Use of Special Purpose Entities (SPE) and Variable Interest Entities (VIE) (Tables)

9 Months Ended

Sep. 30, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Multi-family loans consist of the following as of September 30, 2026 and December 31, 2025, respectively (dollar amounts in thousands):


	September 30, 2026		December 31, 2025
Investment amount	$	37,103	$	59,102
Unrealized losses, net	(235)		(3,626)
Total, at Fair Value	$	36,868	$	55,476

During the nine months ended September 30, 2025, the Company invested in subordinated securities issued by a Freddie Mac-sponsored residential loan securitization, resulting in the initial consolidation of the VIE as shown below (dollar amounts in thousands):


	For the Nine Months Ended September 30, 2025
Residential loans, at fair value	$	247,405
Collateralized debt obligations, at fair value	(235,226)
Net investment	$	12,179

The following tables present condensed statements of operations for non-Company-sponsored VIEs for the three and nine months ended September 30, 2026 and 2025, respectively (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation.


	For the Three Months Ended September 30,
	2026						2025
	Consolidated SLST		Consolidated Real Estate		Total		Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	13,272	$	—	$	13,272	$	14,306	$	—	$	14,306
Interest expense	10,705		—		10,705		11,199		—		11,199
Total net interest income	2,567		—		2,567		3,107		—		3,107

Income from real estate	—		11,027		11,027		—		17,123		17,123
Expenses related to real estate	—		13,456		13,456		—		19,943		19,943
Total net loss from real estate	—		(2,429)		(2,429)		—		(2,820)		(2,820)


Unrealized (losses) gains, net	(11,638)		—		(11,638)		2,440		—		2,440
Gains on derivative instruments, net	—		148		148		—		8		8


Other income	—		37		37		—		138		138
Total other (loss) income	(11,638)		185		(11,453)		2,440		146		2,586



Net (loss) income	(9,071)		(2,244)		(11,315)		5,547		(2,674)		2,873
Net loss attributable to non-controlling interest in Consolidated VIEs	—		2,996		2,996		—		5,035		5,035
Net (loss) income attributable to Company	$	(9,071)	$	752	$	(8,319)	$	5,547	$	2,361	$	7,908


	For the Nine Months Ended September 30,
	2026						2025
	Consolidated SLST		Consolidated Real Estate		Total		Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	40,758	$	—	$	40,758	$	36,936	$	—	$	36,936
Interest expense	32,790		—		32,790		26,592		—		26,592
Total net interest income	7,968		—		7,968		10,344		—		10,344

Income from real estate	—		35,507		35,507		—		53,999		53,999
Expenses related to real estate	—		41,622		41,622		—		60,631		60,631
Total net loss from real estate	—		(6,115)		(6,115)		—		(6,632)		(6,632)

Realized losses, net	(106)		—		(106)		—		—		—
Unrealized (losses) gains, net	(13,593)		—		(13,593)		11,225		—		11,225
Gains on derivative instruments, net	—		479		479		—		54		54
Impairment of real estate	—		—		—		—		(7,180)		(7,180)
Other income	—		51,719		51,719		—		141		141
Total other (loss) income	(13,699)		52,198		38,499		11,225		(6,985)		4,240



Net (loss) income	(5,731)		46,083		40,352		21,569		(13,617)		7,952
Net (income) loss attributable to non-controlling interest in Consolidated VIEs	—		(32,840)		(32,840)		—		14,231		14,231
Net (loss) income attributable to Company	$	(5,731)	$	13,243	$	7,512	$	21,569	$	614	$	22,183

Schedule of Assets and Liabilities of Consolidated VIE's

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company's securitizations, Consolidated SLST and Consolidated Real Estate VIEs as of September 30, 2026 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation.


