Apollo Commercial Real Estate Finance, Inc.
For the period ended Dec 31, 2025. Filed Feb 10, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 10, 2026
ARI$2.32-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-10.
0000950170-25-017122
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-10.
0001193125-26-044725
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 143 current paragraphs.
86 unchanged; 34 reworded; 21 added; 36 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
For the year ended December 31, 2025, we recorded net income related to real estate owned of $8.5 million, compared to net income of $11.3 million for the year ended December 31, 2024. The decrease in net income is primarily due to an increase in operating expenses related to the Brooklyn Multifamily Development, as the property reached substantial completion during the second half of 2025 and the lease-up of the property continues to ramp up. We recorded a net loss from the property's operations of $1.3 million during the year ended December 31, 2025. There was no such activity during the year ended December 31, 2024 as the property was still under construction with no revenue streams generated and all expenses being capitalized. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.
Current report
Operating Expenses
Current report
General and administrative expenses decreased by $2.2 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in amortization of RSUs.
Current report
Income from Equity Method Investment
Current report
During the year ended December 31, 2025, we recorded net income from equity method investment of $15.4 million. The increase in net income attributable to the Massachusetts Healthcare JV was due to a $17.4 million net gain on litigation settlement recorded during the year ended December 31, 2025. This income was partially offset with a net loss from operations of the Massachusetts Healthcare JV during the year ended December 31, 2025. There was no such activity during the year ended December 31, 2024, as the Massachusetts Healthcare JV did not take title of the two hospitals until the first quarter of 2025.
Current report
Refer to "Note 6 – Other Assets" and "Note 16 – Commitments and Contingencies" for additional information.
Current report
During the year ended December 31, 2025, we recorded a $7.4 million net realized loss on investments, consisting of (i) a $1.2 million realized loss on the sale of a promissory note previously recorded as Note receivable, held for sale and (ii) a $6.2 million realized loss related to the discounted payoff of the Michigan Office Loan.
Current report
During the year ended December 31, 2025, we recorded a net decrease in our Specific CECL Allowance of $4.5 million. This amount consisted of: (i) a $1.3 million reversal and a $6.2 million write-off of our allowance related to the discounted payoff of our Michigan Office Loan; and (ii) a $3.0 million allowance on a commercial mortgage loan secured by a hotel in Chicago, IL.
Current report
Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 6 – Other Assets" for additional detail.
Current report
The General CECL Allowance increased by $7.7 million and $6.3 million during the years ended December 31, 2025 and 2024, respectively. The increases were primarily related to loan originations and the impacts of extending our expected loan repayment dates.
Current report
Distributable Earnings Prior to Realized Loss on Investments and Realized Gain from Litigation Settlement
Current report
During the year ended December 31, 2025, we recorded a realized loss on investments of $7.4 million consisting of (i) a $1.2 million realized loss on the sale of a promissory note previously recorded as Note receivable, held for sale and (ii) a $6.2 million realized loss related to the discounted payoff of the Michigan Office Loan. We also recorded a realized gain of $17.4 million within Income from equity method investment on our consolidated statement of operations from a litigation settlement with the Commonwealth of Massachusetts relating to the Massachusetts Healthcare Loan. Refer to "Note 3 – Fair Value Disclosure," "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net," "Note 6 – Other Assets" and "Note 16 – Commitments and Contingencies" for further discussion.
Current report
Modified loan treated as a new origination for accounting purposes.
Current report
There have been no material changes to our Critical Accounting Policies described under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Use of Estimates."
Current report
Supplemental U.S. Federal Income Tax Considerations
Current report
The following discussion supplements and updates the disclosures under the heading "U.S. Federal Income Tax Considerations" in each of the prospectus dated May 6, 2024, contained in our Registration Statement on Form S-3 (File No. 333-279158) filed with the SEC on May 6, 2024 and the prospectus dated November 3, 2023, contained in our Registration Statement on Form S-3 (File No. 333-275310) (the "Existing Tax Disclosure"). Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in the Existing Tax Disclosure.
