| Loans Held for Investment, Net |
3. Loans Held for Investment, Net The Company’s investments in mortgage loans, mezzanine loans, preferred equity, promissory notes and revolving credit facilities are accounted for as loans held for investment. The mortgage loans are presented as “Mortgage loans, held-for-investment, net” and the mezzanine loans, preferred equity, promissory notes and revolving credit facilities are presented as “Loans, held-for-investment, net” on the Consolidated Balance Sheets. The following tables summarize our loans held-for-investment as of June 30, 2026 and December 31, 2025, respectively (dollars in thousands):
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|
|
|
|
|
|
|
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|
|
|
|
|
|
Weighted Average |
|
Loan Type |
|
Outstanding
Face Amount |
|
|
Carrying
Value (1) |
|
|
Loan
Count |
|
|
Fixed
Rate (2) |
|
|
Coupon (3) |
|
|
Life
(years) (4) |
|
June 30, 2026 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans, held-for-investment |
|
$ |
66,322 |
|
|
$ |
68,250 |
|
|
|
6 |
|
|
|
100.00 |
% |
|
|
5.57 |
% |
|
|
2.3 |
|
Mezzanine loans, held-for-investment |
|
|
268,886 |
|
|
|
262,004 |
|
|
|
22 |
|
|
|
49.32 |
% |
|
|
11.59 |
% |
|
|
1.8 |
|
Preferred equity, held-for-investment |
|
|
295,940 |
|
|
|
279,037 |
|
|
|
20 |
|
|
|
57.71 |
% |
|
|
11.08 |
% |
|
|
1.9 |
|
Promissory notes, held-for-investment |
|
|
23,470 |
|
|
|
23,173 |
|
|
|
2 |
|
|
|
100.00 |
% |
|
|
14.53 |
% |
|
|
2.7 |
|
Revolving credit facility, held-for-investment |
|
|
184,142 |
|
|
|
176,123 |
|
|
|
2 |
|
|
|
100.00 |
% |
|
|
13.13 |
% |
|
|
2.2 |
|
|
|
$ |
838,760 |
|
|
$ |
808,587 |
|
|
|
52 |
|
|
|
68.83 |
% |
|
|
11.36 |
% |
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
Loan Type |
|
Outstanding
Face Amount |
|
|
Carrying
Value (1) |
|
|
Loan
Count |
|
|
Fixed
Rate (2) |
|
|
Coupon (3) |
|
|
Life
(years) (4) |
|
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans, held-for-investment |
|
$ |
118,550 |
|
|
$ |
121,239 |
|
|
|
9 |
|
|
|
100.00 |
% |
|
|
5.31 |
% |
|
|
1.9 |
|
Mezzanine loans, held-for-investment |
|
|
229,927 |
|
|
|
220,814 |
|
|
|
22 |
|
|
|
43.35 |
% |
|
|
10.18 |
% |
|
|
2.6 |
|
Preferred equity, held-for-investment |
|
|
261,175 |
|
|
|
244,959 |
|
|
|
20 |
|
|
|
54.84 |
% |
|
|
10.92 |
% |
|
|
2.8 |
|
Promissory notes, held-for-investment |
|
|
15,500 |
|
|
|
15,459 |
|
|
|
2 |
|
|
|
100.00 |
% |
|
|
13.65 |
% |
|
|
0.6 |
|
Revolving credit facility, held-for-investment |
|
|
148,600 |
|
|
|
138,328 |
|
|
|
1 |
|
|
|
100.00 |
% |
|
|
13.50 |
% |
|
|
2.0 |
|
|
|
$ |
773,752 |
|
|
$ |
740,799 |
|
|
|
54 |
|
|
|
67.92 |
% |
|
|
10.40 |
% |
|
|
2.4 |
|
(1)Carrying value includes the outstanding face amount plus unamortized purchase premiums/discounts and any allowance for loan losses. (2)The weighted-average of loans paying a fixed rate is weighted on current principal balance. (3)The weighted-average coupon is weighted on outstanding face amount. (4)The weighted-average life is weighted on outstanding face amount and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset. For the six months ended June 30, 2026 and 2025, the loans held for investment, net and preferred equity portfolio activity was as follows (in thousands):
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|
For the Six Months Ended June 30, |
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|
2026 |
|
|
2025 |
|
Balances, January 1, |
|
$ |
740,799 |
|
|
$ |
760,939 |
|
Originations |
|
|
157,006 |
|
|
|
33,586 |
|
Proceeds from principal repayments |
|
|
(116,710 |
) |
|
|
(39,671 |
) |
PIK distribution reinvested in Preferred Units |
|
|
41,438 |
|
|
|
6,355 |
|
Amortization of loan premium, net (1) |
|
|
1,677 |
|
|
|
1,490 |
|
(Provision for) reversal of credit losses |
|
|
2,210 |
|
|
|
(8,909 |
) |
Write-offs related to real estate owned consolidations |
|
|
(6,073 |
) |
|
|
— |
|
Decrease in loans held for investment, net of consolidation of real estate |
|
|
(11,760 |
) |
|
|
— |
|
Balances, June 30, |
|
$ |
808,587 |
|
|
$ |
753,790 |
|
(1)Includes net amortization of loan purchase premiums. As of June 30, 2026 and December 31, 2025, there were $6.1 million and $6.3 million of unamortized premiums on loans, held-for-investment, net, respectively, on the Consolidated Balance Sheets. As discussed in Note 2, the Company evaluates loans classified as held-for-investment on a loan-by-loan basis every quarter. In conjunction with the review of the portfolio, the Company assesses the risk factors of each loan and assigns a risk rating based on a variety of factors. Loans are rated “1” through “5,” from least risk to greatest risk, respectively. See Note 2 for a more detailed discussion of the risk factors and ratings. The following tables allocate the principal balance and net book value of the loan portfolio based on our internal risk ratings (dollars in thousands):
