Claros Mortgage Trust, Inc.

Previous wording

As a CRE finance company, we believe the key financial measures and indicators for our business are net income (loss) per share, Distributable Earnings (Loss) per share, Distributable Earnings (Loss) per share prior to realized gains and losses, which such gains and losses include charge-offs of principal, accrued interest receivable, and/or exit fees, dividends declared per share, book value per share, adjusted book value per share, Net Debt-to-Equity Ratio and Total Leverage Ratio. During the three months ended June 30, 2026, we had net loss per share of $1.81, Diluted Distributable Loss per share of $0.63, Diluted Distributable Loss per share prior to realized gains and losses of $0.07, and our Board did not declare any dividends. As of June 30, 2026, our book value per share was $8.58, our adjusted book value per share was $9.06, our Net Debt-to-Equity Ratio was 2.0x, and our Total Leverage Ratio was 2.7x. We use Net Debt-to-Equity Ratio and Total Leverage Ratio, financial measures which are not prepared in accordance with GAAP, to evaluate our financial leverage, which in the case of our Total Leverage Ratio, makes certain adjustments that we believe provide a more conservative measure of our financial condition.

Current wording

As a CRE finance company, we believe the key financial measures and indicators for our business are net income (loss) per share, Distributable Earnings (Loss) per share, Distributable Earnings (Loss) per share prior to realized gains and losses, which such gains and losses include charge-offs of principal, accrued interest receivable, and/or exit fees, dividends declared per share, book value per share, adjusted book value per share, Net Debt-to-Equity Ratio and Total Leverage Ratio. During the three months ended September 30, 2026, we had net loss per share of $0.10, Diluted Distributable Loss per share of $0.08, Diluted Distributable Loss per share prior to realized gains and losses of $0.05, and our Board did not declare any dividends. As of September 30, 2026, our book value per share was $8.49, our adjusted book value per share was $9.00, our Net Debt-to-Equity Ratio was 1.7x, and our Total Leverage Ratio was 2.4x. We use Net Debt-to-Equity Ratio and Total Leverage Ratio, financial measures which are not prepared in accordance with GAAP, to evaluate our financial leverage, which in the case of our Total Leverage Ratio, makes certain adjustments that we believe provide a more conservative measure of our financial condition.

Previous wording

During the six months ended June 30, 2026 and the year ended December 31, 2025, our Board did not declare any dividends. The timing and amount of any future dividends declared by our Board depend on a variety of factors, including cash generated by operating activities, our financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code, and such other factors as our Board deems relevant. We may use net operating losses carried forward to offset future net taxable income, and therefore reduce our dividend requirements, subject to certain limitations as prescribed by the Internal Revenue Code which may change from time-to-time.

Current wording

During the nine months ended September 30, 2026 and the year ended December 31, 2025, our Board did not declare any dividends. The timing and amount of any future dividends declared by our Board depend on a variety of factors, including cash generated by operating activities, our financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code, and such other factors as our Board deems relevant. We may use net operating losses carried forward to offset future net taxable income, and therefore reduce our dividend requirements, subject to certain limitations as prescribed by the Internal Revenue Code which may change from time to time.

Previous wording

For the three months ended June 30, 2026 and three months ended March 31, 2026, amount excludes 7,542,227 and 5,111,954 of weighted average warrants, respectively, as the exercise price of $4.00 per share exceeded the average closing share price of our common stock.

Current wording

For the three months ended September 30, 2026 and three months ended June 30, 2026, amount excludes 7,542,227 and 7,542,227, respectively, of weighted average warrants as the exercise price of $4.00 per share exceeded the average closing share price of our common stock.

Previous wording

For the three months ended June 30, 2026, amount includes a $0.4 million charge-off of accrued interest receivable related to the mortgage foreclosure on a multifamily property in May 2026. For the three months ended March 31, 2026, amount includes a $12.9 million charge-off of accrued interest receivable and a $0.3 million charge-off of an exit fee related to the sale of a hospitality loan in March 2026.

Current wording

For the three months ended September 30, 2026, amount includes a $0.1 million charge-off of an exit fee related to the discounted payoff of a multifamily loan in July 2026. For the three months ended June 30, 2026, amount includes a $0.4 million charge-off of accrued interest receivable related to the mortgage foreclosure on a multifamily property in May 2026.

Previous wording

Reflects previously recognized depreciation and amortization on the multifamily real estate owned asset that was sold during the three months ended June 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss).

