Real Estate Owned

3 Months Ended

Mar. 31, 2026

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


	March 31, 2026								December 31, 2025
	Multifamily		Office		Land		Total		Multifamily		Office		Land		Total
Land	$	111,566	$	13,599	$	7,947	$	133,112	$	109,788	$	13,599	$	7,947	$	131,334
Building and intangible assets	395,552		55,132		—		450,684		363,281		48,882		—		412,163
Less: Impairment loss	(33,000)		(2,500)		—		(35,500)		(20,500)		(2,500)		—		(23,000)
Less: Accumulated depreciation and amortization	(23,979)		(3,551)		—		(27,530)		(18,015)		(3,544)		—		(21,559)
Real estate owned, net	$	450,139	$	62,680	$	7,947	$	520,766	$	434,554	$	56,437	$	7,947	$	498,938
Number of foreclosed loans	17		2		2		21		15		2		2		19
Number of properties	32		2		2		36		31		2		2		35

During the three months ended March 31, 2026, we foreclosed on two multifamily bridge loans, each with one property as collateral, with an aggregate net carrying value of $34.0 million and received ownership of the underlying collateral as REO assets. The foreclosed loans did not have any related specific CECL reserves as of the foreclosure dates. There were no gains or losses recognized upon foreclosure.

During the three months ended March 31, 2026, we sold an existing multifamily REO property for $8.0 million, and recognized a loss of $2.0 million, excluding the loss associated with the significant financing component discussed below. Additionally, we provided new bridge loan financing to the new borrowers totaling $9.5 million, inclusive of $2.5 million to fund renovations, that bears interest at the greater of a fixed rate of 5.17% or SOFR plus 1.50% for year one, and a fixed rate of 6.17%, or SOFR plus 2.50% for year two. The new financing provided was deemed to be a significant financing component of the transaction and, as a result, for the three months ended March 31, 2026, 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. The losses of the transaction were recorded through loss on real estate on the consolidated statements of income.

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

During the three months ended March 31, 2026, we determined that certain of our REO assets exhibited indicators of impairment based on expected disposition strategies, our evaluation of current market conditions and other property-specific assumptions. Based on our impairment analysis performed, we recorded an impairment loss of $12.5 million related to six properties, which represents the extent to which the carrying value of the properties exceeded their estimated fair value.

At March 31, 2026 and December 31, 2025, we had notes payable totaling $253.2 million and $223.0 million, respectively, which are collateralized by our REO assets. Interest rates on the notes range from SOFR plus 2.50% to SOFR plus 3.25%, with maturities spanning from August 2026 to September 2027.

At March 31, 2026 and December 31, 2025, our multifamily REO properties had a weighted average occupancy rate of approximately 49% and 45%, respectively, excluding three and two properties, respectively, that were vacant due to renovations. At March 31, 2026 and December 31, 2025, both our office buildings were vacant.

We recorded depreciation expense related to the REO assets of $6.1 million and $2.7 million for the three months ended March 31, 2026, and 2025, respectively.