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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~March~~June 3130, 2025


☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-34452

Apollo Commercial Real Estate Finance, Inc.

(Exact name of registrant as specified in its charter)

     Maryland

     27-0467113

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification No.)

Apollo Commercial Real Estate Finance, Inc.

c/o Apollo Global Management, Inc.

9 West 57th Street, 42nd Floor,

New York, New York 10019

(Address of principal executive offices) (Zip Code)

(212) 515–3200

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	ARI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April~~July 2328, 2025, there were 138,943,831 shares, $0.01 par value per share, of the registrant's common stock issued and outstanding.

Table of Contents

		Page
Part I - Financial Information
	Item 1. Financial Statements	3
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	3536
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	5152
	Item 4. Controls and Procedures	5253
Part II - Other Information
	Item 1. Legal Proceedings	5354
	Item 1A. Risk Factors	5354
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5354
	Item 3. Defaults Upon Senior Securities	5354
	Item 4. Mine Safety Disclosures	5354
	Item 5. Other Information	5354
	Item 6. Exhibits	5455

See notes to unaudited condensed consolidated financial statements.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands—except share data)

	March 31, 2025			December 31, 2024
	June 30, 2025			December 31, 2024
Assets:
Cash and cash equivalents	$	~~166~~177,~~424~~623		$	317,396
Commercial mortgage loans, net(1)(2)		78,~~285~~479,~~022~~438			6,715,347
Subordinate loans, net(2)		~~402~~145,~~064~~472			388,809
Real estate owned, held for investment, net(3) (net of $25,721 and $23,266 accumulated depreciation in 2025 and 2024, respectively)		775,371			752,643
Real estate owned, held for investment, net(3) (net of $28,252 and $23,266 accumulated depreciation in 2025 and 2024, respectively)		805,653			752,643
Other assets		97168,~~945~~636			138,027
Derivative assets, net		16,167			58,169
Note Receivable, held for sale		39,964			41,200
Note receivable, held for sale		41,200			41,200
Derivative assets, net		171			58,169
Total Assets	$	89,~~784~~816,~~193~~957		$	8,411,591
Liabilities and Stockholders' Equity
Liabilities:
Secured debt arrangements, net	$	56,~~219~~213,~~777~~188		$	4,814,973
Senior secured term loans, net		~~752~~729,~~965~~416			754,210
Senior secured notes, net		496,~~628~~826			496,433
Debt related to real estate owned, held for investment, net		~~345~~376,~~596~~504			324,587
Accounts payable, accrued expenses and other liabilities(4)		~~100~~88,~~053~~519			138,179
Payable to related party		8,566			8,728
Derivative liabilities, net		57,758			—
Total Liabilities	$	6,923,585		$	6,537,110
Payable to related party		8,360			8,728
Total Liabilities	$	7,970,571		$	6,537,110
Commitments and Contingencies (see Note 16)
Stockholders' Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, Series B-1, 6,770,393 shares issued and outstanding ($169,260 liquidation preference) in 2025 and 2024 (see Note 15)		68			68
Common stock, $0.01 par value, 450,000,000 shares authorized, 138,871,188 and 138,174,636 shares issued and outstanding in 2025 and 2024, respectively		1,389			1,382
Common stock, $0.01 par value, 450,000,000 shares authorized, 138,943,831 and 138,174,636 shares issued and outstanding in 2025 and 2024, respectively		1,389			1,382
Additional paid-in-capital		2,~~694~~697,~~177~~576			2,695,701
Accumulated deficit		(~~835~~852,~~026~~647	)		(822,670	)
Total Stockholders' Equity		1,~~860~~846,~~608~~386			1,874,481
Total Liabilities and Stockholders' Equity	$	89,~~784~~816,~~193~~957		$	8,411,591

(1)

Includes carrying value of $78,~~285~~354,~~022~~633 and $6,715,347 pledged as collateral under secured debt arrangements in 2025 and 2024, respectively.

(2)

Net of $~~377~~381,~~212~~348 and $373,336 CECL Allowances comprised $3438,~~712~~848 and $30,836 General CECL Allowance in 2025 and 2024, respectively, and $342,500 Specific CECL Allowance in 2025 and 2024.

(3)

Includes $7879,~~297~~791 of undepreciated property pledged as collateral under secured debt arrangements in 2025.

(4)

Includes $65,~~080~~057 and $5,948 of General CECL Allowance related to unfunded commitments on commercial mortgage loans and subordinate loans, net in 2025 and 2024, respectively.

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations (Unaudited)

(in thousands—except share and per share data)

	Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Net interest income:
Interest income from commercial mortgage loans	$	~~143~~166,~~985~~691		$	~~183~~179,~~716~~388		$	310,676		$	363,104
Interest income from subordinate loans and other lending assets		557			~~849~~842			1,114			1,691
Interest expense		(~~105~~124,~~057~~178	)		(~~127~~128,~~887~~472	)		(229,235	)		(256,359	)
Net interest income	$	3943,~~485~~070		$	5651,~~678~~758		$	82,555		$	108,436
Revenue from real estate owned operations		2627,~~331~~832			2329,~~857~~350			54,163			53,207
Total net revenue	$	6570,~~816~~902		$	8081,~~535~~108		$	136,718		$	161,643
Operating expenses:
General and administrative expenses (includes equity-based compensation of $3,430 and $4,188 in 2025 and 2024, respectively)	$	(6,652	)	$	(7,373	)
General and administrative expenses (includes equity-based compensation of $3,400 and $6,830 in 2025 and $4,157 and $8,345 in 2024, respectively)	$	(6,561	)	$	(7,488	)	$	(13,213	)	$	(14,861	)
Management fees to related party		(8,~~564~~356	)		(9,~~421~~173	)		(16,920	)		(18,594	)
Operating expenses related to real estate owned		(2021,~~767~~113	)		(1921,~~893~~767	)		(41,880	)		(41,660	)
Depreciation and amortization on real estate owned		(2,~~456~~531	)		(42,~~656~~287	)		(4,987	)		(6,943	)
Total operating expenses	$	(38,~~439~~561	)	$	(4140,~~343~~715	)	$	(77,000	)	$	(82,058	)
Other income, net	$	1,~~194~~232		$	~~570~~641		$	2,426		$	1,211
Increase in current expected credit loss allowance, net		(43,~~008~~113	)		(~~147~~10,~~684~~258	)		(7,121	)		(157,942	)
Foreign currency translation gain (loss)		4073,~~558~~705			(191,~~563~~362	)		114,263			(20,925	)
Gain (loss) on foreign currency forward contracts (includes unrealized gains (losses) of ($41,829) and $18,053 in 2025 and 2024, respectively)		(38,972	)		23,398
Gain (loss) on foreign currency forward contracts (includes unrealized gains (losses) of ($73,682) and ($115,511) in 2025 and $911 and $18,964 in 2024, respectively)		(82,139	)		6,377			(121,111	)		29,775
Gain (loss) on interest rate hedging instruments (includes unrealized (losses) of ($174) and ($194) in 2025 and 2024, respectively)		(42	)		356
Gain on interest rate hedging instruments (includes unrealized (losses) of ($72) and ($246) in 2025 and ($457) and ($651) in 2024, respectively)		65			94			23			450
Valuation allowance, commercial mortgage loan held for sale		—			(679	)
Valuation allowance, loans and other lending assets held for sale		(1,236	)		679			(1,236	)		—
Net income (loss) before taxes	$	26,107		$	(104,410	)
Net realized loss on investments		—			(679	)		—			(679	)
Income tax provision		(116	)		(114	)
Net income (loss) before taxes	$	20,855		$	35,885		$	46,962		$	(68,525	)
Net income (loss)	$	25,991		$	(104,524	)
Income tax provision		(116	)		(100	)		(232	)		(214	)
Preferred dividends		(3,068	)		(3,068	)
Net income (loss)	$	20,739		$	35,785		$	46,730		$	(68,739	)
Net income (loss) available to common stockholders	$	22,923		$	(107,592	)
Preferred dividends		(3,068	)		(3,068	)		(6,136	)		(6,136	)
Net income (loss) per share of common stock:
Net income (loss) available to common stockholders	$	17,671		$	32,717		$	40,594		$	(74,875	)
Basic	$	0.16		$	(0.76	)
Net income (loss) per share of common stock:
Diluted	$	0.16		$	(0.76	)
Basic	$	0.12		$	0.23		$	0.28		$	(0.54	)
Basic weighted-average shares of common stock outstanding		138,639,004			141,869,604
Diluted	$	0.12		$	0.23		$	0.28		$	(0.54	)
Diluted weighted-average shares of common stock outstanding		138,991,818			141,869,604
Basic weighted-average shares of common stock outstanding		138,943,566			140,438,676			138,792,126			141,154,140
Dividend declared per share of common stock	$	0.25		$	0.35
Diluted weighted-average shares of common stock outstanding		139,208,860			140,611,532			139,103,947			141,154,140
Dividend declared per share of common stock	$	0.25		$	0.35		$	0.50		$	0.70

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

(in thousands—except share and per share data)

	Preferred Stock				Common Stock				AdditionalPaid-In-			Accumulated
	Shares		Par		Shares		Par		Capital			Deficit			Total
Balance at January 1, 2025		6,770,393	$	68		138,174,636	$	1,382	$	2,695,701		$	(822,670	)	$	1,874,481
Capital increase (decrease) related to Equity Incentive Plan		—		—		696,552		7		(1,524	)		—			(1,517	)
Net Income		—		—		—		—		—			25,991			25,991
Dividends declared on preferred stock - $0.45 per share		—		—		—		—		—			(3,068	)		(3,068	)
Dividends declared on common stock and RSUs - $0.25 per share		—		—		—		—		—			(35,279	)		(35,279	)
Balance at March 31, 2025		6,770,393	$	68		138,871,188	$	1,389	$	2,694,177		$	(835,026	)	$	1,860,608
Capital increase related to Equity Incentive Plan		—		—		72,643		—		3,399			—			3,399
Net Income		—		—		—		—		—			20,739			20,739
Dividends declared on preferred stock - $0.45 per share		—		—		—		—		—			(3,068	)		(3,068	)
Dividends declared on common stock and RSUs - $0.25 per share		—		—		—		—		—			(35,292	)		(35,292	)
Balance at June 30, 2025		6,770,393	$	68		138,943,831	$	1,389	$	2,697,576		$	(852,647	)	$	1,846,386

	Preferred Stock				Common Stock						AdditionalPaid-In-			Accumulated
	Shares		Par		Shares			Par			Capital			Deficit			Total
Balance at January 1, 2024		6,770,393	$	68		141,358,605		$	1,414		$	2,727,488		$	(520,237	)	$	2,208,733
Capital increase (decrease) related to Equity Incentive Plan		—		—		738,110			7			(3,093	)		—			(3,086	)
Net Loss		—		—		—			—			—			(104,524	)		(104,524	)
Dividends declared on preferred stock - $0.45 per share		—		—		—			—			—			(3,068	)		(3,068	)
Dividends declared on common stock and RSUs - $0.35 per share		—		—		—			—			—			(50,620	)		(50,620	)
Balance at March 31, 2024		6,770,393	$	68		142,096,715		$	1,421		$	2,724,395		$	(678,449	)	$	2,047,435
Capital increase related to Equity Incentive Plan		—		—		65,490			1			4,147			—			4,148
Repurchase of common stock						(3,723,772	)		(37	)		(37,882	)		—			(37,919	)
Net Income		—		—		—			—			—			35,785			35,785
Dividends declared on preferred stock - $0.45 per share		—		—		—			—			—			(3,068	)		(3,068	)
Dividends declared on common stock and RSUs - $0.35 per share		—		—		—			—			—			(49,333	)		(49,333	)
Balance at June 30, 2024		6,770,393	$	68		138,438,433		$	1,385		$	2,690,660		$	(695,065	)	$	1,997,048

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended March 31,
	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	2546,~~991~~730		$	(~~104~~68,~~524~~739	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of discount/premium, deferred fees and payment-in-kind interest		(511,~~642~~794	)		(613,~~716~~465	)
Amortization of deferred financing costs		38,~~779~~211			48,~~027~~556
Equity-based compensation		36,~~430~~830			48,~~188~~345
Increase in current expected credit loss allowance, net		47,~~008~~121			~~147~~157,~~684~~942
Valuation allowance, commercial mortgage loan held for sale		—			679
Valuation allowance, loans and other lending assets held for sale		1,236			—
Foreign currency loss (gain)		(35108,~~994~~699	)		2021,~~881~~405
Unrealized loss (gain) on foreign currency contracts		41115,~~829~~511			(18,~~053~~964	)
Unrealized loss on interest rate hedging instruments		~~174~~246			~~194~~651
Depreciation and amortization on real estate owned		24,~~456~~987			46,~~656~~943
Net realized loss on investment		—			679
Changes in operating assets and liabilities:
Other assets		(3,567	)		(12,575	)
Proceeds received from payment-in-kind interest		39,136			—
Accounts payable, accrued expenses and other liabilities		3,014			12,532
Other assets		(12,571	)		(1,500	)
Payable to related party		(162	)		(130	)
Payment for interest rate cap		—			(11	)
Net cash provided by operating activities	$	39,316		$	52,843
Accounts payable, accrued expenses and other liabilities		5,966			1,621
Payable to related party		(368	)		(374	)
Net cash provided by operating activities	$	102,542		$	103,089
Cash flows from investing activities:
New funding of commercial mortgage loans		(~~460~~1,~~452~~376,101	)		—(495,280	)
Add-on funding of commercial mortgage loans		(59444,~~225~~655	)		(~~308~~410,~~032~~072	)
Add-on funding of subordinate loans		(1322,~~642~~545	)		(1327,~~734~~766	)
Proceeds received from the repayment and sale of commercial mortgage loans		~~138~~653,~~024~~916			~~168~~752,~~526~~773
Proceeds received from the repayment of subordinate loans and other lending assets		—79,207			~~102~~201
Contributions to equity method investment		(34,~~256~~203	)		—
Origination fees, other fees, and cost recovery proceeds received on commercial mortgage loans, and subordinate loans, net		626,~~854~~899			417,~~346~~159
Increase (decrease) in collateral related to derivative contracts, net		(41110,~~140~~560	)		2025,~~020~~790
Capital expenditures on real estate owned assets		(2457,~~867~~363	)		(3778,~~901~~340	)
Net cash used in investing activities	$	(~~457~~1,~~704~~255,405	)	$	(~~166~~215,~~673~~535	)
Cash flows from financing activities:
Proceeds from secured debt arrangements		~~406~~2,~~830~~008,388			~~548~~1,~~557~~177,928
Proceeds related to financing on real estate owned		2050,~~514~~927			—74,648
Repayments of secured debt arrangements		(~~111~~934,~~498~~352	)		(~~433~~1,~~604~~030,594	)
Repayments of senior secured term loan principal		(211,~~000~~250	)		(24,000	)
Payment of deferred financing costs		(415,~~073~~499	)		(35,~~454~~872	)
Payment of withholding tax on RSU delivery		(4,947	)		(7,274	)
Payment of issuance discount		(5,625	)		—
Dividends on common stock		(35,416	)		(50,839	)
Payment of withholding tax on RSU delivery		(4,947	)		(7,284	)
Dividends on preferred stock		(3,068	)		(3,068	)
Repurchase of common stock		—			(37,919	)
Net cash provided by financing activities	$	266,342		$	48,318
Dividends on common stock		(70,694	)		(101,459	)
Dividends on preferred stock		(6,136	)		(6,136	)
Net cash provided by financing activities	$	1,010,812		$	59,312

