BLACKSTONE MORTGAGE TRUST, INC. (BXMT) FY 2024 MD&A

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. In addition to historical data, this discussion and analysis contains forward looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results or outcomes may differ materially from those in this discussion and analysis as a result of various factors, including but not limited to those discussed in Part, 1. Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

Introduction

Blackstone Mortgage Trust is a real estate finance company that originates, acquires, and manages senior loans and other debt or credit-oriented investments collateralized by or relating to commercial real estate in North America, Europe, and Australia. Our portfolio is composed primarily of senior loans secured by high-quality, institutional assets located in major markets, and sponsored by experienced, well-capitalized real estate investment owners and operators. We finance our investments in a variety of ways, including borrowing under our credit facilities, issuing collateralized loan obligations, or CLOs, or single-asset securitizations, asset-specific financings, syndicating senior loan participations, and corporate financing, depending on our view of the most prudent financing option available for each of our investments. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.”

We benefit from the deep knowledge, experience and information advantages of our Manager, which is a part of Blackstone’s real estate platform. Blackstone’s real estate group is the largest owner of commercial real estate globally with over 12,500 commercial assets and a proven track record of successfully navigating market cycles and emerging stronger through periods of volatility. The market-leading real estate expertise derived from the strength of the Blackstone platform deeply informs our credit and underwriting process, and we believe gives us the tools to expertly manage the assets in our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

2024 Highlights

Operating results:

•GAAP net loss of $204.1 million, or $1.17 per share, Distributable Earnings were a loss of $5.5 million, or $0.03 per share, and Distributable Earnings prior to charge-offs was $372.8 million, or $2.15 per share, with dividends declared of $377.8 million, or $2.18 per share.

•Book value per share of $21.87 as of December 31, 2024, which is net of cumulative CECL reserves of $4.31 per share.

Loan portfolio:

•Loan originations or acquisitions of $431.9 million.

•Portfolio of 130 loans as of December 31, 2024, with a weighted-average origination loan-to-value ratio of 62.6% and weighted-average all-in yield of + 3.76%, excluding impaired, cost-recovery, and non-accrual loans.

•During the year we realized $5.2 billion of loan repayments and sales, including $2.0 billion of office loans.

•93% of loans, based on net loan exposure, are performing as of December 31, 2024.

•Resolved $1.6 billion of impaired loans across 16 transactions during the year. Generated $34.5 million of incremental book value as aggregate charge-offs of CECL reserves outperformed reserve levels.

Capital markets, financing, and liquidity:

•Maintained substantial liquidity throughout the year, with liquidity of $1.5 billion as of December 31, 2024.

•Debt-to-equity ratio of 3.5x as of December 31, 2024, down from 3.7x as of December 31, 2023.

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•Borrowed an additional $650.0 million under our senior term loan facilities with an interest rate of SOFR plus 3.75% and maturity in 2028, and issued $450.0 million aggregate principal amount of senior secured notes due 2029, repaying $1.0 billion of term loans with a 2026 maturity.

•Repurchased $66.9 million of aggregate corporate debt principal at a discount, generating total gain of $5.4 million, and $29.2 million of common stock, generating $0.07 of incremental book value accretion per share.

I. Key Financial Measures and Indicators

As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, Distributable Earnings prior to charge-offs, and book value per share. For the three months ended December 31, 2024, we recorded basic net earnings per share of $0.21, declared a dividend of $0.47 per share, reported $(1.25) per share of Distributable Earnings, and reported $0.44 per share of Distributable Earnings prior to charge-offs. In addition, our book value as of December 31, 2024 was $21.87 per share, which is net of cumulative CECL reserves of $4.31 per share.

As further described below, Distributable Earnings and Distributable Earnings prior to charge-offs are measures that are not prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. Distributable Earnings and Distributable Earnings prior to charge-offs helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. In addition, Distributable Earnings and Distributable Earnings prior to charge-offs are performance metrics we consider when declaring our dividends.

Earnings Per Share and Dividends Declared

The following table sets forth the calculation of basic net income (loss) per share and dividends declared per share ($ in thousands, except per share data):

(1)Represents net income (loss) attributable to Blackstone Mortgage Trust. Refer to Note 15 to our consolidated financial statements for the calculation of diluted net (loss) income per share.

Distributable Earnings and Distributable Earnings Prior to Charge-Offs

Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves are non-GAAP measures. We define Distributable Earnings as GAAP net income (loss), including realized gains and losses not otherwise recognized in current period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) unrealized gains (losses), and (iv) certain non-cash items. Distributable Earnings may also be adjusted from time to time to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as determined by our Manager, subject to approval by a majority of our independent directors. Distributable Earnings mirrors the terms of our management agreement between our Manager and us, or our Management Agreement, for purposes of calculating our incentive fee expense. Therefore, Distributable Earnings prior to charge-offs of CECL reserves is calculated net of the incentive fee expense that would have been recognized if such charge-offs had not occurred.

Our CECL reserves have been excluded from Distributable Earnings consistent with other unrealized gains (losses) pursuant to our existing policy for reporting Distributable Earnings. We expect to only recognize such potential credit losses in Distributable Earnings if and when such amounts are realized and deemed non-recoverable upon a realization event. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but realization and non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. The timing of any such credit loss realization in our Distributable Earnings may differ materially from the timing of CECL reserves or charge-offs in our consolidated financial statements prepared in accordance with GAAP. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received, or

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expected to be received, and the book value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan.

We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP. We believe Distributable Earnings is a useful financial metric for existing and potential future holders of our class A common stock as historically, over time, Distributable Earnings has been a strong indicator of our dividends per share. As a REIT, we generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments, and therefore we believe our dividends are one of the principal reasons stockholders may invest in our class A common stock. Refer to Note 17 to our consolidated financial statements for further discussion of our distribution requirements as a REIT. Further, Distributable Earnings helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations, and is a performance metric we consider when declaring our dividends.

Furthermore, we believe it is useful to present Distributable Earnings prior to charge-offs of CECL reserves to reflect our direct operating results and help existing and potential future holders of our class A common stock assess the performance of our business excluding such charge-offs. We utilize Distributable Earnings prior to charge-offs of CECL reserves as an additional performance metric to consider when declaring our dividends. Distributable Earnings mirrors the terms of our Management Agreement for purposes of calculating our incentive fee expense. Therefore, Distributable Earnings prior to charge-offs of CECL reserves is calculated net of the incentive fee expense that would have been recognized if such charge-offs had not occurred.

Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves do not represent net income (loss) or cash generated from operating activities and should not be considered as alternatives to GAAP net income (loss), or indicators of our GAAP cash flows from operations, measures of our liquidity, or indicators of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves may not be comparable to similar metrics reported by other companies.

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The following table provides a reconciliation of Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves to GAAP net income (loss) ($ in thousands, except per share data):

(1)Represents net income (loss) attributable to Blackstone Mortgage Trust.

(2)Represents realized losses related to loan principal amounts deemed non-recoverable.

(3)Represents realized losses on the repatriation of unhedged foreign currency. These amounts were not included in GAAP net income (loss), but rather as a component of other comprehensive income in our consolidated financial statements.

(4)Represents the non-cash portion of income recognized related to our Agency Multifamily Lending Partnership, in which we receive a portion of origination, servicing, and other fees for loans we refer to MTRCC for origination, offset by the related guarantee liability accruals. Refer to Note 2 to our consolidated financial statements for additional information on our Agency Multifamily Lending Partnership.

(5)Represents a contingent liability related to a sale of a loan.

(6)Represents the implied incentive fee expense that would have been incurred if such charge-offs had not occurred, as calculated on a quarterly basis. No incentive fee expense would have been incurred for the nine months ended December 31, 2024 and the $6.3 million would have been incurred in the three months ended March 31, 2024.

(7)The weighted-average shares outstanding, basic, exclude shares issuable from a potential conversion of our Convertible Notes then outstanding. Consistent with the treatment of other unrealized adjustments to Distributable Earnings, these potentially issuable shares are excluded until a conversion occurs. Refer to Note 15 to our consolidated financial statements for the calculation of diluted net income per share.

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Book Value Per Share

The following table calculates our book value per share ($ in thousands, except per share data):

(1)The book value per share excludes shares issuable from a potential conversion of our Convertible Notes then outstanding. Refer to Note 15 to our consolidated financial statements for the calculation of diluted net income per share.

II. Loan Portfolio

During the year ended December 31, 2024, we originated or acquired $431.9 million of loans. Loan fundings during the year totaled $1.6 billion and loan repayments and sales totaled $5.2 billion. We generated interest income of $1.8 billion and incurred interest expense of $1.3 billion during the year, which resulted in $479.1 million of net interest income during the year ended December 31, 2024.

Portfolio Overview

The following table details our loan origination activity ($ in thousands):

(1)Includes new loan originations and acquisitions, and additional commitments made under existing loans.

(2)Loan fundings during the three months ended and year ended December 31, 2024, include $47.2 million and $181.3 million, respectively, of additional fundings under related non-consolidated senior interests.

(3)Loan repayments and sales during the year ended December 31, 2024, include $512.1 million of additional repayments or reduction of loan exposure under related non-consolidated senior interests. There were no such related loan repayments during the three months ended December 31, 2024.

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The following table details overall statistics for our loan portfolio as of December 31, 2024 ($ in thousands):

(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of December 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $19.2 billion that are included in our consolidated financial statements, (ii) $817.5 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.1 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. We have retained an aggregate $228.1 million of subordinate mezzanine loans, as of December 31, 2024, related to non-consolidated senior interests that are included in our balance sheet portfolio.

(2)Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date. Excludes $208.7 million of unfunded loan commitments related to our non-consolidated senior interests, as these commitments will not require cash outlays from us.

(3)The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, and other indices as applicable to each investment. As of December 31, 2024, substantially all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.

(4)Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any. As of December 31, 2024, 10% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 90% were open to repayment by the borrower without penalty.

(5)Based on LTV as of the dates loans were originated or acquired by us, excluding any loans that are impaired and any junior participations sold.

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The following table details the index rate floors for our loan portfolio based on total loan exposure as of December 31, 2024 ($ in thousands):

(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of December 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $19.2 billion that are included in our consolidated financial statements, (ii) $817.5 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.1 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.

(2)Includes Euro, British Pound Sterling, Swedish Krona, Australian Dollar, and Swiss Franc currencies.

(3)Includes all impaired loans.

(4)As of December 31, 2024, the weighted-average index rate floor of our total loan exposure was 1.04%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.65%. As of December 31, 2023, the weighted-average index rate floor of our total loan exposure was 0.56%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.02%.

The following table details the floating benchmark rates for our loan portfolio based on total loan exposure as of December 31, 2024 (total loan exposure amounts in thousands):

(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of December 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $19.2 billion that are included in our consolidated financial statements, (ii) $817.5 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.1 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.

(2)We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar. We earn forward points on our forward contracts that reflect the interest rate differentials between the applicable base rate for our foreign currency investments and prevailing U.S. interest rates. These forward contracts effectively convert the foreign currency rate exposure for such investments to USD-equivalent interest rates.

(3)In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.

(4)Includes floating rate loans indexed to STIBOR, BBSY, and SARON indices.

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The charts below detail the geographic distribution and types of properties securing our loan portfolio, as of December 31, 2024:

Geographic Diversification

(Net Loan Exposure)(1)

Collateral Diversification

(Net Loan Exposure)(1)(2)

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(1)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2024, which is our total loan exposure net of (i) $817.5 million of non-consolidated senior interests, (ii) $1.2 billion of asset-specific debt, (iii) $106.7 million of cost-recovery proceeds, and (iv) our total loans receivable CECL reserve of $733.9 million. Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans. Geographic locations that represent less than 1% of net loan exposure are excluded from the chart.

(2)Assets with multiple components are proportioned into the relevant collateral types based on the allocated value of each collateral type.

Refer to section VI of this Item 2 for details of our loan portfolio, on a loan-by-loan basis.

Portfolio Management

As of December 31, 2024, 93% of our loans were performing with risk ratings of “1” through “4,” and the remaining 7% were impaired with a risk rating of “5.” Of the performing loans, 99.2%, based on net loan exposure, were in compliance with the applicable contractual terms. We believe this demonstrates the overall strength of our loan portfolio and the commitment and financial wherewithal of our borrowers generally, which are primarily affiliated with large real estate private equity funds and other strong, well-capitalized, and experienced sponsors.

We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors. While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain investments. As of December 31, 2024, we had an aggregate $580.7 million asset-specific CECL reserve related to

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13 of our loans receivable, with an aggregate amortized cost basis of $1.8 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of December 31, 2024.

Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information advantages derived from our position as part of Blackstone’s real estate platform. Blackstone’s real estate group is the largest owner of commercial real estate globally with over 12,500 commercial assets and a proven track record of successfully navigating market cycles and emerging stronger through periods of volatility. The market-leading real estate expertise derived from the strength of the Blackstone platform deeply informs our credit and underwriting process, and gives us the tools to expertly asset manage our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.

