LOANS HELD FOR INVESTMENT

6 Months Ended

Jun. 30, 2026

As of June 30, 2026, the Company’s portfolio included 38 loans held for investment, excluding 197 loans that were repaid, sold, converted to real estate owned or written-off since inception. The aggregate originated commitment under these loans at closing was approximately $2.0 billion and outstanding principal was $1.8 billion as of June 30, 2026. During the six months ended June 30, 2026, the Company funded $339.6 million of outstanding principal and received repayments of $110.7 million of outstanding principal. As of June 30, 2026, 89.2% of the Company’s loans have Secured Overnight Financing Rate (“SOFR”) floors, with a weighted average floor of 1.71%, calculated based on loans with SOFR floors. References to SOFR or “S” are to 30-day SOFR (unless otherwise specifically stated).

The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of June 30, 2026 and December 31, 2025 ($ in thousands):


	As of June 30, 2026
	Carrying Value (1)		Outstanding Principal (1)		Weighted Average Unleveraged Effective Yield						Weighted Average Remaining Life (Years) (4)
Senior mortgage loans	$	1,729,417	$	1,818,946	5.8	%	(2)	7.2	%	(3)	1.4
Subordinated debt and preferred equity investments	19,418		21,223		2.7	%	(2)	6.6	%	(3)	0.8
Total loans held for investment portfolio	$	1,748,835	$	1,840,169	5.7	%	(2)	7.2	%	(3)	1.4


	As of December 31, 2025
	Carrying Value (1)		Outstanding Principal (1)		Weighted Average Unleveraged Effective Yield						Weighted Average Remaining Life (Years) (4)
Senior mortgage loans	$	1,509,670	$	1,580,074	5.7	%	(2)	7.4	%	(3)	1.3
Subordinated debt and preferred equity investments	19,136		20,985		2.7	%	(2)	6.7	%	(3)	1.3
Total loans held for investment portfolio	$	1,528,806	$	1,601,059	5.7	%	(2)	7.4	%	(3)	1.3

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(2)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of June 30, 2026 and December 31, 2025 as weighted by the total outstanding principal balance of each loan.

(3)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all interest accruing loans held by the Company as of June 30, 2026 and December 31, 2025 as weighted by the total outstanding principal balance of each interest accruing loan (excludes loans on non-accrual status as of June 30, 2026 and December 31, 2025).

(4)Remaining Life is based on contractual maturity date and does not include contractual extension options not yet exercised.

A more detailed listing of the Company’s loans held for investment portfolio based on information available as of June 30, 2026 is as follows ($ in millions):


