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Loans and Investments | 3 Months Ended
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Mar. 31, 2026
Loans and Investments [Abstract] |
Loans and Investments | Loans and Investments Our Structured Business loan and investment portfolio consists of ($ in thousands):
| March 31, 2026 |  | 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) | $ | 11,209,443 |  |  | 93 | % |  | 439 |  | 6.37 | % |  | 14.1 |  | 0 | % |  | 77 | %
Mezzanine loans | 295,843 |  |  | 3 | % |  | 62 |  | 8.04 | % |  | 48.6 |  | 58 | % |  | 79 | %
Construction - multifamily | 289,889 |  |  | 2 | % |  | 10 |  | 9.12 | % |  | 22.6 |  | 0 | % |  | 62 | %
Preferred equity investments | 202,118 |  |  | 2 | % |  | 34 |  | 6.87 | % |  | 43.0 |  | 62 | % |  | 81 | %
Total UPB | 11,997,293 |  |  | 100 | % |  | 545 |  | 6.49 | % |  | 15.7 |  | 2 | % |  | 77 | %
Allowance for credit losses | (131,223) |  |  |  |  |  |  |  |  |  |  |  |  |
Unearned revenue | (30,689) |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and investments, net (6) | $ | 11,835,381 |  |  |  |  |  |  |  |  |  |  |  |  |
| December 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Bridge loans (5) | $ | 11,371,758 |  |  | 94 | % |  | 524 |  | 6.39 | % |  | 12.9 |  | 0 | % |  | 77 | %
Mezzanine loans | 290,212 |  |  | 2 | % |  | 65 |  | 7.84 | % |  | 52.3 |  | 59 | % |  | 78 | %
Construction - multifamily | 249,019 |  |  | 2 | % |  | 9 |  | 9.13 | % |  | 24.6 |  | 0 | % |  | 60 | %
Preferred equity investments | 202,118 |  |  | 2 | % |  | 34 |  | 6.87 | % |  | 46.0 |  | 62 | % |  | 80 | %
Total UPB | 12,113,107 |  |  | 100 | % |  | 632 |  | 6.49 | % |  | 14.7 |  | 2 | % |  | 77 | %
Allowance for credit losses | (145,971) |  |  |  |  |  |  |  |  |  |  |  |  |
Unearned revenue | (32,888) |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and investments, net (6) | $ | 11,934,248 |  |  |  |  |  |  |  |  |  |  |  |  |
________________________ (1)“Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“UPB”) of each loan in our portfolio, of the interest rate required to be paid as stated in the individual loan agreements. Certain loans and investments that require an accrual rate to be paid at maturity are not included in the weighted average pay rate as shown in the table. (2)Including extension options, the weighted average remaining months to maturity at March 31, 2026 and December 31, 2025 was 20.8 and 19.9, respectively. (3)The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position. (4)The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss. (5)At March 31, 2026 and December 31, 2025, bridge loans included 224 and 298, respectively, of SFR loans with a total gross loan commitment of $4.62 billion and $4.73 billion, respectively, of which $3.27 billion and $3.18 billion, respectively, was funded. (6)Excludes exit fee receivables of $40.6 million and $43.0 million at March 31, 2026 and December 31, 2025, respectively, which is included in other assets on the consolidated balance sheets. Concentration of Credit Risk We are subject to concentration risk in that, at March 31, 2026, the UPB related to 33 loans with five different borrowers represented 8% of total assets. At December 31, 2025, the UPB related to 65 loans with five different borrowers represented 9% of total assets. During both the three months ended March 31, 2026 and the year ended December 31, 2025, 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, payment status in accordance with current contractual terms, and funded cash reserves. Other factors such as guarantees and other forms of recourse, market strength, remaining loan term and borrower equity are also reviewed and considered in 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 reviewed; however, we maintain a higher level of scrutiny and focus on loans that we consider “high risk” and that