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What changed in Franklin BSP Realty Trust, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Franklin BSP Realty Trust, Inc.'s 2023 and 2024 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 2024 report.

+317 added−308 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-26)

Top changes in Franklin BSP Realty Trust, Inc.'s 2024 10-K

317 paragraphs added · 308 removed · 256 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

18 edited+3 added−3 removed55 unchanged
Biggest changeThe 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, typically subject to triple net leases. Investment Objectives Our objective is to provide our common shareholders attractive, risk-adjusted returns through a stable dividend and capital growth.
Biggest changeInvestment 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.
We may create subordinated mortgage loans by tranching our directly originated first mortgage loans generally through syndications of senior first mortgages or buy such assets directly from third party originators.
We may create subordinated mortgage loans by tranching our directly originated first mortgage loans generally through syndications of senior first mortgages or we may buy such assets directly from third party originators.
The Conduit loans are typically fixed-rate commercial real estate loans and are long (up to ten years) term, 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. 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.
Our underwriting process involves comprehensive financial, structural, operational, and legal due diligence to assess any risks in connection with making such investments so that we can optimize pricing and structuring. By originating loans directly, we are able to structure and underwrite loans that satisfy our standards, establish a direct relationship with the borrower, and utilize our own documentation.
Our underwriting process involves comprehensive financial, structural, operational, and legal due diligence to assess any risks in connection with making such investments so that we can optimize pricing and structuring. By originating loans directly, we are able to structure and underwrite loans that satisfy our standards, establish a direct relationship with the borrower, and utilize our own preferred documentation.
CMBS and CRE CLO Bonds are generally pass-through certificates that represent beneficial ownership interests in common law trusts whose assets consist of defined portfolios of one or more commercial mortgage loans. They are typically issued in multiple tranches whereby the more senior classes are entitled to priority distributions of specified principal and interest payments from the trust’s underlying assets.
CMBS and CMBS bonds are generally pass-through certificates that represent beneficial ownership interests in common law trusts whose assets consist of defined portfolios of one or more commercial mortgage loans. They are typically issued in multiple tranches whereby the more senior classes are entitled to priority distributions of specified principal and interest payments from the trust’s underlying assets.
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, 2023, 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. 4 Table of Contents Human Capital Resources As of December 31, 2024, we had no employees.
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, CRE CLO Bonds, senior unsecured debt of publicly-traded REITs and CDO notes.
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.
We may invest in senior or subordinated, investment grade or non-investment grade CMBS and CRE CLO Bonds, as well as unrated CMBS and CRE CLO Bonds. Unsecured Publicly-Traded REIT Debt Securities We may also choose to acquire senior unsecured debt of publicly-traded equity REITs that acquire and hold real estate.
We may invest in senior or subordinated, investment grade or non-investment grade CMBS and CMBS bonds, as well as unrated CMBS and CMBS bonds. Unsecured Publicly-Traded REIT Debt Securities We may also choose to acquire senior unsecured debt of publicly-traded equity REITs that acquire and hold 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, CRE CLO 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.
CMBS & CRE CLO Bonds CMBS and CRE CLO 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.
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.
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 at prices that compensate the buyer for the lack of control typically associated with directly structured investments. First Mortgage Loans We primarily focus on first mortgage loans.
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.
We expect to generate additional revenues from these equity participations as a result of excess cash flows being distributed or as appreciated properties are sold or refinanced.
We expect to generate additional revenues from any equity participations in which we invest as a result of excess cash flows being distributed or as appreciated properties are sold or refinanced.
Investment Strategies and Policies We have four investment strategies. 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.
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.
The advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which together with its various subsidiaries operates as "Franklin Templeton”. The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans.
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.
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.
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.
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 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.
Borrowing Strategies and Policies Our financing strategy primarily includes the use of secured repurchase agreement facilities for loans, securities and securitizations. We have also raised capital through private placements of our equity securities.
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.
The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") securitization transactions. Historically this business has focused primarily on CMBS, commercial real estate collateralized loan obligation bonds ("CRE CLO bonds"), collateralized debt obligations ("CDOs") and other securities.
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.
Removed
As a result of the October 2021 acquisition of Capstead Mortgage Corporation ("Capstead"), the Company acquired a portfolio of residential mortgage backed securities (“RMBS”) in the form of residential adjustable-rate mortgage pass-through securities ("ARM Agency Securities" or "ARMs") issued and guaranteed by government-sponsored enterprises or by an agency of the federal government.
Added
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.
Removed
As of December 31, 2023, the Company has fully disposed of all of its ARM Agency Securities and is continuing to reinvest the proceeds from the sale of these securities in its other businesses.
Added
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.
Removed
Due to the limited opportunities in this part of the capital structure, we believe there are certain situations that allow us to directly originate or to buy subordinated mortgage investments from third parties on favorable terms.
Added
Accordingly, investors should monitor our investor relations website, in addition to following our press releases, filings with the SEC, public conference calls, presentations, and webcasts.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

87 edited+18 added−4 removed179 unchanged
Biggest changeIf the Subsidiary REIT were to fail to qualify as a REIT, then (i) it would become subject to regular U.S. federal corporate income tax, (ii) our interest in such Subsidiary REIT would cease to be a qualifying asset for purposes of the REIT asset tests, and (iii) it is possible that we would fail certain of the REIT asset tests, in which event we also would fail to qualify as a REIT unless we could avail ourselves of relief provisions. 15 Table of Contents If we were to fail to qualify as a REIT in any taxable year and are unable to avail ourselves of certain savings provisions set forth in the Internal Revenue Code, we would be subject to U.S federal and applicable state and local income tax on our taxable income at regular corporate rates.
Biggest changeIf the Subsidiary REIT were to fail to qualify as a REIT, then (i) it would become subject to regular U.S. federal corporate income tax, (ii) our interest in such Subsidiary REIT would cease to be a qualifying asset for purposes of the REIT asset tests, and (iii) it is possible that we would fail certain of the REIT asset tests, in which event we also would fail to qualify as a REIT unless we could avail ourselves of relief provisions.
The amount of such indebtedness could have material adverse consequences, including: • hindering our ability to adjust to changing market, industry or economic conditions; • limiting our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms or to fund acquisitions; • limiting the amount of cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses; • making us more vulnerable to economic or industry downturns, including interest rate increases or sustained high interest rate environments; and • placing us at a competitive disadvantage compared to less leveraged competitors.
The amount of such indebtedness could have material adverse consequences, including: • hindering our ability to adjust to changing market, industry or economic conditions; • limiting our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms or fund acquisitions; • limiting the amount of cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses; • making us more vulnerable to economic or industry downturns, including interest rate increases or sustained high interest rate environments; and • placing us at a competitive disadvantage compared to less leveraged competitors.
If we are unable to obtain additional financing, our credit ratings could be further adversely affected, which could further raise our borrowing costs and further limit our future access to capital and our ability to satisfy our obligations under our indebtedness.
If we are unable to obtain additional financing, our credit ratings could be adversely affected, which could further raise our borrowing costs and further limit our future access to capital and our ability to satisfy our obligations under our indebtedness.
Jurisdictions with one action or security first rules or anti-deficiency legislation may limit the ability to foreclose on the property or to realize the obligation secured by the property by obtaining a deficiency judgment.
Jurisdictions with one action or security first rules or anti-deficiency legislation may limit the ability to foreclose on a property or to realize the obligation secured by the property by obtaining a deficiency judgment.
We intend not to distribute “excess inclusions,” but to pay the tax on “excess inclusions” ourselves. Notwithstanding our intention to try to avoid distributions to our stockholders of “excess inclusions”, it is possible that some portion of our dividends to our stockholders may be so characterized.
We intend not to distribute “excess inclusions,” but to pay the tax on “excess inclusions” ourselves. Notwithstanding our intention to try to avoid distributions to our stockholders of “excess inclusions,” it is possible that some portion of our dividends to our stockholders may be so characterized.
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 events, treatment developments and government responses to the events.
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.
In certain prior periods, quarterly distributions have been in excess of our quarterly earnings. Distributions in excess of earnings will 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.
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.
Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. As reliance on technology in our industry has increased, so have the risks posed to the systems of our Advisor and other parties that provide us with services essential to our operations, both internal and outsourced.
Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. As reliance on technology in our industry has increased, so have the risks posed to the systems of our Advisor and other parties that provide us or the Advisor with services essential to our operations, both internal and outsourced.
Our operating results may be adversely affected by a number of risks generally incident to holding 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; • 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 particular 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 my 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 which allow work from remote locations other than the employer’s office premises; 7 Table of Contents • 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 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.
We may also be subject to environmental liabilities arising from such properties acquired in the foreclosure process. In addition, at such time that we elect to sell such property, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our cost basis, resulting in a loss to us.
We may also be subject to environmental liabilities arising from such properties acquired in the foreclosure process. In addition, at such time that we elect to sell such foreclosed property, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our cost basis, resulting in a loss to us.
Foreclosure of a loan can be an expensive and lengthy process that could have a negative effect on our return on the foreclosed loan. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses, including but not limited to lender liability claims, in an effort to prolong the foreclosure action.
Foreclosure of a loan can be an expensive and lengthy process that can have a negative effect on our return on the foreclosed loan. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses, including but not limited to lender liability claims, in an effort to prolong the foreclosure action.
Future funding obligations subject us to significant risks that the property may have declined in value, projects to be completed with the additional funds may have cost overruns and the borrower may be unable to generate enough cash flow, or sell or refinance the property, in order to repay our commercial real estate loan due.
Future funding obligations subject us to significant risks that the property may have declined in value, projects to be completed with the additional funds may have cost overruns and the borrower may be unable to generate enough cash flow, or sell or refinance the property, to repay our commercial real estate loan due.
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 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 we, and may not be able to compete successfully for investments.
Certain provisions of Maryland law could inhibit a change in control of our Company. 14 Table of Contents Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of our then outstanding voting power of our shares or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of our then outstanding voting shares) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and special stockholder voting requirements on these combinations; and • “control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of our then outstanding voting power of our shares or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of our then outstanding voting shares) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and special stockholder voting requirements on these combinations; and • “control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
If rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of FBRT’s 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 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, the COVID-19 pandemic resulted in many governmental authorities imposing significant restrictions on businesses and individuals that triggered economic consequences, including high unemployment, later, then high inflation, that resulted in challenging operating conditions for many businesses, particularly in the retail (including restaurants), office and hospitality sectors.
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.
If our due diligence fails to identify material issues, we have 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 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.
We could determine that we need to fund more money than we originally anticipated in order to maximize the value of our investment even though there is no assurance that such determination would, in fact, be the best course of action.
We could determine that we need to fund more money than we originally anticipated to maximize the value of our investment even though there is no assurance that such determination would, in fact, be the best course of action.
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. • 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. • 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.
In the event a borrower declares bankruptcy, we may not be able to fully realize on the assets of the borrower, or the assets of the borrower may not be sufficient to fully satisfy both the first mortgage loan and our subordinate debt investment.
In the event a borrower declares bankruptcy, we may not be able to fully realize on the assets of the borrower, or the assets of that borrower may not be sufficient to fully satisfy both the first mortgage loan and our subordinate debt investment.
Our estimates and judgments are based on a number of factors, including projected cash flows from the collateral securing our commercial real estate debt, debt structure, including the availability of reserves and recourse guarantees, likelihood of repayment in full at the maturity of a loan, potential for refinancing and expected market discount rates for varying property types, loan-to-value ("LTV"), and reasonable and supportable forecasts that affect the collectability of the reported amount.
Our estimates and judgments are based on a number of factors, including projected cash flows from the collateral securing our commercial real estate debt, debt structure, including the availability of reserves and recourse guarantees, likelihood of repayment in full at the maturity of a loan, potential for refinancing and expected market discount rates for varying property types, loan-to-value (“LTV”), and reasonable and supportable forecasts that affect the collectability of the reported amount.
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 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.
Our Advisor maintains a contractual as opposed to a fiduciary relationship with us. Our Advisor’s liability is limited under our Advisor Agreement, and we have agreed to indemnify our Advisor against certain liabilities.
Our Advisor maintains a contractual as opposed to a fiduciary relationship with us. Our Advisor’s liability is limited under our Advisory Agreement, and we have agreed to indemnify our Advisor against certain liabilities.
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.
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.
In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price.
Further, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price.
CMBS and CRE CLO Bonds entitle the holders thereof to receive payments that depend primarily on the cash flow from a specified pool of commercial or multifamily mortgage loans. Consequently, CMBS and CRE CLO Bonds may be adversely affected by payment defaults, delinquencies and losses on the underlying commercial real estate loans.
