Granite Point Mortgage Trust Inc

Note 1. Organization and Operations

Granite Point Mortgage Trust Inc., or the Company, is an internally managed commercial real estate finance company that focuses primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments. These investments are capitalized by accessing a variety of funding sources, including borrowing under the Company’s bank credit facilities or other asset financings, issuing commercial real estate collateralized loan obligations, or CRE CLOs, and issuing other forms of secured and unsecured debt and equity securities, depending on market conditions and the Company’s view of the most appropriate funding option available for the Company’s investments. The Company is not in the business of buying or trading securities, and the only securities it owns are the retained interests from its CRE CLOs. The Company’s investment objective is to preserve the Company’s stockholders’ capital while generating attractive risk-adjusted returns over the long term, primarily through dividends derived from current income produced by the Company’s investment portfolio. The Company’s common stock is listed on the NYSE under the symbol “GPMT”. Our principal executive offices are located at 3 Bryant Park, 24th Floor, New York, New York 10036. The Company operates its business in a manner that is intended to permit it to maintain its exclusion from registration under the Investment Company Act of 1940, or the Investment Company Act. The Company operates its business asone segment. The Company was incorporated in Maryland on April 7, 2017, and commenced operations as a publicly traded company on June 28, 2017.

The Company has elected to be treated as a real estate investment trust, or REIT, as defined under the Internal Revenue Code of 1986, as amended, or the Code, for U.S. federal income tax purposes. As long as the Company continues to comply with a number of requirements under federal tax law and maintains its qualification as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that the Company distributes its taxable income to its stockholders on an annual basis and does not engage in prohibited transactions. However, certain activities that the Company may perform may cause it to earn income which will not be qualifying income for REIT purposes. The Company has designated one of its subsidiaries as a taxable REIT subsidiary, or TRS, as defined in the Code, to engage in such activities.

Note 2. Basis of Presentation and Significant Accounting Policies

Consolidation and Basis of Presentation

The accompanying consolidated financial statements include the accounts of all subsidiaries; inter-company accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles, or GAAP.

All entities in which the Company holds investments that are considered variable interest entities, or VIEs, for financial reporting purposes were reviewed for consolidation under the applicable consolidation guidance. Whenever the Company has both the power to direct the activities of an entity that most significantly impact the entity’s performance, and the obligation to absorb losses or the right to receive benefits of the entity that could be significant, the Company consolidates the entity. See Note 5 -Variable Interest Entities and Securitized Debt Obligationsto the Company’s Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details regarding consolidation of VIEs.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make a number of significant estimates. These include estimates of amount and timing of allowances for credit losses, fair value of certain assets and liabilities including real estate owned and associated purchase price allocation of fair value, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g., valuation changes to the underlying collateral of loans due to changes in market interest and capitalization rates, leasing, credit-worthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, overall economic and capital markets conditions, the broader commercial real estate market, local geographic sub-markets or other factors) will occur in the near term.

The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2024. However, the Company’s actual results could ultimately differ from its estimates and such differences may be material.

Significant Accounting Policies

Loans Held-for-Investment, Net

The Company originates and acquires commercial real estate debt and related instruments generally to be held as long-term investments. These assets are classified as loans held-for-investment on the consolidated balance sheets. Additionally, the Company finances pools of its commercial real estate loans through CRE CLOs, which are considered VIEs for financial reporting purposes and, thus, are reviewed for consolidation under the applicable consolidation guidance. The Company has both the power to direct the activities of the CRE CLOs that most significantly impact the entities’ performance and the obligation to absorb losses or the right to receive benefits of the entities that could be significant, therefore, the Company consolidates the CRE CLOs and classifies the underlying loans as loans held-for-investment. The Company utilizes a third-party servicer who services the commercial real estate loans that the Company invests in and commercial real estate loans underlying CRE CLOs and other commercial real estate debt investments to collect principal and interest payments on such commercial real estate loans and performs certain asset management services.

Interest income on loans held-for-investment is recognized at the loan coupon rate. Any premiums or discounts, loan fees, contractual exit fees and origination costs are amortized or accreted into interest income over the lives of the loans using the effective interest method. Generally, loans held-for-investment are placed on nonaccrual status when delinquent for more than 90 days or when determined not to be probable of full collection. Interest income recognition is suspended when loans are placed on nonaccrual status. Interest accrued, but not collected, at the date loans are placed on nonaccrual is written off by reversing the accrued interest through interest income if determined not probable of collection, and subsequently recognized only to the extent it is received in cash or until it qualifies for return to accrual status; however, accrued interest receivable that has not been written off after 90 days, and subsequently is determined not to be probable of full collection, is written off within the provision for credit losses on the Company’s consolidated statements of comprehensive (loss) income. When there is doubt regarding the ultimate collectability of loan principal, all cash received is applied to reduce the carrying value of such loans. Loans held-for-investment are restored to accrual status only when contractually current or the collection of future payments is reasonably assured. The Company may make exceptions to placing a loan on nonaccrual status if the loan has sufficient collateral value and is in the process of collection or has been modified.

Loans held-for-investment are reported at cost, net of allowance for credit losses, any unamortized acquisition premiums or discounts, loan fees and origination costs, as applicable. Changes to the allowance for credit losses are recognized through net (loss) income on the Company’s consolidated statements of comprehensive (loss) income. The allowance is based on relevant information about past events, including historical loss experience, current portfolio, market conditions and reasonable and supportable forecasts for the duration of each respective loan. All loans held-for-investment within the Company’s portfolio have some amount of expected loss to reflect the principal underlying the Current Expected Credit Losses, or CECL, model that all loans have some inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. Estimating an allowance for credit losses is inherently subjective, as it requires management to exercise significant judgment in establishing appropriate factors used to determine the allowance and a variety of subjective assumptions, including (i) determination of relevant historical loan loss data sets, (ii) the expected timing and amount of future loan fundings and repayments, (iii) the current credit quality of loans and operating performance of loan collateral and the Company’s expectations of performance, (iv) selecting the forecast for macroeconomic conditions and (v) determining the reasonable and supportable forecast period.

The Company’s loans typically include commitments to fund incremental proceeds to its borrowers over the life of the loan. Those future funding commitments are also subject to an allowance for credit losses. The allowance for credit losses related to future loan fundings is recorded as a component of other liabilities on the Company’s consolidated balance sheets, and not as an offset to the related loan balance. This allowance for credit losses is estimated using the same process outlined below for the Company’s outstanding loan balances, and changes in this component of the allowance for credit losses similarly flow through the Company’s consolidated statements of comprehensive (loss) income.

The allowance for credit losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Company’s investment portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually. The Company employed quarterly updated macroeconomic forecasts, which reflect expectations for overall economic output, interest rates, values of real estate properties and other factors, geopolitical instability and the Federal Reserve monetary policy impact on the overall U.S. economy and commercial real estate markets generally. These estimates may change in future periods based on available future macroeconomic data and might result in a material change in the Company’s future estimates of expected credit losses for its loan portfolio.

The Company generally estimates its allowance for credit losses by using a probability-weighted analytical model that considers the likelihood of default and loss-given-default for each individual loan. The Company licenses certain macroeconomic financial forecasts from a third-party to inform its view of the potential future impact that broader macroeconomic conditions may have on the performance of the loans held-for-investment. These macroeconomic factors include unemployment rates, interest rates, price indices for commercial property and other factors. The Company may use one or more of these forecasts in the process of estimating its allowance for credit losses. Selection of these economic forecasts requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty, and the actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented. Significant inputs to the Company’s estimate of the allowance for credit losses include the reasonable and supportable forecast period and loan specific factors such as debt service coverage ratio, or DSCR, loan-to-value ratio, or LTV, remaining contractual loan term, property type and others. In addition, the Company also considers relevant loan-specific qualitative factors to estimate its allowance for credit losses. In certain instances, for loans with unique risk characteristics, the Company may instead elect to employ different methods to estimate loan losses.

