The Company uses SPEs to facilitate transactions that involve securitizing financial assets or re-securitizing previously securitized financial assets. The objective of such transactions may include obtaining non-recourse financing, obtaining liquidity or refinancing the underlying securitized financial assets on improved terms. Securitization involves transferring assets to an SPE to convert all or a portion of those assets into cash before they would have been realized in the normal course of business through the SPE’s issuance of debt or equity instruments. Investors in an SPE usually have recourse only to the assets in the SPE and depending on the overall structure of the transaction, may benefit from various forms of credit enhancement, such as over-collateralization in the form of excess assets in the SPE, priority with respect to receipt of cash flows relative to holders of other debt or equity instruments issued by the SPE, or a line of credit or other form of liquidity agreement that is designed with the objective of ensuring that investors receive principal and/or interest cash flow on the investment in accordance with the terms of their investment agreement.

The Company has entered into financing transactions, including residential loan securitizations and re-securitizations, which required the Company to analyze and determine whether the SPEs that were created to facilitate the transactions are VIEs in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation.

During the year ended December 31, 2024, the Company completed a re-securitization of its investment in certain subordinated securities issued by Consolidated SLST (see below) for which the Company received net proceeds of approximately $73.0 million after deducting expenses associated with the securitization transaction. The Company refers to this securitization as a non-Agency RMBS re-securitization. The Company engaged in the re-securitization transaction primarily for the purpose of obtaining non-recourse, longer-term financing on a portion of its investment in Consolidated SLST. The Company remains economically exposed to the subordinated positions in the portion of Consolidated SLST transferred to the securitization and continues to consolidate Consolidated SLST.

During the year ended December 31, 2024, the Company completed five securitizations of certain residential loans for which the Company received net proceeds of approximately $1.3 billion after deducting expenses associated with the securitization transactions. The Company engaged in these transactions for the purpose of obtaining non-recourse, longer-term financing on a portion of its residential loan portfolio. The residential loans serving as collateral for the financings are comprised of performing, re-performing and non-performing and business purpose loans which are included in residential loans, at fair value on the accompanying consolidated balance sheets.

During the year ended December 31, 2024, the Company exercised its right to an optional redemption of two of its residential loan securitizations with an outstanding principal balance of $193.3 million at the time of redemption, returned the assets held by the trust to the Company and recognized $0.7 million of loss on the extinguishment of collateralized debt obligations, which is included in other income (loss) in the accompany consolidated statements of operations.

As of December 31, 2024, the Company evaluated its residential loan securitizations and its non-Agency RMBS re-securitization and concluded that the entities created to facilitate each of the financing transactions are VIEs and that the Company is the primary beneficiary of these VIEs (each a “Financing VIE” and collectively, the “Financing VIEs”). As of December 31, 2023, the Company evaluated its residential loan securitizations and concluded that the entities created to facilitate each of the financing transactions are VIEs and that the Company is the primary beneficiary of these VIEs. Accordingly, the Company consolidated the then-outstanding Financing VIEs as of December 31, 2024 and 2023, respectively.

The Company invests in subordinated securities that represent the first loss position of the Freddie Mac-sponsored residential loan securitizations from which they were issued and certain IOs issued from the securitizations. The Company has evaluated its investments in these securitization trusts to determine whether they are VIEs and if so, whether the Company is the primary beneficiary requiring consolidation. The Company has determined that the Freddie Mac-sponsored residential loan securitization trusts, which we collectively refer to as Consolidated SLST, are VIEs and that the Company is the primary beneficiary of the VIEs within Consolidated SLST. Accordingly, the Company consolidates the assets, liabilities, income and expenses of such VIEs in the accompanying consolidated financial statements (see Notes 2, 3 and 14). The Company has elected the fair value option on the assets and liabilities held within Consolidated SLST, which requires that changes in valuations in the assets and liabilities of Consolidated SLST be reflected in the Company’s consolidated statements of operations. Consolidated SLST is comprised of two securitization trusts and one securitization trust as of December 31, 2024 and 2023, respectively.