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited) (Continued)

(in thousands)

	Three Months Ended March 31,
	Six Months Ended June 30,
	2025			2024
Net decrease in cash and cash equivalents, including cash classified within assets related to real estate owned, held for sale	$	(~~152~~142,~~046~~051	)	$	(6553,~~512~~134	)
Decrease (increase) in cash classified within assets related to real estate owned, held for sale		-			577
Net increase (decrease) in cash and cash equivalents	$	(~~152~~142,~~046~~051	)	$	(6452,~~935~~557	)
Cash and cash equivalents beginning of period		317,396			225,438
Effects of foreign currency translation on cash and cash equivalents		12,~~074~~278			~~687~~1,822
Cash and cash equivalents end of period	$	~~166~~177,~~424~~623		$	~~161~~174,~~190~~703
Supplemental disclosure of cash flow information:
Interest paid	$	~~102~~223,~~020~~110		$	~~116~~252,~~463~~484
Change in loan proceeds held by servicer		(47,002	)		1,624
Income tax paid		114			—
Supplemental disclosure of non-cash investing and financing activities:
Change in loan proceeds held by servicer		(46,313	)		(837	)
Dividend declared, not yet paid	$	38,347		$	53,688
Supplemental disclosure of non-cash investing and financing activities:
Transfer of assets related to real estate owned, held for sale to assets related to real estate owned held for investment, net		—			70,688
Dividend declared, not yet paid	$	38,360		$	52,401
Transfer of assets related to real estate owned, held for sale to other assets		—			2,280
Deferred financing costs accrued, not yet paid		1,274			—
Transfer of liabilities related to real estate owned, held for sale to accounts payable, accrued expenses and other liabilities		—			3,937
Restructuring of subordinate loan to commercial mortgage loan		148,034			—
Transfer of commercial mortgage loan to commercial mortgage loan, held for sale		—			135,465
Transfer of assets related to real estate owned, held for sale to assets related to real estate owned held for investment, net		—			70,688
Transfer of assets related to real estate owned, held for sale to other assets		—			2,280
Transfer of liabilities related to real estate owned, held for sale to accounts payable, accrued expenses and other liabilities		—			3,937
Restructuring of commercial mortgage loan to subordinate loan		—			74,304

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Organization

Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate related debt investments. These asset classes are referred to as our target assets.

We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo").

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include current expected credit loss ("CECL") allowances. Actual results may differ from estimates. Certain reclassifications have been made to previously reported amounts to conform to the current period’s presentation.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three and six months ended ~~March~~June 3130, 2025 are not necessarily indicative of the results to be expected for the full year or any other future period.

We currently operate in one reporting segment. Refer to "Note 19 - Segment Reporting" for additional information.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued ASU 2024-03 "Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). ASU 2024-03 requires disaggregation of certain expense captions in financial statement disclosures for each interim and annual reporting period.

The guidance is effective for annual periods starting after December 15, 2026, and interim periods after December 15, 2027, with early adoption permitted. It is to be adopted on a prospective basis with the option to apply retrospectively. We have not early adopted ASU 2024-03 and are currently evaluating its impact. We do not expect it to materially affect our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09") which intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. We are currently assessing the impact of this guidance; however, we do not expect a material impact to our consolidated financial statements.

Note 3 – Fair Value Disclosure

GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair value. Market-based or observable inputs are the preferred source of values, followed by valuation models using management's assumptions in the absence of market-based or observable inputs. The three levels of the hierarchy as noted in Accounting Standards Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") are described below:

Level I — Quoted prices in active markets for identical assets or liabilities.

Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

While we anticipate that our valuation methods are appropriate and consistent with valuation methods used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

Forward Currency Contracts

The fair values of foreign exchange ("Fx") forwards are determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying countries. Our Fx forwards are classified as Level II in the fair value hierarchy.

Interest Rate Hedging Instruments

The fair values of our interest rate caps are determined by using the market standard methodology of discounting the future expected cash receipts that occur when variable interest rates rise above the strike rates of the interest rate caps. The variable interest rates used in the calculation of projected receipts on the interest rate caps are based on a third-party expert's expectation of future interest rates derived from observable market interest rate curves and volatility. Our interest rate caps are classified as Level II in the fair value hierarchy and manage our exposure to variable cash flows on certain of our borrowings. As of ~~March~~June 3130, 2025 and December 31, 2024, we held two interest rate caps: one related to financing on a full service luxury hotel in Washington D.C. ("D.C. Hotel") and one related to our construction financing on a multifamily development property in Brooklyn, NY ("Brooklyn Multifamily Development"). Refer to "Note 5 – Real Estate Owned" and "Note 10 – Derivatives" for further detail.

Loans and Other Lending Assets Held for Sale

Loans and other lending assets are classified as held for sale if there is an intent to sell them in the short-term following the reporting date. These loans are recorded at the lower of amortized cost or fair value, less selling costs, unless the fair value option was elected at the time of origination. If the loan's fair value, less selling costs, is determined to be less than its amortized cost, a fair value adjustment may be recorded through a valuation allowance. Changes in the valuation allowance are recorded within our consolidated statement of operations in the period in which the change occurs.

The fair value of loans held for sale may be estimated using sales of comparable loans as supported by independent market data, or a contractually negotiated sales price. We consider the inputs used to calculate the fair value of loans held for sale as unobservable inputs. Accordingly, we classify the fair value of loans held for sale within Level III of the fair value hierarchy.

As of ~~March~~June 3130, 2025 and December 31, 2024, we held a promissory note classified as held for sale. As of ~~both March 31, 2025 and~~ December 31, 2024, the note's fair value was equal to its amortized cost of $41.2 million. ~~Accordingly,~~and no valuation allowance was recorded. ~~during~~During the three months ended ~~March~~June 3130, 2025, we recorded a fair value adjustment of $1.2 million (representing the difference between the

During the three months ended March 31, 2024, we entered into an agreement to sell a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI at a price of 99.5%. We recorded a fair value adjustment of $0.7 million (representing the difference between the loan'note’s amortized cost and the ~~loan'~~note’s fair value atas ~~the~~of ~~agreed~~June ~~upon~~30, ~~price of 99.5%~~2025), which ~~was~~is included within ~~valuation~~Valuation allowance, ~~commercial~~loans ~~mortgage~~and ~~loan~~other lending assets held for sale on our condensed consolidated statement of operations. ~~for~~The ~~the~~note ~~three~~was ~~months~~subsequently ~~ended~~sold ~~March~~in ~~31,~~July ~~2024~~2025 at a price of 97.0%, ~~The~~upon ~~sale~~which ~~subsequently~~we ~~closed~~reversed inthe ~~April~~valuation ~~2024.~~allowance and recorded an equivalent realized loss.

~~The~~During ~~following~~the ~~table~~three ~~summarizes~~months ~~the~~ended ~~levels~~June in30, ~~the~~2024, ~~fair~~we ~~value~~sold ~~hierarchy~~a ~~into~~commercial ~~which~~mortgage ~~our~~loan ~~assets~~collateralized ~~and~~by ~~liabilities~~a ~~with~~hotel ~~recurring~~property ~~fair~~located ~~value~~in ~~measurements~~Honolulu, ~~were~~HI. ~~categorized~~The loan was previously classified as held for sale and was sold at a price of ~~March~~99.5%. ~~31,~~We ~~2025~~recorded ~~and~~a ~~December~~realized ~~31,~~loss ~~2024~~of ($0.7 inmillion ~~thousands):~~within realized loss on investments on our condensed consolidated statement of operations for the three and six months ended June 30, 2024.

	Fair Value as of March 31, 2025								Fair Value as of December 31, 2024
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Recurring fair value measurements:
Foreign currency forwards, net	$	—	$	15,924	$	—	$	15,924	$	—	$	57,753	$	—	$	57,753
Interest rate cap assets		—		243		—		243		—		416		—		416
Note receivable, held for sale		—		—		41,200		41,200		—		—		41,200		41,200
Total financial instruments	$	—	$	16,167	$	41,200	$	57,367	$	—	$	58,169	$	41,200	$	99,369

The following table summarizes the levels in the fair value hierarchy into which our assets and liabilities with recurring fair value measurements were categorized as of June 30, 2025 and December 31, 2024 ($ in thousands):


	Fair Value as of June 30, 2025										Fair Value as of December 31, 2024
	Level I		Level II			Level III		Total			Level I		Level II		Level III		Total
Recurring fair value measurements:
Foreign currency forwards, net	$	—	$	(57,758	)	$	—	$	(57,758	)	$	—	$	57,753	$	—	$	57,753
Interest rate cap assets		—		171			—		171			—		416		—		416
Note receivable, held for sale		—		—			39,964		39,964			—		—		41,200		41,200
Total financial instruments	$	—	$	(57,587	)	$	39,964	$	(17,623	)	$	—	$	58,169	$	41,200	$	99,369

Non-recurring Fair Value Measurements

Real Estate Owned

Property acquired through foreclosure or deed-in-lieu of foreclosure is classified as real estate owned and recognized at fair value on our condensed consolidated balance sheet upon acquisition in accordance with ASC Topic 805, "Business Combinations" ("ASC 805"). We are required to record real estate owned, a nonfinancial asset, at fair value on a non-recurring basis in accordance with ASC 820. Under ASC 820, we may utilize the income, market or cost approach (or combination thereof) to determine the fair value of real estate owned. We deem the inputs used in these approaches to be significant unobservable inputs. Therefore, we classify the fair value of real estate owned within Level III of the fair value hierarchy.

On March 31, 2023, we acquired legal title of a hotel property in Atlanta, GA ("Atlanta Hotel") through a deed-in-lieu of foreclosure. At the time of acquisition, we determined the fair value of the net real estate assets to be $75.0 million, using a combination of market and income approaches. We utilized a discount rate and capitalization rate of 10.5% and 9.5%, respectively. During the second quarter of 2023, the Atlanta Hotel's assets and liabilities were reclassified to held for sale and the fair value of the net real estate assets, less costs to sell, was in excess of our cost basis. During the first quarter of 2024, we determined that the sale to a third party from whom we received an unsolicited offer was no longer probable, and we were not actively marketing the property for sale. Therefore, the Atlanta Hotel no longer met the criteria for held for sale and was reclassified to real estate owned, held for investment. No impairments had been recorded as of ~~March~~June 3130, 2025 or December 31, 2024.

On August 3, 2022, we acquired legal title of the Brooklyn Multifamily Development through a deed-in-lieu of foreclosure. We determined the fair value of the real estate assumed to be $270.1 million, based on the market value of the land at the time of acquisition. No impairments had been recorded as of ~~March~~June 3130, 2025 or December 31, 2024.

On May 24, 2021, we acquired legal title to the D.C. Hotel through a deed-in-lieu of foreclosure. We assumed the D.C. Hotel's assets and liabilities, including a $110.0 million mortgage loan which we repaid at par. At the time of acquisition, we determined the fair value of the real estate assets to be $154.3 million. No impairments had been recorded as of ~~March~~June 3130, 2025 or December 31, 2024.

Refer to "Note 5 – Real Estate Owned" for additional discussion.

Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net

Our loan portfolio was comprised of the following at ~~March~~June 3130, 2025 and December 31, 2024 ($ in thousands):

Loan Type	~~March~~June 3130, 2025		December 31, 2024
Commercial mortgage loans, net(1)	$	78,~~285~~479,~~022~~438	$	6,715,347
Subordinate loans, net		~~402~~145,~~064~~472		388,809
Total loans, net	$	78,~~687~~624,~~086~~910	$	7,104,156
Note receivable, held for sale		4139,~~200~~964		41,200
Carrying value, net	$	78,~~728~~664,~~286~~874	$	7,145,356

(1)

Includes $4.2 million and $8.3 million in 2025 and 2024, respectively, of contiguous financing structured as subordinate loans.

Our loan portfolio consisted of 9596% floating rate loans, based on amortized cost, net of Specific CECL Allowance, as of ~~March~~June 3130, 2025 and December 31, 2024.

Activity relating to our loan portfolio for the ~~three~~six months ended ~~March~~June 3130, 2025 was as follows ($ in thousands):

	PrincipalBalance			Deferred Fees/Other Items			Specific CECL Allowance			Carrying Value, Net(1)
December 31, 2024	$	7,550,410		$	(31,718	)	$	(342,500	)	$	7,176,192
New loan fundings		~~460~~1,~~452~~376,101			—			—			~~460~~1,~~452~~376,101
Add-on loan fundings(2)		72467,~~867~~200			—			—			72467,~~867~~200
Loan repayments and sale		(93724,~~400~~016	)		—			—			(93724,~~400~~016	)
Gain (loss) on foreign currency translation		~~148~~425,~~405~~832			(~~503~~1,668	)		—			~~147~~424,~~902~~164
Deferred fees and other items(3)		—			(6,854	)		—			(6,854	)
Valuation allowance, loans and other lending assets held for sale		—			(1,236	)		—			(1,236	)
Amortization of fees		—			5,839			—			5,839
Deferred fees and other items(3)		—			(26,899	)		—			(26,899	)
March 31, 2025	$	8,138,734		$	(33,236	)	$	(342,500	)	$	7,762,998
Amortization of fees		—			12,216			—			12,216
General CECL Allowance(4)											(34,712	)
June 30, 2025	$	9,095,527		$	(49,305	)	$	(342,500	)	$	8,703,722
Carrying value, net										$	7,728,286
General CECL Allowance(4)											(38,848	)
Carrying value, net										$	8,664,874

(1)

Includes Note receivable, held for sale.

(2)

Represents fundings subsequent to loan closing.

(3)

Other items primarily consist of purchase discounts or premiums, cost recovery interest, exit fees, and deferred origination expenses.

(4)

$65.1 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet.

