Variable Interest Entities

9 Months Ended

Sep. 30, 2024

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

VARIABLE INTEREST ENTITIES

We have financed a portion of our loans through the CLOs, all of which are VIEs. We are the primary beneficiary of, and therefore consolidate, the CLOs on our balance sheet as we (i) control the relevant interests of the CLOs that give us power to direct the activities that most significantly affect the CLOs, and (ii) have the right to receive benefits and obligation to absorb losses of the CLOs through the subordinate interests we own.

During the third quarter of 2024, we modified a loan collateralized by an office property in Burlington, MA that included, among other changes, a two-year extension of the maturity date and the ability to receive collateral sales proceeds in excess of our outstanding principal balance. As a result of the modification, our investment in the loan is a VIE. As of September 30, 2024, we are the primary beneficiary of, and therefore consolidated the assets of the VIE on our balance sheet as we (i) have the power to direct the activities that most significantly affect the property, and (ii) have the right to receive excess sale proceeds upon exit.

The following table details the assets and liabilities of our consolidated VIEs ($ in thousands):


	September 30, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	2,014	$	—
Loans receivable	2,892,807		3,061,278
Current expected credit loss reserve	(261,536)		(183,508)
Loans receivable, net	2,631,271		2,877,770
Real estate owned, net	46,638		—
Other assets	28,583		103,692
Total assets	$	2,708,506	$	2,981,462
Liabilities
Securitized debt obligations, net	$	2,248,307	$	2,505,417
Other liabilities	5,774		8,101
Total liabilities	$	2,254,081	$	2,513,518

Assets held by these VIEs are restricted and can be used only to settle obligations of the VIEs, including the subordinate interests owned by us. The liabilities of these VIEs are non-recourse to us and can only be satisfied from the assets of the VIEs. The consolidation of these VIEs results in an increase in our gross assets, liabilities, revenues and expenses, however it does not affect our stockholders’ equity or net income. We are not obligated to provide, have not provided, and do not intend to provide material financial support to these consolidated VIEs.