Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information [Line Items] | ||
Entity Registrant Name | ACRES COMMERCIAL REALTY CORP. | |
Entity Central Index Key | 0001332551 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 8,589,629 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 1-32733 | |
Entity Tax Identification Number | 20-2287134 | |
Entity Address, Address Line One | 390 RXR Plaza | |
Entity Address, City or Town | Uniondale | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11556 | |
City Area Code | 516 | |
Local Phone Number | 535-0015 | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | MD | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | ACR | |
Security Exchange Name | NYSE | |
8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock | |
Trading Symbol | ACRPrC | |
Security Exchange Name | NYSE | |
7.875% Series D Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 7.875% Series D Cumulative Redeemable Preferred Stock | |
Trading Symbol | ACRPrD | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
ASSETS: | ||
Cash and cash equivalents | $ 87,314,000 | $ 66,232,000 |
Restricted cash | 33,940,000 | 38,579,000 |
Accrued interest receivable | 12,570,000 | 11,969,000 |
CRE loans | 1,994,790,000 | 2,057,590,000 |
Less: allowance for credit losses | (23,899,000) | (18,803,000) |
CRE loans, net | 1,970,891,000 | 2,038,787,000 |
Principal paydowns receivable | 54,000 | 0 |
Loan receivable - related party | 11,200,000 | 11,275,000 |
Investments in unconsolidated entities | 1,548,000 | 1,548,000 |
Properties held for sale | 40,377,000 | 53,769,000 |
Investments in real estate | 130,571,000 | 120,968,000 |
Right of use assets | 20,152,000 | 20,281,000 |
Intangible assets | 8,628,000 | 8,880,000 |
Other assets | 4,314,000 | 4,364,000 |
Total assets | 2,321,559,000 | 2,376,652,000 |
LIABILITIES | ||
Accounts payable and other liabilities | 13,442,000 | 10,391,000 |
Management fee payable - related party | 679,000 | 898,000 |
Accrued interest payable | 4,762,000 | 6,921,000 |
Borrowings | 1,810,767,000 | 1,867,033,000 |
Lease liabilities | 43,837,000 | 43,695,000 |
Distributions payable | 3,262,000 | 3,262,000 |
Accrued tax liability | 113,000 | |
Liabilities held for sale | 3,025,000 | 3,025,000 |
Total liabilities | 1,879,774,000 | 1,935,338,000 |
EQUITY | ||
Common stock, par value $0.001: 41,666,666 shares authorized; 8,646,136 and 8,708,100 shares issued and outstanding (including 583,333 and 583,333 unvested restricted shares) | 9,000 | 9,000 |
Additional paid-in capital | 1,174,510,000 | 1,174,202,000 |
Accumulated other comprehensive loss | (6,001,000) | (6,394,000) |
Distributions in excess of earnings | (734,775,000) | (732,359,000) |
Total stockholders’ equity | 433,753,000 | 435,468,000 |
Non-controlling interests | 8,032,000 | 5,846,000 |
Total equity | 441,785,000 | 441,314,000 |
TOTAL LIABILITIES AND EQUITY | 2,321,559,000 | 2,376,652,000 |
8.625% Series C Preferred Stock | ||
EQUITY | ||
Preferred stock, value | 5,000 | 5,000 |
7.875% Series D Preferred Stock | ||
EQUITY | ||
Preferred stock, value | $ 5,000 | $ 5,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 41,666,666 | 41,666,666 |
Common stock, shares issued (in shares) | 8,646,136 | 8,708,100 |
Common stock, shares outstanding (in shares) | 8,646,136 | 8,708,100 |
Common stock, shares issued, non-vested restricted shares (in shares) | 583,333 | 583,333 |
Assets of consolidated variable interest entities (“VIEs”) included in total assets above: | ||
Restricted cash | $ 33,940 | $ 38,579 |
Accrued interest receivable | 12,570 | 11,969 |
CRE loans | 1,970,891 | 2,038,787 |
Other assets | 4,314 | 4,364 |
Total assets of consolidated VIEs | 2,321,559 | 2,376,652 |
Accounts payable and other liabilities | 13,442 | 10,391 |
Accrued interest payable | 4,762 | 6,921 |
Borrowings | 1,810,767 | 1,867,033 |
Total liabilities of consolidated VIEs | $ 1,879,774 | $ 1,935,338 |
8.625% Series C Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, coupon authorized | 8.625% | 8.625% |
Preferred stock, shares issued (in shares) | 4,800,000 | 4,800,000 |
Preferred stock, shares outstanding (in shares) | 4,800,000 | 4,800,000 |
7.875% Series D Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 6,800,000 | 6,800,000 |
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, coupon authorized | 7.875% | 7.875% |
Preferred stock, shares issued (in shares) | 4,607,857 | 4,607,857 |
Preferred stock, shares outstanding (in shares) | 4,607,857 | 4,607,857 |
VIE, Primary Beneficiary | ||
Assets of consolidated variable interest entities (“VIEs”) included in total assets above: | ||
Restricted cash | $ 33,415 | $ 38,180 |
Accrued interest receivable | 8,837 | 8,184 |
Other assets | 87 | 119 |
Total assets of consolidated VIEs | 1,504,647 | 1,503,132 |
Accounts payable and other liabilities | 165 | 93 |
Accrued interest payable | 3,062 | 3,083 |
Borrowings | 1,234,355 | 1,233,556 |
Total liabilities of consolidated VIEs | 1,237,582 | 1,236,732 |
VIE, Primary Beneficiary | Pledged as Collateral | ||
Assets of consolidated variable interest entities (“VIEs”) included in total assets above: | ||
CRE loans | $ 1,462,308 | $ 1,456,649 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Interest income: | ||
CRE loans | $ 44,470 | $ 22,657 |
Other | 859 | 19 |
Total interest income | 45,329 | 22,676 |
Interest expense | 31,375 | 14,907 |
Net interest income | 13,954 | 7,769 |
Real estate income | 7,071 | 3,138 |
Other revenue | 33 | 16 |
Total revenues | 21,058 | 10,923 |
OPERATING EXPENSES | ||
General and administrative | 2,979 | 3,457 |
Real estate expenses | 8,860 | 4,794 |
Management fees - related party | 1,773 | 1,682 |
Equity compensation - related party | 894 | 744 |
Corporate depreciation and amortization | 23 | 22 |
Provision for (reversal of) credit losses, net | 5,096 | (1,802) |
Total operating expenses | 19,625 | 8,897 |
Net interest and other revenues less operating expenses | 1,433 | 2,026 |
OTHER INCOME (EXPENSE) | ||
Loss on extinguishment of debt | (460) | |
Gain on sale of real estate | 745 | |
Other income | 110 | 798 |
Total other income | 855 | 338 |
INCOME BEFORE TAXES | 2,288 | 2,364 |
Income tax benefit (expense) | 5 | (280) |
NET INCOME | 2,293 | 2,084 |
Net income allocated to preferred shares | (4,855) | (4,855) |
Net loss allocable to non-controlling interest, net of taxes | 146 | 0 |
Net loss allocable to common shares | $ (2,416) | $ (2,771) |
NET LOSS PER COMMON SHARE - BASIC | $ (0.28) | $ (0.30) |
NET LOSS PER COMMON SHARE - DILUTED | $ (0.28) | $ (0.30) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 8,500,413 | 9,096,977 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED | 8,500,413 | 9,096,977 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 2,293 | $ 2,084 |
Other comprehensive income | ||
Reclassification adjustments associated with net unrealized losses from interest rate swaps included in net income | 393 | 456 |
Total other comprehensive income | 393 | 456 |
Comprehensive income before allocation to preferred shares | 2,686 | 2,540 |
Net loss allocated to non-controlling interests shares | 146 | |
Net income allocated to preferred shares | (4,855) | (4,855) |
Comprehensive loss allocable to common shares | $ (2,023) | $ (2,315) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Preferred Stock 8.625% Series C Preferred Stock | Preferred Stock 7.875% Series D Preferred Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings (Distributions In Excess of Earnings) | Parent | Non-Controlling Interest |
Beginning balance at Dec. 31, 2021 | $ 448,195 | $ 9 | $ 5 | $ 5 | $ 1,179,863 | $ (8,127) | $ (723,560) | $ 448,195 | |
Beginning balance (in shares) at Dec. 31, 2021 | 9,149,079 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Offering costs | (37) | (37) | (37) | ||||||
Purchase and retirement of common stock | (3,885) | (3,885) | (3,885) | ||||||
Purchase and retirement of common stock (in shares) | (314,552) | ||||||||
Amortization of stock-based compensation | 744 | 744 | 744 | ||||||
Net income | 2,084 | 2,084 | 2,084 | ||||||
Distributions and accrual of cumulative preferred stock dividends | (4,855) | (4,855) | (4,855) | ||||||
Amortization of terminated derivatives | 456 | 456 | 456 | ||||||
Ending balance at Mar. 31, 2022 | 442,702 | $ 9 | 5 | 5 | 1,176,685 | (7,671) | (726,331) | 442,702 | |
Ending balance (in shares) at Mar. 31, 2022 | 8,834,527 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 441,314 | $ 9 | 5 | 5 | 1,174,202 | (6,394) | (732,359) | 435,468 | $ 5,846 |
Beginning balance (in shares) at Dec. 31, 2022 | 8,708,100 | 8,708,100 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Purchase and retirement of common stock | $ (756) | (756) | (756) | ||||||
Purchase and retirement of common stock (in shares) | (79,744) | ||||||||
Stock-based compensation | 170 | 170 | 170 | ||||||
Stock-based compensation (in shares) | 17,780 | ||||||||
Amortization of stock-based compensation | 894 | 894 | 894 | ||||||
Contributions from non-controlling interests | 2,332 | 2,332 | |||||||
Net income | 2,293 | 2,439 | 2,439 | (146) | |||||
Distributions and accrual of cumulative preferred stock dividends | (4,855) | (4,855) | (4,855) | ||||||
Amortization of terminated derivatives | 393 | 393 | 393 | ||||||
Ending balance at Mar. 31, 2023 | $ 441,785 | $ 9 | $ 5 | $ 5 | $ 1,174,510 | $ (6,001) | $ (734,775) | $ 433,753 | $ 8,032 |
Ending balance (in shares) at Mar. 31, 2023 | 8,646,136 | 8,646,136 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | Aug. 31, 2022 | Mar. 31, 2022 | Aug. 16, 2021 | Aug. 31, 2017 |
Interest rate, stated percentage | 5.75% | |||
4.5% Convertible Senior Notes | ||||
Interest rate, stated percentage | 4.50% | 4.50% | 4.50% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,293 | $ 2,084 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for (reversal of) credit losses, net | 5,096 | (1,802) |
Depreciation, amortization and accretion | 1,371 | 3,508 |
Amortization of stock-based compensation | 894 | 744 |
Loss on the extinguishment of debt | 460 | |
Gain on sale of real estate | (745) | |
Changes in operating assets and liabilities | 198 | (3,440) |
Net cash provided by operating activities | 9,107 | 1,554 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Origination and purchase of loans | (29,559) | (106,768) |
Principal payments received on loans and leases | 94,064 | 107,192 |
Investments in real estate | (8,918) | 188 |
Proceeds from sale of real estate | 14,309 | |
Purchase of furniture and fixtures | (9) | |
Principal payments received on loan - related party | 75 | 50 |
Net cash provided by investing activities | 69,971 | 653 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of common stock | (756) | (3,885) |
Proceeds from issuance of preferred shares (net of $37 of underwriting discounts and offering costs) | (37) | |
Proceeds from borrowings: | ||
Senior secured financing facility | 10,150 | |
Warehouse financing facilities and repurchase agreements | 12,095 | 84,992 |
Payments on borrowings: | ||
Securitizations | (237,189) | |
Senior secured financing facility | (38,213) | (10,150) |
Warehouse financing facilities and repurchase agreements | (29,450) | |
Convertible senior notes | (39,839) | |
Payment of debt issuance costs | (3,787) | (30) |
Proceeds received from non-controlling interests | 2,332 | |
Distributions paid on preferred stock | (4,855) | (4,855) |
Net cash used in financing activities | (62,634) | (200,843) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 16,444 | (198,636) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 104,810 | 283,931 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ 121,254 | $ 85,295 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Statement Of Cash Flows [Abstract] | |
Underwriting discounts and offering costs | $ 37 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2023 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1 - ORGANIZATION ACRES Commercial Realty Corp., a Maryland corporation, along with its subsidiaries (collectively, the “Company”), is a real estate investment trust (“REIT”) that is primarily focused on originating, holding and managing commercial real estate (“CRE”) mortgage loans and equity investments in commercial real estate properties through direct ownership and joint ventures. The Company’s manager is ACRES Capital, LLC (the “Manager”), a subsidiary of ACRES Capital Corp. (collectively, “ACRES”), a private commercial real estate lender exclusively dedicated to nationwide middle market CRE lending with a focus on multifamily, student housing, hospitality, office and industrial property in top United States (“U.S.”) markets. The Company has qualified, and expects to qualify in the current fiscal year, as a REIT. The Company conducts its operations through the use of subsidiaries that it consolidates into its financial statements. The Company’s core assets are consolidated through its investment in ACRES Realty Funding, Inc. (“ACRES RF”), a wholly-owned subsidiary that holds CRE loans, investments in commercial real estate properties and investments in CRE securitizations, which are consolidated as VIEs as discussed in Note 3. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). The consolidated financial statements include the accounts of the Company, majority-owned or controlled subsidiaries and VIEs for which the Company is considered the primary beneficiary. All inter-company transactions and balances have been eliminated in consolidation. Basis of Presentation All adjustments necessary to fairly present the Company’s financial position, results of operations and cash flows have been made. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and within the period of financial results. Actual results could differ from those estimates. Estimates affecting the accompanying consolidated financial statements include, but are not limited to, the net realizable and fair values of the Company’s investments and derivatives, the estimated useful lives used to calculate depreciation, the expected lives over which to amortize premiums and accrete discounts, reversals of or provisions for expected credit losses and the disclosure of contingent liabilities. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities of three months or less at the time of purchase. At March 31, 2023 and December 31, 2022 , $ 84.1 million and $ 63.3 million, respectively, of the reported cash balances exceeded the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation deposit insurance limits of $250,000 per respective depository or brokerage institution. However, all of the Company’s cash deposits are held at multiple, established financial institutions, in multiple accounts associated with its parent and respective consolidated subsidiaries, to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash and cash equivalents. Restricted cash includes required account balance minimums primarily for the Company’s CRE debt securitizations as well as cash held in the syndicated corporate loan collateralized debt obligations (“CDOs”). The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheets to the total amount shown on the consolidated statements of cash flows (in thousands): March 31, 2023 2022 Cash and cash equivalents $ 87,314 $ 79,561 Restricted cash 33,940 5,734 Total cash, cash equivalents and restricted cash shown on the Company’s consolidated statements of cash flows $ 121,254 $ 85,295 Investment in Real Estate The Company depreciates investments in real estate and amortizes related intangible assets over the estimated useful lives of the assets as follows: Category Term Building 35 to 40 years Building improvements 8 to 35 years Site improvements 10 years Tenant improvements Shorter of lease term or expected useful life Furniture, fixtures and equipment 3 to 12 years Right of use assets 7 to 94 years Intangible assets 90 days to 18 years Lease liabilities 7 to 94 years Income Taxes The Company recorded a full valuation allowance against its net deferred tax assets (tax effected expense of $ 20.8 million) at March 31, 2023 , as the Company believes it is more likely than not that the deferred tax assets will not be realized. This assessment was based on the Company’s cumulative historical losses and uncertainties as to the amount of taxable income that would be generated in future years by the Company’s taxable REIT subsidiaries. Earnings per Share The Company presents both basic and diluted earnings per share (“EPS”). Basic EPS excludes dilution and is computed by dividing net income (loss) allocable to common shareholders by the weighted average number of shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount. Reference Rate Reform Historically, the Company has used LIBOR as the benchmark interest rate for its floating-rate whole loans and the Company has been exposed to LIBOR through its floating-rate borrowings. Many of its floating-rate whole loans, CRE securitizations and term warehouse financing facilities included one-month LIBOR as the original contractual benchmark interest rate. The Company's unsecured junior subordinated debentures use three-month LIBOR as the contractual benchmark rate. In March 2021, the United Kingdom’s, or U.K.’s, Financial Conduct Authority (“FCA”) announced that it would cease publication of the one-week and the two-month USD LIBOR immediately after December 31, 2021, and cease publication of the remaining tenors immediately after June 30, 2023. In July 2021, the U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee composed of large U.S. financial institutions, identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative rate for LIBOR. All variable rate loans originated by the Company beginning January 1, 2022 have been benchmarked to SOFR. Additionally, all of its floating-rate whole loans contain provisions that provide for the transition of the contractual benchmark rate to an alternative rate. At March 31, 2023 , the Company's loan portfolio had a carrying value of $ 2.0 billion of floating rate loans, all of which have interest rates tied to SOFR. In September 2021 and January 2022, the term warehouse financing facilities with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) and Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”), respectively, were amended to allow for the transition to alternative rates, including rates tied to SOFR, subject to benchmark transition events. Additionally, during the year ended December 31, 2022, the Company entered into a loan agreement to finance the acquisition of a student housing complex, which uses SOFR as its benchmark interest rate. At March 31, 2023 , the Company had $ 1.7 billion of outstanding floating rate borrowings, 78.0 % or $ 1.3 billion of which have interest rates tied to LIBOR and 22.0 % or $ 366.1 million of which have interest rates tied to SOFR. The Company expects to complete the process of converting its LIBOR-based borrowings to an applicable benchmark interest rate during 2023. Recent Accounting Standards Accounting Standards Adopted in 2023 In March 2022, the Financial Accounting Standards Board ("FASB") issued an amendment eliminating certain previously issued accounting guidance for troubled-debt restructurings (“TDRs”) and enhancing disclosure requirements surrounding refinancings, restructurings, and write-offs. Current GAAP provides an exception to the general recognition and measurement guidance for loan restructurings if they meet specific criteria to be considered TDRs. If a modification is a TDR, incremental expected losses are recorded in the allowance for credit losses upon modification and specific disclosures are required. The new amendment eliminates the TDR recognition and measurement guidance and requires the reporting entity to evaluate whether the modification represents a new loan or a continuation of an existing loan, consistent with accounting for other loan modifications. The amendment also requires public business entities to disclose current-period gross write-offs by year of origination for certain financing receivables and net investments in leases. The Company adopted this guidance during the three months ended March 31, 2023 and the adoption did no t have a material impact on the Company's consolidated financial statements. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2023 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | NOTE 3 - VARIABLE INTEREST ENTITIES The Company has evaluated its loans, investments in unconsolidated entities, liabilities to subsidiary trusts issuing preferred securities (consisting of unsecured junior subordinated notes), securitizations, guarantees and other financial contracts in order to determine if they are variable interests in VIEs. The Company regularly monitors these legal interests and contracts and, to the extent it has determined that it has a variable interest, analyzes the related entity for potential consolidation. Consolidated VIEs (the Company is the primary beneficiary) Based on management’s analysis, the Company was the primary beneficiary of five VIEs at both March 31, 2023 and December 31, 2022 (collectively, the “Consolidated VIEs”). The Consolidated VIEs are CRE securitizations and CDOs that were formed on behalf of the Company to invest in real estate-related securities, commercial mortgage-backed securities (“CMBS”), syndicated corporate loans and corporate bonds and were financed by the issuance of debt securities. By financing these assets with long-term borrowings through the issuance of debt securities, the Company seeks to generate attractive risk-adjusted equity returns and to match the term of its assets and liabilities. The primary beneficiary determination for each of these VIEs was made at each VIE’s inception and is continually assessed. In April 2022, the Company contributed an initial investment of $ 13.0 million for a 72.1 % interest in Charles Street-ACRES FSU Student Venture, LLC (the “FSU Student Venture”). The FSU Student Venture, a joint venture between the Company and two unrelated third parties, was formed for the purpose of developing a student housing project. The FSU Student Venture was determined not to be a VIE as there was sufficient equity at risk, it does not have disproportionate voting rights and its members all have the following characteristics: (1) the power to direct activities (2) the obligation to absorb losses and (3) the right to receive residual returns. However, the Company consolidated the FSU Student Venture due to its 72.1 % interest that provides the Company with unilateral control over all major decisions of the joint venture. The portion of the joint venture that the Company does not own is presented as non-controlling interest at and for the periods presented in the Company’s consolidated financial statements. The Company has exposure to losses on its securitizations to the extent of its investments in the subordinated debt and preferred equity of each securitization. The Company is entitled to receive payments of principal and interest on the debt securities it holds and, to the extent revenues exceed debt service requirements and other expenses of the securitizations, distributions with respect to its preferred equity interests. As a result of consolidation, the debt and equity interests the Company holds in these securitizations have been eliminated; and the Company’s consolidated balance sheets reflect the assets held, debt issued by the securitizations to third parties and any accrued payables to third parties. The Company’s operating results and cash flows include the gross amounts related to the securitizations’ assets and liabilities as opposed to the Company’s net economic interests in the securitizations. Assets and liabilities related to the securitizations are disclosed, in the aggregate, on the Company’s consolidated balance sheets. For a discussion of the debt issued through the securitizations see Note 10. Creditors of the Company’s Consolidated VIEs have no recourse to the general credit of the Company, nor to each other. During the three months ended March 31, 2023 and 2022, the Company did not provide any financial support to any of its VIEs nor does it have any requirement to do so, although it may choose to do so in the future to maximize future cash flows on such investments by the Company. There are no explicit arrangements that obligate the Company to provide financial support to any of its Consolidated VIEs. The following table shows the classification and carrying values of assets and liabilities of the Company’s Consolidated VIEs at March 31, 2023 (in thousands): CRE Securitizations Other Total ASSETS Restricted cash $ 33,125 $ 290 $ 33,415 Accrued interest receivable 8,837 — 8,837 CRE loans, pledged as collateral (1) 1,462,308 — 1,462,308 Other assets 31 56 87 Total assets (2) $ 1,504,301 $ 346 $ 1,504,647 LIABILITIES Accounts payable and other liabilities $ 165 $ — $ 165 Accrued interest payable 3,062 — 3,062 Borrowings 1,234,355 — 1,234,355 Total liabilities $ 1,237,582 $ — $ 1,237,582 (1) Excludes allowance for credit losses. (2) Assets of each of the Consolidated VIEs may only be used to settle the obligations of each respective VIE. Unconsolidated VIEs (the Company is not the primary beneficiary, but has a variable interest) Based on management’s analysis, the Company is not the primary beneficiary of the VIEs discussed below since it does not have both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. Accordingly, the following VIEs are not consolidated in the Company’s financial statements at March 31, 2023. The Company continuously reassesses whether it is deemed to be the primary beneficiary of its unconsolidated VIEs. The Company’s maximum exposure to risk for each of these unconsolidated VIEs is set forth in the “Maximum Exposure to Loss” column in the table below. Unsecured Junior Subordinated Debentures The Company has a 100 % interest in the common shares of each of Resource Capital Trust I (“RCT I”) and RCC Trust II (“RCT II”), respectively, with a value of $ 1.5 million in the aggregate, or 3.0 % of each trust, at March 31, 2023. RCT I and RCT II were formed for the purposes of providing debt financing to the Company. The Company completed a qualitative analysis to determine whether it is the primary beneficiary of each of the trusts and determined that it was not the primary beneficiary of either trust because it does not have the power to direct the activities most significant to the trusts, which include the collection of principal and interest through servicing rights. Accordingly, neither trust is consolidated into the Company’s consolidated financial statements. The Company records its investments in RCT I and RCT II’s common shares of $ 774,000 each as investments in unconsolidated entities using the cost method, recording dividend income when declared by RCT I and RCT II. The trusts each hold subordinated debentures for which the Company is the obligor in the amount of $ 25.8 million for each of RCT I and RCT II. The debentures were funded by the issuance of trust preferred securities of RCT I and RCT II. The following table shows the classification, carrying value and maximum exposure to loss with respect to the Company’s unconsolidated VIEs at March 31, 2023 (in thousands): Unsecured Junior Subordinated Debentures Maximum Exposure to Loss ASSETS Accrued interest receivable $ 11 $ — Investments in unconsolidated entities 1,548 $ 1,548 Total assets 1,559 LIABILITIES Accrued interest payable 382 N/A Borrowings 51,548 N/A Total liabilities 51,930 Net (liability) asset $ ( 50,371 ) At March 31, 2023 , there were no explicit arrangements or implicit variable interests that could require the Company to provide financial support to any of its unconsolidated VIEs. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION The following table summarizes the Company’s supplemental disclosure of cash flow information (in thousands): For the Three Months Ended March 31, 2023 2022 Supplemental cash flows: Interest expense paid in cash $ 32,028 $ 14,894 Income taxes paid in cash 101 180 Non-cash financing activities include the following: Distributions on preferred stock accrued but not paid $ 3,262 $ 3,262 |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2023 | |