The Company considers loan investments that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral, and (ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans. For loans that the Company determines foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral, less costs to sell if the Company intends to sell the collateral, and the amortized cost basis of the loan as of the measurement date. For collateral-dependent loans that the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan.

While utilizing the practical expedient for collateral-dependent loans, the Company generally estimates the fair value of the loan’s underlying collateral using a discounted cash flow model, less the estimated cost to foreclose and sell the property when applicable. The estimation of the fair value of the collateral property involves using various Level 3 unobservable assumptions, which are inherently uncertain and subjective, and are in part developed based on discussions with various market participants and management’s best estimates, which may vary depending on the information available and market conditions as of the valuation date. These assumptions include property net operating income, capitalization rates, and discount rates. Selecting the appropriate inputs and assumptions requires significant judgment and consideration of various factors that are specific to the underlying collateral property being assessed. The Company’s estimate of the fair value of the collateral property is sensitive to both the valuation methodology selected and inputs used in the analysis. As a result, the fair value of the collateral property used in determining the expected credit losses is subject to uncertainty and any actual losses, if incurred, could differ materially from the estimated provision for credit losses.

Loans Held-for-Sale

The Company classifies certain loans as held-for-sale based on management’s intent to sell or otherwise dispose of them. Loans held-for-sale are reported at the lower of amortized cost or fair value. Interest income on loans held-for-sale is recognized at the loan coupon rate and recorded on the consolidated statements of comprehensive (loss) income.

Cash and Cash Equivalents

Cash and cash equivalents include cash held in bank accounts and cash held in money market funds on an overnight basis.

Restricted Cash

Restricted cash includes certain cash balances the Company is required to maintain in restricted accounts as collateral for the Company’s repurchase agreements and with counterparties to support activities related to securities. Cash held by counterparties as collateral, which resides in non-interest bearing accounts, is not available to the Company for general corporate purposes, but may be applied against amounts due to securities and repurchase agreement counterparties or returned to the Company when the collateral requirements are exceeded or at the maturity of the repurchase agreement.

Accrued Interest Receivable

Accrued interest receivable represents interest that is due and payable to the Company. Cash payment is generally received within 30 days of recording the receivable. The Company generally writes off the accrued interest receivable balance when interest is 90 days or more past due unless the loan is both well secured and in the process of collection. Write-offs of accrued interest receivable are generally recognized within interest income in the consolidated statements of comprehensive (loss) income. Accrued interest receivable that has not been written off after 90 days, and subsequently is determined not to be probable of full collection, is written off within the provision for credit losses on the Company’s consolidated statements of comprehensive (loss) income.

Due from Counterparties

Due from counterparties includes cash held by counterparties as collateral against the Company’s repurchase agreements but represents excess capacity and deemed unrestricted and a receivable from the counterparty as of the balance sheet date. Due from counterparties is included within other assets on the Company’s consolidated balance sheets.

Real Estate Owned

As part of its portfolio management strategy to maximize an economic outcome from a defaulted loan, the Company may assume legal title or physical possession of the underlying collateral property through foreclosure or the execution of a deed-in-lieu of foreclosure. Real estate acquired through a foreclosure or by deed-in-lieu of foreclosure is classified as REO. The Company’s basis in REO and related acquired assets is equal to the estimated fair value of the collateral on the acquisition date and allocated within Real estate owned, Other assets and Other liabilities on the Company’s consolidated balance sheets. The estimated fair value of REO is determined using generally accepted valuation techniques, including a discounted cash flow model and inputs that include the highest and best use for each asset, estimated future values based on discussions with local brokers, investors and other market participants, the estimated holding period for the asset, and discount rates and capitalization rates that reflect estimated investor return requirements for the risks associated with the expected use of each asset. If the estimated fair value of REO is lower than the carrying value of the related loan upon acquisition, the difference is recorded through the provision for credit losses in the Company’s consolidated statements of comprehensive (loss) income. Upon acquisition, the Company allocates the fair value of REO to land and land improvements, building and building improvements, tenant improvements, intangible assets and intangible liabilities, utilizing the relative fair value, as applicable.

As of December 31, 2024, REO and related acquired assets, except for land, are depreciated using the straight-line method over estimated useful lives as follows:

Renovations and/or replacements that improve or extend the life of the REO are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred in the Company’s consolidated statements of comprehensive (loss) income.

Building and tenant improvements depreciation and in-place lease intangibles amortization expense are recognized in expenses from real estate owned operations in the Company’s consolidated statements of comprehensive (loss) income. Above-market lease intangibles amortization and below-market lease intangibles accretion are recognized in revenue from real estate owned operations in the Company’s consolidated statements of comprehensive (loss) income.

REO is initially measured at fair value and is thereafter subject to an impairment assessment on a quarterly basis. Subsequent to an REO acquisition, events or circumstances may occur that may result in a material and sustained decrease in the cash flows generated from the property. REO is evaluated for recoverability when impairment indicators are identified. Upon the identification of an impairment indicator, an REO asset is further considered for impairment when the sum of estimated future undiscounted cash flows to be generated by the REO asset over the estimated remaining holding period is less than the carrying value of such REO asset. An impairment charge is recorded when the carrying value of the REO exceeds the fair value. When determining the fair value of an REO asset, the Company makes certain assumptions including, but not limited to, projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the REO asset. Any impairment losses and gains or losses on sale are included in the Company’s consolidated statements of comprehensive (loss) income. Revenue and expenses from REO operations are included in the consolidated statements of comprehensive (loss) income within Revenue from real estate owned operations and Expenses from real estate owned operations, as applicable. The Company did not record any impairments of real estate for the years ended December 31, 2024, and 2023.

Repurchase Facilities

The Company finances certain of its loans held-for-investment through the use of repurchase facilities. Borrowings under repurchase facilities generally bear interest rates of a specified margin over one-month SOFR, and are generally uncommitted. The repurchase facilities are treated as collateralized financing transactions and are carried at their contractual amounts, as specified in the respective agreements.

Securitized Debt Obligations

The Company finances pools of its loans held-for-investment through CRE CLOs retaining the subordinate securities in its investment portfolio. CRE CLOs are accounted for as financing arrangements and consolidated on the Company’s consolidated financial statements. The securitized debt obligations not retained by the Company, which are nonrecourse to the Company beyond the assets held in CRE CLOs, are recorded at outstanding principal balance, net of any unamortized deferred debt issuance costs, on the Company’s consolidated balance sheets.

Secured Credit Facilities

The Company finances certain of its loans held-for-investment through the use of a secured credit facility. Borrowings under the secured credit facility generally bear interest rates of a specified margin over one-month SOFR. The secured credit facility financings are treated as collateralized financing transactions and are carried at their contractual amounts, as specified in the respective agreements.

Deferred Debt Issuance Costs

Because the outstanding balance of the Company’s repurchase agreement facilities, asset-specific financing facilities, revolving credit facilities and secured credit facilities may fluctuate as the Company borrows and repays amounts, the Company presents unamortized deferred debt issuance costs related to these credit facilities as an asset on its consolidated balance sheets within other assets. Amortization of deferred debt issuance costs over the term of the related facilities is reported within interest expense on the consolidated statements of comprehensive (loss) income.

Accrued Interest Payable

Accrued interest payable represents interest that is due and payable to third-parties. Interest is generally paid within 30 days to three months of recording the payable, based upon the Company’s remittance requirements. Accrued interest payable is included within other liabilities on the Company’s consolidated balance sheets.

