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What changed in Franklin BSP Realty Trust, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Franklin BSP Realty Trust, 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.

+336 added−273 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Franklin BSP Realty Trust, Inc.'s 2025 10-K

336 paragraphs added · 273 removed · 231 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe may also invest in whatever other types of interests in real estate-related assets that we believe are in our best interest which may include the commercial real property underlying our debt investments as a result of a loan workout, foreclosure or similar circumstances.
Biggest changeWe may also invest in whatever other types of interests in real estate-related assets that we believe are in our best interest which may include the commercial real property underlying our debt investments as a result of a loan workout, foreclosure or similar circumstances. 3 Table of Contents Agency Business Through the Agency Business unit, the Company, through NewPoint, originates, sells and services a range of multifamily finance products under programs offered by government-sponsored enterprises (“GSEs”), such as the Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) and by government agencies (“Agencies”), such as the Government National Mortgage Association (“Ginnie Mae”) and the Federal Housing Administration, a division of the U.S.
Borrowing Strategies and Policies Our financing strategy primarily includes the use of secured repurchase agreement facilities for loans, securities and securitizations. We also may raise capital through public or private offerings of our equity securities, including through our effective shelf registration statement or our “at-the-market” sales program.
Borrowing Strategies and Policies Our financing strategy primarily includes the use of secured repurchase agreement facilities for loans, securities and securitizations. We also may raise capital through public or private offerings of our equity securities, including through registered offerings under our effective shelf registration statement or our “at-the-market” sales program.
The Conduit loans are typically fixed-rate commercial real estate loans and are long-term (up to ten years), and are predominantly current-pay loans. 3 Table of Contents Ownership of Properties and Other Possible Investments Although we expect that most of our investments will be of the types described above, we may make other investments.
The Conduit loans are typically fixed-rate commercial real estate loans and are long-term (up to ten years), and are predominantly current-pay loans. Ownership of Properties and Other Possible Investments Although we expect that most of our investments will be of the types described above, we may make other investments.
Equity participation can also take the form of a conversion feature, sometimes referred to as a "kicker," which permits the lender to convert a loan or preferred equity investment into common equity in the borrower at a negotiated premium to the current net asset value of the borrower.
Equity participation can also take the form of a conversion feature, sometimes referred to as a “kicker,” which permits the lender to convert a loan or preferred equity investment into common equity in the borrower at a negotiated premium to the current net asset value of the borrower.
In addition, although we generally prefer the benefits of new origination, market conditions can create situations where holders of commercial real estate debt may be in distress and are therefore willing to sell to us at prices that compensate us for the lack of control typically associated with directly structured investments.
In addition, although we generally prefer the benefits of new origination, market conditions can create situations where holders of commercial real estate debt may be in distress and are therefore willing to sell to us at prices that compensate us for the lack of control typically associated with directly structured investments. 1 Table of Contents First Mortgage Loans We primarily focus on first mortgage loans.
The income taxes on the Conduit segment are paid at the U.S. federal and applicable state levels. Competition Our net income depends, in large part, on our ability to originate investments that provide returns in excess of our borrowing cost.
The income taxes paid by the TRS are paid at the U.S. federal and applicable state levels. 4 Table of Contents Competition Our net income depends, in large part, on our ability to originate investments that provide returns in excess of our borrowing cost.
Although we believe that we are well positioned to compete effectively in each facet of our business, there is enormous competition in our market sector and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively. 4 Table of Contents Human Capital Resources As of December 31, 2024, we had no employees.
Although we believe that we are well positioned to compete effectively in each facet of our business, there is enormous competition in our market sector and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.
We routinely use our investor relations website, at www.fbrtreit.com, as a primary channel for disclosing key information to our investors. We may use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.
We are not incorporating our website or any information from the website into this Form 10-K. We routinely use our investor relations website, at www.fbrtreit.com, as a primary channel for disclosing key information to our investors. We may use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.
First Mortgage Loans We primarily focus on first mortgage loans. First mortgage loans generally finance the acquisition, refinancing or rehabilitation of commercial real estate. First mortgage loans may be either short (one-to-five years) or long (up to ten years) term, may be fixed or floating rate, and are predominantly current-pay loans.
First mortgage loans generally finance the acquisition, refinancing or rehabilitation of commercial real estate. First mortgage loans may be either short (one-to-five years) or long (up to ten years) term, may be fixed or floating rate, and are predominantly current-pay loans. We may originate or acquire current-pay first mortgage loans backed by properties that fit our investment strategy.
The Company also originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions. The Company also owns real estate that was either acquired by the Company through foreclosure, deed-in-lieu of foreclosure or that was purchased for investment.
Through this unit the Company also originates conduit loans which the Company intends to sell through its taxable REIT subsidiary ("TRS") into CMBS securitization transactions, and owns real estate that was either acquired by the Company through foreclosure, deed-in-lieu of foreclosure or that was purchased for investment. These financing activities are described in additional detail below.
We may also acquire some equity participations in the underlying collateral of commercial real estate debt. We structure, underwrite, and originate most of our investments.
Commercial Real Estate Debt We originate, fund, acquire and structure commercial real estate debt, including first mortgage loans, mezzanine loans, bridge loans, and other loans related to commercial real estate. We may also acquire some equity participations in the underlying collateral of commercial real estate debt. We structure, underwrite, and originate most of our investments.
In recent years, legislators in the United States and in other countries have said that greater regulation of financial services firms is needed, particularly in areas such as risk management, leverage, and disclosure.
In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In recent years, legislators in the United States and in other countries have said that greater regulation of financial services firms is needed, particularly in areas such as risk management, leverage, and disclosure.
While we expect that additional new regulations in these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, or results of operations or prospects.
While we expect that additional new regulations in these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, or results of operations or prospects. 5 Table of Contents Available Information We electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, and proxy statements, with the SEC.
We may originate or acquire current-pay first mortgage loans backed by properties that fit our investment strategy. We may selectively syndicate portions of these loans, including senior or junior participations that will effectively provide permanent financing or optimize returns which may include retained origination fees.
We may selectively syndicate portions of these loans, including senior or junior participations that will effectively provide permanent financing or optimize returns which may include retained origination fees.
Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and property and U.S. federal income and excise taxes on our undistributed income. We pay income taxes on our Conduit segment, which is conducted by our wholly-owned TRS entities.
Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income and property and U.S. federal income and excise taxes on our undistributed income. We pay income taxes on our operations conducted through our TRSs, including our Agency Business and the Conduit business.
Our executive officers serve as officers of our Advisor and are employed by an affiliate of our Advisor. The employees of the Advisor and other affiliates of the Advisor perform a full range of real estate services for us, including origination, acquisitions, accounting, legal, asset management, wholesale brokerage, and investor relations services.
The employees of the Advisor and other affiliates of the Advisor perform a full range of real estate services for us with respect to our Commercial Real Estate Financing business, including origination, acquisitions, accounting, legal, asset management, wholesale brokerage, and investor relations services.
We intend to conduct our business so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act. In our judgment, existing statutes and regulations have not had a material adverse effect on our business.
We intend to conduct our business so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act.
Real Estate Securities In addition to our focus on origination of and investments in commercial real estate debt, we may also acquire real estate securities, such as CMBS, CMBS bonds, CDO notes, and equity investments in entities that own commercial real estate.
Real Estate Securities In addition to our focus on origination of and investments in commercial real estate debt, we may also acquire real estate securities, such as CMBS, CMBS bonds, CDO notes, and equity investments in entities that own commercial real estate. 2 Table of Contents CMBS & CMBS Bonds CMBS and CMBS bonds are securities that are collateralized by, or evidence ownership interests in, a single commercial mortgage loan or a partial or entire pool of mortgage loans secured by commercial properties.
Secondarily, the Company's real estate securities business focuses on investing in and asset managing real estate securities. Historically this business has focused primarily on commercial mortgage-backed securities ("CMBS"), commercial real estate collateralized loan obligation bonds and single asset single borrower bonds (collectively "CMBS bonds"), collateralized debt obligations ("CDOs") and other securities.
Secondarily, this unit also invests in and asset manages real estate securities, with a historical focus on commercial mortgage-backed securities ("CMBS"), commercial real estate collateralized loan obligation bonds and single asset single borrower bonds (collectively "CMBS bonds"), collateralized debt obligations ("CDOs") and other securities.
With the credit market disruption and resulting dearth of capital available in this part of the capital structure, we believe that the opportunities to both directly originate and to buy mezzanine loans from third parties on favorable terms will continue to be attractive. 2 Table of Contents Equity Participations or “Kickers” We may pursue equity participation opportunities in connection with our commercial real estate debt originations if we believe that the risk-reward characteristics of the loan merit additional upside participation related to the potential appreciation in value of the underlying assets securing the loan.
Equity Participations or “Kickers” We may pursue equity participation opportunities in connection with our commercial real estate debt originations if we believe that the risk-reward characteristics of the loan merit additional upside participation related to the potential appreciation in value of the underlying assets securing the loan.
Our competitors may also be willing to accept lower returns on their investments and may succeed in buying or underwriting the assets that we have targeted.
Our competitors may also be willing to accept lower returns on their investments and may succeed in buying or underwriting the assets that we have targeted. Many of our competitors are not subject to the operating constraints associated with REIT rule compliance or maintenance of an exclusion from registration under the Investment Company Act.
In addition, copies of our filings with the SEC may be obtained from the website maintained for us at www.fbrtreit.com. Access to these filings is free of charge. We are not incorporating our website or any information from the website into this Form 10-K.
The SEC maintains an internet address at www.sec.gov that contains reports, proxy statements and information statements, and other information, which may be obtained free of charge. In addition, copies of our filings with the SEC may be obtained from the website maintained for us at www.fbrtreit.com. Access to these filings is free of charge.
The Advisor, an investment adviser registered with the SEC, is a credit-focused alternative asset management firm that was established in 2008. Our Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private/opportunistic debt, liquid credit, structured credit and commercial real estate debt.
Established in 2008, the Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private/opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform.
We are a Maryland corporation and have made tax elections to be treated as a real estate investment trust (a "REIT") for U.S. federal income tax purposes since 2013. We believe that we have qualified as a REIT and we intend to continue to meet the requirements for qualification and taxation as a REIT.
Item 1. Business Franklin BSP Realty Trust, Inc. (the “Company”), is a real estate finance company, formed as a Maryland corporation, that has elected to be treated as a real estate investment trust (“REIT”) for U.S. federal income tax purposes since 2013.
These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor manages the Company's affairs on a day-to-day basis. The Advisor receives compensation fees and reimbursements for services related to the investment and management of the Company's assets and the operations of the Company.
(the “Advisor”) pursuant to an advisory agreement, as amended on August 18, 2021 (the “Advisory Agreement”). The Advisor manages our affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of our assets and our operations.
The advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as "Franklin Templeton”. The Company primarily focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans.
Investment Strategies and Policies The Company’s operations are organized into two business units: (i) Commercial Real Estate Financing, and (ii) Agency Business. Commercial Real Estate Financing The Commercial Real Estate Financing business unit primarily focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans.
Substantially all of our business is conducted through Benefit Street Partners Realty Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. We are the sole general partner and directly or indirectly hold all of the units of limited partner interests in the OP.
Substantially all of the Company’s business is conducted through FBRT OP LLC, a Delaware limited liability company (the “OP”) and to its subsidiaries. The Company is the managing member of the OP and directly or indirectly held 91% of the common units of membership interests in the OP as of December 31, 2025.
Removed
Item 1. Business Franklin BSP Realty Trust, Inc. (the “Company”), is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt investments secured by properties located within and outside the United States.
Added
As discussed in more detail below, the Company’s operations are organized into two business units: (i) Commercial Real Estate Financing, and (ii) Agency Business. On July 1, 2025, through a wholly owned subsidiary, the Company acquired NewPoint Holdings JV LLC (“NewPoint”), which now comprises the Company’s Agency Business unit. The Company is externally managed by Benefit Street Partners L.L.C.
Removed
One or more of our wholly-owned subsidiaries are treated as taxable REIT subsidiaries (each a “TRS”), and are subject to U.S. federal, state and local income taxes. The Company has no employees. Benefit Street Partners L.L.C. serves as our advisor ("Advisor") pursuant to an advisory agreement, as amended on August 18, 2021 (the "Advisory Agreement").
Added
The Advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as “Franklin Templeton.” As of December 31, 2025, we had 223 employees, all of which are employees of NewPoint. Investment Objectives Our objective is to provide our common shareholders attractive, risk-adjusted returns through dividends and capital growth.
Removed
Investment Objectives Our objective is to provide our common shareholders attractive, risk-adjusted returns through a stable dividend and capital growth. Investment Strategies and Policies We have four investment strategies.
Added
With the credit market disruption and resulting dearth of capital available in this part of the capital structure, we believe that the opportunities to both directly originate and to buy mezzanine loans from third parties on favorable terms will continue to be attractive.
Removed
Our first and primary strategy is to originate, acquire and manage a diversified portfolio of commercial real estate debt, including first mortgage loans, subordinate loans, mezzanine loans and participations in such loans.
Added
Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). The Company retains the servicing rights and asset management responsibilities on substantially all loans it originates and sells under the GSE and HUD programs.
Removed
We expect that our portfolio of debt investments will be secured by real estate located within and outside the United States and diversified by property type and geographic location. Our second strategy is to invest in real estate securities, such as CMBS, CMBS bonds, senior unsecured debt of publicly-traded REITs and CDO notes.
Added
The Company is an approved Fannie Mae Delegated Underwriting and Servicing (“DUS”) lender, a Freddie Mac Program Plus Seller/Servicer, a Multifamily Accelerated Processing (“MAP”) and Section 232 LEAN lender for HUD and a Ginnie Mae issuer. Additionally, the Company services external portfolios of commercial real estate financing products.
Removed
Our third strategy is to originate conduit loans and sell them through our TRS business into CMBS securitization transactions.
Added
In addition, future changes in law, regulations and GSE/HUD program requirements, and consolidation in the commercial real estate finance market could lead to the entry of more competitors or enhance the competitive strength of our existing competitors.
Removed
Our fourth strategy is to maximize cash flows from real estate acquired by the Company through foreclosure and deed-in-lieu of foreclosure, and purchases of real estate that generally are, or will be, subject to a triple net lease. 1 Table of Contents Commercial Real Estate Debt We originate, fund, acquire and structure commercial real estate debt, including first mortgage loans, mezzanine loans, bridge loans, and other loans related to commercial real estate.
Added
Human Capital Resources As of December 31, 2025, we had 223 employees, all of which are employees of NewPoint. Our executive officers serve as officers of our Advisor and are employed by an affiliate of our Advisor.
Removed
CMBS & CMBS Bonds CMBS and CMBS bonds are securities that are collateralized by, or evidence ownership interests in, a single commercial mortgage loan or a partial or entire pool of mortgage loans secured by commercial properties.
Added
Our Chief Executive Officer, President and Chief Operating Officer/Chief Financial Officer also serve as non-employee officers of NewPoint. Our human capital management strategy with respect to NewPoint employees focuses on attracting, developing, and retaining the highest quality talent. We work to achieve these objectives by offering competitive compensation, comprehensive benefits, and opportunities for career growth and development.
Removed
Available Information We electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, and proxy statements, with the SEC. The SEC maintains an internet address at www.sec.gov that contains reports, proxy statements and information statements, and other information, which may be obtained free of charge.
Added
To maintain our status as an approved lender for Fannie Mae and Freddie Mac and as a HUD-approved mortgagee and issuer of Ginnie Mae securities, we are required to meet and maintain various eligibility criteria established by these entities, such as minimum net worth, operational liquidity and collateral requirements and compliance with reporting requirements.
Added
We are required to originate loans and perform our loan servicing functions in accordance with the applicable program requirements and guidelines established by these agencies. If we fail to comply with the requirements of any of these programs, the agencies may terminate or withdraw our licenses and approvals to participate in the GSE or HUD programs.
Added
In addition, the agencies have the authority under their guidelines to terminate a lender’s authorization to sell loans to them and service their loans. The loss of one or more of these approvals would have a material adverse impact on our operations and could result in further disqualification with other counterparties.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeU.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of those laws may be amended at any time, potentially with retroactive effect. Changes to the U.S. federal income tax laws, including the possibility of major tax legislation, could have a material and adverse effect on us or our stockholders.
Biggest changeChanges to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have a material and adverse effect on us. U.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of those laws may be amended at any time, potentially with retroactive effect.
These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets, and it is possible that we might be required to borrow funds or sell assets to fund these distributions. • We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of (i) 85% of our ordinary income, (ii) 95% of our capital gain net income and (iii) 100% of our undistributed income from prior years. 16 Table of Contents • If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate. • If we sell an asset, other than a foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax.
These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets, and it is possible that we might be required to borrow funds or sell assets to fund these distributions. 17 Table of Contents • We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of (i) 85% of our ordinary income, (ii) 95% of our capital gain net income and (iii) 100% of our undistributed income from prior years. • If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate. • If we sell an asset, other than a foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax.
We have significant competition with respect to our origination and acquisition of assets with many other companies, including other REITs, insurance companies, commercial banks, private investment funds, hedge funds, specialty finance companies and other investors, many of which have greater resources than we, and may not be able to compete successfully for investments.
We have significant competition with respect to our origination and acquisition of assets with many other companies, including other REITs, insurance companies, commercial banks, private investment funds, hedge funds, specialty finance companies and other investors, many of which have greater resources than us, and we may not be able to compete successfully for investments.
The repayment of loans secured by income-producing properties is typically dependent upon the successful operation of the related real estate project rather than upon the liquidation value of the underlying real estate. Furthermore, the net operating income from and value of any commercial property are subject to various risks.
The repayment of loans secured by income-producing properties is typically dependent upon the successful operation of the related real estate project rather than upon the liquidation value of the underlying real estate. Furthermore, the net operating income from and the value of any commercial property are each subject to various risks.
Some of our investments will be carried at estimated fair value as determined by us and, as a result, there may be uncertainty as to the value of these investments. Some of our investments will be in the form of securities that are recorded at fair value but have limited liquidity or are not publicly-traded.
Some of our investments are carried at estimated fair value as determined by us and, as a result, there may be uncertainty as to the value of these investments. Some of our investments are in the form of securities that are recorded at fair value but have limited liquidity or are not publicly-traded.
Our loans typically have a term of about three to five years. As a result, a significant amount of our invested capital is repaid at loan maturity each year. Our operating results are dependent upon our ability to identify, structure, consummate, leverage, manage and realize attractive returns on, new loans and other investments.
Our loans typically have a term of about three to ten years. As a result, a significant amount of our invested capital is repaid at loan maturity each year. Our operating results are dependent upon our ability to identify, structure, consummate, leverage, manage and realize attractive returns on, new loans and other investments.
When we acquire companies, we face risks related to integrating the acquired company in a manner that allows us to achieve the synergies and other benefits of the acquisition or do so within the anticipated time frame. From time to time, we may acquire other companies, such as our 2021 acquisition of Capstead Mortgage Corp.
When we acquire companies, we face risks related to integrating the acquired company in a manner that allows us to achieve the synergies and other benefits of the acquisition or do so within the anticipated time frame. From time to time, we may acquire other companies, such as our 2021 acquisition of Capstead Mortgage Corp. and 2025 acquisition of NewPoint.
The Advisory Agreement 14 Table of Contents may be terminated each year without cause upon the affirmative vote of at least two-thirds of our independent directors, based upon a determination that (i) our Advisor’s performance is unsatisfactory and materially detrimental to us or (ii) the base management fee and annual incentive fee payable to our Advisor are not fair (provided that in this instance, our Advisor will be afforded the opportunity to renegotiate the management fee and incentive fees prior to termination).
The Advisory Agreement may be terminated each year without cause upon the affirmative vote of at least two-thirds of our independent directors, based upon a determination that (i) our Advisor’s performance is unsatisfactory and materially detrimental to us or (ii) the base management fee and annual incentive fee payable to our Advisor are not fair (provided that in this instance, our Advisor will be afforded the opportunity to renegotiate the management fee and incentive fees prior to termination).
In a weakening economic environment, or in an environment of widening credit spreads, we would generally expect the value of the commercial real estate debt or securities that serve as collateral for our short-term borrowings to decline, and in such a scenario, it is likely that the terms of our short-term borrowings would require us to provide additional collateral or to make partial repayment, which amounts could be substantial.
In a weakening economic environment, or in an environment of widening credit spreads, we would generally expect the value of the commercial real estate debt or securities that serve as collateral for our 7 Table of Contents short-term borrowings to decline, and in such a scenario, it is likely that the terms of our short-term borrowings would require us to provide additional collateral or to make partial repayment, which amounts could be substantial.
Subject to maintaining our qualification as a REIT, part of our investment strategy involves entering into hedging transactions that 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).
Subject to maintaining our qualification as a REIT, part of our investment strategy involves entering into hedging transactions that 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 13 Table of Contents securities it is contractually owed under the terms of the hedging instrument).
The primary risks to us of construction loans are the potential for cost overruns, the developer’s failing to meet a project delivery schedule and the inability of a developer to sell or refinance the project at completion in accordance with its business plan and repay our commercial real estate loan due to declining real estate values.
