TPG RE Finance Trust, Inc. (TRTX)

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

The following discussion and analysis should be read in conjunction with the unaudited and audited consolidated financial statements and the accompanying notes included elsewhere in this Form 10-Q and in our Form 10-K filed with the SEC on February 17, 2026. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, and financial condition based on current expectations that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from any results expressed or implied by these forward-looking statements as a result of various factors, including but not limited to those discussed under the heading “Risk Factors” in our Form 10-K filed with the SEC on February 17, 2026.

Overview

We are a commercial real estate finance company externally managed by TPG RE Finance Trust Management, L.P., an affiliate of our sponsor TPG. We directly originate, acquire and manage commercial mortgage loans and other commercial real estate-related debt instruments in North America for our balance sheet. Our objective is to provide attractive risk-adjusted returns to our stockholders over time through cash distributions and capital appreciation. To meet our objective, we focus primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as retenanting, refurbishment or other form of repositioning. The collateral underlying our loans is located in primary and select secondary markets in the U.S. that we believe have attractive economic conditions and commercial real estate fundamentals. We operate our business as one segment.

We made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. We believe we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code and we believe that our organization and current and intended manner of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. As a REIT, we generally are not subject to U.S. federal income tax on our REIT taxable income that we distribute currently to our stockholders. We operate our business in a manner that permits us to maintain an exclusion or exemption from registration under the Investment Company Act.

Our Manager

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $306 billion in assets under management as of March 31, 2026. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's Real Estate platform and TPG’s management committee.

For a summary of certain terms of the management agreement between us and our Manager (the “Management Agreement”), see Note 11 to our Consolidated Financial Statements included in this Form 10-Q.

Macroeconomic Environment

Thus far, 2026 has been marked by significant uncertainty and volatility in global markets, largely driven by geopolitical conditions and the effects of international conflicts and inflation on global markets and interest rates, tariffs and international trade policy and disputes, and political and regulatory uncertainty. After a series of interest rate decreases by the Federal Reserve in 2024 and 2025, the Federal Reserve has elected to hold interest rates steady thus far in 2026. Uncertainty related to international conflicts, oil prices and inflation have caused market expectations with respect to future interest rate policy to shift, with many now projecting no reductions in rates during the remainder of 2026, or potentially increases in rates before the end of the year or in 2027.

These market dynamics have posed challenges to commercial real estate transaction activity so far in 2026. However, the cost and availability of debt continues to remain more constructive for real estate values and transaction activity as compared to recent past periods. During the six months ended June 30, 2026, we originated five first mortgage loans, with aggregate total loan commitments of $614.4 million, an aggregate initial unpaid principal balance of $585.6 million, and aggregate unfunded commitments at closing of $28.8 million. While we currently believe that market conditions are favorable for additional origination activity over the remainder of 2026, significant uncertainty continues to exist with respect to interest rate policy, geopolitical conditions and international conflicts, oil prices, inflation, and the political and regulatory environment. Our continued monitoring of these and other conditions will continue to inform our loan origination volumes, liquidity, and capital allocation throughout the remainder of 2026.

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Second Quarter 2026 Activity

Operating Results:

•Recognized Net income attributable to common stockholders of $9.4 million, compared to $15.2 million for the three months ended March 31, 2026, a decrease of $5.8 million.

•Produced Net interest income of $23.7 million, resulting from interest income of $74.1 million and interest expense of $50.4 million. Net interest income decreased $2.1 million compared to the three months ended March 31, 2026.

•Generated Distributable Earnings of $17.6 million, compared to $19.5 million for the three months ended March 31, 2026, a decrease of $1.9 million.

•Recorded an increase to our allowance for credit losses on our loan portfolio of $3.5 million, for a total allowance for credit losses of $80.7 million, or 179 basis points of total loan commitments of $4.5 billion.

•Declared a common stock dividend of $0.24 per common share for the three months ended June 30, 2026.

Investment Portfolio Activity:

•Originated three first mortgage loans with aggregate total loan commitments of $466.0 million, an aggregate initial unpaid principal balance of $450.0 million, aggregate unfunded loan commitments at closing of $16.0 million, a weighted average interest rate of Term SOFR plus 2.79%, and a weighted average interest rate floor of 2.63%.

•Funded $14.8 million of future funding obligations associated with existing loans.

•Received one full loan repayment of $227.1 million and partial principal payments of $47.3 million related to two loans for total loan repayments of $274.4 million.

Corporate Financing Activity:

•Closed a secured term loan (the "Term Loan B") with an aggregate principal amount of $400.0 million due in 2033, priced at 99.75% and bears interest at Term SOFR plus 275 basis points.

•Closed a $100.0 million corporate revolving credit facility (the "Revolver") due in 2031 which bears interest at Term SOFR plus 200 basis points and was undrawn at close.

Investment Portfolio Financing Activity:

•Extended the Wells Fargo secured credit agreement to 2028 and increased the capacity by $350.0 million to $850.0 million.

•Closed a $500.0 million secured credit agreement with Citi.

•Increased the capacity of the Goldman Sachs secured credit agreement by $250.0 million to $750.0 million.

•Redeemed all $597.8 million of outstanding investment-grade bonds of TRTX 2022-FL5. 17 collateral interests with an aggregate unpaid principal balance of $698.1 million financed therein were refinanced primarily by the upsize of the Wells Fargo secured credit agreement.

•Utilized the reinvestment feature in TRTX 2025-FL6 and TRTX 2025-FL7 two times and one time, respectively, recycling loan repayments of $113.3 million and $3.9 million, respectively.

Liquidity:

•Maintained substantial near-term liquidity of $488.2 million, as of June 30, 2026, comprised of:

•$65.6 million of cash-on-hand, of which $26.1 million was available for investment, net of $39.5 million held to satisfy liquidity covenants under our various financing arrangements.

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $297.4 million under secured credit agreements with three lenders and $20.0 million under other financing arrangements.

•Undrawn capacity of $100.0 million under the Revolver.

•Collateralized loan obligation reinvestment proceeds held at the trustee of $5.2 million.

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We have financed our loan investments as of June 30, 2026 utilizing two CRE CLOs totaling $1.9 billion, $992.0 million under secured credit agreements with total commitments of $2.3 billion provided by four lenders, $60.2 million under asset-specific financing arrangements and $128.9 million under our $375.0 million secured revolving credit facility. Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $186.0 million that are eligible to pledge under our existing financing arrangements.

As of June 30, 2026, 54.3% of our borrowings were pursuant to our CRE CLO vehicles, 31.8% were pursuant to our secured credit agreements and secured revolving credit facility, 1.7% were pursuant to our asset-specific financing arrangements, 0.9% were pursuant to our mortgage loan payable, and 11.3% were pursuant to our Term Loan B. Non-mark-to-market financing comprised 85.2% of total borrowings as of June 30, 2026.

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of June 30, 2026, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.63% (1.65% for arrangements with mark-to-market provisions and 1.60% for two arrangements with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 3.2 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

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Key Financial Measures and Indicators

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared p

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

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-K. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part, 1. Item 1A, “Risk Factors” in this Form 10-K.

This section discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

We are a commercial real estate finance company externally managed by TPG RE Finance Trust Management, L.P., an affiliate of our sponsor TPG. We directly originate, acquire and manage commercial mortgage loans and other commercial real estate-related debt instruments in North America for our balance sheet. Our objective is to provide attractive risk-adjusted returns to our stockholders over time through cash distributions and capital appreciation. To meet our objective, we focus primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as retenanting, refurbishment or other form of repositioning. The collateral underlying our loans is located in primary and select secondary markets in the U.S. that we believe have attractive economic conditions and commercial real estate fundamentals. We operate our business as one segment.

We made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. We believe we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code and we believe that our organization and current and intended manner of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. As a REIT, we generally are not subject to U.S. federal income tax on our REIT taxable income that we distribute currently to our stockholders. We operate our business in a manner that permits us to maintain an exclusion or exemption from registration under the Investment Company Act.

Our Manager

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $303 billion in assets under management as of December 31, 2025. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's Real Estate platform and TPG’s management committee.

For a summary of certain terms of the management agreement between us and our Manager (the “Management Agreement”), see Note 10 to our Consolidated Financial Statements included in this Form 10-K.