Loan Type	Location	Outstanding Principal (1)	Carrying Value (1)	Interest Rate	Unleveraged Effective Yield (2)		Maturity Date (3)		Payment Terms (4)
Senior Mortgage Loans:
Residential/Condo	NY	$189.5	$140.2	S+8.95%	—%	(5)	Dec 2026		I/O
Office	IL	169.0	136.3	(6)	—%	(6)	Jul 2026	(6)	I/O
Multifamily	NY	132.2	131.8	S+3.90%	7.8%		Jun 2027	(7)	I/O
Industrial	GA	96.9	96.1	S+2.25%	6.3%		Oct 2028		I/O
Multifamily	NY	84.0	83.1	S+2.45%	6.5%		Mar 2029		I/O
Office	NC	72.7	72.7	S+3.65%	7.3%		Aug 2028		I/O
Self Storage	Diversified	70.6	70.0	S+2.50%	6.5%		Dec 2028		I/O
Multifamily	TX	67.4	67.2	S+2.95%	7.2%		Dec 2026	(8)	P/I	(9)
Retail	CA	67.3	66.6	S+2.75%	6.8%		Mar 2029		I/O
Office	AZ	65.0	65.0	S+2.00%	5.7%		Oct 2027	(10)	I/O
Office	NY	65.0	65.0	S+2.65%	6.3%		Jul 2028		I/O
Self Storage	Diversified	65.0	64.3	S+2.70%	6.7%		May 2029		I/O
Multifamily	OH	57.3	57.2	S+3.05%	7.1%		Oct 2026		I/O
Hotel	NY	55.7	55.6	S+4.40%	8.3%		Mar 2027	(11)	I/O
Industrial	CA	55.2	54.8	S+3.00%	7.0%		Nov 2028		I/O
Office	IL	53.7	53.7	S+4.25%	8.0%		Jan 2027		P/I	(9)
Multifamily	NC	50.0	49.7	S+2.40%	6.6%		Oct 2027		I/O
Multifamily	MA	49.0	48.6	S+3.10%	7.3%		Oct 2027		I/O
Hotel	SC	48.3	47.9	S+3.50%	7.6%		Nov 2028		I/O
Industrial	MA	45.6	45.5	S+2.90%	6.7%		Jun 2028		I/O
Hotel	CA	35.0	34.7	S+2.95%	7.1%		Jun 2028		I/O
Mixed-Use	NY	29.9	29.5	S+3.25%	7.8%		Jan 2028		I/O
Industrial	NJ	27.8	27.8	S+8.85%	12.5%		Nov 2024	(12)	I/O
Hotel	Diversified	23.9	23.7	S+3.75%	7.8%		Nov 2028		I/O
Multifamily	TN	22.6	22.3	S+2.55%	6.6%		May 2029		I/O
Hotel	FL	19.4	19.2	S+3.35%	7.4%		Dec 2028		I/O
Multifamily	TX	18.2	18.2	S+2.60%	6.5%		Jul 2026	(13)	I/O
Self Storage	FL	12.3	12.3	S+3.25%	7.0%		Dec 2027		I/O
Self Storage	IN	11.4	11.4	S+3.60%	7.5%		Aug 2026	(14)	I/O
Self Storage	AZ	10.8	10.8	S+3.25%	7.2%		Feb 2028		I/O
Self Storage	FL	9.6	9.6	S+3.75%	7.5%		Jun 2028		I/O
Self Storage	PA	8.9	8.9	S+3.50%	7.5%		May 2028		I/O
Office	Diversified	7.9	7.9	S+3.75%	12.4%		Jul 2026		P/I	(9)
Self Storage	MA	7.7	7.7	S+3.00%	6.9%		Nov 2026		I/O
Self Storage	FL	7.1	7.1	S+3.50%	7.5%		Apr 2028		I/O
Industrial	CA	7.0	7.0	S+3.85%	7.5%		Jan 2027	(15)	I/O

Subordinated Debt and Preferred Equity Investments:
Industrial	CA	12.6	10.9	S+3.85%	—%	(15)	Jan 2027		I/O
Office	AZ	8.7	8.5	(10)	6.6%		Oct 2027	(10)	I/O









Total/Weighted Average		$1,840.2	$1,748.8		5.7%

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(1)The difference between the Carrying Value and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discounts, deferred loan fees and origination costs and cost-recovery proceeds. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 12 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Value and Outstanding Principal held by the Company is reflected.

(2)Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on SOFR as of June 30, 2026 or the SOFR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of June 30, 2026 as weighted by the outstanding principal balance of each loan.

(3)Reflects the initial loan maturity date excluding any contractual extension options. Certain loans are subject to contractual extension options that generally vary between one and two 12-month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.

(4)I/O = interest only, P/I = principal and interest.

(5)The New York loan is structured as both a senior and mezzanine loan with the Company holding contiguous positions. The senior and mezzanine positions each have a per annum interest rate of S + 8.95%. The senior and mezzanine loans were both on non-accrual status as of June 30, 2026 and the Unleveraged Effective Yield is not applicable.

(6)The Illinois loan is structured as both a senior and mezzanine loan with the Company holding contiguous positions. The senior position has a per annum interest rate of S + 2.25% and the mezzanine position has a fixed per annum interest rate of 10.00%. The senior and mezzanine loans were both on non-accrual status as of June 30, 2026 and the Unleveraged Effective Yield is not applicable. In January 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the Illinois loan from January 2026 to April 2026. Further, in April 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the Illinois loan from April 2026 to July 2026. For the three and six months ended June 30, 2026, the Company received $1.7 million and $3.3 million, respectively, of interest payments in cash on the senior loan that was recognized as a reduction to the Carrying Value of the loan and the borrower is current on all contractual interest payments.