As discussed in Note 2 to our consolidated financial statements, we perform a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5”, from less risk to greater risk. Our loan portfolio had a weighted-average risk rating of 3.0 as of both December 31, 2024 and December 31, 2023, respectively.

The following table allocates the net book value, total loan exposure, and net loan exposure balances based on our internal risk ratings ($ in thousands):

(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of December 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $19.2 billion that are included in our consolidated financial statements, (ii) $817.5 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.1 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.

(2)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2024, which is our total loan exposure net of (i) $817.5 million of non-consolidated senior interests, (ii) $1.2 billion of asset-specific debt, (iii) $106.7 million of cost-recovery proceeds, and (iv) our total loans receivable CECL reserve of $733.9 million. Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.

Current Expected Credit Loss Reserve

The CECL reserves required by GAAP reflect our current estimate of potential credit losses related to our loans and notes receivable included in our consolidated balance sheets. Other than a few narrow exceptions, GAAP requires that all financial instruments subject to the CECL model have some amount of loss reserve to reflect the principle underlying the CECL model that all loans and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors. During the year ended December 31, 2024, we recorded a net increase of $157.0 million in the CECL reserves against our loans receivable portfolio, due to a $541.6 million increase in CECL reserves, offset by charge-offs of our CECL reserves of $384.6 million, bringing our total loans receivable CECL reserve to $733.9 million as of December 31, 2024. The $384.6 million of charge-offs primarily related to the 13 previously impaired loans that were resolved during the year ended December 31, 2024.

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The $541.6 million increase in CECL reserves primarily relates to six additional loans that were impaired but not resolved during the year ended December 31, 2024, all of which were secured by office buildings. The office sector is generally facing reduced tenant and capital markets demand in recent years. These impairments are each determined individually as a result of changes in the specific credit quality factors for such loans. These factors included, among others, (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan. In addition, our general CECL reserves decreased primarily as a result of net loan repayments reducing the size of our portfolio during the year ended December 31, 2024.

During the three months ended December 31, 2024, we recorded a net decrease of $302.9 million in the asset-specific CECL reserve related to our impaired loans. The decrease was primarily driven by the resolution of eight impaired loans during the quarter, resulting in charge-offs of CECL reserves of $294.1 million. This was offset by one additional loan that was impaired during the three months ended December 31, 2024. As of December 31, 2024, the income accrual was suspended on this loan as the recovery of income and principal was doubtful. During the three months ended December 31, 2024, we recorded $3.0 million of interest income on this loan.

As of December 31, 2024, we had an aggregate $580.7 million asset-specific CECL reserve related to 13 of our loans receivable, with an aggregate amortized cost basis of $1.8 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of December 31, 2024. No income was recorded on our impaired loans subsequent to determining that they were impaired. During the year ended December 31, 2024, we received an aggregate $88.0 million of cash proceeds from such loans that were applied as a reduction to the amortized cost basis of each respective loan.

As of December 31, 2024, one of our performing loans with an amortized cost basis of $195.0 million, inclusive of a $50.0 million junior loan participation sold, was past its current maturity date, was less than 90 days past due on its interest payment, and had a risk rating of “3.” This loan was not impaired as of December 31, 2024 as the estimated fair value of the underlying collateral exceeded our basis in the loan. As of December 31, 2024, all other borrowers under performing loans were in compliance with the applicable contractual terms of each respective loan, including any required payment of interest. Refer to Note 2 to our consolidated financial statements for further discussion of our policies on revenue recognition and our CECL reserves.

Multifamily Joint Venture

As of December 31, 2024, our multifamily joint venture held a $43.3 million loan, which is included in the loan disclosures above. As of December 31, 2024, our Multifamily Joint Venture also held a $32.4 million REO asset. Refer to Note 2 to our consolidated financial statements for additional discussion of our multifamily joint venture.

Agency Multifamily Lending Partnership

In the second quarter of 2024, we entered into our Agency Multifamily Lending Partnership that allows our borrowers to access multifamily agency financing through MTRCC’s Fannie Mae DUS and Freddie Mac Optigo lending platforms. We will receive a portion of origination, servicing, and other fees for loans that we refer to MTRCC for origination under both the Fannie Mae and Freddie Mac programs. Additionally, we will share in losses with MTRCC and Fannie Mae on loans that we refer to MTRCC for origination under the Fannie Mae program. During the year ended December 31, 2024, we referred four loans to MTRCC that were originated and sold under the Fannie Mae and Freddie Mac programs, resulting in $1.1 million of revenue during the year ended December 31, 2024.

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Portfolio Financing

Our portfolio financing consists of secured debt, securitizations, and asset-specific debt. The following table details our portfolio financing ($ in thousands):

Secured Debt

Secured Credit Facilities

The following table details our secured credit facilities by spread over the applicable base rates as of December 31, 2024 ($ in thousands):

(1)The spread, all-in cost, and all-in yield are expressed over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, and other indices as applicable.

(2)Represents the amount of new borrowings we closed during the year ended December 31, 2024.

(3)In addition to spread, the cost includes the associated deferred fees and expenses related to the respective borrowings. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. All-in yield excludes loans accounted for under the cost-recovery and nonaccrual methods, if any, and REO assets.

(4)Represents the weighted-average all-in cost as of December 31, 2024 and is not necessarily indicative of the spread applicable to recent or future borrowings.

(5)Represents the principal balance of the collateral loan assets and the book value of the collateral REO assets.

(6)Represents the difference between the weighted-average all-in yield and weighted-average all-in cost.

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Securitizations

We have financed certain pools of our loans through collateralized loan obligations, or CLOs. The following table details our securitized debt obligations and the underlying collateral assets that are financed by our CLOs ($ in thousands):

(1)The book value of underlying collateral assets excludes any applicable CECL reserves.

(2)In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, purchase discounts, and accrual of exit fees.

(3)The weighted-average all-in yield and cost are expressed as a spread over SOFR. All-in yield excludes loans accounted for under the cost-recovery and nonaccrual methods, if any, and REO assets.

(4)Underlying Collateral Assets term represents the weighted-average final maturity of such loans, assuming all extension options are exercised by the borrower, and excludes REO assets. Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations.

(5)During the year ended December 31, 2024, we recorded $157.0 million of interest expense related to our securitized debt obligations.

Refer to Note 8 and Note 20 to our consolidated financial statements for additional details of our securitized debt obligations.

