
	December 31, 2023		Percent of Total		Loan Count	Wtd. Avg. Pay Rate (1)		Wtd. Avg. Remaining Months to Maturity (2)	Wtd. Avg. First Dollar LTV Ratio (3)		Wtd. Avg. Last Dollar LTV Ratio (4)
Bridge loans (5)	$	12,273,244	97	%	679	8.45	%	12.0	0	%	78	%
Mezzanine loans	248,457		2	%	49	8.41	%	56.6	48	%	80	%
Preferred equity investments	85,741		1	%	17	3.95	%	60.3	53	%	82	%
SFR permanent loans	7,564		<1%		2	9.84	%	13.9	0	%	56	%
	12,615,006		100	%	747	8.42	%	13.2	1	%	78	%
Allowance for credit losses	(195,664)
Unearned revenue	(41,536)
Loans and investments, net	$	12,377,806

	December 31, 2022
Bridge loans (5)	$	14,096,054	98	%	692	8.17	%	19.8	0	%	76	%
Mezzanine loans	213,499		1	%	44	8.13	%	63.1	42	%	77	%
Preferred equity investments	110,725		1	%	8	7.63	%	39.2	46	%	79	%
SFR permanent loans	35,845		<1%		3	8.76	%	32.8	0	%	58	%
	14,456,123		100	%	747	8.17	%	20.6	1	%	76	%
Allowance for credit losses	(132,559)
Unearned revenue	(68,890)
Loans and investments, net	$	14,254,674

We are subject to concentration risk in that, at December 31, 2023, the UPB related to 31 loans with five different borrowers represented 11% of total assets. At December 31, 2022, the UPB related to 38 loans with five different borrowers represented 11% of total assets. During both 2023 and 2022, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue. See Note 18 for details on our concentration of related party loans and investments.

We assign a credit risk rating of pass, pass/watch, special mention, substandard or doubtful to each loan and investment, with a pass rating being the lowest risk and a doubtful rating being the highest risk. Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, and funded cash reserves. Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan. This metric provides a helpful snapshot of portfolio quality and credit risk. All portfolio assets are subject to, at a minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are

Generally speaking, given our typical loan profile, risk ratings of pass, pass/watch and special mention suggest that we expect the loan to make both principal and interest payments according to the contractual terms of the loan agreement. A risk rating of substandard indicates we anticipate the loan may require a modification of some kind. A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss of interest and/or principal. Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as borrower strength, market strength or asset quality may result in a rating that is higher or lower than might be indicated by any risk rating matrix.


	UPB by Origination Year												Total			Wtd. Avg. First Dollar LTV Ratio		Wtd. Avg. Last Dollar LTV Ratio
Asset Class / Risk Rating	2023		2022		2021		2020		2019		Prior
Multifamily:
Pass	$	80,814	$	53,316	$	26,185	$	2,010	$	4,598	$	20,300	$	187,223
Pass/Watch	317,358		2,561,938		2,223,155		119,860		84,600		58,044		5,364,955
Special Mention	24,424		1,762,539		2,631,689		180,750		140,685		350		4,740,437
Substandard	—		435,878		322,987		8,006		—		—		766,871
Doubtful	—		—		13,930		14,800		9,765		—		38,495
Total Multifamily	$	422,596	$	4,813,671	$	5,217,946	$	325,426	$	239,648	$	78,694	$11,097,981			1	%	80	%
Single-Family Rental:	Percentage of portfolio												88		%
Pass	$	9,709	$	608	$	—	$	—	$	—	$	—	$	10,317
Pass/Watch	289,482		465,057		144,846		119,692		—		—		1,019,077
Special Mention	31,131		45,145		218,697		—		—		—		294,973
Total Single-Family Rental	$	330,322	$	510,810	$	363,543	$	119,692	$	—	$	—	$	1,324,367		0	%	62	%
Land:	Percentage of portfolio												10		%
Pass/Watch	$	—	$	—	$	—	$	4,600	$	—	$	—	$	4,600
Special Mention	—		—		—		3,500		—		—		3,500
Substandard	—		—		—		—		—		127,928		127,928
Total Land	$	—	$	—	$	—	$	8,100	$	—	$	127,928	$	136,028		0	%	97	%
Office:	Percentage of portfolio												1		%
Special Mention	$	—	$	—	$	—	$	35,410	$	—	$	—	$	35,410
Total Office	$	—	$	—	$	—	$	35,410	$	—	$	—	$	35,410		0	%	80	%
Retail:	Percentage of portfolio												<1%
Substandard	$	—	$	—	$	—	$	—	$	—	$	19,520	$	19,520
Total Retail	$	—	$	—	$	—	$	—	$	—	$	19,520	$	19,520		0	%	88	%
Commercial:	Percentage of portfolio												< 1%
Doubtful	$	—	$	—	$	—	$	—	$	—	$	1,700	$	1,700
Total Commercial	$	—	$	—	$	—	$	—	$	—	$	1,700	$	1,700		63	%	66	%
	Percentage of portfolio												< 1%
Grand Total	$	752,918	$	5,324,481	$	5,581,489	$	488,628	$	239,648	$	227,842	$	12,615,006		1	%	78	%