Loans Held For Investment [Abstract] | |
LOANS | NOTE 5 - LOANS The following is a summary of the Company’s CRE loans held for investment (dollars in thousands, except amounts in footnotes): Description Quantity Principal Unamortized (Discount) Premium, net (1) Amortized Cost Allowance for Credit Losses Carrying Value Contractual Interest Rates (2) Maturity Dates (3)(4) At March 31, 2023: Whole loans (5)(6) 78 $ 2,001,105 $ ( 11,015 ) $ 1,990,090 $ ( 19,199 ) $ 1,970,891 1M BR plus 2.86 % to 1M BR plus 8.61 % April 2023 to July 2026 Mezzanine loan (5) 1 4,700 — 4,700 ( 4,700 ) — 10.00 % June 2028 Total $ 2,005,805 $ ( 11,015 ) $ 1,994,790 $ ( 23,899 ) $ 1,970,891 At December 31, 2022: Whole loans (5)(6) 81 $ 2,065,504 $ ( 12,614 ) $ 2,052,890 $ ( 14,103 ) $ 2,038,787 1M BR plus 2.85 % to 1M BR plus 8.50 % January 2023 to July 2026 Mezzanine loan (5) 1 4,700 — 4,700 ( 4,700 ) — 10.00 % June 2028 Total $ 2,070,204 $ ( 12,614 ) $ 2,057,590 $ ( 18,803 ) $ 2,038,787 (1) Amounts include unamortized loan origination fees of $ 10.7 million and $ 12.3 million and deferred amendment fees of $ 267,000 and $ 308,000 at March 31, 2023 and December 31, 2022, respectively. (2) Benchmark rates ("BR") comprise one-month LIBOR or one-month Term SOFR. At March 31, 2023, all of the Company's whole loans used one-month SOFR. Weighted-average one-month benchmark rates were 4.74 % and 4.21 % at March 31, 2023 and December 31, 2022, respectively. Additionally, weighted-average benchmark rate floors were 0.66 % and 0.68 % at March 31, 2023 and December 31, 2022, respectively. (3) Maturity dates exclude contractual extension options, subject to the satisfaction of certain terms that may be available to the borrowers. (4) Maturity dates exclude three whole loans, with amortized costs of $ 51.0 million and $ 51.6 million, in maturity default at March 31, 2023 and December 31, 2022, respectively. (5) Substantially all loans are pledged as collateral under various borrowings at March 31, 2023 and December 31, 2022. (6) CRE whole loans had $ 143.6 million and $ 158.2 million in unfunded loan commitments at March 31, 2023 and December 31, 2022 , respectively. These unfunded loan commitments are advanced as the borrowers formally request additional funding and meet certain benchmarks, as permitted under the loan agreement, and any necessary approvals have been obtained. The following is a summary of the contractual maturities of the Company’s CRE loans held for investment, at amortized cost (in thousands, except amounts in the footnotes): Description 2023 2024 2025 and Thereafter Total At March 31, 2023: Whole loans (1) $ 141,589 $ 924,605 $ 872,935 $ 1,939,129 Mezzanine loan — — 4,700 4,700 Total CRE loans (2) $ 141,589 $ 924,605 $ 877,635 $ 1,943,829 Description 2023 2024 2025 and Thereafter Total At December 31, 2022: Whole loans (1) $ 268,120 $ 882,175 $ 851,031 $ 2,001,326 Mezzanine loan — — 4,700 4,700 Total CRE loans (2) $ 268,120 $ 882,175 $ 855,731 $ 2,006,026 (1) Maturity dates exclude three whole loans, with amortized costs of $ 51.0 million and $ 51.6 million, in maturity default at March 31, 2023 and December 31, 2022, respectively. (2) At March 31, 2023 , the amortized costs of the floating-rate CRE whole loans, summarized by contractual maturity assuming full exercise of the extension options, were $ 58.0 million, $ 68.5 million and $ 1.8 billion in 2023, 2024 and 2025 and thereafter, respectively. At December 31, 2022 , the amortized costs of the floating-rate CRE whole loans, summarized by contractual maturity assuming full exercise of the extension options, were $ 113.8 million, $ 68.6 million and $ 1.8 billion in 2023, 2024 and 2025 and thereafter, respectively. At March 31, 2023, 23.2 % , 23.1 % and 13.9 % of the Company’s CRE loan portfolio was concentrated in the Southwest, Southeast and Mountain regions, respectively, based on carrying value, as defined by the National Council of Real Estate Investment Fiduciaries. At December 31, 2022 , 23.2 %, 21.5 % and 16.2 % of the Company’s CRE loan portfolio was concentrated in the Southwest, Southeast and Mountain regions, respectively, based on carrying value. At March 31, 2023 and December 31, 2022, no single loan or investment represented more than 10% of the Company’s total assets, and no single investment group generated over 10% of the Company’s revenue. Principal Paydowns Receivable Principal paydowns receivable represents loan principal payments that have been received by the Company’s servicers and trustees but have not been remitted to the Company. At March 31, 2023 , the Company had loan principal paydowns receivable of $ 54,000 . At December 31, 2022 , the Company had no loan principal paydowns receivable. |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
FINANCING RECEIVABLES | 90 Days and Accruing
At March 31, 2023:
Whole loans, floating-rate $ — $ — $ 50,961 $ 50,961 $ 1,939,129 $ 1,990,090 $ —
Mezzanine loan (4) 4,700 — — 4,700 — 4,700 —
Total $ 4,700 $ — $ 50,961 $ 55,661 $ 1,939,129 $ 1,994,790 $ —
At December 31, 2022:
Whole loans, floating-rate $ — $ — $ 28,767 $ 28,767 $ 2,024,123 $ 2,052,890 $ —
Mezzanine loan (4) — — — — 4,700 4,700 —
Total $ — $ — $ 28,767 $ 28,767 $ 2,028,823 $ 2,057,590 $ — (1) During the three months ended March 31, 2023 and 2022 , the Company recognized interest income of $ 1.1 million and $ 641,000 , respectively, on three CRE whole loans with a principal payment past due greater than 90 days at March 31, 2023. (2) Includes one CRE whole loan, with an amortized cost of $ 22.8 million, in maturity default at December 31, 2022. (3) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. (4) Fully reserved at both March 31, 2023 and December 31, 2022. At March 31, 2023 , the Company had three CRE whole loans, with total amortized costs of $ 51.0 million, and one mezzanine loan, with a total amortized cost of $ 4.7 million, in payment default. At December 31, 2022 , the Company had three CRE whole loans, with total amortized costs of $ 51.6 million, in payment default. Modifications During the three months ended March 31, 2023 , the Company did no t enter into any loan modifications for borrowers that are experiencing financial difficulty. During the three months ended March 31, 2022 , the Company entered into one agreement that extended one CRE whole loan, with a total amortized cost of $ 21.8 million, which represented 1.1 % of the total amortized cost of the portfolio." id="sjs-B4">NOTE 6 - FINANCING RECEIVABLES The following table shows the activity in the allowance for credit losses for the three months ended March 31, 2023 and the year ended December 31, 2022 (in thousands): Three Months Ended March 31, 2023 Year Ended December 31, 2022 Allowance for credit losses at beginning of period $ 18,803 $ 8,805 Provision for credit losses 5,096 12,295 Charge offs — ( 2,297 ) Allowance for credit losses at end of period $ 23,899 $ 18,803 During the three months ended March 31, 2023, the Company recorded a provision for expected credit losses of $ 5.1 million , primarily attributable to modeled increases in expected general portfolio credit risk as well as a general decline in macroeconomic conditions. At March 31, 2023 and December 31, 2022, the Company individually evaluated the following loans: • One office mezzanine loan in the Northeast region with a principal balance of $ 4.7 million at both March 31, 2023 and December 31, 2022. The Company fully reserved this loan in the fourth quarter of 2022, and it continues to be fully reserved at March 31, 2023. The loan entered payment default in February 2023 and has been placed on nonaccrual status. • One retail loan in the Northeast region, with a principal balance of $ 8.0 million at both March 31, 2023 and December 31, 2022, for which foreclosure was determined to be probable. The loan was modified in February 2021 to extend its maturity to December 2021 and has since entered into payment default and has been put on nonaccrual status. The loan had an as-is appraised value in excess of its principal and interest balances, and, as such, had no allowance for current expected credit losses (“CECL”) at March 31, 2023 and December 31, 2022, respectively. • One office loan in the Southwest region, with a principal balance of $ 20.1 million and $ 20.7 million at March 31, 2023 and December 31, 2022, respectively, for which foreclosure was determined to be probable. The loan had an initial maturity of March 2022, was modified three times to extend its maturity to June 2022 and has since entered into payment default and has been put on nonaccrual status. However, in exchange for payments, comprising principal paydowns, interest payments and the reimbursement of certain legal fees, received between October 2022 and April 2023, the Company has agreed to temporarily defer its right to foreclose on the property until July 2023. Additionally, at both March 31, 2023 and December 31, 2022, this loan had an as-is appraised value in excess of its principal and interest balances, and, as such, had no CECL allowance. Credit quality indicators Commercial Real Estate Loans CRE loans are collateralized by a diversified mix of real estate properties and are assessed for credit quality based on the collective evaluation of several factors, including but not limited to: collateral performance relative to underwritten plan, time since origination, current implied and/or re-underwritten loan-to-collateral value ("LTV") ratios, loan structure and exit plan. Depending on the loan’s performance against these various factors, loans are rated on a scale from 1 to 5, with loans rated 1 representing loans with the highest credit quality and loans rated 5 representing loans with the lowest credit quality. The factors evaluated provide general criteria to monitor credit migration in the Company’s loan portfolio; as such, a loan’s rating may improve or worsen, depending on new information received. The criteria set forth below should be used as general guidelines. Therefore, not every loan will have all of the characteristics described in each category below. Risk Rating Risk Characteristics 1 Property performance has surpassed underwritten expectations. Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high-quality tenant mix. 2 Property performance is consistent with underwritten expectations and covenants and performance criteria are being met or exceeded. Occupancy is stabilized, near stabilized or is on track with underwriting. 3 Property performance lags behind underwritten expectations. Occupancy is not stabilized and the property has some tenancy rollover. 4 Property performance significantly lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers. Occupancy is not stabilized and the property has a large amount of tenancy rollover. 5 Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Expected sale proceeds would not be sufficient to pay off the loan at maturity. The property has a material vacancy rate and significant rollover of remaining tenants. An updated appraisal is required upon designation and updated on an as-needed basis. All CRE loans are evaluated for any credit deterioration by debt asset management and certain finance personnel on at least a quarterly basis. Mezzanine loans may experience greater credit risks due to their nature as subordinated investments. For the purpose of calculating the quarterly provision for credit losses under CECL, the Company pools CRE loans based on the underlying collateral property type and utilizes a probability of default and loss given default methodology for approximately one year after which it immediately reverts to a historical mean loss ratio. Credit risk profiles of CRE loans at amortized cost were as follows (in thousands, except amounts in the footnote): Rating 1 Rating 2 Rating 3 Rating 4 Rating 5 Total (1) At March 31, 2023: Whole loans, floating-rate $ — $ 1,532,268 362,903 $ 43,958 $ 50,961 $ 1,990,090 Mezzanine loan — — — — 4,700 4,700 Total $ — $ 1,532,268 $ 362,903 $ 43,958 $ 55,661 $ 1,994,790 At December 31, 2022: Whole loans, floating-rate $ — $ 1,635,376 $ 309,491 $ 85,226 $ 22,797 $ 2,052,890 Mezzanine loan — — — — 4,700 4,700 Total $ — $ 1,635,376 $ 309,491 $ 85,226 $ 27,497 $ 2,057,590 (1) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. Credit risk profiles of CRE loans by origination year at amortized cost were as follows (in thousands, except amounts in the footnotes): 2023 2022 2021 2020 2019 Prior Total (1) At March 31, 2023: Whole loans, floating-rate: (2) Rating 2 $ 14,759 $ 480,017 $ 944,121 $ 52,722 $ 26,949 $ 13,700 $ 1,532,268 Rating 3 — 52,619 203,273 34,387 27,887 44,737 362,903 Rating 4 — — 43,958 — — — 43,958 Rating 5 — — — — 42,936 8,025 50,961 Total whole loans, floating-rate 14,759 532,636 1,191,352 87,109 97,772 66,462 1,990,090 Mezzanine loan (rating 5) — — — — — 4,700 4,700 Total $ 14,759 $ 532,636 $ 1,191,352 $ 87,109 $ 97,772 $ 71,162 $ 1,994,790 Current Period Gross Write-Offs (3) $ — $ — $ — $ — $ — $ — $ — 2022 2021 2020 2019 2018 Prior Total (1) At December 31, 2022: Whole loans, floating-rate: (2) Rating 2 $ 526,606 $ 1,003,060 $ 64,944 $ 26,977 $ 13,789 $ — $ 1,635,376 Rating 3 — 192,490 44,657 27,881 44,463 — 309,491 Rating 4 — — — 20,742 64,484 — 85,226 Rating 5 — — — 22,797 — — 22,797 Total whole loans, floating-rate 526,606 1,195,550 109,601 98,397 122,736 — 2,052,890 Mezzanine loan (rating 5) — — — — 4,700 — 4,700 Total $ 526,606 $ 1,195,550 $ 109,601 $ 98,397 $ 127,436 $ — $ 2,057,590 (1) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. (2) Acquired CRE whole loans are grouped within each loan’s year of origination. (3) There were no charge-offs during the three months ended March 31, 2023. At both March 31, 2023 and December 31, 2022 , the Company had one additional mezzanine loan included in other assets held for sale that had no carrying value. Loan Portfolio Aging Analysis The following table presents the CRE loan portfolio aging analysis at the dates indicated for CRE loans at amortized cost (in thousands, except amounts in footnotes): 30-59 Days 60-89 Days Greater than 90 (1) Total Past Due Current (2) Total Loans Receivable (3) Total Loans > 90 Days and Accruing At March 31, 2023: Whole loans, floating-rate $ — $ — $ 50,961 $ 50,961 $ 1,939,129 $ 1,990,090 $ — Mezzanine loan (4) 4,700 — — 4,700 — 4,700 — Total $ 4,700 $ — $ 50,961 $ 55,661 $ 1,939,129 $ 1,994,790 $ — At December 31, 2022: Whole loans, floating-rate $ — $ — $ 28,767 $ 28,767 $ 2,024,123 $ 2,052,890 $ — Mezzanine loan (4) — — — — 4,700 4,700 — Total $ — $ — $ 28,767 $ 28,767 $ 2,028,823 $ 2,057,590 $ — (1) During the three months ended March 31, 2023 and 2022 , the Company recognized interest income of $ 1.1 million and $ 641,000 , respectively, on three CRE whole loans with a principal payment past due greater than 90 days at March 31, 2023. (2) Includes one CRE whole loan, with an amortized cost of $ 22.8 million, in maturity default at December 31, 2022. (3) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. (4) Fully reserved at both March 31, 2023 and December 31, 2022. At March 31, 2023 , the Company had three CRE whole loans, with total amortized costs of $ 51.0 million, and one mezzanine loan, with a total amortized cost of $ 4.7 million, in payment default. At December 31, 2022 , the Company had three CRE whole loans, with total amortized costs of $ 51.6 million, in payment default. Modifications During the three months ended March 31, 2023 , the Company did no t enter into any loan modifications for borrowers that are experiencing financial difficulty. During the three months ended March 31, 2022 , the Company entered into one agreement that extended one CRE whole loan, with a total amortized cost of $ 21.8 million, which represented 1.1 % of the total amortized cost of the portfolio. |
INVESTMENTS IN REAL ESTATE AND
INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Abstract] | |
INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES | NOTE 7 - INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES At March 31, 2023 , the Company held investments in five real estate properties, four of which are included in investments in real estate, and one of which is included in properties held for sale on the consolidated balance sheets. In February 2023, the Company sold a hotel property in the Northeast region that was previously designated as a property held for sale. The hotel property sold for $ 15.1 million with selling costs of $ 845,000 , resulting in a gain of $ 745,000 . The following table summarizes the book value of the Company’s investments in real estate and properties held for sale (in thousands, except amounts in the footnotes): March 31, 2023 December 31, 2022 Cost Basis Accumulated Depreciation & Amortization Carrying Value Cost Basis Accumulated Depreciation & Amortization Carrying Value Assets: Investments in real estate, equity: Investments in real estate (1) $ 133,522 $ ( 2,951 ) $ 130,571 $ 123,219 $ ( 2,251 ) $ 120,968 Right of use assets (2)(3) 19,664 ( 273 ) 19,391 19,664 ( 205 ) 19,459 Intangible assets (4) 11,474 ( 2,846 ) 8,628 11,474 ( 2,594 ) 8,880 Subtotal 164,660 ( 6,070 ) 158,590 154,357 ( 5,050 ) 149,307 Investments in real estate from lending activities: Properties held for sale (5) 40,377 — 40,377 53,769 — 53,769 Total 205,037 ( 6,070 ) 198,967 208,126 ( 5,050 ) 203,076 Liabilities: Investments in real estate, equity: Mortgage payable 18,089 207 18,296 18,089 155 18,244 Other liabilities 247 ( 192 ) 55 247 ( 183 ) 64 Lease liabilities (3)(6) 43,260 ( 226 ) 43,034 43,260 ( 393 ) 42,867 Subtotal (7) 61,596 ( 211 ) 61,385 61,596 ( 421 ) 61,175 Investments in real estate from lending activities: Liabilities held for sale 3,025 — 3,025 3,025 — 3,025 Total 64,621 ( 211 ) 64,410 64,621 ( 421 ) 64,200 Total net investments in real estate and properties held for sale (8) $ 140,416 $ 134,557 $ 143,505 $ 138,876 (1) Includes $ 38.4 million of land, which is not depreciable, at March 31, 2023 and December 31, 2022, respectively. (2) Primarily comprises a $ 19.0 million right of use asset, associated with an acquired ground lease of $ 42.6 million (see below) accounted for as an operating lease at March 31, 2023 and December 31, 2022. Amortization is booked to real estate expenses on the consolidated statements of operations. (3) Refer to Note 8 for additional information on the Company’s remaining operating leases. (4) Primarily comprises a franchise intangible of $ 5.1 million and $ 5.3 million, a management contract of $ 3.1 million, and a customer list of $ 357,000 and $ 427,000 at March 31, 2023 and December 31, 2022, respectively. (5) At December 31, 2022, properties held for sale included two properties originally acquired in November 2020 and July 2022. At March 31, 2023, only the property acquired in November 2020 was in property held for sale. (6) Primarily comprises a $ 42.6 million ground lease with a remaining term of 93 years. Lease expenses for the three months ended March 31, 2023 were $ 661,000 . (7) Excludes $ 2.2 million o f deferred debt issuance costs on construction loans that can be drawn upon subsequent to March 31, 2023 . (8) Excludes items of working capital, either acquired or assumed. The Company acquired a ground lease with its equity investment in a hotel property in April 2022. This ground lease has an associated above-market lease intangible liability. The ground lease confers the Company the right to use the land on which its hotel operates, and the ground lease payments increase 3.00 % per year until 2116. The Company acquired the original 99 -year lease with 94 years remaining during the second quarter of 2022. At March 31, 2023 , 93 years remain in its term. The Company recorded lease payments of $ 426,000 for the three months ended March 31, 2023. The Company recorded amortization of $ 51,000 during the three months ended March 31, 2023 related to the right of use asset and accretion of $ 610,000 during the three months ended March 31, 2023 related to its ground lease liability. During the three months ended March 31, 2023 and 2022 , the Company recorded amortization expense of $ 252,000 and $ 1.2 million, respectively, on its intangible assets. The Company expects to record amortization expense of $ 1.3 million, $ 1.2 million, $ 1.1 million, $ 1.0 million and $ 1.0 million during the 2023, 2024, 2025, 2026 and 2027 fiscal years, respectively, on its intangible assets. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 8 - LEASES In addition to the ground lease discussed in Note 7, the Company has operating leases for office space and office equipment. The leases have terms that expire between January 2024 and September 2029 . The leases on the office space and office equipment contain options for early termination granted to the Company and the lessor. Lease payments are determined as follows: • Office space: payments are made on a fixed schedule, escalating annually, and also include the Company’s responsibility for a percentage of increases in the building’s property taxes and operating expenses over the base year. • Office equipment: payments are made on a fixed schedule. The following table summarizes the Company’s operating leases (in thousands): March 31, 2023 December 31, 2022 Operating Leases: Right of use assets $ 761 $ 822 Lease liabilities $ ( 803 ) $ ( 828 ) Weighted average remaining lease term: 6.5 years 6.7 years Weighted average discount rate (1) : 8.70 % 8.71 % (1) The market discount rate is used, when readily determinable, in calculating the present value of lease payments for the operating lease liability. Otherwise, the incremental borrowing rate on the commencement date is used. The following table summarizes the Company’s operating lease costs and cash payments for the periods presented (in thousands): Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Lease Cost: Operating lease cost $ 75 $ 24 Other Information: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 37 $ 23 The following table summarizes the Company’s operating leases cash flow obligations on an undiscounted, annual basis (in thousands): Operating Leases 2023 $ 115 2024 155 2025 159 2026 163 2027 167 Thereafter 303 Subtotal 1,062 Less: impact of discount ( 259 ) Total $ 803 |
INVESTMENTS IN UNCONSOLIDATED E
INVESTMENTS IN UNCONSOLIDATED ENTITIES | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments And Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | NOTE 9 - INVESTMENTS IN UNCONSOLIDATED ENTITIES The Company’s investments in unconsolidated entities at March 31, 2023 and December 31, 2022 comprised a 100 % interest in the common shares of RCT I and RCT II with a value of $ 1.5 million in the aggregate, or 3.0 % of each trust. The Company records its investments in RCT I’s and RCT II’s common shares as investments in unconsolidated entities using the cost method, recording dividend income when declared by RCT I and RCT II. During the three months ended March 31, 2023 , the Company recorded dividends from its investments in RCT I’s and RCT II’s common shares, reported in other revenue on the consolidated statement of operations, of $ 33,000 . During the three months ended March 31, 2022 , the Company recorded dividends of $ 16,000 . |
BORROWINGS
BORROWINGS | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
