Variable Interest Entities

6 Months Ended

Jun. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Our involvement with VIEs primarily affects our financial performance and cash flows through amounts recorded in interest income, interest expense, provision for loan losses and through activity associated with our derivative instruments.

Consolidated VIEs. We have determined that our operating partnership, ARLP, and our CLO and Q Series securitization entities (“Securitization Entities”) are VIEs, which we consolidate.

Our Securitization Entities invest in real estate and real estate-related securities and are financed by the issuance of debt securities. We believe we hold the power necessary to direct the most significant economic activities of those entities. We also have exposure to losses to the extent of our equity interests, and rights to waterfall payments in excess of required payments to bond investors. As a result of consolidation, equity interests have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued to third parties by the Securitization Entities, prior to the unwind. Our operating results and cash flows include the gross asset and liability amounts related to the Securitization Entities as opposed to our net economic interests in those entities.

The assets and liabilities related to these consolidated Securitization Entities are as follows (in thousands):


	June 30, 2025		December 31, 2024
Assets:
Restricted cash	$	63,712	$	131,381
Loans and investments, net	4,711,084		5,898,102
Other assets	77,344		95,442
Total assets	$	4,852,140	$	6,124,925

Liabilities:
Securitized debt	$	3,510,865	$	4,622,489
Other liabilities	9,332		15,255
Total liabilities	$	3,520,197	$	4,637,744

Assets held by the Securitization Entities are restricted and can only be used to settle obligations of those entities. The liabilities of the Securitization Entities are non-recourse to us and can only be satisfied from each respective asset pool. See Note 10 for details. We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the Securitization Entities.

Unconsolidated VIEs. We determined that we are not the primary beneficiary of 63 VIEs in which we have a variable interest at June 30, 2025 because we do not have the ability to direct the activities of the VIEs that most significantly impact each entity's economic performance or substantially all of the activities do not involve, or are not conducted on behalf of, the Company.

A summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, at June 30, 2025 is as follows (in thousands):


Type	Carrying Amount (1)
Loans	$	1,639,936
APL certificates	139,365
Equity investments	33,390
B Piece bonds	31,214
Agency interest only strips	69
Total	$	1,843,974

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(1)Represents the carrying amount of loans and investments before reserves. At June 30, 2025, $252.1 million of loans to VIEs had corresponding specific loan loss reserves of $90.7 million. The maximum loss exposure at June 30, 2025 would not exceed the carrying amount of our investment.

These unconsolidated VIEs have exposure to real estate debt of approximately $4.81 billion at June 30, 2025.