Income Taxes

The Company has elected to be taxed as a REIT under the Code and the corresponding provisions of state law. To qualify as a REIT, the Company must distribute at least 90% of its annual REIT taxable income to stockholders (not including taxable income retained in its taxable subsidiaries) within the time frame set forth in the Code and the Company must also meet certain other requirements. In addition, because certain activities, if performed by the Company, may cause the Company to earn income which does not qualify for the REIT gross income tests, the Company has formed a TRS, to engage in such activities. The TRS’s activities are subject to income taxes, as well as any REIT taxable income not distributed to stockholders.

The Company assesses its tax positions for all open tax years and determines whether the Company has any material unrecognized liabilities in accordance with ASC 740, Income Taxes, or ASC 740. The Company records these liabilities to the extent the Company deems them more likely than not to be incurred. The Company classifies interest and penalties on material uncertain tax positions as interest expense and operating expense, respectively, in its consolidated statements of comprehensive (loss) income.

Permanent Equity

The Company has common stock and preferred stock outstanding that are classified as permanent equity. The Company’s common stock is perpetual in nature with voting rights and dividend rights. The Company’s Series A Preferred Stock is classified as permanent equity. The outstanding shares of Series A Preferred Stock may be redeemed by the Company on and after November 30, 2026. See Note 11 –Preferred Stock for additional details regarding the Series A Preferred Stock.

Earnings (Loss) Per Share

Basic and diluted earnings per share are computed by dividing net income by the weighted average number of common shares and potential common shares outstanding. For both basic and diluted per share calculations, potential common shares represents issued and unvested shares of restricted stock, which have full rights to the common stock dividend declarations of the Company.

Equity Incentive Plans

The Company adopted the 2017 Equity Incentive Plan, or the 2017 Plan, to provide incentive compensation to attract and retain qualified directors, officers, advisors, consultants and other personnel. The Plan permitted the granting of restricted shares of common stock, phantom shares, dividend equivalent rights and other equity-based awards.

On June 2, 2022, the Company’s stockholders approved the adoption of the Granite Point 2022 Omnibus Incentive Plan, or the 2022 Plan. The 2022 Plan permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (both non-performance-based, or RSUs, and performance-based, or PSUs), dividend equivalent rights, other stock-based awards and other cash-based awards to employees, certain consultants of the Company and members of the board of directors.

Since the adoption of the 2022 Plan, no new equity awards may be granted under the 2017 Plan, but previously-granted RSUs and PSUs remained outstanding under the 2017 Plan as of December 31, 2024.

See Note 13 -Equity Incentive Plansfor further details regarding the Equity Incentive Plans.

The cost of equity-based compensation is measured at its fair value at the grant date. Restricted stock and RSU-related compensation is amortized over the vesting term. PSU-related compensation is amortized over the vesting term to the extent that management estimates that it is probable that the performance conditions will be achieved. Changes in the estimate of the probability of achievement of the PSU performance conditions are recorded as a cumulative catch-up adjustment to retroactively apply the new estimate. The Company accounts for forfeitures as they occur. Amortization expense is included within compensation and benefits expense on the consolidated statements of comprehensive (loss) income.

Recently Issued and/or Adopted Accounting Standards

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU 2023-07. The new guidance requires a public entity with a single reportable segment to provide new disclosures surrounding segment expenses and other segment items on an annual and interim basis, with the intention of improving reportable segment disclosure requirements as well as enhancing interim disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods with fiscal years beginning after December 15, 2024, with the guidance to be adopted retrospectively to all prior periods presented. The Company has adopted ASU 2023-04, which did not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09. The new guidance requires entities to disclose the amount of income taxes paid, net of refunds received, disaggregated by federal, state and foreign jurisdiction, with the intention of improving the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and is to be adopted on a prospective basis with the option to apply retrospectively. The Company has determined ASU 2023-09 will not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.

Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, or ASU 2024-03. The new guidance requires a public business entity to provide disaggregated disclosures in the notes to the financial statements of certain categories of expenses that are included in expense line items on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026. The guidance is applied prospectively and may be applied retrospectively. The Company is evaluating the impact of ASU 2024-03.

Note 3. Loans Held-for-Investment, Net of Allowance for Credit Losses

The following tables summarize the Company’s loans held-for-investment by asset type, property type and geographic location as of December 31, 2024, and December 31, 2023:

(1)Loans primarily secured by a first priority lien on commercial real property and related personal property and also includes, when applicable, any companion subordinate loans.

(2)A subordinate loan secured by the same mortgage as the senior loan.

(3)Weighted average coupon inclusive of the impact of nonaccrual loans.

(4)Based on contractual maturity date, including maturity defaulted loans with no remaining term. Certain loans are subject to contractual extension options with such conditions stipulated in the applicable loan documents. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment fee. The Company may also extend contractual maturities in connection with certain loan modifications.

Loan Portfolio Activity

The following table summarizes activity related to loans held-for-investment, net of allowance for credit losses, for the years ended December 31, 2024, and 2023:

(1)Includes the $48.0 million loan assumption accounted for as a new loan.

Allowance for Credit Losses

The following table presents the changes for the years ended December 31, 2024, and 2023 in the allowance for credit losses on loans held-for-investment:

(1)The CECL reserve for unfunded commitments is included in “Other liabilities” on the consolidated balance sheets.

During the year ended December 31, 2024, the Company recorded a net increase of $63.9 million in its allowance for credit losses on its loan portfolio primarily due to a $210.2 million increase in allowance inclusive of an $8.8 million recovery of amounts previously written-off, partially offset by $(146.3) million in write-offs. The increase in the allowance was primarily related to specific reserves on loans that were assessed individually, and due to the ongoing challenges in the commercial real estate market and expectations for further pressure on property values, and other loan specific assumptions employed in estimating the general CECL reserve. The write-offs were primarily related to loans that had been previously assessed individually that were resolved during the year ended December 31, 2024.

During the year ended December 31, 2024, the Company resolved nine senior loans with an aggregate principal balance of $344.4 million secured bythree office properties, two multifamily properties, two mixed-use retail and office properties, one hotel property, andone mixed-use event space and office property. Three of the loans had been considered collateral-dependent and had previously been placed on nonaccrual status as of December 31, 2023. Six of the loans were considered collateral-dependent and placed on nonaccrual status for the first time during the year ended December 31, 2024. In connection with the resolutions, the Company incurred write-offs of $(142.2) million. Additionally, the Company incurred a write-off of $(4.2) million onone loan that was not considered collateral-dependent. See Loan Modifications below for further detail.

As of December 31, 2024, the Company hadseven collateral-dependent loans with an aggregate principal balance of $453.3 million, for which the Company recorded an allowance for credit losses of $154.7 million. These loans were individually assessed in accordance with the CECL framework and the allowance for credit losses was determined based on the estimates of the collateral properties’ fair value. The performance of the collateral properties securing these loans, which include four office buildings, one mixed-use property with an office component, one hotel asset andone multifamily property, has been impacted by an uncertain commercial real estate market and macroeconomic outlook, which includes weakening in credit fundamentals, capital markets volatility and significantly reduced real estate transaction activity, especially for certain property types, such as office assets located in underperforming markets with reduced tenant demand, and a meaningfully higher cost of capital driven by high interest rates. These macroeconomic and market factors have resulted in the slowing of business plan execution and reduced market liquidity, thereby impacting the borrowers’ ability to either sell or refinance their properties to repay the Company’s loans. See Note 9 -Fair Value, for further detail on the fair value measurement of these loans.

Nonaccrual Loans

The following table presents the carrying value of loans held-for-investment on nonaccrual status for the years ended December 31, 2024, and 2023:

As of December 31, 2024, the Company hadseven senior loans with a total unpaid principal balance of $453.3 million and carrying value of $298.4 million that were held on nonaccrual status, compared toeight senior loans with a total unpaid principal balance of $450.1 million and carrying value of $343.7 million that were held on nonaccrual status as of December 31, 2023. Additionally, the Company hadone loan with a principal balance of $67.3 million that was in maturity default and remained on accrual status as of December 31, 2024. Subsequent to year end, the loan was extended from December 9, 2024, to December 9, 2025. All other loans were considered current with respect to principal and interest payments due as of December 31, 2024, and December 31, 2023.

