |              | 1,909       |   |   |   | 8,000 |   |   |   | 29,867 |   |
| Investment in unconsolidated      entity                                                   |   |              | (2,066      | ) |   |   | − |   |   |   | − |   |
| Distribution from unconsolidated      entities                                             |   |              | −     |   |   |   | 257 |   |   |   | 517 |   |
| Purchase of loans                                                                          |   |              | (243,786    | ) |   |   | (186,759 | ) |   |   | (1,296,938 | ) |
| Principal payments received on      loans                                                  |   |              | 177,589     |   |   |   | 161,653 |   |   |   | 572,046 |   |
| Proceeds from sale of loans                                                                |   |              | 130,078     |   |   |   | 34,853 |   |   |   | 183,455 |   |
| Purchase of direct financing      leases and notes                                         |   |              | −     |   |   |   | (42,490 | ) |   |   | (38,735 | ) |
| Principal payments received on      direct financing leases and notes                      |   |              | 8,655       |   |   |   | 27,823 |   |   |   | 26,366 |   |
| Proceeds from sale of direct      financing leases and notes                               |   |              | 2,125       |   |   |   | 5,034 |   |   |   | 6,378 |   |
|          Proceeds from sale of interest in subsidiary        |   |              |  7,545 |   |   |   |  − |   |   |   |  − |   |
| Net cash provided by (used in)      investing activities                                   |   |              | 17,785      |   |   |   | 65,706 |   |   |   | (665,019 | ) |

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|                                                                                                               |   | Years      Ended  |    |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                                               |   | December      31, |    |
|                                                                                                               |   | 2009              |    |   | 2008 |   |   | 2007 |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                                         |   |              |    |   |   |   |   |   |   |
| Net proceeds from issuances of      common stock(net of offering costs of      $2,964, $0 and $406)                |   |              | 43,362  |   |   |   | − |   |   |   | 15,362 |   |
| Net proceeds from dividend      reinvestment and stock purchaseplan (net of offering costs of      $0, $22 and $0) |   |              | 8,995   |   |   |   | 18 |   |   |   | − |   |
| Repurchase of common stock                                                                                         |   |              | (5,040  | ) |   |   | − |   |   |   | (2,771 | ) |
| Proceeds from      borrowings:                                                                                     |   |              |    |   |   |   |   |   |   |   |   |   |
| Repurchase agreements                                                                                              |   |              | 18      |   |   |   | 239 |   |   |   | 464,137 |   |
| Collateralized debt      obligations                                                                               |   |              | − |   |   |   | 35,912 |   |   |   | 674,653 |   |
| Unsecured revolving credit      facility                                                                           |   |              | − |   |   |   | − |   |   |   | 10,000 |   |
| Secured term facility                                                                                              |   |              | − |   |   |   | 26,342 |   |   |   | 30,077 |   |
| Payments on      borrowings:                                                                                       |   |              |    |   |   |   |   |   |   |   |   |   |
| Repurchase agreements                                                                                              |   |              | (17,108 | ) |   |   | (99,319 | ) |   |   | (468,102 | ) |
| Collateralized debt      obligations                                                                               |   |              | − |   |   |   | − |   |   |   | (993 | ) |
| Unsecured revolving credit      facility                                                                           |   |              | − |   |   |   | − |   |   |   | (10,000 | ) |
| Secured term facility                                                                                              |   |              | (13,395 | ) |   |   | (22,367 | ) |   |   | (23,011 | ) |
| Repurchase of debt                                                                                                 |   |              | (10,974 | ) |   |   | (3,250 | ) |   |   | − |   |
| Settlement of derivative      instruments                                                                          |   |              | − |   |   |   | (4,178 | ) |   |   | 2,581 |   |
| Payment of debt issuance      costs                                                                                |   |              | (293    | ) |   |   | (333 | ) |   |   | (11,651 | ) |
| Distributions paid on common      stock                                                                            |   |              | (32,564 | ) |   |   | (41,166 | ) |   |   | (37,966 | ) |
| Net cash (used in) provided by      financing activities                                                           |   |              | (26,999 | ) |   |   | (108,102 | ) |   |   | 642,316 |   |
| NET      INCREASE IN CASH AND CASH EQUIVALENTS                                                                     |   |              | 37,408  |   |   |   | 8,554 |   |   |   | 675 |   |
| CASH      AND CASH EQUIVALENTS AT BEGINNING OFPERIOD                                                               |   |              | 14,583  |   |   |   | 6,029 |   |   |   | 5,354 |   |
| CASH      AND CASH EQUIVALENTS AT END OF PERIOD                                                                    |   | $                 | 51,991  |   |   | $ | 14,583 |   |   | $ | 6,029 |   |
|                                                                                                               |   |              |    |   |   |   |   |   |   |   |   |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES:                                                                  |   |              |    |   |   |   |   |   |   |
| Distributions on common stock      declared but not paid                                                           |   | $                 | 9,170   |   |   | $ | 9,942 |   |   | $ | 10,366 |   |
| Issuance of restricted stock                                                                                       |   | $                 | 242     |   |   | $ | 1,435 |   |   | $ | 6,650 |   |
| Purchase of loans on warehouse      line                                                                           |   | $                 | − |   |   | $ | − |   |   | $ | (311,069 | ) |
| Proceeds from warehouse line                                                                                       |   | $                 | − |   |   | $ | − |   |   | $ | 311,069 |   |
| Transfer of direct financing      leases and notes                                                                 |   | $                 | 89,763  |   |   | $ | − |   |   | $ | − |   |
| Transfer of secured term      facility                                                                             |   | $                 | (82,319 | ) |   | $ | − |   |   | $ | − |   |
| Increase in bank loan      investments                                                                             |   | $                 | 1,148   |   |   | $ | − |   |   | $ | − |   |
| Decrease in bank loan      investments                                                                             |   | $                 | (1,148  | ) |   | $ | − |   |   | $ | − |   |
| SUPPLEMENTAL      DISCLOSURE:                                                                                      |   |              |    |   |   |   |   |   |   |   |   |   |
| Interest expense paid in      cash                                                                                 |   | $                 | 48,138  |   |   | $ | 94,879 |   |   | $ | 136,683 |   |
| Income taxes paid in cash                                                                                          |   | $                 | − |   |   | $ | 627 |   |   | $ | 90 |   |

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|   | · | RCC      Real Estate, Inc. (“RCC Real Estate”) holds real estate investments,      including commercial real estate loans and commercial real estate-related      securities.  RCC Real Estate owns 100% of the equity of the      following variable interest entities("VIEs"): |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Resource      Real Estate Funding CDO 2006-1 (“RREF CDO 2006-1”), a Cayman Islands      limited liability company and qualified real estate investment trust      (“REIT”) subsidiary (“QRS”).  RREF CDO 2006-1 was established to      complete a collateralized debt obligation (“CDO”) issuance secured by a      portfolio of commercial real estate loans and commercial mortgage-backed      securities. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Resource      Real Estate Funding CDO 2007-1 (“RREF CDO 2007-1”), a Cayman Islands      limited liability company and QRS.  RREF CDO 2007-1 was      established to complete a CDO issuance secured by a portfolio of      commercial real estate loans and commercial      mortgage-backed securities. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | RCC      Commercial, Inc. (“RCC Commercial”) holds bank loan investments and      commercial real estate-related securities.  RCC Commercial owns      100% of the equity of the followingVIEs: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos      CDO I, Ltd. (“Apidos CDO I”), a Cayman Islands limited liability company      and taxable REIT subsidiary (“TRS”).  Apidos CDO I was      established to complete a CDO secured by a portfolio of bank      loans. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos      CDO III, Ltd. (“Apidos CDO III”), a Cayman Islands limited liability      company and TRS.  Apidos CDO III was established to complete a      CDO secured by a portfolio of bankloans. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos      Cinco CDO, Ltd. (“Apidos Cinco CDO”), a Cayman Islands limited liability      company and TRS.  Apidos Cinco CDO was established to complete a      CDO secured by a portfolio of bankloans. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Resource      TRS, Inc. (“Resource TRS”), the Company’s directly-owned TRS, holds all      the Company’s direct financing leases andnotes. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | an      income approach utilizing an appropriate current risk-adjusted yield, time      value and projected estimated losses from default assumptions based on      analysis of underlying loanperformance; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes      on similar-vintage, higher rate, more actively traded commercial      mortgage-backed securities (“CMBS”) adjusted as appropriate for the lower      subordination level of the Company’s securities;  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer      quotes on the Company’s securities for which there is not an active      market. |
|--------|--------|----------------------------------------------------------------------------------------------------|

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| Write-down      of Investment in Ischus CDO II: |   |   |    |
|-------------------------------------------------|--------|--------|---------|
| Original investment                             |   | $      | 27,000  |   |
| Cumulative cash      distributions              |   |   | (10,697 | ) |
| Net basis                                       |   |   | 16,303  |   |
| Investment valuation at time of      sale       |   |   | (722    | ) |
| Realized loss on      investment                |   | $      | 15,581  |   |

|                                                  |   | November      13, 2007 |     |
|-------------------------------------------------------|--------|------------------------|----------|
| ASSETS:                                               |   |                   |     |
| Available-for-sale securities,      pledged           |   | $                      | 214,769  |   |
| Restricted cash                                       |   |                   | 1,954    |   |
| Interest receivable                                   |   |                   | 1,747    |   |
| Other assets                                          |   |                   | 191      |   |
| Total assets                                          |   | $                      | 218,661  |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY:      |   |                   |     |   |
| Borrowings                                            |   | $                      | 370,688  |   |
| Accrued interest and other      payables              |   |                   | 414      |   |
| Other comprehensive loss                              |   |                   | (154,486 | ) |
| RCC investment at date of      deconsolidation        |   |                   | 16,304   |   |
|                                                  |   |                   | 232,920  |   |
| Gain on deconsolidation of      VIE                   |   |                   | (14,259  | ) |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY |   | $                      | 218,661  |   |