The primary risks to us of construction loans are the potential for cost overruns, the developer’s failing to meet a project delivery 9 Table of Contents schedule and the inability of a developer to sell or refinance the project at completion in accordance with its business plan and repay our commercial real estate loan due to declining real estate values.
If the borrower’s plans or projections with respect to the property are not achieved, some of which, including renovations or expansions, carry heightened risks, the borrower may not receive a sufficient return on the asset to satisfy our transitional loan, and we bear the risk that we may not recover some or all of our investment.
If the borrower’s plans or projections with respect to the property are not achieved, 8 Table of Contents some of which, including renovations or expansions, carry heightened risks, the borrower may not receive a sufficient return on the asset to satisfy our transitional loan, and we bear the risk that we may not recover some or all of our investment.
Risks Related to Taxation Our failure to qualify as a REIT could have significant adverse consequences to us and the value of our common stock. We believe that we have qualified as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2013.
Risks Related to Taxation 16 Table of Contents Our failure to qualify as a REIT could have significant adverse consequences to us and the value of our common stock. We believe that we have qualified as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2013.
In addition, our investments may be exposed to new or 19 Table of Contents increased risks and liabilities associated with global climate change, such as increased frequency or intensity of adverse weather and natural disasters, which could negatively impact our and our borrowers’ businesses and the value of the properties securing our loans or in which we invest.
In addition, our investments may be exposed to new or increased risks and liabilities associated with global climate change, such as increased frequency or intensity of adverse weather and natural disasters, which could negatively impact our and our borrowers’ businesses and the value of the properties securing our loans or in which we invest.
In order to borrow funds to acquire assets under any additional warehouse facilities, we expect that our lenders thereunder would have the right to review the potential assets for which we are seeking financing.
In order to borrow funds to acquire assets under any additional warehouse facilities, our lenders thereunder would have the right to review the potential assets for which we are seeking financing.
If the Internal Revenue Service (“IRS”) challenged our treatment of investments for purposes of the REIT asset and income tests, and if such a challenge were sustained, we could fail to qualify as a REIT. • The fact that we own direct or indirect interests in an entity that will elect to be taxed as a REIT under the U.S. federal income tax laws (a “Subsidiary REIT”), further complicates the application of the REIT requirements for us.
If the Internal Revenue Service (“IRS”) challenged our treatment of investments for purposes of the REIT asset and income tests, and if such a challenge were sustained, we could fail to qualify as a REIT. • The fact that we own direct or indirect interests in an entity that has elected to be taxed as a REIT under the U.S. federal income tax laws (a “Subsidiary REIT”), further complicates the application of the REIT requirements for us.
In addition, the number of entities and the amount of funds competing for suitable investments may increase. Many of our competitors are not subject to the operating constraints associated with REIT rule compliance or maintenance of an 10 Table of Contents exclusion from registration under the Investment Company Act.
In addition, the number of entities and the amount of funds competing for suitable investments may increase. Many of our competitors are not subject to the operating constraints associated with REIT rule compliance or maintenance of an exclusion from registration under the Investment Company Act.
The securitization of our portfolio investments might magnify our exposure to losses on those portfolio investments because the subordinated interest we retain in the loans sold would be subordinate to the senior interest in the loans sold, and we would, therefore, absorb all of the losses sustained with respect to a loan sold before the owners of the senior interest experience any 12 Table of Contents losses.
The securitization of our portfolio investments might magnify our exposure to losses on those portfolio investments because the subordinated interest we retain in the loans sold would be subordinate to the senior interest in the loans sold, and we would, therefore, absorb all of the losses sustained with respect to a loan sold before the owners of the senior interest experience any losses.
We intend to continue to meet the requirements for qualification and taxation as a REIT, but we 15 Table of Contents cannot assure stockholders that we qualify as a REIT. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only a limited number of judicial and administrative interpretations exist.
We intend to continue to meet the requirements for qualification and taxation as a REIT, but we cannot assure stockholders that we qualify as a REIT. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only a limited number of judicial and administrative interpretations exist.
In this manner, reduced real estate values could impact the values of our debt and security investments, making them subject to the risks typically associated with real estate ownership.
In this manner, reduced real estate values could impact the values of our debt and real estate securities investments, making them subject to the risks typically associated with real estate ownership.
In connection with the servicing of the specially serviced mortgage loans, the related special servicer may, at the direction of the directing certificate holder, take actions that could adversely affect our interests. We invest in CDOs and such investments involve significant risks.
In connection with the servicing of the specially 10 Table of Contents serviced mortgage loans, the related special servicer may, at the direction of the directing certificate holder, take actions that could adversely affect our interests. We invest in CDOs and such investments involve significant risks.
If rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our investments in the future, the value and liquidity of those investments could significantly decline, which would adversely affect the value of our investment portfolio.
If rating agencies assign a lower-than-expected rating or 12 Table of Contents reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our investments in the future, the value and liquidity of those investments could significantly decline, which would adversely affect the value of our investment portfolio.
For example, special risks are presented by hospitals, nursing 9 Table of Contents homes, hospitality properties and certain other property types. Commercial property values and net operating income are subject to volatility, which may result in net operating income becoming insufficient to cover debt service on the related commercial real estate loan, particularly if the current economic environment deteriorates.
For example, special risks are presented by hospitals, nursing homes, hospitality properties and certain other property types. Commercial property values and net operating income are subject to volatility, which may result in net operating income becoming insufficient to cover debt service on the related commercial real estate loan, particularly if the current economic environment deteriorates.
If alternative financing is not available, we may have to liquidate assets at unfavorable prices to pay off our short-term borrowings or pay significant fees to extend these financing arrangements. Lenders often require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions.
If alternative financing is not available, we may have to liquidate assets at unfavorable prices to pay off our short-term borrowings or pay significant fees to extend these financing arrangements. 6 Table of Contents Lenders often require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions.
Prospective investors are urged to consult their tax advisors regarding the effect of potential changes to the U.S. federal tax laws on an investment in our stock. 18 Table of Contents Risks Related to an Investment in Franklin BSP Realty Trust, Inc.
Prospective investors are urged to consult their tax advisors regarding the effect of potential changes to the U.S. federal tax laws on an investment in our stock. Risks Related to an Investment in Franklin BSP Realty Trust, Inc.
We may not be able to earn returns on loans we make in excess of the interest we pay on our borrowings. 5 Table of Contents We try to generate financial returns by making and investing in loans and debt securities that generate returns in excess of our cost of capital.
We may not be able to earn returns on loans we make in excess of the interest we pay on our borrowings. We try to generate financial returns by making and investing in loans and debt securities that generate returns in excess of our cost of capital.
Any credit ratings on our investments are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings will not be downgraded or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant.
Some of our investments may be rated by rating agencies. Any credit ratings on our investments are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings will not be downgraded or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant.
As a result, we could experience poor performance or losses for which our Advisor would not be liable. Termination of our Advisory Agreement would be difficult and costly. The circumstances under which we can terminate our Advisory Agreement for cause are limited and do not include performance. Termination of our Advisory Agreement without cause would be difficult and costly.
As a result, we could experience poor performance or losses for which our Advisor would not be liable. 15 Table of Contents Termination of our Advisory Agreement would be difficult and costly. The circumstances under which we can terminate our Advisory Agreement for cause are limited and do not include performance.
Under such circumstances, the insurance proceeds, if any, might not be adequate to restore the economic value of the property, which might impair our security interest and decrease the value of the property. We invest in CMBS and CMBS bonds, which may include subordinate securities, which entails certain risks.
Under such circumstances, the insurance proceeds, if any, might not be adequate to restore the economic value of the property, which might impair our security interest and decrease the value of the property. We invest in CMBS and CMBS bonds, which entails certain risks, including those related to subordinate securities.
Our operating results may be adversely affected by a number of risks generally incident to holding real estate and real estate debt, including, without limitation: • natural disasters, such as hurricanes, earthquakes and floods, which we expect to increase in strength and frequency due to climate change; • acts of war or terrorism, or criminal violence, including the consequences of terrorist attacks and other such acts; • adverse changes in national and local economic and real estate conditions; • adverse changes in economic and market conditions related to pandemics and health crises, such as COVID-19; • an oversupply of (or a reduction in demand for) space in the areas where properties securing our loans are located and the attractiveness of particular properties to prospective tenants; • changes in interest rates and availability of permanent mortgage funds that may render the sale of property difficult or unattractive; 7 Table of Contents • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance therewith and the potential for liability under applicable laws; • costs of remediation and liabilities associated with environmental conditions affecting properties; • reduced demand for office space, including as a result of changes in work habits, including remote or hybrid work schedules which allow work from remote locations other than the employer’s office premises; • the potential for uninsured or underinsured property losses; and • periods of high interest rates and tight money supply.
Our operating results may be adversely affected by a number of risks generally incident to holding real estate and real estate debt, including, without limitation: • natural disasters, such as hurricanes, earthquakes and floods, which we expect to increase in strength and frequency due to climate change; • acts of war or terrorism, or criminal violence, including the consequences of terrorist attacks, civil unrest and other such acts; • adverse changes in national and local economic and real estate conditions; • adverse changes in economic and market conditions related to pandemics and health crises; • an oversupply of (or a reduction in demand for) space in the areas where properties securing our loans are located and the attractiveness of particular properties to prospective tenants; • changes in interest rates and availability of permanent mortgage funds that may render the sale of property difficult or unattractive; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance therewith and the potential for liability under applicable laws; • costs of remediation and liabilities associated with environmental conditions affecting properties; • reduced demand for office space, including as a result of changes in work habits, including remote or hybrid work schedules, or reductions in employee headcount due to artificial intelligence technologies; • the potential for uninsured or underinsured property losses; and • periods of high interest rates and tight money supply.
Our acquisition of companies can create significant risks, including: • issues related to the acquired business that were not identified in our diligence review prior to acquisition; • the significant management attention and resources we would need to devote to integrating the acquired business, including any employees of the acquired company; • costs associated with retaining key employees of the acquired business; • legal and regulatory burdens associated with the acquired business; and • potential stockholder dilution as a result of the consideration paid.
Our acquisition of companies creates significant risks, including: • issues related to the acquired business that were not identified in our diligence review prior to acquisition; • the significant management attention and resources needed to devote to integrating the acquired business, including any employees of the acquired company; • costs associated with retaining key employees of the acquired business; • legal and regulatory burdens associated with the acquired business; and • potential stockholder dilution as a result of the consideration paid.
Under the CECL model, we are required to provide allowances for credit losses on certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity debt securities, including related future funding commitments and accrued interest receivable.
Under the Current Expected Credit Loss model (“CECL”) model for recognizing credit losses, we are required to provide allowances for credit losses on certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity debt securities, including related future funding commitments and accrued interest receivable.
Furthermore, any costs or delays involved in the maintenance or liquidation of the underlying property will further reduce the net proceeds and, thus, increase the loss. 8 Table of Contents Subordinate commercial real estate debt that we originate or acquire could expose us to greater losses.
Furthermore, any costs or delays involved in the maintenance or liquidation of the underlying property will further reduce the net proceeds and, thus, increase the loss. Subordinate commercial real estate debt that we originate or acquire could expose us to greater losses than primary mortgage loans do.
If our due diligence fails to identify material issues, we have had to in the past and may in the future have to write-down or write-off assets, restructure our investment or incur impairment or other charges that could result in our reporting losses.
If our due 11 Table of Contents diligence fails to identify material issues or fraudulent inflation of asset values, we have had to in the past and may in the future have to write-down or write-off assets, restructure our investment or incur impairment or other charges that could result in our reporting losses.
In some states, foreclosure actions can take several years or more to resolve. At any time during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure action and further delaying the foreclosure process. The resulting time delay could reduce the value of the assets under the defaulted loans.
In some states, foreclosure actions can take several years or more to resolve. At any time during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure action and further delaying the foreclosure process.
The Advisor currently manages other investment programs that share similar investment objectives with us and target similar investments as us, including Franklin BSP Real Estate Debt, Inc. (a non-traded REIT) and two private funds, and may in the future advise additional competing investment programs (together, the “Other Funds”). Some investment opportunities that are suitable for the Other Funds.
The Advisor 14 Table of Contents currently manages other investment programs that share similar investment objectives with us and target similar investments as us, including Franklin BSP Real Estate Debt, Inc. (a non-traded REIT) and three private funds, and the Advisor may in the future advise additional competing investment programs (together, the “Other Funds”).
We rely on the availability of collateralized debt and loan obligation securitization markets to provide long-term financing for our loans and investments. We rely on short-term borrowings, such as repurchase agreements and our secured revolving credit facilities, to initially fund our investments.
We may use collateralized debt and loan obligation securitization markets to provide long-term financing for our loans and investments which may not be available. We rely on short-term borrowings, such as repurchase agreements and our secured revolving credit facilities, to initially fund our investments.
Loans on properties in transition will involve a greater risk of loss than conventional mortgage loans. We primarily invest in transitional loans to borrowers who are typically seeking short-term capital to be used in an acquisition or rehabilitation of a property.
Loans on properties in transition will involve a greater risk of loss than conventional mortgage loans. The Commercial Real Estate Financing business unit primarily invests in transitional loans to borrowers who are typically seeking short-term capital to be used in an acquisition or rehabilitation of a property.
Although a safe-harbor exception to prohibited transaction treatment is available, there can be no assurance that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. 17 Table of Contents It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS.
Although a safe-harbor exception to prohibited transaction treatment is available, there can be no assurance that we can comply with the safe harbor or 18 Table of Contents that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business.
Our access to sources of financing will depend upon a number of factors, over which we have little or no control, including: • general economic or market conditions; • the market’s view of the quality of our assets; • the market’s perception of our growth potential; • our current and potential future earnings and cash distributions; and • the market price of the shares of our common stock and preferred stock. 6 Table of Contents We may need to periodically access the capital markets to, among other things, raise cash to fund new loans and investments.
Our access to sources of financing will depend upon a number of factors, over which we have little or no control, including: • general economic or market conditions; • the market’s view of the quality of our assets; • the market’s perception of our growth potential; • our current and potential future earnings and cash distributions; and • the market price of the shares of our common stock and preferred stock.
Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. Risks Related to Conflicts of Interest The Advisor faces conflicts of interest relating to purchasing commercial real estate-related investments, and such conflicts may not be resolved in our favor, which could adversely affect our investment opportunities.
Risks Related to Conflicts of Interest The Advisor faces conflicts of interest relating to purchasing commercial real estate-related investments, and such conflicts may not be resolved in our favor, which could adversely affect our investment opportunities.
The REIT provisions of the Internal Revenue Code may limit our ability to effectively hedge our assets and operations.
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. The REIT provisions of the Internal Revenue Code may limit our ability to effectively hedge our assets and operations.
Unfavorable economic conditions or capital market conditions may increase our funding costs, limit our access to the capital markets or result in a decision by our potential lenders not to extend credit.
We may need to periodically access the capital markets to, among other things, raise cash to fund new loans and investments. Unfavorable economic conditions or capital market conditions may increase our funding costs, limit our access to the capital markets or result in a decision by our potential lenders not to extend credit.
The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and forward looking information through the use of projected macroeconomic scenarios over the reasonable and supportable forecasts. This measurement takes place at the time the financial asset is first added to the balance sheet and updated quarterly thereafter.
The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and forward looking information through the use of projected macroeconomic scenarios over the reasonable and supportable forecasts.
We may be unable to maintain or increase cash distributions over time, or may decide to reduce the amount of distributions for business reasons. There are many factors that can affect the amount and timing of cash distributions to stockholders.
We may be unable to maintain or increase cash distributions over time, or may decide to reduce the amount of distributions for business reasons.
Thus, the executive officers and real estate professionals of the Advisor could direct attractive investment 13 Table of Contents opportunities to other entities or investors, including the Other Funds.
Some investment opportunities that are suitable for the Other Funds are also suitable for us. The executive officers and real estate professionals of the Advisor could direct attractive investment opportunities to other entities or investors, including the Other Funds.
Consequently, changes in interest rates, particularly short-term interest rates, may significantly influence our net income. Increases in these rates will tend to decrease our net income and the market value of our assets.
Increases in these rates will tend to decrease our net income and the market value of our assets.
In addition, global climate change concerns could result in additional legislation and regulatory requirements, including those associated with the transition to a low-carbon economy, which could increase expenses or otherwise adversely impact our business, results of operations and financial condition, or the business, results of operations and financial condition of our borrowers. Item 1B. Unresolved Staff Comments. None.
In addition, global climate change concerns could result in additional legislation and regulatory requirements which could increase expenses or otherwise adversely impact our business, results of operations and financial condition, or the business, results of operations and financial condition of our borrowers.
We cannot predict whether, when, to what extent or with what effective dates new U.S. federal tax laws, regulations, interpretations or rulings will be issued.
Changes to the U.S. federal income tax laws could have a material and adverse effect on us or our stockholders. We cannot predict whether, when, to what extent or with what effective dates new U.S. federal tax laws, regulations, interpretations or rulings will be issued.
Unless we qualified for relief under certain Internal Revenue Code cure provisions, such failures could cause us to fail to continue to qualify as a REIT. Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have a material and adverse effect on us.
Unless we qualified for relief under certain Internal Revenue Code cure provisions, such failures could cause us to fail to continue to qualify as a REIT. If the OP fails to qualify as a partnership for U.S. federal income tax purposes, we could fail to qualify as a REIT and suffer other adverse consequences.
In certain prior periods, quarterly distributions have been in excess of our quarterly earnings. Distributions in excess of earnings decrease the book value per share of common stock. The Company cannot give any assurance that returns from the investments will be sufficient to maintain or increase cash available for distributions to stockholders.
Distributions in excess of earnings decrease the book value per share of common stock. The Company cannot give any assurance that returns from the investments will be sufficient to maintain or increase cash available for distributions to stockholders. Actual results may differ significantly from the assumptions used by the board of directors in establishing the distribution rate to stockholders.
Income from our assets may respond more slowly to interest rate fluctuations than the cost of our borrowings. In a period of rising interest rates, our interest expense on floating-rate debt would increase, while any additional interest income we earn on our floating-rate investments may not compensate for such increase in interest expense.
In a period of rising interest rates, our interest expense on floating-rate debt would increase, while any additional interest income we earn on our floating-rate investments may not compensate for such increase in interest expense. Consequently, changes in interest rates, particularly short-term interest rates, may significantly influence our net income.
Moreover, the CECL model created more volatility in the level of our credit loss provisions. If we are required to materially increase our future level of credit loss allowances for any reason, such increase could adversely affect our business, results of operations, liquidity and financial conditions.
If we are required to materially increase our future level of credit loss allowances for any reason, such increase could adversely affect our business, results of operations, liquidity and financial conditions. Any credit ratings assigned to our investments will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded.
However, to the extent that we engage in such activities through a TRS, the income associated with such activities may be subject to U.S. federal corporate income tax. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS. However, to the extent that we engage in such activities through a TRS, the income associated with such activities may be subject to U.S. federal corporate income tax.
Actual results may differ significantly from the assumptions used by the board of directors in establishing the distribution rate to stockholders. The Company may not have sufficient cash from operations to make a distribution required to qualify for or maintain our REIT status, which may materially adversely affect the value of our securities.
The Company may not have sufficient cash from operations to make a distribution required to qualify for or maintain our REIT status, which may materially adversely affect the value of our securities. There is no assurance that the Company will be able to pay or maintain the current level of distributions or that distributions will increase over time.
During periods of rising interest rates, our interest expense increases may outpace any increases in interest we earn on our assets, and the value of our assets may decrease. Our operating results depend in large part on the income from our assets, reduced by any credit losses and financing costs.
Changes in interest rates, particularly short-term interest rates, may significantly influence our net income. Our operating results depend in large part on the income from our assets, reduced by any credit losses and financing costs. Income from our assets may respond more slowly to interest rate fluctuations than the cost of our borrowings.
The amount of cash available for distributions is affected by many factors, such as the cash provided by the Company's investments and obligations to repay indebtedness as well as many other variables. There is no assurance that the Company will be able to pay or maintain the current level of distributions or that distributions will increase over time.
The amount of cash available for distributions is affected by many factors, such as the cash provided by the Company's investments and obligations to repay indebtedness as well as many other variables. In certain prior periods, including the last ten quarters, quarterly distributions have been in excess of our quarterly GAAP net income.
Removed
Our estimates and judgments may not be correct and, therefore, our results of operations and financial condition could be severely impacted. 11 Table of Contents Accounting Standards Update 2016-13, “Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments (Topic 326),” which replaced the “incurred loss” model for recognizing credit losses with an “expected loss” model referred to as the Current Expected Credit Loss model (“CECL”) became effective for us on January 1, 2020.
Added
The resulting time delay could reduce the value of the assets under the defaulted loans and delay us in reinvesting the principal associated with such investments in higher yielding assets.
Removed
This differs significantly from the “incurred loss” model previously required under GAAP, which delayed recognition until it was probable a loss had been incurred. Accordingly, the adoption of the CECL model has materially affected how we determine our credit loss provision and required us to significantly increase our allowance and recognize provisions for credit losses earlier in the lending cycle.