Current wording

Reflects previously recognized depreciation and amortization on one of our multifamily real estate owned assets that was sold during the three months ended June 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss).

Previous wording

Reflects previously recognized depreciation and amortization on (i) our mixed-use real estate owned asset and (ii) one of our multifamily real estate owned assets upon reclassification of the respective assets to held-for-sale during the three months ended June 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss).

Current wording

Reflects previously recognized depreciation and amortization on (i) our mixed-use real estate owned asset upon reclassification to held-for-sale and (ii) one of our multifamily real estate owned assets upon reclassification to held-for-sale during the three months ended June 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss).

Previous wording

Represents the weighted average annualized yield to initial maturity of each loan, inclusive of coupon, and fees received, based on the applicable floating benchmark rate/floors (if applicable), in place as of June 30, 2026. For loans placed on non-accrual, the annualized yield to initial maturity used in calculating the weighted average annualized yield to initial maturity is 0%.

Current wording

Represents the weighted average annualized yield to initial maturity of each loan, inclusive of coupon, and fees received, based on the applicable floating benchmark interest rate/floors (if applicable), in place as of September 30, 2026. For loans placed on non-accrual, the annualized yield to initial maturity used in calculating the weighted average annualized yield to initial maturity is 0%.

Previous wording

Origination LTV represents “loan-to-value” or “loan-to-cost,” which is calculated as our total loan commitment upon origination, as if fully funded, plus any financings that are pari passu with or senior to our loan, divided by our estimate of either (1) the value of the underlying real estate, determined in accordance with our underwriting process (typically consistent with, if not less than, the value set forth in a third-party appraisal) or (2) the borrower’s projected, fully funded cost basis in the asset, in each case as we deem appropriate for the relevant loan and other loans with similar characteristics. Underwritten values and projected costs should not be assumed to reflect our judgment of current market values or project costs, which may have changed materially since the date of origination. Weighted average origination LTV of 73.3% is based on loan commitment, including non-consolidated senior interests and pari passu interests, and excludes risk rated 5 loans.

Current wording

Origination LTV represents “loan-to-value” or “loan-to-cost,” which is calculated as our total loan commitment upon origination, as if fully funded, plus any financings that are pari passu with or senior to our loan, divided by our estimate of either (1) the value of the underlying real estate, determined in accordance with our underwriting process (typically consistent with, if not less than, the value set forth in a third-party appraisal) or (2) the borrower’s projected, fully funded cost basis in the asset, in each case as we deem appropriate for the relevant loan and other loans with similar characteristics. Underwritten values and projected costs should not be assumed to reflect our judgment of current market values or project costs, which may have changed materially since the date of origination.

Previous wording

Subsequent to June 30, 2026, we resolved $409.5 million of unpaid principal balance prior to charge-offs, including $186.4 million of watchlist loans. Such resolutions included (i) $223.1 million of full loan repayments, (ii) a $111.5 million loan sale below par, and (iii) a $74.9 million discounted loan payoff.

Current wording

During the three months ended September 30, 2026, we resolved $409.5 million of unpaid principal balance prior to charge-offs, including $186.4 million of watchlist loans, and received $8.0 million of partial loan repayments. Such resolutions included (i) $223.1 million of full loan repayments, (ii) a $111.5 million loan sale below par, and (iii) a $74.9 million discounted loan payoff.

Previous wording

During the three months ended June 30, 2026, we resolved $25.4 million of unpaid principal balance prior to charge-offs through a mortgage foreclosure and received $20.9 million of partial loan repayments. During the six months ended June 30, 2026, we resolved $634.2 million of unpaid principal balance prior to charge-offs, including $460.3 million of watchlist loans, and received $24.8 million of partial loan repayments. Such resolutions included (i) $240.8 million of full loan repayments, (ii) a $220.0 million loan sale below par, (iii) $102.0 million of mortgage foreclosures prior to charge-offs, and (iv) $71.4 million related to the assignment of our right, title, and interest in a loan receivable and the collateral property to our financing counterparty in exchange for full extinguishment of amounts due under the related financing.

Current wording

During the nine months ended September 30, 2026, we resolved $1.0 billion of unpaid principal balance prior to charge-offs, including $646.8 million of watchlist loans, and received $32.8 million of partial loan repayments. Such resolutions included (i) $463.8 million of full loan repayments, (ii) $331.5 million of loan sales below par, (iii) $102.0 million of mortgage foreclosures prior to charge-offs, (iv) a $74.9 million discounted loan payoff, and (v) $71.4 million related to the assignment of our right, title, and interest in a loan receivable and the collateral property to our financing counterparty in exchange for full extinguishment of amounts due under the related financing.

