v3.26.1
Dependency
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
Dependency Related Party Transactions
Advisory Agreement
On April 1, 2025, the Company entered into the Advisory Agreement with the Adviser in which the Adviser, subject to the overall supervision of the Board, manages the day-to-day operations of, and provides investment advisory services to the Company. Under the Advisory Agreement, the Adviser is responsible for sourcing, evaluating and monitoring the Company’s investment opportunities and making decisions related to the acquisition, origination, management, financing and disposition of the Company’s assets, in accordance with the Company’s investment objectives, guidelines, policies and limitations, subject to oversight by the Board.
Pursuant to the Advisory Agreement, the Company pays the Adviser a fee for investment advisory and management services consisting of two components- a base management fee and performance fee (“Performance Fee”). In addition, the Adviser is also entitled to a portion of certain commitment fees charged to and paid by the borrower on loans originated by the Company.
Management and Performance Fees
As compensation for the services provided pursuant to the Advisory Agreement, the Adviser will be paid a management fee equal to 1.25% per annum of the NAV allocable to each class of common shares, except for Class F, F-S, F-D, G, G-S, G-D and E common shares (the “Management Fee”). The Management Fee for Class F, F-S and F-D common shares is equal to 0.60% per annum of the NAV allocable to each such class of common shares. The Management Fee for Class G, G-S and G-D common shares is equal to 0.55% per annum of the NAV allocable to each such class of common shares. There is no management fee with respect to Class E shares. The Management Fee is payable monthly in arrears. In calculating the
Management Fee, the Company will use the NAV before giving effect to accruals for the Management Fee, Stockholder Serving Fee, the Performance Fee or any distributions.
The Adviser may be entitled to receive a performance fee for each class of common share, other than Class E common shares, which is accrued monthly and payable quarterly in arrears. The Performance Fee will be an amount, not less than zero, equal to (i) 12.5% of Core Earnings (as defined below) for the immediately preceding four calendar quarters (each such period, a "4-Quarter Performance Measurement Period"), subject to a hurdle rate, expressed as an annual rate of return on average Adjusted Capital (as defined in the Advisory Agreement), equal to 5.0% (the "Annual Hurdle Rate"), minus (ii) the sum of any Performance Fees paid to the Adviser with respect to the first three calendar quarters in the applicable 4-Quarter Performance Measurement Period. The Adviser does not earn a Performance Fee for any calendar quarter until Core Earnings for the applicable 4-Quarter Performance Measurement Period exceed the Annual Hurdle Rate.
As defined in the Advisory Agreement, Core Earnings shall mean for the applicable performance measurement period, the net income (loss), computed in accordance with GAAP, attributable to holders of classes of Common Shares to which the Performance Fee applies, including realized gains (losses) not otherwise included in GAAP net income (loss), amortizing over the life of the loan any warehouse debt issuance costs that is expensed at inception under GAAP, and excluding (i) non-cash equity compensation expense, (ii) the Performance Fee, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, (v) one-time events pursuant to changes in GAAP, and (vi) certain non-cash adjustments and certain material non-cash income or expense items, in each case after discussions between the Adviser and the Independent Directors and approved by a majority of the Independent Directors.
For each of the three full calendar quarters preceding the fourth quarter of the initial 4-Quarter Performance Measurement Period, the Performance Fee will be an amount, not less than zero, equal to (i) 12.5% of our Core Earnings for all of the full calendar quarter periods completed since the initial closing of our private offering (each such period, a “Partial-Year Performance Measurement Period”), subject to the Applicable Hurdle Rate (as defined below), which is calculated by multiplying the Annual Hurdle Rate by a fraction consisting of (x) a numerator equal to the number of full calendar quarter periods included in the Partial-Year Performance Measurement Period, and (y) a denominator equal to 4, minus (ii) the sum of any Performance Fees paid to the Adviser with respect to the prior Partial-Year Performance Measurement Periods.
Once the Company’s Core Earnings exceed the Applicable Hurdle Rate, the Adviser is entitled to a “catch-up” fee payable quarterly equal to the amount of Core Earnings in excess of the Applicable Hurdle Rate (as defined in the Advisory Agreement), until the Company’s Core Earnings for the applicable performance measurement period exceed a percentage of average adjusted capital equal to the specified Applicable Hurdle Rate divided by the difference of 1 minus 0.125 for the applicable performance measurement period. Thereafter, the Adviser is entitled to receive 12.5% of the Company’s Core Earnings.
The Management Fee and Performance Fee may be paid, at the Adviser's election, in any combination of cash or common shares with a cash equivalent value (based on NAV per share allocable to such class). If the Adviser elects to receive any portion of its Management Fee or Performance Fee in common shares, the Adviser or any subsequent transferee thereof may elect to have the Company repurchase such common shares from the Adviser or such transferee at a later date at a repurchase price per common share equal to the then NAV per share allocable to such class. Common shares obtained by the Adviser or any subsequent transferee will not be subject to the Company's share repurchase plan, including the repurchase limits or any reduction or penalty for an early repurchase.
Accrued Organization and Offering Costs and Accrued Operating Expenses
Refer to Note 2.
Stockholder Servicing Fees
The Company entered into a dealer manager agreement (the “Dealer Manager Agreement”) with Franklin Distributors, L.L.C. (the “Dealer Manager”), an affiliate of the Adviser, on January 23, 2025 effective as of September 1, 2024. The Dealer Manager is entitled to receive stockholder servicing fees with respect to certain classes of our common shares, including 0.85% per annum of the aggregate NAV for each of the Class F-S shares and Class G-S shares and 0.25% per annum of the aggregate NAV for each of the Class F-D shares and Class G-D shares.
The Dealer Manager anticipates that substantially all of the stockholder servicing fees will be retained by, or re-allowed (paid) to, participating broker-dealers. For the three months ended March 31, 2026, the Dealer Manager did not retain any stockholder servicing fees.
The Company accrues the estimated amount of the future stockholder servicing fees payable to the Dealer Manager. Accrued stockholder servicing fees were $2.7 million at March 31, 2026. There were $2.4 million accrued stockholder servicing fees at December 31, 2025.
The table below shows the costs incurred due to arrangements with the Adviser and its affiliates during the three months ended:
(in thousands)
March 31, 2026
March 31, 2025
Administrative Expenses$649 $— 
Performance Fees594 — 
Management Fees272 — 
Stockholder Servicing Fees(1)
377 — 
Offering Costs(2)
199 — 
2,091 — 
(1) The Company accrues the full amount of stockholder servicing fees payable over an estimated investor holding period as an offering cost at the time each applicable share is sold during the Company’s continuous offering and records the amount as an offset (reduction) to additional paid-in capital in the Consolidated Balance Sheets.
(2) Offering costs consist of costs incurred in connection with the Company’s continuous offering. Offering costs are recorded as a reduction to paid-in capital.

