Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2026

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of March 31, 2026 (in thousands):


						Fair Value
		Carrying Value				Level 1				Level 2				Level 3				Total
Assets
Cash and cash equivalents		$	22,643			$	22,643			$	—			$	—			$	22,643
Restricted cash			2,604				2,604				—				—				2,604
Loans, held-for-investment, net			679,376				—				—				673,985				673,985
Preferred stock investments, at fair value			157,966												157,966				157,966
Common stock investments, at fair value			52,860				—				—				52,860				52,860
Equity method investments			1,768				—				—				1,768				1,768
Mortgage loans, held-for-investment, net			108,903				—				—				107,827				107,827
Accrued interest			47,305				47,305				—				—				47,305
Mortgage loans held in variable interest entities, at fair value			3,873,034				—				3,869,278				3,756				3,873,034
CMBS structured pass-through certificates, at fair value			38,176				—				38,176				—				38,176
Stock warrant investments, at fair value			136,739				—				—				136,739				136,739
Accounts receivable and other assets			332				332				—				—				332
		$	5,121,706			$	72,884			$	3,907,454			$	1,134,901			$	5,115,239

Liabilities
Secured financing agreements, net		$	163,600			$	—			$	—			$	145,366			$	145,366
Master repurchase agreements			164,614				—				—				164,614				164,614
Unsecured notes, net			230,618				—				228,614				—				228,614
Mortgages payable, net			106,151				—				—				102,862				102,862
Accounts payable and other accrued liabilities			14,518				14,518				—				—				14,518
Accrued interest payable			16,971				16,971				—				—				16,971
Bonds payable held in variable interest entities, at fair value			3,688,881				—				3,688,881				—				3,688,881
		$	4,385,353			$	31,489			$	3,917,495			$	412,842			$	4,361,826

The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of December 31, 2025 (in thousands):


						Fair Value
		Carrying Value				Level 1				Level 2				Level 3				Total
Assets
Cash and cash equivalents		$	31,114			$	31,114			$	—			$	—			$	31,114
Restricted cash			3,240				3,240				—				—				3,240
Loans, held-for-investment, net			619,560				—				—				651,395				651,395
Preferred stock investments, at fair value			157,893												157,893				157,893
Common stock investments, at fair value			49,104				—				—				49,104				49,104
Equity method investments			1,714				—				—				1,714				1,714
Mortgage loans, held-for-investment, net			121,239				—				—				119,991				119,991
Accrued interest			54,009				54,009				—				—				54,009
Mortgage loans held in variable interest entities, at fair value			3,987,281				—				3,983,276				4,005				3,987,281
CMBS structured pass-through certificates, at fair value			40,427				—				40,427				—				40,427
Stock warrant investments			141,186				—				—				141,186				141,186
Accounts receivable and other assets			551				551				—				—				551
		$	5,207,318			$	88,914			$	4,023,703			$	1,125,288			$	5,237,905

Liabilities
Secured financing agreements, net		$	176,141			$	—			$	—			$	156,743			$	156,743
Master repurchase agreements			258,038				—				—				258,038				258,038
Unsecured notes, net			229,112				—				226,731				—				226,731
Mortgages payable, net			106,151				—				—				103,472				103,472
Accounts payable and other accrued liabilities			13,699				13,699				—				—				13,699
Accrued interest payable			13,795				13,795				—				—				13,795
Bonds payable held in variable interest entities, at fair value			3,692,390				—				3,692,390				—				3,692,390
		$	4,489,326			$	27,494			$	3,919,121			$	518,253			$	4,464,868

Schedule of Fair Value Measurement Inputs and Valuation Techniques

Management elected the fair value option to account for the Company's Level 3 assets as of March 31, 2026 (dollars in thousands):


		Carrying Value				Valuation Technique		Unobservable Inputs		Range		Weighted Average (1)
NexPoint Storage Partners		$	24,892			Discounted cash flow		Terminal cap rate		5.13% - 5.63%			5.38	%
								Discount rate		7.00% - 9.00%			8.00	%
NSP Series G Preferred Stock		$	3,269			Transaction Indication of Value		Recent transaction
IQHQ Series D Preferred Stock		$	18,616			Discounted cash flow		Discount rate		15.50% - 17.00%			16.25	%
IQHQ Series E Preferred Stock		$	136,081			Discounted cash flow		Discount rate		16.01% - 17.51%			16.76	%
Private REIT		$	27,968			Market approach		NAV per share multiple		0.85 - 1.05x			0.95	x
FREMF 2020-KF81 C		$	3,756,225			Market approach		Fair value of the collateral/appraisals					155,370
IQHQ Warrants		$	136,739			Market approach		Marketability discount		20.00% - 41.00%			30.50	%

(1)

Averages are weighted based on the fair value of the related instrument.

The following is a summary of significant unobservable inputs used in the fair valuation of the Company's Level 3 assets carried at fair value on the Consolidated Balance Sheets as of December 31, 2025 (dollars in thousands):


		Carrying Value				Valuation Technique		Unobservable Inputs		Range		Weighted Average (1)
NexPoint Storage Partners		$	24,761			Discounted cash flow		Terminal cap rate		5.00% - 5.50%			5.25	%
								Discount rate		7.00% - 9.00%			8.00	%
NSP Series G Preferred Stock		$	3,161			Transaction Indication of Value		Recent transaction
IQHQ Series D Preferred Stock		$	18,616			Discounted cash flow		Discount rate		15.50% - 17.50%			16.00	%
IQHQ Series E Preferred Stock		$	136,115			Discounted cash flow		Discount rate		16.01% - 17.51%			16.76	%
Private REIT		$	24,343			Market approach		NAV per share multiple		0.85 - 1.05x			0.95	x
FREMF 2020-KF81 C		$	4,005,397			Market approach		Fair value of the collateral/appraisals					187,000
IQHQ Warrants		$	141,186			Market approach		Marketability discount		27.50% - 48.50%			38.00	%

(1)

Averages are weighted based on the fair value of the related instrument.

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below reflects a summary of changes for the Company's Level 3 common and preferred stock assets carried at fair value on the Consolidated Balance Sheets for the three months ended March 31, 2026:


		Balances as of December 31, 2025				Additions				Change in Unrealized Gains/(Losses)				Balances as of March 31, 2026
NexPoint Storage Partners		$	24,761				—			$	131			$	24,892
Private REIT			24,343				—				3,625				27,968
IQHQ Series D Preferred Stock			18,617				—				(1	)			18,616
IQHQ Series E Preferred Stock			136,115				—				(34	)			136,081
NSP Series G Preferred Stock			3,161				108				—				3,269
FREMF 2020-KF81 C			4,005,397				—				(249,172	)			3,756,225
IQHQ Warrants			141,186				—				(4,447	)			136,739

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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