Apollo Commercial Real Estate Finance, Inc. (ARI)

CIK: 0001467760. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-10.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1467760. Latest filing source: 0001193125-26-044725.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-10. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001467760.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001467760.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-187094.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-04-28. Report date: 2026-03-31.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING INFORMATION

We make forward-looking statements herein and will make forward-looking statements in future filings with the SEC, press releases or other written or oral communications within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, it intends to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in our industry, real estate values, the debt securities markets or the general economy; the demand for commercial real estate loans; our business and investment strategy; our operating results; actions and initiatives of the U.S. government and governments outside of the United States, changes to government policies and the execution and impact of these actions, initiatives and policies; the state of the economy generally or in specific geographic regions; the impact of a shutdown of the U.S. federal government; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements, including secured debt arrangements and securitizations; the timing and amount of expected future fundings of unfunded commitments; the availability of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; expected leverage; general volatility of the securities markets in which we participate; changes in the value of our assets; the scope of our target assets; interest rate mismatches between our target assets and any borrowings used to fund such assets; changes in interest rates and the market value of our target assets; changes in prepayment rates on our target assets; effects of hedging instruments on our target assets; rates of default or decreased recovery rates on our target assets; the degree to which hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting, legal or regulatory issues or guidance and similar matters; our continued maintenance of our qualification as a REIT for U.S. federal income tax purposes; our continued exclusion from registration under the Investment Company Act of 1940, as amended (the "1940 Act"); the availability of opportunities to acquire commercial mortgage-related, real estate-related and other securities; the availability of qualified personnel; estimates relating to our ability to make distributions to our stockholders in the future; our present and potential future competition; unexpected costs or unexpected liabilities, including those related to litigation; potential benefits and effects of the Asset Sale; and the amount and use of proceeds from the Asset Sale.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. See Item 1A. "Risk Factors" and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our most recent Annual Report on Form 10-K. These and other risks, uncertainties and factors, including those described in the annual, quarterly and current reports that we file with the SEC, could cause our actual results to differ materially from those included in any forward-looking statements we make. All forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a Maryland corporation and have elected to be taxed as a REIT for U.S. federal income tax purposes. We primarily originate, acquire, invest in and manage performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $938.4 billion as of December 31, 2025.

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The Manager is led by an experienced team of senior real estate professionals who have significant expertise in underwriting and structuring commercial real estate financing transactions. We benefit from Apollo's global infrastructure and operating platform, through which we are able to source, evaluate and manage potential investments in our target assets.

The Asset Sale

On the Closing Date, pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company sold its commercial real estate loan portfolio (other than loans that were repaid prior to closing and one loan with a principal balance of $46 million which is expected to repay after the Closing Date) to Athene for cash consideration of approximately $8.6 billion, which is based on 99.7% of the total commitment amount of such loans as of the Closing Date, subject to certain adjustments as provided in the Purchase Agreement. Please refer to "Note 20 - Subsequent Events" to the accompanying consolidated financial statements for further details.

Current Market Conditions

Certain external events such as public health issues, natural disasters, political and economic instability abroad, concerns regarding the stability of the sovereign debt of certain European countries, and other geopolitical issues, have adversely impacted the global economy and have contributed to significant volatility in financial markets. Due to various uncertainties caused by such external events and recent macroeconomic trends, including inflation and higher interest rates, further business risks could arise. Some of the factors that impacted us to date and may continue to affect us are outlined in Item 1A. "Risk Factors" in our most recent Annual Report on Form 10-K.

40

Results of Operations

Net Income Available to Common Stockholders

For the three months ended March 31, 2026 and 2025, our net income available to common stockholders was $23.2 million, or $0.16 per diluted share of common stock, and $22.9 million, or $0.16 per diluted share of common stock, respectively.

Operating Results

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics compared to the most recently reported period ($ in thousands):

Three Months Ended

March 31, 2026

December 31, 2025

Change

Net interest income:

Interest income from commercial mortgage loans

$

149,989

$

159,500

$

(9,511

)

Interest income from subordinate loans and other lending assets

—

88

(88

)

Interest expense

(113,922

)

(115,486

)

1,564

Net interest income

36,067

44,102

(8,035

)

Operations related to real estate owned:

Revenue from real estate owned operations

22,567

29,150

(6,583

)

Operating expenses related to real estate owned

(18,218

)

(23,882

)

5,664

Depreciation and amortization on real estate owned

(3,981

)

(3,403

)

(578

)

Net income related to real estate owned

368

1,865

(1,497

)

Operating expenses:

General and administrative expenses

(5,952

)

(7,546

)

1,594

Management fees to related party

(8,118

)

(8,608

)

490

Total operating expenses

(14,070

)

(16,154

)

2,084

Other income, net

1,413

1,658

(245

)

Loss from equity method investment

(274

)

(254

)

(20

)

Increase in Specific CECL Allowance, net

—

(3,000

)

3,000

Decrease in General CECL Allowance, net

3,289

526

2,763

Gain (loss) on foreign currency forward contracts

16,812

(1,839

)

18,651

Foreign currency translation gain (loss)

(17,148

)

2,160

(19,308

)

Net income before taxes

$

26,457

$

29,064

$

(2,607

)

Income tax provision

(230

)

135

(365

)

Net income

$

26,227

$

29,199

$

(2,972

)

Net Interest Income

Net interest income decreased by $8.0 million during the three months ended March 31, 2026 compared to the three months ended December 31, 2025. The net decrease was primarily attributable to lower average index rates during the three months ended March 31, 2026 compared to the three months ended December 31, 2025. Additionally, our commercial mortgage loan secured by a hotel in Chicago, IL was moved to nonaccrual status as of December 31, 2025, and no interest income was recorded on this loan during the three months ended March 31, 2026. Lastly, modifications to several of our loans resulted in interest rate decreases and further decreased interest income. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Operations Related to Real Estate Owned

