Real Estate, net

3 Months Ended

Mar. 31, 2026

The following table presents the Company’s net lease portfolio, net, as of March 31, 2026 and December 31, 2025 (dollars in thousands):


	March 31, 2026		December 31, 2025
Land and improvements	$	78,805	$	78,805
Buildings, building leaseholds, and improvements	287,767		287,767
Tenant improvements	13,781		13,781

Subtotal	$	380,353	$	380,353
Less: Accumulated depreciation	(89,446)		(86,871)

Net lease portfolio, net	$	290,907	$	293,482

The following table presents the Company’s portfolio of other real estate, net as of March 31, 2026 and December 31, 2025 (dollars in thousands):


	March 31, 2026		December 31, 2025
Land and improvements	$	133,704	$	127,614
Buildings, building leaseholds, and improvements	269,933		262,451
Tenant improvements	19,602		18,097
Furniture, fixtures and equipment	15,524		13,938
Construction-in-progress	7,139		7,972
Subtotal	$	445,902	$	430,072
Less: Accumulated depreciation	(45,848)		(43,775)

Other portfolio, net	$	400,054	$	386,297

Depreciation Expense

Depreciation expense on real estate was $6.0 million and $7.1 million for the three months ended March 31, 2026 and 2025, respectively.

Property Operating Income

For the three months ended March 31, 2026 and 2025 the components of property operating income were as follows (dollars in thousands):


	Three Months Ended March 31,
	2026		2025
Lease revenues
Minimum lease revenue	$	17,405	$	23,870
Variable lease revenue	865		3,047
	$	18,270	$	26,917
Hotel operating income	14,373		—
Total property operating income(1)	$	32,643	$	26,917

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(1)Excludes net amortization income related to above and below-market leases of a de minimis amount for the three months ended March 31, 2026. Excludes net amortization expense related to above and below-market leases of $0.4 million and income of $0.3 million for the three months ended March 31, 2025, respectively.

For the three months ended March 31, 2026, the Company had one property with property operating income equal to or greater than 10% of the Company’s total revenue. The property had property operating income of $14.4 million or 17% of the Company’s total revenue. For the three months ended March 31, 2025 the Company had no single property with property operating income equal to or greater than 10% of total revenue of the Company.

Real Estate Acquisitions

During the three months ended March 31, 2026, the Company acquired legal title to one multifamily property through foreclosure, which is included in real estate, net on the Company’s consolidated balance sheets.

During the year ended December 31, 2025, the Company acquired legal title to one multifamily construction/development project and one office property through deeds-in-lieu of foreclosure, and one hotel property via foreclosure, all of which are included in real estate, net on the Company’s consolidated balance sheets. The office property was subsequently sold. See “Real Estate Sales” below for further detail on the gain on sale.

The Company previously held an investment in a senior loan collateralized by a multifamily property in Mesa, Arizona that was determined to be a VIE. The Company was determined to be the primary beneficiary of the VIE and consolidated the assets and liabilities as well as the operations of the multifamily property in February 2025. The multifamily property is included in real estate, net on the Company’s consolidated balance sheets. The consolidation did not result in a gain or loss.

In accordance with ASC 805-50, the Company allocated the fair value of the assumed assets and liabilities on the respective acquisition dates for each property acquired.

The following table summarizes the Company’s real estate acquisitions for the three months ended March 31, 2026 and year ended December 31, 2025 (dollars in thousands):


					Purchase Price Allocation
Acquisition Date	Property Type and Location	Number of Buildings/Units(1)	Purchase Price		Land and Improvements(2)		Building and Improvements(2)		Furniture and Fixtures(2)		Lease Intangible Assets(2)		Other Assets		Lease Intangible Liabilities(2)		Other Liabilities
Three Months Ended March 31, 2026
January 2026	Multifamily - Texas(3)	624	$	45,400	$	13,486	$	25,944	$	1,235	$	4,126	$	2,876	$	—	$	(2,267)


Year Ended December 31, 2025
September 2025	Office - Oregon(3)	8	21,100		10,913		5,105		—		4,567		1,849		(298)		(1,036)
July 2025	Multifamily/Pre-dev - California(3)(4)	n/a	39,760		39,760		—		—		—		—		—		—
May 2025	Hotel - California(3)	541	139,126		36,166		91,719		10,197		80		10,034		—		(9,070)
February 2025	Multifamily - Arizona(5)	285	31,965		9,007		21,051		270		1,456		708		—		(527)









			$	277,351	$	109,332	$	143,819	$	11,702	$	10,229	$	15,467	$	(298)	$	(12,900)

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(1) For multifamily properties, represents number of units. For hotels, it represents number of rooms.

(2) Useful life of real estate acquired is 28 to 40 years for buildings, four to 15 years for tenant improvements, four to nine for furniture and fixtures, and one to 12 years for lease intangibles.

(3) Represents assets acquired by the Company through foreclosure or a deed-in-lieu of foreclosure.

(4) Represents a multifamily construction/development project located in California.

(5) Represents a multifamily property held in a VIE for which the Company was deemed the primary beneficiary. The Company consolidated the assets, liabilities and the property's operations on the acquisition date in accordance with ASC 810.

Impairment

There was no impairment recorded during the three months ended March 31, 2026 and 2025, respectively.

Real Estate Sales

During three months ended March 31, 2026, the Company sold one office property for a total gross sales price of $28.0 million. The Company recorded a net gain on the sale of $0.1 million and it is included in other loss, net on the Company’s consolidated statement of operations.

During the year ended December 31, 2025, the Company sold three office properties and one multifamily property previously acquired through deeds-in-lieu of foreclosure for a total gross sales price of $85.6 million. Prior to the sale of one office property, the Company recorded an impairment loss of $6.3 million due to shortening the expected hold period. The impairment loss was based on the net proceeds received from the sale. This is included in impairment of operating real estate in the Company’s consolidated statement of operations. The net gain of $1.1 million on three office properties and one multifamily property is included in other gain (loss), net on the Company’s consolidated statement of operations.