Previous wording

To maximize recovery from certain defaulted loans, we have assumed legal title and/or physical possession of the collateral property underlying such loan receivables. As of June 30, 2026, our portfolio includes nine real estate owned assets with a total carrying value of $723.7 million (including related net lease intangible assets and deferred leasing costs), of which one was acquired through a mortgage foreclosure during the quarter ended June 30, 2026. Such real estate owned assets are not included in the summary of our loan portfolio table above. The following table details the carrying value of each of our real estate owned assets reflected on our consolidated balance sheet as of June 30, 2026 ($ in thousands):

Current wording

To maximize recovery from certain defaulted loans, we have assumed legal title and/or physical possession of the collateral property underlying such loan receivables. As of September 30, 2026, our portfolio includes eight real estate owned assets with a total carrying value of $700.7 million (including related net lease intangible assets and deferred leasing costs). Such real estate owned assets are not included in the summary of our loan portfolio table above. The following table details the carrying value of each of our real estate owned assets reflected on our consolidated balance sheet as of September 30, 2026 ($ in thousands):

Previous wording

The following table presents detail related to changes in our real estate owned held-for-investment, net, during the six months ended June 30, 2026 ($ in thousands):

Current wording

The following table presents detail related to changes in our real estate owned held-for-investment, net, during the nine months ended September 30, 2026 ($ in thousands):

Previous wording

Fair values of collateral assets used to determine the initial estimated fair value of real estate owned are calculated using a discounted cash flow model, a sales comparison approach, or a market capitalization approach. Estimates of fair values used to determine real estate owned upon acquisition may include, among others, assumptions of property specific cash flows over estimated holding periods, assumptions of property redevelopment costs, assumptions of leasing activities, discount rates, market and terminal capitalization rates, and, with respect to land, value per buildable square foot. These assumptions are based upon the nature of the properties, recent and projected property cash flows, recent sales and lease comparables, and anticipated real estate and capital market conditions, among other factors which we may deem relevant. Estimates of fair values used to determine real estate owned upon acquisition during the six months ended June 30, 2026 include assumptions of a market capitalization rate ranging from 5.00% to 5.75% and a discount rate of 8.00%.

Current wording

Fair values of collateral assets used to determine the initial estimated fair value of real estate owned are calculated using a discounted cash flow model, a sales comparison approach, or a market capitalization approach. Estimates of fair values used to determine real estate owned upon acquisition may include, among others, assumptions of property specific cash flows over estimated holding periods, assumptions of property redevelopment costs, assumptions of leasing activities, discount rates, market and terminal capitalization rates, and, with respect to land, value per buildable square foot. These assumptions are based upon the nature of the properties, recent and projected property cash flows, recent sales and lease comparables, and anticipated real estate and capital market conditions, among other factors which we may deem relevant. Estimates of fair values used to determine real estate owned upon acquisition during the nine months ended September 30, 2026 include assumptions of a market capitalization rate ranging from 5.00% to 5.75% and a discount rate of 8.00%.

Previous wording

The current expected credit loss reserve required under GAAP reflects our current estimate of potential credit losses related to our loan portfolio, which may fluctuate depending on market conditions and changes in our loan portfolio. See Note 2 to our consolidated financial statements for further detail of our current expected credit loss reserve methodology. The following table illustrates the changes in the current expected credit loss reserve for our loans receivable held-for-investment for the six months ended June 30, 2026 and 2025 ($ in thousands):

Current wording

The current expected credit loss reserve required under GAAP reflects our current estimate of potential credit losses related to our loan portfolio, which may fluctuate depending on market conditions and changes in our loan portfolio. See Note 2 to our consolidated financial statements for further detail of our current expected credit loss reserve methodology. The following table illustrates the changes in the current expected credit loss reserve for our loans receivable held-for-investment for the nine months ended September 30, 2026 and 2025 ($ in thousands):

Previous wording

Fair values of collateral assets used to determine specific CECL reserves are calculated using a discounted cash flow model, a sales comparison approach, or a market capitalization approach. Estimates of fair values used to determine specific CECL reserves may include, among others, assumptions of property specific cash flows over estimated holding periods, assumptions of property redevelopment costs, assumptions of leasing activities, discount rates, market and terminal capitalization rates, and, with respect to land, value per buildable square foot. These assumptions are based upon the nature of the properties, recent and projected property cash flows, recent sales and lease comparables, and anticipated real estate and capital market conditions, among other factors which we may deem relevant. Estimates of fair values used to determine specific CECL reserves as of June 30, 2026 include discount rates ranging from 6.0% to 20.0%, market and terminal capitalization rates ranging from 4.72% to 8.75%, and, with respect to the land loan, value per buildable square foot of $140 based on current entitlements.