Due from Affiliates
The following table details the components of Due from affiliates:
(in thousands)March 31, 2026December 31, 2025
Other615 615 
Total due from affiliates$615 $615 

Due to Affiliates

The following table details the components of Due to affiliates:
(in thousands)March 31, 2026December 31, 2025
Accrued organization costs$1,053 $1,053 
Accrued offering costs2,5632,364
Accrued management fees272220
Accrued performance fees594325
Accrued administration fees1,6361,626
Accrued stockholder services fees2,6912,418
Due to advisor2,0961,506
Total due to affiliates$10,905 $9,512 
Loan Acquisition Transactions
For the three months ended March 31, 2026, the Company purchased interests in twelve commercial real estate loans from an entity managed by and affiliated with the Adviser. The below table details the commercial real estate loan interests and associated debt acquired during the three months ended March 31, 2026:

(in thousands)Principal Balance AcquiredDebt Acquired
Net Cash Paid (1)
Related Party Acquisitions$136,525 $(93,197)$43,846 
(1) Net cash paid includes accrued interest income of $0.5 million.
Dependency
The Company is dependent on the Adviser and its affiliates for certain services that are essential to it, including the sale of the Company’s common shares, origination, acquisition and disposition decisions, and certain other responsibilities. In the event that the Adviser and its affiliates are unable to provide such services, the Company would be required to find alternative service providers.