Real Estate Owned

3 Months Ended

Mar. 31, 2025

A summary of our REO assets is as follows (in thousands):


	March 31, 2025								December 31, 2024
	Multifamily		Office		Land		Total		Multifamily		Office		Land		Total
Land	$	69,114	$	13,599	$	7,947	$	90,660	$	29,171	$	13,599	$	7,947	$	50,717
Building and intangible assets	181,837		38,648		—		220,485		99,812		35,561		—		135,373
Less: Impairment loss	—		(2,500)		—		(2,500)		—		(2,500)		—		(2,500)
Less: Accumulated depreciation and amortization	(3,688)		(2,799)		—		(6,487)		(4,497)		(2,550)		—		(7,047)
Real estate owned, net	$	247,263	$	46,948	$	7,947	$	302,158	$	124,486	$	44,110	$	7,947	$	176,543

At March 31, 2025, our REO assets were comprised of nine multifamily properties, two office buildings and two land parcels. At December 31, 2024, our REO assets were comprised of four multifamily property, two office buildings and two land parcels.

During the three months ended March 31, 2025, we foreclosed on seven multifamily bridge loans with an aggregate net carrying value of $192.7 million, net of specific CECL reserves of $4.0 million, and received ownership of the underlying collateral as REO assets. Upon foreclosure, we recognized a loss of $1.8 million, which was recorded through loss on real estate on the consolidated statements of income.

During the three months ended March 31, 2025, we sold two multifamily REO assets for $77.0 million, repaid the mortgage notes outstanding of $49.1 million, and recognized a $1.9 million gain. Additionally, we provided full financing to the new borrowers through two new bridge loans totaling $77.0 million. One bridge loan has a fixed rate of 4.75% for the first year, 5.50% for the second year and 6.00% for the third year, while the other bridge loan bears interest at a rate of SOFR plus 2.00%. The new financings provided were deemed to be a significant financing component of the transactions and, as a result, we recorded a loss and corresponding liability totaling $2.8 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan. The gains and losses of these transactions were recorded through loss on real estate on the consolidated statements of income.

At March 31, 2025 and December 31, 2024, we had mortgage notes payable totaling $123.9 million and $74.9 million, respectively, which are collateralized by our REO assets. Interest rates on the mortgage notes range from PRIME plus 1.10% to SOFR plus 3.25%, with maturities spanning from June 2025 to March 2026.

At March 31, 2025 and December 31, 2024, our nine multifamily REO properties had a weighted average occupancy rate of approximately 48% and 77%, respectively. At both March 31, 2025 and December 31, 2024, both our office buildings were vacant.

We recorded depreciation expense related to the REO assets of $2.7 million and $0.8 million for the three months ended March 31, 2025 and 2024, respectively.

Our REO assets had restricted cash balances due to escrow requirements totaling $1.5 million and $2.9 million at March 31, 2025 and December 31, 2024, respectively.