KKR Real Estate Finance Trust Inc.

Previous wording

(A) Numbers presented may not foot due to rounding.

Current wording

Per share amounts presented may not foot due to rounding.

Previous wording

Book value as of March 31, 2025 included the impact of an estimated CECL credit loss allowance of $144.4 million, or ($2.12) per share. See Note 2 — Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Form 10-Q for detailed discussion of allowance for credit losses.

Current wording

Book value as of June 30, 2025 included the impact of an estimated CECL allowance of $173.9 million, or ($2.64) per share. See Note 2 — Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Form 10-Q for detailed discussion of allowance for credit losses.

Previous wording

We have established a $6,495.5 million portfolio of diversified investments, consisting primarily of senior commercial real estate loans as of March 31, 2025.

Current wording

We have established a $6,242.5 million portfolio of diversified investments, consisting primarily of senior commercial real estate loans as of June 30, 2025.

Previous wording

During the three months ended March 31, 2025, we collected 100% of interest payments due on our loan portfolio. As of March 31, 2025, the average risk rating of our loan portfolio was 3.1, weighted by loan outstanding principal. As of March 31, 2025, the average loan commitment in our portfolio was $121.1 million and multifamily and industrial loans comprised 61% of our loan portfolio.

Current wording

During the three months ended June 30, 2025, we collected 99.9% of interest payments due on our loan portfolio. As of June 30, 2025, the average risk rating of our loan portfolio was 3.1, weighted by loan outstanding principal. As of June 30, 2025, the average loan commitment in our portfolio was $116.6 million and multifamily and industrial loans comprised 62% of our loan portfolio.

Previous wording

In addition, we owned Real Estate Assets with an investment amount of $337.1 million, comprised of the acquired properties (directly or indirectly) and capitalized redevelopment costs, as of March 31, 2025. These properties are reflected on our Condensed Consolidated Balance Sheets.

Current wording

In addition, we owned Real Estate Assets with an investment amount of $407.0 million, comprised of the acquired properties (directly or indirectly) and capitalized redevelopment costs, as of June 30, 2025. These properties are reflected on our Condensed Consolidated Balance Sheets.

Previous wording

The charts above are based on outstanding principal of our commercial real estate loans.

Current wording

(A) Charts are based on outstanding principal of our commercial real estate loans. Excludes fully written off loans and loans held in consolidated CMBS trust.

Previous wording

(C) "Other" property type includes Self-Storage (2%), Student Housing (2%) and Mixed Use (<1%).

Current wording

(C) "Other" property type includes Student Housing (2%) and Mixed Use (<1%).

Previous wording

The following table details our quarterly loan activity (dollars in thousands):

Current wording

The following table details our quarterly loan activity (amounts in thousands):

Previous wording

The following table details overall statistics for our loan portfolio as of March 31, 2025 (dollars in thousands):

Current wording

The following table details overall statistics for our loan portfolio as of June 30, 2025 (amounts in thousands):

Previous wording

(A) Represents mezzanine loans with commitments of $79.4 million and $10.2 million, respectively, accompanying two senior loans. $84.6 million of loan principal was funded and placed on nonaccrual status, as of March 31, 2025. Refer to Note 3 to our condensed consolidated financial statements for additional information.

Current wording

(A) Represents a mezzanine loan with a commitment of $79.4 million accompanying a senior loan. $74.4 million of loan principal was funded and on nonaccrual status as of June 30, 2025. Refer to Note 3 to our condensed consolidated financial statements for additional information.

Previous wording

The table below sets forth additional information relating to our portfolio as of March 31, 2025 (dollars in millions):

Current wording

The table below sets forth additional information relating to our portfolio as of June 30, 2025 (amounts in millions):

Previous wording

(D) Weighted average is weighted by the current principal amount for our senior and mezzanine loans and by the investment amount of CMBS B-Pieces. Weighted average LTV excludes risk-rated 5 loans and weighted average coupon excludes loans on nonaccrual status.

