v3.26.1
LOANS HELD-FOR-INVESTMENT
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
LOANS HELD-FOR-INVESTMENT
NOTE 8 — LOANS HELD-FOR-INVESTMENT
The Company’s loans held-for-investment consisted of the following as of December 31, 2025 and 2024 (in thousands):
As of December 31,
2025
2024
First mortgage loans (1)
$
3,361,679 
$
3,466,929 
Total CRE loans held-for-investment and related receivables, net
3,361,679 
3,466,929 
Liquid corporate senior loans
26,909 
41,467 
Corporate senior loans
363,879 
254,617 
Loans held-for-investment and related receivables, net
$
3,752,467 
$
3,763,013 
Less: Current expected credit losses
(297,878)
(392,136)
Total loans held-for-investment and related receivables, net
$
3,454,589 
$
3,370,877 
____________________________________
(1)As of December 31, 2024, first mortgage loans included $19.0 million of contiguous mezzanine loan components that, as a whole, have expected credit quality similar to that of a first mortgage loan. During the year ended December 31, 2025 the contiguous mezzanine loan was repaid in full.
The following table details overall statistics for the Company’s loans held-for-investment as of December 31, 2025 and 2024 (dollar amounts in thousands):
CRE Loans (1) (2)
Liquid Corporate Senior Loans
Corporate Senior Loans
As of December 31,
As of December 31,
As of December 31,
2025
2024
2025
2024
2025
2024
Number of loans
35 
33 
8 
15 
35 
20 
Principal balance
$
3,377,417
$
3,483,454
$
27,386
$
42,717
$
368,341
$
258,816
Net book value
$
3,074,451
$
3,085,104
$
22,664
$
35,653
$
357,474
$
250,120
Weighted-average interest rate (3)
7.0 
%
7.7 
%
10.0 
%
9.9 
%
9.5 
%
10.5 
%
Weighted-average maximum years to maturity (4)
2.5
2.3
3.0
3.7
3.0
3.5
Unfunded loan commitments (5)
$
165,818
$
217,907
$
—
$
—
$
51,464
$
43,750
____________________________________
(1)As of December 31, 2025, 91.1% of the Company’s CRE loans by principal balance earned a floating rate of interest primarily indexed to the Secured Overnight Financing Rate (“SOFR”).
(2)Maximum maturity date assumes all extension options are exercised by the borrowers and assumes all relevant conditions are met for such extensions; however, the loans may be repaid prior to such date.
(3)The weighted-average interest rate is based on the relevant fixed rate or floating benchmark plus a spread. Excludes loans on nonaccrual status.
(4)Excludes positions in maturity default.
(5)Unfunded loan commitments are subject to the satisfaction of borrower milestones and are not reflected in the accompanying consolidated balance sheets.
Activity relating to the Company’s loans held-for-investment portfolio was as follows for the years ended December 31, 2025 and 2024 (in thousands):
CRE Loans (1)
Liquid Corporate Senior Loans
Corporate Senior Loans
Total Loan Portfolio
Balance, January 1, 2024
$
3,539,111 
$
518,252 
$
207,102 
$
4,264,465 
Loan originations, acquisitions and funding
162,892 
66,963 
80,886 
310,741 
Sale of loans (2)
— 
(467,197)
— 
(467,197)
Principal repayments received
(356,649)
(85,795)
(36,795)
(479,239)
Capitalized interest
8,095 
82 
75 
8,252 
Conversion to equity securities (3)
— 
(5,060)
— 
(5,060)
Charge-offs of CECL (4)
— 
(4,989)
— 
(4,989)
Deferred fees and other items (5)
(2,174)
(1,584)
(2,158)
(5,916)
Accretion and amortization of fees and other items
6,414 
1,057 
1,887 
9,358 
(Provision for) reversal of credit losses (6)
(272,585)
13,924 
(877)
(259,538)
Balance, January 1, 2025
3,085,104 
35,653 
250,120 
3,370,877 
Loan originations, acquisitions and funding
715,117 
1,282 
127,752 
844,151 
Sale of loans
— 
(5,564)
— 
(5,564)
Principal repayments received
(598,531)
(5,199)
(18,430)
(622,160)
Transfer to real estate assets (7)
(149,439)
— 
— 
(149,439)
Capitalized interest
15,433 
19 
203 
15,655 
Charge-offs of CECL (8)
(87,475)
(5,420)
— 
(92,895)
Deferred fees and other items (5)
(9,713)
(31)
(2,135)
(11,879)
Accretion and amortization of fees and other items
9,358 
355 
1,872 
11,585 
 Reversal of (provision for) credit losses (6)
94,597 
1,569 
(1,908)
94,258 
Balance, December 31, 2025
$
3,074,451 
$
22,664 
$
357,474 
$
3,454,589 
____________________________________
(1)Loan originations, acquisitions and funding include $4.1 million and $15.6 million in protective advances during the years ended December 31, 2025 and 2024, respectively, while principal repayments received include $3.7 million and $15.2 million of cost-recovery proceeds received on the Company’s nonaccrual first mortgage loans during the years ended December 31, 2025 and 2024, respectively.
