v3.26.1
Loans Held for Investment, net
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans Held for Investment, net Loans Held for Investment, net
We originate first mortgage loans secured by middle market transitional commercial real estate, or CRE, which are generally to be held as long term investments. We fund our loan portfolio using cash on hand and advancements under our Secured Financing Facilities, as defined in Note 5. See Note 5 for further information regarding our secured financing agreements.
The table below provides overall statistics for our loan portfolio as of March 31, 2026 and December 31, 2025:
As of March 31, 2026As of December 31, 2025
Number of loans2624
Total loan commitments$775,958$724,458
Unfunded loan commitments (1)
$43,955$36,873
Principal balance $732,003$687,585
Carrying value$720,601$676,908
Weighted average coupon rate7.44%7.52%
Weighted average all in yield (2)
7.84%7.92%
Weighted average floor2.83%2.81%
Weighted average maximum maturity (years) (3)
2.62.6
Weighted average risk rating2.82.8
(1)Unfunded loan commitments are primarily used to finance property improvements and leasing capital and are generally funded over the term of the loan.
(2)All in yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion.
(3)    Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions.
The tables below represent our loan activities during the three months ended March 31, 2026 and 2025:
Principal BalanceDeferred Fees and Other ItemsAmortized Cost
Balance at December 31, 2025$687,585 $(1,878)$685,707 
Additional funding2,181 — 2,181 
Deferred interest capitalized to loans held for investment137 — 137 
Originations58,100 (720)57,380 
Repayments(16,000)— (16,000)
Net amortization of deferred fees— 546 546 
Purchase discount accretion— 145 145 
Balance at March 31, 2026$732,003 $(1,907)$730,096 
Principal BalanceDeferred Fees and Other ItemsAmortized Cost
Balance at December 31, 2024$610,811 $(895)$609,916 
Additional funding4,073 — 4,073 
Originations46,505 (770)45,735 
Net amortization of deferred fees— 513 513 
Balance at March 31, 2025$661,389 $(1,152)$660,237 
The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Property Type
Number of Loans
Amortized Cost
Percentage of Value
Number of Loans
Amortized Cost
Percentage of Value
Office6$166,344 23%6$165,745 24%
Hotel4122,996 17%4121,393 18%
Student Housing4116,680 16%4115,575 17%
Industrial4113,404 15%4112,792 16%
Multifamily387,975 12%387,920 13%
Other374,524 10%134,292 5%
Self Storage248,173 7%247,990 7%
26$730,096 100%24$685,707 100%
March 31, 2026December 31, 2025
Geographic Location
Number of Loans
Amortized Cost
Percentage of ValueNumber of LoansAmortized CostPercentage of Value
South8$232,513 32%8$222,512 32%
East7224,529 31%7223,240 33%
West8167,812 23%6134,741 20%
Midwest3105,242 14%3105,214 15%
26$730,096 100%24$685,707 100%
Credit Quality Information and Allowance for Credit Losses
We evaluate the credit quality of each of our loans at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The higher the number, the greater the risk level. See our 2025 Annual Report for more information regarding our loan risk ratings.
As of March 31, 2026 and December 31, 2025, the amortized cost of our loan portfolio within each internal risk rating by year of origination was as follows:
March 31, 2026
Risk RatingNumber of LoansPercentage of Portfolio20262025202420232022PriorTotal
1213%$— $— $41,742 $— $— $54,985 $96,727 
2313%— 62,954 — 28,991 — — 91,945 
31652%57,481 86,795 140,028 25,196 20,432 50,257 380,189 
4522%— — — — 45,148 116,087 161,235 
5——%— — — — — — — 
26100%$57,481 $149,749 $181,770 $54,187 $65,580 $221,329 $730,096 
December 31, 2025
Risk RatingNumber of LoansPercentage of Portfolio20252024202320222021PriorTotal
1316%$— $57,599 $— $— $54,982 $— $112,581 
228%27,992 — 28,988 — — — 56,980 
31559%120,576 139,141 25,173 65,510 23,593 26,640 400,633 
4417%— — — — 115,513 — 115,513 
5——%— — — — — — — 
24100%$148,568 $196,740 $54,161 $65,510 $194,088 $26,640 $685,707 
Allowance for credit losses
We measure our allowance for credit losses using the current expected credit loss, or CECL, model, which is based upon historical experience, current conditions and reasonable and supportable forecasts incorporating forward-looking information that affect the collectability of the reported amount.
