What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-27 compared with 2025-07-28 · 83 added, 87 removed, 315 unchanged (35% of the section changed)

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Factors Affecting Operating Results

Our results of operations are impacted by a number of factors and primarily depend on the interest income from our investments and the financing and other costs associated with our business.

Our operating results are also impacted by general CRE market conditions and unanticipated defaults by our borrowers.

Our results of operations are primarily impacted by general CRE market conditions and unanticipated defaults by our borrowers.

For further information regarding the risks associated with our loan portfolio, see Note 3 to the Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 and elsewhere in this Management Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" of our 2024 Annual Report.

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Market Conditions.

trade and fiscal policy, coupled with ongoing geopolitical tensions, has caused uncertainty in financial markets.

As a result, we believe many CRE investors continue to remain on the sidelines, waiting until they have greater clarity on the outcomes of negotiations with U.S.

trade partners, new tariff announcements, domestic fiscal policy initiatives and the path of interest rates to make buy and sell decisions.

However, the Federal Open Market Committee, or FOMC, has indicated that the U.S.

economy is on solid footing, allowing it to be patient and wait to measure the impact of tariff driven price increases before determining the future path of interest rates.

Despite the current macroeconomic uncertainty, CRE debt markets continue to function well.

The relative risk versus reward in CRE debt investments has led to healthy loan demand from various types of lenders, including banks, securitized lenders, life insurance companies, private debt funds and mortgage REITs.

With fewer sale transactions to finance and strong debt capital market liquidity, borrowers with well-performing collateral properties are benefiting from increased competition amongst lenders, which has driven credit spreads and whole loan rates downward.

trade and fiscal policy, coupled with ongoing geopolitical tensions, has caused increased volatility in financial markets this year, resulting in further uncertainty for commercial real estate investors.

For much of the year, CRE investors were waiting on the outcomes of negotiations with U.S.

trade partners, new tariff announcements, domestic fiscal policy initiatives and the path of interest rates before making buy and sell decisions.

In September, the Federal Open Market Committee, or FOMC, cut interest rates by 25 basis points, lowering the targeted Federal Funds Rate range to 4.00% to 4.25%, its first reduction since December of 2024 and the lowest target since 2022.

Despite key inflation rates running higher than the FOMC target of 2%, there were enough signs of softening in the labor market to support the cut.

Notwithstanding the potential risks of a weakening job market on the commercial and multifamily property sectors, the relative risk versus reward in CRE debt investments today continues to drive demand from lenders, including banks, securitized lenders, life insurance companies, private debt funds and mortgage REITs.

Furthermore, we believe CRE investors’ anticipation of potential future short term interest rate reductions should lead to even greater liquidity and increased transaction volume into 2026.

Changes in Interest Rates.

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Because we generally intend to leverage up to 80% of the amount of our investments, as benchmark rates increase above the floors of our loans, our income from investments, net of interest and related expenses, will increase.

Decreases in benchmark rates are mitigated by interest rate floor provisions in all but one of our loan agreements with borrowers, ranging from 0.25% to 5.20%;

Decreases in benchmark rates are mitigated by interest rate floor provisions in all but one of our loan agreements with borrowers, ranging from 0.25% to 4.00% with a weighted average floor of 2.59%;

therefore, changes to income from investments, net, may not move proportionately with the increase or decrease in benchmark rates.

As of June 30, 2025, SOFR was 4.32%, and as a result, one of our loan investments had an active interest rate floor.

As of September 30, 2025, SOFR was 4.13%, and as a result, none of our loan investments had an active interest rate floor.

Size of Portfolio .

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Our Loan Portfolio

The table below details overall statistics for our loan portfolio as of June 30, 2025 and December 31, 2024:

As of June 30, 2025 As of December 31, 2024

The table below details overall statistics for our loan portfolio as of September 30, 2025 and December 31, 2024:

As of September 30, 2025 As of December 31, 2024

Number of loans 22 21

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Loan Portfolio Details

The table below details our loan portfolio as of June 30, 2025:

The table below details our loan portfolio as of September 30, 2025:

# Location Property Type Origination Date Committed Principal Amount Principal

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5 Oxford, MS Multifamily 11/26/2024 42,000 42,000 S + 2.95% S + 3.30% 11/26/2029 75 % 2