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	5,700	$	5,700

At December 31, 2023, underlying properties in Texas and Florida represented 24% and 17%, respectively, of the outstanding balance of our loan and investment portfolio. At December 31, 2022, underlying properties in Texas and Florida represented 22% and 14%, respectively, of the outstanding balance of our loan and investment portfolio. No other state represented 10% or more of the total loan and investment portfolio.


	Year Ended December 31, 2023
	Multifamily		Land		Retail		Commercial		Single- Family Rental		Office		Other		Total
Allowance for credit losses:
Beginning balance	$	37,961	$	78,068	$	5,819	$	1,700	$	780	$	8,162	$	69	$	132,559
Provision for credit losses (net of recoveries)	72,886		(10)		(2,526)		—		844		(2,320)		(69)		68,805
Charge-offs	—		—		—		—		—		(5,700)		—		(5,700)
Ending balance	$	110,847	$	78,058	$	3,293	$	1,700	$	1,624	$	142	$	—	$	195,664

	Year Ended December 31, 2022
Allowance for credit losses:
Beginning balance	$	18,707	$	77,970	$	5,819	$	1,700	$	319	$	8,073	$	653	$	113,241
Provision for credit losses (net of recoveries)	19,254		98		—		—		461		89		(584)		19,318

Ending balance	$	37,961	$	78,068	$	5,819	$	1,700	$	780	$	8,162	$	69	$	132,559

	Year Ended December 31, 2021
Allowance for credit losses:
Beginning balance	$	36,468	$	78,150	$	13,861	$	1,700	$	586	$	1,846	$	15,718	$	148,329
Provision for credit losses (net of recoveries)	(17,761)		(180)		(42)		—		(267)		6,227		(12,292)		(24,315)
Charge-offs	—		—		(8,000)		—		—		—		(2,773)		(10,773)
Ending balance	$	18,707	$	77,970	$	5,819	$	1,700	$	319	$	8,073	$	653	$	113,241

During 2023, we recorded a $68.8 million provision for credit losses, which was net of $4.8 million of loan loss recovery. The loan loss recovery included $2.5 million for a retail loan that paid off and $2.3 million for a loan on an office building that was converted to a common equity investment, for which the fair value of the property exceeded the carrying value. The increase in the provision for credit losses during 2023 was primarily attributable to the impact from the macroeconomic outlook of the commercial real estate market. Our estimate of allowance for credit losses on our structured loans and investments, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that reflects recent observable data, including increases in interest rates, higher unemployment forecasts, and continuing inflationary pressures, including an estimated continual decline in real estate values and other market factors.

The expected credit losses over the contractual period of our loans also include the obligation to extend credit through our unfunded loan commitments. Our current expected credit loss (“CECL”) allowance for unfunded loan commitments is adjusted quarterly and corresponds with the associated outstanding loans. At December 31, 2023 and 2022, we had outstanding unfunded commitments of $1.31 billion and $1.15 billion, respectively, that we are obligated to fund as borrowers meet certain requirements.