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|                                         |   | Period      from January      1, 2007 through November      13, |    |   | Year      ended December      31, |   |    | Period      from March 8, 2005 (Date Operations Commenced) to December    31, |   |
|----------------------------------------------|--------|-----------------------------------------------------------------|---------|--------|-----------------------------------|--------|---------|-------------------------------------------------------------------------------|--------|
|                                         |   | 2007                                                            |    |   | 2006                              |   |    | 2005                                                                          |   |
| REVENUES:                                    |   |                                                            |    |   |                              |   |    |                                                                          |   |
| Securities                                   |   | $                                                               | 24,463  |   |                              | $      | 27,189  |                                                                          |   | $ | 9,252 |   |
| Interest income – other                |   |                                                            | 134     |   |                              |   | 86      |                                                                          |   |   | 100 |   |
| Total interest income                        |   |                                                            | 24,597  |   |                              |   | 27,275  |                                                                          |   |   | 9,352 |   |
| Interest expense                             |   |                                                            | 19,688  |   |                              |   | 21,666  |                                                                          |   |   | 7,161 |   |
| Net interest income                          |   |                                                            | 4,909   |   |                              |   | 5,609   |                                                                          |   |   | 2,191 |   |
|                                         |   |                                                            |    |   |                              |   |    |                                                                          |   |   |   |   |
| OPERATING      EXPENSES:                     |   |                                                            |    |   |                              |   |    |                                                                          |   |   |   |   |
| Professional services                        |   |                                                            | 138     |   |                              |   | 228     |                                                                          |   |   | 97 |   |
| General and administrative                   |   |                                                            | 83      |   |                              |   | 99      |                                                                          |   |   | 45 |   |
| Total operating expenses                     |   |                                                            | 221     |   |                              |   | 327     |                                                                          |   |   | 142 |   |
|                                         |   |                                                            |    |   |                              |   |    |                                                                          |   |   |   |   |
| NET      OPERATING INCOME                    |   |                                                            | 4,688   |   |                              |   | 5,282   |                                                                          |   |   | 2,049 |   |
|                                         |   |                                                            |    |   |                              |   |    |                                                                          |   |   |   |   |
| OTHER      (EXPENSES) REVENUES:              |   |                                                            |    |   |                              |   |    |                                                                          |   |   |   |   |
| Net realized gain (loss) on      investments |   |                                                            | 47      |   |                              |   | (47     | )                                                                             |   |   | − |   |
| Asset impairments                            |   |                                                            | (26,277 | )      |                              |   | − |                                                                          |   |   | − |   |
| Total expenses                               |   |                                                            | (26,230 | )      |                              |   | (47     | )                                                                             |   |   | − |   |
|                                         |   |                                                            |    |   |                              |   |    |                                                                          |   |   |   |   |
| NET      (LOSS) INCOME                       |   | $                                                               | (21,542 | )      |                              | $      | 5,235   |                                                                          |   | $ | 2,049 |   |

|                                              |   | Amortized      Cost      (1) |   |   | Unrealized      Gains |   |    | Unrealized      Losses |   |   | Fair      Value (1) |   |
|---------------------------------------------------|--------|------------------------------|--------|--------|-----------------------|--------|---------|------------------------|--------|--------|---------------------|--------|
| December 31, 2009:                                |   |                         |   |   |                  |   |    |                   |   |   |                |   |
| Commercial mortgage-backed      private placement |   | $                            | 92,110 |   |                  | $      | 2,622   |                   |   | $      | (50,214             | )      |   | $ | 44,518 |   |
| Other asset-backed                                |   |                         | 24     |   |                  |   | − |                   |   |   | −             |   |   |   | 24 |   |
| Total                                             |   | $                            | 92,134 |   |                  | $      | 2,622   |                   |   | $      | (50,214             | )      |   | $ | 44,542 |   |
|                                              |   |                         |   |   |                  |   |    |                   |   |   |                |   |   |   |   |   |
| December 31, 2008:                                |   |                         |   |   |                  |   |    |                   |   |   |                |   |   |   |   |   |
| Commercial mortgage-backed      private placement |   | $                            | 70,458 |   |                  | $      | − |                   |   | $      | (41,243             | )      |   | $ | 29,215 |   |
| Other asset-backed                                |   |                         | 5,665  |   |                  |   | − |                   |   |   | (5,620              | )      |   |   | 45 |   |
| Total                                             |   | $                            | 76,123 |   |                  | $      | − |                   |   | $      | (46,863             | )      |   | $ | 29,260 |   |

----

| (1) | As      of December 31, 2009 and 2008, $39.3 million and $22.5 million,      respectively, of securities were pledged as collateral security under      related financings. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Weighted      Average Life                          |   | Fair      Value |   |   | Amortized      Cost |   |   | Weighted      Average Coupon |   |
|-----------------------------------------------------|--------|-----------------|--------|--------|---------------------|--------|--------|------------------------------|--------|
| December 31, 2009:                                  |   |            |   |   |                |   |   |                         |   |
| Less than one year                                  |   | $               | 7,503  |   |                | $      | 20,043 |                         |   |   | 1.50% |   |
| Greater than one year and less      than five years |   |            | 4,346  |   |                |   | 12,728 |                         |   |   | 2.24% |   |
| Greater than five years                             |   |            | 32,693 |   |                |   | 59,363 |                         |   |   | 5.76% |   |
| Total                                               |   | $               | 44,542 |   |                | $      | 92,134 |                         |   |   | 4.35% |   |
| December 31, 2008:                                  |   |            |   |   |                |   |   |                         |   |   |   |   |
| Less than one year                                  |   | $               | 5,088  |   |                | $      | 10,465 |                         |   |   | 3.17% |   |
| Greater than one year and less      than five years |   |            | 9,954  |   |                |   | 21,596 |                         |   |   | 3.75% |   |
| Greater than five years                             |   |            | 14,218 |   |                |   | 44,062 |                         |   |   | 5.05% |   |
| Total                                               |   | $               | 29,260 |   |                | $      | 76,123 |                         |   |   | 4.36% |   |

|                                                   |   | Less      than 12 Months |    |   | More      than 12 Months     |   |    | Total           |   |
|--------------------------------------------------------|--------|--------------------------|---------|--------|------------------------------|--------|---------|-----------------|--------|
|                                                   |   | Fair      Value          |    |   | Gross      Unrealized Losses |   |    | Fair      Value |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |   | Gross      Unrealized Losses |   |
| December 31, 2009:                                     |   |                     |    |   |                         |   |    |            |   |   |   |   |   |   |   |   |   |   |
| Commercial      mortgage-backed private      placement |   | $                        | 11,193  |   |                         | $      | (1,073  | )               |   | $ | 14,588 |   |   | $ | (49,141 | ) |   | $ | 25,781 |   |   | $ | (50,214 | ) |
| Total temporarilyimpaired securities                   |   | $                        | 11,193  |   |                         | $      | (1,073  | )               |   | $ | 14,588 |   |   | $ | (49,141 | ) |   | $ | 25,781 |   |   | $ | (50,214 | ) |
|                                                   |   |                     |    |   |                         |   |    |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:                                     |   |                     |    |   |                         |   |    |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial      mortgage-backed private      placement |   | $                        | − |   |                         | $      | − |            |   | $ | 29,215 |   |   | $ | (41,243 | ) |   | $ | 29,215 |   |   | $ | (41,243 | ) |
| Other asset-backed                                     |   |                     | − |   |                         |   | − |            |   |   | 45 |   |   |   | (5,620 | ) |   |   | 45 |   |   |   | (5,620 | ) |
| Total temporarilyimpaired securities                   |   | $                        | − |   |                         | $      | − |            |   | $ | 29,260 |   |   | $ | (46,863 | ) |   | $ | 29,260 |   |   | $ | (46,863 | ) |

|   | · | the      length of time the market value has been less than amortized      cost; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | the      severity of the impairment; |
|--------|--------|--------------------------------------|

|   | · | the      expected loss of the security as generated by third party      software; |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | credit      ratings from the rating agencies; |
|--------|--------|-----------------------------------------------|

|   | · | underlying      credit fundamentals of the collateral backing the securities;      and |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | the      Company’s intent to sell as well as the likelihood that the Company will      be required to sell the security before the recovery of the amortized cost      basis. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | an      income approach utilizing an appropriate current risk-adjusted yield, time      value and projected estimated losses from default assumptions based on      historical analysis of underlying loan  performance; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes      on similar-vintage, higher rated, more actively traded CMBS adjusted for      the lower subordination level of the Company’s securities;    and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer      quotes on the Company’s securities for which there is not an active      market. |
|--------|--------|----------------------------------------------------------------------------------------------------|

| NOTE      6 – INVESTMENT SECURITIESHELD-TO-MATURITY |
|-----------------------------------------------------------|

|                                 |   | Amortized      Cost |   |   | Unrealized      Gains |   |    | Unrealized      Losses |   |   | Fair      Value |   |
|--------------------------------------|--------|---------------------|--------|--------|-----------------------|--------|---------|------------------------|--------|--------|-----------------|--------|
| December 31, 2009:                   |   |                |   |   |                  |   |    |                   |   |   |            |   |
| Collateralized loan      obligations |   | $                   | 31,401 |   |                  | $      | 267     |                   |   | $      | (10,348         | )      |   | $ | 21,320 |   |
| Total                                |   | $                   | 31,401 |   |                  | $      | 267     |                   |   | $      | (10,348         | )      |   | $ | 21,320 |   |
|                                 |   |                |   |   |                  |   |    |                   |   |   |            |   |   |   |   |   |
| December 31, 2008:                   |   |                |   |   |                  |   |    |                   |   |   |            |   |   |   |   |   |
| Collateralized loan      obligations |   | $                   | 28,157 |   |                  | $      | − |                   |   | $      | (23,339         | )      |   | $ | 4,818 |   |
| Total                                |   | $                   | 28,157 |   |                  | $      | − |                   |   | $      | (23,339         | )      |   | $ | 4,818 |   |

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| NOTE      6 – INVESTMENT SECURITIES HELD-TO-MATURITY –  (continued) |
|---------------------------------------------------------------------------------|

| Contractual      Life                                |   | Fair      Value |   |   | Amortized      Cost |   |
|------------------------------------------------------|--------|-----------------|--------|--------|---------------------|--------|
| December 31, 2009:                                   |   |            |   |   |                |   |
| Greater than five years and less      than ten years |   | $               | 15,628 |   |                | $      | 19,667 |   |
| Greater than ten years                               |   |            | 5,692  |   |                |   | 11,734 |   |
| Total                                                |   | $               | 21,320 |   |                | $      | 31,401 |   |
|                                                 |   |            |   |   |                |   |   |   |
| December 31, 2008:                                   |   |            |   |   |                |   |   |   |
| Greater than five years and less      than ten years |   | $               | 3,093  |   |                | $      | 12,487 |   |
| Greater than ten years                               |   |            | 1,725  |   |                |   | 15,670 |   |
| Total                                                |   | $               | 4,818  |   |                | $      | 28,157 |   |

|                                 |   | Less      than 12 Months |   |   | More      than 12 Months     |   |   | Total           |   |
|--------------------------------------|--------|--------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                 |   | Fair      Value          |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |   | Gross      Unrealized Losses |   |
| December 31, 2009:                   |   |                     |   |   |                         |   |   |            |   |   |   |   |   |   |   |   |   |   |
| Collateralizedloanobligations        |   | $                        | 2,530  |   |                         | $      | (44    | )               |   | $ | 10,980 |   |   | $ | (10,304 | ) |   | $ | 13,510 |   |   | $ | (10,348 | ) |
| Total temporarilyimpaired securities |   | $                        | 2,530  |   |                         | $      | (44    | )               |   | $ | 10,980 |   |   | $ | (10,304 | ) |   | $ | 13,510 |   |   | $ | (10,348 | ) |
|                                 |   |                     |   |   |                         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:                   |   |                     |   |   |                         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Collateralizedloanobligations        |   | $                        | 2,688  |   |                         | $      | (6,924 | )               |   | $ | 2,130 |   |   | $ | (16,415 | ) |   | $ | 4,818 |   |   | $ | (23,339 | ) |
| Total temporarilyimpaired securities |   | $                        | 2,688  |   |                         | $      | (6,924 | )               |   | $ | 2,130 |   |   | $ | (16,415 | ) |   | $ | 4,818 |   |   | $ | (23,339 | ) |