For the three months ended March 31, 2026, we recorded net income related to real estate owned of $0.4 million compared to net income of $1.9 million for the three months ended December 31, 2025. The decrease in net income was primarily due to the seasonality of hotel operations, which led to $2.1 million and $0.5 million lower net income from operations, prior to depreciation, for the D.C. Hotel and the Atlanta Hotel, respectively, during the three months ended March 31, 2026 as compared

41

to the three months ended December 31, 2025. The decrease was partially offset by an increase in operating income attributable to our Brooklyn Multifamily Development as the lease-up of the property continues to ramp up. Refer to "Note 5 – Real Estate Owned" for further discussion of operations related to real estate owned. at

Operating Expenses

General and administrative expenses decreased by $1.6 million for the three months ended March 31, 2026 compared to the three months ended December 31, 2025. The decrease was primarily attributable to lower amortization of RSUs in the current quarter compared to prior quarter. Additionally, there were higher costs associated with reimbursements to the Manager and legal expenses during the three months ended December 31, 2025.

Management fees expense decreased by $0.5 million for the three months ended March 31, 2026 compared to the three months ended December 31, 2025. The decrease was primarily due to lower Stockholders' Equity (as defined in the Management Agreement) during the three months ended March 31, 2026.

Increase in Specific CECL Allowance, net

During the three months ended March 31, 2026, there was no change to our Specific CECL Allowance. Comparatively, during the three months ended December 31, 2025, our Specific CECL Allowance increased by $3.0 million related to a commercial mortgage loan secured by a hotel in Chicago, IL.

Decrease in General CECL Allowance, net

Our General CECL Allowance decreased by $3.3 million during the three months ended March 31, 20

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-10. Report date: 2025-12-31.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our financial statements and accompanying notes included in Item 8. "Financial Statements and Supplementary Data" of this annual report on Form 10-K.

Overview

We are a Maryland corporation and have elected to be taxed as a REIT for U.S. federal income tax purposes. We primarily originate, acquire, invest in and manage performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $938.4 billion as of December 31, 2025.

The Manager is led by an experienced team of senior real estate professionals who have significant expertise in underwriting and structuring commercial real estate financing transactions. We benefit from Apollo's global infrastructure and operating platform, through which we are able to source, evaluate and manage potential investments in our target assets.

Proposed Transactions with Athene

On January 27, 2026, we entered into the Purchase Agreement with Athene. In connection with the Asset Sale, we also entered into the Management Agreement Side Letter with Operating LLC and the Manager, and the Expense Reimbursement Letter Agreement with Apollo Management Holdings. The Company is externally managed and advised by the Manager, which is a subsidiary of Apollo, and each of Athene and Apollo Management Holdings is a subsidiary of Apollo. The Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Purchase Agreement, Athene will purchase from the Company, and the Company will sell to Athene, the Loans as of the Closing, other than two loans with a combined total principal balance of $146 million, as of December 31, 2025, currently held by the Company which are expected to be repaid prior to the Closing. Refer to "Note 20 - Subsequent Events" to the accompanying consolidated financial statements for further detail.

Current Market Conditions

Certain external events such as public health issues, natural disasters, political and economic instability abroad, concerns regarding the stability of the sovereign debt of certain European countries, and other geopolitical issues, have adversely impacted the global economy and have contributed to significant volatility in financial markets. Due to various uncertainties caused by such external events and recent macroeconomic trends, including inflation and higher interest rates, further business risks could arise. Some of the factors that impacted us to date and may continue to affect us are outlined in Item 1A. "Risk Factors".

Results of Operations

Our results of operations discuss fiscal years ended December 31, 2025 and 2024 items and year-to-year comparisons between fiscal years ended December 31, 2025 and 2024. Discussions of prior period items and year-to-year comparisons between fiscal years ended December 31, 2024 and 2023 can be found in our "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended December 31, 2024.

Net Income (Loss) Available to Common Stockholders

For the years ended December 31, 2025 and 2024, our net income (loss) available to common stockholders was $114.4 million, or $0.81 per diluted share of common stock, and ($131.9) million, or ($0.97) per diluted share of common stock, respectively.

45

Operating Results

The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the years ended December 31, 2025 and 2024 ($ in thousands):

Year ended

December 31, 2025

December 31, 2024

Change

Net interest income:

Interest income from commercial mortgage loans

$

625,493

$

699,389

$

(73,896

)

Interest income from subordinate loans and other lending assets

1,288

3,542

(2,254

)

Interest expense

(460,089

)

(503,949

)

43,860

Net interest income

166,692

198,982

(32,290

)

Operations related to real estate owned:

Revenue from real estate owned operations

104,897

104,689

208

Operating expenses related to real estate owned

(85,213

)

(81,683

)

(3,530

)

Depreciation and amortization on real estate owned

(11,173

)

(11,668

)

495

Net income related to real estate owned

8,511

11,338

(2,827

)

Operating expenses:

General and administrative expenses

(27,410

)

(29,649

)

2,239

Management fees to related party

(34,165

)

(36,120

)

1,955

Total operating expenses

(61,575

)

(65,769

)

4,194

Other income, net

7,872

4,498

3,374

Income from equity method investment

15,413

—

15,413

Net realized loss on investments

(7,436

)

(128,191

)

120,755

Decrease (increase) in Specific CECL Allowance

4,500

(149,500

)

154,000

Increase in General CECL Allowance, net

(7,729

)

(6,284

)

(1,445

)

Gain (loss) on foreign currency forward contracts

(98,703

)

52,590

(151,293

)

Foreign currency translation gain (loss)