CMBS and CMBS bonds entitle the holders thereof to receive payments that depend primarily on the cash flow from a specified pool of commercial or multifamily mortgage loans. Consequently, CMBS and CMBS bonds may be adversely affected by payment defaults, delinquencies and losses on the underlying commercial real estate loans.
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 Advisory 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 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).
We acquire and originate subordinate commercial real estate debt, including subordinate mortgage and mezzanine loans and participations in such loans. These types of investments may involve a higher degree of risk than the type of assets that will constitute the majority of our commercial real estate debt investments, namely first mortgage loans secured by real property.
We acquire and originate subordinate commercial real estate debt, including subordinate mortgage and mezzanine loans and participations in such loans. These types of investments may involve a higher degree of risk than the type of assets that constitute the majority of our commercial real estate debt investments, first mortgage loans secured by real property.
We directly or indirectly utilize non‑recourse securitizations, and such structures expose us to risks that could result in losses to us.
We directly and indirectly utilize non‑recourse securitizations, and such structures expose us to risks that could result in losses to us.
In general, under applicable Treasury Regulations if a loan is secured by real property and other property and the highest principal amount 17 Table of Contents of the loan outstanding during a taxable year exceeds the fair market value of the real property securing the loan determined as of the date we agreed to acquire the loan or the date we significantly modified the loan, a portion of the interest income from such loan will not be qualifying income for purposes of the REIT 75% gross income test, but will be qualifying income for purposes of the REIT 95% gross income test.
In general, under applicable Treasury Regulations if a loan is secured by real property and other property and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property securing the loan determined as of the date we agreed to acquire the loan or the date we significantly modified the loan, a portion of the interest income from such loan will not be qualifying income for purposes of the REIT 75% gross income test, but will be qualifying income for purposes of the REIT 95% gross income test.
Furthermore, if the rental and leasing markets deteriorate, it could reduce cash flow from the loan pools underlying our CMBS and CRE CLO Bonds investments. The CMBS and CRE CLO Bonds market is dependent upon liquidity for refinancing and could be negatively impacted by a slowdown in the new issue CMBS and CRE CLO Bonds market.
Furthermore, if the rental and leasing markets deteriorate, it could reduce cash flow from the loan pools underlying our CMBS and CMBS bonds investments. The CMBS and CMBS bonds market is dependent upon liquidity for refinancing and could be negatively impacted by a slowdown in the new issue CMBS and CMBS bonds market.
Additionally, CMBS and CRE CLO Bonds are subject to particular risks, including lack of standardized terms and payment of all or substantially all of the principal only at maturity rather than regular amortization of principal. Additional risks may be presented by the type and use of a particular commercial property.
Additionally, CMBS and CMBS bonds are subject to particular risks, including lack of standardized terms and payment of all or substantially all of the principal only at maturity rather than regular amortization of principal. Additional risks may be presented by the type and use of a particular commercial property.
These risks could cause us to have to fund more money than we originally anticipated in order to complete the project. We may also suffer losses on our commercial real estate debt if the developer is unable to sell the project or refinance our commercial real estate debt investment.
These risks could cause us to have to fund more money than we originally anticipated to complete the project. We may also suffer losses on our commercial real estate debt if the developer is unable to sell the project or refinance our commercial real estate debt investment.
The exercise of remedies and successful realization of liquidation proceeds relating to CMBS and CRE CLO Bonds may be highly dependent upon the performance of the servicer or special servicer. Expenses of enforcing the underlying commercial real estate loans (including litigation expenses) and expenses of protecting the properties securing the commercial real estate loans may be substantial.
The exercise of remedies and successful realization of liquidation proceeds relating to CMBS and CMBS bonds may be highly dependent upon the performance of the servicer or special servicer. Expenses of enforcing the underlying commercial real estate loans (including litigation expenses) and expenses of protecting the properties securing the commercial real estate loans may be substantial.
If the terms of our debt investments and the mortgage loans underlying our CMBS are "significantly modified" in a manner that does not qualify for the safe harbor in Revenue Procedure 2014-51 and the fair market value of the real property securing such loans has decreased significantly, we could fail the REIT 75% gross income test, the 75% asset test and/or the 10% Value Test.
If the terms of our debt investments and the mortgage loans underlying our CMBS are “significantly modified” in a manner that does not qualify for the safe harbor in Revenue Procedure 2014-51 and the fair market value of the real property securing such loans has decreased significantly, we could fail the REIT 75% gross income test, the 75% asset test and/or the 10% Value Test.
We invest in a variety of CMBS and CRE CLO Bonds, which may include subordinate securities that are subject to the first risk of loss if any losses are realized on the underlying mortgage loans.
We invest in a variety of CMBS and CMBS bonds, which may include subordinate securities that are subject to the first risk of loss if any losses are realized on the underlying mortgage loans.
In addition, real properties with subordinate debt may have higher loan-to-value ratios than conventional debt, resulting in less equity in the real property and increasing the risk of loss of principal and interest. 8 Table of Contents We may be subject to risks associated with construction lending, such as declining real estate values, cost overruns and delays in completion.
In addition, real properties with subordinate debt may have higher loan-to-value ratios than conventional debt, resulting in less equity in the real property and increasing the risk of loss of principal and interest. We may be subject to risks associated with construction lending, such as declining real estate values, cost overruns and delays in completion.
Department of Treasury regulations ("Treasury Regulations"). Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests.
Department of Treasury regulations (“Treasury Regulations”). Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests.
The “taxable mortgage pool” rules may increase the taxes that we or our stockholders incur, and may limit the manner in which we effect future securitizations . 16 Table of Contents Securitizations in the form of bonds or notes secured principally by mortgage loans generally result in the creation of taxable mortgage pools (“TMPs”) for U.S. federal income tax purposes.
The “taxable mortgage pool” rules may increase the taxes that we or our stockholders incur, and may limit the manner in which we effect future securitizations . Securitizations in the form of bonds or notes secured principally by mortgage loans generally result in the creation of taxable mortgage pools (“TMPs”) for U.S. federal income tax purposes.
In addition, the value of CMBS and CRE CLO Bonds may change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole.
In addition, the value of CMBS and CMBS bonds may change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole.
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 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.
If we originate or acquire commercial real estate debt investments and there are defaults under those debt investments, we may not be able to repossess and sell the properties securing the commercial real estate debt investment quickly.
When we originate or acquire commercial real estate debt investments and there are defaults under those debt investments, we may not be able to repossess and sell the properties securing the commercial real estate debt investment quickly.
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.
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.
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.
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.
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.
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.
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.
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.
Moreover, the CECL model created more volatility in the 11 Table of Contents 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.
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.
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 and decrease the value of the property. We invest in CMBS and CRE CLO 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 may include subordinate securities, which entails certain risks.
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 contract with the Advisor for cause are limited and do not include performance.
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.
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.
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.
In making the assessment and otherwise conducting customary due diligence, we rely on the resources available to us and, in some cases, an investigation by third parties. This process is particularly important with respect to newly organized or private entities because there may be 10 Table of Contents little or no information publicly available about the entity.
In making the assessment and otherwise conducting customary due diligence, we rely on the resources available to us and, in some cases, an investigation by third parties. This process is particularly important with respect to newly organized or private entities because there may be little or no information publicly available about the entity.
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.
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.
These economic 12 Table of Contents losses will be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely impact our financial condition.
These economic losses will be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could adversely impact our financial condition.
For example: • In order to qualify as a REIT, we must distribute annually at least 90% of our "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders.
For example: • In order to qualify as a REIT, we must distribute annually at least 90% of our “REIT taxable income” (determined before the deduction of dividends paid and excluding net capital gains) to our stockholders.
The non-qualifying portion of such a loan would be subject to, among other requirements, the requirement that a REIT not hold securities possessing more than 10% of the total value of the outstanding securities of any one issuer ("10% Value Test").
The non-qualifying portion of such a loan would be subject to, among other requirements, the requirement that a REIT not hold securities possessing more than 10% of the total value of the outstanding securities of any one issuer (“10% Value Test”).
Our ability to execute this strategy depends on various conditions in the financing markets that are beyond our control, including liquidity, fluctuations in prevailing interest rates and credit spreads. Interest rate and credit spread fluctuations resulting in our interest and related expense exceeding interest and related income would result in operating losses 5 Table of Contents for us.
Our ability to execute this strategy depends on various conditions in the financing markets that are beyond our control, including liquidity, fluctuations in prevailing interest rates and credit spreads. Interest rate and credit spread fluctuations resulting in our interest and related expense exceeding interest and related income would result in operating losses for us.
In general, the availability of attractive investment opportunities and, consequently, our operating results, will be affected by the level and volatility of interest rates, conditions in the financial markets, general economic conditions, the demand for investment opportunities in our target assets and the supply of capital for such investment opportunities.
In general, the availability of attractive investment opportunities and, consequently, our operating results, is affected by the level and volatility of interest rates, conditions in the financial markets, general economic conditions, the demand for investment opportunities in our target assets and the supply of capital for such investment opportunities.
In addition, the risk of a cyber- 18 Table of Contents incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
In addition, the risk of a cyber-incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
An inability to successfully access the capital markets could limit our ability to grow our business and fully execute our business strategy and could decrease our earnings and liquidity. Additional equity issuances in the capital markets on unfavorable terms could also be dilutive to our 6 Table of Contents existing stockholders.
An inability to successfully access the capital markets could limit our ability to grow our business and fully execute our business strategy and could decrease our earnings and liquidity. Additional equity issuances in the capital markets on unfavorable terms could also be dilutive to our existing stockholders.
We have in the past and we may in the future be forced to operate any foreclosed properties for a substantial period of time, which can be a distraction for our management team and may require us to pay significant costs associated with such property.
We have in the past and we may in the future be forced to operate foreclosed properties for a substantial period, which can be a distraction for our management team and may require us to pay significant costs associated with such properties.
Under the Internal Revenue Code, if the terms of a loan are modified in a manner constituting a "significant modification," such modification triggers a deemed exchange of the original loan for the modified loan.
Under the Internal Revenue Code, if the terms of a loan are modified in a manner constituting a “significant modification,” such modification triggers a deemed exchange of the original loan for the modified loan.
As a result, we may not be able to leverage our assets as fully as we would like, which could reduce our return on assets. In the event that we are unable to meet these collateral obligations, our financial condition could deteriorate rapidly.
As a result, we may not be able to leverage our assets as fully as we would like, which could reduce our return on assets. If we are unable to meet these collateral obligations, our financial condition could deteriorate rapidly.
These actions directly and indirectly adversely effected the financing markets as well and resulted in margin calls from our lenders, which we satisfied.
These actions directly and indirectly adversely affected the financing markets and resulted in margin calls from our lenders, which we satisfied.
We ordinarily do not have the right to appoint the directing certificate holder. 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 collateralized debt obligations ("CDOs") and such investments involve significant risks.
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.
We pay the Advisor a base management fee regardless of our performance and an incentive fee that is based on our performance. Since the base management fee is based on total stockholder equity, the Advisor may be incentivized to focus on strategies that increase our equity even when doing so will not optimize the returns for our stockholders.
Since the base management fee is based on total stockholder equity, the Advisor may be incentivized to focus on strategies that increase our equity even when doing so will not optimize the returns for our stockholders.
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.
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.
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.
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.
Further information relating to cybersecurity risk management is discussed in Item 1C. "Cybersecurity" in this report. We are subject to risks from natural disasters such as earthquakes and severe weather, including as the result of global climate changes, which may result in damage to the properties securing our loans.
We are subject to risks from natural disasters such as earthquakes and severe weather, including as the result of global climate changes, which may result in damage to the properties securing our loans.
Although the Advisor and other parties that provide us with services essential to our operations intend to continue to implement industry-standard security measures, there can be no assurance that those measures will be sufficient, and any material adverse effect experienced by the Advisor and other parties that provide us with services essential to our operations could, in turn, have an adverse impact on us.
Although the Advisor and other parties that provide us with services essential to our operations intend to continue to implement industry-standard security measures, there can be no assurance that those measures will be sufficient.
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.
The REIT provisions of the Internal Revenue Code may limit our ability to effectively hedge our assets and operations.
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.
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 Advisor and its employees face competing demands relating to their time, and this may cause our operating results to suffer. The Advisor and its employees are engaged in investment and investment management activities unrelated to us. We cannot provide any assurances regarding the amount of time our Advisor and its employees will dedicate to the management of our business.
The Advisor and its employees face competing demands relating to their time, and this may cause our operating results to suffer. The Advisor and its employees are engaged in investment and investment management activities unrelated to us, including with respect to the Other Funds.