The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):

	March 31, 2025(1)			December 31, 2024(1)
	June 30, 2025(1)			December 31, 2024(1)
Number of loans		4954			46
Principal balance	$	89,~~138~~095,~~734~~527		$	7,550,410
Carrying value, net	$	78,~~728~~664,~~286~~874		$	7,145,356
Unfunded loan commitments(2)	$	~~989~~1,~~243~~018,901		$	840,627
Weighted-average cash coupon(3)		7.32	%		7.5	%
Weighted-average remaining fully-extended term(4)	2.47 years			2.5 years
Weighted-average expected term(5)	12.70 years			1.9 years

(1)

Includes Note receivable, held for sale.

(2)

Unfunded loan commitments are primarily funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date.

(3)

For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on nonaccrual, the interest rate used in calculating weighted-average cash coupon is 0%.

(4)

Assumes all extension options are exercised.

(5)

Expected term represents our estimated timing of repayments as of the specified dates. Excludes risk-rated five loans.

Property Type

The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2025				December 31, 2024
	June 30, 2025				December 31, 2024
Property Type	Carrying Value			% of Portfolio(1)	Carrying Value			% of Portfolio(1)
Residential(2)	$	12,~~880~~126,~~046~~799		24.46%	$	1,556,819		21.8%
Office		12,~~818~~027,~~410~~872		23.5		1,756,965			24.6
Hotel		1,~~602~~371,~~392~~199		2015.8		1,575,270		22.1
Retail		~~955~~1,~~275~~190,400		1213.47		946,017		13.3
Industrial		~~598~~1,~~139~~057,883		712.72		399,546		5.6
Mixed Use		~~317~~313,~~103~~526		43.16		363,211		5.1
Other(3)		~~550~~576,~~433~~079		76.16		537,164		7.5
Total	$	78,~~721~~663,~~798~~758		100.0%	$	7,134,992		100.0%
General CECL Allowance(4)		(3438,~~712~~848	)			(30,836	)
Total Carrying Value, net	$	78,~~687~~624,~~086~~910			$	7,104,156

(1)

Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)

Includes ~~residential-for-sale~~senior housing (67.45%), multifamily (57.52%), ~~senior~~student housing (64.01%), ~~student~~residential-for-sale ~~housing~~ (4.40%), and vacation rentals (2.1.8%) in 2025 and ~~residential-for-sale~~senior housing (54.57%), multifamily (4.7%), ~~senior~~student housing (4.76%), ~~student~~residential-for-sale ~~housing~~ (45.65%), and vacation rentals (2.3%) in 2024.

(3)

Other property types include pubs (2.86%), caravan parks (2.64%), and urban predevelopment (1.76%) in 2025, and pubs (2.9%), caravan parks (2.7%), and urban predevelopment (1.9%) in 2024.

(4)

$65.1 million and $5.9 million of the General CECL Allowance for 2025 and 2024, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Geography

The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):

	March 31, 2025				December 31, 2024
	June 30, 2025				December 31, 2024
Geographic Location	Carrying Value			% of Portfolio(1)	Carrying Value			% of Portfolio(1)
United Kingdom	$	23,~~489~~140,~~538~~487		3236.12%	$	2,423,856		33.9%
New York City		1,~~541~~497,~~713~~147		2017.03		1,539,995		21.6
Other Europe(2)		1,~~336~~157,~~205~~797		1713.3		1,265,344		17.7
Southeast		815,827		10.6		511,742		7.2
West		899,484		10.4		489,008		6.9
West		632,901		8.2		489,008		6.9
Southeast		804,340		9.3		511,742		7.2
Midwest		~~560~~559,~~052~~857		76.35		560,436		7.9
Other(3)		~~345~~604,~~562~~646		47.50		344,611		4.8
Total	$	78,~~721~~663,~~798~~758		100.0%	$	7,134,992		100.0%
General CECL Allowance(4)		(3438,~~712~~848	)			(30,836	)
Total Carrying Value, net	$	78,~~687~~624,~~086~~910			$	7,104,156

(1)

Percentage of portfolio calculations are made prior to consideration of General CECL Allowance.

(2)

Other Europe includes Germany (87.29%), Italy (2.32%), ~~Spain (3.4%),~~ Sweden (3.20%) and the Netherlands (0.2%) in 2025 and Germany (8.4%), Italy (2.4%), Spain (3.5%), Sweden (3.1%) and the Netherlands (0.3%) in 2024.

(3)

Other includes Northeast (03.53%), Mid-Atlantic (1.43%), Southwest (1.43%) and Other (1.21%) in 2025 and Northeast (0.6%), Mid-Atlantic (1.4%), Southwest (1.5%) and Other (1.3%) in 2024.

(4)

Risk Rating

We assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, loan to value ("LTV") ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. We apply these various factors on a case-by-case basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations. This review is performed quarterly. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, which ratings are defined as follows:

1. Very low risk

2. Low risk

3. Moderate/average risk

4. High risk/potential for loss: a loan that has a risk of realizing a principal loss

5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss, or an impairment has been recorded

The following tables present the carrying value of our loan portfolio by year of origination and internal risk rating and gross write-offs by year of origination as of ~~March~~June 3130, 2025 and December 31, 2024, respectively ($ in thousands):

March 31, 2025
June 30, 2025
							Amortized Cost(1) by Year Originated
Risk Rating	Number of Loans		Total			% of Portfolio	2025		2024		2023		2022		2021		Prior
1		—	$	—		— %	$	—	$	—	$	—	$	—	$	—	$	—
2		2		~~578~~734,~~527~~766		78.5%	$	—	$	—	$	—	$	~~578~~734,~~527~~766	$	—	$	—
3		4147		67,~~729~~731,~~675~~635		8789.23%	$	~~447~~1,~~501~~366,726	$	1,~~251~~505,~~720~~783	$	~~667~~705,~~922~~416	$	1,~~570~~668,~~998~~645	$	1,~~220~~274,~~525~~987	$	1,~~571~~210,~~009~~078
4		21		~~288~~73,~~961~~112		30.78%	$	—	$	—	$	—	$	—	$	—	$	~~288~~73,~~961~~112
5		3		124,~~635~~245		1.64%	$	—	$	—	$	—	$	—	$	—	$	124,~~635~~245
Total		4853	$	78,~~721~~663,~~798~~758		100.0%		~~447~~1,~~501~~366,726		1,~~251~~505,~~720~~783		~~667~~705,~~922~~416		2,~~149~~403,~~525~~411		1,~~220~~274,~~525~~987		1,~~984~~407,~~605~~435
General CECL Allowance(2)				(3438,~~712~~848	)
Total loans, net			$	78,~~687~~624,~~086~~910
Weighted-Average Risk Rating				3.0
Gross write-offs			$	—			$	—	$	—	$	—	$	—	$	—	$	—


December 31, 2024
									Amortized Cost(1) by Year Originated
Risk Rating	Number of Loans		Total			% of Portfolio			2024		2023		2022		2021		2020		Prior
1		—	$	—			—	%	$	—	$	—	$	—	$	—	$	—	$	—
2		3		560,180		7.9%				—		—		547,851		12,329		—		—
3		37		6,169,860		86.4%				1,218,189		649,599		1,549,750		1,173,982		397,972		1,180,368
4		2		279,732		3.9%				—		—		—		—		—		279,732
5		3		125,220		1.8%				—		—		—		—		27,881		97,339
Total		45	$	7,134,992		100.0%			$	1,218,189	$	649,599	$	2,097,601	$	1,186,311	$	425,853	$	1,557,439
General CECL Allowance(2)				(30,836	)
Total loans, net			$	7,104,156
Weighted-Average Risk Rating				3.0
Gross write-offs			$	127,512					$	—	$	—	$	127,512	$	—	$	—	$	—

(1)

Net of Specific CECL Allowance.

(2)

CECL

In accordance with ASC Topic 326 "Financial Instruments – Credit Losses" ("ASC 326"), which we refer to as the "CECL Standard," we record allowances for loans and held-to-maturity debt securities that are deducted from the carrying amount of the assets to present the net carrying value of the amounts expected to be collected on the assets. We record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing financial difficulty. For the remainder of the portfolio, we record a general allowance ("General CECL Allowance," and together with the Specific CECL Allowance, "CECL Allowances") on a collective basis by assets with similar risk characteristics. We have elected to use the weighted-average remaining maturity ("WARM") method in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method.

The following table summarizes changes in CECL Allowances for the ~~three~~six months ended ~~March~~June 3130, 2025 ($ in thousands):

	Specific CECL		General CECL Allowance							Total CECL		CECL Allowance as % of Amortized Cost
	Allowance(1)		Funded		Unfunded			Total		Allowance		General(1)			Total
December 31, 2024	$	342,500	$	30,836	$	5,948		$	36,784	$	379,284		0.52	%		5.07	%
Changes:
Allowances (Reversals), net(2)		—		3,876		132			4,008		4,008
Write-offs		—		—		—			—		—
March 31, 2025	$	342,500	$	34,712	$	6,080		$	40,792	$	383,292		0.54	%		4.75	%
Changes:
Allowances (Reversals), net(3)		—		4,136		(1,023	)		3,113		3,113
June 30, 2025	$	342,500	$	38,848	$	5,057		$	43,905	$	386,405		0.51	%		4.29	%

(1)

Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.

(2)

During the three months ended March 31, 2025, our General CECL Allowance increased by $4.0 million. The increase was primarily due to a more adverse macroeconomic outlook as well as the effect of loan originations. The increase was partially offset by the favorable impacts of portfolio seasoning.

(3)

~~The~~During ~~following~~the ~~table~~three ~~summarizes~~months ~~changes~~ended inJune 30, 2025, our General CECL ~~Allowances~~Allowance ~~for~~increased by $3.1 million. The increase was primarily due to the ~~three~~effect ~~months~~of ~~ended~~loan ~~March~~originations ~~31,~~as ~~2024~~well ($as inextending ~~thousands):~~our expected loan repayment dates. The increase was partially offset by the favorable impacts of portfolio seasoning.

	Specific CECL		General CECL Allowance							Total CECL		CECL Allowance as % of Amortized Cost
	Allowance(1)		Funded		Unfunded			Total		Allowance		General(1)			Total
December 31, 2023	$	193,000	$	26,482	$	4,017		$	30,499	$	223,499		0.38	%		2.61	%
Changes:
Allowances (Reversals), net(2)		142,000		6,076		(392	)		5,684		147,684
March 31, 2024	$	335,000	$	32,558	$	3,625		$	36,183	$	371,183		0.44	%		4.29	%

The following table summarizes changes in CECL Allowances for the six months ended June 30, 2024 ($ in thousands):


	Specific CECL		General CECL Allowance							Total CECL		CECL Allowance as % of Amortized Cost
	Allowance(1)		Funded		Unfunded			Total		Allowance		General(1)			Total
December 31, 2023	$	193,000	$	26,482	$	4,017		$	30,499	$	223,499		0.38	%		2.61	%
Changes:
Allowances (Reversals), net(2)		142,000		6,076		(392	)		5,684		147,684
March 31, 2024	$	335,000	$	32,558	$	3,625		$	36,183	$	371,183		0.44	%		4.29	%
Changes:
Allowances (Reversals), net(3)		7,500		2,761		(3	)		2,758		10,258
June 30, 2024	$	342,500	$	35,319	$	3,622		$	38,941	$	381,441		0.47	%		4.40	%

(1)

Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool.

(2)

During the three months ended March 31, 2024, our General CECL Allowance increased by $5.7 million. The increase was primarily related to extending our expected loan repayment dates as well as an increase to the historical loss rate derived from Trepp's data. The increase was partially offset by the favorable impacts of portfolio seasoning. During the three months ended March 31, 2024, we also recorded an additional $142.0 million Specific CECL Allowance on our Junior Mezzanine A Loan (as defined below - see "Manhattan Residential"), resulting in the loan’s aggregate Specific CECL allowance of $268.0 million. The additional allowance was recorded primarily due to a reduction in list pricing of remaining units and slower sales pace at the property. The slower sales velocity coincided with the continued overall softening in the midtown Manhattan ultra-luxury submarket.

(3)

During the three months ended June 30, 2024, our General CECL Allowance increased by $2.8 million primarily due to new loan originations as well as a more adverse outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning. Additionally, during the

three months ended June 30, 2024, we recorded an increase of $7.5 million to our Specific CECL Allowance. The increase was related to a mezzanine loan secured by an office building in Troy, MI.

General CECL Allowance

In determining the General CECL Allowance using the WARM method, an annual historical loss rate, adjusted for macroeconomic estimates, is applied to the amortized cost of an asset, or pool of assets, over each subsequent period for the assets' remaining expected life. We considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment for a reasonable and supportable forecast period. The CECL Standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions, including inflation, labor shortages and interest rates.

We derive an annual historical loss rate based on a commercial mortgage-backed securities ("CMBS") database with historical losses from 1998 through the ~~first~~second quarter of 2025 provided by a third party, Trepp LLC ("Trepp"). We apply various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate is further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period of eight quarters. In assessing the macroeconomic environment, we consider macroeconomic factors, including unemployment rate, commercial real estate prices, and market liquidity. We compare the historical data for each metric to historical commercial real estate losses in order to determine the correlation of the data. We use projections, obtained from third-party service providers, of each factor to approximate the impact the macroeconomic outlook may have on our loss rate.

The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan(s). The subordinate loans, by virtue of being the first loss position, are required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheets within accounts payable, accrued expenses and other liabilities. The considerations in estimating our General CECL allowance for unfunded loan commitments are similar to those used for the related outstanding loans receivable.

Additionally, we have made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of the related commercial mortgage loans and subordinate loans and other lending assets in determining the General CECL Allowance, as any uncollectible accrued interest receivable is written off in a timely manner. As of ~~March~~June 3130, 2025 and December 31, 2024, accrued interest receivable was $6174.09 million and $58.5 million, respectively, and included within other assets on our condensed consolidated balance sheets.

~~Although~~The ~~our~~following ~~secured~~table ~~debt~~sets ~~obligations~~forth ~~and~~our ~~senior secured term loan financing have a minimum tangible net worth maintenance covenant, the~~ General CECL Allowance ~~has no impact on these covenants~~ as weof ~~are~~June ~~permitted~~30, to2025 ~~add~~and ~~back~~December ~~the~~31, ~~General~~2024 ~~CECL~~($ ~~Allowance for the computation of tangible net worth as defined~~ in ~~the~~thousands): ~~respective agreements.~~

The following table sets forth our General CECL Allowance as of March 31, 2025 and December 31, 2024 ($ in thousands):


	June 30, 2025		December 31, 2024
Commercial mortgage loans, net	$	38,675	$	30,167
Subordinate loans, net		173		669
Unfunded commitments(1)		5,057		5,948
Total General CECL Allowance	$	43,905	$	36,784

(1)

	March 31, 2025		December 31, 2024
Commercial mortgage loans, net	$	33,657	$	30,167
Subordinate loans, net		1,055		669
Unfunded commitments(1)		6,080		5,948
Total General CECL Allowance	$	40,792	$	36,784

The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheets within accounts payable, accrued expenses and other liabilities.