Loan Modifications

As part of its asset and portfolio management strategy, the Company may amend or modify a loan depending on the loan’s specific facts and circumstances. These loan modifications typically include additional time for the borrower to refinance or sell the collateral property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan’s maturity, and/or deferral of scheduled principal payments. In exchange for a modification, the Company may receive a partial repayment of principal, a short-term accrual of capitalized interest for a portion of interest due, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection, and/or an increase in the loan coupon or fees, among other items.

During the twelve months ended December 31, 2024, the Company entered into three loan modifications that met the disclosure requirements pursuant to ASU 2022-02, Troubled Debt Restructurings And Vintage Disclosures.

During the twelve months ended December 31, 2024, the Company completed the modification of a first mortgage loan secured by a multifamily student housing property in Louisville, KY. As of December 31, 2024, and December 31, 2023, the loan had a principal balance of $50.0 million and $48.5 million, respectively, and an amortized cost of $49.8 million and $48.3 million, respectively. The terms of the modification included, among other things, a 12-month extension of the fully-extended maturity date to November 9, 2025, the full deferral of debt service payments with interest capitalized and compounding, the deferral of the extension fee and the Company’s agreement to pay for approved expenses, in its sole discretion. Due to the uncertainty with respect to the collection of future interest accruals, the loan was placed on nonaccrual status as of November 9, 2023 in conjunction with a previous modification. The loan was performing pursuant to its modified contractual terms as of December 31, 2024.

During the twelve months ended December 31, 2024, the Company completed the modification of a first mortgage loan secured by a mixed-use multifamily, event space and office property located in Pittsburgh, PA. As of December 31, 2024, and December 31, 2023, the loan had a principal balance of $32.0 million and $51.1 million, and an amortized cost of $30.3 million and $49.9 million, respectively. The terms of the modification included, among others, (i) a new $2 million capital infusion from the sponsor to further support the collateral property; (ii) a restructuring of the $51.0 million whole loan into a $32.0 million senior loan, with a $7.0 million unfunded commitment, and a $19.0 million mezzanine note. The restructured senior loan earns a fixed rate coupon rate of 5.75%, adjusted from a floating rate coupon of S+3.40%, has an exit fee that was increased from 1.25% to 5.75% of the loan amount, and was extended to July 9, 2027. The mezzanine note is non-interest bearing and is subject to a distribution waterfall and is subordinate to certain amounts of the sponsor’s equity, as defined in the loan agreement. As of September 30, 2024, the mezzanine note was deemed uncollectible, resulting in a write-off of $(19.0) million. The loan was performing pursuant to its modified contractual terms as of December 31, 2024.

During the twelve months ended December 31, 2024, the Company completed the modification of a first mortgage loan secured by a design building property located in New York, NY. As of December 31, 2024, and December 31, 2023, the loan had a principal balance of $34.3 million and $37.5 million, and an amortized cost of $32.8 million and $37.3 million, respectively. The terms of the modification included, among others, a restructuring of the $37.5 million loan at the time of the modification into (i) a $33.3 million senior loan, with $3.0 million in unfunded commitments, and (ii) a $4.2 million mezzanine note; a $2.6 million capital infusion from the sponsor to further support the collateral property; a change to the restructured senior loan’s coupon to S+3.00%, which was reduced from S+4.65%; an increase in the exit fee from 0.25% to 5.70% of the loan amount, and an extension of term to a maturity date of June 9, 2027. The mezzanine note was non-interest bearing and subject to a distribution waterfall and is subordinate to certain amounts of the sponsor’s equity, as defined in the loan agreement. As of June 30, 2024, the mezzanine note was deemed uncollectible, resulting in a write-off of $(4.2) million. The loan was performing pursuant to its modified contractual terms as of December 31, 2024.

Loan Risk Ratings

The Company’s primary credit quality indicators are its risk ratings. The Company evaluates the credit quality of each loan at least quarterly by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors. Risk factors that are considered in the assessment include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, collateral performance, loan structure and exit plan, origination loan-to-value, or LTV, project sponsorship and other factors deemed necessary. The Company evaluates these factors with respect to each loan investment on a case-by-case basis taking into consideration such loan’s facts and circumstances at the time. The risk factors may be given different weightings and consideration depending on each loan’s situation. Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined as follows:

1 –Lower Risk

2 –Average Risk

3 –Acceptable Risk

4 –Higher Risk: A loan that has exhibited material deterioration in cash flows and/or other credit factors, which, if negative trends continue, could be indicative of probability of principal loss.

5 –Loss Likely: A loan that has a significantly increased probability of principal loss.

The following table presents the number of loans, unpaid principal balance and carrying value by risk rating for loans held-for-investment as of December 31, 2024, and December 31, 2023:

As of December 31, 2024, the weighted average risk rating of the Company’s loan portfolio was 3.1, versus 2.8 as of December 31, 2023, weighted by unpaid principal balance. The change in portfolio risk rating as of December 31, 2024, versus December 31, 2023, is mainly a result of loan repayments on lower risk loans during the year ended December 31, 2024 and select loan risk rating downgrades, partially offset by certain rating upgrades.

As of December 31, 2024, the Company assigned a risk rating of “5” toseven senior loans with an aggregate outstanding principal balance of $453.3 million. During the year ended December 31, 2024, four of these loans were downgraded to a risk rating of “5”, includingtwo office loans, one hotel loan, andone multifamily loan. These loans were downgraded due to the borrowers’ unwillingness to make further capital commitments to support the collateral properties resulting from a variety of factors including the challenging office leasing environment, local market fundamentals, uncertain and volatile capital market conditions resulting in limited liquidity for real estate transactions, further pressure on property values and other factors related to property specific operating performance.

The following table presents the carrying value of loans held-for-investment as of December 31, 2024, and December 31, 2023, by risk rating and year of origination:

Note 4. Real Estate Owned, Net

On June 27, 2024, the Company acquired the legal title to an office property located in Maynard, MA pursuant to a negotiated deed-in-lieu of foreclosure. The property previously served as collateral for a first mortgage loan held-for-investment, which had been originated in May 2018. As of March 31, 2024, prior to acquisition, the loan had a risk rating of “4”, was on nonaccrual status, and was assessed individually as a collateral-dependent loan due to an anticipated foreclosure. At the time of acquisition, the loan had an amortized cost and carrying value of $35.7 million. The Company recognized the property as real estate owned with a carrying value of $35.7 million based on the estimated fair value of the collateral property at the time of acquisition. This acquisition was accounted for as an asset acquisition.

The Company allocated the fair value of the assumed assets and liabilities on the acquisition date as follows:

(1)Included in “Other assets” on the consolidated balance sheets.

(2)Included in “Other liabilities” on the consolidated balance sheets.

The weighted average initial depreciation period for the acquired tenant improvements during the year ended December 31, 2024, were 4.6 years. The weighted average initial amortization period for the acquired in-place lease intangibles, above-market lease intangibles and below-market lease intangibles acquired during the year ended December 31, 2024 were 4.6 years,2.7 years, and 5.5 years, respectively. The weighted average remaining depreciation period for the tenant improvements on the office property located in Maynard, MA as of December 31, 2024, were 4.5 years. The weighted average remaining amortization period for the in-place lease intangibles, above-market lease intangibles and below-market lease intangibles on the office property located in Maynard, MA as of December 31, 2024 were 4.4 years,2.4 years, and 5.0 years, respectively. The weighted average remaining amortization period for the lease commissions on the office property located in Maynard, MA as of December 31, 2024 were 5.4 years.