The incentive fee may create an incentive for our Advisor to invest in assets with higher yield potential, which are generally riskier or more speculative, or sell an asset prematurely for a gain, in an effort to increase our short-term net income and thereby increase the incentive fees to which it is entitled. 13 Table of Contents Our Advisor manages our portfolio pursuant to broad investment guidelines and is not required to seek the approval of our board of directors for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier loans and other investments and which could materially and adversely affect us.
Our Advisor manages our portfolio pursuant to broad investment guidelines and is not required to seek the approval of our board of directors for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier loans and other investments and which could materially and adversely affect us.
Climate change may exacerbate the frequency and severity of these types of events. We may not require borrowers to obtain certain types of insurance if it is deemed commercially unreasonable. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might result in insurance proceeds being inadequate to replace a property if it is damaged or destroyed.
Inflation, changes in building codes and ordinances, environmental considerations and other factors also might result in insurance proceeds being inadequate to replace a property if it is damaged or destroyed.
We may not control the special servicing of the mortgage loans underlying the CMBS and CRE CLO Bonds in which we invest and, in such cases, the special servicer may take actions that could adversely affect our interests. 9 Table of Contents Overall control over the special servicing of the underlying mortgage loans of the CMBS and CRE CLO Bonds may be held by a directing certificate holder, which is appointed by the holders of the most subordinate class of such CMBS and CRE CLO Bonds.
We may not control the special servicing of the mortgage loans underlying the CMBS and CMBS bonds in which we invest and, in such cases, the special servicer may take actions that could adversely affect our interests.
We may be unable to restructure loans in a manner that we believe maximizes value, particularly if we are one of multiple creditors in large capital structures. In the current environment, in order to maximize value we may be more likely to extend and work out a loan, rather than pursue foreclosure.
In order to maximize value in the current environment, we may be more likely to extend and work out a loan, rather than pursue foreclosure.
Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. If this occurs, the returns on our investments may suffer. The fee structure set forth in the Advisory Agreement may not create proper incentives for the Advisor.
Consequently, we may not receive the level of support and assistance that we otherwise might receive if we were internally managed. Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. If this occurs, the returns on our investments may suffer.
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.
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.
Our success depends on the availability of attractive investment opportunities. 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 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.
We rely on the Advisor and the executive officers and other key real estate professionals at our Advisor to identify suitable investment opportunities for us.
We rely on the Advisor and the executive officers and other key real estate professionals employed by our Advisor to identify suitable investment opportunities for us. The Advisor and its employees are subject to very limited restrictions on engaging in investment and investment management activities that are unrelated to us and compete with us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFranklin Templeton also maintains cybersecurity insurance providing coverage for certain costs related to security failures and specified cybersecurity-related incidents that interrupt our network or networks of our vendors, in all cases up to specified limits and subject to certain exclusions. 20 Table of Contents Detection and Analysis Cybersecurity incidents may be detected through a variety of means, which may include, but are not limited to, automated event-detection notifications or similar technologies which are monitored by the Franklin Templeton cyber defense team, notifications from employees, borrowers or service providers, and notifications from third party information technology system providers.
Biggest changeDetection and Analysis Cybersecurity incidents may be detected through a variety of means, which may include, but are not limited to, automated event-detection notifications or similar technologies which are monitored by the Franklin Templeton cyber defense team, notifications from employees, borrowers or service providers, and notifications from third party information technology system providers.
Franklin Templeton and the Advisor recognize that threat actors frequently target employees to gain unauthorized access to information systems. Therefore, a key element of their prevention efforts is employee training on their data privacy and cyber security procedures. For example, all new hires receive mandatory privacy and information security training.
Franklin Templeton and the Advisor recognize that threat actors frequently target employees to gain unauthorized access to information systems. Therefore, a key element of their prevention efforts is employee training on their data privacy and cyber security procedures. For example, new hires receive mandatory privacy and information security training.
In addition, the Audit Committee approved a Company policy that supplements the Franklin Templeton incident response plan with respect to cybersecurity incidents that have or are expected to impact the Company, including by impacting the Advisor’s ability to provide services to the Company pursuant to the Advisory Agreement.
In addition, the Audit Committee approved a Company policy that supplements the Franklin Templeton incident response plan with respect to cybersecurity incidents that have impacted or are expected to impact the Company, including by impacting the Advisor’s ability to provide services to the Company pursuant to the Advisory Agreement.
Franklin Templeton also has a comprehensive threat intelligence program that performs proactive analyses leveraging internal, government and third party provided intelligence to identify and mitigate risks to the firm.
Franklin Templeton also has a threat intelligence program that performs proactive analyses leveraging internal, government and third party provided intelligence to identify and mitigate risks to the firm.
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 28 years of experience in the information technology and cybersecurity field and has been at Franklin Templeton for 12 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 30 years of experience in the information technology and cybersecurity field and has been at Franklin Templeton for 13 years.
In addition, current employees of the Advisor must complete mandatory annual cybersecurity and data trainings, which are supplemented by regular phishing and other cyber-related testing and trainings that we conduct throughout the year.
In addition, current employees of the Advisor must complete mandatory annual cybersecurity and data trainings, which are supplemented by regular phishing and other cyber-related awareness activities and trainings that we conduct throughout the year.
As part of these efforts, Franklin Templeton periodically engages consultants (e.g., Cobalt, Crowdstrike and EY) to conduct external reviews of its vulnerabilities, including penetration testing and compromise assessments. Franklin Templeton employs best practice identity and access management including broad adoption of multifactor authentication, geo-location blocking, behavior analytics and controls aligned to a zero trust model.
As part of these efforts, Franklin Templeton periodically engages consultants to conduct external reviews of its vulnerabilities, including penetration testing and compromise assessments. Franklin Templeton employs identity and access management including broad adoption of multifactor authentication, geo-location blocking, behavior analytics and controls aligned to a zero trust model.
Once a potential cybersecurity incident is identified, including a third party cybersecurity event, the incident response team designated pursuant to the Franklin Templeton incident response plan follows the procedures set forth in the plan to investigate the potential incident, including determining the nature of the event (e.g. ransomware or personal data breach) and assessing the severity of the event and sensitivity of any compromised data.
Once a potential cybersecurity incident is identified, including a third party cybersecurity event, the incident response team designated pursuant to the Franklin Templeton incident response plan follows the procedures set forth in the plan to investigate the potential incident, including determining the nature of the event and assessing the severity of the event..
As discussed above, to support its preparedness Franklin Templeton has an incident response plan that it regularly updates. In addition, Franklin Templeton performs regularly scheduled tabletop exercises and periodic drills at least once a year to test its incident response procedures, identify improvement opportunities and exercise team preparedness.
In addition, Franklin Templeton performs regularly scheduled tabletop exercises and periodic drills at least once a year to test its incident response procedures, identify improvement opportunities and exercise team preparedness.
The CISO provides regular briefings for our senior management team on cybersecurity matters, including threats, events, and program enhancements. 19 Table of Contents In the event of an incident which jeopardizes the confidentiality, integrity, or availability of the information technology systems the Advisor uses to provide services to us pursuant to the Advisory Agreement, Franklin Templeton’s cybersecurity team utilizes a regularly updated cybersecurity incident response plan that was developed based on, and is periodically benchmarked to, applicable third-party cybersecurity standards and frameworks.
In the event of an incident which jeopardizes the confidentiality, integrity, or availability of the information technology systems the Advisor uses to provide services to us pursuant to the Advisory Agreement, Franklin Templeton’s cybersecurity team utilizes a regularly updated cybersecurity incident response plan that was developed based on, and is periodically benchmarked to, applicable third-party cybersecurity standards and frameworks.
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.
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.
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.
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.
We recognize that third parties that provide information systems used by the Advisor to provide services to the Company can be subject to cybersecurity incidents that could impact the Company.
We recognize that third parties that provide information systems used by the Advisor to provide services to the Company can be subject to cybersecurity incidents that could impact the Company. To mitigate third party risk, Franklin Templeton requires third party vendors to comply with our confidentiality, security, and privacy requirements.
Eradication and recovery activities depend on the nature of the cybersecurity incident and may include rebuilding systems and/or hosts, replacing compromised files with clean versions, validation of files or data that may have been affected, and increased network monitoring or logging to identify recurring attacks.
Eradication and recovery activities depend on the nature of the cybersecurity incident and may include rebuilding systems and/or hosts, replacing compromised files with clean versions or validation of files or data that may have been affected. Franklin Templeton has relationships with a number of third party service providers to assist with cybersecurity containment and remediation efforts.
Containment, Eradication, Recovery, and Reporting In the event of a cybersecurity incident, the Franklin Templeton incident response team is initially focused on containing the cybersecurity incident as quickly as possible consistent with the procedures in the incident response plan.
Containment, Eradication, Recovery, and Reporting In the event of a cybersecurity incident, the Franklin Templeton incident response team is responsible for deciding on a containment strategy to respond to the cybersecurity incident consistent with the procedures in the incident response plan. Once a cybersecurity incident is contained the focus shifts to remediation.
Following the conclusion of an incident, the Franklin Templeton incident response team will generally reassess the effectiveness of the cybersecurity program and incident response plan, make adjustments as appropriate and report to our senior management and Audit Committee on these matters.
Following 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.
Removed
To mitigate third party risk, Franklin Templeton maintains a vendor code of conduct, which is designed to require third party vendors to comply with our requirements for maintenance of passwords, as well as other confidentiality, security, and privacy procedures. Third-party IT vendors are also subject to additional diligence such as questionnaires and inquiries.
Added
The CISO provides regular briefings for our senior management team on cybersecurity matters, including threats, events, and program enhancements.
Removed
Containment procedures may include off-lining systems, including by disconnecting network cable, utilizing network-management tools to isolate the host, altering the DNS entry of impact hosts, and coordinating with service providers. Once a cybersecurity incident is contained the focus shifts to remediation.
Added
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.
Removed
Franklin Templeton has relationships with a number of third party service providers to assist with cybersecurity containment and remediation efforts, including a forensic investigation firm, a ransomware recovery vendor, a communications firm, and various law firms.
Added
Franklin Templeton also maintains cybersecurity insurance providing coverage for certain costs related to security failures and specified cybersecurity-related incidents that interrupt our network or networks of our vendors, in all cases up to specified limits and subject to certain exclusions.
Removed
Cybersecurity Risks As of December 31, 2023, we are not aware of any material cybersecurity incidents that impacted the Company in the last three years.
Removed
Although the Advisor and Franklin Templeton, on our behalf, make efforts to maintain the security and integrity of the information technology systems the Advisor uses on our behalf, these systems and the proprietary, confidential and personal information that resides on or is transmitted through them are subject to the risk of a security incident or disruption, and there can be no assurances regarding our security efforts and measures or those of our third party providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our headquarters are located in a leased space at 1345 Avenue of the Americas, Suite 32A, New York, New York 10105. 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.
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.
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, 2023 . 21
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 .
Added
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

2 edited+1 added−0 removed2 unchanged
Biggest changeThe Company is marketing the Collateral Properties for sale and is actively pursuing 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. Not applicable. 22 Table of Contents PART II
Biggest changeThe 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 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.
Item 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.
Added
Not applicable. 22 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−3 removed8 unchanged
Biggest changeThe Company's share repurchase program does not obligate the Company to acquire any particular amount of common stock. The Company’s share repurchase program has been extended until at least December 31, 2024, or until the capital committed to the repurchase program has been exhausted, whichever is sooner.
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.
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, 2023.
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.
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 FBRT $ 100.00 $ 89.91 $ 85.93 $ 100.10 FTSE Mortgage REIT Index $ 100.00 $ 94.70 $ 69.74 $ 80.34 S&P 1500 $ 100.00 $ 105.52 $ 85.11 $ 108.79 Bloomberg Mortgage Index $ 100.00 $ 94.80 $ 71.69 $ 82.07 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. 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.
Stock Performance Graph Our common stock began trading on the NYSE under the symbol “FBRT” as of October 19, 2021.
Stock Performance Graph Our common stock began trading on the NYSE under the symbol “FBRT” on October 19, 2021.
Holders As of February 7, 2024, we had 3,104 registered holders of our common stock. The 3,104 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, 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.
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 7, 2024, the last sales price for our common stock on the NYSE was $12.26 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, 2025, the last sales price for our common stock on the NYSE was $13.21 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 graph also includes a comparison against the Bloomberg Mortgage Index for reference.
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.
As of February 7, 2024, $35.2 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] 25 Table of Contents
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
Removed
In prior years, the Company compared its stockholder return to the Bloomberg REIT Mortgage Index (the "Bloomberg Mortgage Index"), a published industry index , but has decided to discontinue the use of the Bloomberg Mortgage Index as a comparison tool as Bloomberg has announced that the Bloomberg Mortgage Index should no longer be used for financial benchmarking purposes.