Specific CECL Allowance

For collateral-dependent loans where we have deemed the borrower/sponsor to be experiencing financial difficulty and a more than moderate/average risk of realizing a principal loss, we have elected to apply a practical expedient in accordance with the CECL Standard in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the

~~the CECL Standard in which the fair value of the~~ underlying collateral ~~is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the underlying collateral~~ and the carrying value of the loan (prior to the Specific CECL Allowance). When the repayment or satisfaction of a loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated cost to sell the collateral. Collateral-dependent loans evaluated for a Specific CECL Allowance are removed from the General CECL Allowance pool. The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. The key unobservable inputs used to determine the fair value of the underlying collateral may vary depending on the information available to us and market conditions as of the valuation date.

We regularly evaluate the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. The Specific CECL Allowance is evaluated on a quarterly basis. Specifically, a property's operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the liquidation value of the underlying collateral. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower's competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such impairment analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower's exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants.

The following table summarizes our risk rated 5 loans as of ~~March~~June 3130, 2025, which were analyzed for Specific CECL Allowances ($ in thousands):

Type	Property type	Location	Amortized cost prior to Specific CECL Allowance		Specific CECL Allowance		Amortized cost		Interest recognition status/ as of date	Risk Rating
Mortgage	Retail(1)(2)	Cincinnati, OH	$	163,~~754~~364	$	67,000	$	96,~~754~~364	Nonaccrual/ 10/1/2019	5
Mezzanine	Residential(3)	Manhattan, NY		295,881		268,000		27,881	Nonaccrual/ 7/1/2021	5
Mezzanine	Office(4)	Troy, MI		7,500		7,500		-	Nonaccrual/ 6/30/2024	5
Total			$	~~467~~466,~~135~~745	$	342,500	$	124,~~635~~245

(1)

The fair value of retail collateral was determined by applying a capitalization rate of 9.0%.

(2)

In September 2018, we entered a joint venture with Turner Consulting II, LLC ("Turner Consulting"), through an entity which owns the underlying property that secures our loan. Turner Consulting contributed 10% of the venture's equity and we contributed 90%. The entity was deemed to be a variable interest entity ("VIE"), and we determined that we are not the primary beneficiary of that VIE as we do not have the power to direct the entity's activities. During the second quarter of 2024, the loan's maturity was extended from September 2024 to September 2025.

(3)

The fair value of the residential collateral was determined by making certain projections and assumptions with respect to future performance and a discount rate of 10%. Any future change to the Specific CECL Allowance will be based upon a number of factors, including but not limited to the continued assessment of both the potential nominal value of remaining inventory as well as the expected sales velocity.

(4)

The fair value of the office collateral was determined by applying an exit capitalization rate of 10% and a discount rate of 20%.

For the three months ended March 31, 2025, there was no change in our Specific CECL Allowance.

Loan Modifications Pursuant to ASC 326

WeDuring the twelve months ended June 30, 2025, we provided the following ~~modifications~~loan modification that ~~require~~requires disclosure pursuant to ASC 326 ~~during the twelve months ended March 31, 2025~~.

~~Manhattan~~During ~~Residential~~the —three ~~111~~months ~~West~~ended ~~57th~~June ~~Street~~30, 2025, we modified our commercial mortgage loan secured by an office property in Berlin, Germany (the "Berlin Office Loan"). The loan’s final maturity date was extended from August 2026 to June 2030. The loan is performing pursuant to its modified contractual terms, and the loan’s risk rating was upgraded from a 4 to a 3.

~~During~~As ~~the~~of ~~second~~June ~~quarter~~30, ~~of 2024~~2025, ~~our~~the ~~commercial~~amortized ~~mortgage~~cost ~~loan~~basis ~~secured~~of bythe anBerlin ~~ultra-luxury~~Office ~~property in Manhattan, NY ("Senior~~ Loan") was ~~refinanced by a third-party lender, which resulted in a repayment of~~ $~~108~~235.32 million., ~~The~~or ~~remaining~~2.7% ~~Senior~~of ~~Loan~~our ~~balance~~aggregate ~~was~~commercial ~~restructured~~mortgage ~~into~~loans aand subordinate ~~loan~~loans ~~("Senior~~by ~~Mezzanine~~amortized Acost. ~~Loan"),~~The ~~and~~loan ~~the~~had ~~maturity~~an ~~date~~unfunded ~~was~~commitment ~~extended~~of ~~by fourteen months to November 2025~~$36.7 ~~Concurrently,~~million ~~the~~as ~~maturities~~ of ~~our~~June ~~additional~~30, ~~mezzanine loans secured by the property~~ 2025.

("Senior Mezzanine Loan" and "Junior Mezzanine A Loan") were also extended to November 2025. All three loans remain on nonaccrual status subsequent to the refinancing. Based on our analysis under ASC 310-20, we have deemed this refinance to be a continuation of our existing loans.

Cleveland Multifamily

In May 2021, we originated a first mortgage loan secured by a multifamily property in Cleveland, OH. During the second quarter of 2024, we modified our loan to convert from a floating rate of Secured Overnight Financing Rate ("SOFR") + 3.25% to a 6.0% fixed rate, and to provide a two year term extension. These modified terms are included in the determination of our general CECL allowance for the first quarter of 2025. The loan is performing pursuant to its modified contractual terms, and its risk rating remains a 3 as of March 31, 2025.

Manhattan Office

In March 2022, we originated a first mortgage loan secured by an office property in Manhattan, NY. During the second quarter of 2024, we modified our loan to convert from a floating rate of SOFR + 3.92% to a 5.0% fixed rate. The loan is performing pursuant to its modified contractual terms and its risk rating remains a 3 as of March 31, 2025.

As of March 31, 2025 and December 31, 2024, the aggregate amortized cost basis, net of Specific CECL Allowance, of these modified receivables was $735.8 million and $721.7 million, respectively, or 9.5% and 10.1% of our aggregate commercial mortgage loans and subordinate loans by amortized cost, respectively. Unfunded commitments related to these loans as of March 31, 2025 and December 31, 2024 were $10.3 million and $10.6 million, respectively.

Nonaccrual and Past Due Loans

We cease accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. The amortized cost basis, net of Specific CECL Allowance, for loans on nonaccrual was $499.9 million and $486.8 million as of March 31, 2025 and December 31, 2024, respectively. 16

~~Under~~We ~~certain~~cease ~~circumstances,~~accruing weinterest ~~may~~on ~~apply~~loans if we deem the ~~cost~~interest ~~recovery~~to ~~method~~be ~~under~~uncollectible ~~which~~with ~~interest~~any ~~collected~~previously onaccrued auncollected ~~loan~~interest ~~reduces~~on the loan's ~~amortized~~charged ~~cost.~~to Weinterest ~~received~~income ~~$0.6 million~~ in ~~interest~~the ~~that~~same ~~reduced~~period. The amortized cost ~~under~~basis, ~~the~~net ~~cost~~of ~~recovery~~Specific ~~method~~CECL ~~during~~Allowance, ~~both~~for ~~the~~loans ~~three~~on ~~months~~nonaccrual ~~ended~~was ~~March~~$366.9 ~~31,~~million ~~2025~~ and ~~the~~$486.8 ~~three~~million ~~months~~as ~~ended~~of ~~March~~June 30, 2025 and December 31, 2024, respectively.

AsUnder ofcertain ~~March 31~~circumstances, ~~2025~~we ~~and~~may ~~December~~apply ~~31, 2024,~~ the ~~amortized~~ cost ~~basis,~~recovery ~~net~~method ofunder ~~Specific~~which ~~CECL~~interest ~~Allowance,~~collected ~~for~~on ~~loans~~a ~~that~~loan ~~are~~reduces ~~past~~the ~~due~~loan's 90amortized ~~days~~cost. orWe ~~more~~received ~~as to principal or interest, was~~ $~~499~~0.94 million and $~~486~~1.80 million, ~~respectively.~~in Asinterest ofthat ~~March~~reduced ~~31,~~amortized ~~2025~~cost under the cost recovery method during the three and ~~December~~six 31months ended June 30, ~~2024~~2025, ~~there~~respectively, ~~were~~and no$0.8 ~~loans~~million ~~with~~and ~~accrued~~$1.4 ~~interest~~million ~~between~~during 30the three and 89six ~~days~~months ~~past~~ended ~~due~~June 30, 2024, respectively.

~~Pre-payment~~As ~~penalties~~of June 30, 2025 and ~~accelerated~~December ~~fees~~31, 2024, the amortized cost basis, net of Specific CECL Allowance, for loans that are past due 90 days or more as to principal or interest, was $366.9 million and $486.8 million, respectively. As of June 30, 2025 and December 31, 2024, there were no loans with accrued interest between 30 and 89 days past due.

WeManhattan ~~did~~Residential ~~not~~— ~~recognize~~111 ~~any~~West ~~pre-payment~~57th ~~penalties and accelerated fees for the three months ended March 31, 2025. For the three months ended March 31, 2024, we recognized $0.1 million of pre-payment penalties and accelerated fees.~~Street

During the three months ended June 30, 2025, the third-party mortgage, which was senior to our mezzanine positions secured by an ultra-luxury residential property in Manhattan, NY, was repaid in full. Accordingly, our Senior Mezzanine A Loan and a portion of our Senior Mezzanine Loan were restructured into a mortgage loan (the "Senior Loan") as we are now the sole lender in the capital structure. The Senior Loan remains on nonaccrual status subsequent to the restructuring.

Pre-payment penalties, accelerated fees, and Paid-In-Kind ("PIK") interest

We recognized $0.4 million in pre-payment penalties and accelerated fees for both the three and six months ended June 30, 2025 and $0.7 million and $0.8 million for the three and six months ended June 30, 2024, respectively.

We recognized PIK interest of $0.3 million for the three and six months ended June 30, 2025. There was no recognized PIK interest during the three and six months ended June 30, 2024.

Loan Sales

From time to time, we may enter into sale transactions with other parties. All sale transactions are evaluated in accordance with ASC Topic 860, "Transfers and Servicing" ("ASC 860").

In February 2025, we originated a $114.0 million commercial mortgage loan secured by a multifamily property located in Miami, FL, which included a $24.0 million contiguous subordinate loan. In March 2025, we sold our interest in the $24.0 million subordinate loan. We evaluated the transaction under ASC 860 and determined the sale met the criteria for sale accounting. We recorded no gain or loss related to this transaction.

During the three months ended June 30, 2024, we sold a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI. The loan was previously classified as held for sale and was sold at a price of 99.5%. Upon selling the commercial mortgage loan, we reversed the previously recorded valuation allowance and recorded a realized loss of $0.7 million included within realized loss on investments on our condensed consolidated statement of operations for the three and six months ended June 30, 2024.

Held for Sale

Loans are classified as held for sale if there is an intent to sell them in the short-term following the reporting date. Loans classified as held for sale are carried at the lower of amortized cost or fair value less costs to sell, unless the fair value option is elected at origination. Additionally, held for sale loans are not subject to the General CECL Allowance.

AsDuring ofthe ~~March~~fourth ~~31,~~quarter ~~2025~~of ~~and December 31,~~ 2024, we ~~held~~received a ~~$41.2 million~~ promissory note ~~classified~~ as ~~held~~consideration ~~for~~related to the sale ~~and~~of ~~recorded~~one ~~within~~of ~~Note~~the ~~receivable,~~eight ~~held~~hospitals ~~for~~that ~~sale~~previously onsecured ~~our~~the ~~consolidated~~Massachusetts ~~balance~~Healthcare ~~sheet~~Loan atas ~~its~~defined ~~fair~~and ~~value~~discussed in "Note 6 – Other Assets." WeAs ~~received~~of ~~the~~June ~~promissory~~30, ~~note~~2025 ~~during~~and December 31, 2024, the ~~fourth~~promissory ~~quarter~~note ofwas ~~2024~~classified as ~~consideration~~held ~~related~~for tosale ~~the~~and ~~sale~~recorded ofwithin ~~one~~Note ofreceivable, ~~the~~held ~~eight~~for ~~hospitals~~sale ~~that~~on ~~previously~~our ~~secured~~consolidated ~~the~~balance ~~Massachusetts~~sheet ~~Healthcare~~at ~~Loan~~its asfair ~~discussed~~value inof ~~"Note~~$40.0 6million –and ~~Other~~$41.2 ~~Assets~~million, respectively." ~~Refer~~The ~~also~~note towas ~~"Note~~subsequently 3sold –in ~~Fair~~July ~~Value~~2025 ~~Disclosure"~~at ~~for~~a ~~further~~price ~~discussion~~of on97.0%, ~~held~~upon ~~for~~which ~~sale~~we ~~classification~~reversed its valuation allowance and ~~fair~~recorded ~~value~~an ~~measurement~~equivalent ~~policies~~realized loss.

Refer also to "Note 3 – Fair Value Disclosure" for further discussion on held for sale classification and fair value measurement policies.

Note 5 – Real Estate Owned

Real Estate Owned, Held for Investment

As of ~~March~~June 3130, 2025, assets and liabilities related to real estate owned, held for investment consisted of three properties: the D.C. Hotel, a full-service luxury hotel in Washington, D.C., the Brooklyn Multifamily Development, a multifamily development property located in downtown Brooklyn, NY, and the Atlanta Hotel, a hotel in Atlanta, GA.

Refer to "Note 3 – Fair Value Disclosure" for full discussion of non-recurring fair value measurements.

D.C. Hotel

In 2021, we acquired legal title to the D.C. Hotel, which previously secured two subordinate loans, through a deed-in-lieu of foreclosure. In accordance with ASC 805, we consolidated the hotel's assets and liabilities at their respective fair values.

As of ~~March~~June 3130, 2025 and December 31, 2024, the value of net real estate assets related to the D.C. Hotel was $~~158~~157.07 million and $157.1 million, respectively. As of ~~March~~June 3130, 2025, our net real estate assets included depreciable assets of $78.95 million, net of $910.84 million in accumulated depreciation, attributable to the building, and $6.30 million, net of $6.16 million in accumulated depreciation, attributable to furniture, fixtures, and equipment ("FF&E"). As of December 31, 2024, our net real estate assets included depreciable assets of $79.1 million, net of $9.1 million in accumulated depreciation, attributable to the building, and $6.0 million, net of $5.6 million in accumulated depreciation, attributable to FF&E.

In June 2024, we obtained a $73.7 million mortgage secured by the D.C. Hotel. The mortgage includes an interest rate of term one-month SOFR + 3.00% and current maturity of July 2026, with an option to extend for one year, contingent upon meeting certain conditions. The mortgage agreement contains covenants requiring our unencumbered liquidity be greater than $10.0 million and our net worth be greater than $200.0 million. Under these covenants, our General CECL Allowance is added back to our net worth calculation.

