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What changed in BrightSpire Capital, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BrightSpire Capital, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+358 added−345 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in BrightSpire Capital, Inc.'s 2025 10-K

358 paragraphs added · 345 removed · 276 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur 49 employees are located throughout the United States as follows: 29 in New York, New York at our Headquarters, 17 in Los Angeles, California, one in Florida, one in Texas and one in Georgia. 10 Table of Contents Employee Matters and Culture We are committed to maintaining a positive work environment in which employee accountability, growth, advancement and equal employment opportunity are very important.
Biggest changeHuman Capital Management Experienced Management and Employees On December 31, 2025, we had 46 full-time employees and one part-time employee. Our 47 employees are located throughout the United States as follows: 27 in New York, New York at our Headquarters, 16 in Los Angeles, California, one in Florida, two in Texas and one in Georgia.
However, the Company’s board of directors (“Board of Directors”) has adopted the following investment guidelines: • no investment shall be made that would cause the Company to fail to qualify as a REIT for U.S. federal income tax purposes; • no investment shall be made that would cause the Company or any subsidiary to be required to be registered as an investment company under the Investment Company Act; • until appropriate investments can be identified, we may invest the proceeds of any future offerings of the Company in interest-bearing, short-term investments, including money market accounts and/or U.S. treasury securities, that are consistent with the Company’s intention to qualify as a REIT and maintain its exemption from registration under the Investment Company Act; 7 Table of Contents • any investment with a total net commitment by the OP of greater than 5% of the OP’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by the OP being the aggregate amount of funds directly or indirectly committed by the OP to such investment net of any upfront fees received by the Company or any subsidiary in connection with such investment); and • any investment with a total net commitment by the OP of between 3% and 5% of the OP’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by the OP being the aggregate amount of funds directly or indirectly committed by the OP to such investment net of any upfront fees received by the Company or any subsidiary in connection with such investment), unless the investment falls within specific parameters approved by the Board of Directors and in effect at the time such commitment is made.
However, the Company’s board of directors (“Board of Directors”) has adopted the following investment guidelines: • no investment shall be made that would cause the Company to fail to qualify as a REIT for U.S. federal income tax purposes; • no investment shall be made that would cause the Company or any subsidiary to be required to be registered as an investment company under the Investment Company Act; • until appropriate investments can be identified, we may invest the proceeds of any future offerings of the Company in interest-bearing, short-term investments, including money market accounts and/or U.S. treasury securities, that are consistent with the Company’s intention to qualify as a REIT and maintain its exemption from registration under the Investment Company Act; • any investment with a total net commitment by the OP of greater than 5% of the OP’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly 7 Table of Contents constituted committee of the Board of Directors (with total net commitment by the OP being the aggregate amount of funds directly or indirectly committed by the OP to such investment net of any upfront fees received by the Company or any subsidiary in connection with such investment); and • any investment with a total net commitment by the OP of between 3% and 5% of the OP’s net equity (computed using the most recently available publicly filed balance sheet) shall require the approval of the Board of Directors or a duly constituted committee of the Board of Directors (with total net commitment by the OP being the aggregate amount of funds directly or indirectly committed by the OP to such investment net of any upfront fees received by the Company or any subsidiary in connection with such investment), unless the investment falls within specific parameters approved by the Board of Directors and in effect at the time such commitment is made.
Unless the SEC or 8 Table of Contents its staff issues guidance with respect to CMBS, we intend to treat CMBS as a real estate-related asset. To the extent that the SEC staff publishes new or different guidance with respect to these matters, we may be required to adjust our strategy accordingly.
Unless the SEC or its staff issues guidance with respect to CMBS, we intend to treat CMBS as a real estate-related asset. To the extent that the SEC staff publishes new or different guidance with respect to these matters, we may be required to adjust our strategy 8 Table of Contents accordingly.
This approach is driven by a disciplined investment strategy, focused on: • leveraging long standing relationships, our organization structure and the experience of the team; • the underlying real estate and market dynamics to identify investments with attractive risk-return profiles; • primarily originating and structuring CRE senior loans and selective investments in mezzanine loans and preferred equity with attractive return profiles relative to the underlying value and financial operating performance of the real estate collateral, given the strength and quality of the sponsorship; • structuring transactions with a prudent amount of leverage, if any, given the risk of the underlying asset’s cash flows, attempting to match the structure and duration of the financing with the underlying asset’s cash flows, including through the use of hedges, as appropriate; and • operating our net leased real estate investments and selectively pursuing new investments based on property location and purpose, tenant credit quality, market lease rates and potential appreciation of, and alternative uses for, the real estate.
This approach is driven by a disciplined investment strategy, focused on: • leveraging long standing relationships, our organizational structure and the experience of our team; • the underlying real estate and market dynamics to identify investments with attractive risk-return profiles; • primarily originating and structuring CRE senior loans and selective investments in mezzanine loans and preferred equity with attractive return profiles relative to the underlying value and financial operating performance of the real estate collateral, given the strength and quality of the sponsorship; • structuring transactions with a prudent amount of leverage, if any, given the risk of the underlying asset’s cash flows, attempting to match the structure and duration of the financing with the underlying asset’s cash flows, including through the use of hedges, as appropriate; and • operating our net leased real estate investments and selectively pursuing new investments based on property location and purpose, tenant credit quality, market lease rates and potential appreciation of, and alternative uses for, the real estate.
In addition, we may use other forms of financing, including additional warehouse facilities, public and private secured and unsecured debt issuances and equity or equity-related securities issuances by us or our subsidiaries. We may also finance a portion of our investments through the syndication of one or more interests in a whole loan.
In addition, we may use other forms of financing, including warehouse facilities, public and private secured and unsecured debt issuances and equity or equity-related securities issuances by us or our subsidiaries. We may also finance a portion of our investments through the syndication of one or more interests in a whole loan.
Our investment strategy is flexible, enabling us to adapt to shifts in economic, real estate and capital market conditions and to exploit market inefficiencies. We may expand or change our investment strategy or target assets over time in response to opportunities available in different economic and capital market conditions.
Our investment strategy is dynamic and flexible, enabling us to adapt to shifts in economic, real estate and capital market conditions and to exploit market inefficiencies. We may expand or change our investment strategy or target assets over time in response to opportunities available in different economic and capital market conditions.
These assessments are carried out in accordance with an appropriate level of due diligence and generally include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property’s chain of title and review of historic aerial photographs and other information on past uses of the property.
These assessments are carried out in accordance with an appropriate level of due diligence and generally include a physical site inspection, a review of relevant 9 Table of Contents federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property’s chain of title and review of historic aerial photographs and other information on past uses of the property.
Additionally, we may also selectively originate mezzanine loans and preferred equity investments, which may include profit participations. The mezzanine loans and preferred equity investments may be in conjunction with our origination of corresponding first mortgages on the same properties.
Additionally, we may also selectively originate mezzanine loans and preferred equity investments, which may include profit participations. The mezzanine loans and preferred equity investments may be in conjunction with our origination of corresponding senior mortgages on the same properties.
We seek to attract and retain the most relevant and skilled employees by offering competitive compensation and benefits, including fixed and variable pay, including base salary, cash bonuses, equity-based compensation consistent with employee position and seniority, 401(k) matching and opportunities for merit-based increases.
We seek to attract and retain the most relevant and 10 Table of Contents skilled employees by offering competitive compensation and benefits, including fixed and variable pay, including base salary, cash bonuses, equity-based compensation consistent with employee position and seniority, 401(k) matching and opportunities for merit-based increases.
Within the time period required by the rules of the SEC and the NYSE, we will post on our website any amendment to such corporate governance documents. 11 Table of Contents
Within the time period required by the rules of the SEC and the NYSE, we will post on our website any amendment to such corporate governance documents.
Our primary focus is originating and selectively acquiring senior loans that are backed by CRE assets. These loans are secured by a first mortgage lien on a commercial property and provide mortgage financing to a commercial property developer or owner.
Our primary focus is originating and selectively acquiring senior loans that are backed by CRE assets. 5 Table of Contents These loans are secured by a first mortgage lien on a commercial property and provide mortgage financing to a commercial property developer or owner.
Our operating segments include senior and mezzanine loans and preferred equity, net leased and other real estate, all of which are included in our target assets, and corporate and other.
Our operating and reportable segments include senior and mezzanine loans and preferred equity, net leased and other real estate, both of which are included in our target assets, and corporate and other.
We believe that our diverse portfolio, our ability to originate, acquire and manage our target assets and the flexibility of our investment strategy positions us to capitalize on market inefficiencies and generate attractive long-term risk-adjusted returns for our stockholders through a variety of market conditions and economic cycles. 5 Table of Contents Our Target Assets Our investment strategy is to originate and selectively acquire our target assets, which consist of the following: • Senior Loans.
We believe that our diverse portfolio, our ability to originate, acquire and manage our target assets and the flexibility of our investment strategy positions us to capitalize on market inefficiencies and generate attractive long-term risk-adjusted returns for our stockholders through a variety of market conditions and economic cycles.
We are a commercial real estate (“CRE”) credit real estate investment trust (“REIT”) focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties predominantly in the United States. CRE debt investments primarily consist of first mortgage loans, which is our primary investment strategy.
We are an internally-managed commercial real estate (“CRE”) credit real estate investment trust (“REIT”) focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties. CRE debt investments primarily consist of senior mortgage loans, which is our primary investment strategy.
Our Financing Strategy We have a multi-pronged financing strategy that included an up to $165 million secured revolving credit facility as of December 31, 2024, up to approximately $2.0 billion in secured revolving repurchase facilities, $1.1 billion in non-recourse securitization financing, $587.2 million in commercial mortgages and $34.5 million in other asset-level financing structures.
Our Financing Strategy We have a multi-pronged financing strategy that includes an up to $120 million secured revolving credit facility, up to approximately $2.1 billion in secured revolving repurchase facilities, $982.1 million in non-recourse securitization financing, $382.2 million in commercial mortgages and $34.1 million in other asset-level financing structures, in each case as of December 31, 2025.
In addition, tenants of our properties typically pay rent increases based on: (1) increases in the consumer price index (typically subject to ceilings), (2) fixed increases, or (3) additional rent calculated as a percentage of the tenants’ gross sales above a specified level.
In addition, tenants of our properties typically pay rent increases based on fixed increases or additional rent calculated as a percentage of the tenants’ gross sales above a specified level.
Corporate Information The Company was formed as a Maryland corporation on August 23, 2017. Our principal executive offices are located at 590 Madison Avenue, 33rd Floor, New York, NY 10022, and our telephone number is (212) 547-2631. Our website is www.brightspire.com.
Our principal executive offices are located at 590 Madison Avenue, 33rd Floor, New York, NY 10022, and our telephone number is (212) 547-2631. Our website is www.brightspire.com.
Absent participating in management or succeeding to ownership, operation or other control of real property, a secured lender is not likely to be directly subject to any of these forms of environmental liability, although a borrower could be subject to these liabilities impacting its ability to make loan payments. 9 Table of Contents Prior to closing any property acquisition, we obtain environmental assessments in a manner we believe prudent in order to attempt to identify potential environmental concerns with respect to such properties.
Absent participating in management or succeeding to ownership, operation or other control of real property, a secured lender is not likely to be directly subject to any of these forms of environmental liability, although a borrower could be subject to these liabilities impacting its ability to make loan payments.
We regularly re-evaluate our policies covering codes of ethics, corporate governance, disclosure controls, anti-discrimination, harassment, retaliation and related complaint procedures, insider trading, and related party transaction activity. We maintain a co-employer partnership with TriNet (a professional employer organization).
We regularly re-evaluate our policies covering codes of ethics, corporate governance, disclosure controls, anti-discrimination, harassment, retaliation and related complaint procedures, insider trading, and related party transaction activity. Our Commitment to Charity We maintain a commitment to corporate giving to national and local associations in the communities in which we live and conduct business.
With the aid of our new philanthropy platform, we can match employee donations to certified 501(c)(3) organizations. Additionally, our employees have teamed up to provide annual support for Toys for Tots and have participated in charitable fundraising endeavors such as Cycle for Survival. Certain departments have worked together in volunteer efforts to give back to the community as well.
Additionally, our employees have teamed up to provide annual support for Toys for Tots and have participated in charitable fundraising endeavors such as Cycle for Survival. Certain departments have worked together in volunteer efforts to give back to the community as well. Corporate Information The Company was formed as a Maryland corporation on August 23, 2017.
We conduct all our activities and hold substantially all our assets and liabilities through our operating subsidiary, BrightSpire Capital Operating Company, LLC. Our Investment Strategy Our objective is to generate consistent and attractive risk-adjusted returns to our stockholders. We seek to achieve this objective primarily through cash distributions and the preservation of invested capital.
We conduct all our activities and hold substantially all our assets and liabilities through our operating subsidiary, BrightSpire Capital Operating Company, LLC. Our Investment Strategy Our objective is to preserve and protect shareholder capital, while producing attractive risk-adjusted returns that drive capital appreciation. We believe our investment strategy provides flexibility through economic cycles to achieve attractive risk-adjusted returns.
We strive to recognize and reward noteworthy performance, evaluated through periodic (no less frequent than annual) reviews with each employee.
Employee Matters and Culture We are committed to maintaining a positive work environment in which employee accountability, growth, advancement and equal employment opportunity are very important. We strive to recognize and reward noteworthy performance, evaluated through periodic (no less frequent than annual) reviews with each employee.
Our Commitment to Charity We maintain a commitment to corporate giving to national and local associations in the communities in which we live and conduct business. We proudly launched a charitable gift matching program in December 2022, where we utilize an enterprise philanthropy platform that connects employees to over 1.5 million charities.
We proudly launched a charitable gift matching program in December 2022, where we utilize an enterprise philanthropy platform that connects employees to over 1.5 million charities. With the aid of our new philanthropy platform, we can match employee donations to certified 501(c)(3) organizations.
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We believe our investment strategy provides flexibility through economic cycles to achieve attractive risk-adjusted returns.
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Our Target Assets Our investment strategy is to originate and selectively acquire our target assets, which consist of the following: • Senior Loans.
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Given current market conditions, to the extent that we use borrowings to finance our assets, we currently expect that such leverage would not exceed on a debt-to-equity basis, a 3-to-1 ratio for us as a whole. We consider these leverage ratios to be prudent for our target asset classes.
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Prior to closing any property acquisition, we obtain environmental assessments in a manner we believe prudent in order to attempt to identify potential environmental concerns with respect to such properties.
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Human Capital Management Experienced Management and Employees On December 31, 2024, we had 48 full-time employees and one part-time employee.
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TriNet administers pay and other employment services, allowing us to maximize human resource administration and enhance the diversity and strength of benefits provided to employees.
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Through TriNet, employees have access to an extensive health and wellness platform, including live, personal and mental health counseling, family, financial and career planning resources, as well as a broad-based marketplace offering technology products, travel, entertainment, dining, fitness and other services at significantly discounted prices.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

95 edited+16 added−7 removed355 unchanged
Biggest changeIn addition, further changes in the financial regulatory regime could decrease the current restrictions on banks and other financial institutions and allow them to compete with us for investment opportunities that were previously not available to them. 17 Table of Contents As a result of this competition, desirable loans and investments in our target assets may be limited in the future, and we may not be able to take advantage of attractive lending and investment opportunities from time to time.
Biggest changeAs a result of this competition, desirable loans and investments in our target assets may be limited in the future, and we may not be able to take advantage of attractive lending and investment opportunities from time to time. In addition, reduced CRE transaction volume could increase competition for available investment opportunities.
Our CRE debt, select equity and securities investments are subject to the risks typically associated with real estate, including: • tenant mix; • real estate conditions, such as an oversupply of or a reduction in demand for real estate space in an area; • lack of liquidity inherent in the nature of the assets; • borrower/tenant/operator mix and the success of the borrower/tenant/operator business; • success of tenant businesses; • ability to collect interest/loan obligation/principal, including income recognition and recovery of payment-in-kind interest on applicable loan investments; • property management decisions; • property location, condition and design; • competition from comparable types of properties; 12 Table of Contents • changes in laws that increase operating expenses or limit rents that may be charged; • changes in national, regional or local economic conditions and/or specific industry segments, including the credit and securitization markets; • declines in regional or local real estate values; • declines in regional or local rental or occupancy rates; • fluctuations (including increases) in interest rates, real estate tax rates and other operating expenses; • compliance with environmental laws; • costs of remediation and liabilities associated with environmental conditions; • the potential for uninsured or underinsured property losses; • changes in governmental laws and regulations, including fiscal policies, zoning ordinances and environmental legislation and the related costs of compliance; • acts of God, terrorist attacks, social unrest and civil disturbances; and • such other risks associated with owning real estate.
Our CRE debt, select equity and securities investments are subject to the risks typically associated with real estate, including: • tenant mix; • real estate conditions, such as an oversupply of or a reduction in demand for real estate space in an area; • lack of liquidity inherent in the nature of the assets; • borrower/tenant/operator mix and the success of the borrower/tenant/operator business; • success of tenant businesses; • ability to collect interest/loan obligation/principal, including income recognition and recovery of payment-in-kind interest on applicable loan investments; • property management decisions; • property location, condition and design; • competition from comparable types of properties; • changes in laws that increase operating expenses or limit rents that may be charged; • changes in national, regional or local economic conditions and/or specific industry segments, including the credit and securitization markets; • declines in regional or local real estate values; • declines in regional or local rental or occupancy rates; 12 Table of Contents • fluctuations (including increases) in interest rates, real estate tax rates and other operating expenses; • compliance with environmental laws; • costs of remediation and liabilities associated with environmental conditions; • the potential for uninsured or underinsured property losses; • changes in governmental laws and regulations, including fiscal policies, zoning ordinances and environmental legislation and the related costs of compliance; • acts of God, terrorist attacks, social unrest and civil disturbances; and • such other risks associated with owning real estate.
We generally must distribute annually at least 90% of our REIT taxable income (subject to certain adjustments and excluding any net capital gain), in order to qualify as a REIT, and any REIT taxable income that we do not distribute will be subject to U.S. corporate income tax at regular rates.
We generally must distribute annually at least 90% of our REIT taxable income (subject to certain adjustments and excluding any net capital gain), in order to qualify as a REIT, and any REIT taxable income that we do not distribute will be subject to U.S. corporate income tax at regular rates.
