Loans Held for Investment and the Allowance for Credit Losses (Tables)
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9 Months Ended |
Sep. 30, 2026 |
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| Receivables [Abstract] |
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| Schedule of Overall Statistics for Loan Held for Investment Portfolio |
The following table details overall statistics for the Company's loans held for investment portfolio (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2026 | | December 31, 2025 | | | | | | Balance sheet portfolio | | Total loan exposure(1) | | Balance sheet portfolio | | Total loan exposure(1) | | Number of loans | | | | | 59 | | 59 | | 50 | | 50 | | Floating rate loans | | | | | 99.7 | % | | 99.7 | % | | 99.7 | % | | 99.7 | % | | Total loan commitment | | | | | $ | 5,168,717 | | $ | 5,168,717 | | $ | 4,290,603 | | $ | 4,290,603 | Unpaid principal balance(2) | | | | | $ | 4,934,450 | | $ | 4,934,450 | | $ | 4,118,050 | | $ | 4,118,050 | Unfunded loan commitments(3) | | | | | $ | 236,552 | | $ | 236,552 | | $ | 173,595 | | $ | 173,595 | | Amortized cost | | | | | $ | 4,916,375 | | $ | 4,916,375 | | $ | 4,103,022 | | $ | 4,103,022 | | Weighted average credit spread | | | | | 3.1 | % | | 3.1 | % | | 3.2 | % | | 3.2 | % | Weighted average all-in yield(4) | | | | | 7.3 | % | | 7.3 | % | | 7.1 | % | | 7.1 | % | Weighted average term to extended maturity (in years)(5) | | | | | 3.3 | | 3.3 | | 3.0 | | 3.0 |
_______________________ (1)In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on the Company’s balance sheet. When the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party, the Company retains on its balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio the Company originated, acquired and financed. The Company had no non-consolidated senior interests as of September 30, 2026 and December 31, 2025. As of September 30, 2026, total loan exposure includes one fixed rate contiguous mezzanine loan and one fixed rate subordinate first mortgage loan. As of December 31, 2025, total loan exposure includes one fixed rate contiguous mezzanine loan. (2)Unpaid principal balance includes PIK interest of $2.3 million and $1.0 million as of September 30, 2026 and December 31, 2025, respectively. (3)Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by the Company’s borrowers and to finance operating deficits during renovation and lease-up. (4)As of September 30, 2026, all of the Company's floating rate loans were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount if any, and accrual of both extension and exit fees. All-in yield for the total portfolio assumes Term SOFR as of September 30, 2026 for weighted average calculations. (5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that the Company’s loans may be repaid prior to such date. As of September 30, 2026, based on the unpaid principal balance of the Company’s total loan exposure, 59.5% of the Company’s loans were subject to yield maintenance or other prepayment restrictions and 40.5% were open to repayment by the borrower without penalty.
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| Schedule of Loans Held for Investment Portfolio by Loan Seniority |
The following tables present an overview of the Company’s loans held for investment portfolio by loan seniority (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | September 30, 2026 | | Loans held for investment, net | | Outstanding principal | | Unamortized premium (discount) and
loan origination fees, net | | Amortized cost | Senior loans(1) | | $ | 4,934,450 | | | $ | (18,075) | | | $ | 4,916,375 | | | | | | | | | | Total | | $ | 4,934,450 | | | $ | (18,075) | | | $ | 4,916,375 | | | Allowance for credit losses | | | | | | (73,955) | | | Loans held for investment, net | | | | | | $ | 4,842,420 | |
| | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | Loans held for investment, net | | Outstanding principal | | Unamortized premium (discount) and
loan origination fees, net | | Amortized cost | Senior loans(1) | | $ | 4,118,050 | | | $ | (15,028) | | | $ | 4,103,022 | | | | | | | | | | Total | | $ | 4,118,050 | | | $ | (15,028) | | | $ | 4,103,022 | | | Allowance for credit losses | | | | | | (74,503) | | | Loans held for investment, net | | | | | | $ | 4,028,519 | |
________________________________(1)Senior loans may include contiguous mezzanine loans and pari passu participations in senior mortgage loans.
