Investments in Equity Affiliates

6 Months Ended

Jun. 30, 2025

Equity Method Investments and Joint Ventures [Abstract]

We account for all investments in equity affiliates under the equity method. A summary of these investments is as follows (in thousands):


	Investments in Equity Affiliates at				UPB of Loans to Equity Affiliates at June 30, 2025
Equity Affiliates	June 30, 2025		December 31, 2024
Arbor Residential Investor LLC	$	16,367	$	23,868	$	—
AWC Real Estate Opportunity Partners I LP	16,094		13,562		108,450
Fifth Wall Ventures	15,861		14,490		—
AMAC Holdings III LLC	14,416		15,413		33,410
ARSR DPREF I LLC	5,697		5,603		—
Lightstone Value Plus REIT L.P.	1,895		1,895		—
The Park at Via Terrossa	591		606		21,845
Docsumo Pte. Ltd.	450		450		—
JT Prime	425		425		—
West Shore Café	—		—		1,688
Lexford Portfolio	—		—		—
East River Portfolio	—		—		—
Total	$	71,796	$	76,312	$	165,393

Arbor Residential Investor LLC ("ARI"). We invested $9.6 million for a 50% interest in ARI, with our former manager, Arbor Commercial Mortgage, LLC (“ACM”), holding the remaining 50%. ARI was formed to hold a 50% interest in Wakefield Investment Holdings LLC (“Wakefield”), an entity that was formed with a third party to hold a controlling interest (initially 65%) in a residential mortgage banking business. During the six months ended June 30, 2025, we recorded a loss of $1.4 million and during the three and six months ended June 30, 2024, we recorded a loss of $0.8 million and income of $0.8 million, respectively, to income from equity affiliates in our consolidated statements of income. Additionally, during the three and six months ended June 30, 2025, we received distributions of $5.6 million and $6.1 million, respectively, and during both the three and six months ended June 30, 2024, we received distributions of $7.7 million, which were classified as returns of capital.

In April 2025, Wakefield entered into an agreement to sell its interest in the residential mortgage banking business for $117.3 million. Based on the terms of this agreement, $22.0 million was allocated to us, which is equivalent to the carrying value of our investment, and therefore do not expect to record a gain or loss on the transaction. The transaction closed once the entire sales price was paid, which was due in installments as follows: $15.0 million on or before April 1, 2025; $15.0 million on or before April 30, 2025; and the remaining $87.3 million on or before December 15, 2025. The first two installments were made in April, for which we received $5.6 million as our allocable share, and the final installment was made on July 31, 2025, for which we received $16.4 million as our allocable share.

AWC Real Estate Opportunity Partners I LP. In the first quarter of 2025, in accordance with the fund’s objectives, AWC brought in an additional capital partner who committed to a $3.0 million investment. The new partner further diluted our interest in the fund to a 46% limited partnership interest, from 49% at December 31, 2024. Certain investments made by AWC were in qualified properties that have outstanding bridge loans originated by us totaling $108.5 million and a $13.0 million Fannie Mae DUS loan we continue to service. During the three and six months ended June 30, 2025, we made contributions of $1.3 million and $3.7 million, respectively, and recorded a loss of $0.1 million and $0.2 million, respectively, related to this investment. During both the three and six months ended June 30, 2025, we received distributions of $1.0 million, which were classified as returns of capital. Interest income recorded from the bridge loans was $2.1 million and $4.2 million for the three and six months ended June 30, 2025, respectively. During both the three and six months ended June 30, 2024, we received net capital distributions of $11.2 million, which were classified as returns of capital, and recorded a loss of $0.2 million, from our investment in AWC. We also made $0.1 million and $8.5 million of additional contributions to the fund during the three and six months ended June 30, 2024, respectively.

Fifth Wall Ventures ("Fifth Wall"). During the three and six months ended June 30, 2025, we recorded income of $0.3 million and $0.8 million, respectively, and made contributions of $1.2 million and $1.9 million, respectively. During both the three and six months ended June 30, 2025, we received distributions of $1.4 million, which were classified as returns of capital. During the three and six months ended June 30, 2024, we recorded income of $0.1 million and $0.4 million, respectively, and made contributions of $0.2 million and $0.7 million, respectively.

AMAC Holdings III LLC (“AMAC III”). During the three and six months ended June 30, 2025, we recorded a loss of $1.0 million and $1.9 million, respectively, and made contributions of $0.9 million for both the three and six months ended June 30, 2025. During the three

and six months ended June 30, 2024, we recorded a loss of $0.7 million and $1.2 million, respectively, and during both the three and six months ended June 30, 2024, we made contributions of $2.6 million.

Lexford Portfolio. During both the three and six months ended June 30, 2025, we received distributions from this investment and recognized income of $3.4 million and during both the three and six months ended June 30, 2024, we received distributions and recognized income of $4.2 million.

See Note 18 for details of certain investments described above.