Added
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.
Removed
Repurchases under the share repurchase program may be suspended from time to time at the Company’s discretion without prior notice. 24 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, 2023 (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, 2023 - October 31, 2023 251,397 $ 12.46 251,397 36,128 November 1, 2023 - November 30, 2023 16,571 12.69 16,571 35,917 December 1, 2023 - December 31, 2023 — — — 35,917 Total 267,968 $ 12.47 267,968 $ 35,917 _______________________ (1) The average price paid per share represents the average purchase price per share, inclusive of any broker’s fees or commissions.
Removed
(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. Subsequent to December 31, 2023, the Company repurchased 56,323 shares of common stock at a weighted average cost of $12.52 per share.

Item 7. Management's Discussion & Analysis

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

116 edited+34 added−37 removed58 unchanged
Biggest changeAs of December 31, 2023 and 2022, our commercial mortgage loans, held for investment, excluding commercial mortgage loans on non-performing status, had a weighted average coupon of 9.2% and 8.3% and a weighted average remaining life of 0.9 years and 1.4 years, respectively. 37 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, 2023 and 2022: 38 Table of Contents (1) Regions included: New England, Plains, Rocky Mountain An investments region classification is defined according to the below map based on the location of investments secured property. 39 Table of Contents 40 Table of Contents The following charts show the par value by contractual maturity year for the investments in our portfolio as of December 31, 2023 and 2022: 41 Table of Contents The following table shows selected data from our commercial mortgage loans, held for investment in our portfolio as of December 31, 2023 (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 3 Hospitality Wisconsin $4,586 $4,586 11/30/2017 3/9/2024 Adj. 1M SOFR Term + 4.00% 9.47% 77.0% Senior Debt 2 3 Multifamily Ohio 35,212 35,212 4/23/2018 9/9/2025 1M SOFR Term + 4.50% 9.85% 83.6% Senior Debt 3 2 Hospitality Louisiana 21,796 21,796 6/28/2018 3/9/2025 1M SOFR Term + 4.25% 9.60% 68.8% Senior Debt 4 2 Office New Jersey 13,937 13,937 8/28/2018 9/9/2024 1M SOFR Term + 5.50% 10.85% 70.0% Senior Debt 5 2 Office Maryland 41,185 41,185 4/30/2019 5/9/2025 1M SOFR Term + 3.56% 8.91% 71.0% Senior Debt 6 4 Hospitality Texas 18,398 18,398 7/18/2019 1/9/2024 1M SOFR Term + 3.84% 9.19% 62.6% Senior Debt 7 2 Hospitality Michigan 12,900 12,900 9/17/2019 10/9/2025 1M SOFR Term + 4.41% 9.76% 56.4% Senior Debt 8 2 Hospitality New York 4,805 4,805 7/9/2019 7/9/2025 1M SOFR Term + 5.25% 10.60% 47.7% Senior Debt 9 2 Office Arizona 14,852 14,852 11/22/2019 12/9/2024 1M SOFR Term + 4.00% 9.35% 70.9% Senior Debt 10 4 Office Georgia 24,444 24,442 12/17/2019 1/9/2025 Adj. 1M SOFR Term + 4.35% 9.82% 64.9% Senior Debt 11 2 Manufactured Housing Arkansas 1,301 1,301 4/22/2020 5/9/2025 5.50% 5.50% 62.8% Senior Debt 12 3 Self Storage New York 27,440 27,440 9/3/2020 1/9/2026 Adj. 1M SOFR Term + 5.00% 10.47% 58.8% Senior Debt 13 3 Office Texas 17,103 17,103 10/6/2020 10/9/2025 Adj. 1M SOFR Term + 4.50% 9.97% 47.9% Senior Debt 14 2 Office Massachusetts 63,274 63,146 10/8/2020 10/9/2025 5.15% 5.15% 52.5% Senior Debt 15 3 Office Michigan 30,186 30,186 10/14/2020 7/9/2025 1M SOFR Term + 2.81% 8.16% 66.0% Senior Debt 16 2 Office Texas 9,175 9,175 11/6/2020 11/9/2025 Adj. 1M SOFR Term + 5.00% 10.47% 67.8% Senior Debt 17 2 Multifamily Texas 12,550 12,547 1/22/2021 2/9/2026 Adj. 1M SOFR Term + 4.55% 10.02% 73.0% Senior Debt 18 2 Multifamily Florida 21,000 21,000 12/31/2020 1/9/2025 Adj. 1M SOFR Term + 4.60% 10.07% 66.7% Senior Debt 19 2 Office California 10,855 10,855 12/31/2020 1/9/2024 1M SOFR Term + 5.56% 10.91% 63.9% Senior Debt 20 4 Office Colorado 44,913 44,892 3/1/2021 3/9/2026 Adj. 1M SOFR Term + 3.97% 9.43% 53.9% Senior Debt 21 3 Multifamily Arizona 34,476 34,457 2/2/2021 2/9/2026 1M SOFR Term + 8.00% 13.35% N/A Senior Debt 22 2 Hospitality North Carolina 23,000 22,992 2/24/2021 3/9/2024 Adj. 1M SOFR Term + 5.79% 11.26% 57.2% Senior Debt 23 2 Multifamily Texas 34,750 34,750 3/5/2021 3/9/2024 1M SOFR Term + 4.10% 9.45% 78.2% Senior Debt 24 3 Multifamily Texas 55,000 55,000 3/16/2021 5/9/2026 1M SOFR Term + 4.00% 9.35% 71.6% Senior Debt 25 2 Multifamily Texas 14,700 14,696 3/15/2021 4/9/2026 Adj. 1M SOFR Term + 3.39% 8.86% 70.6% Senior Debt 26 2 Multifamily Pennsylvania 8,898 8,893 3/23/2021 4/9/2026 Adj. 1M SOFR Term + 3.80% 9.27% 69.9% Senior Debt 27 2 Multifamily Texas 19,804 19,798 3/25/2021 4/9/2026 Adj. 1M SOFR Term + 3.60% 9.07% 70.8% Senior Debt 28 2 Multifamily Texas 43,246 43,237 4/1/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 8.42% 71.6% Senior Debt 29 2 Hospitality Louisiana 25,700 25,700 4/15/2021 5/9/2026 Adj. 1M SOFR Term + 5.60% 11.07% 61.0% Senior Debt 30 2 Mixed Use Washington 32,500 32,500 6/30/2021 1/9/2026 Adj. 1M SOFR Term + 3.70% 9.17% 69.7% Senior Debt 31 2 Multifamily Texas 75,927 75,901 3/31/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 8.42% 72.6% Senior Debt 32 3 Multifamily Texas 20,450 20,426 4/22/2021 5/9/2026 Adj. 1M SOFR Term + 3.60% 9.07% 67.7% Senior Debt 33 2 Multifamily Texas 30,320 30,310 3/31/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 8.42% 70.4% Senior Debt 34 2 Multifamily Texas 35,466 35,459 4/1/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 8.42% 71.7% 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 35 2 Multifamily Texas 33,588 33,582 4/1/2021 4/9/2026 Adj. 1M SOFR Term + 2.95% 8.42% 72.2% Senior Debt 36 2 Multifamily Florida 152,112 151,644 5/26/2021 6/9/2026 1M SOFR Term + 4.55% 9.90% 47.8% Senior Debt 37 2 Hospitality Florida 36,750 36,713 5/20/2021 6/9/2026 Adj. 1M SOFR Term + 6.25% 11.72% 59.2% Senior Debt 38 2 Multifamily North Carolina 35,116 34,990 7/22/2021 3/9/2027 Adj. 1M SOFR Term + 8.00% 13.47% N/A Senior Debt 39 2 Multifamily Texas 16,453 16,453 10/6/2021 10/9/2026 Adj. 1M SOFR Term + 3.75% 9.22% 76.9% Senior Debt 40 2 Multifamily Pennsylvania 47,984 47,901 9/10/2021 10/9/2026 Adj. 1M SOFR Term + 3.15% 8.62% 71.0% Senior Debt 41 2 Multifamily South Carolina 41,650 41,650 9/2/2021 9/9/2025 Adj. 1M SOFR Term + 3.40% 8.87% 79.9% Senior Debt 42 3 Multifamily Texas 34,760 34,713 9/20/2021 10/9/2024 Adj. 1M SOFR Term + 3.64% 9.11% 66.0% Senior Debt 43 2 Multifamily Oregon 8,500 8,489 9/8/2021 9/9/2026 Adj. 1M SOFR Term + 3.75% 9.22% 79.4% Senior Debt 44 2 Multifamily Texas 14,890 14,890 9/9/2021 9/9/2026 Adj. 1M SOFR Term + 3.15% 8.62% 79.8% Senior Debt 45 2 Multifamily South Carolina 69,500 69,312 9/20/2021 10/9/2026 Adj. 1M SOFR Term + 3.25% 8.72% 77.1% Senior Debt 46 2 Multifamily Georgia 11,325 11,306 9/22/2021 10/9/2026 Adj. 1M SOFR Term + 3.75% 9.22% 70.0% Senior Debt 47 2 Multifamily Texas 27,199 27,160 9/30/2021 10/9/2026 Adj. 1M SOFR Term + 3.20% 8.67% 77.3% Senior Debt 48 2 Hospitality Texas 17,122 17,122 9/30/2021 10/9/2026 Adj. 1M SOFR Term + 5.25% 10.72% 61.0% Senior Debt 49 2 Multifamily Texas 56,150 56,071 9/30/2021 10/9/2026 Adj. 1M SOFR Term + 3.10% 8.57% 78.9% Senior Debt 50 2 Multifamily Texas 38,242 38,116 10/14/2021 11/9/2026 Adj. 1M SOFR Term + 2.90% 8.37% 72.2% Senior Debt 51 3 Multifamily Texas 55,394 55,394 11/23/2021 1/9/2027 Adj. 1M SOFR Term + 3.10% 8.57% 67.2% Senior Debt 52 3 Multifamily Arizona 38,153 38,101 11/16/2021 12/9/2026 Adj. 1M SOFR Term + 2.90% 8.37% 72.0% Senior Debt 53 2 Multifamily Texas 68,165 68,165 10/29/2021 11/9/2026 Adj. 1M SOFR Term + 2.85% 8.32% 70.6% Senior Debt 54 2 Multifamily Texas 32,567 32,510 11/23/2021 12/9/2026 Adj. 1M SOFR Term + 3.25% 8.72% 80.0% Senior Debt 55 2 Multifamily South Carolina 61,600 61,600 11/10/2021 11/9/2026 Adj. 1M SOFR Term + 3.35% 8.82% 78.0% Senior Debt 56 2 Multifamily Texas 44,987 44,987 11/16/2021 12/9/2026 Adj. 1M SOFR Term + 3.00% 8.47% 74.8% Senior Debt 57 2 Multifamily Texas 47,147 47,019 11/9/2021 11/9/2026 Adj. 1M SOFR Term + 2.75% 8.22% 68.1% Senior Debt 58 2 Multifamily New Jersey 86,000 85,959 2/25/2022 3/9/2026 1M SOFR Term + 3.24% 8.59% 60.0% Senior Debt 59 3 Manufactured Housing Georgia 6,700 6,688 12/13/2021 12/9/2026 Adj. 1M SOFR Term + 4.50% 9.97% 77.9% Senior Debt 60 2 Multifamily Texas 58,680 58,677 12/10/2021 1/9/2027 Adj. 1M SOFR Term + 3.45% 8.92% 74.8% Senior Debt 61 2 Multifamily Georgia 26,068 26,068 11/30/2021 3/9/2024 Adj. 1M SOFR Term + 2.90% 8.37% 72.1% Senior Debt 62 2 Multifamily Kentucky 14,933 14,905 11/19/2021 12/9/2026 Adj. 1M SOFR Term + 3.20% 8.67% 62.4% Senior Debt 63 2 Multifamily Texas 38,283 38,219 11/22/2021 12/9/2026 Adj. 1M SOFR Term + 3.00% 8.47% 73.3% Senior Debt 64 4 Multifamily Texas 