On May 16, 2023, the Company acquired the legal title to an office property located in Phoenix, AZ pursuant to a negotiated deed-in-lieu of foreclosure. The property previously served as collateral for a first mortgage loan held-for-investment, which had been originated in May 2017. As of March 31, 2023, prior to acquisition, the loan had a risk rating of “5”, was on nonaccrual status and was accounted for under cost-recovery. At the time of acquisition, the loan had an amortized cost and carrying value of $28.2 million and $24.0 million, respectively. The Company recognized the property as real estate owned with a carrying value of $24.0 million based on the estimated fair value of the property. This acquisition was accounted for as an asset acquisition under ASC 805.

The Company allocated the fair value of the assumed assets and liabilities on the acquisition date as follows:

(1)Included in “Other assets” on the consolidated balance sheets.

(2)Included in “Other liabilities” on the consolidated balance sheets.

The weighted average initial depreciation period for the acquired tenant improvements during the year ended December 31, 2023, were 1.5 years. The weighted average initial amortization period for the acquired in-place lease intangibles, above-market lease intangibles and below-market lease intangibles acquired during the year ended December 31, 2023, were 1.6 years,1.9 years, and 3.6 years, respectively. The weighted average remaining depreciation period for the tenant improvements on the office property located in Phoenix, AZ as of December 31, 2024 and 2023, were 3.0 years and 2.3 years, respectively. The weighted average remaining amortization period for the in-place lease intangibles, above-market lease intangibles and below-market lease intangibles on the office property located in Phoenix, AZ as of December 31, 2024, and 2023, were 3.3 years and 2.6 years,8.1 years and 5.9 years, and 3.8 years and 4.8 years, respectively. The weighted average remaining amortization period for the lease commissions on the office property located in Phoenix, AZ as of December 31, 2024 were 4.1 years. No lease commissions were outstanding on the office property located in Phoenix, AZ as of December 31, 2023.

The Company assumed certain legacy lease arrangements upon the acquisition of REO. These arrangements entitle the Company to receive contractual rent payments during the lease periods and tenant reimbursements for certain property operating expenses, including common area costs, insurance, utilities and real estate taxes.

The following table presents the identified intangible assets and liabilities related to REO as of December 31, 2024, and December 31, 2023:

The following table presents the REO operations and related income (loss) included in the Company’s consolidated statements of comprehensive (loss) income for the years ended December 31, 2024, and 2023:

(1) Includes $(6.3) million and $(3.4) million of depreciation and amortization for the years ended December 31, 2024, and 2023, respectively.

The following table presents the amortization of lease intangibles included in the Company’s consolidated statements of income for the years ended December 31, 2024, and 2023:

The following table presents the amortization of lease intangibles for each of the succeeding fiscal years:

Future Minimum Lease Payments

The following table presents the future minimum lease payments to be collected under non-cancelable operating leases, excluding tenant reimbursements of expenses, as of December 31, 2024:

The weighted average minimum remaining term of the non-cancelable leases was approximately 3.7 years as of December 31, 2024.

Note 5. Variable Interest Entities and Securitized Debt Obligations

CRE CLOs

The Company finances pools of its commercial real estate loans through CRE CLOs, which are considered VIEs for financial reporting purposes, and, thus, are reviewed for consolidation under the applicable consolidation guidance. The Company has both the power to direct the activities of the CRE CLOs that most significantly impact the entities’ performance and the obligation to absorb losses or the right to receive benefits of the entities that could be significant; therefore, the Company consolidates the CRE CLOs.

The following table presents a summary of the assets and liabilities of all VIEs consolidated on the Company’s consolidated balance sheets as of December 31, 2024, and December 31, 2023:

The securitized debt obligations issued by the CRE CLOs are recorded at outstanding principal, net of any unamortized deferred debt issuance costs, on the Company’s consolidated balance sheets.

The following table details the Company’s CRE CLO securitized debt obligations as of December 31, 2024, and December 31, 2023:

(1)Calculations of all-in yield on collateral assets at origination are based on a number of assumptions (some or all of which may not occur) and are expressed as monthly equivalent yields that include net origination fees and exit fees and exclude future fundings and any potential or completed loan amendments or modifications. Calculation of cost of funds is the weighted average coupon of the CRE CLO, exclusive of any CRE CLO issuance costs.

(2)$8.0 million restricted cash is included as of December 31, 2024. No restricted cash is included as of December 31, 2023. Yield on collateral assets is exclusive of restricted cash.

(3)No restricted cash is included as of December 31, 2024, and December 31, 2023. Yield on collateral assets is exclusive of restricted cash.

(4)$8.0 million restricted cash is included as of December 31, 2024. No restricted cash is included as of December 31, 2023. Yield on collateral assets is exclusive of restricted

Other Investment

During the year ended December 31, 2024, the Company made a $0.7 million non-controlling investment in a partnership that is the borrower onone loan that is held-for-investment by the Company. The Company may contribute up to an additional $2.1 million in the form of an investment in the partnership entity.

The partnership is considered a VIE and the Company’s investment and loan to the partnership are considered variable interests in the VIE. The Company is not the primary beneficiary of the VIE because it does not have the power to direct the activities of the entity that most significantly impact the entity’s performance as all decisions are directed by the unaffiliated general partner of the partnership. The unconsolidated investment is included in the Company's consolidated balance sheets within Other Assets.

Note 6. Secured Financing Agreements

To finance its loans held-for-investment, the Company has a variety of secured financing arrangements with several counterparties, including repurchase facilities and a secured credit facility. The Company’s repurchase facilities are typically collateralized by loans held-for-investment, loans held-for-sale, REO assets and certain cash balances. Although the transactions under the Company’s existing repurchase facilities represent committed borrowings until maturity of each facility, the facility lenders retain the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets due to collateral-specific credit events, or, with respect to a limited number of the Company’s repurchase facilities, capital market events, would require the Company to fund margin calls. The Company does not typically retain similar rights for the Company to make margin calls on its underlying borrowers as a result of a determination by the Company and/or its financing counterparty that there has been a decrease in the market value of the underlying pledged collateral.

The Company’s secured credit facility is typically collateralized by loans held-for-investment, loans held-for-sale, REO assets and certain cash balances and is not mark-to-market.

The following tables summarize details of the Company’s borrowings outstanding on its secured financing arrangements as of December 31, 2024, and December 31, 2023:

(1)The facilities are set to mature on the stated maturity date, unless extended pursuant to their terms.

(2)Unused capacity is not committed as of December 31, 2024, and December 31, 2023.

(3)During the year ended December 31, 2024, the Company repaid all outstanding borrowings under the facility and terminated the facility.

(4)As of December 31, 2023, the outstanding balance was collateralized by real estate owned, inclusive of $3.6 million in other assets and liabilities related to acquired leases, respectively, (see Note 4 -Real Estate Owned, Net, for further detail) andone senior loan. During the year ended December 31, 2024, the Company repaid all outstanding borrowings under the facility and terminated the facility.

The following table summarizes certain characteristics of the Company’s repurchase facilities and counterparty concentration at December 31, 2024, and December 31, 2023:

(1)Represents the excess of the carrying amount or market value of the loans held-for-investment pledged as collateral for repurchase facilities, including accrued interest plus any cash on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(2)During the year ended December 31, 2024, the Company repaid all outstanding borrowings under the facility and terminated the facility.

(3)During the year ended December 31, 2024, the Company repaid all outstanding borrowings under the facility and terminated the facility.

The Company does not anticipate any defaults by its financing counterparties, although there can be no assurance that one or more defaults will not occur.

Financial Covenants

The Company is subject to a variety of financial covenants under its secured financing arrangements. The following represent the most restrictive financial covenants to which the Company is subject across its secured financing arrangements:

•Unrestricted cash cannot be less than the greater of $30.0 million and 5.0% of recourse indebtedness. As of December 31, 2024, the Company’s unrestricted cash was $87.8 million, while 5.0% of the Company’s recourse indebtedness was $10.4 million.