Asset-Specific Debt

The following table details our asset-specific debt ($ in thousands):

(1)The book value of underlying collateral assets excludes any applicable CECL reserves.

(2)The weighted-average all-in yield and cost are expressed as a spread over SOFR. These floating rate loans and related liabilities are currency and index-matched to the applicable benchmark rate relevant in each arrangement. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees and financing costs.

(3)The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Our non-recourse, asset-specific debt is term-matched in each case to the corresponding collateral loans.

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Corporate Financing

The following table details our outstanding corporate financing ($ in thousands):

The following table details our outstanding senior term loan facilities, or Term Loans, our outstanding senior secured notes, or Senior Secured Notes, and convertible senior notes, or Convertible Notes, as of December 31, 2024 ($ in thousands):

(1)The B-4 Term Loan and the B-5 Term Loan borrowings are subject to a floor of 0.50%. The Term Loans are indexed to one-month SOFR.

(2)Includes issue discounts, transaction expenses, and/or issuance costs, as applicable, that are amortized through interest expense over the life of each respective financing.

(3)Represents the stated coupon rate of the notes. We have entered into an interest rate swap that effectively converts our fixed rate exposure to a SOFR + 3.95% floating rate exposure. Refer to Note 12 to our consolidated financial statements for additional information.

(4)The conversion price of the Convertible Notes is $36.27, which represents the price of class A common stock per share based on a conversion rate of 27.5702. The conversion rate represents the number of shares of class A common stock issuable per $1,000 principal amount of Convertible Notes. The cumulative dividend threshold has not been exceeded as of December 31, 2024.

During the year ended December 31, 2024, we repurchased an aggregate principal amount of $2.3 million of the B-1 Term Loan at a weighted-average price of 99%, an aggregate principal amount of $30.8 million of the Senior Secured Notes at a weighted-average price of 88%, and an aggregate principal amount of $33.8 million of the Convertible Notes at a weighted-average price of 93%. This resulted in gains on extinguishment of debt of $25,000, $3.3 million, and $2.0 million, respectively, during the year ended December 31, 2024.

Refer to Note 2, Note 11, Note 12, and Note 13 to our consolidated financial statements for additional discussion of our Term Loans, Senior Secured Notes, and Convertible Notes.

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Floating Rate Portfolio

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of December 31, 2024, substantially all of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.

Our liabilities are generally currency and index-matched to each collateral asset, resulting in a net exposure to movements in benchmark rates that varies by currency silo based on the relative proportion of floating rate assets and liabilities.

The following table details our investment portfolio’s exposure to interest rates by currency as of December 31, 2024 (amounts in thousands):

(1)Includes Australian Dollar, Swedish Krona, and Swiss Franc currencies.

(2)Our floating rate loans and related liabilities are currency and index-matched to the applicable benchmark rate relevant in each arrangement.

(3)Excludes $1.9 billion of floating rate impaired loans.

(4)Excludes $817.5 million of non-consolidated senior interests and $100.1 million of loan participations sold, as of December 31, 2024. Our non-consolidated senior interests and loan participations sold are structurally non-recourse and term-matched to the corresponding loans, and have no impact on our net floating rate exposure.

(5)Our loan agreements generally require our borrowers to purchase interest rate caps, which mitigates our borrowers’ exposure to an increase in interest rates.

(6)Includes amounts outstanding under secured debt, securitizations, and asset-specific debt.

(7)Includes amounts outstanding under Term Loans and the senior secured notes due 2029. In connection with the issuance of the senior secured notes due 2029, we entered into an interest rate swap with a notional amount of $450.0 million to effectively convert our fixed rate exposure to floating rate exposure for such notes.

(8)Represents the U.S. dollar equivalent as of December 31, 2024.

In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the cash flows of the collateral real estate assets may not be sufficient to pay debt service due under our loans, which may contribute to non-performance or, in severe cases, default. This risk is partially mitigated by our consideration of rising rate stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest guarantees or other structural protections. As of December 31, 2024, 92% of our performing loans have interest rate caps, with a weighted-average strike price of 3.5%, or interest guarantees. During the year ended December 31, 2024, interest rate caps on $16.0 billion of performing loans, with a 3.4% weighted-average strike price, expired and 95% were replaced with new interest rate caps, with a weighted-average strike price of 3.7%, or interest guarantees.

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III. Our Results of Operations

Operating Results

The following table sets forth information regarding our consolidated results of operations for the years ended December 31, 2024, 2023 and 2022 ($ in thousands, except per share data):

Income from loans and other investments, net

Income from loans and other investments, net decreased $191.6 million during the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to a decline in interest income related to additional loans accounted for under the cost-recovery method during the year ended December 31, 2024, as well as a decrease in the weighted-average principal balance of our loan portfolio by $2.1 billion during the year ended

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December 31, 2024 compared to the year ended December 31, 2023. This was offset by a decrease in the weighted-average principal balance of our outstanding financing arrangements by $2.0 billion for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Income from loans and other investments, net increased $42.6 million during the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily due to (i) an increase in floating rate indices during the year ended December 31, 2023 compared to the year ended December 31, 2022 and (ii) an increase in the weighted average principal balance of our loan portfolio by $401.8 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. This was offset by (i) an increase in the weighted-average principal balance of our outstanding financing arrangements by $357.5 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022 and (ii) a decline in interest income related to additional loans accounted for under the cost-recovery method for all or a portion of the year ended December 31, 2023.

Revenue from real estate owned

Revenue from REO increased by $13.0 million during the year ended December 31, 2024 compared to the year ended December 31, 2023 due to seven REO assets being acquired during the year. There was no revenue from REO during the years ended December 31, 2023 and 2022.

Other income

Other income relates to origination, servicing, and other fees recognized in connection with our Agency Multifamily Lending Partnership. Other income increased by $1.1 million during the year ended December 31, 2024 as a result of the referral of four loans pursuant to the Agency Multifamily Lending Partnership that were originated and sold by MTRCC. There was no other income recognized during the years ended December 31, 2023 and 2022.

Gain on extinguishment of debt

Gain on extinguishment of debt increased by $736,000 during the year ended December 31, 2024 compared to the year ended December 31, 2023. During the year ended December 31, 2024, we recognized an aggregate gain on extinguishment of debt of $5.4 million related to the repurchase of an aggregate principal amount of $33.8 million, $30.8 million, and $2.3 million, of our Convertible Notes, senior secured notes due 2027, or the October 2021 senior secured notes, and B-1 Term Loan, respectively.