~~The~~As of June 30, 2025 and December 31, 2024, the carrying value of the mortgage included within debt related to real estate owned, held for investment, net on our condensed consolidated balance sheet was $7273.80 million, net of $0.97 million in deferred financing costs and $72.6 million, net of $1.1 million in deferred financing costs, respectively. To manage our exposure to variable cash flows on our borrowings under this mortgage, we entered into an interest rate cap in June 2024. As of both ~~March~~June 3130, 2025 and December 31, 2024, the fair value of the interest rate cap was de minimis. Refer to "Note 10 – Derivatives" for full detail.

18We recorded net profit from the hotel’s operations of $3.6 million and $6.2 million for three and six months ended June 30, 2025, and net profit of $4.8 million and $5.9 million for three and six months ended June 30, 2024, respectively.

For the three months ended March 31, 2025 and 2024, we recorded net profit from hotel operations of $2.4 million and $1.1 million, respectively.

Brooklyn Multifamily Development

In 2022, we acquired legal title of a multifamily development property in downtown Brooklyn, NY, through a deed-in-lieu of foreclosure. The transaction was accounted for as an asset acquisition in accordance with ASC 805, and we recorded the real estate assumed at a fair value based on the market value of the property as of the date of acquisition.

Upon taking title, we concurrently contributed the property to a joint venture with a third-party real estate developer. The entity was deemed to be a VIE, of which we were determined to be the primary beneficiary. Through our wholly owned subsidiaries, we hold a 100% equity ownership interest in the joint venture and our partner is only entitled to profit upon achievement of certain returns under our joint venture agreement.

Additionally, upon taking title, we obtained $164.8 million in construction financing on the property. As of March 31, 2025 and December 31, 2024, the carrying value of the construction financing included within debt related to real estate owned, held for investment, net on our condensed consolidated balance sheets was $272.8 million, net of $1.7 million in deferred financing costs and $252.0 million, net of $2.0 million in deferred financing costs, respectively. 18

~~The~~Additionally, ~~construction~~upon ~~financing~~taking ~~includes~~title, awe ~~maximum~~obtained ~~commitment of~~ $~~388~~164.48 million, anin ~~interest~~construction ~~rate~~financing ofon ~~SOFR~~the +2property.~~55%,~~ ~~and~~As ~~current maturity~~ of ~~August~~June ~~2026~~30, ~~with~~2025 anand ~~option~~December to31, ~~extend for one year~~2024, ~~contingent~~the ~~upon~~carrying ~~meeting~~value ~~certain~~of ~~conditions.~~the ~~The~~ construction financing ~~agreement~~included ~~contains~~within ~~covenants~~debt ~~requiring~~related ~~our~~to ~~unencumbered~~real ~~liquidity~~estate beowned, ~~greater~~held ~~than~~for ~~$100.0~~investment, ~~million~~net ~~and~~on our ~~net~~condensed ~~worth~~consolidated bebalance ~~greater~~sheets ~~than~~was $~~600~~303.05 million~~. Under these covenants~~, ~~our General CECL Allowance is added back to our~~ net ~~worth~~of ~~calculation~~$1.4 Asmillion ofin ~~both~~deferred ~~March~~financing ~~31,~~costs ~~2025~~ and ~~December~~$252.0 31million, ~~2024,~~net weof ~~were~~$2.0 million in ~~compliance~~deferred ~~with~~financing ~~these~~costs, ~~covenants~~respectively.

ToThe ~~manage~~construction ~~our~~financing ~~exposure~~includes toa ~~variable~~maximum ~~cash~~commitment ~~flows~~of on$388.4 ~~our borrowings under this construction financing~~million, ~~we entered into~~ an interest rate ~~cap~~of inSOFR ~~September 2023~~+2.55%, and ~~extended~~current inmaturity ~~September~~of ~~2024~~August ~~for~~2026, with an ~~additional~~option ~~year.~~to Asextend offor ~~March~~one 31year, ~~2025~~contingent ~~and~~upon ~~December~~meeting ~~31,~~certain ~~2024,~~conditions. ~~the~~The ~~fair~~construction ~~value~~financing ofagreement ~~the~~contains ~~interest~~covenants ~~rate~~requiring ~~cap~~our ~~was~~unencumbered liquidity be greater than $0100.20 million and our net worth be greater than $0600.40 million,. ~~respectively~~Under these covenants, ~~and~~our ~~recorded~~General ~~within~~CECL ~~derivative~~Allowance ~~assets,~~is ~~net~~added onback to our ~~condensed~~net ~~consolidated~~worth ~~balance sheet~~calculation. ~~Refer~~As toof ~~"Note~~both 10June –30, ~~Derivatives"~~2025 ~~for~~and ~~full~~December ~~detail~~31, 2024, we were in compliance with these covenants.

AsTo ofmanage ~~March~~our ~~31,~~exposure ~~2025~~to ~~and~~variable ~~December~~cash ~~31,~~flows ~~2024,~~on our ~~cost~~borrowings ~~basis~~under inthis ~~the~~construction ~~property~~financing, ~~was~~we ~~$563.0~~entered ~~million~~into ~~and~~an ~~$540.9~~interest ~~million,~~rate ~~respectively~~cap in September 2023, and ~~included~~extended ~~capitalized~~in ~~construction~~September ~~and~~2024 ~~financing~~for ~~costs~~an asadditional year. As of ~~March~~June 3130, 2025 and December 31, 2024, the fair value of the interest rate cap was $~~341~~0.82 million and $~~319~~0.74 million, respectively., ~~During~~and ~~the~~recorded ~~three~~within ~~months~~derivative ~~ended March 31~~assets, ~~2025~~net ~~and~~on ~~2024,~~our wecondensed ~~capitalized~~consolidated ~~construction~~balance ~~and~~sheet. ~~financing~~Refer ~~costs~~to of"Note ~~$22.1~~10 ~~million~~– ~~and~~Derivatives" ~~$37.5~~for ~~million~~full ~~respectively~~detail.

As of June 30, 2025 and December 31, 2024, our cost basis in the property was $593.9 million and $540.9 million, respectively and included capitalized construction and financing costs as of June 30, 2025 and December 31, 2024 of $372.7 million and $319.7 million, respectively. We capitalized construction and financing costs of $30.9 million and $53.0 million during the three and six months ended June 30, 2025, respectively, and $39.9 million and $77.4 million during the three and six months ended June 30, 2024, respectively.

There is no depreciation recorded while the property is under development.

Atlanta Hotel

In March 2023, we acquired legal title of the Atlanta Hotel through a deed-in-lieu of foreclosure, and we consolidated the hotel's assets and liabilities at their respective fair values in accordance with ASC 805. The hotel was subsequently classified as held for sale during the second quarter of 2023.

~~During~~As ~~the~~of ~~second~~March ~~quarter~~31, ~~of 2023~~2024, wethe ~~received~~Atlanta anHotel ~~unsolicited~~no ~~offer~~longer ~~from~~met athe ~~third~~criteria ~~party~~ to ~~purchase~~be ~~the~~classified ~~Atlanta~~as ~~Hotel~~held for sale under ASC 360. AsIn ofaccordance ~~June~~with ~~30,~~ASC ~~2023~~360, the ~~hotel's~~REO ~~assets~~Fixed ~~and~~Assets ~~liabilities~~were ~~met~~reclassified ~~the~~to ~~criteria~~their tocarrying bevalue ~~classified~~before classifying as held for sale ~~under~~in ~~ASC~~June ~~360~~2023. InOn ~~accordance~~the ~~with~~date ~~ASC~~of ~~360~~reclassification, March 31, 2024, we ~~ceased~~recorded ~~recording~~$3.6 million in depreciation, onrepresenting the ~~building~~amount ~~and~~that ~~FF&E~~would onhave ~~the~~been ~~condensed~~recorded ~~consolidated~~had ~~statement~~the ofasset ~~operations~~remained ~~and~~as weheld ~~have~~for ~~reclassified~~investment. All other assets and liabilities ~~from~~were ~~their~~reclassified ~~respective~~to ~~condensed~~the ~~consolidated~~corresponding ~~balance sheet~~ line items toon ~~Assets~~our ~~related~~condensed toconsolidated ~~real~~balance ~~estate~~sheet. ~~owned,~~No ~~held~~realized ~~for~~gain ~~sale~~or ~~and~~loss ~~Liabilities~~was ~~related~~recorded toin ~~real~~connection ~~estate~~with ~~owned,~~this ~~held for sale~~reclassification.

As of ~~March~~June 30, 2025 and December 31, 2024, ~~we determined~~ the ~~sale~~value of ~~the~~net ~~Atlanta~~real ~~Hotel~~estate toassets arelated ~~third~~to ~~party,~~the ~~from~~Atlanta ~~whom~~Hotel wewas ~~received~~$70.2 anmillion ~~unsolicited~~and ~~offer~~$69.0 million, torespectively. beAs noof ~~longer~~June ~~probable~~30, ~~and~~2025, weour ~~are~~net ~~not~~real ~~actively~~estate ~~marketing~~assets ~~the~~included ~~property~~depreciable ~~for~~assets ~~sale~~of ~~to other potential buyers~~$39.9 ~~As such~~million, ~~the~~net ~~Atlanta~~of ~~Hotel~~$7.1 nomillion ~~longer~~in ~~met~~accumulated ~~the~~depreciation, ~~criteria~~attributable to bethe ~~classified~~building, asand ~~held~~$8.8 ~~for~~million, ~~sale~~net ~~under~~of ~~ASC 360~~$4.2 Inmillion ~~accordance~~in ~~with~~accumulated ~~ASC 360~~depreciation, ~~the~~attributable ~~REO Fixed Assets were reclassified~~ to ~~their~~FF&E. ~~carrying~~As ~~value~~of ~~before~~December ~~classifying~~31, as2024, ~~held~~our ~~for~~net ~~sale~~real inestate ~~June~~assets ~~2023.~~included Ondepreciable ~~the~~assets ~~date~~ of ~~reclassification,~~$44.7 ~~March 31~~million, ~~2024,~~net weof ~~recorded~~ $35.65 million in accumulated depreciation, ~~representing~~attributable ~~the~~to ~~amount that would have been recorded had~~ the ~~asset~~building, ~~remained~~and ~~as held for investment~~$6.7 ~~All~~million, ~~other~~net ~~assets~~of ~~and liabilities were reclassified to the corresponding line items on our condensed consolidated balance sheet~~$3.1 Nomillion ~~realized gain or loss was recorded~~ in ~~connection~~accumulated ~~with~~depreciation, ~~this~~attributable ~~reclassification~~to FF&E.

19For the three and six months ended June 30, 2025, we recorded net profit from the hotel's operations of $0.6 million and $1.1 million, respectively. For the three and six months ended June 30, 2024, we recorded net profit/(loss) from the hotel's operations of $0.2 million and ($1.6) million, respectively.

As of March 31, 2025 and December 31, 2024, the value of net real estate assets related to the Atlanta Hotel was $69.5 million and $69.0 million, respectively. As of March 31, 2025, our net real estate assets included depreciable assets of $43.1 million, net of $6.3 million in accumulated depreciation, attributable to the building, and $7.9 million, net of $3.6 million in accumulated depreciation, attributable to FF&E. As of December 31, 2024, our net real estate assets included depreciable assets of $44.7 million, net of $5.5 million in accumulated depreciation, attributable to the building, and $6.7 million, net of $3.1 million in accumulated depreciation, attributable to FF&E.

For the three months ended March 31, 2025 we recorded net profit from the hotel's operations of $0.5 million. For the three months ended March 31, 2024, we recorded net loss from the hotel's operations of $1.8 million.

Note 6 – Other Assets

The following table details the components of our other assets at the dates indicated ($ in thousands):

	March 31, 2025		December 31, 2024
Interest receivable	$	61,047	$	58,470
Loan proceeds held by servicer(1)		3,841		50,843
Other(2)(3)		33,057		28,714
Total	$	97,945	$	138,027


	June 30, 2025		December 31, 2024
Interest receivable	$	74,886	$	58,470
Collateral deposited under derivative agreements		56,140		—
Loan proceeds held by servicer(1)		4,530		50,843
Other(2)(3)		33,080		28,714
Total	$	168,636	$	138,027

(1)

Includes loan principal, interest, and other fees held by our third-party servicers as of the balance sheet date and remitted during subsequent remittance cycle.

(2)

Includes $8.9 million and $7.7 million of other assets from Real Estate Owned, Held for Investment as of ~~March~~June 3130, 2025 and December 31, 2024, respectively. Refer to "Note 5 – Real Estate Owned" for additional information.

(3)

Includes a $23.02 million equity method investment as of ~~March~~June 3130, 2025 and $20.1 million of other assets as of December 31, 2024, both of which are related to our former Massachusetts Healthcare Loan as discussed below (see "Massachusetts Healthcare")

Massachusetts Healthcare

In 2022, we and other Apollo-managed entities ("Apollo Co-Lenders") co-originated a first mortgage loan ("Massachusetts Healthcare Loan") secured by eight hospitals in Massachusetts. During the third quarter of 2024, we and the Apollo Co-Lenders, through a joint venture ("Massachusetts Healthcare JV"), acquired title to one of the eight hospitals that previously secured the Massachusetts Healthcare Loan. During the same period, the hospital was taken by eminent domain by the Commonwealth of Massachusetts (the "Commonwealth"). Refer to "Note 16 - Commitments and Contingencies" for additional information regarding the Commonwealth's taking of the hospital.

Additionally in the third quarter of 2024, guarantors made a guaranty payment on the Massachusetts Healthcare Loan, and the Borrowers transferred the deeds of the remaining seven hospitals into escrow, thereby releasing the borrowers from their obligation under the loan agreement. During the fourth quarter of 2024, five of the seven hospitals were sold to third parties and the proceeds were allocated among us and other Apollo Co-Lenders based on our pro-rata interests in the Massachusetts Healthcare Loan. As of December 31, 2024, $20.1 million remained in other assets on our consolidated balance sheet related to our allocation of fair value of the two unsold hospitals. During the first quarter of 2025, the Massachusetts Healthcare JV took title of the two unsold hospitals.

~~During~~For the ~~first~~three ~~quarter~~and ofsix ~~2025,~~months ~~the~~ended ~~Massachusetts~~June ~~Healthcare~~30, JV2025, ~~took title of the two unsold hospitals and~~ we contributed an$0.9 ~~additional~~million and $34.32 million, respectively, to the Massachusetts Healthcare JV. Additionally, ~~during the three months ended March 31, 2025,~~ our allocation of losses from the Massachusetts Healthcare JV for the three and six months ended June 30, 2025 was $0.7 million and $1.4 million, respectively, recorded within ~~Other~~other income, net on our condensed consolidated statement of operations. As of ~~March~~June 3130, 2025, our equity method investment in the Massachusetts Healthcare JV was $23.02 million, and recorded in other assets on our consolidated balance sheet.