99,483

(37,476

)

136,959

Gain on interest rate hedging instruments

23

570

(547

)

Net income (loss) before taxes

$

127,051

$

(119,242

)

$

246,293

Income tax provision

(331

)

(394

)

63

Net income (loss)

$

126,720

$

(119,636

)

$

246,356

Net Interest Income

Net interest income decreased by $32.3 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily attributable to lower average index rates during the year ended December 31, 2025, realization of a loss on investment during the third quarter of 2024 and modification of two of our commercial mortgage loans converting them from floating rate loans to fixed rate loans during the second quarter of 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Operations Related to Real Estate Owned

For the year ended December 31, 2025, we recorded net income related to real estate owned of $8.5 million, compared to net income of $11.3 million for the year ended December 31, 2024. The decrease in net income is primarily due to an increase in operating expenses related to the Brooklyn Multifamily Development, as the property reached substantial completion during the second half of 2025 and the lease-up of the property continues to ramp up. We recorded a net loss from the property's operations of $1.3 million during the year ended December 31, 2025. There was no such activity during the year ended December 31, 2024 as the property was still under construction with no revenue streams generated and all expenses being capitalized. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.

46

Operating Expenses

General and administrative expenses decreased by $2.2 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in amortization of RSUs.

Management fees expense decreased by $2.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a decrease in Stockholders' Equity (as defined in the Management Agreement) during the year ended December 31, 2025.

Income from Equity Method Investment

During the year ended December 31, 2025, we recorded net income from equity method investment of $15.4 million. The increase in net income attributable to the Massachusetts Healthcare JV was due to a $17.4 million net gain on litigation settlement recorded during the year ended December 31, 2025. This income was partially offset with a net loss from operations of the Massachusetts Healthcare JV during the year ended December 31, 2025. There was no such activity during the year ended December 31, 2024, as the Massachusetts Healthcare JV did not take title of the two hospitals until the first quarter of 2025.

Refer to "Note 6 – Other Assets" and "Note 16 – Commitments and Contingencies" for additional information.

Net Realized loss on Investments

During the year ended December 31, 2025, we recorded a $7.4 million net realized loss on investments, consisting of (i) a $1.2 million realized loss on the sale of a promissory note previously recorded as Note receivable, held for sale and (ii) a $6.2 million realized loss related to the discounted payoff of the Michigan Office Loan.

Comparatively, during the year ended December 31, 2024, we recorded a $128.2 million net realized loss on investments, consisting of (i) a $127.5 million realized loss related to the extinguishment of the Massachusetts Healthcare Loan, and (ii) a $0.7 million realized loss related to the sale of a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI.

Refer to "Note 3 – Fair Value Disclosure" and "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Decrease (increase) in Specific CECL Allowance, net

During the year ended December 31, 2025, we recorded a net decrease in our Specific CECL Allowance of $4.5 million. This amount consisted of: (i) a $1.3 million reversal and a $6.2 million write-off of our allowance related to the discounted payoff of our Michigan Office Loan; and (ii) a $3.0 million allowance on a commercial mortgage loan secured by a hotel in Chicago, IL.

Comparatively, during the year ended December 31, 2024, we recorded a net increase in our Specific CECL Allowance of $149.5 million related to two of our subordinate loans. This amount consisted of: (i) a $142.0 million allowance recorded in the first quarter of 2024 for a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY; and (ii) a $7.5 million allowance recorded during the second quarter of 2024 for the Michigan Office Loan. Additionally, we recorded an increase and subsequent write-off of $127.5 million of our Specific CECL Allowance related to the Massachusetts Healthcare Loan. The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our December 31, 2024 consolidated statement of operations.

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 6 – Other Assets" for additional detail.

47

Increase in General CECL Allowance, net

The General CECL Allowance increased by $7.7 million and $6.3 million during the years ended December 31, 2025 and 2024, respectively. The increases were primarily related to loan originations and the impacts of extending our expected loan repayment dates.

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Foreign currency translation gain and loss on derivative instruments

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the years ended December 31, 2025 and 2024 were net gains of $0.8 million and $15.1 million, respectively. The decrease in the net gain for the year ended December 31, 2025 compared to the year ended December 31, 2024 was predominantly due to higher forward point estimates for the year ended December 31, 2025.

Subsequent Events

Refer to "Note 20 – Subsequent Events" to the accompanying consolidated financial statements for disclosure regarding significant transactions that occurred subsequent to December 31, 2025.

Non-GAAP Financial Measures

Distributable Earnings

Distributable Earnings, a non-GAAP financial measure, is defined as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on our foreign currency hedges, and (v) provision for current expected credit losses. Distributable Earnings may also be adjusted to exclude certain other non-cash items, as determined by the Manager and approved by a majority of our independent directors.

A significant limitation associated with Distributable Earnings as a measure of our financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, our presentation of Distributable Earnings may not be comparable to similarly-titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for our GAAP net income as a measure of our financial performance or any measure of our liquidity under GAAP. Distributable Earnings are reduced for realized losses and increased for realized gains.

For the year ended December 31, 2025, our Distributable Earnings were $148.7 million, or $1.05 per share, as compared to $61.3 million, or $0.43 per share for the prior year.

The table below summarizes the reconciliation from weighted-average diluted shares under GAAP to the weighted-average diluted shares used for Distributable Earnings:

Year Ended December 31,

2025

2024

Weighted-Averages

Shares

Shares

Diluted shares - GAAP

138,868,602

139,674,140

Unvested RSUs, net(1)

2,334,215

2,601,703

Diluted shares - Distributable Earnings

141,202,817

142,275,843

(1)
Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were no incremental shares included in the years ended December 31, 2025 and 2024

48

As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons stockholders invest in a REIT, we generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Distributable Earnings is a key factor considered by the board of directors in setting the dividend and as such we believe Distributable Earnings is useful to investors.

