Loans Held for Investment, Net

12 Months Ended

Sep. 30, 2025

Our loans are classified as held for investment based upon our intent and ability to hold them until maturity. Loans that are held for investment are carried at cost, net of allowance for credit losses, unamortized loan origination fees, accreted exit fees, unamortized premiums and unaccreted discounts, as applicable, that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are determined to be collateral dependent.

In July 2024, we originated a floating rate first mortgage loan that is secured by a hotel property in Revere, MA for a total commitment of $40,000, which was fully funded as of September 30, 2024. This loan requires the borrower to pay interest at a rate of the Secured Overnight Financing Rate, or SOFR, plus a premium of 395 basis points per annum and has an initial term of two years with three one year extensions. During the fiscal year ended September 30, 2025, the borrower of this loan made an early repayment of $3,000 which reduced the unpaid principal on this loan to $37,000.

In July 2024, we originated a floating rate first mortgage loan that is secured by an industrial property in Wayne, PA for a total commitment of $27,000, of which $17,180 was funded as of September 30, 2024. During the fiscal year ended September 30, 2025, we funded an additional $7,553 to the borrower. This loan requires the borrower to pay interest at the rate of SOFR plus a premium of 425 basis points per annum and has an initial term of three years with two one year extensions.

As of September 30, 2025 and 2024, deferred origination fees were $700, of which $361 and $651, respectively, remain unamortized and we have accrued $201 and $35, respectively, in exit fee receivables which we include in loans held for investment, net in our consolidated balance sheets.

The table below provides overall statistics for our loan portfolio as of September 30, 2025 and 2024:


	September 30, 2025			September 30, 2024
Number of loans	2			2
Total loan commitments	$	64,000		$	67,000
Unfunded loan commitments (1)	$	2,267		$	9,820
Principal balance	$	61,733		$	57,180
Weighted average coupon rate	8.41		%	9.15		%
Weighted average all in yield (2)	9.32		%	10.13		%
Weighted average floor	4.34		%	4.34		%
Weighted average maximum maturity (years) (3)	3.77			4.80

(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.

(3)Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions.

Credit Quality Information

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 September 30, 2025 and 2024, our two loans had an internal risk rating of 3.

We estimate credit losses over a reasonable and supportable forecast period of 12 months, followed by a straight-line reversion period of 12 months back to average historical losses. For the fiscal years ended September 30, 2025 and 2024, we recorded an allowance for credit losses of $589 and $343, respectively, related to our then outstanding loans held for investment and increased accounts payable and accrued expenses by $49 and $259, respectively, related to then unfunded loan commitments.

We have elected to exclude accrued interest receivable from amortized cost and not to measure an allowance for credit losses on accrued interest receivable. Accrued interest receivables are generally written off when payments are 120 days past due. Such amounts, if any, are reversed against interest income and no further interest will be recorded until it is collected. As of September 30, 2025 and 2024, we recorded $512 and $454 in prepaid and other current assets on our consolidated balance sheets related to accrued interest receivable on our loans and no amounts were written off for the fiscal years ended September 30, 2025 and 2024.

As of September 30, 2025, our borrowers had paid their debt service obligations owed and due to us.

On October 29, 2025, we authorized the sale of our two floating rate first mortgage loans secured by properties in Revere, MA and Wayne, PA to SEVN.