During the year ended December 31, 2023, we recognized a gain on extinguishment of debt of $4.6 million related to the repurchase of an aggregate principal amount of $33.9 million of our Senior Secured Notes. There was no repurchase activity or gain on extinguishment of debt in the year ended December 31, 2022.

Expenses

Expenses include management and incentive fees payable to our Manager, general and administrative expenses, expenses from real estate owned, and other expenses. Expenses decreased by $13.8 million during the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to a decrease of $44.3 million of incentive fees payable to our Manager, driven primarily by charge-offs of CECL reserves. This was offset by $22.1 million of expenses of real estate owned, which relates to REO operations. We did not incur any expenses from REO during the year ended December 31, 2023. Additionally, other expenses increased by $5.7 million, which represents a contingent liability related to the sale of a loan. Lastly, general and administrative expenses increased by $2.8 million primarily due to (i) a $1.9 million increase in professional expenses, and (ii) a $1.2 million increase in non-cash restricted stock amortization related to shares awarded under our long-term incentive plans.

Other expenses increased by $7.7 million during the year ended December 31, 2023 compared to the year ended December 31, 2022 due to an increase of (i) $6.9 million of incentive fees payable to our Manager, due to an increase in Distributable Earnings, (ii) $1.9 million of management fees payable to our Manager, primarily as a result of an increase in our Equity, and (iii) $1.7 million of other operating expenses. This was offset by a reduction in non-cash restricted stock amortization of $2.7 million related to awards under our long-term incentive plans.

Changes in current expected credit loss reserve

During the year ended December 31, 2024, we recorded a $538.8 million increase in our CECL reserves, as compared to a $249.8 million increase during the year ended December 31, 2023. These incremental CECL reserves primarily reflect a

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$163.0 million increase in the specific reserves related to certain impaired loans in our portfolio, most of which were secured by office buildings. The office sector is generally facing reduced tenant and capital markets demand in recent years. These impairments are each determined individually as a result of changes in the specific credit quality factors for such loans. These factors included, among others, (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan. In addition, our general CECL reserves decreased primarily as a result of loan repayments reducing the size of our portfolio during the year ended December 31, 2024.

We may be required to record further increases to our CECL reserves in the future, depending on the performance of our portfolio and broader market conditions, and there may be volatility in the level of our CECL reserves. In particular, our loans secured by office buildings have experienced higher levels of CECL reserves and may continue to do so if market conditions relevant to office buildings do not improve. Any such reserve increases are difficult to predict, but are expected to be primarily the result of incremental loan impairments resulting from changes in the specific credit quality factors of such loans and to be concentrated in our loans receivable with a risk rating of “4” as of December 31, 2024.

During the year ended December 31, 2023, we recorded a $249.8 million increase in our CECL reserves, as compared to a

$211.5 million increase during the year ended December 31, 2022. These CECL reserves reflect certain impaired loans in

our portfolio, as well as an additional increase in our CECL reserves due to macroeconomic conditions.

Loss from unconsolidated entities

Loss from unconsolidated entities of $2.7 million represents our share of the start-up costs that were incurred related to our Net Lease Joint Venture. There was no income or loss from unconsolidated entities during the years ended December 31, 2023 or 2022.

Income tax provision

The income tax provision decreased by $3.0 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023, due to a decrease in the income tax provisions related to our taxable REIT subsidiaries.

The income tax provision increased by $2.4 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, due to an increase in the income tax provisions related to our taxable REIT subsidiaries.

Dividends per share

During the year ended December 31, 2024, we declared dividends of $2.18 per share, or $377.8 million in aggregate. During the year ended December 31, 2023, we declared dividends of $2.48 per share, or $427.9 million in aggregate. During the year ended December 31, 2022, we declared dividends of $2.48 per share, or $423.6 million in aggregate.

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The following table sets forth information regarding our consolidated results of operations for the three months ended December 31, 2024 and September 30, 2024 ($ in thousands, except per share data):

Income from loans and other investments, net

Income from loans and other investments, net decreased $6.8 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. The decrease was primarily due to a decrease in the weighted-average principal balance of our loan portfolio by $1.6 billion during the three months ended December 31, 2024, as well as a decline in interest income related to two additional loans accounted for under the cost-recovery method effective September 30, 2024. This was offset by a decrease in the weighted-average principal balance of our outstanding financing arrangements by $1.1 billion for the three months ended December 31, 2024 compared to the three months ended September 30, 2024.

Revenue from real estate owned

Revenue from REO increased by $10.6 million during the three months ended December 31, 2024. The increase was due to four additional REO assets acquired during the three months ended December 31, 2024.

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Other income

Other income relates to origination, servicing, and other fees recognized in connection with our Agency Multifamily Lending Partnership. Other income increased by $1.1 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024, as a result of the referral of four loans pursuant to the Agency Multifamily Lending Partnership that were originated and sold by MTRCC. There was no other income recognized during the three months ended September 30, 2024.

Gain on extinguishment of debt

Gain on extinguishment of debt decreased by $2.4 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. We did not recognize any gains from extinguishment of debt during the three months ended December 31, 2024. During the three months ended September 30, 2024, we recognized an aggregate gain on extinguishment of debt of $2.4 million related to the repurchase of an aggregate principal amount of $33.8 million, $4.6 million, and $2.3 million of our Convertible Notes, October 2021 senior secured notes, and B-1 Term Loan, respectively.

Expenses

Expenses include management and incentive fees payable to our Manager, general and administrative expenses, expenses from real estate owned, and other expenses. Expenses increased by $21.0 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024 primarily due to a $15.7 million increase in expenses of real estate owned due to additional REO assets acquired during the quarter, as well as a $5.7 million increase in other expenses, which represents a contingent liability related to the sale of a loan.

Changes in current expected credit loss reserve

During the three months ended December 31, 2024, we recorded a $19.1 million increase in our CECL reserves, as compared to a $132.5 million increase during the three months ended September 30, 2024. This increase is primarily due to: (i) an increase in our general CECL reserves as a result of changes in the historical loss rate, and (ii) one additional loan that was impaired during the three months ended December 31, 2024. These increases were partially offset by a $32.4 million reversal of asset-specific CECL reserves as a result of the resolution of several impaired loans above our carrying value.

