
		Outstanding loan amount
		December 31, 2024						December 31, 2023
Real Estate Financing Project(a)	Maturity Date	Principal		Accrued interest and fees(b)		Total loan amount(c)		Total loan amount(c)		Maximum principal commitment		Interest rate			Interest compounding
Solis Gainesville II	10/3/2026	$	19,595	$	5,696	$	25,291	$	22,268	$	19,595	10.0	%	(d)	Annually
Solis Kennesaw	5/25/2027	37,870		7,692		45,562		15,922		37,870		14.0	%	(d)	Annually
Solis Peachtree Corners	10/31/2027	28,440		5,108		33,549		11,092		28,440		15.0	%	(d)	Annually
The Allure at Edinburgh	1/16/2028	9,228		1,987		11,215		9,830		9,228		15.0	%	(e)	None
Solis City Park II(f)	4/23/2028	—		—		—		24,313		—		13.0	%		Annually
Solis North Creek	8/8/2030	5,134		682		5,816		—		26,767		12.0	%	(d)	Annually
Total mezzanine & preferred equity		$	100,267	$	21,165	121,433		83,425		$	121,900
Other notes receivable						12,984		12,219

Allowance for credit losses(g)						(1,852)		(1,472)

Total notes receivable						$	132,565	$	94,172

(a) The Company does not intend to sell the real estate financing investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis.

(g) The amounts as of December 31, 2024 and December 31, 2023 exclude $0.5 million and $0.7 million, respectively, of Current Expected Credit Losses (“CECL”) allowance that relates to the unfunded commitments, which were recorded as a liability under other liabilities in the consolidated balance sheets.

Interest on notes receivable is accrued and funded utilizing the interest reserves for each loan, which are components of the respective maximum loan commitments, and such accrued interest is added to the loan receivable balances. The Company recognized interest income for the years ended December 31, 2024, 2023, and 2022 as follows (in thousands):


	Years Ended December 31,
Real Estate Financing Project	2024			2023			2022
Nexton Multifamily	$	—		$	—		$	5,348	(a)
Solis City Park II(b)	1,482		(c)	2,887		(c)	1,038
Solis Gainesville II	3,021		(c)(d)	2,757		(c)(d)	205
Solis Kennesaw	5,449		(c)(d)	2,810		(c)(d)	—
Solis North Creek	682		(d)	—			—
Solis Peachtree Corners	4,059		(c)(d)	1,472		(c)(d)	—
The Allure at Edinburgh	1,384			603			—


The Interlock(e)	—			3,647		(c)	9,870		(c)
Total mezzanine & preferred equity	16,077			14,176			16,461
Other interest income	2,519			927			517
Total interest income	$	18,596		$	15,103		$	16,978

On March 23, 2022, the Company entered into a $20.6 million preferred equity investment for the development of a multifamily property located in Charlotte, North Carolina ("Solis City Park II"). The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on April 28, 2026, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 13%, compounded annually, with minimum interest of $5.7 million over the life of the investment.

On July 10, 2024, the Company's preferred equity investment in Solis City Park II was redeemed in full for total consideration of $25.8 million, including $5.2 million of interest. Interest for the month of June 2024 was waived as part of the note redemption.

On October 3, 2022, the Company entered into a $19.6 million preferred equity investment for the development of a multifamily property located in Gainesville, Georgia ("Solis Gainesville II"). The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on October 3, 2026, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 14%, compounded annually, with minimum interest of $5.9 million over the life of the investment.

On March 29, 2023, the Solis Gainesville II preferred equity investment agreement was modified to adjust the interest rate. The interest rate of 14% remains effective through the first 24 months of the investment. Beginning on October 3, 2024, the investment will bear interest at a rate of 10% for 12 months. On October 3, 2025, the investment will again bear interest at a rate of 14% per annum through maturity. Additionally, the amendment introduced an unused commitment fee of 10% on the unfunded portion of the investment's maximum loan commitment, which is effective January 1, 2023. Both the interest and unused commitment fee compound annually.

On July 10, 2024, the Company signed an amendment to the operating agreement for the entity in which the Company owns its real estate financing investment with respect to Solis Gainesville II to reduce the preference rate on the investment from 10.0% to 6.0% starting on January 1, 2025. The Company also received a call option to purchase a controlling interest in the entity that owns Solis Gainesville II at fair market value during the period from January 1, 2025 to December 31, 2025, which option also gives the Company a right of first refusal to buy the property during the same period.

On May 25, 2023, the Company entered into a $37.9 million preferred equity investment for the development of a multifamily property located in Marietta, Georgia ("Solis Kennesaw"). The investment has economic terms consistent with a note receivable, including a mandatory redemption or maturity on May 25, 2027, and it is accounted for as a note receivable. The Company's investment bears interest at a rate of 14.0% for the first 24 months. Beginning on May 25, 2025, the investment will bear interest at a rate of 9.0% for 12 months. On May 25, 2026, the investment will again bear interest at a rate of 14.0% through maturity. The interest compounds annually. The Company also earns an unused commitment fee of 11.0% on the unfunded portion of the investment's maximum loan commitment, which does not compound, and an equity fee on its commitment of $0.6 million to be amortized through redemption. The preferred equity investment is subject to a minimum interest guarantee of $13.1 million over the life of the investment.