(2)Includes $265.4 million in sales of liquid corporate senior loans to OFSI BSL XIV CLO, Ltd., as further discussed in Note 2 — Summary of Significant Accounting Policies.
(3)During the year ended December 31, 2024, two of the Company’s defaulted liquid corporate senior loans were equitized into shares of common equity and a preferred equity security.
(4)Includes a $2.1 million charge-off on four liquid corporate senior loans as a result of distressed restructurings of the positions, which is included in increase in provision for credit losses on the Company’s consolidated statements of operations during the year ended December 31, 2024.
(5)Other items primarily consist of purchase discounts or premiums and deferred origination expenses.
(6)Does not include current expected losses for unfunded or unsettled loan commitments. Such amounts are included in accrued expenses and accounts payable on the accompanying consolidated balance sheets.
(7)During the year ended December 31, 2025, the Company took control of the assets securing two of its risk-rated 5 first mortgage loans through deeds-in-lieu of foreclosure, as further discussed in Note 4 — Real Estate Assets.
(8)Includes an $87.5 million charge-off on two first mortgage loans transferred to real estate assets and a $5.4 million charge-off on five liquid corporate senior loans that were disposed of during the year ended December 31, 2025.
As of December 31, 2025, the Company’s CRE loans had the following characteristics based on carrying value (dollar amounts in thousands):
Collateral Property Type
As of December 31, 2025
Office
$
1,817,049 
54.1 
%
Multifamily
659,487 
19.6 
%
Industrial
426,801 
12.7 
%
Hospitality
311,702 
9.3 
%
Mixed Use
85,717 
2.5 
%
Self-Storage
60,923 
1.8 
%
Total first mortgage loans
$
3,361,679 
100 
%
Less: current expected credit losses
(287,228)
Total first mortgage loans, net
$
3,074,451 
Geographic Location
As of December 31, 2025
South
$
1,455,667 
43.3 
%
West
942,804 
28.0 
%
East
555,594 
16.5 
%
Various
407,614 
12.2 
%
Total first mortgage loans
$
3,361,679 
100 
%
Less: current expected credit losses
(287,228)
Total first mortgage loans, net
$
3,074,451 
Current Expected Credit Losses - Loans Held-For-Investment
Current expected credit losses reflect the Company’s current estimate of potential credit losses related to loans held-for-investment included in the Company’s consolidated balance sheets. Refer to Note 2 — Summary of Significant Accounting Policies for further discussion of the Company’s current expected credit losses.
The following table presents the activity in the Company’s current expected credit losses related to loans held-for-investment by loan type for the year ended December 31, 2025 and 2024 (in thousands):
First Mortgage Loans
Unfunded First Mortgage Loans (1)
Liquid Corporate Senior Loans
Unfunded or Unsettled Liquid Corporate Senior Loans (1)
Corporate Senior Loans
Unfunded Corporate Senior Loans (1)
Total
Current expected credit losses as of December 31, 2023
$
109,240 
$
10,062 
$
19,738 
$
3 
$
3,620 
$
495 
$
143,158 
Provision for (reversal of) credit losses
272,585 
3,855 
(8,935)
(3)
877 
182 
268,561 
Charge-offs of CECL
— 
— 
(4,989)
— 
— 
— 
(4,989)
Current expected credit losses as of December 31, 2024
381,825 
13,917 
5,814 
— 
4,497 
677 
406,730 
(Reversal of) provision for credit losses
(7,122)
4,213 
3,851 
— 
1,908 
163 
3,013 
Charge-offs of CECL
(87,475)
— 
(5,420)
— 
— 
— 
(92,895)
Current expected credit losses as of December 31, 2025
$
287,228 
$
18,130 
$
4,245 
$
— 
$
6,405 
$
840 
$
316,848 
____________________________________
(1)Current expected losses for unfunded or unsettled loan commitments are included in accrued expenses and accounts payable on the accompanying consolidated balance sheets.