Current wording

(D) Weighted average is weighted by the current principal amount of our loans and the investment amount of CMBS investments. Weighted average LTV excludes risk-rated 5 loans and weighted average coupon excludes loans on nonaccrual status.

Previous wording

(G) Loan Per SF / Unit / Key is based on the current principal amount divided by the current SF / Unit / Key. For Senior Loans 2, 3, 5, 15 and 20, Loan Per SF / Unit / Key is calculated as the total commitment amount of the loan divided by the proposed SF / Unit / Key.

Current wording

(G) Loan Per SF / Unit / Key is based on the current principal amount divided by the current SF / Unit / Key. For Senior Loans 2, 3, 5, 13 and 17, Loan Per SF / Unit / Key is calculated as the total commitment amount of the loan divided by the proposed SF / Unit / Key.

Previous wording

(H) For senior loans, LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated; for mezzanine loans, LTV is based on the initial balance of the whole loan divided by the as-is appraised value as of the date the loan was originated; for CMBS B-Pieces, LTV is based on the weighted average LTV of the underlying loan pool at issuance. Weighted Average LTV excludes risk-rated 5 loans.

Current wording

(H) For senior loans, LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated; for mezzanine loans, LTV is based on the initial balance of the whole loan divided by the as-is appraised value as of the date the loan was originated; for CMBS investments, LTV is based on the weighted average LTV of the underlying loan pool at issuance. Weighted Average LTV excludes risk-rated 5 loans.

Previous wording

For Senior Loans 2, 3, 5, 15 and 20, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value as of the date the loan was originated. For senior loans where an appraisal has been obtained post origination, the LTV, presented as follows, is calculated based on the current principal amount divided by the as-is appraised value as of the new appraisal date: Senior Loan 16 (77%); Senior Loan 17 (64%); Senior Loan 19 (78%); Senior Loan 22 (64%); Senior Loan 25 (57%); Senior Loan 26 (75%); Senior Loan 30 (83%); Senior Loan 31 (70%); Senior Loan 34 (81%); Senior Loan 35 (63%); and Senior Loan 43 (81%).

Current wording

For Senior Loans 2, 3, 5, 13 and 17, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value as of the date the loan was originated. For senior loans where an appraisal has been obtained post origination, the LTV, presented as follows, is calculated based on the current principal amount divided by the as-is appraised value as of the new appraisal date: Senior Loan 14 (77%); Senior Loan 16 (78%); Senior Loan 19 (64%); Senior Loan 21 (57%); Senior Loan 22 (75%); Senior Loan 26 (83%); Senior Loan 28 (70%); Senior Loan 30 (81%); Senior Loan 31 (63%); and Senior Loan 40 (81%).

Previous wording

In December 2024, we modified a risk-rated 5 senior life science loan located in San Carlos, CA, with an outstanding principal balance of $103.2 million. The terms of the modification included a $13.1 million principal repayment, and a restructure of the $90.1 million senior loan (after the $13.1 million repayment) into (i) a $89.1 million committed senior mortgage loan (with $34.9 million in unfunded commitment), and (ii) a $35.9 million subordinated note which is subordinate to a new $20.0 million sponsor interest. The restructured senior loan earns a coupon rate of S+1.00% and has a new term of three years. The $35.9 million subordinated note was deemed uncollectible and written off in December 2024. The loan modification was accounted for as a new loan for GAAP purposes. The restructured senior loan with an outstanding principal balance of $57.0 million was risk-rated 3 as of March 31, 2025.

Current wording

In December 2024, we modified a risk-rated 5 senior life science loan located in San Carlos, CA, with an outstanding principal balance of $103.2 million. The terms of the modification included a $13.1 million principal repayment, and a restructure of the $90.1 million senior loan (after the $13.1 million repayment) into (i) a $89.1 million committed senior mortgage loan (with $34.9 million in unfunded commitment), and (ii) a $35.9 million subordinated note which is subordinate to a new $20.0 million sponsor interest. The restructured senior loan earns a coupon rate of S+1.00% and has a new term of three years. The $35.9 million subordinated note was deemed uncollectible and written off in December 2024. The loan modification was accounted for as a new loan for GAAP purposes. The restructured senior loan with an outstanding principal balance of $58.6 million was risk-rated 3 as of June 30, 2025.