Added
Our estimates and judgments may not be correct and, therefore, our results of operations and financial condition could be severely impacted.
Removed
Any credit ratings assigned to our investments will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded. Some of our investments may be rated by rating agencies.
Added
This measurement takes place at the time the financial asset is first added to the balance sheet and updated quarterly thereafter, which creates volatility in the level of our credit loss provisions.
Removed
Public health crises have adversely impacted, and may in the future adversely impact, our business and the business of many of our borrowers. Public health crises can have repercussions across domestic and global economies and financial markets.
Added
Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. Risks Related to NewPoint and our Agency Business The acquisition of NewPoint and the operation of our Agency Business exposes us to a variety of additional risks that could materially and adversely affect our financial condition and results of operations.
Removed
For example, the COVID-19 pandemic resulted in many governmental authorities imposing significant restrictions on businesses and individuals that triggered economic consequences, including high unemployment, then high inflation, that resulted in challenging operating conditions for many businesses, particularly in the retail (including restaurants), office and hospitality sectors.
Added
The acquisition of NewPoint and the operation of our Agency Business has and will expose us to a variety of additional risks that could materially and adversely affect our financial condition and results of operations, including the following risks: • an adverse change in our relationships with government sponsored entities (GSE’s) associated with agency mortgages (Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Government National Mortgage Association and U.S.
Removed
These actions directly and indirectly adversely affected the financing markets and resulted in margin calls from our lenders, which we satisfied.
Added
Department of Housing and Urban Development) could adversely affect our ability to originate and service agency mortgage loans; • we are subject to risk sharing requirements on some agency mortgage loans and associated loan losses could materially and adversely affect us; • we are subject to liquidity requirements by the GSE’s and our failure to satisfy these requirements could materially and adversely affect our ability to operate our agency business; • our Agency Business could be adversely impacted by GSE changes in prices they are willing to pay for mortgage loans, changes in loan servicing fees or changes in other GSE arrangements with us; • terminations of servicing engagements or breaches of servicing agreements could have a material adverse effect on us; • changes in the conservatorship of Fannie Mae and Freddie Mac or in any laws and regulations affecting the relationship between Fannie Mae and Freddie Mac and the U.S. federal government, could materially and adversely affect our agency business; and • our agency business will generally be operated through one or more of our taxable REIT subsidiaries and therefore will be subject to the limitations generally imposed on taxable REIT subsidiaries and will be subject to corporate income tax.
Removed
The extent to which pandemics and similar health crises impact our or our borrowers’ operations will depend on future developments which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the crises, treatment developments and government responses to the events.
Added
Termination of our Advisory Agreement without cause would be difficult and costly.
Removed
The inability of our borrowers to meet their loan obligations and/or borrowers filing for bankruptcy protection as a result of these events would reduce our cash flows, which would impact our ability to pay dividends to our stockholders.
Added
We believe that our OP is organized and operated in a manner so as to be treated as a partnership and not an association or a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. As an entity taxed as a partnership, our OP is not subject to U.S. federal income tax on its income.
Added
Instead, each of the partners is allocated its share of our OP’s income. No assurance can be provided, however, that the IRS will not challenge our OP’s status as a partnership for U.S. 19 Table of Contents federal income tax purposes or that a court would not sustain such a challenge.
Added
If the IRS were successful in treating our OP as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT.
Added
Also, the failure of the OP to qualify as a partnership would cause it to become subject to U.S. federal corporate income tax, which would reduce significantly the amount of cash available for distribution to its partners, including us.
Added
There are many factors that can affect the amount and timing of cash distributions to stockholders and our board of directors can decide to reduce or eliminate our cash distributions at any time and without prior notice to our stockholders.
Added
The rapid evolution and increased adoption of artificial intelligence technologies may also heighten our cybersecurity risks by making cyber-attacks more difficult to detect, contain, and mitigate.
Added
Our use of or failure to adopt advancements in information technology, such as artificial intelligence, may hinder or prevent us from achieving strategic objectives or otherwise harm our business. 20 Table of Contents Our use of or inability to safely and effectively adopt and deliver new technological capabilities and enhancements in line with strategic objectives, including artificial intelligence, may put us at a competitive disadvantage, including by failure to achieve efficiencies achieved by our competitors, or by misusing such technologies in ways that result in operational disruptions, reputation damage or legal liability exposure.
Added
Although our Advisor has adopted policies with respect to these risks, including related to the development, deployment and monitoring of artificial intelligence tools, we cannot be certain that such policies will be effective.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFollowing the conclusion of an incident, the Franklin Templeton incident response team will generally reassess the effectiveness of the cybersecurity program and incident response plan, identify potential adjustments as appropriate and report to our senior management and Audit Committee on these matters. 21 Table of Contents Cybersecurity Risks As of December 31, 2024, we are not aware of any instances of material cybersecurity incidents that impacted the Company in the last three years.
Biggest changeFollowing the conclusion of an incident, the Franklin Templeton incident response team will generally reassess the effectiveness of the cybersecurity program and incident response plan, identify potential adjustments as appropriate and report to our senior management and Audit Committee on these matters.
Franklin Templeton maintains a robust cybersecurity defense program, including a dedicated cybersecurity team led by its Chief Security Officer (“CISO”). The CISO, who reports directly to the Franklin Templeton Executive Vice President, Chief Risk and Transformation Officer, has 30 years of experience in the information technology and cybersecurity field and has been at Franklin Templeton for 13 years.
Franklin Templeton maintains a robust cybersecurity defense program, including a dedicated cybersecurity team led by its Chief Security Officer (“CISO”). The CISO, who reports directly to the Franklin Templeton Executive Vice President, Chief Risk and Transformation Officer, has 31 years of experience in the information technology and cybersecurity field and has been at Franklin Templeton for 14 years.
Third-party IT vendors are also subject to additional diligence such as questionnaires and inquiries. As discussed above, to support its preparedness Franklin Templeton has an incident response plan that it periodically updates.
Third-party IT vendors are also subject to additional diligence such as questionnaires and inquiries. 22 Table of Contents As discussed above, to support its preparedness Franklin Templeton has an incident response plan that it periodically updates.
Information Technology and Cybersecurity Risks We have no employees and rely on the Advisor, a wholly-owned subsidiary of Franklin Templeton, to manage our day-to-day operations pursuant to the Advisory Agreement. Therefore, we rely heavily on Franklin Templeton’s information systems and their program for defending against and responding to cybersecurity threats and incidents.
Information Technology and Cybersecurity Risks 21 Table of Contents We rely on the Advisor, a wholly-owned subsidiary of Franklin Templeton, to manage our day-to-day operations pursuant to the Advisory Agreement, including our information technology infrastructure and cybersecurity. Therefore, we rely heavily on Franklin Templeton’s information systems and their program for defending against and responding to cybersecurity threats and incidents.
The Audit Committee oversees, on behalf of the Board, the Company’s privacy, information technology and security and cybersecurity risk exposures, including (i) the potential impact of those exposures on the Company’s business, financial results, operations and reputation, (ii) the programs and steps implemented by management to monitor and mitigate any exposures, (iii) the Company’s information governance and information security policies and programs, and (iv) major legislative and regulatory developments that could materially impact the Company’s privacy, data security and cybersecurity risk exposure. 20 Table of Contents Some members of the Audit Committee have completed certifications in cybersecurity, including one from the National Association of Corporate Directors (NACD) in Cyber-Risk Oversight.
The Audit Committee oversees, on behalf of the Board, the Company’s privacy, information technology and security and cybersecurity risk exposures, including (i) the potential impact of those exposures on the Company’s business, financial results, operations and reputation, (ii) the programs and steps implemented by management to monitor and mitigate any exposures, (iii) the Company’s information governance and information security policies and programs, and (iv) major legislative and regulatory developments that could materially impact the Company’s privacy, data security and cybersecurity risk exposure.
On a quarterly basis, the CISO or its delegee report to the Board or Audit Committee on information technology and cybersecurity matters, including a detailed threat assessment relating to information technology risks.
Some members of the Audit Committee have completed certifications in cybersecurity, including one from the National Association of Corporate Directors (NACD) in Cyber-Risk Oversight. On a quarterly basis, the CISO or its delegee report to the Board or Audit Committee on information technology and cybersecurity matters, including a detailed threat assessment relating to information technology risks.
Added
Cybersecurity Risks As of December 31, 2025, we have not had any known instances of material cybersecurity incidents, including third-party incidents, during any of the prior three fiscal years.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company, through foreclosure, deed-in-lieu of foreclosure, or purchase, possesses certain real estate owned ("REO") as long-lived assets held for investment or as long-lived assets held for sale. See "Note 2.
Biggest changeItem 2. Properties. Our headquarters are located in a leased space at 1 Madison Avenue, New York, New York 10010. The Company, through foreclosure, deed-in-lieu of foreclosure, or purchase, possesses certain real estate owned ("REO") as long-lived assets held for investment or as long-lived assets held for sale. See "Note 2.
Summary of Significant Accounting Policies" to our consolidated financial statements included in this Annual Report on Form 10-K for additional disclosures on the classification of these assets and "Note 5. Real Estate Owned" for a summary of the Company's real estate owned, held for investment assets as of December 31, 2024 .
Summary of Significant Accounting Policies" to our consolidated financial statements included in this Annual Report on Form 10-K for additional disclosures on the classification of these assets and "Note 5. Real Estate Owned" for a summary of the Company's real estate owned, held for investment assets as of December 31, 2025 .
Removed
Item 2. Properties. Our headquarters are located in a leased space at 1 Madison Avenue, New York, New York 10010, which were recently relocated from a different leased space at 1345 Avenue of the Americas, Suite 32A, New York, New York 10105.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. Please refer to “Litigation and Regulatory Matters” in "Note 10 - Commitments and Contingencies" to the consolidated financial statements included in this report. The Company believes that these proceedings, individually or in the aggregate, will not have a material impact on the Company’s financial condition, operating results or cash flows.
Biggest changeItem 3. Legal Proceedings. Please refer to “Litigation and Regulatory Matters” in "Note 16 - Commitments and Contingencies" to the consolidated financial statements included in this report. The Company believes that these proceedings, individually or in the aggregate, will not have a material impact on the Company's financial conditions, operating results or cash flows. Item 4. Mine Safety Disclosures.
Not applicable. 22 Table of Contents PART II
Not applicable. 23 Table of Contents PART II
Removed
Loan Fraud Lawsuit The Company originated a loan in April 2022 secured by a portfolio of 24 properties net leased to Walgreens (the “Collateral Properties”).
Removed
As described in more detail in Part I, Item 3, "Legal Proceedings" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, due to the sponsor’s fraud and default under the loan the Company foreclosed on all of the Collateral Properties in 2022 and 2023.
Removed
The Company has sold the majority of the Collateral Properties, continues to market the remainder for sale, and continues to actively pursue its civil remedies. Note that the collectability, if any, of legal judgments we have achieved to date and that we may achieve in the future is not currently determinable. Item 4. Mine Safety Disclosures.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+3 added−2 removed8 unchanged
Biggest changeThe Company's share repurchase program does not obligate the Company to acquire any particular amount of common stock. In October 2024, the Company's board of directors extended the term of the share repurchase program to December 31, 2025. Repurchases under the share repurchase program may be suspended from time to time at the Company’s discretion without prior notice.
Biggest changeThe Company's share repurchase program does not obligate the Company to acquire any particular amount of common stock. In October 2025, the Company's board of directors extended the term of the share repurchase program to December 31, 2026, and on February 10, 2026 the board of directors increased the amount remaining for repurchases under the program to $50.0 million.
There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below. 23 Table of Contents Period Ending Index 10/19/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 FBRT $ 100.00 $ 89.91 $ 85.93 $ 100.10 $ 103.62 FTSE Mortgage REIT Index $ 100.00 $ 94.70 $ 69.74 $ 80.34 $ 80.51 S&P 1500 $ 100.00 $ 105.52 $ 85.11 $ 108.79 $ 134.83 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The Company’s board of directors has authorized a $65 million share repurchase program that permits share repurchases at prices below the most recently reported book value per share as determined in accordance with GAAP.
There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below. 24 Table of Contents Period Ending Index 10/19/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 FBRT $ 100.00 $ 89.91 $ 85.93 $ 100.10 $ 103.62 $ 94.11 FTSE Mortgage REIT Index $ 100.00 $ 94.70 $ 69.74 $ 80.34 $ 80.51 $ 93.52 S&P 1500 $ 100.00 $ 105.52 $ 85.11 $ 108.79 $ 134.83 $ 157.75 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The Company’s board of directors has authorized a $65 million share repurchase program that permits share repurchases at prices below the most recently reported book value per share as determined in accordance with GAAP.
The following graph is a comparison of the cumulative total stockholder return on shares of our common stock, the Standard & Poor's 1500 (the "S&P 1500"), and the FTSE NAREIT Mortgage REITS Index (the "FTSE Mortgage REIT Index"), a published industry index, from October 19, 2021 to December 31, 2024.
The following graph is a comparison of the cumulative total stockholder return on shares of our common stock, the Standard & Poor's 1500 (the "S&P 1500"), and the FTSE NAREIT Mortgage REITS Index (the "FTSE Mortgage REIT Index"), a published industry index, from October 19, 2021 to December 31, 2025.
Holders As of February 19, 2025, we had 2,719 registered holders of our common stock. The 2,719 holders of record include Cede & Co., which holds shares as nominee for The Depository Trust Company, which itself holds shares on behalf of the beneficial owners of our common stock. Such information was obtained through our registrar and transfer agent.
Holders As of February 19, 2026, we had 2,591 registered holders of our common stock. The 2,591 holders of record include Cede & Co., which holds shares as nominee for The Depository Trust Company, which itself holds shares on behalf of the beneficial owners of our common stock. Such information was obtained through our registrar and transfer agent.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the New York Stock Exchange ("NYSE"), under the symbol "FBRT." On February 19, 2025, the last sales price for our common stock on the NYSE was $13.21 per share.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the New York Stock Exchange ("NYSE"), under the symbol "FBRT." On February 19, 2026, the last sales price for our common stock on the NYSE was $8.88 per share.
The graph assumes that $100 was invested on October 19, 2021 in our common stock, the S&P 1500 and the FTSE Mortgage REIT Index and that all dividends were reinvested without the payment of any commissions.
The FTSE Mortgage REIT Index is comprised of companies that are similar to us in size with large market capitalizations. The graph assumes that $100 was invested on October 19, 2021 in our common stock, the S&P 1500 and the FTSE Mortgage REIT Index and that all dividends were reinvested without the payment of any commissions.
The information required by Item 5 with respect to securities authorized for issuance under equity compensation plans is incorporated herein by reference to Part III, Item 12 of this Form 10-K. Item 6. [Reserved] 24 Table of Contents
As of, February 19, 2026, $45.2 million remains available under the Company's share repurchase program. The information required by Item 5 with respect to securities authorized for issuance under equity compensation plans is incorporated herein by reference to Part III, Item 12 of this Form 10-K. Item 6. [Reserved] 26 Table of Contents
Removed
The FTSE Mortgage REIT Index is comprised of companies that are similar to us in size with large market capitalizations and is historically comparable to the Bloomberg Mortgage Index.
Added
Repurchases under the share repurchase program may be suspended from time to time at the Company’s discretion without prior notice. 25 Table of Contents The following table sets forth purchases of the Company's common stock under the share repurchase program for the three months ended December 31, 2025 (in thousands, except share and per share amounts): Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs (2) Approximate dollar value of shares that may yet be purchased under the plans or programs (2) October 1, 2025 - October 31, 2025 636,738 10.74 636,738 24,211 November 1, 2025 - November 30, 2025 414,335 10.02 414,335 20,059 December 1, 2025 - December 31, 2025 320,000 10.55 320,000 16,683 Total 1,371,073 $ 10.48 1,371,073 $ 16,683 _______________________ (1) The average price paid per share represents the average purchase price per share, inclusive of any broker’s fees or commissions.
Removed
There were no purchases of the Company's common stock under the share repurchase program for the three months ended December 31, 2024 and subsequent to December 31, 2024, respectively. As of February 19, 2025, $31.1 million remains available under the Company’s share repurchase program.
Added
(2) All of the purchases listed in the table above were made in the open market under the Company's share purchase program announced on July 26, 2021, including under a Rule 10b5-1 plan adopted by the Company.
Added
Subsequent to December 31, 2025 and through February 19, 2026, the Company repurchased 538,218 shares of common stock at a weighted average cost of $8.85 per share. The Board of Directors reauthorized the Company's share repurchase program, providing $50.0 million available for future share repurchases through December 31, 2026.