Current wording

Fair values of collateral assets used to determine specific CECL reserves are calculated using a discounted cash flow model, a sales comparison approach, or a market capitalization approach. Estimates of fair values used to determine specific CECL reserves may include, among others, assumptions of property specific cash flows over estimated holding periods, assumptions of property redevelopment costs, assumptions of leasing activities, discount rates, market and terminal capitalization rates, and, with respect to land, value per buildable square foot. These assumptions are based upon the nature of the properties, recent and projected property cash flows, recent sales and lease comparables, and anticipated real estate and capital market conditions, among other factors which we may deem relevant. Estimates of fair values used to determine specific CECL reserves as of September 30, 2026 include discount rates ranging from 6.0% to 20.0%, market and terminal capitalization rates ranging from 4.61% to 8.75%, and, with respect to the land loan, value per buildable square foot of $140 based on current entitlements.

Previous wording

Weighted average spread over the applicable benchmark rate is based on unpaid principal balance. SOFR as of June 30, 2026 was 3.65%.

Current wording

Weighted average spread over the applicable benchmark interest rate is based on unpaid principal balance. SOFR as of September 30, 2026 was 3.91%.

Previous wording

We finance certain of our loans and multifamily real estate owned properties using repurchase agreements and a term participation facility. As of June 30, 2026, aggregate borrowings outstanding under our repurchase agreements and term participation facility totaled $1.9 billion, with a weighted average spread of SOFR plus 2.87% per annum based on unpaid principal balance. As of June 30, 2026, the loans receivable securing the outstanding borrowings under these facilities had a weighted average term to initial maturity and fully extended maturity of 0.4 years and 0.8 years, respectively, assuming all conditions to extend are met. Further, we have a repurchase agreement that specifically provides for the ability to finance (i) loans receivable, including those which may be delinquent or in default, and (ii) real estate owned assets subsequent to assuming legal title and/or physical possession of the collateral property. As of June 30, 2026, $199.2 million of borrowings outstanding relate to our multifamily real estate owned assets.

Current wording

We finance certain of our loans and multifamily real estate owned properties using repurchase agreements and a term participation facility. As of September 30, 2026, aggregate borrowings outstanding under our repurchase agreements and term participation facility totaled $1.5 billion, with a weighted average spread of SOFR plus 2.85% per annum based on unpaid principal balance. As of September 30, 2026, the loans receivable securing the outstanding borrowings under these facilities had a weighted average term to initial maturity and fully extended maturity of 0.3 years and 0.4 years, respectively, assuming all conditions to extend are met. Further, we have a repurchase agreement that specifically provides for the ability to finance (i) loans receivable, including those which may be delinquent or in default, and (ii) real estate owned assets subsequent to assuming legal title and/or physical possession of the collateral property. As of September 30, 2026, $178.6 million of borrowings outstanding relate to our multifamily real estate owned assets.

Previous wording

In January 2026, we refinanced our prior secured term loan with a new secured term loan which provides for an aggregate principal amount of $500.0 million and a maturity date of January 30, 2030. Our secured term loan is presented net of any discounts and transaction costs which are deferred and recognized as interest expense over the life of the loan using the effective interest method. As of June 30, 2026, our secured term loan has an unpaid principal balance of $500.0 million and a carrying value of $467.7 million. As consideration for and in connection with entering into our new secured term loan in January 2026, we issued detachable warrants to purchase up to 7,542,227 shares of our common stock at an exercise price of $4.00 per share, with an expiration date of January 2037. Value allocated to the detachable warrants is classified as equity and created a corresponding discount on our secured term loan in the same amount.

Current wording

In January 2026, we refinanced our prior secured term loan with a new secured term loan which provides for an aggregate principal amount of $500.0 million and a maturity date of January 30, 2030. Our secured term loan is presented net of any discounts and transaction costs which are deferred and recognized as interest expense over the life of the loan using the effective interest method. As of September 30, 2026, our secured term loan has an unpaid principal balance of $500.0 million and a carrying value of $469.9 million. As consideration for and in connection with entering into our new secured term loan in January 2026, we issued detachable warrants to purchase up to 7,542,227 shares of our common stock at an exercise price of $4.00 per share, with an expiration date of January 2037. Value allocated to the detachable warrants is classified as equity and created a corresponding discount on our secured term loan in the same amount.