Some of the factors that could negatively affect the market price of our common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • equity issuances by us, or resales of our shares by our stockholders, or the perception that such issuances or resales may occur; • loss of a major funding source; • actual or anticipated accounting problems; • publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to the level of leverage we employ; • additions to or departures of our key personnel or adverse effects on the business or operations of DigitalBridge; • speculation in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our common stock and would result in increased interest expenses on our debt; • a compression of the yield on our investments and an increase in the cost of our liabilities; • failure to operate in a manner consistent with our intention to qualify as a REIT or exclusion from registration under the Investment Company Act; • price and volume fluctuations in the overall stock market from time to time; • general market and economic conditions and trends including inflationary concerns, and the current state of the credit and capital markets; • significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, which is not necessarily related to the operating performance of these companies; • changes in law, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs; • changes in the value of our portfolio; • any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts; • operating performance of companies comparable to us; • short-selling pressure with respect to shares of our common stock or REITs generally; and • uncertainty surrounding the strength of the U.S. economic recovery, particularly in light of the recent debt ceiling and budget deficit concerns, and other U.S. and international political and economic affairs.
Some of the factors that could negatively affect the market price of our common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • equity issuances by us, or resales of our shares by our stockholders, or the perception that such issuances or resales may occur; • loss of a major funding source; • actual or anticipated accounting problems; • publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to the level of leverage we employ; 37 Table of Contents • additions to or departures of our key personnel or adverse effects on the business or operations of DigitalBridge; • speculation in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our common stock and would result in increased interest expenses on our debt; • a compression of the yield on our investments and an increase in the cost of our liabilities; • failure to operate in a manner consistent with our intention to qualify as a REIT or exclusion from registration under the Investment Company Act; • price and volume fluctuations in the overall stock market from time to time; • general market and economic conditions and trends including inflationary concerns, and the current state of the credit and capital markets; • significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, which is not necessarily related to the operating performance of these companies; • changes in law, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs; • changes in the value of our portfolio; • any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts; • operating performance of companies comparable to us; • short-selling pressure with respect to shares of our common stock or REITs generally; and • uncertainty surrounding the strength of the U.S. economic recovery, particularly in light of the recent debt ceiling and budget deficit concerns, and other U.S. and international political and economic affairs.
Such investments may involve risks not otherwise present with other methods of investment, including, for instance, the following risks: • our joint venture partner in an investment could become insolvent or bankrupt; • fraud or other misconduct by our joint venture partners; 20 Table of Contents • we may share decision-making authority with our joint venture partners regarding certain major decisions affecting the ownership of the joint venture and the joint venture investment, such as the management of the CRE debt, sale of the property or the making of additional capital contributions for the benefit of the loan or property, which may prevent us from taking actions that are opposed by our joint venture partner; • such joint venture partner may at any time have economic or business interests or goals that are or that become in conflict with our business interests or goals, including for example the management of the CRE debt or operation of the properties; • such joint venture partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; • our joint venture partners may be structured differently than us for tax purposes and this could create conflicts of interest and risk to our REIT status; • we may rely upon our joint venture partners to manage the day-to-day operations of the joint venture and underlying loans or assets, as well as to prepare financial information for the joint venture and any failure to perform these obligations may have a negative impact our performance and results of operations; • our joint venture partner may experience a change of control, which could result in new management of our joint venture partner with less experience or conflicting interests to ours and be disruptive to our business; • the terms of our joint ventures could restrict our ability to sell or transfer our interest to a third party when we desire on advantageous terms, which could result in reduced liquidity; and • our joint venture partners may not have sufficient personnel or appropriate levels of expertise to adequately support our initiatives.
Such investments may involve risks not otherwise present with other methods of investment, including, for instance, the following risks: • our joint venture partner in an investment could become insolvent or bankrupt; • fraud or other misconduct by our joint venture partners; • we may share decision-making authority with our joint venture partners regarding certain major decisions affecting the ownership of the joint venture and the joint venture investment, such as the management of the CRE debt, sale of the property or the making of additional capital contributions for the benefit of the loan or property, which may prevent us from taking actions that are opposed by our joint venture partner; • such joint venture partner may at any time have economic or business interests or goals that are or that become in conflict with our business interests or goals, including for example the management of the CRE debt or operation of the properties; • such joint venture partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; • our joint venture partners may be structured differently than us for tax purposes and this could create conflicts of interest and risk to our REIT status; • we may rely upon our joint venture partners to manage the day-to-day operations of the joint venture and underlying loans or assets, as well as to prepare financial information for the joint venture and any failure to perform these obligations may have a negative impact our performance and results of operations; • our joint venture partner may experience a change of control, which could result in new management of our joint venture partner with less experience or conflicting interests to ours and be disruptive to our business; • the terms of our joint ventures could restrict our ability to sell or transfer our interest to a third party when we desire on advantageous terms, which could result in reduced liquidity; and • our joint venture partners may not have sufficient personnel or appropriate levels of expertise to adequately support our initiatives.
Certain provisions of the MGCL may have the effect of inhibiting a third party from acquiring our Company or of impeding a change of control under circumstances that otherwise could provide our Company’s stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our Company’s outstanding shares of voting stock or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding stock of the corporation) or an affiliate of any interested stockholder and our Company for five years after the most recent date on which the stockholder becomes an interested stockholder and thereafter imposes two super-majority stockholder voting requirements on these combinations; and • “control share” provisions that provide that holders of “control shares” of our Company (defined as outstanding voting shares of stock that, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the acquisition of issued and outstanding “control shares”) have no voting rights except to the extent approved by the affirmative vote of the holders entitled to cast two-thirds of the votes entitled to be cast on the matter, excluding all interested shares.
Certain provisions of the MGCL may have the effect of inhibiting a third party from acquiring our Company or of impeding a change of control under circumstances that otherwise could provide our Company’s stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our Company’s outstanding shares of voting stock or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding stock of the corporation) or an affiliate of any interested stockholder and our Company for five years after the most recent date on which the stockholder becomes an interested stockholder and thereafter imposes two super-majority stockholder voting requirements on these combinations; and • “control share” provisions that provide that holders of “control shares” of our Company (defined as outstanding voting shares of stock that, if aggregated with all other shares of stock owned by the acquiror or in respect of which the 23 Table of Contents acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the acquisition of issued and outstanding “control shares”) have no voting rights except to the extent approved by the affirmative vote of the holders entitled to cast two-thirds of the votes entitled to be cast on the matter, excluding all interested shares.
If, notwithstanding these opinions, NorthStar I’s or NorthStar II’s REIT status for periods prior to the Mergers were successfully challenged, we would face serious adverse tax consequences that would substantially reduce our core funds from operations, and cash available for distribution, including cash available to pay dividends to our stockholders, because: 30 Table of Contents • NorthStar I or NorthStar II, as applicable, would be subject to U.S. federal, state and local income tax on its net income at regular corporate rates for the years it did not qualify as a REIT (and, for such years, would not be allowed a deduction for dividends paid to stockholders in computing its taxable income) and we would succeed to the liability for such taxes; • if we were considered to be a “successor” of such entity, we would not be eligible to elect REIT status until the fifth taxable year following the year during which such entity was disqualified, unless it were entitled to relief under applicable statutory provisions; • even if we were eligible to elect REIT status, we would be subject to tax (at the highest corporate rate in effect at the date of the sale) on the built-in gain on each asset of NorthStar I or NorthStar II, as applicable, existing at the time of the Mergers if we were to dispose of such asset for up to five years following the Mergers; and • we would succeed to any earnings and profits accumulated by NorthStar I or NorthStar II, as applicable, for tax periods that such entity did not qualify as a REIT and we would have to pay a special dividend and/or employ applicable deficiency dividend procedures (including interest payments to the IRS) to eliminate such earnings and profits to maintain our REIT qualification.
If, notwithstanding these opinions, NorthStar I’s or NorthStar II’s REIT status for periods prior to the Mergers were successfully challenged, we would face serious adverse tax consequences that would substantially reduce our core funds from operations, and cash available for distribution, including cash available to pay dividends to our stockholders, because: • NorthStar I or NorthStar II, as applicable, would be subject to U.S. federal, state and local income tax on its net income at regular corporate rates for the years it did not qualify as a REIT (and, for such years, would not be allowed a deduction for dividends paid to stockholders in computing its taxable income) and we would succeed to the liability for such taxes; • if we were considered to be a “successor” of such entity, we would not be eligible to elect REIT status until the fifth taxable year following the year during which such entity was disqualified, unless it were entitled to relief under applicable statutory provisions; • even if we were eligible to elect REIT status, we would be subject to tax (at the highest corporate rate in effect at the date of the sale) on the built-in gain on each asset of NorthStar I or NorthStar II, as applicable, existing at the time of the Mergers if we were to dispose of such asset for up to five years following the Mergers; and • we would succeed to any earnings and profits accumulated by NorthStar I or NorthStar II, as applicable, for tax periods that such entity did not qualify as a REIT and we would have to pay a special dividend and/or employ applicable deficiency dividend procedures (including interest payments to the IRS) to eliminate such earnings and profits to maintain our REIT qualification.
Interest rate and/or currency hedging may fail to protect or could adversely affect us because, among other things: • interest rate and/or currency hedging can be expensive, particularly during periods of rising and volatile interest rates; • available interest rate and/or currency hedging may not correspond directly with the interest rate risk for which protection is sought; • the duration of the hedge may not match the duration of the related liability or asset; • our hedging opportunities may be limited by the treatment of income from hedging transactions under the rules determining REIT qualification; • the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; • the counterparties with which we trade may cease making markets and quoting prices in such instruments, which may render us unable to enter into an offsetting transaction with respect to an open position; • the party owing money in the hedging transaction may default on its obligation to pay; • we may purchase a hedge that turns out not to be necessary (i.e., a hedge that is out of the money); and • we may enter into hedging arrangements that would require us to fund cash payments in certain circumstances (such as the early termination of the hedging instrument caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the hedging instrument).
Interest rate and/or currency hedging may fail to protect or could adversely affect us because, among other things: • interest rate and/or currency hedging can be expensive, particularly during periods of rising and volatile interest rates; • available interest rate and/or currency hedging may not correspond directly with the interest rate risk for which protection is sought; • the duration of the hedge may not match the duration of the related liability or asset; • our hedging opportunities may be limited by the treatment of income from hedging transactions under the rules determining REIT qualification; 27 Table of Contents • the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; • the counterparties with which we trade may cease making markets and quoting prices in such instruments, which may render us unable to enter into an offsetting transaction with respect to an open position; • the party owing money in the hedging transaction may default on its obligation to pay; • we may purchase a hedge that turns out not to be necessary (i.e., a hedge that is out of the money); and • we may enter into hedging arrangements that would require us to fund cash payments in certain circumstances (such as the early termination of the hedging instrument caused by an event of default or other early termination event, or the decision by a counterparty to request margin securities it is contractually owed under the terms of the hedging instrument).
Conducting business abroad carries significant risks, including: • our REIT tax status not being respected under foreign laws, in which case any income or gains from foreign sources could be subject to foreign taxes and withholding taxes; • changes in real estate and other tax rates, the tax treatment of transaction structures and other changes in operating expenses in a particular country where we have an investment; • restrictions and limitations relating to the repatriation of profits; 21 Table of Contents • complexity and costs of staffing and managing international operations; • the burden of complying with multiple and potentially conflicting laws; • changes in relative interest rates; • translation and transaction risks related to fluctuations in foreign currency and exchange rates; • lack of uniform accounting standards (including availability of information in accordance with accounting principles generally accepted in the United States (“U.S.
Conducting business abroad carries significant risks, including: • our REIT tax status not being respected under foreign laws, in which case any income or gains from foreign sources could be subject to foreign taxes and withholding taxes; • changes in real estate and other tax rates, the tax treatment of transaction structures and other changes in operating expenses in a particular country where we have an investment; • restrictions and limitations relating to the repatriation of profits; • complexity and costs of staffing and managing international operations; • the burden of complying with multiple and potentially conflicting laws; • changes in relative interest rates; • translation and transaction risks related to fluctuations in foreign currency and exchange rates; • lack of uniform accounting standards (including availability of information in accordance with accounting principles generally accepted in the United States (“U.S.
The condition of the real estate markets in which we operate is cyclical and depends on the condition of the economy in the United States and Europe and elsewhere as a whole and to the perceptions of investors of the overall economic outlook.
The condition of the real estate markets in which we operate is cyclical and depends on the condition of the economy in the United States and elsewhere as a whole and to the perceptions of investors of the overall economic outlook.
We may invest in CRE securities, including CMBS and CDOs, which entail certain heightened risks and are subject to losses. We have invested and may invest in a variety of CRE securities, including CMBS, CDOs and other subordinate securities.
We may invest in CRE securities, including CMBS and CDOs and CRE CLOs, which entail certain heightened risks and are subject to losses. We have invested and may invest in a variety of CRE securities, including CMBS, CDOs, CRE CLOs and other subordinate securities.
These matters may subject us to regulator and reporting obligations that could impact the price of our common stock, cause us to incur added costs or expose us to new risks, such as the risk of scrutiny and criticism by ESG detractors for the scope or nature of any ESG-related initiatives or goals we may establish, which could have a material adverse effect on our reputation.
These matters may subject us to regulator and reporting obligations that could impact the price of our common stock, cause us to incur added costs or expose us to new risks, such as the risk of scrutiny and criticism by sustainability detractors for the scope or nature of any sustainability-related initiatives or goals we may establish, which could have a material adverse effect on our reputation.
To the extent that our stock owned by “disqualified organizations” is held in street name by a broker-dealer or other nominee, the broker-dealer or nominee would be liable for a tax at the highest corporate rate on the portion of our excess inclusion income allocable to the stock held on behalf of the “disqualified organizations.” A regulated investment company or other pass-through entity owning our stock may also be subject to tax at the highest corporate tax rate on any excess inclusion income allocated to their record name owners that are “disqualified organizations.” Excess inclusion income could result if a REIT held a residual interest in a real estate mortgage investment conduit (“REMIC”).
To the extent that our stock owned by “disqualified organizations” is held in street name by a broker-dealer or other nominee, the broker-dealer or nominee would be liable for a tax at the highest 33 Table of Contents corporate rate on the portion of our excess inclusion income allocable to the stock held on behalf of the “disqualified organizations.” A regulated investment company or other pass-through entity owning our stock may also be subject to tax at the highest corporate tax rate on any excess inclusion income allocated to their record name owners that are “disqualified organizations.” Excess inclusion income could result if a REIT held a residual interest in a real estate mortgage investment conduit (“REMIC”).
In addition, our TRSs may be treated as a “dealer” for U.S. 31 Table of Contents federal income tax purposes, in which case the TRS would be required to mark-to-market its assets at the end of each taxable year and recognize taxable gain or loss on those assets even though there has been no actual sale of those assets; • we may deduct our capital losses only to the extent of our capital gains and not against our ordinary income, in computing our REIT taxable income for a given taxable year; • certain of our assets and liabilities are marked-to-market for U.S.
In addition, our TRSs may be treated as a “dealer” for U.S. federal income tax purposes, in which case the TRS would be required to mark-to-market its assets at the end of each taxable year and recognize taxable gain or loss on those assets even though there has been no actual sale of those assets; • we may deduct our capital losses only to the extent of our capital gains and not against our ordinary income, in computing our REIT taxable income for a given taxable year; • certain of our assets and liabilities are marked-to-market for U.S.
While our investment strategy focuses primarily on investments in “performing” real estate-related interests, our investment program may include making distressed investments from time to time (e.g., investments in defaulted, out-of-favor or distressed bank loans and debt securities) or may involve investments that become “non-performing” following our acquisition thereof.
While our investment strategy focuses primarily on investments in “performing” interests in real estate, our investment program may include making distressed investments from time to time (e.g., investments in defaulted, out-of-favor or distressed bank loans and debt securities) or may involve investments that become “non-performing” following our origination or acquisition thereof.
As a result, we may lose all or a significant part of our investment, which could result in significant losses, have a material adverse effect on our results of operations and our ability to make distributions to our stockholders. We invest in commercial properties subject to net leases, which could subject us to losses.
As a result, we may lose all or a significant part of our investment, which could result in significant losses, have a material adverse effect on our results of operations and our ability to make distributions to our stockholders. We invest in commercial properties, including those subject to net leases, which could subject us to losses.
We believe that a change in any one of the following factors could adversely affect our results of operations and cash flows and impair our ability to make distributions to our stockholders: • our ability to make attractive investments; • margin calls or other expenses that reduce our cash flows; • defaults or prepayments in our investment portfolio or decreases in the value of our investment portfolio; and 22 Table of Contents • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.
We believe that a change in any one of the following factors could adversely affect our results of operations and cash flows and impair our ability to make distributions to our stockholders: • our ability to make attractive investments; • margin calls or other expenses that reduce our cash flows; • defaults or prepayments in our investment portfolio or decreases in the value of our investment portfolio; and • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.
In addition, there is generally less publicly available information about foreign companies and a lack of uniform financial accounting standards and practices (including the availability of information in accordance with GAAP) which could impair our ability to analyze transactions and receive timely and accurate financial information from our investments necessary to meet our reporting obligations to financial institutions or governmental or regulatory agencies.
In addition, there is generally less publicly available information about foreign companies and a lack of uniform financial accounting standards and practices (including the availability of information in accordance with GAAP) which could impair our ability to analyze transactions and receive timely and accurate financial 22 Table of Contents information from our investments necessary to meet our reporting obligations to financial institutions or governmental or regulatory agencies.
However, these ownership limits 23 Table of Contents might also delay, defer or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders or result in the transfer of shares acquired in excess of the ownership limits to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
However, these ownership limits might also delay, defer or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders or result in the transfer of shares acquired in excess of the ownership limits to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
As an owner or operator of a site, including if we take ownership through foreclosure, we also can be liable under common law to third parties for damages and injuries resulting from environmental contamination at or emanating from the site (e.g., for cleanup costs, natural resource damages, bodily injury or property damage).
As an owner or operator of a site, including if we take ownership through foreclosure, we also can be liable under common law to third parties for damages and injuries resulting from environmental contamination at or emanating from the site (e.g., for cleanup costs, natural resource damages, bodily injury or 35 Table of Contents property damage).