Item 7. Management's Discussion & Analysis

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

126 edited+63 added−19 removed63 unchanged
Biggest changeAs of December 31, 2024 and 2023, our commercial mortgage loans, held for investment, excluding commercial mortgage loans on non-performing status, had a weighted average coupon of 8.0% and 9.2%, respectively, and a weighted average remaining life of 1.1 years and 0.9 years, respectively. 36 Table of Contents The following charts summarize our commercial mortgage loans, held for investment, by coupon rate type, collateral type geographical region and state as of December 31, 2024 and 2023: 37 Table of Contents An investments region classification is defined according to the below map based on the location of investments secured property. 38 Table of Contents 39 Table of Contents The following charts show the par value by contractual maturity year for the investments in our portfolio as of December 31, 2024 and 2023: 40 Table of Contents The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of December 31, 2024 (dollars in thousands): Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Senior Debt 1 2 Hospitality Louisiana 21,477 21,477 6/28/2018 9/9/2025 1M SOFR Term + 4.25% 8.58% 68.8% Senior Debt 2 2 Hospitality Michigan 12,816 12,816 9/17/2019 10/9/2025 1M SOFR Term + 4.41% 8.74% 56.4% Senior Debt 3 2 Hospitality New York 4,805 4,805 7/9/2019 7/9/2025 1M SOFR Term + 5.25% 9.58% 47.7% Senior Debt 4 2 Office Arizona 13,766 13,766 11/22/2019 6/9/2025 1M SOFR Term + 4.00% 8.33% 70.9% Senior Debt 5 5 Office Georgia 23,444 22,837 12/17/2019 1/9/2026 1M SOFR Term + 2.25% 6.58% 64.9% Senior Debt 6 2 Manufactured Housing Arkansas 1,270 1,270 4/22/2020 5/9/2025 5.50% 5.50% 62.8% Senior Debt 7 3 Office Texas 16,703 16,703 10/6/2020 10/9/2025 Adj. 1M SOFR Term + 4.50% 8.95% 47.9% Senior Debt 8 2 Office Massachusetts 60,917 60,861 10/8/2020 10/9/2025 5.15% 5.15% 52.5% Senior Debt 9 3 Office Michigan 25,559 25,559 10/14/2020 4/9/2026 1M SOFR Term + 2.81% 8.13% 66.0% Senior Debt 10 2 Multifamily Texas 11,412 11,412 1/22/2021 2/9/2026 Adj. 1M SOFR Term + 4.55% 9.00% 73.0% Senior Debt 11 5 Office Colorado 44,913 43,650 3/1/2021 3/9/2026 5.50% 5.50% 53.9% Senior Debt 12 2 Multifamily Texas 34,190 34,190 3/5/2021 3/9/2025 1M SOFR Term + 4.10% 8.43% 78.2% Senior Debt 13 2 Multifamily Texas 54,650 54,650 3/16/2021 5/9/2025 1M SOFR Term + 4.00% 8.33% 71.6% Senior Debt 14 2 Multifamily Texas 14,436 14,436 3/15/2021 1/9/2025 Adj. 1M SOFR Term + 3.39% 7.84% 70.6% Senior Debt 15 3 Multifamily Texas 19,519 19,519 3/25/2021 1/9/2025 Adj. 1M SOFR Term + 3.60% 8.05% 70.8% Senior Debt 16 2 Multifamily Texas 43,246 43,241 4/1/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 7.40% 71.6% Senior Debt 17 2 Hospitality Louisiana 25,700 25,700 4/15/2021 5/9/2026 Adj. 1M SOFR Term + 5.60% 10.05% 61.0% Senior Debt 18 2 Mixed Use Washington 32,500 32,500 6/30/2021 1/9/2026 Adj. 1M SOFR Term + 3.70% 8.15% 69.7% Senior Debt 19 3 Multifamily Texas 74,858 74,843 3/31/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 7.40% 72.6% Senior Debt 20 3 Multifamily Texas 20,450 20,450 4/22/2021 5/9/2026 Adj. 1M SOFR Term + 3.35% 7.80% 67.7% Senior Debt 21 2 Multifamily Texas 35,466 35,462 4/1/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 7.40% 71.7% Senior Debt 22 3 Multifamily North Carolina 35,116 35,095 7/22/2021 3/9/2027 Adj. 1M SOFR Term + 5.00% 9.45% —% Senior Debt 23 2 Multifamily Texas 16,222 16,222 10/6/2021 10/9/2026 Adj. 1M SOFR Term + 3.75% 8.20% 76.9% Senior Debt 24 3 Multifamily Texas 34,647 34,647 9/20/2021 1/9/2025 Adj. 1M SOFR Term + 3.64% 8.09% 66.0% Senior Debt 25 2 Multifamily South Carolina 67,500 67,500 9/20/2021 10/9/2026 Adj. 1M SOFR Term + 3.25% 7.70% 77.1% Senior Debt 26 2 Multifamily Georgia 10,087 10,087 9/22/2021 10/9/2026 Adj. 1M SOFR Term + 3.75% 8.20% 70.0% Senior Debt 27 2 Multifamily Texas 26,584 26,584 9/30/2021 10/9/2025 Adj. 1M SOFR Term + 3.20% 7.65% 77.3% Senior Debt 28 2 Hospitality Texas 17,122 17,122 9/30/2021 10/9/2026 Adj. 1M SOFR Term + 5.25% 9.70% 61.0% Senior Debt 29 2 Multifamily Texas 54,832 54,832 11/23/2021 12/9/2025 Adj. 1M SOFR Term + 3.10% 7.55% 67.2% Senior Debt 30 3 Multifamily Arizona 37,355 37,355 11/16/2021 12/9/2026 Adj. 1M SOFR Term + 2.90% 7.35% 72.0% Senior Debt 31 3 Multifamily Texas 67,171 67,171 10/29/2021 11/9/2026 Adj. 1M SOFR Term + 2.85% 7.30% 70.6% Senior Debt 32 2 Multifamily South Carolina 61,100 61,100 11/10/2021 11/9/2026 Adj. 1M SOFR Term + 3.35% 7.80% 78.0% Senior Debt 33 2 Multifamily Texas 47,394 47,334 11/9/2021 11/9/2026 Adj. 1M SOFR Term + 2.75% 7.20% 68.1% Senior Debt 34 2 Multifamily Texas 58,680 58,680 12/10/2021 1/9/2027 Adj. 1M SOFR Term + 3.45% 7.90% 74.8% Senior Debt 35 3 Multifamily Kentucky 14,933 14,933 11/19/2021 1/9/2027 Adj. 1M SOFR Term + 3.20% 7.65% 62.4% Senior Debt 36 3 Multifamily Texas 38,151 38,151 11/22/2021 1/9/2027 Adj. 1M SOFR Term + 3.00% 7.45% 73.3% Senior Debt 37 3 Multifamily Texas 69,415 69,415 11/30/2021 1/9/2027 Adj. 1M SOFR Term + 2.88% 7.33% 74.8% Senior Debt 38 5 Multifamily Texas 66,742 66,742 11/30/2021 1/9/2027 Adj. 1M SOFR Term + 2.88% 7.33% 75.5% Senior Debt 39 2 Multifamily Texas 18,500 18,500 12/30/2021 1/9/2027 1M SOFR Term + 3.50% 7.83% 71.7% Senior Debt 40 3 Multifamily Pennsylvania 22,240 22,240 12/16/2021 1/9/2027 1M SOFR Term + 2.96% 7.29% 79.4% Senior Debt 41 2 Multifamily Texas 31,428 31,428 12/16/2021 1/9/2027 1M SOFR Term + 3.20% 7.53% 74.2% Senior Debt 42 2 Multifamily Florida 78,584 78,414 12/21/2021 1/9/2027 1M SOFR Term + 3.45% 7.78% 78.8% Senior Debt 43 3 Multifamily North Carolina 81,247 81,245 12/15/2021 8/9/2026 1M SOFR Term + 2.00% 6.33% 76.1% Senior Debt 44 2 Multifamily North Carolina 24,000 24,000 12/17/2021 1/9/2027 1M SOFR Term + 3.10% 7.43% 72.7% Senior Debt 45 3 Multifamily Texas 37,605 37,605 5/12/2022 2/9/2027 1M SOFR Term + 3.55% 7.88% 66.2% Senior Debt 46 2 Multifamily Georgia 23,855 23,855 1/28/2022 2/9/2027 1M SOFR Term + 2.95% 7.28% 65.6% Senior Debt 47 2 Multifamily North Carolina 10,978 10,978 1/14/2022 2/9/2027 1M SOFR Term + 3.30% 7.63% 75.7% Senior Debt 48 3 Hospitality North Carolina 10,800 10,798 1/19/2022 2/9/2027 1M SOFR Term + 5.30% 9.63% 68.2% Senior Debt 49 2 Multifamily Florida 82,000 82,000 2/10/2022 2/9/2027 1M SOFR Term + 3.20% 7.53% 74.5% Senior Debt 50 2 Industrial Arizona 55,000 55,000 3/15/2022 3/9/2027 1M SOFR Term + 3.50% 7.83% 70.1% Senior Debt 51 2 Multifamily Texas 39,571 39,571 3/14/2022 3/9/2027 1M SOFR Term + 3.10% 7.43% 74.1% Senior Debt 52 2 Multifamily Arizona 34,859 34,859 3/2/2022 3/9/2027 1M SOFR Term + 2.95% 7.28% 63.1% 41 Table of Contents Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Senior Debt 53 2 Multifamily North Carolina 85,500 85,500 2/24/2022 3/9/2027 1M SOFR Term + 3.15% 7.48% 69.6% Senior Debt 54 2 Multifamily North Carolina 31,900 31,900 3/29/2022 4/9/2027 1M SOFR Term + 3.30% 7.63% 76.9% Senior Debt 55 2 Hospitality Colorado 41,000 40,913 5/20/2022 6/9/2027 1M SOFR Term + 7.05% 11.38% —% Senior Debt 56 2 Multifamily Texas 49,088 48,895 7/20/2022 4/9/2027 1M SOFR Term + 6.75% 11.08% —% Senior Debt 57 2 Hospitality Georgia 50,926 50,926 3/30/2022 4/9/2027 1M SOFR Term + 4.90% 9.23% 61.1% Senior Debt 58 2 Hospitality New York 15,750 15,718 11/8/2022 11/9/2027 1M SOFR Term + 5.34% 9.67% 57.7% Senior Debt 59 3 Multifamily Nevada 35,950 35,950 6/3/2022 7/9/2025 1M SOFR Term + 7.05% 11.38% 62.4% Senior Debt 60 4 Multifamily Virginia 56,616 56,579 4/29/2022 5/9/2027 1M SOFR Term + 3.95% 8.28% 73.2% Senior Debt 61 3 Multifamily Texas 30,187 30,187 10/21/2022 11/9/2026 7.00% 7.00% 70.9% Senior Debt 62 3 Multifamily North Carolina 57,159 57,159 8/23/2022 7/9/2028 1M SOFR Term + 6.70% 11.03% 46.5% Senior Debt 63 2 Multifamily Texas 12,841 12,841 5/2/2022 5/9/2027 1M SOFR Term + 3.55% 7.88% 67.7% Senior Debt 64 2 Industrial Florida 18,724 18,724 9/13/2022 9/9/2027 1M SOFR Term + 4.90% 9.23% 64.6% Senior Debt 65 3 Multifamily Texas 28,979 28,979 5/26/2022 6/9/2027 1M SOFR Term + 3.65% 7.98% 71.0% Senior Debt 66 3 Multifamily Texas 16,967 16,967 5/26/2022 6/9/2028 1M SOFR Term + 3.65% 7.98% 73.9% Senior Debt 67 3 Multifamily North Carolina 44,583 44,583 6/1/2022 6/9/2027 1M SOFR Term + 2.75% 7.08% 75.9% Senior Debt 68 2 Multifamily Georgia 66,750 66,750 6/14/2022 6/9/2027 1M SOFR Term + 3.45% 7.78% 71.6% Senior Debt 69 2 Hospitality District of Columbia 39,525 39,454 8/2/2022 8/9/2027 1M SOFR Term + 5.00% 9.33% 71.2% Senior Debt 70 2 Multifamily Pennsylvania 27,865 27,683 2/17/2023 9/9/2026 1M SOFR Term + 6.31% 10.64% —% Senior Debt 71 2 Hospitality Alabama 18,219 18,219 9/20/2022 10/9/2027 1M SOFR Term + 5.75% 10.08% 62.1% Senior Debt 72 2 Hospitality Texas 31,600 31,600 1/31/2023 11/9/2027 1M SOFR Term + 7.50% 11.83% 6.2% Senior Debt 73 2 Multifamily North Carolina 49,990 49,989 12/29/2022 1/9/2028 1M SOFR Term + 4.20% 8.53% 70.1% Senior Debt 74 2 Multifamily South Carolina 50,800 50,800 12/2/2022 12/9/2027 1M SOFR Term + 3.75% 8.08% 64.6% Senior Debt 75 2 Multifamily South Carolina 14,635 14,633 12/16/2022 1/9/2027 1M SOFR Term + 4.25% 8.58% 68.1% Senior Debt 76 3 Multifamily Arizona 55,500 55,468 4/10/2023 4/9/2026 1M SOFR Term + 3.85% 8.18% 44.7% Senior Debt 77 2 Hospitality Various 111,000 110,758 2/9/2023 2/9/2028 1M SOFR Term + 4.90% 9.23% 53.6% Senior Debt 78 2 Multifamily Texas 14,750 14,718 6/28/2024 7/9/2029 1M SOFR Term + 2.80% 7.13% 71.5% Senior Debt 79 3 Multifamily District of Columbia 21,700 21,670 6/30/2023 7/9/2027 1M SOFR Term + 3.95% 8.28% 29.4% Senior Debt 80 2 Manufactured Housing Florida 23,905 23,845 7/28/2023 8/9/2028 1M SOFR Term + 4.25% 8.58% 43.2% Senior Debt 81 2 Multifamily New York 19,793 19,863 6/28/2023 7/9/2028 4.75% 4.75% 85.7% Senior Debt 82 2 Multifamily Texas 78,996 78,866 8/1/2023 8/9/2028 1M SOFR Term + 3.20% 7.53% 58.7% Senior Debt 83 2 Hospitality Florida 24,384 24,294 8/10/2023 8/9/2028 1M SOFR Term + 5.45% 9.78% 72.8% Senior Debt 84 2 Hospitality Georgia 12,420 12,355 8/17/2023 9/9/2028 1M SOFR Term + 4.85% 9.18% 53.5% Senior Debt 85 2 Industrial South Carolina 13,562 13,265 3/21/2024 10/9/2027 1M SOFR Term + 4.75% 9.50% —% Senior Debt 86 2 Multifamily Texas 38,750 38,664 10/18/2023 11/9/2026 1M SOFR Term + 4.50% 9.00% 62.4% Senior Debt 87 2 Hospitality Florida 31,300 31,149 10/17/2023 11/9/2028 1M SOFR Term + 4.25% 8.59% 48.9% Senior Debt 88 2 Multifamily Texas 42,750 42,656 10/17/2023 11/9/2026 1M SOFR Term + 3.85% 8.18% 61.4% Senior Debt 89 2 Multifamily Texas 19,429 19,327 10/12/2023 10/9/2028 1M SOFR Term + 3.20% 7.53% 55.1% Senior Debt 90 2 Multifamily Texas 22,500 22,500 12/6/2023 12/9/2026 1M SOFR Term + 3.75% 8.50% 63.6% Senior Debt 91 2 Hospitality Tennessee 41,194 41,045 11/14/2023 12/9/2028 1M SOFR Term + 3.65% 7.98% 50.0% Senior Debt 92 2 Multifamily Texas 36,380 36,339 2/14/2024 2/9/2025 9.00% 9.00% 84.4% Senior Debt 93 2 Hospitality Colorado 28,512 28,392 2/5/2024 2/9/2029 1M SOFR Term + 4.50% 8.83% 41.6% Senior Debt 94 2 Hospitality Nevada 25,750 25,668 12/15/2023 1/9/2028 1M SOFR Term + 3.95% 8.28% 42.4% Senior Debt 95 2 Industrial California 11,105 10,716 3/19/2024 10/6/2026 11.99% 11.99% 8.6% Senior Debt 96 (8) 2 Multifamily Florida — — 2/12/2024 8/9/2028 1M SOFR Term + 5.50% —% —% Senior Debt 97 2 Multifamily Florida 50,750 50,603 2/9/2024 8/9/2026 1M SOFR Term + 3.75% 8.08% 56.7% Senior Debt 98 3 Multifamily Texas 79,515 79,210 2/16/2024 3/9/2029 1M SOFR Term + 3.65% 7.98% 53.3% Senior Debt 99 2 Industrial Various 111,953 111,542 4/5/2024 4/9/2028 1M SOFR Term + 3.15% 7.48% 63.8% Senior Debt 100 2 Multifamily Florida 67,000 66,796 2/29/2024 3/9/2029 1M SOFR Term + 3.25% 7.58% 58.7% Senior Debt 101 2 Industrial North Carolina 75,000 74,858 3/7/2024 3/9/2029 1M SOFR Term + 2.70% 7.03% 58.6% Senior Debt 102 2 Multifamily Texas 20,807 20,659 3/7/2024 3/9/2029 1M SOFR Term + 3.75% 8.08% 57.2% Senior Debt 103 2 Multifamily Texas 40,000 39,863 4/24/2024 5/9/2028 1M SOFR Term + 2.95% 7.28% 70.4% Senior Debt 104 2 Multifamily Ohio 44,361 44,173 4/29/2024 5/9/2029 1M SOFR Term + 2.90% 7.23% 72.2% Senior Debt 105 2 Multifamily Texas 17,524 17,406 4/30/2024 5/9/2029 1M SOFR Term + 3.75% 8.08% 55.8% Senior Debt 106 2 Multifamily California 40,000 39,855 5/24/2024 6/9/2028 1M SOFR Term + 2.77% 7.10% 60.9% Senior Debt 107 2 Multifamily Connecticut 116,500 116,113 5/10/2024 5/9/2029 1M SOFR Term + 2.50% 6.83% 50.7% 42 Table of Contents Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Senior Debt 108 2 Hospitality Florida 49,950 49,745 5/9/2024 6/9/2029 1M SOFR Term + 4.50% 8.83% 62.8% Senior Debt 109 2 Hospitality Various 23,084 23,148 6/6/2024 6/9/2029 1M SOFR Term + 4.43% 8.76% 44.6% Senior Debt 110 2 Multifamily Florida 8,430 8,378 6/3/2024 6/9/2029 1M SOFR Term + 2.95% 7.28% 56.0% Senior Debt 111 2 Multifamily Texas 22,219 22,092 6/7/2024 6/9/2029 1M SOFR Term + 2.85% 7.18% 64.5% Senior Debt 112 2 Multifamily Texas 21,874 21,770 5/30/2024 6/9/2029 1M SOFR Term + 3.25% 7.58% 68.8% Senior Debt 113 2 Multifamily Indiana 17,781 17,713 6/28/2024 7/9/2028 1M SOFR Term + 3.05% 7.38% 68.2% Senior Debt 114 2 Retail Wisconsin 1,986 1,992 6/20/2024 7/9/2026 5.50% 5.50% 73.0% Senior Debt 115 2 Multifamily Texas 7,500 7,481 6/25/2024 7/9/2027 1M SOFR Term + 3.80% 8.13% 80.0% Senior Debt 116 2 Hospitality Oregon 7,050 7,001 6/28/2024 7/9/2028 1M SOFR Term + 4.50% 8.83% 53.1% Senior Debt 117 2 Multifamily New Jersey 3,263 2,853 7/1/2024 7/9/2029 1M SOFR Term + 5.50% 9.83% 10.3% Senior Debt 118 2 Retail Various 43,627 43,747 7/1/2024 8/9/2025 6.00% 6.00% 67.3% Senior Debt 119 2 Multifamily North Carolina 24,474 24,321 6/28/2024 7/9/2029 1M SOFR Term + 3.75% 8.08% 69.3% Senior Debt 120 2 Industrial California 13,240 13,176 7/11/2024 7/9/2029 1M SOFR Term + 4.25% 8.58% 61.9% Senior Debt 121 2 Hospitality Texas 17,000 17,067 7/25/2024 8/9/2027 8.50% 8.50% 90.0% Senior Debt 122 2 Multifamily North Carolina 16,640 16,563 9/16/2024 10/9/2027 1M SOFR Term + 2.75% 7.08% 78.1% Senior Debt 123 2 Multifamily Tennessee 21,420 21,326 9/18/2024 10/9/2029 1M SOFR Term + 3.10% 7.43% 59.4% Senior Debt 124 2 Multifamily Florida 5,780 5,629 7/30/2024 8/9/2027 1M SOFR Term + 8.30% 12.63% 31.3% Senior Debt 125 2 Multifamily Florida 38,570 38,471 9/6/2024 9/9/2028 1M SOFR Term + 2.75% 7.08% 71.0% Senior Debt 126 2 Multifamily Florida 70,787 70,601 9/6/2024 9/9/2028 1M SOFR Term + 2.75% 7.08% 72.7% Senior Debt 127 2 Multifamily Florida 21,797 21,728 9/6/2024 9/9/2028 1M SOFR Term + 2.75% 7.08% 71.3% Senior Debt 128 2 Multifamily New York 11,089 11,017 8/7/2024 8/9/2029 1M SOFR Term + 5.25% 9.58% 53.6% Senior Debt 129 2 Hospitality Texas 14,130 14,072 8/9/2024 8/9/2028 1M SOFR Term + 4.00% 9.00% 63.7% Senior Debt 130 2 Industrial Texas 25,991 25,809 10/9/2024 10/9/2029 1M SOFR Term + 3.75% 8.08% 71.7% Senior Debt 131 2 Multifamily New York 21,795 21,690 11/22/2024 12/9/2027 1M SOFR Term + 3.75% 8.50% 29.2% Senior Debt 132 2 Multifamily Texas 18,523 18,433 11/12/2024 11/9/2029 1M SOFR Term + 2.95% 7.28% 66.9% Senior Debt 133 2 Hospitality Florida 13,621 13,488 11/6/2024 11/9/2029 1M SOFR Term + 4.75% 9.08% 75.8% Senior Debt 134 2 Multifamily New York 34,118 33,942 11/19/2024 12/9/2029 1M SOFR Term + 2.95% 7.28% 80.8% Senior Debt 135 2 Multifamily Florida 29,808 29,663 12/5/2024 12/9/2027 1M SOFR Term + 3.50% 7.83% 67.7% Senior Debt 136 2 Multifamily Georgia 53,973 53,723 11/1/2024 11/9/2029 1M SOFR Term + 2.95% 7.28% 71.1% Senior Debt 137 2 Multifamily Georgia 28,685 28,475 11/8/2024 11/9/2029 1M SOFR Term + 2.75% 7.08% 63.5% Senior Debt 138 2 Multifamily North Carolina 18,100 18,024 11/25/2024 12/9/2028 5.50% 5.50% 70.6% Senior Debt 139 2 Mixed Use New York 58,685 58,412 12/4/2024 12/9/2025 1M SOFR Term + 5.35% 9.68% 53.3% Senior Debt 140 2 Industrial Tennessee 13,441 13,368 12/6/2024 12/9/2027 1M SOFR Term + 3.50% 7.83% 59.7% Senior Debt 141 2 Multifamily South Carolina 24,359 24,239 12/9/2024 12/9/2028 1M SOFR Term + 3.25% 7.58% 76.3% Senior Debt 142 2 Multifamily North Carolina 31,162 29,250 12/20/2024 1/9/2028 4.25% 4.25% 87.3% Senior Debt 143 2 Hospitality Texas 14,409 14,337 12/27/2024 1/9/2028 1M SOFR Term + 3.25% 7.58% 40.3% Senior Debt 144 2 Multifamily North Carolina 17,263 17,144 12/30/2024 1/9/2030 1M SOFR Term + 3.25% 7.58% 69.5% Senior Debt 145 3 Hospitality Illinois 16,378 16,378 12/4/2017 5/6/2026 5.99% 5.99% 52.9% Mezzanine Loan 1 2 Hospitality New York 1,350 1,348 11/8/2022 11/9/2027 1M SOFR Term + 9.25% 13.58% 64.6% Mezzanine Loan 2 2 Hospitality Texas 7,900 7,900 1/31/2023 11/9/2027 1M SOFR Term + 10.00% 14.33% 6.2% Mezzanine Loan 3 3 Multifamily District of Columbia 11,700 11,684 6/30/2023 7/9/2027 1M SOFR Term + 3.95% 8.28% 45.2% Mezzanine Loan 4 2 Multifamily California 4,000 3,986 5/24/2024 6/9/2028 1M SOFR Term + 3.67% 8.00% 60.9% Mezzanine Loan 5 (8) 2 Multifamily New Jersey — — 7/1/2024 7/9/2029 1M SOFR Term + 11.90% 16.23% 10.3% Mezzanine Loan 6 2 Industrial California 2,180 2,171 7/11/2024 7/9/2029 15.00% 15.00% 72.1% Mezzanine Loan 7 2 Multifamily New York 1,264 1,256 8/7/2024 8/9/2029 1M SOFR Term + 12.75% 17.08% 59.6% Mezzanine Loan 8 2 Multifamily New York 2,055 2,044 11/19/2024 12/9/2029 1M SOFR Term + 8.23% 12.56% 85.6% Mezzanine Loan 9 2 Mixed Use New York 7,527 7,491 12/4/2024 12/9/2025 16.00% 16.00% 60.2% Mezzanine Loan 10 2 Hospitality Texas 1,417 1,409 12/27/2024 1/9/2028 1M SOFR Term + 10.51% 14.84% 44.3% Total/Weighted Average $4,999,854 $4,986,750 7.97% 62.9% _______________________ (1) For a discussion of risk ratings, see Note 3 - Commercial Mortgage Loans in our Consolidated Financial Statements included in this Form 10-K.