Previous wording

On February 8, 2021, we assumed a $300.0 million securitized senior mortgage in connection with a foreclosure on a hotel portfolio which, subsequent thereto, was modified to provide for, among other things, total principal payments of $25.0 million, an extension of the contractual maturity date to February 9, 2025, and the designation of a portion of the loan becoming partial recourse to us. Upon maturity in February 2025, we entered into forbearance agreements with our lender through September 9, 2025 and concurrently repaid $5.0 million of the principal balance. On June 9, 2025, we refinanced our debt related to real estate owned hotel portfolio with a non-recourse senior mortgage in the amount of $235.0 million. Such financing matures on June 9, 2027, and we may extend the maturity to June 9, 2030 pursuant to three one-year extension options, subject to meeting prescribed conditions. As of June 30, 2026, our debt related to real estate owned hotel portfolio has an unpaid principal balance of $235.0 million, a carrying value of $232.4 million and a stated rate of SOFR plus 3.18%. See Derivatives below for further detail of our interest rate cap.

Current wording

On February 8, 2021, we assumed a $300.0 million securitized senior mortgage in connection with a foreclosure on a hotel portfolio which, subsequent thereto, was modified to provide for, among other things, total principal payments of $25.0 million, an extension of the contractual maturity date to February 9, 2025, and the designation of a portion of the loan becoming partial recourse to us. Upon maturity in February 2025, we entered into forbearance agreements with our lender through September 9, 2025 and concurrently repaid $5.0 million of the principal balance. On June 9, 2025, we refinanced our debt related to real estate owned hotel portfolio with a non-recourse senior mortgage in the amount of $235.0 million. Such financing matures on June 9, 2027, and we may extend the maturity to June 9, 2030 pursuant to three one-year extension options, subject to meeting prescribed conditions. As of September 30, 2026, our debt related to real estate owned hotel portfolio has an unpaid principal balance of $235.0 million, a carrying value of $233.1 million and a stated rate of SOFR plus 3.18%. See Derivatives below for further detail of our interest rate cap.

Previous wording

Changes in the fair value of our interest rate cap are recorded as an unrealized gain or loss on interest rate cap on our consolidated statements of operations and the fair value is recorded in other assets on our consolidated balance sheets. Proceeds received from our counterparty related to the interest rate cap are recorded as proceeds from interest rate cap on our consolidated statements of operations. As of June 30, 2026 and December 31, 2025, the fair value of our interest rate cap was de minimis. During the three and six months ended June 30, 2026 and 2025, we did not recognize any proceeds from our interest rate caps.

Current wording

Changes in the fair value of our interest rate cap are recorded as an unrealized gain or loss on interest rate cap on our consolidated statements of operations and the fair value is recorded in other assets on our consolidated balance sheets. Proceeds received from our counterparty related to the interest rate cap are recorded as proceeds from interest rate cap on our consolidated statements of operations. As of September 30, 2026 and December 31, 2025, the fair value of our interest rate cap was de minimis. During the three and nine months ended September 30, 2026 and 2025, we did not recognize any proceeds from our interest rate caps.

Previous wording

Our business model seeks to minimize our exposure to changing interest rates by originating floating rate loans and financing them with floating rate liabilities. Further, we seek to match the benchmark rate index in the floating rate loans we originate with the benchmark index used in the related floating rate financings. Generally, we use SOFR as the benchmark rate index in both our floating rate loans and floating rate financings. As of June 30, 2026, 96.2% of our loans receivable held-for-investment based on unpaid principal balance were floating rate and indexed to SOFR. All of our financing is floating rate and indexed to SOFR, which resulted in approximately $629.1 million of net floating rate exposure.

Current wording

Our business model seeks to minimize our exposure to changing interest rates by originating floating rate loans and financing them with floating rate liabilities. Further, we seek to match the benchmark rate index in the floating rate loans we originate with the benchmark index used in the related floating rate financings. Generally, we use SOFR as the benchmark rate index in both our floating rate loans and floating rate financings. As of September 30, 2026, 95.9% of our loans receivable held-for-investment based on unpaid principal balance were floating rate and indexed to SOFR. All of our financing is floating rate and indexed to SOFR, which resulted in approximately $657.8 million of net floating rate exposure, including unpaid principal balance of non-accrual loans receivable.

