Seven Hills Realty Trust (SEVN)
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=1452477. Latest filing source: 0001452477-26-000010.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 29,383,000 | USD | 2025 | 2026-02-18 |
| Net income | 15,434,000 | USD | 2025 | 2026-02-18 |
| Assets | 820,856,000 | USD | 2025 | 2026-02-18 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001452477.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Revenue | 38,362,000 | 38,235,000 | 35,274,000 | 29,383,000 | ||
| Net income | 24,650,000 | 27,640,000 | 25,965,000 | 17,820,000 | 15,434,000 | |
| Diluted EPS | 2.18 | 1.89 | 1.76 | 1.20 | 1.00 | |
| Operating cash flow | 210,319,000 | 792,000 | 12,751,000 | 20,270,000 | 20,110,000 | 15,038,000 |
| Dividends paid | 4,595,000 | 14,636,000 | 20,639,000 | 20,772,000 | 18,835,000 | |
| Share buybacks | 57,000 | 137,000 | 183,000 | 377,000 | 383,000 | |
| Assets | 196,055,000 | 599,993,000 | 746,847,000 | 731,525,000 | 692,808,000 | 820,856,000 |
| Liabilities | 3,161,000 | 342,299,000 | 475,268,000 | 460,277,000 | 423,530,000 | 492,205,000 |
| Stockholders' equity | 192,894,000 | 257,694,000 | 271,579,000 | 271,248,000 | 269,278,000 | 328,651,000 |
| Cash and cash equivalents | 103,314,000 | 26,197,000 | 71,067,000 | 87,855,000 | 70,750,000 | 123,471,000 |
Ratios
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Net margin | 72.05% | 67.91% | 50.52% | 52.53% | ||
| Return on equity | 9.57% | 10.18% | 9.57% | 6.62% | 4.70% | |
| Return on assets | 4.11% | 3.70% | 3.55% | 2.57% | 1.88% | |
| Liabilities / equity | 0.02 | 1.33 | 1.75 | 1.70 | 1.57 | 1.50 |
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/CIK0001452477.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 0.31 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.35 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.53 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | 7,803,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 9,090,000 | 0.32 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | 4,644,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 9,798,000 | 0.51 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 10,000,000 | 6,045,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 9,362,000 | 5,233,000 | 0.35 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | 5,233,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 9,380,000 | 0.28 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | 4,229,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 8,857,000 | 0.23 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 7,675,000 | 4,879,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 7,594,000 | 4,532,000 | 0.30 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 4,532,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 7,393,000 | 0.18 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | 2,678,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 7,092,000 | 0.23 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 7,304,000 | 4,794,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 8,339,000 | 4,385,000 | 0.19 | reported discrete quarter |
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: 0001452477-26-000021.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our condensed consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q and in our 2025 Annual Report. OVERVIEW (dollars in thousands, except share data) We are a Maryland REIT. Our business strategy is focused on originating and investing in floating rate first mortgage loans that range from $15,000 to $75,000, secured by middle market transitional CRE properties that have values up to $100,000. We define transitional CRE as commercial properties subject to redevelopment or repositioning activities that are expected to increase the value of the properties. Tremont is registered with the Securities and Exchange Commission, or SEC, as an investment adviser under the Investment Advisers Act of 1940, as amended. We believe that Tremont provides us with significant experience and expertise in investing in middle market transitional CRE. We operate our business in a manner that is consistent with our qualification for taxation as a REIT under the IRC. As such, we generally are not subject to U.S. federal income tax, provided that we meet certain distribution and other requirements. We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act of 1940, as amended, or the 1940 Act. Factors Affecting Operating Results Our results of operations are primarily impacted by general CRE market conditions and unanticipated defaults by our borrowers. For further information regarding the risks associated with our loan portfolio, see Note 3 to the Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 and elsewhere in this Management Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" of our 2025 Annual Report. Credit Risk. We are subject to the credit risk of our borrowers in connection with our investments. We seek to mitigate this risk by utilizing a comprehensive underwriting, diligence and investment selection process and by ongoing monitoring of our investments. Nevertheless, unanticipated credit losses could occur that may adversely impact our operating results. Changes in Fair Value of our Assets. We generally intend to hold our investments for their contractual terms, unless repaid earlier by the borrowers. We evaluate the credit quality of each of our loans at least quarterly. If a loan is determined to be collateral dependent (because the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral property) and the borrower is experiencing financial difficulties, but foreclosure is not probable, we may record an allowance for credit losses by comparing the collateral's fair value to the amortized cost basis of the loan. For collateral-dependent loans for which foreclosure is probable, the related allowance for credit losses is determined using the fair value of the collateral compared to the loan's amortized cost. Availability of Leverage and Equity. We use leverage to make additional investments that may increase our returns. We may not be able to obtain the expected amount of leverage we desire or its cost may exceed our expectation and, consequently, the returns generated from our investments may be reduced. Our ability to further grow our loan portfolio over time will depend, to a significant degree, upon our ability to obtain additional capital. However, our access to additional capital depends on many factors including the price at which our common shares trade relative to their book value and market lending conditions. See "—Market Conditions" below. Market Conditions. During the first quarter of 2026, CRE market conditions reflected a continuation of the stabilization trends that emerged in the second half of 2025. CRE transaction activity continued to show signs of recovery early this quarter, supported by improving property‑level fundamentals, substantial liquidity in debt capital markets and increased confidence in underwriting assumptions. The relative value of CRE debt investments today compared to alternative corporate or private debt investments continues to drive demand from lenders, including banks, securitized lenders, life insurance companies, private debt funds and mortgage REITs. This increased competition amongst lenders has led to a tightening of credit spreads and lower overall borrowing costs for CRE debt investors across all property sectors. 