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| Loan      Description                   |   | Principal |      |   | Unamortized(Discount)      Premium |   |    | CarryingValue      (1) |   |
|-----------------------------------------|--------|-----------|-----------|--------|------------------------------------|--------|---------|------------------------|--------|
| December 31, 2009:                      |   |      |      |   |                               |   |    |                   |   |
| Bank loans (2)                          |   | $         | 893,183   |   |                               | $      | (27,682 | )                      |   | $ | 865,501 |   |
| Commercial real estate      loans:      |   |      |      |   |                               |   |    |                   |   |   |   |   |
| Whole loans                             |   |      | 484,464   |   |                               |   | (269    | )                      |   |   | 484,195 |   |
| B notes                                 |   |      | 81,450    |   |                               |   | 27      |                   |   |   | 81,477 |   |
| Mezzanine loans                         |   |      | 182,523   |   |                               |   | 163     |                   |   |   | 182,686 |   |
| Total commercial real estate      loans |   |      | 748,437   |   |                               |   | (79     | )                      |   |   | 748,358 |   |
| Subtotal loans before      allowances   |   |      | 1,641,620 |   |                               |   | (27,761 | )                      |   |   | 1,613,859 |   |
| Allowance for loan loss                 |   |      | (47,122   | )      |                               |   | − |                   |   |   | (47,122 | ) |
| Total                                   |   | $         | 1,594,498 |   |                               | $      | (27,761 | )                      |   | $ | 1,566,737 |   |
|                                    |   |      |      |   |                               |   |    |                   |   |   |   |   |
| December 31, 2008:                      |   |      |      |   |                               |   |    |                   |   |   |   |   |
| Bank loans (2)                          |   | $         | 916,966   |   |                               | $      | (7,616  | )                      |   | $ | 909,350 |   |
| Commercial real estate      loans:      |   |      |      |   |                               |   |    |                   |   |   |   |   |
| Whole loans                             |   |      | 521,015   |   |                               |   | (1,678  | )                      |   |   | 519,337 |   |
| B notes                                 |   |      | 89,005    |   |                               |   | 64      |                   |   |   | 89,069 |   |
| Mezzanine loans                         |   |      | 215,255   |   |                               |   | (4,522  | )                      |   |   | 210,733 |   |
| Total commercial real estate      loans |   |      | 825,275   |   |                               |   | (6,136  | )                      |   |   | 819,139 |   |
| Subtotal loans before      allowances   |   |      | 1,742,241 |   |                               |   | (13,752 | )                      |   |   | 1,728,489 |   |
| Allowance for loan loss                 |   |      | (43,867   | )      |                               |   | − |                   |   |   | (43,867 | ) |
| Total                                   |   | $         | 1,698,374 |   |                               | $      | (13,752 | )                      |   | $ | 1,684,622 |   |

----

| (1)   | Substantially      all loans are pledged as collateral under various borrowings at December      31, 2009 and December 31, 2008. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Amounts      include $8.1 million and $9.0 million of loans held for sale as of      December 31, 2009 and 2008,respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------|

| Allowance      for loan loss at January 1, 2008   |   | $      | 5,918   |   |
|---------------------------------------------------|--------|--------|---------|--------|
| Reserve charged to      expense                   |   |   | 45,259  |   |
| Loans charged-off                                 |   |   | (7,310  | )      |
| Recoveries                                        |   |   | − |   |
| Allowance      for loan loss at January 1, 2009   |   |   | 43,867  |   |
| Reserve charged to expense                        |   |   | 58,711  |   |
| Loans charged-off                                 |   |   | (55,456 | )      |
| Recoveries                                        |   |   | − |   |
| Allowance      for loan loss at December 31, 2009 |   | $      | 47,122  |   |

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| Description                                    |   | Quantity |   |   | Amortized      Cost |   | ContractedInterest      Rates |   | Maturity Dates (3)                             |
|------------------------------------------------|--------|----------|--------|--------|---------------------|--------|-------------------------------|--------|------------------------------------------------|
| December 31, 2009:                             |   |     |   |   |                |   |                          |   |                                           |
| Whole loans, floating      rate  (1) |   |     | 32     |   |                | $      | 403,890                       |   | LIBOR      plus 1.50% to LIBOR      plus 4.40% |   | May      2010 toFebruary      2017 |
| Whole loans, fixed      rate  (1)    |   |     | 6      |   |                |   | 80,305                        |   | 6.98%      to 10.00%                           |   | May      2010 toAugust      2012 |
| B notes, floating rate                         |   |     | 3      |   |                |   | 26,500                        |   | LIBOR      plus 2.50% to LIBOR      plus 3.01% |   | July      2010 toOctober      2010 |
| B notes, fixed rate                            |   |     | 3      |   |                |   | 54,977                        |   | 7.00%      to 8.68%                            |   | July      2011 toJuly      2016 |
| Mezzanine loans, floating      rate            |   |     | 10     |   |                |   | 124,048                       |   | LIBOR      plus 2.15% to LIBOR      plus 3.45% |   | May      2010 toJanuary      2013 |
| Mezzanine loans, fixed      rate               |   |     | 5      |   |                |   | 58,638                        |   | 8.14%      to 11.00%                           |   | May      2010 toSeptember      2016 |
| Total (2)                                 |   |     | 59     |   |                | $      | 748,358                       |   |                                           |   |   |
|                                           |   |     |   |   |                |   |                          |   |                                           |   |   |
| December 31, 2008:                             |   |     |   |   |                |   |                          |   |                                           |   |   |
| Whole loans, floating      rate  (1) |   |     | 29     |   |                | $      | 431,985                       |   | LIBOR      plus 1.50% to LIBOR      plus 4.40% |   | April      2009 toAugust      2011 |
| Whole loans, fixed      rate  (1)    |   |     | 7      |   |                |   | 87,352                        |   | 6.98%      to 10.00%                           |   | May      2009 toAugust      2012 |
| B notes, floating rate                         |   |     | 4      |   |                |   | 33,535                        |   | LIBOR      plus 2.50% to LIBOR      plus 3.01% |   | March      2009 toOctober      2009 |
| B notes, fixed rate                            |   |     | 3      |   |                |   | 55,534                        |   | 7.00%      to 8.68%                            |   | July      2011 toJuly      2016 |
| Mezzanine loans, floating      rate            |   |     | 10     |   |                |   | 129,459                       |   | LIBOR      plus 2.15% to LIBOR      plus 3.45% |   | May      2009 toFebruary      2010 |
| Mezzanine loans, fixed      rate               |   |     | 7      |   |                |   | 81,274                        |   | 5.78%      to 11.00%                           |   | November      2009 toSeptember      2016 |
| Total (2)                                 |   |     | 60     |   |                | $      | 819,139                       |   |                                           |   |   |

----

| (1) | Whole      loans had $5.6 million and $26.6 million in unfunded loan commitments as      of December 31, 2009 and 2008, respectively, that are funded as the loans      require additional funding and the related borrowers have satisfied the      requirements to obtain this additionalfunding. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      total does not include an allowance for loan losses of $29.3 million and      $15.1 million recorded as of December 31, 2009 and 2008,      respectively. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Excludes      two floating rate whole loans.  One whole loan matured in July      2009 and is in foreclosure.  The other whole loan that      matured is on a month-to-month extension and is current with respect      to interest. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Allowance      for lease loss at January 1, 2008   |   | $      | − |   |
|----------------------------------------------------|--------|--------|---------|--------|
| Provision for lease loss                           |   |   | 901     |   |
| Leases charged-off                                 |   |   | (451    | )      |
| Recoveries                                         |   |   | − |   |
| Allowance      for lease loss at December 31, 2008 |   |   | 450     |   |
| Provision for lease loss                           |   |   | 2,672   |   |
| Leases charged off                                 |   |   | (1,994  | )      |
| Recoveries                                         |   |   | 12      |   |
| Allowance      for lease loss at December 31, 2009 |   | $      | 1,140   |   |

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|                                              |   | Outstanding      Borrowings |      |   | Weighted      Average Borrowing Rate |   |   | Weighted      Average Remaining      Maturity |   | Value      of Collateral |   |
|---------------------------------------------------|--------|-----------------------------|-----------|--------|--------------------------------------|--------|--------|-----------------------------------------------|--------|--------------------------|--------|
| December 31, 2009:                                |   |                        |      |   |                                 |   |   |                                          |   |                     |   |
| RREF CDO 2006-1 Senior Notes      (2)             |   | $                           | 240,227   |   |                                 |   | 1.11%  |                                          |   | 36.6      years          |   | $ | 267,153 |   |
| RREF CDO 2007-1 Senior Notes      (3)             |   |                        | 346,673   |   |                                 |   | 0.81%  |                                          |   | 36.8      years          |   |   | 435,225 |   |
| Apidos CDO I Senior Notes (4)                |   |                        | 319,103   |   |                                 |   | 0.86%  |                                          |   |        7.6 years    |   |   | 290,578 |   |
| Apidos CDO III Senior Notes      (5)         |   |                        | 260,158   |   |                                 |   | 0.71%  |                                          |   | 10.5      years          |   |   | 237,499 |   |
| Apidos Cinco CDO Senior Notes      (6)       |   |                        | 318,791   |   |                                 |   | 0.78%  |                                          |   | 10.4      years          |   |   | 299,874 |   |
| Unsecured Junior Subordinated      Debentures (7) |   |                        | 51,548    |   |                                 |   | 6.19%  |                                          |   | 26.7 years               |   |   | − |   |
| Total                                             |   | $                           | 1,536,500 |   |                                 |   | 1.02%  |                                          |   | 20.4 years               |   | $ | 1,530,329 |   |
|                                              |   |                        |      |   |                                 |   |   |                                          |   |                     |   |   |   |   |
| December 31, 2008:                                |   |                        |      |   |                                 |   |   |                                          |   |                     |   |   |   |   |
| Repurchase Agreements (1)                    |   | $                           | 17,112    |   |                                 |   | 3.50%  |                                          |   | 18.0      days           |   | $ | 39,703 |   |
| RREF CDO 2006-1 Senior Notes      (2)             |   |                        | 261,198   |   |                                 |   | 1.38%  |                                          |   | 37.6      years          |   |   | 322,269 |   |
| RREF CDO 2007-1 Senior Notes      (3)             |   |                        | 377,851   |   |                                 |   | 1.15%  |                                          |   | 37.8      years          |   |   | 467,310 |   |
| Apidos CDO I Senior Notes (4)                |   |                        | 318,469   |   |                                 |   | 4.03%  |                                          |   |        8.6 years    |   |   | 206,799 |   |
| Apidos CDO III Senior Notes      (5)         |   |                        | 259,648   |   |                                 |   | 2.55%  |                                          |   | 11.5      years          |   |   | 167,933 |   |
| Apidos Cinco CDO Senior Notes      (6)       |   |                        | 318,223   |   |                                 |   | 2.64%  |                                          |   | 11.4      years          |   |   | 207,684 |   |
| Secured Term Facility                             |   |                        | 95,714    |   |                                 |   | 4.14%  |                                          |   |        1.3 years    |   |   | 104,015 |   |
| Unsecured Junior Subordinated      Debentures (7) |   |                        | 51,548    |   |                                 |   | 6.42%  |                                          |   | 27.7 years               |   |   | − |   |
| Total                                             |   | $                           | 1,699,763 |   |                                 |   | 2.57%  |                                          |   | 20.6 years               |   | $ | 1,515,713 |   |