Note 7 – Secured Debt Arrangements, Net

We utilize secured debt arrangements to finance the origination activity in our loan portfolio. Our secured debt arrangements are comprised of secured credit facilities, a private securitization, and a revolving credit facility.

During the ~~three~~six months ended ~~March~~June 3130, 2025, we entered into two new secured credit facilities with Morgan Stanley and a new secured credit facility with Barclays which provided a combined $1.1 billion of additional capacity. Additionally, we upsized the Barclays Private Securitization by $276.6 million and our secured credit facility with JPMorgan by $500.0 million. ~~and~~Furthermore, ~~extended~~we have repaid the ~~facility’s~~full ~~final~~amount ~~maturity~~of byborrowings ~~3.5~~outstanding ~~years~~on toboth ~~March~~the ~~2030~~MUFG Securities and Churchill facilities.

Our borrowings under secured debt arrangements as of June 30, 2025 and December 31, 2024 are detailed in the following table ($ in thousands):

Our borrowings under secured debt arrangements as of March 31, 2025 and December 31, 2024 are detailed in the following table ($ in thousands):


	June 30, 2025						December 31, 2024
	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)			Maturity (2)	Maximum Amount of Borrowings(1)		Borrowings Outstanding(1)			Maturity (2)
JPMorgan Facility - USD(3)	$	2,000,000	$	1,771,528		March 2030(4)	$	1,500,000	$	1,033,504		September 2026
Morgan Stanley Facility - GBP		589,350		165,324		April 2033		—		—		N/A
Morgan Stanley Facility - USD		450,000		266,694		April 2031		—		—		N/A
Atlas Facility - USD(5)		800,000		530,518		March 2027(6)		800,000		462,886		March 2027(6)
HSBC Facility - GBP		414,158		414,158		October 2025		377,483		377,483		May 2025
HSBC Facility - EUR		284,783		284,783		November 2025(7)		250,162		250,162		January 2026(7)
Barclays Facility - USD		500,000		321,546		March 2027(8)		500,000		321,546		March 2027(8)
Barclays Facility - GBP		126,925		126,925		February 2029		—		—		N/A
Goldman Sachs Facility - GBP		490,237		438,039		May 2029		458,804		373,706		May 2029
Deutsche Bank Facility - USD(3)(9)		200,000		27,300		March 2028(9)		700,000		123,434		March 2026
Santander Facility - USD(10)		—		—		N/A		300,000		—		February 2026
MUFG Securities Facility - GBP(11)		—		—		N/A		171,972		171,972		November 2025(8)
Churchill Facility - USD(12)		—		—		N/A		130,000		121,289		April 2026
Total Secured Credit Facilities		5,855,453		4,346,815				5,188,421		3,235,982
Barclays Private Securitization - GBP, EUR, SEK		1,837,360		1,837,360		September 2027(7)		1,587,780		1,587,780		May 2027(7)
Revolving Credit Facility - USD(13)		160,000		37,500		March 2026		160,000		—		March 2026
Total Secured Debt Arrangements		7,852,813		6,221,675				6,936,201		4,823,762
Less: deferred financing costs		N/A		(8,487	)			N/A		(8,789	)
Total Secured Debt Arrangements, net(14)(15)(16)	$	7,852,813	$	6,213,188			$	6,936,201	$	4,814,973

(1)

	March 31, 2025						December 31, 2024
	MaximumAmount ofBorrowings(1)		BorrowingsOutstanding(1)			Maturity (2)	MaximumAmount ofBorrowings(1)		BorrowingsOutstanding(1)			Maturity (2)
JPMorgan Facility - USD(3)	$	2,000,000	$	1,330,734		March 2030(4)	$	1,500,000	$	1,033,504		September 2026
Deutsche Bank Facility - USD(3)(5)		200,000		120,033		March 2028(6)		700,000		123,434		March 2026
Atlas Facility - USD(7)		800,000		540,413		March 2027		800,000		462,886		March 2027(8)
HSBC Facility - GBP		389,607		389,607		May 2025		377,483		377,483		May 2025
HSBC Facility - EUR		261,322		261,322		January 2026(10)		250,162		250,162		January 2026(10)
Goldman Sachs Facility - GBP		473,350		399,499		May 2029		458,804		373,706		May 2029
Barclays Facility - USD		500,000		321,546		March 2027(9)		500,000		321,546		March 2027(9)
MUFG Securities Facility - GBP		79,345		79,345		November 2025(9)		171,972		171,972		November 2025(9)
Churchill Facility - USD		130,000		119,982		April 2026		130,000		121,289		April 2026
Santander Facility - USD(11)		—		—		N/A		300,000		—		February 2026
Total Secured Credit Facilities		4,833,624		3,562,481				5,188,421		3,235,982
Barclays Private Securitization - GBP, EUR, SEK		1,667,312		1,667,312		August 2027(10)		1,587,780		1,587,780		May 2027(10)
Revolving Credit Facility - USD(12)		160,000		—		March 2026		160,000		—		March 2026
Total Secured Debt Arrangements		6,660,936		5,229,793				6,936,201		4,823,762
Less: deferred financing costs		N/A		(10,016	)			N/A		(8,789	)
Total Secured Debt Arrangements, net(13)(14)(15)	$	6,660,936	$	5,219,777			$	6,936,201	$	4,814,973

As of June 30, 2025, British Pound Sterling ("GBP"), Euro ("EUR"), and Swedish Krona ("SEK") borrowings were converted to USD at a rate of 1.37, 1.18, and 0.11, respectively. As of December 31, 2024, GBP, EUR and SEK borrowings were converted to USD at a rate of 1.25, 1.04 and 0.09, respectively.

(2)

As of March 31, 2025, British Pound Sterling ("GBP"), Euro ("EUR"), and Swedish Krona ("SEK") borrowings were converted to USD at a rate of 1.29, 1.08, and 0.10, respectively. As of December 31, 2024, GBP, EUR and SEK borrowings were converted to USD at a rate of 1.25, 1.04 and 0.09, respectively.

Maturity date assumes extensions at our option are exercised with consent of financing providers, where applicable.

(3)

The JPMorgan Facility and Deutsche Bank Facility enable us to elect to receive advances in USD, GBP, or EUR.

(4)

The JPMorgan Facility final maturity was extended to March 31, 2030 during the first quarter of 2025.

(5)

Effective March 31, 2025, the capacity on the Deutsche Bank Facility was reduced to $200.0 million from $700.0 million.

The Deutsche Bank Facility final maturity was extended to March 31, 2028 during the first quarter 2025.

The Atlas Facility (as defined below) was formerly the Credit Suisse Facility. See "Atlas Facility" below for additional discussion.

(6)

The Atlas Facility was amended during March 2024 to convert the facility's maturity from a six month "evergreen" feature to a two-year initial term, with an additional one-year extension option.

(7)

Assumes financings are extended in line with the underlying loans.

Represents weighted-average maturity across various financings with the counterparty. See below for additional details.

(8)

Assumes financings are extended in line with the underlying loans.

(9)

Effective March 31, 2025, the capacity on the Deutsche Bank Facility was reduced to $200.0 million from $700.0 million and final maturity was extended to March 31, 2028 during the first quarter 2025.

(10)

The Santander Facility was terminated during the first quarter of 2025.

(11)

The ~~current~~MUFG ~~stated maturity of the Revolving Credit~~ Facility ~~(as~~was ~~defined~~terminated ~~below)~~during ~~is March 2026. Borrowings under~~ the ~~Revolving~~second ~~Credit~~quarter ~~Facility bear interest at a per annum rate equal to the sum~~ of ~~(i) a floating rate index and (ii) a fixed margin~~2025. ~~Borrowings under the Revolving Credit Facility are full recourse to certain guarantor wholly-owned subsidiaries of the Company. See "Revolving Credit Facility" below for additional discussion.~~

(12)

~~Weighted-average~~The ~~borrowing~~Churchill ~~costs~~Facility aswas ofterminated ~~March~~during ~~31,~~the ~~2025~~second ~~and~~quarter ~~December 31, 2024 were applicable benchmark rates and credit spread adjustments, plus spreads~~ of ~~USD: +2~~2025.~~41% / GBP: +2.40% / EUR: +2.11% / SEK: +1.50% and USD: +2.47% / GBP: +2.43% / EUR: +2.11% / SEK: +1.50%, respectively.~~

(13)

~~Weighted-average~~Borrowings ~~advance~~under ~~rates~~the ~~based~~Revolving onCredit ~~cost~~Facility asbear ofinterest ~~March~~at ~~31,~~a ~~2025~~per ~~and~~annum ~~December~~rate ~~31,~~equal ~~2024~~to ~~were~~the ~~68.64%~~sum ~~(64.6%~~of (~~USD~~i) /a ~~72.7%~~floating ~~(GBP)~~rate /index ~~70.7%~~and (~~EUR~~ii) /a 80fixed margin.2% ~~(SEK))~~Borrowings ~~and~~under ~~68.6%~~the ~~(62.2%~~Revolving ~~(USD)~~Credit /Facility ~~75.3%~~are ~~(GBP)~~full /recourse ~~70.8%~~to ~~(EUR)~~certain /guarantor 80wholly-owned subsidiaries of the Company.2% ~~(SEK)),~~See ~~respectively~~"Revolving Credit Facility" below for additional discussion.

(14)

AsWeighted-average borrowing costs as of ~~March~~June 3130, 2025 and December 31, 2024 were applicable benchmark rates and credit spread adjustments, ~~approximately~~plus 45spreads of USD: +2.30% ~~and~~/ 46GBP: +2.08%, ~~respectively,~~/ isEUR: ~~the~~+2.07% ~~outstanding~~/ ~~balance~~SEK: ~~under~~+1.50% ~~these~~and ~~secured~~USD: ~~borrowings~~+2.47% ~~were~~/ ~~recourse~~GBP: to+2.43% us/ EUR: +2.11% / SEK: +1.50%, respectively.

(15)

~~Terms~~Weighted-average ofadvance ~~our~~rates ~~secured~~based ~~credit~~on ~~facilities~~cost ~~are designed to keep each lender's credit exposure generally constant~~ as ~~a percentage~~ of ~~the~~June ~~underlying value of the assets pledged as security to the facility. If the credit of the underlying collateral value decreases~~30, ~~the amount of leverage to us may be reduced. As of both March 31,~~ 2025 and December 31, 2024, ~~the~~were ~~weighted-average~~71.61% ~~haircut~~(67.7% ~~under~~(USD) ~~our~~/ ~~secured~~76.8% ~~debt~~(GBP) ~~arrangements~~/ ~~was~~69.8% ~~approximately~~(EUR) 31/ 80.41% (SEK)) and 68.6% ~~Our~~(62.2% ~~secured~~(USD) ~~credit~~/ ~~facilities~~75.3% do(GBP) ~~not~~/ ~~contain~~70.8% ~~capital~~(EUR) ~~markets-based~~/ ~~mark-to-market~~80.2% ~~provisions~~(SEK)), respectively.

(16)

As of June 30, 2025 and December 31, 2024, approximately 41% and 46%, respectively, of the outstanding balance under these secured borrowings were recourse to us.

Terms of our secured credit facilities are designed to keep each lender's credit exposure generally constant as a percentage of the underlying value of the assets pledged as security to the facility. If the credit of the underlying collateral value decreases, the amount of leverage to us may be reduced. As of both June 30, 2025 and December 31, 2024, the weighted-average haircut under our secured debt arrangements was approximately 28.4%. Our secured credit facilities do not contain capital markets-based mark-to-market provisions.

Revolving Credit Facility

We are party to a revolving credit facility (the "Revolving Credit Facility") administered by Bank of America, N.A. The Revolving Credit Facility provides up to $160.0 million of borrowings secured by qualifying commercial mortgage loans and real property owned assets. ~~As of March 31, 2025, our interest coverage ratio was a minimum of 1.3:1. See "Debt Covenants" below for additional discussion.~~ The Revolving Credit Facility has a term of three years, maturing in March 2026. ~~The~~and ~~Revolving Credit Facility~~ enables us to borrow on qualifying commercial mortgage loans for up to two years and real property owned assets for up to six months. AsThe ~~of March 31, 2025 and December 31, 2024, we had no outstanding balance on the~~ Revolving Credit Facility. ~~During~~is ~~the~~also ~~three~~subject ~~months~~to ~~ended~~certain ~~March~~financial 31covenants, ~~2025,~~which weare ~~recorded~~discussed ~~$80.0~~below ~~thousand~~(see in"Debt ~~unused fees~~Covenants"). ~~During the three months ended March 31, 2024, we recorded $33.6 thousand in unused fees and $1.9 million in contractual interest expense.~~

As of June 30, 2025 we had $37.5 million outstanding and as of December 31, 2024, we had no outstanding balance on the Revolving Credit Facility.

During the three and six months ended June 30, 2025, we recorded $63.0 thousand and $143.0 thousand of unused fees, respectively. During the three and six months ended June 30, 2024, we recorded $77.1 thousand and $110.7 thousand of unused fees, respectively.

During the both the three and six months ended June 30, 2025, we recorded $0.6 million of contractual interest expense. During the three and six months ended June 30, 2024, we recorded $0.4 million and $2.3 million of contractual interest expense.

Barclays Private Securitization

We are party to a private securitization with Barclays Bank plc ("Barclays") (such securitization, the "Barclays Private Securitization"). Commercial mortgage loans currently financed under the Barclays Securitization are denominated in GBP, EUR and SEK.

The Barclays Private Securitization does not include daily margining provisions and grants us significant discretion to modify certain terms of the underlying collateral including waiving certain loan-level covenant breaches and deferring or waiving of debt service payments for up to 18 months. The securitization includes loan-to-value based covenants with deleveraging requirements that are based on significant declines in the value of the collateral as determined by an annual third-party (engaged by us) appraisal process tied to the provisions of the underlying loan agreements. We believe this provides us with both cushion and predictability to avoid sudden unexpected outcomes and material repayment requirements.