Macroeconomic Environment

2025 was marked by significant volatility in global markets, driven by tariffs and international trade policy and disputes, political and regulatory uncertainty, geopolitical conditions, elevated interest rates, and inflation. Collectively, these market dynamics have posed challenges to commercial real estate values and transaction activity. However, the Federal Reserve decreased interest rates in 2024 and 2025, which has contributed to an improvement in the cost and availability of debt. This was constructive for real estate values and transaction activity. In 2025, we originated 20 first mortgage loans, with aggregate total loan commitments of $1.9 billion, an aggregate initial unpaid principal balance of $1.8 billion, and aggregate unfunded commitments at closing of $0.1 billion. This represented a significant increase in origination activity over 2024, when we originated eight first mortgage loans, with aggregate total loan commitments of $562.3 million, an aggregate initial unpaid principal balance of $532.0 million, and aggregate unfunded commitments at closing of $30.3 million.

Thus far, 2026 has been marked by additional policy-driven uncertainty and market volatility, including with respect to international trade policy and geopolitical conditions. The Federal Reserve recently held interest rates steady for the first time since July 2025. While some officials have expressed support for additional decreases in interest rates in 2026, other officials have expressed opposition to additional decreases. As a result, significant uncertainty exists with respect to the timing, direction and extent of any future interest rate changes, in addition to uncertainty related to international trade policy, the political and regulatory environment, geopolitical events, and inflation. Our continued monitoring of these and other conditions will continue to inform our loan origination volumes, liquidity, and capital allocation in 2026.

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Fourth Quarter 2025 Activity

Operating Results:

•Recognized Net income attributable to common stockholders of $0.2 million, compared to $18.4 million for the three months ended September 30, 2025, a decrease of $18.2 million.

•Produced Net interest income of $25.4 million, resulting from interest income of $74.4 million and interest expense of $49.0 million. Net interest income decreased $2.8 million compared to the three months ended September 30, 2025.

•Generated Distributable Earnings of $18.5 million, compared to $19.9 million for the three months ended September 30, 2025, a decrease of $1.4 million.

•Recorded an increase to our allowance for credit losses on our loan portfolio of $11.3 million, for a total allowance for credit losses of $77.4 million, or 180 basis points of total loan commitments of $4.3 billion.

•Declared a common stock dividend of $0.24 per common share for the three months ended December 31, 2025.

Investment Portfolio Activity:

•Originated nine first mortgage loans with aggregate total loan commitments of $927.0 million, an aggregate initial unpaid principal balance of $843.0 million, aggregate unfunded loan commitments at closing of $83.9 million, a weighted average interest rate of Term SOFR plus 2.66%, and a weighted average interest rate floor of 2.74%.

•Funded $11.9 million of future funding obligations associated with existing loans.

•Received six full loan repayments of $378.3 million.

Investment Portfolio Financing Activity:

•Issued TRTX 2025-FL7, a $1.1 billion managed CRE CLO with $957.0 million of investment-grade bonds outstanding, a 30-month reinvestment period, an advance rate of 87.0%, and a weighted average interest rate at issuance of Term SOFR plus 1.67%, before transaction costs.

•Redeemed all $411.5 million of outstanding investment-grade bonds of TRTX 2021-FL4. Five collateral interests with an aggregate unpaid principal balance of $205.2 million financed therein were refinanced by the issuance of TRTX 2025-FL7.

•Utilized the reinvestment feature in TRTX 2025-FL6 three times, recycling loan repayments of $163.9 million.

•Executed an extension of the Goldman Sachs secured credit agreement through November 17, 2029.

•Executed an extension of the initial maturity of the Barclays secured credit agreement.

Full Year 2025 Activity

Operating Results:

•Recognized Net income attributable to common stockholders of $45.5 million, or $0.57 per diluted share, and Distributable Earnings of $76.8 million or $0.97 per diluted share.

•Produced Net interest income of $103.8 million, resulting from interest income of $290.2 million and interest expense of $186.5 million.

•Declared dividends of $77.9 million, or $0.96 per common share, representing a 11.1% annualized dividend yield based on the December 31, 2025 closing price of $8.61.

Investment Portfolio Activity:

•Originated 20 first mortgage loans with total loan commitments of $1.9 billion, an aggregate initial unpaid principal balance of $1.8 billion, unfunded loan commitments of $0.1 billion, a weighted average interest rate of Term SOFR plus 2.82%, and a weighted average interest rate floor of 2.95%.

•Funded $42.6 million in future funding obligations associated with existing loans.

•Received loan repayments, in whole and in part, of $987.9 million.

•Sold two office properties classified as real estate owned for net proceeds of $39.4 million, resulting in a gain on sale of real estate, net of $7.0 million.

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Investment Portfolio Financing Activity:

•Issued TRTX 2025-FL6, a $1.1 billion managed CRE CLO with $962.5 million of investment-grade bonds outstanding, a 30-month reinvestment period, an advance rate of 87.5%, and a weighted average interest rate at issuance of Term SOFR plus 1.83%, before transaction costs.

•Redeemed all $114.6 million of outstanding investment-grade bonds of TRTX 2019-FL3. Three collateral interests with an aggregate unpaid principal balance of $143.0 million financed therein were refinanced by the issuance of TRTX 2025-FL6.

•Utilized the reinvestment feature in TRTX 2025-FL6 seven times, recycling loan repayments of $331.9 million.

•Extended our secured revolving credit facility by three years to February 2028 and increased the capacity by $85.0 million to $375.0 million, with a syndicate of seven lenders.

•Non-mark-to-market financing comprised 82.0% of total loan portfolio borrowings as of December 31, 2025.

Liquidity:

•Maintained substantial near-term liquidity of $143.0 million, as of December 31, 2025, comprised of:

•$87.6 million of cash-on-hand, of which $72.6 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $21.4 million under secured credit agreements with two lenders, and $30.0 million under other financing arrangements.

•Collateralized loan obligation reinvestment proceeds of $4.0 million.

We have financed our loan investments as of December 31, 2025 utilizing three CRE CLOs totaling $2.6 billion, $591.2 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, $60.2 million under asset-specific financing arrangements, and $31.5 million under our $375.0 million secured revolving credit facility. Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $127.1 million that are eligible to pledge under our existing financing arrangements. As of December 31, 2025, 79.2% of our borrowings were pursuant to our CRE CLO vehicles, 19.0% were pursuant to our secured credit agreements and secured revolving credit facility and 1.8% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 82.0% of total loan portfolio borrowings as of December 31, 2025.

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of December 31, 2025, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.69% (1.67% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 3.9 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

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Key Financial Measures and Indicators

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared per common share, Distributable Earnings, and book value per common share. As further described below, Distributable Earnings is a measure that is not prepared in accordance with GAAP. We use Distributable Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current investment activity and operations.

For the three months ended December 31, 2025, we recorded net income attributable to common stockholders of $0.00 per diluted common share, a decrease of $0.23 per diluted common share from the three months ended September 30, 2025, of which (i) $0.17 per diluted common share relates to an increase quarter over quarter in our credit loss expense, which was a $11.3 million expense during the fourth quarter of 2025 compared to $2.6 million benefit during the third quarter of 2025 and (ii) $0.04 per diluted common share related to a decrease in net interest income.

Distributable Earnings per diluted common share was $0.24 for the three months ended December 31, 2025, a decrease of $0.01 per diluted common share from the three months ended September 30, 2025. The decrease in Distributable Earnings per diluted common share was primarily due to a decrease in net interest income of $0.04 per diluted common share, partially offset by a decrease in expenses from real estate owned operations of $0.02 per diluted common share.

For the three months ended December 31, 2025, we declared a cash dividend of $0.24 per common share which was paid on January 23, 2026.

Our book value per common share as of December 31, 2025 was $11.07, a decrease of $0.20 per common share from our book value per common share as of December 31, 2024 of $11.27. The decrease of $0.20 per common share was primarily due to (i) an increase in credit loss expense of $0.17 per common share and (ii) preferred stock dividends declared of $0.16 per common share, which was partially offset by amortization of stock compensation expense of $0.11 per common share during the year ended December 31, 2025. Additionally, on a net basis, book value per common share increased $0.05 per common share due to share repurchases and issuances during the year ended December 31, 2025.

The following table sets forth the calculation of basic and diluted net income attributable to common stockholders per share and dividends declared per share (dollars in thousands, except share and per share data):

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(1)Includes preferred stock dividends declared and paid on outstanding shares of Series A Preferred Stock and Series C Preferred Stock.

(2)Basic and diluted earnings per common share are computed independently based on the weighted average shares of common stock outstanding. Diluted earnings per common share includes the impact of participating securities outstanding.