Biggest changeAs of December 31, 2025, the Company owned MSRs of $212.2 million, which consisted of 1,042 loans with an unpaid principal balance of $21.6 billion. 42 Table of Contents The following charts summarize our commercial mortgage loans, held for investment, by coupon rate type, collateral type geographical region and state as of December 31, 2025 and 2024: 43 Table of Contents 44 Table of Contents An investments region classification is defined according to the below map based on the location of investments secured property. 45 Table of Contents 46 Table of Contents The following charts show the par value by contractual maturity year for the commercial mortgage loans, held for investment in our portfolio as of December 31, 2025 and 2024: 47 Table of Contents The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of December 31, 2025 (dollars in thousands): Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Senior Debt 1 5 Office Georgia 22,944 21,095 12/17/2019 1/9/2026 1M SOFR Term + 2.25% 5.94% 64.9% Senior Debt 2 3 Office Texas 14,756 14,756 10/6/2020 10/9/2027 Adj. 1M SOFR Term + 4.50% 8.30% 47.9% Senior Debt 3 2 Office Michigan 20,559 20,559 10/14/2020 1/9/2027 7.13% 7.13% 66.0% Senior Debt 4 4 Multifamily Texas 33,871 33,871 3/5/2021 3/9/2026 1M SOFR Term + 4.10% 7.79% 78.2% Senior Debt 5 2 Mixed Use Washington 32,500 32,500 6/30/2021 1/9/2026 Adj. 1M SOFR Term + 3.70% 7.50% 69.7% Senior Debt 6 4 Multifamily Texas 73,922 73,919 3/31/2021 4/9/2026 1M SOFR Term + 2.20% 5.89% 72.6% Senior Debt 7 3 Multifamily Texas 20,100 20,100 4/22/2021 5/9/2026 Adj. 1M SOFR Term + 3.35% 7.15% 67.7% Senior Debt 8 3 Multifamily Texas 35,466 35,465 4/1/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 6.75% 71.7% Senior Debt 9 3 Multifamily Texas 33,299 33,299 9/20/2021 4/9/2026 Adj. 1M SOFR Term + 3.64% 7.44% 66.0% Senior Debt 10 3 Multifamily Georgia 9,388 9,388 9/22/2021 10/9/2026 Adj. 1M SOFR Term + 3.75% 7.55% 70.0% Senior Debt 11 2 Multifamily Texas 25,926 25,926 9/30/2021 10/9/2026 Adj. 1M SOFR Term + 3.20% 7.00% 77.3% Senior Debt 12 2 Multifamily Texas 55,313 55,313 11/23/2021 8/9/2026 Adj. 1M SOFR Term + 3.10% 6.90% 67.2% Senior Debt 13 5 Multifamily Arizona 36,789 36,789 11/16/2021 12/9/2026 Adj. 1M SOFR Term + 2.00% 5.80% 72.0% Senior Debt 14 2 Multifamily Texas 55,680 55,680 12/10/2021 1/9/2027 Adj. 1M SOFR Term + 3.00% 6.80% 74.8% Senior Debt 15 2 Multifamily Kentucky 13,639 13,639 11/19/2021 6/9/2026 Adj. 1M SOFR Term + 2.75% 6.55% 62.4% Senior Debt 16 5 Multifamily Pennsylvania 21,961 21,715 12/16/2021 1/9/2027 1M SOFR Term + 2.96% 6.65% 79.4% Senior Debt 17 2 Multifamily Texas 30,256 30,256 12/16/2021 1/9/2027 1M SOFR Term + 3.20% 6.89% 74.2% Senior Debt 18 2 Multifamily Florida 77,250 77,163 12/21/2021 1/9/2027 1M SOFR Term + 3.45% 7.14% 78.8% Senior Debt 19 3 Multifamily North Carolina 80,247 80,247 12/15/2021 3/9/2027 4.25% 4.25% 76.1% Senior Debt 20 2 Multifamily North Carolina 23,250 23,250 12/17/2021 1/9/2027 1M SOFR Term + 3.10% 6.79% 72.7% Senior Debt 21 3 Hospitality North Carolina 10,116 10,116 1/19/2022 2/9/2027 1M SOFR Term + 5.30% 8.99% 68.2% Senior Debt 22 3 Multifamily Florida 78,500 78,500 2/10/2022 2/9/2027 1M SOFR Term + 3.20% 6.89% 74.5% Senior Debt 23 2 Industrial Arizona 54,283 54,283 3/15/2022 3/9/2027 1M SOFR Term + 3.50% 7.19% 70.1% Senior Debt 24 2 Multifamily Texas 37,071 37,071 3/14/2022 3/9/2028 7.00% 7.00% 74.1% Senior Debt 25 4 Multifamily Arizona 34,859 34,859 3/2/2022 3/9/2027 1M SOFR Term + 2.95% 6.64% 63.1% Senior Debt 26 2 Multifamily North Carolina 31,327 31,327 2/24/2022 3/9/2026 1M SOFR Term + 3.15% 6.84% 69.6% Senior Debt 27 2 Multifamily North Carolina 31,300 31,300 3/29/2022 4/9/2027 1M SOFR Term + 3.30% 6.99% 76.9% Senior Debt 28 2 Hospitality Georgia 49,592 49,592 3/30/2022 4/9/2027 1M SOFR Term + 4.90% 8.59% 61.1% Senior Debt 29 3 Multifamily Nevada 35,880 35,880 6/3/2022 11/9/2027 1M SOFR Term + 3.15% 6.84% 62.4% Senior Debt 30 4 Multifamily Virginia 56,543 56,543 4/29/2022 5/9/2026 1M SOFR Term + 3.95% 7.64% 73.2% Senior Debt 31 4 Multifamily Texas 30,648 30,648 10/21/2022 11/9/2026 6.50% 6.50% 70.9% Senior Debt 32 3 Multifamily North Carolina 57,159 57,159 8/23/2022 1/9/2026 1M SOFR Term + 6.70% 10.39% 46.5% Senior Debt 33 2 Industrial Florida 18,724 18,724 9/13/2022 9/9/2027 1M SOFR Term + 4.90% 8.59% 64.6% Senior Debt 34 4 Multifamily Texas 16,839 16,839 5/26/2022 6/9/2027 1M SOFR Term + 3.65% 7.34% 73.9% Senior Debt 35 5 Multifamily North Carolina 44,483 44,483 6/1/2022 6/9/2027 1M SOFR Term + 2.75% 6.44% 75.9% Senior Debt 36 2 Multifamily Georgia 64,400 64,400 6/14/2022 6/9/2027 1M SOFR Term + 3.45% 7.14% 71.6% Senior Debt 37 3 Hospitality District of Columbia 38,434 38,434 8/2/2022 8/9/2027 1M SOFR Term + 5.00% 8.69% 71.2% Senior Debt 38 2 Multifamily North Carolina 50,551 50,551 12/29/2022 1/9/2029 1M SOFR Term + 4.20% 7.89% 70.1% Senior Debt 39 2 Multifamily South Carolina 50,300 50,300 12/2/2022 12/9/2028 1M SOFR Term + 3.75% 7.44% 64.6% Senior Debt 40 2 Hospitality Various 94,047 93,928 2/9/2023 5/9/2028 1M SOFR Term + 4.00% 8.00% 53.6% Senior Debt 41 2 Multifamily Texas 14,750 14,730 6/28/2024 7/9/2029 1M SOFR Term + 2.80% 6.49% 71.5% Senior Debt 42 3 Multifamily District of Columbia 21,038 21,038 6/30/2023 7/9/2026 1M SOFR Term + 4.45% 8.14% 29.4% Senior Debt 43 2 Manufactured Housing Florida 24,784 24,784 7/28/2023 8/9/2028 1M SOFR Term + 4.25% 8.00% 43.2% Senior Debt 44 2 Multifamily New York 19,793 19,844 6/28/2023 7/9/2028 4.75% 4.75% 85.7% Senior Debt 45 3 Multifamily Texas 78,996 78,996 8/1/2023 8/9/2028 1M SOFR Term + 3.20% 6.89% 58.7% Senior Debt 46 3 Hospitality Georgia 18,086 18,058 8/17/2023 9/9/2028 1M SOFR Term + 4.85% 8.54% 53.5% Senior Debt 47 2 Industrial South Carolina 24,535 24,468 3/21/2024 10/9/2027 1M SOFR Term + 4.75% 9.50% —% Senior Debt 48 2 Multifamily Texas 38,037 38,037 10/18/2023 5/9/2027 1M SOFR Term + 4.50% 9.00% 62.4% Senior Debt 49 2 Hospitality Florida 31,300 31,227 10/17/2023 11/9/2028 1M SOFR Term + 4.25% 8.59% 48.9% Senior Debt 50 2 Multifamily Texas 42,750 42,750 10/17/2023 11/9/2026 1M SOFR Term + 3.85% 7.54% 61.4% Senior Debt 51 2 Multifamily Texas 24,819 24,773 10/12/2023 10/9/2028 1M SOFR Term + 3.20% 6.89% 55.1% Senior Debt 52 2 Multifamily Texas 21,400 21,400 12/6/2023 12/9/2026 1M SOFR Term + 3.75% 8.50% 63.6% 48 Table of Contents Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Senior Debt 53 2 Multifamily Texas 35,880 35,880 2/14/2024 2/9/2026 9.00% 9.00% 84.4% Senior Debt 54 3 Hospitality Colorado 32,750 32,684 2/5/2024 2/9/2029 1M SOFR Term + 4.50% 8.82% 41.6% Senior Debt 55 2 Hospitality Nevada 25,750 25,748 12/15/2023 1/9/2028 1M SOFR Term + 3.95% 7.95% 42.4% Senior Debt 56 2 Industrial California 36,926 36,840 3/19/2024 10/6/2026 11.99% 11.99% 8.6% Senior Debt 57 2 Multifamily Florida 24,312 24,122 2/12/2024 8/9/2028 1M SOFR Term + 5.50% 9.50% —% Senior Debt 58 2 Multifamily Florida 50,750 50,735 2/9/2024 8/9/2026 1M SOFR Term + 3.75% 7.50% 56.7% Senior Debt 59 3 Multifamily Texas 79,515 79,465 2/16/2024 3/9/2029 1M SOFR Term + 3.65% 7.34% 53.3% Senior Debt 60 2 Multifamily Florida 67,000 66,967 2/29/2024 3/9/2029 1M SOFR Term + 3.25% 7.25% 58.7% Senior Debt 61 2 Industrial North Carolina 75,000 74,920 3/7/2024 3/9/2029 1M SOFR Term + 2.70% 6.39% 58.6% Senior Debt 62 2 Multifamily Texas 23,118 23,034 3/7/2024 3/9/2029 1M SOFR Term + 3.75% 7.75% 57.2% Senior Debt 63 2 Multifamily Texas 40,000 39,963 4/24/2024 5/9/2028 1M SOFR Term + 2.95% 6.64% 70.4% Senior Debt 64 2 Multifamily Ohio 44,669 44,556 4/29/2024 5/9/2029 1M SOFR Term + 2.90% 6.59% 72.2% Senior Debt 65 2 Multifamily Texas 18,745 18,674 4/30/2024 5/9/2029 1M SOFR Term + 3.75% 7.75% 55.8% Senior Debt 66 2 Multifamily California 40,000 39,954 5/24/2024 6/9/2028 1M SOFR Term + 2.77% 6.46% 60.9% Senior Debt 67 2 Multifamily Connecticut 116,500 116,269 5/10/2024 5/9/2029 1M SOFR Term + 2.50% 6.19% 50.7% Senior Debt 68 3 Hospitality Florida 49,950 49,823 5/9/2024 6/9/2029 1M SOFR Term + 4.50% 8.19% 62.8% Senior Debt 69 2 Hospitality Various 27,375 27,395 6/6/2024 6/9/2029 1M SOFR Term + 4.43% 8.12% 44.6% Senior Debt 70 2 Multifamily Florida 9,323 9,291 6/3/2024 6/9/2029 1M SOFR Term + 2.95% 6.64% 56.0% Senior Debt 71 2 Multifamily Texas 23,980 23,903 6/7/2024 6/9/2029 1M SOFR Term + 2.85% 6.54% 64.5% Senior Debt 72 2 Multifamily Indiana 17,781 17,757 6/28/2024 7/9/2028 1M SOFR Term + 3.05% 6.74% 68.2% Senior Debt 73 2 Retail Wisconsin 1,986 1,988 6/20/2024 7/9/2026 5.50% 5.50% 73.0% Senior Debt 74 2 Hospitality Oregon 9,902 9,885 6/28/2024 7/9/2028 1M SOFR Term + 3.95% 7.64% 53.1% Senior Debt 75 2 Multifamily New Jersey 3,493 3,226 7/1/2024 7/9/2029 1M SOFR Term + 5.50% 9.55% 10.3% Senior Debt 76 2 Multifamily North Carolina 26,145 26,049 6/28/2024 7/9/2029 1M SOFR Term + 3.75% 7.75% 69.3% Senior Debt 77 3 Hospitality Texas 17,000 17,026 7/25/2024 8/9/2027 8.50% 8.50% 90.0% Senior Debt 78 2 Multifamily North Carolina 16,640 16,589 9/16/2024 10/9/2027 1M SOFR Term + 2.75% 6.75% 78.1% Senior Debt 79 2 Multifamily Tennessee 21,420 21,377 9/18/2024 10/9/2029 1M SOFR Term + 3.10% 6.79% 59.4% Senior Debt 80 2 Multifamily Florida 12,327 12,267 7/30/2024 8/9/2027 1M SOFR Term + 8.30% 12.05% 31.3% Senior Debt 81 3 Multifamily Florida 39,299 39,245 9/6/2024 9/9/2028 1M SOFR Term + 2.75% 6.44% 71.0% Senior Debt 82 3 Multifamily Florida 72,910 72,807 9/6/2024 9/9/2028 1M SOFR Term + 2.75% 6.44% 72.7% Senior Debt 83 2 Multifamily Florida 24,124 24,087 9/6/2024 9/9/2028 1M SOFR Term + 2.75% 6.44% 71.3% Senior Debt 84 2 Multifamily New York 15,593 15,593 8/7/2024 8/9/2029 1M SOFR Term + 5.25% 9.25% 53.6% Senior Debt 85 3 Hospitality Texas 14,130 14,107 8/9/2024 8/9/2028 1M SOFR Term + 4.00% 9.00% 63.7% Senior Debt 86 2 Industrial Texas 12,405 12,284 10/9/2024 10/9/2029 1M SOFR Term + 3.75% 7.44% 71.7% Senior Debt 87 2 Multifamily New York 20,588 20,535 11/22/2024 12/9/2027 1M SOFR Term + 3.75% 8.50% 29.2% Senior Debt 88 2 Multifamily Texas 18,523 18,463 11/12/2024 11/9/2029 1M SOFR Term + 2.95% 6.64% 66.9% Senior Debt 89 2 Hospitality Florida 17,562 17,472 11/6/2024 11/9/2029 1M SOFR Term + 4.75% 8.50% 75.8% Senior Debt 90 2 Multifamily New York 34,866 34,777 11/19/2024 12/9/2029 1M SOFR Term + 2.95% 6.64% 80.8% Senior Debt 91 2 Multifamily Florida 29,808 29,735 12/5/2024 12/9/2027 1M SOFR Term + 3.50% 7.19% 67.7% Senior Debt 92 2 Multifamily Georgia 53,973 53,854 11/1/2024 11/9/2029 1M SOFR Term + 2.95% 6.64% 71.1% Senior Debt 93 2 Multifamily Georgia 31,889 31,747 11/8/2024 11/9/2029 1M SOFR Term + 2.75% 6.44% 63.5% Senior Debt 94 2 Multifamily North Carolina 18,100 18,049 11/25/2024 12/9/2028 5.50% 5.50% 70.6% Senior Debt 95 2 Industrial Tennessee 13,441 13,404 12/6/2024 12/9/2027 1M SOFR Term + 3.50% 7.19% 59.7% Senior Debt 96 2 Multifamily South Carolina 24,359 24,276 12/9/2024 12/9/2028 1M SOFR Term + 3.25% 6.94% 76.3% Senior Debt 97 2 Multifamily North Carolina 31,162 30,208 12/20/2024 1/9/2028 4.25% 4.25% 87.3% Senior Debt 98 2 Hospitality Texas 14,409 14,371 12/27/2024 1/9/2028 1M SOFR Term + 3.25% 6.94% 40.3% Senior Debt 99 2 Multifamily North Carolina 17,263 17,181 12/30/2024 1/9/2030 1M SOFR Term + 3.25% 7.00% 69.5% Senior Debt 100 2 Multifamily Tennessee 19,355 19,300 2/13/2025 2/9/2029 1M SOFR Term + 2.90% 6.59% 69.6% Senior Debt 101 2 Multifamily Texas 22,180 22,118 1/16/2025 2/9/2029 1M SOFR Term + 3.25% 6.94% 57.7% Senior Debt 102 2 Multifamily Texas 15,089 15,047 1/16/2025 2/9/2028 1M SOFR Term + 3.25% 6.94% 75.0% Senior Debt 103 2 Multifamily Florida 14,200 13,888 1/15/2025 2/9/2030 1M SOFR Term + 4.00% 7.69% —% Senior Debt 104 2 Multifamily Texas 60,000 59,832 1/24/2025 2/9/2029 1M SOFR Term + 2.50% 6.19% 86.7% Senior Debt 105 2 Hospitality New York 49,620 49,614 1/10/2025 1/9/2029 1M SOFR Term + 3.41% 7.09% 48.4% Senior Debt 106 2 Multifamily Oklahoma 20,782 20,833 6/27/2025 7/9/2029 1M SOFR Term + 3.75% 7.50% 69.1% Senior Debt 107 2 Multifamily Texas 56,500 55,004 2/12/2025 2/9/2029 4.75% 4.75% 88.6% Senior Debt 108 2 Multifamily Texas 32,000 31,423 3/31/2025 4/9/2028 5.25% 5.25% 76.7% 49 Table of Contents Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Senior Debt 109 2 Multifamily Texas 6,371 6,065 3/26/2025 10/9/2029 1M SOFR Term + 6.00% 10.00% —% Senior Debt 110 2 Multifamily North Carolina 6,279 6,243 5/30/2025 6/9/2030 1M SOFR Term + 3.25% 6.94% 69.1% Senior Debt 111 2 Industrial Virginia 6,144 6,107 6/4/2025 6/9/2030 1M SOFR Term + 3.25% 6.94% 36.0% Senior Debt 112 2 Multifamily Texas 19,250 19,326 6/20/2025 1/9/2028 6.65% 6.65% 75.5% Senior Debt 113 2 Multifamily South Carolina 9,150 9,112 7/1/2025 7/9/2030 1M SOFR Term + 3.25% 6.94% 72.1% Senior Debt 114 2 Multifamily Texas 12,000 12,051 8/1/2025 8/9/2028 6.75% 6.75% 80.5% Senior Debt 115 2 Multifamily Florida 6,681 6,652 9/5/2025 9/9/2028 1M SOFR Term + 3.35% 7.04% 68.2% Senior Debt 116 2 Multifamily Tennessee 3,043 2,015 8/18/2025 9/9/2030 1M SOFR Term + 6.25% 9.94% —% Senior Debt 117 2 Mixed Use North Carolina 9,663 9,617 8/19/2025 9/9/2029 1M SOFR Term + 3.25% 6.94% 60.7% Senior Debt 118 (8) 2 Multifamily Various — — 8/15/2025 2/9/2028 1M SOFR Term + 5.05% —% —% Senior Debt 119 2 Multifamily Texas 6,848 6,811 8/21/2025 9/9/2030 1M SOFR Term + 2.75% 6.44% 68.6% Senior Debt 120 2 Multifamily Florida 38,250 38,089 8/27/2025 9/9/2029 1M SOFR Term + 3.08% 6.77% 73.8% Senior Debt 121 2 Multifamily Various 43,534 43,344 9/16/2025 10/9/2029 1M SOFR Term + 2.90% 6.59% 72.8% Senior Debt 122 2 Multifamily Nevada 10,000 9,954 9/29/2025 10/9/2030 1M SOFR Term + 2.65% 6.34% 72.2% Senior Debt 123 2 Multifamily New Jersey 7,850 7,793 9/30/2025 10/9/2029 1M SOFR Term + 5.05% 8.74% 69.3% Senior Debt 124 2 Industrial Georgia 10,124 10,039 10/29/2025 11/9/2030 1M SOFR Term + 4.00% 7.69% 56.1% Senior Debt 125 2 Multifamily New York 6,191 6,162 11/14/2025 11/9/2030 1M SOFR Term + 2.72% 6.41% 56.5% Senior Debt 126 2 Multifamily North Carolina 17,770 17,654 11/7/2025 11/9/2030 1M SOFR Term + 2.25% 5.94% 73.7% Senior Debt 127 2 Multifamily Ohio 10,000 9,954 10/22/2025 11/9/2028 1M SOFR Term + 2.52% 6.21% 66.2% Senior Debt 128 2 Multifamily Ohio 6,110 6,082 10/22/2025 11/9/2028 1M SOFR Term + 2.50% 6.19% 66.0% Senior Debt 129 2 Multifamily Georgia 25,750 25,692 10/29/2025 11/9/2030 1M SOFR Term + 2.50% 6.19% 72.9% Senior Debt 130 2 Multifamily Various 61,500 61,364 10/28/2025 11/9/2030 1M SOFR Term + 2.30% 5.99% 72.1% Senior Debt 131 2 Multifamily Texas 8,513 8,472 11/12/2025 11/9/2030 1M SOFR Term + 2.73% 6.42% 63.6% Senior Debt 132 2 Multifamily Texas 7,388 7,354 10/31/2025 11/9/2030 1M SOFR Term + 2.55% 6.24% 65.8% Senior Debt 133 2 Senior Housing New York 8,628 8,572 11/7/2025 12/9/2029 1M SOFR Term + 4.25% 7.94% 69.0% Senior Debt 134 2 Multifamily Texas 11,000 11,051 11/13/2025 11/9/2028 6.75% 6.75% 90.9% Senior Debt 135 2 Multifamily Colorado 7,754 7,716 12/3/2025 12/9/2030 1M SOFR Term + 2.60% 6.29% 61.2% Senior Debt 136 2 Multifamily Texas 11,370 11,315 11/14/2025 12/9/2030 1M SOFR Term + 2.47% 6.16% 56.6% Senior Debt 137 2 Multifamily Texas 11,432 11,376 11/21/2025 12/9/2028 1M SOFR Term + 3.75% 7.44% 81.2% Senior Debt 138 2 Multifamily New York 45,256 45,036 12/1/2025 12/9/2030 1M SOFR Term + 2.00% 5.69% 57.5% Senior Debt 139 2 Multifamily Florida 8,400 8,358 12/3/2025 12/9/2030 1M SOFR Term + 3.25% 6.94% 65.1% Senior Debt 140 2 Multifamily New York 7,500 7,464 11/21/2025 12/9/2029 1M SOFR Term + 2.95% 6.64% 70.1% Senior Debt 141 2 Multifamily Colorado 35,674 35,503 11/25/2025 12/9/2030 1M SOFR Term + 2.30% 5.99% 67.7% Senior Debt 142 2 Multifamily Florida 18,000 17,912 11/20/2025 12/9/2030 1M SOFR Term + 2.50% 6.19% 70.4% Senior Debt 143 2 Industrial Florida 5,890 5,844 12/29/2025 1/9/2031 1M SOFR Term + 3.15% 6.84% 62.8% Senior Debt 144 2 Multifamily Georgia 18,000 17,912 11/21/2025 12/9/2028 1M SOFR Term + 2.25% 5.94% 72.7% Senior Debt 145 2 Multifamily North Carolina 6,381 6,337 12/30/2025 1/9/2031 1M SOFR Term + 4.00% 7.69% 74.6% Senior Debt 146 2 Multifamily Texas 6,439 6,398 11/20/2025 12/9/2030 1M SOFR Term + 2.85% 6.54% 56.1% Senior Debt 147 2 Multifamily Nevada 23,394 23,282 11/25/2025 12/9/2030 1M SOFR Term + 2.85% 6.54% 76.2% Senior Debt 148 2 Industrial Illinois 6,990 6,948 12/8/2025 12/9/2030 1M SOFR Term + 2.80% 6.49% 45.5% Senior Debt 149 2 Healthcare Various 20,872 20,770 12/1/2025 12/9/2029 1M SOFR Term + 3.75% 7.44% 76.1% 2 Multifamily Nevada 15,588 15,511 12/16/2025 1/9/2031 1M SOFR Term + 2.90% 6.59% 70.7% Senior Debt 151 2 Industrial California 5,936 5,890 12/19/2025 1/9/2030 1M SOFR Term + 3.55% 7.24% 50.1% Senior Debt 152 2 Industrial Texas 9,014 8,944 12/19/2025 1/9/2031 1M SOFR Term + 3.00% 6.69% 56.2% Senior Debt 153 2 Senior Housing New York 10,000 9,951 12/19/2025 1/9/2029 1M SOFR Term + 3.50% 7.19% 68.4% Senior Debt 154 2 Industrial Various 25,000 24,876 12/23/2025 1/9/2031 1M SOFR Term + 2.93% 6.62% 60.8% Senior Debt 155 2 Hospitality Florida 7,500 7,463 12/19/2025 1/9/2031 1M SOFR Term + 3.85% 7.54% 64.8% Senior Debt 156 2 Industrial Texas 5,112 5,063 12/16/2025 1/9/2031 1M SOFR Term + 3.50% 7.19% 65.4% Senior Debt 157 2 Healthcare Massachusetts 9,482 9,435 12/29/2025 1/9/2029 1M SOFR Term + 4.70% 8.39% 62.3% Senior Debt 158 2 Multifamily North Carolina 6,424 6,381 12/30/2025 1/9/2031 1M SOFR Term + 3.45% 7.14% 71.3% Mezzanine Loan 1 3 Multifamily District of Columbia 11,700 11,700 6/30/2023 7/9/2026 1M SOFR Term + 4.45% 8.14% 45.2% Mezzanine Loan 2 2 Multifamily California 4,000 3,995 5/24/2024 6/9/2028 1M SOFR Term + 3.67% 7.36% 60.9% Mezzanine Loan 3 2 Multifamily New Jersey 9,264 9,132 7/1/2024 7/9/2029 1M SOFR Term + 11.90% 15.95% 10.3% Mezzanine Loan 4 2 Multifamily New York 1,870 1,870 8/7/2024 8/9/2029 1M SOFR Term + 12.75% 16.75% 59.6% 50 Table of Contents Loan Type Risk Rating (1) Property Type State Par Value Amortized Cost Origination Date (2) Fully Extended Maturity (3) Interest Rate (4)(5) Effective Yield (6) Loan to Value (7) Mezzanine Loan 5 2 Multifamily New York 2,100 2,094 11/19/2024 12/9/2029 1M SOFR Term + 8.23% 11.92% 85.6% Mezzanine Loan 6 2 Hospitality Texas 1,417 1,412 12/27/2024 1/9/2028 1M SOFR Term + 10.51% 14.20% 44.3% Mezzanine Loan 7 2 Hospitality New York 6,202 6,202 1/10/2025 1/9/2029 1M SOFR Term + 11.00% 14.69% 4.3% Mezzanine Loan 8 2 Multifamily Texas 1,230 1,169 3/26/2025 10/9/2029 1M SOFR Term + 15.25% 19.25% —% Mezzanine Loan 9 2 Multifamily Tennessee 652 218 8/18/2025 9/9/2030 1M SOFR Term + 13.33% 17.02% —% Mezzanine Loan 10 2 Multifamily New York 6,116 6,086 12/1/2025 12/9/2030 1M SOFR Term + 4.52% 8.21% 65.3% Mezzanine Loan 11 2 Multifamily New York 688 685 11/14/2025 11/9/2030 1M SOFR Term + 7.02% 10.71% 62.8% Total/Weighted Average $4,435,511 $4,421,436 7.13% 64.5% _______________________ (1) For a discussion of risk ratings, see Note 4 - Commercial Mortgage Loans, Held for Investment in our Consolidated Financial Statements included in this Form 10-K.
