v3.25.2
Loans Held for Investment
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
Loans Held for Investment Loans Held for Investment
The Company elected the practical expedient under ASC 326 to exclude accrued interest from amortized cost. As of June 30, 2025 and December 31, 2024, accrued interest receivable of $0.3 million and $0.3 million, respectively, is included in interest receivable on the consolidated balance sheets, and is excluded from the amortized cost of loans held for investment.
Portfolio Summary
The table below provides a summary of the Company’s loan portfolio. Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses.
June 30, 2025December 31, 2024
Fixed Rate
Floating
Rate (1)(2)
TotalFixed Rate
Floating
Rate (1)(2)
Total
Number of loans123123
Principal balance$2,958,384 $44,716,617 $47,675,001 $2,843,280 $43,059,173 $45,902,453 
Carrying value$2,623,384 $27,930,975 $30,554,359 $2,573,280 $27,814,616 $30,387,896 
Fair value$2,623,384 $27,927,727 $30,551,111 $2,573,280 $28,068,902 $30,642,182 
Weighted-average coupon rate(3)
—%19.32%19.32%—%19.53%19.53%
Weighted-average remaining
   term (years) (3) (4)
0.000.000.000.000.100.10
_______________
(1)As of June 30, 2025 and December 31, 2024, these loans pay a coupon rate of Secured Overnight Financing Rate (“SOFR”) or forward-looking term rate based on SOFR (“Term SOFR”), as applicable, plus a fixed spread. Coupon rates shown were determined using average SOFR and Term SOFR of 4.32% and 4.32%, respectively, as of June 30, 2025, and 4.53% and 4.33%, respectively, as of December 31, 2024.
(2)As of both June 30, 2025 and December 31, 2024, two loans were subject to a SOFR or Term SOFR floor, as applicable.
(3)Excludes non-performing loans for which recovery of interest income was not probable.
(4)Excludes loans that are in maturity default and represents current effective maturity as of June 30, 2025 and December 31, 2024, exclusive of any extension options available.
Lending Activities
The following tables present the activities of the Company’s loan portfolio:
Loans Held for Investment, NetLoans Held for Investment through Participation Interests, NetTotal
Balance, January 1, 2025
$18,575,895 $11,812,001 $30,387,896 
Origination, funding and purchase of loans1,657,444 115,104 1,772,548 
Principal repayments received— — — 
Net amortization of premiums on loans(8,605)— (8,605)
Accrual, payment and accretion of investment-related fees and other,
   net		22,803 — 22,803 
Reversal of (provision for) credit losses179,450 (1,799,733)(1,620,283)
Balance, June 30, 2025
$20,426,987 $10,127,372 $30,554,359 
Loans Held for Investment, NetLoans Held for Investment through Participation Interests, NetTotal
Balance, January 1, 2024$60,458,534 $17,884,930 $78,343,464 
Origination, funding and purchase of loans843,996 45,851 889,847 
Principal repayments received(39,941,496)— (39,941,496)
Net amortization of premiums on loans(129,883)— (129,883)
Accrual, payment and accretion of investment-related fees and other,
   net		20,488 — 20,488 
Reversal of (provision for) credit losses86,302 (1,132,990)(1,046,688)
Balance, June 30, 2024$21,337,941 $16,797,791 $38,135,732 
Portfolio Information
    The tables below detail the types of loans in the Company’s loan portfolio, as well as the property type and geographic location of the properties securing these loans. Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses.
June 30, 2025December 31, 2024
Loan StructurePrincipal BalanceCarrying Value% of Total Principal BalanceCarrying Value% of Total
Preferred equity investments$47,675,001 $30,554,359 100.0 %$45,902,453 $30,387,896 100.0 %
Total$47,675,001 $30,554,359 100.0 %$45,902,453 $30,387,896 100.0 %
June 30, 2025December 31, 2024
Property TypePrincipal BalanceCarrying Value% of Total Principal BalanceCarrying Value% of Total
Mixed use$20,224,740 $20,426,987 66.8 %$18,567,296 $18,575,895 61.1 %
Office24,491,877 7,503,988 24.6 %24,491,877 9,238,721 30.4 %
Multifamily2,958,384 2,623,384 8.6 %2,843,280 2,573,280 8.5 %
Total$47,675,001 $30,554,359 100.0 %$45,902,453 $30,387,896 100.0 %
June 30, 2025December 31, 2024
Geographic LocationPrincipal BalanceCarrying Value% of Total Principal BalanceCarrying Value% of Total
United States
California$20,224,740 $20,426,987 66.9 %$18,567,296 $18,575,895 61.1 %
New York27,450,261 10,127,372 33.1 %27,335,157 11,812,001 38.9 %
Total$47,675,001 $30,554,359 100.0 %$45,902,453 $30,387,896 100.0 %
Allowance for Credit Losses
As described in Note 2, the Company follows the provisions of ASC 326, which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses.
Certain of the Company’s performing loans contain provisions for future funding commitments, which are subject to the borrower meeting certain performance-related metrics that are monitored by the Company. These unfunded commitments on loans amounted to approximately zero and $0.7 million as of June 30, 2025 and December 31, 2024, respectively. The liability for credit losses on unfunded commitments is included in other liabilities on the consolidated balance sheets.
As discussed in Note 2, for loans that are considered non-performing, the Company removes them from the industry loss rate approach and analyzes them separately for recoverability. As of June 30, 2025 and December 31, 2024, the Company had three and two non-performing loans with total amortized cost of $47.9 million and $27.3 million, respectively. Accordingly, the Company utilized the estimated fair value of the loan collateral or sponsor’s guarantee to estimate the total specific allowance
for credit losses of $17.3 million and $15.5 million as of June 30, 2025 and December 31, 2024, respectively. Please see “Significant Unobservable Inputs” in Note 5 for information on how the fair values of these loans were determined.
The following table presents the activity in allowance for credit losses:
Six Months Ended June 30, 2025
Allowance on Non-Performing LoansAllowance on Performing LoansTotal
FundedUnfunded
Allowance for credit losses, beginning of period$15,523,156 $179,450 $6,599 $15,709,205 
Provision for (reversal of provision for) credit losses1,799,733 (179,450)(6,599)1,613,684 
Charge-offs— — — — 
Recoveries— — — — 
Allowance for credit losses, end of period$17,322,889 $— $— $17,322,889 
Six Months Ended June 30, 2024
Allowance on Non-Performing LoansAllowance on Performing LoansTotal
FundedUnfunded
Allowance for credit losses, beginning of period$9,234,321 $469,010 $8,801 $9,712,132 
Provision for (reversal of provision for) credit losses1,132,988 (86,300)3,939 1,050,627 
Charge-offs— — — — 
Recoveries— — — — 
Allowance for credit losses, end of period$10,367,309 $382,710 $12,740 $10,762,759 
Accrued Interest Receivable
The Company elected not to measure a CECL reserve on accrued interest receivable due to the Company’s policy of writing off uncollectible accrued interest receivable balances in a timely manner. If the Company determines it has uncollectible accrued interest receivable, it generally will reverse the accrued and unpaid interest against interest income and suspend the accrual for future interest income. For the three and six months ended June 30, 2025 and 2024, the Company did not reverse any interest income accrual because all accrued interest income was deemed collectible. As of June 30, 2025 and December 31, 2024, the Company had three and two loans that were in default, and suspended interest income accrual of $1.3 million and $1.2 million, respectively, and $2.5 million and $2.4 million, respectively, for the three and six months ended June 30, 2025 and 2024, respectively, because recovery of such income was not probable. As of June 30, 2025 and December 31, 2024, there was $0.3 million and zero outstanding interest receivable on these loans, respectively.
Loan Risk Rating
The Company assesses the risk factors of each performing loan and assigns each performing loan a risk rating between 1 and 5, which is an average of the numerical ratings in the following categories: (i) sponsor capability and financial condition; (ii) loan and collateral performance relative to underwriting; (iii) quality and stability of collateral cash flows and/or reserve balances; and (iv) loan to value. Based on a 5-point scale, the Company’s performing loans are rated “1” through “5”, from less risk to greater risk as follows:
Risk RatingDescription
1Very low risk
2Low risk
3Moderate/average risk
4Higher risk
5Highest risk
Additionally, as discussed in Note 2, during the loan review process, if the Company determines that it is not able to collect all amounts due for both principal and interest according to the contractual terms of a loan, or if a loan is in maturity default, the Company considers that loan non-performing.
     The following tables present the amortized cost of the Company's loan portfolio by year of origination and loan risk rating:
June 30, 2025
Loan Risk RatingNumber of LoansAmortized Cost% of TotalAmortized Cost by Year Originated
20252024202320222021Prior
1— $— — %$— $— $— $— $— $— 
2— — — %— — — — — — 
3— — — %— — — — — — 
4— — — %— — — — — — 
5— — — %— — — — — — 
Non-performing3 47,877,248 100.0 %— — — 20,426,987 — 27,450,261 
3 47,877,248 100.0 %$— $— $— $20,426,987 $— $27,450,261 
Allowance for credit losses(17,322,889)
Total, net of allowance for
    credit losses		$30,554,359 
December 31, 2024
Loan Risk RatingNumber of LoansAmortized Cost% of TotalAmortized Cost by Year Originated
20242023202220212020Prior
1— $— — %$— $— $— $— $— $— 
2— — — %— — — — — — 
3— — — %— — — — — — 
41 18,755,345 40.7 %— — 18,755,345 — — — 
5— — — %— — — — — — 
Non-performing 2 27,335,157 59.3 %— — — — — 27,335,157 
3 46,090,502 100.0 %$— $— $18,755,345 $— $— $27,335,157 
Allowance for credit losses(15,702,606)
Total, net of allowance for
    credit losses		$30,387,896