| Loans Receivable and Other Lending Investments, net |
Note 6—Loans Receivable and Other Lending Investments, net The following is a summary of the Company’s loans receivable and other lending investments by class ($ in thousands): (1) | | | | | | | | | As of | | | September 30, 2026 | | December 31, 2025 | Loans | | | | | | | Senior mortgages | | $ | — | | $ | 3,050 | Subordinate mortgages | | | 17,189 | | | 16,337 | Subtotal - gross carrying value of loans | | | 17,189 | | | 19,387 | Other lending investments | | | | | | | Available-for-sale debt securities | | | — | | | 25,286 | Subtotal - other lending investments | | | — | | | 25,286 | Total gross carrying value of loans receivable and other lending investments | | | 17,189 | | | 44,673 | Allowance for loan losses | | | (521) | | | (578) | Total loans receivable and other lending investments, net | | $ | 16,668 | | $ | 44,095 |
| (1) | As of September 30, 2026 and December 31, 2025, accrued interest was $0.1 million and $1.1 million, respectively, and is recorded in “Accrued interest and operating lease income receivable, net” on the Company’s consolidated balance sheets. During the three and nine months ended September 30, 2026 and 2025, the Company did not reverse any accrued interest on its loan portfolio. |
Allowance for Loan Losses—Changes in the Company’s general allowance for loan losses were as follows for the three and nine months ended September 30, 2026 and 2025 ($ in thousands): | | | | Three Months Ended September 30, 2026 | | | Allowance for loan losses at beginning of period | | $ | 503 | Provision for (recovery of) loan losses(1) | | | 18 | Allowance for loan losses at end of period | | $ | 521 | | | | | Three Months Ended September 30, 2025 | | | | Allowance for loan losses at beginning of period | | $ | 1,006 | Provision for (recovery of) loan losses(1) | | | 7 | Allowance for loan losses at end of period | | $ | 1,013 |
| (1) | During the three months ended September 30, 2026 and 2025, the Company recorded a provision for loan losses of $18 thousand and $7 thousand, respectively, in its consolidated statements of operations. The provision in 2026 was primarily the result of a worsening macroeconomic forecast since June 30, 2026. The provision for loan losses in 2025 was primarily the result of a non-cash funding on one of the Company’s loans. |
| | | | Nine Months Ended September 30, 2026 | | | Allowance for loan losses at beginning of period | | $ | 578 | Provision for (recovery of) loan losses(1) | | | 443 | Charge-offs | | | (500) | Allowance for loan losses at end of period | | $ | 521 | | | | | Nine Months Ended September 30, 2025 | | | | Allowance for loan losses at beginning of period | | $ | 1,118 | Provision for (recovery of) loan losses(1) | | | (105) | Allowance for loan losses at end of period | | $ | 1,013 |
| (1) | During the nine months ended September 30, 2026 and 2025, the Company recorded a provision for (recovery of) loan losses of $0.4 million and ($0.1) million, respectively, in its consolidated statements of operations. The provision in 2026 was primarily the result of a charge-off on one of the Company’s loans that was repaid in the first quarter of 2026. The recovery of loan losses in 2025 was primarily the result of a $3.0 million repayment on one of the Company’s loans. |
Credit Characteristics—As part of the Company’s process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain, and there can be no assurance that actual performance will be similar to current expectations. The Company designates loans as non-performing at such time as: (1) interest payments become 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt. As of September 30, 2026 and December 31, 2025, all of the Company’s loans were current in their payment status and had a risk rating of 3. Other lending investments—Other lending investments includes the following securities ($ in thousands): | | | | | | | | | | | | | | | | | | | | | | | | Net | | | | | Net | | | | | | Amortized | | Unrealized | | Estimated | | Carrying | | | Face Value | | Cost Basis | | Gain (Loss) | | Fair Value | | Value | As of December 31, 2025 | | | | | | | | | | | | | | | | Available-for-Sale Securities | | | | | | | | | | | | | | | | Municipal debt securities(1) | | $ | 25,710 | | $ | 25,710 | | $ | (424) | | $ | 25,286 | | $ | 25,286 | Total | | $ | 25,710 | | $ | 25,710 | | $ | (424) | | $ | 25,286 | | $ | 25,286 |
| (1) | In September 2026, the Company sold all of its available-for-sale securities with an aggregate cost basis of $45.7 million for an aggregate $50.2 million and recognized an aggregate gross realized gain of $4.5 million. As of December 31, 2025, the Company had one available-for-sale security with an unrealized gain of $0.3 million and nine available-for-sale securities with an aggregate fair value of $18.9 million and an aggregate unrealized loss of $0.7 million, of which five of these securities with an aggregate fair value of $10.6 million and an aggregate unrealized loss of $0.6 million were in an unrealized loss position for more than 12 months. The Company determined that the unrealized losses were not the result of a credit impairment and collected all amounts due in September 2026. |
|