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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

FORM 10-Q

_______________________________________________


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-56564

Invesco Commercial Real Estate Finance Trust, Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________


Maryland						92-1080856
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

2300 N Field Street, Suite 1200 Dallas, Texas						75201
(Address of principal executive offices)						(Zip Code)

(972) 715-7400

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act: None

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2025, there were 36,337,282 outstanding shares of common stock of Invesco Commercial Real Estate Finance Trust, Inc. comprised of 1,374,472 Class S common stock, 16,110,555 Class S-1 common stock, 1,208,198 Class D common stock, 7,477,399 Class I common stock, 1,576,616 Class E common stock, and 8,590,042 Class F common stock.

Invesco Commercial Real Estate Finance Trust, Inc.

Table of Contents


		Page
PART I FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	1

	Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024	2

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Common Stock for the three and six months ended June 30, 2025 and 2024	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46

Item 4.	Controls and Procedures	49

PART II OTHER INFORMATION		50

Item 1.	Legal Proceedings	50

Item 1A.	Risk Factors	50

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	50

Item 3.	Defaults Upon Senior Securities	51

Item 4.	Mine Safety Disclosures	51

Item 5.	Other Information	51

Item 6.	Exhibits	52

SIGNATURES

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Invesco Commercial Real Estate Finance Trust, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


$ in thousands except share amounts	June 30, 2025		December 31, 2024
ASSETS
Commercial real estate loan investments, at fair value (including pledged loans of $3,528,119 and $2,355,509, respectively)	$	3,550,378	$	2,391,078
Real estate-related securities, at fair value	9,763		—
Cash and cash equivalents	100,859		80,221
Restricted cash	23,058		19,813
Interest receivable	15,204		12,600

Derivative assets, at fair value	—		4,064
Other assets	1,329		418
Total assets(1)	$	3,700,591	$	2,508,194

LIABILITIES
Secured lending agreements, at fair value	$	1,679,778	$	1,720,350
Term lending agreement, at fair value	147,732		134,518
Collateralized loan obligations, at fair value	1,001,129		—

Interest payable	8,851		8,344
Derivative liabilities, at fair value	3,590		—

Dividends and distributions payable (including $791 and $961 due to related party, respectively)	5,033		3,765
Accounts payable, accrued expenses and other liabilities	25,863		23,159
Due to affiliates	37,973		31,342
Total liabilities(1)	2,909,949		1,921,478

Commitments and contingencies (See Note 14)

Redeemable common stock - related party (see Note 11)	$	125,200	$	151,367

STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized:
12.5% Series A Cumulative Redeemable Preferred Stock, — and 228 shares issued and outstanding, respectively ($228 aggregate liquidation preference as of December 31, 2024)	—		205
Common stock, Class S shares, $0.01 par value per share, 500,000,000 shares authorized	2		—
Common stock, Class S-1 shares, $0.01 par value per share, 500,000,000 shares authorized	139		72
Common stock, Class D shares, $0.01 par value per share, 500,000,000 shares authorized	—		—
Common stock, Class D-1 shares, $0.01 par value per share, 500,000,000 shares authorized	—		—
Common stock, Class I shares, $0.01 par value per share, 500,000,000 shares authorized	53		27
Common stock, Class E shares, $0.01 par value per share, 500,000,000 shares authorized	1		1
Common stock, Class F shares, $0.01 par value per share, 500,000,000 shares authorized	85		82
Additional paid-in capital	686,368		448,947
Accumulated other comprehensive income (loss)	84		(65)
Accumulated deficit	(21,290)		(13,920)
Total stockholders’ equity	665,442		435,349
Total liabilities, redeemable common stock and stockholders’ equity	$	3,700,591	$	2,508,194

(1) The condensed consolidated balance sheet at June 30, 2025 includes assets of $1.2 billion and liabilities of $1.0 billion of a consolidated collateralized loan obligation, which is a variable interest entity (“VIE”). The VIE’s assets can only be used to settle the obligations of the VIE. See Note 6, “Collateralized Loan Obligations”, for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Invesco Commercial Real Estate Finance Trust, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands except share and per share amounts	2025		2024		2025		2024
Net Interest Income
Commercial real estate loan interest income	$	55,221	$	20,415	$	102,062	$	35,555
Real estate related-securities interest income	50		—		50		—
Other interest income	1,059		587		2,034		828
Interest expense	(37,323)		(13,843)		(68,620)		(24,249)
Net interest income	19,007		7,159		35,526		12,134

Other Income (Expense)
Unrealized gain (loss) on loans, net	26,414		285		39,094		1,203
Unrealized gain (loss) on real estate-related securities, net	20		—		20		—
Unrealized gain (loss) on secured financing facilities, net	(20,681)		(199)		(29,155)		(922)
Unrealized gain (loss) on collateralized loan obligations, net	(5,153)		—		(5,153)		—
Gain (loss) on derivative instruments, net	(5,362)		—		(7,542)		—
Gain (loss) on foreign currency transactions, net	(117)		—		(108)		—
Commitment fee income, net of related party expense of $3,246, $5,365, $2,120 and $3,518 for the three and six months ended June 30, 2025 and 2024, respectively	3,459		2,120		5,578		3,518
Other income	290		249		579		350
Total other income (expense), net	(1,130)		2,455		3,313		4,149

Expenses
Management and performance fees - related party	1,838		952		3,668		1,302
Debt issuance and other financing costs related to borrowings, at fair value	5,478		3,221		10,394		3,690
Organizational costs	—		14		2		19
General and administrative	2,274		1,800		4,824		2,958
Total expenses	9,590		5,987		18,888		7,969

Net income (loss)	8,287		3,627		19,951		8,314
Dividends to preferred stockholders	—		(7)		(2)		(14)
Issuance and redemption costs of redeemed preferred stock	—		—		(27)		—
Net income (loss) attributable to common stockholders	$	8,287	$	3,620	$	19,922	$	8,300

Net income (loss)	$	8,287	$	3,627	$	19,951	$	8,314
Currency translation adjustment	123		—		149		—
Comprehensive income (loss)	8,410		3,627		20,100		8,314
Dividends to preferred stockholders	—		(7)		(2)		(14)
Issuance and redemption costs of redeemed preferred stock	—		—		(27)		—
Comprehensive income (loss) attributable to common stockholders	$	8,410	$	3,620	$	20,071	$	8,300

Earnings (loss) per share:
Net income (loss) attributable to common stockholders
Basic	$	0.26	$	0.34	$	0.68	$	0.93
Diluted	$	0.26	$	0.34	$	0.68	$	0.93
Weighted average number of shares of common stock
Basic	31,307,099		10,729,623		29,281,449		8,956,409
Diluted	31,307,126		10,729,651		29,281,501		8,956,715

The accompanying notes are an integral part of these condensed consolidated financial statements.

Invesco Commercial Real Estate Finance Trust, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Common Stock

(Unaudited)


	Series A Preferred Stock		Class S Common Stock		Class S-1 Common Stock		Class D Common Stock		Class D-1 Common Stock		Class I Common Stock		Class E Common Stock		Class F Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)		Total Stockholders' Equity		Redeemable Common Stock
$ in thousands
Balance as of December 31, 2024	$	205	$	—	$	72	$	—	$	—	$	27	$	1	$	82	$	448,947	$	(65)	$	(13,920)	$	435,349	$	151,367
Net income (loss)	—		—		—		—		—		—		—		—		—		—		11,664		11,664		—

Proceeds from issuance of common stock, net of offering costs	—		—		33		—		—		11		—		—		105,624		—		—		105,668		—
Proceeds from issuance of redeemable common stock	—		—		—		—		—		—		—		—		—		—		—		—		2,814
Common stock distribution reinvestment	—		—		1		—		—		—		—		2		7,565		—		—		7,568		—
Common stock dividends	—		—		—		—		—		—		—		—		—		—		(12,943)		(12,943)		—
Preferred stock dividends	—		—		—		—		—		—		—		—		—		—		(2)		(2)		—
Amortization of equity based compensation	—		—		—		—		—		—		—		—		19		—		—		19		—
Repurchase of common stock	—		—		—		—		—		—		—		—		(754)		—		—		(754)		—
Repurchase of redeemable common stock	—		—		—		—		—		—		—		—		—		—		—		—		(30,000)
Redemption of preferred stock	(205)		—		—		—		—		—		—		—		—		—		(27)		(232)		—
Foreign currency translation adjustment	—		—		—		—		—		—		—		—		—		26		—		26		—
Adjustment to the carrying value of redeemable common stock	—		—		—		—		—		—		—		—		(160)		—		—		(160)		160
Balance as of March 31, 2025	$	—	$	—	$	106	$	—	$	—	$	38	$	1	$	84	$	561,241	$	(39)	$	(15,228)	$	546,203	$	124,341
Net income (loss)	—		—		—		—		—		—		—		—		—		—		8,287		8,287		—

Proceeds from issuance of common stock, net of offering costs	—		2		32		—		—		15		—		—		118,759		—		—		118,808		—
Proceeds from issuance of redeemable common stock	—		—		—		—		—		—		—		—		—		—		—		—		1,062
Common stock distribution reinvestment	—		—		1		—		—		1		—		1		8,667		—		—		8,670		—
Common stock dividends	—		—		—		—		—		—		—		—		—		—		(14,349)		(14,349)		—

Amortization of equity based compensation	—		—		—		—		—		—		—		—		43		—		—		43		—
Repurchase of common stock	—		—		—		—		—		(1)		—		—		(2,397)		—		—		(2,398)		—
Repurchase of redeemable common stock	—		—		—		—		—		—		—		—		—		—		—		—		(148)
Foreign currency translation adjustment	—		—		—		—		—		—		—		—		—		123		—		123		—
Adjustment to the carrying value of redeemable common stock	—		—		—		—		—		—		—		—		55		—		—		55		(55)
Balance as of June 30, 2025	$	—	$	2	$	139	$	—	$	—	$	53	$	1	$	85	$	686,368	$	84	$	(21,290)	$	665,442	$	125,200

The accompanying notes are an integral part of these condensed consolidated financial statements.

Invesco Commercial Real Estate Finance Trust, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Common Stock

(Unaudited)


	Series A Preferred Stock		Class S Common Stock		Class S-1 Common Stock		Class D Common Stock		Class D-1 Common Stock		Class I Common Stock		Class E Common Stock		Class F Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)		Total Stockholders' Equity		Redeemable Common Stock
$ in thousands
Balance at December 31, 2023	$	205	$	—	$	11	$	—	$	—	$	3	$	—	$	—	$	32,549	$	—	$	(7,296)	$	25,472	$	105,340
Net income (loss)	—		—		—		—		—		—		—		—		—		—		4,687		4,687		—

Proceeds from issuance of common stock, net of offering costs	—		—		14		—		—		7		1		—		52,949		—		—		52,971		—

Common stock distribution reinvestment	—		—		—		—		—		—		—		—		773		—		—		773		—

Common stock dividends	—		—		—		—		—		—		—		—		—		—		(6,311)		(6,311)		—
Preferred stock dividends	—		—		—		—		—		—		—		—		—		—		(7)		(7)		—
Amortization of equity based compensation	—		—		—		—		—		—		—		—		17		—		—		17		—

Balance at March 31, 2024	$	205	$	—	$	25	$	—	$	—	$	10	$	1	$	—	$	86,288	$	—	$	(8,927)	$	77,602	$	105,340
Net income (loss)	—				—		—		—		—		—		—		—		—		3,627		3,627		—

Issuance of common stock, net of offering costs	—		—		13		—		—		5		—		47		161,565		—		—		161,630		—
Issuance of redeemable common stock	—		—		—		—		—		—		—		—		—		—		—		—		145
Common stock distribution reinvestment	—		—		1		—		—		—		—		—		2,635		—		—		2,636		—
Common stock dividends	—		—		—		—		—		—		—		—		—		—		(7,249)		(7,249)		—
Preferred stock dividends	—		—		—		—		—		—		—		—		—		—		(7)		(7)		—
Amortization of equity based compensation	—		—		—		—		—		—		—		—		20		—		—		20		—
Repurchase of common stock	—		—		—		—		—		—		—		—		(29)		—		—		(29)		—
Repurchase of redeemable common stock	—		—		—		—		—		—		—		—		—		—		—		—		(100,000)
Adjustment to the carrying value of redeemable common stock	—		—		—		—		—		—		—		—		(175)		—		—		(175)		175
Balance at June 30, 2024	$	205	$	—	$	39	$	—	$	—	$	15	$	1	$	47	$	250,304	$	—	$	(12,556)	$	238,055	$	5,660

The accompanying notes are an integral part of these condensed consolidated financial statements.

Invesco Commercial Real Estate Finance Trust, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30, 2025		Six Months Ended June 30, 2024
$ in thousands

Cash flows from operating activities:
Net income (loss)	$	19,951	$	8,314
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Unrealized (gain) loss on loans, net	(39,094)		(1,203)
Unrealized (gain) loss on real estate-related securities, net	(20)		—
Unrealized (gain) loss on secured financing facilities, net	29,155		922
Unrealized (gain) loss on collateralized loan obligations, net	5,153		—
(Gain) loss on derivative instruments, net	7,542		—

Debt issuance costs	8,732		2,090

Amortization of equity based compensation and other	300		37
Change in operating assets and liabilities:
Increase in operating assets	(3,441)		(1,763)
(Increase) decrease in due from affiliates	—		(675)
(Decrease) increase in operating liabilities	(392)		2,341
(Decrease) increase in due to affiliate	2,836		8,463
Net cash provided by operating activities	30,722		18,526
Cash flows from investing activities:
Originations and fundings of commercial real estate loans	(1,120,159)		(506,304)
Purchase of real estate-related securities	(9,794)		—
Principal payments on real estate-related securities	51		—
Settlement of foreign currency forward contracts, net	113		—
Net cash used in investing activities	(1,129,789)		(506,304)
Cash flows from financing activities:
Proceeds from revolving credit facility	135,000		192,000
Repayment of revolving credit facility	(135,000)		(196,000)
Proceeds from secured financing facilities	822,048		439,447
Repayment of secured financing facilities	(878,561)		(48,476)
Proceeds from issuance of collateralized loan obligations	995,738		—
Proceeds from issuance of common stock, net of offering costs	212,363		194,465


Repurchase of common stock	(3,023)		—
Repurchase of redeemable common stock	(30,148)		(100,000)
Redemption of preferred stock	(232)		—
Proceeds from subscriptions paid in advance	22,776		9,927

Cash paid for debt issuance costs	(8,263)		(1,326)
Payments of dividends	(9,788)		(11,704)
Net cash provided by financing activities	1,122,910		478,333
Effect of exchange rate changes on cash, cash equivalents and restricted cash	40		—
Net change in cash, cash equivalents and restricted cash	23,883		(9,445)
Cash, cash equivalents and restricted cash, beginning of period	100,034		25,541
Cash, cash equivalents and restricted cash, end of period	$	123,917	$	16,096





Supplemental disclosures:
Interest paid	$	67,875	$	23,464
Non-cash investing and financing activities:
Dividends and distributions declared not paid	$	5,033	$	1,599
Common stock distribution reinvestment	$	16,238	$	3,409
Issuance of redeemable common stock for payment of management and performance fees	$	3,876	$	145
Accrued common stock repurchases	$	184	$	29
Deferred offering costs due to affiliate	$	—	$	(78)
Offering costs due to affiliates	$	7,671	$	3,352

Debt issuance costs due to affiliate	$	—	$	685
Adjustment to carrying value of redeemable common stock	$	105	$	175

The accompanying notes are an integral part of these condensed consolidated financial statements.

Invesco Commercial Real Estate Finance Trust, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.Organization and Business Purpose

Invesco Commercial Real Estate Finance Trust, Inc. (the “Company” or “we”) is a Maryland corporation incorporated in October 2022. Our primary investment strategy is to originate, acquire and manage a diversified portfolio of loans and debt-like preferred equity interests secured by, or unsecured but related to, commercial real estate. We commenced investing activities in May 2023. We own substantially all of our assets through Invesco Commercial Real Estate Finance Investments, L.P. (the “Operating Partnership”), a wholly-owned subsidiary. We are externally managed by Invesco Advisers, Inc. (the “Adviser”), a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd. (“Invesco”), an independent global investment management firm.

We qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2023. We have one operating segment. We operate our business in a manner that permits our exclusion from the definition of an “Investment Company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

We are structured as a perpetual-life REIT and are engaging in a continuous, unlimited private placement offering of our common stock to “accredited investors” (as defined by Rule 501 promulgated pursuant to the Securities Act) (the “Continuous Offering”) under exemptions provided by Section 4(a)(2) of the Securities Act and applicable state securities laws. The Class S, Class S-1, Class D, Class D-1, Class I, and Class E shares sold in our Continuous Offering have different upfront selling commissions, ongoing stockholder servicing fees, management fees and performance fees.

2.Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Certain disclosures included in our Annual Report on Form 10-K are not required to be included on an interim basis in our quarterly reports on Form 10-Q. We have condensed or omitted these disclosures. Therefore, this Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024.

Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and consolidate the financial statements of the Company and its controlled subsidiaries. In determining whether we have a controlling financial interest in a partially owned entity, we consider whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. We are the primary beneficiary of a VIE when we have both the power to direct the most significant activities impacting the economic performance of the VIE and the obligation to absorb losses or receive benefits significant to the VIE. See additional information on our VIEs in Note 6— “Collateralized Loan Obligations.” All significant intercompany transactions, balances, revenues and expenses are eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for a fair statement of our financial condition and results of operations for the periods presented.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Examples of estimates may include, but are not limited to, estimates of the fair values of financial instruments and estimated payment periods for certain stockholder servicing fee liabilities. Actual results may differ from those estimates.

Significant Accounting Policies

With the exception of the below, there have been no changes to our accounting policies included in Note 2 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2024.

Cash and Cash Equivalents

We consider all highly liquid investments that have original or remaining maturity dates of three months or less when purchased to be cash equivalents. Certain cash balances may be held in brokerage accounts that also hold our securities investments and may be swept into money market funds that meet the criteria for classification as cash equivalents. Cash and cash equivalents are carried at cost, which approximates fair value due to the highly liquid and short-term nature of these instruments. We may have cash balances in excess of federally insured amounts. We mitigate our risk of loss by maintaining cash deposits with high credit-quality institutions and by actively monitoring the credit risk of our counterparties.

Income Taxes

We elect to treat certain of our corporate subsidiaries as taxable REIT subsidiaries (“TRS”) which are subject to federal, state and local corporate income tax, as applicable. TRSs hold investments in assets, income streams, operating companies and associated expenses that produce non-qualifying items for purposes of REIT testing. Current income tax expense is recorded within other income (expense) on our condensed consolidated statements of comprehensive income. Deferred tax assets, and any valuation allowances, or deferred tax liabilities are recorded within other assets or other liabilities, as applicable, on our condensed consolidated balance sheets. For both the three and six months ended June 30, 2025, tax expense and related balances were not material.

Fair Value Measurement

We have elected the fair value option for our commercial real estate loan investments, real estate-related securities, secured lending and term lending agreements (collectively, our secured financing facilities), our revolving credit facility, and our collateralized loan obligations (“CLO”). The Company believes the fair value option will provide its financial statements users with reduced complexity, greater consistency, understandability and comparability.