The type and percentage of leverage we employ will vary depending on our available capital, our ability to obtain and access financing arrangements with lenders, the type of asset we are funding, whether the financing is recourse or nonrecourse, debt restrictions contained in those financing arrangements and the lenders’ and rating agencies’ estimate of the stability of our investment portfolio’s cash flow.
The type and percentage of leverage we employ will vary depending on our available capital, our ability to obtain and access financing arrangements with lenders, the type of asset we are funding, 25 Table of Contents whether the financing is recourse or nonrecourse, debt restrictions contained in those financing arrangements and the lenders’ and rating agencies’ estimate of the stability of our investment portfolio’s cash flow.
Further, such borrowings may require us to maintain a certain amount of cash reserves or to set aside unleveraged assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. In the event that we are unable to meet the collateral obligations for our short-term borrowings, our financial condition could deteriorate rapidly.
Further, such borrowings may require us to maintain a certain amount of cash reserves or to set aside unleveraged assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. 28 Table of Contents In the event that we are unable to meet the collateral obligations for our short-term borrowings, our financial condition could deteriorate rapidly.
These alternatives could increase our costs, reduce our equity, and/or result in stockholders being taxed on distributions of shares of stock without receiving cash sufficient to pay the resulting taxes. Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could adversely affect the value of our common stock.
These alternatives could increase our costs, reduce our equity, and/or result in stockholders being taxed on 32 Table of Contents distributions of shares of stock without receiving cash sufficient to pay the resulting taxes. Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could adversely affect the value of our common stock.
A period of lower interest rates may result in generating 26 Table of Contents less income on our loans and may impact our ability to redeploy funds in a timely manner, or to supplement earnings loss. Our operating results depend in large part on differences between the income from our assets, net of credit losses, and our financing costs.
A period of lower interest rates may result in generating less income on our loans and may impact our ability to redeploy funds in a timely manner, or to supplement earnings loss. Our operating results depend in large part on differences between the income from our assets, net of credit losses, and our financing costs.
Further, we cannot assure 35 Table of Contents stockholders that any such tenant or borrower would be able to fulfill its indemnification obligations. If we were deemed liable for any such environmental liabilities and were unable to seek recovery against our tenant or borrower, our business, financial condition and results of operations could be materially and adversely affected.
Further, we cannot assure stockholders that any such tenant or borrower would be able to fulfill its indemnification obligations. If we were deemed liable for any such environmental liabilities and were unable to seek recovery against our tenant or borrower, our business, financial condition and results of operations could be materially and adversely affected.
We cannot predict how future laws and regulations, or future interpretations of current laws and regulations, related to climate change, corporate responsibility and/or ESG initiatives will affect our business, results of operations, liquidity and financial condition.
We cannot predict how future laws and regulations, or future interpretations of current laws and regulations, related to climate change, corporate responsibility and/or sustainability initiatives will affect our business, results of operations, liquidity and financial condition.
Adverse changes in general economic conditions may also disrupt the debt and equity capital markets and lack of access to capital or prohibitively high costs of obtaining or replacing capital may materially and adversely affect our business. 16 Table of Contents We have only a limited ability to change our portfolio promptly in response to economic or other conditions.
Adverse changes in general economic conditions may also disrupt the debt and equity capital markets and lack of access to capital or prohibitively high costs of obtaining or replacing capital may materially and adversely affect our business. We have only a limited ability to change our portfolio promptly in response to economic or other conditions.
As a result, we may be required to liquidate from our portfolio, or contribute to a TRS, otherwise attractive 32 Table of Contents investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income, increasing our income tax liability, and reducing amounts available for distribution to our stockholders.
As a result, we may be required to liquidate from our portfolio, or contribute to a TRS, otherwise attractive investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income, increasing our income tax liability, and reducing amounts available for distribution to our stockholders.
These types of financing arrangements also involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced.
These types of financing arrangements also involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional 26 Table of Contents collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced.
If a U.S. stockholder sells the common stock that it 29 Table of Contents receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale.
If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale.
If we do obtain additional debt or financing, the substantial debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt or we may fail to comply with covenants contained in our debt agreements, which is likely to result in (1) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision), which we then may be unable to repay from internal funds or to refinance on favorable terms, or at all, (2) our inability to borrow undrawn amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements, which would result in a decrease in our liquidity, and/or (3) the loss of some or all of our collateral assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase in an amount sufficient to offset the higher financing costs; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; • we may not be able to refinance any debt that matures prior to the maturity (or realization) of an underlying investment it was used to finance on favorable terms or at all; and • we will have increased exposure to risks if the counterparties of our debt obligations are impacted by credit market turmoil or exposure to financial or other pressures. 25 Table of Contents There can be no assurance that a leveraging strategy will be successful and may subject us to increased risk of loss, harm our liquidity and could adversely affect our results of operations and financial condition.
If we do obtain additional debt or financing, the substantial debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt or we may fail to comply with covenants contained in our debt agreements, which is likely to result in (1) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision), which we then may be unable to repay from internal funds or to refinance on favorable terms, or at all, (2) our inability to borrow undrawn amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements, which would result in a decrease in our liquidity, and/or (3) the loss of some or all of our collateral assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase in an amount sufficient to offset the higher financing costs; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; • we may not be able to refinance any debt that matures prior to the maturity (or realization) of an underlying investment it was used to finance on favorable terms or at all; and • we will have increased exposure to risks if the counterparties of our debt obligations are impacted by credit market turmoil or exposure to financial or other pressures.
Competition for participating interests is dependent to a large degree upon market conditions. Participating interests are more difficult to obtain when real estate financing is available at relatively low 13 Table of Contents interest rates. Participating interests are not insured or guaranteed by any governmental entity and are therefore subject to the general risks inherent in real estate investments.
Competition for participating interests is dependent to a large degree upon market conditions. Participating interests are more difficult to obtain when real estate financing is available at relatively low interest rates. Participating interests are not insured or guaranteed by any governmental entity and are therefore subject to the general risks inherent in real estate investments.
Our Board of Directors, with the approval of a majority of our entire Board of Directors and without stockholder approval, may amend our charter to increase or decrease the aggregate number of authorized shares of 37 Table of Contents capital stock or the number of shares of capital stock of any class or series that we are authorized to issue.
Our Board of Directors, with the approval of a majority of our entire Board of Directors and without stockholder approval, may amend our charter to increase or decrease the aggregate number of authorized shares of capital stock or the number of shares of capital stock of any class or series that we are authorized to issue.
Any loss we incur may be significant, reduce distributions to stockholders and adversely affect the value of our common stock. Insurance may not cover all potential losses on CRE investments, which may impair the value of our assets.
Any loss we incur may be significant, reduce distributions to stockholders and adversely affect the value of our common stock. 19 Table of Contents Insurance may not cover all potential losses on CRE investments, which may impair the value of our assets.
Therefore, even if we are successful in making investments that provide for participating interests, there can be no assurance that such interests will result in additional payments to us. Any distressed loans or investments we make, or loans and investments that later become distressed, may subject us to losses and other risks relating to bankruptcy proceedings.
Therefore, even if we are successful in making investments that provide for participating interests, there can be no assurance that such interests will result in additional payments to us. 13 Table of Contents Any distressed loans or investments we make, or loans and investments that later become distressed, may subject us to losses and other risks relating to bankruptcy proceedings.
We invest in commercial properties subject to net leases. Typically, net leases require the tenants to pay substantially all of the operating costs associated with the properties.
We invest in commercial properties, including those subject to net leases. Typically, net leases require the tenants to pay substantially all of the operating costs associated with the properties.
Dividends payable by REITs to those U.S. stockholders, however, generally are not eligible for the current reduced rate, except to the extent that certain holding requirements have been met and a REIT’s dividends are attributable to dividends received by a REIT from taxable corporations (such as a taxable REIT subsidiary (“TRS”)), to income that was subject to tax at the REIT/corporate level, or to dividends properly designated by the REIT as “capital gains dividends.” Effective for taxable years before January 1, 2026, those U.S. stockholders may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends).
Dividends payable by REITs to those U.S. stockholders, however, generally are not eligible for the current reduced rate, except to the extent that certain holding requirements have been met and a REIT’s dividends are attributable to dividends received by a REIT from taxable corporations (such as a taxable REIT subsidiary (“TRS”)), to income that was subject to tax at the REIT/corporate level, or to dividends properly designated by the REIT as “capital gains dividends.” Those U.S. stockholders may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends).
We are subject to risks associated with obtaining mortgage financing on our real estate, which could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to stockholders. As of December 31, 2024, our portfolio had $587.2 million of total mortgage financing.
We are subject to risks associated with obtaining mortgage financing on our real estate, which could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to stockholders. As of December 31, 2025, our portfolio had $382.2 million of total mortgage financing.
GAAP purposes that are not recognized in computing our REIT taxable income; and • under the Tax Cut and Jobs Act of 2017, we generally must accrue income for U.S. federal income tax purposes no later than when such income is taken into account as revenue in our financial statements, which could create additional differences between REIT taxable income and the receipt of cash attributable to such income.
GAAP purposes that are not recognized in computing our REIT taxable income; and • we generally must accrue income for U.S. federal income tax purposes no later than when such income is taken into account as revenue in our financial statements, which could create additional differences between REIT taxable income and the receipt of cash attributable to such income.
In connection with the closing of the Mergers, we received an opinion of counsel to each of NorthStar I and NorthStar II to the effect that it qualified as a REIT for U.S. federal income tax purposes under the Code through the time of the Mergers.
In connection with the closing of NorthStar I and NorthStar II merging with and into the Company, (the “Mergers”), we received an opinion of counsel to each of NorthStar I and NorthStar II to the effect that it qualified as a REIT for U.S. federal income tax purposes under the Code through the time of the Mergers.
Concerns persist regarding the debt burden of certain Eurozone countries and their ability to meet future financial obligations. These concerns could materially adversely affect the value of our euro-denominated assets and obligations.
Concerns persist regarding the debt burden of certain Eurozone countries and their ability to meet future financial obligations. These concerns could materially adversely affect the value of our foreign assets and obligations.
Additionally, our Board of Directors may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of stock or the number of authorized shares of any class or series of stock without stockholder approval.
Additionally, our Board of 24 Table of Contents Directors may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of stock or the number of authorized shares of any class or series of stock without stockholder approval.
If the IRS challenged our treatment of these assets as real estate assets for purposes of the REIT asset tests, and if such a challenge were sustained, we could fail to meet the asset tests applicable to REITs and thus fail to qualify as a REIT. • The fact that we own direct or indirect interests in a number of entities that have elected to be taxed as REITs under the U.S. federal income tax laws (each, a “Subsidiary REIT”), further complicates the application of the REIT requirements for us.
If the IRS challenged our treatment of these assets as real estate 30 Table of Contents assets for purposes of the REIT asset tests, and if such a challenge were sustained, we could fail to meet the asset tests applicable to REITs and thus fail to qualify as a REIT. • The fact that we own or have owned direct or indirect interests in one or more entities that have elected to be taxed as REITs under the U.S. federal income tax laws (each, a “Subsidiary REIT”), further complicates the application of the REIT requirements for us.
In addition, these laws and regulations could lead to increased costs for the electricity that our tenants require to conduct operations. Furthermore, our reputation could be damaged if we violate climate change laws or regulations at the corporate and/or investment level.
In addition, these laws and regulations could lead to increased costs for the electricity that our tenants require to 36 Table of Contents conduct operations. Furthermore, our reputation could be damaged if we violate climate change laws or regulations at the corporate and/or investment level.
Our rights to control the process following a borrower default may be subject to the rights of senior or junior creditors or servicers whose interests may not be aligned with ours.
Our rights to control the process following a borrower default may be subject to the rights of senior or junior 18 Table of Contents creditors or servicers whose interests may not be aligned with ours.
Slower than expected economic growth pressured by a strained labor market, could result in lower occupancy rates and lower lease rates across many property types, which could create obstacles for us to achieve our business plans.
Slower than expected economic growth pressured by a strained labor market, could result in lower occupancy 16 Table of Contents rates and lower lease rates across many property types, which could create obstacles for us to achieve our business plans.
If 34 Table of Contents we are required to increase our level of allowance for loan losses for any reason, such increase may affect our business, financial condition and results of operations.
If we are required to increase our level of allowance for loan losses for any reason, such increase may affect our business, financial condition and results of operations.
Apart from the fact that income from those TRSs may be subject to U.S. federal, foreign, state and local income tax on their taxable income and only their after-tax net income is available for distribution to us, our use of the TRS for this purpose is subject to certain costs, risks and limitations: • No more than 20% of the value of our gross assets may consist of stock or securities of one or more TRSs. • The TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation.
Apart from the fact that income from those TRSs may be subject to U.S. federal, foreign, state and local income tax on their taxable income and only their after-tax net income is available for distribution to us, our use of the TRS for this purpose is subject to certain costs, risks and limitations: • No more than 25% (20% for taxable years between January 1, 2018 and December 31, 2025) of the value of our gross assets may consist of stock or securities of one or more TRSs. • The TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation.
That deficiency dividend procedure could require us to make significant distributions to our stockholders and to pay significant interest to the IRS. Dividends payable by REITs do not qualify for the preferential tax rates available for some dividends.
That deficiency dividend procedure could require us to make significant distributions to our stockholders and to pay significant interest to the IRS. 31 Table of Contents Dividends payable by REITs do not qualify for the preferential tax rates available for some dividends.
Unforeseen global events such as the COVID-19 pandemic may create significant dislocation in the financial markets, which could impact our lenders’ willingness or ability to provide us with financing and we could be forced to sell our assets at an inopportune time when prices are depressed.
Unforeseen global events may create significant dislocation in the financial markets, which could impact our lenders’ willingness or ability to provide us with financing and we could be forced to sell our assets at an inopportune time when prices are depressed.
In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more lending relationships than we can.
Taken together, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more lending relationships than we can.
A variety of factors could make it difficult for us to dispose of any of our assets on acceptable terms even if a disposition is in the best interests of stockholders.
Many of our investments are illiquid. A variety of factors could make it difficult for us to dispose of any of our assets on acceptable terms even if a disposition is in the best interests of stockholders.
The office market has seen a shift in the use of space due to the availability of practices such as telecommuting, videoconferencing and, prior to the pandemic, renting shared work spaces. These trends have led to more efficient workspace layouts and higher percentages of employees working from home and, therefore, a decrease in square feet leased per employee.
The office market has seen a shift in the use of space due to the availability of practices such as telecommuting, videoconferencing and renting shared work spaces. These trends have led to more efficient workspace layouts and employees being able to work from home and, therefore, a decrease in square feet leased per employee.
There are substantial risks associated with such an investment. Laws, regulations, corporate responsibility and/or environmental, social and governance (“ESG”) initiatives or other issues related to climate change could have a material adverse effect on us.
There are substantial risks associated with such an investment. Laws, regulations, corporate responsibility and/or sustainability-related initiatives or other issues related to climate change could have a material adverse effect on us.
Our investment strategy may not be successful in locating suitable investments on financially attractive terms. If we, are unable to find and allocate suitable investments promptly, we may hold the funds available for investment in an interest-bearing account or invest the proceeds in short-term assets. We expect that the income we earn on these temporary investments will not be substantial.
If we, are unable to find and allocate suitable investments promptly, we may hold the funds available for investment in an interest-bearing account or invest the proceeds in short-term assets. We expect that the income we earn on these temporary investments will not be substantial.
Additionally, for tax years beginning after December 31, 2022, we would possibly also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible one percent excise tax on certain stock repurchases.
Additionally, we would possibly also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible one percent excise tax on certain stock repurchases.
As a result, our economic performance, the value of our CRE debt and debt-like investments, real estate and real estate-related investments, and our ability to implement our business strategies may be significantly and adversely affected by changes in economic conditions in the United States where all but one of our investments is located and in international geographic areas, as applicable.
As a result, our economic performance, the value of our CRE debt and debt-like investments, real estate and real estate-related investments, and our ability to implement our business strategies may be significantly and adversely affected by changes in economic conditions in the United States and in international geographic areas where we may invest in the future.
Pursuant to this revenue procedure, effective for distributions declared on or after August 11, 2017, the IRS will treat the distribution of stock pursuant to an elective stock dividend as a distribution of property under Section 301 of the Code (i.e., as a dividend to the extent of our earnings and profits), as long as at least 20% of the total dividend is available in cash and certain other requirements outlined in the revenue procedure are met.
Pursuant to the IRS Revenue Procedure 2017-45, the IRS will treat the distribution of stock pursuant to an elective stock dividend as a distribution of property under Section 301 of the Code (i.e., as a dividend to the extent of our earnings and profits), as long as at least 20% of the total dividend is available in cash and certain other requirements outlined in the revenue procedure are met.
The exercise of remedies and successful realization of liquidation proceeds relating to CRE securities may be highly dependent upon the performance of the servicer or special servicer. Ratings for CRE securities can also adversely affect their value. Our investments in CMBS and CDOs are also subject to losses.
The exercise of remedies and successful realization of liquidation proceeds relating to CRE securities may be highly dependent upon the performance of the servicer or special servicer. Ratings for CRE securities can also adversely affect their value.
A 24 Table of Contents cybersecurity incident may also require significant resources or management attention to remedy any damages.
A cybersecurity incident may also require significant resources or management attention to remedy any damages.
We may incur adverse tax consequences if NorthStar I or NorthStar II were to have failed to qualify as a REIT for U.S. federal income tax purposes prior to the Mergers.
We may incur adverse tax consequences if NorthStar I or NorthStar II were to have failed to qualify as a REIT prior to the Mergers.
There has been increasing commentary amongst regulators and intergovernmental institutions on the role of nonbank institutions in providing credit and, particularly, so-called “shadow banking,” a term generally referring to credit intermediation involving entities and activities outside the regulated banking system and increased oversight and regulation of such entities.
Regulators and intergovernmental institutions have considered the role of nonbank institutions in providing credit and, particularly, so-called “shadow banking,” a term generally referring to credit intermediation involving entities and activities outside the regulated banking system and increased oversight and regulation of such entities.
Conversely, we may decide from time to time to close out, or terminate a portion of, our outstanding hedges upon the determination that they are no longer effective, which may result in incurring realized losses and increased exposure to interest rate and currency risks, which may have an adverse effect on the value of our loans, securities, long-term debt obligations and other assets we own that are sensitive to changes in benchmark interest and currency rates. 27 Table of Contents We use short-term borrowings to finance our investments, and we may need to use such borrowings for extended periods of time to the extent we are unable to access long-term financing.