BORROWINGS | 10 - BORROWINGS The Company historically has financed the acquisition of its investments, including investment securities and loans, through the use of secured and unsecured borrowings. Certain information with respect to the Company’s borrowings is summarized in the following table (dollars in thousands, except amounts in the footnotes): Principal Outstanding Unamortized Issuance Costs and Discounts Outstanding Borrowings Weighted Average Borrowing Rate Weighted Average Remaining Maturity Value of Collateral At March 31, 2023: ACR 2021-FL1 Senior Notes $ 675,223 $ 3,430 $ 671,793 6.20 % 13.2 years 802,643 ACR 2021-FL2 Senior Notes 567,000 4,438 562,562 6.51 % 13.8 years 700,000 Senior secured financing facility 53,336 3,481 49,855 8.54 % 4.7 years 127,185 CRE - term warehouse financing facilities (1) 313,493 2,217 311,276 7.32 % 1.6 years 434,695 Mortgage payable 18,710 414 18,296 8.58 % 2.0 years 25,400 Construction loans — 2,225 ( 2,225 ) — — — 5.75 % Senior Unsecured Notes 150,000 2,338 147,662 5.75 % 3.4 years — Unsecured junior subordinated debentures 51,548 — 51,548 8.93 % 13.4 years — Total $ 1,829,310 $ 18,543 $ 1,810,767 6.62 % 10.3 years $ 2,089,923 Principal Outstanding Unamortized Issuance Costs and Discounts Outstanding Borrowings Weighted Average Borrowing Rate Weighted Average Remaining Maturity Value of Collateral At December 31, 2022: ACR 2021-FL1 Senior Notes $ 675,223 $ 3,826 $ 671,397 5.81 % 13.5 years 802,643 ACR 2021-FL2 Senior Notes 567,000 4,841 562,159 6.13 % 14.1 years 700,000 Senior secured financing facility 91,549 3,659 87,890 7.94 % 5.0 years 196,837 CRE - term warehouse financing facilities (1) 330,849 2,561 328,288 6.85 % 1.8 years 453,550 Mortgage payable 18,710 466 18,244 8.08 % 2.3 years 25,400 5.75 % Senior Unsecured Notes 150,000 2,493 147,507 5.75 % 3.6 years — Unsecured junior subordinated debentures 51,548 — 51,548 8.52 % 13.7 years — Total $ 1,884,879 $ 17,846 $ 1,867,033 6.29 % 10.3 years $ 2,178,430 (1) Principal outstanding includes accrued interest payable of $ 879,000 and $ 894,000 at March 31, 2023 and December 31, 2022 , respectively. Securitizations The following table sets forth certain information with respect to the Company’s consolidated securitizations at March 31, 2023 (in thousands, except amount in footnotes): Closing Date Maturity Date Reinvestment Period End (1) Total Note Paydowns from Closing Date through March 31, 2023 ACR 2021-FL1 May 2021 June 2036 May 2023 $ — ACR 2021-FL2 December 2021 January 2037 December 2023 $ — (1) The reinvestment period is the period in which principal proceeds received may be used to acquire CRE loans for reinvestment into the securitization. The investments held by the Company’s securitizations collateralize the securitizations’ borrowings and, as a result, are not available to the Company, its creditors, or stockholders. All senior notes of the securitizations held by the Company at both March 31, 2023 and December 31, 2022 were eliminated in consolidation. XAN 2020-RSO8 In March 2020, the Company closed Exantas Capital Corp. 2020-RSO8, Ltd. (“XAN 2020-RSO8”), a $ 522.6 million CRE debt securitization transaction that provided financing for CRE loans. In March 2022, the Company exercised the optional redemption of XAN 2020-RSO8, and all of the outstanding senior notes were paid off from the sales proceeds of certain of the securitization’s assets. XAN 2020-RSO9 In September 2020, the Company closed Exantas Capital Corp. 2020-RSO9, Ltd. (“XAN 2020-RSO9”), a $ 297.0 million CRE debt securitization transaction that provided financing for CRE loans. In February 2022, the Company exercised the optional redemption of XAN 2020-RSO9, and all of the outstanding senior notes were paid off from the sales proceeds of certain of the securitization’s assets. ACR 2021-FL1 In May 2021, the Company closed ACRES Commercial Realty 2021-FL1 Issuer, Ltd. (“ACR 2021-FL1”), a $ 802.6 million CRE debt securitization transaction that provided financing for CRE loans. ACR 2021-FL1 issued a total of $ 675.2 million of non-recourse, floating-rate notes to third parties at par. Additionally, ACRES RF retained 100 % of the Class F and Class G notes and a subsidiary of ACRES RF retained 100 % of the outstanding preference shares. The preference shares are subordinated in right of payment to all other securities issued by ACR 2021-FL1. ACR 2021-FL1 includes a reinvestment period, which ends in May 2023, that allows it to acquire CRE loans for reinvestment into the securitization using uninvested principal proceeds. All of the notes issued mature in June 2036, although the Company has the right to call the notes beginning on the payment date in May 2023 and thereafter. ACR 2021-FL2 In December 2021, the Company closed ACRES Commercial Realty 2021-FL2 Issuer, Ltd. (“ACR 2021-FL2”), a CRE debt securitization transaction that can finance up to $ 700.0 million of CRE loans. ACR 2021-FL2 issued a total of $ 567.0 million of non-recourse, floating-rate notes to third parties at par. Additionally, ACRES RF retained 100 % of the Class F and Class G notes and a subsidiary of ACRES RF retained 100 % of the outstanding preference shares. The preference shares are subordinated in right of payment to all other securities issued by ACR 2021-FL2. ACR 2021-FL2 included a 180-day ramp up acquisition period that allowed it to acquire CRE loans using unused proceeds from the issuance of the non-recourse floating-rate notes. Additionally, ACR 2021-FL2 includes a reinvestment period, which ends in December 2023, that allows it to acquire CRE loans for reinvestment into the securitization using uninvested principal proceeds. All of the notes issued mature in January 2037, although the Company has the right to call the notes beginning on the payment date in December 2023 and thereafter. Financing Arrangements Borrowings under the Company’s senior secured financing facility, term warehouse financing facilities, mortgage payable and construction loans are guaranteed by the Company or one or more of its subsidiaries. The following table sets forth certain information with respect to the Company’s financing arrangements (dollars in thousands, except amounts in footnotes): March 31, 2023 December 31, 2022 Outstanding Borrowings Value of Collateral Number of Positions as Collateral Weighted Average Interest Rate Outstanding Borrowings Value of Collateral Number of Positions as Collateral Weighted Average Interest Rate Senior Secured Financing Facility Massachusetts Mutual Life Insurance Company (1) $ 49,855 $ 127,185 6 8.54 % $ 87,890 $ 196,837 8 7.94 % CRE - Term Warehouse Financing Facilities (2) JPMorgan Chase Bank, N.A. (3) 178,723 246,740 10 7.25 % 186,783 255,095 11 6.74 % Morgan Stanley Mortgage Capital Holdings LLC (4) 132,553 187,955 9 7.41 % 141,505 198,455 10 7.00 % Mortgage Payable Readycap Commercial, LLC (5) 18,296 25,400 1 8.58 % 18,244 25,400 1 8.08 % Construction Loans Oceanview Life and Annuity Company (6) ( 2,225 ) N/A N/A —% — — — —% Total $ 377,202 $ 587,280 $ 434,422 $ 675,787 (1) Includes $ 3.5 million and $ 3.7 million of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (2) Outstanding borrowings include accrued interest payable. (3) Includes $ 993,000 and $ 1.1 million of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (4) Includes $ 1.2 million and $ 1.4 million of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (5) Includes $ 414,000 and $ 466,000 of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (6) Includes $ 2.2 million of deferred debt issuance costs at March 31, 2023 . The following table shows information about the amount at risk under the Company's financing arrangements (dollars in thousands): Amount at Risk (1) Weighted Average Remaining Maturity Weighted Average Interest Rate At March 31, 2023: Senior Secured Financing Facility (1) Massachusetts Mutual Life Insurance Company $ 74,052 4.7 years 8.54 % CRE - Term Warehouse Financing Facilities (1) JPMorgan Chase Bank, N. A. $ 68,674 1.6 years 7.25 % Morgan Stanley Mortgage Capital Holdings LLC $ 55,478 1.6 years 7.41 % Mortgage Payable (2) Readycap Commercial, LLC $ 6,596 2.0 years 8.58 % (1) Equal to the total of the estimated fair value of securities or loans sold and accrued interest receivable, minus the total of the warehouse financing agreement liabilities and accrued interest payable. (2) Equal to the total of the estimated fair value of real estate property investment financed, minus the total of the mortgage payable agreement liability and accrued interest payable. The Company was in compliance with all financial covenants in each of the respective agreements at March 31, 2023 and December 31, 2022. Senior Secured Financing Facility On July 31, 2020, an indirect, wholly owned subsidiary (“Holdings”), along with its direct wholly owned subsidiary (the “Borrower”), of the Company entered into a $ 250.0 million Loan and Servicing Agreement (the “MassMutual Loan Agreement”) with MassMutual and the other lenders party thereto (the “Lenders”). The asset-based revolving loan facility (the “MassMutual Facility”) provided under the MassMutual Loan Agreement has been used to finance the Company’s core CRE lending business. The MassMutual Facility initially had an interest rate of 5.75 % per annum payable monthly and initially matured on July 31, 2027 . In December 2022, Holdings, the Borrower and the Lenders entered into an Amended and Restated Loan and Servicing Agreement, which amends and restates the MassMutual Loan Agreement, and reflects a senior secured term loan facility, not to exceed $ 500.0 million, composed of individual loan series issued upon mutual agreement of the Borrower and Lenders. Each loan series will be available for three months after the closing date agreed upon by the Borrower and Lender (“Commitment Period”), subject to the maximum dollar amount agreed upon for that series. The Commitment Period is subject to immediate termination upon the occurrence of an event of default. Each loan series will have a final maturity of five years from the issuance date for the loan series unless an additional time is mutually agreed upon by the Lenders and Borrower. The advance rate on portfolio assets will be mutually agreed upon by the Lenders and Borrower. Each loan series will have its own mutually agreed upon interest rate equal to one-month Term SOFR plus the applicable spread. CRE - Term Warehouse Financing Facilities In April 2018, an indirect, wholly-owned subsidiary of the Company entered into a master repurchase agreement (the “Barclays Facility”) with Barclays Bank PLC (“Barclays”) to finance the origination of CRE loans. In February 2022, such subsidiary entered into the Third Amendment to Master Repurchase Agreement (the “Barclays Amendment”) with Barclays, which amended the Barclays Facility to add market terms regarding the replacement of LIBOR upon determination of a benchmark transition event. In October 2022, the Barclays Facility matured. In October 2018, an indirect, wholly-owned subsidiary of the Company entered into a master repurchase agreement (the “JPMorgan Chase Facility”) with JP Morgan Chase to finance the origination of CRE loans. At March 31, 2023, this facility has been amended five times to amend various terms. The JPMorgan Chase Facility has a maximum facility amount of $ 250.0 million, charges interest of one-month benchmark plus market spreads and has an initial maturity date of October 2024 . In November 2021, an indirect, wholly-owned subsidiary of the Company entered into a master repurchase and securities contract agreement (the “Morgan Stanley Facility”) with Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”) to finance the origination of CRE loans. At March 31, 2023, this facility has been amended two times to amend various terms. The Morgan Stanley Facility has a maximum facility amount of $ 250.0 million, charges interest of one-month Term SOFR plus market spreads and matures in November 2024 . The Company also has the right to request a one-year extension. Mortgage Payable In April 2022, Chapel Drive West, LLC, a wholly owned subsidiary of the FSU Student Venture, entered into a Loan Agreement (the “Mortgage”) with Readycap Commercial, LLC (“Readycap”) to finance the acquisition of a student housing complex. The Mortgage is interest only and has a maximum principal balance of $ 20.4 million, of which, $ 18.7 million was advanced in the initial funding. Initially, the Mortgage charged interest of 30-day average SOFR plus a spread of 3.80 %. In October 2022, the Mortgage was amended to charge interest of one-month Term SOFR plus a spread of 3.80 %. The Mortgage matures in April 2025 , subject to two one-year extension options. The Mortgage contains events of default, subject to certain materiality thresholds and grace periods, customary for this type of financing arrangement. The remedies for such events of default are also customary for this type of transaction. Construction Loans In January 2023, Chapel Drive East, LLC, a wholly owned subsidiary of the FSU Student Venture, entered into a loan agreement (the "Construction Loan Agreement") with Oceanview Life and Annuity Company ("Oceanview") to finance the construction of a student housing complex (the "Construction Loan"). The Construction Loan is interest only and has a maximum principal balance of $ 48.0 million. The Construction Loan charges one-month Term SOFR plus a spread of 6.00 % and matures in February 2025 , subject to three one-year extension options. In addition to the Construction Loan, Chapel Drive East, LLC, entered into a financing agreement with Florida Pace Funding Agency to fund energy efficient building improvements and has a maximum principal balance of $ 15.5 million. This agreement charges fixed interest of 7.26 % and matures in July 2053 . The Company does not guarantee this financing agreement. In connection with the Company's investment in the student housing complex, ACRES RF entered into guarantees related to the Construction Loan. Pursuant to the guarantees, Jason Pollack, Frank Dellaglio and ACRES RF (collectively, the "Guarantors"), for the benefit of Oceanview, provided limited "bad boy" guaranties to Oceanview pursuant to the Construction Loan Agreement until the earlier of the payment in full of the indebtedness or the date of a sale of the property pursuant to a foreclosure of the mortgage or deed or other transfer in lieu of foreclosure is accepted by Oceanview. The Guarantors also entered into a Completion Guaranty Agreement for the benefit of Oceanview to guaranty the timely completion of the project in accordance with the Construction Loan Agreement, as well as a Carry Guaranty Agreement, for the benefit of Oceanview to guaranty and unconditional payment by Chapel Drive East, LLC of all customary or necessary costs and expenses incurred in connection with the operation, maintenance and management of the property and an Environmental Indemnity Agreement jointly and severally in favor of Oceanview whereby the Guarantors serving as Indemnitors provided environmental representations and warranties, covenants and indemnifications (collectively the "Guaranties"). The Guaranties include certain financial covenants required of ACRES RF, including required net worth and liquidity requirements. Corporate Debt 4.50% Convertible Senior Notes The Company issued $ 143.8 million aggregate principal of its 4.50 % convertible senior notes due 2022 (“4.50% Convertible Senior Notes”) in August 2017, of which $ 55.8 million was repurchased in 2021. During the three months ended March 31, 2022, the Company repurchased $ 39.8 million of its 4.50 % Convertible Senior Notes, resulting in a charge to earnings of $ 574,000 , comprising an extinguishment of debt charge of $ 460,000 in connection with the acceleration of the market discount and interest expense of $ 114,000 in connection with the acceleration of deferred debt issuance costs. In August 2022, the remaining $ 48.2 million of the 4.50 % Convertible Senior Notes were paid off upon maturity at par. During the three months ended March 31, 2022, without consideration for incremental, accelerated amortization expense associated with the partial redemptions of the Convertible Senior Notes, the effective interest rate was 7.43 %. 5.75% Senior Unsecured Notes Due 2026 On August 16, 2021, the Company issued $ 150.0 million of its 5.75 % senior unsecured notes due 2026 (the “5.75% Senior Unsecured Notes”) pursuant to its Indenture, dated August 16, 2021 (the “Base Indenture”), between it and Wells Fargo, now Computershare Trust Company, N.A. (“CTC”), as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated August 16, 2021, between it and Wells Fargo, now CTC, (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). Prior to May 15, 2026, the Company may at its option redeem the 5.75 % Senior Unsecured Notes, in whole or in part, at a redemption price equal to the sum of (i) 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date, and (ii) a make-whole premium. On or after May 15, 2026, the Company may at its option redeem the 5.75 % Senior Unsecured Notes, at any time, in whole or in part, on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100 % of the principal amount of the 5.75 % Senior Unsecured Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date. Unsecured Junior Subordinated Debentures During 2006, the Company formed RCT I and RCT II for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. RCT I and RCT II are not consolidated into the Company’s consolidated financial statements because the Company is not deemed to be the primary beneficiary of these entities. In connection with the issuance and sale of the capital securities, the Company issued junior subordinated debentures to RCT I and RCT II of $ 25.8 million each, representing the Company’s maximum exposure to loss. The debt issuance costs associated with the junior subordinated debentures for RCT I and RCT II were included in borrowings and were amortized into interest expense on the consolidated statements of operations using the effective yield method over a ten year period. There were no unamortized debt issuance costs associated with the junior subordinated debentures for RCT I and RCT II outstanding at March 31, 2023 and December 31, 2022. The interest rates for RCT I and RCT II, at March 31, 2023, were 9.11 % and 8.75 % , respectively. The interest rates for RCT I and RCT II, at December 31, 2022, were 8.68 % and 8.36 %, respectively. Contractual maturity dates of the Company’s borrowings’ principal outstanding by category and year are presented in the table below (in thousands): Total 2024 2025 2026 2027 2028 and Thereafter At March 31, 2023: CRE securitizations $ 1,242,223 $ — $ — $ — $ — $ 1,242,223 Senior Secured Financing Facility 53,336 — — — 53,336 — CRE - term warehouse financing facilities (1) 313,493 313,493 — — — — Mortgage payable 18,710 — 18,710 — — — 5.75% Senior Unsecured Notes 150,000 — — 150,000 — — Unsecured junior subordinated debentures 51,548 — — — — 51,548 Total $ 1,829,310 $ 313,493 $ 18,710 $ 150,000 $ 53,336 $ 1,293,771 (1) Includes accrued interest payable in the balances of principal outstanding. |
SHARE ISSUANCE AND REPURCHASE
SHARE ISSUANCE AND REPURCHASE | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders Equity Note [Abstract] | |
SHARE ISSUANCE AND REPURCHASE | NOTE 11 - SHARE ISSUANCE AND REPURCHASE In May 2021, and subsequently in June 2021, the Company issued a total of 4.6 million shares of 7.875 % Series D Cumulative Redeemable Preferred Stock (“Series D Preferred Stock”) at a public offering price of $ 25.00 per share. The Company received net proceeds of $ 110.4 million after $ 4.6 million of underwriting discounts and other offering expenses. Dividends are payable quarterly in arrears at the end of January, April, July and October. The Series D Preferred Stock has no maturity date and the Company is not required to redeem the Series D Preferred Stock at any time. On or after May 21, 2026, the Company may, at its option, redeem the Series D Preferred Stock, in whole or part, at any time and from time to time, for cash at $ 25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date. On October 4, 2021, the Company and the Manager entered into an Equity Distribution Agreement with JonesTrading Institutional Services LLC, as placement agent (“JonesTrading”), pursuant to which the Company may issue and sell from time to time up to 2.2 million shares of the Series D Preferred Stock. Sales of the Series D Preferred Stock may be made in transactions that are deemed to be “at the market” offerings, as defined in Rule 415 of the Securities Act of 1933, as amended, including without limitation, sales made directly on the New York Stock Exchange, on any other existing trading market for the shares or to or through a market maker. Subject to the terms of the Company’s notice, JonesTrading may also sell the shares by any other method permitted by law, including but not limited to in privately negotiated transactions. The Company will pay JonesTrading a commission up to 3.0 % of the gross proceeds from the sales of the Series D Preferred Stock pursuant to the agreement. The terms and conditions of the agreement include various representations and warranties, conditions to closing, indemnification rights and obligations of the parties and termination provisions. During the three months ended March 31, 2023 , the Company did no t issue any Series D Preferred Stock through this agreement. During the year ended December 31, 2022, the Company did not issue any Series D Preferred Stock through this agreement. On or after July 30, 2024, the Company may, at its option, redeem its 8.625 % Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”), in whole or in part, at any time and from time to time, for cash at $ 25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date. Effective July 30, 2024 and thereafter, the Company will pay cumulative dividends on the Series C Preferred Stock at a floating rate equal to three-month LIBOR plus 5.927 % per annum based on the $ 25.00 liquidation preference, provided that such floating rate shall not be less than the initial rate of 8.625 % at any date of determination. At March 31, 2023 , the Company had 4.8 million shares of Series C Preferred Stock and 4.6 million shares of Series D Preferred Stock outstanding, with weighted average issuance prices, excluding offering costs, of $ 25.00 . In March 2016, the board of directors (the “Board”) approved a securities repurchase plan, and in November 2020, the Board reauthorized and approved the continued use of this plan to repurchase up to $ 20.0 million of the outstanding shares of the Company’s common stock. Additionally, the Board authorized the Company to enter into written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Exchange Act”). In July 2021, the authorized amount was fully utilized. In November 2021, the Board authorized and approved the continued use of its existing share repurchase plan to repurchase an additional $ 20.0 million of the outstanding shares of the Company's common stock. Under the share repurchase plan, the Company intends to repurchase shares through open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 and 10b5-1 of the Exchange Act. During the three months ended March 31, 2023 and 2022 , the Company repurchased $ 756,000 and $ 3.9 million of its common stock, respectively, representing 79,744 and 314,552 shares, respectively. At March 31, 2023 , $ 6.5 million remains available under this repurchase plan. On July 31, 2020, the Company entered into a Note and Warrant Purchase Agreement (the “Note and Warrant Purchase Agreement”) with Oaktree Capital Management, L.P. (“Oaktree”) and Massachusetts Mutual Life Insurance Company (“MassMutual”) pursuant to which the Company may issue to Oaktree and MassMutual from time to time up to $ 125.0 million aggregate principal amount of 12.00 % Senior Unsecured Notes. In connection with the Note and Warrant Purchase Agreement, the 12.00% Senior Unsecured Notes give Oaktree and MassMutual warrants to purchase an aggregate of up to 1,166,653 shares of common stock at an exercise price of $ 0.03 per share, subject to certain potential adjustments. On July 31, 2020, concurrently with the issuance of the 12.00% Senior Unsecured Notes, the Company issued to Oaktree warrants to purchase 391,995 shares of common stock for an aggregate purchase price of $ 42.0 million and issued to MassMutual warrants to purchase 74,666 shares of common stock for an aggregate purchase price of $ 8.0 million. The warrants are recorded in additional paid-in capital on the consolidated balance sheets at their fair value of $ 3.1 million at issuance. The warrants are immediately exercisable on issuance and expire seven years from the issuance date. The warrants can be exercised with cash or as a net exercise. In July 2022, MassMutual exercised their warrants to purchase 74,666 shares. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 12 - SHARE-BASED COMPENSATION In June 2021, the Company’s shareholders approved the ACRES Commercial Realty Corp. Third Amended and Restated Omnibus Equity Compensation Plan (the “Omnibus Plan”) and the ACRES Commercial Realty Corp. Manager Incentive Plan (the “Manager Plan” and together with the Omnibus Plan, the “Plans”). The Omnibus Plan was amended to (i) increase the number of shares authorized for issuance by an additional 1,100,000 shares of common stock, less any shares of common stock issued or subject to awards granted under the Manager Plan; and (ii) extend the expiration date of the Omnibus Plan from June 2029 to June 2031 . The maximum number of shares that may be subject to awards granted under the Plans, determined on a combined basis, is 1,700,817 shares of common stock. During the three months ended March 31, 2023 and 2022 , the Company recognized stock-based compensation expense of $ 894,000 and $ 744,000 , respectively. The following table summarizes the Company’s restricted common stock transactions: Manager Directors Total Number of Shares Weighted-Average Grant-Date Fair Value Unvested shares at January 1, 2023 524,999 58,334 583,333 $ 14.22 Issued 17,780 — 17,780 9.45 Vested ( 17,780 ) — ( 17,780 ) 9.45 Forfeited — — — — Unvested shares at March 31, 2023 524,999 58,334 583,333 $ 14.22 The unvested restricted common stock shares are expected to vest during the following years: Shares 2023 166,658 2024 166,658 2025 166,671 2026 83,346 Total 583,333 The shares issued during the three months ended March 31, 2023, pertaining to the fourth quarter 2022 incentive compensation shares, vested fully upon issuance pursuant to the Management Agreement. At March 31, 2023 , total unrecognized compensation costs relating to unvested restricted stock was $ 3.6 million based on the grant date fair value of shares granted. The cost is expected to be recognized over a weighted average period of 2.7 years. Under the Company’s Fourth Amended and Restated Management Agreement, as amended (“Management Agreement”), incentive compensation is paid quarterly. Up to 75 % of the incentive compensation is paid in cash and at least 25 % is paid in the form of an award of common stock, recorded in management fees on the consolidated statements of operations. During the three months ended March 31, 2023 , the Company incurred incentive compensation payable to the Manager of $ 129,000 , of which 50 % was payable at quarter end in cash and 50 %, representing 6,875 shares, was payable at quarter end in common stock. No incentive compensation was paid to the Manager for the three months ended March 31, 2022. The Omnibus Plan and the Manager Plan are administered by the compensation committee of the Company's Board (the “Compensation Committee”). In 2020, the Compensation Committee and the Board created parameters for equity awards, whereby they are no longer discretionary but are now based upon the Company’s achievement of performance parameters using book value of the common stock as the appropriate benchmark. See Note 16 for a description of awards made under the Manager Plan. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 13 - EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted losses per common share for the periods presented (dollars in thousands, except per share amounts): For the Three Months Ended March 31, 2023 2022 Net income $ 2,293 $ 2,084 Net income allocated to preferred shares ( 4,855 ) ( 4,855 ) Net loss allocable to non-controlling interest, net of taxes 146 — Net loss allocable to common shares $ ( 2,416 ) $ ( 2,771 ) Weighted average number of common shares outstanding: Weighted average number of common shares outstanding - basic 8,108,418 8,630,316 Weighted average number of warrants outstanding (1) 391,995 466,661 Total weighted average number of common shares outstanding - basic 8,500,413 9,096,977 Effect of dilutive securities - unvested restricted stock — — Weighted average number of common shares outstanding - diluted 8,500,413 9,096,977 Net loss per common share - basic $ ( 0.28 ) $ ( 0.30 ) Net loss per common share - diluted $ ( 0.28 ) $ ( 0.30 ) (1) See Note 11 for further details regarding the warrants. |
DISTRIBUTIONS
DISTRIBUTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Distributions [Abstract] | |
DISTRIBUTIONS | NOTE 14 - DISTRIBUTIONS In order to qualify as a REIT, the Company must currently distribute at least 90 % of its taxable income. In addition, the Company must distribute 100 % of its taxable income in order to not be subject to corporate federal income taxes on retained income. The Company anticipates it will distribute substantially all of its taxable income to its stockholders. Because taxable income differs from cash flow from operations due to non-cash revenues or expenses (such as provisions for loan and lease losses and depreciation) and tax loss carryforwards, in certain circumstances the Company may generate operating cash flow in excess of its distributions or, alternatively, may be required to borrow funds to make sufficient distribution payments. The Company’s 2023 distributions are, and will be, determined by the Company's Board, which will also consider the composition of any distributions declared, including the option of paying a portion in cash and the balance in additional shares of common stock. For the three months ended March 31, 2023 and 2022 , the Company did no t pay any common share distributions. The following tables present distributions declared (on a per share basis) for the three months ended March 31, 2023 and the year ended December 31, 2022 with respect to the Company's Series C Preferred Stock and Series D Preferred Stock: Series C Preferred Stock Series D Preferred Stock Date Paid Total Distribution Paid Distribution Per Share Date Paid Total Distribution Paid Distribution Per Share (in thousands) (in thousands) 2023 March 31 May 1 $ 2,587 $ 0.5390625 May 1 $ 2,268 $ 0.4921875 2022 December 31 January 30, 2023 $ 2,587 $ 0.5390625 January 30, 2023 $ 2,268 $ 0.4921875 September 30 October 31 2,587 0.5390625 October 31 2,268 0.4921875 June 30 August 1 2,588 0.5390625 August 1 2,268 0.4921875 March 31 May 2 2,588 0.5390625 May 2 2,268 0.4921875 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents the changes in net unrealized loss on derivatives, the sole component of accumulated other comprehensive loss, for the three months ended March 31, 2023 (in thousands): Accumulated Other Comprehensive Loss - Net Unrealized Loss on Derivatives Balance at January 1, 2023 $ ( 6,394 ) Amounts reclassified from accumulated other comprehensive loss (1) 393 Balance at March 31, 2023 $ ( 6,001 ) (1) Amounts reclassified from accumulated other comprehensive loss are reclassified to interest expense on the Company’s consolidated statements of operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 - RELATED PARTY TRANSACTIONS Relationship with ACRES Capital Corp. and certain of its Subsidiaries. The Manager is a subsidiary of ACRES Capital Corp., of which Andrew Fentress, the Company’s Chairman, serves as Managing Partner and Mark Fogel, the Company’s President, Chief Executive Officer and Director, serves as Chief Executive Officer and President. Mr. Fentress and Mr. Fogel are also shareholders and board members of ACRES Capital Corp. Effective on July 31, 2020, the Company has a Management Agreement with the Manager pursuant to which the Manager provides the day-to-day management of the Company’s operations and receives management fees. For the three months ended March 31, 2023 and 2022, the Manager earned base management fees of $ 1.6 million and $ 1.7 million, respectively. For the three months ended March 31, 2023 , the Manager earned incentive management fees of $ 129,000 , of which 50 % was payable in cash and 50 % was payable in common stock. No incentive compensation was earned for the three months ended March 31, 2022. At March 31, 2023 and December 31, 2022 , $ 550,000 and $ 558,000 , respectively, of base management fees were payable by the Company to the Manager. At March 31, 2023 and December 31, 2022 , $ 129,000 and $ 340,000 , respectively, of incentive management fees were payable by the Company to the Manager. The Manager and its affiliates provided the Company with a Chief Financial Officer and a sufficient number of additional accounting, finance, tax and investor relations professionals. The Company reimbursed the Manager’s expenses for (a) the wages, salaries and benefits of the Chief Financial Officer, and (b) a portion of the wages, salaries and benefits of accounting, finance, tax, legal and investor relations professionals, in proportion to such personnel’s percentage of time allocated to the Company’s operations. The Company reimbursed out-of-pocket expenses and certain other costs incurred by the Manager that related directly to the Company’s operations. For the three months ended March 31, 2023 , the Company reimbursed the Manager $ 902,000 for all such compensation and costs. For the three months ended March 31, 2022 , the Company reimbursed the Manager $ 2.0 million for all such compensation and costs. At March 31, 2023 and December 31, 2022 , the Company had payables to the Manager pursuant to the Management Agreement totaling $ 439,000 and $ 179,000 , respectively, related to such compensation and costs. The Company’s base management fee payable and expense reimbursements payable were recorded in management fee payable and accounts payable and other liabilities on the consolidated balance sheets, respectively. On July 31, 2020, ACRES RF, a direct, wholly owned subsidiary of the Company, provided a $ 12.0 million loan (the “ACRES Loan”) to ACRES Capital Corp. evidenced by the promissory note from ACRES Capital Corp. The ACRES Loan accrues interest at 3.00 % per annum payable monthly. The monthly amortization payment is $ 25,000 . The ACRES Loan matures in July 2026 , subject to two one-year extensions (at ACRES Capital Corp.’s option) subject to the payment of a 0.5 % extension fee to ACRES RF on the outstanding principal amount of the ACRES Loan. During the three months ended March 31, 2023 and 2022 , the Company recorded interest income of $ 84,000 and $ 87,000 , respectively, on the ACRES Loan in other income (expense) on the consolidated statements of operations. At March 31, 2023 and December 31, 2022 , the ACRES Loan had a principal balance of $ 11.2 million and $ 11.3 million, respectively, recorded in loan receivable - related party on the consolidated balance sheets. At March 31, 2023 and December 31, 2022 , the ACRES Loan had no accrued interest receivable. During the year ended December 31, 2022 , the Company originated one CRE whole loan with a par value of $ 38.6 million that was refinanced from a loan originated by affiliates of the Manager. The Company did no t originate any loans that were refinanced from loans originated by affiliates of the Manager during the three months ended March 31, 2023. During the year ended December 31, 2022 , the Company acquired 100 % equity in one property for $ 38.6 million, that previously served as collateral for a loan held by an affiliate of the Manager prior to the acquisition. At March 31, 2023 , the Company retained equity in two securitization entities that were structured for the Company by the Manager. Under the Management Agreement, the Manager was not separately compensated by the Company for executing these transactions and was not separately compensated for managing the securitization entities and their assets. During the year ended December 31, 2022 , the Company co-originated and entered into joint funding agreements with ACRES Loan Origination, LLC, an affiliate of ACRES Capital Corp. and the Manager, on four loan originations, with total initial fundings of $ 97.2 million. Relationship with ACRES Capital Servicing LLC. Under the MassMutual Loan Agreement, ACRES Capital Servicing LLC (“ACRES Capital Servicing”), an affiliate of ACRES Capital Corp. and the Manager, serves as the portfolio servicer. Additionally, ACRES Capital Servicing served as the special servicer of XAN 2020-RSO8 and XAN 2020-RSO9 and serves as special servicer of ACRES Commercial Realty 2021-FL1 Issuer, Ltd. (“ACR 2021-FL1”) and ACRES Commercial Realty 2021-FL2 Issuer, Ltd. (“ACR 2021-FL2”). During the three months ended March 31, 2023 , ACRES Capital Servicing received no portfolio servicing fees and earned $ 45,000 in special servicing fees, of which $ 35,000 was recorded as a reduction to interest income in the consolidated statement of operations. During the three months ended March 31, 2022 , ACRES Capital Servicing received no portfolio servicing fees or special servicing fees. Relationship with ACRES Collateral Manager, LLC. ACRES Collateral Manager, LLC, an affiliate of ACRES Capital Corp. and the Manager, serves as the collateral manager of ACR 2021-FL1 and ACR 2021-FL2, a role for which it waived its fee. Relationship with ACRES Development Management, LLC. ACRES Development Management, LLC (“DevCo”) is a wholly owned subsidiary of ACRES Capital Corp., the parent of the Manager. DevCo acts in various capacities as a co-developer or owner’s representative for direct equity investments within the Company’s portfolio. In November 2021, December 2021 and April 2022, the joint venture entities of the three CRE equity investments acquired through direct investment entered into development agreements with DevCo (the “Development Agreements”). Pursuant to the Development Agreements, DevCo agreed to manage the development of the projects associated with each equity investment in accordance with a development standard in exchange for fees equal to between 1.25 % and 1.5 % of all project costs. During the three months ended March 31, 2023 , $ 54,000 in fees were incurred and paid to DevCo for services rendered under the Development Agreements. No fees were incurred or paid to DevCo for services rendered under the Development Agreements during the three months ended March 31, 2022. Relationship with ACRES Share Holdings, LLC. During the three months ended March 31, 2023 , the Company issued 17,780 shares to ACRES Share Holdings, LLC in connection with the fourth quarter 2022 incentive compensation. The shares vested fully upon issuance pursuant to the Management Agreement. In June 2021, the Company’s Manager Plan was approved by its shareholders, which authorized up to 1,100,000 shares of common stock for issuance to the Manager (less shares of common stock issued or subject to awards under the Omnibus Plan). There were no shares issued under this plan for the three months ended March 31, 2023. During the year ended December 31, 2022 , the Company issued 299,999 restricted shares to ACRES Share Holdings, LLC under the Manager Plan that will vest 25 % each year on the anniversary of the issuance date over four years . See Note 12 for additional details. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 17 - FAIR VALUE OF FINANCIAL INSTRUMENTS The Company had no financial instruments carried at fair value on a recurring basis at March 31, 2023 and December 31, 2022. The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of the Company’s short-term financial instruments such as cash and cash equivalents, restricted cash, accrued interest receivable, principal paydowns receivable, accrued interest payable and distributions payable approximate their carrying values on the consolidated balance sheets. The fair values of the Company’s assets and liabilities are estimated as follows: CRE whole loans. The fair values of the Company’s loans held for investment are measured by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Par values of loans with variable interest rates are expected to approximate fair value unless evidence of credit deterioration exists, in which case the fair value approximates the par value less the loan’s allowance estimated through individual evaluation. Fair values of loans with fixed rates are calculated using the net present values of future cash flows, discounted at market rates. The Company’s floating-rate CRE loans had interest rates from 7.56 % to 13.31 % and 7.03 % to 12.67 % at March 31, 2023 and December 31, 2022, respectively. CRE mezzanine loan . Historically, this was measured by discounting the expected remaining cash flows using the current interest rates at which similar instruments would be originated for the same remaining maturity. The Company’s mezzanine loan was discounted at a rate of 10.00 %. The Company's mezzanine loan had no carrying or fair value at March 31, 2023 or December 31, 2022. Loan receivable- related party. This is estimated using a discounted cash flow model. Senior notes in CRE securitizations. These are estimated using a discounted cash flow model with implied yields based on trades for similar securities. Senior secured financing facility, warehouse financing facilities, mortgage payable and construction loan. These are variable-rate debt instruments indexed to either LIBOR or Term SOFR that reset periodically and as a result, their carrying value approximates their fair value, excluding deferred debt issuance costs. 5.75% Senior Unsecured Notes and Junior subordinated notes. These are estimated by using a discounted cash flow model. The fair values of the Company’s remaining financial and non-financial assets that are not reported at fair value on the consolidated balance sheets are reported in the following table (in thousands): Fair Value Measurements Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets of Liabilities Significant Other Observable Inputs Significant Unobservable Inputs At March 31, 2023: Assets: CRE whole loans $ 1,970,891 $ 2,001,105 $ — $ — $ 2,001,105 Loan receivable - related party 11,200 8,385 — — 8,385 Liabilities: Senior notes in CRE securitizations 1,234,355 1,178,414 — — 1,178,414 Senior secured financing facility 49,855 53,336 — — 53,336 Warehouse financing facilities 311,276 313,493 — — 313,493 Mortgage payable 18,296 18,710 — — 18,710 Construction loan (1) ( 2,225 ) — — — — 5.75 % Senior Unsecured Notes 147,662 132,090 — — 132,090 Junior subordinated notes 51,548 33,663 — — 33,663 At December 31, 2022: Assets: CRE whole loans $ 2,038,787 $ 2,065,504 $ — $ — $ 2,065,504 Loan receivable - related party 11,275 9,672 — — 9,672 Liabilities: Senior notes in CRE securitizations 1,233,556 1,179,313 — — 1,179,313 Senior secured financing facility 87,890 91,549 — — 91,549 Warehouse financing facilities 328,288 330,848 — — 330,848 Mortgage payable 18,244 18,710 — — 18,710 5.75 % Senior Unsecured Notes 147,507 138,435 — — 138,435 Junior subordinated notes 51,548 35,821 — — 35,821 (1) Deferred debt issuance costs related to the acquisition of a construction loan that has not been drawn on and has no fair value. |
MARKET RISK AND DERIVATIVE INST
MARKET RISK AND DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
MARKET RISK AND DERIVATIVE INSTRUMENTS | NOTE 18 - MARKET RISK AND DERIVATIVE INSTRUMENTS The Company is affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company’s financial performance and are referred to as “market risks.” When deemed appropriate, the Company used derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risks managed by the Company through the use of derivative instruments were interest rate risk and market price risk. The Company also historically managed its interest rate risk with interest rate swaps. Interest rate swaps are contracts between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices. The Company seeks to manage the extent to which net income changes as a function of changes in interest rates by matching adjustable-rate assets with variable-rate borrowings. The Company classified its interest rate swap contracts as cash flow hedges, which are hedges that eliminate the risk of changes in the cash flows of a financial asset or liability. The Company terminated all of its interest rate swap positions associated with its financed CMBS portfolio in April 2020. At termination, the Company realized a loss of $ 11.8 million. At March 31, 2023 and December 31, 2022, the Company had losses of $ 6.2 million and $ 6.6 million, respectively, recorded in accumulated other comprehensive loss, which will be amortized into earnings over the remaining life of the debt. During the three months ended March 31, 2023, the Company recorded amortization expense of $ 416,000 , reported in interest expense on the consolidated statements of operations. During the three months ended March 31, 2022 , the Company recorded amortization expense of $ 479,000 , reported in interest expense on the consolidated statements of operations. At March 31, 2023 and December 31, 2022, the Company had an unrealized gain of $ 233,000 and $ 256,000 , respectively, attributable to two terminated interest rate swaps in accumulated other comprehensive loss on the consolidated balance sheets, to be accreted into earnings over the remaining life of the debt. For each of the three months ended March 31, 2023 and 2022, the Company recorded accretion income, reported in interest expense on the consolidated statements of operations, of $ 23,000 to accrete the accumulated other comprehensive income on the terminated swap agreements. The Company’s prior origination of fixed-rate CRE whole loans exposed it to market pricing risk in connection with the fluctuations of market interest rates. As market interest rates increase or decrease, the fair value of the fixed-rate CRE whole loans will decrease or increase accordingly. In order to mitigate this market price risk, the Company entered into interest rate swap contracts in which it pays a fixed rate of interest in exchange for a variable rate of interest, usually three-month LIBOR. Unrealized gains and losses on the value of these swap contracts were recorded in other income (expense) on the consolidated statements of operations. In December 2020, these interest rate swap contracts were terminated. The following table presents the effect of the derivative instruments on the consolidated statements of operations for the three months ended March 31, 2023 and 2022 (in thousands): Realized and Unrealized Gain (Loss) (1) Consolidated Statements of Operations Location Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Interest rate swap contracts, hedging Interest expense $ ( 393 ) $ ( 456 ) (1) Negative values indicate a decrease to the associated consolidated statement of operations line items. |
OFFSETTING OF FINANCIAL LIABILI
OFFSETTING OF FINANCIAL LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
Offsetting [Abstract] | |
OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES | NOTE 19 - OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES The following table presents a summary of the Company’s offsetting of financial liabilities and derivative liabilities (in thousands, except amounts in footnotes): (i) (ii) (iii) = (i) - (ii) (iv) of Recognized Liabilities Consolidated Balance Sheets Consolidated Balance Sheets Financial Instruments (1) Cash Collateral Pledged (v) = (iii) - (iv) At March 31, 2023: Term warehouse financing facilities (2) $ 311,276 $ — $ 311,276 $ 311,276 $ — $ — At December 31, 2022: Term warehouse financing facilities (2) $ 328,288 $ — $ 328,288 $ 328,288 $ — $ — (1) Amounts represent financial instruments pledged that are available to be offset against liability balances associated with term warehouse financing facilities, repurchase agreements and derivatives. (2) The combined fair values of loans pledged against the Company’s various term warehouse financing facilities and repurchase agreements was $ 434.7 million and $ 453.6 million at March 31, 2023 and December 31, 2022 , respectively. All balances associated with warehouse financing facilities are presented on a gross basis on the Company’s consolidated balance sheets. Certain of the Company’s warehouse financing facilities are governed by underlying agreements that generally provide for a right of offset in the event of default or in the event of a bankruptcy of either party to the transaction. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 - COMMITMENTS AND CONTINGENCIES The Company may become involved in litigation on various matters due to the nature of the Company’s business activities. The resolution of these matters may result in adverse judgments, fines, penalties, injunctions and other relief against the Company as well as monetary payments or other agreements and obligations. In addition, the Company may enter into settlements on certain matters in order to avoid the additional costs of engaging in litigation. Except as discussed below, the Company is unaware of any contingencies arising from such litigation that would require accrual or disclosure in the consolidated financial statements at March 31, 2023. Primary Capital Mortgage, LLC (“PCM”) is subject to potential litigation related to claims for repurchases or indemnifications on loans that PCM has sold to third parties. At both March 31, 2023 and December 31, 2022 , no such litigation demand was outstanding. Reserves for such potential litigation demands are included in the reserve for mortgage repurchases and indemnifications that totaled $ 1.2 million at both March 31, 2023 and December 31, 2022, respectively. The reserves for mortgage repurchases and indemnifications are included in liabilities held for sale on the consolidated balance sheets. The Company did no t have any general litigation reserve at March 31, 2023 or December 31, 2022. Other Contingencies PCM is subject to additional claims for repurchases or indemnifications on loans that PCM has sold to investors. At March 31, 2023 and December 31, 2022 , outstanding demands for indemnification, repurchase or make whole payments totaled $ 3.3 million. The Company’s estimated exposure for such outstanding claims, as well as unasserted claims, is included in its reserve for mortgage repurchases and indemnifications. Other Guarantees In January 2023, Chapel Drive East, LLC, a wholly owned subsidiary of the FSU Student Venture, entered into a loan agreement (the "Construction Loan Agreement") with Oceanview Life and Annuity Company ("Oceanview") to finance the construction of a student housing complex (the "Construction Loan"). In connection with the Company's investment in the student housing complex, ACRES RF entered into guarantees related to the Construction Loan. Pursuant to the guarantees, Jason Pollack, Frank Dellaglio and ACRES RF (collectively, the "Guarantors"), for the benefit of Oceanview, provided limited "bad boy" guaranties to Oceanview pursuant to the Construction Loan Agreement until the earlier of the payment in full of the indebtedness or the date of a sale of the property pursuant to a foreclosure of the mortgage or deed or other transfer in lieu of foreclosure is accepted by Oceanview. The Guarantors also entered into a Completion Guaranty Agreement for the benefit of Oceanview to guaranty the timely completion of the project in accordance with the Construction Loan Agreement, as well as a Carry Guaranty Agreement, for the benefit of Oceanview to guaranty and unconditional payment by Chapel Drive East, LLC of all customary or necessary costs and expenses incurred in connection with the operation, maintenance and management of the property and an Environmental Indemnity Agreement jointly and severally in favor of Oceanview whereby the Guarantors serving as Indemnitors provided environmental representations and warranties, covenants and indemnifications (collectively the "Guaranties"). The Guaranties include certain financial covenants required of ACRES RF, including required net worth and liquidity requirements. Unfunded Commitments Unfunded commitments on the Company’s originated CRE loans generally fall into two categories: (1) pre-approved capital improvement projects and (2) new or additional construction costs subject, in each case, to the borrower meeting specified criteria. Upon completion of the improvements or construction, the Company would receive additional interest income on the advanced amount. Whole loans had $ 143.6 million and $ 158.2 million in unfunded loan commitments at March 31, 2023 and December 31, 2022, respectively. Additionally, the Company has commitments related to its construction of a student housing complex. The Company committed to a total funding of $ 24.3 million, of which $ 8.5 million w as unfunded at March 31, 2023. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 - SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing of this report and determined that there have not been any events, other than those described in Note 6 and Note 12, that have occurred that would require adjustments to or disclosures in the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). The consolidated financial statements include the accounts of the Company, majority-owned or controlled subsidiaries and VIEs for which the Company is considered the primary beneficiary. All inter-company transactions and balances have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation All adjustments necessary to fairly present the Company’s financial position, results of operations and cash flows have been made. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and within the period of financial results. Actual results could differ from those estimates. Estimates affecting the accompanying consolidated financial statements include, but are not limited to, the net realizable and fair values of the Company’s investments and derivatives, the estimated useful lives used to calculate depreciation, the expected lives over which to amortize premiums and accrete discounts, reversals of or provisions for expected credit losses and the disclosure of contingent liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities of three months or less at the time of purchase. At March 31, 2023 and December 31, 2022 , $ 84.1 million and $ 63.3 million, respectively, of the reported cash balances exceeded the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation deposit insurance limits of $250,000 per respective depository or brokerage institution. However, all of the Company’s cash deposits are held at multiple, established financial institutions, in multiple accounts associated with its parent and respective consolidated subsidiaries, to minimize credit risk exposure. We have not experienced, and do not expect, any losses on our cash and cash equivalents. Restricted cash includes required account balance minimums primarily for the Company’s CRE debt securitizations as well as cash held in the syndicated corporate loan collateralized debt obligations (“CDOs”). The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheets to the total amount shown on the consolidated statements of cash flows (in thousands): March 31, 2023 2022 Cash and cash equivalents $ 87,314 $ 79,561 Restricted cash 33,940 5,734 Total cash, cash equivalents and restricted cash shown on the Company’s consolidated statements of cash flows $ 121,254 $ 85,295 |