Changes to current expected credit losses are recognized through net income (loss) on the Company’s consolidated statements of operations.
During the year ended December 31, 2025, the Company recorded a net decrease of $89.9 million in the current expected credit loss reserve against the loans held-for-investment portfolio, bringing the total current expected credit loss reserve on funded and unfunded commitments to $316.8 million. The net decrease in the current expected credit loss reserve was primarily driven by the combined $87.5 million charge-off on the two first mortgage loans transferred to real estate assets, as noted above. The current expected credit loss reserve reflects certain loans assessed for impairment as well as macroeconomic and current portfolio conditions.

As of December 31, 2025, the Company did not have any first mortgage loan investments on nonaccrual status. As of December 31, 2025 and 2024, the Company’s asset-specific credit loss reserve totaled $239.8 million and $330.2 million, respectively, on funded and unfunded commitments, which related to the Company’s risk-rated 5 first mortgage loans and liquid corporate senior loans. The asset-specific credit loss reserve is recorded based on the Company’s estimation of the fair value of each loan’s underlying collateral, reduced by certain adjustments such as estimated costs to sell the underlying collateral where applicable, as of December 31, 2025. Refer to Note 3 — Fair Value Measurements for further discussion of the asset-specific credit loss reserve for first mortgage loans.
Risk Ratings
As further described in Note 2 — Summary of Significant Accounting Policies, the Company evaluates its loans held-for-investment portfolio on a quarterly basis. Each quarter, the Company assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV ratio, debt yield, collateral performance, and the quality and condition of the sponsor, borrower, and guarantor(s). Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2 — Summary of Significant Accounting Policies.
The Company’s primary credit quality indicator is its risk ratings, which are further discussed above. The following table presents the net book value of the Company’s loans held-for-investment portfolio as of December 31, 2025 by year of origination, loan type, and risk rating (dollar amounts in thousands):
Amortized Cost of Loans Held-For-Investment by Year of Origination (1)
As of December 31, 2025
Number of Loans
2025
2024
2023
2022
2021
Prior
Total
First mortgage loans by internal risk rating:
1
—
$
— 
$
— 
$
— 
$
— 
$
— 
$
— 
$
— 
2
—
— 
— 
— 
— 
— 
— 
— 
3
25
611,370 
80,705 
263,668 
612,921 
507,119 
62,056 
2,137,839 
4
4
— 
102,636 
34,740 
234,661 
— 
— 
372,037 
5
6
— 
— 
— 
498,914 
298,948 
53,941 
851,803 
Total first mortgage loans
35
611,370 
183,341 
298,408 
1,346,496 
806,067 
115,997 
3,361,679 
Liquid corporate senior loans by internal risk rating: (2)
1
—
— 
— 
— 
— 
— 
— 
— 
2
—
— 
— 
— 
— 
— 
— 
— 
3
2
— 
— 
1,713 
13,520 
— 
— 
15,233 
4
3
— 
1,869 
— 
— 
3,807 
— 
5,676 
5
3
— 
4,309 
— 
— 
1,691 
— 
6,000 
Total liquid corporate senior loans
8
— 
6,178 
1,713 
13,520 
5,498 
— 
26,909 
Corporate senior loans by internal risk rating:
1
—
— 
— 
— 
— 
— 
— 
— 
2
—
— 
— 
— 
— 
— 
— 
— 
3
32
130,040 
94,630 
72,930 
28,519 
— 
— 
326,119 
4
3
— 
— 
11,634 
26,126 
— 
— 
37,760 
5
—
— 
— 
— 
— 
— 
— 
— 
Total corporate senior loans
35
130,040 
94,630 
84,564 
54,645 
— 
— 
363,879 
Less: Current expected credit losses
(297,878)
Total loans-held-for-investment and related receivables, net
78
$
3,454,589 
Weighted Average Risk Rating (3)
3.6 
Gross charge-offs (4)
— 
(155)
(1,044)
— 
(91,696)
— 
$
(92,895)
____________________________________
(1)Date loan was originated or acquired by the Company. Origination dates are subsequently updated to reflect material loan modifications.