During the year ended December 31, 2024, the Company invested in a subordinated security issued by a Freddie Mac-sponsored residential loan securitization, resulting in the initial consolidation of the VIE as shown below (dollar amounts in thousands):

As of December 31, 2024 and 2023, the Consolidated SLST securities owned by the Company had a fair value of $148.5 million and $157.2 million, respectively (see Note 17). During the year ended December 31, 2024, the Company completed a re-securitization of its investment in certain subordinated securities issued by Consolidated SLST. The Company’s investments in Consolidated SLST were not included as collateral to any Financing VIE as of December 31, 2023.

The Company owns joint venture equity investments in entities that own multi-family apartment communities, which the Company determined to be VIEs and for which the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities, income and expenses of these VIEs in the accompanying consolidated financial statements with non-controlling interests or redeemable non-controlling interests for the third-party ownership of the joint ventures' membership interests.

During the year ended December 31, 2023, the Company reconsidered its evaluation of its variable interest in a VIE that owned a multi-family apartment community and in which the Company held a preferred equity investment. The Company determined that it gained the power to direct the activities, and became primary beneficiary, of the VIE and consolidated this VIE into its consolidated financial statements.

The Company accounted for the initial consolidation of the Consolidated Real Estate VIEs in accordance with asset acquisition provisions of ASC 805, as substantially all of the fair value of the assets within the entities are concentrated in either a single identifiable asset or group of similar identifiable assets.

The following table summarizes the aggregate estimated fair value of the assets, liabilities and non-controlling interests associated with the initial consolidation of Consolidated Real Estate VIEs and real estate acquisitions by a Consolidated Real Estate VIE during the years ended December 31, 2023 and 2022, respectively. There were no initial consolidation of Consolidated Real Estate VIEs or real estate acquisitions by a Consolidated VIE during the year ended December 31, 2024 (dollar amounts in thousands):


	Years Ended December 31,
		2023		2022
Cash (1)		$	102	$	8,576
Operating real estate (1) (2)		54,439		730,988
Lease intangibles (1) (3)		2,378		41,892
Other assets (1)		4,722		8,258
Total assets		61,641		789,714

Mortgages payable on real estate, net (1)		45,142		570,682
Other liabilities (1)		2,403		4,662
Total liabilities		47,545		575,344


Non-controlling interests (4)		3,790		16,293
Net assets consolidated		$	10,306	$	198,077

(1)In September 2022, the Company announced a repositioning of its business through the opportunistic disposition over time of the Company's joint venture equity investments in multi-family properties and reallocation of its capital away from such assets to its targeted assets. Accordingly, the assets and liabilities related to certain joint venture equity investments in multi-family properties is included in assets and liabilities of disposal group held for sale on the accompanying consolidated balance sheets as of December 31, 2024 and 2023. See Note 9 for additional information.

In analyzing whether the Company is the primary beneficiary of the Financing VIEs, Consolidated SLST and Consolidated Real Estate VIEs, the Company considered its involvement in each of the VIEs, including the design and purpose of each VIE, and whether its involvement reflected a controlling financial interest that resulted in the Company being deemed the primary beneficiary of the VIEs. In determining whether the Company would be considered the primary beneficiary, the following factors were assessed:

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company’s securitizations, Consolidated SLST and Consolidated Real Estate VIEs of as of December 31, 2024 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation:


			Other VIEs
	Financing VIEs		Consolidated SLST	Consolidated Real Estate		Total
Cash and cash equivalents	$	—		$	—	$	4,151	$	4,151
Residential loans, at fair value	2,243,800			965,672		—		3,209,472
Real estate, net held in Consolidated VIEs (1)	—			—		481,161		481,161
Assets of disposal group held for sale (2)	—			—		118,613		118,613
Other assets	154,426			4,065		16,696		175,187
Total assets	$	2,398,226		$	969,737	$	620,621	$	3,988,584

Collateralized debt obligations ($2,135,680 at fair value, and $842,764 at amortized cost, net)	$	2,166,853		$	811,591	$	—	$	2,978,444