The estimated fair value of underlying collateral requires judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plans, loan sponsorship, actions of other lenders, and other factors deemed relevant by the Company. Actual losses, if any, could ultimately differ materially from these estimates.
The estimated fair value of underlying collateral requires judgments, which may include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plans, loan sponsorship, actions of other lenders, and other factors deemed relevant by the Company. Actual losses, if any, could ultimately differ materially from these estimates.
Cash Flows from Investing Activities During the year ended December 31, 2024 cash outflows of $155.5 million from investing activities were primarily driven by (i) the origination and purchase of commercial mortgage loans, held for investment for $1.8 billion, (ii) the purchase of real estate securities, available for sale for $79.5 million and (iii) the purchase of equity method investment in real estate for $13.4 million.
During the year ended December 31, 2024, cash outflows of $155.5 million from investing activities were primarily driven by (i) the origination and purchase of commercial mortgage loans, held for investment for $1.8 billion, (ii) the purchase of real estate securities, available for sale for $79.5 million and (iii) the purchase of equity method investment in real estate for $13.4 million.
We also may access liquidity through our dividend reinvestment and stock purchase plan (“DRIP”), which includes a direct stock purchase option. 46 Table of Contents In addition to our current mix of financing sources, we may also access additional forms of financings, including credit facilities, securitizations, public and private, secured and unsecured debt issuances by the Company or its subsidiaries, or through capital recycling initiatives whereby we sell certain assets in our portfolio and reinvest the proceeds in assets with more attractive risk-adjusted returns.
We also may access liquidity through our dividend reinvestment and stock purchase plan (“DRIP”), which includes a direct stock purchase option. 53 Table of Contents In addition to our current mix of financing sources, we may also access additional forms of financings, including credit facilities, securitizations, public and private, secured and unsecured debt issuances by the Company or its subsidiaries, or through capital recycling initiatives whereby we sell certain assets in our portfolio and reinvest the proceeds in assets with more attractive risk-adjusted returns.
Realized Gain/(Loss) on Real Estate Securities, Available for Sale Realized gain on real estate securities, available for sale for the year ended December 31, 2024 of $0.1 million was primarily related to the sale of six CMBS bonds.
Realized gain on real estate securities, available for sale for the year ended December 31, 2024 of $0.1 million was primarily related to the sale of six CMBS bonds.
When interest rates rise, the value of an interest rate cap will increase, thereby reducing the borrower's exposure to rising interest rates. (5) As of December 31, 2024, all of our commercial mortgage loans, held for investment which had been indexed at LIBOR were converted to SOFR utilizing the 11.448 basis points adjustment and the applicable spreads remain unchanged.
When interest rates rise, the value of an interest rate cap will increase, thereby reducing the borrower's exposure to rising interest rates. (5) As of December 31, 2025, all of our commercial mortgage loans, held for investment which had been indexed at LIBOR were converted to SOFR utilizing the 11.448 basis points adjustment and the applicable spreads remain unchanged.
Amounts are calculated based on daily averages for the three months ended December 31, 2024 and September 30, 2024, respectively. (2) Includes the effect of amortization of premium or accretion of discount and deferred fees. (3) Excludes other income on the real estate owned business segment. (4) Calculated as interest income or expense divided by average carrying value. (5) Annualized.
Amounts are calculated based on daily averages for the three months ended December 31, 2025 and September 30, 2025, respectively. (2) Includes the effect of amortization of premium or accretion of discount and deferred fees. (3) Excludes other income on the real estate owned business segment. (4) Calculated as interest income or expense divided by average carrying value. (5) Annualized.
As of December 31, 2024, the Company’s quarterly cash dividend was $0.355 per share of common stock (which was paid on an as-converted basis on the Company’s shares of Series H Preferred Stock), and $0.46875 per share on the Company’s shares of Series E Preferred Stock. The payment of future dividends is subject to declaration by the Board of Directors.
As of December 31, 2025, the Company’s quarterly cash dividend was $0.355 per share of common stock (which was paid on an as-converted basis on the Company’s shares of Series H Preferred Stock), and $0.46875 per share on the Company’s shares of Series E Preferred Stock. The payment of future dividends is subject to declaration by the Board of Directors.
Debt-to-Equity Ratio and Total Leverage Ratio The following table presents our debt-to-equity and total leverage ratios: December 31, 2024 December 31, 2023 Net debt-to-equity ratio (1) 2.6x 2.3x Total leverage ratio (2) 2.7x 2.5x ________________________ (1) Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, repurchase agreements - commercial mortgage loans, repurchase agreements - real estate securities, asset-specific financing arrangements, and unsecured debt, less cash and cash equivalents, to (ii) total equity and total redeemable convertible preferred stock, at period end .
Debt-to-Equity Ratio and Total Leverage Ratio The following table presents our debt-to-equity and total leverage ratios: December 31, 2025 December 31, 2024 Net debt-to-equity ratio (1) 2.5x 2.6x Total leverage ratio (2) 2.5x 2.7x ________________________ (1) Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, repurchase agreements - commercial mortgage loans, repurchase agreements - real estate securities, asset-specific financing arrangements, and unsecured debt, less cash and cash equivalents, to (ii) total equity and total redeemable convertible preferred stock, at period end .
(2) Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, repurchase agreements - commercial mortgage loans, repurchase agreements - real estate securities, asset-specific financing arrangements, and unsecured debt, to (ii) total equity and total redeemable convertible preferred stock, at period end. Recourse leverage ratio was 0.4x and 0.4x as of December 31, 2024 and 2023, respectively.
(2) Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, repurchase agreements - commercial mortgage loans, repurchase agreements - real estate securities, asset-specific financing arrangements, and unsecured debt, to (ii) total equity and total redeemable convertible preferred stock, at period end. Recourse leverage ratio was 0.9x and 0.4x as of December 31, 2025 and 2024, respectively.
The initial term of the amended Advisory Agreement was three-years and was automatically renewed for an additional one-year period on January 19, 2025 and will continue to automatically renew for additional one-year periods unless either party elects not to renew.
The initial term of the amended Advisory Agreement was three-years and was automatically renewed for an additional one-year period on January 19, 2026 and will continue to automatically renew for additional one-year periods unless either party elects not to renew.
For the year ended December 31, 2024, the increase in specific reserve of $36.0 million was primarily related to two non-performing loans collateralized by office properties located in Colorado and Georgia.
For the year ended December 31, 2024, the increase in specific reserve of $36.0 million, compared to the prior year, was primarily related to two non-performing loans collateralized by office properties located in Colorado and Georgia.
As of December 31, 2024, our portfolio consisted of (i) 155 commercial mortgage loans, held for investment, (ii) 11 real estate securities, available for sale, measured at fair value, and (iii) three commercial mortgage loans, held for sale, measured at fair value.
As of December 31, 2024, our portfolio consisted of (i) 155 commercial mortgage loans, held for investment and (ii) eleven real estate securities, available for sale, measured at fair value and (iii) three commercial mortgage loans, held for sale, measured at fair value.
Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Investment Realized gain on commercial mortgage loans, held for investment, for the year ended December 31, 2024 of $0.1 million was related to the disposition of two senior and one mezzanine commercial mortgage loans.
Realized gain on commercial mortgage loans, held for investment, for the year ended December 31, 2024 of $0.1 million was related to the disposition of two senior and one mezzanine commercial mortgage loans.
Non-GAAP Financial Measures Distributable Earnings and Distributable Earnings to Common Distributable Earnings is a non-GAAP measure, which the Company defines as GAAP net income (loss), adjusted for (i) non-cash CLO amortization acceleration and amortization over the expected useful life of the Company's CLOs, (ii) unrealized gains and losses on loans and derivatives, including CECL reserves and impairments, net of realized gains and losses, as described further below, (iii) non-cash equity compensation expense, (iv) depreciation and amortization, (v) subordinated performance fee accruals/(reversal), (vi) realized gains and losses on debt extinguishment and CLO calls, and (vii) certain other non-cash items.
Non-GAAP Financial Measures Distributable Earnings and Distributable Earnings to Common Distributable Earnings is a non-GAAP measure, which the Company defines as GAAP net income (loss), adjusted for (i) non-cash CLO amortization acceleration and amortization over the expected useful life of the Company's CLOs, (ii) unrealized gains and losses on loans and derivatives, including CECL reserves and impairments, net of realized gains and losses, as described further below, (iii) non-cash equity compensation expense, (iv) depreciation and amortization, (v) subordinated performance fee accruals/(reversal), (vi) realized gains and losses on debt extinguishment and CLO calls, (vii) non-cash income from mortgage servicing rights, and (viii) certain other non-cash items.
The timing of any such loss realization in our Distributable Earnings may differ materially from the timing of the corresponding loss reserves, charge-offs or impairments in our consolidated financial statements prepared in accordance with GAAP. 51 Table of Contents The Company believes that Distributable Earnings and Distributable Earnings to Common provide meaningful information to consider in addition to the disclosed GAAP results.
The timing of any such loss realization in our Distributable Earnings may differ materially from the timing of the corresponding loss reserves, charge-offs or impairments in our consolidated financial statements prepared in accordance with GAAP. The Company believes that Distributable Earnings and Distributable Earnings to Common provide meaningful information to consider in addition to the disclosed GAAP results.
However, for predevelopment construction loans at origination, LTV is not applicable and is therefore nil. (8) Commitment on the loan was unfunded as of December 31, 2024.
However, for predevelopment construction loans at origination, LTV is not applicable and is therefore nil. (8) Commitment on the loan was unfunded as of December 31, 2025.
Refer to Note 11 - Related Party Transactions and Arrangements for a summary of the Company's Advisory Agreement with the Advisor and a description of how our fees are calculated.
Refer to Note 18 - Related Party Transactions and Arrangements for a summary of the Company's Advisory Agreement with the Advisor and a description of how our fees are calculated.
Further, Distributable Earnings to Common, a non-GAAP measure, presents Distributable Earnings net of (i) perpetual preferred stock dividend payments and (ii) non-controlling interests in joint ventures. As noted above, we exclude unrealized gains and losses on loans and other investments, including CECL reserves and impairments, from our calculation of Distributable Earnings and include realized gains and losses.
Further, Distributable Earnings to Common, a non-GAAP measure, presents Distributable Earnings net of (x) perpetual preferred stock dividend payments and (y) non-controlling interests in joint ventures. As noted above, we exclude unrealized gains and losses on loans and other investments, including CECL reserves and impairments, from our calculation of Distributable Earnings and include realized gains and losses.
During the twelve months ended December 31, 2022, the maximum monthly average outstanding balance was $5.3 billion , of which $1.1 billion was related to repurchase agreements on our commercial mortgage loans and 4.2 billion for repurchase agreements on our real estate securities.
During the twelve months ended December 31, 2025, the maximum monthly average outstanding balance was $1.5 billion, of which $1.3 billion was related to repurchase agreements on our commercial mortgage loans and $0.2 billion for repurchase agreements on our real estate securities.
Amounts may also be deemed non-recoverable if, in our determination, it is nearly certain the carrying amounts will not be collected or realized upon sale. Amount may be different than the GAAP basis. As of December 31, 2024, the Company has $11.9 million of GAAP loss adjustments that would run through distributable earnings if and when cash losses are realized.
Amounts may also be deemed non-recoverable if, in our determination, it is nearly certain the carrying amounts will not be collected or realized upon sale. Amount may be different than the GAAP basis. As of December 31, 2025, the Company has $8.1 million of GAAP loss adjustments that would run through distributable earnings if and when cash losses are realized.
Amended Advisory Agreement Refer to “Note 11 - Related Party Transactions and Arrangements” for a summary of the Company’s Advisory Agreement with the Advisor and amounts paid to the Advisor pursuant to the Advisory Agreement for the years ended December 31, 2024 and December 31, 2023.
Amended Advisory Agreement Refer to “Note 18 - Related Party Transactions and Arrangements” for a summary of the Company’s Advisory Agreement with the Advisor and amounts paid to the Advisor pursuant to the Advisory Agreement for the years ended December 31, 2025 and December 31, 2024.
(2) Excludes $532.4 million of CLO notes, held by the Company, which are eliminated in Collateralized loan obligations in the consolidated balance sheets as of December 31, 2024. In addition to its cash requirements, the Company pays a quarterly dividend and has an existing share repurchase authorization.
(2) Excludes $366.1 million of CLO notes, held by the Company, which are eliminated in Collateralized loan obligations in the consolidated balance sheets as of December 31, 2025. In addition to its cash requirements, the Company pays a quarterly dividend and has an existing share repurchase authorization.
As used herein, the terms "the Company," "we," "our" and "us" refer to Franklin BSP Realty Trust, Inc., a Maryland corporation and, as required by context, to Benefit Street Partners Realty Operating Partnership, L.P., a Delaware limited partnership, which we refer to as the "OP," and to its subsidiaries. We are externally managed by Benefit Street Partners L.L.C. (our "Advisor").
As used herein, the terms "the Company," "we," "our" and "us" refer to Franklin BSP Realty Trust, Inc., a Maryland corporation and, as required by context, to FBRT OP LLC, a Delaware limited liability company, which we refer to as the "OP," and to its subsidiaries. We are externally managed by Benefit Street Partners L.L.C. (our "Advisor").
In December 2024, the Company's board of directors declared the following: (i) a fourth quarter 2024 dividend of $0.355 per share on the Company's common stock (equivalent to $1.42 per annum), (ii) a fourth quarter 2024 dividend of $106.22 per share on the Company’s Series H Preferred Stock, and (iii) a fourth quarter 2024 dividend of $0.46875 per share on the Company’s Series E Preferred Stock, all of which were paid in January 2025 to holders of record as of December 31, 2024.