42,235 42,234 11/18/2021 1/9/2027 Adj. 1M SOFR Term + 2.90% 8.37% 71.7% Senior Debt 65 3 Multifamily Texas 69,415 69,415 11/30/2021 12/9/2026 Adj. 1M SOFR Term + 2.88% 8.35% 74.8% Senior Debt 66 2 Multifamily Texas 66,742 66,742 11/30/2021 12/9/2026 Adj. 1M SOFR Term + 2.88% 8.35% 75.5% Senior Debt 67 2 Multifamily Texas 17,145 17,144 12/30/2021 1/9/2027 1M SOFR Term + 3.50% 8.85% 71.7% Senior Debt 68 3 Multifamily Michigan 59,232 59,175 12/9/2021 12/9/2026 Adj. 1M SOFR Term + 2.75% 8.22% 73.9% Senior Debt 69 3 Multifamily Pennsylvania 22,240 22,239 12/16/2021 1/9/2027 1M SOFR Term + 2.96% 8.31% 79.4% Senior Debt 70 3 Multifamily Texas 25,241 25,195 12/16/2021 1/9/2027 1M SOFR Term + 2.96% 8.31% 72.9% 43 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 71 2 Multifamily Texas 32,428 32,425 12/16/2021 1/9/2027 1M SOFR Term + 3.20% 8.55% 74.2% Senior Debt 72 2 Multifamily Florida 78,416 78,167 12/21/2021 1/9/2027 1M SOFR Term + 3.45% 8.80% 78.8% Senior Debt 73 2 Multifamily North Carolina 81,247 81,164 12/15/2021 1/9/2027 1M SOFR Term + 3.21% 8.56% 76.1% Senior Debt 74 2 Multifamily North Carolina 24,000 23,999 12/17/2021 1/9/2027 1M SOFR Term + 3.10% 8.45% 72.7% Senior Debt 75 2 Retail New York 31,000 30,946 12/23/2021 1/9/2027 1M SOFR Term + 3.29% 8.64% 42.5% Senior Debt 76 3 Multifamily Texas 38,511 38,511 5/12/2022 8/9/2027 1M SOFR Term + 3.55% 8.90% 66.2% Senior Debt 77 2 Multifamily Georgia 23,855 23,848 1/28/2022 2/9/2027 1M SOFR Term + 2.95% 8.30% 65.6% Senior Debt 78 2 Multifamily North Carolina 11,100 11,097 1/14/2022 2/9/2027 1M SOFR Term + 3.30% 8.65% 75.7% Senior Debt 79 3 Multifamily Texas 47,444 47,442 12/21/2021 1/9/2027 1M SOFR Term + 2.86% 8.21% 68.2% Senior Debt 80 2 Multifamily Texas 36,824 36,821 12/22/2021 1/9/2027 1M SOFR Term + 2.86% 8.21% 69.7% Senior Debt 81 2 Hospitality North Carolina 10,504 10,481 1/19/2022 2/9/2027 1M SOFR Term + 5.30% 10.65% 68.2% Senior Debt 82 2 Multifamily Florida 82,000 81,989 2/10/2022 2/9/2027 1M SOFR Term + 3.20% 8.55% 74.5% Senior Debt 83 2 Industrial Arizona 55,000 54,973 3/15/2022 3/9/2027 1M SOFR Term + 3.50% 8.85% 70.1% Senior Debt 84 2 Multifamily Texas 39,864 39,843 3/14/2022 3/9/2027 1M SOFR Term + 3.10% 8.45% 74.1% Senior Debt 85 2 Multifamily Arizona 35,220 35,202 3/2/2022 3/9/2027 1M SOFR Term + 2.95% 8.30% 63.1% Senior Debt 86 2 Mixed Use New York 19,000 18,991 3/7/2022 3/9/2026 1M SOFR Term + 3.42% 8.78% 65.1% Senior Debt 87 2 Multifamily North Carolina 85,500 85,480 2/24/2022 3/9/2027 1M SOFR Term + 3.15% 8.50% 69.6% Senior Debt 88 2 Multifamily North Carolina 31,900 31,888 3/29/2022 4/9/2027 1M SOFR Term + 3.30% 8.65% 76.9% Senior Debt 89 2 Hospitality Colorado 30,021 29,741 5/20/2022 6/9/2027 1M SOFR Term + 7.05% 12.40% N/A Senior Debt 90 2 Multifamily Texas 13,558 12,691 7/20/2022 4/9/2027 1M SOFR Term + 6.75% 12.10% N/A Senior Debt 91 2 Hospitality Georgia 43,457 43,457 3/30/2022 4/9/2027 1M SOFR Term + 4.90% 10.25% 61.1% Senior Debt 92 2 Hospitality New York 15,634 15,568 11/8/2022 11/9/2027 1M SOFR Term + 5.34% 10.69% 57.7% Senior Debt 93 3 Multifamily Nevada 35,949 35,949 6/3/2022 6/9/2027 1M SOFR Term + 6.05% 11.40% 62.4% Senior Debt 94 3 Multifamily Virginia 56,616 56,479 4/29/2022 5/9/2027 1M SOFR Term + 3.95% 9.30% 73.2% Senior Debt 95 3 Multifamily Texas 29,905 29,816 10/21/2022 11/9/2027 1M SOFR Term + 4.00% 9.35% 70.9% Senior Debt 96 2 Multifamily North Carolina 56,859 56,806 8/23/2022 9/9/2027 1M SOFR Term + 6.70% 12.05% 46.5% Senior Debt 97 2 Multifamily Texas 12,536 12,523 5/2/2022 5/9/2027 1M SOFR Term + 3.55% 8.90% 67.7% Senior Debt 98 2 Industrial Florida 18,724 18,673 9/13/2022 9/9/2027 1M SOFR Term + 4.90% 10.25% 64.6% Senior Debt 99 2 Multifamily Tennessee 19,899 19,875 5/18/2022 6/9/2027 1M SOFR Term + 3.50% 8.85% 64.5% Senior Debt 100 3 Multifamily Texas 28,979 28,936 5/26/2022 6/9/2027 1M SOFR Term + 3.65% 9.00% 71.0% Senior Debt 101 3 Multifamily Texas 17,330 17,303 5/26/2022 6/9/2027 1M SOFR Term + 3.65% 9.00% 73.9% Senior Debt 102 2 Multifamily Georgia 70,750 70,673 5/18/2022 6/9/2027 1M SOFR Term + 3.80% 9.15% 77.9% Senior Debt 103 4 Multifamily North Carolina 83,914 83,810 6/1/2022 6/9/2027 1M SOFR Term + 3.95% 9.30% 71.8% Senior Debt 104 3 Multifamily North Carolina 45,469 45,414 6/1/2022 6/9/2027 1M SOFR Term + 3.95% 9.30% 75.9% Senior Debt 105 4 Multifamily North Carolina 58,003 57,930 6/1/2022 6/9/2027 1M SOFR Term + 3.95% 9.30% 73.7% Senior Debt 106 3 Multifamily North Carolina 20,716 20,688 6/1/2022 6/9/2027 1M SOFR Term + 3.95% 9.30% 75.1% 44 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 107 2 Multifamily Various 146,810 146,608 6/1/2022 6/9/2027 1M SOFR Term + 3.95% 9.30% 67.8% Senior Debt 108 2 Multifamily Kentucky 56,000 55,938 6/1/2022 6/9/2027 1M SOFR Term + 3.80% 9.15% 73.8% Senior Debt 109 2 Multifamily North Carolina 11,675 11,661 11/3/2022 11/9/2027 1M SOFR Term + 4.45% 9.80% 74.8% Senior Debt 110 2 Multifamily Georgia 70,750 70,569 6/14/2022 6/9/2027 1M SOFR Term + 3.45% 8.80% 71.6% Senior Debt 111 2 Hospitality District of Columbia 39,525 39,346 8/2/2022 8/9/2027 1M SOFR Term + 6.94% 12.29% 71.2% Senior Debt 112 (8) 2 Multifamily Pennsylvania — — 2/17/2023 9/9/2026 1M SOFR Term + 6.31% 11.66% N/A Senior Debt 113 2 Hospitality Alabama 16,270 16,249 9/20/2022 10/9/2027 1M SOFR Term + 5.75% 11.10% 62.1% Senior Debt 114 2 Manufactured Housing Florida 11,617 11,587 9/13/2022 9/9/2027 1M SOFR Term + 4.75% 10.10% 53.8% Senior Debt 115 (8) 2 Hospitality Texas — — 1/31/2023 11/9/2027 1M SOFR Term + 7.50% 12.85% 6.2% Senior Debt 116 2 Multifamily North Carolina 48,764 48,684 12/29/2022 1/9/2028 1M SOFR Term + 4.20% 9.55% 70.1% Senior Debt 117 2 Multifamily South Carolina 51,000 50,875 12/2/2022 12/9/2027 1M SOFR Term + 3.75% 9.10% 64.6% Senior Debt 118 2 Multifamily South Carolina 14,635 14,594 12/16/2022 1/9/2027 1M SOFR Term + 4.25% 9.60% 68.1% Senior Debt 119 2 Hospitality North Carolina 28,300 28,297 12/15/2022 1/9/2025 1M SOFR Term + 5.25% 10.60% 54.9% Senior Debt 120 2 Multifamily Arizona 55,500 55,353 4/10/2023 4/9/2026 1M SOFR Term + 3.85% 9.20% 44.7% Senior Debt 121 2 Hospitality Florida 10,500 10,465 4/4/2023 4/9/2028 1M SOFR Term + 5.50% 10.85% 39.6% Senior Debt 122 2 Hospitality Various 120,000 119,559 2/9/2023 2/9/2028 1M SOFR Term + 4.90% 10.25% 53.6% Senior Debt 123 2 Multifamily Florida 64,500 64,388 4/19/2023 5/9/2025 1M SOFR Term + 5.00% 10.35% 62.3% Senior Debt 124 2 Hospitality New York 39,549 39,661 4/17/2023 12/27/2024 1M SOFR Term + 3.75% 9.10% 39.1% Senior Debt 125 2 Multifamily District of Columbia 21,700 21,616 6/30/2023 7/9/2027 1M SOFR Term + 3.95% 9.30% 29.4% Senior Debt 126 2 Manufactured Housing Florida 21,449 21,296 7/28/2023 8/9/2028 1M SOFR Term + 4.25% 9.60% 43.2% Senior Debt 127 2 Multifamily New York 19,793 19,881 6/28/2023 7/9/2028 4.75% 4.75% 85.7% Senior Debt 128 2 Multifamily Texas 78,996 78,664 8/1/2023 8/9/2028 1M SOFR Term + 3.20% 8.55% 58.7% Senior Debt 129 2 Hospitality Florida 23,000 22,861 8/10/2023 8/9/2028 1M SOFR Term + 5.45% 10.80% 72.8% Senior Debt 130 2 Hospitality Georgia 12,420 12,322 8/17/2023 9/9/2028 1M SOFR Term + 4.85% 10.20% 53.5% Senior Debt 131 2 Multifamily Texas 38,750 38,572 10/18/2023 11/9/2026 1M SOFR Term + 4.50% 9.85% 62.4% Senior Debt 132 2 Hospitality Florida 31,300 31,078 10/17/2023 11/9/2028 1M SOFR Term + 4.25% 9.60% 48.9% Senior Debt 133 2 Multifamily Texas 42,750 42,555 10/17/2023 11/9/2026 1M SOFR Term + 3.85% 9.20% 61.4% Senior Debt 134 2 Multifamily Texas 17,119 16,966 10/12/2023 10/9/2028 1M SOFR Term + 3.20% 8.55% 55.1% Senior Debt 135 2 Multifamily Texas 21,000 20,887 12/6/2023 12/9/2026 1M SOFR Term + 3.75% 9.10% 63.6% Senior Debt 136 2 Hospitality Tennessee 41,071 40,855 11/14/2023 12/9/2028 1M SOFR Term + 3.65% 9.00% 50.0% Senior Debt 137 2 Hospitality Nevada 25,750 25,595 12/15/2023 1/9/2028 1M SOFR Term + 3.95% 9.30% 42.4% Senior Debt 138 3 Hospitality Illinois 16,566 16,563 12/4/2017 10/6/2025 5.99% 5.99% 52.9% Mezzanine Loan 1 2 Retail New York 3,000 2,994 12/23/2021 1/9/2027 1M SOFR Term + 12.00% 17.35% 46.6% Mezzanine Loan 2 2 Mixed Use New York 1,000 1,000 3/7/2022 3/9/2026 1M SOFR Term + 11.00% 16.35% 68.5% Mezzanine Loan 3 2 Hospitality New York 1,350 1,346 11/8/2022 11/9/2027 1M SOFR Term + 9.25% 14.60% 64.6% Mezzanine Loan 4 (8) 2 Hospitality Texas — — 1/31/2023 11/9/2027 1M SOFR Term + 10.00% 15.35% 6.2% Mezzanine Loan 5 3 Multifamily Ohio 2,378 2,378 3/9/2023 9/9/2025 1M SOFR Term + 4.50% 9.85% 58.2% 45 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 6 2 Multifamily District of Columbia 11,700 11,655 6/30/2023 7/9/2027 1M SOFR Term + 3.95% 9.30% 45.2% $5,045,036 $5,036,942 9.18% 65.4% _______________________ (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, 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.
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, 2023 of $3.9 million was related to the sale of $118.1 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $122.1 million.
Realized gain on commercial mortgage loans, held for sale, measured at fair value for the year ended December 31, 2023 of $3.9 million was related to the sale of $118.1 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $122.1 million.
Substantially all of our business is conducted through 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. The Company has no employees. We are managed by our Advisor pursuant to an Advisory Agreement (the "Advisory Agreement").
Substantially all of our business is conducted through 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. The Company has no employees. We are managed by our Advisor pursuant to the Advisory Agreement.
(4) Represents loan workout charges the Company incurred, which the Company deemed likely to be recovered. Reversal of loan workout charges represent recoveries received. During the second quarter of 2023, the Company recovered $5.1 million of loan workout charges, in aggregate, related to the loan workout charges incurred in 2022.
(5) Represents loan workout charges the Company incurred, which the Company deemed likely to be recovered. Reversal of loan workout charges represent recoveries received. During the second quarter of 2023, the Company recovered $5.1 million of loan workout charges, in aggregate, related to the loan workout charges incurred in 2022.
We assume our CLOs will be outstanding for four years and amortized the financing costs over four years in our distributable earnings as compared to effective yield methodology in our GAAP earnings.
We assume our CLOs will be outstanding for approximately four years and amortized the financing costs over approximately four years in our distributable earnings as compared to effective yield methodology in our GAAP earnings.
Amounts are calculated based on daily averages for the three months ended December 31, 2023 and September 30, 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. (5) Annualized.
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.
In December 2023, the Company's board of directors declared the following: (i) a fourth quarter 2023 dividend of $0.355 per share on the Company's common stock (equivalent to $1.42 per annum), (ii) a fourth quarter 2023 dividend of $106.22 per share on the Company’s Series H Preferred Stock, and (iii) a fourth quarter 2023 dividend of $0.46875 per share on the Company’s Series E Preferred Stock, all of which were paid in January 2024 to holders of record as of December 31, 2023.
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.
We have an effective shelf registration statement for offerings of equity securities that is not limited on the amount of securities we may issue. We also have authorized an at-the-market sales program ("ATM") pursuant to which we may sell up to $200 million of shares of our common stock from time to time.
We have an effective shelf registration statement for offerings of equity securities that is not limited on the amount of securities we may issue. We also have authorized an at-the-market sales program (“ATM”) pursuant to which we may sell up to $200 million of shares of our common stock from time to time.
Factors considered by the Company when determining the general allowance for credit losses reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and forward looking information through the use of projected macroeconomic scenarios over the reasonable and supportable forecasts.
Factors considered by the Company when determining the general allowance for credit losses reserve include loan-specific characteristics such as LTV ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and forward looking information through the use of projected macroeconomic scenarios over the reasonable and supportable forecasts.
As of December 31, 2023, 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, 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.
Further, Distributable Earnings helps investors evaluate performance excluding the effects of certain transactions and GAAP adjustments that the Company does not believe are necessarily indicative of current loan portfolio performance and the Company's operations and is one of the performance metrics the Company's board of directors considers when dividends are declared.
Further, Distributable Earnings to Common helps investors evaluate performance excluding the effects of certain transactions and GAAP adjustments that the Company does not believe are necessarily indicative of current loan portfolio performance and the Company's operations and is one of the performance metrics the Company's board of directors considers when dividends are declared.
Debt-to-Equity Ratio and Total Leverage Ratio The following table presents our debt-to-equity and total leverage ratios: December 31, 2023 December 31, 2022 Net debt-to-equity ratio (1) 2.3x 2.5x Total leverage ratio (2) 2.5x 2.6x ________________________ (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, 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 .
The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes. 49 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. 48 Table of Contents Distributions on our common stock are payable when declared by our board of directors.
The Company, through one or more subsidiaries which are each treated as a taxable REIT subsidiary ("TRS"), is indirectly subject to U.S. federal, state and local income taxes. We commenced business in May 2013. We primarily originate, acquire and manage a diversified portfolio of commercial real estate debt investments secured by properties located within and outside of the United States.
The Company, through one or more subsidiaries which are each treated as a TRS, is indirectly subject to U.S. federal, state and local income taxes. We commenced business in May 2013. We primarily originate, acquire and manage a diversified portfolio of commercial real estate debt investments secured by properties located within and outside of the United States.
The initial term of the amended Advisory Agreement was three-years and was automatically renewed for an additional one-year period on January 19, 2024 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, 2025 and will continue to automatically renew for additional one-year periods unless either party elects not to renew.
We also may access liquidity through our dividend reinvestment and stock purchase plan ("DRIP"), which includes a direct stock purchase option. 47 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. 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.
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, 2023.
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.
The loans which have the SOFR adjustment are indicated with "Adj. 1M SOFR Term." (6) Effective yield is calculated as the spread of the loan plus the greater of the applicable index or index floor. (7) Loan-to-value percentage ("LTV") represents the ratio of the loan amount to the appraised value of the property at the time of origination.
The loans which have the SOFR adjustment are indicated with “Adj. 1M SOFR Term.” (6) Effective yield is calculated as the spread of the loan plus the greater of the applicable index or index floor. (7) LTV represents the ratio of the loan amount to the appraised value of the property at the time of origination.
During the twelve months ended December 31, 2021, the maximum monthly average outstanding balance was $5.8 billion , of which $0.7 billion was related to repurchase agreements on our commercial mortgage loans and $5.1 billion for repurchase agreements on our real estate securities.
During the twelve months ended December 31, 2024, the maximum monthly average outstanding balance was $1.1 billion, of which $0.8 billion was related to repurchase agreements on our commercial mortgage loans and $0.3 billion for repurchase agreements on our real estate securities.
(2) Excludes $495.0 million of CLO notes, held by the Company, which are eliminated in Collateralized loan obligations in the consolidated balance sheets as of December 31, 2023. In addition to its cash requirements, the Company pays a quarterly dividend and has an existing share repurchase authorization.
(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.
Unrealized Gain/(Loss) on Commercial Mortgage Loans, Held for Sale, Measured at Fair Value The Company did not have any commercial mortgage loans, held for sale, measured at fair value held in an unrealized gain or loss position as of December 31, 2023 and September 30, 2023.
Unrealized Gain/(Loss) on Commercial Mortgage Loans, Held for Sale, Measured at Fair Value The Company did not have any commercial mortgage loans, held for sale, measured at fair value held in an unrealized gain or loss position as of December 31, 2024.
The Company believes Distributable Earnings is a useful financial metric for existing and potential future holders of its common stock as historically, over time, Distributable Earnings has been an indicator of dividends per share.
The Company believes Distributable Earnings and Distributable Earnings to Common are useful financial metrics for existing and potential future holders of its common stock as historically, over time, Distributable Earnings to Common has been an indicator of common dividends per share.
As of December 31, 2023 and 2022, we had $242.6 million and $221.0 million, respectively, of real estate securities, available for sale, measured at fair value. As of December 31, 2023 and 2022, our real estate owned, held for investment portfolio was composed of three and 11 properties, respectively, with carrying values of $115.8 million and $127.8 million, respectively.
As of December 31, 2024 and 2023, we had $203.0 million and $242.6 million, respectively, of real estate securities, available for sale, measured at fair value. As of December 31, 2024 and 2023, our real estate owned, held for investment portfolio was composed of three properties, with carrying values of $113.2 million and $115.8 million, respectively.
Our current sources of near-term liquidity as of December 31, 2023 and December 31, 2022 are set forth in the following table (dollars in millions): December 31, 2023 December 31, 2022 Unrestricted cash $ 338 $ 179 CLO reinvestment available (1) 55 16 Financings available & in progress (2) 1,131 822 Total $ 1,524 $ 1,017 ________________________ (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, 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.
(2) Excluding the amounts for accumulated depreciation and amortization of real property of $9.4 million and $5.2 million as of December 31, 2023 and 2022, respectively, would result in a fully-converted book value per share of $15.88 and $15.84 as of December 31, 2023 and 2022, respectively.
(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.
Realized Gain/(Loss) on Extinguishment of Debt Realized gain on extinguishment of debt for the year ended December 31, 2023 of $2.2 million was primarily related to the redemption of $17.5 million par value unsecured debt at a price equal to 75% of par value coupled with the repurchases of $2.3 million of bonds of BSPRT 2021-FL7 and $8.25 million of bonds of BSPRT 2019-FL5 partially offset by the redemption of BSPRT 2019-FL5.
Realized gain on extinguishment of debt for the year ended December 31, 2023 of $2.2 million was primarily related to the redemption of $17.5 million par value unsecured debt at a price equal to 75% of par value coupled with the repurchase of the Class E notes in our BSPRT 2021-FL7 CLO and $8.3 million of bonds of our BSPRT 2019-FL5 CLO partially offset by the redemption of BSPRT 2019-FL5.
The Company’s Board of Directors also has authorized a $65.0 million share repurchase program, of which $35.9 million remained available as of December 31, 2023. The authorization does not obligate the Company to acquire any specific number of shares. 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 $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.
(Provision)/Benefit for Income Tax Benefit for income tax for the year ended December 31, 2023 was $2.8 million compared to a benefit of $0.4 million for the year ended December 31, 2022. The difference is due to change in taxable income/loss in our TRS segment.
(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.
Recourse net debt-to-equity ratio was 0.2x and 0.7x as of December 31, 2023 and December 31, 2022, respectively.
Recourse net debt-to-equity ratio was 0.3x and 0.2x as of December 31, 2024 and 2023, respectively.
Off Balance Sheet Arrangements We currently have no off balance sheet arrangements as of December 31, 2023 and through the date of the filing of this Form 10-K.
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.
(4) Calculated as interest income or expense divided by average carrying value. 30 Table of Contents (5) The collateral sale of a Brooklyn hotel loan in April 2023, which allowed the company to recover its full investment, resulted in $15.5 million and $4.9 million in coupon and default interest income, respectively, recognized in the Company's real estate debt segment during the year ended December 31, 2023.
(5) The collateral sale of a Brooklyn hotel loan in April 2023, which allowed the company to recover its full investment, resulted in $15.5 million and $4.9 million in coupon and default interest income, respectively, recognized in the Company's real estate debt segment during the year ended December 31, 2023.
This is compared to a net loss on our derivative portfolio of $0.1 million composed of a realized gain of $0.1 million due primarily to the termination and settlement of interest rate swap positions offset by an unrealized loss of $0.2 million for the three months ended September 30, 2023 .
This is compared to a net gain on our derivative portfolio of $0.9 million composed of a realized gain of $1.0 million due primarily to the termination and settlement of interest rate swap positions partially offset by an unrealized loss of $0.1 million for the year ended December 31, 2023.
Amounts are calculated based on daily averages for the years ended December 31, 2023 and 2022, 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.
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.
As of December 31, 2023, our portfolio consisted of (i) 144 commercial mortgage loans, held for investment and (ii) seven real estate securities, available for sale, measured at fair value.
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, 2023, our portfolio consisted of (i) 144 commercial mortgage loans, held for investment and (ii) seven real estate securities, available for sale, measured at fair value.
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.
(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 payments of the subordinated performance fee made during the period.
(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.
Realized gain on commercial mortgage loans, held for sale, measured at fair value for the three months ended September 30, 2023 of $0.9 million was related to the sale of $34.3 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $35.3 million.
Realized gain on commercial mortgage loans, held for sale, measured at fair value for the three months ended September 30, 2024 of $6.2 million was related to the sale of $131.6 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $137.8 million.
(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.
(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.
As of September 30, 2023, our portfolio consisted of (i) 145 commercial mortgage loans, held for investment, (ii) one commercial mortgage loan, held for sale, measured at fair value and (iii) six real estate securities, available for sale, measured at fair value.
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.
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, 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.
Non-GAAP Financial Measures Distributable Earnings and Run-Rate Distributable Earnings 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, derivatives and ARMs, including CECL reserves and impairments, (iii) non-cash equity compensation expense, (iv) depreciation and amortization, (v) subordinated performance fee accruals/(reversal), (vi) loan workout charges, (vii) realized gains and losses on debt extinguishment and CLO calls, (viii) actual realized cash loss on a specific real estate owned ("REO") investment, (ix) impairments of acquisition assets related to the Capstead merger and (x) 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, and (vii) certain other non-cash items.
