Real Estate Owned, Net

9 Months Ended

Sep. 30, 2025

REAL ESTATE OWNED, NET

As of September 30, 2025 and December 31, 2024, we had 10 and seven REO assets, respectively. During the nine months

ended September 30, 2025, we acquired three REO assets through deed-in-lieu of foreclosure transactions or loan

modifications that resulted in us consolidating the collateral assets, for a total acquisition price of $406.3 million. We

allocated $221.0 million to land and land improvements, $137.1 million to building and building improvements, $49.2

million to acquired intangible assets, and $(1.0) million to other components of the purchase price. In aggregate, we

charged off $83.9 million of CECL reserves relating to the loans that had previously been secured by these assets, as the

loans’ aggregate carrying value of $490.2 million at the time of the REO acquisitions exceeded the acquisition date fair

value noted above. See Note 2 for further discussion of REO assets.

The acquisition of three REO assets during the nine months ended September 30, 2025 were accounted for as asset

acquisitions under ASC 805, and we recognized these properties as REO assets held for investment. The following table

presents the REO assets that were acquired during the nine months ended September 30, 2025 ($ in thousands):

The following table presents the REO assets and liabilities included in our consolidated balance sheets ($ in thousands):


	September 30, 2025	December 31, 2024
Assets
Building and building improvements	$555,879	$410,546
Land and land improvements	402,248	181,083
Total	$958,127	$591,629
Less: accumulated depreciation	(24,492)	(3,444)
Real estate owned, net	$933,635	$588,185

Intangible real estate assets	$130,099	$83,253
Less: accumulated amortization	(33,427)	(5,964)
Intangible real estate assets, net(1)	$96,672	$77,289

Liabilities
Intangible real estate liabilities	$4,545	$1,422
Less: accumulated amortization	(317)	(1)
Intangible real estate liabilities, net(2)	$4,228	$1,421

(1)Included within other assets on our consolidated balance sheets. Refer to Note 6 for further information.

(2)Included within other liabilities on our consolidated balance sheets. Refer to Note 6 for further information.

Revenue and expenses from real estate owned consisted of the following ($ in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024
Rental income	$15,263	$1,037	$45,803	$1,037
Other operating income	18,470	177	63,775	177
Revenue from real estate owned	$33,733	$1,214	$109,578	$1,214

Operating expense	$28,061	$1,654	$89,238	$2,432
Depreciation and amortization expense	15,039	1,030	47,960	1,215
Total expenses from real estate owned	$43,100	$2,684	$137,198	$3,647

Net loss from real estate owned	$(9,367)	$(1,470)	$(27,620)	$(2,433)

The following table presents the undiscounted future minimum rents we expect to receive for our office properties as of

September 30, 2025. Leases at our multifamily assets are short term, generally 12 months or less, and are therefore not

included ($ in thousands):

The following table presents the amortization of lease intangibles for each of the succeeding fiscal years ($ in thousands):


	In-place lease intangibles	Above-market lease intangibles	Below-market lease intangibles
2025 (remaining)	$9,561	$1,427	$(292)
2026	26,096	4,121	(1,140)
2027	15,437	3,077	(995)
2028	11,225	2,505	(872)
2029	7,765	1,708	(498)
Thereafter	11,002	2,748	(431)
Total	$81,086	$15,586	$(4,228)