The following tables show a summary of the Company’s commercial mortgage loans held for investment as of September 30, 2025 and December 31, 2024:

September 30, 2025


Loan Type (1)	Number of Loans		Principal Balance		Unamortized (fees)/costs, net		Allowance for credit losses			Carrying Value		Weighted Average Interest Rate (2)			Weighted Average Years to Maturity (3)
First mortgage loans		16	$	369,577	$	1,092	$	(5,012	)	$	365,657		7.5	%		0.4
Credit loans		2		12,880		—		(3,150	)		9,730		9.2	%		2.2
Total and average		18	$	382,457	$	1,092	$	(8,162	)	$	375,387		7.5	%		0.5

December 31, 2024


Loan Type (1)	Number of Loans		Principal Balance		Unamortized (fees)/costs, net		Allowance for credit losses			Carrying Value		Weighted Average Interest Rate (2)			Weighted Average Years to Maturity (3)
First mortgage loans		23	$	549,303	$	388	$	(9,898	)	$	539,793		7.7	%		0.6
Credit loans		2		13,380		—		(4,000	)		9,380		9.2	%		1.9
Total and average		25	$	562,683	$	388	$	(13,898	)	$	549,173		7.7	%		0.6

(1)

First mortgage loans are first position mortgage loans and credit loans are mezzanine and subordinated loans.

(2)

Weighted average interest rate is based on the loan spreads plus the applicable indices as of the last interest reset date, which is typically the 15th of each month. On September 15, 2025, the one-month term USD Secured Overnight Financing Rate (“SOFR”) rate reset to 4.15%. On December 15, 2024, the SOFR rate reset to 4.40%. Weighted average interest rate excludes maturity default interest and interest on loans placed on nonaccrual status.

(3)

Weighted average years to maturity excludes allowable extensions on the loans.

For the nine months ended September 30, 2025, the activity in the Company’s commercial mortgage loans, held-for-investment portfolio was as follows:


	Commercial mortgage loans at cost			Allowance for credit losses			Carrying Value
Balance at Beginning of Year	$	563,071		$	(13,898	)	$	549,173
Loan originations/advances		2,043			—			2,043
Principal repayments		(72,967	)		—			(72,967	)
Sale of loan (1)		(47,476	)		—			(47,476	)
Amortization of loan origination and deferred exit fees		849			—			849
Deferred interest capitalized on real estate loan		631			—			631
Origination fees and extension fees received on commercial loans		(776	)		—			(776	)
Transfer on foreclosure to real estate owned (2)		(61,826	)		—			(61,826	)
Reversal of credit losses		—			3,357			3,357
Charge-offs (2)		—			2,379			2,379
Balance at End of Period	$	383,549		$	(8,162	)	$	375,387

(1)

Relates to the sale of a loan that was placed on nonaccrual status as of July 15, 2025. The Company completed the sale of the loan in September 2025 and recognized a loss on sale of $8,413 on the loan, which is included within net realized (loss) gain on disposition of commercial loans in the accompanying consolidated statements of operations.

(2)

Relates to the acquisition of two properties secured by senior loans. See Note 13 – “Real Estate Owned” for additional information.

The following table presents the activity in the Company’s allowance for credit losses for the nine months ended September 30, 2025:


	Commercial Mortgage Loans			Unfunded Loan Commitments (1)			Total
Balance at beginning of period	$	(13,898	)	$	(96	)	$	(13,994	)
Reversal of credit losses		3,357			47			3,404
Charge-offs (2)		2,379			—			2,379
Ending allowance for credit losses	$	(8,162	)	$	(49	)	$	(8,211	)

(1)

The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets.

(2)

Relates to the acquisition of two properties secured by senior loans. See Note 13 – “Real Estate Owned” for additional information.

The following table presents the activity in the Company’s allowance for credit losses for the nine months ended September 30, 2024:


	Commercial Mortgage Loans			Unfunded Loan Commitments (1)			Total
Balance at beginning of period	$	(21,849	)	$	(289	)	$	(22,138	)
(Provision for) reversal of credit losses		(3,055	)		150			(2,905	)
Charge-offs (2)		855			—			855
Ending allowance for credit losses	$	(24,049	)	$	(139	)	$	(24,188	)

(1)

The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets.