			Other VIEs
	Financing VIEs		Consolidated SLST		Consolidated Real Estate		Total
Cash and cash equivalents	$	—	$	—	$	3,718	$	3,718
Investment securities available for sale, at fair value	11,927		—		—		11,927
Residential loans, at fair value	2,959,623		1,047,558		—		4,007,181
Real estate, net held in Consolidated VIEs (1)	—		—		338,243		338,243

Other assets	63,691		4,198		12,457		80,346
Total assets	$	3,035,241	$	1,051,756	$	354,418	$	4,441,415

Collateralized debt obligations ($3,463,270 at fair value and $328,681 at amortized cost, net)	$	2,876,253	$	915,698	$	—	$	3,791,951
Mortgages payable on real estate, net in Consolidated VIEs (2)	—		—		274,923		274,923
Other liabilities	14,238		12,642		8,236		35,116
Total liabilities	$	2,890,491	$	928,340	$	283,159	$	4,101,990
Redeemable non-controlling interest in Consolidated VIEs (3)	$	—	$	—	$	80	$	80
Non-controlling interest in Consolidated VIEs (4)	$	—	$	—	$	(3,376)	$	(3,376)
Net investment (5)	$	144,750	$	123,416	$	74,555	$	342,721

(1)Included in real estate, net in the accompanying condensed consolidated balance sheets.

(2)Included in mortgages payable on real estate, net in the accompanying condensed consolidated balance sheets.

(3)Represents redeemable third-party ownership of membership interests in Consolidated Real Estate VIEs. See Redeemable Non-Controlling Interest in Consolidated VIEs below.

(4)Represents third-party ownership of membership interests in Consolidated Real Estate VIEs.

(5)The net investment amount is the maximum amount of the Company's investment that is at risk to loss and represents the difference between the carrying value of total assets and total liabilities held by VIEs, less non-controlling interests, if any.

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company's securitizations, Consolidated SLST and Consolidated Real Estate VIEs as of December 31, 2025 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation.


			Other VIEs
	Financing VIEs		Consolidated SLST		Consolidated Real Estate		Total
Cash and cash equivalents	$	—	$	—	$	3,853	$	3,853
Residential loans, at fair value	2,608,535		1,165,677		—		3,774,212
Real estate, net held in Consolidated VIEs (1)	—		—		424,655		424,655
Other assets	132,428		4,489		27,923		164,840
Total assets	$	2,740,963	$	1,170,166	$	456,431	$	4,367,560

Collateralized debt obligations ($3,148,157 at fair value and $363,645 at amortized cost, net)	$	2,504,883	$	1,006,919	$	—	$	3,511,802
Mortgages payable on real estate, net in Consolidated VIEs (2)	—		—		332,131		332,131
Other liabilities	17,317		10,368		9,655		37,340
Total liabilities	$	2,522,200	$	1,017,287	$	341,786	$	3,881,273
Redeemable non-controlling interest in Consolidated VIEs (3)	$	—	$	—	$	3,016	$	3,016
Non-controlling interest in Consolidated VIEs (4)	$	—	$	—	$	374	$	374
Net investment (5)	$	218,763	$	152,879	$	111,255	$	482,897

(1)Included in real estate, net in the accompanying condensed consolidated balance sheets.

(2)Included in mortgages payable on real estate, net in the accompanying condensed consolidated balance sheets.

(3)Represents redeemable third-party ownership of membership interests in Consolidated Real Estate VIEs. See Redeemable Non-Controlling Interest in Consolidated VIEs below.

(4)Represents third-party ownership of membership interests in Consolidated Real Estate VIEs.