Current report
On July 4, 2025, H.R. 1, informally known as the One Big Beautiful Bill Act (the "OBBB"), was enacted. The OBBB makes major changes to the Code, including some provisions of the Code that affect the taxation of REITs and their investors. In particular:
Current report
For taxable years beginning on or after January 1, 2026, the OBBB relaxed the REIT asset test requirement with respect to taxable REIT subsidiaries, providing that not more than 25% (relaxed from 20%) of the gross value of a REIT's assets may be represented by securities of one or more taxable REIT subsidiaries.
Current report
The OBBB permanently extended the pass-through qualified business income deduction, generally allowing individuals to deduct 20% of the aggregate amount of ordinary REIT dividends distributed by a REIT. This deduction was due to expire for tax years beginning on or after January 1, 2026.
Current report
The OBBB permanently extended the maximum U.S. federal income tax rate of 37%, which applies to ordinary income recognized by individuals and other non-corporate U.S. stockholders, for tax years beginning on or after January 1, 2026.
Current report
To the extent the information set forth in the Existing Tax Disclosure is inconsistent with this supplemental information, this supplemental information supersedes the information in the Existing Tax Disclosure. This supplemental information is provided on the same basis and subject to the same qualifications as are set forth in the first six paragraphs of the Existing Tax Disclosure as if those paragraphs were set forth in this Annual Report on Form 10-K.
Removed paragraphs (36)
Previous report
In March 2024, the SEC adopted amendments to its rules under the Securities Act and the Exchange Act that require disclosure of certain climate-related information in registration statements and annual reports, when material. In April 2024, the SEC chose to stay its newly adopted climate disclosure rules, pending the completion of judicial review. We are currently evaluating the impact of the new rule, if the stay is lifted, on our disclosures.
Previous report
Net income related to real estate owned remained generally the same for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Previous report
Management Fees
Previous report
Comparatively, during the year ended December 31, 2023, we recorded a net realized loss on investments of $86.6 million, consisting of (i) a $4.8 million realized loss related to the acquisition of the Atlanta Hotel through a deed-in-lieu of foreclosure and (ii) a $82.0 million realized loss on investments representing a write-off of previously recorded Specific CECL Allowance on one of our subordinate loans secured by an ultra-luxury residential property in Manhattan, NY. These losses were partially offset by a $0.2 million gain on investments recorded in connection with the sale of our entire interest in three commercial loans secured by properties in Europe and a partial interest in one commercial loan secured by property located in London, UK.
Previous report
Gain on Extinguishment of Debt
Previous report
During the year ended December 31, 2023, we repurchased $53.9 million aggregate principal amount of the 5.375% Convertible Senior Notes due 2023 (the "2023 Notes" or "Convertible Notes") at a weighted average price of 99.1%. As a result of this transaction, we recognized a $0.5 million gain on extinguishment of debt. We fully repaid the remaining principal of the 2023 Notes in cash at par during the fourth quarter of 2023.
Previous report
During the year ended December 31, 2023, we recorded a net increase to our Specific CECL Allowance of $59.5 million. The net increase consisted of a $141.5 million Specific CECL Allowance related to two mezzanine loans secured by the same ultra-luxury residential property in Manhattan, NY with a subsequent write-off of $82.0 million during the same period related to the most junior mezzanine loan which was deemed unrecoverable. The $82.0 million write-off of Specific CECL Allowance was recorded as a realized loss within net realized loss on investments in our 2023 consolidated statement of operations as discussed above.
Previous report
For the year ended December 31, 2024, we recorded a net increase in our General CECL Allowance of $6.3 million. The increase was primarily driven by loan originations and the increase in our view of remaining expected term of certain of our loans. The increase was partially offset by the effects of portfolio seasoning and earlier than expected loan repayments.
Previous report
During the year ended December 31, 2023, we recorded a net decrease in our General CECL Allowance of $0.1 million primarily driven by the effects of portfolio seasoning and loan repayments outpacing originations, which was partially offset by the increase in our view of remaining expected term of certain of our loans.
