REAL ESTATE OWNED

6 Months Ended

Jun. 30, 2025

A summary of our REO assets is as follows:


	June 30, 2025		December 31, 2024
Land	$	1,782,022	$	—
Building	22,175,098		—
Less: Accumulated depreciation and amortization	(138,777)		—
Real estate owned, net	$	23,818,343	$	—

At June 30, 2025, our REO assets were comprised of two multifamily properties held within 2021-FL1 CLO and LMF 2023-1 Financing.

During the six months ended June 30, 2025, Lument Real Estate Capital, LLC ("LREC"), as special servicer for 2021-FL1 CLO foreclosed on one multifamily bridge loan with aggregate net carrying value of $13.0 million, net of specific CECL reserves of $2.4 million, with ownership and deed to the property being taken by a newly formed subsidiary of 2021-FL1 CLO. Additionally, LREC, as special servicer for LMF 2023-1 Financing foreclosed on one

multifamily bridge loan with aggregate net carrying value of $11.0 million, net of specific CECL reserves of $0.5 million, with ownership and deed to the property being taken by a newly formed subsidiary of LMF 2023-1 Financing.

The fair value of the underlying collateral is determined using the income approach, market approach, or a combination thereof. The significant unobservable input for the income capitalization approach is the overall capitalization rate assumption, used in the direct capitalization method, which ranged from 6.00%-6.25%. The significant unobservable input used for the market approach is the price per unit from an appraisal or broker opinion of value.

At June 30, 2025, our REO properties had a weighted average occupancy rate of approximately 73.5%.

We recorded depreciation expense related to the REO assets of $0.1 million for the three and six months ended June 30, 2025, recorded as "Other operating expenses" in the consolidated statement of operations.