possess deteriorating credit quality. Generally speaking, given our typical loan profile, risk ratings of pass and pass/watch suggest the loan is performing and that we expect the borrower to make both principal and interest payments according to the contractual terms of the current loan agreement. A risk rating of special mention indicates loans that require closer monitoring given an observed credit weakness or may have been modified, but we currently expect the borrower to make both principal and interest payments according to the terms of the current loan agreement or we expect to fully recover our investment, including accrued interest, through the current value of the collateral and/or the financial strength of the guarantors. A risk rating of substandard indicates we have observed weaknesses or significant deterioration in multiple credit quality factors, we expect the loan to underperform in the near term, and we anticipate the loan will require intervention in the form of a modification or potential foreclosure to avoid or limit a loss of interest and/or principal. A risk rating of doubtful indicates a loss of interest and/or principal is probable and we are actively exploring options to protect our investment including foreclosing on the underlying collateral. Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as the financial strength of guarantors, market strength, asset quality, or a borrower's ability to perform under modified loan terms may result in a rating that is higher or lower than might be indicated by any risk rating matrix. A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at March 31, 2026, and charge-offs recorded for the three months ended March 31, 2026 is as follows ($ in thousands):
|  | UPB by Origination Year |  | Total |  | Wtd. Avg. First Dollar LTV Ratio |  | Wtd. Avg. Last Dollar LTV Ratio
Asset Class / Risk Rating |  | 2026 |  | 2025 |  | 2024 |  | 2023 |  | 2022 |  | Prior |  |  |
Multifamily: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 430,100 |  |  | $ | 600,924 |  |  | $ | 47,468 |  |  | $ | 38,673 |  |  | $ | 79,883 |  |  | $ | 174,014 |  |  | $ | 1,371,062 |  |  |  |  |
Pass/Watch |  | 46,000 |  |  | 999,872 |  |  | 273,570 |  |  | 86,290 |  |  | 344,490 |  |  | 736,622 |  |  | 2,486,844 |  |  |  |  |
Special Mention |  | — |  |  | 408,273 |  |  | 206,869 |  |  | 25,654 |  |  | 1,547,788 |  |  | 1,755,859 |  |  | 3,944,443 |  |  |  |  |
Substandard |  | — |  |  | 4,980 |  |  | 22,758 |  |  | — |  |  | 282,250 |  |  | 168,820 |  |  | 478,808 |  |  |  |  |
Doubtful |  | — |  |  | — |  |  | 9,460 |  |  | 21,100 |  |  | 205,533 |  |  | 157,101 |  |  | 393,194 |  |  |  |  |
Total Multifamily |  | $ | 476,100 |  |  | $ | 2,014,049 |  |  | $ | 560,125 |  |  | $ | 171,717 |  |  | $ | 2,459,944 |  |  | $ | 2,992,416 |  |  | $ | 8,674,351 |  |  | 3 | % |  | 82 | %
Single-Family Rental: |  | Percentage of portfolio |  | 72 | % |  |  |  |
Pass |  | $ | — |  |  | $ | 27,000 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 27,000 |  |  |  |  |
Pass/Watch |  | 36,400 |  |  | 878,166 |  |  | 934,628 |  |  | 550,457 |  |  | 486,043 |  |  | 106,080 |  |  | 2,991,774 |  |  |  |  |
Special Mention |  | 39,510 |  |  | 113,755 |  |  | 17,079 |  |  | 46,183 |  |  | 25,900 |  |  | 6,891 |  |  | 249,318 |  |  |  |  |
Total Single-Family Rental |  | $ | 75,910 |  |  | $ | 1,018,921 |  |  | $ | 951,707 |  |  | $ | 596,640 |  |  | $ | 511,943 |  |  | $ | 112,971 |  |  | $ | 3,268,092 |  |  | 0 | % |  | 64 | %
Office: |  | Percentage of portfolio |  | 27 | % |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 33,410 |  |  | $ | 33,410 |  |  |  |  |
Total Office |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 33,410 |  |  | $ | 33,410 |  |  | 0 | % |  | 88 | %
Retail: |  | Percentage of portfolio |  | < 1% |  |  |  |