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|
June 30, 2026 |
|
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|
Number of |
|
|
Carrying |
|
|
% of Loan |
|
Risk Rating |
|
Loans |
|
|
Value |
|
|
Portfolio |
|
1 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
3 |
|
|
47 |
|
|
|
801,693 |
|
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|
99.15 |
% |
4 |
|
|
3 |
|
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|
6,894 |
|
|
|
0.85 |
% |
5 |
|
|
2 |
|
|
|
— |
|
|
|
— |
% |
|
|
|
52 |
|
|
$ |
808,587 |
|
|
|
100.00 |
% |
|
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|
December 31, 2025 |
|
|
|
Number of |
|
|
Carrying |
|
|
% of Loan |
|
Risk Rating |
|
Loans |
|
|
Value |
|
|
Portfolio |
|
1 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
3 |
|
|
50 |
|
|
|
729,529 |
|
|
|
98.48 |
% |
4 |
|
|
1 |
|
|
|
1,397 |
|
|
|
0.19 |
% |
5 |
|
|
3 |
|
|
|
9,873 |
|
|
|
1.33 |
% |
|
|
|
54 |
|
|
$ |
740,799 |
|
|
|
100.00 |
% |
Our loan portfolio had a weighted-average risk rating of 3.0 as of June 30, 2026 and December 31, 2025, respectively. The following tables present the carrying value of the loan portfolio by the Company's internal risk rating and year of origination as of June 30, 2026 and December 31, 2025 (dollars in thousands):
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|
June 30, 2026 |
|
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|
Number of |
|
|
Outstanding |
|
|
Carrying Value by Year of Origination (1) |
|
Risk Rating |
|
Loans |
|
|
Face Amount |
|
|
2026 |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
Prior |
|
|
Total |
|
1 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
3 |
|
|
47 |
|
|
|
816,593 |
|
|
|
92,598 |
|
|
|
33,020 |
|
|
|
305,066 |
|
|
|
89,625 |
|
|
|
61,449 |
|
|
|
219,935 |
|
|
|
801,693 |
|
4 |
|
|
3 |
|
|
|
9,883 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,693 |
|
|
|
1,201 |
|
|
|
6,894 |
|
5 |
|
|
2 |
|
|
|
12,284 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
52 |
|
|
$ |
838,760 |
|
|
$ |
92,598 |
|
|
$ |
33,020 |
|
|
$ |
305,066 |
|
|
$ |
89,625 |
|
|
$ |
67,142 |
|
|
$ |
221,136 |
|
|
$ |
808,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
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|
|
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|
December 31, 2025 |
|
|
|
Number of |
|
|
Outstanding |
|
|
Carrying Value by Year of Origination (1) |
|
Risk Rating |
|
Loans |
|
|
Face Amount |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
Prior |
|
|
Total |
|
1 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
3 |
|
|
50 |
|
|
|
747,367 |
|
|
|
50,740 |
|
|
|
265,929 |
|
|
|
83,312 |
|
|
|
65,363 |
|
|
|
35,084 |
|
|
|
229,101 |
|
|
|
729,529 |
|
4 |
|
|
1 |
|
|
|
1,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,397 |
|
|
|
1,397 |
|
5 |
|
|
3 |
|
|
|
24,884 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,873 |
|
|
|
— |
|
|
|
9,873 |
|
|
|
|
54 |
|
|
$ |
773,751 |
|
|
$ |
50,740 |
|
|
$ |
265,929 |
|
|
$ |
83,312 |
|
|
$ |
65,363 |
|
|
$ |
44,957 |
|
|
$ |
230,498 |
|
|
$ |
740,799 |
|
(1)Represents the date a loan was originated or acquired. The following tables present the geographies and property types of collateral underlying the Company’s loans held-for-investment as a percentage of the loans’ face amounts.
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|
Geography |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Massachusetts |
|
|
26.21 |
% |
|
|
17.57 |
% |
Texas |
|
|
11.90 |
% |
|
|
15.22 |
% |
Georgia |
|
|
5.96 |
% |
|
|
10.41 |
% |
Florida |
|
|
7.94 |
% |
|
|
8.19 |
% |
Maryland |
|
|
7.53 |
% |
|
|
7.75 |
% |
California |
|
|
6.00 |
% |
|
|
5.88 |
% |
Virginia |
|
|
5.77 |
% |
|
|
5.67 |
% |
Other (22 and 22 states each at <4%) |
|
|
28.69 |
% |
|
|
29.31 |
% |
|
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
Collateral Property Type |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
Life Science |
|
|
39.75 |
% |
|
|
28.07 |
% |
Multifamily |
|
|
29.37 |
% |
|
|
30.94 |
% |
Single Family Rental |
|
|
19.25 |
% |
|
|
27.92 |
% |
Self-Storage |
|
|
5.40 |
% |
|
|
4.49 |
% |
Marina |
|
|
2.67 |
% |
|
|
4.91 |
% |
Industrial |
|
|
3.56 |
% |
|
|
3.67 |
% |
|
|
|
100.00 |
% |
|
|
100.00 |
% |
|