Interest income from notes and mortgages receivable is reported within the Company’s Structured Financing segment (Note 12). Interest receivable is included in Other assets, net (Note 5). The Company’s notes receivable, net, are generally collateralized by either the underlying real estate or the borrowers’ equity interests in the entities that own the properties. The balances were as follows (dollars in thousands):


	June 30,			December 31,			June 30, 2026
Description	2026			2025			Number		Maturity Date	Interest Rate
Notes receivable	$	156,681		$	156,530			7	Apr 2020 - Dec 2027	6.00% - 13.75%
Allowance for credit losses		(2,180	)		(1,638	)
Notes receivable, net	$	154,501		$	154,892			7

The following table presents the activity in the allowance for credit losses for the six months ended June 30, 2026 and year ended December 31, 2025 (dollars in thousands):



	June 30, 2026		December 31, 2025
Allowance for credit losses as of beginning of periods	$	1,638	$	2,004
Provision (recovery) of loan losses		542		(366	)
Total credit allowance	$	2,180	$	1,638

As of June 30, 2026, the Company had five performing notes with a total amortized cost of $136.1 million, including accrued interest of $2.3 million. Each note was evaluated individually due to the lack of comparability across the Structured Financing Portfolio.

One note receivable with an outstanding principal balance of $5.0 million was on nonaccrual status as of June 30, 2026 as collection of contractual principal and interest was no longer considered probable. The note is secured by pledges of ownership interests in the Georgetown Portfolio (Note 4), which owns a portfolio of retail properties in Washington, D.C. Accordingly, interest income on this note is recognized only to the extent cash payments are received. No interest income was recognized on the note during the three and six months ended June 30, 2026. Contractual interest income not recognized as a result of the note’s nonaccrual status was approximately $1.5 million as of June 30, 2026. Based on the estimated fair value of the collateral at the expected realization date, no allowance for credit losses was recorded as of June 30, 2026.

One note receivable with a principal balance of $17.8 million matured and remained in default as of June 30, 2026 and December 31, 2025. The Company applied the collateral-dependent practical expedient in accordance with ASC Topic 326: Financial Instruments - Credit Losses (“ASC 326”) as the note is expected to be settled through foreclosure or possession of the underlying collateral. Based on the estimated fair value of the collateral at the expected realization date, no allowance for credit losses was recorded as of June 30, 2026.

The Company holds a preferred equity investment, which is accounted for as a note receivable, and a mezzanine loan with an aggregate carrying value of approximately $82.5 million as of June 30, 2026. As of June 30, 2026, the borrowers were current on contractual interest payments through the use of interest reserves established in connection with a prior restructuring. The remaining interest reserves were insufficient to fund the full interest payment due in July 2026, causing a default, and the Company is currently evaluating a restructuring of the investment with the borrowers. The Company continues to evaluate the investment under ASC 326, including the collectability of contractual interest and the value of the underlying collateral.