Substandard |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,424 |  |  | $ | 16,424 |  |  |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 531 |  |  | 531 |  |  |  |  |
Total Retail |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,955 |  |  | $ | 16,955 |  |  | 0 | % |  | 100 | %
Land: |  | Percentage of portfolio |  | < 1% |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,785 |  |  | $ | 2,785 |  |  |  |  |
Total Land |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,785 |  |  | $ | 2,785 |  |  | 0 | % |  | 14 | %
Commercial: |  | Percentage of portfolio |  | < 1% |  |  |  |
Doubtful |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,700 |  |  | $ | 1,700 |  |  |  |  |
Total Commercial |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,700 |  |  | $ | 1,700 |  |  | 0 | % |  | 100 | %
|  | Percentage of portfolio |  | < 1% |  |  |  |
Grand Total |  | $ | 552,010 |  |  | $ | 3,032,970 |  |  | $ | 1,511,832 |  |  | $ | 768,357 |  |  | $ | 2,971,887 |  |  | $ | 3,160,237 |  |  | $ | 11,997,293 |  |  | 2 | % |  | 77 | %
Charge-offs |  | $ | — |  |  | $ | — |  |  | $ | 3,829 |  |  | $ | — |  |  | $ | 11,322 |  |  | $ | 3,057 |  |  | $ | 18,208 |  |  |  |  |
A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at December 31, 2025, and charge-offs recorded during 2025 is as follows ($ in thousands):
|  | UPB by Origination Year |  | Total |  | Wtd. Avg. First Dollar LTV Ratio |  | Wtd. Avg. Last Dollar LTV Ratio |  |
Asset Class / Risk Rating |  | 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior |  |  |  |  |
Multifamily: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 556,801 |  |  | $ | 87,533 |  |  | $ | 22,253 |  |  | $ | 9,832 |  |  | $ | 34,843 |  |  | $ | 26,758 |  |  | $ | 738,020 |  |  |  |  |  |  |
Pass/Watch |  | 1,195,412 |  |  | 429,300 |  |  | 108,276 |  |  | 376,064 |  |  | 526,961 |  |  | 159,810 |  |  | 2,795,823 |  |  |  |  |  |  |
Special Mention |  | 211,404 |  |  | 186,984 |  |  | 185,088 |  |  | 1,788,580 |  |  | 2,028,742 |  |  | 44,479 |  |  | 4,445,277 |  |  |  |  |  |  |
Substandard |  | 4,990 |  |  | 47,258 |  |  | 21,100 |  |  | 297,729 |  |  | 307,350 |  |  | — |  |  | 678,427 |  |  |  |  |  |  |
Doubtful |  | — |  |  | 9,460 |  |  | — |  |  | 153,443 |  |  | 28,826 |  |  | 24,565 |  |  | 216,294 |  |  |  |  |  |  |
Total Multifamily |  | $ | 1,968,607 |  |  | $ | 760,535 |  |  | $ | 336,717 |  |  | $ | 2,625,648 |  |  | $ | 2,926,722 |  |  | $ | 255,612 |  |  | $ | 8,873,841 |  |  | 3 | % |  | 81 | % |  |
Single-Family Rental: |  | Percentage of portfolio |  | 73 | % |  |  |  |  |  |
Pass |  | $ | 98,510 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 98,510 |  |  |  |  |  |  |
Pass/Watch |  | 859,819 |  |  | 1,006,016 |  |  | 571,891 |  |  | 448,769 |  |  | 71,916 |  |  | 34,216 |  |  | 2,992,627 |  |  |  |  |  |  |
Special Mention |  | 36,230 |  |  | — |  |  | — |  |  | 52,943 |  |  | — |  |  | 4,600 |  |  | 93,773 |  |  |  |  |  |  |
Total Single-Family Rental |  | $ | 994,559 |  |  | $ | 1,006,016 |  |  | $ | 571,891 |  |  | $ | 501,712 |  |  | $ | 71,916 |  |  | $ | 38,816 |  |  | $ | 3,184,910 |  |  | 0 | % |  | 64 | % |  |
Office: |  | Percentage of portfolio |  | 26 | % |  |  |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 33,410 |  |  | $ | 33,410 |  |  |  |  |  |  |
Total Office |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 33,410 |  |  | $ | 33,410 |  |  | 0 | % |  | 88 | % |  |
Retail: |  | Percentage of portfolio |  | < 1% |  |  |  |  |  |
Substandard |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,424 |  |  | $ | 16,424 |  |  |  |  |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 531 |  |  | 531 |  |  |  |  |  |  |
Total Retail |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,955 |  |  | $ | 16,955 |  |  | 0 | % |  | 97 | % |  |
Land: |  | Percentage of portfolio |  | < 1% |  |  |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,291 |  |  | $ | 2,291 |  |  |  |  |  |  |