Previous wording

As of June 30, 2026, amount includes $931.1 million of net floating rate exposure related to loans on non-accrual status and a $39.1 million floating rate liability related to a loan receivable classified as held-for-sale.

Current wording

As of September 30, 2026, amount includes $995.2 million of net floating rate exposure related to loans on non-accrual status.

Previous wording

Total net revenue increased $0.2 million during the three months ended June 30, 2026, compared to the three months ended March 31, 2026. The increase is primarily due to an increase in revenue from real estate owned of $8.7 million attributable to an increase in revenue at the hotel portfolio compared to the three months ended March 31, 2026 due to expected seasonally higher overall occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”) levels. Such increase was partially offset by a decrease in net interest income of $8.5 million, which was driven by a decrease in interest income of $12.7 million primarily as a result of decreased average loans receivable balances as well as an additional loan on non-accrual status, partially offset by a decrease in interest expense of $4.3 million due to loan realizations in 2026, the proceeds from which were primarily used to reduce financing balances.

Current wording

Total net revenue increased $2.9 million during the three months ended September 30, 2026, compared to the three months ended June 30, 2026. The increase is primarily due to an increase in net interest income of $1.6 million, which was driven by a decrease in interest expense of $6.3 million due to loan realizations in 2026, the proceeds from which were primarily used to reduce financing balances, partially offset by a decrease in interest income of $4.7 million primarily as a result of decreased average loans receivable balances. The increase in total net revenue was also due to an increase in revenue from real estate owned of $1.3 million attributable to an increase in revenue at the hotel portfolio compared to the three months ended June 30, 2026 due to higher overall occupancy and revenue per available room (“RevPAR”) levels.

Previous wording

Expenses are primarily comprised of base management fees payable to our Manager, general and administrative expenses, stock-based compensation expense, operating expenses from real estate owned, interest expense from real estate owned, and depreciation and amortization on real estate owned and related in-place and other lease intangible values. Operating expenses from real estate owned primarily include real estate taxes, utilities, repairs and maintenance, personnel costs of third-party property managers, property management fees incurred to third-parties, insurance, marketing, and general and administrative expenses specific to our real estate owned properties. Expenses increased by $2.4 million during the three months ended June 30, 2026, as compared to the three months ended March 31, 2026, primarily due to:

Current wording

Expenses are primarily comprised of base management fees payable to our Manager, general and administrative expenses, stock-based compensation expense, operating expenses from real estate owned, interest expense from real estate owned, and depreciation and amortization on real estate owned and related in-place and other lease intangible values. Operating expenses from real estate owned primarily include real estate taxes, utilities, repairs and maintenance, personnel costs of third-party property managers, property management fees incurred to third-parties, insurance, marketing, and general and administrative expenses specific to our real estate owned properties. Expenses decreased by $1.7 million during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026, primarily due to:

Previous wording

an increase in general and administrative expenses of $1.5 million primarily as a result of an increase in certain non-recurring charges incurred over the comparative period generally related to legal fees incurred for loan and REO investment related matters;

Current wording

a decrease in general and administrative expenses of $1.1 million primarily as a result of a decrease in certain non-recurring charges incurred over the comparative period;

Previous wording

an increase in operating expenses from real estate owned of $2.5 million during the comparative period, due to higher variable operating expenses in connection with higher occupancy levels at the hotel portfolio due to seasonality and operating expenses incurred at the multifamily properties foreclosed on in 2026;

Current wording

partially offset by an increase in operating expenses from real estate owned of $1.7 million during the comparative period, due to higher variable operating expenses in connection with higher occupancy levels at the hotel portfolio as well as an increase in repairs and maintenance costs across the multifamily real estate owned assets.

Previous wording

During the three months ended June 30, 2026, we sold a multifamily property located in Dallas, TX to an unaffiliated purchaser, which resulted in a gain on sale of $0.3 million. During the three months ended March 31, 2026, there were no sales of our real estate owned assets.

Current wording

During the three months ended June 30, 2026, we sold a multifamily property located in Dallas, TX to an unaffiliated purchaser, which resulted in a gain on sale of $0.3 million. During the three months ended September 30, 2026, there were no such gains recognized.