Previous report
Gain (loss) on interest rate hedges
Previous report
During the year ended December 31, 2024, we recorded a net gain of $0.6 million on our interest rate caps. The net gain was primarily driven by a $1.9 million realized gain recorded in relation to our construction financing interest rate cap. The realized gain was attributable to SOFR exceeding the interest rate cap's strike rate throughout the year. Additionally, we recorded a partially offsetting unrealized loss of $1.3 million, driven by a decrease in the interest rate cap's fair value, as it approached its maturity.
Previous report
During the year ended December 31, 2023, we recorded a net loss of $0.4 million primarily related to our 2026 Term Loan interest rate cap. Though we recorded a realized gain of $9.7 million driven by an increase in the applicable index rate above the interest rate cap's strike rate, this gain was offset by unrealized losses of $10.1 million, resulting from a decrease in the interest rate cap's fair value as it reached its June 2023 maturity.
Previous report
Refer to "Note 11 – Derivatives" for full discussion of interest rate caps.
Previous report
The weighted-average diluted shares outstanding used for Distributable Earnings per weighted-average diluted share has been adjusted from weighted-average diluted shares under GAAP to exclude shares issued from a potential conversion of the Convertible Notes. The Convertible Notes were fully repaid during the fourth quarter 2023, and as such, no adjustment was applied in 2024. Consistent with the treatment of other unrealized adjustments to Distributable Earnings, these potentially issuable shares are excluded until a conversion occurs. We believe that excluding shares issued in connection with a potential conversion of the Convertible Notes from our computation of Distributable Earnings per weighted-average diluted share is useful to investors for various reasons, including the following: (i) conversion of Convertible Notes to shares requires both the holder of a note to elect to convert the Convertible Note and for us to elect to settle the conversion in the form of shares; (ii) future conversion decisions by note holders will be based on our stock price in the future, which is presently not determinable; (iii) the exclusion of shares issued in connection with a potential conversion of the Convertible Notes from the computation of Distributable
Previous report
Earnings per weighted-average diluted share is consistent with how we treat other unrealized items in our computation of Distributable Earnings per weighted-average diluted share; and (iv) we believe that when evaluating our operating performance, investors and potential investors consider our Distributable Earnings relative to our actual distributions, which are based on shares outstanding and not shares that might be issued in the future.
Previous report
Net realized loss on investment for the year ended December 31, 2024 includes a realized loss of $127.5 million related to the Massachusetts Healthcare Loan and a $0.7 million loss on the sale of a commercial mortgage loan. Net realized loss on investment for the year ended December 31, 2023 includes (i) $4.8 million realized loss related to the acquisition of the hotel property in Atlanta, GA through a deed-in-lieu of foreclosure, (ii) $82.0 million realized loss representing a write-off of previously recorded Specific CECL Allowance on one of our subordinate loans secured by an ultra-luxury residential property in Manhattan, NY, (iii) $0.2 million net realized gain on loan sales. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for full discussion.
Previous report
$0.5 million realized gains on extinguishment of debt was recorded during the year ended December 31, 2023 in connection with partial repurchases of our 2023 Notes. See "Note 10 – Convertible Senior Notes, Net" for full discussion.
Previous report
The following table shows the changes in our book value per share:
Previous report
Includes net unrealized loss on forward currency contracts and interest hedges, and realized loss on forward currency contracts related to principal outside impact of forward points.
Previous report
We believe that presenting book value per share with sub-totals prior to the CECL Allowances and depreciation is useful for investors for various reasons, including, among other things, analyzing our compliance with financial covenants related to tangible net worth and debt-to-equity under our secured debt arrangements and senior secured term loan, which permit us to add the General CECL Allowance to our GAAP stockholders' equity. Given that our lenders consider book value per share prior to the General CECL Allowance as an important metric related to our debt covenants, we believe disclosing book value per share prior to the General CECL Allowance is important to investors such that they have the same visibility. We further believe that presenting book value before depreciation and amortization is useful to investors since it is a non-cash expense included in net income and is not representative of our core business and ongoing operations.