Distributable Earnings

Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss) attributable to our common stockholders, including realized gains and losses from loan write-offs, loan sales and other loan resolutions (including conversions to REO), regardless of whether such items are included in other comprehensive income or loss, or in GAAP net income (loss), and excluding (i) non-cash stock compensation expense, (ii) depreciation and amortization expense (which only applies to debt investments related to real estate to the extent we foreclose upon the property or properties underlying such debt investments), (iii) unrealized gains (losses) (including credit loss expense (benefit), net), and (iv) certain non-cash or income and expense items.

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We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP. We generally must distribute at least 90% of our net taxable income annually, subject to certain adjustments and excluding any net capital gains, for us to continue to qualify as a REIT for U.S. federal income tax purposes. We believe that one of the primary reasons investors purchase our common stock is to receive our dividends. Because of our investors’ continued focus on our ability to pay dividends, Distributable Earnings is an important measure for us to consider when determining our distribution policy and dividends per common share. Further, Distributable Earnings helps 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 investment and operating activities.

Distributable Earnings excludes the impact of our credit loss provision or reversals of our credit loss provision, but only to the extent that our credit loss provision exceeds any realized credit losses during the applicable reporting period. See Note 2 to our Consolidated Financial Statements included in this Form 10-K for additional details regarding our accounting policies and estimation of our allowance for credit losses.

Distributable Earnings does not represent net income (loss) or cash generated from operating activities and should not be considered as an alternative to GAAP net income (loss), an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Distributable Earnings may not be comparable to the Distributable Earnings reported by other companies.

The following table provides a reconciliation of GAAP net income attributable to common stockholders to Distributable Earnings (dollars in thousands, except share and per share data):

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(1)GAAP Gain on sale of real estate owned, net includes the impact of $5.1 million of depreciation and amortization expense recognized in previous quarters. For purposes of Distributable Earnings, depreciation and amortization expense on real estate owned is an add back in the quarter recognized. Accordingly, in the reporting period sold, the GAAP Gain on sale of real estate owned, net must be reduced by the accumulated depreciation and amortization expense previously recognized.

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Book Value Per Common Share

The following table sets forth the calculation of our book value per common share (dollars in thousands, except share and per share data):

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Investment Portfolio Overview

Our interest-earning assets are comprised of a portfolio of primarily floating rate, first mortgage loans, or in two instances, contiguous mezzanine loans. As of December 31, 2025, our loans held for investment portfolio consisted of 50 first mortgage loans (or interests therein) totaling $4.3 billion of commitments with an unpaid principal balance of $4.1 billion. As of December 31, 2025, 99.7% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans. In two instances, a first mortgage loan and contiguous mezzanine loan both owned by us. As of December 31, 2025, we had $173.6 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

We may hold REO as a result of taking title to a loan's collateral. As of December 31, 2025, we owned two office properties and four multifamily properties with an aggregate carrying value of $237.7 million.

During the three months ended December 31, 2025, we originated nine mortgage loans with aggregate total loan commitments of $927.0 million, an aggregate initial unpaid principal balance of $843.0 million, and aggregate unfunded commitments at closing of $83.9 million. Loan fundings included $11.9 million of deferred future fundings related to previously originated loans. We received proceeds from six loan repayments in full of $378.3 million for total loan repayments of $378.3 million during the period.

The following table details our loans held for investment portfolio activity by unpaid principal balance (dollars in thousands):

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(1)Additional fundings made under existing loan commitments. Includes accrued PIK interest of $0.2 million and $0.7 million for the three months and year ended December 31, 2025, respectively.

For the three months ended December 31, 2025, we generated interest income of $74.4 million and incurred interest expense of $49.0 million, which resulted in net interest income of $25.4 million.

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The following table details overall statistics for our loans held for investment portfolio as of December 31, 2025 (dollars in thousands):

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(1)In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio we originated, acquired and financed. We did not have any non-consolidated senior interests as of December 31, 2025. As of December 31, 2025, total loan exposure includes one fixed rate contiguous mezzanine loan.

(2)Unpaid principal balance includes PIK interest of $1.0 million related to one loan as of December 31, 2025.

(3)Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by our borrowers and to finance operating deficits during renovation and lease-up.

(4)As of December 31, 2025, all of our floating rate loans were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, and accrual of both extension and exit fees. All-in yield for the total portfolio assumes Term SOFR as of December 31, 2025 for weighted average calculations.

(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of December 31, 2025, based on the unpaid principal balance of our total loan exposure, 56.3% of our loans were subject to yield maintenance or other prepayment restrictions and 43.7% were open to repayment without penalty.

(6)Except for construction loans, LTV is calculated for loan originations and existing loans as the total outstanding principal balance of the loan or participation interest in a loan (plus any financing that is pari passu with or senior to such loan or participation interest) divided by the as-is appraised value of our collateral at the time of origination or acquisition of such loan or participation interest. For construction loans only, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value of the real estate securing the loan. The as-is or as-stabilized (as applicable) value reflects our Manager’s estimates, at the time of origination or acquisition of the loan or participation interest in a loan, of the real estate value underlying such loan or participation interest determined in accordance with our Manager’s underwriting standards and consistent with third-party appraisals obtained by our Manager.

The following table details the interest rate floors for our loans held for investment portfolio as of December 31, 2025 (dollars in thousands):

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(1)Excludes capitalized interest of $1.0 million related to one loan.

For information regarding the financing of our loans held for investment portfolio, see the section entitled “Investment Portfolio Financing.”

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Real Estate Owned

As of December 31, 2025, we owned two office properties and four multifamily properties, each of which previously served as collateral for first mortgage loans. During the year ended December 31, 2025, we did not acquire any REO properties. We sold two office properties during the year ended December 31, 2025 to third parties.

The following table details the carrying value of each of our REO properties reflected on our consolidated balance sheet as of December 31, 2025 (dollars in thousands):

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Asset Management

We actively manage the assets in our portfolio from closing to final repayment or resolution. We are party to agreements with Situs Asset Management, LLC (“SitusAMC”), one of the largest commercial mortgage loan servicers, pursuant to which SitusAMC (i) provides us with dedicated asset management employees to provide asset management services pursuant to our proprietary guidelines and (ii) services our loans. Following the closing of an investment, the dedicated asset management team rigorously monitors the investment under our Manager’s oversight, with an emphasis on ongoing financial, legal and quantitative analyses. Through the final repayment of an investment, the asset management team maintains regular contact with borrowers, servicers and local market experts monitoring performance of the collateral, anticipating borrower, property and market issues, and enforcing our rights and remedies when appropriate. We manage our REO using resources of TPG's Real Estate platform and third-party property managers all under the direct supervision of our Manager.

Loan Portfolio Review

Our Manager reviews our entire loan portfolio quarterly, undertakes an assessment of the performance of each loan, and assigns it a risk rating between “1” and “5,” from least risk to greatest risk, respectively. See Note 2 to our Consolidated Financial Statements included in this Form 10-K for a discussion regarding the risk rating system that we use in connection with our loan portfolio.

The following table allocates the amortized cost basis of our loans held for investment portfolio based on our internal risk ratings (dollars in thousands):

The following table allocates the amortized cost basis of our loans held for investment portfolio based on our property type classification (dollars in thousands):

The weighted average risk rating of our loan portfolio was 3.0 as of December 31, 2025, unchanged from December 31, 2024.

During the three months ended December 31, 2025, we upgraded two loans and downgraded one loan. We upgraded two multifamily loans from "3" to "2" due to continued strong operating performance. We downgraded one multifamily loan from "3" to "4" due to operational challenges during the quarter. We assigned an initial risk rating of "3" to nine newly originated loans. We received repayment in full of six loans with a total unpaid principal balance of $378.3 million and a weighted average risk rating of 3.0 as of September 30, 2025.

During the three months ended September 30, 2025, we did not upgrade or downgrade any of our loans as part of our quarterly risk rating process. We assigned an initial risk rating of "3" to four newly originated loans. We received repayment in full of six loans with a total unpaid principal balance of $405.8 million and a weighted average risk rating of 3.0 as of June 30, 2025.

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During the three months ended June 30, 2025, we did not upgrade or downgrade any of our loans as part of our quarterly risk rating process. We assigned an initial risk rating of "3" to seven newly originated loans. We received repayment in full of three loans with a total unpaid principal balance of $147.4 million and a weighted average risk rating of 3.0 as of March 31, 2025.

During the three months ended March 31, 2025, we did not upgrade or downgrade any of our loans as part of our quarterly risk rating process.