6 New York, NY Mixed Use 09/05/2025 34,500 34,500 S + 3.20% S + 4.03% 09/05/2030 70 % 3

7 San Marcos, TX Multifamily 01/14/2025 31,200 28,228 S + 3.25% S + 3.68% 01/14/2030 62 % 3

7 Farmington Hills, MI Multifamily 05/24/2022 30,520 29,501 S + 3.15% S + 3.56% 05/24/2027 75 % 3

8 Anaheim, CA Hotel 11/29/2023 29,000 29,000 S + 4.00% S + 4.56% 11/29/2028 55 % 2

9 San Antonio, TX Industrial 06/13/2025 28,000 22,800 S + 3.40% S + 3.88% 06/13/2030 62 % 3

10 Fountain Inn, SC Industrial 07/13/2023 27,500 24,300 S + 4.25% S + 4.87% 07/13/2026 76 % 1

10 Plano, TX Office 07/01/2021 27,385 26,569 S + 3.75% S + 3.76% 07/01/2026 78 % 4

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(3) LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing.

As of June 30, 2025, we had $665,421 in aggregate loan commitments, consisting of a diverse portfolio, geographically and by property type, of 23 first mortgage loans.

As of June 30, 2025, we had five loans representing approximately 22% of the amortized cost of our loan portfolio with a loan risk rating of “4” or “higher risk”.

As of September 30, 2025, we had $641,901 in aggregate loan commitments, consisting of a diverse portfolio, geographically and by property type, of 22 first mortgage loans.

As of September 30, 2025, we had five loans representing approximately 23% of the amortized cost of our loan portfolio with a loan risk rating of “4” or “higher risk”.

We have no “5” or “loss likely” rated loans.

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As part of this amendment, the loan commitment was reduced by $3,189, the borrower was required to contribute $2,900 to cash reserves and the maturity date was extended by two years to August 25, 2026.

As of June 30, 2025, this loan had an amortized cost of $43,511 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $43,511 and a risk rating of 4.

In August 2024, we amended the agreement governing our loan secured by an office property in Plano, TX.

As part of this amendment, the coupon rate was reduced from SOFR + 4.75% to SOFR + 3.75% and the maturity date was extended by two years to July 1, 2026.

As of June 30, 2025, this loan had an amortized cost of $26,636 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $26,636 and a risk rating of 4.

In November 2024, we amended the agreement governing our loan secured by an office property in Carlsbad, CA.

As part of this amendment, the borrower was required to contribute $1,100 to cash reserves and the maturity date was extended by two years to October 27, 2026.

As of June 30, 2025, this loan had an amortized cost of $24,414 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $24,414 and a risk rating of 4.

In April 2025, we amended the agreement governing our loan secured by an office property in Bellevue, WA.

As part of this amendment, the borrower was required to contribute $1,625 to cash reserves, the coupon rate was reduced from SOFR + 3.85% to SOFR + 2.85% and the maturity date was extended by three years to April 7, 2028.

As of June 30, 2025, this loan had an amortized cost of $19,999 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $19,999 and a risk rating of 4.

In May 2025, we amended the agreement governing our loan secured by an office property in Downers Grove, IL.

As part of this amendment, the borrower repaid $3,000 of the outstanding principal balance and the maturity date was extended by one year to May 22, 2026.

As of June 30, 2025, this loan had an amortized cost of $26,620 and a risk rating of 4.

As of September 30, 2025, this loan had an amortized cost of $26,630 and a risk rating of 4.

All of the loans in our portfolio are structured with risk mitigation mechanisms, such as cash flow sweeps or interest reserves, to help protect us against investment losses.

In addition, we actively engage with our borrowers regarding their execution of the business plans for the underlying collateral, among other things.

As of June 30, 2025 and July 24, 2025, all of our borrowers had paid their debt service obligations owed and due to us.

We did not have any outstanding past due loans or nonaccrual loans as of June 30, 2025.

As of September 30, 2025 and October 23, 2025, all of our borrowers had paid their debt service obligations owed and due to us.

We did not have any outstanding past due loans or nonaccrual loans as of September 30, 2025.

However, our borrowers' businesses, operations and liquidity may be materially adversely impacted by current inflationary pressures, interest rate fluctuations, supply chain issues or a prolonged economic slowdown or recession could amplify those negative impacts.

