TPG RE Finance Trust, Inc. (TRTX)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited and audited consolidated financial statements and the accompanying notes included elsewhere in this Form 10-Q and in our Form 10-K filed with the SEC on February 17, 2026. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, and financial condition based on current expectations that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from any results expressed or implied by these forward-looking statements as a result of various factors, including but not limited to those discussed under the heading “Risk Factors” in our Form 10-K filed with the SEC on February 17, 2026.

Overview

We are a commercial real estate finance company externally managed by TPG RE Finance Trust Management, L.P., an affiliate of our sponsor TPG. We directly originate, acquire and manage commercial mortgage loans and other commercial real estate-related debt instruments in North America for our balance sheet. Our objective is to provide attractive risk-adjusted returns to our stockholders over time through cash distributions and capital appreciation. To meet our objective, we focus primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as retenanting, refurbishment or other form of repositioning. The collateral underlying our loans is located in primary and select secondary markets in the U.S. that we believe have attractive economic conditions and commercial real estate fundamentals. We operate our business as one segment.

We made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. We believe we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code and we believe that our organization and current and intended manner of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. As a REIT, we generally are not subject to U.S. federal income tax on our REIT taxable income that we distribute currently to our stockholders. We operate our business in a manner that permits us to maintain an exclusion or exemption from registration under the Investment Company Act.

Our Manager

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $306 billion in assets under management as of March 31, 2026. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's Real Estate platform and TPG’s management committee.

For a summary of certain terms of the management agreement between us and our Manager (the “Management Agreement”), see Note 11 to our Consolidated Financial Statements included in this Form 10-Q.

Macroeconomic Environment

Thus far, 2026 has been marked by significant uncertainty and volatility in global markets, largely driven by geopolitical conditions and the effects of international conflicts and inflation on global markets and interest rates, tariffs and international trade policy and disputes, and political and regulatory uncertainty. After a series of interest rate decreases by the Federal Reserve in 2024 and 2025, the Federal Reserve has elected to hold interest rates steady thus far in 2026. Uncertainty related to international conflicts, oil prices and inflation have caused market expectations with respect to future interest rate policy to shift, with many now projecting no reductions in rates during the remainder of 2026, or potentially increases in rates before the end of the year or in 2027.

These market dynamics have posed challenges to commercial real estate transaction activity so far in 2026. However, the cost and availability of debt continues to remain more constructive for real estate values and transaction activity as compared to recent past periods. During the six months ended June 30, 2026, we originated five first mortgage loans, with aggregate total loan commitments of $614.4 million, an aggregate initial unpaid principal balance of $585.6 million, and aggregate unfunded commitments at closing of $28.8 million. While we currently believe that market conditions are favorable for additional origination activity over the remainder of 2026, significant uncertainty continues to exist with respect to interest rate policy, geopolitical conditions and international conflicts, oil prices, inflation, and the political and regulatory environment. Our continued monitoring of these and other conditions will continue to inform our loan origination volumes, liquidity, and capital allocation throughout the remainder of 2026.

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Second Quarter 2026 Activity

Operating Results:

•Recognized Net income attributable to common stockholders of $9.4 million, compared to $15.2 million for the three months ended March 31, 2026, a decrease of $5.8 million.

•Produced Net interest income of $23.7 million, resulting from interest income of $74.1 million and interest expense of $50.4 million. Net interest income decreased $2.1 million compared to the three months ended March 31, 2026.

•Generated Distributable Earnings of $17.6 million, compared to $19.5 million for the three months ended March 31, 2026, a decrease of $1.9 million.

•Recorded an increase to our allowance for credit losses on our loan portfolio of $3.5 million, for a total allowance for credit losses of $80.7 million, or 179 basis points of total loan commitments of $4.5 billion.

•Declared a common stock dividend of $0.24 per common share for the three months ended June 30, 2026.

Investment Portfolio Activity:

•Originated three first mortgage loans with aggregate total loan commitments of $466.0 million, an aggregate initial unpaid principal balance of $450.0 million, aggregate unfunded loan commitments at closing of $16.0 million, a weighted average interest rate of Term SOFR plus 2.79%, and a weighted average interest rate floor of 2.63%.

•Funded $14.8 million of future funding obligations associated with existing loans.

•Received one full loan repayment of $227.1 million and partial principal payments of $47.3 million related to two loans for total loan repayments of $274.4 million.

Corporate Financing Activity:

•Closed a secured term loan (the "Term Loan B") with an aggregate principal amount of $400.0 million due in 2033, priced at 99.75% and bears interest at Term SOFR plus 275 basis points.

•Closed a $100.0 million corporate revolving credit facility (the "Revolver") due in 2031 which bears interest at Term SOFR plus 200 basis points and was undrawn at close.

Investment Portfolio Financing Activity:

•Extended the Wells Fargo secured credit agreement to 2028 and increased the capacity by $350.0 million to $850.0 million.

•Closed a $500.0 million secured credit agreement with Citi.