Loan Modification Activity

Loan modifications and amendments are commonplace in the transitional lending business. We may amend or modify a loan depending on the loan’s specific facts and circumstances. These loan modifications typically include additional time for the borrower to refinance or sell the collateral property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan maturity, modification of terms of interest rate cap agreements, and/or deferral of scheduled principal payments. In exchange for a modification, we often receive a partial repayment of principal, a short-term accrual of PIK interest for a portion of interest due, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection, and/or an increase in the loan coupon or additional loan fees. We work with our borrowers to address issues as they arise while seeking to preserve the positive credit attributes of our loans. However, we cannot assure you that these efforts will be successful, and we may experience payment delinquencies, defaults, foreclosures, or losses.

Allowance for Credit Losses

Our allowance for credit losses is influenced by the size and weighted average maturity date of our loans, loan quality, risk rating, delinquency status, loan-to-value ratio, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the year ended December 31, 2025, we recorded an increase of $13.5 million in our allowance for credit losses resulting in an aggregate CECL reserve of $77.4 million at year-end. This increase was primarily attributable to an increase in the general reserve which reflects our loan activity and the impact of an uncertain macroeconomic environment, which includes macroeconomic assumptions that include ongoing concerns about growing geopolitical tensions and conflicts, the potential impact of market volatility and tariffs and the general level of forecasted interest rates. Additionally, the allowance for credit losses is impacted by loan specific property-level performance trends and local market fundamentals.

While the ultimate impact of the macroeconomic outlook and property performance trends remain uncertain, we selected our macroeconomic outlook to address this uncertainty, and made specific forward-looking adjustments to the inputs of our loan-level calculations to reflect collateral operating performance, credit structure features of loan documents, variability in an economic climate marked by sustained higher interest rates, and other impacts to the broader economy.

The following table presents the allowance for credit losses for loans held for investment (dollars in thousands):

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Investment Portfolio Financing

We finance our investment portfolio using secured financing agreements, including secured credit agreements, secured revolving credit facilities, mortgage loans payable, asset-specific financing arrangements, and collateralized loan obligations. In certain instances, we may create structural leverage and obtain matched-term financing through the co-origination or non-recourse syndication of a senior loan interest to a third party (a “non-consolidated senior interest”). We generally seek to match-fund and match-index our investments by minimizing the differences between the durations and indices of our investments and those of our liabilities, while minimizing our exposure to mark-to-market risk.

The following table details our investment portfolio financing arrangements (dollars in thousands):

All of our investment portfolio financing arrangements are floating rate indexed to Term SOFR except a single fixed-rate mortgage loan secured by an REO property in Houston, TX.

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As of December 31, 2025, non-mark-to-market financing sources accounted for 82.0% of our total loan portfolio borrowings. The remaining 18.0% of our loan portfolio borrowings, comprised primarily of our four secured credit agreements, are subject to credit marks only. As of December 31, 2025, we did not have any non-consolidated senior interests.

The following table summarizes our loan portfolio financing arrangements (dollars in thousands):

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(1)As a result of contributing collateral into TRTX 2025-FL7 upon its issuance during the three months ended December 31, 2025, we repaid $430.4 million of borrowings under our secured credit agreements. Additionally, we accelerated $0.04 million of unamortized deferred financing costs related to these agreements within interest expense in our consolidated statements of income (loss) and comprehensive income (loss). As a result of contributing collateral into TRTX 2025-FL6 upon its issuance during the three months ended March 31, 2025, we repaid $332.6 million of borrowings under our secured credit agreements. Additionally, we accelerated $0.1 million of unamortized deferred financing costs related to these agreements within interest expense in our consolidated statements of income (loss) and comprehensive income (loss).

(2)As a result of contributing collateral into TRTX 2025-FL7 upon its issuance during the three months ended December 31, 2025, we repaid $76.1 million of borrowings under the HSBC Facility asset-specific financing arrangement. Additionally, we accelerated $0.1 million of unamortized deferred financing costs related to this arrangement within interest expense in our consolidated statements of income (loss) and comprehensive income (loss). As a result of contributing collateral into TRTX 2025-FL6 upon its issuance during the three months ended March 31, 2025, we repaid $157.4 million of borrowings under the HSBC Facility and Customers Bank asset-specific financing arrangements. Additionally, we accelerated $0.6 million of unamortized deferred financing costs related to these arrangements within interest expense in our consolidated statements of income (loss) and comprehensive income (loss)

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Secured Credit Agreements

As of December 31, 2025, aggregate borrowings outstanding under our secured credit agreements totaled $0.6 billion. As of December 31, 2025, the overall weighted average interest rate was the benchmark interest rate plus 1.67% per annum and the overall weighted average advance rate was 78.8%. As of December 31, 2025, outstanding borrowings under these arrangements had a weighted average term to extended maturity of 4.0 years assuming the exercise of all extension options and term-out provisions. These secured credit agreements are generally 25.0% recourse to Holdco.

The following table details our secured credit agreements as of December 31, 2025 (dollars in thousands):

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(1)Commitment amount represents the maximum amount of borrowings available under a given agreement once sufficient collateral assets have been approved by the lender and pledged by us.

(2)Undrawn capacity represents the positive difference between the borrowing amount approved by the lender against collateral assets pledged by us and the amount actually drawn against those collateral assets. The funding of such amounts is generally subject to the sole and absolute discretion of each lender.

(3)Represents the commitment amount less the approved borrowings, which amount is available to be borrowed provided we pledge, and the lender approves, additional collateral assets.

(4)Each secured credit agreement interest rate is subject to Term SOFR as its benchmark interest rate. The credit spread for each arrangement is added to Term SOFR to calculate the interest rate charged for each borrowing.

(5)Our ability to extend our secured credit agreements to the dates shown above is subject to satisfaction of certain conditions. Even if extended, our lenders retain sole discretion during the revolving period to determine whether to accept pledged collateral, and the advance rate and credit spread applicable to each borrowing thereunder. No new loan collateral may be pledged to the Goldman Sachs facility after November 17, 2029, on which date the facility automatically converts to a two-year term facility.

Once we identify an asset and the asset is approved by the secured credit agreement lender to serve as collateral (which lender’s approval is in its sole discretion), we and the lender may enter into a transaction whereby the lender advances to us a percentage of the value of the loan asset, which is referred to as the “advance rate”. In the case of borrowings under our secured credit agreements that are repurchase arrangements, this advance serves as the purchase price at which the lender acquires the loan asset from us with an obligation of ours to repurchase the asset from the lender for an amount equal to the purchase price for the transaction plus a price differential, which is calculated based on an interest rate. Advance rates are subject to negotiation between us and our secured credit agreement lenders.

For transactions, we and the lender generally agree to a trade confirmation which sets forth, among other things, the asset purchase price, the maximum advance rate, the interest rate and the market value of the asset. For transactions under our secured credit agreements, the trade confirmation may also set forth any future funding obligations which are contemplated with respect to the specific transaction and/or the underlying loan asset and loan-specific margin maintenance provisions, described below.

Generally, our secured credit agreements allow for revolving balances, which allow us to voluntarily repay balances and draw again on existing available credit. The primary obligor on each secured credit agreement is a separate special purpose subsidiary of ours which is restricted from conducting any activity other than that related to the utilization of its secured credit agreement and the loans or loan interests that are originated or acquired by such subsidiary. As additional credit support, our holding company subsidiary, Holdco, provides certain guarantees of the obligations of its subsidiaries. Holdco’s liability is generally capped at 25% of the outstanding obligations of the special purpose subsidiary which is the primary obligor under the related agreement. However, this liability cap does not apply in the event of certain “bad boy” defaults which can trigger recourse to Holdco for losses or the entire outstanding obligations of the borrower depending on the nature of the “bad boy” default in question. Examples of such “bad boy” defaults include, without limitation, fraud, intentional misrepresentation, willful misconduct, incurrence of additional debt in violation of financing documents, and the filing of a voluntary or collusive involuntary bankruptcy or insolvency proceeding of the special purpose entity subsidiary or the guarantor entity.

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Each of the secured credit agreements have “margin maintenance” provisions, which are designed to allow the lender to maintain a certain margin of credit enhancement against the assets which serve as collateral. The lender’s margin amount is typically based on a percentage of the market value of the asset and/or mortgaged property collateral; however, certain secured credit agreements may also involve margin maintenance based on maintenance of a minimum debt yield with respect to the cash flow from the underlying real estate collateral. In certain cases, margin maintenance provisions can relate to minimum debt yields for pledged collateral considered as a whole, or limits on concentration of loan exposure measured by property type or loan type.

