REAL ESTATE OWNED

3 Months Ended

Mar. 31, 2026

On September 19, 2024, the Company acquired legal title to a multi-building office property located in North Carolina through a deed in lieu of foreclosure. Prior to September 19, 2024, the office property collateralized a $68.6 million senior mortgage loan held by the Company that was in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the May 2024 maturity date. In conjunction with the deed in lieu of foreclosure, the Company derecognized the $68.6 million senior mortgage loan and recognized the office property as real estate owned. As the Company did not expect to complete a sale of the office property within the next twelve months, the office property was considered held for investment, and was carried at its estimated fair value at acquisition and was presented net of accumulated depreciation or amortization and impairment charges. At acquisition, the Company recognized a realized loss of $5.8 million on the derecognition of the senior mortgage loan as the fair value of the office property at acquisition of $60.2 million and the net operating assets and liabilities held at the office property of $(201) thousand at acquisition was less than the $65.8 million Carrying Value of the senior mortgage loan. Certain operating assets and liabilities of the office property are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets and include items such as prepaid expenses, rent receivables, straight-line rent receivables and payables and trade payables. On December 30, 2025, the Company sold a building at the multi-building office property to a third party for $5.3 million.

During the three months ended March 31, 2026, the Company committed to a plan to sell the multi-building office property and the asset is being actively marketed for sale with such sale expected to qualify for recognition as a completed sale within one year. As such, as of March 31, 2026, the multi-building office property is classified as real estate owned held for sale in the Company’s consolidated balance sheets and the Company has ceased depreciating and amortizing the multi-building office property. Upon reclassification, the multi-building office property had a carrying amount of $53.1 million, which was lower than the estimated fair value less costs to sell. As such, the Company has continued to recognize the multi-building office property at its carrying amount in the Company’s consolidated balance sheets and no impairment loss related to the planned sale of the multi-building office property has been recognized in the Company’s consolidated statements of operations for the three months ended March 31, 2026.

On September 8, 2023, the Company acquired legal title to a mixed-use property located in Florida through a consensual foreclosure. Prior to September 8, 2023, the mixed-use property collateralized an $82.9 million senior mortgage loan held by the Company that was in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the February 2023 maturity date. In conjunction with the consensual foreclosure, the Company derecognized the $82.9 million senior mortgage loan and recognized the mixed-use property as real estate owned. As the Company does not expect to complete a sale of the mixed-use property within the next twelve months, the mixed-use property is considered held for investment, and is carried at its estimated fair value at acquisition and is presented net of accumulated depreciation or amortization and impairment charges. The Company did not recognize any gain or loss on the derecognition of the senior mortgage loan as the fair value of the mixed-use property of $84.3 million and the net operating assets and liabilities held at the mixed-use property of $(1.4) million at acquisition approximated the $82.9 million Carrying Value of the senior mortgage loan. Certain operating assets and liabilities of the mixed-use property are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets and include items such as prepaid expenses, rent receivables, straight-line rent receivables and payables and trade payables.

The following table summarizes the Company’s real estate owned held for investment as of March 31, 2026 and December 31, 2025 ($ in thousands):




	As of
	March 31, 2026		December 31, 2025
Land	$	21,337	$	34,245
Buildings and improvements	52,649		81,691
Lease intangibles	21,276		34,735
Above-market lease intangibles	547		4,490
Below-market lease intangibles	(11,084)		(11,105)
Total real estate owned held for investment	84,725		144,056
Less: Accumulated depreciation and amortization	(7,877)		(13,891)
Real estate owned held for investment, net	$	76,848	$	130,165

As of March 31, 2026 and December 31, 2025, no impairment charges have been recognized for real estate owned held for investment.

For the three months ended March 31, 2026 and 2025, the Company incurred net depreciation and amortization expense of $741 thousand and $2.2 million, respectively. With the exception of amortization related to intangible assets and liabilities for above-market or below-market leases, depreciation and amortization expense is included within expenses from real estate owned in the Company’s consolidated statements of operations. Amortization related to intangible assets and liabilities for above-market or below-market leases is recognized as an adjustment to rental revenue and is included within revenue from real estate owned in the Company’s consolidated statements of operations.

Intangible Lease Assets and Liabilities

For the three months ended March 31, 2026, there were no property acquisitions.

The following table summarizes the Company’s intangible lease assets and liabilities that are included within real estate owned held for investment as of March 31, 2026 and December 31, 2025 ($ in thousands):


	As of March 31, 2026						As of December 31, 2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Assets:
Lease intangibles	$	21,276	$	(5,798)	$	15,478	$	34,735	$	(9,772)	$	24,963
Above-market lease intangibles	547		(256)		291		4,490		(1,468)		3,022
Liabilities:
Below-market lease intangibles	(11,084)		2,567		(8,517)		(11,105)		2,398		(8,707)

The following table summarizes the amortization of intangible lease assets and liabilities related to real estate owned held for investment for the three months ended March 31, 2026 and 2025 ($ in thousands):


	Consolidated Statement of Operations Location	For the Three Months Ended March 31,
			2026		2025
Assets:
Lease intangibles	Expenses from real estate owned		$	482	$	1,527
Above-market lease intangibles	Revenue from real estate owned		(19)		(271)
Liabilities:
Below-market lease intangibles	Revenue from real estate owned		190		262

The following table summarizes the estimated net amortization schedule for the Company’s intangible lease assets and liabilities that are included within real estate owned held for investment as of March 31, 2026 ($ in thousands):


			Above-Market		Below-Market
	Lease Intangibles		Lease Intangibles		Lease Intangibles
Remainder of 2026	$	1,325	$	57	$	(428)
2027	1,701		51		(571)
2028	1,603		41		(542)
2029	1,596		41		(539)
2030	1,592		41		(539)
Thereafter	7,661		60		(5,898)
Total	$	15,478	$	291	$	(8,517)

Future Minimum Lease Payments

The following table summarizes the future minimum contractual lease payments to be collected by the Company under non-cancelable operating leases related to real estate owned held for investment, excluding tenant reimbursements of expenses and variable lease payments, as of March 31, 2026 ($ in thousands):


Remainder of 2026	$	7,815
2027	10,170
2028	10,156
2029	10,344
2030	10,237
Thereafter	14,007
Total	$	62,729