In the month that we originate or acquire a loan, we value our commercial real estate loan investments at fair value, which approximates par. Thereafter, an independent valuation advisor values our commercial loan investments monthly using a discounted cash flow analysis. The yield used in the discounted cash flow analysis is determined by comparing the features of the loan to the interest rates and terms required by lenders in the new loan origination market for similar loans and the yield required by investors acquiring similar loans in the secondary market as well as a comparison of current market and collateral conditions to those present at origination or acquisition. The Company elected to apply the measurement alternative for consolidated collateralized financing entities with respect to its managed CLO. Accordingly, commercial real estate loans and loan participations that are collateral assets within the consolidated CLO are measured using the fair value of the more observable CLO notes as an indicator of the fair value of the CLO assets as a whole.

In determining the fair value of a particular real estate-related security, we use pricing service providers, who may may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for securities such as real estate-related securities generally consider the attributes applicable to a particular class of the security (e.g., credit rating or seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available.

In the month that we enter into a borrowing arrangement, we value our revolving credit facility and secured financing facilities at fair value, which approximates par. Thereafter, an independent valuation advisor values our revolving credit facility and secured financing facilities monthly. The independent valuation advisor calculates the fair value of the revolving credit facility based on a determination of the price that would be paid by another market participant to assume the lender’s position in the transaction. The fair value of secured financing facilities is calculated using a discounted cash flow analysis where the remaining debt service cash flow, based on the contractual economics stated in the loan agreement, is valued using a market interest rate which reflects an estimate for how a lender would price an equivalent loan for the remaining term. Additionally, we consider current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The market rate of interest is adjusted to reflect our own credit risk for recourse borrowings.

We generally determine the fair value of the collateralized loan obligations by utilizing third party pricing services and broker-dealer quotations. We conduct an ongoing evaluation of their valuation methodologies and processes and review the individual valuations themselves. Our review consists of consideration of a variety of factors, including market transaction information for the particular bond, market transaction information for similar bonds, the bond’s ratings and the bond’s subordination levels.

Our currency forward contracts are valued by an independent pricing service based on contractual cash flows and quoted foreign currency rates available in an active market. When determining the fair value of our forward currency contracts as of each measurement date, we consider the effect of counterparty nonperformance risk as a part of the valuation process and include a credit risk adjustment where appropriate.

Real Estate-Related Securities

We invest in debt securities of real estate companies. We have elected the fair value option for accounting for investments in debt securities. We record changes in fair value of debt securities as unrealized gain (loss) from real estate-related securities and interest income on debt securities as interest income in our condensed consolidated statements of comprehensive income.

Collateralized Loan Obligations

The Company financed a pool of loans and loan participations from its existing loan portfolio through a managed CLO, INCREF 2025-FL1 (“INCREF 2025-FL1” or the “CLO”). The Company consolidates the CLO because it determined that the CLO issuer is a VIE and that the Company is the primary beneficiary of such VIE. The collateral assets of the CLO include the pool of loans and loan participations, which are included on the condensed consolidated balance sheets at June 30, 2025 as commercial real estate loan investments, at fair value. The notes issued by the consolidated CLO are included on the Company’s condensed consolidated balance sheets as collateralized loan obligations, at fair value. Collateralized loan obligations consist solely of obligations held by third party rated note holders and exclude the retained tranches held by the Company, which are eliminated in consolidation of the CLO. The interest income from the CLO’s collateral assets and interest expense on the CLO notes are presented on a gross basis within interest income and Interest expense, respectively, in the condensed consolidated statements of comprehensive income. Because we elected the fair value option for our collateralized loan obligations, we record any changes in their fair values as unrealized gain (loss) on collateralized loan obligations, net in our condensed consolidated statements of comprehensive income.

3.Commercial Real Estate Loan Investments

The table below summarizes our investments in commercial real estate loans as of June 30, 2025 and December 31, 2024.


$ in thousands
Loan Type	Loan Amount(1)		Principal Balance Outstanding		Fair Value		Weighted Average Interest Rate(2)		Weighted Average Life (years)(3)
June 30, 2025
Senior loans(4)	$	3,821,789	$	3,525,717	$	3,529,233	7.10	%	3.97
Mezzanine loans	30,000		21,145		21,145		12.07	%	4.34
Total	$	3,851,789	$	3,546,862	$	3,550,378	7.13	%	3.97
December 31, 2024
Senior loans(4)	$	2,658,628	$	2,385,124	$	2,385,840	7.37	%	4.26
Mezzanine loans	30,000		5,238		5,238		12.23	%	4.84
Total	$	2,688,628	$	2,390,362	$	2,391,078	7.38	%	4.27

(1)Loan amount consists of outstanding principal balance plus unfunded loan commitments.

(2)Domestic loans earn interest at the one-month Term Secured Overnight Financing Rate (“SOFR”) plus a spread. Euro denominated loans earn interest at three-month Euro Interbank Offered Rate (“Euribor”) plus a spread. Our loan denominated in British pound sterling earns interest at three-month Sterling Overnight Index Average (“SONIA”) plus a spread.

(3)Assumes all extension options are exercised by the borrower; however, loans may be repaid prior to such date. Extension options are subject to certain conditions, as defined in the respective loan agreement.

(4)Senior loans include senior mortgages and similar credit quality loans, including related contiguous subordinate loans and accommodation mezzanine loans in connection with the senior mortgage financing.

The tables below detail the property type and geographic location of the properties securing our commercial real estate loans as of June 30, 2025 and December 31, 2024.


$ in thousands	June 30, 2025				December 31, 2024
Property Type	Fair Value		Percentage		Fair Value		Percentage
Multifamily	$	1,424,815	40.1	%	$	1,252,147	52.4	%
Industrial	1,682,829		47.4	%	1,042,720		43.6	%
Self-storage	121,290		3.4	%	96,211		4.0	%
Student housing	321,444		9.1	%	—		—	%
Total	$	3,550,378	100.0	%	$	2,391,078	100.0	%


$ in thousands	June 30, 2025				December 31, 2024
Geographic Location	Fair Value		Percentage		Fair Value		Percentage
United States:
West	$	936,346	26.4	%	$	738,754	30.7	%
South	743,486		20.9	%	520,733		21.8	%
East	826,998		23.3	%	688,518		28.8	%
Midwest	37,438		1.1	%	30,331		1.3	%
Various U.S.(1)	471,762		13.3	%	128,334		5.4	%
Total	$	3,016,030	85.0	%	$	2,106,670	88.0	%
Non-US:
Europe(2)	$	203,595	5.7	%	$	180,178	7.6	%
United Kingdom(3)	330,753		9.3	%	104,230		4.4	%
Total	$	534,348	15.0	%	$	284,408	12.0	%
Total	$	3,550,378	100.0	%	$	2,391,078	100.0	%

(1) Various U.S. includes self-storage and industrial portfolios with multiple locations throughout the United States.

(2) Our European loans that are collateralized by industrial commercial real estate in France and Spain are denominated in Euros and have a fair value of €81.8 million and €91.6 million, respectively, as of June 30, 2025.

(3) Our European loans that are collateralized by industrial commercial real estate in the United Kingdom are denominated in British pound sterling and have a fair value of £241.2 million as of June 30, 2025.

The weighted average loan-to-value ratio, a metric utilized in the fair value measurement of our commercial real estate loan investments, for our loan investments at June 30, 2025 was approximately 66% based on the loan principal amount and the independent property appraisals.

4.Real Estate-Related Securities

The following table summarizes our real estate-related securities as of June 30, 2025:



In thousands	Principal Balance		Unamortized Premium (Discount)		Amortized Cost		Unrealized Gain (Loss), Net		Fair Value		Period-end Weighted Average Yield		Weighted-Average Maturity Date
Non-agency CMBS	$	9,814	$	(71)	$	9,743	$	20	$	9,763	6.22	%	August 2037

We did not hold real estate-related securities at December 31, 2024.

5.Borrowings

The table below summarizes our borrowing arrangements as of June 30, 2025 and December 31, 2024. Our borrowing arrangements include secured lending and term lending agreements (collectively, our “secured financing facilities”) and a revolving credit facility.


			June 30, 2025							December 31, 2024
$ in thousands	Current Maturity	Extension Options(1)	Weighted Average Interest Rate(2)	Maximum Facility Size		Available Capacity		Amount Outstanding		Fair Value		Amount Outstanding		Fair Value

Term Lending Agreement
INCREF Lending II	Match-term	Match-term	6.59%	$	300,000	$	152,327	$	147,673	$	147,732	$	134,518	$	134,518

Secured Lending Agreements
Term Financing
INCREF Lending I	Oct 2026	Oct 2029	6.32%	837,517		107,475		730,042		730,203		722,672		722,796

Repurchase Agreements
Morgan Stanley Bank(3)	May 2026	May 2027	5.85%	500,000		169,124		330,876		330,880		342,009		342,079
Citibank	Sep 2026	Sep 2028	5.54%	500,000		72,836		427,164		427,486		276,323		276,653
Barclays(3)	Apr 2027	Apr 2029		500,000		500,000		—		—		199,305		199,326
Wells Fargo	May 2026	May 2029	6.02%	300,000		195,548		104,452		104,477		179,462		179,496
Bank of Montreal(3)	Jul 2025	Jul 2028		25,000		25,000		—		—		—		—
Capital One(3)	Feb 2027	Feb 2030	5.81%	250,000		163,359		86,641		86,732		N/A		N/A
Total secured financing facilities				$	3,212,517	$	1,385,669	$	1,826,848	$	1,827,510	$	1,854,289	$	1,854,868

Revolving Credit Facility(4)			7.20%	$	162,000	$	162,000	$	—	$	—	$	—	$	—

(1) Assumes all available extension options are exercised.

(2) Represents the weighted average interest rate in effect as of June 30, 2025.

(3) Certain extension options for these facilities are subject to lender approval and compliance with certain financial and administrative covenants.

(4) Maturity date is aligned with the Company’s ability to call remaining outstanding capital committed under the Invesco Subscription Agreement, as further explained below.

Borrowings denominated in U.S. dollars under our secured financing facilities and revolving credit facility bear interest at one-month Term SOFR plus a spread. Euro denominated borrowings bear interest at three-month Euribor plus a spread, and our British pound sterling denominated borrowings bear interest at three-month SONIA plus a spread. Our secured financing facilities are subject to certain non-financial and financial covenants, including liquidity, tangible net worth and leverage covenants. We were in compliance with these covenants as of June 30, 2025.

Term Lending Agreement

In August 2024, we entered into a $300.0 million Facility Loan Program and Security Agreement with a financial institution (“INCREF Lending II”) that provides asset-based financing on a non-mark-to-market basis with partial recourse to the Company and match-term to the underlying loans.

We have pledged certain commercial real estate loan investments with a fair value of approximately $190.3 million as collateral for INCREF Lending II. We segregate the commercial real estate loans that we have pledged as collateral in our books and records. Our term lending agreement counterparty has the right to resell or repledge the collateral posted but has the obligation to return the pledged collateral upon maturity of the term lending agreement.

Secured Lending Agreements

In July 2024, we entered into a $837.5 million Master Repurchase Agreement with a financial institution (“INCREF Lending I”) that provides asset-based financing with partial recourse to the Company and does not provide the lender with margin call rights. The term of the facility matches the term of the underlying collateral up to two years and is subject to three additional one-year extension options that we may exercise upon satisfaction of certain customary conditions and thresholds. We have pledged certain commercial real estate loan investments with a fair value of approximately $919.0 million as collateral for INCREF Lending I.

We have also entered into traditional repurchase agreements with six financial institutions, as detailed in the table above. We have pledged certain commercial real estate loan investments with a fair value of approximately $1.2 billion as collateral for these agreements. Certain borrowings under our Citibank repurchase agreement are collateralized by European commercial real estate loans. The borrowings are denominated in Euros and British pound sterling and have a fair value of €138.7 million and £192.9 million, respectively, as of June 30, 2025. We segregate the commercial real estate loans that we have pledged as collateral in our books and records. Our repurchase agreement counterparties have the right to resell or repledge the collateral posted but have the obligation to return the pledged collateral upon maturity of the repurchase agreement.

We were not required to post any margin under our master repurchase agreements as of June 30, 2025 and December 31, 2024. A margin deficiency may generally result from either a decline in the underlying loan’s market value or a shortfall in operating performance of the property. We may finance multiple commercial loan investments under a repurchase agreement; therefore, a margin excess in one asset could help mitigate a margin deficiency in another asset under the same repurchase agreement. We intend to maintain a level of liquidity that will enable us to meet margin calls. Master repurchase agreements are recourse obligations.

Counterparty Exposure

We have pledged certain commercial real estate loan investments as collateral for our secured financing facilities. If a secured financing counterparty were to default on its obligation to return the collateral, we would be exposed to potential losses to the extent the fair value of the collateral that we have pledged to the counterparty exceeded the amount loaned to us plus interest due to the counterparty. The following table summarizes our net exposure with those counterparties where the amount at risk exceeded 10.0% of stockholders’ equity as of June 30, 2025 and December 31, 2024.


$ in thousands	Outstanding Principal		Net Counterparty Exposure		Weighted Average Life (Years)(1)
June 30, 2025
Morgan Stanley Bank	$	330,876	$	90,630	1.90
Citibank	1,157,206		296,130		3.91


Total	$	1,488,082	$	386,760	3.46
December 31, 2024
Morgan Stanley Bank	$	342,009	$	101,931	2.40
Citibank	998,995		260,459		4.51
Barclays	199,305		51,591		4.32
Wells Fargo	179,462		48,058		4.39
Total	$	1,719,771	$	462,039	4.05

(1) Assumes all extension options are exercised for borrowing facilities that may be extended at our option, subject to compliance with certain financial and administrative covenants.

The following table shows the aggregate amount of maturities of our outstanding borrowings over the next five years and thereafter as of June 30, 2025:


$ in thousands	Secured Lending Agreements(1)		Term Lending Agreement(1)		Total
Year
2025 (remaining)	$	—	$	—	$	—
2026	—		—		—
2027	330,876		—		330,876
2028	427,164		—		427,164
2029	834,494		126,836		961,330
2030	86,641		20,837		107,478
Thereafter	—		—		—
Total	$	1,679,175	$	147,673	$	1,826,848

(1) Assumes all extension options are exercised for borrowing facilities that may be extended at our option, subject to compliance with certain financial and administrative covenants.

Revolving Credit Facility

Our revolving credit facility is secured by uncalled capital subscriptions under the terms of the Invesco Subscription Agreement, as described in Note 11 - “Redeemable Common Stock - Related Party”. Borrowings under the facility bear interest at one-month Term SOFR or the prime rate plus a spread. The revolving credit facility allows for the ability to obtain tranches of term financing in addition to general borrowings under an Uncommitted Tranche (as defined in the credit agreement). The Uncommitted Tranche is due on demand (15 business days after notice); any Funded Tranche (as defined in the credit agreement) is due no later than (a) three years from issuance or (b) 360 days after notice; and all amounts outstanding under the facility are due 30 days prior to the last date on which capital calls may be issued. The facility is prepayable without penalty.

Our revolving credit facility is subject to certain affirmative and negative non-financial and financial covenants, including a limitation on indebtedness. We were in compliance with these covenants as of June 30, 2025.

6.Collateralized Loan Obligations

The table below summarizes our collateralized loan obligations as of June 30, 2025.


	Facility						Collateral
$ in thousands	Term	Weighted Average Interest Rate(1)	Amount Outstanding		Fair Value		Count	Principal Balance Outstanding		Fair Value

INCREF 2025-FL1	Oct 2042	6.27%	$	998,234	$	1,001,129	30	$	1,217,359	$	1,220,104
Total			$	998,234	$	1,001,129	30	$	1,217,359	$	1,220,104

(1) Represents the weighted average interest rate in effect as of June 30, 2025.

On May 7, 2025, the Company financed a pool of loans and loan participations from its existing loan portfolio through INCREF 2025-FL1, contributing $1.2 billion of commercial real estate loan investments into the CLO and issuing $1.2 billion of notes. The Company retained $219 million of the CLO. The rated notes bear interest at Term SOFR plus a spread. The CLO provides the Company with match-term financing on a non-mark-to-market and non-recourse basis. The Company received $995.7 million in proceeds from the transaction. The third-party notes were issued at a discount of $2.5 million which was recorded as an unrealized loss of $2.5 million within unrealized gain (loss) on loans, net in the condensed consolidated statement of comprehensive income for the three months ended June 30, 2025.

INCREF 2025-FL1 is a VIE primarily because the unrelated investors do not have substantive voting or participating rights. To assess whether the Company has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, the Company considered, among other factors, its role in establishing the VIE and its ongoing rights and responsibilities. We determined that we are the primary beneficiary as (1) we have the power to direct activities of the VIE that most significantly impact the VIE’s economic performance, and (2) through our retained interests, we have the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. The majority of the operations of the VIE are funded with cash flows generated from the loans within the VIE. Assets held by the VIE can be used only to settle obligations of the VIE. The liabilities of the VIE are non-recourse to us and can only be satisfied from the assets of the VIE. We are not obligated to provide, have not provided, and do not intend to provide material financial support to the consolidated VIE.

The consolidation of the VIE results in an increase in our gross assets, liabilities, revenues and expenses, however the impact to our stockholders’ equity and net income are equivalent to our net retained economic interests in the VIE. During three and six months ended June 30, 2025, we recorded $9.8 million of interest expense related to the CLO. The following table details the assets and liabilities of our consolidated VIE:


$ in thousands	June 30, 2025
Assets:

Restricted cash	$	150
Commercial real estate loan investments, at fair value	1,220,104
Interest receivable	3,918
Total assets	$	1,224,172

Liabilities:
Collateralized loan obligations, at fair value	$	1,001,129
Interest payable	2,086
Total liabilities	$	1,003,215

7.Derivatives and Hedging Activities

Currency Forward Contracts

Since we first originated loans outside the United States in September 2024, we enter into currency forward contracts to help mitigate the impact of changes in foreign currency exchange rates on our investments and financing transactions denominated in currencies other than the U.S. dollar. Despite being economic hedges, we have elected not to treat our foreign currency forwards as hedges for accounting purposes and, therefore, the realized and unrealized gains and losses associated with such instruments are included in gain (loss) on derivative instruments, net in our condensed consolidated statements of comprehensive income. Gain (loss) on foreign currency transactions, net reflects the net financial impact resulting from changes in exchange rates between the time we enter into foreign currency transactions and when they are settled.

The following table illustrates the unrealized foreign exchange impact recognized in the condensed consolidated statements of comprehensive income in the three and six months ended June 30, 2025, of our loans and secured financing arrangements as well as the offsetting gain (loss) on derivative instruments in the periods:


$ in thousands	Three Months Ended June 30, 2025		Six Months Ended June 30, 2025


Unrealized foreign exchange gain (loss) on loans	$	25,479	$	36,303
Unrealized foreign exchange gain (loss) on secured financing facilities	(20,404)		(29,073)


Gain (loss) on derivative instruments, net	(5,362)		(7,542)
Net impact of hedged foreign exchange	$	(287)	$	(312)

The following table summarizes changes in the notional amount of our currency forward contracts during the six months ended June 30, 2025:


	Local Currency
In thousands	Notional Amount as of December 31, 2024		Additions		Settlement, Termination, Expiration or Exercise		Notional Amount as of June 30, 2025		Notional Amount as of June 30, 2025
Buy USD / Sell EUR Forward	€	39,474	€	—	€	(1,717)	€	37,757	$	42,876
Buy USD / Sell GBP Forward	£	19,417	£	33,834	£	(989)	£	52,262	$	70,372

The table below presents the fair value of our currency forward contracts, as well as their classification on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024:


$ in thousands	Fair Value as of
	June 30, 2025		December 31, 2024

Derivative Assets	$	—	$	4,064
Derivative Liabilities	$	3,590	$	—

The following table summarizes the effect of currency forward contracts reported in gain (loss) on derivative instruments, net on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025:


$ in thousands	Three Months Ended June 30, 2025
Derivatives not designated as hedging instruments	Realized gain (loss) on derivative instruments, net		Unrealized gain (loss), net		Gain (loss) on derivative instruments, net
Currency Forward Contracts	$	(4)	$	(5,358)	$	(5,362)


$ in thousands	Six Months Ended June 30, 2025
Derivatives not designated as hedging instruments	Realized gain (loss) on derivative instruments, net		Unrealized gain (loss), net		Gain (loss) on derivative instruments, net
Currency Forward Contracts	$	113	$	(7,655)	$	(7,542)

8. Fair Value of Financial Instruments

A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The three levels are defined as follows:

Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. We do not adjust the quoted price for these investments.

Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.

Valuation of Financial Instruments Measured at Fair Value

The following tables detail our financial instruments measured at fair value on a recurring basis:


	June 30, 2025
	Fair Value Measurements Using:
$ in thousands	Level 1		Level 2		Level 3		Total at Fair Value
Assets:
Commercial real estate loan investments	$	—	$	1,220,104	$	2,330,274	$	3,550,378
Real estate-related securities	—		9,763		—		9,763

Total assets	$	—	$	1,229,867	$	2,330,274	$	3,560,141

Liabilities:

Secured lending agreements	$	—	$	—	$	1,679,778	$	1,679,778
Term lending agreements	—		—		147,732		147,732
Collateralized loan obligations	—		1,001,129		—		1,001,129
Derivative liabilities	—		3,590		—		3,590
Total liabilities	$	—	$	1,004,719	$	1,827,510	$	2,832,229


	December 31, 2024
	Fair Value Measurements Using:
$ in thousands	Level 1		Level 2		Level 3		Total at Fair Value
Assets:
Commercial real estate loan investments	$	—	$	—	$	2,391,078	$	2,391,078

Derivative assets	—		4,064		—		4,064
Total assets	$	—	$	4,064	$	2,391,078	$	2,395,142

Liabilities:
Secured lending agreements	$	—	$	—	$	1,720,350	$	1,720,350
Term lending agreements	—		—		134,518		134,518

Total liabilities	$	—	$	—	$	1,854,868	$	1,854,868

Valuation of Commercial Real Estate Loan Investments

The following table shows a reconciliation of the beginning and ending fair value measurements of our commercial real estate loan investments classified as Level 3:


$ in thousands	Three Months Ended June 30, 2025		Six Months Ended June 30, 2025
Beginning Balance	$	2,788,480	$	2,391,078
Transfers from Level 3 into Level 2	(1,220,104)		(1,220,104)
Loan originations and fundings	735,453		1,120,159
Net unrealized gain (loss)	935		2,791
Foreign currency adjustments	25,510		36,350
Ending Balance	$	2,330,274	$	2,330,274

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’s best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Transfers out of Level 3 at the end of the period for the three and six months ended June 30, 2025 include the fair value of the outstanding principal balance for loan assets held by the CLO and primarily relates to the availability of observable inputs. The fair value of collateralized financing assets are measured using the more observable fair value of the collateralized liabilities. See Note 2, “Summary of Significant Accounting Policies.”

The following tables summarize the significant unobservable inputs supporting the fair value measurement of our investments in commercial loans:

$ in thousands

June 30, 2025

Type

Fair Value

Valuation Technique

Unobservable Input

Weighted Average Rate

Range

Weighted Average Life (years)(1)

Commercial loans

2,330,274

Discounted cash flow

Discount rate

6.25%

5.04% - 11.96%

0.48

December 31, 2024

Type

Valuation Technique

Unobservable Input

Weighted Average Rate

Range

Weighted Average Life (years)(1)

Commercial loans

Discounted cash flow

Discount rate

7.16%

5.90% - 12.12%

0.56

(1) Based on expected cash flows and potential prepayments.

(2) Weighted average rate and life are not applicable for loans held by the consolidated CLO, as they were not valued using a discounted cash flow approach. Loans held by the CLO are valued using the more observable fair value of the notes issued by the CLO.

The discount rate above is subject to change based on changes in economic and market conditions, in addition to changes in the underlying economics of the arrangement, such as changes in the underlying property valuation and debt service. These rates are also based on the location, type and nature of each underlying property and related industry publications. Changes in discount rates result in increases or decreases in the fair values of these investments. The discount rate encompasses, among other things, uncertainties in the valuation models with respect to the amount and timing of cash flows. It is not possible for us to predict the effect of future economic or market conditions based on our estimated fair values.

Valuation of Revolving Credit Facility

Given the uncertainty of future cash flows and our ability to prepay without penalty, we determined the fair value of our revolving credit facility to approximate par.

The following table shows a reconciliation of the beginning and ending fair value measurements of our revolving credit facility:


$ in thousands	Three Months Ended June 30, 2025		Six Months Ended June 30, 2025
Beginning Balance	$	—	$	—
Proceeds from revolving credit facility	—		135,000
Repayment of revolving credit facility	—		(135,000)
Net unrealized (gain) loss	—		—
Ending Balance	$	—	$	—

Valuation of Secured Financing Facilities

We have entered into secured financing facilities to provide floating rate financing for our commercial real estate loan investments. Our secured financing facilities are carried at fair value based on significant unobservable inputs and are classified as Level 3. The following tables show a reconciliation of the beginning and ending fair value measurements of our secured financing facilities:


	Three Months Ended June 30, 2025
$ in thousands	Secured Lending Agreements		Term Lending Agreement		Total
Beginning Balance	$	2,015,125	$	134,518	$	2,149,643
Proceeds from secured financing facilities	522,592		13,155		535,747
Repayments of secured financing facilities	(878,561)		—		(878,561)
Net unrealized (gain) loss	218		59		277
Unrealized foreign currency (gain) loss	20,404		—		20,404
Ending Balance	$	1,679,778	$	147,732	$	1,827,510


	Six Months Ended June 30, 2025
$ in thousands	Secured Lending Agreements		Term Lending Agreement		Total
Beginning Balance	$	1,720,350	$	134,518	$	1,854,868
Proceeds from secured financing facilities	808,893		13,155		822,048
Repayments of secured financing facilities	(878,561)		—		(878,561)
Net unrealized (gain) loss	23		59		82
Unrealized foreign currency (gain) loss	$	29,073	$	—	$	29,073
Ending Balance	$	1,679,778	$	147,732	$	1,827,510

The following tables summarize the significant unobservable inputs used in the fair value measurement of our secured financing facilities:

June 30, 2025

Type

Valuation Technique

Unobservable Input

Weighted Average Rate

Range

Weighted Average Life (years)(1)

Secured financing facilities

Discounted cash flow

Discount rate

5.85%

4.02% - 6.56%

0.46

December 31, 2024

Type

Valuation Technique

Unobservable Input

Weighted Average Rate

Range

Weighted Average Life (years)

Secured financing facilities

Discounted cash flow

Discount rate

6.20%

4.88% - 6.72%

0.56

(1) Based on expected cash flows and potential prepayments.

The discount rate above is subject to change based on changes in economic and market conditions, in addition to changes in the underlying economics of the pledged commercial real estate loan, such as changes in the loan-to-value ratio, credit profile and debt service. These rates are also based on the location, type and nature of each pledged property underlying the commercial real estate loan and related industry publications. Changes in discount rates result in increases or decreases in the fair values of these investments. The discount rate encompasses, among other things, uncertainties in the valuation models with respect to the amount and timing of cash flows. It is not possible for us to predict the effect of future economic or market conditions based on our estimated fair values.

9.Accounts Payable, Accrued Expenses and Other Liabilities

The following table details the components of accounts payable, accrued expenses and other liabilities as of June 30, 2025 and December 31, 2024.


$ in thousands	June 30, 2025		December 31, 2024
Accounts payable and accrued expenses	$	2,336	$	2,073
Subscriptions paid in advance (1)	22,776		19,784
Accrued common stock repurchases	184		55
Other liabilities	567		1,247
Total	$	25,863	$	23,159

(1) Represents subscriptions received by our transfer agent prior to the date the subscriptions are effective.

10.Related Party Transactions

Due to Affiliates

The following table details the components of due to affiliates as of June 30, 2025 and December 31, 2024.


$ in thousands	June 30, 2025		December 31, 2024
Advanced organizational, offering and operating expenses	$	12,542	$	14,214
Reimbursable operating expenses	3,405		3,454
Adviser commitment fee payable	3,246		2,357
Stockholder servicing fees	16,174		8,503
Management fees	1,348		746
Performance fees	1,258		2,068
Total	$	37,973	$	31,342

Advanced Organizational, Offering and Operating Expenses

Under the terms of our Amended and Restated Advisory Agreement (“Advisory Agreement”), the Adviser advanced all of our organizational, offering and operating expenses (other than upfront selling commissions and ongoing stockholder servicing fees) incurred through May 31, 2024. Starting in December 2024, we began reimbursing the Adviser for these costs ratably over 52 months. As of June 30, 2025, we owe the Adviser approximately $12.5 million (December 31, 2024: $14.2 million) for the remaining outstanding balance of the expenses advanced by the Adviser under this arrangement.

Reimbursable Operating Expenses

Operating expenses incurred by the Adviser on our behalf after May 31, 2024 are reimbursed quarterly to the Adviser, and the balance outstanding as of June 30, 2025 and December 31, 2024 is listed in the above table as “Reimbursable operating expenses.”

Starting with the quarter ended June 30, 2025, we may not reimburse the Adviser at the end of any fiscal quarter for Total Operating Expenses (as defined in the Advisory Agreement) that exceed the greater of 2% of average invested assets or 25% of net income determined without reduction for any non-cash reserves and excluding any gain from the sale of our assets for that period (the “2%/25% Guidelines”) for the four consecutive fiscal quarters then ended. We may reimburse the Adviser for operating expenses in excess of the 2%/25% Guidelines if a majority of our independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. Operating expenses for the four consecutive fiscal quarters ended June 30, 2025 did not exceed the 2%/25% Guidelines.

Adviser Commitment Fee Payable

Borrowers pay a commitment fee in connection with the origination of each new loan. The commitment fee is calculated as a percentage of the whole loan on a fully-funded basis, as determined by the Adviser at the time of origination. We pay the Adviser 50% (not to exceed 0.5% of the whole loan on a fully funded basis) of any commitment fee charged to borrowers in connection with each new loan as compensation for sourcing, structuring and negotiating the loan. The commitment fee income and related expense to the Adviser is reported as commitment fee income, net of related party expense on the condensed consolidated statements of comprehensive income.

Stockholder Servicing Fees and Other Selling Commissions

Invesco Distributors, Inc. (the “Dealer Manager”) is entitled to receive upfront selling commissions and stockholder servicing fees for Class S, Class S-1, Class D and Class D-1 shares sold in the Continuous Offering. The Dealer Manager reallows (pays) all or a portion of the stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers and will waive stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such service. We did not issue any Class D-1 shares as of June 30, 2025.

We accrue the full amount of stockholder servicing fees payable as an offering cost at the time each Class S, Class S-1, Class D and Class D-1 share is sold during the Continuous Offering. The following table summarizes stockholder servicing fees paid for the period ended June 30, 2025 and the year ended December 31, 2024.


$ in thousands	Class S Shares		Class S-1 Shares		Class D Shares		Class D-1 Shares
For the period ended June 30, 2025	$	4	$	1,062	$	—	$	—
For the year ended December 31, 2024	$	1	$	761	$	—	$	—

The following table summarizes the upfront selling commissions for each class of shares payable at the time of subscription and the stockholder servicing fee we pay the Dealer Manager on an annualized basis as a percentage of the NAV for such class:


	Class S Shares	Class S-1 Shares	Class D Shares	Class D -1 Shares	Class I Shares	Class E Shares	Class F Shares
Maximum Upfront Selling Commissions (% of Transaction Price)	up to 3.5%	up to 3.5%	up to 1.5%	up to 1.5%	—	—	—
Stockholder Servicing Fee (% of NAV)	0.85%	0.85%	0.25%	0.25%	—	—	—

We will cease paying the stockholder servicing fee with respect to any Class S or Class D share held in a stockholder’s account at the end of the month in which the Dealer Manager, in conjunction with the transfer agent, determines that total upfront selling commissions and stockholder servicing fees paid with respect to the shares held by the stockholder would exceed, in the aggregate, 8.75% of the gross proceeds (7.75% for clients of certain participating broker dealers) from the sale of such shares (including the gross proceeds of any shares issued under our distribution reinvestment plan upon the reinvestment of distributions paid with respect thereto or with respect to any shares issued under our distribution reinvestment plan). At the end of such month, such Class S or Class D share will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such share. Such servicing fee limit does not apply to Class S-1 and Class D-1 shares.

Management Fee and Performance Fee

Under the terms of our Advisory Agreement, we pay the Adviser a management fee equal to 1.0% per annum of NAV, calculated monthly before giving effect to any accruals for the management fee, stockholder servicing fees, performance fees or any distributions with respect to our Class S, Class S-1, Class D, Class D-1 and Class I shares. We also pay the Adviser a performance fee equal to 10% of our “Performance Fee Income” with respect to our Class S, Class S-1, Class D, Class D-1 and Class I shares.

We do not pay the Adviser a management fee with respect to our Class F shares. We will pay the Adviser a performance fee with respect to the Class F shares. The Class F performance fee payable with respect to each calendar year will be an amount equal to 10% of the excess of Performance Fee Income allocable to Class F shares over a 6% annualized return on the Class F NAV per share. No performance fee is payable if the Performance Fee Income allocable to Class F is below the annualized 6% return in any calendar year or for a rolling two-year period.

We do not pay the Adviser a management or performance fee with respect to our Class E shares.

Performance Fee Income with respect to each class of common shares subject to a performance fee means the net income (determined in accordance with U.S. GAAP) allocable to such class of common shares subject to adjustment as defined under the terms of our Advisory Agreement. During the period that the Adviser advanced our organizational, offering and operating expenses, net income for purposes of the performance fee calculation excluded these advanced expenses. After the period that the Adviser advanced our organizational, offering and operating expenses, net income for purposes of the performance fee calculation includes previously advanced expenses that are to be repaid to the Adviser during the period. We will not pay the Adviser a performance fee with respect to any class of shares that has a negative total return per share for the calendar year, and the Advisory Agreement does not prohibit the Adviser from entering into economic or other arrangements with other persons. For purposes of the performance fee calculation, total return per share is defined as an amount equal to: (i) the cumulative distributions per share accrued with respect to such class of common shares since the beginning of the calendar year plus (ii) the change in NAV per share of such class of common shares since the beginning of the calendar year, prior to giving effect to (y) any accrual for performance fees with respect to such class of common shares or (z) any applicable stockholder servicing fees.

The management fee and the performance fee are payable in cash or Class E shares at the option of the Adviser. Management fees and performance fees began to accrue on March 1, 2024. Management fees are accrued monthly and paid quarterly in arrears and performance fees are paid annually. During the three and six months ended June 30, 2025, we incurred management fees of $1.3 million and $2.4 million, respectively, of which $1.3 million is accrued as a component of due to affiliates on our condensed consolidated balance sheets as of June 30, 2025. During the three and six months ended June 30, 2025, we incurred performance fees of $490,000 and $1.3 million, respectively, of which $1.3 million is accrued as a component of due to affiliates on our condensed consolidated balance sheets as of June 30, 2025. During the three and six months ended June 30, 2025, we issued 41,491 and 70,791 Class E shares, respectively, as payment for the management fees earned. During the three and six months ended June 30, 2025, we issued — and 81,185 Class E Redeemable Common Stock shares, respectively, as payment for the performance fees earned. The shares issued to the Adviser for payment of the management fee and performance fee were issued at the applicable NAV per share at the end of each quarter for which the fees were earned.

The current term of our Advisory Agreement expires on March 31, 2026. The Advisory Agreement is subject to automatic renewals for successive one-year periods unless otherwise terminated in accordance with the provisions of the agreement. If the Advisory Agreement is terminated, the Adviser will be entitled to receive its prorated management fee and performance fee owed through the date of termination. If we elect not to renew our Advisory Agreement based on unsatisfactory performance and not for cause, we owe our Adviser a termination fee equal to three times the sum of our average annual management fee during the 24-month period before termination, calculated as of the end of the most recently completed fiscal quarter.

Our Adviser is subject to the supervision and oversight of our board of directors and has only such functions and authority as we delegate to it. The Adviser and its affiliates provide us with our management team, including our officers and appropriate support personnel. Each of our officers is an employee of the Adviser or one of its affiliates. We do not have any employees. We incurred $317,000 and $919,000, respectively, of costs for support personnel provided by the Adviser for the three and six months ended June 30, 2025 that are recorded as a component of due to affiliates on our condensed consolidated balance sheets and as general and administrative expenses on our condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2024, we incurred $218,000 and $450,000 of costs for support personnel provided by the Adviser.

The Adviser serves as Collateral Manager to the Company’s consolidated CLO and has waived any and all fees payable to the Adviser or any of its affiliates for this service for so long as it or any of its affiliates acts as the Collateral Manager and as manager of the Operating Partnership.

Related Party Share Ownership

The tables below summarize the number of shares and the total purchase price of the shares owned by affiliates as of June 30, 2025 and as of December 31, 2024.


	June 30, 2025
$ in thousands, except share amounts	Class S Shares	Class S-1 Shares	Class D Shares	Class D-1 Shares	Class I Shares	Class E Shares	Class F Shares	Total Purchase Price
Invesco Realty, Inc.(1)	1,196,923	—	1,197,628	—	1,194,434	1,189,256	—	$	120,000
Invesco Advisers, Inc.(2)	—	—	—	—	—	182,121	—	4,636
Members of our board of directors (3)	—	—	—	—	—	33,861	—	866
Total	1,196,923	—	1,197,628	—	1,194,434	1,405,238	—	$	125,502

(1) Shares issued to Invesco Realty, Inc. are governed by the terms of the Invesco Subscription Agreement and classified as redeemable common shares on our condensed consolidated balance sheets. See Note 11 - “Redeemable Common Stock - Related Party” for further information.

(2) Shares issued to Invesco Advisers, Inc. are governed by the terms of our Advisory Agreement and classified as redeemable common shares on our condensed consolidated balance sheets. See Note 11 - “Redeemable Common Stock - Related Party” for further information.

(3) Represents shares issued to members of our board of directors, including stock awards under our Share-Based Compensation Plan. Total Purchase Price for stock awards issued under our Share-Based Compensation Plan represents the value of shares issued as equity compensation.


	December 31, 2024
$ in thousands, except share amounts	Class S Shares	Class S-1 Shares	Class D Shares	Class D-1 Shares	Class I Shares	Class E Shares	Class F Shares	Total Purchase Price
Invesco Realty, Inc.(1)	1,496,143	—	1,497,041	—	1,492,906	1,483,196	—	$	150,000
Invesco Advisers, Inc.(2)	—	—	—	—	—	35,937	—	908
Members of our board of directors (3)	—	—	—	—	—	25,416	—	646
Total	1,496,143	—	1,497,041	—	1,492,906	1,544,549	—	$	151,554

11.Redeemable Common Stock - Related Party

Invesco Realty, Inc. (“Invesco Realty”), an affiliate of Invesco, has committed to purchase up to $300.0 million in shares of our common stock (the “Invesco Subscription Agreement”). Invesco has committed to purchase $150.0 million in capital under the Invesco Subscription Agreement in one or more closings through March 23, 2028. We may also call up to $150.0 million in additional capital (for a total of $300.0 million) if needed to avoid triggering any concentration limit imposed by a third party in connection with its distribution or placement of our shares or for purposes of repaying indebtedness drawn on the revolving credit facility. As of June 30, 2025, we had called $120.0 million of the total $300.0 million. The remaining uncalled amount serves as collateral for the revolving credit facility.

