TPG RE Finance Trust Inc

Previous wording

We continue to evaluate the effects of macroeconomic concerns, including, without limitation, a period of sustained high interest rates, inflation, stress to the commercial banking systems of the U.S. and Western Europe, geopolitical tensions, concerns of an economic recession in the near term, and changes to the way commercial tenants use real estate. Rising interest rates, stress to the commercial banking systems of the U.S. and Western Europe, increased volatility in debt and equity markets, declining commercial property values, and elevated geopolitical risk led us to continue to curtail our loan origination volume and maintain high levels of liquidity during 2023. From January 1, 2023 through December 31, 2023, we originated four first mortgage transitional loans, with total commitments of $229.4 million, an initial unpaid principal balance of $196.7 million, and unfunded commitments at closing of $32.7 million.

Current wording

We continue to evaluate the effects of macroeconomic conditions, including, without limitation: a period of sustained high interest rates; inflation; structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe; geopolitical tensions; concerns of an economic recession in the near term; and changes to the way commercial tenants use real estate, specifically office buildings. Rising interest rates, structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe, increased volatility in debt and equity markets, declines in commercial property values, and elevated geopolitical risk led us to continue to curtail our loan origination volume and maintain high levels of liquidity during 2023 and continuing through 2024. From January 1, 2024 through December 31, 2024, we originated eight first mortgage transitional loans, with total commitments of $562.3 million, an initial unpaid principal balance of $532.0 million, and unfunded commitments at closing of $30.3 million.

Previous wording

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global, alternative asset management firm, founded in San Francisco in 1992, with $222 billion of assets under management (as of December 31, 2023) and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's real estate investment group and TPG’s executive committee.

Current wording

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $246 billion in assets under management as of December 31, 2024. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's real estate investment group and TPG’s management committee.

Previous wording

•Produced Net interest income of $21.3 million, resulting from interest income of $84.1 million and interest expense of $62.8 million. Net interest income increased $1.7 million compared to the three months ended September 30, 2023.

Current wording

•Produced Net interest income of $24.7 million, resulting from interest income of $69.0 million and interest expense of $44.3 million. Net interest income decreased $4.6 million compared to the three months ended September 30, 2024.

Previous wording

•Recorded a decrease to our allowance for credit losses on our loan portfolio of $166.9 million, for a total allowance for credit losses of $69.8 million, or 190 basis points of total loan commitments of $3.7 billion.

Current wording

•Recorded a decrease to our allowance for credit losses on our loan portfolio of $5.3 million, for a total allowance for credit losses of $64.0 million, or 187 basis points of total loan commitments of $3.4 billion.

Previous wording

•Originated one first mortgage loan with a total loan commitment of $62.0 million, an initial unpaid principal balance of $48.3 million, an unfunded loan commitment of $13.7 million, an interest rate of Term SOFR plus 3.50%, and an interest rate floor of 3.50%.

Current wording

•Originated two first mortgage loans with a total loan commitment of $242.0 million, an aggregate initial unpaid principal balance of $225.2 million, unfunded loan commitment of $16.8 million, a weighted average interest rate of Term SOFR plus 3.33%, and a weighted average interest rate floor of 3.25%.

Previous wording

•Funded $34.6 million in future funding obligations associated with existing loans.

Current wording

•Funded $4.7 million in future funding obligations associated with existing loans.

Previous wording

•Received one full loan repayment of $70.0 million, and partial principal payments of $30.2 million related to three loans, and cost-recovery proceeds of $2.9 million across three loans for total loan repayments of $103.1 million.

Current wording

•Received three full loan repayments of $94.7 million and partial principal payments of $15.5 million related to four loans, for total loan repayments of $110.2 million.

Previous wording

•Acquired three office properties through deeds-in-lieu of foreclosure and one multifamily property through a UCC equity foreclosure with an aggregate carrying value at December 31, 2023 of $152.0 million and a fair value at foreclosure of $152.0 million.

Current wording

•Acquired three multifamily properties, which served as collateral for two first mortgage loans, one of which involved a UCC foreclosure and the other a non-judicial foreclosure, with an aggregate carrying value at December 31, 2024 of $88.8 million and a fair value at foreclosure of $89.9 million.

Previous wording

•Recognized Net (loss) attributable to common stockholders of ($130.9) million, or ($1.69) per diluted share, and Distributable Earnings (Loss) of ($264.1) million or ($3.40) per diluted share.

