Blackstone Mortgage Trust : 10Q Quarterly Report - Q2 2026

About this update from Blackstone Mortgage Trust, Inc.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-14788 Blackstone Mortgage Trust, Inc. (Exact name of Registrant as specified in its charter) Maryland 94-6181186 (State or other jurisdiction of incorporation or organization) 345 Park Avenue New York, New York 10154 (I.R.S. Employer Identification No.) (Address of principal executive offices)(Zip Code) (212) 655-0220 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Class A common stock, par value $0.01 per share BXMT New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The number of the registrant's shares of class A common stock, par value $0.01 per share, outstanding as of July 23, 2026 was 168,543,591 Page PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 3 Consolidated Financial Statements (Unaudited): Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 3 Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 4 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended Jun e 30, 5 2026 and 2025 Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2026 and 2025 6 and June 30, 2026 and 2025 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 8 Notes to Consolidated Financial Statements 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 56 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 91 ITEM 4. CONTROLS AND PROCEDURES 93 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 94 ITEM 1A. RISK FACTORS 94 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 95 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 96 ITEM 4. MINE SAFETY DISCLOSURES 96 ITEM 5. OTHER INFORMATION 96 ITEM 6. EXHIBITS 97 SIGNATURES 99 Website Disclosure We use our website ( www.blackstonemortgagetrust.com ) as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, Securities and Exchange Commission, or SEC, filings and public conference calls, and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone Mortgage Trust when you enroll your email address by visiting the "Contact Us and Email Alerts" section of our website at http://ir.blackstonemortgagetrust.com . The contents of our website and any alerts are not, however, a part of this report. PART I. ‌ITEM 1. FINANCIAL STATEMENTS ‌Blackstone Mortgage Trust, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except share data) June 30, 2026 December 31, 2025 Assets Cash and cash equivalents $ 432,833 $ 452,526 Loans receivable 17,334,730 18,069,134 Current expected credit loss reserve (397,835) (284,440) Loans receivable, net 16,936,895 17,784,694 Owned real estate, net 1,296,989 1,134,975 Investments in unconsolidated entities (includes $136,158 and $111,010 at fair value as of June 30, 2026 and December 31, 2025, respectively) 322,060 217,488 Other assets 415,265 413,263 Total Assets $ 19,404,042 $ 20,002,946 Liabilities and Equity Secured debt, net $ 8,708,944 $ 10,117,292 Securitized debt obligations, net 2,732,964 2,139,719 Asset-specific debt, net 971,305 997,746 Term loans, net 1,878,562 1,808,000 Senior secured notes, net 1,217,499 784,876 Convertible notes, net 265,310 264,745 Other liabilities 364,871 386,178 Total Liabilities 16,139,455 16,498,556 Commitments and contingencies (Note 21) Equity Class A common stock, $0.01 par value, 400,000,000 shares authorized, 168,543,591 and 168,259,023 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 1,685 1,683 Additional paid-in capital 5,440,390 5,430,542 Accumulated other comprehensive income 11,234 12,113 Accumulated deficit (2,191,769) (1,945,428) Total Blackstone Mortgage Trust, Inc. stockholders' equity 3,261,540 3,498,910 Non-controlling interests 3,047 5,480 Total Equity 3,264,587 3,504,390 Total Liabilities and Equity $ 19,404,042 $ 20,002,946 Note: The consolidated balance sheets as of June 30, 2026 and December 31, 2025 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc. As of June 30, 2026 and December 31, 2025, assets of the consolidated VIEs totaled $3.9 billion and $3.3 billion, respectively, and liabilities of the consolidated VIEs totaled $2.8 billion and $2.2 billion, respectively. Refer to Note 19 for further discussion of the VIEs. See accompanying notes to consolidated financial statements. ‌(in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income from loans and other investments Interest and related income $ 309,748 $ 359,537 $ 615,305 $ 691,594 Less: Interest and related expenses 227,182 264,727 447,918 506,960 Income from loans and other investments, net 82,566 94,810 167,387 184,634 Revenue from owned real estate 75,497 38,812 150,091 75,845 Total net revenue 158,063 133,622 317,478 260,479 Expenses Management and incentive fees 14,641 17,036 29,454 34,271 General and administrative expenses 14,918 13,526 28,899 26,190 Expenses from owned real estate 81,440 47,796 163,415 94,098 Total expenses 110,999 78,358 221,768 154,559 Increase in current expected credit loss reserve (134,403) (45,593) (189,458) (95,098) Income (loss) from unconsolidated entities 8,570 (2,015) 9,953 (2,889) Net loss on disposition of owned real estate - - (160) - Other income, net 3 231 7 321 (Loss) income before income taxes (78,766) 7,887 (83,948) 8,254 Income tax provision 2,501 903 3,659 1,621 Net (loss) income (81,267) 6,984 (87,607) 6,633 Net loss (income) attributable to non-controlling interests 45 (15) 88 (21) Net (loss) income attributable to Blackstone Mortgage $ (81,222) $ 6,969 $ (87,519) $ 6,612 Trust, Inc. Net (loss) income per share of common stock, basic and $ diluted (0.48) $ 0.04 $ (0.52) $ 0.04 Weighted-average shares of common stock outstanding, basic and diluted 168,964,515 171,893,905 169,021,130 171,949,090 See accompanying notes to consolidated financial statements. ‌Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net (loss) income $ (81,267) $ 6,984 $ (87,607) $ 6,633 Other comprehensive income (loss) Unrealized (loss) gain on foreign currency translation (8,755) 145,481 (37,156) 206,382 Realized and unrealized gain (loss) on derivative financial instruments 10,615 (143,268) 35,087 (203,663) Unrealized gain (loss) on derivative financial instruments from unconsolidated entities 1,517 (1,006) 1,190 (1,189) Other comprehensive income (loss) 3,377 1,207 (879) 1,530 Comprehensive (loss) income (77,890) 8,191 (88,486) 8,163 Comprehensive loss (income) attributable to non-controlling interests 45 (15) 88 (21) Comprehensive (loss) income attributable to Blackstone Mortgage Trust, Inc. $ (77,845) $ 8,176 $ (88,398) $ 8,142 See accompanying notes to consolidated financial statements. ‌Class A Common Stock Additional Paid- In Capital Other Comprehensive Income (Loss) Accumulated Deficit Stockholders' Equity Non-Controlling Interests Total Equity Balance at December 31, 2025 $ 1,683 $5,430,542 $ 12,113 $ (1,945,428) $ 3,498,910 $ 5,480 $3,504,390 Repurchases of class A common stock (1) (801) - - (802) - (802) Restricted class A common stock earned 5 6,484 - - 6,489 - 6,489 Dividends reinvested - 160 - - 160 - 160 Deferred directors' compensation - 198 - - 198 - 198 Net (loss) income - - - (6,297) (6,297) (43) (6,340) Other comprehensive income - - (4,256) - (4,256) - (4,256) Dividends declared on common stock and deferred stock units, $0.47 per share - - - (79,442) (79,442) - (79,442) Distributions to non-controlling interests - - - - - (2,345) (2,345) Balance at March 31, 2026 $ 1,687 $5,436,583 $ 7,857 $ (2,031,167) $ 3,414,960 $ 3,092 $3,418,052 Repurchases of class A common stock (2) (3,032) - - (3,034) - (3,034) Restricted class A common stock earned - 6,476 - - 6,476 - 6,476 Dividends reinvested - 164 - - 164 - 164 Deferred directors' compensation - 199 - - 199 - 199 Net loss - - - (81,222) (81,222) (45) (81,267) Other comprehensive income - - 3,377 - 3,377 - 3,377 Dividends declared on common stock and deferred stock units, $0.47 per share - - - (79,380) (79,380) - (79,380) Balance at June 30, 2026 $ 1,685 $5,440,390 $ 11,234 $ (2,191,769) $ 3,261,540 $ 3,047 $3,264,587 Class A Common Stock Additional Paid- In Capital Other Comprehensive Income (Loss) Accumulated Deficit Stockholders' Equity Non-Controlling Interests Total Equity Balance at December 31, 2024 $ 1,728 $5,511,053 $ 8,268 $ (1,733,741) $ 3,787,308 $ 6,881 $3,794,189 Shares of class A common stock issued, net 1 (1) - - - - - Repurchases of class A common stock (18) (31,629) - - (31,647) - (31,647) Restricted class A common stock earned 5 6,787 - - 6,792 - 6,792 Dividends reinvested - 213 - - 213 - 213 Deferred directors' - 173 - - 173 - 173 Net (loss) income - - - (357) (357) 6 (351) Other comprehensive income - - 323 - 323 - 323 Dividends declared on common stock and deferred stock units, $0.47 per share - - - (80,837) (80,837) - (80,837) Distributions to non-controlling interests - - - - - (137) (137) Balance at March 31, 2025 $ 1,716 $5,486,596 $ 8,591 $ (1,814,935) $ 3,681,968 $ 6,750 $3,688,718 Repurchases of class A common stock - (39) - - (39) - (39) Restricted class A common stock earned - 7,131 - - 7,131 - 7,131 Dividends reinvested - 160 - - 160 - 160 Deferred directors' compensation - 172 - - 172 - 172 Net income - - - 6,969 6,969 15 6,984 Other comprehensive income - - 1,207 - 1,207 - 1,207 Dividends declared on common stock and deferred stock units, $0.47 per share - - - (80,796) (80,796) - (80,796) Balance at June 30, 2025 $ 1,716 $ 5,494,020 $ 9,798 $ (1,888,762) $ 3,616,772 $ 6,765 $ 3,623,537 See accompanying notes to consolidated financial statements. ‌Cash flows from operating activities Net (loss) income $ (87,607) $ 6,633 Adjustments to reconcile net (loss) income to net cash provided by operating activities Non-cash compensation expense 13,362 14,268 Amortization of deferred fees on loans (34,353) (26,838) Amortization of deferred financing costs and premiums/discounts on debt obligations 18,347 18,962 Payment-in-kind interest, net of interest received (9,049) (8,450) Increase in current expected credit loss reserve 189,458 95,098 Straight-line rental income (4,036) (1,716) Depreciation and amortization of owned real estate 41,197 32,918 Net loss on disposition of owned real estate 160 - (Income) loss from unconsolidated entities (9,953) 2,889 Distributions of earnings from unconsolidated entities 16,078 - Unrealized loss on derivative financial instruments, net 3,288 3,024 Realized gain on derivative financial instruments, net (10,764) (10,634) Changes in assets and liabilities, net Other assets 112,315 27,313 Other liabilities (3,503) 4,282 Net cash provided by operating activities 234,940 157,749 Cash flows from investing activities Principal fundings of loans receivable (1,449,551) (3,440,030) Principal collections, sales