15 Table of Contents More recent geopolitical developments in the Middle East have the potential to affect U.S. economic conditions and has complicated the outlook for U.S. monetary policy. The potential for future Federal Open Markets Committee, or FOMC, interest rate cuts in the near term is lower today than at the beginning of the year. However, the FOMC has indicated it intends to remain patient as it evaluates the potential impact of these events on oil prices and, in turn, U.S. economic growth and labor market conditions. To date, demand for CRE debt in the U.S. has not been materially impacted by geopolitical events and there continues to be a significant amount of maturing CRE debt to be refinanced in the coming year. While the duration and ultimate economic impact of the Middle East conflict remain uncertain, continued volatility in energy prices and financial markets could influence inflation trends, interest‑rate expectations, and economic growth, all of which may affect commercial real estate investment conditions in 2026. Changes in Interest Rates. With respect to our business operations, increases in interest rates, in general, may cause: (a) the coupon rates on our variable rate investments to reset, perhaps on a delayed basis, to higher rates; (b) it to become more difficult and costly for our borrowers, which may negatively impact their ability to repay our investments; and (c) the interest expense associated with our variable rate borrowings to increase. Conversely, decreases in interest rates, in general, may cause: (a) the coupon rates on our variable rate investments to reset, perhaps on a delayed basis, to lower rates; (b) it to become easier and more affordable for our borrowers to refinance, and as a result, repay our loans, but may negatively impact our future returns if any such repayment proceeds were to be reinvested in lower yielding investments; and (c) the interest expense associated with our variable rate borrowings to decrease. The interest income on our loans and interest expense on our borrowings float with benchmark rates, such as SOFR. Because we generally intend to leverage up to 80% of the amount of our investments, as benchmark rates increase above the floors of our loans, our income from investments, net of interest and related expenses, will increase. Decreases in benchmark rates are mitigated by interest rate floor provisions in all but one of our loan agreements with borrowers, ranging from 0.25% to 4.34% with a weighted average floor of 2.83%; therefore, changes to income from investments, net, may not move proportionately with the increase or decrease in benchmark rates. As of March 31, 2026, SOFR was 3.66%, and as a result, seven of our loan investments had an active interest rate floor. Size of Portfolio. The size of our loan portfolio, as measured both by the aggregate principal balance and the number of our CRE loans and our other investments, is also an important factor in determining our operating results. Generally, if the size of our loan portfolio grows, the amount of interest income we receive would increase and we may achieve certain economies of scale and diversify risk within our loan portfolio. A larger portfolio, however, may result in increased expenses; for example, we may incur additional interest expense or other costs to finance our investments. Also, if the aggregate principal balance of our loan portfolio grows but the number of our loans or the number of our borrowers does not grow, we could face increased risk by reason of the concentration of our investments. Prepayment Risk. We are subject to risk that our loan investments will be repaid at an earlier date than anticipated, which may reduce the returns realized on those loans as less interest income may be received over time. Additionally, we may not be able to reinvest the principal repaid timely and/or at a similar or higher yield of the original loan investment. We seek to limit this risk by structuring our loan agreements with fees required to be paid to us upon prepayment of a loan within a specified period of time before the loan’s maturity; however, unanticipated prepayments could negatively impact our operating results. 16 Table of Contents Our Loan Portfolio The table below details overall statistics for our loan portfolio as of March 31, 2026 and December 31, 2025: As of March 31, 2026 As of December 31, 2025 Number of loans 26 24 Total loan commitments $ 775,958 $ 724,458 Unfunded loan commitments (1) $ 43,955 $ 36,873 Principal balance $ 732,003 $ 687,585 Carrying value $ 720,601 $ 676,908 Weighted average coupon rate 7.44 % 7.52 % Weighted average all in yield (2) 7.84 % 7.92 % Weighted average floor 2.83 % 2.81 % Weighted average maximum maturity (years) (3) 2.6 2.6 Weighted average risk rating 2.8 2.8 Weighted average LTV (4) 66 % 66 % (1)Unfunded loan commitments are primarily used to finance property improvements and leasing capital, and are generally funded over the term of the loan. (2)All in yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion. (3)Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (4)LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. 17 Table of Contents Loan Portfolio Details The table below details our loan portfolio as of March 31, 2026: # Location Property Type Origination Date Committed Principal Amount Principal Balance Coupon Rate All in Yield (1) Maximum Maturity (date) (2) LTV (3) Risk Rating First mortgage loans 1 Olmsted Falls, OH (4) Multifamily 01/28/2021 $ 54,575 $ 54,575 S + 4.00% S + 4.15% 04/15/2026 63 % 1 2 Passaic, NJ Industrial 09/08/2022 47,000 45,260 S + 3.85% S + 4.42% 09/08/2027 69 % 4 3 Dallas, TX Office 08/25/2021 46,811 44,217 S + 3.25% S + 3.27% 08/25/2026 72 % 4 4 Boston, MA Hotel 12/16/2024 45,000 39,800 S + 3.95% S + 4.39% 12/16/2029 49 % 3 5 Oxford, MS Student Housing 11/26/2024 42,000 42,000 S + 2.95% S + 3.35% 11/26/2029 75 % 1 6 College Park, MD Student Housing 11/12/2025 37,320 28,327 S + 2.95% S + 3.45% 11/12/2030 43 % 3 7 Revere, MA Hotel 07/01/2024 37,000 37,000 S + 3.95% S + 5.14% 07/01/2029 73 % 3 8 New York, NY Mixed Use 09/05/2025 34,500 34,500 S + 3.20% S + 4.02% 09/05/2030 70 % 2 9 San Marcos, TX Student Housing 01/14/2025 31,200 28,811 S + 3.25% S + 3.67% 01/14/2030 62 % 2 10 Atlanta, GA Medical Office 02/05/2026 30,500 25,500 S + 3.95% S + 4.42% 02/05/2031 66 % 3 11 Anaheim, CA Hotel 11/29/2023 29,000 29,000 S + 4.00% S + 4.05% 11/29/2028 55 % 2 12 San Antonio, TX Industrial 06/13/2025 28,000 22,800 S + 3.40% S + 3.88% 06/13/2030 62 % 3 13 Plano, TX Office 07/01/2021 27,385 26,569 S + 3.75% S + 3.76% 07/01/2026 78 % 4 14 Downers Grove, IL Office 09/25/2020 27,000 26,500 S + 5.00% S + 5.15% 05 [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. OVERVIEW (dollars in thousands, except share data) We are a Maryland REIT. Our business strategy is focused on originating and investing in floating rate first mortgage loans that range from $15,000 to $75,000, secured by middle market transitional CRE properties that have values up to $100,000. We define transitional CRE as commercial properties subject to redevelopment or repositioning activities that are expected to increase the value of the properties. Our mortgage loans are classified as loans held for investment in our consolidated balance sheets. Tremont is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. We believe that Tremont provides us with significant experience and expertise in investing in middle market transitional CRE. We operate our business in a manner that is consistent with our qualification for taxation as a REIT under the IRC. As such, we generally are not subject to U.S. federal income tax, provided that we meet certain distribution and other requirements. We also operate our business in a manner that permits us to maintain our exemption from registration under the 1940 Act. Factors Affecting Operating Results Our results of operations are impacted by a number of factors and primarily depend on the interest income from our investments and the financing and other costs associated with our business. Our operating results are also impacted by general CRE market conditions and unanticipated defaults by our borrowers. For further information regarding the risks associated with our loan portfolio, see the risk factors identified in Part I, Item 1A, "Risk Factors", of this Annual Report on Form 10-K. Credit Risk. We are subject to the credit risk of our borrowers in connection with our investments. We seek to mitigate this risk by utilizing a comprehensive underwriting, diligence and investment selection process and by ongoing monitoring of our investments. Nevertheless, unanticipated credit losses could occur that may adversely impact our operating results. 