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Loans Held for Investment
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Loans Held for Investment Loans Held for Investment, net
We originate first mortgage loans secured by middle market and transitional CRE, which are generally to be held as long term investments.
The table below provides overall statistics for our loan portfolio as of December 31, 2024 and 2023:
As of December 31,
20242023
Number of loans2124
Total loan commitments$641,213$670,293
Unfunded loan commitments (1)
$30,402$40,401
Principal balance
$610,811$629,892
Carrying value$601,842$622,086
Weighted average coupon rate8.24 %9.19 %
Weighted average all in yield (2)
8.62 %9.64 %
Weighted average floor2.12 %1.36 %
Weighted average maximum maturity (years) (3)
2.63.0
Weighted average risk rating3.13.0
(1)Unfunded loan commitments are primarily used to finance property improvements and leasing capital and are generally funded over the term of the loan.
(2)All in yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion.
(3)Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions.
The table below represents our loan activities during 2023 and 2024:
Principal BalanceDeferred Fees and Other Items
Amortized Cost
Balance at December 31, 2022
$678,555 $(8,626)$669,929 
Additional funding5,650 (14)5,636 
Originations133,300 (1,621)131,679 
Repayments(171,748)(535)(172,283)
Transfer to real estate owned(15,865)(95)(15,960)
Net amortization of deferred fees— 3,333 3,333 
Purchase discount accretion— 4,128 4,128 
Balance at December 31, 2023
629,892 (3,430)626,462 
Additional funding12,492 (158)12,334 
Originations133,817 (1,757)132,060 
Repayments(165,390)(594)(165,984)
Net amortization of deferred fees— 2,697 2,697 
Purchase discount accretion
— 2,347 2,347 
Balance at December 31, 2024
$610,811 $(895)$609,916 
The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of December 31, 2024 and 2023:
As of December 31,
20242023
Property Type
Number of Loans
Amortized Cost
Percentage of Value
Number of Loans
Amortized Cost
Percentage of Value
Office6$167,749 28 %7$181,268 29 %
Multifamily5163,987 27 %7207,734 33 %
Industrial5136,646 22 %5118,707 19 %
Hotel384,028 14 %245,791 7 %
Retail257,506 9 %372,962 12 %
21$609,916 100 %24$626,462 100 %
As of December 31,
20242023
Geographic Location
Number of Loans
Amortized Cost
Percentage of ValueNumber of Loans
Amortized Cost
Percentage of Value
South7$192,108 32 %8$222,477 36 %
West6142,560 23 %9185,294 30 %
East4139,899 23 %389,815 14 %
Midwest4135,349 22 %4128,876 20 %
21$609,916 100 %24$626,462 100 %
Credit Quality Information and Allowance for Credit Losses
We evaluate the credit quality of each of our loans at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The higher the number, the greater the risk level.
As of December 31, 2024 and 2023, the amortized cost of our loan portfolio within each internal risk rating by year of origination was as follows:
December 31, 2024
Risk RatingNumber of LoansPercentage of Portfolio2024202320222021PriorTotal
1—— %$— $— $— $— $— $— 
2418 %41,570 53,070 — 15,252 — 109,892 
31258 %91,515 25,086 163,228 76,034 — 355,863 
4524 %— — — 114,556 29,605 144,161 
5—— %— — — — — — 
21100 %$133,085 $78,156 $163,228 $205,842 $29,605 $609,916 
December 31, 2023
Risk RatingNumber of LoansPercentage of Portfolio202320222021PriorTotal
1—— %$— $— $— $— $— 
2315 %37,323 42,089 15,435 — 94,847 
31871 %94,881 167,491 144,456 38,548 445,376 
4314 %— — 86,239 — 86,239 
5—— %— — — — — 
24100 %$132,204 $209,580 $246,130 $38,548 $626,462 
The tables below present the changes to the allowance for credit losses during the years ended December 31, 2024 and 2023:
Loans Held for Investment, netUnfunded Loan CommitmentsTotal
Balance at December 31, 2023$4,376 $1,452 $5,828 
Provision for credit losses3,698 (618)3,080 
Balance at December 31, 2024$8,074 $834 $8,908 
Loans Held for Investment, netUnfunded Loan CommitmentsTotal
Balance at December 31, 2022$— $— $— 
Cumulative-effect adjustment upon adoption of the CECL model4,893 1,702 6,595 
Reversal of credit losses(549)(250)(799)
Write offs (1)
(708)— (708)
Recoveries740 — 740 
Balance at December 31, 2023$4,376 $1,452 $5,828 
(1)Write offs for the year ended December 31, 2023 relate to our loan secured by an office property located in Yardley, PA that was originated in 2019. We assumed legal title to the property through a deed in lieu of foreclosure in June 2023.
The increase in the allowance for credit losses during the year ended December 31, 2024 is primarily attributable to declining values for CRE and unfavorable CRE pricing forecasts used in our CECL model and increased provisions for our office loans.
We may enter into loan modifications that include among other changes, extensions of maturity dates, repurposing or required replenishment of reserves, increases or decreases in loan commitments and required pay downs of principal amounts outstanding. Loan modifications are evaluated to determine whether a modification results in a new loan or a continuation of an existing loan under ASC 310.
In August 2024, we amended the agreement governing our loan secured by an office property in Dallas, TX. As part of this amendment, the loan commitment was reduced by $3,189, the borrower was required to contribute $2,900 to cash reserves and the maturity date was extended by two years to August 25, 2026. As of December 31, 2024, this loan had an amortized cost of $43,511 and a risk rating of 4.
In August 2024, we amended the agreement governing our loan secured by an office property in Plano, TX. As part of this amendment, the coupon rate was reduced from SOFR + 4.75% to SOFR + 3.75% and the maturity date was extended by two years to July 1, 2026. As of December 31, 2024, this loan had an amortized cost of $26,635 and a risk rating of 4.
In November 2024, we amended the agreement governing our loan secured by an office property in Carlsbad, CA. As part of this amendment, the borrower was required to contribute $1,100 to cash reserves and the maturity date was extended by two years to October 27, 2026. As of December 31, 2024, this loan had an amortized cost of $24,412 and a risk rating of 4.
In November 2024, we amended the agreement governing our loan secured by an office property in Bellevue, WA. As part of this amendment, the maturity date was extended by 90 days to February 5, 2025. Subsequently, in January 2025, the maturity date was extended by 60 days to April 7, 2025. As of December 31, 2024, this loan had an amortized cost of $19,997 and a risk rating of 4.
There were no other modifications to our loan portfolio for borrowers experiencing financial difficulties during the year ended December 31, 2024.
We did not have any outstanding past due loans or nonaccrual loans as of December 31, 2024 or 2023. As of December 31, 2024 and February 13, 2025, our borrowers with outstanding loans had paid their debt service obligations owed and due to us.