Realized gain on commercial mortgage loans, held for sale, 31 Table of Contents measured at fair value for the year ended December 31, 2022 of $2.4 million was related to the sale of $368.9 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $370.2 million.
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.
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”).
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”).
Net Result from Derivative Transactions Net result from derivative transactions for the year ended December 31, 2023 of a $0.9 million gain was composed of a realized gain of $1.0 million due primarily to the termination and settlement of interest rate swap positions partially offset by an unrealized loss of $0.1 million.
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.
Portfolio As of December 31, 2023 and 2022, our portfolio consisted of 144 and 161 commercial mortgage loans, held for investment, respectively. The commercial mortgage loans held for investment, net of allowance for credit losses, as of December 31, 2023 and 2022 had a total carrying value of $4,989.8 million and $5,228.9 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 following tables summarize our Repo and Revolving Credit Facilities and our master repurchase agreements ("MRAs") for the years ended December 31, 2023, 2022, and 2021, respectively: 48 Table of Contents As of December 31, 2023 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements, 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 — Total $ 833,355 $ 985,032 $ 489,355 $ 473,762 $ 1,092,076 $ 1,122,843 $ 1,166,864 $ 541,937 As of December 31, 2022 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements, 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 As of December 31, 2021 Amount Outstanding Average Outstanding Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repurchase Agreements, Commercial Mortgage Loans $ 152,925 $ 287,462 $ 550,156 $ 1,019,600 $ 340,485 $ 282,891 $ 331,871 $ 959,729 Repurchase Agreements, Real Estate Securities 88,272 46,510 46,531 34,311 123,322 57,301 46,527 37,735 Repurchase Agreements, Real Estate Securities held as trading — — — 4,144,473 — — — 4,266,556 Total $ 241,197 $ 333,972 $ 596,687 $ 5,198,384 $ 463,807 $ 340,192 $ 378,398 $ 5,264,020 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, 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 table provides a reconciliation of GAAP net income to Distributable Earnings for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands): Year Ended December 31, 2023 2022 2021 GAAP Net Income $ 144,509 $ 14,215 $ 25,702 Adjustments: Depreciation and amortization 7,128 5,408 2,107 Impairment of Acquired Assets — — 88,282 CLO amortization acceleration (1) (5,521) (438) 250 Unrealized (gain)/loss on financial instruments (2) 7,185 17,010 (7,853) Unrealized (gain)/loss - ARMs 415 43,557 20,670 Subordinated performance fee (3) 6,171 (8,380) 9,846 Non-Cash Compensation Expense 4,762 3,485 — (Reversal of)/Provision for credit losses 33,738 36,115 (5,192) Loan workout charges/(loan workout recoveries) (4) (5,105) 5,104 — Realized (gain)/loss on debt extinguishment / CLO call (2,201) — — Realized trading and derivatives (gain)/loss on ARMs 677 21,726 13,600 Run Rate Distributable Earnings (5) $ 191,758 $ 137,802 $ 147,412 Realized trading and derivatives gain/(loss) on ARMs (677) (21,726) (13,600) Realized cash gain/(loss) adjustment on REO (6) (1,571) — — Distributable Earnings $ 189,510 $ 116,076 $ 133,812 7.5% Cumulative Redeemable Preferred Stock, Series E Dividend $ (19,367) $ (19,367) (4,842) Non-controlling interests in joint ventures net (income)/loss (602) 216 — Depreciation and amortization attributed to non-controlling interests of joint ventures (31) (1,415) — Distributable Earnings to Common 169,510 95,510 128,970 Average Common Stock and Common Stock Equivalents 1,403,558 1,456,871 1,146,009 GAAP Net Income/(Loss) ROE 8.9 % (0.3) % 1.8 % Run-Rate Distributable Earnings ROE 12.2 % 8.0 % 12.4 % Distributable Earnings ROE 12.1 % 6.6 % 11.3 % GAAP Net Income/(Loss) Per Share, Diluted $ 1.42 $ (0.38) $ (0.18) GAAP Net Income/(Loss) Per Share, Fully Converted (7) $ 1.42 $ (0.06) $ 0.33 Run-Rate Distributable Earnings Per Share, Fully Converted (7) $ 1.94 $ 1.31 $ 2.23 Distributable Earnings Per Share, Fully Converted (7) $ 1.92 $ 1.07 $ 2.02 ________________________ (1) Adjusted for non-cash CLO amortization acceleration to effectively amortize issuance costs of our CLOs over the expected lifetime of the CLOs.
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.
Interest Expense Interest expense for the three months ended December 31, 2023 and September 30, 2023 totaled $81.2 million and $78.0 million, respectively, an increase of $3.2 million due primarily to an increase of $534.6 million in the average carrying value of our collateralized loan obligations partially offset by a decrease of $465.8 million in the average carrying value of our repurchase agreements - commercial mortgage loans. 34 Table of Contents Revenue from Real Estate Owned For the three months ended December 31, 2023 and September 30, 2023, revenue from real estate owned was $4.0 million and $3.3 million, respectively, an increase of $0.7 million due primarily to rental income obtained from the acquisition of an additional property as real estate owned.
Interest Expense Interest expense for the three months ended December 31, 2024 and September 30, 2024 totaled $80.5 million and $89.9 million, respectively, a decrease of $9.4 million due primarily to a decrease of $585.9 million in the carrying value of our repurchase agreements - commercial mortgage loans, partially offset by an increase of $455.2 million in the average carrying value of our collateralized loan obligations. 32 Table of Contents Revenue from Real Estate Owned For the three months ended December 31, 2024 and September 30, 2024, revenue from real estate owned was $8.7 million and $5.4 million, respectively.
Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly. 28 Table of Contents The Company designates loans as non-performing when (i) full payment of principal and coupon interest components become 90-days past due ("non-accrual status"); or (ii) the Company has reasonable doubt as to whether the collection of contractual components can be satisfied ("cost recovery status").
The Company designates loans as non-performing when (i) full payment of principal and coupon interest components become 90-days past due ("non-accrual status"); or (ii) the Company has reasonable doubt as to whether the collection of contractual components can be satisfied ("cost recovery status").
This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss.
This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Risk rating categories range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss with the ratings updated quarterly.
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.
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.
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, 2023 amounted to $16 thousand. Comparatively, for the three months ended September 30, 2023, net loss attributable to non-controlling interest amounted to $0.8 million.
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.
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.
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.
Unrealized Gain/(Loss) on Commercial Mortgage Loans, Held for Sale, Measured at Fair Value The Company did not hold any commercial mortgage loans, held for sale, measured at fair value as of December 31, 2023.
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.
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, 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, 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, 2023, 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, 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.
Collateralized Loan Obligations During the year ended December 31, 2023, the Company raised $896.6 million through the issuance of BSPRT 2023-FL10 Issuer, LLC. Additionally, as of December 31, 2023, the Company had $54.5 million of reinvestment capital available across all outstanding collateralized loan obligations.
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.
The portfolio was completely divested by the third quarter of 2023. • 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 securitization market at a profit.
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.
Realized Gain/(Loss) on Sale of Available for Sale Trading Securities Realized gain on sale of available for sale trading securities for the year ended December 31, 2023 of $0.1 million was primarily related to the sale of 12 CRE CLO bonds. There were no sales of available for sale trading securities during the year ended December 31, 2022.
Realized gain on real estate securities, available for sale for the year ended December 31, 2023 of $0.1 million was primarily related to the sale of 12 CMBS bonds.
Recourse leverage ratio was 0.4x and 0.8x as of December 31, 2023 and December 31, 2022, respectively. Sources of Liquidity Our primary sources of liquidity include unrestricted cash, capacity in our collateralized loan obligations available for reinvestment, and funds available and in progress on financing lines.
Sources of Liquidity Our primary sources of liquidity include unrestricted cash, capacity in our collateralized loan obligations available for reinvestment, and funds available and in progress on financing lines.
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, 2023 and 2022 (dollars in thousands): Year Ended December 31, 2023 2022 Average Carrying Value (1) Interest Income/Expense (2)(3) Avg Yield/Financing Cost (4) Average Carrying Value (1) Interest Income/Expense (2) Avg Yield/Financing Cost (4) Interest-earning assets: Real estate debt (5) $ 5,038,267 $ 530,116 10.5 % $ 4,917,287 $ 320,546 6.5 % Real estate conduit 16,408 2,244 13.7 % 97,556 6,956 7.1 % Real estate securities 260,425 17,323 6.7 % 1,203,242 30,203 2.5 % Total $ 5,315,100 $ 549,683 10.3 % $ 6,218,085 $ 357,705 5.8 % Interest-bearing liabilities: Repurchase Agreements - commercial mortgage loans $ 573,530 $ 54,564 9.5 % $ 771,223 $ 40,162 5.2 % Other financing and loan participation - commercial mortgage loans 59,519 5,478 9.2 % 47,216 1,487 3.1 % Repurchase Agreements - real estate securities 244,469 14,118 5.8 % 1,097,874 8,850 0.8 % Collateralized loan obligations 3,165,612 223,686 7.1 % 2,909,513 103,744 3.6 % Unsecured debt 85,613 7,731 9.0 % 101,659 6,283 6.2 % Total $ 4,128,743 $ 305,577 7.4 % $ 4,927,485 $ 160,526 3.3 % Net interest income/spread $ 244,106 2.9 % $ 197,179 2.5 % Average leverage % (6) 77.7 % 79.2 % Weighted average levered yield (7) 20.6 % 15.3 % __ ______________________ (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, 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.
“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, 2022, filed with the Securities and Exchange Commission on March 16, 2023, for a discussion of the comparison of the year ended December 31, 2022 to the year ended December 31, 2021.
“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.
Cash Flows The following table sets forth changes in cash, cash equivalents and restricted cash for the years ended December 31, 2023 and 2022: For the Year Ended December 31, 2023 2022 Cash Flows From Operating Activities $ 197,387 $ 152,515 Cash Flows From Investing Activities 380,807 3,097,265 Cash Flows From Financing Activities (424,994) (3,227,492) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash $ 153,200 $ 22,288 Cash Flows from Operating Activities Our cash flows from operating activities were primarily driven by net income of $144.5 million, net proceeds of $19.5 million related to originations and sales of commercial mortgage loans, measured at fair value and $33.7 million related to provision for credit losses which is a non-cash transaction.
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.
Real estate owned revenue is recognized when the Company satisfies a performance obligation by transferring a promised good or service to a customer. 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.
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 methodology for calculating Distributable Earnings and Run-Rate Distributable Earnings may differ from the methodologies employed by other companies and thus may not be comparable to the Distributable Earnings reported by other companies.
Distributable Earnings and Distributable Earnings to Common do not represent net income (loss) and should not be considered as an alternative to GAAP net income (loss). 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.
Cash Flows from Investing Activities Our cash flows from investing activities consisted of cash inflows primarily driven by proceeds from principal repayments of $1,065.5 million received on commercial mortgage loans, held for investment, proceeds received from the sale of real estate securities of $418.8 million, proceeds from the sale of other real estate investments of $39.8 million and $17.7 million received from principal collateral on mortgage investments.
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.
Realized loss on sale of available for sale trading securities for the three months ended September 30, 2023 of $0.5 million was primarily related to the sale of six CRE CLO bonds.
Realized gain on real estate securities, available for sale for the three months ended September 30, 2024 of $0.1 million was primarily related to the sale of two CMBS bonds.
The following table shows selected data from our real estate owned, held for investment assets in our portfolio as of December 31, 2023 (dollars in thousands): Type Acquisition Date Primary Location(s) Property Type Real Estate Owned, Net Intangible Lease Asset, Net Total Real Estate Owned 1 September 2021 Jeffersonville, GA Industrial $ 85,444 $ 42,713 $ 128,157 Real Estate Owned 2 August 2023 Portland, OR Office 18,531 — 18,531 Real Estate Owned 3 October 2023 Lubbock, TX Multifamily 11,855 80 11,935 $ 115,830 $ 42,793 $ 158,623 The following table shows selected data from our real estate owned, held for sale assets in our portfolio as of December 31, 2023 (dollars in thousands): Type Acquisition Date Primary Location(s) Property Type Assets, Net Liabilities, Net Real Estate Owned, held for sale 1 Various Various Retail $ 103,657 $ 12,297 The following table shows selected data from our real estate securities, CRE CLO bonds, measured at fair value as of December 31, 2023 (dollars in thousands): Type Interest Rate Maturity Par Value Fair Value Effective Yield CRE CLO bond 1 1 month SOFR + 2.78% 8/19/2035 $ 30,000 $ 30,040 8.14% CRE CLO bond 2 1 month SOFR + 3.23% 8/19/2035 25,000 24,637 8.59% CRE CLO bond 3 1 month SOFR + 2.90% 10/19/2039 28,340 28,310 8.30% CRE CLO bond 4 1 month SOFR + 3.20% 5/25/2038 50,000 49,875 8.55% CRE CLO bond 5 1 month SOFR + 2.37% 4/16/2028 45,000 44,911 7.72% CRE CLO bond 6 1 month SOFR + 2.27% 9/19/2038 53,000 52,827 7.63% CRE CLO bond 7 1 month SOFR + 3.10% 9/19/2038 12,000 11,969 8.46% $ 243,340 $ 242,569 8.12% 46 Table of Contents Liquidity and Capital Resources Overview Our expected material cash requirements over the next twelve months and thereafter are composed of (i) contractually obligated payments, including payments of principal and interest and contractually-obligated fundings on our loans; (ii) other essential expenditures, including operating and administrative expenses and dividends paid in accordance with REIT distribution requirements; and (iii) opportunistic investments, including new loans.