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Financing Activities

The table below is an overview of our Secured Financing Facilities as of June 30, 2025:

The table below is an overview of our Secured Financing Facilities as of September 30, 2025:

Facility Maturity Date Principal Balance Carrying Value Unused Capacity Maximum Facility Size Collateral Principal Balance

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Total $ 430,423 $ 429,449 $ 309,577 $ 740,000 $ 614,347

The table below details our Secured Financing Facilities activities during the three months ended June 30, 2025:

The table below details our Secured Financing Facilities activities during the three months ended September 30, 2025:

Carrying Value

Balance at March 31, 2025 $ 440,474

Balance at June 30, 2025 $ 415,999

Borrowings 53,624

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Amortization of deferred fees 378

Balance at June 30, 2025 $ 415,999

The table below details our Secured Financing Facilities activities during the six months ended June 30, 2025:

Balance at September 30, 2025 $ 429,449

The table below details our Secured Financing Facilities activities during the nine months ended September 30, 2025:

Carrying Value

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Amortization of deferred fees 1,127

Balance at June 30, 2025 $ 415,999

As of June 30, 2025, outstanding advancements under our Secured Financing Facilities had a weighted average interest rate of 6.51% per annum, excluding associated fees and expenses.

As of June 30, 2025 and July 24, 2025, we had a $417,215 and $381,853, respectively, aggregate outstanding principal balance under our Secured Financing Facilities.

As of June 30, 2025, we were in compliance with all covenants and other terms under our Secured Financing Facilities.

Balance at September 30, 2025 $ 429,449

As of September 30, 2025, outstanding advancements under our Secured Financing Facilities had a weighted average interest rate of 6.30% per annum, excluding associated fees and expenses.

As of September 30, 2025 and October 23, 2025, we had a $430,423 aggregate outstanding principal balance under our Secured Financing Facilities.

As of September 30, 2025, we were in compliance with all covenants and other terms under our Secured Financing Facilities.

For further information regarding our Secured Financing Facilities, see Note 5 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS (amounts in thousands, except per share data)

Three Months Ended June 30, 2025 Compared to Three Months Ended March 31, 2025:

Three Months Ended September 30, 2025 Compared to Three Months Ended June 30, 2025:

Three Months Ended

June 30, 2025 March 31, 2025 Change % Change

September 30, 2025 June 30, 2025 Change % Change

INCOME FROM INVESTMENTS:

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Base management fees 1,076 1,076 — — %

Incentive fees 229 18 211 n/m

Incentive fees 337 229 108 47.2 %

General and administrative expenses 1,295 1,381 (86) (6.2 %)

Reimbursement of shared services expenses 357 551 (194) (35.2 %)

Provision for (reversal of) credit losses 912 (153) 1,065 696.1 %

Provision for credit losses 37 912 (875) (95.9 %)

Expenses from real estate owned 562 569 (7) (1.2 %)

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Income before income taxes 3,428 2,675 753 28.1 %

Income tax benefit (expense) 3 (11) 14 127.3 %

Income tax benefit 2 3 (1) (33.3 %)

Net income $ 3,430 $ 2,678 $ 752 28.1 %

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Interest and related income .

The increase in interest and related income was primarily due to higher deferred fee amortization, partially offset by a decrease in the weighted average coupon rates during the three months ended June 30, 2025.

The weighted average coupon rate was 8.03% as of June 30, 2025 compared to 8.07% as of March 31, 2025.

The decrease in interest and related income was primarily due to higher net loan repayment activity and lower weighted average coupon rates during the three months ended September 30, 2025.

The weighted average principal balance of our loan investments was approximately $595,000 for the three months ended September 30, 2025 compared to approximately $641,000 for the three months ended June 30, 2025.

The weighted average coupon rate was 7.85% as of September 30, 2025 compared to 8.03% as of June 30, 2025.

Interest and related expenses.

The increase in interest and related expenses was primarily the result of a higher average principal balance outstanding under our Secured Financing Facilities and higher deferred fee amortization, partially offset by a decrease in the weighted average coupon rates during the three months ended June 30, 2025.

The weighted average principal balance was approximately $433,000 for the three months ended June 30, 2025 compared to approximately $432,000 for the three months ended March 31, 2025.

The weighted average coupon rate was 6.51% as of June 30, 2025 compared to 6.52% as of March 31, 2025.

The decrease in interest and related expenses was primarily the result of a lower average principal balance outstanding under our Secured Financing Facilities and lower weighted average coupon rates during the three months ended September 30, 2025.