Previous wording

Our current CMBS exposure is through an equity method investment. Our Manager has processes and procedures in place to monitor and assess the credit quality of our CMBS B-Piece investments and promote the regular and active management of these investments. This includes reviewing the performance of the real estate assets underlying the loans that collateralize the investments and determining the impact of such performance on the credit and return profile of the investments. Our Manager holds monthly surveillance calls with the special servicer of our CMBS B-Piece investments to monitor the performance of our portfolio and discuss issues associated with the loans underlying our CMBS B-Piece investments. At each meeting, our Manager is provided with a due diligence submission for each loan underlying our CMBS B-Piece investments, which includes both property-level and loan-level information. These meetings assist our Manager in monitoring our portfolio, identifying any potential loan issues, determining if a re-underwriting of any loan is warranted and examining the timing and severity of any potential losses or impairments.

Current wording

Our Manager has processes and procedures in place to monitor and assess the credit quality of our CMBS B-Piece investments and promote the regular and active management of these investments. This includes reviewing the performance of the real estate assets underlying the loans that collateralize the investments and determining the impact of such performance on the credit and return profile of the investments. Our Manager holds monthly surveillance calls with the special servicer of our CMBS B-Piece investments to monitor the performance of our portfolio and discuss issues associated with the loans underlying our CMBS B-Piece investments. At each meeting, our Manager is provided with a due diligence submission for each loan underlying our CMBS B-Piece investments, which includes both property-level and loan-level information. These meetings assist our Manager in monitoring our portfolio, identifying any potential loan issues, determining if a re-underwriting of any loan is warranted and examining the timing and severity of any potential losses or impairments.

Previous wording

The following table summarizes our financing agreements (dollars in thousands):

Current wording

The following table summarizes our financing agreements (amounts in thousands):

Previous wording

Each of our existing master repurchase facilities includes "credit mark-to-market" features. "Credit mark-to-market" provisions in repurchase facilities are designed to keep the lenders' credit exposure generally constant as a percentage of the underlying collateral value of the assets pledged as security to them. If the credit underlying collateral value decreases, the gross amount of leverage available to us will be reduced as our assets are marked-to-market, which would reduce our liquidity. The lender under the applicable repurchase facility sets the valuation and any revaluation of the collateral assets in its sole, good faith discretion. As a contractual matter, the lender has the right to reset the value of the assets at any time based on then-current market conditions, but the market convention is to reassess valuations on a monthly, quarterly and annual basis using the financial information delivered pursuant to the facility documentation regarding the real property, borrower and guarantor under such underlying loans. Generally, if the lender determines (subject to certain conditions) that the market value of the collateral in a repurchase transaction has decreased by more than a defined minimum amount, the lender may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We closely monitor our liquidity and intend to maintain sufficient liquidity on our balance sheet in order to meet any margin calls in the event of any significant decreases in asset values. As of March 31, 2025, the weighted average haircut under our repurchase agreements was 32.8% (or 30.5%, if we had borrowed the maximum amount approved by its repurchase agreement counterparties as of such dates). In addition, our existing master repurchase facilities are not entirely term-matched financings and may mature before our CRE debt investments that represent underlying collateral to those financings. As we negotiate renewals and extensions of these liabilities, we may experience lower advance rates and higher pricing under the renewed or extended agreements.