•Tangible net worth must be greater than the sum of (i) $600.0 million and (ii)75.0% of net cash proceeds of the Company’s equity issuances after September 30, 2024. As the Company has not had any equity issuances after September 30, 2024, tangible net worth must be greater than $600.0 million. As of December 31, 2024, the Company’s tangible net worth was $820.1 million.

•Target asset leverage ratio cannot exceed 77.5% and total leverage ratio cannot exceed 80.0%. As of December 31, 2024, the Company’s target asset leverage ratio was 69.8% and the Company’s total leverage ratio was 64.6%.

•Minimum interest coverage of no less than 1.1:1.0 until and including December 31, 2024 (1.15:1.0 from January 1, 2025, through March 31, 2025; and 1.3:1.0 thereafter). As of December 31, 2024, the Company’s minimum interest coverage was 1.2:1.0.

As of December 31, 2024, and December 31, 2023, the Company was in compliance with its financial covenants.

Note 7. Convertible Senior Notes

In October 2018, the Company closed an underwritten public offering of $131.6 million aggregate principal amount of convertible senior notes due October 1, 2023. The convertible senior notes were unsecured, paid interest semiannually at a rate of 6.375% per annum and were convertible at the option of the holder into shares of the Company’s common stock. The Company redeemed for cash the convertible senior notes at maturity, andnone of the notes remained outstanding as of December 31, 2024, and December 31, 2023.

The following table details the interest expense related to the convertible notes for the years ended December 31, 2024, and 2023:

Note 8. Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash held in bank accounts and cash held in money market funds on an overnight basis.

The Company is required to maintain certain cash balances in restricted accounts as collateral for the Company’s repurchase facilities and with its lending counterparties to support investment activities. As of December 31, 2024, the Company held $18.7 million in restricted cash in connection with its non-CRE CLO financing activities, compared to $10.8 million and $1.4 million as of December 31, 2023, and 2022, respectively. From time to time, the Company may also hold restricted cash representing proceeds from principal repayments and paydowns of loans held in the CRE CLOs. As of December 31, 2024, the Company held $8.0 million in restricted cash related to the CRE CLOs, compared tonone and $5.6 million in restricted cash related to the CRE CLOs as of December 31, 2023 and 2022, respectively.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Company’s consolidated balance sheets as of December 31, 2024, 2023, and 2022, that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

Note 9. Fair Value

Fair Value Measurements

ASC 820, Fair Value Measurements, or ASC 820, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 clarifies that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., market-based or observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs) resulting in the use of management assumptions. Additionally, ASC 820 requires an entity to consider all aspects of non-performance risk, including the entity’s own credit standing, when measuring fair value of a liability.

ASC 820 establishes a three-level hierarchy to be used when measuring and disclosing fair value. An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. Following is a description of the three levels:

The following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of the valuation models, key inputs to those models and significant assumptions utilized.

Recurring Fair Value

As of December 31, 2024, and 2023, the carrying values and fair values of cash and cash equivalents and restricted cash are measured at fair value on a recurring basis. No other assets or liabilities held by the Company are measured at fair value on a recurring basis.

Nonrecurring Fair Value

The Company may be required to measure certain assets or liabilities at fair value from time to time. These periodic fair value measures typically result from establishing the allowance for credit losses for collateral-dependent assets under GAAP.

These items would constitute nonrecurring fair value measures. For collateral-dependent loans that are identified as impaired, the Company measures allowance for credit losses by comparing its estimation of the fair value of the underlying collateral, less costs to sell, to the carrying value of the respective loan. To estimate the fair value of the underlying collateral, the Company may (i) use certain valuation techniques which, among others, may include a discounted cash flow model, or (ii) obtain a third-party independent assessment of value such as an appraisal or other opinion of value. These valuations require significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed relevant.

As of December 31, 2024, the Company deemed seven of its loans held-for-investment with an aggregate outstanding principal balance of $453.3 million, compared toseven loans with an aggregate outstanding principal balance of $401.6 million as of December 31, 2023, to be collateral-dependent in accordance with its policy. Therefore, the allowance for credit losses associated with these loans was based on the estimates of the fair value of the loans’ underlying property collateral, less costs to sell, if applicable, and the loans are measured at fair value on a nonrecurring basis using significant unobservable inputs and would be classified as Level 3 assets in the fair value hierarchy. As of December 31, 2024, and 2023, five andseven loans, respectively, with an aggregate outstanding principal balance of $377.2 million and $401.6 million, respectively, were valued using a discounted cash flow model. The significant unobservable inputs used to estimate the fair value on these loans as of December 31, 2024, and 2023, include the exit capitalization rate, which ranged from 6.25% to 13.00%, and 6.00% to 13.00%, respectively, and the discount rate, which ranged from 7.75% to 14.00%, and 7.25% to 13.50%, respectively. As of December 31, 2024, the weighted average exit capitalization rate by unpaid principal balance and weighted average discount rate by unpaid principal balance was 8.97% and 10.57%, respectively.

As of December 31, 2024, one loan with an aggregate outstanding principal balance of $26.1 million was valued using the estimated proceeds from the sale of the underlying collateral property, less the estimated costs to sell.

As of December 31, 2024, one loan with an outstanding principal balance of $50.0 million was largely valued using the cash collateral received from the settlement of arbitration proceedings.

Refer to Note 2 -Basis of Presentation and Significant Accounting Policies and Note 3 -Loans Held-for-Investment, Net of Allowance for Credit Losses for further detail.

During the year ended December 31, 2024, the Company acquired legal title of an office property in Maynard, MA. The Company’s fair market value estimate at the time of conversion from loan held-for-investment to REO was $35.7 million and was determined primarily using the discounted cash flow model. The significant unobservable inputs used to estimate the fair value include the exit capitalization rate and discount rate, which ranged from 8.50% to 10.50%, and from 10.25% to 11.75%, respectively. During the year ended December 31, 2023, the Company acquired legal title of an office property in Phoenix, AZ. The Company’s fair market value estimate at the time of conversion from loan held-for-investment to REO was $24.0 million and was determined primarily using the discounted cash flow model. The significant unobservable inputs used to estimate the fair value include the exit capitalization rate and discount rate used to forecast the fair value of the underlying real estate collateral, which ranged from 6.75% to 7.25% and from 9.25% to 9.75%, respectively. Refer to Note 4 -Real Estate Owned, Net for further detail.

Fair Value of Financial Instruments

In accordance with ASC 820, the Company is required to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized in the consolidated balance sheets, for which fair value can be estimated.

The following describes the Company’s methods for estimating the fair value for financial instruments:

•Loans held-for-investment are carried at cost, net of any unamortized acquisition premiums or discounts, loan fees, origination costs and allowance for credit losses, as applicable. The Company estimates the fair value of its loans held-for-investment by assessing any changes in market interest rates, credit spreads for loans of comparable risk as corroborated by inquiry of other market participants, shifts in credit profiles and actual operating results, taking into consideration such factors as underlying property type, property competitive position within its market, market and submarket fundamentals, tenant mix, nature of business plan, sponsorship, extent of leverage and other loan terms. The Company categorizes the fair value measurement of these assets as Level 3.

•Cash and cash equivalents and restricted cash have a carrying value which approximates fair value because of the short maturities of these instruments. The Company categorizes the fair value measurement of these assets as Level 1.

•The carrying value of underlying loans in repurchase and secured credit facilities that mature in less than one year generally approximates fair value due to the short maturities. The Company’s long-term repurchase and secured credit facilities have, and the Company’s asset-specific facility had, floating rates based on an index plus a credit spread and the credit spread is typically consistent with those demanded in the market. Accordingly, the interest rates on these borrowings are at market and, thus, carrying value approximates fair value. The Company categorizes the fair value measurement of these liabilities as Level 2.