59 Table of Contents Changes in Fair Value of our Assets. We generally intend to hold our investments for their contractual terms, unless repaid earlier by the borrowers. We evaluate the credit quality of each of our loans at least quarterly. If a loan is determined to be collateral dependent (because the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral property) and the borrower is experiencing financial difficulties, but foreclosure is not probable, we may record an allowance for credit losses by comparing the collateral's fair value to the amortized cost basis of the loan. For collateral-dependent loans for which foreclosure is probable, the related allowance for credit losses is determined using the fair value of the collateral compared to the loan's amortized cost. Availability of Leverage and Equity. We use leverage to make additional investments that may increase our returns. We may not be able to obtain the expected amount of leverage we desire or its cost may exceed our expectation and, consequently, the returns generated from our investments may be reduced. Our ability to further grow our loan portfolio over time will depend, to a significant degree, upon our ability to obtain additional capital. However, our access to additional capital depends on many factors including the price at which our common shares trade relative to their book value and market lending conditions. See "—Market Conditions" below. Market Conditions. Earlier this year, U.S. trade and fiscal policy, coupled with ongoing geopolitical tensions, caused volatility in financial markets and uncertainty for CRE investors. As a result, transaction activity slowed as investors waited on the outcomes of negotiations with U.S. trade partners, new tariff announcements and domestic fiscal policy initiatives as well as the path of interest rates before making buy and sell decisions. CRE transaction activity showed signs of recovery in the second half of 2025 as investors and lenders responded to three interest rate cuts by the FOMC in 2025. Additionally, a more stabilized monetary environment, improving property fundamentals and substantial liquidity in debt capital markets may give CRE investors and lenders renewed optimism and confidence in underwriting assumptions. The relative value of CRE debt investments today compared to alternative corporate or private debt investments continues to drive demand from lenders, including banks, securitized lenders, life insurance companies, private debt funds and mortgage REITs. This increased competition amongst lenders has led to a tightening of credit spreads and lower overall borrowing costs for CRE debt investors across all property sectors. Barring potential risks associated with persistent inflation, increased geopolitical uncertainty that may negatively impact global economic conditions and a weakening labor market that could moderate economic growth, we believe the CRE sector is relatively well positioned, with expectations for increased transaction volume in 2026. Changes in Interest Rates. With respect to our business operations, increases in interest rates, in general, may cause: (a) the coupon rates on our variable rate investments to reset, perhaps on a delayed basis, to higher rates; (b) it to become more difficult and costly for our borrowers, which may negatively impact their ability to repay our investments; and (c) the interest expense associated with our variable rate borrowings to increase. See "—Market Conditions" above for a discussion of the current market including interest rates. Conversely, decreases in interest rates, in general, may cause: (a) the coupon rates on our variable rate investments to reset, perhaps on a delayed basis, to lower rates; (b) it to become easier and more affordable for our borrowers to refinance, and as a result, repay our loans, but may negatively impact our future returns if any such repayment proceeds were to be reinvested in lower yielding investments; and (c) the interest expense associated with our variable rate borrowings to decrease. The interest income on our loans and interest expense on our borrowings float with benchmark rates, such as SOFR. Because we generally intend to leverage up to 80% of the amount of our investments, as benchmark rates increase above the floors of our loans, our income from investments, net of interest and related expenses, will increase. Decreases in benchmark rates are mitigated by interest rate floor provisions in all but one of our loan agreements with borrowers, ranging from 0.25% to 4.34% with a weighted average floor of 2.81%; therefore, changes to income from investments, net, may not move proportionately with the increase or decrease in benchmark rates. As of December 31, 2025, SOFR was 3.69%, and as a result, seven of our loan investments had an active interest rate floor. Size of Portfolio. The size of our loan portfolio, as measured both by the aggregate principal balance and the number of our CRE loans and our other investments, is also an important factor in determining our operating results. Generally, if the size of our loan portfolio grows, the amount of interest income we receive would increase and we may achieve certain economies of scale and diversify risk within our loan portfolio. A larger portfolio, however, may result in increased expenses; for example, we may incur additional interest expense or other costs to finance our investments. Also, if the aggregate principal balance of our loan portfolio grows but the number of our loans or the number of our borrowers does not grow, we could face increased risk by reason of the concentration of our investments. 60 Table of Contents Prepayment Risk. We are subject to risk that our loan investments will be repaid at an earlier date than anticipated, which may reduce the returns realized on those loans as less interest income may be received over time. Additionally, we may not be able to reinvest the principal repaid timely and/or at a similar or higher yield of the original loan investment. We seek to limit this risk by structuring our loan agreements with fees required to be paid to us upon prepayment of a loan within a specified period of time before the loan’s maturity; however, unanticipated prepayments could negatively impact our operating results. Our Loan Portfolio The table below details overall statistics for our loan portfolio as of December 31, 2025 and 2024: As of December 31, 2025 2024 Number of loans 24 21 Total loan commitments $ 724,458 $ 641,213 Unfunded loan commitments (1) $ 36,873 $ 30,402 Principal balance $ 687,585 $ 610,811 Carrying value $ 676,908 $ 601,842 Weighted average coupon rate 7.52 % 8.24 % Weighted average all in yield (2) 7.92 % 8.62 % Weighted average floor 2.81 % 2.12 % Weighted average maximum maturity (years) (3) 2.6 2.6 Weighted average risk rating 2.8 3.1 Weighted average LTV (4) 66 % 67 % (1)Unfunded loan commitments are primarily used to finance property improvements and leasing capital and are generally funded over the term of the loan. (2)All in yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion. (3)Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (4)LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. 