Current wording

Each of our existing master repurchase facilities includes "credit mark-to-market" features. "Credit mark-to-market" provisions in repurchase facilities are designed to keep the lenders' credit exposure generally constant as a percentage of the underlying collateral value of the assets pledged as security to them. If the credit underlying collateral value decreases, the gross amount of leverage available to us will be reduced as our assets are marked-to-market, which would reduce our liquidity. The lender under the applicable repurchase facility sets the valuation and any revaluation of the collateral assets in its sole, good faith discretion. As a contractual matter, the lender has the right to reset the value of the assets at any time based on then-current market conditions, but the market convention is to reassess valuations on a monthly, quarterly and annual basis using the financial information delivered pursuant to the facility documentation regarding the real property, borrower and guarantor under such underlying loans. Generally, if the lender determines (subject to certain conditions) that the market value of the collateral in a repurchase transaction has decreased by more than a defined minimum amount, the lender may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We closely monitor our liquidity and intend to maintain sufficient liquidity on our balance sheet in order to meet any margin calls in the event of any significant decreases in asset values. As of June 30, 2025, the weighted average haircut under our repurchase agreements was 33.0% (or 31.4%, if we had borrowed the maximum amount approved by its repurchase agreement counterparties as of such dates). In addition, our existing master repurchase facilities are not entirely term-matched financings and may mature before our CRE debt investments that represent underlying collateral to those financings. As we negotiate renewals and extensions of these liabilities, we may experience lower advance rates and higher pricing under the renewed or extended agreements.

Previous wording

Portland, OR Retail /Redevelopment—In December 2021, we took title a Portland retail property and accounted for the property on a consolidated basis. The transaction was accounted for as an asset acquisition under Accounting Standards Codification ("ASC") 805. Accordingly, we recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. We contributed a portion of the REO asset to a joint venture (the "REO JV") with a third party local developer (“JV Partner”), whereby we had a 90% interest and the JV Partner had a 10% interest. The JV Partner's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets. As of March 31, 2025, we have a priority of distributions up to $80.9 million before the JV Partner can participate in the economics of the REO JV.

Current wording

Portland, OR Retail /Redevelopment—In December 2021, we took title a Portland retail property and recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. We contributed a portion of the REO asset to a joint venture (the "REO JV") with a third party local developer (“JV Partner”), whereby we had a 90% interest and the JV Partner had a 10% interest. The JV Partner's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets. In June 2025, we sold a portion of the property for $6.0 million and recognized a realized gain of $0.7 million after closing costs. As of June 30, 2025, we have a priority of distributions up to $77.7 million before the JV Partner can participate in the economics of the REO JV.

Previous wording

Mountain View, CA Office —In June 2024, we and the KKR affiliate took title to a Mountain View office property through a DIL and we accounted for the property on a consolidated basis. Ours and the KKR affiliate's interest in the property were 68.9% and 31.1%, respectively. The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, we recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. The KKR affiliate's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets.

Current wording

Mountain View, CA Office —In June 2024, we and the KKR affiliate took title to a Mountain View office property through a DIL and we accounted for the property on a consolidated basis. Ours and the KKR affiliate's interest in the property were 68.9% and 31.1%, respectively. We recorded the property and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities. The KKR affiliate's interest in the property was presented within "Noncontrolling interests in equity of consolidated joint ventures" on the Condensed Consolidated Balance Sheets.

Previous wording

As of March 31, 2025, the remaining REO assets and liabilities met the criteria to be classified as held for sale under ASC 360. As such, depreciation and amortization on the REO and related lease intangibles were suspended.

Current wording

As of June 30, 2025, the Philadelphia, PA Office and West Hollywood, CA Condo properties met the criteria to be classified as held for sale under ASC 360. As such, depreciation and amortization on the properties and related lease intangibles were suspended.

Previous wording

Philadelphia, PA Office / Garage —In December 2023, we took title to a Philadelphia office portfolio through a deed-in-lieu of foreclosure ("DIL"). The transaction was accounted for as an asset acquisition under ASC 805. Accordingly, we recorded the portfolio and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities.

Current wording

Philadelphia, PA Office —In December 2023, we took title to a Philadelphia office portfolio through a deed-in-lieu of foreclosure ("DIL") and recorded the portfolio and its net assets on the Condensed Consolidated Balance Sheets based on the estimated fair value of acquired assets and assumed liabilities.

