v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
KREF utilizes forward currency contracts to hedge exposure to future principal payments associated with loans denominated in foreign currencies.

KREF’s non-U.S. dollar denominated investments expose the Company to movements in foreign interest rates and foreign currency exchange rates, which may affect the value of related principal repayments when translated into U.S. dollar. To manage this exposure, KREF uses foreign currency forward contracts to hedge the value of, or to fix the U.S. dollar amount of, certain investments and related cash flows.

The following table presents the outstanding derivative financial instruments as of June 30, 2026:

June 30, 2026
Derivative TypeNumber of ContractsNotional AmountMaturityWeighted Average
Maturity (Years)
Forward Contract - EUR5€40,685 
April 2028 - November 2029
2.8
Forward Contract - GBP5£63,481 
February 2029 - November 2029
2.8


The following table presents the outstanding derivative financial instruments as of December 31, 2025:

December 31, 2025
Derivative TypeNumber of ContractsNotional AmountMaturityWeighted Average
Maturity (Years)
Forward Contract - EUR2€24,746 September 2028 - November 20293.3
Forward Contract - GBP2£28,358 May 2029 - November 20293.4


KREF has not designated any of its derivative instruments as hedges as defined under ASC 815; accordingly, changes in the fair value of these derivative instruments are recognized in the Condensed Consolidated Statements of Income. The following table presents the effect of the derivatives financial instruments on the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2026:
Three Months Ended June 30,Six Months Ended June 30,
Location of Gain (Loss) Recognized2026202520262025
Realized gain (loss) on derivative instrumentsGain (loss) on foreign currency forward contracts$1,141 $— $1,137 $— 
Unrealized gain (loss) on derivative instrumentsGain (loss) on foreign currency forward contracts(5,333)— 1,488 — 
Forward points on derivative instruments(A)
Gain (loss) on foreign currency forward contracts(2)— 34 — 
Total$(4,194)$— $2,659 $— 

(A)    Represents the amortization of forward points on foreign currency forward contracts, reflecting interest rate differentials between applicable base rates of foreign currency investments and the prevailing U.S. interest rate.