•Increased the capacity of the Goldman Sachs secured credit agreement by $250.0 million to $750.0 million.

•Redeemed all $597.8 million of outstanding investment-grade bonds of TRTX 2022-FL5. 17 collateral interests with an aggregate unpaid principal balance of $698.1 million financed therein were refinanced primarily by the upsize of the Wells Fargo secured credit agreement.

•Utilized the reinvestment feature in TRTX 2025-FL6 and TRTX 2025-FL7 two times and one time, respectively, recycling loan repayments of $113.3 million and $3.9 million, respectively.

Liquidity:

•Maintained substantial near-term liquidity of $488.2 million, as of June 30, 2026, comprised of:

•$65.6 million of cash-on-hand, of which $26.1 million was available for investment, net of $39.5 million held to satisfy liquidity covenants under our various financing arrangements.

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $297.4 million under secured credit agreements with three lenders and $20.0 million under other financing arrangements.

•Undrawn capacity of $100.0 million under the Revolver.

•Collateralized loan obligation reinvestment proceeds held at the trustee of $5.2 million.

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We have financed our loan investments as of June 30, 2026 utilizing two CRE CLOs totaling $1.9 billion, $992.0 million under secured credit agreements with total commitments of $2.3 billion provided by four lenders, $60.2 million under asset-specific financing arrangements and $128.9 million under our $375.0 million secured revolving credit facility. Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $186.0 million that are eligible to pledge under our existing financing arrangements.

As of June 30, 2026, 54.3% of our borrowings were pursuant to our CRE CLO vehicles, 31.8% were pursuant to our secured credit agreements and secured revolving credit facility, 1.7% were pursuant to our asset-specific financing arrangements, 0.9% were pursuant to our mortgage loan payable, and 11.3% were pursuant to our Term Loan B. Non-mark-to-market financing comprised 85.2% of total borrowings as of June 30, 2026.

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of June 30, 2026, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.63% (1.65% for arrangements with mark-to-market provisions and 1.60% for two arrangements with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 3.2 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

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Key Financial Measures and Indicators

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared p

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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 Form 10-K. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part, 1. Item 1A, “Risk Factors” in this Form 10-K.

This section discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

We are a commercial real estate finance company externally managed by TPG RE Finance Trust Management, L.P., an affiliate of our sponsor TPG. We directly originate, acquire and manage commercial mortgage loans and other commercial real estate-related debt instruments in North America for our balance sheet. Our objective is to provide attractive risk-adjusted returns to our stockholders over time through cash distributions and capital appreciation. To meet our objective, we focus primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as retenanting, refurbishment or other form of repositioning. The collateral underlying our loans is located in primary and select secondary markets in the U.S. that we believe have attractive economic conditions and commercial real estate fundamentals. We operate our business as one segment.

We made an election to be taxed as a REIT for U.S. federal income tax purposes, commencing with our initial taxable year ended December 31, 2014. We believe we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code and we believe that our organization and current and intended manner of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT. As a REIT, we generally are not subject to U.S. federal income tax on our REIT taxable income that we distribute currently to our stockholders. We operate our business in a manner that permits us to maintain an exclusion or exemption from registration under the Investment Company Act.

Our Manager

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global alternative asset manager with $303 billion in assets under management as of December 31, 2025. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's Real Estate platform and TPG’s management committee.

For a summary of certain terms of the management agreement between us and our Manager (the “Management Agreement”), see Note 10 to our Consolidated Financial Statements included in this Form 10-K.

Macroeconomic Environment

2025 was marked by significant volatility in global markets, driven by tariffs and international trade policy and disputes, political and regulatory uncertainty, geopolitical conditions, elevated interest rates, and inflation. Collectively, these market dynamics have posed challenges to commercial real estate values and transaction activity. However, the Federal Reserve decreased interest rates in 2024 and 2025, which has contributed to an improvement in the cost and availability of debt. This was constructive for real estate values and transaction activity. In 2025, we originated 20 first mortgage loans, with aggregate total loan commitments of $1.9 billion, an aggregate initial unpaid principal balance of $1.8 billion, and aggregate unfunded commitments at closing of $0.1 billion. This represented a significant increase in origination activity over 2024, when we originated eight first mortgage loans, with aggregate total loan commitments of $562.3 million, an aggregate initial unpaid principal balance of $532.0 million, and aggregate unfunded commitments at closing of $30.3 million.

Thus far, 2026 has been marked by additional policy-driven uncertainty and market volatility, including with respect to international trade policy and geopolitical conditions. The Federal Reserve recently held interest rates steady for the first time since July 2025. While some officials have expressed support for additional decreases in interest rates in 2026, other officials have expressed opposition to additional decreases. As a result, significant uncertainty exists with respect to the timing, direction and extent of any future interest rate changes, in addition to uncertainty related to international trade policy, the political and regulatory environment, geopolitical events, and inflation. Our continued monitoring of these and other conditions will continue to inform our loan origination volumes, liquidity, and capital allocation in 2026.