Previous wording

Seattle, WA Life Science (Equity Method Investment) — In June 2024, we and the KKR affiliates took title to a Seattle life science property through a DIL under a Tenant-in-Common ("TIC") agreement. Under the TIC agreement, we and the KKR affiliate held an economic interest of 74.6% and 25.4%, respectively, and shared decision-making. Under ASC 970-810, we accounted for the TIC agreement as an undivided interest in the property and recorded an equity method investment based on our share of the estimated fair value of the property's net assets.

Current wording

Seattle, WA Life Science — In June 2024, we and the KKR affiliates took title to a Seattle life science property through a DIL under a Tenant-in-Common ("TIC") agreement. Under the TIC agreement, we and the KKR affiliate held an economic interest of 74.6% and 25.4%, respectively, and shared decision-making. Under ASC 970-810, we accounted for the TIC agreement as an undivided interest in the property and recorded an equity method investment based on our share of the estimated fair value of the property's net assets.

Previous wording

The following table summarizes the changes in our results of operations for three months ended March 31, 2025 and December 31, 2024 (dollars in thousands, except per share data):

Current wording

The following table summarizes the changes in our results of operations for three months ended June 30, 2025 and March 31, 2025 (amounts in thousands, except per share data):

Previous wording

Net interest income decreased by $3.8 million during the three months ended March 31, 2025, as compared to the preceding three-month period. This decrease was due primarily to a decrease in index rates and fewer calendar days compared to the preceding three month period. We recorded $3.4 million of deferred loan fees and origination discounts accreted into interest income during the three months ended March 31, 2025, as compared to $3.7 million during the preceding period. In addition, we recorded $3.1 million of deferred financing costs amortization into interest expense during the three months ended March 31, 2025, as compared to $1.3 million for the preceding period.

Current wording

Net interest income decreased by $1.2 million during the three months ended June 30, 2025, as compared to the preceding three-month period. This decrease was due primarily to additional loans placed on nonaccrual status and a decline in overall portfolio size. We recorded $4.4 million of deferred loan fees and origination discounts accreted into interest income during the three months ended June 30, 2025, as compared to $3.4 million during the preceding period. In addition, we recorded $3.0 million of deferred financing costs amortization into interest expense during the three months ended June 30, 2025, as compared to $3.1 million for the preceding period.

Previous wording

Total other income decreased by $0.8 million during the three months ended March 31, 2025, as compared to the preceding period. This decrease was due primarily to a $0.7 million decrease in revenue from REO operations.

Current wording

Total other income increased by $1.8 million during the three months ended June 30, 2025, as compared to the preceding period. This increase was due primarily to a $1.2 million gain on sale of REO investments.

Previous wording

Total operating expenses increased by $20.8 million during the three months ended March 31, 2025, as compared to the preceding period. This increase was primarily due to a $20.3 million change in the provision for credit losses. The provision for credit losses during the three months ended March 31, 2025 was due primarily to additional reserves for risk-rated 5 and risk-rated 4 loans in the multifamily and life science sectors.

Current wording

Total operating expenses increased by $25.5 million during the three months ended June 30, 2025, as compared to the preceding period. This increase was primarily due to a $25.0 million change in the provision for credit losses. The provision for credit losses during the three months ended June 30, 2025 was due primarily to additional reserves for risk-rated 5 loans in the office and life science sectors.

Previous wording

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Current wording

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Previous wording

The following table summarizes the changes in our results of operations for the three months ended March 31, 2025 and 2024 (dollars in thousands, except per share data):

Current wording

The following table summarizes the changes in our results of operations for the six months ended June 30, 2025 and 2024 (amounts in thousands, except per share data):

Previous wording

Net interest income decreased by $7.8 million during the three months ended March 31, 2025, as compared to the corresponding period in the prior year. This decrease was due primarily to a reduced loan portfolio size as a result of repayments or other resolutions and lower index rates. We recorded $3.4 million of deferred loan fees and origination discounts accreted into interest income during the three months ended March 31, 2025, as compared to $4.7 million during the prior year period. In addition, we recorded $3.1 million of deferred financing costs amortization into interest expense during the three months ended March 31, 2025, as compared to $5.0 million during the prior year period.