All of our structured loans and investments are secured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end. A summary of our specific loans considered impaired by asset class is as follows ($ in thousands):


	December 31, 2023
Asset Class	UPB (1)		Carrying Value		Allowance for Credit Losses		Wtd. Avg. First Dollar LTV Ratio		Wtd. Avg. Last Dollar LTV Ratio
Multifamily	$	272,493	$	260,291	$	37,750	0	%	100	%
Land	134,215		127,868		77,869		0	%	99	%
Retail	19,521		15,037		3,292		0	%	88	%
Commercial	1,700		1,700		1,700		63	%	66	%
Total	$	427,929	$	404,896	$	120,611	0	%	99	%

	December 31, 2022
Land	$	134,215	$	127,868	$	77,869	0	%	99	%
Retail	22,045		17,563		5,817		14	%	79	%

Commercial	1,700		1,700		1,700		63	%	63	%
Total	$	157,960	$	147,131	$	85,386	3	%	96	%

Loans are classified as non-performing once the contractual payments exceed 60 days past due. At December 31, 2023, sixteen loans with an aggregate net carrying value of $235.6 million, net of related loan loss reserves of $27.1 million, were classified as non-performing and, at December 31, 2022, four loans with an aggregate net carrying value of $2.6 million, net of related loan loss reserves of $5.1 million, were classified as non-performing. Income from non-performing loans is recognized on a cash basis when payments are received. Full income recognition will resume when the loan becomes contractually current, and performance has recommenced.

In this challenging economic environment, we have recently experienced late and partial payments on certain loans in our structured portfolio. At December 31, 2023, these loans included twenty-four multifamily bridge loans with an aggregate UPB of $956.9 million that were 60 days or less past due. We are recognizing income on these loans to the extent cash is received. These loans include one specifically reserved loan with a $3.0 million loan loss reserve and a UPB of $32.6 million.

In addition, we have six loans with a carrying value totaling $121.4 million at December 31, 2023, that are collateralized by a land development project. The loans do not carry a current pay rate of interest, however, five of the loans with a carrying value totaling $112.1 million entitle us to a weighted average accrual rate of interest of 7.91%. In 2008, we suspended the recording of the accrual rate of interest on these loans, as they were impaired and we deemed the collection of this interest to be doubtful. At both December 31, 2023 and 2022, we had a cumulative allowance for credit losses of $71.4 million related to these loans. The loans are subject to certain risks

associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development’s outputs upon completion of the project, and litigation risk. Additionally, these loans were not classified as non-performing as the borrower is compliant with all of the terms and conditions of the loans.

In the fourth quarter of 2023, we entered into loan modification agreements with the borrowers of three multifamily bridge loans with an aggregate UPB of $241.0 million, interest rates over SOFR ranging from 4.00% to 4.30% and maturities between October 2024 to January 2025 to: (1) defer a portion of the foregoing interest ranging from 2.00% to 2.15% to payoff, and (2) extend the maturity of each loan by one year. We also agreed to waive 25% of the deferred interest if the loans are paid off by the extended maturity dates.

In the fourth quarter of 2023, we converted a first mortgage loan and a preferred equity investment in an office building to a common equity investment, which is included in other assets in our consolidated balance sheets. On the date of the conversion, the investment had a net carrying value of $37.1 million, net of an $8.0 million reserve. Upon conversion, we recognized a $2.3 million loan loss recovery as a result of the fair value of the property exceeding the carrying value of our loan and preferred equity investment. We intend to convert the building to residential condominiums.