Total Land |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,291 |  |  | $ | 2,291 |  |  | 0 | % |  | 77 | % |  |
Commercial: |  | Percentage of portfolio |  | < 1% |  |  |  |  |  |
Doubtful |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,700 |  |  | $ | 1,700 |  |  |  |  |  |  |
Total Commercial |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,700 |  |  | $ | 1,700 |  |  | 0 | % |  | 100 | % |  |
|  | Percentage of portfolio |  | < 1% |  |  |  |  |  |
Grand Total |  | $ | 2,963,166 |  |  | $ | 1,766,551 |  |  | $ | 908,608 |  |  | $ | 3,127,360 |  |  | $ | 2,998,638 |  |  | $ | 348,784 |  |  | $ | 12,113,107 |  |  | 2 | % |  | 77 | % |  |
Charge-offs |  | $ | — |  |  | $ | 3,000 |  |  | $ | — |  |  | $ | 24,476 |  |  | $ | 31,968 |  |  | $ | 68,893 |  |  | $ | 128,337 |  |  |  |  |  |  |
Geographic Concentration Risk At March 31, 2026 and December 31, 2025, underlying properties in Texas and Florida represented 23% and 17%, respectively, of the outstanding balance of our loan and investment portfolio. No other states represented 10% or more of the total loan and investment portfolio. Allowance for Credit Losses A summary of the changes in the allowance for credit losses is as follows ($ in thousands):
| Three Months Ended March 31, 2026
| Multifamily |  | Single-Family Rental |  | Retail |  | Commercial |  | Office |  | Land |  |  |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 131,924 |  |  | $ | 8,817 |  |  | $ | 2,903 |  |  | $ | 1,700 |  |  | $ | 251 |  |  | $ | 376 |  |  |  |  | $ | 145,971 |
Provision for credit losses (net of reversals) | 4,746 |  |  | (907) |  |  | — |  |  | — |  |  | (3) |  |  | (376) |  |  |  |  | 3,460 |
Charge-offs | (18,208) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | (18,208) |
Ending balance | $ | 118,462 |  |  | $ | 7,910 |  |  | $ | 2,903 |  |  | $ | 1,700 |  |  | $ | 248 |  |  | $ | — |  |  |  |  | $ | 131,223 |
| Three Months Ended March 31, 2025
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 148,139 |  |  | $ | 7,524 |  |  | $ | 3,293 |  |  | $ | 1,700 |  |  | $ | 181 |  |  | $ | 78,130 |  |  |  |  | $ | 238,967 |
Provision for credit losses (net of reversals) | 6,772 |  |  | (1,000) |  |  | — |  |  | — |  |  | 328 |  |  | (130) |  |  |  |  | 5,970 |
Recoveries | (406) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | (406) |
Charge-offs, net (1) | (3,594) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | (3,594) |
Ending balance | $ | 150,911 |  |  | $ | 6,524 |  |  | $ | 3,293 |  |  | $ | 1,700 |  |  | $ | 509 |  |  | $ | 78,000 |  |  |  |  | $ | 240,937 |
________________________ (1)Represents the allowance for credit losses on a bridge loan and a mezzanine loan that were charged-off in connection with the foreclosure of the underlying collateral as REO assets at fair value. The provision for credit losses during the three months ended March 31, 2026 was primarily attributable to specifically impaired multifamily loans and losses recorded on the foreclosure and sale of a REO asset, partially offset by improved outlook of the macroeconomic commercial real estate market. Our estimate of allowance for credit losses on our structured portfolio, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that reflects recent observable data, including price indices for commercial real estate, unemployment rates, and interest rates. The expected credit losses over the contractual period of our loans also include the obligation to extend credit through our unfunded loan commitments. Estimates of current expected credit losses (“CECL”) for unfunded loan commitments are adjusted quarterly and correspond with the associated outstanding loans. At March 31, 2026 and December 31, 2025, we had outstanding unfunded commitments of $1.79 billion and $1.92 billion, respectively, that we are obligated to fund as borrowers meet certain requirements. The