proceeds, and cost-recovery proceeds from loans receivable 1,794,016 3,408,253 Origination and other fees received on loans receivable 22,058 30,475 Investment in debt securities (66,650) - Payments under derivative financial instruments (48,412) (127,982) Receipts under derivative financial instruments 25,859 94,364 Collateral deposited under derivative agreements (135,830) (343,500) Return of collateral deposited under derivative agreements 157,850 261,890 Investment in unconsolidated entities (136,041) (107,712) Return of capital from unconsolidated entities 26,534 - Proceeds from disposition of owned real estate 15,148 - Capital expenditures on owned real estate (18,958) (6,846) Net cash provided by (used in) investing activities 186,023 (231,088) continued… See accompanying notes to consolidated financial statements. Cash flows from financing activities Borrowings under secured debt $ 1,434,395 $ 2,525,536 Repayments under secured debt (2,781,133) (2,072,147) Proceeds from issuance of securitized debt obligations 880,000 831,250 Repayments of securitized debt obligations (275,561) (169,926) Borrowings under asset-specific debt 26,322 230,699 Repayments under asset-specific debt (48,000) (936,274) Repayments of loan participations - (54,028) Net proceeds from term loan borrowings 72,117 - Repayments and repurchases of term loans (4,810) (3,690) Proceeds from issuance of senior secured notes 450,000 - Payment of deferred financing costs (27,416) (28,541) Distributions to non-controlling interests (2,345) (137) Dividends paid on class A common stock (158,363) (161,856) Repurchases of class A common stock (3,836) (31,686) Net cash (used in) provided by financing activities (438,630) 129,200 Net (decrease) increase in cash and cash equivalents (17,667) 55,861 Cash and cash equivalents at beginning of period 452,526 323,483 Effects of currency translation on cash and cash equivalents (2,026) 8,705 Cash and cash equivalents at end of period $ 432,833 $ 388,049 Supplemental disclosure of cash flows information Payments of interest $ (426,789) $ (483,544) Payments of income taxes $ (5,308) $ (1,748) Supplemental disclosure of non-cash investing and financing activities Dividends declared, not paid $ (79,215) $ (80,649) Loan principal payments held by servicer, net $ 3,874 $ 91,996 Transfer of senior loans to owned real estate $ 180,416 $ 34,721 Assumption of other assets and liabilities related to owned real estate $ 10,572 $ 10,323 Accrued capital expenditures on owned real estate $ 312 $ - See accompanying notes to consolidated financial statements. Notes to Consolidated Financial Statements (Unaudited) ‌ORGANIZATION References herein to "Blackstone Mortgage Trust," "Company," "we," "us" or "our" refer to Blackstone Mortgage Trust, Inc., a Maryland corporation, and its subsidiaries unless the context specifically requires otherwise. Blackstone Mortgage Trust is a real estate finance company that originates, acquires, and manages senior loans and other debt or credit-oriented investments collateralized by or relating to commercial real estate in North America, Europe, and Australia. Our portfolio is composed primarily of senior loans secured by high-quality, institutional assets located in major markets, and sponsored by experienced, well-capitalized real estate investment owners and operators. We finance our investments in a variety of ways, including borrowing under secured credit facilities, issuing collateralized loan obligations, or CLOs, other securitization transactions, syndicating senior loans and/or participations, and other forms of asset-level financing, depending on our view of the most prudent financing option available for each of our investments. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol "BXMT." Our principal executive offices are located at 345 Park Avenue, New York, New York 10154. We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements, including the notes thereto, are unaudited and exclude some of the disclosures required in audited financial statements. We believe we have made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing our consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission, or the SEC. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP, and include, on a consolidated basis, our accounts, the accounts of our wholly-owned subsidiaries, majority-owned subsidiaries, and variable interest entities, or VIEs, of which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation, including changes to the presentation of certain income and expense captions and loans receivable disclosures. Principles of Consolidation We consolidate all entities that we control through either majority ownership or voting rights. In addition, we consolidate all VIEs of which we are considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have an interest with the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE's economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. Entities that do not qualify as VIEs are generally considered voting interest entities, or VOEs, and are evaluated for consolidation under the voting interest model. VOEs are consolidated when we control the entity through a majority voting interest or other means. For consolidated entities, the non-controlling partner's share of the assets, liabilities, and operations of each joint venture is included in non-controlling interests as a component of total equity. The non-controlling partner's interest is generally computed as the joint venture partner's ownership percentage. When the requirements for consolidation are not met and we have significant influence over the operations of the entity, the investment is accounted for under the equity method of accounting. Investments in unconsolidated entities for which we have not elected the fair value option, or FVO, are initially recorded at cost and subsequently adjusted for our pro rata share of net income, contributions and distributions. When we elect the FVO, we record our share of the net asset value of the entity and any related unrealized gains and losses. We review our investments in unconsolidated entities for impairment each quarter or when there is an event or change in circumstances that indicates a decrease in value. If there is a decrease in value due to a series of operating losses or other factors, the investment is evaluated to determine if the loss in value is considered other than temporary. Although a current fair value below the carrying value of the investment is an indicator of impairment, we will only recognize an impairment if the loss in value is determined to be an other than temporary impairment. If an impairment is determined to be other than temporary, we will record an impairment charge sufficient to reduce the investment's carrying value to its fair value, which would result in a new cost basis. This new cost basis will be used for future periods when recording subsequent income or loss and cannot be written up to a higher value as a result of increases in fair value. In 2017, we entered into a joint venture with Walker & Dunlop Inc., or Walker & Dunlop, to originate, hold, and finance multifamily bridge loans, which we refer to as our Multifamily Joint Venture. Pursuant to the terms of the agreements governing the joint venture, Walker & Dunlop contributed 15% of the venture's equity capital and we contributed 85%. We consolidate our Multifamily Joint Venture as we have a controlling financial interest. The non-controlling interests included on our consolidated balance sheets represent the equity interests in our Multifamily Joint Venture that are owned by Walker & Dunlop. A portion of our Multifamily Joint Venture's consolidated equity and results of operations are allocated to these non-controlling interests based on Walker & Dunlop's pro rata ownership of our Multifamily Joint Venture. In 2024, we entered into a joint venture with a Blackstone-advised investment vehicle to invest in triple net lease properties, which we refer to as our Net Lease Joint Venture. Our aggregate ownership interest in our Net Lease Joint Venture was 75% as of June 30, 2026. We do not consolidate our Net Lease Joint Venture as we do not have a controlling financial interest. Our investment in our Net Lease Joint Venture is accounted for under the equity method, and is recorded in investments in unconsolidated entities on our consolidated balance sheets, and our pro rata share of income (loss) is recorded in income (loss) from unconsolidated entities on our consolidated statements of operations. In 2025, we entered into a joint venture with a Blackstone-advised investment vehicle to acquire portfolios of performing commercial mortgage loans, which we refer to as our Bank Loan Portfolio Joint Venture. During 2025, our Bank Loan Portfolio Joint Venture acquired two portfolios of performing commercial mortgage loans. Our aggregate ownership interest in our Bank Loan Portfolio Joint Venture was 35% as of June 30, 2026. We do not consolidate our Bank Loan Portfolio Joint Venture as we do not have a controlling financial interest. Our investment in our Bank Loan Portfolio Joint Venture is accounted for using the FVO, and is recorded in investments in unconsolidated entities on our consolidated balance sheets, and our pro rata share of any unrealized gains and losses is recorded in income (loss) from unconsolidated entities on our consolidated statements of operations. In the second quarter of 2026, we entered into a joint venture with an unaffiliated third-party, alongside a Blackstone-advised investment vehicle, to acquire an initial $286.7 million portfolio of construction loans collateralized by single family homes, and to continue to acquire and fund such loans in the future, which we refer to as our Homebuilder Finance Joint Venture. Our aggregate ownership interest in our Homebuilder Finance Joint Venture was 45% as of June 30, 2026. We do not consolidate our Homebuilder Finance Joint Venture as we do not have a controlling financial interest. Our investment in our Homebuilder Finance Joint Venture is accounted for using the FVO, and is recorded in investments in unconsolidated entities on our consolidated balance sheets, and our pro rata share of any unrealized gains and losses is recorded in income (loss) from unconsolidated entities on our consolidated statements of operations. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ materially from those estimates. Revenue Recognition Interest income from our loans receivable portfolio is recognized over the life of each loan using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in our opinion, recovery of income and principal becomes doubtful. Interest received is then recorded as income or as a reduction in the amortized cost basis, based on the specific facts and circumstances, until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a reduction to interest income; however, expenses related to loans we acquire are included in general and administrative expenses as incurred. The sources of revenue from our owned real estate assets, which is included in revenue from owned real estate on our consolidated statements of operations, and the related revenue recognition policies are as follows: Rental income primarily consists of base rent income arising from tenant leases at our office and multifamily properties. We determine if an arrangement is a lease at contract inception, which is subject to the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 842 "Leases." Base rent is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. We begin to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Other operating income primarily consists of income from our hospitality properties and tenant reimbursement income. Revenue from our hospitality properties consists primarily of room revenue and food and beverage revenue. Room revenue is recognized when the related room is occupied and other hospitality revenue is recognized when the service is rendered. Tenant reimbursement income primarily consists of amounts due from tenants for costs related to common area maintenance, real estate taxes, and other recoverable costs included in lease agreements. We evaluate the collectability of receivables related to rental revenue on an individual lease basis and exercise judgment in assessing collectability considering the length of time a receivable has been outstanding, tenant credit-worthiness, payment history, available information about the financial condition of the tenant, and current economic trends, among other factors. Tenant receivables that are deemed uncollectible are recognized as a reduction to rental revenue. Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks and liquid investments with original maturities of three months or less. We may have bank balances in excess of federally insured amounts; however, we deposit our cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash or cash equivalents. As of both June 30, 2026 and December 31, 2025, we had no restricted cash on our consolidated balance sheets. Loans Receivable We originate and purchase commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. Current Expected Credit Losses Reserve The current expected credit loss, or CECL, reserve required under the ASC Topic 326 "Financial Instruments - Credit Losses," or ASC 326, reflects our current estimate of potential credit losses related to our loans and notes receivable included in our consolidated balance sheets. Changes to the CECL reserves are recognized through net income on our consolidated statements of operations. While ASC 326 does not require any particular method for determining the CECL reserves, it does specify the reserves should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASC 326 requires that all financial instruments subject to the CECL model have some amount of loss reserve to reflect the principle underlying the CECL model that all loans and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors. We estimate our CECL reserves primarily using the Weighted-Average Remaining Maturity, or WARM method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in FASB Staff Q&A Topic 326, No. 1. The WARM method requires us to reference historic loan loss data across a comparable data set and apply such loss rate to each of our loans over their expected remaining term, taking into consideration expected economic conditions over the relevant time frame. We apply the WARM method for the majority of our loan portfolio, which consists of loans that share similar risk characteristics. In certain instances, for loans with unique risk characteristics, we may instead use a probability-weighted model that considers the likelihood of default and expected loss given default for each such individual loan. Application of the WARM method to estimate CECL reserves requires judgment, including (i) the appropriate historical loan loss reference data, (ii) the expected timing and amount of future loan fundings and repayments, and (iii) the current credit quality of our portfolio and our expectations of performance and market conditions over the relevant time period. To estimate the historic loan losses relevant to our portfolio, we have augmented our historical loan performance, with market loan loss data licensed from Trepp LLC. This database includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through May 31, 2026. Within this database, we focused our historical loss reference calculations on the most relevant subset of available CMBS data, which we determined based on loan metrics that are most comparable to our loan portfolio including asset type, geography, and origination loan-to-value, or LTV. We believe this CMBS data, which includes month-over-month loan and property performance, is the most relevant, available, and comparable dataset to our portfolio. Our loans typically include commitments to fund incremental proceeds to our borrowers over the life of the loan. These future funding commitments are also subject to the CECL model. The CECL reserve related to future loan fundings is recorded as a component of other liabilities on our consolidated balance sheets. This CECL reserve is estimated using the same process outlined above for our outstanding loan balances, and changes in this component of the CECL reserve will similarly impact our consolidated net income. For both the funded and unfunded portions of our loans, we consider our internal risk rating of each loan as the primary credit quality indicator underlying our assessment. The CECL reserves are measured on a collective basis wherever similar risk characteristics exist within a pool of similar assets. We have identified the following pools and measure the reserve for credit losses using the following methods: U.S. Loans : WARM method that incorporates a subset of historical loss data, expected weighted-average remaining maturity of our loan pool, and an economic view. Non-U.S. Loans: WARM method that incorporates a subset of historical loss data, expected weighted-average remaining maturity of our loan pool, and an economic view. Unique Loans: a probability of default and loss given default model, assessed on an individual basis. During the three months ended June 30, 2026, we reassessed the pooling of certain loans previously classified within our Unique Loans pool. Based on our reassessment, we determined that these loans share risk characteristics materially similar to loans in our U.S. Loans and Non-U.S. Loans pools, as evaluated under our internal risk rating framework. Accordingly, consistent with ASC 326, which requires assets with similar risk characteristics to be evaluated on a collective basis wherever similar risk characteristics exist within a pool of similar assets, we have reclassified these loans into our U.S. Loans and Non-U.S. Loans pools, as applicable based on the geographic location of the underlying collateral. This reclassification did not have a material impact on our total CECL reserves as of June 30, 2026. Impaired Loans: impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. Determining that a loan is impaired requires significant judgment from management and is based on several factors including (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower's ability to pay the contractual amounts due under the terms of the loan. If a loan is determined to be impaired, we record the impairment as a component of our CECL reserves by applying the practical expedient for collateral dependent loans. The CECL reserves are assessed on an individual basis for these loans by comparing the estimated fair value of the underlying collateral to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed relevant by us. Actual losses, if any, could ultimately differ materially from these estimates. We only expect to charge off the impairment losses in our consolidated financial statements prepared in accordance with GAAP if and when such amounts are deemed non-recoverable. This is generally at the time a loan is repaid or foreclosed, or the underlying collateral assets are otherwise consolidated. However, non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. Contractual Term and Unfunded Loan Commitments Expected credit losses are estimated over the contractual term of each loan, adjusted for expected repayments. As part of our quarterly review of our loan portfolio, we assess the expected repayment date of each loan, which is used to determine the contractual term for purposes of computing our CECL reserves. Additionally, the expected credit losses over the contractual period of our loans are subject to the obligation to extend credit through our unfunded loan commitments. The CECL reserve for unfunded loan commitments is adjusted quarterly, as we consider the expected timing of future funding obligations over the estimated life of the loan. The considerations in estimating our CECL reserve for unfunded loan commitments are similar to those used for the related outstanding loans receivable. Credit Quality Indicator Our risk rating is our primary credit quality indicator in assessing our current expected credit loss reserve. We perform a quarterly risk review of our portfolio of loans, and assign each loan a risk rating based on a variety of factors, including, without limitation, origination LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated "1" through "5," from less risk to greater risk, relative to our loan portfolio in the aggregate, which ratings are defined as follows: - Very Low Risk - Low Risk - Medium Risk - High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss. - Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss. Estimation of Economic Conditions In addition to the WARM method computations and probability-weighted models described above, our CECL reserves are also adjusted to reflect our estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing our loans. These estimations include unemployment rates, interest rates, expectations of inflation and/or recession, and other macroeconomic factors impacting the likelihood and magnitude of potential credit losses for our loans during their anticipated term. In addition to the CMBS data we have licensed from Trepp LLC, we have also licensed