----

| (1) | At      December 31, 2008, collateral consisted of a RREF CDO 2007-1 Class H bond      that was retained at closing with a carrying value of $3.9 million and      loans with a carrying value of $35.8million. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Amount      represents principal outstanding of $243.5 million and $265.5 million less      unamortized issuance costs of $3.3 million and $4.3 million as of December      31, 2009 and December 31, 2008, respectively.  This CDO      transaction closed in August 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Amount      represents principal outstanding of $351.2 million less unamortized      issuance costs of $4.6 million as of December 31, 2009 and principal      outstanding of $383.8 million less unamortized issuance costs of $5.9      million as of December 31, 2008.  This CDO transaction closed in      June 2007. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Amount      represents principal outstanding of $321.5 million less unamortized      issuance costs of $2.4 million as of December 31, 2009 and $3.0 million as      of December 31, 2008.  The CDO transaction closed in August      2005. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Amount      represents principal outstanding of $262.5 million less unamortized      issuance costs of $2.3 million as of December 31, 2009 and $2.9 million as      of December 31, 2008.  This CDO transaction closed in May      2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Amount      represents principal outstanding of $322.0 million less unamortized      issuance costs of $3.3 million as of December 31, 2009 and $3.8 million as      of December 31, 2008.  This CDO transaction closed in May      2007. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Amount      represents junior subordinated debentures issued to Resource Capital Trust      I and RCC Trust II in May 2006 and September 2006,      respectively. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                    |   | Amount      at Risk      (1) |   |   | Weighted      Average Maturity in Days |   |   | Weighted      Average Interest Rate |   |
|-----------------------------------------|--------|------------------------------|--------|--------|----------------------------------------|--------|--------|-------------------------------------|--------|
| December 31, 2008:                      |   |                         |   |   |                                   |   |   |                                |   |
| Natixis Real Estate Capital      Inc.   |   | $                            | 18,992 |   |                                   |   | 18     |                                |   |   | 3.50% |   |
| Credit Suisse Securities (USA)      LLC |   | $                            | 3,793  |   |                                   |   | 23     |                                |   |   | 4.50% |   |

----

| (1) | Equal      to the estimated fair value of securities or loans sold, plus accrued      interest income, minus the sum of repurchase agreement liabilities plus      accrued interest expense. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      amount of the facility was reduced from $150,000,000 to      $100,000,000. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | The      amount of the facility will further be reduced to the amount outstanding      on October 18, 2009. |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Beginning      on November 25, 2008, any further repurchase agreement transactions may be      made in Natixis’ sole discretion.  In addition, premiums over      new repurchase prices are required for early repurchase by RCC Real Estate      SPE 3 of the existing assets that represent collateral under the facility;      however, the premiums will reduce the repurchase price of the remaining      existing assets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | RCC      Real Estate SPE 3’s obligation to pay non-usage fees was      terminated. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | The      weighted average undrawn balance (as defined in the agreement) threshold      exempting payment of the non-usage fee was reduced from $75,000,000 to      $56,250,000. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      minimum net worth covenant amount was reduced from $250,000,000 to      $125,000,000. |
|--------|--------|------------------------------------------------------------------------------------------------|

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|                                         |   | Non-Employee      Directors |    |   | Non-Employees |   |     | Total  |   |
|----------------------------------------------|--------|-----------------------------|---------|--------|---------------|--------|----------|--------|--------|
| Unvested      shares as of January 1, 2009   |   |                        | 17,261  |   |          |   | 435,049  |   |   |   | 452,310 |   |
| Issued                                       |   |                        | 52,632  |   |          |   | 197,500  |   |   |   | 250,132 |   |
| Vested                                       |   |                        | (17,261 | )      |          |   | (239,671 | )      |   |   | (256,932 | ) |
| Forfeited                                    |   |                        | − |   |          |   | (8,191   | )      |   |   | (8,191 | ) |
| Unvested      shares as of December 31, 2009 |   |                        | 52,632  |   |          |   | 384,687  |   |   |   | 437,319 |   |

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|                                     |   | Number      of Options |    |   | Weighted      Average Exercise Price |   |    | Weighted      Average Remaining Contractual Term (in      years) |   |   | Aggregate      Intrinsic      Value (in      thousands) |   |
|------------------------------------------|--------|------------------------|---------|--------|--------------------------------------|--------|---------|------------------------------------------------------------------|--------|--------|---------------------------------------------------------|--------|
| Outstanding      as of January 1, 2009   |   |                   | 624,166 |   |                                 | $      | 14.99   |                                                             |   |   |                                                    |   |   |   |
| Granted                                  |   |                   | − |   |                                 |   | − |                                                             |   |   |                                                    |   |   |   |
| Exercised                                |   |                   | − |   |                                 |   | − |                                                             |   |   |                                                    |   |   |   |
| Forfeited                                |   |                   | (16,500 | )      |                                 |   | 15.00   |                                                             |   |   |                                                    |   |   |   |
| Outstanding      as of December 31, 2009 |   |                   | 607,666 |   |                                 | $      | 14.99   |                                                             |   |   | 5                                                       |   |   | $ | 545 |   |
| Exercisable      at December 31, 2009    |   |                   | 586,000 |   |                                 | $      | 14.99   |                                                             |   |   | 5                                                       |   |   | $ | 526 |   |

| Unvested Options                   |   | Options |    |   | Weighted      Average      Grant Date      Fair      Value |   |
|------------------------------------|--------|---------|---------|--------|------------------------------------------------------------|--------|
| Unvested      at January 1, 2009   |   |    | 43,333  |   |                                                       | $      | 14.88 |   |
| Granted                            |   |    | − |   |                                                       |   | − |   |
| Vested                             |   |    | (21,667 | )      |                                                       | $      | 14.88 |   |
| Forfeited                          |   |    | − |   |                                                       |   | − |   |
| Unvested      at December 31, 2009 |   |    | 21,666  |   |                                                       | $      | 14.88 |   |

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| Vested Options                      |   | Number      of Options |    |   | Weighted      Average Exercise Price |   | Weighted      Average Remaining Contractual Term (in years) |   | Aggregate      Intrinsic      Value (in      thousands) |
|-------------------------------------|--------|------------------------|---------|--------|--------------------------------------|--------|-------------------------------------------------------------|--------|---------------------------------------------------------|
| Vested      as of January 1, 2009   |   |                   | 580,833 |   |                                 | $      | 15.00                                                       |   |                                                    |   |   |
| Vested                              |   |                   | 21,667  |   |                                 | $      | 14.88                                                       |   |                                                    |   |   |
| Exercised                           |   |                   | − |   |                                 | $      | −                                                     |   |                                                    |   |   |
| Forfeited                           |   |                   | (16,500 | )      |                                 | $      | 15.00                                                       |   |                                                    |   |   |
| Vested      as of December 31, 2009 |   |                   | 586,000 |   |                                 | $      | 14.99                                                       |   | 5                                                       |   |             $        539 |

|                |   | As      of December 31, |                          |
|---------------------|--------|-------------------------|-------------------------------|
|                |   | 2009                    |                          |   | 2008 |   |   | 2007 |   |
| Expected      life  |   | 7      years            |                          |   | 8      years |   |   | 7      years |   |
| Discount      rate  |   |                    |          3.53% |   |   |   |          2.94% |   |   |   |        3.97% |   |
| Volatility          |   |                    | 137.86%                       |   |   |   | 127.20% |   |   |   | 42.84% |   |
| Dividend      yield |   |                    |         20.33%      |   |   |   |        33.94% |   |   |   | 17.62% |   |

|                                                        |   | December      31, |   |
|-------------------------------------------------------------|--------|-------------------|--------|
|                                                        |   | 2009              |   |   | 2008 |   |   | 2007 |   |
|                                                        |   |              |   |   |   |   |   |   |   |
| Options      granted to Manager and non-employees           |   | $                 | 15     |   |   | $ | (52 | ) |   | $ | (91 | ) |
| Restricted      shares granted to Manager and non-employees |   |              | 1,113  |   |   |   | 486 |   |   |   | 1,582 |   |
| Restricted      shares granted to non-employee directors    |   |              | 112    |   |   |   | 106 |   |   |   | 74 |   |
| Total      equity compensation expense                      |   | $                 | 1,240  |   |   | $ | 540 |   |   | $ | 1,565 |   |

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|                                                                    |   | December      31, |       |
|-------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                    |   | 2009              |       |   | 2008 |   |   | 2007 |   |
| Basic:                                                                  |   |              |       |   |   |   |   |   |   |
| Net Income (loss)                                                       |   | $                 | 6,339      |   |   | $ | (3,074 | ) |   | $ | 8,890 |   |
| Weighted average number of shares      outstanding                      |   |              | 25,205,403 |   |   |   | 24,757,386 |   |   |   | 24,610,468 |   |
| Basic net income (loss) per      share                                  |   | $                 | 0.25       |   |   | $ | (0.12 | ) |   | $ | 0.36 |   |
|                                                                    |   |              |       |   |   |   |   |   |   |   |   |   |
| Diluted:                                                                |   |              |       |   |   |   |   |   |   |   |   |   |
| Net Income (loss)                                                       |   | $                 | 6,339      |   |   | $ | (3,074 | ) |   | $ | 8,890 |   |
| Weighted average number of shares      outstanding                      |   |              | 25,205,403 |   |   |   | 24,757,386 |   |   |   | 24,610,468 |   |
| Additional shares due to assumed      conversion of dilutiveinstruments |   |              | 150,418    |   |   |   | − |   |   |   | 249,716 |   |
| Adjusted weighted-average number      of common sharesoutstanding       |   |              | 25,355,821 |   |   |   | 24,757,386 |   |   |   | 24,860,184 |   |
| Diluted net income (loss) per      share                                |   | $                 | 0.25       |   |   | $ | (0.12 | ) |   | $ | 0.36 |   |

|   | · | A      monthly base management fee equal to 1/12th of the amount of The Company’s      equity multiplied by 1.50%.  Under the management agreement,      ‘‘equity’’ is equal to the net proceeds from any issuance of shares of      common stock less offering related costs, plus or minus the Company’s      retained earnings (excluding non-cash equity compensation incurred in      current or prior periods) less any amounts we have paid for common stock      repurchases.  The calculation is adjusted for one-time events      due to changes in GAAP, as well as other non-cash charges, upon approval      of independent directors of theCompany. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incentive      compensation calculated as follows: (i) twenty-five percent      (25%) of the dollar amount by which (A) the Company’s Adjusted      Operating Earnings (before Incentive Compensation but after the Base      Management Fee) for such quarter per Common Share (based on the weighted      average number of Common Shares outstanding for such quarter) exceeds      (B) an amount equal to (1) the weighted average of the price per      share of the Common Shares in the initial offering by the Company and the      prices per share of the Common Shares in any subsequent offerings by the      Company, in each case at the time of issuance thereof, multiplied by      (2) the greater of (a) 2.00% and (b) 0.50% plus one-fourth      of the Ten Year Treasury Rate for such quarter, multiplied by      (ii) the weighted average number of Common Shares outstanding during      such quarter subject to adjustment; to exclude events pursuant to changes      in GAAP or the application of GAAP, as well as non-recurring or unusual      transactions or events, after discussion between the Manager and the      Independent Directors and approval by a majority of the Independent      Directors in the case of non-recurring or unusual transactions or      events. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reimbursement      of out-of-pocket expenses and certain other costs incurred by the Manager      that relate directly to the Company and its  operations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Manager provides the Company with a Chief Financial Officer and three      accounting professionals, each of whom is exclusively dedicated to the      Company’s operations.  The Manager also provides the Company with a      director of investor relations who is 50% dedicated to the Company’s      operations.  The Company bears the expense of the wages, salaries and      benefits of the Chief Financial Officer and three accounting      professionals, and bears 50% of the salary and benefits of the director of      investor relations. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | if      such shares are traded on a securities exchange, at the average of the      closing prices of the shares on such exchange over the thirty day period      ending three days prior to the issuance of such  shares; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      such shares are actively traded over-the-counter, at the average of the      closing bid or sales price as applicable over the thirty day period ending      three days prior to the issuance of such shares;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      there is no active market for such shares, the value shall be the fair      market value thereof, as reasonably determined in good faith by the board      of directors of the Company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unsatisfactory      performance; and/or |
|--------|--------|-----------------------------------------|