Mortgages payable on real estate, net in Consolidated VIEs (3)	—			—		366,606		366,606
Liabilities of disposal group held for sale (2)	—			—		97,065		97,065
Other liabilities	16,162			8,313		10,621		35,096
Total liabilities	$	2,183,015		$	819,904	$	474,292	$	3,477,211
Redeemable non-controlling interest in Consolidated VIEs (4)	$	—		$	—	$	12,359	$	12,359
Non-controlling interest in Consolidated VIEs (5)	$	—		$	—	$	3,930	$	3,930
Net investment (6)	$	215,211		$	149,833	$	130,040	$	495,084

(6)The net investment amount is the maximum amount of the Company's investment that is at risk to loss and represents the difference between the carrying value of total assets and total liabilities held by VIEs, less non-controlling interests, if any.

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company's securitizations, Consolidated SLST and Consolidated Real Estate VIEs as of December 31, 2023 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation:


			Other VIEs
	Financing VIEs		Consolidated SLST		Consolidated Real Estate		Total
Cash and cash equivalents	$	—	$	—	$	15,612	$	15,612
Residential loans, at fair value	1,501,908		754,860		—		2,256,768
Real estate, net held in Consolidated VIEs (1)	—		—		979,934		979,934
Assets of disposal group held for sale (2)	—		—		426,017		426,017
Other assets	98,451		2,960		37,035		138,446
Total assets	$	1,600,359	$	757,820	$	1,458,598	$	3,816,777

Collateralized debt obligations ($593,737 at fair value, and $1,276,780 at amortized cost, net)	$	1,276,780	$	593,737	$	—	$	1,870,517
Mortgages payable on real estate, net in Consolidated VIEs (3)	—		—		784,421		784,421
Liabilities of disposal group held for sale (2)	—		—		386,024		386,024
Other liabilities	8,421		5,638		21,797		35,856
Total liabilities	$	1,285,201	$	599,375	$	1,192,242	$	3,076,818
Redeemable non-controlling interest in Consolidated VIEs (4)	$	—	$	—	$	28,061	$	28,061
Non-controlling interest in Consolidated VIEs (5)	$	—	$	—	$	20,328	$	20,328
Net investment (6)	$	315,158	$	158,445	$	217,967	$	691,570

The following tables present condensed statements of operations for non-Company-sponsored VIEs for the years ended December 31, 2024, 2023 and 2022, respectively (dollar amounts in thousands). The following tables include net (loss) income from assets and liabilities of disposal group held for sale and intercompany balances have been eliminated for purposes of this presentation.


	Year Ended December 31,
	2024
	Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	39,194	$	—	$	39,194
Interest expense	26,491		—		26,491
Total net interest income	12,703		—		12,703

Income from real estate	—		121,463		121,463
Expenses related to real estate	—		163,762		163,762
Total net loss from real estate	—		(42,299)		(42,299)

Unrealized gains, net	2,902		—		2,902
Gains on derivative instruments, net	—		2,788		2,788
Impairment of real estate	—		(43,959)		(43,959)
Loss on reclassification of disposal group	—		(14,636)		(14,636)
Other income	—		26,031		26,031
Total other income (loss)	2,902		(29,776)		(26,874)

Net income (loss)	15,605		(72,075)		(56,470)
Net loss attributable to non-controlling interest in Consolidated VIEs	—		31,924		31,924
Net income (loss) attributable to Company	$	15,605	$	(40,151)	$	(24,546)


	Year Ended December 31,
	2023
	Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	34,061	$	—	$	34,061
Interest expense	24,506		—		24,506
Total net interest income	9,555		—		9,555

Income from real estate	—		160,407		160,407
Expenses related to real estate	—		192,018		192,018
Total net loss from real estate	—		(31,611)		(31,611)

Unrealized losses, net	(10,016)		—		(10,016)
Gains on derivative instruments, net	—		4,837		4,837
Impairment of real estate	—		(89,548)		(89,548)
Loss on reclassification of disposal group	—		(16,163)		(16,163)
Other income	—		2,728		2,728
Total other loss	(10,016)		(98,146)		(108,162)