Current wording

Net interest income decreased by $18.1 million during the six months ended June 30, 2025, as compared to the corresponding period in the prior year. This decrease was due primarily to a reduced loan portfolio size as a result of repayments or other resolutions and lower index rates. We recorded $7.8 million of deferred loan fees and origination discounts accreted into interest income during the six months ended June 30, 2025, as compared to $9.6 million during the prior year period. In addition, we recorded $6.1 million of deferred financing costs amortization into interest expense during the six months ended June 30, 2025, as compared to $9.3 million during the prior year period.

Previous wording

Total other income decreased by $3.7 million during the three months ended March 31, 2025, as compared to the prior year period. This decrease was due primarily to a $2.1 million decrease in revenue from REO operations and a $1.0 million operating loss related to our real estate asset equity method investment.

Current wording

Total other income decreased by $5.3 million during the six months ended June 30, 2025, as compared to the prior year period. This decrease was due primarily to a $3.8 million decrease in revenue from REO operations and a $2.1 million operating loss related to our real estate asset equity method investment, which was partially offset by a $1.2 million gain on sale of REO investments during the current period.

Previous wording

Total operating expenses decreased by $9.2 million during the three months ended March 31, 2025, as compared to the prior year period. This decrease was due primarily to a $8.4 million change in the provision for credit losses. This change was due primarily to a higher provision for credit losses of $33.3 million on risk-rated 5 loans in the office sector during the prior year period compared to the provision for credit losses of $24.9 million on risk-rated 5 and risk-rated 4 loans in the multifamily and life science sectors during the three months ended March 31, 2025 .

Current wording

Total operating expenses increased by $35.2 million during the six months ended June 30, 2025, as compared to the prior year period. This increase was due primarily to a $36.9 million change in the provision for credit losses. This change was due primarily to a higher provision for credit losses on risk-rated 5 loans in the office and life science sectors during the current period.

Previous wording

Our primary sources of liquidity include $106.4 million of cash on our Condensed Consolidated Balance Sheets, $570.0 million of available capacity on our corporate Revolver, $43.9 million of available borrowings under our financing arrangements based on existing collateral, and cash flows from operations. In addition, we had $349.9 million of total unencumbered assets, including $210.2 million of real estate owned assets, $35.7 million of investments in CMBS B-Pieces and $104.0 million of unencumbered senior loans, that can be financed, as of March 31, 2025. Our corporate Revolver and secured term loan are secured by corporate level guarantees and include net equity interests in the investment portfolio. We may seek additional sources of liquidity from syndicated financing, other borrowings (including borrowings not related to a specific investment) and future offerings of equity and debt securities.

Current wording

Our primary sources of liquidity include $107.7 million of cash on our Condensed Consolidated Balance Sheets, $620.0 million of available capacity on our corporate Revolver, $29.0 million of available borrowings under our financing arrangements based on existing collateral, and cash flows from operations. In addition, we had $253.0 million of total unencumbered assets, including $206.3 million of real estate owned assets, $44.6 million of CMBS investments and $2.1 million of unencumbered senior loans, that can be financed, as of June 30, 2025. Our corporate Revolver and secured term loan are secured by corporate level guarantees and include net equity interests in the investment portfolio. We may seek additional sources of liquidity from syndicated financing, other borrowings (including borrowings not related to a specific investment) and future offerings of equity and debt securities.

Previous wording

As described in Note 9 to our condensed consolidated financial statements, we have off-balance sheet arrangements related to VIEs that we account for using the equity method of accounting and in which we hold an economic interest or have a capital commitment. Our maximum risk of loss associated with our interests in these VIEs is limited to the carrying value of our investment in the entities and any unfunded capital commitments. As of March 31, 2025, we held $35.7 million of interests in such entities, which does not include a remaining commitment of $4.3 million to our CMBS B-Piece investment that we are required to fund if called.