Current wording

•Recognized Net income attributable to common stockholders of $59.7 million, or $0.75 per diluted share, and Distributable Earnings of $76.5 million or $0.96 per diluted share.

Previous wording

•Produced Net interest income of $88.7 million, resulting from interest income of $362.6 million and interest expense of $273.9 million.

Current wording

•Produced Net interest income of $108.3 million, resulting from interest income of $307.1 million and interest expense of $198.9 million.

Previous wording

•Declared dividends of $76.0 million, or $0.96 per common share, representing a 14.8% annualized dividend yield based on the December 29, 2023 closing price of $6.50.

Current wording

•Declared dividends of $78.7 million, or $0.96 per common share, representing a 11.3% annualized dividend yield based on the December 31, 2024 closing price of $8.50.

Previous wording

•Originated four first mortgage loans with total loan commitments of $229.4 million, an aggregate initial unpaid principal balance of $196.7 million, unfunded loan commitments of $32.7 million, a weighted average interest rate of Term SOFR plus 4.30%, and a weighted average interest rate floor of 3.59%.

Current wording

•Originated eight first mortgage loans with total loan commitments of $562.3 million, an aggregate initial unpaid principal balance of $532.0 million, unfunded loan commitments of $30.3 million, a weighted average interest rate of Term SOFR plus 3.29%, and a weighted average interest rate floor of 3.28%.

Previous wording

•Funded $140.5 million in future funding obligations associated with existing loans.

Current wording

•Funded $41.1 million in future funding obligations associated with existing loans.

Previous wording

•Received loan repayments, in whole and in part, of $907.0 million including cost-recovery proceeds and accrued PIK interest.

Current wording

•Received loan repayments, in whole and in part, of $673.4 million including accrued PIK interest.

Previous wording

•Utilized the reinvestment feature in TRTX 2022-FL5 one time, recycling loan repayments of $48.3 million.

Current wording

•Utilized the reinvestment feature in TRTX 2022-FL5 14 times, recycling loan repayments of $255.2 million.

Previous wording

•$206.4 million of cash-on-hand, of which $191.4 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

Current wording

•$190.2 million of cash-on-hand, of which $175.2 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

Previous wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $24.8 million under secured credit agreements with five lenders, and $1.6 million under asset-specific financing arrangements.

Current wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $128.1 million under secured credit agreements with three lenders, and $2.5 million under other financing arrangements.

Previous wording

We have financed our loan investments as of December 31, 2023 utilizing three CRE CLOs totaling $1.9 billion, one of which is open for reinvestment of eligible loan collateral at quarter end, $0.8 billion under secured credit agreements with total commitments of $2.2 billion provided by five lenders, $274.2 million under asset-specific financing arrangements, and $23.8 million under our $290.0 million secured revolving credit facility. As of December 31, 2023, 63.6% of our borrowings were pursuant to our CRE CLO vehicles, 27.3% were pursuant to our secured credit agreements and secured revolving credit facility and 9.1% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 73.5% of total loan portfolio borrowings as of December 31, 2023.

Current wording

We have financed our loan investments as of December 31, 2024 utilizing three CRE CLOs totaling $1.7 billion, $585.0 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, and $186.5 million under asset-specific financing arrangements with various lenders. As of December 31, 2024, 66.2% of our borrowings were pursuant to our CRE CLO vehicles, 26.4% were pursuant to our secured credit agreements and secured revolving credit facility and 7.4% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 77.0% of total loan portfolio borrowings as of December 31, 2024.

Previous wording

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of December 31, 2023, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 2.00% (2.00% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 1.3 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

Current wording

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of December 31, 2024, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.94% (1.93% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 2.6 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

Previous wording

For the three months ended December 31, 2023, we recorded net income attributable to common stockholders of $0.03 per diluted common share, an increase of $0.86 per diluted common share from the three months ended September 30, 2023, of which $0.75 per diluted common share relates to a decrease in our credit loss expense during the fourth quarter of 2023, which totaled $17.3 million as compared to $75.8 million during the third quarter of 2023.

Current wording

For the three months ended December 31, 2024, we recorded net income attributable to common stockholders of $0.09 per diluted common share, a decrease of $0.14 per diluted common share from the three months ended September 30, 2024, of which $0.06 per diluted common share, or $4.6 million, relates to an increase quarter over quarter in our credit loss expense, compared to $0.3 million benefit during the third quarter of 2024.