outstanding unfunded commitments are predominantly related to our SFR build-to-rent ("BTR") business. At March 31, 2026 and December 31, 2025, accrued interest receivable related to our loans totaling $165.3 million and $165.7 million, respectively, was excluded from the estimate of credit losses, is subject to our revenue recognition policy, and is included in other assets on the consolidated balance sheets. All of our structured loans and investments are secured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end. A summary of our specific reserve loans considered impaired by asset class is as follows ($ in thousands):
|  | March 31, 2026
Asset Class |  | UPB (1) |  | Carrying Value |  | Allowance for Credit Losses |  | Wtd. Avg. First Dollar LTV Ratio |  | Wtd. Avg. Last Dollar LTV Ratio
Multifamily |  | $ | 318,709 |  |  | $ | 316,068 |  |  | $ | 26,962 |  |  | 0 | % |  | 96 | %
Retail |  | 16,955 |  |  | 16,911 |  |  | 2,903 |  |  | 0 | % |  | 97 | %
Commercial |  | 1,700 |  |  | 1,700 |  |  | 1,700 |  |  | 0 | % |  | 100 | %
Total |  | $ | 337,364 |  |  | $ | 334,679 |  |  | $ | 31,565 |  |  | 0 | % |  | 96 | %
|  | December 31, 2025
Multifamily |  | $ | 366,275 |  |  | $ | 363,635 |  |  | $ | 38,487 |  |  | 0 | % |  | 96 | %
Retail |  | 16,955 |  |  | 16,855 |  |  | 2,903 |  |  | 0 | % |  | 97 | %
Commercial |  | 1,700 |  |  | 1,700 |  |  | 1,700 |  |  | 0 | % |  | 100 | %
Total |  | $ | 384,930 |  |  | $ | 382,190 |  |  | $ | 43,090 |  |  | 0 | % |  | 96 | %
________________________ (1)Represents the UPB of 17 and 20 impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at March 31, 2026 and December 31, 2025, respectively. Non-performing Loans Loans are generally classified as non-performing once the contractual payments exceed 60 days past due, unless past due payments due to us are in the process of being collected or otherwise reasonably certain to be received in the immediate future. Income from non-performing loans is generally recognized on a cash basis when it is received. Full income recognition will resume when the loan becomes contractually current, and performance has recommenced. At March 31, 2026, 19 loans with an aggregate net carrying value of $460.0 million, net of related loan loss reserves of $16.1 million, were classified as non-performing and, at December 31, 2025, 26 loans with an aggregate net carrying value of $545.0 million, net of related loan loss reserves of $10.2 million, were classified as non-performing. A summary of our non-performing loans by asset class is as follows ($ in thousands):
| March 31, 2026 |  | December 31, 2025
| UPB |  | Carrying Value |  | UPB |  | Carrying Value
Multifamily | $ | 479,219 |  |  | $ | 473,919 |  |  | $ | 566,906 |  |  | $ | 553,016 |
Commercial | 1,700 |  |  | 1,700 |  |  | 1,700 |  |  | 1,700 |
Retail | 531 |  |  | 531 |  |  | 531 |  |  | 531 |
Total | $ | 481,450 |  |  | $ | 476,150 |  |  | $ | 569,137 |  |  | $ | 555,247 |
At March 31, 2026 and December 31, 2025, we had loans with a UPB of $20.8 million and $237.0 million, respectively, and accrued interest of $0.2 million and $6.6 million, respectively, that were greater than 60 days past due and classified as performing loans. All past due payments on these loans have been subsequently collected. Other Non-accrual Loans In this challenging economic environment, we have been experiencing late and partial payments on certain loans in our structured portfolio. Therefore, for loans that are 60 days past due or less, if we have determined there is reasonable doubt about collectability of all principal and interest, we classify those loans as non-accrual and recognize interest income only when cash is received. The table below is a summary of those loans that are 60 days past due or less that we have classified as non-accrual, and changes to those loans for the periods presented ($ in thousands).
