| Summary of Distributable Loss and Reconciliation to Net Loss |
The following table provides a calculation of Distributable Loss for our loan and REO portfolios, as well as a reconciliation to net loss, for the three months ended September 30, 2026 and 2025 ($ in thousands):
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Three Months Ended September 30, 2026 |
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Three Months Ended September 30, 2025 |
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|
Loan
Portfolio |
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REO
Portfolio |
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Total |
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|
Loan
Portfolio |
|
|
REO
Portfolio |
|
|
Total |
|
Interest and related income |
|
$ |
41,536 |
|
|
$ |
- |
|
|
$ |
41,536 |
|
|
$ |
88,904 |
|
|
$ |
- |
|
|
$ |
88,904 |
|
Interest and related expense |
|
|
(40,291 |
) |
|
|
- |
|
|
|
(40,291 |
) |
|
|
(71,839 |
) |
|
|
- |
|
|
|
(71,839 |
) |
Revenue from real estate owned |
|
|
- |
|
|
|
31,394 |
|
|
|
31,394 |
|
|
|
- |
|
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|
29,009 |
|
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|
29,009 |
|
Amortization of above and below
market leases, net |
|
|
- |
|
|
|
(38 |
) |
|
|
(38 |
) |
|
|
- |
|
|
|
258 |
|
|
|
258 |
|
Management fees - affiliate |
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|
(6,822 |
) |
|
|
- |
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|
|
(6,822 |
) |
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(7,733 |
) |
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|
- |
|
|
|
(7,733 |
) |
General and administrative expenses |
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|
(3,582 |
) |
|
|
- |
|
|
|
(3,582 |
) |
|
|
(4,812 |
) |
|
|
- |
|
|
|
(4,812 |
) |
Real estate owned: |
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|
|
|
|
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|
|
|
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Operating expenses |
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|
- |
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(22,216 |
) |
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|
(22,216 |
) |
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|
- |
|
|
|
(18,489 |
) |
|
|
(18,489 |
) |
Interest expense |
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|
- |
|
|
|
(8,688 |
) |
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|
(8,688 |
) |
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|
- |
|
|
|
(9,416 |
) |
|
|
(9,416 |
) |
Loss from equity method investment |
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|
(35 |
) |
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|
- |
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|
|
(35 |
) |
|
|
(32 |
) |
|
|
- |
|
|
|
(32 |
) |
Amortization of discount on secured term loan |
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|
843 |
|
|
|
- |
|
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|
843 |
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|
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- |
|
|
|
- |
|
|
|
- |
|
Principal charge-offs (1) |
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(4,884 |
) |
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|
- |
|
|
|
(4,884 |
) |
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|
(42,325 |
) |
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- |
|
|
|
(42,325 |
) |
Valuation adjustment for real estate owned held-
for-sale |
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|
- |
|
|
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(4 |
) |
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|
(4 |
) |
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|
- |
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12,980 |
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|
12,980 |
|
Gain on sales of real estate owned |
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,006 |
|
|
|
2,006 |
|
Previously recognized depreciation and
amortization on real estate owned (2) |
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(58 |
) |
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|
(58 |
) |
Recovery of principal charge-offs |
|
|
733 |
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|
|
- |
|
|
|
733 |
|
|
|
- |
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|
- |
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|
- |