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Fourth Quarter 2025 Activity

Operating Results:

•Recognized Net income attributable to common stockholders of $0.2 million, compared to $18.4 million for the three months ended September 30, 2025, a decrease of $18.2 million.

•Produced Net interest income of $25.4 million, resulting from interest income of $74.4 million and interest expense of $49.0 million. Net interest income decreased $2.8 million compared to the three months ended September 30, 2025.

•Generated Distributable Earnings of $18.5 million, compared to $19.9 million for the three months ended September 30, 2025, a decrease of $1.4 million.

•Recorded an increase to our allowance for credit losses on our loan portfolio of $11.3 million, for a total allowance for credit losses of $77.4 million, or 180 basis points of total loan commitments of $4.3 billion.

•Declared a common stock dividend of $0.24 per common share for the three months ended December 31, 2025.

Investment Portfolio Activity:

•Originated nine first mortgage loans with aggregate total loan commitments of $927.0 million, an aggregate initial unpaid principal balance of $843.0 million, aggregate unfunded loan commitments at closing of $83.9 million, a weighted average interest rate of Term SOFR plus 2.66%, and a weighted average interest rate floor of 2.74%.

•Funded $11.9 million of future funding obligations associated with existing loans.

•Received six full loan repayments of $378.3 million.

Investment Portfolio Financing Activity:

•Issued TRTX 2025-FL7, a $1.1 billion managed CRE CLO with $957.0 million of investment-grade bonds outstanding, a 30-month reinvestment period, an advance rate of 87.0%, and a weighted average interest rate at issuance of Term SOFR plus 1.67%, before transaction costs.

•Redeemed all $411.5 million of outstanding investment-grade bonds of TRTX 2021-FL4. Five collateral interests with an aggregate unpaid principal balance of $205.2 million financed therein were refinanced by the issuance of TRTX 2025-FL7.

•Utilized the reinvestment feature in TRTX 2025-FL6 three times, recycling loan repayments of $163.9 million.

•Executed an extension of the Goldman Sachs secured credit agreement through November 17, 2029.

•Executed an extension of the initial maturity of the Barclays secured credit agreement.

Full Year 2025 Activity

Operating Results:

•Recognized Net income attributable to common stockholders of $45.5 million, or $0.57 per diluted share, and Distributable Earnings of $76.8 million or $0.97 per diluted share.

•Produced Net interest income of $103.8 million, resulting from interest income of $290.2 million and interest expense of $186.5 million.

•Declared dividends of $77.9 million, or $0.96 per common share, representing a 11.1% annualized dividend yield based on the December 31, 2025 closing price of $8.61.

Investment Portfolio Activity:

•Originated 20 first mortgage loans with total loan commitments of $1.9 billion, an aggregate initial unpaid principal balance of $1.8 billion, unfunded loan commitments of $0.1 billion, a weighted average interest rate of Term SOFR plus 2.82%, and a weighted average interest rate floor of 2.95%.

•Funded $42.6 million in future funding obligations associated with existing loans.

•Received loan repayments, in whole and in part, of $987.9 million.

•Sold two office properties classified as real estate owned for net proceeds of $39.4 million, resulting in a gain on sale of real estate, net of $7.0 million.

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Investment Portfolio Financing Activity:

•Issued TRTX 2025-FL6, a $1.1 billion managed CRE CLO with $962.5 million of investment-grade bonds outstanding, a 30-month reinvestment period, an advance rate of 87.5%, and a weighted average interest rate at issuance of Term SOFR plus 1.83%, before transaction costs.

•Redeemed all $114.6 million of outstanding investment-grade bonds of TRTX 2019-FL3. Three collateral interests with an aggregate unpaid principal balance of $143.0 million financed therein were refinanced by the issuance of TRTX 2025-FL6.

•Utilized the reinvestment feature in TRTX 2025-FL6 seven times, recycling loan repayments of $331.9 million.

•Extended our secured revolving credit facility by three years to February 2028 and increased the capacity by $85.0 million to $375.0 million, with a syndicate of seven lenders.

•Non-mark-to-market financing comprised 82.0% of total loan portfolio borrowings as of December 31, 2025.

Liquidity:

•Maintained substantial near-term liquidity of $143.0 million, as of December 31, 2025, comprised of:

•$87.6 million of cash-on-hand, of which $72.6 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $21.4 million under secured credit agreements with two lenders, and $30.0 million under other financing arrangements.

•Collateralized loan obligation reinvestment proceeds of $4.0 million.

We have financed our loan investments as of December 31, 2025 utilizing three CRE CLOs totaling $2.6 billion, $591.2 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, $60.2 million under asset-specific financing arrangements, and $31.5 million under our $375.0 million secured revolving credit facility. Additionally, we held unencumbered loan investments with an aggregate unpaid principal balance of $127.1 million that are eligible to pledge under our existing financing arrangements. As of December 31, 2025, 79.2% of our borrowings were pursuant t

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