Current wording

As described in Note 10 to our condensed consolidated financial statements, we have off-balance sheet arrangements related to VIEs that we account for by either consolidating or by using the equity method of accounting when we hold an economic interest or have a capital commitment. Our maximum risk of loss associated with our interests in these VIEs is limited to the carrying value of our net investment in such entities and any unfunded capital commitments. As of June 30, 2025, we held $9.1 million of net investment in a consolidated CMBS trust and $35.5 million of interests in a CMBS equity method investment.

Previous wording

To facilitate future offerings of equity, debt and other securities, we have in place an effective shelf registration statement (the “Shelf”) with the SEC. The amount of securities to be issued pursuant to this Shelf was not specified when it was filed and there is no specific dollar limit on the amount of securities we may issue. The securities covered by this Shelf include: (i) common stock, (ii) preferred stock, (iii) depository shares, (iv) debt securities, (v) warrants, (vi) subscription rights, (vii) purchase contracts, and (viii) units. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering material, at the time of any offering.

Current wording

To facilitate future offerings of equity, debt and other securities, we have in place an effective shelf registration statement (the “Shelf”) with the SEC. The amount of securities that may be issued pursuant to this Shelf is not to exceed $750 million. The securities covered by this Shelf include: (i) common stock, (ii) preferred stock, (iii) depository shares, (iv) debt securities, (v) warrants, (vi) subscription rights, (vii) purchase contracts, and (viii) units. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering material, at the time of any offering.

Previous wording

We have also entered into an equity distribution agreement with certain sales agents, pursuant to which we may sell, from time to time, up to an aggregate sales price of $100.0 million of our common stock, pursuant to a continuous offering program (the “ATM”), under the Shelf. Sales of our common stock made pursuant to the ATM may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. During the three months ended March 31, 2025, we did not sell any shares of common stock under the ATM. As of March 31, 2025, $93.2 million remained available for issuance under the ATM.

Current wording

We have also entered into an equity distribution agreement with certain sales agents, pursuant to which we may sell, from time to time, up to an aggregate sales price of $100.0 million of our common stock, pursuant to a continuous offering program (the “ATM”), under the Shelf. Sales of our common stock made pursuant to the ATM may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. During the six months ended June 30, 2025, we did not sell any shares of common stock under the ATM. As of June 30, 2025, $93.2 million remained available for issuance under the ATM.

Previous wording

See Notes 5, 6, 7 and 10 to our condensed consolidated financial statements for additional details regarding our secured financing agreements, collateralized loan obligations, secured term loan and stock activity.

Current wording

See Notes 5, 6, 7 and 11 to our condensed consolidated financial statements for additional details regarding our secured financing agreements, collateralized loan obligations, secured term loan and stock activity.

Previous wording

Our primary sources of liquidity include cash and cash equivalents and available borrowings under our secured financing agreements, inclusive of our Revolver. Amounts available under these sources as of the date presented are summarized in the following table (dollars in thousands):

Current wording

Our primary sources of liquidity include cash and cash equivalents and available borrowings under our secured financing agreements, inclusive of our Revolver. Amounts available under these sources as of the date presented are summarized in the following table (amounts in thousands):

Previous wording

We also had $349.9 million of total unencumbered assets, including $210.2 million of real estate owned assets, $35.7 million of investments in CMBS B-Pieces and $104.0 million of unencumbered senior loans as of March 31, 2025. In addition to our primary sources of liquidity, we have the ability to access further liquidity through our ATM program and public offerings of debt and equity securities. Our existing loan portfolio also provides us with liquidity as loans are repaid or sold, in whole or in part, and the proceeds from repayment become available for us to invest.

Current wording

We also had $253.0 million of total unencumbered assets, including $206.3 million of real estate owned assets, $44.6 million of CMBS investments and $2.1 million of unencumbered senior loans as of June 30, 2025. In addition to our primary sources of liquidity, we have the ability to access further liquidity through our ATM program and public offerings of debt and equity securities. Our existing loan portfolio also provides us with liquidity as loans are repaid or sold, in whole or in part, and the proceeds from repayment become available for us to invest.