Our secured credit agreements contain defined mark-to-market provisions that permit the lenders to issue margin calls to us in the event that the collateral properties underlying our loans pledged to our lenders experience a non-temporary decline in value or net cash flow (“credit marks”). In the event that we experience market turbulence, we may be exposed to margin calls in connection with our secured credit agreements.

The maturity dates for each of our secured credit agreements are set forth in tables that appear earlier in this section. Our secured credit agreements generally have terms of between one and three years, but may be extended if we satisfy certain performance-based conditions. In the normal course of business, we maintain discussions with our lenders to extend, amend or otherwise optimize any financing agreements related to our loans.

As of December 31, 2025, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit agreements taken as a whole) was 21.2% compared to 22.4% as of December 31, 2024.

The secured credit agreements also include cash management features which generally require that income from collateral loan assets be deposited in a lender-controlled account for distribution in accordance with a specified waterfall of payments designed to keep facility-related obligations current before such income is disbursed for our own account. The cash management features generally require the trapping of cash in such controlled account if an uncured default under our borrowing arrangement remains outstanding. Furthermore, some secured credit agreements may require an accelerated principal amortization schedule if the secured credit agreement is in its final extended term.

Notwithstanding that a loan asset may be subject to a financing arrangement and serve as collateral under a secured credit agreement, we retain the right to administer and service the loan and interact directly with the underlying obligors and sponsors of our loan assets so long as there is no default under the secured credit agreement, and so long as we do not engage in certain material modifications (including amendments, waivers, exercises of remedies, or releases of obligors and collateral, among other things) of the loan assets without the lender’s prior consent.

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Secured Revolving Credit Facility

On February 22, 2022, we closed a $250.0 million secured revolving credit facility with a syndicate of five banks to provide interim funding of up to 180 days for newly originated and existing loans. During the fourth quarter of 2022, an additional lender was added to the facility, increasing the borrowing capacity to $290.0 million. During the first quarter of 2025, we amended the facility to extend the maturity by three years and increased the borrowing capacity to $375.0 million with a syndicate of seven lenders. This facility has a maturity of February 13, 2028, an interest rate of Term SOFR plus 2.00% that is payable monthly in arrears, and an unused fee of 15 or 20 basis points, depending upon whether utilization exceeds 50.0%. During the year ended December 31, 2025, the weighted average unused fee was 19 basis points. This facility is 100% recourse to Holdco. As of December 31, 2025, we pledged one loan investment with a collateral principal balance of $82.0 million and had outstanding Term SOFR-based borrowings of $31.5 million.

Asset-Specific Financing Arrangements

As of December 31, 2025, we had two asset-specific financing arrangements with two third-party lenders and provide asset-specific financing on a non-mark-to-market basis with matched term. The BMO facility is 25% recourse to Holdco and the HSBC Facility is 20% recourse to Holdco.

The following table details our asset-specific financing arrangements (dollars in thousands):

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(1)Net of $0.5 million unamortized deferred financing costs.

(2)Collateral loan assets and related financings are indexed to Term SOFR.

(3)Borrowings are term-matched to the corresponding collateral loan asset. The weighted average term assumes all extension options of the collateral loan asset are exercised by the borrower.

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Collateralized Loan Obligations

As of December 31, 2025, we had three collateralized loan obligations, TRTX 2025-FL7, TRTX 2025-FL6, and TRTX 2022-FL5, totaling $2.6 billion, financing $3.0 billion, or 73.8%, of our loans held for investment portfolio. As of December 31, 2025, our CRE CLOs provide low cost, non-mark-to-market, non-recourse financing for 79.2% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of Term SOFR plus 1.85%, and have a weighted average advance rate of 85.4%. Each CRE CLO included and with respect to TRTX 2025-FL7 and TRTX 2025-FL6, includes, a reinvestment feature that allowed us to contribute existing or new loan investments in exchange for proceeds from loan repayments held by the CRE CLOs.

The following table details the loan collateral and borrowings under our CRE CLOs (dollars in thousands):

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(1)Includes loan amounts held in the Company's CRE CLOs and excludes other REO investments of $84.7 million held within the Sub-REIT.

(2)Weighted average spread excludes the amortization of loan fees, deferred financing costs, and debt issuance discounts.

(3)Loan term represents weighted average final maturity, assuming extension options are exercised by the borrower. Repayments of CRE CLO notes are dependent on timing of underlying loan repayments post-reinvestment period. The term of the CRE CLO notes represents the rated final distribution date.

(4)Collateral loan investment assets of FL5, FL6 and FL7 represent 20.5%, 26.6% and 26.7%, respectively, of the aggregate unpaid principal balance of our loans held for investment portfolio as of December 31, 2025.

(5)During the three months ended December 31, 2025, we recognized interest expense of $36.4 million, which includes $1.0 million of discount and deferred financing cost amortization. During the year ended December 31, 2025, we recognized interest expense of $142.7 million, which includes $3.0 million of discount and deferred financing cost amortization.

During the year ended December 31, 2025, we did not utilize our eligible reinvestment feature related to TRTX 2025-FL7. During the year ended December 31, 2025, we utilized our eligible reinvestment feature related to TRTX 2025-FL6 seven times, recycling $331.9 million of principal payments received. The reinvestment period for TRTX 2022-FL5 ended on February 9, 2024. The reinvestment periods for TRTX 2025-FL6 and TRTX 2025-FL7 will end on September 18, 2027 and May 18, 2028, respectively.

See Note 5 to our Consolidated Financial Statements included in this Form 10-K for details about our CRE CLO reinvestment feature.

Mortgage Loan Payable

Through a wholly owned special purpose subsidiary, we are the borrower under a $31.2 million mortgage loan secured by a deed of trust against an REO asset. The first mortgage loan was provided by an institutional lender, has an interest-only five-year term with a maturity date of July 6, 2028 and bears interest at a rate of 7.7%. As of December 31, 2025, the carrying value of the loan was $30.8 million.

Non-Consolidated Senior Interests and Retained Mezzanine Loans

In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan.

As of December 31, 2025, there are no non-consolidated senior interests or retained mezzanine loans outstanding.

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Financial Covenants for Outstanding Borrowings

For a description of our financial covenants and guarantees for outstanding borrowings related to our secured financing agreements, see Note 6 to our Consolidated Financial Statements included in this Form 10-K.

We were in compliance with all financial covenants for our investment portfolio financing arrangements to the extent of outstanding balances as of December 31, 2025 and December 31, 2024, respectively.

If we fail to satisfy any of the covenants in our financing arrangements and are unable to obtain a waiver or other suitable relief from the lenders, we would be in default under these agreements, which could result in a cross-default or cross-acceleration under other financing arrangements, and our lenders could elect to declare outstanding amounts due and payable (or such amounts may automatically become due and payable), terminate their commitments, require the posting of additional collateral and enforce their respective interests against existing collateral. A default also could significantly limit our financing alternatives, which could cause us to curtail our investment activities or dispose of assets when we otherwise would not choose to do so. Further, this could make it difficult for us to satisfy the requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.

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Floating Rate Loan Portfolio

Our business model seeks to minimize our exposure to changing interest rates by match-indexing our assets using the same, or similar, benchmark indices. Accordingly, rising interest rates will generally increase our net interest income, while declining interest rates will generally decrease our net interest income, subject to the impact of interest rate floors in our mortgage loan investment portfolio. As of December 31, 2025, 99.8% of our loan investments by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in $0.8 billion of net floating rate exposure, subject to the impact of interest rate floors on all our floating rate loans and less than 10.0% of our floating rate liabilities. The weighted average interest rate floor on the mortgage loan investment portfolio was 2.66% and the weighted average interest rate floor on the liabilities was 0.08% as of December 31, 2025. Subject to the specific footnote disclosures in the preceding tables describing our revolving credit facilities, secured financing arrangements, asset-specific financing arrangements and CRE CLOs, and the table that follows, our liabilities are generally index-matched to each loan investment asset, resulting in a net exposure to movements in floating benchmark interest rates that varies based on the relative proportion of floating rate assets and liabilities.

The following table details the net floating rate exposure of our loan portfolio by unpaid principal balance as of December 31, 2025 (dollars in thousands):

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(1)As of December 31, 2025, all of our floating rate mortgage loan assets and all of our outstanding floating rate mortgage loan liabilities were subject to Term SOFR as the benchmark interest rate.

(2)Floating rate liabilities include secured credit agreements, a secured revolving credit facility, asset-specific financing arrangements and collateralized loan obligations.