|   | · | unfair      compensation payable to the Manager where fair compensation cannot be      agreed upon by the Company (pursuant to a vote of two-thirds of the      independent directors) and theManager. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | an      income approach utilizing an appropriate current risk-adjusted yield, time      value and projected estimated losses from default assumptions based on      analysis of underlying loanperformance; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | quotes      on similar-vintage, higher rate, more actively traded commercial      mortgage-backed securities (“CMBS”) adjusted as appropriate for the lower      subordination level of the Company’s securities;  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | dealer      quotes on the Company’s securities for which there is not an active      market. |
|--------|--------|----------------------------------------------------------------------------------------------------|

|                                          |   | Level      1 |    |   | Level      2 |   |    | Level      3 |   |   | Total         |   |
|-----------------------------------------------|--------|--------------|---------|--------|--------------|--------|---------|--------------|--------|--------|---------------|--------|
| Assets:                                       |   |         |    |   |         |   |    |         |   |   |          |   |
| Investment securities      available-for-sale |   | $            | − |   |         | $      | − |         |   | $      | 44,542        |   |   | $ | 44,542 |   |
| Total assets at fair value                    |   | $            | − |   |         | $      | − |         |   | $      | 44,542        |   |   | $ | 44,542 |   |
| Liabilities:                                  |   |         |    |   |         |   |    |         |   |   |          |   |   |   |   |   |
| Derivatives (net)                             |   | $            | − |   |         | $      | 12,767  |         |   | $      |  − |   |   | $ | 12,767 |   |
| Total liabilities at fair      value          |   | $            | − |   |         | $      | 12,767  |         |   | $      | −       |   |   | $ | 12,767 |   |

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|                                                                              |   | Level      3 |    |
|-----------------------------------------------------------------------------------|--------|--------------|---------|
| Beginning      balance, January 1, 2009                                           |   | $            | 29,260  |   |
| Total      gains or losses (realized/unrealized):                                 |   |         |    |   |
| Included in earnings                                                              |   |         | (10,956 | ) |
| Purchases                                                                         |   |         | 26,967  |   |
| Unrealized losses – included in      accumulated other comprehensive income |   |         | (729    | ) |
| Ending      balance, December 31, 2009                                            |   | $            | 44,542  |   |

|                             |   | Level      1 |    |   | Level      2 |   |   | Level      3 |   |   | Total   |   |
|----------------------------------|--------|--------------|---------|--------|--------------|--------|--------|--------------|--------|--------|---------|--------|
| Assets:                          |   |         |    |   |         |   |   |         |   |   |    |   |
| Loans held for sale              |   | $            | − |   |         | $      | 8,050  |         |   | $      | − |   |   | $ | 8,050 |   |
| Securities      held-to-maturity |   |         | − |   |         |   | 925    |         |   |   | − |   |   |   | 925 |   |
| Impaired loans                   |   |         | − |   |         |   | 3,195  |         |   |   | 102,793 |   |   |   | 105,988 |   |
| Total assets at fair value       |   | $            | − |   |         | $      | 12,170 |         |   | $      | 102,793 |   |   | $ | 114,963 |   |

|                                        |   | Fair Value of Financial      Instruments |      |
|---------------------------------------------|--------|------------------------------------------|-----------|
|                                        |   | (in      thousands)                      |      |
|                                        |   | December      31, 2009                   |      |   | December      31, 2008 |   |
|                                        |   | Carrying      value                      |      |   | Fair      value |   |   | Carrying      value |   |   | Fair      value |   |
| Investment      securities held-to-maturity |   | $                                        | 31,401    |   |   | $ | 21,320 |   |   | $ | 28,157 |   |   | $ | 4,818 |   |
| Loans      held-for-investment              |   | $                                        | 1,558,687 |   |   | $ | 1,515,626 |   |   | $ | 1,684,622 |   |   | $ | 1,033,109 |   |
| CDOs                                        |   | $                                        | 1,484,952 |   |   | $ | 857,262 |   |   | $ | 1,535,389 |   |   | $ | 690,926 |   |
| Junior      subordinated notes              |   | $                                        | 51,548    |   |   | $ | 18,042 |   |   | $ | 51,548 |   |   | $ | 10,310 |   |

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| Fair      Value of Derivative Instruments as of December 31, 2009(in      thousands) |   |
|--------------------------------------------------------------------------------------|--------|
|                                                                                 |   | Liability      Derivatives |   |
|                                                                                 |   | Notional      Amount |   | Balance      Sheet Location |   | Fair      Value |   |
| Derivatives      not designated as hedging instrumentsunder SFAS 133                 |   |   |   |   |   |   |   |
| Interest      rate cap agreement                                                     |   | $ | 14,841 |   | Derivatives,      at fair value |   | $ | 45 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |
| Derivatives      designated as hedging instrumentsunder SFAS 133                     |   |   |   |   |   |   |   |   |   |
| Interest      rate swap contracts                                                    |   | $ | 217,907 |   | Derivatives,      at fair value |   | $ | (12,812 | ) |
|                                                                                 |   |   |   |   | Accumulated      other comprehensive loss |   | $ | 12,812 |   |

| The      Effect of Derivative Instruments on the Statement of Operations for      theYear      Ended December 31, 2009(in      thousands) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                      |   | Liability      Derivatives |   |
|                                                                                                                                      |   | Notional      Amount |   | Statement      of Operations Location |   | Unrealized      Loss      (1) |   |
| Derivatives      not designated as hedging instrumentsunder SFAS 133                                                                      |   |   |   |   |   |   |   |
| Interest      rate cap agreement                                                                                                          |   | $ | 14,841 |   | Interest      expense |   | $ | 89 |   |

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|                                       |   | Years      Ended December 31, |    |
|--------------------------------------------|--------|-------------------------------|---------|
|                                       |   | 2009                          |    |   | 2008 |   |   | 2007 |   |
| (Benefit)      provision for income taxes: |   |                          |    |   |   |   |   |   |   |
| Current:                                   |   |                          |    |   |   |   |   |   |   |
| Federal                                    |   | $                             | (325    | ) |   | $ | (331 | ) |   | $ | 354 |   |
| State                                      |   |                          | − |   |   |   | (25 | ) |   |   | 119 |   |
| Deferred                                   |   |                          | 323     |   |   |   | 115 |   |   |   | (135 | ) |
| Income      tax (benefit) provision        |   | $                             | (2      | ) |   | $ | (241 | ) |   | $ | 338 |   |

|                                             |   | December      31, |    |   |
|--------------------------------------------------|--------|-------------------|---------|--------|
|                                             |   | 2009              |    |   | 2008 |   |   |
| Deferred      tax assets related to:             |   |              |    |   |   |   |   |
| Foreign, state and local loss      carryforwards |   | $                 | 703     |   |   | $ | 303 |   |   |
| Provision for loan and lease      losses         |   |              | 521     |   |   |   | 206 |   |   |
| Total deferred tax assets                        |   |              | 1,224   |   |   |   | 509 |   |   |
| Valuation allowance                              |   |              | (1,224  | )      |   |   | − |   |   |
| Total deferred tax assets                        |   | $                 | − |   |   | $ | 509 |   |   |
|                                             |   |              |    |   |   |   |   |   |   |
| Deferred      tax liabilities related to:        |   |              |    |   |   |   |   |   |   |
| Property and equipment basis      differences    |   | $                 | − |   |   | $ | (186 | ) |   |
| Total deferred tax      liabilities              |   | $                 | − |   |   | $ | (186 | ) |   |

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|                                             |   | March      31                              |    |   | June      30 |   |   | September      30 |   |   | December      31 |   |
|--------------------------------------------------|--------|--------------------------------------------|---------|--------|--------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                                             |   | (unaudited)                                |    |   | (unaudited)  |   |   | (unaudited)       |   |   | (unaudited)      |   |
|                                             |   | (in      thousands, except per share data) |    |
| Year ended December 31,2009                      |   |                                       |    |   |         |   |   |              |   |   |             |   |
| Interest      income                             |   | $                                          | 26,622  |   |         | $      | 25,274 |              |   | $      | 22,501           |   |   | $ | 23,196 |   |
| Interest      expense                            |   |                                       | 13,877  |   |         |   | 12,748 |              |   |   | 9,203            |   |   |   | 9,599 |   |
| Net      interest income                         |   | $                                          | 12,745  |   |         | $      | 12,526 |              |   | $      | 13,298           |   |   | $ | 13,597 |   |
| Net      income (loss)                           |   | $                                          | (12,152 | )      |         | $      | (5,127 | )                 |   | $      | 11,528           |   |   | $ | 12,090 |   |
|                                             |   |                                       |    |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Net      income (loss) per share − basic   |   | $                                          | (0.50   | )      |         | $      | (0.21  | )                 |   | $      | 0.48             |   |   | $ | 0.43 |   |
| Net      income (loss) per share − diluted |   | $                                          | (0.50   | )      |         | $      | (0.21  | )                 |   | $      | 0.47             |   |   | $ | 0.43 |   |
|                                             |   |                                       |    |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Year ended December 31,2008                      |   |                                       |    |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Interest      income                             |   | $                                          | 36,983  |   |         | $      | 32,258 |              |   | $      | 32,312           |   |   | $ | 32,788 |   |
| Interest      expense                            |   |                                       | 23,148  |   |         |   | 18,924 |              |   |   | 18,664           |   |   |   | 18,883 |   |
| Net      interest income                         |   | $                                          | 13,835  |   |         | $      | 13,334 |              |   | $      | 13,648           |   |   | $ | 13,905 |   |
| Net      income (loss)                           |   | $                                          | 9,363   |   |         | $      | (5,257 | )                 |   | $      | 88               |   |   | $ | (7,268 | ) |
|                                             |   |                                       |    |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Net      income (loss) per share − basic   |   | $                                          | 0.38    |   |         | $      | (0.21  | )                 |   | $      | 0.00             |   |   | $ | (0.29 | ) |
| Net      income (loss) per share − diluted |   | $                                          | 0.38    |   |         | $      | (0.21  | )                 |   | $      | 0.00             |   |   | $ | (0.29 | ) |

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| ITEM 9. | CHANGES      AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND      FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS      AND PROCEDURES |
|----------|------------------------------|

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| ITEM 9B. | OTHER      INFORMATION |
|----------|------------------------|

| ITEM 10. | DIRECTORS,      EXECUTIVE OFFICERS AND CORPORATEGOVERNANCE |
|----------|------------------------------------------------------------|

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| ITEM 11. | EXECUTIVE      COMPENSATION |
|----------|-----------------------------|