Previous report
Loan matured in September 2024. Negotiations with sponsor currently in process.
Previous report
Includes average month end asset and debt balance of a commercial mortgage loan, held for sale.
Previous report
Secured Credit Facilities
Previous report
Barclays Private Securitization
Previous report
We are party to a private securitization with Barclays Bank plc ("Barclays") (such securitization, the "Barclays Private Securitization"). Commercial mortgage loans currently financed under the Barclays Private Securitization are denominated in GBP, EUR and SEK.
Previous report
Refer to "Note 7 – Secured Debt Arrangements, Net" of our consolidated financial statements for additional disclosure regarding our Barclays Private Securitization.
Previous report
Revolving Credit Facility
Previous report
In March 2023, we entered into a Revolving Credit Facility. The Revolving Credit Facility matures in March 2026 and is secured by certain of our qualifying commercial mortgage loans and real property owned assets. As of December 31, 2024, the Revolving Credit Facility had a capacity of $160.0 million and requires that we maintain an interest coverage ratio of 1.3:1.
Previous report
Refer to "Note 7 – Secured Debt Arrangements, Net" of our consolidated financial statements for additional disclosure regarding our Revolving Credit Facility.
Previous report
Senior Secured Term Loans
Previous report
In May 2019, we entered into the $500.0 million 2026 Term Loan (the "2026 Term Loan") and in March 2021, we entered into the $300.0 million senior secured term loan, with substantially the same terms as the 2026 Term Loan, (the "2028 Term Loan" and, together with the 2026 Term Loan, the "Term Loans"). The Term Loans are amortizing with repayments of 0.25% per quarter of the total committed principal.
Previous report
In June 2021, we issued $500.0 million of 4.625% Senior Secured Notes due 2029 (the "2029 Notes"), for which we received net proceeds of $495.0 million, after deducting initial purchasers' discounts and commissions.
Previous report
In August 2022, we obtained construction financing on the Brooklyn Multifamily Development property. The construction financing includes a maximum commitment of $388.4 million, $164.8 million of which was funded when we acquired legal title of the property. As of December 31, 2024, the construction financing had a carrying value of $252.0 million, net of $2.0 million in deferred financing costs.
Previous report
In June 2024, we obtained a $73.7 million mortgage secured by our D.C. Hotel property (as defined in "Note 3 - Fair Value Disclosure"). As of December 31, 2024, the mortgage had a carrying value of $72.6 million, net of $1.1 million in deferred financing costs.
Previous report
Repurchases of Equity Securities
Previous report
In March 2020, our board of directors approved a stock repurchase program for up to $150.0 million of our common stock and in February 2021, approved the repurchase of an additional $150.0 million of our common stock. During the year ended December 31, 2024, we repurchased 4,013,405 shares of our common stock under this program at a weighted-average price of $10.15 per share.
Reworded paragraphs (34)
Previous wording
We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $751.0 billion as of December 31, 2024.
Current wording
We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $938.4 billion as of December 31, 2025.
Previous wording
Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current wording
On January 27, 2026, we entered into the Purchase Agreement with Athene. In connection with the Asset Sale, we also entered into the Management Agreement Side Letter with Operating LLC and the Manager, and the Expense Reimbursement Letter Agreement with Apollo Management Holdings. The Company is externally managed and advised by the Manager, which is a subsidiary of Apollo, and each of Athene and Apollo Management Holdings is a subsidiary of Apollo. The Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Purchase Agreement, Athene will purchase from the Company, and the Company will sell to Athene, the Loans as of the Closing, other than two loans with a combined total principal balance of $146 million, as of December 31, 2025, currently held by the Company which are expected to be repaid prior to the Closing. Refer to "Note 20 - Subsequent Events" to the accompanying consolidated financial statements for further detail.