|
Distributable (Loss) Earnings |
|
$ |
(12,502 |
) |
|
$ |
448 |
|
|
$ |
(12,054 |
) |
|
$ |
(37,837 |
) |
|
$ |
16,290 |
|
|
$ |
(21,547 |
) |
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|
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|
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Reconciliation to net loss |
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|
|
|
|
|
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Principal charge-offs (1) |
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|
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4,884 |
|
|
|
|
|
|
|
|
|
42,325 |
|
Previously recognized depreciation and amortization on real estate owned (2) |
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|
|
- |
|
|
|
|
|
|
|
|
|
58 |
|
Provision for current expected credit loss reserve |
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|
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(387 |
) |
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|
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(24,234 |
) |
Depreciation and amortization |
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|
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(4,453 |
) |
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|
|
|
|
|
|
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(3,740 |
) |
Amortization of above and below market leases, net |
|
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|
38 |
|
|
|
|
|
|
|
|
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(258 |
) |
Amortization of discount on secured term loan |
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|
|
(843 |
) |
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|
|
|
|
|
|
|
- |
|
Stock-based compensation expense |
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|
|
(1,442 |
) |
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|
|
|
|
|
|
|
(2,061 |
) |
Unrealized loss on interest rate cap |
|
|
|
- |
|
|
|
|
|
|
|
|
|
(71 |
) |
Net loss |
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|
$ |
(14,257 |
) |
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|
|
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|
$ |
(9,528 |
) |
(1)For the three months ended September 30, 2026, amount includes a $0.1 million charge-off of an exit fee related to the discounted payoff of a multifamily loan in July 2026. (2)Reflects previously recognized depreciation and amortization on the portion of our mixed-use real estate owned asset that was sold during the three months ended September 30, 2025. Amounts recorded were not previously recognized in Distributable Earnings (Loss). The following table provides a calculation of Distributable Loss for our loan and REO portfolios, as well as a reconciliation to net loss, for the nine months ended September 30, 2026 and 2025 ($ in thousands):
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Nine Months Ended September 30, 2026 |
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Nine Months Ended September 30, 2025 |
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|
Loan
Portfolio |
|
|
REO
Portfolio |
|
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Total |
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|
Loan
Portfolio |
|
|
REO
Portfolio |
|
|
Total |
|
Interest and related income |
|
$ |
146,786 |
|
|
$ |
- |
|
|
$ |
146,786 |
|
|
$ |
315,080 |
|
|
$ |
- |
|
|
$ |
315,080 |
|
Interest and related expense |
|
|
(137,788 |
) |
|
|
- |
|
|
|
(137,788 |
) |
|
|
(243,061 |
) |
|
|
- |
|
|
|
(243,061 |
) |
Revenue from real estate owned |
|
|
- |
|
|
|
82,873 |
|
|
|
82,873 |
|
|
|
- |
|
|
|
69,062 |
|
|
|
69,062 |
|
Amortization of above and below
market leases, net |
|
|
- |
|
|
|
477 |
|
|
|
477 |
|
|
|
- |
|
|
|
946 |
|
|
|
946 |
|
Management fees - affiliate |
|
|
(21,246 |
) |
|
|
- |
|
|
|
(21,246 |
) |
|
|
(24,327 |
) |
|
|
- |
|
|
|
(24,327 |
) |
General and administrative expenses |
|
|
(11,516 |
) |
|
|
- |
|
|
|
(11,516 |
) |
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|
(14,118 |
) |
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|
- |
|
|
|
(14,118 |
) |
Real estate owned: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
- |
|
|
|
(60,820 |
) |
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|
(60,820 |
) |
|
|
- |
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|
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(47,100 |
) |
|
|
(47,100 |
) |
Interest expense |
