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Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net | 9 Months Ended
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Sep. 30, 2025
Receivables [Abstract] |
Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net | Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net Our loan portfolio was comprised of the following at September 30, 2025 and December 31, 2024 ($ in thousands):
Loan Type |  | September 30, 2025 |  |  | December 31, 2024 |
Commercial mortgage loans, net(1) |  | $ | 8,149,855 |  |  | $ | 6,715,347 |
Subordinate loans, net |  |  | 153,790 |  |  |  | 388,809 |
Total loans, net |  | $ | 8,303,645 |  |  | $ | 7,104,156 |
Note receivable, held for sale |  |  | — |  |  |  | 41,200 |
Carrying value, net |  | $ | 8,303,645 |  |  | $ | 7,145,356 |
(1) Includes $61.2 million and $8.3 million in 2025 and 2024, respectively, of contiguous financing structured as subordinate loans. Our loan portfolio consisted of 98% and 95% floating rate loans, based on amortized cost, net of Specific CECL Allowance, as of September 30, 2025 and December 31, 2024, respectively. Activity relating to our loan portfolio for the nine months ended September 30, 2025 was as follows ($ in thousands):
|  | Principal Balance |  |  | Deferred Fees/Other Items |  |  | Specific CECL Allowance |  |  | Carrying Value, Net(1) |
December 31, 2024 |  | $ | 7,550,410 |  |  | $ | (31,718 | ) |  | $ | (342,500 | ) |  | $ | 7,176,192 |
New loan fundings |  | $ | 2,183,157 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,183,157 |
Add-on loan fundings(2) |  | $ | 701,538 |  |  | $ | — |  |  | $ | — |  |  | $ | 701,538 |
Loan repayments and sale |  | $ | (2,057,725 | ) |  | $ | — |  |  | $ | — |  |  | $ | (2,057,725 | )
Gain (loss) on foreign currency translation |  | $ | 353,903 |  |  | $ | (1,329 | ) |  | $ | — |  |  | $ | 352,574 |
Realized loss on investment(3) |  | $ | (7,436 | ) |  | $ | — |  |  | $ | — |  |  | $ | (7,436 | )
Decrease in Specific CECL Allowance |  | $ | — |  |  | $ | — |  |  | $ | 7,500 |  |  | $ | 7,500 |
Deferred fees and other items(4) |  | $ | — |  |  | $ | (36,912 | ) |  | $ | — |  |  | $ | (36,912 | )
Amortization of fees |  | $ | 4,785 |  |  | $ | 19,229 |  |  | $ | — |  |  | $ | 24,014 |
September 30, 2025 |  | $ | 8,728,632 |  |  | $ | (50,730 | ) |  | $ | (335,000 | ) |  | $ | 8,342,902 |
General CECL Allowance(5) |  |  |  |  |  |  |  |  |  |  | $ | (39,257 | )
Carrying value, net |  |  |  |  |  |  |  |  |  |  | $ | 8,303,645 |
(1) Includes Note receivable, held for sale as of December 31, 2024. The Note receivable, held for sale was sold during the third quarter of 2025. (2) Represents fundings subsequent to loan closing. (3) Realized loss on investment includes $6.2 million related to discounted payoff of the Michigan Office Loan (as defined and discussed below) and $1.2 million related to the sale of a promissory note previously recorded as Note receivable, held for sale (refer to Loans and Other Lending Assets Held for Sale in "Note 3 – Fair Value Disclosure"). (4) Other items primarily consist of purchase discounts or premiums, cost recovery interest, exit fees, and deferred origination expenses. (5) $5.8 million of the General CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheet. The following table details overall statistics for our loan portfolio at the dates indicated ($ in thousands):
|  | September 30, 2025 |  |  | December 31, 2024(1) |
Number of loans |  |  | 54 |  |  |  | 46 |
Principal balance |  | $ | 8,728,632 |  |  | $ | 7,550,410 |
Carrying value, net |  | $ | 8,303,645 |  |  | $ | 7,145,356 |
Unfunded loan commitments(2) |  | $ | 1,034,562 |  |  | $ | 840,627 |
Weighted-average cash coupon(3) |  |  | 7.0 | % |  |  | 7.5 | %
Weighted-average remaining fully-extended term(4) |  | 3.0 years |  |  | 2.5 years |
Weighted-average expected term(5) |  | 2.2 years |  |  | 1.9 years |