Previous wording
For the years ended December 31, 2024 and 2023, our net income (loss) available to common stockholders was ($131.9) million, or ($0.97) per diluted share of common stock, and $45.9 million, or $0.29 per diluted share of common stock, respectively.
Current wording
For the years ended December 31, 2025 and 2024, our net income (loss) available to common stockholders was $114.4 million, or $0.81 per diluted share of common stock, and ($131.9) million, or ($0.97) per diluted share of common stock, respectively.
Previous wording
Net interest income decreased by $53.2 million during the year ended December 31, 2024 compared to the year ended December 31, 2023. This net decrease was primarily attributable to a decrease in interest income from (i) higher average balance of loans on non-accrual in 2024, (ii) realization of a loss on investment during 2024, and (iii) modifying two commercial mortgage loans from floating to fixed rate terms in 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current wording
Net interest income decreased by $32.3 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily attributable to lower average index rates during the year ended December 31, 2025, realization of a loss on investment during the third quarter of 2024 and modification of two of our commercial mortgage loans converting them from floating rate loans to fixed rate loans during the second quarter of 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Previous wording
Management fees expense decreased by $1.9 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to a decrease in stockholders' equity (as defined in the Management Agreement) as a result of increased Specific CECL Allowance and realized losses on investments recorded during the year ended December 31, 2024.
Current wording
Management fees expense decreased by $2.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a decrease in Stockholders' Equity (as defined in the Management Agreement) during the year ended December 31, 2025.
Previous wording
During the year ended December 31, 2024, we recorded a $128.2 million net realized loss on investments, consisting of (i) a $127.5 million realized loss related to the extinguishment of the Massachusetts Healthcare Loan (as defined in "Note 4 -
Current wording
Comparatively, during the year ended December 31, 2024, we recorded a $128.2 million net realized loss on investments, consisting of (i) a $127.5 million realized loss related to the extinguishment of the Massachusetts Healthcare Loan, and (ii) a $0.7 million realized loss related to the sale of a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI.
Previous wording
Increase in Specific CECL Allowance, net
Current wording
Decrease (increase) in Specific CECL Allowance, net
Previous wording
During the year ended December 31, 2024, we recorded a net increase in our Specific CECL Allowance of $149.5 million, related to two of our subordinate loans. During the first quarter of 2024, we recorded a $142.0 million Specific CECL Allowance related to a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY, primarily attributable to a reduction in list pricing of remaining units and slower sales pace at the property. During the second quarter of 2024, we recorded a Specific CECL Allowance of $7.5 million on a subordinate loan secured by our interest in a Class A office building in Troy, MI, attributable to low occupancy and limited leasing activity in the property's submarket. Additionally, we recorded an increase and subsequent write-off of $127.5 million of our Specific CECL Allowance related to the Massachusetts Healthcare Loan. The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our consolidated statement of operations as discussed above.
Current wording
Comparatively, during the year ended December 31, 2024, we recorded a net increase in our Specific CECL Allowance of $149.5 million related to two of our subordinate loans. This amount consisted of: (i) a $142.0 million allowance recorded in the first quarter of 2024 for a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY; and (ii) a $7.5 million allowance recorded during the second quarter of 2024 for the Michigan Office Loan. Additionally, we recorded an increase and subsequent write-off of $127.5 million of our Specific CECL Allowance related to the Massachusetts Healthcare Loan. The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our December 31, 2024 consolidated statement of operations.
Previous wording
Decrease (increase) in General CECL Allowance, net
Current wording
Increase in General CECL Allowance, net
Previous wording
Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the year ended December 31, 2024 and year ended December 31, 2023 was a net gain of $15.1 million and $3.8 million, respectively.
Current wording
Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the years ended December 31, 2025 and 2024 were net gains of $0.8 million and $15.1 million, respectively. The decrease in the net gain for the year ended December 31, 2025 compared to the year ended December 31, 2024 was predominantly due to higher forward point estimates for the year ended December 31, 2025.