Conversely, we may decide from time to time to close out, or terminate a portion of, our outstanding hedges upon the determination that they are no longer effective, which may result in incurring realized losses and increased exposure to interest rate and currency risks, which may have an adverse effect on the value of our loans, securities, long-term debt obligations and other assets we own that are sensitive to changes in benchmark interest and currency rates.
Rising interest rates, declining employment levels, declining demand for real estate, declining real estate values or periods of general economic slowdown or recession, public health crises such as the COVID-19 pandemic, increasing political instability or uncertainty, or the perception that any of these events may occur have negatively impacted the real estate market in the past and may in the future negatively impact our operating performance.
Rising interest rates, increased costs including due to tariffs, declining employment levels and changes in immigration policies, declining demand for real estate, declining real estate values or periods of general economic slowdown or recession, public health crises, increasing political instability or uncertainty, or the perception that any of these events may occur have negatively impacted the real estate market in the past and may in the future negatively impact our operating performance.
Shifts in consumer patterns, work from home policies and advances in communication and information technology that affect the use of traditional retail, hotel and office space may have an adverse impact on the value of certain of our debt and equity investments.
Shifts in consumer patterns, market disruption caused by artificial intelligence, automation and logistics, and continuing variability in work from home policies, influenced by advances in communication and information technology that affect the use of traditional retail, hotel and office space may have an adverse impact on the value of certain of our debt and equity investments.
Although REITs generally receive certain tax advantages compared to entities taxed as C corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a C corporation. 33 Table of Contents Our ownership of assets and conduct of operations through our TRSs is limited and involves certain risks for us.
Although REITs generally receive certain tax advantages compared to entities taxed as C corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a C corporation.
In addition, in general, no more than 5% of the value of our assets (other than qualified 75% asset test assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total assets can be represented by stock or securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our assets (other than qualified 75% asset test assets) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets (20% for taxable years between January 1, 2018 and December 31, 2025) can be represented by stock or securities of one or more TRSs.
Compliance with any increased regulation of non-bank credit extension could require changes to 36 Table of Contents certain of our business practices, negatively impact our operations, cash flows or financial condition or impose additional costs on us. The market price of our common stock may fluctuate significantly.
Compliance with any increased regulation of non-bank credit extension could require changes to certain of our business practices, negatively impact our operations, cash flows or financial condition or impose additional costs on us. The market price of our common stock may fluctuate significantly. The capital and credit markets have from time to time experienced periods of extreme volatility and disruption.
Further, future funding obligations may require us to maintain higher liquidity than we might otherwise maintain and this could reduce the overall return on our investments.
Further, future funding obligations may require us to maintain higher liquidity than we might otherwise maintain and this could reduce the overall return on our investments. We could also find ourselves in a position with insufficient liquidity to fund future obligations.
There can be no assurance that the value of the assets securing our commercial mortgage loans will not deteriorate over time due to factors beyond our control, as was the case during the credit crisis and the economic recession that began in 2008 or in asset volatility experienced during the COVID-19 pandemic.
There can be no assurance that the value of the assets securing our commercial mortgage loans will not deteriorate over time due to factors beyond our control, such as the asset volatility experienced during the COVID-19 pandemic.
If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration and other matters.
If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration and other matters. 29 Table of Contents We, through our subsidiary, are subject to extensive regulation, including as an investment adviser in the United States, which could adversely affect our ability to manage our business.
The capital and credit markets have from time to time experienced periods of extreme volatility and disruption. The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance.
The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance.
There is a possibility that we may incur substantial or total losses on our investments and in certain circumstances, become subject to certain additional potential liabilities that may exceed the value of our original investment therein.
These financial difficulties may never be overcome and may cause borrowers to become subject to bankruptcy or other similar administrative proceedings. There is a possibility that we may incur substantial or total losses on our investments and in certain circumstances, become subject to certain additional potential liabilities that may exceed the value of our original investment therein.
Investment in the securities of financially troubled issuers and operationally troubled issuers involves a high degree of credit and market risk.
Investment in the interests in real estate that become distressed or securities of financially troubled issuers and operationally troubled issuers or sponsors involves a high degree of credit and market risk.
In addition, net leases typically have longer lease terms and, thus, there is an increased risk that contractual rental increases or renewal rights and associated rates in future years will fail to result in fair market rental rates during those years. 15 Table of Contents We may acquire these investments through sale-leaseback transactions, which involve the purchase of a property and the leasing of such property back to the seller thereof.
In addition, net leases typically have longer lease terms and, thus, there is an increased risk that contractual rental increases or renewal rights and associated rates in future years will fail to result in fair market rental rates during those years. 15 Table of Contents We have and may continue to acquire properties through foreclosure or deed-in-lieu of foreclosure.
We use our TRSs to hold assets and earn income that would not be qualifying assets or income if held or earned directly by us.
Our ownership of assets and conduct of operations through our TRSs is limited and involves certain risks for us. We use our TRSs to hold assets and earn income that would not be qualifying assets or income if held or earned directly by us.
Currently, we have no warehouse facilities in place, and no assurance can be given that we will be able to obtain one or more. 28 Table of Contents Risks Related to Regulatory Matters The loss of our Investment Company Act exclusion could require us to register as an investment company or substantially change the way we conduct our business, either of which may have an adverse effect on us and the value of our common stock.
Risks Related to Regulatory Matters The loss of our Investment Company Act exclusion could require us to register as an investment company or substantially change the way we conduct our business, either of which may have an adverse effect on us and the value of our common stock.
Our operations in Europe and in the future, other foreign countries expose our business to risks inherent in conducting business in foreign markets. A portion of our revenues are sourced from our foreign operations in Europe and elsewhere or other foreign markets. Accordingly, our firm-wide results of operations depend in part on our foreign operations.
Our recent operations in Europe and in the future, other foreign countries expose our business to risks inherent in conducting business in foreign markets. A portion of our revenues have been and may be sourced from our foreign operations in Europe and elsewhere or other foreign markets.
Our borrowers may be similarly impacted at the properties they own, which may negatively impact their ability to make timely payments to us, and we may experience a reduction in net income and be required to reduce or eliminate cash distributions to stockholders. 19 Table of Contents Our investment strategy may not be successful, or there may be delays, in locating or allocating suitable investments, which could limit our ability to make distributions and lower the overall return on stockholders’ investment.
Our borrowers may be similarly impacted at the properties they own, which may negatively impact their ability to make timely payments to us, and we may experience a reduction in net income and be required to reduce or eliminate cash distributions to stockholders.
Further, in some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction.
In addition, disagreements or disputes between us and our joint venture partner could result in litigation, which could increase our expenses and potentially limit the time and effort our officers and directors are able to devote to our business. 21 Table of Contents Further, in some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs of December 31, 2024, we have not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect.
Biggest changeAs of December 31, 2025, we have not had any known cybersecurity incidents or third-party incidents that have materially affected the business strategy, results of operations or financial condition of the Company or are reasonably likely to have such a material effect.
Cybersecurity and information security, administered by our Head of IT and BrightSpire IT Partner (each, as defined below), is a key component of our broader ERM program, which includes diverse internal management, financial reporting, legal, compliance and risk management controls, policies and procedures primarily under the supervision of senior management.
Cybersecurity and information security, administered by our Head of IT and BrightSpire IT Partner (each, as 38 Table of Contents defined below), is a key component of our broader ERM program, which includes diverse internal management, financial reporting, legal, compliance and risk management controls, policies and procedures primarily under the supervision of senior management.
The Information Security Group undertakes table-top business disruption, disaster recovery and related response strategies and plans on a periodic basis and seeks to review and update applicable policies and procedures at least annually. No Material Incidents .
The Information Security Group undertakes table-top business disruption, disaster recovery and related response strategies and plans on a periodic basis and seeks to review and update applicable policies and procedures at least annually. 39 Table of Contents No Material Incidents .
Employees working from home may only connect and conduct business activities through a virtual private network (VPN). • Security First Approach : Our cloud-based systems take a security first approach, including: (i) Perimeter Security (firewalls, antivirus, malware); (ii) Network Security (secure remote access, network patch management); (iii) Application Security (patch management, multi-factor authentication); (iv) Endpoint Security (email security/encryption, web filtering & URL defense, mobile device management); and (v) Data Security. 38 Table of Contents Cybersecurity Systems Review.
Employees working from home may only connect and conduct business activities through a virtual private network (VPN). • Security First Approach : Our cloud-based systems take a security first approach, including: (i) Perimeter Security (firewalls, antivirus, malware); (ii) Network Security (secure remote access, network patch management); (iii) Application Security (patch management, multi-factor authentication); (iv) Endpoint Security (email security/encryption, web filtering & URL defense, mobile device management); and (v) Data Security.
Since inception in January 2018, we are not aware of any cybersecurity or information security incidents that have materially affected us to date. We have not incurred any expenses due to material information security incident penalties or settlements. However, evolving cybersecurity threats make it increasingly challenging to anticipate, detect, and defend against cybersecurity threats and incidents.
During the prior three fiscal years, we are not aware of any cybersecurity or information security incidents that have materially affected us to date. We have not incurred any expenses due to material information security incident penalties or settlements. However, evolving cybersecurity threats make it increasingly challenging to anticipate, detect, and defend against cybersecurity threats and incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Information regarding our investment properties at December 31, 2024 are included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Net Leased and Other Real Estate” and “Item 15. Exhibits and Financial Statement Schedules—Schedule III. Real Estate and Accumulated Depreciation” of this Annual Report.
Biggest changeItem 2. Properties Information regarding our investment properties at December 31, 2025 are included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Net Leased and Other Real Estate” and “Item 15. Exhibits and Financial Statement Schedules—Schedule III. Real Estate and Accumulated Depreciation” of this Annual Report.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe cumulative total return on our Class A common stock as presented is not necessarily indicative of future performance of our Class A common stock. Prior to 2024, we utilized the Bloomberg REIT Mortgage Index (the “BBREMTG Index”) as our published industry index. The BBREMTG Index ceased publishing in 2024, requiring us to switch to the FNMRC Index. Item 6.
Biggest changeThe cumulative total return on our Class A common stock as presented is not necessarily indicative of future performance of our Class A common stock.
Stock Performance Graph The following graph compares the cumulative total return on our Class A common stock with the cumulative total returns on the Russell 2000 Index (the “Russell 2000”) and the FTSE NAREIT All Mortgage Capped Index (the “FNMRC Index”), a published industry index from January 1, 2020 to December 31, 2024.
Stock Performance Graph The following graph compares the cumulative total return on our Class A common stock with the cumulative total returns on the Russell 2000 Index (the “Russell 2000”) and the FTSE NAREIT All Mortgage Capped Index (the “FNMRC Index”), a published industry index from January 1, 2021 to December 31, 2025.
Common Stock 2024 Ordinary income $ 0.25 Return of capital 0.51 Total $ 0.76 2023 Ordinary income $ — Return of capital 0.80 Total $ 0.80 2022 Ordinary income $ 0.64 Return of capital 0.13 Total $ 0.77 For the year ended December 31, 2024, we paid aggregate dividends of $99.1 million to our Class A common stockholders.
Common Stock 2025 Ordinary income $ — Return of capital 0.64 Total $ 0.64 2024 Ordinary income $ 0.25 Return of capital 0.51 Total $ 0.76 2023 Ordinary income $ — Return of capital 0.80 Total $ 0.80 For the year ended December 31, 2025, we paid aggregate dividends of $83.0 million to our Class A common stockholders.
As of February 18, 2025, the closing price of our Class A common stock was $5.97 and we had approximately 129.7 million shares of Class A common stock outstanding held by a total of 2,715 holders of record. This figure does not reflect the beneficial ownership of shares held in nominee name.
As of February 17, 2026, the closing price of our Class A common stock was $5.80 and we had approximately 128.6 million shares of Class A common stock outstanding held by a total of 2,538 holders of record. This figure does not reflect the beneficial ownership of shares held in nominee name.
Removed
Unregistered Sales of Equity Securities and Use of Proceeds There were no sales of unregistered securities of our Company during the year ended December 31, 2024. 40 Table of Contents Purchases of Equity Securities by Issuer The Company did not repurchase any of its Class A common stock during the three months ended December 31, 2024.
Added
