18.   Partnership Investments

As of June 30, 2023, the Company had invested an aggregate of approximately $35.4 million in four limited liability companies in which it held non-controlling interests. The Company’s ownership interest in the four limited liability companies ranges up to 49%. The Company accounts for these investments at cost because the Company does not control or have significant influence over the investments. In May 2023, the Company made an additional investment in a limited liability company, Shem Creek Sachem 100 LLC, of which it owns 100% and, as such, the Company consolidates this investment within its books and records. In connection

with this investment the third party manager originated a mortgage loan in the amount of $8,750,000 at a fixed rate of 8.4% and borrowed $7,000,000 via a secured commercial loan, as more accurately described in Note 9. The third party manager of both the non-controlling and consolidated investments is a commercial real estate finance company that provides debt capital solutions to local and regional commercial real estate owners in the Northeastern United States. The Company’s withdrawal from each limited liability company may only be granted by the manager of such entity. Each limited liability company has elected to be treated as a partnership for income tax purposes.

The Company’s partnership investments can be categorized into two fund structures, fund investments and direct loan investments. The fund investments primarily include investments in two funds that invest in mortgage loans to borrowers. The direct loan investments are through two partnerships whereby the Company directly invests in the participation of individual loans to borrowers. Both the fund and direct loan structure primarily invest in mortgage loans to borrowers with a majority of the deals being leveraged by a bank. These loans are primarily two- to three- year collateralized mortgage loans, often with contractual extension options for the borrowers of an additional year. The Company receives quarterly dividends from the partnerships that are composed of a preferred return, return of capital and promote depending on each loan’s waterfall calculation, as defined by the loan agreements. The Company cannot redeem its fund investment at any time, its investment will be repaid as the underlying loans are repaid. The Company expects to be repaid on its current investments by December 31, 2026.

For the three months ended June 30, 2023 and 2022, the non-controlling partnership interests generated $1.0 million and $0.3 million, respectively, of income for the Company. For the six months ended June 30, 2023 and 2022, the partnerships generated $1.6 million and $0.6 million, respectively, of income for the Company.

At June 30, 2023, the Company had unfunded partnership commitments totaling approximately $2.1 million.