61 Table of Contents Loan Portfolio Details The table below details our loan portfolio as of December 31, 2025: # Location Property Type Origination Date Committed Principal Amount Principal Balance Coupon Rate All in Yield(1) Maximum Maturity(2) (date) LTV(3) Risk Rating 1 Olmsted Falls, OH (4) Multifamily 01/28/2021 $ 54,575 $ 54,575 S + 4.00% S + 4.29% 01/28/2026 63 % 1 2 Passaic, NJ Industrial 09/08/2022 47,000 45,260 S + 3.85% S + 4.42% 09/08/2027 69 % 3 3 Dallas, TX Office 08/25/2021 46,811 44,217 S + 3.25% S + 3.27% 08/25/2026 72 % 4 4 Boston, MA Hotel 12/16/2024 45,000 39,800 S + 3.95% S + 4.39% 12/16/2029 49 % 3 5 Oxford, MS Multifamily 11/26/2024 42,000 42,000 S + 2.95% S + 3.35% 11/26/2029 75 % 1 6 College Park, MD Multifamily 11/12/2025 37,320 27,911 S + 2.95% S + 3.46% 11/12/2030 43 % 3 7 Revere, MA (5) Hotel 07/01/2024 37,000 37,000 S + 3.95% S + 5.14% 07/01/2029 73 % 3 8 New York, NY Mixed Use 09/05/2025 34,500 34,500 S + 3.20% S + 4.03% 09/05/2030 70 % 3 9 San Marcos, TX Multifamily 01/14/2025 31,200 28,228 S + 3.25% S + 3.68% 01/14/2030 62 % 2 10 Anaheim, CA Hotel 11/29/2023 29,000 29,000 S + 4.00% S + 4.05% 11/29/2028 55 % 2 11 San Antonio, TX Industrial 06/13/2025 28,000 22,800 S + 3.40% S + 3.88% 06/13/2030 62 % 3 12 Plano, TX Office 07/01/2021 27,385 26,569 S + 3.75% S + 3.76% 07/01/2026 78 % 4 13 Downers Grove, IL Office 09/25/2020 27,000 26,500 S + 5.00% S + 5.15% 05/22/2026 67 % 3 14 Wayne, PA (5) Industrial 07/18/2024 27,000 24,733 S + 4.25% S + 4.73% 07/18/2029 62 % 3 15 Fayetteville, GA Industrial 10/06/2023 25,250 25,250 S + 3.35% S + 3.73% 10/06/2028 55 % 3 16 Carlsbad, CA Office 10/27/2021 24,750 24,417 S + 3.25% S + 3.26% 10/27/2026 78 % 4 17 Los Angeles, CA Industrial 06/28/2024 23,800 22,954 S + 3.40% S + 3.82% 06/28/2029 58 % 3 18 Downers Grove, IL Office 12/09/2021 23,530 23,530 S + 4.25% S + 4.51% 12/09/2026 72 % 3 19 Fontana, CA Industrial 11/18/2022 22,080 20,470 S + 3.75% S + 4.03% 11/18/2026 72 % 3 20 Bellevue, WA Office 11/05/2021 21,000 20,245 S + 2.85% S + 2.85% 04/07/2029 68 % 4 21 Waco, TX Multifamily 03/06/2025 18,500 18,500 S + 3.35% S + 3.75% 03/06/2030 73 % 3 22 Boise, ID Multifamily 06/26/2025 18,000 18,000 S + 3.50% S + 4.29% 06/26/2030 79 % 3 23 Newport News, VA Multifamily 04/25/2024 17,757 15,126 S + 3.15% S + 3.85% 04/25/2029 71 % 3 24 Lake Mary, FL Hotel 09/06/2024 16,000 16,000 S + 4.00% S + 4.41% 09/06/2029 68 % 1 Total/weighted average $ 724,458 $ 687,585 S + 3.62% S + 4.02% 66 % 2.8 (1)All in yield represents the yield on a loan, including amortization of deferred fees over the initial term of the loan and excluding any purchase discount accretion. (2)Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (3)LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. (4)In January 2026, the maturity date of this loan was extended to March 31, 2026. (5)These loans were acquired in November 2025. As of December 31, 2025, we had $724,458 in aggregate loan commitments, consisting of a diverse portfolio, geographically and by property type, of 24 first mortgage loans. As of December 31, 2025, we had 4 loans representing approximately 17% of the amortized cost of our loan portfolio with a loan risk rating of “4” or “higher risk”. As of December 31, 2025, we had no loans with risk rating of “5” or “impaired/ loss likely”. In April 2025, we amended the agreement governing our loan secured by an office property in Bellevue, WA. As part of this amendment, the borrower was required to contribute $1,625 to cash reserves, the coupon rate was reduced from SOFR + 3.85% to SOFR + 2.85% and the maturity date was extended by three years to April 7, 2028. As of December 31, 2025, this loan had an amortized cost of $20,245 and a risk rating of 4. In May 2025, we amended the agreement governing our loan secured by an office property in Downers Grove, IL. As part of this amendment, the borrower repaid $3,000 of the outstanding principal balance and the maturity date was extended by one year to May 22, 2026. As of December 31, 2025, this loan had an amortized cost of $26,640 and a risk rating of 3. All of the loans in our portfolio are structured with risk mitigation mechanisms, such as cash flow sweeps or interest reserves, to help protect us against investment losses. In addition, we actively engage with our borrowers regarding their execution of the business plans for the underlying collateral, among other things. 62 Table of Contents As of December 31, 2025 and February 13, 2026, all of our borrowers with outstanding loans had paid their debt service obligations owed and due to us. We did not have any outstanding past due loans or nonaccrual loans as of December 31, 2025. However, our borrowers' businesses, operations and liquidity may be materially adversely impacted by current inflationary pressures, interest rate fluctuations, supply chain issues or a prolonged economic slowdown or recession could amplify those negative impacts. As a result, they may become unable to pay their debt service obligations owed and due to us, which may result in an increased allowance for credit losses and/or recognition of income on a nonaccrual basis. Some of the factors that have impacted us and could continue to impact us are outlined in Part I, Item 1A, "Risk Factors" of this Annual Report on Form 10-K. For further information regarding our loan portfolio and risk rating policy, see Notes 2 and 3 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Financing Activities Our secured financing agreements at December 31, 2025 consisted of agreements that govern our Wells Fargo Master Repurchase Facility, our Citibank Master Repurchase Facility, our BMO Facility and our UBS Master Repurchase Facility. In February 2026, we amended the Wells Fargo Master Repurchase Agreement and made certain changes to the agreement, including extending the stated maturity date to March 13, 2028 and increasing the maximum facility size by $125,000 to $250,000. In February 2026, we amended our UBS Master Repurchase Agreement to extend the stated maturity date to February 18, 2028. For further information regarding our Secured Financing Facilities, see Note 5 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. The table below is an overview of our Secured Financing Facilities as of December 31, 2025, after giving effect to the above referenced amendments to the UBS and Wells Fargo Master Repurchase Agreements: Facility Maturity Date Principal Balance Carrying Value Unused Capacity Maximum Facility Size Collateral Principal Balance UBS Master Repurchase Facility 02/18/2028 $ 194,948 $ 194,887 $ 55,052 $ 250,000 $ 278,594 Wells Fargo Master Repurchase Facility 03/13/2028 92,980 92,902 157,020 250,000 120,469 Citibank Master Repurchase Facility 09/27/2026 135,715 135,426 79,285 215,000 199,838 BMO Facility Various 64,632 64,442 85,368 150,000 88,684 Total $ 488,275 $ 487,657 $ 376,725 $ 865,000 $ 687,585 The table below details our Secured Financing Facilities activities during the year ended December 31, 2025: Carrying Value Balance at December 31, 2024 $ 417,796 Borrowings 178,405 Repayments (109,752) Deferred fees (325) Amortization of deferred fees 1,533 Balance at December 31, 2025 $ 487,657 As of December 31, 2025, outstanding advancements under our Secured Financing Facilities had a weighted average interest rate of 5.92% per annum, excluding associated fees and expenses. As of December 31, 2025 and February 13, 2026, we had a $488,275 and $447,344, respectively, aggregate outstanding principal balance under our Secured Financing Facilities. As of December 31, 2025, we were in compliance with all covenants and other terms under our Secured Financing Facilities. 