Invesco Realty may not submit its shares for repurchase under the share repurchase plan described in Note 12 - “Stockholders’ Equity” until the earlier of March 23, 2028 and the date that our aggregate NAV is at least $1.5 billion. We can only accept a repurchase request from Invesco Realty after all requests from unaffiliated stockholders have been fulfilled. We may elect to repurchase all or any portion of the shares acquired by Invesco Realty at any time at a per share price equal to the most recently

determined NAV per share for each class (or another transaction price we believe reflects the NAV per share more appropriately than the prior month’s NAV per share). The Adviser or its affiliate must continue to hold at least $200,000 in shares for so long as Invesco or any affiliate thereof serves as our external adviser.

As discussed in Note 10 - “Related Party Transactions”, our management and performance fees are payable in cash or Class E shares at the option of the Adviser. Because the Adviser may elect to have the Company repurchase shares issued as payment for management fees or performance fees, we classify these shares as redeemable common stock. Class E shares issued to the Adviser as payment for management or performance fees are not subject to the repurchase limits of the Company’s share repurchase plan described in Note 12 - “Stockholders’ Equity,” any lockup period applicable to the Adviser, or any reduction penalty for an early repurchase. The Adviser also has the option to exchange Class E shares issued as payment for management or performance fees for Class S, Class S-1, Class D, Class D-1, Class F, or Class I shares. During the three months ended June 30, 2025, we issued 41,491 Class E shares to the Adviser as payment for management fees payable as of March 31, 2025.

The following tables summarize the changes in redeemable common stock for the six months ended June 30, 2025 and 2024:


$ in thousands	Class S Redeemable Common Stock		Class D Redeemable Common Stock		Class I Redeemable Common Stock		Class E Redeemable Common Stock		Total Redeemable Common Stock
Balance as of December 31, 2024	$	37,554	$	37,554	$	37,565	$	38,694	$	151,367
Issuance of redeemable common stock	—		—		—		2,814		2,814
Repurchase of redeemable common stock	(7,500)		(7,500)		(7,500)		(7,500)		(30,000)
Adjustment to carrying value of redeemable common stock	(4)		(5)		(1)		170		160
Balance as of March 31, 2025	$	30,050	$	30,049	$	30,064	$	34,178	$	124,341
Issuance of redeemable common stock	—		—		—		1,062		1,062
Repurchase of redeemable common stock	—		—		—		(148)		(148)
Adjustment to carrying value of redeemable common stock	(23)		(22)		(39)		29		(55)
Balance as of June 30, 2025	$	30,027	$	30,027	$	30,025	$	35,121	$	125,200


$ in thousands	Class S Redeemable Common Shares		Class D Redeemable Common Shares		Class I Redeemable Common Shares		Class E Redeemable Common Shares		Total Redeemable Common Stock
Balance as of December 31, 2023	$	26,335	$	26,335	$	26,335	$	26,335	$	105,340
Issuance of redeemable common stock	—		—		—		—		—
Adjustment to carrying value of redeemable common stock	—		—		—		—		—
Balance as of March 31, 2024	$	26,335	$	26,335	$	26,335	$	26,335	$	105,340
Issuance of redeemable common stock	—		—		—		145		145
Repurchase of redeemable common stock	(25,000)		(25,000)		(25,000)		(25,000)		(100,000)
Adjustment to carrying value of redeemable common stock	35		35		13		92		175
Balance as of June 30, 2024	$	1,370	$	1,370	$	1,348	$	1,572	$	5,660

The following tables summarize the changes in our outstanding shares of redeemable common stock shares for the six months ended June 30, 2025 and 2024:


	Class S Redeemable Common Shares	Class D Redeemable Common Shares	Class I Redeemable Common Shares	Class E Redeemable Common Shares	Total Redeemable Common Stock
Outstanding Shares as of December 31, 2024	1,496,143	1,497,041	1,492,906	1,519,133	6,005,223
Issuance of redeemable common stock	—	—	—	110,485	110,485
Repurchase of redeemable common stock	(299,220)	(299,413)	(298,472)	(293,940)	(1,191,045)
Outstanding Shares as of March 31, 2025	1,196,923	1,197,628	1,194,434	1,335,678	4,924,663
Issuance of redeemable common stock	—	—	—	41,491	41,491
Repurchase of redeemable common stock	—	—	—	(5,792)	(5,792)
Outstanding Shares as of June 30, 2025	1,196,923	1,197,628	1,194,434	1,371,377	4,960,362


	Class S Redeemable Common Shares	Class D Redeemable Common Shares	Class I Redeemable Common Shares	Class E Redeemable Common Shares	Total Redeemable Common Stock

Outstanding Shares as of December 31, 2023	1,052,487	1,052,487	1,052,487	1,052,464	4,209,925
Issuance of redeemable common stock	—	—	—	—	—
Outstanding Shares as of March 31, 2024	1,052,487	1,052,487	1,052,487	1,052,464	4,209,925
Issuance of redeemable common stock	—	—	—	5,792	5,792
Repurchase of redeemable common stock	(997,920)	(997,921)	(998,825)	(995,972)	(3,990,638)
Outstanding Shares as of June 30, 2024	54,567	54,566	53,662	62,284	225,079

12.Stockholders’ Equity

Stapled Unit Offerings of Preferred and Common Stock

On January 31, 2025, we redeemed all 111 Stapled Units and 117 New Stapled Units issued and outstanding. Each Stapled Unit consists of one share of 12.5% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”), one Class S Share, one Class D Share and one Class I Share. Each New Stapled Unit consists of one share of Series A Preferred Stock and one Class S-1 Share. The cash redemption price for each share of stapled common stock was the NAV per share for the applicable share class as of December 31, 2024. Through the redemption of all Stapled Units and New Stapled Units, we redeemed all 228 issued and outstanding shares of our Series A Preferred Stock for approximately $232,000, plus accrued and unpaid dividends. The cash redemption price for each share of Series A Preferred Stock was $1,000. The excess of the consideration transferred over carrying value was accounted for as a deemed dividend and resulted in a reduction of approximately $27,000 in net income (loss) attributable to common stockholders for the six months ended June 30, 2025. Prior to redemption, holders of our Series A Preferred Stock were entitled to receive dividends at an annual rate of 12.5% of the liquidation preference of $1,000 per share or $125.00 per share per annum.

Common Stock

The table below summarizes changes in our outstanding shares of common stock for the six months ended June 30, 2025 and 2024. We did not issue any Class D-1 Shares as of June 30, 2025.


	Six Months Ended June 30, 2025
	Class S Shares	Class S-1 Shares	Class D Shares	Class D-1 Shares	Class I Shares	Class E Shares	Class F Shares	Total
Total Outstanding Shares as of December 31, 2024	1,502,214	7,226,062	1,499,147	—	4,171,608	1,635,105	8,218,258	24,252,394
Issuance of common stock to unaffiliated stockholders	3,969	3,261,421	8,211	—	1,088,268	8,244	—	4,370,113

Common stock distribution reinvestment	—	98,095	99	—	36,810	1,370	161,371	297,745
Issuance of redeemable common shares(1)	—	—	—	—	—	110,485	—	110,485
Repurchase of common stock	(111)	(21,833)	(111)	—	(8,678)	—	—	(30,733)
Repurchase of redeemable common stock	(299,220)	—	(299,413)	—	(298,472)	(293,940)	—	(1,191,045)
Total Outstanding Shares as of March 31, 2025	1,206,852	10,563,745	1,207,933	—	4,989,536	1,461,264	8,379,629	27,808,959
Issuance of common stock	146,445	3,203,781	—	—	1,542,452	9,001	—	4,901,679
Stock awards(2)	—	—	—	—	—	7,700	—	7,700
Issuance of redeemable common stock(1)	—	—	—	—	—	41,491	—	41,491
Common stock distribution reinvestment	240	133,400	198	—	48,497	1,484	157,380	341,199
Repurchase of common stock	—	(23,808)	—	—	(70,026)	(1,954)	—	(95,788)
Repurchase of redeemable common stock	—	—	—	—	—	(5,792)	—	(5,792)
Total Outstanding Shares as of June 30, 2025(1)	1,353,537	13,877,118	1,208,131	—	6,510,459	1,513,194	8,537,009	32,999,448

(1) Consists of shares issued to an Invesco affiliate for the payment of management fees and performance fees that are classified as redeemable common stock. See Note 11 - “Redeemable Common Stock - Related Party”.

(2) Represents shares issued to independent directors under the Incentive Plan.


	Six Months Ended June 30, 2024
	Class S Shares	Class S-1 Shares	Class D Shares	Class I Shares	Class E Shares	Class F Shares	Total
Total Outstanding Shares as of December 31, 2023	1,052,598	1,054,174	1,052,598	1,383,506	1,067,805	—	5,610,681
Issuance of common stock to unaffiliated stockholders	—	1,467,311	—	656,221	57,994	—	2,181,526

Common stock distribution reinvestment	—	21,860	—	8,245	622	—	30,727
Total Outstanding Shares as of March 31, 2024	1,052,598	2,543,345	1,052,598	2,047,972	1,126,421	—	7,822,934
Issuance of common stock	5,757	1,258,476	—	448,043	10,707	4,747,348	6,470,331
Stock awards(1)	—	—	—	—	3,340	—	3,340
Issuance of redeemable common stock(2)	—	—	—	—	5,792	—	5,792
Common stock distribution reinvestment	—	71,248	—	31,704	1,582	—	104,534
Repurchase of common stock	—	—	—	(1,200)		—	(1,200)
Repurchase of redeemable common stock	(997,920)	—	(997,921)	(998,825)	(995,972)	—	(3,990,638)
Total Outstanding Shares as of June 30, 2024	60,435	3,873,069	54,677	1,527,694	151,870	4,747,348	10,415,093

(1) Represents shares issued to independent directors under the Incentive Plan.

(2) Consists of shares issued to an Invesco affiliate for the payment of management fees and performance fees that are classified as redeemable common stock. See Note 11 - “Redeemable Common Stock - Related Party”.

Distributions

We are generally required to distribute at least 90% our taxable income to our stockholders each year to comply with the REIT provisions of the Internal Revenue Code. Taxable income does not necessarily equal net income as calculated in accordance with U.S. GAAP.

For the three and six months ended June 30, 2025, we declared distributions of $14.3 million and $27.3 million, respectively. We accrued $5.0 million for distributions payable, of which $791,000 was accrued for distributions payable to related parties, in our condensed consolidated balance sheet as of June 30, 2025. For the three and six months ended June 30, 2024, we declared distributions of $7.3 million and $13.6 million, respectively. We accrued $3.8 million for distributions payable, of which $1.0 million was accrued for distributions payable to related parties, in our condensed consolidated balance sheet as of December 31, 2024.

The tables below detail the aggregate distributions declared per share for each applicable class of stock for the three and six months ended June 30, 2025 and June 30, 2024:


	Three Months Ended June 30, 2025
		Class S Shares		Class S-1 Shares		Class D Shares		Class D-1 Shares		Class I Shares		Class E Shares		Class F Shares
Aggregate distribution declared per share		$	0.4800	$	0.4800	$	0.4800	$	—	$	0.4800	$	0.4800	$	0.4800
Stockholder servicing fee per share		(0.0046)		(0.0533)		—		—		—		—		—
Net distribution declared per share		$	0.4754	$	0.4267	$	0.4800	$	—	$	0.4800	$	0.4800	$	0.4800


	Six Months Ended June 30, 2025
		Class S Shares		Class S-1 Shares		Class D Shares		Class D-1 Shares		Class I Shares		Class E Shares		Class F Shares
Aggregate distribution declared per share		$	0.9800	$	0.9800	$	0.9800	$	—	$	0.9800	$	0.9800	$	0.9800
Stockholder servicing fee per share		(0.0049)		(0.1061)		—		—		—		—		—
Net distribution declared per share		$	0.9751	$	0.8739	$	0.9800	$	—	$	0.9800	$	0.9800	$	0.9800


	Three Months Ended June 30, 2024
		Class S Shares		Class S-1 Shares		Class D Shares		Class I Shares		Class E Shares		Class F Shares(3)
Aggregate distribution declared per share		$	0.7800	$	0.7800	$	0.7800	$	0.7800	$	0.7800	$	0.7800
Stockholder servicing fee per share		(0.0017)		(0.0529)		—		—		—		—
Net distribution declared per share		$	0.7783	$	0.7271	$	0.7800	$	0.7800	$	0.7800	$	0.7800


	Six Months Ended June 30, 2024
		Class S Shares		Class S-1 Shares		Class D Shares		Class I Shares		Class E Shares		Class F Shares(3)
Aggregate distribution declared per share		$	1.6400	$	1.6400	$	1.6400	$	1.6400	$	1.6400	$	0.7800
Stockholder servicing fee per share		(0.0017)		(0.1063)		—		—		—		—
Net distribution declared per share		$	1.6383	$	1.5337	$	1.6400	$	1.6400	$	1.6400	$	0.7800

Share Repurchase Plan

We have adopted a share repurchase plan for our common stock. On a monthly basis, our stockholders may request that we repurchase all or any portion of their shares. We may choose, in our discretion, to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any month, subject to any limitations in the share repurchase plan.

Class F stockholders may not participate in our share repurchase plan until the earlier of (i) the date our NAV reaches $1.5 billion and (ii) March 23, 2028. However, Class F stockholders are entitled to request that we repurchase their shares in the event that there is a Key Person Event or a Material Strategy Change, as such terms are defined in the Class F subscription agreement.

During the three and six months ended June 30, 2025, we fulfilled all requests under the share repurchase plan and repurchased 95,788 and 126,521 shares of common stock for $2.4 million and $3.2 million, respectively. For the three and six months ended June 30, 2024, we repurchased 1,200 shares of common stock for $29,000 and fulfilled all repurchase requests that were made under the share repurchase plan.

Distribution Reinvestment Plan

We have adopted a distribution reinvestment plan (“DRP”) whereby common stockholders will have their cash distributions automatically reinvested in additional shares of common stock unless they elect to receive their distributions in cash. The per share purchase price for shares purchased (including fractional shares) under the distribution reinvestment plan is equal to the transaction price at the time the distribution is payable.

Share-Based Compensation Plan

During the three months ended June 30, 2025, we awarded independent members of our board of directors 7,700 restricted shares of Class E common stock under the terms of our 2023 Equity Incentive Plan (the “Incentive Plan”). The restricted shares vest on the first anniversary of the grant date unless forfeited prior to such date, subject to certain conditions that accelerate vesting. During the three months ended June 30, 2024, we awarded 3,340 restricted shares of Class E common stock that vest on the first anniversary of the grant date unless forfeited under the Incentive Plan. For the three and six months ended June 30, 2025, we recognized $43,000 and $62,000, respectively, of compensation expense related to these awards. For the three and six months ended June 30, 2024, we recognized $20,000 and $37,000, respectively, of compensation expense related to these awards. As of June 30, 2025 and 2024, we had 1,085,971 and 1,093,671 shares of common stock available for future issuance under the Incentive Plan, respectively.

13.Earnings per Common Share

Earnings per share for the three and six months ended June 30, 2025 and 2024 is computed as presented in the table below.


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands, except share and per share amounts	2025		2024		2025		2024


Net income (loss) available to common stockholders	$	8,287	$	3,620	$	19,922	$	8,300



Weighted average common shares outstanding	31,307,099		10,729,623		29,281,449		8,956,409
Effect of dilutive restricted stock awards	27		28		52		306
Diluted weighted average common shares outstanding	31,307,126		10,729,651		29,281,501		8,956,715
Earnings (loss) per share:
Basic	$	0.26	$	0.34	$	0.68	$	0.93
Diluted	$	0.26	$	0.34	$	0.68	$	0.93

14.Commitments and Contingencies

Commitments and contingencies may arise in the ordinary course of business. As of June 30, 2025, we had unfunded commitments of $304.9 million for certain of our commercial real estate loan investments. The unfunded commitments consist of funding for leasing costs, interest reserves and capital expenditures. Funding depends on timing of lease-up, renovation and capital improvements as well as satisfaction of certain cash flow tests. Therefore, the exact timing and amounts of such future loan fundings are uncertain. We expect to fund our loan commitments over the weighted average remaining term of the related loans of 1.81 years.

We have also committed to pay counterparty legal, diligence and other fees in connection with new financing facilities in the ordinary course of business.

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2025, the Company was not involved in any material legal proceedings.

15.Segment Reporting

We conduct our business as a single operating segment. Because the accounting policies for the segment are the same as those described in Note 2 “Summary of Significant Accounting Policies,” to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2024, total segment net income and total segment assets are equal to total net income and total assets, as reported on our condensed consolidated statements of comprehensive income and condensed consolidated balance sheets, respectively. All revenues for the segment are derived from external customers.

16.Subsequent Events

Stockholders’ Equity

Subsequent to June 30, 2025, we issued the following shares of common stock:


$ in thousands except share amounts	Shares Issued to Third Parties		Shares Issued to Affiliates(1)(2)		DRP Shares(3)




Class S	20,686		—		250
Class S-1	2,194,519		—		53,917
Class D	—		—		67
Class D-1	—		—		—
Class I	983,178		—		19,793
Class E	8,166		54,719		537
Class F	—		—		53,033
Total	3,206,549		54,719		127,597

Total net proceeds(4)	$	80,564	$	—	$	3,240

(1)Affiliates include related parties discussed in Note 10 - “Related Party Transactions”.

(2)Includes 52,637 Class E shares issued to our Adviser as payment for management fees of $1.3 million and 2,082 Class E shares issued as equity compensation to an independent director in an amount equal to $53,000, both of which are excluded from Total net proceeds.

(3)Represents shares issued under our distribution reinvestment plan.

(4)With respect to DRP Shares, Total net proceeds represents total value of shares issued under our distribution reinvestment plan.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this quarterly report on Form 10-Q, or this “Quarterly Report,” we refer to Invesco Commercial Real Estate Finance Trust, Inc. and its consolidated subsidiaries as “we,” “us,” “the Company,” or “our,” unless we specifically state otherwise or the context indicates otherwise. We refer to our external manager, Invesco Advisers, Inc., as our “Adviser,” and we refer to the indirect parent company of our Adviser, Invesco Ltd. together with its consolidated subsidiaries (which does not include us), as “Invesco.”

The following discussion should be read in conjunction with our condensed consolidated financial statements and the accompanying notes to our condensed consolidated financial statements, which are included in Item 1 of this Quarterly Report, as well as the information contained in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

Forward Looking Statements

This Quarterly Report may include statements that constitute “forward-looking statements” within the meaning of the United States securities laws and the Private Securities Litigation Reform Act of 1995, and such statements are intended to be covered by the safe harbor provided by the same. These forward-looking statements may include statements about possible or assumed future results of our business, investment strategies, financial condition, liquidity, results of operations, distributions, repurchases plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “project,” “forecast” or similar expressions and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” and any other statement that necessarily depends on future events, we intend to identify forward-looking statements, although not all forward-looking statements may contain such words.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are difficult to predict and are generally beyond our control. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. You should not place undue reliance on these forward-looking statements. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. We caution you not to rely unduly on any forward-looking statements and urge you to carefully consider the factors described under the headings "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Report and our Annual Report on Form 10-K. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Executive Overview

Introduction

We are a Maryland corporation formed in October 2022. Our primary investment strategy is to originate, acquire, and manage a diversified portfolio of loans and debt-like preferred equity interests secured by, or unsecured but related to, commercial real estate. To a lesser extent, we may purchase non-distressed public or private debt securities and invest in private operating companies in the business of or related to commercial real estate credit through debt or equity investment. We commenced investing in commercial real estate loans in May 2023. Prior to investing, we were primarily engaged in organizational activities.