•Securitized debt obligations are recorded at outstanding principal, net of any unamortized deferred debt issuance costs. In determining the fair value of its securitized debt obligations, management’s judgment may be used to arrive at fair value that considers prices obtained from third-party pricing providers, broker quotes received and other applicable market data. If observable market prices are not available or insufficient to determine fair value due principally to illiquidity in the marketplace, then fair value is based upon internally developed models that are primarily based on observable market-based inputs but also include unobservable market data inputs (including prepayment speeds, delinquency levels and credit losses). The Company categorizes the fair value measurement of these liabilities as Level 2.

The following table presents the carrying values and estimated fair values of assets and liabilities that are required to be recorded or disclosed at fair value at December 31, 2024, and December 31, 2023:

Note 10. Commitments and Contingencies

The following represent the material commitments and contingencies of the Company as of December 31, 2024:

Legal and Regulatory

From time to time, the Company may be subject to liability under laws and government regulations and various claims and legal actions arising in the ordinary course of business. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. Based on information currently available, management is not aware of any legal or regulatory claims that would have a material effect on the Company’s consolidated financial statements and, therefore, no accrual is required as of December 31, 2024.

Unfunded Commitments on Loans Held-for-Investment

Certain of the Company’s commercial real estate loan agreements contain provisions and obligations to its borrowers through its unfunded loan commitments over the contractual period of its loans. As of December 31, 2024, and December 31, 2023, the Company had unfunded loan commitments of $90.6 million and $160.7 million, respectively, on loans held-for-investment, which it expects to fund, subject to the satisfaction of any conditions precedent to such commitments, over the tenure of these loans. These commitments generally provide funding for lease-related or capital improvement expenditures, as well as interest and carry costs, all of which will vary depending on the progress of capital improvement projects, leasing and cash flows at the properties that serve as collateral for the Company’s loans. Therefore, the exact timing and amounts of such loan balance future fundings are generally uncertain and will depend on the current and future performance of the collateral properties. The Company typically finances the funding of its loan commitments on terms generally consistent with its overall financing facilities; however, most of its financing facility counterparties are not obligated to fund their ratable portion of these loan commitments over time and have varying degrees of discretion over future loan funding obligations, including the advance rates on their fundings. The Company may be obligated to fund loan commitments with respect to a financed asset even if the applicable financing counterparty will not fund their ratable portion of the loan commitment and/or has made margin calls with respect to such financed asset.

As of December 31, 2024, the Company recognized $1.3 million in other liabilities related to the allowance for credit losses on unfunded loan commitments. See Note 3 -Loans Held-for-Investment, Net of Allowance for Credit Losses, for further detail.

Note 11. Preferred Stock

Temporary Equity

The Company issued 10% cumulative redeemable preferred stock on June 28, 2017. The holder of the 10% cumulative redeemable preferred stock was entitled to receive, when, as and if authorized and declared by the Company’s board of directors, cumulative cash dividends at the rate of 10% per annum. The Company redeemed the 10% cumulative redeemable preferred stock on June 30, 2023, at a redemption price of $1,000 per share.

During the years ended December 31, 2023, and 2022, the Company declared dividends to the 10% cumulative redeemable preferred stockholder of $49,444 and $100,000, respectively. No dividends were declared during the year ended December 31, 2024.

Issuance of Series A Preferred Stock

On November 30, 2021, and December 10, 2021, the Company received total net proceeds of $110.5 million from the issuance of 4,596,500 shares of Series A Preferred Stock after deducting the underwriting discount of $3.6 million and issuance costs of $0.8 million.

On January 18, 2022, and February 8, 2022, the Company received total net proceeds of $87.5 million from the issuance of 3,633,000 additional shares of Series A Preferred Stock after deducting the underwriting discount of $2.9 million and issuance costs of $0.4 million. The Series A Preferred Stock is currently listed on the NYSE under the symbol “GPMT PrA”.

On and after November 30, 2026, the Company, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash, at a redemption price of $25.00 per share, plus any accrued and unpaid dividends thereon to, but excluding, the date fixed for redemption.

Upon the occurrence of a Change of Control event (as defined in the Articles Supplementary designating the Series A Preferred Stock, or the Articles Supplementary), the Company may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series A Preferred Stock, in whole or in part, within 120 days on or after the first date on which such Change of Control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends thereon to, but excluding, the redemption date, without interest.

Holders of Series A Preferred Stock do not have any voting rights except in limited circumstances as set forth in the Articles Supplementary.

Holders of the Series A Preferred Stock are entitled to receive, when, as and if authorized and declared by the Company’s board of directors, cumulative cash dividends at a fixed rate of 7.00% per annum to, but excluding, January 15, 2027, and thereafter at a floating rate equal to the 3-month Term SOFR plus a spread of 5.83% per annum; provided, however, in no event will the floating rate be lower than 7.00% per annum. During each of the years ended December 31, 2024, 2023, and 2022, the Company declared dividends on the Series A Preferred Stock of $14.4 million.

Issuance of Sub-REIT Preferred Stock

In January 2021, a subsidiary of the Company issued 625 shares of preferred stock of which 500 shares were retained by the Company and 125 shares were sold to third-party investors for proceeds of $0.1 million. The 500 shares of preferred stock retained by the Company are eliminated in the Company’s consolidated statements of changes in equity and the 125 shares sold to third-party investors are shown in the Company’s consolidated statements of changes in equity as non-controlling interests.

Note 12. Stockholders’ Equity

Common Stock

Distributions to Stockholders

The following table presents cash dividends declared by the Company’s board of directors on its common stock during the years ended December 31, 2024, 2023, and 2022:

Share Repurchases

On September 20, 2024, the Company announced that its board of directors had amended its share repurchase program to authorize the repurchase of an additional 3,000,000 shares of the Company’s common stock, for a total cumulative share repurchase authorization of 12,000,000 shares of common stock, inclusive of amounts previously authorized. The Company’s share repurchase program has no expiration date. The shares are expected to be repurchased from time to time through privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act, or by any combination of such methods. The manner, price, number and timing of share repurchases will be subject to a variety of factors, including market conditions and applicable SEC rules. During the years ended December 31, 2024, 2023, and 2022, under its share repurchase plan, the Company repurchased 2,392,671,2,001,338 and 1,539,134 shares of its common stock, respectively, for an aggregate cost, inclusive of commissions paid, of $7.6 million, $10.3 million and $15.7 million, respectively. As of December 31, 2024, there remained 4,765,245 shares authorized for repurchase under the Company’s share repurchase program.

The Company’s board of directors has also authorized the repurchase of shares of restricted stock granted to employees for tax withholding purposes. No shares of restricted stock were repurchased from employees during the year ended December 31, 2024. During the years ended December 31, 2023, and 2022, the Company repurchased from employees 36,916 and 69,039 shares of its restricted stock, respectively, for an aggregate cost of $0.2 million and $0.8 million, respectively.

Preferred Stock

Distributions to Stockholders

The following table presents cash dividends declared by the Company’s board of directors on its Series A Preferred Stock during the years ended December 31, 2024, 2023, and 2022:

Note 13. Equity Incentive Plans

On June 2, 2022, the Company’s stockholders approved the adoption of the Granite Point Mortgage Trust Inc. 2022 Omnibus Incentive Plan, or the 2022 Plan. With the adoption of the 2022 Plan, no new equity awards may be granted under the Granite Point Mortgage Trust Inc. 2017 Equity Incentive Plan, or the 2017 Plan, but previously granted restricted stock units, or RSUs, and performance share units, or PSUs, remain outstanding under the 2017 Plan. The 2022 Plan permits the granting of stock options, stock appreciation rights, restricted stock, RSUs, PSUs, dividend equivalent rights, other stock-based awards and other cash-based awards to employees, certain consultants of the Company and members of the board of directors. As of December 31, 2024, the Company had 6,660,615 shares of common stock available for future issuance under the 2022 Plan.