In December 2025, the Company's board of directors declared the following: (i) a fourth quarter 2025 dividend of $0.355 per share on the Company's common stock (equivalent to $1.42 per annum), (ii) a fourth quarter 2025 dividend of $106.216 per share on the Company’s Series H Preferred Stock, and (iii) a fourth quarter 2025 dividend of $0.46875 per share on the Company’s Series E Preferred Stock and (iv) a fourth quarter 2025 dividend of $0.355 per unit on the OP Units, all of which were paid in January 2026 to holders of record as of December 31, 2025.
For the year ended December 31, 2024, 0 and 163,952 shares of common stock were issued by the Company and purchased in the open market by the DRIP administrator and allocated to DRIP participants, respectively, under the dividend reinvestment component of DRIP.
For the year ended December 31, 2025, 0 and 160,137 shares of common stock were issued by the Company and purchased in the open market by the DRIP administrator and allocated to DRIP participants, respectively, under the dividend reinvestment component of DRIP.
The Company’s Board of Directors also has authorized a $65 million share repurchase program, of which $31.1 million remained available as of December 31, 2024. The authorization does not obligate the Company to acquire any specific number of shares. 50 Table of Contents Related Party Arrangements Benefit Street Partners L.L.C.
The Company’s Board of Directors also has authorized a $65 million share repurchase program, of which $16.7 million remained available as of December 31, 2025. The authorization does not obligate the Company to acquire any specific number of shares. Related Party Arrangements Benefit Street Partners L.L.C.
Net Result from Derivative Transactions Net result from derivative transactions for the year ended December 31, 2024 of a $0.2 million loss was composed of a realized loss of $1.3 million due primarily to the termination and settlement of credit default swaps and treasury yields, partially offset by an unrealized gain of $1.1 million.
For the year ended December 31, 2024, loss was composed of a realized loss of $1.3 million due primarily to the termination and settlement of credit default swaps and treasury yields, partially offset by an unrealized gain of $1.1 million.
The decrease was primarily due to an approximate 59 basis point decrease in daily average SOFR and SOFR equivalent rates coupled with a $274.4 million decrease in the average carrying value of our real estate debt.
The decrease was primarily due to an approximate 32 basis point decrease in daily average SOFR and SOFR equivalent rates coupled with a $213.9 million decrease in the average carrying value of our real estate debt.
Our current sources of near-term liquidity as of December 31, 2024 and 2023 are set forth in the following table (dollars in millions): December 31, 2024 December 31, 2023 Unrestricted cash $ 184 $ 338 CLO reinvestment available (1) 12 55 Financings available & in progress (2) 339 1,131 Total $ 535 $ 1,524 ________________________ (1) See discussion below for further information on the Company's collateralized loan obligations.
Our current sources of near-term liquidity as of December 31, 2025 and 2024 are set forth in the following table (dollars in millions): December 31, 2025 December 31, 2024 Unrestricted cash $ 167 $ 184 CLO reinvestment available (1) 30 12 Financings available & in progress (2) 624 339 Total $ 821 $ 535 ________________________ (1) See discussion below for further information on the Company's collateralized loan obligations.
Net (Income)/Loss Attributable to Non-controlling Interest Net loss attributable to non-controlling interest in our consolidated joint ventures for the three months ended December 31, 2024 and September 30, 2024 totaled $0.4 million and $1.4 million, respectively.
Net (Income)/Loss Attributable to Non-controlling Interest Net income attributable to non-controlling interest in our consolidated joint ventures for the three months ended December 31, 2025 and September 30, 2025 totaled $0.7 million and $0.3 million, respectively.
The commercial mortgage loans held for investment, net of allowance for credit losses, as of December 31, 2024 and 2023, had a total carrying value of $4,908.7 million and $4,989.8 million, respectively.
The commercial mortgage loans held for investment, net of allowance for credit losses, as of December 31, 2025 and 2024, had a total carrying value of $4,383.1 million and $4,908.7 million, respectively.
(Provision)/Benefit for Credit losses Provision for credit losses was $0.9 million during the three months ended December 31, 2024 compared to a benefit of $0.3 million during the three months ended September 30, 2024.
(Provision)/Benefit for Credit losses Benefit for credit losses was $7.9 million during the three months ended December 31, 2025 compared to a benefit of $0.6 million during the three months ended September 30, 2025.
Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 Net Interest Income Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities and TRS segments.
Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 Net Interest Income Net interest income is generated on our interest-earning assets less related interest-bearing liabilities and is recorded as part of our real estate debt, real estate securities, agency and conduit programs.
(6) Represents the average of all classes of equity except the Series E Preferred Stock. (7) Fully Converted assumes conversion of our series of convertible preferred stock and full vesting of our outstanding equity compensation awards.
(7) Represents the average of all classes of equity except the Series E Preferred Stock. (8) Fully Converted assumes conversion of our series of convertible preferred stock and OP Units along with full vesting of our outstanding equity compensation awards.
Recourse net debt-to-equity ratio was 0.3x and 0.2x as of December 31, 2024 and 2023, respectively.
Recourse net debt-to-equity ratio was 0.8x and 0.3x as of December 31, 2025 and 2024, respectively.
Under the Company's dividend reinvestment and direct stock purchase plan ("DRIP"), the Company may elect to supply shares for reinvestment via newly issued shares of common stock under the DRIP or via shares of common stock acquired by the DRIP administrator on the open market.
Under the ("DRIP"), the Company may elect to supply shares for reinvestment via newly issued shares of common stock under the DRIP or via shares of common stock acquired by the DRIP administrator on the open market.
Gain/(Loss) on Other Real Estate Investments Loss on other real estate investments for the year ended December 31, 2024 was $8.0 million primarily due to sales and write offs related to the Walgreens Portfolio coupled with the onboarding of real estate owned, held for sale multifamily properties.
This is compared to a loss of $8.0 million for the year ended December 31, 2024 primarily due to sales and write offs related to the Walgreens Portfolio coupled with the onboarding of real estate owned, held for sale multifamily properties.
Collateralized Loan Obligations During the year ended December 31, 2024, the Company raised $1.0 billion through the issuance of our CLO, BSPRT 2024-FL11 Issuer, LLC. Additionally, as of December 31, 2024, the Company had $12.2 million of reinvestment capital available across all outstanding collateralized loan obligations.
Collateralized Loan Obligations During the year ended December 31, 2025, the Company raised $1.1 billion through the issuance of our CLO, BSPRT 2025-FL12 Issuer, LLC. Additionally, as of December 31, 2025, the Company had $29.5 million of reinvestment capital available across all outstanding collateralized loan obligations.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 26, 2024, for a discussion of the comparison of the year ended December 31, 2023 to the year ended December 31, 2022. 35 Table of Contents Portfolio As of December 31, 2024 and 2023, our portfolio consisted of 155 and 144 commercial mortgage loans, held for investment, respectively.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 26, 2025, for a discussion of the comparison of the year ended December 31, 2024 to the year ended December 31, 2023. 41 Table of Contents Portfolio As of December 31, 2025 and 2024, our Commercial Real Estate Financing portfolio consisted of 169 and 155 commercial mortgage loans, held for investment, respectively.
The Company also originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions. Historically this business has focused primarily on CMBS, CMBS bonds, CDOs and other securities. The Company also owns real estate that was either acquired by the Company through foreclosure or deed-in-lieu of foreclosure, or that was purchased for investment.
Through this unit the Company also originates conduit loans which the Company intends to sell through its TRS into CMBS securitization transactions, and owns real estate that was either acquired by the Company through foreclosure, deed-in-lieu of foreclosure or that was purchased for investment.
Amounts are calculated based on daily averages for the years ended December 31, 2024 and 2023, respectively. (2) Includes the effect of amortization of premium or accretion of discount and deferred fees. (3) Excludes other income on the real estate owned business segment. (4) Calculated as interest income or expense divided by average carrying value.
Amounts are calculated based on daily averages for the years ended December 31, 2025 and 2024, respectively. (2) Includes the effect of amortization of premium or accretion of discount and deferred fees. (3) Excludes other income on the real estate owned business segment.
This is compared to a net loss on our derivative portfolio of $1.3 million composed of a realized loss of $1.6 million primarily related to the termination and settlement of credit default swaps and treasury note futures, partially offset by an unrealized gain of $0.3 million for the three months ended September 30, 2024.
This is compared to a loss on derivatives for the three months ended September 30, 2025 of $0.1 million composed of a $0.4 million realized loss related to the termination and settlement of credit default swaps and treasury note futures, partially offset by a $0.3 million unrealized gain.
As of December 31, 2024, our portfolio consisted of (i) 155 commercial mortgage loans, held for investment, (ii) 11 real estate securities, available for sale, measured at fair value, and (iii) three commercial mortgage loans, held for sale, measured at fair value.
As of December 31, 2025, our portfolio consisted of (i) 169 commercial mortgage loans, held for investment, (ii) 10 real estate securities, available for sale, measured at fair value, and (iii) 17 commercial mortgage loans, held for sale, measured at fair value.
As of December 31, 2024, we had three loans (one secured by a multifamily property and two secured by office properties), designated as non-performing status with a total amortized cost of $133.2 million. As of December 31, 2023, we had two loans, designated as non-performing status with a total amortized cost of $78.2 million.
As of December 31, 2025, we had seven loans (six secured by a multifamily properties and one secured by an office property), designated as non-performing status with a total amortized cost of $214.0 million. As of December 31, 2024, we had three loans designated as non-performing status with a total amortized cost of $133.2 million.
The following table shows the par value outstanding for each CLO and the respective reinvestment end dates (dollars in millions): CLO Name Debt Amount Reinvestment End Date 2021-FL6 Issuer $ 344.4 Ended 2021-FL7 Issuer $ 392.8 Ended 2022-FL8 Issuer $ 796.9 Ended 2022-FL9 Issuer $ 519.5 Ended 2023-FL10 Issuer $ 717.2 04/08/25 2024-FL11 Issuer $ 886.2 10/08/27 Repurchase Agreements and Revolving Credit Facilities ( “ Repo and Revolving Credit Facilities ” ) The Repo and Revolving Credit Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate that typically range between 60% to 75% of the principal amount of the mortgage loan being pledged.
The following table shows the par value outstanding for each CLO and the respective reinvestment end dates (dollars in millions): CLO Name Debt Amount Reinvestment End Date 2022-FL8 Issuer $ 370.3 Ended 2023-FL10 Issuer $ 553.2 Ended 2024-FL11 Issuer $ 886.2 10/08/27 2025-FL12 Issuer $ 947.2 05/08/28 Repurchase Agreements and Revolving Credit Facilities ( “ Repo and Revolving Credit Facilities ” ) The Repo and Revolving Credit Facilities are financing sources through which the Company may pledge one or more mortgage loans to the financing entity in exchange for funds typically at an advance rate that typically range between 60% to 75% of the principal amount of the mortgage loan being pledged.
Dividends payable on each share of Series H convertible preferred stock ("Series H Preferred Stock") is generally equal to the quarterly dividend that would have been paid had such share of preferred stock been converted to a share of common stock, except to the extent common stock dividends have been reduced below certain specified levels.
Distributions on our common stock are payable when declared by our board of directors. 55 Table of Contents Dividends payable on each share of Series H convertible preferred stock ("Series H Preferred Stock") is generally equal to the quarterly dividend that would have been paid had such share of preferred stock been converted to a share of common stock, except to the extent common stock dividends have been reduced below certain specified levels.
(2) Represents unrealized gains and losses on (i) commercial mortgage loans, held for sale, measured at fair value, (ii) other real estate investments, measured at fair value and (iii) derivatives. (3) Represents accrued and unpaid subordinated performance fee.
(2) Represents unrealized gains and losses on (i) commercial mortgage loans, held for sale, measured at fair value, (ii) other real estate investments, measured at fair value and (iii) derivatives. (3) Represents accrued and unpaid subordinated performance fee. In addition, reversal of subordinated performance fee represents cash payment obligations during the period.
Revenue from Real Estate Owned Revenue from real estate owned for the years ended December 31, 2024 and 2023 totaled $22.8 million and $17.0 million, respectively.
Revenue from Real Estate Owned Revenue from real estate owned for the years ended December 31, 2025 and 2024 totaled $29.6 million and $22.8 million, respectively.
(6) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets. (7) Calculated by dividing net interest income/spread by the average interest-earning assets less average interest-bearing liabilities. Interest Income Interest income for the three months ended December 31, 2024 and September 30, 2024 totaled $127.8 million and $134.1 million, respectively, a decrease of $6.3 million.
(6) Calculated by dividing total average interest-bearing liabilities by total average interest-earning assets. (7) Calculated by dividing net interest income/spread by the average interest-earning assets less average interest-bearing liabilities. Interest Income Interest income for the three months ended December 31, 2025 and September 30, 2025 totaled $99.0 million and $106.2 million, respectively, a decrease of $7.2 million.
During the year ended December 31, 2023, cash inflows of $380.8 million from investing activities were primarily driven by (i) proceeds from principal repayments of $1.1 billion received on commercial mortgage loans, held for investment, (ii) proceeds from the sale or paydown of real estate securities, available for sale of $418.8 million, (iii) proceeds from the sale of real estate owned, held for sale assets of $39.8 million and (iv) $17.7 million received from principal collateral on mortgage investments.
Cash Flows from Investing Activities During the year ended December 31, 2025 cash inflows of $380.8 million from investing activities were primarily driven by (i) proceeds from principal repayments of $1.5 billion received on commercial mortgage loans, held for investment, (ii) proceeds received from the sale or paydown of real estate securities, available for sale of $184.0 million, (iii) proceeds from the sale of real estate owned, held for sale assets of $60.9 million and (iv) proceeds from the sale of commercial mortgage loans, held for investment of $35.2 million.
The Company did not record any realized gains or losses on dispositions of commercial mortgage loans for the three months ended September 30, 2024.
The Company did not realize any gains or losses on dispositions of commercial mortgage loans held for sale for the three months ended September 30, 2025.
(2) Excluding the amounts for accumulated depreciation and amortization of real property of $13.8 million and $9.4 million as of December 31, 2024 and 2023, respectively, would result in a fully-converted book value per share of $15.35 and $15.88 as of December 31, 2024 and 2023, respectively.
(3) Excluding the amounts for accumulated depreciation and amortization of real property of $17.5 million and $13.8 million as of December 31, 2025 and 2024, respectively, would result in a fully-converted book value per share of $14.34 and $15.35 as of December 31, 2025 and 2024, respectively.
(Provision)/Benefit for Income Tax Provision for income tax for the year ended December 31, 2024 was $1.1 million compared to a benefit of $2.8 million for the year ended December 31, 2023. The difference is due to changes in taxable income/loss in our TRS segment.
(Provision)/Benefit for Income Tax Provision for income tax for the year ended December 31, 2025 was $3.9 million compared to a provision of $1.1 million for the year ended December 31, 2024. The difference is related to changes in taxable earnings in our TRS segment.
During the term of the amended Advisory Agreement, the Advisor shall not, directly or indirectly, manage or advise another REIT that is engaged in the business of the Company in any geographical region in which the Company has a significant investment, or provide any services related to fixed-rate conduit lending to any other person, subject to certain conditions.
During the term of the amended Advisory Agreement, the Advisor shall not, directly or indirectly, manage or advise another REIT that is engaged in the business of the Company in any geographical region in which the Company has a significant investment, or provide any services related to fixed-rate conduit lending to any other person, subject to certain conditions. 58 Table of Contents Loan Referral Agreement Effective July 1, 2025, NewPoint shall refer prospective clients to the Advisor on a non-exclusive basis.
Cash Flows The following table sets forth changes in cash, cash equivalents and restricted cash for the years ended December 31, 2024 2023, and 2022, respectively For the Year Ended December 31, 2024 2023 2022 Cash flows from operating activities $ 57,233 $ 197,387 $ 152,515 Cash flows from investing activities (155,475) 380,807 3,097,265 Cash flows from financing activities (48,581) (424,994) (3,227,492) Net increase (decrease) in cash, cash equivalents and restricted cash $ (146,823) $ 153,200 $ 22,288 Cash Flows from Operating Activities During the year ended December 31, 2024, cash inflows of $57.2 million from operating activities were primarily driven by (i) net income of $92.4 million and (ii) certain non-cash expenses, partially offset by net cash outlay of $74.1 million related to originations, sales and repayment of commercial mortgage loans, held for sale, measured at fair value.
Cash Flows The following table sets forth changes in cash, cash equivalents and restricted cash for the years ended December 31, 2025 2024, and 2023, respectively For the Year Ended December 31, 2025 2024 2023 Cash flows from operating activities $ 291,940 $ 57,233 $ 197,387 Cash flows from investing activities 380,806 (155,475) 380,807 Cash flows from financing activities (684,429) (48,581) (424,994) Net increase (decrease) in cash, cash equivalents and restricted cash $ (11,683) $ (146,823) $ 153,200 Cash Flows from Operating Activities During the year ended December 31, 2025, cash inflows of $291.9 million from operating activities were primarily driven by (i) net income of $84.1 million, (ii) net cash proceeds of $166.7 million related to originations, sales and repayment of commercial mortgage loans, held for sale, measured at fair value and (iii) certain non-cash expenses.
Specific Allowance for credit losses For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the specific allowance for credit losses.
Specific Allowance for credit losses For financial instruments where the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date and the repayment is expected to be provided substantially through the operation or sale of the collateral, the Company may elect to use as a practical expedient the fair value of the collateral at the reporting date when determining the specific allowance for credit losses. 29 Table of Contents For loans held for investment which the Company identifies reasonable doubt as to whether the collection of contractual components can be satisfied, a loan specific allowance for credit losses analysis is performed.
During the year ended December 31, 2023, cash inflows of $197.4 million from operating activities were primarily driven by (i) net income of $144.5 million, (ii) net proceeds of $19.5 million related to originations, sales and repayment of commercial mortgage loans, held for sale, measured at fair and (iii) certain non-cash expenses.
During the year ended December 31, 2024, cash inflows of $57.2 million from operating activities were primarily driven by (i) net income of $92.4 million and (ii) certain non-cash expenses, partially offset by net cash outlay of $74.1 million related to originations, sales and repayment of commercial mortgage loans, held for sale, measured at fair value.
Inflows were partially offset by (i) the origination and purchase of commercial mortgage loans, held for investment for $936.3 million and (ii) the purchase of real estate securities, available for sale for $223.8 million. 49 Table of Contents Cash Flows from Financing Activities During the year ended December 31, 2024 cash outflows of $48.6 million from financing activities were primarily driven by (i) repayments on our other financings of $23.7 million, (ii) $144.9 million of distributions paid to shareholders, (iii) $16.2 million of distributions paid to non-controlling interest, (iv) payments of deferred financing costs of $9.3 million and (v) $4.9 million of common stock repurchases.
During the year ended December 31, 2024, cash outflows of $48.6 million from financing activities were primarily driven by (i) repayments on our other financings of $23.7 million, (ii) $144.9 million of distributions paid to shareholders, (iii) $16.2 million of distributions paid to non-controlling interest, (iv) payments of deferred financing costs of $9.3 million and (v) $4.9 million of common stock repurchases.
The Company is considered to have satisfied all performance obligation at a point in time. Real estate owned assets that are probable to be sold within one year are reported as held for sale. Real estate owned assets classified as held for sale are measured at the lower of its carrying value or estimated fair value less cost to sell.
The Company is considered to have satisfied all performance obligation at a point in time. 30 Table of Contents Real estate owned assets that are probable to be sold within one year are reported as held for sale.
If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually. 26 Table of Contents In measuring the general allowance for credit losses for financial instruments, such as loans held for investment and unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the provision for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”).
In measuring the general allowance for credit losses for financial instruments, such as loans held for investment and unfunded loan commitments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the allowance for credit losses is calculated as the product of PD, LGD and exposure at default (“EAD”) estimates.
The $5.8 million increase was primarily the result of rental income from obtaining possession of additional multifamily properties brought on as real estate owned, through foreclosure or deed-in-lieu of foreclosure, for the year ended December 31, 2024.
The $6.8 million increase was primarily the result of rental income from obtaining possession of additional multifamily and office properties brought on as real estate owned, through foreclosure or deed-in-lieu of foreclosure, for the year ended December 31, 2025. 35 Table of Contents Provision/(Benefit) for Credit losses Benefit for credit losses for the year ended December 31, 2025 totaled $11.9 million.
As of December 31, 2024, three loans designated as non-performing and put on cost recovery status were determined to have a combined $31.2 million specific allowance for credit losses. During the year ended December 31, 2023, no specific allowance for credit losses were recorded on the two non-performing loans, all of which were senior mortgage notes secured by multifamily properties.
As of December 31, 2025, three loans designated as non-performing and put on cost recovery status were determined to have a combined $4.1 million specific allowance for credit losses. During the year ended December 31, 2024, three loans designated as non-performing and put on cost recovery status were determined to have a combined $31.2 million specific allowance for credit losses.