Distributable Earnings Prior to Realized Loss on Investments and Realized Gain from Litigation Settlement

We believe it is useful to our investors to present Distributable Earnings prior to realized loss on investments and realized gain from litigation settlement to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized gain from litigation settlement, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.

During the year ended December 31, 2025, we recorded a realized loss on investments of $7.4 million consisting of (i) a $1.2 million realized loss on the sale of a promissory note previously recorded as Note receivable, held for sale and (ii) a $6.2 million realized loss related to the discounted payoff of the Michigan Office Loan. We also recorded a realized gain of $17.4 million within Income from equity method investment on our consolidated statement of operations from a litigation settlement with the Commonwealth of Massachusetts relating to the Massachusetts Healthcare Loan. Refer to "Note 3 – Fair Value Disclosure," "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net," "Note 6 – Other Assets" and "Note 16 – Commitments and Contingencies" for further discussion.

During the year ended December 31, 2024, we recorded a realized loss on investments of $128.2 million consisting of (i) a $127.5 million realized loss related to the Massachusetts Healthcare Loan and (ii) a $0.7 million realized loss on the sale of a commercial mortgage loan. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 6 – Other Assets" for further discussion.

Accordingly, the table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized gain on litigation settlement ($ in thousands):

49

Year Ended December 31,

2025

2024

Net income (loss) available to common stockholders

$

114,448

$

(131,908

)

Adjustments:

Equity-based compensation expense

13,631

16,468

Loss (gain) on foreign currency forwards

98,703

(52,590

)

Foreign currency loss (gain), net

(99,483

)

37,476

Unrealized loss on interest rate cap

379

1,373

Realized gains relating to interest income on foreign currency hedges, net

524

4,054

Realized gains relating to forward points on foreign currency hedges, net

6,091

18,991

Depreciation and amortization on real estate owned

11,173

11,668

Increase (decrease) in current expected credit loss allowance, net

3,229

155,784

Realized loss on investments

7,436

128,191

Realized gain on litigation settlement

(17,394

)

—

Total adjustments:

24,289

321,415

Distributable Earnings prior to realized loss on investments and realized gain on litigation settlement

$

138,737

$

189,507

Realized loss on investments

$

(7,436

)

$

(128,191

)

Realized gain on litigation settlement

17,394

—

Distributable Earnings

$

148,695

$

61,316

Diluted Distributable Earnings per share prior to realized loss on investments and realized gain on litigation settlement

$

0.98

$

1.33

Diluted Distributable Earnings per share of common stock

$

1.05

$

0.43

Weighted-average diluted shares - Distributable Earnings

141,202,817

142,275,843

Book Value Per Share

The following table calculates our book value per share ($ in thousands, except per share data):

December 31, 2025

December 31, 2024

Stockholders' Equity

$

1,856,090

$

1,874,481

Series B-1 Preferred Stock (Liquidation Preference)

(169,260

)

(169,260

)

Common Stockholders' Equity

$

1,686,830

$

1,705,221

Common Stock

138,943,831

138,174,636

Book value per share

$

12.14

$

12.34

Investment Guidelines

Our current investment guidelines, approved by our board of directors, are comprised of the following:

1.
no investment will be made that would cause us to fail to qualify as a REIT for U.S. federal income tax purposes;

2.
no investment will be made that would cause us to register as an investment company under the 1940 Act;

3.
investments will be predominantly in our target assets;

4.
no more than 20% of our net equity (on a consolidated basis) will be invested in any single investment at the time of the investment; in determining compliance with the investment guidelines, the amount of the investment is the net equity in the investment (gross investment less amount of third-party financing) plus the amount of any recourse on the financing secured by the investment; and

5.
until appropriate investments can be identified, the Manager may invest the proceeds of any offering in interest bearing, short-term investments, including money market accounts and/or funds, that are consistent with our intention to qualify as a REIT.

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The board of directors must approve any change in or waiver to these investment guidelines.

Investment Activity

During the year ended December 31, 2025, we committed $4.4 billion of capital to new loans ($3.3 billion was funded at closing), and provided $899.4 million of add-on fundings. During the year ended December 31, 2025, we received $2.9 billion in repayments and sales of loans and other lending assets.

Loan Portfolio Overview

Loan Portfolio Details

The following table sets forth certain information regarding our loan portfolio as of December 31, 2025 ($ in thousands):

Description

Carrying Value

Weighted-Average Coupon (1)

Weighted-Average All-in Yield (1)(2)

Secured Debt Arrangements (3)

Cost of Funds(4)

Equity at cost(5)

Commercial mortgage loans, net

$

8,712,018

6.6

%

7.4

%

$

6,277,226

5.5

%

$

2,434,792

Subordinate loans, net

62,198

0.0

%

0.0

%

—

—

62,198

Total/Weighted-Average

$

8,774,216

6.5

%

7.3

%

$

6,277,226

5.5

%

$

2,496,990

(1)
Weighted-Average Coupon and Weighted-Average All-in Yield are based on the applicable benchmark rates as of December 31, 2025 on the floating rate loans.

(2)
Weighted-Average All-in Yield includes the amortization of deferred origination fees, loan origination costs and accrual of both extension and exit fees. Weighted-Average All-in Yield excludes the benefit of forward points on currency hedges relating to loans denominated in currencies other than USD.

(3)
Gross of deferred financing costs of $8.7 million.

(4)
Cost of funds includes weighted-average spread and applicable benchmark rates as of December 31, 2025 on secured debt arrangements.

(5)
Represents loan portfolio at carrying value less secured debt outstanding.

