v3.26.3
Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Recorded at Fair Value on Recurring Basis
The carrying values and fair values of KREF’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 September 30, 2026, were as follows:

Fair Value
Principal BalanceAmortized CostCarrying ValueLevel 1Level 2Level 3Total
Assets
Cash and cash equivalents$165,883 $165,883 $165,883 $165,883 $— $— $165,883 
Commercial real estate loans, held-for-investment, net3,151,502 3,137,554 2,950,118 — — 2,963,406 2,963,406 
Consolidated variable interest entities assets, CMBS trusts, at fair value1,216,495 1,252,153 1,170,090 — — 1,170,090 1,170,090 
Investments in CMBS securities26,800 26,800 26,800 — — 26,800 26,800 
Foreign currency forward contracts(A)
1,378 1,378 1,378 — 1,378 — 1,378 
Total$4,562,058 $4,583,768 $4,314,269 $165,883 $1,378 $4,160,296 $4,327,557 
Liabilities
Secured financing agreements, net$2,405,602 $2,397,405 $2,397,405 $— $— $2,397,405 $2,397,405 
Secured term loan, net641,875 629,168 629,168 — 624,628 — 624,628 
Consolidated variable interest entities liabilities, CMBS trusts, at fair value1,167,222 1,228,236 1,145,911 — — 1,145,911 1,145,911 
Foreign currency forward contracts(B)
933 933 933 — 933 — 933 
Total$4,215,632 $4,255,742 $4,173,417 $— $625,561 $3,543,316 $4,168,877 

(A)    Included within "Other assets" on the Condensed Consolidated Balance Sheets.
(B)    Included within "Other liabilities" on the Condensed Consolidated Balance Sheets.

The carrying values and fair values of KREF’s financial assets recorded at fair value on a recurring basis, as well as other financial instruments for which fair value is disclosed, as of December 31, 2025, were as follows:

Fair Value
Principal BalanceAmortized CostCarrying ValueLevel 1Level 2Level 3Total
Assets
Cash and cash equivalents$84,617 $84,617 $84,617 $84,617 $— $— $84,617 
Commercial real estate loans, held-for-investment, net5,361,863 5,347,756 5,145,832 — — 5,146,650 5,146,650 
Consolidated variable interest entity assets, CMBS trust, at fair value489,940 488,603 502,751 — — 502,751 502,751 
Total$5,936,420 $5,920,976 $5,733,200 $84,617 $— $5,649,401 $5,734,018 
Liabilities
Secured financing agreements, net$2,871,049 $2,862,689 $2,862,689 $— $— $2,862,689 $2,862,689 
Collateralized loan obligations, net1,198,378 1,198,332 1,198,332 — — 1,189,911 1,189,911 
Secured term loan, net646,750 632,516 632,516 — 651,601 — 651,601 
Consolidated variable interest entity liabilities, CMBS trust, at fair value470,444 479,636 493,680 — — 493,680 493,680 
Foreign currency forward contracts(A)
1,265 1,265 1,265 — 1,265 — 1,265 
Total$5,187,886 $5,174,438 $5,188,482 $— $652,866 $4,546,280 $5,199,146 

(A)    Included within "Other liabilities" on the Condensed Consolidated Balance Sheets.
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table presents the activities of Level 3 financial assets and liabilities recorded at fair value:
Consolidated variable interest entities assets, CMBS trusts, at fair valueConsolidated variable interest entities liabilities, CMBS trusts, at fair valueNet
Balance as of December 31, 2025
$505,230 $496,060 $9,170 
Purchases and repayments
Purchases14,950 — 14,950 
Consolidation of CMBS trust751,378 751,378 — 
Repayments(2,778)(2,778)— 
Gains (losses) included in net income
Unrealized gain (loss) included in change in net assets of consolidated variable interest entities, CMBS trusts
(96,209)(96,369)160 
Other(A)
3,805 3,643 162 
Balance as of September 30, 2026
$1,176,376 $1,151,934 $24,442 

(A)     Primarily consists of changes in accrued interest.
Investments in CMBS Securities
Balance as of December 31, 2025
$— 
Purchases and repayments
Purchases26,800 
Repayments— 
Gains (losses) included in net income
Unrealized gain (loss) on investments in CMBS securities
— 
Balance as of September 30, 2026
$26,800 
Schedule of Fair Value Level 3 Inputs, Liabilities
The following table contains the Level 3 inputs used to value assets and liabilities on a recurring and nonrecurring basis or where KREF discloses fair value as of September 30, 2026:
Fair ValueValuation MethodologiesUnobservable Inputs
Weighted Average(A)
Range
Assets
Commercial real estate loans$2,963,406 Discounted cash flowDiscount margin3.5%
2.3% - 5.5%
Capitalization rate12.0%
5.7% - 13.3%
Discount rate13.4%
13.0% - 13.6%
Direct Capitalization Capitalization Rate5.7%5.7%
Consolidated variable interest entities assets, CMBS trusts, at fair value1,170,090 Discounted cash flowYield6.7%
5.0% - 35.5%
Duration (years)6.7
1.5 - 7.3
Investments in CMBS securities
26,800 Yield11.2%
10.7% - 11.7%
Duration (years)3.4
3.3 - 3.4
Liabilities
Consolidated variable interest entities liabilities, CMBS trusts, at fair value$1,145,911 Discounted cash flowYield6.7%
5.0% - 35.5%
Duration (years)6.7
1.5 - 7.3

(A)    Represents the average of the input value, weighted by the unpaid principal balance of the financial instrument.