Unregistered Sales of Equity Securities and Use of Proceeds There were no sales of unregistered securities of our Company during the year ended December 31, 2025. 41 Table of Contents Purchases of Equity Securities by Issuer The following table summarizes the repurchase of Class A common stock for the three months ended December 31, 2025 (in thousands, except per share data): Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (1) October 1-31, 2025 — $ — — $ — November 1-30, 2025 1,082 5.39 1,082 40,299 December 1-31, 2025 24 5.70 24 40,164 Total 1,106 $ 5.39 1,106 $ 40,164 ________________________________________ (1) In April 2025, the Company’s board of directors authorized a Stock Repurchase Program under which the Company may repurchase up to $50.0 million of its outstanding Class A common stock until April 30, 2026.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCarrying value (at BRSP share) Region Count Senior loans Mezzanine loans Total % of Total US West 34 $ 1,125,762 $ 30,777 $ 1,156,539 45.9 % US Southwest 28 862,078 — 862,078 34.2 % US Northeast 8 313,255 14,355 327,610 13.0 % US Southeast 6 172,698 — 172,698 6.9 % Total 76 $ 2,473,793 $ 45,132 $ 2,518,925 100.0 % 47 Table of Contents The following table provides asset level detail for our senior and mezzanine loans as of December 31, 2024 (dollars in thousands): Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Multifamily Loan 1 (6) Senior 6/18/2019 Santa Clara, CA $ 57,442 $ 57,442 Floating 5.5% 9.8% 2/19/2025 69% 5 Loan 2 Senior 5/17/2022 Las Vegas, NV 55,350 54,866 Floating 2.0% 7.9% 6/9/2027 74% 4 Loan 3 Senior 3/8/2022 Austin, TX 50,424 50,324 Floating 3.3% 7.6% 3/9/2027 75% 3 Loan 4 Senior 7/19/2021 Dallas, TX 50,333 50,200 Floating 3.4% 7.7% 8/9/2026 74% 3 Loan 5 Senior 5/26/2021 Las Vegas, NV 47,476 47,235 Floating 3.5% 7.8% 6/9/2026 70% 3 Loan 6 Senior 3/31/2022 Louisville, KY 43,468 43,371 Floating 3.7% 8.0% 4/9/2027 72% 3 Loan 7 Senior 7/15/2021 Jersey City, NJ 43,108 43,000 Floating 3.1% 7.4% 8/9/2026 66% 3 Loan 8 Senior 7/15/2021 Dallas, TX 40,338 40,338 Floating 3.2% 7.5% 8/9/2026 77% 3 Loan 9 Senior 12/7/2021 Denver, CO 40,050 40,050 Floating 3.3% 7.6% 12/9/2026 74% 4 Loan 10 Senior 3/31/2022 Long Beach, CA 39,536 39,536 Floating 3.4% 7.7% 4/9/2027 80% 3 Subtotal top 10 multifamily $ 467,525 $ 466,362 19% of total loans Loan 11 Senior 7/12/2022 Irving, TX $ 38,378 $ 38,379 Floating 3.6% 7.9% 8/9/2027 75% 3 Loan 12 Senior 12/21/2020 Austin, TX 37,000 37,000 Floating 3.2% 7.5% 1/9/2026 54% 3 Loan 13 Senior 1/18/2022 Dallas, TX 36,704 36,564 Floating 3.5% 7.8% 2/9/2027 75% 3 Loan 14 Senior 1/12/2022 Los Angeles, CA 36,341 36,361 Floating 3.4% 8.0% 2/9/2027 76% 3 Loan 15 Senior 7/29/2021 Phoenix, AZ 33,325 33,325 Floating 3.4% 7.7% 8/9/2026 73% 3 Loan 16 Senior 3/31/2021 Mesa, AZ 32,610 32,131 Floating 3.8% 11.4% 4/9/2026 71% 3 Loan 17 Senior 4/29/2021 Las Vegas, NV 30,794 30,792 Floating 3.2% 7.5% 5/9/2026 76% 3 Loan 18 Mezzanine 2/8/2022 Las Vegas, NV 30,777 30,782 Fixed 7.0% 12.3% 2/8/2027 56%-79% 3 Loan 19 Senior 2/17/2022 Long Beach, CA 30,137 30,137 Floating 3.4% 7.7% 3/9/2027 71% 3 Loan 20 Senior 4/15/2022 Mesa, AZ 30,134 30,160 Floating 3.4% 8.0% 5/9/2027 75% 3 Subtotal top 20 multifamily $ 803,725 $ 801,993 32% of total loans 48 Table of Contents Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Loan 21 Senior 8/31/2021 Glendale, AZ $ 28,820 $ 28,802 Floating 3.3% 7.6% 9/9/2026 75% 3 Loan 22 Senior 5/27/2021 Houston, TX 27,600 27,600 Floating 3.1% 7.4% 6/9/2026 67% 3 Loan 23 Senior 12/16/2021 Fort Mill, SC 27,365 27,366 Floating 3.3% 7.9% 1/9/2027 71% 3 Loan 24 Senior 12/21/2021 Phoenix, AZ 25,589 25,596 Floating 3.6% 8.3% 1/9/2027 75% 3 Loan 25 Senior 7/12/2022 Irving, TX 25,433 25,433 Floating 3.6% 7.9% 8/9/2027 72% 3 Loan 26 Senior 3/8/2022 Glendale, AZ 25,018 25,046 Floating 3.5% 8.1% 3/9/2027 73% 3 Loan 27 Senior 3/31/2022 Phoenix, AZ 23,841 23,847 Floating 3.7% 8.3% 4/9/2027 74% 3 Loan 28 Senior 11/4/2021 Austin, TX 23,353 23,353 Floating 3.4% 7.9% 11/9/2026 78% 3 Loan 29 Senior 6/22/2021 Phoenix, AZ 22,292 22,292 Floating 3.3% 7.6% 7/9/2026 71% 3 Loan 30 Senior 7/13/2021 Oregon City, OR 22,154 22,096 Floating 3.4% 7.7% 8/9/2026 73% 3 Loan 31 Senior 7/1/2021 Aurora, CO 21,273 21,261 Floating 3.2% 7.6% 7/9/2026 73% 3 Loan 32 Senior 12/10/2024 Seattle, WA 20,760 21,000 Floating 2.8% 7.6% 1/9/2030 65% 3 Loan 33 Senior 1/12/2022 Austin, TX 20,187 20,187 Floating 3.4% 7.7% 2/9/2027 76% 3 Loan 34 Senior 8/6/2021 La Mesa, CA 19,752 19,752 Floating 3.0% 7.3% 8/9/2025 72% 3 Loan 35 Senior 10/18/2024 Garland, TX 19,655 19,920 Floating 3.7% 8.3% 11/9/2029 70% 3 Loan 36 Senior 12/21/2021 Gresham, OR 19,455 19,455 Floating 3.6% 7.9% 1/9/2027 76% 3 Loan 37 Senior 9/1/2021 Bellevue, WA 19,308 19,308 Floating 3.0% 7.3% 9/9/2025 71% 3 Loan 38 Senior 5/5/2022 Charlotte, NC 18,500 18,500 Floating 3.5% 7.8% 5/9/2027 70% 3 Loan 39 Senior 7/14/2021 Salt Lake City, UT 18,362 18,315 Floating 3.4% 7.7% 8/9/2026 73% 3 Loan 40 Senior 4/29/2022 Tacoma, WA 18,331 18,331 Floating 3.0% 7.3% 5/9/2027 64% 3 Loan 41 Senior 6/25/2021 Phoenix, AZ 17,650 17,650 Floating 3.2% 7.6% 7/9/2026 75% 3 Loan 42 Senior 11/22/2024 Garland, TX 12,242 12,399 Floating 3.5% 8.1% 12/9/2029 63% 3 Loan 43 Senior 3/8/2022 Glendale, AZ $ 11,651 $ 11,664 Floating 3.5% 8.1% 3/9/2027 73% 3 Total/Weighted average multifamily loans $ 1,292,316 $ 1,291,166 51% of total loans 3.5% 8.1% 1.9 years 3.2 49 Table of Contents Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Office Loan 44 Senior 1/19/2021 Phoenix, AZ $ 76,325 $ 76,325 Floating 3.7% 8.0% 2/9/2026 70% 3 Loan 45 Senior 8/28/2018 San Jose, CA 74,070 74,071 Floating 2.6% 6.9% 8/28/2025 81% 3 Loan 46 Senior 2/13/2019 Baltimore, MD 58,606 58,606 Floating 3.6% 7.9% 2/9/2025 74% 3 Loan 47 Senior 11/23/2021 Tualatin, OR 42,104 40,961 Floating 1.5% 5.8% 12/9/2026 66% 4 Loan 48 Senior 4/27/2022 Plano, TX 41,179 41,101 Floating 4.1% 8.4% 5/9/2027 70% 3 Loan 49 Senior 5/23/2022 Plano, TX 40,802 40,720 Floating 4.3% 8.6% 6/9/2027 64% 3 Loan 50 Senior 9/28/2021 Reston, VA 40,251 39,682 Floating 2.1% 8.4% 10/9/2026 71% 4 Loan 51 Senior 11/17/2021 Dallas, TX 39,869 39,869 Floating 4.0% 8.3% 12/9/2025 61% 4 Loan 52 Senior 4/7/2022 San Jose, CA 33,906 33,906 Floating 4.2% 8.5% 4/9/2027 70% 3 Loan 53 Senior 4/30/2021 San Diego, CA 33,663 33,663 Floating 3.6% 8.0% 5/9/2026 55% 3 Subtotal top 10 office loans $ 480,775 $ 478,904 19% of total loans Loan 54 Senior 3/31/2022 Blue Bell, PA $ 28,854 $ 28,854 Floating 4.2% 8.5% 4/9/2025 80% 3 Loan 55 Senior 10/21/2021 Blue Bell, PA 28,623 28,624 Floating 3.8% 8.1% 4/9/2025 78% 3 Loan 56 Senior 2/26/2019 Charlotte, NC 27,653 27,653 Floating 3.3% 7.7% 7/9/2025 72% 3 Loan 57 Senior 12/7/2018 Carlsbad, CA 26,912 26,500 Floating 3.9% 8.2% 12/9/2025 73% 3 Loan 58 Senior 12/7/2021 Hillsboro, OR 25,738 25,738 Floating 4.0% 8.3% 2/9/2025 77% 3 Loan 59 Senior 7/30/2021 Denver, CO 24,413 24,413 Floating 4.4% 8.7% 8/9/2026 66% 3 Loan 60 Senior 9/16/2019 San Francisco, CA 24,001 24,001 Floating 3.3% 7.6% 1/9/2025 54% 3 Loan 61 Senior 8/27/2019 San Francisco, CA 22,716 22,716 Floating 2.9% 7.3% 3/9/2025 84% 3 Loan 62 Senior 10/13/2021 Burbank, CA 18,216 18,216 Floating 4.0% 8.3% 11/9/2026 51% 3 Loan 63 Senior 10/29/2020 Denver, CO 17,937 17,937 Floating 3.7% 8.0% 11/9/2025 64% 3 Subtotal top 20 office loans $ 725,838 $ 723,556 29% of total loans Loan 64 Senior 11/16/2021 Charlotte, NC $ 15,460 $ 15,466 Floating 4.5% 8.8% 12/9/2026 67% 3 Loan 65 (7) Mezzanine 2/13/2023 Baltimore, MD 14,355 14,355 n/a (7) n/a (7) n/a (7) 2/7/2025 74%-75% 3 Loan 66 Senior 11/10/2021 Richardson, TX 12,964 12,932 Floating 4.1% 8.4% 12/9/2026 68% 3 Total/Weighted average office loans $ 768,617 $ 766,309 31% of total loans 3.4% 7.8% 1.1 years 3.2 50 Table of Contents Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Hotel Loan 67 (8) Senior 1/2/2018 San Jose, CA $ 135,979 $ 135,979 n/a (8) n/a (8) n/a (8) 11/9/2026 76% 5 Loan 68 Senior 6/25/2018 Englewood, CO 72,152 72,000 Floating 3.5% 8.1% 5/9/2025 68% 3 Total/Weighted average hotel loans $ 208,131 $ 207,979 1.2% 2.8% 1.3 years 4.3 Other (Mixed-use) Loan 69 Senior 10/24/2019 Brooklyn, NY $ 79,308 $ 79,308 Floating 4.2% 8.5% 11/9/2025 79% 3 Loan 70 Senior 1/13/2022 New York, NY 46,090 46,090 Floating 3.5% 7.8% 2/9/2027 76% 3 Loan 71 Senior 6/2/2021 South Pasadena, CA 33,893 33,808 Floating 5.0% 9.5% 6/9/2026 71% 3 Loan 72 Senior 5/3/2022 Brooklyn, NY 28,665 28,665 Floating 4.4% 8.7% 5/9/2027 68% 3 Loan 73 Senior 8/31/2021 Los Angeles, CA 15,888 15,888 Floating 4.6% 8.9% 9/9/2026 58% 3 Loan 74 Senior 4/3/2024 South Pasadena, CA $ 10,340 $ 10,340 Floating 9.8% 15.1% 1/9/2025 84% 3 Total/Weighted average other (mixed-use) loans $ 214,184 $ 214,099 4.5% 8.9% 1.4 years 3.0 Industrial Loan 75 Senior 7/13/2022 Ontario, CA $ 24,083 $ 24,131 Floating 3.3% 8.0% 8/9/2027 66% 3 Loan 76 Senior 3/21/2022 Commerce, CA 11,594 11,594 Floating 3.3% 7.6% 4/9/2027 60% 3 Total/Weighted average industrial loans $ 35,677 $ 35,725 3.3% 7.8% 2.5 years 3.0 Total/Weighted average senior and mezzanine loans - Our Portfolio $ 2,518,925 $ 2,515,278 3.4% 7.6% 1.6 years 3.2 _________________________________________ (1) Represents carrying values at our share as of December 31, 2024 and excludes general CECL reserves.
Biggest changeLouis, MO 52,470 53,000 Floating 2.5% 6.7% 1/9/2031 68% 3 Loan 5 Senior 5/26/2021 Las Vegas, NV 48,317 47,685 Floating 3.0% 8.4% 6/9/2026 89% 3 Loan 6 (6) Senior 7/19/2021 Dallas, TX 45,200 44,963 Floating 3.4% 7.3% 8/9/2026 74% 5 Loan 7 Senior 7/15/2021 Jersey City, NJ 41,887 41,779 Floating 3.1% 6.8% 8/9/2026 70% 3 Loan 8 Senior 3/31/2022 Louisville, KY 41,206 41,096 Floating 2.8% 6.5% 4/9/2027 70% 3 Loan 9 Senior 12/30/2025 Madison, AL 41,085 41,500 Floating 2.5% 6.5% 1/9/2031 75% 3 Loan 10 Senior 7/15/2021 Dallas, TX 40,338 40,338 Floating 3.2% 6.9% 8/9/2026 76% 3 Subtotal top 10 multifamily $ 506,614 $ 506,027 19% of total loans Loan 11 Senior 11/6/2025 Mesa, AZ $ 40,180 $ 40,623 Floating 2.6% 6.6% 11/9/2030 68% 3 Loan 12 Senior 3/31/2022 Long Beach, CA 39,976 39,976 Floating 3.4% 7.1% 4/9/2027 86% 3 Loan 13 Senior 7/12/2022 Irving, TX 38,418 38,379 Floating 3.6% 7.4% 8/9/2027 75% 3 Loan 14 Senior 12/21/2020 Austin, TX 37,000 37,000 Floating 3.2% 7.2% 1/9/2026 74% 3 Loan 15 Senior 1/12/2022 Los Angeles, CA 36,470 36,470 Floating 3.4% 7.0% 2/9/2027 76% 3 Loan 16 Senior 3/8/2022 Austin, TX 36,240 36,140 Floating 3.3% 6.9% 3/9/2027 75% 5 Loan 17 Mezzanine 2/8/2022 Las Vegas, NV 34,377 34,377 Fixed 7.0% 12.0% 2/8/2027 57%-82% 3 Loan 18 Senior 7/29/2021 Phoenix, AZ 33,326 33,326 Floating 3.4% 7.1% 8/9/2026 73% 3 Loan 19 Senior 2/20/2025 Las Vegas, NV 32,804 33,000 Floating 3.4% 7.6% 3/9/2030 59% 3 Loan 20 Senior 12/23/2025 Jackson, TN 32,670 33,000 Floating 3.0% 7.0% 1/9/2031 62% 3 Subtotal top 20 multifamily $ 868,075 $ 868,318 32% of total loans 50 Table of Content s Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Loan 21 Senior 10/14/2025 San Antonio, TX $ 32,040 $ 32,340 Floating 2.6% 6.8% 11/9/2030 68% 3 Loan 22 Senior 4/29/2021 Las Vegas, NV 30,978 30,978 Floating 3.2% 6.9% 5/9/2026 76% 3 Loan 23 Senior 2/17/2022 Long Beach, CA 30,922 30,922 Floating 3.4% 7.0% 3/9/2027 71% 3 Loan 24 Senior 1/18/2022 Dallas, TX 30,640 30,481 Floating 3.5% 7.4% 2/9/2027 75% 5 Loan 25 Senior 4/15/2022 Mesa, AZ 30,160 30,160 Floating 3.4% 7.0% 5/9/2027 75% 3 Loan 26 Senior 2/13/2025 Las Vegas, NV 29,596 29,773 Floating 2.7% 6.8% 3/9/2030 70% 3 Loan 27 Senior 8/31/2021 Glendale, AZ 28,889 28,802 Floating 3.3% 7.0% 3/9/2027 79% 3 Loan 28 Senior 9/18/2025 Nashville, TN 28,659 28,939 Floating 2.6% 6.6% 10/9/2030 68% 3 Loan 29 Senior 9/26/2025 Nashville, TN 27,747 28,000 Floating 2.7% 6.9% 10/9/2030 65% 3 Loan 30 Senior 5/27/2021 Houston, TX 27,600 27,600 Floating 3.1% 6.8% 6/9/2026 77% 3 Loan 31 Senior 12/21/2021 Phoenix, AZ 25,596 25,596 Floating 3.6% 7.3% 1/9/2027 75% 3 Loan 32 Senior 7/12/2022 Irving, TX 25,459 25,433 Floating 3.6% 7.4% 8/9/2027 72% 3 Loan 33 Senior 3/8/2022 Glendale, AZ 25,046 25,046 Floating 3.5% 7.1% 3/9/2027 73% 3 Loan 34 Senior 2/25/2025 Denver, CO 24,851 24,851 Floating 3.3% 7.4% 3/9/2028 68% 3 Loan 35 Senior 11/4/2025 Santa Rosa, CA 24,122 24,404 Floating 2.8% 6.8% 12/9/2030 74% 3 Loan 36 Senior 3/31/2022 Phoenix, AZ 24,001 24,001 Floating 3.7% 7.3% 4/9/2027 74% 3 Loan 37 Senior 11/4/2021 Austin, TX 23,590 23,529 Floating 3.4% 7.1% 11/9/2026 78% 4 Loan 38 Senior 12/10/2024 Seattle, WA 22,851 22,976 Floating 2.8% 6.9% 1/9/2030 65% 3 Loan 39 Senior 1/10/2025 Lebanon, TN 22,480 22,500 Floating 3.4% 8.0% 2/9/2030 71% 3 Loan 40 Senior 6/22/2021 Phoenix, AZ 22,292 22,292 Floating 3.3% 7.0% 7/9/2026 71% 3 Loan 41 Senior 7/1/2021 Aurora, CO 21,342 21,305 Floating 3.2% 7.0% 7/9/2026 89% 3 Loan 42 Senior 12/19/2025 Minneapolis, MN 21,285 21,500 Floating 2.5% 6.7% 1/9/2031 65% 3 Loan 43 Senior 8/14/2025 Dallas, TX 20,806 21,017 Floating 3.0% 7.1% 9/9/2030 59% 3 Loan 44 Senior 1/12/2022 Austin, TX 20,276 20,276 Floating 3.4% 7.0% 2/9/2027 76% 3 Loan 45 Senior 12/21/2021 Gresham, OR 20,235 20,235 Floating 2.8% 6.4% 7/9/2028 76% 3 Loan 46 Senior 8/6/2021 La Mesa, CA 19,787 19,787 Floating 2.8% 6.4% 8/9/2028 72% 3 51 Table of Content s Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Loan 47 Senior 10/18/2024 Garland, TX 19,738 19,920 Floating 3.7% 7.7% 11/9/2029 70% 3 Loan 48 Senior 9/1/2021 Bellevue, WA 19,308 19,308 Floating 3.4% 7.1% 9/9/2026 75% 3 Loan 49 Senior 7/14/2021 Salt Lake City, UT 18,830 18,783 Floating 2.8% 6.4% 8/9/2028 67% 3 Loan 50 Senior 4/29/2022 Tacoma, WA 18,528 18,528 Floating 3.0% 6.6% 5/9/2027 64% 3 Loan 51 Senior 5/5/2022 Charlotte, NC 18,000 18,000 Floating 3.5% 7.2% 5/9/2027 68% 3 Loan 52 Senior 6/25/2021 Phoenix, AZ 17,650 17,650 Floating 3.2% 6.9% 7/9/2026 77% 3 Loan 53 Senior 11/20/2025 Los Angeles, CA 17,641 17,815 Floating 2.5% 6.7% 12/9/2030 59% 3 Loan 54 Senior 10/23/2025 Huntsville, AL 17,515 17,700 Floating 2.8% 7.0% 11/9/2030 55% 3 Loan 55 Senior 9/16/2025 Glendale, AZ 16,934 17,098 Floating 2.6% 6.6% 10/9/2030 71% 3 Loan 56 Senior 5/5/2025 Dallas, TX 13,644 13,750 Floating 2.9% 7.1% 5/9/2030 65% 3 Loan 57 Senior 8/19/2025 Phoenix, AZ 13,562 13,688 Floating 2.7% 6.7% 9/9/2030 75% 3 Loan 58 Senior 7/3/2025 Northridge, CA 13,145 13,250 Floating 3.3% 7.4% 7/3/2030 74% 3 Loan 59 Senior 9/18/2025 Mobile, AL 13,101 13,250 Floating 2.8% 6.8% 10/9/2030 73% 3 Loan 60 Senior 11/20/2025 Hoboken, NJ 12,378 12,500 Floating 2.4% 6.6% 12/9/2030 61% 3 Loan 61 Senior 11/22/2024 Garland, TX 12,292 12,399 Floating 3.5% 7.5% 12/9/2029 63% 3 Loan 62 Senior 3/8/2022 Glendale, AZ 11,664 11,664 Floating 3.5% 7.1% 3/9/2027 73% 3 Loan 63 Senior 12/19/2025 Mesa, AZ 11,257 11,387 Floating 2.8% 6.8% 1/9/2031 70% 3 Loan 64 (7) Preferred 5/9/2025 Mesa, AZ 1,892 1,904 Fixed n/a (7) 15.0% 5/9/2027 n/a 3 Loan 65 (7) Preferred 5/9/2025 Phoenix, AZ 1,722 1,730 Fixed n/a (7) 15.0% 4/9/2027 n/a 3 Loan 66 (7) Preferred 5/9/2025 Phoenix, AZ 1,649 1,657 Fixed n/a (7) 15.0% 1/9/2027 n/a 3 Loan 67 (7) Preferred 5/9/2025 Phoenix, AZ 1,643 1,652 Fixed n/a (7) 15.0% 8/9/2026 n/a 3 Loan 68 (7) Preferred 5/9/2025 Glendale, AZ 1,522 1,532 Fixed n/a (7) 15.0% 3/9/2027 n/a 3 Loan 69 (7) Preferred 5/9/2025 Phoenix, AZ 1,466 1,473 Fixed n/a (7) 15.0% 7/9/2026 n/a 3 Loan 70 Preferred 12/23/2025 Austin, TX 129 129 Fixed n/a 15.0% 11/9/2026 n/a 4 Total/Weighted average multifamily loans $ 1,804,535 $ 1,807,828 67% of total loans 3.0% 7.1% 2.5 years 3.1 52 Table of Content s Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Office Loan 71 Senior 1/19/2021 Phoenix, AZ $ 74,380 $ 74,038 Floating 3.7% 7.9% 2/9/2026 71% 3 Loan 72 Senior 8/28/2018 San Jose, CA 73,571 73,571 Floating 4.9% 8.5% 2/28/2027 81% 3 Loan 73 Senior 2/13/2019 Baltimore, MD 58,606 58,606 Floating 3.6% 7.3% 2/9/2027 74% 3 Loan 74 Senior 11/17/2021 Dallas, TX 41,532 41,533 Floating 4.0% 7.7% 12/9/2026 61% 4 Loan 75 Senior 5/23/2022 Plano, TX 38,633 38,524 Floating 4.3% 7.9% 6/9/2027 60% 3 Loan 76 Senior 4/27/2022 Plano, TX 38,542 38,438 Floating 4.1% 7.8% 5/9/2027 68% 3 Loan 77 Senior 4/7/2022 San Jose, CA 32,406 32,406 Floating 4.2% 7.8% 4/9/2027 67% 3 Loan 78 Senior 4/30/2021 San Diego, CA 32,252 32,252 Floating 3.6% 7.3% 5/9/2026 73% 3 Loan 79 Senior 10/21/2021 Blue Bell, PA 29,625 29,625 Floating 3.8% 7.5% 4/9/2026 78% 3 Loan 80 Senior 3/31/2022 Blue Bell, PA 29,406 29,406 Floating 4.2% 7.8% 4/9/2026 81% 3 Subtotal top 10 office loans $ 448,953 $ 448,399 17% of total loans Loan 81 Senior 2/26/2019 Charlotte, NC 27,084 27,084 Floating 4.3% 7.9% 7/9/2026 70% 3 Loan 82 Senior 12/7/2018 Carlsbad, CA 26,758 26,380 Floating 3.9% 7.6% 12/9/2026 73% 3 Loan 83 Senior 7/30/2021 Denver, CO 23,300 23,300 Floating 5.0% 8.7% 8/9/2026 71% 3 Loan 84 Senior 8/27/2019 San Francisco, CA 22,716 22,716 Floating 2.9% 6.6% 9/9/2026 89% 3 Loan 85 (8) Senior 9/28/2021 Reston, VA 19,587 18,615 Floating 2.1% 5.8% 10/9/2026 71% 5 Loan 86 Senior 10/13/2021 Burbank, CA 18,216 18,216 Floating 4.0% 7.7% 11/9/2026 51% 3 Loan 87 Senior 10/29/2020 Denver, CO 17,523 17,523 Floating 3.7% 7.4% 11/9/2026 94% 3 Loan 88 (9) Mezzanine 2/13/2023 Baltimore, MD 14,692 14,692 n/a (9) n/a (9) n/a (9) 2/9/2027 74%-75% 3 Loan 89 Senior 11/10/2021 Richardson, TX 13,362 13,320 Floating 4.1% 7.8% 12/9/2026 68% 3 Loan 90 (10) Preferred 12/12/2025 Dallas, TX 957 957 Fixed n/a (10) 15.0% 12/9/2026 n/a 4 Subtotal top 20 office loans $ 633,148 $ 631,202 24% of total loans Loan 91 (11) Preferred 9/9/2025 San Francisco, CA 432 432 Fixed n/a (11) 20.0% 9/9/2026 n/a 3 Total/Weighted average office loans $ 633,580 $ 631,634 24% of total loans 3.9% 7.6% 0.8 years 3.1 53 Table of Content s Loan Type Origination Date City, State Carrying value (1) Principal balance Coupon type Cash Coupon (2) Unlevered all-in yield (3) Extended maturity date Loan-to-value (4) Q4 Risk ranking (5) Other (Mixed-use) Loan 92 Senior 10/24/2019 Brooklyn, NY $ 79,308 $ 79,308 Floating 4.2% 7.8% 11/9/2026 74% 3 Loan 93 Senior 1/13/2022 New York, NY 46,090 46,090 Floating 3.5% 7.2% 2/9/2027 76% 3 Loan 94 Senior 5/3/2022 Brooklyn, NY 28,923 28,923 Floating 4.4% 8.0% 5/9/2027 68% 3 Loan 95 Senior 4/3/2024 South Pasadena, CA 24,139 24,138 Fixed 20.0% 20.0% 6/9/2026 28% 3 Loan 96 Senior 10/8/2025 Venice, CA 23,852 24,100 Floating 4.8% 8.9% 10/9/2030 67% 3 Loan 97 Senior 8/31/2021 Los Angeles, CA 15,888 15,888 Floating 4.6% 8.3% 9/9/2026 58% 3 Total/Weighted average other (mixed-use) loans $ 218,200 $ 218,447 5.9% 9.2% 1.3 years 3.0 Industrial Loan 98 (12) Senior 7/13/2022 Ontario, CA $ 22,000 $ 22,000 n/a (12) n/a (12) n/a (12) 1/30/2026 66% 5 Total/Weighted average industrial loans $ 22,000 $ 22,000 n/a n/a 0.1 years 5.0 Total/Weighted average senior and mezzanine loans - Our Portfolio $ 2,678,315 $ 2,679,909 3.4% 7.3% 2.0 years 3.1 _________________________________________ (1) Represents carrying values at our share as of December 31, 2025 and excludes general CECL reserves.