We may be required to record further increases to our CECL reserves in the future, depending on the performance of our portfolio and broader market conditions, and there may be volatility in the level of our CECL reserves. In particular, our loans secured by office buildings have experienced higher levels of CECL reserves and may continue to do so if market conditions relevant to office buildings do not improve. Any such reserve increases are difficult to predict, but are expected to be primarily the result of incremental loan impairments resulting from changes in the specific credit quality factors of such loans and to be concentrated in our loans receivable with a risk rating of “4” as of December 31, 2024.

Loss from unconsolidated entities

Loss from unconsolidated entities of $2.7 million represents our share of the start-up costs that were incurred related to our Net Lease Joint Venture. There was no income or loss from unconsolidated entities during the three months ended September 30, 2024.

Income tax provision

The income tax provision decreased by $1.1 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024 primarily due to a decrease in the income tax provisions related to our taxable REIT subsidiaries.

Dividends per share

During the three months ended December 31, 2024, we declared dividends of $0.47 per share, or $81.2 million in aggregate. During the three months ended September 30, 2024, we declared dividends of $0.47 per share, or $81.3 million in aggregate.

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IV. Liquidity and Capital Resources

Capitalization

We have capitalized our business to date primarily through the issuance and sale of shares of our class A common stock, corporate debt, and asset-level financings. As of December 31, 2024, our capitalization structure included $3.8 billion of common equity, $2.8 billion of corporate debt, and $12.9 billion of asset-level financings. Our $2.8 billion of corporate debt includes $1.8 billion of Term Loan borrowings, $785.3 million of Senior Secured Notes, and $266.2 million of Convertible Notes. Our $12.9 billion of asset-level financings includes $9.7 billion of secured debt, $1.9 billion of securitizations, and $1.2 billion of asset-specific debt, all of which are structured to produce term, currency, and index matched funding with no margin call provisions based upon capital markets events.

As of December 31, 2024, we had $1.5 billion of liquidity that can be used to satisfy our short-term cash requirements and as working capital for our business.

See Notes 7, 8, 9, 10, 11, 12, and 13 to our consolidated financial statements for additional details regarding our secured debt, securitized debt obligations, asset-specific debt, loan participations sold, Term Loans, Senior Secured Notes, and Convertible Notes, respectively.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents our debt-to-equity ratio and total leverage ratio:

(1)The debt and leverage amounts included in the calculations above use gross outstanding principal balances, excluding any unamortized deferred financing costs and discounts.

(2)Represents, in each case at period end, (i) total outstanding secured debt, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) total equity.

(3)Represents, in each case at period end, (i) total outstanding secured debt, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) Adjusted Equity. Adjusted Equity is a non-GAAP financial measure. Refer to “Adjusted Debt-to-Equity Ratio and Adjusted Total Leverage Ratio” below for the definition of Adjusted Equity and a reconciliation to total equity.

(4)Represents, in each case at period end, (i) total outstanding secured debt, securitizations, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) total equity.

(5)Represents, in each case at period end, (i) total outstanding secured debt, securitizations, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) Adjusted Equity. Adjusted Equity is a non-GAAP financial measure. Refer to “Adjusted Debt-to-Equity Ratio and Adjusted Total Leverage Ratio” below for the definition of Adjusted Equity and a reconciliation to total equity.

Adjusted Debt-to-Equity Ratio and Adjusted Total Leverage Ratio

Our adjusted debt-to-equity and total leverage ratios are measures that are not prepared in accordance with GAAP, as they are calculated using Adjusted Equity, which we define as our total equity, excluding the aggregate CECL reserves on our loans receivable and unfunded loan commitments.

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We believe that Adjusted Equity provides meaningful information to consider in addition to our total equity determined in accordance with GAAP in the context of assessing our debt-to-equity and total leverage ratios. The adjusted debt-to-equity and total leverage ratios are metrics we use, in addition to our unadjusted debt-to-equity and total leverage ratios, when evaluating our capitalization structure, as Adjusted Equity excludes the unrealized impact of our CECL reserves, which may vary from quarter-to-quarter as our loan portfolio changes and market and economic conditions evolve. We believe these ratios, and therefore our Adjusted Equity, are useful financial metrics for existing and potential future holders of our class A common stock to consider when evaluating how our business is capitalized and the relative amount of leverage in our business.

Adjusted Equity does not represent our total equity and should not be considered as an alternate to GAAP total equity. In addition, our methodology for calculating Adjusted Equity may differ from methodologies employed by other companies to calculate the same or similar supplemental measures, and accordingly, our reported Adjusted Equity may not be comparable to the Adjusted Equity reported by other companies.

The following table provides a reconciliation of Adjusted Equity to our GAAP total equity ($ in thousands):

Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents, available borrowings under our secured debt facilities, and net receivables from servicers related to loan repayments, which are set forth in the following table ($ in thousands):

(1)Represents loan principal payments held by our third-party servicer as of the balance sheet date which were remitted to us during the subsequent remittance cycle, net of the related secured debt balance.

During the year ended December 31, 2024, we generated cash flow from operating activities of $366.5 million and received $5.2 billion from loan principal collections, sales proceeds, and cost-recovery proceeds, of which $4.8 billion is reflected in our consolidated statement of cash flows prepared in accordance with GAAP. Furthermore, we are able to generate incremental liquidity through the replenishment provisions of certain of our CLOs, which allow us to replace a repaid loan in the CLO by increasing the principal amount of existing CLO collateral assets to maintain the aggregate amount of collateral assets in the CLO, and the related financing outstanding.

We have access to further liquidity through public and private offerings of equity and debt securities, syndicated term loans, and similar transactions. To facilitate public offerings, in July 2022, we filed a shelf registration statement with the SEC that is effective for a term of three years and expires in July 2025. The amount of securities to be issued pursuant to this shelf registration statement 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 registration statement include: (i) class A common stock; (ii) preferred stock; (iii) depositary shares representing preferred stock; (iv) debt securities; (v) warrants; (vi) subscription rights; (vii) purchase contracts; and (viii) units consisting of one or more of such securities or any combination of these securities. 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 materials, at the time of any offering.

We may also access liquidity through our dividend reinvestment plan and direct stock purchase plan, under which 9,969,112 shares of class A common stock were available for issuance as of December 31, 2024, and our at the market stock offering program, pursuant to which we may sell, from time to time, up to $480.9 million of additional shares of our

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class A common stock as of December 31, 2024. Refer to Note 15 to our consolidated financial statements for additional details.

