Company: ADAMM
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001273685-25-000088
Chunk: 280

Company: ADAMAS TRUST, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 280
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s but that the Company was not the primary beneficiary, resulting in the Company recording its equity investments at fair value.  We received variable distributions from these investments on a pro rata basis and management fees based upon property performance.  The Company sold its equity interests in the two joint venture entities during the three months ended September 30, 2025. The following table summarizes our unconsolidated multi-family joint venture equity investments as of December 31, 2024 (dollar amounts in thousands):

December 31, 2024StateProperty CountOwnership InterestFair ValueTexas270%$1,338 

Equity Investment in Constructive

On July 15, 2025, the Company acquired the outstanding membership interests in Constructive that were not previously owned by the Company. Prior to this date, the Company accounted for its investment in Constructive using the equity method and elected the fair value option. The following table summarizes our ownership interest in Constructive as of December 31, 2024 (dollar amounts in thousands).  

StrategyOwnership InterestFair ValueConstructive Loans, LLC (1)Residential Loans50%$38,718 

(1)On July 15, 2025, the Company acquired the outstanding membership interests in Constructive that were not previously owned by the Company.

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Derivative Assets and Liabilities

The Company is exposed to certain risks arising from both its business operations and economic conditions.  The Company enters into derivative financial instruments in connection with its risk management activities. These derivative instruments may include interest rate swaps, interest rate caps, TBAs, credit default swaps, futures and options contracts such as options on credit default swap indices, equity index options, swaptions and options on futures. The Company may also purchase options on U.S. Treasury futures or invest in other types of mortgage derivative securities. Constructive may enter into certain interest rate lock commitments (“IRLCs”) which represent a commitment to a particular interest rate provided the borrower is able to close the respective loan within a specified period. The Company elected not to apply hedge accounting for its derivative instruments. 

The Company and Consolidated Real Estate VIEs may be required by lenders on certain repurchase agreement financing and variable-rate mortgages payable on real estate to enter into interest rate cap contracts. These interest rate cap contracts are with a counterparty that involve the receipt of variable-rate amounts from the counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. During the period these contracts