63 Table of Contents RESULTS OF OPERATIONS (amounts in thousands, except per share data) Year Ended December 31, 2025 Compared to Year Ended December 31, 2024: Year Ended December 31, 2025 2024 Change % Change INCOME FROM INVESTMENTS: Interest and related income $ 56,340 $ 64,762 $ (8,422) (13.0 %) Less: interest and related expenses (29,485) (31,769) 2,284 7.2 % Income from loan investments, net 26,855 32,993 (6,138) (18.6 %) Revenue from real estate owned 2,528 2,281 247 10.8 % Total revenue 29,383 35,274 (5,891) (16.7 %) OTHER EXPENSES: Base management fees 4,360 4,329 31 0.7 % Incentive fees 625 974 (349) (35.8 %) General and administrative expenses 4,438 3,902 536 13.7 % Reimbursement of shared services expenses 2,040 2,647 (607) (22.9 %) Provision for credit losses 203 3,080 (2,877) (93.4 %) Expenses from real estate owned 2,269 2,489 (220) (8.8 %) Total other expenses 13,935 17,421 (3,486) (20.0 %) Income before income taxes 15,448 17,853 (2,405) (13.5 %) Income tax expense (14) (33) 19 57.6 % Net income $ 15,434 $ 17,820 $ (2,386) (13.4 %) Weighted average common shares outstanding - basic and diluted 15,240 14,712 528 3.6 % Net income per common share - basic and diluted $ 1.00 $ 1.20 $ (0.20) (16.7 %) Interest and related income. The decrease in interest and related income was primarily the result of lower weighted average coupon rates, which was partially offset by interest rate floors for seven of our loans becoming active, lower interest income earned on cash invested due to decreased index rates and lower purchase discount accretion due to discounts becoming fully accreted during the year ended December 31, 2025. The weighted average coupon rate was 7.60% for the year ended December 31, 2025, inclusive of the seven active floors, compared to 8.77% for the year ended December 31, 2024. Interest and related expenses. The decrease in interest and related expenses was primarily the result of lower weighted average coupon rates offset by higher outstanding principal balances under our Secured Financing Facilities during the year ended December 31, 2025. The weighted average coupon rate was 6.25% for the year ended December 31, 2025, compared to 7.24% for the year ended December 31, 2024. The weighted average principal balance was approximately $425,000 for the year ended December 31, 2025, compared to $411,000 for the year ended December 31, 2024. Revenue from real estate owned. Revenue from real estate owned represents revenue from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The increase in revenue from real estate owned was primarily the result of higher operating expense reimbursements during the year ended December 31, 2025. Base management and incentive fees. We recognize base management and incentive fees payable to Tremont in accordance with our management agreement. The increase in base management fees was due to higher “equity” as defined in our management agreement. The decrease in incentive fees was due to lower “core earnings”, as defined in our management agreement, during the year ended December 31, 2025 as compared to the year ended December 31, 2024. 64 Table of Contents General and administrative expenses. The increase in general and administrative expenses was primarily due to an increase in share based and cash compensation awarded to our Trustees, each resulting from the increase in the size of our Board of Trustees, higher share based compensation for employees of RMR and Tremont and higher legal expenses during the year ended December 31, 2025 as compared to the year ended December 31, 2024. Reimbursement of shared services expenses. Reimbursement of shared services expenses represents reimbursement of the costs for the services that Tremont arranges on our behalf from RMR. The decrease in reimbursement of shared services expenses was primarily the result of lower usage of shared services from RMR during the year ended December 31, 2025 as compared to the year ended December 31, 2024. Provision for credit losses. The provision for credit losses represents the increase in the allowance for credit losses on our loan portfolio and unfunded commitments. The increase in the allowance for credit losses during the year ended December 31, 2025 was primarily attributable to increased provisions for our office loans and a larger loan portfolio as of December 31, 2025, offset by increasing values for CRE and favorable CRE pricing forecasts used in our CECL model and loans nearing maturity. Expenses from real estate owned. Expenses from real estate owned represent expenses from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023. The decrease in expenses from real estate owned was primarily the result of lower amortization expense related to acquired real estate leases during the year ended December 31, 2025. Income tax expense. Income tax expense for the year ended December 31, 2025 is a result of income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes. Net income and net income per common share - basic and diluted. The decrease in net income was due to the changes noted above. Additionally, net income per common share - basic and diluted includes the effect of the issuance of 7,532,861 common shares through the Rights Offering. Non-GAAP Financial Measures We present Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings and Distributable Earnings per common share, which are considered “non-GAAP financial measures” within the meaning of the applicable SEC rules. These non-GAAP financial measures do not represent book value, book value per common share, net income, net income per common share or cash generated from operating activities and should not be considered as alternatives to book value, book value per common share, net income or net income per common share determined in accordance with GAAP or as an indication of our cash flows from operations determined in accordance with U.S. generally accepted accounting principles, or GAAP, a measure of our capital adequacy, liquidity or operating performance or an indication of funds available for our cash needs. In addition, our methodologies for calculating these non-GAAP financial measures may differ from the methodologies employed by other companies to calculate the same or similar supplemental capital adequacy or performance measures; therefore, our reported Adjusted Book Value, Adjusted Book Value per common share, Distributable Earnings, and Distributable Earnings per common share may not be comparable to adjusted book value, adjusted book value per common share, distributable earnings and distributable earnings per common share as reported by other companies. 65 Table of Contents Adjusted Book Value We believe that Adjusted Book Value and Adjusted Book Value per common share is a meaningful measure of our capital adequacy because it excludes the impact of certain non-cash estimates or adjustments, including our allowance for credit losses for our loan portfolio and unfunded loan commitments. The table below calculates our book value, Adjusted Book Value and Adjusted Book Value per common share: As of December 31, 2025 2024 Shareholders' equity $ 328,651 $ 269,278 Allowance for credit losses (1) 9,111 8,908 Adjusted Book Value $ 337,762 $ 278,186 Total outstanding common shares 22,584 14,903 Book value per common share $ 14.55 $ 18.07 Adjusted Book Value per common share $ 14.96 $ 18.67 (1)Amounts include our allowance for credit losses for our loan portfolio and our unfunded commitments. The allowance for credit losses for our unfunded commitments is included in accounts payable, accrued liabilities and other liabilities in our consolidated balance sheets. Distributable Earnings In order to maintain our qualification for taxation as a REIT, we are generally required to distribute substantially all of our taxable income, subject to certain adjustments, to our shareholders. We believe that one of the factors that investors consider important in deciding whether to buy or sell securities of a REIT is its distribution rate. Over time, Distributable Earnings and Distributable Earnings per common share may be useful indicators of distributions to our shareholders and are measures that are considered by our Board of Trustees when determining the amount of distributions. We believe that Distributable Earnings and Distributable