We are externally managed by Invesco Advisers, Inc. (the “Adviser”), a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd., an independent global investment management firm. Our Adviser utilizes the personnel and global resources of Invesco Real Estate to provide investment management services to us. We qualified to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2023. To maintain our REIT qualifications, we are generally required to distribute at least 90% of our REIT taxable income to our stockholders annually. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income (determined without regard to our net capital gain and dividends-paid deduction) to stockholders and maintain our qualification as a REIT. We operate our business in a manner that permits our exclusion from the definition of “Investment Company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

We are engaging in a continuous, unlimited private offering of our common stock to “accredited investors” (as defined by Rule 501 promulgated pursuant to the Securities Act) (the “Continuous Offering”) under exemptions provided by Section 4(a)(2) of the Securities Act and applicable state securities laws.

Factors Impacting Our Operating Results

Our operating results can be affected by a number of factors and depend on loan origination activity, interest earned on the commercial loan investments held in the portfolio, interest paid on the borrowing facilities of the portfolio and changes in the fair value of our commercial real estate loan investments and our borrowings. Our net interest income varies primarily as a result of the number of loan originations in the period, the timing of entering into new borrowing arrangements, repayments from the borrower of the outstanding principal balance of our loan assets during the period, and changes in benchmark interest rates and market spreads. Market spreads vary according to the type of investment or borrowing, conditions in the financial markets, competition and other factors, none of which can be predicted with any certainty.

Due to the floating rate nature of our loan portfolio, we are subject to changes in benchmark rates. Decline in benchmark interest rates could ultimately lead to lower interest income received from our floating rate debt investments. To mitigate the impact of reduced interest income as a result of declining benchmark rates, we have structured interest rate floors for each of the loans where the borrower will be required to pay minimum debt service payments should rates fall below a predetermined amount. Additionally, during a falling benchmark interest rate environment, our overall cost of borrowings decreases as well.

We have elected the fair value option for our commercial real estate loan investments, real estate-related securities, secured lending and term lending agreements (collectively, our secured financing facilities), our revolving credit facility, and our collateralized loan obligations. The fair value of our commercial real estate loans can be impacted by changes in credit spread premiums (yield advantage over a benchmark rate) and the supply of, and demand for, assets in which we invest.

Operating results can also be impacted by foreign currency risk from investments denominated in currencies other than the U.S. dollar (“USD”). We hedge the non-USD exposure in the portfolio via forward contracts with the goal to mitigate foreign currency impacts to the portfolio.

Market Conditions

For the quarter ended June 30, 2025, the Company originated seven commercial real estate loans with an aggregate total loan commitment amount of $705.5 million and a spot coupon of 11.09% based on the weighted average interest rate on our net committed equity position as of June 30, 2025.

The portfolio saw a slight increase in weighted average net spread, going from 6.82% in the first quarter 2025 to 6.87% in the second quarter 2025. The weighted average interest rate spread on our net committed equity position is comprised of the difference between the spread on our commercial real estate loans applied to the committed loan amounts less the spread on our borrowings applied to the total financing. This difference is divided by our net committed equity position. The weighted average interest rate is the spread combined with the applicable benchmark rate (in effect on June 30, 2025) after considering any impact of the interest rate floor.

The start of the quarter began with shifts in tariff policies resulting in a period of market volatility, particularly in public equities and fixed income markets. Commercial mortgage-backed securities (“CMBS”) and corporate spreads saw a sharp increase in early April related to Liberation Day volatility, and, although there has been some normalization, CMBS spreads as of quarter-end remained slightly wider than in the first quarter. Additionally, there was an increase in competition among private debt lenders during the second quarter which translated into spread compression within 0.05% to 0.10% on floating rate debt. U.S. commercial real estate transaction volume is estimated to have risen 5.00% to 8.00% in second quarter of this year from the first quarter, reflecting improved sentiment and macroeconomic conditions.

As of June 30, 2025, the Federal Reserve has held interest rates steady between 4.25% and 4.50% since December 2024 while the European Central Bank cut interest rates another 0.25% to 2.00%. Management is continuing to monitor inflation trends (especially considering tariff policy shift) and impacts to central banks’ policies during the second half of the year.

Outlook

We expect that the competitive landscape will normalize over the next two years, with increasing competition from debt funds and higher levels of bank lending. We expect credit spreads to continue to tighten due to increased competition among debt funds, which has been offset somewhat by a decrease in cost of capital from secured financing facilities. Tightening spreads on whole loan originations may result in positive impacts to valuations as well as negative impact to interest and spot coupon rates

to varying degrees. Spreads on our secured financing facilities tend to move directionally with spread movement on whole loans creating a reverse and potentially offsetting impact.

While some larger banks may increase lending activity as loans are repaid, many small and regional banks will likely continue to struggle with the large volume of loans made when interest rates were low. Loans made prior to the Federal Reserve’s rate increases starting in 2022 likely lost value, and lenders are still working through loans originated during the time of peak real estate values. We will continue to monitor the competitive landscape and prioritize credit discipline, and expect to continue to benefit from a relatively new loan portfolio with originations beginning in 2023.

We believe the Company is well positioned to benefit from a prudently managed portfolio and a disciplined investment approach. Our “credit-over-yield” philosophy should allow us to provide durable current income to stockholders while seeking to manage risk during the current market environment. We believe private credit assets secured by commercial real estate remain appealing for several reasons, including historically attractive long-term risk-adjusted returns compared to both fixed income and equity alternatives, security in the capital stack at reset values, downside protection afforded by asset-backed lending, and limited correlation with other fixed income investments.

Q2 2025 Highlights

Capital Activity and Distributions

•Declared monthly net distributions totaling $14.3 million for the quarter ended June 30, 2025.

•Raised $118.8 million of net proceeds from the sale of our common stock through our Continuous Offering during the quarter ended June 30, 2025.

Investments

•Originated six floating rate senior commercial real estate loans in the United States with a total commitment amount of $488.8 million and total outstanding principal amount of $464.7 million as of June 30, 2025, including self-storage, student housing, multifamily and industrial properties.

•Originated a $216.7 million (£158.0 million) floating rate senior commercial real estate loan secured by a portfolio of logistics warehouses located in the United Kingdom.

•We purchased $9.8 million in real estate-related securities during the three months ended June 30, 2025.

Financing Activity

•Financed a pool of loans and loan participations from our existing loan portfolio through a managed CLO, contributing $1.2 billion of commercial real estate loan investments into the CLO, issuing $1.2 billion of Secured Notes and Income Notes and retaining $219 million of the CLO, consisting of Classes D, E, F, and G and the Income Notes.

•Repaid $342.8 million to our secured financing facilities for the three months ended June 30, 2025.

Financial Condition

Investment Activities

We commenced investing in domestic commercial real estate loans in May 2023 and in European loans in September 2024. As of June 30, 2025, we originated 63 commercial real estate loans with a fair value of $3.6 billion. We elected the fair value option for our commercial real estate loan investments and, accordingly, recognize any origination costs or fees associated with the loans in the period of origination. Our domestic loan investments earn interest at Term SOFR plus a spread and had a weighted average interest rate of 7.22% as of June 30, 2025. Our European loans earn interest at either three-month Euribor or three-month SONIA and had a weighted average interest rate of 6.65% at June 30, 2025. During the three months ended June 30, 2025, we earned $55.2 million of interest income on these loans.

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


$ in thousands	June 30, 2025			December 31, 2024			June 30, 2024
Number of investments	63			46			22
Principal balance	$	3,546,862		$	2,390,362		$	1,119,807
Fair value	$	3,550,378		$	2,391,078		$	1,121,010
Unfunded loan commitments(1)	$	304,927		$	298,266		$	258,764
Weighted-average interest rate(2)	7.13		%	7.38		%	8.41		%
Weighted-average maximum maturity (years)(3)	4.0			4.3			4.5
Origination loan-to-value (LTV)(4)	63		%	63		%	62		%

(1) Unfunded commitments will primarily be funded to finance construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These future commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date.

(2) Represents weighted average interest rate as of period end.

(3) Assumes all extension options are exercised by the borrower; however, loans may be repaid prior to such date. Extension options are subject to certain conditions, as defined in the respective loan agreement.

(4) LTV is generally based on the initial loan amount and the independent property appraisals at the time of origination.

The following charts illustrate the diversification and composition of our loan portfolio based on fair value as of June 30, 2025:

The following table details our loan activity:


	Three Months Ended		Six Months Ended
$ in thousands	June 30, 2025		June 30, 2025
Loan originations	$	678,334	$	1,047,067
Loan fundings	57,119		73,092
Loan repayments and sales	—		—
Total net fundings	$	735,453	$	1,120,159

The following table provides details of our loan portfolio, on a loan-by-loan basis, as of June 30, 2025:


$ in thousands
Metropolitan Statistical Area	Property Type	Origination Date	Weighted Average Interest Rate(1)	Loan Amount(2)		Principal Balance Outstanding		Fair Value		Current Maturity	Maximum Maturity(3)
Phoenix	Industrial	05/17/2023	7.66%	$	136,000	$	124,719	$	124,913	6/9/2026	6/9/2028
San Jose	Multifamily	05/31/2023	7.47%	41,700		41,700		41,700		6/9/2026	6/9/2028
New York (4)	Multifamily	07/26/2023	7.42%	73,600		73,600		73,600		8/9/2026	8/9/2028
Los Angeles	Multifamily	08/04/2023	7.42%	85,180		81,037		81,037		8/9/2025	8/9/2028
Miami	Industrial	08/25/2023	7.67%	42,676		36,700		36,700		9/9/2025	9/9/2028
Richmond	Industrial	09/25/2023	7.66%	38,300		35,363		35,418		10/9/2025	10/9/2028
Atlanta	Industrial	11/06/2023	7.66%	92,950		87,206		87,340		11/9/2025	11/9/2028
Dallas	Multifamily	12/07/2023	7.12%	70,000		65,750		65,750		12/9/2026	12/9/2028
Seattle	Multifamily	12/12/2023	7.27%	68,500		68,500		68,500		12/9/2026	12/9/2028
New York (5)	Multifamily	12/21/2023	7.32%	22,500		22,500		22,545		12/9/2026	12/9/2028
Houston	Multifamily	01/24/2024	7.32%	61,500		61,000		61,122		2/9/2027	2/9/2029
New York	Multifamily	02/08/2024	7.32%	120,000		76,865		77,019		2/9/2027	2/9/2029
Orange County	Multifamily	03/05/2024	7.47%	56,600		56,520		56,520		3/9/2027	3/9/2029
Los Angeles	Multifamily	03/28/2024	7.32%	45,000		41,535		41,618		4/9/2026	4/9/2029
Los Angeles	Multifamily	04/12/2024	7.37%	66,050		61,722		61,845		4/9/2027	4/9/2029
New York	Multifamily	05/02/2024	7.32%	150,000		74,600		74,668		5/9/2027	5/9/2029
Fort Worth	Multifamily	05/15/2024	7.22%	22,500		21,775		21,775		6/9/2026	6/9/2029
Fort Worth	Multifamily	05/15/2024	7.22%	23,650		23,500		23,500		6/9/2026	6/9/2029
Orange County	Industrial	05/31/2024	7.17%	47,275		43,740		43,799		6/9/2027	6/9/2029
Dallas	Multifamily	06/07/2024	7.12%	40,740		37,869		37,903		6/9/2027	6/9/2029
San Francisco	Multifamily	06/17/2024	6.97%	33,500		30,940		31,019		7/9/2027	7/9/2029
Jacksonville	Multifamily	06/28/2024	7.42%	40,350		39,184		39,184		7/9/2027	7/9/2029
Various U.S.	Self-Storage	07/10/2024	7.52%	42,448		41,813		41,817		8/9/2027	8/9/2029
Houston	Multifamily	07/24/2024	7.22%	50,750		49,750		49,756		8/9/2026	8/9/2029
Tampa	Multifamily	08/01/2024	7.02%	41,750		41,750		41,755		8/9/2027	8/9/2029
Dallas	Multifamily	08/01/2024	7.17%	44,000		44,000		44,005		8/9/2026	8/9/2029
Las Vegas	Industrial	08/20/2024	7.12%	55,515		53,325		53,408		9/9/2027	9/9/2029
Various U.S.	Self-Storage	08/27/2024	7.52%	11,267		10,592		10,594		9/9/2027	9/9/2029
Washington D.C.	Multifamily	08/28/2024	7.07%	101,000		98,858		98,927		9/9/2027	9/9/2029
Various U.S.	Industrial	08/30/2024	7.72%	83,500		77,766		77,801		9/9/2027	9/9/2029
Various U.S.	Industrial	09/12/2024	7.07%	128,010		122,575		122,820		10/9/2027	10/9/2029
Various U.S.	Industrial	09/13/2024	7.07%	47,881		47,881		47,977		10/9/2027	10/9/2029
Europe	Industrial	09/26/2024	5.54%	107,448		107,448		107,526		10/9/2027	10/9/2028
Europe	Industrial	09/26/2024	5.96%	95,998		95,998		96,069		10/9/2027	10/9/2028
Bristol, United Kingdom	Industrial	09/26/2024	7.48%	113,827		113,827		114,070		10/9/2027	10/9/2028
Tacoma	Self-Storage	10/08/2024	7.52%	13,356		13,054		13,058		10/9/2027	10/9/2029
Gainesville	Self-Storage	10/08/2024	7.52%	7,030		6,914		6,916		10/9/2027	10/9/2029
Lynchburg	Self-Storage	10/08/2024	7.52%	14,225		13,637		13,641		10/9/2027	10/9/2029
Los Angeles	Multifamily	10/10/2024	7.17%	22,545		20,776		20,822		10/9/2026	10/9/2029
Washington D.C.	Multifamily	10/15/2024	7.02%	98,900		97,570		97,654		10/9/2027	10/9/2029
San Jose (6)	Industrial	10/31/2024	12.07%	30,000		21,145		21,145		10/31/2027	10/31/2029
New York (7)	Multifamily	12/06/2024	7.07%	61,897		61,397		61,520		12/9/2027	12/9/2029
Orange County	Industrial	12/13/2024	7.27%	67,832		54,411		54,513		1/9/2028	1/9/2030
Riverside	Industrial	12/17/2024	7.52%	58,092		48,182		48,272		1/9/2028	1/9/2030
Ft Lauderdale	Self-Storage	12/18/2024	7.52%	14,251		13,384		13,391		1/9/2028	1/9/2030
Chicago	Industrial	12/20/2024	7.27%	31,802		30,415		30,473		1/9/2028	1/9/2030
Austin	Industrial	01/16/2025	7.37%	26,042		22,306		22,350		2/9/2028	2/9/2030
Raleigh	Student Housing	01/30/2025	7.02%	43,460		39,330		39,416		2/9/2027	2/9/2030
Baton Rouge	Student Housing	02/06/2025	7.02%	29,500		22,750		22,800		2/9/2027	2/9/2030
Columbia	Student Housing	02/06/2025	7.02%	29,750		25,491		25,547		2/9/2027	2/9/2030
Portland	Multifamily	02/13/2025	7.02%	60,165		59,483		59,624		3/9/2027	3/9/2030
Austin	Student Housing	02/19/2025	7.02%	49,943		45,363		45,462		3/9/2027	3/9/2030
Eugene	Student Housing	02/19/2025	7.02%	73,053		64,300		64,441		3/9/2027	3/9/2030
Knoxville	Student Housing	02/20/2025	7.02%	98,290		80,500		80,714		3/9/2027	3/9/2030
Minneapolis	Self-Storage	03/11/2025	7.42%	7,475		6,984		6,965		4/9/2028	4/9/2030
Philadelphia	Self-Storage	03/11/2025	7.42%	6,715		6,153		6,136		4/9/2028	4/9/2030


$ in thousands
Metropolitan Statistical Area	Property Type	Origination Date	Weighted Average Interest Rate(1)	Loan Amount(2)		Principal Balance Outstanding		Fair Value		Current Maturity	Maximum Maturity(3)
Athens	Student Housing	04/01/2025	6.82%	22,000		20,118		20,156		4/9/2027	4/9/2030
Athens	Student Housing	04/01/2025	6.82%	27,200		22,866		22,909		4/9/2027	4/9/2030
New York	Multifamily	04/15/2025	6.67%	25,682		21,332		21,338		5/9/2028	5/9/2030
Boston	Self-Storage	05/19/2025	7.17%	9,276		8,750		8,772		6/9/2028	6/9/2030
Portland	Multifamily	05/21/2025	6.72%	50,110		50,110		50,110		6/9/2027	6/9/2030
Various U.S.	Industrial	06/09/2025	6.62%	354,550		341,550		341,550		6/9/2028	6/9/2030
London, United Kingdom	Industrial	06/17/2025	7.07%	216,683		216,683		216,683		7/10/2027	7/10/2028
			7.13%	$	3,851,789	$	3,546,862	$	3,550,378

(1)Represents weighted average interest rate of the most recent interest period in effect for each loan as of period end. Domestic loans earn interest at the one-month Term SOFR plus a spread. Euro denominated loans earn interest at three-month Euribor plus a spread. Our loan denominated in British pound sterling earns interest at three-month SONIA plus a spread.

(2)Loan amount consists of outstanding principal balance plus unfunded loan commitments.

(3)Maximum maturity assumes all extension options are exercised by the borrower; however, loans may be repaid prior to such date. Extension options are subject to certain conditions as defined in the respective loan agreement.

(4)The total whole loan is $73.6 million, including (i) a senior mortgage loan of $55.2 million, and (ii) a mezzanine note of $18.4 million.

(5)The total whole loan is $22.5 million, including (i) a senior mortgage loan of $18.0 million and (ii) a mezzanine note of $4.5 million.

(6)This loan is a mezzanine loan.

(7)The total whole loan is $61.9 million, including (i) a senior mortgage loan of $49.5 million and (ii) a mezzanine note of $12.4 million.

Significant Borrowers/Sponsors

As of June 30, 2025, we have invested in 63 commercial real estate loans with a fair value of $3.6 billion. Our portfolio consists of the following significant borrowers or sponsors:


$ in thousands
Counterparty	Loan Count	Fair Value		% of Loan Portfolio
Sponsor A(1)	8	$	375,965	11	%
Sponsor B - Facility I(2)	6	$	252,815	7	%
Sponsor B - Facility II(2)	9	$	121,290	3	%
Sponsor B - Facility III(2)	7	$	240,731	7	%
Borrower A	1	$	341,550	10	%

(1) These loans are affiliated with a single institutional investment manager as of June 30, 2025.

(2) Within each of the three Facilities, the individual loans may have separate borrowers but are cross-collateralized and cross-defaulted. The loans are not cross collateralized or cross defaulted across Facilities, however, and the credit exposure of each Facility’s loans is contained within its distinct Facility.

Loan Risk Ratings

We evaluate each loan at origination and assign an overall risk rating based on several factors, including but not limited to, credit metrics and volatility, sponsorship, sector type, property condition and performance, and market to determine the overall health of each loan investment in the portfolio (“Loan Risk Rating”). Loans are rated “1” (very low risk), “2” (low risk), “3” (medium risk), “4” (high risk/potential for loss), or “5” (impaired/loss likely). We re-evaluate the loan risk ratings on our loan portfolio quarterly and update risk ratings as needed.