The weighted average principal balance was approximately $399,000 for the three months ended September 30, 2025 compared to approximately $433,000 for the three months ended June 30, 2025.

The weighted average coupon rate was 6.30% as of September 30, 2025 compared to 6.51% as of June 30, 2025.

Revenue from real estate owned.

Revenue from real estate owned represents revenue from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023.

The decrease in revenue from real estate owned was primarily due to lower operating expense reimbursements during the three months ended June 30, 2025 as compared to the three months ended March 31, 2025.

The increase in revenue from real estate owned was primarily due to higher operating expense reimbursements during the three months ended September 30, 2025 as compared to the three months ended June 30, 2025.

Incentive fees.

We recognize management incentive fees payable to Tremont in accordance with our management agreement.

The increase in management incentive fees was due to the incentive fee for the 12 month period ended June 30, 2025 exceeding the fee paid for the previous three calendar quarters by a higher margin, as compared to the fee for the 12 month period ended March 31, 2025.

The increase in management incentive fees was due to the incentive fee for the 12 month period ended September 30, 2025 exceeding the fee paid for the previous three calendar quarters by a higher margin, as compared to the fee for the 12 month period ended June 30, 2025.

General and administrative expenses .

The increase in general and administrative expenses was primarily due to an increase in share based compensation resulting from shares awarded to our trustees during the three months ended June 30, 2025.

The decrease in general and administrative expenses was primarily due to a decrease in share based compensation resulting from shares awarded to our Trustees during the three months ended June 30, 2025.

Reimbursement of shared services expenses.

Reimbursement of shared services expenses represents reimbursement of the costs for the services that Tremont arranges on our behalf from RMR.

Provision for (reversal of) credit losses.

The provision for (reversal of) credit losses represents the change in the allowance for credit losses on our loan portfolio and unfunded commitments.

The increase in the allowance for credit losses during the three months ended June 30, 2025 was primarily attributable to unfavorable CRE pricing forecasts used in our CECL model and extensions for certain of our loans, partially offset by loan repayments.

The decrease in reimbursement of shared services expenses was primarily the result of an adjustment to our estimate of the costs for the usage of shared services from RMR.

Provision for credit losses.

The provision for credit losses represents the change in the allowance for credit losses on our loan portfolio and unfunded commitments.

The increase in the allowance for credit losses during the three months ended September 30, 2025 was primarily attributable to decreased net operating income for the collateral securing certain of our loans, partially offset by loans nearing maturity and loan repayments.

Expenses from real estate owned.

Expenses from real estate owned represent expenses from the operations of an office property located in Yardley, PA that was transferred to real estate owned through a deed in lieu of foreclosure in June 2023.

The decrease in expenses from real estate owned was primarily due to lower utility expenses during the three months ended June 30, 2025 as compared to the three months ended March 31, 2025.

Income tax benefit (expense).

Income tax expense represents income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes.

The decrease in net income was due to the changes noted above.

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

Six Months Ended June 30,

Income tax benefit (expense) represents income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes.

The increase in net income was due to the changes noted above.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024:

Nine Months Ended September 30,

2025 2024 Change % Change

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Interest and related income .

The decrease in interest and related income was primarily the result of lower weighted average coupon rates under our loan investment portfolio, partially offset by higher outstanding principal balances during the six months ended June 30, 2025.

The weighted average coupon rate was 8.03% as of June 30, 2025 compared to 9.11% as of June 30, 2024.

The weighted average principal balance was approximately $642,000 for the six months ended June 30, 2025 compared to approximately $607,000 for the six months ended June 30, 2024.

The decrease in interest and related income was primarily due to lower weighted average coupon rates, partially offset by higher principal balances outstanding during the nine months ended September 30, 2025.

The weighted average coupon rate was 7.85% as of September 30, 2025 compared to 8.89% as of September 30, 2024.

The weighted average principal balance of our loan investments was approximately $626,000 for the nine months ended September 30, 2025 compared to approximately $598,000 for the nine months ended September 30, 2024.

Purchase discount accretion.

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Interest and related expenses.

The decrease in interest and related expenses was primarily the result of lower weighted average coupon rates under our Secured Financing Facilities, partially offset by higher outstanding principal balances during the six months ended June 30, 2025.

The weighted average coupon rate was 6.51% as of June 30, 2025 compared to 7.48% as of June 30, 2024.