Earnings per common share provide meaningful information to consider in addition to net income, net income per common share and cash flows from operating activities determined in accordance with GAAP. These measures help us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. In addition, Distributable Earnings, excluding incentive fees, is used in determining the amount of base management and management incentive fees payable by us to Tremont under our management agreement. We calculate Distributable Earnings and Distributable Earnings per common share as net income and net income per common share, respectively, computed in accordance with GAAP, including realized losses not otherwise included in net income determined in accordance with GAAP, and excluding: (a) depreciation and amortization of real estate owned and related intangible assets, if any; (b) non-cash equity compensation expense; (c) unrealized gains, losses and other similar non-cash items that are included in net income for the period of the calculation (regardless of whether such items are included in or deducted from net income or in other comprehensive income under GAAP), if any; and (d) one-time events pursuant to changes in GAAP and certain non-cash items, if any. Distributable Earnings are reduced for realized losses on loan investments when amounts are deemed uncollectable. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but may also be when, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received or expected to be received and the carrying value of the loan. 66 Table of Contents Reconciliation of Net Income to Distributable Earnings The table below demonstrates our calculation of Distributable Earnings and Distributable Earnings per common share, which are non-GAAP measures, and provides a reconciliation of these non-GAAP measures to net income: Year Ended December 31, 2025 2024 Net income $ 15,434 $ 17,820 Non-cash equity compensation expense 1,736 1,359 Non-cash accretion of purchase discount (37) (2,347) Provision for credit losses 203 3,080 Depreciation and amortization of real estate owned 1,063 1,248 Exit fees collected on loans acquired in Merger — 124 Distributable Earnings $ 18,399 $ 21,284 Weighted average common shares outstanding - basic and diluted 15,240 14,712 Net income per common share - basic and diluted $ 1.00 $ 1.20 Distributable Earnings per common share - basic and diluted $ 1.21 $ 1.45 (1)Exit fees collected on loans acquired in the Merger represent fees collected upon repayment of loans for which no income has previously been recognized in Distributable Earnings. In accordance with GAAP, exit fees payable with respect to loans acquired in the Merger were accreted as a component of the purchase discount and were excluded from Distributable Earnings as a non-cash item. Accordingly, these exit fees have been recognized in Distributable Earnings upon collection. LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands, except per share data) Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to fund our lending commitments, repay or meet margin calls resulting from our borrowings, if any, fund and maintain our assets and operations, make distributions to our shareholders and fund other business operating requirements. Our sources of cash flows include cash on hand, payments of principal, interest and fees we receive on our investments, other cash we may generate from our business and operations, any unused borrowing capacity, including under our Secured Financing Facilities or other repurchase agreements or financing arrangements we may obtain, which may also include bank loans or public or private issuances of debt or equity securities and proceeds from any sale of real estate owned. We believe that these sources of funds will be sufficient to meet our operating and capital expenses, pay our debt service obligations owed and make any distributions to our shareholders for the next 12 months and for the foreseeable future. For further information regarding the risks associated with our loan portfolio, see Note 3 to our Consolidated Financial Statements included in Part IV, Item 15 and Part I, Item 1A, "Risk Factors" of this Annual Report on Form 10-K. Pursuant to the terms of our Citibank Master Repurchase Facility, our UBS Master Repurchase Facility and our Wells Fargo Master Repurchase Facility, we may sell to, and later repurchase from, Citibank, UBS and Wells Fargo, the purchased assets related to the applicable facility. The initial purchase price paid by Citibank of each purchased asset is up to 75% of the lesser of the market value of the purchased asset or the unpaid principal balance of such purchased asset, subject to Citibank's approval. The initial purchase price paid by UBS of each purchased asset is up to 80% of the lesser of the market value of the purchased asset or the unpaid principal balance of such purchased asset, subject to UBS's approval. The initial purchase price paid by Wells Fargo for each purchased asset is up to 75% or 80%, depending on the property type of the purchased asset’s real estate collateral, of the lesser of the market value of the purchased asset or the unpaid principal balance of such purchased asset, and subject to Wells Fargo’s approval. Upon the repurchase of a purchased asset, we are required to pay Citibank, UBS or Wells Fargo, as applicable, the outstanding purchase price of the purchased asset, accrued interest and all accrued and unpaid expenses of Citibank, UBS or Wells Fargo, as applicable, relating to such purchased asset. The interest rates related to our Citibank, UBS and Wells Fargo purchased assets are calculated at SOFR plus a premium within a fixed range, determined by the debt yield and property type of the purchased asset’s real estate collateral. Citibank has the discretion to make advancements at margins higher than 75%, and UBS and Wells Fargo each has the discretion to make advancements at margins higher than 80%. 67 Table of Contents Loans issued under the BMO Facility are coterminous with the corresponding pledged mortgage loan investments, are not subject to margin calls and allow for up to an 80% advance rate, subject to certain loan to cost and LTV limits. Interest on advancements under the BMO Facility are calculated at SOFR plus a premium. Loans issued under the BMO Facility are secured by a security interest and collateral assignment of the underlying loans to our borrowers which are secured by real property underlying such loans. We are required to pay an upfront fee equal to a percentage of the aggregate amount of the facility loan, such percentage to be determined at the time of approval of the separate facility loan agreements with BMO, or the BMO Facility Loan Agreements. For further information regarding our Secured Financing Facilities, see Note 5 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K and "—Overview-Financing Activities" above. The following is a summary of our sources and uses of cash flows for the period presented: Year Ended December 31, 2025 2024 Cash and cash equivalents at beginning of period $ 70,750 $ 87,855 Net cash provided by (used in): Operating activities 15,038 20,110 Investing activities (72,957) 21,261 Financing activities 110,640 (58,476) Cash and cash equivalents at end of period $ 123,471 $ 70,750 The decrease in cash provided by operating activities for 2025 compared to 2024 was primarily the result of lower net interest income earned on loan investments due to lower SOFR index rates. The change from cash provided by to cash used in investing activities was primarily due to increased loan originations and acquisitions, as well as lower loan repayments in 2025 compared to 2024. The change from cash used in to cash provided by financing activities was primarily due to proceeds received from the Rights Offering and increased borrowing under our Secured Financing Facilities in 2025 compared to net repayment activity under our Secured Financing Facilities in 2024. Distributions During the year ended December 31, 2025, we declared and paid regular quarterly distributions totaling $18,835, or $1.26 per common share, using cash on hand. On January 15, 2026, we declared a regular quarterly distribution of $0.28 per common share, or $6,327, to shareholders of record on January 26, 2026. We expect to pay this distribution on February 19, 2026 using cash on hand. For further information regarding distributions, see Note 7 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. 