Uses of Liquidity

In addition to our loan origination and funding activity and general operating expenses, our primary uses of liquidity include interest and principal payments with respect to our $9.7 billion of outstanding borrowings under secured debt, our asset-specific debt, our Term Loans, our Senior Secured Notes, and our Convertible Notes. During the year ended December 31, 2024, we repurchased an aggregate principal amount of $2.3 million of the B-1 Term Loan at a weighted-average price of 99%, an aggregate principal amount of $30.8 million of our Senior Secured Notes at a weighted-average price of 88%, and an aggregate principal amount of $33.8 million of the Convertible Notes at a weighted-average price of 93%. This resulted in gains on extinguishment of debt of $25,000, $3.3 million, and $2.0 million, respectively, during the year ended December 31, 2024. From time to time we may continue to repurchase our outstanding debt or shares of our class A common stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material.

In July 2024, our board of directors authorized the repurchase of up to $150.0 million of our class A common stock. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions, in agreements and arrangements structured in a manner consistent with Rules 10b-18 and 10b5-1 under the Exchange Act or otherwise. The timing and the actual amounts repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

During the year ended December 31, 2024, we repurchased 1,646,034 shares of class A common stock at a weighted-average price per share of $17.74, for a total cost of $29.2 million. As of December 31, 2024, the amount remaining available for repurchases under the program was $120.8 million. During the period from January 1, 2025 to February 5, 2025, we repurchased 1,792,836 shares of class A common stock at a weighted-average price per share of $17.63, for a total cost of $31.6 million.

As of December 31, 2024, we had unfunded commitments of $1.3 billion related to 60 loans receivable and $605.9 million of committed or identified financing for those commitments resulting in net unfunded commitments of $657.2 million. The unfunded loan commitments comprise funding for capital expenditures and construction, leasing costs, and interest and carry costs. Loan funding commitments are generally subject to certain conditions, including, without limitation, the progress of capital projects, leasing, and cash flows at the properties securing our loans. Therefore, the exact timing and amounts of such future loan fundings are uncertain and will depend on the current and future performance of the underlying collateral assets. We expect to fund our loan commitments over the remaining term of the related loans, which have a weighted-average future funding period of 2.2 years.

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Contractual Obligations and Commitments

Our contractual obligations and commitments as of December 31, 2024 were as follows ($ in thousands):

(1)Represents known and estimated short-term cash requirements related to our contractual obligations and commitments. Refer to “Sources of Liquidity” above for information about our sources of funds to satisfy our short-term cash requirements.

(2)The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final loan maturity date, however we may be obligated to fund these commitments earlier than such date.

(3)Our secured debt and asset-specific debt agreements are generally term-matched to their underlying collateral. Therefore, the allocation of both principal and interest payments under such agreements is generally allocated based on the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower. In limited instances, the maturity date of the respective debt agreement is used.

(4)The Term Loans are partially amortizing, with an amount equal to 1.0% per annum of the initial principal balance due in quarterly installments. Refer to Note 11 to our consolidated financial statements for further details on our Term Loans.

(5)Reflects the outstanding principal balance of Convertible Notes, excluding any potential conversion premium. Refer to Note 13 to our consolidated financial statements for further details on our Convertible Notes.

(6)Represents interest payments on our secured debt, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes. Future interest payment obligations are estimated assuming the interest rates in effect as of December 31, 2024 will remain constant into the future. This is only an estimate as actual amounts borrowed and interest rates will vary over time.

(7)Total does not include $1.9 billion of consolidated securitized debt obligations, $817.5 million of non-consolidated senior interests, and $100.1 million of loan participations sold, as the satisfaction of these liabilities will not require cash outlays from us.

We are also required to settle our foreign exchange and interest rate derivatives with our derivative counterparties upon maturity which, depending on foreign currency exchange and interest rate movements, may result in cash received from or due to such counterparties. The table above does not include these amounts as they are not fixed and determinable. Refer to Note 14 to our consolidated financial statements for details regarding our derivative contracts.

We are required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses pursuant to our Management Agreement. The table above does not include the amounts payable to our Manager under our Management Agreement as they are not fixed and determinable. Refer to Note 16 to our consolidated financial statements for additional terms and details of the fees payable under our Management Agreement.

As a REIT, we generally must distribute substantially all of our net taxable income to stockholders in the form of dividends to comply with the REIT provisions of the Internal Revenue Code. Our taxable income does not necessarily equal our net income as calculated in accordance with GAAP, or our Distributable Earnings as described above.

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Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands):

We experienced a net decrease in cash and cash equivalents of $19.1 million for the year ended December 31, 2024, compared to a net increase of $55.0 million for the year ended December 31, 2023. During the year ended December 31, 2024, we (i) received $5.2 billion from loan principal collections and sales proceeds, of which $4.8 billion is reflected in our consolidated statement of cash flows prepared in accordance with GAAP, excluding $512.1 million of additional repayments or reduction of loan exposure under related non-consolidated senior interests, (ii) received $646.8 million of net proceeds from the issuance of the B-5 term loan, and (iii) received $450.0 million of net proceeds from the issuance of Senior Secured Notes. Also, during the year ended December 31, 2024, we (i) repaid a net $2.7 billion of secured debt borrowings, (ii) funded $1.4 billion of loans, (iii) repaid $1.0 billion of secured term loans, (iv) repaid $666.0 million of securitized debt obligations, and (v) paid $404.0 million of dividends on our class A common stock.

We experienced a net increase in cash and cash equivalents of $55.0 million for the year ended December 31, 2023, compared to a net decrease of $249.5 million for the year ended December 31, 2022. During the year ended December 31, 2023, we received $3.8 billion from loan principal collections and sales proceeds, of which $2.8 billion is reflected in our consolidated statement of cash flows prepared in accordance with GAAP, excluding (i) $795.8 million of additional repayments or reduction of loan exposure under related non-consolidated senior interests, (ii) $152.4 million of loan portfolio payments held by servicer, and (iii) $100.7 million of sales of junior loan interests which did not qualify for sale accounting under GAAP. Also, during the year ended December 31, 2023, we (i) funded $1.3 billion of loans, (ii) repaid a net $1.1 billion of secured debt borrowings, (iii) paid $426.9 million of dividends on our class A common stock, (iv) repaid $220.0 million of convertible notes, and (v) repaid $166.0 million of securitized debt obligations.

Refer to Note 3 to our consolidated financial statements for further discussion of our loan activity. Refer to Notes 7, 8, and 15 to our consolidated financial statements for additional discussion of our secured debt, securitized debt obligations, and equity, respectively.

V. Other Items

Income Taxes

We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of December 31, 2024 and December 31, 2023, we were in compliance with all REIT requirements.