Investment In Real Estate | Investment in Real Estate The Company depreciates investments in real estate and amortizes related intangible assets over the estimated useful lives of the assets as follows: Category Term Building 35 to 40 years Building improvements 8 to 35 years Site improvements 10 years Tenant improvements Shorter of lease term or expected useful life Furniture, fixtures and equipment 3 to 12 years Right of use assets 7 to 94 years Intangible assets 90 days to 18 years Lease liabilities 7 to 94 years |
Income Taxes | Income Taxes The Company recorded a full valuation allowance against its net deferred tax assets (tax effected expense of $ 20.8 million) at March 31, 2023 , as the Company believes it is more likely than not that the deferred tax assets will not be realized. This assessment was based on the Company’s cumulative historical losses and uncertainties as to the amount of taxable income that would be generated in future years by the Company’s taxable REIT subsidiaries. |
Earnings Per Share | Earnings per Share The Company presents both basic and diluted earnings per share (“EPS”). Basic EPS excludes dilution and is computed by dividing net income (loss) allocable to common shareholders by the weighted average number of shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount. |
Reference Rate Reform | Reference Rate Reform Historically, the Company has used LIBOR as the benchmark interest rate for its floating-rate whole loans and the Company has been exposed to LIBOR through its floating-rate borrowings. Many of its floating-rate whole loans, CRE securitizations and term warehouse financing facilities included one-month LIBOR as the original contractual benchmark interest rate. The Company's unsecured junior subordinated debentures use three-month LIBOR as the contractual benchmark rate. In March 2021, the United Kingdom’s, or U.K.’s, Financial Conduct Authority (“FCA”) announced that it would cease publication of the one-week and the two-month USD LIBOR immediately after December 31, 2021, and cease publication of the remaining tenors immediately after June 30, 2023. In July 2021, the U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee composed of large U.S. financial institutions, identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative rate for LIBOR. All variable rate loans originated by the Company beginning January 1, 2022 have been benchmarked to SOFR. Additionally, all of its floating-rate whole loans contain provisions that provide for the transition of the contractual benchmark rate to an alternative rate. At March 31, 2023 , the Company's loan portfolio had a carrying value of $ 2.0 billion of floating rate loans, all of which have interest rates tied to SOFR. In September 2021 and January 2022, the term warehouse financing facilities with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) and Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”), respectively, were amended to allow for the transition to alternative rates, including rates tied to SOFR, subject to benchmark transition events. Additionally, during the year ended December 31, 2022, the Company entered into a loan agreement to finance the acquisition of a student housing complex, which uses SOFR as its benchmark interest rate. At March 31, 2023 , the Company had $ 1.7 billion of outstanding floating rate borrowings, 78.0 % or $ 1.3 billion of which have interest rates tied to LIBOR and 22.0 % or $ 366.1 million of which have interest rates tied to SOFR. The Company expects to complete the process of converting its LIBOR-based borrowings to an applicable benchmark interest rate during 2023. |
Recent Accounting Standards | Recent Accounting Standards Accounting Standards Adopted in 2023 In March 2022, the Financial Accounting Standards Board ("FASB") issued an amendment eliminating certain previously issued accounting guidance for troubled-debt restructurings (“TDRs”) and enhancing disclosure requirements surrounding refinancings, restructurings, and write-offs. Current GAAP provides an exception to the general recognition and measurement guidance for loan restructurings if they meet specific criteria to be considered TDRs. If a modification is a TDR, incremental expected losses are recorded in the allowance for credit losses upon modification and specific disclosures are required. The new amendment eliminates the TDR recognition and measurement guidance and requires the reporting entity to evaluate whether the modification represents a new loan or a continuation of an existing loan, consistent with accounting for other loan modifications. The amendment also requires public business entities to disclose current-period gross write-offs by year of origination for certain financing receivables and net investments in leases. The Company adopted this guidance during the three months ended March 31, 2023 and the adoption did no t have a material impact on the Company's consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheets to the total amount shown on the consolidated statements of cash flows (in thousands): March 31, 2023 2022 Cash and cash equivalents $ 87,314 $ 79,561 Restricted cash 33,940 5,734 Total cash, cash equivalents and restricted cash shown on the Company’s consolidated statements of cash flows $ 121,254 $ 85,295 |
Schedule of Investments in Real Estate and Amortizes Intangible Assets Over The Estimated Useful Lives of Assets | The Company depreciates investments in real estate and amortizes related intangible assets over the estimated useful lives of the assets as follows: Category Term Building 35 to 40 years Building improvements 8 to 35 years Site improvements 10 years Tenant improvements Shorter of lease term or expected useful life Furniture, fixtures and equipment 3 to 12 years Right of use assets 7 to 94 years Intangible assets 90 days to 18 years Lease liabilities 7 to 94 years |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
VIE, Primary Beneficiary | |
Schedule of variable interest entities | The following table shows the classification and carrying values of assets and liabilities of the Company’s Consolidated VIEs at March 31, 2023 (in thousands): CRE Securitizations Other Total ASSETS Restricted cash $ 33,125 $ 290 $ 33,415 Accrued interest receivable 8,837 — 8,837 CRE loans, pledged as collateral (1) 1,462,308 — 1,462,308 Other assets 31 56 87 Total assets (2) $ 1,504,301 $ 346 $ 1,504,647 LIABILITIES Accounts payable and other liabilities $ 165 $ — $ 165 Accrued interest payable 3,062 — 3,062 Borrowings 1,234,355 — 1,234,355 Total liabilities $ 1,237,582 $ — $ 1,237,582 (1) Excludes allowance for credit losses. (2) Assets of each of the Consolidated VIEs may only be used to settle the obligations of each respective VIE. |
VIE, Not Primary Beneficiary | |
Schedule of variable interest entities | The following table shows the classification, carrying value and maximum exposure to loss with respect to the Company’s unconsolidated VIEs at March 31, 2023 (in thousands): Unsecured Junior Subordinated Debentures Maximum Exposure to Loss ASSETS Accrued interest receivable $ 11 $ — Investments in unconsolidated entities 1,548 $ 1,548 Total assets 1,559 LIABILITIES Accrued interest payable 382 N/A Borrowings 51,548 N/A Total liabilities 51,930 Net (liability) asset $ ( 50,371 ) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of other significant noncash transactions | The following table summarizes the Company’s supplemental disclosure of cash flow information (in thousands): For the Three Months Ended March 31, 2023 2022 Supplemental cash flows: Interest expense paid in cash $ 32,028 $ 14,894 Income taxes paid in cash 101 180 Non-cash financing activities include the following: Distributions on preferred stock accrued but not paid $ 3,262 $ 3,262 |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Loans Held For Investment [Abstract] | |
Summary of loans held for Investments | The following is a summary of the Company’s CRE loans held for investment (dollars in thousands, except amounts in footnotes): Description Quantity Principal Unamortized (Discount) Premium, net (1) Amortized Cost Allowance for Credit Losses Carrying Value Contractual Interest Rates (2) Maturity Dates (3)(4) At March 31, 2023: Whole loans (5)(6) 78 $ 2,001,105 $ ( 11,015 ) $ 1,990,090 $ ( 19,199 ) $ 1,970,891 1M BR plus 2.86 % to 1M BR plus 8.61 % April 2023 to July 2026 Mezzanine loan (5) 1 4,700 — 4,700 ( 4,700 ) — 10.00 % June 2028 Total $ 2,005,805 $ ( 11,015 ) $ 1,994,790 $ ( 23,899 ) $ 1,970,891 At December 31, 2022: Whole loans (5)(6) 81 $ 2,065,504 $ ( 12,614 ) $ 2,052,890 $ ( 14,103 ) $ 2,038,787 1M BR plus 2.85 % to 1M BR plus 8.50 % January 2023 to July 2026 Mezzanine loan (5) 1 4,700 — 4,700 ( 4,700 ) — 10.00 % June 2028 Total $ 2,070,204 $ ( 12,614 ) $ 2,057,590 $ ( 18,803 ) $ 2,038,787 (1) Amounts include unamortized loan origination fees of $ 10.7 million and $ 12.3 million and deferred amendment fees of $ 267,000 and $ 308,000 at March 31, 2023 and December 31, 2022, respectively. (2) Benchmark rates ("BR") comprise one-month LIBOR or one-month Term SOFR. At March 31, 2023, all of the Company's whole loans used one-month SOFR. Weighted-average one-month benchmark rates were 4.74 % and 4.21 % at March 31, 2023 and December 31, 2022, respectively. Additionally, weighted-average benchmark rate floors were 0.66 % and 0.68 % at March 31, 2023 and December 31, 2022, respectively. (3) Maturity dates exclude contractual extension options, subject to the satisfaction of certain terms that may be available to the borrowers. (4) Maturity dates exclude three whole loans, with amortized costs of $ 51.0 million and $ 51.6 million, in maturity default at March 31, 2023 and December 31, 2022, respectively. (5) Substantially all loans are pledged as collateral under various borrowings at March 31, 2023 and December 31, 2022. (6) CRE whole loans had $ 143.6 million and $ 158.2 million in unfunded loan commitments at March 31, 2023 and December 31, 2022 , respectively. These unfunded loan commitments are advanced as the borrowers formally request additional funding and meet certain benchmarks, as permitted under the loan agreement, and any necessary approvals have been obtained. |
Summary of Contractual Maturities of Commercial Real Estate Loans at Amortized Cost | The following is a summary of the contractual maturities of the Company’s CRE loans held for investment, at amortized cost (in thousands, except amounts in the footnotes): Description 2023 2024 2025 and Thereafter Total At March 31, 2023: Whole loans (1) $ 141,589 $ 924,605 $ 872,935 $ 1,939,129 Mezzanine loan — — 4,700 4,700 Total CRE loans (2) $ 141,589 $ 924,605 $ 877,635 $ 1,943,829 Description 2023 2024 2025 and Thereafter Total At December 31, 2022: Whole loans (1) $ 268,120 $ 882,175 $ 851,031 $ 2,001,326 Mezzanine loan — — 4,700 4,700 Total CRE loans (2) $ 268,120 $ 882,175 $ 855,731 $ 2,006,026 (1) Maturity dates exclude three whole loans, with amortized costs of $ 51.0 million and $ 51.6 million, in maturity default at March 31, 2023 and December 31, 2022, respectively. (2) At March 31, 2023 , the amortized costs of the floating-rate CRE whole loans, summarized by contractual maturity assuming full exercise of the extension options, were $ 58.0 million, $ 68.5 million and $ 1.8 billion in 2023, 2024 and 2025 and thereafter, respectively. At December 31, 2022 , the amortized costs of the floating-rate CRE whole loans, summarized by contractual maturity assuming full exercise of the extension options, were $ 113.8 million, $ 68.6 million and $ 1.8 billion in 2023, 2024 and 2025 and thereafter, respectively. |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Activity in Allowance for Credit Losses | The following table shows the activity in the allowance for credit losses for the three months ended March 31, 2023 and the year ended December 31, 2022 (in thousands): Three Months Ended March 31, 2023 Year Ended December 31, 2022 Allowance for credit losses at beginning of period $ 18,803 $ 8,805 Provision for credit losses 5,096 12,295 Charge offs — ( 2,297 ) Allowance for credit losses at end of period $ 23,899 $ 18,803 |
Credit quality indicators for bank loans and commercial real estate loans | The criteria set forth below should be used as general guidelines. Therefore, not every loan will have all of the characteristics described in each category below. Risk Rating Risk Characteristics 1 Property performance has surpassed underwritten expectations. Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high-quality tenant mix. 2 Property performance is consistent with underwritten expectations and covenants and performance criteria are being met or exceeded. Occupancy is stabilized, near stabilized or is on track with underwriting. 3 Property performance lags behind underwritten expectations. Occupancy is not stabilized and the property has some tenancy rollover. 4 Property performance significantly lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers. Occupancy is not stabilized and the property has a large amount of tenancy rollover. 5 Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Expected sale proceeds would not be sufficient to pay off the loan at maturity. The property has a material vacancy rate and significant rollover of remaining tenants. An updated appraisal is required upon designation and updated on an as-needed basis. All CRE loans are evaluated for any credit deterioration by debt asset management and certain finance personnel on at least a quarterly basis. Mezzanine loans may experience greater credit risks due to their nature as subordinated investments. For the purpose of calculating the quarterly provision for credit losses under CECL, the Company pools CRE loans based on the underlying collateral property type and utilizes a probability of default and loss given default methodology for approximately one year after which it immediately reverts to a historical mean loss ratio. Credit risk profiles of CRE loans at amortized cost were as follows (in thousands, except amounts in the footnote): Rating 1 Rating 2 Rating 3 Rating 4 Rating 5 Total (1) At March 31, 2023: Whole loans, floating-rate $ — $ 1,532,268 362,903 $ 43,958 $ 50,961 $ 1,990,090 Mezzanine loan — — — — 4,700 4,700 Total $ — $ 1,532,268 $ 362,903 $ 43,958 $ 55,661 $ 1,994,790 At December 31, 2022: Whole loans, floating-rate $ — $ 1,635,376 $ 309,491 $ 85,226 $ 22,797 $ 2,052,890 Mezzanine loan — — — — 4,700 4,700 Total $ — $ 1,635,376 $ 309,491 $ 85,226 $ 27,497 $ 2,057,590 (1) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. Credit risk profiles of CRE loans by origination year at amortized cost were as follows (in thousands, except amounts in the footnotes): 2023 2022 2021 2020 2019 Prior Total (1) At March 31, 2023: Whole loans, floating-rate: (2) Rating 2 $ 14,759 $ 480,017 $ 944,121 $ 52,722 $ 26,949 $ 13,700 $ 1,532,268 Rating 3 — 52,619 203,273 34,387 27,887 44,737 362,903 Rating 4 — — 43,958 — — — 43,958 Rating 5 — — — — 42,936 8,025 50,961 Total whole loans, floating-rate 14,759 532,636 1,191,352 87,109 97,772 66,462 1,990,090 Mezzanine loan (rating 5) — — — — — 4,700 4,700 Total $ 14,759 $ 532,636 $ 1,191,352 $ 87,109 $ 97,772 $ 71,162 $ 1,994,790 Current Period Gross Write-Offs (3) $ — $ — $ — $ — $ — $ — $ — 2022 2021 2020 2019 2018 Prior Total (1) At December 31, 2022: Whole loans, floating-rate: (2) Rating 2 $ 526,606 $ 1,003,060 $ 64,944 $ 26,977 $ 13,789 $ — $ 1,635,376 Rating 3 — 192,490 44,657 27,881 44,463 — 309,491 Rating 4 — — — 20,742 64,484 — 85,226 Rating 5 — — — 22,797 — — 22,797 Total whole loans, floating-rate 526,606 1,195,550 109,601 98,397 122,736 — 2,052,890 Mezzanine loan (rating 5) — — — — 4,700 — 4,700 Total $ 526,606 $ 1,195,550 $ 109,601 $ 98,397 $ 127,436 $ — $ 2,057,590 (1) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. (2) Acquired CRE whole loans are grouped within each loan’s year of origination. (3) There were no charge-offs during the three months ended March 31, 2023. At both March 31, 2023 and December 31, 2022 , the Company had one additional mezzanine loan included in other assets held for sale that had no carrying value. |
Loan portfolios aging analysis | The following table presents the CRE loan portfolio aging analysis at the dates indicated for CRE loans at amortized cost (in thousands, except amounts in footnotes): 30-59 Days 60-89 Days Greater than 90 (1) Total Past Due Current (2) Total Loans Receivable (3) Total Loans > 90 Days and Accruing At March 31, 2023: Whole loans, floating-rate $ — $ — $ 50,961 $ 50,961 $ 1,939,129 $ 1,990,090 $ — Mezzanine loan (4) 4,700 — — 4,700 — 4,700 — Total $ 4,700 $ — $ 50,961 $ 55,661 $ 1,939,129 $ 1,994,790 $ — At December 31, 2022: Whole loans, floating-rate $ — $ — $ 28,767 $ 28,767 $ 2,024,123 $ 2,052,890 $ — Mezzanine loan (4) — — — — 4,700 4,700 — Total $ — $ — $ 28,767 $ 28,767 $ 2,028,823 $ 2,057,590 $ — (1) During the three months ended March 31, 2023 and 2022 , the Company recognized interest income of $ 1.1 million and $ 641,000 , respectively, on three CRE whole loans with a principal payment past due greater than 90 days at March 31, 2023. (2) Includes one CRE whole loan, with an amortized cost of $ 22.8 million, in maturity default at December 31, 2022. (3) The total amortized cost of CRE whole loans excluded accrued interest receivable of $ 12.5 million and $ 11.9 million at March 31, 2023 and December 31, 2022, respectively. (4) Fully reserved at both March 31, 2023 and December 31, 2022. |
INVESTMENTS IN REAL ESTATE AN_2
INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Abstract] | |
Schedule of Investments in Real Estate and Related Intangible Assets | The following table summarizes the book value of the Company’s investments in real estate and properties held for sale (in thousands, except amounts in the footnotes): March 31, 2023 December 31, 2022 Cost Basis Accumulated Depreciation & Amortization Carrying Value Cost Basis Accumulated Depreciation & Amortization Carrying Value Assets: Investments in real estate, equity: Investments in real estate (1) $ 133,522 $ ( 2,951 ) $ 130,571 $ 123,219 $ ( 2,251 ) $ 120,968 Right of use assets (2)(3) 19,664 ( 273 ) 19,391 19,664 ( 205 ) 19,459 Intangible assets (4) 11,474 ( 2,846 ) 8,628 11,474 ( 2,594 ) 8,880 Subtotal 164,660 ( 6,070 ) 158,590 154,357 ( 5,050 ) 149,307 Investments in real estate from lending activities: Properties held for sale (5) 40,377 — 40,377 53,769 — 53,769 Total 205,037 ( 6,070 ) 198,967 208,126 ( 5,050 ) 203,076 Liabilities: Investments in real estate, equity: Mortgage payable 18,089 207 18,296 18,089 155 18,244 Other liabilities 247 ( 192 ) 55 247 ( 183 ) 64 Lease liabilities (3)(6) 43,260 ( 226 ) 43,034 43,260 ( 393 ) 42,867 Subtotal (7) 61,596 ( 211 ) 61,385 61,596 ( 421 ) 61,175 Investments in real estate from lending activities: Liabilities held for sale 3,025 — 3,025 3,025 — 3,025 Total 64,621 ( 211 ) 64,410 64,621 ( 421 ) 64,200 Total net investments in real estate and properties held for sale (8) $ 140,416 $ 134,557 $ 143,505 $ 138,876 (1) Includes $ 38.4 million of land, which is not depreciable, at March 31, 2023 and December 31, 2022, respectively. (2) Primarily comprises a $ 19.0 million right of use asset, associated with an acquired ground lease of $ 42.6 million (see below) accounted for as an operating lease at March 31, 2023 and December 31, 2022. Amortization is booked to real estate expenses on the consolidated statements of operations. (3) Refer to Note 8 for additional information on the Company’s remaining operating leases. (4) Primarily comprises a franchise intangible of $ 5.1 million and $ 5.3 million, a management contract of $ 3.1 million, and a customer list of $ 357,000 and $ 427,000 at March 31, 2023 and December 31, 2022, respectively. (5) At December 31, 2022, properties held for sale included two properties originally acquired in November 2020 and July 2022. At March 31, 2023, only the property acquired in November 2020 was in property held for sale. (6) Primarily comprises a $ 42.6 million ground lease with a remaining term of 93 years. Lease expenses for the three months ended March 31, 2023 were $ 661,000 . (7) Excludes $ 2.2 million o f deferred debt issuance costs on construction loans that can be drawn upon subsequent to March 31, 2023 . (8) Excludes items of working capital, either acquired or assumed. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Summary of Operating Leases | The following table summarizes the Company’s operating leases (in thousands): March 31, 2023 December 31, 2022 Operating Leases: Right of use assets $ 761 $ 822 Lease liabilities $ ( 803 ) $ ( 828 ) Weighted average remaining lease term: 6.5 years 6.7 years Weighted average discount rate (1) : 8.70 % 8.71 % (1) The market discount rate is used, when readily determinable, in calculating the present value of lease payments for the operating lease liability. Otherwise, the incremental borrowing rate on the commencement date is used. |
Summary of Operating Lease Costs and Cash Payments | The following table summarizes the Company’s operating lease costs and cash payments for the periods presented (in thousands): Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Lease Cost: Operating lease cost $ 75 $ 24 Other Information: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 37 $ 23 |
Summary of Operating Leases Cash Flow Obligations on Undiscounted, Annual Basis | The following table summarizes the Company’s operating leases cash flow obligations on an undiscounted, annual basis (in thousands): Operating Leases 2023 $ 115 2024 155 2025 159 2026 163 2027 167 Thereafter 303 Subtotal 1,062 Less: impact of discount ( 259 ) Total $ 803 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Information with respect to borrowings | Certain information with respect to the Company’s borrowings is summarized in the following table (dollars in thousands, except amounts in the footnotes): Principal Outstanding Unamortized Issuance Costs and Discounts Outstanding Borrowings Weighted Average Borrowing Rate Weighted Average Remaining Maturity Value of Collateral At March 31, 2023: ACR 2021-FL1 Senior Notes $ 675,223 $ 3,430 $ 671,793 6.20 % 13.2 years 802,643 ACR 2021-FL2 Senior Notes 567,000 4,438 562,562 6.51 % 13.8 years 700,000 Senior secured financing facility 53,336 3,481 49,855 8.54 % 4.7 years 127,185 CRE - term warehouse financing facilities (1) 313,493 2,217 311,276 7.32 % 1.6 years 434,695 Mortgage payable 18,710 414 18,296 8.58 % 2.0 years 25,400 Construction loans — 2,225 ( 2,225 ) — — — 5.75 % Senior Unsecured Notes 150,000 2,338 147,662 5.75 % 3.4 years — Unsecured junior subordinated debentures 51,548 — 51,548 8.93 % 13.4 years — Total $ 1,829,310 $ 18,543 $ 1,810,767 6.62 % 10.3 years $ 2,089,923 Principal Outstanding Unamortized Issuance Costs and Discounts Outstanding Borrowings Weighted Average Borrowing Rate Weighted Average Remaining Maturity Value of Collateral At December 31, 2022: ACR 2021-FL1 Senior Notes $ 675,223 $ 3,826 $ 671,397 5.81 % 13.5 years 802,643 ACR 2021-FL2 Senior Notes 567,000 4,841 562,159 6.13 % 14.1 years 700,000 Senior secured financing facility 91,549 3,659 87,890 7.94 % 5.0 years 196,837 CRE - term warehouse financing facilities (1) 330,849 2,561 328,288 6.85 % 1.8 years 453,550 Mortgage payable 18,710 466 18,244 8.08 % 2.3 years 25,400 5.75 % Senior Unsecured Notes 150,000 2,493 147,507 5.75 % 3.6 years — Unsecured junior subordinated debentures 51,548 — 51,548 8.52 % 13.7 years — Total $ 1,884,879 $ 17,846 $ 1,867,033 6.29 % 10.3 years $ 2,178,430 (1) Principal outstanding includes accrued interest payable of $ 879,000 and $ 894,000 at March 31, 2023 and December 31, 2022 , respectively. |
Schedule of securitizations | The following table sets forth certain information with respect to the Company’s consolidated securitizations at March 31, 2023 (in thousands, except amount in footnotes): Closing Date Maturity Date Reinvestment Period End (1) Total Note Paydowns from Closing Date through March 31, 2023 ACR 2021-FL1 May 2021 June 2036 May 2023 $ — ACR 2021-FL2 December 2021 January 2037 December 2023 $ — (1) The reinvestment period is the period in which principal proceeds received may be used to acquire CRE loans for reinvestment into the securitization. |
Senior secured warehouse financing facilities and repurchase agreements | The following table sets forth certain information with respect to the Company’s financing arrangements (dollars in thousands, except amounts in footnotes): March 31, 2023 December 31, 2022 Outstanding Borrowings Value of Collateral Number of Positions as Collateral Weighted Average Interest Rate Outstanding Borrowings Value of Collateral Number of Positions as Collateral Weighted Average Interest Rate Senior Secured Financing Facility Massachusetts Mutual Life Insurance Company (1) $ 49,855 $ 127,185 6 8.54 % $ 87,890 $ 196,837 8 7.94 % CRE - Term Warehouse Financing Facilities (2) JPMorgan Chase Bank, N.A. (3) 178,723 246,740 10 7.25 % 186,783 255,095 11 6.74 % Morgan Stanley Mortgage Capital Holdings LLC (4) 132,553 187,955 9 7.41 % 141,505 198,455 10 7.00 % Mortgage Payable Readycap Commercial, LLC (5) 18,296 25,400 1 8.58 % 18,244 25,400 1 8.08 % Construction Loans Oceanview Life and Annuity Company (6) ( 2,225 ) N/A N/A —% — — — —% Total $ 377,202 $ 587,280 $ 434,422 $ 675,787 (1) Includes $ 3.5 million and $ 3.7 million of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (2) Outstanding borrowings include accrued interest payable. (3) Includes $ 993,000 and $ 1.1 million of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (4) Includes $ 1.2 million and $ 1.4 million of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (5) Includes $ 414,000 and $ 466,000 of deferred debt issuance costs at March 31, 2023 and December 31, 2022, respectively. (6) Includes $ 2.2 million of deferred debt issuance costs at March 31, 2023 . |
Schedule of amount at risk under credit facility | The following table shows information about the amount at risk under the Company's financing arrangements (dollars in thousands): Amount at Risk (1) Weighted Average Remaining Maturity Weighted Average Interest Rate At March 31, 2023: Senior Secured Financing Facility (1) Massachusetts Mutual Life Insurance Company $ 74,052 4.7 years 8.54 % CRE - Term Warehouse Financing Facilities (1) JPMorgan Chase Bank, N. A. $ 68,674 1.6 years 7.25 % Morgan Stanley Mortgage Capital Holdings LLC $ 55,478 1.6 years 7.41 % Mortgage Payable (2) Readycap Commercial, LLC $ 6,596 2.0 years 8.58 % (1) Equal to the total of the estimated fair value of securities or loans sold and accrued interest receivable, minus the total of the warehouse financing agreement liabilities and accrued interest payable. (2) Equal to the total of the estimated fair value of real estate property investment financed, minus the total of the mortgage payable agreement liability and accrued interest payable. |