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Interest-Earning Assets and Interest-Bearing Liabilities

The following table presents the average balance of interest-earning assets and related interest-bearing liabilities, associated interest income and interest expense, and financing costs and the corresponding weighted average yields for our loan portfolio (dollars in thousands):

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(1)Based on amortized cost for loans held for investment and interest-bearing liabilities as of December 31, 2025. Calculated balances as the month-end averages.

(2)Weighted average yield or financing cost calculated based on annualized interest income or expense divided by calculated month-end average outstanding balance.

(3)Represents interest income on core interest-earning assets less interest expense on total interest-bearing liabilities. Interest income on Other Interest-earning assets is included in Other Income, net on the consolidated statements of income (loss) and comprehensive income (loss).

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The following table presents the average balance of interest-earning assets and related interest-bearing liabilities, associated interest income and interest expense, and financing costs and the corresponding weighted average yields for our loan portfolio (dollars in thousands):

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(1)Based on amortized cost for loans held for investment and interest-bearing liabilities as of December 31, 2025. Calculated balances as the month-end averages.

(2)Weighted average yield or financing cost calculated based on annualized interest income or expense divided by calculated month-end average outstanding balance.

(3)Represents interest income on core interest-earning assets less interest expense on total interest-bearing liabilities. Interest income on Other Interest-earning assets is included in Other Income, net on the consolidated statements of income (loss) and comprehensive income (loss).

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Our Results of Operations

Operating Results

Comparison of the Three Months Ended December 31, 2025 and September 30, 2025

The following table sets forth information regarding our consolidated results of operations (dollars in thousands, except per share data):

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(1)Basic and diluted earnings per common share are computed independently based on the weighted average shares of common stock outstanding. Diluted earnings per common share includes the impact of participating securities outstanding.

(2)Additional information regarding our consolidated results of operations and financial performance for the three months ended September 30, 2025 can be found in our Quarterly Report on Form 10-Q for the three months ended September 30, 2025 filed with the SEC on October 28, 2025.

Net Interest Income

Net interest income decreased by $2.8 million to $25.4 million during the three months ended December 31, 2025 compared to $28.3 million for the three months ended September 30, 2025. The decrease was primarily attributable to loan portfolio activity including the timings of loan repayments and originations during the quarter, a decrease in the weighted average credit spreads on new originations and one loan placed on non-accrual.

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Other Revenue

Other revenue increased $0.05 million for the three months ended December 31, 2025 compared to the three months ended September 30, 2025, due primarily to an increase in other income, net attributable to an increase in reinvestment income earned on collateralized loan proceeds held at our trustee, partially offset by declines in cash held and interest rates earned on our cash balances during the three months ended December 31, 2025.

Other Expenses

Other expenses increased $1.4 million for the three months ended December 31, 2025 compared to the three months ended September 30, 2025, primarily due to an increase in stock compensation expense as a result of expense acceleration associated with an officer's retirement, partially offset by a decrease in expenses from REO operations of $1.3 million.

Credit Loss (Expense) Benefit, net

Credit loss expense increased by $13.9 million for the three months ended December 31, 2025 compared to the three months ended September 30, 2025. The increase was primarily due to a $11.3 million expense recorded during the three months ended December 31, 2025 compared to $2.6 million benefit during the comparable period. Credit loss expense during the three months ended December 31, 2025 was primarily due to a net increase of $5.9 million resulting from loan origination and full loan repayment activity during the quarter and a net increase of $5.4 million related to changes to the macroeconomic environment. Credit loss benefit during the three months ended September 30, 2025 was primarily due to a net decrease of $1.6 million resulting from full loan repayments and loan origination activity during the quarter and a net decrease of $1.0 million related to improved asset-level performance and changes to the macroeconomic environment. See Notes 3 and 15 to our Consolidated Financial Statements included in this Form 10-K for additional details regarding our allowance for credit losses, risk ratings, and property type concentration risk.

Preferred Stock Dividends and Participating Securities Share in Earnings

During each of the three month periods ended December 31, 2025 and September 30, 2025, we declared and paid cash dividends of $3.1 million related to our Series C Preferred Stock.

Dividends Declared Per Common Share

During the three months ended December 31, 2025, we declared cash dividends of $0.24 per common share, or $19.4 million. During the three months ended September 30, 2025, we declared cash dividends of $0.24 per common share, or $19.1 million.

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Comparison of the Years Ended December 31, 2025 and December 31, 2024

The following table sets forth information regarding our consolidated results of operations (dollars in thousands, except per share data):

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(1)Basic and diluted earnings per common share are computed independently based on the weighted average shares of common stock outstanding. Diluted earnings per common share includes the impact of participating securities outstanding.

Net Interest Income

Net interest income decreased $4.5 million to $103.8 million during the year ended December 31, 2025 compared to $108.3 million for the year ended December 31, 2024. The decrease was primarily due to a decline in the average index rate and credit spread, partially offset by an increase in the average outstanding balance of the loan portfolio. The weighted average strike interest rate on the interest rate floors embedded in our loans increased from 1.84% as of December 31, 2024 to 2.66% as of December 31, 2025.

Other Revenue

Other revenue decreased $2.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to a decrease in other income, net attributable to declines in cash held and interest rates earned on our cash balances. This decrease was partially offset by an increase in operating revenue from eight properties held during the year ended December 31, 2025, of which two of the eight were sold during May and June 2025, compared to five properties held during the year ended December 31, 2024.

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Other Expenses

Other expenses increased $4.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to an increase in stock compensation expense of $3.4 million for the year ended December 31, 2025 compared to the same period in 2024 as a result of expense acceleration associated with an officer's retirement. Management fees increased by $0.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Additionally, expenses from REO operations increased $0.3 million from eight properties held during the year ended December 31, 2025, of which two of the eight were sold during May and June 2025, compared to five properties held during the year ended December 31, 2024.

Gain on Sale of Real Estate Owned, net

During the year ended December 31, 2025, we sold two office REO properties for net cash proceeds of $39.4 million and recognized a gain on sale of real estate owned, net of $7.0 million. We did not sell any REO during the year ended December 31, 2024.

Credit Loss (Expense), net

Credit loss expense increased by $9.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, due to a $13.9 million expense recognized during the year ended December 31, 2025 compared to a $4.1 million expense recognized during the comparable period. Credit loss expense during the year ended December 31, 2025, was primarily due to a net increase of $14.9 million which reflects the impact of an uncertain macroeconomic environment, partially offset by a net decrease of $1.0 million related to our loan origination and repayment activity. Credit loss expense during the year ended December 31, 2024, was primarily due to an increase of $9.7 million related to realized losses on REO conversions, partially offset by $5.6 million related to macroeconomic assumptions employed in determining the general CECL reserve. See Note 3 to our Consolidated Financial Statements included in this Form 10-K for additional details regarding our allowance for credit losses and risk ratings.

Preferred Stock Dividends and Participating Securities Share in Earnings

During each of the years ended December 31, 2025 and 2024, we declared and paid cash dividends of $12.6 million related to our Series C Preferred Stock.

Dividends Declared Per Common Share

During the year ended December 31, 2025, we declared cash dividends of $0.96 per common share, or $77.9 million. During the year ended December 31, 2024, we declared cash dividends of $0.96 per common share, or $78.7 million.

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Liquidity and Capital Resources

Capitalization

We have capitalized our business to-date through, among other things, the issuance and sale of shares of our common stock, issuance of Series C Preferred Stock classified as permanent equity, issuance of Series B Preferred Stock treated as temporary equity, borrowings under secured credit agreements, secured revolving credit facilities, collateralized loan obligations, mortgage loan payable, asset-specific financings, and non-consolidated senior interests. As of December 31, 2025, we had 78.3 million shares of common stock outstanding representing $0.9 billion of stockholders’ equity, and $3.3 billion of outstanding borrowings used to finance our investments and operations.

See Notes 5 and 6 to our Consolidated Financial Statements included in this Form 10-K for details regarding our borrowings under secured credit agreements, a secured revolving credit facility, asset-specific financings and collateralized loan obligations.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents our Debt-to-Equity ratio and Total Leverage ratio:

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(1)Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, secured credit agreements, asset-specific financing arrangements, a secured revolving credit facility, and mortgage loans payable, less cash, to (ii) total stockholders’ equity, at period end.

(2)Represents (i) total outstanding borrowings under secured financing arrangements, including collateralized loan obligations, secured credit agreements, asset-specific financing arrangements, a secured revolving credit facility, and mortgage loans payable, plus non-consolidated senior interests sold or co-originated (if any), less cash, to (ii) total stockholders’ equity, at period end.