51

The following table provides additional details of our commercial mortgage loan portfolio and subordinate loan portfolio as of December 31, 2025 ($ in millions):

Commercial Mortgage Loan Portfolio

#

Property Type

Risk Rating

Origination Date

Amortized Cost

Unfunded Commitment

Construction

Loan

3rd Party Subordinate Debt

Fully-extended Maturity

Location

1

Residential

3

12/2021

$

247

$

9

02/2027

Various, UK

2

Residential

3

08/2025

237

15

09/2030

Various, US

3

Residential

3

11/2025

225

22

Y

11/2030

Manhattan, NY

4

Residential

3

08/2024

157

—

08/2029

Various, UK

5

Residential

3

04/2024

157

—

05/2029

Emeryville, CA

6

Residential

3

04/2025

153

—

04/2030

Various, US

7

Residential

3

04/2025

148

—

05/2030

Jersey City, NJ

8

Residential

3

09/2025

141

42

Y

09/2030

Charlotte, NC

9

Residential

3

03/2025

130

2

Y

04/2029

Port St. Lucie, FL

10

Residential(2)

3

08/2022

112

—

11/2026

Manhattan, NY

11

Residential

3

10/2024

103

—

11/2029

Various, US

12

Residential

3

06/2024

99

—

07/2029

Washington, DC

13

Residential

3

08/2025

92

13

08/2030

Various, UK

14

Residential

3

02/2025

89

—

Y

02/2030

Miami, FL

15

Residential

3

05/2021

76

—

05/2027

Cleveland, OH

16

Residential

3

05/2025

64

—

Y

05/2030

Manhattan, NY

17

Residential

3

02/2025

22

—

02/2027

Miami, FL

18

Office

2

02/2022

656

84

Y

12/2028

London, UK

19

Office(3)

3

12/2025

267

79

Y

12/2030

Manhattan, NY

20

Office

3

06/2019

241

32

06/2030

Berlin, Germany

21

Office

3

01/2020

230

23

Y

03/2028

Long Island City, NY

22

Office

3

02/2020

210

63

Y

03/2028

London, UK

23

Office

3

02/2022

174

—

06/2027

Milan, Italy

24

Office

3

11/2022

100

—

09/2026

Chicago, IL

25

Office

4

03/2018

73

—

Y

09/2027

Chicago, IL

26

Hotel

3

12/2023

340

15

12/2030

Various, Europe

27

Hotel

3

10/2025

229

14

Y

10/2028

London, UK

28

Hotel

3

07/2021

180

—

08/2026

Various, US

29

Hotel

3

09/2025

149

—

10/2030

Manhattan, NY

30

Hotel

3

09/2015

139

—

12/2026

Manhattan, NY

31

Hotel

3

06/2024

131

—

06/2029

St. Petersburg, FL

32

Hotel

3

08/2025

123

4

Y

09/2030

San Diego, CA

33

Hotel

3

06/2024

110

5

07/2029

Brooklyn, NY

34

Hotel

3

11/2021

87

—

12/2026

St. Thomas, USVI

35

Hotel

3

12/2024

84

2

Y

01/2030

Indianapolis, IN

36

Hotel

3

12/2025

82

—

04/2027

Manhattan, NY

37

Hotel

3

12/2024

75

—

Y

12/2029

New Orleans, LA

38

Hotel(1)

5

05/2019

43

—

02/2026

Chicago, IL

39

Industrial

3

03/2021

261

—

05/2027

Various, Sweden

40

Industrial

3

04/2025

244

4

05/2030

Various, US

41

Industrial

3

08/2024

204

20

08/2029

Various, UK

42

Industrial

3

11/2025

181

27

12/2030

Various, US

43

Industrial

3

08/2025

80

53

08/2030

Various, Europe

44

Data Center

3

03/2025

208

91

Y

Y

02/2030

West Jordan, UT

45

Data Center

3

05/2025

194

203

Y

06/2030

Abilene, TX

46

Data Center

3

04/2025

158

—

02/2029

Slough, UK

47

Retail

3

12/2024

199

142

07/2030

London, UK

48

Retail(1)

5

11/2014

96

—

09/2026

Cincinnati, OH

49

Mixed Use

3

03/2022

154

14

03/2029

Brooklyn, NY

50

Mixed Use

3

05/2025

148

—

05/2027

London, UK

51

Urban Predevelopment

3

12/2022

135

—

02/2026

Miami, FL

52

Urban Predevelopment

3

10/2025

94

50

11/2030

Miami, FL

53

Pubs

3

12/2023

220

—

Y

01/2029

Various, UK

54

Portfolio(4)

3

06/2021

200

10

06/2027

Various, Germany

General CECL Allowance

(39

)

Subtotal / Weighted-Average Commercial Mortgage Loans

3.0

$

8,712

$

1,038

3.2 Years

52

Subordinate Loan Portfolio

#

Property Type

Risk Rating

Origination Date

Amortized Cost

Unfunded Commitment

Construction

Loan

3rd Party Subordinate Debt

Fully-extended Maturity

Location

1

Residential(2)

3

06/2015

$

34

—

11/2026

Manhattan, NY

2

Residential(1)(2)

5

05/2020

28

—

11/2026

Manhattan, NY

General CECL Allowance

—

Subtotal / Weighted-Average Subordinate Loans

3.9

$

62

$

—

0.8 Years

Total / Weighted-Average

Loan Portfolio(5)

3.0

$

8,774

$

1,038

3.2 Years

(1)
Amortized cost for these loans is net of the recorded Specific CECL Allowance.

(2)
Loans are secured by the same property.

(3)
Modified loan treated as a new origination for accounting purposes.

(4)
Includes portfolio of office, industrial, and retail property types.

(5)
Total may not foot due to rounding.