(1) Includes Note receivable, held for sale. (2) Unfunded loan commitments are primarily funded to finance construction costs, tenant improvements, leasing commissions, or carrying costs. These future commitments are funded over the term of each loan, subject in certain cases to an expiration date. (3) For floating rate loans, based on applicable benchmark rates as of the specified dates. For loans placed on nonaccrual, the interest rate used in calculating weighted-average cash coupon is 0%. (4) Assumes all extension options are exercised. (5) Expected term represents our estimated timing of repayments as of the specified dates. Excludes risk-rated five loans. Property Type The table below details the property type of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
|  | September 30, 2025 |  | December 31, 2024 |
Property Type |  | Carrying Value |  |  | % of Portfolio(1) |  | Carrying Value |  |  | % of Portfolio(1) |
Residential(2) |  | $ | 2,545,682 |  |  | 30.5% |  | $ | 1,556,819 |  |  | 21.8% |
Office |  |  | 2,040,028 |  |  | 24.5 |  |  | 1,756,965 |  |  |  | 24.6 |
Hotel |  |  | 1,459,879 |  |  | 17.5 |  |  | 1,575,270 |  |  | 22.1 |
Industrial |  |  | 832,824 |  |  | 10.0 |  |  | 399,546 |  |  | 5.6 |
Data Centers |  |  | 445,539 |  |  | 5.3 |  |  | — |  |  |  | 0.0 |
Retail |  |  | 359,497 |  |  | 4.3 |  |  | 946,017 |  |  | 13.3 |
Mixed Use |  |  | 304,376 |  |  | 3.6 |  |  | 363,211 |  |  | 5.1 |
Other(3) |  |  | 355,077 |  |  | 4.3 |  |  | 537,164 |  |  | 7.5 |
Total |  | $ | 8,342,902 |  |  | 100.0% |  | $ | 7,134,992 |  |  | 100.0% |
General CECL Allowance(4) |  |  | (39,257 | ) |  |  |  |  | (30,836 | ) |  |  |
Total Carrying Value, net |  | $ | 8,303,645 |  |  |  |  | $ | 7,104,156 |  |  |  |
(1) Percentage of portfolio calculations are made prior to consideration of General CECL Allowance. (2) Includes senior housing (10.5%), multifamily (9.1%), student housing (5.3%), residential-for-sale (3.7%), and vacation rentals (1.9%) in 2025 and senior housing (4.7%), multifamily (4.7%), student housing (4.6%), residential-for-sale (5.5%), and vacation rentals (2.3%) in 2024. (3) Other property types include pu bs (2.7%) and urban predevelopment (1.6%) in 2025, and pubs (2.9%), caravan parks (2.7%), and urban predevelopment (1.9%) in 2024. (4) $5.8 million and $5.9 million of the General CECL Allowance for 2025 and 2024, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets. Geography The table below details the geographic distribution of the properties securing the loans in our portfolio at the dates indicated ($ in thousands):
|  | September 30, 2025 |  | December 31, 2024
Geographic Location |  | Carrying Value |  |  | % of Portfolio(1) |  | Carrying Value |  |  | % of Portfolio(1)
United Kingdom |  | $ | 2,548,921 |  |  | 30.5% |  | $ | 2,423,856 |  |  | 33.9%
New York City |  |  | 1,412,227 |  |  | 16.9 |  |  | 1,539,995 |  |  | 21.6
Other Europe(2) |  |  | 1,175,077 |  |  | 14.1 |  |  | 1,265,344 |  |  | 17.7
Southeast |  |  | 888,876 |  |  | 10.7 |  |  | 511,742 |  |  | 7.2
West |  |  | 807,665 |  |  | 9.7 |  |  | 489,008 |  |  | 6.9
Midwest |  |  | 751,192 |  |  | 9.0 |  |  | 560,436 |  |  | 7.9
Other(3) |  |  | 758,944 |  |  | 9.1 |  |  | 344,611 |  |  | 4.8
Total |  | $ | 8,342,902 |  |  | 100.0% |  | $ | 7,134,992 |  |  | 100.0%
General CECL Allowance(4) |  |  | (39,257 | ) |  |  |  |  | (30,836 | ) |  |
Total Carrying Value, net |  | $ | 8,303,645 |  |  |  |  | $ | 7,104,156 |  |  |
(1) Percentage of portfolio calculations are made prior to consideration of General CECL Allowance. (2) Other Europe includes Germa ny (8.3%), Italy (2.3%%), Sweden (3.2%) and the Netherlands (0.3%) i n 2025 and Germany (8.4%), Italy (2.4%), Spain (3.5%), Sweden (3.1%) and the Netherlands (0.3%) in 2024. (3) Other includes Northeast (3.4%), Mid-Atlantic (1.4%), Southwest (3.1%) and Other (1.2%) in 2025 and Northeast (0.6%), Mid-Atlantic (1.4%), Southwest (1.5%) and Other (1.3%) in 2024. (4) $5.8 million and $5.9 million of the General CECL Allowance for 2025 and 2024, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets. Risk Rating We assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, loan to value ("LTV") ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. We apply these various factors on a case-by-case basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations. This review is performed quarterly. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, which ratings are defined as follows: 1. Very low risk 2. Low risk 3. Moderate/average risk 4. High risk/potential for loss: a loan that has a risk of realizing a principal loss 5. Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss, or an impairment has been recorded The following tables present the carrying value of our loan portfolio by year of origination and internal risk rating and gross write-offs by year of origination as of September 30, 2025 and December 31, 2024, respectively ($ in thousands):