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|   | · | Loan      Origination.  For each measurement period, the loan      origination volume generated by Mr. Bloom and his colleagues in Resource      America’s Los Angeles office, which we refer to as Mr. Bloom’s team, must      be equal to or greater than 90% of the loan origination volume generated      by Mr. Bloom’s team for the previous 12-month period.  Resource      America may waive the loan origination performance criteria, if in its      reasonable discretion, reaching such levels could not be reasonably      achieved notwithstanding Mr. Bloom’s team’s best efforts.  Our      compensation committee along with Resource America’s compensation      committee determine whether to exercise this  discretion. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Portfolio      Diversity.  The loans generated by Mr. Bloom’s team      during the measurement period must conform to the diversity and loan type      standards set forth in the investment parameters of the commercial real      estate CDOs managed on our behalf. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Pricing.  The      gross weighted average spread on loans generated by Mr. Bloom’s team      during the measurement period must be not less than 250 basis points over      the applicable index.  Resource America may exclude certain      loans from this calculation and/or may waive the pricing provision for the      measurement period in its entirety. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Credit      Quality.  There shall have been no principal losses      during the measurement period on any loan originated by Mr. Bloom’s team      and no greater than 10% of the loans originated by Mr. Bloom’s team      (measured by principal balance) shall have been in default during such      measurement period. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mr.      Bryant was awarded 23,364 shares of restricted stock for fiscal 2009, as      compared to 13,484 shares of restricted stock for fiscal      2008.  Mr. Bryant was also awarded 5,000 Resource America      options for fiscal 2008. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mr.      Bloom was awarded 44,502 shares of restricted stock for fiscal 2009, as      compared to 18,878 shares of restricted stock for fiscal      2008.  See “− Elements of Our Compensation Program−Supplemental      Incentive Arrangements with DavidBloom.” |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Name      and Principal Position                                        |   | Year   |   | Salary ($) |    |   | Bonus ($) |   |    | Stock Awards ($)(2) |   |   | OptionAwards ($)(2) |   |   | All Other      Compen-sation ($)(3) |    |   | Total      ($) |   |
|-------------------------------------------------------------------------|--------|--------|--------|-----------------|---------|--------|----------------|--------|---------|---------------------|--------|--------|---------------------|--------|--------|-------------------------------------|---------|--------|----------------|--------|
| Jonathan      Z. Cohen                                                  |   | 2009   |   |            | − |   |           |   | − |                |   |   | −             |   |   |                                | − |   |           |   | − |   |   |   | − |   |
| Chief      Executive Officer,                                           |   | 2008   |   |            | − |   |           |   | − |                |   |   | −             |   |   |                                | − |   |           |   | − |   |   |   | − |   |
| President and    Director                                               |   | 2007   |   |            | − |   |           |   | − |                |   |   | 1,499,989           |   |   |                                | − |   |           |   | − |   |   |   | 1,499,989 |   |
|                                                                    |   |   |   |            |    |   |           |   |    |                |   |   |                |   |   |                                |    |   |           |   |   |   |   |   |   |   |
| David      J. Bryant                                                    |   | 2009   |   |            | 240,000 | (1)    |           |   | 120,000 | (1)                 |   |   | 49,999              |   |   |                                | − |   |           |   | − |   |   |   | 409,999 |   |
| Senior      Vice President,                                             |   | 2008   |   |            | 240,000 | (1)    |           |   | 185,000 | (1)                 |   |   | 124,997             |   |   |                                | − |   |           |   | 15,425 |   |   |   | 565,422 |   |
| Chief Financial      Officer,Chief Accounting      Officerand Treasurer |   | 2007   |   |            | 240,000 | (1)    |           |   | 120,000 | (1)                 |   |   | 71,989              |   |   |                                | − |   |           |   | 47,978 |   |   |   | 479,967 |   |
|                                                                    |   |   |   |            |    |   |           |   |    |                |   |   |                |   |   |                                |    |   |           |   |   |   |   |   |   |   |
| David      E. Bloom                                                     |   | 2009   |   |            | − |   |           |   | − |                |   |   | 151,777             |   |   |                                | − |   |           |   | − |   |   |   | 151,777 |   |
| Senior      Vice President−                                       |   | 2008   |   |            | − |   |           |   | − |                |   |   | 174,999             |   |   |                                | − |   |           |   | − |   |   |   | 174,999 |   |
| Real Estate      Investments                                            |   | 2007   |   |            | − |   |           |   | − |                |   |   | 1,385,597           |   |   |                                | − |   |           |   | − |   |   |   | 1,385,597 |   |

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| (1) | Mr.      Bryant’s salary and bonus were paid by Resource America.  We      began to reimburse Resource America for Mr. Bryant’s salary and bonus in      October 2009.  Amounts represent salary and bonus earned for the      years indicated, but may not have been paid in full in the respective      years. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Grant      date fair value, valued in accordance with FASB Accounting Standards      Codification Topic 718 as the closing price of our common stock on the      grant date.  In valuing options awarded to Messrs. J. Cohen,      Bryant, and Bloom at $0.04 per option, we used the Black-Scholes option      pricing model to estimate the weighted average fair value of each option      granted with weighted average assumptions for (a) expected dividend yield      of 27.3%, (b) risk-free interest rate of 3.3%, (c) expected volatility of      51.0%, and (d) an expected life of 7.0years. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | 2008      amount represents award of options to purchase Resource America restricted      common stock.  The grant date fair value is $3.09 per option,      using the Black-Scholes option pricing model to estimate the fair value of      each option granted with assumptions for (a) expected dividend yield of      3.4%, (b) risk-free interest rate of 3.8%, (c) expected volatility of      49.5%, and (d) an expected life of 6.3 years.  2007 represents      award of Resource America restricted stock earned during 2007, valued at      the closing price of Resource America common stock on the date of the      grant in January 2007. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                      |   | Grant      date |   | All      other stock      awards: number      of shares      of stock      (#) |   | All      other option awards:  number of      securities underlying options      (#) |   | Exercise      or base price of option awards ($/Sh) |   | Grant      date fair value of stock and option awards ($) (1) |   |
|---------------------------|--------|-----------------|--------|--------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|---------------------------------------------------------------|--------|
| David      J. Bryant      |   |            |   |                                                                           |   |                                                                                           |   |                                                |   |                                                          |   |
| Our restricted    stock   |   | 02/20/09        |   |                                                                           | 23,364 |                                                                                           |   |                                                |   |                                                          |   | 49,999 |   |
|                      |   |            |   |                                                                           |   |                                                                                           |   |                                                |   |                                                          |   |   |   |
| David      E. Bloom       |   |            |   |                                                                           |   |                                                                                           |   |                                                |   |                                                          |   |   |   |
| Our restricted stock |   | 02/03/09        |   |                                                                           | 20,000 |                                                                                           |   |                                                |   |                                                          |   | 67,000 |   |
| Our restricted stock |   | 07/30/09        |   |                                                                           | 24,502 |                                                                                           |   |                                                |   |                                                          |   | 84,777 |   |
|                      |   |            |   |                                                                           |   |                                                                                           |   |                                                |   |                                                          |   |   |   |

| (1) | Based      on the closing price of our stock on the respective grant      dates. |
|-----|----------------------------------------------------------------------------------|

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|                   |   | Option      Awards                                                       |    | Stock      Awards |                                                                             |
|------------------------|--------|--------------------------------------------------------------------------|---------|-------------------|----------------------------------------------------------------------------------|
| Name                   |   | Number      of Securities Underlying Unexercised Options (#) Exercisable |    |              | Number      of Securities Underlying Unexercised Options (#)  Unexercisable |   |   | Equity      Incentive Plan Awards: Number of Securities Underlying Unexercised      Unearned Options (#) |   |   | Option      Exercise Price($) |   | Option      Expiration      Date |   | Number of      Shares or Units of Stock That Have Not Vested (#) |   |   | Market      Value of Shares or Units of Stock That Have Not Vested ($) (1) |   |   | Equity       Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights      That Have Not Vested    (#) |   |   | Equity      Incentive Plan Awards: Market or Payout Value of Unearned Shares,      Units or Other Rights That Have Not Vested($)      (1) |   |
|                   |   |                                                                     |    |              |                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jonathan      Z. Cohen |   |                                                                     | 100,000 |              |                                                                             |   | − |   |   |   | − |   |   |   | 15.00 |   | 03/07/15 |   |   | 7,265 |   |   |   | 35,744 |   |   |   | − |   |   |   | − |   |
|                   |   |                                                                     |    |              |                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| David      J. Bryant   |   |                                                                     | 10,000  |              |                                                                             |   | − |   |   |   | − |   |   |   | 15.00 |   | 03/07/15 |   |   | 32,707 |   |   |   | 160,918 |   |   |   | − |   |   |   | − |   |
|                   |   |                                                                     | − |              |                                                                             |   | 5,000 | (3) |   |   |   |   |   |   | 8.14 |   | 05/21/18 |   |   | 580 | (4) |   |   | 2,343 | (4) |   |   | − |   |   |   | − |   |
|                   |   |                                                                     |    |              |                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| David      E. Bloom    |   |                                                                     | 100,000 |              |                                                                             |   | − |   |   |   | − |   |   |   | 15.00 |   | 03/07/15 |   |   | 85,060 |   |   |   | 418,495 |   |   |   | 20,000 | (2) |   |   | 98,400 |   |

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| (1) | Based      on the closing price of our common stock $4.92 on December 31,      2009. |
|-----|--------------------------------------------------------------------------------------|

| (2) | Represents      performance-based restricted stock awards under our 2007 Omnibus Equity      Compensation Plan that vest based on the achievement of pre-determined      objective performance goals over a multi-year performance      period.  See “Compensation Discussion and    Analysis.” |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Represents      options to purchase shares of Resource America common stock that vest ¼ on      each anniversary date through May 21,2012. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Represents      shares of Resource America common stock.  Based upon a price of      $4.04, the price of Resource America’s common stock on December 31,      2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | Stock      Awards                                 |   |
|----------------------------------|--------|---------------------------------------------------|--------|
| Name                             |   | Number      of Shares Acquired onVesting      (#) |   |   | Value      Realized on Vesting ($) (1) |   |
| Jonathan      Z. Cohen           |   |                                              | 40,163 |   |   |   | 150,581 |   |
|                             |   |                                              |   |   |   |   |   |   |
| David      J. Bryant (our stock) |   |                                              | 5,886  |   |   |   | 18,730 |   |
| (Resource America      stock)    |   |                                              | 460    |   |   |   | 1,987 |   |
|                             |   |                                              |   |   |   |   |   |   |
| David      E. Bloom              |   |                                              | 56,945 |   |   |   | 214,831 |   |

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| Name      (1)          |   | Fees      Earned or Paid in Cash ($) |    |   | StockAwards      ($) (2) |   |    | Total      ($) |   |
|------------------------|--------|--------------------------------------|---------|--------|--------------------------|--------|---------|----------------|--------|
| Walter      T. Beach   |   |                                 | 52,500  |   |                     |   | 22,499  |           |   |   | 74,999 |   |
| William      B. Hart   |   |                                 | 52,500  |   |                     |   | 22,499  |           |   |   | 74,999 |   |
| Murray      S. Levin   |   |                                 | 52,500  |   |                     |   | 22,499  |           |   |   | 74,999 |   |
| P      Sherrill Neff   |   |                                 | 52,500  |   |                     |   | 22,499  |           |   |   | 74,999 |   |
| Gary      Ickowicz     |   |                                 | 52,500  |   |                     |   | 22,499  |           |   |   | 74,999 |   |
| Edward      E. Cohen   |   |                                 | − |   |                     |   | − |           |   |   | − |   |
| Steven      J. Kessler |   |                                 | − |   |                     |   | − |           |   |   | − |   |