The following table summarizes the grants, vesting and forfeitures of restricted stock, RSUs and PSUs for the years ended December 31, 2024, 2023, and 2022:

Below is a summary of RSU and PSU vesting dates as of December 31, 2024:

(1)The PSUs’ vesting date is based on the performance criteria determination date and not the performance criteria service end date. The determination date will occur in the first quarter of the following year after the performance criteria service date has passed. The table above reflects the year of the determination date.

For the year ended December 31, 2023, the Company recognized the remaining $47.5 thousand of compensation expense associated with awards of restricted stock within compensation and benefits expense on the consolidated statements of income. As of December 31, 2024, all awards of restricted stock had vested.

The Company’s RSUs are subject to time-based vesting schedules. For the year ended December 31, 2024, the Company recognized $6.3 million of compensation expense associated with these awards, compared to $6.7 million and $5.9 million for the years ended December 31, 2023, and 2022, respectively, within compensation and benefits expense on the consolidated statements of income. As of December 31, 2024, $7.4 million of total unrecognized compensation cost for awards of RSUs will be recognized over the grants’ remaining weighted average vesting period of 2.0 years.

The number of PSUs that vest depends on the Company’s performance over athree-year period with respect to metrics set in the applicable award agreements. Between 0% and 200% of the target number of units granted in 2022 may vest at the end of the performance period based (i)50% against the predetermined internal Company performance goal for “core” return on average equity, or “core” ROAE and (ii)50% against the Company’s performance ranking for “core” ROAE among a peer group of commercial mortgage REIT companies. Between 0% and 200% of the target number of units granted in early 2023 and 2024 may vest at the end of their respective performance periods based (i)25% against the predetermined internal Company performance goal “run-rate” ROAE, (ii)25% against the Company’s performance ranking for “run-rate” ROAE among a peer group of commercial mortgage REIT companies, (iii)25% against the predetermined internal Company performance goal for change in book value per share, and (iv)25% against the Company’s performance ranking for change in book value per share among a peer group of commercial mortgage REIT companies. The commercial mortgage REIT peer group used to measure relative “core” ROAE, “run-rate” ROAE and change in book value per share includes publicly traded commercial mortgage REITs, which the Company believes derive the majority of their revenues from commercial real estate balance sheet lending activities and meet certain market capitalization criteria.

For the year ended December 31, 2024, the Company recognized $0.2 million, of compensation expense associated with these awards, respectively, compared to $0.2 million and $0.5 million for the years ended December 31, 2023, and 2022, respectively, within compensation and benefits expenses on the consolidated statements of income. As of December 31, 2024, $2.7 million of total unrecognized compensation cost for awards of PSUs will be recognized over the grants’ remaining weighted average vesting period of 1.8 years.

Note 14. Income Taxes

The Company’s taxable income before dividend distributions differs from its pre-tax net income for GAAP purposes primarily due to differences in timing between GAAP and tax accounting related to restructuring charges, provision for credit losses and amendments to loans treated as “significant modifications” for tax under applicable Treasury regulations. These book to tax differences in the REIT are not reflected in the consolidated financial statements as the Company assumes it will retain its REIT status.

The following is a reconciliation of the statutory federal and state rates to the effective rates, for the years ended December 31, 2024, 2023, and 2022:

The Company’s permanent differences in taxable income from GAAP net loss attributable to common stockholders in the years ended December 31, 2024, 2023, and 2022, were primarily due to recurring differences in compensation expense.

Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements of a contingent tax liability for uncertain tax positions. Additionally, there were no amounts accrued for penalties or interest as of, or during, the periods presented in these

Note 15. Earnings (Loss) Per Share

The following table presents a reconciliation of the earnings and shares used in calculating basic and diluted earnings per share for the years ended December 31, 2024, 2023, and 2022:

For the year ended December 31, 2022, excluded from the calculation of diluted earnings per share is the effect of adding back $17.5 million of interest expense related to the Company’s convertible senior notes. For the year ended December 31, 2022,13,431,000 of weighted average common share equivalents related to the assumed conversion of the Company’s convertible senior notes were also excluded from the calculation of diluted earnings per share, as their inclusion would be antidilutive. As of December 31, 2023, the convertible notes have been redeemed and no notes remain outstanding.

Diluted earnings per share is calculated under both the two-class method and treasury stock method, and the more dilutive amount is reported. The computation of diluted earnings per share is also based on the incremental shares that would be outstanding assuming the settlement of RSUs. During the years ended December 31, 2024, 2023, and 2022,725,922,496,317 and 393,610 of weighted-average unvested RSUs, respectively, were excluded from the dilutive earnings per share denominator, as their inclusion would be antidilutive. For the year ended December 31, 2024, under both the two-class method and the treasury stock method no shares were included in the dilutive earnings per share denominator, as their inclusion would be antidilutive.

Diluted earnings per share is calculated under both the two-class method and treasury stock method, and the more dilutive amount is reported. The computation of diluted earnings per share is also based on the incremental shares that would be outstanding assuming the settlement of PSUs. For the years ended December 31, 2024, 2023, and 2022, under both the two-class method and treasury stock method no additional weighted-average unvested PSUs were included in the dilutive earnings per share denominator, as their inclusion would be antidilutive. As of December 31, 2024, 2023, and 2022, there were no incremental shares of unvested PSUs.

Note 16. Segment Reporting

The Company generally derives its revenues from directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments, which largely includes interest income, net of premium amortization and discount accretion, from its investment portfolio of mortgage loans held-for-investment. The Company’s investment portfolio is subject to market risks, primarily credit risk and changes in interest rates. The Company mitigates these risks by seeking to originate or acquire assets of higher quality at appropriate rates of return given anticipated and unanticipated losses, by employing a comprehensive review and selection process and by proactively monitoring its investment portfolio.

The Company’s investment portfolio is managed as a whole and resources are allocated and financial performance is assessed by the Company’s Chief Executive Officer, its chief operating decision maker, or the CODM, based on total assets reported on the consolidated balance sheet and net (loss) income reported on the consolidated statement of comprehensive (loss) income. The Company’s CODM views consolidated expense information related to interest expense, provision for credit losses, compensation and benefits expense, servicing expense and other operating expenses to be significant. Consolidated comprehensive (loss) income is also used by the CODM to monitor actual results and benchmarking to that of its peers. Investment decisions are assessed collectively by the CODM, based on the inputs discussed above. Accordingly, the Company consists of a single operating and reportable segment and the consolidated financial statements and notes thereto are presented as a single reportable segment.

Note 17. Subsequent Events

Events subsequent to December 31, 2024, were evaluated through the date these consolidated financial statements were issued and no other additional events were identified requiring further disclosure in these consolidated financial statements other than the events described below.

During January 2025, the Company took as REO an office in Miami Beach, FL, in satisfaction of a loan and related receivables with a carrying value of $71.0 million, inclusive of an allowance for credit losses of $(7.9) million, as of December 31, 2024. The loan had been on nonaccrual status and carried a risk rating of “5.” The Company expects to recognize the REO with a cost basis of $71.0 million, which represents its fair value less estimated cost to sell, derecognize the loan and related receivables, and recognize approximately $(7.9) million as a write-off to the allowance for credit losses.

During February 2025, the Company resolved a senior loan with a $26.1 million unpaid principal balance secured by an office property located in Boston, MA. The loan and related receivables had a carrying value of $9.6 million, inclusive of an allowance for credit losses of $(16.6) million as of December 31, 2024. The loan had been considered collateral-dependent, had a risk rating of “5” and had previously been placed on nonaccrual status. In connection with the resolution, which involved a short sale of the collateral property to a third-party and a discounted loan payoff, the Company expects to recognize approximately $(16.6) million as a write-off to the allowance for credit losses.