Our loan portfolio had a weighted-average loan risk rating of 2.8 as of June 30, 2025 and 2.8 as of December 31, 2024.

Real Estate-Related Securities

As of June 30, 2025, our liquid real estate-related securities portfolio consisted of investments in commercial mortgage-backed securities (“CMBS”). We did not hold real estate-related securities as of December 31, 2024. The following table details overall statistics for our investments in real estate-related securities as of June 30, 2025:


$ in thousands	June 30, 2025
Number of investments	7
Principal balance	$	9,814
Amortized cost	$	9,743
Fair value	$	9,763
Period-end weighted average yield	6.22		%
Weighted average maturity date	August 2037

Financing and Other Liabilities

We finance the majority of our commercial real estate loan portfolio through collateralized loan obligations and secured financing facilities, which are structured as repurchase agreements and term lending agreements.

Pursuant to our fair value option election described in the notes to our financial statements, we mark to market assets and liabilities associated with our financing arrangements for financial reporting purposes. Certain of our financing arrangements, however, are not contractually subject to credit or capital markets mark-to-market provisions with respect to margin call rights (i.e. liability repayment) and are referred in the below table as “Non-Mark-to-Market” financing arrangements.

We utilize a revolving line of credit as a short-term cash management tool to pay fees and expenses and bridge portfolio-level financing arrangements. Our revolving line of credit bears interest at a one-month Term SOFR plus a spread and had a weighted average borrowing rate of 7.20% as of June 30, 2025.

The table below summarizes our financing liabilities as of June 30, 2025(1). These facilities charge interest at one-month Term SOFR plus a spread for our USD denominated borrowings, three-month Euribor plus a spread for our Euro denominated borrowings, and three-month SONIA plus a spread for our British pound sterling denominated borrowings. Secured financing facilities had a weighted average borrowing rate of 6.03% as of June 30, 2025.


$ in thousands	Non-/Mark-to-Market	Maximum Facility Size		Amount Outstanding		Available Balance

Collateralized Loan Obligations
INCREF 2025-FL1	Non-Mark-to-Market	$	998,234	$	998,234	$	—

Term Lending Agreement
INCREF Lending II	Non-Mark-to-Market	300,000		147,673		152,327

Secured Lending Agreements
Term Financing
INCREF Lending I	Non-Mark-to-Market	837,517		730,042		107,475

Repurchase Agreements
Morgan Stanley Bank	Mark-to-Market	500,000		330,876		169,124
Citibank	Mark-to-Market	500,000		427,164		72,836
Barclays	Mark-to-Market	500,000		—		500,000
Wells Fargo	Mark-to-Market	300,000		104,452		195,548
Bank of Montreal	Mark-to-Market	25,000		—		25,000
Capital One	Mark-to-Market	250,000		86,641		163,359
		$	4,210,751	$	2,825,082	$	1,385,669

Revolving Credit Facility		$	162,000	$	—	$	162,000

(1) See Note 5 - “Borrowings” and Note 6 — “Collateralized Loan Obligations” for important footnotes to the borrowings table and other disclosures.

Each of our secured financing facilities contains customary terms and conditions, including but not limited to, negative covenants relating to restrictions on our operations with respect to our status as a REIT, and financial covenants, such as a minimum interest coverage ratio covenant, minimum tangible net worth covenant, cash liquidity covenant and maximum Leverage Ratio covenant.

With respect to our revolving credit facility, we are required to comply with customary loan covenants and event of default provisions that include, but are not limited to, negative covenants relating to restrictions on operations with respect to our status as a REIT, and financial covenants. Such financial covenants include a minimum aggregate net capital contributions to net costs of investments ratio covenant and a maximum Leverage Ratio covenant.

As of June 30, 2025, we were in compliance with the covenants of our financing facilities.

On May 7, 2025, the Company entered into a CLO, contributing $1.2 billion of commercial real estate loan investments into the CLO and issuing $1.2 billion of notes. The Company retained $219 million of the CLO. The rated notes bear interest at Term SOFR plus a spread and will mature at par on the payment date in October 2042, unless redeemed or repaid prior thereto. The proceeds from the issuance, after payment of certain fees and expenses, were primarily used to repay amounts owed to certain repurchase agreement facility lenders, creating $879 million in available warehouse capacity at that date.

The table below summarizes our collateralized loan obligations as of June 30, 2025.


	Facility						Collateral
$ in thousands	Term	Weighted Average Interest Rate(1)	Amount Outstanding		Fair Value		Count	Principal Balance Outstanding		Fair Value

INCREF 2025-FL1	Oct 2042	6.27%	$	998,234	$	1,001,129	30	$	1,217,359	$	1,220,104
Total			$	998,234	$	1,001,129	30	$	1,217,359	$	1,220,104

(1) Represents the weighted average interest rate in effect as of June 30, 2025.

Results of Operations

For the three and six months ended June 30, 2025 and 2024, our results of operations consisted of:


	Three Months Ended June 30,						Six Months Ended June 30,
$ in thousands except per share amount	2025		2024		$ Change		2025		2024		$ Change
Net Interest Income
Commercial real estate loan interest income	$	55,221	$	20,415	$	34,806	$	102,062	$	35,555	$	66,507
Real estate related-securities interest income	50		—		50		50		—		50
Other interest income	1,059		587		472		2,034		828		1,206
Interest expense	(37,323)		(13,843)		(23,480)		(68,620)		(24,249)		(44,371)
Net interest income	19,007		7,159		11,848		35,526		12,134		23,392

Other Income (Expense)
Unrealized gain (loss) on loans, net	26,414		285		26,129		39,094		1,203		37,891
Unrealized gain (loss) on real estate-related securities, net	20		—		20		20		—		20
Unrealized gain (loss) on secured financing facilities, net	(20,681)		(199)		(20,482)		(29,155)		(922)		(28,233)
Unrealized gain (loss) on collateralized loan obligations, net	(5,153)		—		(5,153)		(5,153)		—		(5,153)
Gain (loss) on derivative instruments, net	(5,362)		—		(5,362)		(7,542)		—		(7,542)
Gain (loss) on foreign currency transactions, net	(117)		—		(117)		(108)		—		(108)
Commitment fee income, net of related party expense of $3,246, $5,365, $2,120 and $3,518 for the three and six months ended June 30, 2025 and 2024, respectively	3,459		2,120		1,339		5,578		3,518		2,060
Other income	290		249		41		579		350		229
Total other income (expense), net	(1,130)		2,455		(3,585)		3,313		4,149		3,313

Expenses
Management and performance fees - related party	1,838		952		886		3,668		1,302		2,366
Debt issuance and other financing costs related to borrowings, at fair value	5,478		3,221		2,257		10,394		3,690		6,704
Organizational costs	—		14		(14)		2		19		(17)
General and administrative	2,274		1,800		474		4,824		2,958		1,866
Total expenses	9,590		5,987		3,603		18,888		7,969		10,919

Net income (loss)	$	8,287	$	3,627	$	4,660	$	19,951	$	8,314	$	11,637
Dividends to preferred stockholders	—		(7)		7		(2)		(14)		12
Issuance and redemption costs of redeemed preferred stock	—		—		—		(27)		—		(27)
Net income (loss) attributable to common stockholders	$	8,287	$	3,620	$	4,667	$	19,922	$	8,300	$	11,622

Earnings (loss) per share:
Net income (loss) attributable to common stockholders
Basic	$	0.26	$	0.34	$	(0.08)	$	0.68	$	0.93	$	(0.25)
Diluted	$	0.26	$	0.34	$	(0.08)	$	0.68	$	0.93	$	(0.25)
Weighted average number of shares of common stock
Basic	31,307,099		10,729,623		20,577,476		29,281,449		8,956,409		20,325,040
Diluted	31,307,126		10,729,651		20,577,475		29,281,501		8,956,715		20,324,786

(1) Net income in the above table differs from comprehensive income in the condensed consolidated statements of comprehensive income due to the currency translation adjustment of $123,000 and $149,000 for the three and six months ended June 30, 2025, respectively. The currency translation adjustment represents gains or losses from converting consolidated foreign subsidiaries' financial statements into the parent company's reporting currency for financial reporting purposes. These amounts do not result from operations and are not reflected above in net income.

Net Income (Loss) attributable to Common Stockholders

Net income (loss) attributable to common stockholders increased by $4.7 million during the three months ended June 30, 2025, and increased by $11.6 million during the six months ended June 30, 2025, as compared to June 30, 2024. We originated seven and 17 loans during the three and six months ended June 30, 2025, compared to eight and 12 loan originations during the three and six months ended June 30, 2024. The increase across both periods was primarily due to the increase in the number of commercial real estate loan originations during the period, which resulted in an increase in net interest income and commitment fee income, net of related party expenses, as compared to June 30, 2024, as illustrated in the table above.

Net Interest Income

Interest Income and Average Earning Asset Yields

The table below presents information related to our average earning assets and earning asset yields for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,						Six Months Ended June 30,
$ in thousands	2025			2024			2025			2024
Average earning assets(1)	$	3,150,182		$	1,006,322		$	2,911,215		$	873,637
Average earning assets yield(2)	7.02		%	8.11		%	7.02		%	8.14		%

(1) Average earning assets are based on weighted month-end balances.

(2) Average earning asset yield is calculated by dividing interest income by average earning assets. All yields are annualized. Average earning assets yield decreased compared to the prior period due to a combination of reduced benchmark rates and reduced pricing on our commercial real estate loan investments.

Interest Expense

The tables below present information related to our borrowings and cost of funds for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30, 2025								Three Months Ended June 30, 2024
$ in thousands	Average Borrowings(1)		Interest Expense		Average Cost of Funds(2)		Maximum Borrowings(3)		Average Borrowings(1)		Interest Expense		Average Cost of Funds(2)		Maximum Borrowings(3)
Secured financing facilities	$	1,780,171	$	27,506	6.18	%	$	2,182,240	$	767,624	$	13,689	7.13	%	$	848,832
Revolving credit agreement	—		—		—	%	—		6,333		154		9.70	%	10,000
Collateralized loan obligations	995,910		9,817		5.91	%	995,976		—		—		—	%	—
Total	$	2,776,081	$	37,323	6.08	%	$	3,178,216	$	773,957	$	13,843	7.15	%	$	858,832


	Six Months Ended June 30, 2025								Six Months Ended June 30, 2024
$ in thousands	Average Borrowings(1)		Interest Expense		Average Cost of Funds(2)		Maximum Borrowings(3)		Average Borrowings(1)		Interest Expense		Average Cost of Funds(2)		Maximum Borrowings(3)
Secured financing facilities	$	1,911,815	$	58,578	6.13	%	$	2,182,240	$	659,063	$	23,823	7.23	%	$	848,832
Revolving credit agreement	6,221		225		7.25	%	135,000		12,500		426		6.82	%	38,000
Collateralized loan obligations	995,910		9,817		5.91	%	995,976		—		—		—	%	—
Total	$	2,913,946	$	68,620	6.06	%	$	3,313,216	$	671,563	$	24,249	7.22	%	$	886,832

(1) Average borrowings are based on weighted month-end balances. Average borrowings increased to finance new investments which grew correspondingly during the period.

(2) Average cost of funds is calculated by dividing annualized interest expense by average borrowings. Average cost of funds decreased compared to the prior period due to a combination of reduced benchmark rates and reduced pricing on our secured financing facilities.

(3) Amount represents the maximum borrowings at each month-end within the period.

Other Income (Expense), Net

For the three and six months ended June 30, 2025, we did not observe material changes in the collateral risks in our portfolio. We compared the features of our loans to the interest rates and terms required by lenders in the new loan origination market for similar loans, and the yield required by investors acquiring similar loans in the secondary market. We also compared current market and collateral conditions to those present at origination or acquisition. Similarly, for our secured financing facilities, we reviewed market interest rates, which reflect estimates for how lenders would price equivalent loans for the remaining terms, for similar borrowing agreements with comparable loan-to-value ratios and credit profiles.

Unrealized gain (loss) on loans, net, was a net gain of $26.4 million and $39.1 million during the three and six months ended June 30, 2025, respectively, comprised of a net unrealized gain of $935,000 and $2.8 million, respectively, related to fair value marks in the period and an unrealized foreign exchange gain of $25.5 million and $36.4 million, respectively, relating to foreign exchange rate movements on our non-U.S. dollar denominated commercial real estate loan investments and intercompany loans used to fund loan investments in certain foreign jurisdictions. For the three and six months ended June 30, 2024, unrealized gain (loss) on loans, net was a net gain of $285,000 and $1.2 million, respectively, related to the fair value marks in the period on the portfolio. There were no foreign exchange gains or losses in the three and six months ended June 30, 2024, as there were no foreign currency-denominated loans in the portfolio in the comparative period.

Unrealized gain (loss) on secured financing facilities, net was a net loss of $20.7 million and $29.2 million during the three and six months ended June 30, 2025, respectively, comprised of a net unrealized loss of $277,000 and $82,000, respectively, related to fair value marks in the period and unrealized foreign exchange losses of $20.4 million and $29.1 million, respectively, from foreign exchange rate movements on our non-U.S. dollar secured financing facilities. For the three and six months ended June 30, 2024, unrealized gain (loss) on secured financing facilities, net was a net loss of $199,000 and $922,000, respectively, related to the fair value marks in the period. There were no foreign exchange gains or losses in the three and six months ended June 30, 2024 as there were no foreign currency-denominated borrowings in the comparative period.

Unrealized gain (loss) on collateralized loan obligations, net was a net loss of $5.2 million for both the three and six months ended June 30, 2025. As the Company entered into the related CLO in the current period, there were no unrealized gains or losses on collateralized loan obligations in the three and six months ended June 30, 2024.

We enter into currency forward contracts to help mitigate the impact of changes in foreign currency exchange rates on our investments and financing transactions denominated in currencies other than the United States dollar. Despite being economic hedges, we have elected not to treat our foreign currency forwards as hedges for accounting purposes and, therefore, the realized and unrealized gains and losses associated with such instruments are included in gain (loss) on derivative instruments, net and may not fully offset the foreign exchange gains and losses on the loans and secured financing facilities. For the three and six months ended June 30, 2025, we recorded an unrealized loss on currency forward contracts of $5.4 million and $7.7 million, respectively.

Borrowers pay a commitment fee that is calculated as a percent of the whole loan on a fully-funded basis, as determined by the Adviser at the time of origination. We pay our Adviser 50% (not to exceed 0.5% of the whole loan amount on a fully-funded basis) of any commitment fee charged to borrowers in connection with each new loan. We recognize commitment fees immediately in earnings because we elected the fair value option for our loan investments. For the three and six months ended June 30, 2025, respectively, we earned approximately $3.5 million and $5.6 million of commitment fee income, after related party expenses, and $290,000 and $579,000 of other income on our loan investments. We originated seven and 17 loans during the three and six months ended June 30, 2025, compared to eight and 12 loan originations during the three and six months ended June 30, 2024.

Expenses

Our expenses for the three and six months ended June 30, 2025 totaled $9.6 million and $18.9 million, respectively, and primarily consisted of management and performance fees, debt issuance and other financing costs, and general and administrative expenses. Expenses increased by $3.6 million and $10.9 million as compared to the three and six months ended June 30, 2024, due to the increase in the Company’s business activities since June 30, 2024. The number of commercial real estate loan investments had increased to 63 at June 30, 2025 from 22 at June 30, 2024.

Management fees and performance fees began to accrue on March 1, 2024. Management fees are accrued monthly and paid quarterly in arrears and performance fees are paid annually. The management fee is based on our NAV and is paid to the Adviser as compensation for services provided under the Advisory Agreement. The performance fee is based on Performance

Fee Income, as defined in our Advisory Agreement. We will not pay the Adviser a performance fee with respect to any class of shares that has a negative total return per share for the calendar year. Total return is determined based on total distributions plus the change in NAV. During the three and six months ended June 30, 2025, we incurred management fees of $1.3 million and $2.4 million and performance fees of $490,000 and $1.3 million, respectively, compared to management fees of $307,000 and $452,000 and performance fees of $645,000 and $850,000, incurred in the three and six months ended June 30, 2024, respectively.

We expense debt issuance costs as incurred because we elected the fair value option for our secured financing facilities and revolving credit facility. When we incur debt issuance costs prior to a debt facility closing, we expense the costs as incurred if we intend to elect the fair value option to account for the debt facility and the closing is probable as of the balance sheet date. Our debt issuance and other financing costs primarily consist of upfront lender fees and legal costs directly associated with entering into our debt facilities. For the three and six months ended June 30, 2025, debt issuance and other financing costs increased by $2.3 million and $6.7 million, respectively, as compared to the three and six months ended June 30, 2024 due to increased business activity and current period CLO financing. For the three and six months ended June 30, 2025, average secured financing facilities borrowings were $1.8 billion and $1.9 billion, respectively, as compared to $767.6 million and $659.1 million for the three and six months ended June 30, 2024, respectively.

Our general and administrative expenses primarily consisted of accounting, auditing, legal and other professional fees. Our general and administrative expenses for the three and six months ended June 30, 2025 increased by $474,000 and $1.9 million, respectively, as compared to the three and six months ended June 30, 2024. The increase is primarily due to accounting, legal and other professional fees reflective of the increase in activity over the comparative period.

Net Asset Value (“NAV”)

We calculate our NAV each month in accordance with valuation guidelines approved by our board of directors. We calculate our NAV for each class of shares based on the net asset values of our investments (including but not limited to commercial real estate loans and debt securities), the addition of any other assets (such as cash, restricted cash, receivables, and other assets obtained in the ordinary course of business), and the deduction of any liabilities (including but not limited to financing facilities, Company-level credit facilities, securitized loans, payables, and other liabilities incurred in the ordinary course of business). NAV is not a measure used under U.S. GAAP and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV differs from U.S. GAAP. NAV is not equivalent to stockholders’ equity or any other U.S. GAAP measure.

The following table details the major components of our NAV as of June 30, 2025 and December 31, 2024:



$ in thousands, except share data	June 30, 2025		December 31, 2024
Commercial real estate loan investments, at fair value	$	3,550,378	$	2,391,078
Real estate-related securities, at fair value	9,763		—
Cash and cash equivalents	100,859		80,221
Restricted cash	23,058		19,813
Interest receivable	15,204		12,600

Derivative assets, at fair value	—		4,064
Other assets(1)	1,816		332
Unamortized debt costs	15,437		5,780
Secured lending agreements, at fair value	(1,679,778)		(1,720,350)
Term lending agreement, at fair value	(147,732)		(134,518)
Collateralized loan obligations, at fair value	(1,001,129)		—

Interest payable	(8,851)		(8,344)
Derivative liabilities, at fair value	(3,590)		—

Dividends and distributions payable	(5,033)		(3,765)
Accounts payable, accrued expenses and other liabilities	(25,863)		(23,159)
Due to affiliates(2)	(9,504)		(8,756)
Preferred stock liquidation preference	—		(228)
Net asset value	$	835,035	$	614,768
Number of outstanding shares(3)	32,999,448		24,252,394

(1) Other assets include $1.1 million of prepaid expenses, $0.2 million of deferred offering costs, and $0.5 million related to the elimination of the impact of the net mark-to-market on retained CLO interests as of June 30, 2025. As of December 31, 2024, other assets include $94,000 of prepaid expenses, excluding $86,000 of certain prepaid expenses advanced by the Adviser, and $238,000 of deferred offering costs.

