Investments in Real Estate-Related Loans and Securities

9 Months Ended

Sep. 30, 2025

Real Estate Investments, Net [Abstract]

Investments in Real Estate-Related Loans and Securities

The following table summarizes the components of investments in real estate-related loans and securities as of September 30, 2025 and December 31, 2024 ($ in thousands):


	September 30, 2025		December 31, 2024
Real estate-related securities	$	36,705	$	57,816
Real estate-related loans	170,770		13,587
Derivative assets related to investments in real estate-related securities	186		102
Derivative liabilities related to investments in real estate-related securities	(76)		—
Total investments in real estate-related loans and securities	$	207,585	$	71,505

The following tables detail the Company’s investments in real estate-related loans and securities as of September 30, 2025 and December 31, 2024 ($ in thousands):


	September 30, 2025
Type of Loan/Security	Number of Positions	Weighted Average Coupon(1)	Weighted Average Maturity Date(2)	Face Amount		Cost Basis/Allowance Adjustment (3)		Carrying Amount
Investments held at fair value
CMBS - floating	6	SOFR + 4.24%	November 2026	$	27,838	$	25,773	$	26,535
CMBS - fixed	4	4.56%	November 2026	23,413		20,650		5,302
RMBS - fixed	1	4.50%	May 2026	5,118		4,728		4,868
Real estate-related loans - floating	1	SOFR + 8.00%	December 2025	119,000		119,000		119,000
Interest rate swaps	2	4.40%	September 2026	—				186
Cross currency forward contracts	4	N/A	October 2025	—		—		(76)
Total investments held at fair value	18	10.41%	March 2026	$	175,369	$	170,151	$	155,815

Investments held at amortized cost
Real estate-related loans - floating	1	SOFR + 8.15%	June 2026	$	7,044	$	—	$	7,044
Real estate-related loans - fixed	3	9.92%	November 2027	48,610		(3,884)		44,726
Total investments held at amortized cost	4	10.23%	November 2027	$	55,654	$	(3,884)	$	51,770

Total investments in real estate-related loans and securities	22	10.37%	August 2026	$	231,023	$	166,267	$	207,585


	December 31, 2024
Type of Loan/Security	Number of Positions	Weighted Average Coupon(1)	Weighted Average Maturity Date(2)	Face Amount		Cost Basis/Allowance Adjustment (3)		Carrying Amount
Investments held at fair value
CMBS - floating	7	SOFR+3.85%	July 2026	$	24,794	$	22,667	$	22,361
CMBS - fixed	4	4.56%	November 2026	23,413		20,650		6,238
RMBS - fixed	23	5.54%	September 2026	29,728		28,960		29,217
Interest rate swaps	2	4.40%	September 2026	—		—		102
Total investments held at fair value	36	6.11%	September 2026	$	77,935	$	72,277	$	57,918

Investments held at amortized cost
Real estate-related loans - floating	1	SOFR+8.15%	June 2026	$	7,044	$	—	$	7,044
Real estate-related loans - fixed	2	10.00%	December 2025	9,435		(2,892)		6,543
Total investments held at amortized cost	3	11.13%	February 2026	$	16,479	$	(2,892)	$	13,587

Total investments in real estate-related loans and securities	39	6.98%	August 2026	$	94,414	$	69,385	$	71,505


(1)			As of September 30, 2025 and December 31, 2024, the U.S. Dollar denominated Secured Overnight Financing Rate (“SOFR”) was equal to 4.24% and 4.49%, respectively.
(2)			Weighted average maturity date is based on the fully extended maturity date of the instruments.
(3)			Adjustments include the cumulative provision for current expected credit losses, unamortized fee income, and a foreign currency translation adjustment attributable to real estate-related loans.

During the three and nine months ended September 30, 2025, the Company recorded net realized and unrealized gains on its investments in real estate-related securities of $0.2 million and $0.7 million, respectively. During the three and nine months ended September 30, 2024, the Company recorded net realized and unrealized gains on its investments in real estate-related securities of $2.1 million and $3.5 million, respectively. Such amounts are recorded as components of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations.

For the three and nine months ended September 30, 2025, the Company recognized $0.3 million as an estimated credit loss allowance adjustment related to its investments in real estate-related loans held at amortized cost. For the three months ended September 30, 2024, the Company recognized an estimated credit loss allowance adjustment of $0.1 million. For the nine months ended September 30, 2024, the Company recognized $0.1 million as an allowance recovery for estimated credit loss. Adjustments to the estimated credit loss allowance are recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. The allowance adjustment is related to The Avery Senior Loan and The Avery Mezzanine Loan and is based on the expected timing of loan repayments, forecasted cash flows from the underlying collateral, and the current macroeconomic environment. The Company estimates its credit loss allowance primarily using the discounted cash flow method based on projected future principal cash flows for each individual loan. There have been no write-offs related to the Company’s investment in real estate-related loans.

- Definition

The entire disclosure for investment in mortgage loan on real estate by entity with substantial portion of business acquiring and holding investment real estate or interest in real estate. Includes, but is not limited to, information for each mortgage loan receivable equaling or exceeding 3 percent of carrying amount of mortgage.

+ References + Details

BROOKFIELD REAL ESTATE INCOME TRUST INC. 10-Q