Real Estate Owned - Estimating Fair Value and Holding Period Real estate owned assets, held for investment are carried at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges.
Real Estate Owned - Estimating Fair Value and Holding Period Real estate owned assets, held for investment are carried at their estimated fair value at acquisition and presented net of accumulated depreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment.
Net (Income)/Loss Attributable to Non-controlling Interest Net loss attributable to non-controlling interest in our consolidated joint ventures for the years ended December 31, 2024 and 2023 totaled $3.5 million and $0.7 million, respectively. Preferred Share Dividends Preferred share dividends were $27.0 million for the years ended December 31, 2024 and 2023.
Net (Income)/Loss Attributable to Non-controlling Interest Net income attributable to non-controlling interest in our consolidated joint ventures for the year ended December 31, 2025 was $1.8 million, compared to a net loss attributable to non-controlling interest in our consolidated joint ventures of $3.5 million for the year ended December 31, 2024. 36 Table of Contents Preferred Share Dividends Preferred share dividends were $27.0 million for the years ended December 31, 2025 and 2024.
Outflows were partially offset by net borrowings on collateralized loan obligations of $448.1 million. Election as a REIT We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013.
Election as a REIT We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2013.
As of September 30, 2024, our portfolio consisted of (i) 157 commercial mortgage loans, held for investment and (ii) ten real estate securities, available for sale, measured at fair value.
As of December 31, 2025, our portfolio consisted of (i) 169 commercial mortgage loans, held for investment, (ii) 10 real estate securities, available for sale, measured at fair value, and (iii) 17 commercial mortgage loans, held for sale, measured at fair value.
The following tables summarize our Repo and Revolving Credit Facilities and our master repurchase agreements (“MRAs”) for the years ended December 31, 2024, 2023, and 2022, respectively: 47 Table of Contents As of December 31, 2024 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements and Revolving Credit Facilities - Commercial Mortgage Loans $ 412,556 $ 762,437 $ 183,761 $ 329,811 $ 382,313 $ 671,561 $ 799,861 $ 237,888 Repurchase Agreements, Real Estate Securities 194,769 243,646 241,266 236,608 217,012 249,442 259,977 264,514 Total $ 607,325 $ 1,006,083 $ 425,027 $ 566,419 $ 599,325 $ 921,003 $ 1,059,838 $ 502,402 As of December 31, 2023 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements and Revolving Credit Facilities - Commercial Mortgage Loans $ 604,421 $ 695,039 $ 249,345 $ 299,707 $ 725,300 $ 796,659 $ 816,929 $ 278,168 Repurchase Agreements, Real Estate Securities 107,934 176,993 240,010 174,055 217,389 209,025 349,878 263,769 Repurchase Agreements, Real Estate Securities held as trading 121,000 113,000 — — 149,387 117,159 57,242 — Total $ 833,355 $ 985,032 $ 489,355 $ 473,762 $ 1,092,076 $ 1,122,843 $ 1,224,049 $ 541,937 As of December 31, 2022 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements and Revolving Credit Facilities - Commercial Mortgage Loans $ 522,890 $ 832,034 $ 699,408 $ 680,859 $ 813,144 $ 834,337 $ 709,679 $ 729,329 Repurchase Agreements, Real Estate Securities 54,610 53,288 112,613 222,864 44,744 54,033 53,688 174,389 Repurchase Agreements, Real Estate Securities held as trading 1,659,931 240,000 225,000 217,144 3,055,413 1,818,495 230,011 220,102 Total $ 2,237,431 $ 1,125,322 $ 1,037,021 $ 1,120,867 $ 3,913,301 $ 2,706,865 $ 993,378 $ 1,123,820 The use of our warehouse lines is dependent upon a number of factors including but not limited to: origination volume, loan repayments and prepayments, our use of other financing sources such as collateralized loan obligations, our liquidity needs and types of loan assets and underlying collateral that we hold.
The following tables summarize our Repo and Revolving Credit Facilities and our master repurchase agreements (“MRAs”) for the years ended December 31, 2025, 2024, and 2023, respectively: 54 Table of Contents As of December 31, 2025 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements and Revolving Credit Facilities - Commercial Mortgage Loans $ 429,314 $ 573,093 $ 1,176,808 $ 1,087,087 $ 426,898 $ 588,457 $ 1,076,364 $ 1,318,607 Repurchase Agreements, Real Estate Securities 206,164 128,890 131,657 187,371 249,374 253,388 195,847 190,842 Total $ 635,478 $ 701,983 $ 1,308,465 $ 1,274,458 $ 676,272 $ 841,845 $ 1,272,211 $ 1,509,449 As of December 31, 2024 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements and Revolving Credit Facilities - Commercial Mortgage Loans $ 412,556 $ 762,437 $ 183,761 $ 329,811 $ 382,313 $ 671,561 $ 799,861 $ 237,888 Repurchase Agreements, Real Estate Securities 194,769 243,646 241,266 236,608 217,012 249,442 259,977 264,514 Total $ 607,325 $ 1,006,083 $ 425,027 $ 566,419 $ 599,325 $ 921,003 $ 1,059,838 $ 502,402 As of December 31, 2023 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements and Revolving Credit Facilities - Commercial Mortgage Loans $ 604,421 $ 695,039 $ 249,345 $ 299,707 $ 725,300 $ 796,659 $ 816,929 $ 278,168 Repurchase Agreements, Real Estate Securities 107,934 176,993 240,010 174,055 217,389 209,025 349,878 263,769 Repurchase Agreements, Real Estate Securities held as trading 121,000 113,000 — — 149,387 117,159 57,242 — Total $ 833,355 $ 985,032 $ 489,355 $ 473,762 $ 1,092,076 $ 1,122,843 $ 1,224,049 $ 541,937 The use of our warehouse lines is dependent upon a number of factors including but not limited to: origination volume, loan repayments and prepayments, our use of other financing sources such as collateralized loan obligations, our liquidity needs and types of loan assets and underlying collateral that we hold.
Historically this business has focused primarily on CMBS, CMBS bonds, CDO notes, and other securities. • The commercial real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS 28 Table of Contents securitization market at a profit.
Additionally, the business services external portfolios of commercial real estate financing products. • The commercial real estate conduit business, operated through the Company's TRS, is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit.
Provision/(Benefit) for Credit losses Provision for credit losses for the years ended December 31, 2024 and 2023 totaled $35.7 million and $33.7 million, respectively. General benefit for credit losses was $0.3 million for the year ended December 31, 2024 compared to a general provision of $21.4 million for the year ended December 31, 2023.
This is compared to a provision for credit losses for the year ended December 31, 2024 of $35.7 million. General benefit for credit losses was $13.5 million for the year ended December 31, 2025 compared to a general benefit of $0.3 million for the year ended December 31, 2024.
Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Investment Realized gain on commercial mortgage loans, held for investment, for the three months ended December 31, 2024 of $0.1 million was related to the disposition of two senior and one mezzanine commercial mortgage loans.
Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Sale Realized loss on commercial mortgage loans, held for sale, for the three months ended December 31, 2025 of $0.2 million was related to the disposition one senior loan collateralized by a portfolio of retail properties.
Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Sale, Measured at Fair Value The Company did not realize any gain or loss on commercial mortgage loans, held for sale, measured at fair value for the three months ended December 31, 2024.
Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Investment The Company did not realize any gains or losses on dispositions of commercial mortgage loans, held for investment for the year ended December 31, 2025.
Real estate securities for which the fair value option has been elected are not evaluated for other-than-temporary impairment as changes in fair value are recorded in the consolidated statement of operations.
Real estate securities for which the fair value option has been elected are not evaluated for other-than-temporary impairment as changes in fair value are recorded in the consolidated statement of operations. 31 Table of Contents NewPoint Acquisition Our Agency Business is conducted through NewPoint, which we acquired on July 1, 2025.
The following table provides a reconciliation of GAAP net income to Distributable Earnings and Distributable Earnings to Common for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands): Year Ended December 31, 2024 2023 2022 GAAP net income (loss) $ 92,403 $ 144,509 $ 14,215 Adjustments: CLO amortization acceleration (1) — (5,521) (438) Unrealized (gain)/loss on financial instruments (2) 6,933 7,185 17,010 Unrealized (gain)/loss - ARMs — 415 43,557 (Reversal of)/provision for credit losses 35,699 33,738 36,115 Non-cash compensation expense 8,173 4,762 3,485 Depreciation and amortization 5,630 7,128 5,408 Subordinated performance fee (3) (7,551) 6,171 (8,380) Realized (gain)/loss on debt extinguishment / CLO call — (2,201) — Realized gain/(loss) adjustment on loans and REO (4) (40,605) (1,571) — Loan workout charges/(loan workout recoveries) (5) — (5,105) 5,104 Distributable Earnings $ 100,682 $ 189,510 $ 116,076 7.5% series E cumulative redeemable preferred stock dividend (19,367) (19,367) (19,367) Non-controlling interests in joint ventures net (income) / loss 3,475 (602) 216 Non-controlling interests in joint ventures adjusted net (income) / loss DE Adjustments (3,717) (31) (1,415) Distributable Earnings to Common $ 81,073 $ 169,510 $ 95,510 Average common stock & common stock equivalents (6) 1,363,621 1,403,558 1,456,871 GAAP net income/(loss) ROE 5.6 % 8.9 % (0.3) % Distributable earnings ROE 5.9 % 12.1 % 6.6 % GAAP net income/(loss) per share, diluted $ 0.82 $ 1.42 $ (0.38) GAAP net income/(loss) per share, fully converted (7) $ 0.87 $ 1.42 $ (0.06) Distributable earnings per share, fully converted (7) $ 0.92 $ 1.92 $ 1.07 ________________________ (1) Before Q1 2024, we adjusted GAAP income for non-cash CLO amortization acceleration to effectively amortize the issuance costs of our CLOs over the expected lifetime of the CLOs.
The methodology for calculating Distributable Earnings and Distributable Earnings to Common may differ from the methodologies employed by other companies and thus may not be comparable to the Distributable Earnings reported by other companies. 59 Table of Contents The following table provides a reconciliation of GAAP net income to Distributable Earnings and Distributable Earnings to Common for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands): Year Ended December 31, 2025 2024 2023 GAAP Net Income (Loss) $ 84,085 $ 92,403 $ 144,509 Adjustments: CLO amortization acceleration (1) — — (5,521) Unrealized (gain)/loss on financial instruments (2) 4,444 6,933 7,185 Unrealized (gain)/loss - ARMs — — 415 (Reversal of)/provision for credit losses (11,850) 35,699 33,738 Non-cash compensation expense 13,070 8,173 4,762 Depreciation and amortization, net 9,570 5,630 7,128 Subordinated performance fee (3) (1,080) (7,551) 6,171 Transaction-related and non-recurring items (4) 8,818 — — Realized (gain)/loss on debt extinguishment / CLO call 7,660 — (2,201) Loan workout charges/(loan workout recoveries) (5) — — (5,105) Income from mortgage servicing rights (28,570) — — Amortization and write-offs of MSRs 25,625 — — Deferred tax adjustment 3,030 — — Fair value adjustments on equity investments (1,707) — — Distributable Earnings before Realized Loss $ 113,095 $ 141,287 $ 191,081 Realized gain / (loss) on debt extinguishment (7,660) — — Realized gain/(loss) adjustment on loans and REO (6) (38,114) (40,605) (1,571) Distributable Earnings $ 67,321 $ 100,682 $ 189,510 7.5% series E cumulative redeemable preferred stock dividend (19,367) (19,367) (19,367) Non-controlling interests in joint ventures net (income) / loss (1,814) 3,475 (602) Non-controlling interests in joint ventures adjusted net (income) / loss DE adjustments (265) (3,717) (31) Distributable Earnings to Common $ 45,875 $ 81,073 $ 169,510 Average common stock & common stock equivalents (7) 1,354,842 1,363,621 1,403,558 GAAP net income/(loss) ROE 4.6 % 5.6 % 8.9 % Distributable earnings ROE 3.4 % 5.9 % 12.1 % GAAP net income/(loss) per share, diluted $ 0.64 $ 0.82 $ 1.42 GAAP net income/(loss) per share, fully converted (8) $ 0.68 $ 0.87 $ 1.42 Distributable earnings per share, fully converted (8) $ 0.49 $ 0.92 $ 1.92 Distributable earnings per share before realized loss, fully converted (6) $ 0.99 $ 1.38 $ 1.93 ________________________ (1) Before Q1 2024, we adjusted GAAP income for non-cash CLO amortization acceleration to effectively amortize the issuance costs of our CLOs over the expected lifetime of the CLOs.
Realized Gain/(Loss) on Sale of Commercial Mortgage Loans, Held for Sale, Measured at Fair Value Realized gain on commercial mortgage loans, held for sale, measured at fair value for the year ended December 31, 2024 of $13.1 million was related to the sale of $271.2 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $284.3 million.
This is compared to the sale of $271.2 million in principal amount of commercial real estate loans sold into the CMBS securitization market resulting in proceeds of $284.3 million for the year ended December 31, 2024.
The Company did not have any dispositions of commercial mortgage loans for the year ended December 31, 2023.
The Company did not realize any gains or losses on dispositions of commercial mortgage loans, held for sale for the year ended December 31, 2024.
The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the years ended December 31, 2024 and 2023 (dollars in thousands): Year Ended December 31, 2024 December 31, 2023 Average Carrying Value (1) Interest Income/Expense (2)(3) Avg Yield/Financing Cost (4) Average Carrying Value (1) Interest Income/Expense (2)(3) Avg Yield/Financing Cost (4) Interest-earning assets: Real estate debt (5) $ 5,176,062 $ 502,298 9.7 % $ 5,038,267 $ 530,116 10.5 % Real estate conduit 37,081 5,469 14.7 % 16,408 2,244 13.7 % Real estate securities 214,881 17,128 8.0 % 260,425 17,323 6.7 % Total $ 5,428,024 $ 524,895 9.7 % $ 5,315,100 $ 549,683 10.3 % Interest-bearing liabilities: Repurchase Agreements - commercial mortgage loans $ 457,916 $ 41,516 9.1 % $ 573,530 $ 54,564 9.5 % Other financing and loan participation - commercial mortgage loans 16,336 968 5.9 % 59,519 5,478 9.2 % Repurchase Agreements - real estate securities 216,082 13,214 6.1 % 244,469 14,118 5.8 % Collateralized loan obligations 3,595,162 275,289 7.7 % 3,165,612 223,686 7.1 % Unsecured debt 81,345 7,484 9.2 % 85,613 7,731 9.0 % Total $ 4,366,841 $ 338,471 7.8 % $ 4,128,743 $ 305,577 7.4 % Net interest income/spread $ 186,424 1.9 % $ 244,106 2.9 % Average leverage % (6) 80.4 % 77.7 % Weighted average levered yield (7) 17.6 % 20.6 % __ ______________________ (1) Based on amortized cost for real estate debt and real estate securities and principal amount for interest-bearing liabilities.
The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the years ended December 31, 2025 and 2024 (dollars in thousands): Year Ended December 31, 2025 December 31, 2024 Average Carrying Value (1) Interest Income/Expense (2)(3) Avg Yield/Financing Cost (4) Average Carrying Value (1) Interest Income/Expense (2)(3) Avg Yield/Financing Cost (4) Interest-earning assets: Real estate debt $ 4,590,492 $ 399,360 8.7 % $ 5,176,062 $ 502,298 9.7 % Agency debt 224,107 12,797 5.7 % — — — % Real estate conduit 66,304 6,126 9.2 % 37,081 5,469 14.7 % Real estate securities 110,813 8,192 7.4 % 214,881 17,128 8.0 % Total $ 4,991,716 $ 426,475 8.5 % $ 5,428,024 $ 524,895 9.7 % Interest-bearing liabilities: Repurchase Agreements - commercial mortgage loans $ 796,048 $ 56,687 7.1 % $ 457,916 $ 41,516 9.1 % Other financing and loan participation - commercial mortgage loans 12,865 782 6.1 % 16,336 968 5.9 % Repurchase Agreements - real estate securities 153,243 8,075 5.3 % 216,082 13,214 6.1 % Collateralized loan obligations 3,079,418 209,975 6.8 % 3,595,162 275,289 7.7 % Unsecured debt 148,585 12,808 8.6 % 81,345 7,484 9.2 % Total $ 4,190,159 $ 288,327 6.9 % $ 4,366,841 $ 338,471 7.8 % Net interest income/spread $ 138,148 1.6 % $ 186,424 1.9 % Average leverage % (5) 83.9 % 80.4 % Weighted average levered yield (6) 17.2 % 17.6 % __ ______________________ (1) Based on amortized cost for real estate debt and real estate securities and principal amount for interest-bearing liabilities.
Off Balance Sheet Arrangements We had no off balance sheet arrangements as of December 31, 2024 and through the date of the filing of this Form 10-K.
The Advisor or NewPoint may terminate this arrangement at any time, without notice and without cause. Off Balance Sheet Arrangements We had no off balance sheet arrangements as of December 31, 2025 and through the date of the filing of this Form 10-K.
This is compared to a loss of $2.2 million for the three months ended September 30, 2024 primarily due to write offs related to the Walgreens Portfolio coupled with the onboarding of real estate owned, held for sale, multifamily properties.
This is compared to a loss of $2.1 million for the three months ended September 30, 2025 primarily due to the sales of real estate owned, held for sale, multifamily and retail properties coupled with the fair value write down on one multifamily property located in Ohio.
The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes. 48 Table of Contents Distributions on our common stock are payable when declared by our board of directors.
The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+5 added−0 removed13 unchanged
Biggest changeEstimated Percentage Change in Interest Income Net of Interest Expense Change in Indexing Rates December 31, 2024 December 31, 2023 (-) 100 Basis Points (1.09) % (6.15) % (-) 50 Basis Points (1.47) % (3.03) % Base Interest Rate — % — % (+) 50 Basis Points 2.38 % 3.01 % Real Estate Risk The market values of commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; and demographic factors.
Biggest changeReal Estate Risk The market values of commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; and demographic factors.
We have and may continue to receive margin calls from our lenders as a result of the decline in the market value of the assets pledged by us to our lenders under our repurchase agreements and warehouse credit facilities, and if we fail to resolve such margin calls when due by payment of cash or delivery of additional collateral, the lenders may exercise remedies including demanding payment by us of our aggregate outstanding financing obligations and/or taking ownership of the loans or other assets securing the applicable obligations and liquidating them at inopportune prices. 53 Table of Contents Interest Rate Risk Our market risk arises primarily from interest rate risk relating to interest rate fluctuations.
We have and may continue to receive margin calls from our lenders as a result of the decline in the market value of the assets pledged by us to our lenders under our repurchase agreements and warehouse credit facilities, and if we fail to resolve such margin calls when due by payment of cash or delivery of additional collateral, the lenders may exercise remedies including demanding payment by us of our aggregate outstanding financing obligations and/or taking ownership of the loans or other assets securing the applicable obligations and liquidating them at inopportune prices. 61 Table of Contents Interest Rate Risk Our market risk arises primarily from interest rate risk relating to interest rate fluctuations.
The information required by this Item 8 is hereby incorporated by reference to our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.
The information required by this Item 8 is hereby incorporated by reference to our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None. 62 Table of Contents
As of December 31, 2024 and 2023, our portfolio included 149 and 141 variable rate investments, respectively, based on LIBOR and SOFR (or “indexing rates”) for various terms. As of June 2023, the Company has fully transitioned all loans formerly on LIBOR indexing rates to SOFR indexing rates.
As of December 31, 2025 and 2024, our portfolio included 162 and 149 variable rate investments, respectively, based on LIBOR and SOFR (or “indexing rates”) for various terms. As of June 2023, the Company fully transitioned all loans formerly on LIBOR indexing rates to SOFR indexing rates.
Added
As a result of the NewPoint acquisition on July 1, 2025, and the operation of our agency business, we will be subject to additional credit risk as a result of our obligations under the risk sharing requirements applicable to some agency mortgage loans.
Added
Estimated Percentage Change in Interest Income Net of Interest Expense Change in Indexing Rates December 31, 2025 December 31, 2024 (-) 100 Basis Points 8.51 % (1.09) % (-) 50 Basis Points 2.26 % (1.47) % Base Interest Rate — % — % (+) 50 Basis Points 0.24 % 2.38 % Our Agency Business originates, sells and services a range of multifamily finance products with Fannie Mae, Freddie Mac, and HUD.
Added
Our loans held-for-sale to these agencies are not currently exposed to interest rate risk during the loan commitment, closing and delivery process. The sale or placement of each loan to an investor is negotiated prior to closing on the loan with the borrower, and the sale or placement is generally effectuated within 60 days of closing.
Added
The coupon rate for the loan is set after we establish the interest rate with the investor. The fair value of our MSRs is subject to market risk since a significant driver of the fair value of these assets will be the discount rates which are influenced by interest rates and conditional prepayment rates ("CPR").
Added
A 100 basis point increase in the weighted average discount rate would decrease the fair value of our MSRs by $7.4 million at December 31, 2025, while a 100 basis point decrease would increase the fair value by $7.9 million.

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