The following table shows selected data from our real estate owned, held for investment assets in our portfolio as of December 31, 2024 (dollars in thousands): Type Acquisition Date Primary Location(s) Property Type Real Estate Owned, Net Intangible Lease Asset, Net Total Real Estate Owned 1 September 2021 Jeffersonville, GA Industrial $ 83,142 $ — $ 83,142 Real Estate Owned 2 August 2023 Portland, OR Office 18,475 — 18,475 Real Estate Owned 3 October 2023 Lubbock, TX Multifamily 11,543 — 11,543 Total $ 113,160 $ — $ 113,160 The following table shows selected data from our real estate owned, held for sale assets in our portfolio as of December 31, 2024 (dollars in thousands): Type Acquisition Date Primary Location(s) Property Type Assets, Net Liabilities, Net Real Estate Owned, held for sale 1 Various Various Retail $ 14,472 $ 1,291 Real Estate Owned, held for sale 2 Various Various Multifamily 211,024 4,528 Total $ 225,496 $ 5,819 44 Table of Contents The following table shows selected data from our real estate securities, available for sale, measured at fair value as of December 31, 2024 (dollars in thousands): Type Interest Rate Maturity Par Value Fair Value Effective Yield CMBS bond 1 1 month SOFR + 2.78% 8/19/2035 $ 20,000 $ 20,021 7.12% CMBS bond 2 1 month SOFR + 2.90% 10/19/2039 24,556 24,587 7.23% CMBS bond 3 1 month SOFR + 3.20% 5/25/2038 43,333 43,388 7.53% CMBS bond 4 1 month SOFR + 2.36% 4/16/2028 39,061 39,116 6.70% CMBS bond 5 1 month SOFR + 2.27% 9/19/2038 9,663 9,685 6.61% CMBS bond 6 1 month SOFR + 3.11% 9/19/2038 12,000 12,047 7.44% CMBS bond 7 1 month SOFR + 1.36% 11/15/2036 15,887 15,648 5.70% CMBS bond 8 1 month SOFR + 1.64% 4/15/2029 5,000 4,989 5.97% CMBS bond 9 1 month SOFR + 2.99% 8/15/2039 3,800 3,812 7.32% CMBS bond 10 1 month SOFR + 2.84% 8/15/2029 7,396 7,408 7.17% CMBS bond 11 1 month SOFR + 2.94% 1/15/2030 22,309 22,272 7.27% Total/Weighted Average $ 203,005 $ 202,973 7.02% 45 Table of Contents Liquidity and Capital Resources Overview Our expected material cash requirements over the next twelve months and thereafter are composed of (i) contractually obligated payments, including payments of principal and interest and contractually-obligated fundings on our loans; (ii) other essential expenditures, including operating and administrative expenses and dividends paid in accordance with REIT distribution requirements; and (iii) opportunistic investments, including new loans.
Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.
Upon the disposition of a real estate owned asset, the Company calculates realized gains and losses as net proceeds received less the carrying value of the real estate owned asset. Net proceeds received are net of direct selling costs associated with the disposition of the real estate owned asset.
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, 2023 and December 31, 2022. 51 Table of Contents The Nominating and Corporate Governance Committee (the “Committee”) of the Company's board of directors, which consists solely of the Company’s independent directors, negotiated, approved and recommended that the board of directors approve, the amended Advisory Agreement.
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.
Real estate owned assets, held for investment are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate owned assets are capitalized and depreciated over their estimated useful lives.
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. 27 Table of Contents Real estate owned assets, held for investment are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment.
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 three months ended December 31, 2023 of $0.8 million was related to the sale of $26.3 million in principal amount of commercial real estate loans into the CMBS securitization market resulting in proceeds of $27.0 million.
For the year ended December 31, 2023, unrealized gain on commercial 30 Table of Contents mortgage loans, held for sale, measured at fair value was $43.8 thousand primarily related to the reversal of unrealized gain/loss on sales of commercial real estate loans into the CMBS securitization market.
Inflows were partially offset by the origination and acquisition of $2,227.7 million of commercial mortgage loans, held for investment and the purchase of real estate securities for $220.6 million. 50 Table of Contents Cash Flows from Financing Activities Our cash outflows from financing activities were primarily driven by net repayments on repurchase agreements for real estate securities, commercial mortgage loans and other financings of $266.0 million, $381.2 million and $39.8 million, respectively, $144.3 million in cash distributions to stockholders, repayments on unsecured debt of $13.4 million, deferred financing cost payments of $12.9 million and $12.5 million of common stock repurchases.
During the year ended December 31, 2023, cash outflows of $425.0 million from financing activities were primarily driven by (i) net repayments on repurchase agreements for real estate securities of $266.0 million, (ii) net repayments on repurchase agreements and revolving credit facilities for commercial mortgage loans of $381.2 million, (iii) net repayments on our other financings of $39.8 million, (iv) $144.3 million of distributions paid to shareholders, (v) repayments on unsecured debt of $13.4 million, (vi) payments of deferred financing costs of $12.9 million and (vii) $12.5 million of common stock repurchases.
The Company also originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") securitization transactions. Historically this business has focused primarily on CMBS, commercial real estate collateralized loan obligation bonds ("CRE CLO bonds"), collateralized debt obligations ("CDOs") and other securities.
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.
Contractual Obligations and Commitments Our contractual obligations, excluding interest obligations (as amounts are not fixed or determinable), as of December 31, 2023 are summarized as follows (dollars in thousands): Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total Unfunded loan commitments (1) $ 9,694 $ 277,515 $ 684 $ — $ 287,893 Repurchase agreements - commercial mortgage loans 52,864 246,843 — — 299,707 Repurchase agreements - real estate securities 174,055 — — — 174,055 CLOs (2) — — — 3,597,973 3,597,973 Mortgage Note Payable — 23,998 — — 23,998 Unsecured debt — — — 81,295 81,295 Other financing and loan participation - commercial mortgage loans 23,669 — 12,865 — 36,534 Total $ 260,282 $ 548,356 $ 13,549 $ 3,679,268 $ 4,501,455 ________________________ (1) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.
Contractual Obligations and Commitments Our contractual obligations, excluding interest obligations (as amounts are not fixed or determinable), as of December 31, 2024 are summarized as follows (dollars in thousands): Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total Unfunded loan commitments (1) $ 76,163 $ 292,151 $ 3,195 $ — $ 371,509 Repurchase agreements - commercial mortgage loans 76,073 253,738 — — 329,811 Repurchase agreements - real estate securities 236,608 — — — 236,608 CLOs (2) — — — 3,657,120 3,657,120 Mortgage note payable 23,998 — — — 23,998 Unsecured debt — — — 81,395 81,395 Other financing and loan participation - commercial mortgage loans — — 12,865 — 12,865 Total $ 412,842 $ 545,889 $ 16,060 $ 3,738,515 $ 4,713,306 ________________________ (1) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the loan maturity date.
(4) Our floating rate loan agreements generally contain the contractual obligation for the borrower to maintain an interest rate cap to protect against rising interest rates. In a simple interest rate cap, the borrower pays a premium for a notional principal amount based on a capped interest rate (the “cap rate”).
In a simple interest rate cap, the borrower pays a premium for a notional principal amount based on a capped interest rate (the “cap rate”).
Net (Income)/Loss Attributable to Non-controlling Interest Net loss attributable to non-controlling interest in our consolidated joint ventures for the year ended December 31, 2023 amounted to $0.7 million compared to a net loss attributable to non-controlling interest of $0.2 million for the year ended December 31, 2022.
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.
Realized Gain/(Loss) on Sale of Available for Sale Trading Securities Realized loss on sale of available for sale trading securities for the three months ended December 31, 2023 of $30.0 thousand was primarily related to the sale of two CRE CLO bonds .
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.
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, primarily subject to triple net leases. 26 Book Value Per Share The following table calculates the Company's book value per share as of December 31, 2023 and 2022 (in thousands, except share and per share amounts): December 31, 2023 December 31, 2022 Stockholders' equity applicable to common stock $ 1,300,372 $ 1,304,238 Shares: Common stock 81,942,656 82,479,743 Restricted stock and restricted stock units 809,257 513,041 Total outstanding shares 82,751,913 82,992,784 Book value per share $ 15.71 $ 15.72 The following table calculates the Company's fully-converted book value per share as of December 31, 2023 and 2022 (in thousands, except share and per share amounts): December 31, 2023 December 31, 2022 Stockholders' equity applicable to convertible common stock $ 1,390,120 $ 1,398,986 Shares: Common stock 81,942,656 82,479,743 Restricted stock and restricted stock units 809,257 513,041 Series H convertible preferred stock 5,370,498 5,370,640 Series I convertible preferred stock — 299,200 Total outstanding shares 88,122,411 88,662,624 Fully-converted book value per share (1) (2) $ 15.77 $ 15.78 ________________________ (1) Fully-converted book value per share reflects full conversion of our outstanding series of convertible preferred stock and vesting of our outstanding equity compensation awards.
Book Value Per Share The following table calculates the Company's book value per share as of December 31, 2024 and 2023 (in thousands, except share and per share amounts): December 31, 2024 December 31, 2023 Stockholders' equity applicable to common stock $ 1,253,820 $ 1,300,372 Shares: Common stock 81,788,091 81,942,656 Restricted stock and restricted stock units 1,278,698 809,257 Total outstanding shares 83,066,789 82,751,913 Book value per share $ 15.09 $ 15.71 25 The following table calculates the Company's fully-converted book value per share as of December 31, 2024 and 2023 (in thousands, except share and per share amounts): December 31, 2024 December 31, 2023 Stockholders' equity applicable to convertible common stock $ 1,343,568 $ 1,390,120 Shares: Common stock 81,788,091 81,942,656 Restricted stock and restricted stock units 1,278,698 809,257 Series H convertible preferred stock 5,370,498 5,370,498 Total outstanding shares 88,437,287 88,122,411 Fully-converted book value per share (1)(2) $ 15.19 $ 15.77 ________________________ (1) Fully-converted book value per share reflects full conversion of our outstanding series of convertible preferred stock and vesting of our outstanding equity compensation awards.
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. 29 Table of Contents Results of Operations Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 The Company conducts its business through the following segments: • The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgages, subordinate mortgages, mezzanine loans and participations in such loans. • The real estate securities business focuses on investing in and asset managing real estate securities.
Results of Operations The Company conducts its business through the following segments: • The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgages, subordinate mortgages, mezzanine loans and participations in such loans. • The real estate securities business focuses on investing in and asset managing real estate securities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk.
Biggest changeMany factors including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates.
The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 50 or 100 basis points or decrease by 25 or 50 basis points, assuming that our current balance sheet was to remain constant and no actions were taken to alter our existing interest rate sensitivity.
The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 50 basis points or decrease by 50 or 100 basis points, assuming that our current balance sheet was to remain constant and no actions were taken to alter our existing interest rate sensitivity.
In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses. 55 Table of Contents Item 8. Financial Statements and Supplementary Data.
In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses. Item 8. Financial Statements and Supplementary Data.
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.
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.
Estimated Percentage Change in Interest Income Net of Interest Expense Change in Indexing Rates December 31, 2023 December 31, 2022 (-) 25 Basis Points (1.49) % (1.78) % Base Interest Rate — % — % (+) 50 Basis Points 3.01 % 3.49 % (+) 100 Basis Points 6.03 % 6.98 % 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.
Estimated 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.
To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs.
Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs.
As of December 31, 2023 and 2022, our portfolio included 141 and 157 variable rate investments, respectively, based on LIBOR and SOFR (or "indexing rates") for various terms. Borrowings under our financing arrangements are also based on LIBOR and SOFR.
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.

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