The weighted average principal balance was approximately $432,000 for the six months ended June 30, 2025 compared to approximately $431,000 for the six months ended June 30, 2024.

The decrease in interest and related expenses was primarily the result of a lower weighted average coupon rates during the nine months ended September 30, 2025.

The weighted average coupon rate was 6.30% as of September 30, 2025 compared to 7.25% as of September 30, 2024.

Revenue from real estate owned.

The increase in revenue from real estate owned was primarily due to higher operating expense reimbursements during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The increase in revenue from real estate owned was primarily due to higher operating expense reimbursements during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Incentive fees.

We recognize management incentive fees payable to Tremont in accordance with our management agreement.

The decrease in management incentive fees was due to lower “core earnings”, as defined in our management agreement, during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The decrease in management incentive fees was due to lower “core earnings”, as defined in our management agreement, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

General and administrative expenses .

The increase in general and administrative expenses was primarily due to an increase in share based compensation resulting from shares awarded to our trustees during the six months ended June 30, 2025.

The increase in general and administrative expenses was primarily due to an increase in share based compensation resulting from shares awarded to our trustees and legal and professional fees during the nine months ended September 30, 2025.

Reimbursement of shared services expenses.

Reimbursement of shared services expenses represents reimbursement of the costs for the services that Tremont arranges on our behalf from RMR.

The decrease in reimbursement of shared services expenses was primarily the result of lower usage of shared services from RMR during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The decrease in reimbursement of shared services expenses was primarily the result of lower usage of shared services from RMR during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Provision for credit losses.

The provision for credit losses represents the change in the allowance for credit losses on our loan portfolio and unfunded commitments.

The decrease in the provision for credit losses during the six months ended June 30, 2025 was primarily attributable to improved performance at certain of the collateral properties underlying our loans, partially offset by higher total loan commitments during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The increase in the allowance for credit losses during the nine months ended September 30, 2025 was primarily attributable to increased provisions for our office loans, partially offset by loans nearing maturity and loan repayments.

Expenses from real estate owned.

The decrease in expenses from real estate owned was primarily due to decreases in maintenance expenses, partially offset by higher utility expenses during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The decrease in expenses from real estate owned was primarily due to decreases in maintenance, depreciation and amortization expenses, partially offset by higher utility expenses during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Income tax expense.

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Adjusted Book Value per Common Share

We believe that Adjusted Book Value per common share is a meaningful measure of our capital adequacy because it excludes the impact of certain non-cash estimates or adjustments, including the unaccreted purchase discount resulting from the excess of the fair value of the loans Tremont Mortgage Trust then held for investment and that we acquired as a result of the Merger, over the consideration we paid in the Merger and our allowance for credit losses for our loan portfolio and unfunded loan commitments.

Adjusted Book Value per common share does not represent book value per common share or alternative measures determined in accordance with GAAP.

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The table below calculates our book value per common share and Adjusted Book Value per common share, which is a non-GAAP financial measure:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Shareholders' equity $ 266,481 $ 269,278

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(1) Excludes the impact of our allowance for credit losses.

As of June 30, 2025 and December 31, 2024, our allowance for credit losses for our loan portfolio and unfunded loan commitments was $9,667 and $8,908, respectively.

As of September 30, 2025 and December 31, 2024, our allowance for credit losses for our loan portfolio and unfunded loan commitments was $9,704 and $8,908, respectively.

Distributable Earnings

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The table below demonstrates how we calculate Distributable Earnings and Distributable Earnings per common share, which are non-GAAP financial measures, and provides a reconciliation of these non-GAAP financial measures to net income:

Three Months Ended Six Months Ended

June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 June 30, 2025 September 30, 2025 September 30, 2024

Net income $ 3,430 $ 2,678 $ 10,640 $ 12,941

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Non-cash accretion of purchase discount — — — (2,347)

Provision for (reversal of) credit losses 912 (153) 759 2,012

Provision for credit losses 37 912 796 3,530

Depreciation and amortization of real estate owned 278 269 816 969

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The table below is a summary of our sources and uses of cash flows for the periods presented:

Six Months Ended June 30,

Nine Months Ended September 30,

Cash and cash equivalents at beginning of period $ 70,750 $ 87,855

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Cash and cash equivalents at end of period $ 77,495 $ 82,197

The decrease in cash provided by operating activities for the 2025 period compared to the 2024 period was primarily due to lower net interest income resulting from lower weighted average interest rates under our loan investment portfolio.