(2) Excludes (i) amounts advanced by the Adviser of $12.5 million and $14.2 million for organizational, offering and operating expenses as of June 30, 2025 and December 31, 2024, respectively and (ii) accrued stockholder servicing fees not currently payable to the Dealer Manager of $15.9 million and $8.4 million as of June 30, 2025 and December 31, 2024, respectively.

(3) Includes 4,960,362 and 6,005,223 shares of common stock held by an Invesco affiliate that are classified as redeemable common stock as of June 30, 2025 and December 31, 2024, respectively.

The following table provides a breakdown of our total NAV and NAV per share by class as of June 30, 2025:


$ in thousands, except per share data	Class S Shares		Class S-1 Shares		Class D Shares		Class I Shares		Class E Shares		Class F Shares		Total
Net asset value	$	33,881	$	348,703	$	30,217	$	163,371	$	38,754	$	220,109	$	835,035
Number of outstanding shares(1)	1,353,537		13,877,118		1,208,131		6,510,459		1,513,194		8,537,009		32,999,448
NAV Per Share(2)	$	25.03	$	25.13	$	25.01	$	25.09	$	25.61	$	25.78

(1) Includes 1,196,923 Class S shares, 1,197,628 Class D shares, 1,194,434 Class I shares and 1,371,377 Class E shares that are classified as redeemable common stock.

(2) As of June 30, 2025, we had not sold any Class D-1 shares.

Reconciliation of Stockholders’ Equity to NAV

NAV is not a measure used under generally accepted accounting principles in the United States (“U.S. GAAP”). In addition, there is no rule or regulation that requires we calculate NAV in a certain way. As a result, other REITs may use different methodologies or assumptions to determine NAV. Our monthly NAV is determined in accordance with valuation guidelines that have been approved by our board of directors. The treatment of certain assets and liabilities used for the determination of NAV under these guidelines differs from U.S. GAAP. NAV is not equivalent to Stockholders’ equity or any other U.S. GAAP measure.

The following table reconciles U.S. GAAP stockholders’ equity per our condensed consolidated balance sheets to our NAV:


$ in thousands	June 30, 2025		December 31, 2024
Stockholders' equity	$	665,442	$	435,349
Adjustments:
Redeemable common stock - related party	125,200		151,367
Advanced organizational, offering and operating expenses(1)	12,542		14,128
Accrued stockholder servicing fees not currently payable(2)	15,927		8,372
Unamortized debt costs	15,437		5,780
Elimination of impact of net mark-to-market on retained CLO interests	487		—
Preferred stock liquidation preference	—		(228)
NAV	$	835,035	$	614,768

(1) Excludes $— and $86,000 of certain prepaid expenses advanced by the Adviser that are classified as other assets in our U.S. GAAP condensed consolidated financial statements as of June 30, 2025 and December 31, 2024, respectively.

(2) We have accrued stockholder servicing fees totaling $16.2 million of which $247,000 is currently payable to the Dealer Manager as of June 30, 2025 and totaling $8.5 million of which $131,000 was payable to the Dealer Manager as of December 31, 2024.

We classify common stock held by Invesco Realty, Inc., an affiliate, as redeemable common stock, which is not a component of stockholders’ equity on our U.S. GAAP condensed consolidated balance sheets. Due to the redemption terms and other features of these shares described in Note 11 - “Redeemable Common Stock - Related Party” of our Condensed Consolidated Financial Statements, we include the redemption value of these shares in our NAV as of each reporting date.

Given their timing and substantial size, reflecting organizational, offering and operating expense in NAV when incurred can be overly punitive to the NAV per share of early investors and reduce cash available for new investments that will inure to the benefit of later investors. To help mitigate the impact of this timing difference, the Adviser incurred the bulk of these costs on our behalf and agreed to allow them to be repaid after a reasonable initial period over a fixed period of time. Under the terms of our Advisory Agreement, the Adviser advanced all of our organizational, offering and operating expenses (other than upfront selling commissions and ongoing stockholder servicing fees) incurred through May 31, 2024. Starting in December of 2024, we began reimbursing the Adviser for these costs ratably over 52 months. We will decrease our NAV by the amount of each monthly repayment made to the Adviser during the reimbursement period. These costs were expensed as incurred in our U.S. GAAP financial statements.

Under the terms of our agreement, the Dealer Manager is entitled to receive upfront selling commissions and stockholder servicing fees for Class S, Class S-1, Class D, and Class D-1 shares sold in the Continuous Offering. Under U.S. GAAP, we accrue the full amount of stockholder servicing fees payable over an estimated investor holding period as an offering cost at the time each Class S, Class S-1, Class D and Class D-1 share is sold during the Continuous Offering and treat the amount as an offset (reduction) to Additional Paid-In Capital. As the actual monthly amounts are remitted to the Dealer Manager, the NAV is reduced by a corresponding amount.

We have elected the fair value option for our financing facilities and expense debt issuance costs in accordance with U.S. GAAP. However, when calculating our NAV, we capitalize debt issuance and other financing costs, including original issuance discounts, as incurred and expense the costs over the life of the financing arrangement so that the costs to maintain the financing arrangement are borne by all investors who benefit from their use, rather than just those who were invested during the period in which the financing arrangement was implemented.

The consolidated CLO assets and notes held by third parties are presented on the condensed consolidated balance sheet at fair value and are also included in our NAV as assets and liabilities at fair value. The difference between the consolidated CLO’s assets and the third-party liabilities is equivalent to the Company’s retained interest, which is eliminated in consolidation. The net changes in valuation of the CLO’s loan assets and third party notes from period to period is adjusted from U.S. GAAP when presenting NAV, as the Company will hold its retained interests until maturity, unless deemed permanently impaired. If the Adviser deems any portion of its retained interest impaired, such credit loss will be recognized in the net asset value calculation. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the terms of our retained interest.

Distributions

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with U.S. GAAP, to our stockholders each year to comply with the REIT provisions of the Code. Distributions are at the discretion of our board of directors and include a review of earnings, cash flow, liquidity and capital resources.

The net distribution varies for each class based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor.

The following table summarizes our distributions declared during the three and six months ended June 30, 2025 and 2024.


	Three Months Ended				Three Months Ended
	June 30, 2025				June 30, 2024
$ in thousands	Amount		Percentage		Amount		Percentage
Distributions
Payable in cash	$	5,158	36	%	$	4,478	62	%
Reinvested in shares	9,191		64	%	2,771		38	%
Total distributions	$	14,349	100	%	$	7,249	100	%
Sources of Distributions
Cash flows from operating activities	$	14,349	100	%	$	7,249	100	%


Total sources of distribution	$	14,349	100	%	$	7,249	100	%

Net cash provided by operating activities	$	19,451			$	10,091


	Six Months Ended				Six Months Ended
	June 30, 2025				June 30, 2024
$ in thousands	Amount		Percentage		Amount		Percentage
Distributions
Payable in cash	$	10,073	37	%	$	9,257	68	%
Reinvested in shares	17,219		63	%	4,303		32	%
Total distributions	$	27,292	100	%	$	13,560	100	%
Sources of Distributions
Cash flows from operating activities	$	27,292	100	%	$	13,560	100	%


Total sources of distribution	$	27,292	100	%	$	13,560	100	%

Net cash provided by operating activities	$	30,722			$	18,526

The table below details the net distribution per share for each of our common share classes for the six months ended June 30, 2025:


Declaration Date	Class S Shares		Class S-1 Shares		Class D Shares		Class I Shares		Class E Shares		Class F Shares
January 31, 2025	$	0.1599	$	0.1418	$	0.1600	$	0.1600	$	0.1600	$	0.1600
February 28, 2025	0.1599		0.1436		0.1600		0.1600		0.1600		0.1600
February 28, 2025(1)	0.0200		0.0200		0.0200		0.0200		0.0200		0.0200
March 31, 2025	0.1599		0.1418		0.1600		0.1600		0.1600		0.1600
April 30, 2025	0.1592		0.1424		0.1600		0.1600		0.1600		0.1600
May 31, 2025	0.1582		0.1419		0.1600		0.1600		0.1600		0.1600
June 30, 2025	0.1580		0.1424		0.1600		0.1600		0.1600		0.1600





Total(2)	$	0.9751	$	0.8739	$	0.9800	$	0.9800	$	0.9800	$	0.9800

(1) Includes a special distribution that was paid in addition to the monthly distribution declared for the month.

(2) The net distribution varies for each class based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the Dealer Manager. Certain investors began purchasing Class S shares subject to the stockholder servicing fee in June 2024.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to pay dividends, fund investments, repay borrowings, and fund other general business needs, including our offering and operating expenses. Our offering and operating expenses include, among other things, the management and performance fees we pay to the Adviser, selling commissions, dealer manager fees and stockholder servicing fees we pay to the Dealer Manager, legal, audit and valuation expenses, federal and state filing fees, printing expenses, administrative fees, and transfer agent fees. The Adviser and its affiliates provide us with our management team, including our officers and appropriate support personnel. The Adviser or the Adviser's affiliates may provide us services that would otherwise be performed by third parties. In such event, we will reimburse the Adviser or the Adviser's affiliate the cost of performing such services provided that such reimbursements will not exceed the amount that would be payable if such services were provided by a third party in an arms-length transaction.

Our sources of funds for liquidity consist of the net proceeds from our continuous private offering, net cash provided by operating activities, proceeds and available borrowings from our secured financing facilities, collateralized loan obligations, and our revolving credit facility, loan repayments, uncalled capital commitments, and future issuances of equity and/or debt securities.

As of June 30, 2025, we had unfunded commitments of $304.9 million for certain of our commercial real estate loan investments. We currently believe that we have sufficient liquidity and capital resources available to settle these unfunded commitments, for the acquisition of additional investments, repayments on borrowings, the payment of cash dividends as required for continued qualification as a REIT, and to repurchase shares of our common stock under our share repurchase plan. Cash needs for items other than loan originations and asset acquisitions are generally met from operations, and cash needs for loan originations and asset acquisitions are funded by our continuous private offering and debt financings. However, there may be a delay between the sale of our shares and our origination of loan assets or purchase of assets that could result in a delay in the benefits to our stockholders, if any, of returns generated from our investment operations.

We held cash and cash equivalents of $100.9 million and restricted cash of $23.1 million as of June 30, 2025. Our cash and cash equivalents change due to normal fluctuations in cash balances related to the timing of principal and interest payments and loan origination and funding activity. Our restricted cash changes based on the volume of new subscriptions for our shares and for payment of dividends by foreign subsidiaries after regulatory approval has been obtained.

The following table sets forth changes in cash and cash equivalents and restricted cash:


	Six Months Ended June 30,
$ in thousands	2025		2024
Cash flows from operating activities	$	30,722	$	18,526
Cash flows from investing activities	(1,129,789)		(506,304)
Cash flows from financing activities	1,122,910		478,333
Effect of exchange rate changes on cash, cash equivalents and restricted cash	40		—
Net change in cash, cash equivalents and restricted cash	$	23,883	$	(9,445)

Our operating activities provided net cash of $30.7 million for the six months ended June 30, 2025, primarily driven by the increase from the prior period in net interest income, which is income generated by our investments less financing costs.

Our investing activities used net cash of $1.1 billion in the six months ended June 30, 2025, and primarily consisted of cash used to originate 17 commercial real estate loan investments and to purchase seven CMBS securities during the period.

Our financing activities provided net cash of $1.1 billion in the six months ended June 30, 2025. During the six months ended June 30, 2025, we received proceeds from our secured financing facilities of $822.0 million and from our CLO issuance of $995.7 million and used cash of $878.6 million to repay certain secured financing facilities in relation to the CLO issuance. We also received net proceeds from the issuance of common stock of $212.4 million and net proceeds of $22.8 million from retail investor subscriptions paid in advance. We used cash of $9.8 million and $8.3 million during the six months ended June 30, 2025 to pay dividends and debt issuance costs, respectively. Additionally, we used cash of $30.1 million to repurchase redeemable common stock.

As of June 30, 2025, our total assets were approximately $3.7 billion and consisted primarily of 63 investments in commercial real estate loans totaling $3.6 billion, restricted cash of $23.1 million and cash and cash equivalents of $100.9 million. We financed our commercial real estate loan investments with $1.8 billion of secured financing facility borrowings and $1.0 billion of collateralized loan obligations.

Our primary sources of liquidity as of June 30, 2025 and December 31, 2024 are summarized in the following table:


$ in thousands	June 30, 2025		December 31, 2024
Cash and cash equivalents	$	100,859	$	80,221
Available borrowings under revolving credit agreements	162,000		135,000
Available borrowings under secured financing facilities	1,385,669		1,008,228
	$	1,648,528	$	1,223,449

Our target Leverage Ratio is 50% to 65% of the aggregate value of the underlying collateral of our senior Credit Assets, and our maximum permitted Leverage Ratio is 65%. “Leverage Ratio” calculated for portfolio management purposes is measured by dividing (x) the sum of our outstanding liabilities under our direct leverage portfolio-level financing facilities by (y) the aggregate of the underlying collateral securing the loans in our portfolio that are not subordinated loans at the time such leverage is incurred.

The CLO includes a 30-month reinvestment period (unless, before such date, all of the notes are redeemed or an event of default occurs and is continuing) during which we may acquire additional collateral interests, subject to the satisfaction of certain conditions set forth in the indenture, allowing us to generate incremental liquidity and maintain the aggregate amount of collateral assets in the CLO and the related financing that is outstanding.

We also may use Company-level credit facilities or other financing arrangements that are not secured by Credit Assets or other investments as short-term cash management tools to pay fees and expenses and bridge portfolio-level financing arrangements. There is no limit on the short-term indebtedness we may incur under revolving credit facilities, but any of these amounts outstanding for 12 months or longer will be factored into the Leverage Ratio.

Invesco has committed to purchase $150.0 million in capital under the Invesco Subscription Agreement in one or more closings through March 23, 2028. We may also call up to $150.0 million in additional capital (for a total of $300.0 million) if needed to avoid triggering any concentration limit imposed by a third party in connection with its distribution or placement of our shares or for purposes of repaying indebtedness drawn on the revolving credit facility. As of June 30, 2025, we had called $120.0 million of the total $300.0 million. Invesco Realty may not submit its shares for repurchase under our share repurchase plan until the earlier of March 23, 2028 and the date that our aggregate NAV is at least $1.5 billion. We can only accept a repurchase request from Invesco Realty after all requests from unaffiliated stockholders have been fulfilled. We may elect to repurchase all or any portion of the shares acquired by Invesco’s affiliate at any time at a per share price equal to the most recently determined NAV per share for the applicable share class.

An institutional investor purchased $200 million of our Class F shares during 2024. The Class F stockholder may not submit its shares for repurchase under our share repurchase plan until the earlier of (i) the date our NAV reaches $1.5 billion and (ii) March 23, 2028. However, the Class F stockholder is entitled to request that we repurchase its shares in the event that there is a Key Person Event or a Material Strategy Change, as such terms are defined in the Class F subscription agreement.

If we are unable to continue raising substantial funds in our Continuous Offering, we will make fewer investments resulting in less diversification in terms of the type, number, and size of investments we make. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reduce our net income, and limit our ability to make distributions.

Reimbursement of Certain Costs Paid by the Adviser

Under the terms of our Advisory Agreement, the Adviser advanced all of our organizational, offering and operating expenses (other than upfront selling commissions and ongoing stockholder servicing fees) incurred through May 31, 2024. Starting in December 2024, we began reimbursing the Adviser for these costs ratably over 52 months. As of June 30, 2025, we owe the Adviser approximately $12.5 million for the remaining outstanding balance of the expenses advanced by the Adviser under this arrangement. Any operating expenses incurred by the Adviser on behalf of the fund after May 31, 2024 are reimbursed quarterly to the Adviser.

Starting with the quarter ended June 30, 2025, we may not reimburse the Adviser at the end of any fiscal quarter for Total Operating Expenses (as defined in the Advisory Agreement) that exceed the greater of 2% of average invested assets or 25% of net income determined without reduction for any non-cash reserves and excluding any gain from the sale of our assets for that period (the “2%/25% Guidelines”) for the four consecutive fiscal quarters then ended. We may reimburse the Adviser for expenses in excess of the 2%/25% Guidelines if a majority of our independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. Operating expenses for the four consecutive fiscal quarters ended June 30, 2025 did not exceed the 2%/25% Guidelines.

Refer to Note 10 - “Related Party Transactions” of our Notes to Condensed Consolidated Financial Statements.

Forward-Looking Statements Regarding Liquidity

During the periods when we are selling more shares than we are repurchasing, we primarily use our capital to acquire our investments, which we also fund with other capital resources. During periods when we are repurchasing more shares than we are selling, we may use our capital to fund repurchases. We continue to believe that our current liquidity position is sufficient to meet the needs of our business.

In addition, we may have other funding obligations, which we expect to satisfy with the cash flows generated from our investments and our capital resources described above. Such obligations may include distributions to our stockholders, operating expenses, repayment of indebtedness, and debt service on our outstanding indebtedness. Our operating expenses include, among other things, the management fee and performance fee we pay to the Adviser, both of which will impact our liquidity to the extent the Adviser elects to receive such payments in cash, or subsequently redeems Class E shares previously issued to them. To date, the Adviser has elected to be paid in Class E shares, resulting in a non-cash expense.

Contractual Obligations and Commitments

Commitments and contingencies may arise in the ordinary course of business. As of June 30, 2025, we had unfunded commitments of $304.9 million for 51 of our commercial real estate loan investments. The unfunded commitments generally consist of funding for leasing costs, interest reserves and capital expenditures. Funding depends on timing of lease-up, renovation and capital improvements as well as satisfaction of certain cash flow tests. Therefore, the exact timing and amounts of such future loan fundings are uncertain. We expect to fund our loan commitments over the remaining current maturity of the related loans of 1.81 years.

We have also committed to pay counterparty legal, diligence and other fees in connection with new financing facilities in the ordinary course of business.

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2025, we were not involved in any material legal proceedings.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates that are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. In connection with the financing on May 7, 2025, of a pool of loans and loan participations from our existing loan portfolio through a managed CLO, we have identified the following updates to our critical accounting policies and estimates. See Note 2 - “Summary of Significant Accounting Policies” of our condensed consolidated financial statements included in Item 1 of this Report, for additional information.

Valuation of Commercial Real Estate Loan Investments

We have elected the fair value option for our commercial real estate loan investments, real estate-related securities, secured lending and term lending agreements (collectively, our secured financing facilities), our revolving credit facility, and our collateralized loan obligations (“CLO”). We believe the fair value option will provide its financial statements users with reduced complexity, greater consistency, understandability and comparability.

consolidated collateralized financing entities with respect to its managed CLO. Accordingly, commercial real estate loans and loan participations that are collateral assets within the consolidated CLO are measured using the fair value of the more observable CLO notes as an indicator of the fair value of the CLO assets as a whole.

Refer to Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for the estimated impact of a change in market benchmark spreads on our net portfolio value, which is inclusive of changes in the fair value of our commercial loan investments.

Valuation of Collateralized Loan Obligations

There have been no significant changes to the status of our adoption of the recently issued accounting pronouncement that is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company may be exposed to market risk with respect to the fair value of commercial real estate loans and borrowings due to changes in market conditions, including spreads, benchmark interest rates, property cash flows, and commercial property values that serve as collateral. While we do not seek to avoid risk completely, we believe that risk can be quantified from historical experience, and we seek to actively manage that risk, to earn sufficient compensation to justify taking those risks and to maintain capital levels consistent with the risks we undertake.