Schedule of contractual obligations and commitments | Contractual maturity dates of the Company’s borrowings’ principal outstanding by category and year are presented in the table below (in thousands): Total 2024 2025 2026 2027 2028 and Thereafter At March 31, 2023: CRE securitizations $ 1,242,223 $ — $ — $ — $ — $ 1,242,223 Senior Secured Financing Facility 53,336 — — — 53,336 — CRE - term warehouse financing facilities (1) 313,493 313,493 — — — — Mortgage payable 18,710 — 18,710 — — — 5.75% Senior Unsecured Notes 150,000 — — 150,000 — — Unsecured junior subordinated debentures 51,548 — — — — 51,548 Total $ 1,829,310 $ 313,493 $ 18,710 $ 150,000 $ 53,336 $ 1,293,771 (1) Includes accrued interest payable in the balances of principal outstanding. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of restricted common stock transactions | The following table summarizes the Company’s restricted common stock transactions: Manager Directors Total Number of Shares Weighted-Average Grant-Date Fair Value Unvested shares at January 1, 2023 524,999 58,334 583,333 $ 14.22 Issued 17,780 — 17,780 9.45 Vested ( 17,780 ) — ( 17,780 ) 9.45 Forfeited — — — — Unvested shares at March 31, 2023 524,999 58,334 583,333 $ 14.22 |
Summary of unvested restricted common stock expected to vest | The unvested restricted common stock shares are expected to vest during the following years: Shares 2023 166,658 2024 166,658 2025 166,671 2026 83,346 Total 583,333 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted losses per common share | The following table presents a reconciliation of basic and diluted losses per common share for the periods presented (dollars in thousands, except per share amounts): For the Three Months Ended March 31, 2023 2022 Net income $ 2,293 $ 2,084 Net income allocated to preferred shares ( 4,855 ) ( 4,855 ) Net loss allocable to non-controlling interest, net of taxes 146 — Net loss allocable to common shares $ ( 2,416 ) $ ( 2,771 ) Weighted average number of common shares outstanding: Weighted average number of common shares outstanding - basic 8,108,418 8,630,316 Weighted average number of warrants outstanding (1) 391,995 466,661 Total weighted average number of common shares outstanding - basic 8,500,413 9,096,977 Effect of dilutive securities - unvested restricted stock — — Weighted average number of common shares outstanding - diluted 8,500,413 9,096,977 Net loss per common share - basic $ ( 0.28 ) $ ( 0.30 ) Net loss per common share - diluted $ ( 0.28 ) $ ( 0.30 ) (1) See Note 11 for further details regarding the warrants. |
DISTRIBUTIONS (Tables)
DISTRIBUTIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Distributions [Abstract] | |
Distributions Declared | The following tables present distributions declared (on a per share basis) for the three months ended March 31, 2023 and the year ended December 31, 2022 with respect to the Company's Series C Preferred Stock and Series D Preferred Stock: Series C Preferred Stock Series D Preferred Stock Date Paid Total Distribution Paid Distribution Per Share Date Paid Total Distribution Paid Distribution Per Share (in thousands) (in thousands) 2023 March 31 May 1 $ 2,587 $ 0.5390625 May 1 $ 2,268 $ 0.4921875 2022 December 31 January 30, 2023 $ 2,587 $ 0.5390625 January 30, 2023 $ 2,268 $ 0.4921875 September 30 October 31 2,587 0.5390625 October 31 2,268 0.4921875 June 30 August 1 2,588 0.5390625 August 1 2,268 0.4921875 March 31 May 2 2,588 0.5390625 May 2 2,268 0.4921875 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive loss | The following table presents the changes in net unrealized loss on derivatives, the sole component of accumulated other comprehensive loss, for the three months ended March 31, 2023 (in thousands): Accumulated Other Comprehensive Loss - Net Unrealized Loss on Derivatives Balance at January 1, 2023 $ ( 6,394 ) Amounts reclassified from accumulated other comprehensive loss (1) 393 Balance at March 31, 2023 $ ( 6,001 ) (1) Amounts reclassified from accumulated other comprehensive loss are reclassified to interest expense on the Company’s consolidated statements of operations. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value financial and non-financial assets not reported at fair value | The fair values of the Company’s remaining financial and non-financial assets that are not reported at fair value on the consolidated balance sheets are reported in the following table (in thousands): Fair Value Measurements Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets of Liabilities Significant Other Observable Inputs Significant Unobservable Inputs At March 31, 2023: Assets: CRE whole loans $ 1,970,891 $ 2,001,105 $ — $ — $ 2,001,105 Loan receivable - related party 11,200 8,385 — — 8,385 Liabilities: Senior notes in CRE securitizations 1,234,355 1,178,414 — — 1,178,414 Senior secured financing facility 49,855 53,336 — — 53,336 Warehouse financing facilities 311,276 313,493 — — 313,493 Mortgage payable 18,296 18,710 — — 18,710 Construction loan (1) ( 2,225 ) — — — — 5.75 % Senior Unsecured Notes 147,662 132,090 — — 132,090 Junior subordinated notes 51,548 33,663 — — 33,663 At December 31, 2022: Assets: CRE whole loans $ 2,038,787 $ 2,065,504 $ — $ — $ 2,065,504 Loan receivable - related party 11,275 9,672 — — 9,672 Liabilities: Senior notes in CRE securitizations 1,233,556 1,179,313 — — 1,179,313 Senior secured financing facility 87,890 91,549 — — 91,549 Warehouse financing facilities 328,288 330,848 — — 330,848 Mortgage payable 18,244 18,710 — — 18,710 5.75 % Senior Unsecured Notes 147,507 138,435 — — 138,435 Junior subordinated notes 51,548 35,821 — — 35,821 (1) Deferred debt issuance costs related to the acquisition of a construction loan that has not been drawn on and has no fair value. |
MARKET RISK AND DERIVATIVE IN_2
MARKET RISK AND DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
The effect of derivative instruments on the statement of income | The following table presents the effect of the derivative instruments on the consolidated statements of operations for the three months ended March 31, 2023 and 2022 (in thousands): Realized and Unrealized Gain (Loss) (1) Consolidated Statements of Operations Location Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Interest rate swap contracts, hedging Interest expense $ ( 393 ) $ ( 456 ) (1) Negative values indicate a decrease to the associated consolidated statement of operations line items. |
OFFSETTING OF FINANCIAL LIABI_2
OFFSETTING OF FINANCIAL LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Offsetting [Abstract] | |
Offsetting financial liabilities | The following table presents a summary of the Company’s offsetting of financial liabilities and derivative liabilities (in thousands, except amounts in footnotes): (i) (ii) (iii) = (i) - (ii) (iv) of Recognized Liabilities Consolidated Balance Sheets Consolidated Balance Sheets Financial Instruments (1) Cash Collateral Pledged (v) = (iii) - (iv) At March 31, 2023: Term warehouse financing facilities (2) $ 311,276 $ — $ 311,276 $ 311,276 $ — $ — At December 31, 2022: Term warehouse financing facilities (2) $ 328,288 $ — $ 328,288 $ 328,288 $ — $ — (1) Amounts represent financial instruments pledged that are available to be offset against liability balances associated with term warehouse financing facilities, repurchase agreements and derivatives. (2) The combined fair values of loans pledged against the Company’s various term warehouse financing facilities and repurchase agreements was $ 434.7 million and $ 453.6 million at March 31, 2023 and December 31, 2022 , respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Summary Of Significant Accounting Policies [Line Items] | ||
Cash balance in excess of federal deposit Insurance limit, amount | $ 84.1 | $ 63.3 |
Operating loss carryforwards, valuation allowance, tax expense impact | 20.8 | |
Floating rate loans at carring value | $ 2,000 | |
Accounting standards adopted | true | |
Accounting standards adopted date | Mar. 31, 2023 | |
Accounting standards adopted material effect | false | |
CRE - Term Warehouse Financing Facilities | JP Morgan Chase Bank, N.A. | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Floating Rate Borrowings value | $ 1,700 | |
London Interbank Offered Rate (LIBOR) | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Interest rate | 78% | |
London Interbank Offered Rate (LIBOR) | CRE - Term Warehouse Financing Facilities | JP Morgan Chase Bank, N.A. | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Floating Rate Borrowings value | $ 1,300 | |
Secured Overnight Financing Rate (SOFR) | CRE - Term Warehouse Financing Facilities | JP Morgan Chase Bank, N.A. | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Floating Rate Borrowings value | $ 366.1 | |
Interest borrowing rate | 22% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 87,314 | $ 66,232 | $ 79,561 | |
Restricted cash | 33,940 | 38,579 | 5,734 | |
Total cash, cash equivalents and restricted cash shown on the Company’s consolidated statements of cash flows | $ 121,254 | $ 104,810 | $ 85,295 | $ 283,931 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Investments in Real Estate and Amortizes Intangible Assets Over The Estimated Useful Lives of Assets (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Summary Of Significant Accounting Policies [Line Items] | |
Site improvements | 10 years |
Tenant improvements | Shorter of lease term or expected useful life |
Maximum | |
Summary Of Significant Accounting Policies [Line Items] | |
Building | 40 years |
Building improvements | 35 years |
Furniture, fixtures and equipment | 12 years |
Right of use assets | 94 years |
Intangible assets | 18 years |
Lease liabilities | 94 years |
Minimum | |
Summary Of Significant Accounting Policies [Line Items] | |
Building | 35 years |
Building improvements | 8 years |
Furniture, fixtures and equipment | 3 years |
Right of use assets | 7 years |
Intangible assets | 90 days |
Lease liabilities | 7 years |
VARIABLE INTEREST ENTITIES (Con
VARIABLE INTEREST ENTITIES (Consolidated VIEs) (the Company is the primary beneficiary) (Details) - VIE, Primary Beneficiary | 3 Months Ended | ||
Mar. 31, 2023 USD ($) Entity | Mar. 31, 2022 USD ($) | Dec. 31, 2022 Entity | |
Variable Interest Entity [Line Items] | |||
Number of consolidated VIEs | Entity | 5 | 5 | |
Financial support, amount | $ | $ 0 | $ 0 |
VARIABLE INTEREST ENTITIES (Cha
VARIABLE INTEREST ENTITIES (Charles Street-ACRES FSU Student Venture, LLC) (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||
Investments in unconsolidated entities | $ 1,548 | $ 1,548 | |
VIE, Not Primary Beneficiary | Charles Street-ACRES FSU Student Venture, LLC | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage in VIE | 72.10% | ||
Investments in unconsolidated entities | $ 13,000 |
VARIABLE INTEREST ENTITIES (Sch
VARIABLE INTEREST ENTITIES (Schedule of Carrying Value of Assets and Liabilities of Consolidated VIEs) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
ASSETS: | |||
Restricted cash | $ 33,940 | $ 38,579 | $ 5,734 |
Accrued interest receivable | 12,570 | 11,969 | |
CRE loans | 1,970,891 | 2,038,787 | |
Other assets | 4,314 | 4,364 | |
Total assets | 2,321,559 | 2,376,652 | |
LIABILITIES | |||
Accounts payable and other liabilities | 13,442 | 10,391 | |
Accrued interest payable | 4,762 | 6,921 | |
Borrowings | 1,810,767 | 1,867,033 | |
Total liabilities | 1,879,774 | 1,935,338 | |
VIE, Primary Beneficiary | |||
ASSETS: | |||
Restricted cash | 33,415 | 38,180 | |
Accrued interest receivable | 8,837 | 8,184 | |
Other assets | 87 | 119 | |
Total assets | 1,504,647 | 1,503,132 | |
LIABILITIES | |||
Accounts payable and other liabilities | 165 | 93 | |
Accrued interest payable | 3,062 | 3,083 | |
Borrowings | 1,234,355 | 1,233,556 | |
Total liabilities | 1,237,582 | 1,236,732 | |
Pledged as Collateral | VIE, Primary Beneficiary | |||
ASSETS: | |||
CRE loans | 1,462,308 | $ 1,456,649 | |
CRE Securitizations | VIE, Primary Beneficiary | |||
ASSETS: | |||
Restricted cash | 33,125 | ||
Accrued interest receivable | 8,837 | ||
Other assets | 31 | ||
Total assets | 1,504,301 | ||
LIABILITIES | |||
Accounts payable and other liabilities | 165 | ||
Accrued interest payable | 3,062 | ||
Borrowings | 1,234,355 | ||
Total liabilities | 1,237,582 | ||
CRE Securitizations | Pledged as Collateral | VIE, Primary Beneficiary | |||
ASSETS: | |||
CRE loans | 1,462,308 | ||
Other | VIE, Primary Beneficiary | |||
ASSETS: | |||
Restricted cash | 290 | ||
Accrued interest receivable | 0 | ||
Other assets | 56 | ||
Total assets | 346 | ||
LIABILITIES | |||
Accounts payable and other liabilities | 0 | ||
Accrued interest payable | 0 | ||
Borrowings | 0 | ||
Total liabilities | 0 | ||
Other | Pledged as Collateral | VIE, Primary Beneficiary | |||
ASSETS: | |||
CRE loans | $ 0 |
VARIABLE INTEREST ENTITIES (Unc
VARIABLE INTEREST ENTITIES (Unconsolidated VIEs) (the Company is not the primary beneficiary, but has a variable interest) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | ||
Investments in unconsolidated entities | $ 1,548,000 | $ 1,548,000 |
Borrowings | $ 1,810,767,000 | $ 1,867,033,000 |
VIE, Not Primary Beneficiary | Investment in RCT I and II | ||
Variable Interest Entity [Line Items] | ||
Ownership percentage in VIE | 100% | |
Investments in unconsolidated entities | $ 1,500,000 | |
VIE, Not Primary Beneficiary | Interest in RCT I | ||
Variable Interest Entity [Line Items] | ||
Investments in unconsolidated entities | $ 774,000 | |
Percentage of value of trusts owned | 3% | |
Borrowings | $ 25,800,000 | |
VIE, Not Primary Beneficiary | Interest in RCT II | ||
Variable Interest Entity [Line Items] | ||
Investments in unconsolidated entities | $ 774,000 | |
Percentage of value of trusts owned | 3% | |
Borrowings | $ 25,800,000 |
VARIABLE INTEREST ENTITIES (S_2
VARIABLE INTEREST ENTITIES (Schedule of Classification, Carrying Value, and Maximum Exposure to Loss of Unconsolidated VIEs) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
ASSETS: | ||
Total assets | $ 2,321,559 | $ 2,376,652 |
LIABILITIES | ||
Total liabilities | 1,879,774 | $ 1,935,338 |
VIE, Not Primary Beneficiary | Interest Receivable | ||
ASSETS: | ||
Maximum Exposure to Loss | 0 | |
VIE, Not Primary Beneficiary | Investments in Unconsolidated Entities | ||
ASSETS: | ||
Maximum Exposure to Loss | 1,548 | |
Unsecured Junior Subordinated Debentures | VIE, Not Primary Beneficiary | ||
ASSETS: | ||
Accrued interest receivable | 11 | |
Investments in unconsolidated entities | 1,548 | |
Total assets | 1,559 | |
LIABILITIES | ||
Accrued interest payable | 382 | |
Borrowings | 51,548 | |
Total liabilities | 51,930 | |
Net (liability) asset | $ (50,371) |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Supplemental cash flows: | ||
Interest expense paid in cash | $ 32,028 | $ 14,894 |
Income taxes paid in cash | 101 | 180 |
Preferred Stock | ||
Non-cash financing activities include the following: | ||
Distributions accrued but not paid | $ 3,262 | $ 3,262 |
LOANS (Summary of Loans) (Detai
LOANS (Summary of Loans) (Details) | Mar. 31, 2023 USD ($) Loan | Dec. 31, 2022 USD ($) Loan | Dec. 31, 2021 USD ($) |
Receivables With Imputed Interest [Line Items] | |||
Amortized Cost, Loans held for investment | $ 1,994,790,000 | $ 2,057,590,000 | |
Less: allowance for credit losses | (23,899,000) | (18,803,000) | $ (8,805,000) |
Commercial Real Estate Loans | |||
Receivables With Imputed Interest [Line Items] | |||
Principal, Loans held for investment | 2,005,805,000 | 2,070,204,000 | |
Unamortized (Discount) Premium, net | (11,015,000) | (12,614,000) | |
Amortized Cost, Loans held for investment | 1,994,790,000 | 2,057,590,000 | |
Less: allowance for credit losses | (23,899,000) | (18,803,000) | |
Carrying Value, Loans held for investment | 1,970,891,000 | 2,038,787,000 | |
Loan origination fees | 10,700,000 | 12,300,000 | |
Deferred amendment fees | 267,000 | 308,000 | |
Commercial Real Estate Loans | Whole Loans | |||
Receivables With Imputed Interest [Line Items] | |||
Principal, Loans held for investment | 2,001,105,000 | 2,065,504,000 | |
Unamortized (Discount) Premium, net | (11,015,000) | (12,614,000) | |
Amortized Cost, Loans held for investment | 1,990,090,000 | 2,052,890,000 | |
Less: allowance for credit losses | (19,199,000) | (14,103,000) | |
Carrying Value, Loans held for investment | $ 1,970,891,000 | $ 2,038,787,000 | |
Quantity | Loan | 78 | 81 | |
Loans held for investment, unfunded loan commitments | $ 143,600,000 | $ 158,200,000 | |
Commercial Real Estate Loans | Whole Loans | Benchmark Rate | |||
Receivables With Imputed Interest [Line Items] | |||
Loan Receivable Interest Rate Floor | 4.74% | 4.21% | |
Commercial Real Estate Loans | Whole Loans | Benchmark Rate | Minimum | |||
Receivables With Imputed Interest [Line Items] | |||
Contractual Interest Rates | 2.86% | 2.85% | |
Commercial Real Estate Loans | Whole Loans | Benchmark Rate | Maximum | |||
Receivables With Imputed Interest [Line Items] | |||
Contractual Interest Rates | 8.61% | 8.50% | |
Commercial Real Estate Loans | Mezzanine loan | |||
Receivables With Imputed Interest [Line Items] | |||
Principal, Loans held for investment | $ 4,700,000 | $ 4,700,000 | |
Amortized Cost, Loans held for investment | 4,700,000 | 4,700,000 | |
Less: allowance for credit losses | $ (4,700,000) | $ (4,700,000) | |
Quantity | Loan | 1 | 1 | |
Contractual Interest Rates | 10% | 10% | |
Commercial Real Estate Loans | Mezzanine loan | Benchmark Rate | |||
Receivables With Imputed Interest [Line Items] | |||
Loan Receivable Interest Rate Floor | 0.66% | 0.68% | |
Commercial Real Estate Loans | Whole Loans in Default | |||
Receivables With Imputed Interest [Line Items] | |||
Amortized Cost, Loans held for investment | $ 51,000,000 | $ 51,600,000 | |
Quantity | Loan | 3 | 3 |
LOANS (Commercial Real Estate L
LOANS (Commercial Real Estate Loans, at Amortized Cost) (Details) $ in Thousands | Mar. 31, 2023 USD ($) Loan | Dec. 31, 2022 USD ($) Loan |
Receivables With Imputed Interest [Line Items] | ||
CRE loans | $ 1,994,790 | $ 2,057,590 |
Commercial Real Estate Loans | ||
Receivables With Imputed Interest [Line Items] | ||
CRE loans | 1,994,790 | 2,057,590 |
Commercial Real Estate Loans | Whole Loans in Default | ||
Receivables With Imputed Interest [Line Items] | ||
CRE loans | $ 51,000 | $ 51,600 |
Number of loans | Loan | 3 | 3 |
Commercial Real Estate Loans | ||
Receivables With Imputed Interest [Line Items] | ||
2023 | $ 141,589 | $ 268,120 |
2024 | 924,605 | 882,175 |
2025 and Thereafter | 877,635 | 855,731 |
Amortized Cost, Loans held for investment | $ 1,943,829 | $ 2,006,026 |
Commercial Real Estate Loans | Whole Loans in Default | ||
Receivables With Imputed Interest [Line Items] | ||
Number of loans | Loan | 3 | 3 |
Commercial Real Estate Loans | Whole Loans | ||
Receivables With Imputed Interest [Line Items] | ||
2023 | $ 141,589 | $ 268,120 |
2024 | 924,605 | 882,175 |
2025 and Thereafter | 872,935 | 851,031 |
Amortized Cost, Loans held for investment | 1,939,129 | 2,001,326 |
Commercial Real Estate Loans | Mezzanine loan | ||
Receivables With Imputed Interest [Line Items] | ||
2025 and Thereafter | 4,700 | 4,700 |
Amortized Cost, Loans held for investment | 4,700 | 4,700 |
Commercial Real Estate Loans | Whole Loans | Whole Loan in Extension Option | ||
Receivables With Imputed Interest [Line Items] | ||
2023 | 58,000 | 113,800 |
2024 | 68,500 | 68,600 |
2025 and Thereafter | $ 1,800,000 | $ 1,800 |
LOANS (Details)
LOANS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Principal paydowns receivable | $ 54,000 | $ 0 |
Commercial Real Estate Loans | Southwest Region [Member] | ||
Variable Interest Entity [Line Items] | ||
Concentration of loan portfolio risk | 23.20% | 23.20% |
Commercial Real Estate Loans | Southeast Region [Member] | ||
Variable Interest Entity [Line Items] | ||
Concentration of loan portfolio risk | 23.10% | 21.50% |
Commercial Real Estate Loans | Mountain Region [Member] | ||
Variable Interest Entity [Line Items] | ||
Concentration of loan portfolio risk | 13.90% | 16.20% |
FINANCING RECEIVABLES (Activity
FINANCING RECEIVABLES (Activity in Allowance for Credit Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Receivables [Abstract] | |||
Allowance for credit losses at beginning of period | $ 18,803 | $ 8,805 | $ 8,805 |
Provision for (reversal of) credit losses, net | 5,096 | $ (1,802) | 12,295 |
Charge offs | (2,297) | ||
Allowance for credit losses at end of period | $ 23,899 | $ 18,803 |
FINANCING RECEIVABLES (Details)
FINANCING RECEIVABLES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) Loan Note Contract | Mar. 31, 2022 USD ($) Contract Loan | Dec. 31, 2022 USD ($) Loan Note | |
Accounts Notes And Loans Receivable [Line Items] | |||
Reversal of credit losses, net | $ 5,096 | $ (1,802) | $ 12,295 |
Recorded investment | $ 21,800 | ||
Percentage of total amortization cost | 1.10% | ||
Extended Maturity | |||
Accounts Notes And Loans Receivable [Line Items] | |||
No of extension agreements | Contract | 0 | 1 | |
No of loans | Loan | 1 | ||
Mezzanine loan | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of bank loans | Note | 1 | 1 | |
Northeast Region | Retail Loan | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of loans individually evaluated | Loan | 1 | 1 | |
Principal balance individually evaluated | $ 8,000 | $ 8,000 | |
Northeast Region | Mezzanine loan | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of loans individually evaluated | Loan | 1 | 1 | |
Principal balance individually evaluated | $ 4,700 | $ 4,700 | |
Southwest region | Office Loan | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of loans individually evaluated | Loan | 1 | 1 | |
Principal balance individually evaluated | $ 20,100 | $ 20,700 | |
Commercial Real Estate Loans | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Reversal of credit losses, net | 5,100 | ||
Commercial Real Estate Loans | Whole Loans In Maturity Default | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Recorded investment | 22,800 | ||
Commercial Real Estate Loans | Three Whole Loans in Maturity Default | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Recorded investment | $ 51,000 | $ 51,600 | |
Commercial Real Estate Loans | Whole Loans | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of bank loans | Loan | 3 | ||
Commercial Real Estate Loans | Whole Loan In Payment Defaults | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of bank loans | Loan | 3 | ||
Commercial Real Estate Loans | Mazzanine Loans In Payment Defaults | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Number of bank loans | Loan | 1 | ||
Recorded investment | $ 4,700 |
FINANCING RECEIVABLES (Credit R
FINANCING RECEIVABLES (Credit Risk Profiles and Allowance For Loan Losses) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | $ 1,994,790 | $ 2,057,590 |
Commercial Real Estate Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 1,994,790 | 2,057,590 |
Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 1,990,090 | 2,052,890 |
Commercial Real Estate Loans | Mezzanine loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 4,700 | 4,700 |
Rating1 | Commercial Real Estate Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 0 | 0 |
Rating1 | Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 0 | 0 |
Rating1 | Commercial Real Estate Loans | Mezzanine loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 0 | 0 |
Rating 2 | Commercial Real Estate Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 1,532,268 | 1,635,376 |
Rating 2 | Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 1,532,268 | 1,635,376 |
Rating 2 | Commercial Real Estate Loans | Mezzanine loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 0 | 0 |
Rating 3 | Commercial Real Estate Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 362,903 | 309,491 |
Rating 3 | Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 362,903 | 309,491 |
Rating 3 | Commercial Real Estate Loans | Mezzanine loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 0 | 0 |
Rating 4 | Commercial Real Estate Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 43,958 | 85,226 |
Rating 4 | Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 43,958 | 85,226 |
Rating 4 | Commercial Real Estate Loans | Mezzanine loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 0 | 0 |
Rating 5 | Commercial Real Estate Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 55,661 | 27,497 |
Rating 5 | Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | 50,961 | 22,797 |
Rating 5 | Commercial Real Estate Loans | Mezzanine loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
CRE loans | $ 4,700 | $ 4,700 |
FINANCING RECEIVABLES (Credit_2
FINANCING RECEIVABLES (Credit Risk Profiles and Allowance For Loan Losses) (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Commercial Real Estate Loans | Whole Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Recorded investment excluded accrued interest receivable | $ 12.5 | $ 11.9 |
FINANCING RECEIVABLES (Credit_3
FINANCING RECEIVABLES (Credit Risk Profiles of CRE Loans by Origination Year at Amortized Costs) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Rating 4 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2019/2018 | $ 0 | |
Loans and receivables by origination year, Prior | 0 | |
Loans and receivables by origination year, Total | 43,958 | |
Rating 5 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2022/2021 | 0 | |
Loans and receivables by origination year, 2021/2020 | 0 | |
Loans and receivables by origination year, 2020/2019 | 0 | |
Loans and receivables by origination year, 2019/2018 | 42,936 | |
Loans and receivables by origination year, Prior | 8,025 | |
Loans and receivables by origination year, Total | 50,961 | |
Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 14,759 | $ 526,606 |
Loans and receivables by origination year, 2022/2021 | 1,191,352 | 1,195,550 |
Loans and receivables by origination year, 2021/2020 | 532,636 | 109,601 |
Loans and receivables by origination year, 2020/2019 | 97,772 | 98,397 |
Loans and receivables by origination year, 2019/2018 | 87,109 | 127,436 |
Loans and receivables by origination year, Prior | 71,162 | 0 |
Loans and receivables by origination year, Total | 1,994,790 | 2,057,590 |
Whole Loans | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 14,759 | 526,606 |
Loans and receivables by origination year, 2022/2021 | 1,191,352 | 1,195,550 |
Loans and receivables by origination year, 2021/2020 | 532,636 | 109,601 |
Loans and receivables by origination year, 2020/2019 | 97,772 | 98,397 |
Loans and receivables by origination year, 2019/2018 | 87,109 | 122,736 |
Loans and receivables by origination year, Prior | 66,462 | 0 |
Loans and receivables by origination year, Total | 1,990,090 | 2,052,890 |
Whole Loans | Commercial Real Estate Loans | Rating 2 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 14,759 | 526,606 |
Loans and receivables by origination year, 2022/2021 | 480,017 | 1,003,060 |
Loans and receivables by origination year, 2021/2020 | 944,121 | 64,944 |