The allowance for credit losses is a valuation account that is deducted from the related loans’ amortized cost basis in our condensed consolidated balance sheets. Our loans typically include commitments to fund incremental proceeds to borrowers over the life of the loan; these future funding commitments are also subject to the CECL model. The allowance for credit losses related to unfunded loan commitments is included in accounts payable, accrued liabilities and other liabilities in our condensed consolidated balance sheets.
Given the lack of historical loss data related to our loan portfolio, we estimate our expected losses using an analytical model that considers the likelihood of default and loss given default for each individual loan. This analytical model incorporates data from a third party database with historical loan loss information for commercial mortgage-backed securities, or CMBS, and CRE loans since 1998. We estimate the allowance for credit losses for our portfolio, including unfunded loan commitments, at the individual loan level. Significant inputs to the model include certain loan specific data, such as loan to value, or LTV, property type, geographic location, occupancy, vintage year, remaining loan term, net operating income, expected timing and amounts of future loan fundings and macroeconomic forecast assumptions, including the performance of CRE assets, unemployment rates, interest rates and other factors. We utilize the model to estimate credit losses over a reasonable and supportable economic forecast period of 12 months, followed by a straight-line reversion period of 12 months to average historical losses. Average historical losses are established using a population of third party historical loss data that approximates our portfolio as of the measurement date. We evaluate the estimated allowance for each of our loans individually and we consider our internal loan risk rating as the primary credit quality indicator underlying our assessment.
We have elected to exclude accrued interest receivable from amortized cost and not to measure an allowance for credit losses on accrued interest receivable. Accrued interest receivables are generally written off when payments are 120 days past due. Such amounts are reversed against interest income and no further interest will be recorded until it is collected.
If a loan is determined to be collateral dependent (because the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral property) and the borrower is experiencing financial difficulties, but foreclosure is not probable, we may elect to apply a practical expedient to determine the loan's allowance for credit losses by comparing the collateral's fair value to the amortized cost basis of the loan. For collateral-dependent loans for which foreclosure is probable, the related allowance for credit losses is determined using the fair value of the collateral compared to the loan's amortized cost.
See Note 2 to our Consolidated Financial Statements included in Part IV, Item 15 of our 2025 Annual Report for further information regarding our measurement of our allowance for credit losses.
The tables below represent the changes to the allowance for credit losses during the three months ended March 31, 2026 and 2025.
Loans Held for Investment, netUnfunded Loan CommitmentsTotal
Balance at December 31, 2025$8,799 $312 $9,111 
Provision for (reversal of) credit losses696 (93)603 
Balance at March 31, 2026$9,495 $219 $9,714 
Loans Held for Investment, netUnfunded Loan CommitmentsTotal
Balance at December 31, 2024$8,074 $834 $8,908 
(Reversal of) provision for credit losses(426)273 (153)
Balance at March 31, 2025$7,648 $1,107 $8,755 
The increase in the allowance for credit losses during the three months ended March 31, 2026 reflects an increased loan investment balance as of March 31, 2026 and increased allowances for certain of our office loans, partially offset by loans nearing maturity.
We may enter into loan modifications that include, among other changes, extensions of maturity dates, repurposing or required replenishment of reserves, increases or decreases in loan commitments and required pay downs of principal amounts outstanding. Loan modifications are evaluated to determine whether a modification results in a new loan or a continuation of an existing loan under ASC 310.
In April 2025, we amended the agreement governing our loan secured by an office property in Bellevue, WA. As part of this amendment, the borrower was required to contribute $1,625 to cash reserves, the coupon rate was reduced from the Secured Overnight Financing Rate, or SOFR, + 3.85% to SOFR + 2.85% and the maturity date was extended by three years to April 7, 2028. As of March 31, 2026, this loan had an amortized cost of $20,817 and a risk rating of 4.
In May 2025, we amended the agreement governing our loan secured by an office property in Downers Grove, IL. As part of this amendment, the borrower repaid $3,000 of the outstanding principal balance and the maturity date was extended by one year to May 22, 2026. As of March 31, 2026, this loan had an amortized cost of $26,650 and a risk rating of 3.
We did not have any outstanding past due loans or nonaccrual loans as of March 31, 2026 or December 31, 2025. As of March 31, 2026 and April 24, 2026, all of our borrowers had paid their debt service obligations owed and due to us. See our 2025 Annual Report for more information regarding our nonaccrual policy.
As of March 31, 2026, we had unfunded loan commitments of $43,955 related to our loans held for investment that are not reflected in our condensed consolidated balance sheets. These unfunded loan commitments had a weighted average initial maturity of 1.2 years as of March 31, 2026.