Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2026

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of June 30, 2026 (in thousands):


		Carrying				Fair Value
		Value				Level 1				Level 2				Level 3				Total
Assets
Cash and cash equivalents		$	6,379			$	6,379			$	—			$	—			$	6,379
Restricted cash			131,851				131,851				—				—				131,851
Loans, held-for-investment, net			740,337				—				—				756,962				756,962
Preferred stock investments, at fair value			158,231												158,231				158,231
Common stock investments, at fair value			56,670				—				—				56,670				56,670
Equity method investments			—				—				—				—				—
Mortgage loans, held-for-investment, net			68,250				—				—				66,955				66,955
Accrued interest			56,582				56,582				—				—				56,582
Mortgage loans held in variable interest entities, at fair value			3,815,226				—				3,811,778				3,448				3,815,226
CMBS structured pass-through certificates, at fair value			36,238				—				36,238				—				36,238
Stock warrant investments, at fair value			132,540				—				—				132,540				132,540
Accounts receivable and other assets			1,506				1,506				—				—				1,506
		$	5,203,810			$	196,318			$	3,848,016			$	1,174,806			$	5,219,140

Liabilities
Secured financing agreements, net		$	480,396			$	—			$	—			$	467,962			$	467,962
Master repurchase agreements			152,190				—				—				152,190				152,190
Unsecured notes, net			51,065				—				53,156				—				53,156
Mortgages payable, net			146,474				—				—				143,918				143,918
Accounts payable and other accrued liabilities			15,690				15,690				—				—				15,690
Accrued interest payable			13,357				13,357				—				—				13,357
Bonds payable held in variable interest entities, at fair value			3,646,077				—				3,646,077				—				3,646,077
		$	4,505,249			$	29,047			$	3,699,233			$	764,070			$	4,492,350

The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of December 31, 2025 (in thousands):


		Carrying				Fair Value
		Value				Level 1				Level 2				Level 3				Total
Assets
Cash and cash equivalents		$	31,114			$	31,114			$	—			$	—			$	31,114
Restricted cash			3,240				3,240				—				—				3,240
Loans, held-for-investment, net			619,560				—				—				651,395				651,395
Preferred stock investments, at fair value			157,893												157,893				157,893
Common stock investments, at fair value			49,104				—				—				49,104				49,104
Equity method investments			1,714				—				—				1,714				1,714
Mortgage loans, held-for-investment, net			121,239				—				—				119,991				119,991
Accrued interest			54,009				54,009				—				—				54,009
Mortgage loans held in variable interest entities, at fair value			3,987,281				—				3,983,276				4,005				3,987,281
CMBS structured pass-through certificates, at fair value			40,427				—				40,427				—				40,427
Stock warrant investments			141,186				—				—				141,186				141,186
Accounts receivable and other assets			551				551				—				—				551
		$	5,207,318			$	88,914			$	4,023,703			$	1,125,288			$	5,237,905

Liabilities
Secured financing agreements, net		$	176,141			$	—			$	—			$	156,743			$	156,743
Master repurchase agreements			258,038				—				—				258,038				258,038
Unsecured notes, net			229,112				—				226,731				—				226,731
Mortgages payable, net			106,151				—				—				103,472				103,472
Accounts payable and other accrued liabilities			13,699				13,699				—				—				13,699
Accrued interest payable			13,795				13,795				—				—				13,795
Bonds payable held in variable interest entities, at fair value			3,692,390				—				3,692,390				—				3,692,390
		$	4,489,326			$	27,494			$	3,919,121			$	518,253			$	4,464,868

Schedule of Fair Value Measurement Inputs and Valuation Techniques

Management elected the fair value option to account for the Company's Level 3 assets as of June 30, 2026 (dollars in thousands):


		Carrying Value				Valuation Technique		Unobservable Inputs		Range		Weighted Average (1)
NexPoint Storage Partners		$	27,378			Discounted cash flow		Terminal cap rate		5.13% - 5.63%			5.38	%
								Discount rate		7.00% - 9.00%			8.00	%
NSP Series G Preferred Stock		$	3,391			Transaction Indication of Value		Recent transaction
IQHQ Series D Preferred Stock		$	18,643			Discounted cash flow		Discount rate		15.50% - 17.00%			16.25	%
IQHQ Series E Preferred Stock		$	136,197			Discounted cash flow		Discount rate		16.01% - 17.51%			16.76	%
Private REIT		$	29,292			Market approach		NAV per share multiple		0.90x - 1.10x			1.00	x
FREMF 2020-KF81 C		$	3,448			Market approach		Fair value of the collateral/appraisals		(2)			146,170
IQHQ Warrants		$	132,540			Market approach		Marketability discount		16.50% - 27.50%			22.00	%

(1)

Averages are weighted based on the fair value of the related instrument.

(2)

The average appraised value of the properties in the underlying loan pool.

The following is a summary of significant unobservable inputs used in the fair valuation of the Company's Level 3 assets carried at fair value on the Consolidated Balance Sheets as of December 31, 2025 (dollars in thousands):


		Carrying Value				Valuation Technique		Unobservable Inputs		Range		Weighted Average (1)
NexPoint Storage Partners		$	24,761			Discounted cash flow		Terminal cap rate		5.00% - 5.50%			5.25	%
								Discount rate		7.00% - 9.00%			8.00	%
NSP Series G Preferred Stock		$	3,161			Transaction Indication of Value		Recent transaction
IQHQ Series D Preferred Stock		$	18,616			Discounted cash flow		Discount rate		15.50% - 17.50%			16.00	%
IQHQ Series E Preferred Stock		$	136,115			Discounted cash flow		Discount rate		16.01% - 17.51%			16.76	%
Private REIT		$	24,343			Market approach		NAV per share multiple		0.85 - 1.05x			0.95	x
FREMF 2020-KF81 C		$	4,005			Market approach		Fair value of the collateral/appraisals		(2)			187,000
IQHQ Warrants		$	141,186			Market approach		Marketability discount		27.50% - 48.50%			38.00	%

(1)

Averages are weighted based on the fair value of the related instrument.

(2)

The average appraised value of the properties in the underlying loan pool.

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below reflects a summary of changes for the Company's Level 3 common and preferred stock assets carried at fair value on the Consolidated Balance Sheets for the six months ended June 30, 2026:


		Balances as of December 31, 2025				Additions				Change in Unrealized Gains/(Losses)				Balances as of June 30, 2026
NexPoint Storage Partners		$	24,761				1,500			$	1,117			$	27,378
Private REIT			24,343				—				4,949				29,292
IQHQ Series D Preferred Stock			18,617				—				26				18,643
IQHQ Series E Preferred Stock			136,115				—				82				136,197
NSP Series G Preferred Stock			3,161				230				—				3,391
FREMF 2020-KF81 C			4,005				—				(557	)			3,448
IQHQ Warrants			141,186				—				(8,646	)			132,540

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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