certain macroeconomic financial forecasts to inform our view of the potential future impact that broader economic conditions may have on our loan portfolio's performance. We generally also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations. This process requires significant judgments about future events that, while based on the information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic condition impacting our portfolio could vary significantly from the estimates we made as of June 30, 2026. Owned Real Estate We may assume legal title, physical possession, or control of the collateral underlying a loan through a foreclosure, a deed-in-lieu of foreclosure transaction, or a loan modification in which we receive an equity interest in and/or control over decision-making at the property, resulting in us consolidating the real estate assets as VIEs. These real estate acquisitions are classified as owned real estate, on our consolidated balance sheet and are initially recognized at fair value on the acquisition date in accordance with the ASC Topic 805, "Business Combinations," or ASC 805. Upon acquisition of owned real estate assets, we assess the fair value of acquired tangible and intangible assets, which may include land, buildings, tenant improvements, "above-market" and "below-market" leases, acquired in-place leases, other identified intangible assets and assumed liabilities, as applicable, and allocate the fair value to the acquired assets and assumed liabilities. We assess and consider fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that we deem appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors, including the historical operating results, known and anticipated trends, and market and economic conditions. We capitalize acquisition-related costs associated with asset acquisitions. Real estate assets held for investment, except for land, are depreciated using the straight-line method over the assets' estimated useful lives of up to 40 years for buildings, 15 years for land improvements, and 10 years for building and tenant improvements. Renovations and/or replacements that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives. Lease intangibles are amortized over the remaining term of applicable leases on a straight-line basis. The cost of ordinary repairs and maintenance are expensed as incurred. Real estate assets held for investment are assessed for impairment on a quarterly basis. If the depreciated cost basis of the asset exceeds the undiscounted cash flows over the remaining holding period, the asset is considered for impairment. The impairment loss is recognized when the carrying value of the real estate assets exceed their fair value. The evaluation of anticipated future cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates, capital requirements and anticipated holding periods that could differ materially from actual results. Refer to Note 4 for further information. Real estate assets are classified as held for sale in the period when they meet the criteria under the ASC Topic 360 "Property, Plant, and Equipment." Once a real estate asset is classified as held for sale, depreciation is suspended and the asset is reported at the lower of its carrying value or fair value less cost to sell. If circumstances arise and we decide not to sell a real estate asset previously classified as held for sale, the real estate asset is reclassified as held for investment. Upon reclassification, the real estate asset is measured at the lower of (i) its carrying amount prior to classification as held for sale, adjusted for depreciation expense that would have been recognized had the real estate been classified as held for investment, and (ii) its estimated fair value at the time of reclassification. As of June 30, 2026 and December 31, 2025, we had 14 and 12 owned real estate assets, respectively, that were all classified as held for investment. Agency Multifamily Lending Partnership In 2024, we entered into an agreement with M&T Realty Capital Corporation, or MTRCC, a subsidiary of M&T Bank, that allows our borrowers to access multifamily agency financing through MTRCC's Fannie Mae DUS and Freddie Mac Optigo lending platforms, or our Agency Multifamily Lending Partnership. We will receive a portion of origination, servicing, and other fees for loans that we refer to MTRCC for origination under both the Fannie Mae and Freddie Mac programs. Additionally, we will share in losses with MTRCC and Fannie Mae on loans that we refer to MTRCC for origination under the Fannie Mae program. Revenue Recognition For loans that we refer to MTRCC for origination under both the Fannie Mae and Freddie Mac programs, we recognize our allocable portion of origination, servicing, and other fees in other income when we have satisfied our performance obligations in accordance with the ASC Topic 606, "Revenue from Contracts with Customers," or ASC 606. Our performance obligations are generally satisfied when the loan is referred by us to MTRCC and subsequently originated and sold under the Fannie Mae and Freddie Mac programs. A portion of the fees recognized, such as servicing fees, are variable and are reevaluated for collectibility on a recurring basis. Loss-sharing Obligation Pursuant to our agreement with MTRCC, we are subject to a loss-sharing obligation with respect to MTRCC's obligation to partially guarantee the performance of loans that they originate and sell under the Fannie Mae program. This loss-sharing agreement requires us to fund a fixed amount of cash into a segregated account based on the amount MTRCC is required to fund under the Fannie Mae program, with respect to loans we referred to MTRCC. In addition, we will recognize a liability for these loss-sharing obligations. This liability will be initially recognized at fair value with a corresponding expense at inception, and it will subsequently be amortized on a straight-line basis over the life of the loss-sharing obligation. This liability is included within other liabilities in our consolidated balance sheets. As of June 30, 2026, our maximum loss-sharing obligation associated with the loans referred by us to MTRCC under the Fannie Mae program was $5.5 million, and we have recorded related liabilities of $32 thousand. There have been no losses incurred as a result of the loss-sharing obligations. Derivative Financial Instruments We classify all derivative financial instruments as either other assets or other liabilities on our consolidated balance sheets at fair value. On the date we enter into a derivative contract, we designate each contract as (i) a hedge of a net investment in a foreign operation, or net investment hedge, (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability, or cash flow hedge, (iii) a hedge of a recognized asset or liability, or fair value hedge, or (iv) a derivative instrument not to be designated as a hedging derivative, or non-designated hedge. For all derivatives other than those designated as non-designated hedges, we formally document our hedge relationships and designation at the contract's inception. This documentation includes the identification of the hedging instruments and the hedged items, its risk management objectives, strategy for undertaking the hedge transaction and our evaluation of the effectiveness of its hedged transaction. On a quarterly basis, we also formally assess whether the derivative we designated in each hedging relationship is expected to be, and has been, highly effective in offsetting changes in the value or cash flows of the hedged items. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in net income prospectively. Our net investment hedges are assessed using a method based on changes in spot exchange rates. Gains and losses, representing hedge components excluded from the assessment of effectiveness, are recognized in interest and related income on our consolidated statements of operations over the contractual term of our net investment hedges on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. All other changes in the fair value of our derivative instruments that qualify as hedges are reported as a component of accumulated other comprehensive income (loss) on our consolidated financial statements. Deferred gains and losses are reclassified out of accumulated other comprehensive income (loss) and into net income in the same period or periods during which the hedged transaction affects earnings, and are presented in the same line item as the earnings effect of the hedged item. For cash flow hedges, this is typically when the periodic swap settlements are made, while for net investment hedges, this occurs when the hedged item is sold or substantially liquidated. To the extent a derivative does not qualify for hedge accounting and is deemed a non-designated hedge, the changes in its fair value are included in net income concurrently. Proceeds or payments from periodic settlements of derivative instruments are classified on our consolidated statement of cash flows in the same section as the underlying hedged item. Debt Securities We have elected the FVO for our debt securities, which are included in other assets on our consolidated balance sheets. Refer to Note 6 for further information. Secured Debt and Asset-Specific Debt We record investments financed with secured debt or asset-specific debt as separate assets and the related borrowings under any secured debt or asset-specific debt are recorded as separate liabilities on our consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the secured debt or asset-specific debt are reported separately on our consolidated statements of operations. Term Loans We record our term loans as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the term loans as additional non-cash interest expense. Senior Secured Notes We record our senior secured notes as liabilities on our consolidated balance sheets. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the senior secured notes as additional non-cash interest expense. Convertible Notes Convertible note proceeds, unless issued with a substantial premium or an embedded conversion feature, are classified as debt. Additionally, shares issuable under our convertible notes are included in diluted earnings per share in our consolidated financial statements, if the effect is dilutive, using the if-converted method, regardless of settlement intent. Where applicable, any issue discount or transaction expenses are deferred and amortized through the maturity date of the convertible notes as additional non-cash interest expense. Deferred Financing Costs The deferred financing costs that are included as a reduction in the net book value of the related liability on our consolidated balance sheets include issuance and other costs related to our debt obligations. These costs are amortized as interest expense using the effective interest method over the life of the related obligations. Underwriting Commissions and Offering Costs Underwriting commissions and offering costs incurred in connection with common stock offerings are reflected as a reduction of additional paid-in capital. Costs incurred that are not directly associated with the completion of a common stock offering are expensed when incurred. Fair Value Measurements The ASC Topic 820, "Fair Value Measurements and Disclosures," or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows: Level 1: Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date. Level 2: Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates. Level 3: Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management of third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Certain of our other assets are reported at fair value, as of quarter-end, either (i) on a recurring basis or (ii) on a nonrecurring basis, as a result of impairment or other events. Our assets that are recorded at fair value are discussed further in Note 18. We generally value our assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third parties. For collateral-dependent loans that are identified as impaired, we measure impairment by comparing our estimation of the fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors. We have elected the FVO for two of our investments in unconsolidated entities, our Bank Loan Portfolio Joint Venture and Homebuilder Finance Joint Venture, and therefore report these investments at fair value. Given the fair value of these investments are not readily determinable, the net asset value of the entities are used as a practical expedient. As of June 30, 2026, we had an aggregate $219.5 million asset-specific CECL reserve related to nine of our loans receivable with an aggregate amortized cost basis of $695.2 million, net of cost-recovery proceeds. The CECL reserve was recorded based on our estimation of the fair value of the loans' aggregate underlying collateral as of June 30, 2026. These loans receivable are therefore measured at fair value on a nonrecurring basis using significant unobservable inputs, and are classified as Level 3 assets in the fair value hierarchy. We estimated the fair value of the collateral underlying the loans receivable by considering a variety of inputs including property performance, market data, and comparable sales, as applicable. The significant unobservable inputs employed include the exit capitalization rate assumption used to forecast the future sale price of the underlying real estate collateral, which ranged from 4.9% to 8.5%, and the unlevered discount rate assumption, which ranged from 9.3% to 15.0%. During the six months ended June 30, 2026, we acquired legal title to two owned real estate assets through foreclosure transactions. At the time of each acquisition, we determined the fair value of the real estate assets based on a variety of inputs, as applicable, including, but not limited to, estimated cash flow projections, leasing assumptions, required capital expenditures, market data, and comparable sales. The owned real estate assets were measured at fair value on a nonrecurring basis using significant unobservable inputs and are classified as Level 3 assets in the fair value hierarchy. The significant unobservable inputs employed include (i) the exit capitalization rate assumption used to forecast the future sale price of the assets, which ranged from 5.8% to 6.5%, and (ii) the unlevered discount rate assumption, which ranged from 8.0% to 11.0%. Refer to Notes 4 and 18 for further information. We are also required by GAAP to disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments. The following methods and assumptions are used to estimate the fair value of each class of financial instruments, for which it is practicable to estimate that value: Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value. Loans receivable, net: The fair values of these loans were estimated using a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, credit worthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors. Derivative financial instruments: The fair value of our foreign currency and interest rate contracts was estimated using advice from a third-party derivative specialist, based on contractual cash flows and observable inputs comprising foreign currency rates and credit spreads. Secured debt, net and other secured debt: The fair value of these instruments was estimated based on the rate at which a similar credit facility would currently be priced. Other secured debt is included in other liabilities in our consolidated balance sheets. Securitized debt obligations, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price. Asset-specific debt, net: The fair value of these instruments was estimated based on the rate at which a similar agreement would currently be priced. Loan participations sold, net: The fair value of these instruments was estimated based on the value of the related loan receivable asset. Term loans, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price. Senior secured notes, net: The fair value of these instruments was estimated by utilizing third-party pricing service providers. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades, or valuation estimates from their internal pricing models to determine the reported price. Convertible notes, net: Each series of the convertible notes is actively traded and their fair values were obtained using quoted market prices. Income Taxes Our financial results generally do not reflect provisions for current or deferred income taxes on our REIT taxable income. We believe that we operate in a manner that will continue to allow us to be taxed as a REIT and, as a result, we generally do not expect to pay substantial corporate level taxes other than those payable by our taxable REIT subsidiaries. If we were to fail to meet these requirements, we may be subject to federal, state, and local income tax on current and past income, and penalties. Refer to Note 16 for further information. Stock-Based Compensation Our stock-based compensation consists of awards issued to our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors that vest over the life of the awards, as well as deferred stock units issued to certain members of our board of directors. Stock-based compensation expense is recognized for these awards in net income on a variable basis over the applicable vesting period of the awards, based on the value of our class A common stock. Refer to Note 17 for further information. Earnings per Share Basic earnings per share, or Basic EPS, is computed in accordance with the two-class method and is based on (i) the net earnings allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by (ii) the weighted-average number of shares of our class A common stock, including restricted class A common stock and deferred stock units outstanding during the period. Our restricted class A common stock is considered a participating security, as defined by GAAP, and has been included in our Basic EPS under the two-class method as these restricted shares have the same rights as our other shares of class A common stock, including participating in any gains or losses. Diluted earnings per share, or Diluted EPS, is determined using the if-converted method, and is based on (i) the net earnings, adjusted for interest expense incurred on our convertible notes during the relevant period, net of incentive fees, allocable to our class A common stock, including restricted class A common stock and deferred stock units, divided by (ii) the weighted-average number of shares of our class A common stock, including restricted class A common stock, deferred stock units, and shares of class A common stock issuable under our convertible notes. Refer to Note 14 for further discussion of earnings per share. Foreign Currency In the normal course of business, we enter into transactions not denominated in United States, or U.S., dollars. Foreign exchange gains and losses arising on such transactions are recorded as a gain or loss in our consolidated statements of operations. In addition, we consolidate entities that have a non-U.S. dollar functional currency. Non-U.S. dollar-denominated assets and liabilities are translated to U.S. dollars at the exchange rate prevailing at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation adjustments arising from the translation of non-U.S. dollar-denominated subsidiaries are recorded in other comprehensive income (loss). Recent Accounting Pronouncements In December 2025, the FASB issued Accounting Standards Update, or ASU, 2025-11, "Interim Reporting (Topic 270): Narrow Scope Improvements," which amends the guidance in ASC 270, Interim Reporting. The update enhances interim disclosure requirements by clarifying the information that must be presented in quarterly periods, including improved transparency regarding significant events, accounting policy updates, and material developments that occur between annual reporting dates. ASU 2025-11 also aligns certain interim reporting requirements more closely with annual disclosure objectives to promote consistency and comparability. The amendments are effective for interim periods beginning after December 15, 2027, and early adoption is permitted. We have not early adopted ASU 2025-11 and do not expect the adoption of ASU 2025-11 to have a material impact on our consolidated financial statements. In December 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements," which amends the guidance in ASC 815, Derivatives and Hedging. The update refines certain hedge accounting requirements, including clarifications to the designation and documentation criteria for hedge relationships, improvements to the assessment of hedge effectiveness, and enhanced disclosures intended to provide greater transparency into an entity's risk management activities involving derivatives. ASU 2025-09 is effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods, and early adoption is permitted. We have not early adopted ASU 2025-09 and do not expect the adoption of ASU 2025-09 to have a material impact on our consolidated financial statements. In December 2025, the FASB issued ASU 2025-08, "Financial Instruments-Credit Losses (Topic 326): Purchased Loans," which clarifies the application of the CECL model to purchased loans, including purchased credit-deteriorated loans, and enhances related disclosure requirements. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. We have not early adopted ASU 2025-08 and do not expect the adoption of ASU 2025-08 to have a material impact on our consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets," which amends the guidance in ASC 326. This update provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The amendment notes that in developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods, and early adoption is permitted. We recognize revenue from our Agency Multifamily Lending Partnership and income from our hospitality owned real estate assets pursuant to ASC 606. The adoption of ASU 2025-05 in 2026 did not have a material impact on our consolidated financial statements. In May 2025, the FASB issued ASU 2025-03, "Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity," which amends the guidance in ASC 805. This update clarifies the determination of the accounting acquirer in business combinations that are primarily effected through the exchange of equity interests and involve the acquisition of a VIE. Specifically, entities are now required to consider the factors outlined in ASC 805-10-55-12 through 55-15 when determining the accounting acquirer, rather than defaulting to the primary beneficiary of the VIE as the accounting acquirer. ASU 2025-03 is effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods, and early adoption is permitted. We have not early adopted ASU 2025-03 and do not expect the adoption of ASU 2025-03 to have a material impact on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-04 "Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments," or ASU 2024-04. ASU 2024-04 clarifies the accounting treatment for settlement of a convertible debt instrument as an induced conversion. ASU 2024-04 is effective on a prospective basis, with the option for retrospective application, for fiscal years beginning after December 15, 2025. The adoption of ASU 2024-04 in 2026 did not have a material impact on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-03 "Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," or ASU 2024-03. ASU 2024-03 requires disclosures in the notes to the financial statements on specified information about certain costs and expenses for each interim and annual reporting period. ASU 2024-03 is effective on either a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, and early adoption is permitted. We have not early adopted ASU 2024-03 and do not expect the adoption of ASU 2024-03 to have a material impact on our consolidated financial statements. LOANS RECEIVABLE, NET The following table details overall statistics for our loans receivable portfolio ($ in thousands): June 30, 2026 December 31, 2025 Number of loans 133 131 Principal balance $ 17,409,208 $ 18,154,768 Net book value $ 16,936,895 $ 17,784,694 Unfunded loan commitments (1) $ 1,107,729 $ 1,185,004 Weighted-average cash coupon (2) + 3.13 % + 3.19 % Weighted-average all-in yield (2) + 3.35 % + 3.39 % Weighted-average maximum maturity (years) (3) 2.8 2.5 Unfunded commitments will primarily be funded to finance our borrowers' construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date. The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, CORRA, and other indices, as applicable to each loan. As of both June 30, 2026 and December 31, 2025, 97% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR. The remaining 3% of our loans by principal balance earned a fixed rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any. Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any. As of June 30, 2026, 47% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 53% were open to repayment by the borrower without penalty. As of December 31, 2025, 40% of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 60% were open to repayment by the borrower without penalty. The following table details the index rate floors for our loans receivable portfolio as of June 30, 2026 ($ in thousands): Loans Receivable Principal Balance Index Rate Floors USD Non-USD (1) Total Fixed Rate $ 398,405 $ 135,273 $ 533,678 0.00% or no floor (2) 1,060,787 3,701,597 4,762,384 0.01% to 1.00% floor 1,314,333 1,286,448 2,600,781 1.01% to 2.00% floor 856,529 1,651,960 2,508,489 2.01% to 3.00% floor 5,754,709 366,401 6,121,110 3.01% or more floor 608,673 274,093 882,766 Total (3) $ 9,993,436 $ 7,415,772 $ 17,409,208 Includes Euro, British Pound Sterling, Swedish Krona, Australian Dollar, and Canadian Dollar currencies. Includes all impaired loans. As of June 30, 2026, the weighted-average index rate floor of our floating-rate loans receivable principal balance was 1.53%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 2.11%. Activity relating to our loans receivable portfolio was as follows ($ in thousands): Net Book Value Loans Receivable, as of December 31, 2025 $ 18,069,134 Loan fundings 1,451,838 Loan repayments, sales, and cost-recovery proceeds (1,820,897) Charge-offs (75,071) Transfer to owned real estate (180,416) Transfer to other assets, net (1) (10,572) Payment-in-kind interest, net of interest received 9,049 Unrealized loss on foreign currency translation (121,642) Deferred fees and other items (2) (21,046) Amortization of fees and other items (2) 34,353 Loans Receivable, as of June 30, 2026 $ 17,334,730 CECL reserve (397,835) Loans Receivable, net, as of June 30, 2026 $ 16,936,895 This amount relates to intangible and other assets recorded in connection with a loan that was transferred to owned real estate, net of any liabilities recorded upon acquisition. See Note 6 for further information. Other items primarily consist of purchase and sale discounts or premiums, exit fees, and deferred origination expenses. The tables below detail the property type and geographic distribution of the properties securing the loans in our loans receivable portfolio ($ in thousands): June 30, 2026 Property Type Number of Loans Net Book Value Net Loan Exposure (1) Net Loan Exposure Percentage of Portfolio Industrial 24 $ 4,503,186 $ 4,195,901 26% Multifamily 46 4,161,897 3,994,054 25 Office 34 4,461,290 3,967,961 25 Hospitality 10 1,743,045 1,656,740 10 Retail 8 822,936 744,291 5 Self-storage 3 642,244 479,964 3 Life Sciences / Studio 4 284,772 266,408 2 Other 4 715,360 713,113 4 Total loans receivable 133 $ 17,334,730 $ 16,018,432 100% CECL reserve (397,835) Loans receivable, net $ 16,936,895 Geographic Location Number of Loans Net Book Value Net Loan Exposure (1) Net Loan Exposure Percentage of Portfolio United States Sunbelt 47 $ 4,771,723 $ 3,980,482 25% Northeast 19 2,132,423 2,028,575 13 West 23 1,858,650 1,774,545 11 Midwest 6 637,152 506,250 3 Northwest 3 476,987 472,722 3 Subtotal 98 9,876,935 8,762,574 55 International United Kingdom 16 2,680,430 2,667,644 17 Australia 4 1,181,561 1,175,243 7 Ireland 3 1,000,931 990,480 6 Spain 2 657,798 654,260 4 Sweden 1 477,022 475,327 3 Canada 1 440,265 278,678 2 Other Europe 7 958,513 953,482 6 Other International 1 61,275 60,744 - Subtotal 35 7,457,795 7,255,858 45 Total loans receivable 133 $ 17,334,730 $ 16,018,432 100% CECL reserve (397,835) Loans receivable, net $ 16,936,895 Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of June 30, 2026, which is our principal balance net of (i) $972.6 million of asset-specific debt, (ii) $20.3 million of cost-recovery proceeds, and (iii) our total loans receivable CECL reserve of $397.8 million. Our asset-specific debt is structurally non-recourse and term-matched to the corresponding collateral loans. December 31, 2025 Property Type Number of Loans Net Book Value Net Loan Exposure (1) Net Loan Exposure Percentage of Portfolio Office 37 $ 4,879,422 $ 4,556,980 27% Multifamily 46 4,457,767 4,305,534 26 Industrial 21 4,458,487 4,114,141 24 Hospitality 12 1,940,693 1,827,133 11 Retail 6 674,612 596,204 3 Self-storage 3 659,515 492,376 3 Life Sciences/Studio 4 284,079 277,373 2 Other 2 714,559 676,293 4 Total loans receivable 131 $ 18,069,134 $ 16,846,034 100% CECL reserve (284,440) Loans receivable, net $ 17,784,694 Geographic Location Number of Loans Net Book Value Net Loan Exposure (1) Net Loan Exposure Percentage of Portfolio United States Sunbelt 45 $ 4,715,039 $ 3,918,928 23% West 23 1,963,032 1,872,531 11 Northeast 17 1,893,877 1,800,387 11 Midwest 6 619,726 609,433 4 Northwest 3 457,215 454,507 3 Subtotal 94 9,648,889 8,655,786 52 International United Kingdom 19 3,595,424 3,582,983 21 Ireland 3 1,141,770 1,135,749 7 Australia 4 1,104,765 1,110,648 7 Spain 2 684,109 638,112 4 Sweden 1 502,124 500,917 3 Canada 1 455,407 288,504 2 Other Europe 6 875,579 872,527 4 Other International 1 61,067 60,808 - Subtotal 37 8,420,245 8,190,248 48 Total loans receivable 131 $ 18,069,134 $ 16,846,034 100% CECL reserve (284,440) Loans receivable, net $ 17,784,694 Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2025, which is our principal balance net of (i) $999.8 million of asset-specific debt, (ii) $24.5 million of cost-recovery proceeds, and (iii) our total loans receivable CECL reserve of $284.4 million. See Note 2 for further discussion of loan participations sold. Our asset-specific debt is structurally non-recourse and term-matched to the corresponding collateral loans. Loan Risk Ratings As further described in Note 2, we evaluate our loan portfolio on a quarterly basis. In conjunction with our quarterly loan portfolio review, we assess the risk factors of each loan, and assign a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, risk of loss, origination LTV, debt yield, collateral performance, structure, exit plan, and sponsorship. Loans are rated "1" (less risk) through "5" (greater risk), which ratings are defined in Note 2. The following tables allocate the net book value and net loan exposure balances based on our internal risk ratings ($ in thousands): June 30, 2026 Risk Rating Number of Loans Net Book Value Net Loan Exposure (1) 1 1 $ 60,896 $ 61,025 2 21 2,884,735 2,715,318 3 85 11,667,474 10,798,610 4 17 2,026,473 1,969,169 5 9 695,152 474,310 Total loans receivable 133 $ 17,334,730 $ 16,018,432 CECL reserve (397,835) Loans receivable, net $ 16,936,895 December 31, 2025 Risk Rating Number of Loans Net Book Value Net Loan Exposure (1) 1 3 $ 303,971 $ 302,564 2 20 2,875,870 2,704,222 3 85 11,907,947 11,045,913 4 17 2,806,758 2,705,706 5 6 174,588 87,629 Total loans receivable 131 $ 18,069,134 $ 16,846,034 CECL reserve (284,440) Loans receivable, net $ 17,784,694 Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of June 30, 2026, which is our principal balance net of (i) $972.6 million of asset-specific debt, (ii) $20.3 million of