Previous wording
For the year ended December 31, 2024, our Distributable Earnings were $61.3 million, or $0.43 per share, as compared to $157.5 million, or $1.09 per share for the prior year.
Current wording
For the year ended December 31, 2025, our Distributable Earnings were $148.7 million, or $1.05 per share, as compared to $61.3 million, or $0.43 per share for the prior year.
Previous wording
Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were no incremental shares included in the year ended December 31, 2024. For 2023, the weighted-average diluted shares for GAAP were determined using the "if-converted" method.
Current wording
Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were no incremental shares included in the years ended December 31, 2025 and 2024
Previous wording
We believe it is useful to our investors to present Distributable Earnings prior to net realized loss on investments and gain on extinguishment of debt to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to net realized loss on investments and gain on extinguishment of debt, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.
Current wording
We believe it is useful to our investors to present Distributable Earnings prior to realized loss on investments and realized gain from litigation settlement to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized gain from litigation settlement, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.
Previous wording
Commercial Mortgage Loans and Other Lending Assets, Net"), and (ii) a $0.7 million realized loss related to the sale of a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current wording
During the year ended December 31, 2024, we recorded a realized loss on investments of $128.2 million consisting of (i) a $127.5 million realized loss related to the Massachusetts Healthcare Loan and (ii) a $0.7 million realized loss on the sale of a commercial mortgage loan. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 6 – Other Assets" for further discussion.
Previous wording
The table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings and Distributable Earnings prior to net realized loss on investments and gain on extinguishment of debt ($ in thousands):
Current wording
Accordingly, the table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized gain on litigation settlement ($ in thousands):
Previous wording
During the year ended December 31, 2024, we committed $1.9 billion of capital to new loans ($1.3 billion was funded at closing), and provided $627.4 million of add-on fundings, including £168 million ($213 million in USD) to a first mortgage loan secured by a portfolio of pubs across the United Kingdom, that was originated in December 2023. During the year ended December 31, 2024, we received $2.5 billion in loan repayments and sales.
Current wording
During the year ended December 31, 2025, we committed $4.4 billion of capital to new loans ($3.3 billion was funded at closing), and provided $899.4 million of add-on fundings. During the year ended December 31, 2025, we received $2.9 billion in repayments and sales of loans and other lending assets.
Previous wording
Gross of deferred financing costs of $8.8 million.
Current wording
Gross of deferred financing costs of $8.7 million.
Previous wording
The following table provides additional details of our commercial mortgage loans, subordinate loans, and other lending assets portfolio as of December 31, 2024 ($ in millions):
Current wording
The following table provides additional details of our commercial mortgage loan portfolio and subordinate loan portfolio as of December 31, 2025 ($ in millions):
Previous wording
Our portfolio benefits from our core investment strategy whereby we target assets that are secured by institutional quality real estate throughout the United States and Europe. As discussed in Item 1. "Business—Investment Strategy" of this annual report on Form 10-K, the Manager has implemented underwriting standards which place a particular emphasis on due diligence of prospective investments' sponsors and borrowers, as well as assessment of the risk/return profile and appropriate structure of each investment opportunity. As of December 31, 2024, our portfolio's weighted-average origination loan to value ("LTV") ratio was 57%, excluding risk-rated 5 loans. This reflects significant equity value which we believe our loan sponsors would be committed to protect during periods of volatility and market disruption.
Current wording
Our portfolio benefits from our core investment strategy whereby we target assets that are secured by institutional quality real estate throughout the United States and Europe. As discussed in Item 1. "Business—Investment Strategy" of this annual report on Form 10-K, the Manager has implemented underwriting standards which place a particular emphasis on due diligence of prospective investments' sponsors and borrowers, as well as assessment of the risk/return profile and appropriate structure of each investment opportunity. As of December 31, 2025, our portfolio's weighted-average origination loan to value ("LTV") ratio was 59%, excluding risk-rated "5" loans. This reflects significant equity value which we believe our loan sponsors would be committed to protect during periods of volatility and market disruption.