Our average asset and debt balances for the year ended December 31, 2025 were ($ in thousands):

Average month-end balances(1)

Description

Assets

Related debt

Commercial mortgage loans

$

8,123,042

$

5,786,418

Subordinate loans

513,006

—

Note receivable, held for sale

20,600

—

(1)
Average month-end balances reflect principal and borrowings outstanding for assets and related debt, respectively.

Portfolio Management

Our portfolio benefits from our core investment strategy whereby we target assets that are secured by institutional quality real estate throughout the United States and Europe. As discussed in Item 1. "Business—Investment Strategy" of this annual report on Form 10-K, the Manager has implemented underwriting standards which place a particular emphasis on due diligence of prospective investments' sponsors and borrowers, as well as assessment of the risk/return profile and appropriate structure of each investment opportunity. As of December 31, 2025, our portfolio's weighted-average origination loan to value ("LTV") ratio was 59%, excluding risk-rated "5" loans. This reflects significant equity value which we believe our loan sponsors would be committed to protect during periods of volatility and market disruption.

We maintain a strong relationship with our borrowers and actively manage the assets in our portfolio on an ongoing basis. A dedicated team of asset management professionals performs surveillance of all loans in our portfolio, on an individual basis, from closing through final repayment. This robust monitoring process includes continuous assessment of asset level performance against underwritten criteria, changes in borrowers' financial position, as well as the impact of macroeconomic trends and microeconomic developments on loan assets and respective underlying collateral performance.

In addition to ongoing asset management, as further described in "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" to our consolidated financial statements, we perform a quarterly review of our portfolio whereby each loan is assigned a risk rating of "1" through "5," from less risk to greater risk, respectively. This analysis includes assessment of loans based on a variety of factors, including, without limitation, LTV ratio, 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. In performing the analysis with respect to each loan, these various factors are assessed holistically, with a focus on their interplay, whereby no single factor on its own (whether quantitative or qualitative) is given more weight in the assessment or is prescriptive as to which specific risk rating is assigned to a specific loan. We apply these various factors on a

53

case-by-case basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations. As of December 31, 2025, the weighted-average risk rating of the loan portfolio was 3.0.

The following table presents the carrying value of our loans by internal risk rating as of December 31, 2025 ($ in thousands):

Risk Rating

Number of Loans

Total(1)

% of Portfolio

1

—

$

—

— %

2

1

654,594

7.4

%

3

51

7,918,714

89.9

%

4

1

73,112

0.8

%

5

3

166,550

1.9

%

Total

56

$

8,812,970

100.0

%

General CECL Allowance(2)

(38,754

)

Total carrying value, net

$

8,774,216

(1)
Net of Specific CECL Allowance.

(2)
$5.8 million of the General CECL Allowance for 2025 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our consolidated balance sheets.

Leverage Policies

We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements, senior secured notes and senior secured term loan, we access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our company.

At December 31, 2025, our debt-to-equity ratio was 4.1 and our portfolio was comprised of $8.7 billion of commercial mortgage loans and $0.1 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.

Debt-to-Equity Ratio

The following table presents our debt-to-equity ratio:

December 31, 2025

December 31, 2024

Debt to Equity Ratio (1)

4.1

3.2

(1)
Represents total debt less cash and net loan proceeds held by servicer (recorded with Other Assets, see "Note 6 – Other Assets" for more information) to total stockholders' equity.

Contractual Obligations, Liquidity, and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to fund and maintain our assets and operations, repay borrowings, make distributions to our stockholders and other general business needs. We utilize various sources of cash in order to meet our liquidity needs in the next twelve months, which is considered the short-term, and the longer term.

Our current debt obligations consist of $1.2 billion, at face value, of corporate debt, $6.3 billion of secured debt arrangements, and $425.8 million of debt related to real estate owned, held for investment. Our corporate debt includes $746.3 million of term loan borrowings and $500.0 million of senior secured notes. Our secured debt arrangements are generally term-matched to the underlying loans, and we anticipate repayments of $0.7 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.

In addition to our debt obligations, as of December 31, 2025, we had $1.0 billion of unfunded loan commitments. We expect that approximately $590.9 million will be funded to existing borrowers in the short term.

54

Our primary sources of liquidity as of December 31, 2025 were represented with $139.8 million of cash on hand, $4.2 million of loan proceeds held by servicer, $6.9 million of available borrowings under our financing arrangements based on existing collateral and cash flows from operations. Additionally, as of December 31, 2025, we held approximately $431.1 million of unencumbered assets and have $36.3 million of additional capacity on our construction financing secured by our Brooklyn Multifamily Development property which is available to fund future construction costs.

We maintain policies relating to our use of leverage. See "Leverage Policies" above. In the future, we may seek to raise further equity or debt capital or engage in other forms of borrowings in order to fund future investments or to refinance expiring indebtedness.

We generally intend to hold our assets for investment, although we may sell certain of our investments in order to manage our interest rate risk and liquidity needs, meet other operating objectives and adapt to market conditions.

To maintain our qualification as a REIT under the Internal Revenue Code, we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. These distribution requirements limit our ability to retain earnings and replenish or increase capital for operations.

Borrowings Under Various Financing Arrangements

The following table summarizes the outstanding balances and maturities for our various financing arrangements:

December 31, 2025

December 31, 2024

Borrowings Outstanding(1)

Maturity (2)

Borrowings Outstanding(1)

Maturity (2)

Secured Credit Facilities(3)

$

4,733,301

November 2029

$

3,235,982

November 2026

Barclays Private Securitization(4)

1,543,925

January 2028

1,587,780

May 2027

Revolving Credit Facility

—

August 2028

—

March 2026

Total Secured Debt Arrangements

6,277,226

4,823,762

Debt Related to Real Estate Owned

425,799

July 2027

327,662

July 2027

Senior Secured Term Loans(5)

746,250

June 2030

761,250

January 2027

Senior Secured Notes

500,000

June 2029

500,000

June 2029

Total Borrowings

$

7,949,275

$

6,412,674

(1)
Borrowings Outstanding represent principal balances as of the respective reporting periods.