Previous wording

As of June 30, 2026 we determined that our mixed-use real estate owned asset and one of our multifamily real estate owned assets met the held-for-sale criteria. As a result, we reclassified these assets to real estate owned held-for-sale and recognized a $29.6 million loss through our valuation adjustment for real estate owned held-for-sale based upon anticipated sales price, less estimated costs to sell, and the carrying values of the assets (including related net lease intangible assets and deferred leasing costs) prior to reclassification. During the six months ended June 30, 2025, we recognized an additional $0.4 million of loss through our valuation adjustment for real estate owned held-for-sale as a result of capital expenditures incurred at our hotel portfolio then classified as held-for-sale.

Current wording

During the three months ended September 30, 2026, we recognized a de minimis valuation adjustment for real estate owned held-for-sale in connection with the sale of one of our multifamily real estate owned assets previously classified as held-for-sale. During the three months ended June 30, 2026, we determined that our mixed-use real estate owned asset and one of our multifamily real estate owned assets met the held-for-sale criteria. As a result, we reclassified these assets to real estate owned held-for-sale and recognized a combined $29.6 million loss through our valuation adjustment for real estate owned held-for-sale based upon anticipated sales price, less estimated costs to sell, and the carrying values of the assets (including related net lease intangible assets and deferred leasing costs) prior to reclassification.

Previous wording

During the six months ended June 30, 2026, we recorded a recovery of principal charge-offs of $1.9 million related to a loan sale completed in 2023, where concurrent with the sale, our TRS entered into an agreement with the transferee which provides for a share of cash flows upon the transferee achieving certain financial metrics. In May 2026, the transferee achieved the necessary financial metrics, and under the terms of such agreement, our TRS received $1.9 million. There were no such recoveries recognized during the six months ended June 30, 2025.

Current wording

During the three months ended September 30, 2026 and the three months ended June 30, 2026, we recorded a recovery of principal charge-offs of $0.7 million and $1.9 million, respectively, related to two loan sales. First, a loan sale completed in 2025 where we retained our rights to receive certain payments under the associated guarantee of the loan and received $0.5 million from the guarantor of the loan receivable during the three months ended September 30, 2026. Second, a loan sale completed in 2023, where concurrent with the sale, our TRS entered into an agreement with the transferee which provides for a share of cash flows upon the transferee achieving certain financial metrics. In 2026, the transferee achieved the necessary financial metrics, and under the terms of such agreement, our TRS received $0.2 million during the three months ended September 30, 2026 and $1.9 million during the three months ended June 30, 2026.

Previous wording

The following table sets forth information regarding our consolidated results of operations for the six months ended June 30, 2026 and 2025 ($ in thousands, except per share data):

Current wording

The following table sets forth information regarding our consolidated results of operations for the nine months ended September 30, 2026 and 2025 ($ in thousands, except per share data):

Previous wording

Total net revenue decreased $35.8 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease is primarily due to a decrease in net interest income of $47.2 million, which was driven by a decrease in interest income of $120.9 million as a result of a reduction in the size of our loan portfolio and an increase in the portion of loans on non-accrual status during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This decrease was partially offset by a decrease in interest expense of $73.7 million primarily as a result of lower average borrowing levels, and an increase in revenue from real estate owned of $11.4 million attributable to revenue recognized from the multifamily properties we foreclosed on in 2025 and 2026, offset in part by a reduction in revenue from our mixed-use real estate owned asset as a result of partial asset sales during 2025.

Current wording

Total net revenue decreased $49.2 million during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The decrease is primarily due to a decrease in net interest income of $63.0 million, which was driven by a decrease in interest income of $168.3 million as a result of a reduction in the size of our loan portfolio and an increase in the portion of loans on non-accrual status during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. This decrease was partially offset by a decrease in interest expense of $105.3 million primarily as a result of lower average borrowing levels, and an increase in revenue from real estate owned of $13.8 million attributable to revenue recognized from the multifamily properties we foreclosed on in 2025 and 2026 and higher overall occupancy and RevPAR levels at our hotel portfolio, offset in part by a reduction in revenue from our mixed-use real estate owned asset as a result of partial asset sales during 2025.