Factors Impacting Our Operating Results Our results of operations are affected by a number of factors and depend primarily on, among other things, the ability of the borrowers of our assets to service our debt as it is due and payable, the ability of our tenants to pay rent and other amounts due under their leases, our ability to actively and effectively service any sub-performing and non-performing loans and other assets we may have from time to time in our portfolio, the market value of our assets and the supply of, and demand for, CRE senior loans, mezzanine loans, preferred equity, debt securities, net leased properties and our other assets, and the level of our net operating income (“NOI”).
Factors Impacting Our Operating Results Our results of operations are affected by a number of factors and depend primarily on, among other things, the ability of the borrowers of our assets to service our debt as it is due and payable, the ability of our tenants to pay rent and other amounts due under their leases, our ability to actively and effectively service any sub-performing and non-performing loans and other assets we may have from time to time in our portfolio, the market value of our assets and the supply of, and demand for, CRE senior loans, mezzanine loans, preferred equity, net leased properties and our other assets, and the level of our net operating income (“NOI”).
In addition, we may use other forms of financing, including additional warehouse facilities, public and private secured and unsecured debt issuances and equity or equity-related securities issuances by us or our subsidiaries. We may also finance a portion of our investments through the syndication of one or more interests in a whole loan.
In addition, we may use other forms of financing, including warehouse facilities, public and private secured and unsecured debt issuances and equity or equity-related securities issuances by us or our subsidiaries. We may also finance a portion of our investments through the syndication of one or more interests in a whole loan.
The Credit Agreement also includes customary events of default, including, among other things, failure to make payments when due, breach of covenants or representations, cross default to material indebtedness, material judgment defaults, bankruptcy matters involving any Borrower or any Guarantor and certain change of control events.
The Amended Credit Agreement also includes customary events of default, including, among other things, failure to make payments when due, breach of covenants or representations, cross default to material indebtedness, material judgment defaults, bankruptcy matters involving any Borrower or any Guarantor and certain change of control events.
Critical Accounting Policies and Estimates Preparation of financial statements in accordance with U.S. generally accepted accounting principles requires the use of estimates and assumptions that involve the exercise of judgment and that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Critical Accounting Estimates Preparation of financial statements in accordance with U.S. generally accepted accounting principles requires the use of estimates and assumptions that involve the exercise of judgment and that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Our operating activities provided net cash inflows of $103.4 million and $137.6 million for the years ended December 31, 2024 and 2023, respectively. Net cash provided by operating activities decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to lower net interest income recorded during the year ended December 31, 2024.
Our operating activities provided net cash inflows of $103.4 million and $137.6 million for the year ended December 31, 2024 and 2023, respectively. Net cash provided by operating activities decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to lower net interest income recorded during the year ended December 31, 2024.
The maximum amount available for borrowing at any time under the Credit Agreement is limited to a borrowing base valuation of certain investment assets, with the valuation of such investment assets generally determined according to a percentage of adjusted net book value.
The maximum amount available for borrowing at any time under the Amended Credit Agreement is limited to a borrowing base valuation of certain investment assets, with the valuation of such investment assets generally determined according to a percentage of adjusted net book value.
Based upon the analysis, if the carrying value of a property exceeds its undiscounted future net cash flows, an impairment loss is recognized for the excess, if any, of the carrying value of the property over the estimated fair value of the property.
Based upon the analysis, if the carrying value of a property exceeds its undiscounted future net cash flows, an impairment loss is recognized for the excess of the carrying value of the property over the estimated fair value of the property.
We define Distributable Earnings as GAAP net income (loss) attributable to our common stockholders (or, without duplication, the owners of the common equity of our direct subsidiaries, such as our OP) and excluding (i) non-cash equity compensation expense, (ii) the expenses incurred in connection with our formation or other strategic transactions, (iii) acquisition costs from successful acquisitions, (iv) gains or losses from sales of real estate property and impairment write-downs of depreciable real estate, including unconsolidated joint ventures and preferred equity investments, (v) general CECL reserves, (vi) depreciation and amortization, (vii) any unrealized gains or losses or other similar non-cash items that are included in net income for the current quarter, regardless of whether such items are included in other comprehensive income or loss, or in net income, (viii) one-time events pursuant to changes in GAAP and (ix) certain material non-cash income or expense items that in the judgment of management should not be included in Distributable Earnings.
We define Distributable Earnings as GAAP net income (loss) attributable to our common stockholders (or, without duplication, the owners of the common equity of our direct subsidiaries, such as our OP) and excluding (i) non-cash equity compensation expense, (ii) the expenses incurred in connection with our formation or other strategic transactions, (iii) acquisition costs from successful acquisitions, (iv) gains or losses from sales of real estate property and impairment write-downs of depreciable real 59 Table of Content s estate, including unconsolidated joint ventures and preferred equity investments, (v) general CECL reserves, (vi) depreciation and amortization, (vii) any unrealized gains or losses or other similar non-cash items that are included in net income for the current quarter, regardless of whether such items are included in other comprehensive income or loss, or in net income, (viii) one-time events pursuant to changes in GAAP and (ix) certain material non-cash income or expense items that in the judgment of management should not be included in Distributable Earnings.
Our model principally utilizes historical loss rates derived from a commercial mortgage-backed securities database with historical losses from 1998 through December 2024 provided by a third party, Trepp LLC, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by a straight-line reversion period of twelve-months back to average historical losses.
Our model principally utilizes historical loss rates derived from a commercial mortgage-backed securities database with historical losses from 1998 through December 2025 provided by a third party, Trepp LLC, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by a straight-line reversion period of twelve-months back to average historical losses.
Financing activities used net cash of $327.9 million for the year ended December 31, 2024, which resulted primarily from repayment of credit facilities of $665.4 million, repayment of securitization bonds of $403.4 million and distributions paid on common stock of $99.1 million partially offset by borrowings from securitization bonds of $582.6 million and borrowings from credit facilities $297.6 million.
Financing activities used net cash of $327.9 million for the year ended December 31, 2024, which resulted primarily from repayment of master repurchase and credit facilities of $665.4 million, repayment of securitization bonds of $403.4 million and distributions paid on common stock of $99.1 million partially offset by borrowings from securitization bonds of $582.6 million and borrowings from master repurchase and credit facilities $297.6 million.
Financing activities used net cash of $558.6 million for the year ended December 31, 2023, which resulted primarily from repayment of credit facilities of $320.6 million, repayment of securitization bonds of $258.8 million and distributions paid on common stock of $104.0 million partially offset by borrowings from credit facilities of $133.1 million.
Financing activities used net cash of $558.6 million for the year ended December 31, 2023, which resulted primarily from repayment of master repurchase and credit facilities of $320.6 million, repayment of securitization bonds of $258.8 million and distributions paid on common stock of $104.0 million partially offset by borrowings from master repurchase and credit facilities of $133.1 million.
The general CECL reserve is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, we measure the specific CECL reserve on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time.
The CECL reserve is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, we measure the CECL reserve on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time.
CRE debt investments primarily consist of first mortgage loans, which is our primary investment strategy. Additionally, we may also selectively originate mezzanine loans and preferred equity investments, which may include profit participations. The mezzanine loans and preferred equity investments may be in conjunction with our origination of corresponding first mortgages on the same properties.
CRE debt investments primarily consist of senior mortgage loans, which is our primary investment strategy. Additionally, we may also selectively originate mezzanine loans and preferred equity investments, which may include profit participations. The mezzanine loans and preferred equity investments may be in conjunction with our origination of corresponding senior mortgages on the same properties.
(2) Amounts include minimum principal and interest obligations through the initial maturity date of the collateral assets. Interest on floating rate debt was determined based on Term SOFR at December 31, 2024. (3) The timing of future principal payments was estimated based on expected future cash flows of underlying collateral loans.
(2) Amounts include minimum principal and interest obligations through the initial maturity date of the collateral assets. Interest on floating rate debt was determined based on Term SOFR at December 31, 2025. (3) The timing of future principal payments was estimated based on expected future cash flows of underlying collateral loans.
This is partially offset by payment of interest expenses for credit facilities and mortgages payable, and operating expenses supporting our various lines of business, including property management and operations, loan servicing and workout of loans in default, investment transaction costs, as well as general administrative costs.
This is partially offset by payment of interest expenses for master repurchase and credit facilities and mortgages payable, and operating expenses supporting our various lines of business, including property management and operations, loan servicing and workout of loans in default, investment transaction costs, as well as general administrative costs.
In measuring the general CECL reserve for financial instruments that share similar risk characteristics, we primarily apply a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the CECL reserve is calculated as the product of PD, LGD and exposure at default (“EAD”).
In measuring the CECL reserve for financial instruments that share similar risk characteristics, we primarily apply a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the CECL reserve is calculated as the product of PD, LGD and exposure at default.
We also consider qualitative factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the CECL reserve.
We also consider qualitative factors, including, but not limited to, economic and business conditions, borrower actions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the CECL reserve.
Share Repurchases In April 2024, our board of directors authorized a stock repurchase program (“Stock Repurchase Program”) under which we may repurchase up to $50.0 million of our outstanding Class A common stock until April 30, 2025. The Stock Repurchase Program replaces the prior stock repurchase program authorization which expired on April 30, 2024.
Share Repurchases In April 2025, our board of directors authorized a stock repurchase program (“Stock Repurchase Program”) under which we may repurchase up to $50.0 million of our outstanding Class A common stock until April 30, 2026. The Stock Repurchase Program replaces the prior stock repurchase program authorization which expired on April 30, 2025.
(2) Represents the percent leased as of December 31, 2024. Weighted average calculation based on carrying value at our share as of December 31, 2024. (3) Based on in-place leases (defined as occupied and paying leases) as of December 31, 2024, and assumes that no renewal options are exercised.
(2) Represents the percent leased as of December 31, 2025. Weighted average calculation based on carrying value at our share as of December 31, 2025. (3) Based on in-place leases (defined as occupied and paying leases) as of December 31, 2025, and assumes that no renewal options are exercised.
Amounts owed under the Credit Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which a SOFR rate election is in effect.
Amounts owed under the Amended Credit Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which a Term SOFR rate election is in effect.
Distributable Earnings include specific CECL reserves. 58 Table of Contents Additionally, we define Adjusted Distributable Earnings as Distributable Earnings excluding (i) realized gains and losses on asset sales, (ii) fair value adjustments, which represent mark-to-market adjustments to investments in unconsolidated ventures based on an exit price, defined as the estimated price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants, (iii) unrealized gains or losses, (iv) specific CECL reserves and (v) one-time gains or losses that in the judgement of management should not be included in Adjusted Distributable Earnings.
Additionally, we define Adjusted Distributable Earnings as Distributable Earnings excluding (i) realized gains and losses on asset sales, (ii) fair value adjustments, which represent mark-to-market adjustments to investments in unconsolidated ventures based on an exit price, defined as the estimated price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants, (iii) unrealized gains or losses, (iv) specific CECL reserves and (v) one-time gains or losses that in the judgement of management should not be included in Adjusted Distributable Earnings.
A change in our ability and/or intent to continue to hold any of our assets, which includes the inability to modify, extend or refinance existing mortgage debt on our real estate portfolio, may result in our recognizing an impairment charge or realizing losses upon the sale of such investments.
A change in our ability and/or intent to continue to hold any of our assets, which includes the inability to modify, extend or refinance existing mortgage debt on our real estate portfolio, may result in our recognizing an impairment charge, an increase in our CECL reserves or realizing losses upon the sale of such investments.
The Credit Agreement also includes an option for the Borrowers to increase the maximum available principal amount of up to $300.0 million, subject to one or more new or existing Lenders agreeing to provide such additional loan commitments and satisfaction of other customary conditions.
The Amended Credit Agreement also includes an option for the Borrowers to increase the maximum available principal amount to up to $180.0 million, subject to one or more new or existing Lenders agreeing to provide such additional loan commitments and satisfaction of other customary conditions.
(2) Carrying value at our share represents the proportionate carrying value based on ownership by asset as of December 31, 2024. (3) Net carrying value represents carrying value less any associated financing as of December 31, 2024.
(2) Carrying value at our share represents the proportionate carrying value based on ownership by asset as of December 31, 2025. (3) Net carrying value represents carrying value less any associated financing as of December 31, 2025.
Detachment loan-to-value reflects the cumulative initial funding of our loan and the loans senior to our position divided by the as-is 51 Table of Contents value as of the date the loan was originated, or the cumulative principal amount divided by the appraised value for the in place collateral as of the date of the most recent appraisal.
Detachment loan-to-value reflects the cumulative initial funding of our loan and the loans senior to our position divided by the as-is value as of the date the loan was originated, or the cumulative principal amount divided by the appraised value for the in place collateral as of the date of the most recent appraisal.
Advances under the Credit Agreement accrue interest at a per annum rate equal to, at the applicable Borrower’s election, either (x) an adjusted SOFR rate plus a margin of 2.25%, or (y) a base rate equal to the highest of (i) the Wall Street Journal’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted SOFR rate plus 1.00%, plus a margin of 1.25%.
Advances under the Amended Credit Agreement accrue interest at a per annum rate equal to, at the applicable Borrower’s election, either (x) a Term SOFR rate plus a margin of 2.25%, or (y) a base rate equal to the highest of (i) the Wall Street Journal’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the Term SOFR rate plus 1.00%, plus a margin of 1.25%.
Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this Annual Report on Form 10-K entitled “Risk Factors” and “Forward-Looking Statements.” Introduction We are a commercial real estate (“CRE”) credit real estate investment trust (“REIT”) focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties predominantly in the United States.
Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this Annual Report on Form 10-K entitled “Risk Factors” and “Forward-Looking Statements.” Introduction We are an internally-managed commercial real estate (“CRE”) credit real estate investment trust (“REIT”) focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties.
The Stock Repurchase Program will be 65 Table of Contents utilized at our discretion and in accordance with the requirements of the SEC. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate requirements and other conditions.
The Stock Repurchase Program will be utilized at our discretion and in accordance with the requirements of the SEC. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate requirements and other conditions.
During 2024, we reviewed and evaluated our critical accounting policies and estimates and we believe they are appropriate. The following is a list of our accounting policies that may require more significant estimates and judgements: 1) Current Expected Credit Loss (“CECL” Reserve) and 2) Real Estate Impairment. We have included a summary of the accounting policies of these areas below.
During 2025, we reviewed and evaluated our critical accounting estimates and we believe they are appropriate. The following is a list of our accounting policies that may require more significant estimates and judgments: 1) Current Expected Credit Loss (“CECL” Reserve) and 2) Real Estate Impairment. We have included a summary of these areas below.
Unlevered all-in yield for the loan portfolio assumes the applicable floating benchmark rate as of December 31, 2024 for weighted average calculations.
Unlevered all-in yield for the loan portfolio assumes the applicable floating benchmark rate as of December 31, 2025 for weighted average calculations.
However, the exclusion of these items as well as others, such as capital expenditures and leasing costs, which are necessary to maintain the operating performance of the Company’s properties, and transaction costs and administrative costs, may limit the usefulness of NOI.
However, the exclusion of these items as well as 61 Table of Contents others, such as capital expenditures and leasing costs, which are necessary to maintain the operating performance of the Company’s properties, and transaction costs and administrative costs, may limit the usefulness of NOI.
Under the Stock Repurchase Program, we may repurchase shares in open market purchases, in privately negotiated transactions or otherwise. We have a written trading plan as part of the Share Repurchase Program that provides for share repurchases in open market transactions that is intended to comply with Rule 10b-18 under the Exchange Act.
Under the Stock 66 Table of Content s Repurchase Program, we may repurchase shares in open market purchases, in privately negotiated transactions or otherwise. We have a written trading plan as part of the Share Repurchase Program that provides for share repurchases in open market transactions that is intended to comply with Rule 10b-18 under the Exchange Act.
Changes in market interest rates With respect to our business operations, increases in interest rates, in general, may over time cause: • the value of our fixed-rate investments to decrease; • prepayments on certain assets in our portfolio to slow, thereby slowing the amortization of our purchase premiums and the accretion of our purchase discounts; • coupons on our floating and adjustable-rate mortgage loans to reset, although on a delayed basis, to higher interest rates; • interest rate caps required by our borrowers to increase in cost; • borrowers’ unwillingness to purchase new interest rate caps at loan maturity to qualify for an extension; • financial hardship to our borrowers, whose ability to service their debt as it is due and payable and to pass maturity extension tests may be materially adversely impacted, resulting in foreclosures; • to the extent we use leverage to finance our assets, the interest expense associated with our borrowings to increase; and • to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to increase.
Changes in market interest rates With respect to our business operations, increases in interest rates, in general, may over time cause: 46 Table of Content s • the value of our fixed-rate investments to decrease; • prepayments on certain assets in our portfolio to slow, thereby slowing the amortization of origination and exit fees; • coupons on our floating and adjustable-rate mortgage loans to reset, although on a delayed basis, to higher interest rates; • interest rate caps required by our borrowers to increase in cost; • borrowers’ unwillingness to purchase new interest rate caps at loan maturity to qualify for an extension; • financial hardship to our borrowers, whose ability to service their debt as it is due and payable and to pass maturity extension tests may be materially adversely impacted, resulting in foreclosures; • to the extent we use leverage to finance our assets, the interest expense associated with our borrowings to increase; and • to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to increase.
BRSP 2024-FL2 also includes a two-year reinvestment feature that allows us to contribute existing or newly originated loan investments in exchange for proceeds from repayments of loans held in BRSP 2024-FL2, subject to the satisfaction of certain conditions set forth in the indenture.
BRSP 2024-FL2 also includes a two-year reinvestment feature that allows us to contribute existing or newly originated loan investments in exchange for proceeds from repayments of loans held in BRSP 65 Table of Content s 2024-FL2, subject to the satisfaction of certain conditions set forth in the indenture.
If such assumptions change and we shorten its expected hold period, this may result in the recognition of impairment losses.
If such assumptions change and we shorten our expected hold period, this may result in the recognition of impairment losses.
In evaluating and/or measuring impairment, we consider, among other things, current and estimated future cash flows associated with each property, market information for each sub-market, including, where applicable, competition levels, foreclosure levels, leasing trends, occupancy trends, lease or room rates, and the market prices of similar properties recently sold or currently being offered for sale, and other quantitative and qualitative factors.
In evaluating and/or measuring impairment, we consider, among other things, current and estimated future cash flows associated with each property, market information for each sub-market, including, where applicable, capitalization rates, discount rates, leasing trends, occupancy trends, lease or room rates, and the market prices of similar properties recently sold or currently being offered for sale, and other quantitative and qualitative factors.
Our Business Segments We present our business as one portfolio through the following business segments: • Senior and Mezzanine Loans and Preferred Equity—CRE debt investments including senior and mezzanine loans, and preferred equity interests as well as participations in such loans. • Net Leased and Other Real Estate—direct investments in commercial real estate with long-term leases to tenants on a net lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maintenance, capital expenditures and real estate taxes.
Our Business Segments We present our business through three operating and reportable segments: • Senior and Mezzanine Loans and Preferred Equity—CRE debt investments including senior and mezzanine loans, and preferred equity interests as well as participations in such loans. • Net Leased and Other Real Estate—direct investments in commercial real estate with long-term leases to tenants on a net lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maintenance, capital expenditures and real estate taxes.
(2) Represents the stated coupon rate for loans; for floating rate loans, does not include Secured Overnight Financing Rate (“SOFR”), which was 4.33% as of December 31, 2024. (3) In addition to the stated cash coupon rate, unlevered all-in yield includes non-cash payment-in-kind interest income and the accrual of origination and exit fees.
(2) Represents the stated coupon rate for loans; for floating rate loans, does not include Secured Overnight Financing Rate (“SOFR”), which was 3.69% as of December 31, 2025. (3) In addition to the stated cash coupon rate, unlevered all-in yield includes non-cash payment-in-kind interest income and the accrual of origination and exit fees.
Additional key considerations include loan-to-value ratios, debt service coverage ratios, loan structure, real estate and credit market dynamics, and risk of default or principal loss. Based on a five-point scale, our loans held for investment are rated “1” through “5,” from less risk to greater risk.
Additional key considerations include loan-to-value ratios, debt service coverage ratios, loan structure, real estate and credit market dynamics, and risk of default or principal loss. Based on a five-point scale, our loans and preferred equity held for investment are rated “1” through “5,” from less risk to greater risk, and the ratings are updated quarterly.
The obligations of the Borrowers under the Credit Agreement are guaranteed pursuant to a Guarantee and Collateral Agreement by substantially all material wholly owned subsidiaries of the OP (the “Guarantors”) in favor of the Administrative Agent (the “Guarantee and Collateral Agreement”) and, subject to certain exceptions, secured by a pledge of substantially all equity 62 Table of Contents interests owned by the Borrowers and the Guarantors, as well as by a security interest in deposit accounts of the Borrowers and the Guarantors in which the proceeds of investment asset distributions are maintained.
The obligations of the Borrowers under the Amended Credit Agreement are guaranteed pursuant to a Guarantee and Collateral Agreement by substantially all material wholly owned subsidiaries of the OP (the “Guarantors”) in favor of the Administrative Agent (the “Guarantee and Collateral Agreement”) and, subject to certain exceptions, secured by a pledge of substantially all equity interests owned by the Borrowers and the Guarantors, as well as by a security interest in deposit accounts of the Borrowers and the Guarantors (as such terms are defined in the Guarantee and Collateral Agreement) in which the proceeds of investment asset distributions are maintained.
An unused commitment fee at a rate of 0.25% or 0.35%, per annum, depending on the amount of facility utilization, applies to un-utilized borrowing capacity under the Credit Agreement.
An unused commitment fee at a rate of 0.25% or 0.35%, per annum, depending on the amount of facility utilization, applies to unutilized borrowing capacity under the Amended Credit Agreement.
In connection with developing the CECL reserve for our loans held for investment, we determine the risk ranking of each loan as a key credit quality indicator.
Loan Risk Rankings In connection with developing the CECL reserve for our loans and preferred equity held for investment, we determine the risk ranking of each loan and preferred equity investment as a key credit quality indicator.
In addition, the Credit Agreement includes the following financial covenants applicable to the OP and its consolidated subsidiaries: (a) minimum consolidated tangible net worth of the OP to be greater than or equal to the sum of (i) $1,112,000,000 and (ii) 70% of the net cash proceeds received by the OP from any offering of its common equity after September 30, 2021 and of the net cash proceeds from any offering by the Company of its common equity to the extent such proceeds are contributed to the OP, excluding any such proceeds that are contributed to the OP within ninety (90) days of receipt and applied to acquire capital stock of the OP; (b) the OP’s ratio of EBITDA plus lease expenses to fixed charges for any period of four consecutive fiscal quarters to be not less than 1.50 to 1.00; (c) the OP’s minimum interest coverage ratio to be not less than 3.00 to 1.00; and (d) the OP’s ratio of consolidated total debt to consolidated total assets to be not more than 0.80 to 1.00.
In addition, the Amended Credit Agreement includes the following financial covenants applicable to the OP and its consolidated subsidiaries: (a) minimum consolidated tangible net worth of the OP to be greater than or equal to the sum of (i) $900,000,000 and (ii) 70% of the net cash proceeds received by the OP from any offering of its common equity after December 9, 2025 and of the net cash proceeds from any offering by the Company of its common equity to the extent such proceeds are contributed to the OP, excluding any such proceeds that are contributed to the OP within ninety (90) days of receipt and applied to acquire capital stock of the OP; (b) the OP’s EBITDA plus lease expenses to fixed charges for any period of four consecutive fiscal quarters not less than 1.40 to 1.00; (c) the OP’s minimum interest coverage ratio to be not less than 3.00 to 1.00; and (d) the OP’s ratio of consolidated total debt to consolidated total assets must not exceed 0.80 to 1.00.
Conversely, decreases in interest rates, in general, may over time cause: • the value of the fixed-rate assets in our portfolio to increase; • prepayments on certain assets in our portfolio to increase, thereby accelerating the amortization of our purchase premiums and the accretion of our purchase discounts; • to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to decrease; 44 Table of Contents • coupons on our floating and adjustable-rate mortgage loans to reset, although on a delayed basis, to lower interest rates; and • to the extent we use leverage to finance our assets, the interest expense associated with our borrowings to decrease.
Conversely, decreases in interest rates, in general, may over time cause: • the value of the fixed-rate assets in our portfolio to increase; • prepayments on certain assets in our portfolio to increase, thereby accelerating the amortization of origination and exit fees; • to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to decrease; • coupons on our floating and adjustable-rate mortgage loans to reset, although on a delayed basis, to lower interest rates; and • to the extent we use leverage to finance our assets, the interest expense associated with our borrowings to decrease.
It also includes other real estate, currently consisting of two investments with direct ownership in commercial real estate, with an emphasis on properties with stable cash flow, five additional properties that we acquired through foreclosure or deed-in-lieu of foreclosure and one property that we consolidate as the primary beneficiary. • Corporate and Other—includes corporate-level asset management and other fees including expenses related to our secured revolving credit facility (the “Bank Credit Facility”) and compensation and benefits.
It also includes other real estate, currently consisting of one investment with direct ownership in commercial real estate, five additional properties that we acquired through foreclosure or deed-in-lieu of foreclosure and two properties that we consolidate as the primary beneficiary. • Corporate and Other—includes corporate-level asset management and other fees including expenses related to our secured revolving credit facility (the “Bank Credit Facility”) and compensation and benefits.
Increase of CECL reserve We recorded total CECL reserves of $135.8 million during the year ended December 31, 2024, which is comprised of $97.8 million of general reserves and $38.0 million of specific reserves.
During the year ended December 31, 2024, we recorded a net increase in CECL reserves of $135.8 million, which is comprised of $97.8 million of general reserves and $38.0 million of specific reserves.
We did not fail any note protection tests during the years ended December 31, 2024 and December 31, 2023. While we continue to closely monitor all loan investments contributed to BRSP 2021-FL1, a deterioration in the performance of an underlying loan could negatively impact our liquidity position.
We did not fail any note protection tests during the year ended December 31, 2025 and December 31, 2024. While we continue to closely monitor all loan investments contributed to BRSP 2021-FL1, a deterioration in the performance of an underlying loan could negatively impact our liquidity position. We expect to redeem BRSP 2021-FL1 in February 2026.
We also have the ability to raise capital in the public markets through issuances of common stock, as well as draw 66 Table of Contents upon our corporate credit facility, to finance our investing and operating activities. Accordingly, we incur cash outlays for payments on third party debt and dividends to our common stockholders.
We also have the ability to raise capital in the public markets through issuances of common stock, as well as draws upon our corporate credit facility and master repurchase facilities, to finance our investing and operating activities. Accordingly, we incur cash outlays for payments on third party debt and dividends to our common stockholders.
As of December 31, 2024, the securitization reflects an advance rate of 86.5% at a weighted average cost of funds of Term SOFR plus 2.47% (before transaction costs), and is collateralized by a pool of 24 senior loan investments and cash.
As of December 31, 2025, the securitization reflects an advance rate of 86.6% at a weighted average cost of funds of Term SOFR plus 2.47% (before transaction costs), and is collateralized by a pool of 27 senior loan investments.
Beginning in 2021, our investment and portfolio management and risk assessment practices diligence the environmental, social and governance (“ESG”) standards of our business counterparties, including borrowers, sponsors and that of our investment assets and underlying collateral, which may include sustainability initiatives, recycling, energy efficiency and water management, volunteer and charitable efforts, anti-money laundering and know-your-client policies, and diversity, equity and inclusion practices in workforce leadership, composition and hiring practices.
Beginning in 2021, our investment and portfolio management and risk assessment practices diligence the sustainability and other standards of our business counterparties, including borrowers, sponsors and that of our investment assets and underlying collateral, which may include sustainability initiatives, recycling, energy efficiency and water management, volunteer and charitable efforts, anti-money laundering and know-your-client policies, and engagement and belonging practices in workforce leadership, composition and hiring practices.
As of December 31, 2024, the borrowing base valuation is sufficient to permit borrowings of up to the entire $165.0 million. If any borrowing is outstanding for more than 180 days after its initial draw, the borrowing base valuation will be reduced by 50% until all outstanding borrowings are repaid in full.
As of December 31, 2025, the borrowing base valuation is sufficient to permit 63 Table of Content s borrowings of up to the entire $120.0 million commitment. If any borrowing is outstanding for more than 180 days after its initial draw, the borrowing base valuation will be reduced by 50% until all outstanding borrowings are repaid in full.
Our net interest income, which includes the amortization of purchase premiums and the accretion of purchase discounts, varies primarily as a result of changes in market interest rates, prepayment rates and frequency on our CRE loans and the ability of our borrowers to make scheduled interest payments.
Our net interest income, which includes the amortization of origination and exit fees, varies primarily as a result of changes in market interest rates, prepayment rates and frequency on our CRE loans and the ability of our borrowers to make scheduled interest payments.
Impaired/Loss Likely— A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss. At December 31, 2024, our weighted average risk ranking remained unchanged at 3.2 compared to September 30, 2024.
High Risk/Potential for Loss— A loan that has a high risk of realizing a principal loss. 5. Impaired/Loss Likely— A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss. At December 31, 2025, our weighted average risk ranking remained unchanged at 3.1 compared to at September 30, 2025.
We also own five properties included in other real estate that were acquired through deeds-in-lieu of foreclosure and foreclosure and consolidate one property after being deemed the primary beneficiary of the variable interest entity holding it.
We also own four properties included in other real estate that were acquired through deeds-in-lieu of foreclosure and foreclosure and consolidated two properties after being deemed the primary beneficiary of the variable interest entity holding it.
Investing activities generated net cash inflows of $313.1 million for the year ended December 31, 2024. Net cash provided by investing activities in 2024 resulted primarily from repayments on loans held for investment, net of $420.9 million partially offset by the origination and fundings on our loans held for investment, net of $114.3 million.
Net cash provided by investing activities during the year ended December 31, 2024 resulted primarily from repayments on loans and preferred equity held for investment, net of $420.9 million partially offset by the origination and fundings on our loans and preferred equity held for investment, net of $114.3 million.
The Credit Agreement contains various affirmative and negative covenants, including, among other things, the obligation of the Company to maintain REIT status and be listed on the New York Stock Exchange, and limitations on debt, liens and restricted payments.
The Amended Credit Agreement contains various affirmative and negative covenants, including, among other things, the obligation of the Company to maintain REIT status and be listed on the New York Stock Exchange or any other U.S. national or international securities exchange, and limitations on debt, liens and restricted payments.
Cash Flows The following presents a summary of our consolidated statements of cash flows for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands): Year Ended December 31, Cash flow provided by (used in): 2024 2023 2022 Operating activities $ 103,405 $ 137,624 $ 125,277 Investing activities 313,080 384,160 89,337 Financing activities (327,947) (558,600) (161,451) Operating Activities Cash inflows from operating activities are generated primarily through interest received from loans and preferred equity held for investment, and property operating income from our real estate portfolio.
Cash Flows The following presents a summary of our consolidated statements of cash flows for the year ended December 31, 2025, 2024 and 2023 (dollars in thousands): Year Ended December 31, Cash flow provided by (used in): 2025 2024 2023 Operating activities $ 73,025 $ 103,405 $ 137,624 Investing activities (419,930) 313,080 384,160 Financing activities 68,926 (327,947) (558,600) Operating Activities Cash inflows from operating activities are generated primarily through interest received from loans and preferred equity held for investment, and property operating income from our real estate portfolio.