(7)In June 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior New York loan from June 2026 to June 2027.

(8)In January 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Texas loan from January 2026 to December 2026.

(9)In February 2023, amortization began on the senior diversified loan, which had an outstanding principal balance of $7.9 million as of June 30, 2026. In January 2026, amortization began on both the senior Texas loan and the senior Illinois loan, which had outstanding principal balances of $67.4 million and $53.7 million, respectively, as of June 30, 2026. The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms.

(10)The Arizona loan is structured as a senior A-Note with an outstanding principal balance of $65.0 million, a subordinated B-Note with no initial outstanding principal balance and an unfunded commitment of $12.0 million for certain lender approved leasing costs and a subordinated C-Note with an outstanding principal balance of $8.7 million. The subordinated B-Note is pari-passu with new borrower contributions for the loan principal paydown and other additional capital contributions. The subordinated C-Note is subordinate to the A-Note, B-Note and the new borrower contributions. The senior A-Note has a per annum interest rate of S + 2.00%, the subordinated B-Note has a fixed per annum interest rate of 12.00% and the subordinated C-Note has a fixed per annum interest rate of 5.50%. As of June 30, 2026, the borrower is current on all contractual interest payments for the senior A-Note and the subordinated C-Note.

(11)In March 2026, the borrower exercised a 12-month extension option in accordance with the loan agreement, which extended the maturity date on the senior New York loan to March 2027.

(12)As of June 30, 2026, the senior New Jersey loan, which is collateralized by an industrial property, is in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the November 2024 maturity date and the borrower is current on all contractual interest payments.

(13)In January 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Texas loan from January 2026 to May 2026. Further, in June 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Texas loan from May 2026 to July 2026.

(14)In June 2026, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Indiana loan from June 2026 to August 2026.

(15)The California loan is structured as a senior A-Note, with an outstanding principal balance of $7.0 million as of June 30, 2026, a subordinated B-Note with no outstanding principal balance and an unfunded commitment of $500 thousand for certain lender approved leasing costs and a subordinated C-Note with an outstanding principal balance of $12.6 million as of June 30, 2026. The subordinated B-Note and C-Note are subordinate to new borrower equity related to additional capital contributions. As of June 30, 2026, the subordinated C-Note was on non-accrual status and therefore, the Unleveraged Effective Yield is not applicable. As of June 30, 2026, the borrower is current on all contractual interest payments for the senior A-Note and the subordinated C-Note.

The Company has made, and may continue to make, modifications to loans, including loans that are in default. Loan terms that may be modified include interest rates, required prepayments, asset release prices, maturity dates, covenants, principal amounts and other loan terms. The terms and conditions of each modification vary based on individual circumstances and are determined on a case-by-case basis. The Company’s Manager monitors and evaluates each of the Company’s loans held for investment and maintains regular communications with borrowers and sponsors regarding the potential impacts of current macroeconomic conditions on the Company’s loans.

For the six months ended June 30, 2026, the activity in the Company’s loan portfolio was as follows ($ in thousands):










Balance at December 31, 2025	$	1,528,806
Initial funding	309,234
Origination and other loan fees and discounts, net of costs	(4,392)
Additional funding	30,363
Amortizing payments	(5,398)
Loan payoffs (1)	(112,252)




Origination and other loan fees and discount accretion	2,474
Balance at June 30, 2026	$	1,748,835

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(1)In March 2026, the Company received a discounted payoff on a senior mortgage loan with outstanding principal of $28.2 million, which was collateralized by a multifamily property located in Pennsylvania, in conjunction with the sale of the multifamily property by the borrower. For the six months ended June 30, 2026, the Company recognized a realized loss of $3.3 million in the Company’s consolidated statements of operations as the Carrying Value of the senior mortgage loan exceeded the net proceeds from the payoff of the loan.

Except as described in the table above listing the Company’s loans held for investment portfolio, as of June 30, 2026, all loans held for investment were paying in accordance with their contractual terms. As of June 30, 2026, the Company had three loans held for investment on non-accrual status with a Carrying Value of $287.3 million. As of December 31, 2025, the Company had four loans held for investment on non-accrual status with a Carrying Value of $308.1 million.