(2)As of December 31, 2025, three of the Company’s liquid corporate senior loan investments were on nonaccrual status with an aggregate carrying value of $6.0 million, which represented less than 1.0% of the carrying value of the Company’s loans held-for-investment portfolio.
(3)Weighted average risk rating calculated based on carrying value at period end.
(4)Represents gross charge-offs by year of origination during the year ended December 31, 2025.
Loan Modifications
The Company may amend or modify a loan depending on the loan’s specific facts and circumstances, which are disclosable under ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). Such modifications generally provide borrowers with additional time to refinance or sell the collateral property, interest payment adjustments, deferral of scheduled principal repayments, and/or adjustments or waivers of performance tests that are prerequisite to the extension of a loan maturity. Loan modifications that allow for the option to pay interest in-kind (“PIK”) result in the interest being capitalized and added to the outstanding principal balance of the respective loan. During the year ended December 31, 2025, the Company entered into four loan modifications that require disclosure pursuant to ASC 326.
During the year ended December 31, 2025, the Company modified a first mortgage loan collateralized by an office property into two distinct mortgage loans with a principal balance of $78.2 million (“Note A”) and $52.9 million (“Note B”). As of December 31, 2025, the loans had an aggregate carrying value of $130.8 million, representing approximately 3.9% of the Company’s first mortgage loans and were risk-rated 5. The loan modification extended the initial maturity date from January 7, 2025 to February 7, 2029, with two one-year extension options and allows for future funding advances up to an aggregate amount of $14.5 million. In addition, the variable interest rate on Note A was modified from 2.90% plus Term SOFR (as defined in the applicable loan documents) to a fixed interest rate of 5.0% through February 7, 2026, then 6.0% through the initial maturity date and allows for the accrual of PIK interest for any portion of the interest unable to be paid on a monthly basis due to insufficient cash flow. Note B is not subject to any interest payments, provided no event of default occurs as defined in the loan agreement. The Company received a $12.0 million repayment in connection with the loan modification. During the year ended December 31, 2025, interest accrual was resumed on Note A, after previously being on nonaccrual status. The borrower elected to PIK $1.7 million of interest during the year ended December 31, 2025.
The Company modified a first mortgage loan collateralized by an office property during the year ended December 31, 2025. As of December 31, 2025, the loan had a carrying value of $169.5 million, representing approximately 5.0% of the Company’s first mortgage loans and was risk rated 4. The loan modification extended the initial maturity date from February 7, 2025, with two one-year extension options, to February 7, 2028, with one one-year extension option. The Company received a $10.0 million repayment in connection with the loan modification.
The Company modified a first mortgage loan and a contiguous mezzanine loan with principal balances of $57.2 million and $19.1 million, respectively, collateralized by two multifamily properties during the year ended December 31, 2025. The loan modifications increased the minimum strike rate for the interest rate protection from 3.0% to 4.5% for each respective loan. In addition, during the year ended December 31, 2024, the borrower exercised a one-year extension option with a new maturity date of December 16, 2025 and paid down $4.7 million. As of December 31, 2025, the first mortgage loan and contiguous mezzanine loan were repaid in full.
The Company modified a corporate senior loan during the year ended December 31, 2025. As of December 31, 2025, the loan had a carrying value of $19.4 million, representing approximately 5.3% of the Company’s corporate senior loans and was risk-rated 4. The loan modification requires the accrual of additional PIK interest at a rate of 0.5% per annum, commencing on July 1, 2025 through December 31, 2025. PIK interest will continue to accrue from January 1, 2026 until the leverage ratio falls below the defined threshold specified in the credit agreement. The Company received a $1.0 million repayment in connection with the loan modification and recognized $51,000 of PIK during the year ended December 31, 2025.
Other Modifications
While not required to be disclosed pursuant to ASU 2022-02 because the financial difficulty criteria was not met, the Company modified and restructured a first mortgage loan collateralized by a multifamily property during the year ended December 31, 2025. As of December 31, 2025, the loan had a carrying value of $54.6 million, representing approximately 1.6% of the Company’s first mortgage loans and was risk rated 3. The loan modification restructured the loan amount from $72.0 million to $55.0 million, extended the initial maturity date from February 6, 2026 with one one-year extension option to March 6, 2028 with two one-year extension options, and modified the variable interest rate from 3.20% plus Term SOFR to 2.85% plus Term SOFR. The Company received a $15.9 million repayment in connection with the loan modification. The loan modification was accounted for as a new loan for GAAP purposes.