Previous wording

Distributable Earnings (loss) per diluted common share was ($2.05) for three months ended December 31, 2023, a decrease of $0.72 per diluted common share from the three months ended September 30, 2023. The decrease in Distributable Earnings (loss) per diluted common share was primarily due to an increase in realized losses on loan sales and REO conversions of $0.86 per diluted common share during the fourth quarter of 2023, partially offset by $0.09 per diluted common share attributable to gain on sale of real estate owned, net during the fourth quarter of 2023.

Current wording

Distributable Earnings per diluted common share was $0.10 for three months ended December 31, 2024, a decrease of $0.18 per diluted common share from the three months ended September 30, 2024. The decrease in Distributable Earnings per diluted common share was primarily due to an increase in realized losses on loan write-offs and REO conversions of $0.12 per diluted common share during the fourth quarter of 2024.

Previous wording

Our book value per common share as of December 31, 2023 was $11.86, a decrease of $2.62 per common share from our book value per common share as of December 31, 2022 of $14.48, primarily due to an increase in credit loss expense during the year ended December 31, 2023 of $189.9 million, or $2.44 per common share.

Current wording

Our book value per common share as of December 31, 2024 was $11.27, a decrease of $0.59 per common share from our book value per common share as of December 31, 2023 of $11.86, primarily due to an exercise of warrants (the "Warrants") during the six months ended June 30, 2024, which resulted in the issuance of 2,647,059 shares of our common stock, diluting our book value by $0.38 per common share. Additionally our book value per common share also decreased due to an increase in credit loss expense during the year ended December 31, 2024 of $4.1 million, or $0.05 per common share.

Previous wording

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

Current wording

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

Previous wording

(1)Includes preferred stock dividends declared and paid for Series A Preferred Stock and Series C Preferred Stock shares outstanding for the three months ended December 31, 2023 and September 30, 2023 and the year ended December 31, 2023 and 2022.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Distributable Earnings excludes the impact of our credit loss provision or reversals of our credit loss provision, but only to the extent that our credit loss provision exceeds any realized credit losses during the applicable reporting period.

Current wording

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

Previous wording

Our interest-earning assets are comprised entirely of a portfolio of floating rate, first mortgage loans, or in limited instances, contiguous mezzanine loans. As of December 31, 2023, our loans held for investment portfolio consisted of 53 first mortgage loans (or interests therein) totaling $3.7 billion of commitments with an unpaid principal balance of $3.5 billion. As of December 31, 2023, 100% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans or, in one instance, a first mortgage loan and contiguous mezzanine loan both owned by us. As of December 31, 2023, we had $183.3 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

Current wording

Our interest-earning assets are comprised of a portfolio of primarily floating rate, first mortgage loans, or in two instances, contiguous mezzanine loans. As of December 31, 2024, our loans held for investment portfolio consisted of 45 first mortgage loans (or interests therein) totaling $3.4 billion of commitments with an unpaid principal balance of $3.3 billion. As of December 31, 2024, 99.7% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans. In two instances, a first mortgage loan and contiguous mezzanine loan are both owned by us. As of December 31, 2024, we had $127.9 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

Previous wording

We may hold REO as a result of taking title to a loan's collateral. As of December 31, 2023, we owned four office properties and one multifamily property with an aggregate carrying value of $199.8 million.

Current wording

We may hold REO as a result of taking title to a loan's collateral. As of December 31, 2024, we owned four office properties and four multifamily properties with an aggregate carrying value of $275.8 million. During the three months and year ended December 31, 2024, we acquired three multifamily properties.

Previous wording

During the three months ended December 31, 2023, we funded $34.6 million of deferred future fundings related to previously originated loans. We received proceeds from one loan repayment in-full of $70.0 million, and principal amortization of $30.2 million across three loans, for total loan repayments of $100.2 million during the period. We received cost-recovery proceeds from three non-accrual loans of $2.9 million. Additionally, we sold two mortgage loans with an aggregate unpaid principal balance of $212.0 million for $127.7 million, resulting in a loss on sale of $78.2 million, including transaction costs of $2.8 million.

Current wording

During the three months ended December 31, 2024, we originated two mortgage loans with a total commitment of $242.0 million, an initial unpaid principal balance of $225.2 million, and unfunded commitments at closing of $16.8 million. Loan fundings included $4.7 million of deferred future fundings related to previously originated loans. We received proceeds from three loan repayments in full of $94.7 million, and principal amortization of $15.5 million across four loans, for total loan repayments of $110.2 million during the period.