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents, available borrowings under secured credit agreements, available borrowings under our asset-specific financing arrangements, capacity in our collateralized loan obligations available for reinvestment, and a secured revolving credit facility.

Our current sources of near-term liquidity are set forth in the following table (dollars in thousands):

Our existing loan portfolio may provide us with liquidity as loans are repaid or sold, in whole or in part, of which some proceeds may be included in accounts receivable from our servicers until released and the proceeds from such repayments become available for us to reinvest. For the year ended December 31, 2025, loan repayments totaled $987.9 million. We held unencumbered loan investments with an aggregate unpaid principal balance of $127.1 million that are eligible to pledge under our existing financing arrangements. We also hold six REO properties with an aggregate carrying value of $237.7 million. One of our REO properties is financed and the remaining five properties are unencumbered and thus create financing capacity. Additionally, proceeds from the sale of REO properties may provide us with liquidity. For the year ended December 31, 2025, proceeds from the sale of REO totaled $39.4 million.

Uses of Liquidity

In addition to our ongoing loan activity, our primary liquidity needs include interest and principal payments under our $3.3 billion of outstanding borrowings under secured credit agreements, a secured revolving credit facility, asset-specific financing arrangements, and collateralized loan obligations, the repurchase or deleveraging of loans, $173.6 million of unfunded loan commitments on our loans held for investment, dividend distributions to our preferred and common stockholders, operating expenses, and repurchases of shares of our common stock pursuant to a share repurchase program that our board of directors approved on September 3, 2025.

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Consolidated Cash Flows

Our primary cash flow activities involve actively managing our investment portfolio, originating primarily floating rate, first mortgage loan investments, and raising capital through public offerings of our equity and debt securities.

The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash balances (dollars in thousands):

Operating Activities

During the year ended December 31, 2025 and 2024, cash flows provided by operating activities totaled $90.4 million and $112.1 million, respectively, primarily related to the change in accrued expenses and other assets during the period.

Investing Activities

During the year ended December 31, 2025, cash flows used in investing activities totaled $789.7 million primarily due to new loan originations of $1.8 billion, advances on loans of $41.9 million, and capital expenditures related to real estate owned of $6.1 million, partially offset by loan repayments of $983.9 million and proceeds from the sale of real estate owned of $39.4 million. During the year ended December 31, 2024, cash flows provided by investing activities totaled $440.5 million primarily due to loan repayments of $887.1 million, proceeds of $92.8 million related to a loan sale during the fourth quarter of 2023, and cash assumed from the conversion of loans held for investment to real estate owned of $1.6 million, partially offset by new loan originations and acquisitions of $495.0 million, advances on loans of $40.7 million, and capital expenditures related to real estate owned of $5.3 million.

Financing Activities

During the year ended December 31, 2025, cash flows provided by financing activities totaled $597.1 million primarily due to $1.9 billion of net proceeds from the issuance of TRTX 2025-FL7 and TRTX 2025-FL6, borrowings on our secured financing agreements of $2.0 billion, borrowings on our asset-specific financing arrangements of $107.3 million, partially offset by repayments of CRE CLO liabilities of $1.0 billion as a result of the redemption of TRTX 2021-FL4 and TRTX 2019-FL3 and repayment of underlying loans, payments on secured financing agreements of $2.0 billion, payments on asset-specific financing arrangements of $233.5 million, payment of dividends on our common stock and Series C Preferred Stock of $91.1 million, and payments to retire common stock of $25.3 million. During the year ended December 31, 2024, cash flows used in financing activities totaled $569.2 million primarily due to payments on secured financing agreements of $594.4 million, repayments on CRE CLO liabilities of $237.5 million as a result of the repayment of underlying loans, payments on asset-specific financing arrangements of $159.4 million, and payment of dividends on our common stock and Series C Preferred Stock of $90.4 million, partially offset by borrowings on our secured financing agreements of $442.7 million and borrowings on our asset-specific financing arrangements of $71.7 million.

See Note 5 to our Consolidated Financial Statements included in this Form 10-K for additional details related to our CRE CLO financing activities.

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Material Cash Requirements

Contractual Obligations and Commitments

Our contractual obligations and commitments as of December 31, 2025 were as follows (dollars in thousands):

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(1)The allocation of our unfunded loan commitments for our loans held for investment portfolio is based on the earlier of the commitment expiration date and the loan maturity date.

(2)Collateralized loan obligation liabilities are based on the fully extended maturity of mortgage loan collateral, considering the reinvestment window of our collateralized loan obligation.

(3)The allocation of secured credit agreements and secured revolving credit facility is based on the extended maturity date for those secured financing agreements where extensions are at our option, subject to no default, or the current maturity date of those facilities where extension options are subject to counterparty approval.

(4)The allocation of asset-specific financing arrangements are based on the fully extended maturity date of the underlying mortgage loan collateral.

(5)Amounts include the related future interest payment obligations, which are estimated by assuming the amounts outstanding under our secured debt agreements, asset-specific financing arrangements and collateralized loan obligations and the interest rates in effect as of December 31, 2025 will remain constant into the future. This is only an estimate, as actual amounts borrowed and rates will vary over time. Our floating rate loans and our related liabilities are indexed to Term SOFR.

With respect to our debt obligations that are contractually due within the next five years, we plan to employ several strategies to meet these obligations, including: (i) exercising maturity date extension options that exist in our current financing arrangements; (ii) negotiating extensions of terms with our providers of credit; (iii) periodically accessing the private and public equity and debt capital markets to raise cash to fund new investments or the repayment of indebtedness; (iv) the issuance of additional structured finance vehicles, such as collateralized loan obligations similar to TRTX 2025-FL7, TRTX 2025-FL6, TRTX 2022-FL5, TRTX 2021-FL4, or TRTX 2019-FL3 as a method of financing; (v) the establishment of new asset-specific financing arrangements, including matched-term note-on-note facilities; (vi) term loans with private lenders; (vii) selling loans and REO to generate cash to repay our debt obligations; (viii) encumbering REO properties to generate cash; and/or (ix) applying repayments from underlying loans to satisfy the debt obligations which they secure. Although these avenues have been available to us in the past, we cannot offer any assurance that we will be able to access any or all of these alternatives in the future.

We are required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses pursuant to our Management Agreement. The table above does not include the amounts payable to our Manager under our Management Agreement as they are not fixed and determinable. During the year ended December 31, 2025, our Manager did not earn an incentive management fee. See Note 10 to our Consolidated Financial Statements included in this Form 10-K for additional terms and details of the fees payable under our Management Agreement.

As a REIT, we generally must distribute substantially all of our net taxable income to stockholders in the form of dividends to comply with the REIT provisions of the Internal Revenue Code. The IRS has issued a revenue procedure permitting “publicly offered” REITs to use elective stock dividends (i.e., dividends paid in a mixture of stock and cash), with at least 20% of the total distribution being paid in cash, to satisfy their REIT distribution requirements. Pursuant to this revenue procedure, we may elect to make future distributions of our taxable income in a mixture of stock and cash.

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Our REIT taxable income does not necessarily equal our net income as calculated in accordance with GAAP or our Distributable Earnings as described above. See Note 9 to our Consolidated Financial Statements included in this Form 10-K for additional details.

Corporate Activities

Dividends

Upon the approval of our Board of Directors, we accrue dividends. We intend to distribute each year not less than 90% of our taxable income to our stockholders to comply with the REIT provisions of the Internal Revenue Code. The Board of Directors will determine whether to pay future dividends, entirely in cash, or in a combination of stock and cash based on facts and circumstances at the time such decisions are made.

On December 12, 2025, our Board of Directors declared and approved a cash dividend of $0.24 per share of common stock, or $19.4 million in the aggregate, for the fourth quarter of 2025. The common stock dividend was paid on January 23, 2026 to the holders of record of our common stock as of December 26, 2025.

On December 9, 2025, our Board of Directors declared a cash dividend of $0.3906 per share of Series C Preferred Stock, or $3.1 million in the aggregate, for the fourth quarter of 2025. The Series C Preferred Stock dividend was paid on December 30, 2025 to the preferred stockholders of record as of December 19, 2025.

On December 13, 2024, our Board of Directors declared and approved a cash dividend of $0.24 per share of common stock, or $20.0 million in the aggregate, for the fourth quarter of 2024. The common stock dividend was paid on January 24, 2025 to the holders of record of our common stock as of December 27, 2024.

