Portland, OR Retail / Redevelopment — In December 2021, KREF took title to a Portland retail property and accounted for the property on a consolidated basis (Note 11). The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, KREF recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. KREF contributed a portion of the REO asset to a joint venture (the "REO JV") with a third party local developer (“JV Partner”), whereby KREF had a 90% interest and the JV Partner had a 10% interest. The JV Partner's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets. In June 2025, KREF sold a portion of the property for $6.0 million and recognized a realized gain of $0.7 million after closing costs. In September 2025, to support the ongoing redevelopment of the property, the REO JV acquired an adjacent parcel for $9.1 million.

Mountain View, CA Office — In June 2024, KREF and a KKR affiliate took title to a Mountain View office property through a deed-in-lieu of foreclosure ("DIL") and KREF accounted for the property on a consolidated basis (Note 11). KREF and the KKR affiliate's interest in the property was 68.9% and 31.1%, respectively. The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, KREF recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. The KKR affiliate's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets.

Raleigh, NC Multifamily — In August 2025, KREF took title to a Raleigh multifamily property and accounted for the property through an assignment-in-lieu of foreclosure ("AIL"). The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, KREF recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. As a result, KREF recognized a $14.4 million loan write-off for the difference between the loan amortized cost of $85.5 million and the fair value of the REO’s net assets of $71.8 million, less closing costs.

Philadelphia, PA Office — In December 2023, KREF took title to a Philadelphia office portfolio through a DIL. The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, KREF recorded the portfolio and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. Portions of the portfolio were sold in June 2024 and May 2025. The May 2025 sale resulted in a realized gain of $0.5 million. As of June 30, 2026, there was one office property remaining.

West Hollywood, CA Condo — In April 2025, KREF took title to a West Hollywood multifamily property through an AIL. The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, KREF recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. As a result, KREF recognized a $20.4 million loan write-off for the difference between the loan amortized cost of $112.5 million and the fair value of the REO’s net assets of $92.9 million, less closing costs.

As of June 30, 2026, the Philadelphia, PA Office and West Hollywood, CA Condo properties met the criteria to be classified as held-for-sale under ASC 360. As such, depreciation and amortization on the properties and related lease intangibles were suspended.

Leases — KREF assumed certain legacy lease arrangements upon the acquisition of the REO assets and subsequently entered into lease arrangements. These arrangements entitle KREF to receive contractual rent payments during the lease periods and tenant reimbursements for certain property operating expenses, including common area costs, insurance, utilities and real estate taxes. KREF elects the practical expedient to not separate the lease and non-lease components of the rent payments and accounts for these lease arrangements as operating leases.


	June 30, 2026		December 31, 2025
Real estate owned, held-for-investment
Assets
Real estate owned - land	$	207,191	$	207,191
Real estate owned - land improvements	11,309		10,932
Real estate owned - buildings	117,317		117,317
Real estate owned - building improvements	28,412		5,280
Real estate owned - furniture and fixtures	1,755		1,462
Real estate owned	365,984		342,182
Less: Accumulated depreciation	(5,559)		(3,587)
Real estate owned, net	360,425		338,595
Cash(A)	3,454		2,546
In-place lease intangibles(B)	33		67
Tenant receivables(B)	204		152
Other assets(B)	1,673		2,501
Total	$	365,789	$	343,861
Liabilities
Unfavorable lease intangibles(C)	183		365
Other liabilities(C)	5,723		4,977
Total	$	5,906	$	5,342

Real estate owned, held-for-sale
Assets
Real estate owned, held-for-sale	119,424		118,220
In-place lease intangibles	7,678		7,678
Favorable lease intangibles	2,663		2,663
Tenant receivables	481		543
Other assets	2,325		1,084
Total	$	132,571	$	130,188
Liabilities
Unfavorable lease intangibles	167		167
Other liabilities	2,872		3,700
Total	$	3,039	$	3,867


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Rental income	$	3,774	$	3,434	$	8,020	$	5,124
Other operating income	597		591		1,295		1,790
Revenue from REO operations	4,371		4,025		9,315		6,914
Operating expense	(7,414)		(5,687)		(14,557)		(10,671)
Depreciation expense	(992)		(491)		(1,971)		(981)
Expenses from REO operations	(8,406)		(6,178)		(16,528)		(11,652)

Total	$	(4,035)	$	(2,153)	$	(7,213)	$	(4,738)


		Three Months Ended June 30,				Six Months Ended June 30,
	Income Statement Location	2026		2025		2026		2025
Asset
In-place lease intangibles	Expenses from real estate owned operations	$	17	$	17	$	33	$	34
Liability
Unfavorable lease intangibles	Revenue from real estate owned operations	91		91		182		182