Interest Rate Risk

Interest rate risk is highly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. We are exposed to interest rate volatility primarily as a result of the floating rate nature of the commercial real estate loans we hold and the financing we place on them. Additionally, we may use Company-level credit facilities featuring floating interest rates for liquidity and working capital purposes. Furthermore, we may make investments in fixed and floating rate debt securities; the value of our positions may increase or decrease depending on interest rate movements. Finally, interest rate changes may impact the availability of financing needed to expand our investment portfolio.

A rise in benchmark interest rates, such as SOFR, can be expected to lead to higher interest income earned (calculated as benchmark interest rate plus spread) on any variable rate commercial real estate loan we may hold and to declines in the value of any fixed rate commercial real estate loan we may hold. Rising benchmark interest rates carry default risk to our borrowers, because debt service payments may increase relative to cash flows from underlying properties, triggering borrower liquidity covenants. Therefore, we expect to protect interest income by requiring borrowers to purchase benchmark interest rate caps, which provides a hedge against rising benchmark interest rates, whereby the borrower will receive excess cash if benchmark interest rates exceed predetermined strike prices. Furthermore, rising benchmark interest rates also cause our overall cost of borrowing to increase, partially offsetting any increase in elevated interest income earned on our variable rate commercial real estate loan. We may use derivative financial instruments to hedge benchmark interest rate exposure on our borrowings to mitigate the impact on our debt service payments. An increase in benchmark interest rates may result in an increase in our net interest income and the amount of performance fees payable to the Adviser.

A decline in benchmark interest rates can be expected to lead to lower interest income earned from any variable rate commercial real estate loan we hold and increases in the value of any fixed rate commercial real estate loan we may hold. To mitigate the impact of reduced earnings as a result of declining benchmark interest rates, we expect to structure benchmark interest rate floors into each loan where the borrower will be required to pay minimum debt service payments should benchmark interest rates fall below a predetermined rate. Additionally, reduced benchmark interest rates also cause our overall cost of borrowings to decrease. Because our borrowings do not feature interest rate floors, but our variable rate commercial real estate loan feature minimum debt service payments due to us, declining benchmark interest rates below the structured floors may result in an increase to the net interest income received and an increase in the amount of performance fees payable to the Adviser.

As of June 30, 2025, we had $3.5 billion of floating rate commercial real estate loans, $1.8 billion of floating rate secured financing facilities, $1.0 billion of floating rate collateralized loan obligations, and no balance outstanding on our revolving credit facility.

The net interest income sensitivity analysis table presented below shows the estimated impact over a twelve-month period of an instantaneous parallel shift in the yield curve, up and down by 100 basis points on our net interest income, assuming no changes in the composition of our commercial real estate loan investment portfolio and our outstanding borrowings in effect as of June 30, 2025. The analysis presented utilized assumptions, models and estimates of our Adviser based on our Adviser’s judgment and experience. Actual results could differ significantly from those estimated in the interest rate sensitivity table.


$ in thousands	At June 30, 2025
Change in Interest Rates	Projected Increase (Decrease) in Net Interest Income		Percentage Change in Projected Net Interest Income
+1.00%	$	7,115	9.30	%
-1.00%	$	(141)	(0.20)	%

Certain assumptions have been made in calculating the interest rate risk sensitivities and, as such, there can be no assurance that assumed events will occur or that other events will not occur that would affect the outcomes. The interest rate scenarios assume

interest rates at June 30, 2025. Furthermore, while the analysis reflects the estimated impact of interest rate increases and decreases on a static portfolio, we actively manage the size and composition of our investments, which can result in material changes to our interest rate risk in the portfolio.

Credit Risk

We are exposed to credit risk in our commercial real estate loans with respect to a borrower’s ability to make required debt service payments to us and repay the unpaid principal balance in accordance with the terms of the applicable loan agreement. We manage this risk by conducting a credit analysis prior to making an investment and by actively monitoring our portfolio and the underlying credit quality, including subordination and diversification, of our commercial real estate loans. In addition, we re-evaluate the credit risk inherent in our commercial real estate loans on a regular basis under fundamental considerations such as gross domestic product, unemployment, interest rates, retail sales, store closing/openings, corporate earnings, housing inventory, affordability and regional home price trends.

While our investment objectives include avoiding excess sponsor/borrower concentration, we expect to experience some level of sponsor/borrower concentration prior to the time that we have raised substantial offering proceeds and acquired a broad portfolio of Credit Assets. As of June 30, 2025, we have invested in 63 commercial real estate loans with a fair value of $3.6 billion. Our portfolio includes the following loan with a single borrower as of June 30, 2025. The loan represents a refinancing of an industrial portfolio that was comprised of 24 properties spanning 2,454,761 square feet in California, Washington, Texas, New Jersey, New York and Florida.


Counterparty	Loan Count	Fair Value		% of Loan Portfolio
Borrower A	1	$	341,550	10	%

We are exposed to credit risk with respect to the tenants that occupy properties that serve as collateral to our commercial real estate loans. To mitigate this risk, we seek to avoid large single tenant exposure and we undertake a credit evaluation of major tenants prior to making a loan. This analysis includes extensive due diligence of a potential tenant’s creditworthiness and business, as well as an assessment of the strategic importance of the property to the tenant’s core business operations.

We are exposed to credit risk in the real estate-related debt investments that we make with respect to a borrower’s ability to make required interest and principal payments on scheduled due dates. We manage this risk by conducting a credit analysis prior to making an investment and by actively monitoring our portfolio and its underlying credit quality. In addition, we re-evaluate the credit risk inherent in our investments on a regular basis pursuant to fundamental considerations such as GDP, unemployment, interest rates, retail sales, store closings/openings and corporate earnings. Where applicable, we also review key property and loan-level metrics including, but not limited to, payment status, debt-service coverage ratios, debt yields, current loan-to-value ratios, occupancy rates, and tenant rent rolls along with property sponsorship. These characteristics assist in determining the likelihood and severity of underlying loan losses as well as prepayment and extension expectations. We then perform structural analysis to project investment cash flows and assess subordination levels relative to underlying collateral performance expectations. This analysis allows us to quantify our opinions of credit quality and fundamental value, which are key drivers of portfolio management decisions.

We may be exposed to counterparty credit risk under the terms of a derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties. As of June 30, 2025, we held derivative instruments with a fair value liability balance of $3.6 million.

Further, there is counterparty risk associated with the future creditworthiness of our foreign currency hedge counterparties. When determining the fair value of our currency forward contracts, we consider the effect of nonperformance risk as a part of the valuation process and include a credit risk adjustment where appropriate.

In addition to the credit risks outlined above, we own retained interests in certain rated notes and the subordinated tranches of a consolidated CLO. Such interests have been eliminated in consolidation. Holding retained interests in our CLO exposes us to potential losses and earnings volatility due to credit deterioration in the underlying loan portfolio.

Market Risk

Market Value Risk

We may also be exposed to market risk with respect to the fair value of our commercial real estate loans, debt securities and borrowings due to changes in market conditions, including spreads, benchmark interest rates, property cash flows, and commercial property values that serve as collateral. We seek to manage our exposure to market risk by originating or acquiring commercial real estate loans secured by different property types located in diverse, but liquid markets with stable credit ratings. The fair value of our commercial real estate loans, debt securities and borrowings may fluctuate, therefore the amount we will realize upon any repayment, sale, or an alternative liquidation event is unknown.

The non-CLO investment portfolio value sensitivity analysis table presented below shows the estimated impact of a change in market benchmark spreads, up and down 100 basis points, on the fair value of our benchmark spread-sensitive investments and borrowings as of June 30, 2025, assuming a static portfolio and constant financing. When evaluating the impact of changes in benchmark spreads, prepayment assumptions and principal reinvestment rates are adjusted based on our Adviser’s expectations. The analysis presented utilized assumptions, models and estimates of our Adviser based on our Adviser’s judgment and experience. Actual results could differ significantly from those estimated in the benchmark spread sensitivity table.


$ in thousands	At June 30, 2025
Change in Market Spreads	Projected Increase (Decrease) in Net Portfolio Value		Percentage Change in Projected Net Portfolio Value
+1.00%	$	(7,616)	(1.52)	%
-1.00%	$	1,850	0.37	%

Certain assumptions have been made in calculating the market value risk sensitivities and, as such, there can be no assurance that assumed events will occur or that other events will not occur that would affect the outcomes. Furthermore, while the analysis reflects the estimated impact of benchmark spread increases and decreases on a static portfolio, we actively manage the size and composition of our investments, which can result in material changes to our benchmark spread risk portfolio.

Commercial real estate loans and loan participations that are collateral assets within the consolidated CLO are measured using the fair value of the more observable CLO notes as an indicator of the fair value of the CLO assets as a whole; therefore, fair values of CLO assets and liabilities will move in an offsetting direction. The difference between the consolidated CLO’s assets and the third-party liabilities is equivalent to the Company’s retained interest, which is eliminated in consolidation. The net changes in valuation of the CLO’s loan assets and third party notes impacts the Company’s results of operations in an amount equivalent to its eliminated retained interests. The sensitivity analysis excludes retained interests in commercial real estate CLOs due to the absence of a reliable market benchmark and the structural variability of these positions, which limits the comparability and relevance of modeled outcomes.

Real Estate Risk

Commercial property values are subject to volatility and may be adversely affected by a number of factors, including: national, regional and local economic conditions; local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes and/or tax and legal considerations. Changes in commercial property values are difficult to predict with accuracy. We model a range of valuation scenarios and the resulting impacts to our business.

Currency Risk

Our commercial real estate loan investments and secured financing facility borrowings that are denominated in a foreign currency are subject to risks related to fluctuations in foreign currency exchange rates. We mitigate this risk by entering into a series of foreign currency forward contracts to fix the U.S. dollar amount of foreign currency denominated cash flows (primarily interest income and principal payments) we expect to receive from our foreign currency investments.

Although we expect to substantially reduce our exposure to changes in portfolio value related to changes in foreign currency exchange rates, there can be no assurance that our hedges will eliminate all of our currency risk. For example, if actual repayments of our foreign currency-denominated loans occur sooner or later than expected, the hedge instruments are unlikely to fully protect us from changes in the valuation of such foreign currency. Additionally, we may be required under certain

circumstances to collateralize our currency hedges for the benefit of a hedge counterparty, which could adversely affect our liquidity.

Despite being economic hedges, we have elected not to treat our foreign currency forwards as hedges for accounting purposes and, therefore, the changes in the value of such instruments, including actual and accrued payments, are included in our net income.

The following table represents our assets and liabilities that are denominated in a foreign currency (amounts in thousands):


	June 30, 2025
	Euro		GBP
Foreign currency assets	€	175,462	£	242,839
Foreign currency liabilities	(140,043)		(193,998)
Foreign currency contracts - notional, net	(37,757)		(52,262)
Net exposure to exchange rate fluctuations	€	(2,338)	£	(3,421)
Net exposure to exchange rate fluctuations in USD(1)	$	(2,745)	$	(4,692)

(1) Represents the U.S. dollar equivalent based on the Euro closing rate of 1.17429 and GBP closing rate of 1.37141 as of June 30, 2025.

For further information regarding our foreign currency forward contracts, see Note 7 - “Derivatives and Hedging Activities” of our condensed consolidated financial statements in Part I. Item 1 of this Report.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report was made under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon this evaluation, our CEO and CFO have concluded that as of the end of the period covered by this Quarterly Report our disclosure controls and procedures (a) are effective to reasonably ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2025, we were not involved in any material legal proceedings.

ITEM 1A. RISK FACTORS

There were no material changes during the period covered by this Quarterly Report to the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Unregistered Sales of Equity Securities

The following table details the common shares issued under our distribution reinvestment plan for the three months ended June 30, 2025:


$ in thousands, except share and per share amounts	Issuance Date	Number of Shares	Price per Share		Total Value
Class S	April 14, 2025	25	$	25.0652	$	1
Class S-1	April 14, 2025	40,124	$	25.1614	$	1,010
Class D	April 14, 2025	66	$	25.0490	$	2
Class I	April 14, 2025	14,177	$	25.1281	$	356
Class E	April 14, 2025	485	$	25.5155	$	12
Class F	April 14, 2025	52,204	$	25.6828	$	1,341
Class S	May 14, 2025	51	$	25.1082	$	1
Class S-1	May 14, 2025	44,640	$	25.2052	$	1,125
Class D	May 14, 2025	66	$	25.0919	$	2
Class I	May 14, 2025	16,551	$	25.1717	$	417
Class E	May 14, 2025	485	$	25.5898	$	12
Class F	May 14, 2025	52,365	$	25.7632	$	1,349
Class S	June 12, 2025	164	$	25.0144	$	4
Class S-1	June 12, 2025	48,636	$	25.1092	$	1,220
Class D	June 12, 2025	66	$	24.9995	$	2
Class I	June 12, 2025	17,769	$	25.0753	$	446
Class E	June 12, 2025	514	$	25.5298	$	13
Class F	June 12, 2025	52,811	$	25.7042	$	1,357

The transactions reflected above were exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) thereof.

Issuer Purchases of Equity Securities

We have adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that we repurchase all or any portion of their shares of our common stock, subject to the terms and conditions of the share repurchase plan. We may choose, in our discretion, to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any month, subject to any limitations in the share repurchase plan.

The total amount of share repurchases under the plan is limited to 2% of our aggregate NAV per month and 5% of our aggregate NAV per calendar quarter.

Shares will be repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any early repurchase deduction. Our transaction price will generally equal our prior month's NAV per share for that share class. Shares repurchased within one year of the date of issuance generally will be repurchased at 95% of the current transaction price, subject to certain limited exceptions. Due to the illiquid nature of investments in commercial real estate loans, we may not have sufficient liquid resources to fund repurchase requests. Our board of directors may modify or suspend the share repurchase plan.

During the three months ended June 30, 2025, we repurchased shares of our common stock in the following amounts:


Month of:	Total Number of Shares Repurchased	Average Price Paid per Share(1)		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number of Shares Pending Repurchase Pursuant to Publicly Announced Plans or Programs (3)
April 2025	27,867	$	24.91	27,867	—
May 2025(4)	66,391	$	25.12	60,599	—
June 2025	7,322	$	25.13	7,322	—
	101,580	$	25.06	95,788	—

(1)Shares repurchased within one year of the date of issuance generally will be repurchased at 95% of the current transaction price, subject to certain limited exceptions.

(2)Number of shares repurchased as part of publicly announced plans or programs include share repurchases, if any, under our share repurchase plan.

(3)All repurchase requests under our share repurchase plan were satisfied.

(4)The Total Number of Shares Repurchased and Average Price Paid per Share includes 5,792 shares of our redeemable common stock held by the Adviser repurchased outside of the share repurchase plan, with an average price paid per share of $25.53, related to shares that were previously issued to the Adviser as payment for management fees.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Entry into a Material Definitive Agreement

On August 6, 2025, the Company, the Operating Partnership and the Adviser entered into an Amended and Restated Advisory Agreement (the "Amended and Restated Advisory Agreement").

The Amended and Restated Advisory Agreement amended the prior agreement to add a definition of “Total Operating Expenses” and revise the 2%/25% Guidelines such that the Company may not reimburse the Adviser at the end of any fiscal quarter for Total Operating Expenses that exceed the greater of 2% of Average Invested Assets or 25% of Net Income (in each case as defined therein) for the for consecutive fiscal quarters then ended. The Company may reimburse the Adviser for expenses in excess of the 2%/25% Guidelines if a majority of the independent directors determines that such excess expenses are justified based on unusual and non-recurring factors.

The summary of the Amended and Restated Advisory Agreement set forth above does not purport to be a complete summary of the terms thereof and is qualified in its entirety by the Amended and Restated Advisory Agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS


Exhibit No.						Description

3.1						Articles of Amendment and Restatement of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10, filed with the SEC on June 29, 2023.

3.2						Articles of Amendment of the Company, incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10/A, filed with the SEC on August 25, 2023.

3.3						Articles of Amendment of the Company, incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K, filed with the SEC on August 21, 2024.
3.4						Certificate of Correction to the Articles of Amendment and Restatement of the Company, incorporated by reference to Exhibit 3.4 of our Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2024.

3.5						Articles Supplementary Classifying and Designating a Class of Common Stock as Class S-1 Common Stock and Fixing Distribution and Other Preferences and Rights of Such Class, incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form 10/A, filed with the SEC on August 25, 2023.

3.6						Articles Supplementary filed with the State Department of Assessments and Taxation of Maryland effective on October 16, 2023, incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K, filed with the SEC on October 19, 2023.

3.7						Articles Supplementary Classifying and Designating a Class of Common Stock as Class F Common Stock and Fixing Distribution and Other Preferences and Rights of Such Class, incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K, filed with the SEC on December 11, 2023.

3.8						Articles Supplementary Classifying and Designating a Class of Common Stock as Class D-1 Common Stock and Fixing Distribution and Other Preferences and Rights of Such Class, incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K, filed with the SEC on August 21, 2024.

3.9						Articles Supplementary Classifying and Designating a Class of Preferred Stock as 12.5% Series A Cumulative Redeemable Preferred Stock and Fixing Distribution and Other Preferences and Rights of Such Class, incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10, filed with the SEC on June 29, 2023.

3.10						Articles Supplementary Classifying and Designating a Class of Preferred Stock as 12.5% Series A Cumulative Redeemable Preferred Stock and Fixing Distribution and Other Preferences and Rights of Such Class, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 19, 2023.

3.11						Bylaws of the Company, incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form 10, filed with the SEC on June 29, 2023.

4.1						Second Amended and Restated Distribution Reinvestment Plan adopted by the Company, effective as of August 20, 2024, incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K, filed with the SEC on August 21, 2024.

10.1*						Amended and Restated Advisory Agreement dated August 6, 2025 , among Invesco Commercial Real Estate Finance Trust, Inc. Invesco Commercial Real Estate Finance Investments, LP and Invesco Advisers, Inc.

10.2*						Indenture, dated May 7, 2025, by and among INCREF 2025-FL1 LLC, Invesco Commercial Real Estate Finance Investments, LP, Wilmington Trust, National Association, and Computershare Trust Company, National Association

10.3*						Collateral Interest Purchase Agreement, dated May 7, 2025, among INCREF 2025-FL1 LLC, INCREF CLO Seller LLC, Invesco Commercial Real Estate Finance Investments, LP and, solely with regard to certain tax covenants, INCREF Sub-REIT LLC

10.4*						Collateral Management Agreement, dated May 7, 2025, by and among the Company, INCREF 2025-FL1 LLC, and Invesco Advisers, Inc.

10.5*						Servicing Agreement, dated May 7, 2025, by and among INCREF 2025-FL1 LLC, Invesco Advisers, Inc., KeyBank National Association, Bellwether Asset Services, LLC, Invesco Commercial Real Estate Finance Investments, LP, Wilmington Trust, National Association, and Computershare Trust Company, National Association

31.1*						Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*						Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**						Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


32.2**						Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101						The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Statements of Changes in Equity and Redeemable Equity Instruments; and (iv) Condensed Consolidated Statements of Cash Flows

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith ** Furnished herewith

The agreements and other documents filed as exhibits to this Quarterly Report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


	INVESCO COMMERCIAL REAL ESTATE FINANCE TRUST, INC.
August 8, 2025	By:	/s/ Hubert J. Crouch
		Hubert J. Crouch
		Chief Executive Officer
		(Principal Executive Officer)

August 8, 2025	By:	/s/ Courtney Popelka
		Courtney Popelka
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)