On December 6, 2024, our Board of Directors declared a cash dividend of $0.3906 per share of Series C Preferred Stock, or $3.1 million in the aggregate, for the fourth quarter of 2024. The Series C Preferred Stock dividend was paid on December 30, 2024 to the preferred stockholders of record as of December 20, 2024.

For the year ended December 31, 2025 and 2024, common stock dividends in the amount of $77.9 million and $78.7 million, respectively, were declared and approved.

As of December 31, 2025 and December 31, 2024, common stock dividends of $19.4 million and $20.0 million, respectively, were unpaid and are reflected in dividends payable on our consolidated balance sheets.

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Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with GAAP requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, interest income and other revenue recognition, allowance for loan losses, expense recognition, tax liability, future impairment of our investments, valuation of our investment portfolio and disclosure of contingent assets and liabilities, among other items. Our management bases these estimates and judgments about current, and for some estimates, future economic and market conditions and their effects on available information, historical experience and other assumptions that we believe are reasonable under the circumstances. However, these estimates, judgments and assumptions are often subjective and may be impacted negatively based on changing circumstances or changes in our analyses.

If conditions change from those expected, it is possible that our judgments, estimates and assumptions could change, which may result in a change in our interest income and other revenue recognition, allowance for loan losses, expense recognition, tax liability, future write-offs of our investments, and valuation of our investment portfolio, among other effects. If actual amounts are ultimately different from those estimated, judged or assumed, revisions are included in the consolidated financial statements in the period in which the actual amounts become known. We believe our critical accounting estimates could potentially produce materially different results if we were to change underlying estimates, judgments or assumptions.

The following is a summary of our significant accounting policies that we believe are the most affected by our Manager's judgments, estimates, and assumptions:

Allowance for Credit Losses

As discussed in Note 2, the allowance for credit losses measured under the CECL accounting framework represents an estimate of current expected losses for our existing portfolio of loans held for investment and is presented as a valuation reserve on our consolidated balance sheets. Expected credit losses related to non-cancelable unfunded loan commitments are accounted for as separate liabilities included in accrued expenses and other liabilities on the consolidated balance sheets. The allowance for credit losses for loans held for investment, as reported in our consolidated balance sheets, is adjusted by a credit loss (expense) benefit, which is reported in earnings in the consolidated statements of income (loss) and comprehensive income (loss) and reduced by the write-off of loan amounts, net of recoveries and additions related to purchased credit-deteriorated (“PCD”) assets, if relevant. The allowance for credit losses includes a modeled component and an individually assessed component. We have elected to not measure an allowance for credit losses on accrued interest receivables related to all of our loans held for investment because we write off uncollectible accrued interest receivable in a timely manner pursuant to our non-accrual policy.

We consider key credit quality indicators in underwriting loans and estimating credit losses, including but not limited to: the capitalization of borrowers and sponsors; the expertise of the borrowers and sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan-to-value (“LTV”) ratio; loan amount and lien position; debt service and coverage ratio; our risk rating for the same and similar loans; and prior experience with the borrower and sponsor. This information is used to assess the financial and operating capability, experience and profitability of the sponsor/borrower. Ultimate repayment of our loans is sensitive to interest rate changes, general economic conditions, liquidity, LTV ratio, existence of a liquid investment sales market for commercial properties, and availability of replacement short-term or long-term financing. The loans in our commercial mortgage loan portfolio are secured by collateral of the following property types: office; life science; multifamily; hotel; industrial; mixed-use; and self storage.

Our loans are typically collateralized by real estate, or in the case of mezzanine loans, by a partnership interest or similar equity interest in the entity that owns the real estate securing our first mortgage loan. We regularly evaluate on a loan-by-loan basis, typically no less frequently than quarterly, the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, and the financial and operating capability of the borrower/sponsor. We also evaluate the financial strength of loan guarantors, if any, and the borrower’s competency in managing and operating the property or properties. In addition, we consider the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including, to the extent available (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v) other market data.

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Quarterly, we evaluate the risk of all loans and assign a risk rating based on a variety of factors, whereby no single factor on its own, whether quantitative or qualitative, is given more weight than others. The factors that we consider in connection with this evaluation are grouped as follows: (i) loan and credit structure, including the as-is LTV and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geography, property type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, our loans are rated “1” through “5,” from least risk to greatest risk, respectively:

1 -Very Low Risk

2 -Low Risk

3 -Medium Risk

4 -High Risk/Potential for Loss—A loan that has a risk of realizing a principal loss; and

5 -Default/Loss Likely—A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

We generally assign a risk rating of “3” to all loans originated or acquired during the most recent quarter, except when specific circumstances warrant an exception.

Our CECL reserve also reflects estimates of the current and future economic conditions that impact the performance of the commercial real estate assets securing the loans. These estimates include unemployment rates, inflation rates, interest rates, price indices for commercial property, current and expected future availability of liquidity in the commercial property debt and equity capital markets, and other macroeconomic factors that may influence the likelihood and magnitude of potential credit losses for our loans during their anticipated term. We license certain macroeconomic financial forecasts to inform our view of the potential future impact that broader economic conditions may have on our loan portfolio’s performance. Selection of the economic forecast or forecasts used, in conjunction with loan level inputs, to determine the CECL reserve requires significant judgment about future events that, while based on the information available to us as of the balance sheet date, are ultimately unknowable with certainty. The actual economic conditions impacting our loan portfolio could vary significantly from the estimates made for the periods presented.

The commercial property investment sales and commercial mortgage loan markets have experienced uneven liquidity due to global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, the potential impact of tariffs and trade disputes, sustained higher interest rates, currency fluctuations, labor shortages, structural shifts and regulatory changes in the banking sector, and political and geopolitical conflicts, which continue to make it more difficult to estimate key inputs for estimating the allowance for credit losses. The amount of allowance for credit losses is influenced by the size of our loan portfolio, loan asset quality, risk rating, delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. We employ two methods to estimate credit losses in our loan portfolio: (1) a model-based approach and (2) an individually assessed approach for loans considered to be "collateral-dependent" as the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral and the borrower is experiencing financial difficulty or foreclosure is probable. Estimates made by us are necessarily subject to change due to the limited number of observable inputs and uncertainty regarding the global macroeconomic conditions described above.

Significant judgment is required when estimating future credit losses and, as a result, actual losses over time could be materially different. During the year ended December 31, 2025, we recognized an increase of $13.5 million to our allowance for credit losses. The credit loss allowance was $77.4 million as of December 31, 2025. During the year ended December 31, 2025, we recognized $13.9 million of credit loss expense, net.

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Real Estate Owned

Upon the acquisition of a property, we assess the fair value of the acquired tangible and intangible assets (including land, buildings, tenant improvements, above- and below-market leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocate the purchase price to the acquired assets and assumed liabilities, which are on a relative fair value basis. The most significant portion of the allocation is to building and land and requires the use of market based estimates and assumptions. We assess and consider fair value based on estimated cash flow projections that utilize appropriate discount and/or capitalization rates, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions.

In determining the fair value of the tangible assets of an acquired property, we consider the value of the property as if it were vacant.

Acquired above and below-market leases are recorded at their fair values (using a discount rate which reflects the risks associated with the leases acquired) equal to the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for favorable leases and the initial term plus the term of any below-market fixed rate renewal options for unfavorable leases. Other intangible assets acquired include amounts for in-place lease values that are based on our evaluation of the specific characteristics of each tenant’s lease. Factors to be considered include estimates of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, we consider leasing commissions, legal and other related expenses.

REO is initially measured at fair value and is thereafter subject to an ongoing impairment analysis. Subsequent to an REO acquisition, events or circumstances may occur that result in a material and sustained change in the cash flows generated, or expected to be generated, from the property. REO is evaluated for recoverability when impairment indicators are identified. REO is considered for impairment when the sum of estimated future undiscounted cash flows to be generated by the REO over the estimated remaining holding period is less than the carrying value of the REO. An impairment loss is recorded when the carrying value of the REO exceeds its fair value. Any impairment loss is included in the consolidated statements of income (loss) and comprehensive income (loss).

See Note 2 to our Consolidated Financial Statements included in this Form 10-K for a listing and description of our significant accounting policies.

Recent Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see Note 2 to our Consolidated Financial Statements included in this Form 10-K.

Subsequent Events

For a discussion of subsequent events, see Note 16 to our Consolidated Financial Statements included in this Form 10-K.

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Loan Portfolio Details

The following table provides details with respect to our loans held for investment portfolio on a loan-by-loan basis as of December 31, 2025 (dollars in millions, except loan per square foot/unit):

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