68 Table of Contents Rights Offering In November 2025, we commenced the Rights Offering, pursuant to which we issued transferable rights to our shareholders of record as of November 10, 2025. The record date shareholders received one transferable right for each outstanding common share they owned on the record date, which entitled them to purchase one new common share for every two rights held. The Rights Offering was fully backstopped by Tremont. In December 2025, we completed the Rights Offering, in which 7,532,861 common shares were issued at $8.65 per share, generating net proceeds of $61,530, after offering costs. For further information regarding the Rights Offering, see Note 9 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. Contractual Obligations and Commitments Our contractual obligations and commitments as of December 31, 2025 were as follows: Payment Due by Period Total Less than 1 Year 1 - 3 Years 3 - 5 Years More than 5 Years Unfunded loan commitments (1) $ 36,873 $ 7,594 $ 29,279 $ — $ — Principal payments on Secured Financing Facilities (2) 488,275 472,187 16,088 — — Interest payments on Secured Financing Facilities (3) 12,733 12,208 525 — — Lease related costs (4) 222 222 — — — $ 538,103 $ 492,211 $ 45,892 $ — $ — (1)The allocation of our unfunded loan commitments is based on the current loan maturity date to which the individual commitments relate. (2)The allocation of outstanding advancements under our Secured Financing Facilities is based on the earlier of the current maturity date of each loan investment with respect to which the individual borrowing relates or the maturity date of the respective Secured Financing Facilities. (3)Projected interest payments are attributable only to our debt service obligations at existing rates as of December 31, 2025 and are not intended to estimate future interest costs which may result from debt prepayments, additional borrowings, new debt issuances or changes in interest rates. (4)Lease related costs include capital expenditures used to improve tenants' spaces pursuant to lease agreements or leasing related costs, such as brokerage commissions, related to real estate owned. Debt Covenants Our principal debt obligations as of December 31, 2025 were the outstanding balances under our Secured Financing Facilities. Our Master Repurchase Agreements provide for acceleration of the date of repurchase of any then purchased assets and the liquidation of the purchased assets by UBS, Citibank or Wells Fargo, as applicable, upon the occurrence and continuation of certain events of default, including a change of control of us, which includes Tremont ceasing to act as our sole manager or to be a wholly owned subsidiary of RMR. Our Master Repurchase Agreements also provide that upon the repurchase of any then purchased asset, we are required to pay UBS, Citibank or Wells Fargo the outstanding purchase price of such purchased asset and accrued interest and any and all accrued and unpaid expenses of UBS, Citibank or Wells Fargo, as applicable, relating to such purchased asset. In connection with our Master Repurchase Agreements, we entered into our guarantees, or the Master Repurchase Guarantees, which require us to guarantee 25% of the aggregate repurchase price, and 100% of losses in the event of certain bad acts, as well as any costs and expenses of UBS, Citibank and Wells Fargo, as applicable, related to our Master Repurchase Agreements. The Master Repurchase Guarantees contain financial covenants, which require us to maintain a minimum tangible net worth, a minimum liquidity and a minimum interest coverage ratio and to satisfy a total indebtedness to stockholders' equity ratio. In connection with the BMO Loan Program Agreement, we have agreed to guarantee certain of the obligations under the BMO Loan Program Agreement and the BMO Facility Loan Agreements pursuant to a limited guaranty from us to and for the benefit of the administrative agent for itself and such other lenders, or the BMO Guaranty. Specifically, the BMO Guaranty requires us to guarantee 25% of the then current outstanding principal balance of the facility loans and 100% of losses or the entire indebtedness in the event of certain bad acts as well as any costs and expenses of the administrative agent or lenders related to the BMO Loan Program Agreement. In addition, the BMO Guaranty contains financial covenants that require us to maintain a minimum tangible net worth and a minimum liquidity and to satisfy a total indebtedness to stockholders’ equity ratio. Our BMO Loan Program Agreement provides for acceleration of all payment obligations due under the BMO Facility Loan Agreements upon the occurrence and continuation of certain events of default, including a change of control of us, which includes Tremont ceasing to act as our sole manager or to be a wholly owned subsidiary of RMR. 69 Table of Contents As of December 31, 2025, we had a $423,643 aggregate outstanding principal balance under our Master Repurchase Facilities. Our Master Repurchase Agreements are structured with risk mitigation mechanisms, including a cash flow sweep, which would allow UBS, Citibank and Wells Fargo, as applicable, to control interest payments from our borrowers under our loans that are financed under our respective Master Repurchase Facilities, and the ability to accelerate dates of repurchase and institute margin calls, which may require us to pay down balances associated with one or more of our loans that are financed under our Master Repurchase Facilities. As of December 31, 2025, we had a $64,632 aggregate outstanding principal balance under the BMO Facility. As of December 31, 2025, we were in compliance with all covenants and other terms under our Secured Financing Facilities. Related Person Transactions We have relationships and historical and continuing transactions with Tremont, RMR, RMR Inc. and others related to them. For further information about these and other such relationships and related person transactions, see Notes 8 and 9 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K and our other filings with the SEC, which are incorporated herein by reference, including our definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, or our 2026 Proxy Statement, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2025. For further information about the risks that may arise as a result of these and other related person transactions and relationships, see elsewhere in this Annual Report on Form 10-K, including “Warning Concerning Forward-Looking Statements,” Part I, Item 1, “Business” and Part I, Item 1A, “Risk Factors.” We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment regarding future events and other uncertainties. In accordance with SEC guidance, the following discussion addresses the accounting policies that apply to our operations. Our most critical accounting policies involve decisions and assessments that could affect our reported assets and liabilities, as well as our reported revenues and expenses. We believe that our decisions and assessments upon which our consolidated financial statements are based are reasonable, based upon information available to us. Our critical accounting policies and accounting estimates may be changed over time as our strategies