Previous wording
$5.9 million of the General CECL Allowance for 2024 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our consolidated balance sheets.
Current wording
$5.8 million of the General CECL Allowance for 2025 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our consolidated balance sheets.
Previous wording
At December 31, 2024, our debt-to-equity ratio was 3.2 and our portfolio was comprised of $6.7 billion of commercial mortgage loans and $0.4 billion of subordinate loans and other lending assets. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.
Current wording
At December 31, 2025, our debt-to-equity ratio was 4.1 and our portfolio was comprised of $8.7 billion of commercial mortgage loans and $0.1 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.
Previous wording
Represents total debt less cash and net loan proceeds held by servicer (recorded with Other Assets, see "Note 6– Other Assets" for more information) to total stockholders' equity, gross of General CECL Allowance.
Current wording
Represents total debt less cash and net loan proceeds held by servicer (recorded with Other Assets, see "Note 6– Other Assets" for more information) to total stockholders' equity.
Previous wording
Our current debt obligations consist of $1.3 billion, at face value, of corporate debt, $4.8 billion of asset specific financings, and $327.7 million of debt related to real estate owned, held for investment. Our corporate debt includes $761.3 million of term loan borrowings and $500.0 million of senior secured notes. Our asset specific financings are generally tied to the underlying loans, and we anticipate repayments of $1.0 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.
Current wording
Our current debt obligations consist of $1.2 billion, at face value, of corporate debt, $6.3 billion of secured debt arrangements, and $425.8 million of debt related to real estate owned, held for investment. Our corporate debt includes $746.3 million of term loan borrowings and $500.0 million of senior secured notes. Our secured debt arrangements are generally term-matched to the underlying loans, and we anticipate repayments of $0.7 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.
Previous wording
In addition to our debt obligations, as of December 31, 2024, we had $840.6 million of unfunded loan commitments. We expect that approximately $396.9 million will be funded to existing borrowers in the short term.
Current wording
In addition to our debt obligations, as of December 31, 2025, we had $1.0 billion of unfunded loan commitments. We expect that approximately $590.9 million will be funded to existing borrowers in the short term.
Previous wording
As of December 31, 2024, we had $317.4 million of cash on hand, $50.8 million of loan proceeds held by servicer and held approximately $507.2 million of unencumbered assets. We also had $2.1 billion of undrawn capacity under our secured debt arrangements and $134.5 million of additional capacity on our construction financing secured by our Brooklyn Multifamily Development property (as defined in "Note 3 - Fair Value Disclosure"), which is available to fund future construction costs.
Current wording
Our primary sources of liquidity as of December 31, 2025 were represented with $139.8 million of cash on hand, $4.2 million of loan proceeds held by servicer, $6.9 million of available borrowings under our financing arrangements based on existing collateral and cash flows from operations. Additionally, as of December 31, 2025, we held approximately $431.1 million of unencumbered assets and have $36.3 million of additional capacity on our construction financing secured by our Brooklyn Multifamily Development property which is available to fund future construction costs.
Previous wording
Maturity dates represent the weighted-average maturities based on borrowings outstanding, and assume that all extension options are exercised at our discretion, subject to the consent of financing providers where applicable.
Current wording
Maturity dates represent weighted-average maturities based on borrowings outstanding and assumes extensions at our option are exercised with consent of financing providers, where applicable.
Previous wording
As of December 31, 2024, we had nine secured credit counterparties through wholly-owned subsidiaries. During the year ended December 31, 2024, we entered into one new credit facility and upsized two of our existing credit facilities which provided additional capacity of £366.6 million ($458.8 million converted into USD) and $413.5 million, respectively. Furthermore, we have repaid the full amount of borrowings outstanding on both the Goldman Sachs USD and Santander EUR facilities.
Current wording
As of December 31, 2025, we had six secured credit counterparties through wholly-owned subsidiaries.
Previous wording
As of December 31, 2024, we had £716.8 million, €493.9 million, and kr2.0 billion ($1.6 billion assuming conversion into USD as of December 31, 2024) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.
