Commitments and Contingencies

6 Months Ended

Jun. 30, 2026

Commitments and Contingencies Disclosure [Abstract]

(a) Lease Commitments

The Company’s primary lease commitment relates to its corporate headquarters. For the three months ended June 30, 2026 and 2025, the Company recorded an expense in connection with this lease of approximately $0.1 million and $1.3 million, respectively, and $1.1 million and $2.7 million for the six months ended June 30, 2026 and 2025, respectively. In February 2026, the Company entered into an agreement with the landlord for the former corporate headquarters to accelerate the contractual expiration of its lease with 30 days’ notice or by November 30, 2026. The Company did not pay any early termination fee in connection with this agreement and exited the space in June 2026. In connection with the lease modification and exit, the Company modified the right-of-use assets and lease obligations and recognized a gain of approximately $3.4 million for the three months ended March 31, 2026 and $0.5 million for the three months ended June 30, 2026. Further, the Company recognized accelerated depreciation expense related to the remaining undepreciated tenant improvements at the Company’s former corporate headquarters totaling approximately $2.4 million for the three months ended March 31, 2026 and $4.9 million for the three months ended June 30, 2026.

In February 2026, the Company entered into a ten-year lease agreement for new corporate headquarters office space located in New York City, with an expected lease commencement date in the fourth quarter of 2026, and expected future annual rental expense of approximately $1.8 million.

Additionally, in December 2024, Lima One executed a new office lease for its headquarters in Greenville, South Carolina. Lima One moved into the new office space on July 15, 2025. For the three and six months ended June 30, 2026, the Company recorded an expense in connection with this lease of approximately $0.6 million and $1.1 million, respectively. The original term specified in this lease is approximately nine years with a termination date of December 2033 and two options to renew for an additional four years for the first extension and an additional five years for the second extension.

The Company recognized total lease expense of $0.7 million and $2.8 million for the three months ended June 30, 2026 and 2025, respectively, and $2.3 million and $4.6 million for the six months ended June 30, 2026 and 2025, respectively, which is included in Other general and administrative expense on the Company’s consolidated statements of operations.

At June 30, 2026, the contractual minimum rental payments (exclusive of possible rent escalation charges and normal recurring charges for maintenance, insurance and taxes) for the Company’s lease commitments were as follows:


Year Ending December 31,	Minimum Rental Payments
(In Thousands)
2026 (1)	$	1,279
2027	2,676
2028	2,492
2029	2,474
2030	2,458
Thereafter	7,799
Total	$	19,178
Present Value Discount	(4,797)
Total Lease Liability (Note 7)	$	14,381

(1)Reflects contractual minimum rental payments due for the period from July 1, 2026 through December 31, 2026.

(b) Representations and Warranties in Connection with Loan Securitization and Other Loan Sale Transactions

In connection with the loan securitization and sale transactions entered into by the Company, the Company has the obligation under certain circumstances to repurchase assets previously transferred to securitization vehicles, or otherwise sold, upon breach of certain representations and warranties. As of June 30, 2026, the Company was not aware of any material unsettled repurchase claims that would require a reserve (see Note 14).

At June 30, 2026, the Company had unfunded commitments in connection with its Single-family and Multifamily transitional loans of $314.4 million and $15.6 million, respectively (see Note 3). These commitments are subject to certain conditions that the respective borrowers must meet before funding is required. In addition, from time to time, Lima One makes short-term commitments to originate mortgage loans; such commitments were not significant at June 30, 2026.

(d) Guarantee

In connection with one of its investments in a loan origination partner, as of June 30, 2026, the Company has guaranteed up to $51 million of such investee’s warehouse financing. As of June 30, 2026, the Company has not recorded a loss in connection with this guarantee.

(e) Litigation

The Company reserves for contingent liabilities when it is determined that a liability is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, the Company will not incur material costs.

The Company is not presently named as a defendant in any material litigation arising outside the ordinary course of business. However, the Company is from time to time involved in litigation arising in the course of its business activities. As of June 30, 2026, the Company has an aggregate litigation reserve totaling $1.1 million and estimates additional reasonably possible losses of up to $1.1 million.