On July 26, 2023, the Company entered into a $28.4 million preferred equity investment for the development of a multifamily property located in Peachtree Corners, Georgia ("Solis Peachtree Corners"). The preferred equity investment has economic and other terms consistent with a note receivable, including a mandatory redemption feature effective on October 27, 2027. The Company's investment bears interest at a rate of 15.0% for the first 27 months. Beginning on November 1, 2025, the investment will bear interest at a rate of 9.0% for 12 months. On November 1, 2026, the investment will again bear interest at a rate of 15.0% through maturity. The interest compounds annually. The Company also earns an unused commitment fee of 10.0% on the unfunded portion of the investment's maximum loan commitment, which also compounds annually, and an equity fee on its commitment of $0.4 million to be amortized through redemption. The preferred equity investment is subject to a minimum interest guarantee of $12.0 million over the life of the investment.

On July 26, 2023, the Company entered into a $9.2 million preferred equity investment for the development of a multifamily property located in Chesapeake, Virginia ("The Allure at Edinburgh"). The preferred equity investment has economic and other terms consistent with a note receivable, including a mandatory redemption feature effective on January 16, 2028. The Company's investment bears interest at a rate of 15.0%, which does not compound. Upon The Allure at Edinburgh obtaining a certificate of occupancy, the investment will bear interest at a rate of 10.0%. The common equity partner in the development property holds an option to sell the property to the Company at a predetermined amount if certain conditions are met. The Company also holds an option to purchase the property at any time prior to maturity of the preferred equity investment, and at the same predetermined amount as the common equity partner's option to sell.

On July 10, 2024, the Company entered into a $27.0 million preferred equity investment for the development of a multifamily property located in Huntersville, North Carolina ("Solis North Creek"). The preferred equity investment has economic terms consistent with a note receivable, including a mandatory redemption feature effective on August 8, 2030, and is accounted for as a note receivable. The Company's investment bears interest at a rate of 12.0% for the first 24 months. Beginning on July 10, 2026, the investment will bear interest at a rate of 9.0% for 12 months. On July 10, 2027, the investment will again bear interest at 12.0% through maturity. The interest compounds annually. The Company also earns an unused commitment fee of 4.5% on the unfunded portion of the investment's maximum loan commitment, which also compounds annually. The preferred equity investment was initially subject to a minimum interest guarantee of $8.9 million over the life of the investment.

On August 8, 2024, the Company signed an amendment to the operating agreement for the entity through which the Company owns its real estate financing investment with respect to Solis North Creek to reduce the equity funding requirement from $27.0 million to $26.8 million and the minimum interest guarantee from $8.9 million to $8.8 million.

The Company is exposed to credit losses primarily through its real estate financing investments. As of December 31, 2024, the Company had six real estate financing investments, which are accounted for as notes receivable, each of which are financing development projects in various stages of completion or lease-up. Each of these projects is subject to a loan that is senior to the Company’s loan. Interest on these loans is paid in kind and is generally not expected to be paid until a sale of the project after completion of the development.

The Company's management performs a quarterly analysis of the loan portfolio to determine the risk of credit loss based on the progress of development activities, including leasing activities, projected development costs, and current and projected subordinated and senior loan balances. The Company estimates future losses on its notes receivable using risk ratings that correspond to probabilities of default and loss given default. The Company's risk ratings are as follows:

•Special Mention: loans in this category show signs that the economic performance of the project may suffer as a result of slower-than-expected leasing activity or an extended development or marketing timeline. Loans in this category warrant increased monitoring by management.

•Substandard: loans in this category may not be fully collected by the Company unless remediation actions are taken. Remediation actions may include obtaining additional collateral or assisting the borrower with asset management activities to prepare the project for sale. The Company will also consider placing the loan on non-accrual status if it does not believe that additional interest accruals will ultimately be collected.

The Company updated the risk ratings for each of its notes receivable as of December 31, 2024 and obtained industry loan loss data relative to these risk ratings. Each of the outstanding loans as of December 31, 2024 was "Pass" rated. The Company’s analysis resulted in an allowance for loan losses of approximately $2.4 million for the year ended December 31, 2024. An allowance related to unfunded commitments of approximately $0.5 million as of December 31, 2024 was recorded as Other liabilities on the consolidated balance sheet.

At December 31, 2024, the Company reported $132.6 million of notes receivable, net of allowances of $1.9 million. At December 31, 2023, the Company reported $94.2 million of notes receivable, net of allowances of $1.5 million.


	Year ended December 31, 2024						Year ended December 31, 2023
	Funded		Unfunded		Total		Funded		Unfunded		Total
Beginning balance	$	1,472	$	732	$	2,204	$	1,292	$	338	$	1,630

Unrealized credit loss provision (release)	440		(223)		217		645		394		1,039
Release due to redemption	(60)		—		(60)		(465)		—		(465)


Ending balance	$	1,852	$	509	$	2,361	$	1,472	$	732	$	2,204

The Company places loans on non-accrual status when the loan balance, together with the balance of any senior loan, approximately equals the estimated realizable value of the underlying development project. As of December 31, 2024, no loans were placed on non-accrual status.