In the second quarter of 2023, a borrower of a $70.5 million multifamily bridge loan, with an interest rate of SOFR plus 3.40% and a maturity in September 2024, defaulted on its interest payments and, as a result, this loan was classified as a non-performing loan. In September 2023, the borrower sold the underlying property to a third party who assumed our loan. At the time of the property sale, we entered into a loan modification agreement with the new borrower to extend the maturity to September 2025 and reduce the interest rate to a fixed pay rate of 3.00% and an accrual rate of 3.00% for a total fixed rate of 6.00% for a period of eighteen months, after which the interest rate reverts back to the original rate for the duration of the loan. The new borrower was also required to fund $10.5 million over time: $2.5 million in interest reserves, which was funded at the closing of the loan assumption, and $8.0 million in capital improvements within fifteen months. If the new borrower fails to timely complete the required capital improvements, it will be required to fund a renovation reserve at the lesser of (1) $2.5 million and (2) the difference between the $8.0 million capital commitment and the costs actually incurred for such capital improvements. The key principal is also personally guaranteeing the $8.0 million capital improvement.

In 2020, we entered into a loan modification agreement on a $26.5 million bridge loan with an interest rate of LIBOR plus 6.00% with a 2.375% LIBOR floor and a $6.1 million mezzanine loan with a fixed rate of 12% collateralized by a retail property to: (1) reduce the interest rate on both loans to the greater of: (i) LIBOR plus 5.50% and (ii) 6.50%, and (2) to extend the maturity three years to December 2024. A portion of the foregoing interest equal to 2.00% was deferred to payoff and would have been waived if the loan was paid off by December 31, 2022, which did not take place. The loan modification agreement also included a $6.0 million required principal paydown, which occurred at the closing of the modification transaction, and an $8.0 million principal reduction once the borrower deposited an additional reserve of $4.6 million, which took place in 2021 and was charged-off against the previously recorded allowance for credit losses.

In 2019, we purchased $50.0 million of a $110.0 million bridge loan, which was collateralized by a hotel property and scheduled to mature in December 2023. In 2021, we recorded a $7.5 million allowance for credit losses due to a reduction in the appraised value of the property. In 2021, we purchased the remaining $60.0 million bridge loan at a discount for $39.9 million, which we determined had experienced a more than insignificant deterioration in credit quality since origination and, therefore, deemed to be a purchased loan with credit deterioration. The $20.1 million discount was classified as a noncredit discount and no portion of the discount was allocated to allowance for credit losses at the date of purchase, since the appraised value of the property was greater than the purchase price. Shortly after the purchase, we entered into a forbearance agreement with the borrower to temporarily reduce the interest rate from LIBOR plus 3.00% with a 1.50% LIBOR floor to a pay rate of 1.00% and to include a $10.0 million principal reduction if the loan is paid off by March 2, 2021. In 2021, we entered into a second forbearance agreement that temporarily eliminated the pay rate, extended the principal reduction payoff deadline to June 30, 2021 and increased the interest rate to an unaccrued default rate of 9.50%, which was deferred until payoff. In June 2021, we received $95.0 million for full satisfaction of these loans, reversed the $7.5 million allowance for credit losses and recorded interest income of $3.5 million.

In April 2023, we exercised our right to foreclose on a group of properties in Houston, Texas that are the underlying collateral for four bridge loans with a total UPB of $217.4 million. We simultaneously sold these properties to a significant equity investor in the original bridge loans and provided new bridge loan financing as part of the sale. We did not record a loss on the original bridge loans and recovered all the outstanding interest owed to us as part of this restructuring.

In 2022, we sold 4 bridge loans with an aggregate UPB of $296.9 million at par less shared loan origination fees and selling costs totaling $2.0 million and recaptured $78.0 million of capital to be used for future investments. The $2.0 million in fees and costs were recorded as an unrealized impairment loss and included in other income (loss), net on the consolidated statements of income. We retained the right to service these loans.

During 2022, we sold a bridge loan and mezzanine loans totaling $110.5 million, that were collateralized by a land development project, at a discount for $102.2 million. In connection with this transaction, we recaptured $66.3 million of capital to be used for future investments and recorded a $9.2 million loss (including fees and expenses), which was included in other income (loss), net on the consolidated statements of income. We have the potential to recover up to $2.8 million depending on the future performance of the loan.