cost-recovery proceeds, and (iii) our total loans receivable CECL reserve of $397.8 million. Our net loan exposure as of December 31, 2025 is our principal balance net of (i) $999.8 million of asset-specific debt, (ii) $24.5 million of cost-recovery proceeds, and (iii) our total loans receivable CECL reserve of $284.4 million. Our asset-specific debt is structurally non-recourse and term-matched to the corresponding collateral loans. Our loan portfolio had a weighted-average risk rating of 3.0, based on net loan exposure, as of both June 30, 2026 and December 31, 2025. Current Expected Credit Loss Reserve The CECL reserves required under GAAP reflect our current estimate of potential credit losses related to the loans included in our consolidated balance sheets. Refer to Note 2 for further discussion of our CECL reserves. The following table presents the activity in our loans receivable CECL reserve by investment pool for the three months ended June 30, 2026 and 2025 ($ in thousands): U.S. Loans (1) Non-U.S. Loans Unique Loans Impaired Loans Total Loans Receivable, Net CECL reserves as of December 31, 2025 $ 101,180 $ 45,470 $ 50,465 $ 87,325 $ 284,440 Increase (decrease) in CECL reserves 15,673 (6,305) 182 44,051 53,601 Charge-offs of CECL reserves - - - (46,451) (46,451) CECL reserves as of March 31, 2026 $ 116,853 $ 39,165 $ 50,647 $ 84,925 $ 291,590 Increase (decrease) in CECL reserves 980 21,358 (50,647) 163,174 134,865 Charge-offs of CECL reserves - - - (28,620) (28,620) CECL reserves as of June 30, 2026 $ 117,833 $ 60,523 $ - $ 219,479 $ 397,835 CECL reserves as of December 31, 2024 $ 80,057 $ 26,141 $ 47,087 $ 580,651 $ 733,936 Increase in CECL reserves 17,604 13,796 1,477 16,552 49,429 Charge-offs of CECL reserves - - - (41,824) (41,824) CECL reserves as of March 31, 2025 $ 97,661 $ 39,937 $ 48,564 $ 555,379 $ 741,541 (Decrease) increase in CECL reserves (6,759) (1,568) 4,249 48,445 44,367 Charge-offs of CECL reserves - - - (45,057) (45,057) CECL reserves as of June 30, 2025 $ 90,902 $ 38,369 $ 52,813 $ 558,767 $ 740,851 Includes one U.S. dollar-denominated loan that is located in Bermuda. During the three months ended June 30, 2026, we recorded a net increase of $106.2 million in the CECL reserves against our loans receivable portfolio, primarily driven by a $134.6 million increase in our asset-specific CECL reserve, partially offset by a $28.3 million decrease in our general CECL reserve, bringing our total loans receivable CECL reserves to $397.8 million as of June 30, 2026. The increase in our asset-specific reserve was driven by three additional loans with an aggregate amortized cost basis of $502.0 million that were impaired during the three months ended June 30, 2026, of which two are secured by office properties, and the other is secured by an office/mixed-use asset. The office sector recovery in certain markets has continued to lag other commercial real estate sectors, which has, in certain cases, extended business plans on transitional properties and impacted their performance, affecting some borrowers' willingness and ability to continue to support their assets. Impairments are determined individually as a result of changes in specific credit quality factors for such loans. These factors include, among others, (i) the performance of the underlying property collateral, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts and circumstances affecting the borrower's willingness and ability to satisfy its contractual obligations under the terms of the loan. During the three months ended June 30, 2026, we recorded $7.1 million of interest income on these loans. Upon determining that the three loans were impaired, the income accrual was suspended, as the recovery of interest income and principal was doubtful. The increase in our asset-specific reserve was partially offset by charge-offs of $28.6 million primarily related to the resolution of one previously impaired loan as a result of our acquisition of title through a foreclosure of a multifamily collateral property located in Dallas, TX, which is now included on our consolidated balance sheet as an owned real estate asset. The decrease in our general CECL reserve was primarily driven by changes in risk ratings, and a decrease in our loans receivable balance, partially offset by new loan originations and an increase in the historical loss rate used in reserve calculations related to the additional CECL reserve charge-offs. As of June 30, 2026, we had an aggregate $219.5 million asset-specific CECL reserve related to nine of our loans receivable, with a total amortized cost basis of $695.2 million, net of cost-recovery proceeds. Impairments are each determined individually as a result of changes in the specific credit quality factors for each such loan. These factors included, among others, (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower's ability to pay the contractual amounts due under the terms of the loan. This asset-specific CECL reserve was recorded based on our estimation of the fair value of each loan's underlying collateral as of June 30, 2026. No income was recorded on our impaired loans subsequent to determining that such loans were impaired. During the three months ended June 30, 2026, we did not receive any cash proceeds from such loans that would have been applied as a reduction to the amortized cost basis of each respective loan. As of June 30, 2026, one of our performing loans with an amortized cost basis of $148.8 million was in payment default, was less than 90 days past due on its interest payment, and had a risk rating of "4." This loan was not impaired as of June 30, 2026 as we expect to fully recover all contractual principal and interest amounts due under the loan agreement. All other borrowers under performing loans were in compliance with the applicable contractual terms of each respective loan, including any required payment of interest. Refer to Note 2 for further discussion of our policies on revenue recognition and our CECL reserves. Our primary credit quality indicator is our risk ratings, which are further discussed above. The following tables present the net book value of our loan portfolio as of June 30, 2026 and December 31, 2025, respectively, by year of origination and risk rating ($ in thousands): Net Book Value of Loans Receivable by Year of Origination (1) As of June 30, 2026 Risk Rating 2026 2025 2024 2023 2022 Prior Total 1 $ - $ 60,896 $ - $ - $ - $ - $ 60,896 2 - 909,370 61,275 - 238,535 1,675,555 2,884,735 3 1,241,733 4,058,785 276,302 - 2,452,411 3,638,243 11,667,474 4 - 148,775 - - 151,863 1,725,835 2,026,473 5 - - - - 92,116 603,036 695,152 Total loans receivable $ 1,241,733 $ 5,177,826 $ 337,577 $ - $ 2,934,925 $ 7,642,669 $ 17,334,730 CECL reserve (397,835) Loans receivable, net $ 16,936,895 Gross charge-offs (2) - - - - (29,380) (45,691) $ (75,071) Net Book Value of Loans Receivable by Year of Origination (1) As of December 31, 2025 Risk Rating 2025 2024 2023 2022 2021 Prior Total 1 $ - $ - $ - $ 151,674 $ 98,329 $ 53,968 $ 303,971 2 792,802 61,068 - 586,066 1,265,922 170,012 2,875,870 3 4,335,677 $ 274,866 - 2,592,446 2,869,787 1,835,171 11,907,947 4 - - - 367,804 582,317 1,856,637 2,806,758 5 - - - - 31,700 142,888 174,588 Total loans receivable $ 5,128,479 $ 335,934 $ - $ 3,697,990 $ 4,848,055 $ 4,058,676 $ 18,069,134 CECL reserve (284,440) Loans receivable, net $ 17,784,694 Gross charge-offs (2) - - - (54,404) (214,796) (286,916) $ (556,116) Date loan was originated or acquired by us. Origination dates are subsequently updated to reflect material loan modifications. Represents charge-offs by year of origination during the six months ended June 30, 2026 and year ended December 31, 2025, respectively. Loan Modifications Pursuant to ASC 326 During the twelve months ended June 30, 2026, we entered into one loan modification that requires disclosure pursuant to ASC 326. This loan was collateralized by a life sciences/studio asset. The loan modification included a term extension of 4.3 years, the interest rate decreased by 3.56%, and the loan was bifurcated into a separate senior loan and subordinate loan. We are accruing all of the interest on the senior loan that is paying current, and deferring interest on the subordinate loan, which is paid-in-kind. As of June 30, 2026, the aggregate amortized cost basis of these loans was $122.3 million, or 0.7% of our aggregate loans receivable portfolio, with an aggregate $34.7 million of unfunded commitments. These loans were in compliance with their modified contractual terms as of June 30, 2026. This loan had a risk rating of "5" at the time of modification. The modification resulted in the bifurcation of the loan into separate senior and subordinate loans, or two loans in aggregate. As of June 30, 2026, the newly bifurcated senior loan had a risk rating of "4," and the newly bifurcated subordinate loan had a risk rating of "5," as collection of amounts due under the loan terms was doubtful. Loans with a risk rating of "3" and "4" are included in the determination of our general CECL reserve and loans with a risk rating of "5" are evaluated individually for an asset-specific CECL reserve. Loan modifications that allow the option to pay interest in-kind increase our potential economics and the size of our secured claim, as interest is capitalized and added to the outstanding principal balance for applicable loans. As of June 30, 2026, no income was recorded on our loans subsequent to determining that such loans were impaired and risk rated "5." OWNED REAL ESTATE, NET As of June 30, 2026 and December 31, 2025, we had 14 and 12 owned real estate assets, respectively. During the six months ended June 30, 2026, we acquired two owned real estate assets through foreclosure transactions with an aggregate acquisition price of $191.0 million. We allocated $128.8 million to building and building improvements, $51.6 million to land and land improvements, $4.8 million to acquired intangible assets, and $5.8 million to other components of the purchase price, including cash held in reserves at the time of acquisition. In aggregate, we charged off $76.2 million of CECL reserves relating to the loans that had previously been secured by these assets, as the loans' aggregate carrying value of $267.2 million at the time of the acquisitions exceeded the acquisition date fair value noted above. See Note 2 for further discussion of owned real estate assets. Acquisitions The acquisition of two owned real estate assets during the six months ended June 30, 2026 were accounted for as asset acquisitions under ASC 805, and we recognized the properties as owned real estate assets