(2)

Relates to the acquisition of two properties secured by a senior loan in July 2024. See Note 13 - “Real Estate Owned” for additional information.

As of September 30, 2025, the Company had a total current expected credit loss (“CECL”) reserve of $8,211, which included an asset-specific component of $4,358 related to two loans. During the nine months ended September 30, 2025, the Company decreased the CECL reserve by $5,783, which includes $2,379 charge-offs related to two loans. This CECL reserve reflects certain loans assessed for impairment in the Company’s portfolio as well as reserves determined based on an analysis of macroeconomic conditions. See “Asset-Specific CECL Reserve” section below for further discussion on the loans with asset-specific CECL reserve.

As of September 30, 2024, the Company had a total CECL reserve of $24,188, which included an asset-specific component of $16,754 related to five loans. During the nine months ended September 30, 2024, the Company increased the CECL reserve by $2,905 and reduced the CECL reserve by $855 with the charge-off of one loan. This CECL reserve reflects certain loans assessed for impairment in the Company’s portfolio as well as reserves determined based on an analysis of macroeconomic conditions.

As part of the Company’s process for monitoring the credit quality of its investments, it performs a quarterly asset review of the investment portfolio and assigns risk ratings to each of its loans and certain securities it may own, such as CMBS. Risk factors include payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. To determine the likelihood of loss, the loans are rated on a 5-point scale as follows:


Investment Grade	Investment Grade Definition
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing investment requiring closer monitoring. Trends and risk factors show some deterioration. Collection of principal and interest is still expected.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

All investments are assigned an initial risk rating of 2 at origination or acquisition.

As of September 30, 2025, six loans had a risk rating of 2, nine had a risk rating of 3, two had a risk rating of 4 and one had a risk rating of 5. As of December 31, 2024, thirteen loans had a risk rating of 2, six had a risk rating of 3, four had a risk rating of 4 and two had a risk rating of 5.

The table below provides the components of the asset-specific CECL reserve as of September 30, 2025 and December 31, 2024:


Loan Type	Collateral Type	September 30, 2025		December 31, 2024
Senior	Multifamily	$	—	$	212	(1)
Credit	Office		3,150		4,000	(2)
Senior	Office		1,208		937	(3)
Senior	Office		—		1,080	(4)
Senior	Office		—		803	(5)
Senior	Industrial		—		187	(6)
Total		$	4,358	$	7,219
____________

(1)

The loan is secured by a multifamily property in Arlington, TX with an outstanding balance of $24,331 and no unfunded commitment as of September 30, 2025, and a maturity date of December 9, 2025. During the quarter ended March 31, 2025, the Company observed an increase in the in-place net operating income and other macroeconomic improvements which resulted in

(2)

The loan is secured by an office property in Las Vegas, NV with an outstanding balance of $5,380 and no unfunded commitment as of September 30, 2025. The Company has recorded an asset-specific CECL reserve of $3,150 for the loan as of September 30, 2025. On July 1, 2025, the Company entered into a forbearance and modification agreement with the borrower, which extended the maturity date of the loan to December 31, 2025. In addition, the Company agreed to accept $2,250 for the satisfaction of the loan balance plus all accrued and unpaid interest and lender fees. The borrower made a payment of $500 in July 2025 that was applied against the required amounts due. The loan has a risk rating of 5 as of September 30, 2025 and has been on nonaccrual status since July 1, 2024.

(3)

The loan was secured by an office property in Memphis, TN with an outstanding balance of $2,862 and no unfunded commitment as of September 30, 2025 and a maturity date of November 9, 2026. During the fourth quarter of 2024, the borrower sold a property included in the loan and paid down the principal balance of $5,072, and the Company extended the loan for one year. The Company has recorded an asset-specific CECL reserve of $1,208 as of September 30, 2025 as the estimated value of the property securing the loan was below the loan balance. The loan had a risk rating of 4 as of September 30, 2025. On October 28, 2025, the Company entered into a discounted payoff agreement with the borrower, pursuant to which the loan was settled for $1,678 in full satisfaction of all obligations under the loan.

