Investments in Loans

3 Months Ended

Mar. 31, 2024

The following table presents information about our loans as of March 31, 2024 and December 31, 2023 (dollars in thousands):


	March 31, 2024
	Amortized Cost		Allowance (1)		Carrying Amount (2)
Senior Secured Notes Receivable (3)	$	182,121	$	(3,700)	$	178,421
Mortgage Loans	66,277		—		66,277
Unsecured Loan	9,763		(1,035)		8,728
Total	$	258,160	$	(4,735)	$	253,426

	December 31, 2023
	Amortized Cost		Allowance (1)		Carrying Amount (2)
Senior Secured Note Receivable	$	174,337	$	(2,498)	$	171,839
Mortgage Loan	33,500		—		33,500
Total	$	207,837	$	(2,498)	$	205,339

(1) During the three months ended March 31, 2024, our allowance for credit losses increased by $2.2 million, almost entirely attributable to the loans we acquired in conjunction with our merger with Spirit.

(2) The total carrying amount of the investment in loans excludes accrued interest of $8.7 million and $3.4 million as of March 31, 2024 and December 31, 2023, respectively, which is recorded to 'Other assets, net' on our consolidated balance sheets.

(3) Includes a loan acquired in conjunction with our merger with Spirit with an estimated acquisition date fair value of $7.8 million. Since it was a purchased credit deteriorated loan, we recorded the initial expected credit loss of $1.0 million by adjusting the amortized cost basis.

A. Senior Secured Notes Receivable

We own a Sterling-denominated senior secured note with a principal amount of £142.0 million, equivalent to $179.5 million as of March 31, 2024. The interest only note bears interest at Sterling Overnight Indexed Average (“SONIA”) plus 6.75% and matures in October 2029. We paid £136.7 million for the note and accounted for the

discount at amortized cost. The discount is being amortized over the term of the note. In conjunction with our merger with Spirit, we acquired a senior secured note receivable with a principal amount of $9.9 million. This interest only note bears interest at Secured Overnight Financing Rate ("SOFR") plus 4.00% and matures in July 2028.

B. Mortgage Loans

We have a $33.5 million mortgage loan which is collateralized by nine automotive service properties located across seven different states. The interest only loan bears interest at 8.25% subject to annual increases and matures in October 2038. In conjunction with our merger with Spirit, we acquired a mortgage loan with a principal amount of $33.0 million and estimated its fair value to be $32.8 million at the acquisition date. This 10% fixed-rate, interest only loan is collateralized by four single-tenant properties and matures in March 2025. In April 2024, this $33.0 million loan was repaid in full.

C. Unsecured Loan

In conjunction with our merger with Spirit, we acquired an 11.0% fixed-rate, unsecured loan with a principal amount of $11.0 million. It was recorded at its acquisition-date fair value of $9.8 million and is included in 'Other assets' on our consolidated balance sheets. This interest only loan matures in December 2026.