held for investment. The following table presents the owned real estate assets that were acquired during the six months ended June 30, 2026 ($ in thousands): Acquisition Date Location Property Type Acquisition Date Fair Value March 2026 San Francisco, CA Hospitality $ 41,082 June 2026 Dallas, TX Multifamily 149,906 $ 190,988 Dispositions During the six months ended June 30, 2026, we completed a partial sale of one owned real estate asset, a multifamily property located in San Antonio, TX. The carrying value of the asset at the time of disposition was $15.3 million, and we received net cash proceeds of $15.1 million, resulting in a net loss of $0.2 million, which is included in net loss on disposition of owned real estate on our consolidated statements of operations. The following table presents the assets and liabilities related to owned real estate held for investment included in our consolidated balance sheets ($ in thousands): June 30, 2026 December 31, 2025 Assets Building and building improvements $ 844,474 $ 708,097 Land and land improvements 507,719 461,585 Total $ 1,352,193 $ 1,169,682 Less: accumulated depreciation (55,204) (34,707) Owned real estate, net $ 1,296,989 $ 1,134,975 Intangible real estate assets $ 163,108 $ 161,690 Less: accumulated amortization (62,191) (44,601) Intangible real estate assets, net (1) $ 100,917 $ 117,089 Liabilities Intangible real estate liabilities $ 3,985 $ 3,985 Less: accumulated amortization (1,072) (570) Intangible real estate liabilities, net (2) $ 2,913 $ 3,415 Included within other assets on our consolidated balance sheets. Refer to Note 6 for further information. Included within other liabilities on our consolidated balance sheets. Refer to Note 6 for further information. Revenue and expenses from owned real estate consisted of the following ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Rental revenue $ 24,024 $ 16,207 $ 48,198 $ 30,541 Hospitality revenue 42,802 16,643 87,263 33,679 Other operating revenue 8,671 5,962 14,630 11,625 Revenue from owned real estate $ 75,497 $ 38,812 $ 150,091 $ 75,845 Operating expense $ 61,128 $ 31,089 $ 122,218 $ 61,177 Depreciation and amortization expense 20,312 16,707 41,197 32,921 Total expenses from owned real estate $ 81,440 $ 47,796 $ 163,415 $ 94,098 Loss from owned real estate $ (5,943) $ (8,984) $ (13,324) $ (18,253) The following table presents the undiscounted future minimum rents we expect to receive for our office properties as of June 30, 2026. Leases at our multifamily assets are short term, generally 12 months or less, and are therefore not included ($ in thousands): Future Minimum Rents 2026 (remaining) $ 63,269 2027 76,254 2028 65,912 2029 52,556 2030 45,884 Thereafter 132,503 Total $ 436,378 The following table presents the estimated future amortization of lease intangibles for thereafter as June 30, 2026 ($ in thousands): each of the next five years and In-place lease intangibles Above-market lease intangibles Below-market lease intangibles 2026 (remaining) $ 17,367 $ 2,991 $ (461) 2027 18,406 4,248 (769) 2028 13,119 3,408 (644) 2029 9,861 2,518 (491) 2030 7,382 2,165 (304) Thereafter 14,363 5,089 (244) Total $ 80,498 $ 20,419 $ (2,913) INVESTMENTS IN UNCONSOLIDATED ENTITIES As of June 30, 2026, we hold certain investments in unconsolidated entities that are accounted for under the equity method of accounting or the FVO, as our ownership interest in each entity does not meet the requirements for consolidation. Refer to Note 2 for further details. The following tables detail our investments in unconsolidated entities ($ in thousands): June 30, 2026 Investments in Unconsolidated Entities Number of Assets Ownership Interest Book Value Unconsolidated entities carried at historical cost Net Lease Joint Venture 306 (1) 75% $ 185,902 Total unconsolidated entities carried at historical cost 306 185,902 Unconsolidated entities carried at fair value Bank Loan Portfolio Joint Venture 457 (2) 35% (3) 99,834 Homebuilder Finance Joint Venture 33 (2) 45% 36,324 Total unconsolidated entities carried at fair value 490 136,158 Total 796 $ 322,060 Investments in Unconsolidated Entities Number of Assets December 31, 2025 Ownership Interest Book Value Unconsolidated entities carried at historical cost Net Lease Joint Venture 178 (1) 75% $ 106,478 Total unconsolidated entities carried at historical cost 178 106,478 Unconsolidated entities carried at fair value: Bank Loan Portfolio Joint Venture 533 (2) 35% (3) 111,010 Total unconsolidated entities carried at fair value: 533 111,010 Total 711 $ 217,488 The number of assets represents the number of commercial real estate properties. The number of assets represents the number of commercial mortgage loans held by each entity. Represents our aggregate ownership interest in our Bank Loan Portfolio Joint Venture, which owns an initial portfolio of commercial mortgage loans acquired during the three months ended June 30, 2025, in which we hold a 29% interest, and an additional portfolio acquired during the three months ended September 30, 2025, in which we hold a 50% interest. The following table details the activity related to our investments in unconsolidated entities during the six months ended June 30, 2026 ($ in thousands): Net Lease Joint Venture Bank Loan Portfolio Joint Venture Homebuilder Finance Joint Venture Total Balance as of December 31, 2025 $ 106,478 $ 111,010 $ - $ 217,488 Contributions 99,998 - 36,043 136,041 Distributions (22,413) (20,199) - (42,612) Income from unconsolidated entities (1) 649 9,023 281 9,953 Accumulated other comprehensive income 1,190 - - 1,190 Balance as of June 30, 2026 $ 185,902 $ 99,834 $ 36,324 $ 322,060 Includes our share of non-cash items such as (i) depreciation and amortization, and (ii) unrealized gains or losses recorded by unconsolidated entities. Our Net Lease Joint Venture and Bank Loan Portfolio Joint Venture have each entered into and may continue to enter into derivative agreements where we would be required to make payment for periodic or final settlement of derivative contracts if either our Net Lease Joint Venture or Bank Loan Portfolio Joint Venture, as applicable, is unable to fulfill its respective obligations. 6. OTHER ASSETS AND LIABILITIES Other Assets The following table details the components of our other assets ($ in thousands): June 30, 2026 December 31, 2025 Accrued interest receivable $ 136,161 $ 132,975 Real estate intangible assets, net 100,917 117,089 Debt securities, at fair value (1) 66,310 - Other real estate assets 51,890 42,153 Derivative assets 47,908 10,492 Accounts receivable and other assets (2) 5,883 56,848 Collateral deposited under derivative agreements 3,280 25,300 Loan portfolio payments held by servicer (3) 2,288 27,374 Prepaid expenses 628 1,032 Total $ 415,265 $ 413,263 Represents an investment in a significant risk transfer, or SRT, transaction with a UK financial institution structured as a credit-linked note, or the UK Bank Loan Portfolio SRT. The investment constitutes the first-loss tranche of a reference portfolio comprising a diversified, granular portfolio of low-leverage commercial real estate loans held by the UK financial institution. The SRT investment earns a floating-rate cash coupon of SONIA + 7.00%, which is recognized in interest and related income in our consolidated statements of operations. The investment is recorded at fair value, with changes in fair value recognized in other income, net in our consolidated statements of operations. As of June 30, 2026, no realized credit losses have been incurred with respect to the underlying reference loan portfolio. Includes $3.6 million and $55.5 million as of June 30, 2026 and December 31, 2025, respectively, of cash collateral held by our CLOs that was subsequently remitted by the trustee to repay a portion of the outstanding senior CLO securities, or that was subsequently reinvested by purchasing additional collateral into our CLOs. Primarily represents loan principal repayments held by our third-party loan servicers as of the balance sheet date that were remitted to us during the subsequent remittance cycle. Other Liabilities The following table details the components of our other liabilities ($ in thousands): June 30, 2026 December 31, 2025 Other real estate liabilities $ 133,697 $ 127,703 Accrued dividends payable 79,215 79,081 Accrued interest payable 60,100 58,871 Other secured debt (1) 38,386 39,475 Accrued management fees payable 14,641 16,434 Accounts payable and other liabilities 13,889 14,653 Current expected credit loss reserves for unfunded loan commitments (2) 12,610 11,617 Derivative liabilities 10,351 26,596 Debt repayments pending servicer remittance (3) 1,982 11,748 Total $ 364,871 $ 386,178 Represents financing on our retained investment in the European Loan Securitization. Refer to Note 8 for further information. Represents the CECL reserve related to our unfunded loan commitments. Represents pending transfers from our third-party loan servicer that were remitted to our banking counterparties during the subsequent remittance cycle. Current Expected Credit Loss Reserves for Unfunded Loan Commitments As of June 30, 2026, we had aggregate unfunded commitments of $1.1 billion related to 53 loans. The expected credit losses over the contractual period of our loans are impacted by our obligations to extend further credit through our unfunded loan commitments. See Note 2 for further discussion of the CECL reserves related to our unfunded loan commitments, and Note 21 for further discussion of our unfunded loan commitments. During the three months ended June 30, 2026, we recorded a decrease in the CECL reserves related to our unfunded loan commitments of $0.5 million, and during the six months ended June 30, 2026, we recorded an increase in the CECL reserves related to our unfunded loan commitments of $1.0 million, bringing our total unfunded loan commitments CECL reserve to $12.6 million as of June 30, 2026. During the three and six months ended June 30, 2025, we recorded increases in the CECL reserves related to our unfunded loan commitments of $1.2 million and $1.3 million, respectively, bringing our total unfunded loan commitments CECL reserve to $11.7 million as of June 30, 2025. SECURED DEBT, NET Our secured debt represents borrowings under our secured credit facilities. During the six months ended June 30, 2026, we closed $1.0 billion of new borrowings against $1.5 billion of collateral assets. The following table details our secured debt ($ in thousands): Secured Debt Borrowings Outstanding June 30, 2026 December 31, 2025 Secured cre...

View stock analysis, news, and events for Blackstone Mortgage Trust, Inc.