(4)

The loan is secured by an office property in San Diego, CA with an outstanding balance of $13,626 and an unfunded commitment of $669 as of September 30, 2025, and a maturity date of May 9, 2026. During the quarter ended March 31, 2025, the Company observed an increase in the in-place net operating income and other macroeconomic improvements which resulted in an improvement in the estimated value of the property. As the estimated value exceeded the loan balance, the asset-specific CECL reserve was reversed. During the quarter ended September 30, 2025, the Company reviewed the property performance and estimated the property value, noting that the valuation exceeded the outstanding loan balance. As a result, no asset-specific CECL reserve was recorded for the loan as of September 30, 2025. The loan has a risk rating of 3 as of September 30, 2025.

During the three and nine months ended September 30, 2025, the Company recognized $130 and $2,569, respectively, in interest income related to the nonaccrual status loans prior to such loans being placed on nonaccrual status. During the three and nine months ended September 30, 2024, the Company recognized $0 and $426, respectively, in interest income related to the nonaccrual status loans prior to such loans being placed on nonaccrual status. During the three and nine months ended September 30, 2025 and 2024, there was no reversal of interest income as a result of placing the loans on nonaccrual status. For the three and nine months ended September 30, 2025, the total interest income forgone on the loans on nonaccrual status was $882 and $2,538, respectively. For the three and nine months ended September 30, 2024, the total interest income forgone on the loans on nonaccrual status was $1,205 and $4,287, respectively.

The Company may amend or modify a loan based on its specific facts and circumstances. These modifications are often in the form of a term extension to provide the borrower additional time to refinance or sell the collateral property in order to repay the principal balance of the loan. Such extensions are generally made at the loan’s contractual interest rate and may require an extension fee be paid to the Company.

During the three months ended September 30, 2025, the Company made one such modification that is disclosable under ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), as it was considered an other-than-insignificant payment delay for a borrower experiencing financial difficulty. In this instance, the Company entered into a forbearance and modification agreement with the borrower under a credit loan secured by an office property located in Las Vegas, NV, which extended the maturity date to December 31, 2025, as described above. In addition, the Company agreed to accept $2,250 for the satisfaction of the loan balance plus all accrued and unpaid interest and lender fees. The borrower made a payment of $500 in July 2025 that was applied against the required amounts due. The loan’s modified terms were included in the determination of the CECL reserve as of September 30, 2025. The loan had an amortized cost basis of $2,230, which is net of $3,150 of asset-specific CECL reserve on the loan, representing 0.6% of the Company’s commercial mortgage loans as of September 30, 2025. During the nine months ended September 30, 2025, the Company made two such modifications (one of which is described above) that are disclosable under ASU 2022-02, as those were considered other-than-insignificant payment delays for borrowers experiencing financial difficulty. In the other instance, the Company granted a term extension to February 9, 2026 for a senior loan secured by an office property located in Honolulu, HI described above. The modification provided for $750 in principal paydown and payments toward cash flow reserve deposit and modification fee of $600 and $50, respectively. The modification also provides for the accrued maturity default interest of $631 on the loan as of March 31, 2025 to be repaid as deferred commitment fee upon loan maturity. The loan’s modified terms were included in the determination of the CECL reserve. The loan had an amortized cost basis of $12,700, representing 3.4% of the Company’s commercial mortgage loans as of September 30, 2025.

During the three months ended September 30, 2024, the Company made no such modifications that are disclosable under ASU 2022-02. During the nine months ended September 30, 2024, the Company made one such modification that is disclosable under ASU 2022-02, as it was considered an other-than-insignificant payment delay for a borrower experiencing financial difficulty. In this instance, the Company granted a two-year term extension, which can be further extended by one year subject to certain terms and conditions, for a senior loan secured by an office property located in Charlotte, NC described above. The Company waived maturity default interest of $738 on the loan. No principal was forgiven as a result of the modification. The modification provides for payment-in-kind of any accrued interest that exceeds a per annum rate of 4%. The loan’s modified terms were included in the determination of the CECL reserve. The loan had an amortized cost basis of $22,897, representing 3.6% of the Company’s commercial mortgage loans as of September 30, 2024.