September 30, 2025 |
|  |  |  |  |  |  |  |  |  |  | Amortized Cost(1) by Year Originated |
Risk Rating |  | Number of Loans |  |  | Total |  |  | % of Portfolio |  |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |
1 |  |  | — |  |  | $ | — |  |  | — % |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2 |  |  | 2 |  |  |  | 684,207 |  |  | 8.2% |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 684,207 |  |  | $ | — |  |  | $ | — |
3 |  |  | 49 |  |  |  | 7,461,533 |  |  | 89.4% |  |  | $ | 2,257,997 |  |  | $ | 1,507,990 |  |  | $ | 716,376 |  |  | $ | 948,802 |  |  | $ | 1,051,766 |  |  | $ | 978,602 |
4 |  |  | 1 |  |  |  | 73,112 |  |  | 0.9% |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 73,112 |
5 |  |  | 2 |  |  |  | 124,050 |  |  | 1.5% |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 124,050 |
Total |  |  | 54 |  |  | $ | 8,342,902 |  |  | 100.0% |  |  |  | 2,257,997 |  |  |  | 1,507,990 |  |  |  | 716,376 |  |  |  | 1,633,009 |  |  |  | 1,051,766 |  |  |  | 1,175,764 |
General CECL Allowance(2) |  |  |  | (39,257 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total loans, net |  |  | $ | 8,303,645 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted-Average Risk Rating |  |  |  | 3.0 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross write-offs |  |  | $ | 6,200 |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,200 |
December 31, 2024 |
|  |  |  |  |  |  |  |  |  |  |  | Amortized Cost(1) by Year Originated |
Risk Rating |  | Number of Loans |  |  | Total |  |  | % of Portfolio |  |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |
1 |  |  | — |  |  | $ | — |  |  |  | — | % |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2 |  |  | 3 |  |  |  | 560,180 |  |  | 7.9% |  |  |  |  | — |  |  |  | — |  |  |  | 547,851 |  |  |  | 12,329 |  |  |  | — |  |  |  | — |
3 |  |  | 37 |  |  |  | 6,169,860 |  |  | 86.4% |  |  |  |  | 1,218,189 |  |  |  | 649,599 |  |  |  | 1,549,750 |  |  |  | 1,173,982 |  |  |  | 397,972 |  |  |  | 1,180,368 |
4 |  |  | 2 |  |  |  | 279,732 |  |  | 3.9% |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 279,732 |
5 |  |  | 3 |  |  |  | 125,220 |  |  | 1.8% |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 27,881 |  |  |  | 97,339 |
Total |  |  | 45 |  |  | $ | 7,134,992 |  |  | 100.0% |  |  |  | $ | 1,218,189 |  |  | $ | 649,599 |  |  | $ | 2,097,601 |  |  | $ | 1,186,311 |  |  | $ | 425,853 |  |  | $ | 1,557,439 |
General CECL Allowance(2) |  |  |  | (30,836 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total loans, net |  |  | $ | 7,104,156 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted-Average Risk Rating |  |  |  | 3.0 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross write-offs |  |  | $ | 127,512 |  |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 127,512 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1) Net of Specific CECL Allowance. (2) $5.8 million and $5.9 million of the General CECL Allowance for 2025 and 2024, respectively, is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets. CECL In accordance with ASC Topic 326 "Financial Instruments – Credit Losses" ("ASC 326"), which we refer to as the "CECL Standard," we record allowances for loans and held-to-maturity debt securities that are deducted from the carrying amount of the assets to present the net carrying value of the amounts expected to be collected on the assets. We record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing financial difficulty. For the remainder of the portfolio, we record a general allowance ("General CECL Allowance," and together with the Specific CECL Allowance, "CECL Allowances") on a collective basis by assets with similar risk characteristics. We have elected to use the weighted-average remaining maturity ("WARM") method in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method. The following table summarizes changes in CECL Allowances for the nine months ended September 30, 2025 ($ in thousands):