The table below provides principal balances and the carrying value for commercial mortgage loans pledged to the Barclays Private Securitization as of ~~March~~June 3130, 2025 and December 31, 2024 ($ in thousands):

	March 31, 2025
	June 30, 2025
Local Currency	Count	OutstandingPrincipal		Carrying Value
GBP	56	$	1,~~309~~682,~~001~~261	$	1,~~296~~667,~~020~~499
EUR	32		~~752~~528,~~691~~296		~~744~~521,~~904~~712
SEK	1		~~247~~262,~~013~~186		~~245~~261,~~618~~440
Total	9	$	2,~~308~~472,~~705~~743	$	2,~~286~~450,~~542~~651


	December 31, 2024
Local Currency	Count	Outstanding Principal		Carrying Value
GBP	5	$	1,251,205	$	1,236,691
EUR	3		720,126		711,859
SEK	1		223,992		222,727
Total	9	$	2,195,324	$	2,171,277

The table below provides the borrowings outstanding (on an as converted basis) and weighted-average fully-extended maturities by currency for the assets financed under the Barclays Private Securitization as of ~~March~~June 3130, 2025 ($ in thousands):

	BorrowingsOutstanding(1)		Fully-ExtendedMaturity(2)
Total/Weighted-Average GBP	$	936,211	October 2027
Total/Weighted-Average EUR		533,490	October 2027(3)
Total/Weighted-Average SEK		197,611	May 2026
Total/Weighted-Average Securitization	$	1,667,312	August 2027

As of March 31, 2025, we had £724.7 million, €493.2 million, and kr2.0 billion of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.


	Borrowings Outstanding(1)		Fully-Extended Maturity(2)
Total/Weighted-Average GBP	$	1,260,014	November 2027
Total/Weighted-Average EUR		367,598	December 2027(3)
Total/Weighted-Average SEK		209,748	May 2026
Total/Weighted-Average Securitization	$	1,837,360	September 2027

(1)

As of June 30, 2025, we had £917.6 million, €311.9 million, and kr2.0 billion of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

(2)

Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(3)

The EUR portion of the Barclays Private Securitization has an "evergreen" feature such that the facility continues for one year and can be terminated by either party on certain dates with, depending on the date of notice, a minimum of nine to twelve months' notice.


	Borrowings Outstanding(1)		Fully-Extended Maturity(2)
Total/Weighted-Average GBP	$	897,199	April 2027
Total/Weighted-Average EUR		511,387	October 2027(3)
Total/Weighted-Average SEK		179,194	May 2026
Total/Weighted-Average Securitization	$	1,587,780	May 2027

(1)

As of December 31, 2024, we had £716.8 million, €493.9 million, and kr2.0 billion of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

(2)

Assumes underlying loans extend to fully extended maturity and extensions at our option are exercised.

(3)

The table below provides the assets and liabilities of the Barclays Private Securitization VIE included in our condensed consolidated balance sheets ($ in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Assets:
Cash	$	~~346~~9,268	$	150
Commercial mortgage loans, net(1)		2,~~286~~450,~~542~~651		2,171,277
Other Assets(2)		2634,~~845~~652		29,179
Total Assets	$	2,~~313~~494,~~733~~571	$	2,200,606
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $0.8 million and $1.1 million in 2025 and 2024, respectively)	$	1,666,484	$	1,586,680
Secured debt arrangements, net (net of deferred financing costs of $0.9 million and $1.1 million in 2025 and 2024, respectively)	$	1,836,475	$	1,586,680
Accounts payable, accrued expenses and other liabilities(3)(4)		711,~~207~~392		10,519
Total Liabilities	$	1,~~673~~847,~~691~~867	$	1,597,199

(1)

Net of the General CECL Allowance of $1011.1 million and $10.8 million as of ~~March~~June 3130, 2025 and December 31, 2024, respectively.

(2)

Includes loan principal, interest, and other fees held by our third-party servicers as of the balance sheet date and remitted during subsequent remittance cycle.

(3)

Includes General CECL Allowance related to unfunded commitments on commercial mortgage loans, net of $10.48 million and $2.1 million as of ~~March~~June 3130, 2025 and December 31, 2024, respectively.

(4)

Includes pending transfers from our third party loan servicers that were remitted to our secured credit facility counterparties during the subsequent remittance cycle.

The table below provides the net income of the Barclays Private Securitization VIE included in our condensed consolidated statement of operations ($ in thousands):

	Three months ended March 31,
	2025			2024
Net interest income:
Interest income from commercial mortgage loans	$	46,390		$	64,523
Interest expense		(25,196	)		(36,083	)
Net interest income	$	21,194		$	28,440
General and administrative expense:
Decrease (increase) in current expected credit loss allowance, net		1,346			(2,565	)
Foreign currency translation gain (loss)		25,633			(12,923	)
Net income	$	48,173		$	12,952

At March 31, 2025, our borrowings had the following remaining maturities ($ in thousands):


	Three months ended June 30,						Six months ended June 30,
	2025			2024			2025			2024
Net interest income:
Interest income from commercial mortgage loans	$	49,050		$	63,596		$	95,440		$	128,119
Interest expense		(27,378	)		(36,019	)		(52,574	)		(72,102	)
Net interest income	$	21,672		$	27,577		$	42,866		$	56,017
General and administrative expense	$	(163	)	$	(2	)	$	(163	)	$	(2	)
Decrease (increase) in current expected credit loss allowance, net		(293	)		(1,574	)		1,053			(4,139	)
Foreign currency translation gain (loss)		43,437			(487	)		69,070			(13,410	)
Net income	$	64,653		$	25,514		$	112,826		$	38,466

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	274,854	$	464,196	$	591,684	$	—	$	1,330,734
Deutsche Bank Facility		27,300		—		92,733		—		120,033
Atlas Facility		93,100		447,313		—		—		540,413
HSBC Facility		650,929		—		—		—		650,929
Goldman Sachs Facility - GBP		—		—		399,499		—		399,499
Barclays Facility		—		321,546		—		—		321,546
MUFG Securities Facility		79,345		—		—		—		79,345
Churchill Facility		—		119,982		—		—		119,982
Barclays Private Securitization		117,741		1,549,571		—		—		1,667,312
Total	$	1,243,269	$	2,902,608	$	1,083,916	$	—	$	5,229,793

At June 30, 2025, our borrowings had the following remaining maturities ($ in thousands):


	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
JPMorgan Facility	$	543,926	$	314,256	$	913,346	$	—	$	1,771,528
Morgan Stanley Facility - GBP		—		—		—		165,324		165,324
Morgan Stanley Facility - USD		—		—		266,694		—		266,694
Atlas Facility		93,100		437,418		—		—		530,518
HSBC Facility		698,940		—		—		—		698,940
Barclays Facility - USD		—		321,546		—		—		321,546
Barclays Facility - GBP		—		—		126,925		—		126,925
Goldman Sachs Facility - GBP		—		—		438,039		—		438,039
Deutsche Bank Facility		27,300		—		—		—		27,300
Barclays Private Securitization		488,759		473,656		874,945		—		1,837,360
Revolving Credit Facility		37,500		—		—		—		37,500
Total	$	1,889,525	$	1,546,876	$	2,619,949	$	165,324	$	6,221,674

The table above reflects the fully extended maturity date of the facility and assumes facilities with an "evergreen" feature continue to extend through the fully-extended maturity of the underlying asset and assumes underlying loans are extended with consent of financing providers.

The table below summarizes the outstanding balances at ~~March~~June 3130, 2025, as well as the maximum and average month-end balances for the ~~three~~six months ended ~~March~~June 3130, 2025 for our borrowings under secured debt arrangements ($ in thousands).

	As of March 31, 2025				For the three months ended March 31, 2025
	As of June 30, 2025				For the six months ended June 30, 2025
	Balance		Collateral(1)		MaximumMonth-EndBalance		AverageMonth-EndBalance
JPMorgan Facility	$	1,~~330~~771,~~734~~528		12,~~886~~454,~~169~~825		1,~~330~~771,~~734~~527	$	1,~~152~~453,~~849~~045
Deutsche Bank Facility		120,033		195,669		123,434		122,301
Morgan Stanley Facility - GBP		165,324		202,479		126,925		124,842
Goldman Sachs Facility - GBP		399,499		517,703		399,499		387,209
Morgan Stanley Facility - USD		266,694		353,086		266,694		266,694
Atlas Facility		~~540~~530,~~413~~518		~~800~~786,~~512~~675		~~540~~537,~~413~~721		~~513~~523,~~653~~286
HSBC Facility		~~650~~698,~~929~~941		~~872~~937,~~168~~038		~~650~~698,~~929~~940		~~635~~659,~~035~~969
Barclays Facility		321,546		422,548		321,546		321,546
Barclays Facility - USD		321,546		424,583		321,546		321,546
MUFG Securities Facility		79,345		166,934		110,772		92,179
Barclays Facility - GBP		126,925		160,315		126,925		124,842
Churchill Facility		119,982		160,278		120,853		120,417
Goldman Sachs Facility - GBP		438,039		566,956		438,039		407,718
Barclays Private Securitization		1,667,312		2,296,668		1,667,312		1,614,412
Deutsche Bank Facility		27,300		45,500		117,300		89,800
Revolving Credit Facility		—		69,031		—		—
Barclays Private Securitization		1,837,360		2,461,742		1,854,659		1,720,802
Total	$	5,229,793	$	7,387,680
Revolving Credit Facility		37,500		69,569		119,500		31,400
Total	$	6,221,675	$	8,462,768

(1)

Represents the amortized cost balance of commercial loan collateral assets and the value of net real estate assets of real property owned collateral assets.

The table below summarizes the outstanding balances at December 31, 2024, as well as the maximum and average month-end balances for the year ended December 31, 2024 for our borrowings under secured debt arrangements ($ in thousands).


	As of December 31, 2024				For the year ended December 31, 2024
	Balance		Collateral(1)		Maximum Month-End Balance		Average Month-End Balance
JPMorgan Facility	$	1,033,504	$	1,832,859	$	1,063,261	$	969,759
Deutsche Bank Facility		123,434		199,217		278,703		201,020
Goldman Sachs Facility - USD		—		—		11,620		2,903
Goldman Sachs Facility - GBP		373,706		485,054		390,163		251,571
Atlas Facility		462,886		702,927		758,201		640,453
HSBC Facility		627,646		839,123		672,422		653,182
Barclays Facility		321,546		420,774		353,153		242,792
MUFG Securities Facility		171,972		209,493		211,057		197,420
Churchill Facility		121,289		161,264		126,080		123,684
Santander Facility - USD		—		—		67,500		56,250
Santander Facility - EUR		—		—		54,677		22,684
Barclays Private Securitization		1,587,779		2,182,088		2,249,538		2,041,421
Revolving Credit Facility		—		—		150,000		38,796
Total	$	4,823,762	$	7,032,800

(1)

Represents the amortized cost balance of commercial loan collateral assets and the value of net real estate assets of real property owned collateral assets.

Debt Covenants

The guarantees related to our secured debt arrangements contain the following financial covenants: (i) tangible net worth must be greater than $1.25 billion plus 75% of the net cash proceeds of any equity issuance after March 31, 2017; (ii) our ratio of total indebtedness to ~~tangible~~total ~~net~~assets ~~worth~~shall ~~cannot~~not exceed 483.~~0:1,~~33% ~~reducing to 3~~(81.~~75:1~~82% ~~effective~~for ~~March~~the ~~31,~~Revolving ~~2026;~~Credit Facility) and (iii) our liquidity cannot be less than an amount equal to the greater of 5.0% of total recourse indebtedness or $30.0 million. Under these covenants, our General CECL Allowance is added back to our tangible net worth calculation and total assets and total indebtedness are subject to certain adjustments. The Revolving Credit Facility contains an additional financial covenant to maintain a minimum interest coverage ratio. ~~Our~~of ~~interest coverage ratio shall be~~ not less than 1.3:1~~, increasing to 1~~.~~4:1~~ ~~effective July 1, 2025.~~

WeEffective ~~were~~as inof ~~compliance~~June ~~with~~30, ~~the~~2025, ~~covenants~~we ~~under~~amended ~~each of~~ our ~~secured~~financial ~~debt~~covenants ~~arrangements~~from ata ~~March~~maximum ~~31,~~ratio ~~2025~~of ~~and~~total ~~December~~indebtedness ~~31,~~to ~~2024.~~tangible ~~The~~net ~~impact~~worth of ~~macroeconomic~~4.0:1.0 ~~conditions~~to ona ~~the~~ratio ~~commercial~~of ~~real~~total ~~estate~~indebtedness ~~markets~~to ~~and~~total ~~global~~assets ~~capital~~not ~~markets,~~to ~~including~~exceed ~~increased~~83.33% ~~interest~~(81.82% ~~rates,~~for ~~foreign~~our ~~currency~~Revolving ~~fluctuations,~~Credit ~~changes~~Facility). toWe ~~fiscal~~were ~~and~~in ~~monetary~~compliance ~~policy,~~with ~~slower~~our ~~economic~~covenants ~~growth~~for orthe ~~recession,~~periods ~~labor~~ended ~~shortages,~~June ~~and recent distress in the banking sector~~30, ~~may~~2025 ~~make~~(after itgiving ~~more~~effect ~~difficult~~ to ~~meet~~such oramendment) ~~satisfy~~and ~~these~~December ~~covenants~~31, ~~in the future~~2024.

The impact of macroeconomic conditions on the commercial real estate markets and global capital markets, including increased interest rates, foreign currency fluctuations, changes to fiscal and monetary policy, slower economic growth or recession, labor shortages, and recent distress in the banking sector, may make it more difficult to meet or satisfy our debt covenants in the future.

Note 8 – Senior Secured Term Loans, Net

In ~~May~~June ~~2019~~2025, we entered into a $~~500~~750.0 million senior secured term loan facility (the "~~2026~~2030 Term Loan"), ~~which~~to refinance and replace our previously outstanding 2026 Term Loan and 2028 Term Loans (each as defined and described below). The 2030 Term Loan matures in ~~May~~June ~~2026~~2030 and bears interest at a rate of SOFR plus 3.25%. The 2030 Term Loan was issued at a price of 99.3% and is amortizing with repayments of 0.25% per quarter of the total committed principal starting September 30, 2025. Inclusive of the discount and deferred financing costs, the total cost of the 2030 Term Loan was SOFR+3.92% as of June 30, 2025. The 2030 Term Loan contains restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities. The ~~2026~~refinancing ~~Term Loan~~ was ~~issued~~accounted atfor as a ~~price~~continuation of ~~99.5%.~~the ~~The~~existing ~~2026~~loans ~~Term~~in ~~Loan~~accordance ~~currently~~with ~~bears~~ASC ~~interest~~Topic at470 ~~SOFR plus 2~~"Debt".~~86%.~~

InPrior ~~March~~to ~~2021,~~refinancing wein ~~entered~~June ~~into~~2025, anwe ~~additional~~held a $~~300~~471.03 million senior secured term loan, ~~with substantially the same terms as the 2026 Term Loan,~~ (the "~~2028 Term Loan" and, together with the~~ 2026 Term Loan~~, the~~ "~~Term Loans"~~) ~~which~~that ~~matures~~bore ininterest ~~March~~at ~~2028~~SOFR ~~and~~plus ~~contains~~2.86% ~~restrictions~~and ~~relating~~a to$288.0 ~~liens,~~million ~~asset~~senior ~~sales,~~secured ~~indebtedness,~~term ~~and~~loan ~~investments~~(the ~~in non-wholly owned entities. The~~ "2028 Term Loan", ~~was~~collectively ~~issued~~with ~~at a price of 99.0%. During~~ the ~~second~~2026 ~~quarter~~Term ~~of 2023~~Loan, the "2026 and 2028 Term ~~Loan~~Loans") ~~transitioned~~that ~~from~~bore ~~LIBOR to SOFR and currently bears~~ interest at SOFR (with a floor of 0.50%) plus 3.61%. The 2026 and 2028

The Term Loans are amortizing with repayments of 0.25% per quarter of the total committed principal. During the three months ended March 31, 2025 and 2024, we repaid $1.3 million of principal, respectively, related to the 2026 Term Loan. During the three months ended March 31, 2025 and 2024, we repaid $0.7 million of principal, respectively, related to the 2028 Term Loan.