For clauses (viii) and (ix), such exclusions shall only be applied after approval by a majority of our independent directors.
For clauses (viii) and (ix), such exclusions shall only be applied after approval by a majority of our independent directors. Distributable Earnings include specific CECL reserves.
Given this potential likelihood, we believe it is prudent to recognize impairments and exclude our share of the carrying value related to these properties.
As such, we believe it is prudent to recognize impairments and exclude our share of the carrying value related to these properties.
At December 31, 2024, we had $639.5 million of unpaid principal balance of CRE debt investments financed with BRSP 2021-FL1. As of December 31, 2024, the securitization reflects an advance rate of 79.7% at a weighted average cost of funds of Term SOFR plus 1.59% (before transaction costs), and is collateralized by a pool of 24 senior loan investments.
At December 31, 2025, we had $528.2 million of unpaid principal balance of CRE debt investments financed with BRSP 2021-FL1. As of December 31, 2025, the securitization reflects an advance rate of 75.4% at a weighted average cost of funds of Term SOFR plus 1.72% (before transaction costs), and is collateralized by a pool of 19 senior loan investments.
Generationally high interest rates have continued to negatively impact transaction activity in the real estate market and correspondingly the loan financing and refinancing opportunities. While the Federal Reserve lowered interest rates in the second half of 2024, it is uncertain as to when, how many and by how much subsequent interest rate cuts will be made in 2025.
Additionally, high interest rates continue to negatively impact transaction activity in the real estate market and correspondingly the loan financing and refinancing opportunities. While the Federal Reserve lowered interest rates three times in 2025, it is uncertain as to if, when, how many and by how much subsequent interest rate cuts will be made in 2026.
As a result, interest rates and other factors influence our performance significantly more than inflation does. A change in interest rates may correlate with the inflation rate.
Inflation Virtually all of our assets and liabilities are interest rate sensitive in nature. As a result, interest rates and other factors influence our performance significantly more than inflation does. A change in interest rates may correlate with the inflation rate.
Financing Strategy We have a multi-pronged financing strategy that includes an up to $165.0 million secured revolving credit facility as of December 31, 2024, up to approximately $2.0 billion in secured revolving repurchase facilities, $1.1 billion in non-recourse securitization financing, $587.2 million in commercial mortgages and $34.5 million in other asset-level financing structures.
Financing Strategy We have a multi-pronged financing strategy that includes an up to $120.0 million secured revolving credit facility, up to approximately $2.1 billion in secured revolving repurchase facilities, $982.1 million in non-recourse securitization financing, 62 Table of Content s $382.2 million in commercial mortgages and $34.1 million in other asset-level financing structures, in each case, as of December 31, 2025.
Our ability to refinance at their maturity dates is burdened by the current interest rate environment, lenders’ aversion to finance or refinance office properties and/or associated improvements or paydowns potentially demanded at such properties. Loan maturity defaults can lead to foreclosures.
Our ability to refinance at their maturity dates is burdened by the current interest rate environment, lenders’ aversion to finance or refinance office properties and/or associated improvements or paydowns potentially demanded at such properties. Loan maturity defaults can and have led to foreclosures. Cash flow sweeps restrict our ability to utilize earnings generated by a property.
Our senior and mezzanine loans consisted of 76 senior and mezzanine loans with a weighted average cash coupon of 3.4% and a weighted average all-in unlevered yield of 7.6%. Our net leased and other real estate consisted of approximately 6.9 million total square feet of space and total 2024 NOI of that portfolio was approximately $67.7 million.
Our senior and mezzanine loans and preferred equity consisted of 98 investments with a weighted average cash coupon of 3.4% and a weighted average all-in unlevered yield of 7.3%. Our net leased and other real estate consisted of approximately 4.8 million total square feet of space and total 2025 NOI of that portfolio was approximately $46.0 million.
A reconciliation of these measures to net income/(loss) attributable to the Company’s common stockholders is in the section “Non-GAAP Supplemental Financial Measures” below. Trends Affecting Our Business Global Markets Although global markets showed signs of stabilization and inflationary pressure may be moderating, CRE value uncertainties, lingering impact from COVID-19 and geopolitical unrest continue to contribute to market volatility.
A reconciliation of these measures to net income/(loss) attributable to the Company’s common stockholders is in the section “Non-GAAP Supplemental Financial Measures” below. Trends Affecting Our Business Global Markets Global markets pressure and uncertainties coming from the Administration’s tariff initiative, inflationary worries and geopolitical unrest continue to contribute to market volatility and impact CRE valuations.
Determining fair value of the collateral, including utilization of a practical expedient, may take into account a 68 Table of Contents number of assumptions including, but not limited to, rents and cash flow projections, market capitalization rates, discount rates and sales comps. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.
Determining fair value of the collateral, including utilization of a practical expedient, may take into account a number of assumptions including, but not limited to, market rents and cash flow projections, market capitalization rates, discount rates and sales comps.
At the time of origination or purchase, loans held for investment are ranked as a “3” and will move accordingly going forward based on the ratings which are defined as follows: 1. Very Low Risk 2. Low Risk 3. Medium Risk 4. High Risk/Potential for Loss— A loan that has a high risk of realizing a principal loss. 5.
At the time of origination or purchase, loans and preferred equity held for investment are ranked as a “3” and will move accordingly going forward based on the ratings which are defined as follows: 1. Very Low Risk 2. Low Risk 3. Medium Risk 48 Table of Content s 4.
Investing activities generated net cash inflows of $89.3 million for the year ended December 31, 2022.
Investing activities generated net cash inflows of $313.1 million for the year ended December 31, 2024.
In conjunction with this review, we assess the risk factors of each senior and mezzanine loan and assign a risk ranking based on a variety of factors, including, without limitation, underlying real estate performance and asset value, values of comparable properties, durability and quality of property cash flows, sponsor experience and financial wherewithal, and the existence of a risk-mitigating loan structure.
The risk rankings are based on a variety of factors, including, without limitation, underlying real estate performance and asset value, values of comparable properties, durability and quality of property cash flows, borrower/sponsor experience and financial wherewithal, and the existence of a risk-mitigating loan structure.
During the year ended December 31, 2024, we repurchased 1.2 million shares of Class A common stock at a weighted average price of $5.52 per share for an aggregate cost of $6.6 million. As of December 31, 2024, there was $43.4 million remaining available to make repurchases under the Stock Repurchase Plan.
During the year ended December 31, 2025, the Company repurchased 2.0 million shares of Class A common stock at a weighted average price of $5.35 per share for an aggregate cost of $10.9 million. As of December 31, 2025, there is $40.2 million remaining available to make repurchases under the Stock Repurchase Program.
Changes in the CECL reserve for our financial instruments are recorded in increase/decrease in current expected credit loss reserve on the consolidated statement of operations with a corresponding offset to the loans held for investment or as a component of other liabilities for future loan fundings recorded on our consolidated balance sheets Real Estate Impairment We evaluate real estate held for investment for impairment periodically or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable, generally on an individual property basis.
Changes in the CECL reserve for our financial instruments are recorded in increase/decrease in current expected credit loss reserve on the consolidated statement of operations with a corresponding offset to the loans held for investment or as a component of other liabilities for future loan fundings recorded on our consolidated balance sheets.
(5) On a quarterly basis, our senior and mezzanine loans are rated “1” through “5,” from less risk to greater risk. Represents risk ranking as of December 31, 2024.
(5) On a quarterly basis, our senior and mezzanine loans are rated “1” through “5,” from less risk to greater risk. Represents risk ranking as of December 31, 2025. (6) Subsequent to December 31, 2025, Loan 6 was resolved when the property was acquired through a foreclosure and reclassified to real estate.
Non-GAAP Supplemental Financial Measures Distributable Earnings We present Distributable Earnings, which is a non-GAAP supplemental financial measure of our performance.
Management’s Discussion and Analysis of Financial Condition, which is incorporated by reference herein. Non-GAAP Supplemental Financial Measures Distributable Earnings We present Distributable Earnings, which is a non-GAAP supplemental financial measure of our performance.
Financial Results • Generated GAAP net loss of $132.0 million, or $(1.05) per basic and diluted share, Distributable Earnings of $71.2 million or $0.55 per share and Adjusted Distributable Earnings of $109.2 million or $0.84 per share for the year ended December 31, 2024. Distributable Earnings and Adjusted Distributable Earnings are non-GAAP financial measures.
Financial Results • Generated GAAP net loss of $31.1 million, or $(0.26) per basic and diluted share, Distributable Earnings (Loss) of $(17.5) million or $(0.13) per share and Adjusted Distributable Earnings of $83.6 million or $0.64 per share for the year ended December 31, 2025. Distributable Earnings and Adjusted Distributable Earnings are non-GAAP financial measures.
Although “return to office” mandates are on the 43 Table of Contents rise, the demand for office space generally remains lower than pre-COVID-19 pandemic levels and has driven rising vacancy rates. Given the continuing uncertainty in the office market, there is risk of future valuation impairment or investment loss on our loans secured by office properties.
Other than in select cities such as Manhattan, NY, Dallas, TX, and more recently, San Francisco, CA, the demand for office space generally remains lower than pre-COVID-19 pandemic levels and has driven rising vacancy rates. Given the continuing uncertainty in the office market, there is risk of future valuation impairment or investment loss on our loans secured by office properties.
In addition, our methodology for calculating NOI involves subjective judgment and discretion and may differ from the methodologies used by other companies, when calculating the same or similar supplemental financial measures and may not be comparable with other companies. 60 Table of Contents The following tables present a reconciliation of net income (loss) on our net leased and other real estate portfolios attributable to our common stockholders to NOI attributable to our common stockholders (dollars in thousands) for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Net income (loss) attributable to BrightSpire Capital, Inc. common stockholders $ (131,979) $ (15,549) $ 45,788 Adjustments: Net (income) loss attributable to non-net leased and other real estate portfolios (1) 79,127 14,426 (32,342) Net loss attributable to noncontrolling interests in investment entities (3,538) (70) (12) Amortization of above- and below-market lease intangibles 287 (126) (364) Net interest income (69) (71) — Interest expense on real estate 29,117 26,024 28,717 Other income (380) (437) (18) Transaction, investment and servicing expense 32 317 681 Depreciation and amortization 40,381 33,321 33,886 Impairment of operating real estate 54,211 7,590 — Operating expense 64 95 231 Other gain (loss) on investments, net 682 1,660 (10,287) Income tax expense 961 527 231 NOI attributable to noncontrolling interest in investment entities (1,216) (1,204) (1,200) Total NOI, at share $ 67,680 $ 66,503 $ 65,311 ________________________________________ (1) Net (income) loss attributable to non-net leased and other real estate portfolios includes net (income) loss on our senior and mezzanine loans and preferred equity and corporate and other business segments.
The following tables present a reconciliation of net income (loss) on our net leased and other real estate portfolios attributable to our common stockholders to NOI attributable to our common stockholders (dollars in thousands) for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 2024 2023 Net loss attributable to BrightSpire Capital, Inc. common stockholders $ (31,148) $ (131,979) $ (15,549) Adjustments: Net (income) loss attributable to non-net leased and other real estate portfolios (1) (779) 79,127 14,426 Net loss attributable to noncontrolling interests in investment entities (7,620) (3,538) (70) Amortization of above-and below-market lease intangibles 324 287 (126) Net interest expense 116 (69) (71) Interest expense on real estate 23,707 29,117 26,024 Other income (934) (380) (437) Transaction, investment and servicing expense 70 32 317 Depreciation and amortization 36,206 40,381 33,321 Impairment of operating real estate 61,620 54,211 7,590 Operating expense 40 64 95 Other loss on investments, net 2,245 682 1,660 Income tax (benefit) expense (21,761) 961 527 NOI attributable to noncontrolling interest in investment entities (791) (1,216) (1,204) Total NOI attributable to BrightSpire Capital, Inc. common stockholders $ 61,295 $ 67,680 $ 66,503 ________________________________________ (1) Net (income) loss attributable to non-net leased and other real estate portfolios includes net (income) loss on our senior and mezzanine loans and preferred equity and corporate and other business segments.
(2) Represents carrying values at our share as of December 31, 2024; includes real estate tangible assets, deferred leasing costs and other intangible assets less intangible liabilities.
(2) Represents carrying values at our share as of December 31, 2025; includes real estate tangible assets, deferred leasing costs and other intangible assets less intangible liabilities. (3) Refer to “Non-GAAP Supplemental Financial Measures” for further information on NOI.
As of December 31, 2024, we were in compliance with all of our financial covenants under the Credit Agreement.
As of December 31, 2025, the Company was in compliance with all of its financial covenants under the Amended Credit Agreement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe utilize a variety of financial instruments on some of our investments, including interest rate swaps, caps, floors and other interest rate exchange contracts, in order to limit the effects of fluctuations in interest rates on our operations.
Biggest changeFluctuations in SOFR may affect the amount of interest income we earn on our floating rate borrowings and interest expense we incur on borrowings indexed to SOFR, including under credit facilities and investment-level financing. 70 Table of Content s We have utilized, and in the future may utilize, a variety of financial instruments on some of our investments, including interest rate swaps, caps, floors and other interest rate exchange contracts, in order to limit the effects of fluctuations in interest rates on our operations.
Financial Statements The financial statements and the supplementary financial data required by this item appear in Item 15 of this Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.
Financial Statements and Supplementary Data The financial statements and the supplementary financial data required by this item appear in Item 15 of this Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.
We are also subject to the credit risk of the tenants in our properties, including business closures, occupancy levels, meeting rent or other expense obligations, lease concessions, and ESG standards and practices among other factors. We seek to undertake a rigorous credit evaluation of the tenants prior to acquiring properties.
We are also subject to the credit risk of the tenants in our properties, including business closures, occupancy levels, meeting rent or other expense obligations, lease concessions, and sustainability standards and practices among other factors. We seek to undertake a rigorous credit evaluation of the tenants prior to acquiring properties.
Our Master Repurchase Facilities are partial recourse, and margin call provisions do not permit valuation adjustments based on capital markets events; rather they are limited to collateral-specific credit marks generally determined on a commercially reasonable basis. For the year ended December 31, 2024, and through February 18, 2025, we have not received any margin calls under our Master Repurchase Facilities.
Our Master Repurchase Facilities are partial recourse, and margin call provisions do not permit valuation adjustments based on capital markets events; rather they are limited to collateral-specific credit marks generally determined on a commercially reasonable basis. For the year ended December 31, 2025, and through February 17, 2026, we have not received any margin calls under our Master Repurchase Facilities.
Our profitability may be adversely affected during any period as a result of changing interest rates. At December 31, 2024, we held no derivative instruments.
Our profitability may be adversely affected during any period as a result of changing interest rates. At December 31, 2025, we held no derivative instruments.
There can be no assurance that the measures we take will be sufficient to address or mitigate the impact of credit risk on our future operating results, liquidity and financial condition. 70 Table of Contents Real estate market risk We are exposed to the risks generally associated with the commercial real estate market.
There can be no assurance that the measures we take will be sufficient to address or mitigate the impact of credit risk on our future operating results, liquidity and financial condition. 71 Table of Content s Real estate market risk We are exposed to the risks generally associated with the commercial real estate market.
As of December 31, 2024, a hypothetical 100 basis point increase or decrease in the applicable interest rate benchmark on our loan portfolio would increase or decrease interest income by $3.8 million annually, net of interest expense. See the “Factors Impacting Our Operating Results” section in “Item 7.
As of December 31, 2025, a hypothetical 100 basis point increase or decrease in the applicable interest rate benchmark on our loan portfolio would increase or decrease interest income by $1.9 million annually, net of interest expense. See the “Factors Impacting Our Operating Results” section in “Item 7.
Termination or maturity of currency hedging instruments may have resulted in an obligation for payment to or from the counterparty to the hedging agreement. We were exposed to credit loss in the event of non-performance by counterparties for these contracts.
The maturity dates of the prior instruments approximated the projected dates of related cash flows for specific investments. Termination or maturity of currency hedging instruments may have resulted in an obligation for payment to or from the counterparty to the hedging agreement. We were exposed to credit loss in the event of non-performance by counterparties for these contracts.
The use of these 69 Table of Contents types of derivatives to hedge interest-earning assets and/or interest-bearing liabilities carries certain risks, including the risk that losses on a hedge position will reduce the funds available for distribution and that such losses may exceed the amount invested in such instruments.
The use of these types of derivatives to hedge interest-earning assets and/or interest-bearing liabilities carries certain risks, including the risk that losses on a hedge position will reduce the funds available for distribution and that such losses may exceed the amount invested in such instruments. A hedge may not perform its intended purpose of offsetting losses of rising interest rates.
Foreign Currency Risk We have foreign currency rate exposures related to our foreign currency-denominated investments held by our foreign subsidiaries. Changes in foreign currency rates can adversely affect the fair values and earning of our non-U.S. holdings. We generally mitigate this foreign currency risk by utilizing currency instruments to hedge our net investments in our foreign subsidiaries.
Foreign Currency Risk We previously had foreign currency rate exposures related to our prior foreign currency-denominated investments held by our foreign subsidiaries. Changes in foreign currency rates could have adversely affected the fair values and earning of our non-U.S. holdings.
The type of hedging instruments that we employed on our foreign subsidiary investments were put options. At December 31, 2024, we had approximately NOK 251.7 million or a total of $22.2 million, in net investments in our European subsidiaries.
We generally mitigated this foreign currency risk by utilizing currency instruments to hedge our prior net investments in our foreign subsidiaries. The type of hedging instruments that we employed on our foreign subsidiary investments were put options. We had no foreign exchange contracts in place at December 31, 2025.
Removed
Fluctuations in SOFR may affect the amount of interest income we earn on our floating rate borrowings and interest expense we incur on borrowings indexed to SOFR, including under credit facilities and investment-level financing.
Removed
A hedge may not perform its intended purpose of offsetting losses of rising interest rates.
Removed
A 1.0% change in the foreign currency rate would result in a $0.2 million increase or decrease in translation gain or loss included in other comprehensive income in connection with our European subsidiary. We had no foreign exchange contracts in place at December 31, 2024.
Removed
Our previous foreign exchange contracts, including notional amount and key terms, is included in Note 14, “Derivatives,” to Part IV, Item 15, “Exhibits and Financial Statements Schedules.” The maturity dates of these instruments approximated the projected dates of related cash flows for specific investments.

Other BRSP 10-K year-over-year comparisons