| Schedule of Securities Available for Sale |
The following is a summary of the Company’s real estate-related securities and other as of December 31, 2025 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Real Estate-Related Securities and Other | | | | | Gross Unrealized | | | | | | | | | Amortized Cost Basis | | Gains | | Losses | | | | CECL | | Fair Value | CMBS | | $ | 305,610 | | | $ | 283 | | | $ | (12,027) | | | | | $ | (182,104) | | | $ | 111,762 | | CLO subordinated note | | 27,220 | | | — | | | (7,665) | | | | | — | | | 19,555 | | Equity securities | | 58,447 | | | — | | | (20,558) | | | | | — | | | 37,889 | | Total real estate-related securities and other | | $ | 391,277 | | | $ | 283 | | | $ | (40,250) | | | | | $ | (182,104) | | | $ | 169,206 | |
The following table provides the activity for the real estate-related securities and other during the years ended December 31, 2025 and 2024 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized Cost Basis | | Unrealized (Loss) Gain | | CECL | | Fair Value | Real estate-related securities as of January 1, 2024 | | $ | 647,035 | | | $ | (91,513) | | | $ | (35,808) | | | $ | 519,714 | | Face value of real estate-related securities acquired | | 25,000 | | | — | | | — | | | 25,000 | | Investment in CLO subordinated note | | 31,825 | | | — | | | — | | | 31,825 | | Converted equity securities | | 5,060 | | | — | | | — | | | 5,060 | | Discount on purchase of CLO subordinated note | | (4,179) | | | — | | | — | | | (4,179) | | Discounts on purchase of real estate-related securities, net of acquisition costs | | (63) | | | — | | | — | | | (63) | | Accretion of discount on real estate-related securities | | 2,417 | | | — | | | — | | | 2,417 | | Accretion of interest income on CLO subordinated note | | 1,572 | | | — | | | — | | | 1,572 | | Sale of real estate-related securities | | (34,045) | | | 2,966 | | | — | | | (31,079) | | Capitalized interest income on real estate-related securities | | 1,214 | | | — | | | — | | | 1,214 | | Principal payments received on real estate-related securities (1) | | (107,404) | | | — | | | — | | | (107,404) | | Unrealized loss on real estate-related securities and other, net | | — | | | (23,995) | | | — | | | (23,995) | | Provision for credit losses | | — | | | — | | | (74,254) | | | (74,254) | | Real estate-related securities and other as of January 1, 2025 | | 568,432 | | | (112,542) | | | (110,062) | | | 345,828 | | Face value of real estate-related securities acquired | | 26,740 | | | — | | | — | | | 26,740 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Discounts on purchase of real estate-related securities, net of acquisition costs | | (40) | | | — | | | — | | | (40) | | Accretion of discount on real estate-related securities | | 1,541 | | | — | | | — | | | 1,541 | | Accretion of interest income on CLO subordinated note | | 4,072 | | | — | | | — | | | 4,072 | | Sale of real estate-related securities | | (75,893) | | | 261 | | | — | | | (75,632) | | Capitalized interest income on real estate-related securities | | 1,271 | | | — | | | — | | | 1,271 | | Principal payments received on real estate-related securities (1) | | (128,776) | | | — | | | — | | | (128,776) | | Proceeds from the repayment on the CLO subordinated note | | (6,070) | | | — | | | — | | | (6,070) | | Unrealized gain on real estate-related securities and other, net | | — | | | 1,292 | | | — | | | 1,292 | | Unrealized loss reclassified to CECL | | — | | | 71,022 | | | — | | | 71,022 | | Provision for credit losses | | — | | | — | | | (72,042) | | | (72,042) | | Real estate-related securities and other as of December 31, 2025 | | $ | 391,277 | | | $ | (39,967) | | | $ | (182,104) | | | $ | 169,206 | |
____________________________________ (1)Includes the full repayment of the Company’s position in six CMBS instruments prior to their stated maturity dates during each of the years ended December 31, 2025 and 2024. The scheduled maturities of the Company’s CMBS and CLO subordinated note as of December 31, 2025 are as follows (in thousands): | | | | | | | | | | | | | | | | | CMBS and CLO Subordinated Note (1) | | | Amortized Cost | | Estimated Fair Value | Due within one year | | $ | 43,835 | | | $ | 44,030 | | Due after one year through five years | | 20,104 | | | 20,192 | | Due after five years through ten years | | 14,999 | | | 11,582 | | Due after ten years | | 61,108 | | | 44,833 | | Total | | $ | 140,046 | | | $ | 120,637 | |
____________________________________ (1) Excludes two tranches of a CMBS position held by the Company that were in maturity default as of December 31, 2025. The CMBS had an aggregate amortized cost and estimated fair value of $192.8 million and $10.7 million, respectively, as of December 31, 2025.
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| Schedule of Current Expected Credit Loss |
The following table presents the activity in the Company’s current expected credit losses related to its positions in two different tranches of a CMBS instrument for the years ended December 31, 2025 and 2024 (in thousands): | | | | | | | CMBS | Current expected credit losses as of January 1, 2024 | $ | 35,808 | | Provision for credit losses | 74,254 | | Current expected credit losses as of January 1, 2025 | 110,062 | | Provision for credit losses | 72,042 | | Current expected credit losses as of December 31, 2025 | $ | 182,104 | |
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 | | | |
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.
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