|  | Specific CECL |  |  | General CECL Allowance |  |  | Total CECL |  |  | CECL Allowance as % of Amortized Cost |
|  | Allowance(1) |  |  | Funded |  |  | Unfunded |  |  | Total |  |  | Allowance |  |  | General(1) |  |  | Total |
December 31, 2024 |  | $ | 342,500 |  |  | $ | 30,836 |  |  | $ | 5,948 |  |  | $ | 36,784 |  |  | $ | 379,284 |  |  |  | 0.52 | % |  |  | 5.07 | %
Changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowances (Reversals), net(2) |  |  | — |  |  |  | 3,876 |  |  |  | 132 |  |  |  | 4,008 |  |  |  | 4,008 |  |  |  |  |  |  |
March 31, 2025 |  | $ | 342,500 |  |  | $ | 34,712 |  |  | $ | 6,080 |  |  | $ | 40,792 |  |  | $ | 383,292 |  |  |  | 0.54 | % |  |  | 4.75 | %
Changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowances (Reversals), net(3) |  |  | — |  |  |  | 4,136 |  |  |  | (1,023 | ) |  |  | 3,113 |  |  |  | 3,113 |  |  |  |  |  |  |
June 30, 2025 |  | $ | 342,500 |  |  | $ | 38,848 |  |  | $ | 5,057 |  |  | $ | 43,905 |  |  | $ | 386,405 |  |  |  | 0.51 | % |  |  | 4.29 | %
Changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowances (Reversals), net(4)(5) |  |  | (1,300 | ) |  |  | 409 |  |  |  | 725 |  |  |  | 1,134 |  |  |  | (166 | ) |  |  |  |  |  |
Write-offs(5) |  |  | (6,200 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6,200 | ) |  |  |  |  |  |
September 30, 2025 |  | $ | 335,000 |  |  | $ | 39,257 |  |  | $ | 5,782 |  |  | $ | 45,039 |  |  | $ | 380,039 |  |  |  | 0.55 | % |  |  | 4.38 | %
(1) Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool. (2) During the three months ended March 31, 2025, our General CECL Allowance increased by $4.0 million. The increase was primarily due to a more adverse macroeconomic outlook as well as the effect of loan originations. The increase was partially offset by the favorable impacts of portfolio seasoning. (3) During the three months ended June 30, 2025, our General CECL Allowance increased by $3.1 millio n. The increase was primarily due to the effect of loan originations as well as extending our expected loan repayment dates. The increase was partially offset by the favorable impacts of portfolio seasoning. (4) During the three months ended September 30, 2025, our General CECL Allowance increased by $1.1 million. The increase was primarily due to the effect of loan originations as well as extending our expected loan repayment dates. The increase was partially offset by the favorable impacts of portfolio seasoning and a more optimistic macroeconomic outlook. (5) During the three months ended September 30, 2025, we recorded a reversal of $1.3 million and a write-off of $6.2 million of our Specific CECL Allowance related to our Michigan Office Loan (as defined and discussed below). The $6.2 million write-off was recorded as a realized loss within net realized loss on investments in our September 30, 2025 condensed consolidated statement of operations. The following table summarizes changes in CECL Allowances for the nine months ended September 30, 2024 ($ in thousands):
|  | Specific CECL |  |  | General CECL Allowance |  |  | Total CECL |  |  | CECL Allowance as % of Amortized Cost |
|  | Allowance(1) |  |  | Funded |  |  | Unfunded |  |  | Total |  |  | Allowance |  |  | General(1) |  |  | Total |
December 31, 2023 |  | $ | 193,000 |  |  | $ | 26,482 |  |  | $ | 4,017 |  |  | $ | 30,499 |  |  | $ | 223,499 |  |  |  | 0.38 | % |  |  | 2.61 | %
Changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowances (Reversals), net(2) |  |  | 142,000 |  |  |  | 6,076 |  |  |  | (392 | ) |  |  | 5,684 |  |  |  | 147,684 |  |  |  |  |  |  |
March 31, 2024 |  | $ | 335,000 |  |  | $ | 32,558 |  |  | $ | 3,625 |  |  | $ | 36,183 |  |  | $ | 371,183 |  |  |  | 0.44 | % |  |  | 4.29 | %
Changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowances (Reversals), net(3) |  |  | 7,500 |  |  |  | 2,761 |  |  |  | (3 | ) |  |  | 2,758 |  |  |  | 10,258 |  |  |  |  |  |  |
June 30, 2024 |  | $ | 342,500 |  |  | $ | 35,319 |  |  | $ | 3,622 |  |  | $ | 38,941 |  |  | $ | 381,441 |  |  |  | 0.47 | % |  |  | 4.40 | %
Changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowances (Reversals), net(4)(5) |  |  | 127,512 |  |  |  | (1,127 | ) |  |  | 228 |  |  |  | (899 | ) |  |  | 126,613 |  |  |  |  |  |  |
Write-offs(5) |  |  | (127,512 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (127,512 | ) |  |  |  |  |  |
September 30, 2024 |  | $ | 342,500 |  |  | $ | 34,192 |  |  | $ | 3,850 |  |  | $ | 38,042 |  |  | $ | 380,542 |  |  |  | 0.49 | % |  |  | 4.64 | %
(1) Loans evaluated for Specific CECL Allowance are excluded from General CECL Allowance pool. (2) During the three months ended March 31, 2024, our General CECL Allowance increased by $5.7 million. The increase was primarily related to extending our expected loan repayment dates as well as an increase to the historical loss rate derived from Trepp's data. The increase was partially offset by the favorable impacts of portfolio seasoning. During the three months ended March 31, 2024, we also recorded an additional $142.0 million Specific CECL Allowance on our Junior Mezzanine A Loan (as defined below - see "Manhattan Residential"), resulting in the loan’s aggregate Specific CECL allowance of $268.0 million. The additional allowance was recorded primarily due to a reduction in list pricing of remaining units and slower sales pace at the property. The slower sales velocity coincided with the continued overall softening in the midtown Manhattan ultra-luxury submarket. (3) During the three months ended June 30, 2024, our General CECL Allowance increased by $2.8 million primarily due to new loan originations as well as a more adverse outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning. Additionally, during the three months ended June 30, 2024, we recorded an increase of $7.5 million to our Specific CECL Allowance. The increase was related to a mezzanine loan secured by an office building in Troy, MI. (4) During the three months ended September 30, 2024, our General CECL Allowance decreased by $0.9 million primarily due to the favorable impacts of portfolio seasoning and earlier than expected loan repayments. The decrease was partially offset by the effects of loan originations and a more adverse macroeconomic outlook associated with our office portfolio. (5) During the three months ended September 30, 2024, we recorded an increase and write-off of $127.5 million of our Specific CECL Allowance related to our Massachusetts Healthcare Loan (as defined and discussed below). The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our September 30, 2024 condensed consolidated statement of operations. General CECL Allowance In determining the General CECL Allowance using the WARM method, an annual historical loss rate, adjusted for macroeconomic estimates, is applied to the amortized cost of an asset, or pool of assets, over each subsequent period for the assets' remaining expected life. We considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment for a reasonable and supportable forecast period. The CECL Standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions, including inflation, labor shortages and interest rates. We derive an annual historical loss rate based on a commercial mortgage-backed securities ("CMBS") database with historical losses from 1998 through the third quarter of 2025 provided by a third party, Trepp LLC ("Trepp"). We apply various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate is further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period of eight quarters. In assessing the macroeconomic environment, we consider macroeconomic factors, including unemployment rate, commercial real estate prices, and market liquidity. We compare the historical data for each metric to historical commercial real estate losses in order to determine the correlation of the data. We use projections, obtained from third-party service providers, of each factor to approximate the impact the macroeconomic outlook may have on our loss rate. The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan(s). The subordinate loans, by virtue of being the first loss position, are required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheets within accounts payable, accrued expenses and other liabilities. The considerations in estimating our General CECL allowance for unfunded loan commitments are similar to those used for the related outstanding loans receivable. Additionally, we have made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of the related commercial mortgage loans and subordinate loans and other lending assets in determining the General CECL Allowance, as any uncollectible accrued interest receivable is written off in a timely manner. As of September 30, 2025 and December 31, 2024, accrued interest receivable was $65.5 million and $58.5 million, respectively, and included within other assets on our condensed consolidated balance sheets. The following table sets forth our General CECL Allowance as of September 30, 2025 and December 31, 2024 ($ in thousands):
|  | September 30, 2025 |  |  | December 31, 2024 |
Commercial mortgage loans, net |  | $ | 39,142 |  |  | $ | 30,167 |
Subordinate loans, net |  |  | 115 |  |  |  | 669 |
Unfunded commitments(1) |  |  | 5,782 |  |  |  | 5,948 |
Total General CECL Allowance |  | $ | 45,039 |  |  | $ | 36,784 |
(1) The General CECL Allowance on unfunded commitments is recorded as a liability on our condensed consolidated balance sheets within accounts payable, accrued expenses and other liabilities. Specific CECL Allowance For collateral-dependent loans where we have deemed the borrower/sponsor to be experiencing financial difficulty and a more than moderate/average risk of realizing a principal loss, we have elected to apply a practical expedient in accordance with the CECL Standard in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance. The Specific CECL Allowance is determined as the difference between the fair value of the underlying collateral and the carrying value of the loan (prior to the Specific CECL Allowance). When the repayment or satisfaction of a loan is dependent on a sale, rather than operations, of the collateral, the fair value is adjusted for the estimated cost to sell the collateral. Collateral-dependent loans evaluated for a Specific CECL Allowance are removed from the General CECL Allowance pool. The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. The key unobservable inputs used to determine the fair value of the underlying collateral may vary depending on the information available to us and market conditions as of the valuation date. We regularly evaluate the extent and impact of any credit migration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis. The Specific CECL Allowance is evaluated on a quarterly basis. Specifically, a property's operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the liquidation value of the underlying collateral. We also evaluate the financial wherewithal of any loan guarantors as well as the borrower's competency in managing and operating the properties. In addition, we consider the overall economic environment, real estate sector and geographic sub-market in which the borrower operates. Such impairment analysis is completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as debt service coverage ratio, property occupancy, tenant profile, rental rates, operating expenses, the borrower's exit plan, and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. The following table summarizes our risk rated 5 loans as of September 30, 2025, which were analyzed for Specific CECL Allowances ($ in thousands):
Type | Property type |  | Location |  | Amortized cost prior to Specific CECL Allowance |  |  | Specific CECL Allowance |  |  | Amortized cost |  |  | Interest recognition status/ as of date |  | Risk Rating
Mortgage | Retail(1)(2) |  | Cincinnati, OH |  | $ | 163,169 |  |  | $ | 67,000 |  |  | $ | 96,169 |  |  | Nonaccrual/ 10/1/2019 |  | 5
Mezzanine | Residential(3) |  | Manhattan, NY |  |  | 295,881 |  |  |  | 268,000 |  |  |  | 27,881 |  |  | Nonaccrual/ 7/1/2021 |  | 5
Total |  |  |  | $ | 459,050 |  |  | $ | 335,000 |  |  | $ | 124,050 |  |  |  |  |
(1) The fair value of retail collateral was determined by applying a capitalization rate of 9.0%. (2) In September 2018, we entered a joint venture with Turner Consulting II, LLC ("Turner Consulting"), through an entity which owns the underlying property that secures our loan. Turner Consulting contributed 10% of the venture's equity and we contributed 90%. The entity was deemed to be a variable interest entity ("VIE"), and we determined that we are not the primary beneficiary of that VIE as we do not have the power to direct the entity's activ ities. During the second quarter of 2024, the loan's maturity was extended from September 2024 to September 2025. (3) The fair valu e of the residential collateral was determined by making certain projections and assumptions with respect to future performance and a discount rate of 10%. Any future change to the Specific CECL Allowance will be based upon a number of factors, including but not limited to the continued assessment of both the potential nominal value of remaining inventory as well as the expected sales velocity. Michigan Office During the three months ended June 30, 2024, we recorded a Specific CECL Allowance of $7.5 million on a subordinate loan secured by a pledge of the equity interest in the entity that owns a Class A office building in Troy, MI (the "Michigan Office Loan"), representing a full reserve against the loan’s amortized cost basis. During the three months ended September 30, 2025, we reached a discounted payoff agreement with the borrower and received proceeds of $1.3 million. We recorded a $6.2 million realized loss on investments on our condensed consolidated statement of operations for the three and nine months ended September 30, 2025. Loan Modifications Pursuant to ASC 326 During the twelve months ended September 30, 2025, we provided the following loan modifications that require disclosure pursuant to ASC 326. During the three months ended September 30, 2025, we modified our commercial mortgage loan secured by an office property in London, UK. The loan’s final maturity date was extended from August 2025 to March 2028. In conjunction with the borrower injecting additional equity in the underlying property, we upsized the total commitment of the loan by $77.4 million to finance future leasing costs, as necessary. Additionally, the loan’s terms were modified to include a PIK interest component on the upsize accruing at a fixed rate of 10.0% for interest not received in cash. The loan is performing pursuant to its modified contractual terms, and the loan’s risk rating remains a 3 as of September 30, 2025 During the three months ended June 30, 2025, we modified our commercial mortgage loan secured by an office property in Berlin, Germany. The loan’s final maturity date was extended from August 2026 to June 2030 allowing for a component of interest to be paid in-kind. The loan is performing pursuant to its modified contractual terms, and the loan’s risk rating was upgraded from a 4 to a 3. As of September 30, 2025 and December 31, 2024, the aggregate amortized cost basis of these modified receivables was $438.9 million and $378.3 million, respectively, or 5.3% of our aggregate commercial mortgage loans and subordinate loans by amortized cost. Unfunded commitments related to these loans as of September 30, 2025 and December 31, 2024 were $104.0 million and $5.1 million, respectively. Nonaccrual and Past Due Loans We cease accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. The amortized cost basis, net of Specific CECL Allowance, for loans on nonaccrual was $375.0 million and $486.8 million as of September 30, 2025 and December 31, 2024, respectively. Under certain circumstances, we may apply the cost recovery method under which interest collected on a loan reduces the loan's amortized cost. We received $0.2 million and $1.2 million in interest that reduced amortized cost under the cost recovery method during the three and nine months ended September 30, 2025, respectively, and $7.0 million and $8.3 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025 and December 31, 2024, the amortized cost basis, net of Specific CECL Allowance, for loans that are past due 90 days or more as to principal or interest, was $375.0 million and $486.8 million, respectively. As of September 30, 2025 and December 31, 2024, there were no loans with accrued interest between 30 and 89 days past due. Manhattan Residential — 111 West 57 th Street During the three months ended June 30, 2025, the third-party mortgage, which was senior to our mezzanine positions secured by an ultra-luxury residential property in Manhattan, NY, was repaid in full. Accordingly, our Senior Mezzanine A Loan and a portion of our Senior Mezzanine Loan were restructured into a mortgage loan (the "Senior Loan") as we are now the sole lender in the capital structure. The Senior Loan remains on nonaccrual status subsequent to the restructuring. Pre-payment penalties, accelerated fees, and Paid-In-Kind ("PIK") interest We recognized $1.4 million and $1.9 million in pre-payment penalties and accelerated fees for the three and nine months ended September 30, 2025, respectively, and $4.2 million and $5.1 million for the three and nine months ended September 30, 2024, respectively. We recognized PIK interest of $5.1 million and $5.5 million for the three and nine months ended September 30, 2025. There was no recognized PIK interest during the three and nine months ended September 30, 2024. Loan Sales From time to time, we may enter into sale transactions with other parties. All sale transactions are evaluated in accordance with ASC Topic 860, "Transfers and Servicing" ("ASC 860"). In February 2025, we originated a $114.0 million commercial mortgage loan secured by a multifamily property located in Miami, FL, which included a $24.0 million contiguous subordinate loan. In March 2025, we sold our interest in the $24.0 million subordinate loan. We evaluated the transaction under ASC 860 and determined the sale met the criteria for sale accounting. We recorded no gain or loss related to this transaction. During the three months ended June 30, 2024, we sold a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI. The loan was previously classified as held for sale and was sold at a price of 99.5%. Upon selling the commercial mortgage loan, we reversed the previously recorded valuation allowance and recorded a realized loss of $0.7 million included within realized loss on investments on our condensed consolidated statement of operations for the three and six months ended June 30, 2024.

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- Definition The entire disclosure for investment in mortgage loan on real estate by entity with substantial portion of business acquiring and holding investment real estate or interest in real estate. Includes, but is not limited to, information for each mortgage loan receivable equaling or exceeding 3 percent of carrying amount of mortgage. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-X (SX) -Number 210 -Section 12 -Subsection 29 -Paragraph Column G -Footnote 8 -Publisher SEC Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-X (SX) -Number 210 -Section 12 -Subsection 29 -Paragraph Column G -Footnote 6 -Publisher SEC Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-X (SX) -Number 210 -Section 12 -Subsection 29 -Publisher SEC Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 310 -Name Accounting Standards Codification -Section S50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147478322/948-310-S50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 310 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-29(Column G)(Footnote 6)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479628/948-310-S99-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 310 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-29(Column G)(Footnote 8)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479628/948-310-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 948 -SubTopic 310 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-29) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479628/948-310-S99-1 + Details
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