v3.26.1
Related Party Transactions and Arrangements
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
Related Party Transactions and Arrangements
Note 18 - Related Party Transactions and Arrangements
Advisory Agreement Fees and Reimbursements
Pursuant to the Advisory Agreement, the Company is required to make the following payments and reimbursements to the Advisor:
•The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company’s executive officers.
•The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholders' equity as calculated pursuant to the Advisory Agreement.
•The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital (as defined in the Advisory Agreement) exceeds 6.0% per annum, our Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to our Advisor exceed 10.0% of the aggregate total return for such year.
•The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company's behalf related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments.
•NewPoint Holdings JV LLC, a subsidiary of the Company, has entered into a loan referral agreement with the Advisor that provides for the sharing of certain fees. Under the terms of this agreement, the Advisor pays NewPoint a referral fee for directing floating-rate bridge loan opportunities to the Advisor’s commercial real estate platform.
The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended March 31, 2026 and 2025 and the associated payable as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Three Months Ended March 31,(Payable)/Receivable as of
20262025March 31, 2026December 31, 2025
Acquisition expenses(1)
$171 $299 $— $— 
Administrative services expenses2,334 3,348 (2,334)(3,556)
Asset management and subordinated performance fee6,054 6,555 (6,054)(6,594)
Other related party expenses(2)(3)
895 494 (2,311)(2,275)
Referral Fee Income200 — 200 371 
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(1) Total acquisition expenses paid during the three months ended March 31, 2026 and 2025 were $1.9 million and $1.6 million, respectively, of which $1.7 million and $1.3 million, were capitalized within the Commercial mortgage loans, held for investment and Real estate securities, available for sale, measured at fair value lines of the consolidated balance sheets.
(2) These are related to reimbursable costs incurred related to the increase in loan origination activities and are included in Other expenses in the Company's consolidated statements of operations.
(3) As of March 31, 2026 and December 31, 2025, the related party payables included (i) $1.2 million and $1.8 million, respectively, of payments made by the Advisor to third party vendors on behalf of the Company (ii) $0.9 million and $0.2 million of fees per the fee arrangement agreement between the Advisor and the Company.
The payables as of March 31, 2026 and December 31, 2025, in the table above are included in Due to affiliates on the Company's consolidated balance sheets.
Other Transactions
In the third quarter of 2021, the Company and an affiliate of the Company entered into the Jeffersonville JV to acquire a $139.5 million triple net lease property in Jeffersonville, GA. The Company has a 79% interest in the Jeffersonville JV, while the affiliate has a 21% interest. The Company invested a total of $109.8 million, made up of $88.7 million in debt and $21.1 million in equity, representing 79% of the ownership interest in the Jeffersonville JV. The affiliated fund made up the remaining $29.8 million composed of a $24.0 million mortgage note payable and $5.8 million in non-controlling interest. The Company has majority control of Jeffersonville JV and, therefore, consolidates the accounts of Jeffersonville JV into its consolidated financial statements. The Company's $88.7 million mortgage note payable to Jeffersonville JV is eliminated in consolidation (see Note 12 - Debt).
Pursuant to the Company's 2021 Incentive Plan, in the first quarter of 2026 the Company issued awards of restricted stock units to its officers and certain other personnel of the Advisor who provide services to the Company under the Advisory Agreement.
As of March 31, 2026 and December 31, 2025, our commercial mortgage loans, held for investment, included an aggregate of $37.1 million and $37.1 million, respectively, carrying value of loans to affiliates of our Advisor. For the three months ended, March 31, 2026 and 2025, the Company recognized $0.6 million and $0.7 million, respectively, of interest income from these loans in the Company's consolidated statement of operations.
In the second quarter of 2022, the Company fully funded a $149.7 million first mortgage consisting of the Walgreens Portfolio: 24 retail properties with various locations throughout the United States. The Company entered into a joint venture agreement and formed the Walgreens JV to acquire 75.618% ownership interest in the Walgreens Portfolio, while the affiliated fund has 24.242% interest. The Company sold the final property within the Walgreens Portfolio during the first quarter of 2026. Refer to Note 8 - Real Estate Owned for further details.
On March 18, 2026, the Company, an affiliate of the Company and an unrelated third party entered into the Zelda PG JV Holdco LLC (the "Gardena JV") to acquire $44.0 million industrial property for warehousing and distribution located in Gardena, California. The Company has a 27.95% interest in the Gardena JV while the affiliated fund and the unrelated third party have 62.05% and 10.00% interest, respectively.
For the three months ended March 31, 2026, the Company through its Agency Business segment earned $0.8 million of servicing fee income from loans owned by its affiliates.
In the first quarter of 2026, the Company purchased 11 loans from an affiliate entity managed by the Advisor, with an aggregate principal balance of $124.7 million and accrued interest of $0.4 million. The Company assumed $99.6 million of debt on repurchase agreements as part of this transaction. As part of these transactions, the exit fees were transferred from the seller to the Company.