Real Estate Owned

6 Months Ended

Jun. 30, 2025

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


	June 30, 2025								December 31, 2024
	Multifamily		Office		Land		Total		Multifamily		Office		Land		Total
Land	$	81,364	$	13,599	$	7,947	$	102,910	$	29,171	$	13,599	$	7,947	$	50,717
Building and intangible assets	234,375		41,670		—		276,045		99,812		35,561		—		135,373
Less: Impairment loss	—		(2,500)		—		(2,500)		—		(2,500)		—		(2,500)
Less: Accumulated depreciation and amortization	(8,222)		(3,047)		—		(11,269)		(4,497)		(2,550)		—		(7,047)
Real estate owned, net	$	307,517	$	49,722	$	7,947	$	365,186	$	124,486	$	44,110	$	7,947	$	176,543

At June 30, 2025, our REO assets were comprised of eleven multifamily properties, two office buildings and two land parcels. At December 31, 2024, our REO assets were comprised of four multifamily properties, two office buildings and two land parcels.

During the three and six months ended June 30, 2025, we foreclosed on three and ten, respectively, multifamily bridge loans with an aggregate net carrying value of $67.6 million and $260.3 million, respectively, (net of specific CECL reserves of $5.1 million and $9.1 million, respectively) and received ownership of the underlying collateral as REO assets. Upon foreclosure, during the three and six months ended June 30, 2025, we recognized a gain of $0.8 million and a loss of $1.0 million, respectively, which was recorded through (loss) gain on real estate on the consolidated statements of income.

During the three and six months ended June 30, 2025, we sold one and three, respectively, multifamily REO assets for $7.0 million and $84.0 million, respectively, and repaid the mortgage notes outstanding of $49.1 million. During the three and six months ended June 30, 2025, we recognized a loss of $0.1 million and $1.0 million, respectively. Additionally, we provided new bridge loan financing to the new borrowers totaling $6.5 million and $83.5 million, respectively. The bridge loans bear interest as follows: One 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, another loan bears interest at a rate of SOFR plus 2.00%, and the third loan bears interest at a rate of 7.32%, subject to a floor of SOFR plus 3.00%. Two of the new financings provided were deemed to be a significant financing component of the transactions and, as a result, for the six months ended June 30, 2025, we recorded a loss and corresponding liability $2.8 million, as an adjustment to the purchase price, which will be accreted into interest income over the life of the loans. The net losses of these transactions were recorded through (loss) gain on real estate on the consolidated statements of income.

See Note 3 for details of properties foreclosed and sold within the same reporting period.

At June 30, 2025 and December 31, 2024, we had mortgage notes payable totaling $184.6 million and $74.9 million, respectively, which are collateralized by our REO assets. Interest rates on the mortgage notes range from PRIME plus 1.35% to SOFR plus 3.25%, with maturities spanning from September 2025 to June 2027.

At June 30, 2025 and December 31, 2024, our multifamily REO properties had a weighted average occupancy rate of approximately 41% and 77%, respectively. At both June 30, 2025 and December 31, 2024, both our office buildings were vacant.

We recorded depreciation expense related to the REO assets of $4.8 million and $7.5 million for the three and six months ended June 30, 2025, respectively, and $0.6 million and $1.4 million for the three and six months ended June 30, 2024, respectively.