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|
- |
|
|
|
(26,811 |
) |
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|
(26,811 |
) |
|
|
- |
|
|
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(24,134 |
) |
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|
(24,134 |
) |
Loss from equity method investment |
|
|
(116 |
) |
|
|
- |
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|
|
(116 |
) |
|
|
(93 |
) |
|
|
- |
|
|
|
(93 |
) |
Amortization of discount on secured term loan |
|
|
2,255 |
|
|
|
- |
|
|
|
2,255 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Loss on extinguishment of debt |
|
|
(5,898 |
) |
|
|
- |
|
|
|
(5,898 |
) |
|
|
(547 |
) |
|
|
- |
|
|
|
(547 |
) |
Principal charge-offs (1) |
|
|
(110,728 |
) |
|
|
- |
|
|
|
(110,728 |
) |
|
|
(209,795 |
) |
|
|
- |
|
|
|
(209,795 |
) |
Valuation adjustment for real estate owned held-
for-sale |
|
|
- |
|
|
|
(29,627 |
) |
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|
(29,627 |
) |
|
|
- |
|
|
|
12,618 |
|
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|
12,618 |
|
Gain on sales of real estate owned |
|
|
- |
|
|
|
341 |
|
|
|
341 |
|
|
|
- |
|
|
|
366 |
|
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|
366 |
|
Previously recognized depreciation and
amortization on real estate owned (2) |
|
|
- |
|
|
|
(1,346 |
) |
|
|
(1,346 |
) |
|
|
- |
|
|
|
(2,198 |
) |
|
|
(2,198 |
) |
Previously recognized depreciation and
amortization on real estate owned held-for-sale (3) |
|
|
- |
|
|
|
(7,636 |
) |
|
|
(7,636 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Recovery of principal charge-offs |
|
|
2,682 |
|
|
|
- |
|
|
|
2,682 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Distributable (Loss) Earnings |
|
$ |
(135,569 |
) |
|
$ |
(42,549 |
) |
|
$ |
(178,118 |
) |
|
$ |
(176,861 |
) |
|
$ |
9,560 |
|
|
$ |
(167,301 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net loss |
|
|
|
|
|
|
|
|
|
|
|
Principal charge-offs (1) |
|
|
|
110,728 |
|
|
|
|
|
|
|
|
|
209,795 |
|
Previously recognized depreciation and amortization on real estate owned (2) |
|
|
|
1,346 |
|
|
|
|
|
|
|
|
|
2,198 |
|
Previously recognized depreciation and amortization on
real estate owned held-for-sale (3) |
|
|
|
7,636 |
|
|
|
|
|
|
|
|
|
- |
|
Provision for current expected credit loss reserve |
|
|
|
(240,598 |
) |
|
|
|
|
|
|
|
|
(254,846 |
) |
Valuation adjustment for loan receivable held-for-sale |
|
|
|
- |
|
|
|
|
|
|
|
|
|
(41,767 |
) |
Depreciation and amortization |
|
|
|
(16,996 |
) |
|
|
|
|
|
|
|
|
(5,023 |
) |
Amortization of above and below market leases, net |
|
|
|
(477 |
) |
|
|
|
|
|
|
|
|
(946 |
) |
Amortization of discount on secured term loan |
|
|
|
(2,255 |
) |
|
|
|
|
|
|
|
|
- |
|
Stock-based compensation expense |
|
|
|
(5,248 |
) |
|
|
|
|
|
|
|
|
(11,897 |
) |
Unrealized loss on interest rate cap |
|
|
|
- |
|
|
|
|
|
|
|
|
|
(71 |
) |
Net loss |
|
|
$ |
(323,982 |
) |
|
|
|
|
|
|
|
$ |
(269,858 |
) |
(1)For the nine months ended September 30, 2026, amount includes (i) a $12.9 million charge-off of accrued interest receivable and $0.3 million charge-off of an exit fee related to the sale of a hospitality loan in March 2026, (ii) a $0.4 million charge-off of accrued interest receivable related to the mortgage foreclosure on a multifamily property in May 2026, and (iii) a $0.1 million charge-off of an exit fee related to the discounted payoff of a multifamily loan in July 2026. For the nine months ended September 30, 2025, amount includes (i) a $6.5 million charge-off of accrued interest receivable related to the discounted payoff of a land loan in March 2025 and the foreclosures on multifamily properties in July 2025 and (ii) a $0.5 million charge-off of an exit fee related to the discounted payoff of a land loan in March 2025. (2)Reflects previously recognized depreciation and amortization on (i) one of our multifamily real estate owned assets that was sold during the nine months ended September 30, 2026 and (ii) the portions of our mixed-use real estate owned asset that were sold during the nine months ended September 30, 2025. Amounts recorded were not previously recognized in Distributable Earnings (Loss). (3)Reflects previously recognized depreciation and amortization on (i) our mixed-use real estate owned asset upon reclassification to held-for-sale and (ii) one of our multifamily real estate owned assets upon reclassification to held-for-sale during the nine months ended September 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss).
|