On August 6, 2024, we entered into a construction loan agreement (the “Construction Loan”) to lend up to $52.1 million to a developer (the “Borrower”). The construction loan will accrue interest monthly at a fixed market rate of 9.00% per annum. The construction loan shall be re-paid in full on or before August 31, 2027, the maturity date. Upon completion of the development, we had the option to purchase at fair value all of the issued and outstanding membership interest from the Borrower in a special purpose entity (“SPE”) which solely holds the developed property. We hold a variable interest in the SPE, but we do not consolidate the SPE as we are not the primary beneficiary due to the lack of power to direct significant activities performed by the SPE. The fair value of this real estate loan receivable was approximately $35.6 million as of March 31, 2026.

On April 1, 2025, the Borrower repaid $15.0 million of the construction loan outstanding upon substantial completion of the development and receipt of the lump sum reimbursement from the government. On April 15, 2025, we declined the option to purchase, at the stated price, all of the issued and outstanding membership interest from the Borrower.

On March 5, 2026, we entered into a mezzanine construction loan agreement (the “Mezzanine Construction Loan”) to lend $7.0 million to a developer (the “Mezzanine Borrower”). The mezzanine construction loan will accrue interest monthly at a fixed market rate of 12.00% per annum. The mezzanine construction loan shall be re-paid in full on or before March 5, 2030, the maturity date, however, the Mezzanine Borrower has the option to extend the maturity date by an additional twelve months through March 5, 2031. We hold a variable interest in the Mezzanine Borrower entity, but we do not consolidate the entity as we are not the primary beneficiary due to the lack of power to direct significant activities performed by the Mezzanine Borrower. The fair value of this real estate loan receivable was approximately $7.8 million as of March 31, 2026.

A summary of our real estate loans receivable consisted of the following (dollars in thousands):


	March 31, 2026			December 31, 2025
Real estate loans receivable	$	45,729		$	35,357
Allowance for credit losses		(1,267	)		(1,071	)
Real estate loans receivable, net	$	44,462		$	34,286

The table below sets forth the activity for our allowance for credit losses for the three months ended March 31, 2026 and 2025 (dollars in thousands):


	Real Estate Loans Receivable (1)			Real Estate Loan Unfunded Commitments (2)
Balance as of December 31, 2024	$	1,436		$	92
Provision for (recovery of) credit losses		(171	)		(67	)
Balance as of March 31, 2025	$	1,265		$	25

Balance as of December 31, 2025	$	1,071		$	11
Provision for (recovery of) credit losses		196			—
Balance as of March 31, 2026	$	1,267		$	11

(1)

As of March 31, 2026, both our Construction Loan and Mezzanine Construction Loan are included within the non-investment grade category as both entities lack credit agency ratings. We used a non-investment grade credit spread to the applicable U.S. treasury rate to determine a probability of default. As of March 31, 2026, there are no payments that are considered past due nor any on nonaccrual status.

(2)

Allowance for credit loss liability is included within Accounts payable, accrued expenses and other liabilities on our Consolidated Balance Sheets.

During the three months ended March 31, 2026 and 2025, we recognized interest income from our real estate loans receivable of $0.9 million and $0.9 million, respectively. Interest income from our real estate loans receivable is included within Other income on our Consolidated Statements of Operations.