Previous wording

Expenses are primarily comprised of base management fees payable to our Manager, general and administrative expenses, stock-based compensation expense, operating expenses from real estate owned, interest expense from real estate owned, and depreciation and amortization on real estate owned and related in-place and other lease intangible values. Operating expenses from real estate owned primarily include real estate taxes, utilities, repairs and maintenance, personnel costs of third-party property managers, property management fees incurred to third-parties, insurance, marketing, and general and administrative expenses specific to our real estate owned properties. Expenses increased by $15.1 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to:

Current wording

Expenses are primarily comprised of base management fees payable to our Manager, general and administrative expenses, stock-based compensation expense, operating expenses from real estate owned, interest expense from real estate owned, and depreciation and amortization on real estate owned and related in-place and other lease intangible values. Operating expenses from real estate owned primarily include real estate taxes, utilities, repairs and maintenance, personnel costs of third-party property managers, property management fees incurred to third-parties, insurance, marketing, and general and administrative expenses specific to our real estate owned properties. Expenses increased by $16.0 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to:

Previous wording

an increase in operating expenses from real estate owned of $10.0 million during the comparative period, due to operating expenses such as real estate taxes, utilities, and repairs and maintenance expenses incurred from the multifamily properties we foreclosed on in 2025 and 2026;

Current wording

an increase in operating expenses from real estate owned of $13.7 million during the comparative period, primarily due to higher variable operating expenses in connection with higher occupancy levels at the hotel portfolio, and operating expenses such as real estate taxes, utilities, and repairs and maintenance expenses incurred from the multifamily properties and land parcel we foreclosed on in 2025 and 2026;

Previous wording

an increase in depreciation and amortization from real estate owned of $11.3 million primarily due to depreciation and amortization expense recognized on the multifamily properties we foreclosed on in 2025 and 2026 and depreciation expense not being recognized on the hotel portfolio during the six months ended June 30, 2025 while the hotel portfolio was classified as held-for-sale;

Current wording

an increase in depreciation and amortization from real estate owned of $12.0 million primarily due to depreciation and amortization expense recognized on the multifamily properties we foreclosed on in 2025 and 2026, offset in part by depreciation and amortization expense not recognized on our mixed-use real estate owned asset while classified as held-for-sale during a portion of the nine months ended September 30, 2026 and depreciation expense not being recognized on the hotel portfolio while classified as held-for-sale during a portion of the nine months ended September 30, 2025;

Previous wording

an increase in interest expense on real estate owned of $3.4 million during the comparative period due to interest expense recognized on debt related to the multifamily properties we foreclosed on in 2025 and 2026;

Current wording

an increase in interest expense on real estate owned of $2.7 million during the comparative period due to interest expense recognized on debt related to the multifamily properties we foreclosed on in 2025 and 2026;

Previous wording

partially offset by a decrease in stock-based compensation of $6.0 million due to the vesting period of previously issued restricted stock units ending on July 1, 2025 and April 1, 2026 and the remaining unvested restricted stock unit grants having a grant date fair value less than that of the grants which vested;

Current wording

partially offset by a decrease in stock-based compensation of $6.6 million due to the vesting period ending on previously issued restricted stock units and the remaining unvested restricted stock unit grants having a grant date fair value less than that of the grants which vested;

Previous wording

further offset by a decrease in general and administrative expenses of $1.4 million primarily as a result of a decrease in non-recurring costs incurred over the comparative period, generally related to legal and professional fees related to loan enforcement and financing related matters;

Current wording

further offset by a decrease in general and administrative expenses of $2.6 million primarily as a result of a decrease in non-recurring costs incurred over the comparative period, generally related to legal and professional fees related to loan enforcement and financing matters;

Previous wording

further offset by a decrease in management fees of $0.3 million as a result of lower stockholders’ equity compared to the comparative period.

Current wording

further offset by a decrease in management fees of $3.1 million as a result of lower Stockholders’ Equity, as defined in the Management Agreement, compared to the comparative period.

Previous wording

Gain (Loss) on Sales of Real Estate Owned

Current wording

Gain on Sales of Real Estate Owned

Previous wording

During the six months ended June 30, 2026, we sold a multifamily property located in Dallas, TX to an unaffiliated purchaser, which resulted in a gain on sale of $0.3 million. During the six months ended June 30, 2025 we sold five floors of primarily office space in our mixed-use property to an unaffiliated purchaser which resulted in a loss on sale of $1.6 million.

Current wording

During the nine months ended September 30, 2026, we sold a multifamily real estate owned asset located in Dallas, TX to an unaffiliated purchaser, which resulted in a gain on sale of $0.3 million. During the nine months ended September 30, 2025, we sold seven floors of primarily office space in our mixed-use real estate owned asset to unaffiliated purchasers for a gross sales price of $42.6 million, resulting in an aggregate gain on partial sales, net of $0.4 million.