The following table presents the carrying value and estimated fair value of the Company’s financial instruments at September 30, 2026 and December 31, 2025, respectively (dollar amounts in thousands):


		September 30, 2026				December 31, 2025
	Fair Value Hierarchy Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets:
Cash and cash equivalents	Level 1	$	262,360	$	262,360	$	210,333	$	210,333
Investment securities available for sale	Level 2	7,343,161		7,343,161		6,904,781		6,904,781
Residential loans	Level 3	4,788,939		4,788,939		4,358,175		4,358,175
Residential loans held for sale	Level 3	150,969		150,969		80,707		80,707
Multi-family loans	Level 3	36,868		36,868		55,476		55,476
Equity investments	Level 3	17,926		17,926		24,711		24,711
Derivative assets	Level 2	11,114		11,114		31		31
IRLCs	Level 3	279		279		691		691
Mortgage servicing rights	Level 3	18,970		18,970		20,893		20,893
Financial Liabilities:
Repurchase agreements	Level 2	7,460,119		7,460,119		6,753,417		6,753,417
Collateralized debt obligations:
Residential loan securitizations at amortized cost, net	Level 3	328,681		310,791		363,645		349,037
Residential loan securitizations at fair value	Level 2	2,438,853		2,438,853		2,075,962		2,075,962
Consolidated SLST	Level 3	915,698		915,698		1,006,919		1,006,919
Non-Agency RMBS re-securitization	Level 2	108,719		108,719		65,276		65,276
Subordinated debentures	Level 3	45,000		42,031		45,000		40,526
Derivative liabilities	Level 2	14,039		14,039		—		—
Senior unsecured notes:
Senior unsecured notes at amortized cost, net	Level 2	—		—		99,585		99,465
Senior unsecured notes at fair value	Level 2	434,607		434,607		260,852		260,852
Mortgages payable on real estate	Level 3	274,923		263,664		332,131		325,301

Schedule of Redeemable Noncontrolling Interest in Consolidated VIEs

The following table presents activity in redeemable non-controlling interest in Consolidated VIEs for the three and nine months ended September 30, 2026 and 2025, respectively (dollar amounts in thousands):


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2026		2025		2026		2025
Beginning balance	$	2,529	$	12,782	$	3,016	$	12,359

Distributions	(3,823)		(37)		(7,696)		(788)
Net (loss) income attributable to redeemable non-controlling interest in Consolidated VIEs	(2,849)		(4,241)		14,535		(11,966)
Adjustment of redeemable non-controlling interest to estimated redemption value (1)	4,223		5,209		(9,775)		14,108
Ending balance	$	80	$	13,713	$	80	$	13,713

(1)The Company determines the fair value of the redeemable non-controlling interest utilizing market assumptions and discounted cash flows. The Company applies a discount rate to the estimated future cash flows from the multi-family apartment properties held by the applicable Consolidated VIEs that are allocatable to the redeemable non-controlling interest. This fair value measurement is generally based on unobservable inputs and, as such, is classified as Level 3 in the fair value hierarchy. Significant unobservable inputs utilized in the estimation of fair value of redeemable non-controlling interest as of September 30, 2026 include a weighted average capitalization rate of 6.0% (ranges from 5.0% to 6.8%) and a weighted average discount rate of 15.1% (ranges from 14.1% to 15.6%).

Schedule of Classification and Carrying Value of Unconsolidated VIEs

The following tables present the classification and carrying value of unconsolidated VIEs as of September 30, 2026 and December 31, 2025, respectively (dollar amounts in thousands):


	September 30, 2026
	Multi-family loans, at fair value		Investment securities available for sale, at fair value		Equity investments, at fair value		Other assets		Total

Non-Agency RMBS	$	—	$	18,797	$	—	$	—	$	18,797
Preferred equity investments in multi-family properties	36,868		—		17,926		—		54,794
Other investments	—		—		—		2,000		2,000
Maximum exposure	$	36,868	$	18,797	$	17,926	$	2,000	$	75,591


	December 31, 2025
	Multi-family loans, at fair value		Investment securities available for sale, at fair value		Equity investments, at fair value		Other assets		Total
Non-Agency RMBS	$	—	$	21,476	$	—	$	—	$	21,476
Preferred equity investments in multi-family properties	55,476		—		24,711		—		80,187
Other investments	—		—		—		2,000		2,000
Maximum exposure	$	55,476	$	21,476	$	24,711	$	2,000	$	103,663

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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