Current wording
As of December 31, 2025, we had £698.3 million, €335.1 million, and kr1.9 billion ($1.5 billion assuming conversion into USD as of December 31, 2025) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.
Previous wording
Refer to "Note 8 – Senior Secured Term Loans, Net" of our consolidated financial statements for additional disclosure regarding our 2026 Term Loan and 2028 Term Loan.
Current wording
As of December 31, 2025, we held one senior secured term loan, our 2030 Term Loan, which represents the refinancing of our 2026 and 2028 Term Loans that were outstanding as of December 31, 2024. Refer to "Note 8 – Senior Secured Term Loans, Net" for discussion of the refinance.
Previous wording
Refer to "Note 7 – Secured Debt Arrangements, Net" of our consolidated financial statements for additional disclosure regarding our secured credit facilities.
Current wording
Refer to "Note 7 – Secured Debt Arrangements, Net" of our consolidated financial statements for additional disclosure regarding our secured credit facilities, Barclays Private Securitization, and revolving credit facility.
Previous wording
Refer to "Note 9 – Senior Secured Notes, Net" of our consolidated financial statements for additional disclosure regarding our 2029 Notes.
Current wording
Refer to "Note 8 – Senior Secured Term Loans, Net" and "Note 9 – Senior Secured Notes, Net" of our consolidated financial statements for additional disclosure regarding our Senior Secured Term Loans and Senior Secured Notes, respectively.
Previous wording
As of December 31, 2024 and December 31, 2023, we had 6,770,393 shares of our Series B-1 Preferred Stock (as defined in "Note 17 - Stockholders' Equity") outstanding. The Series B-1 Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: at a rate of 7.25% per annum of the $25.00 per share liquidation preference. Except under certain limited circumstances, the Series B-1 Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. On and after July 15, 2026, we may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid dividends to, but not including, the date of the redemption.
Current wording
As of December 31, 2025 and December 31, 2024, we had 6,770,393 shares of our Series B-1 Preferred Stock outstanding. The Series B-1 Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: at a rate of 7.25% per annum of the $25.00 per share liquidation preference. Except under certain limited circumstances, the Series B-1 Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. On and after July 15, 2026, we may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid dividends to, but not including, the date of the redemption.
Previous wording
In order to maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or deed-in-lieu of foreclosure. Foreclosed properties are classified as real estate owned and recognized at fair value on our consolidated balance sheets in accordance with the acquisition method under Accounting Standards Codification ("ASC") Topic 805, "Business Combinations" ("ASC 805"). Real estate assets acquired may include land, building, furniture, fixtures and equipment ("FF&E") and intangible assets. In accordance ASC 820, we may utilize the income, market or cost approach (or combination thereof) to determine fair value.
Current wording
In order to maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or deed-in-lieu of foreclosure. Foreclosed properties are classified as real estate owned and recognized at fair value on our consolidated balance sheets in accordance with the acquisition method under ASC 805. Real estate assets acquired may include land, building, FF&E, and intangible assets. In accordance ASC 820, we may utilize the income, market, or cost approach (or combination thereof) to determine fair value.
Previous wording
Please refer to "Note 3 – Fair Value Disclosure" and "Note 5 – Assets and Liabilities Related to Real Estate Owned" for more information regarding real estate owned and our valuation methodology as well as "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements.
Current wording
Please refer to "Note 3 – Fair Value Disclosure" and "Note 5 – Real Estate Owned" for more information regarding real estate owned and our valuation methodology as well as "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Refer to "Note 3 – Fair Value Disclosure" and "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current report — wording carried from elsewhere
For a complete listing and description of our significant accounting policies, refer to "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 5 – Real Estate Owned" for additional detail.
Previous report — wording carried elsewhere
The net gain for the year ended December 31, 2024 was higher than the net gain for the year ended December 31, 2023 due to lower forward point estimates.
Previous report — wording carried elsewhere
Debt Related to Real Estate Owned