v3.26.1
FAIR VALUE OF FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 17 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company had no financial instruments carried at fair value on a recurring basis at either March 31, 2026 and December 31, 2025.

The Company measures the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying value of the assets may be impaired. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-downs of an asset's value due to impairment.

The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of the Company’s short-term financial instruments such as cash and cash equivalents, restricted cash, accrued interest receivable, accounts payable, and other liabilities, accrued interest payable and distributions payable approximate their carrying values on the consolidated balance sheets. The fair values of the Company’s other financial assets and liabilities are estimated as follows:

CRE whole loans. The fair values of the Company’s loans held for investment are measured by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Par values of loans with variable interest rates are expected to approximate fair value unless evidence of credit deterioration exists, in which case the fair value approximates the par value less the loan’s allowance estimated through individual evaluation. The Company’s floating-rate CRE loans had interest rates from 4.38% to 10.75% and 4.63% to 10.88% at March 31, 2026 and December 31, 2025, respectively.

Preferred equity investments. The fair value of the Company's preferred equity investment is measured by discounting the expected cash flows using the future expected coupon rates. The Company's preferred equity investment is discounted at a rate of 10.00%.

Loan receivable- due from Manager. Fair value is estimated using a discounted cash flow model.

Senior notes in CRE securitizations, 5.75% Senior Unsecured Notes and junior subordinated notes. Fair values are estimated using a discounted cash flow model with implied yields based on trades for similar securities.

CRE term reinvestment financing facility, Senior secured financing facility, warehouse financing facilities and mortgage payable. These are variable rate debt instruments that are indexed to one-month Term SOFR that reset periodically and, as a result, their carrying value approximates their fair value, excluding deferred debt issuance costs.

The fair values of the Company’s financial and non-financial assets that are not reported at fair value on the consolidated balance sheets are reported in the following table (in thousands):

 

 

 

 

 

 

Fair Value Measurements

 

 

 

Carrying Value

 

 

Fair Value(1)

 

 

Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)

 

 

Significant Other Observable Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

At March 31, 2026:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE whole loans

 

$

2,173,945

 

 

$

2,202,675

 

 

$

—

 

 

$

—

 

 

$

2,202,675

 

CRE preferred equity investment

 

 

9,461

 

 

 

9,750

 

 

 

—

 

 

 

—

 

 

 

9,750

 

Loan receivable - due from Manager

 

 

10,300

 

 

 

9,322

 

 

 

—

 

 

 

—

 

 

 

9,322

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes in CRE securitizations

 

 

873,463

 

 

 

878,398

 

 

 

—

 

 

 

—

 

 

 

878,398

 

CRE term reinvestment facility

 

 

709,206

 

 

 

711,875

 

 

 

—

 

 

 

—

 

 

 

711,875

 

Senior secured financing facility

 

 

41,654

 

 

 

42,926

 

 

 

—

 

 

 

—

 

 

 

42,926

 

Warehouse financing facilities

 

 

18,938

 

 

 

19,627

 

 

 

—

 

 

 

—

 

 

 

19,627

 

Mortgage payable

 

 

20,145

 

 

 

20,145

 

 

 

—

 

 

 

—

 

 

 

20,145

 

5.75% Senior Unsecured Notes

 

 

149,717

 

 

 

149,310

 

 

 

—

 

 

 

—

 

 

 

149,310

 

Junior subordinated notes

 

 

51,548

 

 

 

42,545

 

 

 

—

 

 

 

—

 

 

 

42,545

 

At December 31, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE whole loans

 

$

1,800,784

 

 

$

1,828,299

 

 

$

—

 

 

$

—

 

 

$

1,828,299

 

CRE preferred equity investment

 

 

9,185

 

 

 

9,511

 

 

 

—

 

 

 

—

 

 

 

9,511

 

Loan receivable - due from Manager

 

 

10,375

 

 

 

9,337

 

 

 

—

 

 

 

—

 

 

 

9,337

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE term reinvestment facility

 

 

728,167

 

 

 

731,002

 

 

 

—

 

 

 

—

 

 

 

731,002

 

Senior secured financing facility

 

 

61,645

 

 

 

63,099

 

 

 

—

 

 

 

—

 

 

 

63,099

 

Warehouse financing facilities

 

 

533,862

 

 

 

534,760

 

 

 

—

 

 

 

—

 

 

 

534,760

 

Mortgage payable

 

 

20,185

 

 

 

20,185

 

 

 

—

 

 

 

—

 

 

 

20,185

 

5.75% Senior Unsecured Notes

 

 

149,531

 

 

 

148,740

 

 

 

—

 

 

 

—

 

 

 

148,740

 

Junior subordinated notes

 

 

51,548

 

 

 

42,777

 

 

 

—

 

 

 

—

 

 

 

42,777

 

 

(1)
The fair values reflected in the table above represent management's best estimate of the fair value of the financial instruments and have no impact on the Company's performance or cash flows.