(2)
Maturity dates represent weighted-average maturities based on borrowings outstanding and assumes extensions at our option are exercised with consent of financing providers, where applicable.

(3)
As of December 31, 2025, we had six secured credit counterparties through wholly-owned subsidiaries.

(4)
As of December 31, 2025, we had £698.3 million, €335.1 million, and kr1.9 billion ($1.5 billion assuming conversion into USD as of December 31, 2025) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.

(5)
As of December 31, 2025, we held one senior secured term loan, our 2030 Term Loan, which represents the refinancing of our 2026 and 2028 Term Loans that were outstanding as of December 31, 2024. Refer to "Note 8 – Senior Secured Term Loans, Net" for discussion of the refinance.

Refer to "Note 7 – Secured Debt Arrangements, Net" of our consolidated financial statements for additional disclosure regarding our secured credit facilities, Barclays Private Securitization, and revolving credit facility.

Refer to "Note 8 – Senior Secured Term Loans, Net" and "Note 9 – Senior Secured Notes, Net" of our consolidated financial statements for additional disclosure regarding our Senior Secured Term Loans and Senior Secured Notes, respectively.

Refer to "Note 5 – Real Estate Owned" of our consolidated financial statements for additional disclosure regarding our debt related to real estate owned.

Dividends

We intend to continue to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. We generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Any distributions we make are

55

at the discretion of our board of directors and depend upon, among other things, our actual results of operations. These results and our ability to pay distributions are affected by various factors, including the net interest and other income from our portfolio, our operating expenses and any other expenditures. If our cash available for distribution is less than our net taxable income, we could be required to sell assets or borrow funds to make cash distributions or we may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.

As of December 31, 2025 and December 31, 2024, we had 6,770,393 shares of our Series B-1 Preferred Stock outstanding. The Series B-1 Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: at a rate of 7.25% per annum of the $25.00 per share liquidation preference. Except under certain limited circumstances, the Series B-1 Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. On and after July 15, 2026, we may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid dividends to, but not including, the date of the redemption.

The following table details our dividend activity:

Year Ended December 31,

Dividends declared per share of:

2025

2024

Common Stock

$

1.00

$

1.20

Series B-1 Preferred Stock

$

1.81

$

1.81

Critical Accounting Policies and Use of Estimates

Our financial statements are prepared in accordance with GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and use of assumptions as to future uncertainties. The most critical accounting policies involve decisions and assessments that affect our reported assets and liabilities, as well as reported revenues and expenses. We believe that all of the decisions and assessments upon which these financial statements are based are reasonable based upon information currently available to us. The accounting policies and estimates that we consider to be most critical to an investor's understanding of our financial results and condition and require complex management judgment are discussed below.

There have been no material changes to our Critical Accounting Policies described under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Use of Estimates."

For a complete listing and description of our significant accounting policies, refer to "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements.

Real Estate Owned (and Related Debt)

In order to maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or deed-in-lieu of foreclosure. Foreclosed properties are classified as real estate owned and recognized at fair value on our consolidated balance sheets in accordance with the acquisition method under ASC 805. Real estate assets acquired may include land, building, FF&E, and intangible assets. In accordance ASC 820, we may utilize the income, market, or cost approach (or combination thereof) to determine fair value.

When determining the fair value of a real estate asset under the income approach, we make certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon our estimate of a capitalization rate and discount rate.

When determining the fair value of real estate assets under the market or sales comparison approach, we compare the property to similar properties in the marketplace. Although we exercise significant judgment to identify similar properties, and may also consult independent third-party valuation experts to assist, our assessment of fair value is subject to uncertainty and sensitive to our selection of comparable properties.

56

When determining the fair value of real estate assets under the cost approach, we measure fair value as the replacement cost of these assets. This approach also requires significant judgment, and our estimate of replacement cost could vary from actual replacements costs.

At times we may classify real estate assets as held for sale in the period in which they meet the criteria under ASC Topic 360, "Property, Plant, and Equipment" ("ASC 360") as discussed in "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements. Once a real estate asset is classified as held for sale, depreciation is no longer recorded, and the asset is reported at the lower of its carrying value or fair value less cost to sell. The fair value of real estate assets classified as held for sale is determined using the appropriate methodologies noted in the preceding paragraph and the real estate asset's fair value is subject to uncertainty, as the actual sales price of the real estate asset could differ from those assumed in our valuations.

Once real estate assets have been recorded at fair value, they are evaluated for impairment on a quarterly basis. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset for the purpose of assessing impairment, we make certain assumptions including, but not limited to: consideration of projected operating cash flows, intended holding period of the real estate, comparable selling prices and projected cash flows from the eventual disposition of the real estate based upon our estimate of a capitalization rate and discount rate. While we exercise significant judgment in generating our assumptions, the asset's fair value is subject to uncertainty, as actual operating cash flows and disposition proceeds could differ from those assumed in our valuations. Additionally, the output is sensitive to the assumptions used in calculating any potential impairment.

Please refer to "Note 3 – Fair Value Disclosure" and "Note 5 – Real Estate Owned" for more information regarding real estate owned and our valuation methodology as well as "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements.

Current Expected Credit Losses

We measure and record potential expected credit losses related to our loan portfolio in accordance with the CECL Standard. The CECL Standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the macroeconomic environment. We have adopted the weighted-average remaining maturity ("WARM") method to determine a General CECL Allowance for the majority of loans in our portfolio, applied on a collective basis by assets with similar risk characteristics. If we determine that a borrower or sponsor is experiencing financial difficulty, we will record loan-specific allowances (our Specific CECL Allowance) in accordance with a practical expedient prescribed by the CECL Standard.