change or as we expand our business. Those accounting policies and estimates that are most critical to an investor’s understanding of our financial results and condition and require complex management judgment are discussed below. Revenue Recognition. Interest income related to our CRE mortgage loans is generally accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, are amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan’s interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded until it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. For loans purchased at a discount, GAAP limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. GAAP also requires that the excess of contractual cash flows over cash flows expected to be collected (non-accretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected from such loans generally will be recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected will be recorded through our provision for credit losses. Loans Held For Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity. Loans that are held for investment are carried at cost, net of unamortized loan origination fees, accreted exit fees, unamortized premiums and unaccreted discounts, as applicable, that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be collateral dependent. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. Allowance for Credit Losses. We recognize the allowance for credit losses under the current expected credit loss, or CECL, model. The CECL measurement is based upon historical experience, current conditions, and reasonable and supportable 70 Table of Contents forecasts incorporating forward-looking information that affect the collectability of the reported amount. The CECL model is applicable to financial assets measured at amortized cost and off-balance sheet credit exposures, such as unfunded loan commitments. The allowance for credit losses is a valuation account that is deducted from the related loans’ amortized cost basis in our consolidated balance sheets. Our loans typically include commitments to fund incremental proceeds to borrowers over the life of the loan. The allowance for credit losses related to unfunded loan commitments is included in accounts payable, accrued liabilities and other liabilities in our consolidated balance sheets. Given the lack of historical loss data related to our loan portfolio, we estimate our expected losses using an analytical model that considers the likelihood of default and loss given default for each individual loan. This analytical model incorporates data from a third party database with historical loan loss information for commercial mortgage-backed securities, or CMBS, and CRE loans since 1998. Significant inputs to the model include certain loan specific data, such as LTV, property type, geographic location, occupancy, vintage year, remaining loan term, net operating income, expected timing and amounts of future loan fundings, and macroeconomic forecast assumptions, including the performance of CRE assets, unemployment rates, interest rates and other factors. We utilize the model to estimate credit losses over a reasonable and supportable economic forecast period of 12 months, followed by a straight-line reversion period of 12 months to average historical losses. Average historical losses are established using a population of third party historical loss data that approximates our portfolio as of the measurement date. We evaluate the estimated allowance for each of our loans individually and we consider our internal loan risk rating as the primary credit quality indicator underlying our assessment. We have elected to exclude accrued interest receivable from amortized cost and not to measure an allowance for credit losses on accrued interest receivable. Accrued interest receivables are generally written off when payments are 120 days past due. Such amounts are reversed against interest income and no further interest will be recorded until it is collected. If a loan is determined to be collateral dependent (because the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral property) and the borrower is experiencing financial difficulties, but foreclosure is not probable, we may elect to apply a practical expedient to determine the loan's allowance for credit losses by comparing the collateral's fair value to the amortized cost basis of the loan. For collateral-dependent loans for which foreclosure is probable, the related allowance for credit losses is determined using the fair value, less costs to sell, if applicable, of the collateral compared to the loan's amortized cost. Significant judgments are required in our estimation of our allowance for credit losses, including but not limited to the amount and timing of future fundings, repayments and macroeconomic forecast assumptions. Therefore, actual results over time could differ materially from our estimates. We evaluate the credit quality of each of our loans at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan and sponsorship. We apply the different factors on a 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. Loans are rated “1” (less risk) through “5” (greater risk) as defined below: “1” lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. “2” average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. “3” acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. “4” higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance 71 Table of Contents failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. “5” loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. Real Estate Owned. Upon acquisition, real estate owned is recognized at the fair value of the property at the time of acquisition. We allocate the purchase price to land, building and improvements and intangibles based on determinations of the relative fair values of these assets assuming the properties are vacant. The fair value of the property and the allocation of the purchase price are based on our estimates, which are informed by standard industry valuation methods, including discounted cash flow analyses and sales comparisons. We regularly evaluate real estate owned for indicators of impairment. Impairment indicators may include declining tenant occupancy, lack of progress leasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. If indicators of impairment are present, we evaluate the carrying value of the related property by comparing it to the expected future undiscounted cash flows to be generated from that property. If the sum of these expected future cash flows is less than the carrying value, we reduce the net carrying value of the property to its fair value. This analysis requires us to judge whether indicators of impairment exist and to estimate likely future cash flows. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. If we misjudge or estimate incorrectly or if future tenant operations, market or industry factors differ from our expectations we may record an impairment charge that is inappropriate or fail to record a charge when we should have done so, or the amount of any such charges may be inaccurate. These accounting policies involve significant judgments made based upon our experience and the experience of our management and our Board of Trustees, including judgments about current valuations, ultimate realizable value, estimated useful lives, salvage or residual value, the ability and willingness of our tenants to perform their obligations to us, current and future economic conditions and competitive factors in the markets in which our properties are located. Competition, economic conditions and other factors may cause occupancy declines in the future. In the future, we may need to revise our carrying value assessments to incorporate information which is not now known, and such revisions could decrease the carrying values of our assets.