Net loss	(461)		(129,757)		(130,218)
Net loss attributable to non-controlling interest in Consolidated VIEs	—		29,134		29,134
Net loss attributable to Company	$	(461)	$	(100,623)	$	(101,084)


	Year Ended December 31,
	2022
	Consolidated SLST		Consolidated Real Estate		Total
Interest income	$	36,448	$	—	$	36,448
Interest expense	25,145		—		25,145
Total net interest income	11,303		—		11,303

Income from real estate	—		134,722		134,722
Expenses related to real estate	—		245,650		245,650
Total net loss from real estate	—		(110,928)		(110,928)

Unrealized losses, net	(32,403)		—		(32,403)
Gains on derivative instruments, net	—		27,230		27,230
Impairment of real estate	—		(2,449)		(2,449)
Other income	—		16,308		16,308
Total other (loss) income	(32,403)		41,089		8,686

Net loss	(21,100)		(69,839)		(90,939)
Net loss attributable to non-controlling interest in Consolidated VIEs	—		42,044		42,044
Net loss attributable to Company	$	(21,100)	$	(27,795)	$	(48,895)

The third-party owners of certain of the non-controlling interests in Consolidated VIEs have the ability to sell their ownership interests to the Company, at their election. The Company has classified these third-party ownership interests as redeemable non-controlling interest in Consolidated VIEs in mezzanine equity on the accompanying consolidated balance sheets. The holders of the redeemable non-controlling interests may elect to sell their ownership interests to the Company at fair value once a year and the sales are subject to annual minimum and maximum amount limitations. During the year ended December 31, 2024, the maximum redeemable amount of non-controlling ownership interest was $6.8 million, of which non-controlling interest holders elected to sell $0.6 million to the Company.


	Years Ended December 31,
	2024		2023		2022
Beginning balance	$	28,061	$	63,803	$	66,392

Contributions	46		6		462
Distributions	(8,809)		(4,021)		(7,083)
Net loss attributable to redeemable non-controlling interest in Consolidated VIEs	(16,926)		(17,067)		(38,190)
Adjustment of redeemable non-controlling interest to estimated redemption value (1)	10,613		(14,175)		44,237
Redemption of redeemable non-controlling interest	(626)		(485)		(2,015)
Ending balance	$	12,359	$	28,061	$	63,803

(1)The Company determines the fair value of the redeemable non-controlling interest utilizing market assumptions and discounted cash flows. The Company applies a discount rate to the estimated future cash flows from the multi-family apartment properties held by the applicable Consolidated VIEs that are allocatable to the redeemable non-controlling interest. This fair value measurement is generally based on unobservable inputs and, as such, is classified as Level 3 in the fair value hierarchy. Significant unobservable inputs utilized in the estimation of fair value of redeemable non-controlling interest as of December 31, 2024 include a weighted average capitalization rate of 5.6% (ranges from 5.0% to 6.3%) and a weighted average discount rate of 14.8% (ranges from 13.9% to 15.6%).

As of December 31, 2024 and 2023, the Company evaluated its investment securities available for sale and preferred equity, equity and other investments to determine whether they are VIEs and should be consolidated by the Company. Based on a number of factors, the Company determined that, as of December 31, 2024 and 2023, it does not have a controlling financial interest and is not the primary beneficiary of these VIEs. The following tables present the classification and carrying value of unconsolidated VIEs as of December 31, 2024 and 2023, respectively (dollar amounts in thousands):


	December 31, 2024
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Other assets		Total
Non-Agency RMBS	$	—	$	22,892	$	—	$	—	$	22,892
Preferred equity investments in multi-family properties	86,192		—		73,436		—		159,628
Joint venture equity investments in multi-family properties	—		—		1,338		—		1,338
Other investments	—		—		—		2,000		2,000
Maximum exposure	$	86,192	$	22,892	$	74,774	$	2,000	$	185,858


	December 31, 2023
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Total
Non-Agency RMBS	$	—	$	24,462	$	—	$	24,462
Preferred equity investments in multi-family properties	95,792		—		104,242		200,034
Joint venture equity investments in multi-family properties	—		—		5,720		5,720
Maximum exposure	$	95,792	$	24,462	$	109,962	$	230,216