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| Schedule of Loans Held for Investment Portfolio Activity |
The following table presents the Company’s loans held for investment portfolio activity (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | Amortized cost | | Allowance for credit losses | | Carrying value | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31, 2025 | | $ | 4,103,022 | | | $ | (74,503) | | | $ | 4,028,519 | | | Loans originated and acquired | | 1,266,682 | | | — | | | 1,266,682 | | | Additional fundings | | 100,068 | | | — | | | 100,068 | | | Accrued PIK interest | | 1,243 | | | — | | | 1,243 | | | Amortization of origination fees and discounts | | 5,841 | | | — | | | 5,841 | | | Collection of principal | | (517,649) | | | — | | | (517,649) | | | | | | | | | | | | | | | | | Realized loss on loan write-offs, loan sales, and REO conversions | | (13,006) | | | 13,006 | | | — | | | | | | | | | | Loan extinguishment upon conversion to REO | | (29,826) | | | — | | | (29,826) | | | Allowance for credit losses | | — | | | (12,458) | | | (12,458) | | | Balance as of September 30, 2026 | | $ | 4,916,375 | | | $ | (73,955) | | | $ | 4,842,420 | |
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| Schedule of Amortized Cost and Results of Internal Risk Rating Review Performed for Loans Held for Investment Portfolio |
The following tables present the Company's loans held for investment portfolio on an amortized cost basis by origination year, grouped by risk rating (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2026 | | Amortized cost by origination year | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior | | Total | | Senior loans by internal risk ratings: | | | | | | | | | | | | | | | 1 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 2 | — | | | — | | | 111,367 | | | 61,987 | | | — | | | — | | | 173,354 | | | 3 | 1,273,707 | | | 1,803,325 | | | 427,675 | | | — | | | 455,086 | | | 663,103 | | | 4,622,896 | | | 4 | — | | | — | | | — | | | — | | | — | | | 120,125 | | | 120,125 | | | 5 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total senior loans | $ | 1,273,707 | | | $ | 1,803,325 | | | $ | 539,042 | | | $ | 61,987 | | | $ | 455,086 | | | $ | 783,228 | | | $ | 4,916,375 | | | Senior loans: | | | | | | | | | | | | | | | Current-period realized loss on loan write-offs related to REO conversions | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (13,006) | | | $ | — | | | $ | (13,006) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | Amortized cost by origination year | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior | | Total | | Senior loans by internal risk ratings: | | | | | | | | | | | | | | | 1 | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | 2 | — | | | 110,641 | | | 58,591 | | | — | | | — | | | — | | | 169,232 | | | 3 | 1,771,785 | | | 426,266 | | | 43,121 | | | 452,592 | | | 801,972 | | | 278,108 | | | 3,773,844 | | | 4 | — | | | — | | | — | | | 40,963 | | | — | | | 118,983 | | | 159,946 | | | 5 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Total senior loans | $ | 1,771,785 | | | $ | 536,907 | | | $ | 101,712 | | | $ | 493,555 | | | $ | 801,972 | | | $ | 397,091 | | | $ | 4,103,022 | | | Senior loans: | | | | | | | | | | | | | | | Current-period realized loss on loan write-offs related to REO conversions | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The table below summarizes the Company’s portfolio of loans held for investment on an amortized cost basis, by the results of the Company's internal risk rating review process (dollars in thousands): | | | | | | | | | | | | | | | | Risk rating | | September 30, 2026 | | December 31, 2025 | | 1 | | $ | — | | | $ | — | | | 2 | | 173,354 | | | 169,232 | | | 3 | | 4,622,896 | | | 3,773,844 | | | 4 | | 120,125 | | | 159,946 | | | 5 | | — | | | — | | | Total | | $ | 4,916,375 | | | $ | 4,103,022 | | | Allowance for credit losses | | (73,955) | | | (74,503) | | | Carrying value | | $ | 4,842,420 | | | $ | 4,028,519 | | Weighted average risk rating(1) | | 3.0 | | | 3.0 | |
________________________________ (1)Weighted average risk rating calculated based on the amortized cost balance at period end.
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| Schedule of Activity in Allowance for Credit Losses for Loans Held for Investment |
The following tables present activity in the allowance for credit losses for loans by finance receivable class (dollars in thousands): | | | | | | | | | | | For the Three Months Ended September 30, 2026 | | Senior loans | | | | | | Allowance for credit losses for loans held for investment: | | | | | | Beginning balance at July 1, 2026 | $ | 77,750 | | | | | | | Allowance for credit losses, net | 9,211 | | | | | | | Realized loss on loan write-offs | (13,006) | | | | | | | Subtotal | 73,955 | | | | | | | | | | | | | Allowance for credit losses on unfunded loan commitments: | | | | | | Beginning balance at July 1, 2026 | 2,930 | | | | | | | Reversal of credit losses, net | (742) | | | | | | | Subtotal | 2,188 | | | | | | Total allowance for credit losses(1) | $ | 76,143 | | | | | | | | | | | | | | | | | | | For the Three Months Ended September 30, 2025 | | Senior loans | | | | | | Allowance for credit losses for loans held for investment: | | | | | | Beginning balance at July 1, 2025 | $ | 66,957 | | | | | | | Reversal of credit losses, net | (2,413) | | | | | | | | | | | | | Subtotal | 64,544 | | | | | | | | | | | | | Allowance