Loans and receivables by origination year, 2020/2019 | 52,722 | 26,977 |
Loans and receivables by origination year, 2019/2018 | 26,949 | 13,789 |
Loans and receivables by origination year, Prior | 13,700 | 0 |
Loans and receivables by origination year, Total | 1,532,268 | 1,635,376 |
Whole Loans | Commercial Real Estate Loans | Rating 3 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 0 | 0 |
Loans and receivables by origination year, 2022/2021 | 52,619 | 192,490 |
Loans and receivables by origination year, 2021/2020 | 203,273 | 44,657 |
Loans and receivables by origination year, 2020/2019 | 34,387 | 27,881 |
Loans and receivables by origination year, 2019/2018 | 27,887 | 44,463 |
Loans and receivables by origination year, Prior | 44,737 | 0 |
Loans and receivables by origination year, Total | 362,903 | 309,491 |
Whole Loans | Commercial Real Estate Loans | Rating 4 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 0 | 0 |
Loans and receivables by origination year, 2022/2021 | 43,958 | 0 |
Loans and receivables by origination year, 2021/2020 | 0 | 0 |
Loans and receivables by origination year, 2020/2019 | 20,742 | |
Loans and receivables by origination year, 2019/2018 | 0 | 64,484 |
Loans and receivables by origination year, Prior | 0 | |
Loans and receivables by origination year, Total | 85,226 | |
Whole Loans | Commercial Real Estate Loans | Rating 5 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 0 | 0 |
Loans and receivables by origination year, 2022/2021 | 0 | |
Loans and receivables by origination year, 2021/2020 | 0 | |
Loans and receivables by origination year, 2020/2019 | 22,797 | |
Loans and receivables by origination year, 2019/2018 | 0 | |
Loans and receivables by origination year, Prior | 0 | |
Loans and receivables by origination year, Total | 22,797 | |
Mezzanine loan | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, Total | 4,700 | |
Mezzanine loan | Commercial Real Estate Loans | Rating 5 | ||
Financing Receivable Recorded Investment [Line Items] | ||
Loans and receivables by origination year, 2023/2022 | 0 | 0 |
Loans and receivables by origination year, 2022/2021 | 0 | 0 |
Loans and receivables by origination year, 2021/2020 | 0 | 0 |
Loans and receivables by origination year, 2020/2019 | 0 | 4,700 |
Loans and receivables by origination year, 2019/2018 | 0 | 0 |
Loans and receivables by origination year, Prior | $ 4,700 | 0 |
Loans and receivables by origination year, Total | $ 4,700 |
FINANCING RECEIVABLES (Credit_4
FINANCING RECEIVABLES (Credit Risk Profiles of CRE Loans by Origination Year at Amortized Costs) (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Recorded investment excluded accrued interest receivable | $ 12.5 | $ 11.9 |
FINANCING RECEIVABLES (Loan Por
FINANCING RECEIVABLES (Loan Portfolio Aging Analysis) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | $ 1,994,790 | $ 2,057,590 |
Total Loans Receivable (3) | 1,994,790 | 2,057,590 |
Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 1,994,790 | 2,057,590 |
Total Loans Receivable (3) | 1,994,790 | 2,057,590 |
Total Loans > 90 Days and Accruing | 0 | 0 |
Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 1,990,090 | 2,052,890 |
Total Loans Receivable (3) | 1,990,090 | 2,052,890 |
Total Loans > 90 Days and Accruing | 0 | 0 |
Commercial Real Estate Loans | Mezzanine loan | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 4,700 | 4,700 |
Total Loans Receivable (3) | 4,700 | 4,700 |
Total Loans > 90 Days and Accruing | 0 | 0 |
30-59 Days | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 4,700 | 0 |
Total Loans Receivable (3) | 4,700 | 0 |
30-59 Days | Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 0 | 0 |
Total Loans Receivable (3) | 0 | 0 |
30-59 Days | Commercial Real Estate Loans | Mezzanine loan | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 4,700 | 0 |
Total Loans Receivable (3) | 4,700 | 0 |
60-89 Days | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 0 | 0 |
Total Loans Receivable (3) | 0 | 0 |
60-89 Days | Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 0 | 0 |
Total Loans Receivable (3) | 0 | 0 |
60-89 Days | Commercial Real Estate Loans | Mezzanine loan | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 0 | 0 |
Total Loans Receivable (3) | 0 | 0 |
Greater than 90 Days | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 50,961 | 28,767 |
Total Loans Receivable (3) | 50,961 | 28,767 |
Greater than 90 Days | Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 50,961 | 28,767 |
Total Loans Receivable (3) | 50,961 | 28,767 |
Greater than 90 Days | Commercial Real Estate Loans | Mezzanine loan | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 0 | 0 |
Total Loans Receivable (3) | 0 | 0 |
Total Past Due | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 55,661 | 28,767 |
Total Loans Receivable (3) | 55,661 | 28,767 |
Total Past Due | Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 50,961 | 28,767 |
Total Loans Receivable (3) | 50,961 | 28,767 |
Total Past Due | Commercial Real Estate Loans | Mezzanine loan | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 4,700 | 0 |
Total Loans Receivable (3) | 4,700 | 0 |
Current | Commercial Real Estate Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 1,939,129 | 2,028,823 |
Total Loans Receivable (3) | 1,939,129 | 2,028,823 |
Current | Commercial Real Estate Loans | Whole Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 1,939,129 | 2,024,123 |
Total Loans Receivable (3) | 1,939,129 | 2,024,123 |
Current | Commercial Real Estate Loans | Mezzanine loan | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
CRE loans | 0 | 4,700 |
Total Loans Receivable (3) | $ 0 | $ 4,700 |
FINANCING RECEIVABLES (Loan P_2
FINANCING RECEIVABLES (Loan Portfolio Aging Analysis) (Parenthetical) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Interest income | $ 45,329,000 | $ 22,676,000 | |
Recorded investment | 21,800,000 | ||
Commercial Real Estate Loans | Whole Loans In Maturity Default | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Interest income | 1,100,000 | $ 641,000 | |
Recorded investment | $ 22,800,000 | ||
Recorded investment excluded accrued interest receivable | $ 12,500,000 | $ 11,900,000 |
INVESTMENTS IN REAL ESTATE AN_3
INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES (Details) | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2023 USD ($) | Mar. 31, 2023 USD ($) Property | Mar. 31, 2022 USD ($) | |
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Number of real estate properties | Property | 5 | ||
Amortization expense on intangible assets | $ 252,000 | $ 1,200,000 | |
Amortization expense on intangible assets during 2023 | 1,300,000 | ||
Amortization expense on intangible assets during 2024 | 1,200,000 | ||
Amortization expense on intangible assets during 2025 | 1,100,000 | ||
Amortization expense on intangible assets during 2026 | 1,000,000 | ||
Amortization expense on intangible assets during 2027 | 1,000,000 | ||
Lease Expense | 37,000 | $ 23,000 | |
Proceeds from Sale of Property Held-for-sale | $ 15,100,000 | ||
Gain (Loss) on Disposition of Property Plant Equipment | 745,000 | ||
Selling costs of property held for sale | $ 845,000 | ||
Ground Lease | Above-market Leases | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Offsetting amortization on right of use assets and amortization lease liability | 51,000 | ||
Offsetting amortization on right of use assets accretion and amortization lease liability | $ 610,000 | ||
Second Ground Lease | Above-market Leases | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Original term of operating lease acquired | 99 years | ||
Remaining term of operating lease acquired | 94 years | ||
Lease Expense | $ 426,000 | ||
Operating lease, remaining lease term | 93 years | ||
Percentage of increase in ground lease payments | 3% | ||
Investments in Real Estate | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Number of real estate properties | Property | 4 | ||
Properties Held for Sale | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Number of real estate properties | Property | 1 |
INVESTMENTS IN REAL ESTATE AN_4
INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES (Schedule of Investments in Real Estate and Related Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | ||
Investment in Real Estate, Carrying Value | $ 130,571 | $ 120,968 |
Right of use Assets, Carrying Value | 20,152 | 20,281 |
Assets Acquired, Cost Basis | 205,037 | 208,126 |
Assets Acquired, Accumulated Depreciation & Amortization | (6,070) | (5,050) |
Assets Acquired, Carrying Value | 198,967 | 203,076 |
Liabilities Assumed, Cost Basis | 64,621 | 64,621 |
Liabilities Assumed, Accumulated Depreciation & Amortization | (211) | (421) |
Liabilities Assumed, Carrying Value | 64,410 | 64,200 |
Assets Acquired and Liabilities Assumed, Cost Basis | 140,416 | 143,505 |
Asset Acquired and Liabilities Assumed, Carrying Value | 134,557 | 138,876 |
Investments In Real Estate Equity | ||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | ||
Investment in Real Estate, Cost Basis | 133,522 | 123,219 |
Investment in Real Estate Accumulated Depreciation & Amortization | (2,951) | (2,251) |
Investment in Real Estate, Carrying Value | 130,571 | 120,968 |
Right of use Assets, Cost Basis | 19,664 | 19,664 |
Right of use Assets Accumulated Depreciation & Amortization | (273) | (205) |
Right of use Assets, Carrying Value | 19,391 | 19,459 |
Intangible Assets, Cost Basis | 11,474 | 11,474 |
Intangible Assets, Accumulated Depreciation & Amortization | (2,846) | (2,594) |
Intangible Assets, Carrying Value | 8,628 | 8,880 |
Assets Acquired, Cost Basis | 164,660 | 154,357 |
Assets Acquired, Accumulated Depreciation & Amortization | (6,070) | (5,050) |
Assets Acquired, Carrying Value | 158,590 | 149,307 |
Mortgage payable, Cost Basis | 18,089 | 18,089 |
Mortgage payable, Accumulated Depreciation & Amortization | (207) | 155 |
Mortgage payable, Carrying Value | 18,296 | 18,244 |
Other liabilities, Cost Basis | 247 | 247 |
Other liabilities, Accumulated Depreciation & Amortization | (192) | (183) |
Other liabilities, Carrying Value | 55 | 64 |
Lease liabilities, Cost Basis | 43,260 | 43,260 |
Lease liabilities, Accumulated Depreciation & Amortization | (226) | (393) |
Lease liabilities, Carrying Value | 43,034 | 42,867 |
Liabilities Assumed, Cost Basis | 61,596 | 61,596 |
Liabilities Assumed, Accumulated Depreciation & Amortization | (211) | (421) |
Liabilities Assumed, Carrying Value | 61,385 | 61,175 |
Investments In Real Estate From Lending Activities | ||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | ||
Property Held for Sale, Cost Basis | 40,377 | 53,769 |
Properties Held for Sale, Carrying Value | 40,377 | 53,769 |
Liabilities held for sale liabilities, Cost Basis | 3,025 | 3,025 |
Liabilities held for sale liabilities, Carrying Value | $ 3,025 | $ 3,025 |
INVESTMENTS IN REAL ESTATE AN_5
INVESTMENTS IN REAL ESTATE AND OTHER ACQUIRED ASSETS AND ASSUMED LIABILITIES (Schedule of Investments in Real Estate and Related Intangible Assets) (Parenthetical) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Right of use assets | $ 20,152,000 | $ 20,281,000 | |
Unamortized issuance costs and discounts | 18,543,000 | 17,846,000 | |
Lease Expense | 37,000 | $ 23,000 | |
Acquired Ground Lease | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Right of use assets | 19,000,000 | ||
Investments In Real Estate From Lending Activities | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Ground leases | 42,600,000 | ||
Investments In Real Estate Equity [Member] | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Right of use assets | 19,391,000 | 19,459,000 | |
Ground leases | 42,600,000 | ||
Unamortized issuance costs and discounts | 2,200,000 | ||
Investments In Real Estate Equity [Member] | Land | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Investments in real estate | 38,400,000 | 38,400,000 | |
Franchise Agreement | Investments In Real Estate Equity [Member] | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Intangible assets | 5,100,000 | 5,300,000 | |
Management Contract | Investments In Real Estate Equity [Member] | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Intangible assets | 3,100,000 | 3,100,000 | |
Customer Lists | Investments In Real Estate Equity [Member] | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Intangible assets | $ 357,000 | $ 427,000 | |
Land Lease | |||
Investment In Real Estate And Other Acquired Assets And Assumed Liabilities [Line Items] | |||
Operating lease, remaining lease term | 93 years | ||
Lease Expense | $ 661,000 |
LEASES (Details)
LEASES (Details) - Office Space and Office Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Minimum | |
Lessee Lease Description [Line Items] | |
Operating lease expiration date | 2024-01 |
Maximum | |
Lessee Lease Description [Line Items] | |
Operating lease expiration date | 2029-09 |
LEASES (Summary of Operating Le
LEASES (Summary of Operating Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Right of use assets | $ 761 | $ 822 |
Lease liabilities | $ (803) | $ (828) |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities |
Weighted average remaining lease term: | 6 years 6 months | 6 years 8 months 12 days |
Weighted average discount rate: | 8.70% | 8.71% |
LEASES (Summary of Operating _2
LEASES (Summary of Operating Lease Costs and Cash Payments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Lease Cost: | ||
Operating lease cost | $ 75 | $ 24 |
Other Information: | ||
Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases | $ 37 | $ 23 |
LEASES (Summary of Operating _3
LEASES (Summary of Operating Leases Cash Flow Obligations on Undiscounted, Annual Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 | $ 115 | |
2024 | 155 | |
2025 | 159 | |
2026 | 163 | |
2027 | 167 | |
Thereafter | 303 | |
Subtotal | 1,062 | |
Less: impact of discount | (259) | |
Total | $ 803 | $ 828 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Schedule Of Equity Method Investments [Line Items] | |||
Investments in unconsolidated entities | $ 1,548,000 | $ 1,548,000 | |
VIE, Not Primary Beneficiary | Investment in RCT I and II | |||
Schedule Of Equity Method Investments [Line Items] | |||
Ownership percentage in VIE | 100% | 100% | |
Investments in unconsolidated entities | $ 1,500,000 | $ 1,500,000 | |
Dividends from investments in unconsolidated entities | $ 33,000 | $ 16,000 | |
VIE, Not Primary Beneficiary | Interest in RCT I | |||
Schedule Of Equity Method Investments [Line Items] | |||
Percentage of value of trusts owned | 3% | 3% | |
VIE, Not Primary Beneficiary | Interest in RCT II | |||
Schedule Of Equity Method Investments [Line Items] | |||
Percentage of value of trusts owned | 3% | 3% |
BORROWINGS (Schedule of Debt) (
BORROWINGS (Schedule of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 1,829,310 | $ 1,884,879 |
Unamortized Issuance Costs and Discounts | 18,543 | 17,846 |
Outstanding Borrowings | $ 1,810,767 | $ 1,867,033 |
Weighted Average Borrowing Rate | 6.62% | 6.29% |
Weighted Average Remaining Maturity | 10 years 3 months 18 days | 10 years 3 months 18 days |
Value of Collateral | $ 2,089,923 | $ 2,178,430 |
ACR 2021-FL1 Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 675,223 | 675,223 |
Unamortized Issuance Costs and Discounts | 3,430 | 3,826 |
Outstanding Borrowings | $ 671,793 | $ 671,397 |
Weighted Average Borrowing Rate | 6.20% | 5.81% |
Weighted Average Remaining Maturity | 13 years 2 months 12 days | 13 years 6 months |
Value of Collateral | $ 802,643 | $ 802,643 |
ACR 2021-FL2 Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 567,000 | 567,000 |
Unamortized Issuance Costs and Discounts | 4,438 | 4,841 |
Outstanding Borrowings | $ 562,562 | $ 562,159 |
Weighted Average Borrowing Rate | 6.51% | 6.13% |
Weighted Average Remaining Maturity | 13 years 9 months 18 days | 14 years 1 month 6 days |
Value of Collateral | $ 700,000 | $ 700,000 |
Senior Secured Financing Facility | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 53,336 | 91,549 |
Unamortized Issuance Costs and Discounts | 3,481 | 3,659 |
Outstanding Borrowings | $ 49,855 | $ 87,890 |
Weighted Average Borrowing Rate | 8.54% | 7.94% |
Weighted Average Remaining Maturity | 4 years 8 months 12 days | 5 years |
Value of Collateral | $ 127,185 | $ 196,837 |
CRE - Term Warehouse Financing Facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 313,493 | 330,849 |
Unamortized Issuance Costs and Discounts | 2,217 | 2,561 |
Outstanding Borrowings | $ 311,276 | $ 328,288 |
Weighted Average Borrowing Rate | 7.32% | 6.85% |
Weighted Average Remaining Maturity | 1 year 7 months 6 days | 1 year 9 months 18 days |
Value of Collateral | $ 434,695 | $ 453,550 |
Mortgage Payable | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 18,710 | 18,710 |
Unamortized Issuance Costs and Discounts | 414 | 466 |
Outstanding Borrowings | $ 18,296 | $ 18,244 |
Weighted Average Borrowing Rate | 8.58% | 8.08% |
Weighted Average Remaining Maturity | 2 years | 2 years 3 months 18 days |
Value of Collateral | $ 25,400 | $ 25,400 |
Construction Loans | ||
Debt Instrument [Line Items] | ||
Unamortized Issuance Costs and Discounts | 2,225 | |
Outstanding Borrowings, Unamortized Issuance Costs and Discounts | (2,225) | |
5.75% Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 150,000 | 150,000 |
Unamortized Issuance Costs and Discounts | 2,338 | 2,493 |
Outstanding Borrowings | $ 147,662 | $ 147,507 |
Weighted Average Borrowing Rate | 5.75% | 5.75% |
Weighted Average Remaining Maturity | 3 years 4 months 24 days | 3 years 7 months 6 days |
Unsecured Junior Subordinated Debentures | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 51,548 | $ 51,548 |
Outstanding Borrowings | $ 51,548 | $ 51,548 |
Weighted Average Borrowing Rate | 8.93% | 8.52% |
Weighted Average Remaining Maturity | 13 years 4 months 24 days | 13 years 8 months 12 days |
BORROWINGS (Schedule of Debt)_2
BORROWINGS (Schedule of Debt) (Parenthetical) (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Aug. 16, 2021 |
Debt Instrument [Line Items] | |||
Accrued interest payable | $ 4,762,000 | $ 6,921,000 | |
Interest rate, stated percentage | 5.75% | ||
CRE - Term Warehouse Financing Facilities | |||
Debt Instrument [Line Items] | |||
Accrued interest payable | $ 879,000 | $ 894,000 | |
5.75% Senior Unsecured Notes | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 5.75% | 5.75% |
BORROWINGS (Securitization) (De
BORROWINGS (Securitization) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
ACR 2021-FL1 Senior Notes | |
Debt Instrument [Line Items] | |
Closing Date | 2021-05 |
Maturity Date | 2036-06 |
End of Designated Principal Reinvestment Period | 2023-05 |
Total Note Paydowns Received from Closing Date through March 31. 2023 | $ 0 |
ACR 2021-FL2 Senior Notes | |
Debt Instrument [Line Items] | |
Closing Date | 2021-12 |
Maturity Date | 2037-01 |
End of Designated Principal Reinvestment Period | 2023-12 |
Total Note Paydowns Received from Closing Date through March 31. 2023 | $ 0 |
BORROWINGS (XAN 2020-RSO8) (Det
BORROWINGS (XAN 2020-RSO8) (Details) $ in Millions | Mar. 31, 2020 USD ($) |
XAN 2020-RSO8 Senior Notes | |
Debt Instrument [Line Items] | |
Closing transaction amount | $ 522.6 |
BORROWINGS (XAN 2020-RSO9) (Det
BORROWINGS (XAN 2020-RSO9) (Details) $ in Millions | Sep. 30, 2020 USD ($) |
XAN 2020-RSO9 Senior Notes | |
Debt Instrument [Line Items] | |
Closing transaction amount | $ 297 |
BORROWINGS (ACR 2021-FL1) (Deta
BORROWINGS (ACR 2021-FL1) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | May 31, 2021 |
Debt Instrument [Line Items] | |||
Face amount of debt issued | $ 377,202 | $ 434,422 | |
ACR 2021-FL1 Senior Notes | |||
Debt Instrument [Line Items] | |||
Closing transaction amount | $ 802,600 | ||
Face amount of debt issued | $ 675,200 | ||
ACR 2021-FL1 Senior Notes | Subsidiary of ACRES Realty Funding, Inc | Debt Instrument, Class F | |||
Debt Instrument [Line Items] | |||
Interest ownership percentage on outstanding debt | 100% | ||
ACR 2021-FL1 Senior Notes | Subsidiary of ACRES Realty Funding, Inc | Debt Instrument, Class G | |||
Debt Instrument [Line Items] | |||
Interest ownership percentage on outstanding debt | 100% | ||
ACR 2021-FL1 Senior Notes | Subsidiary of ACRES Realty Funding, Inc | Preferred Stock | |||
Debt Instrument [Line Items] | |||
Interest ownership percentage on outstanding debt | 100% |
BORROWINGS (ACR 2021-FL2) (Deta
BORROWINGS (ACR 2021-FL2) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Face amount of debt issued | $ 377,202 | $ 434,422 | |
ACR 2021-FL2 Senior Notes | |||
Debt Instrument [Line Items] | |||
Closing transaction amount | $ 700,000 | ||
Face amount of debt issued | $ 567,000 | ||
ACR 2021-FL2 Senior Notes | Subsidiary of ACRES Realty Funding, Inc | Debt Instrument, Class F | |||
Debt Instrument [Line Items] | |||
Interest ownership percentage on outstanding debt | 100% | ||
ACR 2021-FL2 Senior Notes | Subsidiary of ACRES Realty Funding, Inc | Debt Instrument, Class G | |||
Debt Instrument [Line Items] | |||
Interest ownership percentage on outstanding debt | 100% | ||
ACR 2021-FL2 Senior Notes | Subsidiary of ACRES Realty Funding, Inc | Preferred Stock [Member] | |||
Debt Instrument [Line Items] | |||
Interest ownership percentage on outstanding debt | 100% |
BORROWINGS (Senior Secured Fina
BORROWINGS (Senior Secured Financing Facility and Term Warehouse Financing Facilities, Mortgage Payable and Construction Loan) (Details) $ in Thousands | Mar. 31, 2023 USD ($) Loan | Dec. 31, 2022 USD ($) Loan |
Debt Instrument [Line Items] | ||
Outstanding Borrowings | $ 377,202 | $ 434,422 |
Value of Collateral | $ 587,280 | $ 675,787 |
Weighted Average Interest Rate | 6.62% | 6.29% |
Senior Secured Financing Facility | Massachusetts Mutual Life Insurance Company | ||
Debt Instrument [Line Items] | ||
Outstanding Borrowings, Unamortized Issuance Costs and Discounts | $ 49,855 | $ 87,890 |
Value of Collateral | $ 127,185 | $ 196,837 |
Number of Positions as Collateral | Loan | 6 | 8 |
Weighted Average Interest Rate | 8.54% | 7.94% |
CRE - Term Warehouse Financing Facilities | JP Morgan Chase Bank, N.A. | ||
Debt Instrument [Line Items] | ||
Outstanding Borrowings | $ 178,723 | $ 186,783 |
Value of Collateral | $ 246,740 | $ 255,095 |
Number of Positions as Collateral | Loan | 10 | 11 |
Weighted Average Interest Rate | 7.25% | 6.74% |
CRE - Term Warehouse Financing Facilities | Morgan Stanley Mortgage Capital Holdings LLC | ||
Debt Instrument [Line Items] | ||
Outstanding Borrowings | $ 132,553 | $ 141,505 |
Value of Collateral | $ 187,955 | $ 198,455 |
Number of Positions as Collateral | Loan | 9 | 10 |
Weighted Average Interest Rate | 7.41% | 7% |
Mortgage Payable | Readycap Commercial, LLC | ||
Debt Instrument [Line Items] | ||
Outstanding Borrowings | $ 18,296 | $ 18,244 |
Value of Collateral | $ 25,400 | $ 25,400 |
Number of Positions as Collateral | Loan | 1 | 1 |
Weighted Average Interest Rate | 8.58% | 8.08% |
Construction Loans | ||
Debt Instrument [Line Items] | ||
Outstanding Borrowings, Unamortized Issuance Costs and Discounts | $ (2,225) | |
Construction Loans | Oceanview Life and Annuity Company | ||
Debt Instrument [Line Items] | ||
Outstanding Borrowings, Unamortized Issuance Costs and Discounts | $ (2,225) |
BORROWINGS (Senior Secured Fi_2
BORROWINGS (Senior Secured Financing Facility and Term Warehouse Financing Facilities, Mortgage Payable and Construction Loan (Parenthetical) (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | $ 18,543,000 | $ 17,846,000 |
Construction Loans | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | 2,225,000 | |
Readycap Commercial, LLC | Mortgage Payable | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | 414,000 | 466,000 |
Oceanview Life and Annuity Company | Construction Loans | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | 2,200,000 | |
Senior Secured Financing Facility | Massachusetts Mutual Life Insurance Company | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | 3,500,000 | 3,700,000 |
CRE - Term Warehouse Financing Facilities | JP Morgan Chase Bank, N.A. | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | 993,000 | 1,100,000 |
CRE - Term Warehouse Financing Facilities | Morgan Stanley Mortgage Capital Holdings LLC | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs and discounts | $ 1,200,000 | $ 1,400,000 |
BORROWINGS (Amount at Risk Unde
BORROWINGS (Amount at Risk Under Warehouse Financing Facilities and Mortgage Payable) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Weighted Average Remaining Maturity | 10 years 3 months 18 days | 10 years 3 months 18 days |
Weighted Average Interest Rate | 6.62% | 6.29% |
Senior Secured Financing Facility | ||
Debt Instrument [Line Items] | ||
Weighted Average Remaining Maturity | 4 years 8 months 12 days | 5 years |
Weighted Average Interest Rate | 8.54% | 7.94% |
Senior Secured Financing Facility | Massachusetts Mutual Life Insurance Company | ||
Debt Instrument [Line Items] | ||
Amount at Risk | $ 74,052 | |
Weighted Average Remaining Maturity | 4 years 8 months 12 days | |
Weighted Average Interest Rate | 8.54% | |
CRE - Term Warehouse Financing Facilities | ||
Debt Instrument [Line Items] | ||
Weighted Average Remaining Maturity | 1 year 7 months 6 days | 1 year 9 months 18 days |
Weighted Average Interest Rate | 7.32% | 6.85% |
CRE - Term Warehouse Financing Facilities | JP Morgan Chase Bank, N.A. | ||
Debt Instrument [Line Items] | ||
Amount at Risk | $ 68,674 | |
Weighted Average Remaining Maturity | 1 year 7 months 6 days | |
Weighted Average Interest Rate | 7.25% | |
CRE - Term Warehouse Financing Facilities | Morgan Stanley Mortgage Capital Holdings LLC | ||
Debt Instrument [Line Items] | ||
Amount at Risk | $ 55,478 | |
Weighted Average Remaining Maturity | 1 year 7 months 6 days | |
Weighted Average Interest Rate | 7.41% | |
Mortgage Payable | Readycap Commercial, LLC | ||
Debt Instrument [Line Items] | ||
Amount at Risk | $ 6,596 | |
Weighted Average Remaining Maturity | 2 years | |
Weighted Average Interest Rate | 8.58% | 8.08% |
BORROWINGS (Senior Secured Fi_3
BORROWINGS (Senior Secured Financing Facility) (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Jul. 31, 2020 | Dec. 31, 2022 | Mar. 31, 2023 | Aug. 16, 2021 | |
Debt Instrument [Line Items] | ||||
Face amount of debt issued | $ 434,422 | $ 377,202 | ||
Debt instrument, interest rate, stated percentage | 5.75% | |||
Loan and Servicing Agreement | Senior Secured Financing Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, commitment period of each loan series | 3 months | |||
Debt instrument, final maturity period of each loan series | 5 years | |||
Loan and Servicing Agreement | Maximum | Senior Secured Financing Facility | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt issued | $ 500,000 | |||
Loan and Servicing Agreement | MassMutual and Other Lenders | Senior Secured Financing Facility | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt issued | $ 250,000 | |||