The following table summarizes the terms of the Term Loans as of March 31, 2025 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount(1)			Deferred Financing Costs(1)			Carrying Value		Rate			Maturity Date
2026 Term Loan	$	471,250	$	(387	)	$	(2,403	)	$	468,460		2.86	%	5/15/2026
2028 Term Loan		288,000		(1,250	)		(2,245	)		284,505		3.61	%	3/11/2028
Total	$	759,250	$	(1,637	)	$	(4,648	)	$	752,965

Term Loans contained restrictions relating to liens, asset sales, indebtedness, and investments in non-wholly owned entities and were issued at a price of 99.5% and 99.0%, respectively.

The following table summarizes the terms of the Term Loans as of June 30, 2025 ($ in thousands):


	Principal Amount		Unamortized Issuance Discount(1)			Deferred Financing Costs(1)			Carrying Value		Rate(2)	Maturity Date
2030 Term Loan	$	750,000	$	(7,037	)	$	(13,547	)	$	729,416	+ 3.25%	6/13/2030
Total	$	750,000	$	(7,037	)	$	(13,547	)	$	729,416

(1)

Unamortized issuance discount and deferred financing costs will be amortized to interest expense over remaining life of respective term loans.

(2)

Indexed to one-month SOFR

The following table summarizes the terms of the Term Loans as of December 31, 2024 ($ in thousands):

	Principal Amount		Unamortized Issuance Discount(1)			Deferred Financing Costs(1)			Carrying Value		Rate(2)		Maturity Date	~~Maturity Date~~
2026 Term Loan	$	472,500	$	(476	)	$	(2,778	)	$	469,246	+ 2.86%	~~2.86~~	%5/15/2026	~~5/15/2026~~
2028 Term Loan		288,750		(1,357	)		(2,429	)		284,964	+ 3.61%	~~3.61~~	%3/11/2028	~~3/11/2028~~
Total	$	761,250	$	(1,833	)	$	(5,207	)	$	754,210

(1)

Unamortized issuance discount and deferred financing costs will be amortized to interest expense over remaining life of respective term loans.

(2)

Indexed to one-month SOFR

Covenants

The ~~financial~~2030 ~~covenants of the~~ Term ~~Loans~~Loan ~~include~~contains ~~the requirements that we maintain: (i)~~ a ~~maximum~~financial ~~ratio~~covenant ofthat ~~total~~our recourse ~~debt~~indebtedness toshall ~~tangible~~not ~~net~~exceed ~~worth~~83.3% of ~~4:1;~~our ~~and (ii) a ratio of~~ total ~~unencumbered~~ assets (subject to ~~total~~certain ~~pari-passu~~adjustments) ~~indebtedness~~effective ofSeptember ~~at least 2.50:1. We were in compliance with the covenants under the Term Loans at March 31~~30, 2025 ~~and December 31, 2024~~.

The financial covenants of the 2026 and 2028 Term Loans included the requirement that we maintain: (i) a maximum ratio of total recourse debt to tangible net worth of 4:1; and (ii) a ratio of total unencumbered assets to total pari-passu indebtedness of at least 2.50:1. We were in compliance with the covenants under the 2026 and 2028 Term Loans at December 31, 2024.

Note 9 – Senior Secured Notes, Net

In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after deducting initial purchasers' discounts and commissions. The 2029 Notes will mature on June 15, 2029, unless earlier repurchased or redeemed. The 2029 Notes are secured by a first-priority lien, and rank pari-passu in right of payment with all of our existing and future first lien obligations, including indebtedness under the Term Loans. The 2029 Notes were issued at par and contain covenants relating to liens, indebtedness, and investments in non-wholly owned entities. The 2029 Notes had a carrying value of $496.68 million and $496.4 million, net of deferred financing costs of $3.42 million and $3.6 million, as of ~~March~~June 3130, 2025 and December 31, 2024, respectively.

Covenants

The 2029 Notes include certain covenants including a requirement that we maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 1.20:1. As of ~~March~~June 3130, 2025 and December 31, 2024, we were in compliance with all covenants.

Note 10 – Derivatives

We use forward currency contracts to economically hedge interest and principal payments due under our loans denominated in currencies other than USD.

We have entered into a series of forward contracts to sell an amount of foreign currency (GBP, EUR and SEK) for an agreed upon amount of USD at various dates through March 2028. These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments.

The agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of both March 31, 2025 and December 31, 2024, we were in a net asset position with all of our derivative counterparties and did not have any collateral posted under these derivative contracts.

~~The~~We ~~following~~have ~~table~~entered ~~summarizes~~into ~~our~~a ~~non-designated~~series Fxof ~~forwards~~forward contracts to sell an amount of foreign currency (GBP, EUR and ~~interest~~SEK) ~~rate~~for ~~caps~~an asagreed upon amount of USD at various dates through March ~~31,~~2028. ~~2025:~~These forward contracts were executed to economically fix the USD amounts of foreign denominated cash flows expected to be received by us related to foreign denominated loan investments.

March 31, 2025

Type of Derivatives

Number ofContracts

AggregateNotional Amount(in thousands)

NotionalCurrency

Maturity

Weighted-AverageYears to Maturity

Fx contracts - GBP

626,454

GBP

April 2025 - March 2028

1.44

Fx contracts - EUR

341,860

EUR

April 2025 - August 2026

0.98

Fx contracts - SEK

617,606

SEK

May 2025 - May 2026

1.10

Interest rate caps

238,535

USD

July 2025 - October 2025

0.43

The agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of June 30, 2025, we were in a net liability position with our derivative counterparties and posted collateral of $56.1 million included within other assets on our condensed consolidated balance sheet. As of December 31, 2024, we were in a net asset position with all of our derivative counterparties and did not have any collateral posted under these derivative contracts.

The following table summarizes our non-designated Fx forwards and interest rate caps as of June 30, 2025:

          
         June 30, 2025

         Type of Derivatives

         Number of
Contracts

         Aggregate
Notional Amount
(in thousands)

         Notional
Currency

         Maturity

         Weighted-Average
Years to Maturity

Fx contracts - GBP

110

673,578

GBP

July 2025 - March 2028

1.35

Fx contracts - EUR

29

272,678

EUR

July 2025 - November 2026

0.68

Fx contracts - SEK

12

603,079

SEK

August 2025 - May 2026

0.87

Interest rate caps

2

238,535

USD

July 2025 - October 2025

0.18

The following table summarizes our non-designated Fx forwards and interest rate caps as of December 31, 2024:

          
         December 31, 2024

         Type of Derivatives

         Number of
Contracts

         Aggregate
Notional Amount
(in thousands)

         Notional
Currency

         Maturity

         Weighted-Average
Years to Maturity

Fx contracts - GBP

80

632,702

GBP

January 2025 - August 2027

1.39

Fx contracts - EUR

48

355,218

EUR

January 2025 - August 2026

1.18

Fx contracts - SEK

14

633,231

SEK

February 2025 - May 2026

1.32

Interest rate caps

2

238,535

USD

July 2025 - October 2025

0.67

We have not designated any of our derivative instruments as hedges as defined in ASC Topic 815, "Derivatives and Hedging" and, therefore, changes in the fair value of our derivative instruments are recorded directly in earnings. The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our forward currency contracts for the three and six months ended ~~March~~June 3130, 2025 and 2024 ($ in thousands):

		Amount of gain (loss) recognized in income					Amount of gain (loss) recognized in income
		Three Months Ended March 31,
		Three Months Ended June 30,					Six Months Ended June 30,
	Location of Gain (Loss) Recognized in Income	2025			2024		2025			2024
Forward currency contracts	Unrealized gain (loss) on derivative instruments	$	(4173,~~829~~682	)	$	~~18,053~~911	$	(115,511	)	$	18,964
Forward currency contracts	Realized gain (loss) on derivative instruments		2(8,~~857~~457	)		5,~~345~~466		(5,600	)		10,811
Total		$	(3882,~~972~~139	)	$	236,~~398~~377	$	(121,111	)	$	29,775

The following table summarizes the amounts recognized on our condensed consolidated statements of operations related to our interest rate caps for the three months ended March 31, 2025 and 2024 ($ in thousands):

		Amount of gain (loss) recognized in income
		Three Months Ended March 31,
	Location of Gain (Loss) recognized in Income	2025			2024
Interest rate caps	Unrealized gain (loss) on interest rate hedging instruments	$	(174	)	$	(194	)
Interest rate caps	Realized gain on interest rate hedging instruments		132			550
Total		$	(42	)	$	356

In September 2023, we entered into an interest rate cap with an original maturity of October 1, 2024 and a notional amount of $164.8 million. During September 2024, we extended our interest rate cap to October 1, 2025. We use our interest rate cap to hedge our exposure to variable cash flows on our construction financing. The interest rate cap effectively limits SOFR from exceeding 4.00% which results in the maximum all-in coupon on our construction financing of 6.55%. During both the three months ended March 31, 2025 and 2024, SOFR exceeded the cap rate of 4.00%. As such, during the three months ended March 31, 2025 and 2024, we realized a gain from the interest rate cap in the amount of $0.1 million and $0.6 million,

~~respectively,~~The ~~which~~following istable ~~included~~summarizes inthe ~~gain~~amounts ~~(loss)~~recognized on our condensed consolidated statements of operations related to our interest rate ~~hedging~~caps ~~instruments~~for inthe ~~our~~three ~~condensed~~and ~~consolidated~~six ~~statement~~months ofended ~~operations.~~June 30, 2025 and 2024 ($ in thousands):

In June 2024, we entered into an interest rate cap that matures on July 1, 2025 with a notional amount of $73.7 million. We use our interest rate cap to hedge our exposure to variable cash flows on our floating rate mortgage related to the D.C. Hotel. The interest rate cap effectively limits SOFR from exceeding 6.00% which results in the maximum all-in coupon on mortgage of 9.00%. During the three months ended March 31, 2025, SOFR did not exceed the cap rate of 6.00%, and accordingly, no realized gain was recorded.


		Amount of gain (loss) recognized in income						Amount of gain (loss) recognized in income
		Three Months Ended June 30,						Six Months Ended June 30,
	Location of Gain (Loss) recognized in Income	2025			2024			2025			2024
Interest rate caps	Unrealized gain (loss) on interest rate hedging instruments	$	(72	)	$	(457	)	$	(246	)	$	(651	)
Interest rate caps	Realized gain on interest rate hedging instruments		137			551			269			1,101
Total		$	65		$	94		$	23		$	450

~~The~~In ~~following~~September ~~tables~~2023, ~~summarize~~we ~~the~~entered ~~gross~~into ~~asset~~an interest rate cap with an original maturity of October 1, 2024 and ~~liability~~a ~~amounts~~notional ~~related~~amount toof $164.8 million. During September 2024, we extended our ~~derivatives~~interest atrate ~~March~~cap 31to October 1, 2025. We use our interest rate cap to hedge our exposure to variable cash flows on our construction financing. The interest rate cap effectively limits SOFR from exceeding 4.00% which results in the maximum all-in coupon on our construction financing of 6.55%. During both the three and ~~December~~six 31months ended June 30, 2025 and 2024, (SOFR exceeded the cap rate of 4.00%. We realized a gain from the interest rate cap in the amount of $0.1 million and $0.3 million during the three and six months ended June 30, 2025, respectively, and $0.6 million and $1.1 million during the three and six months ended June 30, 2024, respectively, which is included in ~~thousands~~gain (loss): on interest rate hedging instruments in our condensed consolidated statement of operations.

	March 31, 2025							December 31, 2024
	GrossAmount ofRecognizedAssets		GrossAmountsOffset in ourConsolidatedBalance Sheet			Net Amountsof Assets Presented in ourConsolidatedBalance Sheet		GrossAmount ofRecognizedAssets		GrossAmountsOffset in our ConsolidatedBalance Sheet			Net Amountsof AssetsPresented in ourConsolidatedBalance Sheet
Forward currency contracts	$	27,481	$	(11,557	)	$	15,924	$	59,261	$	(1,508	)	$	57,753
Interest rate caps		243		—			243		416		—			416
Total derivative assets	$	27,724	$	(11,557	)	$	16,167	$	59,677	$	(1,508	)	$	58,169

In June 2024, we entered into an interest rate cap that matures on July 1, 2025 with a notional amount of $73.7 million. We use our interest rate cap to hedge our exposure to variable cash flows on our floating rate mortgage related to the D.C. Hotel. The interest rate cap effectively limits SOFR from exceeding 6.00% which results in the maximum all-in coupon on mortgage of 9.00%. During the three and six months ended June 30, 2025 and 2024, SOFR did not exceed the cap rate of 6.00%, and accordingly, no realized gain was recorded.

The following tables summarize the gross asset and liability amounts related to our derivatives at June 30, 2025 and December 31, 2024 ($ in thousands):


	June 30, 2025								December 31, 2024
	Gross Amount of Recognized Assets		Gross Amounts Offset in our Condensed Consolidated Balance Sheet			Net Amounts of Assets Presented in our Condensed Consolidated Balance Sheet			Gross Amount of Recognized Assets		Gross Amounts Offset in our Consolidated Balance Sheet			Net Amounts of Assets Presented in our Consolidated Balance Sheet
Forward currency contracts	$	10,283	$	(68,041	)	$	(57,758	)	$	59,261	$	(1,508	)	$	57,753
Interest rate caps		171		—			171			416		—			416
Total derivative assets (liabilities)	$	10,454	$	(68,041	)	$	(57,587	)	$	59,677	$	(1,508	)	$	58,169

Note 11 – Accounts Payable, Accrued Expenses and Other Liabilities

The following table details the components of our accounts payable, accrued expense and other liabilities ($ in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Collateral held under derivative agreements	$	~~13,280~~—	$	54,420
Accrued dividends payable		37,~~839~~852		37,976
Accrued interest payable		3135,~~619~~

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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