Previous wording

(2)For the three months ended December 31, 2023, includes extinguishment of four first mortgage loans with an aggregate unpaid principal balance of $254.0 million pursuant to loan conversions to REO in December 2023 as a result of our acquisition of the underlying property pursuant to a foreclosure or deed-in-lieu of foreclosure. For the year ended December 31, 2023, includes extinguishment of six first mortgage loans with an aggregate unpaid principal balance of $386.1 million pursuant to loan conversions to REO in December 2023, August 2023 and April 2023 as a result of our acquisition of the underlying properties pursuant to foreclosure or a deed-in-lieu of foreclosure, as applicable. The REO associated with the August 2023 loan conversion was sold during the three months ended December 31, 2023.

Current wording

(2)For the three months and year ended December 31, 2024, includes extinguishment of two first mortgage loans with an aggregate unpaid principal balance of $99.2 million pursuant to loan conversions in November 2024 and December 2024 as a result of our acquisition of the underlying properties pursuant to judicial foreclosure or UCC foreclosure, as applicable.

Previous wording

For the three months ended December 31, 2023, we generated interest income of $84.1 million and incurred interest expense of $62.8 million, which resulted in net interest income of $21.3 million.

Current wording

For the three months ended December 31, 2024, we generated interest income of $69.0 million and incurred interest expense of $44.3 million, which resulted in net interest income of $24.7 million.

Previous wording

(1)In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio we originated, acquired and financed. We did not have any non-consolidated senior interests as of December 31, 2023.

Current wording

(1)In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio we originated, acquired and financed. We did not have any non-consolidated senior interests as of December 31, 2024. As of December 31, 2024, total loan exposure includes one fixed rate contiguous mezzanine loan.

Previous wording

(2)Unpaid principal balance includes PIK interest of $1.2 million as of December 31, 2023.

Current wording

(2)Unpaid principal balance includes PIK interest of $0.4 million related to one loan as of December 31, 2024.

Previous wording

(4)As of December 31, 2023, all of our loans were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, and accrual of both extension and exit fees. All-in yield for the total portfolio assumes Term SOFR as of December 31, 2023 for weighted average calculations.

Current wording

(4)As of December 31, 2024, all of our floating rate loans were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, and accrual of both extension and exit fees. All-in yield for the total portfolio assumes Term SOFR as of December 31, 2024 for weighted average calculations.

Previous wording

(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of December 31, 2023, based on the unpaid principal balance of our total loan exposure, 8.4% of our loans were subject to yield maintenance or other prepayment restrictions and 91.6% were open to repayment without penalty.

Current wording

(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of December 31, 2024, based on the unpaid principal balance of our total loan exposure, 22.1% of our loans were subject to yield maintenance or other prepayment restrictions and 77.9% were open to repayment without penalty.

Previous wording

(6)Except for construction loans, LTV is calculated for loan originations and existing loans as the total outstanding principal balance of the loan or participation interest in a loan (plus any financing that is pari passu with or senior to such loan or participation interest) as of December 31, 2023, divided by the as-is appraised value of our collateral at the time of origination or acquisition of such loan or participation interest. For construction loans only, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value of the real estate securing the loan. The as-is or as-stabilized (as applicable) value reflects our Manager’s estimates, at the time of origination or acquisition of the loan or participation interest in a loan, of the real estate value underlying such loan or participation interest determined in accordance with our Manager’s underwriting standards and consistent with third-party appraisals obtained by our Manager.

Current wording

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

Previous wording

(1)Excludes capitalized interest of $1.2 million relating to previously modified loans.

Current wording

(1)Excludes capitalized interest of $0.4 million related to one loan.

Previous wording

During the year ended December 31, 2023, we acquired four office properties and two multifamily properties, each of which were collateral for first mortgage loans. We sold one of the two multifamily properties acquired during the year ended December 31, 2023 to a third party.

Current wording

As of December 31, 2024, we owned four office properties and four multifamily properties, each of which previously served as collateral for first mortgage loans. During the three months and year ended December 31, 2024, we acquired three multifamily properties.

Previous wording

In December 2023, we acquired a multifamily property in Arlington Heights, IL through a UCC equity foreclosure. During the fourth quarter of 2023, we recognized the property as REO with a carrying value of $72.0 million, which included the estimated fair value of the property.

Current wording

In December 2024, we acquired a multifamily property in Chicago, IL through a UCC foreclosure. During the fourth quarter of 2024, we recognized the property as REO with a carrying value of $37.4 million.

Previous wording

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

Current wording

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