Furthermore, our taxable REIT subsidiaries are subject to federal, state, and local income tax on their net taxable income. Refer to Note 17 to our consolidated financial statements for additional discussion of our income taxes.

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Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial

statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our Manager to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. During 2024, our Manager reviewed and evaluated our critical accounting policies and believes them to be appropriate. The following is a summary of our significant accounting policies that we believe are the most affected by our Manager’s judgments, estimates, and assumptions:

Current Expected Credit Losses

The current expected credit loss, or CECL, reserve required under the FASB Accounting Standards Codification, or ASC, Topic 326 “Financial Instruments – Credit Losses,” or ASC 326, reflects our current estimate of potential credit losses related to our portfolio. We estimate our CECL reserves primarily using the Weighted-Average Remaining Maturity, or WARM method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in the Financial Accounting Standards Board Staff Q&A Topic 326, No. 1. Estimating the CECL reserve requires judgment, including the following assumptions:

•Historical loan loss reference data: To estimate the historic loan losses relevant to our portfolio, we have augmented our historical loan performance with market loan loss data licensed from Trepp LLC. This database includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through November 30, 2024. Within this database, we focused our historical loss reference calculations on the most relevant subset of available CMBS data, which we determined based on loan metrics that are most comparable to our loan portfolio including asset type, geography, and origination loan-to-value, or LTV. We believe this CMBS data, which includes month-over-month loan and property performance, is the most relevant, available, and comparable dataset to our portfolio.

•Expected timing and amount of future loan fundings and repayments: Expected credit losses are estimated over the contractual term of each loan, adjusted for expected repayments. As part of our quarterly review of our loan portfolio, we assess the expected repayment date of each loan, which is used to determine the contractual term for purposes of computing our CECL reserves. Additionally, the expected credit losses over the contractual period of our loans are subject to the obligation to extend credit through our unfunded loan commitments. The CECL reserve for unfunded loan commitments is adjusted quarterly, as we consider the expected timing of future funding obligations over the estimated life of the loan. The considerations in estimating our CECL reserve for unfunded loan commitments are similar to those used for the related outstanding loans receivable.

•Current credit quality of our portfolio: Our risk rating is our primary credit quality indicator in assessing our CECL reserves. We perform a quarterly risk review of our portfolio of loans and assign each loan a risk rating based on a variety of factors, including, without limitation, origination LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship.

•Expectations of performance and market conditions: Our CECL reserves are adjusted to reflect our estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing our loans. These estimations include unemployment rates, interest rates, expectations of inflation and/or recession, and other macroeconomic factors impacting the likelihood and magnitude of potential credit losses for our loans during their anticipated term. In addition to the CMBS data we have licensed from Trepp LLC, we have also licensed certain macroeconomic financial forecasts to inform our view of the potential future impact that broader economic conditions may have on our loan portfolio’s performance. We generally also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations. This process requires significant judgments about future events that, while based on the information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic condition impacting our portfolio could vary significantly from the estimates we made as of December 31, 2024.

•Impairment: impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. Determining that a loan is impaired requires significant judgment from management and is based on several factors including (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan. If a loan is determined to be impaired, we record the impairment as a component of our CECL reserves by applying the practical expedient for collateral dependent loans. The CECL reserves are assessed on an individual basis for these loans by comparing the

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estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. 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 by us. Actual losses, if any, could ultimately differ materially from these estimates. We only expect to charge-off the impairment losses in our consolidated financial statements prepared in accordance with GAAP if and when such amounts are deemed non-recoverable. This is generally at the time a loan is repaid or foreclosed. However, non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected.

These assumptions vary from quarter-to-quarter as our loan portfolio changes and market and economic conditions evolve. The sensitivity of each assumption and its impact on the CECL reserves may change over time and from period to period. During the year ended December 31, 2024, our CECL reserves increased by $154.2 million, bringing our total reserves to $746.5 million as of December 31, 2024. See Notes 2 and 3 to our consolidated financial statements for further discussion of our CECL reserves.

Revenue Recognition

Interest income from our loans receivable portfolio is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan as an adjustment to yield. Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in our opinion, recovery of income and principal becomes doubtful. Interest received is then recorded as income or as a reduction in the amortized cost basis, based on the specific facts and circumstances, until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses are deferred and recognized as a reduction to interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred.

Real Estate Owned

We may assume legal title or physical possession of the collateral underlying a loan through a foreclosure or the execution of a deed-in-lieu of foreclosure. These real estate acquisitions are classified as REO on our consolidated balance sheet and are initially recognized at fair value on the acquisition date in accordance with the ASC Topic 805, “Business Combinations.”

Upon acquisition of REO, we assess the fair value of acquired tangible and intangible assets, which may include land, buildings, tenant improvements, “above-market” and “below-market” leases, acquired in-place leases, other identified intangible assets and assumed liabilities, as applicable, and allocate the fair value to the acquired assets and assumed liabilities. We assess and consider fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that we deem appropriate, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions. We capitalize acquisition-related costs associated with asset acquisitions.

Real estate assets held for investment, except for land, are depreciated using the straight-line method over the assets’ estimated useful lives of up to 40 years for buildings and 10 years for tenant improvements. Renovations and/or replacements that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives. Lease intangibles are amortized over the remaining term of applicable leases on a straight-line basis. The cost of ordinary repairs and maintenance are expensed as incurred.

Real estate assets held for investment are assessed for impairment on a quarterly basis. If the depreciated cost basis of the asset exceeds the undiscounted cash flows over the remaining holding period, the asset is considered for impairment. The impairment loss is recognized when the carrying value of the real estate assets exceed their fair value. The evaluation of anticipated future cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates, capital requirements and anticipated holding periods that could differ materially from actual results.

Real estate assets are classified as held for sale in the period when they meet the criteria under ASC Topic 360 “Property, Plant, and Equipment.” Once a real estate asset is classified as held for sale, depreciation is suspended and the asset is reported at the lower of its carrying value or fair value less cost to sell. If circumstances arise and we decide not to sell a real estate asset previously classified as held for sale, the real estate asset is reclassified as held for investment. Upon reclassification, the real estate asset is measured at the lower of (i) its carrying amount prior to classification as held for

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sale, adjusted for depreciation expense that would have been recognized had the real estate been classified as held for investment, and (ii) its estimated fair value at the time of reclassification.

As of December 31, 2024, we had seven REO assets which were all classified as held for investment.

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VI. Loan Portfolio Details

The following table provides details of our loan portfolio, on a loan-by-loan basis, as of December 31, 2024 ($ in millions):

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