|  | Three Months Ended March 31, 2026 |  |
Beginning balance (3 multifamily bridge loans) |  | $ | 48,311 |  |  |
Loans that progressed to greater than 60 days past due |  | (1,221) |  |  |
Loans modified or paid off |  | (47,090) |  |  |
Ending balance |  | $ | — |  |  |
|  | Three Months Ended March 31, 2025 |  |
Beginning balance (9 multifamily bridge loans) |  | $ | 167,428 |  |  |
Loans that progressed to greater than 60 days past due |  | (82,290) |  |  |
Loans modified or paid off |  | (38,490) |  |  |
Additional loans classified as non-accrual |  | 96,175 |  |  |
Ending balance (5 multifamily bridge loans) |  | $ | 142,823 |  |  |
At March 31, 2025, there were two loans included in the table above with a UPB of $74.1 million that have specific reserves totaling $7.3 million. We recorded interest income on non-performing and other non-accrual loans of $6.7 million and $4.5 million during the three months ended March 31, 2026 and 2025, respectively. Loan Modifications We may agree to amend or modify loans to certain borrowers experiencing financial difficulty based on specific facts and circumstances in order to improve long-term collectability efforts and avoid foreclosure and repossession of the underlying collateral. The loan modifications to borrowers experiencing financial difficulty may include a delay in payments, including payment deferrals, term extensions, principal forgiveness, interest rate reductions, or a combination thereof. We record interest on modified loans on an accrual basis to the extent the modified loan is contractually current and we believe it is ultimately collectible. The allowance for credit losses on loan modifications is measured using the same method as all other loans held for investment. As part of the modifications of each of these loans, we generally expect borrowers to invest additional capital to recapitalize their projects, which the vast majority have funded in the form of either, or a combination of: (1) reallocation of and/or additional deposits into interest, renovation and/or general reserves; (2) the purchase of a new rate cap; (3) a principal paydown of the loan; and (4) bringing any delinquent loans current by paying past due interest owed. The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during the three months ended March 31, 2026 ($ in thousands):
Asset Class |  | Payment Deferrals With/Without Term Extensions (1) |  | Rate Reductions With/Without Term Extensions (2) |  | Other (3) |  | Total (4)(5)(6)
Multifamily |  | $ | 166,786 |  |  | $ | 196,594 |  |  | $ | 115,420 |  |  | $ | 478,800 |
________________________ (1)These loans were modified to a weighted average pay rate and deferred rate of 4.62% and 2.80%, respectively, at March 31, 2026. These loans were also modified to extend the weighted average term by 23.5 months. These modifications also include a loan with a UPB of $65.1 million in which the pay rate increases from time-to-time throughout the loan maturity. (2)These loans were modified to reduce the interest rate to a weighted average pay rate and deferred rate of 5.26% and 1.08%, respectively, at March 31, 2026, and to extend the weighted average term by 18.7 months. (3)These loan modifications included amending certain terms, such as reallocating and/or replenishment of reserves, providing for a temporary and conditional forbearance of foreclosure, delaying past due interest payments and replacing the existing property management company. (4)The total UPB of these loan modifications were $479.3 million at March 31, 2026 and represented 4% of our total Structured Business loan and investment portfolio at March 31, 2026. (5)At March 31, 2026, modified loans with a UPB of $33.0 million have specific reserves totaling $1.0 million. (6)Includes loans with a total UPB of $308.1 million which were previously modified in prior years. Using the SOFR rate at March 31, 2026, such loans were modified from a weighted average pay rate and deferred rate of 5.32% and 2.29%, respectively, to a weighted average pay rate and deferred rate of 4.27% and 2.59%, respectively. The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during the three months ended March 31, 2025 ($ in thousands):
Asset Class |  | Payment Deferrals With/Without Term Extensions (1) |  |  |  |  |  | Other (2) |  | Total (3)(4)(5) |  |