for credit losses on unfunded loan commitments: | | | | | | Beginning balance at July 1, 2025 | 1,819 | | | | | | | Reversal of credit losses, net | (231) | | | | | | | Subtotal | 1,588 | | | | | | Total allowance for credit losses(1) | $ | 66,132 | | | | | | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2026 | | | | Senior loans | | | | | | Allowance for credit losses for loans held for investment: | | | | | | | Beginning balance at January 1, 2026 | $ | 74,503 | | | | | | | Allowance for credit losses, net | 12,458 | | | | | | | Realized loss on loan write-offs | (13,006) | | | | | | | Subtotal | 73,955 | | | | | | | | | | | | | Allowance for credit losses on unfunded loan commitments: | | | | | | | Beginning balance at January 1, 2026 | 2,920 | | | | | | | Reversal of credit losses, net | (732) | | | | | | | Subtotal | 2,188 | | | | | | Total allowance for credit losses(1) | $ | 76,143 | | | | | | | | | | | |
| | | | | | | | | | | For the Nine Months Ended September 30, 2025 | | | | Senior loans | | | | | | Allowance for credit losses for loans held for investment: | | | | | | | Beginning balance at January 1, 2025 | $ | 61,558 | | | | | | | Allowance for credit losses, net | 2,986 | | | | | | | | | | | | | Subtotal | 64,544 | | | | | | | | | | | | | Allowance for credit losses on unfunded loan commitments: | | | | | | | Beginning balance at January 1, 2025 | 2,415 | | | | | | | Reversal of credit losses, net | (827) | | | | | | | Subtotal | 1,588 | | | | | | Total allowance for credit losses(1) | $ | 66,132 | | | | | |
________________________________(1)Excludes $0.8 million and $0.7 million of allowance for credit losses on exit fees receivable related to the Company's loans held for investment portfolio as of September 30, 2026 and September 30, 2025, respectively. Such amounts are recorded within Accrued interest and fees receivable on the Company's consolidated balance sheet and Credit loss expense, net on the Company's consolidated statements of income and comprehensive income. The following table presents the allowance for credit losses for loans held for investment (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | September 30, 2026 | | | General reserve | | Specific reserve | | Total reserve | | Allowance for credit losses: | | | | | | | | Loans held for investment | | $ | 73,955 | | | $ | — | | | $ | 73,955 | | | Unfunded loan commitments | | 2,188 | | | — | | | 2,188 | | Total allowance for credit losses(1) | | $ | 76,143 | | | $ | — | | | $ | 76,143 | | | Total unpaid principal balance | | $ | 4,934,450 | | | $ | — | | | $ | 4,934,450 | | | | | | | | | | | December 31, 2025 | | | General reserve | | Specific reserve | | Total reserve | | Allowance for credit losses: | | | | | | | | Loans held for investment | | $ | 74,503 | | | $ | — | | | $ | 74,503 | | | Unfunded loan commitments | | 2,920 | | | — | | | 2,920 | | Total allowance for credit losses(1) | | $ | 77,423 | | | $ | — | | | $ | 77,423 | | | Total unpaid principal balance | | $ | 4,118,050 | | | $ | — | | | $ | 4,118,050 | |
________________________________ (1)Excludes $0.8 million and $0.6 million of allowance for credit losses on exit fees receivable related to the Company's loans held for investment portfolio as of September 30, 2026 and December 31, 2025, respectively. Such amounts are recorded within Accrued interest and fees receivable on the Company's consolidated balance sheet and Credit loss expense, net on the Company's consolidated statements of income and comprehensive income.
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| Schedule of Aging Analysis for Loans Held for Investment Portfolio by Class of Loans |
The following table presents an aging analysis for the Company’s portfolio of loans held for investment, by class of loans on amortized cost basis (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Days Outstanding as of September 30, 2026 | | | | | | Current | | Days: 30-59 | | Days: 60-89 | | Days: 90 or more | | Total loans past due | | Total loans | | Loans receivable: | | | | | | | | | | | | | Senior loans | $ | 4,916,375 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,916,375 | | | | | | | | | | | | | | | Total | $ | 4,916,375 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,916,375 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Days Outstanding as of December 31, 2025 | | | | | | Current | | Days: 30-59 | | Days: 60-89 | | Days: 90 or more | | Total loans past due | | Total loans | | Loans receivable: | | | | | | | | | | | | | Senior loans | $ | 4,103,022 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,103,022 | | | | | | | | | | | | | | | Total | $ | 4,103,022 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,103,022 | |
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| Schedule of Paid-in-Kind Interest |
The following table presents the accrued PIK interest activity for the Company’s loans held for investment portfolio (dollars in thousands): | | | | | | | | | | | September 30, 2026 | | | Balance as of January 1, 2026 | $ | 1,042 | | | | | Accrued PIK interest | 181 | | | | | | | | Balance as of March 31, 2026 | $ | 1,223 | | | | | Accrued PIK interest | 179 | | | | | | | | | | | | Balance as of June 30, 2026 | $ | 1,402 | | | | | Accrued PIK interest | 883 | | | | | | | | | | | | Balance as of September 30, 2026 | $ | 2,285 | | | | | | | | | | | | | | | | | | | |
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