Debt instrument, interest rate, stated percentage | 5.75% | |||
Loan and Servicing Agreement | MassMutual and Other Lenders | If Borrower Obtains Rating of BBB or Higher by October 31, 2020 | Senior Secured Financing Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, maturity date | Jul. 31, 2027 |
Borrowings (CRE - Term Warehous
Borrowings (CRE - Term Warehouse Financing Facilities) (Details) - CRE - Term Warehouse Financing Facilities - USD ($) $ in Millions | 1 Months Ended | |
Nov. 30, 2021 | Oct. 31, 2018 | |
Master Repurchase Agreement | JP Morgan Chase Bank, N.A. | ||
Debt Instrument [Line Items] | ||
Maximum facility amount | $ 250 | |
Maturity Date | 2024-10 | |
Master Repurchase and Securities Agreement | Morgan Stanley Mortgage Capital Holdings LLC | ||
Debt Instrument [Line Items] | ||
Maximum facility amount | $ 250 | |
Maturity Date | 2024-11 | |
Option to extend, term | 1 year |
BORROWINGS (Mortgage Payable) (
BORROWINGS (Mortgage Payable) (Details) - Mortgage Payable - Readycap Commercial, LLC $ in Millions | 1 Months Ended | |
Oct. 31, 2022 Extension | Apr. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | ||
Maximum facility amount | $ 20.4 | |
Advanced in initial funding | $ 18.7 | |
Basis spread on variable rate | 3.80% | |
Maturity Date | 2025-04 | |
Number of options to extend | Extension | 2 | |
Option to extend, term | 1 year | |
30 Day Average SOFR Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.80% |
BORROWINGS (Construction Loan)
BORROWINGS (Construction Loan) (Details) $ in Millions | 1 Months Ended | |
Jan. 31, 2023 USD ($) Extension | Aug. 16, 2021 | |
Debt Instrument [Line Items] | ||
Borrowing rate | 5.75% | |
Constraction Loan Agreement | Oceanview Life and Annuity Company | ||
Debt Instrument [Line Items] | ||
Maximum facility amount | $ 48 | |
Maturity Date | 2025-02 | |
Number of options to extend | Extension | 3 | |
Option to extend, term | 1 year | |
Constraction Loan Agreement | Oceanview Life and Annuity Company | Secured Overnight Financing Rate (SOFR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 6% | |
Constraction Loan Agreement | Florida Pace Funding Agency | ||
Debt Instrument [Line Items] | ||
Maximum facility amount | $ 15.5 | |
Borrowing rate | 7.26% | |
Maturity Date | 2053-07 |
BORROWINGS (5.75% Senior Unsecu
BORROWINGS (5.75% Senior Unsecured Notes Due 2026) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 16, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 5.75% | ||
Face amount of debt issued | $ 377,202 | $ 434,422 | |
Debt instrument redemption term | 100% | ||
5.75% Senior Unsecured Notes | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 5.75% | 5.75% | |
Face amount of debt issued | $ 150,000 | ||
Percentage of principal amount to be redeemed | 100% | ||
Debt instrument redemption term | Prior to May 15, 2026, the Company may at its option redeem the 5.75% Senior Unsecured Notes, in whole or in part, at a redemption price equal to the sum of (i) 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date, and (ii) a make-whole premium. On or after May 15, 2026, the Company may at its option redeem the 5.75% Senior Unsecured Notes, at any time, in whole or in part, on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the 5.75% Senior Unsecured Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date. |
BORROWINGS (4.50% Convertible S
BORROWINGS (4.50% Convertible Senior Notes) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Aug. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 16, 2021 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | |||||||
Face amount of debt issued | $ 377,202,000 | $ 434,422,000 | |||||
Interest rate, stated percentage | 5.75% | ||||||
Loss on extinguishment of debt | $ (460,000) | ||||||
Interest expense | $ 31,375,000 | $ 14,907,000 | |||||
4.5% Convertible Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Face amount of debt issued | $ 143,800,000 | ||||||
Interest rate, stated percentage | 4.50% | 4.50% | 4.50% | ||||
Repurchase of convertible senior notes | $ 39,800,000 | $ 55,800,000 | |||||
Charge to earnings | 574,000 | ||||||
Loss on extinguishment of debt | 460,000 | ||||||
Interest expense | $ 114,000 | ||||||
Repayment of convertible senior notes | $ 48,200,000 | ||||||
Effective interest rate | 7.43% |
BORROWINGS (Unsecured Junior Su
BORROWINGS (Unsecured Junior Subordinated Debentures) (Details) - Unsecured Junior Subordinated Debentures - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 13, 2016 | |
RCT I entity | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt issued | $ 25.8 | |||
Debt issuance costs, amortization period (in years) | 10 years | |||
Interest rate at period end | 9.11% | 8.68% | ||
RCT II entity | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt issued | $ 25.8 | |||
Debt issuance costs, amortization period (in years) | 10 years | |||
Interest rate at period end | 8.75% | 8.36% |
BORROWINGS (Contractual Commitm
BORROWINGS (Contractual Commitments) (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
Total | $ 1,829,310 |
2024 | 313,493 |
2025 | 18,710 |
2026 | 150,000 |
2027 | 53,336 |
2028 and Thereafter | 1,293,771 |
CRE securitizations | |
Debt Instrument [Line Items] | |
Total | 1,242,223 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 and Thereafter | 1,242,223 |
Senior Secured Financing Facility | |
Debt Instrument [Line Items] | |
Total | 53,336 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 53,336 |
2028 and Thereafter | 0 |
CRE - Term Warehouse Financing Facilities | |
Debt Instrument [Line Items] | |
Total | 313,493 |
2024 | 313,493 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 and Thereafter | 0 |
Mortgage Payable | |
Debt Instrument [Line Items] | |
Total | 18,710 |
2024 | 0 |
2025 | 18,710 |
2026 | 0 |
2027 | 0 |
2028 and Thereafter | 0 |
5.75% Senior Unsecured Notes | |
Debt Instrument [Line Items] | |
Total | 150,000 |
2024 | 0 |
2025 | 0 |
2026 | 150,000 |
2027 | 0 |
2028 and Thereafter | 0 |
Unsecured Junior Subordinated Debentures | |
Debt Instrument [Line Items] | |
Total | 51,548 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 and Thereafter | $ 51,548 |
SHARE ISSUANCE AND REPURCHASE (
SHARE ISSUANCE AND REPURCHASE (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2020 | Jun. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jul. 31, 2022 | Nov. 30, 2021 | Oct. 04, 2021 | Aug. 16, 2021 | Nov. 30, 2020 | |
Class Of Stock [Line Items] | ||||||||||
Proceeds from issuance of preferred stock, net | $ (37,000) | |||||||||
Shares repurchased during period, value | $ 756,000 | $ 3,900,000 | ||||||||
Shares repurchased during period, shares | 79,744 | 314,552 | ||||||||
Interest rate, stated percentage | 5.75% | |||||||||
Equity and Debt Securities Repurchase Program | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Stock repurchase program, authorized amount (up to) | $ 20,000,000 | $ 20,000,000 | ||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 6,500,000 | |||||||||
Note and Warrant Purchase Agreement | Oaktree and MassMutual | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrant exercise price per share | $ 0.03 | |||||||||
Maximum notes that may be issued from time to time under note and warrant purchase agreement | $ 125,000,000 | |||||||||
Warrants recorded in additional paid-in capital, fair value | $ 3,100,000 | |||||||||
Warrants expiration term | 7 years | |||||||||
Interest rate, stated percentage | 12% | |||||||||
Note and Warrant Purchase Agreement | Oaktree | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants issued to purchase common stock | 391,995 | |||||||||
Purchase price of common stock for warrants issued | $ 42,000,000 | |||||||||
Note and Warrant Purchase Agreement | MassMutual | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants issued to purchase common stock | 74,666 | |||||||||
Purchase price of common stock for warrants issued | $ 8,000,000 | |||||||||
Warrants to purchase additional shares of common stock | 74,666 | |||||||||
Note and Warrant Purchase Agreement | Maximum | Oaktree and MassMutual | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Aggregate purchase of common stock warrants | 1,166,653 | |||||||||
7.875% Series D Preferred Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Preferred stock, shares issued (in shares) | 4,600,000 | 4,607,857 | 4,607,857 | |||||||
Preferred stock, coupon authorized | 7.875% | 7.875% | 7.875% | |||||||
Offering price | $ 25 | |||||||||
Proceeds from issuance of preferred stock, net | $ 110,400,000 | |||||||||
Payment of underwriting discounts and other offering expenses | $ 4,600,000 | |||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | ||||||||
Preferred stock, shares outstanding (in shares) | 4,607,857 | 4,607,857 | ||||||||
Series D Preferred Stock | Equity Distribution Agreement | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Preferred stock, shares issued (in shares) | 0 | |||||||||
Series D Preferred Stock | Equity Distribution Agreement | Maximum | JonesTrading Institutional Services LLC | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of shares that may be issued or sold from time to time under agreement | 2,200,000 | |||||||||
Commission fee payable of gross proceeds from sale of stock in percentage | 3% | |||||||||
8.625% Series C Preferred Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Preferred stock, shares issued (in shares) | 4,800,000 | 4,800,000 | ||||||||
Preferred stock, coupon authorized | 8.625% | 8.625% | ||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | ||||||||
Preferred stock, shares outstanding (in shares) | 4,800,000 | 4,800,000 | ||||||||
Preferred stock, weighted average issuance price (in dollars per share) | $ 25 | |||||||||
8.625% Series C Preferred Stock | London Interbank Offered Rate (LIBOR) | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Dividend payment rate, variable, basis spread on variable rate | 5.927% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
May 31, 2021 | Jun. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Recognized stock-based compensation expense | $ 894,000 | $ 744,000 | |||
Total unrecognized compensation costs related to unvested restricted stock | $ 3,600,000 | ||||
Cost is expected to be recognized over a weighted average period | 2 years 8 months 12 days | ||||
Percentage of incentive management fee payable in cash pursuant to the management agreement | 50% | ||||
Percentage incentive management fee payable in common stock pursuant to the management agreement | 50% | ||||
Manager Pursuant To Management Agreement | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Cash awards, percentage (up to) | 75% | ||||
Common stock awards, percentage (at least) | 25% | ||||
Incentive management fee pursuant to the management agreement | $ 129,000 | $ 0 | |||
Common Stock | Manager Pursuant To Management Agreement | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares payable pursuant to the management agreement (in shares) | 6,875 | ||||
2007 Omnibus Equity Compensation Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of share authorized for issue (in shares) | 1,100,000 | ||||
Share based compensation expiration period | 2029-06 | 2031-06 | |||
Common shares granted | 1,700,817 |
SHARE-BASED COMPENSATION (Commo
SHARE-BASED COMPENSATION (Common Stock Activity) (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Restricted common stock transactions | |
Unvested shares, end of period (in shares) | 583,333 |
Weighted-Average Grant-Date Fair Value, Issued | $ / shares | $ 9.45 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 9.45 |
Weighted-Average Grant-Date Fair Value, end of period (in shares) | $ / shares | $ 14.22 |
Restricted Stock | |
Restricted common stock transactions | |
Unvested shares, beginning of period (in shares) | 583,333 |
Issued (shares) | 17,780 |
Vested (shares) | (17,780) |
Forfeited (shares) | 0 |
Unvested shares, end of period (in shares) | 583,333 |
Weighted-Average Grant-Date Fair Value, beginning of period (in shares) | $ / shares | $ 14.22 |
Weighted-Average Grant-Date Fair Value, Forfeited | $ / shares | $ 0 |
Restricted Stock | Manager | |
Restricted common stock transactions | |
Unvested shares, beginning of period (in shares) | 524,999 |
Issued (shares) | 17,780 |
Vested (shares) | (17,780) |
Forfeited (shares) | 0 |
Unvested shares, end of period (in shares) | 524,999 |
Restricted Stock | Directors | |
Restricted common stock transactions | |
Unvested shares, beginning of period (in shares) | 58,334 |
Issued (shares) | 0 |
Vested (shares) | 0 |
Forfeited (shares) | 0 |
Unvested shares, end of period (in shares) | 58,334 |
SHARE-BASED COMPENSATION (Com_2
SHARE-BASED COMPENSATION (Common Stock Expected to Vest) (Details) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
2023 | 166,658 | |
2024 | 166,658 | |
2025 | 166,671 | |
2026 | 83,346 | |
Total | 583,333 | |
Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total | 583,333 | 583,333 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 2,293 | $ 2,084 |
Net income allocated to preferred shares | (4,855) | (4,855) |
Net loss allocable to non-controlling interest, net of taxes | 146 | 0 |
Net loss allocable to common shares | $ (2,416) | $ (2,771) |
Weighted average number of common shares outstanding: | ||
Weighted average number of common shares outstanding - basic | 8,108,418 | 8,630,316 |
Weighted average number of warrants outstanding | 391,995 | 466,661 |
Total weighted average number of common shares outstanding - basic | 8,500,413 | 9,096,977 |
Effect of dilutive securities - unvested restricted stock | 0 | 0 |
Weighted average number of common shares outstanding - diluted | 8,500,413 | 9,096,977 |
Net loss per common share - basic | $ (0.28) | $ (0.30) |
Net loss per common share - diluted | $ (0.28) | $ (0.30) |
DISTRIBUTIONS (Details)
DISTRIBUTIONS (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Class Of Stock [Line Items] | ||
REIT required taxable income distribution, percentage (at least) | 90% | |
REIT taxable income distribution required for exempt federal income taxes, percentage | 100% | |
Common Stock | ||
Class Of Stock [Line Items] | ||
Dividend per share (in dollars per share) | $ 0 | $ 0 |
DISTRIBUTIONS (Distributions De
DISTRIBUTIONS (Distributions Declared) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Series C Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Date Paid | May 01, 2023 | Jan. 30, 2023 | Oct. 31, 2022 | Aug. 01, 2022 | May 02, 2022 |
Total Distributions Paid | $ 2,587 | $ 2,587 | $ 2,587 | $ 2,588 | $ 2,588 |
Distributions Per Share | $ 0.5390625 | $ 0.5390625 | $ 0.5390625 | $ 0.5390625 | $ 0.5390625 |
Series D Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Date Paid | May 01, 2023 | Jan. 30, 2023 | Oct. 31, 2022 | Aug. 01, 2022 | May 02, 2022 |
Total Distributions Paid | $ 2,268 | $ 2,268 | $ 2,268 | $ 2,268 | $ 2,268 |
Distributions Per Share | $ 0.4921875 | $ 0.4921875 | $ 0.4921875 | $ 0.4921875 | $ 0.4921875 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Accumulated Other Comprehensive Loss [Roll Forward] | |
Beginning balance | $ 435,468 |
Ending balance | 433,753 |
Net Unrealized Loss on Derivatives | |
Accumulated Other Comprehensive Loss [Roll Forward] | |
Beginning balance | (6,394) |
Amounts reclassified from accumulated other comprehensive loss | 393 |
Ending balance | $ (6,001) |
RELATED PARTY TRANSACTIONS (Rel
RELATED PARTY TRANSACTIONS (Relationship with ACRES Capital Corp and Certain of its Subsidiaries) (Details) | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2020 USD ($) Extension | Mar. 31, 2023 USD ($) Entity shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) Loan Property shares | |
Related Party Transaction [Line Items] | ||||
Base management fees paid by the Company | $ 1,773,000 | $ 1,682,000 | ||
General and administrative | 2,979,000 | 3,457,000 | ||
Interest income | 45,329,000 | 22,676,000 | ||
Accrued interest receivable | 12,570,000 | $ 11,969,000 | ||
Commercial Real Estate Loans | ||||
Related Party Transaction [Line Items] | ||||
Loans refinanced by affiliates | 0 | $ 38,600,000 | ||
Percentage of interest acquired in property | 100% | |||
Number of properties acquired | Property | 1 | |||
Acquisition price of property served as collateral for loan prior to acquisition | $ 38,600,000 | |||
Manager Pursuant To Management Agreement | ACRES Commercial Realty Corp | ||||
Related Party Transaction [Line Items] | ||||
Base management fees paid by the Company | 1,600,000 | 1,700,000 | ||
Incentive compensation | $ 129,000 | 0 | ||
Incentive compensation payable in cash percentage | 50% | |||
Incentive compensation payable in common stock percentage | 50% | |||
Total indebtedness | $ 550,000 | 558,000 | ||
Incentive compensation payable and Servicing fees payable | 129,000 | 340,000 | ||
General and administrative | 902,000 | 2,000,000 | ||
Manager Pursuant To Management Agreement | ACRES Commercial Realty Corp | Other Liabilities | ||||
Related Party Transaction [Line Items] | ||||
Total indebtedness | $ 439,000 | 179,000 | ||
ACRES Capital Corp | ||||
Related Party Transaction [Line Items] | ||||
Number of securitization entities | Entity | 2 | |||
ACRES Capital Corp | XAN 2020-RSO9 Senior Notes | ||||
Related Party Transaction [Line Items] | ||||
Portfolio servicing fees | $ 0 | 0 | ||
Special servicing fees | 45,000 | |||
ACRES Capital Corp | Interest Income | XAN 2020-RSO9 Senior Notes | ||||
Related Party Transaction [Line Items] | ||||
Special servicing fees | 35,000 | |||
ACRES Capital Corp | ACRES Commercial Realty Corp | Loan Evidenced by Promissory Note | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, loan amount | $ 12,000,000 | |||
Related party transaction, interest rate | 3% | |||
Related party transaction, monthly amortization payment | $ 25,000 | |||
Related party debt, maturity month and year | 2026-07 | |||
Number of options to extend | Extension | 2 | |||
Related party debt, extension term | 1 year | |||
Related party debt, percentage of extension fee | 0.50% | |||
Principal balance | 11,200,000 | 11,300,000 | ||
Accrued interest receivable | 0 | 0 | ||
ACRES Capital Corp | ACRES Commercial Realty Corp | Loan Evidenced by Promissory Note | Other Income (Expense) | ||||
Related Party Transaction [Line Items] | ||||
Interest income | 84,000 | $ 87,000 | ||
ACRES Loan Origination, LLC | Joint Funding Agreements | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, loan amount | $ 97,200,000 | |||
Number of loan | Loan | 4 | |||
DevCo | ||||
Related Party Transaction [Line Items] | ||||
Fees payments | $ 54,000 | |||
DevCo | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Market rate for fees | 1.25% | |||
DevCo | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Market rate for fees | 1.50% | |||
ACRES Share Holdings, LLC | ||||
Related Party Transaction [Line Items] | ||||
Number of share authorized for issue (in shares) | shares | 1,100,000 | |||
Incentive Compensation Shares Payable | shares | 17,780 | |||
Shares of common stock issued | shares | 0 | |||
ACRES Share Holdings, LLC | Restricted Stock | Manager | ||||
Related Party Transaction [Line Items] | ||||
Shares of common stock vest percentage | 25% | |||
Vest in installments | 4 years | |||
Shares of common stock issued | shares | 299,999 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Mezzanine loan | Expected Future Cash Flows | Measurement Input, Discount Rate | VIE, Not Primary Beneficiary | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value inputs, discount rate | 0.1000 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Borrowings outstanding | $ 53,336,000 | $ 91,549,000 |
Minimum | Level 3 | Loans Pledged as Collateral | Expected Future Cash Flows | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, interest rate, stated percentage | 7.56% | 7.03% |
Maximum | Level 3 | Loans Pledged as Collateral | Expected Future Cash Flows | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, interest rate, stated percentage | 13.31% | 12.67% |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instruments carried at fair value | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Fair Value, by Balance Sheet Grouping) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | $ 1,970,891 | $ 2,038,787 | |
Mortgage payable | 1,829,310 | 1,884,879 | |
Quoted Prices in Active Markets for Identical Assets of Liabilities (Level 1) | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loan receivable - related party | 0 | 0 | |
Senior notes in CRE securitizations | 0 | 0 | |
Senior secured financing facility | 0 | 0 | |
Warehouse financing facilities | 0 | 0 | |
Mortgage payable | 0 | 0 | |
Construction loan | [1] | 0 | |
Junior subordinated notes | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets of Liabilities (Level 1) | CRE Whole Loan | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets of Liabilities (Level 1) | 5.75% Senior Unsecured Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
5.75% Senior Unsecured Notes | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loan receivable - related party | 0 | 0 | |
Senior notes in CRE securitizations | 0 | 0 | |
Senior secured financing facility | 0 | 0 | |
Warehouse financing facilities | 0 | 0 | |
Mortgage payable | 0 | 0 | |
Construction loan | [1] | 0 | |
Junior subordinated notes | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | CRE Whole Loan | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | 5.75% Senior Unsecured Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
5.75% Senior Unsecured Notes | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 2,001,105 | ||
Loan receivable - related party | 9,672 | 8,385 | |
Senior notes in CRE securitizations | 1,178,414 | 1,179,313 | |
Senior secured financing facility | 53,336 | 91,549 | |
Warehouse financing facilities | 313,493 | 330,848 | |
Mortgage payable | 18,710 | 18,710 | |
Construction loan | [1] | 0 | |
Junior subordinated notes | 33,663 | 35,821 | |
Significant Unobservable Inputs (Level 3) | CRE Whole Loan | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 2,065,504 | ||
Significant Unobservable Inputs (Level 3) | 5.75% Senior Unsecured Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
5.75% Senior Unsecured Notes | 132,090 | 138,435 | |
Carrying Value | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 1,970,891 | ||
Loan receivable - related party | 11,275 | 11,200 | |
Senior notes in CRE securitizations | 1,234,355 | 1,233,556 | |
Senior secured financing facility | 49,855 | 87,890 | |
Warehouse financing facilities | 311,276 | 328,288 | |
Mortgage payable | 18,296 | 18,244 | |
Construction loan | [1] | (2,225) | |
Junior subordinated notes | 51,548 | 51,548 | |
Carrying Value | CRE Whole Loan | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 2,038,787 | ||
Carrying Value | 5.75% Senior Unsecured Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
5.75% Senior Unsecured Notes | 147,662 | 147,507 | |
Fair Value | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loan receivable - related party | 9,672 | 8,385 | |
Senior notes in CRE securitizations | 1,178,414 | 1,179,313 | |
Senior secured financing facility | 53,336 | 91,549 | |
Warehouse financing facilities | 313,493 | 330,848 | |
Mortgage payable | 18,710 | 18,710 | |
Construction loan | [1] | 0 | |
Junior subordinated notes | 33,663 | 35,821 | |
Fair Value | CRE Whole Loan | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loans and receivables | 2,001,105 | 2,065,504 | |
Fair Value | 5.75% Senior Unsecured Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
5.75% Senior Unsecured Notes | $ 132,090 | $ 138,435 | |
[1] Deferred debt issuance costs related to the acquisition of a construction loan that has not been drawn on and has no fair value. |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Fair Value, by Balance Sheet Grouping) (Parenthetical) (Details) | Mar. 31, 2023 | Dec. 31, 2022 | Aug. 16, 2021 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.75% | ||
5.75% Senior Unsecured Notes | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.75% | 5.75% |
MARKET RISK AND DERIVATIVE IN_3
MARKET RISK AND DERIVATIVE INSTRUMENTS (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2020 USD ($) | Mar. 31, 2023 USD ($) Derivative | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Derivatives, Fair Value [Line Items] | ||||
Amortization expense reported in interest expense | $ 416,000 | |||
Terminated interest rate swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Realized loss on derivatives, net | $ (11,800,000) | |||
Gain (loss) on derivatives | (6,200,000) | $ (6,600,000) | ||
Amortization expense reported in interest expense | $ 479,000 | |||
Unrealized gains (loss) on derivatives, net | $ 233,000 | $ 256,000 | ||
Number of hedges terminated | Derivative | 2 | |||
Interest expense to fully amortize | $ 23,000 | $ 23,000 |
MARKET RISK AND DERIVATIVE IN_4
MARKET RISK AND DERIVATIVE INSTRUMENTS (Fair Value and Classification of Derivatives) (Details) - Designated as Hedging Instrument [Member] - Interest rate swaps - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivatives Fair Value [Line Items] | ||
Realized and Unrealized Gain (Loss) | $ (393) | $ (456) |
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest expense | Interest expense |
OFFSETTING OF FINANCIAL LIABI_3
OFFSETTING OF FINANCIAL LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Term warehouse financing facilities | ||
Gross Amounts of Recognized Liabilities | $ 311,276 | $ 328,288 |
Gross Amounts Offset on the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Liabilities Presented on the Consolidated Balance Sheets | 311,276 | 328,288 |
Gross Amounts Not Offset on the Consolidated Balance Sheets- Financial Instruments | 311,276 | 328,288 |
Gross Amounts Not Offset on the Consolidated Balance Sheets- Cash Collateral Pledged | 0 | 0 |
Net Amount | 0 | 0 |
Fair value of securities pledged against term warehouse financing facilities | $ 434,700 | $ 453,600 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Loss Contingencies [Line Items] | ||
Estimated litigation liability | $ 0 | $ 0 |
Construction of Student Housing Complex | ||
Loss Contingencies [Line Items] | ||
Unfunded loan commitments | 8,500,000 | |
Loan commitments | 24,300,000 | |
Commercial Real Estate Loans | CRE whole loans | ||
Loss Contingencies [Line Items] | ||
Loans held for investment, unfunded loan commitments | 143,600,000 | 158,200,000 |
Indemnification Agreement | ||
Loss Contingencies [Line Items] | ||
Estimated litigation liability | 1,200,000 | 1,200,000 |
PCM | ||
Loss Contingencies [Line Items] | ||
Outstanding demands to indemnify purchaser of residential mortgage loans | 3,300,000 | 3,300,000 |
PCM | Indemnification Agreement | ||
Loss Contingencies [Line Items] | ||
Outstanding litigation demands | $ 0 | $ 0 |