Multifamily |  | $ | 849,365 |  |  |  |  |  |  | $ | 83,975 |  |  | $ | 933,340 |  |  |
Single-Family Rental |  | — |  |  |  |  |  |  | 16,490 |  |  | 16,490 |  |  |
Total UPB |  | $ | 849,365 |  |  |  |  |  |  | $ | 100,465 |  |  | $ | 949,830 |  |  |
________________________ (1)These loans were modified to a weighted average pay rate and deferred rate of 5.18% and 2.56%, respectively, at March 31, 2025. A portion of these loans (total UPB of $108.7 million) were also modified to extend the weighted average term by 19.6 months. These modifications also include loans with a total UPB of $470.3 million in which the pay rate increases from time-to-time throughout the loans maturities. (2)These loan modifications included amending certain terms, such as reallocating and/or replenishment of reserves, providing for a temporary and conditional forbearance of foreclosure and temporarily delaying past due interest payments. (3)The total UPB of these loan modifications were $949.8 million at March 31, 2025 and represented 8% of our total Structured Business loan and investment portfolio at March 31, 2025. (4)At March 31, 2025, a modified loan with a UPB of $25.5 million had a specific reserve of $5.2 million. (5)Includes loans with a total UPB of $370.9 million which were previously modified in prior years. Using the SOFR rate at March 31, 2025, such loans were modified from a weighted average pay rate and deferred rate of 6.82% and 1.09%, respectively, to a weighted average pay rate and deferred rate of 4.52% and 3.38%, respectively. During the three months ended March 31, 2026, we recorded $0.2 million of deferred interest on the loans that we modified during the first quarter of 2026 and $5.4 million for loans previously modified. During the three months ended March 31, 2025, we recorded $3.8 million of deferred interest on the loans that we modified during the first quarter of 2025 and $9.1 million for loans previously modified. During the three months ended March 31, 2025, we reversed through interest income $3.3 million of interest receivable that was previously accrued on modified loans that we deemed the collection of interest to be doubtful. At March 31, 2026 and December 31, 2025, we have recorded deferred interest totaling $73.1 million and $68.3 million, respectively, on all modified loans to borrowers experiencing financial difficulty. The deferred interest is included in other assets on the consolidated balance sheets. At March 31, 2026 and December 31, 2025, we had future funding commitments on modified loans with borrowers experiencing financial difficulty of $14.7 million and $17.4 million, respectively, which are generally subject to performance covenants that must be met by the borrower to receive funding. All loan modifications completed in the past 12 months were performing pursuant to their contractual terms at March 31, 2026, except for two loans with a total UPB of $47.7 million. Since these loans are not performing pursuant to their modified terms, these loans are classified as non-performing loans. One of these loans with a UPB of $25.6 million have specific loan loss reserves totaling $2.2 million. The remaining loan has no specific reserve as the estimated fair value of the property exceeded its carrying value at March 31, 2026. There were no other material loan modifications, refinancings and/or extensions during the three months ended March 31, 2026 and 2025 for borrowers experiencing financial difficulty. Loan Resolutions In March 2026, we exercised our right to foreclose on a property in Houston, Texas that was the underlying collateral for a non-performing bridge loan with a UPB of $25.0 million, an interest rate of SOFR plus 3.25% with a SOFR floor of 0.15%, and a net carrying value of $24.8 million. At foreclosure, we recorded a loss of $1.8 million to the provision for credit losses on the consolidated statements of income and charged-off the $1.8 million loan loss reserve. We sold the property in March 2026 for $25.0 million to a new borrower and provided a $24.5 million bridge loan with an interest rate of SOFR plus 2.50% with a SOFR floor of 2.00%. In October 2025, we exercised our right to foreclose on a property in Joshua, Texas that was the underlying collateral for a non-accruing bridge loan with a UPB of $16.5 million, an interest rate of SOFR plus 4.75% with a SOFR floor of 5.24%, and a net carrying value of $16.4 million. We sold the property in October 2025 for $16.5 million to a new borrower and provided a $15.5 million bridge loan with an interest rate equal to the greater of 5.68% or SOFR plus 1.70%. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.2 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan. In October 2025, we exercised our right to foreclose on a property in Houston, Texas that was the underlying collateral for a non-accruing bridge loan with a UPB of $31.2 million, an interest rate of SOFR plus 4.25% with a SOFR floor of 2.51%, and a net carrying value of $25.1 million, which includes a loan loss reserve of $2.5 million. At foreclosure, we recorded a $0.8 million loan loss reversal and charged-off the remaining loan loss reserves of $1.7 million. We sold the property in December 2025 for $30.0 million to a new borrower and provided a $29.5 million bridge loan with an interest rate equal to the greater of 4.50% or SOFR plus 2.50%. In June 2025, we exercised our right to foreclose on three properties in San Antonio, Texas that were the underlying collateral for a bridge loan with a UPB of $77.7 million, an interest rate of 5.25% with a SOFR floor of 0.50%, and a net carrying value of $66.6 million, which includes loan loss reserves of $3.5 million. At foreclosure, we recorded an additional loss of $5.9 million to the provision for credit losses on the consolidated statements of income and charged-off the $9.4 million loan loss reserve. We simultaneously sold the properties for $65.0 million to a new borrower and provided a $65.0 million bridge loan with an interest rate of SOFR plus 2.00% for years one and two, and SOFR plus 3.00% for year three, subject to SOFR floors of 4.25%, 5.25% and 6.25% in years one, two and three, respectively. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.8 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan. In April 2025, we exercised our right to foreclose on two properties in Austin, Texas that were the underlying collateral for a non-performing bridge loan with a UPB of $21.2 million, an interest rate of SOFR plus 4.00% with a SOFR floor of 0.25%, and a net carrying value of $21.7 million. At foreclosure, we recorded an additional loss of $1.0 million to the provision for credit losses on the consolidated statements of income. We sold the properties in June 2025 for $20.7 million to a new borrower and provided a $19.2 million bridge loan with an interest rate of SOFR plus 2.00% in year one and SOFR plus 3.00% in year two. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.1 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan. In April 2025, we exercised our right to foreclose on two properties in Orange Park, Florida that were the underlying collateral for a non-performing bridge loan with a UPB of $17.0 million, an interest rate of SOFR plus 4.38% with a SOFR floor of 2.46%, and a net carrying value of $15.7 million. At foreclosure, we recorded an additional loss of $0.3 million to the provision for credit losses on the consolidated statements of income. We sold the properties in June 2025 for $15.4 million to a new borrower and provided a $14.8 million bridge loan with an interest rate of SOFR plus 1.50%. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.6 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan. See Note 9 for additional loan resolution details. Interest Reserves Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve as required by the loan documents to cover debt service costs. At March 31, 2026 and December 31, 2025, we had total interest reserves of $244.0 million and $259.7 million, respectively, on 382 loans and 444 loans, respectively, with a total UPB of $8.22 billion and $8.68 billion, respectively.

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