The change from cash provided by to cash used in investing activities was primarily due to increased loan originations in the 2025 period.

The change from cash provided by investing activities to cash used in investing activities was primarily due to increased loan originations in the 2025 period.

The decrease in cash used in financing activities was primarily due to increased proceeds from our Secured Financing Facilities in the 2025 period.

Distributions

During the six months ended June 30, 2025, we declared and paid regular quarterly distributions to our common shareholders totaling $10,433, or $0.70 per common share, using cash on hand.

On July 10, 2025, we declared a reduced regular quarterly distribution of $0.28 per common share, or $4,184, to shareholders of record on July 21, 2025.

The reduced quarterly distribution reflects a sustainable rate with expectations that loan repayment proceeds will be redeployed at lower net interest margins and a declining SOFR index rate curve.

We expect to pay this distribution to our common shareholders on or about August 14, 2025 using cash on hand.

During the nine months ended September 30, 2025, we declared and paid regular quarterly distributions to our common shareholders totaling $14,617, or $0.98 per common share, using cash on hand.

On October 9, 2025, we declared a regular quarterly distribution of $0.28 per common share, or $4,218, to shareholders of record on October 27, 2025.

We expect to pay this distribution to our common shareholders on or about November 13, 2025 using cash on hand.

For further information regarding distributions, see Note 7 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of June 30, 2025 were as follows:

Our contractual obligations and commitments as of September 30, 2025 were as follows:

Payment Due by Period

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(2) The allocation of outstanding advancements under our Secured Financing Facilities is based on the earlier of the current maturity date of each loan investment with respect to which the individual borrowing relates or the maturity date of the respective Secured Financing Facilities.

(3) Projected interest payments are attributable only to our debt service obligations at existing rates as of June 30, 2025 and are not intended to estimate future interest costs which may result from debt prepayments, additional borrowings, new debt issuances or changes in interest rates.

(3) Projected interest payments are attributable only to our debt service obligations at existing rates as of September 30, 2025 and are not intended to estimate future interest costs which may result from debt prepayments, additional borrowings, new debt issuances or changes in interest rates.

(4) Lease related costs include capital expenditures used to improve tenants' spaces pursuant to lease agreements or leasing related costs, such as brokerage commissions, related to real estate owned.

Debt Covenants

Our principal debt obligations as of June 30, 2025 were the outstanding balances under our Secured Financing Facilities.

Our principal debt obligations as of September 30, 2025 were the outstanding balances under our Secured Financing Facilities.

The agreements governing our Master Repurchase Facilities, or our Master Repurchase Agreements, provide for acceleration of the date of repurchase of any then purchased assets and the liquidation of the purchased assets by UBS, Citibank or Wells Fargo, as applicable, upon the occurrence and continuation of certain events of default, including a change of control of us, which includes Tremont ceasing to act as our sole manager or to be a wholly owned subsidiary of RMR.

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Our BMO Loan Program Agreement provides for acceleration of all payment obligations due under the BMO Facility Loan Agreements upon the occurrence and continuation of certain events of default, including a change of control of us, which includes Tremont ceasing to act as our sole manager or to be a wholly owned subsidiary of RMR.

As of June 30, 2025, we had a $345,010 aggregate outstanding principal balance under our Master Repurchase Facilities.

As of September 30, 2025, we had a $353,165 aggregate outstanding principal balance under our Master Repurchase Facilities.

Our Master Repurchase Agreements are structured with risk mitigation mechanisms, including a cash flow sweep, which would allow UBS, Citibank and Wells Fargo, as applicable, to control interest payments from our borrowers under our loans that are financed under our respective Master Repurchase Facilities, and the ability to accelerate dates of repurchase and institute margin calls, which may require us to pay down balances associated with one or more of our loans that are financed under our Master Repurchase Facilities.

As of June 30, 2025, we had a $72,205 aggregate outstanding principal balance under the BMO Facility.

As of June 30, 2025, we were in compliance with all covenants and other terms under our Secured Financing Facilities.

As of September 30, 2025, we had a $77,258 aggregate outstanding principal balance under the BMO Facility.

As of September 30, 2025, we were in compliance with all covenants and other terms under our Secured Financing Facilities.

Related Person Transactions

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis