MORTGAGE LOAN RECEIVABLES |
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| SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MORTGAGE LOAN RECEIVABLES | 3. MORTGAGE LOAN RECEIVABLES December 31, 2025 ($ in thousands)
(1)Includes the impact of interest rate floors. Term SOFR rates in effect as of December 31, 2025 are used to calculate weighted average yield for floating rate loans. (2)Excludes four non-accrual loans with an amortized cost basis of $129.7 million. Refer to “Non-Accrual Status” below for further details. (3)The remaining maturity is calculated based on the initial maturity. The weighted average extended maturity for all loans is 2.9 years. (4)As a result of changes in prevailing rates, the Company recorded a lower of cost or market adjustment as of December 31, 2025. The adjustment was calculated using a 4.94% discount rate. (5)Net of $12.0 million of deferred origination fees and other items as of December 31, 2025. As of December 31, 2025, $1.9 billion, or 86.5%, of the outstanding face amount of the mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates linked to Term SOFR. Of this $1.9 billion, 100% of these variable interest rate mortgage loan receivables were subject to interest rate floors. As of December 31, 2025, $31.4 million, or 100%, of the outstanding face amount of the mortgage loan receivables held for sale were at fixed interest rates. December 31, 2024 ($ in thousands)
(1)Includes the impact of interest rate floors. Term SOFR rates in effect as of December 31, 2024 are used to calculate weighted average yield for floating rate loans. (2)Excludes two non-accrual loans with an amortized cost basis of $76.9 million. Refer to “Non-Accrual Status” below for further details. (3)The remaining maturity is calculated based on the initial maturity. The weighted average extended maturity for all loans is 1.6 years. (4)As a result of rising prevailing rates, the Company recorded a reversal of lower of cost or market adjustment as of December 31, 2024. The adjustment was calculated using a 5.20% discount rate. (5)Net of $5.0 million of deferred origination fees and other items as of December 31, 2024. As of December 31, 2024, $1.3 billion, or 83.3%, of the outstanding face amount of the mortgage loan receivables held for investment, net, at amortized cost, were at variable interest rates linked to Term SOFR. Of this $1.3 billion, 100.0% of these variable interest rate mortgage loan receivables were subject to interest rate floors. As of December 31, 2024, $31.4 million, or 100%, of the outstanding face amount of the mortgage loan receivables held for sale were at fixed interest rates. For the years ended December 31, 2025, 2024, and 2023, loan portfolio activity was as follows ($ in thousands):
(1)Includes funding of commitments on existing mortgage loans. (2)Includes unrealized lower of cost or market adjustment reversal of $1.1 million and realized gain on loans held for sale of $3.6 million. (3)The charge-off related to a portion of one loan, which was determined to be nonrecoverable during the three months ended December 31, 2025. The loan was collateralized by an office property in Portland, Oregon. (4)Refer to “Allowance for Credit Losses” table below for further detail.
(1)Includes funding of commitments on existing mortgage loans. (2)Includes $102.0 million of repayments in transit. (3)Excludes $82.5 million of proceeds received from the sale of conduit mortgage loans collateralized by net leased properties in the Company’s real estate segment to a third-party securitization trust. The mortgage loan receivables, which were originated during the current period, and the related obligation do not appear in the Company’s consolidated balance sheets as they are eliminated upon consolidation. Upon the sale of the mortgage loan receivable to a third-party securitization trust (for cash), the related mortgage note is recognized as a financing transaction. (4)Refer to Note 5, Real Estate and Related Lease Intangibles, Net, for further detail on foreclosures of real estate. (5)The charge-off related to one loan that was resolved via foreclosure during the three months ended September 30, 2024. The loan was collateralized by an office asset in Oakland, California. (6)Includes unrealized lower of cost or market adjustment and realized gain/loss on loans held for sale. (7)Refer to “Allowance for Credit Losses” table below for further detail. Allowance for Credit Losses and Non-Accrual Status ($ in thousands)
(1)As of December 31, 2025, 2024, and 2023, there were no asset-specific reserves. (2)The 2025 charge-off related to a portion of one loan, which was determined to be nonrecoverable during the three months ended December 31, 2025. The loan was collateralized by an office property in Portland, Oregon. The 2024 charge-off related to one loan that was resolved via foreclosure during the three months ended September 30, 2024. The loan was collateralized by an office property in Oakland, California.
(1)As of December 31, 2025, $123.9 million of loans on non-accrual status were greater than 90 days past due. As of December 31, 2024, $76.9 million of loans on non-accrual status were greater than 90 days past due. For the year ended December 31, 2025, the Company recognized $4.8 million of interest income on these loans while on non-accrual status. For the year ended December 31, 2024, the Company recognized $1.5 million of interest income on these loans. As of December 31, 2025, there was one loan accruing income with an amortized cost basis of $4.6 million that was greater than 90 days past due. As of December 31, 2024, there was one loan accruing income with an amortized cost basis of $13.7 million that was greater than 90 days past due. (2)Comprised of one multi-family loan with an amortized cost basis of $61.3 million, one hotel loan with an amortized cost basis of $11.9 million and one multi-family loan with an amortized cost basis of $50.7 million, and one office loan with an amortized cost basis of $5.8 million for which the Company determined no asset-specific reserves were necessary. (3)Comprised of one multi-family loan with an amortized cost basis of $60.9 million and one mixed-use loan with an amortized cost basis of $16.0 million, for which the Company determined no asset-specific reserve was necessary. Current Expected Credit Loss As of December 31, 2025, the Company had a $47.7 million allowance for current expected credit losses, of which $47.1 million pertained to mortgage loan receivables and $0.5 million related to unfunded commitments included in other liabilities in the consolidated balance sheet. As of December 31, 2024, the Company had a $52.8 million allowance for current expected credit losses, of which $52.3 million pertained to mortgage loan receivables and $0.5 million related to unfunded commitments included in other liabilities in the consolidated balance sheet. The release of loan loss reserves for the year ended December 31, 2025 was $0.2 million. The release recorded during the year ended December 31, 2025 reflects improved macroeconomic market conditions affecting commercial real estate. During the year ended December 31, 2025, the Company charged-off $5.0 million of the existing allowance for credit losses related to a portion of a loan that was determined to be nonrecoverable. The provision for loan loss reserves for the year ended December 31, 2024 was $13.9 million. The provision recorded during the year ended December 31, 2024 was primarily due to continued uncertainty in macroeconomic market conditions affecting commercial real estate, partially offset by a decrease in the size of the Company’s balance sheet first mortgage loan portfolio as a result of repayments. During the year ended December 31, 2024, the Company charged-off $5.0 million of the existing allowance for credit losses related to a loan that was resolved via foreclosure. Management’s method for monitoring credit is the performance of a loan. The primary credit quality indicator management utilizes to assess its current expected credit loss reserve is by viewing the Company’s mortgage loan portfolio by collateral type. The primary credit quality indicator is reviewed by management on a quarterly basis. The following tables summarize the amortized cost of the mortgage loan portfolio by collateral type as of December 31, 2025 and December 31, 2024, respectively ($ in thousands):
(1)Not included above is $10.6 million of accrued interest receivable on all loans at December 31, 2025. (2)For the year ended December 31, 2025, there was a $5.0 million charge-off of an allowance in connection with one office property in Portland, Oregon. The fair value was determined by using the sales comparison and direct capitalization approaches. The Company utilized a capitalization rate of 11.0%. The key inputs used to determine fair value were determined to be Level 3 inputs. (3)For purposes of calculating our CECL allowance, one loan collateralized by an office property, one loan collateralized by a hospitality property and two loans collateralized by multifamily properties utilized valuations of the underlying collateral to calculate the allowance at December 31, 2025. (4)The Company had one $228.2 million mortgage loan receivable collateralized by an office property in the southeast that represents 10% of the total mortgage loan receivable held for investment at December 31, 2025. (5)For purposes of calculating our CECL allowance, two loans collateralized by mixed-use, one loan collateralized by office, and one loan collateralized by multifamily utilized valuations of the underlying collateral to calculate the allowance at December 31, 2024. (6)For the year ended December 31, 2024, there was a $5.0 million charge-off of an allowance in connection with a foreclosure of one office property in Oakland, California. (7)Not included above is $9.4 million of on all loans at December 31, 2024.
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