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| (1) | Table      excludes Mr. J. Cohen, an NEO, whose compensation is set forth in the      Summary Compensation Table. |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (2) | On      March 9, 2009, Messrs. Beach, Hart, Levin and Neff, were each granted      11,479 shares based upon a price of $1.96, the closing price on that      day.  On February 1, 2009, Mr. Ickowicz, was granted 6,716      shares based upon a price of $3.35, the closing price on that      day. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 12. | SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND |
|----------|----------------------------------------------------------|
|     | MANAGEMENT ANDRELATED STOCKHOLDERS      MATTERS          |

|                                                                      |   | Shares owned |      |   | Percentage(1) |   |
|---------------------------------------------------------------------------|--------|-------------------|-----------|--------|---------------|--------|
| Executive      officers and directors: (2)                                |   |              |      |   |          |   |
| Walter      T. Beach (4)      (5)                                         |   |              | 1,058,911 |   |          |   | 2.72 | % |
| Edward      E. Cohen (3)                                                  |   |              | 474,120   |   |          |   | 1.22 | % |
| Jonathan      Z. Cohen (3)                                                |   |              | 694,659   |   |          |   | 1.78 | % |
| William      B. Hart (5)                                                  |   |              | 31,396    |   |          |   | * |   |
| Gary      Ickowicz (5)                                                    |   |              | 13,876    |   |          |   | * |   |
| Steven      J. Kessler (3)                                                |   |              | 73,069    |   |          |   | * |   |
| Murray      S. Levin (5)                                                  |   |              | 25,396    |   |          |   | * |   |
| P.      Sherrill Neff (5)                                                 |   |              | 31,396    |   |          |   | * |   |
|                                                                      |   |              |      |   |          |   |   |   |
| Jeffrey      D. Blomstrom (3)                                             |   |              | 36,276    |   |          |   | * |   |
| David      E. Bloom (3)                                                   |   |              | 247,364   |   |          |   | * |   |
| Jeffrey      F. Brotman (3)                                               |   |              | 19,267    |   |          |   | * |   |
| David      J. Bryant (3)                                                  |   |              | 76,798    |   |          |   | * |   |
| All      executive officers and directors as a group    (12 persons) |   |              | 2,782,528 |   |          |   | 7.10 | % |
|                                                                      |   |              |      |   |          |   |   |   |
| Owners      of 5% or more of outstanding shares:                          |   |              |      |   |          |   |   |   |
| Resource      America, Inc. (6)                                           |   |              | 2,192,009 |   |          |   | 5.63 | % |

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| (1) | Includes      255,000 shares of common stock issuable upon exercise of stock      options. |
|-----|--------------------------------------------------------------------------------------------|

| (2) | The      address for all of our executive officers and directors is c/o Resource      Capital Corp., 712 Fifth Avenue, 10th Floor, New York, New York      10019. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes      restricted stock awards granted to certain officers and directors as      follows:  (i) on December 26, 2007: 60,000 shares to Mr. Bloom;      15% of these shares vested on each of June 30, 2008 and June 30, 2009 and      70% will vest on December 31, 2010; (ii) on January 14, 2008: Mr.      Blomstrom – 10,787 shares; Mr. Bloom – 18,878 shares; Mr. Bryant – 13,484      shares; Mr. E. Cohen – 10,787 shares; and Mr. Kessler – 5,393 shares; all      these shares vest 33.33% per year; (iii) on July 30, 2009; Mr. Bloom –      24,502 shares; these shares vest in full on July 30, 2010; and (iv) on      January 22, 2010; Mr. Blomstrom – 14,450 shares, Mr. Bloom – 19,267      shares; Mr. Brotman – 19,267 shares; Mr. Bryant – 19,267 shares; Mr. J.      Cohen – 57,803 shares; and Mr. Kessler – 19,267 shares; all these shares      vest 33.33% per year.  Each such person has the right to receive      distributions on and vote, but not to transfer, such    shares. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes      (i) 1,037,515 shares purchased by Beach Asset Management, LLC, Beach      Investment Counsel, Inc. and/or Beach Investment Management, LLC,      investment management firms for which Mr. Beach is a principal and      possesses investment and/or voting power over the shares.  The      address for these investment management firms is Five Tower Bridge, 300      Barr Harbor Drive, Suite 220, West Conshohocken, Pennsylvania      19428. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Includes      (i) 3,214 shares of restricted stock issued to each of Messrs. Beach,      Hart, Levin and Neff on March 8, 2010 which vest on March 8, 2011, and      (ii) 4,083 shares of restricted stock issued to Mr. Ickowicz on February      1, 2010 which vest on February 1, 2011.  Each non-employee      director has the right to receive distributions on and vote, but not to      transfer, such shares. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (6) | Includes      (i) 921 shares of restricted stock granted to the Manager in connection      with our March 2005 private placement that the Manager has not allocated      to its employees, (ii) 100,000 shares purchased by the Manager in our      initial public offering, (iii) 900,000 shares purchased by Resource      Capital Investor in our March 2005 private placement, (iv) 900,000      shares purchased by Resource Capital Investor in our initial public      offering, and (v) 291,088 shares transferred to the Manager as incentive      compensation pursuant to the terms of its management agreement with      us.  The address for Resource America, Inc. is 1845 Walnut      Street, Suite 1000, Philadelphia, Pennsylvania  19103. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                        |   | (a)                                                                                                       |   | (b)                                                                                  |   | (c)                                                                                                                                                      |
|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Plan      category                                          |   | Number      of securities to be issued upon exercise of outstanding      options,warrants      and rights |   | Weighted-average      exercise price of outstanding options,warrants      and rights |   | Number      of securities remaining available for future issuance under equity      compensation plans excluding securities reflected in column      (a) |
| Equity      compensation plansapproved by security holders: |   |                                                                                                      |   |                                                                                 |   |                                                                                                                                                     |
| Options                                                     |   |        607,666                                                                                       |   | $    14.99                                                       |   |                                                                                                                                                     |
| Restricted      shares                                      |   |        437,319                                                                                       |   | N/A                                                                                  |   |                                                                                                                                                     |
| Total                                                       |   | 1,044,985                                                                                                 |   |                                                                                 |   | 1,473,345      (1)      (2)                                                                                                                              |

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| (1) | Upon      the July 2006 hiring of certain significant employees of the Manager, we      agreed to pay up to 100,000 shares of restricted stock and 100,000 options      to purchase restricted stock upon the achievement of certain performance      thresholds, the first of which was met in June 2007 and, as a result,      60,000 shares of restricted stock and 60,000 options to purchase      restricted stock were issued at that time.  As of December 31,      2009, 40,000 shares of restricted stock and 40,000 options to purchase      restricted stock are unissued.  These shares and options to      purchase restricted stock, which have been reserved for future issuance      under the plans, have been deducted from the number of securities      remaining available for future issuance.  See Item 8, “Financial      Statements and Supplementary Data” at Note 12 for a more detailed      discussion. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | We      agreed to award certain personnel up to 195,389 shares of restricted stock      upon the achievement of certain performance thresholds.  During      the year ended December 31, 2009, 62,706 of those shares were      forfeited.  The remaining 132,683 shares, which have been      reserved for future issuance under the plans, have been deducted from the      number of securities remaining available for future    issuance. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 13. | CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS |
|----------|-----------------------------------------------------|
|     | AND      DIRECTOR INDEPENDENCE                      |

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|   | · | which      investment program has been seeking investments for the longest period of      time; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | whether      the investment program has the cash required for the      investment; |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | whether      the amount of debt to be incurred with respect to the investment is      acceptable for the investmentprogram; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | the      effect the investment will have on the investment program’s cash      flow; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | whether      the investment would further diversify, or unduly concentrate, the      investment program’s investments in a particular lessee, class or type of      equipment, location or industry;and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | whether      the term of the investment is within the term of the investment      program. |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | We      will not be permitted to invest in any investment fund or CDO structured,      co-structured or managed by the Manager or Resource America other than      those structured, co-structured or managed on our behalf.  The      Manager and Resource America will not receive duplicate management fees      from any such investment fund or CDO to the extent we invest in      it. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      will not be permitted to purchase investments from, or sell investments      to, the Manager or Resource America, except that we may purchase      investments originated by those entities within 60 days before our      investment. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 14. | PRINCIPAL      ACCOUNTING FEES AND SERVICES |
|----------|---------------------------------------------|

| ITEM 15. | EXHIBITS      AND FINANCIAL STATEMENT SCHEDULES |
|----------|-------------------------------------------------|

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Exhibits

|   |      Exhibit      No. |   | Description                                                                                                                                                                                                                                                                       |
|--------|-------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 3.1                                       |   | Restated      Certificate of Incorporation of Resource Capital Corp. (1)                                                                                                                                                                                                          |
|   | 3.2                                       |   | Amended      and Restated Bylaws of Resource Capital Corp. (1)                                                                                                                                                                                                                    |
|   | 4.1                                       |   | Form      of Certificate for Common Stock for Resource Capital Corp. (1)                                                                                                                                                                                                          |
|   | 4.2(a)                                    |   | Junior      Subordinated Indenture between Resource Capital Corp. and Wells Fargo      Bank, N.A., dated May 25, 2006. (2)                                                                                                                                                        |
|   | 4.2(b)                                    |   | Amendment      to Junior Subordinated Indenture and Junior Subordinated Note due 2036      between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October      26, 2009 and effective September 30, 2009.      (11)                                                     |
|   | 4.3(a)                                    |   | Amended      and Restated Trust Agreement among Resource Capital Corp., Wells Fargo      Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative      Trustees named therein, dated May 25, 2006. (2)                                                               |
|   | 4.3(b)                                    |   | Amendment      to Amended and Restated Trust Agreement and Preferred Securities      Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the      Administrative Trustees named therein, dated October 26, 2009 and      effective September 30, 2009.      (11) |
|   | 4.4                                       |   | Amended      Junior Subordinated Note due 2036 in the principal amount of $25,774,000,      dated October 26, 2009.      (11)                                                                                                                                                     |
|   | 4.5(a)                                    |   | Junior      Subordinated Indenture between Resource Capital Corp. and Wells Fargo      Bank, N.A., dated September 29, 2006. (3)                                                                                                                                                  |
|   | 4.5(b)                                    |   | Amendment      to Junior Subordinated Indenture and Junior Subordinated Note due 2036      between Resource Capital Corp. and Wells Fargo Bank, N.A., dated October      26, 2009 and effective September 30, 2009.      (11)                                                     |
|   | 4.6(a)                                    |   | Amended      and Restated Trust Agreement among Resource Capital Corp., Wells Fargo      Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative      Trustees named therein, dated September 29, 2006. (3)                                                         |
|   | 4.6(b)                                    |   | Amendment      to Amended and Restated Trust Agreement and Preferred Securities      Certificate among Resource Capital Corp., Wells Fargo Bank, N.A. and the      Administrative Trustees named therein, dated October 26, 2009 and      effective September 30, 2009.      (11) |
|   | 4.7                                       |   | Amended      Junior Subordinated Note due 2036 in the principal amount of $25,774,000,      dated October 26, 2009.      (11)                                                                                                                                                     |
|   | 10.1(a)                                   |   | Master      Repurchase Agreement between RCC Real Estate SPE 3, LLC and Natixis Real      Estate Capital.      (4)                                                                                                                                                                |
|   | 10.1(b)                                   |   | First      Amendment to Master Repurchase Agreement between RCC Real Estate SPE 3,      LLC and Natixis Real Estate Capital, dated September 25, 2008. (5)                                                                                                                        |
|   | 10.1(c)                                   |   | Second      Amendment to Master Repurchase Agreement between RCC Real Estate SPE 3,      LLC and Natixis Real Estate Capital, dated November 25, 2008. (6)                                                                                                                        |
|   | 10.1(d)                                   |   | Letter      Agreement with respect to master Repurchase Agreement between Natixis Real      Estate Capital, Inc. and RCC Real Estate SPE 3, LLC, dated as of March 13,      2009. (7)                                                                                             |

