3. Notes Receivable, Net

Interest income from notes and mortgages receivable is reported within the Company’s Structured Financing segment (Note 12). Interest receivable is included in Other assets, net (Note 5). The Company’s notes receivable, net, are generally collateralized by either the underlying real estate or the borrowers’ equity interests in the entities that own the properties. The balances were as follows (dollars in thousands):

During the nine months ended September 30, 2026, the Company originated a note receivable with an aggregate commitment of $75.0 million. The Company funded approximately $53.5 million at closing and an additional $0.4 million through September 30, 2026. The loan is collateralized by the Whitestone Shopping Center and is supported by a guaranty from affiliates of the borrower. The remaining commitment is available to fund certain capital improvements, tenant improvements and leasing commissions, subject to the terms and conditions of the loan agreement. The note bears interest at 8.65% and matures in July 2029.

As of September 30, 2026, the Company had six performing notes with a total amortized cost of $192.6 million, including accrued interest of $4.8 million. Each note was evaluated individually due to the lack of comparability across the Structured Financing Portfolio.

One note receivable with an amortized cost basis of $7.3 million was on nonaccrual status as of September 30, 2026 as collection of contractual principal and interest was no longer considered probable. The note is secured by pledges of ownership interests in the Georgetown Portfolio (Note 4), which owns a portfolio of retail properties in Washington, D.C. Accordingly, interest income on this note is recognized only to the extent cash payments are received. No interest income was recognized on the note during the three and nine months ended September 30, 2026. Contractual interest income not recognized as a result of the note’s nonaccrual status was approximately $1.7 million as of September 30, 2026. Based on the estimated fair value of the collateral at the expected realization date, no allowance for credit losses was recorded as of September 30, 2026.

One note receivable with an amortized cost basis of $22.3 million matured and remained in default as of September 30, 2026 and December 31, 2025. The Company applied the collateral-dependent practical expedient in accordance with ASC Topic 326: Financial Instruments - Credit Losses (“ASC 326”) as the note is expected to be settled through foreclosure or possession of the underlying collateral. Based on the estimated fair value of the collateral at the expected realization date, no allowance for credit losses was recorded as of September 30, 2026.

The Company holds a preferred equity investment, which is accounted for as a note receivable and a mezzanine loan with an aggregate carrying value of approximately $82.5 million as of September 30, 2026. During the third quarter of 2026, the remaining interest reserves associated with the investment were insufficient to fund the full contractual interest payment due in July 2026, resulting in a payment default. As of September 30, 2026, the investment remained on accrual status. Based on the Company’s evaluation of the estimated value of the underlying collateral, current restructuring discussions and other potential repayment sources, the Company concluded that collection of contractual principal and interest remained probable and continued to recognize interest income under the contractual terms of the investment. As of September 30, 2026, an allowance for credit losses of approximately $1.3 million was recorded against the investment.

In October 2026, the Company amended and extended its existing structured finance loan related to a property in the Sunset Park neighborhood of Brooklyn, New York. In connection with the transaction, the Company received a $20.0 million payment and acquired the property’s senior loan, resulting in approximately $120.0 million of incremental capital invested, net of the payment. The Company’s investments were consolidated into a new $200.0 million financing secured, directly or indirectly, by the property. The financing bears interest at the greater of

SOFR plus 300 basis points or 8.0%, a portion of which may accrue, and has an initial four-year term with two one-year extension options. The Company also committed to fund up to an additional $40.0 million, subject to certain conditions (Note 16).