General CECL Allowance

There are a number of significant assumptions required to estimate our General CECL Allowance which include deriving and applying an annual historical loss rate, estimating the impacts of current and future macroeconomic conditions, and forecasting the timing of expected repayments, satisfactions and future fundings.

We derive an annual historical loss rate based on a CMBS database with historical losses from 1998 through the fourth quarter of 2025 provided by a third party, Trepp LLC ("Trepp"). We apply various filters to arrive at a CMBS dataset most analogous to our current portfolio from which we determine an appropriate historical loss rate. This historical loss rate, and ultimately the General CECL Allowance we derive, is sensitive to the CMBS dataset we select.

We adjust our determined annual historical loss rate based on our outlook of the macroeconomic environment, for a reasonable and supportable forecast period. Selection of a forecast period is a matter of judgment and our General CECL Allowance is sensitive to this input.

We develop our expectations for the future macroeconomic environment and its potential impact on the performance of loans in our portfolio by analyzing various market factors, such as unemployment rate, market liquidity and price indexes relevant to commercial real estate sector. This assessment requires the use of significant judgment in selecting relevant market factors and

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analyzing their correlation with historical loss rates. The future macroeconomic environment is subject to uncertainty as the actual future macroeconomic environment could vary from our expectations.

Additionally, there are assumptions provided to us by the Manager that represent their best estimate as to loan expected term, future fundings, and timing of loan repayments. These assumptions, although made with the most available information at the time of the estimate, are subjective and actual activity may not follow the estimated schedule. These assumptions impact the future balances that the loss rate will be applied to and as such impact our General CECL Allowance. As we acquire new loans and the Manager monitors loan and sponsor performance, these estimates may change each period. Refer to "Note 2 – Summary of Significant Accounting Policies" and "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for further discussion regarding our General CECL Allowance.

Specific CECL Allowance

When we determine that a borrower or sponsor is experiencing financial difficulty, we evaluate the related loan for loan-specific allowances, under the practical expedient prescribed by the CECL Standard. Determining that a borrower or sponsor is experiencing financial difficulty requires the use of significant judgment and can be based on several factors subject to uncertainty. These factors can include, but are not limited to, whether cash from the borrower's operations are sufficient to cover current and future debt service requirements, the borrower's ability to potentially refinance the loan, and other circumstances that can affect the borrower's ability to satisfy their obligations in accordance the terms of the loan. When utilizing the practical expedient for collateral dependent loans, the current expected credit losses is determined as the difference between the fair value of the underlying collateral, adjusted for estimated costs to sell when applicable, and the carrying value of the loan (prior to the current expected credit losses), as repayment or satisfaction of a loan is dependent on a sale of the underlying collateral. Collateral-dependent loans evaluated for a Specific CECL Allowance are removed from the General CECL Allowance pool.

The fair value of the underlying collateral is determined by using method(s) such as discounted cash flow, the market approach, or direct capitalization approach. These methods require the use of key unobservable inputs, which are inherently uncertain and subjective. Our estimate of fair value is sensitive to both the valuation methodology selected and inputs used. Determining a suitable valuation method and selecting the appropriate key unobservable inputs and assumptions requires significant judgment and consideration of factors specific to the underlying collateral being assessed. Additionally, the key unobservable inputs and assumptions used may vary depending on the information available to us and market conditions as of the valuation date. As such, the fair value that we derive and use in calculating our Specific CECL Allowance, is subject to uncertainty and any actual losses, if incurred, could differ materially from our current expected credit losses. Refer to "Note 2 – Summary of Significant Accounting Policies" and "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for further discussion regarding our Specific CECL Allowance.

Refer to "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements for the complete listing and description of our significant accounting policies.

Supplemental U.S. Federal Income Tax Considerations

The following discussion supplements and updates the disclosures under the heading "U.S. Federal Income Tax Considerations" in each of the prospectus dated May 6, 2024, contained in our Registration Statement on Form S-3 (File No. 333-279158) filed with the SEC on May 6, 2024 and the prospectus dated November 3, 2023, contained in our Registration Statement on Form S-3 (File No. 333-275310) (the "Existing Tax Disclosure"). Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in the Existing Tax Disclosure.

On July 4, 2025, H.R. 1, informally known as the One Big Beautiful Bill Act (the "OBBB"), was enacted. The OBBB makes major changes to the Code, including some provisions of the Code that affect the taxation of REITs and their investors. In particular:

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For taxable years beginning on or after January 1, 2026, the OBBB relaxed the REIT asset test requirement with respect to taxable REIT subsidiaries, providing that not more than 25% (relaxed from 20%) of the gross value of a REIT's assets may be represented by securities of one or more taxable REIT subsidiaries.

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The OBBB permanently extended the pass-through qualified business income deduction, generally allowing individuals to deduct 20% of the aggregate amount of ordinary REIT dividends distributed by a REIT. This deduction was due to expire for tax years beginning on or after January 1, 2026.

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The OBBB permanently extended the maximum U.S. federal income tax rate of 37%, which applies to ordinary income recognized by individuals and other non-corporate U.S. stockholders, for tax years beginning on or after January 1, 2026.

To the extent the information set forth in the Existing Tax Disclosure is inconsistent with this supplemental information, this supplemental information supersedes the information in the Existing Tax Disclosure. This supplemental information is provided on the same basis and subject to the same qualifications as are set forth in the first six paragraphs of the Existing Tax Disclosure as if those paragraphs were set forth in this Annual Report on Form 10-K.

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