|   | 10.1(e) |   | Letter      Agreement with respect to Master Repurchase Agreement between Natixis Real      Estate Capital and RCC Real Estate SPE 3, LLC, dated June 29, 2009. (8)                                   |
|--------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 10.2(a) |   | Guaranty      made by Resource Capital Corp. as guarantor, in favor Natixis Real Estate      Capital, Inc., dated April 20, 2007. (4)                                                                 |
|   | 10.2(b) |   | Second      Amendment to Guaranty made by Resource Capital Corp. as guarantor, in      favor of Natixis Real Estate Capital, Inc., dated September 25, 2008.      (5)                                 |
|   | 10.3(a) |   | Amended      and Restated Management Agreement between Resource Capital Corp., Resource      Capital Manager, Inc. and Resource America, Inc. dated as of June 30,      2008. (9)                     |
|   | 10.3(b) |   | First      Amendment to Amended and Restated Management Agreement between Resource      Capital Corp., Resource Capital Manager, Inc. and Resource America, Inc.      dated as of June 30, 2008. (10) |
|   | 10.4    |   | 2005      Stock Incentive Plan. (1)                                                                                                                                                                   |
|   | 10.5    |   | 2007      Omnibus Equity Compensation Plan.      (12)                                                                                                                                                 |
|   | 14.1    |   | Code      of Ethics                                                                                                                                                                                   |
|   | 21.1    |   | List      of Subsidiaries of Resource Capital Corp.                                                                                                                                                   |
|   | 23.1    |   | Consent      of Grant Thornton LLP                                                                                                                                                                    |
|   | 31.1    |   | Rule      13a-14(a)/Rule 15d-14(a) Certification of Chief Executive      Officer.                                                                                                                     |
|   | 31.2    |   | Rule      13a-14(a)/Rule 15d-14(a) Certification of Chief Financial      Officer.                                                                                                                     |
|   | 32.1    |   | Certification      Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                |
|   | 32.2    |   | Certification      Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                |

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| (1) | Filed      previously as an exhibit to the Company’s registration statement on Form      S-11, Registration No. 333-126517. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (2) | Filed      previously as an exhibit to the Company’s Quarterly Report on Form 10-Q      for the quarter ended June 30,2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (3) | Filed      previously as an exhibit to the Company’s Quarterly Report on Form 10-Q      for the quarter ended September 30,2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on April 23, 2007. |
|-----|---------------------------------------------------------------------------------------------------------------------|

| (5) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on September 29, 2008. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| (6) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on December 2, 2008. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

| (7) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on March 17, 2009. |
|-----|---------------------------------------------------------------------------------------------------------------------|

| (8) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on July 6, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (9) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on July 3, 2008. |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (10) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on October 20, 2009. |
|------|-----------------------------------------------------------------------------------------------------------------------|

| (11) | Filed      previously as an exhibit to the Company’s Quarterly Report on Form 10-Q      for the quarter ended September 30,2009. |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Filed      previously as an exhibit to the Company’s Annual Report on Form 10-K for      the year ended December 31, 2008. |
|------|----------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURES

|                | RESOURCE      CAPITAL CORP. (Registrant) |                                                                |
|---------------------|------------------------------------------|---------------------------------------------------------------------|
|                |                                     |                                                                |   |
| March      15, 2010 | By:                                      | /s/ Jonathan      Z. Cohen                                     |   |
|                |                                     |           Jonathan Z. Cohen                     |   |
|                |                                     |           Chief Executive Officer and President |   |
|                |                                     |                                                                |   |

| /s/      Steven J. Kessler | Chairman      of the Board                           | March      15, 2010 |
|----------------------------|------------------------------------------------------|---------------------|
| STEVEN      J. KESSLER     |                                                 |                |
|                       |                                                 |                |
| /s/      Jonathan Z. Cohen | Director,      President and Chief Executive Officer | March      15, 2010 |
| JONATHAN      Z. COHEN     |                                                 |                |
|                       |                                                 |                |
| /s/      Walter T. Beach   | Director                                             | March      15, 2010 |
| WALTER      T. BEACH       |                                                 |                |
|                       |                                                 |                |
| /s/      Edward E. Cohen   | Director                                             | March      15, 2010 |
| EDWARD      E. COHEN       |                                                 |                |
|                       |                                                 |                |
| /s/      William B. Hart   | Director                                             | March      15, 2010 |
| WILLIAM      B. HART       |                                                 |                |
|                       |                                                 |                |
| /s/      Gary Ickowicz     | Director                                             | March      15, 2010 |
| GARY      ICKOWICZ         |                                                 |                |
|                       |                                                 |                |
| /s/      Murray S. Levin   | Director                                             | March      15, 2010 |
| MURRAY      S. LEVIN       |                                                 |                |
|                       |                                                 |                |
| /s/      P. Sherrill Neff  | Director                                             | March      15, 2010 |
| P.      SHERRILL NEFF      |                                                 |                |
|                       |                                                 |                |
| /s/      David J. Bryant   | Senior      Vice President                           | March      15, 2010 |
| DAVID      J. BRYANT       | Chief      Financial Officer,                        |                |
|                       | Chief      Accounting Officer and Treasurer          |                |
|                       |                                                 |                |

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|                                       |   | Balance      at beginning      of period |   |   | Charge      to expense |   |   | Write-offs |   |   | Recoveries |   |   | Balance      at end      of period |    |
|--------------------------------------------|--------|------------------------------------------|--------|--------|------------------------|--------|--------|------------|--------|--------|------------|--------|--------|------------------------------------|---------|
| Allowance      for loans and lease losses: |   |                                     |   |   |                   |   |   |       |   |   |       |   |   |                               |    |
| Year Ended December 31,      2009          |   | $                                        | 44,317 |   |                   | $      | 61,383 |       |   | $      | (57,450    | )      |   | $                                  | 12      |   |   | $ | 48,262 |   |
|                                       |   |                                     |   |   |                   |   |   |       |   |   |       |   |   |                               |    |   |   |   |   |   |
| Year Ended December 31,      2008          |   | $                                        | 5,918  |   |                   | $      | 46,160 |       |   | $      | (7,761     | )      |   | $                                  | − |   |   | $ | 44,317 |   |

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|                                                |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | Net            |   |
|-----------------------------------------------------|--------|-------------------------------------|--------|---------------------|--------|------------|--------|----------------|--------|--------|----------------|--------|---------|----------------|--------|--------|----------------|--------|
|                                                |   |                                |   | Interest            |   | Final      |   | Periodic       |   |   |           |   |    | Face           |   |   | Carrying       |   |
|                                                |   | Description/                        |   | Payment             |   | Maturity   |   | Payment        |   |   | Prior          |   |    | Amount      of |   |   | Amount      of |   |
| Type      of Loan/ Borrower                         |   | Location                            |   | Rates               |   | Date       |   | Terms      (1) |   |   | Liens      (2) |   |    | Loans      (3) |   |   | Loans          |   |
|                                                |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |
| Whole      Loans:                                   |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |
| Borrower A                                          |   | Multi-Family/San      Francisco, CA |   | LIBOR      + 4.25%  |   | 04/8/2010  |   |           | I/O    |   |           |   | − |           |   |   | 33,719         |   |   |   | 24,172 |   |
| Borrower B                                          |   | Multi-Family/Renton,      WA        |   | LIBOR      + 3.50%  |   | 01/10/2012 |   |           | I/O    |   |           |   | − |           |   |   | 31,100         |   |   |   | 30,846 |   |
| Borrower C                                          |   | Hotel/Tucson,      AZ               |   | LIBOR      + 3.50%  |   | 12/01/2016 |   |           | I/O    |   |           |   | − |           |   |   | 31,500         |   |   |   | 31,243 |   |
| Borrower D-1                                        |   | Hotel/Los      Angeles, CA          |   | LIBOR      + 8.235% |   | 06/05/2010 |   |           | I/O    | (4)    |           |   | − |           |   |   | 28,000         |   |   |   | 27,736 |   |
| Borrower D-2                                        |   | Hotel/Los      Angeles, CA          |   | LIBOR      + 10.0%  |   | 06/05/2010 |   |           | I/O    | (4)    |           |   | − |           |   |   | 5,350          |   |   |   | 5,306 |   |
| Borrower E                                          |   | Multi-Family/Northglenn,      CO    |   | LIBOR      + 2.60%  |   | 03/05/2010 |   |           | I/O    |   |           |   | − |           |   |   | 28,000         |   |   |   | 27,746 |   |
| Borrower F                                          |   | Retail/Hayward,      CA             |   | LIBOR      + 2.50%  |   | 01/05/2012 |   |           | I/O    |   |           |   | − |           |   |   | 24,145         |   |   |   | 23,948 |   |
| Borrower G                                          |   | Multi-Family/San      Francisco, CA |   | LIBOR      + 4.25%  |   | 04/08/2010 |   |           | I/O    |   |           |   | − |           |   |   | 33,078         |   |   |   | 23,861 |   |
| Borrower H                                          |   | Hotel/Studio      City, CA          |   | LIBOR      + 3.20%  |   | 02/05/2010 |   |           | I/O    |   |           |   | − |           |   |   | 25,750         |   |   |   | 25,539 |   |
| Borrower I                                          |   | Land/Studio      City, CA           |   | LIBOR      + 2.95%  |   | 02/05/2010 |   |           | I/O    |   |           |   | − |           |   |   | 26,150         |   |   |   | 25,936 |   |
| All other Whole LoansIndividually less than      3% |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 217,672        |   |   |   | 215,685 |   |
| Total      Whole Loans                              |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 484,464        |   |   |   | 462,018 |   |
|                                                |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |   |   |   |   |
| Mezzanine      Loans:                               |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |   |   |   |   |
| Borrower J                                          |   | Hotel/Various                       |   | LIBOR      + 2.85%  |   | 05/9/2010  |   |           | I/O    |   |           |   | − |           |   |   | 38,072         |   |   |   | 37,775 |   |
| All other Whole LoansIndividually less than      3% |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 144,451        |   |   |   | 143,458 |   |
| Total      Mezzanine Loans                          |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 182,523        |   |   |   | 181,233 |   |
|                                                |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |   |   |   |   |
| B      Notes:                                       |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |   |   |   |   |
| Borrow K                                            |   | Office/New      York, NY            |   | FIXED      + 7.19%  |   | 07/11/2016 |   |           | I/O    |   |           |   | − |           |   |   | 23,718         |   |   |   | 23,679 |   |
| All other Whole LoansIndividually less than      3% |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 57,732         |   |   |   | 57,131 |   |
| Total      B Notes                                  |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 81,450         |   |   |   | 80,810 |   |
|                                                |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   |           |   |   |   |   |   |
| Total      Loans                                    |   |                                |   |                |   |       |   |           |   |   |           |   |    |           |   |   | 748,437        | (5)    |   |   | 724,061 | (6) |

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| (1) | IO      = interest only. |
|-----|--------------------------|

| (2) | Represents      only Third Party Liens |
|-----|----------------------------------------|

| (3) | Does      not include unfunded commitments. |
|-----|---------------------------------------------|

| (4) | Borrower      D is a whole loan and the participations above represent the Senior (D-1)      and Mezzanine (D-2) portions. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (5) | All      loans are current with respect to principal and interest payments      due. |
|-----|--------------------------------------------------------------------------------------|

| (6) | The      net carrying amount of loans includes an allowance for loan loss of $29.3      million at December 31, 2009 allocated as follows:  Whole Loans      ($22.2 million); Mezzanine Loans ($6.4 million) and B Notes ($0.7      million). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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